Hawkins Inc. Annual Report 2023

Plain-text annual report

☑ ☐ 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 2, 2023 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 ☑ If securies are registered pursuant to Secon 12(b) of the Act, indicate by check mark whether the ﬁnancial statements of the registrant included in the ﬁling reﬂect the correcon of an error to previously issued ﬁnancial statements. ☐ Indicate by check mark whether any of those error correcons are restatements that required a recovery analysis of incenve-based compensaon received by any of the registrant’s execuve oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐ The aggregate market value of vong stock held by non-aﬃliates of the Registrant on October 2, 2022 (the last business day of the Registrant’s most recently completed second ﬁscal quarter) was approximately $787.1 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 12, 2023, the Registrant had 21,003,799 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 2, 2023, 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 2024" means our ﬁscal year ending March 31, 2024, “ﬁscal 2023” means our ﬁscal year ended April 2, 2023, “ﬁscal 2022” means our ﬁscal year ended April 3, 2022, and “ﬁscal 2021” means our ﬁscal year ended March 28, 2021. ii Hawkins, Inc. Annual Report on Form 10-K For the Fiscal Year Ended April 2, 2023 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 20 21 44 44 44 44 45 46 46 46 46 47 49 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), certain food-grade and pharmaceucal products, including liquid phosphates, lactates and other blended products, and agricultural 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; and • Performs custom blending of chemicals according to customer formulas and speciﬁcaons. 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 typical planng season of March through June given the regions of the country we serve. 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 39 warehouses supplying products and services to customers primarily in the central United States, throughout the Mississippi River watershed and along the southern United States from Texas to Florida. 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 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, and processing and blending, posions this group as a one-stop ingredient soluons provider to its customers. The group also follows rigorous quality control and compliance processes to provide reliable, high-quality products 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 have also 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 2023, 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 laws and regulaons relang to 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 250 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 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 2, 2023, we had 851 employees across the United States, of which 846 were full-me employees,. Approximately 40% of our employees were female or racially and ethnically diverse, and approximately 11% 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 ("SEC"). 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 carefully consider 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, derailments, 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 potenal for 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. Over the last few years, unprecedented congeson in ocean shipping adversely impacted the reliability of our imported raw materials, and transport driver shortages caused extended lead mes for domesc shipments. In addion, rail shipments can be unreliable, with signiﬁcant delays in service and increased costs. The impacts of recent high-proﬁle derailments could further degrade service levels and increase 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, derailments, embargoes 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, 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 2024 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, safety and land use 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; land use, ﬁre code and zoning; 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 and restricons on the locaons and operaons of chemical facilies. 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 250 commercial vehicles, primarily in our Water Treatment Group, which are highly regulated, including by the 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 Many of our products, parcularly 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 many of our products, but our food, pharmaceucal, pescide and health and nutrion products in parcular, 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, which may include one or more of the following: • stopping the sale of products, • requirements for the reformulaon of certain or all products to meet new standards, • 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 ("U.S. Bank") 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 2, 2023, we had $112.0 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 35 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 (3) Dupo, IL (3) (4) St. Paul, MN (3) (5) Rosemount, MN (3) St. Paul, MN (3) (5) Camanche, IA (3) Memphis, TN (3) Apopka, FL (3) Fayeeville, TN (3) Sulphur, LA (3) Rail/Barge Access Rail Rail Rail Rail/Barge Rail Rail/Barge Rail/Barge Rail/Barge Rail Approx. Square Feet 50,000 56,000 107,000 177,000 121,000 64,000 32,000 153,000 59,000 95,000 41,000 32,000 54,000 30,000 (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 2025. (3) This is a manufacturing and/or distribuon facility owned by the Company. This facility includes outside storage tanks for the storage of liquid bulk chemicals, as well as smaller tanks for storing and mixing chemicals. (4) The land for this facility is leased from a third party. The lease expires in May 2024, with automac one-year renewal periods. (5) The land for these facilies is leased from the Port Authority of the City of St. Paul, Minnesota. One of the applicable leases runs through 2033, one runs unl 2029, and one runs through 2044 including all available lease extensions. 