8-K

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): May 9, 2013

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

(Registrant’s 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:

oWritten communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-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 May 9, 2013, Hardinge Inc. (the “Company”) issued a press release announcing the Company’s first quarter 2013 financial results.  Copies of the press release and the presentation slides used in connection with the Company’s earnings conference call and webcast on May 9, 2013 are respectively included as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K.  On May 7, 2013, the Board of Directors of the Company declared a cash dividend of $0.02 per share on the Company’s common stock.  The dividend is payable on June 10, 2013 to stockholders of record as of May 31, 2013.

Item 9.01 Financial Statements and Exhibits

(d)           Exhibits.

99.1	Press release issued by Registrant on May 9, 2013 announcing first quarter 2013 results.
99.2	Presentation slides used by Registrant in connection with its May 9, 2013 earnings conference call and webcast.

2

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: May 15, 2013		/s/ Edward J. Gaio
		Edward J. Gaio
		Vice President and Chief Financial Officer

3

EX-99.1

Exhibit 99.1

NEWS
RELEASE

Hardinge Inc. One Hardinge Drive, Elmira, N.Y. 14902

For more information contact:
Company:	Investor Relations:
Edward J. Gaio Chief Financial Officer	Deborah K. Pawlowski, Kei Advisors LLC Phone: (716) 843-3908
Phone: (607) 378-4207	Email: dpawlowski@keiadvisors.com

Hardinge Inc. Reports First Quarter Results

ELMIRA, N.Y., May 09, 2013 — Hardinge Inc. (NASDAQ: HDNG), a leading international provider of advanced metal-cutting solutions, reported financial results for its first quarter ended March 31, 2013.  Hardinge separately announced that it has entered into a definitive agreement to acquire the Forkardt Workholding Group from Illinois Tool Works (NYSE:ITW).  The Forkardt companies are leading global providers of high-precision, specialty and customized workholding devices for machine tools. The acquisition is expected to be completed today.

Net sales (“sales”) were $67.2 million in the first quarter of 2013, down $7.5 million from sales of $74.7 million in the prior-year’s first quarter.  When compared with the trailing fourth quarter of 2012, first quarter 2013 sales were down $23.3 million, or 26%.

During the first quarter of 2013 the company had breakeven net income compared with net income of $2.4 million, or $0.21 per diluted share, in the prior-year’s first quarter.

Richard L. Simons, Chairman, President and Chief Executive Officer, commented, “The first quarter of 2013 represented a slow start to the year as we anticipated it would.  However, we are encouraged that orders have improved by 15% over the fourth quarter of 2012.  Asia appears to be experiencing an improvement in activity and we expect that by the end of the second quarter we will have a good idea of how the year will look for China and the Asia region in general.  In North America, the market has been steady.  While it was encouraging to see that our order levels out of Europe improved from what we experienced last quarter, we continue to expect weaker organic sales in 2013 as a result of the recession there.”

Sales by Region

($ in thousands)

	Quarter Ended
	March 31, 2013		March 31, 2012			December 31, 2012
Sales to Customers in	$	% of Total	$	% Change		$	% Change
North America	24,848	37%	18,621	33	%	24,030	3	%
Europe	20,996	31%	24,657	(15)	%	34,878	(40)	%
Asia	21,375	32%	31,372	(32)	%	31,652	(32)	%
Total	67,219		74,650	(10)	%	90,560	(26)	%

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Hardinge Inc. Reports First Quarter Results
May 9, 2013

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Sales in North America were up $6.2 million over the prior-year period and up $0.8 million over the trailing fourth quarter.  European sales were down by $3.7 million compared with the prior year and by $13.9 million compared with the trailing fourth quarter on lower sales across all product lines, particularly grinding machines.  The economic recession in Europe continues to have a negative impact on sales.  First quarter sales in Asia decreased by $10.0 million compared with the prior-year period on lower grinding sales due to reduced order levels from Asia during 2012.  Compared with the trailing fourth quarter, Asia sales were down $10.3 million on lower order levels in 2012 and the impact of the Chinese New Year Spring Festival in February.  The economic weakness experienced in Asia during 2012, which has shown signs of recovery in 2013, impacted sales to that region in the first quarter of 2013.

