Hardinge applies its engineering design and manufacturing expertise in high performance machining centers, high-end cylindrical and jig grinding machines, SUPER-PRECISION® and precision CNC lathes and technologically advanced workholding accessories. Hardinge has manufacturing operations in China, Switzerland, Taiwan, the United Kingdom and the United States.

The Company regularly posts information on its website: http://www.hardinge.com.

Safe Harbor Statement

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.

HARDINGE INC. AND SUBSIDIARIES Consolidated statements of operations (in thousands except per share data)
                           
Quarter Ended September 30, Year to Date Ended September 30,
2012       2011 2012       2011
(unaudited) (unaudited)
 
Net sales $ 82,883 $ 90,389 $ 243,853 $ 250,527
Cost of sales   58,856     64,840     174,597     182,599  
Gross profit   24,027     25,549     69,256     67,928  
Gross profit margin 29.0% 28.3% 28.4% 27.1%
 
Selling, general and administrative expenses 18,602 18,943 55,316 54,609
Gain on sale of assets (13 ) (5 ) (27 ) (23 )
Other expense   127     284     430     389  
Income from operations   5,311     6,327     13,537     12,953  
Operating margin 6.4% 7.0% 5.6% 5.2%
 
Interest expense 246 97 655 268
Interest income   (44 )   (45 )   (95 )   (132 )
Income before income taxes 5,109 6,275 12,977 12,817
 
Income tax expense   1,089     2,025     2,874     4,073  
Net income $ 4,020   $ 4,250   $ 10,103   $ 8,744  
 
Basic earnings per share $ 0.35 $ 0.37 $ 0.87 $ 0.75
 
Diluted earnings per share $ 0.34 $ 0.36 $ 0.86 $ 0.75
 
Cash dividends declared per share $ 0.02 $ 0.02 $ 0.06 $ 0.03
 
Weighted avg. shares outstanding: Basic 11,567 11,467 11,551 11,461
Weighted avg. shares outstanding: Diluted 11,656 11,533 11,638 11,527
 
 
HARDINGE INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands except share and per share data)
             
September 30, 2012 December 31, 2011
(unaudited)
Assets
Cash and cash equivalents $ 21,507 $ 21,736
Restricted cash 5,088 4,575
Accounts receivable, net 50,391 65,909
Inventories, net 134,501 122,782
Other current assets   15,198   13,338
Total current assets 226,685 228,340
 
Property, plant and equipment, net 70,168 68,204
Intangible assets, net 12,503 12,765
Other non-current assets   1,665   2,360
Total non-current assets   84,336   83,329
Total assets $ 311,021 $ 311,669
 
Liabilities and shareholders' equity
Accounts payable $ 32,203 $ 36,952
Notes payable to bank 14,150 12,969
Accrued expenses 28,278 25,103
Customer deposits 14,767 18,881
Accrued income taxes 2,517 3,480
Deferred income taxes 2,677 2,556
Current portion of long-term debt   2,842   1,548
Total current liabilities 97,434 101,489
 
Long-term debt 5,674 7,020
Pension and postretirement liabilities 41,381 49,310
Deferred income taxes 3,071 2,391
Other liabilities   4,102   4,436
Total non-current liabilities 54,228 63,157
 
Common stock ($0.01 par value, 12,472,992 issued) 125 125
Additional paid-in capital 114,340 114,369
Retained earnings 74,442 65,041

Treasury shares (782,717 shares at September 30, 2012and 813,980 shares at December 31, 2011)
(9,934) (10,379)
Accumulated other comprehensive loss   (19,614)   (22,133)
Total shareholders' equity   159,359   147,023
Total liabilities and shareholders' equity $ 311,021 $ 311,669
 
 
HARDINGE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
      Quarter Ended September 30,         YTD Ended September 30,
2012         2011 2012         2011
Operating activities                
Net income $ 4,020 $ 4,250 $ 10,103 $ 8,744

Adjustments to reconcile net income to net cash usedin operating activities:
Depreciation and amortization 1,795 1,989 5,453 5,885
Debt issuance amortization 10 26 42 78
Provision for deferred income taxes (149) 861 852 (411)
Gain on sale of assets (13) (5) (27) (23)

Unrealized intercompany foreign currencytransaction loss (gain)
223 (1,147) 513 (748)
Changes in operating assets and liabilities:
Accounts receivable 4,541 2,315 16,226 (11,362)
Inventories 371 (8,248) (10,215) (20,485)
Other assets (417) (129) (957) (2,700)
Accounts payable (2,513) 1,694 (5,419) 6,051
Customer deposits (1,808) (1,799) (4,207) 4,209
Accrued expenses (560) 1,873 (6,292) 2,190
Accrued postretirement benefits   (129)   (136)   (387)   (423)
Net cash provided by (used in) operating activities 5,371 1,544 5,685 (8,995)
 
Investing activities
Capital expenditures (803) (4,518) (6,167) (13,520)
Proceeds on sale of assets   18   44   40   908
Net cash used in investing activities (785) (4,474) (6,127) (12,612)
 
Financing activities
Proceeds from short-term notes payable to bank 969 4,951 827 10,943
(Repayments of) proceeds from long-term debt (150) 1,461 (140) 1,152
Dividends paid (233) (233) (698) (349)
Other financing activities   (1)   (5)   8   42
Net cash provided by (used in) financing activities 585 6,174 (3) 11,788
 
Effect of exchange rate changes on cash   187   (684)   216   135
Net increase (decrease) in cash 5,358 2,560 (229) (9,684)
Cash and cash equivalents at beginning of period   16,149   18,701   21,736   30,945
Cash and cash equivalents at end of period $ 21,507 $ 21,261 $ 21,507 $ 21,261
 

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