{"url_path":"/sec/hwkn/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/46250/0000046250-26-000018-index.html","accession_number":"0000046250-26-000018","cik":"0000046250","ticker":"HWKN","issuer_name":"HAWKINS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/46250/0000046250-26-000018-index.html","primary_entity_key":"0000046250","primary_entity_name":"HAWKINS INC"},"word_count":13177,"has_tables":true,"body_markdown":"ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\n\nIndex to Consolidated Financial Statements\n\n[Report of Independent Registered Public Accounting Firm](#ic8ac6e5788874622a19fce1224eee60b_1775) (PCAOB ID: 34)\n\n[28](#ic8ac6e5788874622a19fce1224eee60b_1775)\n\n[Report of Independent Registered Public Accounting Firm](#ic8ac6e5788874622a19fce1224eee60b_76) (PCAOB ID: 248)\n\n[31](#ic8ac6e5788874622a19fce1224eee60b_76)\n\n[Consolidated Balance Sheets](#ic8ac6e5788874622a19fce1224eee60b_79)\n\n[32](#ic8ac6e5788874622a19fce1224eee60b_79)\n\n[Consolidated Statements of Income](#ic8ac6e5788874622a19fce1224eee60b_82)\n\n[34](#ic8ac6e5788874622a19fce1224eee60b_82)\n\n[Consolidated Statements of Comprehensive Income](#ic8ac6e5788874622a19fce1224eee60b_85)\n\n[35](#ic8ac6e5788874622a19fce1224eee60b_85)\n\n[Consolidated Statements of Shareholders’ Equity](#ic8ac6e5788874622a19fce1224eee60b_88)\n\n[36](#ic8ac6e5788874622a19fce1224eee60b_88)\n\n[Consolidated Statements of Cash Flows](#ic8ac6e5788874622a19fce1224eee60b_91)\n\n[37](#ic8ac6e5788874622a19fce1224eee60b_91)\n\n[Notes to Consolidated Financial Statements](#ic8ac6e5788874622a19fce1224eee60b_94)\n\n[38](#ic8ac6e5788874622a19fce1224eee60b_94)\n\n27\n\nReport of Independent Registered Public Accounting Firm\n\nTo the shareholders and the Board of Directors of Hawkins, Inc.\n\nOpinion on Internal Control over Financial Reporting\n\nWe have audited the internal control over financial reporting of Hawkins, Inc. and subsidiaries (the “Company”) as of March 29, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 29, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.\n\nWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended March 29, 2026, of the Company and our report, dated May 13, 2026, expressed an unqualified opinion on those financial statements.\n\nAs described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at WaterSurplus, which was acquired on April 25, 2025, and whose financial statements constitute approximately 2.9% of total assets, excluding goodwill and intangible assets, and 3.2% of net sales of the consolidated financial statement amounts as of and for the year ended March 29, 2026. Accordingly, our audit did not include the internal control over financial reporting at WaterSurplus.\n\nBasis for Opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness 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.\n\nDefinition and Limitations of Internal Control over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ Deloitte & Touche LLP\n\nMinneapolis, Minnesota\n\nMay 13, 2026\n\n28\n\nReport of Independent Registered Public Accounting Firm\n\nTo the shareholders and the Board of Directors of Hawkins, Inc.\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheet of Hawkins, Inc. and subsidiaries (the “Company”) as of March 29, 2026, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows, for the year ended March 29, 2026, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 29, 2026, and the results of its operations and its cash flows for the year ended March 29, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\nWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 29, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report, dated May 13, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.\n\nBasis for Opinion\n\nThese 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 audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nAcquisition – WaterSurplus Customer Relationships – Refer to Note 2 to the financial statements\n\nCritical Audit Matter Description\n\nDuring the first quarter of fiscal year 2026, the Company acquired Surplus Management, Inc. (d/b/a WaterSurplus) for $149.9 million. The Company allocated the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, which resulted in WaterSurplus customer relationships being recorded at $76 million. The Company estimated the fair value of the WaterSurplus customer relationships in accordance with generally accepted valuation techniques. This approach required management to make significant estimates and assumptions. Changes in these estimates and assumptions could have a significant impact on the fair value of the WaterSurplus customer relationships. We identified the projected revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, and discount rate used in the valuation of the WaterSurplus customer relationships as a critical audit matter due to the subjectivity inherent in these estimates and assumptions. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions.\n\n29\n\nHow the Critical Audit Matter Was Addressed in the Audit\n\nOur audit procedures related to the projected revenue growth rates, EBITDA margins, and discount rate included the following, among others:\n\n•We tested the effectiveness of internal controls over management’s valuation analysis related to projected revenue growth rates, EBITDA margins, and discount rate.\n\n•We assessed the reasonableness of management’s projections of the revenue growth rates and EBITDA margins by comparing the projections to historical results and certain peer companies.\n\n•We evaluated whether the projections of the revenue growth rates and EBITDA margins were consistent with evidence obtained in other areas of the audit.\n\n•With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by:\n\n–Testing the mathematical accuracy of the components of the discount rate.\n\n–Comparing the selected discount rate to market data.\n\n–Evaluating the valuation methodology used.\n\n–Comparing our fair value specialists’ independent range of the discount rate estimate to the discount rate used by management.\n\n–Comparing the estimated weighted average return on assets, internal rate of return, and the discount rate used in the valuation model and evaluating whether they were consistent with each other.\n\n/s/ Deloitte & Touche LLP\n\nMinneapolis, Minnesota\n\nMay 13, 2026\n\nWe have served as the Company’s auditor since 2025.\n\n30\n\nReport of Independent Registered Public Accounting Firm\n\nBoard of Directors and Shareholders\n\nHawkins, Inc.\n\nOpinion on the financial statements\n\nWe have audited the accompanying consolidated balance sheet of Hawkins, Inc. (a Minnesota corporation) and subsidiaries (the “Company”) as of March 30, 2025, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years ended March 30, 2025 and March 31, 2024, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 30, 2025, and the results of its operations and its cash flows for the years ended March 30, 2025 and March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.\n\nBasis for opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe 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 evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n/s/ GRANT THORNTON LLP\n\nWe have served as the Company’s auditor from 2020 to 2025.\n\nMinneapolis, Minnesota\n\nMay 14, 2025 (except for Notes 3, 7, 15, 16 and 17, as to which the date is May 13, 2026)\n\n31\n\nHAWKINS, INC.\n\nCONSOLIDATED BALANCE SHEETS\n\n(In thousands, except share and per-share data)\n\nMarch 29, 2026March 30, 2025\n\nASSETS\n\nCURRENT ASSETS:\n\nCash and cash equivalents$3,914 $5,103 \n\nTrade accounts receivables, net139,796 131,795 \n\nInventories78,199 83,512 \n\nIncome taxes receivable891 2,864 \n\nPrepaid expenses and other current assets8,665 7,417 \n\nTotal current assets231,465 230,691 \n\nPROPERTY, PLANT, AND EQUIPMENT:\n\nLand21,223 18,679 \n\nBuildings and improvements193,210 163,913 \n\nMachinery and equipment175,495 150,981 \n\nTransportation equipment89,220 78,064 \n\nOffice furniture and equipment10,514 9,316 \n\n489,662 420,953 \n\nLess accumulated depreciation223,406 195,667 \n\nNet property, plant, and equipment266,256 225,286 \n\nOTHER ASSETS:\n\nRight-of-use assets16,840 13,449 \n\nGoodwill223,042 135,409 \n\nIntangible assets, net232,887 150,121 \n\nDeferred compensation plan assets12,812 11,185 \n\nOther assets2,988 3,907 \n\nTotal other assets488,569 314,071 \n\nTotal assets$986,290 $770,048 \n\nLIABILITIES AND SHAREHOLDERS’ EQUITY\n\nCURRENT LIABILITIES:\n\nAccounts payable — trade$59,835 $61,195 \n\nAccrued payroll and employee benefits20,092 19,659 \n\nShort-term lease liabilities3,000 2,900 \n\nContract liability1,580 — \n\nAccrued real estate taxes1,224 1,030 \n\nCurrent portion of deferred compensation liability1,334 538 \n\nContainer deposits1,383 1,914 \n\nCurrent portion of earnout liability4,529 — \n\nEnvironmental remediation7,700 7,700 \n\nOther current liabilities4,167 2,286 \n\nTotal current liabilities104,844 97,222 \n\n32\n\nMarch 29, 2026March 30, 2025\n\nLONG-TERM LIABILITIES:\n\nLong-term debt244,000 149,000 \n\nLong-term lease liabilities14,457 10,920 \n\nPension withdrawal liability2,763 3,155 \n\nDeferred income taxes25,110 22,356 \n\nDeferred compensation liability14,850 13,132 \n\nEarnout liability44,898 12,604 \n\nOther long-term liabilities1,359 1,367 \n\nTotal long-term liabilities347,437 212,534 \n\nTotal liabilities452,281 309,756 \n\nCOMMITMENTS AND CONTINGENCIES (Note 12)\n\nSHAREHOLDERS’ EQUITY:\n\nCommon shares; authorized: 60,000,000 shares of $0.01 par value; 20,752,138 and 20,684,621 shares issued and outstanding for 2026 and 2025, respectively\n208 207 \n\nAdditional paid-in capital32,678 24,094 \n\nRetained earnings500,142 434,259 \n\nAccumulated other comprehensive income981 1,732 \n\nTotal shareholders’ equity534,009 460,292 \n\nTotal liabilities and shareholders’ equity$986,290 $770,048 \n\nSee accompanying notes to consolidated financial statements.