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 8, 2012
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 8, 2012, Hardinge Inc. (the Company) issued a press release announcing the Companys third quarter 2012 financial results. Copies of the press release and the presentation slides used in connection with the Companys earnings conference call and webcast on November 8, 2012 are respectively included as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K. On November 6, 2012, the Board of Directors of the Company declared a cash dividend of $0.02 per share on the Companys common stock. The dividend is payable on December 10, 2012 to stockholders of record as of November 30, 2012.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
99.1 |
|
Press release issued by Registrant on November 8, 2012 announcing third quarter 2012 results. |
|
|
|
99.2 |
|
Presentation slides used by Registrant in connection with its November 8, 2012 earnings conference call and webcast. |
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: November 8, 2012 |
|
/s/ Edward J. Gaio |
|
|
Edward J. Gaio |
|
|
Vice President and Chief Financial Officer |
Exhibit 99.1
NEWS |
Hardinge Inc. One Hardinge Drive, Elmira, N.Y. 14902
For more information contact: |
|
|
|
Company: |
Investor Relations: |
Edward J. Gaio |
Deborah K. Pawlowski, Kei Advisors LLC |
Chief Financial Officer |
Phone: (716) 843-3908 |
Phone: (607) 378-4207 |
Email: dpawlowski@keiadvisors.com |
Hardinge Inc. Reports Earnings of $4.0 million
for the Third Quarter of 2012
ELMIRA, N.Y., November 8, 2012 Hardinge Inc. (NASDAQ: HDNG), a leading international provider of advanced metal-cutting solutions, reported financial results for its third quarter 2012.
Net sales (sales) were $82.9 million in the third quarter of 2012, down $7.5 million, or 8%, from sales of $90.4 million in the prior-years third quarter. Compared with the prior-year quarter, foreign currency translation negatively impacted third quarter 2012 sales by approximately $3.6 million. Excluding the impact of foreign currency translation, sales decreased $3.9 million, or 4%. When compared with the trailing second quarter of 2012, sales were down $3.4 million, or 4%, during the third quarter 2012.
Net income for the third quarter decreased to $4.0 million, down $0.2 million when compared with the prior years third quarter. Compared with the trailing second quarter of 2012, net income grew $0.4 million, or 10%. On a per diluted share basis, earnings were $0.34 in the third quarter of 2012 compared with $0.36 in the same period in the prior year and $0.31 in the trailing second quarter of 2012.
Richard L. Simons, Chairman, President and Chief Executive Officer, commented, We are pleased that our results for the quarter came in as we had expected with $4.0 million of net income and generation of over $5 million of cash from operations.
Sales by Region
|
|
Quarter Ended |
| |||||||||||||
Sales to |
|
September 30, |
|
September 30, |
|
June 30, |
| |||||||||
Customers in |
|
2012 |
|
% of Total |
|
2011 |
|
% Change |
|
2012 |
|
% Change |
| |||
North America |
|
$ |
20,161 |
|
24 |
% |
$ |
22,480 |
|
(10 |
)% |
$ |
20,735 |
|
(3 |
)% |
Europe |
|
27,445 |
|
33 |
% |
33,293 |
|
(18 |
)% |
34,028 |
|
(19 |
)% | |||
Asia |
|
35,277 |
|
43 |
% |
34,616 |
|
2 |
% |
31,557 |
|
12 |
% | |||
Total |
|
$ |
82,883 |
|
100 |
% |
$ |
90,389 |
|
(8 |
)% |
$ |
86,320 |
|
(4 |
)% |
The economic uncertainty and apparent recession in Europe impacted sales in that region, yet when excluding the negative foreign currency translation impact of $3.7 million, sales in Europe were down
-MORE-
$2.2 million, or 7%. In Asia, approximately $9 million of incremental multi-machine sales offset the effects of the decelerating economy in China.
Fluctuations in Hardinges sales in total and among geographic locations and industries can vary from quarter-to-quarter based on the timing and magnitude of orders and projects. Hardinge does not believe that such quarter-to-quarter fluctuations are necessarily indicative of larger business trends. Rather, the Company believes that such business trends can be discerned from the Companys performance during a longer period of time, such as a trailing twelve-month period.
Operating Performance
Gross profit was $24.0 million, or 29.0% of sales, in the 2012 third quarter compared with $25.5 million, or 28.3% of sales, in the same period of the prior year, and gross profit of $24.0 million, or 27.8% of sales, in the trailing second quarter of 2012. Changes in gross profit when compared with the prior-year period were primarily the result of the lower sales volume this year.
Selling, general and administrative (SG&A) expenses in the 2012 third quarter were down by $0.3 million to $18.6 million, or 22.4% of sales, in the 2012 third quarter compared with $18.9 million, or 21.0% of sales, in the prior years third quarter. Compared with the trailing second quarter of 2012, SG&A as a percent of sales increased by 0.3 points primarily due to costs associated with participating in the 2012 International Manufacturing Technology Show.
Income from operations in the third quarter of 2012 was $5.3 million, down 16% from $6.3 million during the prior years third quarter. As a percentage of sales, income from operations was 6.4%, a 0.6 point decrease over the same period of the prior year. Operating margin improved 0.8 points over the trailing second quarter.
Year to Date 2012 review
For the nine-month period ended September 30, 2012, net sales were $243.9 million, down by $6.7 million or 3% from the corresponding period in 2011. Foreign currency translation negatively impacted sales in the first nine months of 2012 by approximately $4.8 million when compared with the prior-year period. Gross profit for the first nine months of 2012 improved $1.3 million to $69.3 million when compared to the same period in the prior year. As a percentage of sales, gross profit margin expanded 1.30 points which was primarily due to more favorable pricing and product mix compared with the prior-year period. Selling, general and administrative expense for the first nine months was up $0.7 million, or 1%, to $55.3 million.
Income from operations was $13.5 million in the first nine months of 2012, up 5% over the prior-year period. Operating margin expanded 0.4 points to 5.6% for the first nine months of 2012. Net income was up 16% to $10.1 million for the first nine months of 2012 compared with $8.7 million for the first nine months of 2011. Earnings per diluted share grew 15% to $0.86 in the first nine months of 2012 from $0.75 for the same period last year.
