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) August 28, 2008
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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))
Item
2.02. Results
of Operation and Financial Condition
On August
28, 2008, Hurco Companies, Inc. (the "Registrant") reported its results of
operations for the third quarter ended July 31, 2008. 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.
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99
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Press
Release dated August 28, 2008
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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: August
28, 2008
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HURCO
COMPANIES, INC
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By: /s/ John G. Oblazney
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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 August 28, 2008
FOR
IMMEDIATE RELEASE
THURSDAY,
AUGUST 28, 2008
HURCO
REPORTS THIRD QUARTER RESULTS – SALES UP 18% AND EARNINGS UP 13%.
INDIANAPOLIS, INDIANA, — August 28,
2008, Hurco Companies, Inc., (Nasdaq, Global Select Market: HURC) today
reported for its third quarter ended July 31, 2008, net income of $5,826,000, or
$.90 per share, a 13% increase over the $5,163,000, or $.80 per share, reported
for the corresponding period in fiscal 2007. For the first nine
months of fiscal 2008, Hurco reported net income of $19,098,000, or $2.96 per
share, a 25% increase over the $15,239,000, or $2.37 per share, reported for the
corresponding period in fiscal 2007.
Sales and
service fees for the third quarter of fiscal 2008 totaled $57,318,000, an
increase of $8,763,000, or 18%, over the third quarter of fiscal 2007, despite a
19% decrease in the North American region, which accounts for approximately 13%
of the worldwide machine tool market. Approximately $5,073,000, or
10%, of the year-over-year increase reflects the effect of a weaker U.S. dollar
when translating foreign sales to U.S. dollars for financial reporting
purposes. Sales and service fees for the nine months ended July 31,
2008, totaled $176,526,000, an increase of $38,599,000, or 28%, over the
corresponding period in 2007.
The
following table sets forth net sales and service fees by geographic region for
the third quarter of fiscal 2008 and 2007:
Net Sales
and Service Fees by Geographic Region
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Three
Months Ended
July
31,
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2008
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2007
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%
Change
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North
America
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$ | 10,643 | $ | 13,086 | -19 | % | ||||||
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Europe
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43,071 | 33,044 | 30 | % | ||||||||
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Asia
Pacific
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3,604 | 2,425 | 49 | % | ||||||||
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Total
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$ | 57,318 | $ | 48,555 | 18 | % | ||||||
Growth
was primarily driven by strong demand in existing European markets, particularly
in Germany and the United Kingdom, and continued expansion into Eastern European
markets. Growth in the Asia Pacific region was primarily due to
increased market demand. The effect of a weaker U.S. dollar when
translating foreign sales into U.S. dollars for financial reporting purposes had
a favorable impact of approximately 14% on the year-over-year increase in both
the European and Asia Pacific markets. Sales in North America
reflected continued market weakness throughout the United States due to customer
concerns over unfavorable economic conditions.
New order
bookings in the third quarter of fiscal 2008 were $52,458,000, an increase of
$3,813,000, or 8%, over the prior year period. European and Asia
Pacific orders increased $6,046,000, or 19%, and $750,000, or 33%,
respectively. North American orders decreased $2,983,000, or
22%. For the nine months ended July 31, 2008, new orders totaled
$172,514,000, an increase of $28,321,000, or 20%, over the corresponding period
in 2007.
Hurco’s
gross margin for the third quarter of fiscal 2008 was 36%, compared to 38% for
the 2007 period. The reduction in
gross margin was primarily attributable to recent price increases for raw
materials which have significantly affected the machine tool industry. The
recent price increases for raw materials were partially offset by a more
favorable mix of sales by product and region. Selling, general and
administrative expenses were $11,829,000 for the third quarter of fiscal 2008,
an increase of $1,601,000 over the 2007 period, reflecting greater expenditures
for global market expansion and product development. The increase
also reflected the unfavorable effect of a weaker U.S. dollar during the 2008
period when translating foreign operating expenses for financial reporting
purposes, as well as, stock-based compensation expense recorded for stock
options granted to two new directors.
