Fluctuations in Hardinge’s sales in total and among geographic locations and industries can vary from quarter-to-quarter based on the timing and magnitude of orders and projects. Hardinge does not believe that such quarter-to-quarter fluctuations are necessarily indicative of larger business trends. Rather, the Company believes that such business trends can be discerned from the Company’s performance during a longer period of time, such as a trailing twelve-month period.
Gross profit was $24.0 million, or 29.0% of sales, in the 2012 third quarter compared with $25.5 million, or 28.3% of sales, in the same period of the prior year, and gross profit of $24.0 million, or 27.8% of sales, in the trailing second quarter of 2012. Changes in gross profit when compared with the prior-year period were primarily the result of the lower sales volume this year.
Selling, general and administrative (“SG&A”) expenses in the 2012 third quarter were down by $0.3 million to $18.6 million, or 22.4% of sales, in the 2012 third quarter compared with $18.9 million, or 21.0% of sales, in the prior year’s third quarter. Compared with the trailing second quarter of 2012, SG&A as a percent of sales increased by 0.3 points primarily due to costs associated with participating in the 2012 International Manufacturing Technology Show.Income from operations in the third quarter of 2012 was $5.3 million, down 16% from $6.3 million during the prior year’s third quarter. As a percentage of sales, income from operations was 6.4%, a 0.6 point decrease over the same period of the prior year. Operating margin improved 0.8 points over the trailing second quarter. Year to Date 2012 review For the nine-month period ended September 30, 2012, net sales were $243.9 million, down by $6.7 million or 3% from the corresponding period in 2011 . Foreign currency translation negatively impacted sales in the first nine months of 2012 by approximately $4.8 million when compared with the prior-year period. Gross profit for the first nine months of 2012 improved $1.3 million to $69.3 million when compared to the same period in the prior year. As a percentage of sales, gross profit margin expanded 1.30 points which was primarily due to more favorable pricing and product mix compared with the prior-year period. Selling, general and administrative expense for the first nine months was up $0.7 million, or 1%, to $55.3 million. Income from operations was $13.5 million in the first nine months of 2012, up 5% over the prior-year period. Operating margin expanded 0.4 points to 5.6% for the first nine months of 2012. Net income was up 16% to $10.1 million for the first nine months of 2012 compared with $8.7 million for the first nine months of 2011. Earnings per diluted share grew 15% to $0.86 in the first nine months of 2012 from $0.75 for the same period last year.