hawkins105383_10q.htm - Generated by SEC Publisher for SEC Filing

 

Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


FORM 10-Q


 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2010

 

Commission file number 0-7647

 


HAWKINS, INC.

(Exact name of registrant as specified in its charter)

 

MINNESOTA

41-0771293

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer Identification No.)

 

3100 EAST HENNEPIN AVENUE, MINNEAPOLIS, MINNESOTA 55413

(Address of principal executive offices, including zip code)

 

(612) 331-6910

(Registrant’s telephone number, including area code)

 


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  YES x    NO o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES o    NO o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

 

Large Accelerated Filer o  

Accelerated Filer x  

Non-Accelerated Filer o  

Smaller Reporting Company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o    NO x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

CLASS

OUTSTANDING AT OCTOBER 27, 2010

Common Stock, par value $.05 per share

10,315,954

 

 




 

 

HAWKINS, INC.
INDEX TO FORM 10-Q

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements:

 

 

 

 

 

Condensed Balance Sheets – September 30, 2010 and March 28, 2010

3

 

 

 

 

Condensed Statements of Income – Three and Six Months Ended September 30, 2010 and 2009

4

 

 

 

 

Condensed Statements of Cash Flows – Six Months Ended September 30, 2010 and 2009

5

 

 

 

 

Notes to Condensed Financial Statements

6

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

11

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

16

 

 

 

Item 4.

Controls and Procedures

16

 

 

 

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1A.

Risk Factors

17

 

 

 

Item 6.

Exhibits

17

 

 

 

Signatures

 

18

 

 

 

Exhibit Index

 

19

 

 

 

2

 


 

Table of Contents

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1.    FINANCIAL STATEMENTS

 

HAWKINS, INC.

CONDENSED BALANCE SHEETS

 

(In thousands, except share data)

 

September 30,
2010

March 28,
2010

 

 

(Unaudited)

(Audited)

 

ASSETS

 

 

 

 

CURRENT ASSETS:

 

 

Cash and cash equivalents

 

$

35,099

$

18,772

 

Investments available-for-sale

 

24,909

25,928

 

Trade receivables - less allowance for doubtful accounts:
$325 as of September 30, 2010 and $300 as of March 28, 2010

 

27,312

24,832

 

Inventories

 

24,771

21,327

 

Income taxes receivable

 

71

4,430

 

Prepaid expenses and other current assets 

 

1,743

2,209

 

Total current assets

 

 

113,905

 

97,498

 

 

 

PROPERTY, PLANT, AND EQUIPMENT - net

 

48,943

47,756

 

 

 

GOODWILL AND INTANGIBLE ASSETS

 

4,718

4,839

 

 

 

LONG-TERM INVESTMENTS

 

2,953

8,972

 

 

 

OTHER

 

 

464

 

1,228

 

 

$

170,983

$

160,293

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

CURRENT LIABILITIES:

 

 

Accounts payable – trade

 

$

14,167

$

13,940

 

Dividends payable

 

4,126

2,879

 

Accrued payroll and employee benefits

 

4,999

7,908

 

Deferred income taxes

 

3,364

3,364

 

Container deposits

 

978

924

 

Income taxes payable

 

1,837

 

Other accruals

 

 

1,367

 

1,592

 

Total current liabilities

 

30,838

30,607

 

 

 

OTHER LONG-TERM LIABILITIES

 

402

633

 

 

 

DEFERRED INCOME TAXES

 

7,553

7,555

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

Common stock, par value $0.05; 10,259,458 and 10,253,458 shares issued and outstanding as of September 30, 2010 and March 28, 2010, respectively

 

513

513

 

Additional paid-in capital

 

39,678

39,027

 

Retained earnings

 

91,964

81,921

 

Accumulated other comprehensive income

 

 

35

 

37

 

Total shareholders’ equity

 

132,190

121,498

 

 

$

170,983

$

160,293

 

 

See accompanying notes to financial statements.

 

3

 


 

Table of Contents

 

 

HAWKINS, INC.

CONDENSED STATEMENTS OF INCOME (UNAUDITED)

 

 

Three Months Ended
September 30,

Six Months Ended
September 30,

 

(In thousands, except share and per-share data)

 

2010

2009

2010

2009

 

 

 

Sales

 

$

70,398

$

64,976

$

145,064

$

138,562

 

 

 

Cost of sales

 

(52,656

)

(47,560

)

(108,874

)

(105,290

)

 

 

Gross profit

 

17,742

17,416

36,190

33,272

 

 

 

Selling, general and administrative expenses

 

(6,814

)

(6,568

)

(13,475

)

(12,923

)

 

 

Operating income

 

10,928

10,848

22,715

20,349

 

 

 

Investment income

 

96

80

201

89

 

 

 

Income from continuing operations before income taxes

 

11,024

10,928

22,916

20,438

 

 

 

Provision for income taxes

 

(4,192

)

(4,263

)

(8,747

)

(7,829

)

 

 

Income from continuing operations

 

6,832

6,665

14,169

12,609

 

 

 

Income from discontinued operations, net of tax

 

