8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 29, 2021 (July 14, 2021)

HILLMAN SOLUTIONS CORP.

(Exact name of registrant as specified in its charter)

Delaware	001-39609	85-2096734
(State or other jurisdiction<br><br> <br>of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

10590 Hamilton Avenue

Cincinnati, OH 45231

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (513) 851-4900

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities<br>Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act (17 CFR 240.14a-12)
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¨	Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b))
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¨	Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	HLMN	The Nasdaq Stock Market LLC
Warrants to purchase one share of common stock, each at an exercise price of $11.50	HLMNW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Introductory Note

This Current Report on Form 8-K/A is filed as an amendment no. 1 (this “Amendment”) to the Current Report on Form 8-K filed on July 20, 2021 (the “Original Form 8-K”) by Hillman Solutions Corp. (formerly known as Landcadia Holdings III, Inc., “Landcadia”), a Delaware corporation (the “Company”) in order to provide additional financial statements and information required by Item 9.01 of the Original Form 8-K and to update certain disclosures contained in Item 2.01 of the Original Report in connection with providing such additional financial statements and information.

As previously reported in the Original Form 8-K, on July 14, 2021, the Company completed the previously announced business combination (the “Closing”) contemplated by an Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, and as it may be further amended or supplemented from time to time, the “Merger Agreement”), by and among Landcadia, Helios Sun Merger Sub, a wholly-owned subsidiary of Landcadia (“Merger Sub”), HMAN Group Holdings Inc., a Delaware corporation (“Hillman Holdco”) and CCMP Sellers’ Representative, LLC, a Delaware limited liability company in its capacity as the Stockholder Representative thereunder (the “Stockholder Representative”).

Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Hillman Holdco with Hillman Holdco surviving the merger as a wholly owned subsidiary of New Hillman, which was renamed “Hillman Solutions Corp.” (the “Merger” and together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). Unless the context otherwise requires, the “Company” refers to the registrant and its subsidiaries, including Landcadia and its subsidiaries, after the Closing, and “Landcadia” refers to the registrant prior to the Closing.

The Original Form 8-K incorporated by reference, among other items, the financial statements of Hillman Holdco as of and for the fiscal years ended December 26, 2020 and December 28, 2019, and as of and for the three months ended March 27, 2021 from the Definitive Proxy Statement / Prospectus filed by Landcadia with the Securities and Exchange Commission on July 24, 2021 (the “Proxy Statement”) and the financial statements of Landcadia as of and for the fiscal year ended December 31, 2020 and as of December 31, 2019 and for the period from March 13, 2018 (date of inception) through December 31, 2018 from the Proxy Statement.

The Original Form 8-K is amended by this Amendment to provide (i) the audited financial statements of Hillman Holdco as of and for the fiscal years ended December 31, 2020 and December 31, 2019 and (ii) the unaudited pro forma condensed combined financial information of Landcadia and Hillman Holdco as of and for the year ended December 31, 2020, each of which are included under Item 9.01 hereto, in accordance with the rules and regulations of the Securities and Exchange Commission, as well as the additional corresponding information for the relevant fiscal period. This Amendment No. 1 does not amend any other item of the Form 8-K or purport to provide an update or a discussion of any developments at the Company subsequent to the filing date of the Form 8-K.

Item2.01 Completion of Acquisition of Assets.

Management’s Discussionand Analysis of Financial Condition and Results of Operations

The Management’s Discussion and Analysis of Financial Condition and Results of Operations of Hillman Holdco as of and for the thirteen and twenty six weeks ended June 26, 2021 is included in this Amendment as Exhibit 99.1 and is incorporated herein by reference*.*

Item9.01 Financial Statements and Exhibits.

(a) Financial Statements

The financial statements of Hillman Holdco as of and for the thirteen and twenty-six weeks ended June 26, 2021 and June 27, 2020 are attached hereto as Exhibit 99.2 and are incorporated by reference herein.

(b) Pro forma financialinformation

The unaudited pro forma condensed combined financial information of Landcadia and Hillman Holdco as of and for the twenty six weeks ended June 26, 2021 is set forth in Exhibit 99.3 and is incorporated herein by reference.

(d) Exhibits:

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated as of January 24, 2021, by and among Landcadia Holdings III, Inc., Helios Sun Merger Sub, Inc., HMAN Group Holdings Inc. and CCMP Sellers’ Representative, LLC, solely in its capacity as representative of the stockholders of HMAN Group Holdings Inc. (incorporated by reference to Exhibit 2.1 of Landcadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
2.2	First Amendment to Merger Agreement, dated as of March 12, 2021, by and among Landcadia Holdings III, Inc., Helios Sun Merger Sub, Inc., HMAN Group Holdings Inc. and CCMP Sellers’ Representative, LLC, solely in its capacity as representative of the stockholders of HMAN Group Holdings Inc. (incorporated by reference to Exhibit 2.2 of Landcadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
3.1	Third Amended and Restated Certificate of Incorporation of Hillman Solutions Corp.
3.2	Amended and Restated Bylaws of Hillman Solutions Corp.
4.1	Amended and Restated Warrant Agreement, dated as of November 13, 2020, between Landcadia and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.2 of Landcadia’s Quarterly Report on Form 10-Q (File No. 001-39609), filed with the SEC on November 16, 2020).
4.2	Amended and Restated Declaration of Trust. (incorporated by reference to Exhibit 4.1 to the The Hillman Companies, Inc.’s Registration Statement No. 333-44733 on Form S-2)
4.3	Preferred Securities Guarantee. (incorporated by reference to Exhibit 4.3 to the The Hillman Companies, Inc.’s Registration Statement No. 333-44733 on Form S-2)
10.1	Form of Subscription Agreement, dated January 24, 2021, by and between Landcadia Holdings III, Inc. and the subscribers party thereto (incorporated by reference to Exhibit 10.3 of Landcadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
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10.2	Amended and Restated Registration Rights Agreement, dated July 14, 2021, by and among Hillman Solutions Corp., Jefferies Financial Group Inc., TFJ, LLC, CCMP Capital Investors III, L.P., CCMP Capital Investors (Employee) III, L.P., CCMP Co-Invest III A, L.P., Oak Hill Capital Partners III, L.P., Oak Hill Capital Management Partners III, L.P. and OHCP III HC RO, L.P.
10.3	Form Hillman Solutions Corp. 2021 Equity Incentive Plan (incorporated by reference to 10.1 of Landcadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.4	Amended and Restated Letter Agreement, dated as of January 24, 2021, by and among Landcadia Holdings III, Inc., its officers, its directors, TJF, LLC and Jefferies Financial Group Inc. (incorporated by reference to Exhibit 10.5 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.5	Form of Indemnification Agreement
10.7	Form Hillman Solutions Corp. 2021 Employee Stock Purchase Plan (incorporated by reference to 10.2 of Landcadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.8	Hillman Solutions Corp. 2021 Cash Incentive Plan
10.9	Form of Non-Qualified Stock Option Award Agreement under the Hillman Solutions Corp. 2021 Equity Incentive Plan
10.10	Form of Non-Qualified Stock Option Award Agreement for Non-Employee Directors under the Hillman Solutions Corp. 2021 Equity Incentive Plan
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10.11	Form of Restricted Stock Unit Award Agreement under the Hillman Solutions Corp. 2021 Equity Incentive Plan
10.12	Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the Hillman Solutions Corp. 2021 Equity Incentive Plan
10.13	Form of Management Lock-Up Agreement
10.14	Employment Agreement between Robert Kraft and The Hillman Group, Inc. dated October 2, 2017 (incorporated by reference to Exhibit 10.17 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.15	Employment Agreement between Douglas Cahill and The Hillman Group, Inc. dated July 25, 2019 (incorporated by reference to Exhibit 10.18 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.16	Employment Agreement between Randall Fagundo and The Hillman Group, Inc. dated August 10, 2018 (incorporated by reference to Exhibit 10.19 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
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10.17	Employment Agreement between George Murphy and The Hillman Group, Inc. dated October 1, 2018 (incorporated by reference to Exhibit 10.20 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.18	Employment Agreement between Jarrod Streng and The Hillman Group, Inc. dated October 1, 2018 (incorporated by reference to Exhibit 10.21 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.19	ABL Credit Agreement, dated as of May 31, 2018, by and among Hillman Investment Company, a Delaware corporation, The Hillman Companies, Inc., a Delaware corporation, The Hillman Group Canada ULC, a British Columbia unlimited liability company, the other loan parties party thereto, the Lenders and Issuing Banks from time to time party hereto, including Barclays Bank PLC, and Barclays, in its capacities as administrative agent and collateral agent and the Swingline Lender, with Barclays, Jefferies Finance LLC, Citizens Bank, N.A. and MUFG Union Bank, N.A. as joint lead arrangers and joint bookrunners, Credit Suisse Loan Funding LLC and PNC Bank, National Association, as a documentation agent (incorporated by reference to Exhibit 10.14 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.20	Amendment No. 1, dated as of November 15, 2019 (incorporated by reference to Exhibit 10.16 of Lancadia’s Registration Statement on Form S-4 (Reg. No. 333-252693), filed with the SEC on June 11, 2021).
10.21	Amendment No. 2, dated as of July 14, 2021, by and among Hillman Investment Company, a Delaware corporation, The Hillman Group, Inc., a Delaware corporation, The Hillman Group Canada ULC, a British Columbia unlimited liability company, the Subsidiary Guarantors, the Released Party, the Lenders listed on the signature pages hereto and Barclays Bank PLC, in its capacity as administrative agent for the Lenders.
10.22	Credit Agreement, dated as of July 14, 2021, by and among The Hillman Group, Inc., a Delaware corporation, Hillman Investment Company, a Delaware corporation, the Lenders from time to time party hereto and Jefferies Finance LLC, in its capacities as administrative agent and collateral agent, with Jefferies and Barclays Bank PLC as joint lead arrangers and joint bookrunners.
21.1	List of Subsidiaries
99.1*	Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company as of and for the thirteen and twenty six weeks ended June 26, 2021.
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99.2*	Audited financial statements of HMAN Group Holdings, Inc. as of and for the thirteen and twenty-six weeks ended June 26, 2021 and June 27, 2020.
99.3*	Unaudited Pro Forma Condensed Combined Financial Information as of and for the twenty six weeks ended June 26, 2021.

* Filed herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	HILLMAN SOLUTIONS CORP.
	By:	/s/ Douglas J. Cahill
Dated: July 29, 2021		Name:	Douglas J. Cahill
		Title:	Chairman, President and Chief Executive Officer

Exhibit 99.1

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION

AND RESULTS OF OPERATIONS OF HILLMAN

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The following discussion provides information which the Company’s management believes is relevant to an assessment and understanding of the Company’s operations and financial condition. This discussion should be read in conjunction with the condensed consolidated financial statements and accompanying notes in addition to the consolidated statements and notes thereto included in the Financial Statements for the year ended December 26, 2020.

General

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Hillman is one of the largest providers of hardware-related products and related merchandising services to retail markets in North America. Our principal business is operated through our wholly-owned subsidiary, The Hillman Group, Inc. and its wholly-owned subsidiaries (collectively, “Hillman Group”). Hillman Group sells its products to hardware stores, home centers, mass merchants, pet supply stores, and other retail outlets principally in the United States, Canada, Mexico, Latin America, and the Caribbean. Product lines include thousands of small parts such as fasteners and related hardware items; threaded rod and metal shapes; keys, key duplication systems, and accessories; builder's hardware; personal protective equipment, such as gloves and eye-wear; and identification items, such as tags and letters, numbers, and signs. We support product sales with services that include design and installation of merchandising systems, maintenance of appropriate in-store inventory levels, and break-fix for our robotics kiosks.

On July 14, 2021, subsequent to quarter end, the Company, and Landcadia Holdings III, Inc. (“Landcadia” and after the Business Combination described herein, “New Hillman”), a special purpose acquisition company ("SPAC") consummated the previously announced business combination (the “Closing”) pursuant to the terms of the Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, and as it may be further amended or supplemented from time to time, the “Merger Agreement”). In accordance with the terms and subject to the conditions set forth in the Merger Agreement, Landcadia paid aggregate consideration in the form of New Hillman common stock calculated as described herein and equal to a value of approximately (i) $911,300,000 plus (ii) $28,280,000, such amount being the value of 2,828,000 shares of Class B common stock of Landcadia, valued at $10.00 per share, that TJF, LLC (“TJF Sponsor”) and Jefferies Financial Group Inc., (“JFG Sponsor” and, together with TJF Sponsor, the “Sponsors”) agreed to forfeit at the Closing.

In connection with the Closing, the Company entered into a new credit agreement with Jefferies Finance LLC, as administrative agent, and the lenders and other parties thereto (the “Term Credit Agreement”), which provided for a new funded term loan facility of $835.0 million and a delayed draw term loan facility of $200.0 million (of which $16.0 million was drawn). The Company also also entered into an amendment to their existing asset-based revolving credit agreement (the “ABL Amendment”) with Barclays Bank PLC, as administrative agent, and the lenders and other parties thereto (the “ABL Credit Agreement”), increasing the aggregate commitments thereunder to $250.0 million, extended the maturity and conformed certain provisions to the Term Credit Agreement. The proceeds of the funded term loans under the Term Credit Agreement and revolving credit loans under the ABL Credit Agreement were used, together with other available cash, to (1) refinance in full all outstanding term loans and to terminate all outstanding commitments under the credit agreement, dated as of May 31, 2018, (2) refinance outstanding revolving credit loans, and (3) redeem in full senior notes due July 15, 2022 (the “6.375% Senior Notes”).

In anticipation of the Business Combination and the refinancings described above, on July 13, 2021, the Company delivered a notice to redeem in full 11.6% Junior Subordinated Debentures due September 30, 2027 (the “Junior Subordinated Debentures”) issued under the Indenture, dated as of September 5, 1997 (as amended and supplemented, the “Debentures Indenture”), between The Hillman Companies and The Bank of New York Mellon, a New York banking corporation, as Trustee (the “Trustee”) and deposited an amount with the Trustee sufficient to satisfy and discharge the Debentures Indenture, which is no longer in effect. Notices to redeem 4,217,837 trust preferred securities (the “Trust Preferred Securities”) issued in a public offering by the Hillman Group Capital Trust ("Trust") and 130,449 of trust common securities (the “Trust Common Securities”) issued by the Trust to Hillman Companies were also delivered on July 13, 2021. Upon the payment of the redemption price for the Debentures on August 12, 2021, the Trust will redeem the Trust Preferred Securities and the Trust Common Securities, which as of August 12, 2021 will no longer be deemed to be outstanding. The last day of trading for the Trust Preferred Securities on the New York Stock Exchange (the “NYSE”) will be August 11, 2021 and the Company is voluntarily delisting the Trust Preferred Securities from the NYSE.

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On April 16, 2021, the Company completed the acquisition of Oz Post International, LLC ("OZCO"), a leading manufacturer of superior quality hardware that offers structural fasteners and connectors used for decks, fences and other outdoor structures, for a total purchase price of $39,102. The Company entered into an amendment ("OZCO Amendment") to the term loan credit agreement dated May 31, 2018 (the "2018 Term Loan"), which provided $35,000 of incremental term loan funds to be used to finance the acquisition. Refer to Note 4 - Acquisitions for additional information.

Current Economic Conditions

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Our business is impacted by general economic conditions in the North American and international markets, particularly the U.S. and Canadian retail markets including hardware stores, home centers, mass merchants, and other retailers.

