Welcome!

News Feed Item

Hammond Power Solutions Inc. Quarter 2, 2014 Financial Results

HIGHLIGHTS

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."

SECOND QUARTER RESULTS

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)
Diluted
----------------------------------------------------------------------------
Cash provided by operations     $        2,247    $           418   $ 1,829
----------------------------------------------------------------------------

TELECONFERENCE

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.

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
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.