UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

(Mark One)

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

OR

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number: 000-15760

Hardinge Inc.

(Exact name of Registrant as specified in its charter)

                Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No o

              Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer  (as defined by Exchange Act Rule 12b-2).

                Large accelerated filer o            Accelerated filer x          Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined by Exchange Act Rule 12b-2).  Yes  o  No  x

                As of September 30, 2007 there were 11,476,916 shares of Common Stock of the Registrant outstanding.

HARDINGE INC. AND SUBSIDIARIES

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PART I.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HARDINGE INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In Thousands)

See accompanying notes.

3

HARDINGE INC. AND SUBSIDIARIES

(In Thousands, Except Share Data)

See accompanying notes.

4

HARDINGE INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In Thousands, Except Per Share Data)

See accompanying notes.

5

HARDINGE INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In Thousands)

See accompanying notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2007

NOTE A—BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three month period and the nine month period ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ended December 31, 2007.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2006.  The Company operates in only one business segment — industrial machine tools.

The consolidated balance sheet at December 31, 2006 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

NOTE B—STOCK-BASED COMPENSATION

              On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (SFAS 123R), which requires all equity-based payments to employees, including grants of employee stock options, to be recognized in the statement of earnings based on the grant date fair value of the award.

The Company did not issue any new stock options during 2007 or 2006. All previously awarded stock option grants were fully vested at the date of the adoption of SFAS 123R, thus, the Company did not recognize any share-based compensation expense in 2007 or 2006, related to stock options.

The Company does recognize share-based compensation expense in relation to restricted stock awards issued prior to January 1, 2006 and thereafter. A summary of the restricted stock activity under the Incentive Stock Plan is as follows:

The Company amortizes compensation expense for restricted stock and units over the vesting period of the grant. Total share-based compensation expense on restricted stock and units for the three months and nine months ended September 30, 2007 was $78,167 and $217,665, respectively. Total share-based compensation expense on restricted stock and units for the three months and nine months ended September

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE B—STOCK-BASED COMPENSATION (Continued)

30, 2006 was $40,793 and $98,237, respectively. There were a total of 174,000 shares or units of restricted stock outstanding at September 30, 2007. The compensation cost not yet recognized on these restricted shares and units as of September 30, 2007 was $1.7 million, which will be amortized over a weighted average term of 3.7 years.

A summary of the stock option activity under the Incentive Stock Plan is as follows:

The following characteristics apply to the Plan stock options that are fully vested, as of September 30, 2007:

NOTE C—WARRANTIES

The Company offers warranties for its products.  The specific terms and conditions of those warranties vary depending upon the product sold and the country in which the Company sold the product.  The Company generally provides a basic limited warranty, including parts and labor for a period of one year.  The Company estimates the costs that may be incurred under its basic limited warranty, based largely upon actual warranty repair cost history, and records a liability in the amount of such costs in the month that product revenue is recognized. The resulting accrual balance is reviewed during the year. Factors that affect the Company’s warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim.

The Company also sells extended warranties for some of its products.  These extended warranties usually cover a 12-24 month period that begins 0-12 months after time of sale.  Revenues for these extended warranties are recognized monthly on a prorated basis until the warranty expires.

These liabilities are reported as accrued expenses on the Company’s consolidated balance sheet.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE C—WARRANTIES (Continued)

A reconciliation of the changes in the Company’s product warranty liability during the three month and nine month periods ended September 30, 2007 and 2006 is as follows:

NOTE D—INVENTORIES

Inventories are summarized as follows:

NOTE E—INCOME TAXES

Hardinge continues to maintain a full valuation allowance on the tax benefits of its U.S. and Canadian net deferred tax assets and the Company expects to continue to record a full valuation allowance on future tax benefits until an appropriate level of profitability in the U.S. and Canada is sustained.  Additionally, until an appropriate level of profitability is reached, the Company does not expect to recognize any significant tax benefits in future results of operations. The Company also maintains a valuation allowance on its U.K. deferred tax asset for minimum pension liabilities.

