|
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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New York
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|
16-0470200
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(State or other jurisdiction of incorporation or organization)
|
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(I.R.S. Employer Identification No.)
|
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One Hardinge Drive
Elmira, NY
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14902
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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|
Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
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Emerging growth company
o
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
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PAGE
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||
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Consolidated Balance Sheets at June 30, 2017 and December 31, 2016 (Audited)
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|
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Consolidated Statements of Operations for the three and six months ended June 30, 2017 and 2016
|
|
|
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Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2017 and 2016
|
|
|
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Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016
|
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Certifications
|
|
|
|
|
|
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|
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June 30,
2017 |
|
December 31,
2016 |
||||
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(Unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
26,369
|
|
|
$
|
28,255
|
|
Restricted cash
|
2,509
|
|
|
2,923
|
|
||
Accounts receivable, net
|
55,071
|
|
|
55,573
|
|
||
Inventories, net
|
118,478
|
|
|
107,018
|
|
||
Other current assets
|
11,321
|
|
|
6,926
|
|
||
Total current assets
|
213,748
|
|
|
200,695
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
57,192
|
|
|
56,961
|
|
||
Goodwill
|
6,658
|
|
|
6,579
|
|
||
Other intangible assets, net
|
26,698
|
|
|
26,730
|
|
||
Other non-current assets
|
6,047
|
|
|
6,585
|
|
||
Total non-current assets
|
96,595
|
|
|
96,855
|
|
||
Total assets
|
$
|
310,343
|
|
|
$
|
297,550
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
|
|
||
Notes payable to bank
|
$
|
99
|
|
|
$
|
703
|
|
Accounts payable
|
25,982
|
|
|
24,217
|
|
||
Accrued expenses
|
27,140
|
|
|
25,629
|
|
||
Customer deposits
|
23,063
|
|
|
18,215
|
|
||
Accrued income taxes
|
671
|
|
|
1,160
|
|
||
Current portion of long-term debt
|
4,636
|
|
|
2,923
|
|
||
Total current liabilities
|
81,591
|
|
|
72,847
|
|
||
|
|
|
|
||||
Long-term debt
|
—
|
|
|
2,970
|
|
||
Pension and postretirement liabilities
|
57,635
|
|
|
58,840
|
|
||
Deferred income taxes
|
4,343
|
|
|
3,800
|
|
||
Other liabilities
|
1,669
|
|
|
3,152
|
|
||
Total non-current liabilities
|
63,647
|
|
|
68,762
|
|
||
Commitments and contingencies (see Note 10)
|
|
|
|
|
|
||
Common stock ($0.01 par value, 20,000,000 authorized; shares issued 12,943,789 and 12,903,037)
|
129
|
|
|
129
|
|
||
Additional paid-in capital
|
121,489
|
|
|
121,015
|
|
||
Retained earnings
|
89,510
|
|
|
89,557
|
|
||
Treasury shares (at cost, 0 and 9,243)
|
—
|
|
|
(104
|
)
|
||
Accumulated other comprehensive loss
|
(46,023
|
)
|
|
(54,656
|
)
|
||
Total shareholders’ equity
|
165,105
|
|
|
155,941
|
|
||
Total liabilities and shareholders’ equity
|
$
|
310,343
|
|
|
$
|
297,550
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Sales
|
$
|
78,197
|
|
|
$
|
70,186
|
|
|
$
|
142,754
|
|
|
$
|
138,007
|
|
Cost of sales
|
51,568
|
|
|
46,633
|
|
|
94,738
|
|
|
91,711
|
|
||||
Gross profit
|
26,629
|
|
|
23,553
|
|
|
48,016
|
|
|
46,296
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
20,081
|
|
|
19,637
|
|
|
38,103
|
|
|
40,230
|
|
||||
Research & development
|
3,777
|
|
|
3,369
|
|
|
7,335
|
|
|
6,656
|
|
||||
Restructuring
|
542
|
|
|
226
|
|
|
1,978
|
|
|
426
|
|
||||
Other expense (income), net
|
37
|
|
|
20
|
|
|
192
|
|
|
(72
|
)
|
||||
Income (loss) from operations
|
2,192
|
|
|
301
|
|
|
408
|
|
|
(944
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
104
|
|
|
132
|
|
|
210
|
|
|
285
|
|
||||
Interest income
|
(38
|
)
|
|
(69
|
)
|
|
(79
|
)
|
|
(136
|
)
|
||||
Income (loss) before income taxes
|
2,126
|
|
|
238
|
|
|
277
|
|
|
(1,093
|
)
|
||||
Income tax (benefit) expense
|
(396
|
)
|
|
93
|
|
|
(198
|
)
|
|
8
|
|
||||
Net Income (loss)
|
$
|
2,522
|
|
|
$
|
145
|
|
|
$
|
475
|
|
|
$
|
(1,101
|
)
|
|
|
|
|
|
|
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|
||||||||
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|
|
|
|
||||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings (loss) per share:
|
$
|
0.20
|
|
|
$
|
0.01
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share:
|
$
|
0.20
|
|
|
$
|
0.01
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share:
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Net income (loss)
|
$
|
2,522
|
|
|
$
|
145
|
|
|
$
|
475
|
|
|
$
|
(1,101
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
4,675
|
|
|
(2,840
|
)
|
|
8,933
|
|
|
899
|
|
||||
Retirement plans related adjustments
|
(527
|
)
|
|
1,575
|
|
|
(251
|
)
|
|
1,302
|
|
||||
Unrealized (loss) gain on cash flow hedges
|
(299
|
)
|
|
(33
|
)
|
|
(68
|
)
|
|
132
|
|
||||
Other comprehensive income (loss) before tax
|
3,849
|
|
|
(1,298
|
)
|
|
8,614
|
|
|
2,333
|
|
||||
Income tax (benefit) expense
