Hurco Companies, Inc. (Nasdaq: HURC) today reported results for the
second fiscal quarter ended April 30, 2022. Hurco recorded net
income of $2,029,000, or $0.30 per diluted share, for the second
quarter of fiscal 2022, compared to net income of $2,437,000, or
$0.36 per diluted share, for the corresponding period in fiscal
2021. For the first six months of fiscal 2022, Hurco reported net
income of $5,564,000, or $0.83 per diluted share, compared to net
income of $3,100,000, or $0.46 per diluted share, for the
corresponding period in fiscal 2021.
Sales and service fees for the second quarter of
fiscal 2022 were $62,825,000, an increase of $4,905,000, or 8%,
compared to the corresponding prior year period, and included an
unfavorable currency impact of $2,499,000, or 4%, when translating
foreign sales to U.S. dollars for financial reporting purposes.
Sales and service fees for the first six months of fiscal 2022 were
$129,712,000, an increase of $17,677,000, or 16%, compared to the
corresponding prior year period, and included an unfavorable
currency impact of $3,670,000, or 3%, when translating foreign
sales to U.S. dollars for financial reporting purposes.
Greg Volovic, Chief Executive Officer, stated,
“The improvement in sales and operating income have come at a time
when we face many challenges including unusually high inflation,
vendor delays, competitive labor markets, continued COVID-19
lockdowns in certain markets, and volatility of foreign currencies.
Our year-to-date sales reflect strong sales, with all regions
contributing to this overall growth in sales. Hurco’s operating
income for the first six months of fiscal 2022 improved by $3.8
million compared to the prior year period, even though we did not
have the benefit of the $1.9 million of employee retention credit
taken in the first six months of 2021. We remain focused on
innovation and meeting our customers’ needs and expectations with
an unwavering commitment to a high level of quality and service. We
are particularly excited about participating in this year’s
International Manufacturing Technology Show (IMTS) where we will
unveil new products, introduce new control innovations, and present
an entirely new approach to marketing these technologies.”
The following table sets forth net sales and
service fees by geographic region for the second quarter and six
months ended April 30, 2022 and 2021 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
April 30, |
|
April 30, |
|
|
2022 |
|
2021 |
$ Change |
% Change |
|
|
2022 |
|
2021 |
$ Change |
% Change |
Americas |
$22,409 |
$19,723 |
$2,686 |
14 |
% |
|
$46,418 |
$42,971 |
$3,447 |
8 |
% |
Europe |
|
30,882 |
|
28,949 |
|
1,933 |
7 |
% |
|
|
65,000 |
|
53,195 |
|
11,805 |
22 |
% |
Asia Pacific |
|
9,534 |
|
9,248 |
|
286 |
3 |
% |
|
|
18,294 |
|
15,869 |
|
2,425 |
15 |
% |
Total |
$62,825 |
$57,920 |
$4,905 |
8 |
% |
|
$129,712 |
$112,035 |
$17,677 |
16 |
% |
Sales in the Americas for the second quarter and
first six months of fiscal 2022 increased by 14% and 8%,
respectively, compared to the corresponding periods in fiscal 2021,
primarily due to inflationary price increases, increased volume of
shipments of higher-performance Hurco machines, and increased sales
of ProCobots automation solutions.
European sales for the second quarter of fiscal
2022 increased by 7%, compared to the corresponding period in
fiscal 2021, and included an unfavorable currency impact of 8%,
when translating foreign sales to U.S. dollars for financial
reporting purposes. This increase was primarily attributable to
inflationary price increases, an increased volume of shipments of
Hurco machines in Germany, Italy, and the United Kingdom, as well
as increased sales of electro-mechanical components and accessories
manufactured by our wholly-owned subsidiary, LCM Precision
Technology S.r.l. (“LCM”). European sales for the first six months
of fiscal 2022 increased by 22%, compared to the corresponding
period in fiscal 2021, and included an unfavorable currency impact
of 7%, when translating foreign sales to U.S. dollars for financial
reporting purposes. This increase was primarily attributable to
inflationary price increases, an increased volume of shipments of
Hurco, Takumi, and Milltronics machines across the European region,
as well as increased sales of electro-mechanical components and
accessories manufactured by LCM.
