On June 7, 2024, Hurco Companies Inc (HURC, Financial) released its 8-K filing reporting results for the second fiscal quarter ended April 30, 2024. Hurco Companies Inc is a United States-based industrial technology company that designs, manufactures, and sells computerized machine tools, primarily vertical machining centers and turning centers, to the metalworking industry. The company focuses on user-friendly computer control systems for both skilled and unskilled operators, generating maximum revenue from its Computerized Machine Tools product line, with a majority of revenue derived from the United States.
Performance Overview
Hurco Companies Inc (HURC, Financial) reported a net loss of $3.92 million, or $(0.61) per diluted share, for the second quarter of fiscal year 2024, compared to a net income of $377,000, or $0.06 per diluted share, for the same period in fiscal year 2023. For the first six months of fiscal year 2024, the company reported a net loss of $5.57 million, or $(0.86) per diluted share, compared to a net income of $1.71 million, or $0.26 per diluted share, for the corresponding period in fiscal year 2023.
Revenue and Sales Analysis
Sales and service fees for the second quarter of fiscal year 2024 were $45.17 million, a decrease of $8.65 million, or 16%, compared to the same period in the prior year. For the first six months, sales and service fees were $90.23 million, a decrease of $18.27 million, or 17%, compared to the corresponding period in fiscal year 2023. The decline in sales was primarily due to decreased shipments of Hurco machines, particularly in the Americas and Europe.
| Region | Q2 2024 | Q2 2023 | % Change | H1 2024 | H1 2023 | % Change |
|---|---|---|---|---|---|---|
| Americas | $16.95M | $18.32M | (8)% | $33.60M | $40.34M | (17)% |
| Europe | $22.72M | $29.99M | (24)% | $45.47M | $58.58M | (22)% |
| Asia Pacific | $5.51M | $5.50M | 0% | $11.16M | $9.58M | 17% |
| Total | $45.17M | $53.82M | (16)% | $90.23M | $108.50M | (17)% |
Challenges and Strategic Focus
The company faced significant challenges due to global uncertainty and market softening, which resulted in tighter margins and lower sales volumes. CEO Greg Volovic emphasized the company's focus on adjusting overhead and operating expenses to minimize the impact on operating income while maintaining a strong balance sheet. Volovic stated,
“We are optimizing inventory management and utilizing the resulting cash flow to refine our capital allocation strategies, enabling us to invest in new technologies, product development, and essential capital expenditures, maximizing cash flows without incurring significant debt.”
Financial Metrics and Analysis
Gross profit for the second quarter of fiscal year 2024 was $8.02 million, or 18% of sales, compared to $12.58 million, or 23% of sales, for the same period in the prior year. The decrease in gross profit as a percentage of sales was primarily due to lower sales volumes and decreased average net selling prices. Selling, general, and administrative expenses for the second quarter were $11.46 million, or 25% of sales, compared to $11.59 million, or 22% of sales, in the prior year period.
Cash and cash equivalents totaled $37.54 million at April 30, 2024, compared to $41.78 million at October 31, 2023. Working capital was $187.57 million at April 30, 2024, compared to $193.26 million at October 31, 2023. The decrease in working capital was primarily driven by decreases in accounts receivable and cash and cash equivalents, partially offset by increases in inventories and prepaid assets.
Conclusion
Hurco Companies Inc (HURC, Financial) is navigating through a challenging market environment with a strategic focus on cost management and capital allocation. Despite the decline in revenue and net income, the company remains committed to investing in new technologies and product development to drive future growth. For more detailed insights and financial data, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Hurco Companies Inc for further details.
