Hammond Power Solutions Reports Second Quarter 2025 Financial Results

Core Insights - Hammond Power Solutions Inc. (HPS) reported record sales of approximately $224 million in Q2 2025, reflecting a 14% increase compared to Q2 2024 [3][6] - The company faced rising input costs, leading to a slight decrease in gross margin to 30.7% from 32.8% in the previous year [3][7] - HPS's new production facility in Mexico is complete, with shipments expected to start later in 2025 [3][5] Financial Performance - Q2 2025 net earnings were $13.4 million, down from $23.6 million in Q2 2024, primarily impacted by share-based compensation [10][12] - Adjusted EBITDA for Q2 2025 was $33 million, representing 14.9% of sales, an increase from $32.6 million in Q2 2024 [6][11] - Year-to-date sales reached $425.8 million, a 9.8% increase from $387.9 million in the same period of 2024 [15] Market Segmentation - The U.S. market saw significant growth, with sales increasing by 18.3% to $157.6 million in Q2 2025 [3][15] - Canadian sales grew by 4.9% to $58.6 million, while sales in India showed a slight increase of 1.0% [3][15] - The backlog increased by 8.4% compared to Q2 2024, although it decreased by 8.0% from Q1 2025 [4] Cost Structure - Selling and distribution expenses rose to $24.7 million in Q2 2025, accounting for 11.0% of sales, up from 10.4% in Q2 2024 [8] - General and administrative expenses increased significantly to $24.5 million, or 10.9% of sales, compared to 4.6% in the previous year [9] - Capital spending for Q2 2025 was $11.8 million, an increase from $9.9 million in Q2 2024 [14] Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $0.275 per share for both Class A and Class B shares [13]