Strong Balance Sheet
Cash and cash equivalents at September 30, 2012 were $21.5 million compared with $21.7 million at December 31, 2011. Capital expenditures in the third quarter of 2012 were $0.8 million and were $6.2 million in the first nine months of 2012. Capital expenditures for the 2012 fourth quarter are expected to be approximately $2.0 million which includes general maintenance expenditures and finalizing the purchase and installation of machinery in the Companys newly completed facilities in Switzerland and China. Cash provided by operations in the third quarter was $5.4 million.
Net Orders by Region
|
|
Quarter Ended |
| |||||||||||||
Orders from |
|
September 30, |
|
September 30, |
|
June 30, |
| |||||||||
Customers in |
|
2012 |
|
% of Total |
|
2011 |
|
% Change |
|
2012 |
|
% Change |
| |||
North America |
|
$ |
20,913 |
|
30 |
% |
$ |
20,167 |
|
4 |
% |
$ |
19,960 |
|
5 |
% |
Europe |
|
23,756 |
|
35 |
% |
29,735 |
|
(20 |
)% |
32,489 |
|
(27 |
)% | |||
Asia |
|
23,690 |
|
35 |
% |
31,572 |
|
(25 |
)% |
27,893 |
|
(15 |
)% | |||
Total |
|
$ |
68,359 |
|
100 |
% |
$ |
81,474 |
|
(16 |
)% |
$ |
80,342 |
|
(15 |
)% |
Net orders (orders) during the quarter were $68.4 million, a decrease of $13.1 million, or 16%, when compared with the third quarter of 2011, which includes $2.8 million related to unfavorable foreign currency translation. Excluding the foreign currency impact, orders decreased $10.3 million, or 13%. Declines were in Asia where industrial activity growth is decelerating and Europe, where the economic conditions continue to negatively impact demand. Sequentially, orders were down 15% from the trailing second quarter of 2012, which was attributable to reductions in orders received from Europe and Asia. The Companys order backlog at the end of the quarter was $127 million.
Outlook
Mr. Simons noted, We continue to focus on providing the marketplace with machine tool products to meet the increasingly complex needs of our customers. Uncertainty surrounding the global economic environment has created a low level of clarity for the near-term future of machine tool demand. We expect that 2012 will finish with fourth quarter sales similar to what we reported today. Looking forward to 2013, we are expecting lower sales levels for the first half of the year as a result of our recent order run rate. We will continue to focus on operating and cash management efficiencies throughout this period of uncertainty.
We plan to continue to invest in new product development, cost reduction initiatives, and productivity improvements and expect to be in a solid position to react quickly when the market recovery occurs, added Mr. Simons.
Webcast and Conference Call
Hardinge will host a conference call and webcast today at 11:00 a.m. Eastern Time. During the conference call and webcast, Richard L. Simons, Chairman, President and CEO, and Edward J. Gaio, Vice President and CFO, will review the financial and operating results for the quarter, as well as the Companys strategy and outlook. A question and answer session will follow the formal discussion. Their review will be accompanied by a slide presentation which will be available on Hardinges website at www.hardinge.com.
The conference call can be accessed by dialing (201) 689-8560. The listen-only audio webcast can be monitored at www.hardinge.com.
A telephonic replay will be available from 2:00 p.m. ET the day of the call through Thursday, November 15, 2012. To listen to the archived call, dial (858) 384-5517 and enter conference ID number 401276. Alternatively, the archive can be heard on the Companys website at www.hardinge.com. A transcript will also be posted to the website, once available.
About Hardinge
Hardinge is a leading global designer and manufacturer of high precision, computer-controlled machine tool solutions developed for critical, hard to machine metal parts. The Companys strategy is to leverage its global brand strength to further penetrate global market opportunities where customers
will benefit from the technologically advanced, high quality, reliable equipment Hardinge produces. With approximately 75% of its sales outside the U.S., Hardinge serves the worldwide metal working market. Hardinges machine tool solutions can also be found in a broad base of industries to include aerospace, agricultural, automotive, construction, consumer products, defense, energy, medical, technology and transportation.
Hardinge applies its engineering design and manufacturing expertise in high performance machining centers, high-end cylindrical and jig grinding machines, SUPER-PRECISION® and precision CNC lathes and technologically advanced workholding accessories. Hardinge has manufacturing operations in China, Switzerland, Taiwan, the United Kingdom and the United States.