In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China, and has since spread to a number of other countries, including the United States and Canada. In March 2020, the World Health Organization characterized COVID-19 as a pandemic. Efforts to contain the spread of COVID-19 intensified during our fiscal 2020 second quarter and remained in effect throughout our third quarter. Most states and municipalities within the U.S. enacted temporary closures of businesses, issued quarantine orders and took other restrictive measures in response to the COVID-19 pandemic. Within the United States and Canada, our business has been designated an essential business, which allows us to continue to serve customers that remain open.

While all of our operations are located in North America, we participate in a global supply chain, and the existence of a worldwide pandemic and the reactions of governments around the world in response to COVID-19 to regulate the flow of labor and products began to impact our business in March 2020. If we need to close any of our facilities or a critical number of our employees become too ill to work, our distribution network could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse business consequences due to COVID-19, demand for our products could also be materially adversely affected in a rapid manner. The Company continues to experience customer demand both during the thirteen and twenty-six weeks ended June 26, 2021 and during the subsequent period. Our teams continue to monitor demand disruption and there can be no assurance as to the level of demand that will prevail through the remainder of fiscal 2021. A large portion of our customers continue to operate and sell our products, with some customers reducing operations or restricting some access to portions of the retail space. The magnitude of the financial impact on our quarterly and annual results is dependent on the duration of the COVID-19 pandemic and how quickly the U.S. and Canada economies resume normal operations.

An extended period of global supply chain, workforce availability, and economic disruption could materially affect the Company's business, the results of operations, financial condition, access to sources of liquidity, and the carrying value of goodwill and intangible assets. While a triggering event did not occur during the thirteen and twenty-six weeks ended June 26, 2021, a prolonged COVID-19 pandemic could negatively impact net sales growth, change key assumptions and other global and regional macroeconomic factors that could result in future impairment charges for goodwill, indefinite-lived intangible assets and definite lived intangible assets. The impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot predict the extent to which our business, results of operations, financial condition, or liquidity will ultimately be impacted.

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We are exposed to the risk of unfavorable changes in foreign currency exchange rates for the U.S. dollar versus local currency of our suppliers located primarily in China and Taiwan. We purchase a significant variety of our products for resale from multiple vendors located in China and Taiwan. The purchase price of these products is routinely negotiated in U.S. dollar amounts rather than the local currency of the vendors and our suppliers' profit margins decrease when the U.S. dollar declines in value relative to the local currency. This puts pressure on our suppliers to increase prices to us. The U.S. dollar increased in value relative to the CNY by approximately 1.7% in 2019, declined by 6.5% in 2020, and declined by 1.3% during the twenty-six weeks ended June 26, 2021. The U.S. dollar declined in value relative to the Taiwan dollar by approximately 0.2% in 2019, declined by 7.9% in 2020, and declined by 0.8% during the twenty-six weeks ended June 26, 2021.

In addition, the negotiated purchase price of our products may be dependent upon market fluctuations in the cost of raw materials such as steel, zinc, and nickel used by our vendors in their manufacturing processes. The final purchase cost of our products may also be dependent upon inflation or deflation in the local economies of vendors in China and Taiwan that could impact the cost of labor used in the manufacturing of our products. We identify the directional impact of changes in our product cost, but the quantification of each of these variable impacts cannot be measured as to the individual impact on our product cost with a sufficient level of precision.

We are also exposed to risk of unfavorable changes in the Canadian dollar exchange rate versus the U.S. dollar. Our sales in Canada are denominated in Canadian dollars while a majority of the products are sourced in U.S. dollars. A weakening of the Canadian dollar versus the U.S. dollar results in lower sales in terms of U.S. dollars while the cost of sales remains unchanged. We have a practice of hedging some of our Canadian subsidiary's purchases denominated in U.S. dollars. The U.S. dollar declined in value relative to the Canadian dollar by approximately 4.1% in 2019, declined by 1.9% in 2020, and declined by 4.2% during the twenty-six weeks ended June 26, 2021. We may take pricing action, when warranted, in an attempt to offset a portion of product cost increases. The ability of our operating divisions to institute price increases and seek price concessions, as appropriate, is dependent on competitive market conditions.

Results of Operations

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The following analysis of results of operations includes a brief discussion of the factors that affected our operating results and a comparative analysis of the thirteen weeks ended June 26, 2021 and the thirteen weeks ended June 27, 2020.

Thirteen weeks ended June 26, 2021 vs the Thirteen weeks endedJune 27, 2020

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	Thirteen Weeks Ended<br> <br>June 26, 2021						Thirteen Weeks Ended<br> <br>June 27, 2020
(dollars in thousands)	Amount			% of<br> <br>Net Sales			Amount			% of<br> <br>Net Sales
Net sales	$	375,715			100.0	%	$	346,710			100.0	%
Cost of sales (exclusive of depreciation and amortization shown separately below)		215,967			57.5	%		196,402			56.6	%
Selling, general and administrative expenses		111,662			29.7	%		94,970			27.4	%
Depreciation		15,270			4.1	%		17,230			5.0	%
Amortization		15,414			4.1	%		14,865			4.3	%
Other (income) expense		(2,107	)		(0.6	)%		2,515			0.7	%
Income from operations		19,509			5.2	%		20,728			6.0	%
Interest expense, net of investment income		22,217			5.9	%		26,968			7.8	%
Mark-to-market adjustment of interest rate swap		(751	)		(0.2	)%		(308	)		(0.1	)%
Income (loss) before income taxes		(1,957	)		(0.5	)%		(5,932	)		(1.7	)%
Income tax expense (benefit)		1,428			0.4	%		(895	)		(0.3	)%
Net income (loss)	$	(3,385	)		(0.9	)%	$	(5,037	)		(1.5	)%
Adjusted EBITDA^(1)^	$	64,472			17.2	%	$	61,610			17.8	%
(1)	Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information,<br>including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.
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Net Sales

Net sales for the second quarter of 2021 were $375.7 million, an increase of approximately $29.0 million compared to net sales of $346.7 million for the second quarter of 2020. Sales of keys and key accessories increased $19.6 million, key and key accessory sales were negatively impacted in the prior year by reduced retail foot traffic and restricted access to key duplicating kiosks as a result of COVID-19. Sales of hardware products increased by $10.6 million driven by strong retail demand. Sales in Canada increased $11.2 million primarily driven by strong demand with big box retailers. Sales in Canada were negatively impacted by COVID-19 restrictions in 2020, we continue to see restrictions in certain provinces and retail locations in 2021. These increases were offset by a decrease in sales of personal protective equipment of $17.0 million due to lower demand for COVID-19 protective and cleaning equipment in the second quarter of 2021.

Cost of Sales

Our cost of sales was $216.0 million, or 57.5% of net sales, in the second quarter of 2021, an increase of approximately $19.6 million compared to $196.4 million, or 56.6% of net sales, in the second quarter of 2020. The increase of 0.9% in cost of sales, expressed as a percent of net sales, in the second quarter of 2021 compared to the second quarter of 2020 was primarily due to inflation along with the higher mix of sales of construction fastener products in the second quarter of 2021. ****

Expenses

Selling, general, and administrative ("SG&A") expenses were approximately $111.7 million in the thirteen weeks ended June 26, 2021, an increase of approximately $16.7 million, compared to $95.0 million in the thirteen weeks ended June 27, 2020. The following changes in underlying trends impacted the change in operating expenses:

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•	Selling expense was $40.0 million in the second quarter of 2021, an increase of $5.0 million compared to $35.0 million in the second<br>quarter of 2020. The increase in selling expense was primarily due to increased marketing, variable compensation, and travel and entertainment<br>expense in the second quarter of 2021.

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•	Warehouse and delivery expenses were $44.2 million in the second quarter of 2021, an increase of $4.9 million compared to $39.3 million<br>in the second quarter of 2020. The additional expense was primarily driven by higher sales volume and inflation.

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General and administrative (“G&A”) expenses were $27.4 million in the second quarter of 2021, an increase of $6.7<br>million compared to $20.7 million in the second quarter of 2020. In the second quarter of 2021 we incurred $9.6 million of legal and consulting<br>expense associated with the pending merger with Landcadia along with increased legal fees associated with our litigation with KeyMe (see<br>Note 6 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information) an increase<br>of $7.1 million compared to the second quarter of 2020.

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Depreciation expense was $15.3 million in the second quarter of 2021 compared to depreciation expense of $17.2 million in the second quarter of 2020. Amortization expense was $15.4 million in the second quarter of 2021 which was comparable to the second quarter of 2020.

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Other income was $2.1 million in the second quarter of 2021 compared to other expense of $2.5 million in the second quarter of 2020. Other income in the second quarter of 2021 was comprised primarily of a $1.2 million gain on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob, (see Note 13 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) along with exchange rate gains of $0.9 million. In the second quarter of 2020 other expense was comprised of a $3.1 million loss on the revaluation of the contingent consideration associated with the acquisition of Resharp, (see Note 13 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) partially offset by exchange rate losses of $0.2 million.

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Twenty-six weeks ended June 26, 2021 vs the Twenty-six weeksended June 27, 2020

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	Twenty-six Weeks Ended<br> <br>June 26, 2021						Twenty-six Weeks Ended<br> <br>June 27, 2020
(dollars in thousands)	Amount			% of<br> <br>Net Sales			Amount			% of<br> <br>Net Sales
Net sales	$	716,996			100.0	%	$	642,546			100.0	%
Cost of sales (exclusive of depreciation and amortization shown separately below)		417,265			58.2	%		362,813			56.5	%
Selling, general and administrative expenses		214,841			30.0	%		184,723			28.7	%
Depreciation		31,611			4.4	%		34,747			5.4	%
Amortization		30,323			4.2	%		29,713			4.6	%
Other (income) expense		(2,333	)		(0.3	)%		376			0.1	%
Income from operations		25,289			3.5	%		30,174			4.7	%
Interest expense, net of investment income		44,293			6.2	%		53,205			8.3	%
Mark-to-market adjustment of interest rate swap		(1,424	)		(0.2	)%		1,942			0.3	%
Income (loss) before income taxes		(17,580	)		(2.5	)%		(24,973	)		(3.9	)%
Income tax expense (benefit)		(5,225	)		(0.7	)%		(5,132	)		(0.8	)%
Net income (loss)	$	(12,355	)		(1.7	)%	$	(19,841	)		(3.1	)%
Adjusted EBITDA^(1)^	$	112,278			15.7	%	$	103,131			16.1	%

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(1)	Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information,<br>including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.

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Net Sales

Net sales for the twenty-six weeks ended June 26, 2021 were $717.0 million, an increase of approximately $74.5 million compared to net sales of $642.5 million for the twenty-six weeks ended June 27, 2020. Key and engraving sales increased $23.7 million and sales in Canada increased $19.3 million . Key and engraving sales and sales in Canada were both negatively impacted by low retail foot traffic and limited access to key and engraving machines in the twenty six weeks ended June 27, 2020 due to COVID-19. Sales of hardware products increased by $26.9 million driven by strong retail demand. Sales of personal protective equipment increased by $4.5 million due to continued demand for gloves and face masks .

Cost of Sales

Our cost of sales was $417.3 million, or 58.2% of net sales, in the twenty-six weeks ended June 26, 2021, an increase of approximately $54.5 million compared to $362.8 million, or 56.5% of net sales, in the twenty-six weeks ended June 27, 2020. The increase of 1.7% in cost of sales, expressed as a percent of net sales, in 2021 compared to the twenty-six weeks ended June 27, 2020 was primarily due to inflation along with the higher mix of sales of construction fastener products in the twenty-six weeks ended June 26, 2021.

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Expenses

Selling, general, and administrative ("SG&A") expenses were approximately $214.8 million in the twenty-six weeks ended June 26, 2021, an increase of approximately $30.1 million, compared to $184.7 million in the twenty-six weeks ended June 27, 2020. The following changes in underlying trends impacted the change in operating expenses:

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•	Selling expense was $77.4 million in the twenty-six weeks ended June 26, 2021, an increase of $5.4 million compared to $72.0 million<br>in the twenty-six weeks ended June 27, 2020. The increase in selling expense was primarily due to increased marketing, variable compensation,<br>and travel and entertainment expense in the twenty-six weeks ended June 26, 2021.

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•	Warehouse and delivery expenses were $84.4 million in the twenty-six weeks ended June 26, 2021, an increase of $9.6 million compared<br>to $74.8 million in the twenty-six weeks ended June 27, 2020. The additional expense was primarily driven by higher sales volume and inflation.

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•

General and administrative (“G&A”) expenses were $53.0 million in the twenty-six weeks ended June 26, 2021, an increase<br>of $15.0 million compared to $38.0 million in the twenty-six weeks ended June 27, 2020. In the twenty-six weeks ended June 26, 2021 we<br>incurred $18.4 million of legal and consulting expense associated with the pending merger with Landcadia along with increased legal fees<br>associated with our litigation with KeyMe (see Note 6 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial<br>Statements for additional information) an increase of $14.8 million compared to the twenty-six weeks ended June 27, 2020.

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Depreciation expense was $31.6 million in the twenty-six weeks ended June 26, 2021 compared to depreciation expense of $34.7 million in the twenty-six weeks ended June 27, 2020. Amortization expense was $30.3 million in the twenty-six weeks ended June 26, 2021 which was comparable to $29.7 million in the twenty-six weeks ended June 27, 2020.

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Other income was $2.3 million in the twenty-six weeks ended June 26, 2021 compared to other expense of $0.4 million in the twenty-six weeks ended June 27, 2020. Other income in the twenty-six weeks ended June 26, 2021 was comprised primarily of a $1.2 million gain on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob, (see Note 13 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) along with exchange rate gains of $1.2 million. In the twenty-six weeks ended June 27, 20200 other expense was comprised of exchange rate losses of $1.6 million partially offset by of a $1.3 million gain on the revaluation of the contingent consideration associated with the acquisition of Resharp, (see Note 13 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information).

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Results of Operations – Operating Segments

The following tables provides supplemental information regarding our net sales and profitability by operating segment for the thirteen and twenty-six weeks ended June 26, 2021 and the thirteen and twenty-six weeks ended June 27, 2020 (dollars in thousands):

Hardware and Protective Solutions

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	Thirteen Weeks Ended<br> <br>June 26, 2021		Thirteen Weeks Ended<br> <br>June 27, 2020		Twenty-six Weeks Ended<br> <br>June 26, 2021		Twenty-six Weeks Ended<br> <br>June 27, 2020
Hardware and Protective Solutions
Revenues	$	263,129	$	269,499	$	514,058	$	482,676
Segment income from operations		9,995		24,423		16,045		33,276
Adjusted EBITDA^(1)^		36,114		45,704		65,146		71,366
(1)	Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information,<br>including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.
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Thirteen weeks ended June 26, 2021 vs the Thirteen weeks endedJune 27, 2020

Net Sales

Net sales for our Hardware and Protective Solutions operating segment decreased by $6.4 million in thirteen weeks ended June 26, 2021 to $263.1 million as compared to $269.5 million in the thirteen weeks ended June 27, 2020. Sales of personal protective equipment decreased by $17.0 million due to high demand for gloves and face masks in 2020 as compared to the same period in 2021. This was partially offset by sales of hardware products, which increased by $10.6 million driven by strong retail demand.

Income from Operations

Income from operations of our Hardware and Protective Solutions operating segment decreased by approximately $14.4 million in the thirteen weeks ended June 26, 2021 to $10.0 million as compared to $24.4 million in the thirteen weeks ended June 27, 2020. The decrease was driven by the decreases in sales along with increased expenses.

•	Cost of good sold increased by approximately $3.1 million in the thirteen weeks ended June 26, 2021 to $164.7 million as compared<br>to $161.6 million in the thirteen weeks ended June 27, 2020. Cost of sales as a percentage of net sales was 62.6% in the thirteen weeks<br>ended June 26, 2021, an increase of 2.6% from 60.0% in the thirteen weeks ended June 27, 2020. The increase in cost of sales as a percentage<br>of net sales was primarily driven by inflation along with the higher mix of sales of construction fastener products in the thirteen weeks<br>ended June 26, 2021.
•	Warehouse expense increased $3.1 million in the thirteen weeks ended June 26, 2021 compared to the thirteen weeks ended June 27, 2020.<br>The additional expense was primarily driven by higher sales volume and inflation.
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•	G&A expense increased $1.7 million in the thirteen weeks ended June 26, 2021 compared to the thirteen weeks ended June 27, 2020.<br>The additional expense was primarily due to increased legal and consulting expense associated with the pending merger with Landcadia.
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Twenty-six weeks ended June 26, 2021 vs the Twenty-six weeksended June 27, 2020

Net Sales

Net sales for our Hardware and Protective Solutions operating segment increased by $31.4 million in twenty-six weeks ended June 26, 2021 to $514.1 million as compared to $482.7 million in the twenty-six weeks ended June 27, 2020. Sales of hardware products increased by $26.9 million driven by strong retail demand. Sales of personal protective equipment increased by $4.5 million due to continued demand for gloves and face masks.

Income from Operations

Income from operations of our Hardware and Protective Solutions operating segment decreased by approximately $17.2 million in the twenty-six weeks ended June 26, 2021 to $16.0 million as compared to $33.3 million in the twenty-six weeks ended June 27, 2020. The decrease was driven by the decreases in sales along with increased expenses.

•	Cost of good sold increased by approximately $33.1 million in the twenty-six weeks ended June 26, 2021 to $514.1 million as compared<br>to $482.7 million in the twenty-six weeks ended June 27, 2020. Cost of sales as a percentage of net sales was 63.2% in the twenty-six<br>weeks ended June 26, 2021, an increase of 2.8% from 60.4% in the twenty-six weeks ended June 27, 2020. The increase in cost of sales as<br>a percentage of net sales was primarily driven inflation along with the higher mix of sales of construction fastener products in the twenty-six<br>weeks ended June 26, 2021.
•	Warehouse expense increased $8.8 million in the twenty-six weeks ended June 26, 2021 compared to the twenty-six weeks ended June 26,<br>2021. The additional expense was primarily driven by higher sales volume and inflation.
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•	G&A expense increased $6.5 million in the twenty-six weeks ended June 26, 2021 compared to the twenty-six weeks ended June 26,<br>2021. The additional expense was primarily due to increased legal and consulting expense associated with the pending merger with Landcadia.
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Robotics and Digital Solutions

	Thirteen Weeks Ended<br> <br>June 26, 2021		Thirteen Weeks Ended<br> <br>June 27, 2020			Twenty-six Weeks Ended<br> <br>June 26, 2021		Twenty-six Weeks Ended<br> <br>June 27, 2020
Robotics and Digital Solutions
Revenues	$	66,351	$	42,198		$	122,230	$	98,505
Segment income from operations		6,546		(4,510	)		6,700		1,386
Adjusted EBITDA^(1)^		23,696		12,373			41,113		29,943
(1)	Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information,<br>including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.
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Thirteen weeks ended June 26, 2021 vs the Thirteen weeks endedJune 27, 2020

Net Sales

Net sales in our Robotics and Digital Solutions operating segment increased by $24.2 million in the thirteen weeks ended June 26, 2021 to $66.4 million as compared to $42.2 million in the thirteen weeks ended June 27, 2020. The increased sales were primarily due to an increase of $19.6 million in keys sales along with an increase of $4.5 million in engraving sales. Key sales in the second quarter of 2020 were negatively impacted by restricted access to retail key duplication services as a result of COVID-19 in certain markets. As the economy has started to reopen, our service team has worked closely with our customers to restore access to key duplicating services in 2021.

Income from Operations

Income from operations of our Robotics and Digital Solutions operating segment increased by approximately $11.1 million in the thirteen weeks ended June 26, 2021 to $6.5 million as compared to a $4.5 million loss in the thirteen weeks ended June 27, 2020. The increase was primarily due to the increased sales partially offset by increased legal and consulting expense associated with the pending merger with Landcadia along with increased legal fees associated with our litigation with KeyMe (see Note 6 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information), along with the gain on the revaluation of contingent consideration included in other income in the thirteen weeks ended June 26, 2021. In the second quarter of 2020 we recorded a loss of $3.1 million related to the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob, (see Note 13 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information). In the first quarter of 2021, the contingent consideration revaluation adjustment was a gain of $1.2 million.

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Twenty-six weeks ended June 26, 2021 vs the Twenty-six weeksended June 27, 2020

Net Sales

Net sales in our Robotics and Digital Solutions operating segment increased by $23.7 million in the twenty-six weeks ended June 26, 2021 to $122.2 million as compared to $98.5 million in the twenty-six weeks ended June 27, 2020. The increased sales were primarily due to an increase of $18.4 million in keys sales along with an increase of $5.3 million in engraving sales. Key sales in the second quarter of 2020 were negatively impacted by restricted access to retail key duplication services as a result of COVID-19 in certain markets. As the economy has started to reopen, our service team has worked closely with our customers to restore access to key duplicating services in 2021.

Income from Operations

Income from operations of our Robotics and Digital Solutions operating segment increased by approximately $5.3 million in the twenty-six weeks ended June 26, 2021 to $6.7 million as compared to $1.4 million in the twenty-six weeks ended June 27, 2020. The increase was primarily due to the increased sales partially offset by increased legal and consulting expense associated with the pending merger with Landcadia along with increased legal fees associated with our litigation with KeyMe (see Note 6 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information), along with increased sales and marketing expenses.

Canada

	Thirteen Weeks Ended<br> <br>June 26, 2021		Thirteen Weeks Ended<br> <br>June 27, 2020		Twenty-six Weeks Ended<br> <br>June 26, 2021		Twenty-six Weeks Ended<br> <br>June 27, 2020
Canada
Revenues	$	46,235	$	35,013	$	80,708	$	61,365
Segment income (loss) from operations		2,968		815		2,544		(4,488	)
Adjusted EBITDA^(1)^		4,662		3,533		6,019		1,822
(1)	Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information,<br>including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.
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Thirteen weeks ended June 26, 2021 vs the Thirteen weeks endedJune 27, 2020

Net Sales

Net sales in our Canada operating segment increased by $11.2 million in the thirteen weeks ended June 26, 2021 to $46.2 million as compared to $35.0 million in the thirteen weeks ended June 27, 2020. The increase was primarily due to strong demand for fastener and hardware products with big box retailers. Sales in Canada were negatively impacted by COVID-19 restrictions in 2020, we continue to see restrictions in certain provinces and retail locations in 2021.

Income from Operations

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Income from operations of our Canada operating segment increased by approximately $2.2 million in the thirteen weeks ended June 26, 2021 to $3.0 million as compared to $0.8 million in the thirteen weeks ended June 27, 2020. The increase in sales was partially offset by increased variable labor and delivery costs.

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Twenty-six weeks ended June 26, 2021 vs the Twenty-six weeksended June 27, 2020

Net Sales

Net sales in our Canada operating segment increased by $19.3 million in the twenty-six weeks ended June 26, 2021 to $80.7 million as compared to $61.4 million in the twenty-six weeks ended June 27, 2020. The increase was primarily due to strong demand for fastening and hardware products with big box retailers. Sales in Canada were negatively impacted by COVID-19 restrictions in 2020, we continue to see restrictions in certain provinces and retail locations in 2021.

Income from Operations

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Income from operations of our Canada operating segment increased by approximately $7.0 million in the twenty-six weeks ended June 26, 2021 to $2.5 million as compared to a loss of $4.5 million in the twenty-six weeks ended June 27, 2020. The increase in sales was partially offset by increased variable labor and delivery costs, partially offset by a $2.7 million decrease in restructuring related charges as compared to 2020 (see Note 9 - Restructuring of the Notes to Condensed Consolidated Financial Statements for additional information).

Non-GAAP Financial Measures

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Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our businesses as well as to assist in the evaluation of underlying trends in our businesses. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of our businesses and from intangible assets recognized in business combinations. It is also unaffected by our capital and tax structures, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources and capital to our operating segments. Additionally, we believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.

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The following table presents a reconciliation of Net loss, the most directly comparable financial measures under GAAP, to Adjusted EBITDA for the periods presented:

	Thirteen Weeks Ended<br> <br>June26, 2021			Thirteen Weeks Ended<br> <br>June27, 2020			Twenty-six Weeks Ended<br> <br>June26, 2021			Twenty-six Weeks Ended<br> <br>June27, 2020
Net loss	$	(3,385	)	$	(5,037	)	$	(12,355	)	$	(19,841	)
Income tax benefit		1,428			(895	)		(5,225	)		(5,132	)
Interest expense, net		19,159			23,878			38,178			47,058
Interest expense on junior subordinated debentures		3,152			3,184			6,304			6,336
Investment income on trust common securities		(94	)		(94	)		(189	)		(189	)
Depreciation		15,270			17,230			31,611			34,747
Amortization		15,414			14,865			30,323			29,713
Mark-to-market adjustment on interest rate swaps		(751	)		(308	)		(1,424	)		1,942
EBITDA	$	50,193		$	52,823		$	87,223		$	94,634
Stock compensation expense		1,796			1,524			3,537			2,669
Management fees		88			196			214			321
Restructuring ^(1)^		—			980			109			2,710
Litigation expense ^(2)^		6,322			1,893			10,282			2,674
Acquisition and integration expense ^(3)^		3,299			661			8,139			990
Buy-back expense ^(4)^		1,350			—			1,350			—
Anti-dumping duties ^(5)^		2,636			—			2,636			—
Facility closures ^(6)^		—			433			—			433
Change in fair value of contingent consideration		(1,212	)		3,100			(1,212	)		(1,300	)
Adjusted EBITDA	$	64,472		$	61,610		$	112,278		$	103,131
(1)	Restructuring includes restructuring costs associated with restructuring in our Canada segment announced in 2018, including facility<br>consolidation, severance, sale of property and equipment, and charges relating to exiting certain lines of business. Also included is<br>restructuring in our United Stated business announced in 2019, including severance related to management realignment and the integration<br>of sales and operating functions (see Note 9 - Restructuring of the Notes to Condensed Consolidated Financial Statements for additional<br>information). Finally, includes consulting and other costs associated with streamlining our manufacturing and distribution operations.
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(2)	Litigation expense includes legal fees associated with our litigation with KeyMe, Inc. (see Note 6 - Commitments and Contingencies of<br>the Notes to Condensed Consolidated Financial Statements for additional information).
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(3)	Acquisition and integration expense includes professional fees, non-recurring bonuses, and other costs related to the pending merger<br>along with historical acquisitions.
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(4)	Non-recurring buy backs associated with new business wins.
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(5)	Anti-dumping duties assessed related to the nail business for prior year purchases.
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(6)	Facility exits include costs associated with the closure of facilities in San Antonio, Texas.
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The following tables presents a reconciliation of segment operating income, the most directly comparable financial measures under GAAP, to segment Adjusted EBITDA for the periods presented (amounts in thousands). Certain amounts in the prior year presentation between segments were reclassified to conform to the current year’s presentation.

Thirteen weeks ended June 26, 2021	Hardware and Protective Solutions		Robotics and Digital Solutions			Canada		Consolidated
Operating income (loss)	$	9,995	$	6,546		$	2,968	$	19,509
Depreciation and amortization		17,397		11,593			1,694		30,684
Stock compensation expense		1,552		244			—		1,796
Management fees		76		12			—		88
Restructuring		—		—			—		—
Litigation expense		—		6,322			—		6,322
Acquisition and integration expense		3,108		191			—		3,299
Buy-back expense		1,350		—			—		1,350
Anti-dumping duties		2,636		—			—		2,636
Change in fair value of contingent consideration		—		(1,212	)		—		(1,212	)
Adjusted EBITDA	$	36,114	$	23,696		$	4,662	$	64,472
Thirteen weeks ended June 27, 2020	Hardware and Protective Solutions		Robotics and Digital Solutions			Canada		Consolidated
---	---	---	---	---	---	---	---	---	---
Operating income (loss)	$	24,423	$	(4,510	)	$	815	$	20,728
Depreciation and amortization		17,608		12,749			1,738		32,095
Stock compensation expense		1,379		145			—		1,524
Management fees		176		20			—		196
Restructuring		—		—			980		980
Litigation expense		—		1,893			—		1,893
Acquisition and integration expense		498		163			—		661
Facility closures		433		—			—		433
Change in fair value of contingent consideration		—		3,100			—		3,100
Corporate and intersegment adjustments		1,187		(1,187	)		—		—
Adjusted EBITDA	$	45,704	$	12,373		$	3,533	$	61,610

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| --- | | Twenty-six weeks ended June 26, 2021 | Hardware and Protective Solutions | | Robotics and Digital Solutions | | | Canada | | Consolidated | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Operating income (loss) | $ | 16,045 | $ | 6,700 | | $ | 2,544 | $ | 25,289 | | | Depreciation and amortization | | 34,520 | | 23,974 | | | 3,440 | | 61,934 | | | Stock compensation expense | | 3,056 | | 481 | | | — | | 3,537 | | | Management fees | | 185 | | 29 | | | — | | 214 | | | Restructuring | | 64 | | 10 | | | 35 | | 109 | | | Litigation expense | | — | | 10,282 | | | — | | 10,282 | | | Acquisition and integration expense | | 7,290 | | 849 | | | — | | 8,139 | | | Buy-back expense | | 1,350 | | — | | | — | | 1,350 | | | Anti-dumping duties | | 2,636 | | — | | | — | | 2,636 | | | Change in fair value of contingent consideration | | — | | (1,212 | ) | | — | | (1,212 | ) | | Adjusted EBITDA | $ | 65,146 | $ | 41,113 | | $ | 6,019 | $ | 112,278 | | | Twenty-six weeks ended June 27, 2020 | Hardware and Protective Solutions | | | Robotics and Digital Solutions | | | Canada | | | Consolidated | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Operating income (loss) | $ | 33,276 | | $ | 1,386 | | $ | (4,488 | ) | $ | 30,174 | | | Depreciation and amortization | | 34,462 | | | 26,398 | | | 3,600 | | | 64,460 | | | Stock compensation expense | | 2,330 | | | 339 | | | — | | | 2,669 | | | Management fees | | 280 | | | 41 | | | — | | | 321 | | | Restructuring | | — | | | — | | | 2,710 | | | 2,710 | | | Litigation expense | | — | | | 2,674 | | | — | | | 2,674 | | | Acquisition and integration expense | | 632 | | | 358 | | | — | | | 990 | | | Facility closures | | 433 | | | — | | | — | | | 433 | | | Change in fair value of contingent consideration | | — | | | (1,300 | ) | | — | | | (1,300 | ) | | Corporate and intersegment adjustments | | (47 | ) | | 47 | | | — | | | — | | | Adjusted EBITDA | $ | 71,366 | | $ | 29,943 | | $ | 1,822 | | $ | 103,131 | |

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Income Taxes

For the thirteen weeks ended June 26, 2021, the Company recorded an income tax provision of $1.4 million based on a pre-tax loss of $2.0 million. The Company recorded an income tax benefit for the twenty-six weeks ended June 26, 2021 of $5.2 million based on a pre-tax loss of $17.6 million. The effective income tax rate was (73.0)% and 29.7% for the thirteen and twenty-six weeks ended June 26, 2021, respectively.