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 12, 2023, shares of our common shares were held by approximately 367 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 1, 2018, 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 2023 and 2022. 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 2022, ﬁled with the SEC on May 18, 2022. 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 2022 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 2023 include: • • • Sales of $935.1 million, a 21% increase from ﬁscal 2022; Gross proﬁt of $165.1 million, an increase of $18.6 million, or 13% from ﬁscal 2022; and Diluted earnings per share (EPS) of $2.86, an increase of $0.42, or 17%, from ﬁscal 2022. 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. We disclose the percentage of our overall sales that consist of sales of bulk commodity products as these products are generally distributed and we do not add signiﬁcant value to these products in comparison to our non-bulk products. Sales of these products are generally highly compeve and price sensive. As a result, bulk commodity products generally have our lowest margins. Factors Aﬀecng Comparability of Results Asset Sales and Business Acquisions On March 30, 2023, we sold certain assets in our Industrial segment related to our consumer bleach packaging business for $7 million. These assets were not deemed core to our Industrial segment operaons. The assets sold included plant equipment, inventory, and intangible assets, all related to the packaging of bleach. We realized a gain of $3 million on this sale, which has been recorded as a reducon to selling, general and administrave expenses. In the fourth quarter of ﬁscal 2022, 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. 14 In the third quarter of ﬁscal 2022, 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. In the second quarter of ﬁscal 2022, 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. The aggregate annual revenue of these three businesses acquired in ﬁscal 2022 totaled approximately $17 million, as determined using the applicable twelve-month period preceding each respecve acquision date. 15 Results of Operaons The following table sets forth certain items from our statement of income as a percentage of sales for ﬁscal 2023 and 2022: Fiscal 2023 Fiscal 2022 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 2023 Compared to Fiscal 2022 Sales 100.0 % (82.3)% 17.7 % (8.3)% 9.4 % (0.6)% — % 8.8 % (2.4)% 6.4 % 100.0 % (81.1)% 18.9 % (9.7)% 9.2 % (0.2)% — % 9.0 % (2.3)% 6.7 % Sales were $935.1 million for ﬁscal 2023, an increase of $160.6 million, or 21%, from sales of $774.5 million for ﬁscal 2022, driven primarily by increased selling prices. Fiscal 2022 included an addional week, which we esmated to add approximately $17.5 million in addional sales in that year. Industrial Segment. Industrial segment sales increased $83.9 million, or 22%, to $470.8 million for ﬁscal 2023, as compared to $386.9 million for ﬁscal 2022. Sales of bulk commodity products in the Industrial segment were approximately 16% of sales dollars in both ﬁscal 2023 and ﬁscal 2022. The increase in sales was driven by increased selling prices on many of our products driven primarily by higher costs on many of our raw materials, while total sales volumes were down approximately 11%. Average selling prices increased 36% over the prior year, in part due to higher raw material costs as well as product mix changes. Fiscal 2022 included an addional week, which we esmated to be approximately $10.0 million in addional sales in our Industrial segment in that year. Water Treatment Segment. Water Treatment segment sales increased $76.8 million, or 34%, to $304.9 million for ﬁscal 2023, as compared to $228.1 million for ﬁscal 2022. Sales of bulk commodity products in the Water Treatment segment were approximately 9% of sales dollars in both ﬁscal 2023 and ﬁscal 2022. Sales increased as a result of increased selling prices on many of our products driven by higher costs on many of our raw materials, with average selling prices increasing 28% over the prior year. In addion, a 4% increase in sales volume, due to the added sales from acquired businesses, contributed to the year-over-year increase in sales. Fiscal 2022 included an addional week, which we esmated to add approximately $3.9 million in addional sales in our Water Treatment segment in that year. Health and Nutrion Segment. Health and Nutrion segment sales decreased $0.1 million, or less than 1%, to $159.4 million for ﬁscal 2023, as compared to $159.5 million for ﬁscal 2022. Sales of our manufactured products increased 40% year over year, but were oﬀset by a 12% decline in sales of our specialty distributed products. Fiscal 2022 included an addional week, which we esmated to add approximately $3.6 million in addional sales in our Health and Nutrion segment in that year. Gross Proﬁt Gross proﬁt increased $18.6 million, or 13%, to $165.1 million, or 18% of sales, for ﬁscal 2023, from $146.5 million, or 19% of sales, for ﬁscal 2022. During ﬁscal 2023, the LIFO reserve increased, and gross proﬁts decreased, by $18.5 million, primarily due to rising raw material costs. In ﬁscal 2022, the LIFO reserve increased, and gross proﬁts decreased, by $15.8 million, primarily due to rising raw material costs. Gross proﬁt increased due to increased revenue, parally oﬀset by the unfavorable year-over-year impact of the increased LIFO reserve. Fiscal 2022 included an addional week, which we esmated to add approximately $3.6 million in addional gross proﬁt in that year. 16 Industrial Segment. Gross proﬁt for the Industrial segment increased $8.5 million, or 14%, to $68.1 million, or 14% of sales, for ﬁscal 2023, from $59.6 million, or 15% of sales, for ﬁscal 2022. During ﬁscal 2023, the LIFO reserve increased, and gross proﬁts decreased, by $12.3 million, primarily due to rising raw material costs. In ﬁscal 2022, the LIFO reserve increased, and gross proﬁts decreased, by $10.4 million, primarily due to rising raw material costs. Gross proﬁt increased as a result of the increase in sales, parally oﬀset by the unfavorable year-over-year impact of the increased LIFO reserve. Fiscal 2022 included an addional week, which we esmated to add approximately $1.9 million in addional gross proﬁt in our Industrial segment in that year. Water Treatment Segment. Gross proﬁt for the