Hawkins(HWKN) - 2021 Q4 - Annual Report

Financial Performance - Sales for fiscal 2021 were $596.9 million, a 10% increase from $540.2 million in fiscal 2020[104] - Gross profit increased by $22.8 million, or 23%, to $123.8 million, representing 21% of sales for fiscal 2021[108] - Operating income was $55.9 million, or 9% of sales, for fiscal 2021, compared to $41.7 million, or 8% of sales, for fiscal 2020[113] - SG&A expenses rose by $8.6 million to $67.9 million, maintaining 11% of sales for fiscal 2021[112] - The Industrial segment saw a sales decrease of $1.9 million, or 1%, to $273.4 million for fiscal 2021[105] - The Water Treatment segment's sales increased by $10.1 million, or 6%, to $170.0 million for fiscal 2021[106] - The Health and Nutrition segment experienced a sales increase of $48.4 million, or 46%, to $153.5 million for fiscal 2021[107] Income and Expenses - Interest expense decreased to $1.5 million for fiscal 2021, down from $2.5 million in fiscal 2020[114] - The effective tax rate remained approximately 27% for both fiscal 2021 and fiscal 2020[114] - Fiscal 2021 sales were $143.2 million in Q1, $147.8 million in Q2, $142.9 million in Q3, and $163.0 million in Q4, totaling $597.9 million for the year, a decrease of 3.5% compared to fiscal 2020[116] - Gross profit for fiscal 2021 was $30.98 million in Q1, $32.80 million in Q2, $28.24 million in Q3, and $31.75 million in Q4, totaling $123.77 million, representing a 5.5% increase from fiscal 2020[116] - Operating income in fiscal 2021 was $15.94 million in Q1, $16.58 million in Q2, $10.49 million in Q3, and $12.88 million in Q4, totaling $55.89 million, a decrease of 12.5% from fiscal 2020[116] - Net income for fiscal 2021 was $11.79 million in Q1, $12.19 million in Q2, $7.92 million in Q3, and $9.08 million in Q4, totaling $40.18 million, down 5.5% from fiscal 2020[116] Cash Flow - Cash provided by operating activities decreased to $43.8 million in fiscal 2021 from $58.9 million in fiscal 2020, primarily due to increased customer receivables and inventory levels[117] - Cash used in investing activities increased to $71.4 million in fiscal 2021 from $24.2 million in fiscal 2020, including $51.0 million for acquisitions[118] - Cash provided by financing activities was $26.4 million in fiscal 2021, compared to cash used of $39.6 million in fiscal 2020, driven by net debt borrowings of $39.0 million[119] - The company had a cash balance of $3.0 million as of March 28, 2021, a decrease of $1.3 million from the previous year[120] Strategic Initiatives - The company acquired C & L Aqua Professionals, Inc. and LC Blending, Inc., contributing approximately $25 million in annual revenue prior to acquisition[93][97] - The company plans to pursue acquisitions and strategic relationships to expand its business and customer base[128] Market Risks - The company is exposed to market risks related to commodity chemical prices, which are cyclical in nature[139] - The company does not currently engage in hedging activities for commodity chemicals, impacting its ability to pass cost increases to customers[139] - A 25-basis point change in interest rates could affect annual interest expense by approximately $0.2 million on variable-rate debt[140] - The company has limited exposure to interest rate changes, primarily related to borrowings under its credit facility[140] - Other market risks, such as foreign currency risk, do not typically arise in the company's business activities[140]