The effective rate differed from the federal statutory rate due to an estimated increase in GILTI from the Company's Canadian operations, state and foreign income taxes, and non-deductible stock compensation expenses.

For the thirteen weeks ended June 27, 2020, the Company recorded an income tax benefit of $0.9 million based on a pre-tax loss of $5.9 million. The Company recorded an income tax benefit for the twenty-six weeks ended June 27, 2020 of $5.1 million based on a pre-tax loss of $25.0 million. The effective income tax rate was 15.1% and 20.6% for the thirteen and twenty-six weeks ended June 27, 2020, respectively.

The effective income tax rate differed from the federal statutory tax rate in the thirteen and twenty-six weeks ended June 27, 2020 primarily due to non-deductible stock compensation expenses, and state and foreign income taxes.

On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law. The CARES Act included, among other things, corporate income tax relief in the form of accelerated alternative minimum tax ("AMT") refunds, allowed employers to defer certain payroll tax payments throughout 2020, and provided favorable corporate interest deductions for the 2020 reporting period.

Liquidity and Capital Resources

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The statements of cash flows reflect the changes in cash and cash equivalents for the twenty-six weeks ended June 26, 2021 and the twenty-six weeks ended June 27, 2020 by classifying transactions into three major categories: operating, investing, and financing activities.

Net cash used for operating activities for the twenty-six weeks ended June 26, 2021 was $59.8 million as compared to $11.7 million of cash provided by operation activities in the comparable prior year period. Operating cash flows for the twenty-six weeks ended June 26, 2021 were unfavorably impacted by increased inventory for the spring and summer busy season and new business wins. Operating cash flows for the twenty-six weeks ended June 27, 2020 were unfavorably impacted by the increase in accounts receivable due to higher sales.

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Net cash used for investing activities was $61.8 million and $23.0 million for the twenty-six weeks ended June 26, 2021 and the twenty-six weeks ended June 27, 2020, respectively. During the twenty-six weeks ended June 26, 2021, we acquired Oz Post International, LLC ("OZCO") for approximately $39.1 million, (see Note 4 - Acquisitions of the Notes to Condensed Consolidated Financial Statements for additional information). Excluding acquisitions, the primary use of cash in both periods was our investment in new key duplicating kiosks and machines.

Net cash provided by financing activities was $116.0 million for the twenty-six weeks ended June 26, 2021. Our revolver draws, net of repayments, provided cash of $86.0 million in the twenty-six weeks ended June 26, 2021. In the second quarter of 2021, we entered into an amendment ("OZCO Amendment") to the term loan credit agreement dated May 31, 2018, which provided $35,000 of incremental term loan funds to be used to finance the acquisition, (see Note 4 - Acquisitions of the Notes to Condensed Consolidated Financial Statements for additional information) Additionally, we used cash to pay $5.3 million in principal payments on the senior term loan under the Senior Facilities. Finally, in the twenty-six weeks ended June 26, 2021 the Company received $1.8 million on the exercise of stock options.

Net cash provided by financing activities was $10.3 million for the twenty-six weeks ended June 27, 2020. Revolver repayments were $16.0 million, net of draws, in the twenty-six weeks ended June 27, 2020. Additionally, we used cash to pay $5.3 million in principal payments on the senior term loan under the Senior Facilities.

Management believes that projected cash flows from operations and revolver availability will be sufficient to fund working capital and capital expenditure needs for the next 12 months. Our working capital (current assets minus current liabilities) position of $340.5 million as of June 26, 2021 represents an increase of $98.7 million from the December 26, 2020 level of $241.8 million. Because COVID-19 pandemic has not, as of the date of this report, had a materially negative impact on our operations or demand for our products, it has not had a materially negative impact on the Company's liquidity position. We have initiated mitigating efforts to manage non-critical capital spending, assess operating spend, and preserve cash. We expect to generate sufficient operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets, although there can be no assurance of our ability to do so. However, the continued spread of COVID-19 has led to disruption and volatility in the global capital markets, which, depending on future developments, could impact our capital resources and liquidity in the future.

Off-Balance Sheet Arrangements

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We do not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Critical Accounting Policies and Estimates

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Significant accounting policies and estimates are summarized in the notes to the condensed consolidated financial statements. Some accounting policies require management to exercise significant judgment in selecting the appropriate assumptions for calculating financial estimates. Such judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, known trends in our industry, terms of existing contracts, and other information from outside sources, as appropriate. Management believes that these estimates and assumptions are reasonable based on the facts and circumstances as of June 26, 2021, however, actual results may differ from these estimates under different assumptions and circumstances.

There have been no material changes to our critical accounting policies and estimates which are discussed in the “Critical Accounting Policies and Estimates” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 26, 2020, as filed with the Securities and Exchange Commission. In addition, our most significant accounting policies are discussed in Note 2 and elsewhere in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 26, 2020.

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Recent Accounting Pronouncements

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See “Note 3 - Recent Accounting Pronouncements” of the Notes to Condensed Consolidated Financial Statements.

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Exhibit 99.2

HMAN Group Holdings, Inc. and Subsidiaries

Condensed Consolidated Financial Statements

Thirteen and Twenty-six weeks ended June 26, 2021 and June 27,2020

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

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INDEX

PART I. FINANCIAL INFORMATION		PAGE
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statement of Stockholders' Equity	6
	Notes to Condensed Consolidated Financial Statements	7

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(dollars in thousands, except per share amounts)

			December 26,<br> 2020
ASSETS
Current assets:
Cash and cash equivalents	16,255		$	21,520
Accounts receivable, net of allowances of 2,586 (2,395 - 2020)	146,865			121,228
Inventories, net	482,645			391,679
Other current assets	22,125			19,280
Total current assets	667,890			553,707
Property and equipment, net of accumulated depreciation of 260,692 (236,031 - 2020)	174,466			182,674
Goodwill	826,969			816,200
Other intangibles, net of accumulated amortization of 322,230 (291,434 - 2020)	826,949			825,966
Operating lease right of use assets	85,312			76,820
Deferred tax assets	2,728			2,075
Other assets	12,739			11,176
Total assets	2,597,053		$	2,468,618
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	229,618		$	201,461
Current portion of debt and capital leases	11,442			11,481
Current portion of operating lease liabilities	11,838			12,168
Accrued expenses:
Salaries and wages	16,738			29,800
Pricing allowances	7,636			6,422
Income and other taxes	2,647			5,986
Interest	13,550			12,988
Other accrued expenses	33,935			31,605
Total current liabilities	327,404			311,911
Long term debt	1,651,476			1,535,508
Deferred tax liabilities	151,970			156,118
Operating lease liabilities	78,204			68,934
Other non-current liabilities	24,154			31,560
Total liabilities	2,233,208		$	2,104,031
Commitments and contingencies (Note 6)
Stockholders' Equity:
Preferred stock, 0.01 par, 5,000 shares authorized, none issued or outstanding at June 26, 2020 and December 26, 2020	—			—
Common stock, .01 par, 1,800,000 shares authorized, 558,179  and 556,444 issued and outstanding at June 26, 2021 and December 26, 2020, respectively	5			5
Treasury stock at cost, 4,740 shares at June 26, 2020 and December 26, 2020, respectively	(4,320	)		(4,320	)
Additional paid-in capital	575,437			570,139
Accumulated deficit	(184,204	)		(171,849	)
Accumulated other comprehensive loss	(23,073	)		(29,388	)
Total stockholders' equity	363,845			364,587
Total liabilities and stockholders' equity	2,597,053		$	2,468,618

All values are in US Dollars.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTSOF COMPREHENSIVE LOSS (Unaudited)

(dollars in thousands)

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	Thirteen Weeks Ended<br> <br>June26, 2021			Thirteen Weeks Ended<br> June 27, 2020			Twenty-six Weeks Ended<br> <br>June26, 2021			Twenty-six Weeks Ended<br> <br>June27, 2020
Net sales	$	375,715		$	346,710		$	716,996		$	642,546
Cost of sales (exclusive of depreciation and amortization shown separately below)		215,967			196,402			417,265			362,813
Selling, general and administrative expenses		111,662			94,970			214,841			184,723
Depreciation		15,270			17,230			31,611			34,747
Amortization		15,414			14,865			30,323			29,713
Management fees to related party		88			196			214			321
Other (income) expense		(2,195	)		2,319			(2,547	)		55
Income from operations		19,509			20,728			25,289			30,174
Interest expense, net		19,159			23,878			38,178			47,058
Interest expense on junior subordinated debentures		3,152			3,184			6,304			6,336
(Gain) loss on mark-to-market adjustment of interest rate swap		(751	)		(308	)		(1,424	)		1,942
Investment income on trust common securities		(94	)		(94	)		(189	)		(189	)
Loss before income taxes		(1,957	)		(5,932	)		(17,580	)		(24,973	)
Income tax provision (benefit)		1,428			(895	)		(5,225	)		(5,132	)
Net loss	$	(3,385	)	$	(5,037	)	$	(12,355	)	$	(19,841	)
Basic and diluted loss per share	$	(6	)	$	(9	)	$	(22	)	$	(36	)
Weighted average basic and diluted shares outstanding		553			544			553			544
Net loss from above	$	(3,385	)	$	(5,037	)	$	(12,355	)	$	(19,841	)
Other comprehensive income (loss):
Foreign currency translation adjustments		3,842			3,643			6,315			(7,570	)
Total other comprehensive income (loss)		3,842			3,643			6,315			(7,570	)
Comprehensive income (loss)	$	457		$	(1,394	)	$	(6,040	)	$	(27,411	)

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The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

(dollars in thousands)

	Twenty-six Weeks Ended<br> <br>June26, 2021			Twenty-six Weeks Ended<br> <br>June27, 2020
Cash flows from operating activities:
Net loss	$	(12,355	)	$	(19,841	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		61,934			64,460
Deferred income taxes		(4,709	)		(4,771	)
Deferred financing and original issue discount amortization		1,800			1,879
Stock-based compensation expense		3,537			2,669
Asset impairment		—			210
(Gain) on disposal of property and equipment		—			(337	)
Change in fair value of contingent consideration		(1,212	)		(1,300	)
Other non-cash interest and change in value of interest rate swap		(1,424	)		1,942
Changes in operating items:
Accounts receivable		(23,547	)		(61,318	)
Inventories		(73,049	)		592
Other assets		(15,786	)		1,307
Accounts payable		22,443			4,475
Other accrued liabilities		(17,471	)		21,690
Net cash provided by (used for) operating activities		(59,839	)		11,657
Cash flows from investing activities:
Acquisition of business, net of cash received		(39,102	)		(800	)
Capital expenditures		(22,684	)		(22,196	)
Net cash used for investing activities		(61,786	)		(22,996	)
Cash flows from financing activities:
Repayments of senior term loans		(5,304	)		(5,304	)
Borrowings on senior term loans		35,000			—
Financing fees		(1,027	)		—
Borrowings on revolving credit loans		128,000			66,000
Repayments of revolving credit loans		(42,000	)		(50,000	)
Principal payments under finance and capitalized lease obligations		(460	)		(411	)
Proceeds from exercise of stock options		1,761			—
Net cash provided by financing activities		115,970			10,285
Effect of exchange rate changes on cash		390			(315	)
Net decrease in cash and cash equivalents		(5,265	)		(1,369	)
Cash and cash equivalents at beginning of period		21,520			19,973
Cash and cash equivalents at end of period	$	16,255		$	18,604
Supplemental disclosure of cash flow information:
Interest paid on junior subordinated debentures, net	$	6,115		$	4,076
Interest paid		34,439			33,922
Income taxes paid		1,740			100

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The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’EQUITY (Unaudited)

(dollars in thousands)

	Number of shares outstanding							Additional								Accumulated Other			Total
	Common Shares		Treasury Shares			Common Stock		Paid-in-capital		Treasury Stock			Accumulated			Comprehensive Loss			Stockholders Equity
Thirteen weeks ended March 27, 2021
Balance at December 26, 2020		556		(5	)	$	5	$	570,139	$	(4,320	)	$	(171,849	)	$	(29,388	)	$	364,587
Net loss		—		—			—		—		—		$	(8,970	)		—			(8,970	)
Stock-based compensation		—		—			—		1,741		—			—			—			1,741
Proceeds from exercise<br> of stock options		2		—			—		1,643		—			—			—			1,643
Change in cumulative foreign<br> currency translation adjustment							—		—		—			—			2,473			2,473
Balance at March 27, 2021		558		(5	)		5		573,523		(4,320	)		(180,819	)		(26,915	)		361,474
Net loss		—		—			—				—			(3,385	)		—			(3,385	)
Stock-based compensation		—		—			—		1,796		—			—			—			1,796
Proceeds from exercise<br> of stock options		—		—			—		118		—			—			—			118
Change in cumulative foreign<br> currency translation adjustment		—		—			—				—			—			3,842			3,842
Balance at June 26, 2021		558		(5	)	$	5	$	575,437	$	(4,320	)	$	(184,204	)	$	(23,073	)	$	363,845
Thirteen weeks ended March 28, 2020
Balance at December 28, 2019		548		(5	)	$	5	$	557,674	$	(4,320	)	$	(147,350	)	$	(32,040	)	$	373,969
Net loss		—		—			—		—		—			(14,804	)		—			(14,804	)
Stock-based compensation		—					—		1,145		—			—			—			1,145
Restricted shares issued		1		—			—		—		—			—			—			—
Change in cumulative foreign<br> currency translation adjustment		—		—			—		—		—			—			(11,213	)		(11,213	)
Balance at March 28, 2020		549		(5	)		5		558,819		(4,320	)		(162,154	)		(43,253	)		349,097
Net loss		—		—			—		—		—			(5,037	)		—			(5,037	)
Stock-based compensation		—		—			—		1,524		—			—			—			1,524
Change in cumulative foreign<br> currency translation adjustment		—		—			—		—		—			—			3,643			3,643
Balance at June 27, 2020	$	549	$	(5	)	$	5	$	560,343	$	(4,320	)	$	(167,191	)	$	(39,610	)	$	349,227

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

1. Basis of Presentation:

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The accompanying financial statements include the consolidated accounts of HMAN Group Holdings, Inc. and its wholly-owned subsidiaries (collectively “Hillman” or the “Company”). Unless the context requires otherwise, references to "Hillman," "we," "us," "our," or "our Company" refer to HMAN Group Holdings, Inc. and its wholly-owned subsidiaries. The Condensed Consolidated Financial Statements included herein have been prepared in accordance with accounting standards generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly-owned subsidiaries. The Hillman Companies, Inc. is a wholly-owned subsidiary of HMAN Intermediate II Holdings Corp., and a wholly-owned subsidiary of HMAN Group Holdings Inc. (“Holdco”).