Asian Pacific sales for the second quarter and
first six months of fiscal 2022 increased by 3% and 15%,
respectively, compared to the corresponding periods in fiscal 2021,
and included an unfavorable currency impact of 1% for each period,
when translating foreign sales to U.S. dollars for financial
reporting purposes. The increases in Asian Pacific sales primarily
resulted from inflationary price increases and an increased volume
of shipments of Hurco and Takumi machines in Southeast Asia and
India, partially offset by a reduced volume of shipments of Hurco
machines in China due to recent COVID-19 lockdowns.
Orders for the second quarter of fiscal 2022
were $58,858,000, a decrease of $6,857,000, or 10%, compared to the
corresponding period in fiscal 2021, and included an unfavorable
currency impact of $1,379,000, or 2%, when translating foreign
orders to U.S. dollars. Orders for the first six months of fiscal
2022 were $129,713,000, an increase of $6,675,000, or 5%, compared
to the corresponding period in fiscal 2021, and included an
unfavorable currency impact of $3,119,000, or 3%, when translating
foreign orders to U.S. dollars.
The following table sets forth new orders booked by geographic
region for the second quarter and first six months ended April 30,
2022 and 2021 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
April 30, |
|
April 30, |
|
|
2022 |
|
2021 |
$ Change |
% Change |
|
|
2022 |
|
2021 |
$ Change |
% Change |
Americas |
$24,421 |
$19,306 |
$5,115 |
|
26 |
% |
|
$46,537 |
$43,151 |
$3,386 |
|
8 |
% |
Europe |
|
27,870 |
|
34,401 |
|
(6,531 |
) |
(19 |
)% |
|
|
68,535 |
|
60,196 |
|
8,339 |
|
14 |
% |
Asia Pacific |
|
6,567 |
|
12,008 |
|
(5,441 |
) |
(45 |
)% |
|
|
14,641 |
|
19,691 |
|
(5,050 |
) |
(26 |
)% |
Total |
$58,858 |
$65,715 |
($6,857 |
) |
(10 |
)% |
|
$129,713 |
$123,038 |
$6,675 |
|
5 |
% |
Orders in the Americas for the second quarter of
fiscal 2022 increased by 26%, compared to the corresponding period
in fiscal 2021, primarily due to inflationary price increases and
increased customer demand for higher-performance Hurco and
Milltronics machines and ProCobots automation solutions. Orders in
the Americas for the first six months of fiscal 2022 increased by
8%, compared to the corresponding period in fiscal 2021, primarily
due to inflationary price increases and increased customer demand
for higher-performance Hurco machines and ProCobots automation
solutions.
European orders for the second quarter of fiscal
2022 decreased by 19%, compared to the corresponding prior year
period, and included an unfavorable currency impact of 3%, when
translating foreign orders to U.S. dollars. This decrease was
driven primarily by decreased customer demand for Hurco machines in
the United Kingdom, Italy, and France, as well as decreased
customer demand for electro-mechanical components and accessories
manufactured by LCM, partially offset by an increase in customer
demand for Hurco machines in Germany and Milltronics machines in
Italy. European orders for the first six months of fiscal 2022
increased by 14%, compared to the corresponding prior year period,
and included an unfavorable currency impact of 5%, when translating
foreign orders to U.S. dollars. This increase was primarily
attributable to inflationary price increases and increased customer
demand for Hurco and Takumi machines in Germany, France, and Italy,
partially offset by decreased customer demand for Hurco machines in
the United Kingdom and electro-mechanical components and
accessories manufactured by LCM.
Asian Pacific orders for the second quarter and
first six months of fiscal 2022 decreased by 45% and 26%,
respectively, compared to the corresponding prior year periods, and
included an unfavorable currency impact of 2% and 1%, respectively,
when translating foreign orders to U.S. dollars. The decreases in
Asian Pacific orders year-over-year were driven primarily by
decreased customer demand for Hurco and Takumi machines in China
and Southeast Asia due to recent COVID-19 lockdowns, partially
offset by increased demand for Hurco machines in India.
Gross profit for the second quarter of fiscal
2022 was $15,602,000, or 25% of sales, compared to $14,794,000, or
26% of sales, for the corresponding prior year period. Gross profit
for the first six months of fiscal 2022 was $32,509,000, or 25% of
sales, compared to $26,341,000, or 24% of sales, for the
corresponding prior year period. During the second quarter of
fiscal 2021, we recorded approximately $837,000, or 1% of sales,
for the employee retention credit extended to companies under the
Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues
Act and the American Rescue Plan Act of 2021 (the “employee
retention credit”). While the employee retention credit did not
recur in the second quarter and first six months of fiscal 2022,
gross profit as a percentage of sales in those 2022 periods
benefited from increased higher-performance machine sales, improved
leverage of fixed overhead costs across higher production levels,
and improved pricing due to changes in demand and normalized
inventory levels.
