Hillman Solutions Corp. (HLMN) Cash Flow Statement

The 2026Q1 quarter shows the reverse pattern, with net income of negative $4.7M alongside operating cash flow of negative $19.5M, suggesting cash and accrual results moved together in a weak period. The ratio swings between roughly 1x and above 19x across the ten quarters, which indicates the net income line is too small and volatile to serve as a stable anchor. Investors should monitor whether operating cash flow converges toward earnings over a full year before treating the high conversion figures as durable.

The recent 2026Q3 free cash flow of $51.1M, an 11.2% margin, follows a $70.2M quarter, but the prior two periods of 2025Q1 and 2026Q1 both produced negative free cash flow. Such volatility suggests that reported free cash flow reflects timing of collections and inventory more than a steady earnings engine. Analysts should treat the trajectory as improving on a trailing basis while recognizing that the underlying run rate remains difficult to establish.

Capex of $18.8M in 2026Q3 is modest relative to depreciation and amortization of $38.0M, implying that reported D&A is running well above cash reinvestment. This gap may indicate that the depreciation base reflects prior acquisition and robotics investments rather than current maintenance requirements. The lower capex intensity supports near-term free cash flow, but investors should assess whether underinvestment could pressure the robotics fleet over time.

The magnitude of these swings relative to net income suggests that working capital management, rather than operating profitability, is the dominant driver of reported cash generation. Large inventory builds ahead of seasonal demand may explain the first-quarter outflows, though the data alone does not confirm this. Investors should monitor whether the 2026 release of working capital is sustained or reverses in subsequent periods.