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Q1 2005 Earnings

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934


Date of report (Date of earliest event reported) February 16, 2005


Hurco Companies, Inc.
(Exact Name of Registrant as Specified in Its Charter
     
Indiana
(State or Other Jurisdiction of Incorporation
     
0-9143
  
35-1150732
(Commission File Number)
  
(I.R.S. Employer Identification Number)
     
One Technology Way
    
Indianapolis, Indiana
  
46268
(Address of principal executive offices)
  
(Zip code)
     
(317) 293-5309
(Registrant’s Telephone Number, Including Area Code
     
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02. Results of Operation and Financial Condition

On February 16, 2005, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the first quarter ended January 31, 2005. The Registrant's earnings release for the period is attached as Exhibit 99 and the information set forth therein is incorporated herein by reference and constitutes a part of this report. The attached Exhibit is furnished pursuant to Item 2.02 of Form 8-K.

Item 9.01 Financial Statements and Exhibits.

 
99
Press Release dated February 16, 2005
 







SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Dated: February 16, 2005
   
 
HURCO COMPANIES, INC
   
 
By: /s/ Stephen J. Alesia
 
Vice President and
 
Chief Financial Officer
 





EXHIBIT INDEX

Exhibit 99 Press Release of Hurco Companies, Inc. dated February 16, 2005

 
Q1 2005 Earnings
EXHIBIT 99
FOR IMMEDIATE RELEASE
WEDNESDAY, FEBRUARY 16, 2005

HURCO REPORTS RECORD SALES AND OPERATING PROFIT IN FIRST QUARTER 2005 RESULTS

INDIANAPOLIS, INDIANA, — February 16, 2005, Hurco Companies, Inc. (NASDAQ: HURC) today reported net income of $3,030,000 or $.48 per share, for its first fiscal quarter, which ended January 31, 2005, compared to a $669,000, or $.12 per share, for the 2004 corresponding period.
The Company attributed its improved results to increased sales of computerized machine tools and to a lesser extent, the favorable effect of stronger European currencies when translating foreign sales into U.S. Dollars for financial reporting purposes.
Sales and service fees for the first quarter of fiscal 2005 were the highest in the company’s 26-year history and totaled $30,246,000, an increase of $7,528,000, or 33%, from the amount recorded in the prior year due to an overall 31% increase in unit sales of computerized machine tools and to the favorable effects of foreign currency translation. Approximately 66% of Hurco’s sales during the 2005 period were made outside the United States and were denominated in local currencies (primarily the Euro and Pound Sterling). As a result, approximately $1,474,000, or 20%, of the increase was attributable to currency translation.
New order bookings for the first quarter of fiscal 2005 were $26,884,000, an increase of $3,337,000, or 14%, over the amount recorded in the first fiscal quarter of 2004 due to increased orders in the United States and the favorable effect of stronger European currencies. Approximately $1,100,000, or 33%, of the increase was attributable to currency translation effects. Backlog was $9,629,000 at January 31, 2005, compared to $12,746,000 at October 31, 2004.
Gross margin for the first quarter of 2005 was 32% compared to 29% for the prior year period. Selling, general and administrative expenses were $6,187,000, an increase of approximately $1,260,000, or 26%, from the prior year period, due to currency translation effects and increased selling and marketing expenses.
Operating profit for the first quarter of fiscal 2005 was a record for Hurco and totaled $3,553,000, or 12% of sales and service fees, compared to $1,604,000, or 7% of sales and service fees in the prior year.
Total debt was $4,425,000 at January 31, 2005, as compared to $4,600,000 at October 31, 2004, and was 9% of total debt and shareholders’ equity, which aggregated $48,527,000. As of January 31, 2005, the Company had unutilized credit facilities of $11,353,000 available for direct borrowing or commercial letters of credit.
Michael Doar, Chief Executive Officer, stated, “I am pleased with the first quarter results and that our operating profit as a percentage of sales surpassed our corporate goal of 10%. Our sales and services fees in the first quarter of fiscal 2005 included approximately $800,000 from our new lathe product line. We are continuing to invest in research and development, as new products introductions have been a major contributor to our success the past two years.”
Hurco Companies, Inc. is an industrial technology company that designs and produces interactive computer controls, software and computerized machine tools for the worldwide metal cutting and metal forming industry. The end market for the Company's products consists primarily of independent job shops and short-run manufacturing operations within large corporations in industries such as the aerospace, defense, medical equipment, energy, transportation and computer equipment. The Company is based in Indianapolis, Indiana, and has sales, application engineering and service subsidiaries in High Wycombe, England; Munich, Germany; Paris, France; Milan, Italy; Shanghai, China and Singapore, along with manufacturing operations in Taiwan. Products are sold through independent agents and distributors in the United States, Europe and Asia. The Company also has direct sales forces in the United Kingdom, Germany, France, Italy, and Asia.
Web Site: www.hurco.com

This news release contains forward looking statements which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, changes in general economic and business conditions that affect demand for computerized machine systems, computer numerical control systems and software products, changes in manufacturing markets, innovations by competitors, quality and delivery performance by our contract manufacturers and governmental actions and initiatives including import and export restrictions and tariffs.
 