Fluctuations in Hardinge’s 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 Company’s performance during a longer period of time, such as a trailing twelve-month period.

Margins Reflect Lower Sales

Gross profit was $19.0 million, or 28.2% of sales, in the first quarter of 2013 compared with $21.2 million, or 28.4% of sales, in the same period of the prior year, and gross profit of $27.7 million, or 30.6% of sales, in the trailing fourth quarter of 2012.  Changes to first quarter 2013 gross profit when compared with the prior-year period were primarily the result of lower sales volume and product mix.

Selling, general and administrative (“SG&A”) expense in the 2013 first quarter was up by $0.6 million to $18.2 million, or 27.1% of sales, compared with $17.6 million, or 23.6% of sales, in the prior-year’s first quarter.  The increase in SG&A compared with the prior-year period was due to $0.6 million of costs related to the Forkardt acquisition and incremental SG&A related to the Usach acquisition, completed in the fourth quarter of 2012.

Income from operations in the first quarter of 2013 was $0.5 million, down 87% from $3.4 million during the prior-year’s first quarter.  As a percentage of sales, income from operations was 0.7%, a 3.8 point decrease from the same period of the prior year.  Compared with the trailing fourth quarter, income from operations declined by $6.0 million, from $6.5 million, and operating income as a percent of sales declined by 6.5 points.  The decrease in income from operations when compared with the prior-year period and trailing fourth quarter was primarily due to lower sales volume.

Solid Balance Sheet

Cash and cash equivalents at March 31, 2013 decreased by $7.5 million to $19.4 million compared with $26.9 million at December 31, 2012, and decreased by $2.8 million from $22.2 million at March 31, 2012.  Decreased cash compared with December 31, 2012 was driven by increased working capital requirements due to timing of payments in the first quarter of 2013.  Capital expenditures in 2013 are expected to be in the $4.0 to $5.0 million range for general maintenance expenditures.

Cash used in operations was $6.7 million in the first quarter of 2013, compared with $3.5 million of cash used in the prior-year period.

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Hardinge Inc. Reports First Quarter Results
May 9, 2013

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Orders by Region

($ in thousands)

	Quarter Ended
	March 31, 2013		March 31, 2012		December 31, 2012
Orders from Customers in	$	% of Total	$	% Change	$	% Change
North America	17,448	26%	20,699	(16%)	17,410	0	%
Europe	22,824	34%	29,796	(23%)	19,937	14	%
Asia	26,499	40%	30,867	(14%)	20,968	26	%
Total	66,771		81,362	(18%)	58,315	15	%

Net orders (“orders”) during the quarter were $66.8 million, a decrease of $14.6 million when compared with the first quarter of 2012.  Sequentially, orders were up $8.5 million from the trailing fourth quarter of 2012.

Compared with the prior-year period, first quarter 2013 orders declined $3.3 million in North America as U.S. based distributors continued to manage their inventories to a lower level.  In Europe, orders declined when compared with the prior-year period as the recession has negatively impacted demand, however were up by $2.9 million from the trailing fourth quarter.  Orders in Asia declined by $4.4 million in the first quarter compared with the prior year, but were up $5.5 million compared with the fourth quarter of 2012 due to improving activity levels in China.  The Company’s order backlog at March 31, 2013 was $122.9 million.

Outlook

Mr. Simons noted, “We are encouraged by our positive momentum in Asia and believe that we will be able to capture a greater share of the growth there with our recently upgraded facility in China.  Our long term growth strategy will continue to be based on both organic expansion and acquisitions, such as Usach and Forkardt, which help to broaden our product base and improve our margin profile.”

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 Company’s 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 Hardinge’s website at www.hardinge.com.

The conference call can be accessed by calling (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, May 16, 2013.  To listen to the archived call, dial (858) 384-5517 and enter conference ID number 412301.  Alternatively, the archive can be heard on the Company’s 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 Company’s 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 of North America, Hardinge serves the worldwide metal working market.  Hardinge’s 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.

