Hawkins earnings rose in the second quarter of fiscal 2027 as sales increased across all three business segments, led by Water Treatment. The company reported net income of $27.8 million, up from $22.6 million a year earlier, on revenue of $313.8 million.
Key Takeaways
- Quarterly revenue rose 12%, including organic growth of 11%.
- Water Treatment sales increased 16% to $175.0 million, primarily on higher volumes.
- Management expects second-half trends to resemble the first half, but noted a prior-year expense benefit will not recur.
Hawkins earnings and segment sales
For the three months ended September 27, 2026, diluted earnings per share were $1.34, compared with $1.08 in the second quarter of fiscal 2026. Revenue increased from $280.4 million, including approximately $3.7 million in sales from acquired businesses.
Water Treatment accounted for most of the revenue increase. Organic sales in the segment rose 14%, primarily because of higher volumes, alongside improved pricing on some products. Hawkins said the municipal market was particularly strong.
Food & Health Sciences sales benefited from higher volumes of nutrition, food ingredients and pharmaceutical products, partly offset by lower agricultural product sales. Industrial Solutions sales rose as improved pricing and product mix more than offset lower volumes.
| Item | Details |
|---|---|
| Water Treatment | Fiscal second-quarter sales: $175.0 million, up from $150.9 million. |
| Food & Health Sciences | Fiscal second-quarter sales: $76.7 million, up from $72.9 million. |
| Industrial Solutions | Fiscal second-quarter sales: $62.2 million, up from $56.6 million. |
Profit and cash flow
Gross profit rose 13% to $76.6 million. Water Treatment gross profit increased 20% to $51.7 million, while Food & Health Sciences gross profit fell 4% to $14.9 million as lower margins in food and pharmaceutical products and an unfavorable inventory reserve impact outweighed higher sales.
Adjusted EBITDA, a non-GAAP measure, increased 16% to $59.1 million from $50.9 million. Hawkins recast the prior-year figure after changing its definition to exclude non-cash earnout-related expenses and income.
For the first six months of fiscal 2027, operating cash flow rose 6% to $75.5 million. Free cash flow, which Hawkins defines as operating cash flow less capital expenditures, increased 14% to $53.1 million. The company reported $229.0 million in debt at quarter-end.
Acquisitions and second-half outlook
During the quarter, Hawkins acquired Florida water distributor Dave Symonds & Associates. After quarter-end, it acquired Eagle Labs, adding two locations in the Dallas-Fort Worth region alongside a new Water Treatment facility.
CEO Patrick Hawkins said he expects second-half trends to be consistent with those in the first half. He cautioned that the second half of fiscal 2026 benefited from a non-recurring $6.2 million reduction in selling, general and administrative expenses that will not recur in fiscal 2027. The company expects a full-year effective tax rate of approximately 25% to 27%.
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