0000046250FALSE00000462502024-10-302024-10-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 30, 2024
  
Hawkins, Inc.
(Exact name of registrant as specified in its charter)
 
Minnesota 0-7647 41-0771293
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
2381 Rosegate,Roseville,Minnesota55113
(Address of Principal Executive Offices)(Zip Code)

Registrant’s Telephone Number, Including Area Code (612) 331-6910
  
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 (see General Instruction A.2. below):
¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 $.01 per share
HWKN
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 (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b 2).

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. ¨



Item 2.02. Results of Operations and Financial Condition.
On October 30, 2024, Hawkins, Inc. issued a press release announcing financial results for its fiscal 2025 second quarter ended September 29, 2024. A copy of the press release issued by the Registrant is furnished herewith as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No.  Description  Method of Filing
  
Press Release, dated October 30, 2024, announcing financial results of Hawkins, Inc. for its fiscal 2025 second quarter ended September 29, 2024.
  Filed Electronically
104 Cover Page Interactive Data File (embedded within the inline XBRL document)Filed Electronically



SIGNATURES
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.
 
 HAWKINS, INC.
Date: October 30, 2024
 By: /s/ Jeffrey P. Oldenkamp
  Jeffrey P. Oldenkamp
  Executive Vice President and Chief Financial Officer



Exhibit 99.1
Hawkins, Inc. Reports
Second Quarter Fiscal 2025 Results

Roseville, Minn., October 30, 2024 – Hawkins, Inc. (Nasdaq: HWKN) today announced results for the six months ended September 29, 2024, its second quarter of fiscal 2025.

Second Quarter Fiscal Year 2025 Highlights:

•Record second quarter results for revenue, gross profit, operating income, net income, diluted earnings per share (“EPS”) and adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”), a non-GAAP measure.
•Overall revenue growth of 4%, once again driven by the Water Treatment segment growth of 23% over the same period of the prior year.
•Gross profit increase of 12% over the same period of the prior year, with Water Treatment segment gross profit growth of 22%.
•Second quarter operating income of $33.7 million, our 26th consecutive quarter of year-over-year operating income increase.
•Diluted EPS of $1.16, an increase of $0.06, or 5%, compared to the same period of the prior year.
•Adjusted EBITDA, a non-GAAP measure, of $46.3 million, a 12% increase over the same period of the prior year. Trailing 12-month adjusted EBITDA exceeded $157 million.

Executive Commentary – Patrick H. Hawkins, Chief Executive Officer and President:

“Our record performance in the second quarter was once again driven by our Water Treatment business, as we continued to gain efficiencies within our recent acquisitions and made progress towards future acquisition targets. Within the quarter we saw strong revenue growth of 23% in our Water Treatment business driven by our recent acquisitions, with organic volume flat due to unfavorable weather conditions in several regions. Revenue in our Industrial segment declined year over year due primarily to reduced selling prices driven by lower commodity costs, with volumes up slightly. Health and Nutrition revenues declined due to lower sales of our manufactured products and overall softness in the market. Overall, we saw 4% revenue growth with gross profit increasing 12%, overcoming the $3.2 million LIFO benefit we saw in the second quarter of fiscal 2024.”

Mr. Hawkins, continued, “Our balance sheet continues to be strong, as we paid down $30 million of debt within the quarter, resulting in our leverage ratio being 0.65x trailing 12-month proforma adjusted EBITDA at the end of the quarter. Looking to the third quarter, we expect continued growth within our Water Treatment segment and for our Health and Nutrition segment to resume growth. We expect to see our Industrial segment continue to perform similar to the first half of fiscal 2025.”

Second Quarter Financial Highlights:

NET INCOME
For the second quarter of fiscal 2025, the Company reported net income of $24.1 million, or $1.16 per diluted share, compared to net income for the second quarter of fiscal 2024 of $23.2 million, or $1.10 per diluted share.
REVENUE
Sales were $247.0 million for the second quarter of fiscal 2025, an increase of $10.5 million, or 4%, from sales of $236.5 million in the same period a year ago. Increased sales in our Water Treatment segment more than offset sales softness in our Industrial and Health and Nutrition segments. Water Treatment segment sales increased $23.6 million, or 23%, to $124.5 million for the current quarter, from $100.9 million in the same period a year ago. Water Treatment sales increased as a result of added sales from our acquired businesses. Industrial segment sales decreased $8.6 million, or 9%, to $89.9 million for the current quarter, from $98.5 million in the same period a year ago. Although overall volumes increased slightly year over year, sales decreased as a result of lower selling prices on certain products, driven by lower raw material costs and competitive pricing actions. Health and Nutrition segment sales decreased $4.5 million, or 12%, to $32.6 million for the current quarter, from $37.1 million in the same period a year ago. Health and Nutrition sales decreased due to lower sales of our manufactured products driven by reduced volumes and selling prices due to decreased demand for certain of our products.


