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Hardinge Inc. Reports Net Income Grows 69% On 11% Increase In Sales For Fourth Quarter 2011

Hardinge Inc. (NASDAQ: HDNG), a leading international provider of advanced metal-cutting solutions, reported financial results for its fourth quarter and fiscal year ended December 31, 2011.

Net sales (“sales”) were $91.0 million in the fourth quarter of 2011, up $9.0 million, or 11%, over sales of $82.0 million in the prior year’s fourth quarter. Foreign currency translation had approximately $2.4 million favorable effect on sales in the quarter compared with the prior year. When compared with the 2011 third quarter, sales were up $0.6 million, or 1%, for the 2011 fourth quarter. Net income for the fourth quarter was up measurably to $3.2 million, or $0.28 per diluted share, a $1.3 million increase from $1.9 million, or $0.17 per diluted share, in the prior-year period. Sequentially, net income declined from $4.3 million, or $0.36 per diluted share, primarily as a result of lower gross profits.

Richard Simons, Chairman, President and Chief Executive Officer, commented, “Significant sales growth continued into the fourth quarter in North America, illustrating both the effectiveness of our strategic actions to deepen and broaden domestic distribution channels and the strengthening of the U.S. industrial economy. Our restructuring efforts over the last several years, along with our strong cost discipline, have strengthened our sustained earnings power.”

For the year, 2011 sales grew 33%, or $84.6 million, to $341.6 million from $257.0 million in 2010, as the Company recognized strong sales throughout its markets. Foreign currency translation had approximately $20.9 million favorable effect on sales for the year. Net income in 2011 was $12.0 million, or $1.02 per diluted share, compared with a net loss of $5.2 million, or ($0.46) per diluted share, in 2010.

Diversified Markets Create Balance and Drive Growth

Sales by Region

Quarter Ended     Fiscal Year Ended
December 31, December 31,
(in thousands) (in thousands)
Sales to       2011       2010     %    

2011 %

 

Sales to     2011       2010     %    

2011 %

 

Customers in             Change       of Total   Customers in           Change       of Total
North America $ 31,796 $ 15,314 108 % 35 % North America $ 90,000 $ 58,438 54 % 26 %
Europe

 

26,449

 

 

30,289

 

(13)

%

29 % Europe

104,825

 

74,449

 

41 % 31 %
Asia & Other    

 

32,801

 

 

 

36,404

 

 

(10)

%

    36 % Asia & Other    

146,748

 

 

 

124,120

 

  18 %     43 %
Total     $ 91,046     $ 82,007     11 %         Total   $ 341,573     $ 257,007     33 %      

North American sales, which represented 35% of total sales in the fourth quarter of 2011, more than doubled when compared with the fourth quarter of 2010. Sales in Europe and Asia & Other declined in the quarter when compared with the prior year period, reflecting the slowing in the European industrial economy and leveling of activity in China. Approximately $8 million in sales to Asia & Other in the 2010 fourth quarter were related to orders from a China-based supplier to the consumer electronics industry.

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