FOR IMMEDIATE RELEASE
Wednesday, February 18, 2004
HURCO REPORTS FIRST QUARTER 2004 RESULTS
INDIANAPOLIS, INDIANA, -- February 18, 2004, Hurco Companies, Inc. (NASDAQ:
HURC) today reported net income of $669,000, or $.12 per share, for its first
fiscal quarter, which ended January 31, 2004, compared to a net loss of
$582,000, or $.10 per share, for the 2003 corresponding period.
The Company attributed its return to profitability to a substantial
increase in computerized machine tool sales, along with the favorable effect of
stronger European currencies in relation to the U.S. Dollar.
Sales and service fees for the first quarter of fiscal 2004 were
$22,718,000, an increase of 42% from the $15,953,000 recorded in the first
fiscal quarter of 2003. Sales and service fees reported in U.S. dollars
benefited from significantly stronger European currencies during the first
quarter of 2004, when translating foreign sales into U.S. dollars for financial
reporting purposes. When measured at constant exchange rates, sales and service
fees for the 2004 first quarter increased $4,631,000, or 29%, from the
corresponding 2003 period, due in large part to shipments of new machine tool
models introduced in late 2002 and during 2003.
New order bookings for the first quarter of fiscal 2004 were
$23,547,000, an increase of 64% from the $13,884,000 recorded in the first
fiscal quarter of 2003. When measured in constant dollars, new order bookings in
the first quarter of 2004 increased $7,512,000, or 54% over those in the first
quarter of fiscal 2003, due to increases in the United States, Europe and Asia
of $2,152,000, $4,558,000 and $802,000, respectively. Backlog was $9,483,000 at
January 31, 2004, compared to $8,153,000 at October 31, 2003.
Michael Doar, Chief Executive Officer, stated, "In addition to the
favorable impact of new product models, our first quarter orders reflect an
improvement in worldwide computerized machine tool demand from the depressed
levels of the past three years."
Gross margin for the first quarter of 2004 was 29%, a substantial
increase over the 25% margin in the corresponding 2003 period, due principally
to the benefits of stronger European currencies as well as a greater percentage
of higher-margin European shipments in the total sales mix. Selling, general and
administrative expenses were $4,927,000, an increase of approximately $500,000,
or 11%, from the prior year period, due to currency translation effects and
increased commissions to European selling agents associated with the increase in
European sales.
Total debt was $6,463,000 at January 31, 2004, as compared to
$9,222,000 at October 31, 2003, and was 18% of total debt and shareholders'
equity, which aggregated $36,489,000. As of January 31, 2004, the Company had
unutilized credit facilities of $9,900,000 available for direct borrowing or
commercial letters of credit.
Mr. Doar further noted, "We are pleased with our first quarter results,
which demonstrate that the efforts we made during the past two years to focus on
our core product lines, invest in new products and reduce our costs and
operating expenses are paying off."
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, January 31,
2004 2003
--------- --------
(unaudited)
Sales and service fees $ 22,718 $ 15,953
Cost of sales and service 16,187 11,959
-------- --------
Gross profit 6,531 3,994
Selling, general and administrative expenses 4,927 4,428
-------- --------
Operating income (loss) 1,604 (434)
Interest expense 144 159
Variable options expense 255 -
Other income (expense), net (170) 116
-------- --------
Income (loss) before taxes 1,035 (477)
Provision for income taxes 366 105
-------- --------
Net income (loss) $ 669 $ (582)
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Earnings (loss) per common share
Basic $ 0.12 $ (0.10)
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Diluted $ 0.12 $ (0.10)
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Weighted average common shares outstanding
Basic 5,588 5,583
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Diluted 5,753 5,583
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OTHER CONSOLIDATED FINANCIAL DATA
Three Months Ended
January 31, January 31,
Operating Data: 2004 2003
---------- -----------
(unaudited)
Gross margin 28.7% 25.0%
SG&A expense as a percentage of sales 21.7% 27.8%
Operating income (loss) as a percentage of sales 7.1% -2.7%
Pre-tax income (loss) as a percentage of sales 4.6% -3.0%
Depreciation 331 351
Capital expenditures 471 168
Balance Sheet Data: 1/31/2004 1/31/2003
--------- ---------
Working capital (excluding short term debt) $ 20,163 $ 21,948
Days sales outstanding 43 54
Inventory turns 2.6 2.3
Net assets per $ of revenue (trailing twelve months)
Working capital, net $ 0.26 $ 0.32
All other 0.19 0.23
-------- --------
Total $ 0.45 $ 0.55
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Hurco Companies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per-share data)
January 31, October 31,
2004 2003
----------- -----------
(unaudited) (audited)
ASSETS
Current assets:
Cash - restricted $ 1,092 $ 622
Cash and cash equivalents 5,604 5,289
Accounts receivable 12,734 12,823
Inventories 23,250 22,247
Other 1,730 1,409
-------- --------
Total current assets 44,410 42,390
Property and equipment:
Land 761 761
Building 7,242 7,239
Machinery and equipment 10,809 10,568
Leasehold improvements 602 544
-------- --------
19,414 19,112
Less accumulated depreciation and amortization (11,018) (10,730)
-------- --------
8,396 8,382
Software development costs, less amortization 2,113 1,922
Investments and other assets 5,357 5,264
-------- --------
$ 60,276 $ 57,958
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LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 13,843 $ 9,461
Accrued expenses 9,406 10,048
Bank debt 998 -
Current portion of long-term debt 310 645
-------- --------
Total current liabilities 24,557 20,154
Non-current liabilities:
Long-term debt 5,155 8,577
Defered credits and other obligations 538 486
-------- --------
Total liabilities 30,250 29,217
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 5,650,687 and
5,575,987 shares issued, respectively 565 557
Additional paid-in capital 45,025 44,695
Accumulated deficit (9,042) (9,711)
Accumulated other comprehensive income (6,522) (6,800)
Total shareholders' equity 30,026 28,741
-------- --------
$ 60,276 $ 57,958
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