Romi Hostile Takeover Move on Hardinge Inc.

C:\Documents and Settings\jug\Desktop\Project_Seven_-_Schedule_TO-T_Amendment_No__1.DOC

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 ______________________________

SCHEDULE TO Tender Offer Statement Under Section 14(d)(1) or 13(e)(1)

of the Securities Exchange Act of 1934 (Amendment No. 1)

______________________________

HARDINGE INC. (Name of Subject Company)

______________________________

HELEN ACQUISITION CORP. (Offeror)

INDÚSTRIAS ROMI S.A. (Parent of Offeror)

(Names of Filing Persons)

Common Stock, Par Value $0.01 Per Share (Title of Class of Securities)

412324303 (CUSIP Number of Class of Securities)

______________ Luiz Cassiano Rando Rosolen

Helen Acquisition Corp. Avenida Pérola Byington, 56

Santa Bárbara d’Oeste – SP – Brazil CEP 13453-900

+55-19-3455-9000 (Name, Address and Telephone Number of Person Authorized to Receive Notices

and Communications on Behalf of Filing Persons)

______________ Copy to:

Luiz Cassiano Rando Rosolen Indústrias Romi S.A.

Avenida Pérola Byington, 56 Santa Bárbara d’Oeste – SP – Brazil

CEP 13453-900 +55-19-3455-9000

Michael J. McGuinness, Esq. Shearman & Sterling LLP

599 Lexington Avenue New York, New York 10022

+1-212-848-4000

CALCULATION OF FILING FEE

Transaction Valuation* Amount of Filing Fee** $93,504,232 $6,666.85

* Estimated for purposes of calculating the amount of the filing fee only. The transaction valuation was calculated by

multiplying (a) $8.00, the per share tender offer price, by (b) 11,688,029 shares of Hardinge Inc. Common Stock, par value $0.01 per share (consisting of the sum of (i) the 11,610,789 issued and outstanding shares of Common Stock as of February 28, 2010 (according to the Annual Report on Form 10-K for the period ended December 31, 2009 filed by Hardinge Inc.), and (ii) the 77,240 shares of Common Stock subject to outstanding options and stock units as of


December 31, 2009 (according to the Annual Report on Form 10-K for the period ended December 31, 2009 filed by Hardinge Inc.)).

** Calculated by multiplying the transaction valuation by 0.00007130.

Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the

offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: $6,666.85 Filing Party: Indústrias Romi S.A.

Form or Registration No.: Schedule TO Date Filed: March 30, 2010

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes to designate any transactions to which the statement relates:

third-party tender offer subject to Rule 14d-1. issuer tender offer subject to Rule 13e-4. going-private transaction subject to Rule 13e-3. amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:


This Amendment No. 1 (this “Amendment”) amends and supplements the Tender Offer Statement on Schedule TO filed on March 30, 2010 (as so amended, the “Schedule TO”) by Indústrias Romi S.A., a stock corporation organized under the laws of Brazil (“Parent”), and Helen Acquisition Corp., a New York corporation (“Purchaser”) and a wholly owned subsidiary of Parent. The Schedule TO relates to the offer by Purchaser to purchase all the issued and outstanding shares of common stock, par value $0.01 per share (the “Common Stock”), of Hardinge Inc., a New York corporation (the “Company”), and the associated Series B Preferred Stock purchase rights (the “Rights,” and together with the Common Stock, the “Shares”) issued pursuant to the Rights Agreement, dated as of February 18, 2010, between the Company and Computershare Trust Company, N.A., as Rights Agent, for $8.00 per Share, net to the seller in cash (subject to applicable withholding taxes), without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 30, 2010 (the “Offer to Purchase”). Except as specifically provided herein, this Amendment does not modify any of the information previously reported on the Schedule TO.

Items 1 and 4. Summary Term Sheet and Terms of the Transaction.

Items 1 and 4 of the Schedule TO are hereby amended and supplemented as follows:

Each reference to “sole discretion” is replaced with a reference to “reasonable discretion” in the following places: (a) in the first paragraph of the cover page of the Offer to Purchase; (b) under “What are the Most Significant Conditions of the Offer?” in the “Summary Term Sheet” in the Offer to Purchase; (c) in the fourth and fifth paragraphs of the “Introduction” to the Offer to Purchase; (d) in the second paragraph of Section 1 of the Offer to Purchase entitled “Terms of the Offer; Expiration Date”; (e) the penultimate paragraph of Section 14 of the Offer to Purchase entitled “Certain Conditions of the Offer”; (f) the Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, filed as Exhibit (a)(4) to the Schedule TO; and (g) the Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, filed as Exhibit (a)(5) to the Schedule TO.