|
(438
|
)
|
|
282
|
|
|
(19
|
)
|
|
105
|
|
||||
Other comprehensive income (loss), net of tax
|
4,287
|
|
|
(1,580
|
)
|
|
8,633
|
|
|
2,228
|
|
||||
Total comprehensive income (loss)
|
$
|
6,809
|
|
|
$
|
(1,435
|
)
|
|
$
|
9,108
|
|
|
$
|
1,127
|
|
|
Six Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
|
(Unaudited)
|
||||||
Operating activities
|
|
|
|
|
|
||
Net income (loss)
|
$
|
475
|
|
|
$
|
(1,101
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
|
||
Impairment
|
1,401
|
|
|
—
|
|
||
Depreciation and amortization
|
4,411
|
|
|
4,098
|
|
||
Debt issuance costs amortization
|
65
|
|
|
66
|
|
||
Deferred income taxes
|
132
|
|
|
(119
|
)
|
||
Gain on sale of assets
|
(16
|
)
|
|
(4
|
)
|
||
Unrealized foreign currency transaction gain
|
(819
|
)
|
|
(116
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
2,261
|
|
|
11,826
|
|
||
Restricted cash
|
499
|
|
|
(331
|
)
|
||
Inventories
|
(8,251
|
)
|
|
(7,720
|
)
|
||
Other assets
|
(2,893
|
)
|
|
(1,330
|
)
|
||
Accounts payable
|
745
|
|
|
(2,170
|
)
|
||
Customer deposits
|
4,132
|
|
|
(3,886
|
)
|
||
Accrued expenses
|
(2,381
|
)
|
|
(5,211
|
)
|
||
Accrued pension and postretirement liabilities
|
(19
|
)
|
|
(41
|
)
|
||
Net cash used in operating activities
|
(258
|
)
|
|
(6,039
|
)
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
||
Capital expenditures
|
(968
|
)
|
|
(992
|
)
|
||
Proceeds from sales of assets
|
16
|
|
|
37
|
|
||
Net cash used in investing activities
|
(952
|
)
|
|
(955
|
)
|
||
|
|
|
|
||||
Financing activities
|
|
|
|
|
|
||
Proceeds from short-term notes payable to bank
|
12,418
|
|
|
28,871
|
|
||
Repayments of short-term notes payable to bank
|
(13,062
|
)
|
|
(28,643
|
)
|
||
Repayments of long-term debt
|
(1,456
|
)
|
|
(2,271
|
)
|
||
Dividends paid
|
(516
|
)
|
|
(536
|
)
|
||
Net cash used in financing activities
|
(2,616
|
)
|
|
(2,579
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
1,940
|
|
|
167
|
|
||
Net decrease in cash
|
(1,886
|
)
|
|
(9,406
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
28,255
|
|
|
32,774
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
26,369
|
|
|
$
|
23,368
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Level of Fair Value Hierarchy
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
26,369
|
|
|
$
|
26,369
|
|
|
$
|
28,255
|
|
|
$
|
28,255
|
|
|
Level 1
|
Restricted cash
|
2,509
|
|
|
2,509
|
|
|
2,923
|
|
|
2,923
|
|
|
Level 1
|
||||
Foreign currency forward contracts
|
373
|
|
|
373
|
|
|
308
|
|
|
308
|
|
|
Level 2
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Notes payable to bank
|
99
|
|
|
99
|
|
|
703
|
|
|
703
|
|
|
Level 2
|
||||
Variable interest rate debt
|
4,696
|
|
|
4,696
|
|
|
5,986
|
|
|
5,986
|
|
|
Level 2
|
||||
Foreign currency forward contracts
|
725
|
|
|
725
|
|
|
566
|
|
|
566
|
|
|
Level 2
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Raw materials and purchased components
|
$
|
32,867
|
|
|
$
|
33,822
|
|
Work-in-process
|
37,624
|
|
|
31,799
|
|
||
Finished products
|
47,987
|
|
|
41,397
|
|
||
Inventories, net
|
$
|
118,478
|
|
|
$
|
107,018
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Foreign currency forwards designated as hedges:
|
|
|
|
|
|
||
Other current assets
|
$
|
196
|
|
|
$
|
153
|
|
Accrued expenses
|
(370
|
)
|
|
(264
|
)
|
||
Foreign currency forwards not designated as hedges:
|
|
|
|
|
|
||
Other current assets
|
177
|
|
|
155
|
|
||
Accrued expenses
|
(355
|
)
|
|
(302
|
)
|
||
Foreign currency forwards, net
|
$
|
(352
|
)
|
|
$
|
(258
|
)
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Land, buildings and improvements
|
$
|
84,651
|
|
|
$
|
81,311
|
|
Machinery, equipment and fixtures
|
77,541
|
|
|
75,177
|
|
||
Office furniture, equipment and vehicles
|
23,204
|
|
|
22,471
|
|
||
Construction in progress
|
212
|
|
|
272
|
|
||
|
185,608
|
|
|
179,231
|
|
||
Accumulated depreciation
|
(128,416
|
)
|
|
(122,270
|
)
|
||
Property, plant and equipment, net
|
$
|
57,192
|
|
|
$
|
56,961
|
|
|
MMS
|
|
ATA
|
|
Total
|
||||||
Goodwill
|
$
|
32,434
|
|
|
$
|
6,579
|
|
|
$
|
39,013
|
|
Accumulated impairment losses
|
(32,434
|
)
|
|
—
|
|
|
(32,434
|
)
|
|||
Balance at December 31, 2016
|
—
|
|
|
6,579
|
|
|
6,579
|
|
|||
|
|
|
|
|
|
||||||
Goodwill
|
32,434
|
|
|
6,579
|
|
|
39,013
|
|
|||
Currency translation adjustments
|
—
|
|
|
79
|
|
|
79
|
|
|||
Accumulated impairment losses
|
(32,434
|
)
|
|
—
|
|
|
(32,434
|
)
|
|||
Balance at June 30, 2017
|
$
|
—
|
|
|
$
|
6,658
|
|
|
$
|
6,658
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Gross amortizable intangible assets:
|
|
|
|
|
|
||
Technical know-how
|
$
|
12,985
|
|
|
$
|
12,944
|
|
Customer lists
|
9,016
|
|
|
8,981
|
|
||
Land rights
|
2,559
|
|
|
2,498
|
|
||
Patents, trade names, drawings, and other
|
4,391
|
|
|
4,356
|
|
||
Total gross amortizable intangible assets
|
28,951
|
|
|
28,779
|
|
||
|
|
|
|
||||
Accumulated amortization:
|
|
|
|
|
|
||
Technical know-how
|
(7,758
|
)
|
|
(7,438
|
)
|
||
Customer lists
|
(1,976
|
)
|
|
(1,744
|
)
|
||
Land rights
|
(337
|
)
|
|
(304
|
)
|
||
Patents, trade names, drawings, and other
|
(3,587
|
)
|
|
(3,490
|
)
|
||
Total accumulated amortization
|
(13,658
|
)
|
|
(12,976
|
)
|
||
Amortizable intangible assets, net
|
15,293
|
|
|
15,803
|
|
||
|
|
|
|
||||
Indefinite lived intangible assets:
|
|
|
|
|
|
||
Trade names
|
11,405
|
|
|
10,927
|
|
||
|
|
|
|
||||
Intangible assets other than goodwill, net
|
$
|
26,698
|
|
|
$
|
26,730
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amortization expense
|
$
|
312
|
|
|
$
|
320
|
|
|
$
|
624
|
|
|
$
|
640
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance at the beginning of period
