Hammond Power Solutions Inc. (Hammond Power) has reported sales of CAD226.3 million for the year-end 2008, compared with the sales of CAD160.6 million in the previous year-end. It has also reported net earnings of CAD22.8 million, or CAD1.93 per diluted share, for the year-end 2008, compared with the net earnings of CAD12.4 million, or CAD1.06 per diluted share, in the previous year-end.
Sales for the quarter-ended December 31, 2008 were CAD65,126 up CAD26,919 or 70.5% from the comparative quarter last year, and are up CAD65,752 or 40.9% year-to-date, finishing at CAD226,358 compared to CAD160,606 last year.
The Company achieved record sales in the fourth quarter and the year as HPS continued to benefit from the strong demand for resources, the industrialization and urbanization of developing economies, as well as infrastructure investments here in North America and abroad. HPS continues to expand its market share of the electrical distributor channel in both the United States and Canada. said Bill Hammond, chairman & chief executive officer of Hammond Power.
Fourth quarter of 2008, gross margin dollars increased by 80.2% compared to fourth quarter of, 2007 as a result of increased sales levels, the positive margin impact of a weaker Canadian dollar, selling price realization and a favorable product mix. Gross margin rates finished at 31.7% versus 30.0% in fourth quarter of 2007 an increase of 1.7% and were 28.8% for the year compared to 29.3% in 2007, down 0.5%.
Hammond further commented we are committed to increasing our manufacturing competitiveness and capacities with a plant expansion underway in Granby, Quebec and the addition of a second manufacturing facility in Monterrey, Mexico. Manufacturing flexibility and cost competitiveness are paramount to improve our service and sales initiatives.
Total selling, general and administrative expenses amounted to CAD8,792 in fourth quarter of 2008, versus CAD6,343 in Fourth quarter of 2007 and were CAD35,452 year-to-date versus CAD27,518 in 2007.
The company continued to deliver higher earnings from operations, evidenced by fourth quarter of, 2008 growth of CAD6,731 or 131.9% over the same quarter last year, finishing at CAD11,835 as compared to CAD5,104, in Fourth quarter of, 2007. Earnings from operations were CAD29,732 on a year-to-date basis, up CAD10,157 or 51.9% from CAD19,575 for the same period last year. The focus on sales growth from market expansion in the US and Canada, sales mix, and selling price increases, contributed to this rise in earnings from operations.
As a result of increased income before income tax, Fourth quarter of, 2008 current income tax expense was CAD2,632 as compared to CAD2,409 in Fourth quarter of, 2007, and was CAD9,220 year- to-date, versus CAD7,765 last year ,an increase of CAD1,455. Future income tax recovery was CAD677 in Fourth quarter of, 2008 as compared to CAD308 expense in Fourth quarter of, 2007, and was a recovery of CAD677 year-to-date, versus a CAD308 future income tax expense last year, a decrease of CAD985.
Net earnings for fourth quarter of 2008 grew by CAD7,036 or 259.2%, concluding at CAD9,751 compared to CAD2,715 in fourth quarter of 2007 and was up CAD10,426 or 84.1%, finishing at CAD22,829 year-to-date versus CAD12,403 last year.
Cash provided by operations for Fourth quarter of, 2008 was CAD7,522, versus CAD7,140 in fourth quarter of, 2007, an increase of CAD382. Cash provided by operations year-to-date, was CAD6,254, versus CAD7,611 in 2007, a decrease of CAD1,357.
Overall bank operating lines of credit and long term debt, net of cash balances increased to CAD4,100 as at December 31, 2008, an increase of CAD8,495 as compared to a cash balance of CAD4.395 as at December 31, 2007. The increase for the year was primarily a result of cash used for the acquisition of Delta Transformers Inc, the purchase of a new Canadian warehouse, a new plant expansion in Mexico, and the Granby plant addition.
Hammond concluded, The Company continues to deliver both growth and strong financial results, finishing the year with record revenues and profits. We are very mindful of the global economic storm raging around us. We also recognize that as this downturn continues and perhaps worsens in the year ahead, no market or company will be immune from its effects. We are facing these challenges head on with decisive action. We are better positioned today to address today’s market and economic realities with initiatives designed to outpace the competition. We are committed to providing our customers with outstanding products and excellent customer service. We will strengthen HPS’s position through diversification of its core business, continued market channel expansion, geographic diversity and business hedging strategies.