0001558370-23-000097 | 10-K | XBRL Viewer

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Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	Oct. 31, 2022	Dec. 31, 2022	Apr. 30, 2022
Document And Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Oct. 31, 2022
Entity File Number	0-9143
Entity Registrant Name	HURCO COMPANIES INC
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	35-1150732
Entity Address, Address Line One	One Technology Way
Entity Address, City or Town	Indianapolis
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46268
City Area Code	317
Local Phone Number	293–5309
Title of 12(b) Security	Common Stock, no par value
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		6,586,962
Entity Central Index Key	0000315374
Current Fiscal Year End Date	--10-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float			$ 186,306,000
Trading Symbol	HURC
ICFR Auditor Attestation Flag	true
Auditor Name	RSM US LLP
Auditor Firm ID	49
Auditor Location	Indianapolis, Indiana

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
CONSOLIDATED STATEMENTS OF OPERATIONS
Sales and service fees	$ 250,814	$ 235,195	$ 170,627
Cost of sales and service	186,336	178,946	134,170
Gross profit	64,478	56,249	36,457
Selling, general and administrative expenses	51,731	46,001	41,416
Goodwill impairment			4,903
Operating income	12,747	10,248	(9,862)
Interest expense	27	24	94
Interest income	79	34	130
Investment income, net	174	173	133
Income from equity investments	733	203	69
Other income (expense), net	(1,828)	(513)	(1,179)
Income before income taxes	11,878	10,121	(10,803)
Provision for income taxes	3,652	3,357	(4,556)
Net income	$ 8,226	$ 6,764	$ (6,247)
Income (loss) per common share - basic	$ 1.24	$ 1.01	$ (0.93)
Income (loss) per common share - diluted	$ 1.23	$ 1.01	$ (0.93)
Weighted average common shares outstanding - basic	6,580	6,595	6,670
Weighted average common shares outstanding - diluted	6,632	6,608	6,670
Dividends paid per share	$ 0.59	$ 0.55	$ 0.51

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 8,226	$ 6,764	$ (6,247)
Other comprehensive income (loss):
Translation gain (loss) of foreign currency financial statements	(19,591)	2,405	5,969
(Gain) / loss on derivative instruments reclassified into operations, net of tax of $59, $(204), and $(126), respectively	191	(679)	(421)
Gain / (loss) on derivative instruments, net of tax of $(119), $(143), $118, respectively	(384)	(477)	395
Total other comprehensive income (loss)	(19,784)	1,249	5,943
Comprehensive income (loss)	$ (11,558)	$ 8,013	$ (304)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Gain) / loss on derivative instruments reclassified into operations, tax	$ 59	$ (204)	$ (126)
Gain / (loss) on derivative instruments, tax	$ (119)	$ (143)	$ 118

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 31, 2022	Oct. 31, 2021
Current assets:
Cash and cash equivalents	$ 63,922	$ 84,063
Accounts receivable, net	38,444	42,620
Inventories, net	156,207	148,216
Derivative assets	2,515	905
Prepaid and other assets	6,981	14,066
Total current assets	268,069	289,870
Property and equipment:
Land	868	868
Building	7,352	7,352
Machinery and equipment	26,532	29,533
Leasehold improvements	4,351	5,172
Property and equipment, gross	39,103	42,925
Less accumulated depreciation and amortization	(30,620)	(32,318)
Total property and equipment, net	8,483	10,607
Non-current assets:
Software development costs, less accumulated amortization	7,302	7,553
Intangible assets, net	1,246	1,565
Operating lease - right of use assets, net	8,460	10,624
Deferred income taxes	3,442	3,154
Investments and other assets, net	9,235	9,562
Total non-current assets	29,685	32,458
Total assets	306,237	332,935
Current liabilities:
Accounts payable	38,783	46,328
Accounts payable-related parties	1,924	2,553
Customer deposits	4,839	8,593
Derivative liabilities	3,632	467
Operating lease liabilities	3,973	4,221
Accrued payroll and employee benefits	10,751	10,389
Accrued income taxes	2,611	1,192
Accrued expenses	5,397	5,911
Accrued warranty expenses	1,426	1,516
Total current liabilities	73,336	81,170
Non-current liabilities:
Accrued tax liability	1,281	1,749
Operating lease liabilities	4,814	6,794
Deferred income taxes	67	68
Deferred credits and other	4,095	4,735
Total non-current liabilities	10,257	13,346
Shareholders' equity:
Preferred stock: no par value per share, 1,000,000 shares authorized; no shares issued	0	0
Common stock: no par value, $.10 stated value per share, 12,500,000 shares authorized; 6,645,352 and 6,691,052 shares issued and 6,566,994 and 6,617,717 shares outstanding, as of October 31, 2022 and October 31, 2021, respectively	657	662
Additional paid-in capital	63,635	63,924
Retained earnings	179,877	175,574
Accumulated other comprehensive loss	(21,525)	(1,741)
Total shareholders' equity	222,644	238,419
Total liabilities and shareholders' equity	$ 306,237	$ 332,935

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Oct. 31, 2022	Oct. 31, 2021
CONSOLIDATED BALANCE SHEETS
Preferred stock, no par value	$ 0	$ 0
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common Stock, No Par Value	$ 0	$ 0
Common stock, stated value per share	$ 0.10	$ 0.10
Common stock, shares authorized	12,500,000	12,500,000
Common stock, shares issued	6,645,352	6,691,052
Common stock, shares outstanding	6,566,994	6,617,717

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Cash flows from operating activities:
Net income (loss)	$ 8,226	$ 6,764	$ (6,247)
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for doubtful accounts	(159)	244	510
Deferred income taxes	(631)	(112)	(547)
Equity in (income) loss of affiliates	(733)	(203)	(69)
Foreign currency (gain) loss	1,393	31	257
Unrealized (gain) loss on derivatives	727	(316)	622
Depreciation and amortization	3,918	4,193	4,547
Stock-based compensation	2,686	2,779	2,058
Goodwill impairment charge			4,903
Change in assets and liabilities:
(Increase) decrease in accounts receivable	280	(15,188)	15,909
(Increase) decrease in inventories	(24,440)	2,165	3,461
(Increase) decrease in prepaid and other current assets	7,022	690	(3,545)
Increase (decrease) in accounts payable	(2,278)	20,617	(2,367)
Increase (decrease) in customer deposits	(3,056)	3,111	(189)
Increase (decrease) in warranty expenses	1,018	2,142	(1,603)
Increase (decrease) in accrued payroll and employee benefits	362	3,458	(4,941)
Increase (decrease) in accrued income tax	1,698	900	(1,695)
Net change in deferred tax assets and liabilities	(25)	(325)	(109)
Net change in derivative assets and liabilities	264	(135)	115
Other	(238)	1,360	(138)
Net cash provided by (used for) operating activities	(3,966)	32,175	10,932
Cash flows from investing activities:
Proceeds from sale of property and equipment	101	3	106
Purchase of property and equipment	(1,107)	(1,260)	(683)
Software development costs	(1,086)	(1,109)	(973)
Other investments		(979)	371
Net cash provided by (used for) investing activities	(2,092)	(3,345)	(1,179)
Cash flows from financing activities:
Proceeds from exercise of common stock options	117	350	67
Dividends paid	(3,923)	(3,674)	(3,420)
Taxes paid related to net settlement of restricted shares	(207)	(197)	(498)
Stock repurchases	(2,890)		(7,000)
Net cash provided by (used for) financing activities	(6,903)	(3,521)	(10,851)
Effect of exchange rate changes on cash and cash equivalents	(7,180)	895	2,014
Net increase (decrease) in cash and cash equivalents	(20,141)	26,204	916
Cash and cash equivalents at beginning of period	84,063	57,859	56,943
Cash and cash equivalents at end of period	63,922	84,063	57,859
Cash and cash equivalents at beginning of period	84,063
Cash and cash equivalents at end of period	63,922	84,063
Cash paid for:
Income taxes, net	$ (1,628)	$ 1,572	$ 487

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss [Member]	Total
Balances at Oct. 31, 2019	$ 677	$ 66,350	$ 182,151	$ (8,933)	$ 240,245
Balances (in shares) at Oct. 31, 2019	6,767,237
Net income (loss)			(6,247)		(6,247)
Other comprehensive income (loss)				5,943	5,943
Stock-based compensation expense, net of taxes withheld for vested restricted shares	$ 5	1,555			1,560
Stock-based compensation expense, net of taxes withheld for vested restricted shares (in shares)	47,750
Exercise of common stock options		67			67
Exercise of common stock options (in shares)	3,738
Stock repurchases	$ (25)	(6,975)			(7,000)
Stock repurchases (in shares)	(253,562)
Dividends paid			(3,420)		(3,420)
Balances at Oct. 31, 2020	$ 657	60,997	172,484	(2,990)	231,148
Balances (in shares) at Oct. 31, 2020	6,565,163
Net income (loss)			6,764		6,764
Other comprehensive income (loss)				1,249	1,249
Stock-based compensation expense, net of taxes withheld for vested restricted shares	$ 3	2,579			2,582
Stock-based compensation expense, net of taxes withheld for vested restricted shares (in shares)	36,243
Exercise of common stock options	$ 2	348			350
Exercise of common stock options (in shares)	16,311
Dividends paid			(3,674)		(3,674)
Balances at Oct. 31, 2021	$ 662	63,924	175,574	(1,741)	238,419
Balances (in shares) at Oct. 31, 2021	6,617,717
Net income (loss)			8,226		8,226
Other comprehensive income (loss)				(19,784)	(19,784)
Stock-based compensation expense, net of taxes withheld for vested restricted shares	$ 3	2,476			2,479
Stock-based compensation expense, net of taxes withheld for vested restricted shares (in shares)	33,761
Exercise of common stock options	$ 1	116			117
Exercise of common stock options (in shares)	5,437
Stock repurchases	$ (9)	(2,881)			(2,890)
Stock repurchases (in shares)	(89,921)
Dividends paid			(3,923)		(3,923)
Balances at Oct. 31, 2022	$ 657	$ 63,635	$ 179,877	$ (21,525)	$ 222,644
Balances (in shares) at Oct. 31, 2022	6,566,994

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Oct. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation. The consolidated financial statements include the accounts of Hurco Companies, Inc. (an Indiana corporation) and its wholly–owned subsidiaries (“we”, “us”, “our”, “Hurco” or the “Company”). We have a 35% ownership interest in a Taiwan affiliate that is accounted for using the equity method. Our investment in that affiliate was approximately $5.0 million and $4.8 million as of October 31, 2022 and 2021, respectively. That investment is included in Investments and other assets, net on the accompanying Consolidated Balance Sheets. Inter-company accounts and transactions have been eliminated.

Reclassifications. Certain prior year amounts have been reclassified to conform to the current year presentation. This reclassification has no impact on previously reported net income or shareholders’ equity.

Statements of Cash Flows. We consider all highly liquid investments with a stated maturity at the date of purchase of three months or less to be cash equivalents. Cash flows from hedges are classified consistent with the items being hedged.

Translation of Foreign Currencies. All balance sheet accounts of non–U.S. subsidiaries are translated at the exchange rate as of the end of the year and translation adjustments of foreign currency balance sheets are recorded as a component of Accumulated other comprehensive loss in shareholders’ equity. Income and expenses are translated at the average exchange rates during the year. Cumulative foreign currency translation adjustments, net of gains related to our net investment hedges, as of October 31, 2022, were a net loss of $21.5 million, net of tax, and are included in Accumulated other comprehensive loss. Foreign currency transaction gains and losses are recorded as income or expense as incurred and are recorded in Other expense, net.

Hedging. We are exposed to certain market risks relating to our ongoing business operations, including foreign currency risk, interest rate risk and credit risk. We manage our exposure to these and other market risks through regular operating and financing activities. Currently, the only risk that we manage through the use of derivative instruments is foreign currency risk.

We operate on a global basis and are exposed to the risk that our financial condition, results of operations, and cash flows could be adversely affected by changes in foreign currency exchange rates. To reduce the potential effects of foreign exchange rate movements on our net equity investment in one of our foreign subsidiaries, and the gross profit and net earnings of certain of our foreign subsidiaries, we enter into derivative financial instruments in the form of foreign exchange forward contracts with a major financial institution. We are primarily exposed to foreign currency exchange rate risk with respect to transactions and net assets denominated in Euros, Pounds Sterling, Indian Rupee, Singapore Dollars, Chinese Yuan, Polish Zloty, and New Taiwan Dollars.

We account for derivative instruments as either assets or liabilities and carry them at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributed to the risk being hedged. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of Accumulated other comprehensive loss in shareholders’ equity and subsequently reclassified into earnings when the hedged exposure affects earnings. The ineffective portion of the gain or loss is reported in earnings immediately.

For derivative instruments that are not designated as accounting hedges under the Derivatives and Hedging Topic of the Financial Accounting Standards Board (the “FASB”), changes in fair value are recognized in earnings in the period of change. We do not hold or issue derivative financial instruments for speculative trading purposes. We only enter into derivatives with one counterparty, which is among one of the largest U.S. banks (ranked by assets), in order to minimize credit risk and, to date, that counterparty has not failed to meet its financial obligations under such contracts.

Derivatives Designated as Hedging Instruments

We enter into foreign currency forward exchange contracts periodically to hedge certain forecasted inter–company sales and purchases denominated in foreign currencies (the Pound Sterling, Euro, and New Taiwan Dollar). The purpose of these instruments is to mitigate the risk that the U.S. Dollar net cash inflows and outflows resulting from sales and purchases denominated in foreign currencies will be adversely affected by changes in exchange rates. These forward contracts have been designated as cash flow hedge instruments, and are recorded in the Consolidated Balance Sheets at fair value in Derivative assets and Derivative liabilities. The effective portion of the gains and losses resulting from the changes in the fair value of these hedge contracts are deferred in Accumulated other comprehensive loss and recognized as an adjustment to Cost of sales and service in the period that the corresponding inventory sold that is the subject of the related hedge contract is recognized, thereby providing an offsetting economic impact against the corresponding change in the U.S. Dollar value of the inter–company sale or purchase being hedged. The ineffective portion of gains and losses resulting from the changes in the fair value of these hedge contracts is reported in Other expense, net immediately. We perform quarterly assessments of hedge effectiveness by verifying and documenting the critical terms of the hedge instrument and determining that forecasted transactions have not changed significantly. We also assess on a quarterly basis whether there have been adverse developments regarding the risk of a counterparty default.

We had forward contracts outstanding as of October 31, 2022, in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from November 2022 through October 2023. The contract amount at forward rates in U.S. Dollars at October 31, 2022 for Euros and Pounds Sterling was $18.7 million and $6.1 million, respectively. The contract amount at forward rates in U.S. Dollars for New Taiwan Dollars was $26.0 million at October 31, 2022. At October 31, 2022, we had approximately $0.4 million of losses, net of tax, related to cash flow hedges deferred in Accumulated other comprehensive loss. Of this amount, $0.9 million represented unrealized loss, net of tax, related to cash flow hedge instruments that remain subject to currency fluctuation risk. The majority of these deferred gains will be recorded as an adjustment to Cost of sales and service in periods through October 2023, in which the corresponding inventory that is the subject of the related hedge contract is sold, as described above.

We are exposed to foreign currency exchange risk related to our investment in net assets in foreign countries. To manage this risk, we entered into a forward contract with a notional amount of €3.0 million in November 2021. We designated this forward contract as a hedge of our net investment in Euro denominated assets. We selected the forward method under FASB guidance related to the accounting for derivative instruments and hedging activities. The forward method requires all changes in the fair value of the contract to be reported as a cumulative translation adjustment, net of tax, in Accumulated other comprehensive loss in the same manner as the underlying hedged net assets. This forward contract matured in November 2022, and we entered into a new forward contract for the same notional amount that is set to mature in November 2023. As of October 31, 2022, we had a realized gain of $0.9 million and an unrealized gain of $0.4 million, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive loss, related to these forward contracts.

Derivatives Not Designated as Hedging Instruments

We enter into foreign currency forward exchange contracts to protect against the effects of foreign currency fluctuations on inter-company receivables and payables denominated in foreign currencies. These derivative instruments are not designated as hedges under FASB guidance and, as a result, changes in their fair value are reported currently as Other expense, net in the Consolidated Statements of Operations consistent with the transaction gain or loss on the related inter-company receivables, payables and loans denominated in foreign currencies.

We had forward contracts outstanding as of October 31, 2022, in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from November 2022 through February 2023. The contract amounts at forward rates in U.S. Dollars at October 31, 2022 for Euros and Pounds Sterling totaled $21.0 million. The contract amount at forward rates in U.S. Dollars for New Taiwan Dollars was $22.0 million at October 31, 2022.

Fair Value of Derivative Instruments

We recognize the fair value of derivative instruments as assets and liabilities on a gross basis on our Consolidated Balance Sheets. As of October 31, 2022 and October 31, 2021, all derivative instruments were recorded at fair value on the balance sheets as follows (in thousands):


	2022			2021
	Balance Sheet	Fair		Balance Sheet	Fair
Derivatives	Location	Value		Location	Value
Designated as Hedging Instruments:
Foreign exchange forward contracts	Derivative assets	$	2,273	Derivative assets	$	646
Foreign exchange forward contracts	Derivative liabilities	$	2,891	Derivative liabilities	$	403

Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Derivative assets	$	242	Derivative assets	$	259
Foreign exchange forward contracts	Derivative liabilities	$	741	Derivative liabilities	$	64

Effect of Derivative Instruments on the Consolidated Balance Sheets, Statements of Changes in Shareholders’ Equity, and Statements of Operations

Derivative instruments had the following effects on our Consolidated Balance Sheets, Statements of Changes in Shareholders’ Equity, and Statements of Operations, net of tax, during the fiscal years ended October 31, 2022, 2021, and 2020 (in thousands):


							Location of
	Amount of Gain (Loss)						Gain (Loss)	Amount of Gain (Loss)
	Recognized in						Reclassified	Reclassified from
	Other Comprehensive						From Other	Other Comprehensive
	Income (Loss)						Comprehensive	Income (Loss)
Derivatives	2022		2021		2020		Income (Loss)	2022		2021		2020
Designated as Hedging Instruments:
(Effective Portion)
Foreign exchange forward contracts – Intercompany sales/purchases	$	(384)	$	(477)	$	395	Cost of sales and service	$	(191)	$	679	$	421
Foreign exchange forward contract – Net investment	$	401	$	43	$	(64)

We did not recognize any gains or losses as a result of hedges deemed ineffective during fiscal years ended October 31, 2022, 2021, and 2020.

We recognized the following gains and losses in our Consolidated Statements of Operations during the fiscal years ended October 31, 2022, 2021, and 2020 on derivative instruments not designated as hedging instruments (in thousands):


		Amount of Gain (Loss)
	Location of Gain (Loss)	Recognized in Operations
Derivatives	Recognized in Operations	2022		2021		2020
Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Other expense, net	$	2,374	$	(313)	$	(171)

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the fiscal years ended October 31, 2022 and 2021 (in thousands):


	Foreign		Cash
	Currency		Flow
	Translation		Hedges		Total
Balance, October 31, 2020	$	(4,073)	$	1,083	$	(2,990)
Other comprehensive income (loss) before reclassifications		2,405		(477)		1,928
Reclassifications		—		(679)		(679)
Balance, October 31, 2021	$	(1,668)	$	(73)	$	(1,741)
Other comprehensive income (loss) before reclassifications		(19,591)		(384)		(19,975)
Reclassifications		—		191		191
Balance, October 31, 2022	$	(21,259)	$	(266)	$	(21,525)

Inventories. Inventories are stated at the lower of cost or net realizable value, with cost determined using the first–in, first–out method. Provisions are made to reduce excess or obsolete inventories to their estimated realizable value.

Property and Equipment. Property and equipment are carried at cost. Depreciation and amortization of assets are provided primarily under the straight–line method over the shorter of the estimated useful lives or the lease terms as follows:


		Number of Years
Land		Indefinite
Building		40
Machines		7 – 10
Shop and office equipment		3 – 7
Building & leasehold improvements		3 – 40

Total depreciation and amortization expense recognized for property and equipment was $2.3 million for fiscal year 2022, $2.5 million for fiscal year 2021, and $2.7 million for fiscal year 2020.

Revenue Recognition. We design, manufacture, and sell computerized machine tools. Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products. We also provide machine tool components, automation integration equipment and solutions for job shops, software options, control upgrades, accessories and replacement parts for our products, as well as customer service, training, and applications support.

We recognize revenues from the sale of machine tools, components and accessories and services, and reflect the consideration to which we expect to be entitled. We record revenues based on a five-step model in accordance with FASB guidance codified in Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”). In accordance with ASC 606, we have defined contracts as agreements with our customers and distributors in the form of purchase orders, packing or shipping documents, invoices, and, periodically, verbal requests for components and accessories. For each contract, we identify our performance obligations, which is delivering goods or services, determine the transaction price, allocate the contract transaction price to each of the performance obligations (when applicable), and recognize the revenue when (or as) the performance obligation to the customer is fulfilled. A good or service is transferred when the customer obtains control of that good or service. Our computerized machine tools are general purpose computer-controlled machine tools that are typically used in stand–alone operations. Prior to shipment, we test each machine to ensure the machine’s compliance with standard operating specifications. We deem that the customer obtains control upon delivery of the product and that obtaining control is not contingent upon contractual customer acceptance. Therefore, we recognize revenue from sales of our machine tool systems upon delivery of the product to the customer or distributor, which is normally at the time of shipment.

Depending upon geographic location, after shipment, a machine may be installed at the customer’s facility by a distributor, independent contractor, or by one of our service technicians. In most instances where a machine is sold through a distributor, we have no installation involvement. If sales are direct or through sales agents, we will typically complete the machine installation, which consists of the reassembly of certain parts that were removed for shipping and the re-testing of the machine to ensure that it is performing within the standard specifications. We consider the machine installation process for our three-axis machines to be inconsequential and immaterial within the context of the contract. For our five-axis machines and automation systems that we install, we estimate the fair value of the installation performance obligation and recognize that installation revenue on a prorata basis over the period of the installation process.

From time to time, and depending upon geographic location, we may provide training or freight services. We consider these services to be immaterial within the context of the contract, as the value of these services typically does not rise to a material level as a component of the total contract value. Service fees from maintenance contracts are deferred and recognized in earnings on a prorata basis over the term of the contract and are generally sold on a stand-alone basis. Customer discounts and estimated product returns are considered variable consideration and are recorded as a reduction of revenue in the same period that the related sales are recorded. We have reviewed the overall sales transactions for variable consideration and have determined that these amounts are not significant.

Allowance for Doubtful Accounts. The allowance for doubtful accounts is based on our best estimate of probable credit issues and historical experience. We perform credit evaluations of the financial condition of our customers. No collateral is required for sales made on open account terms. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising our customer base and their dispersion across many geographic areas. We consider trade accounts receivable to be past due when payment is not made by the due date as specified on the customer invoice, and we charge off uncollectible balances when all reasonable collection efforts have been exhausted.

Product Warranty. Expected future product warranty claims are recorded to expense when the product is sold. Product warranty estimates are established using historical information about the nature, frequency, and average cost of warranty claims. Warranty claims are influenced by factors such as new product introductions, technological developments, the competitive environment, and the costs of component parts. Actual payments for warranty claims could differ from the amounts estimated, requiring adjustments to the liabilities in future periods. See Note 11 of these Notes to Consolidated Financial Statements for further discussion of warranties.

Research and Development Costs. The costs associated with research and development programs for new products and significant product improvements, other than software development costs, which are eligible for capitalization per FASB guidance, are expensed as incurred and are included in Selling, general, and administrative expenses. Research and development expenses totaled $3.4 million, $3.2 million, and $3.5 million, in fiscal years 2022, 2021, and 2020, respectively.

Software Development Costs. We sell software products that are essential to our machine tools. Costs incurred to develop computer software products and significant enhancements to software features of existing products to be sold or otherwise marketed are capitalized, after technological feasibility is established. Software development costs are amortized on a straight–line basis over the estimated product life of the related software, which ranges from three to five years. We capitalized costs related to software development projects of $1.1 million in fiscal year 2022, $1.1 million in fiscal year 2021, and $1.0 million in fiscal year 2020. Amortization expense for software development costs was $1.3 million, $1.4 million, and $1.5 million, for the fiscal years ended October 31, 2022, 2021, and 2020, respectively. Accumulated amortization at October 31, 2022 and 2021 was $23.7 million and $22.0 million, respectively.

Estimated amortization expense for the remaining unamortized software development costs for the fiscal years ending October 31, is as follows (in thousands):


Fiscal Year	Amortization Expense
2023	$	1,663
2024		1,905
2025		1,281
2026		1,132
2027 and thereafter		1,321

Goodwill and Intangible Assets. Goodwill and indefinite-lived intangibles arising from a business combination are not amortized and charged to expense over time. Instead, goodwill and indefinite-lived intangibles must be reviewed for impairment annually as of the last day of our third fiscal quarter, or more frequently, if circumstances arise indicating potential impairment. For goodwill, if the carrying amount of the reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized for that excess, but only to the extent of the goodwill amount allocated to that reporting unit.

We had goodwill for our single reporting unit, arising from the acquisitions of ProCobots, LLC (“ProCobots”) ($2.5 million) in 2019, LCM Precision Technology S.r.l. (“LCM”) ($2.2 million) in 2013, and our wholly-owned distributor located in Michigan ($0.2 million) in 2008. The adverse change in the business climate resulting from the COVID-19 pandemic and the net loss for fiscal year 2020 caused the fair value of the reporting unit to fall below our book value of equity as of October 31, 2020, resulting in a full impairment loss of $4.9 million. As such, we have no goodwill as of October 31, 2022.

For indefinite-lived intangible assets, if the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess. Intangible assets that are determined to have a finite life are amortized over their estimated useful lives and are also subject to review for impairment, if indicators of impairment are identified. There were no impairments recognized with respect to the carrying value of intangible assets for the years ended October 31, 2022, 2021, or 2020.

As of October 31, 2022, the balances of intangible assets, other than goodwill, were as follows (in thousands):


	Weighted
	Average		Gross
	Amortization		Intangible		Accumulated		Net Intangible
	Period		Assets		Amortization		Assets
Tradenames and trademarks	indefinite		$	177	$	—	$	177
Tradenames and trademarks	14	years		728		(261)		467
Customer relationships	15	years		367		(243)		124
Technology	13	years		605		(434)		171
Noncompete	5	years		580		(377)		203
Patents	6	years		2,972		(2,884)		88
Other	8	years		387		(371)		16
Total			$	5,816	$	(4,570)	$	1,246

As of October 31, 2021, the balances of intangible assets, other than goodwill, were as follows (in thousands):


	Weighted
	Average		Gross
	Amortization		Intangible		Accumulated		Net Intangible
	Period		Assets		Amortization		Assets
Tradenames and trademarks	indefinite		$	177	$	—	$	177
Tradenames and trademarks	14	years		763		(234)		529
Customer relationships	15	years		373		(223)		150
Technology	13	years		708		(454)		254
Noncompete	5	years		580		(261)		319
Patents	6	years		2,972		(2,860)		112
Other	8	years		397		(373)		24
Total			$	5,970	$	(4,405)	$	1,565

Intangible asset amortization expense was $272,000, $273,000, and $358,000 for fiscal years 2022, 2021, and 2020, respectively. Annual intangible asset amortization expense for the next five years is estimated to be $273,000 for fiscal year 2023, $223,000 for fiscal year 2024, $136,000 for fiscal year 2025, $105,000 for fiscal year 2026, and $45,000 for fiscal year 2027.

Impairment of Long–Lived Assets. Annually, or when there are indicators of impairment, we evaluate the carrying value of long–lived assets to be held and used, including property and equipment, software development costs, and intangible assets, including goodwill, when events or circumstances warrant such a review. The carrying value of a long-lived asset (or group of assets) to be held and used is considered impaired when the anticipated separately identifiable undiscounted cash flows from such an asset (or group of assets) are less than the carrying value of the asset (or group of assets). We determined that we have a single asset group due to the interdependent nature of our operations. We estimated the cash flows during the remaining useful life of the primary asset, and our undiscounted cash flow was in excess of the book value of our single asset group. Based on that review, there was no impairment indications for our long-lived assets for the period ended October 31, 2022. Therefore, there was no impairment recognized with respect to the carrying values of long-lived assets for the years ended October 31, 2022, 2021, or 2020.

Earnings Per Share. Basic earnings per share is calculated by dividing net income (loss) by the weighted–average number of common shares actually outstanding during the period. Diluted earnings per share assumes the issuance of additional shares of common stock upon exercise of all outstanding stock options and contingently issuable securities if the effect is dilutive, in accordance with the treasury stock method discussed in FASB guidance on “Earnings Per Share.”

The following table presents a reconciliation of our basic and diluted earnings per share computation:



	Fiscal Year Ended October 31,
	2022				2021				2020
(in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income (loss)	$	8,226	$	8,226	$	6,764	$	6,764	$	(6,247)	$	(6,247)
Undistributed earnings (loss) allocated to participating shares		(97)		(97)		(76)		(76)		66		66
Net income (loss) applicable to common shareholders	$	8,129	$	8,129	$	6,688	$	6,688	$	(6,181)	$	(6,181)

Weighted average shares outstanding		6,580		6,580		6,595		6,595		6,670		6,670
Stock options and contingently issuable securities		—		52		—		13		—		—
		6,580		6,632		6,595		6,608		6,670		6,670
Income (loss) per share	$	1.24	$	1.23	$	1.01	$	1.01	$	(0.93)	$	(0.93)

Income Taxes – We account for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are measured using enacted income tax rates in each jurisdiction in effect for the year in which the temporary differences are expected to be recovered or settled. These deferred tax assets are reduced by a valuation allowance, which is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Net deferred tax assets and liabilities are classified as non-current in the consolidated financial statements. Our judgment regarding the realization of deferred tax assets may change due to future profitability and market conditions, changes in U.S. or foreign tax laws and other factors. These changes, if any, may require material adjustments to these deferred tax assets and an accompanying reduction or increase in net income in the period when such determinations are made.

The determination of our provision for income taxes requires judgment, the use of estimates, and the interpretation and application of complex federal, state and foreign tax laws. Our provision for income taxes reflects a combination of income earned and taxed at the federal and state level in the U.S., as well as in various foreign jurisdictions.

In addition to the risks to the effective tax rate described above, the future effective tax rate reflected in forward–looking statements is based on currently effective tax laws. Significant changes in those laws could materially affect these estimates.

We operate in multiple jurisdictions through wholly-owned subsidiaries, and our global structure is complex. The estimates of our uncertain tax positions involve judgments and assessment of the potential tax implications. We recognize uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination by relevant taxing authorities, based on the technical merits of the position. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Our tax positions are subject to audit by taxing authorities across multiple global jurisdictions, and the resolution of such audits may span multiple years. Tax law is complex and often subject to varied interpretations. Accordingly, the ultimate outcome with respect to taxes we may owe may differ from the amounts recognized.

Stock Compensation. We account for share–based compensation according to FASB guidance relating to share-based payments, which requires the measurement and recognition of compensation expense for all share-based awards made to employees and directors based on estimated fair values on the grant date. This guidance requires that we estimate the fair value of share-based awards on the date of grant and recognize as expense the value of the portion of the award that is ultimately expected to vest over the requisite service period.

Estimates. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles requires us to make estimates and assumptions that affect the reported amounts presented and disclosed in our consolidated financial statements. Significant estimates and assumptions in these consolidated financial statements require the exercise of judgment and are used for, but not limited to, allowance for doubtful accounts, estimates of future cash flows and other assumptions associated with goodwill, intangible and long–lived asset impairment tests, inventory reserves, product warranties, income taxes and deferred tax valuation allowances, capitalized software development costs, derivative instruments, stock compensation, and contingencies. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.

