Hawkins Q2 revenue beats estimates on water treatment growth, acquisitions

Overview

• US water treatment and specialty ingredients firm's fiscal Q2 revenue up 12%, beating analyst expectations

• Adjusted EBITDA for fiscal Q2 rose 16%, beating analyst expectations

• Company completed two acquisitions to expand Water Treatment segment and repurchased $12 mln of stock

Outlook

• Hawkins expects second-half trends to be consistent with the first half

• Company notes SG&A in second half will not benefit from prior year's $6.2 mln reduction

• Hawkins expects full-year effective tax rate of approximately 25% to 27%

Result Drivers

• WATER TREATMENT VOLUME - Co said 16% segment revenue growth was primarily driven by increased volumes and improved pricing, especially in municipal end markets

• ACQUISITIONS - Co said acquired businesses contributed $3.7 mln in sales and expanded Water Treatment customer reach in Florida

• SEGMENT MIX - Industrial Solutions segment growth was driven by improved pricing and favorable product mix, offsetting lower volumes

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the diversified chemicals peer group is "buy"

• Wall Street's median 12-month price target for Hawkins Inc is $175.00, about 32.3% above its October 23 closing price of $132.32

• The stock recently traded at 30 times the next 12-month earnings vs. a P/E of 32 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)