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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) September 7, 2012

  

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):

 

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

 

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

 

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

 

¨     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 September 7, 2012, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the third quarter ended July 31, 2012. 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 9.01Financial Statements and Exhibits.

 

99Press Release dated September 7, 2012.

 

 
 

 

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:  September 7, 2012
   
  HURCO COMPANIES, INC
   
  By: /s/John G. Oblazney  
   

John G. Oblazney,

Vice President and

    Chief Financial Officer

 

 
 

 

EXHIBIT INDEX

 

Exhibit 99Press Release of Hurco Companies, Inc. dated September 7, 2012.

 

 

 

 

FOR IMMEDIATE RELEASE

Friday, SEPTEMBER 7, 2012

 

HURCO REPORTS THIRD QUARTER RESULTS

 

INDIANAPOLIS, INDIANA, — SEPTEMBER 7, 2012, Hurco Companies, Inc., (Nasdaq, Global Select Market: HURC) today reported net income of $3,957,000, or $0.61 per diluted share, for its third fiscal quarter ended July 31, 2012, compared to $4,575,000, or $0.70 per diluted share, for the corresponding period in fiscal 2011. For the first nine months of fiscal 2012, Hurco reported net income of $11,552,000, or $1.77 per diluted share, compared to $8,470,000, or $1.30 per diluted share, for the corresponding period in fiscal 2011.

 

Sales and service fees for the third quarter of fiscal 2012 totaled $49,959,000, a decrease of $614,000, or 1%, compared to the third quarter of fiscal 2011. This year-over-year comparison includes the adverse impact of $3,711,000, or 7%, due to a weaker Euro when translating foreign sales to U.S. Dollars for financial reporting purposes. Sales and service fees for the nine months ended July 31, 2012 totaled $147,050,000, an increase of $15,221,000, or 12%, over the corresponding period in 2011. The unfavorable impact of currency translation on the year-over-year nine-month comparison was $5,522,000, or 4%.

 

The following table sets forth net sales and service fees by geographic region for the third quarter and first nine months of fiscal 2012 and 2011, respectively:

 

   Three Months Ended   Nine Months Ended 
   July 31,   July 31, 
           %           % 
   2012   2011   Change   2012   2011   Change 
North America  $15,513   $13,119    18%  $42,835   $35,718    20%
Europe   29,049    31,305    -7%   85,614    79,881    7%
Asia Pacific   5,397    6,149    -12%   18,601    16,230    15%
Total  $49,959   $50,573    -1%  $147,050   $131,829    12%

 

Sales during the third quarter of fiscal 2012 remained relatively stable as increased sales in North America were offset by lower sales in Europe and Asia. Sales in Europe were down compared to the prior year period primarily due to the European debt crisis, which resulted in both a decline in demand attributable to economic uncertainty and a weaker Euro. Sales in Asia declined in comparison to the corresponding prior year period due to a slowing economy in that region. During the third quarter of fiscal 2012, unit shipments increased over the corresponding quarter in fiscal 2011 by 6% in North America, but decreased by 10% in Europe and 13% in the Asia Pacific sales region. Unit shipments in the first nine months of fiscal 2012 increased over the prior year period by 8% in North America, 1% in Europe, and 17% in the Asia Pacific sales region.

 

 
 

 

The following table sets forth new orders booked by geographic region for the third quarter and first nine months of fiscal 2012 and 2011, respectively:

 

   Three Months Ended   Nine Months Ended 
   July 31,   July 31, 
           %           % 
   2012   2011   Change   2012   2011   Change 
North America  $12,821   $9,116    41%  $41,246   $36,693    12%
Europe   27,829    22,617    23%   87,477    98,660    -11%
Asia Pacific   5,695    8,073    -29%   17,597    21,327    -17%
Total  $46,345   $39,806    16%  $146,320   $156,680    -7%

 

Orders for the third quarter of fiscal 2012 were $46,345,000, an increase of $6,539,000, or 16%, from the corresponding period in fiscal 2011. Unit orders for the third quarter of fiscal 2012 increased by 102% in North America and 36% in Europe, but decreased by 41% in the Asia Pacific region compared to the prior year period. It should be noted, however, that orders in the third quarter of fiscal 2011 were unusually low due to a surge of customer orders that were placed during the preceding quarter in advance of an announced price increase that went into effect at the end of that quarter. The impact of currency translation on orders was consistent with the impact on sales.  Orders for the first nine months of fiscal 2012 were $146,320,000, a decrease of $10,360,000, or 7%, from the corresponding period in fiscal 2011. Unit orders for the first nine months of fiscal 2012 increased by 10% in North America, but decreased by 15% in Europe and 25% in the Asia Pacific region compared to the prior year period.

 

Gross profit for the third quarter of fiscal 2012 was $16,084,000, or 32% of sales, which was relatively unchanged compared to $15,850,000, or 31% of sales, for the prior year period. Gross profit for the first nine months of fiscal 2012 was $45,961,000 or 31% of sales, compared to $40,192,000 or 30% of sales for the same period in 2011 due primarily to increased sales.

 

Selling, general and administrative expenses in the third quarter of fiscal 2012 were $10,272,000, an increase of $955,000 from the prior year period, primarily due to global sales and marketing initiatives. Selling, general and administrative expenses of $29,290,000 for the first nine months of fiscal 2012 compared to $27,401,000 for the first nine months of fiscal 2011 also reflected global sales and marketing initiatives.

 

Cash and cash equivalents totaled $35,095,000 as of July 31, 2012, compared to $44,961,000 as of October 31, 2011. The decrease in cash was primarily due to increased production in fiscal 2012 intended to meet forecasted growth in customer demand. Working capital, excluding cash, was $85,155,000 as of July 31, 2012, compared to $61,885,000 as of October 31, 2011. The increase in working capital, excluding cash, was primarily due to an increase in inventory of $17,620,000 as a result of the increase in production.

