FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2001
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 000-15760
HARDINGE INC.
(Exact name of Registrant as specified in its charter)
New York 16-0470200
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Hardinge Inc.
One Hardinge Drive
Elmira, NY 14902
(Address of principal executive offices) (Zip code)
(607) 734-2281
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
As of March 31, 2001 there were 8,903,755 shares of Common Stock of the
Registrant outstanding.
1
HARDINGE INC. AND SUBSIDIARIES
INDEX
Part I Financial Information Page
Item 1. Financial Statements
Consolidated Balance Sheets at March
31, 2001 and December 31, 2000. 3
Consolidated Statements of Income and Retained Earnings
for the three months ended March 31, 2001 and 2000. 5
Condensed Consolidated Statements of Cash Flows for
the three months ended March 31, 2001 and 2000. 6
Notes to Consolidated Financial Statements. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 11
Item 3. Quantitative and Qualitative Disclosures About
Market Risks 14
Part II Other Information
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Default upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
2
PART I, ITEM 1
HARDINGE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
March 31, Dec. 31,
2001 2000
---------------------------
(Unaudited)
Assets
Current assets:
Cash $ 1,526 $ 2,740
Accounts receivable 46,080 45,276
Notes receivable 7,750 7,185
Inventories 106,805 102,780
Deferred income taxes 4,954 5,065
Prepaid expenses 5,756 5,825
---------------------------
Total current assets 172,871 168,871
Property, plant and equipment:
Property, plant and equipment 152,974 153,431
Less accumulated depreciation 78,995 77,561
---------------------------
73,979 75,870
Other assets:
Notes receivable 15,802 17,354
Deferred income taxes 67 66
Goodwill 17,564 18,238
Other 3,982 2,717
---------------------------
37,415 38,375
---------------------------
Total assets $284,265 $283,116
===========================
See accompanying notes.
3
HARDINGE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS--CONTINUED
(IN THOUSANDS)
March 31, Dec. 31,
2001 2000
-----------------------------
(Unaudited)
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 20,502 $ 17,477
Notes payable to bank 9,370 7,037
Accrued expenses 15,265 17,672
Accrued income taxes 808 2,386
Deferred income taxes 4,003 2,152
Current portion long-term debt 4,068 4,105
-----------------------------
Total current liabilities 54,016 50,829
Other liabilities:
Long-term debt 46,269 47,417
Accrued pension plan expense 6,414 6,092
Deferred income taxes 3,161 2,342
Accrued postretirement benefits 5,755 5,747
-----------------------------
61,599 61,598
Equity of minority interest 1,378 1,226
Shareholders' equity:
Preferred stock, Series A, par value $.01:
Authorized - 2,000,000; issued - none
Common stock, $.01 par value:
Authorized shares - 20,000,000
Issued shares - 9,919,992 at March 31, 2001
and December 31, 2000 99 99
Additional paid-in capital 61,188 61,542
Retained earnings 131,927 130,955
Treasury shares (13,560) (14,243)
Accumulated other comprehensive income (9,244) (6,239)
Deferred employee benefits (3,138) (2,651)
-----------------------------
Total shareholders' equity 167,272 169,463
-----------------------------
Total liabilities and shareholders' equity $ 284,265 $ 283,116
=============================
See accompanying notes.
4
HARDINGE INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
(In Thousands, Except Per Share Data)
Three months ended
March 31,
2001 2000
------------------------
Net Sales $ 58,433 $ 47,836
Cost of sales 39,221 32,134
------------------------
Gross profit 19,212 15,702
Selling, general and administrative expenses 15,313 11,921
------------------------
Income from operations 3,899 3,781
Interest expense 862 354
Interest (income) (129) (111)
------------------------
Income before income taxes and minority interest
in consolidated subsidiary and investment of equity
company 3,166 3,538
Income taxes 958 1,451
Minority interest in (profit) loss of consolidate subasidiary (152) 75
Profit in investment of equity company 137
------------------------
Net income 2,193 2,162
Retained earnings at beginning of period 130,955 128,325
Less dividends declared 1,221 1,263
------------------------
Retained earnings at end of period $ 131,927 $ 129,224
========================
Per share data:
Basic earnings per share $ .25 $ .24
========================
Weighted average number
of common shares outstanding 8,705 8,852
========================
Diluted earnings per share $ .25 $ .24
========================
Weighted average number
of common shares outstanding 8,711 8,934
========================
Cash Dividends Declared $ .14 $ .14
========================
See accompanying notes.
