10q10k10q10k.net

What changed in HAWKINS INC's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of HAWKINS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+145 added−127 removedSource: 10-K (2025-05-14) vs 10-K (2024-05-15)

Top changes in HAWKINS INC's 2025 10-K

145 paragraphs added · 127 removed · 111 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

16 edited+15 added−0 removed23 unchanged
Biggest changeOur Water Treatment Group specializes in providing chemicals, products, equipment, services and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water and agricultural water. This group has the resources and flexibility to treat systems ranging in size from a single small well to a multi-million-gallon-per-day facility.
Biggest changeWe conduct our business in three segments: Water Treatment, Industrial, and Health and Nutrition. Water Treatment Segment. Our Water Treatment Group specializes in providing chemicals, products, equipment, services and solutions for potable water, municipal and industrial wastewater, industrial process water, mainly non-residential swimming pool water and agricultural water.
The Industrial Group: • Manufactures sodium hypochlorite (bleach), certain food-grade and pharmaceutical products, including liquid phosphates, lactates and other blended products, and agricultural products; • Receives, stores and distributes various chemicals in bulk quantities, including liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia and potassium hydroxide; • Repackages water treatment chemicals for our Water Treatment Group and bulk industrial chemicals to sell in smaller quantities to our customers; and • Performs custom blending of chemicals according to customer formulas and specifications.
The Industrial Group: • Manufactures sodium hypochlorite (bleach), certain food and pharmaceutical-grade products, including liquid phosphates, lactates and other blended products, and agricultural products; • Receives, stores and distributes various chemicals in bulk quantities, including liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia and potassium hydroxide; • Repackages water treatment chemicals for our Water Treatment Group and bulk industrial chemicals to sell in smaller quantities to our customers; and • Performs custom blending of chemicals according to customer formulas and specifications.
The group’s extensive product portfolio combined with value-added services, including product formulation, sourcing and distribution, and processing and blending, positions this group as a one-stop ingredient solutions provider to its customers. The group also follows rigorous quality control and compliance processes to provide reliable, high-quality products to its customers.
The group’s extensive product portfolio, combined with value-added services, including product formulation, sourcing, distribution, processing and blending, positions this group as a one-stop ingredient solutions provider to its customers. The group also follows rigorous quality control and compliance processes to provide reliable, high-quality products to its customers.
The DOT governs transportation matters including authorization to engage in motor carrier service, including the necessary permits to conduct our businesses, equipment operation, and safety. 2 The manufacture, packaging, labeling, advertising, promotion, distribution and sale of our agricultural, food, pharmaceutical, pesticide and health and nutrition products are subject to regulation by numerous national and local governmental agencies in the United States and other countries.
The DOT governs transportation matters, including authorization to engage in motor carrier service, including the necessary permits to conduct our businesses, equipment operation, and safety. 2 The manufacture, packaging, labeling, advertising, promotion, distribution and sale of our agricultural, food, pharmaceutical and health and nutrition products are subject to regulation by numerous national and local governmental agencies in the United States and other countries.
ITEM 1. BUSINESS We are a leading specialty chemical and ingredients company that formulates, distributes, blends and manufactures products for our Industrial, Water Treatment and Health and Nutrition customers. We believe that we create value for our customers through superb service and support, quality products, personalized applications and trustworthy, creative employees.
ITEM 1. BUSINESS We are a leading water treatment and specialty ingredients company that formulates, manufactures, distributes, and blends products for our Water Treatment, Industrial and Health and Nutrition customers. We believe that we create value for our customers through superb service and support, quality products, personalized applications and trustworthy, creative employees.
We also believe that there are significant synergies between our Water Treatment and Industrial Groups that allow us to obtain a competitive cost position on many of the chemicals sold by the Water Treatment Group due to the volumes of these chemicals purchased by our Industrial Group.
We also believe that there are significant synergies between our Water Treatment and Industrial Groups that allow us to obtain a competitive cost position on many of the chemicals sold by the Water Treatment Group due to the large volumes of these chemicals purchased by our Industrial Group.
It is our policy to comply fully with all applicable laws relating to discrimination in the workplace and are committed to advancing an inclusive, collaborative and respectful culture. The health and safety of our employees is our highest priority.
It is our policy to comply fully with all applicable laws relating to discrimination in the workplace and we are committed to advancing an inclusive, collaborative and respectful culture. The health and safety of our employees is our highest priority.
We regard many of the formulas, information and processes that we generate and use in the conduct of our business as proprietary and protectable under applicable copyright, patent, trademark, trade secret and unfair competition laws. Customer Concentration. In fiscal 2024, none of our customers accounted for 10% or more of our total sales. Competition.
We regard many of the formulas, information and processes that we generate and use in the conduct of our business as proprietary and protectable under applicable copyright, patent, trademark, trade secret and unfair competition laws. Customer Concentration. In fiscal 2025, none of our customers accounted for 10% or more of our total sales. Competition.
In addition, we operate a fleet of more than 350 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the U.S. Department of Transportation (“DOT”).
In addition, we operate a fleet of approximately 400 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the U.S. Department of Transportation (“DOT”).
We conduct our business in three segments: Industrial, Water Treatment, and Health and Nutrition. Industrial Segment. Our Industrial Group specializes in providing industrial chemicals, products and services to industries such as agriculture, chemical processing, electronics, energy, food, pharmaceutical and plating. This group’s principal products are acids, alkalis and food-grade and pharmaceutical salts and ingredients.
Our Industrial Group specializes in providing industrial chemicals, products and services to industries such as agriculture, chemical processing, electronics, energy, food, pharmaceutical and plating. This group’s principal products are acids, alkalis and food and pharmaceutical-grade salts and ingredients.
As of March 31, 2024, we had 934 employees across the United States, of which 928 were full-time employees. Approximately 41% of our employees were female or racially and ethnically diverse, and approximately 10% were covered by a collective bargaining agreement.
As of March 30, 2025, we had 1,035 employees across the United States, of which 1,031 were full-time employees. Approximately 45% of our employees were female or racially and ethnically diverse, and approximately 9% were covered by a collective bargaining agreement.
Our Water Treatment Group has historically experienced higher sales during April to September, primarily due to a seasonal increase in chemicals used by municipal water treatment facilities. Health and Nutrition Segment.
We expect to continue to invest in existing and new branches to expand the group’s geographic coverage. Our Water Treatment Group has historically experienced higher sales during April to September, primarily due to a seasonal increase in chemicals used by municipal water treatment facilities and pools. Industrial Segment.
Agricultural sales within this group tend to be seasonal, with higher sales during the typical planting season of March through June given the regions of the country we serve. Water Treatment Segment.
Agricultural sales within this group tend to be seasonal, with higher sales during the typical planting season of March through June given our concentration in the upper Midwest. Health and Nutrition Segment.
The group utilizes delivery routes operated by our employees who typically serve as route driver, salesperson and trained technician to deliver our products and diagnose our customers’ water treatment needs.
This group has the resources and flexibility to treat systems ranging in size from a single small well to a multi-million-gallon-per-day facility. The group utilizes delivery routes operated by our employees who typically serve as route driver, salesperson and trained technician to deliver our products and diagnose our customers’ water treatment needs.
In addition, our Industrial and Water Treatment groups share certain resources, which leverage fixed costs across both groups. The Water Treatment group operates out of 47 warehouses supplying products and services to customers in 46 states. We expect to continue to invest in existing and new branches to expand the group’s geographic coverage.
In addition, our Water Treatment and Industrial groups share certain resources, which leverage fixed costs across both groups. The Water Treatment group operates out of 50 warehouses, primarily located in the eastern two-thirds of the United States, supplying products and services to customers in nearly all 50 states.
The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding our company at http://www.sec.gov. 3
The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding our company at http://www.sec.gov. Information about our Executive Officers Our current executive officers, their ages and offices held, are set forth below: Name Age Office Patrick H. Hawkins 54 Chief Executive Officer and President Jeffrey P.
Added
Oldenkamp 52 Executive Vice President, Chief Financial Officer and Treasurer Richard G. Erstad 61 Vice President, General Counsel and Secretary Drew M. Grahek 55 Vice President — Operations Greg A. Jones 44 Vice President — Food and Health Sciences Douglas A. Lange 55 Vice President — Water Treatment Group David J. Mangine 67 Vice President — Industrial Solutions Shirley A.
Added
Rozeboom 63 Vice President — Health and Nutrition 3 Patrick H. Hawkins has been our Chief Executive Officer and President and member of our board since 2011. Mr. Hawkins has held the position of President since 2010.
Added
He joined the Company in 1992 and served as the Business Director - Food and Pharmaceuticals, a position he held from 2009 to 2010. Previously he served as Business Manager - Food and Co-Extrusion Products from 2007 to 2009 and Sales Representative - Food Ingredients from 2002 to 2007.
Added
He previously served the Company in various other capacities, including Plant Manager, Quality Director and Technical Director. Jeffrey P. Oldenkamp has been our Executive Vice President, Chief Financial Officer and Treasurer since October 2021. Mr. Oldenkamp joined Hawkins in May 2017 and assumed the role of Chief Financial Officer, Vice President and Treasurer in June 2017.