GROSS PROFIT
Gross profit increased $6.3 million, or 12%, to $60.2 million, or 24% of sales, for the current quarter, from $53.9 million, or 23% of sales, in the same period a year ago. During the current quarter, the LIFO reserve was unchanged, having no impact on gross profit. In the same quarter a year ago, the LIFO reserve decreased, and gross profit increased, by $3.2 million. Gross profit for the Water Treatment segment increased $6.3 million, or 22%, to $35.6 million, or 29% of sales, for the current quarter, from $29.3 million, or 29% of sales, in the same period a year ago. Water Treatment segment gross profit increased as a result of increased sales from our acquired businesses. Gross profit for the Industrial segment increased $0.5 million, or 3%, to $18.3 million, or 20% of sales, for the current quarter, from $17.8 million, or 18% of sales, in the same period a year ago. Industrial segment gross profit increased as a result of increased volumes of certain products and product mix changes. Gross profit for our Health and Nutrition segment decreased $0.3 million, or 4%, to $6.4 million, or 20% of sales, for the current quarter, from $6.7 million, or 18% of sales, in the same period a year ago. Health and Nutrition segment gross profit decreased as a result of the decrease in sales.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased $5.6 million, or 27%, to $26.5 million, or 11% of sales, for the current quarter, from $20.9 million, or 9% of sales, in the same period a year ago. Expenses increased primarily due to $3.8 million in added costs from the acquired businesses in our Water Treatment segment, including amortization of intangibles of $1.5 million. In addition, a year-over-year increase of $1.0 million in compensation expense related to our non-qualified deferred compensation plan increased SG&A expenses, with the offset in other income.
ADJUSTED EBITDA
Adjusted EBITDA, a non-GAAP financial measure, is an important performance indicator and a key compliance measure under the terms of our credit agreement. An explanation of the computation of adjusted EBITDA is presented below. Adjusted EBITDA for the three months ended September 29, 2024 was $46.3 million, an increase of $4.8 million, or 12%, from $41.5 million in the same period a year ago.
INCOME TAXES
Our effective income tax rate was 27% for both the current quarter and for the same period a year ago. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is currently expected to be approximately 26-27%.
BALANCE SHEET
At the end of the second quarter, our working capital was $18 million higher than the end of fiscal 2024 due primarily to increased inventory and lower liabilities due to the payment of certain year-end accruals in the first quarter. During the quarter, we paid down $30 million on our line of credit. Year-to-date net borrowings of $5.0 million and $59.2 million of operating cash flow was used to fund $25.4 million of acquisition spending for the acquisitions of Intercoastal Trading, Inc. and Wofford Water Service, Inc., capital spending of $21.3 million, stock repurchases of $9.1 million and dividend payments of $7.1 million. Our total debt outstanding at the end of the second quarter was $104.0 million and our leverage ratio was 0.65x our trailing 12-month proforma adjusted EBITDA, as compared to 0.66x of trailing twelve-month adjusted EBITDA at the end of fiscal 2024.

About Hawkins, Inc.

Hawkins, Inc. was founded in 1938 and is a leading specialty chemical and ingredients company that formulates, distributes, blends, and manufactures products for its Industrial, Water Treatment, and Health & Nutrition customers. Headquartered in Roseville, Minnesota, the Company has 61 facilities in 28 states and creates value for its customers through superb customer service and support, quality products and personalized applications. Hawkins, Inc. generated $919 million of revenue in fiscal 2024 and has approximately 1,000 employees. For more information, including registering to receive email alerts, please visit www.hawkinsinc.com/investors.




Reconciliation of Non-GAAP Financial Measures
We report our consolidated financial results in accordance with U.S. generally accepted accounting principles (GAAP). To assist investors in understanding our financial performance between periods, we have provided certain financial measures not computed according to GAAP, including adjusted EBITDA. This non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies.
Management uses this non-GAAP financial measure internally to understand, manage and evaluate our business and to make operating decisions. Management believes that this non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provides a more complete understanding of the factors and trends affecting our financial condition and results of operations.
We define adjusted EBITDA as GAAP net income adjusted for the impact of the following: net interest expense resulting from our net borrowing position; income tax expense; non-cash expenses including amortization of intangibles, depreciation and charges for the employee stock purchase plan and restricted stock grants; and non-recurring items of income or expense, if applicable.

