Quarterlytics / Basic Materials / Chemicals - Specialty / Hawkins Inc.

Hawkins Inc.

hwkn · NASDAQ Basic Materials
Claim this profile
Ticker hwkn
Exchange NASDAQ
Sector Basic Materials
Industry Chemicals - Specialty
Employees 501-1000
← All annual reports
FY2022 Annual Report · Hawkins Inc.
Sign in to download
Loading PDF…
☑

☐

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended April 3, 2022

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-7647

HAWKINS, INC.

(Exact Name of Registrant as Specified in its Charter)

Minnesota
(State of Incorporaon)

2381 Rosegate, Roseville, Minnesota
(Address of Principal Execuve Offices)

41-0771293
(I.R.S. Employer
Idenficaon No.)
55113
(Zip Code)

Title of each class
Common Shares, par value $.01 per share

(612) 331-6910
(Registrant’s Telephone Number, Including Area Code)

Securies registered pursuant to Secon 12(b) of the Act:    
Trading Symbol:
HWKN
Securies registered pursuant to Secon 12(g) of the Act:    None

Name of exchange on which registered:    
Nasdaq Stock Market LLC

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securies Act.    Yes  ☑    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Secon 13 or Secon 15(d) of the Act.    Yes  ☐    No  ☑

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Secon 13 or 15(d) of the Securies Exchange Act of 1934 during the
preceding twelve months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past
90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submied electronically every Interacve Data File required to be submied pursuant to Rule 405 of Regulaon S-T

during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporng company, or an
emerging growth company. See the definions of “large accelerated filer,” “accelerated filer,” “smaller reporng company,” and “emerging growth company” in Rule 12b-2
of the Exchange Act.

Large accelerated filer ☑  

Non-accelerated filer ☐

Accelerated filer ☐

Smaller reporng company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transion period for complying with any new or

revised financial accounng standards provided pursuant to Secon 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and aestaon to its management’s assessment of the effecveness of its internal control over
financial reporng under Secon 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounng firm that prepared or issued its audit report.
  ☑   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

The aggregate market value of vong stock held by non-affiliates of the Registrant on September 26, 2021 (the last business day of the Registrant’s most recently
completed second fiscal quarter) was approximately $706.8 million based upon the closing sale price for the Registrant’s common shares on that date as reported by The
Nasdaq Stock Market LLC, excluding all shares held by officers and directors of the Registrant and by the Trustees of the Registrant’s Employee Stock Ownership Plan and
Trust.

As of May 13, 2022, the Registrant had 21,078,132 shares of common shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Porons of our definive Proxy Statement for the annual meeng of shareholders to be held August 3, 2022, are incorporated by reference in Part III of this Annual Report
on Form 10-K

 
 
 
 
 
FORWARD-LOOKING STATEMENTS

The  informaon  presented  in  this  Annual  Report  on  Form  10-K  contains  forward-looking  statements  within  the  meaning  of  Secon  21E  of  the  Securies
Exchange  Act  of  1934,  as  amended  (the  “Exchange  Act”).  These  forward-looking  statements  have  been  made  pursuant  to  the  provisions  of  the  Private
Securies  Ligaon  Reform  Act  of  1995.  These  statements  are  not  historical  facts,  but  rather  are  based  on  our  current  expectaons,  esmates  and
projecons,  and  our  beliefs  and  assumpons.  Words  such  as  “ancipate,”  “expect,”  “intend,”  “plan,”  “believe,”  “seek,”  “esmate,”  “will”  and  similar
expressions  may  idenfy  forward-looking  statements.  These  statements  are  not  guarantees  of  future  performance  and  are  subject  to  certain  risks,
uncertaines 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. These risks and uncertaines are described in the risk factors and elsewhere in this
Annual Report on Form 10-K. We cauon you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as
of the date of this Annual Report on Form 10-K. We are not obligated to update these statements or publicly release the result of any revisions to them to
reflect events or circumstances aer the date of this Annual Report on Form 10-K or to reflect the occurrence of unancipated events.

As used in this Annual Report on Form 10-K, except where otherwise stated or indicated by the context, “Hawkins,” “we,” “us,” “the Company,” “our,” or “the
Registrant” means Hawkins, Inc. References to "fiscal 2023" means our fiscal year ending April 2, 2023, “fiscal 2022” means our fiscal year ended April 3,
2022, “fiscal 2021” means our fiscal year ended March 28, 2021, “fiscal 2020” means our fiscal year ended March 29, 2020, and “fiscal 2019” means our fiscal
year ended March 31, 2019.

ii

Hawkins, Inc.

Annual Report on Form 10-K
For the Fiscal Year Ended April 3, 2022

ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.

ITEM 5.

ITEM 6.
ITEM 7.
ITEM 7A.
ITEM 8.
ITEM 9.
ITEM 9A.
ITEM 9B.
ITEM 9C.

ITEM 10.
ITEM 11.
ITEM 12.

ITEM 13.
ITEM 14.

Business
Risk Factors
Unresolved Staff Comments
Properes
Legal Proceedings
Mine Safety Disclosures

PART I

PART II

Market for the Company’s Common Equity, Related Shareholder Maers, and Issuer Purchases of Equity Securies
Reserved
Management’s Discussion and Analysis of Financial Condion and Results of Operaons
Quantave and Qualitave Disclosures about Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounng and Financial Disclosure
Controls and Procedures
Other Informaon
Disclosure Regarding Foreign Jurisdicons That Prevent Inspecons
PART III

Directors, Execuve Officers, and Corporate Governance
Execuve Compensaon
Security Ownership of Certain Beneficial Owners and Management And Related Stockholder Maers
Certain Relaonships and Related Transacons, and Director Independence
Principal Accountant Fees and Services

ITEM 15.
ITEM 16.

Exhibits and Financial Statement Schedules
Form 10-K Summary

PART IV

iii

Page

1
4
11
12
12
12

13
14
14
21
22
48
48
49
49

50
51

51
51
51

52
54

 
 
 
ITEM 1. BUSINESS

PART I

We  are  a  leading  specialty  chemical  and  ingredients  company  that  formulates,  distributes,  blends  and  manufactures  products  for  our  Industrial,  Water
Treatment and Health and Nutrion customers. We believe that we create value for our customers through superb service and support, quality products,
personalized applicaons and trustworthy, creave employees.

We conduct our business in three segments: Industrial, Water Treatment, and Health and Nutrion.

Industrial  Segment.    Our  Industrial  Group  specializes  in  providing  industrial  chemicals,  products  and  services  to  industries  such  as  agriculture,  chemical
processing, electronics, energy, food, pharmaceucal and plang. This group’s principal products are acids, alkalis and food-grade and pharmaceucal salts
and ingredients.

The Industrial Group:

• Manufactures  sodium  hypochlorite  (bleach),  agricultural  products  and  certain  food-grade  and  pharmaceucal  products,  including  liquid  phosphates,

lactates and other blended products;

• Receives, stores and distributes various chemicals in bulk quanes, including liquid causc soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid,

aqua ammonia and potassium hydroxide;

• Repackages water treatment chemicals for our Water Treatment Group and bulk industrial chemicals to sell in smaller quanes to our customers;

• Performs custom blending of chemicals according to customer formulas and specificaons; and

• Performs contract and private label bleach packaging.

The group’s sales are concentrated primarily in the central United States, while the group’s products sold into the food and pharmaceucal markets are sold
naonally.  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 manufacturing locaons and terminal operaons. Agricultural sales within this group tend to be seasonal, with higher sales due to
the applicaon of ferlizer during the planng season of March through June given the regions of the country where we are located.

Water Treatment Segment.  Our Water Treatment Group specializes in providing chemicals, products, equipment, services and soluons for potable water,
municipal and industrial wastewater, industrial process water, non-residenal swimming pool water and agricultural water. This group has the resources and
flexibility to treat systems ranging in size from a single small well to a mul-million-gallon-per-day facility.

The group ulizes delivery routes operated by our employees who typically serve as route driver, salesperson and trained technician to deliver our products
and diagnose our customers’ water treatment needs. We believe that the high level of service provided by these individuals allows us to serve as the trusted
water treatment expert for many of the municipalies and other customers that we serve. We also believe that there are significant synergies between our
Water Treatment and Industrial Groups in that we are able to obtain a compeve cost posion on many of the chemicals sold by the Water Treatment Group
due to the volumes of these chemicals purchased by our Industrial Group. In addion, our Industrial and Water Treatment groups share certain resources,
which leverage fixed costs across both groups.

The Water Treatment group operates out of 37 warehouses supplying products and services to customers primarily in the central United States, and along the
south from Florida to Texas. In fiscal 2022, we added four locaons, all by acquision. We expect to invest in exisng and new branches to expand the group’s
geographic coverage. Our Water Treatment Group has historically experienced higher sales during April to September, primarily due to a seasonal increase in
chemicals used by municipal water treatment facilies.

1

 
Health  and  Nutrion  Segment.  Our  Health  and  Nutrion  Group  specializes  in  providing  ingredient  distribuon,  processing  and  formulaon  soluons  to
manufacturers of nutraceucal, funconal food and beverage, personal care, dietary supplement and other nutrional food, health and wellness products.
This group offers a diverse product porolio including minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners and
enzymes.

The Health and Nutrion Group relies on a specially trained sales and product development staff that works directly with customers on their specific needs.
The  group’s  extensive  product  porolio  combined  with  value-added  services,  including  product  formulaon,  sourcing  and  distribuon,  processing  and
blending and quality control and compliance, posions this group as a one-stop ingredient soluons provider to its customers. The group operates out of
facilies in California and New York and its products are sold naonally and, in certain cases, internaonally.

Raw Materials.    We  have  numerous  suppliers,  including  many  of  the  major  chemical  producers  in  the  United  States.  We  source  our  health  and  nutrion
ingredients from a wide array of domesc and internaonal vendors. We typically have distributorship agreements or supply contracts with our suppliers that
are  periodically  renewed.  We  believe  that  most  of  the  products  we  purchase  can  be  obtained  from  alternave  sources  should  exisng  relaonships  be
terminated. We are dependent upon the availability of our raw materials. While we believe that we have adequate sources of supply for our raw material and
product requirements, we cannot be sure that supplies will be consistently available in the future. In the event that certain raw materials become generally
unavailable,  suppliers  may  extend  lead  mes  or  limit  or  cut  off  the  supply  of  materials  to  us.  As  a  result,  we  may  not  be  able  to  supply  or  manufacture
products for our customers.

Intellectual  Property.    Our  intellectual  property  porolio  is  of  economic  importance  to  our  business.  When  appropriate,  we  have  pursued,  and  we  will
connue to pursue, patents covering our products. We also have obtained certain trademarks for our products to disnguish them from our competors’
products. We regard many of the formulas, informaon 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 compeon laws.

Customer Concentraon.  In fiscal 2022, none of our customers accounted for 10% or more of our total sales.

Compeon.    We  operate  in  a  compeve  industry  and  compete  with  many  producers,  distributors  and  sales  agents  offering  products  equivalent  to
substanally  all  of  the  products  we  offer.  Many  of  our  competors  are  larger  than  we  are  and  may  have  greater  financial  resources,  although  no  one
competor  is  dominant  in  all  of  the  markets  we  serve.  We  compete  by  offering  quality  products  with  outstanding  customer  service  at  compeve  prices
coupled with value-added services or product formulaon where needed. Because of our long-standing relaonships with many of our suppliers, we are oen
able to leverage those relaonships to obtain products when supplies are limited or to obtain compeve pricing.

Working Capital. Due to the nature of our operaons, which includes purchases of large quanes of bulk chemicals, the ming of purchases can result in
significant changes in working capital and the resulng operang cash flow. Historically, our cash requirements for working capital increase during the period
from March through November as causc soda inventory levels increase with most of our barges received during this period.

Regulatory Maers. We are subject to numerous federal, state and local environmental, health and safety laws and regulaons in the jurisdicons in which
we operate, including the management, storage, transportaon and disposal of chemicals and wastes; product regulaon; air water and soil contaminaon;
and the invesgaon and cleanup of any spills or releases that may result from our management, handling, storage, sale, or transportaon of chemicals and
other products. In addion, societal concerns regarding the safety of chemicals in commerce and their potenal impact on the environment have resulted in a
growing trend towards increasing levels of product safety and environmental protecon regulaons. These concerns have led to, and could connue to result
in, more stringent regulatory intervenon by governmental authories.

In addion, we operate a fleet of more than 200 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the
U.S. Department of Transportaon (“DOT”). The DOT governs transportaon maers including authorizaon to engage in motor carrier service, including the
necessary permits to conduct our businesses, equipment operaon, and safety.

2

The  manufacture,  packaging,  labeling,  adversing,  promoon,  distribuon  and  sale  of  our  agricultural,  food,  pharmaceucal,  pescide  and  health  and
nutrion products are subject to regulaon by numerous naonal and local governmental agencies in the United States and other countries. The primary
regulatory bodies in the United States are the Food and Drug Administraon (the “FDA”), the Environmental Protecon Agency, the United States Department
of  Agriculture  and  the  Federal  Trade  Commission,  and  we  are  also  subject  to  similar  regulators  in  other  countries.  In  parcular,  the  FDA’s  current  good
manufacturing  pracces  (“GMPs”)  describe  policies  and  procedures  designed  to  ensure  that  nutraceucals,  pharmaceucals  and  dietary  supplements  are
produced in a quality manner, do not contain contaminants or impuries, and are accurately labeled and cover the manufacturing, packaging, labeling and
storing  of  supplements,  with  requirements  for  quality  control,  design  and  construcon  of  manufacturing  plants,  tesng  of  ingredients  and  final  products,
record keeping, and complaints processes.

Further  informaon  related  to  government  regulaon  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  commied  to  creang  a  workplace  that  aracts  top  talent,  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, naonality, gender, age, disability, sexual orientaon or any other status protected by
law.  It  is  our  policy  to  comply  fully  with  all  applicable  laws  relang  to  discriminaon  in  the  workplace  and  are  commied  to  advancing  an  inclusive,
collaborave and respecul 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
precauons that need to be taken in all business funcons. Specific safety iniaves include accident prevenon work, improving process controls, safety
training, safety commiees, safety audits, incident invesgaon and improvement measures.

We  have  ensured  the  safety  of  our  employees  and  our  customers  during  the  COVID-19  pandemic  by  implemenng  conngency  and  connuity  plans  to
respond quickly and appropriately to idenfied risks, safe work pracces in accordance with the guidance provided by the US Centers for Disease Control and
Prevenon ("CDC"). Through communicaon, enhanced resources and leadership, we were able to support our employees, serve our customers and keep our
facilies operang and safe during the pandemic.

We  strive  to  provide  employees  with  compeve  wages  commensurate  with  their  skill  levels,  experience,  knowledge  and  the  regional  market.  Full-me
employees are eligible for health, dental and vision insurance, paid and unpaid leaves, 401(K) plan, rerement plans, life and disability/accident coverage and
our employee assistance program.

As of April 3, 2022, we had 813 employees across the United States, of which 807 were full-me employees,. Approximately 38% of our employees were
female or racially and ethnically diverse, and approximately 10% were covered by a collecve bargaining agreement. Of the eight members of our Board of
Directors, two are female, six are male, one is Asian American and seven are white.

Available Informaon.  Our Internet address is www.hawkinsinc.com. We have made available, free of charge, our Annual Reports on Form 10-K, Quarterly
Reports  on  Form  10-Q,  Current  Reports  on  Form  8-K,  and,  if  applicable,  amendments  to  those  reports,  as  soon  as  reasonably  praccable  aer  we
electronically file these materials with, or furnish them to, the Securies and Exchange Commission. Reports of beneficial ownership filed by our directors and
execuve officers pursuant to Secon 16(a) of the Exchange Act are also available on our website. We are not including the informaon contained on our
website as part of, or incorporang it by reference into, this Annual Report on Form 10-K. The SEC also maintains an internet site that contains reports, proxy
and informaon statements, and other informaon regarding our company at hp://www.sec.gov.

3

ITEM 1A. RISK FACTORS

You  should  consider  carefully  the  following  material  factors  regarding  risks  relang  to  an  investment  in  our  securies  and  when  reading  the  informaon,
including the financial informaon, contained in this Annual Report on Form 10-K. Shareholders are cauoned that these and other factors may affect future
performance and cause actual results to differ materially from those that may be ancipated.

COMPETITIVE AND REPUTATIONAL RISKS

We operate in a highly compeve environment and face significant compeon and price pressure.

We  operate  in  a  highly  compeve  industry  and  compete  with  producers,  manufacturers,  distributors  and  sales  agents  offering  products  equivalent  to
substanally all of the products we offer. Compeon is based on several key criteria, including product price, product performance, product quality, product
availability and security of supply, breadth of product offerings, geographic reach, responsiveness of product development in cooperaon with customers,
technical experse and customer service. Many of our competors are larger than we are and may have greater financial resources, more product offerings
and a broader geographic reach. As a result, these competors may be able to offer a broader array of products to a larger geographic area and may be beer
able than us to withstand changes in condions within our industry, changes in the prices and availability of raw materials and changes in general economic
condions  as  well  as  be  able  to  introduce  innovave  products  that  reduce  demand  for  or  the  profit  from  our  products.  Addionally,  competors’  pricing
decisions  could  compel  us  to  decrease  our  prices,  which  could  adversely  affect  our  margins  and  profitability.  Our  ability  to  maintain  or  increase  our
profitability  would  be  dependent  upon  our  ability  to  offset  compeve  decreases  in  the  prices  and  margins  of  our  products  by  improving  producon
efficiency, invesng in infrastructure to reduce freight costs, idenfying and selling higher margin products, providing higher levels of technical experse and
customer  service,  and  improving  exisng  products  through  innovaon  and  research  and  development.  If  we  are  unable  to  maintain  our  profitability  or
compeve posion, we could lose market share to our competors and experience reduced profitability.

Our businesses expose us to potenal product liability claims and recalls, which could adversely affect our financial condion and performance.

The  repackaging,  blending,  mixing  and  distribuon  of  products  by  us,  including  chemical  products  and  products  used  in  food  or  food  ingredients  or  with
medical, pharmaceucal or dietary supplement applicaons, involve an inherent risk of exposure to product liability claims, product recalls, product seizures
and  related  adverse  publicity,  including,  without  limitaon,  claims  for  exposure  to  our  products,  spills  or  release  of  our  products,  personal  injuries,  food-
related  claims  and  property  damage  or  environmental  claims.  A  product  liability  claim,  judgment  or  recall  against  our  customers  could  also  result  in
substanal and unexpected expenditures for us, affect consumer confidence in our products and divert management’s aenon from other responsibilies.
Although we maintain product liability insurance, there can be no assurance that the type or level of coverage is adequate or that we will be able to connue
to  maintain  our  exisng  insurance  or  obtain  comparable  insurance  at  a  reasonable  cost,  if  at  all.  A  product  recall  or  a  parally  or  completely  uninsured
judgment against us could have a material adverse effect on our business, financial condion and results of operaons.

Changes in our customers’ needs or failure of our products to meet customers’ specificaons could adversely affect our sales and profitability.

Our products are used for a broad range of applicaons by our customers. Changes in our customers’ product needs or processes, or reducons in demand
for their end products, may enable or require our customers to reduce or eliminate consumpon of the products that we provide. Customers may also find
alternave materials or processes that no longer require our products. Consequently, it is important that we develop new products to replace the sales of
products that mature and decline in use.

Our products provide important performance aributes to our customers’ products. If our products fail to meet the customers’ specificaons or comply with
applicable laws or regulaons, perform in a manner inconsistent with the customers’ expectaons or have a shorter useful life than required, a customer
could seek replacement of the product or damages for costs incurred as a result of the product failure. A successful claim or series of claims against us could
have a material adverse effect on our financial condion and results of operaons and could result in a loss of one or more customers. Reducons in demand
for our products could adversely affect our sales and financial results and result in facility closures.

4

Adverse publicity or negave public percepon regarding parcular ingredients or products or the dietary supplement industry in general could adversely
affect the financial performance of those porons of our business.

Purchasing  decisions  made  by  consumers  of  products  that  contain  our  ingredients  may  be  affected  by  adverse  publicity  or  negave  public  percepon
regarding parcular ingredients or products or the dietary supplement industry in general. This negave public percepon may include publicity regarding the
risks, efficacy, legality or quality of parcular ingredients or products in general or of other companies or our products or ingredients specifically. Negave
public  percepon  may  also  arise  from  regulatory  invesgaons,  regardless  of  whether  those  invesgaons  involve  us.  We  are  highly  dependent  upon
consumers’ percepon of the safety and quality of products that contain our ingredients as well as similar products distributed by other companies. Thus, the
mere publicaon of reports asserng that such products may be harmful could have a material adverse effect on us, regardless of whether these reports are
scienfically supported. Publicity related to dietary supplements or food ingredients may also result in increased regulatory scruny of our industry. Adverse
publicity may have a material adverse effect on our business, financial condion, results of operaons and cash flows.

