hwkn-20210627

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 June 27, 2021


☐			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 July 23, 2021
Common Stock, par value $.01 per share						21,212,410

HAWKINS, INC.

INDEX TO FORM 10-Q


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets –June 27, 202 1 and March 28 , 20 21	1

	Condensed Consolidated Statements of Income – Three Months Ended June 2 7 , 202 1 and June 2 8 , 20 20	2

	Condensed Consolidated Statements of Comprehensive Income – Three Months Ended Jun e 27, 202 1 and June 28, 2020	3

	Condensed Consolidated Statements of Shareholder’s Equity – Three Months Ended June 27, 2021 and June 28, 2020	4

	Condensed Consolidated Statements of Cash Flows – Three Months Ended June 27, 2021 and June 28, 2020	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4.	Controls and Procedures	17

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Mine Safety Disclosures	18

Item 5.	Other Information	18

Item 6.	Exhibits	19

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HAWKINS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data)


	June 27, 2021		March 28, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,222	$	2,998
Trade accounts receivables, net	90,936		90,603
Inventories	67,943		63,864
Income taxes receivable	—		175
Prepaid expenses and other current assets	3,671		5,367
Total current assets	167,772		163,007
PROPERTY, PLANT, AND EQUIPMENT:	301,953		300,404
Less accumulated depreciation	159,707		155,792
Net property, plant, and equipment	142,246		144,612
OTHER ASSETS:
Right-of-use assets	11,432		11,630
Goodwill	70,754		70,720
Intangible assets, net of accumulated amortization	74,787		76,368
Other	8,024		6,213
Total other assets	164,997		164,931
Total assets	$	475,015	$	472,550
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable — trade	$	38,052	$	37,313
Accrued payroll and employee benefits	8,354		18,048
Income tax payable	5,218		—
Current portion of long-term debt	9,907		9,907
Short-term lease liability	1,620		1,587
Container deposits	1,501		1,452
Other current liabilities	1,860		2,155
Total current liabilities	66,512		70,462
LONG-TERM DEBT, LESS CURRENT PORTION	85,868		88,845
LONG-TERM LEASE LIABILITY	9,914		10,231
PENSION WITHDRAWAL LIABILITY	4,543		4,631
DEFERRED INCOME TAXES	24,445		24,445
DEFERRED COMPENSATION LIABILITY	8,032		7,322
OTHER LONG-TERM LIABILITIES	496		1,368
Total liabilities	199,810		207,304
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock; authorized: 60,000,000 shares of $0.01 par value; 20,946,404 and 20,969,746 shares issued and outstanding as of June 27, 2021 and March 28, 2021, respectively	210		210
Additional paid-in capital	47,069		51,138
Retained earnings	227,926		213,898

Total shareholders’ equity	275,205		265,246
Total liabilities and shareholders’ equity	$	475,015	$	472,550

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
	June 27, 2021		June 28, 2020
Sales	$	181,241	$	143,172
Cost of sales	(142,267)		(112,196)

Gross profit	38,974		30,976
Selling, general and administrative expenses	(16,856)		(15,038)
Operating income	22,118		15,938
Interest expense, net	(349)		(380)
Other income	232		477
Income before income taxes	22,001		16,035
Income tax expense	(5,373)		(4,247)
Net income	$	16,628	$	11,788

Weighted average number of shares outstanding - basic	21,034,302		21,031,456
Weighted average number of shares outstanding - diluted	21,178,320		21,285,346

Basic earnings per share	$	0.79	$	0.56
Diluted earnings per share	$	0.79	$	0.55

Cash dividends declared per common share	$	0.12250	$	0.11625

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)


	Three Months Ended
	June 27, 2021		June 28, 2020
Net income	$	16,628	$	11,788
Other comprehensive loss, net of tax:

Unrealized loss on interest rate swap	—		(10)


Total comprehensive income	$	16,628	$	11,778

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share data)


	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	$	51,138	$	213,898	$	—	$	265,246
Cash dividends declared and paid	—	—		—		(2,600)		—		(2,600)
Share-based compensation expense	—	—		799		—		—		799
Vesting of restricted stock	123,002	1		(1)		—		—		—
Shares surrendered for payroll taxes	(45,390)	—		(1,467)		—		—		(1,467)

