ELMIRA, N.Y., May 6 /PRNewswire-FirstCall/ -- Hardinge
Inc. (Nasdaq: HDNG), a leading international provider of
advanced metal-cutting solutions, today announced its first quarter
2010 financial results.
Hardinge reported net sales of $43.2
million for the first quarter of 2010, a decrease of 17%
compared to $52.1 million for the
first quarter 2009. First quarter orders of $57.5 million were up 75% compared with the prior
year quarter and up 13% on a sequential quarter basis. This
represents the fourth consecutive quarter of increased order
volume.
For the first quarter of 2010, Hardinge reported a net loss of
($5.2) million, or ($0.45) per diluted and basic share, compared to
a net loss of ($5.4) million, or
($0.47) per basic and diluted share
for the same period of 2009.
“We are encouraged by the significant increase in first quarter
orders, which reflect very strong demand and growth in Asia,” said
Richard L. Simons, Hardinge’s
President and Chief Executive Officer. “Our globally-balanced
operations and scale enable us to continue to take advantage of
increased activity as it occurs around the world.
Furthermore, our comprehensive repositioning of the Company
has provided increased cash flow generation and permanent cost
reductions, as well as balance sheet strength.”
Cash from operations was $3.6
million in the first quarter. Cash balances were
$28.3 million, and cash net of
current debt was $25.5 million.
Inventories increased by $5.9 million
to support significant Asian order activity that are expected to
ship in the second quarter.
The following tables summarize orders and sales by geographical
region for the quarter ended March 31,
2010 and 2009:
|
Quarter
Ended
|
|
|
|
Quarter
Ended
|
|
|
|
March
31,
|
|
|
|
March
31,
|
|
|
Orders
from
Customers
in:
|
2010
|
2009
|
%
Change
|
|
Sales
from
Customers
in:
|
2010
|
2009
|
%
Change
|
|
North America
|
$
12,820
|
$
12,439
|
3%
|
|
North America
|
$
11,550
|
$
16,123
|
(28)%
|
|
Europe
|
18,422
|
11,119
|
66%
|
|
Europe
|
12,418
|
24,287
|
(49)%
|
|
Asia & Other
|
26,245
|
9,249
|
184%
|
|
Asia & Other
|
19,202
|
11,704
|
64%
|
|
|
$
57,487
|
$
32,807
|
75%
|
|
|
$
43,170
|
$
52,114
|
(17)%
|
|
|
|
|
|
|
|
|
|
|
Total orders in the first quarter increased by $24.7 million, or 75%, to $57.5 million, compared to the same quarter of
2009. The increase was driven by overall strong market conditions
in the Asia and Other market.
European orders improved on a year over year basis, primarily due
to increased activity in Turkey,
Germany and Italy for specialized grinding machines.
Sales for the quarter declined $8.9
million, or 17%, compared to same quarter of 2009.
However, these sales were negatively impacted by temporary
supply chain shortages for computer controls in addition to
logistical delays in large turnkey orders that required customer
run-offs, which led to approximately $3
million in deferred sales revenue. First quarter 2009 sales
in Europe benefited from shipments
out of the backlog of orders generated prior to the collapse of
worldwide demand.
Gross profit for the first quarter was $8.9 million, a decrease of $5.1 million or 36% compared to the same quarter
in 2009. The decrease was a direct result of reduced sales,
continued market pricing pressures, and the impact of lower
production volumes against fixed manufacturing expenses. Gross
margin percentage was 20.7%, compared to 27.0% in the first quarter
of 2009.
Selling, general and administrative (SG&A) expenses for the
quarter decreased by $3.8 million to $14.4
million, or 21% compared to the same quarter last year.
2010 first quarter SG&A included charges of $0.9 million for professional services expenses
related to Industrias Romi S.A.’s unsolicited tender offer and
$0.2 million related to Jones and
Shipman acquisition costs while 2009 first quarter SG&A
included severance related charges of $1.4
million. The SG&A reductions we have realized are a
direct result of transformational changes to the Company’s business
model as well as reductions in variable expenses given the lower
sales levels. Foreign currency translation had an unfavorable
impact of approximately $0.6 million
during the first quarter compared to the same quarter of 2009.
“Building on the significant order growth from the first
quarter, we expect that order volume for the second quarter of 2010
will also show a strong increase compared to 2009. This expectation
is bolstered by a $12.3 million order
received in April from a China-based customer in the consumer
electronics industry. We continue to expect that the Asian market
demand will remain strong and drive our growth while the U.S.
market demand will remain flat for most of 2010 and European market
demand will be flat to down slightly for the year,” Mr. Simons
said.
