Good morning, and welcome to the second quarter 2024 results presentation for Hillman Solutions Corp. My name is Gigi, and I'll be your conference call operator today. Before we begin, I would like to remind our listeners that today's presentation is being recorded and simultaneously webcast. The company's earnings release, presentation, and 10-Q were issued this morning. These documents and a replay of today's presentation can be accessed on Hillman's Investor Relations website at ir.hillmangroup.com. I would now like to turn the call over to Michael Koehler with Hillman. Thank you, operator. Good morning, everyone, and thank you for joining us. I am Michael Koehler, Vice President of Investor Relations and Treasury. Joining me on today's call are Doug Cahill, our Chairman, President, and Chief Executive Officer; Jon Michael Adinolfi, our Chief Operating Officer; and Rocky Kraft, our Chief Financial Officer. Before we begin today's call, I would like to remind our audience that certain statements made today may be considered forward-looking and are subject to the safe harbor provisions of applicable securities laws. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions, and other factors, many of which are beyond the company's control and may cause actual results to differ materially from those projected in such statements. Some of the other factors that could influence our results are contained in our periodic and annual reports filed with the SEC. For more information regarding these risks and uncertainties, please see slide two in our earnings call slide presentation, which is available on our website, ir.hillmangroup.com. In addition, on today's call, we will refer to certain non-GAAP financial measures. Information regarding our use of and reconciliations of these measures to our GAAP results are available in our earnings call slide presentation. With that, Doug will begin today's call by highlighting our healthy second quarter financial results, touching on our guidance, and providing some commentary on the macro environment before turning the call over to JMA, who will hit on the Hillman moat and our operations. Rocky will go through the financials and our updated guidance before turning the call back to Doug for commentary on the executive succession plan we have separately announced this morning, and providing some closing comments before we open up the call to your questions. It's now my pleasure to turn the call over to our Chairman, President, and CEO, Doug Cahill. Doug? Thanks, Michael. Good morning, everyone. During the second quarter of 2024, we saw our Adjusted EBITDA results increase 18% over the year ago quarter, which outperformed our expectations. Our team did a great job controlling our costs and managing our margins, which led to a strong bottom line performance for the quarter. We're highly confident in our ability to continue to control costs, manage our margins, and manage our product mix for the remainder of the year. Because of this, we are increasing our full-year Adjusted EBITDA guidance. Our new range of $240 million-$250 million has a midpoint of $245 million, which reflects a 12% increase over our 2023 full year results. We're thrilled with how Hillman team is effectively managing margins and operating efficiently this year. The entire organization is pitched in, trimming costs where they are able to, and maximizing productivity above and beyond our expectations, all while fill rates remain strong at 95%. While we've done a good job controlling what we can control, the macro environment is soft, which has weighed in on our net sales expectations for the year. Because of this, we're revising our full year net sales to $1.44 billion-$1.48 billion, with a midpoint of $1.46 billion, reflecting a 1% decrease over our 2023 net sales. So far this year, our results feel a lot like 2009. That year, our top line was down about 5% due to the macro environment. However, our bottom line benefited from deflation, tightening cost control, which resulted in 10% increase in EBITDA. In the years following, we saw a return to our historical mid-single-digit growth rates, and we believe we're in the midst of a very similar situation today as we are optimistic about our future top line growth prospects. Hillman's a very good company when the economy is growing and markets are healthy, and our results are proving that Hillman is strong as things slow down. Back to the quarter. Our 2024 free cash flow expectations remain unchanged after our solid year-to-date results on cash. The strength of our bottom line performance gives us the confidence to reiterate our free cash flow guidance of $100 million-$120 million, with a midpoint of $110 million. Rocky will provide more detail on our guide in just a few minutes. Another highlight for Hillman is that we ended the quarter with net debt and trailing twelve-month Adjusted EBITDA ratio of 2.9 times, and we will continue to delever throughout the year. Hillman has not been below three times leverage since 2009, and since the beginning of 2021, we have paid down over $900 million of debt. Our financial strength and operational efficiency allows us to play offense. Let me tell you what that looks like to us. We believe we can continue our strategy of executing accretive, low risk tuck-in acquisitions in adjacent aisles. There are numerous opportunities out there, and we believe we will close on an acquisition that looks a lot like Koch by the end of the third quarter... We will not only have EBITDA growth due to the natural synergies, but also see additional top-line growth opportunities by leveraging the Hillman moat, as we are well-positioned with our in-store service team, direct store delivery model, and Hillman-owned brands. Outside of growing via M&A, we see sizable opportunities ahead. Our team of product managers and engineers have done a great job with innovation by developing patented and proprietary products. We believe this product innovation will lead to new business