Shares repurchased	(100,954)	(1)		(3,400)		—		—		(3,401)

Net income	—	—		—		16,628		—		16,628
BALANCE — June 27, 2021	20,946,404	$	210	$	47,069	$	227,926	$	—	$	275,205





























	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
	Shares	Amount
BALANCE — March 29, 2020	21,024,458	$	211	$	50,405	$	182,947	$	(79)	$	233,484
Cash dividends declared and paid	—	—		—		(2,479)		—		(2,479)
Share-based compensation expense	—	—		700		—		—		700
Vesting of restricted stock	10,526	—		—		—		—		—
Shares surrendered for payroll taxes	(3,314)	—		(54)		—		—		(54)


Other comprehensive loss, net of tax	—	—		—		—		(10)		(10)
Net income	—	—		—		11,788		—		11,788
BALANCE — June 28, 2020	21,031,670	$	211	$	51,051	$	192,256	$	(89)	$	243,429

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	Three Months Ended
	June 27, 2021		June 28, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	16,628	$	11,788
Reconciliation to cash flows:
Depreciation and amortization	5,935		5,484
Operating leases	481		493

Gain on deferred compensation assets	(232)		(477)

Stock compensation expense	799		700

Other	67		22
Changes in operating accounts providing (using) cash:
Trade receivables	(316)		(1,992)
Inventories	(4,079)		(8,952)
Accounts payable	868		(2,354)
Accrued liabilities	(10,159)		(6,689)
Lease liabilities	(572)		(513)
Income taxes	5,393		4,263
Other	8		(220)
Net cash provided by operating activities	14,821		1,553
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment	(2,155)		(4,848)



Other	26		61
Net cash used in investing activities	(2,129)		(4,787)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends declared and paid	(2,600)		(2,479)

Shares surrendered for payroll taxes	(1,467)		(54)


Shares repurchased	(3,401)		—
Net (payments on) proceeds from revolving loan	(3,000)		6,000



Net cash (used in) provided by financing activities	(10,468)		3,467
NET INCREASE IN CASH AND CASH EQUIVALENTS	2,224		233
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	2,998		4,277
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	5,222	$	4,510

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for interest	$	292	$	288
Noncash investing activities - capital expenditures in accounts payable	$	497	$	334

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 – Summary of Significant Accounting Policies

Basis of Presentation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, accordingly, do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2021, previously filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly our financial position and the results of our operations and cash flows for the periods presented. All adjustments made to the interim condensed consolidated financial statements were of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three months ended June 27, 2021 are not necessarily indicative of the results that may be expected for the full year.

References to fiscal 2020 refer to the fiscal year ended March 29, 2020, references to fiscal 2021 refer to the fiscal year ended March 28, 2021 and references to fiscal 2022 refer to the fiscal year ending April 3, 2022.

Use of Estimates. The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, particularly receivables, inventories, property, plant and equipment, right-of-use assets, goodwill, intangibles, accrued expenses, short-term and long-term lease liability, income taxes and related accounts and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Accounting Policies. The accounting policies we follow are set forth in Note 1 – Nature of Business and Significant Accounting Policies to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended March 28, 2021, previously filed with the SEC. There has been no significant change in our accounting policies since the end of fiscal 2021.

Note 2 — Acquisitions

Acquisition of C&L Aqua Professionals, Inc. and LC Blending, Inc.: In the fourth quarter of fiscal 2021, we acquired substantially all the assets of C&L Aqua Professionals, Inc. and LC Blending, Inc. (together, "C&L Aqua") under the terms of an asset purchase agreement among us, C&L Aqua and its shareholders. We paid $16 million for the acquisition, using funds available under our revolving credit facility to fund the acquisition. C&L Aqua was a water treatment chemical distribution company operating primarily in Louisiana. The results of operations since the acquisition date, and the assets, including the goodwill associated with this acquisition, are included in our Water Treatment segment. Costs associated with this transaction were not material and were expensed as incurred.

