UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 9, 2011
Hardinge Inc.
(Exact name of Registrant as specified in its charter)
New York |
|
000-15760 |
|
16-0470200 |
(State or other jurisdiction of |
|
Commission file number |
|
(I.R.S. Employer |
incorporation or organization) |
|
|
|
Identification No.) |
One Hardinge Drive Elmira, NY 14902
(Address of principal executive offices) (Zip code)
(607) 734-2281
(Registrants telephone number including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On November 9, 2011 Hardinge Inc. (Company) issued a press release announcing the Companys third quarter 2011 financial results. The press release also announced that on November 8, 2011, the Board of Directors declared a cash dividend of $0.02 per share on the Companys common stock. The dividend is payable on December 9, 2011 to stockholders of record as of November 30, 2011. A copy of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
99.1 Press release issued by registrant on November 9, 2011 announcing the third quarter 2011 results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Hardinge Inc.
Date: |
/s/ Edward J. Gaio |
November 9, 2011 |
Edward J. Gaio |
|
Vice President and Chief Financial Officer |
Exhibit 99.1
Hardinge Inc. |
|
Contact: |
One Hardinge Drive |
|
Edward Gaio |
Elmira, N.Y. 14902 |
|
Vice President and CFO |
|
|
(607) 378-4207 |
Hardinge Net Income Improves to $4.3 Million
For Third Quarter 2011
ELMIRA, N.Y. November 9, 2011 Hardinge Inc. (NASDAQ: HDNG), a leading international provider of advanced metal-cutting solutions, today announced net income of $4.3 million, or $0.36 per diluted share, on sales of $90.4 million for the quarter ended September 30, 2011.
Third Quarter 2011 Highlights:
· Net Income was $4.3 million, compared to a net loss of $1.2 million in the prior year
· Net Sales increased 26% compared to the prior year
· Sales in North America and Europe increased 75% and 83%, respectively, compared to the prior year
Our overall performance was very solid for the third quarter, characterized by positive earnings momentum, substantial sales growth, and effective expense control, said Richard L. Simons, President and Chief Executive Officer. Global manufacturing activity remains relatively strong as evidenced by the Companys significant sales growth for North America and Europe during the quarter. Hardinges global manufacturing and sales presence remains an effective platform from which to compete for machine tool orders.
The following tables summarize orders and sales by geographic region for the three and nine months ended September 30, 2011 and 2010:
|
|
Three Months Ended |
|
|
|
|
|
Three Months Ended |
|
|
| ||||||||
Orders from |
|
(in thousands) |
|
% |
|
Sales to |
|
(in thousands) |
|
% |
| ||||||||
Customers in: |
|
2011 |
|
2010 |
|
Change |
|
Customers in: |
|
2011 |
|
2010 |
|
Change |
| ||||
North America |
|
$ |
20,167 |
|
$ |
15,462 |
|
30 |
% |
North America |
|
$ |
22,480 |
|
$ |
12,877 |
|
75 |
% |
Europe |
|
29,735 |
|
22,366 |
|
33 |
% |
Europe |
|
33,293 |
|
18,230 |
|
83 |
% | ||||
Asia & Other |
|
31,572 |
|
32,735 |
|
(4 |
)% |
Asia & Other |
|
34,616 |
|
40,824 |
|
(15 |
)% | ||||
|
|
$ |
81,474 |
|
$ |
70,563 |
|
15 |
% |
|
|
$ |
90,389 |
|
$ |
71,931 |
|
26 |
% |
-MORE-
|
|
Nine Months Ended |
|
|
|
|
|
Nine Months Ended |
|
|
| ||||||||
Orders from |
|
(in thousands) |
|
% |
|
Sales to |
|
(in thousands) |
|
% |
| ||||||||
Customers in: |
|
2011 |
|
2010 |
|
Change |
|
Customers in: |
|
2011 |
|
2010 |
|
Change |
| ||||
North America |
|
$ |
72,788 |
|
$ |
48,052 |
|
51 |
% |
North America |
|
$ |
58,204 |
|
$ |
43,124 |
|
35 |
% |
Europe |
|
93,490 |
|
58,591 |
|
60 |
% |
Europe |
|
78,376 |
|
44,161 |
|
77 |
% | ||||
Asia & Other |
|
137,099 |
|
107,071 |
|
28 |
% |
Asia & Other |
|
113,947 |
|
87,714 |
|
30 |
% | ||||
|
|
$ |
303,377 |
|
$ |
213,714 |
|
42 |
% |
|
|
$ |
250,527 |
|
$ |
174,999 |
|
43 |
% |
Order activity remained solid in the third quarter, up 15% in comparison to 2010. Year-to-date, order activity remains robust in comparison to 2010 with significant increases in each region. Third quarter orders for North America were up 30% over 2010 and year-to-date orders were up more than 50% in comparison to the prior year. This activity continues to reflect manufacturing growth in the region and the growing effectiveness of the Companys new distribution partners. Orders for Europe were up 33% for third quarter, compared with last year, and year-to-date orders were up nearly 60% compared to 2010 mainly due to an improved manufacturing environment. Asia & Other orders grew by 28% through the first three quarters of 2011, but were down 4% in the third quarter compared to 2010. Third quarter 2010 included multiple orders from a China-based supplier to the consumer electronics industry.