On July 14, 2021, subsequent to quarter end, the Company’s parent, HMan Group Holdings, Inc., and Landcadia Holdings III, Inc. (“Landcadia” and after the Business Combination described herein, “New Hillman”), a special purpose acquisition company ("SPAC") consummated the previously announced business combination (the “Closing”) pursuant to the terms of the Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, and as it may be further amended or supplemented from time to time, the “Merger Agreement”). In accordance with the terms and subject to the conditions set forth in the Merger Agreement, Landcadia paid aggregate consideration in the form of New Hillman common stock calculated as described herein and equal to a value of approximately (i) $911,300,000 plus (ii) $28,280,000, such amount being the value of 2,828,000 shares of Class B common stock of Landcadia, valued at $10.00 per share, that TJF, LLC (“TJF Sponsor”) and Jefferies Financial Group Inc., (“JFG Sponsor” and, together with TJF Sponsor, the “Sponsors”) agreed to forfeit at the Closing.

2. Summary of Significant Accounting Policies:

The significant accounting policies should be read in conjunction with the significant accounting policies included in the financial statements for the year ended December 26, 2020.

Use of Estimates in the Preparation of Financial Statements:

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses for the reporting periods. Actual results may differ from these estimates.

The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions including interest rates, employment rates and health insurance coverage, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of June 26, 2021 and through the date of this report. The accounting matters assessed included, but were not limited to the carrying value of the goodwill and other long-lived assets. While there was not a material impact to the Company’s consolidated financial statements as of and for the quarter ended June 26, 2021, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s Consolidated Financial Statements in future reporting periods.

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Revenue Recognition:

Revenue is recognized when control of goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The Company offers a variety of sales incentives to its customers primarily in the form of discounts and rebates. Discounts are recognized in the consolidated financial statements at the date of the related sale. Rebates are based on the revenue to date and the contractual rebate percentage to be paid. A portion of the cost of the rebate is allocated to each underlying sales transaction. Discounts and rebates are included in the determination of net sales.

The Company also establishes reserves for customer returns and allowances. The reserve is established based on historical rates of returns and allowances. The reserve is adjusted quarterly based on actual experience. Returns and allowances are included in the determination of net sales.

The following table displays our disaggregated revenue by product category:

	Thirteen weeks ended June 26, 2021
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
Fastening and Hardware	$	201,208	$	—	$	45,826	$	247,034
Personal Protective		61,921		—		178		62,099
Keys and Key Accessories		—		50,289		206		50,495
Engraving		—		16,004		25		16,029
Resharp		—		58		—		58
Consolidated	$	263,129	$	66,351	$	46,235	$	375,715
	Thirteen weeks ended June 27, 2020
---	---	---	---	---	---	---	---	---
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
Fastening and Hardware	$	190,572	$	—	$	34,726	$	225,298
Personal Protective		78,927		—		66		78,993
Keys and Key Accessories		—		30,649		220		30,869
Engraving		—		11,542		1		11,543
Resharp		—		7		—		7
Consolidated	$	269,499	$	42,198	$	35,013	$	346,710
	Twenty-six weeks ended June 26, 2021
---	---	---	---	---	---	---	---	---
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
Fastening and Hardware	$	367,810	$	—	$	79,917	$	447,727
Personal Protective		146,248		—		191		146,439
Keys and Key Accessories		—		92,383		567		92,950
Engraving		—		29,782		33		29,815
Resharp		—		65		—		65
Consolidated	$	514,058	$	122,230	$	80,708	$	716,996

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

	Twenty-six weeks ended June 27, 2020
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
Fastening and Hardware	$	340,956	$	—	$	60,047	$	401,003
Personal Protective		141,720		—		66		141,786
Keys and Key Accessories		—		74,027		1,249		75,276
Engraving		—		24,461		3		24,464
Resharp		—		17		—		17
Consolidated	$	482,676	$	98,505	$	61,365	$	642,546

The following table disaggregates our revenue by geographic location:

	Thirteen weeks ended June 26, 2021
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
United States	$	257,742	$	65,739	$	—	$	323,481
Canada		2,050		612		46,235		48,897
Mexico		3,337		—		—		3,337
Consolidated	$	263,129	$	66,351	$	46,235	$	375,715
	Thirteen weeks ended June 27, 2020
---	---	---	---	---	---	---	---	---
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
United States	$	265,702	$	41,837	$	—	$	307,539
Canada		1,272		361		35,013		36,646
Mexico		2,525		—		—		2,525
Consolidated	$	269,499	$	42,198	$	35,013	$	346,710
	Twenty-six weeks ended June 26, 2021
---	---	---	---	---	---	---	---	---
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
United States	$	504,539	$	121,039	$	—	$	625,578
Canada		3,279		1,191		80,708		85,178
Mexico		6,240		—		—		6,240
Consolidated	$	514,058	$	122,230	$	80,708	$	716,996

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

	Twenty-six weeks ended June 27, 2020
	Hardware and Protective Solutions		Robotics and Digital Solutions		Canada		Total Revenue
United States	$	475,376	$	97,683	$	—	$	573,059
Canada		2,541		822		61,365		64,728
Mexico		4,759		—		—		4,759
Consolidated	$	482,676	$	98,505	$	61,365	$	642,546

Our revenue by geography is allocated based on the location of our sales operations. Our Hardware and Protective Solutions segment contains sales of Big Time personal protective equipment into Canada. Our Robotics and Digital Solutions segment contains sales of MinuteKey Canada.

Hardware and Protective Solutions revenues consist primarily of the delivery of fasteners, anchors, specialty fastening products, and personal protective equipment such as gloves and eye-wear as well as in-store merchandising services for the related product category.

Robotics and Digital Solutions revenues consist primarily of sales of keys and identification tags through self service key duplication and engraving kiosks. It also includes our associate-assisted key duplication systems and key accessories.

Canada revenues consist primarily of the delivery to Canadian customers of fasteners and related hardware items, threaded rod, keys, key duplicating systems, accessories, personal protective equipment, and identification items as well as in-store merchandising services for the related product category.

The Company’s performance obligations under its arrangements with customers are providing products, in-store merchandising services, and access to key duplicating and engraving equipment. Generally, the price of the merchandising services and the access to the key duplicating and engraving equipment is included in the price of the related products. Control of products is transferred at the point in time when the customer accepts the goods, which occurs upon delivery of the products. Judgment is required in determining the time at which to recognize revenue for the in-store services and the access to key duplicating and engraving equipment. Revenue is recognized for in-store service and access to key duplicating and engraving equipment as the related products are delivered, which approximates a time-based recognition pattern. Therefore, the entire amount of consideration related to the sale of products, in-store merchandising services, and access to key duplicating and engraving equipment is recognized upon the delivery of the products.

The costs to obtain a contract are insignificant, and generally contract terms do not extend beyond one year. Therefore, these costs are expensed as incurred. Freight and shipping costs and the cost of our in-store merchandising services teams are recognized in selling, general, and administrative expense when control over products is transferred to the customer.

3. Recent Accounting Pronouncements:

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform(Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848). The amendments in this ASU refine the scope of ASC 848 and clarifies some of its guidance as it relates to recent rate reform activities.The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating contracts and the optional expedients provided by the new standard.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic740): Simplifying the Accounting for Income Taxes. The amendments in this update remove certain exceptions of Topic 740 including: exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or gain from other items; exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. There are also additional areas of guidance in regards to: franchise and other taxes partially based on income and the interim recognition of enactment of tax laws and rate changes. The provisions of this ASU are effective for years beginning after December 15, 2020. The Company adopted this standard during fiscal 2021 and the adoption did not have a material impact on the Company's Condensed Consolidated Financial Statements.

4. Acquisitions:

On April 16, 2021, the Company completed the acquisition of Oz Post International, LLC ("OZCO"), a leading manufacturer of superior quality hardware that offers structural fasteners and connectors used for decks, fences and other outdoor structures, for a total purchase price of $39,102. The Company entered into an amendment ("OZCO Amendment") to the term loan credit agreement dated May 31, 2018 (the "2018 Term Loan"), which provided $35,000 of incremental term loan funds to be used to finance the acquisition. OZCO has business operations throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment.

The following table reconciles the fair value of the acquired assets and assumed liabilities to the preliminary total purchase price of OZCO:

Accounts receivable	$	1,143
Inventory		3,564
Other current assets		24
Property and equipment		595
Goodwill		9,450
Customer relationships		23,500
Trade names		2,600
Technology		4,000
Total assets acquired		44,876
Less:
Liabilities assumed		(5,774	)
Total purchase price	$	39,102

Pro forma financial information has not been presented for OZCO as their associated financial results are insignificant to the financial results of the Company on a standalone basis.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

5. Goodwill and Other Intangible Assets:

Goodwill amounts by reportable segment are summarized as follows:

	Goodwill at<br> <br>December 26, 2020		Acquisitions ^(1)^		Dispositions		Other ^(2)^		Goodwill at<br> <br>June 26, 2021
Hardware and Protective Solutions	$	565,578	$	9,450	$	—	$	13	$	575,041
Robotics and Digital Solutions		220,936		—		—		—		220,936
Canada		29,686		—		—		1,306		30,992
Total	$	816,200	$	9,450	$	—	$	1,319	$	826,969
(1)	See Note 4 - Acquisitions for additional information regarding<br>the OZCO acquisition.
---	---
(2)	The "Other" change to goodwill relates to adjustments<br>resulting from fluctuations in foreign currency exchange rates for the Canada and Mexico reporting units.
---	---

Other intangibles, net, as of June 26, 2021 and December 26, 2020 consist of the following:

	Estimated<br> <br>Useful Life<br> <br>(Years)	June 26, 2021		December 26, 2020
Customer relationships	13 - 20	$	966,515	$	941,648
Trademarks - Indefinite	Indefinite		85,890		85,603
Trademarks - Other	7 - 15		29,000		26,400
Technology and patents	7 - 12		67,774		63,749
Intangible assets, gross			1,149,179		1,117,400
Less: Accumulated amortization			322,230		291,434
Other intangibles, net		$	826,949	$	825,966

The amortization expense for amortizable assets, including the adjustments resulting from fluctuations in foreign currency exchange rates for the thirteen and twenty-six weeks ended June 26, 2021 was $15,414 and $30,323, respectively. Amortization expense for the thirteen and twenty-six weeks ended June 27, 2020 was $14,865 and $29,713, respectively.

The Company tests goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter. Impairment is also tested when events or changes in circumstances indicate that the carrying values of the assets may be greater than their fair values. During the thirteen and twenty-six weeks ended June 26, 2021 and the thirteen and twenty-six weeks ended June 27, 2020, the Company did not identify any triggering events that would result in an impairment analysis outside of the annual assessment.

6. Commitments and Contingencies:

---

The Company self-insures its product liability, automotive and workers' compensation losses up to $250 per occurrence. General liability losses are self-insured up to $500 per occurrence. Catastrophic coverage has been purchased from third party insurers for occurrences in excess of $250 up to $60,000. The two risk areas involving the most significant accounting estimates are workers' compensation and automotive liability. Actuarial valuations performed by the Company's outside risk insurance expert were used by the Company's management to form the basis for workers' compensation and automotive liability loss reserves. The actuary contemplated the Company's specific loss history, actual claims reported, and industry trends among statistical and other factors to estimate the range of reserves required. Risk insurance reserves are comprised of specific reserves for individual claims and additional amounts expected for development of these claims, as well as for incurred but not yet reported claims. The Company believes that the liability of approximately $2,520 recorded for such risks is adequate as of June 26, 2021.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

As of June 26, 2021, the Company has provided certain vendors and insurers letters of credit aggregating $27,908 related to our product purchases and insurance coverage for product liability, workers’ compensation, and general liability.

The Company self-insures group health claims up to an annual stop loss limit of $250 per participant. Historical group insurance loss experience forms the basis for the recognition of group health insurance reserves. Provisions for losses expected under these programs are recorded based on an analysis of historical insurance claim data and certain actuarial assumptions. The Company believes that the liability of approximately $2,300 recorded for such risks is adequate as of June 26, 2021.

On June 3, 2019, The Hillman Group, Inc. ("Hillman Group") filed a complaint for patent infringement against KeyMe, LLC ("KeyMe"), a provider of self-service key duplication kiosks, in the United States District Court for the Eastern District of Texas (Marshall Division). The case was assigned Civil Action No. 2:19-cv-0209. Hillman Group’s complaint alleges that KeyMe’s self-named and “Locksmith in a Box” key duplication kiosks infringe U.S. Patent Nos. 8,979,446 and 9,914,179, which are assigned to Hillman Group, and seeks damages and injunctive relief against KeyMe. After the United States Patent and Trademark Office issued U.S. Patent No. 10,400,474 to Hillman Group on September 3, 2019, Hillman Group filed a motion the same day to amend its initial complaint to add the new patent to the litigation. The Texas court granted the motion on September 13, 2019. KeyMe filed two motions in the case on July 25, 2019, the first seeking to dismiss Hillman Group's complaint under Rule 12(b)(3) of the Federal Rules of Civil Procedure for improper venue, or in the alternative, to move the case from Marshall, Texas to the Southern District of New York. KeyMe’s second motion seeks to transfer the venue of the case from Texas to New York under 28 U.S.C. § 1404. Subsequently, Hillman Group filed a motion on September 4, 2019 to disqualify KeyMe's counsel Cooley LLP from the litigation due to Cooley's concurrent and prior representation of Hillman Group and predecessor-in-interest MinuteKey Holdings, Inc ("MinuteKey"). Hillman Group served its initial infringement contentions for the patents-in-suit on KeyMe on September 6, 2019, and KeyMe served its initial invalidity and unenforceability contentions for the patents-in-suit on Hillman Group on November 15, 2019. The parties filed a joint claim construction statement with the Court on January 31, 2020, setting forth the disputed constructions of terms and phrases recited in the asserted claims of the patents-in-suit. On February 14, 2020, the Court granted Hillman Group’s motion to disqualify Cooley LLP, and denied KeyMe’s pending venue-related motion to dismiss and motion to transfer without prejudice to refiling. The case was stayed until March 30, 2020 to permit KeyMe to retain new legal counsel. The parties filed a joint status report on March 25, 2020, and on March 27, 2020, the Texas Court set a new case schedule with a trial in early December 2020. On April 14, 2020, KeyMe re-filed a single motion to dismiss for improper venue, or in the alternative, to transfer the case to the Southern District of New York. After an oral hearing held on September 30, 2020, the Texas Court denied KeyMe’s motion to dismiss on November 13, 2020.

The Texas Court conducted a claim construction hearing in Marshall, TX, on June 23, 2020 to construe various disputed claim terms of the three patents-in-suit, and issued a claim construction order on July 2, 2020. On August 31, 2020, KeyMe filed two motions for partial summary judgment on portions of the case, and also filed a motion objecting to portions of the testimony of one of Hillman Group’s technical expert witnesses. At a pretrial conference held March 23, 2021, the Texas Court denied KeyMe's motion to exclude expert testimony and KeyMe's motion for summary judgment of no willful infringement in full. KeyMe's motion for summary judgment of non-infringement relating to U.S. Patent No. 10,400,474 was granted in-part and denied in-part; Hillman Group was permitted to proceed with a theory of infringement under the doctrine of equivalents at trial.

