INDIANAPOLIS, Sept. 06, 2024 (GLOBE NEWSWIRE) -- 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 ...
