Sales up but profits down at Hawkins

Minneapolis-based Hawkins has announced a third quarter net income of $4.3m, down from the $5.6m achieved this time last year despite seeing its quarterly sales rise 16.5 per cent year-on-year from $60.6m to $70.6m. For the nine months ended December 31, 2010, net income was up slightly from $18.3m to $18.4m, with sales increasing from $199.2m to $215.7m. “We turned in a strong sales performance again this quarter across most product lines,” says CEO John R Hawkins. “However, profits for both of our segments [viz Industrial and Water Treatment] were down from last year’s third quarter due to lower profits per unit sold. Competitive pricing pressures, coupled with our investment in operational infrastructure to support growth negatively affected profit levels for both segments. We expect the competitive pricing conditions to continue for the remainder of our fiscal year,” he continues, adding that the company will “strive to maintain and grow [its] market share while meeting competitive prices”.

In other news, Hawkins has now completed its acquisition of Vertex Chemical, which in 2010 clocked up revenues of approximately $39m. “We are extremely pleased to be welcoming a company [with] the calibre of Vertex into the Hawkins organisation,” Hawkins says. “Vertex shares our value of placing the customer first and has built a high-quality manufacturing and distribution business focused on [the] manufacture and packaging of sodium hypochlorite bleaches in strategically located facilities. We believe this transaction will offer significant benefits to our shareholders as we intend to build on Vertex’s capabilities, plant sites and employees to broaden the products and services offered to Vertex’s current customer base. In addition, this acquisition provides us with an expanded geographic footprint and additional infrastructure to support our strategy of geographic growth for our Water Treatment Group.”

“My wife Lee and I have operated this family business for the last 32 years and we are very pleased with the opportunity for the Vertex business to increase its growth within the Hawkins organisation,” says Vertex chairman Michael H Moisio. “We have known and respected Hawkins and its management team for many years. Hawkins has a similar culture to that of Vertex, placing high value on quality and complete customer satisfaction. Both companies are committed to a seamless transition for our customers, suppliers and employees.”

www.hawkinsinc.com