Hurco(US:HURC)2025-06-06 20:08Financial Performance - Sales and service fees for the second quarter of fiscal year 2025 were $40.9 million, a decrease of $4.3 million, or 10%, compared to the same period in fiscal year 2024[90]. - Orders for the second quarter of fiscal year 2025 were $43.7 million, a decrease of $0.5 million, or 1%, compared to the corresponding period in fiscal year 2024[96]. - Sales in the Americas for the second quarter of fiscal year 2025 decreased by 9%, while European sales decreased by 5%, and Asian Pacific sales decreased by 29% compared to the same period in fiscal year 2024[91][92][93]. - Gross profit for the second quarter of fiscal year 2025 was $7.8 million, or 19% of sales, compared to $8.0 million, or 18% of sales, for the corresponding prior year period[99]. - Selling, general, and administrative expenses for the second quarter of fiscal year 2025 were $10.9 million, or 27% of sales, compared to $11.5 million, or 25% of sales, in the corresponding fiscal year 2024 period[100]. - Operating loss for the second quarter of fiscal year 2025 was $3.1 million, compared to $3.4 million for the corresponding period in fiscal year 2024[101]. - Sales of computerized machine tools for the second quarter of fiscal year 2025 decreased by 10%, while sales of computer control systems and software increased by 12%[95]. - Sales and service fees for the first six months of fiscal year 2025 were $87.3 million, a decrease of $3.0 million, or 3%, compared to the prior year period[104]. - Orders for the first six months of fiscal year 2025 were $83.8 million, a decrease of $10.6 million, or 11%, compared to the prior year period[111]. - Gross profit for the first six months of fiscal year 2025 was $16.1 million, or 18% of sales, compared to $17.7 million, or 20% of sales, for the prior year period[115]. - Operating loss for the first six months of fiscal year 2025 was $5.2 million, compared to $5.3 million for the prior year period[117]. Cash Flow and Capital Management - Cash and cash equivalents at April 30, 2025, were $43.8 million, compared to $33.3 million at October 31, 2024[120]. - Working capital was $175.9 million at April 30, 2025, compared to $180.8 million at October 31, 2024[121]. - Capital expenditures of $1.4 million during the first six months of fiscal year 2025 were primarily for software development costs and capital improvements[121]. - The company announced a share repurchase program of up to $25.0 million, with $21.7 million remaining available as of April 30, 2025[122]. - The company suspended its regular quarterly cash dividend on June 14, 2024, to enhance financial flexibility and manage market volatility[123]. - As of April 30, 2025, the company had no debt or borrowings under any of its credit facilities, with approximately $50.8 million available for borrowing[129][130]. Credit Facilities and Compliance - The 2018 Credit Agreement provides for an unsecured revolving credit facility of up to $40.0 million, with a maturity date of December 31, 2025[124]. - The company has a minimum working capital requirement of $125.0 million and a minimum tangible net worth of $176.5 million under the 2018 Credit Agreement[126]. - The company is in compliance with all covenants related to its credit facilities as of April 30, 2025[130]. - The company has renewed its uncommitted revolving credit facilities in Taiwan and China on substantially similar terms in February and December 2023, respectively[128]. Market and Strategic Initiatives - The company operates in a cyclical industry with approximately 50% of revenues from Europe and 12% from the Asia Pacific region[84]. - The company derived approximately 62% of its revenues from customers located outside of the Americas in the first six months of fiscal year 2025[142]. - The company is committed to product innovation, acquisitions, and targeted penetration of developing markets as part of its strategic plan[131]. - The company continues to review potential acquisitions, including intellectual property assets[132]. Currency and Risk Management - The company seeks to mitigate cash flow risks from fluctuating currency exchange rates through the use of derivative instruments[89]. - The company has entered into foreign currency forward exchange contracts to hedge against cash flow risks related to forecasted inter-company sales and purchases, with notional amounts including €6,000,000 and £3,150,000[145]. - The company has maintained a forward contract with a notional amount of €3.0 million to hedge its net investment in Euro-denominated assets, maturing in November 2025[146]. - As of April 30, 2025, the company had seven outstanding third-party payment guarantees totaling approximately $0.8 million[135].