Water Treatment segment increased $12.6 million, or 23%, to $67.2 million, or 22% of sales, for ﬁscal 2023, from $54.6 million, or 24% of sales, for ﬁscal 2022. During ﬁscal 2023, the LIFO reserve increased, and gross proﬁts decreased, by $6.2 million, primarily due to rising raw material costs. During ﬁscal 2022, the LIFO reserve increased, and gross proﬁt decreased, by $5.4 million, primarily due to rising raw material costs. Gross proﬁt increased as a result of the increase in sales. Fiscal 2022 included an addional week, which we esmated to add approximately $1.0 million in addional gross proﬁt in our Water Treatment segment in that year. Health and Nutrion Segment. Gross proﬁt for our Health and Nutrion segment decreased $2.5 million, or 8%, to $29.8 million, or 19% of sales, for ﬁscal 2023, from $32.3 million, or 20% of sales, for ﬁscal 2022. Gross proﬁt decreased as a result of a product mix shi. Fiscal 2022 included an addional week, which we esmated to add approximately $0.7 million in addional gross proﬁt in our Health and Nutrion segment in that year. Selling, General and Administrave Expenses SG&A expenses increased $1.6 million to $77.0 million, or 8% of sales, for ﬁscal 2023, from $75.3 million, or 10% of sales, for ﬁscal 2022. Included in SG&A expenses for the current ﬁscal year was a gain of approximately $3.0 million related to the sale of certain assets related to our consumer bleach packaging business. In addion, a year-over-year decrease in compensaon expense of $0.5 million related to our non-qualiﬁed deferred compensaon plan reduced SG&A expenses, with the oﬀset in Other Expense. In spite of these decreases in SG&A expense, expenses increased primarily due to the added costs from the acquired businesses in our Water Treatment segment and increased wages. Fiscal 2022 included an addional week, which we esmated to add approximately $1.0 million in addional SG&A expense in that year. Operang Income Operang income was $88.2 million, or 9% of sales, for ﬁscal 2023, as compared to $71.2 million, or 9% of sales, for ﬁscal 2022 due to the combined impact of the factors discussed above. Fiscal 2022 included an addional week, which we esmated to add approximately $3.0 million in addional operang income expense in that year. Interest Expense, Net Interest expense was $5.2 million for ﬁscal 2023, an increase of $3.8 million from interest expense of $1.4 million for ﬁscal 2022. The increase was due to an increase in borrowing interest rates as well as an increase in average outstanding borrowings due to increased capital needs. Income Tax Provision Our eﬀecve tax rate was approximately 27.3% for ﬁscal 2023 and 26.3% for ﬁscal 2022. The eﬀecve tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. The current year increase in the eﬀecve tax rate was primarily driven by unfavorable book to tax LIFO diﬀerences. 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 2023 Third Fourth Total 246,543 $ 46,749 18,885 27,864 19,695 0.94 $ 0.94 $ 241,192 $ 46,374 19,838 26,536 18,000 0.86 $ 0.86 $ 219,218 $ 36,271 21,004 15,267 10,733 0.52 $ 0.51 $ 228,145 $ 35,725 17,242 18,483 11,613 0.56 $ 0.55 $ 935,098 165,119 76,969 88,150 60,041 2.88 2.86 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 $ 774,541 146,520 75,326 71,194 51,542 2.46 2.44 First Second Fiscal 2021 Third Fourth Total 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 $ 596,871 123,762 67,884 55,878 40,980 1.95 1.93 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 2023 was $77.4 million compared to $42.8 million in ﬁscal 2022. Our net cash provided by operang acvies increased $34.6 million compared to ﬁscal 2022. In the prior ﬁscal year, we expended signiﬁcant working capital as accounts receivable and inventory increased over ﬁscal 2021 resulng in a net $37 million use of cash for working capital accounts. In ﬁscal 2023, we expended net $13 million in the aggregate for working capital accounts due to lower year-over-year changes. This, combined with improved net income, resulted in the year-over-year increase in net cash provided by operang acvies. 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 $41.2 million in ﬁscal 2023 compared to $49.8 million in ﬁscal 2022. Capital expenditures for property, plant and equipment were $48.3 million in ﬁscal 2023 and $28.5 million in ﬁscal 2022. The current year increase in capital expenditures was primarily driven by increased expenditures for new trucks and facility improvements and expansions. Cash used in invesng acvies included no acquision spending in ﬁscal 2023 compared to an aggregate of $21.5 million for Water Treatment group acquisions in ﬁscal 2022. Cash used in invesng acvies also included proceeds from asset disposals of $7.0 million in ﬁscal 2023 compared to $0.3 million in ﬁscal 2022. The proceeds received in ﬁscal 2023 related primarily to our sale of certain assets related to our consumer bleach packaging business. Cash used in ﬁnancing acvies was $32.1 million in ﬁscal 2023, as compared to cash provided by ﬁnancing acvies of $7.4 million in ﬁscal 2022. Cash used in ﬁnancing acvies included net debt repayments of $14.0 million in ﬁscal 2023, compared to net debt borrowings of $27.0 million in ﬁscal 2022, which was used primarily to fund our acquisions in ﬁscal 2022. We paid out cash dividends of $12.0 million in ﬁscal 2023 and $11.1 million in ﬁscal 2022. In ﬁscal 2023, we used $6.6 million to repurchase shares under our board-authorized share repurchase program, and in ﬁscal 2022, we used $8.5 million to repurchase shares under the program. Our cash balance was $7.6 million at April 2, 2023, an increase of $4.1 million as compared with April 3, 2022. Cash ﬂows generated by operaons during ﬁscal 2023 were oﬀset by the cash expended for capital expenditures, repayments of debt and dividend payments in ﬁscal 2023. We are party to a Credit Agreement with U.S. Bank as Sole Lead Arranger and Sole Book Runner, and other lenders from me to me party thereto, whereby U.S. Bank is also serving as Administrave Agent. The Credit Agreement provides us with a Revolving Loan Facility totaling $250.0 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. 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 4.3%. 