Our third quarter orders were lower than the very strong pace the Company achieved in the first half of 2011, but were within our expectations. We believe that first and second quarter order volume was driven by customer reaction to anticipated price increases, along with the expectation of longer delivery lead times. Machine tool industry economists project continued growth in worldwide demand in 2012, and we remain confident that the Company will continue to participate in this global growth. Mr. Simons said.
The Companys gross profit for third quarter 2011 was $25.5 million, a 42.4% increase over gross profit of $17.9 million for third quarter 2010. The gross margin for the third quarter was 28.3%, up from 24.9% for the same period in 2010. The improvement in the Companys third quarter 2011 gross margin was driven by our product mix along with the continued favorable impact of volume against fixed expenses, cost management initiatives and lower competitive price discounting compared with 2010.
Selling, general and administrative expenses were $18.9 million, or 21.0% of net sales, for third quarter 2011 compared to $18.7 million, or 26.0% of net sales, for the prior year third quarter. The improvement in SG&A as a percent of net sales reflects increasing sales volume as well as the continued favorable impact of the Companys comprehensive restructuring program and the corresponding reduction in fixed expenses.
For the nine months ended September 30, 2011, Hardinge generated net income of $8.7 million, or $0.75 per share, compared with a net loss of $7.2 million, or ($0.63) per share for the same period in 2010.
Dividend Declared
The Companys Board of Directors declared a cash dividend of $0.02 per share on the Companys common stock, payable on December 9, 2011 to stockholders of record as of November 30, 2011.
EMO Hannover 2011
Hardinge exhibited at EMO Hannover, one of the worlds largest machine tool exhibitions which was held in Hannover, Germany from September 19th to the 24th. Ten new machines were showcased at EMO between the Companys milling and turning booth and its grinding products display area. With approximately 138,000 visitors touring the exhibit area this year, the Company considers EMO to be an important opportunity to showcase the quality and capability of Hardinge Group products and solutions.
-MORE-
Non-GAAP Measures
This release contains the non-GAAP measure EBITDA (Earnings Before Interest Tax Depreciation and Amortization). Refer to the accompanying schedules for a discussion of this non-GAAP measure and reconciliation to the reported GAAP measure.
Conference Call
The Company will host a conference call today at 11:00 a.m. Eastern Time to discuss the results for the quarter. The call can be accessed live at 1-866-838-2057 (904-520-5768 for calls originating outside the U.S. and Canada) or via the internet at http://www.videonewswire.com/event.asp?id=82666. A recording of the call will be available approximately one hour after its conclusion at 888-284-7564 (904-596-3174 outside the U.S. & Canada) using the reference number: 2700101. This telephone recording and related transcript will be available through December 31, 2011 on the Investor Relations section of the Companys website, www.hardinge.com.
