Hawkins — Income Statement, Cash Flows & Balance Sheet
Is Hawkins profitable?
Hawkins is a consistently profitable and growing business, though higher interest costs from acquisition debt dipped net income slightly this year.
| Metric | FY2024 | FY2025 | FY2026 | Change (FY25→FY26) |
|---|---|---|---|---|
| Sales ($000s) | $919,162 | $974,431 | $1,083,696 | +11.2% |
| Gross Profit ($000s) | $193,636 | $225,538 | $245,055 | +8.7% |
| Gross Margin | 21.1% | 23.1% | 22.6% | −0.5 pts |
| Operating Income ($000s) | $104,036 | $119,174 | $121,293 | +1.8% |
| Interest Expense, net ($000s) | $4,282 | $5,432 | $13,507 | +148.7% |
| Net Income ($000s) | $75,363 | $84,345 | $81,548 | −3.3% |
| Diluted EPS | $3.59 | $4.03 | $3.91 | −3.0% |
Revenue and operating income both grew, continuing a three-year trend. However, interest expense nearly tripled after Hawkins borrowed heavily to fund acquisitions, which consumed most of the operating income gains and pushed net income slightly lower. Gross margin held roughly steady, suggesting the core business remained healthy even as SG&A costs rose with the expanding business.
Where does Hawkins' revenue come from?
Water Treatment is the clear growth engine, while Food and Health Sciences and Industrial Solutions were broadly flat.
| Segment | FY2024 Sales | FY2025 Sales | FY2026 Sales | FY25→FY26 Change |
|---|---|---|---|---|
| Water Treatment ($000s) | $363,289 | $446,489 | $543,303 | +21.7% |
| Food & Health Sciences ($000s) | $334,560 | $322,560 | $320,700 | −0.6% |
| Industrial Solutions ($000s) | $221,313 | $205,382 | $219,693 | +7.0% |
| Segment | FY2025 Op. Income | FY2026 Op. Income | Change |
|---|---|---|---|
| Water Treatment ($000s) | $59,546 | $68,088 | +14.3% |
| Food & Health Sciences ($000s) | $41,198 | $34,351 | −16.6% |
| Industrial Solutions ($000s) | $18,430 | $18,854 | +2.3% |
Water Treatment's rapid revenue growth has been fueled by a string of acquisitions, including WaterSurplus in early fiscal 2026, and it is now the largest and fastest-growing segment by a wide margin. Food and Health Sciences, however, saw operating profit fall noticeably despite roughly flat sales — worth watching as it remains a meaningful profit contributor. Industrial Solutions was a quiet but steady performer.
Does Hawkins generate cash?
Hawkins generated strong operating cash flow, but nearly all of it — and then some — was spent on acquisitions.
| Metric | FY2024 | FY2025 | FY2026 | Change (FY25→FY26) |
|---|---|---|---|---|
| Cash from Operations ($000s) | $159,499 | $111,096 | $144,327 | +30.0% |
| Capital Expenditures ($000s) | $(40,151) | $(41,096) | $(58,239) | +41.7% |
| Free Cash Flow ($000s)* | $119,348 | $70,000 | $86,088 | +23.0% |
| Cash Spent on Acquisitions ($000s) | $(83,455) | $(87,400) | $(167,108) | +91.2% |
| Net Debt Drawn ($000s) | $(13,000) | $50,000 | $95,000 | — |
*Free cash flow = cash from operations minus capital expenditures (GAAP basis).
Operating cash flow bounced back strongly this year, helped by working capital improvements. Capital spending also stepped up meaningfully as Hawkins continues to invest in its facilities. Acquisitions consumed over twice the prior year's cash outlay, funded primarily by drawing on the company's revolving credit line rather than from internal cash generation.
How strong is Hawkins' balance sheet?
Hawkins took on significantly more debt to fund acquisitions, but remains within its loan covenants and carries solid equity.
| Metric | FY2025 | FY2026 | Change |
|---|---|---|---|
| Long-Term Debt ($000s) | $149,000 | $244,000 | +$95,000 |
| Total Shareholders' Equity ($000s) | $460,292 | $534,009 | +$73,717 |
| Cash & Equivalents ($000s) | $5,103 | $3,914 | −$1,189 |
| Goodwill + Intangibles ($000s) | $285,530 | $455,929 | +$170,399 |
Debt roughly doubled over the year and the credit facility (capacity: $400M) now carries a $244M balance, leaving meaningful room for additional borrowing if needed. The loan matures in 2030, giving Hawkins several years of runway. One thing to note: goodwill and intangible assets — largely the estimated value of acquired customer relationships — now represent nearly half of total assets, which is common for acquisition-driven businesses but adds some risk if those acquired businesses underperform over time.