Hawkins Posts Quarterly Revenue of $313.8 Million, Up 12% in Second Quarter

Key Facts

Hawkins reported results after the market closed on October 26 for the second quarter of fiscal 2027, the three months ended September 27, posting revenue of $313.8 million. Sales rose 12% from $280.4 million in the year-earlier period, while organic growth was 11%. Acquired businesses added about $3.7 million to quarterly sales. Revenue topped the pre-announcement estimate of $302.70 million, while actual earnings per share of $1.34 exceeded the published estimate of $1.19. CEO Patrick Hawkins said all three segments grew, while gross profit rose 13% and diluted earnings per share increased 23%.

Water treatment was the largest growth driver, with sales up 16% to $175.0 million from $150.9 million a year earlier. The segment’s organic sales growth was 14%, driven mainly by higher volumes and improved pricing on some products. The company said growth spanned multiple product lines and end markets, with particular strength in municipal demand. Segment gross profit rose 20%, according to Hawkins, who attributed the improvement to higher volumes and increased gross profit dollars per unit. This performance helped lift the company’s overall gross profit 13% during the quarter. Hawkins said revenue growth “included 11% organic growth, with growth across all three segments.”

In the Food and Health Sciences segment, sales rose 5% to $76.7 million, an increase of $3.8 million from the year-earlier period. The company attributed the increase to higher volumes of nutrition products, food ingredients and pharmaceutical products, partly offset by lower agricultural product sales. Industrial Solutions sales rose 10% year over year to $62.2 million. The company said the segment’s growth came from pricing and product mix, despite lower volumes. All three segments thus joined Water Treatment in posting annual growth, though the sources of the increases varied among volume, pricing and sales mix.

Profitability metrics improved alongside sales growth: adjusted EBITDA, a non-GAAP measure, was $59.1 million, up 16% year over year. Net income for the twelve months ended September 27 was also $85.8 million. Meanwhile, the quarterly effective income tax rate rose to 30% from 27% a year earlier. The company attributed this mainly to higher state taxes and an increase in nondeductible items, and expects the full-year effective rate to range between 25% and 27%. Hawkins posted the results in a quarter when diluted earnings per share grew 23%, according to the CEO’s remarks.

On liquidity, operating cash flow was $75.5 million for the six months ended September 27, up 6%, while free cash flow rose 14% to $53.1 million from the year-earlier period. The company allocated free cash flow to $18.6 million in share repurchases, repayment of $15.0 million in debt and $8.1 million in dividends. Leverage fell to 1.22 times trailing 12-month adjusted EBITDA at quarter-end. The ratio was 1.37 times at the end of fiscal 2026 and 1.54 times in the year-earlier period. The company said the lower ratio reflected an improvement from both earlier levels.

The company continued to expand through acquisitions, completing its purchase of Dave Symonds & Associates during the quarter. After the period ended, Hawkins closed its acquisition of Eagle Labs, which adds two locations in the Dallas–Fort Worth area. These moves came alongside acquired businesses’ contribution of about $3.7 million to quarterly sales. Regarding operating expectations, management said it expects trends in the second half of fiscal 2027 to be consistent with those seen in the first half. It noted, however, that selling, general and administrative expenses in the second half of fiscal 2026 benefited from a one-time reduction of $6.2 million, which will not recur in the second half of fiscal 2027. That prior reduction therefore factors into the comparison between the periods presented by management when describing its outlook.

Before the results, HWKN shares closed at $132.32 on October 23, according to EL7 data, ahead of the company’s announcement after the market closed on October 26. That price does not reflect the share’s movement after the results were released. Published pre-announcement estimates put earnings per share at $1.19 and revenue at $302.70 million, compared with actual results of $1.34 and $313.8 million. The next step identified by the company in its statement is to track the second half of fiscal 2027, whose expected trends it said align with the first half, while the one-time expense reduction will not recur. The company also expects a full-year effective tax rate between 25% and 27%.