MINNEAPOLIS, June 12 /PRNewswire-FirstCall/ -- Hawkins, Inc. (Nasdaq: HWKN) today announced sales for fiscal 2008 of $196.4 million, a 22.5% increase over fiscal 2007 sales of $160.4 million. Net income for fiscal 2008 was $9.1 million, equal to earnings per share of $0.89, compared with fiscal 2007 net income of $8.1 million or earnings per share of $0.79.
For the fourth quarter ended March 30, 2008, Hawkins reported sales of $51.2 million, up 29.0% from $39.7 million for the comparable period a year ago. Net income for the fourth quarter of fiscal 2008 was $1.7 million, equal to earnings per share of $0.17, versus net income of $1.8 million, or earnings per share of $0.18, for the fourth quarter of fiscal 2007. The fourth quarter of fiscal 2008 was negatively impacted by LIFO inventory adjustments of approximately $1.2 million before taxes (approximately $0.8 million or $0.08 per share, after tax) resulting from fluctuations in cost and inventory levels, whereas the fourth quarter of fiscal 2007 was positively impacted by LIFO adjustments of approximately $0.8 million before taxes (approximately $0.5 million or $0.05 per share, after tax).
In fiscal 2008, Industrial segment sales were $124.6 million, a 30.6% increase over fiscal 2007 sales of $95.4 million. The change was driven largely by higher volumes, price increases related to rising material costs, and the acquisition of Trumark, Inc. in May of 2007.
Water Treatment segment sales were $62.1 million, a 10.1% increase over fiscal 2007 sales of $56.4 million. The growth is primarily attributable to selling price increases that correlate with rising material costs, product line growth and higher volumes related to favorable weather conditions.
The Pharmaceutical segment's sales were $9.8 million, a 13.2% increase over fiscal 2007 sales of $8.6 million. The improvement was due primarily to the resolution of regulatory restrictions during the third quarter of fiscal 2008, which began in fiscal 2007.
Gross margin as a percent of sales for the quarter and year ended March 30, 2008 were 17.1% and 21.2%, respectively, compared with 20.8% and 23.2% in the comparable periods a year ago. In addition to the effect of the LIFO adjustments mentioned above, margins for fiscal 2008 were negatively affected by rising commodity chemicals prices and continued growth in high volume, lower margin products.
The positive impact of higher sales on net income for fiscal 2008 was partially offset by an increase in Selling, General and Administrative (SG&A) expenses. The SG&A expense increase primarily related to the acquisition of Trumark and higher employee-related expenses, partially offset by a decrease in professional and consulting expenses.
Chief Executive Officer, John R. Hawkins, commented, "We continue to operate in a highly competitive, price pressured environment where increasing raw material and transportation costs are negatively impacting margins. Our historical focus on strong customer service has permitted us to meet customer needs despite these challenges. The business also continues to generate strong cash flow. This has enabled Hawkins to invest capital in operations, business processes and new growth opportunities while continuing to pay higher shareholder dividends. For example in January 2008, two new Water Treatment sales and service offices were established in Missouri and Kansas, further expanding Hawkins' territory."
Hawkins, Inc. provides a full range of bulk industrial products complemented with the technical competence and innovation to formulate and blend specialty chemicals. The Company sells and services related products and equipment to safely dispense chemicals in highly controlled environments.
Hawkins serves customers in a wide range of industries, including chemical processing, electronics, energy, environmental services, food processing, metal finishing, pharmaceutical, medical devices, pulp and paper, and water treatment.
Hawkins is headquartered in Minneapolis, Minnesota. The Company operates 18 facilities in Iowa, Illinois, Kansas, Minnesota, Missouri, Montana, Nebraska, New Jersey, South and North Dakota and Wisconsin and services customers in Upper Michigan and Wyoming as well.
The discussion above contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements by their nature involve substantial risks and uncertainties.
Actual results may differ materially depending on a variety of factors,
including, but not limited to, the following: our ability to pass through
cost increases in raw materials and energy, competition from other chemical
companies, seasonality and weather conditions, costs and difficulties with
our new enterprise resource planning system, the hazards of chemical
manufacturing, natural disasters, downturns in our customers' industries,
actual growth in our products' markets, changes in our customers' products,
compliance with applicable laws and regulations, our ability to meet
quality specifications, the adequacy of our insurance coverage, our ability
to attract and retain key personnel, our ability to complete and integrate
future acquisitions, and future terrorist attacks. Additional information
with respect to the risks and uncertainties faced by Hawkins may be found
in, and the prior discussion is qualified in its entirety by, the Risk
Factors contained in Part I, Item 1A of our Annual Report on Form 10-K for
the fiscal year ended April 1, 2007, as updated by subsequent SEC filings.
CONDENSED STATEMENTS OF INCOME
Quarters Ended Fiscal Years Ended
March 30, April 1, March 30, April 1,
2008 2007 2008 2007
Sales $51,201,423 $39,705,074 $196,439,762 $160,405,080
Cost of sales 42,446,932 31,459,035 154,843,280 123,168,103
Gross margin 8,754,491 8,246,039 41,596,482 37,236,977
Selling, general and
expenses 6,661,767 6,136,878 28,614,185 25,972,636
Income from operations 2,092,724 2,109,161 12,982,297 11,264,341
Investment income 468,676 684,144 1,340,712 1,692,332
Income before income
taxes 2,561,400 2,793,305 14,323,009 12,956,673
Provision for income
taxes 830,833 984,790 5,213,000 4,887,790
Net income $1,730,567 $1,808,515 $9,110,009 $8,068,883
number of shares
basic 10,239,458 10,171,496 10,213,225 10,171,496
number of shares
diluted 10,242,725 10,180,040 10,214,387 10,173,719
Earnings per share --
basic and diluted $0.17 $0.18 $0.89 $0.79
declared per common
share $0.24 $0.22 $0.48 $0.44
|SOURCE Hawkins, Inc.|
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