Hurco Companies Inc reported QQ3 2024 revenue of $42.65 million, down 19.83% year over year and 5.58% quarter over quarter. The company posted a gross profit of $7.84 million with a gross margin of 18.39%, reflecting continued margin pressure in a volatile industrial tools market. Operating income was negative at $(2.53) million, and the bottom line showed a net loss of $(9.60) million, or $(1.47) per share, driven by a combination of operating expenses and a non-operating tax dynamic that amplified net losses in the quarter. Free cash flow was negative at $(1.36) million, and cash flow from operations was $(0.62) million, underscoring near-term cash-generation headwinds.
Despite the earnings softness, Hurco maintains a strong balance sheet and liquidity, ending the period with cash and equivalents of $36.05 million and a net cash position (net debt of $(23.53) million). The balance sheet shows ample working capital with a current ratio of 4.55 and a large inventory base of $164.17 million, contributing to elevated days of inventory on hand (424.48 days) and a notably slow turnover (inventory turnover of 0.212x). These dynamics point to a working-capital heavy model that will require supply-chain and demand normalization to improve cash conversion.
Management commentary in the QQ3 2024 filing does not include formal forward guidance in the provided data. The near-term investment thesis rests on a rebound in aerospace/defense, automotive, and general machinery end-markets, along with potential margin restoration through cost discipline, pricing actions, and smarter working-capital management. Investors should monitor order activity, backlog development, supplier costs, and the pace of inventory normalization as catalysts for a potential bottoming of Hurco’s earnings trajectory.