HAWKINS INC

Previous wording

The following is a discussion and analysis of our financial condition and results of operations for the three and nine months ended December 28, 2025 as compared to the similar period ended December 29, 2024. This discussion should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in this quarterly report on Form 10-Q and Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 30, 2025.

Current wording

The following is a discussion and analysis of our financial condition and results of operations for the three months ended June 28, 2026 as compared to the similar period ended June 29, 2025. This discussion should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in this quarterly report on Form 10-Q and Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 29, 2026.

Previous wording

We completed the following acquisitions in fiscal 2025 and the first nine months of fiscal 2026. The results of operations since the date of each acquisition and the assets, including goodwill associated with these acquisitions, are included in our Water Treatment segment with the exception of the MakWood lactate business which is included in our Food & Health Sciences segment. Certain acquisitions discussed below are not included in Note 2 to our Condensed Consolidated Financial Statements as they were not deemed to be material enough to warrant disclosure.

Current wording

We completed the following acquisitions in the first quarter of fiscal 2027 and fiscal 2026. The results of operations since the date of each acquisition and the assets, including goodwill associated with these acquisitions, are included in our Water Treatment segment with the exception of the MakWood lactate business, which is included in our Food & Health Sciences segment. Certain acquisitions discussed below are not included in Note 2 to our Condensed Consolidated Financial Statements as they were not deemed to be material enough to warrant disclosure.

Previous wording

The aggregate annual revenue of these ten businesses acquired in fiscal 2025 and fiscal 2026 totaled approximately $116 million, as determined using the applicable twelve-month period preceding each respective acquisition date.

Current wording

The aggregate annual revenue of the seven businesses acquired during fiscal 2026 and the first quarter of fiscal 2027 totaled approximately $52.3 million, as determined using the applicable twelve-month period preceding each respective acquisition date.

Previous wording

We focus on operating income when evaluating our financial results as opposed to profitability as a percentage of sales, as sales dollars tend to fluctuate as raw material prices rise and fall. The costs for certain of our raw materials can rise or fall rapidly, causing fluctuations in gross profit as a percentage of sales.

Current wording

We focus on total operating income when evaluating our financial results as opposed to profitability as a percentage of sales, as sales dollars tend to fluctuate as raw material prices rise and fall, particularly in our Water Treatment and Industrial Solutions segments. The costs for certain of our raw materials can rise or fall rapidly, causing fluctuations in gross profit as a percentage of sales.

Previous wording

Sales were $244.1 million for the three months ended December 28, 2025, an increase of $17.9 million, or 8%, from sales of $226.2 million in the same period a year ago. Sales in our Water Treatment and Industrial Solutions segments both grew by more than 10%, while sales in our Food & Health Sciences segment decreased 10%.

Current wording

Sales were $315.7 million for the three months ended June 28, 2026, an increase of $22.4 million, or 8%, from sales of $293.3 million in the same period a year ago. All of our segments grew by more than 5% as compared to the prior year.

Previous wording

Water Treatment Segment. Water Treatment segment sales increased $79.5 million, or 23%, to $421.0 million for the nine months ended December 28, 2025, from sales of $341.5 million in the same period a year ago. Sales of bulk commodity products in the Water Treatment segment were approximately 9% of sales dollars in both the current period and in the same period a year ago. Sales increased as a result of approximately $70 million of added sales from acquired businesses as well as improved pricing and increased sales volumes on certain of our products in our legacy business.

Current wording

Water Treatment Segment. Water Treatment segment sales increased $8.7 million, or 6%, to $158.3 million for the three months ended June 28, 2026, from sales of $149.6 million in the same period a year ago. Sales of bulk commodity products in the Water Treatment segment were approximately 10% of sales dollars in the current quarter and 8% in the same period a year ago. Sales increased primarily due to improved pricing on certain of our products in our legacy business on higher volumes, along with approximately $6.9 million in additional sales from acquired businesses.

Previous wording

Food & Health Sciences Segment. Food & Health Sciences segment sales decreased $7.7 million, or 10%, to $70.0 million for the three months ended December 28, 2025, from sales of $77.7 million in the same period a year ago. Sales dollars decreased primarily as a result of decreased volumes of our food, health & nutrition, and agricultural products.

Current wording

Food & Health Sciences Segment. Food & Health Sciences segment sales increased $8.1 million, or 9%, to $97.3 million for the three months ended June 28, 2026, from sales of $89.2 million in the same period a year ago. Sales dollars increased as a result of increased volumes of our agricultural, nutrition, and pharmaceutical products, partially offset by decreased sales volumes of our food ingredients products.

