ROSEVILLE, Minn., July 29, 2026 (GLOBE NEWSWIRE) -- Hawkins, Inc. (Nasdaq: HWKN) today announced results for the three months ended June 28, 2026, its first quarter of fiscal 2027.
First Quarter Fiscal Year 2027 Highlights:
(All comparisons are to the first quarter of fiscal 2026 unless otherwise noted.)
- Record first quarter revenue of $315.7 million, with growth of 8%, driven by increased sales across all segments, including Water Treatment segment growth of 6%, Food & Health Sciences segment growth of 9%, and Industrial Solutions segment growth of 10%.
- Record first quarter gross profit of $74.0 million, an increase of 2%.
- Diluted earnings per share ("EPS") of $1.35 decreased $0.05, or 4%.
- Net income of $28.3 million decreased 3%, with trailing twelve-month net income of $80.6 million. Record Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”), a non-GAAP measure, of $56.9 million, a 1% increase. Trailing twelve-month adjusted EBITDA of $179.8 million.
- Generated operating cash flow of $35.2 million, an increase of 12%. Free cash flow, defined as net cash provided by operating activities less capital expenditures, increased over 30%, to $23.5 million, which we allocated to repurchasing $7.0 million of stock, paying $4.0 million in dividends, and acquiring Aqua-Chem, Inc. for $3.6 million.
- We continued to execute on our Water Treatment growth strategy with the purchase of Aqua-Chem, Inc., a distributor of water treatment products mainly in Nebraska and Iowa.
Executive Commentary – Patrick H. Hawkins, Chief Executive Officer and President:
“Our first quarter was a solid start to the year, highlighted by another quarter of record results in revenue, gross profit, and adjusted EBITDA” said Patrick Hawkins, Chief Executive Officer and President. “Our record revenue of $315.7 million was the result of all three reporting segments growing year over year, and included organic revenue growth of approximately 5%, consistent with our expectation of returning to historical organic revenue growth rates in fiscal 2027.”
Mr. Hawkins continued, “The first quarter brought raw material volatility. Our great team members stayed close to our suppliers and our customers, managing input costs while continuing to deliver the products and level of service expected from Hawkins. As we exited the quarter, raw material costs had largely stabilized.”
Mr. Hawkins concluded, “Our balance sheet remains strong, and our leverage ratio at the end of the first quarter was 1.36x adjusted EBITDA. We continue to generate strong free cash flow and we expect to continue to pay down debt during fiscal 2027. We will also continue to deliver on our strategy of investing in our higher-margin businesses, acquiring companies that are accretive to Hawkins, and servicing the needs of our customers to the highest level possible.”
First Quarter Financial Highlights:
NET INCOME
For the first quarter of fiscal 2027, we reported net income of $28.3 million, or $1.35 per diluted share, compared to net income for the first quarter of fiscal 2026 of $29.2 million, or $1.40 per diluted share.
REVENUE
Sales were $315.7 million for the first quarter of fiscal 2027, an increase of $22.4 million, or 8%, from sales of $293.3 million in the same period a year ago. All of our segments grew by more than 5% from the same period a year ago.
Water Treatment segment sales increased $8.7 million, or 6%, to $158.3 million for the current quarter, from $149.6 million in the same period a year ago. Water Treatment sales increased as a result of $6.9 million of added sales from acquired businesses, as well as increased organic sales volumes and improved pricing on certain products in our legacy business, including continued growth in our proprietary product lines.
Food & Health Sciences segment sales increased $8.1 million, or 9%, to $97.3 million for the current quarter, from $89.2 million in the same period a year ago. Sales of our agricultural, nutrition, and pharmaceutical products all increased over the same period a year ago, partially offset by decreased sales volumes of our food ingredient products. Agricultural products remained a source of strength, with sales growth of 30% driven by higher volumes.
Industrial Solutions segment sales increased $5.6 million, or 10%, to $60.1 million for the current quarter, from $54.5 million in the same period a year ago. Industrial Solutions segment sales increased primarily as a result of increased sales volumes of certain of our manufactured, blended and repackaged products.
GROSS PROFIT
Gross profit increased $1.6 million, or 2%, to $74.0 million, or 23% of sales, for the current quarter, from $72.4 million, or 25% of sales, in the same period a year ago. During the current quarter, the LIFO reserve increased, and gross profit decreased, by $1.9 million, a $1.3 million greater headwind than in the same period a year ago. In addition to the impact of the LIFO reserve, gross margin was pressured by higher freight costs of approximately $1.3 million that were not fully recovered through freight charges billed to customers.
Gross profit for the Water Treatment segment increased $1.7 million, or 4%, to $45.5 million, or 29% of sales, for the current quarter, from $43.7 million, or 29% of sales, in the same period a year ago. During the current quarter, the LIFO reserve increased, and gross profit decreased by $0.5 million, a $0.3 million greater headwind than in the same period a year ago. The increase in gross profit was primarily driven by higher sales partially offset by higher LIFO and freight costs.