109

 

 

 

Net income

 

$

6,832

$

6,665

$

14,169

$

12,718

 

 

 

Weighted average number of shares outstanding-basic

 

10,257,175

10,250,719

10,255,297

10,248,577

 

 

 

Weighted average number of shares outstanding-diluted

 

10,332,764

10,280,252

10,321,355

10,274,443

 

 

 

Basic earnings per share

 

 

Earnings per share from continuing operations

 

$

0.67

$

0.65

$

1.38

$

1.23

 

Earnings per share from discontinued operations

 

0.01

 

Basic earnings per share

 

$

0.67

$

0.65

$

1.38

$

1.24

 

 

 

Diluted earnings per share

 

 

Earnings per share from continuing operations

 

$

0.66

$

0.65

$

1.37

$

1.23

 

Earnings per share from discontinued operations

 

0.01

 

Diluted earnings per share

 

$

0.66

$

0.65

$

1.37

$

1.24

 

 

 

Cash dividends declared per common share

 

$

0.40

$

0.38

$

0.40

$

0.38

 

 

See accompanying notes to financial statements.

 

 

4

 


 

Table of Contents

 

 

HAWKINS, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

Six Months Ended September 30,

 

 

2010

2009

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

Net income

 

$

14,169

$

12,718

 

Reconciliation to cash flows:

 

 

Depreciation and amortization

 

3,425

3,140

 

Stock compensation expense

 

654

329

 

Gain from property disposals

 

(26

)

(2

)

Changes in operating accounts (using) providing cash:

 

 

Trade receivables

 

(2,479

)

4,181

 

Inventories

 

(3,444

)

6,270

 

Accounts payable

 

844

(115

)

Accrued liabilities

 

(3,311

)

(3,198

)

Income taxes

 

6,195

4,713

 

Other

 

1,229

(617

)

Net cash provided by operating activities

 

 

17,256

 

27,419

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Additions to property, plant, and equipment

 

(5,138

)

(4,461

)

Purchases of investments

 

(4,410

)

(30,980

)

Sale and maturities of investments

 

11,445

980

 

Proceeds from property disposals

 

53

119

 

Net cash provided by (used in) investing activities

 

 

1,950

 

(34,342

)

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Cash dividends paid

 

(2,879

)

(2,666

)

Net cash used in financing activities

 

 

(2,879

)

 

(2,666

)

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

16,327

(9,589

)

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

18,772

 

29,536

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

35,099

$

19,947

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

Cash paid for income taxes

 

$

2,550

$

3,204

 

 

 

Noncash investing activities-
Capital expenditures in accounts payable

 

$

501

 

$

 

 

 

See accompanying notes to financial statements.

 

 

5

 


 

Table of Contents

 

 

HAWKINS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 1 – Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions for Form 10-Q and, accordingly, do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. These statements should be read in conjunction with the financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2010, previously filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary to present fairly our financial position and the results of our operations and cash flows for the periods presented. All adjustments made to the interim financial statements were of a normal recurring nature.

 

The accounting policies we follow are set forth in “Item 8. Financial Statements and Supplementary Data, Note 1 – Nature of Business and Significant Accounting Policies” to our financial statements in our Annual Report on Form 10-K for the fiscal year ended March 28, 2010 (“fiscal 2010”) filed with the SEC on June 4, 2010.

 

The results of operations for the period ended September 30, 2010 are not necessarily indicative of the results that may be expected for the full fiscal year ending April 3, 2011 (“fiscal 2011”).

 

Note 2 – Earnings per Share

 

Basic earnings per share (“EPS”) are computed by dividing net earnings by the weighted-average number of common shares outstanding. Diluted EPS includes the incremental shares assumed to be issued upon the exercise of stock options and the incremental shares assumed to be issued as performance units and restricted stock. Basic and diluted EPS were calculated using the following:

 

Three months ended
September 30,

Six months ended
September 30,

 

2010

2009

2010

2009

 

Weighted average common shares outstanding – basic

 

10,257,175

 

10,250,719

 

10,255,297

 

10,248,577

 

Dilutive impact of stock options, performance units, and restricted stock

 

75,589

 

29,533

 

66,058

 

25,866

 

Weighted average common shares outstanding - diluted

 

 

10,332,764

 

10,280,252

 

10,321,355

  

 

10,274,443

 

 

For the period ended September 30, 2010, there were no shares or stock options excluded from the calculation of weighted average common shares for diluted EPS. For the three and six months ended September 30, 2009, 70,665 stock options were excluded from the calculation of weighted average common shares for diluted EPS because their effects were antidilutive.

 

Note 3 – Cash and Cash Equivalents and Investments

 

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2010, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

 

Description
(In thousands)

 

September 30,
2010

Level 1

Level 2

 

Level 3

 

Assets:

 

 

 

 

 

 

Cash

 

$

34,781

$

34,781

$

 

$

  

Certificates of deposit

 

 

27,862

 

 

27,862

 

 

Money market securities

 

 

318

 

318

 

 

 

 

Our financial assets that are measured at fair value on a recurring basis are certificates of deposit (“CD’s”), with maturities ranging from three months to two years which fall within valuation technique Level 2. The CD’s are classified as investments in current assets and noncurrent assets on the Condensed Balance Sheets. As of September 30, 2010, the CD’s in current assets have a fair value of $24.9 million, and in noncurrent assets, the CD’s have a fair value of $3.0 million.