|
$
|
3,266
|
|
|
$
|
3,521
|
|
|
$
|
3,556
|
|
|
$
|
3,802
|
|
Warranties issued
|
473
|
|
|
709
|
|
|
845
|
|
|
1,081
|
|
||||
Warranty settlement costs
|
(479
|
)
|
|
(557
|
)
|
|
(852
|
)
|
|
(1,147
|
)
|
||||
Changes in accruals for pre-existing warranties
|
(36
|
)
|
|
62
|
|
|
(381
|
)
|
|
64
|
|
||||
Currency translation adjustments
|
100
|
|
|
89
|
|
|
156
|
|
|
24
|
|
||||
Balance at the end of period
|
$
|
3,324
|
|
|
$
|
3,824
|
|
|
$
|
3,324
|
|
|
$
|
3,824
|
|
|
Total Costs Expected to be Incurred
|
|
Cost Recognized for Three Months Ended June 30, 2017
|
|
Cost Recognized for Six Months Ended June 30, 2017 (Cumulative costs recognized to date)
|
||||||
Restructuring:
|
|
|
|
|
|
||||||
Employee termination costs
|
$
|
1,010
|
|
|
$
|
393
|
|
|
$
|
393
|
|
Inventory Impairment
|
1,401
|
|
|
—
|
|
|
1,401
|
|
|||
Facility related costs
|
1,373
|
|
|
105
|
|
|
115
|
|
|||
Other related costs
|
492
|
|
|
44
|
|
|
69
|
|
|||
Total Restructuring Activity
|
$
|
4,276
|
|
|
$
|
542
|
|
|
$
|
1,978
|
|
Balance at December 31, 2016
|
$
|
—
|
|
Restructuring charges:
|
|
||
Employee termination costs
|
393
|
|
|
Inventory Impairment
|
1,401
|
|
|
Facility related costs
|
115
|
|
|
Other related costs
|
69
|
|
|
Total restructuring charges for the period
|
1,978
|
|
|
|
|
||
Cash expenditures
|
(373
|
)
|
|
Other adjustments to accrual
|
—
|
|
|
Foreign currency translation adjustment
|
80
|
|
|
Balance at June 30, 2017
|
$
|
1,685
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||||
|
Three Months Ended
June 30, |
|
Three Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
487
|
|
|
$
|
569
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
1,504
|
|
|
1,676
|
|
|
18
|
|
|
19
|
|
||||
Expected return on plan assets
|
(2,126
|
)
|
|
(2,328
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(78
|
)
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of transition asset
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss (gain)
|
935
|
|
|
957
|
|
|
(11
|
)
|
|
(14
|
)
|
||||
Settlement loss (gain)
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic cost
|
$
|
752
|
|
|
$
|
731
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
||||||||
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||||
|
Six Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
974
|
|
|
$
|
1,128
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Interest cost
|
3,002
|
|
|
3,348
|
|
|
36
|
|
|
38
|
|
||||
Expected return on plan assets
|
(4,236
|
)
|
|
(4,637
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(154
|
)
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of transition asset
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss (gain)
|
1,867
|
|
|
1,900
|
|
|
(22
|
)
|
|
(28
|
)
|
||||
Settlement loss (gain)
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic cost
|
$
|
1,483
|
|
|
$
|
1,456
|
|
|
$
|
20
|
|
|
$
|
16
|
|
|
Three Months ended June 30, 2017
|
Expected volatility
|
38.50%
|
Expected dividend yield
|
0.66%
|
Risk free rate
|
1.32% - 1.45%
|
Expected term (in years)
|
6.0 - 6.5
|
Weighted average grant date fair value
|
$4.48
|
Weighted average exercise price
|
$12.04
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
2017
|
|
2016
|
||||||||
Stock Options
|
$
|
31
|
|
|
$
|
—
|
|
$
|
31
|
|
|
$
|
—
|
|
Restricted stock/unit awards (“RSA”)
|
66
|
|
|
58
|
|
107
|
|
|
123
|
|
||||
Performance share incentives (“PSI”)
|
32
|
|
|
—
|
|
39
|
|
|
—
|
|
||||
Total stock based compensation
|
$
|
129
|
|
|
$
|
58
|
|
$
|
177
|
|
|
$
|
123
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||||||||||||||||||
|
Stock Options
|
|
RSAs
|
|
PSIs
|
|
Stock Options
|
|
RSAs
|
|
PSIs
|
||||||||||||
Unrecognized compensation cost (in thousands)
|
$
|
976
|
|
|
$
|
464
|
|
|
$
|
904
|
|
|
$
|
—
|
|
|
$
|
113
|
|
|
$
|
520
|
|
Expected weighted-average recognition period for unrecognized compensation cost (in years)
|
2.67
|
|
|
1.65
|
|
|
1.51
|
|
|
N/A
|
|
|
0.92
|
|
|
0.97
|
|
|
Three Months ended June 30, 2017
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
19,324
|
|
|
$
|
(69,816
|
)
|
|
$
|
182
|
|
|
$
|
(50,310
|
)
|
Other comprehensive income (loss) before reclassifications
|
4,675
|
|
|
(1,403
|
)
|
|
(261
|
)
|
|
3,011
|
|
||||
Less: (Loss) income reclassified from AOCI
|
—
|
|
|
(876
|
)
|
|
38
|
|
|
(838
|
)
|
||||
Net other comprehensive income (loss)
|
4,675
|
|
|
(527
|
)
|
|
(299
|
)
|
|
3,849
|
|
||||
Income taxes
|
(229
|
)
|
|
(155
|
)
|
|
(54
|
)
|
|
(438
|
)
|
||||
Ending balance, net of tax
|
$
|
24,228
|
|
|
$
|
(70,188
|
)
|
|
$
|
(63
|
)
|
|
$
|
(46,023
|
)
|
|
Three Months Ended June 30, 2016
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
24,312
|
|
|
$
|
(69,221
|
)
|
|
$
|
4
|
|
|
$
|
(44,905
|
)
|
Other comprehensive (loss) income before
reclassifications |
(2,840
|
)
|
|
775
|
|
|
(96
|
)
|
|
(2,161
|
)
|
||||
Less: (loss) income reclassified from AOCI
|
—
|
|
|
(800
|
)
|
|
(63
|
)
|
|
(863
|
)
|
||||
Net other comprehensive (loss) income
|
(2,840
|
)
|
|
1,575
|
|
|
(33
|
)
|
|
(1,298
|
)
|
||||
Income taxes
|
113
|
|
|
169
|
|
|
—
|
|
|
282
|
|
||||
Ending balance, net of tax
|
$
|
21,359
|
|
|
$
|
(67,815
|
)
|
|
$
|
(29
|
)
|
|
$
|
(46,485
|
)
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
15,483
|
|
|
$
|
(70,102
|
)
|
|
$
|
(37
|
)
|
|
$
|
(54,656
|
)
|
Other comprehensive income (loss) before reclassifications
|
8,933
|
|
|
(1,972
|
)
|
|
(179
|
)
|
|
6,782
|
|
||||
Less: (loss) income reclassified from AOCI
|
—
|
|
|
(1,721
|
)
|
|
(111
|
)
|
|
(1,832
|
)
|
||||
Net other comprehensive income (loss)
|
8,933
|
|
|
(251
|
)
|
|
(68
|
)
|
|
8,614
|
|
||||
Income taxes
|
188
|
|
|
(165
|
)
|
|
