Click here to close now.

SYS-CON MEDIA Authors: Bob Gourley, Mike Kavis, Elizabeth White, John Treadway, SmartBear Blog

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
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 will discuss how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations m...
With IoT exploding, massive data will transform businesses with opportunities to monetize almost anything that can be measured. In this C-Level Roundtable Discussion at @ThingsExpo, Brendan O’Brien, Aria Systems Co-founder and Chief Evangelist, will lead an expert panel of consultants, thought leaders and practitioners who will look at these new monetization trends, discuss the implications, and detail lessons learned from their collective experience. Finally, the panel will point the way forw...
Health care systems across the globe are under enormous strain, as facilities reach capacity and costs continue to rise. M2M and the Internet of Things have the potential to transform the industry through connected health solutions that can make care more efficient while reducing costs. In fact, Vodafone's annual M2M Barometer Report forecasts M2M applications rising to 57 percent in health care and life sciences by 2016. Lively is one of Vodafone's health care partners, whose solutions enable o...
SOASTA, the leader in performance analytics, today reported record growth of the CloudTest community, exceeding 30,000 registered users of the CloudTest platform in Q1 2015. SOASTA also announced widespread adoption of its Web and mobile testing solutions, with more than 1,600 customers completing more than 285,000 tests using CloudTest during the quarter. This rapid growth shows that DevOps-driven digital businesses are embracing a more continuous approach to testing, and CloudTest is meeting t...
of cloud, colocation, managed services and disaster recovery solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. TierPoint, LLC, is a leading national provider of information technology and data center services, including cloud, colocation, disaster recovery and managed IT services, with corporate headquarters in St. Louis, MO. TierPoint was formed through the strategic combination of some of t...
How is unified communications transforming the way businesses operate? In his session at WebRTC Summit, Arvind Rangarajan, Director of Product Marketing at BroadSoft, will discuss how to extend unified communications experience outside the enterprise through WebRTC. He will also review use cases across different industry verticals. Arvind Rangarajan is Director, Product Marketing at BroadSoft. He has over 19 years of experience in the telecommunications industry in various roles such as Softw...
Dave will share his insights on how Internet of Things for Enterprises are transforming and making more productive and efficient operations and maintenance (O&M) procedures in the cleantech industry and beyond. Speaker Bio: Dave Landa is chief operating officer of Cybozu Corp (kintone US). Based in the San Francisco Bay Area, Dave has been on the forefront of the Cloud revolution driving strategic business development on the executive teams of multiple leading Software as a Services (SaaS) ap...
SYS-CON Events announced today that Vicom Computer Services, Inc., a provider of technology and service solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. They are located at booth #427. Vicom Computer Services, Inc. is a progressive leader in the technology industry for over 30 years. Headquartered in the NY Metropolitan area. Vicom provides products and services based on today’s requirements...
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the...
What exactly is a cognitive application? In her session at 16th Cloud Expo, Ashley Hathaway, Product Manager at IBM Watson, will look at the services being offered by the IBM Watson Developer Cloud and what that means for developers and Big Data. She'll explore how IBM Watson and its partnerships will continue to grow and help define what it means to be a cognitive service, as well as take a look at the offerings on Bluemix. She will also check out how Watson and the Alchemy API team up to off...
The IoT Bootcamp is coming to Cloud Expo | @ThingsExpo on June 9-10 at the Javits Center in New York. Instructor. Registration is now available at http://iotbootcamp.sys-con.com/ Instructor Janakiram MSV previously taught the famously successful Multi-Cloud Bootcamp at Cloud Expo | @ThingsExpo in November in Santa Clara. Now he is expanding the focus to Janakiram is the founder and CTO of Get Cloud Ready Consulting, a niche Cloud Migration and Cloud Operations firm that recently got acquir...
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
How do you securely enable access to your applications in AWS without exposing any attack surfaces? The answer is usually very complicated because application environments morph over time in response to growing requirements from your employee base, your partners and your customers. In his session at 16th Cloud Expo, Haseeb Budhani, CEO and Co-founder of Soha, will share five common approaches that DevOps teams follow to secure access to applications deployed in AWS, Azure, etc., and the frict...
SYS-CON Media announced today that John Treadway’s blog has exceeded 475,000 page views. John Treadway, Vice President at Cloud Technology Partners, has surpassed 475,000 page views on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, Microservices Journal, and several others. His blog home page at SYS-CON can be found at JohnTreadway.SYS-CON.com.
ProfitBricks has launched its new DevOps Central and REST API, along with support for three multi-cloud libraries and a Python SDK. This, combined with its already existing SOAP API and its new RESTful API, moves ProfitBricks into a position to better serve the DevOps community and provide the ability to automate cloud infrastructure in a multi-cloud world. Following this momentum, ProfitBricks has also introduced several libraries that enable developers to use their favorite language to code ...