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 Companys products are distributed to most of the industrialized markets around the world with approximately 77% of the 2010 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 Switzerland, Taiwan, the United States, China and the United Kingdom. Hardinges common stock trades on the 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 managements 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 Companys 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)
|
|
September 30, |
|
December 31, |
| ||
|
|
2011 |
|
2010 |
| ||
|
|
(Unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
21,261 |
|
$ |
30,945 |
|
Restricted cash |
|
6,510 |
|
5,225 |
| ||
Accounts receivable, net |
|
58,678 |
|
47,572 |
| ||
Inventories, net |
|
125,788 |
|
105,306 |
| ||
Deferred income taxes |
|
1,423 |
|
1,364 |
| ||
Prepaid expenses |
|
13,727 |
|
11,518 |
| ||
Total current assets |
|
227,387 |
|
201,930 |
| ||
|
|
|
|
|
| ||
Property, plant and equipment, net |
|
64,996 |
|
56,628 |
| ||
Deferred income taxes |
|
966 |
|
451 |
| ||
Intangible assets, net |
|
12,837 |
|
13,642 |
| ||
Pension assets |
|
2,406 |
|
2,111 |
| ||
Other long-term assets |
|
62 |
|
85 |
| ||
Total non-current assets |
|
81,267 |
|
72,917 |
| ||
Total assets |
|
$ |
308,654 |
|
$ |
274,847 |
|
|
|
|
|
|
| ||
Liabilities and shareholders equity |
|
|
|
|
| ||
Accounts payable |
|
$ |
38,811 |
|
$ |
33,533 |
|
Notes payable to bank |
|
12,000 |
|
1,650 |
| ||
Accrued expenses |
|
30,704 |
|
22,791 |
| ||
Customer deposits |
|
14,819 |
|
10,468 |
| ||
Accrued income taxes |
|
3,144 |
|
3,656 |
| ||
Deferred income taxes |
|
2,769 |
|
2,546 |
| ||
Current portion of long-term debt |
|
1,214 |
|
617 |
| ||
Total current liabilities |
|
103,461 |
|
75,261 |
| ||
|
|
|
|
|
| ||
Long-term debt |
|
3,225 |
|
2,777 |
| ||
Accrued pension liability |
|
26,499 |
|
29,949 |
| ||
Accrued postretirement liability |
|
2,116 |
|
2,274 |
| ||
Accrued income taxes |
|
2,746 |
|
2,106 |
| ||
Deferred income taxes |
|
2,718 |
|
2,516 |
| ||
Other liabilities |
|
2,013 |
|
2,062 |
| ||
Total non-current liabilities |
|
39,317 |
|
41,684 |
| ||
|
|
|
|
|
| ||
Common stock ($0.01 par value, 12,472,992 issued) |
|
125 |
|
125 |
| ||
Additional paid-in capital |
|
114,118 |
|
114,183 |
| ||
Retained earnings |
|
62,032 |
|
53,637 |
| ||
Treasury shares (813,980 and 865,703 shares at September 30, 2011 and December 31, 2010, respectively) |
|
(10,379 |
) |
(11,022 |
) | ||
Accumulated other comprehensive (loss) income |
|
(20 |
) |
979 |
| ||
Total shareholders equity |
|
165,876 |
|
157,902 |
| ||
Total liabilities and shareholders equity |
|
$ |
308,654 |
|
$ |
274,847 |
|
HARDINGE INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In Thousands Except Per Share Data)
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
(Unaudited) |
|
(Unaudited) |
| ||||||||
Net sales |
|
$ |
90,389 |
|
$ |
71,931 |
|
$ |
250,527 |
|
$ |
174,999 |
|
Cost of sales |
|
64,840 |
|
53,994 |
|
182,599 |
|
133,451 |
| ||||
Gross profit |
|
25,549 |
|
17,937 |
|
67,928 |
|
41,548 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Selling, general and administrative expenses |
|
18,943 |
|
18,717 |
|
54,609 |
|
49,156 |
| ||||
Gain on sale of assets |
|
(5 |
) |
(732 |
) |
(23 |
) |
(960 |
) | ||||
Impairment charge recovery |
|
|
|
(25 |
) |
|
|
(25 |
) | ||||
Other expense (income) |
|
284 |
|
16 |
|
389 |
|
(627 |
) | ||||
Income (loss) from operations |
|
6,327 |
|
(39 |
) |
12,953 |
|
(5,996 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest expense |
|
97 |
|
103 |
|
268 |
|
334 |
| ||||
Interest income |
|
(45 |
) |
(18 |
) |
(132 |
) |
(87 |
) | ||||
Income (loss) before income taxes |
|
6,275 |
|
(124 |
) |
12,817 |
|
(6,243 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax expense |
|
2,025 |
|
1,074 |
|
4,073 |
|
915 |
| ||||
Net income (loss) |
|
$ |
4,250 |
|
$ |
(1,198 |
) |
$ |
8,744 |
|