Hardinge expects orders received during the second quarter to be
between $60 million to $65 million,
which includes the $12.3 million
order in China. Revenue is
expected to be between $57 and $60
million, a 15% increase over previous estimates, resulting
in near breakeven EBITDA (earnings before interest, taxes and
depreciation).
Dividend Declared
The Company announced that its Board of Directors has declared a
cash dividend of $0.005 per share on
the Company’s common stock. The dividend is payable on
June 10, 2010 to stockholders of
record as of June 1, 2010.
Conference Call
The Company will host a conference call at 11:00 a.m. Eastern Time today to discuss first
quarter 2010 results. The call can be accessed live at
1-877-551-8082 and 904-520-5770 for calls originating outside the
U.S. and Canada, or via the
internet at http://www.videonewswire.com/event.asp?id=68019.
A recording of the call can be accessed from the “Investor
Relations” section of the Company’s website, www.hardinge.com,
where it will be posted for one year.
A recording of the call can also be accessed approximately one
hour after its completion by dialing 1-888-284-7564 or 904-596-3174
if calling from outside the U.S. & Canada, and entering the reference number:
2468101. This telephone recording will be available through
June 30, 2010.
Hardinge is a global designer, manufacturer and distributor of
machine tools, specializing in SUPER PRECISION™ and precision CNC
Lathes, high performance Machining Centers, high-end cylindrical
and jig Grinding Machines, and technologically advanced Workholding
& Rotary Products. The Company’s products are distributed to
most of the industrialized markets around the world with
approximately 70% of the 2009 sales outside of North America. Hardinge has a very diverse
international customer base and serves a wide variety of end-user
markets. This customer base includes metalworking manufacturers
which make parts for a variety of industries, as well as a wide
range of end users in the aerospace, agricultural, transportation,
basic consumer goods, communications and electronics, construction,
defense, energy, pharmaceutical and medical equipment, and
recreation industries, among others.. The Company has manufacturing
operations in the United States,
Switzerland, Taiwan, and China. Hardinge’s common stock trades on
NASDAQ Global Select Market under the symbol, “HDNG.” For more
information, please visit http://www.hardinge.com.
This news release contains forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended). Such statements are based on management's current
expectations that involve risks and uncertainties. Any statements
that are not statements of historical fact or that are about future
events may be deemed to be forward-looking statements. For example,
words such as "may," "will," "should," "estimates," "predicts,"
"potential," "continue," "strategy," "believes," "anticipates,"
"plans," "expects," "intends," and similar expressions are intended
to identify forward-looking statements. The company's actual
results or outcomes and the timing of certain events may differ
significantly from those discussed in any forward-looking
statements. The company undertakes no obligation to publicly update
any forward-looking statement, whether as a result of new
information, future events, or otherwise
– Financial Tables Follow –
Hardinge Inc. and
Subsidiaries
|
|
Consolidated Balance
Sheets
|
March
31,
|
December
31,
|
|
(In Thousands Except Share and Per
Share Data)
|
2010
|
2009
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
Cash and cash equivalents
|
$
28,307
|
$
24,632
|
|
Accounts receivable, net
|
30,380
|
39,936
|
|
Notes receivable, net
|
2,927
|
2,364
|
|
Inventories, net
|
101,646
|
97,266
|
|
Deferred income taxes
|
576
|
732
|
|
Prepaid expenses
|
10,591
|
9,375
|
|
Total current assets
|
174,427
|
174,305
|
|
|
|
|
|
Property, plant and
equipment
|
142,491
|
144,635
|
|
Less accumulated
depreciation
|
89,362
|
89,924
|
|
Net property, plant and
equipment
|
53,129
|
54,711
|
|
|
|
|
|
Notes receivable, net
|
100
|
157
|
|
Deferred income taxes
|
451
|
446
|
|
Intangible assets
|
10,458
|
10,527
|
|