The Company regularly posts information on its website: http://www.hardinge.com
Safe Harbor Statement
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 statements of operations
(in thousands except per share data)
|
|
Quarter Ended |
|
Year to Date Ended |
| ||||||||
|
|
September 30, |
|
September 30, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
(unaudited) |
|
(unaudited) |
| ||||||||
Net sales |
|
$ |
82,883 |
|
$ |
90,389 |
|
$ |
243,853 |
|
$ |
250,527 |
|
Cost of sales |
|
58,856 |
|
64,840 |
|
174,597 |
|
182,599 |
| ||||
Gross profit |
|
24,027 |
|
25,549 |
|
69,256 |
|
67,928 |
| ||||
Gross profit margin |
|
29.0 |
% |
28.3 |
% |
28.4 |
% |
27.1 |
% | ||||
|
|
|
|
|
|
|
|
|
| ||||
Selling, general and administrative expenses |
|
18,602 |
|
18,943 |
|
55,316 |
|
54,609 |
| ||||
Gain on sale of assets |
|
(13 |
) |
(5 |
) |
(27 |
) |
(23 |
) | ||||
Other expense |
|
127 |
|
284 |
|
430 |
|
389 |
| ||||
Income from operations |
|
5,311 |
|
6,327 |
|
13,537 |
|
12,953 |
| ||||
Operating margin |
|
6.4 |
% |
7.0 |
% |
5.6 |
% |
5.2 |
% | ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest expense |
|
246 |
|
97 |
|
655 |
|
268 |
| ||||
Interest income |
|
(44 |
) |
(45 |
) |
(95 |
) |
(132 |
) | ||||
Income before income taxes |
|
5,109 |
|
6,275 |
|
12,977 |
|
12,817 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax expense |
|
1,089 |
|
2,025 |
|
2,874 |
|
4,073 |
| ||||
Net income |
|
$ |
4,020 |
|
$ |
4,250 |
|
$ |
10,103 |
|
$ |
8,744 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share |
|
$ |
0.35 |
|
$ |
0.37 |
|
$ |
0.87 |
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share |
|
$ |
0.34 |
|
$ |
0.36 |
|
$ |
0.86 |
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
| ||||
Cash dividends declared per share |
|
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.06 |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted avg. shares outstanding: Basic |
|
11,567 |
|
11,467 |
|
11,551 |
|
11,461 |
| ||||
Weighted avg. shares outstanding: Diluted |
|
11,656 |
|
11,533 |
|
11,638 |
|
11,527 |
|
HARDINGE INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands except share and per share data)
|
|
September 30, |
|
December 31, |
| ||
|
|
2012 |
|
2011 |
| ||
|
|
(unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
21,507 |
|
$ |
21,736 |
|
Restricted cash |
|
5,088 |
|
4,575 |
| ||
Accounts receivable, net |
|
50,391 |
|
65,909 |
| ||
Inventories, net |
|
134,501 |
|
122,782 |
| ||
Other current assets |
|
15,198 |
|
13,338 |
| ||
Total current assets |
|
226,685 |
|
228,340 |
| ||
|
|
|
|
|
| ||
Property, plant and equipment, net |
|
70,168 |
|
68,204 |
| ||
Intangible assets, net |
|
12,503 |
|
12,765 |
| ||
Other non-current assets |
|
1,665 |
|
2,360 |
| ||
Total non-current assets |
|
84,336 |
|
83,329 |
| ||
Total assets |
|
$ |
311,021 |
|
$ |
311,669 |
|
|
|
|
|
|
| ||
Liabilities and shareholders equity |
|
|
|
|
| ||
Accounts payable |
|
$ |
32,203 |
|
$ |
36,952 |
|
Notes payable to bank |
|
14,150 |
|
12,969 |
| ||
Accrued expenses |
|
28,278 |
|
25,103 |
| ||
Customer deposits |
|
14,767 |
|
18,881 |
| ||
Accrued income taxes |
|
2,517 |
|
3,480 |
| ||
Deferred income taxes |
|
2,677 |
|
2,556 |
| ||
Current portion of long-term debt |
|
2,842 |
|
1,548 |
| ||
Total current liabilities |
|
97,434 |
|
101,489 |
| ||
|
|
|
|
|
| ||
Long-term debt |
|
5,674 |
|
7,020 |
| ||
Pension and postretirement liabilities |
|
41,381 |
|
49,310 |
| ||
Deferred income taxes |
|
3,071 |
|
2,391 |
| ||
Other liabilities |
|
4,102 |
|
4,436 |
| ||
Total non-current liabilities |
|
54,228 |
|
63,157 |
| ||
|
|
|
|
|
| ||
Common stock ($0.01 par value, 12,472,992 issued) |
|
125 |
|
125 |
| ||
Additional paid-in capital |
|
114,340 |
|
114,369 |
| ||
Retained earnings |
|
74,442 |
|
65,041 |
| ||
Treasury shares (782,717 shares at September 30, 2012 and 813,980 shares at December 31, 2011) |
|
(9,934 |
) |
(10,379 |
) | ||
Accumulated other comprehensive loss |
|
(19,614 |
) |
(22,133 |
) | ||
Total shareholders equity |
|
159,359 |
|
147,023 |
| ||
Total liabilities and shareholders equity |
|
$ |
311,021 |
|
$ |
311,669 |
|
HARDINGE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|
Quarter Ended |
|
YTD Ended |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
Operating activities |
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
4,020 |
|
$ |
4,250 |
|
$ |
10,103 |
|
$ |