Cash
increased by $5,439,000 for the third quarter to $31,048,000 and was primarily
driven by increased net income. Inventory increased by $5,754,000 during the
third quarter to $74,489,000 resulting from approximately $2,800,000 of
increased inventory at our manufacturing facilities associated with the
forthcoming launch of new products and a slight shift in mix to higher cost VMX
machines to support product demand. The increased inventory was
primarily financed through increased cash collections.
“Our
results demonstrate the value of our strategic plan that focuses on targeted
expansion in emerging markets worldwide, agile product development processes,
and a strong global supply chain. While I am satisfied with the overall increase
in net income and sales for the third quarter, I think it is important to
address the decline in the sales numbers for North America. In spite of adverse
economic conditions in the United States, I believe we may see increased
activity in the near future due to our new product introductions and the timing
of our industry’s largest trade show,” said Chief Executive Officer Michael
Doar.
“The
International Manufacturing Technology Show (IMTS) will be held next month in
Chicago. We are introducing 14 new machines at this bi-annual show, which is the
largest product introduction that we have ever had in our 40-year history. Based
on the response from customers who previewed some of these machines
at our annual open house last month, we believe our new products will be well
received by IMTS attendees given the benefits of our software technology.
Specifically, our 5-axis technology is critical to mature markets, such as North
America, because business owners in these markets understand that investing in
technology is the most expedient way to increase productivity and
profitability,” said Doar.
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; Chennai,
India; Mississauga, Canada; and Singapore, along with manufacturing operations
in Taiwan and China. Products are sold through independent agents and
distributors in North America, Europe and Asia. The Company also has
direct sales organizations in Canada, England, France, Germany, Italy, Singapore
and China.
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, 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.
Contact:
John G. 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
July
31,
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Nine
Months Ended
July
31,
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2008
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2007
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2008
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2007
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(unaudited)
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(unaudited)
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Sales
and service fees
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$ | 57,318 | $ | 48,555 | $ | 176,526 | $ | 137,927 | ||||||||
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Cost
of sales and service
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36,439 | 30,138 | 110,459 | 85,838 | ||||||||||||
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Gross
profit
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20,879 | 18,417 | 66,067 | 52,089 | ||||||||||||
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Selling,
general and administrative expenses
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11,829 | 10,228 | 35,881 | 28,883 | ||||||||||||
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Operating
income
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9,050 | 8,189 | 30,186 | 23,206 | ||||||||||||
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Interest
expense
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25 | 11 | 46 | 165 | ||||||||||||
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Interest
Income
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154 | 172 | 436 | 561 | ||||||||||||
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Investment
Income
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72 | 113 | 363 | 191 | ||||||||||||
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Other
(income) expense, net
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471 | (359 | ) | 1,311 | (867 | ) | ||||||||||
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Income
before taxes
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8,780 | 8,822 | 29,628 | 24,660 | ||||||||||||
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Provision
for income taxes
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2,954 | 3,659 | 10,530 | 9,421 | ||||||||||||
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Net
income
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$ | 5,826 | $ | 5,163 | $ | 19,098 | $ | 15,239 | ||||||||
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Earnings
per common share
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Basic
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$ | 0.91 | $ | 0.81 | $ | 2.98 | $ | 2.39 | ||||||||
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Diluted
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$ | 0.90 | $ | 0.80 | $ | 2.96 | $ | 2.37 | ||||||||
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Weighted
average common shares outstanding
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Basic
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6,414 | 6,379 | 6,414 | 6,379 | ||||||||||||
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Diluted
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6,439 | 6,440 | 6,445 | 6,435 | ||||||||||||
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OTHER
CONSOLIDATED FINANCIAL DATA
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Three
Months Ended
July
31,
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Nine
Months Ended
July
31,
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Operating
Data:
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2008
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2007
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2008
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2007
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(unaudited)
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(unaudited)
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Gross
margin
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36.4 | % | 37.9 | % | 37.4 | % | 37.8 | % | ||||||||
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SG&A
expense as a percentage of sales
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20.6 | % | 21.1 | % | 20.3 | % | 20.9 | % | ||||||||
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Operating
income as a percentage of sales
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15.8 | % | 16.9 | % | 17.1 | % | 16.8 | % | ||||||||
