Hurco Companies, Inc., (Nasdaq:HURC) today reported results for the
fourth quarter and the fiscal year ended October 31, 2012. For the
fourth quarter of fiscal 2012, Hurco recorded net income of
$4,086,000, or $0.63 per diluted share, as compared to net income
of $2,654,000, or $0.41 per diluted share, for the corresponding
period in fiscal 2011. For the full fiscal year 2012, Hurco
recorded net income of $15,638,000, or $2.40 per diluted share, as
compared to net income of $11,124,000, or $1.71 per diluted share,
for fiscal 2011.
Sales and service fees for the fourth quarter of fiscal 2012
were $56,067,000, an increase of $7,496,000, or 15%, from the prior
year period. This quarter-over-quarter improvement is net of the
adverse impact of $2,087,000, or 4%, in the fourth quarter of
fiscal 2012, due to a weaker Euro when translating foreign sales to
U.S. Dollars for financial reporting purposes. Sales and service
fees for the full fiscal year totaled $203,117,000, an increase of
$22,716,000, or 13%, from fiscal 2011. The unfavorable impact of
currency translation on the full fiscal year-over-year comparison
was $7,609,000, or 4%.
The following table sets forth net sales and service fees by
geographic region for the quarter and fiscal year ending October
31, 2012 and 2011 (in thousands), respectively:
|
|
|
Net Sales and
Service Fees by Geographic Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
October 31, |
Fiscal Year Ended
October 31, |
|
|
|
|
|
2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
North America |
$ 17,692 |
$ 13,919 |
27% |
$ 60,527 |
$ 49,637 |
22% |
Europe |
33,745 |
31,199 |
8% |
119,359 |
111,080 |
7% |
Asia Pacific |
4,630 |
3,453 |
34% |
23,231 |
19,683 |
18% |
Total |
$ 56,067 |
$ 48,571 |
15% |
$203,117 |
$ 180,400 |
13% |
The fourth quarter increase in sales was driven by increased
demand in North America and Europe. The 8% increase in Europe was
actually 15% when adjusted to exclude the negative impact of
foreign currency translation due to a weaker Euro. Compared to
the fourth quarter of fiscal 2011, unit shipments for the fourth
quarter of fiscal 2012 increased in North America by 33%, in Europe
by 13%, and in Asia Pacific by 12%. For the full fiscal year,
sales increased in all regions, driven by higher customer
demand. Unit shipments for the full year 2012, compared to
fiscal 2011, increased in North America by 14%, in Europe by 4% and
in Asia Pacific by 16%.
The following table sets forth new orders booked by geographic
region for the fourth quarter and fiscal year ending October 31,
2012 and 2011 (in thousands), respectively:
|
|
|
|
|
Orders by
Geographic Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
October 31, |
Fiscal Year
Ended October 31, |
|
|
|
|
|
2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
North America |
$ 20,398 |
$ 13,365 |
53% |
$ 61,644 |
$ 50,058 |
23% |
Europe |
27,745 |
22,614 |
23% |
115,222 |
121,274 |
-5% |
Asia Pacific |
3,674 |
4,324 |
-15% |
21,271 |
25,651 |
-17% |
Total |
$ 51,817 |
$ 40,303 |
29% |
$198,137 |
$ 196,983 |
1% |
During the fourth quarter of 2012, orders increased in North
America and Europe due to favorable market conditions. We
experienced increased orders in North America, following our
successful showing at the International Manufacturing Technology
Show (IMTS) in Chicago where we launched our rebranding initiative
and new line of high speed machines. We experienced a decline
in order activity in Asia where industrial activity has been
slowing. Compared to the fourth quarter of fiscal 2011, unit
orders for the fourth quarter of fiscal 2012 increased in North
America by 54% and in Europe by 22%, but decreased in Asia Pacific
by 9%. During the full fiscal year 2012, orders remained
relatively consistent with the prior fiscal year. Unit orders
for the fiscal year 2012 compared to fiscal 2011 increased in North
America by 22%, but decreased in Europe by 9% and in Asia Pacific
by 22%. The impact of currency translation on orders booked in
the fourth quarter and full fiscal year was consistent with the
impact on sales.
Hurco's fourth quarter gross profit was $17,220,000, or 31% of
sales, compared to $15,682,000, or 32% of sales, for the prior year
period. For the full fiscal year 2012, gross profit was
$63,181,000, or 31% of sales, compared to $55,874,000, or 31% of
sales, for fiscal 2011. The increase in gross profit for the
fourth quarter and the year was due primarily to the increase in
sales.
