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

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

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