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Hawkins, Inc. Reports Third Quarter, Nine Months Fiscal 2011 Results

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MINNEAPOLIS, Jan. 26, 2011 /PRNewswire/ -- Hawkins, Inc. (Nasdaq: HWKN) today announced third quarter and nine months results for fiscal 2011. Sales of $70.6 million for the quarter ended December 31, 2010 represented an increase of 16.5% from $60.6 million in sales for the same period in the prior fiscal year. Net income for the quarter was $4.3 million, or $0.41 per share, fully diluted, compared to net income of $5.6 million, or $0.54 per share, fully diluted for the same period of fiscal 2010.

For the nine months ended December 31, 2010, Hawkins reported sales of $215.7 million, net income of $18.4 million and diluted earnings per share of $1.78 as compared to sales of $199.2 million, net income of $18.3 million and diluted earnings per share of $1.78 for the same period a year ago.

Chief Executive Officer, John R. Hawkins, commented, "We turned in a strong sales performance again this quarter across most product lines.  However, profits for both of our segments were down from last year's third quarter due to lower profits per unit sold.  Competitive pricing pressures, coupled with our investment in operational infrastructure to support growth negatively affected profit levels for both segments.  We expect the competitive pricing conditions to continue for the remainder of our fiscal year.  However, we continue to strive to maintain and grow our market share while meeting competitive prices." John Hawkins continued, "We closed the Vertex Chemical acquisition on January 14 and are very excited about the opportunities this complementary business and facilities will bring to Hawkins as we leverage our broad product offerings into the Vertex market."

For the quarter ended December 31, 2010, Industrial segment sales increased $8.9 million, or 21.1%, to $51.3 million as compared to the same period in the prior year, with the increase primarily driven by higher selling prices and increased sales of manufactured and specialty chemical products. Water Treatment segment sales for the quarter ended December 31, 2010 were $19.3 million, a 5.5% increase over last year's third quarter sales of $18.3 million. The increase was primarily due to increased sales of manufactured and specialty chemical products.

Company-wide gross profit for the quarter ended December 31, 2010 was $13.7 million, or 19.4% of sales, compared to $15.9 million, or 26.2% of sales, for the same period in fiscal 2010. Gross profit for the Industrial segment was $8.6 million, or 16.8% of sales, for the quarter, as compared to $10.1 million, or 23.9% of sales, for the same period in fiscal 2010.  Gross profit for the Water Treatment segment was $5.1 million, or 26.4% of sales, for the quarter, as compared to $5.7 million, or 31.3% of sales, for the same period in fiscal 2010. The decrease in gross profit dollars for both segments was primarily due to competitive pricing pressures and higher operational and infrastructure costs, partially offset by increased sales.  

Gross profit for the nine months ended December 31, 2010 was $49.9 million, or 23.1% of sales, as compared to $49.1 million, or 24.7% of sales for the same period in the prior fiscal year.  Gross profit for the Industrial segment was $28.5 million, or 19.6% of sales, for the nine months, compared to $27.4 million or 20.5% of sales in the same period a year ago.  The increase in gross profit dollars for this segment in the first nine months of fiscal 2011 was attributable to increased sales of manufactured and specialty chemicals, partially offset by competitive pricing pressures and higher operational and infrastructure expenses.  Gross profit for the Water Treatment segment was $21.4 million, or 30.7% of sales, for the nine months compared to $21.7 million, or 33.1% 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 increased overhead costs from investments in new facilities and personnel within existing and new markets to support growth in this segment, partially offset by increased sales of manufactured and specialty chemical products.

Selling, general, and administrative expenses increased $0.5 million, or 6.9%, for the quarter and $1.0 million, or 5.2% for the nine months, as compared to the same periods in the prior fiscal year. The increases were primarily a result of higher equity incentive plan costs and costs related to the Vertex acquisition.

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.

HAWKINS, INC.

CONDENSED STATEMENTS OF INCOME (UNAUDITED)
















Three Months Ended


Nine Months Ended



December 31,


December 31,

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

2010


2009


2010


2009














Sales

$

70,620


$

60,627


$

215,684


$

199,189














Cost of sales


(56,894)



(44,772)



(165,768)



(150,062)














Gross profit


13,726



15,855



49,916



49,127














Selling, general and administrative expenses


(6,893)



(6,447)



(20,368)



(19,370)














Operating income


6,833



9,408



29,548



29,757














Investment income


71



99



272



188














Income from continuing operations before income taxes


6,904



9,507



29,820



29,945














Provision for income taxes


(2,650)



(3,912)



(11,397)



(11,741)














Income from continuing operations


4,254



5,595



18,423



18,204














Income from discontinued operations, net of tax


-



-



-



109














Net income

$

4,254


$

5,595


$

18,423


$

18,313














Weighted average number of shares













outstanding-basic


10,259,458



10,253,458



10,256,674



10,250,198














Weighted average number of shares













outstanding-diluted


10,355,888



10,283,206



10,336,169



10,279,417














Basic earnings per share













Earnings per share from continuing operations

$

0.41


$

0.55


$

1.80


$

1.78


Earnings per share from discontinued operations


-



-



-



0.01


Basic earnings per share

$

0.41


$

0.55


$

1.80


$

1.79














Diluted earnings per share













Earnings per share from continuing operations

$

0.41


$

0.54


$

1.78


$

1.77


Earnings per share from discontinued operations


-



-



-



0.01


Diluted earnings per share

$

0.41


$

0.54


$

1.78


$

1.78














Cash dividends declared per common share

$

-


$

-


$

0.40


$

0.38



SOURCE Hawkins, Inc.



RELATED LINKS
http://www.hawkinsinc.com

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