Hawkins, Inc. Reports Fourth Quarter and Fiscal Year 2022 Results
Hawkins, Inc. (Nasdaq: HWKN) reported record fourth-quarter and full-year results for fiscal 2022, with quarterly sales of $223 million, a 37% year-over-year increase. The company achieved a gross profit of $36.3 million, reflecting a 14% increase, and diluted EPS of $0.50, up 16% from last year. For the full year, Hawkins generated annual sales of $774.5 million, an 18% gross profit increase, and diluted EPS of $2.44. The firm completed three acquisitions in the year and issued a second ESG report, aiming for carbon neutrality by 2040.
- Record quarterly sales of $223 million, 37% increase year-over-year.
- Record full-year sales of $774.5 million, 30% increase year-over-year.
- Diluted EPS of $0.50 for Q4, up 16%; full-year EPS of $2.44, 26% higher.
- Accomplished a record adjusted EBITDA of $99.7 million, up 19% year-over-year.
- Paid an annual cash dividend of $0.5225 per share, an 11% increase.
- Gross profit margin decreased to 19% from 21% due to rising input costs.
- Selling, general, and administrative expenses rose to $75.3 million, representing 10% of sales.
ROSEVILLE, Minn., May 18, 2022 (GLOBE NEWSWIRE) -- Hawkins, Inc. (Nasdaq: HWKN), a leading specialty chemical and ingredients company, today announced fourth quarter and full-year results for its fiscal year ended April 3, 2022.
Fourth Quarter Fiscal Year 2022 Highlights:
- Record quarterly sales in the fourth quarter of
$223.0 million , a37% year-over-year increase. - Gross profit of
$36.3 million for the quarter, a14% increase over the same period of the prior year, while absorbing$8.2 million in incremental LIFO expense in the quarter. - Record fourth quarter diluted earnings per share (EPS) of
$0.50 , which was16% higher than the same period of the prior year. - Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA), a non-GAAP measure, of
$22.3 million , an11% increase over the same period of the prior year.
Full-Year Fiscal Year 2022 Highlights:
- Record annual sales of
$774.5 million for fiscal 2022, a30% year-over-year increase. - Record gross profit of
$146.5 million for the year, an18% increase over the prior year, which contributed to a27% year-over-year increase in operating income. - Record diluted EPS of
$2.44 , which was$0.51 , or26% , higher than fiscal 2021. - Record adjusted EBITDA, a non-GAAP measure, of
$99.7 million , an increase of19% over fiscal 2021. - Full year net income increased
26% over the prior year. - Paid cash dividends of
$0.52 25 per share for the year, representing an increase of11% over the prior year. This marks the 37th consecutive year of paying a dividend. - Completed three acquisitions during the year.
- Ended the year with net debt of
$123 million and a leverage ratio of 1.25x. - Issued our second annual ESG report, with a goal of being carbon neutral by 2040.
Executive Commentary – Patrick H. Hawkins, Chief Executive Officer and President:
“For the third year in a row we generated record operating income, net income, diluted EPS, and adjusted EBITDA, while achieving record sales of
Mr. Hawkins, continued, “We had
Fourth Quarter and Fiscal Year Financial Highlights:
NET INCOME
For the fourth quarter of fiscal 2022, the Company reported net income of
For the full year, the Company reported record net income of
REVENUE
For the fourth quarter of fiscal 2022, sales were
For fiscal 2022, Industrial segment sales were
GROSS PROFIT
Company-wide gross profit for fiscal 2022 increased
Gross profit for the Industrial segment increased
Gross profit for the Water Treatment segment increased
Gross profit for the Health and Nutrition segment decreased
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("SG&A") expenses increased to
ADJUSTED EBITDA
Adjusted EBITDA, a non-GAAP financial measure, is an important performance indicator and a key compliance measure under the terms of our credit agreement. An explanation of the computation of adjusted EBITDA is presented below. Adjusted EBITDA for the three months ended April 3, 2022 was
Our effective income tax rate was relatively flat at approximately
About Hawkins, Inc.
Hawkins, Inc. was founded in 1938 and is a leading specialty chemical and ingredients company that formulates, distributes, blends and manufactures products for its Industrial, Water Treatment, and Health & Nutrition customers. Headquartered in Roseville, Minnesota, and with 49 facilities in 24 states, the Company creates value for its customers through superb customer service and support, quality products and personalized applications. Hawkins, Inc. generated
Reconciliation of Non-GAAP Financial Measures
We report our consolidated financial results in accordance with U.S. generally accepted accounting principles (GAAP). To assist investors in understanding our financial performance between periods, we have provided certain financial measures not computed according to GAAP, including adjusted EBITDA. This non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies.
Management uses this non-GAAP financial measure internally to understand, manage and evaluate our business and to make operating decisions. Management believes that this non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provides a more complete understanding of the factors and trends affecting our financial condition and results of operations.
We define adjusted EBITDA as GAAP net income adjusted for the impact of the following: net interest expense resulting from our net borrowing position; income tax expense; non-cash expenses including amortization of intangibles, depreciation, and charges for the employee stock purchase plan and restricted stock grants; and non-recurring items of income or expense, if applicable.
Adjusted EBITDA | Three Months Ended | Fiscal Year Ended | |||||||||
(In thousands) | April 3, 2022 | March 28, 2021 | April 3, 2022 | March 28, 2021 | |||||||
Net income (GAAP) | $ | 10,577 | $ | 9,081 | $ | 51,542 | $ | 40,980 | |||
Interest expense | 409 | 366 | 1,404 | 1,467 | |||||||
Income tax expense | 3,864 | 3,586 | 18,437 | 14,871 | |||||||
Amortization of intangibles | 1,758 | 1,602 | 6,462 | 5,839 | |||||||
Depreciation expense | 4,512 | 4,331 | 17,667 | 16,829 | |||||||
Non-cash compensation expense | 1,111 | 1,040 | 3,818 | 3,343 | |||||||
Non-recurring acquisition expense | 73 | 54 | 369 | 562 | |||||||
Adjusted EBITDA | $ | 22,304 | $ | 20,060 | $ | 99,699 | $ | 83,891 |
HAWKINS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except share and per-share data)
Three Months Ended | Fiscal Year Ended | |||||||||||||||
April 3, 2022 | March 28, 2021 | April 3, 2022 | March 28, 2021 | |||||||||||||
(unaudited) | ||||||||||||||||
Sales | $ | 222,973 | $ | 162,971 | $ | 774,541 | $ | 596,871 | ||||||||
Cost of sales | (186,654 | ) | (131,221 | ) | (628,021 | ) | (473,109 | ) | ||||||||
Gross profit | 36,319 | 31,750 | 146,520 | 123,762 | ||||||||||||
Selling, general and administrative expenses | (21,110 | ) | (18,875 | ) | (75,326 | ) | (67,884 | ) | ||||||||
Operating income | 15,209 | 12,875 | 71,194 | 55,878 | ||||||||||||
Interest expense, net | (409 | ) | (366 | ) | (1,404 | ) | (1,467 | ) | ||||||||
Other income (expense) | (359 | ) | 158 | 189 | 1,440 | |||||||||||
Income before income taxes | 14,441 | 12,667 | 69,979 | 55,851 | ||||||||||||
Income tax expense | (3,864 | ) | (3,586 | ) | (18,437 | ) | (14,871 | ) | ||||||||
Net income | $ | 10,577 | $ | 9,081 | $ | 51,542 | $ | 40,980 | ||||||||
Weighted average number of shares outstanding-basic | 20,887,460 | 20,968,248 | 20,947,234 | 21,024,344 | ||||||||||||
Weighted average number of shares outstanding-diluted | 21,078,783 | 21,194,455 | 21,135,258 | 21,260,296 | ||||||||||||
Basic earnings per share | $ | 0.51 | $ | 0.43 | $ | 2.46 | $ | 1.95 | ||||||||
Diluted earnings per share | $ | 0.50 | $ | 0.43 | $ | 2.44 | $ | 1.93 |
HAWKINS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per-share data)
April 3, 2022 | March 28, 2021 | |||||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | 3,496 | $ | 2,998 | ||
Trade accounts receivables, net | 122,826 | 90,603 | ||||
Inventories | 94,985 | 63,864 | ||||
Prepaid expenses and other current assets | 6,431 | 5,542 | ||||
Total current assets | 227,738 | 163,007 | ||||
PROPERTY, PLANT, AND EQUIPMENT: | ||||||
Land | 16,640 | 15,235 | ||||
Buildings and improvements | 118,369 | 120,410 | ||||
Machinery and equipment | 114,763 | 109,353 | ||||
Transportation equipment | 43,968 | 37,646 | ||||
Office furniture and equipment | 10,315 | 17,760 | ||||
304,055 | 300,404 | |||||
Less accumulated depreciation | 142,209 | 155,792 | ||||
Net property, plant, and equipment | 161,846 | 144,612 | ||||
OTHER ASSETS: | ||||||
Right-of-use assets | 10,606 | 11,630 | ||||
Goodwill | 77,401 | 70,720 | ||||
Intangible assets, net | 80,193 | 76,368 | ||||
Deferred compensation plan asset | 6,783 | 5,726 | ||||
Other | 2,761 | 487 | ||||
Total other assets | 177,744 | 164,931 | ||||
Total assets | $ | 567,328 | $ | 472,550 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Accounts payable — trade | $ | 66,693 | $ | 37,313 | ||
Accrued payroll and employee benefits | 19,034 | 18,048 | ||||
Current portion of long-term debt | 9,913 | 9,907 | ||||
Short-term lease liability | 1,657 | 1,587 | ||||
Container deposits | 1,558 | 1,452 | ||||
Other current liabilities | 2,611 | 2,155 | ||||
Total current liabilities | 101,466 | 70,462 | ||||
LONG-TERM DEBT, LESS CURRENT PORTION | 115,644 | 88,845 | ||||
LONG-TERM LEASE LIABILITY | 9,143 | 10,231 | ||||
PENSION WITHDRAWAL LIABILITY | 4,276 | 4,631 | ||||
DEFERRED COMPENSATION LIABILITY | 8,402 | 7,322 | ||||
DEFERRED INCOME TAXES | 23,422 | 24,445 | ||||
OTHER LONG-TERM LIABILITIES | 2,374 | 1,368 | ||||
Total liabilities | 264,727 | 207,304 | ||||
COMMITMENTS AND CONTINGENCIES | — | — | ||||
SHAREHOLDERS’ EQUITY: | ||||||
Common shares; authorized: 60,000,000 shares of | 209 | 210 | ||||
Additional paid-in capital | 46,717 | 51,138 | ||||
Retained earnings | 254,384 | 213,898 | ||||
Accumulated other comprehensive income | 1,291 | — | ||||
Total shareholders’ equity | 302,601 | 265,246 | ||||
Total liabilities and shareholders’ equity | $ | 567,328 | $ | 472,550 |
HAWKINS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Fiscal Year Ended | ||||||||
April 3, 2022 | March 28, 2021 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 51,542 | $ | 40,980 | ||||
Reconciliation to cash flows: | ||||||||
Depreciation and amortization | 24,129 | 22,669 | ||||||
Operating leases | 1,899 | 1,896 | ||||||
Gain on deferred compensation assets | (189 | ) | (1,440 | ) | ||||
Deferred income taxes | (1,501 | ) | (689 | ) | ||||
Stock compensation expense | 3,818 | 3,343 | ||||||
Other | 545 | 203 | ||||||
Changes in operating accounts (using) providing cash, net of acquisitions: | ||||||||
Trade receivables | (30,526 | ) | (21,323 | ) | ||||
Inventories | (30,034 | ) | (7,960 | ) | ||||
Accounts payable | 25,138 | 2,551 | ||||||
Accrued liabilities | 2,723 | 7,554 | ||||||
Lease liabilities | (1,907 | ) | (1,837 | ) | ||||
Income taxes | 214 | (235 | ) | |||||
Other | (3,014 | ) | (1,919 | ) | ||||
Net cash provided by operating activities | 42,837 | 43,793 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Additions to property, plant, and equipment | (28,512 | ) | (20,794 | ) | ||||
Acquisitions | (21,546 | ) | (51,000 | ) | ||||
Other | 302 | 362 | ||||||
Net cash used in investing activities | (49,756 | ) | (71,432 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Cash dividends paid | (11,056 | ) | (10,029 | ) | ||||
New shares issued | 1,772 | 1,583 | ||||||
Shares surrendered for payroll taxes | (1,467 | ) | (54 | ) | ||||
Shares repurchased | (8,545 | ) | (4,140 | ) | ||||
Payments for debt issuance costs | (287 | ) | — | |||||
Payments on senior secured revolving loan | (15,000 | ) | (37,000 | ) | ||||
