Hawkins, Inc. Reports Second Quarter, First Half Fiscal 2012 Results

Oct 26, 2011, 17:15 ET from Hawkins, Inc.

MINNEAPOLIS, Oct. 26, 2011 /PRNewswire/ -- Hawkins, Inc. (Nasdaq: HWKN) today announced second quarter and first half results for fiscal 2012. Sales of $87.9 million for the quarter ended October 2, 2011 represented an increase of 24.9% from $70.4 million in sales for the same period in the prior fiscal year. Net income for the second quarter of fiscal 2012 was $6.9 million, or $0.67 per share, fully diluted, compared to net income for the same period of fiscal 2011 of $6.8 million, or $0.66 per share, fully diluted.

For the six months ended October 2, 2011, Hawkins reported sales of $176.5 million, net income of $13.6 million and diluted earnings per share of $1.32 as compared to sales of $145.1 million, net income of $14.2 million and diluted earnings per share of $1.37 for the same period a year ago.

Chief Executive Officer, Patrick H. Hawkins, commented, "We are pleased to report solid second quarter results. Despite some headwinds, we were able to grow our business across most product lines, with our bulk volumes down somewhat compared to the prior year. As indicated last quarter, we are in a price-competitive environment which is pressuring our per unit margins. In addition, we experienced unfavorable weather conditions through August, which dampened our Water Treatment segment's results. We previously announced that we entered into an agreement to acquire property in the Twin Cities area. We expect to begin investing in a facility on that site with storage and blending capacity in the upcoming months. This facility will lessen our dependency on our current flood-prone sites and provide us with significantly more rail capacity and flexibility to serve our customers and be a strategic site for us as we grow our business in the future."

For the quarter, Industrial segment sales increased $16.4 million, or 36.5%, to $61.3 million as compared to the same period in the prior year. Vertex, which we acquired in the fourth quarter of fiscal 2011, contributed $10.5 million of the increase in sales during the second quarter of fiscal 2011. The remaining increase in sales was the result of higher selling prices across the majority of our product lines due to increased commodity chemical prices as well as higher manufactured and specialty chemical product sales volumes, partially offset by lower bulk chemical sales volumes. Water Treatment segment sales for the quarter were $26.5 million, a 3.9% increase over last year's second quarter sales of $25.5 million. The increase was primarily due to increased sales of manufactured and specialty chemical products partially offset by lower bulk chemical sales volumes. Unfavorable weather conditions negatively impacted the segment's sales performance this quarter.

Company-wide gross profit for the quarter was $18.8 million, or 21.3% of sales, compared to $17.7 million, or 25.2% of sales, for the same period in fiscal 2011. Gross profit for the Industrial segment was $10.9 million, or 17.7% of sales, for the quarter ended October 2, 2011, as compared to $9.6 million, or 21.4% of sales, for the same period in fiscal 2011. The increase in gross profit dollars resulted from the addition of the Vertex business to this segment, offset by pricing pressure. Gross profit for the Water Treatment segment was $7.9 million, or 29.8% of sales, for the quarter, as compared to $8.2 million, or 32.2% of sales, for the same period in fiscal 2011. The decrease in gross profit dollars was primarily due to competitive pricing pressures and unfavorable weather conditions.  

Company-wide gross profit for the six months ended October 2, 2011 was $36.7 million, or 20.8% of sales, as compared to $36.2 million, or 24.9% of sales for the same period in the prior fiscal year. Gross profit for the Industrial segment was $21.6 million, or 17.3% of sales, for the six months, compared to $19.9 million or 21.0% of sales in the same period a year ago. The increase in gross profit dollars resulted from the addition of the Vertex business to this segment, offset by pricing pressure.   Gross profit for the Water Treatment segment was $15.1 million, or 29.3% of sales, for the six months compared to $16.3 million, or 32.3% of sales, in the same period a year ago. The Water Treatment segment's gross profit decrease was primarily due to competitive pricing pressures and lower sales volumes because of unfavorable weather conditions.

Selling, general, and administrative expenses increased $1.0 million, or 14.7%, for the quarter and $2.2 million, or 16.3% for the six months, as compared to the same periods in the prior fiscal year. The increases were primarily due to the addition of expenses related to the Vertex business, which we acquired 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.

http://www.hawkinsinc.com

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended

Six Months Ended

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

October 2,

September 30,

October 2,

September 30,

2011

2010

2011

2010

Sales

$

87,870

$

70,398

$

176,464

$

145,064

Cost of sales

(69,120)

(52,656)

(139,787)

(108,874)

Gross profit

18,750

17,742

36,677

36,190

Selling, general and administrative expenses

(7,844)

(6,814)

(15,701)

(13,475)

Operating income

10,906

10,928

20,976

22,715

Investment income

28

96

93

201

Income from continuing operations before income taxes

10,934

11,024

21,069

22,916

Provision for income taxes

(4,217)

(4,192)

(7,998)

(8,747)

Income from continuing operations

6,717

6,832

13,071

14,169

Income from discontinued operations, net of tax

184

-

557

-

Net income

$

6,901

$

6,832

$

13,628

$

14,169

Weighted average number of shares outstanding-basic

10,322,768

10,257,175

10,314,973

10,255,297

Weighted average number of shares outstanding-diluted

10,365,372

10,332,764

10,362,847

10,321,355

Basic earnings per share

Earnings per share from continuing operations

$

0.65

$

0.67

$

1.27

$

1.38

Earnings per share from discontinued operations

0.02

-

0.05

-

Basic earnings per share

$

0.67

$

0.67

$

1.32

$

1.38

Diluted earnings per share

Earnings per share from continuing operations

$

0.65

$

0.66

$

1.27

$

1.37

Earnings per share from discontinued operations

0.02

-

0.05

-

Diluted earnings per share

$

0.67

$

0.66

$

1.32

$

1.37

Cash dividends declared per common share

$

0.32

$

0.40

$

0.32

$

0.40

SOURCE Hawkins, Inc.



RELATED LINKS

http://www.hawkinsinc.com