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ACCELERATED IMPROVEMENT For the nine months ended September 26, 2015 Q3 Report It is an exciting time to be in the transformer business and to have the strengths and diversity that we have built up i

2 CONTENTS Letter to Shareholders Managements Discussion and Analysis Selected Annual and Quarterly Information Consolidated Financial Statements Notes to Consolidated Financial Statements 3 4 14 1

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 3 Fellow Shareholders, I am very pleased to report as the year is coming to a close, Hammond Power Solutions Inc., HPS has seen accelerated i

4 Q3 manag em en t s d is c uss i o n an d analys i s Q3 MANAGEMENTS DISCUSSION AND ANALYSIS Hammond Power Solutions Inc. HPS or the Company is a North American leader in the design and manufacture

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 5 Sales Sales for the quarterended September 26, 2015 were 65,378, an increase of 3,820 or 6.2 over Quarter 3, 2014 sales of 61,558. Yeartoda

6 Q3 manag em en t s d is c uss i o n an d analys i s market mix, geographic blend and lower factory capacity utilization. While this quarter saw a respectable improvement in margin rates, the Compa

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 7 Interest expense for Quarter 3, 2015 finished at 296, comparable to the Quarter 3, 2014 expense of 251. Yeartodate interest cost was 676, a

8 Q3 manag em en t s d is c uss i o n an d analys i s Summary of quarterly financial information unaudited Fiscal 2015 Quarters Sales Net earnings Net earnings per share basic Net earnings per shar

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 9 as at September 26, 2015. The Company will utilize its cash generated from operations combined with the existing available credit facilitie

10 Q3 manag em en t s d is c uss i o n an d analys i s Unpredictable weather trends and conditions Government protectionism or regulation changes Competition and market pricing pressures Credi

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 11 Companys focus and strategic initiatives. To address the current uncertainty, we are focusing our efforts on projects that will increase o

12 Q3 manag em en t s d is c uss i o n an d analys i s Revenue from contracts with customers On May 28, 2014 the IASB issued IFRS 15, Revenue from Contracts with Customers. This new standard is effe

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 13 or after January 1, 2016. Early adoption is permitted. These amendments will not require any significant change to current practice, but s

14 Selected AnnuAl And QuArterly InformAtIon Selected Annual and Quarterly Information tabular amounts in thousands of dollars The information contained in the following table presents the historic

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 15 Consolidated Statements of Financial Position unauditied tabular amounts in thousands of dollars As at September 26, 2015 December 31, 20

16 CON SO LIDAT ED FINAN C IAL STAT E M E N T S Consolidated Statements of Earnings unauditied tabular amounts in thousands of dollars Quarter Ending September 26, 2015 September 27, 2014 Nine Mon

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 17 Consolidated Statements of Comprehensive Income unauditied tabular amounts in thousands of dollars Quarter Ending September 26, 2015 Sept

18 CON SO LIDAT ED FINAN C IAL STAT E M E N T S Consolidated Statements of Changes in Equity unaudited For the nine months ended September 26, 2015 tabular amounts in thousands of dollars SHARE CA

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 19 Consolidated Statements of Changes in Equity unaudited For the nine months ended September 27, 2014 tabular amounts in thousands of dolla

20 CON SO LIDAT ED FINAN C IAL STAT E M E N T S Consolidated Statements of Cash Flows unauditied tabular amounts in thousands of dollars Nine Months Ending September 26, 2015 September 27, 2014 Ca

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 21 Quarters ended September 26, 2015 and September 27, 2014 amounts in thousands of dollars The accompanying unaudited interim financial sta

22 Not es to t h e U NaU d ited C o N d e N s e d C o N s o l i dat e d i N t e r i m F i NaN C i al s tat e me Nt s Quarters ended September 26, 2015 and September 27, 2014 amounts in thousands of

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 23 Quarters ended September 26, 2015 and September 27, 2014 amounts in thousands of dollars b Stock option plan During the nine months ende

24 Not es to t h e U NaU d ited C o N d e N s e d C o N s o l i dat e d i N t e r i m F i NaN C i al s tat e me Nt s Quarters ended September 26, 2015 and September 27, 2014 amounts in thousands of

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 25 DISTRIBuTION CAST RESIN CONTROl DRIVE ISOlATION ShOVEl DuTY PRODUCT STRENgTH POwER OIlFIllED

26 Gl o bal lo cati o n s Hammond Power Solutions Inc. Canada Corporate Head Office 595 Southgate Drive Guelph, Ontario N1G 3W6 15 Industrial Road Walkerton, Ontario N0G 2V0 10 Tawse Place Guelph, O

H am m o n d P ow e r S o l u t i o n S Q 3 re P or t 27 Corporate Officers and Directors William g. Hammond Chairman of the Board and Chief Executive Officer Stock Exchange Listing Toronto Sto

T H E F U T U R E I S B R I G H T. HAMMONDPOWERSOLUTIONS.COM

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