Hardinge Inc. was founded in 1890. Together with its subsidiaries, Hardinge designs, manufactures and distributes machine tools in the Americas, Europe and Asia. The Company operates through two segments: Metalcutting Machine Solutions and Aftermarket Tooling and Accessories. It offers advanced computer-controlled Turning Machines, Grinding Machines, Machining Centers, System Integrations, Turnkey Solutions and post-sale support services including repair parts, training, in-field maintenance and repairs for machine solutions. Hardinge also engineers and supplies high precision, standard and specialty workholding devices, and other machine tool accessories.
The original Complaint alleges that throughout the Class Period, Defendants knew or recklessly disregarded that their public statements concerning Defendant's business, operations and prospects were materially false and misleading.
Specifically, the Complaint alleges that Defendants' public statements were false and misleading or failed to disclose or indicate the following:(1) that the Defendant's orders and sales were slowing; (2) slowing sales were causing the Defendant's inventory of outdated machinery to grow; (3) that the Company failed to timely record an impairment in the value of its inventory; (4) as a result, the Company's financial results were materially inflated; and (5) that the Company lacked adequate internal controls.
On February 21, 2008, the Defendant shocked investors when it revealed that in the fourth quarter of the fiscal year ending December 31, 2007, the Defendant experienced a combination of prior period accounting adjustments and the negative impact of operational initiatives to reduce inventory which contributed to an unexpected loss in the fourth quarter of 2007. The Defendant's fourth quarter and full year 2007 earnings reflected a significant and unexpected reduction in the Company's gross margin as a result of: prior period accounting adjustments related to inter-company profits in inventory elimination and accounts payable which were recorded in the fourth quarter of 2007; the rebalancing of production volumes in the Company's United States and Taiwan production facilities to address current market demand for certain products and to reduce inventory; higher price discounting related to plans to reduce finished machine inventories and accelerate the phase-out of older product lines, and product and channel mix changes.
Moreover, the Defendant announced plans to lower inventory by $20 million and to discount inventory of older product lines, both of which would continue to constrain the Company's margins during the 2008 fiscal year. On this news, Hardinge's shares declined $4.16 per share, or 25.43 percent, to close on February 21, 2008 at $12.20 per share, on unusually heavy trading volume.
On January 23, 2009, District Court Jonathan W. Feldman granted the motion to appoint Paul Campbell as lead Plaintiff and approved Glancy Binkow & Goldberg LLP as lead Counsel. On March 30, 2009, the lead Plaintiff filed an Amended Complaint. On May 29, 2009, the Defendants filed a motion to dismiss the Amended Complaint. On February 2, 2010, Judge Michael A. Telesca granted the Defendants’ motion to dismiss with prejudice and ordered the case closed. On February 3, 2010, Judgment was entered in favor of the Defendants.