Added
Oldenkamp was with MTS Systems Corporation, a supplier of high-performance test systems and sensors, where he served as Chief Financial Officer from 2015 to May 2017 and as Vice President of Finance for the MTS Test business from 2014 to 2015, and with Nilfisk-Advance, Inc., a global manufacturer of professional cleaning equipment, where he served as Americas Operations Chief Financial Officer and Vice President from 2012 to 2014.
Added
Richard G. Erstad has been our Vice President, General Counsel and Secretary since 2008. Mr. Erstad was General Counsel and Secretary of BUCA, Inc., a restaurant company, from 2005 to 2008. Mr.
Added
Erstad had previously been an attorney with the corporate group of Faegre & Benson LLP, a law firm, from 1996 to 2005, where his practice focused on securities law and mergers and acquisitions. He is a member of the Minnesota Bar. Drew M. Grahek has been our Vice President - Operations since September 2018. Prior to joining Hawkins, Mr.
Added
Grahek was Adjunct Faculty at the University of Minnesota College of Continuing Education and a Business Administrator in the Archdiocese of St.
Added
Paul and Minneapolis from June 2017 to June 2018; Director of Service Operations and Supply Chain with Ulta Beauty, Inc. from April 2016 to June 2017; and Director of Stores with Field and Stream Outdoor Stores, a division of Dick’s Sporting Goods, Inc. from July 2015 to April 2016.
Added
Previously, he spent a total of 23 years at Target Corporation in a variety of operations, merchandising and property management positions. Greg A. Jones has been our Vice President - Food & Health Sciences since April 2025. Prior to attaining this position, Mr. Jones served as our as Vice President of Business since April 2024. Prior to joining Hawkins, Mr.
Added
Jones was a Global General Manager and Vice President for Kerry Taste & Nutrition, a global manufacturer of specialized food ingredients, from 2019-2024; and with Winpak, a global manufacturer of high barrier packaging and equipment, where he served as U.S. Director of Sales from 2017-2019 and U.S. Manager of sales from 2010-2017. Douglas A.
Added
Lange has been our Vice President - Water Treatment Group since June 2020. Prior to attaining this position, Mr. Lange served the Company as General Manager and Product Development Manager for the Water Treatment Group after joining the company in January 2019. Prior to joining the Company, Mr. Lange was with H.B.
Added
Fuller Company, a global supplier of special adhesives, where he served as Global Marketing Manager and Product Manager for specialty markets in electronics and wood products from 2011 to January 2019. Mr. Lange served in various roles in the specialty adhesives market for a total of 21 years prior to joining the Company. David J.
Added
Mangine has been our Vice President - Industrial Group since 2021. Prior to attaining this position, Mr. Mangine served as the Industrial Sales Manager from 2011 to 2021, after joining Hawkins in 2000 as an Account Manager. Shirley A. Rozeboom has been our Vice President - Health and Nutrition since 2019. Prior to attaining this position, Ms.
Added
Rozeboom held the position of Senior Vice President of Sales for Stauber from 2012 to 2019, Director of Sales from 2008 to 2012 and Account Executive from 2000 to 2008. 4

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

30 edited+7 added−0 removed86 unchanged
Biggest changeThe prices we pay for our principal chemical raw materials generally lag the market prices of the underlying raw material. The cost of inventory we have on hand, particularly inventories of our bulk commodity chemicals where we have significant volumes stored at our facilities, generally will lag the current market pricing of such inventory.
Biggest changeThe cost of inventory we have on hand, particularly inventories of our bulk commodity chemicals where we have significant volumes stored at our facilities, generally will lag the current market pricing of such inventory. The pricing within our supply contracts generally adjusts quarterly or monthly.
In recent years, unprecedented congestion in ocean shipping adversely impacted the reliability of our imported raw materials, and transport driver shortages caused extended lead times for domestic shipments. In addition, rail shipments can be unreliable, with significant delays in service and increased costs. The impacts of high-profile derailments could further degrade service levels and cause railroads to increase costs.
In recent years, unprecedented congestion in ocean shipping adversely impacted the reliability of our imported raw materials, and transport driver shortages have caused extended lead times for domestic shipments. In addition, rail shipments can be unreliable, with significant delays in service and increased costs. The impacts of high-profile derailments could further degrade service levels and cause railroads to increase costs.
Our Water Treatment Group and our agricultural product sales within our Industrial Group are subject to seasonality and weather conditions, which could adversely affect our results of operations. Our Water Treatment Group has historically experienced higher sales during April to September, primarily due to a seasonal increase in chemicals used by municipal water treatment facilities.
Our Water Treatment Group and our agricultural product sales within our Industrial Group are subject to seasonality and weather conditions, which could adversely affect our results of operations. Our Water Treatment Group has historically experienced higher sales during April to September, primarily due to a seasonal increase in chemicals used by municipal water treatment facilities and pools.
We have in the past been, and may in the future be, subject to claims relating to exposure to hazardous materials and the associated liabilities may be material. 9 Many of our products, particularly our food, pharmaceutical and health and nutrition products are subject to government regulation, both in the United States and abroad, which could increase our costs significantly and limit or prevent the sale of such products.
We have in the past been, and may in the future be, subject to claims relating to exposure to hazardous materials and the associated liabilities may be material. 11 Many of our products, particularly our food, pharmaceutical and health and nutrition products are subject to government regulation, both in the United States and abroad, which could increase our costs significantly and limit or prevent the sale of such products.
In addition, we operate or own facilities located on or near real property that was formerly owned and operated by others. These properties may have been used in ways that involved hazardous materials. Contaminates may migrate from, within or through any such property, which may give rise to claims against us.
In addition, we operate or own facilities located on or near real property that was formerly owned and operated by others. These properties may have been used in ways that involved hazardous materials. Contaminants may migrate from, within or through any such property, which may give rise to claims against us.
We may make payments on the Revolving Loan Facility from time to time. If we are unable to generate sufficient cash flow or otherwise obtain funds necessary to make payments on our credit facilities, we could be in default when the facilities become due in 2027. We are also required to comply with several financial covenants under the Credit Agreement.
We may make payments on the Revolving Loan Facility from time to time. If we are unable to generate sufficient cash flow or otherwise obtain funds necessary to make payments on our credit facilities, we could be in default when the facilities become due in 2030. We are also required to comply with several financial covenants under the Credit Agreement.
Constraints on the supply or delivery of critical raw materials could disrupt our operations and adversely affect the performance of our businesses. 5 Demand for our products is affected by general economic conditions and by the cyclical nature of many of the industries we serve, which could cause significant fluctuations in our sales volumes and results.
Constraints on the supply or delivery of critical raw materials could disrupt our operations and adversely affect the performance of our businesses. 6 Demand for our products is affected by general economic conditions and by the cyclical nature of many of the industries we serve, which could cause significant fluctuations in our sales volumes and results.
Any of these government agencies, as well as legislative bodies, can change existing regulations, or impose new ones, or could take aggressive measures, causing or contributing to a variety of negative consequences, which may include one or more of the following: • stopping the sale of products, • requirements for the reformulation of certain or all products to meet new standards, • the recall or discontinuance of certain or all products, • additional record-keeping requirements, • expanded documentation of the properties of certain or all products, • expanded or different labeling, • adverse event tracking and reporting, and • additional scientific substantiation.
Any of these government agencies, as well as legislative bodies, can change existing regulations, or impose new ones, or could take aggressive measures, causing or contributing to a variety of negative consequences, which may include one or more of the following: • stopping the sale of products, • reducing the markets or marketability of products, • requirements for the reformulation of certain or all products to meet new standards, • the recall or discontinuance of certain or all products, • additional record-keeping requirements, • expanded documentation of the properties of certain or all products, • expanded or different labeling, • adverse event tracking and reporting, and • additional scientific substantiation.
There can be no assurance that the regulatory environment in which we operate will not change or that such regulatory environment, or any specific action taken against us, will not result in a material adverse effect on us. 10 FINANCIAL RISKS The insurance that we maintain may not fully cover all potential exposures.
There can be no assurance that the regulatory environment in which we operate will not change or that such regulatory environment, or any specific action taken against us, will not result in a material adverse effect on us. 12 FINANCIAL RISKS The insurance that we maintain may not fully cover all potential exposures.
We cannot accurately predict the amount and timing of any impairment of goodwill and other intangible assets. Should the value of these assets become impaired, there could be a material adverse effect on our financial condition and consolidated results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 11
We cannot accurately predict the amount and timing of any impairment of goodwill and other intangible assets. Should the value of these assets become impaired, there could be a material adverse effect on our financial condition and consolidated results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 13
We cannot assure you that seasonality or fluctuating weather conditions will not have a material adverse effect on our results of operations. 6 OPERATIONAL RISKS Disruptions within our supply chain have negatively impacted, and could continue to negatively impact, our production, financial condition and results of operations.
We cannot assure you that seasonality or fluctuating weather conditions will not have a material adverse effect on our results of operations. 7 OPERATIONAL RISKS Disruptions within our supply chain have negatively impacted, and could continue to negatively impact, our production, financial condition and results of operations.
The cost to relocate our operations could have a material adverse effect on our results of operations and financial condition. 8 LEGAL AND REGULATORY RISKS Environmental, health and safety, transportation and storage laws and regulations cause us to incur substantial costs and may subject us to future liabilities and risks.
The cost to relocate our operations could have a material adverse effect on our results of operations and financial condition. 10 LEGAL AND REGULATORY RISKS Environmental, health and safety, transportation and storage laws and regulations cause us to incur substantial costs and may subject us to future liabilities and risks.
The unanticipated departure of key members of our management team could have an adverse impact on our business. 7 We may not be able to successfully consummate future acquisitions or dispositions or integrate acquisitions into our business, which could result in unanticipated expenses and losses.
The unanticipated departure of key members of our management team could have an adverse impact on our business. 8 We may not be able to successfully consummate future acquisitions or dispositions or integrate acquisitions into our business, which could result in unanticipated expenses and losses.
We are highly dependent upon consumers’ perception of the safety and quality of products that contain our ingredients as well as similar products distributed by other companies. Thus, the mere publication of reports asserting that such products may be harmful could have a material adverse effect on us, regardless of whether these reports are scientifically supported.
We are highly dependent upon consumers’ perception of the safety and quality of products that contain our ingredients as well as similar products distributed by other companies. Thus, the mere assertion that such products may be harmful could have a material adverse effect on us, regardless of whether these reports are scientifically supported.
This negative public perception may include publicity regarding the risks, efficacy, legality or quality of particular ingredients or products in general or of other companies or our products or ingredients specifically. Negative public perception may also arise from regulatory investigations, regardless of whether those investigations involve us.
This negative public perception may include publicity regarding the risks, efficacy, legality or quality of particular ingredients or products in general or of other companies or our products or ingredients specifically. Negative public perception may also arise from regulatory investigations, regardless of whether those investigations involve us, or negative statements made to the public.
We are audited periodically by the DOT to ensure that we are in compliance with various safety, hours-of-service, and other rules and regulations.
We are audited periodically by the DOT to ensure that we are in compliance with various safety, hazardous materials, hours-of-service, and other rules and regulations.
Many of our facilities are near significant residential populations which increases the risk of negative public or political reaction should an environmental issue occur and could lead to adverse zoning or other regulatory actions that could limit our ability to operate our business in those locations.
Many of our facilities are near significant residential populations, which increases the risk of negative public or political reaction should an environmental issue occur and could lead to adverse land use or other regulatory actions that could limit our ability to grow or operate our business in those locations.
In addition, we operate a fleet of more than 350 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the DOT. The DOT governs transportation matters including authorization to engage in motor carrier service, including the necessary permits to conduct our businesses, equipment operation, and safety.
In addition, we operate a fleet of approximately 400 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the DOT. The DOT governs transportation matters including authorization to engage in motor carrier service, including the necessary permits to conduct our businesses, equipment operation, and safety.
The availability and reliability of truck transportation has been negatively impacted by a number of factors, including limited availability of qualified drivers and equipment, limitations on drivers’ hours of service and failures of critical infrastructure, such as bridges.
The availability and reliability of truck transportation have been negatively impacted by a number of factors, including limited availability of qualified drivers and equipment, limitations on drivers’ hours of service and failures of critical infrastructure, such as bridges and rail lines.
The pricing within our supply contracts generally adjusts quarterly or monthly. While we attempt to maintain competitive pricing and stable margin dollars, the potential variance in our cost of inventory from the current market pricing can cause significant volatility in our margins realized. We do not engage in futures or other derivatives contracts to hedge against fluctuations in future prices.
While we attempt to maintain competitive pricing and stable margin dollars, the potential variance in our cost of inventory from the current market pricing can cause significant volatility in our margins realized. We do not engage in futures or other derivatives contracts to hedge against fluctuations in future prices.
In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain. Failure to comply with the covenants under our credit facility may have a material adverse effect. We are party to a credit agreement (the “Credit Agreement”) with U.S. Bank National Association ("U.S.
In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain. Failure to comply with the covenants under our credit facility may have a material adverse effect. We are party to a second amended and restated credit agreement, as amended (the “Credit Agreement”), with U.S.
The costs of transporting our products or necessary raw materials could be negatively affected by factors outside of our control, including rail service interruptions or rate increases, extreme weather events, tariffs, rising fuel costs and capacity constraints.
The costs of transporting our products or necessary raw materials could be negatively affected by factors outside of our control, including rail service interruptions or rate increases, extreme weather events, tariffs, charges placed on incoming vessels or railcars, rising fuel costs and capacity constraints.
Reductions in demand for our products could adversely affect our sales and financial results and result in facility closures. 4 Adverse publicity or negative public perception regarding particular ingredients or products or the dietary supplement industry in general could adversely affect the financial performance of those portions of our business.
Reductions in demand for our products could adversely affect our sales and financial results and result in facility closures. 5 Adverse publicity or negative public perception regarding particular ingredients or products could adversely affect the financial performance of those portions of our business.
Purchasing decisions made by consumers of products that contain our ingredients may be affected by adverse publicity or negative public perception regarding particular ingredients or products or the dietary supplement industry in general.
Purchasing decisions made by consumers of products that contain our ingredients may be affected by adverse publicity or negative public perception regarding particular ingredients or products, such as fluoride, other chemicals used in food, or industries in general, such as the dietary supplement industry.
Bank") and other lenders (collectively, the “Lenders”), which includes secured revolving credit facilities (the “Revolving Loan Facility”) totaling $250.0 million. The Revolving Loan Facility includes a $10.0 million letter of credit subfacility and $25.0 million swingline subfacility. At March 31, 2024, we had $99.0 million outstanding under the Revolving Loan Facility.
Bank National Association ("U.S. Bank") and other lenders (collectively, the “Lenders”), which includes secured revolving credit facilities (the “Revolving Loan Facility”) totaling $400.0 million. The Revolving Loan Facility includes a $10.0 million letter of credit subfacility and a $25.0 million swingline subfacility. At March 30, 2025, we had $149 million outstanding under the Revolving Loan Facility.
The primary regulatory bodies in the United States are the Food and Drug Administration (the “FDA”), the Environmental Protection Agency, the United States Department of Agriculture and the Federal Trade Commission, and we are also subject to similar regulators in other countries. Failure to comply with these regulatory requirements may result in various types of penalties or fines.
The primary regulatory bodies in the United States are the Food and Drug Administration (the “FDA”), the Environmental Protection Agency, the United States Department of Agriculture and the Federal Trade Commission, and we are also subject to similar regulators in other countries.
Demand for our products is affected by general economic conditions. A decline in general economic or business conditions in the industries served by our customers could have a material adverse effect on our businesses.
Demand for our products is affected by general economic conditions. A decline in general economic or business conditions in the industries served by our customers, whether caused by inflation, monetary policy, import or export restrictions or delays, tariffs, or otherwise, could have a material adverse effect on our businesses.
Those fluctuations can be significant and occur rapidly. The cyclicality of commodity markets, such as the market for caustic soda, primarily results from changes in the balance between supply and demand and the level of general economic activity. We cannot predict whether the markets for our raw materials will favorably impact or negatively impact the margins we can realize.
Those fluctuations can be significant and occur rapidly. The cyclicality of commodity markets, such as the market for caustic soda, primarily results from changes in the balance between supply and demand and the level of general economic activity. In addition, tariffs imposed by the United States or other countries could substantially impact the price or supply of raw materials.
We may not be able to renew our leases of land where four of our operations facilities reside. We lease the land where our three main terminals are located and where another significant manufacturing plant is located. These leases, including all renewal periods, have expiration dates from 2024 to 2044.
We are unable to accurately predict the duration and extent to which tariffs may impact our businesses. We may not be able to renew our leases of land where four of our operations facilities reside. 9 We lease the land where our three main terminals are located and where another significant manufacturing plant is located.
Federal law imposes site security requirements, specifically on chemical facilities, which have increased our overhead expenses. Federal regulations have also been adopted to increase the security of the transportation of hazardous chemicals in the United States.
With the expiration of the federal law that imposed site security requirements, various states have started to explore their own security requirements, which may not be uniform and compliance with such varied regulations may increase our overhead expenses. Federal regulations have also been adopted to increase the security of the transportation of hazardous chemicals in the United States.
Added
We cannot predict whether the markets for our raw materials will favorably impact or negatively impact the margins we can realize. The prices we pay for our principal chemical raw materials generally lag the market prices of the underlying raw material.
Added
Our businesses could experience substantial effects from tariffs or changes in international trade policies that could adversely affect our results of operations. New or increased tariffs or other trade barriers imposed by governments, including the United States, could dramatically increase costs and delivery times within our supply chain.
Added
Certain of our business lines, such as our health and nutrition products, are dependent upon the import of key raw materials from a wide variety of international sources. In addition, many domestic suppliers rely on imported raw materials or parts for their production.
Added
Tariffs or other trade barriers could adversely affect our ability to source and import raw materials effectively, the cost of import and domestic products and our relative position compared to competitors that may not be adversely impacted to the same extent, whether due to exclusive domestic sources or alignment with favorable jurisdictions.
Added
Our domestic suppliers, who may not be directly impacted by tariffs or other trade barriers, may also opportunistically increase prices or experience shortages in supply as competitors seek switch to domestic suppliers. Additionally, uncertainty inspired by the threat of changes in international trade policy could delay or reduce demand for our products.
Added
These leases, including all renewal periods, have expiration dates from 2025 to 2044, one of which with an annual renewal period.
Added
Recently, various of these regulatory bodies have announced significant changes to regulations, including changes in enforcement activities, as well as statements about attempts to prohibit the use of certain chemicals in food and drinking water, such as fluoride. Failure to comply with these requirements may result in various types of penalties or fines.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+0 added−0 removed8 unchanged
Biggest changeThe CIO is continually informed about the latest threats and developments in cybersecurity, including potential threats and innovative risk management techniques. This ongoing knowledge acquisition is important for the effective prevention, detection, mitigation, and remediation of cybersecurity incidents.
Biggest changeHe is a member of the local Infragard chapter and a regular speaker on cybersecurity topics at the Chlorine Institute. Additionally, the senior security and network engineering team has decades of experience in network and application security. The CIO is continually informed about the latest threats and developments in cybersecurity, including potential threats and innovative risk management techniques.
However, even well-designed and implemented cybersecurity programs cannot completely eliminate cybersecurity threats, and we cannot guarantee that such events or material impacts will not occur in the future. 12
However, even well-designed and implemented cybersecurity programs cannot completely eliminate cybersecurity threats, and we cannot guarantee that such events or material impacts will not occur in the future. 14
We classify and track these events based on significance and implement remediation actions that we consider appropriate to address the risks relating to such incidents. We have not experienced any cybersecurity incident and the risks presented by cybersecurity threats have not materially impacted our business strategy, results of operations or financial condition.
We classify and track these events based on significance and implement remediation actions that we consider appropriate to address the risks relating to such incidents. We have not experienced any cybersecurity incident, and the risks presented by cybersecurity threats have not materially affected, and are not reasonably likely to materially affect, our business strategy, results of operations or financial condition.
Management reports at least twice yearly to the audit committee on the status of our cybersecurity efforts, including assessments of significant risks identified and actions designed to mitigate such risks.
This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. Management reports at least twice yearly to the audit committee on the status of our cybersecurity efforts, including assessments of significant risks identified and actions designed to mitigate such risks.
The CIO implements and oversees processes based on the National Institute of Standards and Technology ("NIST") cybersecurity framework and is responsible for the regular monitoring of our information systems. This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities.
This ongoing knowledge acquisition is important for the effective prevention, detection, mitigation, and remediation of cybersecurity incidents. The CIO implements and oversees processes based on the National Institute of Standards and Technology ("NIST") cybersecurity framework and is responsible for the regular monitoring of our information systems.
Our Chief Information Officer ("CIO") is responsible for implementing our cybersecurity strategy, developing policies and procedures, and ensuring that appropriate resources are allocated to cybersecurity initiatives. The CIO and senior network and security resources at Hawkins have decades of experience in cybersecurity practices and compliance.
Our Chief Information Officer ("CIO") is responsible for implementing our cybersecurity strategy, developing policies and procedures, and ensuring that appropriate resources are allocated to cybersecurity initiatives. Our CIO has over 25 years of experience in the information technology field, including consulting on cybersecurity risks and mitigation in a variety of industries.

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−1 removed2 unchanged
Biggest changeThis facility includes outside storage tanks for the storage of liquid bulk chemicals, as well as smaller tanks for storing and mixing chemicals. (4) The land for this facility is leased from a third party. The lease expires in May 2024, with automatic one-year renewal periods.
Biggest changeThis facility includes outside storage tanks for the storage of liquid bulk chemicals, as well as smaller tanks for storing and mixing chemicals. (4) The land for this facility is leased from a third party, with automatic one-year renewal periods. (5) The land for these facilities is leased from the Port Authority of the City of St. Paul, Minnesota.
Square Feet Corporate headquarters Roseville, MN 50,000 Health and Nutrition Fullerton, CA (1) 56,000 Florida, NY (2) 107,000 Industrial Minneapolis, MN (3) Rail 177,000 Centralia, IL (3) Rail 121,000 Dupo, IL (3) (4) Rail 64,000 St. Paul, MN (3) (5) Rail/Barge 32,000 Rosemount, MN (3) Rail 153,000 Industrial and Water Treatment St.
Square Feet Corporate headquarters Roseville, MN 50,000 Health and Nutrition Fullerton, CA (1) 56,000 Florida, NY (2) 107,000 Industrial Minneapolis, MN (3) Rail 177,000 Centralia, IL (3) Rail 121,000 Dupo, IL (3) (4) (6) Rail 64,000 St. Paul, MN (3) (5) Rail/Barge 32,000 Rosemount, MN (3) Rail 158,000 Industrial and Water Treatment St.
(2) This is comprised of (i) a 79,000 square foot manufacturing plant which sits on approximately 16 acres and (ii) a leased 28,000 square foot warehouse located in close proximity that is leased until December 2025. (3) This is a manufacturing and/or distribution facility owned by the Company.
The lease runs through January 2026. (2) This is comprised of (i) a 79,000 square foot manufacturing plant which sits on approximately 16 acres and (ii) a leased 28,000 square foot warehouse located in close proximity that is leased until December 2025. (3) This is a manufacturing and/or distribution facility owned by the Company.
Paul, MN (3) (5) Rail/Barge 59,000 Camanche, IA (3) Rail/Barge 95,000 Memphis, TN (3) Rail/Barge 41,000 Water Treatment Apopka, FL (3) Rail 32,000 Camby, IN (3) 41,000 Fairborn, OH (6) Rail 7,000 Fayetteville, TN (3) 54,000 Sulphur, LA (3) 30,000 (1) This is a leased facility comprising administrative offices and a distribution facility. The lease runs through January 2026.
Paul, MN (3) (5) (6) Rail/Barge 59,000 Camanche, IA (3) (6) Rail/Barge 95,000 Memphis, TN (3) (6) Rail/Barge 41,000 Water Treatment Apopka, FL (3) Rail 32,000 Camby, IN (3) 41,000 Fairborn, OH (6) Rail 7,000 Fayetteville, TN (3) 54,000 Sulphur, LA (3) 30,000 (1) This is a leased facility comprising administrative offices and a distribution facility.
(6) This is a bleach manufacturing facility owned by the Company.
One of the applicable leases runs through July 2029 and two run through 2044, including all available lease extensions. (6) This is a manufacturing facility owned by the Company that manufactures bleach.
Removed
(5) The land for these facilities is leased from the Port Authority of the City of St. Paul, Minnesota. One of the applicable leases runs through July 2024 with a letter of intent in place to extend the term, one runs through 2028, and one runs through 2044 including all available lease extensions.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−1 removed0 unchanged
Biggest changeThe following graph compares the cumulative total shareholder return on our common shares with the cumulative total returns of the Nasdaq Industrial Index, the Nasdaq Composite Index, the Russell 2000 Index and the Standard & Poor’s (“S&P”) Small Cap 600 Index for our last five completed fiscal years.
Biggest changeThe following table sets forth information concerning purchases of our common stock for the three months ended March 30, 2025: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program Maximum Number of Shares that May Yet be Purchased under Plans or Programs 12/30/2024-01/26/2025 — $ — — 831,946 01/27/2025-02/23/2025 100,402 $ 114.84 100,402 731,544 02/24/2025-03/30/2025 — $ — — 731,544 Total 100,402 100,402 The following graph compares the cumulative total shareholder return on our common shares with the cumulative total returns of the Nasdaq Industrial Index, the Nasdaq Composite Index, the Russell 2000 Index and the Standard & Poor’s (“S&P”) Small Cap 600 Index for our last five completed fiscal years.
ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common shares are listed on the Nasdaq Global Select Market under the symbol “HWKN.” As of May 10, 2024, shares of our common shares were held by approximately 353 shareholders of record.
ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common shares are listed on the Nasdaq Global Select Market under the symbol “HWKN.” As of May 9, 2025, shares of our common shares were held by approximately 330 shareholders of record.
The graph assumes the investment of $100 in our stock and each of those indices on March 31, 2019, and reinvestment of all dividends. 14 ITEM 6. RESERVED
The graph assumes the investment of $100 in our stock and each of those indices on March 29, 2020 and reinvestment of all dividends. 16 ITEM 6. RESERVED
Our Board of Directors authorized the repurchase of up to 2.6 million shares of our outstanding common stock. The shares may be purchased on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. We did not purchase any shares of our common stock during the three months ended March 31, 2024.