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 2, 2023, the unamorzed balance of these costs was $0.4 million, and is reﬂected as a reducon of debt on our balance sheet. 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 2, 2023 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. 19 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. Material Cash Requirements The following table provides aggregate informaon about our contractual payment obligaons and the periods in which payments are due: Contractual Obligaon 2024 2025 2026 Payments Due by Fiscal Period 2027 (In thousands) 2028 More than 5 Years Total Senior secured revolver (1) Interest payments (2) Operang lease obligaons (3) Pension withdrawal liability (4) $ $ $ $ — $ 6,749 $ 1,932 $ 467 $ — $ 6,749 $ 1,742 $ 467 $ — $ 6,749 $ 1,599 $ 467 $ — $ 6,749 $ 1,340 $ 467 $ 112,000 $ 561 $ 1,282 $ 467 $ — $ — $ 3,862 $ 2,570 $ 112,000 27,557 11,757 4,905 (1) Represents balance outstanding as of April 2, 2023, 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 8 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 2, 2023. (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. In addion to the above contractual obligaons, in the ordinary course of business we have roune cash requirements related to capital expenditures for new trucks, facility improvements and expansions, safety equipment and other addions of property, plant and equipment. Our capital expenditures in ﬁscal 2023 were $48.3 million and in ﬁscal 2023 were $28.5 million. We ancipate total capital expenditures to be in the range of $40 to $45 million for ﬁscal 2024. 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 ongoing 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. 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 $0.1 million. Other types of market risk, such as foreign currency risk, do not arise in the normal course of our business acvies. 20 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounng Firm (PCAOB ID: 248) 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 21 22 24 25 26 27 28 29 Report of Independent Registered Public Accounng Firm Board of Directors and Shareholders Hawkins, Inc. 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 2, 2023, 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 2, 2023, 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 2, 2023, and our report dated May 17, 2023 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. 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. 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 17, 2023 22 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 2, 2023 and April 3, 2022 and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash ﬂows for each of the three years in the period ended April 2, 2023, 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 2, 2023 and April 3, 2022, and the results of its operaons and its cash ﬂows for each of the three years in the period ended April 2, 2023, 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 2, 2023, 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 17, 2023 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 2020. Minneapolis, Minnesota May 17, 2023 23 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 Income tax payable Other current liabilies Total current liabilies LONG-TERM DEBT LONG-TERM LEASE LIABILITY PENSION WITHDRAWAL LIABILITY DEFERRED INCOME TAXES DEFERRED COMPENSATION LIABILITY OTHER LONG-TERM LIABILITIES Total liabilies COMMITMENTS AND CONTINGENCIES (Note 12) SHAREHOLDERS’ EQUITY: Common shares; authorized: 60,000,000 shares of $0.01 par value; 20,850,454 and 20,889,777 shares issued and outstanding for 2023 and 2022, respecvely Addional paid-in capital Retained earnings Accumulated other comprehensive income Total shareholders’ equity Total liabilies and shareholders’ equity April 2, 2023 April 3, 2022 $ 7,566 $ 129,252 88,777 6,449 232,044 16,344 134,901 125,970 56,328 11,210 344,753 158,950 185,803 10,199 77,401 73,060 7,367 4,661 172,688 590,535 $ 53,705 $ 17,279 9,913 3,329 6,645 90,871 101,731 8,687 3,912 23,800 9,343 2,175 240,519 209 44,443 302,424 2,940 350,016 590,535 $ $ $ $ 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 39 5,787 101,466 115,644 9,143 4,276 23,422 8,402 2,374 264,727 209 46,717 254,384 1,291 302,601 567,328 See accompanying notes to consolidated ﬁnancial statements. 24 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 (expense) income 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 02, 2023 Fiscal Year Ended April 03, 2022 March 28, 2021 935,098 $ (769,979) 165,119 (76,969) 88,150 (5,234) (334) 82,582 (22,541) 60,041 $ 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 20,848,077 21,014,905 20,947,234 21,135,258 21,024,344 21,260,296 2.88 $ 2.86 $ 2.46 $ 2.44 $ 1.95 1.93 0.57000 $ 0.52250 $ 0.47125 $ $ $ $ $ See accompanying notes to consolidated ﬁnancial statements. 25 HAWKINS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Net income Other comprehensive income, net of tax: Unrealized gain on interest rate swap Total other comprehensive income Total comprehensive income April 2, 2023 Fiscal Year Ended April 3, 2022 March 28, 2021 $ $ 60,041 $ 51,542 $ 1,649 1,649 61,690 $ 1,291 1,291 52,833 $ 40,980 79 79 41,059 See accompanying notes to consolidated ﬁnancial statements. 26 HAWKINS, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands, except share data) 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 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 2, 2023 Common Shares Shares 21,024,458 $ Amount — — 26,542 (3,314) 88,148 (166,088) — — 20,969,746 $ — — 134,230 (45,390) 71,692 (240,501) — — 20,889,777 $ — — 113,147 (36,410) 65,597 (181,657) — — 20,850,454 $ Addional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity 211 $ — — — — 1 (2) — — 210 $ — — 1 — — (2) 50,405 $ — 3,343 — (54) 1,582 (4,138) — — 51,138 $ — 3,818 (1) (1,467) 1,772 (8,543) 182,947 $ (10,029) — — — — — — 40,980 213,898 $ (11,056) — — — — — (79) $ — — — — — — 79 — — $ — — — — — — — — 209 $ — — 46,717 $ — 51,542 254,384 $ 1,291 — 1,291 $ — — 1 — 1 (2) — 3,825 (1) (1,550) 2,007 (6,555) (12,001) — — — — — — — — — — — — — 209 $ — — 44,443 $ — 60,041 302,424 $ 1,649 — 2,940 $ 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 (12,001) 3,825 — (1,550) 2,008 (6,557) 1,649 60,041 350,016 See accompanying notes to consolidated ﬁnancial statements. 