Adjusted EBITDAThree Months EndedSix months endedTrailing 12-months ended
(In thousands)September 29, 2024October 1, 2023September 29, 2024October 1, 2023September 29, 2024
Net Income (GAAP)$24,118 $23,216 $52,997 $46,646 $81,714 
Interest expense, net1,427 717 2,690 1,865 5,107 
Income tax expense8,873 8,769 18,681 17,015 27,447 
Amortization of intangibles3,196 1,724 5,998 3,394 11,143 
Depreciation expense6,731 5,675 13,258 11,112 25,410 
Non-cash compensation expense1,832 1,260 3,299 2,219 5,960 
Non-recurring acquisition expenses 94 122 282 122 1,077 
Adjusted EBITDA$46,271 $41,483 $97,205 $82,373 $157,858 




 
HAWKINS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except share and per-share data)
Three Months EndedSix Months Ended
September 29, 2024October 01, 2023September 29, 2024October 01, 2023
Sales$247,029 $236,526 $502,908 $487,646 
Cost of sales(186,807)(182,640)(378,031)(381,769)
Gross profit60,222 53,886 124,877 105,877 
Selling, general and administrative expenses(26,477)(20,895)(51,341)(40,399)
Operating income33,745 32,991 73,536 65,478 
Interest expense, net(1,427)(717)(2,690)(1,865)
Other income (expense)673 (289)832 48 
Income before income taxes32,991 31,985 71,678 63,661 
Income tax expense(8,873)(8,769)(18,681)(17,015)
Net income$24,118 $23,216 $52,997 $46,646 
Weighted average number of shares outstanding - basic20,757,397 20,903,690 20,786,938 20,905,707 
Weighted average number of shares outstanding - diluted20,860,418 21,026,428 20,898,641 21,034,153 
Basic earnings per share$1.16 $1.11 $2.55 $2.23 
Diluted earnings per share$1.16 $1.10 $2.54 $2.22 
Cash dividends declared per common share$0.18 $0.16 $0.34 $0.31 
 





HAWKINS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
September 29,
2024		March 31,
2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$7,526 $7,153 
Trade accounts receivables, net115,221 114,477 
Inventories81,565 74,600 
Prepaid expenses and other current assets5,563 6,596 
Total current assets209,875 202,826 
PROPERTY, PLANT, AND EQUIPMENT:402,104 386,648 
Less accumulated depreciation184,642 177,774 
Net property, plant, and equipment217,462 208,874 
OTHER ASSETS:
Right-of-use assets12,047 11,713 
Goodwill111,566 103,399 
Intangible assets, net of accumulated amortization123,886 116,626 
Deferred compensation plan asset11,698 9,584 
Other3,163 4,912 
Total other assets262,360 246,234 
Total assets$689,697 $657,934 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable — trade$50,956 $56,387 
Accrued payroll and employee benefits12,701 19,532 
Income tax payable2,284 1,943 
Current portion of long-term debt9,913 9,913 
Environmental remediation7,700 7,700 
Other current liabilities8,787 7,832 
Total current liabilities92,341 103,307 
LONG-TERM DEBT, LESS CURRENT PORTION93,862 88,818 
LONG-TERM LEASE LIABILITY9,687 9,530 
PENSION WITHDRAWAL LIABILITY3,348 3,538 
DEFERRED INCOME TAXES21,875 22,406 
DEFERRED COMPENSATION LIABILITY13,057 11,764 
EARNOUT LIABILITY11,919 11,235 
OTHER LONG-TERM LIABILITIES236 1,310 
Total liabilities246,325 251,908 
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock; authorized: 60,000,000 shares of $0.01 par value; 20,766,764 and 20,790,261 shares issued and outstanding as of September 29, 2024 and March 31, 2024, respectively
208 208 
Additional paid-in capital31,060 38,154 
Retained earnings410,425 364,549 
Accumulated other comprehensive income1,679 3,115 
Total shareholders’ equity443,372 406,026 
Total liabilities and shareholders’ equity$689,697 $657,934 



