Click here to close now.


News Feed Item

Hammond Power Solutions Inc. Quarter 2, 2014 Financial Results


GUELPH, ONTARIO -- (Marketwired) -- 07/24/14 -- 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 second quarter of 2014.

Bill Hammond, Chairman & Chief Executive Officer of Hammond Power Solutions Inc. commented, "Hammond Power Solutions Inc. is pleased to report rising sales and profits in Quarter 2, 2014 amid a slower-than-expected recovery in the North American economy."


Sales for the quarter-ended June 28, 2014 were $61,716, an increase of $2,644 or 4.5% from Quarter 2, 2013 sales of $59,072 and an increase of $1,763 or 2.9% from Quarter 1, 2014 sales of $59,953. Year-to- date sales were $121,669 in 2014 and $122,744 in 2013, a small decrease of $1,075 or 0.9%. Sales in the U.S., were $34,936 in Quarter 2, 2014 a decrease of $1,080 or 3.0% from Quarter 2, 2013 and an increase of $1,189 from Quarter 1, 2014 sales of $33,747. The Company continued to increase both its market share and sales through the distributor channel in the Quarter. Year-to-date U.S. sales were $68,683 in 2014 and $71,201 in 2013, a decrease of $2,518 or 3.5%. Canadian sales were $18,635 for the quarter, consistent with Quarter 2, 2013 Canadian sales of $18,610. Sales in Canada have increased $705 or 3.9% from Quarter 1, 2014 of $17,930. International sales in Quarter 2, 2014 were $8,145 versus $4,446 in Quarter 2, 2013, an increase of $3,699 or 83.2%. Year-to-date sales have been negatively impacted by the continuing softness in OEM, construction and mining markets.

The Company realized an increase in bookings of 13.0% over Quarter 2, 2013 and 3.6% over Quarter 1, 2014 due to a lift in bookings in the U.S. distributor channel. Year-to-date bookings were 17.9% higher due to the increased U.S. distributor and European and Indian market original equipment manufacturer bookings.

"Over the last two months we are also seeing the U.S. economy beginning to gain momentum as well as positive signs from our international markets. The Company continues to focus intensely on market development and penetration." Bill Hammond further commented.

The Company has maintained its gross margin rates this quarter as compared to the same quarter last year despite market pressures and poorer market conditions. Gross margin rates for Quarter 2, 2014 were 23.3% compared to Quarter 2, 2013 which finished at 23.9%. Year-to-date the margin rate was 23.3% in 2014, which has decreased slightly from the 2013 rate of 24.0%.

Total selling and distribution expenses were $6,973 in Quarter 2, 2014 versus $6,617 in Quarter 2, 2013, an increase of $356 or 5.4%. These expenses represent 11.3% of sales in Quarter 2, 2014 and 11.2% of sales in Quarter 2, 2013. Year-to-date selling and distribution expenses were $14,031 or 11.5% of sales in 2014, compared to $13,159 or 10.7% in 2013.

The general and administrative expenses for Quarter 2, 2014 totaled $5,658, a decrease of $258 or 4.4% when compared to Quarter 2, 2013 expenses of $5,916. These expenses represent 9.2% of sales in Quarter 2, 2014 as compared to 10.0% of sales in Quarter 2, 2013. Year-to-date general and administrative expenses were $11,204 or 9.2% of sales in 2014, compared to $11,311 or 9.2% of sales in 2013, a decrease of $107 or 0.9%.

Quarter 2, 2014 earnings from operations increased by $171 or 10.7% from the same quarter last year, finishing at $1,770 compared to $1,599 in Quarter 2, 2013. The improvement in the quarter is a result of higher sales and increased gross margin contribution. The year-to-date earnings from operations were $3,073 in 2014 compared to $4,958 in 2013, a decrease of $1,885 or 38.0% as a result of the decreased sales, and decline in gross margin.

The interest expense for Quarter 2, 2014 finished at $259, a decrease of $34 or 11.6% compared to the Quarter 2, 2013 expense of $293. Year-to-date interest cost was $516, an increase of $54 when compared to the 2013 year-to-date expense of $462. Interest expense is generated as a result of higher operating debt levels attributed to higher working capital utilization.

The foreign exchange loss in Quarter 2, 2014 was $34, relating primarily to the transactional exchange pertaining to the Company's U.S. dollar trade accounts payable in Canada, compared to a foreign exchange loss of $122 in Quarter 2, 2013. For the first six months of 2014, the Company realized a foreign exchange gain of $63 compared to a foreign exchange loss of $114 for the same period in 2013.

Net earnings for Quarter 2, 2014 increased by $426 or 83.5% and finished at $936 compared to net earnings of $510 in Quarter 2, 2013. Year-to-date net earnings were $1,456 in 2014 and $2,417 in 2013, a decrease of $961 or 39.8%. The increase in sales, consistent margin rates, and lower general and administrative costs as well as a lower foreign exchange loss were the main contributing factors to the quarterly improvement.

Net cash provided by operating activities for Quarter 2, 2014 was $3,892 versus $1,429 in Quarter 2, 2013, an increase of $2,463 as a result of lower income tax payments and a decline in provisions. Year- to-date cash generated by operating activities was $2,247 in 2014 and $418 in 2013, a difference of $1,829.

The Company's overall debt, net of cash was $23,419 in Quarter 2, 2014 compared to a net debt position of $20,552 in Quarter 2, 2013, an increase in debt position of $2,867 due to the change in non-cash working capital. The Company's overall debt, net of cash reduced $1,546 from Quarter 1, 2014.

The Company continued with its regular quarterly dividend program, paying six cents ($0.06) per Class A Subordinate Voting Share of HPS and six cents ($0.06) per Class B Common Share of HPS on June 25, 2014.

Mr. Hammond concluded, "The slower-than-expected opening quarters in the U.S. and especially Canada have dampened the outlook for 2014 in the minds of many economists and companies. At HPS, we are adjusting to this unexpected volatility and building on our diversification and competitive advantages to grow our sales, and we anticipate business momentum to build as the year unfolds and the U.S. economy finally moves into a stronger growth phase."

FINANCIAL RESULTS                                                           
THREE MONTHS ENDED:                                                         
(dollars in thousands)                                                      
                                  June 28, 2014     June 29, 2013    Change 
Sales                           $        61,716   $        59,072   $ 2,644 
Earnings from Operations        $         1,770   $         1,599   $   171 
Exchange Loss                   $            34   $           122   $   (88)
Net Earnings                    $           936   $           510   $   426 
Earnings per share                                                          
Basic                           $          0.08   $          0.04   $  0.04 
Diluted                         $          0.08   $          0.04   $  0.04 
Cash provided by operations     $         3,892   $         1,429   $ 2,463 
SIX MONTHS ENDED:                                                           
(dollars in thousands)                                                      
                                  June 28, 2014     June 29, 2013    Change 
Sales                           $       121,669   $       122,744   $(1,075)
Earnings from Operations        $         3,073   $         4,958   $(1,885)
Exchange (Gain)/Loss            $           (63)  $           114   $   177 
Net Earnings                    $         1,456   $         2,417   $  (961)
Earnings per share              $          0.12   $          0.20   $ (0.08)
Basic                           $          0.12   $          0.20   $ (0.08)
Cash provided by operations     $        2,247    $           418   $ 1,829 


Hammond Power Solutions Inc. will hold a conference call on Friday, July 25, 2014 at 10:00 a.m. EST, to discuss the Company's financial results for the second quarter 2014.

Listeners may attend the conference by dialing:

1-416-340-8530 / 1-800-769-8320 / 1-800-2787-2090                           
Instant Replay                                                              
Dial in numbers          905-694-9451 or 1-800-408-3053                     
Pass code                6761570                                            
End date                 August 8, 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.


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
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNu...
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, San...
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true ...
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at, explored the value of Kibana 4 for log analysis and provided a hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He examined three use cases: IT operations, business intelligence, and security and compliance. Asaf Yigal is co-founder and VP of Product at log analytics software company In the past, he was co-founder of social-trading platform Currensee, which...
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem"...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user e...
Container technology is shaping the future of DevOps and it’s also changing the way organizations think about application development. With the rise of mobile applications in the enterprise, businesses are abandoning year-long development cycles and embracing technologies that enable rapid development and continuous deployment of apps. In his session at DevOps Summit, Kurt Collins, Developer Evangelist at, examined how Docker has evolved into a highly effective tool for application del...
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
Internet of @ThingsExpo, taking place June 7-9, 2016 at Javits Center, New York City and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Y...
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
As organizations shift towards IT-as-a-service models, the need for managing & protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection & E-Discovery of your data - whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise.