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HAWKINS INC (HWKN)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 delivered record revenue ($280.4M, +14% YoY) and adjusted EBITDA ($50.4M, +9% YoY), but diluted EPS fell to $1.08 (-7% YoY) due to ~$5M higher amortization and interest tied to acquisitions .
  • Versus consensus, HWKN missed both EPS ($1.08 vs $1.24*) and revenue ($280.4M vs $284.4M*); EPS was ~-$0.16 (-12.9%) below and revenue ~-$4.0M (-1.4%) below S&P Global estimates .
  • Water Treatment led with 21% YoY sales growth to $150.9M; Industrial Solutions +11% and Food & Health Sciences +2%. Gross margin held at 24% despite SG&A rising 27% on acquisition amortization and earnout accretion .
  • Management expects H2 FY26 growth in Water Treatment and Industrial Solutions, but Food & Health Sciences “flat to down” on tougher comps and competitive pricing; effective tax rate guided at ~26–27% .
  • Catalyst set-up: strong Water Treatment momentum and cash generation (repaid $20M on revolver) versus near-term EPS drag from WaterSurplus integration; dividend increased to $0.19 per share on Oct 29, 2025 .

What Went Well and What Went Wrong

What Went Well

  • Record Q2 revenue ($280.4M) and adjusted EBITDA ($50.4M) from broad-based growth; CEO: “Our record second quarter revenue of $280 million and record second quarter adjusted EBITDA of $50.4 million are both a result of our ongoing strategy of investing in high-margin business...” .
  • Water Treatment growth +21% YoY to $150.9M, with ~$23M from acquisitions plus organic volumes and improved pricing; segment gross profit +20% to $43.3M at 29% margin .
  • Leverage management and cash flow: repaid $20M in the quarter; total debt ended Q2 at $279.0M; leverage ratio 1.53x TTM pro forma adjusted EBITDA .

What Went Wrong

  • EPS down 7% YoY to $1.08, primarily the ~$5M increase in amortization and interest from acquisitions; SG&A +27% YoY to $33.7M with $2.5M amortization and $0.5M earnout accretion from the acquired business .
  • Food & Health Sciences gross profit -4% YoY to $15.5M; margin slipped to 21% (from 22%) due to competitive pricing pressure .
  • Consensus miss: EPS ~-$0.16 (-12.9%) and revenue ~-$4.0M (-1.4%) versus S&P Global estimates, reflecting acquisition-related expense drag despite operational strength .

Financial Results

MetricQ4 FY2025Q1 FY2026Q2 FY2026
Revenue ($USD Millions)$245.3 $293.3 $280.4
Diluted EPS ($)$0.78 $1.40 $1.08
Gross Profit ($USD Millions)$52.2 $72.4 $67.6
Operating Income ($USD Millions)$24.6 $41.3 $33.9
Adjusted EBITDA ($USD Millions)$36.7 $57.6 $50.4
Gross Profit Margin %~21.3% (derived from )25% 24%
Estimates vs Actuals (Q2 FY2026)Q2 FY2026
EPS Consensus Mean ($)*1.240*
Revenue Consensus Mean ($USD Millions)*$284.4*
Diluted EPS Actual ($)$1.08
Revenue Actual ($USD Millions)$280.4
Values retrieved from S&P Global.*
Segment Sales ($USD Millions)Q2 FY2025Q1 FY2026Q2 FY2026
Water Treatment$124.5 $149.6 $150.9
Food & Health Sciences$71.4 $89.2 $72.9
Industrial Solutions$51.1 $54.5 $56.6
Segment Operating Income ($USD Millions)Q2 FY2025Q1 FY2026Q2 FY2026
Water Treatment$20.1 $24.7 $21.2
Food & Health Sciences$8.6 $11.0 $7.4
Industrial Solutions$5.0 $5.7 $5.4
KPIs and Balance SheetQ4 FY2025Q1 FY2026Q2 FY2026
Total Debt ($USD Millions)$149.0 $299.0 $279.0
Leverage Ratio (x TTM pro forma adj. EBITDA)0.86x 1.61x 1.53x
Effective Tax Rate (%)~26% (FY guidance) 25% (quarter) 27% (quarter)
YTD Cash from Operations ($USD Millions)N/A$31.5 (Q1) $71.0 (six months)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax RateFY2026~26–27% (Q1) ~26–27% (Q2) Maintained
Segment Outlook – Water TreatmentH2 FY2026Expect segment growth (FY2025 outlook to FY2026) Growth expected Maintained
Segment Outlook – Industrial SolutionsH2 FY2026Growth expected (FY2026) Growth expected Maintained
Segment Outlook – Food & Health SciencesH2 FY2026Growth expected (FY2026) Flat to down on comps/competition Lowered
Acquisition-related Expense Run-Rate (WaterSurplus)FY2026Not specified~$17M annualized (amortization, earnout accretion, interest) New disclosure
DividendQ2 FY2026$0.18/share (Jan 29, 2025) $0.19/share payable Nov 28, 2025 Raised

