Hurco Reports Third Quarter Results for Fiscal Year 2023
- None.
- Decreased net income and sales, decreased orders, increased gross profit margin, increased selling, general, and administrative expenses, decreased cash and cash equivalents
INDIANAPOLIS, Sept. 08, 2023 (GLOBE NEWSWIRE) -- Hurco Companies, Inc. (Nasdaq: HURC) today reported results for the third fiscal quarter ended July 31, 2023. Hurco recorded net income of
Sales and service fees for the third quarter of fiscal year 2023 were
Greg Volovic, Chief Executive Officer, stated, “This quarter we saw softening conditions in the key machine tool markets in the world (U.S., China, and Germany). In contrast, smaller European markets like Italy, the United Kingdom and France achieved higher sales with the benefit of a strong mix of higher-performance VMX and five-axis machine sales. We experienced improved orders and sales of Milltronics machines in Europe, a market we are focused on growing, and increased sales of electromechanical components and accessories manufactured by LCM. Our highest priority is to focus on reducing inventory levels and generating higher levels of cash flow for the rest of the year as we adjust production to changing levels of demand. We remain patient and poised for the markets to recover with a plan for new products and a strong balance sheet that will allow us to continue our investment in the best technology for our customers.”
The following table sets forth net sales and service fees by geographic region for the third fiscal quarter and nine months ended July 31, 2023, and 2022 (dollars in thousands):
Three Months Ended | Nine Months Ended | ||||||||||||||||||
July 31, | July 31, | ||||||||||||||||||
2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | ||||||||||||
Americas | $ | 18,272 | $ | 23,736 | $ | (5,464 | ) | -23 | % | $ | 58,609 | $ | 70,154 | $ | (11,545 | ) | -16 | % | |
Europe | 31,162 | 28,932 | 2,230 | 8 | % | 89,745 | 93,932 | (4,187 | ) | -4 | % | ||||||||
Asia Pacific | 3,767 | 4,972 | (1,205 | ) | -24 | % | 13,348 | 23,266 | (9,918 | ) | -43 | % | |||||||
Total | $ | 53,201 | $ | 57,640 | $ | (4,439 | ) | -8 | % | $ | 161,702 | $ | 187,352 | $ | (25,650 | ) | -14 | % |
Sales in the Americas for the third quarter and nine months of fiscal year 2023 decreased by
European sales for the third quarter of fiscal year 2023 increased by
European sales for the nine months of fiscal year 2023 decreased by
Asian Pacific sales for the third quarter and nine months of fiscal year 2023 decreased by
Orders for the third quarter of fiscal year 2023 were
The following table sets forth new orders booked by geographic region for the third fiscal quarter and nine months ended July 31, 2023, and 2022 (dollars in thousands):
Three Months Ended | Nine Months Ended | ||||||||||||||||||
July 31, | July 31, | ||||||||||||||||||
2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | ||||||||||||
Americas | $ | 14,607 | $ | 21,652 | $ | (7,045 | ) | -33 | % | $ | 56,548 | $ | 68,189 | $ | (11,641 | ) | -17 | % | |
Europe | 24,752 | 26,429 | (1,677 | ) | -6 | % | 87,632 | 94,964 | (7,332 | ) | -8 | % | |||||||
Asia Pacific | 2,723 | 4,801 | (2,078 | ) | -43 | % | 11,355 | 19,442 | (8,087 | ) | -42 | % | |||||||
Total | $ | 42,082 | $ | 52,882 | $ | (10,800 | ) | -20 | % | $ | 155,535 | $ | 182,595 | $ | (27,060 | ) | -15 | % |
Orders in the Americas for the third quarter and nine months of fiscal year 2023 decreased by
European orders for the third quarter of fiscal year 2023 decreased by
European orders for the nine months of fiscal year 2023 decreased by
Asian Pacific orders for the third quarter and nine months of fiscal year 2023 decreased by
Gross profit for the third quarter of fiscal year 2023 was
Selling, general, and administrative expenses for the third quarter of fiscal year 2023 were
The effective tax rates for the third quarter and nine months of fiscal year 2023 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, the Czech Republic, 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 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; 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; 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; 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 July 31, | Nine Months Ended July 31, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Sales and service fees | $ | 53,201 | $ | 57,640 | $ | 161,702 | $ | 187,352 | |||||||
Cost of sales and service | 39,753 | 43,241 | 122,953 | 140,444 | |||||||||||
Gross profit | 13,448 | 14,399 | 38,749 | 46,908 | |||||||||||
Selling, general and administrative expenses | 12,436 | 12,647 | 35,512 | 36,859 | |||||||||||
Operating income | 1,012 | 1,752 | 3,237 | 10,049 | |||||||||||
Interest expense | 88 | 9 | 159 | 22 | |||||||||||
Interest income | 122 | 16 | 259 | 69 | |||||||||||
Investment income (loss), net | 11 | (11 | ) | 47 | 170 | ||||||||||
Other income (expense), net | (412 | ) | (22 | ) | (131 | ) | (440 | ) | |||||||
Income before taxes | 645 | 1,726 | 3,253 | 9,826 | |||||||||||
Provision for income taxes | 385 | 488 | 1,286 | 3,024 | |||||||||||
Net income | $ | 260 | $ | 1,238 | $ | 1,967 | $ | 6,802 | |||||||
Income per common share | |||||||||||||||
Basic | $ | 0.04 | $ | 0.19 | $ | 0.30 | $ | 1.02 | |||||||
Diluted | $ | 0.04 | $ | 0.18 | $ | 0.30 | $ | 1.01 | |||||||
Weighted average common shares outstanding | |||||||||||||||
Basic | 6,462 | 6,567 | 6,511 | 6,585 | |||||||||||
Diluted | 6,469 | 6,629 | 6,538 | 6,637 | |||||||||||
Dividends per share | $ | 0.16 | $ | 0.15 | $ | 0.47 | $ | 0.44 | |||||||
OTHER CONSOLIDATED FINANCIAL DATA | |||||||||||||||
Three Months Ended July 31, | Nine Months Ended July 31, | ||||||||||||||
Operating Data: | 2023 | 2022 | 2023 | 2022 | |||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Gross margin | 25 | % | 25 | % | 24 | % | 25 | % | |||||||
SG&A expense as a percentage of sales | 23 | % | 22 | % | 22 | % | 20 | % | |||||||
Operating income as a percentage of sales | 2 | % | 3 | % | 2 | % | 5 | % | |||||||
Pre-tax income as a percentage of sales | 1 | % | 3 | % | 2 | % | 5 | % | |||||||
Effective tax rate | 60 | % | 28 | % | 40 | % | 31 | % | |||||||
Depreciation and amortization | $ | 1,037 | $ | 1,049 | $ | 3,141 | $ | 2,956 | |||||||
Capital expenditures | $ | 345 | $ | 522 | $ | 1,751 | $ | 1,628 | |||||||
Balance Sheet Data: | 7/31/2023 | 10/31/2022 | |||||||||||||
Working capital | $ | 198,120 | $ | 194,733 | |||||||||||
Days sales outstanding | 54 | 38 | |||||||||||||
Inventory turns | 1.0 | 1.2 | |||||||||||||
Capitalization | |||||||||||||||
Total debt | -- | -- | |||||||||||||
Shareholders' equity | 225,801 | 222,644 | |||||||||||||
Total | $ | 225,801 | $ | 222,644 | |||||||||||
Hurco Companies, Inc. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except share and per share data) | |||||||
July 31, | October 31, | ||||||
2023 | 2022 | ||||||
ASSETS | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 41,030 | $ | 63,922 | |||
Accounts receivable, net | 33,281 | 38,444 | |||||
Inventories, net | 178,423 | 156,207 | |||||
Derivative assets | 169 | 2,515 | |||||
Prepaid and other assets | 9,060 | 6,981 | |||||
Total current assets | 261,963 | 268,069 | |||||
Property and equipment: | |||||||
Land | 1,046 | 868 | |||||
Building | 7,392 | 7,352 | |||||
Machinery and equipment | 27,940 | 26,532 | |||||
Leasehold improvements | 4,638 | 4,351 | |||||
41,016 | 39,103 | ||||||
Less accumulated depreciation and amortization | (33,119 | ) | (30,620 | ) | |||
Total property and equipment, net | 7,897 | 8,483 | |||||
Non-current assets: | |||||||
Software development costs, less accumulated amortization | 7,085 | 7,302 | |||||
Intangible assets, net | 1,071 | 1,246 | |||||
Operating lease - right of use assets, net | 10,921 | 8,460 | |||||
Deferred income taxes | 4,305 | 3,442 | |||||
Investments and other assets, net | 9,975 | 9,235 | |||||
Total non-current assets | 33,357 | 29,685 | |||||
Total assets | $ | 303,217 | $ | 306,237 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 36,338 | $ | 40,707 | |||
Customer deposits | 5,502 | 4,839 | |||||
Derivative liabilities | 2,603 | 3,632 | |||||
Operating lease liabilities | 3,945 | 3,973 | |||||
Accrued payroll and employee benefits | 8,331 | 10,751 | |||||
Accrued income taxes | 1,545 | 2,611 | |||||
Accrued expenses | 4,261 | 5,397 | |||||
Accrued warranty expenses | 1,318 | 1,426 | |||||
Total current liabilities | 63,843 | 73,336 | |||||
Non-current liabilities: | |||||||
Deferred income taxes | 88 | 67 | |||||
Accrued tax liability | 1,290 | 1,281 | |||||
Operating lease liabilities | 7,342 | 4,814 | |||||
Deferred credits and other | 4,853 | 4,095 | |||||
Total non-current liabilities | 13,573 | 10,257 | |||||
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; 6,553,673 and 6,645,352 shares issued and 6,462,138 and 6,566,994 shares outstanding, as of July 31, 2023 and October 31, 2022, respectively | 646 | 657 | |||||
Additional paid-in capital | 61,274 | 63,635 | |||||
Retained earnings | 178,751 | 179,877 | |||||
Accumulated other comprehensive loss | (14,870 | ) | (21,525 | ) | |||
Total shareholders' equity | 225,801 | 222,644 | |||||
Total liabilities and shareholders' equity | $ | 303,217 | $ | 306,237 |