Hurco Companies (HURC) Q2 2024 earnings summary

Executive summary

• Sales and service fees for Q2 2024 declined 16% year-over-year to $45.2 million, with notable decreases in the Americas and Europe, while Asia Pacific remained flat.

• Operating loss for Q2 2024 was $3.4 million, compared to operating income of $1.0 million in Q2 2023, driven by lower sales volume and reduced leverage of fixed costs.

• Net loss for Q2 2024 was $3.9 million, or $(0.61) per share, versus net income of $0.4 million, or $0.06 per share, in Q2 2023; six-month net loss was $5.6 million, compared to net income of $1.7 million in the prior year.

• Orders for Q2 2024 fell 27% year-over-year to $44.2 million, reflecting broad-based demand weakness; six-month orders down 17% to $94.4 million.

• Management is focused on cost control, inventory management, and R&D investment amid global market softness.

Financial highlights

• Six-month sales and service fees were $90.2 million, down 17% year-over-year, with declines in the Americas and Europe partially offset by growth in Asia Pacific.

• Gross profit margin for Q2 2024 was 18%, down from 23% in Q2 2023, due to lower sales of higher-margin products and price reductions.

• SG&A expenses were $11.5 million (25% of sales) in Q2, flat in dollars but up as a percentage due to lower sales.

• Cash and cash equivalents at April 30, 2024 were $37.5 million, down from $41.8 million at October 31, 2023.

• Dividends paid per share: $0.16 in Q2, $0.32 for six months.

Outlook and guidance

• Management is focused on adjusting overhead and operating expenses to mitigate the impact of lower sales volumes.

• The company continues to invest in new technologies, product development, and capital expenditures while seeking acquisition opportunities.

• Preparing for expanded presence at IMTS to showcase new technologies and automation solutions.

• Liquidity is considered adequate to fund global operations and strategic initiatives over the next twelve months and beyond.