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 3, 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):
¨ 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))
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Item 2.02.
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Results
of Operation and Financial
Condition
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On September 3, 2010, Hurco Companies,
Inc. (the "Registrant") reported its results of operations for the third quarter
ended July 31, 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 September 3, 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: September
3, 2010
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HURCO
COMPANIES, INC
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By:
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/s/John G. Oblazney
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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 September 3, 2010
FOR
IMMEDIATE RELEASE
FRIDAY,
SEPTEMBER 3, 2010
HURCO
REPORTS THIRD QUARTER RESULTS
INDIANAPOLIS, INDIANA, — September 3,
2010, Hurco Companies, Inc., (Nasdaq, Global Select Market: HURC) today
reported a net loss of $1,173,000, or $(0.18) per diluted share, for its third
quarter ended July 31, 2010, compared to a net loss of $1,231,000, or $(0.19)
per diluted share, for the corresponding period in fiscal
2009. For the first nine months of fiscal 2010, Hurco
reported a net loss of $4,582,000, or $(0.71) per diluted share, compared to a
net loss of $1,158,000, or $(0.18) per diluted share, reported for the
corresponding period in fiscal 2009. The year-to-date net loss for
fiscal 2009 reflected the offsetting benefit of $2,712,000 of net realized gains
on hedge contracts that were closed before maturity due to forecasted reductions
in production and sales. There were no such gains during the corresponding
period in fiscal 2010.
Sales and
service fees for the third quarter of fiscal 2010 totaled $26,474,000, an
increase of $7,435,000, or 39%, from those in the third quarter of fiscal
2009. The effect of a stronger U.S. Dollar when translating foreign
sales to U.S. Dollars for financial reporting purposes had an unfavorable impact
of approximately 7%, or $1,285,000, on the period-to-period
comparison. Sales and service fees for the nine months ended July 31,
2010, totaled $71,178,000, an increase of $3,343,000, or 5%, from the
corresponding period in fiscal 2009. Currency translation had a
favorable impact on sales for the first nine months of fiscal 2010 of
approximately 2%, or $1,075,000, compared to the same period in fiscal
2009.
The
following table sets forth net sales and service fees by geographic region for
the third quarter and first nine months of fiscal 2010 and 2009,
respectively:
Net Sales
and Service Fees by Geographic Region
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Three
Months Ended
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Nine
Months Ended
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|||||||||||||||||||||||
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July
31,
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July
31,
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|||||||||||||||||||||||
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%
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%
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|||||||||||||||||||||||
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2010
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2009
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Change
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2010
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2009
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Change
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North
America
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$ | 7,208 | $ | 5,809 | 24 | % | $ | 19,114 | $ | 21,618 | -12 | % | ||||||||||||
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Europe
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15,896 | 11,777 | 35 | % | 43,254 | 42,879 | 1 | % | ||||||||||||||||
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Asia
Pacific
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3,370 | 1,453 | 132 | % | 8,810 | 3,338 | 164 | % | ||||||||||||||||
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Total
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$ | 26,474 | $ | 19,039 | 39 | % | $ | 71,178 | $ | 67,835 | 5 | % | ||||||||||||
The third
quarter increase in sales was primarily driven by increased demand for vertical
machining centers in all sales regions, with the largest percentage increase in
the Asia Pacific region. The increase in the Asia Pacific region was
primarily the result of increased sales in China and India of our entry-level,
lower-priced VM series machines and increased market demand in the other Asia
Pacific territories. Compared to the third quarter of fiscal 2009,
unit shipments for the third quarter of fiscal 2010 increased in North America
by 25%, in Europe by 38%, and in the Asia Pacific sales region by
123%. Unit shipments for the first nine months of fiscal 2010
decreased in North America by 27%, increased in Europe by 1% and increased in
the Asia Pacific sales region by 212% compared to the same period in fiscal
2009.
New order
bookings in the third quarter of fiscal 2010 were $28,013,000, an increase of
$10,099,000, or 56%, compared to the prior year period. Orders in the
North America, Europe and Asia Pacific regions increased $2,444,000, or 45%,
$4,312,000, or 38%, and $3,343,000, or 285%, respectively. For the first nine
months of fiscal 2010, new orders totaled $79,213,000, an increase of
$18,648,000, or 31%, from the corresponding period in 2009. Of that
increase, North America, Europe and Asia Pacific orders increased $2,946,000, or
16%, $7,005,000, or 18%, and $8,697,000, or 316%, respectively. The
impact of currency translation on new orders booked in the third quarter and
first nine months of 2010 was consistent with the impact on sales.
Hurco’s
gross profit for the third quarter of fiscal 2010 was 18%, compared to 28% for
the same period in 2009. The decrease in profit as a percentage of
sales was the result of machines sold during the period which were produced at a
time of lower production levels that resulted in higher production costs per
machine which increased this period’s cost of sales. Also
contributing to the decrease was a product mix that included a greater amount of
our entry-level, lower margin machines that were in high demand in the Asia
Pacific region where competitive pricing pressure also
exists. Selling, general and administrative expenses for the third
quarter of fiscal 2010 were $6,994,000, a decrease of $206,000, or 3%, from the
corresponding period in 2009, reflecting the benefit of cost reduction
initiatives and the favorable effect of a stronger U.S. Dollar in fiscal 2010
when translating foreign operating expenses for financial reporting purposes,
partially offset by increased sales commissions.
Cash
increased by $16,407,000 from October 31, 2009, to $45,189,000 at July 31, 2010,
primarily due to a reduction in inventory. Inventory decreased during
the first nine months of fiscal 2010 by $9,254,000, or 15%, of which $2,112,000,
or 4%, related to the impact of a weaker U.S. Dollar when translating inventory
values for financial reporting purposes.
Michael
Doar, Chief Executive Officer, said, “I am encouraged that we have seen
improvement to our bottom line each quarter of this fiscal year while continuing
our product and technology development as scheduled. Our research and
development efforts have resulted in a more advanced product line that we will
showcase at the International Machine and Technology Show (IMTS) this September
in Chicago. Because the value of our technology innovation is ultimately
determined by our customers, we’ve designed the show around our customers’
experiences. They will give presentations throughout the show that
illustrate how Hurco technology increased their productivity and expanded their
capabilities. One-half of the machines we will exhibit at IMTS are 5-axis and
multi-tasking machines because they provide the greatest productivity gains. The
recent release of our WinMax8 control software includes features that enhance
multi-tasking and 5-axis machining as well as substantial advancements to
existing features that benefit the entire line of Hurco machine tools. Our
innovative controls and software which help customers maximize productivity
through reduced setup time and the ability to multi-task on the shop floor,
continue to differentiate Hurco products in the marketplace.”
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
recent 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
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Vice President
& Chief Financial Officer
317-293-5309
Hurco
Companies, Inc.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(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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|||||||||||||||
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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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$ | 26,474 | $ | 19,039 | $ | 71,178 | $ | 67,835 | ||||||||
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Cost
of sales and service
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21,815 | 13,788 | 57,862 | 48,822 | ||||||||||||
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Gross
profit
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4,659 | 5,251 | 13,316 | 19,013 | ||||||||||||
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Selling,
general and administrative expenses
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6,994 | 7,200 | 20,757 | 22,747 | ||||||||||||
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Operating
loss
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(2,335 | ) | (1,949 | ) | (7,441 | ) | (3,734 | ) | ||||||||
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Interest
expense
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21 | 6 | 43 | 33 | ||||||||||||
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Interest
income
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24 | 36 | 49 | 185 | ||||||||||||
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Investment
income
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4 | 3 | 12 | 32 | ||||||||||||
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Other
expense (income), net
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55 | (133 | ) | 448 | (1,828 | ) | ||||||||||
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Loss
before taxes
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(2,383 | ) | (1,783 | ) | (7,871 | ) | (1,722 | ) | ||||||||
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Benefit
for income taxes
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(1,210 | ) | (552 | ) | (3,289 | ) | (564 | ) | ||||||||
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Net
loss
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$ | (1,173 | ) | $ | (1,231 | ) | $ | (4,582 | ) | $ | (1,158 | ) | ||||
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Losses
per common share
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Basic
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$ | (0.18 | ) | $ | (0.19 | ) | $ | (0.71 | ) | $ | (0.18 | ) | ||||
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Diluted
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$ | (0.18 | ) | $ | (0.19 | ) | $ | (0.71 | ) | $ | (0.18 | ) | ||||
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Weighted
average common shares outstanding
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Basic
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6,441 | 6,434 | 6,441 | 6,425 | ||||||||||||
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Diluted
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6,441 | 6,434 | 6,441 | 6,425 | ||||||||||||
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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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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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17.6 | % | 27.6 | % | 18.7 | % | 28.0 | % | ||||||||
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SG&A
expense as a percentage of sales