BUSINESS OPERATIONS

12 Months Ended

Oct. 31, 2022

GENERAL

BUSINESS OPERATIONS

2. BUSINESS OPERATIONS

Nature of Business. We design, manufacture, and sell computerized CNC machine tools, computer control systems and software products, machine tool components, automation integration equipment and solutions for job shops, software options, control upgrades, accessories and replacement parts for our products, as well as customer service, training, and applications support, to companies in the metal cutting industry through a worldwide sales, service, and distribution network. The machine tool industry is highly cyclical and changes in demand can occur abruptly in the geographic markets we serve. As a result of this cyclicality, we have experienced significant fluctuations in our sales, which, in periods of reduced demand, have adversely affected our results of operations and financial condition.

The end market for our products consists primarily of precision tool, die and mold manufacturers, independent job shops, and specialized short–run production applications within large manufacturing operations. Industries served include: aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer industries. Our products are sold principally through approximately 200 independent agents and distributors throughout the Americas, Europe and Asia. We also have our own direct sales and service organizations in China, the Czech Republic, France, Germany, India, Italy, the Netherlands, Poland, Singapore, Taiwan, the United Kingdom, and certain areas of the United States.

We operate in the industrial equipment industry and have a global footprint that subjects us to various business risks in many different countries. During fiscal years 2020 through 2022, our operating results were adversely affected by the international business disruptions due to the outbreak of COVID-19, the economic slowdown in Europe, uncertainty surrounding the U.K. Brexit activities, political friction in the U.S, and geopolitical tensions, conflicts, and wars in Europe and Asia. Many of our customers deferred or eliminated investments in capital equipment in fiscal year 2020, which we attributed largely to the uncertainty these events created. During fiscal year 2021, our sales improved in all regions as countries began to lift the government-mandated COVID-19 stay-at-home orders or other similar operating restrictions. The COVID-19 pandemic did not have as significant an impact on our business and industry during fiscal year 2022, but intermittent lockdowns and similar restrictions in certain markets from time to time continue to impact our business, including those in China pursuant to its zero-tolerance COVID-19 policy. Because of the potential for extended vulnerability due to these and other factors, we have closely evaluated the estimates we have made in preparing the financial statements as of October 31, 2022, with the understanding that these estimates could change in the near term. We will continue to evaluate and disclose any uncertainty associated with key assumptions underlying fair value estimates, trends, and uncertainties that have had, or are reasonably expected to have, a material effect on our consolidated financial position, results of operations, changes in shareholders' equity, and cash flows for and at the end of each interim period.

Credit Risk. We sell products to customers located throughout the world. We perform ongoing credit evaluations of customers and generally do not require collateral. Allowances are maintained for potential credit losses. Concentration of credit risk with respect to trade accounts receivable is limited due to the large number of customers and their dispersion across many geographic areas. Although a significant amount of trade receivables are with distributors primarily located in the United States, no single distributor or region represents a significant concentration of credit risk.

Manufacturing Risk. At present, our wholly–owned subsidiaries, Hurco Manufacturing Limited (“HML”), Ningbo Hurco Machine Tool Co., Ltd. (“NHML”), and Milltronics USA, Inc. (“Milltronics”) produce the vast majority of our machine tools for all three brands, Hurco, Milltronics, and Takumi. In addition, we manufacture electro–mechanical components and accessories for machine tools through our wholly–owned subsidiary, LCM. HML, NHML, Milltronics, and LCM manufacture their products in Taiwan, China, the U.S., and Italy, respectively. Any interruption in manufacturing at any of these locations would have an adverse effect on our financial operating results. Interruption in manufacturing at one of these locations could result from a change in the political environment, such as conflicts or wars; trade wars, blockages, embargoes, or tariffs; or a natural disaster, such as an earthquake, typhoon, or tsunami. Any interruption with one of our other third-party key suppliers may also have an adverse effect on our operating results and our financial condition.

INVENTORIES

12 Months Ended

Oct. 31, 2022

INVENTORIES

INVENTORIES

3. INVENTORIES

Inventories as of October 31, 2022 and 2021 are summarized below (in thousands):


	October 31,		October 31,
	2022		2021
Purchased parts and sub–assemblies	$	43,363	$	37,527
Work–in–process		16,539		17,559
Finished goods		96,305		93,130
	$	156,207	$	148,216

Finished goods inventory consigned to our distributors and agents throughout the Americas, Europe, and Asia was $10.9 million and $11.8 million as of October 31, 2022 and 2021, respectively.

CREDIT AGREEMENTS AND BORROWINGS

12 Months Ended

Oct. 31, 2022

DEBT AGREEMENTS

CREDIT AGREEMENTS AND BORROWINGS

4. CREDIT AGREEMENTS AND BORROWINGS

On December 31, 2018, we and our subsidiary Hurco B.V. entered into a credit agreement with Bank of America, N.A., as the lender, which was subsequently amended on each of March 13, 2020, December 23, 2020, December 17, 2021, and January 4, 2023 (as amended, the “2018 Credit Agreement”). The 2018 Credit Agreement provides for an unsecured revolving credit and letter of credit facility in a maximum aggregate amount of $40.0 million. The 2018 Credit Agreement provides that the maximum amount of outstanding letters of credit at any one time may not exceed $10.0 million, the maximum amount of outstanding loans made to our subsidiary Hurco B.V. at any one time may not exceed $20.0 million, and the maximum amount of all outstanding loans denominated in alternative currencies at any one time may not exceed $20.0 million. Under the 2018 Credit Agreement, we and Hurco B.V. are borrowers, and certain of our other subsidiaries are guarantors. The scheduled maturity date of the 2018 Credit Agreement is December 31, 2023.

Borrowings under the 2018 Credit Agreement bear interest at floating rates based on, at our option, either (i) a rate based upon the secured overnight financing rate (“SOFR”), the Sterling Overnight Index Average Reference Rate, the Euro Interbank Offering Rate, or another alternative currency-based rate approved by the lender, depending on the term of the loan and the currency in which such loan is denominated, plus 1.00% per annum, or (ii) a base rate (which is the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate or (c) the one month SOFR-based rate plus 1.00%), plus 0.00% per annum. Outstanding letters of credit will carry an annual rate of 1.00%.

The 2018 Credit Agreement contains customary affirmative and negative covenants and events of default, including covenants (1) restricting us from making certain investments, loans, advances and acquisitions (but permitting us to make investments in subsidiaries of up to $10.0 million); (2) restricting us from making certain payments, including (a) cash dividends, except that we may pay cash dividends as long as immediately before and after giving effect to such payment, the sum of the unused amount of the commitments under the 2018 Credit Agreement plus our cash on hand is not less than $10.0 million, and as long as we are not in default before and after giving effect to such dividend payments and (b) payments made to repurchase shares of our common stock, except that we may repurchase shares of our common stock as long as we are not in default before and after giving effect to such repurchases and the aggregate amount of payments made by us for all such repurchases during any fiscal year does not exceed $25.0 million; (3) requiring that we maintain a minimum working capital of $125.0 million; and (4) requiring that we maintain a minimum tangible net worth of $176.5 million. We may use the proceeds from advances under the 2018 Credit Agreement for general corporate purposes.

In March 2019, our wholly-owned subsidiaries in Taiwan, HML, and China, NHML, closed on uncommitted revolving credit facilities with maximum aggregate amounts of 150 million New Taiwan Dollars and 32.5 million Chinese Yuan, respectively. As uncommitted facilities, both the Taiwan and China credit facilities are subject to review and termination by the respective underlying lending institution from time to time.

As a result, as of October 31, 2022, our existing credit facilities consisted of the €1.5 million revolving credit facility in Germany, the 150 million New Taiwan Dollars Taiwan credit facility, the 32.5 million Chinese Yuan China credit facility, and the $40.0 million revolving credit facility under the 2018 Credit Agreement.

As of October 31, 2022, there were no borrowings under any of our credit facilities and there was $50.6 million of available borrowing capacity thereunder.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

FINANCIAL INSTRUMENTS

12 Months Ended

Oct. 31, 2022

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

5. FINANCIAL INSTRUMENTS

Estimated Fair Value of Financial Instruments

FASB fair value guidance establishes a three–tier fair value hierarchy, which categorizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying amounts for cash and cash equivalents approximate their fair values due to the short maturity of these instruments, and such instruments meet the Level 1 criteria of the three–tier fair value hierarchy discussed above. The carrying amount of short-term debt approximates fair value due to the variable rate of the interest and the short-term nature of the instrument.

In accordance with this guidance, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value as of October 31, 2022 and 2021 (in thousands):


	Assets				Liabilities
	October 31,		October 31,		October 31,		October 31,
	2022		2021		2022		2021
Level 1
Deferred compensation	$	1,996	$	2,481	$	—	$	—

Level 2
Derivatives	$	2,515	$	905	$	3,632	$	467

Recurring Fair Value Measurements

Included in Level 1 assets are mutual fund investments under a nonqualified deferred compensation plan. We estimate the fair value of these investments on a recurring basis using market prices which are readily available.

Included as Level 2 fair value measurements are derivative assets and liabilities related to gains and losses on foreign currency forward exchange contracts entered into with a third party. We estimate the fair value of these derivatives on a recurring basis using foreign currency exchange rates obtained from active markets. Derivative instruments are reported in the accompanying consolidated financial statements at fair value. We have derivative financial instruments in the form of foreign currency forward exchange contracts as described in Note 1 of Notes to Consolidated Financial Statements in which the U.S. Dollar equivalent notional amount of these contracts was $102.8 million and $94.6 million at October 31, 2022 and 2021, respectively.

The fair value of the foreign currency forward exchange contracts and the related currency positions are subject to offsetting market risk resulting from foreign currency exchange rate volatility. The counterparty to the forward exchange contract is a substantial and creditworthy financial institution. We do not consider either the risk of counterparty non–performance or the economic consequences of counterparty non–performance as material risks.

INCOME TAXES

12 Months Ended

Oct. 31, 2022

INCOME TAXES

INCOME TAXES

6. INCOME TAXES

We utilize the asset and liability method of accounting for income taxes. Under this method, the provision (benefit) for income taxes represents income taxes payable or refundable for the current year plus the change in deferred taxes during the year.

The Inflation Reduction Act of 2022 (the “Inflation Reduction Act” or “IRA”) was signed into law on August 16, 2022. The IRA provides investment in clean energy, promotes reductions in carbon emissions, and extends select Affordable Care Act premium reductions. The IRA is paid for through the implementation of a 15 percent corporate minimum tax on corporations with over $1 billion of financial statement income, budget increases for the Internal Revenue Service, an excise tax on stock repurchases, and changes to Medicare rules. The Company is currently evaluating the impact of the Inflation Reduction Act on future fiscal years.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020. The CARES Act, among other things, included tax provisions that we applied relating to refundable payroll tax credits, the deferral of employer’s social security payments, and modifications to net operating loss carryback provisions. We filed the net operating loss carryback claims during the fourth quarter of fiscal 2021 and received $5.4 million in tax refunds during fiscal year 2022. On December 27, 2020, the Consolidated Appropriations Act of 2021 (the “CAA”), which includes the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and the American Rescue Plan Act of 2021, was signed into law and provided further COVID-19 economic relief with an expansion of the employee retention credit. As a result, we recorded operating income of $2.9 million related to the employee retention credit during fiscal 2021. We did not qualify for the employee retention credit in fiscal 2022.

In the fiscal years set forth below, the provision (benefit) for income taxes consisted of the following (in thousands):


	Year Ended October 31,
	2022		2021		2020
Current:
U.S. taxes	$	1,092	$	1,763	$	(4,932)
Foreign taxes		3,191		1,706		923
		4,283		3,469		(4,009)
Deferred:
U.S. taxes		(933)		66		(256)
Foreign taxes		302		(178)		(291)
		(631)		(112)		(547)
	$	3,652	$	3,357	$	(4,556)

The components of income (loss) before taxes are (in thousands):


	Year Ended October 31,
	2022		2021		2020
Income (loss) before income taxes:
Domestic	$	(232)	$	4,340	$	(11,681)
Foreign		12,110		5,781		878
	$	11,878	$	10,121	$	(10,803)

A comparison of income tax expense at the U.S. statutory rate to our effective tax rate is as follows:


	Year Ended October 31,
	2022			2021			2020

U.S. statutory rate		21	%		21	%		21	%
Effect of tax rate of international jurisdictions different than U.S. statutory rates		4	%		4	%		(2)	%
Valuation allowance		3	%		—	%		—	%
State taxes		1	%		1	%		2	%
Tax credits		1	%		—	%		1	%
U.S. benefit of foreign intangible income		(3)	%		(1)	%		—	%
Impact of CARES act		—	%		5	%		22	%
Other		4	% ¹		3	% ¹		(2)	%
Effective tax rate		31	%		33	%		42	%
¹ Primarily due to discrete items for unearned stock awards

The Tax Reform Act enacted on December 22, 2017, made comprehensive changes to U.S. federal income tax laws by moving from a global to a modified territorial tax regime. As a result, cash repatriated to the U.S. is generally no longer subject to U.S. federal income tax. As of October 31, 2022, the undistributed earnings of our foreign subsidiaries are expected to be permanently reinvested and retained for continuing operations. Accordingly, we did not accrue any withholding taxes on the undistributed earnings of our foreign subsidiaries, consistent with the position adopted on January 1, 2018.

Deferred income taxes are determined based on the difference between the amounts used for financial reporting purposes and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred taxes are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Net deferred tax assets and liabilities are classified as non-current in the consolidated financial statements.

As of October 31, 2022, we had deferred tax assets established for accumulated net operating loss carryforwards of $1.4 million, primarily related to state and foreign jurisdictions. We also have deferred tax assets for tax credits of $0.7 million. We established a valuation allowance against some of these carryforwards due to the uncertainty of their full realization. As of October 31, 2022, and 2021, the balance of this valuation allowance was $1.8 million and $1.9 million, respectively.

Significant components of our deferred tax assets and liabilities at October 31, 2022 and 2021 are as follows (in thousands):


	October 31,
	2022		2021
Deferred Tax Assets:
Accrued inventory reserves	$	1,329	$	973
Accrued warranty expenses		270		308
Compensation related expenses		2,495		2,444
Net derivative gain		98		49
Unrealized exchange gain		117		—
Other accrued expenses		318		282
Net operating loss carryforwards		1,449		1,705
Other credit carryforwards		703		839
Operating lease liabilities		2,023		2,570
Goodwill and intangibles		831		967
Other		171		215
		9,804		10,352
Less: Valuation allowance – net operating loss and other credit carryforwards		(1,754)		(1,871)
Deferred tax assets		8,050		8,481

Deferred Tax Liabilities:
Unrealized exchange loss		—		(15)
Property and equipment and capitalized software development costs		(2,394)		(2,533)
Operating lease - right of use assets		(1,960)		(2,495)
Other		(321)		(352)
Net deferred tax assets	$	3,375	$	3,086

As of October 31, 2022, we had net operating loss carryforwards for international and U.S. income tax purposes of $5.8 million, of which $3.8 million will expire within five years beginning in fiscal year 2023 and $0.2 million are state net operating losses which will expire between five and 20 years. The remaining $1.8 million in net operating losses will be carried forward indefinitely based on current international tax laws. We also had tax credits of $0.7 million which will expire between years 2023 and 2032.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding the related accrual for interest or penalties, is as follows (in thousands):


	2022		2021		2020
Balance, beginning of year	$	167	$	168	$	193
Additions based on tax positions related to the current year		21		74		9
Additions (reductions) related to prior year tax positions		—		—		(2)
Reductions due to statute expiration		(50)		(75)		(32)
Balance, end of year	$	138	$	167	$	168

The entire balance of the unrecognized tax benefits and related interest on October 31, 2022, if recognized, could affect the effective tax rate in future periods.

We recognize accrued interest and penalties related to unrecognized tax benefits as components of our income tax provision. As of October 31, 2022, the amount of interest accrued, reported in other liabilities, was approximately $33,000 which did not include the federal tax benefit of interest deductions. The statute of limitations with respect to unrecognized tax benefits will expire between August 2023 and August 2025.

