Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Hawkins (HWKN) is identified as a promising growth stock, currently recommended based on its favorable Growth Score and top Zacks Rank [2] - The company has a historical EPS growth rate of 23.3%, with projected EPS growth of 12.5% this year, significantly outperforming the industry average of 5.6% [4] Group 2: Financial Metrics - Hawkins exhibits a year-over-year cash flow growth of 16%, surpassing the industry average of 6%, which is crucial for its expansion without relying on external funding [5] - The historical annualized cash flow growth rate for Hawkins over the past 3-5 years is 18.3%, compared to the industry average of 4.1% [6] Group 3: Earnings Estimates - There is a positive trend in earnings estimate revisions for Hawkins, with the current-year earnings estimates increasing by 2.3% over the past month [7] - Hawkins has achieved a Growth Score of B and a Zacks Rank 1 due to these favorable earnings estimate revisions [8]

Company Performance - Hawkins reported quarterly earnings of $0.78 per share, exceeding the Zacks Consensus Estimate of $0.74 per share, and up from $0.66 per share a year ago, representing an earnings surprise of 5.41% [1] - The company posted revenues of $245.32 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.62%, compared to $223.02 million in the same quarter last year [2] - Over the last four quarters, Hawkins has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Future Outlook - The sustainability of Hawkins' stock price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.34 on revenues of $268.31 million, and for the current fiscal year, it is $4.54 on revenues of $1.05 billion [7] - The estimate revisions trend for Hawkins is currently favorable, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Chemical - Specialty industry, to which Hawkins belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially affect stock performance [5][8]

Financial Performance Highlights - Hawkins reported record full-year revenue of $9744 million in fiscal year 2025, a 6% increase compared to the prior year[75] - The company achieved a record full-year gross profit of $2255 million, representing a 16% growth over the previous year[75] - Hawkins' diluted earnings per share (EPS) reached a record $403, which is 12% higher than the prior year[75] - Adjusted EBITDA for fiscal year 2025 was a record $1675 million, a 17% increase compared to the trailing twelve-month (TTM) period[75] - The company's sales have grown at a compound annual growth rate (CAGR) of 13% from fiscal year 2020 to 2025[59] Segment Performance - Water Treatment segment sales reached $4465 million in fiscal year 2025[42] - Industrial segment sales were $3825 million in fiscal year 2025[42] - Health & Nutrition segment recorded sales of $1455 million in fiscal year 2025[42] Capital Allocation and Shareholder Returns - Hawkins has consistently paid out dividends since 1985[7] - The company's dividend CAGR is 105%[31] - The dividend per share has increased from $046 in fiscal year 2021 to $070 in fiscal year 2025[29] Strategic Initiatives - The company aims to grow all 51 water treatment facilities and add new locations through acquisitions or greenfield expansion[47] - Hawkins intends to grow its pharmaceutical, food, and agricultural business through new product development and investments[47] - The company focuses on growing specialty branded products with technical expertise[47]

Financial Performance - Fiscal 2025 sales were $974.4 million, an increase of $55.2 million, or 6%, from fiscal 2024 sales of $919.2 million[118]. - Gross profit for fiscal 2025 was $225.5 million, an increase of $31.9 million, or 16%, from $193.6 million in fiscal 2024[129]. - Diluted earnings per share (EPS) for fiscal 2025 were $4.03, an increase of $0.44, or 12%, from fiscal 2024[118]. - Operating income for fiscal 2025 increased by $15.2 million, or 15%, to $119.2 million[134]. Segment Performance - The Water Treatment segment saw sales increase by $83.2 million, or 23%, to $446.5 million in fiscal 2025[126]. - The Industrial segment experienced a sales decrease of $27.0 million, or 7%, to $382.5 million in fiscal 2025[127]. - Health and Nutrition segment sales decreased by $0.9 million, or 1%, to $145.5 million in fiscal 2025[128]. Expenses and Cash Flow - Selling, general and administrative expenses increased by $16.8 million, or 19%, to $106.4 million in fiscal 2025[133]. - Cash provided by operating activities in fiscal 2025 was $111.1 million, down from $159.5 million in fiscal 2024[140]. Acquisitions and Investments - The company acquired four businesses in fiscal 2025, contributing approximately $67 million in annual revenue[122]. - Cash used in investing activities was $128.0 million in fiscal 2025, up from $122.5 million in fiscal 2024, with acquisition spending for the Water Treatment group at $87.4 million in fiscal 2025 compared to $83.5 million in fiscal 2024[141]. - The fair value of the earnout liability related to the Water Solutions acquisition is based on achieving certain targets payable three years after acquisition, amounting to $12.6 million[156]. Financing and Capital Structure - Cash used in financing activities decreased to $14.8 million in fiscal 2025 from $37.4 million in fiscal 2024, including net debt borrowings of $50.0 million in fiscal 2025[142]. - The cash balance was $5.1 million at March 30, 2025, a decrease of $2.1 million compared to March 31, 2024, primarily due to cash expended for acquisitions and capital expenditures[143]. - The company has a Revolving Loan Facility totaling $400.0 million, with $149 million outstanding as of March 30, 2025[144]. - The effective interest rate on borrowings was 4.3% as of March 30, 2025, with a Term SOFR margin between 1.0% and 1.85% based on the leverage ratio[145]. - 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 $0.2 million[158]. Future Outlook - Total capital expenditures were $41.1 million in fiscal 2025, with an anticipated increase to approximately $60 million for fiscal 2026[153]. - The company plans to pursue acquisitions or strategic relationships to expand its existing businesses and customer base[151]. - The company is in compliance with all covenants of the Credit Agreement as of March 30, 2025, and expects to remain compliant for the next 12 months[148].