On March 2, 2020, Hillman Group filed a second complaint for patent infringement against KeyMe in the same Texas Court, alleging that KeyMe’s key duplication kiosks infringe Hillman Group’s U.S. Patent No. 10,577,830. The case was assigned Civil Action No. 2:20-cv-0070. Hillman Group added a second patent to the case, U.S. Patent No. 10,628,813, upon that patent's issuance on April 21, 2020. Upon issuance of U.S. Patent No. 10,737,336 to Hillman Group on August 10, 2020, Hillman Group moved for leave of Court to add that patent to the case; however, KeyMe opposed the motion.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

KeyMe filed a motion to consolidate the two Texas patent cases involving KeyMe and Hillman Group on April 14, 2020. In addition, on April 30, 2020, KeyMe filed a substantially identical motion to dismiss the case for improper venue, or in the alternative, to transfer the case to the Southern District of New York. The Texas Court heard oral argument on the motion to consolidate, the motion to dismiss, and Hillman Group’s motion to add the ’336 patent on September 30, 2020. On October 23, 2020, the Texas Court granted KeyMe’s motion to consolidate the two Texas cases, and granted Hillman Group’s motion to add the ’336 patent. The Texas Court denied KeyMe’s motion to dismiss on November 13, 2020. On November 18, 2020, the Texas Court issued a new case schedule for the consolidated case, setting a trial date of April 5, 2021 for the six-patent case. The parties stipulated in November, 2020 that no new claim construction hearing would be held, and that selected constructions from the 2:19-cv-209 action that pertained to claims in the 2:20-cv-0070 action would govern. Fact discovery closed in the consolidated case on December 21, 2020, and expert discovery closed on January 22, 2021.

On January 25, 2021, KeyMe filed a second summary judgment motion for a judgment of no willful infringement, and also filed another motion objecting to portions of the testimony of one of Hillman Group's technical expert witnesses. At a pretrial conference held March 23, 2021, the Texas Court denied both of KeyMe's motions in full.

On September 9, 2020, the parties conducted a mediation before Ret. District Judge David Folsom of the U.S. District Court of the Eastern District of Texas. Though substantive discussion took place, no agreement on resolution of the litigation was reached.

A jury trial was held in the Texas case from April 5-12, 2021 in Marshall, Texas. On April 12, 2021, the jury returned a verdict that KeyMe did not infringe any of the six asserted patents, and several of the asserted claims were invalid. Final judgment was entered on April 13, 2021. Both parties filed renewed motions for judgment as a matter of law on issues they did not prevail on at trial on May 11, 2021, and Hillman Group additionally filed a motion for a new trial on the same date.

On August 16, 2019, KeyMe filed a complaint for patent infringement against Hillman Group in the United States District Court for the District of Delaware. KeyMe alleges that Hillman Group’s KeyKrafter key duplication machines and MinuteKey self-service key duplication kiosks infringe KeyMe’s U.S. Patent No. 8,682,468 when those machines are used in conjunction with Hillman Group’s KeyHero system. Hillman Group filed an answer to KeyMe’s complaint on October 23, 2019, and asserted counterclaims seeking declaratory judgments of invalidity and noninfringement of U.S. Patent No. 8,682,468. On May 4, 2020, the Delaware Court entered a scheduling order setting trial for November 2021. KeyMe served its initial infringement contentions on June 11, 2020, with Hillman Group serving its initial invalidity contentions on July 16, 2020. The Delaware Court held a claim construction hearing on November 24, 2020, and issued its claim construction order on January 25, 2021. Fact discovery closed in the Delaware case on January 28, 2021. KeyMe served its final infringement contentions on January 4, 2021; Hillman Group served its final invalidity contentions on January 18, 2021. Expert discovery closed on April 8, 2021. Following the close of discovery, Hillman Group filed a motion for summary judgment of noninfringement and no willful infringement in the case on April 15, 2021.

As of June 14, 2021, Hillman Group and KeyMe have globally resolved all pending legal disputes, including the Texas and Delaware district court actions discussed above.

On June 1, 2021, Hy-Ko Products Company LLC ("Hy-Ko"), a manufacturer of key duplication machines, filed a complaint for patent infringement against Hillman Group in the United States District Court for the Eastern District of Texas (Marshall Division). The case was assigned Civil Action No. 2:21-cv-0197. Hy-Ko's complaint alleges that Hillman's KeyKrafter and PKOR key duplication machines infringe U.S. Patent Nos. 9,656,332, 9,682,432, 9,687,920, and 10,421,113, which are assigned to Hy-Ko, and seeks damages and injunctive relief against Hillman Group. Hy-Ko's complaint additionally contains allegations of unfair competition under the Federal Lanham Act and conversion/receipt of stolen property, as well as a cause of action for "replevin" for return of stolen property.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Management and legal counsel for Hillman Group are still investigating this recent suit but are initially of the opinion that Hy-Ko's claims are without merit and Hillman Group intends to vigorously defend the claims. Hillman Group is unable to estimate the possible loss or range of loss at this early stage in the case.

7. Related Party Transactions

The Company has recorded aggregate management fee charges and expenses from CCMP Capital Advisors, LLC (“CCMP”), Oak Hill Capital Partners III, L.P., Oak Hill Capital Management Partners III, L.P. and OHCP III HC RO, L.P. (collectively, “Oak Hill Funds”) of $88 and $214 for the thirteen and twenty-six weeks ended June 26, 2021, respectively, and $196 and $321 for the thirteen and twenty-six weeks ended June 27, 2020, respectively.

Gregory Mann and Gabrielle Mann are employed by Hillman. The Company leases an industrial warehouse and office facility from companies under the control of the Manns. The rental expense for the lease of this facility was $88 and $176 for the thirteen and twenty-six weeks ended June 26, 2021, respectively, and was $88 and $175 for the thirteen and twenty-six weeks ended June 27, 2020, respectively.

---

8. Income Taxes:

Accounting Standards Codification 740 (“ASC 740”) requires companies to apply their estimated annual effective tax rate on a year-to-date basis in each interim period. These rates are derived, in part, from expected annual pre-tax income or loss. In the thirteen and twenty-six weeks ended June 26, 2021 and the thirteen and twenty-six weeks ended June 27, 2020, the Company applied an estimated annual effective tax rate to the interim period pre-tax loss to calculate the income tax benefit.

For the thirteen and twenty-six weeks ended June 26, 2021, the effective income tax rate was (73.0)% and 29.7%, respectively. The Company recorded an income tax provision for the thirteen weeks ended June 26, 2021 of $1,428 and an income tax benefit for the twenty-six weeks ended June 26, 2021 of $5,225. The effective tax rate for the thirteen and twenty-six weeks ended June 26, 2021 was the result of an estimated increase in GILTI from the Company's Canadian operations, state and foreign income taxes, non-deductible transaction expenses, and non-deductible stock compensation.

For the thirteen and twenty-six weeks ended June 27, 2020, the effective income tax rate was 15.1% and 20.6%, respectively. The Company recorded an income tax benefit for the thirteen and twenty-six weeks ended June 27, 2020 of $895 and $5,132, respectively. The effective tax rate for the thirteen and twenty-six weeks ended June 27, 2020 was primarily due to non-deductible stock compensation, and state and foreign income taxes.

On March 27, 2020, the CARES Act was signed into law by the President of the United States. The CARES Act included, among other things, corporate income tax relief in the form of accelerated alternative minimum tax ("AMT") refunds, allowed employers to defer certain payroll tax payments throughout 2020, and provided favorable corporate interest deductions for the 2020 reporting period.

9. Restructuring

---

Canada Restructuring

---

During 2018, the Company initiated plans to restructure the operations of the Canada segment. The restructuring seeks to streamline operations in the greater Toronto area by consolidating facilities, exiting certain lines of business, and rationalizing stock keeping units (“SKUs”). The intended result of the Canada restructuring will be a more streamlined and scalable operation focused on delivering optimal service and a broad offering of products across the Company's core categories. The Company expects restructuring activities to be completed in 2021. The following is a summary of the charges incurred:

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

	Thirteen Weeks Ended<br> <br>June26, 2021		Thirteen Weeks Ended<br> <br>June27, 2020			Twenty-six Weeks Ended<br> <br>June26, 2021		Twenty-six Weeks Ended<br> <br>June27, 2020
Facility consolidation ^(1)^
Labor expenses	$	—	$	98		$	—	$	377
Consulting and legal fees		—		3			—		51
Other expenses		—		(55	)		5		662
Rent and related charges		—		450			—		1,089
Severance		—		483			30		532
Total	$	—	$	979		$	35	$	2,711
(1)	Facility consolidation includes labor expense related to organizing inventory and equipment in preparation for the facility consolidation,<br>consulting and legal fees related to the project, and other expenses. These expenses were included in SG&A on the Condensed Consolidated<br>Statement of Comprehensive Loss.
---	---

The following represents the roll forward of Canada restructuring reserves for the current period:

	Severance and related expense
Balance as of December 28, 2019	$	1,121
Restructuring Charges		707
Cash Paid		(1,519	)
Balance as of December 26, 2020	$	309
Restructuring Charges		30
Cash Paid		(281	)
Balance as of June 26, 2021	$	58

United States Restructuring

During fiscal 2019, the Company began implementing a plan to restructure the management and operations within the United States to achieve synergies and cost savings associated with the Company's acquisition activities. This restructuring includes management realignment, integration of sales and operating functions, and strategic review of the Company's product offerings. This plan was finalized during the fourth quarter of fiscal 2019. The Company incurred additional charges in fiscal 2020 and 2021 related to the consolidation of two of our distribution centers. Charges incurred in part of the United States Restructuring Plan included:

	Thirteen Weeks Ended<br> <br>June26, 2021		Thirteen Weeks Ended<br> <br>June27, 2020		Twenty-six Weeks Ended<br> <br>June26, 2021		Twenty-six Weeks Ended<br> <br>June27, 2020
Management realignment & integration
Severance	$	—	$	749	$	74	$	880
Facility closures
Severance		—		404		—		404
Other		—		29		—	$	29
Total	$	—	$	1,182	$	74	$	1,313

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The following represents the roll forward of United States restructuring reserves for the current period:

	Severance and related expense
Balance as of December 28, 2019	$	3,286
Restructuring Charges		1,789
Cash Paid		(4,250	)
Balance as of December 26, 2020	$	825
Restructuring Charges		74
Cash Paid		(612	)
Balance as of June 26, 2021	$	287

10. Long Term Debt:

The following table summarizes the Company’s debt:

	June 26, 2021			December 26, 2020
Revolving loans	$	158,000		$	72,000
Senior term loan, due 2025		1,066,740			1,037,044
6.375% Senior Notes, due 2022		330,000			330,000
11.6% Junior Subordinated Debentures - Preferred		105,443			105,443
Junior Subordinated Debentures - Common		3,261			3,261
Capital & finance leases		1,773			2,044
		1,665,217			1,549,792
Unamortized premium on 11.6% Junior Subordinated Debentures		13,777			14,591
Unamortized discount on Senior term loan		(5,783	)		(6,532	)
Current portion of long term debt, capital leases and finance leases		(11,442	)		(11,481	)
Deferred financing fees		(10,293	)		(10,862	)
Total long term debt, net	$	1,651,476		$	1,535,508

As of June 26, 2021, there was $1,066,740 outstanding under the 2018 Term Loan. As of June 26, 2021, the Company had $158,000 outstanding under the ABL Revolver along with $27,908 of letters of credit. The Company has approximately $64,092 of available borrowings under the ABL Revolver as a source of liquidity.

On April 16, 2021, the Company acquired Oz Post International, LLC ("OZCO"). The Company entered into an amendment ("OZCO Amendment") to the term loan credit agreement dated May 31, 2018 (the "2018 Term Loan"), which provided $35,000 of incremental term loan funds to be used to finance the acquisition. See Note 4 - Acquisitions for additional information regarding the OZCO acquisition.

Additional information with respect to the fair value of the Company’s fixed rate senior notes and junior subordinated debentures is included in Note 13 - Fair Value Measurements.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

11. Leases

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Lessee

The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. The Company leases certain distribution center locations, vehicles, forklifts, computer equipment, and its corporate headquarters with expiration dates through 2032. Certain lease arrangements include escalating rent payments and options to extend the lease term. Expected lease terms include these options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. The Company's leasing arrangements do not contain material residual value guarantees nor material restrictive covenants.

---

The components of operating and finance lease cost for the thirteen and twenty-six weeks ended June 26, 2021 and thirteen and twenty-six weeks ended June 27, 2020 were as follows:

	Thirteen Weeks Ended<br> <br>June26, 2021		Twenty-six Weeks Ended<br> <br>June26, 2021		Thirteen Weeks Ended<br> <br>June27, 2020		Twenty-six Weeks Ended<br> <br>June27, 2020
Operating lease cost	$	5,149	$	10,243	$	4,547	$	9,294
Short term lease costs		1,100		1,986		528		1,049
Variable lease costs		453		757		491		671
Finance lease cost:
Amortization of right of use assets		224		438		200		402
Interest on lease liabilities		32		67		36		72

---

Rent expense totaled $6,702 and $12,986 in the thirteen and twenty-six weeks ended June 26, 2021, respectively, and $5,566 and $11,014 in the thirteen and twenty-six weeks ended June 27, 2020, respectively. Rent expense includes operating lease cost as well as expense for non-lease components such as common area maintenance, real estate taxes, real estate insurance, variable costs related to our leased vehicles and also short-term rental expenses.

---

The implicit rate is not determinable in most of the Company’s leases, as such management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The weighted average remaining lease terms and discount rates for all of our operating and finance leases were as follows as of June 26, 2021 and December 26, 2020:

---

	June 26, 2021		December 26, 2020
	Operating <br><br>Leases	Finance <br><br>Leases	Operating <br><br>Leases	Finance <br><br>Leases
Weighted average remaining lease term	7.09	2.47	7.19	2.61
Weighted average discount rate	8.20%	7.15%	8.28%	7.14%

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

---

Supplemental balance sheet information related to the Company's finance leases was as follows as of June 26, 2021 and December 26, 2020:

	June 26, 2021		December 26, 2020
Finance lease assets, net, included in property plant and equipment	$	1,783	$	1,919
Current portion of long-term debt		833		872
Long-term debt, less current portion		940		1,172
Total principal payable on finance leases		1,773		2,044

---

Supplemental cash flow information related to the Company's operating leases was as follows for the twenty-six weeks ended June 26, 2021 and twenty-six weeks ended June 27, 2020:

---

	Twenty-six Weeks Ended<br> <br>June26, 2021		Twenty-six Weeks Ended<br> <br>June27, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	9,778	$	8,956
Operating cash outflow from finance leases		68		72
Financing cash outflow from finance leases		460		411

---

Maturities of our lease liabilities for all operating and finance leases are as follows as of June 26, 2021:

	Operating Leases			Finance Leases
Less than one year	$	18,542		$	937
1 to 2 years		17,126			628
2 to 3 years		15,665			373
3 to 4 years		15,473			5
4 to 5 years		14,647			—
After 5 years		37,231			—
Total future minimum rental commitments		118,684			1,943
Less - amounts representing interest		(28,642	)		(170	)
Present value of lease liabilities	$	90,042		$	1,773

Lessor

---

The Company has certain arrangements for key duplication equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material.

12. Derivatives and Hedging:

The Company uses derivative financial instruments to manage our exposures to (1) interest rate fluctuations on our floating rate senior debt and (2) fluctuations in foreign currency exchange rates. The Company measures those instruments at fair value and recognizes changes in the fair value of derivatives in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures.

