EX-99.1 2 a10-5841_3ex99d1.htm EX-99.1

EXHIBIT 99.1

 

GRAPHIC

 

Hardinge Inc.

 

Contact:

One Hardinge Drive

 

Edward Gaio

Elmira, N.Y. 14902

 

Vice President and CFO

 

 

(607) 378-4207

 

Hardinge Inc. Announces First Quarter 2010 Results

 

Performance Summary:

 

·                  Orders for first quarter 2010 were $57.5 million, up 75% compared to the prior year quarter

·                  Cash, net of current debt improved to $25.5 million, up $2.8 million from 2009 year-end

·                  $12.3 million order received from a China-based customer at start of second quarter 2010

 

ELMIRA, N.Y. — May 6, 2010 — Hardinge Inc. (NASDAQ: HDNG), a leading international provider of advanced metal-cutting solutions, today announced its first quarter 2010 financial results.

 

Hardinge reported net sales of $43.2 million for the first quarter of 2010, a decrease of 17% compared to $52.1 million for the first quarter 2009. First quarter orders of $57.5 million were up 75% compared with the prior year quarter and up 13% on a sequential quarter basis. This represents the fourth consecutive quarter of increased order volume.

 

For the first quarter of 2010, Hardinge reported a net loss of ($5.2) million, or ($0.45) per diluted and basic share, compared to a net loss of ($5.4) million, or ($0.47) per basic and diluted share for the same period of 2009.

 

“We are encouraged by the significant increase in first quarter orders, which reflect very strong demand and growth in Asia,” said Richard L. Simons, Hardinge’s President and Chief Executive Officer.  “Our globally-balanced operations and scale enable us to continue to take advantage of increased activity as it occurs around the world.  Furthermore, our comprehensive repositioning of the Company has provided increased cash flow generation and permanent cost reductions, as well as balance sheet strength.”

 

Cash from operations was $3.6 million in the first quarter. Cash balances were $28.3 million, and cash net of current debt was $25.5 million. Inventories increased by $5.9 million to support significant Asian order activity that are expected to ship in the second quarter.

 

MORE-

 


 

The following tables summarize orders and sales by geographical region for the quarter ended March 31, 2010 and 2009:

 

 

 

Quarter Ended

 

 

 

Orders from

 

March 31,

 

%

 

Customers in:

 

2010

 

2009

 

Change

 

North America

 

$

12,820

 

$

12,439

 

3

%

Europe

 

18,422

 

11,119

 

66

%

Asia & Other

 

26,245

 

9,249

 

184

%

 

 

$

57,487

 

$

32,807

 

75

%

 

 

 

Quarter Ended

 

 

 

Sales from

 

March 31,

 

%

 

Customers in:

 

2010

 

2009

 

Change

 

North America

 

$

11,550

 

$

16,123

 

(28

)%

Europe

 

12,418

 

24,287

 

(49

)%

Asia & Other

 

19,202

 

11,704

 

64

%

 

 

$

43,170

 

$

52,114

 

(17

)%

 

Total orders in the first quarter increased by $24.7 million, or 75%, to $57.5 million, compared to the same quarter of 2009. The increase was driven by overall strong market conditions in the Asia and Other market. European orders improved on a year over year basis, primarily due to increased activity in Turkey, Germany and Italy for specialized grinding machines.

 

Sales for the quarter declined $8.9 million, or 17%, compared to same quarter of 2009.  However, these sales were negatively impacted by temporary supply chain shortages for computer controls in addition to logistical delays in large turnkey orders that required customer run-offs, which led to approximately $3 million in deferred sales revenue. First quarter 2009 sales in Europe benefited from shipments out of the backlog of orders generated prior to the collapse of worldwide demand.

 

Gross profit for the first quarter was $8.9 million, a decrease of $5.1 million or 36% compared to the same quarter in 2009. The decrease was a direct result of reduced sales, continued market pricing pressures, and the impact of lower production volumes against fixed manufacturing expenses. Gross margin percentage was 20.7%, compared to 27.0% in the first quarter of 2009.

