What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-06-02 compared with 2020-05-20 · 38 added, 19 removed, 57 unchanged (50% of the section changed)

Hawkins, Inc.

distributes, blends and manufactures chemicals and specialty ingredients for our customers in a wide variety of industries.

We distribute, blend and manufacture chemicals and specialty ingredients for our customers in a wide variety of industries.

We began our operations primarily as a distributor of bulk chemicals with a strong customer focus.

12 unchanged sentences

• Performs contract and private label bleach packaging.

The group’s sales are concentrated primarily in the Midwestern states, while the group’s products sold into the food and pharmaceutical markets are sold nationally.

The group’s sales are concentrated primarily in the central United States, while the group’s products sold into the food and pharmaceutical markets are sold nationally.

The Industrial Group relies on a specially trained sales staff that works directly with customers on their specific needs.

The group conducts its business primarily through distribution centers and terminal operations.

The group conducts its business primarily through manufacturing locations and terminal operations.

Agricultural sales within this group tend to be seasonal, with higher sales due to the application of fertilizer during the planting season of March through June given the regions of the country where we are located.

6 unchanged sentences

In addition, our Industrial and Water Treatment groups share certain resources, which leverage fixed costs across both groups.

The group operates out of 29 warehouses supplying products and services to customers primarily in the Midwestern states and Florida.

The Water Treatment group operates out of 33 warehouses supplying products and services to customers primarily in the central United States and Florida.

In fiscal 2021, we added three locations, including two by acquisition and one through organic growth.

We expect to invest in existing and new branches to expand the group’s geographic coverage.

1 unchanged sentence

Health and Nutrition Segment.

We established the Health and Nutrition segment of our business in fiscal 2016 through our acquisition of Stauber Performance Ingredients.

Through sales of distributed specialty products and our manufactured products, our Health and Nutrition Group specializes in providing ingredient distribution, processing and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, health and wellness products.

Our Health and Nutrition Group specializes in providing ingredient distribution, processing and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, health and wellness products.

This group offers a diverse product portfolio including minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners and enzymes.

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We also have obtained certain trademarks for our products to distinguish them from our competitors’ products.

We regard many of the formulae, information and processes that we generate and use in the conduct of our business as proprietary and protectable under applicable copyright, patent, trademark, trade secret and unfair competition laws.

We regard many of the formulas, information and processes that we generate and use in the conduct of our business as proprietary and protectable under applicable copyright, patent, trademark, trade secret and unfair competition laws.

Customer Concentration.

In fiscal 2021, none of our customers accounted for 10% or more of our total sales.

Sales to our largest customer, which is in our Industrial segment, represented approximately 3-5% of our total sales in each of fiscal 2020, 2019 and 2018.

In fiscal 2020, four of our five largest customers were in our Industrial segment and one was in our Health and Nutrition segment.

Aggregate sales to these five customers represented approximately 10-12% of our total sales in each of fiscal 2020, 2019 and 2018.

No other customer represented more than 2% of our total sales in fiscal 2020.

The loss of any of our largest customers, or a substantial portion of their business, could have a material adverse effect on our results of operations.

We operate in a competitive industry and compete with many producers, distributors and sales agents offering products equivalent to substantially all of the products we offer.

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Historically, our cash requirements for working capital increase during the period from April through November as caustic soda inventory levels increase with most of our barges received during this period.

Additionally, due to seasonality of the Water Treatment business, our accounts receivable balance is generally higher during the period of April through September.

We had 656 employees as of March 29, 2020, including 74 covered by collective bargaining agreements.

Hawkins, Inc.

was founded in 1938 and incorporated in Minnesota in 1955.

We became a publicly-traded company in 1972.

Our principal executive offices are located at 2381 Rosegate, Roseville, Minnesota.

Additionally, due to seasonality in the Water Treatment segment, our accounts receivable balance is generally higher during the period of April through September.

Regulatory Matters.

We are subject to numerous federal, state and local environmental, health and safety laws and regulations in the jurisdictions in which we operate, including the management, storage, transportation and disposal of chemicals and wastes;

product regulation;

air water and soil contamination;

and the investigation and cleanup of any spills or releases that may result from our management, handling, storage, sale, or transportation of chemicals and other products.

In addition, societal concerns regarding the safety of chemicals in commerce and their potential impact on the environment have resulted in a growing trend towards increasing levels of product safety and environmental protection regulations.

These concerns have led to, and could continue to result in, more stringent regulatory intervention by governmental authorities.

In addition, we operate a fleet of more than 150 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the U.S.

Department of Transportation (“DOT”).

The DOT governs transportation matters including authorization to engage in motor carrier service, including the necessary permits to conduct our businesses, equipment operation, and safety.

The manufacture, packaging, labeling, advertising, promotion, distribution and sale of our food, pharmaceutical and health and nutrition products are subject to regulation by numerous national and local governmental agencies in the United States and other countries.

The primary regulatory bodies in the United States are the Food and Drug Administration (the “FDA”), the United States Department of Agriculture and the Federal Trade Commission, and we are also subject to similar regulators in other countries.

In particular, the FDA’s current good manufacturing practices (“GMPs”) describe policies and procedures designed to ensure that nutraceuticals, pharmaceuticals and dietary supplements are produced in a quality manner, do not contain contaminants or impurities, and are accurately labeled and cover the manufacturing, packaging, labeling and storing of supplements, with requirements for quality control, design and construction of manufacturing plants, testing of ingredients and final products, record keeping, and complaints processes.

Further information related to government regulation applicable to our business is included in this Annual Report on Form 10-K, in Part I, Item 1A - Risk Factors.

Human Capital.

Our team is a key to our success and we are committed to creating a workplace that attracts top talent and develops leaders and drives performance on behalf of our customers and shareholders.

We strive to recruit the best people for the job regardless of race, color, nationality, gender, age, disability, sexual orientation or any other status protected by law.

It is our policy to comply fully with all applicable laws relating to discrimination in the workplace and are committed to advancing an inclusive, collaborative and respectful culture.

The health and safety of our employees is our highest priority.

We work to ensure our employees have a thorough understanding of health and safety precautions that need to be taken in all business functions.

Specific safety initiatives include accident prevention work, improving process controls, safety training, safety committees, safety audits, incident investigation and improvement measures.

We have ensured the safety of our employees and our customers during the COVID-19 pandemic by implementing contingency and continuity plans to respond quickly and appropriately to identified risks, safe work practices in accordance with the guidance provided by the US Centers for Disease Control and Prevention ("CDC"), and flexible working policies.

We leveraged technology to enable approximately 175 employees to transition to remote working and enhanced sanitation and hygiene practices at all of our facilities.

Finally, we worked with a private company to offer our employees free, rapid testing for COVID-19 across the country.

Through communication, enhanced resources and leadership, we were able to support our employees, serve our customers and keep our facilities clean and safe during the pandemic.

We strive to provide employees with competitive wages commensurate with their skill levels, experience, knowledge and the regional market.

Full-time employees are eligible for health, dental and vision insurance, paid and unpaid leaves, 401(K) plan, retirement plans, life and disability/accident coverage and our employee assistance program.

As of March 28, 2021, we had 742 employees on a full-time equivalent basis across the United States.

Approximately 37% of our employees were female or racially and ethnically diverse, and approximately 10% were covered by a collective bargaining agreement.

Of the seven members of our Board of Directors, two are female, five are male, one is Asian American and six are white.

Available Information.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business