Failure to adequately protect crical data and technology systems could materially affect our operaons.

Informaon technology system failures, network disrupons and breaches of data security due to internal or external factors including phishing or cyber-
aacks could disrupt our operaons by causing delays or cancellaon of customer orders, impede the manufacture or shipment of products or cause standard
business processes to become ineffecve, resulng in the unintenonal disclosure of informaon or damage to our reputaon. While we have taken steps to
address  these  concerns  by  implemenng  network  security  and  internal  control  measures,  including  employee  training,  comprehensive  monitoring  of  our
networks and systems, maintenance of backup and protecve systems and disaster recovery and incident response plans, our employees, systems, networks,
products,  facilies  and  services  remain  vulnerable  to  phishing  aacks  and  cyber-assault,  and,  as  such,  there  can  be  no  assurance  that  a  system  failure,
network disrupon or data security breach will not have a material adverse effect on our business, financial condion, operang results or cash flows.

RISKS RELATED TO OUR INDUSTRY

Fluctuaons in the prices and availability of our raw materials, which may be cyclical in nature, could have a material adverse effect on our operaons and
the margins we receive on sales of our products.

We experience regular and recurring fluctuaons in the pricing of our raw materials. Those fluctuaons can be significant and occur rapidly. The cyclicality of
commodity markets, such as the market for causc soda, primarily results from changes in the balance between supply and demand and the level of general
economic acvity. We cannot predict whether the markets for our raw materials will favorably impact or negavely impact the margins we can realize.

The prices we pay for our principal chemical raw materials generally lag the market prices of the underlying raw material. The cost of inventory we have on
hand,  parcularly  inventories  of  our  bulk  commodity  chemicals  where  we  have  significant  volumes  stored  at  our  facilies,  generally  will  lag  the  current
market pricing of such inventory. The pricing within our supply contracts generally adjusts quarterly or monthly. While we aempt to maintain compeve
pricing and stable margin dollars, the potenal variance in our cost of inventory from the current market pricing can cause significant volality in our margins
realized. We do not engage in futures or other derivaves contracts to hedge against fluctuaons in future prices. We may enter into sales contracts where
the selling prices for our products are fixed for a period of me, exposing us to volality in raw materials prices that we acquire on a spot market or short-
term contractual basis. We aempt to pass commodity pricing changes to our customers, but we may be unable to or be delayed in doing so. Our inability to
pass through price increases or any limitaon or delay in our passing through price increases could adversely affect our profit margins.

We are also dependent upon the availability of our raw materials. In the event that raw materials are in short supply or unavailable, raw material suppliers
may  extend  lead  mes  or  limit  or  cut  off  supplies.  As  a  result,  we  may  not  be  able  to  supply  or  manufacture  products  for  some  or  all  of  our  customers.
Constraints on the supply or delivery of crical raw materials could disrupt our operaons and adversely affect the performance of our businesses.

5

Demand  for  our  products  is  affected  by  general  economic  condions  and  by  the  cyclical  nature  of  many  of  the  industries  we  serve,  which  could  cause
significant fluctuaons in our sales volumes and results.

Demand for our products is affected by general economic condions. A decline in general economic or business condions in the industries served by our
customers could have a material adverse effect on our businesses. Although we sell to areas tradionally considered non-cyclical, such as water treatment,
food products and health and nutrional ingredients, many of our customers are in businesses that are cyclical in nature, such as the industrial manufacturing
and energy industries which include the ethanol and agriculture industries. Downturns in these industries could adversely affect our sales and our financial
results by affecng demand for and pricing of our products.

Our  business  is  subject  to  hazards  common  to  chemical  businesses,  any  of  which  could  interrupt  our  producon  and  adversely  affect  our  results  of
operaons.

Our  business  is  subject  to  hazards  common  to  chemical  manufacturing,  blending,  storage,  handling  and  transportaon,  including  explosions,  fires,  severe
weather, natural disasters, mechanical failure, unscheduled downme, transportaon interrupons, traffic accidents involving our delivery vehicles, chemical
spills,  discharges  or  releases  of  toxic  or  hazardous  substances  or  gases  and  other  risks.  These  hazards  could  cause  personal  injury  and  loss  of  life,  severe
damage to or destrucon of property and equipment, and environmental contaminaon. In addion, the occurrence of material operang problems or the
absence of personnel due to pandemics or other disasters at any of our facilies due to any of these hazards may make it impossible for us to make sales to
our customers and may result in a negave public or polical reacon. Many of our facilies are near significant residenal populaons which increases the
risk of negave public or polical reacon should an environmental issue occur and could lead to adverse zoning or other regulatory acons that could limit
our  ability  to  operate  our  business  in  those  locaons.  Accordingly,  these  hazards  and  their  consequences  could  have  a  material  adverse  effect  on  our
operaons as a whole, including our results of operaons and cash flows, both during and aer the period of operaonal difficules.

Environmental problems at any of our facilies could result in significant unexpected costs.

We are subject to federal, state and local environmental regulaons regarding the ownership of real property and the operaons conducted on real property.
Under  various  federal,  state  and  local  laws,  ordinances  and  regulaons,  we  may  own  or  operate  real  property  or  may  have  arranged  for  the  disposal  or
treatment of hazardous or toxic substances at a property and, therefore, may become liable for the costs of removal or remediaon of certain hazardous
substances released on or in our property or disposed of by us, as well as certain other potenal costs which could relate to hazardous or toxic substances
(including governmental fines and injuries to persons and property). Such liability may be imposed whether or not we knew of, or were responsible for, the
presence of these hazardous or toxic substances. Further, future changes in environmental laws or regulaons may require addional investment in capital
equipment or the implementaon of addional compliance programs in the future. The cost of invesgaon, remediaon or removal of such substances may
be substanal.

In the conduct of our operaons, we have handled and do handle materials that are considered hazardous, toxic or volale under federal, state and local
laws. The accidental release of such products cannot be completely eliminated. In addion, we operate or own facilies located on or near real property that
was formerly owned and operated by others. These properes may have been used in ways that involved hazardous materials. Contaminates may migrate
from, within or through any such property, which may give rise to claims against us. Third pares who are responsible for contaminaon may not have funds,
or may not make funds available when needed, to pay remediaon costs imposed upon us jointly with them under environmental laws and regulaons.

Our Water Treatment Group and our agricultural product sales within our Industrial Group are subject to seasonality and weather condions, which could
adversely affect our results of operaons.

Our Water Treatment Group has historically experienced higher sales during April to September, primarily due to a seasonal increase in chemicals used by
municipal water treatment facilies. Our agricultural product sales within our Industrial Group are also seasonal, primarily corresponding with the planng
season. Demand in both of these areas is also affected by weather condions, as either higher or lower than normal precipitaon or temperatures may affect
water usage and the ming and the amount of consumpon of our products. We cannot assure you that seasonality or fluctuang weather condions will not
have a material adverse effect on our results of operaons.

6

OPERATIONAL RISKS

Disrupons within our supply chain have negavely impacted, and could connue to negavely impact, our producon, financial condion and results of
operaons.

We have been, and could connue to be, adversely affected by disrupons within our supply chain and transportaon network. The raw materials we need
are transported by truck, rail, barge or ship by third-party providers. The costs of transporng our products or necessary raw materials could be negavely
affected by factors outside of our control, including rail service interrupons or rate increases, extreme weather events, tariffs, rising fuel costs and capacity
constraints.  Recently,  the  unprecedented  congeson  in  ocean  shipping  has,  and  will  connue  to,  adversely  impact  the  reliability  of  our  imported  raw
materials,  and  transport  driver  shortages  have  caused  extended  lead  mes  for  domesc  shipments.  In  addion,  rail  shipments  have  become  increasingly
unreliable, with significant delays in service and increased costs. Significant delays or increased costs relang to transportaon could materially affect our
financial condion and results of operaons.

Similar supply chain issues have impacted and could connue to impact both our suppliers and our customers. The supply of our necessary raw materials
could be interrupted due to shortages of raw materials, effects of economic, polical or financial market condions on a supplier's operaons, labor disputes
or weather condions affecng products or shipments, transportaon disrupons, natural disasters, outbreaks of disease, informaon system disrupons or
other reasons beyond our control. Similar disrupons at our customers could reduce demand for our products, reducing our sales and profitability. Product
shortages or delays in deliveries, along with other factors such as price inflaon and higher transportaon costs, have also resulted in price increases from our
suppliers.  We  may  be  unable  to  pass  these  price  increases  on  to  our  customers,  which  could  erode  our  profit  margins.  These  supply  chain  constraints,
increased product costs and inflaonary pressures could connue or escalate in the future, which would have an adverse impact on our business and results
of operaons.

We are highly dependent upon transportaon infrastructure to ship and receive our products and delays in these shipments could adversely affect our
results of operaons.

Although we maintain a number of owned trucks and trailers, we rely heavily upon transportaon provided by third pares (including common carriers, barge
companies, rail companies and trans-ocean cargo companies) to deliver products to us and to our customers. Our access to third-party transportaon is not
guaranteed,  and  we  may  be  unable  to  transport  our  products  in  a  mely  manner,  or  at  all,  in  certain  circumstances,  or  at  economically  aracve  rates.
Disrupons in transportaon are common, are oen out of our control, and can happen suddenly and without warning. Rail limitaons, such as limitaons in
rail capacity, availability of railcars, workforce shortages and adverse weather condions have disrupted or delayed rail shipments in the past and could do so
in the future. Barge shipments are delayed or impossible under certain circumstances, including during mes of high or low water levels, when waterways are
frozen and when locks and dams are inoperable. The availability and reliability of truck transportaon has been negavely impacted by a number of factors,
including  limited  availability  of  qualified  drivers  and  equipment,  and  limitaons  on  drivers’  hours  of  service.  The  volumes  handled  by,  and  operang
challenges at, ocean ports have at mes been volale and can delay the receipt of goods, or cause the cost of shipping goods to be more expensive. Our
failure to ship or receive products in a mely and efficient manner could have a material adverse effect on our financial condion and results of operaons.

If we are unable to retain key personnel or aract new skilled personnel, it could have an adverse impact on our businesses.

Because of the specialized and technical nature of our businesses, our future performance is dependent on the connued service of, and on our ability to
aract and retain, qualified management, scienfic, technical and support personnel. The unancipated departure of key members of our management team
could have an adverse impact on our business.

7

We  may  not  be  able  to  successfully  consummate  future  acquisions  or  disposions  or  integrate  acquisions  into  our  business,  which  could  result  in
unancipated expenses and losses.

As part of our business growth strategy, we have acquired businesses and may pursue acquisions in the future. Our ability to pursue this strategy will be
limited by our ability to idenfy appropriate acquision candidates and our financial resources, including available cash and borrowing capacity. In addion,
we may seek to divest of businesses that are underperforming or not core to our future business. The expense incurred in consummang transacons, the
me it takes to integrate an acquision or our failure to integrate businesses successfully could result in unancipated expenses and losses. Furthermore, we
may not be able to realize the ancipated benefits from acquisions.

The process of integrang acquired operaons into our exisng operaons may result in unforeseen operang difficules and may require significant financial
resources that would otherwise be available for the ongoing development or expansion of exisng operaons. The risks associated with the integraon of
acquisions include potenal disrupon of our ongoing businesses and distracon of management, unforeseen claims, liabilies, adjustments, charges and
write-offs, difficulty in conforming the acquired business’ standards, processes, procedures and controls with our operaons, and challenges arising from the
increased scope, geographic diversity and complexity of the expanded operaons.

Our  businesses  are  subject  to  risks  stemming  from  natural  disasters  or  other  extraordinary  events  outside  of  our  control,  which  could  interrupt  our
producon and adversely affect our results of operaons.

Natural disasters have the potenal of interrupng our operaons and damaging our properes, which could adversely affect our businesses. Flooding of the
Mississippi River has temporarily shied the Company’s terminal operaons out of its buildings four mes since the spring of 2010, including most recently
the spring of 2019. We can give no assurance that flooding or other natural disasters will not recur or that there will not be material damage or interrupon
to our operaons in the future from such disasters.

Chemical-related assets may be at greater risk of future terrorist aacks than other possible targets in the United States. Federal law imposes site security
requirements, specifically on chemical facilies, which have increased our overhead expenses. Federal regulaons have also been adopted to increase the
security of the transportaon of hazardous chemicals in the United States. We ship and receive materials that are classified as hazardous and we believe we
have met these requirements, but addional federal and local regulaons that limit the distribuon of hazardous materials are being considered. Bans on
movement of hazardous materials through certain cies could adversely affect the efficiency of our logiscal operaons. Broader restricons on hazardous
material movements could lead to addional investment and could change where and what products we provide.

The  occurrence  of  extraordinary  events,  including  future  terrorist  aacks,  wars,  global  health  developments  and  pandemics  (including  the  COVID-19
outbreak), or escalaon of hoslies, cannot be predicted, but their occurrence can be expected to negavely affect the economy in general, and specifically
the markets for our products. The resulng damage from a direct aack on our assets, or assets used by us, could include loss of life and property damage. In
addion, available insurance coverage may not be sufficient to cover all of the damage incurred or, if available, may be prohibively expensive.

We may not be able to renew our leases of land where four of our operaons facilies reside.

We  lease  the  land  where  our  three  main  terminals  are  located  and  where  another  significant  manufacturing  plant  is  located.  These  leases,  including  all
renewal periods, have expiraon dates from 2023 to 2044. The failure to secure extended lease terms on any one of these facilies may have a material
adverse impact on our business, as they are where a poron of our chemicals are manufactured and where the majority of our bulk chemicals are stored.
While we can make no assurances, based on historical experience and ancipated future needs, we intend to extend these leases and believe that we will be
able to renew our leases as the renewal periods expire. If we are unable to renew three of our leases (two relate to terminals and one to manufacturing) any
property remaining on the land becomes the property of the lessor, and the lessor has the opon to either maintain the property or remove the property at
our expense. The fourth lease provides that we turn any property remaining on the land over to the lessor for them to maintain or remove at their expense.
The cost to relocate our operaons could have a material adverse effect on our results of operaons and financial condion.

8

LEGAL AND REGULATORY RISKS

Environmental,  health  and  safety,  transportaon  and  storage  laws  and  regulaons  cause  us  to  incur  substanal  costs  and  may  subject  us  to  future
liabilies and risks.

We are subject to numerous federal, state and local environmental, health and safety laws and regulaons in the jurisdicons in which we operate, including
the management, storage, transportaon and disposal of chemicals and wastes; product regulaon; air water and soil contaminaon; and the invesgaon
and cleanup of any spills or releases that may result from our management, handling, storage, sale, or transportaon of chemicals and other products. The
nature of our business exposes us to risks of liability under these laws and regulaons. Ongoing compliance with such laws and regulaons is an important
consideraon for us and we invest substanal capital and incur significant operang costs in our compliance efforts. In addion, societal concerns regarding
the safety of chemicals in commerce and their potenal impact on the environment have resulted in a growing trend towards increasing levels of product
safety  and  environmental  protecon  regulaons.  These  concerns  have  led  to,  and  could  connue  to  result  in,  more  stringent  regulatory  intervenon  by
governmental authories. In addion, these concerns could influence public percepons, impact the commercial viability of the products we sell and increase
the costs to comply with increasingly complex regulaons, which could have a negave impact on our business, financial condion and results of operaons.

In addion, we operate a fleet of more than 200 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the
U.S. Department of Transportaon (“DOT”). The DOT governs transportaon maers including authorizaon to engage in motor carrier service, including the
necessary permits to conduct our businesses, equipment operaon, and safety. We are audited periodically by the DOT to ensure that we are in compliance
with various safety, hours-of-service, and other rules and regulaons. If we were found to be out of compliance, the DOT could severely restrict or otherwise
impact our operaons, which could have a material adverse effect on our operaons as a whole, including our results of operaons and cash flows.

If we violate applicable laws or regulaons, in addion to being required to correct such violaons, we could be held liable in administrave, civil or criminal
proceedings  for  substanal  fines  and  other  sancons  that  could  disrupt,  limit  or  halt  our  operaons,  which  could  have  a  material  adverse  effect  on  our
operaons as a whole, including our results of operaons and cash flows. Liabilies associated with the invesgaon and cleanup of releases of hazardous
substances, as well as personal injury, property damages or natural resource damages arising out of such releases of hazardous substances, may be imposed
in many situaons without regard to violaons of laws or regulaons or other fault, and may also be imposed jointly and severally (so that a responsible party
may be held liable for more than its share of the losses involved, or even the enre loss). Such liabilies can be difficult to idenfy and the extent of any such
liabilies can be difficult to predict. We use, and in the past have used, hazardous substances at many of our facilies, and have generated, and connue to
generate,  hazardous  wastes  at  a  number  of  our  facilies.  We  have  in  the  past  been,  and  may  in  the  future  be,  subject  to  claims  relang  to  exposure  to
hazardous materials and the associated liabilies may be material.

9

Our food, pharmaceucal and health and nutrion products are subject to government regulaon, both in the United States and abroad, which could
increase our costs significantly and limit or prevent the sale of such products.

The manufacture, packaging, labeling, adversing, promoon, distribuon and sale of our food, pharmaceucal pescide and health and nutrion products
are subject to regulaon by numerous naonal and local governmental agencies in the United States and other countries. The primary regulatory bodies in
the United States are the Food and Drug Administraon (the “FDA”), the Environmental Protecon Agency, the United States Department of Agriculture and
the Federal Trade Commission, and we are also subject to similar regulators in other countries. Failure to comply with these regulatory requirements may
result  in  various  types  of  penales  or  fines.  These  include  injuncons,  product  withdrawals,  recalls,  product  seizures,  fines  and  criminal  prosecuons.
Individual  states  also  regulate  our  products.  A  state  may  interpret  claims  or  products  presumpvely  valid  under  federal  law  as  illegal  under  that  state’s
regulaons.  Approvals  or  licensing  may  be  condioned  on  reformulaon  of  products  or  may  be  unavailable  with  respect  to  certain  products  or  product
ingredients. Any of these government agencies, as well as legislave bodies, can change exisng regulaons, or impose new ones, or could take aggressive
measures, causing or contribung to a variety of negave consequences, including:

requirements for the reformulaon of certain or all products to meet new standards,

•    stopping the sale of products,
•
•    the recall or disconnuance of certain or all products,
•    addional record-keeping requirements,
•    expanded documentaon of the properes of certain or all products,
•    expanded or different labeling,
•    adverse event tracking and reporng, and
•    addional scienfic substanaon.

In parcular, the FDA’s current GMPs describe policies and procedures designed to ensure that nutraceucals, pharmaceucals and dietary supplements are
produced in a quality manner, do not contain contaminants or impuries, and are accurately labeled and cover the manufacturing, packaging, labeling and
storing  of  supplements,  with  requirements  for  quality  control,  design  and  construcon  of  manufacturing  plants,  tesng  of  ingredients  and  final  products,
record  keeping,  and  complaints  processes.  Those  who  manufacture,  package  or  store  dietary  supplements  must  comply  with  current  GMPs.  If  we  or  our
suppliers fail to comply with current GMPs, the FDA may take enforcement acon against us or our suppliers.

Any  or  all  of  the  potenal  negave  consequences  described  above  could  have  a  material  adverse  effect  on  us  or  substanally  increase  the  cost  of  doing
business in these areas. There can be no assurance that the regulatory environment in which we operate will not change or that such regulatory environment,
or any specific acon taken against us, will not result in a material adverse effect on us.

10

FINANCIAL RISKS

The insurance that we maintain may not fully cover all potenal exposures.

We maintain lines of commercial insurance, such as property, general liability and casualty insurance, but such insurance may not cover all risks associated
with the hazards of our businesses and is subject to limitaons, including deducbles and limits on the liabilies covered. We may incur losses beyond the
limits or outside the coverage of our insurance policies, including liabilies for environmental remediaon and product liability. In addion, from me to me,
various  types  of  insurance  for  companies  in  the  chemical,  food  or  health  and  nutrion  products  industries  have  not  been  available  on  commercially
acceptable terms or, in some cases, have not been available at all. In the future, we may not be able to obtain coverage at current levels, and our premiums
may increase significantly on coverage that we maintain.

Failure to comply with the covenants under our credit facility may have a material adverse effect.

