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Hawkins, Inc. Reports Third Quarter, Nine Months Fiscal 2008 Results

Saturday, February 9, 2008 General News
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MINNEAPOLIS, Feb. 8 Hawkins, Inc.(Nasdaq: HWKN) today announced third quarter and nine months results forfiscal 2008. For the quarter ended December 31, 2007, Hawkins reported salesincreased 30.9% to $48.5 million versus $37.0 million for the same period ayear ago. Net income for the quarter was $1.5 million, equal to $0.15 perdiluted share, versus net income of $314,000, or $0.03 per diluted share forthe third quarter of fiscal 2007.
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For the nine months ended December 31, 2007, Hawkins reported sales of$145.2 million compared to sales of $120.7 million in the prior year period,an increase of 20.3%. Net income for the nine-month period endedDecember 31, 2007 was $7.4 million compared to $6.3 million in the prior yearperiod, an increase of 17.9%. Diluted earnings per share rose to $0.72compared to $0.62 per diluted share for the same period a year ago, anincrease of 16.1%.
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Industrial segment sales increased by $20.3 million or 29.2% for the ninemonths ended December 31, 2007, driven largely by an increase in highervolume, lower margin products, price increases commensurate with risingmaterial costs, and the acquisition of Trumark, Inc.

Water Treatment segment sales increased by $3.6 million or 8.2% for thenine months ended December 31, 2007, primarily attributable to selling priceincreases commensurate with rising material costs, expansion of existingproduct lines to new and existing customers and volume increases during thefirst quarter of fiscal 2008 related to favorable weather conditions.

Gross margin as a percent of sales for the three and nine months endedDecember 31, 2007 were 18.8% and 22.6%, respectively, compared with 18.9% and24.0% in the comparable periods a year ago. The decreases were primarily dueto a change in product mix towards higher volume, lower margin products andhigher material costs. The decrease for the three months endedDecember 31, 2007 was partially mitigated by the LIFO method of valuinginventory, which negatively impacted gross margins in the third quarter offiscal 2007.

Net income for the nine-month period was positively impacted by highersales, partially offset by increased expenses, principally Selling, General,and Administrative (SG&A) expenses related to consultant and contractor feesfor system enhancements and the acquisition of Trumark, which were augmentedby growth in sales and support personnel. SG&A expenses, as a percentage ofsales, decreased for both the quarter, 14.4% this year versus 18.1% in theprior year, and nine months, 15.1% this year compared with 16.4% last year.

Chief Executive Officer, John R. Hawkins, commented, "Hawkins' salescontinue to grow. However, increased material costs have resulted incontinuing pressure on our margins. The success that we have generated thusfar in fiscal 2008, along with the investments we are making to strengthenboth Hawkins' infrastructure and competitive position, should bode well forour future. In January of 2008, two new Water Treatment sales and serviceoffices were established in Missouri and Kansas, further expanding Hawkins'territory and creating new business opportunities."

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 paper, and watertreatment.

Hawkins is headquartered in Minneapolis, Minnesota. The Company operateseighteen facilities in Iowa, Illinois, Kansas, Minnesota, Missouri, Montana,Nebraska, New Jersey, South and North Dakota and Wisconsin and servicescu
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