0000315374false00003153742024-09-062024-09-06

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): September 6, 2024

Hurco Companies, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Indiana

(State or Other Jurisdiction of Incorporation)

0-9143

35-1150732

(Commission File Number)

(IRS Employer Identification No.)

One Technology Way

Indianapolis, Indiana

46268

(Address of Principal Executive Offices)

(Zip Code)

(317) 293-5309

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value

HURC

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Item 2.02    Results of Operations and Financial Condition.

On September 6, 2024, Hurco Companies, Inc. (the “Company”) reported its results of operations for the third fiscal quarter and nine months ended July 31, 2024. The Company’s earnings release for those periods is attached as Exhibit 99.1 and the information set forth therein is incorporated herein by reference and constitutes a part of this report. The attached Exhibit 99.1 is furnished pursuant to Item 2.02 of Form 8-K.

Item 9.01Financial Statements and Exhibits.

Exhibit Index

99.1

Press Release of Hurco Companies, Inc., dated September 6, 2024

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Dated: September 6, 2024

 

 

 

HURCO COMPANIES, INC.

 

 

 

 

 

 

By:

/s/ Sonja K. McClelland_______________

 

 

Sonja K. McClelland, Executive Vice President,

Treasurer and Chief Financial Officer

Exhibit 99.1

FOR IMMEDIATE RELEASE

FRIDAY, SEPTEMBER 6, 2024

HURCO REPORTS THIRD QUARTER RESULTS FOR FISCAL YEAR 2024

INDIANAPOLIS, INDIANA – September 6, 2024 – Hurco Companies, Inc. (Nasdaq: HURC) today reported results for the third fiscal quarter ended July 31, 2024.  Hurco recorded a net loss of $9,596,000, or $(1.47) per diluted share, in the third quarter of fiscal year 2024, which included a non-cash tax valuation allowance of $8,158,000 recorded in provision for income taxes.  This net loss of $9,596,000 for the third quarter of fiscal 2024 compares to net income of $260,000, or $0.04 per diluted share, for the corresponding period in fiscal year 2023.  For the nine months of fiscal year 2024, Hurco reported a net loss of $15,166,000, or $(2.33) per diluted share, compared to net income of $1,967,000, or $0.30 per diluted share, for the corresponding period in fiscal year 2023.  The net loss for the nine months of fiscal 2024 also included the $8,158,000 non-cash tax valuation allowance recorded in provision for income taxes.

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 corresponding prior year period, and included an unfavorable currency impact of $42,000, or less than 1%, when translating foreign sales to U.S. dollars for financial reporting purposes. Sales and service fees for the nine months of fiscal year 2024 were $132,882,000, a decrease of $28,820,000, or 18%, compared to the corresponding prior year period, and included a favorable currency impact of $796,000, or less than 1%, when translating foreign sales to U.S. dollars for financial reporting purposes.

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.  In September, IMTS attendees will have the unique opportunity to engage with the latest concept designs of Hurco's next-generation control and Milltronics’ new INSPIRE+ control and software. We will also showcase all of our CNC machines with ProCobots collaborative robotic systems. Hurco's advanced control software is now integrated with industrial robot automation from Kawasaki Robotics and Hurco Automation, powered by ProCobots, eliminating the need for complex robot programming. We believe that our strong balance sheet and focus on future technological advancement differentiates Hurco from our competitors, helping us navigate cyclical periods and emerge stronger.  We look forward to an exciting exhibition at IMTS and market improvement for machine tools as we close out fiscal 2024.”

The following table sets forth net sales and service fees by geographic region for the third fiscal quarter and nine months ended July 31, 2024, and 2023 (dollars in thousands):

Three Months Ended

Nine Months Ended

July 31,

July 31,

2024

2023

$ Change

% Change

2024

2023

$ Change

% Change

Americas

$15,389

$18,272

($2,883)

(16)%

$48,986

$58,609

($9,623)

(16)%

Europe

24,068

31,162

(7,094)

(23)%

69,538

89,745

(20,207)

(23)%

Asia Pacific

3,194

3,767

(573)

(15)%

14,358

13,348

1,010

8%

Total

$42,651

$53,201

($10,550)

(20)%

$132,882

$161,702

($28,820)

(18)%


Sales in the Americas for each of the third quarter and nine months of fiscal year 2024 decreased by 16%, compared to the corresponding periods in fiscal year 2023, primarily due to decreased shipments of Hurco and Takumi machines.  The decrease in sales of these machines was mainly attributable to decreased shipments of Hurco and Takumi 3-axis vertical machines, partially offset by increased sales of higher-performing Hurco 5-axis machines and Milltronics 3-axis vertical machines.

European sales for each of the third quarter and nine months of fiscal year 2024 decreased by 23%, compared to the corresponding periods in fiscal year 2023, and each period included a favorable currency impact of 1%, when translating foreign sales to U.S. dollars for financial reporting purposes. The year-over-year decreases in European sales were primarily attributable to a decreased volume of shipments of Hurco and Takumi machines in Germany, Italy, and the United Kingdom, as well as decreased shipments of electro-mechanical components and accessories manufactured by our wholly-owned subsidiary, LCM Precision Technology S.r.l. (“LCM”).

Asian Pacific sales for the third quarter of fiscal year 2024 decreased by 15%, compared to the corresponding period in fiscal year 2023, and included an unfavorable currency impact of 2%, when translating foreign sales to U.S. dollars for financial reporting purposes.  The third quarter of fiscal year 2024 decrease in Asian Pacific sales was mainly due to decreased shipments of Takumi machines in China and Hurco machines in Southeast Asia, partially offset by increased shipments of Hurco machines in India and to one customer with multiple machine orders in China.  Asian Pacific sales for the nine months of fiscal year 2024 increased by 8%, compared to the corresponding prior year period, and included an unfavorable currency impact of 2%, when translating foreign sales to U.S. dollars for financial reporting purposes.  The year-over-year increase in Asian Pacific sales in the nine-month period was primarily attributable to increased shipments of Hurco machines in India and to one customer with multiple machine orders in China, partially offset by decreased shipments of Takumi machines in China and Hurco machines in Southeast Asia.

Orders for the third quarter of fiscal year 2024 were $52,815,000, an increase of $10,733,000, or 26%, compared to the corresponding period in fiscal year 2023, and included an unfavorable currency impact of $47,000, or less than 1%, when translating foreign orders to U.S. dollars. Orders for the nine months of fiscal year 2024 were $147,225,000, a decrease of $8,310,000, or 5%, compared to the corresponding period in fiscal year 2023, and included a favorable currency impact of $846,000, or less than 1%, when translating foreign orders to U.S. dollars.

The following table sets forth new orders booked by geographic region for the third fiscal quarter and nine months ended July 31, 2024, and 2023 (dollars in thousands):

Three Months Ended

Nine Months Ended

July 31,

July 31,

2024

2023

$ Change

% Change

2024

2023

$ Change

% Change

Americas

$17,625

$14,607

$3,018

21%

$55,490

$56,548

($1,058)

(2)%

Europe

28,349

24,752

3,597

15%

75,757

87,632

(11,875)

(14)%

Asia Pacific

6,841

2,723

4,118

151%

15,978

11,355

4,623

41%

Total

$52,815

$42,082

$10,733

26%

$147,225

$155,535

($8,310)

(5)%


Orders in the Americas for the third quarter of fiscal year 2024 increased by 21%, compared to the corresponding period in fiscal year 2023.  The increase in orders was primarily due to increased customer demand for Hurco higher-performing 5-axis machines, Hurco and Milltronics lathes, and Milltronics 3-axis vertical machines.  Orders in the Americas for the nine months of fiscal year 2024 decreased by 2%, compared to the corresponding period in fiscal year 2023. The decrease in orders was primarily due to decreased customer demand for Hurco 3-axis vertical machines, partially offset by increased demand for Hurco higher-performing 5-axis machines and Milltronics 3-axis vertical machines. The decrease in orders was also impacted by a reduction in average net selling prices for certain machines designed to penetrate key markets and reduce inventories.  

European orders for the third quarter of fiscal year 2024 increased by 15%, compared to the corresponding prior year period, and included a favorable currency impact of less than 1%, when translating foreign orders to U.S. dollars. The increase in orders was driven primarily by increased customer demand for Hurco machines in the United Kingdom, France and Italy, particularly Hurco lathes and higher-performing 5-axis machines.  European orders for the nine months of fiscal year 2024 decreased by 14%, compared to the corresponding prior year period, and included a favorable currency impact of 1%, when translating foreign orders to U.S. dollars. The year-over-year decrease was mainly due to decreased customer demand for Hurco machines across the European region where our customers are located and for electro-mechanical components and accessories manufactured by LCM.

Asian Pacific orders for the third quarter of fiscal year 2024 increased by 151%, compared to the corresponding prior year period, and included an unfavorable currency impact of 5%, when translating foreign orders to U.S. dollars. The increase in Asian Pacific orders was driven primarily by increased customer demand for Hurco and Takumi machines in China, India, and Southeast Asia.  Orders for the nine months of fiscal year 2024 increased by 41%, compared to the corresponding prior year period, and included an unfavorable currency impact of 3%, when translating foreign orders to U.S. dollars. The year-over-year increase in Asian Pacific orders was driven primarily by increased customer demand for Hurco machines in China and Hurco and Takumi machines in India, partially offset by decreased demand for Takumi machines in China. The increased customer demand for Hurco machines in China and India for both periods related primarily to two customers with multiple machine orders.

Gross profit for the third quarter of fiscal year 2024 was $7,843,000, or 18% of sales, compared to $13,448,000, or 25% of sales, for the corresponding prior year period. Gross profit for the nine months of fiscal year 2024 was $25,557,000, or 19% of sales, compared to $38,749,000, or 24% of sales, for the corresponding prior year period.  The year-over-year decreases were primarily due to the lower volume of vertical milling machine sales in the Americas and Europe. Additionally, the second and third quarters of fiscal year 2024 included decreases in average net selling prices for certain machines, designed to penetrate key markets and reduce inventories.  The decreases in both sales volume and pricing unfavorably impacted gross profit in dollars and as a percentage of sales, reducing our leverage of fixed costs, in comparison to the corresponding prior year periods.  Further, certain cost reductions were implemented in the third quarter of fiscal 2024 in an effort to help offset the impact of lower sales volumes and pricing.


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 23% of sales, in the corresponding fiscal year 2023 period, and included a favorable currency impact of $27,000, when translating foreign expenses to U.S. dollars for financial reporting purposes. Selling, general, and administrative expenses for the nine months of fiscal year 2024 were $33,352,000, or 25% of sales, compared to $35,512,000, or 22% of sales, in the corresponding fiscal year 2023 period, and included an unfavorable currency impact of $155,000, when translating foreign expenses to U.S. dollars for financial reporting purposes. The year-over-year reductions in selling, general, and administrative expenses were primarily due to cost reductions implemented in the third quarter of fiscal year 2024 in an effort to help offset the impact of lower sales volume.  Despite reductions from an absolute dollar perspective, selling, general, and administrative expenses increased as a percentage of sales in the third quarter and nine months of fiscal year 2024, compared to each of the corresponding prior year periods, due to the lower volume of sales year-over-year.

Income tax expenses during the third quarter and nine months of fiscal year 2024 was $6,999,000 and $6,438,000, respectively, compared to $385,000 and $1,286,000 for the corresponding periods in 2023. The year-over-year increases in income tax expense for the third quarter and nine months of fiscal year 2024 were primarily due to an $8,158,000 non-cash valuation allowance on U.S. deferred tax assets and changes in geographic mix of income and loss that includes jurisdictions with differing tax rates, and, specifically for the nine months of fiscal year 2024, discrete items related to unvested stock compensation. Because we have a valuation allowance recorded against our U.S. deferred tax assets, we did not record a tax benefit for our U.S. net losses for the nine months ended July 31, 2024. The valuation allowance recorded during the third quarter of fiscal 2024 reflects a full valuation allowance of the U.S. deferred tax assets and was recorded after evaluating changes to tax laws, statutory tax rates, and our cumulative historical three-year income levels for the U.S. as of July 31, 2024.