We  are  party  to  a  credit  agreement  (the  “Credit  Agreement”)  with  U.S.  Bank  Naonal  Associaon  and  other  lenders  (collecvely,  the  “Lenders”),  which
includes secured revolving credit facilies (the “Revolving Loan Facility”) totaling $250.0 million. The Revolving Loan Facility includes a $10.0 million leer of
credit subfacility and $25.0 million swingline subfacility. At April 3, 2022, we had $126.0 million outstanding under the Revolving Loan Facility.

We  may  make  payments  on  the  Revolving  Loan  Facility  from  me  to  me.  If  we  are  unable  to  generate  sufficient  cash  flow  or  otherwise  obtain  funds
necessary to make payments on our credit facilies, we could be in default when the facilies become due in 2027. We are also required to comply with
several financial covenants under the Credit Agreement. Our ability to comply with these financial covenants may be affected by events beyond our control,
which could result in a default under the Credit Agreement; such default may have a material adverse effect on our business, financial condion, operang
results or cash flows.

The  Credit  Agreement  also  contains  other  customary  affirmave  and  negave  covenants,  including  covenants  that  restrict  our  ability  to  incur  addional
indebtedness, dispose of significant assets, make certain investments, including any acquisions other than permied acquisions, make certain payments,
enter into sale and leaseback transacons, grant liens on its assets or rate management transacons, subject to certain limitaons. These restricons may
adversely affect our business.

Impairment  to  the  carrying  value  of  our  goodwill  or  other  intangible  assets  could  adversely  affect  our  financial  condion  and  consolidated  results  of
operaons.

Goodwill  represents  the  excess  of  the  cost  of  acquired  businesses  over  the  fair  value  of  idenfiable  tangible  net  assets  and  idenfiable  intangible  assets
purchased. Goodwill is tested at least annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate
that  the  asset  might  be  impaired.  A  significant  amount  of  judgment  is  involved  in  determining  if  an  indicaon  of  impairment  exists.  Factors  may  include,
among others: a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalizaon; a significant
adverse  change  in  the  business  climate;  unancipated  compeon;  and  slower  growth  rates.  An  adverse  change  in  these  factors  may  have  a  significant
impact  on  the  recoverability  of  the  net  assets  recorded,  and  any  resulng  impairment  charge  in  the  future  could  have  a  material  adverse  effect  on  our
financial condion and consolidated results of operaons.

We evaluate the useful lives of our intangible assets to determine if they are definite- or indefinite-lived. Reaching a determinaon on useful life requires
significant judgments and assumpons regarding the future effects of obsolescence, demand, compeon, other economic factors (such as the stability of
the  industry,  legislave  acon  that  results  in  an  uncertain  or  changing  regulatory  environment,  and  expected  changes  in  distribuon  channels),  and  the
expected lives of other related groups of assets.

We cannot accurately predict the amount and ming of any impairment of goodwill and other intangible assets. Should the value of these assets become
impaired, there could be a material adverse effect on our financial condion and consolidated results of operaons.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

11

ITEM 2. PROPERTIES

Our facilies material to our operaons consist of our locaons described below. In addion to the facilies listed below, our Water Treatment group operates
out of 33 addional warehouse locaons, the majority of which are owned by us. We believe that our facilies are adequate and suitable for the purposes
they serve. Unless noted, each facility is owned by us and is primarily used as office and warehouse space. We believe that we carry customary levels of
insurance covering the replacement of damaged property.

Group
Corporate headquarters
Health and Nutrion

Industrial

Industrial and Water Treatment

Water Treatment

Locaon
Roseville, MN
Fullerton, CA (1)
Florida, NY (2)
Minneapolis, MN (3)
Centralia, IL (4)
Dupo, IL (5)
St. Paul, MN (6)
Rosemount, MN (7)
St. Paul, MN (8)
Camanche, IA
Memphis, TN
Apopka, FL

Approx.
Square Feet
50,000
55,800
107,000
177,000
77,000
64,000
32,000
105,000
59,000
95,000
41,000
32,100

(1) This is a leased facility comprising administrave offices and a distribuon facility. The lease runs through January 2026.

(2) This is comprised of (i) a 79,000 square foot manufacturing plant which sits on approximately 16 acres and (ii) a leased 28,000 square foot warehouse

located in close proximity that is leased unl December 2022.

(3) This manufacturing locaon sits on approximately 11 acres of land.

(4) This manufacturing facility includes 12 acres of land owned by the Company.

(5) The land for this manufacturing and packaging facility is leased from a third party, with the lease expiring in May 2023.

(6) These terminal operaons, located at two sites on opposite sides of the Mississippi River, are made up of three buildings, outside storage tanks for the
storage of liquid bulk chemicals, including causc soda, as well as numerous smaller tanks for storing and mixing chemicals. The land is leased from
the Port Authority of the City of St. Paul, Minnesota. One of the applicable leases runs through 2033, while the other one runs through 2044 including
all available lease extensions.

(7) This includes two adjacent facilies comprising a total of 56 acres of land owned by the Company. These manufacturing facilies have outside storage

tanks for the storage of bulk chemicals, as well as numerous smaller tanks for storing and mixing chemicals.

(8) This facility, which consists of a 59,000 square-foot building located on approximately 10 acres of land, has outside storage capacity for liquid bulk
chemicals,  as  well  as  numerous  smaller  tanks  for  storing  and  mixing  chemicals.  The  land  is  leased  from  the  Port  Authority  of  the  City  of  St.  Paul,
Minnesota and runs unl 2029.

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings, other than ordinary roune ligaon incidental to the business, to which we or any of our subsidiaries are a
party or of which any of our property is the subject.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

12

PART II

ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common shares are listed on the Nasdaq Global Select Market under the symbol “HWKN.” As of May 13, 2022, shares of our common shares were held
by approximately 387 shareholders of record.

The  following  graph  compares  the  cumulave  total  shareholder  return  on  our  common  shares  with  the  cumulave  total  returns  of  the  Nasdaq  Industrial
Index, the Nasdaq Composite Index, the Russell 2000 Index and the Standard & Poor’s (“S&P”) Small Cap 600 Index for our last five completed fiscal years.
The graph assumes the investment of $100 in our stock and each of those indices on April 2, 2017, and reinvestment of all dividends.

13

 
 
ITEM 6. RESERVED

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The  following  is  a  discussion  and  analysis  of  our  financial  condion  and  results  of  operaons  for  fiscal  2022  and  2021.  This  discussion  should  be  read  in
conjuncon with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-
K.

We  have  omied  discussion  of  the  earliest  of  the  three  years  covered  by  our  consolidated  financial  statements  presented  in  this  report  because  that
disclosure was already included in our Annual Report on Form 10-K for fiscal 2021, filed with the SEC on June 2, 2021. You are encouraged to reference Part II,
Item 7, within that report, for a discussion of our financial condion and results of operaons for fiscal 2020 compared to fiscal 2021.

Overview

We derive substanally all of our revenues from the sale of specialty chemicals and ingredients that we formulate, distribute, blend and manufacture for our
Industrial, Water Treatment and Health and Nutrion customers.

Financial Overview

Highlights of fiscal 2022 include:

•

•

•

Sales of $774.5 million, a 30% increase from fiscal 2021;

Gross profit of $146.5 million, an increase of $22.8 million, or 18% from fiscal 2021;

An increase in selling, general and administrave (“SG&A”) expenses of $7.4 million year over year, but a decrease of 160 basis points as a
percentage of sales when compared to fiscal 2021;

We  focus  on  total  profitability  dollars  when  evaluang  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, parcularly in our Industrial and Water Treatment segments. The costs for certain of our raw materials can rise or
fall rapidly, causing fluctuaons in gross profit as a percentage of sales.

We use the last in, first out (“LIFO”) method of valuing the majority of our inventory in our Industrial and Water Treatment segments, which causes the most
recent product costs to be recognized in our income statement. The LIFO inventory valuaon method and the resulng cost of sales are consistent with our
business pracces of pricing to current chemical raw material prices. Inventories in our Health and Nutrion segment are valued using the first-in, first-out
(“FIFO”) method.

We disclose the sales of our bulk commodity products as a percentage of total sales dollars for our Industrial and Water Treatment segments. Our definion
of  bulk  commodity  products  includes  products  that  we  do  not  modify  in  any  way,  but  receive,  store,  and  ship  from  our  facilies,  or  direct  ship  to  our
customers in large quanes.

Business and Property Acquisions

On December 30, 2021, we acquired substanally all the assets of NAPCO Chemical Company, Inc. and its affiliates ("NAPCO") under the terms of an asset
purchase  agreement  among  us,  NAPCO  and  certain  other  pares  thereto.  NAPCO  manufactures  and  distributes  water  treatment  chemicals  from  three
locaons in Texas. The results of operaons are included as part of our Water Treatment segment from the date of acquision forward.

On October 29, 2021, we acquired substanally all the assets of Water and Waste Speciales, LLC, under the terms of an asset purchase agreement with
Water and Waste Speciales and its shareholders. Water and Waste Speciales was a water treatment chemical distribuon company operang primarily in
Alabama. The results of operaons since the acquision date are included in our Water Treatment segment.

14

On September 20, 2021, we acquired substanally all the assets of Southeast Water Systems LLC, under the terms of an asset purchase agreement with
Southeast Water Systems and its shareholders. Southeast Water Systems supplied and installed water treatment chemical equipment to its customers located
primarily in Alabama, southern Georgia and the Florida panhandle. The results of operaons since the acquision date are included in our Water Treatment
segment.

In the fourth quarter of fiscal 2021, we acquired substanally all the assets of C & L Aqua Professionals, Inc. and LC Blending, Inc. (together, “C&L Aqua”)
under the terms of an asset purchase agreement among us, C&L Aqua and its shareholders. C&L Aqua was a water treatment chemical distribuon company
operang primarily in Louisiana. The results of operaons since the acquision date are included in our Water Treatment segment.

In the third quarter of fiscal 2021, we acquired a manufacturing facility to allow further expansion and growth in both our Industrial and Water Treatment
segments. This site is adjacent to our facility in Rosemount, Minnesota, adding 40,000 square feet of manufacturing and warehouse space on 28 acres of land
to bring us to a total of 105,000 square feet of space on 56 acres of land, with rail access at both of the sites. The expansion will allow for future growth and
provide supply chain flexibility on certain raw materials to beer serve our customers.

In  the  second  quarter  of  fiscal  2021,  we  acquired  substanally  all  the  assets  of  American  Development  Corporaon  of  Tennessee,  Inc.  (“ADC”)  under  the
terms of an asset purchase agreement among us, ADC and its shareholders. ADC was a water treatment chemical distribuon company operang primarily in
Tennessee, Georgia and Kentucky. The results of operaons since the acquision date are included in our Water Treatment segment.

The aggregate annual revenue of the three businesses acquired in fiscal 2022 totaled approximately $17 million, as determined using the applicable twelve-
month period preceding each respecve acquision date. The aggregate annual revenue from the fiscal 2021 acquisions totaled approximately $25 million,
as determined using the applicable twelve-month period preceding each respecve acquision date.

Stock Split

On March 1, 2021, we effected a two-for-one split of our common stock and adjusted the par value from $.05 per share to $0.01 per share. At the same me,
we increased the number of authorized shares from 30 million to 60 million. Our consolidated financial statements, related notes, and other financial data
contained in this report have been adjusted to give retroacve effect to the stock split for all periods presented.

Statement on COVID-19

During the pandemic caused by COVID-19, federal, state and local governments around the world implemented stringent measures to help control the spread
of the virus, including, from me to me, quarannes, “shelter in place” and “stay at home” orders, travel restricons or bans, business curtailments, school
closures, and other protecve measures. While most restricons have eased since the start of the COVID-19 pandemic, certain restricons remain in place or
new restricons may be implemented in the future.

All of our manufacturing facilies have qualified as essenal operaons (or the equivalent) under applicable federal and state orders. As a result, all of our
manufacturing sites and facilies have connued to operate, with no significant impact to our output levels.

During the public health crisis, we remained focused on the health and safety of our employees, customers and suppliers and maintaining safe and reliable
operaons of our manufacturing sites. As our operaons and products are essenal to crical naonal infrastructure, it is imperave that we connue to
supply materials including the products needed to maintain safe drinking water, ingredients essenal for large-scale food, pharmaceucal and other health
product manufacturing and nutrion products needed to support our country's crical infrastructure.

15

Results of Operaons

The following table sets forth certain items from our statement of income as a percentage of sales for fiscal 2022 and 2021: 

Fiscal 2022

Fiscal 2021

Sales
Cost of sales
Gross profit
Selling, general and administrave expenses
Operang income
Interest expense, net
Other income
Income before income taxes
Income tax provision
Net income

Fiscal 2022 Compared to Fiscal 2021

Sales

100.0 %
(81.1)%
18.9 %
(9.7)%
9.2 %
(0.2)%
— %
9.0 %
(2.3)%
6.7 %

100.0 %
(79.3)%
20.7 %
(11.3)%
9.4 %
(0.2)%
0.2 %
9.4 %
(2.5)%
6.9 %

Sales were $774.5 million for fiscal 2022, an increase of $177.7 million, or 30%, from sales of $596.9 million for fiscal 2021. We esmated the impact of the
53rd week in fiscal 2022 to be approximately $17.5 million in addional sales.

Industrial Segment.  Industrial segment sales increased $113.6 million, or 42%, to $386.9 million for fiscal 2022, as compared to $273.4 million for fiscal 2021.
Sales of bulk commodity products in the Industrial segment were approximately 16% of sales dollars in fiscal 2022 and 14% of sales dollars in fiscal 2021. We
esmated the impact of the 53rd week in fiscal 2022 to be approximately $10.0 million in addional sales in our Industrial segment. In addion, the increase
in sales was driven by increased selling prices on many of our products driven by higher costs on many of our raw materials, as well as increased sales of our
bulk and our manufactured, blended and repackaged products.

Water Treatment Segment.  Water Treatment segment sales increased $58.1 million, or 34%, to $228.1 million for fiscal 2022, as compared to $170.0 million
for fiscal 2021. Sales of bulk commodity products in the Water Treatment segment were approximately 9% of sales dollars in both fiscal 2022 and fiscal 2021.
We esmated the impact of the 53rd week in fiscal 2022 to be approximately $3.9 million in addional sales in our Water Treatment segment. In addion,
sales increased as a result of increased demand for our products as well as the added sales from acquisions.

Health and Nutrion Segment. Health and Nutrion segment sales increased $6.0 million, or 4%, to $159.5 million for fiscal 2022, as compared to $153.5
million  for  fiscal  2021.  We  esmated  the  impact  of  the  53rd  week  in  fiscal  2022  to  be  approximately  $3.6  million  in  addional  sales  in  our  Health  and
Nutrion  segment.  In  addion,  sales  increased  as  a  result  of  an  increase  in  sales  of  our  specialty  distributed  products,  which  was  parally  offset  by  the
normalizing of demand for our manufactured products when compared to the temporary COVID-driven increase in demand these products experienced in
the prior year.

Gross Profit

Gross profit increased $22.8 million, or 18%, to $146.5 million, or 19% of sales, for fiscal 2022, from $123.8 million, or 21% of sales, for fiscal 2021. During
fiscal  2022,  the  LIFO  reserve  increased,  and  gross  profits  decreased,  by  $15.8  million,  primarily  due  to  rising  input  costs.  In  fiscal  2021,  the  LIFO  reserve
decreased, and gross profits increased, by $0.1 million. We esmated the impact of the 53rd week in fiscal 2022 to be approximately $3.6 million in addional
gross profit.

16

Industrial Segment.    Gross  profit  for  the  Industrial  segment  increased  $16.3  million,  or  38%,  to  $59.6  million,  or  15%  of  sales,  for  fiscal  2022,  from  $43.3
million, or 16% of sales, for fiscal 2021. During fiscal 2022, the LIFO reserve increased, and gross profits decreased, by $10.4 million, primarily due to rising
raw material costs. In fiscal 2021, the LIFO reserve decreased, and gross profits increased, by $0.2 million. We esmated the impact of the 53rd week in fiscal
2022 to be approximately $1.9 million in addional gross profit in our Industrial segment. In addion, gross profit increased as a result of the increase in sales,
parally offset by the negave impact resulng from the increase in the LIFO reserve.

Water Treatment Segment.  Gross profit for the Water Treatment segment increased $7.8 million, or 17%, to $54.6 million, or 24% of sales, for fiscal 2022,
from $46.8 million, or 28% of sales, for fiscal 2021. During fiscal 2022, the LIFO reserve increased, and gross profits decreased, by $5.4 million, primarily due
to rising raw material costs. During fiscal 2021, the LIFO reserve increased, and gross profit decreased, by $0.1 million. We esmated the impact of the 53rd
week in fiscal 2022 to be approximately $1.0 million in addional gross profit in our Water Treatment segment. In addion, gross profit increased as a result
of the increase in sales.

Health and Nutrion Segment. Gross profit for our Health and Nutrion segment decreased $1.3 million, or 4%, to $32.3 million, or 20% of sales, for fiscal
2022,  from  $33.6  million,  or  22%  of  sales,  for  fiscal  2021.  We  esmated  the  impact  of  the  53rd  week  in  fiscal  2022  to  be  approximately  $0.7  million  in
addional gross profit in our Health and Nutrion segment. This increase from the 53rd week was more than offset by a decrease in gross profit resulng
from a decline in sales of our manufactured products which generally have higher per-unit margins than our specialty distributed products.

Selling, General and Administrave Expenses

SG&A expenses increased $7.4 million to $75.3 million, or 10% of sales, for fiscal 2022, from $67.9 million, or 11% of sales, for fiscal 2021. We esmated the
impact of the 53rd week in fiscal 2022 to be approximately $1.0 million in addional SG&A expense. In addion, expenses increased in part due to the added
costs from the acquired businesses in the Water Treatment segment, an increase in variable incenve compensaon, increased costs due to added personnel
and other resources as we invest to grow the business, and normalizaon of travel and other variable expenses to pre-COVID levels.

Operang Income

Operang income was $71.2 million, or 9% of sales, for fiscal 2022, as compared to $55.9 million, or 9% of sales, for fiscal 2021 due to the combined impact
of the factors discussed above. We esmated the impact of the 53rd week in fiscal 2022 to be approximately $3 million in addional operang income.

Interest Expense, Net

Interest  expense  was  $1.4  million  for  fiscal  2022,  a  decrease  of  $0.1  million  from  interest  expense  of  $1.5  million  for  fiscal  2021.  Lower  borrowing  rates
compared to the prior year more than offset the increase in outstanding borrowings in the current year.
Income Tax Provision

Our effecve tax rate was approximately 26.5% for both fiscal 2022 and fiscal 2021. The effecve tax rate is impacted by projected levels of annual taxable
income, permanent items, and state taxes.

17

Selected Quarterly Financial Data

Selected financial data for our fiscal quarters is shown below. No changes have been made to previously reported informaon.

(In thousands, except per share data)

Sales
Gross profit
Selling, general, and administrave expenses
Operang income
Net income
Basic earnings per share
Diluted earnings per share

Sales
Gross profit
Selling, general, and administrave expenses
Operang income
Net income
Basic earnings per share
Diluted earnings per share

Sales
Gross profit
Selling, general, and administrave expenses
Operang income
Net income
Basic earnings per share
Diluted earnings per share

$

$
$

$

$
$

$

$
$

First

Second

Fiscal 2022

Third

Fourth

Total

181,241  $
38,974 
16,856 
22,118 
16,628 

0.79  $
0.79  $

183,277  $
37,287 
17,679 
19,608 
14,133 

0.67  $
0.67  $

187,050  $
33,940 
19,681 
14,259 
10,204 

0.49  $
0.48  $

222,973  $
36,319 
21,110 
15,209 
10,577 

0.51  $
0.50  $

First

Second

Fiscal 2021

Third

Fourth

143,172  $
30,976 
15,038 
15,938 
11,788 

0.56  $
0.55  $

147,801  $
32,797 
16,221 
16,576 
12,190 

0.58  $
0.57  $

142,927  $
28,239 
17,750 
10,489 
7,921 

0.38  $
0.37  $

162,971  $
31,750 
18,875 
12,875 
9,081 

0.43  $
0.43  $

First

Second

Fiscal 2020

Third

Fourth

147,336  $
28,797 
14,836 
13,961 
9,807 

0.46  $
0.46  $

140,043  $
27,994 
14,817 
13,177 
9,250 

0.44  $
0.43  $

120,406  $
21,478 
14,702 
6,776 
4,547 

0.22  $
0.21  $

132,413  $
22,648 
14,891 
7,757 
4,763 

0.23  $
0.22  $

774,541 
146,520 
75,326 
71,194 
51,542 

2.46 
2.44 

596,871 
123,762 
67,884 
55,878 
40,980 

1.95 
1.93 

540,198 
100,917 
59,246 
41,671 
28,367 

1.34 
1.33 

Earnings per share may not equal the face of the Consolidated Statements of Income due to rounding.