8,744 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
1,795 |
|
1,989 |
|
5,453 |
|
5,885 |
| ||||
Debt issuance amortization |
|
10 |
|
26 |
|
42 |
|
78 |
| ||||
Provision for deferred income taxes |
|
(149 |
) |
861 |
|
852 |
|
(411 |
) | ||||
Gain on sale of assets |
|
(13 |
) |
(5 |
) |
(27 |
) |
(23 |
) | ||||
Unrealized intercompany foreign currency transaction loss (gain) |
|
223 |
|
(1,147 |
) |
513 |
|
(748 |
) | ||||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| ||||
Accounts receivable |
|
4,541 |
|
2,315 |
|
16,226 |
|
(11,362 |
) | ||||
Inventories |
|
371 |
|
(8,248 |
) |
(10,215 |
) |
(20,485 |
) | ||||
Other assets |
|
(417 |
) |
(129 |
) |
(957 |
) |
(2,700 |
) | ||||
Accounts payable |
|
(2,513 |
) |
1,694 |
|
(5,419 |
) |
6,051 |
| ||||
Customer deposits |
|
(1,808 |
) |
(1,799 |
) |
(4,207 |
) |
4,209 |
| ||||
Accrued expenses |
|
(560 |
) |
1,873 |
|
(6,292 |
) |
2,190 |
| ||||
Accrued postretirement benefits |
|
(129 |
) |
(136 |
) |
(387 |
) |
(423 |
) | ||||
Net cash provided by (used in) operating activities |
|
5,371 |
|
1,544 |
|
5,685 |
|
(8,995 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Investing activities |
|
|
|
|
|
|
|
|
| ||||
Capital expenditures |
|
(803 |
) |
(4,518 |
) |
(6,167 |
) |
(13,520 |
) | ||||
Proceeds on sale of assets |
|
18 |
|
44 |
|
40 |
|
908 |
| ||||
Net cash used in investing activities |
|
(785 |
) |
(4,474 |
) |
(6,127 |
) |
(12,612 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Financing activities |
|
|
|
|
|
|
|
|
| ||||
Proceeds from short-term notes payable to bank |
|
969 |
|
4,951 |
|
827 |
|
10,943 |
| ||||
(Repayments of) proceeds from long-term debt |
|
(150 |
) |
1,461 |
|
(140 |
) |
1,152 |
| ||||
Dividends paid |
|
(233 |
) |
(233 |
) |
(698 |
) |
(349 |
) | ||||
Other financing activities |
|
(1 |
) |
(5 |
) |
8 |
|
42 |
| ||||
Net cash provided by (used in) financing activities |
|
585 |
|
6,174 |
|
(3 |
) |
11,788 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Effect of exchange rate changes on cash |
|
187 |
|
(684 |
) |
216 |
|
135 |
| ||||
Net increase (decrease) in cash |
|
5,358 |
|
2,560 |
|
(229 |
) |
(9,684 |
) | ||||
Cash and cash equivalents at beginning of period |
|
16,149 |
|
18,701 |
|
21,736 |
|
30,945 |
| ||||
Cash and cash equivalents at end of period |
|
$ |
21,507 |
|
$ |
21,261 |
|
$ |
21,507 |
|
$ |
21,261 |
|
###
Exhibit 99.2
Third Quarter 2012 Financial Results Conference Call November 8, 2012 NASDAQ: HDNG www.hardinge.com Edward J. Gaio Vice President and Chief Financial Officer Richard L. Simons Chairman, President and Chief Executive Officer |
Safe Harbor Statement This presentation may contain 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). Any such statements are based upon 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 following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: fluctuations in the machine tool business cycles, changes in general economic conditions in the U.S. or internationally, the mix of products sold and the profit margins thereon, the relative success of the Companys entry into new product and geographic markets, the Companys ability to manage its operating costs, actions taken by customers such as order cancellations or reduced bookings by customers or distributors, competitors actions such as price discounting or new product introductions, governmental regulations and environmental matters, changes in the availability of cost of materials and supplies, the implementation of new technologies and currency fluctuations. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. 2 |
Solid Sales Expectation for 2012 3 ($ in millions) $345 $214 $257 $342 $335 $75 $90 $91 Quarterly Net Sales Annual Net Sales $86 $83 Excluding unfavorable FX impact, Europe sales down only $2.1 million, or 6% Multi-machine sales to Asia more than offset decelerating Chinese economy North America Europe Asia North America Europe Asia |
Strong Gross Margin Performance 4 Quarterly Sales and Gross Margin Annual Sales and Gross Margin Net Sales (in millions) Improved Q3 2012 gross margin Favorable pricing and product mix drove improved gross margin when compared with last years third quarter and the trailing second quarter of 2012 Sales ($ in millions) * Gross Profit and Gross Margin for 2008 and 2009 were adjusted to exclude unusual items. See supplemental slides for Adjusted Gross Profit and Gross Margin reconciliation and other important disclaimers regarding Adjusted Gross Profit and Gross Margin |
