Hurco Reports Record Full-Year and Fourth Quarter Results.
Operating income for fiscal 2006 was a record $22,628,000, or 15.2% of sales, compared to $16,501,000, or 13.1% of sales, in fiscal 2005. Operating income in the fourth quarter totaled $6,515,000, or 15.1% of sales, compared to $5,318,000, or 15.3% of sales, in the same period one year ago.
Net income for fiscal 2006 was $15,479,000, or $2.42 per share reflecting the fact that Hurco was fully taxable in 2006 and incurred income tax expense of $7,635,000. In contrast Hurco had no income tax expense in 2005 due to the utilization of domestic net operating loss carryforwards and therefore, net income for fiscal 2005 was $16,443,000, or $2.60 per share. Net income for fourth quarter of fiscal 2006 was $4,714,000, or $.74 per share compared to net income of $7,235,000, or $1.13 per share.
New order bookings in fiscal 2006, were a record $154,767,000, an increase of $31,905,000, or 26%, over the prior year. Unit orders increased by 33% in the United States, 29% in Europe and 68% in Asia. New order bookings for the fourth quarter of fiscal 2006, also a record, totaled $42,087,000, an increase of $7,932,000, or 23%, over the corresponding 2005 period.
The financial statement impact of translating foreign currency denominated sales and orders to US dollars was an insignificant amount for the fourth quarter and full fiscal year.
Hurco's gross margin for fiscal 2006 was 35.9% compared to 33.9% for the prior year, reflecting both higher unit sales and improved mix. Gross margin for the fourth quarter of fiscal 2006 was 38.0% compared to 35.1% for the corresponding 2005 period. Selling, general and administrative expenses were $30,697,000 for fiscal 2006, an increase of $4,640,000 over the amount for fiscal 2005. Selling, general and administrative expenses were $9,869,000 for the fourth quarter of fiscal 2006, an increase of $2,999,000 over the amount recorded for the same period in 2005. The increase in selling, general and administrative expenses for the fourth quarter and the fiscal year 2006 were primarily attributable to increased sales and marketing expenses for local and international trade shows, agent's commissions, and expansion of sales in emerging markets.
Cash and cash equivalents totaled $29,846,000 at October 31, 2006 compared to $17,559,000 at October 31, 2005 and $24,504,000 at the third quarter ending July 31, 2006. Total debt was $4,010,000 at October 31, 2006 and represented 5.1% of the company's total capitalization, which aggregated $79,385,000.
Michael Doar, Chief Executive Officer, stated, "This was another great year for Hurco as we achieved even higher milestones, putting the company in the best financial position in it's history. Much of our success is due to the strategic planning that began in 2001. Focusing on our core competencies, we have centered our efforts around three objectives: identifying our customers and understanding how to best serve them; defining our unique selling proposition by understanding what we do better than anyone else; and maximizing profits for both the short term and the long term.
As a global company with more than 60 percent of our sales outside of the United States, understanding emerging markets is an integral part of sustainable success. Using a disciplined approach to globalization, we have leveraged technical resources, system platforms, and processes to facilitate a consistent, yet flexible, brand identity and an ability to conduct global business efficiently."
Hurco Companies, Inc. is an industrial technology company that designs and produces interactive computer controls, software and computerized machine tools for the worldwide metal cutting and metal forming industry. The end market for the Company's products consists primarily of independent job shops and short-run manufacturing operations within large corporations in industries such as the aerospace, defense, medical equipment, energy, transportation and computer equipment. The Company is based in Indianapolis, Indiana, and has sales, application engineering and service subsidiaries in High Wycombe, England; Munich, Germany; Paris, France; Milan, Italy; Shanghai, China and Singapore, along with manufacturing operations in Taiwan. Products are sold through independent agents and distributors in the United States, Europe and Asia. The Company also has direct sales forces in the United Kingdom, Germany, France, Italy, and Asia.
Web Site: www.hurco.com
This news release contains forward looking statements which 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, changes in general economic and business conditions that affect demand for computerized machine systems, computer numerical control systems and software products, changes in manufacturing markets, innovations by competitors, our ability to protect our intellectual property, fluctuations in exchange rates, fluctuations in prices of raw materials, changes in market demands, quality and delivery performance by our contract manufacturers and governmental actions and initiatives including import and export restrictions and tariffs.
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