Each quarter, the Company estimates its full year tax rate for jurisdictions not subject to valuation allowances based upon its most recent forecast of full year anticipated results and adjusts year-to-date tax expense to reflect its full year anticipated tax rate. The effective tax rate was 19.8% and 26.0% for the three months and nine months ended September 30, 2007. The anticipated full year tax rate has been affected by the following discrete period items, both of which occurred in the third quarter of 2007: a decrease in the amount of unrecognized tax benefits and a nontaxable gain in the UK.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE E— INCOME TAXES —(Continued)

On January 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48,  “Accounting for Uncertainty in Income Taxes: An interpretation of FASB Statement No. 109” (“FIN 48”).  As a result of the adoption of FIN 48 and recognition of the cumulative effect of adoption of a new accounting principle, the Company recorded a $0.4 million increase in the liability for uncertain income tax benefits, with an offsetting reduction in retained earnings. This adjustment reflects the net difference between related balance sheet accounts before applying FIN 48, and then as measured pursuant to the provisions of FIN 48.  In addition, the Company derecognized $1.46 million of deferred tax assets, for which a full valuation allowance had previously been provided.  The valuation allowance was also reduced by $1.46 million as part of the adoption of FIN 48.  As of September 30, 2007, the total liability for uncertain income tax benefits was $0.4 million.  If recognized, essentially all of the uncertain tax benefits and related interest would be recorded as a benefit to income tax expense on the Consolidated Statement of Operations.

Additionally, the adoption of FIN 48 resulted in the accrual for uncertain tax positions being reclassified from accrued income taxes to other liabilities in the Company’s Consolidated Balance Sheet. The adoption of FIN 48 did not have a significant impact on the Consolidated Statement of Operations for the quarter ended September 30, 2007.

The Company records interest and penalties on tax reserves as income tax expense in the financial statements.  For the quarter ended September 30, 2007 a nominal interest expense was recorded; the Company currently does not have a liability for tax penalties.   As of September 30, 2007, there was $0.1 million of accrued interest related to uncertain tax positions included in the liability for uncertain tax positions.

During the quarter ended September 30, 2007, the Company recorded a decrease of $0.1 million in unrecognized tax benefits due to settlements with tax authorities.

The tax years 2003 to 2006 remain open to examination by United States taxing authorities, and for the Company’s other major jurisdictions (Switzerland, UK, Taiwan, Germany, Canada, and China), the tax years 2001 to 2006 generally remain open to routine examination by foreign taxing authorities.

On April 1, 2007, legislation was enacted in New York State that changed the apportionment methodology for corporate income from a “three factor formula” comprised of payroll, property and sales, to one which uses only sales.  The law also provides for a lowering of the general corporate income tax rate.  These changes are fully effective for the tax year 2007 and thereafter.  As a result of this significant change in expected state income tax rates to the Company, the Company has reduced its net deferred tax assets by $3.1 million.  Concurrently with this action, the Company has also reduced its valuation allowance by $3.1 million due to this item.  Both items were recorded in the quarter ended June 30, 2007.

During the quarter ended September 30, 2007, the Company was not required to record a tax provision of $0.4 million due to the disposition of a capital asset by the UK subsidiary. Due to capital asset indexation, most of the realized gain was not taxable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE F— DERIVATIVE FINANCIAL INSTRUMENTS

The Company accounts for derivative financial instruments in accordance with Financial Accounting Standards Board Statement No. 133, Accounting for Derivative Instruments and Hedging Activities.  The statement requires the Company to recognize all its derivative instruments on the balance sheet at fair value.  Derivatives that are not qualifying hedges must be adjusted to fair value through income.  If the derivative is a qualifying hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings.  The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings.