Previous wording

Industrial Solutions Segment. Industrial Solutions segment sales increased $4.9 million, or 10%, to $53.6 million for the three months ended December 28, 2025, from sales of $48.7 million in the same period a year ago. Sales of bulk commodity products in the Industrial Solutions segment were approximately 21% of sales dollars in the current quarter and 25% in the same period a year ago. Sales increased primarily as a result of increased sales volumes of certain of our manufactured, blended and repackaged products.

Current wording

Industrial Solutions Segment. Industrial Solutions segment sales increased $5.6 million, or 10%, to $60.1 million for the three months ended June 28, 2026, from sales of $54.5 million in the same period a year ago. Sales of bulk commodity products in the Industrial Solutions segment were approximately 21% of sales dollars in the current quarter and 22% in the same period a year ago. Sales increased primarily as a result of increased sales volumes of certain of our manufactured, blended and repackaged products.

Previous wording

SG&A expenses increased $14.3 million, or 18%, to $93.0 million, or 11% of sales, for the nine months ended December 28, 2025, from $78.7 million, or 11% of sales, in the same period a year ago. This included $16.0 million in added costs from the acquired businesses in our Water Treatment segment, partially offset by a year-over-year reduction of $7.2 million due to a fair value adjustment recorded to the Water Solutions earnout liability due to a change in projected estimates related to the earnout target. The primary components of the $16.0 million in costs related to acquired businesses were personnel and operating costs, $6.8 million of amortization of intangibles, $1.4 million of fair value accretion on the WaterSurplus earnout liability and $1.2 million of acquisition costs. In addition, a year-over-year increase of $0.9 million in compensation expense related to our non-qualified deferred compensation plan increased SG&A expenses, with the offset in Other Income. SG&A expenses also increased due to increases in other variable costs, including variable pay and personnel costs.

Current wording

Selling, general and administrative (“SG&A”) expenses increased $4.3 million, or 14%, to $35.3 million, or 11% of sales, for the three months ended June 28, 2026, from $31.0 million, or 11% of sales, in the same period a year ago. This included $2.1 million due to added costs from the acquired businesses in our Water Treatment segment. In addition, the prior-year period included a $1.9 million favorable fair value adjustment that reduced SG&A, reflecting a downward revision to the estimated Water Solutions earnout liability based on a change in projected estimates related to the earnout target. This benefit did not recur in the current period, resulting in a $1.9 million year-over-year increase in SG&A. SG&A also included a $0.5 million increase in non-qualified deferred compensation expense, which was offset by a corresponding gain within other income. These increases were partially offset by lower acquisition-related costs and other changes across our operating expenses.

Previous wording

Operating income increased $1.5 million, or 7%, to $22.6 million, or 9% of sales, for the three months ended December 28, 2025, from $21.1 million, or 9% of sales, in the same period a year ago due to the combined impact of the factors discussed above.

Current wording

Operating income decreased $2.7 million, or 6%, to $38.7 million, or 12% of sales, for the three months ended June 28, 2026, from $41.3 million, or 14% of sales, in the same period a year ago due to the combined impact of the factors discussed above.

Previous wording

Other income was $2.1 million for the nine months ended December 28, 2025 compared to $1.3 million in the same period a year ago. The income represents gains recorded on investments held for our non-qualified deferred compensation plan. The amounts recorded as a gain were offset by similar amounts recorded as an increase to compensation expense within SG&A expenses.

Current wording

Other income was $1.4 million for the three months ended June 28, 2026 compared to $0.9 million in the same period a year ago. The income represents gains recorded on investments held for our non-qualified deferred compensation plan. The amounts recorded as a gain were offset by similar amounts recorded as an increase to compensation expense within SG&A expenses.

Previous wording

Our effective income tax rate was approximately 27% the three months ended December 28, 2025 and 26% for the same period a year ago. The effective tax rate in the prior year period was impacted by favorable tax provision adjustments recorded. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is expected to be approximately 26% to 27%.

Current wording

Our effective income tax rate was approximately 24% for the three months ended June 28, 2026 and 25% for the same period a year ago. The effective tax rate in both years was impacted by favorable tax provision adjustments recorded. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is expected to be approximately 25% to 27%.

Previous wording

Cash was $8.2 million at December 28, 2025, an increase of $3.1 million as compared with the $5.1 million available as of March 30, 2025.

Current wording

Cash was $8.0 million at June 28, 2026, an increase of $4.1 million as compared with the $3.9 million available as of March 29, 2026.

Previous wording

Cash provided by operating activities was $106.6 million for the nine months ended December 28, 2025, compared to cash provided by operating activities of $80.3 million in the same period a year ago. The year-over-year increase in cash provided by operating activities in the current period was primarily driven by favorable year-over-year changes in trade receivables and inventories compared to the same period a year ago. Due to the nature of our operations, which includes purchases of large quantities of bulk chemicals, the timing of purchases can result in significant changes in working capital investment and the resulting operating cash flow.