27 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 Loss (gain) on deferred compensaon assets Deferred income taxes Stock compensaon expense (Gain) loss from asset disposals 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 Proceeds from asset disposals 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 April 2, 2023 Fiscal Year Ended April 3, 2022 March 28, 2021 $ 60,041 $ 51,542 $ 27,440 1,971 334 (232) 3,825 (2,950) 87 (6,389) 4,717 (11,596) (737) (1,958) 3,290 (443) 77,400 (48,321) — 7,091 (41,230) (12,001) 2,008 (1,550) (6,557) — (59,000) 45,000 (32,100) 4,070 3,496 7,566 $ 19,485 $ 4,759 2,340 24,129 1,899 (189) (1,501) 3,818 452 93 (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 40,980 22,669 1,896 (1,440) (689) 3,343 110 93 (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 Net cash (used in) provided by 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 $ $ See accompanying notes to consolidated ﬁnancial statements. 28 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, 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. 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. Fiscal Year - Our ﬁscal year is a 52 or 53-week year ending on the Sunday closest to March 31. Our ﬁscal 2023 was 52 weeks, ﬁscal 2022 was 53 weeks, and ﬁscal 2021 was 52 weeks. Fiscal 2024 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 liabilies, 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. 29 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. 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, typically 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 2, 2023, we had a signiﬁcant concentraon of credit risk, with a single customer represenng approximately 15% 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 is 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 79% of our inventory determined using the last-in, ﬁrst-out (“LIFO”) method. Cost for the other 21% 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. 30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. 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 generally: 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 $20.5 million for ﬁscal 2023, $17.7 million for ﬁscal 2022 and $16.8 million for ﬁscal 2021. 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 2023 or ﬁscal 2022 related to the impairment of long-lived assets, and incurred immaterial write-oﬀ charges in ﬁscal 2021. 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 January 2, 2023, 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 2022 and 2021 and, similarly, we did not record a goodwill impairment charge. Our primary idenﬁable intangible assets include customer relaonships, trademarks and tradenames 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 11 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 2023, 2022 or 2021. 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 2023, 2022 or 2021. 31 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Income Taxes - Deferred taxes are provided for diﬀerences between the ﬁnancial statement and tax basis of assets and liabilies using enacted tax rates in eﬀect for the year in which the diﬀerences are expected to reverse. A valuaon allowance is provided to oﬀset deferred tax assets if, based on the available evidence, it is more likely than not that some or all of the value of the deferred tax assets will not be realized. We record any interest and penales related to income taxes as income tax expense in the consolidated statements of income. 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 to be issued as performance units and restricted stock. Basic and diluted EPS were calculated using the following: Weighted average common shares outstanding — basic Diluve impact of stock performance units and restricted stock Weighted average common shares outstanding — diluted April 02, 2023 April 03, 2022 March 28, 2021 20,848,077 166,828 21,014,905 20,947,234 188,024 21,135,258 21,024,344 235,952 21,260,296 There were no shares or stock opons excluded from the calculaon of weighted average common shares for diluted EPS for ﬁscal 2023, 2022 or 2021. 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. 32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Note 2 — Asset Sales and Acquisions Sale of bleach packaging assets: On March 30, 2023, we sold certain assets in our Industrial segment related to our consumer bleach packaging business for $7 million. These assets were not core to our Industrial segment operaons, where we tend to focus our manufacturing operaons on bulk products. The assets sold included plant equipment, inventory and intangible assets, all related to the packaging of bleach. We realized a gain of $3 million on this sale, which has been recorded within selling, general and administrave expenses. Acquision of NAPCO Chemical Company, Inc.: In the fourth quarter of ﬁscal 2022, we acquired substanally all the assets of NAPCO Chemical Company, Inc. ("NAPCO") for $19.0 million, 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. NAPCO manufactured and distributed 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 was 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. Acquision of Water and Waste Speciales, Inc.: In the third quarter of ﬁscal 2022, 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. Acquision of Southeast Water Systems LLC: In the second quarter of ﬁscal 2022, 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 three years following the acquision date 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. 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. 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 added approximately 40,000 square feet of manufacturing and warehouse space to bring us to a total of 105,000 square feet of space at that me 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. 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. 33 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. 