Good day, and welcome to the Hammond Power Solutions Annual General Meeting. This conference is being recorded. At this time, I'd like to turn the conference over to Mr. Bill Hammond, CEO. Please go ahead, sir.
Thank you. Good afternoon. I would like to welcome everyone to the virtual annual meeting of the shareholders of Hammond Power Solutions Incorporated. I'm Bill Hammond, Chairman and CEO of the company. And at this time, I would like to call the meeting to order.
It is my sincere hope that everyone has been staying safe during these unprecedented times. HPS is pleased to be able to host today's meeting via audio conference, which is accessible to all of our shareholders regardless of physical location. This meeting is being moderated by a live operator who will assist shareholders during the question and answer period immediately following the formal business portion of the meeting. I would first like to acknowledge the existing directors and officers of the company, our current directors who are standing for election to the Board today and joining us virtually, along with myself, are Mr. David Fitzgibbon, Ms.
Dara Gronovsky, Mr. Grant Robinson, Mr. Fred Jakes, Ms. Ann Marie Turnbull and Mr. David Wood.
I would especially like to acknowledge and thank Mr. Don McCadham, who is retiring from the Board after his nineteen years of service. And finally, I would like to virtually introduce the Chief Financial Officer and Corporate Secretary of the company, Mr. Chris Heeter. Now I would like to proceed with the more formal portion of the meeting.
I will act as Chairman of the meeting, and I ask Chris Heeter to act as Secretary of the meeting. Louise Waltonbury of Computershare Investor Services will act as scrutineer for the meeting. The notice calling this meeting to shareholders, the information circular, the form of proxy and annual report, including financial statements, were mailed on 04/07/2021, to all shareholders of record on 03/30/2021. As everyone has received a copy of the notice calling this annual meeting of the shareholders, would someone move that the reading of the notice be dispensed with?
I so move.
Thank you. Would someone please second the motion?
I second the motion.
Thank you. All in favor, aye. Aye. Any opposed, say no. I declare the motion carried.
There is a statutory declaration attesting to the due mailing of the notice of this Annual General Meeting. It will be available upon request. Chris, would you please read the Scrutineers report? The scrutineers report shows
that there is two shareholders virtually representing 211 Class A shares and that there are 72 proxies representing 7,243,637 class a and class b shares for a total representation in person and by proxy of 15,578,005 hundred and thirty seven Class A and Class B votes, which represents 77.41% of the total number of votes outstanding.
Based on the Scrutineers report, oxys were received from a sufficient number of shareholders to constitute a quorum. I therefore declare this meeting to be regularly called and properly constituted for the transaction of business. Unless a ballot is demanded with respect to any particular matter, votes in such matters will be conducted by a voice vote, aye or no. Before proceeding with the first item of business, the minutes of the Annual Meeting of Shareholders of Hammond Power Solutions held 05/14/2020, should be approved. A copy of the minutes is available for inspection by any shareholder upon request.
May I have a motion, please, that the minutes of the annual meeting of shareholders held on 05/14/2020, as presented to this meeting be approved? I so move. Thank you. Would someone please second the motion?
I second the motion.
Thank you. All in favor say aye. Aye. Any opposed say no. I declare the motion carried.
Since copies of the auditor's report, the financial statements and notes to consolidated financial statements for the period ending 12/31/2020 were included in the 2020 annual report that was mailed to all shareholders who requested them and which have also been publicly filed. Would someone motion that we dispense with the reading of these, please?
I so move.
Thank you. Would someone please second the motion?
I second the motion.
Thank you. All in favor, aye. Aye. Any opposed, no. I declare the motion carried.
The next item of business is the election of the directors of the company. I now call for the nomination of each of the seven individuals nominated by management as set out in the information circular.
Mr. Chair, I nominate William G. Hammond, Francie Robinson, David Jacob Givens, Saurabhranovsky, Fred Jakes, Anne Marie Turnbull, and David Boyd.
Are there any further nominations? I declare the nominations closed. May I have a motion regarding the approval of each of the nominated directors as set out in the form of proxy?
I move that each of the nominated directors be elected as directors of the company as set out in the form of proxy.
Would someone please second the motion?
I second the motion.
Thank you. All in favor, aye. Aye. Any opposed, say no. I declare the motion carried.
Each of the directors elected will serve as a director of the company and hold office until the next annual meeting of shareholders or until his or her successor is duly elected or appointed. The next matter of business is to appoint the auditors of the company. With David Fitzgibbon, Chair of the Audit Committee, move that KPMG, chartered accountants, be reappointed as auditors of the company for the ensuing year and serve at such remuneration as may be approved by the Board of Directors? I so move. Thank you.
