The following is a summary of the Hammond Power Solutions Inc. (HMDPF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Hammond Power Solutions reported an 11% increase in Q1 2024 sales as compared to Q1 2023.

• Q1 2024 backlog remained stable with a minor decrease of 1% from Q4 2023, but saw an annual increase of 11% over Q1 2023.

• Margins remained almost consistent for the quarter at 31.7%, just 0.1% lesser than Q1 2023.

• The company expects a capital expenditure of over $40 million in 2024.

• Net earnings for the quarter were down to $7.9 million or $0.67 per share, compared to $15.8 million or $1.32 per share in Q1 2023.

• Generated cash from operations amounted to $6.2 million for the quarter.

Business Progress:

• The company reported notable strengthening of sales in the US distribution channel due to increased shipment of low voltage standard products.

• Sales momentum in Canada remains strong due to large projects across focus sectors.

• The capital expenditure planned for 2024 is expected to be completed in early 2025.

• In response to steady product demand, Hammond will implement a 4% price increase, effective in Q2 2024.

• Board approved $8 million additional capacity investment aimed at increasing sales and hitting the target of $1 billion in sales by the end of the decade.

• Succession in operation leadership with John Bailey replacing retired Bob Yusyp as Chief Operating Officer.

• Company is venturing into developing variable frequency drive systems under SmartD investment, which may result in development of silicon carbide devices.

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