Each reference to “judgment” is replaced with a reference to “reasonable judgment” in Section 14 of the Offer to Purchase entitled “Certain Conditions of the Offer.”

The first paragraph of Section 5 of the Offer to Purchase is deleted in its entirety.

The first paragraph under “Important Tax Information” in the Form of Letter of Transmittal, filed as Exhibit (a)(2) to the Schedule TO, is deleted in its entirety.

Item 3. Identity and Background of Filing Person.

Item 3 of the Schedule TO is hereby amended and supplemented as follows:

The second paragraph of Section 8 of the Offer to Purchase is hereby amended by replacing such paragraph in its entirety with the following:

Pursuant to subscriptions made by Parent for the common stock of Purchaser on April 6, 2010, April 7, 2010 and April 8, 2010, Parent capitalized Purchaser with US$92,027,421.54. Until immediately prior to the time that Purchaser will purchase Shares pursuant to the Offer, it is not anticipated that Purchaser will have any significant liabilities or engage in activities other than those incidental to its formation and capitalization and the transactions contemplated by the Offer and the Merger.

Section 1 of Schedule I of the Offer to Purchase entitled “Members of the Board of Directors and Board of Executive Officers of Parent” is hereby amended and supplemented by adding the following entry at the end thereof:

“Fábio José Azevedo Degan Member of the Board of Executive Officers, since April 2010; Executive Officer of Castings and Machining Business Unit of Parent, since April 2010; Director of Operations of TRW Automotive Ltda., a producer of safety


products and services for the automotive industry, from April 2007 to March 2010 (Via Anhanguera km 147, 13486-915 – Limerira – SP, Brazil); Plant Director of TRW Automotive Ltda., from February 2006 to April 2007; Manufacturing Engineer of TRW Automotive Ltda., from February 2005 to February 2006.”

Item 12. Exhibits.

Item 12 of the Schedule TO is hereby amended and restated as follows:

(a)(1) Offer to Purchase dated March 30, 2010.∗

(a)(2) Form of Letter of Transmittal.*

(a)(3) Form of Notice of Guaranteed Delivery.*

(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*

(a)(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*

(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.*

(a)(7) Summary Advertisement as published in The Wall Street Journal on March 30, 2010.*

(a)(8) Press Release issued by Parent on March 30, 2010.*

(a)(9) Press Release issued by Parent on February 19, 2010.*



(a)(12) Investor Presentation Materials dated February 4, 2010.*

(a)(13) Press Release issued by Parent on April [13], 2010.

(a)(14) Investor Presentation Materials dated April 2010.

(b) None.

(d) None.

(g) None.

(h) None.

∗ Previously filed.


After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: April [13], 2010

HELEN ACQUISITION CORP. By:

Name: Livaldo Aguiar dos Santos Title: President

By: Name: Luiz Cassiano Rando Rosolen

Title: Vice President INDÚSTRIAS ROMI S.A. By:

Name: Livaldo Aguiar dos Santos Title: Chief Executive Officer and

President

By: Name: Luiz Cassiano Rando Rosolen Title: Controller and Investor Relations

Officer


EXHIBIT INDEX Exhibit No.

(a)(1) Offer to Purchase dated March 30, 2010.∗

(a)(2) Form of Letter of Transmittal.*

(a)(3) Form of Notice of Guaranteed Delivery.*

(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*

(a)(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*

(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.*

(a)(7) Summary Advertisement as published in The Wall Street Journal on March 30, 2010.*

(a)(8) Press Release issued by Parent on March 30, 2010.*




(a)(12) Investor Presentation Materials dated February 4, 2010.*

(a)(13) Press Release issued by Parent on April [13], 2010.

(a)(14) Investor Presentation Materials dated April 2010.

(b) None.

(d) None.

(g) None.

(h) None.

∗ Previously filed.


