UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 Commission file number 0-7647 HAWKINS, INC. (Exact name of registrant as specified in its charter) | Minnesota | 41-0771293 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 2381 Rosegate, Roseville, Minnesota | 55113 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended March 31, 2019 Commission File No. 0-7647 HAWKINS, INC. (Exact Name of Registrant as Specified in its Charter) 2381 Rosegate, Roseville, Minnesota 55113 (Address of Principal Executive Offices) (Zip Code) (612) 331-6910 (Registrant's Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Hawkins, Inc. presents unaudited condensed consolidated financial statements, highlighting **$217.5 million** shareholders' equity and **$20.7 million** net income for the nine-month period [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$388.4 million** as of December 30, 2018, while total liabilities decreased, leading to an increase in shareholders' equity to **$217.5 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 30, 2018 | April 1, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$388,444** | **$390,991** | | Total Current Assets | $142,180 | $134,982 | | Net Property, Plant, and Equipment | $117,604 | $123,826 | | **Total Liabilities** | **$170,914** | **$188,744** | | Total Current Liabilities | $53,083 | $60,567 | | Long-Term Debt, Less Current Portion | $80,635 | $90,762 | | **Total Shareholders' Equity** | **$217,530** | **$202,247** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Sales increased to **$128.2 million** for the quarter and **$423.3 million** for nine months, with net income of **$4.1 million** and **$20.7 million** respectively Three Months Ended Financial Performance (in thousands, except per-share data) | Metric | Dec 30, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | Sales | $128,151 | $118,053 | | Gross Profit | $21,033 | $18,840 | | Operating Income | $6,721 | $4,701 | | Net Income | $4,130 | $17,143* | | Diluted EPS | $0.39 | $1.61* | Nine Months Ended Financial Performance (in thousands, except per-share data) | Metric | Dec 30, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | Sales | $423,275 | $377,179 | | Gross Profit | $75,262 | $68,954 | | Operating Income | $31,030 | $24,221 | | Net Income | $20,662 | $28,184* | | Diluted EPS | $1.93 | $2.65* | - *Prior year net income for both three and nine-month periods included a significant one-time tax benefit related to the U.S. Tax Cuts and Jobs Act[12](index=12&type=chunk)[53](index=53&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$31.0 million**, while investing activities used **$7.0 million** and financing activities used **$21.7 million** Nine Months Ended Cash Flow Summary (in thousands) | Cash Flow Activity | Dec 30, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | Net cash provided by operating activities | $31,030 | $14,560 | | Net cash used in investing activities | ($7,038) | ($16,704) | | Net cash (used in) provided by financing activities | ($21,682) | $2,918 | | **Net increase in cash and cash equivalents** | **$2,310** | **$774** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment performance, debt refinancing with a new **$150 million** revolving credit facility, and **$2.4 million** in share repurchases - The company adopted the new revenue recognition standard (ASU 2014-09) on April 2, 2018, with no impact on its financial position or results of operations[21](index=21&type=chunk)[23](index=23&type=chunk)[25](index=25&type=chunk) Nine Months Ended 2018 Sales by Segment (in thousands) | Segment | Sales | % of Total | | :--- | :--- | :--- | | Industrial | $212,446 | 50.2% | | Water Treatment | $116,322 | 27.5% | | Health and Nutrition | $94,507 | 22.3% | | **Total** | **$423,275** | **100.0%** | - On November 30, 2018, the company refinanced its debt, entering into a new five-year, **$150.0 million** senior secured revolving credit facility, which replaced its previous term and revolving loans[46](index=46&type=chunk) Nine Months Ended 2018 Operating Income by Segment (in thousands) | Segment | Operating Income | | :--- | :--- | | Industrial | $10,193 | | Water Treatment | $16,052 | | Health and Nutrition | $4,785 | | **Total** | **$31,030** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses increased sales, gross profit, and operating income, driven by segment growth and improved liquidity from operations and a new **$150 million** credit facility [Results of Operations](index=16&type=section&id=Results%20of%20Operations) Q3 sales rose **8.6%** to **$128.2 million** and operating income