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 Total external customer sales (2) (1) (In thousands) Manufactured, blended or repackaged products Distributed specialty products (3) Bulk products Other (2) (1) Total external customer sales Industrial 383,612 — 77,479 9,669 470,760 Industrial 318,514 — 61,443 6,981 386,938 Industrial 231,427 — 38,378 3,556 273,361 $ $ $ $ $ $ Fiscal Year Ended April 2, 2023: Health and Nutrion Water Treatment 271,448 — 27,996 5,481 304,925 $ $ 48,575 109,468 — 1,370 159,413 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 $ $ $ $ $ $ $ $ $ $ $ $ Total 703,635 109,468 105,475 16,520 935,098 Total 558,554 124,312 81,654 10,021 774,541 Total 422,391 115,317 54,445 4,718 596,871 (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. 34 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. 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 qualiﬁes 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 ﬁscal 2023, 2022 and 2021, we recorded $1.6 million, $1.3 million, and $0.1 million, respecvely, in other comprehensive income related to unrealized gains (net of tax) on the cash ﬂow hedge. Included in other long-term assets on our consolidated balance sheet was $4.0 million as of April 2, 2023 and $1.8 million as of April 3, 2022. 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 2, 2023 and April 3, 2022. (In thousands) Assets Deferred compensaon plan assets Interest rate swap 0 April 2, 2023 April 3, 2022 Level 1 Level 2 $ 7,659 4,028 $ 7,038 1,769 35 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Note 6 — Inventories Inventories at April 2, 2023 and April 3, 2022 consisted of the following: (In thousands) Inventory (FIFO basis) LIFO reserve Net inventory 2023 2022 $ $ 128,589 $ (39,812) 88,777 $ 116,325 (21,340) 94,985 The FIFO value of inventories accounted for under the LIFO method was $101.4 million at April 2, 2023 and $83.7 million at April 3, 2022. The remainder of the inventory was valued and accounted for under the FIFO method. Note 7 — 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 28, 2021 Industrial $ Addion due to acquisions Balance as of April 3, 2022 and April 2, 2023 $ Water Treatment Health and Nutrion Total 6,495 $ — 6,495 $ 19,280 $ 6,681 25,961 $ 44,945 $ — 44,945 $ 70,720 6,681 77,401 The following is a summary of our idenﬁable intangible assets as of April 2, 2023 and April 3, 2022: (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 2023 Accumulated Amorzaon Net carrying value 109,107 $ 6,370 3,904 119,381 1,227 120,608 $ (38,377) $ (5,267) (3,904) (47,548) — (47,548) $ 70,730 1,103 — 71,833 1,227 73,060 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 $ $ $ $ Intangible asset amorzaon expense was $6.9 million during ﬁscal 2023, $6.5 million during ﬁscal 2022, and $5.8 million during ﬁscal 2021. 36 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. The esmated future amorzaon expense for idenﬁable intangible assets is as follows: (In thousands) Fiscal 2024 Fiscal 2025 Fiscal 2026 Fiscal 2027 Fiscal 2028 Thereaer Total Note 8 – Debt Intangible Assets 6,680 $ 6,680 6,579 6,279 6,184 39,431 71,833 $ We have in place a Credit Agreement with U.S. Bank as Sole Lead Arranger and Sole Book Runner, and other lenders from me to me party thereto, whereby U.S. Bank is also serving as Administrave Agent. The Credit Agreement provides us with a “Revolving Loan Facility” totaling $250.0 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. At April 2, 2023, the eﬀecve interest rate on our borrowings was 4.3%. 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. As of April 3, 2022, we were in compliance with all required covenants. Debt at April 2, 2023 and April 3, 2022 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 2, 2023 April 3, 2022 $ $ 112,000 (356) 111,644 (9,913) 101,731 $ $ 126,000 (443) 125,557 (9,913) 115,644 37 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Note 9 — 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 76,863 shares in the aggregate for ﬁscal 2023. 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, 2022, and 2023: Outstanding at beginning of ﬁscal 2021 Granted Vested Forfeited Outstanding at end of ﬁscal 2021 Granted Vested Forfeited Outstanding at end of ﬁscal 2022 Granted Vested Forfeited Outstanding at end of ﬁscal 2023 Shares 149,030 $ 129,626 (10,526) (29,010) 239,120 $ 111,618 (123,002) (13,258) 214,478 $ 88,524 (102,860) (10,884) 189,258 $ Weighted- Average Grant Date Fair Value 17.13 18.69 15.68 17.92 17.94 31.74 17.25 18.69 25.48 38.31 18.69 34.68 34.64 We recorded compensaon expense on performance-based restricted stock of approximately $2.8 million for ﬁscal 2023, $2.9 million for ﬁscal 2022 and $2.5 million for ﬁscal 2021, substanally all of which was recorded in SG&A expense in the Consolidated Statements of Income. The total fair value of performance-based restricted stock units vested was $1.9 million in ﬁscal 2023, $2.1 million in ﬁscal 2022 and $0.2 million in ﬁscal 2021. 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 2, 2023 was $2.8 million and is expected to be recognized over a weighted average period of 0.9 years. 38 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Restricted Stock Awards. As part of their retainer, our directors, other than the Chief Execuve Oﬃcer, 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, 2022, and 2023: Outstanding at beginning of ﬁscal 2021 Granted Vested Forfeited Outstanding at end of ﬁscal 2021 Granted Vested Outstanding at end of ﬁscal 2022 Granted Vested Outstanding at end of ﬁscal 2023 Shares 16,016 $ 13,186 (16,016) (1,958) 11,228 $ 10,287 (11,228) 10,287 $ 12,565 (10,287) 12,565 $ Weighted- Average Grant Date Fair Value 21.84 25.59 21.84 25.53 25.60 32.80 25.60 32.80 38.98 32.80 38.98 Annual expense related to the value of restricted stock was $0.4 million in ﬁscal 2023, and $0.3 million in ﬁscal 2022 and 2021, 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 2, 2023 was $0.2 million and is expected to be recognized over a weighted average period of 0.3 years. Note 10 — Share Repurchases Our board of directors has authorized the repurchase of up to 2,600,000 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 181,657 common shares at an aggregate purchase price of $6.6 million during ﬁscal 2023. 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. As of April 2, 2023, the number of shares available to be purchased under the share repurchase program was 1,129,348. Note 11 — 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 2023, 2022 and 2021. 