Hawkins(HWKN) - 2025 Q4 - Annual Report

Financial Performance - Fiscal 2025 sales were $974.4 million, an increase of$ 55.2 million, or 6%, from fiscal 2024 sales of $919.2 million[118]. - Gross profit for fiscal 2025 was$ 225.5 million, an increase of $31.9 million, or 16%, from$ 193.6 million in fiscal 2024[129]. - Diluted earnings per share (EPS) for fiscal 2025 were $4.03, an increase of$ 0.44, or 12%, from fiscal 2024[118]. - Operating income for fiscal 2025 increased by $15.2 million, or 15%, to$ 119.2 million[134]. Segment Performance - The Water Treatment segment saw sales increase by $83.2 million, or 23%, to$ 446.5 million in fiscal 2025[126]. - The Industrial segment experienced a sales decrease of $27.0 million, or 7%, to$ 382.5 million in fiscal 2025[127]. - Health and Nutrition segment sales decreased by $0.9 million, or 1%, to$ 145.5 million in fiscal 2025[128]. Expenses and Cash Flow - Selling, general and administrative expenses increased by $16.8 million, or 19%, to$ 106.4 million in fiscal 2025[133]. - Cash provided by operating activities in fiscal 2025 was $111.1 million, down from$ 159.5 million in fiscal 2024[140]. Acquisitions and Investments - The company acquired four businesses in fiscal 2025, contributing approximately $67 million in annual revenue[122]. - Cash used in investing activities was$ 128.0 million in fiscal 2025, up from $122.5 million in fiscal 2024, with acquisition spending for the Water Treatment group at$ 87.4 million in fiscal 2025 compared to $83.5 million in fiscal 2024[141]. - The fair value of the earnout liability related to the Water Solutions acquisition is based on achieving certain targets payable three years after acquisition, amounting to$ 12.6 million[156]. Financing and Capital Structure - Cash used in financing activities decreased to $14.8 million in fiscal 2025 from$ 37.4 million in fiscal 2024, including net debt borrowings of $50.0 million in fiscal 2025[142]. - The cash balance was$ 5.1 million at March 30, 2025, a decrease of $2.1 million compared to March 31, 2024, primarily due to cash expended for acquisitions and capital expenditures[143]. - The company has a Revolving Loan Facility totaling$ 400.0 million, with $149 million outstanding as of March 30, 2025[144]. - The effective interest rate on borrowings was 4.3% as of March 30, 2025, with a Term SOFR margin between 1.0% and 1.85% based on the leverage ratio[145]. - A 25-basis point change in interest rates on the variable-rate portion of debt not covered by the interest rate swap could potentially affect annual interest expense by approximately$ 0.2 million[158]. Future Outlook - Total capital expenditures were $41.1 million in fiscal 2025, with an anticipated increase to approximately$ 60 million for fiscal 2026[153]. - The company plans to pursue acquisitions or strategic relationships to expand its existing businesses and customer base[151]. - The company is in compliance with all covenants of the Credit Agreement as of March 30, 2025, and expects to remain compliant for the next 12 months[148].