Our Board of Directors authorized the repurchase of up to 2.6 million shares of our outstanding common stock, initially approved on May 29, 2014 and subsequently amended from time to time. The shares may be purchased on the open market or in privately negotiated transactions subject to applicable securities laws and regulations.
Removed
As of March 31, 2024, the number of shares available to be purchased under the share repurchase program was 937,487.
Added
We repurchased 100,402 shares of our common stock during the three months ended March 30, 2025 and 205,943 during the twelve months ended March 30, 2025. As of March 30, 2025, 731,544 shares remained available to be purchased under the share repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

49 edited+11 added−14 removed13 unchanged
Biggest changeWe believe we could borrow additional funds under our current or new credit facilities or sell equity for strategic reasons or to further strengthen our financial position. 20 Material Cash Requirements The following table provides aggregate information about our contractual payment obligations and the periods in which payments are due: Payments Due by Fiscal Period Contractual Obligation 2025 2026 2027 2028 2029 More than 5 Years Total (In thousands) Senior secured revolver (1) $ — $ — $ — $ 99,000 $ — $ — $ 99,000 Interest payments (2) $ 4,353 $ 4,353 $ 4,353 $ 363 $ — $ — $ 13,422 Operating lease obligations (3) $ 2,870 $ 2,548 $ 2,079 $ 1,819 $ 1,475 $ 2,819 $ 13,610 Pension withdrawal liability (4) $ 467 $ 467 $ 467 $ 467 $ 467 $ 2,103 $ 4,438 (1) Represents balance outstanding as of March 31, 2024, and assumes such amount remains outstanding until its maturity date, as periodic payments are not required under the terms of our Credit Agreement.
Biggest changeWe believe that our existing cash and cash equivalents, together with cash generated from operations and available borrowings under our existing Credit Agreement, will be sufficient to meet our working capital expenditure requirements for at least the next 12 months. 21 Material Cash Requirements The following table provides aggregate information about our contractual payment obligations and the periods in which payments are due: Payments Due by Fiscal Period Contractual Obligation 2026 2027 2028 2029 2030 More than 5 Years Total (In thousands) Senior secured revolver (1) $ — $ — $ 149,000 $ — $ — $ — $ 149,000 Interest payments (2) $ 6,527 $ 6,527 $ 544 $ — $ — $ — $ 13,598 Operating lease obligations (3) $ 3,425 $ 2,955 $ 2,685 $ 2,309 $ 1,448 $ 3,053 $ 15,875 Pension withdrawal liability (4) $ 467 $ 467 $ 467 $ 467 $ 467 $ 1,636 $ 3,971 Earnout liability (5) $ — $ 12,604 $ — $ — $ — $ — $ 12,604 (1) Represents balance outstanding as of March 30, 2025, and assumes such amount remains outstanding until its maturity date, as periodic payments are not required under the terms of our Credit Agreement.
Overview We derive substantially all of our revenues from the sale of specialty chemicals and ingredients that we formulate, distribute, blend and manufacture for our Industrial, Water Treatment and Health and Nutrition customers.
Overview We derive substantially all of our revenues from the sale of specialty chemicals and ingredients that we formulate, manufacture, blend and distribute, for our Water Treatment, Industrial, and Health and Nutrition customers.
We focus on total profitability dollars when evaluating our financial results as opposed to profitability as a percentage of sales, as sales dollars tend to fluctuate as raw material prices rise and fall, particularly in our Industrial and Water Treatment segments.
We focus on total profitability dollars when evaluating our financial results as opposed to profitability as a percentage of sales, as sales dollars tend to fluctuate as raw material prices rise and fall, particularly in our Water Treatment and Industrial segments.
The costs for certain of our raw materials can rise or fall rapidly, causing fluctuations in gross profit as a percentage of sales. We use the last in, first out (“LIFO”) method of valuing the majority of our inventory in our Industrial and Water Treatment segments, which causes the most recent product costs to be recognized in our income statement.
The costs for certain of our raw materials can rise or fall rapidly, causing fluctuations in gross profit as a percentage of sales. We use the last in, first out (“LIFO”) method of valuing the majority of our inventory in our Water Treatment and Industrial segments, which causes the most recent product costs to be recognized in our income statement.
We disclose the sales of our bulk commodity products as a percentage of total sales dollars for our Industrial and Water Treatment segments. Our definition of bulk commodity products includes 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.
We disclose the sales of our bulk commodity products as a percentage of total sales dollars for our Water Treatment and Industrial segments. Our definition of bulk commodity products includes 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.
S. Bank’s prime rate, (2) the Federal Funds Effective Rate plus 0.5%, or (3) one-month Term SOFR for U.S. dollars plus 1.0%. The Term SOFR margin is between 0.85% and 1.35%, depending on our leverage ratio. The base rate margin is between 0.00% and 0.35%, depending on our leverage ratio.
S. Bank’s prime rate, (2) the Federal Funds Effective Rate plus 0.5%, or (3) one-month Term SOFR for U.S. dollars plus 1.0%. The Term SOFR margin is between 1.0% and 1.85%, depending on our leverage ratio. The base rate margin is between 0.00% and 0.85%, depending on our leverage ratio.
The impact of prior or future acquisitions on our financial position or results of operations may be materially impacted by the change in or initial selection of assumptions and estimates. See Note 2, Acquisitions included in Part II, Item 8 of this Form 10-K for further discussion of business combination accounting valuation methodology and assumptions. 21 Table of Contents
The impact of prior or future acquisitions on our financial position or results of operations may be materially impacted by the change in or initial selection of assumptions and estimates. See Note 2, Acquisitions included in Part II, Item 8 of this Form 10-K for further discussion of business combination accounting valuation methodology and assumptions. 22 Table of Contents
However, it is our intention to pay down our debt with available excess cash flow. See Note 8 of our consolidated Financial Statements for further information.
However, it is our intention to pay down our debt with available excess cash flow. See Note 8 to our consolidated Financial Statements for further information.
The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. 18 Selected Quarterly Financial Data Selected financial data for our fiscal quarters is shown below. No changes have been made to previously reported information.
The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. 19 Selected Quarterly Financial Data Selected financial data for our fiscal quarters is shown below. No changes have been made to previously reported information.
You are encouraged to reference Part II, Item 7, within that report, for a discussion of our financial condition and results of operations for fiscal 2023 compared to fiscal 2022.
You are encouraged to reference Part II, Item 7, within that report, for a discussion of our financial condition and results of operations for fiscal 2024 compared to fiscal 2023.
(2) Represents interest payments and commitment fees payable on outstanding balances under our revolver, net of the expected receivable from our interest rate swap agreement, and assumes interest rates remain unchanged from the rate as of March 31, 2024. (3) As reported under ASC Topic 842. (4) This relates to our withdrawal from a multiemployer pension plan.
(2) Represents interest payments and commitment fees payable on outstanding balances under our revolver, net of the expected receivable from our interest rate swap agreement, and assumes interest rates remain unchanged from the rate as of March 30, 2025. (3) As reported under ASC Topic 842. (4) This relates to our withdrawal from a multiemployer pension plan.
At March 31, 2024, the effective interest rate on our borrowings was 4.3%. In addition to paying interest on the outstanding principal under the Revolving Loan Facility, we are required to pay a commitment fee on the unutilized commitments thereunder. The commitment fee is between 0.15% and 0.25%, depending on our leverage ratio.
At March 30, 2025, the effective interest rate on our borrowings was 4.3%. In addition to paying interest on the outstanding principal under the Revolving Loan Facility, we are required to pay a commitment fee on the unutilized commitments thereunder. The commitment fee is between 0.15% and 0.25%, depending on our leverage ratio.
We are permitted to make distributions, pay dividends and repurchase shares so long as no default or event of default exists or would exist as a result thereof. We were in compliance with all covenants of the Credit Agreement as of March 31, 2024 and expect to remain in compliance with all covenants for the next 12 months.
We are permitted to make distributions, pay dividends and repurchase shares so long as no default or event of default exists or would exist as a result thereof. We were in compliance with all covenants of the Credit Agreement as of March 30, 2025 and expect to remain in compliance with all covenants for the next 12 months.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our financial condition and results of operations for fiscal 2024 and 2023.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our financial condition and results of operations for fiscal 2025 and 2024.
We have omitted discussion of the earliest of the three years covered by our consolidated financial statements presented in this report because that disclosure was already included in our Annual Report on Form 10-K for fiscal 2023 , filed with the SEC on May 17, 2023.
We have omitted discussion of the earliest of the three years covered by our consolidated financial statements presented in this report because that disclosure was already included in our Annual Report on Form 10-K for fiscal 2024 , filed with the SEC on May 15, 2024.
Borrowings under the Revolving Loan Facility bear interest at a rate per annum equal to one of the following, plus, in both cases, an applicable margin based upon our leverage ratio: (a) Term SOFR, which includes a credit spread adjustment of 0.10%, for an interest period of one, three or six months as selected by us, reset at the end of the selected interest period, or (b) a base rate determined by reference to the highest of (1) U.