We file U.S. federal and state income tax returns, as well as tax returns in applicable foreign jurisdictions. Currently, our subsidiary in Germany is under tax audit for fiscal years 2017 through 2021.

A summary of open tax years by major jurisdiction is presented below:


United States federal		Fiscal year 2014 through the current period
Germany¹		Fiscal year 2017 through the current period
United Kingdom		Fiscal year 2015 through the current period
Taiwan		Fiscal year 2017 through the current period

¹	Includes federal as well as state, provincial or similar local jurisdictions, as applicable.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

EMPLOYEE BENEFITS

12 Months Ended

Oct. 31, 2022

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

7. EMPLOYEE BENEFITS

We have defined contribution plans that include a majority of our U.S. employees, under which our matching contributions are primarily discretionary. The purpose of these plans is generally to provide additional financial security during retirement by providing employees with an incentive to save throughout their employment. Our contributions and related expense totaled $1.3 million, $1.2 million, and $1.3 million, for the fiscal years ended October 31, 2022, 2021, and 2020, respectively.

- Definition

The entire disclosure for retirement benefits.

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+ Details

STOCK-BASED COMPENSATION

12 Months Ended

Oct. 31, 2022

EQUITY INCENTIVE PLAN

STOCK-BASED COMPENSATION

8. STOCK–BASED COMPENSATION

In March 2016, we adopted the Hurco Companies, Inc. 2016 Equity Incentive Plan (as amended, the “2016 Equity Plan”), which allows us to grant awards of stock options, stock appreciation rights, restricted stock, stock units and other stock–based awards. The 2016 Equity Plan replaced the Hurco Companies, Inc. 2008 Equity Incentive Plan (the “2008 Equity Plan”) and is the only active plan under which equity awards may be made by us to our employees and non–employee directors. No further awards will be made under our 2008 Equity Plan. The total number of shares of our common stock that may be issued pursuant to awards under the 2016 Equity Plan initially was 856,048, which included 386,048 shares that remained available for future grants under the 2008 Equity Plan on the date our shareholders originally approved the 2016 Equity Plan. On March 10, 2022, our shareholders approved the Amended and Restated Hurco Companies, Inc. 2016 Equity Incentive Plan, which, among other items, increased the aggregate number of shares that may be issued under the 2016 Equity Plan by 850,000 shares.

The Compensation Committee of our Board of Directors has the authority to determine the officers, directors and key employees who will be granted awards under the 2016 Equity Plan; designate the number of shares subject to each award; determine the terms and conditions upon which awards will be granted; and prescribe the form and terms of award agreements. We have granted restricted shares and performance units under the 2016 Equity Plan that are currently outstanding, and we have granted stock options under the 2008 Equity Plan that remained outstanding as of October 31, 2022. No stock option may be exercised more than ten years after the date of grant or such shorter period as the Compensation Committee may determine at the date of grant. The market value of a share of our common stock, for purposes of the 2016 Equity Plan, is the closing sale price as reported by the Nasdaq Global Select Market on the date in question or, if not a trading day, on the last preceding trading date.

A summary of the status of the stock options as of October 31, 2022, 2021, and 2020, and the related activity for the year is as follows:


	Shares Under	Weighted Average Grant
	Option	Date Fair Value
Balance October 31, 2019	37,045	$	21.69
Granted	—		—
Cancelled	—		—
Expired	—		—
Exercised	(3,738)	$	18.13
Balance October 31, 2020	33,307	$	22.09
Granted	—		—
Cancelled	—		—
Expired	—		—
Exercised	(16,311)		21.45
Balance October 31, 2021	16,996	$	22.71
Granted	—		—
Cancelled	—		—
Expired	—		—
Exercised	(5,437)		21.45
Balance October 31, 2022	11,559	$	23.30

The total intrinsic value of stock options exercised during the twelve months ended October 31, 2022, 2021, and 2020, was approximately $9,000, $179,000, and $44,000, respectively.

As of October 31, 2022, the total intrinsic value of stock options that were outstanding and exercisable was zero, with the intrinsic value calculated as the excess, if any, between the stock price as of October 31, 2022 and the exercise price of each option. Stock options outstanding and exercisable on October 31, 2022, were as follows:


			Weighted Average		Weighted Average
Range of Exercise		Shares Under	Exercise Price Per		Remaining Contractual
Prices Per Share		Option	Share		Life in Years
	Outstanding and Exercisable
$	23.30	11,559	$	23.30	0.12

On March 10, 2022, the Compensation Committee granted a total of 13,914 shares of time-based restricted stock to our non-employee directors. The restricted shares vest in full one year from the date of grant provided the recipient remains on the board of directors through that date. The grant date fair value of the restricted shares was based on the closing sales price of our common stock on the grant date, which was $34.49 per share.

On January 4, 2022, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of time-based restricted shares and performance stock units (“PSUs”) under the 2016 Equity Plan, which will be payable in shares of our common stock if earned and vested. The awards were approximately 25% time-based vesting and approximately 75% performance-based vesting. The three-year performance period for the PSUs is fiscal year 2022 through fiscal year 2024.

On that date, the Compensation Committee granted a total of 23,442 shares of time-based restricted stock to our executive officers. The restricted shares vest in thirds over three years from the date of grant provided the recipient remains employed through that date. The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $30.39 per share.

On January 4, 2022, the Compensation Committee also granted a total target number of 34,203 PSUs to our executive officers designated as “PSU – TSR”. These PSUs were weighted as approximately 40% of the overall 2022 executive long-term incentive compensation arrangement and will vest and be paid based upon the total shareholder return of our common stock over the three-year period of fiscal years 2022-2024, relative to the total shareholder return of the companies in a specified peer group over that period. Participants will have the ability to earn between 50% of the target number of the PSUs – TSR for achieving threshold performance and 200% of the target number of the PSUs – TSR for achieving maximum performance. The grant date fair value of the PSUs – TSR was $33.33 per PSU and was calculated using the Monte Carlo approach.

On January 4, 2022, the Compensation Committee also granted a total target number of 32,821 PSUs to our executive officers designated as “PSU – ROIC”. These PSUs were weighted as approximately 35% of the overall 2022 executive long-term incentive compensation arrangement and will vest and be paid based upon the achievement of pre-established goals related to our average return on invested capital over the three-year period of fiscal years 2022-2024. Participants will have the ability to earn between 50% of the target number of the PSUs – ROIC for achieving threshold performance and 200% of the target number of the PSUs – ROIC for achieving maximum performance. The grant date fair value of the PSUs – ROIC was based on the closing sales price of our common stock on the grant date, which was $30.39 per share.

On November 10, 2021, the Compensation Committee granted a total of 8,234 shares of time-based restricted stock to our non-executive employees. The restricted shares vest in thirds over three years from the date of grant provided the recipient remains employed through that date. The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $33.99 per share.

On March 11, 2021, the Compensation Committee granted a total of 9,708 shares of time-based restricted stock to our non-employee directors. The restricted shares vest in full one year from the date of grant provided the recipient remains on the board of directors through that date. The grant date fair value of the restricted shares was based on the closing sales price of our common stock on the grant date, which was $37.06 per share.

On January 5, 2021, the Compensation Committee determined that no PSUs were earned pursuant to the long-term incentive compensation arrangement for the fiscal years 2018-2020 performance period based on the results of the performance metrics that were established by the Compensation Committee in 2018.

On January 5, 2021, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of time-based restricted shares and PSUs under the 2016 Equity Plan, which will be payable in shares of our common stock if earned and vested. The awards were approximately 25% time-based vesting and approximately 75% performance-based vesting. The three-year performance period for the PSUs is fiscal year 2021 through fiscal year 2023.

On that date, the Compensation Committee granted a total of 23,164 shares of time-based restricted stock to our executive officers. The restricted shares vest in thirds over three years from the date of grant provided the recipient remains employed through that date. The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $28.60 per share.

On January 5, 2021, the Compensation Committee granted a total target number of 39,199 PSUs to our executive officers designated as “PSU – TSR”. These PSUs were weighted as approximately 40% of the overall 2021 executive long-term incentive compensation arrangement and will vest and be paid based upon the total shareholder return of our common stock over the three-year period of fiscal years 2021-2023, relative to the total shareholder return of the companies in a specified peer group over that period. Participants will have the ability to earn between 50% of the target number of the PSUs – TSR for achieving threshold performance and 200% of the target number of the PSUs – TSR for achieving maximum performance. The grant date fair value of the PSUs – TSR was $27.04 per PSU and was calculated using the Monte Carlo approach.

On January 5, 2021, the Compensation Committee also granted a total target number of 32,430 PSUs to our executive officers designated as “PSU – ROIC”. These PSUs were weighted as approximately 35% of the overall 2021 executive long-term incentive compensation arrangement and will vest and be paid based upon the achievement of pre-established goals related to our average return on invested capital over the three-year period of fiscal years 2021-2023. Participants will have the ability to earn between 50% of the target number of the PSUs – ROIC for achieving threshold performance and 200% of the target number of the PSUs – ROIC for achieving maximum performance. The grant date fair value of the PSUs – ROIC was based on the closing sales price of our common stock on the grant date, which was $28.60 per share.

On November 12, 2020, the Compensation Committee granted a total of 11,531 shares of time-based restricted stock to our non-executive employees. The restricted shares vest in thirds over three years from the date of grant provided the recipient remains employed through that date. The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $29.30 per share.

On March 12, 2020, the Compensation Committee granted a total of 17,780 shares of time-based restricted stock to our non-employee directors. The restricted shares vest in full one year from the date of grant provided the recipient remains on the board of directors through that date. The grant date fair value of the restricted shares was based on the closing sales price of our common stock on the grant date, which was $23.62 per share.

On January 2, 2020, the Compensation Committee determined the degree to which the long-term incentive compensation arrangement approved for the fiscal years 2017-2019 performance period was attained, and the resulting payout level relative to the target amount for each of the metrics that were established by the Compensation Committee in 2017. As a result, the Compensation Committee determined that a total of 28,979 PSUs were earned by our executive officers, which PSUs vested on January 2, 2020. The vesting date fair value of the PSUs was based on the closing sales price of our common stock on the vesting date, which was $37.79 per share.

On January 2, 2020, the Compensation Committee also approved a long-term incentive compensation arrangement for our executive officers in the form of restricted shares and PSUs under the 2016 Equity Plan, which will be payable in shares of our common stock if earned and vested. The awards were approximately 25% time-based vesting and approximately 75% performance-based vesting. The three-year performance period for the PSUs is fiscal year 2020 through fiscal year 2022.

On that date, the Compensation Committee granted a total of 20,837 shares of time-based restricted stock to our executive officers. The restricted shares vest in thirds over three years from the date of grant provided the recipient remains employed through that date. The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $37.79 per share.

On January 2, 2020, the Compensation Committee also granted a total target number of 26,918 PSUs to our executive officers designated as “PSU – TSR”. These PSUs were weighted as approximately 40% of the overall 2020 executive long-term incentive compensation arrangement and will vest and be paid based upon the total shareholder return of our common stock over the three-year period of fiscal years 2020-2022, relative to the total shareholder return of the companies in a specified peer group over that period. Participants will have the ability to earn between 50% of the target number of the PSUs – TSR for achieving threshold performance and 200% of the target number of the PSUs – TSR for achieving maximum performance. The grant date fair value of the PSUs – TSR was $46.81 per PSU and was calculated using the Monte Carlo approach.

On January 2, 2020, the Compensation Committee also granted a total target number of 29,174 PSUs to our executive officers designated as “PSU – ROIC”. These PSUs were weighted as approximately 35% of the overall 2020 executive long-term incentive compensation arrangement and will vest and be paid based upon the achievement of pre-established goals related to our average return on invested capital over the three-year period of fiscal years 2020-2022. Participants will have the ability to earn between 50% of the target number of the PSUs - ROIC for achieving threshold performance and 200% of the target number of the PSUs - ROIC for achieving maximum performance. The grant date fair value of the PSUs – ROIC was based on the closing sales price of our common stock on the grant date, which was $37.79 per share.

On November 13, 2019, the Compensation Committee granted a total of 8,052 shares of time-based restricted stock to our non-executive employees. The restricted shares vest in thirds over three years from the date of grant provided the recipient remains employed through that date. The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $35.75 per share.

A reconciliation of our restricted stock and PSU activity and related information is as follows:


			Weighted Average Grant
	Number of Shares		Date Fair Value
Unvested at October 31, 2021		262,556	$	34.84
Shares or units granted		112,614		32.05
Shares or units vested		(33,761)		34.90
Shares or units cancelled		(61,500)		38.41
Shares withheld		(6,806)		34.03
Unvested at October 31, 2022		273,103	$	32.90

During fiscal years 2022, 2021, and 2020, we recorded approximately $2.7 million, $2.8 million, and $2.1 million, respectively, of stock–based compensation expense related to grants under the 2016 Equity Plan. As of October 31, 2022, there was an estimated $3.2 million of total unrecognized stock–based compensation cost that we expect to recognize by the end of the first quarter of fiscal year 2025.

RELATED PARTY TRANSACTIONS

12 Months Ended

Oct. 31, 2022

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

9. RELATED PARTY TRANSACTIONS

As of October 31, 2022, we owned approximately 35% of the outstanding shares of a Taiwanese–based contract manufacturer, Hurco Automation, Ltd. (“HAL”). HAL’s scope of activities includes the design, manufacture, sales, and distribution of industrial automation products, software systems, and related components, including control systems and components produced under contract for sale exclusively to us. We are accounting for this investment using the equity method. The investment of $5.0 million and $4.8 million at October 31, 2022 and 2021, respectively, is included in Investments and other assets, net on the Consolidated Balance Sheets. Purchases of controls from HAL amounted to $10.5 million, $8.7 million, and $6.2 million in fiscal years 2022, 2021, and 2020, respectively. Sales of control component parts to HAL were $321,000, $262,000, and $265,000 for the fiscal years ended October 31, 2022, 2021, and 2020, respectively. Trade payables to HAL were $1.9 million and $2.6 million at October 31, 2022 and 2021, respectively. Trade receivables from HAL were $34,000 and $74,000 at October 31, 2022 and 2021, respectively.

Summary unaudited financial information for HAL’s operations and financial condition is as follows (in thousands):


	2022		2021		2020
Net Sales	$	14,171	$	12,361	$	10,096
Gross Profit		2,397		2,011		1,418
Operating Income		1,053		216		160
Net Income		2,528		802		265

Current Assets	$	15,018	$	14,695	$	12,436
Non–current Assets		6,430		6,850		6,152
Current Liabilities		4,998		5,339		3,708
Non-current Liabilities		1,619		1,850		1,564

CONTINGENCIES AND LITIGATION

12 Months Ended

Oct. 31, 2022

CONTINGENCIES AND LITIGATION

CONTINGENCIES AND LITIGATION

10. CONTINGENCIES AND LITIGATION

From time to time, we are involved in various claims and lawsuits arising in the normal course of business. Pursuant to applicable accounting rules, we accrue the minimum liability for each known claim when the estimated outcome is a range of possible loss and no one amount within that range is more likely than another. We maintain insurance policies for such matters, and we record insurance recoveries when we determine such recovery to be probable. We do not expect any of these claims, individually or in the aggregate, to have a material adverse effect on our consolidated financial position or results of operations. We believe that the ultimate resolution of claims for any losses will not exceed our insurance policy coverages.

GUARANTEES AND PRODUCT WARRANTIES

12 Months Ended

Oct. 31, 2022

GUARANTEES AND PRODUCT WARRANTIES

GUARANTEES AND PRODUCT WARRANTIES

11. GUARANTEES AND PRODUCT WARRANTIES

From time to time, our subsidiaries guarantee third party payment obligations in connection with the sale of machines to customers that use financing. We follow FASB guidance for accounting for guarantees (codified in ASC 460). As of October 31, 2022, we had nine outstanding third party payment guarantees totaling approximately $0.7 million. The terms of these guarantees are consistent with the underlying customer financing terms. Upon shipment of a machine, the customer assumes the risk of ownership. The customer does not obtain title, however, until it has paid for the machine. A retention of title clause allows us to recover the machine if the customer defaults on the financing. We accrue liabilities under these guarantees at fair value, which amounts are insignificant.