Cash and cash equivalents totaled $36,054,000 at July 31, 2024, 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. The decrease in working capital was primarily driven by decreases in accounts receivable, net and cash and cash equivalents, partially offset by increases in inventories, net and decreases in accounts payable and accrued payroll and employee benefits.

Hurco Companies, Inc. is an international, industrial technology company that sells its three brands of computer numeric control (“CNC”) machine tools to the worldwide metal cutting and metal forming industry. Two of the Company’s brands of machine tools, Hurco and Milltronics, are equipped with interactive controls that include software that is proprietary to each respective brand. The Company designs these controls and develops the software. The third brand of CNC machine tools, Takumi, is equipped with industrial controls that are produced by third parties, which allows the customer to decide the type of control added to the Takumi CNC machine tool. The Company also produces high-value machine tool components and accessories and provides automation solutions that can be integrated with any machine tool. The end markets for the Company's products are independent job shops, short-run manufacturing operations within large corporations, and manufacturers with production-oriented operations. The Company’s customers manufacture precision parts, tools, dies, and/or molds for industries such as aerospace, defense, medical equipment, energy, transportation, and computer equipment. The Company is based in Indianapolis, Indiana, with manufacturing operations in Taiwan, Italy, the U.S., and China, and sells its products through direct and indirect sales forces throughout the Americas, Europe, and Asia. The Company has sales, application engineering support and service subsidiaries in China, the Czech Republic, England, France, Germany, India, Italy, the Netherlands, Poland, Singapore, the U.S., and Taiwan. Web Site: www.hurco.com


Certain statements in this news release are forward-looking statements that 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, the cyclical nature of the machine tool industry; uncertain economic conditions, which may adversely affect overall demand, in the Americas, Europe and Asia Pacific markets; the risks of our international operations; governmental actions, initiatives and regulations, including import and export restrictions, duties and tariffs and changes to tax laws; the effects of changes in currency exchange rates; competition with larger companies that have greater financial resources; our dependence on new product development; the need and/or ability to protect our intellectual property assets; the limited number of our manufacturing and supply chain sources; increases in the prices of raw materials, especially steel and iron products; the effect of the loss of members of senior management and key personnel; our ability to integrate acquisitions; acquisitions that could disrupt our operations and affect operating results; failure to comply with data privacy and security regulations; breaches of our network and system security measures; possible obsolescence of our technology and the need to make technological advances; impairment of our assets; negative or unforeseen tax consequences; uncertainty concerning our ability to use tax loss carryforwards; changes in the SOFR rate; the impact of the COVID-19 pandemic and other public health epidemics and pandemics on the global economy, our business and operations, our employees and the business, operations and economies of our customers and suppliers; and other risks and uncertainties discussed more fully under the caption “Risk Factors” in our filings with the Securities and Exchange Commission. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:Sonja K. McClelland

Executive Vice President, Treasurer, & Chief Financial Officer

317-293-5309


Hurco Companies, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended
July 31,

Nine Months Ended
July 31,

2024

2023

2024

2023

(unaudited)

(unaudited)

Sales and service fees

$ 42,651

$ 53,201

$ 132,882

$ 161,702

Cost of sales and service

34,808

39,753

107,325

122,953

Gross profit

7,843

13,448

25,557

38,749

Selling, general and administrative expenses

10,376

12,436

33,352

35,512

Operating (loss) income

(2,533)

1,012

(7,795)

3,237

Interest expense

159

88

426

159

Interest income

172

122

492

259

Investment income

59

11

126

47

Other (expense) income, net

(136)

(412)

(1,125)

(131)

(Loss) income before taxes

(2,597)

645

(8,728)

3,253

Provision for income taxes

6,999

385

6,438

1,286

Net (loss) income

($ 9,596)

$ 260

($ 15,166)

$ 1,967

(Loss) income per common share

Basic

($ 1.47)

$ 0.04

($ 2.33)

