On September 6, 2024, Hurco Companies Inc (HURC, Financial) released its 8-K filing detailing the financial results for the third fiscal quarter ended July 31, 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.
Performance Overview
Hurco Companies Inc (HURC, Financial) reported a net loss of $9,596,000, or $(1.47) per diluted share, for the third quarter of fiscal year 2024. This compares to a net income of $260,000, or $0.04 per diluted share, for the same period in fiscal year 2023. The net loss included a non-cash tax valuation allowance of $8,158,000. For the nine months of fiscal year 2024, the company reported a net loss of $15,166,000, or $(2.33) per diluted share, compared to a net income of $1,967,000, or $0.30 per diluted share, for the corresponding period in fiscal year 2023.
Sales and Service Fees
Sales and service fees for the third quarter of fiscal year 2024 were $42,651,000, a decrease of $10,550,000, or 20%, compared to the same period in the previous year. For the nine months of fiscal year 2024, sales and service fees were $132,882,000, a decrease of $28,820,000, or 18%, compared to the corresponding period in fiscal year 2023.
Geographic Sales Breakdown
| Region | Three Months Ended July 31, 2024 | Three Months Ended July 31, 2023 | % Change | Nine Months Ended July 31, 2024 | Nine Months Ended July 31, 2023 | % Change |
|---|---|---|---|---|---|---|
| Americas | $15,389 | $18,272 | (16)% | $48,986 | $58,609 | (16)% |
| Europe | $24,068 | $31,162 | (23)% | $69,538 | $89,745 | (23)% |
| Asia Pacific | $3,194 | $3,767 | (15)% | $14,358 | $13,348 | 8% |
Orders and Gross Profit
Despite the decline in sales, global orders for the third quarter of fiscal year 2024 exceeded $52,000,000, showing improvement both year-over-year and compared to the previous two fiscal quarters. Gross profit for the third quarter was $7,843,000, or 18% of sales, compared to $13,448,000, or 25% of sales, for the corresponding prior year period. The decrease in gross profit was primarily due to lower sales volumes and reduced average net selling prices.
Operating Expenses and Income Tax
Selling, general, and administrative expenses for the third quarter of fiscal year 2024 were $10,376,000, or 24% of sales, compared to $12,436,000, or 29% of sales, in the corresponding fiscal year 2023 period. Income tax expenses during the third quarter were $6,999,000, compared to $385,000 for the corresponding period in 2023, primarily due to the non-cash valuation allowance on U.S. deferred tax assets.
Balance Sheet and Cash Flow
As of July 31, 2024, Hurco Companies Inc (HURC, Financial) had cash and cash equivalents totaling $36,054,000, compared to $41,784,000 at October 31, 2023. Working capital was $181,979,000 at July 31, 2024, compared to $193,257,000 at October 31, 2023.
CEO Commentary
Greg Volovic, Chief Executive Officer, stated, “While sales declined this quarter orders were positive. Global orders for this quarter exceeded $52,000,000 and improved both year-over-year and compared to the previous two fiscal quarters. Orders this quarter also outpaced sales by more than $10,000,000. We are hopeful that this positive order growth is representative of a trend and are prepared to meet new order growth. The global cost reductions we implemented this quarter will continue to impact results going forward. We remain focused on advancing the future of Hurco with many technological innovations.”
Conclusion
Hurco Companies Inc (HURC, Financial) faced significant challenges in the third quarter of fiscal year 2024, with notable declines in sales and net income. However, the positive trend in global orders and the company's focus on technological advancements provide a hopeful outlook for the future. Investors and stakeholders will be keenly watching how these factors play out in the coming quarters.
Explore the complete 8-K earnings release (here) from Hurco Companies Inc for further details.
