Hurco Reports Fourth Quarter and Full Year Results for Fiscal 2021
Hurco Companies, Inc. (HURC) reported strong financial results for Q4 and fiscal year 2021. The company achieved a net income of $2.1 million ($0.31 per diluted share) in Q4 2021, up from a net loss of $3.6 million in Q4 2020. For the fiscal year, net income reached $6.8 million ($1.01 per diluted share) compared to a loss of $6.2 million in 2020. Sales surged 38% year-over-year to $235.2 million, driven by increased demand across all regions. Gross profit margins improved, with Q4 gross profit at 25% of sales. Operating income rose to $10.2 million in 2021, reflecting a strong recovery from pandemic-related challenges.
- Net income for Q4 2021 was $2.1 million, a significant recovery from a loss in Q4 2020.
- Fiscal 2021 net income totaled $6.8 million compared to a loss of $6.2 million in 2020.
- Sales increased 38% year-over-year to $235.2 million for fiscal 2021.
- Gross profit improved to 25% of sales in Q4 2021, compared to 21% in Q4 2020.
- Operating income for fiscal 2021 was $10.2 million, a turnaround from an operating loss in 2020.
- Despite improvements, the company faced inflationary pressures in material costs and transportation.
INDIANAPOLIS, Jan. 07, 2022 (GLOBE NEWSWIRE) -- Hurco Companies, Inc. (Nasdaq: HURC) today reported results for the fourth fiscal quarter and fiscal year ended October 31, 2021. Hurco recorded net income of
Sales and service fees for the fourth quarter of fiscal 2021 were
Greg Volovic, Chief Executive Officer, stated, “I’m proud of the way our employees responded to the needs of our customers across the globe during 2021. We rebounded well from very uncertain and unstable times caused by the pandemic. We delivered products in high demand to our customers as we navigated vendor delays, transportation issues, inflationary cost increases, and competitive labor markets. We increased factory production, hired new employees, and completed our new software control platform for multi-axis, multi-spindle turning centers. Most importantly, we provided outstanding customer support and service, a signature part of our brand that sets us apart from our competition. The many contributions of our employees are greatly appreciated. Global sales for fiscal 2021 totaled
The following table sets forth net sales and service fees by geographic region for the fourth quarter and fiscal year ended October 31, 2021 and 2020 (dollars in thousands):
Three Months Ended October 31, | Fiscal Year Ended October 31, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | ||||||||||
Americas | $ | 24,180 | $ | 15,453 | $ | 8,727 | 56 | % | $ | 86,301 | $ | 67,498 | $ | 18,803 | 28 | % | |
Europe | 35,924 | 23,577 | 12,347 | 52 | % | 117,522 | 77,936 | 39,586 | 51 | % | |||||||
Asia Pacific | 8,878 | 5,429 | 3,449 | 64 | % | 31,372 | 25,193 | 6,179 | 25 | % | |||||||
Total | $ | 68,982 | $ | 44,459 | $ | 24,523 | 55 | % | $ | 235,195 | $ | 170,627 | $ | 64,568 | 38 | % |
Sales in the Americas for the fourth quarter and fiscal 2021 increased by
European sales for the fourth quarter and fiscal 2021 increased by
Asian Pacific sales for the fourth quarter and fiscal 2021 increased by
Orders for the fourth quarter of fiscal 2021 were
The following table sets forth new orders booked by geographic region for the fourth quarter and fiscal year ended October 31, 2021 and 2020 (dollars in thousands):
Three Months Ended October 31, | Fiscal Year Ended October 31, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | ||||||||||
Americas | $ | 28,779 | $ | 17,177 | $ | 11,602 | 68 | % | $ | 95,767 | $ | 67,577 | $ | 28,190 | 42 | % | |
Europe | 39,608 | 25,603 | 14,005 | 55 | % | 133,802 | 77,079 | 56,723 | 74 | % | |||||||
Asia Pacific | 7,279 | 5,935 | 1,344 | 23 | % | 35,852 | 22,282 | 13,570 | 61 | % | |||||||
Total | $ | 75,666 | $ | 48,715 | $ | 26,951 | 55 | % | $ | 265,421 | $ | 166,938 | $ | 98,483 | 59 | % |
Orders in the Americas for the fourth quarter and fiscal 2021 increased by
European orders for the fourth quarter and fiscal 2021 increased by
Asian Pacific orders for the fourth quarter and fiscal 2021 increased by
Gross profit for the fourth quarter of fiscal 2021 was
Selling, general, and administrative expenses for the fourth quarter of fiscal 2021 were
Operating income for the fourth quarter of fiscal 2021 was
The effective tax rates for the fourth quarter and fiscal 2021 were
Cash and cash equivalents totaled
