Overview

• U.S. water treatment supplier's fiscal Q4 sales rose 8%, beating analyst expectations

• Adjusted EBITDA for Q4 missed analyst expectations

• Q4 diluted EPS fell 5% due to higher costs from recent acquisitions

Outlook

• Hawkins expects to grow revenue and operating income across all business segments in fiscal 2027

• Company expects to achieve a leverage ratio of about 1x adjusted EBITDA by end of fiscal 2027

• Hawkins projects fiscal 2027 effective tax rate between 25% and 27%

Result Drivers

• WATER TREATMENT GROWTH - Q4 sales growth was led by a 16% increase in Water Treatment segment revenue, driven by acquisitions and higher sales volumes

• ACQUISITION-RELATED COSTS - Q4 EPS declined 5% primarily due to increased amortization, interest expense, and fair value accretion related to earnout liabilities from six acquisitions

• FLAT FOOD & HEALTH SCIENCES - Sales in the Food and Health Sciences segment were relatively flat, mainly due to softness in the food and nutrition end markets

Company press release: ID:nGNXVPhlx

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q4 Sales	Beat	$265.9 mln	$255.28 mln (4 Analysts)
Q4 EPS		$0.74
Q4 Net Income		$15.5 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the diversified chemicals peer group is "buy"

• Wall Street's median 12-month price target for Hawkins Inc is $184.00, about 9.1% above its May 12 closing price of $168.59

• The stock recently traded at 39 times the next 12-month earnings vs. a P/E of 30 three months ago

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