ELMIRA, N.Y., Aug. 4, 2011 /PRNewswire/ -- Hardinge Inc.
(NASDAQ: HDNG), a leading international provider of advanced
metal-cutting solutions, today announced increased net income,
sales and orders for the Company's second quarter ended
June 30, 2011.
Second Quarter 2011 Highlights:
- Orders were $108.1 million, a 26%
increase compared to the prior year
- Sales were $86.7 million, a 45%
increase compared to the prior year
- Net income was $3.1 million, or
$0.27 per diluted share, compared
with a net loss of $0.8 million, or
($0.07) per diluted share for the
same period of 2010
- Dividend of $0.02 declared, up
from $0.005
"Second quarter order and sales activity remained robust,
consistent with the strengthening activity we're seeing across much
of the globe," said Richard L.
Simons, President and Chief Executive Officer. "The
Company's six month EBITDA of $10.5
million reflected the benefits of our comprehensive
repositioning in 2009 which provided permanent cost reductions,
along with more efficient coordination and utilization of our
worldwide resources. As expected, we are now leveraging our lower
cost structure to provide improved results as global demand for
machine tools returns."
"From all perspectives, our second quarter performance was very
strong, and we are pleased by order and sales trends, improved
margins, and focused expense management, all of which are
contributing to improved profitability. We are gratified by our
continued ability to leverage the Company's global manufacturing
and sales platform to effectively compete for new orders regardless
of the point of origin. We remain confident that we'll have a
strong performance for the remainder of 2011," said Mr. Simons.
The following tables summarize orders and sales by geographic
region for the quarters and six months ended June 30, 2011 and 2010:
|
|
|
Quarter
Ended
|
|
|
|
Quarter
Ended
|
|
|
|
June
30,
(in
thousands)
|
|
|
|
June
30,
(in
thousands)
|
|
|
Orders from
Customers
in:
|
2011
|
2010
|
%
Change
|
|
Sales to
Customers
in:
|
2011
|
2010
|
%
Change
|
|
North America
|
$ 29,403
|
$ 19,770
|
49%
|
|
North America
|
$ 18,529
|
$ 18,698
|
(1)%
|
|
Europe
|
34,338
|
17,798
|
93%
|
|
Europe
|
25,267
|
13,512
|
87%
|
|
Asia & Other
|
44,404
|
48,096
|
(8)%
|
|
Asia & Other
|
42,860
|
27,689
|
55%
|
|
|
$108,145
|
$ 85,664
|
26%
|
|
|
$86,656
|
$ 59,899
|
45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
(in
thousands)
|
|
|
|
June
30,
(in
thousands)
|
|
|
Orders from
Customers
in:
|
2011
|
2010
|
%
Change
|
|
Sales to
Customers
in:
|
2011
|
2010
|
%
Change
|
|
North America
|
$ 52,621
|
$ 32,591
|
61%
|
|
North America
|
$ 35,743
|
$ 30,247
|
18%
|
|
Europe
|
63,755
|
36,225
|
76%
|
|
Europe
|
45,082
|
25,930
|
74%
|
|
Asia & Other
|
105,527
|
74,335
|
42%
|
|
Asia & Other
|
79,313
|
46,891
|
69%
|
|
|
$221,903
|
$143,151
|
55%
|
|
|
$160,138
|
$ 103,068
|
55%
|
|
|
|
|
|
|
|
|
|
|
|
|
The strong growth in our North
America order activity reflected industry demand trends,
along with the growing effectiveness of our new distribution
partners with whom we've been working for just over a year.
European order activity for the first half of 2011 increased
by 76% over the prior year, and our second quarter orders were the
highest level since third quarter 2008. The growth rate for
Asia and Other orders for the
first half of 2011, slowed in comparison to prior periods, and
second quarter orders were down 8%, reflecting the absence of any
orders from the Chinese consumer electronics industry supplier
which has contributed significantly to our orders in prior
quarters. Absent these large orders from a single customer,
Asia and Other orders for the
second quarter and six months were up 82% and 94%, respectively.
"We remain pleased with the growing pace of demand for machine
tools, which is occurring despite the uneven appearance of the
economic recovery," Mr. Simons said. "Some of the current strength
of our product demand appears to be coming from customers who are
anticipating inflationary pressure on pricing, along with customers
looking to avoid the possibility of longer lead times for
delivery."
The Company's second quarter 2011 gross profit was $23.3 million, an increase of $8.6 million, or 58.8%, compared to the prior
year second quarter. Gross margin for the quarter was 26.9%, up
from 24.5% for the same period in 2010. The improvement in
the Company's second quarter 2011 gross margin was driven by our
product mix along with the continued favorable impact of volume
against fixed expenses, cost management initiatives and lower
competitive price discounting compared with 2010.
Selling, general and administrative expenses were $19.0 million, or 21.9% of net sales, for second
quarter 2011 compared to $16.0
million, or 26.8% of net sales, for the prior year second
quarter. The improvement in SG&A as a percent of net
sales is reflective of increasing sales volume as well as the
favorable impact of the Company's comprehensive restructuring
program and the corresponding reduction in fixed expenses.
For the six months ended June 30,
2011, Hardinge generated net income of $4.5 million, or $0.39 per share, compared with a net loss of
$6.0 million, or ($0.52) per share for 2010.
Dividend Declared
The Company's Board of Directors declared a cash dividend of
$0.02 per share on the Company's
common stock, payable on September 9,
2011 to stockholders of record as of August 31, 2011.
Non-GAAP Measures
This release contains the non-GAAP measure EBITDA (Earnings
Before Interest Tax Depreciation and Amortization). Refer to
the accompanying schedules for a discussion of this non-GAAP
measure and reconciliation to the reported GAAP measure.
Conference Call
The Company will host a conference call today at 11:00 a.m. Eastern Time to discuss the results
for the quarter. The call can be accessed live at
1-866-411-4706 (904-271-2008 for calls originating outside the U.S.
and Canada) or via the internet at
http://www.videonewswire.com/event.asp?id=80880. 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: 2670151. This telephone recording will be available
through September 30, 2011.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 77% of the 2010 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 Switzerland,
Taiwan, the United States, China and the 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.
– Financial
Tables Follow –
Hardinge Inc. and
Subsidiaries
Consolidated Balance
Sheets
(In Thousands Except Share and
Per Share Data)
|
|
|
June
30,
|
December
31,
|
|
|
2011
|
2010
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
Cash and cash
equivalents
|
$ 18,701
|
$ 30,945
|
|
Restricted
cash
|
5,515
|
5,225
|
|
Accounts
receivable, net
|
58,580
|
45,819
|
|
Notes
receivable, net
|
4,329
|
1,753
|
|
Inventories,
net
|
123,176
|
105,306
|
|
Deferred income
taxes
|
1,505
|
1,364
|
|
Prepaid
expenses
|
13,854
|
11,518
|
|
Total current assets
|
225,660
|
201,930
|
|
Property,
plant and equipment, net
|
65,319
|
56,628
|
|
Deferred income
taxes
|
750
|
451
|
|
Intangible assets,
net
|
13,417
|
13,642
|
|
Pension
assets
|
2,518
|
2,111
|
|
Other long-term
assets
|
62
|
85
|
|
Total non-current
assets
|
82,066
|
72,917
|
|
Total assets
|
$ 307,726
|
$ 274,847
|
|
Liabilities and shareholders'
equity
|
|
|
|
Accounts
payable
|
$
38,698
|
$ 33,533
|
|
Notes
payable to bank
|
7,692
|
1,650
|
|
Accrued
expenses
|
25,343
|
22,791
|
|
Customer
deposits
|
17,086
|
10,468
|
|
Accrued
income taxes
|
3,150
|
3,656
|
|
Deferred
income taxes
|
3,161
|
2,546
|
|
Current
portion of long-term debt
|
623
|
617
|
|
Total current
liabilities
|
95,753
|
75,261
|
|
Long-term
debt
|
2,490
|
2,777
|
|
Accrued pension
liability
|
28,161
|
29,949
|
|
Accrued
postretirement liability
|
2,164
|
2,274
|
|
Accrued income
taxes
|
2,228
|
2,106
|
|
Deferred income
taxes
|
2,705
|
2,516
|
|
Other
liabilities
|
2,069
|
2,062
|
|
Total non-current
liabilities
|
39,817
|
41,684
|
|
Common Stock
- $0.01 par value, 12,472,992 issued
|
125
|
125
|
|
Additional paid-in
capital
|
113,874
|
114,183
|
|
Retained
earnings
|
58,015
|
53,637
|
|
Treasury shares –
812,480 shares at June 30, 2011
|
|
|
|
and 865,703 shares at December 31, 2010
|
(10,372)
|
(11,022)
|
|
Accumulated other
comprehensive income
|
10,514
|
979
|
|
Total shareholders'
equity
|
172,156
|
157,902
|
|
Total liabilities and
shareholders' equity
|
$
307,726
|
$ 274,847
|
|
|
|
|
HARDINGE INC. AND
SUBSIDIARIES
Consolidated Statements of
Operations
(In Thousands Except Per Share
Data)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Net sales
|
$ 86,656
|
|
$ 59,899
|
|
$ 160,138
|
|
$ 103,068
|
|
Cost of sales
|
63,353
|
|
45,228
|
|
117,759
|
|
79,458
|
|
Gross profit
|
23,303
|
|
14,671
|
|
42,379
|
|
23,610
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
18,993
|
|
16,041
|
|
35,666
|
|
30,439
|
|
Loss (gain) on sale of
assets
|
7
|
|
44
|
|
(18)
|
|
(228)
|
|
Other (income)
expense
|
(72)
|
|
(713)
|
|
105
|
|
(643)
|
|
Income (loss) from
operations
|
4,375
|
|
(701)
|
|
6,626
|
|
(5,958)
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
93
|
|
121
|
|
171
|
|
231
|
|
Interest income
|
(48)
|
|
(35)
|
|
(87)
|
|
(70)
|
|
Income (loss) before income
taxes
|
4,330
|
|
(787)
|
|
6,542
|
|
(6,119)
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
1,217
|
|
(13)
|
|
2,048
|
|
(159)
|
|
Net income (loss)
|
$ 3,113
|
|
$ (774)
|
|
$ 4,494
|
|
$ (5,960)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share:
|
$
0.27
|
|
$ (0.07)
|
|
$ 0.39
|
|
$
(0.52)
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share:
|
$
0.27
|
|
$ (0.07)
|
|
$ 0.39
|
|
$
(0.52)
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per
share:
|
$ 0.005
|
|
$ 0.005
|
|
$ 0.01
|
|
$
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HARDINGE INC. AND
SUBSIDIARIES
Consolidated Statements of Cash
Flows
(In Thousands)
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
2011
|
|
2010
|
|
|
(Unaudited)
|
|
Operating
activities
|
|
|
|
|
Net income (loss)
|
$
4,494
|
|
$
(5,960)
|
|
Adjustments to reconcile net
income (loss) to net cash (used in) provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
3,896
|
|
3,609
|
|
Debt issuance
amortization
|
52
|
|
165
|
|
Provision for
deferred income taxes
|
(1,272)
|
|
515
|
|
(Gain) on sale of
assets
|
(18)
|
|
(228)
|
|
Gain on purchase of
Jones & Shipman
|
-
|
|
(626)
|
|
Unrealized
intercompany foreign currency transaction loss
|
399
|
|
9
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
(11,210)
|
|
3,088
|
|
Notes receivable
|
(2,467)
|
|
(497)
|
|
Inventories
|
(12,237)
|
|
(11,469)
|
|
Prepaids and other assets
|
(2,571)
|
|
(2,503)
|
|
Accounts payable
|
4,357
|
|
13,900
|
|
Customer deposits
|
6,008
|
|
3,842
|
|
Accrued expenses
|
317
|
|
(1,384)
|
|
Accrued postretirement benefits
|
(287)
|
|
(296)
|
|
Net cash (used in) provided by
operating activities
|
(10,539)
|
|
2,165
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Capital expenditures
|
(9,002)
|
|
(1,077)
|
|
Proceeds from sale of
assets
|
864
|
|
282
|
|
Purchase of Jones &
Shipman
|
-
|
|
(2,903)
|
|
Net cash (used in) investing
activities
|
(8,138)
|
|
(3,698)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Proceeds from short-term notes
payable to bank
|
5,992
|
|
2,113
|
|
Decrease in long-term
debt
|
(309)
|
|
(282)
|
|
Proceeds from (repurchase of)
equity, net
|
72
|
|
-
|
|
Debt issuance fees
paid
|
(25)
|
|
(100)
|
|
Dividends paid
|
(116)
|
|
(116)
|
|
Net cash provided by financing
activities
|
5,614
|
|
1,615
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash
|
819
|
|
(466)
|
|
Net (decrease) increase in
cash
|
(12,244)
|
|
(384)
|
|
|
|
|
|
|
Cash at beginning of
period
|
30,945
|
|
20,419
|
|
|
|
|
|
|
Cash at end of period
|
$
18,701
|
|
$
20,035
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to
EBITDA
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
June
30,
|
|
|
June
30,
|
|
|
2011
|
2010
|
$
Change
|
|
|
2011
|
2010
|
$
Change
|
|
|
(in
thousands)
|
|
GAAP net income
(loss)
|
$ 3,113
|
$ (774)
|
$ 3,887
|
|
|
$ 4,494
|
$ (5,960)
|
$ 10,454
|
|
Plus: Interest expense, net
|
45
|
86
|
(41)
|
|
|
84
|
161
|
(77)
|
|
Income tax expense (benefit)
|
1,217
|
(13)
|
1,230
|
|
|
2,048
|
(159)
|
2,207
|
|
Depreciation and amortization
|
1,980
|
1,804
|
176
|
|
|
3,896
|
3,609
|
287
|
|
EBITDA (1)
|
$ 6,355
|
$ 1,103
|
$ 5,252
|
|
|
$ 10,522
|
$ (2,349)
|
$ 12,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 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.