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For the fourth quarter ended March 30, 2008, Hawkins reported sales of$51.2 million, up 29.0% from $39.7 million for the comparable period a yearago. Net income for the fourth quarter of fiscal 2008 was $1.7 million, equalto earnings per share of $0.17, versus net income of $1.8 million, or earningsper share of $0.18, for the fourth quarter of fiscal 2007. The fourth quarterof fiscal 2008 was negatively impacted by LIFO inventory adjustments ofapproximately $1.2 million before taxes (approximately $0.8 million or $0.08per share, after tax) resulting from fluctuations in cost and inventorylevels, whereas the fourth quarter of fiscal 2007 was positively impacted byLIFO adjustments of approximately $0.8 million before taxes (approximately$0.5 million or $0.05 per share, after tax).
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In fiscal 2008, Industrial segment sales were $124.6 million, a 30.6%increase over fiscal 2007 sales of $95.4 million. The change was drivenlargely by higher volumes, price increases related to rising material costs,and the acquisition of Trumark, Inc. in May of 2007.
Water Treatment segment sales were $62.1 million, a 10.1% increase overfiscal 2007 sales of $56.4 million. The growth is primarily attributable toselling price increases that correlate with rising material costs, productline growth and higher volumes related to favorable weather conditions.
The Pharmaceutical segment's sales were $9.8 million, a 13.2% increaseover fiscal 2007 sales of $8.6 million. The improvement was due primarily tothe resolution of regulatory restrictions during the third quarter of fiscal2008, which began in fiscal 2007.
Gross margin as a percent of sales for the quarter and year ended March30, 2008 were 17.1% and 21.2%, respectively, compared with 20.8% and 23.2% inthe comparable periods a year ago. In addition to the effect of the LIFOadjustments mentioned above, margins for fiscal 2008 were negatively affectedby rising commodity chemicals prices and continued growth in high volume,lower margin products.
The positive impact of higher sales on net income for fiscal 2008 waspartially offset by an increase in Selling, General and Administrative (SG&A)expenses. The SG&A expense increase primarily related to the acquisition ofTrumark and higher employee-related expenses, partially offset by a decreasein professional and consulting expenses.
Chief Executive Officer, John R. Hawkins, commented, "We continue tooperate in a highly competitive, price pressured environment where increasingraw material and transportation costs are negatively impacting margins. Ourhistorical focus on strong customer service has permitted us to meet customerneeds despite these challenges. The business also continues to generate strongcash flow. This has enabled Hawkins to invest capital in operations, businessprocesses and new growth opportunities while continuing to pay highershareholder dividends. For example in January 2008, two new Water Treatmentsales and service offices were established in Missouri and Kansas, furtherexpanding Hawkins' territory."
Hawkins, Inc. provides a full range of bulk industrial productscomplemented with the technical competence and innovation to formulate andblend specialty chemicals. The Company sells and services related products andequipment to safely dispense chemicals in highly controlled environments.
Hawkins serves customers in a wide range of industries, including chemicalprocessing, electronics, energy, environmental services, food processing,metal finishing, pharmaceutical, medical devices, pulp and