Liquidity and Capital Resources

Cash provided by operang acvies in fiscal 2022 was $42.8 million compared to $43.8 million in fiscal 2021. The decrease in cash provided by operang
acvies in fiscal 2022 as compared to fiscal 2021 was driven by higher inventory levels and increases in customer receivables resulng from higher sales,
mostly offset by an increase in net income and accounts payable. The inventory increase was driven by increased raw material costs as well as a conscious
management decision to increase inventory levels due to increased customer demand and supply chain issues. Due to the nature of our operaons, which
includes  purchases  of  large  quanes  of  bulk  chemicals,  the  ming  of  purchases  can  result  in  significant  changes  in  working  capital  and  the  resulng
operang  cash  flow.  Historically,  our  cash  requirements  for  working  capital  increase  during  the  period  from  March  through  November  as  causc  soda
inventory levels increase as most of our barges are received during this period.

18

 
 
 
 
Cash used in invesng acvies was $49.8 million in fiscal 2022 compared to $71.4 million in fiscal 2021. Capital expenditures were $28.5 million in fiscal
2022 and $20.8 million in fiscal 2021. Total cash used in invesng acvies in fiscal 2022 included an aggregate of $21.5 million for Water Treatment group
acquisions compared to $51.0 million in Water Treatment group acquision spending in fiscal 2021. Capital expenditures in fiscal 2022 included vehicles and
trucks,  facility  improvements,  and  pharmaceucal  ingredient  manufacturing  capabilies,  along  with  other  new  and  replacement  equipment.  Capital
expenditures in fiscal 2021 included pharmaceucal ingredient manufacturing capabilies, vehicles and trucks, and the purchase of a previously leased Water
Treatment branch facility, along with other new and replacement equipment.

Cash provided by financing acvies was $7.4 million in fiscal 2022, as compared to $26.4 million in fiscal 2021. Cash provided by financing acvies included
net debt borrowings of $27.0 million in fiscal 2022, compared to net debt borrowings of $39.0 million in fiscal 2021, which was used primarily to fund our
acquisions in both fiscal years. We paid out cash dividends of $11.1 million in fiscal 2022 and $10.0 million in fiscal 2021. In fiscal 2022, we used $8.5 million
to  repurchase  shares  under  our  board-authorized  share  repurchase  program,  and  in  fiscal  2021,  we  used  $4.1  million  to  repurchase  shares  under  the
program.

Our cash balance was $3.5 million at April 3, 2022, an increase of $0.5 million as compared with March 28, 2021. Cash flows generated by operaons and
financing acvies during fiscal 2022 were offset by the cash expended for acquisions in fiscal 2022, capital expenditures and dividend payments.

We were party to an amended and restated credit agreement (the “Prior Credit Agreement”) with U.S. Bank as Sole Lead Arranger and Sole Book Runner, and
other  lenders  from  me  to  me  party  thereto  (collecvely,  the  “Lenders”),  whereby  U.S.  Bank  was  also  serving  as  Administrave  Agent.  The  Prior  Credit
Agreement provided us with senior secured revolving credit facilies (the “Prior Revolving Loan Facility”) totaling $150.0 million. The Prior Revolving Loan
Facility included a $5.0 million leer of credit subfacility and $15.0 million swingline subfacility. The Prior Revolving Loan Facility was scheduled to terminate
on November 30, 2023, and was secured by substanally all of our personal property assets and those of our subsidiaries.

On March 31, 2022, we entered into a second amended and restated credit agreement (the “Credit Agreement”) with U.S. Bank Naonal Associaon (“U.S.
Bank”) as Sole Lead Arranger and Sole Book Runner, and other lenders from me to me party thereto (collecvely, the “Lenders”), whereby U.S. Bank is also
serving as Administrave Agent. The Credit Agreement refinanced the revolving loan under our previous credit agreement with U.S. Bank and provides us
with senior secured revolving credit facilies (the “Revolving Loan Facility”) totaling $250 million. The Revolving Loan Facility includes a $10 million leer of
credit subfacility and $25 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 30, 2027. The Revolving
Loan Facility is secured by substanally all of our personal property assets and those of our subsidiaries.

We  used  $126.0  million  of  the  proceeds  from  the  Revolving  Loan  Facility  to  refinance  the  obligaons  under  the  previous  credit  facility.  We  may  use  the
remaining amount of the Revolving Loan Facility for working capital, capital expenditures, share repurchases, restricted payments and acquisions permied
under the Credit Agreement, and other general corporate purposes.

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 rao: (a) Term SOFR, which includes a credit spread adjustment of 0.10%, 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 Effecve Rate plus 0.5%, or (3) one-month Term SOFR for U.S. dollars plus 1.0%. The Term SOFR margin is between 0.85% and 1.35%, depending on our
leverage  rao.  The  base  rate  margin  is  between  0.00%  and  0.35%,  depending  on  our  leverage  rao.  At  April  3,  2022,  the  effecve  interest  rate  on  our
borrowings was 1.2%.

In  addion  to  paying  interest  on  the  outstanding  principal  under  the  Revolving  Loan  Facility,  we  are  required  to  pay  a  commitment  fee  on  the  unulized
commitments thereunder. The commitment fee is between 0.15% and 0.25%, depending on our leverage rao.

Debt issuance costs paid to the Lenders are being amorzed as interest expense over the term of the Credit Agreement. As of April 3, 2022, the unamorzed
balance of these costs was $0.4 million, and is reflected as a reducon of debt on our balance sheet.

19

The Credit Agreement requires us to maintain (a) a minimum fixed charge coverage rao of 1.15 to 1.00 and (b) a maximum total cash flow leverage rao of
3.0  to  1.0.  The  Credit  Agreement  also  contains  other  customary  affirmave  and  negave  covenants,  including  covenants  that  restrict  our  ability  to  incur
addional indebtedness, dispose of significant assets, make certain investments, including any acquisions other than permied acquisions, make certain
payments, enter into sale and leaseback transacons, grant liens on our assets or enter into rate management transacons, subject to certain limitaons. We
are permied to make distribuons, pay dividends and repurchase shares so long as no default or event of default exists or would exist as a result thereof. We
were in compliance with all covenants of the Credit Agreement as of April 3, 2022 and expect to remain in compliance with all covenants for the next 12
months.

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

We  have  in  place  an  interest  rate  swap  agreement  to  manage  the  risk  associated  with  a  poron  of  our  variable-rate  long-term  debt.  We  do  not  ulize
derivave instruments for speculave purposes. The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange
of  the  underlying  noonal  amount  on  which  the  interest  payments  are  calculated.  The  noonal  amount  of  the  swap  agreement  is  $60  million  and  it  will
terminate on May 1, 2027.

As part of our growth strategy, we have acquired businesses and may pursue acquisions or other strategic relaonships in the future that we believe will
complement or expand our exisng businesses or increase our customer base. We believe we could borrow addional funds under our current or new credit
facilies or sell equity for strategic reasons or to further strengthen our financial posion.

Contractual Obligaons and Commercial Commitments

The following table provides aggregate informaon about our contractual payment obligaons and the periods in which payments are due: 

Payments Due by Fiscal Period

Contractual Obligaon

2023

2024

2025

2026

2027

More than
5  Years

Total

(In thousands)

Senior secured revolver (1)
Interest payments (2)
Operang lease obligaons (3)
Pension withdrawal liability (4)

$
$
$
$

—  $
1,833  $
1,889  $
467  $

—  $
1,833  $
1,515  $
467  $

—  $
1,833  $
1,450  $
467  $

—  $
1,833  $
1,388  $
467  $

—  $
1,833  $
1,359  $
467  $

126,000  $
152  $
5,171  $
3,037  $

126,000 
9,317 
12,772 
5,372 

(1)    Represents balance outstanding as of April 3, 2022, and assumes such amount remains outstanding unl its maturity date, as periodic payments are not

required under the terms of our Credit Agreement. However, it is our intenon to pay down our debt with available excess cash flow. See Note 9 of our
consolidated Financial Statements for further informaon.

(2)    Represents interest payments and commitment fees payable on outstanding balances under our revolver, and assumes interest rates remain unchanged

from the rate as of April 3, 2022.
(3)    As reported under ASC Topic 842
(4)    This relates to our withdrawal from a mulemployer pension plan. Payments on this obligaon will connue through 2034.

Crical Accounng Esmates

In  preparing  the  financial  statements,  we  follow  U.S.  generally  accepted  accounng  principles  (“GAAP”).  The  preparaon  of  these  financial  statements
requires us to make esmates and judgments that affect the reported amounts of assets, liabilies, sales and expenses, and related disclosure of conngent
assets and liabilies. We re-evaluate our esmates on an on-going basis. Our esmates are based on historical experience and on various other assumpons
that are believed to be reasonable under the circumstances. Actual results may differ from these esmates under different assumpons and condions. We
have determined we have no crical accounng esmates material to our consolidated financial posion, results of operaons or cash flow.

20

 
 
 
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We  are  subject  to  the  risk  inherent  in  the  cyclical  nature  of  commodity  chemical  prices.  However,  we  do  not  currently  purchase  forward  contracts  or
otherwise engage in hedging acvies with respect to the purchase of commodity chemicals. We aempt to pass changes in the cost of our materials on to
our customers; however, there are no assurances that we will be able to pass on the increases in the future.

We are exposed to market risks related to interest rates. Our exposure to changes in interest rates is limited to borrowings under our credit facility. A 25-basis
point  change  in  interest  rates  on  the  variable-rate  poron  of  debt  not  covered  by  the  interest  rate  swap  would  potenally  increase  or  decrease  annual
interest expense by approximately $0.3 million. Other types of market risk, such as foreign currency risk, do not arise in the normal course of our business
acvies.

21

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounng Firm (PCAOB ID: 248)

Report of Independent Registered Public Accounng Firm (PCAOB ID: 185)

Index to Consolidated Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

22

23

25

26

27

28

29

30

31

Board of Directors and Shareholders
Hawkins, Inc.

Report of Independent Registered Public Accounng Firm

Opinion on internal control over financial reporng
We have audited the internal control over financial reporng of Hawkins, Inc. (a Minnesota corporaon) and subsidiaries (the “Company”) as of April 3, 2022,
based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Commiee of Sponsoring Organizaons of the Treadway
Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effecve internal control over financial reporng as of April 3, 2022,
based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounng Oversight Board (United States) (“PCAOB”), the consolidated
financial statements of the Company as of and for the year ended April 3, 2022, and our report dated May 18, 2022 expressed an unqualified opinion on
those financial statements.

Basis for opinion
The Company’s management is responsible for maintaining effecve internal control over financial reporng and for its assessment of the effecveness of
internal control over financial reporng, included in the accompanying Management’s Report on Internal Control Over Financial Reporng (“Management’s
Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporng based on our audit. We are a public accounng
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securies laws and the
applicable rules and regulaons of the Securies and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effecve internal control over financial reporng was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporng, assessing the risk that a material weakness exists, tesng and evaluang the design and operang
effecveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

Our audit of, and opinion on, the Company’s internal control over financial reporng does not include the internal control over financial reporng of NAPCO
Chemical Company, Inc. (“NAPCO”), a wholly-owned subsidiary, whose financial statements reflect total assets and revenues constung less than 4% and
less than 1%, respecvely, of the related consolidated financial statement amounts as of and for the year ended April 3, 2022. As indicated in Management’s
Report, NAPCO was acquired during fiscal 2022. Management’s asseron on the effecveness of the Company’s internal control over financial reporng
excluded internal control over financial reporng of NAPCO.

Definion and limitaons of internal control over financial reporng
A company’s internal control over financial reporng is a process designed to provide reasonable assurance regarding the reliability of financial reporng and
the preparaon of financial statements for external purposes in accordance with generally accepted accounng principles. A company’s internal control over
financial reporng includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transacons and disposions of the assets of the company; (2) provide reasonable assurance that transacons are recorded as necessary to permit
preparaon of financial statements in accordance with generally accepted accounng principles, and that receipts and expenditures of the company are being
made only in accordance with authorizaons of management and directors of the company; and (3) provide reasonable assurance regarding prevenon or
mely detecon of unauthorized acquision, use, or disposion of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitaons, internal control over financial reporng may not prevent or detect misstatements. Also, projecons of any evaluaon of
effecveness to future periods are subject to the risk that controls may become inadequate because of changes in condions, or that the degree of
compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota
May 18, 2022

23

Board of Directors and Shareholders
Hawkins, Inc.

Report of Independent Registered Public Accounng Firm

Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Hawkins, Inc. (a Minnesota corporaon) and subsidiaries (the “Company”) as of April 3,
2022 and March 28, 2021 and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years then
ended, and the related notes and financial statement schedule included under Item 15(a) (collecvely referred to as the “financial statements”). In our
opinion, the financial statements present fairly, in all material respects, the financial posion of the Company as of April 3, 2022 and March 28, 2021, and the
results of its operaons and its cash flows for the years then ended, in conformity with accounng principles generally accepted in the United States of
America.

We also have audited, in accordance with the standards of the Public Company Accounng Oversight Board (United States) (“PCAOB”), the Company’s
internal control over financial reporng as of April 3, 2022 based on criteria established in the 2013 Internal Control—Integrated Framework issued by the
Commiee of Sponsoring Organizaons of the Treadway Commission (“COSO”), and our report dated May 18, 2022 expressed an unqualified opinion.

Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial
statements based on our audits. We are a public accounng firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securies laws and the applicable rules and regulaons of the Securies and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluang the accounng principles used and significant esmates made by management, as well as evaluang the overall presentaon of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.

Crical audit maers
Crical audit maers are maers arising from the current period audit of the financial statements that were communicated or required to be communicated
to the audit commiee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjecve, or complex judgments. We determined that there are no crical audit maers.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2021.

Minneapolis, Minnesota
May 18, 2022

24

Board of Directors and Shareholders
Hawkins, Inc.

Report of Independent Registered Public Accounng Firm

Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows of Hawkins, Inc. and
subsidiaries (the Company) for the year ended March 29, 2020 and the related notes and financial statement schedule II (collecvely, the consolidated
financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operaons of the Company
and its cash flows for the year ended March 29, 2020, in conformity with U.S. generally accepted accounng principles.

Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We are a public accounng firm registered with the Public Company Accounng Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securies laws and the
applicable rules and regulaons of the Securies and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included
performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audit also included evaluang the accounng principles used and significant esmates made by management, as well
as evaluang the overall presentaon of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG LLP

We served as the Company’s auditor from 2009 to 2020.

Minneapolis, Minnesota
May 20, 2020, except as to the stock split and par value adjustments as described in Note 1, which are as of June 2, 2021

25

HAWKINS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per-share data)

ASSETS
CURRENT ASSETS:

Cash and cash equivalents
Trade accounts receivables, net
Inventories
Prepaid expenses and other current assets
Total current assets
PROPERTY, PLANT, AND EQUIPMENT:

Land
Buildings and improvements
Machinery and equipment
Transportaon equipment
Office furniture and equipment

Less accumulated depreciaon

Net property, plant, and equipment

OTHER ASSETS:

Right-of-use assets
Goodwill
Intangible assets, net
Deferred compensaon plan asset
Other

Total other assets
Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:

Accounts payable — trade
Accrued payroll and employee benefits
Current poron of long-term debt
Short-term lease liability
Container deposits
Other current liabilies

Total current liabilies

LONG-TERM DEBT, LESS CURRENT PORTION
LONG-TERM LEASE LIABILITY
PENSION WITHDRAWAL LIABILITY
DEFERRED INCOME TAXES
DEFERRED COMPENSATION LIABILITY
OTHER LONG-TERM LIABILITIES
Total liabilies
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS’ EQUITY:

Common shares; authorized: 60,000,000 shares of $0.01 par value; 20,889,777 and 20,969,746 shares
issued and outstanding for 2022 and 2021, respecvely
Addional paid-in capital
Retained earnings
Accumulated other comprehensive income

Total shareholders’ equity
Total liabilies and shareholders’ equity

April 3, 2022

March 28, 2021

$

3,496  $

122,826 
94,985 
6,431 
227,738 

16,640 
118,369 
114,763 
43,968 
10,315 
304,055 
142,209 
161,846 

10,606 
77,401 
80,193 
6,783 
2,761 
177,744 
567,328  $

66,693  $
19,034 
9,913 
1,657 
1,558 
2,611 
101,466 
115,644 
9,143 
4,276 
23,422 
8,402 
2,374 
264,727 

209 
46,717 
254,384 
1,291 
302,601 
567,328  $

$

$

$

2,998 
90,603 
63,864 
5,542 
163,007 

15,235 
120,410 
109,353 
37,646 
17,760 
300,404 
155,792 
144,612 

11,630 
70,720 
76,368 
5,726 
487 
164,931 
472,550 

37,313 
18,048 
9,907 
1,587 
1,452 
2,155 
70,462 
88,845 
10,231 
4,631 
24,445 
7,322 
1,368 
207,304 

210 
51,138 
213,898 
— 
265,246 
472,550 

See accompanying notes to consolidated financial statements.

26

HAWKINS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per-share data)

Sales
Cost of sales
Gross profit
Selling, general and administrave expenses
Operang income
Interest expense, net
Other income (expense)
Income before income taxes
Income tax expense
Net income

Weighted average number of shares outstanding-basic
Weighted average number of shares outstanding-diluted

Basic earnings per share
Diluted earnings per share

Cash dividends declared per common share

April 03, 2022

Fiscal Year Ended

March 28, 2021

March 29, 2020

774,541  $
(628,021)
146,520 
(75,326)
71,194 
(1,404)
189 
69,979 
(18,437)
51,542  $

596,871  $
(473,109)
123,762 
(67,884)
55,878 
(1,467)
1,440 
55,851 
(14,871)
40,980  $

540,198 
(439,281)
100,917 
(59,246)
41,671 
(2,511)
(204)
38,956 
(10,589)
28,367 

20,947,234 
21,135,258 

21,024,344 
21,260,296 

21,159,978 
21,308,800 

2.46  $
2.44  $

1.95  $
1.93  $

1.34 
1.33 

0.52250  $

0.47125  $

0.46125 

$

$

$
$

$

See accompanying notes to consolidated financial statements.

27

  
 
HAWKINS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)

Net income
Other comprehensive income, net of tax:
   Unrealized gain (loss) on interest rate swap
Total other comprehensive income (loss)

Total comprehensive income

April 3, 2022

Fiscal Year Ended

March 28, 2021

March 29, 2020

$

$

51,542  $

40,980  $

1,291 
1,291 
52,833  $

79 
79 
41,059  $

28,367 

(396)
(396)
27,971 

See accompanying notes to consolidated financial statements.

28

 
HAWKINS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share data)

BALANCE — March 31, 2019

Cash dividends declared

Share-based compensaon expense
Vesng of restricted stock
Shares surrendered for payroll taxes
ESPP shares issued
Shares repurchased
Other comprehensive loss, net of tax

Net Income
BALANCE — March 29, 2020

Cash dividends declared and paid

Share-based compensaon expense
Vesng of restricted stock
Shares surrendered for payroll taxes
ESPP shares issued
Shares repurchased
Other comprehensive loss, net of tax

Net income
BALANCE — March 28, 2021

Cash dividends declared and paid

Share-based compensaon expense
Vesng of restricted stock
Shares surrendered for payroll taxes
ESPP shares issued
Shares repurchased
Other comprehensive income, net of
tax

Net income

BALANCE — April 3, 2022

Common Shares

Shares
21,184,900  $

Amount

— 
— 
71,944 
(18,320)
77,100 
(291,166)
— 
— 

21,024,458  $

— 
— 
26,542 
(3,314)
88,148 
(166,088)
— 
— 

20,969,746  $

— 
— 
134,230 
(45,390)
71,692 
(240,501)

— 
— 

20,889,777  $

Addional
Paid-in
Capital

Retained
Earnings

Accumulated Other
Comprehensive
Income (Loss)

Total
Shareholders’
Equity

212  $

— 
— 
— 
— 
1 
(2)
— 
— 
211  $

— 
— 
— 
— 
1 
(2)
— 
— 
210  $

— 
— 
1 
— 
— 
(2)

52,927  $

164,405  $

— 
2,273 
— 
(343)
1,399 
(5,851)
— 
— 
50,405  $

— 
3,343 
— 
(54)
1,582 
(4,138)
— 
— 
51,138  $

— 
3,818 
(1)
(1,467)
1,772 
(8,543)

(9,825)
— 
— 
— 
— 
— 
— 
28,367 
182,947  $

(10,029)
— 
— 
— 
— 
— 
— 
40,980 
213,898  $

(11,056)
— 
— 
— 
— 
— 

317  $

— 
— 
— 
— 
— 
— 
(396)
— 
(79) $

— 
— 
— 
— 
— 
— 
79 
— 
—  $

— 
— 
— 
— 
— 
— 

— 
— 
209  $

— 
— 
46,717  $

— 
51,542 
254,384  $

1,291 
— 
1,291  $

217,861 

(9,825)
2,273 
— 
(343)
1,400 
(5,853)
(396)
28,367 
233,484 

(10,029)
3,343 
— 
(54)
1,583 
(4,140)
79 
40,980 
265,246 

(11,056)
3,818 
— 
(1,467)
1,772 
(8,545)

1,291 
51,542 
302,601 

See accompanying notes to consolidated financial statements.