Selling, general and administrative expenses for the fourth
quarter of fiscal 2012 were $11,870,000, an increase of $778,000,
or 7%, from the corresponding period in 2011. Selling,
general and administrative expenses were $41,160,000 for fiscal
2012, an increase of $2,667,000, or 7%, over fiscal 2011. The
increases in selling, general and administrative expenses for the
fourth quarter and fiscal year were primarily due to higher sales
and marketing expenses and higher commissions as a result of
increased sales.
Other expenses during the fourth quarter of fiscal 2012
decreased $1,051,000 compared to the fourth quarter of fiscal 2011.
Other expenses for fiscal 2012 decreased by $1,605,000. These
decreases were primarily due to decreased foreign currency losses
experienced in fiscal 2012.
Cash and cash equivalents totaled $35,770,000 as of October 31,
2012, compared to $44,961,000 as of October 31,
2011. Inventories as of October 31, 2012 were $91,320,000, an
increase of $10,193,000, or 13%, from the end of the prior fiscal
year primarily due to an increase in finished goods inventory
intended to meet forecasted growth in customer demand. Working
capital, excluding cash, was $88,239,000 as of October 31, 2012,
compared to $61,885,000 as of October 31, 2011. The increase
in working capital, excluding cash, was primarily due to increased
inventory resulting from higher production levels and increased
accounts receivable from higher sales volumes.
Michael Doar, President and Chief Executive Officer, stated,
"Considering the economic uncertainty in Europe, we finished the
year with a strong performance. I believe our results are a
testament to customer acceptance of our cutting edge control
technology and product line expansion. North America achieved
record sales for the quarter, which I attribute to the excitement
surrounding the rebranding initiative that we introduced at the
International Manufacturing Technology Show in Chicago.
Additionally, I believe U.S. customers appreciate the fact that our
control technology focuses on helping them increase profitability,
especially in the manufacture of small-to-medium-sized lots, which
accounts for the majority of their machining activity. Going
forward, we will continue to deliver machine tools with advanced
technology that simplifies complex operations, while providing a
user interface that is intuitive and user-friendly."
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
China, England, France, Germany, India, Italy, Poland, Singapore,
South Africa and the United States of America. Web Site:
www.hurco.com
The Hurco Companies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=14761
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 cyclical
nature of the machine tool industry, changes in general economic
and business conditions that affect demand for our products, the
risks of our international operations, changes in manufacturing
markets, innovations by competitors, the ability to protect our
intellectual property, fluctuations in foreign currency exchange
rates, increases in prices of raw materials, quality and delivery
performance by our vendors, changes in operations due to
acquisitions, the loss of key personnel, and governmental actions
and initiatives including import and export restrictions and
tariffs.
Hurco Companies,
Inc. |
CONDENSED CONSOLIDATED
STATEMENT OF INCOME |
(In thousands, except per-share
data) |
|
|
|
|
|
|
Three Months Ended
October 31, |
Twelve Months Ended
October 31, |
|
2012 |
2011 |
2012 |
2011 |
|
(unaudited) |
|
Sales and service fees |
$ 56,067 |
$ 48,571 |
$ 203,117 |
$ 180,400 |
|
|
|
|
|
Cost of sales and service |
38,847 |
32,889 |
139,936 |
124,526 |
Gross
profit |
17,220 |
15,682 |
63,181 |
55,874 |
|
|
|
|
|
Selling, general and administrative
