ELMIRA, N.Y., Feb. 17, 2011 /PRNewswire/ -- Hardinge
Inc. (Nasdaq: HDNG), a leading international provider of
advanced metal-cutting solutions, today announced results for its
fourth quarter ended December 31,
2010.
Performance Summary:
- Sales were $82.0 million for the
quarter, a 45% increase compared to the prior year
- Orders were $83.0 million for the
quarter, a 63% increase compared to the prior year
- Cash flow from operations was $17.1
million in the fourth quarter 2010
The Company reported net income of $1.9
million, or $0.17 per basic
and diluted share for the fourth quarter, compared with a net loss
of ($8.3) million, or ($0.73) per basic and diluted share for the same
period of 2009. EBITDA was $4.9
million for fourth quarter 2010, improved from a loss of
($4.4) million in the fourth quarter
2009.
"Significant order growth continued into the fourth quarter with
gains in all three of our major market areas illustrating our
ability to participate in the continuing rebound in global
manufacturing," said Richard L.
Simons, President and Chief Executive Officer. "European
order activity was particularly robust with the strongest level of
new bookings since the third quarter 2008, while product demand in
China remained strong. The
combination of improving sales activity and our actions to reduce
operating costs enabled the Company to achieve net income for the
quarter."
"We are encouraged by the upward trend for global machine tool
demand in 2010 and expect those trends to continue in the coming
year across all of our key markets," said Mr. Simons. "We expect
first quarter 2011 sales to be significantly stronger than the same
quarter of last year, while somewhat lower than the fourth quarter
of 2010 reflecting the impact of the Chinese
New Year on Asian manufacturing, as well as long build times
for some of the orders received."
"We are convinced that the steps we took over the past several
years to restructure our operations and reduce fixed costs will
enable us to continue to compete effectively in the global
marketplace. Based upon the growth of our order rate,
increased backlog and the more positive market outlook, we are
confident that 2011 will be a profitable year for Hardinge, a much
improved outlook from a year ago at this time," Mr. Simons
said.
The following tables summarize orders and sales by geographic
region for the quarter and year ended December 31, 2010 and 2009:
|
|
|
Quarter
Ended
|
|
|
|
Quarter
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
Orders from
Customers
in:
|
2010
|
2009
|
%
Change
|
|
Sales to
Customers
in:
|
2010
|
2009
|
%
Change
|
|
North America
|
$ 19,161
|
$ 17,568
|
9%
|
|
North America
|
$ 15,314
|
$ 17,954
|
(15)%
|
|
Europe
|
32,027
|
12,016
|
167%
|
|
Europe
|
30,289
|
20,657
|
47%
|
|
Asia & Other
|
31,800
|
21,344
|
49%
|
|
Asia & Other
|
36,405
|
18,020
|
102%
|
|
|
$ 82,988
|
$ 50,928
|
63%
|
|
|
$ 82,008
|
$ 56,631
|
45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
Orders from
Customers
in:
|
2010
|
2009
|
%
Change
|
|
Sales to
Customers
in:
|
2010
|
2009
|
%
Change
|
|
North America
|
$ 67,213
|
$ 52,547
|
28%
|
|
North America
|
$ 58,438
|
$ 64,327
|
(9)%
|
|
Europe
|
90,618
|
50,254
|
80%
|
|
Europe
|
74,449
|
87,304
|
(15)%
|
|
Asia & Other
|
138,871
|
72,238
|
92%
|
|
Asia & Other
|
124,120
|
62,440
|
99%
|
|
|
$296,702
|
$175,039
|
70%
|
|
|
$257,007
|
$214,071
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer orders in the fourth quarter of 2010 increased by
$32.1 million over the same quarter
of the prior year reflecting growing demand across all of our
geographic markets. Demand was particularly strong in Europe and Asia with significant orders from a range of
industries including consumer electronics, computer and
automotive.
Orders during the fourth quarter included $6.7 million from a supplier to the consumer
electronics industry in China.
This customer has been a significant source of new business for the
Company in 2010 with orders totaling $35.8
million.
Fourth quarter 2010 sales growth, like orders, was driven by
strong demand in Europe and
Asia from a variety of industries,
including consumer electronics, computer and automotive. Sales for
the fourth quarter 2010 and full year included $7.0 million and $27.6
million, respectively, to the supplier to the consumer
electronics industry in China.
Fourth quarter 2010 gross profit was $19.7 million, an increase of $9.7 million, or 96% compared to the prior year
fourth quarter. Gross margin for the quarter was 24.1% compared to
17.7% for the same period in 2009. The improvement in the
Company's fourth quarter 2010 gross margin was driven by the
significant increase in volume, cost management and heavier price
discounting in 2009.
Selling, general and administrative ("SG&A") expenses were
$16.5 million or 20.1% of net sales
for the fourth quarter 2010 compared to $14.9 million, or 26.2% of net sales for the
prior year quarter. The improvement in SG&A as a
percentage of net sales is the direct result of our cost control
efforts. The $1.6 million
increase in SG&A is primarily related to the Jones &
Shipman acquisition and increased variable selling expenses on the
higher sales volume.
