Here is an excerpt from the Qtrly report of a co. that I have a small position in. Can you say RECESSION coming? <eg>
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New order bookings during the second quarter of fiscal 1999 were $20.0 million, a decrease of 23.7% from the $26.2 million reported for the second quarter of fiscal 1998. Orders for computerized machine systems declined $4.1 million, or 22.6%. The decline was most pronounced in the United States, where demand has been significantly lower in response to the weak market conditions in the metal cutting and metal forming industries that have persisted since the third quarter of fiscal 1998. Orders for computerized machine systems were also lower in Europe, which posted a 15% decline in order value, reflecting an 8% reduction in unit orders and a decrease in the percentage of large machine systems in the sales mix. Orders for stand-alone computer control systems declined by $1.7 million, or 44%, reflecting the ongoing repositioning of these products. Backlog was $9.1 million at April 30, 1999 as compared to $11.0 million at January 31, 1999, a decrease of $1.9 million, reflecting increased availability of new products for shipment.
Brian McLaughlin, President and CEO, stated, "Domestic market conditions continue to be weak and have resulted in high inventories of finished product that are overhanging the market. We don't expect any significant improvement in the U.S. market during this fiscal year. The U.K. market also continues to be weak and we are seeing softer market conditions in Germany, France and Italy. Although price competition is intense, our gross profit margins held up reasonably well at 27.2% compared to the 28.4% reported for the first quarter of this fiscal year, with the decrease due primarily to lower absortion of manufacturing costs into inventory along with a decline in the percentage of large model machines in the mix of shipments."
Mr. McLaughlin also noted, "We are pleased with customer acceptance of our new products. We are focusing on controlling our operating expenses during this difficult market period, but we plan to continue to pursue our planned product development and sales organization development activities, which are important to our future growth."
Hurco Companies, Inc. is an industrial automation company that designs and produces interactive computer controls, software and computerized machine systems 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, Ind., and has sales, application engineering and service subsidiaries in Farmington Hills, Mich.; High Wycombe, England; Munich, Germany; Paris, France and Singapore. 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 States, the United Kingdom, Germany, France, and Asia. <<
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