Selling, general, and administrative expenses
for the second quarter of fiscal 2022 were $12,515,000, or 20% of
sales, compared to $11,273,000, or 19% of sales, in the
corresponding fiscal 2021 period, and included a favorable currency
impact of $389,000, when translating foreign expenses to U.S.
dollars for financial reporting purposes. Selling, general, and
administrative expenses for the first six months of fiscal 2022
were $24,212,000, or 19% of sales, compared to $21,841,000, or 19%
of sales, in the corresponding fiscal 2021 period, and included a
favorable currency impact of $570,000, when translating foreign
expenses to U.S. dollars for financial reporting purposes. We also
recorded approximately $1,089,000, or 2% of sales, for the employee
retention credit in selling, general, and administrative expenses
during the second quarter of fiscal 2021. The year-over-year
increases in selling, general, and administrative expenses in the
second quarter and first six months of 2022 were driven primarily
by increases in agent commissions, marketing and tradeshow
expenses, and employee support costs for the global sales
operations, partially offset by not recording the employee
retention credit in selling, general, and administrative expenses
in those 2022 periods.
The effective tax rate for the second quarter
and first six months of fiscal 2022 was 31% for each period,
compared to 28% and 33%, respectively, for the corresponding prior
year periods. The year-over-year changes in the effective tax rates
were primarily due to changes in geographic mix of income and loss
that includes jurisdictions with differing tax rates, various
discrete tax items, and changes in income tax laws to address the
unfavorable impact of the COVID-19 pandemic.
Cash and cash equivalents totaled $82,042,000 at
April 30, 2022, compared to $84,063,000 at October 31, 2021.
Working capital was $203,444,000 at April 30, 2022, compared to
$208,700,000 at October 31, 2021. The decrease in working capital
was primarily driven by decreases in accounts receivable, prepaid
assets, partially offset by an increase in inventories and a
decrease in customer deposits.
Hurco Companies, Inc. is an international,
industrial technology company that sells its three brands of
computer numeric control (“CNC”) machine tools to the worldwide
metal cutting and metal forming industry. Two of the Company’s
brands of machine tools, Hurco and Milltronics, are equipped with
interactive controls that include software that is proprietary to
each respective brand. The Company designs these controls and
develops the software. The third brand of CNC machine tools,
Takumi, is equipped with industrial controls that are produced by
third parties, which allows the customer to decide the type of
control added to the Takumi CNC machine tool. The Company also
produces high-value machine tool components and accessories and
provides automation solutions that can be integrated with any
machine tool. The end markets for the Company's products are
independent job shops, short-run manufacturing operations within
large corporations, and manufacturers with production-oriented
operations. The Company’s customers manufacture precision parts,
tools, dies, and/or molds for industries such as aerospace,
defense, medical equipment, energy, transportation, and computer
equipment. The Company is based in Indianapolis, Indiana, with
manufacturing operations in Taiwan, Italy, the U.S., and China, and
sells its products through direct and indirect sales forces
throughout the Americas, Europe, and Asia. The Company has sales,
application engineering support and service subsidiaries in China,
England, France, Germany, India, Italy, the Netherlands, Poland,
Singapore, the U.S., and Taiwan. Web Site: www.hurco.com
Certain statements in this news release are
forward-looking statements that 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 COVID-19 pandemic and other public health
epidemics and pandemics on the global economy, our business and
operations, our employees and the business, operations and
economies of our customers and suppliers; the cyclical nature of
the machine tool industry; uncertain economic conditions, which may
adversely affect overall demand, in the Americas, Europe, and Asia
Pacific markets; the risks of our international operations;
governmental actions, initiatives and regulations, including import
and export restrictions, duties and tariffs, and changes to tax
laws; the effects of changes in currency exchange rates;
competition with larger companies that have greater financial
resources; our dependence on new product development; the need
and/or ability to protect our intellectual property assets; the
limited number of our manufacturing and supply chain sources;
increases in the prices of raw materials, especially steel and iron
products; the effect of the loss of members of senior management
and key personnel; our ability to integrate acquisitions;
acquisitions that could disrupt our operations and affect operating
results; failure to comply with data privacy and security
regulations; breaches of our network and system security measures;
possible obsolescence of our technology and the need to make
technological advances; impairment of our assets; negative or
unforeseen tax consequences; uncertainty concerning our ability to
use tax loss carryforwards; changes in the SOFR rate; and other
risks and uncertainties discussed more fully under the caption
“Risk Factors” in our filings with the Securities and Exchange
Commission. We expressly disclaim any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Contact: |
|
Sonja K.
