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Form 8-K HAWKINS INC For: Oct 28

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October 28, 2015 5:12 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 28, 2015
 
 
Hawkins, Inc.
(Exact name of registrant as specified in its charter)
 
Minnesota
 
0-7647
 
41-0771293
(State of Incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
 
 
2381 Rosegate
 Roseville, MN
 
55413
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s Telephone Number, Including Area Code (612) 331-6910
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02. Results of Operations and Financial Condition.
On October 28, 2015, Hawkins, Inc. issued a press release announcing financial results for its fiscal 2016 second quarter ended September 27, 2015. A copy of the press release issued by the Registrant is furnished herewith as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.
(d)
Exhibit.
Exhibit 99.1—Press Release, dated October 28, 2015, announcing financial results of Hawkins, Inc. for its fiscal 2016 second quarter ended September 27, 2015.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
HAWKINS, INC.
 
 
 
Date: October 28, 2015
 
By:
 
/s/ Kathleen P. Pepski
 
 
 
 
Kathleen P. Pepski
 
 
 
 
Vice President, Chief Financial Officer, and Treasurer





Index to Exhibits
 
Exhibit No.
  
Description
  
Method of Filing
 
 
 
99.1

  
Press Release, dated October 28, 2015, announcing financial results of Hawkins, Inc. for its fiscal 2016 second quarter ended September 27, 2015.
  
Electronic
Transmission





 
 
 
Exhibit 99.1
FOR IMMEDIATE RELEASE
 
Contacts:
Patrick H. Hawkins
October 28, 2015
 
 
Chief Executive Officer
Hawkins, Inc.
 
 
612/617-8524
2381 Rosegate
 
 
Roseville, MN 55113
 
 
 
 
 
 
Kathleen P. Pepski
 
 
 
Chief Financial Officer
 
 
 
612/617-8571
 
 
 
HAWKINS, INC. REPORTS
SECOND QUARTER FISCAL 2016 RESULTS

Minneapolis, MN, October 28, 2015 – Hawkins, Inc. (Nasdaq: HWKN) today announced second quarter results for fiscal 2016. Sales of $94.6 million for the three months ended September 27, 2015 represented an increase of 6.4% from $88.9 million for the same period of the prior year. Net income for the second quarter of fiscal 2016 was $5.7 million, or $0.54 per fully diluted share, compared to net income of $6.1 million, or $0.58 per fully diluted share, for the second quarter of the previous year.

For the six months ended September 27, 2015 Hawkins reported sales of $196.1 million as compared to $186.9 million for the same period of the prior year. Net income for the first half of fiscal 2016 was $12.5 million, or $1.17 per fully diluted share, compared to $12.2 million, or $1.15 per fully diluted share for the first half of fiscal 2015.

“Our Water Treatment segment reported a higher gross profit this quarter compared to last year, with much of the growth attributable to the Florida locations we acquired last October,” said Patrick Hawkins, Chief Executive Officer and President.  “We also saw growth from most of our other Water Treatment locations. As previously noted, we have continued to invest in additional sales and infrastructure resources throughout this segment to support future growth, and these higher expenses negatively impacted the segment’s operating profit this quarter. In addition, we are pleased to have closed on another Water Treatment acquisition in Florida that further strengthens our position in that market. This acquisition added one site and the rest of its operations were integrated into our existing facilities.”

“Our Industrial segment reported another strong quarter, increasing gross profit year over year by nearly 10%,” Mr. Hawkins continued.  “We have also invested in additional sales resources to grow our Industrial business. These investments have contributed to the higher expenses reported for this segment compared to last year.”

For the second quarter of fiscal 2016, Industrial segment sales were $58.3 million, an increase of $0.4 million from the same period of the prior year. Overall volumes were consistent with the same period a year ago. The growth in sales dollars was driven by a shift in product mix to increased sales of products with higher per-unit selling prices, offsetting decreased volumes of lower-priced bulk commodity products at select accounts. Water Treatment segment sales were $36.2 million for the current quarter, an increase of $5.3 million, or 17.1%, from the same period of the prior year. Sales at our Florida locations acquired in the third quarter of fiscal 2015 were $4.2 million. Also contributing to the year-over-year increase was increased sales volumes across many of our other branches. Volume growth outpaced growth in sales dollars due to increased sales of products with lower per-unit selling prices.

Company-wide gross profit for the second quarter of fiscal 2016 was $19.8 million, or 20.9% of sales, an increase of 9.3% from $18.1 million, or 20.4% of sales, for the same period of the prior year. The LIFO method of valuing inventory had a nominal impact on gross profit for the quarter, and decreased gross profit by $0.2 million for the same period of the prior year.

Gross profit for the Industrial segment was $9.2 million, or 15.7% of sales, for the quarter as compared to $8.4 million, or 14.4% of sales, for the same period of the prior year. While volumes were consistent year-over-year, increased sales of certain products that generate higher per-unit margins more than offset the impact from decreased volumes of lower-margin bulk commodity products. The LIFO method of valuing inventory had a nominal impact on gross profit in the first quarter of the current year but decreased gross profit by $0.1 million in the prior year.
Gross profit for the Water Treatment segment was $10.6 million, or 29.3% of sales, for the quarter as compared to $9.8 million, or 31.5% of sales, for the same period of the prior year. The increase in gross profit dollars was primarily driven by our Florida locations acquired in the third quarter of fiscal 2015, in addition to increases in volumes sold in our other branches. Gross profit as a percentage of sales decreased in part due to the addition of the seven Florida locations that have lower per-branch revenues and the costs to operate represent a higher percentage of their sales than many of our existing branches. The LIFO method of




valuing inventory had a nominal impact on gross profit in the first quarter of the current year but decreased gross profit by $0.1 million in the prior year.

Company-wide selling, general and administrative expenses were $10.3 million for the quarter as compared to $8.3 million for the same period of the prior year. The expense increase was partially driven by our Florida locations acquired in the third quarter of fiscal 2015 in our Water Treatment segment, as well as the addition of sales personnel in other Water Treatment locations and in our Industrial sales group.

During the second quarter of fiscal 2016 the Company recorded income tax expense of $0.3 million related to a preliminary audit finding by a state income tax jurisdiction covering multiple years, reducing our net income by $0.3 million, or $0.03 per fully diluted share.

Hawkins, Inc. distributes, blends and manufactures bulk and specialty chemicals for its customers in a wide variety of industries. Headquartered in Roseville, Minnesota, and with 39 facilities in 17 states, the Company creates value for its customers through superb customer service and support, quality products and personalized applications.

-more-




HAWKINS, INC. REPORTS
SECOND QUARTER, FISCAL 2016 RESULTS
October 28, 2015

 
HAWKINS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except share and per-share data)
 
 
Three Months Ended
 
Six Months Ended
 
 
September 27,
2015
 
September 28,
2014
 
September 27,
2015
 
September 28,
2014
Sales
 
$
94,592

 
$
88,881

 
$
196,088

 
$
186,917

Cost of sales
 
(74,781
)
 
(70,759
)
 
(155,542
)
 
(150,299
)
Gross profit
 
19,811

 
18,122

 
40,546

 
36,618

Selling, general and administrative expenses
 
(10,303
)
 
(8,271
)
 
(20,194
)
 
(17,146
)
Operating income
 
9,508

 
9,851

 
20,352

 
19,472

Interest (expense) income, net
 
(15
)
 
(18
)
 
6

 
(4
)
Income before income taxes
 
9,493

 
9,833

 
20,358

 
19,468

Income tax provision
 
(3,815
)
 
(3,686
)
 
(7,889
)
 
(7,300
)
Net income
 
$
5,678

 
$
6,147

 
$
12,469

 
$
12,168

 
 
 
 
 
 
 
 
 
Weighted average number of shares outstanding - basic
 
10,545,992

 
10,558,173

 
10,563,267

 
10,564,107

Weighted average number of shares outstanding - diluted
 
10,589,824

 
10,603,931

 
10,614,484

 
10,616,874

 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
0.54

 
$
0.58

 
$
1.18

 
$
1.15

Diluted earnings per share
 
$
0.54

 
$
0.58

 
$
1.17

 
$
1.15

 
 
 
 
 
 
 
 
 
Cash dividends declared per common share
 
$
0.40

 
$
0.38

 
$
0.40

 
$
0.38


 



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