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26.4 | % | 37.8 | % | 29.2 | % | 33.5 | % | ||||||||
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Operating
loss as a percentage of sales
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-8.8 | % | -10.2 | % | -10.5 | % | -5.5 | % | ||||||||
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Pre-tax
loss as a percentage of sales
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-9.0 | % | -9.4 | % | -11.1 | % | -2.5 | % | ||||||||
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Effective
tax rate
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50.8 | % | 31.0 | % | 41.8 | % | 32.8 | % | ||||||||
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Depreciation
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978 | 846 | 2,811 | 2,451 | ||||||||||||
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Capital
expenditures
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498 | 641 | 1,242 | 2,960 | ||||||||||||
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Balance
Sheet Data:
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7/31/2010
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10/31/2009
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(unaudited)
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Working
capital (excluding cash)
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$ | 48,093 | $ | 68,675 | ||||||||||||
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Days
sales outstanding
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41 | 39 | ||||||||||||||
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Inventory
turns
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1.5 | 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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114,046 | 120,376 | ||||||||||||||
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Total
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$ | 114,046 | $ | 120,376 | ||||||||||||
Hurco
Companies, Inc.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands, except share and per-share data)
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July
31,
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October
31,
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|||||||
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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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$ | 45,189 | $ | 28,782 | ||||
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Accounts
receivable, net
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14,276 | 13,988 | ||||||
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Refundable
taxes
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796 | 7,121 | ||||||
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Inventories,
net
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51,027 | 60,281 | ||||||
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Deferred
income taxes, net
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2,532 | 2,670 | ||||||
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Derivative
assets
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1,287 | 376 | ||||||
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Other
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8,221 | 5,046 | ||||||
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Total
current assets
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123,328 | 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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14,768 | 14,995 | ||||||
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Leasehold
improvements
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2,042 | 2,021 | ||||||
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24,708 | 24,914 | ||||||
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Less
accumulated depreciation and amortization
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(12,800 | ) | (11,802 | ) | ||||
| 11,908 | 13,112 | |||||||
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Non-current
assets:
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Software
development costs, less accumulated amortization
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6,093 | 6,503 | ||||||
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Other
assets
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6,284 | 6,864 | ||||||
| $ | 147,613 | $ | 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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$ | 20,561 | $ | 8,262 | ||||
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Derivative
liabilities
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1,516 | 2,234 | ||||||
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Accrued
expenses
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7,969 | 10,311 | ||||||
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Total
current liabilities
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30,046 | 20,807 | ||||||
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Non-current
liabilities:
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Deferred
income taxes, net
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2,592 | 2,570 | ||||||
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Deferred
credits and other obligations
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929 | 990 | ||||||
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Total
liabilities
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33,567 | 24,367 | ||||||
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Shareholders'
equity:
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||||||||
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Preferred
stock: no par value per share; 1,000,000 shares
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||||||||
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authorized;
no shares issued
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- | - | ||||||
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Common
stock: no par value; $.10 stated value per
share;
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||||||||
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13,250,000
shares authorized; and 6,440,851 shares issued
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and
outstanding
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644 | 644 | ||||||
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Additional
paid-in capital
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52,098 | 52,003 | ||||||
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Retained
earnings
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64,986 | 69,568 | ||||||
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Accumulated
other comprehensive loss
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(3,682 | ) | (1,839 | ) | ||||
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Total
shareholders' equity
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114,046 | 120,376 | ||||||
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$ | 147,613 | $ | 144,743 | ||||