Hurco Stock Down on Q4 Loss, Revenue and Gross Margins Decline

Core Viewpoint - Hurco Companies, Inc. reported significant financial losses for the fourth quarter and the full fiscal year 2024, reflecting a challenging market environment and declining revenues across all geographic segments [2][3][4]. Financial Performance - The company recorded a net loss of $1.4 million, or$ (0.23) per diluted share, for Q4 2024, compared to a net income of $2.4 million, or$ 0.36 per diluted share, in the same period last year [2]. - For the full fiscal year, Hurco reported a net loss of $16.6 million, or$ (2.56) per diluted share, against a net income of $4.4 million, or$ 0.66 per diluted share, in fiscal 2023 [2]. Revenue Analysis - Q4 revenues declined 18.8% year over year to $53.7 million, while full-year revenues fell 18.1% to$ 186.6 million [3]. - Sales in the Americas and Europe dropped 21.5% and 17.5%, respectively, while Asia Pacific saw a 10.9% decline in Q4 [3]. - For the full fiscal year, revenue in the Americas and Europe decreased 18.1% and 21.2%, respectively, while Asia Pacific experienced a 2.1% increase [4]. Profit Margins - Gross profit margins contracted to 23% in Q4 from 26% a year ago, with annual gross margins declining to 20% in fiscal 2024 from 25% in fiscal 2023 [5]. Expenses - Selling, general, and administrative (SG&A) expenses declined 9.7% to $12.7 million in Q4, representing 24% of sales, compared to 21% of sales in the prior-year period [6]. - Full-year SG&A expenses decreased 7.1% to$ 46 million, but the ratio to sales increased to 25% from 22% [6]. Orders and Market Trends - New orders for Q4 decreased 6% year over year to $51.1 million, with Asia Pacific orders surging 103%, offsetting declines in the Americas and Europe [7]. - For the full fiscal year, new orders decreased 5% to$ 198.3 million, with a 54% increase in Asia Pacific partially offsetting declines in the Americas and Europe [7]. Management Insights - CEO Greg Volovic noted a 19% contraction in the global machine tool market but highlighted signs of improvement, including growth in global orders and a stronger second half [8]. - The company showcased technological advancements at the International Manufacturing Technology Show, focusing on innovation to maintain competitive positioning [8]. Influencing Factors - Hurco's performance was impacted by weak demand across most regions, a challenging pricing environment, and decreased shipments of key products [9]. - Positive contributions came from increased sales of higher-performance 5-axis machines and ProCobots automation solutions [9]. Future Outlook - While no specific forward guidance was provided, management expressed optimism about navigating the cyclical nature of the machine tool industry, emphasizing the company's strong balance sheet and technological investments [11].