expenses |
11,870 |
11,092 |
41,160 |
38,493 |
Operating
income |
5,350 |
4,590 |
22,021 |
17,381 |
|
|
|
|
|
Interest expense |
63 |
82 |
168 |
143 |
|
|
|
|
|
Interest income |
11 |
25 |
69 |
132 |
|
|
|
|
|
Investment income (expense) |
2 |
4 |
7 |
13 |
|
|
|
|
|
Other expense (income), net |
(5) |
1,043 |
65 |
1,764 |
|
|
|
|
|
Income before taxes |
5,305 |
3,494 |
21,864 |
15,619 |
|
|
|
|
|
Provision for income taxes |
1,219 |
840 |
6,226 |
4,495 |
|
|
|
|
|
Net income |
$ 4,086 |
$ 2,654 |
$ 15,638 |
$ 11,124 |
|
|
|
|
|
Earnings per common
share |
|
|
|
|
|
|
|
|
|
Basic |
$ 0.63 |
$ 0.41 |
$ 2.41 |
$ 1.72 |
Diluted |
$ 0.63 |
$ 0.41 |
$ 2.40 |
$ 1.71 |
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
Basic |
6,447 |
6,441 |
6,445 |
6,441 |
Diluted |
6,469 |
6,467 |
6,470 |
6,472 |
|
|
|
|
|
OTHER CONSOLIDATED FINANCIAL
DATA |
Three Months Ended
October 31, |
Twelve Months Ended
October 31, |
Operating Data: |
2012 |
2011 |
2012 |
2011 |
|
(unaudited) |
|
Gross margin |
31% |
32% |
31% |
31% |
|
|
|
|
|
SG&A expense as a percentage of
sales |
21% |
23% |
20% |
21% |
|
|
|
|
|
Operating income as a percentage of
sales |
10% |
9% |
11% |
10% |
|
|
|
|
|
Pre-tax income as a percentage of
sales |
9% |
7% |
11% |
9% |
|
|
|
|
|
Effective Tax Rate |
23% |
24% |
28% |
29% |
|
|
|
|
|
Depreciation and amortization |
931 |
1,073 |
4,126 |
4,300 |
|
|
|
|
|
Capital expenditures |
1,129 |
1,097 |
3,732 |
2,842 |
|
|
|
|
|
Balance Sheet Data: |
10/31/2012 |
10/31/2011 |
|
|
|
|
|
|
|
Working capital (excluding cash) |
$ 88,239 |
$ 61,885 |
|
|
|
|
|
|
|
Days sales outstanding (unaudited) |
38 |
37 |
|
|
|
|
|
|
|
Inventory turns (unaudited) |
1.5 |
1.6 |
|
|
|
|
|
|
|
Capitalization |
|
|
|
|
Total debt |
$ 3,206 |
$ 865 |
|
|
Shareholders' equity |
143,793 |
126,212 |
|
|
Total |
$ 146,999 |
$ 127,077 |
|
|
|
Hurco Companies,
Inc. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except share and
per-share data) |
|
|
|
|
October 31, 2012 |
October 31, 2011 |
|
|
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 35,770 |
$ 44,961 |
Accounts receivable, net |
35,297 |
27,057 |
Refundable taxes |
1,459 |
1,442 |
Inventories, net |
91,320 |
81,127 |
Deferred income taxes |
1,182 |
2,692 |
Derivative assets |
708 |
1,197 |
Other |
7,645 |
5,598 |
Total current assets |
173,381 |
164,074 |
|
|
|
Property and equipment: |
|
|
Land |
782 |
782 |
Building |
7,352 |
7,116 |
Machinery and equipment |
17,411 |
16,336 |
Leasehold improvements |
3,467 |
2,508 |
|
29,012 |
26,742 |
Less accumulated depreciation
and amortization |
(16,933) |
(15,198) |
|
12,079 |
11,544 |
|
|
|
Non-current assets: |
|
|
Software development
costs, less accumulated amortization |
3,969 |
4,928 |
Other assets |
5,883 |
5,999 |
|
$ 195,312 |
$ 186,545 |
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 29,788 |
$ 39,046 |
Derivative liabilities |
569 |
1,609 |
Accrued expenses |
15,809 |
15,708 |
Short-term debt |
3,206 |
865 |
Total current liabilities |
49,372 |
57,228 |
|
|
|
Non-current
liabilities: |
|
|
Deferred income taxes |
903 |
1,982 |
Deferred credits and other
obligations |
1,244 |
1,123 |
Total liabilities |
51,519 |
60,333 |
|
|
|
Commitments and
contingencies |
|
|
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;
6,502,928 and 6,471,710 shares issued; and 6,447,210 and 6,440,851
shares outstanding, as of October 31, 2012 and October 31, 2011,
respectively |
645 |
644 |
Additional paid-in capital |
53,415 |
52,614 |
Retained earnings |
90,586 |
74,948 |
Accumulated other comprehensive
loss |
(853) |
(1,994) |
Total shareholders' equity |
143,793 |
126,212 |
|
$ 195,312 |
$ 186,545 |
CONTACT: John G. Oblazney
Vice President & Chief Financial Officer
317-293-5309
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