Customer Updates

We are carefully working through the impacts of the global COVID-19 outbreak. Our plans encompass 4 key aspects:

1. Protect our people and those we come in contact with.

2. Adapt our business to the current situation

3. Engage actively with our stakeholders – employees, customers, suppliers and shareholders

4. Plan for the recovery and return to a new normal.

This update details actions taken to protect the supply of products and our future plans to cope with an escalation in the seriousness of the crisis..

• Situation Management – We have a detailed Business Continuity Plan (BCP) in place. Our Emergency Response Team was formed in late February and meets regularly. We have completed a pandemic planning desktop exercise to identify increasingly serious conditions from initial notification through to reduced staffing levels and potential mandated shutdowns. The exercise identified specific actions for each of these conditions. We are executing this plan.

• Supply Chain – Our Supply Chain team has identified components or parts which are sourced from Covid-19 affected countries. Where potential supply chain risks were identified order quantities were increased, or future orders pulled forward to ensure continuity of supply. We are maintaining stock levels and have no at-risk products. This process is ongoing, and we are in communication with our suppliers to maintain continuity of supply. In the event we identify a potential supply chain issue we will source from alternative suppliers and maintain contact with potentially impacted customers.

• Logistics – Our global logistics partner is in daily contact with our in-house shipping team. Sea-freight operations have been largely unaffected but air freight capacity is reducing with the cancellation of passenger services. Our logistics partner has secured forward freight space, but costs are higher than normal. We will update customers directly if there is any impact on scheduled delivery dates or cost of service.

• Workforce Protection – HamiltonJet is following the advice of the World Health Organisation, the NZ Ministry of Health, our local District Health Board, and our Occupational Health Advisors to protect our workforce. We have initiated social distancing, minimised internal meetings, reduced meeting room capacity, provided hand sanitisers and antibacterial wipes to all staff/departments, increased regular sanitising of door handles, keyboards, internal equipment, and any common spaces. Work from home environments and remote workspaces have been enabled. We have stopped all international and domestic travel for business and are encouraging staff to limit personal travel and social interactions.

• Factory Staffing – HamiltonJet already has a robust cross-training strategy in place. At least 3 members of staff can carry out any production task. We are now providing further cover for key roles by increased cross-training. Our continuity plan prepares us for 3 levels of reduced staffing below our normal levels:

a) Down to 85% attendance we will work to our current production schedule. Past experience suggests this will be achievable with the support of our great team.

b) From 85% to 60% attendance we will reduce our output rate and spread orders forward through the year ahead. We will inform customers of any delays, work with them to manage any impact, and prioritise those with hard deadlines. Action is already being taken to establish order timeline urgency with our customers.

c) Below 60% attendance, or if the NZ Government mandate it, the factory will close until it is safe to reopen. On return production will increase as quickly and safely as possible. We will inform customers of the delays, work with them to manage any impact, and prioritise those with hard deadlines. Action is already being taken to establish order urgency with our customers.

• Labour Contingency - At the time of writing the factory is still operating at 100% output and until COVID-19 we were preparing for a rise in output. Additional staff had already been taken on and trained. It is our intent to keep these people on for the foreseeable future to provide a headcount buffer to manage production and meet customer demand.

• Customer Support – We are still 100% open for business and orders are still rolling in. We are here to support you on existing and new projects. Even during a factory shutdown we will continue to respond to sales enquiries and provide technical support as long as circumstances permit. We are well provisioned for remote office and work from home environments.

• Business Strength – Over the years the Board and Owners of HamiltonJet have been financially prudent. The company is in a strong financial position with no risk this situation will jeopardise our liquidity or long-term survival. We continue to invest in people, products and technology solutions to support our customers around the world and will be well placed to return to the new normal once the pandemic risk has passed.