Record Q1 Revenue of $315.7M for Hawkins, but Adjusted EBITDA Falls Short of Estimates
HWKN sits 17% above its 52-week low of $117.982.
Summary
Record Q1 revenue of $315.7M was overshadowed by an adjusted EBITDA miss at $56.9M as margins compressed. The quarter also saw $7M in stock buybacks and the $3.6M acquisition of Aqua-Chem.
Key Events · Earnings and Guidance · HWKN
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Record Q1 Revenue, EBITDA Miss
Revenue reached a record $315.7M (+8% YoY), but adjusted EBITDA of $56.9M missed consensus estimates as gross margin contracted to 23% from 25% a year ago.
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Margin Pressure from LIFO and Freight
Gross profit rose only 2% to $74.0M as a $1.9M LIFO reserve increase and $1.3M in unrecovered freight costs compressed margins, partially offsetting volume gains.
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Capital Allocation: Buybacks and M&A
The company repurchased $7.0M of stock and acquired water treatment distributor Aqua-Chem, Inc. for $3.6M, deploying free cash flow of $23.5M.
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Balance Sheet and Leverage
Total debt remained at $244.0M with a leverage ratio of 1.36x trailing adjusted EBITDA, essentially flat from fiscal year-end 2026.
Analysis · HWKN · Trade & Services
First-quarter revenue hit a record $315.7 million, an 8% year-over-year increase fueled by growth across all three segments. Yet adjusted EBITDA of $56.9 million came in below consensus, as LIFO and freight cost headwinds squeezed gross margins. Strong free cash flow of $23.5 million enabled the company to repurchase $7.0 million in stock and acquire Aqua-Chem for $3.6 million. The balance sheet remains solid with leverage at 1.36x, but the margin pressure and a 4% dip in EPS to $1.35 raise questions about near-term profitability trends.
At the time of this filing, HWKN was trading at $138.60 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $2.9B. The 52-week trading range was $117.98 to $186.15. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.