5
HARDINGE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
Three Months Ended
March 31,
2001 2000
---------------------
Net cash provided by (used in) operating activities $ 149 ($1,685)
Investing activities:
Capital expenditures (1,893) (787)
Investment in Hardinge EMAG (137) 0
---------------------
Net cash (used in) investing activities (2,030) (787)
Financing activities:
Increase in short-term notes payable to bank 2,652 5,258
(Decrease) increase in long-term debt (514) 2,642
(Purchase) of treasury stock (338) (3,880)
Dividends paid (1,221) (1,264)
Funds provided by minority interest 152 0
---------------------
Net cash provided by financing activities 731 2,756
Effect of exchange rate changes on cash (64) (14)
---------------------
Net (decrease) increase in cash ($1,214) $ 270
=====================
See accompanying notes
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2001
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
2001, are not necessarily indicative of the results that may be expected for the
year ended December 31, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report for the year ended December 31, 2000. The Company operates in only one
business segment - industrial machine tools.
The Company has adopted Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" as of
January 1, 2001. See Note E below.
NOTE B--INVENTORIES
Inventories are summarized as follows (dollars in thousands):
March 31, December 31,
2001 2000
-----------------------------
Finished products $ 36,872 $ 36,766
Work-in-process 35,829 32,727
Raw materials and purchased components 34,104 33,287
------------ ---------------
$ 106,805 $ 102,780
============ ===============
NOTE C--COMPANY STOCK REPURCHASE PROGRAM
On April 9, 1999 Hardinge announced a stock repurchase program. The Board
of Directors authorized the repurchase of up to 1.0 million shares of the
Company's common stock, or approximately 10% of the total shares outstanding.
The Company purchased 900,351 shares under the program through July 25, 2000. On
July 26, 2000, the Board of Directors expanded the Company's stock buyback
program by authorizing a plan to repurchase up to an additional 1.0 million
shares of stock. No shares have been purchased under the new plan.
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE D--EARNINGS PER SHARE AND WEIGHTED AVERAGE SHARES OUTSTANDING
Earnings per share are computed in accordance with Statement of Financial
Accounting Standards No. 128 EARNINGS PER SHARE. Basic earnings per share are
computed using the weighted average number of shares of common stock outstanding
during the period. For diluted earnings per share, the weighted average number
of shares includes common stock equivalents related primarily to restricted
stock.
The following is a reconciliation of the numerators and denominators of
the basic and diluted earnings per share computations required by Statement
No. 128:
Three months ended
March 31,
-----------------------
2001 2000
-----------------------
(dollars in thousands)
Numerator:
Net income $2,193 $2,162
Numerator for basic earnings per share 2,193 2,162
Numerator for diluted earnings per share 2,193 2,162
Denominator:
Denominator for basic earnings per share
-weighted average shares (in thousands) 8,705 8,852
Effect of diluted securities:
Restricted stock and stock options (in thousands) 6 82
-----------------------
Denominator for diluted earnings per share
-adjusted weighted average shares (in thousands) 8,711 8,934
Basic earnings per share $ .25 $ .24
=======================
Diluted earnings per share
$ .25 $ .24
=======================
NOTE E-- DERIVATIVES AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133 (Statement 133), ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES. The Statement, which was adopted by the Company on January 1, 2001,
requires companies to recognize all of its derivative instruments as either
assets or liabilities in the statement of financial position at fair value. The
accounting for changes in the fair value (i.e., gains or losses) of a derivative
instrument depends on whether it has been designated and qualifies as part of a
hedging relationship and further, on the type of hedging relationship. For those
derivative instruments that are designated and qualify as hedging instruments, a
company must designate the hedging instrument, based upon the exposure being
hedged, as either a fair value hedge, cash flow hedge or a hedge of a net
investment in a foreign operation. The adoption of Statement 133 on January 1,
2001, resulted in a cumulative effect of an accounting change recognized as a
credit of $25,000 in other comprehensive income.