 

The carrying value of cash and cash equivalents approximate fair value, as maturities are three months or less. We did not have any financial liability instruments subject to recurring fair value measurements as of September 30, 2010.

 

 

6

 


 

Table of Contents

 

 

Note 4 – Inventories

 

Inventories at September 30, 2010 and March 28, 2010 consisted of the following:

 

 

September 30,
2010

March 28,
2010

 

(In thousands)

 

 

Finished goods (FIFO basis)

 

$

27,416

$

23,258

 

LIFO reserve

 

(2,645

)

(1,931

)

Net inventory

 

$

24,771

$

21,327

 

 

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $27.2 million at September 30, 2010 and $23.1 million at March 28, 2010. The remainder of the inventory was valued and accounted for under the FIFO method. The LIFO reserve decreased $0.1 million during the three months ended September 30, 2010 compared to $4.2 million the three months ended September 30, 2009. During the six months ended September 30, 2010, the LIFO reserve increased $0.7 million while the reserve decreased $7.0 million in the six months ended September 30, 2009 as a result of the changes in inventory costs and inventory product mix. The valuation of LIFO inventory for interim periods is based on our estimates of year-end inventory levels and costs.

 

Note 5 – Goodwill and Intangible Assets

 

The carrying amount of goodwill as of September 30, 2010 and March 28, 2010 was $1.2 million.

 

Intangible assets consist primarily of customer lists, trade secrets and non-compete agreements classified as finite life and trademarks and trade names classified as indefinite life, related to previous business acquisitions. A summary of our intangible assets as of September 30, 2010 and March 28, 2010 were as follows:

 

September 30, 2010

 

Gross Carrying
Amount

Accumulated Amortization

Net

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

Finite-life intangible assets

 

$

3,259

$

 (972

)

$

2,287

 

Indefinite-life intangible assets

 

 

1,227

 

 

1,227

 

Total intangible assets, net

 

$

4,486

$

 (972

)

$

3,514

 

 

 

 

 

 

 

 

 

 

March 28, 2010

 

Gross Carrying
Amount

Accumulated Amortization

Net

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

Finite-life intangible assets

 

$

3,259

$

 (851

)

$

2,408

 

Indefinite-life intangible assets

 

 

1,227

 

 

 

1,227

 

Total intangible assets, net

 

$

4,486

$

 (851

)

$

3,635

 

 

 

 

 

7

 


 

Table of Contents

 

 

Note 6 – Income Taxes

 

In the preparation of our financial statements, management calculates income taxes based upon the estimated effective rate applicable to operating results for the full fiscal year. This includes estimating the current tax liability as well as assessing differences resulting from different treatment of items for tax and book accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet. These assets and liabilities are analyzed regularly and management assesses the likelihood that deferred tax assets will be recovered from future taxable income. We record any interest and penalties related to income taxes as income tax expense in the statements of income.

 

We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

 

We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions.  The tax years beginning with 2006 remain open to examination by the Internal Revenue Service, and with few exceptions, state and local income tax jurisdictions.

 

Note 7 – Accumulated Other Comprehensive Income

 

Components of accumulated other comprehensive income were as follows:

 

 (In thousands)

September 30,
2010

March 28,
2010

 

Unrealized gain (loss) on:

 

 

 

Available-for-sale investments

 

$

64

$

66

 

Post-retirement plan liability adjustments

 

(29

)

 

(29

)

Accumulated other comprehensive income

$

35

$

37

 

 

 

Note 8 – Stock Based Compensation

 

Stock Option Awards. Our Board of Directors approved a long-term incentive equity compensation arrangement for our executive officers during the first quarter of fiscal 2009. This long-term incentive arrangement provides for the grant of nonqualified stock options that vest at the end of a three-year period and expire no later than 10 years after the grant date

 

The following table represents the stock option activity for the six months ended September 30, 2010:

 

Shares

Weighted-
Average
Exercise
Price

Exercisable

 

Outstanding at beginning of period

 

131,997

$

17.82

 

 

Granted

 

 

 

 

Exercised

 

 

 

 

Forfeited or expired

 

 

 

 

Outstanding at end of period

 

131,997

$

17.82

 

 

 

Compensation expense for the three months ended September 30, 2010 and 2009 related to stock options was not material. We recorded $0.1 million in compensation expense related to stock options for the six month periods ended September 30, 2010 and 2009.

 

Performance-Based Restricted Stock Units. Our Board of Directors approved a performance-based equity compensation arrangement for our executive officers during the first quarter of fiscal 2009. This performance-based arrangement provides for the grant of performance-based restricted stock units that represent a possible future issuance of restricted shares of our common stock based on our pre-tax income target for the applicable fiscal year. The actual number of restricted shares to be issued to each executive officer will be determined when our final financial information becomes available after the applicable fiscal year and will be between zero shares and 73,387 shares in the aggregate for fiscal 2011. The restricted shares issued will fully vest two years after the last day of the fisc al year on which the performance is based. We are recording the compensation expense for the outstanding performance share units and then-converted restricted stock over the life of the awards.