Exhibit (a)(13) For Immediate Release

Indústrias Romi S.A. Avenida Pérola Byington, 56 13453-900 Santa Bárbara d'Oeste-SP - BRASIL Telefone: 55 (19) 3455-9000 – Fax: 55 (19) 3455-2499

ROMI FILES INVESTOR PRESENTATION REGARDING OFFER TO ACQUIRE HARDINGE

Reiterates Benefits of Romi’s All-Cash Offer in Comparison to Hardinge’s Stand-Alone Prospects

SANTA BARBARA D'OESTE, Brazil, April 13, 2010 – Indústrias Romi S.A. (Bovespa: ROMI3) (“Romi”), a leading global manufacturer of machine tools, today announced that it has filed an investor presentation with the Securities and Exchange Commission (the "SEC") in connection with its fully funded cash tender offer to acquire all of the outstanding shares of Hardinge Inc. (NASDAQ: HDNG) (“Hardinge”) for $8.00 per share, as announced on March 30, 2010. The offer and withdrawal rights are scheduled to expire at 12:00 midnight, New York City time, on May 10, 2010, unless extended or terminated. Livaldo Aguiar dos Santos, Chief Executive Officer of Romi, and Luiz Cassiano Rosolen, Controller and Investor Relations Officer, will be meeting with Hardinge investors this week to discuss the benefits of Romi’s offer in comparison to Hardinge’s stand-alone prospects. “We look forward to meeting with many of the largest shareholders of Hardinge to discuss our compelling all-cash offer,” said Mr. dos Santos. “Our objective is to help investors better understand the fundamentals of our industry and why our offer is far superior to the historic underperformance of Hardinge relative to its peers. We continue to believe that this transaction represents a superior valuation relative to Hardinge’s stand-alone prospects and it remains our strong preference to begin due diligence immediately and reach a mutually agreeable transaction with the Hardinge Board of Directors.” Highlights of the presentation include Romi management’s view:

• That Romi’s $8.00 per share offer, which was made on the basis of publicly available information, offers superior value and immediate liquidity for Hardinge shareholders.

– Romi’s offer represents an attractive public market premium relative to comparable

small-cap public transactions1: • 37% one-day average premium (vs. Romi’s offer of a 46% premium to

Hardinge’s close on February 3, 2010) • 42% four-week average premium (vs. Romi’s offer of a 63% premium to

Hardinge’s close on December 14, 2009)

– Romi’s offer is compelling relative to the valuation levels in recent acquisitions by Hardinge

1 Includes all industrial sector transactions under $300mm announced from January 1st, 2000 to current on U.S. public targets.

Source: The Mergermarket Group.


– Romi’s offer is supported by an analysis applied to Hardinge based on key assumptions of year-over-year annual revenue growth consistent with the industry outlook toward cyclical recovery; gross margins adjusted for the impact of the U.S. distribution contracts previously announced by Hardinge; and SG&A, capital expenditure and working capital levels consistent with recent corporate initiatives

• That it is highly doubtful that Hardinge will deliver equivalent or superior value to the

Romi offer within a reasonable timeframe.

– The machine tools industry is experiencing fundamental, lasting change and demand conditions are unlikely to return to levels experienced in the past five years in a near- or mid-term timeframe.

• Uncertain recovery in orders and demand relative to historical cycles • Impact of potential “sideways” global economic recovery • Weak capital spending environment in core developed markets • Lower expected government expenditures for capital projects

– This uncertainty in timing and magnitude of recovery is likely to expose Hardinge’s

growing gap in operating performance relative to its peers. • Hardinge consistently lagged behind peers on revenue and order growth trends

during the 2004 to 2007 industry expansion • Hardinge’s shift to a variable business model reduces operating leverage and

removes significant upside potential during a future recovery • Hardinge has a flexible cost structure, but a weakened competitive position as a

stand-alone entity • Hardinge’s operating scale going forward could be insufficient to support its

recovery and allow it to compete in a consolidated industry environment “We appreciate the opportunity to meet with Hardinge’s shareholders,” concluded Mr. dos Santos. “We encourage them to urge their Board and management to allow us to conduct due diligence and sit down with us as soon as possible to discuss a mutually agreeable transaction.” The investor presentation is available on the Romi web site (www.romi.com) and at the SEC's web site (www.sec.gov) or by directing a request to Innisfree M&A Incorporated, the Information Agent for the offer, toll-free at 888-750-5834. HSBC Securities (USA) Inc. is acting as financial advisor and Shearman & Sterling LLP is acting as legal advisor to Romi on the proposed transaction. About Romi Indústrias Romi S.A. (Bovespa: ROMI3), founded in 1930, is the market leader in the Brazilian machinery and equipment industry. The company is listed in the “Novo Mercado” category, which is reserved for companies with the highest degree of corporate governance on the Bovespa. The company manufactures machine tools, mainly lathes and machining centers, plastic injection and blow molding machines for thermoplastics and parts made of grey, nodular or vermicular cast iron, which are supplied rough or machined. The company’s products and services are sold globally and used by a variety of industries, such as the automotive, general consumer goods and industrial and agricultural machinery and equipment industries.


