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) June 4, 2010
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Hurco
Companies, Inc.
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(Exact
Name of Registrant as Specified in Its Charter
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Indiana
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(State
or Other Jurisdiction of Incorporation
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0-9143
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35-1150732
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(Commission
File Number)
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(I.R.S.
Employer Identification Number)
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One
Technology Way
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Indianapolis,
Indiana
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46268
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(Address
of principal executive offices)
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(Zip
code)
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(317)
293-5309
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(Registrant’s
Telephone Number, Including Area Code
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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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))
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Item
2.02.
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Results
of Operation and Financial
Condition
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On June 4, 2010, Hurco Companies, Inc.
(the "Registrant") reported its results of operations for the second quarter
ended April 30, 2010. 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.
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Item
9.01
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Financial
Statements and Exhibits.
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99
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Press
Release dated June 4, 2010
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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.
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Dated: June
4, 2010
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HURCO
COMPANIES, INC
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By: /s/John G.
Oblazney
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John
G. Oblazney,
Vice
President and
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Chief
Financial Officer
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EXHIBIT
INDEX
Exhibit
99 Press
Release of Hurco Companies, Inc. dated June 4, 2010
FOR
IMMEDIATE RELEASE
FRIDAY,
JUNE 4, 2010
HURCO
REPORTS SECOND QUARTER RESULTS
INDIANAPOLIS, INDIANA, — June 4,
2010, Hurco Companies, Inc., (Nasdaq, Global Select Market: HURC) today
reported a net loss of $1,573,000, or $(0.24) per diluted share, for its second
quarter ended April 30, 2010, compared to a net loss of $281,000, or $(0.04) per
diluted share, for the corresponding period in fiscal 2009. The
results for the second quarter of 2009 included $2,202,000 of net realized gains
on hedge contracts that were closed before maturity due to forecasted reductions
in production and sales; however, there were no such gains in the second quarter
of fiscal 2010. For the first six months of fiscal 2010, Hurco
reported a net loss of $3,409,000, or $(0.53) per diluted share, compared to net
income of $73,000, or $0.01 per diluted share, reported for the corresponding
period in fiscal 2009.
Sales and
service fees for the second quarter of fiscal 2010 totaled $24,088,000, an
increase of $3,599,000, or 18%, from the second quarter of fiscal
2009. Approximately $1,069,000 of the year-over-year increase, or 5%
of second quarter 2009 sales, reflects the effect of a weaker U.S. Dollar in
2010 when translating foreign sales to U.S. Dollars for financial reporting
purposes. Sales and service fees for the six months ended April 30,
2010, totaled $44,704,000, a decrease of $4,092,000, or 8%, from the
corresponding period in 2009. The impact of currency translation on
the year-over-year sales comparison for the first six months of fiscal 2010 was
a favorable impact of approximately $2,360,000, or 5% of year to date sales for
the corresponding period in fiscal 2009.
The
following table sets forth net sales and service fees by geographic region for
the second quarter and first half of fiscal 2010 and 2009,
respectively:
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Net Sales and Service Fees by
Geographic Region
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Three Months
Ended
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Six Months
Ended
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April 30,
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April 30,
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%
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%
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2010
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2009
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Change
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2010
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2009
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Change
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North
America
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$ | 5,804 | $ | 6,171 | -6 | % | $ | 11,905 | $ | 15,808 | -25 | % | ||||||||||||
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Europe
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15,342 | 13,042 | 18 | % | 27,358 | 31,102 | -12 | % | ||||||||||||||||
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Asia
Pacific
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2,942 | 1,276 | 131 | % | 5,441 | 1,886 | 188 | % | ||||||||||||||||
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Total
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$ | 24,088 | $ | 20,489 | 18 | % | $ | 44,704 | $ | 48,796 | -8 | % | ||||||||||||
The
second quarter increase in sales was primarily driven by increased demand for
vertical machining centers in Europe and Asia; however, competitive pricing
pressures remain in all sales regions. Compared to the second quarter
of fiscal 2009, unit shipments for the second quarter of fiscal 2010 decreased
in the North America by 28%, while unit shipments in Europe increased by 11% and
increased in the Asia Pacific sales region by 200%. The
increased sales in the Asia Pacific region during the second quarter of fiscal
2010, was primarily the result of increased demand in Singapore, South Korea,
India, and China. The decrease in sales for the first half of fiscal
2010 was primarily driven by lower demand, particularly for higher-priced, high
performance vertical machining centers (which are principally marketed in the
European sales region), and continued pricing pressures
globally. Unit shipments for the first half of fiscal 2010 decreased
in North America by 45% and decreased in Europe by 12%, while unit shipments
increased in the Asia Pacific sales region by 308% compared to the same period
in fiscal 2009.