McClelland |
|
|
Executive Vice President, Treasurer, & Chief Financial
Officer |
|
|
317-293-5309 |
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|
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|
|
Hurco
Companies, Inc. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
Three Months Ended April 30, |
|
Six Months Ended April 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(unaudited) |
|
(unaudited) |
Sales and
service fees |
$ |
62,825 |
|
|
$ |
57,920 |
|
|
$ |
129,712 |
|
|
$ |
112,035 |
|
Cost of
sales and service |
|
47,223 |
|
|
|
43,126 |
|
|
|
97,203 |
|
|
|
85,694 |
|
Gross profit |
|
15,602 |
|
|
|
14,794 |
|
|
|
32,509 |
|
|
|
26,341 |
|
Selling,
general and administrative expenses |
|
12,515 |
|
|
|
11,273 |
|
|
|
24,212 |
|
|
|
21,841 |
|
Operating income
(loss) |
|
3,087 |
|
|
|
3,521 |
|
|
|
8,297 |
|
|
|
4,500 |
|
Interest
expense |
|
6 |
|
|
|
2 |
|
|
|
13 |
|
|
|
21 |
|
Interest
income |
|
- |
|
|
|
- |
|
|
|
53 |
|
|
|
16 |
|
Investment
income |
|
3 |
|
|
|
25 |
|
|
|
181 |
|
|
|
146 |
|
Other income
(expense), net |
|
(162 |
) |
|
|
(160 |
) |
|
|
(418 |
) |
|
|
(48 |
) |
Income (loss) before
taxes |
|
2,922 |
|
|
|
3,384 |
|
|
|
8,100 |
|
|
|
4,593 |
|
Provision
(benefit) for income taxes |
|
893 |
|
|
|
947 |
|
|
|
2,536 |
|
|
|
1,493 |
|
Net income
(loss) |
$ |
2,029 |
|
|
$ |
2,437 |
|
|
$ |
5,564 |
|
|
$ |
3,100 |
|
|
|
|
|
|
|
|
|
Income (loss) per common share |
|
|
|
|
|
|
|
Basic |
$ |
0.30 |
|
|
$ |
0.37 |
|
|
$ |
0.83 |
|
|
$ |
0.47 |
|
Diluted |
$ |
0.30 |
|
|
$ |
0.36 |
|
|
$ |
0.83 |
|
|
$ |
0.46 |
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
6,571 |
|
|
|
6,596 |
|
|
|
6,594 |
|
|
|
6,585 |
|
Diluted |
|
6,640 |
|
|
|
6,612 |
|
|
|
6,641 |
|
|
|
6,598 |
|
|
|
|
|
|
|
|
|
Dividends per share |
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.29 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER CONSOLIDATED FINANCIAL DATA |
|
|
|
|
|
|
|
Three Months Ended April 30, |
|
Six Months Ended April 30, |
Operating Data: |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(unaudited) |
|
|
|
(unaudited) |
|
|
Gross
margin |
|
25 |
% |
|
|
26 |
% |
|
|
25 |
% |
|
|
24 |
% |
SG&A
expense as a percentage of sales |
|
20 |
% |
|
|
19 |
% |
|
|
19 |
% |
|
|
19 |
% |
Operating
income (loss) as a percentage of sales |
|
5 |
% |
|
|
6 |
% |
|
|
6 |
% |
|
|
4 |
% |
Pre-tax
income (loss) as a percentage of sales |
|
5 |
% |
|
|
6 |
% |
|
|
6 |
% |
|
|
4 |
% |
Effective
tax rate |
|
31 |
% |
|
|
28 |
% |
|
|
31 |
% |
|
|
33 |
% |
Depreciation
and amortization |
$ |
965 |
|
|
$ |
1,050 |
|
|
$ |
1,907 |
|
|
$ |
2,116 |
|
Capital
expenditures |
$ |
526 |
|
|
$ |
660 |
|
|
$ |
1,106 |
|
|
$ |
1,282 |
|
|
|
|
|
|
|
|
|
Balance Sheet Data: |
4/30/2022 |
|
10/31/2021 |
|
|
|
|
Working
capital |
$ |
203,444 |
|
|
$ |
208,700 |
|
|
|
|
|
Days sales
outstanding (unaudited) |
|
42 |
|
|
|
42 |
|
|
|
|
|
Inventory
turns (unaudited) |
|
1.3 |
|
|
|
1.2 |
|
|
|
|
|
Capitalization |
|
|
|
|
|
|
|
Total
debt |
|
-- |
|
|
|
-- |
|
|
|
|
|
Shareholders' equity |
