What changed in this filing

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Item 1. Financial Statements

2025-07-30 compared with 2025-01-29 · 193 added, 197 removed, 294 unchanged (57% of the section changed)

8 unchanged sentences

Inventories 95,716 83,512

Income taxes receivable — 2,864

Prepaid expenses and other current assets 6,098 7,417

27 unchanged sentences

Deferred compensation liability 14,293 13,132

Earnout liability 12,262 11,235

Earnout liabilities 54,021 12,604

Other long-term liabilities 307 1,367

5 unchanged sentences

60,000,000 shares of $ 0.01 par value;

20,766,764 and 20,790,261 shares issued and outstanding as of December 29, 2024 and March 31, 2024, respectively

20,717,850 and 20,684,621 shares issued and outstanding as of June 29, 2025 and March 30, 2025, respectively

Additional paid-in capital 23,277 24,094

7 unchanged sentences

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

Three Months Ended Nine Months Ended

2024 December 31,

2023 December 29,

2024 December 31,

Three Months Ended

2025 June 30,

Sales $ 293,272 $ 255,879

17 unchanged sentences

(In thousands)

Three Months Ended Nine Months Ended

2024 December 31,

2023 December 29,

2024 December 31,

Three Months Ended

2025 June 30,

Net income $ 29,175 $ 28,879

Other comprehensive income, net of tax:

Unrealized gain (loss) on interest rate swap 629 ( 1,299 ) ( 807 ) ( 244 )

Unrealized loss on interest rate swap ( 324 ) ( 106 )

Total comprehensive income $ 28,851 $ 28,773

14 unchanged sentences

Shares surrendered for payroll taxes ( 28,590 ) — ( 3,028 ) — — ( 3,028 )

Shares repurchased ( 105,541 ) ( 1 ) ( 9,148 ) — — ( 9,149 )

Other comprehensive income, net of tax — — — — ( 324 ) ( 324 )

1 unchanged sentence

BALANCE — June 29, 2025 20,717,850 $ 207 $ 23,277 $ 459,680 $ 1,408 $ 484,572

Cash dividends declared and paid ($ 0.18 per share)

— — — ( 3,763 ) — ( 3,763 )

Share-based compensation expense — — 1,832 — — 1,832

Vesting of restricted stock 10,647 — — — — —

ESPP shares issued 21,786 1 1,296 — — 1,297

Other comprehensive income, net of tax — — — — ( 1,330 ) ( 1,330 )

Net income — — — 24,118 — 24,118

BALANCE — September 29, 2024 20,766,764 $ 208 $ 31,060 $ 410,425 $ 1,679 $ 443,372

Cash dividends declared and paid ($ 0.18 per share)

— — — ( 3,764 ) — ( 3,764 )

Share-based compensation expense — — 1,723 — — 1,723

Other comprehensive loss, net of tax — — — — 629 629

Net income — — — 15,021 — 15,021

BALANCE — December 29, 2024 20,766,764 $ 208 $ 32,783 $ 421,682 $ 2,308 $ 456,981

Common Stock Additional

3 unchanged sentences

Shares Amount

BALANCE — April 2, 2023 20,850,454 $ 209 $ 44,443 $ 302,424 $ 2,940 $ 350,016

BALANCE — March 31, 2024 20,790,261 $ 208 $ 38,154 $ 364,549 $ 3,115 $ 406,026

Cash dividends declared and paid ($ 0.16 per share)

3 unchanged sentences

Shares surrendered for payroll taxes ( 34,047 ) ( 1 ) ( 2,540 ) — — ( 2,541 )

ESPP shares issued 35,281 — 1,147 — — 1,147

Other comprehensive income, net of tax — — — — 749 749

Net income — — — 23,430 — 23,430

BALANCE — July 2, 2023 20,942,857 $ 209 $ 44,409 $ 322,694 $ 3,689 $ 371,001

Cash dividends declared and paid ($ 0.16 per share)

— — — ( 3,375 ) — ( 3,375 )

Share-based compensation expense — — 1,260 — — 1,260

Vesting of restricted stock 12,565 — — — — —

Shares repurchased ( 105,541 ) ( 1 ) ( 9,148 ) — — ( 9,149 )

1 unchanged sentence

Net income — — — 28,879 — 28,879

BALANCE — October 1, 2023 20,787,626 $ 208 $ 35,918 $ 342,535 $ 3,995 $ 382,656

Cash dividends declared and paid ($ 0.16 per share)

— — — ( 3,351 ) — ( 3,351 )

