Guelph, Ontario - June 6, 2000 -- The Board of Directors has approved in principle, a plan to spin off the dry-type transformer business. The new company will be created by a plan of arrangement to be effective on January 1, 2001.

Each shareholder, as of the date of record, will receive a new issued share of the Hammond Transformer business for each Hammond Manufacturing share they hold. Shareholders will continue to hold their Hammond Manufacturing shares, and an application for listing on the Toronto Stock Exchange will be made by the new company.

This transaction is conditional upon regulatory, financial, and shareholder approval and is expected to be on a tax-free basis to Canadian resident shareholders. A special committee of the Board has been established to review and monitor the process.

Bill Hammond will be Chairman and CEO of the new company, which will be one of the largest manufacturers of dry-type electrical transformers in North America with leading positions in a number of markets for engineered products.

Hammond Manufacturing will continue to pursue the global growth of its electrical enclosures and electronics business through its operations in the US, UK and Canada.

As part of the reorganization, senior management of Moloney Electric, Hammond Manufacturing’s utility transformer business unit, has agreed to buy into their company. Moloney Electric will continue to be supported by both Hammond Manufacturing and the new transformer company.

In order to reflect the costs of the various aspects of the reorganization plan, a charge against earnings of $1 million will be booked in the 2000 financial statements.

This reorganization will enable each company to concentrate on its core business and take advantage of the growth opportunities in their different markets. It will also permit shareholders to make more focused investment decisions and allow the market to assign a more appropriate stand-alone valuation to each company.

Hammond Manufacturing Company Limited, based in Guelph, Ontario reported consolidated sales of $46.3 million and net earnings of $652,000 for the quarter ended March 31, 2000 (1999 Sales $37.8 million & net earnings $388,000). The company currently employs over 1,100 employees in 13 facilities in Canada, the US, and the UK.

Signed: Robert F. Hammond
Chairman & CEO Information

R. F. Hammond
Tel: (519) 822.2960
Fax: (519) 822.8987
Email: ir@hammfg.com