\n\n33\n\nHAWKINS, INC.\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(In thousands, except share and per-share data)\n\n  \nFiscal Year Ended\n\n March 29, 2026March 30, 2025March 31, 2024\n\nSales$1,083,696 $974,431 $919,162 \n\nCost of sales(838,641)(748,893)(725,526)\n\nGross profit245,055 225,538 193,636 \n\nSelling, general and administrative expenses(123,762)(106,364)(89,600)\n\nOperating income121,293 119,174 104,036 \n\nInterest expense, net(13,507)(5,432)(4,282)\n\nOther income1,554 641 1,391 \n\nIncome before income taxes109,340 114,383 101,145 \n\nIncome tax expense(27,792)(30,038)(25,782)\n\nNet income$81,548 $84,345 $75,363 \n\nWeighted average number of shares outstanding-basic20,736,815 20,803,872 20,864,348 \n\nWeighted average number of shares outstanding-diluted20,861,860 20,936,502 21,014,326 \n\nBasic earnings per share$3.93 $4.05 $3.61 \n\nDiluted earnings per share $3.91 $4.03 $3.59 \n\nCash dividends declared and paid per common share$0.7500 $0.7000 $0.6300 \n\nSee accompanying notes to consolidated financial statements.\n\n34\n\nHAWKINS, INC.\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(In thousands)\n\n \n\nFiscal Year Ended\n\nMarch 29, 2026March 30, 2025March 31, 2024\n\nNet income$81,548 $84,345 $75,363 \n\nOther comprehensive income, net of tax:\n\n   Unrealized (loss) gain on interest rate swap(751)(1,383)175 \n\nTotal other comprehensive (loss) income(751)(1,383)175 \n\nTotal comprehensive income$80,797 $82,962 $75,538 \n\nSee accompanying notes to consolidated financial statements.\n\n35\n\nHAWKINS, INC.\n\nCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY\n\n(In thousands, except share data)\n\n Common SharesAdditional\nPaid-in\nCapitalRetained\nEarningsAccumulated Other Comprehensive Income (Loss)Total\nShareholders’\nEquity\n\nSharesAmount\n\nBALANCE — April 2, 202320,850,454 $209 $44,443 $302,424 $2,940 $350,016 \n\nCash dividends declared and paid— — — (13,238)— (13,238)\n\nShare-based compensation expense— — 4,880 — — 4,880 \n\nVesting of restricted stock118,165 1 (1)— — — \n\nShares surrendered for payroll taxes(48,478)(1)(2,139)— — (2,140)\n\nESPP shares issued61,981 1 2,241 — — 2,242 \n\nShares repurchased(191,861)(2)(11,270)— — (11,272)\n\nOther comprehensive income, net of tax— — — — 175 175 \n\nNet income— — — 75,363 — 75,363 \n\nBALANCE — March 31, 202420,790,261 $208 $38,154 $364,549 $3,115 $406,026 \n\nCash dividends declared and paid— — — (14,635)— (14,635)\n\nShare-based compensation expense— — 6,498 — — 6,498 \n\nVesting of restricted stock94,305 1 (1)— — — \n\nShares surrendered for payroll taxes(34,047)(1)(2,540)— — (2,541)\n\nESPP shares issued40,045 1 2,657 — — 2,658 \n\nShares repurchased(205,943)(2)(20,674)— — (20,676)\n\nOther comprehensive income, net of tax— — — — (1,383)(1,383)\n\nNet income— — — 84,345 — 84,345 \n\nBALANCE — March 30, 202520,684,621 $207 $24,094 $434,259 $1,732 $460,292 \n\nCash dividends declared and paid— — — (15,665)— (15,665)\n\nShare-based compensation expense— — 8,573 — — 8,573 \n\nVesting of restricted stock68,553 1 (1)— — — \n\nShares surrendered for payroll taxes(28,590)— (3,028)— — (3,028)\n\nESPP shares issued27,554 — 3,040 — — 3,040 \n\nOther comprehensive loss, net of tax— — — — (751)(751)\n\nNet income— — — 81,548 — 81,548 \n\nBALANCE — March 29, 202620,752,138 $208 $32,678 $500,142 $981 $534,009 \n\nSee accompanying notes to consolidated financial statements.\n\n36\n\nHAWKINS, INC.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(In thousands)\n\n  \nFiscal Year Ended\n\n March 29, 2026March 30, 2025March 31, 2024\n\nCASH FLOWS FROM OPERATING ACTIVITIES:\n\nNet income$81,548 $84,345 $75,363 \n\nReconciliation to cash flows provided by operating activities:\n\nDepreciation and amortization52,542 39,948 31,803 \n\nChange in fair value of earnout liability(6,177)1,369 571 \n\nOperating leases3,982 3,475 2,708 \n\nGain on deferred compensation assets(1,554)(641)(1,391)\n\nDeferred income taxes3,053 461 (1,459)\n\nStock compensation expense8,573 6,498 4,880 \n\nGain from asset disposals(202)(61)(85)\n\nOther, net179 87 87 \n\nChanges in operating accounts (using) providing cash, net of acquisitions:\n\nTrade receivables(2,467)(11,230)21,399 \n\nInventories10,053 (6,572)19,921 \n\nAccounts payable(5,841)2,445 (828)\n\nAccrued liabilities2,195 476 10,708 \n\nLease liabilities(3,775)(3,468)(2,676)\n\nIncome taxes2,071 (4,807)(1,390)\n\nOther, net147 (1,229)(112)\n\nNet cash provided by operating activities144,327 111,096 159,499 \n\nCASH FLOWS FROM INVESTING ACTIVITIES:\n\nAdditions to property, plant, and equipment(58,239)(41,096)(40,151)\n\nAcquisitions(167,108)(87,400)(83,455)\n\nProceeds from asset disposals1,248 544 1,102 \n\nNet cash used in investing activities(224,099)(127,952)(122,504)\n\nCASH FLOWS FROM FINANCING ACTIVITIES:\n\nCash dividends paid(15,665)(14,635)(13,238)\n\nESPP shares issued3,040 2,658 2,242 \n\nShares surrendered for payroll taxes(3,028)(2,541)(2,140)\n\nShares repurchased— (20,676)(11,272)\n\nPayments for debt issuance costs(764)— — \n\nPayments on senior secured revolving loan(75,000)(60,000)(98,000)\n\nBorrowings on senior secured revolving loan170,000 110,000 85,000 \n\nNet cash provided by (used in) financing activities78,583 14,806 (37,408)\n\nNET DECREASE IN CASH AND CASH EQUIVALENTS(1,189)(2,050)(413)\n\nCASH AND CASH EQUIVALENTS - beginning of year5,103 7,153 7,566 \n\nCASH AND CASH EQUIVALENTS - end of year$3,914 $5,103 $7,153 \n\nSUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION-\n\nCash paid during the year for income taxes, net of refunds$22,685 $34,386 $28,631 \n\nCash paid for interest13,650 5,785 4,654 \n\nNoncash investing activities - Capital expenditures in accounts payable2,536 1,841 2,697 \n\nSee accompanying notes to consolidated financial statements.\n\n37\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nNote 1 — Nature of Business and Significant Accounting Policies\n\nNature of Business - Effective beginning with the first quarter of fiscal 2026, we realigned our reporting segments to reflect how we manage our operations and allocate resources. We believe this realignment better reflects the value our company provides to our customers and our evolution from a bulk commodity distributor into a specialty ingredients company. We now organize and manage our business by the following three segments, each of which meets the definition of reportable segments under ASC 280-10, Segment Reporting: Water Treatment, Food & Health Sciences, and Industrial Solutions. These segments are defined primarily by product and type of customer. Information presented in this annual report has been recast to align with the new segments.\n\n•Water Treatment Segment.  Our Water Treatment Group specializes in providing chemicals, filtration media and systems, equipment, services and solutions for potable water, municipal and industrial wastewater, industrial process water, mainly non-residential 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 multi-million-gallon-per-day facility.\n\n•Food and Health Sciences Segment. Our Food and Health Sciences Group specializes in processing and formulation solutions as well as ingredient distribution to manufacturers in the nutrition, food, pharmaceutical, and agricultural markets. This group offers a diverse product portfolio including base chemistry, acid based reactions, minerals, vitamins and amino acids, excipients, botanicals and herbs, sweeteners and enzymes, fertilizers, and food-grade and pharmaceutical salts and ingredients.\n\n•Industrial Solutions Segment.  Our Industrial Solutions Group specializes in providing industrial chemicals, products and services to industries such as industrial manufacturing, chemical processing, electronics, energy, plating, and surface finishing. This group’s principal products are acids and alkalis. This segment receives, stores and distributes various chemicals in bulk quantities, including liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia and potassium hydroxide. They perform customer blending of chemicals according to customer formulas and specifications and repackage bulk industrial chemicals to sell in smaller quantities to our customers. The Industrial Solutions group relies on a specially trained sales staff that works directly with customer on their specific needs. This group conducts its business primarily through manufacturing locations and terminal operations.\n\nFiscal Year - Our fiscal year is a 52 or 53-week year ending on the Sunday closest to March 31. Our fiscal 2024, 2025, and 2026 are each 52 weeks.\n\nPrinciples of Consolidation - The consolidated financial statements include the accounts of Hawkins, Inc. and its wholly-owned subsidiaries. All intercompany transactions and accounts have been eliminated.\n\nEstimates - The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, particularly receivables, inventories, property, plant and equipment, right-of-use assets, goodwill, intangibles, deferred compensation plan assets, accrued expenses, environmental remediation, short-term and long-term lease liabilities, pension withdrawal liability, deferred compensation liability, earnout liability, income taxes and related accounts and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.