Share-based compensation expense — — 1,287 — — 1,287

ESPP shares issued 26,731 — 1,096 — — 1,096

Shares repurchased ( 24,065 ) — ( 1,520 ) — — ( 1,520 )

Other comprehensive income, net of tax — — — — ( 1,299 ) ( 1,299 )

Net income — — — 14,885 $ — 14,885

BALANCE — December 31, 2023 20,790,292 $ 208 $ 36,781 $ 354,069 $ 2,696 $ 393,754

BALANCE — June 30, 2024 20,734,331 $ 207 $ 27,932 $ 390,070 $ 3,009 $ 421,218

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

2024 December 31,

Three Months Ended

2025 June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation and amortization 12,291 9,329

Change in fair value of earnout liability 1,027 —

Change in fair value of earnout liabilities ( 1,583 ) 342

Operating leases 923 782

18 unchanged sentences

Cash dividends declared and paid ( 3,754 ) ( 3,358 )

New shares issued 1,297 2,243

Payroll taxes paid in exchange for shares withheld ( 3,028 ) ( 2,541 )

1 unchanged sentence

Payments on revolving loan ( 10,000 ) ( 10,000 )

Payments for debt issuance costs ( 764 ) —

Proceeds from revolving loan borrowings 160,000 45,000

Net cash used in financing activities ( 6,278 ) ( 13,055 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,152 ( 1,825 )

Net cash provided by financing activities 142,454 19,952

NET INCREASE IN CASH AND CASH EQUIVALENTS 9,399 1,734

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,103 7,153

1 unchanged sentence

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for income taxes $ 26,566 $ 22,125

Cash paid for interest $ 3,286 $ 1,347

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All significant intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for the nine months ended December 29, 2024 are not necessarily indicative of the results that may be expected for the full year.

References to fiscal 2024 refer to the fiscal year ended March 31, 2024 and references to fiscal 2025 refer to the fiscal year ending March 30, 2025.

The results of operations for the three months ended June 29, 2025 are not necessarily indicative of the results that may be expected for the full year.

As used in this Form 10-Q, except where otherwise stated or indicated by the context, "Hawkins," "we," "us," the Company," or "our" means Hawkins, Inc.

and its subsidiaries.

References to "fiscal 2024" refer to the fiscal year ended March 31, 2024, references to "fiscal 2025" refer to the fiscal year ended March 30, 2025, and references to "fiscal 2026" refer to the fiscal year ending March 29, 2026.

Effective beginning with the first quarter of fiscal 2026, we realigned our reporting segments to reflect organizational changes made and to reflect the way we manage our operations and allocate resources.

We believe this realignment better reflects the value our company provides to our customers and our evolution from a bulk commodity distributor into a specialty ingredients company.

We now organize and manage our business by the following three segments, each of which meets the definition of reportable segments under ASC 280-10, Segment Reporting :

Water Treatment, Food & Health Sciences, and Industrial Solutions.

These segments are defined primarily by product and type of customer.

Information presented in this quarterly report has been recast to align with the new segments.

Additional information regarding these new segments is set forth in Note 13 - Segment Information.

Use of Estimates.

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Accounting Policies.

The accounting policies we follow are set forth in Note 1 – Nature of Business and Significant Accounting Policies to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 , previously filed with the SEC.

There has been no significant change in our accounting policies since the end of fiscal 2025.

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For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024.

We are in the process of evaluating the impact of this standard on the disclosures in our financial statements.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07)

In November 2023, the FASB issued accounting standards update No.

2023-07 to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The update requires public entities to disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The amendments in this update are effective for public entities in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and are to be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is permitted.

We are in the process of evaluating the impact of this standard on the disclosures in our financial statements.

The adoption of ASU No.

2023-09 is not expected to have a material impact on our consolidated financial statements but will require a lower level of disclosure in our Form 10-K for the year ending March 29, 2026 and in periodic reports thereafter.

Disaggregation of Income Statement Expenses (ASU No.2024-03)

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires public entities to disclose, within the footnotes to the financial statements, disaggregated information about certain income statement expense captions, including disclosure of amounts for purchases of inventory, employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, on a prospective basis, with early adoption and retrospective application permitted.

We are currently evaluating the impact of the adoption of this standard on our consolidated financial statement disclosures.

Note 2 — Acquisitions

Acquisition of Waterguard, Inc.:

On October 30, 2024, we acquired substantially all the assets of Waterguard, Inc.