Operating Margin Trend 5 Quarterly Sales & Operating Margin Annual Sales & Operating Margin Expected SG&A run rate of ~ $18 - $19 mm per quarter Sales ($ in millions) * Operating Income and Operating Margin for 2008, 2009 and 2010 were adjusted to exclude unusual items. See supplemental slides for Adjusted Operating Income and Operating Margin reconciliation and other important disclaimers regarding Adjusted Operating Income and Operating Margin |
Quarterly Net Income Annual Net Income Strengthened Earnings Power in 2012 6 ($ in millions) * Net Income for 2008, 2009 and 2010 were adjusted to exclude unusual items. See supplemental slides for Adjusted Net Income reconciliation and other important disclaimers regarding Adjusted Net Income |
Emphasis on Productivity and Cash Managed Working Capital* as a Percent of Sales 7 Receivable Days Outstanding (Avg) Inventory Turns (Avg) * Managed Working Capital is defined as: Receivables + Inventory - Payables - Customer Deposits |
8 Financial Strength Total Capitalization ($ in millions) * Reflects expansion capital investments in China and Switzerland Cash & Cash Equivalents Capital Expenditures ** 2012 Capital expenditure guidance as of November 8, 2012 $196.2 $166.5 $162.9 $168.5 $182.1 Q3 2012 Q3 2011 Cash provided by operating activities $5.4 $1.5 Capital expenditures (0.8) (4.5) Operating free cash flow $4.6 ($3.0) Equity Debt |
9 Geographic Diversity Creates Larger Addressable Market ($ in millions) Annual Orders $299 $372 $297 $175 $341 Quarterly Orders $80 $81 $69 $81 $69 Year-over-year orders declined on slowing industrial growth in Asia and challenging economic climate in Europe Sequentially orders down, driven by softness in Asia and Europe North America Europe Asia |
10 Overview and Outlook Continue to have positive long-term outlook on machine tool industry Near-term headwinds from global economic weakness Engineering and development efforts focused on maintaining competitive edge Focus on productivity improvements and cash management Foundational values drive culture: Quality, customer service, continuous process improvement, global cooperation, and employee development |
Third Quarter 2012 Earnings Conference Call November 8, 2012 NASDAQ: HDNG www.hardinge.com |
NASDAQ: HDNG SUPPLEMENTAL INFORMATION www.hardinge.com |
Annual Adjusted Gross Profit Reconciliation 13 ($ in millions) Gross Profit for 2008 and 2009 was adjusted to exclude unusual items. Hardinge believes that when used in conjunction with GAAP measures, Adjusted Gross Profit, which is a non-GAAP measure, assists in the understanding of Hardinges operating performance. 2008 2009 2010 2011 Q3 2012 TTM Sales $345.0 $214.1 $257.0 $341.6 $334.9 Cost of sales 252.7 173.3 195.7 250.5 242.5 Gross profit 92.3 40.8 61.3 91.1 92.4 Inventory impairment 7.8 5.0 - - - Adjusted gross profit 100.1 45.8 61.3 91.1 92.4 Adjusted gross margin 29.0% 21.4% 23.9% 26.7% 27.6% |
Annual Adjusted Net Income and Operating Income 14 ($ in millions, except for EPS) Net Income and Operating Income in 2008, 2009 and 2010 was adjusted to exclude unusual items. Hardinge believes that when used in conjunction with GAAP measures, adjusted Net Income and adjusted Operating Income, which are non-GAAP measures, assist in the understanding of Hardinges operating performance. 2008 2009 2010 2011 Q3 2012 TTM Net (loss) income ($34.3) ($33.3) ($5.2) $12.0 $13.2 Inventory impairment 7.8 5.0 - - - Goodwill write-off 24.4 - - - - Restructuring 3.2 5.4 - - - Gain on sale & acquisition - - (1.7) - - Other adjustment - - 3.5 - - Net income (loss) / adjusted net income (loss) 1.1 (22.9) (3.4) 12.0 13.2 Plus: Interest expense, net 1.4 1.8 0.3 0.2 0.7 Income tax expense 3.1 1.9 2.2 4.4 3.2 Adjusted operating income (loss) 5.6 (19.2) (0.9) 16.6 17.1 |