\n\nRevenue Recognition - Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. Revenue is recognized when we satisfy our performance obligations under the contract. We recognize revenue upon transfer of control of the promised products to the customer, with revenue recognized at the point in time the customer obtains control of the products. Net sales include products and shipping charges, net of estimates for product returns and any related sales rebates. We estimate product returns based on historical return rates. Using probability assessments, we estimate sales rebates expected to be paid over the term of the contract. The majority of our contracts have a single performance obligation and are short term in nature. Less than 5% of our Water Treatment Group revenue relates to construction and engineering contracts that involve the design, engineering, and construction of long-lived assets. These contracts generally have a single performance obligation that is satisfied over time. Revenue is recognized over time using cost-to-cost input method based on costs incurred relative to total estimated costs. Costs and estimated earnings in excess of amounts billed are recorded as contract assets, while billings in excess of costs incurred and estimated earnings are recorded as contract liabilities. Contract assets are reclassified to accounts receivable when our right to payment becomes unconditional. We had no contract assets as of March 29, 2026. Contract liabilities were $1.6 million as of March 29, 2026.\n\n38\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nThere were no contract assets or contract liabilities as of March 30, 2025. Sales taxes that are collected from customers and remitted to governmental authorities 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 incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized in an amount estimated based on historical experience and contractual obligations.\n\nShipping 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.\n\nFair Value Measurements - The financial assets and liabilities that are re-measured and reported at fair value for each reporting period are an interest rate swap, marketable securities held in a deferred compensation retirement plan, and earnout liabilities recorded in connection with the acquisitions of Water Solutions Unlimited, Inc. (\"Water Solutions\") and WaterSurplus, which are based on the achievement of certain targets. We do not have any nonfinancial assets or liabilities that are recognized or disclosed at fair value on a recurring basis in our consolidated financial statements.\n\nAssets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:\n\nLevel 1:  Valuation is based on quoted prices in active markets for identical assets or liabilities.\n\nLevel 2:  Valuation is based on quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for the asset or liability.\n\nLevel 3:  Valuation is based upon unobservable inputs for the asset or liability that are supported by little or no market activity. These fair values are determined using pricing models for which the assumptions utilize management’s estimates or market participant assumptions.\n\nIn 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.\n\nCash 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 institutions with strong credit ratings, typically exceed federally insured limits.\n\nTrade Receivables and Concentrations of Credit Risk - Financial instruments that potentially subject us to a concentration of credit risk consist principally of trade receivables. We sell our principal products to a large number of customers across a variety industries. As of March 29, 2026, no single customer represented more than 10% of our total trade receivables. As of March 30, 2025, we had a significant concentration of credit risk, with a single customer representing approximately 11% of our total trade receivables. We do not believe there are other significant concentrations of credit risk related to customers operating in a particular industry or geographic area that would materially impact us in the near term.\n\nTo reduce credit risk, we routinely 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 reporting period. Our receivable allowance is based on an estimate of expected credit losses, with the estimate based on a number of qualitative and quantitative factors that, based on collection experience, may have an impact on repayment risk and ability to collect.\n\nInventories - Inventories, consisting primarily of finished goods, are primarily valued at the lower of cost or net realizable value, with cost for approximately 73% of our inventory determined using the last-in, first-out (“LIFO”) method. Cost for the other 27% of our total inventory is determined using the first-in, first-out (“FIFO”) method.\n\n39\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nLeases - We determine if an arrangement is a lease at inception. Right-of-use (\"ROU\") assets include operating leases. Lease liabilities for operating leases are classified in \"short-term lease liabilities\" and \"long-term lease liabilities\" in our consolidated balance sheet.\n\nROU assets and related liabilities 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 information available at commencement date in determining the present value of lease payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.\n\nLease 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.\n\nProperty, Plant and Equipment - Property is stated at cost and depreciated or amortized over the lives of the assets, using the straight-line method. Property acquired in a business combination is recorded at the fair value of the assets on the date of acquisition. Estimated 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 transportation equipment and office furniture and equipment including computer systems. Leasehold improvements are amortized over the lesser of their estimated useful lives or the remaining lease term. Depreciation and amortization expense is recorded in our Consolidated Statements of Income within cost of sales and selling, general and administrative expense, depending on the use of the underlying asset. We recorded depreciation expense of $31.3 million for fiscal 2026, $27.2 million for fiscal 2025 and $23.3 million for fiscal 2024.\n\nSignificant improvements that add to productive capacity or extend the lives of properties are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts and any related gains or losses are included in income.\n\nWe 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 reductions 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 estimate future cash flows and the fair value of long-lived assets. We did not incur any asset write-off charges in fiscal 2026, fiscal 2025, or fiscal 2024 related to the impairment of long-lived assets.\n\nGoodwill and Identifiable Intangible Assets - Goodwill represents the excess of the cost of acquired businesses over the fair value of identifiable tangible net assets and identifiable intangible assets purchased. Goodwill is tested at least annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. Our annual test for impairment is as of the first day of our fourth fiscal quarter. As of December 29, 2025, we performed an analysis of qualitative factors for our Water Treatment, Food and Health Sciences, and Industrial Solutions reporting units to determine whether it is more likely than not that the fair value of any of these reporting units was less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. Based on management’s analysis of qualitative factors, we determined that it was not necessary to perform a quantitative goodwill impairment test for any of these reporting units. Goodwill impairment assessments were also completed in the fourth quarters of fiscal 2025 and 2024 and, similarly, we did not record a goodwill impairment charge.\n\nOur primary identifiable intangible assets include customer relationships, trademarks and tradenames acquired in previous business acquisitions. Identifiable intangible assets with finite lives are amortized whereas identifiable intangible assets with indefinite lives are not amortized. The values assigned to the intangible assets with finite lives are being amortized on average over a remaining useful life of approximately 11 years. Identifiable intangible assets that are subject to amortization 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 2026, 2025 or 2024. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. The impairment test consists of a qualitative assessment to determine whether it is more likely than not that the asset is impaired. Based on management’s analysis of qualitative factors, we determined that it was not necessary to perform an annual quantitative impairment test for fiscal 2026, 2025 or 2024.\n\n40\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nBusiness Combinations - We record business combinations using the acquisition method of accounting. Under the acquisition method of accounting, identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. The excess of the purchase price over the estimated fair value is recorded as goodwill. Changes in the estimated fair values of net assets recorded for acquisitions prior to the finalization of more detailed analysis, but not to exceed one year from the date of acquisition, will adjust the amount of the purchase price allocable to goodwill. Measurement period adjustments are reflected in the period in which they occur.\n\nIncome Taxes - Deferred taxes are provided for differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation 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 penalties related to income taxes as income tax expense in the Consolidated Statements of Income.\n\nStock-Based Compensation - We account for stock-based compensation on a fair value basis. The estimated grant date fair value of each stock-based award is recognized in expense over the requisite service period (generally the vesting period). Non-vested share awards are recorded as expense over the requisite service periods based on the stock price on the date of grant.