("Water Guard") for $ 18.0 million under the terms of a purchase agreement with Water Guard and its shareholders.

Water Guard distributes water treatment chemicals and equipment to its customers primarily throughout North Carolina.

Of the $ 18.0 million purchase price, $ 9.3 million was allocated to customer relationships, to be amortized over 15 years, $ 5.1 million was allocated to goodwill, $ 1.2 million was allocated to property, plant and equipment, and the remaining amount was allocated to net working capital.

Acquisition of WaterSurplus, Inc.:

On April 25, 2025, we acquired substantially all of the assets and assumed certain liabilities of Surplus Management, Inc.

d/b/a WaterSurplus (“WaterSurplus”) for an initial purchase price of approximately $ 149.9 million under the terms of an asset purchase agreement by and among WaterSurplus and related entities and their shareholders, Panther Acquisition Corporation, and Hawkins, Inc., as well as a related real estate purchase agreement.

In addition, we may be obligated to pay an additional earnout amount based on a target of accumulated gross profit for the first five years after the acquisition.

The maximum earnout liability of $ 53.7 million was discounted and recorded at the estimated present value of $ 43.0 million.

WaterSurplus is based in Rockford, IL and delivers sustainable water treatment solutions to customers throughout the United States.

The total purchase price, including the estimated $ 43.0 million earnout liability, was preliminarily allocated as follows:

$ 78.0 million to customer relationships, to be amortized over 15 years;

6.0 million to trade names, to be amortized over 15 years;

$ 10.0 million to technology, to be amortized over 8 years;

$ 82.7 million to goodwill;

13.1 million to property, plant and equipment;

and the remaining amount to net working capital.

The goodwill recognized as a result of this acquisition is primarily attributable to strategic and synergistic benefits, as well as the assembled workforce.

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Costs associated with this transaction were not material and were expensed as incurred.

The following pro forma information has been prepared as if the WaterSurplus acquisition and the borrowing that financed the acquisition had occurred as of the beginning of the fiscal years presented.

The unaudited pro forma information is not necessarily indicative of what our consolidated results of operations actually would have been had the acquisition occurred at the beginning of each fiscal year, nor is it indicative of our future operational results.

Three Months Ended

(in thousands, except per share data) June 29, 2025 June 30, 2024

Pro forma sales $ 295,427 $ 263,673

Pro forma net income $ 28,203 $ 25,695

Pro forma basic earnings per share $ 1.36 $ 1.23

Pro forma diluted earnings per share $ 1.36 $ 1.23

The unaudited pro forma financial information above is adjusted to reflect the following:

(a) interest expense, including amortization of debt issuance costs, related to the approximately $ 150 million of debt used to fund the acquisition and related purchase of real estate;

(b) amortization expense related to the preliminary $ 94 million of identifiable intangible assets recognized in conjunction with the acquisition;

(d) remeasurement of the earnout payable at fair value;

(e) adjustment to cost of goods sold for the inventory step-up adjustment;

(f) adjustment for acquisition costs incurred;

(g) elimination of net interest previously reflected on WaterSurplus’ financial statements;

and (h) recording income taxes at our effective tax rate for each period.

Acquisition of Amerochem Corporation:

In the fourth quarter of fiscal 2025, we acquired substantially all the assets and assumed certain liabilities of Amerochem Corporation ("Amerochem") for $ 44.0 million under the terms of a purchase agreement with Amerochem and its shareholders.

Amerochem distributed water treatment chemicals and equipment to its customers primarily throughout North Carolina.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

Acquisition of Waterguard, Inc.:

In the third quarter of fiscal 2025, we acquired substantially all the assets and assumed certain liabilities of Waterguard, Inc.

("Water Guard") for $ 18.0 million under the terms of a purchase agreement with Water Guard and its shareholders.

Water Guard distributed water treatment chemicals and equipment to its customers primarily throughout North Carolina.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

Acquisition of Wofford Water Service, Inc.:

On June 28, 2024, we acquired substantially all the assets of Wofford Water Service, Inc.

In the first quarter of fiscal 2025, we acquired substantially all the assets and assumed certain liabilities of Wofford Water Service, Inc.

("Wofford") for $ 3.4 million under the terms of a purchase agreement with Wofford and its shareholders.

Wofford distributed water treatment chemicals and equipment to customers mainly in Mississippi.

Of the $ 3.4 million purchase price, $ 2.2 million was allocated to customer relationships, to be amortized over 10 years, $ 1.0 million was allocated to goodwill, and the remaining amount was allocated to net working capital.

