Hawkins Reports Record Q3 Revenue & Profit, EPS Down Due to Acquisition Costs
HWKN sits 56% above its 52-week low of $98.3.
Summary
Hawkins, Inc. announced record third-quarter revenue, gross profit, operating income, and adjusted EBITDA, driven by strong growth in its Water Treatment and Industrial Solutions segments, though diluted EPS decreased due to acquisition-related expenses.
Key Events · Earnings and Guidance · HWKN
-
Record Third Quarter Performance
Hawkins achieved record revenue of $244.1 million (up 8%), gross profit of $50.8 million (up 5%), operating income, and adjusted EBITDA of $34.8 million (up 3%) for the fiscal third quarter.
-
Mixed Segment Growth
The Water Treatment segment sales surged 21% and Industrial Solutions grew 10%, while the Food & Health Sciences segment experienced a 10% sales decline.
-
EPS Decline with Pro Forma Growth
Diluted EPS decreased 4% to $0.69, primarily due to approximately $5 million in acquisition-related amortization and interest expenses. However, pro forma EPS, adjusting for acquisition timing, would have been 10% higher.
-
Debt Reduction and Acquisitions
The company generated $35 million in operating cash flow, used to pay down $15 million of debt, reducing its leverage ratio below 1.5x. This quarter also saw the completion of the sixth acquisition in fiscal 2026.
Analysis · HWKN · Trade & Services
Hawkins, Inc.'s fiscal third-quarter results demonstrate robust top-line growth and strategic expansion through acquisitions, achieving record revenue, gross profit, operating income, and adjusted EBITDA. While diluted earnings per share saw a slight decrease, this was primarily attributed to increased amortization and interest expenses from recent acquisitions, with pro forma EPS showing a 10% increase. The company also significantly reduced debt, lowering its leverage ratio. The decline in the Food & Health Sciences segment presents a challenge, which management aims to address by returning to organic growth in fiscal 2027. Overall, the report indicates a company actively executing its growth strategy and managing its balance sheet effectively, despite some near-term impacts on GAAP earnings.
At the time of this filing, HWKN was trading at $153.75 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $3.2B. The 52-week trading range was $98.30 to $186.15. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.