Financial Data and Key Metrics Changes - The company reported a solid performance in Q3 2025, with expectations to grow EPS by $1 to $2 in 2026, even in a flat demand environment [6][7]. - Working capital has been a source of cash amounting to $250 million this year, with expectations for free cash flow in 2026 to be at least $700-$800 million [35][37]. Business Line Data and Key Metrics Changes - In the engineered materials segment, consolidated volumes were down 8% year-over-year, primarily affecting engineered thermoplastics like POM and nylon, while thermoplastic elastomers showed resilience [17][28]. - Pricing pressures were noted in the acetyl chain, particularly in Europe, while stabilization was observed in China [15][16]. Market Data and Key Metrics Changes - The company is experiencing a lower demand base compared to historical levels, with no significant accelerated destocking observed across the board, although some pockets exist [31][33]. - The U.S. assets are running at high rates, with the potential for increased utilization if demand improves [85]. Company Strategy and Development Direction - The company is focused on increasing cash flow, improving cost efficiencies, and driving top-line growth, particularly through its EM pipeline [6][7]. - A divestiture target of $1 billion by the end of 2027 has been set, with the recent Micromax transaction contributing significantly towards this goal [51][52]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving EPS growth despite a challenging demand environment, emphasizing the importance of cost actions and pipeline success [6][7]. - The company is actively evaluating its portfolio for potential divestitures, particularly in areas that do not align with its core business strategies [50][51]. Other Important Information - The company announced a closure of the Narco facility, expected to yield $20 million-$30 million in productivity savings by 2027 [40]. - An impairment related to Zytel and nylon was recorded due to a reduction in market cap, not cash flow projections [69][70]. Q&A Session Summary Question: Early look at 2026 earnings control - Management highlighted priorities for 2026, focusing on cash flow, cost improvements, and top-line growth, with an EPS growth expectation of $1 to $2 [6][7]. Question: Operating rates in the acetyl chain - The lowest-cost assets are running at full capacity, while other assets are flexibly operated based on demand [11][12]. Question: Sequential pricing pressure in the acetyl chain - Pricing pressure has been noted in Europe, with stabilization in China and relative stability in the U.S. [15][16]. Question: Volume decline in engineered materials - The decline is mainly in engineered thermoplastics, while thermoplastic elastomers have shown growth [17][28]. Question: Free cash flow expectations for 2026 - Free cash flow is expected to be at least $700-$800 million, with working capital actions contributing to this [35][37]. Question: Divestiture strategy and portfolio actions - The company is committed to divesting non-core assets, with a target of $1 billion by 2027, and is actively pursuing additional divestitures [50][51]. Question: Impact of European acetate tow closure - Management indicated that the closure would not have ripple effects across the acetates network [98].

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]