Zacks Analyst Interview Highlights: Radyne and Hurco

Business Wire, Nov 30, 2006

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Debra Fiakas, who discusses Radyne Corporation (Nasdaq: RADN) and Hurco Systems (Nasdaq: HURC).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

Which companies would you like to discuss today?

One of the things I've been looking at in my coverage universe is the impact of currency trends on potential sales and profitability. The U.S. dollar has hit new records in recent weeks, so I've been paying particular attention to which companies in my universe might benefit from those trends. I can make note of two of them today for you: Radyne Corporation (Nasdaq: RADN) produces equipment in the ground portions of satellite communications systems, and Hurco Systems (Nasdaq: HURC) makes equipment for computer-enabled machine controls.

Both companies have significant portions of their businesses originating from foreign markets, and sales are denominated in U.S. dollars. So they benefit tremendously when foreign currencies purchase more dollar-denominated goods. Both are U.S. companies centrally located within the U.S., but they do have sales offices and training program operations in foreign markets. Not only are their sales denominated in U.S. dollars, but so are their expenses, which is another key consideration in determining whether or not currency changes might have an impact on potential sales as well as profitability.

Let's start with Radyne, then. How is the U.S. currency impact being felt at this company?

Radyne has had foreign sales for many, many years, with an extensive network of sales people and distributors throughout the world. The company currently sells in 90 countries, so clearly a significant portion of the business is coming from demand overseas. In fact, in markets where fiber products are not a significant part of the existing communications system, satellite technology will naturally play a greater role than it does, say, here in the U.S., where we benefit a great deal from a major embedded fiber connectivity for our communications systems.

You can include Radyne's satellite equipment in the overarching wireless communications industry. Products are used in systems for telephone connections, Internet connections and video broadcasting - either in privately owned networks or in public broadcasting industries like TV.

How are currency issues affecting Hurco?

Hurco is continuing to capture market share here in the U.S., but also through a very unique methodology where it attempts to penetrate the Chinese and Indian markets. Because much of the machine tool industry in China has historically been done through manual machines as opposed to those controlled by computer technology, it takes a significant amount of training for the workers who are handling machines to switch from manual to computer-controlled technologies. So Hurco has established a training facility within the industrial section of China, and offers free training to those who want to learn how to use these machines. We think this is an excellent way to build brand image as well as cultivate the markets.

Read the full interview at http://at.zacks.com/?id=2647.

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