Acquisition of Property: In the third quarter of fiscal 2021, we acquired a manufacturing facility on 28 acres located adjacent to our facility in Rosemount, Minnesota to allow further expansion and growth in both our Industrial and Water Treatment segments. We paid $10 million for the property. The purchase of this facility added approximately 40,000 square feet of manufacturing and warehouse space to bring us to a total of 105,000 square feet of space on 56 acres of land in the area, with rail access at both of the sites to allow for future growth and provide for supply chain flexibility on certain raw materials to better serve our customers.

Acquisition of American Development Corporation of Tennessee, Inc.: In the second quarter of fiscal 2021, we acquired substantially all the assets of American Development Corporation of Tennessee, Inc. (“ADC”) under the terms of an asset purchase agreement among us, ADC and its shareholders. We paid $25 million for the acquisition, using funds available under our revolving credit facility with U.S. Bank National Association to fund the acquisition. ADC was a water treatment chemical distribution company operating primarily in Tennessee, Georgia and Kentucky. The results of operations since the acquisition date, and the assets, including the goodwill associated with this acquisition, are included in our Water Treatment segment. Costs associated with this transaction were not material and were expensed as incurred.

Note 3 - Revenue

Our revenue arrangements generally consist of a single performance obligation to transfer promised goods or services. We disaggregate revenues from contracts with customers by operating segments as well as types of products sold. Reporting by operating segment is pertinent to understanding our revenues, as it aligns to how we review the financial performance of our operations. Types of products sold within each operating segment help us to further evaluate the financial performance of our segments.

The following tables disaggregate external customer net sales by major revenue stream for the three and three months ended June 27, 2021 and June 28, 2020:


	Three months ended June 27, 2021
(In thousands)	Industrial		Water Treatment		Health and Nutrition		Total
Bulk / Distributed specialty products (1)	$	11,843	$	4,553	$	30,942	$	47,338
Manufactured, blended or repackaged products (2)	72,566		51,228		8,051		131,845
Other	1,441		457		160		2,058
Total external customer sales	$	85,850	$	56,238	$	39,153	$	181,241

	Three months ended June 28, 2020
(In thousands)	Industrial		Water Treatment		Health and Nutrition		Total
Bulk / Distributed specialty products (1)	$	8,824	$	3,875	$	25,945	$	38,644
Manufactured, blended or repackaged products (2)	61,842		35,506		6,098		103,446
Other	836		333		(87)		1,082
Total external customer sales	$	71,502	$	39,714	$	31,956	$	143,172

(1)For our Industrial and Water Treatment segments, this line includes our bulk products that we do not modify in any way, but receive, store, and ship from our facilities, or direct ship to our customers in large quantities. For our Health and Nutrition segment, this line includes our non-manufactured distributed specialty products, which may be sold out of one of our facilities or direct shipped to our customers.

(2)For our Industrial and Water Treatment segments, this line includes our non-bulk specialty products that we either manufacture, blend, repackage, resell in their original form, or direct ship to our customers in smaller quantities, and services we provide for our customers. For our Health and Nutrition segment, this line includes products manufactured, processed or repackaged in our facility and/or with our equipment.

Note 4 – Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net earnings by the weighted-average number of common shares outstanding. Diluted EPS includes the dilutive impact of incremental shares assumed to be issued as performance units and restricted stock.

Basic and diluted EPS were calculated using the following:


	Three Months Ended
	June 27, 2021	June 28, 2020
Weighted-average common shares outstanding—basic	21,034,302	21,031,456
Dilutive impact of performance units and restricted stock	144,018	253,890
Weighted-average common shares outstanding—diluted	21,178,320	21,285,346

For each of the periods presented, there were no shares excluded from the calculation of weighted-average common shares for diluted EPS.