During the fourth quarter of 2009, the Company recorded a
one-time impairment charge of $1.7
million associated with certain machinery and equipment at
its Elmira, NY facility.
The Company's balance sheet remained strong at December 31, 2010, with cash of $30.9 million, and cash net of current debt of
$28.7 million up from $18.5 million at December
31, 2009.
For the year ended December 31,
2010, the Company had a net loss of ($5.2) million, or ($0.46) per basic and diluted share, compared
with a net loss of ($33.3) million,
or ($2.93) per basic and diluted
share for 2009. EBITDA for the full year 2010 was $4.3 million, improved from a loss of
($21.1) million for 2009.
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 March 10,
2011 to stockholders of record as of March 1, 2011.
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=75947. 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: 2596911. This telephone recording will be available
through March 31, 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.
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.
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 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.
|
|
Contact:
|
|
Edward Gaio
|
|
Vice President and
CFO
|
|
(607) 378-4207
|
|
|
|
|
– Financial
Tables Follow –
HARDINGE
INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
|
|
December
31,
|
December
31,
|
|
|
2010
|
2009
|
|
|
(In
Thousands Except Share and Per Share Data)
|
|
Assets
|
|
|
Cash and cash
equivalents
|
$ 30,945
|
$ 20,419
|
|
Restricted
cash
|
5,225
|
4,213
|
|
Accounts
receivable, net
|
45,819
|
39,936
|
|
Notes receivable,
net
|
1,753
|
2,364
|
|
Inventories,
net
|
105,306
|
97,266
|
|
Deferred income
taxes
|
1,364
|
732
|
|
Prepaid
expenses
|
11,518
|
9,375
|
|
Total current assets
|
201,930
|
174,305
|
|
|
|
|
|
Property, plant
and equipment
|
156,709
|
144,635
|
|
Less accumulated
depreciation
|
100,081
|
89,924
|
|
Net property, plant and
equipment
|
56,628
|
54,711
|
|
|
|
|
|
Notes receivable,
net
|
35
|
157
|
|
Deferred income
taxes
|
451
|
446
|
|
Intangible
assets
|
13,642
|
10,527
|
|
Pension
assets
|
2,111
|
2,032
|
|
Other long-term
assets
|
50
|
26
|
|
Total non-current
assets
|
16,289
|
13,188
|
|
|
|
|
|
Total assets
|
$ 274,847
|
$ 242,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity
|
|
|
|
Accounts
payable
|
$ 33,533
|
$ 16,285
|
|
Notes payable to
bank
|
1,650
|
1,364
|
|
Accrued
expenses
|
23,934
|
17,777
|
|
Customer
deposits
|
10,468
|
4,400
|
|
Accrued income
taxes
|
3,656
|
1,535
|
|
Deferred income
taxes
|
2,546
|
2,832
|
|
Current portion of
long-term debt
|
617
|
563
|
|
Total current
liabilities
|
76,404
|
44,756
|
|
|
|
|
|
Long-term
debt
|
2,777
|
3,095
|
|
Accrued pension
liability
|
29,125
|
22,082
|
|
Accrued
postretirement benefits
|
2,274
|
2,472
|
|
Accrued income
taxes
|
2,106
|
2,377
|
|
Deferred income
taxes
|
2,516
|
4,030
|
|
Other
liabilities
|
1,743
|
1,862
|
|
Total non-current
liabilities
|
40,541
|
35,918
|
|
Common Stock
- $0.01 par value
|
|
|
|
Issued
shares -12,472,992 at December 31, 2010 and 2009
|
125
|
125
|
|
Additional paid-in
capital
|
114,183
|
114,387
|
|
Retained
earnings
|
53,637
|
59,103
|
|
Treasury shares –
865,703 shares at December 31, 2010
|
|
|
|
and 939,240 shares at December 31, 2009
|
(11,022)
|
(11,978)
|
|
Accumulated other
comprehensive income (loss)
|
979
|
(107)
|
|
Total shareholders'
equity
|
157,902
|
161,530
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$ 274,847
|
$ 242,204
|
|
|
|
|
|
|
|
|
|
|
HARDINGE
INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In
Thousands, Except Per Share Data)
|
|
|
Quarter
Ended
|
Year
Ended
|
|
|
December
31,
|
December
31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Net sales
|
$ 82,008
|
$ 56,631
|
$ 257,007
|
$ 214,071
|
|
Cost of sales
|
62,266
|
46,581
|
195,717
|
173,275
|
|
Gross profit
|
19,742
|
10,050
|
61,290
|
40,796
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
16,494
|
14,852
|
65,650
|
68,000
|
|
(Gain) loss on sale of
assets
|
(85)
|
135
|
(1,045)
|
240
|
|
Other expense
(income)
|
67
|
(91)
|
(560)
|
556
|
|
Impairment charge
|
-
|
1,650
|
(25)
|
1,650
|
|
Income (loss) from
operations
|
3,266
|
(6,496)
|
(2,730)
|
(29,650)
|
|
|
|
|
|
|
|
Interest expense
|
92
|
221
|
426
|
1,926
|
|
Interest (income)
|
(3)
|
(19)
|
(90)
|
(114)
|
|
Income (loss) before income
taxes
|
3,177
|
(6,698)
|
(3,066)
|
(31,462)
|
|
|
|
|
|
|
|
Income taxes
|
1,253
|
1,586
|
2,168
|
1,847
|
|
Net income (loss)
|
$ 1,924
|
$ (8,284)
|
$ (5,234)
|
$ (33,309)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share:
|
$
0.17
|
$
(0.73)
|
$
(0.46)
|
$
(2.93)
|
|
Weighted average number of
common shares outstanding (in thousands)
|
11,409
|
11,373
|
11,409
|
11,372
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share:
|
$
0.17
|
$
(0.73)
|
$
(0.46)
|
$
(2.93)
|
|
Weighted average number of
common shares outstanding (in thousands)
|
11,586
|
11,373
|
11,409
|
11,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per
share
|
$ 0.005
|
$ 0.005
|
$
0.02
|
$ 0.025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HARDINGE
INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Year Ended
December 31,
|
|
|
2010
|
2009
|
|
|
(In
Thousands)
|
|
Operating
activities
|
|
|
|
Net (loss) income
|
$
(5,234)
|
$ (33,309)
|
|
Adjustments to reconcile net
(loss) income to net cash provided by operating
activities:
|
|
|
|
Non-cash –
inventory write down
|
-
|
8,127
|
|
Impairment
charge
|
(25)
|
1,650
|
|
Depreciation and
amortization
|
7,042
|
8,504
|
|
Debt issuance
amortization
|
310
|
1,341
|
|
Provision for
deferred income taxes
|
(1,983)
|
347
|
|
(Gain) loss on sale
of assets
|
(1,045)
|
240
|
|
(Gain) on purchase
of Jones & Shipman
|
(647)
|
-
|
|
Unrealized
intercompany foreign currency transaction loss (gain)
|
615
|
(140)
|
|
Changes in operating assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(1,414)
|
21,009
|
|
Notes
receivable
|
805
|
(580)
|
|
Inventories
|
622
|
41,474
|
|
Prepaids/other
assets
|
(3,077)
|
(2,186)
|
|
Accounts
payable
|
12,520
|
(3,574)
|
|
Accrued
expenses
|
9,388
|
(12,744)
|
|
Accrued postretirement
benefits
|
(741)
|
(1,010)
|
|
Net cash provided by operating
activities
|
17,136
|
29,149
|
|
|
|
|
|
Investing
activities
|
|
|
|
Capital expenditures
|
(3,728)
|
(3,178)
|
|
Proceeds on sale of
assets
|
1,576
|
125
|
|
Purchase of Land Use
Rights
|
(2,594)
|
-
|
|
Purchase of Jones & Shipman,
net of cash acquired
|
(3,014)
|
-
|
|
Purchase of technical
information
|
-
|
(142)
|
|
Net cash (used in) investing
activities
|
(7,760)
|
(3,195)
|
|
|
|
|
|
Financing
activities
|
|
|
|
Borrowings under short-term
notes payable to bank
|
10,416
|
11,357
|
|
Repayments of short-term notes
payable to bank
|
(10,272)
|
(10,038)
|
|
(Decrease) in long-term
debt
|
(571)
|
(24,545)
|
|
Debt issuance fees
paid
|
(111)
|
(739)
|
|
Dividends paid
|
(232)
|
(288)
|
|
Net cash (used in) financing
activities
|
(770)
|
(24,253)
|
|
|
|
|
|
Effect of exchange rate changes
on cash
|
1,920
|
856
|
|
Net increase in cash
|
10,526
|
2,557
|
|
|
|
|
|
Cash and cash equivalents at
beginning of year
|
20,419
|
17,862
|
|
|
|
|
|
Cash and cash equivalents at end
of year
|
$ 30,945
|
$ 20,419
|
|
|
|
|
|
|
HARDINGE
INC. AND SUBSIDIARIES
Reconciliation of Net Income
(Loss) to EBITDA
|
|
|
|
The following table provides a
reconciliation of the Company's reported net income (loss) to
EBITDA for the three months and year ended December 31, 2010 and
2009, respectively:
|
|
|
Quarter
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2010
|
2009
|
$
Change
|
2010
|
2009
|
$
Change
|
|
|
|
(In
thousands)
|
|
|
GAAP Net Income
(Loss)
|
$ 1,924
|
$ (8,284)
|
$ 10,208
|
$ (5,234)
|
$ (33,309)
|
$ 28,075
|
|
Plus: Interest expense net
of
interest income
|
89
|
202
|
(113)
|
336
|
1,812
|
(1,476)
|
|
Taxes
|
1,253
|
1,586
|
(333)
|
2,168
|
1,847
|
321
|
|
Depreciation and amortization
|
1,678
|
2,051
|
(373)
|
7,042
|
8,504
|
(1,462)
|
|
EBITDA (1)
|
$ 4,944
|
$ (4,445)
|
$ 9,389
|
$ 4,312
|
$ (21,146)
|
$ 25,458
|
|
|
|
|
|
|
|
|
|
|
(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.
SOURCE Hardinge Inc.