hwkn-20221002

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
			SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
			SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-7647


HAWKINS, INC.
(Exact name of registrant as specified in its charter)


Minnesota						41-0771293
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


2381 Rosegate, Roseville, Minnesota			55113
(Address of principal executive offices)			(Zip code)


(612) 331-6910
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	HWKN	Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


CLASS						Shares Outstanding at October 28, 2022
Common Stock, par value $.01 per share						21,019,448

HAWKINS, INC.

INDEX TO FORM 10-Q


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets –October 2, 2022 and April 3,2022	1

	Condensed Consolidated Statements of Income – Three and Six Months Ended October 2, 2022 and September 26, 2021	2

	Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended October 2, 2022 and September 26, 2021	3

	Condensed Consolidated Statements of Shareholder’s Equity – Three and Six Months Ended October 2, 2022 and September 26, 2021	4

	Condensed Consolidated Statements of Cash Flows – Six Months Ended October 2, 2022 and September 26, 2021	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	14

Item 4.	Controls and Procedures	14

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	15

Item 4.	Mine Safety Disclosures	15

Item 5.	Other Information	15

Item 6.	Exhibits	16

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HAWKINS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data)


	October 2, 2022		April 3, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,924	$	3,496
Trade accounts receivables, net	131,392		122,826
Inventories	113,062		94,985

Prepaid expenses and other current assets	3,197		6,431
Total current assets	251,575		227,738
PROPERTY, PLANT, AND EQUIPMENT:	321,453		304,055
Less accumulated depreciation	150,442		142,209
Net property, plant, and equipment	171,011		161,846
OTHER ASSETS:
Right-of-use assets	10,019		10,606
Goodwill	77,401		77,401
Intangible assets, net of accumulated amortization	76,687		80,193
Deferred compensation plan asset	6,752		6,783
Other	5,838		2,761
Total other assets	176,697		177,744
Total assets	$	599,283	$	567,328
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable — trade	$	60,887	$	66,693
Accrued payroll and employee benefits	12,059		19,034
Income tax payable	2,069		39
Current portion of long-term debt	9,913		9,913
Short-term lease liability	1,433		1,657

Other current liabilities	4,490		4,130
Total current liabilities	90,851		101,466
LONG-TERM DEBT, LESS CURRENT PORTION	130,688		115,644
LONG-TERM LEASE LIABILITY	8,758		9,143
PENSION WITHDRAWAL LIABILITY	4,095		4,276
DEFERRED INCOME TAXES	24,325		23,422
DEFERRED COMPENSATION LIABILITY	7,899		8,402
OTHER LONG-TERM LIABILITIES	1,253		2,374
Total liabilities	267,869		264,727
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock; authorized: 60,000,000 shares of $0.01 par value; 20,817,625 and 20,889,777 shares issued and outstanding as of October 2, 2022 and April 3, 2022, respectively	208		209
Additional paid-in capital	41,294		46,717
Retained earnings	286,179		254,384
Accumulated other comprehensive income	3,733		1,291
Total shareholders’ equity	331,414		302,601
Total liabilities and shareholders’ equity	$	599,283	$	567,328

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except share and per-share data)


	Three Months Ended				Six Months Ended
	October 2, 2022		September 26, 2021		October 2, 2022		September 26, 2021
Sales	$	241,192	$	183,277	$	487,735	$	364,518
Cost of sales	(194,818)		(145,990)		(394,612)		(288,257)

Gross profit	46,374		37,287		93,123		76,261
Selling, general and administrative expenses	(19,838)		(17,679)		(38,723)		(34,535)
Operating income	26,536		19,608		54,400		41,726
Interest expense, net	(1,383)		(329)		(2,312)		(678)
Other (expense) income	(446)		184		(1,209)		416
Income before income taxes	24,707		19,463		50,879		41,464
Income tax expense	(6,707)		(5,330)		(13,184)		(10,703)
Net income	$	18,000	$	14,133	$	37,695	$	30,761

Weighted average number of shares outstanding - basic	20,814,686		20,986,542		20,861,754		21,010,422
Weighted average number of shares outstanding - diluted	20,956,897		21,140,087		21,004,454		21,168,809

Basic earnings per share	$	0.86	$	0.67	$	1.81	$	1.46
Diluted earnings per share	$	0.86	$	0.67	$	1.79	$	1.45

Cash dividends declared per common share	$	0.1400	$	0.1300	$	0.2800	$	0.2525

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)


	Three Months Ended				Six Months Ended
	October 2, 2022		September 26, 2021		October 2, 2022		September 26, 2021
Net income	$	18,000	$	14,133	$	37,695	$	30,761
Other comprehensive income, net of tax:

Unrealized gain on interest rate swap	1,977		—		2,442		—


Total comprehensive income	$	19,977	$	14,133	$	40,137	$	30,761

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(In thousands, except share data)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
	Shares	Amount
BALANCE — April 3, 2022	20,889,777	$	209	$	46,717	$	254,384	$	1,291	$	302,601
Cash dividends declared and paid ($0.14 per share)	—	—		—		(2,958)		—		(2,958)
Share-based compensation expense	—	—		595		—		—		595
Vesting of restricted stock	102,860	1		(1)		—		—		—
Shares surrendered for payroll taxes	(36,410)	—		(1,550)		—		—		(1,550)
ESPP shares issued	32,768	—		986		—		—		986
Shares repurchased	(181,657)	(2)		(6,555)		—		—		(6,557)
Other comprehensive income, net of tax	—	—		—		—		465		465
Net income	—	—		—		19,695		—		19,695
BALANCE — July 3, 2022	20,807,338	$	208	$	40,192	$	271,121	$	1,756	$	313,277
Cash dividends declared and paid ($0.14 per share)	—	—		—		(2,942)		—		(2,942)
Share-based compensation expense	—	—		1,085		—		—		1,085
Vesting of restricted stock	10,287	—		—		—		—		—

ESPP shares issued	—	—		17		—		—		17

Other comprehensive income, net of tax	—	—		—		—		1,977		1,977
Net income	—	—		—		18,000		—		18,000
BALANCE — October 2, 2022	20,817,625	$	208	$	41,294	$	286,179	$	3,733	$	331,414




















	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
	Shares	Amount
BALANCE — March 28, 2021	20,969,746	$	210	$

SEC Form 10-Q filed by Hawkins Inc.