The goodwill recognized as a result of this acquisition is primarily attributable to strategic and synergistic benefits, as well as the assembled workforce.

Such goodwill is expected to be deductible for tax purposes.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

Costs associated with this transaction were not material and were expensed as incurred.

Acquisition of Intercoastal Trading, Inc.:

On June 3, 2024, we acquired substantially all the assets of Intercoastal Trading, Inc.

In the first quarter of fiscal 2025, we acquired substantially all the assets and assumed certain liabilities of Intercoastal Trading, Inc.

and certain related entities ("Intercoastal") for $ 22.0 million under the terms of a purchase agreement with Intercoastal and its shareholders.

Intercoastal distributes water treatment chemicals and equipment to its customers in Maryland, Delaware and Virginia.

Of the $ 22.0 million purchase price, $ 10.7 million was allocated to customer relationships, to be amortized over 15 years, $ 0.3 million to trade names, to be amortized over two years, $ 0.1 million to non-compete agreements, to be amortized over one year, $ 7.2 million to goodwill, $2.4 million was allocated to property, plant and equipment, and the remaining amount to net working capital.

The goodwill recognized as a result of this acquisition is primarily attributable to strategic and synergistic benefits, as well as the assembled workforce.

Such goodwill is expected to be deductible for tax purposes.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

Costs associated with this transaction were not material and were expensed as incurred.

Acquisition of Industrial Research Corporation:

In the fourth quarter of fiscal 2024, we acquired substantially all the assets of Industrial Research Corporation ("Industrial Research") for $ 4.6 million under the terms of a purchase agreement with Industrial Research and its shareholders.

Industrial Research distributed water treatment chemicals and equipment to customers primarily in central to northern Louisiana, eastern Texas and southern Arkansas.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

Costs associated with this transaction were not material and were expensed as incurred.

Acquisition of The Miami Products & Chemical Company:

In the third quarter of fiscal 2024, we acquired substantially all the assets of The Miami Products & Chemical Company ("Miami Products") for $ 15.5 million under the terms of a purchase agreement with Miami Products and its shareholders.

Miami Products is a bleach manufacturer and distributor serving customers primarily throughout Ohio and the surrounding region.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

Acquisition of Water Solutions Unlimited, Inc.:

In the third quarter of fiscal 2024, we acquired substantially all the assets of Water Solutions Unlimited, Inc.

("Water Solutions") under the terms of a purchase agreement with Water Solutions and its shareholders.

We paid $ 60 million at closing and may be obligated to pay an additional amount based on achieving a certain earnings target three years after the acquisition.

Water Solutions is a manufacturer and distributor of water treatment chemicals serving customers primarily throughout Indiana, Illinois and Michigan.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

Acquisition of EcoTech Enterprises, Inc.:

In the second quarter of fiscal 2024, we acquired substantially all the assets of EcoTech Enterprises, Inc.

("EcoTech") for $ 3.4 million, under the terms of a purchase agreement with EcoTech and its shareholders.

EcoTech was a water treatment chemical distribution company operating primarily in Arkansas.

Intercoastal distributed water treatment chemicals and equipment to its customers in Maryland, Delaware and Virginia.

The results of operations since the acquisition date and the assets are included in our Water Treatment segment.

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Reporting by operating segment is pertinent to understanding our revenues, as it aligns to how we review the financial performance of our operations.

Types of products sold within each operating segment help us to further evaluate the financial performance of our segments.

The following tables disaggregate external customer net sales by major revenue stream for the three and nine months ended December 29, 2024 and December 31, 2023:

Three months ended December 29, 2024

(In thousands) Water

Treatment Industrial Health and

Nutrition Total

Manufactured, blended or repackaged products (1)

$ 89,367 $ 76,306 $ 9,240 $ 174,913

Distributed specialty products (2)

— — 25,018 25,018

Bulk products (3)

9,136 14,075 — 23,211

Other 1,249 1,616 198 3,063

Total external customer sales $ 99,752 $ 91,997 $ 34,456 $ 226,205

Three months ended December 31, 2023

(In thousands) Water

Treatment Industrial Health and

Nutrition Total

Manufactured, blended or repackaged products (1)

$ 73,406 $ 78,313 $ 7,857 $ 159,576

Distributed specialty products (2)

— — 25,678 25,678

Bulk products (3)

