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Q2 Report POSITIVE MOMENTUM For the six months ended June 27, 2015 We are firmly committed to delivering longterm value to our Shareholders and remain focused on the success of all of our Stakeholder

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 2 re P or t 3 Fellow Shareholders, We are pleased to report the Quarter 2, 2015 results for Hammond Power Solutions Inc. HPS. We continue to build substa

4 Q2 manag em en t s d is c uss i o n an d analys i s Q2 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 2 re P or t 5 Sales Sales for the quarterended June 27, 2015 were 65,384, an increase of 3,668 or 5.9 from Quarter 2, 2014 sales of 61,716 and an increas

6 Q2 manag em en t s d is c uss i o n an d analys i s Gross margin Gross margin rates for Quarter 2, 2015 were 24.1 compared to Quarter 2, 2014 margin rates of 23.3, an improvement of 0.8 of sales.

H am m o n d P ow e r S o l u t i o n S Q 2 re P or t 7 Interest expense Interest expense for Quarter 2, 2015 finished at 264, comparable to the Quarter 2, 2014 expense of 259. Yeartodate interes

8 Q2 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 2 re P or t 9 Accumulated other comprehensive income Changes to the accumulated other comprehensive income AOCI balance include foreign currency translat

10 Q2 manag em en t s d is c uss i o n an d analys i s strives to curtail or reduce the negative impact of these risks through diversification of its core business, market channel expansion, breadth

H am m o n d P ow e r S o l u t i o n S Q 2 re P or t 11 OEM and distributor channels. Outstanding share data Offbalance sheet arrangements The Company has no offbalance sheet arrangements, othe

12 Q2 manag em en t s d is c uss i o n an d analys i s applies to contracts with customers and two approaches to recognizing revenue at a point in time or over time. The model features a contactbase

H am m o n d P ow e r S o l u t i o n S Q 2 re P or t 13 Strategic direction and outlook HPS is dedicated to its strategic investment in growth initiatives globally. This commitment is evidenced

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 2 re P or t 15 Consolidated Statements of Financial Position unauditied tabular amounts in thousands of dollars As at June 27, 2015 December 31, 2014

16 CON SO LIDAT ED FINAN C IAL STAT E M E N T S Consolidated Statements of Earnings unauditied Quarter Ending tabular amounts in thousands of dollars Six Months Ending June 27, 2015 June 28, 20

H am m o n d P ow e r S o l u t i o n S Q 2 re P or t 17 Consolidated Statements of Comprehensive Income unauditied tabular amounts in thousands of dollars Quarter Ending Six Months Ending Jun

18 CON SO LIDAT ED FINAN C IAL STAT E M E N T S Consolidated Statements of Changes in Equity unaudited For the six months ended June 27, 2015 tabular amounts in thousands of dollars SHARE CAPITAL

H am m o n d P ow e r S o l u t i o n S Q 2 re P or t 19 Consolidated Statements of Changes in Equity unaudited For the six months ended June 28, 2014 tabular amounts in thousands of dollars SH

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 Six Months Ending June 27, 2015 June 28, 2014 Cash flows fr

H am m o n d P ow e r S o l u t i o n S Q 2 re P or t 21 Quarters ended June 27, 2015 and June 28, 2014 amounts in thousands of dollars The accompanying unaudited interim financial statements of

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 June 27, 2015 and June 28, 2014 amounts in thousands of dollars J

H am m o n d P ow e r S o l u t i o n S Q 2 re P or t 23 Quarters ended June 27, 2015 and June 28, 2014 amounts in thousands of dollars b Stock option plan During the six months ended June 27,

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 June 27, 2015 and June 28, 2014 amounts in thousands of dollars T

H am m o n d P ow e r S o l u t i o n S Q 2 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 2 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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