Hammond Power Solutions Inc. ("HPS") (TSX:HPS.A) -
(Dollar amounts are in thousands unless otherwise specified)
NOTE: ALL NUMBERS HAVE BEEN STATED UNDER IFRS
HIGHLIGHTS
-- International sales growth
-- Gross margin growth
-- Decrease in net cash used in operating activities
-- Solid Balance Sheet
Hammond Power Solutions Inc. ("HPS"), a leading manufacturer of
dry-type and cast resin transformers and related magnetics, today
announced its financial results for the first quarter of 2013.
"Our strong core capabilities, financial strength, as well as
our broad geographical and market diversification will serve HPS in
weathering the current economic turbulence," commented Bill
Hammond, Chairman & Chief Executive Officer of Hammond Power
Solutions Inc.
FIRST QUARTER RESULTS
Sales for the quarter-ended March 30, 2013 were $63,672, a
slight decline of $1,982 or 3.0% from the Quarter 1, 2012 sales of
$65,654. As a result of softer booking and sales activity in the
quarter, sales in the U.S., were $35,185 in Quarter 1, 2013 a small
decrease of $1,317 or 3.6% from Quarter 1, 2012. Canadian sales
were $21,272 for the quarter, a decrease over Quarter 1, and 2012
of $3,698 or 14.8%. The Company realized International sales of
$7,215 versus $4,182 in Quarter 1, 2012, an increase of $3,033 or
72.5%. International sales include revenues from our recent Italian
acquisition, Marnate Trasformatori s.r.l. ("Marnate") of $1,068 for
the quarter.
The Company was not immune to the sluggish North American,
European and Asian economies. The Company's bookings for Quarter 1,
2013 decreased by 12.1% from Quarter 4, 2012 and were 13.2% lower
than Quarter 1, 2012.
Gross margin rates for Quarter 1, 2013 finished at 24.0% versus
23.7% in Quarter 1, 2012, an increase of 0.3% of sales.
Bill Hammond further commented, "Despite market pressures, the
Company was effective at growing margin rates this Quarter. This is
notable as we were able to make these gains in several of our
markets."
Total selling and distribution expenses were $6,542 in Quarter
1, 2013 versus $6,259 in Quarter 1, 2012 - an increase of $283 or
4.5%. These expenses represent 10.2% of sales in Quarter 1, 2013
and 9.5% of sales in Quarter 1, 2012. The Quarter 1, 2013 selling
and distribution expenses include international operation expenses
of $307 versus $258 in Quarter 1, 2012. Freight expenses for the
quarter increased due to increased transportation costs caused by
higher fuel costs.
The general and administrative expenses for Quarter 1, 2013
totaled $5,395, a decrease of $143 or 2.6% when compared to Quarter
1, 2012 expenses of $5,538. This represents 8.5% of sales in
Quarter 1, 2013 as compared to 8.4% of sales in Quarter 1, 2012.
The Quarter 1, 2013 general and administrative expenses include
international operation expenses of $729 versus $538 in Quarter 1,
2012. Quarter 1, 2013 general and administrative expenses were
lowered as a result of reduced quarter stock option expense and bad
debt provisions compared to the same quarter in 2012.
Interest expense for Quarter 1, 2013 finished at $169 compared
to $124 in Quarter 1, 2012 an increase of $45. The increase in
interest expense for the quarter was a result of higher operating
debt levels related to the assumption of debt associated with the
purchase of Marnate.
Net earnings for Quarter 1, 2013 decreased by $611, finishing at
$1,907 compared to net earnings of $2,518 in Quarter 1, 2012. Net
earnings were lowered by having no realized and unrealized gains on
copper forwards in the quarter as compared to a $376 gain in
Quarter 1, 2012 and a slightly higher consolidated effective tax
rate for Quarter 1, 2013 at 39.7% versus 37.0% for Quarter 1, 2012,
an increase of 2.7%.
Net cash used in operating activities for Quarter 1, 2013 was
$1,011 versus cash used of $3,330 in Quarter 1, 2012 a decrease of
$2,319 as a result of a decrease in non-cash working capital and
lower net earnings.
The Company's overall debt, net of cash was $18,934 in Quarter
1, 2013 compared to a net overall debt position of $19,338 in
Quarter 1, 2012, a reduction in debt position of $404. This debt
position change was a result of the purchase of Marnate including
the deferred purchase agreement of its properties and the change in
non-cash working capital.
Mr. Hammond concluded, "We remain focused on our 2013 financial
performance. The global economic recovery will be weaker than
originally expected, nonetheless, we believe that our results will
gain momentum through the year as most of our markets, particularly
in the United States, accelerate. In addition to this, new business
and increased market share will add to our financial results in the
later quarters."
THREE MONTHS ENDED:
(dollars in thousands)
----------------------------------------------------------------------------
March 30, March 31,
2013 2013 Change
----------------------------------------------------------------------------
Sales $ 63,672 $ 65,654 (1,982)
----------------------------------------------------------------------------
Earnings from Operations $ 3,359 $ 3,757 $ (398)
----------------------------------------------------------------------------
Exchange Gain $ (8) $ (22) $ (14)
----------------------------------------------------------------------------
Copper forward unrealized/realized gain $ - $ (376) $ (376)
----------------------------------------------------------------------------
Net Earnings $ 1,907 $ 2,518 $ (611)
----------------------------------------------------------------------------
Earnings per share
Basic $ 0.16 $ 0.22 $ (0.06)
Diluted $ 0.16 $ 0.22 $ (0.06)
----------------------------------------------------------------------------
Cash Used in Operations $ 1,011 $ 3,330 $ (2,319)
----------------------------------------------------------------------------
TELECONFERENCE
Hammond Power Solutions Inc. will hold a conference call on
Thursday, April 25, 2013 at 10:00 a.m. EST, to discuss the
Company's financial results for the first quarter 2013.
Listeners may attend the conference by dialing: 1-416-340-2216
or 1-866-226-1792
Instant Replay
Dial-in numbers 905-694-9451 or 1-800-408-3053
Pass code 1338265
End date May 8, 2013
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's 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.
Contacts: Hammond Power Solutions Inc. Dawn Henderson Manager
Investor Relations (519) 822-2441
x414ir@hammondpowersolutions.com
Hammond Power Solutions (TSX:HPS.A)
Historical Stock Chart
From Apr 2024 to May 2024
Hammond Power Solutions (TSX:HPS.A)
Historical Stock Chart
From May 2023 to May 2024
