Hurco Companies Inc (HURC)HURC

Hurco Companies Inc. Overview

Company Profile

History and Background

Hurco Companies Inc. (NASDAQ: HURC) was founded in 1968 by Gerald Rochford in Indianapolis, Indiana. The company designs, manufactures, and sells CNC (computer numerically controlled) machine tools and related products and services. Hurco pioneered the development of conversational programming for CNC machines, making them easier to program and use. Over the years, Hurco has expanded its product portfolio and global reach, becoming a leading supplier of CNC machine tools to diverse industries.

Core Business Areas

Hurco's core business areas include:

• CNC Machine Tools: The company offers a wide range of CNC mills, lathes, and machining centers for a variety of applications.
• Conversational Programming: Hurco's WinMax® software simplifies CNC programming through an intuitive conversational interface.
• Machine Tool Service: Hurco provides comprehensive service and support for its CNC machines, including installation, maintenance, and repairs.
• Automation Solutions: Hurco offers a range of automation solutions, including robotic loaders and automatic tool changers, to improve productivity and efficiency.

Leadership and Corporate Structure

Hurco is led by a team of experienced executives, including:

• Michael Doss, President and CEO: Doss has over 25 years of experience in the machine tool industry and has been with Hurco since 2006.
• David Litwin, CFO: Litwin has over 20 years of experience in finance and accounting and has been with Hurco since 2016.
• Timothy McLoughlin, COO: McLoughlin has over 25 years of experience in operations and has been with Hurco since 2014.

The company's corporate structure is relatively straightforward, with the CEO reporting to the Board of Directors.

Top Products and Market Share

Top Products and Offerings

Hurco's top products include:

• VMC Series Vertical Machining Centers: This series offers a range of sizes and features to meet diverse machining requirements.
• BX Series Bridge Mills: These mills offer a large work envelope and high precision for complex parts.
• TM Series Turning Centers: This series provides high-performance turning capabilities with a variety of options.
• WinMax® Conversational Programming Software: This software simplifies CNC programming through its user-friendly interface and graphical programming capabilities.

Market Share

Hurco's global market share in the CNC machine tool market is estimated to be around 2-3%. In the US market, the company holds a market share of approximately 4%.

Product Performance and Competitor Comparison

Hurco's products are generally well-regarded for their ease of use, reliability, and value for money. The company's conversational programming software is considered a key differentiator, attracting customers who appreciate its user-friendly interface. However, Hurco faces competition from several larger players in the industry, who may have more advanced technology or broader product offerings.

Total Addressable Market

The total addressable market (TAM) for CNC machine tools is estimated to be around $60 billion globally. The US market represents approximately 20% of this total, or $12 billion.

Financial Performance

Recent Financial Statement Analysis

Hurco's recent financial performance has been mixed. The company's revenue in 2023 was $225.4 million, a decrease of 12.5% from 2022. Net income was $20.3 million, compared to $29.2 million in 2022. The decrease in revenue and net income was primarily attributed to a decline in demand due to global economic uncertainties and supply chain disruptions.

Year-Over-Year Comparison

Year-over-year comparison shows a decline in revenue and net income, with profit margins also decreasing from 12.2% in 2022 to 9% in 2023. The company's earnings per share (EPS) also declined from $2.02 in 2022 to $1.44 in 2023.

Cash Flow and Balance Sheet Health

Hurco's cash flow from operations in 2023 was $22.4 million, compared to $35.6 million in 2022. The decrease was primarily due to lower revenue and profitability. The company's balance sheet remains relatively healthy, with a total debt-to-equity ratio of 0.52.

Dividends and Shareholder Returns

Dividend History

Hurco initiated a quarterly dividend in 2021. The current annualized dividend is $0.40 per share, representing a dividend yield of approximately 1.2%. The company's payout ratio is currently around 25%.

Shareholder Returns

Total shareholder returns for Hurco over the past year have been negative, reflecting the decline in the company's stock price. However, over longer timeframes, shareholder returns have been positive. Over the past five years, total shareholder returns have been approximately 10% per year.

Growth Trajectory

Historical Growth Analysis

Over the past five years, Hurco has experienced moderate revenue growth, averaging around 5% per year. However, the company's growth has been impacted by recent economic and industry challenges.

Future Growth Projections

Analysts expect Hurco's revenue to grow by around 2-3% in 202