INDIANAPOLIS, May 23, 2008 (PRIME NEWSWIRE) -- Hurco Companies, Inc., (Nasdaq:HURC) today reported for its second quarter ended April 30, 2008, net income of $5,467,000, or $.85 per share, a 17% increase over the $4,680,000, or $.73 per share, reported for the corresponding period in fiscal 2007. For the first six months of fiscal 2008, Hurco reported net income of $13,272,000, or $2.06 per share, a 32% increase over the $10,075,000, or $1.57 per share, reported for the corresponding period in fiscal 2007.
Sales and service fees for the second quarter of fiscal 2008 totaled $58,285,000, an increase of $15,791,000, or 37%, over the second quarter of fiscal 2007. Approximately $5,252,000, or 12%, of the year-over-year increase reflects the effect of a weaker U.S. dollar when translating foreign sales to U.S. dollars for financial reporting purposes. Sales and service fees for the six months ended April 30, 2008, totaled $119,208,000, an increase of $29,836,000, or 33%, over the corresponding period in 2007.
The following table sets forth net sales and service fees by geographic region for the second quarter of fiscal 2008 and 2007:
Net Sales and Service Fees by Geographic Region
Three Months Ended
April 30,
%
2008 2007 Change
-----------------------------
North America $ 11,706 $ 11,581 1%
Europe 42,653 28,694 49%
Asia Pacific 3,926 2,219 77%
-----------------------------
Total $ 58,285 $ 42,494 37%
-----------------------------
Growth was primarily driven by strong demand in existing European markets and expansion into Eastern European markets. Growth in the Asia Pacific region was primarily due to targeted penetration into new markets. 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 17% in Europe and 14% in the Asia Pacific market. Sales in North America reflected continued market softness.
New order bookings in the second quarter of fiscal 2008 were $58,892,000, an increase of $10,439,000, or 22%, over the prior year period. European orders increased $10,921,000, or 33%, while North American and Asia Pacific orders decreased $357,000, or 3%, and $125,000, or 3%, respectively. For the six months ended April 30, 2008, new orders totaled $120,039,000, an increase of $24,491,000, or 26%, over the corresponding period in 2007.
Hurco's gross margin for the second quarter of fiscal 2008 was 35%, compared to 39% for the 2007 period. The reduction in gross margin was primarily attributable to competitive pricing pressure and increased product costs. Selling, general and administrative expenses were $11,676,000 for the second quarter of fiscal 2008, an increase of $2,271,000 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.
Cash increased by $4,433,000 for the second quarter to $25,609,000 primarily due to sales of short-term investments in auction rate securities. Inventory increased by $4,906,000 for the second quarter to $68,735,000 primarily due to the effect of a weaker U.S. dollar when translating foreign inventory for financial reporting purposes. The increase also reflects higher levels of inventory at the company's manufacturing facilities to support growth in product demand and the forthcoming launch of new products.