 

 

8

 


 

Table of Contents

 

 

On June 10, 2009  and June 2, 2010, we awarded performance-based restricted stock units to our executive officers under this arrangement. The following table represents the restricted stock activity for the six months ended September 30, 2010:

 

Shares

Weighted-
Average Grant
Date Fair Value

 

Outstanding at beginning of period

 

23,000

$

19.90

 

Granted

 

26,500

 

25.81

 

Vested

 

 

 

Forfeited or expired

 

 

 

Outstanding at end of period

 

49,500

$

23.06

 

 

We recorded compensation expense of $0.3 million and $0.5 million related to performance share units for the three and six months ended September 30, 2010, respectively. We recorded compensation expense of $0.1 million and $0.2 million related to performance share units for the three and six months ended September 30, 2009, respectively.

 

Restricted Stock Awards. As part of their retainer, each non-employee Director receives restricted stock for their Board services. The restricted stock awards are expensed over the requisite vesting period, which begins on the date of issuance and ends on the date of the next Annual Meeting of Shareholders, based on the market value on the date of grant.

 

On August 5, 2009 and July 28, 2010 we awarded restricted stock to the Board. The following table represents the Board’s restricted stock activity for the six months ended September 30, 2010:

 

Shares

Weighted-
Average Grant
Date Fair Value

 

Outstanding at beginning of period

 

6,000

$

18.68

 

Granted

 

6,996

 

30.00

 

Vested

 

(6,000

)

 

18.68

 

Forfeited or expired

 

 

 

Outstanding at end of period

 

6,996

$

30.00

 

 

Compensation expense for the three months ended September 30, 2010 and 2009 related to restricted stock awards to the Board was not material. We recorded $0.1 million in compensation expense related to restricted stock awards to the Board for the six month periods ended September 30, 2010 and 2009.

 

Note 9 – Commitments and Contingencies

 

Litigation We are a party from time to time in various legal proceedings arising in the ordinary course of our business.  None of the pending proceedings are expected to have a material effect on the Company’s financial statements.

 

Note 10 – Discontinued Operations

 

In February 2009, we agreed to sell our inventory and entered into a marketing agreement regarding the business of our Pharmaceutical segment, which provided pharmaceutical chemicals to retail pharmacies and small-scale pharmaceutical manufacturers. On May 22, 2009 the majority of the inventory was sold for cash of approximately $1.6 million which approximated its carrying value. The remaining inventory, with a carrying value of approximately $0.1 million, was sold during fiscal 2010. The agreement provides for annual payments based on a percentage of gross profit on future sales up to a maximum of approximately $3.7 million. We have no significant remaining obligations to fulfill under the agreement. We initially recorded a receivable of approximately $1.7 million, equal to the carrying value of the assets that were related to this business. The first year payment under the agreement of ap proximately $0.8 million was received in the second quarter of fiscal 2011. Amounts received in excess of the $0.9 million remaining receivable will be recorded as a gain on sale of discontinued operations in future periods. The results of the Pharmaceutical segment have been reported as discontinued operations for all periods presented.

 

 

9

 


 

Table of Contents

 

 

Note 11 – Segment Information

 

We have two reportable segments: Industrial and Water Treatment. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Product costs and expenses for each segment are based on actual costs incurred along with cost allocation of shared and centralized functions. We evaluate performance based on profit or loss from operations before income taxes not including nonrecurring gains and losses. Reportable segments are defined by product and type of customer. Segments are responsible for the sales, marketing and development of their products and services. The segments do not have separate accounting, administration, customer service or purchasing functions. There are no intersegment sales and no operating segments have been aggregated. Given our nature, it is not practical to disclose revenues from external customers for each prod uct or each group of similar products. No single customer represents 10 percent or more of our revenue. Sales are primarily within the United States and all assets are located within the United States.

 

Reportable Segments

Industrial

Water Treatment

Total

 

(In thousands)

 

 

 

 

Three Months Ended September 30, 2010:

 

 

 

 

 

Sales

$

44,928

 

$

25,470

$

70,398

 

Gross profit

 

9,582

 

 

8,160

 

17,742

 

Operating income

 

5,351

 

 

5,577

 

10,928

 

 

 

 

 

 

Three Months Ended September 30, 2009:

 

 

 

 

 

 

Sales

$

41,404

 

$

23,572

$

64,976

 

Gross profit

 

8,823

 

 

8,593

 

17,416

 

Operating income

 

4,615

 

 

6,233

 

10,848

 

 

 

 

 

 

Six Months Ended September 30, 2010:

 

 

 

 

 

Sales

$

94,734

 

$

50,330

$

145,064

 

Gross profit

 

19,923

 

 

16,267

 

36,190

 

Operating income

 

11,764

 

 

10,951

 

22,715

 

 

 

 

 

Six Months Ended September 30, 2009:

 

 

 

 

Sales

$

91,124

$

47,438

$

138,562

 

Gross profit

 

17,264

 

16,008

 

33,272

 

Operating income

 

9,130

 

11,219

 

20,349

 

 

 

 

 

 

10

 


 

Table of Contents

 

 

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following is a discussion and analysis of our financial condition and results of operations for the three and six months ended September 30, 2010 as compared to September 30, 2009. This discussion should be read in conjunction with the Condensed Financial Statements and Notes to Condensed Financial Statements included in this Form 10-Q and Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 28, 2010 (“fiscal 2010”). References to fiscal 2011 refer to the fiscal year ending April 3, 2011.

