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Hardinge Inc. Reports Earnings Per Share Of $0.66 For The Fourth Quarter Of 2012

Stocks in this article: HDNG

Hardinge Inc. (NASDAQ: HDNG), a leading international provider of advanced metal-cutting solutions, reported financial results for its fourth quarter and full year ended December 31, 2012.

Net sales (“sales”) were $90.6 million in the fourth quarter of 2012, down $0.4 million from sales of $91.0 million in the prior-year’s fourth quarter. The effect of foreign currency exchange was not significant. When compared with the trailing third quarter of 2012, sales were up $7.7 million, or 9%, during the fourth quarter 2012. Foreign currency translation had a $1.4 million positive impact on sales relative to the trailing quarter.

Net income for the fourth quarter was $7.8 million, or $0.66 per diluted share, compared with $3.2 million, or $0.28 per diluted share, in the prior-year’s fourth quarter. Net income in the 2012 fourth quarter benefited from a $2.7 million reduction in tax valuation allowances which resulted from deferred tax liabilities recorded in conjunction with the acquisition of Usach Technologies in December 2012. Excluding the tax benefit, net income would have been $5.1 million*, or $0.43 per diluted share*.

For the full year, sales declined in 2012 to $334.4 million, down by $7.2 million, or 2%, from sales of $341.6 million in 2011. Foreign currency translation had a negative $4.8 million effect on sales for the year. Excluding this unfavorable impact, 2012 sales were down $2.4 million, or relatively unchanged, compared with the prior year. Net income for the year was $17.9 million, or $1.53 per diluted share, compared with $12.0 million, or $1.02 per diluted share, in 2011. Excluding the tax benefit from the previously mentioned reversal in tax valuation allowances, net income in 2012 was $15.2 million*, or $1.29 per diluted share*.

* These are non-GAAP financial measures. Please see the attached table for a reconciliation of GAAP and non-GAAP financial measures.

Richard L. Simons, Chairman, President and Chief Executive Officer, commented, “Our strong fourth quarter financial performance reflected favorable product mix, primarily driven by grinding machine orders received in late 2011 and early 2012 that were shipped in the quarter. For the full year, we had strong cash generation from operations which effectively funded the acquisition of Usach Technologies in late December. This was the result of our continued focus on driving operational efficiencies and carefully managing working capital.”


Sales by Region


      Quarter Ended
        December 31,   December 31,   September 30,

Sales to Customers in

        2012   % of Total     2011   % Change     2012   % Change
North America $ 24,030 27% $ 31,796 (24)% $ 20,161 19%
Europe 34,878 39% 26,449 32% 27,445 27%
Asia         31,652   35%     32,801   (4)%     35,277   (10)%
Total       $ 90,560       $ 91,046   (1)%   $ 82,883   9%
        Fiscal Year Ended
        December 31,   December 31,
Sales to Customers in         2012   % of Total     2011   % Change
North America $ 83,547 25% $ 90,000 (7)%
Europe 121,008 36% 104,825 15%
Asia         129,858   39%     146,748   (12)%
Total       $ 334,413       $ 341,573   (2)%

For the fourth quarter, sales in Europe were up $8.4 million over the prior-year period and up $7.4 million over the trailing third quarter driven by strong sales of grinding machines. North American sales were down by $7.8 million compared with the prior year which had an unusually strong fourth quarter. Fourth quarter sales in North America improved by $3.9 million over the trailing third quarter of 2012, driven by customer year-end delivery requirements. Asia sales were down $1.1 million from the prior-year period. Compared with the trailing third quarter, Asia sales were down $3.6 million as the trailing quarter benefitted from $9.6 million of incremental multi-machine sales to China.

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