to **$6.7 million**; nine-month sales increased **12.2%** to **$423.3 million** and operating income to **$31.0 million** Q3 FY19 vs Q3 FY18 Performance Summary | Metric | Q3 FY19 | Q3 FY18 | Change | | :--- | :--- | :--- | :--- | | Sales | $128.2M | $118.1M | +8.6% | | Gross Profit | $21.0M | $18.8M | +11.7% | | Operating Income | $6.7M | $4.7M | +42.6% | Nine Months FY19 vs FY18 Performance Summary | Metric | YTD FY19 | YTD FY18 | Change | | :--- | :--- | :--- | :--- | | Sales | $423.3M | $377.2M | +12.2% | | Gross Profit | $75.3M | $69.0M | +9.1% | | Operating Income | $31.0M | $24.2M | +28.1% | - The Industrial segment's sales grew **14.4%** in Q3 and **16.1%** in the nine-month period due to higher volumes and increased selling prices. The Water Treatment segment's sales increased **6.1%** in Q3 and **8.4%** in the nine-month period from higher volumes and favorable product mix[73](index=73&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) - SG&A expenses decreased by **$0.5 million** for the nine-month period due to management actions, despite increases in certain variable expenses[94](index=94&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity strengthened with cash from operations doubling to **$31.0 million**, and debt refinanced into a new **$150 million** revolving credit facility for greater flexibility - Cash provided by operating activities increased to **$31.0 million** for the nine months ended Dec 30, 2018, compared to **$14.6 million** in the prior year, mainly due to higher operating income and improved working capital management[100](index=100&type=chunk) - Capital expenditures decreased to **$7.2 million** for the nine-month period, down from **$17.0 million** in the prior year, which included non-recurring projects[102](index=102&type=chunk) - On November 30, 2018, the company entered into a new five-year, **$150.0 million** revolving credit facility, refinancing its previous debt structure and using **$91.0 million** of the proceeds to pay off existing obligations[106](index=106&type=chunk)[107](index=107&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages market risks from commodity prices by passing costs to customers and mitigates interest rate risk on variable-rate debt with an interest rate swap - The company is subject to risk from cyclical commodity chemical prices but does not use forward contracts or hedging for purchases, instead aiming to pass cost changes to customers[116](index=116&type=chunk) - To manage interest rate risk, the company has an interest rate swap designated as a cash flow hedge, converting a portion of its variable-rate debt to a fixed rate. The notional amount is **$30 million** through August 2019 and decreases thereafter until its termination in December 2020[117](index=117&type=chunk)[118](index=118&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls and procedures were effective as of December 30, 2018, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 30, 2018[120](index=120&type=chunk) - No changes occurred in the company's internal control over financial reporting during the third quarter of fiscal 2019 that materially affected, or are reasonably likely to materially affect, internal controls[121](index=121&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) No material pending legal proceedings are reported, only ordinary routine litigation incidental to the company's business - There are no material pending legal proceedings against the company or its subsidiaries, apart from ordinary, routine litigation[123](index=123&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for fiscal year ended April 1, 2018 - No material changes to risk factors have occurred since the company's last Annual Report on Form 10-K[124](index=124&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **59,788 shares** of common stock during the quarter, with **52,758 shares** remaining available under the program Share Repurchases for Q3 FY19 | Period | Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | 10/29/2018-11/25/2018 | 29,995 | $39.24 | | 11/26/2018-12/30/2018 | 29,793 | $40.57 | | **Total** | **59,788** | **-** | - As of December 30, 2018, **52,758 shares** remained available for repurchase under the authorized plan[125](index=125&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including the Amended and Restated Credit Agreement and CEO/CFO certifications - Key exhibits filed include: - Amended and Restated Credit Agreement (Exhibit 10.2) - CEO and CFO Certifications (Exhibits 31.1, 31.2, 32.1, 32.2) - XBRL Interactive Data File (Exhibit 101)[129](index=129&type=chunk)