(42
|
)
|
|
(19
|
)
|
||||
Ending balance, net of tax
|
$
|
24,228
|
|
|
$
|
(70,188
|
)
|
|
$
|
(63
|
)
|
|
$
|
(46,023
|
)
|
|
Six Months Ended June 30, 2016
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
20,529
|
|
|
$
|
(69,100
|
)
|
|
$
|
(142
|
)
|
|
$
|
(48,713
|
)
|
Other comprehensive income (loss) before reclassifications
|
899
|
|
|
(287
|
)
|
|
116
|
|
|
728
|
|
||||
Less: (loss) income reclassified from AOCI
|
—
|
|
|
(1,589
|
)
|
|
(16
|
)
|
|
(1,605
|
)
|
||||
Net other comprehensive income (loss)
|
899
|
|
|
1,302
|
|
|
132
|
|
|
2,333
|
|
||||
Income taxes
|
69
|
|
|
17
|
|
|
19
|
|
|
105
|
|
||||
Ending balance, net of tax
|
$
|
21,359
|
|
|
$
|
(67,815
|
)
|
|
$
|
(29
|
)
|
|
$
|
(46,485
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Affected line item on the Consolidated Statements of Operations
|
||||||||||||
Details of AOCI components
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|||||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$
|
18
|
|
|
$
|
(53
|
)
|
|
$
|
(120
|
)
|
|
$
|
23
|
|
|
Sales
|
|
|
20
|
|
|
(10
|
)
|
|
9
|
|
|
(39
|
)
|
|
Other expense (income), net
|
||||
|
|
38
|
|
|
(63
|
)
|
|
(111
|
)
|
|
(16
|
)
|
|
Total before tax
|
||||
|
|
15
|
|
|
(10
|
)
|
|
(9
|
)
|
|
(3
|
)
|
|
Income taxes
|
||||
|
|
$
|
53
|
|
|
$
|
(73
|
)
|
|
$
|
(120
|
)
|
|
$
|
(19
|
)
|
|
Net of tax
|
Retirement plans related adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of prior service credit
|
|
$
|
78
|
|
|
$
|
64
|
|
|
$
|
154
|
|
|
$
|
127
|
|
|
(a)
|
Amortization of transition asset
|
|
—
|
|
|
79
|
|
|
—
|
|
|
156
|
|
|
(a)
|
||||
Amortization of actuarial loss
|
|
(924
|
)
|
|
(943
|
)
|
|
(1,845
|
)
|
|
(1,872
|
)
|
|
(a)
|
||||
Settlement loss
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(a)
|
||||
|
|
(876
|
)
|
|
(800
|
)
|
|
(1,721
|
)
|
|
(1,589
|
)
|
|
Total before tax
|
||||
|
|
96
|
|
|
85
|
|
|
184
|
|
|
168
|
|
|
Income taxes
|
||||
|
|
$
|
(780
|
)
|
|
$
|
(715
|
)
|
|
$
|
(1,537
|
)
|
|
$
|
(1,421
|
)
|
|
Net of tax
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator for basic and diluted loss per share:
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings (loss) applicable to common shareholders
|
$
|
2,522
|
|
|
$
|
145
|
|
|
$
|
475
|
|
|
$
|
(1,101
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator for basic and diluted loss per share:
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic and diluted loss per share — weighted average shares
|
12,894
|
|
|
12,812
|
|
|
12,887
|
|
|
12,804
|
|
||||
Assumed exercise of stock options
|
1
|
|
|
22
|
|
|
1
|
|
|
—
|
|
||||
Assumed satisfaction of restricted stock conditions
|
37
|
|
|
67
|
|
|
33
|
|
|
—
|
|
||||
Denominator for diluted earnings per share — adjusted weighted average shares
|
12,932
|
|
|
12,901
|
|
|
12,921
|
|
|
12,804
|
|
|
Three Months ended June 30, 2017
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
62,016
|
|
|
$
|
16,302
|
|
|
$
|
(121
|
)
|
|
$
|
78,197
|
|
Depreciation and amortization
|
1,429
|
|
|
495
|
|
|
|
|
1,924
|
|
|||||
Segment income
|
1,928
|
|
|
2,745
|
|
|
|
|
|
4,673
|
|
||||
Capital expenditures
|
433
|
|
|
55
|
|
|
|
|
488
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
54,359
|
|
|
$
|
15,883
|
|
|
$
|
(56
|
)
|
|
$
|
70,186
|
|
Depreciation and amortization
|
1,494
|
|
|
526
|
|
|
|
|
2,020
|
|
|||||
Segment income
|
276
|
|
|
1,641
|
|
|
|
|
|
1,917
|
|
||||
Capital expenditures
|
394
|
|
|
163
|
|
|
|
|
557
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
110,848
|
|
|
$
|
32,161
|
|
|
$
|
(255
|
)
|
|
$
|
142,754
|
|
Depreciation and amortization
|
2,829
|
|
|
1,003
|
|
|
0
|
|
|
3,832
|
|
||||
Segment (loss) income
|
(741
|
)
|
|
5,031
|
|
|
|
|
|
4,290
|
|
||||
Capital expenditures
|
768
|
|
|
200
|
|
|
|
|
|
968
|
|
||||
Segment assets
(1)
|
233,613
|
|
|
46,153
|
|
|
|
|
|
279,766
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
106,630
|
|
|
$
|
31,504
|
|
|
$
|
(127
|
)
|
|
$
|
138,007
|
|
Depreciation and amortization
|
2,921
|
|
|
1,064
|
|
|
|
|
|
3,985
|
|
||||
Segment (loss) income
|
(880
|
)
|
|
3,495
|
|
|
|
|
|
2,615
|
|
||||
Capital expenditures
|
685
|
|
|
307
|
|
|
|
|
|
992
|
|
||||
Segment assets
(1)
|
222,098
|
|
|
48,440
|
|
|
|
|
|
270,538
|
|
(1)
|
Segment assets primarily consist of restricted cash, accounts receivable, inventories, prepaid and other assets, property, plant and equipment, and intangible assets. Unallocated assets primarily include, cash and cash equivalents, corporate property, plant and equipment, deferred income taxes, and other non-current assets.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment income
|
$
|
4,673
|
|
|
$
|
1,917
|
|
|
$
|
4,290
|
|
|
$
|
2,615
|
|
Unallocated corporate expense
|
(2,481
|
)
|
|
(1,616
|
)
|
|
(3,882
|
)
|
|
(3,559
|
)
|
||||
Interest expense, net
|
(66
|
)
|
|
(63
|
)
|
|
(131
|
)
|
|
(149
|
)
|
||||
Income (loss) before income taxes
|
$
|
2,126
|
|
|
$
|
238
|
|
|
$
|
277
|
|
|
$
|
(1,093
|
)
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Total segment assets
|
$
|
279,766
|
|
|
$
|
265,279
|
|
Unallocated assets
|
30,577
|
|
|
32,271
|
|
||
Total assets
|
$
|
310,343
|
|
|
$
|
297,550
|
|
|
|
Three Months Ended
June 30, |
|
$
Change
|
|
%
Change |
|
Six Months Ended
June 30, |
|
$
Change |
|
%
Change |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
|
|
||||||||||||||||||
Sales
|
|
$
|
78,197
|
|
|
$
|
70,186
|
|
|
$
|
8,011
|
|
|
11
|
%
|
|
$
|
142,754
|
|
|
$
|
138,007
|
|
|
$
|
4,747
|
|
|
3
|
%
|
Gross profit
|
|
26,629
|
|
|
23,553
|
|
|
3,076
|
|
|
13
|
%
|
|
48,016
|
|
|
46,296
|
|
|
1,720
|
|
|
4
|
%
|
||||||
% of sales
|
|
34.1
|
%
|
|
33.6
|
%
|
|
0.5
|
|
pts.
