HOUSTON & KEMAH, Texas--(BUSINESS WIRE)—Hammonds Industries, Inc. (OTCBB:HMDI - News)

Mr. Gary D. Woerz, CEO and Chief Financial Officer of HMDI, which owns Hammonds Technical Services, Hammonds Fuel Additives and Hammonds Water Treatment Systems, announced that revenues increased to $1,619,399, or by 22%, for the three months ended March 31, 2007, from $1,325,169 for the three months ended March 31, 2006. Hammonds Water Treatment revenues increased by $367,871, or 126%, due to increased demand for its products. In addition, during the three month period ended March 31, 2007, Hammonds projected backlog of orders has increased to approximately $8,000,000, representing a substantial increase from 2006.

The Company reported a net loss of $845,867 for the three month period ended March 31, 2007, compared to a net loss of $447,974 for the same three month period in 2006. The increase in our net loss is primarily attributable to costs associated with Hammonds’ introduction of its new line of Omni Directional Vehicles (ODVs). Excluding depreciation and amortization expense of $204,176, our net loss would have been $641,691 for the three month period ended March 31, 2007.

Cost of sales was $1,465,241 for the three months ended March 31, 2007, compared to $1,041,113 for the three months ended March 31, 2006. The increase was primarily associated with the increased revenues for Hammonds Water Treatment.

Selling and administrative expenses increased to $864,719 for the three months ended March 31, 2007, from $653,303 for the three months ended March 31, 2006. The increase was primarily due to sales and marketing expenses associated with the production of its new line of ODVs, the on-going sales and marketing efforts associated with all of its product lines, and the increase in amortization costs of the patents and trademarks.

As a result of the foregoing, our loss, excluding interest expense and income, for the three month period ended March 31, 2007, was $710,561 compared to an operating loss of $369,247 for the same period ended March 31, 2006.

Other expense increased to $135,306 for the three month period ended March 31, 2007, from $78,727 for the three month period ended March 31, 2006. The increase was primarily due to interest expense on higher working capital loans.

At March 31, 2007 and December 31, 2006, we had total assets of $10,482,882 and $10,384,397, respectively. We had positive working capital of $1,952,038 at March 31, 2007, compared to $1,754,559 at December 31, 2006.

In March 2007, Vision Opportunity Management Fund Limited (VOMF) exercised stock warrants to purchase 3,970,400 restricted shares of HMDI common stock at an exercise price of $0.18 per share for gross proceeds of $714,672. These funds will be used to enhance production capability at Hammonds. Additionally, Hammonds obtained $243,247 in long-term financing through an equipment loan. Hammonds recently purchased $240,000 in capital equipment, including a CNC controlled plasma steel cutting system, a state-of-the-art painting facility, multiple material handling cranes throughout the production area, an automated production saw and a new mill for the machine shop. In addition to tools, Hammonds installed new compressed air systems and expanded plant lighting and power distribution to support additional welding and assembly stations. New production flow testing stands and hydrostatic test stations will be installed by the end of May. "Once installed and operational, these latest additions to production capability will contribute dramatically to capacity and efficiency," reported Carl Hammonds, President of the Hammonds companies. In addition, Hammonds is implementing manufacturing and cost saving procedures in order to generate increased revenues with greater cost efficiencies.

For more detailed information, please refer to our March 31, 2007 Form 10-QSB filed with the SEC on May 15, 2007.

Hammonds manufactures and sells products in the following areas:

1. WATER TREATMENT FOR MUNICIPAL AND INDUSTRIAL USE

The production and treatment of municipal and industrial water continues to gain attention as our nation's demand for clean, safe water grows. Hammonds' proprietary solid disinfection technology has been a major alternative to gaseous chlorine used in every phase of water treatment. Municipal drinking water, food processing, and industrial waste treatment presents unlimited growth potential for Hammonds' water treatment patents. Hammonds will distribute 1.2 million pounds of calcium hypochlorite for municipal disinfection through its network of equipment distributors and food processing customers in 2006.

2. FUEL HANDLING EQUIPMENT FOR THE MILITARY

Hammonds' fluid powered additive systems helped pave the way for a single battlefield fuel by supplying both distribution and tactical additive injectors to all branches of the United States military. Hammonds continues to dominate military additive injection through sole source supply of equipment for long-term contracts as our militaries evolve their fuel handling technology.

3. FUEL ADDITIVE INJECTION

Hammonds provides the industry standard for additive injection of general and commercial aviation fuels. Hammonds truck mounted injectors are the technology of choice for major U.S. marketers of jet fuel in providing custom blending at the end of the hose for not only jet fuel, but a wide range of products including diesel, LPGN (propane), home heating oil, and bio-diesel. In January of 2005, Hammonds began a long-term program to install dye injection systems in over eight hundred Canadian and U.S. stationary and truck mounted diesel delivery installations. In addition to equipment, Hammonds fuel additive division produces and markets motor and aviation fuel additives with Biobor ® JF as its primary product serving the aviation, stand-by power and marine fuel markets. While Biobor®JF is one of only two biocides approved for use in aviation fuels, it has been tested and approved as a preservative for manufactured wood products such as engineered trusses, windows and sheet building materials. The expanding use of these manufactured wood products promises a new expanded market for Biobor® JF since products such as arsenic have been removed from the list of approved wood preservatives.

4. INDUSTRIAL UTILITY VEHICLES

Hammonds has been delivering this entirely new class of industrial utility vehicles called the "Omni Directional Vehicle" (ODV). This revolutionary concept rewrites the standards for utility vehicle safety and performance. Fork lifts, freight terminal tractors, security vehicles, industrial highway mowers and a full range of aviation ground handling vehicles are dramatically enhanced from this patented design. In addition to producing several "ODV" products at its plant in Houston Texas, Hammonds will enter into license agreements with several major manufacturers to produce a range of vehicles based on "ODV" patents. For additional information please visit our web site www.hammondscos.com.

Private Securities Litigation Reform Act Safe Harbor Statement:

The matters discussed in this release contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended that involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects" and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those that we may anticipate in each of our segments reflected by our subsidiaries' operations include without limitations, continued acceptance of the Company's products and services, increased levels of competition, new products and technology changes, the dependence upon financing, third party suppliers and intellectual property rights, the rules of regulatory authorities and risks associated with any acquisitions. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis, judgment, belief or expectation only as of the date hereof.

Investor Relations: Rebekah Ruthstrom, 281-334-9479, rruthstrom@americanii.com