Hardinge Inc. Announces First Quarter 2010 Results

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:

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 –

SOURCE Hardinge Inc.