wins in the next couple of years, which will allow us to grow in excess of our historical new business growth rate. We're in a great position to stay on offense, which will build the foundation for our continued future growth. Net sales in the second quarter of 2024 totaled $379.4 million, which was essentially flat from the year-ago quarter. There are several drivers for our performance during the quarter. Number one was the sales from Koch acquisition, which added three percentage points to the top line. Number two is new business wins, which added about 2% to the top line. There were offsets by two main factors. Number one was a 90-point basis headwind from price, which was in line with our expectations. And number two was the overall market volume, which excludes the impact of new business wins and M&A. Overall market volumes were down about 4% for the quarter. These were all in line with our expectations, with the exception of market volume, which we are being impacted, obviously, by the macro. We have seen soft foot traffic, which we believe is driven by existing home sales in the U.S. It decreased from six million in 2021 to four million in 2023, the lowest level since 1995. This headwind has continued throughout 2024, with existing home sales at a similar level to 2023. Despite the soft macro, the new wins continue for Hillman, this time with our newly acquired rope and chain product line, Koch. We were successful in winning a $10 million piece of new business at one of our top five accounts. We'll begin to ship and recognize volume from this win in the second half of the year and into 2025. This win's a great example of leveraging our deep relationships and in-store service capabilities to drive organic growth via M&A. For the quarter, Adjusted EBITDA increased 18% to $68.4 million, compared to $58 million during the second quarter of 2023. Our Adjusted EBITDA margins improved to 18%. Adjusted gross margins totaled 48.7%, marking a 570 basis point improvement over 43% during the year-ago quarter. For the fourth consecutive quarter, we generated healthy Adjusted EBITDA growth and adjusted gross margin improvements. We have managed this by improving efficiencies, managing margins, and selling a better mix of products. During the quarter, we generated $42.5 million of free cash flow, following a use of $6 million of cash last quarter. Our healthy free cash flow was driven by the cyclical nature of our business. We used cash to build inventory early in the year for our spring and summer busy season, which starts to turn to positive free cash flow in Q2 and continues for the remainder of the year. For our top-line results, Hardware and Protective Solutions, or HPS, led the way with a 3.5% increase in net sales. To break that down a bit, Hardware, or HS, grew by 2.7%, while Protective, or PS, sales grew by 7.7%. Driving the increase in HS were new business wins, the contributions from Koch, partially offset by the market and price. PS had a nice quarter, with new business wins and an active promotional off-shelf quarter, driving its growth more than wholly offsetting a soft market. Net sales for Robotics and Digital Solutions, or RDS, were down 8% versus the year-ago quarter. Adjusted gross margins and Adjusted EBITDA margins remained healthy at 70.6% and 31.8%, respectively. The trend of the past few quarters continues to impact RDS. Lighter foot traffic and discretionary spending, softness in existing home sales, and our machines being moved around inside stores at a top customer weighed on RDS results. We remain optimistic about our long-term, high growth, high-margin growth opportunities in RDS, including the new Minute Key 3.5 offering. Our RDS business is a very solid business, and we are the clear leader in market share in North America. We believe we'll see RDS back to positive growth in 2025, and there are two main reasons why we believe this. First, our new Minute Key 3.5 machine opens up the auto key, auto fob, and Endless Aisle on our self-serve machines for the first time ever. The weekly footsteps at our top three RDS retailers are staggering, near 180 million footsteps per week in the U.S. We now have over 400 machines in the field with this new technology, and we plan to have three times our current number in stores by year-end. Consumers love the ease of this new machine, our retailers love the new features and revenue growth opportunities, and in July, we successfully introduced the Endless Aisle on our self-service Minute Key 3.5 machines. The Endless Aisle is really a great name because it's truly endless. It allows the consumer to duplicate, duplicate virtually any key at the kiosk and have it shipped to your house. Let me give you a quick example of our Endless Aisle. If you live in Arizona and want to copy your house key, but you want it on a Cincinnati Bengals key blank, you now can order the key through our kiosk. The machine scans your key, the data goes to our plant in Tempe, Arizona, where the Bengals key is held in inventory. The Bengals key is then cut and promptly mailed to you, and after a few business days, you can show off your new Bengals key to your friends. The second are the opportunities that our RDS service team can capitalize on. Redbox's recent liquidation provides a new business opportunity for Hillman's RDS service team, with two new accounts already inked. The accounts add both top and bottom line results similar to our RDS mix today, but with no capital required. Additionally, we have strengthened our team with the successful hiring of experienced people from Redbox to help us scale and grow this opportunity further. It's good for these folks and great for Hillman to add experienced team members with kiosk background on day one. We have a great game plan in place with our top three RDS customers. The feedback on our recent kiosk enhancements has been strong, and the early incremental growth statistics are encouraging as well. For these reasons, we're confident that this high-margin