Current wording

Cash provided by operating activities was $35.2 million for the three months ended June 28, 2026, compared to cash provided by operating activities of $31.5 million in the same period a year ago. The year-over-year increase in cash provided by operating activities in the current period was primarily driven by favorable year-over-year changes in inventories and accounts payable compared to the same period a year ago, which was mostly offset by unfavorable changes in accounts receivable. Due to the nature of our operations, which includes purchases of large quantities of bulk chemicals, the timing of purchases can result in significant changes in working capital investment and the resulting operating cash flow.

Previous wording

Cash used in investing activities was $204.6 million for the nine months ended December 28, 2025, compared to $72.8 million in the same period a year ago. In the current period, we incurred acquisition spending of$167.1 million, including the acquisition of WaterSurplus for approximately $149.9 million paid at closing. Capital expenditures were $38.7 million for the current period, compared to $30.0 million in the same period a year ago. In the current period, we expended $4.2 million more for real estate and building expansions, contributing to the overall increase in capital expenditures compared to the prior year.

Current wording

Cash used in investing activities was $14.9 million for the three months ended June 28, 2026, compared to $164.5 million in the same period a year ago. In the current period, we incurred acquisition spending of$3.6 million compared to $151.3 million in the same period a year ago, including the acquisition of WaterSurplus for approximately $149.9 million paid at closing. Capital expenditures were $11.6 million for the current period, compared to $13.5 million in the same period a year ago. In the current period, we expended less on real estate and building expansions, contributing to the overall decrease in capital expenditures compared to the prior year.

Previous wording

Cash provided by financing activities was $101.1 million for the nine months ended December 28, 2025, compared to $6.3 million of cash used in financing activities in the same period a year ago. Included in financing activities in the current period were net debt borrowings of $115.0 million, compared to net debt borrowings of $15.0 million in the same period a year ago. We drew approximately $150 million of the proceeds from the Revolving Loan Facility for the acquisition of WaterSurplus. In addition, we repurchased no common stock in the current period, compared to $9.1 million in the same period of the prior year.

Current wording

Cash used in financing activities was $16.1 million for the three months ended June 28, 2026, compared to $142.5 million of cash provided by financing activities in the same period a year ago. Included in financing activities in the current period were no net debt borrowings, compared to net debt borrowings of $150.0 million in the same period a year ago when we drew approximately $150 million of the proceeds from the Revolving Loan Facility for the acquisition of WaterSurplus. In addition, we repurchased $7.0 million of our common stock in the current period, compared to no repurchases in the same period of the prior year.

Previous wording

Our Board has authorized the repurchase of up to 2.6 million shares of our outstanding common shares. The shares may be purchased on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. The primary objective of the share repurchase program is to offset the impact of dilution from issuances relating to employee and director equity grants and our employee stock purchase program. During the three and nine months ended December 28, 2025, we repurchased no shares of common stock. During the three months ended December 29, 2024, we repurchased no shares of common stock and during the nine months ended December 29, 2024, we repurchased 105,541 shares of common stock with an aggregate purchase price of $9.1 million. As of December 28, 2025, 731,544 shares remained available to be repurchased under the share repurchase program.

Current wording

Our Board has authorized the repurchase of up to 2.6 million shares of our outstanding common shares. The shares may be purchased on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. The primary objective of the share repurchase program is to offset the impact of dilution from issuances relating to employee and director equity grants and our employee stock purchase program. During the three months ended June 28, 2026, we repurchased 45,196 shares of common stock at an aggregate purchase price of $7.0 million. During the three months ended June 29, 2025, we repurchased no shares of common stock. As of June 28, 2026, 686,348 shares remained available to be repurchased under the share repurchase program.

Previous wording

We are party to a second amended and restated credit agreement with U.S. Bank National Association (“U.S. Bank”) as administrative agent, sole lead arranger and sole book runner, and the other lenders from time to time party thereto (collectively, the “Lenders”), dated as of March 31, 2022 (as amended, restated or modified from time to time, the “Credit Agreement”). A Joinder, Consent and Second Amendment, dated April 25, 2025 increased the revolving commitment under the Credit Agreement to provide us with senior secured revolving credit facilities (the “Revolving Loan Facility”) totaling $400.0 million. A Third Amendment, dated October 15, 2025, modified terms related to qualified receivables transactions, as defined in the Credit Agreement. The Revolving Loan Facility includes a $10.0 million letter of credit subfacility and $25.0 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 25, 2030. The Revolving Loan Facility is secured by substantially all of our personal property assets and those of our subsidiaries. We may

