ELMIRA, N.Y., Nov. 4, 2010 /PRNewswire-FirstCall/ --
Hardinge Inc. (Nasdaq: HDNG), a leading international
provider of advanced metal-cutting solutions, today announced
results for its third quarter and nine months ended September 30, 2010.
Performance Summary:
- Third quarter orders were $70.6
million, a 51% increase compared to third quarter 2009
- Third quarter sales were $71.9
million, a 44% increase compared to third quarter 2009
Hardinge had a net loss of ($1.2)
million, or ($0.11) per basic
and diluted share, for the third quarter, down from a net loss of
($14.7) million, or ($1.29) per basic and diluted share, for the same
period of 2009. Year to date, the Company had a net loss of
($7.2) million, also down from a net
loss of ($25.0) million for the same
period in 2009. Third quarter EBITDA (earnings before interest,
taxes, depreciation, and amortization) was $1.7 million up from a loss of ($12.3) million for the same period of 2009. On a
year to date basis EBITDA was a loss of ($0.7) million compared to a loss of ($16.7) million for the same period of 2009.
"Worldwide demand for machine tools continued to improve during
the third quarter as reflected in the Company's strong double-digit
increases in orders for all major markets compared to 2009," said
Richard L. Simons, President and
Chief Executive Officer. "For a second consecutive quarter we
realized positive EBITDA, and our net loss was ($1.2) million despite the inclusion of
$1.5 million in professional services
costs related to an unsuccessful and unsolicited tender offer, as
well as a $0.6 million charge
associated with settlement of a tax audit in a foreign subsidiary.
Asia and Other order and sales
activity remains particularly robust reflecting a number of larger
orders received from leading consumer electronics and technology
companies. Order activity for North
America showed continuing signs of improvement consistent
with industry wide trends. European orders were the highest we've
experienced since the third quarter of 2008, however this activity
remains well below peak European order levels in 2008."
The following tables summarize orders and sales by geographic
region for the quarter and nine months ended September 30, 2010 and 2009:
|
|
|
Quarter
Ended
|
|
|
|
Quarter
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
Orders from Customers
in:
|
2010
|
2009
|
%
Change
|
|
Sales to Customers
in:
|
2010
|
2009
|
%
Change
|
|
North America
|
$ 15,462
|
$ 11,433
|
35%
|
|
North America
|
$ 12,877
|
$ 15,704
|
(18)%
|
|
Europe
|
22,366
|
12,891
|
74%
|
|
Europe
|
18,230
|
18,581
|
(2)%
|
|
Asia & Other
|
32,735
|
22,414
|
46%
|
|
Asia & Other
|
40,824
|
15,779
|
159%
|
|
|
$ 70,563
|
$ 46,738
|
51%
|
|
|
$ 71,931
|
$ 50,064
|
44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months
Ended
|
|
|
|
Nine
Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
Orders from Customers
in:
|
2010
|
2009
|
%
Change
|
|
Sales to Customers
in:
|
2010
|
2009
|
%
Change
|
|
North America
|
$ 48,052
|
$ 34,979
|
37%
|
|
North America
|
$ 43,124
|
$ 46,373
|
(7)%
|
|
Europe
|
58,591
|
38,238
|
53%
|
|
Europe
|
44,161
|
66,647
|
(34)%
|
|
Asia & Other
|
107,071
|
50,894
|
110%
|
|
Asia & Other
|
87,714
|
44,420
|
97%
|
|
|
$213,714
|
$124,111
|
72%
|
|
|
$ 174,999
|
$ 157,440
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 third quarter orders and sales included $4.1 million and $13.5
million from a China-based
supplier to the consumer electronics industry. Year to date, orders
and sales to this customer were $29.1
million and $20.6 million,
respectively.
Asia and Other orders increased
compared to third quarter 2009 due to several multi-machine orders
from consumer electronics, technology and automotive companies in
China, including the previously
mentioned large order from a China-based consumer electronics company.
Sales in Europe were driven by
strong activity in the automotive industry. North American order
activity increased over the prior year reflecting improved product
demand consistent with industry trends. The Company also believes
that the successful transition to its new distribution partners
continues to positively affect North
America.