 

Hurco Companies, Inc.
  
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
  
(In thousands, except per-share data)
  
           
   
Three Months Ended January 31,
  
   
2005
  
2004
  
   
(unaudited)
 
Sales and service fees
  
$
30,246
  
$
22,718
  
               
Cost of sales and service
    
20,506
   
16,187
 
Gross profit
    
9,740
   
6,531
 
               
Selling, general and administrative expenses
    
6,187
   
4,927
 
Operating income
    
3,553
   
1,604
 
               
Interest expense
    
83
   
144
 
               
Variable options expense
    
-
   
255
 
               
Other expense, net
    
71
   
170
 
               
Income before taxes
    
3,399
   
1,035
 
               
Provision for income taxes
    
369
   
366
 
               
Net income
 
$
3,030
  
$
669
  
               
Earnings per common share
              
               
Basic
  
$
0.50
  
$
0.12
  
Diluted
  
$
0.48
  
$
0.12
  
               
Weighted average common shares outstanding
              
Basic
    
6,071
   
5,588
 
Diluted
    
6,270
   
5,753
 
               
OTHER CONSOLIDATED FINANCIAL DATA
    
Three Months Ended January 31,
  
Operating Data:
    
2005
    
2004
  
(unaudited)
             
Gross margin
    
32.2
%
  
28.7
%
               
SG&A expense as a percentage of sales
    
20.5
%
  
21.7
%
               
Operating income as a percentage of sales
    
11.7
%
  
7.1
%
               
Pre-tax income as a percentage of sales
   
11.2
%
  
4.6
%
               
Depreciation
    
317
   
331
 
               
Capital expenditures
   
622
   
471
 
               
Balance Sheet Data:
    
1/31/2005
    
10/31/2004
  
               
Working capital
  
$
31,790
  
$
26,664
  
               
Days sales outstanding
    
38
   
38
 
               
Inventory turns
    
2.4
    
2.3
  
               
Capitalization
              
Total Debt
  
$
4,425
  
$
4,600
  
Shareholders' Equity
    
44,102
   
38,455
 
Total
  
$
48,527
  
$
43,055
  

 

Hurco Companies, Inc.
  
CONDENSED CONSOLIDATED BALANCE SHEET
  
(In thousands, except per-share data)
  
           
           
   
January 31,
  
October 31,
  
 
  
2005
  
2004
  
   
(unaudited)
 
(audited)
 
ASSETS
          
           
Cash and cash equivalents
  
$
11,303
  
$
8,249
  
Cash - restricted
    
-
   
277
 
Accounts receivable
    
16,651
   
17,337
 
Inventories
    
31,394
   
28,937
 
Other
    
3,232
   
1,672
 
Total current assets
    
62,580
   
56,472
 
               
Property and equipment:
              
Land
    
761
   
761
 
Building
    
7,205
   
7,205
 
Machinery and equipment
    
12,645
   
12,106
 
Leasehold improvements
    
700
   
676
 
     
21,311
   
20,748
 
Less accumulated depreciation and amortization
    
(12,772
)
  
(12,512
)
     
8,539
   
8,236
 
               
Software development costs, less amortization
    
2,979
   
2,920
 
Investments and other assets
    
5,878
   
5,818
 
   
$
79,976
  
$
73,446
  
               
LIABILITIES AND SHAREHOLDER'S EQUITY
              
Current liabilities:
              
Accounts payable
  
$
19,249
  
$
18,361
  
Accrued expenses
    
11,541
   
11,447
 
Bank debt
    
-
   
-
 
Current portion of long-term debt
    
319
   
317
 
Total current liabilities
    
31,109
   
30,125
 
               
Non-current liabilities:
              
Long-term debt
    
4,106
   
4,283
 
Defered credits and other obligations
    
659
   
583
 
Total liabilities
    
35,874
   
34,991
 
               
Shareholders' equity:
              
Preferred stock: no par value per share; 1,000,000 shares
              
authorized; no shares issued
              
Common stock: no par value; $.10 stated value per share;
              
12,500,000 shares authorized; and 6,177,714 and
              
6,019,594 shares issued, respectively
    
618
   
602
 
Additional paid-in capital
    
47,425
   
46,778
 
Accumulated deficit
    
(412
)
  
(3,442
)
Accumulated other comprehensive income
    
(3,529
)
  
(5,483
)
Total shareholders' equity
    
44,102
   
38,455
 
   
$
79,976
  
$
73,446