INDIANAPOLIS, Aug. 28, 2009 (GLOBE NEWSWIRE) -- Hurco Companies, Inc., (Nasdaq:HURC) today reported a net loss of $1,231,000, or ($0.19) per diluted share, for its third quarter ended July 31, 2009, compared to net income of $5,826,000, or $0.90 per diluted share, for the corresponding quarter in fiscal 2008. For the first nine months of fiscal 2009, Hurco reported a net loss of $1,158,000, or ($0.18) per diluted share, compared to net income of $19,098,000, or $2.96 per diluted share, reported for the corresponding period in fiscal 2008.
Sales and service fees for the third quarter of fiscal 2009 totaled $19,039,000, a decrease of $38,279,000 from the third quarter of fiscal 2008. Sales and service fees reflected an operational decrease of 64% and a negative impact of foreign currency translation of 3%. Sales and service fees for the nine months ended July 31, 2009, declined to $67,835,000, reflecting an operational decrease of 58% and a negative currency translation impact of 4% from the corresponding period in fiscal 2008.
The following table sets forth net sales and service fees by geographic region for the third quarter and first nine months of fiscal 2009 and 2008, respectively:
Net Sales and Service Fees by Geographic Region
Three Months Ended Nine Months Ended
July 31, July 31,
% %
2009 2008 Change 2009 2008 Change
-------------------------- --------------------------
North America $ 5,809 $ 10,643 -45% $ 21,618 $ 35,427 -39%
Europe 11,777 43,071 -73% 42,879 130,776 -67%
Asia Pacific 1,470 3,604 -59% 3,355 10,323 -67%
-------------------------- --------------------------
Total $ 19,056 $ 57,318 -67% $ 67,852 $176,526 -62%
-------------------------- --------------------------
Similar to the first and second quarters of fiscal 2009, sales in the third quarter were significantly impacted by the worldwide recession. The decrease in sales was primarily driven by lower volume, particularly for higher priced VMX machines, and continued pricing pressures globally. Unit shipments for the third quarter of fiscal 2009 decreased in the North America, Europe and Asia Pacific sales regions by 51%, 68% and 57%, respectively, compared to the third quarter of fiscal 2008.
New order bookings in the third quarter of fiscal 2009 were $17,914,000, a decrease of $34,544,000, or 66%, compared to the prior year period. Orders in the North America, Europe and Asia Pacific regions decreased $5,423,000, or 50%, $27,274,000, or 71%, and $1,847,000, or 61%, respectively. For the first nine months of fiscal 2009, new orders totaled $60,565,000, a decrease of $111,949,000, or 65%, from the corresponding period in 2008. Of that decrease, North America, Europe and Asia Pacific orders decreased $15,310,000, or 45%, $89,555,000, or 70%, and $7,084,000, or 72%, respectively. The impact of currency translation on new orders booked in the third quarter and first nine months of 2009 was consistent with the impact on sales.
Hurco's gross margin for the third quarter of fiscal 2009 was 28%, compared to 36% for the 2008 period. The decrease in margin as a percentage of sales was primarily due to lower sales of higher priced VMX machines and competitive pricing pressures on a global basis. Selling, general and administrative expenses were $7,200,000, a decrease of $4,629,000, or 39%, 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.
Cash decreased during the third quarter of fiscal 2009 by $1,154,000 to a balance of $26,696,000. Inventory increased by $404,000, or 1%. Monthly unit production levels for the third and fourth quarters of fiscal 2009 have been reduced by more than 80% from fiscal 2008 production levels in an effort to decrease inventory.
Michael Doar, Chief Executive Officer, said, "We implemented cost reduction initiatives earlier this year, which minimized our operating loss even though sales decreased 62% during the first three quarters of fiscal 2009. I credit both our organizational agility and the fiscally conservative culture of our company for allowing us to maintain product development schedules, which will allow us to participate in the eventual recovery with an expanded and more advanced product line. We are fortunate that we have been able to avoid the credit crisis so many companies are facing at this time due to our strong cash position and zero debt."
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 STATEMENTS OF OPERATIONS
(In thousands, except per-share data)
Three Months Ended Nine Months Ended
July 31, July 31,
------------------ ------------------
2009 2008 2009 2008
--------------------------------------- -------- -------- --------
(unaudited) (unaudited)
Sales and service fees $ 19,039 $ 57,318 $ 67,835 $176,526
Cost of sales and service 13,788 36,439 48,822 110,459
-------- -------- -------- --------
Gross profit 5,251 20,879 19,013 66,067
Selling, general and
administrative expenses 7,200 11,829 22,747 35,881
-------- -------- -------- --------
Operating income (loss) (1,949) 9,050 (3,734) 30,186
Interest expense 6 25 33 46
Interest income 36 154 185 436
Investment income 3 72 32 363
Other expense (income), net (133) 471 (1,828) 1,311
-------- -------- -------- --------
Income (loss) before taxes (1,783) 8,780 (1,722) 29,628
Provision (benefit) for income
taxes (552) 2,954 (564) 10,530
-------- -------- -------- --------
Net income (loss) $ (1,231) $ 5,826 $ (1,158) $ 19,098
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Earnings (loss) per common
share
Basic $ (0.19) $ 0.91 $ (0.18) $ 2.98
======== ======== ======== ========
Diluted $ (0.19) $ 0.90 $ (0.18) $ 2.96
======== ======== ======== ========
Weighted average common shares
outstanding
Basic 6,434 6,414 6,425 6,414
======== ======== ======== ========
Diluted 6,434 6,439 6,431 6,445
======== ======== ======== ========
OTHER CONSOLIDATED
FINANCIAL DATA Three Months Ended Nine Months Ended
July 31, July 31,
------------------ ------------------
Operating Data: 2009 2008 2009 2008
-------- -------- -------- --------
(unaudited) (unaudited)
Gross margin 27.6% 36.4% 28.0% 37.4%
SG&A expense as a percentage
of sales 37.8% 20.6% 33.5% 20.3%
Operating income (loss) as a
percentage of sales -10.2% 15.8% -5.5% 17.1%
Pre-tax income (loss) as a
percentage of sales -9.4% 15.3% -2.5% 16.8%
Effective Tax Rate 31.0% 33.6% 32.8% 35.5%
Depreciation (in thousands) 846 777 2,451 2,190
Capital expenditures
(in thousands) 641 1,542 2,960 3,456
Balance Sheet Data: 7/31/2009 7/31/2008
--------- ---------
(unaudited)
Working capital (excluding
cash, in thousands) $ 70,487 $ 59,746
Days sales outstanding 50 44
Inventory turns 1.2 2.0
Capitalization (in thousands)
Total debt $ -- $ --
Shareholders' equity 121,291 118,942
--------- ---------
Total $ 121,291 $ 118,942
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HURCO COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per-share data)
July 31, Oct. 31,
2009 2008
----------------------------------------------------------- --------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 26,696 $ 26,394
Short-term investments -- 6,674
Accounts receivable, net 13,078 31,952
Inventories, net 65,284 66,368
Deferred tax assets, net 8,947 5,444
Derivative assets 161 12,463
Other 3,606 2,017
-------- --------
Total current assets 117,772 151,312
-------- --------
Property and equipment:
Land 782 782
Building 7,127 7,127
Machinery and equipment 15,845 14,885
Leasehold improvements 1,754 1,765
-------- --------
25,508 24,559
Less accumulated depreciation and amortization (12,043) (10,961)
-------- --------
13,465 13,598
-------- --------
Non-current assets:
Software development costs, less accumulated
amortization 6,265 5,711
Other assets 7,365 6,823
-------- --------
$144,867 $177,444
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,340 $ 28,303
Derivative liabilities 3,522 2,692
Accrued expenses 9,727 20,134
-------- --------
Total current liabilities 20,589 51,129
-------- --------
Non-current liabilities:
Deferred tax liabilities, net 2,071 2,056
Deferred credits and other obligations 916 782
-------- --------
Total liabilities 23,576 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 51,917 51,690
Retained earnings 70,731 71,889
Accumulated other comprehensive income (2,001) (744)
-------- --------
Total shareholders' equity 121,291 123,477
-------- --------
$144,867 $177,444
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