We provide warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year for machines and shorter periods for service parts. We recognize a reserve with respect to this obligation at the time of product sale, with subsequent warranty claims recorded against the reserve. The amount of the warranty reserve is determined based on historical trend experience and any known warranty issues that could cause future warranty costs to differ from historical experience. A reconciliation of the changes in our warranty reserve for each of the last three fiscal years is as follows (in thousands):


	2022		2021		2020
Balance, beginning of period	$	1,516	$	1,200	$	1,760
Provision for warranties during the period		2,915		2,948		2,075
Charges to the reserve		(2,877)		(2,643)		(2,669)
Impact of foreign currency translation		(128)		11		34
Balance, end of period	$	1,426	$	1,516	$	1,200

The decrease in our warranty reserve from fiscal year 2021 to fiscal year 2022 was primarily due to the impact of foreign currencies when translating foreign reserves to US. dollars for financial reporting purposes. Excluding the impact of foreign currencies, warranty reserve increased slightly as a result of increased shipments of higher-performance five-axis machines. The increase in our warranty reserve from fiscal year 2020 to fiscal year 2021 was primarily due to an increase in the number of machines under warranty from increased sales volume in fiscal year 2021.

LEASES

12 Months Ended

Oct. 31, 2022

LEASES

LEASES

12. LEASES

We adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (“ASC 842”) on November 1, 2019, the start of our 2020 fiscal year, and utilized the transition method allowed. Accordingly, comparative period financial information was not adjusted for the effects of adopting ASC 842 and no cumulative-effect adjustment was required to the opening balance of retained earnings on the adoption date.

Upon adoption of ASC 842, we utilized the following elections and practical expedients:

●

We elected to combine non-lease components with lease components.

●

If at the lease commencement date, a lease has a lease term of 12 months or less and does not include a purchase option that is reasonably certain to be exercised, we have elected not to apply ASC 842 recognition requirements. Nonetheless, we intend to include leases of less than 12 months within the updated footnote disclosures, if material.

●

We elected not to use the portfolio method if we enter into a large number of leases in the same month with the same terms and conditions.

●

As we have applied the new transition method allowed per ASU 2018-11, we have elected not to reassess arrangements entered into prior to November 1, 2019, for whether an arrangement is or contains a lease, the lease classification applied or to separate initial direct costs.

●

We elected not to use hindsight in determining the lease term for lease contracts that have historically been renewed or amended.

Our lease portfolio includes leased production and assembly facilities, warehouses and distribution centers, office space, vehicles, material handling equipment utilized in our production and assembly facilities, laptops and other information technology equipment, as well as other miscellaneous leased equipment. Most of the leased production and assembly facilities have lease terms ranging from two to five years, although the terms and conditions of our leases can vary significantly from lease to lease. We have assessed the specific terms and conditions of each lease to determine the amount of the lease payments and the length of the lease term, which includes the minimum period over which lease payments are required plus any renewal options that are both within our control to exercise and reasonably certain of being exercised upon lease commencement. In determining whether or not a renewal option is reasonably certain of being exercised, we assessed all relevant factors to determine if sufficient incentives exist as of lease commencement to conclude renewal is reasonably certain. There are no material residual value guarantees provided by us, nor any restrictions or covenants imposed by the leases to which we are a party. In determining the lease liability, we utilize our incremental borrowing rate to discount the future lease payments over the lease term to present value.

We record a right-of-use asset and lease liability on our Consolidated Balance Sheets for all leases for which we are a lessee, in accordance with ASC 842. All our leases for which we are a lessee are classified as operating leases under the guidance in Topic 840.

We recorded total operating lease expense for the fiscal years ended October 31, 2022, 2021, and 2020 of $5.1 million, $5.2 million, and $5.0 million, respectively, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Consolidated Statements of Operations. Operating lease expense includes short-term leases and variable lease payments, which are immaterial. There has been no cost to obtain leases capitalized on the Consolidated Balance Sheets as of October 31, 2022.

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for fiscal year 2022 (in thousands):


Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	4,457
Noncash information:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	3,577

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of October 31, 2022 (in thousands):


2023	$	4,132
2024		2,418
2025		1,059
2026		552
2027		434
2028 and thereafter		497
Total		9,092
Less: Imputed interest		(305)
Present value of operating lease liabilities	$	8,787

As of October 31, 2022, the weighted-average remaining term of our lease portfolio was approximately 3.1 years, and the weighted-average discount rate was approximately 2.1%.

QUARTERLY FINANCIAL INFORMATION (Unaudited)

12 Months Ended

Oct. 31, 2022

QUARTERLY FINANCIAL INFORMATION (Unaudited)

QUARTERLY FINANCIAL INFORMATION (Unaudited)

13. QUARTERLY FINANCIAL INFORMATION (Unaudited)


	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2022 (In thousands, except per share data)
Sales and service fees	$	66,887		$	62,825		$	57,640		$	63,462
Gross profit		16,907			15,602			14,399			17,570
Gross profit margin		25	%		25	%		25	%		28	%
Selling, general and administrative expenses		11,697			12,515			12,647			14,872
Operating income (loss)		5,210			3,087			1,752			2,698
Provision (benefit) for income taxes		1,643			893			488			628
Net income (loss)		3,535			2,029			1,238			1,424
Income (loss) per common share – basic	$	0.53		$	0.30		$	0.19		$	0.22
Income (loss) per common share – diluted	$	0.53		$	0.30		$	0.18		$	0.22


	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2021 (In thousands, except per share data)
Sales and service fees	$	54,115		$	57,920		$	54,178		$	68,982
Gross profit		11,547			14,794			12,974			16,934
Gross profit margin		21	%		26	%		24	%		25	%
Selling, general and administrative expenses		10,568			11,273			10,331			13,829
Operating income		979			3,521			2,643			3,105
Provision (benefit) for income taxes		546			947			1,109			755
Net income		663			2,437			1,568			2,096
Income per common share – basic	$	0.10		$	0.37		$	0.23		$	0.31
Income per common share – diluted	$	0.10		$	0.37		$	0.23		$	0.31

SEGMENT INFORMATION

12 Months Ended

Oct. 31, 2022

SEGMENT INFORMATION

SEGMENT INFORMATION

14. SEGMENT INFORMATION

We operate in a single segment: industrial automation equipment. We design, manufacture, and sell computerized (i.e., Computer Numeric Control) machine tools, consisting primarily of vertical machining centers (mills) and turning centers (lathes), to companies in the metal cutting industry through a worldwide sales, service, and distribution network. Although the majority of our computer control systems and software products are proprietary, they predominantly use industry standard personal computer components. Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products. We also provide machine tool components, automation integration equipment and solutions for job shops, software options, control upgrades, accessories and replacement parts for our products, as well as customer service, training, and applications support.

We principally sell our products through approximately 200 independent agents and distributors throughout the Americas, Europe, and Asia. Our line is the primary line for the majority of our distributors globally, even though some may carry competitive products. We also have our own direct sales and service organizations in China, the Czech Republic, France, Germany, India, Italy, the Netherlands, Poland, Singapore, Taiwan, the United Kingdom, and certain areas of the United States, which are among the world's principal machine tool consuming countries. During fiscal year 2022, no distributor accounted for more than 5% of our sales and service fees. In fiscal year 2022, approximately 62% of our revenues were from customers located outside of the Americas, and no single end-user of our products accounted for more than 5% of our total sales and service fees.

The following table sets forth the contribution of each of our product groups and services to our total sales and service fees during each of the past three fiscal years (in thousands):

Net Sales and Service Fees by Product Category


	Year ended October 31,
	2022		2021		2020
Computerized Machine Tools	$	211,804	$	198,602	$	139,577
Computer Control Systems and Software ^†		2,634		2,528		1,699
Service Parts		28,219		26,425		22,484
Service Fees		8,157		7,640		6,867
Total	$	250,814	$	235,195	$	170,627

^† Amounts shown do not include computer control systems and software sold as an integrated component of computerized machine systems.

The following table sets forth revenues by geographic area, based on customer location, for each of the past three fiscal years (in thousands):


	Year Ended October 31,
	2022		2021		2020
United States of America	$	92,050	$	83,218	$	64,500
Canada		3,996		2,636		1,621
Central & South Americas		1,279		989		1,543
Total Americas		97,325		86,843		67,664

Germany		42,026		37,584		24,993
United Kingdom		26,629		30,314		19,679
Italy		16,499		12,718		8,599
France		14,291		14,252		10,797
Other Europe		24,437		21,467		14,034
Total Europe		123,882		116,335		78,102

China		10,293		14,284		14,225
Other Asia Pacific		18,553		16,047		10,048
Total Asia Pacific		28,846		30,331		24,273

Other Foreign		761		1,686		588
Grand Total	$	250,814	$	235,195	$	170,627

Long–lived tangible assets, net by geographic area, were (in thousands):


	As of October 31,
	2022		2021		2020
United States of America	$	5,628	$	6,104	$	6,826
Foreign countries		4,941		6,640		7,059
	$	10,569	$	12,744	$	13,885

Net assets by geographic area were (in thousands):


	As of October 31,
	2022		2021		2020
Americas	$	87,476	$	84,385	$	83,214
Europe		67,797		80,769		77,840
Asia Pacific		67,371		73,265		70,094
	$	222,644	$	238,419	$	231,148

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
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+ Details

NEW ACCOUNTING PRONOUNCEMENTS

12 Months Ended

Oct. 31, 2022

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS

15. NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements:

In December 2019, FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which allows for companies to remove certain exceptions and clarifies certain requirements regarding franchise taxes, goodwill, consolidated tax expenses, and annual effective tax rate calculations. This standard was effective for our fiscal year 2022. We adopted this standard on November 1, 2021. This standard did not have a significant effect on our accounting policies or on our consolidated financial statements and related disclosures.

In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides temporary optional expedients and exceptions to the U.S. Generally Accepted Accounting Principles guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. This standard is effective for all entities beginning March 12, 2020, through December 31, 2022. We adopted this standard on November 1, 2021. This standard did not have a significant effect on our accounting policies or on our consolidated financial statements and related disclosures.

There have been no other significant changes in the Company’s critical accounting policies and estimates during the fiscal year ended October 31, 2022.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

Schedule II - Valuation and Qualifying Accounts and Reserves

12 Months Ended

Oct. 31, 2022

Schedule II - Valuation and Qualifying Accounts and Reserves

Schedule II - Valuation and Qualifying Accounts and Reserves

Schedule II – Valuation and Qualifying Accounts and Reserves

for the Years Ended October 31, 2022, 2021 and 2020

(Dollars in thousands)


			Charged to/
			(Recovered
	Balance at		from)		Charged					Balance
	Beginning		Costs and		to Other					at End
Description	of Period		Expenses		Accounts		Deductions			of Period
Allowance for doubtful accounts for the year ended:
October 31, 2022	$	1,645	$	(74)	$	—	$	85	⁽¹⁾	$	1,486
October 31, 2021	$	1,401	$	268	$	—	$	24	⁽¹⁾	$	1,645
October 31, 2020	$	891	$	575	$	—	$	65	⁽¹⁾	$	1,401

Income tax valuation allowance for the year ended:
October 31, 2022	$	1,871	$	502	$	—	$	619		$	1,754
October 31, 2021	$	2,164	$	49	$	—	$	342		$	1,871
October 31, 2020	$	2,227	$	50	$	—	$	113		$	2,164

(1)	Receivable write–offs.

All other financial statement schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Oct. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

Reclassifications

Statements of Cash Flows

Translation of Foreign Currencies

Hedging

Derivatives Designated as Hedging Instruments

Derivatives Not Designated as Hedging Instruments

Fair Value of Derivative Instruments


	2022			2021
	Balance Sheet	Fair		Balance Sheet	Fair
Derivatives	Location	Value		Location	Value
Designated as Hedging Instruments:
Foreign exchange forward contracts	Derivative assets	$	2,273	Derivative assets	$	646
Foreign exchange forward contracts	Derivative liabilities	$	2,891	Derivative liabilities	$	403

Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Derivative assets	$	242	Derivative assets	$	259
Foreign exchange forward contracts	Derivative liabilities	$	741	Derivative liabilities	$	64

Effect of Derivative Instruments on the Consolidated Balance Sheets, Statements of Changes in Shareholders’ Equity, and Statements of Operations


							Location of
	Amount of Gain (Loss)						Gain (Loss)	Amount of Gain (Loss)
	Recognized in						Reclassified	Reclassified from
	Other Comprehensive						From Other	Other Comprehensive
	Income (Loss)						Comprehensive	Income (Loss)
Derivatives	2022		2021		2020		Income (Loss)	2022		2021		2020
Designated as Hedging Instruments:
(Effective Portion)
Foreign exchange forward contracts – Intercompany sales/purchases	$	(384)	$	(477)	$	395	Cost of sales and service	$	(191)	$	679	$	421
Foreign exchange forward contract – Net investment	$	401	$	43	$	(64)

We did not recognize any gains or losses as a result of hedges deemed ineffective during fiscal years ended October 31, 2022, 2021, and 2020.


		Amount of Gain (Loss)
	Location of Gain (Loss)	Recognized in Operations
Derivatives	Recognized in Operations	2022		2021		2020
Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Other expense, net	$	2,374	$	(313)	$	(171)

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the fiscal years ended October 31, 2022 and 2021 (in thousands):


	Foreign		Cash
	Currency		Flow
	Translation		Hedges		Total
Balance, October 31, 2020	$	(4,073)	$	1,083	$	(2,990)
Other comprehensive income (loss) before reclassifications		2,405		(477)		1,928
Reclassifications		—		(679)		(679)
Balance, October 31, 2021	$	(1,668)	$	(73)	$	(1,741)
Other comprehensive income (loss) before reclassifications		(19,591)		(384)		(19,975)
Reclassifications		—		191		191
Balance, October 31, 2022	$	(21,259)	$	(266)	$	(21,525)

Inventories

Property and Equipment


		Number of Years
Land		Indefinite
Building		40
Machines		7 – 10
Shop and office equipment		3 – 7
Building & leasehold improvements		3 – 40

Total depreciation and amortization expense recognized for property and equipment was $2.3 million for fiscal year 2022, $2.5 million for fiscal year 2021, and $2.7 million for fiscal year 2020.

