313716--3/16/2007--HARDINGE

related topics

{product, market, service}

{personnel, key, retain}

{condition, economic, financial}

{customer, product, revenue}

{operation, international, foreign}

{capital, credit, financial}

{competitive, industry, competition}

{cost, regulation, environmental}

{cost, contract, operation}

{acquisition, growth, future}

Cyclical nature of the business could cause fluctuations in operating results. Competitive position and prospects for growth may be diminished if the Company is unable to develop and introduce new and enhanced products on a timely basis that are accepted in the market. The Company may face trade barriers that could have a material adverse effect on its results of operations and result in a loss of customers or suppliers. The Company competes with larger companies that have greater financial resources, and our business could be harmed by competitive inroads. If the Company were unable to access financial markets on favorable terms, its liquidity, businesses and results of operations could be adversely affected. The Company s operations and growth prospects would be adversely impacted if the Company were unable to attract and retain skilled employees to work at its manufacturing facilities. Prices of some raw materials, especially steel and iron products, fluctuate which can adversely affect the Company s sales, costs, and profitability. Due to future technological changes, changes in market demand, or changes in market expectations, portions of the Company s inventory may become obsolete or excess. The Company has made and expects to continue to make acquisitions that could disrupt its operations and harm its operating results. Fluctuations in the exchange rates between the U.S. dollar and any of several foreign currencies could increase the Company s costs or decrease its revenue. Major changes in the economic situation of our customer base could require the Company to write-off significant parts of its receivables from customers. Some components and products are purchased from a single supplier or a limited number of suppliers. The loss of any of these suppliers may cause the Company to incur additional costs, result in delays in manufacturing and delivering its products or cause the Company to carry excess or obsolete inventory. The unplanned loss of current members of the Company s senior management team and other key personnel may adversely affect its operating results. The Company expenditures for post-retirement pension obligations could be materially higher than predicted if underlying assumptions prove to be incorrect or the Company is required to use different assumptions.

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313716--3/16/2007--HARDINGE_INC