The year to date increase in total orders is reflective of
improved conditions across all of the Company's major markets.
Product demand was particularly robust in the Company's
Asia and Other market reflecting
significant orders from a range of industries including consumer
electronics, technology and automotive.
The increase in third quarter sales was driven primarily by
strong demand in Asia and Other
from a variety of industries as well as the previously mentioned
large sale to a China-based
consumer electronics company.
Year to date sales increased on the strength of Asia and Other product demand. Through the
first three quarters of 2010, Asia
and Other sales were 50% of total sales, while North America and Europe were both 25% of the total.
"We continue to respond to global machine tool opportunities
wherever they appear, as evidenced by our changing geographic sales
distribution from third quarter 2009 until now," said Mr. Simons.
"Our $40.8 million in Asia and Other sales for the third quarter was
up 47% from the second quarter, which in turn was up 44% over the
first quarter and reflected the growing strength of the
manufacturing sector in the Far East. We remain solidly positioned
to compete for business in the region, along with business in
North America and Europe as global machine tool demand continues
to recover."
Gross profit for the quarter was $17.9
million compared to $3.7
million for the prior year quarter, an increase of
$14.2 million or 378%. Gross margin
for the quarter was 24.9% of net sales, up from 7.5% for the prior
year third quarter. 2009 gross profit was negatively impacted by
$6.1 million in inventory write
downs. Excluding the 2009 inventory write downs, the improvement in
gross margin was driven by the significant increase in volume,
along with the benefits of the Company's 2008 and 2009 cost
reduction initiatives.
Selling, general and administrative ("SG&A") expenses were
$18.7 million or 26.0% of net sales
for the third quarter, compared to $17.9
million, or 35.7% of net sales for the prior year quarter.
2010 SG&A included one-time expenses of $1.5 million for professional services related to
an unsolicited tender offer and $0.6
million associated with settlement of a tax audit in a
foreign subsidiary. 2009 SG&A included one-time expenses
of $2.6 million primarily related to
restructuring activities in North
America and Europe.
Excluding these items third quarter 2010 SG&A would have
been $16.6 million compared to
$15.3 million for the prior year
quarter. The increase is attributed to our Jones & Shipman
acquisition and increased commission expense on higher sales
levels.
In September 2010, the Company
recognized a gain of $0.8 million
related to the previously announced sale of excess machinery and
equipment at the Company's Elmira, New
York manufacturing facility.
Dividend Declared
The Company's Board of Directors declared a cash dividend of
$0.005 per share on the Company's
common stock, payable on December 10,
2010 to stockholders of record as of December 1, 2010.
Conference Call
The Company will host a conference call at 11:00 a.m. Eastern Time today to discuss the
results for the quarter. The call can be accessed live at
1-877-551-8082 (904-520-5770 for calls originating outside the U.S
and Canada) or via the internet at
http://www.videonewswire.com/event.asp?id=73306. A recording of the
call will be available approximately one hour after its conclusion
at 888-284-7564 (904-596-3174 outside the U.S. & Canada) using the reference number: 2551581.
This telephone recording will be available through December 31, 2010. A transcript of the call will
be available from the "Investor Relations" section of the Company's
website, www.hardinge.com, for one year.
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 Switzerland,
Taiwan, United States, China and United
Kingdom. Hardinge's common stock trades on the NASDAQ Global
Select Market under the symbol, "HDNG." For more information,
please visit http://www.hardinge.com.
This news release contains forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended). Such statements are based on 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.
Hardinge
Inc. and Subsidiaries
|
|
Consolidated Balance
Sheets
|
September
30,
|
December
31,
|
|
(In Thousands Except Share and
Per Share Data)
|
2010
|
2009
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
Cash and cash
equivalents
|
$ 22,407
|
$ 24,632
|
|
Accounts receivable,
net
|
52,116
|
39,936
|
|
Notes receivable,
net
|
1,015
|
2,364
|
|
Inventories,
net
|
114,175
|
97,266
|
|
Deferred income
taxes
|
531
|
732
|
|
Prepaid
expenses
|
12,441
|
9,375
|
|
Total current assets
|
202,685
|
174,305
|
|
Property, plant
and equipment
|
152,453
|
144,635
|
|
Less accumulated
depreciation
|
98,131
|
89,924
|
|
Net property, plant and
equipment
|
54,322
|
54,711
|
|
Notes receivable,
net
|
14
|
157
|
|
Deferred income
taxes
|
863
|
446
|
|
Intangible
assets
|
10,605
|
10,527
|
|
Pension assets
|
2,809
|
2,032
|
|
Other long-term
assets
|
43
|
26
|
|
Total non-current
assets
|
14,334
|
13,188
|
|
Total assets
|
$ 271,341
|
$ 242,204
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity
|
|
|
|
Accounts
payable
|
$ 35,124
|
$ 16,285
|
|
Notes payable to
bank
|
5,351
|
1,364
|
|
Accrued
expenses
|
22,641
|
17,777
|
|
Customer
deposits
|
10,491
|
4,400
|
|
Accrued income
taxes
|
1,273
|
1,535
|
|
Deferred income
taxes
|
3,084
|
2,832
|
|
Current portion of
long-term debt
|
577
|
563
|
|
Total current
liabilities
|
78,541
|
44,756
|
|
Long-term debt
|
2,740
|
3,095
|
|
Accrued pension
expense
|
21,315
|
22,082
|
|
Accrued postretirement
benefits
|
2,308
|
2,472
|
|
Accrued income
taxes
|
1,885
|
2,377
|
|
Deferred income
taxes
|
4,151
|
4,030
|
|
Other
liabilities
|
1,734
|
1,862
|
|
Total other
liabilities
|
34,133
|
35,918
|
|
Common Stock - $0.01
par value
|
125
|
125
|
|
Additional paid-in
capital
|
114,036
|
114,387
|
|
Retained
earnings
|
51,771
|
59,103
|
|
Treasury shares –
865,703 shares at September 30, 2010
|
|
|
|
and 939,240 shares at December 31, 2009
|
(11,022)
|
(11,978)
|
|
Accumulated other
comprehensive income (loss)
|
3,757
|
(107)
|
|
Total shareholders'
equity
|
158,667
|
161,530
|
|
Total liabilities and
shareholders' equity
|
$ 271,341
|
$ 242,204
|
|
|
|
|
|
|
HARDINGE
INC. AND SUBSIDIARIES
Consolidated
Statements of Operations
(In
Thousands Except Per Share Data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
(Unaudited)
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Net sales
|
$ 71,931
|
$ 50,064
|
|
$ 174,999
|
$ 157,440
|
|
Cost of sales
|
53,994
|
46,315
|
|
133,451
|
126,694
|
|
Gross profit
|
17,937
|
3,749
|
|
41,548
|
30,746
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
18,717
|
17,856
|
|
49,156
|
53,148
|
|
Other expense
(income)
|
(741)
|
304
|
|
(1,612)
|
752
|
|
(Loss) from
operations
|
(39)
|
(14,411)
|
|
(5,996)
|
(23,154)
|
|
|
|
|
|
|
|
|
Interest expense
|
103
|
232
|
|
334
|
1,705
|
|
Interest income
|
(18)
|
(41)
|
|
(87)
|
(95)
|
|
(Loss) before income
taxes
|
(124)
|
(14,602)
|
|
(6,243)
|
(24,764)
|
|
|
|
|
|
|
|
|
Income tax expense
|
1,074
|
90
|
|
915
|
261
|
|
Net (loss)
|
$ (1,198)
|
$ (14,692)
|
|
$
(7,158)
|
$ (25,025)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per
share:
|
$
(0.11)
|
$
(1.29)
|
|
$
(0.63)
|
$
(2.20)
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per
share:
|
$
(0.11)
|
$
(1.29)
|
|
$
(0.63)
|
$
(2.20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per
share
|
$ 0.005
|
$ 0.005
|
|
$
0.015
|
$ 0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HARDINGE
INC. AND SUBSIDIARIES
Consolidated
Statements of Cash Flows
(In
Thousands)
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2010
|
2009
|
|
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Operating
activities
|
|
|
|
Net (loss)
|
$ (7,158)
|
$ (25,025)
|
|
Adjustments to reconcile net
(loss) to net cash provided by operating activities:
|
|
|
|
Non-cash inventory
writedown
|
-
|
7,591
|
|
Impairment charge
(recovery)
|
(25)
|
-
|
|
Depreciation and
amortization
|
5,330
|
6,471
|
|
Provision for
deferred income taxes
|
856
|
(468)
|
|
(Gain) loss on sale
of assets
|
(960)
|
105
|
|
(Gain) on purchase
of Jones & Shipman
|
(647)
|
-
|
|
Debt issuance
amortization
|
234
|
1,243
|
|
Unrealized
intercompany foreign currency transaction loss (gain)
|
94
|
(215)
|
|
Changes in
operating assets and liabilities:
|
|
|
|
Accounts receivable
|
(8,728)
|
24,937
|
|
Notes receivable
|
1,513
|
229
|
|
Inventories
|
(11,049)
|
24,669
|
|
Prepaids/other assets
|
(3,182)
|
1,015
|
|
Accounts payable
|
15,395
|
(4,628)
|
|
Accrued expenses/other
liabilities
|
6,553
|
(10,316)
|
|
Accrued postretirement
benefits
|
(441)
|
(154)
|
|
Net cash (used in) provided by
operating activities
|
(2,215)
|
25,454
|
|
|
|
|
|
Investing
activities
|
|
|
|
Capital expenditures
|
(2,154)
|
(2,254)
|
|
Proceeds from sale of
assets
|
1,469
|
21
|
|
Purchase of Jones &
Shipman
|
(2,949)
|
-
|
|
Net cash (used in) investing
activities
|
(3,634)
|
(2,233)
|
|
|
|
|
|
Financing
activities
|
|
|
|
Increase in short-term notes
payable to bank
|
3,867
|
8,354
|
|
(Decrease) in long-term
debt
|
(423)
|
(24,406)
|
|
Dividends paid
|
(174)
|
(231)
|
|
Debt issuance fees
paid
|
(97)
|
(706)
|
|
Net cash provided by (used in)
financing activities
|
3,173
|
(16,989)
|
|
|
|
|
|
Effect of exchange rate changes
on cash
|
451
|
693
|
|
Net (decrease) increase in
cash
|
(2,225)
|
6,925
|
|
|
|
|
|
Cash at beginning of
period
|
24,632
|
18,430
|
|
|
|
|
|
Cash at end of period
|
$ 22,407
|
$ 25,355
|
|
|
|
|
|
|
HARDINGE
INC. AND SUBSIDIARIES
Reconciliation of Net (Loss)
Income to EBITDA
(In
Thousands)
The following table provides a
reconciliation of the Company's reported net (loss) income to
EBITDA for the three and nine months ended September 30, 2010 and
2009, respectively:
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2010
|
2009
|
$
Change
|
2010
|
2009
|
$
Change
|
|
|
|
(dollars in
thousands)
|
|
|
GAAP Net Income
(Loss)
|
$ (1,198)
|
$ (14,692)
|
$ 13,494
|
$ (7,158)
|
$ (25,025)
|
$ 17,867
|
|
Plus: Interest expense net
of
interest income
|
85
|
191
|
(106)
|
247
|
1,610
|
(1,363)
|
|
Taxes
|
1,074
|
90
|
984
|
915
|
261
|
654
|
|
Depreciation and amortization
|
1,737
|
2,076
|
(339)
|
5,330
|
6,471
|
(1,141)
|
|
EBITDA(1)
|
$ 1,698
|
$ (12,335)
|
$ 14,033
|
$ (666)
|
$ (16,683)
|
$ 16,017
|
|
(1) EBITDA, a non-GAAP financial
measure, is defined as earnings before interest, taxes,
depreciation and amortization. EBITDA is used by management to
internally measure our operating and
management performance and by investors as a supplemental financial
measure to evaluate the performance of our business that, when
viewed with our GAAP results and the accompanying reconciliation,
we believe provides additional information that is useful to gain
an understanding of the factors and trends affecting our
business.
|
|
|
|
|
|
|
|
|
Contact:
|
|
Edward Gaio
|
|
Vice President and
CFO
|
|
(607) 378-4207
|
|
|
SOURCE Hardinge Inc.