 

 
 

 

Michael Doar, Chairman, Chief Executive Officer and President, stated, “I am extremely pleased with the sales and order activity in North America, which is where we introduced our distributor partners to the Hurco rebranding initiative at the annual sales meeting last month. I was energized by the unprecedented enthusiasm I noticed from our sales partners when they saw the new machine design, new branding materials, and new machine lineup. We will officially launch this worldwide rebranding initiative to the public later this month at the International Manufacturing Technology Show (IMTS) in Chicago. In addition to acquainting the public with the updated design of the Hurco brand, we will introduce an entire line of high speed machine tools equipped with our patented motion control system called UltiMotion. UltiMotion exemplifies the type of advanced technology we continue to innovate so that our customers can increase their productivity and profitability.”

 

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 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 cyclical nature of the machine tool industry, changes in general economic and business conditions that affect demand for our products, the risks of our international operations, changes in manufacturing markets, innovations by competitors, the ability to protect our intellectual property, fluctuations in foreign currency exchange rates, increases in prices of raw materials, quality and delivery performance by our vendors, changes in operations due to acquisitions or loss of key personnel, uncertainty concerning our ability to use tax loss carryforwards and governmental actions and initiatives including import and export restrictions and tariffs.

 

Contact:  John G. Oblazney
  Vice President & Chief Financial Officer
  317-293-5309

 

 
 

 

Hurco Companies, Inc.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per-share data)

 

   Three Months Ended   Nine Months Ended 
   July 31,   July 31, 
   2012   2011   2012   2011 
   (unaudited)   (unaudited) 
Sales and service fees  $49,959   $50,573   $147,050   $131,829 
                     
Cost of sales and service   33,875    34,723    101,089    91,637 
Gross profit   16,084    15,850    45,961    40,192 
                     
Selling, general and administrative expenses   10,272    9,317    29,290    27,401 
Operating income   5,812    6,533    16,671    12,791 
                     
Interest expense   43    47    105    61 
                     
Interest income   16    35    57    107 
                     
Investment income (expense)   3    2    5    9 
                     
Other expense (income), net   190    242    69    721 
                     
Income before taxes   5,598    6,281    16,559    12,125 
                     
Provision for income taxes   1,641    1,706    5,007    3,655 
                     
Net income  $3,957   $4,575   $11,552   $8,470 
                     
Earnings per common share                    
                     
Basic  $0.61   $0.71   $1.78   $1.31 
Diluted  $0.61   $0.70   $1.77   $1.30 
                     
Weighted average common shares outstanding                    
Basic   6,447    6,441    6,444    6,441 
Diluted   6,465    6,480    6,470    6,474 

 

OTHER CONSOLIDATED FINANCIAL DATA  Three Months Ended   Nine Months Ended 
   July 31,   July 31, 
Operating Data:  2012   2011   2012   2011 
   (unaudited)   (unaudited) 
Gross margin   32%   31%   31%   30%
                     
SG&A expense as a percentage of sales   21%   18%   20%   21%
                     
Operating income as a percentage of sales   12%   13%   11%   10%
                     
Pre-tax income as a percentage of sales   11%   12%   11%   9%
                     
Effective Tax Rate   29%   27%   30%   30%
                     
Depreciation and amortization   955    1,081    3,195    3,227 
                     
Capital expenditures   1,293    718    2,603    1,745 
Balance Sheet Data:  7/31/2012   10/31/2011         
   (unaudited)             
Working capital (excluding cash)  $85,155   $61,885           
                     
Days sales outstanding (unaudited)   43    37           
                     
Inventory turns (unaudited)   1.4    1.6           
                     
Capitalization                    
Total debt  $3,143   $865           
Shareholders' equity   138,492    126,212           
Total  $141,635   $127,077           

 

 
 

 

Hurco Companies, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share data)

 

   July 31,   October 31, 
   2012   2011 
   (Unaudited)   (Audited) 
ASSETS          
Current assets:          
Cash and cash equivalents  $35,095   $44,961 
Accounts receivable, net   30,514    27,057 
Refundable taxes   1,255    1,442 
Inventories, net   95,717    81,127 
Deferred income taxes   744    2,692 
Derivative assets   3,104    1,197 
Other   9,048    5,598 
Total current assets   175,477    164,074 
           
Property and equipment:          
Land   782    782 
Building   7,353    7,116 
Machinery and equipment   16,985    16,336 
Leasehold improvements   2,999    2,508 
    28,119    26,742 
Less accumulated depreciation and amortization   (16,432)   (15,198)
    11,687    11,544 
           
Non-current assets:          
Software development costs, less accumulated amortization   4,040    4,928 
Other assets   5,792    5,999 
   $196,996   $186,545 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Current liabilities:          
Accounts payable  $38,544   $39,046 
Derivative liabilities   447    1,609 
Accrued expenses   13,093    15,708 
Short-term debt   3,143    865 
Total current liabilities   55,227    57,228 
           
Non-current liabilities:          
Deferred income taxes   2,104    1,982 
Deferred credits and other obligations   1,173    1,123 
Total liabilities   58,504    60,333 
           
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; 6,502,928 and 6,471,710 shares issued; and 6,447,210 and 6,440,851 shares outstanding, as of July 31, 2012 and October 31, 2011, respectively   645    644 
Additional paid-in capital   53,260    52,614 
Retained earnings   86,500    74,948 
Accumulated other comprehensive loss   (1,913)   (1,994)
Total shareholders' equity   138,492    126,212 
   $196,996   $186,545