business will be back to growth in 2025. Turning to Canada. Net sales in our Canadian business was down 10.1% compared to the prior year quarter. The market and the economy are softer than in the U.S., but our team's done a nice job with margins, mix, and operations during the quarter. We also had some new business wins during the quarter in Canada, which partially offset the market price and FX. While the macro environment isn't helping, we continue to win new business, strengthen our relationship with our customers, and reinforce our competitive moat, which JMA will touch on in a moment. We feel great about where we are with our customers right now and how Team Hillman is performing. We'll continue to execute well during this cycle. We've done an excellent job controlling what we can while managing our margin. That said, I know this team and our customers are ready to ramp when the market improves. It's fun to be on offense again. For the first half of the year, we generated $120.7 million of Adjusted EBITDA, which is a record for the first half of a Hillman year, of any Hillman year. I love how Hillman's performing and where we're headed, and I'm excited to turn it over to JMA. He will take the reins from me in January as the sixth CEO in the 60-year history of Hillman. JMA. Thank you, Doug. I joined Hillman five years ago, and I've gotten to see firsthand what makes this company so unique: Hillman's people, Hillman's commitment to taking care of its customers, and Hillman's moat. I look forward to building on these strengths and carrying on the Hillman legacy as Hillman's next CEO. First, I'll start with the moat. The Hillman moat makes us a strategic partner for our retail customers, as we're able to add value and solve problems in ways that our competition doesn't. We believe our moat is the main driver for our long history of consistent growth. The Hillman moat consists of three main pillars. First, we have our 1,100+ sales and service warriors that are out in the field each and every day. These men and women are in the stores of our customers, providing top-notch customer service at the shelves. This Hillman team in the stores has been adding value for our customers for close to 30 years. Second, our distribution centers, where we pick, pack, and ship product orders direct to the stores of our retail customers. Generally, our products do not flow through our customers' distribution network, which eases the logistical burden for our customers. This means that for Hillman products, our customers do not have to worry about the complexity required to get products to the shelves. And third, we typically have said this, as our third pillar is the brands that we own, but let me expand on that. As you know, Hillman's been around for 60 years, and we've been working with our top five customers for over 25 years on average. This long history has allowed us to create strong partnerships with our customers, from the associates in the store, to the store manager, to the merchants, to the leadership team. Hillman has unique, broad retail relationships and is connected at all levels. These long-standing relationships allow us to approach the business creatively and strategically with our customers, rather than short-sighted approach of meeting a near-term goal. Secondly, when you combine our service teams in the stores, SKU-level POS reporting, and our direct-to-store shipping, it puts us at the forefront of product trends, consumer insights, and research. Given that we're a market leader in many of our product categories, we can leverage this data to work with our customers and better manage the category. This enables us to become the partner of choice for our customers as we help them meet their goals while putting the best products on the shelves for the end user. Another thing I'd like to touch on is product innovation. We have talented product management and engineering teams, as well as state-of-the-art test labs in Toronto, Cincinnati, and Tempe, combining this group with customer insights that only Hillman has, allows us to put innovative, high-performing products on the shelves. Plus, about 90% of our revenue comes from brands that we own and control, which allows us to anticipate and meet the evolving needs of our retail customers and end users. To summarize the third pillar of our moat, it comes from our 60+ years of experience that consists of our customer relationships, category management, and Hillman-owned brands. Now we'll turn to M&A. Our moat is critical to how we take care of our customer and how we grow. Over the past 60 years, M&A has been a key part of how Hillman has grown into a $1.5 billion company. When we talk to potential M&A targets and they learn about Hillman, they quickly understand how their businesses can grow by leveraging the three pillars of our moat. At Hillman, our experienced M&A team believes that we can execute multiple acquisitions per year that are of a similar size to Koch, the acquisition we closed in January of this year. We remain very excited about Koch, and as I told you last quarter, we expect to increase Koch's net sales by at least 20% this year, driven by our first win as the new owners, with more to come. Like Doug said in his opening remarks, we are close to acquiring another company. The M&A pipeline is healthy, and we continue to see companies like Koch that would be a great addition to the Hillman family. Now I'll turn to operations. Our global operations team continues to do a fantastic job. The five folks on our operations team have averaged over 30 years of experience in the industry. Further, half of our supply chain leadership team have worked together for almost 20 years, and it shows with the performance of this team. They continue to execute our plan while controlling the controllables. Here's a few examples: The team is operating efficiently and effectively. Fill rates continue to be strong at 95% per year, which our customers love. Taking great care of our customers remains a