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 2023, 2022 and 2021. 39 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. 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 2023, 2022 and 2021 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 65,597 in ﬁscal 2023, 71,692 in ﬁscal 2022 and 88,148 in ﬁscal 2021. contribuon expense 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 for these company-sponsored plans for ﬁscal 2023, 2022 and 2021: 2023 2022 2021 $ $ 1,067 $ 3,247 1,067 1,633 618 619 8,251 $ 1,056 $ 3,122 1,056 1,355 589 549 7,727 $ 994 2,650 994 1,327 555 556 7,076 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 12 — Commitments and Conngencies Ligaon. As of April 2, 2023, 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 2024, 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 2, 2023. 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. 40 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Note 13 — Income Taxes The provisions for income taxes for ﬁscal 2023, 2022 and 2021 were as follows: (In thousands) Federal — current State — current Total current Federal — deferred State — deferred Total deferred Total provision 2023 2022 2021 $ $ 15,072 $ 7,701 22,773 704 (936) (232) 22,541 $ 14,736 $ 5,202 19,938 (1,054) (447) (1,501) 18,437 $ 11,169 4,391 15,560 (302) (387) (689) 14,871 Reconciliaons of the provisions for income taxes to the applicable federal statutory income tax rate for ﬁscal 2023, 2022 and 2021 are listed below. 2023 2022 2021 Statutory federal income tax State income taxes, net of federal deducon ESOP dividend deducon on allocated shares Other — net Total 21.0 % 6.8 % (0.2)% (0.3)% 27.3 % 21.0 % 5.6 % (0.2)% (0.1)% 26.3 % The tax eﬀects of items comprising our net deferred tax liability as of April 2, 2023 and April 3, 2022 are as follows: (In thousands) Deferred tax assets: 2023 2022 Trade receivables Stock compensaon accruals Pension withdrawal liability Lease liability Inventories 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 $ $ $ $ $ 51 $ 2,027 1,155 2,820 2,437 3,335 11,825 $ — $ (1,089) (16,360) (14,334) (2,754) (1,087) (35,624) $ (23,799) $ 21.0 % 5.9 % (0.2)% (0.1)% 26.6 % 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) As of April 2, 2023, the Company has determined that it is more likely than not that the deferred tax assets at April 2, 2023 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 29, 2020 are closed to examinaon by the Internal Revenue Service, and with few excepons, state and local income tax jurisdicons. 41 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Note 14 – Leases Lease Obligaons. As of April 2, 2023, 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 22 years, some of which include opons to extend the lease for up to 15 years. As of April 2, 2023 and April 3, 2022, 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 $3.1 million for the twelve months ended April 2, 2023 and $2.9 million for the twelve months ended April 3, 2022, 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 2, 2023 were as follows: (In thousands) Fiscal 2024 Fiscal 2025 Fiscal 2026 Fiscal 2027 Fiscal 2028 Thereaer Total Less: Interest Present value of lease liabilies 42 April 2, 2023 April 3, 2022 7.84 2.8 % 8.91 2.6 % Operang Leases 1,932 1,742 1,599 1,340 1,282 3,862 11,757 (1,313) 10,444 $ $ $ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Connued) HAWKINS, INC. Note 15 — 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 2, 2023: Sales Gross proﬁt Selling, general, and administrave expenses Operang income Idenﬁable assets* Capital expenditures 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 Industrial Water Treatment Health and Nutrion Total $ $ $ $ $ $ $ $ $ 470,760 $ 68,115 25,703 42,412 253,436 $ 31,635 $ 386,938 $ 59,606 28,127 31,479 236,934 $ 18,812 $ 273,361 $ 43,337 27,033 16,304 181,478 $ 13,713 $ 304,925 $ 67,208 35,734 31,474 155,430 $ 16,311 $ 228,133 $ 54,571 31,357 23,214 143,889 $ 8,939 $ 170,004 $ 46,793 24,453 22,340 109,761 $ 6,732 $ 159,413 $ 29,796 15,532 14,264 155,626 $ 375 $ 159,470 $ 32,343 15,842 16,501 167,034 $ 761 $ 153,506 $ 33,632 16,398 17,234 166,558 $ 349 $ 935,098 165,119 76,969 88,150 564,492 48,321 774,541 146,520 75,326 71,194 547,857 28,512 596,871 123,762 67,884 55,878 457,797 20,794 * Unallocated assets not included, consisng primarily of cash and cash equivalents,prepaid expenses, and non-qualiﬁed deferred compensaon plan assets of $26.0 million at April 2, 2023, $19.5 million at April 3, 2022 and $14.8 million at March 28, 2021 43 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 2, 2023, based on the criteria described in Internal Control - Integrated Framework (2013) issued by the Commiee of Sponsoring Organizaons of the Treadway Commission. Based on this assessment, management believes that our internal control over ﬁnancial reporng was eﬀecve as of April 2, 2023. Our independent registered public accounng ﬁrm has issued an aestaon report on our internal control over ﬁnancial reporng for April 2, 2023 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 2023 that has materially aﬀected, or is reasonably likely to materially aﬀect, our internal control over ﬁnancial reporng. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not Applicable. 44 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 2, 2023 (the “2023 Proxy Statement”). Except for those porons speciﬁcally incorporated in this Form 10-K by reference to the 2023 Proxy Statement, no other porons of the 2023 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 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 — Health and Nutrion Age 52 50 59 53 53 65 61 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. 45 David J. Mangine has been our Vice President - Industrial Group since 2021. Prior to aaining this posion, Mr. Mangine served as the Industrial Sales Manager from 2011 to 2021, aer joining Hawkins in 2000 as an Account Manager. Shirley A. Rozeboom has been our Vice President - Health and Nutrion since 2019. Prior to aaining this posion, Ms. Rozeboom held the posion of Senior Vice President of Sales for Stauber from 2012 to 2019, Director of Sales 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 2023 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 2023 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 2023 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 2023 Proxy Statement is incorporated herein by reference. 