29

 
 
 
HAWKINS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income
Reconciliaon to cash flows provided by operang acvies:

Depreciaon and amorzaon
Operang leases
(Gain) loss on deferred compensaon assets
Deferred income taxes
Stock compensaon expense
Other

Changes in operang accounts (using) providing cash, net of
acquisions:

Trade receivables
Inventories
Accounts payable
Accrued liabilies
Lease liabilies
Income taxes
Other

Net cash provided by operang acvies

CASH FLOWS FROM INVESTING ACTIVITIES:

Addions to property, plant, and equipment
Acquisions
Other

CASH FLOWS FROM FINANCING ACTIVITIES:

Net cash used in invesng acvies

Cash dividends paid
New shares issued
Shares surrendered for payroll taxes
Shares repurchased
Payments for debt issuance costs
Payments on senior secured revolving loan
Borrowings on senior secured revolving loan

Net cash provided by (used in) financing acvies

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS - beginning of year
CASH AND CASH EQUIVALENTS - end of year

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION-

Cash paid during the year for income taxes
Cash paid for interest
Noncash invesng acvies - Capital expenditures in accounts payable

$

$

April 3, 2022

Fiscal Year Ended

March 28, 2021

March 29, 2020

$

51,542  $

40,980  $

24,129 
1,899 
(189)
(1,501)
3,818 
545 

(30,526)
(30,034)
25,138 
2,723 
(1,907)
214 
(3,014)
42,837 

(28,512)
(21,546)
302 
(49,756)

(11,056)
1,772 
(1,467)
(8,545)
(287)
(15,000)
42,000 
7,417 
498 
2,998 
3,496  $

19,726  $
1,197 
3,733 

22,669 
1,896 
(1,440)
(689)
3,343 
203 

(21,323)
(7,960)
2,551 
7,554 
(1,837)
(235)
(1,919)
43,793 

(20,794)
(51,000)
362 
(71,432)

(10,029)
1,583 
(54)
(4,140)
— 
(37,000)
76,000 
26,360 
(1,279)
4,277 
2,998  $

15,783  $
1,288 
626 

28,367 

21,584 
2,033 
233 
(1,421)
2,273 
656 

(3,387)
6,045 
4,228 
663 
(2,025)
586 
(933)
58,902 

(24,549)
— 
346 
(24,203)

(9,825)
1,400 
(343)
(5,853)
— 
(44,000)
19,000 
(39,621)
(4,922)
9,199 
4,277 

11,415 
2,413 
1,041 

See accompanying notes to consolidated financial statements.

30

  
 
Note 1 — Nature of Business and Significant Accounng Policies

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nature of Business - We have three reportable segments: Industrial, Water Treatment and Health and Nutrion. The Industrial Group specializes in providing
industrial chemicals, products and services to industries such as agriculture, chemical processing, electronics, energy, food, pharmaceucal and plang. This
group  also  manufactures  and  sells  certain  food-grade  products,  including  liquid  phosphates,  lactates  and  other  blended  products.  The  Water  Treatment
Group  specializes  in  providing  chemicals,  products,  equipment,  services  and  soluons  for  potable  water,  municipal  and  industrial  wastewater,  industrial
process water and non-residenal swimming pool water. This group has the resources and flexibility to treat systems ranging in size from a single small well to
a mul-million-gallon-per-day facility. Our Health and Nutrion Group specializes in providing ingredient distribuon, processing and formulaon soluons to
manufacturers of nutraceucal, funconal food and beverage, personal care, dietary supplement and other nutrional food, health and wellness products.
This group offers a diverse product porolio including minerals, botanicals and herbs, vitamins and amino acids, excipients, joint products, sweeteners and
enzymes.

Fiscal Year - Our fiscal year is a 52 or 53-week year ending on the Sunday closest to March 31. Our fiscal 2022 was 53 weeks and our fiscal 2021 fiscal 2020
were both 52 weeks. Fiscal 2023 will be 52 weeks.

Principles of Consolidaon - The consolidated financial statements include the accounts of Hawkins, Inc. and its wholly-owned subsidiaries. All intercompany
transacons and accounts have been eliminated.

Esmates - The preparaon of financial statements in conformity with U.S. generally accepted accounng principles (“GAAP”) requires management to make
esmates  and  assumpons  that  affect  the  reported  amounts  of  assets  and  liabilies,  parcularly  receivables,  inventories,  property,  plant  and  equipment,
right-of-use  assets,  goodwill,  intangibles,  accrued  expenses,  short-term  and  long-term  lease  liability,  income  taxes  and  related  accounts  and  the  reported
amounts of revenues and expenses during the reporng period. Actual results could differ from those esmates.

Revenue  Recognion  -  Revenue  is  measured  as  the  amount  of  consideraon  we  expect  to  receive  in  exchange  for  transferring  products.  Revenue  is
recognized when we sasfy our performance obligaons under the contract. We recognize revenue upon transfer of control of the promised products to the
customer, with revenue recognized at the point in me the customer obtains control of the products. Net sales include products and shipping charges, net of
esmates for product returns and any related sales rebates. We esmate product returns based on historical return rates. Using probability assessments, we
esmate sales rebates expected to be paid over the term of the contract. The majority of our contracts have a single performance obligaon and are short
term in nature. Sales taxes that are collected from customers and remied to governmental authories are accounted for on a net basis and therefore are
excluded from net sales. We offer certain customers cash discounts and volume rebates as sales incenves. The discounts and volume rebates are recorded as
a reducon in sales at the me revenue is recognized in an amount esmated based on historical experience and contractual obligaons.

Shipping  and  Handling  -  All  shipping  and  handling  amounts  billed  to  customers  are  included  in  revenues.  Costs  incurred  related  to  the  shipping  and  the
handling of products are included in cost of sales.

31

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Fair Value Measurements - The financial assets and liabilies that are re-measured and reported at fair value for each reporng period are an interest rate
swap and marketable securies. There are no fair value measurements with respect to nonfinancial assets or liabilies that are recognized or disclosed at fair
value in our consolidated financial statements on a recurring basis.

Assets and liabilies measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuaon as of
the measurement date:

Level 1:  Valuaon is based on quoted prices in acve markets for idencal assets or liabilies.

Level 2:  Valuaon is based on quoted prices in acve markets for similar assets or liabilies, or quoted prices for idencal or similar assets or liabilies
in markets that are not acve, or inputs other than quoted prices that are observable or can be corroborated by observable market data for the asset or
liability.

Level 3:  Valuaon is based upon unobservable inputs for the asset or liability that are supported by lile or no market acvity. These fair values are

determined using pricing models for which the assumpons ulize management’s esmates or market parcipant assumpons.

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels
of  the  hierarchy,  the  level  within  which  the  fair  value  measurement  is  categorized  is  based  on  the  lowest  level  input  that  is  significant  to  the  fair  value
measurement.

Cash  Equivalents  -  Cash  equivalents  include  all  liquid  debt  instruments  (primarily  cash  funds  and  money  market  accounts)  purchased  with  an  original
maturity of three months or less. The cash balances, maintained at large commercial banking instuons with strong credit rangs, may, at mes, exceed
federally insured limits.

Trade Receivables and Concentraons of Credit Risk - Financial instruments, which potenally subject us to a concentraon of credit risk, principally consist
of trade receivables. We sell our principal products to a large number of customers in many different industries. As of April 3, 2022, we had a significant
concentraon of credit risk, with a single customer represenng approximately 13% of our total trade receivables. There are no other concentraons of credit
risk with other single customers from a parcular service or geographic area that would significantly impact us in the near term.

To reduce credit risk, we rounely assess the financial strength of our customers. Receivables are reported net of an allowance for credit losses as determined
by management at the end of each reporng period. Our receivable allowance in based on an esmate of expected credit losses, with the esmate based on
a number of qualitave and quantave factors that, based on collecon experience, may have an impact on repayment risk and ability to collect.

Inventories - Inventories, consisng primarily of finished goods, are primarily valued at the lower of cost or net realizable value, with cost for approximately
73% of our inventory determined using the last-in, first-out (“LIFO”) method. Cost for the other 27% of our total inventory is determined using the first-in,
first-out (“FIFO”) method.

Leases - We determine if an arrangement is a lease at incepon. Right-of-use ("ROU") assets include operang leases. Lease liabilies for operang leases are
classified in "short-term lease liabilies" and "long-term lease liabilies" in our consolidated balance sheet.

ROU assets and related liabilies are recognized at commencement date based on the present value of the lease payments over the lease term. As most of
our leases do not provide an implicit rate, we use our incremental borrowing rate based on the informaon available at commencement date in determining
the present value of lease payments. Lease terms may include opons to extend or terminate the lease when it is reasonably certain that we will exercise that
opon. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Lease and non-lease components are generally accounted for separately for real estate leases. For non-real estate leases, we account for the lease and non-
lease components as a single lease component.

32

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Property, Plant and Equipment - Property is stated at cost and depreciated or amorzed over the lives of the assets, using the straight-line method. Esmated
lives are: 10 to 40 years for buildings and improvements; 3 to 20 years for machinery and equipment; and 3 to 10 years for transportaon equipment and
office  furniture  and  equipment  including  computer  systems.  Leasehold  improvements  are  amorzed  over  the  lesser  of  their  esmated  useful  lives  or  the
remaining lease term. Depreciaon and amorzaon expense is recorded in our Consolidated Statement of Income within cost of goods sold and selling,
general  and  administrave  expense,  depending  on  the  use  of  the  underlying  asset.  We  recorded  depreciaon  expense  of  $17.7  million  for  fiscal  2022,
$16.8 million for fiscal 2021 and $16.5 million for fiscal 2020.

Significant improvements that add to producve capacity or extend the lives of properes are capitalized. Costs for repairs and maintenance are charged to
expense as incurred. When property is rered or otherwise disposed of, the cost and related accumulated depreciaon or amorzaon are removed from the
accounts and any related gains or losses are included in income.

We review the recoverability of long-lived assets to be held and used, such as property, plant and equipment, when events or changes in circumstances occur
that indicate the carrying value of the asset group may not be recoverable, such as prolonged industry downturn or significant reducons in projected future
cash flows. The assessment of possible impairment is based on our ability to recover the carrying value of the asset group from the expected future pre-tax
cash flows (undiscounted) of the related asset group. If these cash flows are less than the carrying value of such asset group, an impairment loss would be
measured by the amount the carrying value exceeds the fair value of the long-lived asset group. The measurement of impairment requires us to esmate
future cash flows and the fair value of long-lived assets. We did not incur any asset write-off charge in fiscal 2022 related to the impairment of long-lived
assets. Asset write-off charges were $0.2 million during fiscal 2021 and $0.6 million during fiscal 2020.

Goodwill and Idenfiable Intangible Assets - Goodwill represents the excess of the cost of acquired businesses over the fair value of idenfiable tangible net
assets and idenfiable intangible assets purchased. Goodwill is tested at least annually for impairment, and is tested for impairment more frequently if events
or changes in circumstances indicate that the asset might be impaired. Our annual test for impairment is as of the first day of our fourth fiscal quarter. As of
December 27, 2021, we performed an analysis of qualitave factors for our Industrial, Water Treatment and Health and Nutrion reporng units to determine
whether it is more likely than not that the fair value of either of these reporng units was less than its carrying amount as a basis for determining whether it
is  necessary  to  perform  a  quantave  goodwill  impairment  test.  Based  on  management’s  analysis  of  qualitave  factors,  we  determined  that  it  was  not
necessary to perform a quantave goodwill impairment test for any of these reporng units.

Goodwill impairment assessments were also completed in the fourth quarters of fiscal 2021 and 2020 and similarly, we did not record a goodwill impairment
charge.

Our  primary  idenfiable  intangible  assets  include  customer  lists,  trade  secrets,  non-compeon  agreements,  trademarks  and  trade  names  acquired  in
previous business acquisions. Idenfiable intangible assets with finite lives are amorzed whereas idenfiable intangible assets with indefinite lives are not
amorzed. The values assigned to the intangible assets with finite lives are being amorzed on average over a remaining useful life of approximately 12 years.
Idenfiable intangible assets that are subject to amorzaon are evaluated for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. No such events or changes in circumstances occurred during fiscal 2022, 2021 or 2020. Idenfiable intangible assets
not subject to amorzaon are tested for impairment annually or more frequently if events warrant. The impairment test consists of a qualitave assessment
to determine whether it is more likely than not that the asset is impaired. Based on management’s analysis of qualitave factors, we determined that it was
not necessary to perform an annual quantave impairment test for fiscal 2022, 2021 or 2020.

33

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Income Taxes - We account for income taxes under the asset and liability method, which requires the recognion of deferred tax assets and liabilies for the
expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilies are
determined on the basis of the differences between the financial statements and tax basis of assets and liabilies using enacted tax rates in effect for the year
in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilies is recognized in income tax expense in
the  period  that  includes  the  enactment  date.  The  deferred  tax  assets  and  liabilies  are  analyzed  regularly,  and  management  assesses  the  likelihood  that
deferred tax assets will be recovered from future taxable income. We record any interest and penales related to income taxes as income tax expense in the
consolidated statements of income.

We  recognize  the  effect  of  income  tax  posions  only  if  those  posions  are  more-likely-than-not  to  be  sustained.  Recognized  income  tax  posions  are
measured at the largest amount of tax with a greater than 50 percent likelihood of being realized upon ulmate selement with the related tax authority.
Changes in recognion or measurement are reflected in the period in which the facts and circumstances change.

Stock-Based Compensaon - We account for stock-based compensaon on a fair value basis. The esmated grant date fair value of each stock-based award is
recognized in expense over the requisite service period (generally the vesng period). Non-vested share awards are recorded as expense over the requisite
service periods based on the stock price on the date of grant.

Earnings Per Share - Basic earnings per share (“EPS”) are computed by dividing net income by the weighted-average number of common shares outstanding.
Diluted EPS are computed by dividing net income by the weighted-average number of common shares outstanding including the incremental shares assumed
following:
to  be 

as  performance  units 

calculated  using 

stock.  Basic 

EPS  were 

restricted 

issued 

and 

the 

and  diluted 
April 03, 2022

March 28, 2021

March 29, 2020

Weighted average common shares outstanding — basic
Diluve impact of stock performance units and restricted stock
Weighted average common shares outstanding — diluted

20,947,234 
188,024 
21,135,258 

21,024,344 
235,952 
21,260,296 

21,159,978 
148,822 
21,308,800 

There were no shares or stock opons excluded from the calculaon of weighted average common shares for diluted EPS for fiscal 2022, 2021 or 2020.

Stock Split - In fiscal 2021, we effected a two-for-one stock split of our common stock and adjusted the par value of our common stock to $.01 par value. Our
consolidated financial statements, related notes, and other financial data contained in this report have been adjusted to give retroacve effect to the stock
split for all periods presented.

Derivave Instruments and Hedging Acvies - We are subject to interest rate risk associated with our variable rate debt. We have in place an interest rate
swap agreement which has been designated as a cash flow hedge, the purpose of which is to eliminate the cash flow impact of interest rate changes on a
poron of our variable-rate debt. The interest rate swap is measured at fair value on the contract date and is subsequently remeasured to fair value at each
reporng date. Changes in the fair value of a derivave that is highly effecve, and that is designated and qualifies as a cash flow hedge, are recorded in other
comprehensive income, unl the consolidated statement of income is affected by the variability in cash flows of the designated hedged item. To the extent
that the hedge is ineffecve, changes in the fair value are recognized in the Statement of Income.

Recently Issued Accounng Pronouncements

We do not expect that any recently issued accounng pronouncements will have a material effect on our financial statements.

Recently Adopted Accounng Pronouncements

In  December  2019,  the  Financial  Accounng  Standards  Board  ("FASB")  issued  Accounng  Standards  Update  ("ASU")  2019-12,  Income  Taxes  (Topic  740)  -
Simplifying  the  Accounng  for  Income  Taxes,  removing  certain  excepons  for  investments,  intra-period  allocaons  and  interim  calculaons  and  adding
guidance to reduce complexity in accounng for income taxes. We adopted this guidance at the beginning of fiscal 2022. Our adopon of this ASU did not
have a material impact on the Company's consolidated financial posion, results of operaons or cash flows.

34

 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 2 — Acquisions

Acquision of NAPCO Chemical Company, Inc.: On December 30, 2021, we acquired substanally all the assets of NAPCO Chemical Company, Inc. ("NAPCO"),
under the terms of an asset purchase agreement with NAPCO and certain other pares thereto, to further the geographic reach of our Water Treatment
segment. We paid $18.5 million at closing for the acquision, and an addional $0.5 million for a working capital adjustment. NAPCO manufactures and
distributes water treatment chemicals from three locaons in Texas. The results of operaons since the acquision date, and the assets, including the
goodwill associated with this acquision, are included in our Water Treatment segment. Costs associated with this transacon were not material and were
expensed as incurred.

The acquision has been accounted for as a business combinaon, under which the total purchase price is allocated to the net tangible and intangible assets
and liabilies of NAPCO acquired in connecon with the acquision based on their esmated fair values. We esmated the fair values of the assets acquired
and liabilies assumed using a discounted cash flow analysis (income approach). Of the total $19 million purchase price, we allocated $9.4 million to finite-
lived intangible assets, primarily customer relaonships to be amorzed over 18 years, $3.6 million to property, plant and equipment and $1.5 million to net
working capital. The residual amount of $4.5 million was allocated to goodwill. The goodwill recognized as a result of this acquision is primarily aributable
to strategic and synergisc benefits, as well as the assembled workforce. Such goodwill is expected to be deducble for tax purposes. The purchase price
allocaon is final.

Acquision of Water and Waste Speciales, Inc.: On October 29, 2021, we acquired substanally all the assets of Water and Waste Speciales, Inc., under
the terms of a purchase agreement with Water and Waste Speciales and its shareholders, to further the geographic reach of our Water Treatment segment.
We paid $1.4 million at closing for the acquision. Water and Waste Speciales was a water treatment chemical distribuon company operang primarily in
Alabama. The results of operaons since the acquision date, and the assets, including the goodwill associated with this acquision, are included in our
Water Treatment segment. Costs associated with this transacon were not material and were expensed as incurred.

The acquision has been accounted for as a business combinaon, under which the total purchase price is allocated to the net tangible and intangible assets
and liabilies of Water and Waste Speciales acquired in connecon with the acquision based on their esmated fair values. We esmated the fair values of
the assets acquired and liabilies assumed using a discounted cash flow analysis (income approach). Of the total $1.4 million purchase price, we allocated
$0.5 million to finite-lived intangible assets, primarily customer relaonships to be amorzed over 11 years, and $0.4 million to property, plant and
equipment. The residual amount of $0.5 million was allocated to goodwill. The goodwill recognized as a result of this acquision is primarily aributable to
strategic and synergisc benefits, as well as the assembled workforce. Such goodwill is expected to be deducble for tax purposes. The purchase price
allocaon is final.

Acquision of Southeast Water Systems LLC: On September 20, 2021, we acquired substanally all the assets of Southeast Water Systems LLC, under the
terms of an asset purchase agreement with Southeast Water Systems and its shareholders, to further the geographic reach of our Water Treatment segment.
We paid $1.2 million at closing for the acquision and may pay up to an addional $1.0 million over the next three years based on achieving certain goals.
Southeast Water Systems supplied and installed water treatment chemical equipment to its customers located primarily in Alabama, southern Georgia and
the Florida panhandle. The results of operaons since the acquision date, and the assets, including the goodwill associated with this acquision, are
included in our Water Treatment segment. Costs associated with this transacon were not material and were expensed as incurred.

