Hawkins(HWKN) - 2024 Q4 - Annual Report

Financial Performance - Sales for fiscal 2024 were $919.2 million, a decrease of $15.9 million, or 2%, from $935.1 million in fiscal 2023[112] - Gross profit increased by $28.5 million, or 17%, to $193.6 million, representing 21% of sales for fiscal 2024, compared to 18% of sales in fiscal 2023[116] - Diluted earnings per share (EPS) rose to $3.59, an increase of $0.73, or 26%, from $2.86 in fiscal 2023[104] - Operating income rose by $15.8 million, or 18%, to $104.0 million, or 11% of sales, for fiscal 2024, compared to 9% of sales in fiscal 2023[121] Segment Performance - The Water Treatment segment saw sales increase by $58.4 million, or 19%, to $363.3 million for fiscal 2024, driven by increased selling prices and sales volumes[114] - The Industrial segment experienced a sales decline of $61.3 million, or 13%, to $409.5 million for fiscal 2024, impacted by lower volumes and the sale of the consumer bleach packaging business[113] Expenses and Costs - SG&A expenses increased by $12.6 million, or 16%, to $89.6 million, or 10% of sales, for fiscal 2024, influenced by costs from acquired businesses[120] Cash Flow and Investments - Cash provided by operating activities increased by $82.1 million to $159.5 million in fiscal 2024, primarily due to favorable changes in trade receivables and inventory[125] - Cash used in investing activities increased to $122.5 million in fiscal 2024 from $41.2 million in fiscal 2023, primarily due to an acquisition spending of $83.5 million[126] - Capital expenditures for property, plant, and equipment decreased to $40.2 million in fiscal 2024 from $48.3 million in fiscal 2023, driven by reduced facility improvements and expansions[126] - Cash used in financing activities rose to $37.4 million in fiscal 2024 compared to $32.1 million in fiscal 2023, including cash dividends of $13.2 million and share repurchases of $11.3 million[127] Tax and Compliance - The effective tax rate decreased to approximately 26% for fiscal 2024, down from 27% in fiscal 2023, due to favorable tax provision adjustments[122] - The company is in compliance with all covenants of the Credit Agreement as of March 31, 2024, and expects to remain compliant for the next 12 months[133] Debt and Interest Rates - The company has a Revolving Loan Facility totaling $250.0 million, with a five-year maturity date, maturing on April 30, 2027[129] - The effective interest rate on borrowings under the Revolving Loan Facility was 4.3% as of March 31, 2024[130] - A 25-basis point change in interest rates on the variable-rate portion of debt not covered by the interest rate swap could potentially affect annual interest expense by approximately $0.1 million[142] Future Plans - The company acquired four businesses in fiscal 2024, contributing approximately $70 million in annual revenue[108] - The company anticipates total capital expenditures in the range of $40 to $45 million for fiscal 2025[138] - The company plans to pursue acquisitions or strategic relationships to complement or expand its existing businesses[136]