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Hammond Power Solutions Q1 Report Three months ended April 3, 2010 Building on our strengths

Fellow Investor Compared to a year ago, our Company performance is trending upwards as evidenced by our improving bookings and backlog rates. The Company is focused on its expense management and cost

Despite all of these challenges, HPS still generated a respectable net income of 8.5 before tax in a weaker quarter of sales. Looking forward, we are more optimistic than we have been in any quarter s

Managements Discussion Analysis First Quarter 2010 Overview Hammond Power Solutions Inc. HPS or the Company is a North American leader in the design and manufacture of custom electrical engineered ma

Sales Sales for the quarter ended April 3, 2010, were 44,273 down 10,572 or 19.3 from the comparative quarter last year, and were 4,348 lower, or 8.9 from Quarter 4, 2009. A 19.7 stronger Canadian dol

ManageMents Discussion analysis Order bookings and backlog We experienced a 4.5 increase in bookings in Quarter 1, 2010 as compared to Quarter 4, 2009 as several of our markets have shown increases

FiRst QuaRteR 2010 Earnings from operations Earnings from operations for the quarter continue to be hurt by the significant impact of U.S. dollar translation exchange losses, lower sales and lower gr

ManageMents Discussion analysis EBITDA is calculated as outlined in the following table Quarter 1, 2010 Quarter 1, 2009 Net earnings for the quarter Add Interest expense Income tax expense Depreciat

FiRst QuaRteR 2010 Contingent liabilities The Company has two properties for which there are contingent liabilities. Moloney Properties 1159714 Ontario Inc. The Sterling property was sold on October

ManageMents Discussion analysis Controls and procedures Bill 198 Internal Controls During Quarter 1, 2010 there were no material changes identified in HPS internal controls over financial reporting

FiRst QuaRteR 2010 During this phase any applicable accounting policy choices permissible under IFRS will be assessed for the most appropriate application. Areas identified in Phase One are analyzed

ManageMents Discussion analysis Strategic outlook HPS has delivered a solid quarter of financial results. HPS has maintained a strong Balance Sheet. HPS continues to grow its market share in both Ca

FiRst QuaRteR 2010 Forwardlooking information Certain information in this MDA is forwardlooking and is subject to risks and uncertainties. The results or events predicted in this information may diff

Selected Annual and Quarterly Financial Information The information contained in the following table presents the historic audited annual financial information as at December 31 and the unaudited fina

Selected Annual and Quarterly Financial Information The information contained in the following table presents the historic audited annual financial information as at December 31 and the unaudited fina

Consolidated Balance Sheet unaudited tabular amounts in thousands of dollars As at April 3, 2010 Assets Current assets Cash and cash equivalents Accounts receivable Income taxes recoverable Inventorie

Consolidated Balance Sheet unaudited tabular amounts in thousands of dollars As at April 3, 2010 Assets Current assets Cash and cash equivalents Accounts receivable Income taxes recoverable Inventorie

Consolidated Statements of Earnings and Comprehensive Earnings unaudited tabular amounts in thousands of dollars except earnings per share Quarter Ending April 3, 2010 Sales Cost of sales Gross margin

Consolidated Statements of Earnings and Comprehensive Earnings unaudited tabular amounts in thousands of dollars except earnings per share Quarter Ending April 3, 2010 Sales Cost of sales Gross margin

Consolidated Statements of Cash Flows unaudited tabular amounts in thousands of dollars Quarter Ending April 3, 2010 Cash provided by used in Operations Net earnings Add deduct items not involving cas

Consolidated Statements of Cash Flows unaudited tabular amounts in thousands of dollars Quarter Ending April 3, 2010 Cash provided by used in Operations Net earnings Add deduct items not involving cas

Consolidated Statements of Shareholders Equity unaudited tabular amounts in thousands of dollars Three month periods ended April 3, 2010, and March 28, 2009. Share Capital Balance as at January 1, 201

Consolidated Statements of Shareholders Equity unaudited tabular amounts in thousands of dollars Three month periods ended April 3, 2010, and March 28, 2009. Share Capital Balance as at January 1, 201

conDenseD notes Hammond Power Solutions Inc. HPS or the Company is a public company, traded on the Toronto Stock Exchange HPS.A and is incorporated under the Ontario Business Corporations Act. HPS des

to tHe unaDiteD consoliDateD Financial stateMents f Longterm investments The investments in the cotenancy of Glen Ewing Properties 50 and in 1159714 Ontario Inc. 50, the rental property investment, ar

conDenseD notes The fair value of a financial instrument is the amount of consideration that would be agreed upon in an arms length transaction between knowledgeable, willing parties who are under no

to tHe unaDiteD consoliDateD Financial stateMents share capital is recorded at the sum of the proceeds received and the related amount of contributed surplus. m Earnings per share Basic earnings per s

conDenseD notes 2 Changes in accounting policies Effective January 1, 2009, the Company adopted the following new CICA standards Goodwill and intangible assets Handbook Section 3064, Goodwill and Inta

to tHe unaDiteD consoliDateD Financial stateMents Business combinations On the date on which an acquirer obtains control of a business, the acquirer must measure the business acquired as a whole in or

conDenseD notes purchasing U.S. dollar raw materials in Canada. The Company also monitors forecasted cash flows in foreign currencies and attempts to mitigate the risk by entering into forward foreign

to tHe unaDiteD consoliDateD Financial stateMents Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its obligations as they fall due. The Company manages its liquidit

Hammond Power Solutions Inc. Canada Corporate Head Office 595 Southgate Drive Guelph, Ontario N1G 3W6 Phone 519 8222441 15 Industrial Road Walkerton, Ontario N0G 2V0 Phone 519 8813552 Distribution Cen

corporate information Corporate Officers and Directors William G. Hammond, Chairman and Chief Executive Officer Chris R. Huether, Corporate Secretary and Chief Financial Officer Donald H. MacAdam, Dir

hammondpowersolutions.com

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