Gross profit for the Food & Health Sciences segment was $19.3 million for the current quarter, unchanged from the same period in the prior year. During the current quarter, the LIFO reserve increased, and gross profit decreased, by $0.8 million, a $0.6 million greater headwind than in the same period a year ago. The benefit of higher sales volumes was offset by higher LIFO and freight costs.
Gross profit for the Industrial Solutions segment of $9.2 million, or 15% of sales, for the current quarter, was relatively flat compared to $9.3 million, or 17% of sales, in the same period a year ago. During the current quarter, the LIFO reserve increased, and gross profit decreased, by $0.7 million, a $0.5 million greater headwind than in the same period a year ago. The benefit of higher sales volumes was more than offset by higher LIFO and freight costs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative (“SG&A”) expenses increased $4.3 million, or 14%, to $35.3 million, or 11% of sales, for the current quarter, from $31.0 million, or 11% of sales, in the same period a year ago. This included $2.1 million due to added costs from the acquired businesses in our Water Treatment segment. In addition, the prior-year period included a $1.9 million favorable fair value adjustment that reduced SG&A, reflecting a downward revision to the estimated Water Solutions earnout liability based on a change in projected estimates related to the earnout target. This benefit did not recur in the current period, resulting in a $1.9 million year-over-year increase in SG&A. SG&A also included a $0.5 million incremental increase in non-qualified deferred compensation expense, which was offset by a corresponding gain within other income. These increases were partially offset by lower acquisition-related costs and other changes across our operating expenses.
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 June 28, 2026 was $56.9 million, an increase of $0.8 million, or 1%, from $56.1 million in the same period a year ago. In the third quarter of fiscal 2026, we revised our definition of adjusted EBITDA to exclude non-cash earnout related expense and income, in order to better reflect results from operations. Prior-year adjusted EBITDA has been recast in accordance with the current definition. As originally reported, adjusted EBITDA for the three months ended June 29, 2025 was $57.6 million, which included non-cash earnout related income that is excluded under the current definition.
INCOME TAXES
Our effective income tax rate was 24% for the current quarter and 25% for the same period a year ago. The effective tax rate in both years was impacted by favorable tax provision adjustments recorded. 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 expected to be approximately 25% to 27%.
BALANCE SHEET
As of June 28, 2026, our working capital was $13 million higher than the end of fiscal 2026 due primarily to increased trade receivables. Our total debt outstanding at the end of the first quarter was $244.0 million, and our leverage ratio was 1.36x our trailing twelve-month adjusted EBITDA, as compared to 1.37x our trailing twelve-month adjusted EBITDA at the end of fiscal 2026.
About Hawkins, Inc.
Hawkins, Inc. was founded in 1938 and is a leading water treatment and specialty ingredients company that formulates, manufactures, distributes, and blends products for its Water Treatment, Food & Health Sciences, and Industrial Solutions customers. Headquartered in Roseville, Minnesota, the Company has 66 facilities in 28 states and creates value for its customers through superb customer service and support, quality products and personalized applications. Hawkins, Inc. generated approximately $1.1 billion of revenue in fiscal 2026 and has approximately 1,200 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 and free cash flow. These non-GAAP financial measures are 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 these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide 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, charges for the employee stock purchase plan and restricted stock grants, non-recurring items of income or expense, and earnout-related expense or income. The non-cash earnout related expense or income adjustment was added to our definition in the third quarter of fiscal 2026 to better reflect results from operations. Prior period amounts have been recast to conform to the current definition.
We define free cash flow as net cash provided by operating activities less purchases of property, plant, and equipment. Management believes free cash flow is a useful measure of the cash generated by our business that is available for, among other things, debt repayment, acquisitions, dividends, and share repurchases.
