Dépèche transmise le 9 mai 2012 par Business Wire
Hardinge Inc. Reports Increase in Net Income to $2.4 Million in First Quarter 2012
ELMIRA, N.Y.--(BUSINESS WIRE)--Hardinge Inc. (NASDAQ: HDNG), a leading international provider of advanced metal-cutting solutions, reported financial results for its first quarter 2012.
“Although working capital requirements and timing impacted cash from operations in the first quarter, we expect to be cash flow positive for the year with growing EBITDA and closely managed working capital.”
Net sales (“sales”) were $74.7 million in the first quarter of 2012, up $1.2 million, or 2%, over sales of $73.5 million in the prior year’s first quarter. Foreign currency translation had approximately $0.9 million favorable effect on sales in the quarter compared with the prior year first quarter. When compared with the trailing fourth quarter of 2011, sales were down $16.4 million, or 18%, during the first quarter 2012. The fourth quarter 2011 benefited from several high value shipments as well as the impact of customers in the U.S. accelerating purchasing decisions to take advantage of tax benefits expiring in 2011. In comparison, the first quarter of 2012 was negatively impacted by the Chinese Lunar New Year coupled with very soft January sales activity in North America. Net income for the first quarter increased to $2.4 million, up $1.1 million, or 77% when compared with the prior year first quarter. On a per diluted share basis, earnings were $0.21 in the first quarter of 2012 compared with $0.12 in the same period in the prior year.
Commenting on the outlook for the year, Richard L. Simons, Chairman, President and Chief Executive Officer indicated, “Our sales channels experienced a high level of quote activity during the first quarter, but orders started off slowly. Orders in March have picked up and continued to be strong through April. Based on our current backlog and order activity, we expect sales over the next two quarters to be similar to the last half of 2011. Although for the year we are not expecting significant year-over-year sales growth, we do believe we will have a stronger margin mix of business and be able to better leverage our operations to drive earnings.”
Diversified Markets Create Balance
Sales by Region
|North America||$ 18,621||$ 17,195||8 %||25%|
|Total||$ 74,650||$ 73,482||2 %|
North America sales, which represented 25% of total sales in the first quarter of 2012, increased by 8% compared with the first quarter of 2011 as the U.S. industrial economy strengthened. Sequentially, North America sales during the first quarter 2012 decreased 41% when compared with fourth quarter of 2011. This decrease was driven by the impact of customers in the U.S. accelerating purchase decisions during the fourth quarter 2011 to take advantage of favorable tax benefits expiring in 2011.
In Europe, first quarter sales grew by 24% year-over-year. The year-over-year increase was driven by higher demand for machine tools with solid levels of sales activity in Germany and the United Kingdom. Europe sales during the first quarter 2012 were flat compared with the fourth quarter of 2011.
Asia sales declined by 14% in the first quarter compared with the prior year period. Last year’s first quarter included an additional $4.7 million in lower margin sales to a China-based supplier to the consumer electronics industry. Sales to Asia in the first quarter 2012 were down just 4% when compared with the fourth quarter in 2011 despite the typical weakness in the first quarter due to the Chinese Lunar New Year.
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.
Favorable Mix Drives Margin Improvements
Gross profit was $21.2 million, or 28.4% of sales, in the 2012 first quarter compared with $19.1 million, or 26.0% of sales, in the same period of the prior year. The increase in gross margin over the prior year was primarily attributable to favorable product and pricing mix.
Selling, general and administrative (“SG&A”) expenses in the 2012 first quarter were $17.6 million, or 23.6% of sales, compared with $16.7 million, or 22.7% of sales, in the prior year’s first quarter. The year-over-year increase was primarily inflationary.
Income from operations in the first quarter of 2012 was $3.4 million, up 51%, or $1.1 million over the prior year’s first quarter. As a percent of sales, income from operations was 4.5%, a 140 basis point improvement over the same period of the prior year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 23% to $5.1 million, or 6.9% of sales, in the 2012 first quarter compared with $4.2 million, or 5.7% of sales, in the same period of the prior year. The Company believes that, when used in conjunction with GAAP measures, EBITDA, which is a non-GAAP measure, helps in the understanding of the Company’s operating performance. (See the attached table for a Reconciliation of Net Income to EBITDA and other important information regarding Hardinge’s use and presentation of EBITDA).
Strong Balance Sheet
Cash and cash equivalents at March 31, 2012 were $22.2 million compared with $21.7 million at December 31, 2011. Cash used in operations in the first quarter was $3.5 million, compared with $7.1 million during the same period of the prior year. Cash used in operations during the first quarter 2012 included a $4.2 million payment to the domestic pension plan. The Company expects to fund an additional $0.5 million over each of the remaining quarters of 2012.
Edward J. Gaio, Vice President and CFO of Hardinge, commented, “Although working capital requirements and timing impacted cash from operations in the first quarter, we expect to be cash flow positive for the year with growing EBITDA and closely managed working capital.”
Capital expenditures in the first quarter of 2012 were $2.1 million. Capital expenditures in fiscal 2012 are expected to be approximately $7 million to $9 million of which approximately $3 million to $5 million is for general maintenance purposes. The remainder is planned for completion of the new facility in China, which is anticipated to triple the Company’s production capacity in that country, as well as the investments in the Company’s operations in Switzerland to improve the Company’s productivity and enhance capabilities in that country.
Mr. Gaio noted, “The sizable investments we made in China and Switzerland are long-term investments. We expect capital spending to normalize to our regular maintenance capital spending levels after we finish these projects this year. Importantly, the investments enable us to capture greater market share in China, as well as the high precision cylindrical grinding global market which we expect will drive the return on our investment.”
Net Orders (“Orders”) by Region
|North America||$ 20,699||$ 23,217||(11)%||25%|
Orders during the quarter were $81.4 million, a decrease of $32.4 million, or 28%, when compared with the prior year quarter. The decrease was the result of the exceptional order levels in China that were experienced by the machine tool industry during the prior year quarter. Order volumes during the prior year quarter were at a record level for the Company as customers reacted to increasing prices and extended lead times. These trends resulted from constraints on the machine tool supply chain due to significant demand caused by strong economic recovery in the industry. The Company’s order backlog at the end of the quarter was $149 million, most of which is expected to ship in 2012.
Mr. Simons noted, “Although we know our markets can vary quickly with changing economic conditions, as we look further out, we do believe that the long-term trends of approximately 10% compounded annual growth in machine tool consumption projected by industry analysts are reasonable. This industry growth is expected to be primarily in Asia, where we are well positioned with products and operations to take advantage of this opportunity. Given that level of global growth, we believe we can leverage operations and achieve improved earnings over time. Through careful management of working capital and capital investments, we are focused on building shareholder value.”
Webcast and Conference Call
Hardinge will host a conference call and webcast today at 11:00 a.m. Eastern Time. During the conference call and webcast, Richard L. Simons, Chairman, President and CEO, and Edward J. Gaio, Vice President and CFO, will review the financial and operating results for the quarter, as well as the Company’s strategy and outlook. A question and answer session will follow the formal discussion. Their review will be accompanied by a slide presentation which will be available on Hardinge’s website at www.hardinge.com.
The conference call can be accessed by dialing (201) 689-8560. The listen-only audio webcast can be monitored at www.hardinge.com.
A telephonic replay will be available from 2:00 p.m. ET the day of the call through Wednesday, May 16, 2012. To listen to the archived call, dial (858) 384-5517 and enter conference ID number 392773. Alternatively, an archive of the webcast will be available on the Company’s website at www.hardinge.com. A transcript will also be posted to the website, once available.
Hardinge is a global designer, manufacturer and distributor of machine tools, specializing in SUPER-PRECISION®and precision CNC Lathes, high performance Machining Centers, high-end cylindrical and jig Grinding Machines, and technologically advanced Workholding & Rotary Products. The Company’s products are distributed to most of the industrialized markets around the world with approximately 75% of its sales outside of North America. Hardinge has a very diverse international customer base and serves a wide variety of end-user markets. This customer base includes metalworking manufacturers which make parts for a variety of industries, as well as a wide range of end users in the aerospace, agricultural, transportation, basic consumer goods, communications and electronics, construction, defense, energy, pharmaceutical and medical equipment, and recreation industries, among others. The Company has manufacturing operations in Switzerland, Taiwan, the United States, China and the United Kingdom. Hardinge’s common stock trades on the NASDAQ Global Select Market under the symbol, “HDNG.”
For more information, please visit 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.
FINANCIAL TABLES FOLLOW.
|HARDINGE INC. AND SUBSIDIARIES|
|Consolidated Statements of Operations|
|(in thousands except per share data)|
|Cost of sales||53,427||54,406|
|Gross profit margin||28.4||%||26.0||%|
|Selling, general and administrative expenses||17,633||16,673|
|Gain on sale of assets||(2||)||(25||)|
|Income from operations||3,388||2,251|
|Income before income taxes||3,272||2,212|
|Income tax expense||829||831|
|Basic and diluted earnings per share||$||0.21||$||0.12|
|Cash dividends declared per share||$||0.02||$||0.005|
|Weighted avg. shares outstanding: Basic||11,524||11,450|
|Weighted avg. shares outstanding: Diluted||11,557||11,476|
|HARDINGE INC. AND SUBSIDIARIES|
|Consolidated Statements of Comprehensive Income|
|Other comprehensive income, net of tax||4,808||1,821|
|Comprehensive income, net of tax||$||7,251||$||3,202|
|HARDINGE INC. AND SUBSIDIARIES|
|Consolidated Balance Sheets|
|(in thousands except share and per share data)|
|March 31,||December 31,|
|Cash and cash equivalents||$||22,206||$||21,736|
|Accounts receivable, net||52,720||65,909|
|Other current assets||14,085||13,338|
|Total current assets||227,844||228,340|
|Property, plant and equipment, net||70,600||68,204|
|Intangible assets, net||12,808||12,765|
|Other non-current assets||2,221||2,360|
|Total non-current assets||85,629||83,329|
|Liabilities and shareholders' equity|
|Notes payable to bank||18,853||12,969|
|Accrued income taxes||3,178||3,480|
|Deferred income taxes||2,530||2,556|
|Current portion of long-term debt||2,530||1,548|
|Total current liabilities||100,070||101,489|
|Pension and postretirement liabilities||44,948||49,310|
|Deferred income taxes||3,105||2,391|
|Total non-current liabilities||59,380||63,157|
|Common stock ($0.01 par value, 12,472,992 issued)||125||125|
|Additional paid-in capital||114,097||114,369|
|Accumulated other comprehensive loss||(17,325||)||(22,133||)|
|Total shareholders' equity||154,023||147,023|
|Total liabilities and shareholders' equity||$||313,473||$||311,669|