Note 5 – Fair Value Measurements

Our financial assets and liabilities are measured at fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We classify the inputs used to measure fair value into the following hierarchy:



Level 1:						Quoted prices in active markets for identical assets or liabilities.
Level 2:						Quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for the asset or liability.
Level 3:						Unobservable inputs for the asset or liability that are supported by little or no market activity. These fair values are determined using pricing models for which the assumptions utilize management’s estimates or market participant assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis. The fair value hierarchy requires the use of observable market data when available. In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

Our financial assets that are measured at fair value on a recurring basis are assets held in a deferred compensation retirement plan. As of June 27, 2021 and March 28, 2021, the assets held in a deferred compensation retirement plan were classified as other long-term assets on our balance sheet, with the portion of the plan assets expected to be paid within twelve months classified as current assets on our balance sheet. The deferred compensation plan assets relate to contributions made to a non-qualified compensation plan on behalf of certain employees who are classified as “highly compensated employees” as determined by IRS guidelines. The assets are part of a rabbi trust and the funds are held in mutual funds. The fair value of the deferred compensation is based on the quoted market prices for the mutual funds at the end of the period.

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of June 27, 2021 and March 28, 2021.


(In thousands)		June 27, 2021		March 28, 2021
Assets
Deferred compensation plan assets	Level 1	$	7,517	$	5,946

Note 6– Assets Held for Sale

Included in assets held for sale as of March 28, 2021 was $0.7 million for an office building in St. Louis, Missouri which was utilized in the administration of our Industrial segment and $0.2 million for a water treatment branch located in Eldridge, Iowa, which has been relocated to another owned facility. Both were sold in the first quarter of fiscal 2022.

Note 7 – Inventories

Inventories at June 27, 2021 and March 28, 2021 consisted of the following:


	June 27, 2021		March 28, 2021
(In thousands)
Inventory (FIFO basis)	$	75,325	$	69,438
LIFO reserve	(7,382)		(5,574)
Net inventory	$	67,943	$	63,864

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $51.0 million at June 27, 2021 and $46.8 million at March 28, 2021. The remainder of the inventory was valued and accounted for under the FIFO method.

Note 8 – Goodwill and Intangible Assets

The carrying amount of goodwill was $70.8 million as of June 27, 2021 and $70.7 million as of March 28, 2021, of which $44.9 million was related to our Health and Nutrition segment, $19.3 million was related to our Water Treatment segment, and $6.5 million was related to our Industrial segment.

A summary of our intangible assets as of June 27, 2021 and March 28, 2021 is as follows:


	June 27, 2021						March 28, 2021
(In thousands)	Gross Amount		Accumulated Amortization		Net		Gross Amount		Accumulated Amortization		Net
Finite-life intangible assets
Customer relationships	$	99,588	$	(27,949)	$	71,639	$	99,588	$	(26,522)	$	73,066
Trademarks and trade names	6,210		(4,405)		1,805		6,210		(4,275)		1,935
Other finite-life intangible assets	3,833		(3,717)		116		3,833		(3,693)		140
Total finite-life intangible assets	109,631		(36,071)		73,560		109,631		(34,490)		75,141
Indefinite-life intangible assets	1,227		—		1,227		1,227		—		1,227
Total intangible assets	$	110,858	$	(36,071)	$	74,787	$	110,858	$	(34,490)	$	76,368

Note 9 – Debt

Debt at June 27, 2021 and March 28, 2021 consisted of the following:


	June 27, 2021		March 28, 2021

(In thousands)

Senior secured revolving loan	$	96,000	$	99,000

Less: unamortized debt issuance costs	(225)		(248)
Total debt, net of debt issuance costs	95,775		98,752
Less: current portion of long-term debt	(9,907)		(9,907)
Total long-term debt	$	85,868	$	88,845

Note 10 – Income Taxes

We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The tax years prior to our fiscal year ended April 1, 2018 are closed to examination by the Internal Revenue Service, and with few exceptions, state and local

income tax jurisdictions. Our effective tax rate for the three months ended June 27, 2021 was 24.4% and was 26.5% for the three months ended June 28, 2020. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes.

Note 11 – Leases

Lease Obligations. As of June 27, 2021, we were obligated under operating lease agreements for certain manufacturing facilities, warehouse space, the land on which some of our facilities sit, vehicles and information technology equipment. Our leases have remaining lease terms of 1 year to 23 years, some of which include options to extend the lease for up to 10 years.

