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Hawkins, Inc. Reports First Quarter Fiscal 2012 Results

MINNEAPOLIS, Aug. 1, 2011 /PRNewswire/ -- Hawkins, Inc. (Nasdaq: HWKN) today announced results for its fiscal 2012 first quarter ended July 3, 2011. Sales of $88.6 million in the period represented an increase of 18.7% from $74.7 million in sales for the first quarter of fiscal 2011. Vertex, which the Company acquired in the fourth quarter of fiscal 2011, contributed approximately $11.0 million of the increase in sales for the period.

Net income for the quarter was $6.7 million, or $0.65 per share, fully diluted, compared to net income of $7.3 million or $0.71 per share, fully diluted, for the first quarter of fiscal 2011.

Chief Executive Officer and President, Patrick H. Hawkins, commented, "In addition to the competitive pricing pressures we have discussed before, we experienced unfavorable weather conditions that negatively impacted our sales volumes this past quarter.  The weather was unseasonably cold and wet, with floods occurring within several of our primary sales regions.  These conditions led to reduced demand, primarily for water treatment and agricultural chemical applications.  Despite these difficult conditions, we continue to focus on serving our customers and growing our market share and grew our sales volumes in the Water Treatment Group.  We are also working to identify investments that will support new product applications, provide additional storage and service capability, or allow us to move into a new geography.  We opened a Water Treatment branch office on Vertex's site in Memphis, Tennessee, this quarter and we have entered into an agreement to acquire a parcel of property in the Twin Cities area.  This new site would give us room to grow and reduce our dependency on our flood-prone sites along the Mississippi River.  We are delighted to have found this expansion site and expect to close on the land purchase in the upcoming quarter, with construction of a new facility commencing shortly thereafter."  

For the quarter ended July 3, 2011, Industrial segment sales were $63.6 million, an increase of 27.6% from sales of $49.8 million during the quarter ended June 30, 2010. The acquisition of Vertex during the fourth quarter of fiscal 2011 contributed approximately $11.0 million of the increase in sales during the first quarter of fiscal 2012. The remaining increase in sales for the Industrial segment was the result of higher selling prices for bulk chemicals due to increased commodity chemical prices, partially offset by lower bulk chemical sales volumes.  Water Treatment segment sales for the first quarter of fiscal 2012 were $25.0 million, relatively unchanged from the first quarter fiscal 2011 sales of $24.9 million.  Despite adverse weather conditions, the segment’s sales performance was positively impacted by increased sales across all product lines, largely offset by lower selling prices due to competitive pricing pressures.

Company-wide gross profit for the first quarter of fiscal 2012 was $17.9 million, or 20.2% of sales, compared to $18.4 million, or 24.7% of sales, for the first quarter of fiscal 2011.  Gross profit for the Industrial segment was $10.7 million, or 16.9% of sales, for the quarter ended July 3, 2011, as compared to $10.3 million, or 20.8% of sales, for the quarter ended June 30, 2010.  Lower per-unit profits resulting from competitive pricing pressures across all product lines largely offset the impact of adding Vertex's business to this segment.  Gross profit for the Water Treatment segment was $7.2 million, or 28.8% of sales, for the quarter ended July 3, 2011, as compared to $8.1 million, or 32.6% of sales, for the quarter ended June 30, 2010.  The decrease in gross profit was primarily due to competitive pricing pressures, partially offset by increased sales across all product lines.

Selling, general and administration (SG&A) expenses increased by $1.2 million during the first quarter of fiscal 2012 compared to the first quarter of fiscal 2011.  The increase in SG&A expenses was primarily due to the acquisition of Vertex during the fourth quarter of fiscal 2011.

Hawkins, Inc. distributes, blends and manufactures bulk and specialty chemicals for its customers in a wide variety of industries.  Headquartered in Minneapolis, Minnesota, and with 25 facilities in 13 states, the Company creates value for its customers through superb customer service and support, quality products and personalized applications.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except share and per-share data)



Quarter Ended



July 3, 2011


June 30, 2010








Sales

$

88,594


$

74,665








Cost of sales


(70,667)



(56,218)








Gross profit


17,927



18,447








Selling, general and administrative expenses


(7,857)



(6,661)








Operating income


10,070



11,786








Investment income


65



106








Income from continuing operations before income taxes


10,135



11,892








Provision for income taxes


(3,782)



(4,555)








Income from continuing operations


6,353



7,337








Income from discontinued operations, net of tax


374



-








Net income

$

6,727


$

7,337








Weighted average number of shares outstanding-basic


10,307,177



10,253,458








Weighted average number of shares outstanding-diluted


10,362,172



10,308,270








Basic earnings per share







Earnings per share from continuing operations

$

0.61


$

0.72


Earnings per share from discontinued operations


0.04



-


Basic earnings per share

$

0.65


$

0.72








Diluted earnings per share







Earnings per share from continuing operations

$

0.61


$

0.71


Earnings per share from discontinued operations


0.04



-


Diluted earnings per share

$

0.65


$

0.71








Cash dividends declared per common share

$

-


$

-



SOURCE Hawkins, Inc.



RELATED LINKS
http://www.hawkinsinc.com

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