top priority. I'm proud to say that our network of 23 distribution centers across North America is running well, as well as it has since I joined Hillman. We have the right products in stock. We are getting them out quickly to our customers, thanks to our long-term supplier partners around the globe. The efficiencies we're seeing in our DC network are driving our bottom-line growth, which is critical given the market. Turning to freight. Recently, there's been another jump in spot rates for inbound containers coming from Asia, given the turmoil in the Red Sea and Panama Canal. However, because our team locked in our contracted rates on May 1st, as we do every year, much of this volatility in spot rates will not impact us, as we ship over 90% of our containers on contract. And finally, our input costs. Many of our input costs, like steel from China and India and Taiwan, increased slightly during the second quarter of 2024 versus the 2023 average, but remained below their highs during 2021 and 2022. As I, as I said, we've got a great operations team in place, and we continue to execute efficiently while taking great care of our customer. Between our operations team, our moat, and our M&A opportunities, I believe the future is very bright for Hillman. With that, let me turn it over to Rocky to talk financials. Rocky? Thanks, JMA. Let's jump right in. Net sales for the second quarter of 2024 totaled $379.4 million, a decrease of 0.2% versus the prior year quarter. Second quarter adjusted gross margin increased by 570 basis points to 48.7% versus the prior year quarter of 43%. Sequentially, adjusted gross margins were up 110 basis points from 47.6% last quarter. Margins were exceptionally healthy during the quarter. We believe our adjusted gross margins will come down slightly in the second half of the year, but remain above 47%. Adjusted SG&A, as a percentage of sales, increased to 30.7% during the quarter from 27.9% from the year ago quarter, which was in line with our expectations. Driving SG&A was our standard employee bonus expense, which was the result of a strong bottom line during the first half of the year when compared to 2023. We expect our adjusted SG&A rate for the remainder of the year to be relatively consistent with Q2. Adjusted EBITDA in the second quarter was $68.4 million, which grew 18% versus the year ago quarter. Our Adjusted EBITDA to net sales ratio during the quarter was 18%, which compares favorably to 15.3% a year ago. Adjusted EBITDA was driven by a positive mix of price cost, product mix in HPS, and efficient operations, which drove healthy margins as low costs flowed through our income statement. Now let me turn to cash flow. For the 26 weeks ended June 29, 2024, operating activities generated $76.5 million of cash, as compared to $115 million in the year ago period. Remember, during 2023, we were able to reduce our net inventories by over $100 million throughout the year as we returned to normal inventory levels. Capital Expenditures totaled $40.1 million for the first half of the year. That's compared to $37 million in the prior year period. We continue to invest in high-margin RDS business and also have partnered with one of our top five customers to share in the cost of a four-year plan to reset the entire hardware set across the country. This includes all new racking and displays for Hillman products in their hardware department. Our team has already completed 140 resets, and the new aisle looks awesome. Free cash flow for the first half of 2024 totaled $36.4 million, compared to $78 million in the prior year period. For the quarter, free cash flow was $42.5 million, an increase from a use of $6 million in the first quarter. Now to the balance sheet. We ended the second quarter of 2024 with $705.3 million of total net debt outstanding. This is a $17 million improvement versus the end of 2023, and a $108 million improvement from the year ago quarter. Importantly, this included $22 million of debt that we paid off relating to the Koch acquisition that we completed in January of this year. As Doug mentioned earlier, our net debt to trailing twelve-month Adjusted EBITDA ratio at the end of the quarter was 2.9 times, compared to 3.3 times at the end of 2023, and 4 times just a year ago. Driving the improvement was the aforementioned improvement in net debt and a $40 million or 20% increase in our trailing twelve-month Adjusted EBITDA. Looking forward, we still maintain our expectation that we end 2024 around 2.7 times net leverage. As Doug mentioned earlier, we have a few changes to our full year 2024 guidance. We are reducing our full year net sales to be between $1.44 billion-$1.48 billion, with a midpoint of $1.46 billion. This midpoint assumes a 1% headwind from price, a 2% lift from new business wins, and a 3% lift from the Koch acquisition. These are not changed from our original guide. However, we are guiding for the market being down about 5% versus our original expectation of down 1%. We define the market as excluding new business wins. As you know, we do not control the market, and this is the driver of our updated net sales guidance. Altogether, our new net sales midpoint guide implies a 1% decrease versus 2023. Despite the top line pressure, we are increasing our full year 2024 Adjusted EBITDA guidance to be between $240 million-$250 million, with a midpoint of $245 million. This midpoint represents an increase of about 12% versus 2023. We expect the operational efficiencies, margin management, and mix improvements that Doug and JMA mentioned to continue throughout the year, which will deliver strong margins and a strong bottom line. Lastly, we are maintaining our full-year 2024 free cash flow of $100 million-$120 million, with a midpoint of $110 million. Our increased expectations for Adjusted EBITDA offset our revised top-line expectations, resulting in the reiteration of the guide. More information on the assumptions that have driven our guidance is available in our earnings call presentation. Over