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HPS Hammond Power Solutions Inc. Hammond Power Solutions Inc. Announces Quarter 1 , 2021 Financial Results ( Dollar amounts are in thousands unless otherwise specified ) Net Earnings Growth for the Quarter FIRST QUARTER • • - HIGHLIGHTS Earnings increased 7 % to $ 2.30 million from $ 2.15 million in 2020 Margin rates increased to 24.7 % from 23.6 % in 2020 Earnings per share increased to $ 0.19 from $ 0.18 in 2020 • Net operating debt decreased 36 % to $ 11.80 million or 0.01 net debt to equity GUELPH , Ontario , April 22 , 2021 ( GLOBE NEWSWIRE ) -- Hammond Power Solutions Inc. ( " HPS " ) ( TSX : HPS.A ) a leading manufacturer of dry - type , cast resin , liquid - filled transformers and related magnetics , today announced its financial results for the First Quarter of 2021 . FIRST QUARTER RESULTS " In a year dominated by challenges and uncertainty presented by the COVID - 19 pandemic , our primary focus shifted to the health and well - being of our employees and customers . Beyond our priority on people in 2020 , we were able to fortify the underlying business by growing our North American market share , increasing our gross margins , and gaining sales from new products , " said Bill Hammond , Chairman and CEO of Hammond Power Solutions . “ Our distributor network has doubled in the last 5 years and provides a diverse pipeline of customers and products including power quality , electric vehicle charging and renewable power generation , extraction for natural resources , and essential power for servers powering the world's largest technology companies . " " The first quarter highlighted the strength of our distributor network and its ability to provide a diversified revenue base and now contributes more than 60 % of Hammond's revenue . This added sector diversification was the primary driver of our gross margin and bookings increase for the quarter compared to 2020 , " said Chris Huether , CFO of Hammond . " Looking forward , we have implemented price increases in the quarter to reflect the commodity price increases we are seeing in our raw materials . We expect to see these increases work their way through our back log in the second half of 2021. " Sales for the quarter - ended March 27 , 2021 were $ 80,121 , a decrease of $ 8,299 or 9.4 % from Quarter 1 , 2020 sales of $ 88,420 . This would be the fourth quarter the business was impacted by the COVID 19 pandemic . It is important to note that the pandemic had minimal impact on the business in the same quarter last year as the Pandemic was in its infancy stage . Sales in the United States ( " U.S. " ) decreased by $ 9,836 or 17.5 % , finishing at $ 46,505 for Quarter 1 , 2021 compared to $ 56,341 in Quarter 1 , 2020. Canadian sales remained stable at $ 27,801 for the quarter , a slight increase of $ 457 or 1.7 % from Quarter 1 , 2020 sales of $ 27,344 . Indian sales for Quarter 1 , 2021 finished at $ 5,815 versus $ 4,735 in Quarter 1 , 2020 , an increase of $ 1,080 or 22.8 % . Bookings increased 7.51 % from Quarter 1 , 2020 due to a lift in direct bookings in both the American and Canadian markets . By channel , direct bookings increased by 20.4 % and while the distributor channel was flat as compared to the same quarter last year . The Company saw an increase in its gross margin rate for Quarter 1 , 2021 which was 24.7 % compared to Quarter 1 , 2020 margin rate of 23.6 % , an improvement of 1.1 % of sales . This margin improvement is attributed to sales mix , market specific pricing and expense management . Total selling and distribution expenses from continuing operations were $ 9,807 in Quarter 1 , 2021 or 12.2 % of sales versus $ 11,140 in Quarter 1 , 2020 or 12.6 % of sales , a decrease of $ 1,333 or 12.0 % . General and administrative expenses from continuing operations were $ 6,619 or 8.3 % of sales for Quarter 1 , 2021 compared to Quarter 1 , 2020 expenses of $ 6,701 or 7.6 % of sales , a decrease of $ 82 or 1.2 % . Quarter 1 , 2021 earnings from operations were $ 3,402 compared to $ 3,033 for the same quarter last year , an increase of $ 369 or 12.2 % . The increase in the quarter earnings from operations is primarily a result of decreased selling , distribution , general , administrative expenses and government wage subsidy support offsetting the lower gross margin dollars . Interest expense for Quarter 1 , 2021 was $ 105 , a decrease of $ 291 or 73.5 % compared to the Quarter 1 , 2020 expense of $ 396 . The foreign exchange loss in Quarter 1 , 2021 was $ 116 compared to a gain of $ 376 in Quarter 1 , 2020 , a change of $ 492 . Net earnings for Quarter 1 , 2021 finished at $ 2,298 compared to net earnings of $ 2,148 in Quarter 1 , 2020 , an increase of $ 150 or 7.0 % . The increase in the quarter earnings is a result of lower selling , distribution , general , administration , interest expenses and government wage subsidy support offsetting the decline in gross margin dollars .