INDIANAPOLIS, Dec. 7, 2007 (PRIME NEWSWIRE) -- Hurco Companies, Inc. (Nasdaq:HURC), today reported for its fiscal year ending October 31, 2007, net income of $20,889,000, or $3.24 per share, which is an increase of 35% over fiscal 2006 net income of $15,479,000, or $2.42 per share. For the fourth quarter of fiscal 2007, Hurco recorded net income of $5,648,000, or $0.88 per share, which is an increase of 20% over $4,714,000, or $0.74 per share, for the corresponding period in fiscal 2006.
Sales and service fees for fiscal 2007 totaled $188,047,000, an increase of $39,530,000, or 27%, over fiscal 2006. Sales and service fees for the fourth quarter of fiscal 2007 were $50,120,000, an increase of $6,956,000, or 16%, over the prior year period. The effect of a weaker U.S. dollar when translating foreign sales to U.S. dollars for financial reporting purposes had a favorable impact on the year over year sales comparison of approximately 7%, or $11,011,000. The currency translation impact on fourth quarter sales comparison was also 7%, or $3,179,000.
The following table sets forth net sales and service fees by geographic region for the three and twelve month periods ended October 31, 2007 and 2006, respectively:
Net Sales and Service Fees by Geographic Region
Three Months Ended Twelve Months Ended
October 31, October 31,
% %
2007 2006 Change 2007 2006 Change
------------------------- -------------------------
North America $ 14,242 $ 14,386 -1% $ 52,133 $ 50,563 3%
Europe 32,215 25,498 26% 125,446 87,735 43%
Asia Pacific 3,663 3,280 12% 10,468 10,219 2%
------------------------- -------------------------
Total $ 50,120 $ 43,164 16% $188,047 $148,517 27%
------------------------- -------------------------
The annual and fourth quarter sales growth was primarily driven by a strong European market and continued demand for our higher end VMX product line across all three geographical regions. The effect of a weaker U.S. dollar when translating foreign sales dollars for financial reporting purposes had a favorable impact of approximately 12% on the European sales comparison for both the full year and fourth quarter. Sales in the United States, for the fourth quarter and full year, reflected market softening primarily in the Midwest. Asia Pacific sales remained relatively unchanged for the year, as Hurco continues the development of its selling channels in China and India.
New order bookings in fiscal 2007, were $198,975,000, an increase of $44,208,000, or 29%, over the prior year. Fourth quarter new order bookings totaled $54,782,000, an increase of $12,695,000, or 30%, over the corresponding 2006 period. Europe was the primary contributor to both the annual and quarterly increases. The impact of currency translation on new orders booked was consistent with the impact on sales and service fees year over year.
Hurco's gross margin for fiscal 2007 was 38%, compared to 36% for the prior year, reflecting the impact of higher sales and improved mix. Gross margin for the fourth quarter of fiscal 2007, was 38%, unchanged from the corresponding period in fiscal 2006. Selling, general and administrative expenses were $40,124,000 for fiscal 2007, an increase of $9,427,000 over the amount for fiscal 2006, and $11,241,000 for the fourth quarter of fiscal 2007, an increase of $1,372,000 over the fourth quarter of fiscal 2006. The increases for both the full year and the fourth quarter were primarily attributable to expenses supporting sales growth and market expansion.
Hurco's effective tax rate for fiscal 2007 was 36%, compared to 33% for the same period in the prior year. The 2006 lower effective tax rate was primarily due to a deduction generated from a change in tax code. The effective tax rate for the fourth quarter of fiscal 2007 was 30%, compared to 31% for the same period in the prior year. The reduction in the fourth quarter effective tax rate was due to year to year differences in the relative income of various foreign subsidiaries and the utilization of foreign net operating losses and domestic tax credits.
Cash and cash equivalents totaled $39,760,000 as of October 31, 2007, compared to $29,846,000 as of October 31, 2006. Working capital, excluding cash and short-term debt, was $33,290,000 as of October 31, 2007, compared to $26,832,000 as of October 31, 2006. The increase in working capital relates to inventory to support increased order volume, particularly for Hurco's larger machines.
Michael Doar, Chief Executive Officer, stated, "This was another great year for Hurco as we achieved even greater milestones. It is fitting that Hurco is in the best financial position of its history as we kick off our 40-year anniversary."
Doar attributed the Company's successful financial position to the strategic plan that was implemented in 2001. "Focusing on our core competencies has allowed Hurco to develop the Hurco brand and strengthen its presence globally. Using a disciplined approach, Hurco has leveraged its extendable platforms to support its global business model and expansion in emerging markets. These platforms encompass all areas of the business, including product development, software development, marketing and sales, manufacturing and information technology," stated Doar.
Hurco Companies, Inc. is an industrial technology company that designs and produces interactive computer controls, software and computerized machine tools for the worldwide metal cutting and metal forming industry. The end market for the Company's products consists primarily of independent job shops and short-run manufacturing operations within large corporations in industries such as the aerospace, defense, medical equipment, energy, transportation and computer equipment. The Company is based in Indianapolis, Indiana, and has sales, application engineering and service subsidiaries in High Wycombe, England; Munich, Germany; Paris, France; Milan, Italy; Shanghai, China; Mississauga, Canada and Singapore, along with manufacturing operations in Taiwan and China. Products are sold through independent agents and distributors in North America, Europe and Asia. The Company also has direct sales forces in the United Kingdom, Germany, France, Italy, Canada, and Asia.
Web Site: www.hurco.com
This news release contains forward looking statements which 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, changes in general economic and business conditions that affect demand for computerized machine systems, computer numerical control systems and software products, changes in manufacturing markets, innovations by competitors, our ability to protect our intellectual property, fluctuations in exchange rates, fluctuations in prices of raw materials, changes in market demands, quality and delivery performance by our contract manufacturers and governmental actions and initiatives including import and export restrictions and tariffs.
Hurco Companies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per-share data)
October 31, October 31,
2007 2006
------------------------------------------------------- ---------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 39,760 $ 29,846
Accounts receivable 25,645 22,248
Inventories 61,121 43,343
Deferred tax assets, net 5,909 2,768
Other 4,481 2,677
--------- ---------
Total current assets 136,916 100,882
--------- ---------
Property and equipment:
Land 776 761
Building 7,135 7,234
Machinery and equipment 13,629 12,952
Leasehold improvements 1,473 1,147
--------- ---------
23,013 22,094
Less accumulated depreciation and
amortization (11,617) (12,944)
--------- ---------
11,396 9,150
--------- ---------
Deferred tax assets, net 774 1,121
Software development costs, less
amortization 5,960 5,580
Investments and other assets 7,160 7,381
--------- ---------
$ 162,206 $ 124,114
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,486 $ 26,605
Accrued expenses 28,380 17,599
Current portion of long-term debt -- 136
--------- ---------
Total current liabilities 63,866 44,340
--------- ---------
Non-current liabilities:
Long-term debt -- 3,874
Deferred credits and other obligations 737 525
--------- ---------
Total liabilities 64,603 48,739
--------- ---------
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; and 6,392,220 and
6,346,520 shares issued, respectively 639 635
Additional paid-in capital 50,971 50,011
Retained earnings 49,367 28,480
Accumulated other comprehensive income (3,374) (3,751)
--------- ---------
Total shareholders' equity 97,603 75,375
--------- ---------
$ 162,206 $ 124,114
========= =========
Hurco Companies, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per-share data)
Three Months Ended Twelve Months Ended
October 31, October 31,
-------------------- --------------------
2007 2006 2007 2006
------------------------------------ --------- --------- ---------
(unaudited) (unaudited)
Sales and service fees $ 50,120 $ 43,164 $ 188,047 $ 148,517
Cost of sales and service 31,128 26,780 116,965 95,192
--------- --------- --------- ---------
Gross profit 18,992 16,384 71,082 53,325
Selling, general and
administrative expenses 11,241 9,869 40,124 30,697
--------- --------- --------- ---------
Operating income 7,751 6,515 30,958 22,628
Interest expense
(income) (17) 18 (65) 259
Other income (expense),
net 335 337 1,742 745
--------- --------- --------- ---------
Income before taxes 8,103 6,834 32,765 23,114
Provision for income
taxes 2,455 2,120 11,876 7,635
--------- --------- --------- ---------
Net income $ 5,648 $ 4,714 $ 20,889 $ 15,479
========= ========= ========= =========
Earnings per common
share
Basic $ 0.88 $ 0.75 $ 3.27 $ 2.45
========= ========= ========= =========
Diluted $ 0.88 $ 0.74 $ 3.24 $ 2.42
========= ========= ========= =========
Weighted average common
shares outstanding
Basic 6,382 6,317 6,382 6,317
========= ========= ========= =========
Diluted 6,445 6,396 6,440 6,397
========= ========= ========= =========
OTHER CONSOLIDATED Three Months Ended Twelve Months Ended
FINANCIAL DATA October 31, October 31,
-------------------- --------------------
Operating Data: 2007 2006 2007 2006
--------- --------- --------- ---------
(unaudited) (unaudited)
Gross margin 37.9% 38.0% 37.8% 35.9%
SG&A expense as a
percentage of sales 22.4% 22.9% 21.3% 20.7%
Operating income as a
percentage of sales 15.5% 15.1% 16.5% 15.2%
Income before taxes as a
percentage of sales 16.2% 15.8% 17.4% 15.6%
Effective Tax Rate 30.3% 31.0% 36.2% 33.0%
Depreciation 730 387 2,106 1,504
Capital expenditures 2,212 1,183 4,510 3,301
Balance Sheet Data: 10/31/2007 10/31/2006
---------- ----------
Working capital
(excluding short term
debt) $ 73,050 $ 56,678
Days sales outstanding 33 41
Inventory turns 2.0 2.2
Capitalization
Total debt $ -- $ 4,010
Shareholders' equity 97,603 75,375
---------- ----------
Total $ 97,603 $ 79,385
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