Hawkins, Inc. Reports Third Quarter Fiscal 2026 Results

Core Insights - Hawkins, Inc. reported record results in revenue, gross profit, operating income, and Adjusted EBITDA for the third quarter of fiscal 2026, driven by acquisition activity in the Water Treatment segment and improvements in the Industrial Solutions segment [3][5]. Financial Performance - Revenue for the third quarter reached $244.1 million, an increase of 8% from $226.2 million in the same period last year, with Water Treatment segment growth of 21% and Industrial Solutions segment growth of 10% [5][7]. - Gross profit increased by 5% to $50.8 million, maintaining a gross margin of 21% [5][11]. - Adjusted EBITDA was $34.8 million, a 3% increase from the previous year, with a trailing 12-month Adjusted EBITDA of $179 million [5][17]. Earnings and Expenses - Diluted earnings per share (EPS) were $0.69, a decrease of 4% due to increased amortization and interest expenses related to acquisitions [5][6]. - Selling, general, and administrative (SG&A) expenses rose by 3% to $28.3 million, accounting for 12% of sales, influenced by costs from acquired businesses [15]. Segment Performance - The Water Treatment segment reported sales of $120.5 million, up 21% from $99.8 million, attributed to $19 million from acquired businesses and improved pricing [8]. - The Food & Health Sciences segment saw a decline in sales by 10% to $70.0 million, primarily due to decreased sales volumes [9]. - The Industrial Solutions segment's sales increased by 10% to $53.6 million, driven by higher sales of manufactured products [10]. Cash Flow and Debt Management - Operating cash flow for the quarter was $35 million, with $15 million used to pay down debt, resulting in a leverage ratio of 1.47x Adjusted EBITDA [5][19]. - Total debt outstanding at the end of the quarter was $264 million, reflecting a strategic focus on reducing leverage [19]. Future Outlook - The company anticipates continued pricing pressures in the Food and Health Sciences segment but expects to return to historical organic revenue growth rates in fiscal 2027 [3].