The acquision has been accounted for as a business combinaon, under which the total purchase price is allocated to the net tangible and intangible assets
and liabilies of Southeast Water Systems acquired in connecon with the acquision based on their esmated fair values. We esmated the fair values of
the assets acquired and liabilies assumed using a discounted cash flow analysis (income approach). Of the total $2.2 million purchase price, which includes a
conngent consideraon liability of $1.0 million, we allocated $0.4 million to finite-lived intangible assets, primarily customer relaonships to be amorzed
over 10 years, and $0.1 million to property, plant and equipment. The residual amount of $1.7 million was allocated to goodwill. The goodwill recognized as a
result of this acquision is primarily aributable to strategic and synergisc benefits, as well as the assembled workforce. Such goodwill is expected to be
deducble for tax purposes. The purchase price allocaon is final.

35

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Acquision of C&L Aqua Professionals, Inc. and LC Blending, Inc.: In fiscal 2021, we acquired substanally all the assets of C&L Aqua Professionals, Inc. and
LC Blending, Inc. (together, "C&L Aqua") under the terms of an asset purchase agreement among us, C&L Aqua and its shareholders, to further the geographic
reach of our Water Treatment segment. We paid $16 million for the acquision. C&L Aqua was a water treatment chemical distribuon company operang
primarily in Louisiana. The results of operaons since the acquision date, and the assets, including the goodwill associated with this acquision, are included
in our Water Treatment segment. Costs associated with this transacon were not material and were expensed as incurred.

The acquision has been accounted for as a business combinaon, under which the total purchase price is allocated to the net tangible and intangible assets
and liabilies of C&L Aqua acquired in connecon with the acquision based on their esmated fair values. We esmated the fair values of the assets
acquired and liabilies assumed using a discounted cash flow analysis (income approach). Of the $16 million purchase price, we preliminarily allocated
$8.2 million to finite-lived intangible assets, primarily customer relaonships to be amorzed over 18 years, $3.6 million to property, plant and equipment,
and $1.1 million to net working capital. The residual amount of $3.1 million was allocated to goodwill. The goodwill recognized as a result of this acquision is
primarily aributable to strategic and synergisc benefits, as well as the assembled workforce. Such goodwill is expected to be deducble for tax purposes.

Acquision of Property: In fiscal 2021, we acquired a manufacturing facility on 28 acres located adjacent to our facility in Rosemount, Minnesota to allow
further expansion and growth in both our Industrial and Water Treatment segments. We paid $10 million for the property. The purchase of this facility adds
approximately 40,000 square feet of manufacturing and warehouse space to bring us to a total of 105,000 square feet of space on 56 acres of land in the
area, with rail access at both of the sites to allow for future growth and provide for supply chain flexibility on certain raw materials to beer serve our
customers.

This acquision has been accounted for as an asset acquision, under which the total purchase price is allocated to the net tangible assets acquired based on
their esmated fair values. Of the $10 million purchase price, $4.6 million was allocated to buildings, $3.7 million was allocated to land, $1.4 million was
allocated to equipment, and $0.3 million was allocated to site improvements.

Acquision of American Development Corporaon of Tennessee, Inc.: In fiscal 2021, we acquired substanally all the assets of American Development
Corporaon of Tennessee, Inc. (“ADC”) under the terms of an asset purchase agreement among us, ADC and its shareholders, to further the geographic reach
of our Water Treatment segment. We paid $25 million for the acquision. ADC was a water treatment chemical distribuon company operang primarily in
Tennessee, Georgia and Kentucky. The results of operaons since the acquision date, and the assets, including the goodwill associated with this acquision,
are included in our Water Treatment segment. Costs associated with this transacon were not material and were expensed as incurred.

The acquision has been accounted for as a business combinaon, under which the total purchase price is allocated to the net tangible and intangible assets
and liabilies of ADC acquired in connecon with the acquision based on their esmated fair values. We esmated the fair values of the assets acquired and
liabilies assumed using a discounted cash flow analysis (income approach). Of the $25 million purchase price, we allocated $13.3 million to finite-lived
intangible assets, primarily customer relaonships to be amorzed over 17 years, $1.6 million to property, plant and equipment, and $0.9 million to net
working capital. The residual amount of $9.2 million was allocated to goodwill. The goodwill recognized as a result of this acquision is primarily aributable
to strategic and synergisc benefits, as well as the assembled workforce. Such goodwill is expected to be deducble for tax purposes.

36

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 3 — Revenue

Our  revenue  arrangements  generally  consist  of  a  single  performance  obligaon  to  transfer  promised  goods  or  services.  We  disaggregate  revenues  from
contracts with customers by both operang segments and types of product sold. Reporng by operang segment is pernent to understanding our revenues,
as it aligns to how we review the financial performance of our operaons. Types of products sold within each operang segment help us to further evaluate
the financial performance of our segments.

The following table disaggregates external customer net sales by major revenue stream: 

(In thousands)
Manufactured, blended or repackaged products
Distributed specialty products
(3)
Bulk products 
Other

 (2)

 (1)

Total external customer sales

(In thousands)
Manufactured, blended or repackaged products
Distributed specialty products
(3)
Bulk products 
Other

 (2)

 (1)

Total external customer sales

(In thousands)
Manufactured, blended or repackaged products
Distributed specialty products
(3)
Bulk products 
Other

 (2)

 (1)

Total external customer sales

Industrial

318,514 
— 
61,443 
6,981 
386,938 

Industrial

231,427 
— 
38,378 
3,556 
273,361 

Industrial

222,161 
— 
49,864 
3,199 
275,224 

$

$

$

$

$

$

Fiscal Year Ended April 3, 2022:
Health and 
Nutrion

Water 
Treatment

205,350 
— 
20,211 
2,572 
228,133 

$

$

34,690 
124,312 
— 
468 
159,470 

Fiscal Year Ended March 28, 2021:
Health and 
Nutrion

Water 
Treatment

152,694 
— 
16,067 
1,243 
170,004 

$

$

38,270 
115,317 
— 
(81)
153,506 

Fiscal Year Ended March 29, 2020:
Health and 
Nutrion

Water 
Treatment

139,917 
— 
18,481 
1,497 
159,895 

$

$

14,770 
90,065 
— 
244 
105,079 

$

$

$

$

$

$

$

$

$

$

$

$

Total

558,554 
124,312 
81,654 
10,021 
774,541 

Total

422,391 
115,317 
54,445 
4,718 
596,871 

Total

376,848 
90,065 
68,345 
4,940 
540,198 

(1) For our Industrial and Water Treatment 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 quanes, and services we provide for our customers. For our Health and Nutrion 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 Nutrion segment, which may be sold out of one of our facilies or direct

shipped to our customers

(3) This line includes bulk products in our Industrial and Water Treatment segments that we do not modify in any way, but receive, store, and ship from our facilies,

or direct ship to our customers in large quanes.

37

 
 
 
 
 
 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 4 — Derivave Instruments

We  have  in  place  an  interest  rate  swap  agreement  to  manage  the  risk  associated  with  a  poron  of  our  variable-rate  long-term  debt.  We  do  not  ulize
derivave instruments for speculave purposes. The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange
of  the  underlying  noonal  amount  on  which  the  interest  payments  are  calculated.  The  noonal  amount  of  the  swap  agreement  is  $60  million  and  it  will
terminate on May 1, 2027. We have designated this swap as a cash flow hedge and have determined that it qualified for hedge accounng treatment. For so
long as the hedge is effecve, changes in fair value of the cash flow hedge are recorded in other comprehensive income or loss (net of tax) unl income or
loss from the cash flows of the hedged item is realized.

We previously had in place an interest rate swap agreement to manage the risk associated with a poron of our variable-rate long-term debt. The $20 million
swap agreement terminated on December 23, 2020. We had designated this swap as a cash flow hedge and determined that it qualified for hedge accounng
treatment. For so long as the hedge was effecve, changes in fair value of the cash flow hedge were recorded in other comprehensive income or loss (net of
tax) unl income or loss from the cash flows of the hedged item was realized.

For the years ended April 3, 2022 and March 28, 2021, we recorded $1.3 million and $0.1 million in other comprehensive income related to unrealized gains
(net of tax) on the cash flow hedge. For the year ended March 29, 2020, we recorded $0.4 million in other comprehensive income related to unrealized losses
(net of tax) on the cash flow hedge described above. Included in other other long-term assets on our consolidated balance sheet was $1.8 million as of
April 3, 2022. Included in other current liabilies on our consolidated balance sheet was $0.1 million as of March 29, 2020.

By their nature, derivave instruments are subject to market risk. Derivave instruments are also subject to credit risk associated with counterpares to the
derivave  contracts.  Credit  risk  associated  with  derivaves  is  measured  based  on  the  replacement  cost  should  the  counterparty  with  a  contract  in  a  gain
posion to us fail to perform under the terms of the contract. While the current interest rate swap is in effect, we do not ancipate nonperformance by the
counterparty.

Note 5 – Fair Value Measurements

Our financial assets and liabilies are measured at fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transacon between market parcipants at the measurement date (exit price). The carrying value of cash equivalents, accounts receivable, accounts payable,
and accrued expenses approximate fair value because of the short-term nature of these instruments. Because of the variable-rate nature of our debt under
our credit facility, our debt also approximates fair value.  

Assets and Liabilies Measured at Fair Value on a Recurring Basis.  The fair value hierarchy requires the use of observable market data when available. In
instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based
on the lowest level input that is significant to the fair value measurement in its enrety. Our assessment of the significance of a parcular item to the fair
value measurement in its enrety requires judgment, including the consideraon of inputs specific to the asset or liability.

Our financial assets that are measured at fair value on a recurring basis are an interest rate swap and assets held in a deferred compensaon rerement plan.
Both of these assets are classified as other long-term assets on our balance sheet, with the poron of the deferred compensaon rerement plan assets
expected to be paid within twelve months classified as current assets. The fair value of the interest rate swap is determined by the respecve counterpares
based on interest rate changes. Interest rate swaps are valued based on observable interest rate yield curves for similar instruments. The deferred
compensaon plan assets relate to contribuons made to a non-qualified compensaon plan on behalf of certain employees who are classified as “highly
compensated employees” as determined by IRS guidelines. The assets are part of a rabbi trust and the funds are held in mutual funds. The fair value of the
deferred compensaon is based on the quoted market prices for the mutual funds at the end of the period.

The following table summarizes the balances of assets measured at fair value on a recurring basis as of April 3, 2022 and March 28, 2021.

(In thousands)
Assets

Deferred compensaon plan assets
Interest rate swap

 0

April 3, 2022

March 28, 2021

Level 1

Level 2

$

7,038 
1,769 

$

5,946 
— 

38

 
 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 6 – Assets Held for Sale

We have no assets classified as held for sale as of April 3, 2022. Included in assets held for sale as of March 28, 2021 was $0.7 million for an office building in
St. Louis, Missouri that was ulized in the administraon of our Industrial segment, and $0.2 million for a water treatment branch located in Eldridge, Iowa,
which has been relocated to another owned facility. Both were sold in the first quarter of fiscal 2022. These amounts were recorded as assets held for sale
within prepaid expenses and other current assets on our balance sheet.

Note 7 — Inventories

Inventories at April 3, 2022 and March 28, 2021 consisted of the following:

(In thousands)
Inventory (FIFO basis)
LIFO reserve
Net inventory

2022

2021

$

$

116,325  $
(21,340)
94,985  $

69,438 
(5,574)
63,864 

The FIFO value of inventories accounted for under the LIFO method was $83.7 million at April 3, 2022 and $46.8 million at March 28, 2021. The remainder of
the inventory was valued and accounted for under the FIFO method.

39

 
 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 8 — Goodwill and Other Idenfiable Intangible Assets

The carrying amount of goodwill for each of our three reportable segments were as follows:
(In thousands)
Balance as of March 29, 2020

$

Addion due to acquisions

Balance as of March 28, 2021

Addion due to acquisions

Balance as of April 3, 2022

$

$

Industrial

Water Treatment

Health and Nutrion

Total

6,495  $
— 
6,495  $

— 
6,495  $

7,000  $
12,280 
19,280  $

6,681 
25,961  $

44,945  $

— 

44,945  $

— 

44,945  $

58,440 
12,280 
70,720 

6,681 
77,401 

The following is a summary of our idenfiable intangible assets as of April 3, 2022 and March 28, 2021:

(In thousands)
Finite-life intangible assets:
Customer relaonships
Trademarks and trade names
Other finite-life intangible assets

Total finite-life intangible assets
Indefinite-life intangible assets

Total intangible assets, net

(In thousands)
Finite-life intangible assets:
Customer relaonships
Trademarks and trade names
Other finite-life intangible assets

Total finite-life intangible assets
Indefinite-life intangible assets

Total intangible assets, net

Gross Amount

2022

Accumulated
Amorzaon

Net carrying value

109,644  $
6,370 
3,904 
119,918 
1,227 
121,145  $

(32,399) $
(4,746)
(3,807)
(40,952)
— 
(40,952) $

77,245 
1,624 
97 
78,966 
1,227 
80,193 

Gross Amount

2021

Accumulated
Amorzaon

Net carrying value

99,588  $
6,210 
3,833 
109,631 
1,227 
110,858  $

(26,522) $
(4,275)
(3,693)
(34,490)
— 
(34,490) $

73,066 
1,935 
140 
75,141 
1,227 
76,368 

$

$

$

$

Intangible asset amorzaon expense was $6.5 million during fiscal 2022, $5.8 million during fiscal 2021, and $5.1 million during fiscal 2020.

The esmated future amorzaon expense for idenfiable intangible assets is as follows:
(In thousands)
Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Thereaer

Total

Intangible Assets
6,923 
$
6,707 
6,707 
6,606 
6,305 
45,718 
78,966 

$

40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 9 – Debt

On March 31, 2022, we entered into a second amended and restated credit agreement (the “Credit Agreement”) with U.S. Bank Naonal Associaon (“U.S.
Bank”) as Sole Lead Arranger and Sole Book Runner, and other lenders from me to me party thereto (collecvely, the “Lenders”), whereby U.S. Bank is also
serving as Administrave Agent. The Credit Agreement refinanced the revolving loan under our previous credit agreement with U.S. Bank and provides us
with senior secured revolving credit facilies (the “Revolving Loan Facility”) totaling $250.0 million. The Revolving Loan Facility includes a $15 million leer of
credit subfacility and $25 million swingline subfacility. The Revolving Loan Facility has a five-year maturity date, maturing on April 30, 2027. The Revolving
Loan Facility is secured by substanally all of our personal property assets and those of our subsidiaries.

We  used  $126.0  million  of  the  proceeds  from  the  Revolving  Loan  Facility  to  refinance  the  obligaons  under  the  previous  credit  facility.  We  may  use  the
remaining amount of the Revolving Loan Facility for working capital, capital expenditures, share repurchases, restricted payments and acquisions permied
under the Credit Agreement, and other general corporate purposes.

At April 3, 2022, the effecve interest rate on our borrowings was 1.2%. In addion to paying interest on the outstanding principal under the Revolving Loan
Facility, we are required to pay a commitment fee on the unulized commitments thereunder. The commitment fee is between 0.15% and 0.25%, depending
on our leverage rao.

Debt issuance costs of $0.3 million paid to the lenders in connecon with the Credit Agreement, as well as unamorzed debt issuance costs of $0.1 million
paid in connecon with the previous credit facility, are reflected as a reducon of debt and are being amorzed as interest expense over the term of the
Revolving Loan Facility.

The Credit Agreement requires us to maintain (a) a minimum fixed charge coverage rao of 1.15 to 1.00 and (b) a maximum total cash flow leverage rao of
3.0  to  1.0.  The  Credit  Agreement  also  contains  other  customary  affirmave  and  negave  covenants,  including  covenants  that  restrict  our  ability  to  incur
addional indebtedness, dispose of significant assets, make certain investments, including any acquisions other than permied acquisions, make certain
payments, enter into sale and leaseback transacons, grant liens on our assets or enter into rate management transacons, subject to certain limitaons. We
are permied to make distribuons, pay dividends and repurchase shares so long as no default or event of default exists or would exist as a result thereof. We
are permied to make distribuons, pay dividends and repurchase shares so long as no default or event of default exists or would exist as a result thereof. As
of April 3, 2022, we were in compliance with all required covenants.

Debt at April 3, 2022 and March 28, 2021 consisted of the following: 
(In thousands)
Senior secured revolving loan

 Less: unamorzed debt issuance costs
 Total debt, net of debt issuance costs
 Less: current poron of long-term debt, net of current unamorzed debt issuance costs

Total long-term debt

April 3, 2022

March 28, 2021

$

$

126,000  $
(443)
125,557 
(9,913)
115,644  $

99,000 
(248)
98,752 
(9,907)
88,845 

41

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 10 — Share-Based Compensaon 

Performance-Based Restricted Stock Units.  Our Board of Directors has approved a performance-based equity compensaon arrangement for our execuve
officers. This performance-based arrangement provides for the grant of performance-based restricted stock units that represent a possible future issuance of
restricted shares of our common shares based on our pre-tax income target for the applicable fiscal year. The actual number of restricted shares to be issued
to each execuve officer will be determined when our final financial informaon becomes available aer the applicable fiscal year and will be between zero
shares and 88,524 shares in the aggregate for fiscal 2022. The restricted shares issued, if any, will fully vest two years aer the end of the fiscal year on which
the performance is based. We record the compensaon expense for the outstanding performance share units and then-converted restricted stock over the
life of the awards.

The following table represents the restricted stock acvity for fiscal 2021 and 2022:

Outstanding at beginning of fiscal 2020
Granted
Vested
Forfeited
Outstanding at end of fiscal 2020
Granted
Vested
Forfeited
Outstanding at end of fiscal 2021
Granted
Vested
Forfeited
Outstanding at end of fiscal 2022

Shares

65,766  $
138,504 
(55,240)
— 
149,030  $
129,626 
(10,526)
(29,010)
239,120  $
111,618 
(123,002)
(13,258)
214,478  $

Weighted-
Average Grant
Date Fair Value

21.83 
17.25 
23.01 
— 
17.13 
18.69 
15.68 
17.92 
17.94 
31.74 
17.25 
18.69 
25.48 

The weighted average grant date fair value of performance-based restricted shares issued in fiscal 2022 was $31.74, fiscal 2021 was $18.69 and fiscal 2020
was $17.25. We recorded compensaon expense on performance-based restricted stock of approximately $2.9 million for fiscal 2022, $2.5 million for fiscal
2021  and  $1.5  million  for  fiscal  2020,  substanally  all  of  which  was  recorded  in  selling,  general  and  administrave  (“SG&A”)  expense  in  the  Consolidated
Statements of Income. The total fair value of performance-based restricted stock units vested was $2.1 million in fiscal 2022, $0.2 million in fiscal 2021 and
$1.3 million in fiscal 2020.

Unl the performance-based restricted stock units result in the issuance of restricted stock, the amount of expense recorded each period is dependent upon
our esmate of the number of shares that will ulmately be issued and our then current common share price. Upon issuance of restricted stock, we record
compensaon  expense  over  the  remaining  vesng  period  using  the  award  date  closing  price.  Unrecognized  compensaon  expense  related  to  non-vested
restricted stock and non-vested restricted share units as of April 3, 2022 was $3.9 million and is expected to be recognized over a weighted average period of
1.2 years.

42

 
 
 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Restricted Stock Awards.  As part of their retainer, our non-employee directors receive restricted stock for their Board services. The restricted stock awards
are expensed over a one-year vesng period, based on the market value on the date of grant.

The following table represents the Board’s restricted stock acvity for fiscal 2021 and 2022:

Outstanding at beginning of fiscal 2020
Granted
Vested
Forfeited
Outstanding at end of fiscal 2020
Granted
Vested
Forfeited
Outstanding at end of fiscal 2021
Granted
Vested
Forfeited
Outstanding at end of fiscal 2022

Shares

Weighted-
Average Grant
Date Fair Value

16,704  $
16,016 
(16,704)
— 
16,016  $
13,186 
(16,016)
(1,958)
11,228  $
10,287 
(11,228)
— 
10,287  $

17.95 
21.84 
17.95 
— 
21.84 
25.59 
21.84 
25.53 
25.60 
32.80 
25.60 
— 
32.80 

Annual expense related to the value of restricted stock was $0.3 million in fiscal 2022, 2021 and 2020, and was recorded in SG&A expense in the Consolidated
Statements of Income. Unrecognized compensaon expense related to non-vested restricted stock awards as of April 3, 2022 was $0.1 million and is expected
to be recognized over a weighted average period of 0.3 years.

Note 11 — Share Repurchases

Our board of directors has authorized the repurchase of up to 1,600,000 shares of our outstanding common shares. The shares may be repurchased on the
open  market  or  in  privately  negoated  transacons  subject  to  applicable  securies  laws  and  regulaons.  Upon  repurchase  of  the  shares,  we  reduce  our
common  shares  for  the  par  value  of  the  shares  with  the  excess  applied  against  addional  paid-in  capital.  We  repurchased  240,501  common  shares  at  an
aggregate purchase price of $8.5 million during fiscal 2022. We repurchased 166,088 common shares at an aggregate purchase price of $4.1 million during
fiscal 2021. We repurchased 291,166 common shares at an aggregate purchase price of $5.9 million during fiscal 2020. As of April 3, 2022, the number of
shares available to be purchased under the share repurchase program was 311,005.

Note 12 — Profit Sharing, Employee Stock Ownership, Employee Stock Purchase and Pension Plans

Company  Sponsored  Plans.  The  majority  of  our  non-bargaining  unit  employees  are  eligible  to  parcipate  in  a  company-sponsored  profit  sharing  plan.
Contribuons  are  made  at  our  discreon  subject  to  a  maximum  amount  allowed  under  the  Internal  Revenue  Code  (“IRC”).  The  profit  sharing  plan
contribuon level for each employee depends upon date of hire, and was 2.5% or 5.0% of each employee’s eligible compensaon for fiscal 2022, 2021 and
2020. We also have in place a rerement plan covering our collecve bargaining unit employees. The rerement plan provides for a contribuon of 2.5% or
5.0%  of  each  employee’s  eligible  annual  wages  depending  on  their  hire  date.  In  addion  to  the  employer  contribuons  described  above,  both  the  profit
sharing plan and the rerement plan include a 401(k) plan that allows employees to contribute pre-tax earnings up to the maximum amount allowed under
the IRC, with an employer match of up to 5% of the employee’s eligible compensaon.

We  have  two  employee  stock  ownership  plans  (“ESOPs”),  one  covering  the  majority  of  our  non-bargaining  unit  employees  and  the  other  covering  our
collecve bargaining unit employees. Contribuons to the plan covering our non-bargaining unit employees are made at our discreon. Contribuons to both
plans  are  subject  to  a  maximum  amount  allowed  under  the  IRC,  and  were  2.5%  or  5.0%  of  each  employee’s  eligible  wages,  depending  on  each  eligible
employee’s hire date, for fiscal 2022, 2021 and 2020.

43

 
 
 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

We  have  a  nonqualified  deferred  compensaon  plan  covering  employees  who  are  classified  as  “highly  compensated  employees”  as  determined  by  IRS
guidelines for the plan year and who were hired on or before April 1, 2012. Employees who are eligible for the nonqualified deferred compensaon plan for
any plan year are not eligible for the profit sharing plan contribuon or the ESOP contribuons described above for that plan year. Our contribuon to the
nonqualified deferred compensaon plan for fiscal 2022, 2021 and 2020 was 10% of each employee’s eligible compensaon, subject to the maximum amount
allowed under the IRC.

We have an employee stock purchase plan (“ESPP”) covering substanally all of our employees. The ESPP allows employees to purchase newly-issued shares
of the Company’s common shares at a discount from market. The number of new shares issued under the ESPP was 71,692 in fiscal 2022, 88,148 in fiscal
2021 and 77,100 in fiscal 2020.

contribuon 

the 

following 

represents 

The 
(In thousands)
Non-bargaining unit employee plans:
   Profit sharing
   401(k) matching contribuons
   ESOP
Nonqualified deferred compensaon plan
Bargaining unit employee plans
ESPP - all employees

Total contribuon expense

expense 

for 

these 

company-sponsored  plans 

2022

for  fiscal 
2021

2022, 

2021 

and 

2020:

2020

$

$

1,056  $
3,122 
1,056 
1,355 
589 
549 
7,727  $

994 
2,650 
994 
1,327 
555 
556 
7,076 

$

$

631 
2,399 
631 
1,262 
481 
431 
5,835 

In  2013,  we  withdrew  from  a  collecvely  bargained  mulemployer  pension  plan  and  recorded  a  liability  for  our  share  of  the  unfunded  vested  benefits.
Payments of approximately $0.5 million per year are being made through 2034.

Note 13 — Commitments and Conngencies

Ligaon.  As of April 3, 2022, there were no material pending legal proceedings, other than ordinary roune ligaon incidental to the business, to which
we or any of our subsidiaries are a party or of which any of our property is the subject. Legal fees associated with such maers are expensed as incurred.

Asset Rerement Obligaons. We have three leases of land which contain terms that state that at the end of the lease term, we have a specified amount of
me  to  remove  the  property  and  buildings.  Including  available  lease  extensions,  these  leases  expire  in  2023,  2033  and  2044.  At  that  me,  anything  that
remains on the land becomes the property of the lessor, and the lessor has the opon to either maintain the property or remove the property at our expense.
We have not been able to reasonably esmate the fair value of the asset rerement obligaons, primarily due to the combinaon of the following factors:
certain of the leases do not expire in the near future; we have a history of extending the leases with the lessors and currently intend to do so at expiraon of
the lease periods; the lessors do not have a history of terminang leases with their tenants; and because it is more likely than not that the buildings will have
value at the end of the lease life and therefore, may not be removed by either the lessee or the lessor. Therefore, in accordance with accounng guidance
related  to  asset  rerement  and  environmental  obligaons,  we  have  not  recorded  an  asset  rerement  obligaon  as  of  April  3,  2022.  We  will  connue  to
monitor the factors surrounding the requirement to record an asset rerement obligaon and will recognize the fair value of a liability in the period in which
it is incurred and a reasonable esmate can be made.

44

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 14 — Income Taxes

The provisions for income taxes for fiscal 2022, 2021 and 2020 were as follows:

(In thousands)
Federal — current
State — current

Total current

Federal — deferred
State — deferred

Total deferred
Total provision

2022

2021

2020

$

$

14,736  $
5,202 
19,938 

(1,054)
(447)
(1,501)
18,437  $

11,169  $
4,391 
15,560 

(302)
(387)
(689)
14,871  $

8,447 
3,563 
12,010 

(976)
(445)
(1,421)
10,589 

Reconciliaons of the provisions for income taxes to the applicable federal statutory income tax rate for fiscal 2022, 2021 and 2020 are listed below.

2022

2021

2020

Statutory federal income tax
State income taxes, net of federal deducon
ESOP dividend deducon on allocated shares
Other — net
Total

21.0 %
5.6 %
(0.2)%
(0.1)%
26.3 %

21.0 %
5.9 %
(0.2)%
(0.1)%
26.6 %

The tax effects of items comprising our net deferred tax liability as of April 3, 2022 and March 28, 2021 are as follows:
(In thousands)
Deferred tax assets:

2022

2021

Trade receivables
Stock compensaon accruals
Pension withdrawal liability
Lease liability
Other

Total deferred tax assets

Deferred tax liabilies:
Inventories
Prepaid expenses
Excess of tax over book depreciaon
Intangible assets
ROU asset
Unrealized gain on interest rate swap

Total deferred tax liabilies

Net deferred tax liabilies

$

$

$

$

$

99  $

1,823 
1,250 
2,916 
3,097 
9,185  $

(1,288) $
(937)
(12,234)
(14,806)
(2,864)
(478)
(32,607) $

(23,422) $

21.0 %
5.7 %
(0.3)%
0.8 %
27.2 %

134 
1,341 
1,344 
3,191 
2,882 
8,892 

(2,815)
(864)
(11,249)
(15,269)
(3,140)
— 
(33,337)

(24,445)

As of April 3, 2022, the Company has determined that it is more likely than not that the deferred tax assets at April 3, 2022 will be realized either through
future taxable income or reversals of taxable temporary differences.

We are subject to U.S. federal income tax as well as income tax of mulple state jurisdicons. The tax years prior to our fiscal year ended March 31, 2019 are
closed to examinaon by the Internal Revenue Service, and with few excepons, state and local income tax jurisdicons.

45

 
 
 
HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 15 – Leases

Lease Obligaons. As of April 3, 2022, we were obligated under operang lease agreements for certain manufacturing facilies, warehouse space, the land on
which some of our facilies sit, vehicles and informaon technology equipment. Our leases have remaining lease terms of 1 year to 23 years, some of which
include opons to extend the lease for up to 15 years.

As  of  April  3,  2022  and  March  28,  2021,  our  operang  lease  components  with  inial  or  remaining  terms  in  excess  of  one  year  were  classified  on  the
consolidated balance sheet within right-of-use assets, short-term lease liability and long-term lease liability.

Total lease expense was $2.9 million for the twelve months ended April 3, 2022 and $2.8 million for the twelve months ended March 28, 2021, and includes
leases less than 12 months in duraon.

Other informaon related to our operang leases was as follows: 

Lease Term and Discount Rate

Weighted average remaining lease term (years)
Weighted average discount rate

Maturies of lease liabilies as of April 3, 2022 were as follows:
(In thousands)
Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Thereaer
Total
Less: Interest

Present value of lease liabilies

46

April 3, 2022

March 28, 2021

8.91
2.6 %

9.73
2.7 %

Operang Leases

1,889 
1,515 
1,450 
1,388 
1,359 
5,171 
12,772 
(1,972)
10,800 

$

$

$

HAWKINS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued)

Note 16 — Segment Informaon

We have three reportable segments: Industrial, Water Treatment and Health and Nutrion. The accounng policies of the segments are the same as those
described in the summary of significant accounng policies. Product costs and expenses for each segment are based on actual costs incurred along with cost
allocaons of shared and centralized funcons.

We evaluate performance based on operang income. Reportable segments are defined primarily by product and type of customer. Segments are responsible
for the sales, markeng and development of their products and services. Other than our Health and Nutrion segment, the segments do not have separate
customer service or purchasing funcons. There are no intersegment sales and no operang segments have been aggregated.

Reportable Segments

(In thousands)
Fiscal Year Ended April 3, 2022:

Sales
Gross profit
Selling, general, and administrave expenses
Operang income
Idenfiable assets*
       Capital expenditures
Fiscal Year Ended March 28, 2021:

Sales
Gross profit
Selling, general, and administrave expenses
Operang income
Idenfiable assets*
       Capital expenditures
Fiscal Year Ended March 29, 2020:

Sales
Gross profit
Selling, general, and administrave expenses
Operang income
Idenfiable assets*
       Capital expenditures

Industrial

Water
Treatment

Health and Nutrion

Total

$

$
$

$

$
$

$

$
$

386,938  $
59,606 
28,127 
31,479 

236,934  $
18,812  $

273,361  $
43,337 
27,033 
16,304 

181,478  $
13,713  $

275,224  $
38,936 
24,123 
14,813 

173,068  $
14,933  $

228,133  $
54,571 
31,357 
23,214 

143,889  $
8,939  $

170,004  $
46,793 
24,453 
22,340 

109,761  $
6,732  $

159,895  $
41,902 
19,801 
22,101 

63,506  $
9,160  $

159,470  $
32,343 
15,842 
16,501 

167,034  $
761  $

153,506  $
33,632 
16,398 
17,234 

166,558  $
349  $

105,079  $
20,079 
15,322 
4,757 

139,780  $
456  $

774,541 
146,520 
75,326 
71,194 

547,857 
28,512 

596,871 
123,762 
67,884 
55,878 

457,797 
20,794 

540,198 
100,917 
59,246 
41,671 

376,354 
24,549 

* Unallocated assets not included, consisng primarily of cash and cash equivalents, investments and prepaid expenses, were $19.5 million at April 3, 2022,
$14.8 million at March 28, 2021 and $13.0 million at March 29, 2020.

47

 
 
 
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluaon of Disclosure Controls and Procedures

As  of  the  end  of  the  period  covered  by  this  Annual  Report  on  Form  10-K,  we  conducted  an  evaluaon,  under  supervision  and  with  the  parcipaon  of
management, including the chief execuve officer and chief financial officer, of the effecveness of the design and operaon of our disclosure controls and
procedures pursuant to Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Based upon that evaluaon, our chief execuve officer and chief financial officer
concluded that our disclosure controls and procedures are effecve. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the
Exchange Act as controls and other procedures that are designed to ensure that informaon required to be disclosed by us in reports filed with the SEC under
the Exchange Act is recorded, processed, summarized and reported within the me periods specified in the SEC’s rules and forms. Disclosure controls and
procedures include, without limitaon, controls and procedures designed to ensure that informaon required to be disclosed by us in reports filed under the
Exchange Act is accumulated and communicated to our management, including our principal execuve and principal financial officers, or person performing
similar funcons, as appropriate to allow mely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporng

Our management is responsible for establishing and maintaining adequate internal control over financial reporng as defined in Rules 13a-15(f) and 15d-15(f)
of the Securies Exchange Act. Our internal control over financial reporng is designed to provide reasonable assurance regarding the reliability of financial
reporng and the preparaon of financial statements for external purposes in accordance with generally accepted accounng principles. Our internal control
over  financial  reporng  includes  those  policies  and  procedures  that  (1)  pertain  to  maintenance  of  records  that,  in  reasonable  detail,  accurately  and  fairly
reflect the transacons and disposions of our assets; (2) provide reasonable assurance that transacons are recorded as necessary to permit preparaon of
the  financial  statements  in  accordance  with  generally  accepted  accounng  principles,  and  that  our  receipts  and  expenditures  are  being  made  only  in
accordance  with  authorizaons  of  our  management  and  directors;  and  (3)  provide  reasonable  assurance  regarding  prevenon  or  mely  detecon  of
unauthorized acquision, use or disposion of our assets that could have a material effect on the financial statements.

Because of its inherent limitaons, internal control over financial reporng may not prevent or detect misstatements. Projecons of any evaluaon of the
effecveness of internal control over financial reporng to future periods are subject to the risk that the controls may become inadequate because of changes
in condions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effecveness of our internal control over financial reporng as of April 3, 2022, based on the criteria described in Internal Control -
Integrated Framework (2013) issued by the Commiee of Sponsoring Organizaons of the Treadway Commission. In making this assessment as of April 3,
2022, we have excluded the Texas water treatment operaons acquired from NAPCO Chemical Company, Inc. on December 30, 2021. The financial statements
of this business comprise less than 4% of total assets and less than 1% of total revenues in our consolidated financial amounts as of and for the year ended
April 3, 2022. We have excluded this business because we have not had sufficient me to make an assessment of its internal controls using the COSO criteria
in accordance with Secon 404 of the Sarbanes-Oxley Act of 2002. In excluding this business from our assessment, we have considered the “Frequently Asked
Quesons” as set forth by the office of the Chief Accountant and the Division of Corporate Finance on June 24, 2004, as revised on September 24, 2007,
which acknowledges that it may not be possible to conduct an assessment of an acquired business’s internal control over financial reporng in the period
between the consummaon date and the date of management’s assessment and contemplates that such business would be excluded from management’s
assessment in the year of acquision. Based on this assessment, management believes that our internal control over financial reporng was effecve as of
April 3, 2022.

Our independent registered public accounng firm has issued an aestaon report on our internal control over financial reporng for April 3, 2022 which is
included in the Report of Independent Registered Public Accounng Firm in Item 8 of this Annual Report on 10-K.

Changes in Internal Control Procedures

There was no change in our internal control over financial reporng during the fourth quarter of fiscal 2022 that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporng.

48

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.

49

Certain informaon required by Part III is incorporated by reference from Hawkins’ definive Proxy Statement for the Annual Meeng of Shareholders to be
held on August 3, 2022 (the “2022 Proxy Statement”). Except for those porons specifically incorporated in this Form 10-K by reference to the 2022 Proxy
Statement, no other porons of the 2022 Proxy Statement are deemed to be filed as part of this Form 10-K.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Informaon about our Execuve Officers

Our current execuve officers, their ages and offices held, are set forth below:
Name
Patrick H. Hawkins
Jeffrey P. Oldenkamp
Richard G. Erstad
Drew M. Grahek
Douglas A. Lange
David J. Mangine
Theresa R. Moran
Shirley A. Rozeboom

Office
Chief Execuve Officer and President
Execuve Vice President, Chief Financial Officer and Treasurer
Vice President, General Counsel and Secretary
Vice President — Operaons
Vice President — Water Treatment Group
Vice President — Industrial Group
Vice President — Purchasing, Logiscs and Sales Support
Vice President — Health and Nutrion

Age
51
49
58
52
52
64
59
60

Patrick H. Hawkins has been our Chief Execuve Officer and President and member of our board since 2011. Mr. Hawkins has held the posion of President
since 2010. He joined the Company in 1992 and served as the Business Director - Food and Pharmaceucals, a posion he held from 2009 to 2010. Previously
he served as Business Manager - Food and Co-Extrusion Products from 2007 to 2009 and Sales Representave - Food Ingredients from 2002 to 2007. He
previously served the Company in various other capacies, including Plant Manager, Quality Director and Technical Director.

Jeffrey P. Oldenkamp has been our Execuve Vice President, Chief Financial Officer and Treasurer since October 2021. Mr. Oldenkamp joined Hawkins in May
2017  and  assumed  the  role  of  Chief  Financial  Officer,  Vice  President  and  Treasurer  in  June  2017.  Prior  to  joining  Hawkins,  Mr.  Oldenkamp  was  with  MTS
Systems Corporaon, a supplier of high-performance test systems and sensors, where he served as Chief Financial Officer from 2015 to May 2017 and as Vice
President of Finance for the MTS Test business from 2014 to 2015, and with Nilfisk-Advance, Inc., a global manufacturer of professional cleaning equipment,
where he served as Americas Operaons Chief Financial Officer and Vice President from 2012 to 2014.

Richard G. Erstad has been our Vice President, General Counsel and Secretary since 2008. Mr. Erstad was General Counsel and Secretary of BUCA, Inc., a
restaurant company, from 2005 to 2008. Mr. Erstad had previously been an aorney with the corporate group of Faegre & Benson LLP, a law firm, from 1996
to 2005, where his pracce focused on securies law and mergers and acquisions. He is a member of the Minnesota Bar.

Drew M. Grahek has been our Vice President - Operaons since September 2018.  Prior to joining Hawkins, Mr. Grahek was Adjunct Faculty at the University
of Minnesota College of Connuing Educaon and a Business Administrator in the Archdiocese of St. Paul and Minneapolis from June 2017 to June 2018;
Director of Service Operaons and Supply Chain with Ulta Beauty, Inc. from April 2016 to June 2017; and Director of Stores with Field and Stream Outdoor
Stores, a division of Dick’s Sporng Goods, Inc. from July 2015 to April 2016.  Previously, he spent a total of 23 years at Target Corporaon in a variety of
operaons, merchandising and property management posions. 

Douglas A. Lange has been our Vice President - Water Treatment Group since June 2020. Prior to aaining this posion, Mr. Lange served the Company as
General Manager and Product Development Manager for the Water Treatment Group aer joining the company in January 2019. Prior to joining the
Company, Mr. Lange was with H.B. Fuller Company, a global supplier of special adhesives, where he served as Global Markeng Manager and Product
Manager for specialty markets in electronics and wood products from 2011 to January 2019. Mr. Lange served in various roles in the specialty adhesives
market for a total of 21 years prior to joining the Company.

50

David J. Mangine has been our Vice President - Industrial Group since 2021. Mr. Mangine served as the Industrial Sales Manager from 2011 to 2021, aer
joining Hawkins in 2000 as an Account Manager.

Theresa R. Moran has been our Vice President - Purchasing, Logiscs and Sales Support since June 2017. Since joining the Company in 1981, Ms. Moran has
served the Company in a variety of posions, including Administraon Operaons Manager from 1999 to 2007, Director - Process Improvement from 2007
unl 2010 and Vice President - Quality and Support from 2010 to June 2017.

Shirley A. Rozeboom was named Vice President - Health and Nutrion in April 2019. Ms. Rozeboom had held the posion of Senior Vice President of Sales for
Stauber since 2012. Previously, she held the posions of Director of Sales at Stauber from 2008 to 2012 and Account Execuve from 2000 to 2008.

The disclosure under the headings “Elecon of Directors,” “Corporate Governance,” and, if applicable, “Delinquent Secon 16(a) Reports” of the 2022 Proxy
Statement is incorporated herein by reference.

We have adopted a Code of Business Conduct and Ethics that applies to all of our directors and employees, including our principal execuve officer, principal
financial officer, controller and other persons performing similar funcons. We have posted the Code of Business Conduct and Ethics on our website located
at  www.hawkinsinc.com.  Hawkins’  Code  of  Business  Conduct  and  Ethics  is  also  available  in  print  to  any  shareholder  who  requests  it  in  wring  from  our
Corporate  Secretary.  We  intend  to  post  on  our  website  any  amendment  to,  or  waiver  from,  a  provision  of  our  Code  of  Business  Conduct  and  Ethics  that
applies  to  our  principal  execuve  officer,  principal  financial  officer,  controller  and  other  persons  performing  similar  funcons  within  four  business  days
following the date of such amendment or waiver. We are not including the informaon contained on our website as part of, or incorporang it by reference
into, this report.

ITEM 11. EXECUTIVE COMPENSATION

The disclosure under the heading “Compensaon of Execuve Officers and Directors” in the 2022 Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The disclosure under the headings “Security Ownership of Management and Beneficial Ownership” and “Equity Compensaon Plan Informaon” in the 2022
Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The disclosure under the headings “Elecon of Directors” and “Related Party Transacons” of the 2022 Proxy Statement is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The disclosure under the heading “Independent Registered Public Accounng Firm’s Fees” of the 2022 Proxy Statement is incorporated herein by reference.

51

 
 
 
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1)

FINANCIAL STATEMENTS OF THE COMPANY

PART IV

The following financial statements of Hawkins, Inc. are filed as part of this Annual Report on Form 10-K:

Reports of Independent Registered Public Accounng Firms.

Consolidated Balance Sheets at April 3, 2022 and March 28, 2021.

Consolidated Statements of Income for the fiscal years ended April 3, 2022, March 28, 2021 and March 29, 2020.

Consolidated Statements of Comprehensive Income for the fiscal years ended April 3, 2022, March 28, 2021 and March 29, 2020.

Consolidated Statements of Shareholders’ Equity for the fiscal years ended April 3, 2022, March 28, 2021, and March 29, 2020.

Consolidated Statements of Cash Flows for the fiscal years ended April 3, 2022, March 28, 2021, and March 29, 2020.

Notes to Consolidated Financial Statements.

(a)(2)

FINANCIAL STATEMENT SCHEDULES OF THE COMPANY

The addional financial data listed below is included as a schedule to this Annual Report on Form 10-K and should be read in conjuncon
with the financial statements presented in Part II, Item 8. Schedules not included with this addional financial data have been omied
because they are not required, or the required informaon is included in the financial statements or the notes.

The following financial statement schedule for the fiscal years 2022, 2021 and 2020.

Schedule II — Valuaon and Qualifying Accounts.

(a)(3)

EXHIBITS

52

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Exhibit Index

Exhibit

Descripon

3.1     Restated Arcles of Incorporaon. (1)

3.2     Amended and Restated By-Laws. (2)

4.1 

Descripon of Securies. (3)

10.1*    Hawkins, Inc. 2010 Omnibus Incenve Plan. (4)

10.2*    Hawkins, Inc. Execuve Severance Plan. (5)

10.3*

Employee Stock Purchase Plan, as amended. (6)

10.4 

Second Amended and Restated Credit Agreement, dated as of March 31, 2022, among the
Company, U.S. Bank Naonal Associaon, and certain financial instuons. (7)

10.5*

Hawkins, Inc. 2019 Equity Incenve Plan. (8)

10.6*

Form of Performance Stock Unit Award Noce and Restricted Stock Agreement under the
Company’s 2019 Equity Incenve Plan. (9)

10.7*

Nine Year LTI with Shirley Rozeboom. (10)

16.1 

Correspondence from KPMG LLP dated February 11, 2020. (11)

21 

Subsidiaries of the registrant.

23.1     Consent of Grant Thornton LLP.

23.2 

24.1 

31.1 

Consent of KPMG LLP.

Powers of Aorney.

Cerficaon by Chief Cerficaon by Chief Execuve Officer pursuant to Rule 13a-14(a) of the
Exchange Act. Officer pursuant to Rule 13a-14(a) of the Exchange Act.

Method of Filing

Incorporated by Reference

   Incorporated by Reference

Incorporated by Reference

   Incorporated by Reference

   Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Filed Electronically

   Filed Electronically

Filed Electronically

Filed Electronically

Filed Electronically

31.2     Cerficaon by Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.

   Filed Electronically

32.1     Secon 1350 Cerficaon by Chief Execuve Officer.

32.2     Secon 1350 Cerficaon by Chief Financial Officer.

101 

Financial statements from the Annual Report on Form 10-K of Hawkins, Inc. for the period
ended April 3, 2022, filed with the SEC on May 18, 2022, formaed in Inline Extensible Business
Reporng Language (iXBRL): (i) the Consolidated Balance Sheets at April 3, 2022 and March 28,
2021 (ii) the Consolidated Statements of Income for the fiscal years ended April 3, 2022, March
28, 2021, and March 29, 2020, (iii) the Consolidated Statements of Comprehensive Income for
the fiscal years ended April 3, 2022, March 28, 2021, and March 29, 2020, (iv) the Consolidated
Statements of Shareholders’ Equity for the fiscal years ended April 3, 2022, March 28, 2021,
and March 29, 2020, (v) Consolidated Statements of Cash Flows for the fiscal years ended April
3, 2022, March 28, 2021, and March 29, 2020, and (iv) Notes to Consolidated Financial
Statements.

   Filed Electronically

   Filed Electronically

Filed Electronically

104 

Cover Page Interacve Data File (embedded within the inline XBRL document)

Filed Electronically

*

Management contract or compensaon plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K.

 
  
  
  
  
  
(1)

Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated February 26, 2021 and filed March 2, 2021.

(2)

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 28, 2009 and filed November 3, 2009.

(3)

Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed June 2,2021.

(4)

Incorporated by reference to Exhibit 10.1 to the Company’s Registraon Statement on Form S-8 filed June 6, 2011.

(5)

Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended July 3, 2011.

(6)

Incorporated by reference to Exhibit 99.1 to the Company’s Registraon Statement on Form S-8 filed November 2, 2018.

(7)

Incorporated by reference to Exhibit 10.1 to the Company’s Registraon Statement on Form 8-K filed December 3, 2018.

(8)

Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2019.

(9)

Incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed May 20,2020.

(10) Incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed June 2,2021.

(11) Incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K dated February 11, 2020.

ITEM 16. FORM 10-K SUMMARY

None

Pursuant to the requirements of Secon 13 or 15(d) of the Securies Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Dated:

May 18, 2022

  HAWKINS, INC.

By  

/s/  Patrick H. Hawkins
Patrick H. Hawkins
Chief Execuve Officer and President

Pursuant to the requirements of the Securies Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the
capacies and on the dates indicated.
Signature

Date

Title

/s/ Patrick H. Hawkins
Patrick H. Hawkins

/s/ Jeffrey P. Oldenkamp
Jeffrey P. Oldenkamp

*
James A. Faulconbridge

*
Mary J. Schumacher

*
Jeffrey E. Spethmann

*
Daniel J. Stauber

*
Yi "Faith" Tang

*
James T. Thompson

*
Jeffrey L. Wright

Chief Execuve Officer, President and Director
(principal execuve officer)

Execuve Vice President and Chief Financial Officer
(principal financial officer and principal accounng officer)

Director

Director

Director

Director

Director

Director

Director

May 18, 2022

May 18, 2022

May 18, 2022

May 18, 2022

May 18, 2022

May 18, 2022

May 18, 2022

May 18, 2022

May 18, 2022

* Patrick H. Hawkins, by signing his name hereto, does hereby sign this document on behalf of each of the above-named directors of the registrant pursuant
to Powers of Aorney duly executed by such persons.

By:  /s/ Patrick H. Hawkins
Patrick H. Hawkins
Aorney-in-fact

 
 
 
 
 
SCHEDULE II

HAWKINS, INC.

VALUATION AND QUALIFYING ACCOUNTS
FOR THE FISCAL YEARS ENDED April 3, 2022, March 28, 2021 AND March 29, 2020

Descripon

Reserve deducted from asset to which it applies:
Fiscal Year Ended April 3, 2022:
       Allowance for credit losses
Fiscal Year Ended March 28, 2021:
       Allowance for credit losses
Fiscal Year Ended March 29, 2020:
       Allowance for credit losses

$

$

$

Balance at
Beginning
of Year

Charged to
Costs and
Expenses

Addions

Charged to
Other
Accounts

(In thousands)

Deducons
Write-Offs

Balance at
End of  Year

497  $

784  $

620  $

—  $

—  $

448  $

—  $

—  $

—  $

(130) $

(287) $

(284) $

367 

497 

784 

 
 
 
 
 
 
 
 
 
Subsidiaries of Hawkins, Inc.

Exhibit 21

Subsidiary
Stauber Holdings, Inc.
Stauber Performance Ingredients, Inc., a subsidiary of Stauber Holdings, Inc.
NAPCO Chemical Company, Inc.

State of Organizaon
Minnesota
Minnesota
Minnesota

Consent of Independent Registered Public Accounng Firm

Exhibit 23.1

The Board of Directors
Hawkins, Inc.:

We have issued our reports dated May 18, 2022, with respect to the consolidated financial statements and internal control over financial reporng included
in the Annual Report of Hawkins, Inc. on Form 10-K for the year ended April 3, 2022. We consent to the incorporaon by reference of said reports in the
Registraon Statements of Hawkins, Inc. on Forms S-8 (File Nos. 333-87582, 333-123080, 333-172761, 333-174735, 333-228128 and 333-234432).

/s/ Grant Thornton LLP
Minneapolis, Minnesota
May 18, 2022

Consent of Independent Registered Public Accounng Firm

Exhibit 23.2

The Board of Directors
Hawkins, Inc.:

We consent to the incorporaon by reference in the registraon statements (No. 333-87582, 333-123080, 333-172761, 333-174735, 333-228128, 333-
234432) on Form S-8 of our report dated May 20, 2020, except as to the stock split and par value adjustment as described in Note 1, which are as of June 2,
2021, with respect to the consolidated financial statements of Hawkins, Inc.

/s/ KPMG LLP
Minneapolis, Minnesota
May 18, 2022

HAWKINS, INC.

Power of Aorney

The undersigned director of Hawkins, Inc., a Minnesota corporaon (the “Company”), does hereby make, constute and appoint Patrick H. Hawkins and

Jeffrey P. Oldenkamp, and either of them, the undersigned’s true and lawful aorneys-in-fact and agents, with power of substuon and resubstuon, for
the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director of the Company to an Annual
Report on Form 10-K for the fiscal year ended April 3, 2022 or other applicable form, and any amendments thereto, to be filed by the Company with the U.S.
Securies and Exchange Commission, Washington, D.C. (the “SEC”), and to file the same with all exhibits thereto and other supporng documents in
connecon therewith with the SEC, granng unto said aorneys-in-fact and agents, and each of them, full power and authority to do and to perform any and
all acts necessary or incidental to the performance and execuon of the powers herein expressly granted.

IN WITNESS WHEREOF, the undersigned has executed this Power of Aorney as of the date set forth below.

/s/ James A. Faulconbridge
James A. Faulconbridge
April 27, 2022

HAWKINS, INC.

Power of Aorney

The undersigned director of Hawkins, Inc., a Minnesota corporaon (the “Company”), does hereby make, constute and appoint Patrick H. Hawkins and

Jeffrey P. Oldenkamp, and either of them, the undersigned’s true and lawful aorneys-in-fact and agents, with power of substuon and resubstuon, for
the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director of the Company to an Annual
Report on Form 10-K for the fiscal year ended April 3, 2022 or other applicable form, and any amendments thereto, to be filed by the Company with the U.S.
Securies and Exchange Commission, Washington, D.C. (the “SEC”), and to file the same with all exhibits thereto and other supporng documents in
connecon therewith with the SEC, granng unto said aorneys-in-fact and agents, and each of them, full power and authority to do and to perform any and
all acts necessary or incidental to the performance and execuon of the powers herein expressly granted.

IN WITNESS WHEREOF, the undersigned has executed this Power of Aorney as of the date set forth below.

/s/ Mary J. Schumacher
Mary J. Schumacher
April 27, 2022

HAWKINS, INC.

Power of Aorney

The undersigned director of Hawkins, Inc., a Minnesota corporaon (the “Company”), does hereby make, constute and appoint Patrick H. Hawkins and

Jeffrey P. Oldenkamp, and either of them, the undersigned’s true and lawful aorneys-in-fact and agents, with power of substuon and resubstuon, for
the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director of the Company to an Annual
Report on Form 10-K for the fiscal year ended April 3, 2022 or other applicable form, and any amendments thereto, to be filed by the Company with the U.S.
Securies and Exchange Commission, Washington, D.C. (the “SEC”), and to file the same with all exhibits thereto and other supporng documents in
connecon therewith with the SEC, granng unto said aorneys-in-fact and agents, and each of them, full power and authority to do and to perform any and
all acts necessary or incidental to the performance and execuon of the powers herein expressly granted.

IN WITNESS WHEREOF, the undersigned has executed this Power of Aorney as of the date set forth below.

/s/ Jeffrey E. Spethmann
Jeffrey E. Spethmann
April 27, 2022

HAWKINS, INC.

Power of Aorney

The undersigned director of Hawkins, Inc., a Minnesota corporaon (the “Company”), does hereby make, constute and appoint Patrick H. Hawkins and

Jeffrey P. Oldenkamp, and either of them, the undersigned’s true and lawful aorneys-in-fact and agents, with power of substuon and resubstuon, for
the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director of the Company to an Annual
Report on Form 10-K for the fiscal year ended April 3, 2022 or other applicable form, and any amendments thereto, to be filed by the Company with the U.S.
Securies and Exchange Commission, Washington, D.C. (the “SEC”), and to file the same with all exhibits thereto and other supporng documents in
connecon therewith with the SEC, granng unto said aorneys-in-fact and agents, and each of them, full power and authority to do and to perform any and
all acts necessary or incidental to the performance and execuon of the powers herein expressly granted.

IN WITNESS WHEREOF, the undersigned has executed this Power of Aorney as of the date set forth below.

/s/ Daniel J. Stauber
Daniel J. Stauber
April 27, 2022

HAWKINS, INC.

Power of Aorney

The undersigned director of Hawkins, Inc., a Minnesota corporaon (the “Company”), does hereby make, constute and appoint Patrick H. Hawkins and

Jeffrey P. Oldenkamp, and either of them, the undersigned’s true and lawful aorneys-in-fact and agents, with power of substuon and resubstuon, for
the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director of the Company to an Annual
Report on Form 10-K for the fiscal year ended April 3, 2022 or other applicable form, and any amendments thereto, to be filed by the Company with the U.S.
Securies and Exchange Commission, Washington, D.C. (the “SEC”), and to file the same with all exhibits thereto and other supporng documents in
connecon therewith with the SEC, granng unto said aorneys-in-fact and agents, and each of them, full power and authority to do and to perform any and
all acts necessary or incidental to the performance and execuon of the powers herein expressly granted.

IN WITNESS WHEREOF, the undersigned has executed this Power of Aorney as of the date set forth below.

/s/ Yi “Faith” Tang
Yi “Faith” Tang
April 27, 2022

HAWKINS, INC.

Power of Aorney

The undersigned director of Hawkins, Inc., a Minnesota corporaon (the “Company”), does hereby make, constute and appoint Patrick H. Hawkins and

Jeffrey P. Oldenkamp, and either of them, the undersigned’s true and lawful aorneys-in-fact and agents, with power of substuon and resubstuon, for
the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director of the Company to an Annual
Report on Form 10-K for the fiscal year ended April 3, 2022 or other applicable form, and any amendments thereto, to be filed by the Company with the U.S.
Securies and Exchange Commission, Washington, D.C. (the “SEC”), and to file the same with all exhibits thereto and other supporng documents in
connecon therewith with the SEC, granng unto said aorneys-in-fact and agents, and each of them, full power and authority to do and to perform any and
all acts necessary or incidental to the performance and execuon of the powers herein expressly granted.

IN WITNESS WHEREOF, the undersigned has executed this Power of Aorney as of the date set forth below.

/s/ James T. Thompson
James Thompson
April 27, 2022

HAWKINS, INC.

Power of Aorney

The undersigned director of Hawkins, Inc., a Minnesota corporaon (the “Company”), does hereby make, constute and appoint Patrick H. Hawkins and

Jeffrey P. Oldenkamp, and either of them, the undersigned’s true and lawful aorneys-in-fact and agents, with power of substuon and resubstuon, for
the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director of the Company to an Annual
Report on Form 10-K for the fiscal year ended April 3, 2022 or other applicable form, and any amendments thereto, to be filed by the Company with the U.S.
Securies and Exchange Commission, Washington, D.C. (the “SEC”), and to file the same with all exhibits thereto and other supporng documents in
connecon therewith with the SEC, granng unto said aorneys-in-fact and agents, and each of them, full power and authority to do and to perform any and
all acts necessary or incidental to the performance and execuon of the powers herein expressly granted.

IN WITNESS WHEREOF, the undersigned has executed this Power of Aorney as of the date set forth below.

/s/ Jeffrey L. Wright
Jeffrey L. Wright
April 27, 2022

CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

Exhibit 31.1

CERTIFICATIONS

I, Patrick H. Hawkins, cerfy that:

1.

I have reviewed this annual report on Form 10-K of Hawkins, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other financial informaon included in this report, fairly present in all material respects the

financial condion, results of operaons and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other cerfying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in

Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporng (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,

to ensure that material informaon relang to the registrant, including its consolidated subsidiaries, is made known to us by others within
those enes, parcularly during the period in which this report is being prepared;

b) designed such internal control over financial reporng, or caused such internal control over financial reporng to be designed under our

supervision, to provide reasonable assurance regarding the reliability of financial reporng and the preparaon of financial statements for
external purposes in accordance with generally accepted accounng principles;

c)

evaluated the effecveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effecveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluaon; and

d) disclosed in this report any change in the registrant’s internal control over financial reporng that occurred during the registrant’s most

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporng; and

5. The registrant’s other cerfying officer and I have disclosed, based on our most recent evaluaon of internal control over financial reporng, to the

registrant’s auditors and the audit commiee of the registrant’s board of directors (or persons performing the equivalent funcons):

a)

all significant deficiencies and material weaknesses in the design or operaon of internal control over financial reporng which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial informaon; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal

control over financial reporng.

Date: May 18, 2022

/s/ Patrick H. Hawkins
Patrick H. Hawkins
Chief Execuve Officer and President

 
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

Exhibit 31.2

CERTIFICATIONS

I, Jeffrey P. Oldenkamp, cerfy that:

1.

I have reviewed this annual report on Form 10-K of Hawkins, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other financial informaon included in this report, fairly present in all material respects the

financial condion, results of operaons and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other cerfying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in

Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporng (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,

to ensure that material informaon relang to the registrant, including its consolidated subsidiaries, is made known to us by others within
those enes, parcularly during the period in which this report is being prepared;

b) designed such internal control over financial reporng, or caused such internal control over financial reporng to be designed under our

supervision, to provide reasonable assurance regarding the reliability of financial reporng and the preparaon of financial statements for
external purposes in accordance with generally accepted accounng principles;

c)

evaluated the effecveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effecveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluaon; and

d) disclosed in this report any change in the registrant’s internal control over financial reporng that occurred during the registrant’s most

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporng; and

5. The registrant’s other cerfying officer and I have disclosed, based on our most recent evaluaon of internal control over financial reporng, to the

registrant’s auditors and the audit commiee of the registrant’s board of directors (or persons performing the equivalent funcons):

a)

all significant deficiencies and material weaknesses in the design or operaon of internal control over financial reporng which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial informaon; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal

control over financial reporng.

Date: May 18, 2022

/s/ Jeffrey P. Oldenkamp
Jeffrey P. Oldenkamp
Execuve Vice President and Chief Financial Officer

 
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1

In connecon with the Annual Report of Hawkins, Inc. (the Company) on Form 10-K for the period ended April 3, 2022, as filed with the Securies and
Exchange Commission on the date hereof (the Report), I, Patrick H. Hawkins, Chief Execuve Officer and President of the Company, cerfy, pursuant to 18
U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of secon 13(a) or 15(d) of the Securies Exchange Act of 1934;

and

(2) The informaon contained in the Report fairly presents, in all material respects, the financial condion and results of operaons of the Company.

/s/ Patrick H. Hawkins
Patrick H. Hawkins
Chief Execuve Officer and President
May 18, 2022

 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

In connecon with the Annual Report of Hawkins, Inc. (the Company) on Form 10-K for the period ended April 3, 2022, as filed with the Securies and
Exchange Commission on the date hereof (the Report), I, Jeffrey P. Oldenkamp, Chief Financial Officer of the Company, cerfy, pursuant to 18 U.S.C. § 1350, as
adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of secon 13(a) or 15(d) of the Securies Exchange Act of 1934;

and

(2) The informaon contained in the Report fairly presents, in all material respects, the financial condion and results of operaons of the Company.

/s/ Jeffrey P. Oldenkamp
Jeffrey P. Oldenkamp
Execuve Vice President and Chief Financial Officer
May 18, 2022