second quarter of fiscal 2027
Filed Oct 26, 2026Record second-quarter revenue, gross profit, EPS, net income and adjusted EBITDA, led by Water Treatment growth.
Second-quarter sales increased 12%, gross profit increased 13%, diluted EPS increased 23%, and adjusted EBITDA increased 16%. All three segments grew sales, while Water Treatment generated 20% gross-profit growth.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Sales, three months ended September 27, 2026GAAP | $313.8M | – | 12% |
| Cost of sales, three months ended September 27, 2026GAAP | (237,211) | – | – |
| Gross profit, three months ended September 27, 2026GAAP | $76.61M | – | 13% |
| Gross profit margin, three months ended September 27, 2026GAAP | 24% of sales | – | – |
| Selling, general and administrative expenses, three months ended September 27, 2026GAAP | $34.7M | – | 3% |
| Operating income, three months ended September 27, 2026GAAP | $41.91M | – | – |
| Interest expense, net, three months ended September 27, 2026GAAP | (2,643) | – | – |
| Other income, three months ended September 27, 2026GAAP | 264 | – | – |
| Income before income taxes, three months ended September 27, 2026GAAP | 39,527 | – | – |
| Income tax expense, three months ended September 27, 2026GAAP | (11,746) | – | – |
| Effective income tax rate, three months ended September 27, 2026GAAP | 30% | – | – |
| Net income, three months ended September 27, 2026GAAP | $27.78M | – | 23% |
| Basic earnings per share, three months ended September 27, 2026GAAP | $ 1.34 | – | – |
| Diluted earnings per share, three months ended September 27, 2026GAAP | $ 1.34 | – | 23% |
| Adjusted EBITDA, three months ended September 27, 2026non-GAAP | $59.09M | – | 16% |
| Sales, six months ended September 27, 2026GAAP | $629.5M | – | – |
| Gross profit, six months ended September 27, 2026GAAP | 150,613 | – | – |
| Selling, general and administrative expenses, six months ended September 27, 2026GAAP | (70,035) | – | – |
| Operating income, six months ended September 27, 2026GAAP | 80,578 | – | – |
| Net income, six months ended September 27, 2026GAAP | $56.03M | – | – |
| Diluted earnings per share, six months ended September 27, 2026GAAP | $ 2.69 | – | – |
| Adjusted EBITDA, six months ended September 27, 2026non-GAAP | $116.0M | – | – |
| Net income, trailing twelve months ended September 27, 2026GAAP | $85.81M | – | – |
| Adjusted EBITDA, trailing twelve months ended September 27, 2026non-GAAP | $188.0M | – | – |
| Net cash provided by operating activities, six months ended September 27, 2026GAAP | $75.49M | – | 6% |
| Purchases of property, plant, and equipment, six months ended September 27, 2026GAAP | (22,355) | – | – |
| Free cash flow, six months ended September 27, 2026non-GAAP | $53.13M | – | 14% |
| Cash dividends declared per common share, three months ended September 27, 2026GAAP | $ 0.20 | – | – |
| Cash dividends declared per common share, six months ended September 27, 2026GAAP | $ 0.39 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Water TreatmentOrganic sales grew 14%, driven primarily by increased volumes, along with improved pricing on certain products. Acquired businesses contributed approximately $3.7 million in additional sales. | $175.0M | – | 16% |
| Food & Health SciencesSales dollars increased as a result of increased volumes of nutrition, food ingredients, and pharmaceutical products, partially offset by decreased sales of agricultural products. | $76.68M | – | 5% |
| Industrial SolutionsImproved pricing and favorable product mix more than offset lower volumes. | $62.18M | – | 10% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
full year outlook
- Tax rateapproximately 25% to 27%
- NoteSecond half trends are expected to be consistent with what was seen in the first half.
- NoteSG&A in the second half of fiscal 2026 benefited from a non-recurring $6.2 million reduction in SG&A which will not recur in the second half of fiscal 2027.
Capital returns
- Repurchased $12 million of stock during the quarter.
- Shares repurchased were $18,646 for the six months ended September 27, 2026.
- Cash dividends declared and paid were $8,136 for the six months ended September 27, 2026.
- Paid $8.1 million in dividends for the six months ended September 27, 2026.
- Paid down $15 million of debt during the quarter.
What drove it
- Total sales increased as a result of 11% organic sales growth and approximately $3.7 million of sales from acquired businesses.
- Water Treatment gross profit increased $8.4 million, or 20%, to $51.7 million, or 30% of sales.
- Industrial Solutions gross profit increased $1.1 million, or 12%, to $10.0 million, or 16% of sales, supported by higher sales and favorable product mix.
- The company closed the purchase of Dave Symonds & Associates, Inc., a Florida-based blended phosphates water distributor.
- Subsequent to quarter end, the company acquired Eagle Labs, Inc., which adds two locations in the Dallas-Fort Worth region.
Concerns
- The LIFO reserve increased and reduced consolidated gross profit by $1.9 million during the current quarter, compared with a $0.3 million reduction in the same period a year ago.
- Gross profit was pressured by higher fuel costs that were not fully recovered through freight charges billed to customers.
