GUELPH, Ontario, March 19, 2026 (GLOBE NEWSWIRE) -- In a release issued under the same headline earlier today by Hammond Power Solutions Inc. (TSX:HPS), please note that the Quarterly adjusted EBITDA should be 15.2% of sales, not 13.5% as previously stated. The corrected release follows:
Hammond Power Solutions Inc. ("HPS" or the "Company") (TSX:HPS) a leading manufacturer of dry-type transformers, power quality products and related magnetics, today announced its financial results for the fourth quarter 2025.
QUARTERLY HIGHLIGHTS:
Record annual sales of $898 million, a 13.9% increase versus 2024;
Quarterly adjusted EBITDA of $38.7 million, or 15.2% of sales;
Record annual adjusted EBITDA of $133.3 million, or 14.8% of sales;
Quarterly adjusted earnings per share of $1.98. Earnings per share of $1.28;
Annual adjusted earnings per share of $6.81. Earnings per share of $6.07;
Backlog is 122% higher than Q4 2024
"HPS delivered a strong finish to 2025, with fourth quarter sales of $254.1 million and record annual sales of $898.3 million, an increase of 13.9% over 2024," said Adrian Thomas, Chief Executive Officer of Hammond Power Solutions. "Growth was driven by continued strength in the U.S., particularly in private label and custom-engineered solutions supporting data centre expansion, infrastructure investment and industrial electrification. Custom and higher-value solutions continued to outpace standard products, reflecting sustained demand for resilient power systems."
"Our backlog at December 31, 2025 increased 122% year over year and 74% sequentially, providing meaningful revenue visibility entering 2026. With expanded capacity in Mexico and operational improvements across our footprint, we are positioned to convert this demand efficiently. These investments strengthen our ability to support customers across electrification and digital infrastructure markets as they continue to scale."
Geography
Quarter 4,2025
Quarter 4,2024
$ Change
% Change
YTD2025
YTD2024
$Change
% Change
U.S. & Mexico*
175,419
140,894
34,525
24.5
%
631,921
534,888
97,033
18.1
%
Canada
72,374
58,324
14,050
24.1
%
233,981
215,394
18,587
8.6
%
India
6,299
9,258
(2,959
)
(32.0
%)
32,353
38,058
(5,705
)
(15.0
%)
Total
254,092
$
208,476
45,616
21.9
%
898,255
788,340
109,915
13.9
%
Year-to-date, the U.S. market experienced its strongest growth in the private label channel and steady growth in the distribution channel, with strong sales into data centres, switchgear manufacturers, motor control and mining. While sales of stocked standard products have grown, they have been outpaced by higher sales of custom products, primarily sold into the data centre market. General economic conditions in the U.S. deteriorated through 2025 resulting in slower industrial and commercial construction markets. The Canadian market was very strong in the year, despite economic headwinds. It continued to achieve year-over-year growth through distribution channels in both stock and flow product and large projects in commercial construction, data centres, public infrastructure, mining and utilities.
The Company's December 31, 2025 backlog1 delivered a strong 122% increase as compared to December 31, 2024 and has increased 74% from Quarter 3, 2025. Ongoing capacity expansions across key locations are driving improvements in lead times, enhancing our ability to respond to customer demand with greater speed and efficiency.
The consolidated gross margin in 2025 decreased to 30.3% versus 32.8% in 2024, a decrease of 250 basis points. Margins in the fourth quarter of 29.2% were lower than the previous three quarters and full year margin of 30.3%. The reduction in the gross margin is primarily the result unabsorbed overhead costs on our new factory, higher material costs related to commodity volatility, inflation and tariffs in the supply chain for raw material purchases and tariffs on product imports.
"We delivered a strong quarter to complete the year. EBITDA margins recovered in the quarter versus the third quarter primarily due to the record revenue recorded," said Richard Vollering, Chief Financial Officer of HPS. "Working capital improved during the quarter, and as a result, so did our net cash position. Capital spending during the year was $35 million, which was at the low end of our projected range, and we completed some key capacity initiatives that will allow us to begin shipping large projects in the first quarter of 2026."
Total selling and distribution expenses were $100,537 for 2025 versus $83,412 in 2024, an increase of $17,125 or 20.5%. On a percentage-of-sales basis, total selling and distribution expenses increased to 11.2% of sales for 2025 from 10.6% in 2024. The increase in selling and distribution expenses is a result of higher variable freight and commission expenses attributed to the increase in sales as well investments in people and technology to support growth.
General and administrative expenses in 2025 were $67,763 compared to $76,106 for 2024, a decrease of $8,343 or 11.0%. On a percentage-of-sales basis these costs have decreased from 9.7% in 2024 to 7.5% in 2025. The change is mainly due to a decrease in share-based compensation costs, offset by ongoing strategic investments in people and resources to support our growth strategies and higher levels of general business activity.
Net earnings for 2025 finished at $72,241 compared to net earnings of $71,531 in 2024, an increase of $710 or 1.0%. The main contributors to the higher current year net earnings were higher sales, additional gross margin dollars, lower general and administrative expenses and a lower effective tax rate. These gains were offset by increases in selling and distribution expenses and higher foreign exchange losses.
EBITDA for the year-ended December 31, 2025 was $121,443 versus $112,873 in 2024, an increase of $8,570 or 7.6%. Adjusted for foreign exchange loss/gain and share based compensation expenses adjusted EBITDA for 2025 was $133,330 versus $130,484 in 2024, an increase of $2,846 or ...