|
|
33.6
|
%
|
|
33.5
|
%
|
|
0.1
|
|
pts.
|
||||||||||
Selling, general and administrative expenses
|
|
20,081
|
|
|
19,637
|
|
|
444
|
|
|
2
|
%
|
|
38,103
|
|
|
40,230
|
|
|
(2,127
|
)
|
|
(5
|
)%
|
||||||
% of sales
|
|
25.7
|
%
|
|
28.0
|
%
|
|
(2.3
|
)
|
pts.
|
|
26.7
|
%
|
|
29.2
|
%
|
|
(2.5
|
)
|
pts.
|
||||||||||
Research & development
|
|
3,777
|
|
|
3,369
|
|
|
408
|
|
|
12
|
%
|
|
7,335
|
|
|
6,656
|
|
|
679
|
|
|
10
|
%
|
||||||
Restructuring
|
|
542
|
|
|
226
|
|
|
316
|
|
|
140
|
%
|
|
1,978
|
|
|
426
|
|
|
1,552
|
|
|
364
|
%
|
||||||
Other expense (income), net
|
|
37
|
|
|
20
|
|
|
17
|
|
|
85
|
%
|
|
192
|
|
|
(72
|
)
|
|
264
|
|
|
(367
|
)%
|
||||||
Income (loss) from operations
|
|
2,192
|
|
|
301
|
|
|
1,891
|
|
|
628
|
%
|
|
408
|
|
|
(944
|
)
|
|
1,352
|
|
|
(143
|
)%
|
||||||
% of sales
|
|
2.8
|
%
|
|
0.4
|
%
|
|
2.4
|
|
pts.
|
|
0.3
|
%
|
|
(0.7
|
)%
|
|
1.0
|
|
pts.
|
||||||||||
Interest expense, net
|
|
66
|
|
|
63
|
|
|
3
|
|
|
5
|
%
|
|
131
|
|
|
149
|
|
|
(18
|
)
|
|
(12
|
)%
|
||||||
Income (loss) before income taxes
|
|
2,126
|
|
|
238
|
|
|
1,888
|
|
|
793
|
%
|
|
277
|
|
|
(1,093
|
)
|
|
1,370
|
|
|
(125
|
)%
|
||||||
Income tax (benefit) expense
|
|
(396
|
)
|
|
93
|
|
|
(489
|
)
|
|
(526
|
)%
|
|
(198
|
)
|
|
8
|
|
|
(206
|
)
|
|
(2,575
|
)%
|
||||||
Net income (loss)
|
|
$
|
2,522
|
|
|
$
|
145
|
|
|
$
|
2,377
|
|
|
1,639
|
%
|
|
$
|
475
|
|
|
$
|
(1,101
|
)
|
|
$
|
1,576
|
|
|
(143
|
)%
|
% of sales
|
|
3.2
|
%
|
|
0.2
|
%
|
|
3.0
|
|
pts.
|
|
0.3
|
%
|
|
(0.8
|
)%
|
|
1.1
|
|
pts.
|
|
Three Months Ended
June 30, |
|
|
|
|
|
Six Months Ended
June 30, |
|
|
|
|
||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Sales
|
$
|
62,016
|
|
|
$
|
54,359
|
|
|
$
|
7,657
|
|
|
14
|
%
|
|
$
|
110,848
|
|
|
$
|
106,630
|
|
|
$
|
4,218
|
|
|
4
|
%
|
Segment income (loss)
|
1,928
|
|
|
276
|
|
|
1,652
|
|
|
599
|
%
|
|
(741
|
)
|
|
(880
|
)
|
|
139
|
|
|
16
|
%
|
|
Three Months Ended
June 30, |
|
|
|
|
|
Six Months Ended
June 30, |
|
|
|
|
||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Sales
|
$
|
16,302
|
|
|
$
|
15,883
|
|
|
$
|
419
|
|
|
3
|
%
|
|
$
|
32,161
|
|
|
$
|
31,504
|
|
|
$
|
657
|
|
|
2
|
%
|
Segment income
|
2,745
|
|
|
1,641
|
|
|
1,104
|
|
|
67
|
%
|
|
5,031
|
|
|
3,495
|
|
|
1,536
|
|
|
44
|
%
|
|
Three Months ended June 30, 2017
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||||||||||
Sales
|
$
|
62,016
|
|
|
$
|
16,302
|
|
|
$
|
(121
|
)
|
|
$
|
78,197
|
|
|
$
|
54,359
|
|
|
$
|
15,883
|
|
|
$
|
(56
|
)
|
|
$
|
70,186
|
|
Segment income
|
1,928
|
|
|
2,745
|
|
|
|
|
4,673
|
|
|
276
|
|
|
1,641
|
|
|
|
|
1,917
|
|
||||||||||
Unallocated corporate
expense
|
|
|
|
|
|
|
|
|
|
(2,481
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,616
|
)
|
||||||||
Interest expense, net
|
|
|
|
|
|
|
|
|
|
(66
|
)
|
|
|
|
|
|
|
|
|
|
|
(63
|
)
|
||||||||
Other unallocated
expense
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
Income before
income taxes
|
|
|
|
|
|
|
|
|
|
$
|
2,126
|
|
|
|
|
|
|
|
|
$
|
238
|
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||||||||||
Sales
|
$
|
110,848
|
|
|
$
|
32,161
|
|
|
$
|
(255
|
)
|
|
$
|
142,754
|
|
|
$
|
106,630
|
|
|
$
|
31,504
|
|
|
$
|
(127
|
)
|
|
$
|
138,007
|
|
Segment (loss) income
|
(741
|
)
|
|
5,031
|
|
|
|
|
4,290
|
|
|
(880
|
)
|
|
3,495
|
|
|
|
|
2,615
|
|
||||||||||
Unallocated corporate
expense
|
|
|
|
|
|
|
|
|
|
(3,882
|
)
|
|
|
|
|
|
|
|
|
|
|
(3,559
|
)
|
||||||||
Interest expense, net
|
|
|
|
|
|
|
|
|
|
(131
|
)
|
|
|
|
|
|
|
|
|
|
|
(149
|
)
|
||||||||
Other unallocated
expense
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
(Loss) income before
income taxes
|
|
|
|
|
|
|
|
|
|
$
|
277
|
|
|
|
|
|
|
|
|
$
|
(1,093
|
)
|
|
|
Six Months Ended
June 30, |
|
||||||
|
|
2017
|
|
2016
|
|
||||
Net cash used in operating activities
|
|
$
|
(258
|
)
|
|
$
|
(6,039
|
)
|
|
Net cash used in investing activities
|
|
$
|
(952
|
)
|
|
$
|
(955
|
)
|
|
Net cash used in financing activities
|
|
$
|
(2,616
|
)
|
|
$
|
(2,579
|
)
|
|
|
|
HARDINGE INC.
|
|
|
|
Registrant
|
|
|
|
||
August 3, 2017
|
|
By:
|
/s/ Charles P. Dougherty
|
Date
|
|
|
Charles P. Dougherty
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
August 3, 2017
|
|
By:
|
/s/ Douglas J. Malone
|
Date
|
|
|
Douglas J. Malone
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
1.