Revenue Recognition

Allowance for Doubtful Accounts

Product Warranty

Research and Development Costs

Software Development Costs

Estimated amortization expense for the remaining unamortized software development costs for the fiscal years ending October 31, is as follows (in thousands):


Fiscal Year	Amortization Expense
2023	$	1,663
2024		1,905
2025		1,281
2026		1,132
2027 and thereafter		1,321

Goodwill and Intangible Assets

As of October 31, 2022, the balances of intangible assets, other than goodwill, were as follows (in thousands):


	Weighted
	Average		Gross
	Amortization		Intangible		Accumulated		Net Intangible
	Period		Assets		Amortization		Assets
Tradenames and trademarks	indefinite		$	177	$	—	$	177
Tradenames and trademarks	14	years		728		(261)		467
Customer relationships	15	years		367		(243)		124
Technology	13	years		605		(434)		171
Noncompete	5	years		580		(377)		203
Patents	6	years		2,972		(2,884)		88
Other	8	years		387		(371)		16
Total			$	5,816	$	(4,570)	$	1,246

As of October 31, 2021, the balances of intangible assets, other than goodwill, were as follows (in thousands):


	Weighted
	Average		Gross
	Amortization		Intangible		Accumulated		Net Intangible
	Period		Assets		Amortization		Assets
Tradenames and trademarks	indefinite		$	177	$	—	$	177
Tradenames and trademarks	14	years		763		(234)		529
Customer relationships	15	years		373		(223)		150
Technology	13	years		708		(454)		254
Noncompete	5	years		580		(261)		319
Patents	6	years		2,972		(2,860)		112
Other	8	years		397		(373)		24
Total			$	5,970	$	(4,405)	$	1,565

Impairment of Long-Lived Assets

Earnings Per Share

The following table presents a reconciliation of our basic and diluted earnings per share computation:



	Fiscal Year Ended October 31,
	2022				2021				2020
(in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income (loss)	$	8,226	$	8,226	$	6,764	$	6,764	$	(6,247)	$	(6,247)
Undistributed earnings (loss) allocated to participating shares		(97)		(97)		(76)		(76)		66		66
Net income (loss) applicable to common shareholders	$	8,129	$	8,129	$	6,688	$	6,688	$	(6,181)	$	(6,181)

Weighted average shares outstanding		6,580		6,580		6,595		6,595		6,670		6,670
Stock options and contingently issuable securities		—		52		—		13		—		—
		6,580		6,632		6,595		6,608		6,670		6,670
Income (loss) per share	$	1.24	$	1.23	$	1.01	$	1.01	$	(0.93)	$	(0.93)

Income Taxes

Stock Compensation

Estimates

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Oct. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of Fair Value of Derivative Instruments


	2022			2021
	Balance Sheet	Fair		Balance Sheet	Fair
Derivatives	Location	Value		Location	Value
Designated as Hedging Instruments:
Foreign exchange forward contracts	Derivative assets	$	2,273	Derivative assets	$	646
Foreign exchange forward contracts	Derivative liabilities	$	2,891	Derivative liabilities	$	403

Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Derivative assets	$	242	Derivative assets	$	259
Foreign exchange forward contracts	Derivative liabilities	$	741	Derivative liabilities	$	64

Schedule of Effect of Derivative Instruments on the Balance Sheets, Statements of Changes in Shareholders' Equity and Statements of Operations


							Location of
	Amount of Gain (Loss)						Gain (Loss)	Amount of Gain (Loss)
	Recognized in						Reclassified	Reclassified from
	Other Comprehensive						From Other	Other Comprehensive
	Income (Loss)						Comprehensive	Income (Loss)
Derivatives	2022		2021		2020		Income (Loss)	2022		2021		2020
Designated as Hedging Instruments:
(Effective Portion)
Foreign exchange forward contracts – Intercompany sales/purchases	$	(384)	$	(477)	$	395	Cost of sales and service	$	(191)	$	679	$	421
Foreign exchange forward contract – Net investment	$	401	$	43	$	(64)

Schedule of derivative instruments not designated as hedging instruments


		Amount of Gain (Loss)
	Location of Gain (Loss)	Recognized in Operations
Derivatives	Recognized in Operations	2022		2021		2020
Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Other expense, net	$	2,374	$	(313)	$	(171)

Schedule of Accumulated Other Comprehensive Loss

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the fiscal years ended October 31, 2022 and 2021 (in thousands):


	Foreign		Cash
	Currency		Flow
	Translation		Hedges		Total
Balance, October 31, 2020	$	(4,073)	$	1,083	$	(2,990)
Other comprehensive income (loss) before reclassifications		2,405		(477)		1,928
Reclassifications		—		(679)		(679)
Balance, October 31, 2021	$	(1,668)	$	(73)	$	(1,741)
Other comprehensive income (loss) before reclassifications		(19,591)		(384)		(19,975)
Reclassifications		—		191		191
Balance, October 31, 2022	$	(21,259)	$	(266)	$	(21,525)

Schedule of Property and Equipment Estimated Useful Lives


		Number of Years
Land		Indefinite
Building		40
Machines		7 – 10
Shop and office equipment		3 – 7
Building & leasehold improvements		3 – 40

Schedule of Estimated Amortization Expense

Estimated amortization expense for the remaining unamortized software development costs for the fiscal years ending October 31, is as follows (in thousands):


Fiscal Year	Amortization Expense
2023	$	1,663
2024		1,905
2025		1,281
2026		1,132
2027 and thereafter		1,321

Schedule of Intangible Assets

As of October 31, 2022, the balances of intangible assets, other than goodwill, were as follows (in thousands):


	Weighted
	Average		Gross
	Amortization		Intangible		Accumulated		Net Intangible
	Period		Assets		Amortization		Assets
Tradenames and trademarks	indefinite		$	177	$	—	$	177
Tradenames and trademarks	14	years		728		(261)		467
Customer relationships	15	years		367		(243)		124
Technology	13	years		605		(434)		171
Noncompete	5	years		580		(377)		203
Patents	6	years		2,972		(2,884)		88
Other	8	years		387		(371)		16
Total			$	5,816	$	(4,570)	$	1,246

As of October 31, 2021, the balances of intangible assets, other than goodwill, were as follows (in thousands):


	Weighted
	Average		Gross
	Amortization		Intangible		Accumulated		Net Intangible
	Period		Assets		Amortization		Assets
Tradenames and trademarks	indefinite		$	177	$	—	$	177
Tradenames and trademarks	14	years		763		(234)		529
Customer relationships	15	years		373		(223)		150
Technology	13	years		708		(454)		254
Noncompete	5	years		580		(261)		319
Patents	6	years		2,972		(2,860)		112
Other	8	years		397		(373)		24
Total			$	5,970	$	(4,405)	$	1,565

Schedule of computation of basic and diluted net income (loss) per share

The following table presents a reconciliation of our basic and diluted earnings per share computation:



	Fiscal Year Ended October 31,
	2022				2021				2020
(in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income (loss)	$	8,226	$	8,226	$	6,764	$	6,764	$	(6,247)	$	(6,247)
Undistributed earnings (loss) allocated to participating shares		(97)		(97)		(76)		(76)		66		66
Net income (loss) applicable to common shareholders	$	8,129	$	8,129	$	6,688	$	6,688	$	(6,181)	$	(6,181)

Weighted average shares outstanding		6,580		6,580		6,595		6,595		6,670		6,670
Stock options and contingently issuable securities		—		52		—		13		—		—
		6,580		6,632		6,595		6,608		6,670		6,670
Income (loss) per share	$	1.24	$	1.23	$	1.01	$	1.01	$	(0.93)	$	(0.93)

INVENTORIES (Tables)

12 Months Ended

Oct. 31, 2022

INVENTORIES

Schedule of inventories

Inventories as of October 31, 2022 and 2021 are summarized below (in thousands):


	October 31,		October 31,
	2022		2021
Purchased parts and sub–assemblies	$	43,363	$	37,527
Work–in–process		16,539		17,559
Finished goods		96,305		93,130
	$	156,207	$	148,216

FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Oct. 31, 2022

FINANCIAL INSTRUMENTS

Schedule of fair value hierarchy for financial assets and liabilities measured at fair value


	Assets				Liabilities
	October 31,		October 31,		October 31,		October 31,
	2022		2021		2022		2021
Level 1
Deferred compensation	$	1,996	$	2,481	$	—	$	—

Level 2
Derivatives	$	2,515	$	905	$	3,632	$	467

INCOME TAXES (Tables)

12 Months Ended

Oct. 31, 2022

INCOME TAXES

Components of Income (Loss) Before Taxes

The components of income (loss) before taxes are (in thousands):


	Year Ended October 31,
	2022		2021		2020
Income (loss) before income taxes:
Domestic	$	(232)	$	4,340	$	(11,681)
Foreign		12,110		5,781		878
	$	11,878	$	10,121	$	(10,803)

Schedule of Income Taxes Provision (Benefit)

In the fiscal years set forth below, the provision (benefit) for income taxes consisted of the following (in thousands):


	Year Ended October 31,
	2022		2021		2020
Current:
U.S. taxes	$	1,092	$	1,763	$	(4,932)
Foreign taxes		3,191		1,706		923
		4,283		3,469		(4,009)
Deferred:
U.S. taxes		(933)		66		(256)
Foreign taxes		302		(178)		(291)
		(631)		(112)		(547)
	$	3,652	$	3,357	$	(4,556)

Schedule of Reconciliation of Statutory Tax Rate to Effective Tax Rate

A comparison of income tax expense at the U.S. statutory rate to our effective tax rate is as follows:


	Year Ended October 31,
	2022			2021			2020

U.S. statutory rate		21	%		21	%		21	%
Effect of tax rate of international jurisdictions different than U.S. statutory rates		4	%		4	%		(2)	%
Valuation allowance		3	%		—	%		—	%
State taxes		1	%		1	%		2	%
Tax credits		1	%		—	%		1	%
U.S. benefit of foreign intangible income		(3)	%		(1)	%		—	%
Impact of CARES act		—	%		5	%		22	%
Other		4	% ¹		3	% ¹		(2)	%
Effective tax rate		31	%		33	%		42	%
¹ Primarily due to discrete items for unearned stock awards

Schedule of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities at October 31, 2022 and 2021 are as follows (in thousands):


	October 31,
	2022		2021
Deferred Tax Assets:
Accrued inventory reserves	$	1,329	$	973
Accrued warranty expenses		270		308
Compensation related expenses		2,495		2,444
Net derivative gain		98		49
Unrealized exchange gain		117		—
Other accrued expenses		318		282
Net operating loss carryforwards		1,449		1,705
Other credit carryforwards		703		839
Operating lease liabilities		2,023		2,570
Goodwill and intangibles		831		967
Other		171		215
		9,804		10,352
Less: Valuation allowance – net operating loss and other credit carryforwards		(1,754)		(1,871)
Deferred tax assets		8,050		8,481

Deferred Tax Liabilities:
Unrealized exchange loss		—		(15)
Property and equipment and capitalized software development costs		(2,394)		(2,533)
Operating lease - right of use assets		(1,960)		(2,495)
Other		(321)		(352)
Net deferred tax assets	$	3,375	$	3,086

Schedule of Income Tax Expense

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding the related accrual for interest or penalties, is as follows (in thousands):


	2022		2021		2020
Balance, beginning of year	$	167	$	168	$	193
Additions based on tax positions related to the current year		21		74		9
Additions (reductions) related to prior year tax positions		—		—		(2)
Reductions due to statute expiration		(50)		(75)		(32)
Balance, end of year	$	138	$	167	$	168

Summary of open tax years by major jurisdiction


United States federal		Fiscal year 2014 through the current period
Germany¹		Fiscal year 2017 through the current period
United Kingdom		Fiscal year 2015 through the current period
Taiwan		Fiscal year 2017 through the current period

¹	Includes federal as well as state, provincial or similar local jurisdictions, as applicable.

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Oct. 31, 2022

EQUITY INCENTIVE PLAN

Schedule of stock option activity

A summary of the status of the stock options as of October 31, 2022, 2021, and 2020, and the related activity for the year is as follows:


	Shares Under	Weighted Average Grant
	Option	Date Fair Value
Balance October 31, 2019	37,045	$	21.69
Granted	—		—
Cancelled	—		—
Expired	—		—
Exercised	(3,738)	$	18.13
Balance October 31, 2020	33,307	$	22.09
Granted	—		—
Cancelled	—		—
Expired	—		—
Exercised	(16,311)		21.45
Balance October 31, 2021	16,996	$	22.71
Granted	—		—
Cancelled	—		—
Expired	—		—
Exercised	(5,437)		21.45
Balance October 31, 2022	11,559	$	23.30

Schedule of Stock Options Outstanding and Exercisable


			Weighted Average		Weighted Average
Range of Exercise		Shares Under	Exercise Price Per		Remaining Contractual
Prices Per Share		Option	Share		Life in Years
	Outstanding and Exercisable
$	23.30	11,559	$	23.30	0.12

Schedule of Restricted Stock Activity

A reconciliation of our restricted stock and PSU activity and related information is as follows:


			Weighted Average Grant
	Number of Shares		Date Fair Value
Unvested at October 31, 2021		262,556	$	34.84
Shares or units granted		112,614		32.05
Shares or units vested		(33,761)		34.90
Shares or units cancelled		(61,500)		38.41
Shares withheld		(6,806)		34.03
Unvested at October 31, 2022		273,103	$	32.90

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Oct. 31, 2022

RELATED PARTY TRANSACTIONS

Schedule of Financial Information

Summary unaudited financial information for HAL’s operations and financial condition is as follows (in thousands):


	2022		2021		2020
Net Sales	$	14,171	$	12,361	$	10,096
Gross Profit		2,397		2,011		1,418
Operating Income		1,053		216		160
Net Income		2,528		802		265

Current Assets	$	15,018	$	14,695	$	12,436
Non–current Assets		6,430		6,850		6,152
Current Liabilities		4,998		5,339		3,708
Non-current Liabilities		1,619		1,850		1,564

GUARANTEES AND PRODUCT WARRANTIES (Tables)

12 Months Ended

Oct. 31, 2022

GUARANTEES AND PRODUCT WARRANTIES

Schedule of reconciliation of the changes in warranty reserve


	2022		2021		2020
Balance, beginning of period	$	1,516	$	1,200	$	1,760
Provision for warranties during the period		2,915		2,948		2,075
Charges to the reserve		(2,877)		(2,643)		(2,669)
Impact of foreign currency translation		(128)		11		34
Balance, end of period	$	1,426	$	1,516	$	1,200

LEASES (Tables)

12 Months Ended

Oct. 31, 2022

LEASES

Schedule of supplemental cash flow information and non-cash activity related to operating leases

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for fiscal year 2022 (in thousands):


Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	4,457
Noncash information:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	3,577

Schedule of maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of October 31, 2022 (in thousands):


2023	$	4,132
2024		2,418
2025		1,059
2026		552
2027		434
2028 and thereafter		497
Total		9,092
Less: Imputed interest		(305)
Present value of operating lease liabilities	$	8,787

QUARTERLY FINANCIAL INFORMATION (Unaudited) (Tables)

12 Months Ended

Oct. 31, 2022

QUARTERLY FINANCIAL INFORMATION (Unaudited)

Schedule of Selected Quarterly Financial Information


	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2022 (In thousands, except per share data)
Sales and service fees	$	66,887		$	62,825		$	57,640		$	63,462
Gross profit		16,907			15,602			14,399			17,570
Gross profit margin		25	%		25	%		25	%		28	%
Selling, general and administrative expenses		11,697			12,515			12,647			14,872
Operating income (loss)		5,210			3,087			1,752			2,698
Provision (benefit) for income taxes		1,643			893			488			628
Net income (loss)		3,535			2,029			1,238			1,424
Income (loss) per common share – basic	$	0.53		$	0.30		$	0.19		$	0.22
Income (loss) per common share – diluted	$	0.53		$	0.30		$	0.18		$	0.22


	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2021 (In thousands, except per share data)
Sales and service fees	$	54,115		$	57,920		$	54,178		$	68,982
Gross profit		11,547			14,794			12,974			16,934
Gross profit margin		21	%		26	%		24	%		25	%
Selling, general and administrative expenses		10,568			11,273			10,331			13,829
Operating income		979			3,521			2,643			3,105
Provision (benefit) for income taxes		546			947			1,109			755
Net income		663			2,437			1,568			2,096
Income per common share – basic	$	0.10		$	0.37		$	0.23		$	0.31
Income per common share – diluted	$	0.10		$	0.37		$	0.23		$	0.31

SEGMENT INFORMATION (Tables)

12 Months Ended

Oct. 31, 2022

SEGMENT INFORMATION

Schedule of Net Sales and Service Fees by Product Category

The following table sets forth the contribution of each of our product groups and services to our total sales and service fees during each of the past three fiscal years (in thousands):

Net Sales and Service Fees by Product Category


	Year ended October 31,
	2022		2021		2020
Computerized Machine Tools	$	211,804	$	198,602	$	139,577
Computer Control Systems and Software ^†		2,634		2,528		1,699
Service Parts		28,219		26,425		22,484
Service Fees		8,157		7,640		6,867
Total	$	250,814	$	235,195	$	170,627

^† Amounts shown do not include computer control systems and software sold as an integrated component of computerized machine systems.