For derivative instruments that are designated and qualify as a fair value
hedge (i.e., hedging the exposure to changes in the fair value of an asset or a
liability or an identified portion thereof that is attributable to a particular
risk), the gain or loss on the derivative instrument as well as the offsetting
loss or gain on the hedged item attributable to the hedged risk are recognized
in current earnings during the period of the change in fair values. For
derivative instruments that are designated and qualify as a cash flow hedge
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
(i.e., hedging the exposure to variability in expected future cash flows that is
attributable to a particular risk), the effective portion of the gain or loss on
the derivative instrument is reported as a component of other comprehensive
income and reclassified into earnings in the same period or periods during which
the hedge transaction affects earnings. The remaining gain or loss on the
derivative instrument in excess of the cumulative change in the present value of
future cash flows of the hedged item, if any, is recognized in current earnings
during the period of change. For derivative instruments that are designated and
qualify as a hedge of a net investment in a foreign currency, the gain or loss
is reported in other comprehensive income as part of the cumulative translation
adjustment to the extent it is effective. For derivative instruments not
designated as hedging instruments, the gain or loss is recognized in current
earnings during the period of change.
CASH FLOW HEDGING STRATEGY
To protect against the increase in value of forecasted foreign currency
cash flows resulting from purchases of inventory and subsequent payment of
related accounts payable to and from foreign subsidiaries over the year, the
Company has instituted a foreign currency cash flow hedging program. The Company
hedges portions of its forecasted purchases and related accounts payable
denominated in foreign currencies with forward contracts. When the applicable
currency strengthens significantly against the foreign currencies, the increase
in value of future foreign currency cost of sales or translation adjustment of
related accounts payable is offset by gains in the value of the forward
contracts designated as hedges. Conversely, when the applicable currency
weakens, the decrease in the value of future foreign currency cash flows is
offset by losses in the value of the forward contracts.
The Company has entered into interest rate swap agreements that
effectively convert a portion of its floating-rate debt to a fixed-rate basis
for the next two to seven years, thus reducing the impact of interest-rate
changes on future interest expense. Approximately 57% of the Company's
outstanding debt was designated as the hedged items to interest rate swap
agreements at March 31, 2001.
At March 31, 2001, the Company expects to reclassify $(128,000) of net
gains (losses) on derivative instruments from accumulated other comprehensive
income to earnings during the next twelve months due to actual sales of
products, adjustments of foreign-currency denominated payables and the
payment of variable interest associated with the floating rate debt. The
amount of gains and losses associated with the ineffective portion of hedging
instruments during the quarter ended March 31, 2001 was not material.
HEDGE OF NET INVESTMENT IN FOREIGN OPERATIONS
The Company uses forward foreign exchange contracts to protect the value
of its investments in its foreign subsidiaries in Switzerland. Realized and
unrealized gains and losses from these hedges are not included in the income
statement, but are shown in the cumulative translation adjustment account
included in other comprehensive income, with the related amounts due to or from
counterparties included in other liabilities or other assets.
During the quarter ended March 31, 2001, the Company recognized $58,000 of
net gains, included in the cumulative translation adjustment, related to the
forward foreign exchange contracts.
See Note F below for the impacts of Statement 133 on Other Comprehensive
Income in the three months ended March 31, 2001.
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE F--REPORTING COMPREHENSIVE INCOME
During the three months ended March 31, 2001 and 2000, the components of
total comprehensive income consisted of the following (dollars in thousands):
Three months ended
March 31,
2001 2000
----------- -----------
Net Income $ 2,193 $ 2,162
Other Comprehensive (Loss) Income:
Foreign currency translation adjustments (3,482) (994)
Cumulative effect of accounting change 25
Unrealized gain (loss) on derivative instruments:
Cash flow hedges (668)
Net investment hedges 1,120 344
----------- -----------
Other comprehensive (loss) (3,005) (650)
----------- -----------
Total Comprehensive (Loss) Income $ (812) $ 1,512
=========== ===========
Accumulated other comprehensive income at January 1, 2001 includes
$2,621,000 and $1,000 related to net accumulated derivative gains (losses)
associated with net investment hedges and cash flow hedges, respectively.
Accumulated other comprehensive income at March 31, 2001 includes $4,149,000
and $(630,000) related to net accumulated derivative gains (losses)
associated with net investment hedges and cash flow hedges, respectively.
10
PART I, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following are management's comments relating to Hardinge's results of
operations for the three month periods ended March 31, 2001 and 2000 and in the
Company's financial condition at March 31, 2001.