Quarterly Financial Appendix 15 ($ in thousands, except for per share data) Quarter Ended 12/31/2010 3/31/2011 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 9/30/2012 Net sales $ 82,008 $ 73,482 $ 86,656 $ 90,389 $ 91,046 $ 74,650 $ 86,320 $ 82,883 Cost of sales 62,266 54,406 63,353 64,840 67,946 53,427 62,314 58,856 Gross profit 19,742 19,076 23,303 25,549 23,100 21,223 24,006 24,027 Gross profit margin 24.1% 26.0% 26.9% 28.3% 25.4% 28.4% 27.8% 29.0% Selling, general and administrative expenses 16,494 16,673 18,993 18,943 18,990 17,633 19,081 18,602 (Gain) loss on sale of assets (85) (25) 7 (5) 69 (2) (12) (13) Other expense (income) 67 177 (72) 284 397 204 99 127 Income from operations 3,266 2,251 4,375 6,327 3,644 3,388 4,838 5,311 Operating margin 4.0% 3.1% 5.0% 7.0% 4.0% 4.5% 5.6% 6.4% Interest expense 92 78 93 97 102 140 269 246 Interest income (3) (39) (48) (45) - (24) (27) (44) Income before income taxes 3,177 2,212 4,330 6,275 3,542 3,272 4,596 5,109 Income tax expense 1,253 831 1,217 2,025 300 829 956 1,089 Net income $ 1,924 $ 1,381 $ 3,113 $ 4,250 $ 3,242 $ 2,443 $ 3,640 $ 4,020 Diluted earnings per share $ 0.17 $ 0.12 $ 0.27 $ 0.36 $ 0.28 $ 0.21 $ 0.31 $ 0.34 Cash dividends declared per share $ 0.005 $ 0.005 $ 0.005 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 |
ANY*S"YE%NY*H`#FS"X*D"YF[NYDENYDZL'C1N59Y"WH'NZE!NX=:@'GHNZ
MKBNZH^N4<]NZK@NZ.""X=$BXM8NZ*@"[L #CUM`Z]Q_FY(9NZ4,3
M00ZD!C0M2P48@PI(3B"0$^P`60ZQR;).\#J'Q,R%+!`9@FZC0QWFIH41T<$;
M(K@G%A`Q@#H,2_`8(A4B+FT3$'),1%*8@SGT;Q1>22%!3H`"%%1'AS%8H@;5
MN$8VME$O3NH@!3^HDLU=;FD(.T,0]`@$&.I$"'K4(YL8X@DU",&00D!#NJ0C
MAS_^,0B'ZL09#BD$W]G!D'JDI$?:`(1).E*/9V##'")Q0[5X[)!\G`D?#AD$
M(5A"+:&(PR0;D19)O$&!<8R(D)HE24#VTI=".(,BW3A,8A;3F`LAE7UR]#VI
MI:E[=Z11**0IS;6$_P(4UG0>**Z)3;=H ($7.!1HWK)`Y^0B/$`#G*!31`QA+_O9S9YVM8N=[6T'^]OA+O>VTUWM=C\[
MWM<.=[+SW>U^1SO@XRYX)NB=\(?/^]T!SW;#UUWNC2_\WQ$?]\
??>U#OI`[+.8R&8`!##Y@D"RXRS56F'VZT<2SJKT.U3?_/OC#7]`6X63G
M`YD8K!0#QQG[I8ZW=$\W=5>W=5\W=F>W=F\W
M=W>W=W\W>(>W>(\W>9>W>9\W>J>W>J\W>[>W>[\W?,>W?,\W?=>W?=\W?N>W
M?N\W?_>W?_\W@`>X@`\X@1>X@1\X@B>X@B\X@S>X@S\XA$>XA$\XA5>XA5\X
MAF>XAF\XAW>XAW\XB(>XB(\XB9>XB9\XBJ>XBJ\XB[>XB[\XC,>XC)_X-MOP
MC.,.(T"!CN]X%/SR0(A"%T#_0;8^Q"5$010LZD9<`A0<.4.$0I`30D9H0A2(
M0`54`!1,G)-#`91C9Q100)5_>94KP?660`6808.800640`LK!)J7`)(K1"9`
MP004``$<@`B8^428`06H^8TS2!<``*`'.@`$``54V0$`@`E(Q!@`@``D`DF8
MP:`[^D)H@@$`@)A?Q"5,@*`#0`'@N284@*5G9P5L>J!/@$-<`@$`0!0T"!0`
M``%DPFDS1!0`P`#`\4,DPJ$/>@``N@!<>D2T^JOW^8+\>0!,``4<^P'L>A)(
MAPE00!V06\"8`H4,A"F3+9T`!,$4KM"C@[[3"H8XV"JY9
M)1:AA^>)`A!'8V5+48`0"B@`H=>L#]%*`N+*B]YRE`/8`*K-UPRH`-JGA$2E
MW;XF!/!M.+H)*3JA2X\$"@4P2$4@^II:^03@=0^@_3+ZK*=B#`A@?A=D0-.$
M)XQMWY""9O^[,<9PL#WQ6F3E+"O,;RVB8`R/PLY\%[?(PH!>!HHHX)Y/*@D"
MP;J2PLYFVGBRQ??@]TS?NB=6.8[MC!#^L95/%89NS5*,:<
M"$+K2A#XUH1/OA"(QN_[2C'PWI2$MZTI2N
MM*4OC>E,:WK3G.ZTIS\-ZE"+>M2D+K6I3XWJ5*MZU:QNM:M?#6M8+SK6M*ZU
MK6^-ZUSK>M>\[K6O?PWL8`N;U;,>MK&/C>QD*WO9S&ZVLY\-[5\7.]K4KK:U
MKXWM;&M[V]Q>]K2[#>YPBWO
P`'C>!-<3"#MHJ@G79`PS]C"4*@P#2\OWWQN]ZT"79*DRAZC,]Z
ME4-9BV[XQ(#KAT6:F;/8GVPYDH7IHH+KQ)/+A\V9A&YXBQJ*CM#YQ>#XD&*<
MA^A9BN")QH(IM1S!NCB@NGP`F6J@3#1
#!W,ZIP5:\4%+`A?)QV2J<`<@:P&(@*[^2%U"G@=`B('4`(S
MPZ5)^K9.%0(GJ5MAQH9+>Z#/:BL,U84A,'6#P'(S;)%(=\.&<`*P!B("4%)7
MY,,_O%0Z$@`]90@'MQVM`G'>E``D$$0-"ZU[?%I+0(D@LFI&UW_Y>[%%6[R$
M\`/4^R':-$)&*L:R-@4*&EIHW,N.D`0BP`!$IV4'P``DP'P.]`$(,&D)L'13
M$`)P5JD6\@$*`&?H]`,E*:`.@XB:#&<*$/^AWQ7-VT1#$C-I+2HD/.#-(*`4
M(5#-YRMF[FP"^]&0W2L"B+@$),``` K#WF^ `A((\SII3E.9K2_'Q0K?\W'31W6"`P\_$!LD
MP0Y)7C7J\W^$D-FVP^C>:IZKXW8*F%DSSC%4HS$G=UB`42U54R'8@PQ+.QTT
M0I_=@'J$D']@8P"YF1#W=PAM-WAXOG\VVC<@,P#F(P68=S]JLN@=<8))8`+T
MB0YMP7[VUGOD#'KC`'LG1SI-`S8WHB\,8*2A<7[9&'P.I"(UP^8#\>9-XW^^
M#@L?,!)Y$0U&%5NQSYBC49DUI`*,P8%GN!OFG#L+390I99B??)FN(!N
M*G8(]'0>&3-N-`5AC50DC38,:D;UY!"]A9-M\E8U-FB2[Y5B*];UB28,)4#W
MT80BT69N>L_WO6;W\N1;661F6'5AI?9L861FD27UG*SV$G;W8/_VA9-C@/_W
MYR#V:U4G&%9L6Q3_:(M`^6+T"-2F]+M198K?XW4B8OA<99]69)!?; 1]8M84)Z
M4Q#X`9B),"""`QM&R)?_G9"5&J$!EMTIB!2N`@&$:M89)$5627R4Z7;6Q3J(
M%(^^6$(()P2YB&@F*+")%,_Q)2D4B)[Z@ZF[`D%`.*Y:PI<[Z-UFZ+-3/,`#
MAHX\$,('P-SI:P]AU?K#/M2.>F>VD;+[$7IWV9DN$!^50("^#OP`+EX(\)#`
M=K\68FNOJCWJCC(/:#.ILE,\NL^DB9YTL"`]/`"$@4(6C,!/UD6;ZL/HJM?J
MH?H* $&],0*I&`5A!N@@E@!50P*'FG#,%UY7`4^Q@SRG&A(#>
M_2YX-6'``PB@#B`L`'D#:,`E"D"]6L2O=S_A01@)P`#M_,!W$<+;"5`A04;P
M3`0+V!`.5S<_Q*BP@L,PV@/IP4/D$6!#2?#9(&8W,1$*X("`":,`$C"5\(4O
M2H005`@8@(LJ%L!_")A*$A(`@F4P;TP%"$`!3'`"9$UACY/#C@N15 0F(K(*7#5Y(K,:L2'@:A"6L(>E++I:K!!59A/&&[M8#474
M6M!JM.=T`$!KFK>#&(=#;5\'&"GDN840`L3G"#\PNN+SN>VX#DO`&B&P#_7W
M`1GU%YWA0D 9+*`Y8``H]82@#8(D $O?
M4UGY8CN&0"9_*`+"`%^*=TNY5X3<,"H4(56=UQW.4$'I`1Q0T"VR(!WQYW93
M@'V-B'C<4UT'``)X"/\,)3@/2<`#).!-W)!!+.0HM)@*/[".AU!OT"!Q^R8:
M>TB.S3<7+#0(<@>'FY%8YM`#O@.&Y]$U?R)Y\=-%[H"2G6$5\+5O]L.#PN-&
MF@"+0P<0T-A=F&!OV*AC1<0-_@8%U?4`)$"+D)>.1TEK(1``"U!4%-$Y!B!C
MFU!=TG"16G@*W;AD7]1\)$!S;K%F-S<8:S1\O@<->=DL+(<]WR6'#EF-)O!=
MX'4"S=<[ZJ5>@0<+H\9/HM,*R"".EV9=M*--!0"8PD=V K&)]BQWCZVI
MKKQF1TO,`ZT(4QC#V+H$:@@`'PW@ZY$$2Z1(*>]#_C)-J=0)E`VBC%<_76I!
