Quarterly Report Q2 For the six months ended July 2, 2016

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D CONTENTS Letter to Shareholders Managements Discussion and Analysis Selected Annual and Quarterly Information Consolidated Financial State

Fellow Shareholder, Hammond Power Solutions Inc., HPS has delivered respectable financial results given another difficult economic quarter. Other than the deep recession of 2008, these are the toughes

Q2 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 substitute for net income determined in accordance with IFRS. Order bookings represent confirmed purchase orders for goods or services rece

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D 8.2 over the same period as last fiscal year. The distributor channel bookings increased by 13.0 and the direct channel bookings increased

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Earnings from operations Quarter 2, 2016 earnings from operations were 2,560, a slight decrease of 63 or 2.4 from 2,623 for the same quarte

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Net earnings Net earnings for Quarter 2, 2016 finished at 517 compared to net earnings of 1,096 in Quarter 2, 2015, a decrease of 579 or 52

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 467 in Quarter 2, 2016 compared to 196 for Quarter 2, 2015, an increase of 271. Yeartodate capital expenditures were 1,012 in the current y

DOLLARS IN T H O US AN D S U N LESS OTH ERW I S E S TAT E D Controls and procedures The Chief Executive Officer and the Chief Financial Officer are responsible for establishing and maintaining disclo

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 July 2, 2016 December 31, 2015 Assets Current assets Cash Accounts receivable Inventories Income

Consolidated Statements of Earnings unaudited Quarter Ending tabular amounts in thousands of dollars Six Months Ending July 2, 2016 July 2, 2016 69,138 52,394 16,744 7,901 6,283 2,560 June 27, 2

Consolidated Statements of Comprehensive Income unaudited tabular amounts in thousands of dollars Quarter Ending July 2, 2016 Six Months Ending July 2, 2016 June 27, 2015 1,096 June 27, 2015 1,

Consolidated Statements of Changes in Equity unaudited For the three months ended July 2, 2016 tabular amounts in thousands of dollars SHARE CAPITAL CONTRIBUTED SURPLUS AOCI RETAINED EARNINGS NO

Consolidated Statements of Changes in Equity unaudited For the three months ended June 27, 2015 tabular amounts in thousands of dollars SHARE CAPITAL CONTRIBUTED SURPLUS AOCI RETAINED EARNINGS N

Consolidated Statements of Cash Flows unaudited tabular amounts in thousands of dollars Six Months Ending July 2, 2016 June 27, 2015 Cash flows from operating activities Net earnings Adjustments fo

Quarters ended July 2, 2016 and June 27, 2015 tabular amounts in thousands of dollars except per share The accompanying unaudited interim financial statements of Hammond Power Solutions Inc., HPS or

Quarters ended July 2, 2016 and June 27, 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 between

Quarters ended July 2, 2016 and June 27, 2015 tabular amounts in thousands of dollars except per share Selected financial information relating to Corefficient is as follows July 2, 2016 Cash 228 7,6

Quarters ended July 2, 2016 and June 27, 2015 tabular amounts in thousands of dollars except per share 8. Longterm debt Opening balance Repayments Term loan CAD Term Loans EUR Term loan INR Exchange

Quarters ended July 2, 2016 and June 27, 2015 tabular amounts in thousands of dollars except per share 10. Accumulated Other Comprehensive Income Changes to the accumulated other comprehensive incom

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

HAMMONDPOWERSOLUTIONS.COM