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Quarterly Report Q3 For the nine months ended October 1, 2016

CONTENTS Letter to Shareholders Managements Discussion and Analysis Selected Annual and Quarterly Information Consolidated Financial Statements Notes to Consolidated Financial Statements 3 4 15 16 2

Fellow Shareholder, Despite a tough third quarter, Hammond Power Solutions Inc. HPS is certain of an upturn in the remaining quarter of the year. Quarter 3, 2016 results were impacted by a much slower

Q3 managementS diScuSSion and analySiS Hammond Power Solutions Inc. HPS or the Company is a North American leader in the design and manufacture of custom electrical engineered magnetics, as well as a

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D EBITDA should not be construed as a substitute for net income determined in accordance with IFRS. Order bookings represent confirmed purcha

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Backlog increased 8.9 over Quarter 2, 2016 and 25.3 over Quarter 4, 2015. The quarter change was primarily due to significant project booki

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Earnings from operations are calculated as outlined in the following table Quarter 3, 2016 Net earnings Add Income tax expense Interest exp

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Earnings per share Basic earnings per share were 0.01 for Quarter 3, 2016 versus 0.10 in Quarter 3, 2015. Adjusting for the share of loss

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Summary of quarterly financial information unaudited Fiscal 2016 Quarters Sales Net earnings Net earnings per share basic Net earnings per

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Quarter 3, 2015, a decrease of 350. Yeartodate capital expenditures were 1,111 in the current year compared to 881 in 2015, an increase of

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D close of business on September 23, 2016. The exdividend date was September 21, 2016. The Company has paid a cash dividend of eighteen cents

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Global economic conditions Current global economic conditions influence the Companys focus, direction, strategic initiatives and financial

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Such assumptions and estimates are evaluated on an ongoing basis and form the basis for making judgments about the carrying value of assets

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D model have been impacted, including the definition of a lease. The Company intends to adopt IFRS 16 in its financial statements for the ann

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Selected Annual and Quarterly Information tabular amounts in thousands of dollars The information contained in the following table present

Consolidated Statements of Financial Position unaudited tabular amounts in thousands of dollars As at October 1, 2016 December 31, 2015 Assets Current assets Cash Accounts receivable Inventories Inc

Consolidated Statements of Earnings unaudited Quarter Ending tabular amounts in thousands of dollars Nine Months Ending October 1, 2016 October 1, 2016 September 26, 2015 65,378 49,823 15,555 7

Consolidated Statements of Comprehensive Income unaudited tabular amounts in thousands of dollars Quarter Ending October 1, 2016 September 26, 2015 Nine Months Ending October 1, 2016 September 26, 2

Consolidated Statements of Changes in Equity unaudited For the nine months ended October 1, 2016 tabular amounts in thousands of dollars SHARE CAPITAL CONTRIBUTED SURPLUS AOCI RETAINED EARNINGS

Consolidated Statements of Changes in Equity unaudited For the nine months ended September 26, 2015 tabular amounts in thousands of dollars SHARE CAPITAL CONTRIBUTED SURPLUS AOCI RETAINED EARNING

Consolidated Statements of Cash Flows unaudited tabular amounts in thousands of dollars Nine Months Ending October 1, 2016 September 26, 2015 Cash flows from operating activities Net earnings Adjust

Quarters ended October 1, 2016 and September 26, 2015 tabular amounts in thousands of dollars except per share The accompanying unaudited interim financial statements of Hammond Power Solutions Inc.,

Quarters ended October 1, 2016 and September 26, 2015 tabular amounts in thousands of dollars except per share Transfer of assets On September 11, 2014, the IASB issued Sale or Contribution of Assets

Quarters ended October 1, 2016 and September 26, 2015 tabular amounts in thousands of dollars except per share Selected financial information relating to Corefficient is as follows October 1, 2016 Ca

Quarters ended October 1, 2016 and September 26, 2015 tabular amounts in thousands of dollars except per share 8. Longterm debt Opening balance Repayments Term loan CAD Term loan EUR Term loan INR E

Quarters ended October 1, 2016 and September 26, 2015 tabular amounts in thousands of dollars except per share 10. Accumulated Other Comprehensive Income Changes to the accumulated other comprehensi

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Corporate Officers and Directors William G. Hammond Chairman of the Board and Chief Executive Officer Stock Exchange Listing Toronto Stoc

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