MINNEAPOLIS, Nov. 8 - Hawkins, Inc. (Nasdaq: HWKN) today announced results for the second quarter and first six months of fiscal 2006. For the quarter ended September 30, 2005, Hawkins reported sales of $36.6 million, an increase of 28.0% over the $28.6 million in sales for the same period a year ago. Net income for the second quarter of fiscal 2006 was $3.0 million, or diluted earnings per share of $0.29, versus net income of $2.4 million, or diluted earnings per share of $0.24, earned in the same period of fiscal 2005.
For the six months ended September 30, 2005, Hawkins reported sales of $72.5 million, net income of $5.8 million and diluted earnings per share of $0.56 versus sales of $58.6 million, net income of $5.3 million and diluted earnings per share of $0.52 for the six months ended September 30, 2004.
Both the second quarter and six-month results benefited from a pretax gain of $1,016,000 (approximately $650,000 or $0.06 per share after tax) from litigation settlement income associated with the surrender of shares of the Company's common stock by the former Universal Chemical principals that was issued to them at the time of the acquisition.
Chief Executive Officer, John R. Hawkins, commented, "Revenue growth across all three segments -- the Water Treatment, Industrial and Pharmaceutical - reflects growing demand for product and economic improvement in our major market areas." Hawkins continued, "rising costs, competitive pressures, and product mix affected gross margin, and as a percent of sales for the six months ended September 30, 2005 gross margin was 25.8% versus 28.9% a year ago."
"As we move into the second half of the year, we are comfortable with the financial condition of the Company, as Hawkins has approximately $24.9 million in cash and marketable securities, strong, predictable cash flow and no debt," John Hawkins added.
Hawkins, Inc. is a highly focused regional company, which provides a full range of bulk industrial products complemented with the technical competence and ingenuity to formulate and blend specialty chemicals. The Company sells and services related products and equipment to safely dispense chemicals in highly controlled environments.
The industries in which Hawkins' customers participate include chemical processing, electronics, energy, environmental services, food processing, metal finishing, pharmaceutical, medical devices, pulp and paper, and water treatment.
The Company strives to operate in concert with the environment. Its products and services are geared to improve the environment and insure the safe handling of chemicals.
Hawkins is headquartered in Minneapolis, Minnesota. The Company operates fifteen facilities in Iowa, Illinois, Minnesota, Montana, Nebraska, South and North Dakota and Wisconsin and services customers in Upper Michigan, Kansas 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 as described by Hawkins' periodic filings. Actual results may differ materially depending on a variety of factors, including, but not limited to the following: the achievement of Hawkins' projected operating results, the achievement of efficient volume production and related sales revenue, the ability of Hawkins to identify and successfully pursue other business opportunities, and the effectiveness of Hawkins' internal controls. 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 the Company's filings with the Securities and Exchange Commission including Hawkins' Report on Form 10-K for the period ended April 3, 2005, Forms 10-Q, and other SEC filings.
HAWKINS, INC.
CONDENSED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Six Months Ended
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
Sales $36,643,242 $28,631,601 $72,497,769 $58,587,419
Cost of sales 27,848,289 20,313,977 53,817,158 41,684,319
Gross margin 8,794,953 8,317,624 18,680,611 16,903,100
Selling, general
and administrative
expenses 5,189,914 4,724,648 11,088,310 8,929,493
Litigation
settlement (1,015,826) -- (1,015,826) --
Income from
operations 4,620,865 3,592,976 8,608,127 7,973,607
Investment income 68,654 140,608 376,878 336,781
Income before
income taxes 4,689,519 3,733,584 8,985,005 8,310,388
Provision for
income taxes 1,688,600 1,327,500 3,234,600 2,975,000
Net income $3,000,919 $2,406,084 $5,750,405 $5,335,388
Weighted average
number of shares
outstanding - basic 10,227,209 10,216,688 10,222,065 10,216,688
Weighted average
number of shares
outstanding -
diluted 10,251,181 10,217,793 10,247,623 10,217,234
Earnings per share
- basic and diluted $0.29 $0.24 $0.56 $0.52
Cash dividends
declared per
common share $0.20 0.18 $0.20 $0.18