|
The name of the Corporation is Hardinge Inc.
|
2.
|
The purposes for which it is to be formed are to acquire, buy, purchase, lease, or otherwise equip, maintain, and operate a general machine shop, to design and manufacture tools, machinery, boilers, engines, and all things made wholly or partly from metals, to do repairing, welding, brazing, stamping, and cutting and electrical work of all kinds, to engage in all kinds of mechanical and electrical engineering and manufacturing business; to apply for, acquire, buy, lease, sell, assign, pledge or otherwise acquire or dispose of letters patent issued by the United States or by any foreign country; and to acquire by purchase or otherwise, and to sell, assign, or pledge or license territorial rights authorizing the manufacture of patent articles, to acquire by purchase or otherwise licenses, privileges, inventions, trade-marks and trade-names used in connection with any article that this Corporation has the right to manufacture, buy or sell; and to grant licenses under letters patent of the United States or any foreign country to purchase, lease or otherwise acquire and to sell, mortgage or lease real property, whether improved or unimproved, or any interest therein, and to any amount, in the State of New York, or any state or territory of the United States or any foreign country; and to conduct and carry on its business or any branch thereof in any state or territory of the United States or in any foreign country, in conformity with the laws of said state, territory or foreign country; and to have and maintain in any said state, territory or foreign country a business office, plant or store; and to do and perform all and everything which may be necessary, advisable or suitable and proper for the conduct of business of said Corporation and for the purpose of carrying out the objects heretofore expressed, and to exercise all implied powers and rights in the conduct of the business which the Corporation may possess.
|
3.
|
The total number of shares which the Corporation may henceforth have is 22,000,000, all of which are to have a par value of $0.01 each, which shares shall be classified as follows:
|
4.
|
The relative voting, dividend, liquidation and other rights, preferences and limitations of the shares of each class are as follows:
|
I.
|
The Preferred Stock may be issued from time to time in one or more series, each such series to have the number of shares and designation, and the shares of each such series to have such relative rights, preferences or limitations, as the Board of Directors, subject to the limitations prescribed by law or provided herein, may from time to time fix, before issuance, by delivering an appropriate certificate of amendment to the Department of State pursuant to the Business Corporation Law of the State of New York. The authority of the Board of Directors with respect to each series shall include, but not be limited to, the fixing of the following:
|
(a)
|
The number of shares to constitute the series and the distinctive designation thereof;
|
(b)
|
The dividend rate on the shares of the series; whether dividends shall be cumulative, and, if so, from what date or dates;
|
(c)
|
Whether or not the shares of the series shall be redeemable and, if redeemable, the terms upon which the shares of the series may be redeemed and the premium, if any, over and above the par value thereof and any dividends accrued thereon which the shares of the series shall be entitled to receive upon the redemption thereof;
|
(d)
|
Whether or not the shares of the series shall be subject to the operation of a retirement or sinking fund to be applied to the purchase or redemption of such shares for retirement and, if such retirement or sinking fund be established, the annual amount thereof and the terms and provisions relative to the operation thereof;
|
(e)
|
Whether or not the shares of the series shall be convertible into shares of any class or classes of stock of the Corporation, with or without par value, or of any other series of the same class and, if convertible, the conversion price or prices or the rate at which such conversion may be made and the method, if any, of adjusting the same;
|
(f)
|
The rights of the shares of the series in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Corporation;
|
(g)
|
The restrictions, if any, on the payment of dividends upon, and the making of the distributions to any class of stock ranking junior to the shares of the series, and the restrictions, if any, on the purchase or redemption of the shares of any such junior class;
|
(h)
|
Whether the series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; and
|
(i)
|
Any other relative rights, preferences and limitations of the series.
|
II.
|
Holders of shares of Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, dividends at the rates fixed by the Board of Directors for the respective series, before any dividends shall be declared and paid, or set apart for payment, on any other class of stock of the Corporation ranking junior to the Preferred Stock either as to dividends or assets, with respect to the same dividend period.
|
III.
|
Whenever, at any time, dividends on the then outstanding Preferred Stock as may be required by the terms of the certificate creating the series representing the shares outstanding shall have been paid or declared and set apart for payment on the then outstanding Preferred Stock and after complying with all the provisions with respect to any retirement or sinking fund or funds for any series of Preferred Stock, the Board of Directors may, subject to the provisions of any certificate creating any series of Preferred Stock with respect to the payment of dividends on any other class or classes of stock, declare and pay dividends on the Common Stock, and the Preferred Stock shall not be entitled to share therein.
|
IV.
|
Upon any liquidation, dissolution or winding-up of the Corporation, after payment, if any is required, shall have been made in full to the Preferred Stock as provided in any certificate creating any series thereof, but not prior thereto, the Common Stock shall, subject to the respective terms and provisions, if any, of any such certificate, be entitled to receive any and all assets remaining to be paid or distributed, and the Preferred Stock shall not be entitled to share therein.
|
V.
|
No holder of Common Stock or any series of Preferred Stock shall, as such holder, have any preemptive or preferential right of subscription to any stock of any class of the Corporation or to any obligations convertible into any such stock or to any right of subscription to, or to any warrant or option for, the purchase of any stock, other than such, if any, as the Board of Directors of the Corporation in its discretion may determine from time to time.
|
VI.
|
The holders of the Common Stock shall have the right to vote on all questions to the exclusion of all other classes of stock, except as by law expressly provided or as otherwise expressly provided with respect to the holders of any other class or classes of stock.
|
VII.
|
Series B Preferred Stock
: The designation and amount, relative rights, preferences and limitations of the shares of Series B Preferred Stock, par value $0.01 per share, as fixed by the Board of Directors of the Corporation, are as follows:
|
1.
|
The office of the Corporation shall be located in the County of Chemung, New York, and the address to which the Secretary of State shall mail a copy of process in any action or proceeding against the Corporation, which may be served upon him, is P.O. Box 1507, Elmira, New York 14902.
|
2.
|
The duration of the Corporation shall be perpetual.
|
3.
|
Subject to the other provisions of this Certificate of Incorporation, the business of the Corporation shall be managed under the direction of its Board of Directors. The number of Directors constituting the Board of Directors shall be nine subject to increase or decrease from time to time as provided in the by-laws of the Corporation. Amendments of the by-laws by the shareholders shall require the affirmative vote of at least 75% of the outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting as a single class. Each Director elected by shareholders at or after the 2017 annual meeting of shareholders shall hold office until the next annual meeting of shareholders and until his or her successor has been elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office;
provided
,
however
, each Director elected by shareholders prior to the 2017 annual meeting of shareholders shall serve the term for which he or she was elected. Any and all vacancies in the Board of Directors, however occurring, including without limitation, by reason of any increase in size in the Board of Directors, or death, resignation, disqualification or removal of a Director, shall be filled solely by the election via an affirmative vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board of Directors. Any director so elected shall serve until the next shareholder meeting held for the election of directors and until his or her successor has been elected and qualified. Any Director or the entire Board of Directors may be removed from office, only for cause, and only by the affirmative vote of the holders of at least 75% of the outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting as a single class.
|
4.
|
The Secretary of State is designated as the agent of the Corporation upon whom process in any action or proceeding against it may be served.