- Food & Health Sciences gross profit decreased $0.6 million, or 4%, to $14.9 million, or 19% of sales, as lower margins in food and pharmaceutical products and the unfavorable LIFO reserve impact more than offset higher segment sales and improved nutrition and agriculture margins.
- Industrial Solutions sales growth occurred despite lower volumes.
- The effective income tax rate increased to 30% from 27%, primarily due to higher state income taxes and an increase in non-deductible items.
- The second half of fiscal 2027 will not benefit from the non-recurring $6.2 million reduction in SG&A recorded in the second half of fiscal 2026.
What to watch
- Whether Water Treatment volume growth, pricing and municipal end-market strength continue in the second half.
- Food & Health Sciences food and pharmaceutical product margins.
- Fuel-cost recovery through customer freight charges and the effect of raw-material costs on the LIFO reserve.
- Integration and sales contribution from Dave Symonds & Associates, Inc. and Eagle Labs, Inc.
- Second-half SG&A performance against the prior-year period that included a non-recurring $6.2 million reduction.
Balance sheet and cash flow
- Cash and cash equivalents were $ 7,100 as of September 27, 2026, compared with $ 3,914 as of March 29, 2026.
- Long-term debt was $ 229,000 as of September 27, 2026, compared with $ 244,000 as of March 29, 2026.
- Total debt outstanding at the end of the second quarter was $229.0 million.
- Leverage ratio was 1.22x adjusted EBITDA at the end of the second quarter, compared with 1.37x at the end of fiscal 2026 and 1.54x in the same quarter last year.
- Working capital was $18 million higher than the end of fiscal 2026.
- Trade receivables were $ 149,281 as of September 27, 2026, compared with $ 139,796 as of March 29, 2026.
- Inventories were $ 92,947 as of September 27, 2026, compared with $ 78,199 as of March 29, 2026.
- Acquisitions were $(5,200) for the six months ended September 27, 2026.
Analysis
Hawkins reported record second-quarter sales of $313.8 million, up 12% from $280.4 million, supported by 11% organic sales growth and approximately $3.7 million of revenue from acquired businesses. All three segments expanded, with Water Treatment sales increasing 16% to $175.0 million, Food & Health Sciences increasing 5% to $76.7 million, and Industrial Solutions increasing 10% to $62.2 million. Water Treatment growth was broad-based across product lines and end markets, with the municipal end market particularly strong.
Gross profit increased 13% to $76.6 million, while gross profit remained 24% of sales. Water Treatment was the principal earnings contributor, with gross profit increasing 20% to $51.7 million and margin improving to 30% of sales from 29% of sales. Industrial Solutions gross profit increased 12% to $10.0 million. Food & Health Sciences was the offset, as gross profit declined 4% to $14.9 million and margin declined to 19% of sales from 21% of sales.
Margin performance included several cost effects. The LIFO reserve reduced current-quarter consolidated gross profit by $1.9 million, compared with a $0.3 million reduction in the prior-year quarter. The $1.6 million year-over-year unfavorable LIFO impact was partially offset by $1.3 million of refunds of previously paid tariffs. Higher fuel costs that were not fully recovered through freight charges also pressured gross profit. SG&A increased 3% to $34.7 million, slower than sales growth, although it included $0.4 million of acquired-business costs and higher variable pay and personnel costs.
Net income increased 23% to $27.8 million and diluted EPS increased to $1.34 from $1.08. Adjusted EBITDA increased 16% to $59.1 million. The effective income tax rate increased to 30% from 27%, which the company attributed primarily to higher state income taxes and an increase in non-deductible items. For the six months ended September 27, 2026, operating cash flow increased 6% to $75.5 million and free cash flow increased 14% to $53.1 million.
Capital allocation included $18.6 million of share repurchases, $15.0 million of debt repayment and $8.1 million of dividends for the six months ended September 27, 2026. Total debt outstanding was $229.0 million at quarter end and leverage was 1.22x trailing twelve-month adjusted EBITDA, below 1.37x at fiscal 2026 year end. The company acquired Dave Symonds & Associates during the quarter and subsequently acquired Eagle Labs. Management expects second-half trends to be consistent with the first half, while flagging that the second half of fiscal 2027 will not receive the non-recurring $6.2 million SG&A benefit included in the second half of fiscal 2026.
Management, verbatim
Our record second-quarter results in revenue, gross profit, EPS, and adjusted EBITDA reflect the agility of our employees and the resilience of our business model,
Patrick H. Hawkins, Chief Executive Officer and President
Revenue grew 12% in the quarter, including organic growth of 11%, with all three segments growing and Water Treatment revenue up 16%, primarily driven by increased volumes. Gross profit grew 13%, again led by Water Treatment at 20%, driven by volume growth and higher per-unit dollar margins.
Patrick H. Hawkins, Chief Executive Officer and President
Looking forward we expect the second half trends to be consistent with what we saw in the first half, recognizing that SG&A in the second half of fiscal 2026 benefited from a non-recurring $6.2 million reduction in SG&A which will not recur in the second half of fiscal 2027.
Patrick H. Hawkins, Chief Executive Officer and President
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported operating metrics
- Revenue guidance
- Gross-margin guidance
- Operating-expense guidance
- Prior guidance for comparison
- A quantitative full-year earnings or adjusted EBITDA outlook
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.