Pension assets
|
2,220
|
2,032
|
|
Other long-term assets
|
27
|
26
|
|
Total non-current assets
|
13,256
|
13,188
|
|
Total assets
|
$
240,812
|
$
242,204
|
|
|
|
|
|
Liabilities and shareholders'
equity
|
|
|
|
Accounts payable
|
$
21,997
|
$
16,285
|
|
Notes payable to bank
|
2,263
|
1,364
|
|
Accrued expenses
|
22,051
|
22,177
|
|
Accrued income taxes
|
1,360
|
1,535
|
|
Deferred income taxes
|
2,745
|
2,832
|
|
Current portion of long-term
debt
|
567
|
563
|
|
Total current liabilities
|
50,983
|
44,756
|
|
|
|
|
|
Long-term debt
|
2,977
|
3,095
|
|
Accrued pension expense
|
21,677
|
22,082
|
|
Accrued postretirement
benefits
|
2,416
|
2,472
|
|
Accrued income taxes
|
2,394
|
2,377
|
|
Deferred income taxes
|
4,048
|
4,030
|
|
Other liabilities
|
1,796
|
1,862
|
|
Total other liabilities
|
35,308
|
35,918
|
|
|
|
|
|
Common Stock - $0.01 par
value
|
125
|
125
|
|
Additional paid-in capital
|
113,723
|
114,387
|
|
Retained earnings
|
53,859
|
59,103
|
|
Treasury shares –
862,203 shares at March 31, 2010 and 939,240 shares at
December 31, 2009
|
(10,999)
|
(11,978)
|
|
Accumulated other comprehensive
(loss)
|
(2,187)
|
(107)
|
|
Total shareholders' equity
|
154,521
|
161,530
|
|
Total liabilities and shareholders'
equity
|
$
240,812
|
$
242,204
|
|
|
|
|
|
|
|
|
HARDINGE INC. AND SUBSIDIARIES
Consolidated Statements of
Operations
(In Thousands, Except Per Share
Data)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2010
|
2009
|
|
|
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
|
Net sales
|
|
$
43,170
|
$
52,114
|
|
Cost of sales
|
|
34,230
|
38,063
|
|
Gross profit
|
|
8,940
|
14,051
|
|
|
|
|
|
|
Selling, general and administrative
expenses
|
|
14,398
|
18,150
|
|
Other (income)
|
|
(201)
|
(189)
|
|
(Loss) from operations
|
|
(5,257)
|
(3,910)
|
|
|
|
|
|
|
Interest expense
|
|
110
|
1,232
|
|
Interest income
|
|
(35)
|
(46)
|
|
(Loss) before income taxes
|
|
(5,332)
|
(5,096)
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
|
(146)
|
280
|
|
Net (loss)
|
|
$
(5,186)
|
$
(5,376)
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
Basic (loss) per share:
|
|
$
(0.45)
|
$
(0.47)
|
|
|
|
|
|
|
Diluted (loss) per share:
|
|
$
(0.45)
|
$
(0.47)
|
|
|
|
|
|
|
Cash dividends declared per
share
|
|
$
0.005
|
$
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
HARDINGE INC. AND SUBSIDIARIES
Consolidated Statements of Cash
Flows
(In Thousands)
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2010
|
2009
|
|
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Operating activities
|
|
|
|
Net (loss)
|
$
(5,186)
|
$
(5,376)
|
|
Adjustments to reconcile net (loss) to
net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
1,807
|
2,209
|
|
Provision for deferred
income taxes
|
(8)
|
(282)
|
|
(Gain) on sale of
assets
|
(273)
|
-
|
|
Debt issuance
amortization
|
80
|
1,045
|
|
Unrealized intercompany
foreign currency transaction loss (gain)
|
59
|
(386)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable
|
9,152
|
19,716
|
|
Notes receivable
|
(504)
|
(240)
|
|
Inventories
|
(5,917)
|
994
|
|
Prepaids/other assets
|
(794)
|
2,077
|
|
Accounts payable
|
5,641
|
(3,906)
|
|
Accrued expenses
|
(346)
|
(5,998)
|
|
Accrued postretirement
benefits
|
(149)
|
285
|
|
Net cash provided by operating
activities
|
3,562
|
10,138
|
|
|
|
|
|
Investing activities
|
|
|
|
Capital expenditures
|
(657)
|
(906)
|
|
Proceeds from sale of asset
|
283
|
-
|
|
Net cash (used in) investing
activities
|
(374)
|
(906)
|
|
|
|
|
|
Financing activities
|
|
|
|
Increase in short-term notes payable
to bank
|
884
|
8,353
|
|
(Decrease) in long-term
debt
|
(141)
|
(24,132)
|
|
Dividends paid
|
(58)
|
(115)
|
|
Debt issuance fees paid
|
(67)
|
(628)
|
|
Net cash provided by (used in)
financing activities
|
618
|
(16,522)
|
|
|
|
|
|
Effect of exchange rate changes on
cash
|
(131)
|
(457)
|
|
Net increase (decrease) in
cash
|
3,675
|
(7,747)
|
|
|
|
|
|
Cash at beginning of period
|
24,632
|
18,430
|
|
|
|
|
|
Cash at end of period
|
$
28,307
|
$
10,683
|
|
|
|
|
|
|
Hardinge
Inc.
|
Contact:
|
|
One Hardinge Drive
|
Edward
Gaio
|
|
Elmira, N.Y. 14902
|
Vice President and CFO
|
|
|
(607)
378-4207
|
|
|
|
SOURCE Hardinge Inc.