Gross profit for the first quarter of fiscal year 2025 was $8,290,000, or 18% of sales, compared to $9,695,000, or 22% of sales, for the corresponding prior year period. The year-over-year decrease in gross profit as a percentage of sales was primarily due to the lower volume of sales of vertical milling machines in the Americas and Europe where we typically sell more of our higher-performance VMX series machines and lathes. Additionally, gross profit was negatively impacted by the allocation of fixed costs on lower margin sales and lower production volumes.
Selling, general, and administrative expenses for the first quarter of fiscal year 2025 were $10,382,000, or 22% of sales, compared to $11,515,000, or 26% of sales, in the corresponding fiscal year 2024 period, and included a favorable currency impact of $84,000, when translating foreign expenses to U.S. dollars for financial reporting purposes. The year-over-year reduction in selling, general and administrative expenses for the quarter reflected lower levels of discretionary spending, reduced sales commissions, and reduced employee health insurance costs.
Income tax expense for the first quarter of fiscal year 2025 was $2,041,000, compared to an income tax benefit of $601,000, for the corresponding prior year period. The year-over-year change was primarily due to a $2,385,000 non-cash valuation allowance recorded on our Italian, U.S. and China deferred tax assets, as well as changes in geographic mix of income and loss that includes jurisdictions with differing tax rates, and discrete items related to unvested stock compensation. Because we have a valuation allowance recorded against our Italian, U.S. and China deferred tax assets, we did not record a tax benefit of $1,153,000 for our U.S., Italy and China pre-tax losses for the three months ended January 31, 2025. The valuation allowance recorded during the first quarter of fiscal 2025 reflected a full valuation allowance of the U.S. and Italian deferred tax assets and was recorded after evaluating changes to tax laws, statutory tax rates, and our cumulative three-year income (loss) levels for the U.S. and Italy for the first quarter of fiscal year 2025.
Cash and cash equivalents totaled $41,820,000 at January 31, 2025, compared to $33,330,000 at October 31, 2024. Working capital was $172,591,000 at January 31, 2025, compared to $180,788,000 at October 31, 2024. The decrease in working capital was primarily driven by decreases in inventories and accounts receivable, net, partially offset by an increase in cash and cash equivalents.
Hurco Companies, Inc. is an international, industrial technology company that sells its three brands of computer numeric control (“CNC”) machine tools to the worldwide metal cutting and metal forming industry. Two of the Company’s brands of machine tools, Hurco and Milltronics, are equipped with interactive controls that include software that is proprietary to each respective brand. The Company designs these controls and develops the software. The third brand of CNC machine tools, Takumi, is equipped with industrial controls that are produced by third parties, which allows the customer to decide the type of control added to the Takumi CNC machine tool. The Company also produces high-value machine tool components and accessories and provides automation solutions that can be integrated with any machine tool. The end markets for the Company's products are independent job shops, short-run manufacturing operations within large corporations, and manufacturers with production-oriented operations. The Company’s customers manufacture precision parts, tools, dies, and/or molds for industries such as aerospace, defense, medical equipment, energy, transportation, and computer equipment. The Company is based in Indianapolis, Indiana, with manufacturing operations in Taiwan, Italy, and the U.S., and sells its products through direct and indirect sales forces throughout the Americas, Europe, and Asia. The Company has sales, application engineering support and service subsidiaries in China, the Czech Republic, England, France, Germany, India, Italy, the Netherlands, Poland, Singapore, the U.S., and Taiwan. Web Site: www.hurco.com