Core Insights - Hawkins, Inc. reported record sales, gross margin, operating income, EPS, and adjusted EBITDA for fiscal year 2025, marking a continued growth trajectory with a focus on sustained performance [4][5][7]. Fourth Quarter Fiscal Year 2025 Highlights - Fourth quarter sales reached $245.3 million, a 10% increase from the same quarter last year, driven by a 21% growth in the Water Treatment segment [5][8]. - Gross profit for the fourth quarter was $52.2 million, up 15% year-over-year, contributing to an operating income of $24.6 million, a 22% increase [5][7]. - Diluted EPS for the fourth quarter was $0.78, an 18% increase compared to the prior year [5][7]. - Adjusted EBITDA for the fourth quarter was $36.7 million, reflecting an 18% increase from the same period last year [5][16]. Full-Year Fiscal Year 2025 Highlights - Total annual sales were $974.4 million, a 6% increase from the previous fiscal year, with the Water Treatment segment achieving a 23% sales growth [5][9]. - Annual gross profit reached $225.5 million, a 16% increase year-over-year, leading to an operating income of $119.2 million, a 15% increase [5][10]. - Record diluted EPS for the year was $4.03, which is $0.44 or 12% higher than fiscal 2024 [5][7]. - Adjusted EBITDA for the full year was $167.5 million, a 17% increase from fiscal 2024 [5][16]. Executive Commentary - The CEO highlighted the company's disciplined M&A strategy, contributing to the growth of the Water Treatment segment, which is now the largest segment [4]. - The company completed four acquisitions during the fiscal year and has made a total of 13 acquisitions over the last five years [4]. - Looking ahead, the company anticipates revenue to exceed $1 billion for the first time in its history in fiscal 2026, with expectations for EPS growth, albeit at a slower rate due to increased interest and amortization expenses [4][6]. Financial Performance - The Water Treatment segment generated $446.5 million in sales for the year, a 23% increase from $363.3 million in the previous year [9]. - The Industrial segment saw a decline in sales to $382.5 million, down 7% from $409.5 million [9]. - Health and Nutrition segment sales were $145.5 million, a slight decrease of 1% from the previous year [9]. Balance Sheet and Cash Flow - At the end of fiscal 2025, the company reported net debt of $143.9 million with a leverage ratio of 0.86x adjusted EBITDA [5][18]. - Operating cash flow for the year was $111.1 million, with significant investments in acquisitions and capital expenditures [5][18]. - The company paid cash dividends of $0.70 per share, marking the 40th consecutive year of dividend payments, reflecting an 11% increase over the prior year [5][18].

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps investors identify stocks with momentum by focusing on key metrics [2] Group 2: Company Analysis - Hawkins (HWKN) - Hawkins currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [3][4] - Over the past week, HWKN shares increased by 2.36%, while the Zacks Chemical - Specialty industry rose by 2.56% [6] - In the last month, HWKN's shares rose by 11.02%, outperforming the industry's 1.83% [6] - Over the past quarter, HWKN shares increased by 3.88%, and over the last year, they surged by 54.74%, compared to the S&P 500's -6.91% and 13.12% respectively [7] Group 3: Trading Volume and Earnings Outlook - HWKN's average 20-day trading volume is 109,595 shares, which is a useful indicator of price movement and market interest [8] - In the past two months, one earnings estimate for HWKN increased, raising the consensus estimate from $4.00 to $4.01 [10] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions noted [10] Group 4: Conclusion - Given the positive momentum indicators and earnings outlook, HWKN is positioned as a strong buy and a promising investment opportunity [12]

Company Overview - Hawkins, Inc. is a leading water treatment and specialty ingredients company founded in 1938, headquartered in Roseville, Minnesota [2] - The company operates 63 facilities across 28 states and employs approximately 1,100 people [2] - In fiscal 2024, Hawkins, Inc. generated $919 million in revenue [2] Financial Results Announcement - Hawkins, Inc. is set to release its financial results for the fourth quarter and fiscal year ended March 30, 2025, after market close on May 14, 2025, at approximately 4:10 p.m. Eastern Time [1]

Core Viewpoint - Hawkins, Inc. has acquired the assets of WaterSurplus, enhancing its water treatment solutions and expanding its portfolio of value-added products, which aligns with its strategy to grow its higher-margin business [1][2][3] Financial Highlights - Hawkins generated $919 million in revenue for fiscal 2024 and anticipates its Water Treatment business to exceed $500 million in revenue in fiscal year 2026 [3][7] - WaterSurplus generated adjusted EBITDA of approximately $10 million for the fiscal year ending December 31, 2024 [6] - Hawkins closed on an amended $400 million revolving credit facility, increasing from $250 million, to fund the acquisition [6] Business Highlights - The acquisition of WaterSurplus is expected to be accretive to Hawkins' earnings per share in fiscal year 2027 and will improve the margin profile of Hawkins' current Water Treatment business [6] - Hawkins has completed 13 acquisitions over the last 5 years to build its Water Treatment business, indicating a strong integration capability [3] - WaterSurplus offers patented filtration products that reduce operational costs and enhance efficiency, which will complement Hawkins' existing offerings [9]

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 27, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-7647 HAWKINS, INC. (Exact name of registrant as specified in its charter) Minnesota 41-0771293 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Iden ...

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]