M_U58UW@"\APGD"P"+K;*Z$HWE5(PP7M`!<,C76A-Q4U$-$7A-&A.AP"GY$@P
M"Q$MP>D+5`+0$&\8A@CH#`./V&W;6%E:V]E]$W?-#4![V2NHBL6H`*BA3743
M8)P!!."=%D'$'WGSUS@N[P#Z)+`R]@L$\Q@G`+PP%*]$P9L8$>`!MF``7U_$
M@#HBT59>\R?NC,0+LEHBF,+@6DF+90+_@FH``K!K(M`KC',XY\'.3(1+E["`
M`8]QIF#S+CH<`(`=*UB6\CP%,?[+7A-8[,>"*AE]**S4IJUGQP*H)W7RYJ^U
M,,``V'6@18A1WHG^X%S8!:MC9XM+EIJ8IK?LQ^FPR/^B'9/$POV4#XC0M&5A
MR"I&>6J',X\ERS2+8K ,,/QNSHH#_LTF0!%(P(T(;LTE@.Y8`,<_0LR_[
MLSR;#R11M9K7.3F;#UXW"[[:.5J;M*_!M;=@.S++1CC;(%#PM$/YLC.K:$]+
M&TZK2U-+ME8+MF-[(4!+LZ]!MT8+$[:SM"Y[,R^[MWA[$$YKB$/YMWN;M7#;
M((W[$MAC"VH+N"6`.$BR34`[MD0+N(D`5>[&LW3;M)V;#TZ+LY\+&D"PLQ?B
MM!?"NC?[$VSK#+3KLT6+N'8+L[G;MK.!NQ_2NU>KM\,`!"^!NH?+MF%;M9`K
MO+][N*XKMU)KN-,;N'T[O=C3NBNKO=O+O=V+&W_IO>$KON-+ON6[,U3$`+"*
M3JH$!'>R8N8+_[_Q*[_S2[_U:[_\Z;;WJ[_[R[_R&T7X<0`%EDKXXR7]:\`'
MC,`)K,`+S,`-[,`/C$ID4[@\$O``R8@
M;ERSAN,'AD;'"$O@>LXW/B50;5^%B2(83#T`-;R#@M9V>%(@>N)@DN
8/8G!O@S1:BD$!]@3Y$/P8".[E>1
M$,G$"=BU.E9#5SO!.P2$$5%OH;:5WTCQBD<4><1.?V)P3QI))*!2$+59O-D)
M*)B9MGD8Z;ECO^6!"(MQ68(??-S3)1Z3H;&WB'E<_RX2BSX;:*9=.[0(UX^N
M.9NGM\24Y>+LU%,XBE<^3J8G<1H4'G/'6?PIX.8(P$V%7<*]-($5%Z[LU?-$
M15F,EX2HE$ERGTE%#]KE:<>R9$R>J(R?YUZ+?,3#!-E2UPE\XI,K;[UFC"9O
MO9.2UDB;6QR4XOO.:@:8F"R"!%(I@>1A,I4A:]4IFL4@>9%Z
Y<`>,8S
M/T`"G4!_=#>&NL`-10$"`2`Z;J15(G`<$X,7H@)>2]-34218JO8#5R=IKG0.
ML^4:$]<_Z#(/F*)5-;0$DN,6`%,"F8<8=G0.JE4(Z+8(H-=OA>`RY'`=H#$E
MTW3_5.DB?;XQ`"X!>=B@`,Z`>(L`9',$BDOX0@.`;"FT5.E03%!@`,EW51\E
M1]BT!`3A)`Q(/-R!"F:D72.V?7@&7KD@#B>`%0$7C$]B$C@BBG1!;2702A4"
M'8G#`RIQ$?E&'-+W39!P@6*(")*C*I)8=5KB8!2A;=&SAI+S<`\68<\%<%,`
M3;-2)H\G%7B1/2!E1LX@!2%0`MDE=D
)```&"'6E(@@3);TXP#%&N=+1M>`3CS"`"H#"D*F"D/]#>*#PC@J,+*R5X:
M68(")*`9S*DA-+[Q``H=(`$UPV>*QLH#MWBP'4/3WP=X8`)(+*&,UQ@>&MO"
M%\`>8!HA`9'43K/(!$"29"3%Y@&0)ZQ^X*@6:L7L1:$1B@&P30%8&X0#>M!$
M`"AQ(SUH!PF@T%42?'60^JO<`@!`R4N4`)UT`$2BMB7%
MK:-QU*A,+>@Q#[0B0*F1HL::0`"1KY8,+P)P`%V`)$H'4`@!Z0!F*;&%"!.=
M(`%8.Z:A0I"2D(@7J5(%55=I:ES_#PG`1':92?>PV=;8SI85FCJA(PC0@,5=
M0ACJ54`BTK;69.2D*KU8KP&2`(7)R1:[K/#K5P>PBP0@X`=[^6L)#`"`9>R%
M!$L0@>,:8%2AIN6?!FBJ37O0M@7TK14/(``/GG(_B>H1J#QP0$_9LJT3"+!;
M^#-@Q!@PH)CD"P0?W@6NFO,>/2TR$CP(T%%."N8PLV8)#(C0`4BP@&4XH*T)
MT),)
A&
ML-`X`=$C\/D--8&8;:0XR3`G4M`V
@ZOA=I9@)SG#RFSF/\5CE>4U7Z0%/B_L6=
M43BZHC[N,.JNVUJO5I45LC4-0&565`EB,@]_)>XF?)><22>"\C,.?Q*TH^?W
M`P0DX&Z`R#@<-`40).CIURG['#O9ONP!R\`]T^@&H62^$>FY7A:(0/(KP9:\
MW0IF^?_,W2!;!B`ZKAT+E?#K1>A7+C8`X-\;`(A6%@^F-J,3L1J^X]"[`V
MM?%-L'[UUNSPVSA0"!8"/=`3J6<]RP(9=L1`>;X/>:_>S?,B[382=;2KH0U`
M6(4`UF()%LTP1%5C#>T3I1PE$MT*M,)^_>KE!=Y+?_W,).!'L>`+Y"[2>V$=
M@Q#A_L!#C[#2+#%"U,,E)]%('Y&OYU@`.J;WM+#YLJ,F\QHQM1.)Q9,*#9,`