Schedule of Revenues by Geographic Area

The following table sets forth revenues by geographic area, based on customer location, for each of the past three fiscal years (in thousands):


	Year Ended October 31,
	2022		2021		2020
United States of America	$	92,050	$	83,218	$	64,500
Canada		3,996		2,636		1,621
Central & South Americas		1,279		989		1,543
Total Americas		97,325		86,843		67,664

Germany		42,026		37,584		24,993
United Kingdom		26,629		30,314		19,679
Italy		16,499		12,718		8,599
France		14,291		14,252		10,797
Other Europe		24,437		21,467		14,034
Total Europe		123,882		116,335		78,102

China		10,293		14,284		14,225
Other Asia Pacific		18,553		16,047		10,048
Total Asia Pacific		28,846		30,331		24,273

Other Foreign		761		1,686		588
Grand Total	$	250,814	$	235,195	$	170,627

Schedule of Long-Lived Assets by Geographic Area

Long–lived tangible assets, net by geographic area, were (in thousands):


	As of October 31,
	2022		2021		2020
United States of America	$	5,628	$	6,104	$	6,826
Foreign countries		4,941		6,640		7,059
	$	10,569	$	12,744	$	13,885

Schedule of Assets by Geographic Area

Net assets by geographic area were (in thousands):


	As of October 31,
	2022		2021		2020
Americas	$	87,476	$	84,385	$	83,214
Europe		67,797		80,769		77,840
Asia Pacific		67,371		73,265		70,094
	$	222,644	$	238,419	$	231,148

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	Oct. 31, 2022	Oct. 31, 2021
Derivatives, Fair Value [Line Items]
Derivative assets	$ 2,515	$ 905
Derivative liabilities	3,632	467
Foreign Exchange Forward \| Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative assets	2,273	646
Derivative liabilities	2,891	403
Foreign Exchange Forward \| Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative assets	242	259
Derivative liabilities	$ 741	$ 64

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Effect of Derivative Instruments on Consolidated Balance Sheets, Statements of Changes in Shareholders' Equity and Statements of Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$ (384)	$ (477)	$ 395
Designated as Hedging Instrument \| Foreign Exchange Forward \| Intercompany sales/purchases [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)	(384)	(477)	395
Amount of Gain (Loss) Reclassified from Other Comprehensive Income (Loss)	(191)	679	421
Designated as Hedging Instrument \| Foreign Exchange Forward \| Net Investment Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)	401	43	(64)
Not Designated as Hedging Instrument \| Foreign Exchange Forward \| Other Income And Expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Operations	$ 2,374	$ (313)	$ (171)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Changes in Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Derivative [Line Items]
Beginning Balance	$ (1,741)	$ (2,990)
Other comprehensive income (loss) before reclassifications	(19,975)	1,928
Reclassifications	191	(679)	$ (421)
Ending Balance	(21,525)	(1,741)	(2,990)
Foreign Currency Translation
Derivative [Line Items]
Beginning Balance	(1,668)	(4,073)
Other comprehensive income (loss) before reclassifications	(19,591)	2,405
Ending Balance	(21,259)	(1,668)	(4,073)
Cash Flow Hedging
Derivative [Line Items]
Beginning Balance	(73)	1,083
Other comprehensive income (loss) before reclassifications	(384)	(477)
Reclassifications	191	(679)
Ending Balance	$ (266)	$ (73)	$ 1,083

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Estimated Useful Lives (Details)	12 Months Ended
	Oct. 31, 2022
Land [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life, Indefinite	Indefinite
Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	40 years
Machines [Member] \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Machines [Member] \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years
Shop and Office Equipment [Member] \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Shop and Office Equipment [Member] \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Building And Leasehold Improvements [Member] \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Building And Leasehold Improvements [Member] \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	40 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Estimated Amortization Expense (Details) $ in Thousands	Oct. 31, 2022 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2022	$ 1,663
2023	1,905
2024	1,281
2025	1,132
2026 and thereafter	$ 1,321

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 5,816	$ 5,970
Accumulated Amortization	(4,570)	(4,405)
Net Intangible Assets	1,246	1,565
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	367	373
Accumulated Amortization	(243)	(223)
Net Intangible Assets	$ 124	$ 150
Weighted Average Amortization Period	15 years	15 years
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 605	$ 708
Accumulated Amortization	(434)	(454)
Net Intangible Assets	$ 171	$ 254
Weighted Average Amortization Period	13 years	13 years
Noncompete
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 580	$ 580
Accumulated Amortization	(377)	(261)
Net Intangible Assets	$ 203	$ 319
Weighted Average Amortization Period	5 years	5 years
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 2,972	$ 2,972
Accumulated Amortization	(2,884)	(2,860)
Net Intangible Assets	$ 88	$ 112
Weighted Average Amortization Period	6 years	6 years
Other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 387	$ 397
Accumulated Amortization	(371)	(373)
Net Intangible Assets	$ 16	$ 24
Weighted Average Amortization Period	8 years	8 years
Trademark/name
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 728	$ 763
Accumulated Amortization	(261)	(234)
Net Intangible Assets	467	529
Indefinite tradenames and trademarks	$ 177	$ 177
Weighted Average Amortization Period	14 years	14 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net income (loss)	$ 1,424	$ 1,238	$ 2,029	$ 3,535	$ 2,096	$ 1,568	$ 2,437	$ 663	$ 8,226	$ 6,764	$ (6,247)
Undistributed (earnings) loss allocated to participating shares									(97)	(76)	66
Undistributed (earnings) loss allocated to participating shares									(97)	(76)	66
Net income applicable to common shareholders - Basic									8,129	6,688	(6,181)
Net income applicable to common shareholders - Diluted									$ 8,129	$ 6,688	$ (6,181)
Weighted average shares outstanding - Basic									6,580	6,595	6,670
Weighted average shares outstanding - Diluted									6,632	6,608	6,670
Stock options and contingently issuable securities									52	13
Income per share -Basic	$ 0.22	$ 0.19	$ 0.30	$ 0.53	$ 0.31	$ 0.23	$ 0.37	$ 0.10	$ 1.24	$ 1.01	$ (0.93)
Income per share - Diluted	$ 0.22	$ 0.18	$ 0.30	$ 0.53	$ 0.31	$ 0.23	$ 0.37	$ 0.10	$ 1.23	$ 1.01	$ (0.93)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) € in Millions	1 Months Ended	12 Months Ended
	Nov. 30, 2022	Oct. 31, 2022 USD ($)	Oct. 31, 2021 USD ($)	Oct. 31, 2020 USD ($)	Nov. 30, 2021 EUR (€)	Oct. 31, 2013 USD ($)	Oct. 31, 2008 USD ($)
Translation of Foreign Currencies
Cumulative foreign currency translation adjustments		$ 21,500,000
Derivative financial instruments:
Notional principal of foreign exchange contracts		102,800,000	$ 94,600,000
(Losses) gains, net of tax, related to cash flow hedges deferred in Accumulated Other Comprehensive Loss		(400,000)
Unrealized gain (loss), net of tax, to be reclassified in next 12 months		900,000
Gain (loss) on hedge ineffectiveness		0	0	$ 0
Property and Equipment
Depreciation and amortization expense		2,300,000	2,500,000	2,700,000
Research and Development Costs
Research and development expenses		3,400,000	3,200,000	3,500,000
Software Development Costs
Capitalized costs		1,100,000	1,100,000	1,000,000.0
Accumulated amortization		23,700,000	22,000,000.0
Capitalized Computer Software, Amortization		1,300,000	1,400,000	1,500,000
Goodwill and Intangible Assets
Intangible assets amortization expense		272,000	273,000	358,000
Expected future amortization expense, 2023		273,000
Expected future amortization expense, 2024		223,000
Expected future amortization expense, 2025		136,000
Expected future amortization expense, 2026		105,000
Expected future amortization expense, 2027		45,000
Goodwill impairment				4,903,000
Impairment of long-lived assets		$ 0	$ 0	$ 0
Income Tax
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%	21.00%	21.00%
Wholly Owned Distributor [Member] \| MICHIGAN
Goodwill and Intangible Assets
Goodwill							$ 200,000
LCM
Goodwill and Intangible Assets
Goodwill						$ 2,200,000
ProCobots
Goodwill and Intangible Assets
Goodwill		$ 0		$ 2,500,000
Minimum \| Technology Equipment [Member]
Property and Equipment
Estimated useful life		3 years
Maximum \| Technology Equipment [Member]
Property and Equipment
Estimated useful life		5 years
Forward Contracts \| Designated as Hedging Instrument
Derivative financial instruments:
Notional principal of foreign exchange contracts \| €					€ 3.0
Realized gain on foreign currency translation adjustments		$ 900,000
Unrealized gain (loss), net of tax, recorded as cumulative translation adjustments in Accumulated Other Comprehensive Loss		$ 400,000
Derivative maturity date		November 2022
Forward Contracts \| Designated as Hedging Instrument \| Subsequent Event [Member]
Derivative financial instruments:
Derivative maturity date	November 2023
Euros \| Designated as Hedging Instrument
Derivative financial instruments:
Notional principal of foreign exchange contracts		$ 18,700,000
Pounds Sterling \| Designated as Hedging Instrument
Derivative financial instruments:
Notional principal of foreign exchange contracts		6,100,000
New Taiwan Dollars [Member] \| Designated as Hedging Instrument
Derivative financial instruments:
Notional principal of foreign exchange contracts		26,000,000.0
New Taiwan Dollars [Member] \| Not Designated as Hedging Instrument
Derivative financial instruments:
Notional principal of foreign exchange contracts		$ 22,000,000.0
Forward Contracts Denominated In Euros Pounds Sterling And New Taiwan [Member] \| Designated as Hedging Instrument
Derivative financial instruments:
Derivative maturity date		November 2022 through October 2023
Forward Contracts Denominated In Euros Pounds Sterling and South African Rand [Member] \| Not Designated as Hedging Instrument
Derivative financial instruments:
Notional principal of foreign exchange contracts		$ 21,000,000.0
Derivative maturity date		November 2022 through February 2023
Hurco Automation Ltd [Member]
Consolidation
Ownership interest		35.00%
Equity investment in affiliate		$ 5,000,000.0	$ 4,800,000

BUSINESS OPERATIONS (Narrative) (Details)	12 Months Ended
BUSINESS OPERATIONS (Narrative) (Details)	Oct. 31, 2022 entity
Minimum
Number of independent agents and distributors products are sold through	200

INVENTORIES (Details) - USD ($) $ in Thousands	Oct. 31, 2022	Oct. 31, 2021
INVENTORIES
Purchased parts and sub-assemblies	$ 43,363	$ 37,527
Work-in-process	16,539	17,559
Finished goods	96,305	93,130
Inventories	$ 156,207	$ 148,216

INVENTORIES - Additional information (Details) - USD ($) $ in Millions	Oct. 31, 2022	Oct. 31, 2021
INVENTORIES
Finished goods inventory consigned to distributors and agents	$ 10.9	$ 11.8

CREDIT AGREEMENTS AND BORROWINGS (Narrative) (Details) € in Millions, ¥ in Millions, $ in Millions, $ in Millions	12 Months Ended
	Oct. 31, 2022 USD ($)	Oct. 31, 2022 EUR (€)	Oct. 31, 2022 CNY (¥)	Oct. 31, 2022 TWD ($)	Mar. 31, 2020 CNY (¥)	Mar. 31, 2020 TWD ($)
Line of Credit Facility [Line Items]
Line of credit amount outstanding	$ 0.0
Line Of Credit Agreement 2018 [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	40.0
Line of credit, maximum borrowing capacity in alternative currencies	$ 20.0
Variable interest rate	0.00%
Minimum working capital requirement	$ 125.0
Minimum tangible net worth requirement	$ 176.5
Line of credit, maturity date	Dec. 31, 2023
Allowable investments in alternative investments	$ 10.0
Borrowings available under credit facility	50.6
Line of Credit, covenant, minimum cash on hand before dividends are paid	10.0
Line of Credit, covenant, maximum annual share repurchase	25.0
Hurco BV [Member] \| Line Of Credit Agreement 2018 [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	$ 20.0
Germany [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity \| €		€ 1.5
Federal funds \| Line Of Credit Agreement 2018 [Member]
Line of Credit Facility [Line Items]
Variable interest rate	0.50%
SOFR \| Line Of Credit Agreement 2018 [Member]
Line of Credit Facility [Line Items]
Variable interest rate	1.00%
Letter of Credit [Member] \| Line Of Credit Agreement 2018 [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	$ 10.0
Stated interest rate	1.00%	1.00%	1.00%	1.00%
Taiwan credit facility [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity				$ 150.0		$ 150.0
China credit facility [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity \| ¥			¥ 32.5		¥ 32.5

FINANCIAL INSTRUMENTS - Fair value hierarchy (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Oct. 31, 2022	Oct. 31, 2021
Fair Value, Inputs, Level 1
Assets
Deferred Compensation	$ 1,996	$ 2,481
Fair Value, Inputs, Level 2
Assets
Derivatives	2,515	905
Liabilities
Derivatives	$ 3,632	$ 467

FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) $ in Millions	Oct. 31, 2022	Oct. 31, 2021
FINANCIAL INSTRUMENTS
Notional amount of contracts	$ 102.8	$ 94.6

INCOME TAXES (Details) - USD ($)	3 Months Ended								12 Months Ended
INCOME TAXES (Details) - USD ($)	Oct. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020	Oct. 31, 2019
Income Tax Contingency [Line Items]
Income Tax Expense (Benefit)	$ 628,000	$ 488,000	$ 893,000	$ 1,643,000	$ 755,000	$ 1,109,000	$ 947,000	$ 546,000	$ 3,652,000	$ 3,357,000	$ (4,556,000)
Effective Income Tax Rate Reconciliation									31.00%	33.00%	42.00%
Unrecognized Tax Benefits	138,000				167,000				$ 138,000	$ 167,000	$ 168,000	$ 193,000
Valuation allowance	1,754,000				1,871,000				1,754,000	1,871,000
Deferred tax assets, net operating loss carryforwards	1,449,000				$ 1,705,000				1,449,000	1,705,000
Deferred tax assets, net operating loss carryforwards	5,800,000								5,800,000
Deferred tax assets, unexpired net operating loss	1,800,000								1,800,000
Tax credits subject to expiration	700,000								700,000
Unrecognized tax benefits, interest accrued	33,000								$ 33,000
Unrecognized Tax Benefits Expiration Term									expire between August 2023 and August 2025
Deferred tax assets for research and development tax credits	700,000								$ 700,000
Tax Credits Expiration Term									expire between years 2023 and 2032
CARES Act [Member]
Income Tax Contingency [Line Items]
Tax benefit for employee retention credit										$ 2,900,000
Income Tax Expense (Benefit)									$ (5,400,000)
Expirations Within Five Years [Member]
Income Tax Contingency [Line Items]
Deferred tax assets, net operating loss carryforwards	3,800,000								$ 3,800,000
Expiration maximum term									5 years
Expirations After Six Years [Member]
Income Tax Contingency [Line Items]
Deferred tax assets, net operating loss carryforwards	$ 200,000								$ 200,000
Expiration minimum term									5 years
Expiration maximum term									20 years

INCOME TAXES (Schedule of Provision for Income Taxes) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Income (loss) before income taxes:
Domestic									$ (232)	$ 4,340	$ (11,681)
Foreign									12,110	5,781	878
Income before income taxes									11,878	10,121	(10,803)
Current:
U.S. taxes									1,092	1,763	(4,932)
Foreign taxes									3,191	1,706	923
Current (benefit) provision for income taxes									4,283	3,469	(4,009)
Deferred:
U.S. taxes									(933)	66	(256)
Foreign taxes									302	(178)	(291)
Deferred Income Tax Expense (Benefit), Total									(631)	(112)	(547)
Income Tax Expense (Benefit), Total	$ 628	$ 488	$ 893	$ 1,643	$ 755	$ 1,109	$ 947	$ 546	$ 3,652	$ 3,357	$ (4,556)