New order
bookings in the second quarter of fiscal 2010 were $30,589,000, an increase of
$12,454,000, or 69%, compared to the prior year period. Orders in the
North America, Europe and Asia Pacific regions increased $3,311,000, or 66%,
$6,258,000, or 52%, and $2,885,000, or 293%, respectively, reversing a
decreasing order trend that began at the onset of the global economic
downturn. For the first half of fiscal 2010, new orders totaled
$51,196,000, an increase of $8,545,000, or 20%, from the corresponding period in
2009. Of that increase, North America, Europe and Asia Pacific orders
increased $501,000, or 4%, $2,692,000, or 10%, and $5,352,000, or 338%,
respectively. The impact of currency translation on new orders booked
in the second quarter and first half of 2010 was consistent with the impact on
sales.
Hurco’s
gross profit for the second quarter of fiscal 2010 was 19%, compared to 26% for
the same period in 2009. The decrease in profit as a percentage of
sales was due to the impact of fixed costs on lower sales and production volume
and a higher mix of sales from the Asia Pacific region where competitive pricing
pressures remain strong. Selling, general and administrative expenses
were $7,230,000, a decrease of $288,000, or 4%, from the corresponding period in
2009, reflecting the benefit of cost reduction initiatives, partially offset by
increased commissions and the unfavorable effect of a weaker U.S. Dollar in 2010
when translating foreign operating expenses for financial reporting
purposes.
The
decrease in other income of $1,884,000 for the second quarter of fiscal 2010
compared to the same period in fiscal 2009 was primarily due to a reduction of
$2,202,000 in net realized gains on hedge contracts closed before maturity
during the second quarter of fiscal 2009 as a result of forecasted reductions in
production and sales.
Cash
increased by $7,236,000 from October 31, 2009, to $36,018,000 at April 30, 2010,
primarily due to a reduction in inventory. Inventory decreased during
the first half of fiscal 2010 by $9,614,000, of which $1,835,000, or 3%, related
to the impact of a weaker U.S. Dollar when translating inventory values for
financial reporting purposes. Production levels in the third quarter
of fiscal 2010 have been adjusted back up to align with current order rates to
meet customer requirements.
Michael
Doar, Chief Executive Officer, said, “We are encouraged that orders for the
second quarter of fiscal 2010 were up 48% compared to the first quarter of this
year and were higher than any quarter since the economic recession began;
however sales in Europe may be impacted due to continuing weak economic
conditions.”
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
aerospace, defense, medical equipment, energy, transportation and computer
equipment. The Company is based in Indianapolis, Indiana, with manufacturing
operations in Taiwan and China, and sells its products through direct and
indirect sales forces throughout North America, Europe, and Asia. The Company
has sales, application engineering support and service subsidiaries in Canada,
China, England, France, Germany, India, Italy, Poland, Singapore, South Africa,
Spain, and the United States of America. 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, the impact of the
current global economic recession, including disruption in credit markets, other
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, our
ability to protect our intellectual property, fluctuations in exchange rates,
fluctuations in prices of raw materials, changes in market demands, quality and
delivery performance by our contract manufacturers and governmental actions and
initiatives including import and export restrictions and tariffs.
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Contact:
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John
Oblazney
Vice
President & Chief Financial Officer
317-293-5309
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Hurco Companies,
Inc.
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CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
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(In thousands, except per-share
data)
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Three Months
Ended
April 30,
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Six Months
Ended
April 30,
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2010
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2009
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2010
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2009
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(unaudited)
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(unaudited)
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Sales and service
fees
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$ | 24,088 | $ | 20,489 | $ | 44,704 | $ | 48,796 | ||||||||
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Cost of sales and
service
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19,411 | 15,269 | 36,047 | 35,034 | ||||||||||||
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Gross
profit
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4,677 | 5,220 | 8,657 | 13,762 | ||||||||||||
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Selling, general and
administrative expenses
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7,230 | 7,518 | 13,763 | 15,547 | ||||||||||||
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Operating
loss
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(2,553 | ) | (2,298 | ) | (5,106 | ) | (1,785 | ) | ||||||||
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Interest
expense
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8 | 4 | 22 | 27 | ||||||||||||
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Interest
income
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5 | 45 | 25 | 149 | ||||||||||||
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Investment
income
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3 | 1 | 8 | 29 | ||||||||||||
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Other expense (income),
net
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116 | (1,768 | ) | 393 | (1,695 | ) | ||||||||||
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Income (loss) before
taxes
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(2,669 | ) | (488 | ) | (5,488 | ) | 61 | |||||||||
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Benefit for income
taxes
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(1,096 | ) | (207 | ) | (2,079 | ) | (12 | ) | ||||||||
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Net income
(loss)
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$ | (1,573 | ) | $ | (281 | ) | $ | (3,409 | ) | $ | 73 | |||||
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Earnings (losses) per common
share
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Basic
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$ | (0.24 | ) | $ | (0.04 | ) | $ | (0.53 | ) | $ | 0.01 | |||||
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Diluted
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$ | (0.24 | ) | $ | (0.04 | ) | $ | (0.53 | ) | $ | 0.01 | |||||
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Weighted average common shares
outstanding
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Basic
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6,441 | 6,421 | 6,441 | 6,421 | ||||||||||||
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Diluted
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6,441 | 6,421 | 6,441 | 6,430 | ||||||||||||
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OTHER CONSOLIDATED FINANCIAL
DATA
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Three Months
Ended
April 30,
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Six Months
Ended
April 30,
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Operating
Data:
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2010
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2009
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2010
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2009
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(unaudited)
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(unaudited)
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Gross