Borrowings under the Revolving Loan Facility bear interest at a rate per annum equal to one of the following, plus, in both cases, an applicable margin based upon our leverage ratio: (a) Term SOFR for an interest period of one, three or six months as selected by us, reset at the end of the selected interest period, or (b) a base rate determined by reference to the highest of (1) U.
Debt issuance costs paid to the Lenders are being amortized as interest expense over the term of the Credit Agreement. As of March 31, 2024, the unamortized balance of these costs was $0.3 million, and is reflected as a reduction of debt on our balance sheet.
Debt issuance costs paid to the Lenders are being amortized as interest expense over the term of the Credit Agreement. As of March 30, 2025, the unamortized balance of these costs was $0.2 million, and is reflected as a reduction of debt on our balance sheet.
Historically, our cash requirements for working capital increase during the period from March through November as caustic soda inventory levels increase as most of our barges are received during this period. Cash used in investing activities was $122.5 million in fiscal 2024 compared to $41.2 million in fiscal 2023.
Historically, our cash requirements for working capital increase during the period from March through November as inventory levels increase as most of our barges are received during this period. Cash used in investing activities was $128.0 million in fiscal 2025 compared to $122.5 million in fiscal 2024.
The results of operations since the acquisition date and the assets are included in our Water Treatment segment. 15 On October 27, 2023, we acquired substantially all the assets of Water Solutions Unlimited, Inc. ("Water Solutions") under the terms of a purchase agreement with Water Solutions and its shareholders.
The results of operations since the acquisition date and the assets are included in our Water Treatment segment. On October 30, 2024, we acquired substantially all the assets of Waterguard, Inc. ("Water Guard") under the terms of a purchase agreement with Water Guard and its shareholders.
Operating Income Operating income increased $15.8 million, or 18%, to $104.0 million, or 11% of sales, for fiscal 2024, as compared to $88.2 million, or 9% of sales, for fiscal 2023 due to the combined impact of the factors discussed above.
Operating Income Operating income increased $15.2 million, or 15%, to $119.2 million, or 12% of sales, for fiscal 2025, as compared to $104.0 million, or 11% of sales, for fiscal 2024, due to the combined impact of the factors discussed above.
In fiscal 2024, we used $11.3 million to repurchase shares under our board-authorized share repurchase program, and in fiscal 2023, we used $6.6 million to repurchase shares under the program. 19 Our cash balance was $7.2 million at March 31, 2024, a decrease of $0.4 million as compared with April 2, 2023.
In fiscal 2025, we used $20.7 million to repurchase shares under our board-authorized share repurchase program, and in fiscal 2024, we used $11.3 million to repurchase shares under the program. Our cash balance was $5.1 million at March 30, 2025, a decrease of $2.1 million as compared with March 31, 2024.
Selling, General and Administrative Expenses SG&A expenses increased $12.6 million, or 16% to $89.6 million, or 10% of sales, for fiscal 2024, from $77.0 million, or 8% of sales, for fiscal 2023.
Selling, General and Administrative Expenses SG&A expenses increased $16.8 million, or 19% to $106.4 million, or 11% of sales, for fiscal 2025, from $89.6 million, or 10% of sales, for fiscal 2024.
We realized a gain of $3 million on this sale, which has been recorded as a reduction to selling, general and administrative expenses. 16 Results of Operations The following table sets forth certain items from our statement of income as a percentage of sales for fiscal 2024 and 2023: Fiscal 2024 Fiscal 2023 Sales 100.0 % 100.0 % Cost of sales (78.9) % (82.3) % Gross profit 21.1 % 17.7 % Selling, general and administrative expenses (9.8) % (8.3) % Operating income 11.3 % 9.4 % Interest expense, net (0.5) % (0.6) % Other income 0.2 % — % Income before income taxes 11.0 % 8.8 % Income tax provision (2.8) % (2.4) % Net income 8.2 % 6.4 % Fiscal 2024 Compared to Fiscal 2023 Sales Sales were $919.2 million for fiscal 2024, a decrease of $15.9 million, or 2%, from sales of $935.1 million for fiscal 2023.
Results of Operations The following table sets forth certain items from our statement of income as a percentage of sales for fiscal 2025 and 2024: Fiscal 2025 Fiscal 2024 Sales 100.0 % 100.0 % Cost of sales (76.9) % (78.9) % Gross profit 23.1 % 21.1 % Selling, general and administrative expenses (10.9) % (9.8) % Operating income 12.2 % 11.3 % Interest expense, net (0.6) % (0.5) % Other income 0.1 % 0.2 % Income before income taxes 11.7 % 11.0 % Income tax provision (3.1) % (2.8) % Net income 8.7 % 8.2 % Fiscal 2025 Compared to Fiscal 2024 Sales Sales were $974.4 million for fiscal 2025, an increase of $55.2 million, or 6%, from sales of $919.2 million for fiscal 2024.
Liquidity and Capital Resources Cash provided by operating activities in fiscal 2024 was $159.5 million compared to $77.4 million in fiscal 2023. Our net cash provided by operating activities increased $82.1 million compared to fiscal 2023.
Liquidity and Capital Resources Cash provided by operating activities in fiscal 2025 was $111.1 million compared to $159.5 million in fiscal 2024.
This, combined with improved net income, resulted in the year-over-year increase in net cash provided by operating activities. Due to the nature of our operations, which includes purchases of large quantities of bulk chemicals, the timing of purchases can result in significant changes in working capital and the resulting operating cash flow.
Due to the nature of our operations, which includes purchases of large quantities of bulk chemicals, the timing of purchases can result in significant changes in working capital and the resulting operating cash flow.
Included as a reduction to gross profit in the current year was a $7.7 million charge to operating expense for an environmental liability related to perchlorinated biphenyls (PCBs) discovered in the soil at our Rosemount, MN facility. 17 Industrial Segment.
In fiscal 2024, the LIFO reserve decreased, and gross profits increased, by $15.4 million. Included as a reduction to gross profit in the prior year was a $7.7 million charge to operating expense for an environmental liability related to perchlorinated biphenyls (PCBs) discovered in the soil at our Rosemount, MN, facility. Water Treatment Segment.
Payments on this obligation will continue through 2034. In addition to the above contractual obligations, in the ordinary course of business we have routine cash requirements related to capital expenditures for new trucks, facility improvements and expansions, safety equipment and other additions of property, plant and equipment.
In addition to the above contractual obligations, in the ordinary course of business we have routine cash requirements related to capital expenditures for new trucks, facility improvements and expansions, safety equipment and other additions of property, plant and equipment. Our capital expenditures in fiscal 2025 were $41.1 million and in fiscal 2024 were $40.2 million.
The Credit Agreement requires us to maintain (a) a minimum fixed charge coverage ratio of 1.15 to 1.00 and (b) a maximum total cash flow leverage ratio of 3.0 to 1.0.
The Credit Agreement requires us to maintain (a) a minimum fixed charge coverage ratio of 1.15 to 1.00 and (b) a maximum total cash flow leverage ratio of 3.5 to 1.0, subject to an election by us to increase the maximum total cash flow leverage ratio to 4.0 to 1.0 after certain Permitted Acquisitions subject to limitations set forth in the Credit Agreement.
Additionally, expenses increased due to the added costs from the acquired businesses in our Water Treatment segment of $5.8 million, including $1.8 million of amortization of intangibles, as well as increased variable expenses, most notably variable pay.
Expenses increased largely due to $10.4 million in added costs from the acquired business in our Water Treatment segment, including amortization of intangibles of $4.2 million, as well as increased variable costs.
Gross profit for the Industrial segment decreased $0.6 million, or 1%, to $67.5 million, or 16% of sales, for fiscal 2024, from $68.1 million, or 14% of sales, for fiscal 2023. During fiscal 2024, the LIFO reserve decreased, and gross profits increased, by $12.1 million, primarily due to decreased raw material costs.
Gross profit increased as a result of the increased sales. Industrial Segment. Gross profit for the Industrial segment increased $5.1 million, or 8%, to $72.6 million, or 19% of sales, for fiscal 2025, from $67.5 million, or 16% of sales, for fiscal 2024. During fiscal 2025, the LIFO reserve decreased, and gross profits increased, by $1.1 million.
Gross profit for the Water Treatment segment increased $31.3 million, or 47%, to $98.5 million, or 27% of sales, for fiscal 2024, from $67.2 million, or 22% of sales, for fiscal 2023. During fiscal 2024, the LIFO reserve decreased, and gross profits increased, by $3.3 million, primarily due to decreased raw material costs.
Gross profit for the Water Treatment segment increased $23.1 million, or 23%, to $121.6 million, or 27% of sales, for fiscal 2025, from $98.5 million, or 27% of sales, for fiscal 2024. During fiscal 2025, the LIFO reserve decreased, and gross profits increased, by $0.5 million. During fiscal 2024, the LIFO reserve decreased, and gross profit increased, by $3.3 million.
Our capital expenditures in fiscal 2024 were $40.2 million and in fiscal 2023 were $48.3 million. We anticipate total capital expenditures to be in the range of $40 to $45 million for fiscal 2025. Critical Accounting Estimates In preparing the financial statements, we follow U.S. generally accepted accounting principles (“GAAP”).
We anticipate total capital expenditures to be approximately $60 million for fiscal 2026. Critical Accounting Estimates In preparing the financial statements, we follow U.S. generally accepted accounting principles (“GAAP”).
("EcoTech") under the terms of a purchase agreement with EcoTech and its shareholders. EcoTech was a water treatment chemical distribution company operating primarily in Arkansas. The results of operations since the acquisition date and the assets are included in our Water Treatment segment.
("Wofford") under the terms of a purchase agreement with Wofford and its shareholders. Wofford distributed water treatment chemicals and equipment to customers mainly in Mississippi. The results of operations since the acquisition date and the assets are included in our Water Treatment segment.
Cash flows generated by operations during fiscal 2024 were offset by the cash expended for acquisitions, capital expenditures, repayments of debt, dividend payments and share repurchases in fiscal 2024. We are party to a Credit Agreement with U.S. Bank as Sole Lead Arranger and Sole Book Runner, and other lenders from time to time party thereto, whereby U.S.
Cash flows generated by operations during fiscal 2025 were offset by the cash expended for acquisitions, capital expenditures, repayments of debt, dividend payments and share repurchases in fiscal 2025. 20 We are party to the Credit Agreement with U.S. Bank and the lenders which provides us with the Revolving Loan Facility totaling $400.0 million.
(In thousands, except per share data) Fiscal 2024 First Second Third Fourth Total Sales $ 251,120 $ 236,526 $ 208,496 $ 223,020 $ 919,162 Gross profit 51,991 53,886 42,248 45,511 193,636 Selling, general, and administrative expenses 19,504 20,895 23,774 25,427 89,600 Operating income 32,487 32,991 18,474 20,084 104,036 Net income 23,430 23,216 14,885 13,832 75,363 Basic earnings per share $ 1.12 $ 1.11 $ 0.72 $ 0.67 $ 3.61 Diluted earnings per share $ 1.12 $ 1.10 $ 0.71 $ 0.66 $ 3.59 Fiscal 2023 First Second Third Fourth Total Sales $ 246,543 $ 241,192 $ 219,218 $ 228,145 $ 935,098 Gross profit 46,749 46,374 36,271 35,725 165,119 Selling, general, and administrative expenses 18,885 19,838 21,004 17,242 76,969 Operating income 27,864 26,536 15,267 18,483 88,150 Net income 19,695 18,000 10,733 11,613 60,041 Basic earnings per share $ 0.94 $ 0.86 $ 0.52 $ 0.56 $ 2.88 Diluted earnings per share $ 0.94 $ 0.86 $ 0.51 $ 0.55 $ 2.86 Earnings per share may not equal the face of the Consolidated Statements of Income due to rounding.
(In thousands, except per share data) Fiscal 2025 First Second Third Fourth Total Sales $ 255,879 $ 247,029 $ 226,205 $ 245,318 $ 974,431 Gross profit 64,655 60,222 48,424 52,237 225,538 Selling, general, and administrative expenses 24,864 26,477 27,361 27,662 106,364 Operating income 39,791 33,745 21,063 24,575 119,174 Net income 28,879 24,118 15,021 16,327 84,345 Basic earnings per share $ 1.39 $ 1.16 $ 0.72 $ 0.79 $ 4.05 Diluted earnings per share $ 1.38 $ 1.16 $ 0.72 $ 0.78 $ 4.03 Fiscal 2024 First Second Third Fourth Total Sales $ 251,120 $ 236,526 $ 208,496 $ 223,020 $ 919,162 Gross profit 51,991 53,886 42,248 45,511 193,636 Selling, general, and administrative expenses 19,504 20,895 23,774 25,427 89,600 Operating income 32,487 32,991 18,474 20,084 104,036 Net income 23,430 23,216 14,885 13,832 75,363 Basic earnings per share $ 1.12 $ 1.11 $ 0.72 $ 0.67 $ 3.61 Diluted earnings per share $ 1.12 $ 1.10 $ 0.71 $ 0.66 $ 3.59 Earnings per share may not equal the face of the Consolidated Statements of Income due to rounding.
Gross Profit Gross profit increased $28.5 million, or 17%, to $193.6 million, or 21% of sales, for fiscal 2024, from $165.1 million, or 18% of sales, for fiscal 2023. During fiscal 2024, the LIFO reserve decreased, and gross profits increased, by $15.4 million, primarily due to decreased raw material costs.
Gross Profit Gross profit increased $31.9 million, or 16%, to $225.5 million, or 23% of sales, for fiscal 2025, from $193.6 million, or 21% of sales, for fiscal 2024. During fiscal 2025, the LIFO reserve decreased, and gross profits increased, by $1.6 million, primarily due to lower prices year-over-year on certain products.
Financial Overview Highlights of fiscal 2024 include: • Sales of $919.2 million, a 2% decrease from fiscal 2023; • Gross profit of $193.6 million, an increase of $28.5 million, or 17% from fiscal 2023; and • Diluted earnings per share (EPS) of $3.59, an increase of $0.73, or 26%, from fiscal 2023.
Financial Overview Highlights of fiscal 2025 include: • Sales of $974.4 million, an increase of $55.2 million, or 6% from fiscal 2024; • Gross profit of $225.5 million, an increase of $31.9 million, or 16% from fiscal 2024; and • Diluted earnings per share (EPS) of $4.03, an increase of $0.44, or 12%, from fiscal 2024.
Factors Affecting Comparability of Results Business Acquisitions and Asset Sales On March 8, 2024, we acquired substantially all the assets of Industrial Research Corporation ("Industrial Research") under the terms of a purchase agreement with Industrial Research and its shareholders.
Factors Affecting Comparability of Results Business Acquisitions On January 31, 2025, we acquired substantially all the assets of Amerochem Corporation ("Amerochem") under the terms of a purchase agreement with Amerochem and its shareholders. Amerochem distributed water treatment chemicals and equipment to its customers primarily throughout North Carolina.
Offsetting the impact of the favorable year-over-year LIFO change, gross profit decreased as a result of the $7.7 million charge to operating expense for an environmental liability related to PCBs discovered in the soil at our Rosemount, MN facility as well as lower sales. Water Treatment Segment.
In fiscal 2024, the LIFO reserve decreased, and gross profits increased, by $12.1 million. Included as a reduction to gross profit in the prior year was a $7.7 million charge to operating expense for an environmental liability related to PCBs discovered in the soil at our Rosemount, MN, facility.
The aggregate annual revenue of these four businesses acquired in fiscal 2024 totaled approximately $70 million, as determined using the applicable twelve-month period preceding each respective acquisition date. In the fourth quarter of fiscal 2023, we sold certain assets in our Industrial segment related to our consumer bleach packaging business for $7 million.
The results of operations since the acquisition date and the assets are included in our Water Treatment segment. The aggregate annual revenue of these four businesses acquired in fiscal 2025 totaled approximately $67 million, as determined using the applicable twelve-month period preceding each respective acquisition date.
Gross profit for our Health and Nutrition segment decreased $2.2 million, or 7%, to $27.6 million, or 19% of sales, for fiscal 2024, from $29.8 million, or 19% of sales, for fiscal 2023. Gross profit decreased due to lower sales.
Gross profit for our Health and Nutrition segment increased $3.7 million, or 13%, to $31.3 million, or 22% of sales, for fiscal 2025, from $27.6 million, or 19% of sales, for fiscal 2024. Gross profit increased as a result of a favorable product mix shift.
Water Solutions was a manufacturer and distributor of water treatment chemicals serving customers primarily throughout Indiana, Illinois and Michigan. The results of operations since the acquisition date and the assets are included in our Water Treatment segment. On July 14, 2023, we acquired substantially all the assets of EcoTech Enterprises, Inc.
Water Guard distributed water treatment chemicals and equipment to its customers primarily throughout North Carolina. The results of operations since the acquisition date and the assets are included in our Water Treatment segment. 17 On June 28, 2024, we acquired substantially all the assets of Wofford Water Service, Inc.
Cash used in investing activities included Water Treatment group acquisition spending of $83.5 in fiscal 2024 compared to no acquisition spending for acquisitions in fiscal 2023. Cash used in investing activities also included proceeds from asset disposals of $1.1 million in fiscal 2024 compared to $7.1 million in fiscal 2023.
Capital expenditures for property, plant and equipment were $41.1 million in fiscal 2025 and $40.2 million in fiscal 2024. Cash used in investing activities included Water Treatment group acquisition spending of $87.4 million in fiscal 2025 compared to $83.5 million of acquisition spending in fiscal 2024.
The Revolving Loan Facility is secured by substantially all of our personal property assets and those of our subsidiaries.
The Revolving Loan Facility includes a $10 million letter of credit subfacility and $25 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 25, 2030. The Revolving Loan Facility is secured by substantially all of our personal property assets and those of our subsidiaries.
