Hawkins (HWKN) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 FY25 revenue of $247.0M, up 4% year-over-year, driven by Water Treatment acquisitions.

• Diluted EPS for Q2 FY25 reached $1.16, a 5% increase over the prior year; YTD EPS at $2.54, up 14%.

• Net income for the quarter increased to $24.1M from $23.2M year-over-year; six-month net income was $53.0M, up from $46.6M.

• 26th consecutive quarter of year-over-year operating income growth; YTD operating income up 12% to $73.5M.

• Recent Water Treatment acquisitions contributed to growth, with $25.4M spent on two deals in the quarter.

Financial highlights

• Fiscal 2024 revenue was $919.2M, with a 14% CAGR since FY20; gross profit reached $193.6M, 18% CAGR.

• Gross profit for the quarter increased 12% to $60.2M (24% of sales); six-month gross profit up 18% to $124.9M.

• Operating cash flow for FY24 was $159.5M, up from $77.4M in FY23; Q2 FY25 operating cash flow was $41.6M, down 28% year-over-year.

• 25% EPS 5-year CAGR; 39 consecutive years of dividends with an 8.2% dividend CAGR.

• Interest expense increased to $1.4M for the quarter due to higher borrowings and rates.

Outlook and guidance

• Focus remains on expanding specialty/value-added services, new Water Treatment facilities, and higher-margin products.

• Continued focus on acquisitions to complement or expand existing businesses.

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