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Hardinge Inc. Reports First Quarter Results
May 9, 2013

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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 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.

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Hardinge Inc. Reports First Quarter Results
May 9, 2013

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HARDINGE INC. AND SUBSIDIARIES

Consolidated statements of operations

(in thousands except per share data)

	Quarter Ended
	March 31,
	2013			2012
	(unaudited)
Net sales	$	67,219		$	74,650
Cost of sales	48,246			53,461
Gross profit	18,973			21,189
Gross profit margin	28.2%			28.4%
Selling, general and administrative expenses	18,245			17,599
Gain on sale of assets	(42		)	(2		)
Other expense	318			204
Income from operations	452			3,388
Operating margin	0.7%			4.5%
Interest expense	205			140
Interest income	(15		)	(24		)
Income before income taxes	262			3,272
Income tax expense	222			829
Net income	$	40		$	2,443
Basic earnings per share	$	-		$	0.21
Diluted earnings per share	$	-		$	0.21
Cash dividends declared per share	$	0.02		$	0.02
Weighted avg. shares outstanding: Basic	11,660			11,524
Weighted avg. shares outstanding: Diluted	11,743			11,557

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Hardinge Inc. Reports First Quarter Results
May 9, 2013

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HARDINGE INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands except share and per share data)

	March 31,			December 31,
	2013			2012
	(unaudited)
Assets
Cash and cash equivalents	$	19,407		$	26,855
Restricted cash	2,729			2,634
Accounts receivable, net	47,837			51,871
Inventories, net	125,235			128,000
Other current assets	13,413			12,580
Total current assets	208,621			221,940
Property, plant and equipment, net	68,690			71,035
Goodwill and other intangible assets, net	29,782			30,321
Other non-current assets	2,475			2,358
Total non-current assets	100,947			103,714
Total assets	$	309,568		$	325,654
Liabilities and shareholders’ equity
Accounts payable	$	23,152		$	27,779
Notes payable to bank	13,120			11,500
Accrued expenses	22,076			29,307
Customer deposits	19,009			15,720
Accrued income taxes	2,422			3,952
Deferred income taxes	2,878			2,980
Current portion of long-term debt	3,333			2,873
Total current liabilities	85,990			94,111
Long-term debt	3,883			5,616
Pension and postretirement liabilities	48,967			50,312
Deferred income taxes	3,273			3,431
Other liabilities	10,623			10,977
Total non-current liabilities	66,746			70,336
Common stock ($0.01 par value, 12,472,992 issued)	125			125
Additional paid-in capital	113,991			114,072
Retained earnings	81,766			81,961
Treasury shares	(9,192		)	(9,442		)
Accumulated other comprehensive loss	(29,858		)	(25,509		)
Total shareholders' equity	156,832			161,207
Total liabilities and shareholders’ equity	$	309,568		$	325,654

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Hardinge Inc. Reports First Quarter Results
May 9, 2013

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HARDINGE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Quarter Ended March 31,
	2013			2012
	(unaudited)
Operating activities
Net income	$	40		$	2,443
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	1,981			1,743
Debt issuance amortization	22			52
Provision for deferred income taxes	143			981
Gain on sale of assets	(42		)	(2		)
Unrealized intercompany foreign currency transaction (gain) loss	(595		)	427
Changes in operating assets and liabilities:
Accounts receivable	3,231			14,108
Inventories	(211		)	(8,447		)
Other assets	(1,467		)	(295		)
Accounts payable	(4,061		)	(5,564		)
Customer deposits	3,477			676
Accrued expenses	(9,109		)	(9,505		)
Accrued postretirement benefits	(100		)	(124		)
Net cash used in operating activities	(6,691		)	(3,507		)
Investing activities
Capital expenditures	(851		)	(2,113		)
Proceeds on sale of assets	69			-
Net cash used in investing activities	(782		)	(2,113		)
Financing activities
Net proceeds from short-term notes payable to bank	1,762			5,588
Repayments of long-term debt	(1,117		)	324
Dividends paid	(233		)	(233		)
Other financing activities	-			(49		)
Net cash provided by financing activities	412			5,630
Effect of exchange rate changes on cash	(387		)	460
Net (decrease) increase in cash	(7,448		)	470
Cash and cash equivalents at beginning of period	26,855			21,736
Cash and cash equivalents at end of period	$	19,407		$	22,206