Increased sales in our Water Treatment segment were more than offset by decreased sales in our Industrial and Health & Nutrition segments. Industrial Segment. Industrial segment sales decreased $61.3 million, or 13%, to $409.5 million for fiscal 2024, as compared to $470.8 million for fiscal 2023.
The year-over-year increase was driven by sales growth in our Water Treatment segment, while sales in our Industrial and Health and Nutrition segments declined year over year. Water Treatment Segment. Water Treatment segment sales increased $83.2 million, or 23%, to $446.5 million for fiscal 2025, as compared to $363.3 million for fiscal 2024.
Water Treatment Segment. Water Treatment segment sales increased $58.4 million, or 19%, to $363.3 million for fiscal 2024, as compared to $304.9 million for fiscal 2023. Sales of bulk commodity products in the Water Treatment segment were approximately 9% of sales dollars in both fiscal 2024 and fiscal 2023.
Industrial segment sales decreased $27.0 million, or 7%, to $382.5 million for fiscal 2025, as compared to $409.5 million for fiscal 2024. Sales of bulk commodity products in the Industrial segment were approximately 15% of sales dollars in fiscal 2025 and 14% of sales dollars in fiscal 2024.
The proceeds received in fiscal 2023 related primarily to our sale of certain assets related to our consumer bleach packaging business. Cash used in financing activities was $37.4 million in fiscal 2024 compared to $32.1 million in fiscal 2023. Cash used in financing activities included net debt repayments of $13.0 million in fiscal 2024 and $14.0 million in fiscal 2023.
Cash used in financing activities was $14.8 million in fiscal 2025 compared to $37.4 million in fiscal 2024. Cash used in financing activities included net debt borrowings of $50.0 million in fiscal 2025 and net debt repayments of $13.0 million in fiscal 2024. We paid out cash dividends of $14.6 million in fiscal 2025 and $13.2 million in fiscal 2024.
Interest Expense, Net Interest expense was $4.3 million for fiscal 2024, a decrease of $0.9 million from interest expense of $5.2 million for fiscal 2023. Interest expense decreased due to lower outstanding borrowings in the current year as compared to the prior year, offset slightly by higher borrowing rates.
Interest Expense, Net Interest expense was $5.4 million for fiscal 2025, an increase of $1.2 million from interest expense of $4.3 million for fiscal 2024. Interest expense increased due to higher outstanding borrowings in the current year, primarily to fund current year acquisitions. Income Tax Provision Our effective tax rate was approximately 26% for both fiscal 2025 and fiscal 2024.
In addition to $23.9 million in sales from acquired businesses, sales increased as a result of increased selling prices on many of our products as well as increased sales volumes of certain of our products. Health and Nutrition Segment.
Sales of bulk commodity products in the Water Treatment segment were approximately 9% of sales dollars in both fiscal 2025 and fiscal 2024. Sales increased as a result of $72 million of added sales from acquired businesses as well as increased sales volumes of 5% in our legacy business. 18 Industrial Segment.
Removed
Industrial Research was a distributor of water treatment chemicals and equipment for its customers in central to northern Louisiana, eastern Texas and southern Arkansas. The results of operations since the acquisition and the assets are included in our Water Treatment segment.
Added
On June 3, 2024, we acquired substantially all the assets of Intercoastal Trading, Inc. and certain related entities ("Intercoastal") under the terms of a purchase agreement with Intercoastal and its shareholders. Intercoastal distributed water treatment chemicals and equipment to its customers in Maryland, Delaware and Virginia.
Removed
On October 31, 2023, we acquired substantially all the assets of The Miami Products & Chemical Company ("Miami Products") under the terms of a purchase agreement with Miami Products and its shareholders. Miami Products was a bleach manufacturer and distributor serving customers primarily throughout Ohio and the surrounding region.
Added
Recent Developments After the end of the fiscal year, on April 25, 2025, we acquired substantially all of the assets of Surplus Management, Inc. dba WaterSurplus ("WaterSurplus") for approximately $150 million, and may be obligated to pay up to an additional $53.7 million based on achieving certain earnings targets five years after the closing of the acquisition.
Removed
These assets were not deemed core to our Industrial segment operations. The assets sold included plant equipment, inventory, and intangible assets, all related to the packaging of bleach.
Added
WaterSurplus delivers sustainable water treatment solutions throughout the United States focused on membrane separation systems, engineering and design services, media filtration systems, new equipment and rental unit manufacturing and sales, along with rapid-response PFAS removal solutions for “forever chemicals”.
Removed
Sales of bulk commodity products in the Industrial segment were approximately 14% of sales dollars in fiscal 2024 and 16% of sales dollars in fiscal 2023. The sale of our consumer bleach packaging business at the end of fiscal 2023 resulted in $14.5 million lower sales in the current year. In addition, sales declined due to overall lower volumes.
Added
WaterSurplus serves municipal water customers as well as customers in the food and beverage industry, offering patented products within its filtration business that reduce the frequency of membrane cleaning resulting in lower energy costs, downtime, and lower overall operational costs.
Removed
Health and Nutrition segment sales decreased $13.0 million, or 8%, to $146.4 million for fiscal 2024, as compared to $159.4 million for fiscal 2023. Sales decreased primarily due to decreased sales of our manufactured products, which we believe was driven by customers destocking inventory in the first half of the current fiscal year.
Added
Although total sales volume was up slightly year over year, sales declined due to lower selling prices on certain products and product mix changes. Health and Nutrition Segment. Health and Nutrition segment sales decreased $0.9 million, or 1%, to $145.5 million for fiscal 2025, as compared to $146.4 million for fiscal 2024.
Removed
In fiscal 2023, the LIFO reserve increased, and gross profits decreased, by $18.5 million, primarily due to rising raw material costs.
Added
An increase in sales of our distributed products was largely offset by decreased sales of our manufactured products. The overall decrease in sales of our manufactured products was driven by decreased sales of a lower-margin product.
Removed
In fiscal 2023, the LIFO reserve increased, and gross profits decreased, by $12.3 million, primarily due to rising raw material costs.
Added
Gross profit increased as a result of the environmental charge in the prior year not repeating in the current year, partially offset by the negative year-over-year impact of the change in the LIFO reserve, as well as improved margins on certain products. Health and Nutrition Segment.
Removed
During fiscal 2023, the LIFO reserve increased, and gross profit decreased, by $6.2 million, primarily due to rising raw material costs. Gross profit increased as a result of improved per-unit margins on many of our products as well as increased sales, including the added sales from acquired businesses. Health and Nutrition Segment.
Added
The decrease in cash provided by operating activities in fiscal 2025 as compared to fiscal 2024 was primarily driven by increases in customer receivables as a result of higher sales, as well as higher inventory levels, partially offset by an increase in net income.
Removed
Included in SG&A expenses for the prior year was a gain of approximately $3.0 million related to the sale of certain assets related to our consumer bleach packaging business. In addition, a year-over-year increase in compensation expense of $1.4 million related to our non-qualified deferred compensation plan reduced SG&A expenses, with the offset in Other Expense.
Added
At March 30, 2025, we had $149 million outstanding under the Revolving Loan Facility.
Removed
Income Tax Provision Our effective tax rate was approximately 26% for fiscal 2024 and 27% for fiscal 2023. The current year decrease in the effective tax rate was primarily driven by favorable tax provision adjustments recorded.
Added
We believe we could borrow additional funds under our current or new credit facilities or sell equity for strategic reasons or to further strengthen our financial position.
Removed
In fiscal 2024, our operating cash flow was improved by $47 million in the aggregate due primarily to favorable year-over-year changes in trade receivables and inventory. In the prior fiscal year, we expended a net of $13 million in the aggregate for working capital primarily as a result of lower year-over-year payables.
Added
Payments on this obligation will continue through 2034. (5) Represents the fair value of the earnout liability recorded in conjunction with the Water Solutions acquisition is based upon achieving certain targets payable 3 years after acquisition.
Removed
Capital expenditures for property, plant and equipment were $40.2 million in fiscal 2024 and $48.3 million in fiscal 2023. The current year decrease in capital expenditures was primarily driven by decreased expenditures for facility improvements and expansions.
Removed
We paid out cash dividends of $13.2 million in fiscal 2024 and $12.0 million in fiscal 2023.
Removed
Bank is also serving as Administrative Agent. The Credit Agreement provides us with a Revolving Loan Facility totaling $250.0 million. The Revolving Loan Facility includes a $10 million letter of credit subfacility and $25 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 30, 2027.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed2 unchanged
Biggest changeA 25-basis point change in interest rates on the variable-rate portion of debt not covered by the interest rate swap would potentially increase or decrease annual interest expense by approximately $0.1 million. Other types of market risk, such as foreign currency risk, do not arise in the normal course of our business activities. 22
Biggest changeA 25-basis point change in interest rates on the variable-rate portion of debt not covered by the interest rate swap would potentially increase or decrease annual interest expense by approximately $0.2 million. Other types of market risk, such as foreign currency risk, do not arise in the normal course of our business activities. 23

Other HWKN 10-K year-over-year comparisons