 

Selling, general and administrative (SG&A) expenses for the quarter decreased by $3.8 million to $14.4 million, or 21% compared to the same quarter last year.  2010 first quarter SG&A included charges of $0.9 million for professional services expenses related to Indústrias Romi S.A.’s unsolicited tender offer and $0.2 million related to Jones and Shipman acquisition costs while 2009 first quarter SG&A included severance related charges of $1.4 million. The SG&A reductions we have realized are a direct result of transformational changes to the Company’s business model as well as reductions in variable expenses given the lower sales levels.  Foreign currency translation had an unfavorable impact of approximately $0.6 million during the first quarter compared to the same quarter of 2009.

 

“Building on the significant order growth from the first quarter, we expect that order volume for the second quarter of 2010 will also show a strong increase compared to 2009. This expectation is bolstered by a $12.3 million order received in April from a China-based customer in the consumer electronics industry. We continue to expect that the Asian market demand will remain strong and drive our growth while the U.S. market demand will remain flat for most of 2010 and European market demand will be flat to down slightly for the year,” Mr. Simons said.

 

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Hardinge expects orders received during the second quarter to be between $60 million to $65 million, which includes the $12.3 million order in China. Revenue is expected to be between $57 and $60 million, a 15% increase over previous estimates, resulting in near breakeven EBITDA (earnings before interest, taxes and depreciation).

 

Dividend Declared

 

The Company announced that its Board of Directors has declared a cash dividend of $0.005 per share on the Company’s common stock.  The dividend is payable on June 10, 2010 to stockholders of record as of June 1, 2010.

 

Conference Call

 

The Company will host a conference call at 11:00 a.m. Eastern Time today to discuss first quarter 2010 results.  The call can be accessed live at 1-877-551-8082 and 904-520-5770 for calls originating outside the U.S and Canada, or via the internet at http://www.videonewswire.com/event.asp?id=68019.  A recording of the call can be accessed from the “Investor Relations” section of the Company’s website, www.hardinge.com, where it will be posted for one year.

 

A recording of the call can also be accessed approximately one hour after its completion by dialing 1-888-284-7564 or 904-596-3174 if calling from outside the U.S. & Canada, and entering the reference number: 2468101.  This telephone recording will be available through June 30, 2010.

 

Hardinge is a global designer, manufacturer and distributor of machine tools, specializing in SUPER PRECISION™ and precision CNC Lathes, high performance Machining Centers, high-end cylindrical and jig Grinding Machines, and technologically advanced Workholding & Rotary Products. The Company’s products are distributed to most of the industrialized markets around the world with approximately 70% of the 2009 sales outside of North America. Hardinge has a very diverse international customer base and serves a wide variety of end-user markets. This customer base includes metalworking manufacturers which make parts for a variety of industries, as well as a wide range of end users in the aerospace, agricultural, transportation, basic consumer goods, communications and electronics, construction, defense, energy, pharmaceutical and medical equipment, and recreation industries, among others.. The Company has manufacturing operations in the United States, Switzerland, Taiwan, and China. Hardinge’s common stock trades on NASDAQ Global Select Market under the symbol, “HDNG.” For more information, please visit http://www.hardinge.com.

 

This news release contains forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Such statements are based on management’s current expectations that involve risks and uncertainties. Any statements that are not statements of historical fact or that are about future events may be deemed to be forward-looking statements. For example, words such as “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue,” “strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions are intended to identify forward-looking statements. The company’s actual results or outcomes and the timing of certain events may differ significantly from those discussed in any forward-looking statements. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise

 

– Financial Tables Follow –

 


 

HARDINGE INC. AND SUBSIDIARIES

 

Consolidated Balance Sheets

(In Thousands Except Share and Per Share Data)

 

 

 

March 31,

 

December 31,

 

 

 

2010

 

2009

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

28,307

 

$

24,632

 

Accounts receivable, net

 

30,380

 

39,936

 

Notes receivable, net

 

2,927

 

2,364

 

Inventories, net

 

101,646

 

97,266

 

Deferred income taxes

 

576

 

732

 

Prepaid expenses

 

10,591

 

9,375

 

Total current assets

 

174,427

 

174,305

 

 

 

 

 

 

 

Property, plant and equipment

 

142,491

 

144,635

 

Less accumulated depreciation

 

89,362

 

89,924

 

Net property, plant and equipment

 

53,129

 

54,711

 

 

 

 

 

 

 

Notes receivable, net

 

100

 

157

 

Deferred income taxes

 

451

 

446

 

Intangible assets

 

10,458

 