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5.
|
Business Combinations
.
|
5.1
|
For the purposes of this Article 9:
|
1.
|
The term “beneficial owner” and correlative terms shall have the meaning as set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, or any similar successor Rule. Without limitation and in addition to the foregoing, any shares of Voting Stock of this Corporation which any Major Stockholder has the right to vote or to acquire (i) pursuant to any agreement, (ii) by reason of tenders of shares by stockholders of the Corporation in connection with or pursuant to a tender offer made by such Major Stockholder (whether or not any tenders have been accepted, but excluding tenders which have been rejected), or (iii) upon the exercise of conversion rights, warrants, options or otherwise, shall be deemed “beneficially owned” by such Major Stockholder.
|
2.
|
The term “Business Combination” shall mean:
|
a.
|
any merger or consolidation (whether in a single transaction or a series of related transactions, including a series of separate transactions with a Major Stockholder, any Affiliate or Associate thereof or any Person acting in concert therewith) of this Corporation or any Subsidiary with or into a Major Stockholder or of a Major Stockholder into this Corporation or a Subsidiary;
|
b.
|
any sale, lease, exchange, transfer, distribution or other disposition, including without limitation, a mortgage, pledge or any other security device to or with a Major Stockholder by the Corporation or any of its Subsidiaries (in a single transaction or a series of related transaction) of all, substantially all or any Substantial Part of the assets of this Corporation or a Subsidiary (including, without limitation, any securities of a Subsidiary);
|
c.
|
the purchase, exchange, lease or other acquisition by the Corporation or any of its Subsidiaries (in a single transaction or a series of related transactions) of all, substantially all or any Substantial Part of the assets or business of a Major Stockholder;
|
d.
|
the issuance of any securities, or of any rights, warrants or options to acquire any securities, of this Corporation or a Subsidiary to a Major Stockholder or the acquisition by this Corporation or a Subsidiary of any securities, or of any rights, warrants or options to acquire any securities, of a Major Stockholder;
|
e.
|
any reclassification of Voting Stock, recapitalization or other transaction (other than a redemption in accordance with the terms of the security redeemed) which has the effect, directly or indirectly, of increasing the proportionate amount of Voting Stock of the Corporation or any Subsidiary thereof which is beneficially owned by a Major Stockholder;
|
f.
|
any plan or proposal for any partial or complete liquidation, spin off, split off or split up of the Corporation or any Subsidiary thereof proposed directly or indirectly by or on behalf of a Major Stockholder; and
|
g.
|
any agreement, contract or other arrangement providing for any of the transactions described herein.
|
3.
|
The term “Continuing Director” shall mean (i) a person who was a member of the Board of Directors of this Corporation immediately prior to the time that any then existing Major Stockholder became a Major Stockholder or (ii) a person elected to the Board of Directors at the 1986 Annual Meeting of Stockholders or (iii) a person designated (before initially become a director) as a Continuing Director by a majority of the then Continuing Directors. All references to a vote of the Continuing Directors shall mean a vote of the total number of Continuing Directors of the Corporation.
|
4.
|
The term “Major Stockholder” shall mean any Person which, together with its “Affiliates” and “Associates” (as defined in Rule 12-b-2 of the Securities Exchange Act of 1934, as amended, or any similar successor Rule) and any Person acting in concert therewith, is the beneficial owner of 10% or more of the votes held by the holders of the outstanding shares of the Voting Stock of this Corporation, and any Affiliate or Associate of a Major Stockholder, including a Person acting in concert therewith. The term “Major Stockholder” shall not include a Subsidiary of this Corporation, nor a Person who was a Major Stockholder on May 20, 1986.
|
5.
|
The term “Person” shall mean any individual, corporation, partnership or other person, group or entity (other than the Corporation, any Subsidiary of the Corporation or a trustee holding stock for the benefit of employees of the Corporation or its Subsidiaries, or any one of them, pursuant to one or more employee benefit plans or arrangements). When two or more Persons act as a partnership, limited partnership, syndicate, association or other group for the purpose of acquiring, holding or disposing of shares of stock, such partnerships, syndicate, associate or group will be deemed a “Person”.
|
6.
|
The term “Subsidiary” shall mean any business entity 50% or more of which is beneficially owned by the Corporation.
|
7.
|
The term “Substantial Part”, as used in reference to the assets of the Corporation, of any Subsidiary or of any Major Stockholder means assets having a value of more than 10% of the total consolidated assets of the Corporation and its Subsidiaries as of the end of the Corporation’s most recent fiscal year ending prior to the time the determination is made.
|
8.
|
The term “Voting Stock”, shall mean the Common Stock and any other securities entitled to vote upon any action to be taken in connection with any Business Combination including stock or other securities convertible into Voting Stock.
|
5.2
|
Notwithstanding any other provisions of these Articles of Incorporation and except as set forth in 9.3 of this Article 9, neither the Corporation nor any Subsidiary shall be party to a Business Combination unless the Business Combination was approved by at least 75% of the outstanding Voting Stock of this Corporation and by at least 75% of the outstanding Voting Stock beneficially owned by stockholders other than any Major Stockholder,
provided
,
however
, that such 75% vote of the outstanding stockholders and such 75% vote of the stockholders other than the Major Stockholder shall not be required and such Business Combination shall only required such affirmative vote, if any, of the stockholders as is required by law and any other provision of this Certificate of Incorporation, if
|
1.
|
The Business Combination was approved by the Board of Directors of the Corporation prior to the Major Stockholder involved in the Business Combination becoming a Major Stockholder; or
|
2.
|
The Major Stockholder involved in the Business Combination sought and obtained the unanimous prior approval of the Board of Directors to become a Major Stockholder and the Business Combination was approved by a majority of the Continuing Directors; or
|
3.
|
The Business Combination was approved by at least 75% of the Continuing Directors of the Corporation.
|
5.3
|
During the time a Major Stockholder exists, a resolution to voluntarily dissolve the Corporation shall be adopted only upon the vote by at least 75% of the outstanding Voting Stock of this Corporation and by at least 75% of the outstanding Voting Stock beneficially owned by stockholders other than any major Stockholder,
providing
,
however
, that such 75% vote of the outstanding stockholders and such 75% vote of the stockholders other than the Major Stockholder shall not be required and such Business Combination shall require only such affirmative vote, if any, of the stockholders as is required by law and any other provision of this Certificate of Incorporation if such dissolution was approved by the vote of at least 75% of the Continuing Directors of the Corporation.
|
5.4
|
The Board of Directors of the Corporation, when evaluating a Business Combination or the dissolution of the Corporation, shall give due consideration to all relevant factors, including without limitation the social and economic effects of such action or transaction upon the Corporation, its stockholders, employees, customers, vendors, suppliers and other constituencies, and on the communities in which the Corporation operates or is located.
|
5.5
|
As to any particular transaction, the Continuing Directors shall have the power and duty to determine, on the basis of information known to them:
|
1.
|
The amount of Voting Stock beneficially held by any Person;
|
2.
|
Whether a Person is an Affiliate or Associate of another;
|
3.
|
Whether a Person is acting in concert with another;
|
4.
