Hawkins (HWKN) investor relations material

Executive summary

• Achieved record third quarter revenue of $244.1M, up 8% year-over-year, with strong growth in Water Treatment and Industrial Solutions, partially offset by a decline in Food & Health Sciences.

• Net income for the quarter was $14.3M, down from $15.0M in the prior year; year-to-date net income was $66.1M.

• Diluted EPS for the quarter was $0.69, with year-to-date EPS at $3.17.

• Marked 31 consecutive quarters of year-over-year operating income growth.

• Completed several acquisitions, including WaterSurplus for $149.9M, expanding Water Treatment capabilities.

Financial highlights

• Gross profit for the quarter was $50.8M (21% of sales), up 5% year-over-year; nine-month gross profit was $190.8M (23% of sales), up 10%.

• Adjusted EBITDA for the quarter was $34.8M, up 3% year-over-year; trailing 12-month adjusted EBITDA totaled $179M.

• Operating income for the quarter was $22.6M (9% of sales), up 7% year-over-year.

• Quarterly operating cash flow was $35.6M; year-to-date operating cash flow reached $106.6M.

• Interest expense increased due to higher borrowings for acquisitions.

Outlook and guidance

• Management expects the effective tax rate for the full year to be 26% to 27%.

• Targeting revenue growth of 15% or more and adjusted EBITDA margins of 20% or better.

• Expect continued impact on operating income and EPS from WaterSurplus acquisition for one more quarter, with accretive benefits anticipated in fiscal 2027.

• Cash balances, credit facility, and operating cash flows are expected to be sufficient to fund ongoing operations.

• Focus on expanding water treatment facilities, specialty services, and higher margin production.