"Five years ago, while investors piled into tech darlings and meme stocks, $1,000 quietly invested in Hawkins Inc ( NASDAQ: HWKN) would be worth $5,840 today. That's a 484% return from a Roseville, Minnesota company that blends specialty chemicals and water treatment solutions. No viral products. No celebrity CEO. Just steady execution in an industry most people find boring. The Unsexy Path to 484% Returns"
"The five-year journey started from a foundation of recovery. In fiscal 2018, the company posted a $9.2 million loss. Management regrouped, tightened operations, and returned to profitability by 2019. By fiscal 2021, revenue was $597 million with $41 million in net income. Four years later, those numbers hit $974 million and $84 million respectively. Revenue grew 63%, but earnings doubled. That's margin expansion, not just scaling."
"What drove it? Three things. First, water infrastructure spending accelerated nationwide. Aging systems needed upgrades, and Hawkins positioned itself as the go-to supplier. Second, strategic acquisitions. The company bought WaterSurplus, StillWaters Technology, and Redbird Chemical, expanding its water treatment footprint across the southern U.S. Third, operational discipline. Gross margins improved from 20.7% to 23.1% over the period, showing pricing power in a commodity-adjacent business."
Hawkins operates 64 facilities across 28 states, blending bulk chemicals to customer specifications and providing technical support to water plants, food manufacturers, and industrial clients. The company recovered from a $9.2 million loss in fiscal 2018 to profitability in 2019, then grew revenue from $597 million to $974 million and net income from $41 million to $84 million over four years. Revenue rose 63% while earnings doubled, driven by accelerated water infrastructure spending, strategic acquisitions (WaterSurplus, StillWaters Technology, Redbird Chemical), and operational discipline that raised gross margin from 20.7% to 23.1%. The stock outperformed the S&P 500 but recently slipped 3.3% and trades 18% below its 52-week high after missing October earnings, reporting $1.08 per share versus a $1.23 consensus.
#water-treatment #specialty-chemicals #operational-improvement #mergers--acquisitions #infrastructure-spending
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