Executive Summary

Record Q1 FY26 revenue of $293.3M (+15% YoY), diluted EPS of $1.40 (+1% YoY), and adjusted EBITDA of $57.6M (+13% YoY). Strength was broad-based across segments, led by Water Treatment (+28% YoY) and aided by recent acquisitions .
Results beat S&P Global consensus: EPS $1.40 vs $1.33–$1.34 estimate* and revenue $293.3M vs $280.8M estimate*; beat driven by higher volumes/pricing in Water Treatment and contribution from acquired businesses; offset by higher interest and amortization from M&A .
Mix tailwinds and M&A helped gross profit (+12% YoY), though Food & Health Sciences saw competitive pricing pressure; LIFO increased, reducing gross profit by ~$0.6M; WaterSurplus step-up inventory reduced gross by ~$0.8M .
Balance sheet leveraged for growth (total debt $299.0M; leverage 1.61x TTM pro forma adj. EBITDA); management expects all three segments to grow profitability in FY26 and maintains FY tax rate outlook of ~26–27% .

What Went Well and What Went Wrong

What Went Well
- “Record revenue of $293 million … all three reporting segments growing year over year … crossed the $1 billion revenue mark for the trailing twelve months.” — CEO Patrick H. Hawkins .
- Water Treatment grew 28% YoY to $149.6M, driven by ~$29M from acquisitions plus higher volumes and improved pricing; segment gross profit +24% to $43.7M .
- Adjusted EBITDA rose 13% to $57.6M with TTM adjusted EBITDA >$170M; strong operating cash flow supported growth investments while maintaining a strong balance sheet .
What Went Wrong
- SG&A +24% YoY to $31.0M (11% of sales) from acquired business costs (+$4.9M, incl. $2.0M intangibles amortization and $0.9M acquisition costs), equity/deferred comp mark-to-market, and higher medical expense; partially offset by $1.9M earnout fair value reduction .
- LIFO reserve increase reduced gross profit by $0.6M; WaterSurplus step-up inventory reduced gross by ~$0.8M; Food & Health Sciences GP fell 3% on competitive pricing pressures .
- Net interest expense more than doubled to $3.27M on higher debt financing for acquisitions, pressuring earnings leverage .

Financial Results

Metric	Q1 FY2025	Q4 FY2025	Q1 FY2026	Consensus (Q1 FY2026)*	Surprise
Revenue ($M)	$255.9	$245.3	$293.3	$280.8*	+$12.5M vs est.*
Diluted EPS ($)	$1.38	$0.78	$1.40	$1.33–$1.34*	+$0.06–$0.07 vs est.*
Gross Profit ($M)	$64.7	$52.2	$72.4	—	—
Gross Margin (%)	25%	21%	25%	—	—
Operating Income ($M)	$39.8	$24.6	$41.3	—	—
Adjusted EBITDA ($M, non-GAAP)	$50.9	$36.7	$57.6	—	—

Estimates: EPS consensus mean $1.330–$1.340* (4 estimates); revenue consensus mean $280.822M* (4 estimates) [GetEstimates]. Values retrieved from S&P Global.

Segment performance (Q1 FY2026 vs Q1 FY2025):

Segment	Sales Q1 FY2025 ($M)	Sales Q1 FY2026 ($M)	YoY	Operating Income Q1 FY2025 ($M)	Operating Income Q1 FY2026 ($M)	YoY
Water Treatment	$117.2	$149.6	+28%	$21.1	$24.7	+17%
Food & Health Sciences	$85.1	$89.2	+5%	$12.5	$11.0	-13%
Industrial Solutions	$53.6	$54.5	+2%	$6.1	$5.7	-7%

Additional margin context (SPGI, GAAP definitions):

EBIT Margin %: Q1 FY2025 15.55%, Q4 FY2025 10.02%, Q1 FY2026 14.09%* [GetFinancials]. Values retrieved from S&P Global.
Net Income Margin %: Q1 FY2025 11.29%, Q4 FY2025 6.66%, Q1 FY2026 9.95%* [GetFinancials]. Values retrieved from S&P Global.

KPIs and balance sheet:

KPI	Q3 FY2025	Q4 FY2025	Q1 FY2026
Adjusted EBITDA ($M)	$33.6	$36.7	$57.6
Leverage Ratio (x)	0.70x	0.86x	1.61x (TTM pro forma adj. EBITDA)
Total Debt ($M)	$114.0	$149.0	$299.0
Dividend per Share ($)	$0.18	$0.18	$0.18

Non-GAAP/one-time items noted:

Adjusted EBITDA definition and reconciliation provided; Q1 FY26 included $0.9M acquisition expense and higher amortization .
LIFO gross profit headwind $0.6M; WaterSurplus inventory step-up -$0.8M in Water Treatment .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Effective Tax Rate	FY2026	~26–27% (FY25 commentary)	~26–27% (reiterated)	Maintained
Segment Profitability	FY2026	Expect growth across segments (FY25 outlook)	Expect all three segments to continue to grow profitability	Maintained (qualitative)
Revenue	FY2026	Expected to surpass $1B in FY2026 (FY25 outlook)	Not quantified in Q1; TTM revenue >$1B noted	Not updated numerically
EPS	FY2026	EPS growth expected, slower due to higher interest/amortization (FY25)	Not updated numerically in Q1; M&A costs evident in P&L	Not updated numerically
Dividend	Quarterly	$0.18/share in Q4 FY25	$0.18/share declared in Q1 FY26	Maintained

Note: Company does not provide formal revenue/EPS ranges; guidance is qualitative, with explicit tax rate outlook.