7,629 12,921 — 20,550

Other 984 1,756 ( 48 ) 2,692

Total external customer sales $ 82,019 $ 92,990 $ 33,487 $ 208,496

Nine months ended December 29, 2024

The following tables disaggregate external customer net sales by major revenue stream as reviewed internally for the three months ended June 29, 2025 and June 30, 2024:

Three months ended June 29, 2025

(In thousands) Water

Treatment Industrial Health and

Nutrition Total

Manufactured, blended or repackaged products (1)

$ 307,902 $ 239,024 $ 21,033 $ 567,959

Distributed specialty products (2)

Treatment Food & Health Sciences Industrial Solutions Total

Manufactured, blended, repackaged products or equipment (1)

$ 136,347 $ — $ 41,318 $ 177,665

1 unchanged sentence

11,969 — 11,844 23,813

Nutrition — 35,337 — 35,337

Food — 26,077 — 26,077

Pharmaceutical — 5,557 — 5,557

Agricultural — 21,469 — 21,469

Other 1,250 737 1,367 3,354

Total external customer sales $ 149,566 $ 89,177 $ 54,529 $ 293,272

Nine months ended December 31, 2023

Three months ended June 30, 2024

(In thousands) Water

Treatment Industrial Health and

Nutrition Total

Manufactured, blended or repackaged products (1)

$ 249,155 $ 264,878 $ 28,956 $ 542,989

Distributed specialty products (2)

Treatment Food & Health Sciences Industrial Solutions Total

Manufactured, blended, repackaged products or equipment (1)

$ 105,007 $ — $ 40,348 $ 145,355

1 unchanged sentence

10,918 — 11,674 22,592

Nutrition — 35,325 — 35,325

Food — 26,516 — 26,516

Pharmaceutical — 5,673 — 5,673

Agricultural — 16,994 — 16,994

Other 1,251 585 1,588 3,424

Total external customer sales $ 117,176 $ 85,093 $ 53,610 $ 255,879

(1) For our Water Treatment and Industrial segments, this line includes our non-bulk specialty products that we either manufacture, blend, repackage, resell in their original form, or direct ship to our customers in smaller quantities, and services we provide for our customers.

For our Health and Nutrition segment, this line includes products manufactured, processed or repackaged in our facility and/or with our equipment.

(2) This line includes non-manufactured distributed specialty products in our Health and Nutrition segment, which may be sold out of one of our facilities or direct shipped to our customers.

(3) This line includes bulk products in our Water Treatment and Industrial segments that we do not modify in any way, but receive, store, and ship from our facilities, or direct ship to our customers in large quantities.

(1) This line includes our non-bulk specialty products in our Water Treatment and Industrial Solutions segments that we either manufacture, blend, repackage, resell in their original form, or direct ship to our customers in smaller quantities, and equipment and services we provide for our customers.

(2) This line includes bulk products in our Water Treatment and Industrial Solutions segments that we do not modify in any way, but receive, store, and ship from our facilities, or direct ship to our customers in large quantities.

Note 4 – Earnings per Share

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Basic and diluted EPS were calculated using the following:

Three Months Ended Nine Months Ended

December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Three Months Ended

June 29, 2025 June 30, 2024

Weighted-average common shares outstanding—basic 20,717,485 20,816,479

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The fair value of the deferred compensation is based on the quoted market prices for the mutual funds at the end of the period.

The earnout liability recorded in conjunction with the Water Solutions acquisition is based upon achieving certain targets.

The earnout is based on a target of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in year three of the acquisition.

The earnout liabilities recorded in conjunction with the acquisitions of Water Solutions (acquired during fiscal 2024) and WaterSurplus are based upon achieving certain targets.

The Water Solutions earnout is based on a target of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in year three of the acquisition.

The earnout liability was valued based upon a risk-neutral pricing analysis within a Monte Carlo simulation framework, which is a Level 3 input.

The earnout liability is adjusted to fair value at each reporting date until settled.

Changes in fair value are included in selling, general and administrative expenses in our Consolidated Statements of Income.

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of December 29, 2024 and March 31, 2024.

(In thousands) December 29, 2024 March 31, 2024

The WaterSurplus earnout liability is based on a target of accumulated gross profit for the first five years of the acquisition.

The earnout liability was discounted and recorded at the present value of the anticipated, maximum payout amount, which is a Level 3 input.

The earnout liabilities are adjusted to fair value at each reporting date until settled.

Changes in fair value are included in selling, general and administrative expenses in our Condensed Consolidated Statements of Income.

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of June 29, 2025 and March 30, 2025.