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EX-99.2

Exhibit 99.2

First Quarter Financial Results Conference Call May 9, 2013 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 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 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 Company’s entry into new product and geographic markets, the Company’s ability to manage its operating costs, actions taken by customers such as order cancellations or reduced bookings by customers or distributors, competitor’s 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

First Quarter Sales 3 ($ in millions) $326 $214 $257 $342 $334 $75 Quarterly Net Sales Annual Net Sales $86 $83 Q1 2013 sales reflect subdued 2012 order levels Asia sales expected to recover in 2013 $90 $67

Gross Margin 4 Quarterly Sales and Gross Margin Annual Sales and Gross Margin Net Sales (in millions) Q1 2013 gross margin down compared with trailing fourth quarter of 2012 due to lower volume and product mix Sales ($ in millions) * Gross Profit and Gross Margin for 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 5 Quarterly Sales & Operating Margin Annual Sales & Operating Margin Q1 2013 operating margin impacted by acquisition costs and lower volume when compared with prior-year period Expected SG&A run rate of approximately $20 - $21 mm per quarter Sales ($ in millions) * Operating Income and Operating Margin for 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 Net Income 6 ($ in millions) * Net Income for 2009, 2010, 2012 and Q1 2013 TTM were adjusted to exclude unusual items. ** Q4 2012 Net Income of $5.1 million excludes a $2.7 million income tax benefit. 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. ** Midpoint of guidance of $4.0 million to $5.0 million provided on 5/9/2013. Cash & Cash Equivalents Capital Expenditures $166.5 $162.9 $168.5 $181.1 $177.1 ** Q1 2013 Q1 2012 Cash provided by operating activities ($6.7) ($3.5) CapEx (0.9) (2.1) Operating free cash flow ($7.6) ($5.6)

 Signed definitive agreement to acquire from Illinois Tool Works Global provider of high-precision, specialty workholding devices Reinforces leadership position as designer and manufacturer of workholding solutions Increases exposure to higher margin repair parts and accessories product line Purchase price of $34 million Revenue of approximately $47 million in 2012 35% North America, 63% Europe, 2% Asia Expected to be accretive in 2013 9 Forkardt Operations Camshaft machining using a Forkardt chuck Forkardt QLC 3-jaw chuck holding a helical gear for multiple finishing operations Strategic Acquisition: Specialty Workholding Devices

10 Geographic Diversity Creates Larger Addressable Market ($ in millions) Annual Orders $288 $372 $297 $175 $274 Quarterly Orders $80 $81 $67 $58 $69 Sequentially orders improved in all geographical markets during 1Q 2013 Asia appears to be experiencing improved economic growth North America activity holding steady

Oxford Economics Machine Tool Forecast Source: Oxford Economics Spring 2013 Global Machine Tool Outlook Report 11 Emerging Economies Drive Demand Growth Machine Tool Consumption (in US$ billions) Drivers of Machine Tool Consumption: Replacement of technologically obsolete older machines Shrinking supply of skilled machinists Growing middle class in emerging economies Advancing productivity for global competitiveness China: 70% of Asian demand by 2016 Previous world peak surpassed in 2011 Data as of Spring 2013; next update is expected in October 2013

12 Overview and Outlook Continue to have positive long-term outlook on machine tool industry 2013 outlook Backlog implies weak first half Acquisition helps offset decline in organic sales Usach sales weighted to second half Engineering and development efforts focused on maintaining competitive edge Hardinge Inc. Performance Excellence – our Six Sigma, Lean and Value Stream Mapping methodologies Foundational values drive culture: Quality, customer service, continuous process improvement, global cooperation, and employee development

First Quarter 2013 Earnings Conference Call May 9, 2013 NASDAQ: HDNG www.hardinge.com