Important Information This press release is neither an offer to purchase nor a solicitation of an offer to sell securities of Hardinge. Any offers to purchase or solicitation of offers to sell will be made only pursuant to the tender offer statement (including the offer to purchase, the letter of transmittal and other offer documents) which was filed with the Securities and Exchange Commission (the “Commission”) on March 30, 2010 and is accessible for free at the Commission’s website at http://www.sec.gov. Such documents may also be obtained by investors and security holders for free by calling Innisfree M&A Incorporated, the Information Agent for the offer, toll-free at 888-750-5834. Investors and security holders are urged to read such disclosure documents carefully and in their entirety because they will contain important information. Romi is not currently engaged in a solicitation of proxies from the shareholders of Hardinge. However, in connection with Romi’s offer to acquire Hardinge, certain directors and officers of Romi may participate in meetings or discussions with Hardinge shareholders. Romi does not believe that any of these persons is a “participant” in the solicitation of proxies under SEC rules. If in the future Romi does engage in a solicitation of proxies from the shareholders of Hardinge in connection with its offer to acquire Hardinge, Romi will include the identity of people who, under SEC rules, may be considered “participants” in the solicitation of proxies from Hardinge’s shareholders in applicable SEC filings when they become available. Forward-Looking Statements Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations, including the proposed acquisition of Hardinge, are forward-looking statements within the meaning of the U.S. federal securities laws and should be evaluated as such. Forward-looking statements include statements that may relate to our plans, objectives, strategies, goals, future events, future revenues or performance, and other information that is not historical information. These forward-looking statements may be identified by words such as “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “could,” “should,” “may,” “will,” “would,” “continue,” “forecast,” and other similar expressions. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could cause actual results or events to differ materially from those expressed in the forward-looking statements and projections. Factors that may materially affect such forward-looking statements include: our ability to successfully complete any proposed transaction or realize the anticipated benefits of a transaction; delays in obtaining any approvals for the transaction, or an inability to obtain them on the terms proposed or on the anticipated schedule. Forward-looking statements, like all statements in this press release, speak only as of the date of this press release (unless another date is indicated). Unless required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. Media Contact Joele Frank, Wilkinson Brimmer Katcher Steve Frankel / Tim Lynch: (212) 355-4449 Investor Contact Innisfree M&A Incorporated Alan Miller / Jennifer Shotwell / Scott Winter: (212) 750-5833

###

April 2010

Discussion MaterialsOffer to Acquire All of the Outstanding Shares of Hardinge Inc.

2

Legal Disclaimer

A TRADITION OF INNOVATION

Important Information

This presentation has been provided for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell securities of Hardinge. Any offers to purchase or solicitation of offers to sell will be made only pursuant to the tender offer statement (including the offer to purchase, the letter of transmittal and other offer documents) which was filed with the Securities and Exchange Commission (the “Commission”) on March 30, 2010 and is accessible for free at the Commission’s website at http://www.sec.gov. Such documents may also be obtained by investors and security holders for free by calling Innisfree M&A Incorporated, the Information Agent for the offer, toll-free at 888-750-5834. Investors and security holders are urged to read such disclosure documents carefully and in their entirety because they contain important information.

Romi is not currently engaged in a solicitation of proxies from the shareholders of Hardinge. However, in connection with Romi’s proposal to acquire Hardinge, certain directors and officers of Romi may participate in meetings or discussions with Hardinge shareholders. Romi does not believe that any of these persons is a “participant” in the solicitation of proxies under SEC rules. If in the future Romi does engage in a solicitation of proxies from the shareholders of Hardinge in connection with its proposal to acquire Hardinge, Romi will include the identity of people who, under SEC rules, may be considered “participants” in the solicitation of proxies from Hardinge shareholders in applicable SEC filings when they become available.

Forward-Looking Statements

Any statements made in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, including the proposed acquisition of Hardinge, are forward-looking statements within the meaning of the U.S. federal securities laws and should be evaluated as such. Forward-looking statements include statements that may relate to our plans, objectives, strategies, goals, future events, future revenues or performance, and other information that is not historical information. These forward-looking statements may be identified by words such as “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “could,” “should,” “may,”“will,” “would,” “continue,” “forecast,” and other similar expressions.

Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could cause actual results or events to differ materially from those expressed in the forward-looking statements and projections. Factors that may materially affect such forward-looking statements include: our ability to successfully completeany proposed transaction or realize the anticipated benefits of a transaction; delays in obtaining any approvals for the transaction, or an inability to obtain them on the terms proposed or on the anticipated schedule. Forward-looking statements, like all statements in this presentation, speak only as of the date of this presentation (unless another date is indicated). Unless required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

3

Summary Tender Offer Terms

• 46% premium to closing share price on February 3, 2010 (date prior to initial public announcement of offer)

• 63% premium to closing share price on December 14, 2009 (initial indication of interest)

Offer Premium(3)

• Not subject to any financing condition

• Funded entirely from internal resources

Financing

• $8.00 all cash consideration(1)Price Per Share

• $93 million equity value

• $76 million enterprise value

Implied Transaction Size(2)

• Two-thirds minimum condition

• Waiver of takeover defenses, including Hardinge’s “poison pill” adopted following Romi’s public announcement of its offer to Hardinge’s Board

• Other customary closing conditions, including regulatory approvals and the absence of any material adverse change in Hardinge’s business, as described in the Offer to Purchase

Key Closing Conditions


Notes: (1) The tender offer has been made for all outstanding shares of Hardinge common stock including the associated Series B Preferred Stock Purchase Rights.(2) Based on approximately 11.6mm shares outstanding as of March 31, 2010 sourced from Hardinge’s 14D-9 filed April 5, 2010 and approximately $16.6mm in net cash as per Hardinge Inc. 2009 10K adjusted for $3mm acquisition of Jones & Shipman.(3) Share price data sourced from Bloomberg L.P.

Sources: Hardinge Inc. public filings, Bloomberg L.P.

4

25.2%

65.4%

9.4%

Machine Tools

Plastic Machines

Casting Products

Indústrias Romi at a Glance

• A leading Brazilian machine tool producer

• 11 production facilities in Brazil and Europe as

well as a presence in more than 60 countries

• Established in 1930 in Santa Bárbara d’Oeste, the

Company has been publicly listed since 1972

• Romi joined the “Novo Mercado” in 2007, adopting

the Bovespa’s highest standards of corporate

governance

• More than 149,000(1) Romi machines sold to

customers across a number of industry end-

markets and geographies

• Unique integrated business model with a full

range of foundry and casting production, final

assembly facilities, direct sales force and after-

market support

• Sales and service network in Brazil consists of

more than 30 direct sales and service points,

including branches in all main industrial areas

throughout 12 Brazilian states


OverviewOverview Brazilian Market LeaderBrazilian Market Leader

Summary Financial Overview Summary Financial Overview

2009 Revenue Segmentation

Note: (1) Romi management estimate.Sources: Romi public filings, investor presentations, management estimates, OANDA Corporation and FactSet Research Systems Inc.

(US$mm, Except Where Noted)

Indústrias Romi Listing Exchange BOVESPA

Market Capitalization (as of 04/09/2010) $530.9

Total Debt $133.0

Total Cash (129.1)

Net Debt $3.9

Minority Interest 1.1

Enterprise Value $535.9

Net Debt / LTM EBITDA 0.2x

5

Transaction Highlights

• Superior value and immediate liquidity for Hardinge shareholders

– Immediate cash proceeds for existing Hardinge shareholders

– Attractive premium to pre-announcement share price levels

– Romi offer is underpinning Hardinge’s current share price levels

• $8.00 per share offer made on the basis of publicly available information

– Strong preference to reach a mutually agreeable transaction with Hardinge’s Board of Directors

– Prepared to begin due diligence process immediately

• Highly doubtful that Hardinge can deliver equivalent or superior value as a standalone entity within a reasonable timeframe

– Uncertain recovery in orders and demand relative to historical cycles

– Reduction of operating leverage leverage and removal of upside potential from a future recovery due to shift to variable business model


6

• Uncertain recovery in orders and demand relative to historical cycles. 2010 order book pricing is expected to remain weak

• Impact of “sideways” global economic recovery

• Weak capital spending environment in core developed markets

• Lower expected government expenditures for capital projects

• Fundamental change in industry dynamics


Situation UpdateHardinge’s Weak Position in Uncertain Environment

Macro Industry OutlookMacro Industry Outlook

Uncertainty in timing and magnitude of recovery likely to expose Hardinge’s growing gap in operating performance relative to its peers

HardingeHardinge’’s Operating Performances Operating Performance

• Lower gross margins from recently announced distribution agreements

• Flexible cost structure but weakened competitive position as a stand-alone entity

• Insufficient operating scale going forward to support recovery and compete in a consolidated industry environment

• Uncertain access to capital to support Hardinge’s next phase of cyclical recovery and strategic growth

Sources: Deutsche Bank AG equity research report issued on March 22, 2010, Economist Intelligence Unit on April 9, 2010 and HSBC Global Research equity report issued on March 1, 2010.

