Hawkins posts record fiscal second-quarter sales of $313.8 million as Water Treatment grows 16%

Hawkins, Inc. reported record sales, gross profit, net income and diluted earnings for its fiscal 2027 second quarter. Sales of $313.8 million in the three months ended September 27, 2026 rose 12% from $280.4 million a year earlier, net income climbed 23% to $27.8 million, or $1.34 per diluted share, from $22.6 million, or $1.08 per diluted share, a year earlier, and adjusted EBITDA, a non-GAAP measure, rose 16% to $59.1 million, according to the release filed with the Securities and Exchange Commission.

Water Treatment carries the quarter

Water Treatment, Hawkins' largest unit, sold $175.0 million in the quarter against $150.9 million a year earlier, a 16% gain the company attributes to 14% organic growth plus roughly $3.7 million of sales from acquired businesses. Management said the municipal end market was particularly strong and that growth was broad across product lines. The other two segments grew more slowly. Food & Health Sciences sales rose 5% from a year earlier to $76.7 million as nutrition, food-ingredient and pharmaceutical volumes increased while agricultural products declined, and Industrial Solutions rose 10% from a year earlier to $62.2 million on improved pricing and product mix that more than offset lower volumes. Companywide, organic sales growth was 11%, with acquisitions adding the rest.

LIFO and tariff refunds hold the gross margin at 24%

Gross profit rose 13% to $76.6 million, or 24% of sales, the same margin as a year earlier. Two cost items explain why a 12% sales gain produced no margin expansion. The LIFO reserve rose by $1.9 million in the quarter against $300,000 a year earlier, a $1.6 million unfavorable swing, and $1.3 million of refunds on previously paid tariffs, recorded as a reduction of cost of sales, only partly offset it. Higher fuel costs that freight charges did not fully recover added pressure. By segment, Water Treatment gross profit climbed 20% from a year earlier to $51.7 million, or 30% of that segment's sales; Food & Health Sciences gross profit fell 4% from a year earlier to $14.9 million as food and pharmaceutical margins narrowed; Industrial Solutions gross profit rose 12% from a year earlier to $10.0 million. Selling, general and administrative expense rose 3% to $34.7 million, or 11% of sales versus 12%.

Buybacks and debt repayment absorb six months of cash

Operating cash flow for the six months ended September 27, 2026 was $75.5 million, up 6% from a year earlier, and free cash flow, defined by the company as operating cash less capital spending, rose 14% to $53.1 million. That funded $18.6 million of share repurchases, $15.0 million of debt repayment and $8.1 million of dividends. Total debt was $229.0 million at quarter end, and leverage fell to 1.22x trailing twelve-month adjusted EBITDA from 1.37x at the fiscal year end and 1.54x a year earlier. Two acquisitions frame the period: Dave Symonds & Associates, a Florida distributor focused on blended phosphates, closed inside the quarter, and Eagle Labs, a Dallas-Fort Worth water treatment distributor with in-house manufacturing, closed after it. The release discloses no purchase price for either.

A 30% tax rate and a harder second-half comparison

The effective tax rate rose to 30% from 27%, which Hawkins attributes to state taxes and a larger share of non-deductible items, and management guides the full year to approximately 25% to 27%. The release also flags a comparison problem for the rest of the fiscal year. "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", said Patrick Hawkins, the chief executive and president. Trailing twelve-month net income was $85.8 million and trailing twelve-month adjusted EBITDA was $188.0 million, both described by the company as records.

The missing consensus number and the recast base

Two limits matter. The release carries no analyst consensus estimate, so nothing in it establishes a beat or a miss; every comparison here is with the prior-year quarter rather than with expectations. And Hawkins revised its adjusted EBITDA definition in the third quarter of fiscal 2026 to exclude non-cash earnout items, recasting the prior year. As originally reported, adjusted EBITDA for the three months ended September 28, 2025 was $50.4 million rather than the $50.9 million used in this quarter's comparison, so the 16% gain rests on the recast base. The next document that tests the second-half outlook is the fiscal 2027 third-quarter report, the first to cover a full period of Eagle Labs ownership.