margin
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19.4 | % | 25.5 | % | 19.4 | % | 28.2 | % | ||||||||
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SG&A expense as a percentage
of sales
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30.0 | % | 36.7 | % | 30.8 | % | 31.9 | % | ||||||||
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Operating loss as a percentage of
sales
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-10.6 | % | -11.2 | % | -11.4 | % | -3.7 | % | ||||||||
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Pre-tax loss as a percentage of
sales
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-11.1 | % | -2.4 | % | -12.3 | % | 0.1 | % | ||||||||
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Effective tax
rate
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41.1 | % | 42.4 | % | 37.9 | % | -19.7 | % | ||||||||
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Depreciation
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1,000 | 814 | 1,833 | 1,605 | ||||||||||||
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Capital
expenditures
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269 | 968 | 744 | 2,319 | ||||||||||||
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Balance Sheet
Data:
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4/30/2010
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10/31/2009
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(unaudited)
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Working capital (excluding
cash)
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$ | 58,874 | $ | 68,675 | ||||||||||||
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Days sales
outstanding
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33 | 39 | ||||||||||||||
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Inventory
turns
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1.3 | 1.0 | ||||||||||||||
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Capitalization
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Total debt
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$ | - | $ | - | ||||||||||||
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Shareholders'
equity
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116,339 | 120,376 | ||||||||||||||
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Total
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$ | 116,339 | $ | 120,376 | ||||||||||||
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Hurco Companies,
Inc.
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CONDENSED CONSOLIDATED BALANCE
SHEET
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(In thousands, except share and
per-share data)
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April 30,
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October 31,
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2010
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2009
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(unaudited)
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(audited)
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ASSETS
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Current
assets:
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Cash and cash
equivalents
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$ | 36,018 | $ | 28,782 | ||||
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Accounts receivable,
net
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13,697 | 13,988 | ||||||
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Refundable
taxes
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5,516 | 7,121 | ||||||
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Inventories,
net
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50,667 | 60,281 | ||||||
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Deferred income taxes,
net
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2,263 | 2,670 | ||||||
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Derivative
assets
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1,372 | 376 | ||||||
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Other
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7,353 | 5,046 | ||||||
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Total current
assets
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116,886 | 118,264 | ||||||
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Property and
equipment:
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Land
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782 | 782 | ||||||
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Building
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7,116 | 7,116 | ||||||
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Machinery and
equipment
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15,136 | 14,995 | ||||||
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Leasehold
improvements
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1,967 | 2,021 | ||||||
| 25,001 | 24,914 | |||||||
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Less accumulated depreciation and
amortization
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(12,688 | ) | (11,802 | ) | ||||
| 12,313 | 13,112 | |||||||
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Non-current
assets:
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Software development costs, less
accumulated amortization
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6,244 | 6,503 | ||||||
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Other
assets
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6,506 | 6,864 | ||||||
| $ | 141,949 | $ | 144,743 | |||||
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LIABILITIES AND SHAREHOLDERS'
EQUITY
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Current
liabilities:
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Accounts
payable
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$ | 12,961 | $ | 8,262 | ||||
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Derivative
liabilities
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153 | 2,234 | ||||||
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Accrued
expenses
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8,880 | 10,311 | ||||||
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Total current
liabilities
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21,994 | 20,807 | ||||||
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Non-current
liabilities:
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Deferred income taxes,
net
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2,577 | 2,570 | ||||||
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Deferred credits and other
obligations
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1,039 | 990 | ||||||
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Total
liabilities
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25,610 | 24,367 | ||||||
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Shareholders'
equity:
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Preferred stock: no par
value per share; 1,000,000 shares
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authorized; no shares
issued
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Common stock: no par
value; $.10 stated value per share;
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13,250,000 shares authorized; and
6,440,851 shares issued
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and
outstanding
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644 | 644 | ||||||
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Additional paid-in
capital
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52,052 | 52,003 | ||||||
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Retained
earnings
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66,159 | 69,568 | ||||||
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Accumulated other comprehensive
loss
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(2,516 | ) | (1,839 | ) | ||||
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Total shareholders'
equity
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116,339 | 120,376 | ||||||
| $ | 141,949 | $ | 144,743 | |||||