7

Attractive $8.00 per Share Offer Price


Notes: (1) Includes all industrial sector transactions with public U.S. targets under $300mm of transaction value, announced since January 1, 2000. Data sourced from Mergermarket Limited.(2) Implied valuation is based on transaction multiples and Hardinge 2009 and 2010E revenues. 2010E revenue is based on 1H 2010 revenue guidance from Hardinge’s investor presentation filed on April 6, 2010, adjusted for 2009 quarterly revenue seasonality.(3) Equity market peer group used includes Lincoln Electric Inc., Kennametal Inc., Rofin-Sinar Technology Inc., Flow International Corp. and Hurco Cos. Average price increase from February 20, 2009 to February 3, 2010.

Sources: The Mergermarket Group, Thompson Reuters, FactSet Research Systems Inc., Hardinge Inc. public filings and press releases.

• Exceeds average of “small cap” transactions (1)

Compelling Relative to Hardinge AcquisitionsCompelling Relative to Hardinge Acquisitions

• Valuation levels greater than those implied from Hardinge’s own recent transactions

• Implied value of $7.40 - $7.80 per share (2)

Attractive Public Market PremiumAttractive Public Market Premium

• Superior to the last 1-year share price target ($3.50, Jefferies & Co., February 2009), which was developed using a significantly higher forecast for 2009

• Comparable industry peers have increased 62%(3), on average, in the period between the last research report and the date prior to initial public announcement of offer

Offer Supported by Analysis of Company as a Offer Supported by Analysis of Company as a

Going ConcernGoing Concern

• Year-over-year annual revenue growth consistent with outlook towards cyclical recovery

• Gross margins adjusted for the impact of recently announced U.S. distribution contracts

• SG&A expenses, capital spending and working capital consistent with historical performance and recent corporate initiatives

• Valuation broadly developed taking into account the industry outlook, impact of corporate initiatives and major items including pension liabilities

Premium Given Market Outlook and Comparable Premium Given Market Outlook and Comparable

Company Performance Company Performance

37%46%1-Day

42%63%Mid-December 2009 (Offer)/ 4-Week (Market)

Market PremiaRomi Offer

0.33x2010Jones and Shipman

0.38x2004Bridgeport International

EV/ RevenueDate

$9.1($19.5)EBITDA

$272.2$214.1Revenue

$81.1$40.8Gross Profit

2009 Report Estimate2009 Actual($ in Millions)

8

“The period of growth through the years of 2005 through the first half

of 2008 resulted in machine tool demand higher than at any time in

history… Those days are over and frankly with the amount of

under utilized capacity in manufacturing companies around the

world and a number of new and used machines sitting in

warehouses ready to be sold at hugely discounted prices, I don’t

think we’ll see that type of market again for many years if ever.”

(emphasis added)

- Richard L. Simons, President and Chief Executive

Officer of Hardinge, Inc., August 6, 2009


Hardinge’s Long-Term Prospects Fundamental Industry Change, Uncertain Recovery

Sources: Metalworking Insiders’ World Machine Tool Output & Consumption Surveys 1985-2009, VDW (German Machine Tool Builders' Association), Oxford Economics Ltd. and Hardinge Inc. earnings release conference call transcript provided by Factset CallStreet, LLC.

Has the Industry Changed Forever?Has the Industry Changed Forever?

• Despite market strength in the 3 years leading up to 2008, a reversion back to historical averages may result in an environment of lower demand in the coming years

Uncertain Timing and Magnitude of RecoveryUncertain Timing and Magnitude of Recovery

$20$26 $28

$35 $39 $42 $39$31

$26 $26$35 $36 $35 $35 $34 $35 $35

$31$36

$45$53

$58$67

$76

$50

20

40

60

80

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

World Machine Tool Consumption ($bn)

$

World Machine Tool Consumption (Y-O-Y% Growth)

Average 1985 – 2003: $33bn

• Expectations for the next recovery are muted relative to recent historical cycles

16.0%10.0% 9.0%

5.0%

(31.0%)

(6.5%)

22.0%

(40%)

(20%)