$ 0.30

Diluted

($ 1.47)

$ 0.04

($ 2.33)

$ 0.30

Weighted average common shares outstanding

Basic

6,513

6,462

6,505

6,511

Diluted

6,513

6,469

6,505

6,538

Dividends per share

$ -

$ 0.16

$ 0.32

$ 0.47

OTHER CONSOLIDATED FINANCIAL DATA

Three Months Ended
July 31,

Nine Months Ended
July 31,

Operating Data:

2024

2023

2024

2023

(unaudited)

(unaudited)

Gross margin

18%

25%

19%

24%

SG&A expense as a percentage of sales

24%

23%

25%

22%

Operating (loss) income as a percentage of sales

(6)%

2%

(6)%

2%

Pre-tax (loss) income as a percentage of sales

(6)%

1%

(7)%

2%

Effective tax rate

(270)%

60%

(74)%

40%

Depreciation and amortization

$ 888

$ 1,037

$ 2,678

$ 3,141

Capital expenditures

$ 735

$ 345

$ 2,046

$ 1,751

Balance Sheet Data:

7/31/2024

10/31/2023

Working capital

$ 181,979

$ 193,257

Days sales outstanding

46

41

Inventory turns

1.0

1.1

Capitalization

Total debt

--

--

Shareholders' equity

206,625

222,231

Total

$ 206,625

$ 222,231


Hurco Companies, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

July 31,

October 31,

2024

2023

ASSETS

(unaudited)

Current assets:

Cash and cash equivalents

$ 36,054

$ 41,784

Accounts receivable, net

25,128

39,965

Inventories, net

164,170

157,952

Derivative assets

83

740

Prepaid and other assets

7,777

7,789

Total current assets

233,212

248,230

Property and equipment:

Land

1,046

1,046

Building

7,387

7,387

Machinery and equipment

26,056

26,779

Leasehold improvements

4,545

4,473

39,034

39,685

Less accumulated depreciation and amortization

(31,843)

(30,826)

Total property and equipment, net

7,191

8,859

Non-current assets:

Software development costs, less accumulated amortization

7,076

7,030

Intangible assets, net

798

994

Operating lease - right of use assets, net

12,158

10,971

Deferred income taxes

1,237

4,749

Investments and other assets

10,704

9,756

Total non-current assets

31,973

33,500

Total assets

$ 272,376

$ 290,589

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 26,938

$ 29,661

Customer deposits

4,341

2,827

Derivative liabilities

1,856

1,821

Operating lease liabilities

3,924

3,712

Accrued payroll and employee benefits

7,985

9,853

Accrued income taxes

830

1,713

Accrued expenses

4,283

4,092

Accrued warranty expenses

1,076

1,294

Total current liabilities

51,233

54,973

Non-current liabilities:

Deferred income taxes

59

83

Accrued tax liability

701

1,293

Operating lease liabilities

8,602

7,606

Deferred credits and other

5,156

4,403

Total non-current liabilities

14,518

13,385

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; 6,607,060 and 6,553,673 shares issued and 6,493,846 and 6,462,138 shares outstanding, as of July 31, 2024 and October 31, 2023, respectively

649

646

Additional paid-in capital

61,919

61,665

Retained earnings

162,865

180,124

Accumulated other comprehensive loss

(18,808)

(20,204)

Total shareholders' equity

206,625

222,231

Total liabilities and shareholders' equity

$ 272,376

$ 290,589


v3.24.2.u1
Document and Entity Information
Sep. 06, 2024
Document and Entity Information [Abstract]  
Document Type 8-K
Document Period End Date Sep. 06, 2024
Entity File Number 0-9143
Entity Registrant Name Hurco Companies, Inc.
Entity Incorporation, State or Country Code IN
Entity Tax Identification Number 35-1150732
Entity Address State Or Province IN
Entity Address, Address Line One One Technology Way
Entity Address, City or Town Indianapolis
Entity Address, Postal Zip Code 46268
City Area Code 317
Local Phone Number 293-5309
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, no par value
Trading Symbol HURC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000315374
Amendment Flag false

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