\n\nEarnings 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.\n\nBasic and diluted EPS were calculated using the following:\n\nMarch 29, 2026March 30, 2025March 31, 2024\n\nWeighted average common shares outstanding — basic20,736,815 20,803,872 20,864,348 \n\nDilutive impact of stock performance units and restricted stock125,045 132,630 149,978 \n\nWeighted average common shares outstanding — diluted20,861,860 20,936,502 21,014,326 \n\nThere were no shares or stock options excluded from the calculation of weighted average common shares for diluted EPS for fiscal 2026, 2025 or 2024.\n\nDerivative Instruments and Hedging Activities - 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 portion 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 reporting date. Changes in the fair value of a derivative that is highly effective, and that is designated and qualifies as a cash flow hedge, are recorded in other comprehensive income, until 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 ineffective, changes in the fair value are recognized in the Consolidated Statements of Income.\n\nSelling, General and Administrative Expenses - Our selling, general and administrative expenses consist of expenses related to selling products, including personnel and related expenses, amortization of intangibles, marketing and promotion expenses, and travel expenses; and administrative expenses, primarily personnel costs, related to certain executive officers, information technology, accounting and human resources; and the fair value accretion of any earnout liabilities.\n\nRecently Issued Accounting Pronouncements\n\nThe Financial Accounting Standards Board (\"FASB\") periodically issues Accounting Standards Updates (\"ASUs\") that amend the Financial Accounting Standards Codification (\"ASC\"). We evaluate the impact of the newly issued accounting guidance to determine the effect, if any, on our consolidated financial statements and related disclosures.\n\nIn December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarified interim reporting requirements, improves the organization of interim disclosure guidance, and introduces a disclosure principle for material events occurring since the end of the last annual reporting period. The guidance is effective for interim periods in fiscal years beginning after December 15, 2027, our fiscal 2029. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements or interim disclosures in our first quarter, fiscal 2029 10-Q and periodic reports thereafter.\n\n41\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nIn September 2025, the FASB issued ASU 2025-06, Intangibles, Goodwill, and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements, which modernizes the recognition guidance requiring entities to begin capitalizing software costs when both of the following occur: (1) Management has authorized and committed funding to the software project and (2) It is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, our fiscal 2029, and interim periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statement disclosures in our first quarter, fiscal 2029 10-Q and periodic reports thereafter.\n\nIn November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires public entities to disclose, within the footnotes to the financial statements, disaggregated information about certain income statement expense captions, including disclosure of amounts for purchases of inventory, employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, our fiscal 2028, and interim periods within fiscal years beginning after December 15, 2027, our fiscal 2029, on a prospective basis, with early adoption and retrospective application permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statement disclosures in our Form 10-K for fiscal 2028 and periodic reports thereafter.\n\nRecently Adopted Accounting Pronouncements\n\nIn December 2023, the FASB issued ASU 2023-09, Income Tax Disclosures, which enhances the transparency and decision-usefulness of income tax disclosures, including information to better assess how an entity's operations, tax risks, and tax planning strategies affect it effective tax rate and future cash flows. We adopted ASU 2023-09 on a prospective basis effective for our fiscal year ended March 29, 2026. The adoption did not impact our consolidated financial statements, but resulted in incremental disclosures within the footnotes of our consolidated financial statements. Refer to Note 13, Income Taxes for the additional disclosures required by this standard.\n\nNote 2 — Acquisitions\n\nGeneral\n\nWe generally pursue business combinations to strengthen our position in existing markets, increase our market share and product offerings and expand into new markets. Acquisitions are accounted for under the acquisition method of accounting. For each acquisition, the excess of the purchase consideration over the fair value of the net assets acquired and liabilities assumed is recorded as goodwill, which generally represents the combined value of our existing resources with the organizational talent of the acquired companies’ respective management teams to maximize efficiencies, market share growth and overall financial performance. For each acquisition, we complete our allocation of purchase price to the fair values of acquired assets and liabilities within a one-year measurement period.\n\nFor each acquisition completed in fiscal 2024, fiscal 2025 and fiscal 2026, the results of operations since the acquisition date and the assets are included in our Water Treatment segment, with the exception of one immaterial acquisition in the second quarter of fiscal 2026 that was in our Food and Health Sciences segment. Costs associated with each acquisition were not material and were expensed as incurred.\n\nFiscal 2026 Material Acquisitions\n\nAcquisition of WaterSurplus, Inc.: On April 25, 2025, we acquired substantially all of the assets and assumed certain liabilities of Surplus Management, Inc. d/b/a WaterSurplus (“WaterSurplus”) for an initial purchase price of approximately $149.9 million under the terms of an asset purchase agreement by and among WaterSurplus and related entities and their shareholders, Panther Acquisition Corporation, and Hawkins, Inc., as well as a related real estate purchase agreement. In addition, we may be obligated to pay an additional earnout amount based on a target of accumulated gross profit for the first five years after the acquisition. The maximum earnout liability of $53.7 million was discounted and recorded at the estimated present value of $43.0 million at the acquisition date. The recognition of the earnout liability represented a noncash investing activity, as no cash was paid at inception. WaterSurplus is based in Rockford, IL and delivers sustainable water treatment solutions to customers throughout the United States.\n\n42\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nThe following table summarizes the purchase consideration and fair values of assets acquired and liabilities assumed as of the date of acquisition:\n\n(In thousands)\n\nCash paid$149,876 \n\nPresent value of earnout liability43,000\n\nTotal purchase consideration$192,876 \n\nTrade accounts receivable$3,030 \n\nInventories4,325\n\nOther current assets933\n\nProperty, plant, and equipment12,887\n\nIntangible assets\n\nCustomer relationships76,000\n\nTrade names6,200\n\nTechnology12,000\n\nAccounts payable — trade(2,169)\n\nOther current liabilities (2,934)\n\nTotal fair value of assets acquired and liabilities assumed$110,272 \n\nGoodwill$82,604 \n\nThe expected useful lives of the acquired intangible assets are 15 years for customer relationships, 15 years for trade names and 10 years for technology. The goodwill recognized as a result of this acquisition is expected to be deductible for tax purposes. We have completed the purchase price allocation. The results of operations since the acquisition date and the assets are included in our Water Treatment segment. Costs associated with this transaction were not material and were expensed as incurred.\n\nThe following pro forma information has been prepared as if the WaterSurplus acquisition and the borrowing that financed the acquisition had occurred as of the beginning of the earliest fiscal period presented. The unaudited pro forma information is not necessarily indicative of what our consolidated results of operations actually would have been had the acquisition occurred at the beginning of each fiscal year, nor is it indicative of our future operational results.\n\nFiscal year ended\n\n(In thousands, except per share data)March 29, 2026March 30, 2025\n\nPro forma sales$1,085,851 $1,007,482 \n\nPro forma net income$82,434 $75,947 \n\nPro forma basic earnings per share$3.98 $3.65 \n\nPro forma diluted earnings per share$3.95 $3.63 \n\nThe unaudited pro forma financial information above includes non-recurring adjustments directly attributable to the acquisition. These adjustments include (a) a non-recurring increase to costs of goods sold of approximately $1.1 million related to the fair value step-up of acquired inventory, which is not expected to continue beyond the sell-through of the inventory, and (b) acquisition-related costs of approximately $1.0 million, primarily consisting of professional fees, which are one-time in nature and not expected to recur.\n\nSales of WaterSurplus of $34.6 million for the Fiscal 2026 were included in our consolidated statements of income. Operating loss of WaterSurplus of $3.9 million for Fiscal 2026 was also included in our condensed consolidated statements of income.\n\nInclusive of five additional immaterial acquisitions not discussed above, total cash consideration for the acquisitions completed in the twelve months ended March 29, 2026 was $167.1 million.\n\n43\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nFiscal 2025 Material Acquisitions\n\nWe completed four acquisitions in fiscal 2025, including the previously announced acquisitions shown below.\n\nAmerochem Corporation (\"Amerochem\") was acquired on January 31, 2025 for $44.0 million. Located in North Carolina, Amerochem distributed water treatment chemicals and equipment to its customers located primarily in North Carolina.\n\nWaterguard, Inc. (\"Waterguard\") was acquired on October 30, 2024 for $18.0 million. Located in North Carolina, Waterguard distributed water treatment chemicals and equipment to its customers located primarily in North Carolina.\n\nIntercoastal Trading, Inc. (\"Intercoastal\") was acquired on June 3, 2024 for $22.0 million. Located in Maryland, Intercoastal distributed water treatment chemicals and equipment to its customers in Maryland, Delaware, and Virginia.\n\nInclusive of one immaterial acquisition not discussed above, total cash consideration for the fiscal 2025 acquisitions was $87.4 million.\n\nNote 3 — Revenue\n\nOur revenue arrangements generally consist of a single performance obligation to transfer promised goods or services. We disaggregate revenues from contracts with customers by both operating segments and types of product sold. Reporting by operating segment is pertinent to understanding our revenues, as it aligns to how we review the financial performance of our operations. Types of products sold within each operating segment help us to further evaluate the financial performance of our segments.\n\nThe following table disaggregates external customer net sales by major revenue stream:\n\nFiscal Year Ended March 29, 2026:\n\n(In thousands)Water\nTreatmentFood and Health SciencesIndustrial SolutionsTotal\n\nManufactured, blended or repackaged products (1)\n$488,620 $— $167,710 $656,330 \n\nBulk products (2)\n49,575 — 46,579 96,154 \n\nNutrition— 137,986 — 137,986 \n\nFood— 99,278 — 99,278 \n\nPharmaceutical— 27,871 — 27,871 \n\nAgricultural— 52,565 — 52,565 \n\nOther5,108 3,000 5,404 13,512 \n\nTotal external customer sales$543,303 $320,700 $219,693 $1,083,696 \n\nFiscal Year Ended March 30, 2025:\n\n(In thousands)Water\nTreatmentFood and Health SciencesIndustrial SolutionsTotal\n\nManufactured, blended or repackaged products (1)\n$400,849 $— $152,087 $552,936 \n\nBulk products (2)\n39,977 — 47,885 87,862 \n\nNutrition— 144,434 — 144,434 \n\nFood— 103,403 — 103,403 \n\nPharmaceutical— 25,864 — 25,864 \n\nAgricultural— 45,727 — 45,727 \n\nOther5,663 3,132 5,410 14,205 \n\nTotal external customer sales$446,489 $322,560 $205,382 $974,431 \n\n44\n\nHAWKINS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nFiscal Year Ended March 31, 2024:\n\n(In thousands)Water\nTreatmentFood and Health SciencesIndustrial SolutionsTotal\n\nManufactured, blended or repackaged products (1)\n$327,188 $— $163,655 $490,843 \n\nBulk products (2)\n32,349 — 50,732 83,081 \n\nNutrition— 145,460 — 145,460 \n\nFood— 114,516 — 114,516 \n\nPharmaceutical— 20,546 — 20,546 \n\nAgricultural— 51,456 — 51,456 \n\nOther3,752 2,582 6,926 13,260 \n\nTotal external customer sales$363,289 $334,560 $221,313 $919,162 \n\n(1)This line includes our non-bulk specialty products in our Water Treatment and Industrial Solutions segments that we either manufacture, blend, repackage, resell in their original form, or direct ship to our customers in smaller quantities, and equipment and services we provide for our customers.\n\n(2)This line includes bulk products in our Water Treatment and Industrial Solutions segments that we do not modify in any way, but receive, store, and ship from our facilities, or direct ship to our customers in large quantities.\n\nNote 4 — Derivative Instruments\n\nWe have in place an interest rate swap agreement to manage the risk associated with a portion of our variable-rate long-term debt. We do not utilize derivative instruments for speculative purposes. The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange of the underlying notional amount on which the interest payments are calculated. The notional 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 accounting treatment. For so long as the hedge is effective, changes in fair value of the cash flow hedge are recorded in other comprehensive income or loss (net of tax) until income or loss from the cash flows of the hedged item is realized.\n\nFor fiscal 2026 and 2025, we recorded $0.8 million and $1.4 million, respectively, in other comprehensive income related to unrealized losses, net of tax, on our cash flow hedge. For fiscal 2024, we recorded $0.2 million in other comprehensive income related to unrealized gains, net of tax, on our cash flow hedge. The carrying value of our cash flow hedge included in other long-term assets on our consolidated balance sheets was $1.3 million as of March 29, 2026 and $2.4 million as of March 30, 2025.\n\nBy their nature, derivative instruments are subject to market risk. Derivative instruments are also subject to credit risk associated with counterparties to the derivative contracts. Credit risk associated with derivatives is measured based on the replacement cost should the counterparty with a contract in a gain position to us fail to perform under the terms of the contract. While the current interest rate swap is in effect, we do not anticipate nonperformance by the counterparty.\n\nNote 5 – Fair Value Measurements\n\nOur financial assets and liabilities 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 transaction between market participants at the measurement date (exit price). The carrying values 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, the carrying value of our debt also approximates fair value.  \n\nAssets and Liabilities 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 entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.\n\n \n\n45\n\nOur financial assets that are re-measured and reported at fair value for each reporting period are an interest rate swap, marketable securities held in a deferred compensation retirement plan, and the earnout liabilities recorded in conjunction with the acquisitions of Water Solutions and WaterSurplus. The interest rate swap and assets held in a deferred compensation retirement plan are classified as other long-term assets on our balance sheets, with the portion of the deferred compensation retirement plan assets expected to be paid within twelve months classified as current assets. The Water Solutions earnout liability is classified as other current liabilities on our balance sheets. The WaterSurplus earnout liability is classified as a long-term liability on our balance sheets. The fair value of the interest rate swap is determined by the respective counterparties based on interest rate changes. Interest rate swaps are valued based on observable interest rate yield curves for similar instruments. The deferred compensation plan assets relate to contributions made to a non-qualified compensation 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 compensation is based on the quoted market prices for the mutual funds at the end of the period.\n\nThe earnout liabilities recorded in conjunction with the acquisitions of Water Solutions and WaterSurplus are based upon achieving certain targets. The Water Solutions earnout is based on a target of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in year three of the acquisition. The earnout liability was valued based upon a risk-neutral pricing analysis within a Monte Carlo simulation framework, which is a Level 3 input. The WaterSurplus earnout liability is based on a target of accumulated gross profit for the first five years of the acquisition. The earnout liability was discounted and recorded at the present value of the anticipated maximum payout amount, which is a Level 3 input. The earnout liabilities are adjusted to fair value at each reporting date until settled. Changes in fair value are included in selling, general and administrative expenses in our Condensed Consolidated Statements of Income.\n\n \n\nThe following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis as of March 29, 2026 and March 30, 2025:\n\n(In thousands)20262025\n\nAssets\n\nDeferred compensation plan assetsLevel 1$14,146 $11,723 \n\nInterest rate swapLevel 21,323 2,373 \n\nLiabilities\n\nWaterSurplus earnout liabilityLevel 344,898 — \n\nWater Solutions earnout liabilityLevel 34,529 12,604 \n\nThe changes in the earnout liability measured at fair value using Level 3 inputs were as follows:\n\n(In thousands)\n\nEarnout liability at March 30, 2025\n$12,604 \n\nAddition for acquisition of WaterSurplusLevel 343,000 \n\nFair value adjustments to WaterSurplus earnout liabilityLevel 31,898 \n\nFair value adjustments to Water Solutions earnout liabilityLevel 3(8,075)\n\nEarnout liability at March 29, 2026\n$49,427 \n\nNote 6 — Inventories\n\nInventories at March 29, 2026 and March 30, 2025 consisted of the following:\n\n20262025\n\n(In thousands)  \n\nInventory (FIFO basis)$102,589 $106,357 \n\nLIFO reserve(24,390)(22,845)\n\nNet inventory$78,199 $83,512 \n\nWe use the last in, first out (“LIFO”) method of valuing the majority of our inventory, which causes the most recent product costs to be recognized in our consolidated statements of income.\n\n46\n\nNote 7 — Goodwill and Other Identifiable Intangible Assets\n\nIn connection with the segment realignment, goodwill was reallocated to our new reporting units based on their relative fair values as of the realignment date. Prior period amounts have been recast to reflect our current segment reporting structure, which now reflects the reallocation of $1.2 million from the Industrial Solutions segment to the Food and Health Sciences segment. The reallocation related to the segment realignment had no impact on consolidated total goodwill.\n\nWe performed a quantitative goodwill impairment test for each reporting unit affected by the realignment. The fair value of each reporting unit exceeded its respective carrying amount, and therefore, no goodwill impairment was recorded.\n\nThe carrying amounts of goodwill for each of our three reportable segments were as follows:\n\n(In thousands)Water TreatmentFood and Health SciencesIndustrial SolutionsTotal\n\nBalance as of March 31, 2024\n$51,959 $46,149 $5,291 $103,399 \n\nAddition due to acquisitions32,010 — — 32,010 \n\nBalance as of March 30, 2025\n$83,969 $46,149 $5,291 $135,409 \n\nAddition due to acquisitions86,911 722 — 87,633 \n\nBalance as of March 29, 2026\n$170,880 $46,871 $5,291 $223,042 \n\nAs of March 31, 2024 the Company's goodwill balance included accumulated impairment losses of $39.1 million related to its Food and Health Sciences segment. No goodwill impairment charges were recognized during fiscal 2026 or fiscal 2025.\n\nThe following is a summary of our identifiable intangible assets as of March 29, 2026 and March 30, 2025:\n\n 2026\n\n Gross AmountAccumulated\nAmortizationNet Carrying Value\n\n(In thousands)   \n\nFinite-life intangible assets:\n\nCustomer relationships$283,654 $(75,216)$208,438 \n\nTrademarks and trade names21,622 (9,486)12,136 \n\nOther finite-life intangible assets16,526 (5,440)11,086 \n\nTotal finite-life intangible assets321,802 (90,142)231,660 \n\nIndefinite-life intangible assets1,227 — 1,227 \n\nTotal intangible assets$323,029 $(90,142)$232,887 \n\n \n\n 2025\n\n Gross AmountAccumulated\nAmortizationNet Carrying Value\n\n(In thousands)   \n\nFinite-life intangible assets:\n\nCustomer relationships$198,364 $(57,311)$141,053 \n\nTrademarks and trade names14,970 (7,368)7,602 \n\nOther finite-life intangible assets4,410 (4,171)239 \n\nTotal finite-life intangible assets217,744 (68,850)148,894 \n\nIndefinite-life intangible assets1,227 — 1,227 \n\nTotal intangible assets$218,971 $(68,850)$150,121 \n\nIntangible asset amortization expense was $21.3 million during fiscal 2026, $12.8 million during fiscal 2025, and $8.5 million during fiscal 2024.\n\n47\n\nThe estimated future amortization expense for identifiable intangible assets is as follows:\n\n(In thousands)Intangible Assets\n\nFiscal 2027$21,625 \n\nFiscal 202821,017 \n\nFiscal 202920,994 \n\nFiscal 203020,973 \n\nFiscal 203120,936 \n\nThereafter126,115 \n\nTotal$231,660 \n\nNote 8 – Debt\n\nWe are party to a second amended and restated credit agreement with U.S. Bank National Association (“U.S. Bank”) as administrative agent, sole lead arranger and sole book runner, and the other lenders from time to time party thereto (collectively, the “Lenders”), dated as of March 31, 2022 (and as amended, restated or modified from time to time, the “Credit Agreement”). A Joinder, Consent and Second Amendment dated April 25, 2025 increased the revolving commitment under the Credit Agreement to provide us with senior secured revolving credit facilities (the “Revolving Loan Facility”) totaling $400.0 million. A Third Amendment dated October 15, 2025, modified terms related to qualified receivables transactions, as defined in the Credit Agreement. The Revolving Loan Facility includes a $10.0 million letter of credit subfacility and $25.0 million swingline subfacility. The Revolving Loan Facility is secured by substantially all of our personal property assets and those of our subsidiaries.\n\nIn April, 2026, we drew approximately $150 million of additional proceeds to acquire substantially all of the assets of WaterSurplus as discussed in Note 2. We may use other proceeds from the Revolving Loan Facility for working capital, capital expenditures, restricted payments and other acquisitions permitted under the Credit Agreement, and other general corporate purposes.\n\nWe paid fees of approximately $1.0 million in fiscal 2026 associated with the April 2025 refinancing. The Revolving Loan Facility is scheduled to mature on April 25, 2030.\n\nBorrowings under the Revolving Loan Facility bear interest at a variable rate based on term SOFR plus a margin. We have an interest rate swap in place to manage the risk associated with a portion of our variable-rate debt. The notional amount of the swap agreement is $60 million.\n\nAt March 29, 2026, the effective interest rate on our borrowings was 4.4%. In addition to paying interest on the outstanding principal under the Revolving Loan Facility, we are required to pay a commitment fee on the unutilized portion of the facility. The commitment fee was between 0.15% and 0.25%, depending on our leverage ratio.\n\nThe Credit Agreement requires us to maintain (a) a minimum fixed charge coverage ratio of 1.15 to 1.00 and (b) a maximum total cash flow leverage ratio of 3.0 to 1.0. The Credit Agreement also contains other customary affirmative and negative covenants, including covenants that restrict our ability to incur additional indebtedness, dispose of significant assets, make certain investments, including any acquisitions other than permitted acquisitions, make certain payments, enter into sale and leaseback transactions, grant liens on our assets or enter into rate management transactions, subject to certain limitations. We are permitted to make distributions, pay dividends and repurchase shares so long as no default or event of default existed or would exist as a result thereof. As of March 29, 2026, we were in compliance with all required covenants.\n\nDebt at March 29, 2026 and March 30, 2025 consisted of the following:\n\n(In thousands)20262025\n\nRevolving Loan Facility$244,000 $149,000 \n\nAnnual maturities of debt are as follows:\n\n(In thousands)20272028202920302031Thereafter\n\nMaturities$— $— $— $— $244,000 $— \n\n48\n\nNote 9 — Share-Based Compensation \n\nPerformance-Based Restricted Stock Units.  Our Board of Directors has approved a performance-based equity compensation arrangement for our executive officers. This performance-based arrangement provides for the grant of performance-based restricted stock units under our 2019 Equity Incentive Plan (the \"2019 Plan\") 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 executive officer will be determined when our final financial information becomes available after the applicable fiscal year and will be between zero shares and 58,353 shares in the aggregate for fiscal 2026. The restricted shares issued, if any, will fully vest two years after the end of the fiscal year on which the performance is based. We record the compensation expense for the outstanding performance share units and then-converted restricted stock over the life of the awards.\n\nThe following table represents the restricted stock activity for fiscal 2024, 2025, and 2026:\n\n SharesWeighted-\nAverage Grant\nDate Fair Value\n\nOutstanding at beginning of fiscal 2024\n189,258 $34.64 \n\nGranted61,819 43.06 \n\nVested(105,600)31.74 \n\nOutstanding at end of fiscal 2024\n145,477 $40.33 \n\nGranted75,428 76.60 \n\nVested(83,658)38.31 \n\nOutstanding at end of fiscal 2025\n137,247 $61.49 \n\nGranted61,418 119.67 \n\nVested(61,819)43.06 \n\nOutstanding at end of fiscal 2026\n136,846 $95.93 \n\nWe recorded compensation expense on performance-based restricted stock of approximately $6.6 million for fiscal 2026, $5.0 million for fiscal 2025 and $3.7 million for fiscal 2024, substantially 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 $2.7 million in fiscal 2026, $3.2 million in fiscal 2025 and $3.4 million in fiscal 2024.\n\nUntil the performance-based restricted stock units result in the issuance of restricted stock, the amount of expense recorded each period is dependent upon our estimate of the number of shares that will ultimately be issued and our then-current common share price. Upon issuance of restricted stock, we record compensation expense over the remaining vesting period using the award date closing price. Unrecognized compensation expense related to non-vested restricted stock and non-vested restricted share units as of March 29, 2026 was $6.4 million and is expected to be recognized over a weighted average period of 1.0 year.\n\nRestricted Stock Awards.  As part of their retainer, our directors, other than the Chief Executive Officer, receive restricted stock for their Board services. The restricted stock awards are under our 2019 Plan and are expensed over a one-year vesting period, based on the market value on the date of grant.\n\nDuring the twelve months ended March 29, 2026, certain employees from the WaterSurplus acquisition received restricted stock awards under the 2019 Plan, primarily to incentivize their continued service. The restricted stock awards will be expensed over a three-year vesting period, based on the market value on the date of grant.\n\n49\n\nThe following table represents the restricted stock activity for fiscal 2024, 2025, and 2026:\n\n SharesWeighted-\nAverage Grant\nDate Fair Value\n\nOutstanding at beginning of fiscal 2024\n12,565 $38.98 \n\nGranted10,647 46.00 \n\nVested(12,565)38.98 \n\nOutstanding at end of fiscal 2024\n10,647 $46.00 \n\nGranted6,734 103.90 \n\nVested(10,647)46.00 \n\nOutstanding at end of fiscal 2025\n6,734 $103.90 \n\nGranted13,109 147.82 \n\nVested(6,734)103.90 \n\nOutstanding at end of fiscal 2026\n13,109 $147.82 \n\nAnnual expense related to the value of restricted stock was $1.0 million in fiscal 2026, $0.6 million in fiscal 2025, and $0.5 million in fiscal 2024, and was recorded in SG&A expense in the Consolidated Statements of Income. Unrecognized compensation expense related to non-vested restricted stock awards as of March 29, 2026 was $1.2 million and is expected to be recognized over a weighted average period of 1.6 years.