NOTE G—EARNINGS PER SHARE AND WEIGHTED AVERAGE SHARES OUTSTANDING

Earnings per share are computed in accordance with Statement of Financial Accounting Standards No. 128 Earnings per Share.   Basic earnings per share are computed using the weighted average number of shares of common stock outstanding during the period.  For diluted earnings per share, the weighted average number of shares includes common stock equivalents related primarily to restricted stock and stock options.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations required by SFAS No. 128:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE H—REPORTING COMPREHENSIVE INCOME (LOSS)

During the three and nine month periods ended September 30, 2007 and 2006, the components of total comprehensive income (loss) consisted of the following:

Accumulated balances of the components of other comprehensive income (loss) consisted of the following at September 30, 2007 and December 31, 2006:

NOTE  I—GOODWILL AND OTHER INTANGIBLE ASSETS

The Company accounts for goodwill and intangibles in accordance with Statements of Financial Accounting Standards No. 141 (SFAS 141), Business Combinations, and No. 142 (SFAS 142), Goodwill and Other Intangible Assets.  SFAS 142 prohibits the amortization of goodwill and intangible assets with indefinite useful lives. The statement requires that these assets be reviewed for impairment at least annually. Intangible assets with finite lives are amortized over their estimated useful lives.

The total carrying amount of goodwill was $22.0 million as of September 30, 2007 and $19.1 million as of December 31, 2006.  The majority of this asset resulted from the acquisition of HTT Hauser Tripet Tschudin AG in 2000.  The acquisition of the European sales and service operations of Bridgeport in 2004

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE  I—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

added $0.5 million to goodwill.  The acquisition of a Canadian entity in April of 2007 added $2.8 million to goodwill. The Company completed a valuation of intangibles acquired from the Canadian entity and other purchase adjustments in the third quarter of 2007 that decreased the goodwill by $0.9 million. The purchase price of the Canadian entity was approximately $2.3 million and the assumption of certain liabilities. The results of this entity are included in the Company’s results of operations since the acquisition date of April 30, 2007. The asset value of the goodwill increased by $1.0 million and $1.0 million, respectively, during the three month and nine month periods ended September 30, 2007 due to the increased dollar value of the functional currency of the Company’s subsidiaries whose balance sheets include the goodwill.

Other intangible assets include $6.6 million representing the value of the name, trademarks and copyrights associated with the former worldwide operations of Bridgeport, which were acquired in 2004.  The Company uses this strong brand name on all of its machining center lines, and therefore, the asset has been determined to have an indefinite useful life. The asset will be reviewed annually for impairment under the provisions of SFAS 142.

Other net intangible assets include $4.1 million for the technical information of the Bridgeport knee-mill purchased in January 2006, which is being amortized over ten years, $0.7 million for intangibles acquired with the Canadian entity and $0.6 million for patents and non-competition agreements.

NOTE  J—PENSION AND POST RETIREMENT PLANS

The Company accounts for the pension plans and postretirement benefits in accordance with Statements of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of SFAS No. 87, 106 and 132.  The following disclosures related to the pension and postretirement benefits are presented in accordance with Statements of Financial Accounting Standards No. 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits as revised.

A summary of the components of net periodic pension costs for the Company for the three and nine months ended September 30, 2007 and 2006 is presented below:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE  J—PENSION AND POST RETIREMENT PLANS (Continued)

A summary of the components of net postretirement benefits costs for the consolidated company for the three and nine months ended September 30, 2007 and 2006 is presented below:

The expected contributions to be paid during the year ending December 31, 2007 to the domestic defined benefit plan are $1.5 million.  Contributions to the domestic plan as of September 30, 2007 and 2006 were $1.1 million and $1.8 million, respectively.  The Company also provides defined benefit pension plans or defined contribution pension plans for some of its foreign subsidiaries.  The expected contributions to be paid during the year ending December 31, 2007 to the foreign defined benefit plans are $2.2 million.  For each of the Company’s foreign plans, contributions are made on a monthly basis and are determined by applicable governmental regulations.  As of September 30, 2007 and 2006, $1.8 million and $1.7 million of contributions have been made to the foreign plans, respectively. Also, each of the foreign plans requires employee and employer contributions, except for Taiwan, which has only employer contributions.

NOTE  K—COMMITMENTS AND CONTINGENCIES

The Company’s operations are subject to extensive federal and state legislation and regulation relating to environmental matters.