 

Overview

 

We derive substantially all of our revenues from the sale of bulk and specialty chemicals to our customers in a wide variety of industries. We began our operations primarily as a distributor of bulk chemicals with a strong customer focus. Over the years we have maintained our strong customer focus and have expanded our business by increasing our sales of value-added specialty chemical products, including repackaging, blending and manufacturing certain products. In recent years, we significantly expanded the sales of our higher-margin blended and manufactured products. We expect this specialty chemical portion of our business to continue to grow.

 

We have continued to invest in growing our business. In fiscal 2010, we invested in two new facilities, which expanded our ability to service our customers and facilitate growth within our Industrial Group. Our new facility in Centralia, Illinois began operations in July 2009 and primarily serves our food-grade products business. Additionally, our new facility in Minneapolis, Minnesota, built to handle bulk chemicals sold to pharmaceutical manufacturers, became operational in June 2009. We opened one branch for our Water Treatment Group in the first quarter of each of fiscal 2010 and 2011 and expect to continue to invest in new branches to expand our geographic coverage. The cost of these new branches is not expected to be material.

 

We seek to maintain relatively constant gross profit dollars on each of our products as the cost of our raw materials increase or decrease. Since we expect that we will continue to experience fluctuations in our raw material costs and resulting prices in the future, we believe that gross profit dollars is the best measure of our profitability from the sale of our products. If we maintain relatively stable profit dollars on each of our products, our reported gross profit percentage will decrease when the cost of the product increases and will increase when the cost of the product decreases.  

 

We use the last in, first out (“LIFO”) method of valuing inventory, which causes the most recent product costs to be recognized in our income statement. The valuation of LIFO inventory for interim periods is based on our estimates of fiscal year-end inventory levels and costs. The LIFO inventory valuation method and the resulting cost of sales are consistent with our business practices of pricing to current commodity chemical raw material prices. Our raw material costs have been stable through the first six months of fiscal 2011, although we anticipate some increases in commodity costs by the end of fiscal 2011. As a result of these cost projections, we have recorded a $0.1 million decrease in our LIFO reserve and a corresponding increase in our reported gross profit for the three months ended September 30, 2010. For the six months ended September 30, 2010, we have recorded a $0.7 million increase in our LIFO reserve and a corresponding reduction in our reported gross profit. We anticipate continued competitive pricing pressure, which negatively impacted our margins in the second quarter and may have a negative effect on our margins in the remainder of fiscal 2011. Our raw material costs declined significantly in the first half of fiscal 2010, negatively impacting the results for that period due to selling higher cost inventory on hand at lower market prices.  Our use of LIFO partially offsets the impact of the rapidly changing prices, and our LIFO reserve decreased significantly in fiscal 2010 due to declining costs. This decrease in the reserve increased our reported gross profit in the three months ended September 30, 2009 by $4.2 million and in the six months ended September 30, 2009 by $7.0 million.

 

 

11

 


 

Table of Contents

 

Results of Operations

 

The following table sets forth the percentage relationship of certain items to sales for the period indicated:

 

 

Three months ended
September 30,

Six months ended
September 30,

 

2010

2009

2010

2009

Sales

 

 

100.0

%

100.0

%

100.0

%

100.0

%

Cost of sales

 

 

(74.8

)

(73.2

)

(75.1

)

(76.0

)

Gross profit

 

 

25.2

26.8

24.9

24.0

Selling, general and administrative expenses

 

 

(9.7

)

(10.1

)

(9.3

)

(9.3

)

Operating income

 

 

15.5

16.7

15.6

14.7

Investment income

 

 

0.1

0.1

0.1

0.1

Income from continuing operations before income taxes

 

 

15.6

16.8

15.7

14.8

Provision for income taxes

 

 

(6.0

)

(6.6

)

(6.0

)

(5.6

)

Incoming from continuing operations

 

 

9.6

10.2

9.7

9.2

Income from discontinued operations, net of tax

 

 

0.1

Net income

 

 

9.6

%

10.2

%

9.7

%

9.3

%

 

Three Months Ended September 30, 2010 Compared to the Three Months Ended September 30, 2009

 

Sales

 

Sales increased $5.4 million, or 8.3%, to $70.4 million in the three months ended September 30, 2010 as compared to $65.0 million in the same period a year ago. Sales of bulk chemicals, including caustic soda, were approximately 21.0% of sales during the three months ended September 30, 2010 and 18.8% during the three months ended September 30, 2009.  We experienced increased sales across many of our product lines in the second quarter of fiscal 2011 as compared to the same period in fiscal 2010.

