Hammond Power Solutions Inc. Announces Quarter 1, 2021 Financial Results

(Dollar amounts are in thousands unless otherwise specified)

Net Earnings Growth for the Quarter

FIRST QUARTER – HIGHLIGHTS

• Earnings increased 7% to $2.30 million from $2.15 million in 2020
• Margin rates increased to 24.7% from 23.6% in 2020
• Earnings per share increased to $0.19 from $0.18 in 2020
• Net operating debt decreased 36% to $11.80 million or 0.01 net debt to equity

GUELPH, Ontario, April 22, 2021 (GLOBE NEWSWIRE) -- Hammond Power Solutions Inc. (“HPS”) (TSX: HPS.A) a leading manufacturer of dry-type, cast resin, liquid-filled transformers and related magnetics, today announced its financial results for the First Quarter of 2021.

FIRST QUARTER RESULTS

“In a year dominated by challenges and uncertainty presented by the COVID-19 pandemic, our primary focus shifted to the health and well-being of our employees and customers. Beyond our priority on people in 2020, we were able to fortify the underlying business by growing our North American market share, increasing our gross margins, and gaining sales from new products,” said Bill Hammond, Chairman and CEO of Hammond Power Solutions. “Our distributor network has doubled in the last 5 years and provides a diverse pipeline of customers and products including power quality, electric vehicle charging and renewable power generation, extraction for natural resources, and essential power for servers powering the world’s largest technology companies.”

“The first quarter highlighted the strength of our distributor network and its ability to provide a diversified revenue base and now contributes more than 60% of Hammond's revenue. This added sector diversification was the primary driver of our gross margin and bookings increase for the quarter compared to 2020,” said Chris Huether, CFO of Hammond. “Looking forward, we have implemented price increases in the quarter to reflect the commodity price increases we are seeing in our raw materials. We expect to see these increases work their way through our back log in the second half of 2021.”

Sales for the quarter-ended March 27, 2021 were $80,121, a decrease of $8,299 or 9.4% from Quarter 1, 2020 sales of $88,420. This would be the fourth quarter the business was impacted by the COVID 19 pandemic. It is important to note that the pandemic had minimal impact on the business in the same quarter last year as the Pandemic was in its infancy stage. Sales in the United States (“U.S.”) decreased by $9,836 or 17.5%, finishing at $46,505 for Quarter 1, 2021 compared to $56,341 in Quarter 1, 2020. Canadian sales remained stable at $27,801 for the quarter, a slight increase of $457 or 1.7% from Quarter 1, 2020 sales of $27,344. Indian sales for Quarter 1, 2021 finished at $5,815 versus $4,735 in Quarter 1, 2020, an increase of $1,080 or 22.8%.