\n\nNote 10 — Share Repurchases\n\nOur 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 negotiated transactions subject to applicable securities laws and regulations. Upon repurchase of the shares, we reduce our common shares for the par value of the shares, with the excess applied against additional paid-in capital. No shares were repurchased during fiscal 2026. We repurchased 205,943 common shares at an aggregate purchase price of $20.7 million during fiscal 2025. We repurchased 191,861 common shares at an aggregate purchase price of $11.3 million during fiscal 2024. As of March 29, 2026, 731,544 shares remained available to be purchased under the share repurchase program.\n\nNote 11 — Retirement Plans\n\nCompany Sponsored Plans. The majority of our non-bargaining unit employees are eligible to participate in a company-sponsored profit-sharing plan. Contributions are made at our discretion subject to a maximum amount allowed under the Internal Revenue Code (“IRC”). The profit sharing plan contribution level for each employee depends upon date of hire, and was 2.5% or 5.0% of each employee’s eligible compensation for fiscal 2026, 2025 and 2024. We also have in place a retirement plan covering our collective bargaining unit employees. The retirement plan provides for a contribution of 2.5% or 5.0% of each employee’s eligible annual wages depending on their hire date. In addition to the employer contributions described above, both the profit-sharing plan and the retirement 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 compensation.\n\nWe have two employee stock ownership plans (“ESOPs”), one covering the majority of our non-bargaining unit employees and the other covering our collective bargaining unit employees. Contributions to the plan covering our non-bargaining unit employees are made at our discretion. Contributions 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 2026, 2025 and 2024.\n\nWe have a nonqualified deferred compensation 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 compensation plan for any plan year are not eligible for the profit-sharing plan contribution or the ESOP contributions described above for that plan year. Our contribution to the nonqualified deferred compensation plan for fiscal 2026, 2025, and 2024 was 10% of each employee’s eligible compensation, subject to the maximum amount allowed under the IRC.\n\n50\n\nWe have an employee stock purchase plan (“ESPP”) covering substantially 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 27,554 in fiscal 2026, 40,045 in fiscal 2025 and 61,981 in fiscal 2024.\n\nThe following represents the contribution expense for these company-sponsored plans for fiscal 2026, 2025 and 2024:\n\n(In thousands)202620252024\n\nNon-bargaining unit employee plans:\n\n   Profit sharing$3,112 $1,851 $2,340 \n\n   401(k) matching contributions4,669 4,111 3,564 \n\n   ESOP3,112 1,851 2,340 \n\nNonqualified deferred compensation plan1,591 1,662 2,060 \n\nBargaining unit employee plans685 712 652 \n\nESPP - all employees975 885 689 \n\nTotal contribution expense$14,144 $11,072 $11,645 \n\nIn 2013, we withdrew from a collectively bargained multi-employer 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.\n\nNote 12 — Commitments and Contingencies\n\nLitigation.  As of March 29, 2026, there were no material pending legal proceedings, other than ordinary routine litigation 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 matters are expensed as incurred.\n\nEnvironmental Remediation. In fiscal 2024, we recorded a liability of $7.7 million related to estimated remediation expenses associated with perchlorinated biphenyls (\"PCBs\") discovered in the soil at our Rosemount, Minnesota facility during an expansion project. This charge was recorded as an operating expense within cost of sales in our Consolidated Statements of Income. We acquired the property, which had prior heavy industrial use, in fiscal 2012. While the source of the PCBs is unknown, we have never brought PCBs onto the property or used PCBs on the site. The remediation liability is not discounted as management expects to incur these expenses within the next twelve months. Given the many uncertainties involved in assessing environmental matters, actual remediation costs could differ from our estimates. While additional remediation expenses are reasonably possible to be incurred in future periods if new information or conditions are identified, we are unable to reasonably estimate the amount or range of any such additional costs at this time. No expenses were charged against this liability during fiscal 2026 and fiscal 2025.\n\nAsset Retirement Obligations. We have three leases of land that contain terms that state that at the end of the lease term, we have a specified amount of time to remove the property and buildings. Including available lease extensions, these leases expire in 2029, 2033 and 2044. At that time, anything that remains on the land becomes the property of the lessor, and the lessor has the option to either maintain the property or remove the property at our expense. We have not been able to reasonably estimate the fair value of the asset retirement obligations, primarily due to the combination 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 expiration of the lease periods; the lessors do not have a history of terminating 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 accounting guidance related to asset retirement and environmental obligations, we have not recorded an asset retirement obligation as of March 29, 2026. We will continue to monitor the factors surrounding the requirement to record an asset retirement obligation and will recognize the fair value of a liability in the period in which it is incurred and a reasonable estimate can be made.\n\n51\n\nNote 13 — Income Taxes\n\nThe income tax information presented reflects the prospective adoption of ASU 2023-07. The adoption affected the disclosure requirement only and did not result in any changes to income tax balances or amounts for periods prior to adoption.\n\nForeign operations are not material, and therefore our income tax provision consists primarily of U.S. federal and state income taxes.\n\nThe provisions for income taxes for fiscal 2026, 2025 and 2024 were as follows:\n\n202620252024\n\n(In thousands)  \n\nFederal — current$18,245 $22,944 $21,872 \n\nState — current6,484 6,633 5,369 \n\nTotal current24,729 29,577 27,241 \n\nFederal — deferred2,794 43 (1,146)\n\nState — deferred269 418 (313)\n\nTotal deferred3,063 461 (1,459)\n\nTotal provision$27,792 $30,038 $25,782 \n\nReconciliations of the provisions for income taxes to the applicable federal statutory income tax rate for fiscal 2026, 2025 and 2024 are listed below:\n\n2026\n\n(In thousands, except percentages)AmountPercentage\n\nStatutory federal income tax$22,961 21.0 %\n\nState income taxes, net of federal deduction (1)5,140 4.7 %\n\nNontaxable or nondeductible items827 0.8 %\n\nOther — net(1,136)(1.1)%\n\nTotal$27,792 25.4 %\n\n(1) The states that, in the aggregate, accounted for over 50 percent of the effect of the state and local income taxes shown above were Illinois, Minnesota, Wisconsin\n\n20252024\n\nStatutory federal income tax21.0 %21.0 %\n\nState income taxes, net of federal deduction5.0 %5.4 %\n\nOther — net0.3 %(0.9)%\n\nTotal26.3 %25.5 %\n\nCash paid for income taxes (net of refunds) consisted of the following:\n\n(In thousands)2026\n\nFederal$16,600 \n\nState\n\nMinnesota$1,575 \n\nOther States4,510 \n\nTotal$22,685\n\n52\n\nThe tax effects of items comprising our net deferred tax liability as of March 29, 2026 and March 30, 2025 are as follows:\n\n(In thousands)20262025\n\nDeferred tax assets:\n\nTrade receivables$136 $98 \n\nStock compensation accruals2,986 2,929 \n\nPension withdrawal liability815 955 \n\nLease liability4,472 3,731 \n\nInventories1,069 870 \n\nOther5,928 6,388 \n\nTotal deferred tax assets$15,406 $14,971 \n\nDeferred tax liabilities:\n\nPrepaid expenses$(1,391)$(1,363)\n\nExcess of tax over book depreciation(21,370)(18,143)\n\nIntangible assets(13,111)(13,549)\n\nROU asset(4,313)(3,631)\n\nUnrealized gain on interest rate swap(331)(641)\n\nTotal deferred tax liabilities$(40,516)$(37,327)\n\nNet deferred tax liabilities$(25,110)$(22,356)\n\nAs of March 29, 2026, the Company has determined that it is more likely than not that the deferred tax assets at March 29, 2026 will be realized either through future taxable income or reversals of taxable temporary differences.\n\nOn July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law, introducing significant amendments to U.S. tax legislation with varying effective dates. Key provision that impacts us is the expansion of bonus depreciation. We have incorporated these amendments into our fiscal 2026 tax provision, as applicable, and there was no material impact to our income tax expense or effective tax rate. We continue to evaluate the legislation.\n\nWe are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The tax years prior to our fiscal year ended April 2, 2023 are closed to examination by the Internal Revenue Service, and with few exceptions, state and local income tax jurisdictions.\n\nNote 14 – Leases\n\nLease Obligations. As of March 29, 2026, we were obligated under operating lease agreements for certain manufacturing facilities, warehouse space, the land on which some of our facilities sit, vehicles and information technology equipment. Our leases have remaining lease terms of 1 year to 19 years, some of which include options to extend the lease for up to 10 years.