Earnings Call Themes & Trends

Note: An earnings call transcript for Q2 FY2026 was not available through our document tools; themes below reflect multi-quarter management disclosures from press releases.

TopicPrevious Mentions (Q4 FY2025 and Q1 FY2026)Current Period (Q2 FY2026)Trend
Water Treatment growth leadershipFY2025 WT +23% YoY; set to surpass $1B revenue in FY2026 ; Q1 +28% YoY Q2 +21% YoY; acquisitions plus organic volume, improved pricing Sustained double-digit growth; modest sequential deceleration
Acquisition integration (WaterSurplus)Closed in Q1; leverage 1.6x; full-service offering from chemicals through equipment EPS/OP drag in FY2026; ~$17M annualized expense; accretive in FY2027; integration “going well” Near-term EPS drag; long-term accretive
Food & Health Sciences pricing pressureQ1: margin pressure from competitive pricing Q2: GP -4% YoY; margin 21% (vs 22%) on competitive pricing Soft/under pressure
Leverage & debtFY2025 leverage 0.86x ; Q1 1.61x post-deal Q2 1.53x; repaid $20M revolver Deleveraging in progress
Tax rateFY2025 ~26% Q1 25%, Q2 27%; FY guide ~26–27% Within guided range

Management Commentary

  • “Our growth was again led by Water Treatment, with revenue growth of over 21%, followed by Industrial Solutions growing 11% and Food and Health Sciences growing 2%... We continue to generate strong cash flow, which allowed us to reduce our debt level by $20 million during the quarter.” — Patrick H. Hawkins, CEO & President .
  • “This acquisition [WaterSurplus] is expected to be accretive in fiscal 2027... in fiscal 2026 we expect to incur $17 million of annualized expense related to the acquisition associated with amortization, earn-out accretion and interest expense.” — Patrick H. Hawkins .
  • “Our record revenue of $293 million [Q1] was the result of all three reporting segments growing year over year... Hawkins crossed the $1 billion revenue mark for the trailing twelve months.” — Patrick H. Hawkins .

Q&A Highlights

  • No Q2 FY2026 earnings call transcript was available via our tools; therefore, no Q&A highlights or clarifications could be extracted. Management’s strategic and outlook commentary above is sourced from the earnings press releases .

Estimates Context

  • S&P Global consensus for Q2 FY26 EPS was $1.24* (4 estimates) and revenue $284.4M* (4 estimates); HWKN reported $1.08 EPS and $280.4M revenue, implying misses of ~$0.16 (-12.9%) and ~$4.0M (-1.4%), respectively .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Water Treatment remains the primary growth engine (+21% YoY sales; 29% gross margin), with acquisitions adding ~$23M revenue in the quarter and organic/pricing contributions — underpinning durability of the thesis .
  • EPS softness (-7% YoY) is driven by acquisition accounting/financing ($2.5M amortization, $0.5M earnout accretion, higher interest), not operational deterioration; adjusted EBITDA still reached a record Q2 ($50.4M, +9% YoY) .
  • Expect H2 FY26 mix: continued growth in Water Treatment and Industrial Solutions; monitor Food & Health Sciences where competitive pricing and tough comps may weigh on margins .
  • Balance sheet capacity remains adequate: Q2 debt $279.0M, leverage 1.53x; cash generation enabled a $20M paydown — supports ongoing integration and tuck-ins while trending leverage lower .
  • Dividend progression (to $0.19) and consistent tax rate guidance (~26–27%) provide visibility on capital returns and earnings quality through year-end .
  • Near-term estimates likely drift lower for EPS to reflect the ~$17M FY26 acquisition expense run-rate; watch for FY27 accretion from WaterSurplus ramp .
  • Tactical setup: stock reaction hinges on investors’ weighting of sustained segment growth and EBITDA strength versus GAAP EPS drag from acquisition accounting; any upside from faster integration or pricing discipline in Food & Health Sciences could be a catalyst .