MU@)CN=(/\&`C40_Q(P$E+:-+`RF_?VW9N-)SXOV4OP'RUIL7C:PFE@X(#@=2
M4X6&2P4/A5()!5!0!XI3/`(FAB8GAIHE`TF%(@1+0`,AA@W_!U`\`SR:EPU+
MA1^AJC^0#850#`2>";=+!@Z&/R50)@,_A0T(A8@A4`@,PB2I`SV%)\=3#`E3
M0`S(DY6M4]B94TL'T:"PXTD$(H5)`R53"PI2(2"X"MP?!E"_;A4"00#($@(D
MX@TP@>B#J08,4`T,8.U`L''U%)`3P&I*#P$.$]S[=&`)`XWC("T@-$7$`""J
M.F+LE0P!2WN,%BQJ\'**`IWC1L$[9X#;P:&<9):0>8B`PW,(!OT(\!3(.R@&
M!$XAF.0$QX$][6$<2[:LV;-HTZIUE[#;PE\(,.GZ\9$5D$13'`P0<2($J7%>
M'9P@80"`(G]0"CE8=C?!B0\!!(!K_Q4B`(@3#03HY.1I"HE02QJ1,*&`0(^[
M<4TL"'`"ZU-M!GBH:C#X`(!;(0HLD1()EP&'E$(L*;$+BH(")$X\H`KI0`G,
MJUJ:,TLB0%M##%[*LS3EQP!SHP!P'T>)P0D3!Q!`^0$2",_D#@1(;CF`Q!(2
M`FB7,&!@2
!,..7I"J40JP6LK[BZ:`#L@"$(`CST&$$E97X:
M
@J5B=W830!&[FDV?W-!ETE[*T-!8[O]PA&PI!?(SKJD4V(S9KF1[Q9;&3"\
M/2SN(FQ,[_0L0J+J1%&Z<`T*P/G"8DX#^A@4ROE_G00#UB=,B3UE"*@FPLH
G*NDLM1).`7@=(T]R>D?]$N;3(3MF$+@M!Z#'.*I]@U/;$3.+((
MB``%G7.*V-`B(;NX03(\UI`4=>8@'1*?^R<22Z5IV)"H^H8L%X%7=D$X.:&-
MJ(2V9\$;F,HZ(]-30G81+B%,(HR0&$_D5\`C
M94P""=L+!(TH`(:0"YXK?=@@NAT#%R;`IL+0*)TH/G2!"%4%*];$$R7<"\.:
MPHQ`((1APNRF0#5!P878+H(#NK(@K.5W(:)P%=*Q"9SR=>2@#2?X?4G&?1-5
M56A%'Q*\"10!<+`"P3EQ2@/#4>&0'P#@$3\@G_LQ``10R?856*Z+/$FF
TFHC11-S8=>-4L+<)$(8``W.@K-11SRCXXYP;Z&,L]+
M(B($I%S%3!7PRXY.,Z)0<"<\%\"-'B2`E4`([!_]N<>)(@($(#G_`3.&`8*T
MNL4$`KUG`DA`DPL\T%Q%K$JS8[XZ;,3)X,,LO+T]Z6Y`L*<##)&X
MX5G-R`,'L"@X4YGO>[_6]7W359H?2[ZB8XWU2T!S/+\B,)[<*X2GE*"AP`/R
MD<;@QP!JO$X%1D#II1N0QQ.>53?/$(FDYAMVG$IE?,;Y(,#A]L(P])JG%WFN1^5`";8PS^87$DD8HB(PS&->_/V3*T?4(83R^,1'+\BMA^_L#
MYJK'6BD.WN"4G"#)J=1
!,]B"L+""O=!A-7@A
M2;`3^Z)^^[*"$CA^-ZA_4T@*2>"`%G&%0;&%/U@1;!A4%[@(1A%420A-Y:(*
M2T%^H+$1>D@5_&>&%GB&,L&%%Q)^29B&%T(50)"%^R&"0@AJ!,@.X"<9$_B(
M])&!%N%_B.@P%J2'[W<2)C`)E;B(5%B*8@OB"I/"!Y6`48,@L@+OOB+P!B,PA@0Y-1I(.!0O5@+"&!^Y>9BOAC_.#QP
M":LAC-18C=9XC=B8C=I(1I!``"E8`KRTC>(XCN18CAD2*SOG::08C)DG``9`
M+;\X2@3`;9AHCO9XC_B8C_KHB[&"`)(Q#_L8D`(YD&'T($-(D,7P(+5AC1,1
M9`CYD!`9D1*IC6QQD!-YD1B9D1JYD1S9D1[YD2`9DB(YDB19DB9YDBB9DBKY
MD/E#DBWY'"NIC2\I1C-ICS5IC3=YDCEI%&/$$/NXDS&)C9)&"@T0CFO%`UP7
M1I:U:I]F36#4(;I4CV'T`2FH#`O@C&+4$$]I%+:4"`RPE;]X`@FP:E>9""4D
MC`[@0DO3E5#0`&"YC;ID=@Q@D5G)`,AXA"-1_Y0QV7&VL$)1"1I)R31`P``]
M$RBF,X[`PV9DU(9!^2$+<`H'U7U`<'M-PVP@=Y=DY$0?DA.
33<6`7?LU0;-`4+$",1G4X2-NFAONX0*`;<'^`/5G5LZP1B8^
M[S#2#HH418R1U*&Y02\N6`10`,/@0S1N(&ES%U:16@2T)5AC/M7AISA<(T!.
M)`0".\&N4N>4&,-0<>@,S8"S/LSS/]+7$\:]`-GZ$Z:AA_YN
9Y#2$>BG@(R>6\!(2M!'+TJBX
M.7#,H16"&"]PVQ_W-ST9IQ1_-GX!\!,Y$4`W.S%`T+8AD0`#\#H1-IN34&$Z
M*:U"2+@3"&?&0UU`D$9^.YD#]Z/CNJL'@%>;:@(>@Q&;^!FJDO\0G<`:(I";
M)R60G>I1!'$`X%.BWYFRA=``Z6@4F.
,:YB,@O(1Q8
M=0]Q"`HF@,/1T"&2*\,>$