HAWKINS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
 
 Six Months Ended
 September 29,
2024		October 1,
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$52,997 $46,646 
Reconciliation to cash flows:
Depreciation and amortization19,256 14,506 
Change in fair value of earnout liability684 — 
Operating leases1,607 1,115 
Gain on deferred compensation assets(833)(48)
Stock compensation expense3,299 2,219 
Other(32)(34)
Changes in operating accounts providing (using) cash:
Trade receivables616 4,909 
Inventories(6,403)20,752 
Accounts payable(4,218)6,421 
Accrued liabilities(7,285)(7,149)
Lease liabilities(1,624)(1,127)
Income taxes341 990 
Other811 3,430 
Net cash provided by operating activities59,216 92,630 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment(21,286)(16,922)
Acquisitions(25,400)(3,355)
Other 357 335 
Net cash used in investing activities(46,329)(19,942)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends declared and paid(7,121)(6,535)
New shares issued1,297 1,147 
Payroll taxes paid in exchange for shares withheld(2,541)(2,140)
Shares repurchased(9,149)(9,752)
Payments on revolving loan(40,000)(52,000)
Proceeds from revolving loan borrowings45,000 — 
Net cash used in financing activities(12,514)(69,280)
NET INCREASE IN CASH AND CASH EQUIVALENTS373 3,408 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD7,153 7,566 
CASH AND CASH EQUIVALENTS, END OF PERIOD$7,526 $10,974 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for income taxes$18,340 $16,025 
Cash paid for interest$2,923 $2,002 
Noncash investing activities - capital expenditures in accounts payable$1,094 $2,970 



HAWKINS, INC.
REPORTABLE SEGMENTS (UNAUDITED)
(In thousands)

Water
Treatment		IndustrialHealth and NutritionTotal
Three months ended September 29, 2024:
Sales$124,528 $89,936 $32,565 $247,029 
Gross profit35,590 18,268 6,364 60,222 
Selling, general, and administrative expenses15,512 6,952 4,013 26,477 
Operating income20,078 11,316 2,351 33,745 
Three months ended October 1, 2023:
Sales$100,925 $98,535 $37,066 $236,526 
Gross profit29,308 17,844 6,734 53,886 
Selling, general, and administrative expenses10,145 6,806 3,944 20,895 
Operating income 19,163 11,038 2,790 32,991 
Six months ended September 29, 2024:
Sales$241,704 $193,138 $68,066 $502,908 
Gross profit70,545 40,144 14,188 124,877 
Selling, general and administrative expenses29,678 13,591 8,072 51,341 
Operating income40,867 26,553 6,116 73,536 
Six months ended October 1, 2023:
Sales$194,576 $219,408 $73,662 $487,646 
Gross profit55,716 37,150 13,011 105,877 
Selling, general and administrative expenses19,271 13,381 7,747 40,399 
Operating income 36,445 23,769 5,264 65,478 


Forward-Looking Statements. Various remarks in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include those relating to consumer demand for products containing our ingredients and the impacts of those demands, expectations for results in our business segments and the timing of our filings with the Securities and Exchange Commission. These statements are not historical facts, but rather are based on our current expectations, estimates and projections, and our beliefs and assumptions. Forward-looking statements may be identified by terms, including “anticipate,” “believe,” “can,” “could,” “expect,” “intend,” “may,” “predict,” “should,” or “will” or the negative of these terms or other comparable terms. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Actual results may vary materially from those contained in forward looking statements based on a number of factors, including, but not limited to, changes in competition and price pressures, changes in demand and customer requirements or processes for our products, availability of product and disruptions to supplies, interruptions in production resulting from hazards, transportation limitations or other extraordinary events outside our control that may negatively impact our business or the supply chains in which we participate, changes in imported products and tariff levels, the availability of products and the prices at which they are available, the acceptance of new products by our customers and the timing of any such acceptance, and changes in product supplies. Additional information concerning potential factors that could affect future financial results is included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, as updated from time to time in amendments and subsequent reports filed with the SEC. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date hereof. We do not undertake any obligation to update any forward-looking statements.

Contacts:    Jeffrey P. Oldenkamp
Executive Vice President and Chief Financial Officer
612/331-6910
ir@HawkinsInc.com


v3.24.3
Cover
Oct. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 30, 2024
Entity Registrant Name Hawkins, Inc.
Entity Incorporation, State or Country Code MN
Entity File Number 0-7647
Entity Tax Identification Number 41-0771293
Entity Address, Address Line One 2381 Rosegate,
Entity Address, City or Town Roseville,
Entity Address, State or Province MN
Entity Address, Postal Zip Code 55113
City Area Code 612
Local Phone Number 331-6910
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $.01 per share
Trading Symbol HWKN
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000046250
Amendment Flag false
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