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Business Combinations | 6 Months Ended
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Sep. 28, 2025
Business Combination [Abstract] |
Business Combination | Acquisitions General We 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. For each acquisition completed in 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 & Health Sciences segment. Costs associated with each acquisition were not material and were expensed as incurred. Fiscal 2026 Acquisitions Acquisition 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. WaterSurplus is based in Rockford, IL and delivers sustainable water treatment solutions to customers throughout the United States. The total purchase price, including the estimated $43.0 million earnout liability, was preliminarily allocated as follows: $75.0 million to customer relationships, to be amortized over 15 years; $6.2 million to trade names, to be amortized over 15 years; $13.0 million to technology, to be amortized over 8 years; $82.6 million to goodwill; $13.2 million to property, plant and equipment; and the remaining amount of $2.9 million to net working capital. During the three months ended September 28, 2025, a measurement period adjustment was finalized related to the acquisition of WaterSurplus. The initial accounting was provisional, and the final fair value of identified contract assets was higher than initially estimated. The total adjustment increased the carrying amount of contract assets by $1.4 million and decreased the carrying amount of goodwill by $1.4 million. The measurement period adjustment had no impact on the condensed consolidated statements of income for the three months ended September 28, 2025. The goodwill recognized as a result of this acquisition is expected to be deductible for tax purposes. The purchase price allocation is not yet complete due to the timing of the acquisition. 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. The 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.
|  | Three Months Ended |  | Six Months Ended
(in thousands, except per share data) |  | September 28, 2025 |  | September 29, 2024 |  | September 28, 2025 |  | September 29, 2024
Pro forma sales |  | $ | 280,434 |  |  | $ | 254,948 |  |  | $ | 575,861 |  |  | $ | 518,621 |
Pro forma net income |  | $ | 22,598 |  |  | $ | 21,593 |  |  | $ | 51,764 |  |  | $ | 48,161 |
Pro forma basic earnings per share |  | $ | 1.09 |  |  | $ | 1.04 |  |  | $ | 2.50 |  |  | $ | 2.32 |
Pro forma diluted earnings per share |  | $ | 1.08 |  |  | $ | 1.04 |  |  | $ | 2.48 |  |  | $ | 2.31 |
The unaudited pro forma financial information above is adjusted to reflect the following: (a) interest expense, including amortization of debt issuance costs, related to the approximately $150 million of debt used to fund the acquisition and related purchase of real estate; (b) amortization expense related to the preliminary $94 million of identifiable intangible assets recognized in conjunction with the acquisition; (c) depreciation expense as adjusted for adjusted fixed asset values; (d) remeasurement of the earnout payable at fair value; (e) adjustment to cost of goods sold for the inventory step-up adjustment; (f) adjustment for acquisition costs incurred; (g) elimination of net interest previously reflected on WaterSurplus’ financial statements; and (h) recording income taxes at our effective tax rate for each period. Sales of WaterSurplus of $5.7 million for the three months ended September 28, 2025 and $17.9 million for the six months ended September 28, 2025 were included in our condensed consolidated statements of income. Operating loss of WaterSurplus of $2.3 million for the three months ended September 28, 2025 and $0.2 million for the six months ended September 28, 2025 was also included in our condensed consolidated statements of income. Inclusive of four additional immaterial acquisitions not discussed above, total cash consideration for the acquisitions completed in the six months ended September 28, 2025 was $162.5 million. Fiscal 2025 Acquisitions We completed four acquisitions in fiscal 2025, including the previously announced acquisitions shown below. Amerochem Corporation 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. Waterguard, Inc. was acquired on October 31, 2024 for $18.0 million. Located in North Carolina, Waterguard distributed water treatment chemicals and equipment to its customers located primarily in North Carolina. Intercoastal Trading, Inc. was acquired on June 3, 2024 for $22.0 million. Located in Maryland, Intercoastal Trading distributed water treatment chemicals and equipment to its customers in Maryland, Delaware, and Virginia. Inclusive of one immaterial acquisition not discussed above, total cash consideration for the 2025 acquisitions completed in the six months ended September 29, 2024 was $25.4 million.

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