This is a securities fraud class action against Hardinge Inc.
n February 21, 2008, Hardinge shocked investors when it revealed that in the fourth quarter of the fiscal year ending December 31, 2007, Hardinge 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. Hardinge's fourth quarter and full year 2007 earnings reflected a significant and unexpected reduction in Hardinge'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 Hardinge'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, Hardinge announced plans to lower inventory by $20 million and to discount inventory of older product lines, both of which would continue to constrain Hardinge'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. These facts are the basis for the allegations that defendants' public statements were false and misleading or failed to disclose or indicate the following:
(1) that Hardinge's orders and sales were slowing;
(2) slowing sales were causing Hardinge's inventory of outdated machinery to grow;
(3) that Hardinge failed to timely record an impairment in the value of its inventory;
(4) as a result, Hardinge's financial results were materially inflated; and
(5) that Hardinge lacked adequate internal controls.
Name (Stock Symbol)
Hardinge Inc. (HDNG)
Hardinge Inc. is an international provider of material-cutting equipment.
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