INDIANAPOLIS, Dec. 15, 2009 (GLOBE NEWSWIRE) -- Hurco Companies, Inc., (Nasdaq:HURC) today reported for its fiscal year ending October 31, 2009, a net loss of $2,321,000, or $(0.36) per diluted share, as compared to net income of $22,520,000, or $3.49 per diluted share, for fiscal 2008. For the fourth quarter of fiscal 2009, Hurco recorded a net loss of $1,163,000, or $(0.18) per diluted share, as compared to net income of $3,422,000, or $0.53 per diluted share, from the corresponding period in fiscal 2008.
Sales and service fees for fiscal 2009 totaled $91,016,000, a decrease of $132,978,000, or 59%, from fiscal 2008. A stronger U.S. Dollar when translating foreign sales to U.S. Dollars for financial reporting purposes during fiscal 2009 accounted for approximately $7,944,000 of the decrease. Sales and service fees for the fourth quarter of fiscal 2009 were $23,181,000, a decrease of $24,287,000, or 51%, from the prior year period.
The following table sets forth net sales and service fees by geographic region for the three and twelve month periods ended October 31, 2009 and 2008 (in thousands), respectively:
Net Sales and Service Fees by Geographic Region
Three Months Ended Twelve Months Ended
October 31, October 31,
% %
2009 2008 Change 2009 2008 Change
-------------------------- --------------------------
North America $ 4,034 $ 12,946 -69% $ 25,652 $ 48,373 -47%
Europe 17,253 33,031 -48% 60,132 163,807 -63%
Asia Pacific 1,894 1,491 27% 5,232 11,814 -56%
-------------------------- --------------------------
Total $ 23,181 $ 47,468 -51% $ 91,016 $223,994 -59%
-------------------------- --------------------------
Since the beginning of fiscal 2009, our operating results have been adversely affected by the ongoing global recession as our customers deferred or eliminated investments in capital equipment. Additionally, during the current recession, customers who might otherwise want to purchase capital goods have found it difficult to obtain financing due to disruptions in the credit markets. During fiscal 2009, these conditions had the greatest impact on our European sales region, the primary market for our more expensive, higher-margin machines. The European sales region accounted for 66% of sales in fiscal 2009 and 73% in fiscal 2008.
New order bookings in fiscal 2009 were $80,605,000, a decrease of $131,925,000, or 62%, from the prior year. This decrease was primarily driven by a decline in European orders, which were down $100,763,000, or 65%. Fiscal 2009 orders in North America decreased $23,934,000, or 51%, and orders in the Asia Pacific sales region decreased $7,228,000, or 65%. New order bookings for the fourth quarter of fiscal 2009 totaled $20,038,000, a decrease of $19,978,000, or 50%, from the prior year period. New order bookings declined by $8,624,000, or 67%, in North America, $11,210,000, or 43%, in Europe, and $144,000, or 12%, in Asia. The impact of currency translation on new orders booked in fiscal 2009 was consistent with its impact on sales.
Hurco's gross margin for fiscal 2009 was 28%, compared to 37% for fiscal 2008. Gross margin for the fourth quarter of fiscal 2009 was 29%, compared to 35% for the prior year period. The decrease in margin as a percentage of sales was due to lower sales of higher-margin VMX machines in the European sales region, the impact of fixed costs on lower sales and production volume, and competitive pricing pressures on a global basis.
Selling, general and administrative expenses were $30,874,000 for fiscal 2009, a decrease of $15,937,000, or 34%, from fiscal 2008, and $8,127,000 for the fourth quarter of fiscal 2009, a decrease of $2,803,000, or 26%, from the fourth quarter of fiscal 2008. These reductions reflect 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 to U.S. Dollars for financial reporting purposes, partially offset by severance expense for a former executive officer.
The $2,874,000 increase in other income for fiscal 2009 in comparison to fiscal 2008 was primarily due to net realized gains of $2,028,000 from cash flow hedges of forecasted inter-company sales and purchases that became ineffective as production levels steeply declined during the fiscal year.
Cash and cash equivalents totaled $28,782,000 as of October 31, 2009, compared to $26,394,000 as of October 31, 2008. Inventory as of October 31, 2009 was $60,281,000, a decrease of $6,087,000 from October 31, 2008. The decreased inventory reflects our reduction in production levels due to lower market demand.