 

Industrial Segment.  Industrial segment sales increased $3.5 million, or 8.5%, to $44.9 million for the three months ended September 30, 2010 as compared to the same period of the prior year, with the increase primarily driven by increased sales of bulk chemicals. 

 

Water Treatment Segment.  Water Treatment segment sales increased $1.9 million, or 8.1%, to $25.5 million for the three months ended September 30, 2010 as compared to the same period of the prior year. The sales increase was primarily due to increased sales of manufactured and specialty chemical products.

 

Gross Profit

 

Gross profit was $17.7 million, or 25.2% of sales, for the three months ended September 30, 2010, as compared to $17.4 million, or 26.8% of sales, for the three months ended September 30, 2009. The LIFO method of valuing inventory positively impacted gross profit by $0.1 million for the three months ended September 30, 2010 and $4.2 million for the three months ended September 30, 2009. The impact of LIFO in the prior year was primarily due to significant decreases in raw material costs experienced in the first two quarters of fiscal 2010, whereas we have seen raw material costs stabilize through the first half of fiscal 2011 and are expected to increase slightly by the end of the fiscal year.

 

Industrial Segment.  Gross profit for the Industrial segment was $9.6 million, or 21.3% of sales, for the three months ended September 30, 2010, as compared to $8.8 million, or 21.3% of sales, for the three months ended September 30, 2009. The increase in gross profit dollars was attributable to increased sales, primarily of bulk chemicals, which was partially offset by decreases in profits due to competitive pricing pressures. Declining raw material costs in the second quarter of the prior year negatively impacted the per-unit profits realized in that period.  The LIFO method of valuing inventory did not have a material impact on gross profit in this segment for the three months ended September 30, 2010 while it positively impacted gross profit by $3.3 million for the three mont hs ended September 30, 2009.

 

 

12

 


 

Table of Contents

 

 

Water Treatment Segment.  Gross profit for the Water Treatment segment was $8.2 million, or 32.0% of sales, for the three months ended September 30, 2010, as compared to $8.6 million, or 36.5% of sales, for the three months ended September 30, 2009. The decrease in gross profit dollars was primarily due to increased overhead costs from investments in new facilities and personnel within existing and new markets to support growth in this segment, partially offset by increased sales. The LIFO method of valuing inventory positively impacted gross profit in this segment by $0.1 million for the three months ended September 30, 2010 as compared to $0.9 million for the three months ended September 30, 2009.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses were $6.8 million, or 9.7% of sales, for the three months ended September 30, 2010 as compared to $6.6 million, or 10.1% of sales, for the three months ended September 30, 2009. The increase was primarily a result of higher equity incentive plan costs.

 

Operating Income

 

Operating income was $10.9 million for the three months ended September 30, 2010, an increase of $0.1 million from the same period in the prior year. The Industrial segment increased $0.7 million while the Water Treatment segment decreased $0.6 million. The increase in operating income was driven by increased sales partially offset by decreases in profits due to competitive pricing pressures, and higher overhead costs in the Water Treatment segment.

 

Investment Income

 

Investment income was $0.1 million for the three months ended September 30, 2010 and 2009.

 

Provision for Income Taxes

 

Our effective income tax rate was 38.0% for the three months ended September 30, 2010, compared to 39.0% for the three months ended September 30, 2009. The effective tax rate is impacted by projected taxable income, permanent items, and effective state tax rate projections.

 

Six Months Ended September 30, 2010 Compared to the Six Months Ended September 30, 2009

 

Sales

 

Sales increased $6.5 million, or 5.0%, to $145.1 million in the six months ended September 30, 2010 as compared to $138.6 million in the same period a year ago. Sales of bulk chemicals, including caustic soda, were approximately 20.2% of sales during the six months ended September 30, 2010 and 19.1% during the six months ended September 30, 2009.  We experienced increased sales across many of our product lines in the six months ended September 30 of fiscal 2011 as compared to the same period in fiscal 2010, which was partially offset by lower selling prices due to lower raw material costs in the first quarter of fiscal 2011 compared to the same period of fiscal 2010.

 

Industrial Segment.  Industrial segment sales increased $3.6 million, or 4.0%, to $94.7 million for the six months ended September 30, 2010 as compared to the same period of the prior year.  Increased sales of bulk chemicals and many other product lines were partially offset by reduced selling prices in response to lower raw material costs in the first quarter of fiscal 2011.

 

Water Treatment Segment.  Water Treatment segment sales increased $2.9 million, or 6.1%, to $50.3 million for the six months ended September 30, 2010 as compared to the same period of the prior year. The sales increase was primarily due to increased sales of manufactured and specialty chemical products, partially offset by lower selling prices due to lower raw material costs in the first quarter of fiscal 2011.