0%

20%

40%

2005 2006 2007 2008 2009 2010E 2011E

9

Underperformance Versus Comparable Industry Peers (YearUnderperformance Versus Comparable Industry Peers (Year--OverOver--Year Growth)Year Growth)

1.8%

19.9%

5.4%

1996

(3.4%)

4.9%

11.9%

1997

0.2%

(1.8%)

5.3%

1998

(1.7%)

(0.3%)

(31.2%)

1999

(43.9%)(5.0%)17.4% 18.3% 25.6% 27.1% 2.0% (18.8%)(6.8%)6.7% Industry Peer Revenue(2)

(34.1%)

(38.0%)

2009

13.5%

(3.2%)

2008

3.5%

6.2%

2000

(0.6%)

10.6%

2001

(13.1%)

(19.3%)

2002

16.7%

9.6%

2003

24.9%

25.3%

2004

19.1%

12.0%

2005

9.0%

12.7%

2006

15.7%

9.1%

2007

Hardinge Revenue(1)

Machine Tool Consumption

Notes: (1) Revenue growth is adjusted in 1996 for the L. Kellenberger & Co. AG acquisition (c.$30mm revenue) and in 2005 for the Bridgeport acquisition (c.$30mm revenue).(2) Industry peers include Hurco Companies, Inc., Flow International Corp. and Okuma Corp. All results calendarized to a December year end. Okuma’s 2009 revenue is based on consensus research estimates.

Sources: Hardinge, Inc., Hurco Companies, Inc., Flow International Corp. and Okuma Corp. public filings, and FactSet Research Systems Inc. Metalworking Insiders’ World Machine Tool Output & Consumption Surveys 1996-2009.

Hardinge’s Long-Term Prospects Historical Revenue Underperformance

Consistent lag behind peers on revenue and order growth trends during economic recovery

• Hardinge’s competitive position and track record have consistently led to a weaker organic growth profile in comparison to its industry peers

• Recent declining revenue trends are exacerbated in a comparison of relative performance during expansionary periods of rising industry demand and growth

• Based on a review of financial data complied since 1990, Hardinge has not achieved two consecutive years of 20%+ organic revenue growth

10

Europe

41%

United States

30%

Asia & Other

29%

Hardinge has Suffered Gross Margin Deterioration in Both Strong Hardinge has Suffered Gross Margin Deterioration in Both Strong and Challenging Environmentsand Challenging Environments……

Note: (1) Industry peers include Hurco Companies, Inc., Flow International Corp. and Okuma Corp. All results calendarized to December year end. Okuma’s 2009 Gross Margin is based on LTM 2009. Sources: Hardinge, Inc., Hurco Companies, Inc., Flow International Corp. and Okuma Corp. public filings, and FactSet Research Systems Inc.

Hardinge’s Long-Term Prospects Management Actions Likely to Further Erode Margins

……Potential Impact From New Flexible Cost InitiativesPotential Impact From New Flexible Cost Initiatives

• December 2009 announced distribution

agreement creates cost flexibility but

lowers Hardinge’s gross margin and

cash flow generation potential

• Shift to a variable business model

reduces operating leverage and

removes significant upside potential

during a future recovery

2009 Hardinge Sales to Customers by Geographic Region

30.0% 30.7% 30.1%

26.7%

19.1%

32.5%

35.6% 35.6%

29.0%

31.1%

29.5%

38.0%

28.7%

25.7%

15%

20%

25%

30%

35%

40%

2003 2004 2005 2006 2007 2008 2009

Hardinge Gross Margin Industry Peers' Average Gross Margin (1)

11

Hardinge’s Long-Term ProspectsRisks to Hardinge’s Liquidity Position


Recent Cash PositionRecent Cash Position(1)(1)……

• Hardinge’s decline in EBITDA performance in recent quarters

challenges management’s ability to achieve a successful operational turnaround

• Despite recent cost and restructuring initiatives, current market conditions may further threaten Hardinge’s future liquidity position

• As management focuses on future growth plans, Hardinge may

struggle to meet the working capital requirements of improving

orders and revenue performance through the cycle

…… Threatened by Weak EBITDAThreatened by Weak EBITDA(2)(2)

PerformancePerformanceCash Flow Impact from Hardinge Cash Flow Impact from Hardinge

Public Management EstimatesPublic Management Estimates

$10.7

$16.5

$25.4

$21.6

0

10

20

30

Q1'09 Q2'09 Q3'09 Q4'09

$

($mm)

($1.7)($2.6)

($12.3)

($2.8)

(15)

(10)

(5)

0

Q1'09 Q2'09 Q3'09 Q4'09

($mm)

$

Notes: (1) Q4 2009 adjusted for the pro forma impact of the Jones & Shipman acquisition.(2) EBITDA is calculated as operating income (loss) excluding impairment charges plus depreciation and amortization expenses, based on Hardinge Inc. public filings.(3) Hardinge management estimates from the Investor Presentation filed April 6, 2010.(4) High end of Hardinge management guidance disclosed during the Q4 2009 earnings call.(5) Based on past two year average quarterly depreciation and amortization expense.

