EXHIBIT 99
FOR IMMEDIATE RELEASE
THURSDAY, FEBRUARY 23, 2006
HURCO REPORTS RECORD ORDERS IN FIRST QUARTER 2006 RESULTS
INDIANAPOLIS, INDIANA, — February 23, 2006, Hurco Companies, Inc. (NASDAQ: HURC) today reported net income of $3,033,000 or $.48 per share, for its first fiscal quarter, which ended January 31, 2006, compared to $3,030,000 or $.48 per share, for the corresponding period in 2005.
The Company noted that its provision for income taxes increased by approximately $1,250,000 during the first quarter of fiscal 2006, due primarily to the Company’s utilization of substantially all of its domestic net operating loss carryforwards during the fourth quarter of fiscal 2005. Income before taxes for the latest quarter was $4,651,000, an increase of 37% over the $3,399,000 reported in the same period one year ago.
Sales and service fees for the first quarter of fiscal 2006 were $31,894,000, an increase of 5% from the amount for the prior year period. Due to the effects of a stronger U.S. Dollar when translating foreign sales for financial reporting purposes, sales and service fees for the first quarter of fiscal 2006 were approximately $1,800,000 less than would have been the case if foreign sales had been translated at the same rate of exchange that was utilized for the first quarter of 2005. Unit shipments increased by 19% on a quarter-to-quarter basis, with the largest increase occurring in North America.
New orders booked during the first quarter of fiscal 2006 totaled $37,790,000, a new record and an increase of $10,906,000, or 41%, over the amount recorded in the first quarter of fiscal 2005, notwithstanding the adverse effects of currency translation. Orders were strong worldwide and unit orders increased 59%, 44% and 86% in North America, Europe and Asia, respectively.
Gross margin for the first quarter of fiscal 2006 was 34% compared to 32% for the prior year period. Selling, general and administrative expenses were $6,296,000, a slight increase from the $6,187,000 reported in the prior year period.
Operating income for the first quarter was $4,631,000, or 15% of sales and service fees, compared to $3,553,000, or 12% of sales and service fees in the 2005 period.
Michael Doar, Chief Executive Officer, stated, “We are pleased with the first quarter increase in operating income and the record order intake. We are continuing to increase production at our wholly-owned manufacturing facility in Taiwan to meet the increase in our order rate.”
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, |
| | 2006 | | 2005 |
| | (unaudited) | | |
Sales and service fees | $ 31,894 | | $ 30,246 |
| | | | |
| Cost of sales and service | 20,967 | | 20,506 |
Gross profit | 10,927 | | 9,740 |
| | | | |
| Selling, general and administrative expenses | 6,296 | | 6,187 |
Operating income | 4,631 | | 3,553 |
| | | | |
| Interest expense | 84 | | 83 |
| | | | |
| Other (income) expense, net | (103) | | 71 |
| | | | |
Income before taxes | 4,651 | | 3,399 |
| | | | |
| Provision for income taxes | 1,618 | | 369 |
| | | | |
Net income | $ 3,033 | | $ 3,030 |
| | | | |
Earnings per common share | | | |
Basic | $ 0.49 | | $ 0.50 |
Diluted | $ 0.48 | | $ 0.48 |
| | | | |
Weighted average common shares outstanding | | | |
Basic | 6,242 | | 6,071 |
Diluted | 6,328 | | 6,270 |
| | | | |
OTHER CONSOLIDATED FINANCIAL DATA | |
| | Three Months Ended January 31, |
Operating Data: | 2006 | | 2005 |
| | (unaudited) | | |
| Gross margin | 34.3% | | 32.2% |
| | | | |
| SG&A expense as a percentage of sales | 19.7% | | 20.5% |
| | | | |
| Operating income as a percentage of sales | 14.5% | | 11.7% |
| | | | |
Pre-tax income as a percentage of sales | 14.6% | | 11.2% |
| | | | |
| Effective tax rate | 34.8% | | 10.9% |
| | | | |
Depreciation | 365 | | 317 |
| | | | |
| Capital expenditures | 492 | | 623 |
| | | | |
Balance Sheet Data: | 1/31/2006 | | 10/31/2005 |
| | | | |
| Working capital | $ 48,241 | | $ 43,183 |
| | | | |
| Days sales outstanding | 47 | | 41 |
| | | | |
| Inventory turns | 2.8 | | 2.6 |
| | | | |
| Capitalization | | | |
| Total Debt | $ 4,106 | | $ 4,136 |
| Shareholders' Equity | 64,151 | | 58,944 |
| Total | $ 68,257 | | $ 63,080 |
| | | | |
Hurco Companies, Inc. |
CONDENSED CONSOLIDATED BALANCE SHEET |
| (In thousands, except per-share data) | | | |
| | | | |
| | | | |
| | January 31, | | October 31, |
| 2006 | | 2005 |
| | (unaudited) | | (audited) |
ASSETS | | | |
| | | | |
Current assets: | | | |
| Cash and cash equivalents | $ 21,562 | | $ 17,559 |
| Accounts receivable | 18,686 | | 20,100 |
| Inventories | 31,375 | | 29,530 |
| Deferred tax assets, net | 2,686 | | 3,043 |
| Other | 4,041 | | 3,586 |
| Total current assets | 78,350 | | 73,818 |
| | | | |
Property and equipment: | | | |
| Land | 761 | | 761 |
| Building | 7,205 | | 7,205 |
| Machinery and equipment | 13,286 | | 13,170 |
Leasehold improvements | 1,140 | | 1,102 |
| | 22,392 | | 22,238 |
| Less accumulated depreciation and amortization | (13,499) | | (13,187) |
| | 8,893 | | 9,051 |
| | | | |
Non-current assets: | | | |
| Deferred tax assets, net | 1,307 | | 1,346 |
| Software development costs, less amortization | 4,093 | | 3,752 |
| Investments and other assets | 6,215 | | 6,147 |
| | $ 98,858 | | $ 94,114 |
| | | | |
LIABILITIES AND SHAREHOLDER'S EQUITY | | | |
| | | | |
Current liabilities: | | | |
| Accounts payable | $ 19,734 | | $ 17,051 |
| Accrued expenses | 10,375 | | 13,584 |
| Current portion of long-term debt | 128 | | 126 |
| Total current liabilities | 30,237 | | 30,761 |
| | | | |
Non-current liabilities: | | | |
| Long-term debt | 3,978 | | 4,010 |
| Defered credits and other obligations | 492 | | 399 |
| Total liabilities | 34,707 | | 35,170 |
| | | | |
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 6,341,020 and | | | |
| 6,220,220 shares issued, respectively | 634 | | 622 |
| Additional paid-in capital | 49,723 | | 48,701 |
| Retained earnings | 16,034 | | 13,001 |
| Accumulated other comprehensive income | (2,240) | | (3,380) |
| Total shareholders' equity | 64,151 | | 58,944 |
| | $ 98,858 | | $ 94,114 |
