INDIANAPOLIS, Feb. 28, 2008 (PRIME NEWSWIRE) -- Hurco Companies, Inc., (Nasdaq:HURC) today reported for its first quarter ended January 31, 2008, net income of $7,805,000, or $1.21 per share, which is a 45% increase over the $5,395,000, or $.84 per share, reported for the corresponding period in fiscal 2007.
Sales and service fees for the first quarter of fiscal 2008 totaled $60,923,000, an increase of $14,045,000, or 30%, over the first quarter of fiscal 2007. The effect of a weaker U.S. dollar when translating foreign sales to U.S. dollars for financial reporting purposes had a favorable impact of approximately 10%, or $4,581,000, on the year-to-year comparison.
The following table sets forth net sales and service fees by geographic region for the first quarter of fiscal 2008 and 2007:
Net Sales and Service Fees by Geographic Region
Three Months Ended
January 31,
%
2008 2007 Change
----------------------------
North America $13,079 $13,223 -1%
Europe 45,052 31,494 43%
Asia Pacific 2,792 2,161 29%
----------------------------
Total $60,923 $46,878 30%
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Growth was primarily driven by strong demand in existing European markets, expansion into Eastern European markets, and increased shipments of the higher end VMX product line. Growth in the Asia Pacific region was primarily due to penetration into India, a market targeted by Hurco last year. The effect of a weaker U.S. dollar when translating fiscal 2008 foreign sales into U.S. dollars for financial reporting purposes had a favorable impact of approximately 14% in Europe and 8% in the Asia Pacific market. Sales in North America reflected continued market softness.
New order bookings in the first quarter of fiscal 2008, were $61,147,000, an increase of $14,052,000, or 30%, over the prior year period. Of that increase, European and Asia Pacific orders increased $14,180,000, or 44%, and $603,000, or 27%, respectively. North American bookings declined by $750,000, or 6%.
Hurco's gross margin for the first quarter of fiscal 2008 was 41%, compared to 37% for the 2007 period. The improvement was attributable to increased sales of higher margin VMX products in European sales regions, as well as the impact of a continuing decline in the value of the U.S. dollar when European sales results are translated to U.S. dollars for financial reporting purposes. Selling, general and administrative expenses were $12,376,000 for the first quarter of fiscal 2008, an increase of $3,126,000 over the 2007 period, reflecting greater expenditures for sales, product development and market expansion. The increase also reflected the unfavorable effect of a weaker U.S. dollar during the 2008 period when translating foreign operating expenses for financial reporting purposes.
Hurco's effective tax rate for the first quarter of fiscal 2008 was relatively unchanged compared to the same period in the prior year at approximately 37%.
Cash and short-term investments totaled $35,176,000 as of January 31, 2008, compared to $39,760,000 as of October 31, 2007. Working capital, excluding cash and short-term investments, was $48,884,000 as of January 31, 2008, compared to $36,290,000 as of October 31, 2007, reflecting increases in accounts receivable and inventory due to growth in product demand.
Michael Doar, Hurco's Chief Executive Officer, stated, "Strong first quarter results, despite market softness in the U.S., affirm the importance of our global strategy. Europe continues to exceed expectations. Increased sales in the Asia Pacific region are a direct result of the resources we devoted to India last year to expand our presence in this key market. We will continue to monitor the U.S. market closely."
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 STATEMENT OF OPERATIONS
(In thousands, except per-share data)
Three Months Ended
January 31,
-----------------
2008 2007
---------------------------------------------------------- --------
(unaudited)
Sales and service fees $ 60,923 $ 46,878
Cost of sales and service 36,066 29,554
-------- --------
Gross profit 24,857 17,324
Selling, general and administrative expenses 12,376 9,250
-------- --------
Operating income 12,481 8,074
Interest expense 11 82
Interest income 149 193
Investment income 172 21
Other (income) expense, net 464 (187)
-------- --------
Income before taxes 12,327 8,393
Provision for income taxes 4,522 2,998
-------- --------
Net income $ 7,805 $ 5,395
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Earnings per common share
Basic $ 1.22 $ 0.85
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Diluted $ 1.21 $ 0.84
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Weighted average common shares outstanding
Basic 6,401 6,362
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Diluted 6,433 6,418
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OTHER CONSOLIDATED FINANCIAL DATA Three Months Ended
January 31,
------------------
Operating Data: 2008 2007
-------- --------
(unaudited)
Gross margin 40.8% 37.0%
SG&A expense as a percentage of sales 20.3% 19.7%
Operating income as a percentage of sales 20.5% 17.2%
Pre-tax income as a percentage of sales 20.2% 17.9%
Effective tax rate 36.7% 35.7%
Depreciation 683 388
Capital expenditures 1,147 654
Balance Sheet Data: 1/31/2008 10/31/2007
-------- --------
Working capital $ 84,060 $ 76,050
Days sales outstanding 43 33
Inventory turns 2.0 2.0
Capitalization
Total Debt $ -- $ --
Shareholders' Equity 106,005 97,603
-------- --------
Total $106,005 $ 97,603
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HURCO COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per-share data)
January 31, October 31,
2008 2007
--------------------------------------------------------- --------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 21,176 $ 29,760
Short-term investments 14,000 10,000
Accounts receivable 35,977 25,645
Inventories 63,829 61,121
Deferred tax assets, net 8,249 8,258
Other 3,155 4,481
-------- --------
Total current assets 146,386 139,265
-------- --------
Property and equipment:
Land 776 776
Building 7,135 7,135
Machinery and equipment 14,621 13,629
Leasehold improvements 1,549 1,473
-------- --------
24,081 23,013
Less accumulated depreciation
and amortization (11,935) (11,617)
-------- --------
12,146 11,396
-------- --------
Non-current assets:
Software development costs, less amortization 5,737 5,960
Investments and other assets 7,085 7,160
-------- --------
$171,354 $163,781
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LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 36,730 $ 35,486
Accrued expenses 25,596 27,729
-------- --------
Total current liabilities 62,326 63,215
-------- --------
Non-current liabilities:
Deferred tax liability, net 2,008 1,956
Deferred credits and other obligations 1,015 1,007
-------- --------
Total liabilities 65,349 66,178
-------- --------
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
6,417,220 and 6,392,220 shares issued,
respectively 642 639
Additional paid-in capital 51,079 50,971
Retained earnings 57,174 49,369
Accumulated other comprehensive income (2,890) (3,376)
-------- --------
Total shareholders' equity 106,005 97,603
-------- --------
$171,354 $163,781
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