Certain environmental laws can impose joint and several liability for releases or threatened releases of hazardous substances upon certain statutorily defined parties regardless of fault or the lawfulness of the original activity or disposal.  Activities at properties owned by the Company and on adjacent areas have resulted in environmental impacts.

In particular, the Company’s New York manufacturing facility is located within the Kentucky Avenue Wellfield on the National Priorities List of hazardous waste sites designated for cleanup by the United States Environmental Protection Agency (“EPA”) because of groundwater contamination.  The Kentucky Avenue Wellfield site encompasses an area of approximately three square miles, which includes sections of the Town of Horseheads and the Village of Elmira Heights in Chemung County, New York. In February 2006, the Company received a Special Notice Concerning a Remedial Investigation/Feasibility Study for the Koppers Pond portion of the Kentucky Avenue Wellfield site.  The EPA has documented the release and threatened release of hazardous substances into the environment at the Kentucky Avenue Well Field Superfund site, including releases into and in the vicinity of the Koppers Pond (the “Pond”).  The hazardous substances, including metals and polychlorinated biphenyls, have been detected in sediments in the Pond.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE K—COMMITMENTS AND CONTINGENCIES  (Continued)

A substantial portion of the Pond is located on the Company’s property.  The Company, along with Beazer East, Inc., the Village of Horseheads, the Town of Horseheads, the County of Chemung, CBS Corporation, and Toshiba America, Inc., has agreed to voluntarily participate in the Remedial Investigation and Feasibility Study (“RI/FS”) by signing an Administrative Settlement Agreement and Order of Consent on September 29, 2006.  On September 29, 2006, the Director of Emergency and Remedial Response Division of the U.S. Environmental Protection Agency, Region II, approved and executed the Agreement on behalf of the EPA.  The PRPs also signed a PRP Member Agreement, agreeing to share the cost of the RI/FS study on a per capita basis.  The cost of the RI/FS was originally estimated to be between $0.3 million and $0.8 million. The consultants now believe the range may be $0.6 million to $0.8 million. The Company increased its established reserve to $0.08 million (our minimum portion of the RI/FS study). The PRPs are currently developing the RI with the consultants that they have retained.

Until receipt of this notice, the Company had never been named as a potentially responsible party at the site or received any requests for information from the EPA concerning the site.  Environmental sampling on the Company’s property within this site under supervision of regulatory authorities has identified off-site sources for such groundwater contamination and sediment contamination in the Pond and has found no evidence that the Company’s property is contributing to the contamination. Since the RI/FS has not commenced, the Company has not established, other than as described above, a reserve for any potential costs relating to this site, as it is too early in the process to determine the Company’s responsibility as well as to estimate any potential costs to remediate. The Company did notify all appropriate insurance carriers and is actively cooperating with them, but whether coverage will be available has not yet been determined and possible insurance recovery cannot now be estimated with any degree of certainty.

NOTE  L—STOCK OFFERING

On April 25, 2007, the Company completed its public offering of 2,553,000 shares of common stock, including a 330,000 share over-allotment option exercised in full by the underwriters, with net proceeds of approximately $55.9 million after deducting underwriting discounts and commissions, and offering expenses.  Hardinge used these funds to repay indebtedness under its U.S. overdraft and revolving line of credit facilities. On September 30, 2007 Hardinge had 11,476,916 shares of common stock outstanding.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 30, 2007

NOTE  M—NEW ACCOUNTING STANDARDS

On January 1, 2007, the Company adopted FIN 48.  FIN 48 clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements.  FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Refer to Note E, Income Taxes, for information related to the effect of adoption of FIN 48.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in applying generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement applies whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of SFAS 157 on its consolidated results of operations and financial condition.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115” (SFAS 159). This Statement allows all entities a one-time election to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value (the “fair value option”). SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of SFAS 159 on its consolidated results of operations and financial condition.

