2.	We note that you discontinued the production of sale of underperforming products, In future filings, please disclose the products discontinued and make quantified disclosures about anticipated and actual cost savings derived from your restructuring efforts during the periods presented.

3.	The audit report included in the Form 10-K filed in EDGAR is not signed. In future filings ensure that the audit report includes the conformed signature of your independent auditor. Refer to Regulation S-X, Article 2.

4.

It appears that your service fee revenues were over 10 percent of total revenues for the periods presented. In future filings revise your income statement to separately disclose revenues from the sale of products, services, and other products if revenues from any individual referenced components are more than 10 percent of the total revenue for the year. Related costs and expenses should also be disclosed separately. Refer to Regulation S-X, Article 5-03 (b)(1) and (2).

5.	We note that “variable options expense” is included as a non-operating expense in your consolidated statement of operations. In future filings, please revise to include as part of operating expense or tell us why the current presentation is appropriate.

6.

We note that you entered into forward currency exchange contracts to hedge inter-company liabilities and commitments denominated in foreign currencies. We also note that you are accounting for them as cash flow hedges. Please explain how you met the criteria in paragraph 40 of SFAS 133, including subparagraphs A, B, and C as applicable.

(a)

We have a formal hedging policy that outlines our risk management objectives and strategy. We also document the risk management objective for each hedge contract at the time we enter into a hedge contract. We hedge intercompany shipments based on forecast transactions with our subsidiaries. The hedge contracts are placed for the month the shipments are forecast to occur and are assigned to the first shipments of the month. We test the effectiveness of all hedge contracts at each quarter end.

(b)	See (a) above

(c)	We do not enter into written options

(d)	We do not enter into hedging instruments used to modify the interest receipts or payments associated with a financial asset of liability.

(a)	The transactions hedged are identified as a group of individual transactions and represent intercompany machine shipments. The group of transaction share the same risk exposure.

(b)	The transactions forecast are probable.

(c)	The transactions are not with an external party. However, this criteria is not required and hedge accounting can be used.

(d)	We do not hedge a forecasted transaction for the acquisition of an asset or incurrence of a liability to be subsequently remeasured.

(e)	We do not hedge the variable cash flows of forecasted transactions related to a debt security that is classified as held-to-maturity.

(f)	We do not hedge forecasted transactions related to a business combination.

(g)	We do not hedge transactions for the forecasted sale and purchase of a non-financial asset.

(h)	We do not hedge the forecasted purchase or sale of a financial asset or liability or the variable cash inflow and outflow of an existing financial asset or liability.

7.

Describe the significant terms of your agreements with distributors, including payment, return, exchange, and other significant matters. Supplementally explain and support when you believe it is appropriate to recognize revenue of products sent to distributors. Revise future filings as necessary. Refer to SAB 104 and to SFAS 48 in your response.

·	Persuasive evidence of an arrangement exists. Distributor orders are prepared by the distributor and acknowledged by Hurco.

·	Delivery has occurred or services have been rendered. We recognize revenue at the time of shipment because ownership and risk of loss

·	passes to the distributor at that time. We consider the machine installation process to be inconsequential and perfunctory.

·	The seller’s price to the buyer is fixed or determinable. The price is included on the order acknowledgement.

·	Collectibility is reasonably assured. We perform credit checks on all distributors prior to shipment.

8.

We note that title is retained for products sent to certain foreign locations under a “retention of title clause.” Tell us more about this. For example, who has the risk of loss in the event of theft or physical destruction or damage to the product? Who carries insurance on the property after the products are shipped? Tell us in greater detail why you believe your current accounting complies with GAAP.

9.	Supplementally describe the existing inventive programs currently in place. Are these shown as a reduction of revenue? When are they recorded and how are they measured? Tell us how volume discounts and sales incentives are estimated at the time of shipment. Refer to EITF 01-9 in your response

10.	If shipping and handling fees and/or costs are material, please quantify these revenues and costs and explain in future filings how they are classified in the income statement. Refer to EITF 00-10 in your response.

11.

Supplementally and in detail, explain the nature of your product or products. Do you sell hardware and software separately or together? If together, how do you allocate revenue to these elements? Are customers provided with a right to receive additional software products free or at a reduced price? Does your fee also cover PCS or other service elements? How is revenue allocated and recognized for PCS and other service arrangements? Explain how you comply with SOP 97-2. Note that reference to accounting literature is not sufficient disclosure.

12.	In future filings please relocate the disclosures required by SFAS 148 to include in the summary of significant accounting policies in your financial statements.

13.

We note that you have presented summarized financial information for two affiliates accounted for using the equity method. We assume that the affiliates do not meet the significance criteria set forth under Rule 3-09. Please confirm and provide your calculation. You need only provide your detailed computations for the income test (condition 3) as outlined in Rule 1-02(w).

14.	Disclosure of long-lived assets by geographic area under SFAS 131 should present tangible assets only and should not include intangibles or investments. Se question 22 in the FASB Staff Implementation Guide to Statement 131. Revise future filings as necessary.

15.	If revenues derived from any particular foreign country are material, revise future filings to disclose the name of the country and the amount of revenue from the country. Refer to paragraph 38(a) SFAS 131.

·	Hurco Companies, Inc. is responsible for the adequacy and accuracy of the disclosure in the filings;

·	Staff comments or changes to disclosure in response to staff comments in the filings reviewed buy the staff do not foreclose the Commission from taking any action with respect to the filing; and

·	Hurco Companies, Inc. may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.