Would someone please second the motion? I second that motion. Thank you. All in favor, aye. Aye.
Any opposed, say no. I declare the motion carried. This concludes the formal part of the meeting. May I have a motion to terminate the meeting?
I so move.
Thank you. Would someone please second the motion?
I second the motion.
Thank you. All in favor, aye. Aye. Any opposed, say no. I declare the motion carried.
Before we wrap up the meeting and open it up for any questions, I would just like to make some closing comments. As we all know, 2020 was a very challenging year because of the pandemic, both personally and in business. But our focus on the health and safety of our employees as well as doing everything we could to meet the needs of our customers helped HPS get through this past year better than many companies in our industry. In the end, our unique culture pulled us through. Despite the challenges, we worked hard to also strengthen our platform and position Hammond for the inevitable rebound in economic activity.
We continued to expand our North American distributor network. We increased our market share. We broadened our product offering, and we increased our gross margins. The pandemic is far from over as we know, but we are starting to benefit from a number of significant tailwinds, including substantial global stimulus, expanding power generation, especially from alternative energy sources the electrification of transportation expanding our distributor network further in The United States a growing backlog of orders and multiple market sectors that are starting to rebound. At the same time, however, we are facing several headwinds in 2021.
The biggest one is the significant and unexpected inflation in all material costs, including copper, aluminum core steel, wooden pallets and more. By the June, we will have implemented three price increases with the possibility of another one in the second half. We are also dealing with the recent and horrific surge of COVID in India and the impact that this is having on our business and plants located there. In closing, during the forty three years that I've been involved in the electrical industry, I have never seen such a challenging combination of social, political and economic events. But at the same time, I have never seen such opportunities for Hammond Power Solutions to grow and become an even more dominant player in the dry transformer business.
We are passionate people, energizing a better world, and our future looks both green and bright. With that, I would like to open it up for any questions that you may have, please.
Thank you. If you would like to ask a question, please signal pressing star one on your telephone keypad. If you are using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach out equipment. A voice prompt on your phone line will indicate when your line has been opened. Please state both your name as well as your company before posing your question.
Once again, that is star one. If you'd like to ask a question, again, please state your name before your question as well as your company. And we'll take our first question. Caller, please go ahead. Your line is now open.
Marie? Yes. Marie Menkel, I'm a Private Investor. My question is where is there's a couple of questions. One is where are you seeing the greatest growth opportunities?
And my second question is, I noticed on your website, you have a lot of you have pictures showing the charging station for cars, for example, electric cars. Do your transformers make their way into those small units, or in some other part of the electric charging process?
Okay. Thank you, Murray. Currently, and actually for the last five years, the greatest area of growth and opportunity for us is the growth of our business to multiple markets, including EV recharging through The U. S. Distributor channel.
We have added in excess of 500 new distributor locations just in the last number of years. And this larger net of companies that are selling Hammond transformers is increasing the exposure that we have to all of these opportunities, not only across The United States, but all of these different markets. And you talk about EV recharging stations. And our transformers do not go into the wall mounted recharging units that you may see, but rather, they provide the step down of voltage that make these particular devices work. And the most common place to see our transformers is wherever Tesla recharging stations are located.
I know of one at a Canadian Tire parking lot. And you can see two Hammond transformers with the electrical distribution equipment that makes the six or eight recharging devices work. So it's an area of opportunity. We believe that it should generate this year close to $10,000,000 in sales. Part of the challenge that we have is because most of this business is sold through distributors.
So we are somewhat removed from the contractors who may be hired to install recharging equipment across The United States and even Canada. But we know that we just won the Tesla business again for the next couple of years in Canada. And we have certainly been working with, that company and others to also, serve the same need and application in The United States. Did I answer your question, Murray?
Yes, you did. Thank you so much.
Thank you.
You. We have no additional questions in the queue at this time.
Thank you, everyone, for joining us today, and it's certainly an unusual format. But I think it does give us an opportunity to reach out to more people regardless of whether, as in the past, we hold held these meetings in either Guelph or Toronto. And so it is, again, an opportunity to reach out to our shareholders. And again, thank you for your attendance and your interest. And as you could notice from my closing remarks, we're very positive about the growth momentum, particularly as the economy rebounds from this pandemic and the growth strategies that we have moving forward.
Thank you, everyone, and please stay safe.
Thank you. That does conclude today's conference. We do thank you all for your participation. You may now disconnect.