 

Gross Profit

 

Gross profit was $36.2 million, or 24.9% of sales, for the six months ended September 30, 2010, as compared to $33.3 million, or 24.0% of sales, for the six months ended September 30, 2009. Due to projected increases in certain raw material costs at the end of fiscal 2011, the LIFO method of valuing inventory negatively impacted gross profit by $0.7 million for the six months ended September 30, 2010, whereas LIFO positively impacted gross profit by $7.0 million for the six months ended September 30, 2009 due to significant decreases in raw material costs experienced in the first six months of fiscal 2010 and projected to be in place at the end of fiscal 2010.

 

 

13

 


 

Table of Contents

 

 

Industrial Segment.  Gross profit for the Industrial segment was $19.9 million, or 21.0% of sales, for the six months ended September 30, 2010, as compared to $17.3 million, or 19.0% of sales, for the six months ended September 30, 2009. The increase in gross profit dollars for this segment in the first six months of fiscal 2011 was attributable to increased sales of bulk chemicals, partially offset by decreases in profits due to competitive pricing pressures. Declining raw material costs in the first two quarters of the prior year negatively impacted the per-unit profits realized in that period.  The LIFO method of valuing inventory negatively impacted gross profit by $0.6 million in this segment for the six months ended September 30, 2010 while it positively impacted gross prof it by $5.5 million for the six months ended September 30, 2009.

 

Water Treatment Segment.  Gross profit for the Water Treatment segment was $16.3 million, or 32.3% of sales, for the six months ended September 30, 2010, as compared to $16.0 million, or 33.8% of sales, for the six months ended September 30, 2009. The increase in gross profit dollars was primarily due to increased sales of manufactured and specialty chemical products, which was largely offset by increased overhead costs from investments in new facilities and personnel within existing and new markets to support growth in this segment. The LIFO method of valuing inventory negatively impacted gross profit in this segment by $0.1 million for the six months ended September 30, 2010 while it positively impacted gross profit by $1.5 million for the six months ended September 30, 2009.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses were $13.5 million, or 9.3% of sales, for the six months ended September 30, 2010 as compared to $12.9 million, or 9.3% of sales, for the three months ended September 30, 2009. The increase was primarily a result of higher equity incentive plan costs.

 

Operating Income

 

Operating income was $22.7 million for the six months ended September 30, 2010, an increase of $2.4 million from the same period in the prior year. The Industrial segment increased $2.6 million while the Water Treatment segment decreased $0.2 million. The increase in operating income was driven by increased sales partially offset by decreases in profits due to competitive pricing pressures, and higher overhead costs in the Water Treatment segment.

 

Investment Income

 

Investment income was $0.2 million for the six months ended September 30, 2010 compared to $0.1 million for the six months ended September 30, 2009.

 

Provision for Income Taxes

 

Our effective income tax rate was 38.2% for the six months ended September 30, 2010, compared to 38.3% for the six months ended September 30, 2009. The effective tax rate is impacted by projected taxable income, permanent items, and effective state tax rate projections.

 

Liquidity and Capital Resources

 

Cash provided by operations for the six months ended September 30, 2010 was $17.3 million compared to $27.4 million for the six months ended September 30, 2009. The decrease in cash provided by operating activities was due primarily to an increase in working capital balances, including the timing of inventory purchases and the related vendor payments and an increase in trade receivables associated with the timing of customer payments, offset by the increase in net income. The higher levels of cash generated from working capital in the six months ended September 30, 2009 was driven by the rapidly declining material costs and selling prices experienced in that period.  Due to the nature of our operations, which includes purchases of large quantities of bulk chemicals, timing of purchases can result in significant changes in working capital investment and the resulting operating cash flow . Historically, our cash requirements increase during the period from April through September as caustic soda inventory levels increase as the majority of barges are received during this period. Additionally, due to the seasonality of the water treatment business, our accounts receivable balance generally increases during the same period.

 

Cash and investments available-for-sale of $63.0 million at September 30, 2010 increased by $9.3 million as compared with the $53.7 million available as of March 28, 2010, primarily due to cash flows generated from operations, offset by capital expenditures and dividends paid.

 

 

14

 


 

Table of Contents

 

 

Capital Expenditures

 

Capital expenditures were $5.1 million for the six months ended September 30, 2010 compared to $4.5 million in the same period in the prior fiscal year. Capital expenditures related to new facilities projects were approximately $0.4 million for the six months ended September 30, 2010 compared to $2.5 million for the six months ended September 30, 2009. Additional significant capital expenditures during the six months ended September 30, 2010 consisted of approximately $2.1 million for business expansion and process improvement projects, $1.8 million for other facility, regulatory and safety improvements and $0.7 million for new and replacement route sales trucks for the Water Treatment segment. We expect our cash flows from operations will be sufficient to fund our planned capital expenditures for the remainder of fiscal 2011.

 

Critical Accounting Policies

 

Our significant accounting policies are set forth in Note 1 to our financial statements in our Annual Report on Form 10-K for the fiscal year ended March 28, 2010. The accounting policies used in preparing our interim fiscal 2011 financial statements are the same as those described in our Annual Report.

