Welcome!

News Feed Item

Hammond Power Solutions Inc. Announces Quarter 4, 2013 Financial Results Building for the Future

GUELPH, ONTARIO -- (Marketwired) -- 03/13/14 -- (Dollar amounts are in thousands unless otherwise specified)

NOTE: ALL NUMBERS HAVE BEEN STATED UNDER IFRS

Hammond Power Solutions Inc. ("HPS") (TSX: HPS.A) a leading manufacturer of dry-type and cast resin transformers and related magnetics, today announced its financial results for the fourth quarter of 2013.

Bill Hammond, Chairman & Chief Executive Officer of Hammond Power Solutions Inc. commented, "Hammond Power Solutions has come through one of the most challenging years since the recession started in 2008. A number of unexpected circumstances as well as higher levels of economic volatility buffeted our sales and profit performance during 2013. We are confident that our financial strength, core competencies and long term strategies will accelerate our growth as the global recovery begins."

FOURTH QUARTER RESULTS

Sales for the quarter ended December 31, 2013 were $62,804 a slight increase of $271 or 0.4% from the comparative quarter last year, which is reflective of the impact of the continued demand for our product, market share and favorable product mix. U.S. sales were stable at $35,201 in Quarter 4, 2013, an increase of $637 or 1.8% from Quarter 4, 2012. In 2013, sales to the U.S. market of $138,481 decreased by $6,604, or 4.6%, compared to 2012 sales of $145,085. Canadian sales were $20,081 for the quarter, a decrease over Quarter 4, 2012, of $4,052 or 16.8%. Year to date Canadian sale were $79,766 in 2013 compared to $95,467 in 2012 a drop of $15,701 or 16.4%. International sales in Quarter 4, 2013 were $7,522 versus $3,824 in Quarter 4, 2012, an increase of $3,698 or 96.7%. International sales were $24,694 in 2013 compared to $16,824 in 2012, an increase of $7,870 or 46.8%.

The Company realized an increase in bookings of 1.12% over Quarter 3, 2013 and an increase of 2.7% as compared against Quarter 4, 2012. Due to the softer North American, European and Asian economies, year-to-date bookings were lower by 1.1%.

Quarter 4, 2013 gross margin dollars decreased by $529 compared to Quarter 4, 2012. Gross margin rate decreased to 27.1% in Quarter 4, 2013 versus 28.1% in Quarter 4, 2012 as a result of market pricing pressures and lower manufacturing throughput and were 25.0% year to date 2013 versus 25.2% year to date 2012.

Bill Hammond further commented, "We are pleased with our solid gross margin rates for the year. Despite a slower than expected economy, we continued to increase our sales and market share through our U.S. distributor channel. Our expanded channel and geographical presence will benefit HPS even more as the U.S. economy begins to improve."

Total selling and distribution expenses were $7,461 in Quarter 4, 2013 versus $6,773 in Quarter 4, 2012, an increase of $688 or 10.2%. These expenses represent 11.9% of sales in Quarter 4, 2013 and 10.8% of sales in Quarter 4, 2012. Year-to-date selling and distribution expenses were $27,156 or 11.2% of sales in 2013, compared to $25,894 or 10.1% of sales in 2012.

The general and administrative expenses for Quarter 4, 2013 totaled $5,394, a slight increase of $171 or 3.2% when compared to Quarter 4, 2012 expenses of $5,223. This represents 8.6% of sales in Quarter 4, 2013 as compared to 8.4% of sales in Quarter 4, 2012. Year-to-date general and administrative expenses were $22,409 or 9.2% of sales in 2013, compared to $20,714 or 8.0% of sales in 2012.

Earnings from operations were $4,157 in Quarter 4, 2013 versus $5,545 in Quarter 4, 2013, a decrease of $1,388 or 25.0% and were $11,036 year-to-date in 2013, as compared to $18,180 in 2012, a decrease of $7,144 or 39.3%.

Interest expense for Quarter 4, 2013 finished at $155 and was comparable to $146 in Quarter 4, 2012. Year-to-date interest cost was $860, an increase of $165 when compared to the 2012 year-to-date expense of $695. The increase in interest expense year-to-date was a result of higher operating debt levels related to the assumption of debt associated with the Italian acquisition in the year.

There was a foreign exchange gain of $217 in the Quarter 4, 2013 versus $393 in Quarter 4, 2012 and a foreign exchange loss in 2013 of $80 related primarily to the transactional exchange gain or loss pertaining to the Company's U.S. dollar trade accounts payable in Canada, compared to a foreign exchange gain of $775 in 2012.

Net earnings for Quarter 4, 2013 decreased by $1,835, finishing at $2,895 compared to net earnings of $4,730 in Quarter 4, 2012. Year-to-date net earnings were $6,104 in 2013 and $12,611 in 2012, a decrease of $6,507 or 51.6. This decrease is mostly due to lower sales in the year.

Net cash used in operating activities for Quarter 4, 2013 was $2,819 versus cash generated of $10,461 in Quarter 4, 2012, a decrease of $13,280 as a result of lower net earnings. Year-to-date cash generated by operating activities was $620 in 2013 and $21,371 in 2012, a change of $20,751.

Overall cash balances net of debt bank lines of credit resulted in net debt of $15,959 as at December 31 2013, a decrease of $17,111 as compared to a net cash balance of $1,152 as at December 31, 2012. This is primarily reflecting acquisition activity, capital investment and debt repayment in the year.

The Company continued with its regular quarterly dividend program, paying five cents ($0.05) per Class A Subordinate Voting Share of HPS and five cents ($0.05) per Class B Common Share of HPS on December 30, 2013. Year to date, the Company has paid a quarterly cash dividend of twenty cents ($0.20) per Class A Subordinate Voting Share and twenty cents ($0.20) per Class B Common Share.

Mr. Hammond concluded, "We continue to implement operational and strategic initiatives to grow our sales, control our expenses, manage the company and build for the future."

FINANCIAL RESULTS


THREE MONTHS ENDED:
(dollars in thousands)

----------------------------------------------------------------------------
                                  December 31,   December 31,
                                          2013           2012         Change
----------------------------------------------------------------------------
                        Sales   $      62,804  $      62,533  $         271
----------------------------------------------------------------------------

     Earnings from Operations   $       4,157  $       5,545  $      (1,388)
----------------------------------------------------------------------------

                Exchange Gain   $        (217) $        (393) $        (176)
----------------------------------------------------------------------------

                 Net Earnings   $       2,895  $       4,730  $      (1,835)
----------------------------------------------------------------------------

           Earnings per share
                        Basic   $        0.25  $        0.41  $       (0.16)
                      Diluted   $        0.25  $        0.41  $       (0.16)
----------------------------------------------------------------------------
     Cash (used) generated by
                   Operations   $      (2,819)       $10,461  $     (13,280)

----------------------------------------------------------------------------

TWELVE MONTHS ENDED:
(dollars in thousands)

----------------------------------------------------------------------------
                                  December 31,   December 31,
                                         2013           2012         Change
----------------------------------------------------------------------------
                        Sales   $     242,941  $     257,376  $     (14,435)
----------------------------------------------------------------------------

     Earnings from Operations   $      11,036  $      18,180  $      (7,144)
----------------------------------------------------------------------------

         Exchange Loss/(Gain)   $          80  $        (775) $        (855)
----------------------------------------------------------------------------

                 Net Earnings   $       6,104  $      12,611  $      (6,507)
----------------------------------------------------------------------------

           Earnings per share
                        Basic   $        0.52  $        1.08  $       (0.56)
                      Diluted   $        0.52  $        1.08  $       (0.56)
----------------------------------------------------------------------------
 Cash generated by Operations   $         620  $      21,371  $     (20,751)

----------------------------------------------------------------------------

TELECONFERENCE

Hammond Power Solutions Inc. will hold a conference call on Friday, March 14, 2014 at 10:00 a.m. EST, to discuss the Company's financial results for the fourth quarter 2013.

Listeners may attend the conference by dialing:


1-416-340-2216 / 1-866-226-1792 / 1-800-9559-6849

Instant Replay
Dial in numbers          905-694-9451 or 1-800-408-3053
Pass code                7239947
End date                 March 28, 2014

Caution Regarding Forward-Looking Information

This press release contains forward-looking statements that involve a number of risks and uncertainties, including statements that relate to among other things, HPS' strategies, intentions, plans, beliefs, expectations and estimates, and can generally be identified by the use of words such as "may", "will", "could", "should", "would", "likely", "expect", "intend", "estimate", "anticipate", "believe", "plan", "objective" and "continue" and words and expressions of similar import. Although HPS believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from expectations include but are not limited to: general business and economic conditions (including but not limited to currency rates); changes in laws and regulations; legal and regulatory proceedings; and the ability to execute strategic plans. HPS does not undertake any obligation to update publicly or to revise any of the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.

ABOUT HAMMOND POWER SOLUTIONS INC.

Hammond Power Solutions Inc. (TSX: HPS.A) is a North American leader for the design and manufacture of dry-type custom electrical engineered magnetics, electrical dry-type and cast resin transformers. Leading edge engineering capabilities, high quality products, and responsive service to customers' needs have all served to establish HPS as a technical and innovative leader in the electrical and electronic industries.

HPS has operations in Canada, the United States, Mexico, India and Italy.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists looked at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deliver...
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), provided an overview of various initiatives to certify the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldwide re...
Both SaaS vendors and SaaS buyers are going “all-in” to hyperscale IaaS platforms such as AWS, which is disrupting the SaaS value proposition. Why should the enterprise SaaS consumer pay for the SaaS service if their data is resident in adjacent AWS S3 buckets? If both SaaS sellers and buyers are using the same cloud tools, automation and pay-per-transaction model offered by IaaS platforms, then why not host the “shrink-wrapped” software in the customers’ cloud? Further, serverless computing, cl...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, discussed some of the security challenges of the IoT infrastructure and related how these aspects impact Smart Living. The material was delivered interac...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
"We are a monitoring company. We work with Salesforce, BBC, and quite a few other big logos. We basically provide monitoring for them, structure for their cloud services and we fit into the DevOps world" explained David Gildeh, Co-founder and CEO of Outlyer, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, Doug Vanderweide, an instructor at Linux Academy, discussed why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers wit...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...
No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec...