Hardinge Reports First Quarter Results

Abstract: Net sales were $68.0 million in the first quarter of 2005, an increase of 31% as compared to $51.9 million of sales in the first quarter of 2004.

ELMIRA, N.Y., May 5 -- Hardinge Inc., a leading provider of advanced material-cutting solutions, today reported increased sales, net income, and orders in the first quarter of 2005 as compared to the same quarter in 2004.

Net sales were $68.0 million in the first quarter of 2005, an increase of 31% as compared to $51.9 million of sales in the first quarter of 2004. Net income was $1.9 million, or $.21 per share, as compared to $1.4 million, or $.16 per share, in the first quarter of 2004. Orders were $71.1 million, an increase of 41% as compared to $50.5 million in the first quarter of 2004.

J. Patrick Ervin, Chairman, President and Chief Executive Officer, commented, "We are pleased to report a strong start to 2005. Our first quarter results were in line with our expectations. We continue to see success from our strategy to expand sales in regions outside of the U.S. to take advantage of market segments where the greatest growth opportunities exist, while also expanding sales through diversifying our product offering. Sales of our new Bridgeport products, which Hardinge acquired in the fourth quarter of 2004, contributed over $11 million to consolidated net sales. Sales of all other products increased by approximately 10%, with increases in all regions."

The weakening of the U.S. dollar against the currencies in which our entities operate resulted in increases in the dollar value of sales reported. Net sales in the first quarter of 2005 were $1.8 million higher than the same quarter of 2004 because of foreign currency translation effects.

Overall market conditions in the U.S. improved over 2004, with industry-wide activity strengthening. European sales increased due to shipments of the new Bridgeport machining centers and stronger sales of grinding products. Sales in the Asia and Other region increased primarily because of sales of new Bridgeport products, including the first shipments of machines under a large, multiple machine order received at the end of last year.

The comparative order numbers were also impacted by the translation impact of a weaker dollar, with $2.7 million of the $20.6 million increase resulting from this change. New Bridgeport products accounted for $12.6 million of the increase in worldwide orders.

The Company's consolidated backlog at March 31, 2005 was $69.4 million or 68% above the March 31, 2004 backlog of $41.3 million. Backlog at December 31, 2004 was $66.3 million.

The Company's first quarter 2005 gross margin was 31.0% of sales, as compared to 30.2% in the first quarter of 2004. The improvement in margin percentage resulted primarily from higher production levels at the Company's U.S. manufacturing facility.

Source: Hardinge Inc.

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