EX-99.1 2 a13-12041_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

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)

%

 

 

-MORE-

 


 

Hardinge Inc. Reports First Quarter Results
May 9, 2013

Page 2 of 7

 

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.

 

 

-MORE-

 


 

Hardinge Inc. Reports First Quarter Results
May 9, 2013

Page 3 of 7

 

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

Page 4 of 7

 

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.

 

 

-MORE-

 


 

Hardinge Inc. Reports First Quarter Results
May 9, 2013

Page 5 of 7

 

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

 

 

 

-MORE-

 


 

Hardinge Inc. Reports First Quarter Results
May 9, 2013

Page 6 of 7

 

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

 

 

 

-MORE-

 


 

Hardinge Inc. Reports First Quarter Results
May 9, 2013

Page 7 of 7

 

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

 

 

 

-END-