RESULTS OF OPERATIONS
NET SALES. Net sales for the quarter ended March 31, 2001 were 22.2%
greater than the first quarter of 2000, increasing $10,597,000 to $58,433,000.
The acquisition of HTT Hauser Tripet Tschudin (HTT) on December 22, 2000
contributed sales of $8,706,000 to this increase.
Sales in the U.S. market were $27,426,000 in the quarter ended March 31,
2001, down 16.2% or $5,307,000 from the $32,733,000 for the same three months of
2000. This was directly due to the reduced machine tool demand in the U.S.
market. Sales to European customers increased 83.7% to $18,744,000 in the
quarter ended March 31, 2001, from $10,204,000 in the first quarter of 2000. HTT
contributed $5,300,000 of this $8,540,000 increase. Other international sales,
primarily to customers in Asia, rose 150.3% to $12,263,000 in the first quarter
of 2001, compared to $4,899,000 in the same three months in 2000. This includes
$6,700,000 of increased sales to Asian customers.
Machine sales accounted for 68.2% of revenues for the quarter ended March
31, 2001 compared to 63.8% for the same period last year. Sales of non-machine
products and services made up the balance.
The Company's order rate rose 27.3% to $62,078,000 in the quarter ended
March 31, 2001 compared to $48,772,000 for the same quarter last year. Excluding
HTT, the order rate rose 8.6% from one year earlier. The backlog at March 31,
2001 was $68,446,000, which was 71.6% higher than a year earlier. Excluding HTT,
the backlog was 26.0% greater than at March 31, 2000. The March 31, 2001 backlog
was also 5.6% above the December 31, 2000 backlog, which included HTT.
GROSS PROFIT. Expressed as a percentage of net sales, gross margin for the
three months ended March 31, 2001 was 32.9% compared to 32.8% one year earlier.
While competitive price discounting continued in both domestic and international
markets, the benefits from on-going cost control efforts at the Company's
manufacturing facilities, and limited price increases, more than offset the
impacts of inflation.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses were $15,313,000, or 26.2% of sales, during the
first quarter of 2001 compared to $11,921,000, or 24.9% of sales, one year
earlier. Excluding $175,000 for amortization of the Goodwill from the HTT
acquisition, SG&A was 25.9 % of sales, compared to the full-year 2000 average of
25.5 %.
INCOME FROM OPERATIONS. Income from operations rose to $3,899,000 or 6.7%
of sales, for the quarter ended March 31, 2001, compared to $3,781,000, or 7.9%
of sales, for the same three month period one year earlier. These improvements
are the result of higher sales levels, as discussed above.
INTEREST EXPENSE AND INCOME. Interest expense for the quarter ended March
31, 2001 was $862,000 compared to $354,000 a year earlier. This increase
includes $424,000 of interest on debt incurred from the HTT acquisition. Other
increased borrowing, as discussed in Liquidity and Capital Resources below, was
partially offset by lower interest rates in the quarter ended March 31, 2001.
Interest income was $129,000, compared to $111,000 one year earlier.
11
INCOME TAXES. The provision for income taxes was 30.3% of pre-tax income
for the quarter ended March 31, 2001, compared to 41.0% during the first quarter
of 2000. The quarter ended March 31, 2000 tax rate was unusually high, due to
losses at several foreign subsidiaries. By comparison, the average tax rate
incurred for the year 2000 was 31.5%. The quarter ended March 31, 2001 tax rate
was lower than normal due to a higher proportion of taxable income earned in
foreign jurisdictions with lower tax rates.
NET INCOME. Net income for the first quarter of 2001 was $2,193,000, or
$.25 per share, compared to $2,162,000, or $.24 per share, in the first quarter
of 2000. The improvement in earnings was the result of the factors discussed
above.
EARNINGS PER SHARE. All earnings per share and weighted average share
amounts are computed in accordance with Financial Accounting Standards Board
Statement No. 128, EARNINGS PER SHARE.
QUARTERLY INFORMATION
The following table sets forth certain quarterly financial data for each
of the periods indicated.
