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8-K - FORM 8-K - HAWKINS INCd247628d8k.htm

Exhibit 99

 

FOR IMMEDIATE RELEASE

  Contacts:   Patrick H. Hawkins
    Chief Executive Officer

October 26, 2011

    612/617-8524

Hawkins, Inc.

    Patrick.Hawkins@HawkinsInc.com

3100 East Hennepin Avenue

   

Minneapolis, MN 55413

    Kathleen P. Pepski
    Chief Financial Officer
    612/617-8571
    Kathleen.Pepski@HawkinsInc.com

HAWKINS, INC. REPORTS

SECOND QUARTER, FIRST HALF FISCAL 2012 RESULTS

Minneapolis, MN, October 26, 2011 — 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.

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HAWKINS, INC. REPORTS

RESULTS FOR FISCAL 2012

October 26, 2011

Page Two.

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.

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HAWKINS, INC. REPORTS

RESULTS FOR FISCAL 2012

October 26, 2011

Page Three.

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   
  

 

 

   

 

 

   

 

 

   

 

 

 

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