|
231,651 |
|
|
|
238,419 |
|
|
|
|
|
Total |
$ |
231,651 |
|
|
$ |
238,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hurco
Companies, Inc. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(In
thousands, except share and per share data) |
|
|
|
|
|
April
30, |
|
October
31, |
|
|
2022 |
|
|
|
2021 |
|
ASSETS |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
82,042 |
|
|
$ |
84,063 |
|
Accounts receivable, net |
|
34,389 |
|
|
|
42,620 |
|
Inventories, net |
|
153,305 |
|
|
|
148,216 |
|
Derivative assets |
|
3,279 |
|
|
|
905 |
|
Prepaid assets |
|
8,752 |
|
|
|
13,091 |
|
Other |
|
220 |
|
|
|
975 |
|
Total current assets |
|
281,987 |
|
|
|
289,870 |
|
|
|
|
|
Property and equipment: |
|
|
|
Land |
|
868 |
|
|
|
868 |
|
Building |
|
7,352 |
|
|
|
7,352 |
|
Machinery and equipment |
|
28,061 |
|
|
|
29,533 |
|
Leasehold improvements |
|
4,753 |
|
|
|
5,172 |
|
|
|
41,034 |
|
|
|
42,925 |
|
Less accumulated depreciation and amortization |
|
(31,485 |
) |
|
|
(32,318 |
) |
Total property and equipment, net |
|
9,549 |
|
|
|
10,607 |
|
|
|
|
|
Non-current assets: |
|
|
|
Software development costs, less accumulated amortization |
|
7,480 |
|
|
|
7,553 |
|
Intangible assets, net |
|
1,399 |
|
|
|
1,565 |
|
Operating lease - right of use assets, net |
|
9,006 |
|
|
|
10,624 |
|
Deferred income taxes |
|
2,763 |
|
|
|
3,154 |
|
Investments and other assets, net |
|
9,262 |
|
|
|
9,562 |
|
Total non-current assets |
|
29,910 |
|
|
|
32,458 |
|
Total assets |
$ |
321,446 |
|
|
$ |
332,935 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
49,853 |
|
|
$ |
48,881 |
|
Customer deposits |
|
6,121 |
|
|
|
8,593 |
|
Derivative liabilities |
|
2,195 |
|
|
|
467 |
|
Operating lease liabilities |
|
3,757 |
|
|
|
4,221 |
|
Accrued payroll and employee benefits |
|
8,149 |
|
|
|
10,389 |
|
Accrued income taxes |
|
1,982 |
|
|
|
1,192 |
|
Accrued expenses |
|
5,099 |
|
|
|
5,911 |
|
Accrued warranty expenses |
|
1,387 |
|
|
|
1,516 |
|
Total current liabilities |
|
78,543 |
|
|
|
81,170 |
|
|
|
|
|
Non-current liabilities: |
|
|
|
Deferred income taxes |
|
80 |
|
|
|
68 |
|
Accrued tax liability |
|
1,316 |
|
|
|
1,749 |
|
Operating lease liabilities |
|
5,609 |
|
|
|
6,794 |
|
Deferred credits and other |
|
4,247 |
|
|
|
4,735 |
|
Total non-current liabilities |
|
11,252 |
|
|
|
13,346 |
|
|
|
|
|
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; 6,645,352 and 6,691,052 shares issued and
6,566,994 and 6,617,717 shares outstanding, as of April 30, 2022
and October 31, 2021, respectively |
|
657 |
|
|
|
662 |
|
Additional paid-in capital |
|
62,543 |
|
|
|
63,924 |
|
Retained earnings |
|
179,215 |
|
|
|
175,574 |
|
Accumulated other comprehensive loss |
|
(10,764 |
) |
|
|
(1,741 |
) |
Total shareholders' equity |
|
231,651 |
|
|
|
238,419 |
|
Total liabilities and shareholders' equity |
$ |
321,446 |
|
|
$ |
332,935 |
|
|
|
|
|
Hurco Companies (NASDAQ:HURC)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Hurco Companies (NASDAQ:HURC)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024