FOR IMMEDIATE RELEASE
Patrick H. Hawkins
Chief Executive Officer
Roseville, MN 55113
Kathleen P. Pepski
Chief Financial Officer
HAWKINS, INC. REPORTS
THIRD QUARTER FISCAL 2017 RESULTS
Minneapolis, MN, February 8, 2017 – Hawkins, Inc. (Nasdaq: HWKN) today announced third quarter results for fiscal 2017. Sales of $112.4 million for the three months ended January 1, 2017 represented an increase of 27.1% from $88.4 million for the same period of the prior year. Net income was $3.6 million, or $0.34 per diluted share, compared to net income of $0.8 million, or $0.08 per diluted share, for the same period in fiscal 2016. Net income in the prior year included pre-tax expenses of $2.7 million (approximately $2.1 million after tax, or $0.20 per diluted share) related to our acquisition of Stauber Performance Ingredients ("Stauber") during the third quarter of fiscal 2016. Adjusted net income for the third quarter of fiscal 2016, excluding the Stauber acquisition expenses, was $3.0 million, or $0.28 per diluted share.
For the nine months ended January 1, 2017, Hawkins reported sales of $365.0 million as compared to $284.5 million for the same period of the prior year. Net income for the nine months ended January 1, 2017 was $18.3 million, or $1.73 per diluted share, compared to net income of $13.3 million, or $1.25 per diluted share, for the first nine months of fiscal 2016. Excluding the acquisition expenses noted above, adjusted net income was $15.4 million, or $1.46 per fully diluted share, for the nine months ended December 27, 2015.
“I am very pleased by our Industrial segment performance this quarter and for the year. This segment reported higher profits again this quarter as a result of improved margins from certain of our specialized products,” said Patrick Hawkins, Chief Executive Officer and President. “Our Water Treatment segment results declined this quarter as we had some customers serving the oil and gas industry significantly curtail their operations. We continue to focus on sales execution and leveraging the staffing additions we have made over the last several quarters to drive improved performance in these segments. Our Health and Nutrition segment sales were higher than the pro forma sales for the same period in the prior year. While we experienced lower demand from certain of our major customers, we believe that our new business results and prospects remain encouraging. We are continuing to focus on integrating the talent we have added to this segment to build on this group’s capabilities and are optimistic that they are well-positioned for future growth.”
For the third quarter of fiscal 2017, Industrial segment sales were $57.1 million, a decrease of $2.2 million, or 3.8%, from the same period of the prior year. Sales decreased primarily due to decreased per-unit selling prices resulting from lower raw material prices on certain products, and to a lesser extent, a decrease in overall sales volumes. Water Treatment segment sales were $28.1 million for the most recent quarter, a decrease of $1.0 million, or 3.3%, from the same period of the prior year. Overall sales volumes increased slightly year over year, but a decrease in equipment project revenues along with lower per-unit selling prices due largely to reduced raw material prices on certain products led to a reduction in sales dollars. Sales for our Health and Nutrition segment established near the end of the third quarter of fiscal 2016 were $27.2 million for the current quarter. This compares to pro forma sales of $26.0 million for the same period last year and sales of $28.5 million in the second quarter of fiscal 2017.
Company-wide gross profit for the third quarter of fiscal 2017 was $20.9 million, or 18.6% of sales, an increase of $6.2 million from $14.7 million, or 16.6% of sales, for the same period of the prior year.
Gross profit for the Industrial segment was $8.4 million, or 14.7% of sales, for the quarter, an increase of $0.9 million from $7.5 million, or 12.6% of sales, for the same period of the prior year. The LIFO method of valuing inventory increased gross profit by $0.3 million in the current year and had a nominal impact on gross profit for the same period of the prior year. Despite a slight decrease in overall sales volumes, gross profit dollars and gross profit as a percentage of sales increased, primarily due to improved per-unit margins on certain of our specialized products. The improvement in gross profit as a percentage of sales was also due to decreased selling prices resulting from lower raw material costs.
The following information was filed by Hawkins Inc (HWKN) on Wednesday, February 8, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.