Michael Doar, President and Chief Executive Officer, stated, "I firmly believe that our organizational agility to implement cost savings initiatives quickly and our fiscally conservative culture have minimized the impact of the sales decline we experienced in fiscal 2009. We have maintained a strong cash position and zero debt despite the worldwide economic contraction. As a result, we have been able to maintain schedules for technology innovation, which is fundamental to our product development. This leaves Hurco poised to benefit from the expected economic recovery."
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 Twelve Months Ended
October 31, October 31,
------------------ ------------------
2009 2008 2009 2008
--------------------------------------- -------- -------- --------
(unaudited) (unaudited)
Sales and service fees $ 23,181 $ 47,468 $ 91,016 $223,994
Cost of sales and service 16,366 30,918 65,188 141,377
-------- -------- -------- --------
Gross profit 6,815 16,550 25,828 82,617
Selling, general and
administrative expenses 8,127 10,930 30,874 46,811
-------- -------- -------- --------
Operating income (loss) (1,312) 5,620 (5,046) 35,806
Interest expense 2 18 35 63
Interest income 5 106 190 542
Investment income (16) 102 16 465
Other income (expense), net (765) (1,272) 1,063 (2,584)
-------- -------- -------- --------
Income (loss) before taxes (2,090) 4,538 (3,812) 34,166
Provision (benefit) for income
taxes (927) 1,116 (1,491) 11,646
-------- -------- -------- --------
Net income (loss) $ (1,163) $ 3,422 $ (2,321) $ 22,520
======== ======== ======== ========
Earnings (loss) per common share
Basic $ (0.18) $ 0.53 $ (0.36) $ 3.51
======== ======== ======== ========
Diluted $ (0.18) $ 0.53 $ (0.36) $ 3.49
======== ======== ======== ========
Weighted average common shares
outstanding
Basic 6,441 6,415 6,429 6,415
======== ======== ======== ========
Diluted 6,441 6,436 6,429 6,444
======== ======== ======== ========
OTHER CONSOLIDATED
FINANCIAL DATA Three Months Ended Twelve Months Ended
October 31, October 31,
------------------ ------------------
Operating Data: 2009 2008 2009 2008
-------- -------- -------- --------
(unaudited) (unaudited)
Gross margin 29.4% 34.9% 28.4% 36.9%
SG&A expense as a percentage
of sales 35.1% 23.0% 33.9% 20.9%
Operating income (loss) as a
percentage of sales -5.7% 11.8% -5.5% 16.0%
Pre-tax income as a percentage
of sales -9.0% 9.6% -4.2% 15.3%
Effective Tax Rate 44.4% 24.6% 39.1% 34.1%
Depreciation 844 833 3,295 3,023
Capital expenditures 737 2,058 3,697 5,514
Balance Sheet Data: 10/31/2009 10/31/2008
---------- ----------
Working capital (excluding
cash) $ 68,675 $ 73,789
Days sales outstanding 39 39
Inventory turns 1.0 2.0
Capitalization
Total debt $ -- $ --
Shareholders' equity 120,376 123,477
-------- --------
Total $120,376 $123,477
======== ========
Hurco Companies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per-share data)
Oct. 31, Oct. 31,
2009 2008
----------------------------------------------------------- --------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 28,782 $ 26,394
Short-term investments -- 6,674
Accounts receivable, net 13,988 31,952
Refundable taxes 7,121 --
Inventories, net 60,281 66,368
Deferred tax assets and other, net 5,890 5,444
Derivative assets 376 12,463
Other 1,826 2,017
-------- --------
Total current assets 118,264 151,312
-------- --------
Property and equipment:
Land 782 782
Building 7,116 7,127
Machinery and equipment 14,995 14,885
Leasehold improvements 2,021 1,765
-------- --------
24,914 24,559
Less accumulated depreciation and amortization (11,802) (10,961)
-------- --------
13,112 13,598
-------- --------
Non-current assets:
Software development costs, less accumulated
amortization 6,503 5,711
Other assets 6,864 6,823
-------- --------
$144,743 $177,444
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,262 $ 28,303
Derivative liabilities 2,234 2,692
Accrued expenses 10,311 20,134
-------- --------
Total current liabilities 20,807 51,129
-------- --------
Non-current liabilities:
Deferred tax liabilities, net 2,570 2,056
Deferred credits and other obligations 990 782
-------- --------
Total liabilities 24,367 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
6,440,851 and 6,420,851 shares issued and
outstanding, respectively 644 642
Additional paid-in capital 52,003 51,690
Retained earnings 69,563 71,889
Accumulated other comprehensive loss (1,834) (744)
-------- --------
Total shareholders' equity 120,376 123,477
-------- --------
$144,743 $177,444
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