46 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 2, 2023 and April 3, 2022. Consolidated Statements of Income for the ﬁscal years ended April 2, 2023, April 3, 2022 and March 28, 2021. Consolidated Statements of Comprehensive Income for the ﬁscal years ended April 2, 2023, April 3, 2022 and March 28, 2021. Consolidated Statements of Shareholders’ Equity for the ﬁscal years ended April 2, 2023, April 3, 2022, and March 28, 2021. Consolidated Statements of Cash Flows for the ﬁscal years ended April 2, 2023, April 3, 2022, and March 28, 2021. 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 2023, 2022 and 2021. Schedule II — Valuaon and Qualifying Accounts. (a)(3) EXHIBITS 47 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) Method of Filing Incorporated by Reference Incorporated by Reference Incorporated by Reference Incorporated by Reference Incorporated by Reference Incorporated by Reference 10.4 Amendment No. 2 to the Hawkins, Inc. Employee Stock Purchase Plan, as amended. Filed Electronically 10.5 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) 10.6* Hawkins, Inc. 2019 Equity Incenve Plan. (8) 10.7* Form of Performance Stock Unit Award Noce and Restricted Stock Agreement under the Company’s 2019 Equity Incenve Plan. (9) 10.8* Nine Year LTI with Shirley Rozeboom. (10) 21 Subsidiaries of the registrant. 23.1 Consent of Grant Thornton LLP. 24.1 Powers of Aorney. 31.1 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. Incorporated by Reference Incorporated by Reference Incorporated by Reference Incorporated by Reference 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 2, 2023, ﬁled with the SEC on May 17, 2023, formaed in Inline Extensible Business Reporng Language (iXBRL): (i) the Consolidated Balance Sheets at April 2, 2023 and April 3, 2022 (ii) the Consolidated Statements of Income for the ﬁscal years ended April 2, 2023, April 3, 2022, and March 28, 2021, (iii) the Consolidated Statements of Comprehensive Income for the ﬁscal years ended April 2, 2023, April 3, 2022, and March 28, 2021, (iv) the Consolidated Statements of Shareholders’ Equity for the ﬁscal years ended April 2, 2023, April 3, 2022, and March 28, 2021, (v) Consolidated Statements of Cash Flows for the ﬁscal years ended April 2, 2023, April 3, 2022, and March 28, 2021, 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. ITEM 16. FORM 10-K SUMMARY None SIGNATURES 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. Dated: May 17, 2023 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 17, 2023 May 17, 2023 May 17, 2023 May 17, 2023 May 17, 2023 May 17, 2023 May 17, 2023 May 17, 2023 May 17, 2023 * 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 2, 2023, April 3, 2022 AND March 28, 2021 Descripon Reserve deducted from asset to which it applies: Fiscal Year Ended April 2, 2023: Allowance for credit losses Fiscal Year Ended April 3, 2022: Allowance for credit losses Fiscal Year Ended March 28, 2021: 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 367 $ 497 $ 784 $ — $ — $ — $ — $ — $ — $ (177) $ (130) $ (287) $ 190 367 497 AMENDMENT NO. 2 TO THE HAWKINS, INC. EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED Exhibit 10.4 WHEREAS, Hawkins, Inc., a Minnesota corporaon (the “Company”) maintains the Hawkins, Inc. Employee Stock Purchase Plan, as amended (the “Plan”); and WHEREAS, the Company desires to amend the Plan to provide for a minimum holding period for Shares purchased under the Plan to ensure that Parcipants’ purchases will qualify for the tax treatment described in Secon 423(a) of the Internal Revenue Code of 1986, as amended; NOW, THEREFORE, BE IT RESOLVED, that, eﬀecve with respect to the purchase period commencing on July 1, 2023 and each subsequent purchase period thereaer, the Plan be, and it hereby is, amended as follows: 1. Secon 10.2 of the Plan is amended by replacing the second and third sentences of the second paragraph of such secon with the following sentence: “At any me aer the Parcipant has sasﬁed the minimum holding period requirements established by Code Secon 423(a)(1), the Parcipant may direct such agent to sell such Shares and distribute the net proceeds of such sale to the Parcipant, or a Parcipant may request from the agent a cerﬁcate represenng the Shares credited to the Parcipant’s account, in which case the agent shall transfer a cerﬁcate for such whole number of Shares directly to the Parcipant.” 2. The other provisions, terms and condions of the Plan are and will remain in full force and eﬀect. IN WITNESS WHEREOF, this amendment has been duly adopted by the Company’s Board of Directors as of April 26, 2023. Subsidiaries of Hawkins, Inc. Exhibit 21 Subsidiary Stauber Holdings, Inc. Stauber Performance Ingredients, Inc., a subsidiary of Stauber Holdings, Inc. State of Organizaon Minnesota Minnesota Consent of Independent Registered Public Accounng Firm Exhibit 23.1 We have issued our reports dated May 17, 2023, 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 2, 2023. 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 17, 2023 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 2, 2023 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 2, 2023 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 2, 2023 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 2, 2023 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 2, 2023 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 2, 2023 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 2, 2023 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) b) 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 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 17, 2023 /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) b) 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 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 17, 2023 /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 2, 2023, 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 17, 2023 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 2, 2023, 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 17, 2023

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