(In thousands) June 29, 2025 March 30, 2025

Deferred compensation plan assets Level 1 $ 14,009 $ 11,723

Interest rate swap Level 2 $ 1,929 $ 2,373

Earnout liability Level 3 $ 12,262 $ 11,235

WaterSurplus earnout liability Level 3 $ 43,357 $ —

Water Solutions earnout liability Level 3 $ 10,664 $ 12,604

Changes in the earnout liability measured at fair value using Level 3 inputs were as follows:

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Earnout liability at March 30, 2025

Fair value adjustments $ 1,027

Earnout liability at December 29, 2024

Addition for acquisition of WaterSurplus Level 3 $ 43,000

Fair value adjustments to WaterSurplus earnout liability Level 3 $ 357

Fair value adjustments to Water Solutions earnout liability Level 3 $ ( 1,940 )

Earnout liability at June 29, 2025

Note 6 – Inventories

Inventories at December 29, 2024 and March 31, 2024 consisted of the following:

Inventories at June 29, 2025 and March 30, 2025 consisted of the following:

2025 March 30,

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Net inventory $ 95,716 $ 83,512

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $ 74.1 million at December 29, 2024 and $ 76.2 million at March 31, 2024.

The remainder of the inventory was valued and accounted for under the FIFO method.

We use the last in, first out (“LIFO”) method of valuing the majority of our inventory, which causes the most recent product costs to be recognized in our income statement.

Note 7 – Goodwill and Intangible Assets

The carrying amount of goodwill was $ 116.7 million as of December 29, 2024 and $ 103.4 million as of March 31, 2024, of which $ 65.3 million was related to our Water Treatment segment, $ 44.9 million was related to our Health and Nutrition segment, and $ 6.5 million was related to our Industrial segment.

The increase in goodwill during the nine months ended December 29, 2024 represents goodwill recorded in connection with the acquisitions of the assets of Intercoastal, Wofford, and Waterguard as discussed in Note 2.

The following is a summary of our identifiable intangible assets as of December 29, 2024 and March 31, 2024:

December 29, 2024 March 31, 2024

The carrying amounts of goodwill for each of our three reportable segments were as follows:

(In thousands) Water Treatment Food & Health Sciences Industrial Solutions Total

Balance as of March 30, 2025

$ 83,968 $ 46,149 $ 5,292 $ 135,409

Addition due to acquisitions 83,490 — — 83,490

Balance as of June 29, 2025

$ 167,458 $ 46,149 $ 5,292 $ 218,899

The following is a summary of our identifiable intangible assets as of June 29, 2025 and March 30, 2025:

June 29, 2025 March 30, 2025

(In thousands) Gross

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Note 8 – Debt

Debt at December 29, 2024 and March 31, 2024 consisted of the following:

On April 25, 2025, we entered into a second amendment that further amended the Existing Credit Agreement (as amended, the “Credit Agreement”).

The second amendment increased the revolving commitment under the Existing Credit Agreement to provide us with senior secured revolving credit facilities (the “Revolving Loan Facility”) totaling $ 400.0 million.

The Revolving Loan Facility includes a $ 10.0 million letter of credit subfacility and $ 25.0 million swingline subfacility.

Bank, JP Morgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Associated Bank, N.A.

were lenders under the Credit Agreement as of the date of the second amendment.

We drew approximately $ 150 million of the proceeds from the Revolving Loan Facility to acquire substantially all of the assets of WaterSurplus.

We may use other proceeds from the Revolving Loan Facility for working capital, capital expenditures, restricted payments and other acquisitions permitted under the Credit Agreement, and other general corporate purposes.

We paid fees of approximately $ 1.0 million associated with this refinancing.

The Revolving Loan Facility is scheduled to mature on April 25, 2030.

Borrowings under the Revolving Loan Facility bear interest at a variable rate based on term SOFR plus a margin.

We have an interest rate swap in place to manage the risk associated with a portion of our variable-rate debt.

The notional amount of the swap agreement is $ 60 million.

At June 29, 2025, the effective interest rate on our borrowings was 4.9 %.

Debt at June 29, 2025 and March 30, 2025 consisted of the following:

2025 March 30,

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Total long-term debt $ 288,281 $ 138,906

We were in compliance with all covenants of our credit agreement as of December 29, 2024.

Note 9 – Income Taxes

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federal income tax as well as income tax of multiple state jurisdictions.

The tax years prior to our fiscal year ended March 28, 2021 are closed to examination by the Internal Revenue Service, and with few exceptions, state and local income tax jurisdictions.

