Nov. 5, 2009 (PR Newswire) --

ELMIRA, N.Y., Nov. 5 /PRNewswire-FirstCall/ -- Hardinge Inc. (Nasdaq: HDNG), a leading international provider of advanced metal-cutting solutions, today reported net sales of $50.1 million for the quarter and $157.4 million for the nine months ended September 30, 2009. Sales for the comparable periods in 2008 were $86.6 million and $268.8 million, respectively. Orders for the three and nine months ended September 30, 2009 were $46.7 million and $124.1 million, respectively, down from $92.1 million and $294.6 million for the comparable periods in 2008.

The Company realized a net loss of ($14.7) million, or ($1.29) per share for the third quarter, compared with a net loss of ($8.3) million, or ($0.74) per share, for the third quarter of 2008. Third quarter 2009 results include one-time charges of $7.6 million, or ($0.67) per share, which included severance related expense of $2.6 million, or ($0.23) per share, and inventory write-downs related to the strategic decision to cease production of non-critical manufacturing parts and certain machine models of $5.0 million, or ($0.44) per share. In addition to the one-time charges there were lower of cost or market write-downs of $1.1 million, or ($0.10) per share on machine inventory as a result of current market conditions as many manufacturers and distributors discounted prices below cost to reduce inventories.

"Worldwide demand for machine tools remains severely depressed which is reflected in our sales and order numbers for the third quarter and for 2009 to date," said Richard L. Simons, President and Chief Executive Officer. "We are aggressively competing for the limited order opportunities available and remain focused on improving operating efficiencies and increasing cash flow which has positioned Hardinge to effectively compete when industry demand recovers."

In August 2009, the Company announced that it was moving to a more variable cost business model in its Elmira, NY facility, and therefore would begin the process of outsourcing many of the components and subassemblies for machines made in the Elmira facility. The Company also announced that it would close significant sections of the Elmira manufacturing operation involved in non-critical parts production, further reduce the Company's U.S. workforce by approximately 15%, and record severance related expenses of between $1.3 million and $2.0 million and asset write-downs of up to $10 million during the second half of 2009. During the third quarter, the Company recorded one-time charges of $1.6 million for severance and $5.0 million for inventory write-downs related to this initiative. The Company intends to identify certain machinery and equipment related to non-critical parts manufacturing in its Elmira, NY facility as available for sale in the fourth quarter of 2009, and will record an impairment charge at that time, which is not expected to exceed $2.5 million.

"Approximately 120 positions were eliminated in the U.S. and Europe during the third quarter and worldwide staffing will be further reduced by approximately 90 positions during fourth quarter 2009," Mr. Simons continued. "We continue to review every aspect of our cost structure and to make the adjustments necessary to simplify and focus our operations and to maintain our financial strength and flexibility going forward."

The following tables summarize orders and sales by geographical region for the three and nine months ended September 30, 2009 and 2008:

Quarter Ended
September 30,
Orders from                                %
Customers in:           2009      2008    Change
-------------            ----      ----    ------
North America         $11,433   $27,659     (59)%
Europe                 12,891    35,723     (64)%
Asia & Other           22,414    28,767     (22)%
------    ------     ----
$46,738   $92,149     (49)%
-------   -------     ----

Quarter Ended
September 30,
Sales from                                 %
Customers in:           2009      2008    Change
-------------            ----      ----    ------
North America         $15,704   $25,501     (38)%
Europe                 18,581    41,610     (55)%
Asia & Other           15,779    19,503     (19)%
------    ------     ----
$50,064   $86,614     (42)%
-------   -------     ----

Nine Months Ended
September 30,
Orders from                                %
Customers in:           2009      2008    Change
-------------            ----      ----    ------
North America         $34,979   $85,118     (59)%
Europe                 38,238   135,189     (72)%
Asia & Other           50,894    74,319     (32)%
------    ------     ----
$124,111  $294,626     (58)%
--------  --------     ----

Nine Months Ended
September 30,
Sales from                                 %
Customers in:           2009      2008    Change
-------------            ----      ----    ------
North America         $46,373   $84,606     (45)%
Europe                 66,647   123,926     (46)%
Asia & Other           44,420    60,246     (26)%
------    ------     ----
$157,440  $268,778     (41)%
--------  --------     ----

Third quarter and nine month order and sales results were down significantly across all regions compared with the same periods in 2008, consistent with the slowdown in global manufacturing activity. Currency exchange rates had an unfavorable impact on new orders of approximately $0.8 million for the quarter, and $4.1 million for the nine months ended September 30, 2009 compared to the same periods in the prior year. Currency exchange rates had an unfavorable impact on sales of approximately $0.8 million for the quarter, and approximately $8.5 million for the nine months compared to the same periods in 2008.

Gross profit for the quarter was $3.7 million compared to $18.1 million in 2008. The decreased gross profit is primarily due to the $36.6 million reduction in sales for the quarter compared to the same period in 2008. Third quarter gross profit also reflected an inventory write down of $5.0 million resulting from the discontinuance of the production of non-critical manufacturing parts and certain machines in our Elmira, NY facility that was discussed in the Company's second quarter release, as well as $1.1 million related to lower of cost or market write-downs on machines as a result of the current competitive market conditions as many manufacturers and distributors cut prices to reduce inventories.