hwkn-20210926

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 September 26, 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 October 22, 2021
Common Stock, par value $.01 per share						21,112,683

HAWKINS, INC.

INDEX TO FORM 10-Q


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets –Septe m ber 2 6 , 2021 and March 28, 2021	1

	Condensed Consolidated Statements of Income – Three and Six Months Ended September 26 , 2021 and September 2 7 , 2020	2

	Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended September 26 , 2021 and September 27 , 2020	3

	Condensed Consolidated Statements of Shareholder’s Equity – Three and Six Months Ended September 26 , 2021 and September 27 , 2020	4

	Condensed Consolidated Statements of Cash Flows – Six Months Ended September 26 , 2021 and September 27 , 2020	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	20

Item 4.	Controls and Procedures	20

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Mine Safety Disclosures	21

Item 5.	Other Information	21

Item 6.	Exhibits	22

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HAWKINS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data)


	September 26, 2021		March 28, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,802	$	2,998
Trade accounts receivables, net	90,057		90,603
Inventories	70,338		63,864
Income taxes receivable	—		175
Prepaid expenses and other current assets	2,478		5,367
Total current assets	169,675		163,007
PROPERTY, PLANT, AND EQUIPMENT:	307,021		300,404
Less accumulated depreciation	163,910		155,792
Net property, plant, and equipment	143,111		144,612
OTHER ASSETS:
Right-of-use assets	11,045		11,630
Goodwill	72,417		70,720
Intangible assets, net of accumulated amortization	73,666		76,368
Other	7,890		6,213
Total other assets	165,018		164,931
Total assets	$	477,804	$	472,550
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable — trade	$	43,004	$	37,313
Accrued payroll and employee benefits	12,417		18,048
Income tax payable	877		—
Current portion of long-term debt	9,907		9,907
Short-term lease liability	1,625		1,587
Container deposits	1,528		1,452
Other current liabilities	2,191		2,155
Total current liabilities	71,549		70,462
LONG-TERM DEBT, LESS CURRENT PORTION	73,891		88,845
LONG-TERM LEASE LIABILITY	9,553		10,231
PENSION WITHDRAWAL LIABILITY	4,455		4,631
DEFERRED INCOME TAXES	24,445		24,445
DEFERRED COMPENSATION LIABILITY	8,289		7,322
OTHER LONG-TERM LIABILITIES	1,309		1,368
Total liabilities	193,491		207,304
COMMITMENTS AND CONTINGENCIES	—		—
SHAREHOLDERS’ EQUITY:
Common stock; authorized: 60,000,000 shares of $0.01 par value; 20,888,923 and 20,969,746 shares issued and outstanding as of September 26, 2021 and March 28, 2021, respectively	209		210
Additional paid-in capital	44,801		51,138
Retained earnings	239,303		213,898

Total shareholders’ equity	284,313		265,246
Total liabilities and shareholders’ equity	$	477,804	$	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				Six Months Ended
	September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
Sales	$	183,277	$	147,801	$	364,518	$	290,973
Cost of sales	(145,990)		(115,004)		(288,257)		(227,200)

Gross profit	37,287		32,797		76,261		63,773
Selling, general and administrative expenses	(17,679)		(16,221)		(34,535)		(31,259)
Operating income	19,608		16,576		41,726		32,514
Interest expense, net	(329)		(339)		(678)		(719)
Other income	184		327		416		804
Income before income taxes	19,463		16,564		41,464		32,599
Income tax expense	(5,330)		(4,374)		(10,703)		(8,621)
Net income	$	14,133	$	12,190	$	30,761	$	23,978

Weighted average number of shares outstanding - basic	20,986,542		21,055,782		21,010,422		21,053,022
Weighted average number of shares outstanding - diluted	21,140,087		21,245,762		21,168,809		21,268,562

Basic earnings per share	$	0.67	$	0.58	$	1.46	$	1.14
Diluted earnings per share	$	0.67	$	0.57	$	1.45	$	1.13

Cash dividends declared per common share	$	0.13000	$	0.11625	$	0.25250	$	0.23250

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
	September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
Net income	$	14,133	$	12,190	$	30,761	$	23,978
Other comprehensive loss, net of tax:

Unrealized gain on interest rate swap	—		39		—		29


Total comprehensive income	$	14,133	$	12,229	$	30,761	$	24,007

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
Cash dividends declared and paid	—	—		—		(2,756)		—		(2,756)
Share-based compensation expense	—	—		862		—		—		862
Vesting of restricted stock	11,228	—		—		—		—		—

ESPP shares issued	40,300	—		889		—		—		889
Shares repurchased	(109,009)	(1)		(4,019)		—		—		(4,020)

Net income	—	—		—		14,133		—		14,133
BALANCE — September 26, 2021	20,888,923	$	209	$	44,801	$	239,303	$	—	$	284,313




















	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	—

SEC Form 10-Q filed by Hawkins, Inc.