Three Months Ended
Mar. 31, June 30, Sept. 30, Dec. 31,
2001 2001 2001 2001
-------------------------------------------
(in thousands, except per share data)
-------------------------------------------
Net Sales $58,433
Gross Profit 19,212
Income from operations 3,899
Net income 2,193
Diluted earnings per share .25
Weighted average shares outstanding 8,711
Three Months Ended
Mar. 31, June 30, Sept. 30, Dec. 31,
2000 2000 2000 2000
-------------------------------------------
(in thousands, except per share data)
-------------------------------------------
Net Sales $47,836 $47,773 $45,335 $48,535
Gross Profit 15,702 15,796 14,432 15,018
Income from operations 3,781 3,686 2,424 2,778
Net income 2,162 1,983 1,369 2,018
Diluted earnings per share .24 .23 .16 .23
Weighted average shares outstanding 8,934 8,680 8,715 8,718
12
LIQUIDITY AND CAPITAL RESOURCES
Operating activities for the three months ended March 31, 2001 generated
cash of $149,000, compared to $1,685,000 of cash consumed in operating
activities during the same three months of 2000, for a $1,834,000 increase in
cash generation. There were two major components of cash generation. An increase
of $3,639,000 in trade payables for the first three months of 2001 compared to a
reduction of $2,854,000 for the same period in 2000 generated $6,493,000.
Similarly, a reduction of $475,000 in notes receivable during the first quarter
of 2001 compared to an increase of $4,069,000 during the same period of 2000
raised an additional $4,544,000 of cash. Offsetting this cash generation was an
increase in inventory of $5,934,000 during the first three months of 2001
compared to a reduction of $88,000 a year earlier, for a use of cash of
$6,022,000. Also, accrued expenses decreased by $2,997,000 during the first
quarter of 2001 compared to an increase of $1,673,000 fir the first quarter of
2000, using an additional $4,670,000 of cash. Whereas most of the trade payables
increase is due to the increased inventories, the note receivable decrease was
due to the fact that customer notes receivable were sold during the first
quarter of 2001 as described below whereas no such sale occurred during the
first quarter of 2000.
Investing activities for the first three months of 2001 used $2,030,000,
including $1,893,000 for capital expenditures, compared to $787,000 for the same
period of 2000. Capital expenditures were primarily for increased capacity at
the Kellenberger AG facility in Switzerland.
Financing activities provided $731,000 in the first three months of 2001,
compared to $2,756,000 provided in the same three months of 2000. The primary
changes were in debt, which increased $2,138,000 in the first three months of
2001 after increasing $7,900,000 in the same three months of 2000. Purchases of
treasury stock used $338,000 in the first three months of 2001 compared to
$3,880,000 during the same period in 2000 when the Company's stock repurchase
plan was very active.
Hardinge's current ratio at March 31, 2001 was 3.20:1 compared to 3.32:1
at December 31, 2000.
Hardinge provides long-term financing for the purchase of its equipment by
qualified customers. The Company periodically sells portfolios of customer notes
to financial institutions in order to reduce debt and finance current
operations. Our customer financing program has an impact on our month-to-month
borrowings, but it has had little long-term impact on our working capital
because of the ability to sell the underlying notes. Hardinge sold $6,024,000 of
customer notes in the first three months of 2001, compared to no notes sales
during the first three months of 2000.
Hardinge maintains a revolving loan agreement with several U.S. banks
providing for unsecured borrowing up to $50,000,000 on a revolving basis through
August 1, 2002. These facilities, along with other short term credit agreements,
provide for immediate access of up to $68,910,000. At March 31, 2001,
outstanding borrowings under these arrangements totaled $23,941,000.
During March 2001 the Company entered into a $24,000,000 unsecured term
loan agreement with a U.S. bank for the purpose of providing funds to finance
the Company's acquisition of HTT Hauser Tripet Tschudin AG. The December 2000
acquisition had previously been financed temporarily using the Company's
revolving loan agreement. The new arrangement is a seven year term loan with
quarterly interest payments through March 2008 and equal quarterly principal
payments over the last five years, beginning with the first principal payment in
June 2003. Interest is charged on the debt based on LIBOR plus a fixed
percentage. The Company also entered into cross currency and interest rate swaps
in March 2001 which effectively convert the $24,000,000 term loan to a borrowing
of 39,540,000 Swiss francs with an effective interest rate of 4.33%. The cross
currency swap has been designated as a hedge against the Company's net
investment in HTT while the interest rate swap has been designated as a cash
flow hedge. Both swaps are accounted for in accordance with provisions of
Financial Accounting Standard No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES, as explained in the footnotes to the financial statements.
13
We believe that the currently available funds and credit facilities, along
with internally generated funds, will provide sufficient financial resources for
ongoing operations.
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company adopted Statement of Financial Accounting Standards No. 133,
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES as of January 1,
2001. See Note E above.
THIS REPORT CONTAINS STATEMENTS OF A FORWARD-LOOKING NATURE RELATING TO
THE FINANCIAL PERFORMANCE OF HARDINGE INC. SUCH STATEMENTS ARE BASED UPON
INFORMATION KNOWN TO MANAGEMENT AT THIS TIME. THE COMPANY CAUTIONS THAT SUCH
STATEMENTS NECESSARILY INVOLVE UNCERTAINTIES AND RISK AND DEAL WITH MATTERS
BEYOND THE COMPANY'S ABILITY TO CONTROL, AND IN MANY CASES THE COMPANY CANNOT
PREDICT WHAT FACTORS WOULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
INDICATED. AMONG THE MANY FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM
THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS ARE FLUCTUATIONS IN THE
MACHINE TOOL BUSINESS CYCLES, CHANGES IN GENERAL ECONOMIC CONDITIONS IN THE U.S.
OR INTERNATIONALLY, THE MIX OF PRODUCTS SOLD AND THE PROFIT MARGINS THEREON, THE
RELATIVE SUCCESS OF THE COMPANY'S ENTRY INTO NEW PRODUCT AND GEOGRAPHIC MARKET ,
THE COMPANY'S ABILITY TO MANAGE ITS OPERATING COSTS, ACTIONS TAKEN BY CUSTOMERS
SUCH AS ORDER CANCELLATIONS OR REDUCED BOOKINGS BY CUSTOMERS OR DISTRIBUTORS,
COMPETITORS' ACTIONS SUCH AS PRICE DISCOUNTING OR NEW PRODUCT INTRODUCTIONS,
GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL MATTERS, CHANGES IN THE AVAILABILITY
AND COST OF MATERIALS AND SUPPLIES, THE IMPLEMENTATION OF NEW TECHNOLOGIES AND
CURRENCY FLUCTUATIONS. ANY FORWARD-LOOKING STATEMENT SHOULD BE CONSIDERED IN
LIGHT OF THESE FACTORS. THE COMPANY UNDERTAKES NO OBLIGATION TO REVISE ITS
FORWARD-LOOKING STATEMENTS IF UNANTICIPATED EVENTS ALTER THEIR ACCURACY.
PART I. ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None
14
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
4.1 Amendment to the By-Laws of Hardinge Inc. dated
February 20, 2001.
10.1 Amendment Number Two dated February 5, 2001 to the Credit
Agreement dated as of August 1, 1997 and amended December
11, 2000 among Hardinge Inc. and the Bank's signatory
thereto and the Chase Manhattan Bank as Agent.
10.2 Amendment Number Three dated February 5, 2001 to the
Credit Agreement dated as of February 28, 1996 and amended
August 1, 1997 and December 11, 2000 among Hardinge Inc.
and the Bank's signatory thereto and the Chase Manhattan
Bank as Agent.
10.3 $8,000,000 Master Note among Hardinge Inc. and Chemung
Canal Trust Company dated February 8, 2001.
10.4 Term Loan Agreement and Term Loan Promissory Note dated as
of March 20, 2001 among Hardinge Inc. and KeyBank National
Association .
* 10.5 Employment Agreement with Richard B. Hendrick effective
February 1, 2001.
* 10.6 Employment Agreement with Clive M. Danby effective April
1, 2001.
.---------------------------
*Management contract or arrangement
B. Reports on Form 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HARDINGE INC.
May 10, 2001 By: /s/ J. Patrick Ervin
- ----------------- --------------------------------
Date J. Patrick Ervin
President/CEO
May 10, 2001 By: /s/ Richard L. Simons
- ----------------- --------------------------------
Date Richard L. Simons
Executive Vice President/CFO
(Principal Financial Officer)
May 10, 2001 By: /s/ Richard B. Hendrick
- ----------------- --------------------------------
Date Richard B. Hendrick
Vice President and Controller
(Principal Accounting Officer)
16