Borrowings on senior secured revolving loan | 42,000 | 76,000 | ||||||
Net cash provided by financing activities | 7,417 | 26,360 | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 498 | (1,279 | ) | |||||
CASH AND CASH EQUIVALENTS - beginning of year | 2,998 | 4,277 | ||||||
CASH AND CASH EQUIVALENTS - end of year | $ | 3,496 | $ | 2,998 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION- | ||||||||
Cash paid during the year for income taxes | $ | 19,726 | $ | 15,783 | ||||
Cash paid for interest | 1,197 | 1,288 | ||||||
Noncash investing activities - Capital expenditures in accounts payable | 3,733 | 626 |
HAWKINS, INC.
REPORTABLE SEGMENTS (UNAUDITED)
(In thousands)
Industrial | Water Treatment | Health and Nutrition | Total | |||||||||
Fiscal Year Ended April 3, 2022: | ||||||||||||
Sales | $ | 386,938 | $ | 228,133 | $ | 159,470 | $ | 774,541 | ||||
Gross profit | 59,606 | 54,571 | 32,343 | 146,520 | ||||||||
Selling, general, and administrative expenses | 28,127 | 31,357 | 15,842 | 75,326 | ||||||||
Operating income | 31,479 | 23,214 | 16,501 | 71,194 | ||||||||
Fiscal Year Ended March 28, 2021: | ||||||||||||
Sales | $ | 273,361 | $ | 170,004 | $ | 153,506 | $ | 596,871 | ||||
Gross profit | 43,337 | 46,793 | 33,632 | 123,762 | ||||||||
Selling, general, and administrative expenses | 27,033 | 24,453 | 16,398 | 67,884 | ||||||||
Operating income (loss) | 16,304 | 22,340 | 17,234 | 55,878 |
Forward-Looking Statements. Various remarks in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include those relating to consumer demand for products containing our ingredients and the impacts of those demands, expectations for results in our business segments and the timing of our filings with the Securities and Exchange Commission. These statements are not historical facts, but rather are based on our current expectations, estimates and projections, and our beliefs and assumptions. Forward-looking statements may be identified by terms, including “anticipate,” “believe,” “can,” “could,” “expect,” “intend,” “may,” “predict,” “should,” or “will” or the negative of these terms or other comparable terms. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Actual results may vary materially from those contained in forward looking statements based on a number of factors, including, but not limited to, changes in regulation, availability of technological improvements, the impact and severity of the COVID-19 outbreak, changes in the labor markets, our available cash for investments, changes in competition and price pressures, changes in demand and customer requirements or processes for our products, availability of product and disruptions to supplies, interruptions in production resulting from hazards, transportation limitations or other extraordinary events outside our control that may negatively impact our business or the supply chains in which we participate, changes in imported products and tariff levels, the availability of products and the prices at which they are available, the acceptance of new products by our customers and the timing of any such acceptance, and changes in product supplies. Additional information concerning potential factors that could affect future financial results is included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2021, as updated from time to time in amendments and subsequent reports filed with the SEC. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date hereof. We do not undertake any obligation to update any forward-looking statements.
Contacts: | Jeffrey P. Oldenkamp |
Executive Vice President and Chief Financial Officer | |
612/331-6910 | |
ir@HawkinsInc.com |
FAQ
What were Hawkins, Inc.'s fourth quarter results for fiscal 2022?
How did Hawkins, Inc. perform for the full year fiscal 2022?
What is Hawkins, Inc.'s adjusted EBITDA for fiscal 2022?
What is the recent dividend amount paid by Hawkins, Inc.?