$ |
(7,158 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Per share data: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings (loss) per share |
|
$ |
0.37 |
|
$ |
(0.11 |
) |
$ |
0.75 |
|
$ |
(0.63 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings (loss) per share |
|
$ |
0.36 |
|
$ |
(0.11 |
) |
$ |
0.75 |
|
$ |
(0.63 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Cash dividends declared per share |
|
$ |
0.02 |
|
$ |
0.005 |
|
$ |
0.03 |
|
$ |
0.015 |
|
HARDINGE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands)
|
|
Nine Months Ended |
| ||||
|
|
2011 |
|
2010 |
| ||
|
|
(Unaudited) |
| ||||
Operating activities |
|
|
|
|
| ||
Net income (loss) |
|
$ |
8,744 |
|
$ |
(7,158 |
) |
Adjustment to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
|
|
| ||
Impairment charge (recovery) |
|
|
|
(25 |
) | ||
Depreciation and amortization |
|
5,885 |
|
5,364 |
| ||
Debt issuance amortization |
|
78 |
|
234 |
| ||
Provision for deferred income taxes |
|
(411 |
) |
856 |
| ||
Gain on sale of assets |
|
(23 |
) |
(960 |
) | ||
Gain on purchase of Jones & Shipman |
|
|
|
(647 |
) | ||
Unrealized intercompany foreign currency translation loss |
|
(748 |
) |
94 |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
|
(11,362 |
) |
(7,215 |
) | ||
Inventories |
|
(20,485 |
) |
(11,049 |
) | ||
Prepaids and other assets |
|
(2,700 |
) |
(4,121 |
) | ||
Accounts payable |
|
6,051 |
|
15,395 |
| ||
Customer deposits |
|
4,209 |
|
5,847 |
| ||
Accrued expenses |
|
2,190 |
|
706 |
| ||
Accrued postretirement benefits |
|
(423 |
) |
(441 |
) | ||
Net cash used in operating activities |
|
(8,995 |
) |
(3,120 |
) | ||
|
|
|
|
|
| ||
Investing activities |
|
|
|
|
| ||
Capital expenditures |
|
(13,520 |
) |
(2,154 |
) | ||
Proceeds from sale of assets |
|
908 |
|
1,469 |
| ||
Purchase of Jones & Shipman |
|
|
|
(2,949 |
) | ||
Net cash used in investing activities |
|
(12,612 |
) |
(3,634 |
) | ||
|
|
|
|
|
| ||
Financing activities |
|
|
|
|
| ||
Proceeds from short-term notes payable to bank |
|
20,447 |
|
8,666 |
| ||
Repayments of short-term notes payable to bank |
|
(9,504 |
) |
(4,799 |
) | ||
Proceeds from long-term debt |
|
1,616 |
|
|
| ||
Payments on long-term debt |
|
(464 |
) |
(423 |
) | ||
Dividends paid |
|
(349 |
) |
(174 |
) | ||
Other financing activities |
|
42 |
|
(97 |
) | ||
Net cash provided by financing activities |
|
11,788 |
|
3,173 |
| ||
|
|
|
|
|
| ||
Effect of exchange rate changes on cash |
|
135 |
|
451 |
| ||
Net decrease in cash and cash equivalents |
|
(9,684 |
) |
(3,130 |
) | ||
|
|
|
|
|
| ||
Cash and cash equivalent at beginning of period |
|
30,945 |
|
20,419 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalent at end of period |
|
$ |
21,261 |
|
$ |
17,289 |
|
Reconciliation of Net Income to EBITDA
|
|
Three months ended |
|
Nine months ended |
| ||||||||||||||
|
|
2011 |
|
2010 |
|
$ Change |
|
2011 |
|
2010 |
|
$ Change |
| ||||||
|
|
(in thousands) |
| ||||||||||||||||
GAAP net income (loss) |
|
$ |
4,250 |
|
$ |
(1,198 |
) |
$ |
5,448 |
|
$ |
8,744 |
|
$ |
(7,158 |
) |
$ |
15,902 |
|
Plus: Interest expense, net |
|
52 |
|
85 |
|
(33 |
) |
136 |
|
247 |
|
(111 |
) | ||||||
Income tax expense |
|
2,025 |
|
1,074 |
|
951 |
|
4,073 |
|
915 |
|
3,158 |
| ||||||
Depreciation and amortization |
|
1,989 |
|
1,755 |
|
234 |
|
5,885 |
|
5,364 |
|
521 |
| ||||||
EBITDA (1) |
|
$ |
8,316 |
|
$ |
1,716 |
|
$ |
6,600 |
|
$ |
18,838 |
|
$ |
(632 |
) |
$ |
19,470 |
|
(1) EBITDA, a non-GAAP financial measure, is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is used by management to internally measure our operating and management performance and by investors as a supplemental financial measure to evaluate the performance of our business that, when viewed with our GAAP results and the accompanying reconciliation, we believe provides additional information that is useful to gain an understanding of the factors and trends affecting our business.