Hurco Companies, Inc. is an international, industrial technology company that sells its three brands of computer numeric control (“CNC”) machine tools to the worldwide metal cutting and metal forming industry. Two of the Company’s brands of machine tools, Hurco and Milltronics, are equipped with interactive controls that include software that is proprietary to each respective brand. The Company designs these controls and develops the software. The third brand of CNC machine tools, Takumi, is equipped with industrial controls that are produced by third parties, which allows the customer to decide the type of control added to the Takumi CNC machine tool. The Company also produces high-value machine tool components and accessories and provides automation solutions that can be integrated with any machine tool. The end markets for the Company's products are independent job shops, short-run manufacturing operations within large corporations, and manufacturers with production-oriented operations. The Company’s customers manufacture precision parts, tools, dies, and/or molds for industries such as aerospace, defense, medical equipment, energy, transportation, and computer equipment. The Company is based in Indianapolis, Indiana, with manufacturing operations in Taiwan, Italy, the U.S., and China, and sells its products through direct and indirect sales forces throughout the Americas, Europe, and Asia. The Company has sales, application engineering support and service subsidiaries in China, England, France, Germany, India, Italy, the Netherlands, Poland, Singapore, the U.S., and Taiwan. Web Site: www.hurco.com
Certain statements in this news release are forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the impact of the COVID-19 pandemic and other public health epidemics and pandemics on the global economy, our business and operations, our employees and the business, operations and economies of our customers and suppliers; the cyclical nature of the machine tool industry; uncertain economic conditions, which may adversely affect overall demand, in the Americas, Europe and Asia Pacific markets; the risks of our international operations; governmental actions, initiatives and regulations, including import and export restrictions, duties and tariffs and changes to tax laws; the effects of changes in currency exchange rates; competition with larger companies that have greater financial resources; the United Kingdom’s withdrawal from the European Union (Brexit); our dependence on new product development; the need and/or ability to protect our intellectual property assets; the limited number of our manufacturing and supply chain sources; increases in the prices of raw materials, especially steel and iron products; the effect of the loss of members of senior management and key personnel; our ability to integrate acquisitions; acquisitions that could disrupt our operations and affect operating results; failure to comply with data privacy and security regulations; breaches of our network and system security measures; possible obsolescence of our technology and the need to make technological advances; impairment of our assets; negative or unforeseen tax consequences; uncertainty concerning our ability to use tax loss carryforwards; changes in the SOFR rate; and other risks and uncertainties discussed more fully under the caption “Risk Factors” in our filings with the Securities and Exchange Commission. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact: | Sonja K. McClelland |
Executive Vice President, Treasurer, & Chief Financial Officer | |
317-293-5309 | |
Hurco Companies, Inc. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
Three Months Ended October 31, | Twelve Months Ended October 31, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
(audited) | (audited) | ||||||||||||||
Sales and service fees | $ | 68,982 | $ | 44,459 | $ | 235,195 | $ | 170,627 | |||||||
Cost of sales and service | 52,048 | 34,939 | 178,946 | 134,170 | |||||||||||
Gross profit | 16,934 | 9,520 | 56,249 | 36,457 | |||||||||||
Selling, general and administrative expenses | 13,829 | 10,344 | 46,001 | 41,416 | |||||||||||
Goodwill impairment | - | 4,903 | - | 4,903 | |||||||||||
Operating income (loss) | 3,105 | (5,727 | ) | 10,248 | (9,862 | ) | |||||||||
Interest expense | 1 | 25 | 24 | 94 | |||||||||||
Interest income | 1 | 26 | 34 | 130 | |||||||||||
Investment income | 19 | 57 | 173 | 133 | |||||||||||
Other income (expense), net | (273 | ) | (177 | ) | (310 | ) | (1,110 | ) | |||||||
Income (loss) before taxes | 2,851 | (5,846 | ) | 10,121 | (10,803 | ) | |||||||||
Provision (benefit) for income taxes | 755 | (2,257 | ) | 3,357 | (4,556 | ) | |||||||||
Net income (loss) | $ | 2,096 | $ | (3,589 | ) | $ | 6,764 | $ | (6,247 | ) | |||||
Income (loss) per common share | |||||||||||||||
Basic | $ | 0.31 | $ | (0.54 | ) | $ | 1.01 | $ | (0.93 | ) | |||||
Diluted | $ | 0.31 | $ | (0.54 | ) | $ | 1.01 | $ | (0.93 | ) | |||||
Weighted average common shares outstanding | |||||||||||||||
Basic | 6,607 | 6,565 | 6,595 | 6,670 | |||||||||||
Diluted | 6,633 | 6,565 | 6,608 | 6,670 | |||||||||||
Dividends per share | $ | 0.14 | $ | 0.13 | $ | 0.55 | $ | 0.51 | |||||||
OTHER CONSOLIDATED FINANCIAL DATA | |||||||||||||||
Three Months Ended October 31, | Twelve Months Ended October 31, | ||||||||||||||
Operating Data: | 2021 | 2020 | 2021 | 2020 | |||||||||||
Gross margin | 25 | % | 21 | % | 24 | % | 21 | % | |||||||
SG&A expense as a percentage of sales | 20 | % | 23 | % | 20 | % | 24 | % | |||||||
Goodwill impairment charges as a percentage of sales | 0 | % | 11 | % | 0 | % | 3 | % | |||||||
Operating income (loss) as a percentage of sales | 5 | % | -13 | % | 4 | % | -6 | % | |||||||
Pre-tax income (loss) as a percentage of sales | 4 | % | -13 | % | 4 | % | -6 | % | |||||||
Effective tax rate | 26 | % | 39 | % | 33 | % | 42 | % | |||||||
Depreciation and amortization | $ | 1,043 | $ | 1,129 | $ | 4,193 | $ | 4,547 | |||||||
Capital expenditures | $ | 535 | $ | 486 | $ | 2,369 | $ | 1,656 | |||||||
Balance Sheet Data: | 10/31/2021 | 10/31/2020 | |||||||||||||
Working capital | $ | 208,700 | $ | 200,974 | |||||||||||
Days sales outstanding (unaudited) | 42 | 45 | |||||||||||||
Inventory turns (unaudited) | 1.2 | 0.9 | |||||||||||||
Capitalization | |||||||||||||||
Total debt | -- | -- | |||||||||||||
Shareholders' equity | 238,419 | 231,148 | |||||||||||||
Total | $ | 238,419 | $ | 231,148 | |||||||||||
Hurco Companies, Inc. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except share and per share data) | |||||||
October 31, | October 31, | ||||||
2021 | 2020 | ||||||
ASSETS | (audited) | (audited) | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 84,063 | $ | 57,859 | |||
Accounts receivable, net | 42,620 | 27,686 | |||||
Inventories, net | 148,216 | 149,864 | |||||
Derivative assets | 905 | 968 | |||||
Prepaid assets | 13,091 | 13,803 | |||||
Other | 975 | 1,231 | |||||
Total current assets | 289,870 | 251,411 | |||||
Property and equipment: | |||||||
Land | 868 | 868 | |||||
Building | 7,352 | 7,352 | |||||
Machinery and equipment | 29,533 | 29,195 | |||||
Leasehold improvements | 5,172 | 4,754 | |||||
42,925 | 42,169 | ||||||
Less accumulated depreciation and amortization | (32,318 | ) | (30,248 | ) | |||
Total property and equipment, net | 10,607 | 11,921 | |||||
Non-current assets: | |||||||
Software development costs, less accumulated amortization | 7,553 | 7,840 | |||||
Intangible assets, net | 1,565 | 1,846 | |||||
Operating lease - right of use assets, net | 10,624 | 11,748 | |||||
Deferred income taxes | 3,154 | 2,479 | |||||
Investments and other assets, net | 9,562 | 8,410 | |||||
Total non-current assets | 32,458 | 32,323 | |||||
Total assets | $ | 332,935 | $ | 295,655 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 48,881 | $ | 27,643 | |||
Customer deposits | 8,593 | 5,356 | |||||
Derivative liabilities | 467 | 872 | |||||
Operating lease liabilities | 4,221 | 4,132 | |||||
Accrued payroll and employee benefits | 10,389 | 6,931 | |||||
Accrued income taxes | 1,192 | 285 | |||||
Accrued expenses | 5,911 | 4,018 | |||||
Accrued warranty expenses | 1,516 | 1,200 | |||||
Total current liabilities | 81,170 | 50,437 | |||||
Non-current liabilities: | |||||||
Deferred income taxes | 68 | 131 | |||||
Accrued tax liability | 1,749 | 1,918 | |||||
Operating lease liabilities | 6,794 | 7,989 | |||||
Deferred credits and other | 4,735 | 4,032 | |||||
Total non-current liabilities | 13,346 | 14,070 | |||||
Shareholders' equity: | |||||||
Preferred stock: no par value per share, 1,000,000 shares authorized; no shares issued | - | - | |||||
Common stock: no par value, $.10 stated value per share, 12,500,000 shares authorized; 6,691,052 and 6,636,906 shares issued and 6,617,717 and 6,565,163 shares outstanding, as of October 31, 2021 and October 31, 2020, respectively | 662 | 657 | |||||
Additional paid-in capital | 63,924 | 60,997 | |||||
Retained earnings | 175,574 | 172,484 | |||||
Accumulated other comprehensive loss | (1,741 | ) | (2,990 | ) | |||
Total shareholders' equity | 238,419 | 231,148 | |||||
Total liabilities and shareholders' equity | $ | 332,935 | $ | 295,655 | |||
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