hwkn-20230101

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 January 1, 2023


☐			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 January 27, 2023
Common Stock, par value $.01 per share						21,052,277

HAWKINS, INC.

INDEX TO FORM 10-Q


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets –January 1 , 202 3 and April 3,2022	1

	Condensed Consolidated Statements of Income – Three and Nin e Months Ended January 1 , 202 3 and Dece mber 26, 2021	2

	Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended January 1, 2023 and December 26, 2021	3

	Condensed Consolidated Statements of Shareholder’s Equity – Three and Nine Months Ended January 1, 2023 and December 26, 2021	4

	Condensed Consolidated Statements of Cash Flows – Nine Months Ended January 1, 2023 and December 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)


	January 1, 2023		April 3, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,146	$	3,496
Trade accounts receivables, net	125,471		122,826
Inventories	101,581		94,985

Prepaid expenses and other current assets	7,050		6,431
Total current assets	240,248		227,738
PROPERTY, PLANT, AND EQUIPMENT:	333,781		304,055
Less accumulated depreciation	155,406		142,209
Net property, plant, and equipment	178,375		161,846
OTHER ASSETS:
Right-of-use assets	10,551		10,606
Goodwill	77,401		77,401
Intangible assets, net of accumulated amortization	74,946		80,193
Deferred compensation plan asset	6,987		6,783
Other	5,496		2,761
Total other assets	175,381		177,744
Total assets	$	594,004	$	567,328
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable — trade	$	50,573	$	66,693
Accrued payroll and employee benefits	16,320		19,034
Income tax payable	1,801		39
Current portion of long-term debt	9,913		9,913
Short-term lease liability	1,689		1,657

Other current liabilities	4,584		4,130
Total current liabilities	84,880		101,466
LONG-TERM DEBT, LESS CURRENT PORTION	120,710		115,644
LONG-TERM LEASE LIABILITY	9,082		9,143
PENSION WITHDRAWAL LIABILITY	4,004		4,276
DEFERRED INCOME TAXES	24,297		23,422
DEFERRED COMPENSATION LIABILITY	8,384		8,402
OTHER LONG-TERM LIABILITIES	1,487		2,374
Total liabilities	252,844		264,727
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock; authorized: 60,000,000 shares of $0.01 par value; 20,850,454 and 20,889,777 shares issued and outstanding as of January 1, 2023 and April 3, 2022, respectively	209		209
Additional paid-in capital	43,388		46,717
Retained earnings	293,969		254,384
Accumulated other comprehensive income	3,594		1,291
Total shareholders’ equity	341,160		302,601
Total liabilities and shareholders’ equity	$	594,004	$	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				Nine Months Ended
	January 1, 2023		December 26, 2021		January 1, 2023		December 26, 2021
Sales	$	219,218	$	187,050	$	706,953	$	551,568
Cost of sales	(182,947)		(153,110)		(577,559)		(441,367)

Gross profit	36,271		33,940		129,394		110,201
Selling, general and administrative expenses	(21,004)		(19,681)		(59,727)		(54,216)
Operating income	15,267		14,259		69,667		55,985
Interest expense, net	(1,546)		(317)		(3,858)		(995)
Other income (expense)	465		132		(744)		548
Income before income taxes	14,186		14,074		65,065		55,538
Income tax expense	(3,453)		(3,870)		(16,637)		(14,573)
Net income	$	10,733	$	10,204	$	48,428	$	40,965

Weighted average number of shares outstanding - basic	20,818,347		20,885,232		20,847,285		20,968,692
Weighted average number of shares outstanding - diluted	20,974,264		21,054,603		21,004,849		21,142,515

Basic earnings per share	$	0.52	$	0.49	$	2.32	$	1.95
Diluted earnings per share	$	0.51	$	0.48	$	2.31	$	1.94

Cash dividends declared per common share	$	0.1400	$	0.1300	$	0.4200	$	0.3825

See accompanying notes to condensed consolidated financial statements.

HAWKINS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)


	Three Months Ended				Nine Months Ended
	January 1, 2023		December 26, 2021		January 1, 2023		December 26, 2021
Net income	$	10,733	$	10,204	$	48,428	$	40,965
Other comprehensive income, net of tax:

Unrealized (loss) gain on interest rate swap	(139)		—		2,303		—


Total comprehensive income	$	10,594	$	10,204	$	50,731	$	40,965

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)

SEC Form 10-Q filed by Hawkins Inc.