|
Whether the assets subject to any Business Combination constitute a “Substantial Part: as herein defined;
|
5.
|
Whether a proposed transaction is subject to the provisions of this Article 9; and 12
|
6.
|
Any other matters with respect to which a determination is required under this Article 9. Any such determination shall be conclusive and binding for all purposes of this Article 9.
|
5.6
|
The affirmative vote of the Board of Directors, the Continuing Directors, or the Voting Stock required by this Article 9 is in addition to the vote otherwise required by law or this Certificate of Incorporation.
|
5.7
|
Any amendment, change or repeal of this Article 9 or any other amendment of this Certificate of Incorporation which would have
the effect of modifying or permitting circumvention of the provisions of this Article 9 shall require approval by at least 75% of the outstanding voting Stock of the Corporation and at least 75% of the outstanding Voting Stock beneficially owned by stockholders other than any Major Stockholder,
provided
,
however
, that such 75% vote of the outstanding stockholders and such 75% vote of the stockholders other than the Major Stockholder shall not be required and such Business Combination shall only require such affirmative vote, if any, of the stockholders as is required by law and any other provision of this Certificate of Incorporation if such amendment, change, repeal or other amendment was approved by the vote of at least 75% of the Continuing Directors of the Corporation.
|
5.8
|
The requirements and restrictions of this Article 9 relating to Business Combinations are in addition to the requirements and restrictions of Section 912 of the Business Corporation Law relating to Business Combinations but shall not limit any requirements or restrictions of said Section 912 relating to Business Combinations.
|
6.
|
The provisions of Section 912 of the Business Corporation Law shall apply to this Corporation.
|
7.
|
Liability of Directors
. A director of the Corporation shall not be liable to the Corporation or its stockholders for damages for any breach of duty as a director, except to the extent that such exemption for liability or limitation thereof is not permitted under the Business Corporation Law as the same exists or may hereafter be amended. Any repeal or modification of this Article 11 by the stockholders of the Corporation shall not affect adversely any right or protection of a director of the Corporation existing at the time of such repeal or modification.
|
•
|
Employee cost: $125.12/month individual or $329.04/month family coverage.
|
•
|
Eligibility: First of the month after 30 days of employment.
|
•
|
Health insurance: Covers hospitalization, medical, and prescription drug with a $1300 deductible for individual or a $2600 deductible for family coverage and 80% coinsurance after the deductible is met. Annual out-of-pocket maximum of $3000 for individual or $6000 for family coverage.
|
•
|
Health savings account (HSA): To assist with paying the deductible, the company contributes to a HSA $675 for individual or $1350 for family coverage for the year – pro-rated for employees hired after January 1
st
. Employees may also contribute their own money on a pre-tax basis to the HSA.
|
•
|
Dental insurance: Covers preventative and basic restorative services at 100% and major restorative services at 50%. Annual deductible of $50 for individual or $150 for family on non-preventative services. Maximum annual benefit of $1250. Orthodontia for children under age 19 covered at 50% to a lifetime maximum of $1500.
|
•
|
Eligibility: Date of hire for employee-paid contributions; semi-annual (January 1
st
or July 1
st
) enrollment after one year of service for employer-paid contributions.
|
•
|
An automatic pre-tax 401(k) payroll deduction in the amount of 3% of gross pay starts within 30 days of hire unless the employee elects to change the amount or opt out. The employee may defer up to the IRS annual maximum, which for 2017 is $18,000, plus an additional $6,000 catch-up if over age 50.
|
•
|
The company matches 25 cents per dollar on the first 4% that the employee contributes, up to a 1% total match with immediate vesting.
|
•
|
The company contributes a 4% non-elective contribution whether the employee is contributing or not, which vests over six years.
|
•
|
Eligibility: Date of hire.
|
•
|
The company pays the full cost of a life insurance policy equal to one times the employee’s base annual salary which doubles in the event of an accidental death.
|
•
|
Employees are able to buy additional guaranteed-issue supplemental group term life insurance for themselves, their spouse, and their dependent children at group rates through payroll deduction.
|
•
|
The company pays the full cost of New York State mandated short-term disability insurance for all employees. This plan pay $170 per week for the first six months of disability.
|
•
|
On the first of the month after one year of service, employees are eligible for long-term disability insurance (LTD). The company pays the full cost of LTD insurance. LTD insurance pays 60% of base salary after the employee has been out of work for six months and may pay for the duration of the disability up to age 65.
|
•
|
The company observes 11 paid holidays each year.
|
•
|
Employees are eligible for vacation time based on length of service.
|
Hardinge Inc.
One Hardinge Drive
Elmira, NY 14902-1507 USA
p. 607.734.2281
sales 800.843.8801
sales fax 607.734.8819
www.hardinge.com
|
1.
|
Commencing on the effective date the Executive shall be paid an annual Base Salary of $275,000, payable in accordance with the Company's payroll practices.
|
2.
|
Executive shall be included to the extent eligible thereunder in all employee benefit plans, programs, or arrangements (including plans, programs, or arrangements providing for retirement benefits, disability benefits, health and life insurance, or vacation and paid holidays) which shall be established by the Company for, or made available to, its senior executives generally.
|
3.
|
The Executive will be provided an automobile allowance in the amount of $1,000 per month, and not less than 3 weeks' vacation per calendar year.
|
4.
|
The Executive shall be eligible to receive awards under the Company's Cash Incentive and Stock Incentive Compensation plans. The Executive1s annual target award under the Company1s Cash Incentive and Stock Incentive Compensation plans shall be
50%
of Base Salary. Awards under the Company's Cash Incentive Plan and Stock Incentive Plan shall be determined at the discretion of the Board, and may be subject to attainment of performance targets and objectives determined by the Board.
|
5.
|
Within (30) Days following the Effective Start date, the Executive will receive an Initial Option Grant of 75,000 non-qualified stock options under the Company's stock incentive compensation plan. The stock options will be subject to the following vesting requirements:
|
•
|
18,750 options vest on two year anniversary of Effective Start date, provided Executive is then employed by the Company
|
•
|
18,750 options vest on three year anniversary of the Effective Start date, provided Executive is then employed by the Company
|
•
|
37,500 options subject to performance vesting:
|
o
|
performance criteria to be determined prior to option grant; will include long term and short term parameters
|
Performance Milestone Option Agreement
|
Corresponding Bahr Option Agreement
|
75,000 shares of Common Stock
|
37,500 shares of Common Stock
|
Time Vesting Option Agreement
|
Corresponding Bahr Option Agreement
|
75,000 shares of Common Stock
|
37,500 shares of Common Stock
|
Date:
|
August 3, 2017
|
/s/ Charles P. Dougherty
|
|
|
Charles P. Dougherty
|
|
|
President and Chief Executive Officer
|
|
|
|
Date:
|
August 3, 2017
|
/s/ Douglas J. Malone
|
|
|
Douglas J. Malone
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
/s/ Charles P. Dougherty
|
|
Charles P. Dougherty
|
|
President and Chief Executive Officer
|
|
August 3, 2017
|
|
|
|
|
|
/s/ Douglas J. Malone
|
|
Douglas J. Malone
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
August 3, 2017
|