 

Forward-Looking Statements

 

The information presented in this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts, but rather are based on our current expectations, estimates and projections, and our beliefs and assumptions. We intend words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will” and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. These factors could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Additional information concerning potential factors that could affect future financial results is included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2010. We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this Quarterly Report on Form 10-Q. We are not obligated to update these statements or publicly release the result of any revisions to them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.

 

 

 

 

15

 


 

Table of Contents

 

 

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

At September 30, 2010, our investment portfolio included $27.9 million of certificates of deposit classified as fixed income securities and cash and cash equivalents of $35.1 million. The fixed income securities, like all fixed income instruments, are subject to interest rate risks and will decline in value if market interest rates increase. However, while the value of the investment may fluctuate in any given period, we intend to hold our fixed income investments until recovery. Consequently, we would not expect to recognize an adverse impact on net income or cash flows during the holding period. We adjust the carrying value of our investments if impairment occurs that is other than temporary.

 

We are subject to the risk inherent in the cyclical nature of commodity chemical prices. However, we do not currently purchase forward contracts or otherwise engage in hedging activities with respect to the purchase of commodity chemicals. We attempt to pass changes in material prices on to our customers, however, there are no assurances that we will be able to pass on cost increases in the future.

 

ITEM 4.    CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures

 

As of the end of the period covered by this Quarterly Report on Form 10-Q, we conducted an evaluation, under supervision and with the participation of management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control

 

There was no change in our internal control over financial reporting during the second quarter of fiscal 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

16

 


 

Table of Contents

 

PART II. OTHER INFORMATION

 

ITEM 1A. RISK FACTORS

 

There have been no material changes to our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 28, 2010.

 

ITEM 6.    EXHIBITS

 

 

Exhibit Index

 

 

 

 

Exhibit

Description

Method of Filing

3.1

Amended and Restated Articles of Incorporation.  (1)

Incorporated by Reference

3.2

Amended and Restated By-Laws. (2)

Incorporated by Reference

31.1

Certification by Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.

Filed Electronically

31.2

Certification by Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.

Filed Electronically

32.1

Section 1350 Certification by Chief Executive Officer.

Filed Electronically

32.2

Section 1350 Certification by Chief Financial Officer.

Filed Electronically

 

 

 

 

(1)     Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report in Form 10-Q for the period ended June 30, 2010 and filed July 29, 2010.

 

(2)     Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 28, 2009 and filed November 3, 2009.

 

 

 

 

 

 

17

 


 

Table of Contents

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

HAWKINS, INC.

 

 

 

By:

/s/  Kathleen P. Pepski

 

 

 

 

 

Kathleen P. Pepski

Vice President, Chief Financial Officer, and Treasurer
(On behalf of the Registrant and as principal financial officer)

Dated: October 28, 2010

 

 

 

 

 

 

 

 

18

 


 

Table of Contents

 

 

 

Exhibit Index

 

 

 

 

Exhibit

Description

Method of Filing

3.1

Amended and Restated Articles of Incorporation.

Incorporated by Reference

3.2

Amended and Restated By-Laws. (1)

Incorporated by Reference

31.1

Certification by Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.

Filed Electronically

31.2

Certification by Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.

Filed Electronically

32.1

Section 1350 Certification by Chief Executive Officer.

Filed Electronically

32.2

Section 1350 Certification by Chief Financial Officer.

Filed Electronically

 

 

 

 

(1)     Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report in Form 10-Q for the period ended June 30, 2010 and filed July 29, 2010.

 

(2)     Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 28, 2009 and filed November 3, 2009.

 

 

 

 

 

 

 

19

 


hawkins105383_ex31-1.htm - Generated by SEC Publisher for SEC Filing

 

 
Exhibit 31.1

 

CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

 

CERTIFICATIONS

 

I, John R. Hawkins, certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Hawkins, Inc.;

 

 

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

 

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

 

 

 

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

 

 

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

 

 

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 28, 2010

 

 

 

/s/ John R. Hawkins

 

 

John R. Hawkins
Chief Executive Officer

 

 


hawkins105383_ex31-2.htm - Generated by SEC Publisher for SEC Filing

 

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

 

CERTIFICATIONS

 

I, Kathleen P. Pepski, certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Hawkins, Inc.;

 

 

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

 

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

 

 

 

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

 

 

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

 

 

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 28, 2010

 

 

 

/s/ Kathleen P. Pepski

 

 

Kathleen P. Pepski
Chief Financial Officer

 

 


hawkins105383_ex32-1.htm - Generated by SEC Publisher for SEC Filing

 

 

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Hawkins, Inc. (the Company) on Form 10-Q for the period ended September 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, John R. Hawkins, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

/s/ John R. Hawkins

 

John R. Hawkins
Chief Executive Officer
October 28, 2010

 

 

 

 


hawkins105383_ex32-2.htm - Generated by SEC Publisher for SEC Filing

 

 

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Hawkins, Inc. (the Company) on Form 10-Q for the period ended September 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Kathleen P. Pepski, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

/s/ Kathleen P. Pepski

 

Kathleen P. Pepski
Chief Financial Officer
October 28, 2010