NASDAQ: HDNG SUPPLEMENTAL INFORMATION www.hardinge.com

Annual Adjusted Gross Profit Reconciliation 15 ($ in millions) Gross Profit and Gross Margin for 2009 were 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 Hardinge’s operating performance. 2009 2010 2011 2012 Q1 2013 TTM Sales $214.1 $257.0 $341.6 $334.4 $326.0 Cost of sales 173.3 195.7 250.5 237.6 232.4 Gross profit 40.8 61.3 91.1 96.8 93.6 Inventory impairment 5.0 - - - - Adjusted gross profit 45.8 61.3 91.1 96.8 93.6 Adjusted gross margin 21.4% 23.9% 26.7% 29.0% 28.6%

Adjusted Net Income and Operating Income 16 ($ in millions, except for EPS) Net Income, Operating Income and Operating Margin in 2009, and 2010 were adjusted to exclude unusual items. Net Income in 2012 and 3/31/2013 TTM were adjusted to exclude an unusual item. 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 Hardinge’s operating performance. 2009 2010 2011 2012 3/31/2013 TTM Net (loss) income ($33.3) ($5.2) $12.0 $17.9 15.5 Inventory impairment 5.0 - - - - Restructuring 5.4 - - - - Gain on sale & acquisition - (1.7) - - - Other adjustment - 3.5 - 2.7 2.7 Net income (loss) / adjusted net income (loss) (22.9) (3.4) 12.0 15.2 12.8 Plus: Interest expense, net 1.8 0.3 0.2 0.7 0.8 Adjusted income tax expense 1.9 2.2 4.4 4.2 3.7 Adjusted operating income (loss) (19.2) (0.9) 16.6 20.1 17.2 Sales 214.1 257.0 341.6 334.4 326.0 Adjusted operating margin (9.0)% (0.4)% 4.9% 6.0% 5.3%

Quarterly Financial Appendix 17 ($ in thousands, except for per share data) 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 9/30/2012 12/31/2012 3/31/2013 Net sales $ 86,656 $ 90,389 $ 91,046 $ 74,650 $ 86,320 $ 82,883 $ 90,560 $ 67,219 Cost of sales 63,353 64,840 67,946 53,461 62,348 58,889 62,878 48,246 Gross profit 23,303 25,549 23,100 21,189 23,972 23,994 27,682 18,973 Gross profit margin 26.9% 28.3% 25.4% 28.4% 27.8% 28.9% 30.6% 28.2% Selling, general and administrative expenses 18,993 18,943 18,990 17,599 19,047 18,569 20,981 18,245 Loss (gain) on sale of assets 7 (5) 69 (2) (12) (13) 49 (42) Other (income) expense (72) 284 397 204 99 127 107 318 Income from operations 4,375 6,327 3,644 3,388 4,838 5,311 6,545 452 Operating margin 5.0% 7.0% 4.0% 4.5% 5.6% 6.4% 7.2% 0.7% Interest expense 93 97 102 140 269 246 204 205 Interest income (48) (45) - (24) (27) (44) (23) (15) Income before income taxes 4,330 6,275 3,542 3,272 4,596 5,109 6,364 262 Income tax expense 1,217 2,025 300 829 956 1,089 (1,388) 222 Net income $ 3,113 $ 4,250 $ 3,242 $ 2,443 $ 3,640 $ 4,020 $ 7,752 $ 40 Basic earnings per share $ 0.27 $ 0.37 $ 0.28 $ 0.21 $ 0.31 $ 0.35 $ 0.67 $ - Diluted earnings per share $ 0.27 $ 0.36 $ 0.28 $ 0.21 $ 0.31 $ 0.34 $ 0.66 $ - Cash dividends declared per share $ 0.005 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 Weighted avg. shares outstanding: Basic 11,467 11,467 11,467 11,524 11,562 11,567 11,574 11,660 Weighted avg. shares outstanding: Diluted 11,495 11,533 11,552 11,557 11,600 11,606 11,619 11,743 Quarter Ended