Mr. Simons noted, “The significant capital used for expanding our capacity and improving our operations were critical, strategic investments in our future and we believe will better enable us to capitalize on the opportunities we see in the expanding machine tool market. We have more than doubled our manufacturing capacity in China in order to better serve the Asian market as its consumption of machine tools is expected to grow at a double digit compounded rate for the next few years. As well, Kellenberger, our operation in Switzerland, is among the top suppliers of high-precision cylindrical grinding machines in the world and we expect the enhancements we have made in that operation will facilitate our capture of a greater share of that highly specialized market.”

Trend in Net Orders (“Orders”) Vary by Region

Orders by Region
Quarter Ended     Fiscal Year Ended
December 31, December 31,
(in thousands) (in thousands)
Orders from       2011       2010     %    

2011 %

 
Orders from       2011       2010     %    

2011 %

 
Customers in             Change       of Total     Customers in             Change       of Total  
North America $ 22,647 $ 19,161 18 %

33
% North America $ 95,435 $ 67,213 42 % 26 %
Europe

26,920

 

32,027

 

(16)

%
39 % Europe

120,410

 

90,618

 
33 % 32 %
Asia & Other      

19,111
 

 
 

31,800
 

 

(37)

%
    28 %   Asia & Other      

157,010
 

 
 

138,871
 

 
13 %     42 %
Total     $ 69,478     $ 82,988    

(16)

%
          Total     $ 372,855     $ 296,702     26 %        

Orders during the fourth quarter of 2011 were $69.5 million, net of approximately $8.5 million in cancellations of orders that had been received in the first half of 2011. Orders for the quarter were down 16% compared with orders in the fourth quarter of fiscal 2010. For 2011, total orders received were $372.9 million, up 26% over orders received in 2010. Included in orders in 2010 was $35.2 million associated with the China-based supplier to the consumer electronics industry. Hardinge received an additional $12.5 million in orders from the same company in 2011. Strong activity in the North American markets reflected the strengthening of the U.S. industrial economy and the effectiveness of Hardinge’s restructured channels to market.

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