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Interest Rate Swap Agreements

On January 8, 2018, the Company entered into a forward Interest Rate Swap Agreement ("2018 Swap 1") with three-year terms for notional amounts of $90,000. The forward start date of the 2018 Swap was September 30, 2018 and the termination date is June 30, 2021. The 2018 Swap 1 has a determined interest rate of 2.3% plus the applicable interest rate margin of 4.0% for an effective rate of 6.3%.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

On November 8, 2018, the Company entered into another new forward Interest Rate Swap Agreement ("2018 Swap 2") with three-year terms for $60,000 notional amount. The forward start date of the 2018 Swap 2 was November 30, 2018 and the termination date is November 30, 2022. The 2018 Swap 2 has determined interest rate of 3.1% plus the applicable interest rate margin of 4.0% for an effective rate of 7.1%.

The fair value of the 2018 Swap 1 was $110 as of June 26, 2021 and it was reported on the Condensed Consolidated Balance Sheets within other accrued expenses. The fair value of the 2018 Swap 2 was $2,659 as of June 26, 2021 and it was reported on the Condensed Consolidated Balance Sheets within other non-current liabilities. A decrease in other expense was recorded in the Statement of Comprehensive Loss for the favorable change of $1,424 in fair value since December 26, 2020.

The fair value of 2018 Swap 1 was $709  as of December 26, 2020 and is reported within other accrued expenses. The fair value of 2018 Swap 2 was $3,484 as of December 26, 2020 and is reported within other non-current liabilities.

The Company's interest rate swap agreements do not qualify for hedge accounting treatment because they did not meet the provisions specified in ASC 815, Derivatives and Hedging (“ASC 815”). Accordingly, the gain or loss on these derivatives was recognized in current earnings.

The Company does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes.

Additional information with respect to the fair value of derivative instruments is included in Note 13 - Fair Value Measurements.

13. Fair Value Measurements:

The Company uses the accounting guidance that applies to all assets and liabilities that are being measured and reported on a fair value basis. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1:	Quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs reflecting the reporting entity’s own assumptions.

The following tables set forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy:

	As of June 26, 2021
	Level 1		Level 2			Level 3			Total
Trading securities	$	1,582	$	—		$	—		$	1,582
Interest rate swaps		—		(2,769	)		—			(2,769	)
Contingent consideration payable		—		—			(12,959	)		(12,959	)
	As of December 26, 2020
---	---	---	---	---	---	---	---	---	---	---	---
	Level 1		Level 2			Level 3			Total
Trading securities	$	1,911	$	—		$	—		$	1,911
Interest rate swaps		—		(4,193	)		—			(4,193	)
Contingent consideration payable		—		—			(14,197	)		(14,197	)

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Trading securities are valued using quoted prices on an active exchange. Trading securities represent assets held in a Rabbi Trust to fund deferred compensation liabilities and are included as other assets on the accompanying Condensed Consolidated Balance Sheets.

The Company utilizes interest rate swap contracts to manage our targeted mix of fixed and floating rate debt, and these contracts are valued using observable benchmark rates at commonly quoted intervals for the full term of the swap contracts. As of June 26, 2021 and December 26, 2020, the 2018 Swap 1 was recorded within other accrued expenses and the 2018 Swap 2 was recorded within other non-current liabilities on the accompanying Condensed Consolidated Balance Sheets.

The contingent consideration represents future potential earn-out payments related to the Resharp acquisition in fiscal 2019 and the Instafob acquisition in the first quarter of 2020. The estimated fair value of the contingent earn-outs was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earn-out payments. The resulting value captures the risk associated with the form of the payout structure. The risk neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability. As of June 26, 2021, the total contingent consideration was recorded as $1,264 of other accrued expenses and $11,695 in other non-current liabilities on the Condensed Consolidated Balance Sheets. As of December 26, 2020, the total contingent consideration was recorded as $417 of other accrued expenses and $13,780 in other non-current liabilities on the Condensed Consolidated Balance Sheets. As of June 26, 2021 compared to December 26, 2020, the Company recorded a $1,097 and $115 decrease in the Resharp and Instafob contingent consideration liability, respectively. The total $1,212 gain on the revaluation was determined by using a simulation model of the Monte Carlo analysis that included updated projections applicable to the liability as of June 26, 2021 compared to the prior valuation period and was recorded within other income in the Condensed Consolidated Statements of Comprehensive Income.

The fair value of the Company's fixed rate senior notes and junior subordinated debentures as of June 26, 2021 and December 26, 2020 were determined by utilizing current trading prices obtained from indicative market data. As a result, the fair value measurements of the Company's senior term notes and debentures are considered to be Level 2.

	June 26, 2021				December 26, 2020
	Carrying<br> <br>Amount		Estimated<br> <br>FairValue		Carrying<br> <br>Amount		Estimated<br> <br>FairValue
6.375% Senior Notes	$	328,889	$	330,330	$	328,333	$	327,525
Junior Subordinated Debentures		122,481		120,514		123,295		128,022

Cash, accounts receivable, accounts payable, and accrued liabilities are reflected in the Condensed Consolidated Financial Statements at book value, which approximates fair value, due to the short-term nature of these instruments. The carrying amount of the long-term debt under the revolving credit facility approximates the fair value at June 26, 2021 and December 26, 2020 as the interest rate is variable and approximates current market rates. The Company also believes the carrying amount of the long-term debt under the senior term loan approximates the fair value at June 26, 2021 and December 26, 2020 because, while subject to a minimum LIBOR floor rate, the interest rate approximates current market rates of debt with similar terms and comparable credit risk.

14. Segment Reporting:

The Company’s segment reporting structure uses the Company’s management reporting structure as the foundation for how the Company manages its business. The Company periodically evaluates its segment reporting structure in accordance with ASC 350-20-55 and has concluded that it has three reportable segments as of June 26, 2021: Hardware and Protective Solutions, Robotics and Digital Solutions, and Canada. The Company evaluates the performance of its segments based on revenue and income (loss) from operations, and does not include segment assets nor non-operating income/expense items for management reporting purposes.

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The table below presents revenues and income (loss) from operations for our reportable segments for the thirteen and twenty-six weeks ended June 26, 2021 and thirteen and twenty-six weeks ended June 27, 2020.

	Thirteen Weeks Ended<br> <br>June 26, 2021		Thirteen Weeks Ended<br> <br>June 27, 2020			Twenty-six Weeks Ended<br> <br>June 26, 2021		Twenty-six Weeks Ended<br> <br>June 27, 2020
Revenues
Hardware and Protective Solutions	$	263,129	$	269,499		$	514,058	$	482,676
Robotics and Digital Solutions		66,351		42,198			122,230		98,505
Canada		46,235		35,013			80,708		61,365
Total revenues	$	375,715	$	346,710		$	716,996	$	642,546
Segment income (loss) from operations
Hardware and Protective Solutions	$	9,995	$	24,423		$	16,045	$	33,276
Robotics and Digital Solutions		6,546		(4,510	)		6,700		1,386
Canada		2,968		815			2,544		(4,488	)
Total income from operations	$	19,509	$	20,728		$	25,289	$	30,174

15. Earnings per share

Basic earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share include the dilutive effect of stock options and restricted stock awards. The following is a reconciliation of the basic and diluted earnings per share ("EPS") computations for both the numerator and denominator (in thousands, except per share data):

	Thirteen weeks ended June 26, 2021								Twenty-six weeks ended June 26, 2021
	Earnings<br> <br>(Numerator)			Shares<br> <br>(Denominator)		Per Share<br> <br>Amount			Earnings<br> <br>(Numerator)			Shares<br> <br>(Denominator)		Per Share<br> <br>Amount
Net loss	$	(3,385	)		553	$	(6	)	$	(12,355	)		553	$	(22	)
Dilutive effect of stock options	$	—			—	$	—		$	—			—	$	—
Net loss per diluted common share	$	(3,385	)	$	553	$	(6	)	$	(12,355	)	$	553	$	(22	)
	Thirteen weeks ended June 27, 2020								Twenty-six weeks ended June 27, 2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Earnings<br> <br>(Numerator)			Shares<br> <br>(Denominator)		Per Share<br> <br>Amount			Earnings<br> <br>(Numerator)			Shares<br> <br>(Denominator)		Per Share<br> <br>Amount
Net loss	$	(5,037	)		544	$	(9	)	$	(19,841	)		544	$	(36	)
Dilutive effect of stock options	$	—			—	$	—		$	—			—	$	—
Net loss per diluted common share	$	(5,037	)	$	544	$	(9	)	$	(19,841	)	$	544	$	(36	)

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HMAN GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Stock options outstanding totaling 83 thousand and 82 thousand were excluded from the computation as of June 26, 2021 and June 27, 2020, respectively, as they would have had an antidilutive effect under the treasury stock method.

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15. Subsequent Events:

On July 14, 2021, subsequent to quarter end, the Company and Landcadia Holdings III, Inc. (“Landcadia” and after the Business Combination described herein, “New Hillman”), a special purpose acquisition company ("SPAC") consummated the previously announced business combination (the “Closing”) pursuant to the terms of the Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, and as it may be further amended or supplemented from time to time, the “Merger Agreement”). In accordance with the terms and subject to the conditions set forth in the Merger Agreement, Landcadia paid aggregate consideration in the form of New Hillman common stock calculated as described herein and equal to a value of approximately (i) $911,300,000 plus (ii) $28,280,000, such amount being the value of 2,828,000 shares of Class B common stock of Landcadia, valued at $10.00 per share, that TJF, LLC (“TJF Sponsor”) and Jefferies Financial Group Inc., (“JFG Sponsor” and, together with TJF Sponsor, the “Sponsors”) agreed to forfeit at the Closing.

In connection with the Closing, the Company entered into a new credit agreement with Jefferies Finance LLC, as administrative agent, and the lenders and other parties thereto (the “Term Credit Agreement”), which provided for a new funded term loan facility of $835.0 million and a delayed draw term loan facility of $200.0 million (of which $16.0 million was drawn). The Company also also entered into an amendment to their existing asset-based revolving credit agreement (the “ABL Amendment”) with Barclays Bank PLC, as administrative agent, and the lenders and other parties thereto (the “ABL Credit Agreement”), increasing the aggregate commitments thereunder to $250.0 million, extended the maturity and conformed certain provisions to the Term Credit Agreement. The proceeds of the funded term loans under the Term Credit Agreement and revolving credit loans under the ABL Credit Agreement were used, together with other available cash, to (1) refinance in full all outstanding term loans and to terminate all outstanding commitments under the credit agreement, dated as of May 31, 2018, (2) refinance outstanding revolving credit loans, and (3) redeem in full senior notes due July 15, 2022 (the “6.375% Senior Notes”).

In anticipation of the Business Combination and the refinancings described above, on July 13, 2021, the Company delivered a notice to redeem in full 11.6% Junior Subordinated Debentures due September 30, 2027 (the “Junior Subordinated Debentures”) issued under the Indenture, dated as of September 5, 1997 (as amended and supplemented, the “Debentures Indenture”), between The Hillman Companies and The Bank of New York Mellon, a New York banking corporation, as Trustee (the “Trustee”) and deposited an amount with the Trustee sufficient to satisfy and discharge the Debentures Indenture, which is no longer in effect. Notices to redeem 4,217,837 trust preferred securities (the “Trust Preferred Securities”) issued in a public offering by the Hillman Group Capital Trust ("Trust") and 130,449 of trust common securities (the “Trust Common Securities”) issued by the Trust to Hillman Companies were also delivered on July 13, 2021. Upon the payment of the redemption price for the Debentures on August 12, 2021, the Trust will redeem the Trust Preferred Securities and the Trust Common Securities, which as of August 12, 2021 will no longer be deemed to be outstanding. The last day of trading for the Trust Preferred Securities on the New York Stock Exchange (the “NYSE”) will be August 11, 2021 and the Company is voluntarily delisting the Trust Preferred Securities from the NYSE.

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Exhibit 99.3

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UNAUDITEDPRO FORMA CONDENSED CONSOLIDATED COMBINED FINANCIAL INFORMATION

Capitalized terms used butnot defined herein shall have the meanings ascribed to them in the Current Report on Form 8-K to which this Unaudited Pro Forma CondensedCombined Financial Information is attached (the “Form 8-K”)  or, if such terms are not defined in the Form 8-K, thensuch terms shall have the meanings ascribed to them in the proxy statement/prospectus filed with the Securities and Exchange Commission(the “SEC”) by Landcadia on June 11, 2021 (the “Proxy Statement”).

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Introduction

Landcadia and Hillman are providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the business combination. The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes, which are included elsewhere in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached.

The unaudited pro forma condensed combined balance sheet as of June 26, 2021 combines the unaudited condensed balance sheet of Landcadia as of June 30, 2021 with the unaudited condensed combined balance sheet of Hillman as of June 26, 2021, giving effect to the Merger.

The unaudited pro forma condensed combined statement of operations for the twenty-six weeks ended June 26, 2021 combines the unaudited condensed statement of operations of Landcadia for the twenty-six weeks ended June 30, 2021 with the unaudited condensed combined statement of operations of Hillman for the twenty-six weeks ended June 26, 2021. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 combines the audited condensed statement of operations of Landcadia for the year ended December 31, 2020 with the audited condensed combined statement of operations of Hillman for the year ended December 26, 2020, giving effect to the Merger as if it had been consummated on January 1, 2020, the beginning of the earliest period presented.

The unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included elsewhere in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached:

•	The historical unaudited condensed financial statements of Landcadia as of and for the twenty-six weeks<br>ended June 30, 2021, and the historical audited financial statements of Landcadia as of and for the year ended December 31, 2020, which<br>are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined<br>Financial Information is attached; and
•	The historical unaudited condensed consolidated financial statements<br>of Hillman as of and for the twenty-six weeks ended June 26, 2021 and the historical audited consolidated financial statements as of<br>and for the year ended December 26, 2020, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to<br>which this Unaudited Pro Forma Condensed Combined Financial Information is attached.
---	---

The foregoing historical financial statements have been prepared in accordance with GAAP. The unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical financial statements and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined financial information. The pro forma adjustments reflect transaction accounting adjustments related to the Merger, which is discussed in further detail below. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to represent Landcadia’s consolidated results of operations or consolidated financial position that would actually have occurred had the Merger been consummated on the dates assumed or to project Landcadia’s consolidated results of operations or consolidated financial position for any future date or period.

The unaudited pro forma condensed combined financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Landcadia” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Hillman,” and other financial information, which are included elsewhere in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached. ****

Description of the Merger

On January 24, 2021, Landcadia and Hillman entered into the Merger Agreement. Pursuant to the Merger Agreement, and Landcadia has merged with and into Hillman. Upon Closing, Hillman became a wholly-owned subsidiary of Landcadia.

Upon Closing, the ownership distribution of the successor entity was as follows:

		Shares		%
Hillman Holdco stockholders			91.4		48.7
Landcadia Public Stockholders^(1)^			50.0		26.7
PIPE Investors^(2)^			35.0		18.7
SPAC Sponsors– JFG Sponsor^(3)^			7.2		3.8
SPAC Sponsors – TJF Sponsor			4.0		2.1
Total Shares			187.6		100.0

All values are in US Dollars.