Current wording

We are party to a second amended and restated credit agreement with U.S. Bank National Association (“U.S. Bank”) as administrative agent, sole lead arranger and sole book runner, and the other lenders from time to time party thereto (collectively, the “Lenders”), dated as of March 31, 2022 (as amended, restated or modified from time to time, the “Credit Agreement”). A Joinder, Consent and Second Amendment, dated April 25, 2025 increased the revolving commitment under the Credit Agreement to provide us with senior secured revolving credit facilities (the “Revolving Loan Facility”) totaling $400.0 million. A Third Amendment, dated October 15, 2025, modified terms related to qualified receivables transactions, as defined in the Credit Agreement. The Revolving Loan Facility includes a $10.0 million letter of credit subfacility and $25.0 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 25, 2030. The Revolving Loan Facility is secured by substantially all of our personal property assets and those of our subsidiaries. We may use the amount available under the Revolving Loan Facility for working capital, capital expenditures, share repurchases, restricted payments and acquisitions permitted under the Credit Agreement, and other general corporate purposes. At June 28, 2026, we had $244.0 million outstanding under the Revolving Loan Facility.

Previous wording

Borrowings under the Revolving Loan Facility bear interest at a rate per annum equal to one of the following, plus, in both cases, an applicable margin based upon our leverage ratio: (a) Term SOFR, for an interest period of one, three or six months as selected by us, reset at the end of the selected interest period, or (b) a base rate determined by reference to the highest of (1) U. S. Bank’s prime rate, (2) the Federal Funds Effective Rate plus 0.5%, or (3) one-month Term SOFR for U.S. dollars plus 1.0%. The Term SOFR margin is between 1.0% and 1.85%, depending on our leverage ratio. The base rate margin is between 0.00% and 0.85%, depending on our leverage ratio. At December 28, 2025, the effective interest rate on our borrowings was 4.8%.

Current wording

Borrowings under the Revolving Loan Facility bear interest at a rate per annum equal to one of the following, plus, in both cases, an applicable margin based upon our leverage ratio: (a) Term SOFR, for an interest period of one, three or six months as selected by us, reset at the end of the selected interest period, or (b) a base rate determined by reference to the highest of (1) U. S. Bank’s prime rate, (2) the Federal Funds Effective Rate plus 0.5%, or (3) one-month Term SOFR for U.S. dollars plus 1.0%. The Term SOFR margin is between 1.0% and 1.85%, depending on our leverage ratio. The base rate margin is between 0.00% and 0.85%, depending on our leverage ratio. At June 28, 2026, the effective interest rate on our borrowings was 4.3%.

Previous wording

Debt issuance costs paid to the Lenders are being amortized as interest expense over the term of the Credit Agreement. As of December 28, 2025, the unamortized balance of these costs was $0.8 million, and is reflected as a reduction of debt on our balance sheet.

Current wording

Debt issuance costs paid to the Lenders are being amortized as interest expense over the term of the Credit Agreement. As of June 28, 2026, the unamortized balance of these costs was $0.7 million, and is included within other long-term assets on our condensed consolidated balance sheet.

Previous wording

The Credit Agreement contains customary events of default, the occurrence of which would permit the lenders to terminate their commitments and accelerate loans under the Revolving Loan Facility, including failure to make payments under the Revolving Loan Facility, failure to comply with covenants in the Credit Agreement and other loan documents, cross default to other material indebtedness, our failure to pay or discharge material judgments, bankruptcy, and change of control of the Company. The occurrence of an event of default would permit the lenders to terminate their commitments and accelerate loans under the Credit Facility.

Current wording

The Credit Agreement contains customary events of default including failure to make payments under the Revolving Loan Facility, failure to comply with covenants in the Credit Agreement and other loan documents, cross default to other material indebtedness, our failure to pay or discharge material judgments, bankruptcy, and change of control of the Company. The occurrence of an event of default would permit the lenders to terminate their commitments and accelerate loans under the Revolving Loan Facility.

Previous wording

As part of our growth strategy, we have acquired businesses and may pursue acquisitions or other strategic relationships in the future that we believe will complement or expand our existing businesses or increase our customer base. We believe we could borrow additional funds under our current or new credit facilities or sell equity for strategic reasons or to further strengthen our financial position.

Current wording

As part of our growth strategy, we have acquired businesses and may pursue acquisitions or other strategic relationships in the future that we believe will complement or expand our existing businesses or increase our customer base. We believe we could borrow additional funds under our current or new credit facilities or sell equity for strategic reasons or to further strengthen our financial position. We believe that our existing cash and cash equivalents, together with cash generated from operations and available borrowings under our existing Credit Agreement, will be sufficient to meet our working capital expenditure requirements for at least the next 12 months.

Previous wording

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. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “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 fiscal 2025. We caution you not to place undue reliance on these forward-looking statements, which reflect our

Current wording

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. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “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 fiscal 2026. 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.