Our effective income tax rate was 26 % for the nine months ended December 29, 2024, compared to 25 % for the nine months ended December 31, 2023.

The tax years prior to our fiscal year ended April 3, 2022 are closed to examination by the Internal Revenue Service, and with few exceptions, state and local income tax jurisdictions.

Our effective income tax rate was approximately 25 % for both the three months ended June 29, 2025 and June 30, 2024.

The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes.

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We are recording the compensation expense for the outstanding performance share units and the converted restricted stock over the life of the awards.

The following table represents the restricted stock activity for the nine months ended December 29, 2024:

The following table represents the restricted stock activity for the three months ended June 29, 2025:

Shares Weighted-

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Unvested at end of period 136,846 $ 95.93

We recorded compensation expense related to performance share units and restricted stock of $ 1.3 million and $ 3.9 million for the three and nine months ended December 29, 2024, respectively.

We recorded compensation expense related to performance share units and restricted stock of $ 1.0 million and $ 2.7 million for the three and nine months ended December 31, 2023, respectively.

We recorded compensation expense related to performance share units and restricted stock of $ 1.8 million for the three months ended June 29, 2025 and $ 1.1 million for the three months ended June 30, 2024.

Substantially all of the compensation expense was recorded in selling, general and administrative expenses in the condensed consolidated statements of income.

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The restricted stock awards are generally expensed over a one-year vesting period, based on the market value on the date of grant.

As of December 29, 2024, there were 6,734 shares of restricted stock with an average grant date fair value of $ 103.90 outstanding under this program.

Compensation expense for the three and nine months ended December 29, 2024 related to restricted stock awards to the Board was $ 0.2 million and $ 0.5 million, respectively.

Compensation expense for the three and nine months ended December 31, 2023 related to restricted stock awards to the Board was $ 0.1 million and $ 0.4 million, respectively.

As of June 29, 2025, there were 6,734 shares of restricted stock with an average grant date fair value of $ 103.90 outstanding under this program.

Compensation expense related to restricted stock awards to the Board was $ 0.2 million for the three months ended June 29, 2025 and $ 0.1 million for the three months ended June 30, 2024.

Note 11 – Share Repurchase Program

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Upon purchase of the shares, we reduce our common stock for the par value of the shares with the excess applied against additional paid-in capital.

During the three months ended December 29, 2024, no shares were repurchased, and during the nine months ended December 29, 2024, we repurchased 105,541 shares at an aggregate purchase price of $ 9.1 million.

During the three months ended December 31, 2023, we repurchased 24,065 shares at an aggregate purchase price of $ 1.5 million, and during the nine months ended December 31, 2023, we repurchased 191,861 shares at an aggregate purchase price of $ 11.3 million.

As of December 29, 2024, 831,946 shares remained available to be repurchased under the share repurchase program.

During the three months ended June 29, 2025, no shares were repurchased, and during the three months ended June 30, 2024, we repurchased 105,541 shares at an aggregate purchase price of $ 9.1 million.

As of June 29, 2025, 731,544 shares remained available to be repurchased under the share repurchase program.

Note 12 – Commitments and Contingencies

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Given the many uncertainties involved in assessing environmental claims, our reserves may prove to be insufficient.

While it is possible that additional expense related to the remediation will be incurred in future periods if currently unknown issues arise, we are unable to estimate the extent of any further financial impact.

No expenses were charged against this liability during the three and nine months ended December 29, 2024.

No expenses were charged against this liability during the three months ended June 29, 2025.

Note 13 – Segment Information

We have three reportable segments:

Water Treatment, Industrial, and Health and Nutrition.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 .

We evaluate performance based on profit or loss from operations before income taxes not including nonrecurring gains and losses.

Reportable segments are defined primarily by product and type of customer.

Segments are responsible for the sales, marketing and development of their products and services.

We allocate certain corporate expenses to our operating segments.

Effective beginning with the first fiscal quarter of fiscal 2026, we realigned our reporting segments to reflect organizational changes made and to reflect the way we manage our operations and allocate resources.

We believe this realignment better reflects the value our company provides to our customers and our evolution from a bulk commodity distributor into a specialty ingredients company.

In fiscal 2026, we organize and manage our business by the following three segments, each of which meets the definition of reportable segments under ASC 280-10, Segment Reporting :

Water Treatment, Food & Health Sciences, and Industrial Solutions.

These segments are defined primarily by product and type of customer.