(1)	Includes 1,503,200 public shares held by Jefferies LLC, a subsidiary of JFG Sponsor.
(2)	Excludes 2.5 million shares held by JFG Sponsor through additional investment in PIPE.
---	---
(3)	Includes 2.5 million shares held by JFG Sponsor through additional investment in PIPE and excludes 1,503,200<br>public shares held by Jefferies LLC, a subsidiary of JFG Sponsor.
---	---

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Accounting for the Merger

The Merger will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Landcadia has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the Hillman equity holders having a relative majority of the voting power of the combined entity, Hillman having the authority to appoint a majority of directors on the Board of Directors, and senior management of Hillman comprising the majority of the senior management of the combined entity. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Hillman with the acquisition being treated as the equivalent of Hillman issuing stock for the net assets of Landcadia, accompanied by a recapitalization. The net assets of Landcadia will be stated at historical cost, with no goodwill or other intangible assets recorded. ****

Basis of Pro Forma Presentation

The historical financial information has been adjusted to give pro forma effect to the transaction accounting required for the Merger. The adjustments in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the combined entity upon the Closing.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined entity will experience. Landcadia and Hillman have not had any historical relationship prior to the Merger. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

Unaudited Pro Forma Condensed Combined Balance Sheet

(in thousands)

	As of June 26, 2021			As of June 30, 2021
	Hillman Historical			Landcadia III Historical			Pro Forma Transaction Adjustments				Pro Forma Combined
ASSETS
Current assets
Cash and cash equivalents		16,255			86			500,010		(A)		75,340
								375,000		(B)
								(1,663,735	)	(C)
								944,000		(D)
								(96,276	)	(E)
Accounts receivable, net		146,865			-							146,865
Inventories, net		482,645			-							482,645
Other current assets		22,125			132							22,257
Total current assets		667,890			218			58,999				727,107
Property, Plant, and Equipment, net		174,466			-							174,466
Other assets:
Goodwill		826,969			-							826,969
Other intangibles, net		826,949			-							826,949
Operating lease right of use assets		85,312			-							85,312
Deferred tax asset		2,728			-							2,728
Other assets		12,739			-							12,739
Cash and accrued interest held in trust account		-			500,010			(500,010	)	(A)		-
Total other assets		1,754,697			500,010			(500,010	)			1,754,697
Total assets		2,597,053			500,228			(441,011	)			2,656,270
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable		229,618			113							229,731
Current portion of debt and capital leases		11,442			-			(10,609	)	(C)		833
Current portion of operating lease liabilities		11,838			-							11,838
Accrued expenses		74,506			-			-				74,506
Total current liabilities		327,404			113			(10,609	)			316,908
Other liabilities
Long term debt, net of deferred financing costs		1,651,476			-			(1,649,703	)	(C)		945,773
								944,000		(D)
Deferred underwriting fee payable		-			17,500			(17,500	)	(E)		-
Warrant derivative liability					74,840							74,840
Deferred tax liabilities		151,970			-							151,970
Operating lease liabilities		78,204			-							78,204
Other non-current liabilities		24,154			-							24,154
Total other liabilities		1,905,804			92,340			(723,203	)			1,274,941
Shareholders' equity
Class A common stock subject to possible redemption (J)		-			500,000			(500,000	)	(I)		-
Class A Common stock (J)		5			-			4		(B)		19
								4		(G)
								1		(H)
								5		(I)
Class B Common stock (J)		-			1			(1	)	(H)		-
Paid-in capital		575,437			-			374,996		(B)		1,358,198
								(92,226	)	(F)
								(4	)	(G)
								499,995		(I)
Treasury stock		(4,320	)		-							(4,320	)
Accumulated deficit		(184,204	)		(92,226	)		(3,423	)	(C)		(266,403	)
								92,226		(F)
								(78,776	)	(E)
Accumulated other comprehensive loss		(23,073	)		-			-				(23,073	)
Total shareholders' equity		363,845			(92,225	)		792,801				1,064,421
Total liabilities and shareholders' equity		2,597,053			500,228			(441,011	)			2,656,270

Unaudited Pro Forma Condensed Combined Statement of Operations

(in thousands, except share and per share amounts)

	For the Quarter Ended <br><br>June 26, 2021			For the Quarter Ended <br><br>June 30, 2021
	Hillman Historical			Landcadia III Historical			Pro Forma Transaction Adjustments				Pro Forma Combined
Net sales		716,996			-			-				716,996
Cost of sales		417,265			-			-				417,265
Selling, general and administrative expenses		214,841			991			-				215,832
Depreciation		31,611			-			-				31,611
Amortization		30,323			-			-				30,323
Management fees to related party		214			-			-				214
Other (income) expense		(2,547	)		-			-				(2,547	)
Total operating expense		691,707			991			-				692,698
Income (loss) from Operations		25,289			(991	)		-				24,298
Interest expense, net		38,178			(32	)		(37,148	)	(AA)		16,065
								15,035		(BB)
								32		(CC)
Change in fair value of warrant derivative liability					19,120							19,120
Interest expense on junior subordinated debentures		6,304			-			-				6,304
Investment income		(189	)		-			-				(189	)
Loss on mark-to-market adjustment of interest rate swap		(1,424	)		-			-				(1,424	)
Income (loss) before income taxes		(17,580	)		(20,079	)		22,081				(15,578	)
Income tax expense (benefit)		(5,225	)		-			2,512		(DD)		(2,713	)
Net income (loss)		(12,355	)		(20,079	)		20,128				(12,306	)
Foreign currency translation adjustment		6,315			-			-				6,315
Comprehensive income (loss)		(6,040	)		(20,079	)		20,128				(5,991	)
Net earnings:
Basic earnings per share		(22.33	)		(1.09	)						(0.07	)	(EE)
Average shares outstanding		553,300			18,394,339							187,569,511		(EE)

Unaudited Pro Forma Condensed Combined Statement of Operations

(in thousands, except share and per share amounts)

	For the Year Ended <br><br>December 26, 2020			For the Year Ended <br><br>December 31, 2020
	Hillman Historical			Landcadia III Historical			Pro Forma Transaction Adjustments				Pro Forma Combined
Net sales		1,368,295			-			-				1,368,295
Cost of sales		781,815			-			-				781,815
Selling, general and administrative expenses		398,472			1,279			-				399,751
Depreciation		67,423			-			-				67,423
Amortization		59,492			-			-				59,492
Management fees to related party		577			-			-				577
Other (income) expense		(5,250	)		-			-				(5,250	)
Total operating expense		1,302,529			1,279			-				1,303,808
Income (loss) from Operations		65,766			(1,279	)		-				64,487
Interest expense, net		86,774			(79	)		(83,513	)	(FF)		42,520
								35,836		(GG)
								3,423		(HH)
								79		(II)
Change in fair value of warrant derivative liability					27,690							27,690
Interest expense on junior subordinated debentures		12,707			-			-				12,707
Investment income		(378	)		-			-				(378	)
Other (income) expense		-			-			(325	)	(JJ)		(325	)
Loss on mark-to-market adjustment of interest rate swap		601			-			-				601
Income (loss) before income taxes		(33,938	)		(28,890	)		44,500				(18,328	)
Income tax expense (benefit)		(9,439	)		-			5,590		(KK)		(3,849	)
Net income (loss)		(24,499	)		(28,890	)		38,910				(14,479	)
Foreign currency translation adjustment		2,652			-			-				2,652
Comprehensive income (loss)		(21,847	)		(28,890	)		38,910				(11,827	)
Net earnings:
Basic earnings per share		(44.92	)		(2.99	)				(LL)		(0.08	)
Average shares outstanding		545,370			9,654,569					(LL)		187,569,511

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1. Basis of Presentation

The pro forma adjustments have been prepared as if the Merger had been consummated on June 26, 2021, in the case of the unaudited pro forma condensed combined balance sheet, and as if the Merger had been consummated on January 1, 2020, the beginning of the earliest period presented in the unaudited pro forma condensed combined statements of operations.

The unaudited pro forma condensed combined financial information has been prepared assuming the following methods of accounting in accordance with GAAP.

The Merger will be accounted for as a reverse recapitalization in accordance with GAAP. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Hillman with the acquisition being treated as the equivalent of Hillman issuing stock for the net assets of Landcadia, accompanied by a recapitalization. The net assets of Landcadia will be stated at historical cost, with no goodwill or other intangible assets recorded.

The pro forma adjustments represent management’s estimates based on information available as of the date of this proxy statement/prospectus and are subject to change as additional information becomes available and additional analyses are performed. Management considers this basis of presentation to be reasonable under the circumstances.

One-time direct and incremental transaction costs incurred prior to, or concurrent with, the Closing are reflected in the unaudited pro forma condensed combined balance sheet as a direct reduction to the combined entity’s additional paid-in capital and are assumed to be cash settled.

2. Adjustments and Assumptions to the UnauditedPro Forma Condensed Combined Balance Sheet as of June 26, 2021

The adjustments included in the unaudited pro forma condensed combined balance sheet as of June 26, 2021 are as follows:

(A)	Reflects the reclassification of cash and marketable securities<br>held in the trust account that became available in conjunction with the business combination.
(B)	Represents the pro forma adjustment to record the net proceeds of $375.0 million from the private placement<br>and issuance of 37.5 million shares of Class A common stock to the PIPE Investors.
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(C)	Represents the pro forma adjustment to remove Hillman's previously held debt. This debt was paid down<br>and new debt was issued, as represented by the adjustment at (D). The existing debt was and new debt has been issued via syndication with<br>several lending institutions. Management performed a debt modification versus extinguishment analysis on the basis of each lending institution<br>included in the syndication, and the paydown was determined to be partially a modification and partially an extinguishment, depending<br>on the facts and circumstances related to the particular lending institution. The recognition of expenses related to deferred financing<br>costs of the previously held debt, as represented by the adjustment at (II), were recorded as a reduction in retained earnings.
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(D)	Represents the pro forma adjustment to record new debt in line with the paydown of previously held debt<br>and issuance of new debt discussed further at (C).
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(E)	Represents transaction costs of $96.3 million, including $6.6 million in ticking fees. Of the total amount<br>shown $17.5 million in deferred underwriter fees were incurred and accrued for on the balance sheet as of June 26, 2021.
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(F)	Reflects the elimination of Landcadia’s historical accumulated deficit.
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(G)	Represents issuance of 91.4 million shares of Class A Common Stock to existing Hillman equity holders<br>as consideration for the reverse recapitalization.
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(H)	Represents adjustment to present 8.7 million shares of Class A Common Stock held by the Landcadia Sponsors.
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(I)	Reflects the reclassification of approximately $433.6 million of Class A Common Stock subject<br>to possible redemption to permanent equity.
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(J)	Authorized, issued and outstanding shares for each class of common stock and preferred stock as of June<br>26, 2021 and on a pro forma basis is as follows:
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	June 26, 2021						Pro Forma Combined Company
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	Authorized		Issued		Outstanding		Authorized		Issued		Outstanding
Landcadia Preferred Stock		1,000,000		-		-		1,000,000		-		-
Landcadia Class A common stock subject to possible redemption		50,000,000		50,000,000		50,000,000		-		-		-
Landcadia Class A Common Stock		380,000,000		-		7,721,207		500,000,000		187,569,511		187,569,511
Landcadia Class B Common Stock		20,000,000		12,500,000		12,500,000		-		-		-
Hillman Preferred Stock		200,000		-		-		N/A		N/A		N/A
Hillman Class A Common Stock		1,800,000		553,439		553,439		N/A		N/A		N/A

As a result of the Business Combination, Landcadia common stock was issued for Hillman’s issued and outstanding common and preferred stock. There is no longer any Hillman common or preferred stock issued and outstanding after the Business Combination; thus, subsequent to the merger, all Hillman share totals are noted as not applicable in the table above.

3. Adjustments and Assumptions to the UnauditedPro Forma Condensed Combined Statement of Operations for the Twenty-six weeks ended June 26, 2021

The adjustments included in the unaudited pro forma condensed combined statement of operations for the twenty-six weeks ended June 26, 2021 are as follows:

(AA)	Represents the pro forma adjustment to remove interest expense associated with the paydown of Hillman's<br>existing debt.
(BB)	Represents the pro forma adjustment to record interest expense associated<br>with new debt. The new debt has a variable interest rate, which for the new term loan is 275 basis points over the greater of LIBOR and<br>a floor of 0.5% and for the asset-based loan ("ABL") is 150 basis points over LIBOR. The effective interest rate was determined<br>using the actual 1-month LIBOR for 2021 reset on a monthly basis, resulting in interest expense of $14.6 million. A change in LIBOR of<br>1/8 of a percent would not result in an increase or decrease in interest expense for the quarter. Additional interest expense related<br>to incremental amortization of OID of $0.2 million, commitment fees of $0.2 million, and agent fees of $0.1 million, resulting in total<br>interest expense of $15.0 million for the twenty-six weeks ended June 26, 2021.
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(CC)	Reflects the elimination of interest earned on marketable securities held in the trust account.
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(DD)	Represents the adjustment to taxes such that the effective pro forma tax rate for the twenty-six weeks<br>ended June 26, 2021 is equal to the relevant statutory income tax rate of 21%.
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(EE)	Represents net loss per share computed by dividing net loss by the weighted average number of common shares<br>outstanding for the twenty-six weeks ended June 26, 2021.
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4. Adjustments and Assumptions to the UnauditedPro Forma Condensed Combined Statement of Operations for the Year ended December 26, 2020

The adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 26, 2020 are as follows:

(FF)	Represents the pro forma adjustment to remove interest expense associated with the paydown of Hillman's<br>existing debt.
(GG)	Represents the pro forma adjustment to record interest expense associated with new debt. The new debt<br>has a variable interest rate, which for the new term loan is 275 basis points over the greater of LIBOR and a floor of 0.5% and for the<br>ABL is 150 basis points over LIBOR. The effective interest rate was determined using the actual 1-month LIBOR for 2020 reset on a monthly<br>basis, resulting in interest expense of $34.9 million. A change in LIBOR of 1/8 of a percent would result in an increase or decrease in<br>interest expense for the quarter of $0.9 million. Additional interest expense related to amortization of original issue discount of $0.4<br>million, commitment fees of $0.4 million, and agent fees of $0.2 million, resulted in total interest expense of $35.8 million for the<br>year ended December 26, 2020.
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(HH)	Represents the recognition of nonrecurring expenses related to deferred financing costs in the amount<br>of $3.4 million related to previously held debt. The recognition of these expenses was accelerated as a result of the debt modification<br>versus extinguishment analysis associated with the paydown of debt discussed further at (C).
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(II)	Reflects the elimination of interest earned on marketable securities held in the trust account.
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(JJ)	Represents the recognition of a nonrecurring net gain on the extinguishment of debt in the amount of $0.3<br>million, which was comprised of a loss of $13.3 million related to the discount on the previously held debt and a gain of $13.6 million<br>related to the premium on the associated trust preferred debt, inclusive of certain fees written off as a result of the extinguishment.<br>The recognition of this gain and loss, respectively, were determined as a result of the debt modification versus extinguishment analysis<br>associated with the paydown of debt discussed further at (C).
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(KK)	Represents the adjustment to taxes such that the effective pro forma tax rate for the year ended December<br>26, 2020 is equal to the relevant statutory income tax rate of 21%.
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(LL)	Represents net income per share computed by dividing net income<br>by the weighted average number of common shares outstanding for the year ended December 26, 2020.
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