Adjusted EBITDA Three months ended Trailing twelve months ended(In thousands) June 28,2026 June 29,
2025 June 28,
2026 June 29,
2025Net Income (GAAP) $28,254 $29,175 $80,627 $84,641 Interest expense, net 2,773 3,269 13,011 7,438 Income tax expense 9,070 9,831 27,031 30,061 Amortization of intangibles 5,516 4,821 21,987 14,783 Depreciation expense 8,429 7,470 32,209 28,127 Non-cash compensation expense 2,235 2,212 8,596 7,243 Non-recurring acquisition expenses(1) 63 870 432 1,911 Non-cash earnout related expense (income) 535 (1,583) (4,059) (553)Adjusted EBITDA $56,875 $56,065 $179,834 $173,651
2026June 29,
2025Net cash provided by operating activities $35,152 $31,490 Less: Purchases of property, plant & equipment (11,605) (13,544)Free cash flow $23,547 $17,946
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except share and per-share data)
Three months ended June 28,
2026 June 29,
2025Sales $315,675 $293,272 Cost of sales (241,668) (220,910)Gross profit 74,007 72,362 Selling, general and administrative expenses (35,335) (31,029)Operating income 38,672 41,333 Interest expense, net (2,773) (3,269)Other income 1,425 942 Income before income taxes 37,324 39,006 Income tax expense (9,070) (9,831)Net income $28,254 $29,175 Weighted average number of shares outstanding - basic 20,777,481 20,717,485 Weighted average number of shares outstanding - diluted 20,853,991 20,810,562 Basic earnings per share $1.36 $1.41 Diluted earnings per share $1.35 $1.40 Cash dividends declared per common share $0.19 $0.18
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
June 28,
2026 March 29,
2026 ASSETS CURRENT ASSETS: Cash and cash equivalents $7,977 $3,914 Trade accounts receivables, net 151,773 139,796 Inventories 79,864 78,199 Prepaid expenses and other current assets 9,165 9,556 Total current assets 248,779 231,465 Property, plant, and equipment 501,792 489,662 Less accumulated depreciation 231,206 223,406 Net property, plant, and equipment 270,586 266,256 OTHER ASSETS: Right-of-use assets 16,081 16,840 Goodwill 223,828 223,042 Intangible assets, net 229,018 232,887 Deferred compensation plan asset 16,477 12,812 Other 1,474 2,988 Total other assets 486,878 488,569 Total assets $1,006,243 $986,290 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable — trade $62,845 $59,835 Accrued payroll and employee benefits 15,750 20,092 Income tax payable 8,236 98 Environmental remediation 7,700 7,700 Other current liabilities (Note 8) 15,083 17,119 Total current liabilities 109,614 104,844 LONG-TERM LIABILITIES: Long-term debt 244,000 244,000 Long-term lease liabilities 13,703 14,457 Pension withdrawal liability 2,663 2,763 Deferred income taxes 25,065 25,110 Deferred compensation liability 17,330 14,850 Earnout liabilities 45,433 44,898 Other long-term liabilities 231 1,359 Total long-term liabilities 348,425 347,437 Total liabilities $458,039 $452,281 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock; authorized: 60,000,000 shares of $0.01 par value; 20,743,884 and 20,752,138 shares issued and outstanding as of June 28, 2026 and March 29, 2026, respectively 207 208 Additional paid-in capital 22,750 32,678 Retained earnings 524,425 500,142 Accumulated other comprehensive income 822 981 Total shareholders’ equity 548,204 534,009 Total liabilities and shareholders’ equity $1,006,243 $986,290
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Three months ended June 28,
2026 June 29,
2025CASH FLOWS FROM OPERATING ACTIVITIES: Net income $28,254 $29,175 Reconciliation to cash flows: Depreciation and amortization 13,945 12,291 Change in fair value of earnout liabilities 535 (1,583) Operating leases 1,040 923 Gain on deferred compensation assets (1,425) (942) Stock compensation expense 2,235 2,212 Other, net 58 (25) Changes in operating accounts providing (using) cash: Trade receivables (12,462) (2,651) Inventories (1,474) (8,487) Accounts payable 2,218 (3,812) Accrued liabilities (6,448) (6,735) Lease liabilities (1,269) (973) Income taxes 9,029 9,831 Other, net 916 2,266 Net cash provided by operating activities 35,152 31,490 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant, and equipment (11,605) (13,544)Acquisitions (3,600) (151,328)Proceeds from asset disposals 260 327 Net cash used in investing activities (14,945) (164,545)CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends declared and paid (3,971) (3,754)Payroll taxes paid in exchange for shares withheld (5,143) (3,028)Shares repurchased (7,021) — Payments on senior secured revolving loan (5,000) (10,000)Payments for debt issuance costs — (764)Borrowings on senior secured revolving loan 5,000 160,000 Other (9) — Net cash (used in) provided by financing activities (16,144) 142,454 NET INCREASE IN CASH AND CASH EQUIVALENTS 4,063 9,399 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,914 5,103 CASH AND CASH EQUIVALENTS, END OF PERIOD $7,977 $14,502 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest $2,816 $3,286 Noncash investing activities - capital expenditures in accounts payable $3,001 $1,493
REPORTABLE SEGMENTS (UNAUDITED)
(In thousands)
Water
Treatment Food & Health Sciences Industrial Solutions TotalThree months ended June 28, 2026: Sales $158,293 $97,250 $60,132 $315,675 Cost of sales - materials (94,481) (73,345) (47,858) (215,684)Cost of sales - operational overhead (18,316) (4,630) (3,038) (25,984)Gross profit 45,496 19,275 9,236 74,007 Selling, general, and administrative expenses (23,670) (8,028) (3,637) (35,335)Operating income 21,826 11,247 5,599 38,672 Three months ended June 29, 2025: Sales $149,566 $89,177 $54,529 $293,272 Cost of sales - materials (89,159) (65,814) (42,848) (197,821)Cost of sales - operational overhead (16,660) (4,015) (2,414) (23,089)Gross profit 43,747 19,348 9,267 72,362 Selling, general, and administrative expenses (19,085) (8,381) (3,563) (31,029)Operating income 24,662 10,967 5,704 41,333
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, changes in product supplies, the availability of target acquisitions, and changes in interest rates. 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 29, 2026, 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. OldenkampExecutive Vice President and Chief Financial Officer
612/331-6910
[email protected]