\n\nAs of March 29, 2026 and March 30, 2025, our operating lease components with initial or remaining terms in excess of one year were classified on the consolidated balance sheet within right-of-use assets, short-term lease liabilities and long-term lease liabilities.\n\nCash paid for leases was $3.8 million for the twelve months ended March 29, 2026 .\n\nTotal lease expense was $5.2 million for the twelve months ended March 29, 2026, $4.6 million for the twelve months ended March 30, 2025, and $4.0 million for the twelve months ended March 31, 2024, and includes leases less than 12 months in duration.\n\nOperating lease right-of-use assets of $6.9 million were recognized during the twelve months ended March 29, 2026, in exchange for lease liabilities. These non‑cash transactions are excluded from the statements of cash flows.\n\n53\n\nOther information related to our operating leases was as follows:\n\nMarch 29, 2026\n\nMarch 30, 2025\n\nLease Term and Discount Rate\n\nWeighted average remaining lease term (years)7.436.17\n\nWeighted average discount rate5.5 %4.5 %\n\nMaturities of lease liabilities as of March 29, 2026 were as follows:\n\n(In thousands)Operating Leases\n\nFiscal 2027$3,861 \n\nFiscal 20283,607 \n\nFiscal 20293,129 \n\nFiscal 20301,965 \n\nFiscal 20311,503 \n\nThereafter7,343 \n\nTotal$21,408 \n\nLess: Interest(3,951)\n\nPresent value of lease liabilities$17,457 \n\nNote 15 — Segment Information\n\nEffective beginning with the first fiscal quarter of fiscal 2026, we realigned our reporting segments to reflect organizational changes made and to reflect the way we manage our operations and allocate resources. We believe this realignment better reflects the value our company provides to our customers and our evolution from a bulk commodity distributor into a specialty ingredients company. Segment information for fiscal 2025 and fiscal 2024 has been recast to reflect the Company's current reportable segments after realignment. We organize and manage our business by the following three segments, which meet the definition of reportable segments under ASC 280-10, Segment Reporting: Water Treatment, Food and Health Sciences, and Industrial Solutions. These segments are defined primarily by product and type of customer.\n\n•Water Treatment Segment.  Our Water Treatment Group specializes in providing chemicals, filtration media and systems, equipment, services and solutions for potable water, municipal and industrial wastewater, industrial process water, mainly non-residential 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 multi-million-gallon-per-day facility.\n\n•Food and Health Sciences Segment. Our Food and Health Sciences Group specializes in processing and formulation solutions as well as ingredient distribution to manufacturers in the nutrition, food, pharmaceutical, and agricultural markets. This group offers a diverse product portfolio including base chemistry, acid based reactions, minerals, vitamins and amino acids, excipients, botanicals and herbs, sweeteners and enzymes, fertilizers, and food-grade and pharmaceutical salts and ingredients.\n\n•Industrial Solutions Segment.  Our Industrial Solutions Group specializes in providing industrial chemicals, products and services to industries such as industrial manufacturing, chemical processing, electronics, energy, plating, and surface finishing. This group’s principal products are acids and alkalis. This segment receives, stores and distributes various chemicals in bulk quantities, including liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia and potassium hydroxide. They perform customer blending of chemicals according to customer formulas and specifications and repackage bulk industrial chemicals to sell in smaller quantities to our customers. The Industrial Solutions group relies on a specially trained sales staff that works directly with customer on their specific needs. This segment conducts its business primarily through manufacturing locations and terminal operations.\n\n54\n\nOur chief operating decision-maker (CODM), who is our President and Chief Executive Officer, regularly reviews the consolidated financial statements in their entirety and financial information at the reportable segment level. The CODM uses segment operating income and considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment operating income for evaluating pricing strategy, to assess the performance of each segment by comparing the results of each segment with one another, and in determining the compensation of certain employees. The CODM has ultimate responsibility for enterprise decisions and making resource allocation decisions for the Company and the segments.\n\nThe accounting policies of the segments are the same as those described in the summary of significant accounting policies.\n\nProduct costs and expenses for each segment are based on actual costs incurred along with cost allocations of shared and centralized functions. Raw materials are transferred between segments at material cost, capitalized freight, and capitalized internal production and warehousing costs, with the offset settled in a balance sheet clearing account. Capitalized freight and capitalized internal production and warehousing costs are calculated and applied to inventory on an item level basis using per unit estimates that are based on historical costs or a time and effort measures as appropriate. We do not record intersegment sales, and no operating segments have been aggregated.\n\nIn fiscal 2026, 2025 and 2024, none of our customers accounted for 10% or more of our total sales.\n\nSubstantially all of the Company's revenue is derived from customers located in the United States and all of the Company's long-lived assets are located within the United States.\n\nSummarized financial information for the Company’s reportable segments is presented and reconciled to consolidated financial statements in the following tables:\n\nReportable SegmentsWater\nTreatmentFood and Health SciencesIndustrial SolutionsTotal\n\n(In thousands)  \n\nFiscal Year Ended March 29, 2026:\n\nSales$543,303 $320,700 $219,693 $1,083,696 \n\nCost of sales - materials (327,821 )(233,960 )(174,415 )\n\nCost of sales - operational overhead (70,529 )(19,408 )(12,508 )\n\nSelling, general, and administrative expenses(76,865 )(32,981 )(13,916 )\n\nOperating income$68,088 $34,351 $18,854 $121,293 \n\nInterest expense, net(13,507)\n\nOther income1,554 \n\nIncome tax expense(27,792)\n\nNet income$81,548 \n\nIdentifiable assets*$561,554 $258,186 $137,280 $957,020 \n\nCapital expenditures$29,790 $13,490 $14,959 $58,239 \n\nDepreciation and amortization$30,788 $12,896 $8,858 $52,542 \n\nFiscal Year Ended March 30, 2025:\n\nSales$446,489 $322,560 $205,382 $974,431 \n\nCost of sales - materials (259,722 )(231,621 )(160,199 )\n\nCost of sales - operational overhead (64,934 )(19,021 )(13,396 )\n\nSelling, general, and administrative expenses(62,287 )(30,720 )(13,357 )\n\nOperating income$59,546 $41,198 $18,430 $119,174 \n\nInterest expense, net(5,432)\n\nOther income641 \n\nIncome tax expense(30,038)\n\nNet income$84,345 \n\nIdentifiable assets*$356,994 $252,088 $130,490 $739,572 \n\nCapital expenditures$20,258 $9,812 $11,026 $41,096 \n\nDepreciation and amortization$18,953 $12,510 $8,485 $39,948 \n\n55\n\nReportable SegmentsWater\nTreatmentFood and Health SciencesIndustrial SolutionsTotal\n\nFiscal Year Ended March 31, 2024:\n\nSales$363,289 $334,560 $221,313 $919,162 \n\nCost of sales - materials (214,020 )(245,207 )(176,327 )\n\nCost of sales - operational overhead (50,218 )(21,471 )(18,283 )\n\nSelling, general, and administrative expenses(46,165 )(29,230 )(14,205 )\n\nOperating income$52,886 $38,652 $12,498 $104,036 \n\nInterest expense, net(4,282)\n\nOther income1,391 \n\nIncome tax expense(25,782)\n\nNet income$75,363 \n\nIdentifiable assets*$257,898 $237,097 $134,694 $629,689 \n\nCapital expenditures$14,975 $11,113 $14,063 $40,151 \n\nDepreciation and amortization$12,385 $11,473 $7,945 $31,803 \n\n* Unallocated assets not included, consisting primarily of cash and cash equivalents, prepaid expenses, and non-qualified deferred compensation plan assets of $29.3 million at March 29, 2026, $30.3 million at March 30, 2025 and $28.2 million at March 31, 2024\n\nNote 16 — Revision of Previously Issued Financial Statements\n\nDuring the preparation of our consolidated financial statements for the year ended March 29, 2026, we identified an immaterial error related to the classification of a portion of the Company's long-term debt in the prior period. Based upon evaluation of both quantitative and qualitative factors, we concluded the error to be immaterial to previously reported financial statements, however we revised the previously issued consolidated balance sheet to correct these errors. Certain amounts previously classified as current maturities of long-term debt were reclassified to long-term debt and an immaterial amount of debt issuance costs were reclassified to noncurrent assets in the accompanying consolidated balance sheet.\n\nThe following table summarizes the impact of the reclassification on our consolidated balance sheet:\n\n(In thousands)As Previously Reported AdjustmentAs Revised\n\nMarch 30, 2025\n\nOther Assets - Other$3,726 $181 $3,907 \n\nCurrent portion of long-term debt$9,913 $(9,913)$— \n\nLong-term debt$138,906 $10,094 $149,000 \n\nNote 17 — Reclassifications\n\nIn the consolidated balance sheet as of March 30, 2025, other current liabilities of $8.7 million were further disaggregated to conform to current year presentation. These reclassifications had no impact on previously reported net income, total assets, total liabilities, or shareholders' equity, nor on net cash provided by (used in) operating, investing, or financing activities.\n\n56"}