"While there is no denying the economic pressure being felt in many markets, Hurco is fortunate that the strategic plan we have continued to implement during the past seven years allows the company to endure these cycles," said Chief Executive Officer Michael Doar. "Our financial position is such that we are able to execute our new product plan and targeted market expansion as scheduled. We opened a second manufacturing plant at Hurco Manufacturing Limited and we're finalizing an unprecedented number of new product introductions. Of note is our entry into the large machining center category and expansion of our 5-axis lines and multi-tasking machines. The 5-axis machining centers and multi-tasking machines are in demand as customers worldwide require increased productivity to remain competitive. All of these machines will be part of the biggest new product introduction in the company's 40-year history, which will be held at the International Manufacturing Technology Show in September," said 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; Chennai, India; 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 Six Months Ended
April 30, April 30,
------------------ ------------------
2008 2007 2008 2007
--------------------------------------- -------- -------- --------
(unaudited) (unaudited)
Sales and service fees $ 58,285 $ 42,494 $119,208 $ 89,372
Cost of sales and service 37,954 26,145 74,020 55,700
-------- -------- -------- --------
Gross profit 20,331 16,349 45,188 33,672
Selling, general and
administrative expenses 11,676 9,405 24,052 18,655
-------- -------- -------- --------
Operating income 8,655 6,944 21,136 15,017
Interest expense 10 71 21 154
Interest Income 133 196 282 389
Investment Income 119 57 291 78
Other (income) expense, net 376 (318) 840 (506)
-------- -------- -------- --------
Income before taxes 8,521 7,444 20,848 15,836
Provision for income taxes 3,054 2,764 7,576 5,761
-------- -------- -------- --------
Net income $ 5,467 $ 4,680 $ 13,272 $ 10,075
======== ======== ======== ========
Earnings per common share
Basic $ 0.85 $ 0.73 $ 2.07 $ 1.58
======== ======== ======== ========
Diluted $ 0.85 $ 0.73 $ 2.06 $ 1.57
======== ======== ======== ========
Weighted average common shares
outstanding
Basic 6,410 6,373 6,410 6,373
======== ======== ======== ========
Diluted 6,444 6,431 6,442 6,427
======== ======== ======== ========
OTHER CONSOLIDATED FINANCIAL DATA
Three Months Ended Six Months Ended
April 30, April 30,
------------------ ------------------
Operating Data: 2008 2007 2008 2007
-------- -------- -------- --------
(unaudited) (unaudited)
Gross margin 34.9% 38.5% 37.9% 37.7%
SG&A expense as a percentage of
sales 20.0% 22.1% 20.2% 20.9%
Operating income as a
percentage of sales 14.8% 16.3% 17.7% 16.8%
Pre-tax income as a percentage
of sales 14.6% 17.5% 17.5% 17.7%
Effective Tax Rate 35.8% 37.1% 36.3% 36.4%
Depreciation 730 396 1,413 787
Capital expenditures 767 984 1,914 1,642
Balance Sheet Data: 4/30/2008 4/30/2007
--------- ---------
Working capital (excluding
short term debt) $ 85,233 $ 61,938
Days sales outstanding 43 45
Inventory turns 2.0 2.5
Capitalization
Total debt $ -- $ --
Shareholders' equity 112,563 86,199
-------- --------
Total $112,563 $ 86,199
======== ========
HURCO COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per-share data)
April 30, October 31,
2008 2007
-------------------------------------------------------- ----------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 25,609 $ 29,760
Short-term investments 3,650 10,000
Accounts receivable, net 35,741 25,645
Inventories, net 68,735 61,121
Deferred tax assets, net 8,810 8,258
Other 5,960 4,481
---------- ----------
Total current assets 148,505 139,265
---------- ----------
Property and equipment:
Land 776 776
Building 7,135 7,135
Machinery and equipment 14,643 13,629
Leasehold improvements 1,668 1,473
---------- ----------
24,222 23,013
Less accumulated depreciation and
amortization (11,606) (11,617)
---------- ----------
12,616 11,396
---------- ----------
Non-current assets:
Software development costs, less amortization 5,542 5,960
Long-term investments 4,774 --
Other assets 7,284 7,160
---------- ----------
$ 178,721 $ 163,781
========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 36,750 $ 35,486
Accrued expenses 26,522 27,729
---------- ----------
Total current liabilities 63,272 63,215
---------- ----------
Non-current liabilities:
Deferred tax liability, net 1,886 1,956
Deferred credits and other obligations 1,000 1,007
---------- ----------
Total liabilities 66,158 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 6,420,851 and 6,392,220
shares issued, respectively 642 639
Additional paid-in capital 51,269 50,971
Retained earnings 62,641 49,369
Accumulated other comprehensive income (1,989) (3,376)
---------- ----------
Total shareholders' equity 112,563 97,603
---------- ----------
$ 178,721 $ 163,781
========== ==========