INCOME TAXES (Schedule of Comparison of Income Tax Expense) (Details)	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Tax rates:
U.S. statutory rate	21.00%	21.00%	21.00%
Effect of tax rate of international jurisdictions different than U.S. statutory rates	4.00%	4.00%	(2.00%)
Valuation allowance	3.00%	0.00%	0.00%
State taxes	1.00%	1.00%	2.00%
Tax credits	1.00%	0.00%	1.00%
US benefit of foreign intangible income	(3.00%)	(1.00%)	0.00%
Impact of CARES act	0.00%	5.00%	22.00%
Other	4.00%	3.00%	(2.00%)
Effective Income Tax Rate Reconciliation, Percent, Total	31.00%	33.00%	42.00%

INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands	Oct. 31, 2022	Oct. 31, 2021
Deferred Tax Assets:
Accrued inventory reserves	$ 1,329	$ 973
Accrued warranty expenses	270	308
Compensation related expenses	2,495	2,444
Net derivative gain	98	49
Unrealized exchange gain/loss	117	0
Other accrued expenses	318	282
Net operating loss carryforwards	1,449	1,705
Other credit carryforwards	703	839
Operating lease liabilities	2,023	2,570
Goodwill and intangibles	831	967
Other	171	215
Deferred tax assets, gross	9,804	10,352
Less: Valuation allowance - net operating loss and other credit carryforwards	1,754	1,871
Deferred tax assets	8,050	8,481
Deferred Tax Liabilities:
Net derivative loss	0	(15)
Property and equipment and capitalized software development costs	(2,394)	(2,533)
Operating lease - right of use assets	(1,960)	(2,495)
Other	(321)	(352)
Net deferred tax assets	$ 3,375	$ 3,086

INCOME TAXES (Schedule of Income Tax Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
INCOME TAXES
Unrecognized Tax Benefits, Beginning Balance	$ 167	$ 168	$ 193
Additions based on tax positions related to the current year	21	74	9
Additions (reductions) related to prior year tax positions	0	0	(2)
Reductions due to statute expiration	(50)	(75)	(32)
Unrecognized Tax Benefits, Ending Balance	$ 138	$ 167	$ 168

INCOME TAXES (Summary of Open Tax Years) (Details)

12 Months Ended

Oct. 31, 2022

United States federal [Member]

Income Tax Contingency [Line Items]

Open tax years

Fiscal year 2014 through the current period

Germany [Member]

Income Tax Contingency [Line Items]

Open tax years

Fiscal year 2017 through the current period

^[1]

United Kingdom [Member]

Income Tax Contingency [Line Items]

Open tax years

Fiscal year 2015 through the current period

Taiwan [Member]

Income Tax Contingency [Line Items]

Open tax years

Fiscal year 2017 through the current period

[1]	Includes federal as well as state, provincial or similar local jurisdictions, as applicable.

EMPLOYEE BENEFITS (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
EMPLOYEE BENEFITS
Contributions to defined contribution plans	$ 1.3	$ 1.2	$ 1.3

STOCK-BASED COMPENSATION (Summary of Stock Option Activity and Related Information) (Details) - Employee Stock Option - $ / shares	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Stock Options
Outstanding at beginning of period	16,996	33,307	37,045
Options exercised	(5,437)	(16,311)	(3,738)
Outstanding at end of period	11,559	16,996	33,307
Weighted Average Exercise Price
Outstanding at beginning of period	$ 22.71	$ 22.09	$ 21.69
Options exercised	21.45	21.45	18.13
Outstanding at end of period	$ 23.30	$ 22.71	$ 22.09

STOCK-BASED COMPENSATION (Schedule of Options Outstanding and Exercisable) (Details) - $ 23.30 [Member]	12 Months Ended
	Oct. 31, 2022 shares
Outstanding and Exercisable
Shares Under Option	11,559
Weighted Average Exercise Price Per Share	23.30
Weighted Average Remaining Contractual Life in Years	1 month 13 days

STOCK-BASED COMPENSATION (Reconciliation of Restricted Stock Activity and Related Information) (Details)	12 Months Ended
	Oct. 31, 2022 $ / shares shares
Number of Shares
Unvested at October 31, 2021 \| shares	262,556
Restricted stock granted \| shares	112,614
Shares or units vested \| shares	(33,761)
Shares or units cancelled \| shares	(61,500)
Shares or units withheld \| shares	(6,806)
Unvested at January 31, 2022 \| shares	273,103
Weighted Average Grant Date Fair Value
Unvested at October 31, 2021 \| $ / shares	$ 34.84
Shares or units granted \| $ / shares	32.05
Shares or units vested \| $ / shares	34.90
Shares or units cancelled \| $ / shares	38.41
Shares or units withheld \| $ / shares	34.03
Unvested at January 31, 2022 \| $ / shares	$ 32.90

STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($)										12 Months Ended
	Mar. 10, 2022	Jan. 04, 2022	Nov. 10, 2021	Mar. 11, 2021	Jan. 05, 2021	Nov. 12, 2020	Mar. 12, 2020	Jan. 02, 2020	Nov. 13, 2019	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020	Mar. 10, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total number of shares of common stock that may be issued as awards under 2016 Plan													856,048
Unrecognized Stock-based compensation expense										$ 3,200,000
Restricted stock granted										112,614
Grant date fair value per share										$ 32.05
Grant date fair value of restricted stock										$ 32.90	$ 34.84
Total intrinsic value of stock options exercised										$ 9,000	$ 179,000	$ 44,000
Total intrinsic value of outstanding stock options vested and expected to vest and intrinsic value of options outstanding and exercisable										$ 0
2016 Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period of options granted										10 years
Number of additional shares authorized	850,000
Stock-based compensation expense										$ 2,700,000	$ 2,800,000	$ 2,100,000
2008 Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant													386,048
Time Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted	13,914			9,708
Grant date fair value per share	$ 34.49			$ 37.06
Vesting period	1 year			1 year
Percentage of incentive compensation arrangement		25.00%			25.00%			25.00%
Time Based \| 2016 Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted		23,442	8,234		23,164	11,531	17,780	20,837	8,052
Grant date fair value per share		$ 30.39	$ 33.99		$ 28.60	$ 29.30	$ 23.62	$ 37.79	$ 35.75
Vesting period		3 years	3 years		3 years	3 years	1 year	3 years	3 years
Time Based \| Performance Shares TSR [Member] \| 2016 Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period					3 years
Performance Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted								28,979
Grant date fair value per share								$ 37.79
Vesting period		3 years			3 years			3 years
Percentage of incentive compensation arrangement		75.00%			75.00%			75.00%
Performance Based \| Performance Shares TSR [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of incentive compensation arrangement		40.00%			40.00%			40.00%
Performance Based \| Performance Shares TSR [Member] \| 2016 Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted		34,203			39,199			26,918
Grant date fair value per share		$ 33.33			$ 27.04			$ 46.81
Vesting period		3 years						3 years
Performance Based \| Performance Shares TSR [Member] \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target number of shares to be earned		200.00%			200.00%			200.00%
Performance Based \| Performance Shares TSR [Member] \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target number of shares to be earned		50.00%			50.00%			50.00%
Performance Based \| Performance Shares ROIC [Member] \| 2016 Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted		32,821			32,430			29,174
Grant date fair value per share		$ 30.39			$ 28.60			$ 37.79
Vesting period		3 years			3 years			3 years
Percentage of incentive compensation arrangement		35.00%			35.00%			35.00%
Performance Based \| Performance Shares ROIC [Member] \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target number of shares to be earned		200.00%			200.00%			200.00%
Performance Based \| Performance Shares ROIC [Member] \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target number of shares to be earned		50.00%			50.00%			50.00%

RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($)	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Related Party Transaction [Line Items]
Accounts Payable, Related Parties, Current	$ 1,924,000	$ 2,553,000
Hurco Automation Ltd [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	10,500,000	8,700,000	$ 6,200,000
Revenue from Related Parties	321,000	262,000	$ 265,000
Accounts Payable, Related Parties, Current	1,900,000	2,600,000
Accounts Receivable, Related Parties, Current	$ 34,000	74,000
Hurco Automation Ltd [Member]
Related Party Transaction [Line Items]
Equity Method Investment, Ownership Percentage	35.00%
Equity Method Investments	$ 5,000,000.0	$ 4,800,000

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 946
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07.1(c))
-URI https://asc.fasb.org/extlink&oid=120401555&loc=SL114874292-224272

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(C))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.1(e))
-URI https://asc.fasb.org/extlink&oid=126953954&loc=SL114868664-224227

+ Details

RELATED PARTY TRANSACTIONS (Schedule of unaudited financial information for HAL's operations and financial conditions ) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Related Party Transaction [Line Items]
Gross Profit	$ 17,570	$ 14,399	$ 15,602	$ 16,907	$ 16,934	$ 12,974	$ 14,794	$ 11,547	$ 64,478	$ 56,249	$ 36,457
Current Assets	268,069				289,870				268,069	289,870
Current Liabilities	73,336				81,170				73,336	81,170
Non-current Liabilities	10,257				13,346				10,257	13,346
Hurco Automation Ltd [Member]
Related Party Transaction [Line Items]
Net Sales									14,171	12,361	10,096
Gross Profit									2,397	2,011	1,418
Operating Income									1,053	216	160
Net Income									2,528	802	265
Current Assets	15,018				14,695				15,018	14,695	12,436
Non-current Assets	6,430				6,850				6,430	6,850	6,152
Current Liabilities	4,998				5,339				4,998	5,339	3,708
Non-current Liabilities	$ 1,619				$ 1,850				$ 1,619	$ 1,850	$ 1,564

GUARANTEES AND PRODUCT WARRANTIES - Reconciliation of the changes in warranty reserve (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
GUARANTEES AND PRODUCT WARRANTIES
Balance, beginning of period	$ 1,516	$ 1,200	$ 1,760
Provision for warranties during the period	2,915	2,948	2,075
Charges to the reserve	(2,877)	(2,643)	(2,669)
Impact of foreign currency translation	(128)	11	34
Balance, end of period	$ 1,426	$ 1,516	$ 1,200

GUARANTEES AND PRODUCT WARRANTIES - Additional Information (Details) $ in Millions	12 Months Ended
	Oct. 31, 2022 USD ($) item
GUARANTEES AND PRODUCT WARRANTIES
Number Of Guarantees \| item	9
Guarantor Obligations, Maximum Exposure, Undiscounted \| $	$ 0.7
Term of Product Warranty	1 year

LEASES (Details) - USD ($) $ in Millions	12 Months Ended
LEASES (Details) - USD ($) $ in Millions	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
LEASES
Lease, Practical Expedient, Use of Hindsight [true false]	false
Operating lease expense	$ 5.1	$ 5.2	$ 5.0
Weighted-average remaining term	3 years 1 month 6 days
Weighted-average discount rate	2.10%
Minimum
LEASES
Lease term (in years)	2 years
Maximum
LEASES
Lease term (in years)	5 years

LEASES - Supplemental cash flow information (Details) $ in Thousands	12 Months Ended
	Oct. 31, 2022 USD ($)
LEASES
Cash paid for amounts included in the measurement of lease liabilities	$ 4,457
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 3,577

LEASES - Maturities of undiscounted cash flows of lease commitments (Details) $ in Thousands	Oct. 31, 2022 USD ($)
LEASES
2023	$ 4,132
2024	2,418
2025	1,059
2026	552
2027	434
2027 and thereafter	497
Total	9,092
Less: Imputed interest	(305)
Present value of operating lease liabilities	$ 8,787

QUARTERLY FINANCIAL INFORMATION (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
QUARTERLY FINANCIAL INFORMATION (Unaudited)
Sales and service fees	$ 63,462	$ 57,640	$ 62,825	$ 66,887	$ 68,982	$ 54,178	$ 57,920	$ 54,115	$ 250,814	$ 235,195	$ 170,627
Gross profit	$ 17,570	$ 14,399	$ 15,602	$ 16,907	$ 16,934	$ 12,974	$ 14,794	$ 11,547	64,478	56,249	36,457
Gross profit margin	28.00%	25.00%	25.00%	25.00%	25.00%	24.00%	26.00%	21.00%
Selling, general and administrative expenses	$ 14,872	$ 12,647	$ 12,515	$ 11,697	$ 13,829	$ 10,331	$ 11,273	$ 10,568	51,731	46,001	41,416
Goodwill impairment											4,903
Operating income (loss)	2,698	1,752	3,087	5,210	3,105	2,643	3,521	979	12,747	10,248	(9,862)
Provision (benefit) for income taxes	628	488	893	1,643	755	1,109	947	546	3,652	3,357	(4,556)
Net income (loss)	$ 1,424	$ 1,238	$ 2,029	$ 3,535	$ 2,096	$ 1,568	$ 2,437	$ 663	$ 8,226	$ 6,764	$ (6,247)
Income (loss) per common share - basic (in dollars per share)	$ 0.22	$ 0.19	$ 0.30	$ 0.53	$ 0.31	$ 0.23	$ 0.37	$ 0.10	$ 1.24	$ 1.01	$ (0.93)
Income (loss) per common share - diluted (in dollars per share)	$ 0.22	$ 0.18	$ 0.30	$ 0.53	$ 0.31	$ 0.23	$ 0.37	$ 0.10	$ 1.23	$ 1.01	$ (0.93)

SEGMENT INFORMATION (Schedule of Net Sales and Service Fees by Product Category) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Revenue from External Customer [Line Items]
Net Sales and Service Fees	$ 63,462	$ 57,640	$ 62,825	$ 66,887	$ 68,982	$ 54,178	$ 57,920	$ 54,115	$ 250,814	$ 235,195	$ 170,627
Computerized Machine Tools
Revenue from External Customer [Line Items]
Net Sales and Service Fees									211,804	198,602	139,577
Computer Control Systems and Software
Revenue from External Customer [Line Items]
Net Sales and Service Fees									2,634	2,528	1,699
Service Parts
Revenue from External Customer [Line Items]
Net Sales and Service Fees									28,219	26,425	22,484
Service Fees
Revenue from External Customer [Line Items]
Net Sales and Service Fees									$ 8,157	$ 7,640	$ 6,867

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

SEGMENT INFORMATION (Schedule of Revenues by Geographic Area) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 63,462	$ 57,640	$ 62,825	$ 66,887	$ 68,982	$ 54,178	$ 57,920	$ 54,115	$ 250,814	$ 235,195	$ 170,627
United States of America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									92,050	83,218	64,500
Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									3,996	2,636	1,621
Central & South Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									1,279	989	1,543
Total Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									97,325	86,843	67,664
Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									42,026	37,584	24,993
United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									26,629	30,314	19,679
Italy [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									16,499	12,718	8,599
France [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									14,291	14,252	10,797
Other Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									24,437	21,467	14,034
Total Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									123,882	116,335	78,102
China
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									10,293	14,284	14,225
Other Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									18,553	16,047	10,048
Total Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									28,846	30,331	24,273
Foreign [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									$ 761	$ 1,686	$ 588

SEGMENT INFORMATION (Schedule of Long-Lived Tangible Assets and net assets, Net by Geographic Area) (Details) - USD ($) $ in Thousands	Oct. 31, 2022	Oct. 31, 2021	Oct. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	$ 10,569	$ 12,744	$ 13,885
Net Assets	222,644	238,419	231,148
United States of America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	5,628	6,104	6,826
Foreign [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	4,941	6,640	7,059
Total Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	87,476	84,385	83,214
Total Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	67,797	80,769	77,840
Total Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	$ 67,371	$ 73,265	$ 70,094

SEGMENT INFORMATION (Narrative) (Details)	12 Months Ended
SEGMENT INFORMATION (Narrative) (Details)	Oct. 31, 2022 segment entity
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of operating segments \| segment	1
Minimum
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of independent agents and distributors products are sold through \| entity	200
Geographic Concentration Risk [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, geographic	In fiscal year 2022, approximately 62% of our revenues were from customers located outside of the Americas,
Customer Concentration Risk [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, customer	no distributor accounted for more than 5% of our sales and service fees
Revenue from Rights Concentration Risk [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, customer	no single end-user of our products accounted for more than 5% of our total sales and service fees.
Outside the Americas [Member] \| Geographic Concentration Risk [Member] \| Revenue Benchmark [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage	62.00%