Sources: Hardinge Inc. public filings and Hardinge Inc. earnings release conference call transcript provided by Factset CallStreet, LLC.

“[On the gross margin issue]… I

would say for the next quarter or so

given current volume levels and

current pricing power in the

marketplace, ...Right in the 20 to

22% range.”

- Edward J. Gaio, VP and CFO of

Hardinge, Inc., February 18, 2010

($ in Millions)

Q1 2010 Estimated Revenue(3) $42

Estimated Gross Margin(4) 22%

Estimated Quarterly Gross Profit $9

Q1 2010 Estimated SG&A Expense(3) (14)

Estimated D&A(5) 2

Estimated Quarterly EBITDA ($3)

12

• The global machine tools industry has

experienced a significant level of

consolidation over the past decade.

Notable industry transactions include

the recent partnership between

Gildemeister and Mori Seiki, Fair Friend

Enterprise’s acquisition of Saginaw

Machine Systems and MAG’s

acquisition of Cincinnati Lamb Group

• The largest 20 industry players are

expected to account for 70%+ of the

market by 2011, underscoring the need

for size and critical mass in order to

survive in an increasingly competitive

industry landscape

• Hardinge’s recent corporate activity and

distribution agreements fail to diminish

this exposure


Note: (1) Market Capitalization as of April 9, 2010. Sources: FactSet Research Systems Inc., VDW (Association of German Machine Tool Manufactures) and the info-institute (German survey company).

Hardinge’s Long-Term ProspectsLong-Term Risk in a Consolidating Industry

53% 53%56% 56%

61%

66%

71%

40%

50%

60%

70%

80%

2005 2006 2007 2008 2009 2010E 2011E

Gap in Relative Size versus Comparable Industry PeersGap in Relative Size versus Comparable Industry Peers

Increasing Industry Concentration Over TimeIncreasing Industry Concentration Over Time

Market Capitalization ($mm)(1)

Percentage of Revenue from the Top 20 Industry Players

1,5261,2861,279

691 622 531126 110 105

2,5152,481

0

1,000

2,000

3,000

Ke

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Gild

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Flo

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Hu

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Ha

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$

13

Summary of Key Considerations

• Following corporate activity over the past 10 years, requirement for industry players to exercise critical mass, expand global reach and enhance commercial presence

• Diminishing ability to compete with larger, integrated global competitors

Industry Consolidation

• Lowered control over sales and distribution will leave the stand-alone company with weakened prospects for future profitability

• Weaker competitive position without technical support of integrated sales and marketing model

• Questionable ability of the Company to capitalize on market recovery

Long-Term Competitive Position

• Fundamental change in industry demand and current macro outlook unlikely to support Hardinge management’s expectations on valuation nor prospects for Hardinge as a stand-alone entity

• Capacity conditions among global competitors unlikely to lead to a 2004-2007 demand outlook, placing a significant downside risk to Hardinge’s recovery outlook and medium-term liquidity profile

Timing for Revenue Recovery

• Lowered gross margins and free cash flow generation profile

• Flexible cost initiatives limit upside profitability from operating leverage during cyclical recovery

Margin Impact from Distribution Contracts


14

Process Timing & Next Steps

• Tender offer expiration on May 10, 2010(1)

• Offer subject to two-thirds minimum condition, redemption of Hardinge’s Series B Preferred Stock purchase rights, waiver of Article Nine of Hardinge’s Restated Certificate of Incorporation and Section 912 of the New York Business Corporation Law by Hardinge’s Board of Directors, receipt of regulatory approvals and other customary closing conditions

• No financing condition

• Ready to immediately discuss a mutually agreeable transaction with Hardinge Inc. management and Board of Directors


Romi management continues to believe that this transaction represents a superior valuation relative to Hardinge’s stand-alone prospects

Note: (1) If the tender offer is extended, Romi will issue a press release announcing such extension prior to 9:00 a.m. EST on May 11, 2010.

Romi Hostile Takeover Move on Hardinge Inc.

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