As of June 27, 2021, our operating lease components with initial or remaining terms in excess of one year were classified on the condensed consolidated balance sheet within right of use assets, short-term lease liability and long-term lease liability.

Expense for leases less than 12 months was not material for the three months ended June 27, 2021 and June 28, 2020. Total lease expense was $0.7 million for both the three months ended June 27, 2021 and June 28, 2020.

Other information related to our operating leases was as follows:


	June 27, 2021		March 28, 2021
Lease Term and Discount Rate
Weighted average remaining lease term (years)	9.55		9.73
Weighted average discount rate	2.6	%	2.7	%

Maturities of lease liabilities as of June 27, 2021 were as follows:


(In thousands)	Operating Leases
Remaining fiscal 2022	$	1,803
Fiscal 2023	1,544
Fiscal 2024	1,343
Fiscal 2025	1,299
Fiscal 2026	1,242
Thereafter	5,969
Total	$	13,200
Less: Interest	(1,673)
Present value of lease liabilities	$	11,527

Note 12 – Share-Based Compensation

Performance-Based Restricted Stock Units. Our Board of Directors (the “Board”) approved a performance-based equity compensation arrangement for our executive officers during the first quarters of each of fiscal 2022 and fiscal 2021. These performance-based arrangements provide for the grant of performance-based restricted stock units that represent a possible future issuance of restricted shares of our common stock based on a pre-tax income target for the applicable fiscal year. The actual number of restricted shares to be issued to each executive officer is determined when our final financial information becomes available after the applicable fiscal year and will be between zero shares and 88,524 shares in the aggregate for fiscal 2022. The restricted shares issued, if any, will fully vest approximately two years after the last day of the fiscal year on which the performance is based. We are recording the compensation expense for the outstanding performance share units and the converted restricted stock over the life of the awards.

The following table represents the restricted stock activity for the three months ended June 27, 2021:


	Shares	Weighted- Average Grant Date Fair Value
Unvested at beginning of period	239,120	$	17.94
Granted	111,618	31.74
Vested	(123,002)	17.25

Unvested at end of period	227,736	$	25.08

We recorded compensation expense related to performance share units and restricted stock of $0.6 million for the three months ended June 27, 2021 and $0.5 million for the three June 28, 2020. Substantially all of the compensation expense was recorded in selling, general and administrative expenses in the condensed consolidated statements of income.

Restricted Stock Awards. As part of their retainers, each director who is not an executive officer receives an annual grant of restricted stock for their service on our Board. The restricted stock awards are expensed over the requisite vesting period, which is generally one year from the date of issuance, based on the market value on the date of grant. As of June 27, 2021, there were 11,228 shares of restricted stock with an average grant date fair value of $25.60 outstanding under this program. Compensation expense for both the three months ended June 27, 2021 and June 28, 2020 related to restricted stock awards to the Board was $0.1 million.

Note 13 – Share Repurchase Program

Our Board has authorized the repurchase of up to 1,600,000 shares of our outstanding common stock for cash on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. Upon purchase of the shares, we reduce our common stock for the par value of the shares with the excess applied against additional paid-in capital. During the three months ended June 27, 2021, we repurchased 100,954 shares at an aggregate purchase price of $3.4 million. During the three months ended June 28, 2020, no shares were repurchased. As of June 27, 2021, 450,552 shares remained available to be repurchased under the share repurchase program.

Note 14 – Segment Information

We have three reportable segments: Industrial, Water Treatment, and Health and Nutrition. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the fiscal year ended March 28, 2021.

We evaluate performance based on profit or loss from operations before income taxes not including nonrecurring gains and losses. Reportable segments are defined primarily by product and type of customer. Segments are responsible for the sales, marketing and development of their products and services. Other than our Health and Nutrition segment, the segments do not have separate accounting, administration, customer service or purchasing functions. We allocate certain corporate expenses to our operating segments. There are no intersegment sales and no operating segments have been aggregated. No single customer’s revenues amounted to 10% or more of our total revenue. Sales are primarily within the United States and all assets are located within the United States.

(In thousands)

Industrial

Water
Treatment

Health and Nutrition

Total

Three months ended June 27, 2021:

Sales