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Pre-tax
income as a percentage of sales
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15.3 | % | 18.2 | % | 16.8 | % | 17.9 | % | ||||||||
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Effective
Tax Rate
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33.6 | % | 41.5 | % | 35.5 | % | 38.2 | % | ||||||||
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Depreciation
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777 | 589 | 2,190 | 1,376 | ||||||||||||
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Capital
expenditures
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1,542 | 656 | 3,456 | 2,298 | ||||||||||||
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Balance
Sheet Data:
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7/31/2008
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7/31/2007
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Working
capital (excluding short term debt)
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$ | 90,794 | $ | 69,284 | ||||||||||||
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Days
sales outstanding
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44 | 44 | ||||||||||||||
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Inventory
turns
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2.0 | 2.2 | ||||||||||||||
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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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118,942 | 91,980 | ||||||||||||||
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Total
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$ | 118,942 | $ | 91,980 | ||||||||||||
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HURCO
COMPANIES, INC.
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CONDENSED
CONSOLIDATED BALANCE SHEET
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(In
thousands, except per-share data)
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July
31,
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October
31,
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2008
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2007
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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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$ | 31,048 | $ | 29,760 | ||||
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Short-term
investments
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1,925 | 10,000 | ||||||
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Accounts
receivable, net
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29,505 | 25,645 | ||||||
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Inventories,
net
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74,489 | 61,121 | ||||||
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Deferred
tax assets, net
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9,108 | 8,258 | ||||||
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Other
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7,827 | 4,481 | ||||||
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Total
current assets
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153,902 | 139,265 | ||||||
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Property
and equipment:
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Land
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782 | 776 | ||||||
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Building
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7,135 | 7,135 | ||||||
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Machinery
and equipment
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15,674 | 13,629 | ||||||
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Leasehold
improvements
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1,935 | 1,473 | ||||||
| 25,526 | 23,013 | |||||||
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Less
accumulated depreciation and amortization
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(12,067 | ) | (11,617 | ) | ||||
| 13,459 | 11,396 | |||||||
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Non-current
assets:
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Software
development costs, less amortization
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5,475 | 5,960 | ||||||
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Long-term
investments
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4,774 | - | ||||||
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Other
assets
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7,280 | 7,160 | ||||||
| $ | 184,890 | $ | 163,781 | |||||
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LIABILITIES
AND SHAREHOLDER'S EQUITY
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Current
liabilities:
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Accounts
payable
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$ | 36,926 | $ | 35,486 | ||||
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Accrued
expenses
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26,182 | 27,729 | ||||||
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Total
current liabilities
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63,108 | 63,215 | ||||||
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Non-current
liabilities:
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Deferred
tax liability, net
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1,878 | 1,956 | ||||||
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Deferred
credits and other obligations
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962 | 1,007 | ||||||
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Total
liabilities
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65,948 | 66,178 | ||||||
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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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12,500,000
shares authorized; and 6,420,851 and
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6,392,220
shares issued, respectively
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642 | 639 | ||||||
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Additional
paid-in capital
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51,633 | 50,971 | ||||||
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Retained
earnings
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68,467 | 49,369 | ||||||
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Accumulated
other comprehensive income
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(1,800 | ) | (3,376 | ) | ||||
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Total
shareholders' equity
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118,942 | 97,603 | ||||||
| $ | 184,890 | $ | 163,781 | |||||