Our chief operating decision-maker (CODM), who is our President and Chief Executive Officer, regularly reviews the consolidated financial statements in their entirety and financial information at the reportable segment level.

The CODM uses operating income and considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment.

The CODM also uses segment operating income for evaluating pricing strategy, to assess the performance of each segment by comparing the results of each segment with one another, and in determining the compensation of certain employees.

The CODM has ultimate responsibility for enterprise decisions and making resource allocation decisions for the Company and the segments.

• Our Water Treatment segment specializes in providing chemicals, products, equipment, services and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water and agricultural water.

This segment has the resources and flexibility to treat systems ranging in size from a single small well to a multi-million-gallon-per-day facility.

• Our Food & Health Sciences segment specializes in processing and formulation solutions as well as ingredient distribution to manufacturers in the nutrition, pharmaceutical, food, and agricultural markets.

This segment offers a

diverse product portfolio including base chemistry, acid based reactions, minerals, vitamins and amino acids, excipients, botanicals and herbs, sweeteners and enzymes, fertilizers, and food-grade and pharmaceutical salts and ingredients.

• Our Industrial Solutions segment specializes in providing industrial chemicals, products and services to industries such as industrial manufacturing, chemical processing, electronics, energy, plating, and surface finishing.

This segment’s principal products are acids and alkalis.

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 allocations of shared and centralized functions.

There are no intersegment sales and no operating segments have been aggregated.

No single customer’s revenues amounted to 10% or more of our total revenue.

Sales are primarily within the United States and all assets are located within the United States.

In fiscal 2026 and 2025, none of our customers accounted for 10% or more of our total sales.

Summarized financial information for our reportable segments is presented and reconciled to consolidated financial information in the following tables:

(In thousands) Water

Treatment Industrial Health and Nutrition Total

Three months ended December 29, 2024:

Sales $ 99,752 $ 91,997 $ 34,456 $ 226,205

Gross profit 26,027 15,180 7,217 48,424

Selling, general, and administrative expenses 16,054 7,058 4,249 27,361

Operating income 9,973 8,122 2,968 21,063

Three months ended December 31, 2023:

Sales $ 82,019 $ 92,990 $ 33,487 $ 208,496

Gross profit 20,241 16,495 5,512 42,248

Selling, general, and administrative expenses 12,470 7,292 4,012 23,774

Operating income 7,771 9,203 1,500 18,474

Nine months ended December 29, 2024:

Treatment Food & Health Sciences Industrial Solutions Total

Three months ended June 29, 2025:

Sales $ 149,566 $ 89,177 $ 54,529 $ 293,272

Cost of sales - materials 89,159 65,814 42,848 197,821

Cost of sales - operational overhead 16,660 4,015 2,414 23,089

Gross profit 43,747 19,348 9,267 72,362

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Operating income 24,662 10,967 5,704 41,333

Nine months ended December 31, 2023:

Interest expense, net ( 3,269 )

Other income 942

Income tax expense ( 9,831 )

Net income 29,175

Identifiable assets* 569,354 249,315 132,575 951,244

Capital expenditures 7,560 3,013 2,971 13,544

Depreciation and amortization 6,904 3,200 2,187 12,291

Three months ended June 30, 2024:

Sales $ 117,176 $ 85,093 $ 53,610 $ 255,879

Cost of sales - materials 65,997 61,547 41,941 169,485

Cost of sales - operational overhead 15,971 3,643 2,125 21,739

Gross profit 35,208 19,903 9,544 64,655

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Operating income 21,129 12,538 6,124 39,791

No significant changes to identifiable assets by segment occurred during the nine months ended December 29, 2024.

Interest expense, net ( 1,263 )

Other income 159

Income tax expense ( 9,808 )

Net income 28,879

Identifiable assets* 300,313 241,527 130,163 672,003

Capital expenditures 6,121 2,161 2,367 10,649

Depreciation and amortization 4,171 3,089 2,069 9,329

*Unallocated assets not included, consisting primarily of cash and cash equivalents, prepaid expenses, and non-qualified deferred compensation plan assets of $ 37.0 million at June 29, 2025 and $ 30.7 million at June 30, 2024.

Note 14 – Subsequent Events

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law.

The Act includes changes to U.S.

tax law that will be applicable to us beginning with our quarter ending September 28, 2026.

These changes include provisions allowing

accelerated tax deductions for qualified property that will provide future income tax benefits to us.

We are in the process of evaluating the impact of the Act to our consolidated financial statements.

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-Q

Item 1. Financial Statements