FOR IMMEDIATE RELEASE
WEDNESDAY, FEBRUARY 16, 2005
HURCO REPORTS RECORD SALES AND OPERATING PROFIT IN FIRST QUARTER 2005 RESULTS
INDIANAPOLIS, INDIANA, — February 16, 2005, Hurco Companies, Inc. (NASDAQ: HURC) today reported net income of $3,030,000 or $.48 per share, for its first fiscal quarter, which ended January 31, 2005, compared toa$669,000, or $.12 per share, for the 2004 corresponding period.
The Company attributed its improved results to increased sales of computerized machine tools and to a lesser extent, the favorable effect of stronger European currencies when translating foreign sales into U.S. Dollars for financial reporting purposes.
Sales and service fees for the first quarter of fiscal 2005 were the highest in the company’s 26-year history and totaled $30,246,000, an increase of $7,528,000, or 33%, from the amount recorded in the prior year due to an overall 31% increase in unit sales of computerized machine tools and to the favorable effects of foreign currency translation. Approximately 66% of Hurco’s sales during the 2005 period were made outside the United States and were denominated in local currencies (primarily the Euro and Pound Sterling). As a result, approximately $1,474,000, or 20%, of the increase was attributable to currency translation.
New order bookings for the first quarter of fiscal 2005 were $26,884,000, an increase of $3,337,000, or 14%, over the amount recorded in the first fiscal quarter of 2004 due to increased orders in the United States and the favorable effect of stronger European currencies. Approximately $1,100,000, or 33%, of the increase was attributable to currency translation effects. Backlog was $9,629,000 at January 31, 2005, compared to $12,746,000 at October 31, 2004.
Gross margin for the first quarter of 2005 was 32% compared to 29% for the prior year period. Selling, general and administrative expenses were $6,187,000, an increase of approximately $1,260,000, or 26%, from the prior year period, due to currency translation effects and increased selling and marketing expenses.
Operating profit for the first quarter of fiscal 2005 was a record for Hurco and totaled $3,553,000, or 12% of sales and service fees, compared to $1,604,000, or 7% of sales and service fees in the prior year.
Total debt was $4,425,000 at January 31, 2005, as compared to $4,600,000 at October 31, 2004, and was 9% of total debt and shareholders’ equity, which aggregated $48,527,000. As of January 31, 2005, the Company had unutilized credit facilities of $11,353,000 available for direct borrowing or commercial letters of credit.
Michael Doar, Chief Executive Officer, stated, “I am pleased with the first quarter results and that our operating profit as a percentage of sales surpassed our corporate goal of 10%. Our sales and services fees in the first quarter of fiscal 2005 included approximately $800,000 from our new lathe product line. We are continuing to invest in research and development, as new products introductions have been a major contributor to our success the past two years.”
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 and Singapore, along with manufacturing operations in Taiwan. Products are sold through independent agents and distributors in the United States, Europe and Asia. The Company also has direct sales forces in the United Kingdom, Germany, France, Italy, 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, 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 January 31, | |||||||
2005 | 2004 | ||||||
(unaudited) | |||||||
Sales and service fees | $ | 30,246 | $ | 22,718 | |||
Cost of sales and service | 20,506 | 16,187 | |||||
Gross profit | 9,740 | 6,531 | |||||
Selling, general and administrative expenses | 6,187 | 4,927 | |||||
Operating income | 3,553 | 1,604 | |||||
Interest expense | 83 | 144 | |||||
Variable options expense | - | 255 | |||||
Other expense, net | 71 | 170 | |||||
Income before taxes | 3,399 | 1,035 | |||||
Provision for income taxes | 369 | 366 | |||||
Net income | $ | 3,030 | $ | 669 | |||
Earnings per common share | |||||||
Basic | $ | 0.50 | $ | 0.12 | |||
Diluted | $ | 0.48 | $ | 0.12 | |||
Weighted average common shares outstanding | |||||||
Basic | 6,071 | 5,588 | |||||
Diluted | 6,270 | 5,753 | |||||
OTHER CONSOLIDATED FINANCIAL DATA | Three Months Ended January 31, | ||||||
Operating Data: | 2005 | 2004 | |||||
(unaudited) | |||||||
Gross margin | 32.2 | % | 28.7 | % | |||
SG&A expense as a percentage of sales | 20.5 | % | 21.7 | % | |||
Operating income as a percentage of sales | 11.7 | % | 7.1 | % | |||
Pre-tax income as a percentage of sales | 11.2 | % | 4.6 | % | |||
Depreciation | 317 | 331 | |||||
Capital expenditures | 622 | 471 | |||||
Balance Sheet Data: | 1/31/2005 | 10/31/2004 | |||||
Working capital | $ | 31,790 | $ | 26,664 | |||
Days sales outstanding | 38 | 38 | |||||
Inventory turns | 2.4 | 2.3 | |||||
Capitalization | |||||||
Total Debt | $ | 4,425 | $ | 4,600 | |||
Shareholders' Equity | 44,102 | 38,455 | |||||
Total | $ | 48,527 | $ | 43,055 |
Hurco Companies, Inc. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEET | |||||||
(In thousands, except per-share data) | |||||||
January 31, | October 31, | ||||||
2005 | 2004 | ||||||
(unaudited) | (audited) | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 11,303 | $ | 8,249 | |||
Cash - restricted | - | 277 | |||||
Accounts receivable | 16,651 | 17,337 | |||||
Inventories | 31,394 | 28,937 | |||||
Other | 3,232 | 1,672 | |||||
Total current assets | 62,580 | 56,472 | |||||
Property and equipment: | |||||||
Land | 761 | 761 | |||||
Building | 7,205 | 7,205 | |||||
Machinery and equipment | 12,645 | 12,106 | |||||
Leasehold improvements | 700 | 676 | |||||
21,311 | 20,748 | ||||||
Less accumulated depreciation and amortization | (12,772 | ) | (12,512 | ) | |||
8,539 | 8,236 | ||||||
Software development costs, less amortization | 2,979 | 2,920 | |||||
Investments and other assets | 5,878 | 5,818 | |||||
$ | 79,976 | $ | 73,446 | ||||
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 19,249 | $ | 18,361 | |||
Accrued expenses | 11,541 | 11,447 | |||||
Bank debt | - | - | |||||
Current portion of long-term debt | 319 | 317 | |||||
Total current liabilities | 31,109 | 30,125 | |||||
Non-current liabilities: | |||||||
Long-term debt | 4,106 | 4,283 | |||||
Defered credits and other obligations | 659 | 583 | |||||
Total liabilities | 35,874 | 34,991 | |||||
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 6,177,714 and | |||||||
6,019,594 shares issued, respectively | 618 | 602 | |||||
Additional paid-in capital | 47,425 | 46,778 | |||||
Accumulated deficit | (412 | ) | (3,442 | ) | |||
Accumulated other comprehensive income | (3,529 | ) | (5,483 | ) | |||
Total shareholders' equity | 44,102 | 38,455 | |||||
$ | 79,976 | $ | 73,446 |