In March 2007, the FASB ratified Emerging Issues Task Force (EITF) issue No. 06-10 “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements” (EITF 06-10). EITF 06-10 requires that an employer recognize a liability for the postretirement benefit obligation related to a collateral assignment arrangement—in accordance with SFAS 106 (if deemed part of a postretirement plan) or APB 12 (if not part of a plan). The consensus is applicable if, based on the substantive agreement with the employee, the employer has agreed to (a) maintain a life insurance policy during the postretirement period or (b) provide a death benefit. The EITF also reached a consensus that an employer should recognize and measure the associated asset on the basis of the terms of the collateral assignment arrangement. This pronouncement is effective for fiscal years beginning after December 15, 2007. The Company is currently assessing the impact of this EITF Issue.

In June 2007, the FASB issued EITF Issue No. 06-11 “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards (EITF 06-11).” This issue relates to the accounting for income tax benefits related to the payment of dividends on equity-classified employee share-based payment awards declared in fiscal years beginning after September 15, 2007. The Company is currently evaluating the impact of EITF 06-11 on its consolidated results of operations and financial condition.

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PART I. ITEM 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview.   The following Management’s Discussion and Analysis (“MD&A”) is written to help the reader understand our company. The MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed financial statements, the accompanying condensed financial notes (“Notes”) appearing elsewhere in this report and our annual report on Form 10-K for the year ended December 31, 2006.

Our primary business is designing, manufacturing and distributing high precision computer controlled metal cutting turning, grinding, and milling machines, and related accessories. We are geographically diversified with manufacturing facilities in the U.S and Switzerland and assembly operations in Taiwan, China and the United Kingdom, with sales to most industrialized countries. Approximately 65% of our net sales are to customers outside North America and approximately 57% of our employees are located outside of North America.

Our machine products are considered to be capital goods and are part of what has historically been a highly cyclical industry. Our management believes that a key performance indicator is our order level compared to industry measures of market activity.

The U.S. market activity metric most closely watched by our management has been metal-cutting machine orders as reported by the Association of Manufacturing Technology (AMT), the primary industry group for U.S. machine tool manufacturers. Other closely followed U.S. market indicators are tracked to determine activity levels in U.S. manufacturing plants that might purchase our products. One such measurement is the PMI (formerly called the Purchasing Manager’s Index), as reported by the Institute for Supply Management. Another measurement is capacity utilization of U.S. manufacturing plants, as reported by the Federal Reserve Board. Similar information regarding machine tool consumption in foreign countries is published in various trade journals

Other key performance indicators are geographic distribution of sales and orders, income from operations, working capital changes, and debt level trends.  In an industry where constant product technology development has led to an average life of three to five years, effectiveness of technological innovation and development of new products are also key performance indicators.

Foreign currency exchange rate changes can be significant to our reported financial results for several reasons. Our primary competitors, particularly for the most technologically advanced products, are now largely manufacturers in Japan, Germany, and Switzerland, which causes the worldwide valuation of the Japanese yen, Euro, and Swiss franc to be central to competitive pricing in all of our markets. Also, we translate the financial results of our Swiss, Taiwanese, Chinese, English, German and Canadian subsidiaries into U.S. dollars for consolidation and financial reporting purposes. Period to period changes in the exchange rate between their local currency and the U.S. dollar may significantly affect comparative data. We also purchase computer controls and other components from suppliers throughout the world, and our purchase costs reflect these foreign currency exchange rate changes.

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In January 2006, we executed our option to purchase the technical information of the Bridgeport knee-mill machine tools, related accessories and spare parts from BPT IP, LLC (“BPT”). BPT had granted us the exclusive right to manufacture and sell certain versions of the knee-mill machine tool, accessories and spare parts under Alliance Agreements dated October 29, 2002 and November 3, 2004. Per the Alliance Agreements, we agreed to pay BPT royalties based on a percentage of net sales attributable to the products, accessories and spare parts. Royalty expense under this agreement was $1.3 million in 2005. The purchase price for the technical information was $5.0 million and it is being amortized over a ten-year period. The technical information purchased includes, but is not limited to, blueprints, designs, schematics, drawings, specifications, computer source and object codes, customer lists and proprietary rights and assets of a similar nature. Subsequent to this purchase, no further royalties were earned by BPT.

Results of Operations

Summarized selected financial data for the three and nine months ended September 30, 2007 and 2006: