INDIANAPOLIS, May 29, 2009 (GLOBE NEWSWIRE) -- May 29, 2009, Hurco Companies, Inc., (Nasdaq:HURC) today reported a net loss of $281,000, or $0.04 per share, for its second quarter ended April 30, 2009, compared to net income of $5,467,000, or $0.85 per share, for the corresponding period in fiscal 2008. The results for the second quarter of 2009 included $2,202,000, or $0.34 per diluted share, of net realized gains on hedge contracts closed before maturity due to forecasted reductions in production and sales for the next six months. For the first six months of fiscal 2009, Hurco reported net income of $73,000, or $0.01 per share, compared to $13,272,000, or $2.06 per share, reported for the corresponding period in fiscal 2008.
Sales and service fees for the second quarter of fiscal 2009 totaled $20,489,000, a decrease of $37,796,000, or 65%, from the second quarter of fiscal 2008. Approximately $3,150,000 of the year-over-year decrease, or 5% of second quarter 2008 sales, reflects the effect of a stronger U.S. Dollar in 2009 when translating foreign sales to U.S. Dollars for financial reporting purposes. Sales and service fees for the six months ended April 30, 2009, totaled $48,796,000, a decrease of $70,412,000, or 59%, from the corresponding period in 2008. The impact of currency translation on the year-over-year sales reduction for the first six months of fiscal 2009 was approximately $6,046,000, or 5% of year to date sales for the corresponding period in fiscal 2008.
The following table sets forth net sales and service fees by geographic region for the second quarter and first half of fiscal 2009 and 2008, respectively:
Net Sales and Service Fees by Geographic Region Three Months Ended Six Months Ended April 30, April 30, % % 2009 2008 Change 2009 2008 Change -------------------------- -------------------------- North America $ 6,171 $ 11,706 -47% $ 15,808 $ 24,785 -36% Europe 13,042 42,653 -69% 31,102 87,705 -65% Asia Pacific 1,276 3,926 -67% 1,886 6,718 -72% -------------------------- -------------------------- Total $ 20,489 $ 58,285 -65% $ 48,796 $119,208 -59% -------------------------- --------------------------
Similar to the first quarter of fiscal 2009, sales were down sharply across all regions due to the worldwide recession. In addition to declining volume and the unfavorable impact of currency translation, approximately 29% of the sales decline was attributable to a decrease in sales of higher priced VMX machines in the Europe sales region, and competitive pricing pressures globally.
New order bookings in the second quarter of fiscal 2009 were $18,135,000, a decrease of $40,775,000, or 69%, compared to the prior year period. Orders in the North America, Europe and Asia Pacific regions decreased $6,233,000, or 56%, $31,527,000, or 72%, and $3,015,000, or 75%, respectively, continuing a decrease that began in the first quarter as Hurco customers, consisting primarily of small job shops, reacted to the economic downturn in their markets. For the first half of fiscal 2009, new orders totaled $42,651,000, a decrease of $77,406,000, or 65%, from the corresponding period in 2008. Of that decrease, North America, Europe and Asia Pacific orders decreased $9,888,000, or 42%, $62,281,000, or 69%, and $5,237,000, or 77%, respectively. The impact of currency translation on new orders booked in the second quarter and first half of 2009 was consistent with the impact on sales.
Hurco's gross margin for the second quarter of fiscal 2009 was 26%, compared to 35% for the 2008 period. The decrease in margin as a percentage of sales was due to the lower sales volume, the decline in sales of higher priced VMX machines in the European sales region, and competitive pricing pressures on a global basis. Selling, general and administrative expenses were $7,518,000, a decrease of $4,158,000, or 36%, from the corresponding period in 2008, reflecting lower sales commissions, the benefit of cost reduction initiatives and the favorable effect of a stronger U.S. Dollar in 2009 when translating foreign operating expenses for financial reporting purposes.
The increase in other income of $2,144,000 for the second quarter of fiscal 2009 compared to the same period in fiscal 2008 was primarily due to $2,202,000 of net realized gains on hedge contracts closed before maturity due to forecasted reductions in production and sales for the next six months.
Cash decreased by $2,276,000 from January 31, 2009 to $27,850,000 at April 30, 2009, primarily due to a $1,586,000 increase in inventories. Production levels are being adjusted downward to bring inventory levels more in line with current demand.
Michael Doar, Chief Executive Officer, said, "Although the order pattern this quarter has stabilized, we will continue our fiscally conservative approach so that the company will be ready to capitalize on opportunities when conditions improve. Our lean organizational structure has allowed us to respond quickly to the current economic contraction. We have implemented cost savings initiatives, including management and employee pay reductions, workforce reductions, the suspension of corporate 401K matching contributions, restriction on travel expenditures, and intensified inventory control, without sacrificing progress on business critical initiatives. This approach allows us to maintain our product development schedules and technology innovation efforts."
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 aerospace, defense, medical equipment, energy, transportation and computer equipment. The Company is based in Indianapolis, Indiana, with manufacturing operations in Taiwan and China, and sells its products through direct and indirect sales forces throughout North America, Europe, and Asia. The company has sales, application engineering support and service subsidiaries in Canada, China, England, France, Germany, India, Italy, Poland, Singapore, South Africa, Spain, and the United States of America. 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, the impact of the current global economic recession, including disruption in credit markets, other 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 STATEMENT OF OPERATIONS (In thousands, except per-share data) Three Months Ended Six Months Ended April 30, April 30, ------------------ ------------------ 2009 2008 2009 2008 -------- -------- -------- -------- (unaudited) (unaudited) Sales and service fees $ 20,489 $ 58,285 $ 48,796 $119,208 Cost of sales and service 15,269 37,954 35,034 74,020 -------- -------- -------- -------- Gross profit 5,220 20,331 13,762 45,188 Selling, general and administrative expenses 7,518 11,676 15,547 24,052 -------- -------- -------- -------- Operating income (loss) (2,298) 8,655 (1,785) 21,136 Interest expense 4 10 27 21 Interest income 45 133 149 282 Investment income 1 119 29 291 Other expense (income), net (1,768) 376 (1,695) 840 -------- -------- -------- -------- Income (loss) before taxes (488) 8,521 61 20,848 Provision (benefit) for income taxes (207) 3,054 (12) 7,576 -------- -------- -------- -------- Net income (loss) $ (281) $ 5,467 $ 73 $ 13,272 ======== ======== ======== ======== Earnings (loss) per common share Basic $ (0.04) $ 0.85 $ 0.01 $ 2.07 ======== ======== ======== ======== Diluted $ (0.04) $ 0.85 $ 0.01 $ 2.06 ======== ======== ======== ======== Weighted average common shares outstanding Basic 6,421 6,410 6,421 6,410 ======== ======== ======== ======== Diluted 6,421 6,444 6,430 6,442 ======== ======== ======== ========
OTHER CONSOLIDATED FINANCIAL DATA Three Months Ended Six Months Ended April 30, April 30, ------------------ ------------------ Operating Data: 2009 2008 2009 2008 -------- -------- -------- -------- (unaudited) (unaudited) Gross margin 25.5% 34.9% 28.2% 37.9% SG&A expense as a percentage of sales 36.7% 20.0% 31.9% 20.2% Operating income as a percentage of sales -11.2% 14.8% -3.7% 17.7% Pre-tax income as a percentage of sales -2.4% 14.6% 0.1% 17.5% Effective Tax Rate 42.4% 35.8% -19.7% 36.3% Depreciation 814 730 1,605 1,413 Capital expenditures 968 767 2,319 1,914
Balance Sheet Data: 4/30/2009 4/30/2008 --------- --------- (unaudited) Working capital (excluding cash) $ 69,526 $ 59,624 Days sales outstanding 55 43 Inventory turns 1.6 2.0 Capitalization Total debt $ -- $ -- Shareholders' equity 121,917 112,563 --------- --------- Total $ 121,917 $ 112,563 ========= =========
HURCO COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In thousands, except share and per-share data) April 30, Oct. 31, 2009 2008 --------- --------- (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $ 27,850 $ 26,394 Short-term investments -- 6,674 Accounts receivable, net 15,903 31,952 Inventories, net 64,880 66,368 Deferred tax assets, net 7,856 5,444 Derivative assets 1,446 12,463 Other 2,591 2,017 --------- --------- Total current assets 120,526 151,312 --------- --------- Property and equipment: Land 782 782 Building 7,127 7,127 Machinery and equipment 15,952 14,885 Leasehold improvements 1,878 1,765 --------- --------- 25,739 24,559 Less accumulated depreciation and amortization (11,900) (10,961) --------- --------- 13,839 13,598 --------- --------- Non-current assets: Software development costs, less accumulated amortization 6,097 5,711 Other assets 7,438 6,823 --------- --------- $ 147,900 $ 177,444 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 10,678 $ 28,303 Derivative liabilities 1,452 2,692 Accrued expenses 11,020 20,134 --------- --------- Total current liabilities 23,150 51,129 --------- --------- Non-current liabilities: Deferred tax liabilities, net 2,006 2,056 Deferred credits and other obligations 827 782 --------- --------- Total liabilities 25,983 53,967 --------- --------- 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; 13,250,000 shares authorized; and 6,420,851 shares issued and outstanding 642 642 Additional paid-in capital 51,804 51,690 Retained earnings 71,962 71,889 Accumulated other comprehensive income (2,491) (744) --------- --------- Total shareholders' equity 121,917 123,477 --------- --------- $ 147,900 $ 177,444 ========= =========