the last few quarters, we have been saying that even in a down market, our 2024 Adjusted EBITDA will increase. As Doug mentioned, this happened in 2009, when our top line was down 5% and our bottom line was up 10%. So far this year, this seems to be playing out as we have benefited from lower COGS inefficiencies, and we control the controllables. Looking further out to a healthier macro environment, we believe our long-term growth algorithm remains intact. Historically, our business has seen organic growth of 6% per year and high single to low double-digit organic Adjusted EBITDA growth before M&A. And now that the M&A switch is turned on, we think long-term top-line growth of high single to low teens is realistic, and Adjusted EBITDA growth in the low to mid-teens is achievable in a healthy macro environment. With that, I'll turn it back to Doug. Thanks, Rocky. Before we get to the Q&A session, I want to give some color on the succession planning we announced in a press release just before our earnings this morning. Effective January 2025, JMA will step into the CEO role, becoming the sixth CEO in Hillman's 60-year history. When we hired JMA 5 years ago, it was our expectations that he would step into the CEO role in due course, considering his work ethic, strong leadership background, and industry experience. Having worked closely with him, almost daily, JMA, since then, I can confidently say that he will do a great job keeping Hillman's strong legacy of service and customer first alive. With the support of the board of directors, the entire executive leadership team, this transition has been in the works for the past few years. It was important to me, Rocky, and JMA that we went about this succession plan carefully and in the right way, maintaining leadership continuity, minimizing disruption, and keeping Hillman's long-term goals intact. With JMA's promotion, I will step into the executive chairman role, where I will continue to be active with Hillman, but have more time for golf and grandchildren. I will continue to be involved in M&A, maintaining relationships with the investors and key customers, and presiding over board meetings. I've been with Hillman for 10 years, and I love this company. I will continue to help Hillman any way that I can. JMA will take over with a great team around him, with the business in good shape and positioned to grow into a 2 billion dollar company over the next few years. As always, our people are the ones that truly make Hillman the great company it is. I want to thank the Hillman Warriors for working together to take great care of our customers and for their loyalty. Looking forward, we will continue to widen and deepen our competitive moat, focus on executing our growth strategy profitably, while we maintain discipline across all of our business segments. We firmly believe that this approach will ensure Hillman's success in the years to come, and we're very excited about what is on the horizon... This concludes our prepared remarks, and we'll begin the Q&A portion of the call. Gigi, can you open the call up for questions? Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please limit yourself to one question with one follow-up and hop back in the queue. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matthew Bouley from Barclays. Hey, Matt. Matt, we're having trouble. We're not hearing you. Matthew Bouley from Barclays? Can you hear me now? Yes. Hey there. This is Ling Wang. Hi, good morning. This is Ling Wang. On M&A, you spoke to a lot of new, one, especially new prospect, big markets or areas you're looking to expand into particularly, or any more color on that? Yeah, obviously, we can't talk about the one we think will close by the end of the third quarter. We're excited about it. It's very much like Koch. But I think the best way to think about it is just go to either end of Hillman's aisle today and walk about 20 feet, and you're gonna find where we're going next. And again, if you just think about it, it would come on the same truck, potentially, obviously, serviced by the same folks with the same customers. And our relationships with those customers go way back. So it's just a fun thing to have these conversations because it's not really a competition when we get into a process, because when the management team from the company sees what we could do together and how we roll, it's pretty easy to convince them to join us, and we're really excited about the potential. But obviously, you've got categories like we did, rope and chain, you know, you have, as we've talked, plumbing, electrical, all kinds of things that are just around the corner that would make sense. Again, when we talk about that, think about lots of SKUs, tons of complexity, fairly low cost, but they require the Hillman moat to really supercharge. Got it. Thank you. Sure. You kind of mentioned a little bit of softness on the foot traffic or discretionary front. So what exactly is your visibility on, you know, home center, foot traffic, and R&R in general? What kind of trends have you seen thus far into July and August? Thank you. Yeah, I'll take that one. So, good morning. From foot traffic perspective, we use some of the same technology and research and insights that some of the big retailers use. We use, Placer.ai to get a feel on foot traffic. We monitor, you know, I'll say, footsteps in the store. Foot traffic has been challenging. It's, it's slightly less negative recently, but overall, we see those same concerns, you know, facing us and our retail partners. But we feel good about where the business is positioned, and we're going to use this time to focus on, you know, growing new categories and taking new business. Got it. Thank you. Sure. Thank you. One moment for our next question. Our next question comes from the line of Ryan Merkel from William Blair. Hey, everyone. Congrats, Doug and JMA. Thank you. Thanks, Ryan. Doug, you mentioned that the market feels like 2009, and, you know, you lowered the market outlook now to down five. So what is surprising you this year, and is the solution lower rates, or is there anything else that you're looking at? You know, I think it's what's really surprised me this year, Ryan, was, everybody kinda got it in January and February, and then March was kind of like: Whoa, you know, put your seatbelt on. Here we go. And then it just, you know, kind of a dead cat bounce at that point. It was just a. That's probably the surprising thing. I think the retailers really felt like April, May, here we go, and it just kind of stayed the same. You know, from our standpoint, to break it down, the professional, the pickup truck pros hanging tough, smaller projects, but still busy, and the DIYer is the one that's really fallen off, I think, from a activity standpoint. That has to be, if you just think about the logic, existing home sales impacted for sure, and we're seeing that in pet tags and in keys. But, you know, our retailers feel kind of good about where we go from here, and as we've been saying, we're gonna keep our heads down and perform either way, but it will be nice to see some tailwind. My guess right now is we're not gonna see that until we get into the fall. Yeah, I agree. Okay, and then how about the outlook for RDS? You know, I know things are a bit challenged, but what are you assuming for the second half? And I think you said you're gonna return to growth in 2025. Just unpack why, why you think that's the case. Yeah, I mean, I'll tell you this: the great news is we don't have hope as our strategy anymore. It—we are absolutely in the slot on RDS, because RDS's new machine on Minute Key with the capabilities is exactly what the retailers want. And the great thing for retailers is we don't change any space. They don't have to do anything, and we're going to bring them revenue and happy customers. And so that's one. Two, that movement at that big customer that we had seen, that was really impacting us, has worked itself and is working itself through. We feel good about what we've been able to do together with them, 'cause it hurt their sales as well. And then three, you know, when you, when you really think about the service organization, you know, Redbox liquidation was huge because we're picking up new accounts with no capital, which is Rocky's favorite. But my concern, Ryan, and we talked a little about this last time, is can we get the people? And we've just been able to hire Redbox folks really quick, and they've been hitting the ground running. So that's why, you know, we feel very good about where RDS is heading. And again, you know, we struggled for a bit there, but I feel great about 2025 and what I think that business can do. That's great color. Thank you, and passing on. Yep. Thank you. Our next question comes from the line of Brian Butler from Stifel. Hey, good morning. Thanks for taking the question. Hey, Brian. Morning. Just a, I guess, follow-up on that RDS. I think your original goal was 800 machines by 2024, and it sounded like you were gonna be much higher than that if you're at 400, and you thought it was gonna triple. So maybe a little detail on expectations on what that goes to on 2024, the total rollout, and where that ends up in 2025, as well as, is there any initial color on how the higher priced kind of auto keys and other items that you can kind of push through the 3.5 are going with the 400 machines that are out there? Brian, good morning, it's JMA here. Yeah, let me hit the machines first. So we're really encouraged and excited. Our Tempe team, that's manufacturing machines, has been able to continue to ramp and get machines out. So we are taking up to your point. We thought we'd be 800 by year-end, we'll now be closer to 1,200. We feel good about the machine. The team has made some nice continued improvements to the GUI. We just rolled out Endless Aisle, so we're gonna keep moving that forward with our, you know, 3.5 customers that are out there. So we feel excited, we're excited about it. We're seeing some nice, I'll say, improvements in the technology, and a couple of things. One, you know, and you mentioned the auto keys. We are starting to see some traction. That will be limited, or I'll say, be throttled by our ability to put key techs and service those markets, which we're gonna be doing in 25, and beyond. But I would say the other piece of it is the Endless Aisle we just turned on. It's interesting, we're starting to get some traction, but it's also been the fact that our keys being even home and office, is performing better in the new machine than the old, and we're really excited about that. So those three things are really helping us feel very excited and bullish, and we're putting a little more capital to work this year, 'cause the customers want them, and the end users want the machines. Yeah. Hey, Brian, it's Rocky. The only thing I would add to what JMA said is, remember, many of these that we're doing this year are conversions from 3.0 to 3.5. It's not a full machine build, and so that's much less expensive. And obviously, we can throttle that a lot quicker than, than you could throttle the build of a new machine. Well, and, and we played offense there, Ryan, because, or Brian, because Rocky, Rocky ordered all of the retrofits, and said, "Hey, for, for the money for the retrofit, let's not make that be the governor," and, and we're glad that we did. The, the plant went ahead and ordered them all. So we don't have this issue of can we, can we carry? It's a matter of when our people can, our customers are saying go, and that's always a good sign. I do think the fun news about what's happening right now is we have them in stores that have the 3.0 in the same zip code right now. And again, as JMA said, the GUI screen's much improved. The consumer time at the screen has improved. And while we're not yet rolling, you know, the smart fob because of the key tech, we wanna make sure we've, as we've always said, we're gonna go slow there. The transponder is a pretty interesting. Consumer gets a $38-$74 key. We ship it to their house, they're happy, we're happy, and the retailer's like, "Wow, I didn't have to do anything." So it's a win-win. Okay, great. And then on the follow-up, just going back to the kind of the price cost spread. I mean, in a normal environment, I completely understand how that kind of, you know, the margins bounce back, and you get to a more normalized kind of growth on revenue and EBITDA. But if we remain in a weak, kind of a weaker environment, how should we think about price cost, you know, rolling into 2025, if the macro is not a tailwind? Look, we-- I, I think we feel really good, it's Rocky again, about our margins, and, and here's the reason. One, I think we've reset the baseline around what, what this business should do. You know, historically, 44-45. I think, you know, we're, we're gonna live above 46 for the foreseeable future, just because structurally in the business. The other thing that'll make sense to you, Brian, is, you think about our RDS business has really been more challenged than, than the rest of the business, and it commands a much higher gross and EBITDA rate. And so as we see that business, you know, not only getting back to kind of parity, but also growing again, that's gonna help support the margins as we think about the future. And so we feel really good, again, about where we are. We said on the call, we think we stay above 47 for the remainder of the year, and I, I truly believe we stay in the ballpark for the foreseeable future, in that kind of range. All right, great. Thanks for taking the questions. Sure. Thank you. Our next question comes from the line of Lee Jagoda from CJS. Hi, good morning. Hey, Lee. Good morning, Lee. Good morning, Lee. I guess I'll save my congrats for Doug till he's almost out the door. Dude, I never thought JMA was gonna help my golf game so much. Well, you know, stay out of the woods if you can. Just starting with the Koch new business wins, can you give us a sense for what type of customer that was with? And if it wasn't one of the sort of the big two, is that an opportunity, and how large an opportunity could that be for Koch and for you? Yeah. So it does sound like Coke, but it's Koch. But we'll be selling three of our top five accounts in that category, Lee, I believe, in the, you know, in the 12-month period coming up. So it'll be three of the top five, and it could be more, but I'm confident three of the top five will see growth. Is the $10 million one of those three, or is that all of those three? Just one. Just one, yeah. Okay. And, and I guess at that one customer, what, what share are you getting? Like, what does that represent in terms of the share you're getting? Yeah, I think, you know, we don't give the share, but the funny part of that one, though, to me, I mean, the day we announced it was the week that the line review was coming due. And when they saw the announcement, they held the line review up. And I don't think I can say anything other than that that says when Hillman comes into a category, it makes it easier for customers to make a change because... And in this case, this is such a complicated category, you do not wanna make a change if you don't have the service organization that's gonna clean up the store and make sure you can reset stores. The reset ability, Lee, of our troops in this example, was the whole thing. Can we reset those shelves with a new set, with new thinking? Yes. And without that, nobody's gonna-- JMA is just not gonna take that risk. No way. I agree. It's powerful. Thank you. One moment for our next question. Our next question comes from the line of Brian McNamara from Canaccord Genuity. Hey, good morning, guys. Thanks for taking our questions. Congrats to JMA on the promotion, and Doug, for some more time, for golf and the grandkids. Thanks. Thanks. Thanks. I guess, first off, apart from different leadership styles, obviously, does anything fundamentally change within the company with this handoff? If anything, JMA, how will your approach be different? Well, I mean, the guy with the best seat for that is Rocky. Why don't you comment on that? Yeah, it's a good question, but what I would tell you is, we've been running this business together for the last four or five years, and so, you know, while there'll be a different person in the chair, and Doug will be doing a little more cheerleading than doing day-to-day, it - we don't see anything changing strategically. We don't see anything changing, you know, in how we run this business day-to-day. The other thing I would say is, we were very thoughtful in how we structured the organization below JMA coming into this year, when we made some changes so that we're ready for the next run. And we're all highly confident, you know, not only in JMA and Doug as Executive Chairman, but also the team that we've put in place below JMA. Got it. That's helpful. And then secondly, I guess on M&A, with a transaction, I guess, expected to close by the end of Q3, are there others in the pipeline that you're considering that are, you know, that we can expect over the next several months? And, Rocky, how should this transaction and maybe the other ones contemplated in the pipeline, impact your your leverage ratio targets? Yeah, let me start with the leverage. I mean, you know, they're gonna look a lot like Koch, and so I think Koch, you know, moved leverage up, like, 0.2% or something like that, and so that's what you would expect. But these businesses are all gonna come also with EBITDA, and as Doug said, natural synergies. And so, you know, on a pro forma basis, I think they're gonna be close to leverage neutral. And quickly, if we do put any leverage on, even if it's as small amounts, we intend to pay it down, like Koch, right? You saw we borrowed money to buy Koch early in the year, and we've already paid that debt off. You know, I think we still, you know, would plan to be around 2.7 times at the end of the year, even if we do this acquisition. Could it mean we go to 2.8? Sure. But, but it isn't something that's gonna, you know, put, put any amount of leverage of any significance on the business. And, and to your question about pipeline, yeah, I mean, again, there are a lot of opportunities when you think about what we do, what could be put on the truck, what could be serviced at the shelf, that are out there. And again, it's very interesting, you know, that it seems like in this sweet spot of, you know, call it $4 million-$8 million of EBITDA, there seems to be a lot of businesses with a lot of entrepreneurs, who seemingly are, you know, at kind of the end of the road and wanna think about family estate planning. And so I think we're gonna be very successful in doing two or three of these a year. Yeah, and I think, Brian, the thing Rocky just said, that pipeline looks good, and this is—that's before private equity starts selling the stuff, right? Because they haven't been active on either side, which is an advantage to us, but there'll be quite a few things coming as well. But no, it's really solid right now, and we're in a nice position to take advantage of. And again, it doesn't take long for them to see why maybe Hillman would be the choice. ... And And if I could just squeeze in one last one on your guidance adjustment. Obviously, it's all market related. A minus one to a minus five feels like a huge delta, but it—I don't wanna put words in your mouth. It It doesn't feel like a, just from talking to you guys over the last, you know, six months, it doesn't feel like a huge surprise to you. Is that fair? And, like, what's kind of changed compared to 90 days ago? Yeah, I know. You know, if you go back 90 days ago, I guess what I would say is, you know, we looked at our major customers and what they had said about the back half, and you all heard us say, we hoped they were right, and we were gonna be more cautious than they were. It just has remained soft as I think JMA commented on a minute ago, and we're projecting that the market remains soft the rest of the year. Again, I'm hopeful that we do get some tailwind and, you know, maybe the Fed does a couple rate cuts, and that gives us some relief on housing. If that happens, that's obviously gonna be upside to what we've guided to, but at this point, there's... We just don't see any benefit in guiding to anything but what we're seeing now in the markets. Great. Thanks a lot, guys. Appreciate it. Thanks, Brian. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Lee Jagoda from CJS. Lee, you got pancaked. I'm glad you're back. I'm back. I'm back. So can you just speak to where we are in the, in, like, the evolution of the large customer that's repositioning your RDS machines? And how many quarters of headwind do we have left before it turns into a neutral and potentially a positive? Yeah, I would say that, based on where we are right now, it's probably neutral for one quarter, and then I think we start to see it, tick up. Okay. And then on the new 3.5 machines, given that a lot of the stuff in there has higher ASPs, how should we think about incremental margins on the newer stuff versus sort of the 40%-60% incremental margins that we've been kind of used to on the self-service key business? They're, they're gonna be really close to the same, Lee. We said everything that we've done in this business, we've set up to be at or above existing fleet when you think about EBITDA rate. So, you know, different products are gonna have a little bit different gross margin profile, but everything is set up to be at the same, the same EBITDA rate. And again, as you think about, as Doug said, some of the service offerings that the team is now, you know, working on or entered into, you know, those have basically no COGS, and they basically have no capital. So it's really, you know, it's a service-related opportunity that, again, is gonna generate really, really nice EBITDA rate for the business. Yeah, Lee, one thing just to be clear, the service would be, for example, the Redbox type. The one thing we're not planning on is when we start to see smart fobs being programmed, and we are doing it, but when we if that starts to ramp, we will make sure that the experience for the consumer is there, but we will not make-- we're not attempting to make great margins on that side of the service. We're planning on taking care of the customer and not losing any money, make margins on the actual sale. That's the only thing... When we talk about it, Lee, that's the only thing, the math that I just don't see it as, if we do it right, we will make a little money on that side of it. But we're not looking to make the margins on that piece of the service. That's the only piece. Got it. Understood. And then one last one for me, just on the Canadian business. Obviously, you highlighted the market being weak there and some FX headwinds. Was there any other, you know, timing issues on a year-over-year basis? And as we look out to Q3 sequentially versus Q2, how should we think about, you know, revenue trends and margin trends there? Yeah, I would say there's nothing unusual there, Lee. I mean, the Canadian market is just softer than the U.S. You know, there's a lot more I would say European-type mortgages, and there's a lot more debt on the typical consumer in Canada than there is in the U.S. And so they've taken this you know kind of a downdraft worse than here. And so I... You know, we like our Canadian business. We think it's gonna continue to maintain you know kind of the 10% EBITDA rate that we've challenged them to have or more to that, but it's gonna be tough sledding for the rest of the year in Canada. Got it. Thanks very much. Yep. Thanks. Thanks, Lee. Thank you. This concludes the Q&A portion of today's call. I would like to turn the call back over to Mr. Cahill for some closing comments. Thank you, Gigi. Thanks again, everyone, for joining us this morning. We look forward to updating you on our progress this fall. Thanks, everybody. You may now disconnect.