$HURC reports Q1 2023 sales decrease and plans for growth and shareholder value.
Mar 10th 2023, 2:31 pm
Analyst Summary: Hurco Companies, Inc. (NASDAQ: HURC) reported a decrease in sales and orders for the first fiscal quarter ended January 31, 2023, compared to the corresponding period in 2022 due to decreased demand for Hurco and Takumi machines. The decrease in gross profit as a percentage of sales was primarily due to the lower volume of sales of vertical milling machines across all sales regions, particularly in the European sales region. The effective tax rate decreased primarily due to changes in geographic mix of income and loss that includes jurisdictions with differing tax rates and a discrete item related to stock compensation. Despite global market oscillations in demand, Hurco plans to continue to innovate and invest in new technologies, maintain a strong balance sheet, and follow a balanced capital allocation strategy that prioritizes liquidity while also targeting accretive growth and returning shareholder value. The CEO has indicated that the decrease in sales and orders was not unexpected, given the volatility in the macroeconomic environment, and Hurco is well positioned to be opportunistic and prepared for the upside of these market cycles when they come. Through its three brands of machine tools, Hurco and Milltronics, which are equipped with interactive controls that include proprietary software, and Takumi, which allows the customer to decide the type of control added to the CNC machine tool, the company designs and develops machine tool components and accessories and provides automation solutions that can be integrated with any machine tool. The company serves multiple end markets including independent job shops, short-run manufacturing operations within large corporations, and manufacturers with production-oriented operations, and its products are in demand in industries such as aerospace, defense, medical equipment, energy, transportation, and computer equipment. Based in Indianapolis, Indiana, with manufacturing operations in Taiwan, Italy, the U.S., and China, the company sells its products through direct and indirect sales forces throughout the Americas, Europe, and Asia. Hurco's board of directors approved a $25 million share repurchase program, to be made in the open market or through privately negotiated transactions through November 10, 2024, subject to applicable laws, regulations, and contractual provisions. Additionally, the company has a $7 million share repurchase program that remains in effect until its scheduled expiration on March 10, 2023, with $3.4 million remaining available under that program as of January 31, 2023. Hurco is committed to returning value to shareholders and approved a dividend of $0.16 per share on its issued and outstanding common stock, to be paid on April 10, 2023, to shareholders of record as of the close of business on March 27, 2023. Forward-looking statements in the news release acknowledge the risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements, and investors are encouraged to review Hurco's filings with the Securities and Exchange Commission.