Hawkins (HWKN) Q2 2027 earnings summary

Executive summary

• Q2 FY27 revenue rose 12% to $313.8M, including 11% organic growth; revenue, gross profit, net income, diluted EPS and adjusted EBITDA reached records.

• Operating income increased 23% to $41.9M and net income rose to $27.8M from $22.6M.

• All three segments grew; Water Treatment led, while fiscal 2027 acquisitions expanded its operations and Eagle Labs added Texas operations after quarter-end.

Financial highlights

• Q2 gross profit was $76.6M, up 13%; gross margin was 24.4% versus 24.1%, and SG&A was $34.7M versus $33.7M.

• Diluted EPS rose 23% to $1.34 from $1.08; adjusted EBITDA increased 16% to a record $59.1M from $50.9M.

• H1 revenue was $629.5M, net income $56.0M and operating cash flow $75.5M; H1 diluted EPS was $2.69 versus $2.48.

• H1 gross profit rose to $150.6M from $140.0M, while gross margin declined to 23.9% from 24.4%.

Outlook and guidance

• FY2027 effective tax rate is expected at 25%–27%; H1 rate was 27%, while Q2 was 30%, reflecting higher state taxes and nondeductible items.

• Management expects H2 trends to remain consistent with H1; comparisons face a $6.2M prior-year H2 SG&A reduction that will not recur.

• Cash, operating cash flows and available credit are expected to fund ongoing requirements; covenant compliance was maintained and is expected to continue over the next 12 months.

• Growth priorities include adding Water Treatment facilities, expanding specialty and value-added services, investing in higher-margin production, strengthening suppliers and developing a strong people culture.