10,527

 

Pension assets

 

2,220

 

2,032

 

Other long-term assets

 

27

 

26

 

Total non-current assets

 

13,256

 

13,188

 

Total assets

 

$

240,812

 

$

242,204

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

Accounts payable

 

$

21,997

 

$

16,285

 

Notes payable to bank

 

2,263

 

1,364

 

Accrued expenses

 

22,051

 

22,177

 

Accrued income taxes

 

1,360

 

1,535

 

Deferred income taxes

 

2,745

 

2,832

 

Current portion of long-term debt

 

567

 

563

 

Total current liabilities

 

50,983

 

44,756

 

 

 

 

 

 

 

Long-term debt

 

2,977

 

3,095

 

Accrued pension expense

 

21,677

 

22,082

 

Accrued postretirement benefits

 

2,416

 

2,472

 

Accrued income taxes

 

2,394

 

2,377

 

Deferred income taxes

 

4,048

 

4,030

 

Other liabilities

 

1,796

 

1,862

 

Total other liabilities

 

35,308

 

35,918

 

 

 

 

 

 

 

Common Stock - $0.01 par value

 

125

 

125

 

Additional paid-in capital

 

113,723

 

114,387

 

Retained earnings

 

53,859

 

59,103

 

Treasury shares – 862,203 shares at March 31, 2010 and 939,240 shares at December 31, 2009

 

(10,999

)

(11,978

)

Accumulated other comprehensive (loss)

 

(2,187

)

(107

)

Total shareholders’ equity

 

154,521

 

161,530

 

Total liabilities and shareholders’ equity

 

$

240,812

 

$

242,204

 

 


 

HARDINGE INC. AND SUBSIDIARIES

 

Consolidated Statements of Operations

(In Thousands, Except Per Share Data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2010

 

2009

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

Net sales

 

$

43,170

 

$

52,114

 

Cost of sales

 

34,230

 

38,063

 

Gross profit

 

8,940

 

14,051

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

14,398

 

18,150

 

Other (income)

 

(201

)

(189

)

(Loss) from operations

 

(5,257

)

(3,910

)

 

 

 

 

 

 

Interest expense

 

110

 

1,232

 

Interest income

 

(35

)

(46

)

(Loss) before income taxes

 

(5,332

)

(5,096

)

 

 

 

 

 

 

Income tax expense

 

(146

)

280

 

Net (loss)

 

$

(5,186

)

$

(5,376

)

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) per share:

 

$

(0.45

)

$

(0.47

)

 

 

 

 

 

 

Diluted (loss) per share:

 

$

(0.45

)

$

(0.47

)

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.005

 

$

0.01

 

 


 

HARDINGE INC. AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows

(In Thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2010

 

2009

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

Net (loss)

 

$

(5,186

)

$

(5,376

)

Adjustments to reconcile net (loss) to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

1,807

 

2,209

 

Provision for deferred income taxes

 

(8

)

(282

)

(Gain) on sale of assets

 

(273

)

—

 

Debt issuance amortization

 

80

 

1,045

 

Unrealized intercompany foreign currency transaction loss (gain)

 

59

 

(386

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

9,152

 

19,716

 

Notes receivable

 

(504

)

(240

)

Inventories

 

(5,917

)

994

 

Prepaids/other assets

 

(794

)

2,077

 

Accounts payable

 

5,641

 

(3,906

)

Accrued expenses

 

(346

)

(5,998

)

Accrued postretirement benefits

 

(149

)

285

 

Net cash provided by operating activities

 

3,562

 

10,138

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Capital expenditures

 

(657

)

(906

)

Proceeds from sale of asset

 

283

 

—

 

Net cash (used in) investing activities

 

(374

)

(906

)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

Increase in short-term notes payable to bank

 

884

 

8,353

 

(Decrease) in long-term debt

 

(141

)

(24,132

)

Dividends paid

 

(58

)

(115

)

Debt issuance fees paid

 

(67

)

(628

)

Net cash provided by (used in) financing activities

 

618

 

(16,522

)

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

(131

)

(457

)

Net increase (decrease) in cash

 

3,675

 

(7,747

)

 

 

 

 

 

 

Cash at beginning of period

 

24,632

 

18,430

 

 

 

 

 

 

 

Cash at end of period

 

$

28,307

 

$

10,683