Earnings Call Themes & Trends

Transcript for Q1 FY26 was not publicly available; themes derived from management commentary in company press releases and filings.

Topic	Previous Mentions (Q3 FY2025 and Q4 FY2025)	Current Period (Q1 FY2026)	Trend
M&A/WaterSurplus integration	Multiple water treatment acquisitions driving growth; net borrowings to fund Water Guard (Q3) . EPS growth expected to slow in FY26 due to interest/amortization from acquisitions (Q4) .	WaterSurplus closed; one of largest acquisitions; combining chemicals with design/filtration systems; leverage 1.6x .	Continued emphasis on M&A-driven growth; near-term P&L drag from amortization/interest.
Segment mix/realignment	FY26 to realign segments to Water Treatment, Health & Food Sciences, Industrial Solutions (Q4) .	New reporting segments implemented; recast historicals available .	Implemented; improves transparency on specialty mix.
Pricing/competition	Industrial price declines from lower commodity costs; mix changes (Q3) .	Food & Health Sciences facing competitive pricing pressure; Industrial GP down on pricing/operating costs .	Ongoing pricing headwinds in Food/Industrial.
Weather/seasonality	Normal seasonal patterns observed (implied).	Cooler/wet start to summer; Water Treatment still +28% YoY .	Minor headwind but offset by acquisitions and volume.
Tax rate	~26–27% full-year expectation (Q3/Q4) .	Reiterated ~26–27% for FY26 .	Stable.
Balance sheet/leverage	Leverage ~0.7x (Q3), 0.86x (Q4) .	Leverage 1.61x after WaterSurplus; debt $299M .	Higher leverage near-term; still moderate.

Management Commentary

“Our record revenue of $293 million was the result of all three reporting segments growing year over year and for the first time in our history, Hawkins crossed the $1 billion revenue mark for the trailing twelve months.” — Patrick H. Hawkins, CEO .
“By combining Hawkins’ chemistry, service, and technical expertise with WaterSurplus’ design, engineering, and filtration systems, Hawkins now has a full-service equipment and chemical offering for water treatment customers throughout the United States.” .
“Looking to the future, we expect all three segments to continue to grow profitability for fiscal 2026.” .

Q&A Highlights

A public Q1 FY26 earnings call transcript was not found on the company’s site or major transcript repositories despite targeted searches; therefore, Q&A specifics and any intra-quarter guidance clarifications were unavailable to review .

Estimates Context

EPS: Actual $1.40 vs S&P Global consensus mean $1.330–$1.340* (beat of ~$0.06–$0.07). 4 covering estimates* [GetEstimates].
Revenue: Actual $293.272M vs S&P Global consensus mean $280.822M* (beat of ~$12.45M). 4 covering estimates* [GetEstimates].
Implications: Revenue/segment momentum and Water Treatment outperformance likely drive upward revenue revisions; however, higher interest and amortization tied to acquisitions temper near-term EPS leverage, implying less pronounced EPS revisions vs revenue .

Values retrieved from S&P Global.

Key Takeaways for Investors

Broad-based beat: Revenue and EPS exceeded consensus on strong Water Treatment growth (acquisition plus organic volume/pricing) and resilient Industrial Solutions volumes [GetEstimates].
Mix shift continues: Strategic pivot toward higher-margin businesses is working; adjusted EBITDA grew double digits despite cost headwinds .
Near-term EPS drag from M&A: Higher amortization and interest are elevating SG&A/interest expense; expect EPS growth to be more modest near-term even as revenue scales .
Pricing pressure watch: Food & Health Sciences experienced competitive pricing; monitor margin cadence there into 2H FY26 .
Leverage up but manageable: Debt rose to $299M post-WaterSurplus; leverage 1.61x TTM pro forma adj. EBITDA—supports continued M&A capacity while keeping balance sheet flexibility .
Tax rate stability: FY26 ETR guided to ~26–27%, aiding forecastability .
Trading setup: Positive revenue/EBITDA momentum and segment mix are catalysts; EPS trajectory will hinge on integration pace and amortization/interest normalization.

Notes:

All non-GAAP references (adjusted EBITDA) reconciled by the company .
Segment realignment effective in Q1 FY26 (Water Treatment, Food & Health Sciences, Industrial Solutions) may impact historical comparability; recast historicals available on IR site .

HAWKINS INC (HWKN)·Q1 2026 Earnings Summary