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) May 23, 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 May 23, 2008, Hurco Companies, Inc.
(the "Registrant") reported its results of operations for the second quarter
ended April 30, 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 May 23, 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: May
23, 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 May 23, 2008
FOR
IMMEDIATE RELEASE
FRIDAY,
MAY 23, 2008
HURCO
REPORTS STRONG SECOND QUARTER RESULTS – SALES UP 37% AND ORDERS UP
22%.
INDIANAPOLIS, INDIANA, — May 23, 2008,
Hurco Companies, Inc., (Nasdaq, Global Select Market: HURC) today
reported for its second quarter ended April 30, 2008, net income of $5,467,000,
or $.85 per share, a 17% increase over the $4,680,000, or $.73 per share,
reported for the corresponding period in fiscal 2007. For the first
six months of fiscal 2008, Hurco reported net income of $13,272,000, or $2.06
per share, a 32% increase over the $10,075,000, or $1.57 per share, reported for
the corresponding period in fiscal 2007.
Sales
and service fees for the second quarter of fiscal 2008 totaled $58,285,000, an
increase of $15,791,000, or 37%, over the second quarter of fiscal
2007. Approximately $5,252,000, or 12%, 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 six months ended April 30, 2008, totaled $119,208,000, an
increase of $29,836,000, or 33%, over the corresponding period in
2007.
The
following table sets forth net sales and service fees by geographic region for
the second quarter of fiscal 2008 and 2007:
Net
Sales and Service Fees by Geographic Region
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Three
Months Ended
April
30,
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2008
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2007
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%
Change
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North
America
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$ 11,706
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$ 11,581
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1%
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Europe
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42,653
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28,694
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49%
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Asia
Pacific
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3,926
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2,219
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77%
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Total
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$ 58,285
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$ 42,494
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37%
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Growth
was primarily driven by strong demand in existing European markets and expansion
into Eastern European markets. Growth in the Asia Pacific region was
primarily due to targeted penetration into new markets. The effect of
a weaker U.S. dollar when translating fiscal 2008 foreign sales into U.S.
dollars for financial reporting purposes had a favorable impact of approximately
17% in Europe and 14% in the Asia Pacific market. Sales in North
America reflected continued market softness.
New
order bookings in the second quarter of fiscal 2008 were $58,892,000, an
increase of $10,439,000, or 22%, over the prior year period. European
orders increased $10,921,000, or 33%, while North American and Asia Pacific
orders decreased $357,000, or 3%, and $125,000, or 3%,
respectively. For the six months ended April 30, 2008, new orders
totaled $120,039,000, an increase of $24,491,000, or 26%, over the corresponding
period in 2007.
Hurco’s
gross margin for the second quarter of fiscal 2008 was 35%, compared to 39% for
the 2007 period. The reduction
in gross margin was primarily attributable to competitive pricing pressure and
increased product costs. Selling, general and administrative expenses
were $11,676,000 for the second quarter of fiscal 2008, an increase of
$2,271,000 over the 2007 period, reflecting greater expenditures for sales,
product development and market expansion. 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.
Cash
increased by $4,433,000 for the second quarter to $25,609,000 primarily due to
sales of short-term investments in auction rate securities. Inventory
increased by $4,906,000 for the second quarter to $68,735,000 primarily due to
the effect of a weaker U.S. dollar when translating foreign inventory for
financial reporting purposes. The increase also reflects higher levels of
inventory at the company’s manufacturing facilities to support growth in product
demand and the forthcoming launch of new products.
“While
there is no denying the economic pressure being felt in many markets, Hurco is
fortunate that the strategic plan we have continued to implement during the past
seven years allows the company to endure these cycles,” said Chief Executive
Officer Michael Doar. “Our financial position is such that we are
able to execute our new product plan and targeted market expansion as
scheduled. We opened a second manufacturing plant at Hurco
Manufacturing Limited and we’re finalizing an unprecedented number of new
product introductions. Of note is our entry into the large machining
center category and expansion of our 5-axis lines and multi-tasking
machines. The 5-axis machining centers and multi-tasking machines are
in demand as customers worldwide require increased productivity to remain
competitive. All of these machines will be part of the biggest new
product introduction in the company’s 40-year history, which will be held at the
International Manufacturing Technology Show in September,” 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 forces in the United Kingdom, Germany, France, Italy, Canada, and
Asia.
Web
Site: www.hurco.com
This
news release contains forward-looking statements which involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. These factors include, among others, changes in general
economic and business conditions that affect demand for computerized machine
systems, computer numerical control systems and software products, changes in
manufacturing markets, innovations by competitors, 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
April
30,
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Six
Months Ended
April
30,
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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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$ | 58,285 | $ | 42,494 | $ | 119,208 | $ | 89,372 | ||||||||
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Cost
of sales and service
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37,954 | 26,145 | 74,020 | 55,700 | ||||||||||||
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Gross profit
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20,331 | 16,349 | 45,188 | 33,672 | ||||||||||||
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Selling,
general and administrative expenses
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11,676 | 9,405 | 24,052 | 18,655 | ||||||||||||
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Operating income
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8,655 | 6,944 | 21,136 | 15,017 | ||||||||||||
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Interest
expense
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10 | 71 | 21 | 154 | ||||||||||||
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Interest
Income
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133 | 196 | 282 | 389 | ||||||||||||
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Investment
Income
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119 | 57 | 291 | 78 | ||||||||||||
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Other
(income) expense, net
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376 | (318 | ) | 840 | (506 | ) | ||||||||||
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Income
before taxes
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8,521 | 7,444 | 20,848 | 15,836 | ||||||||||||
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Provision
for income taxes
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3,054 | 2,764 | 7,576 | 5,761 | ||||||||||||
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Net
income
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$ | 5,467 | $ | 4,680 | $ | 13,272 | $ | 10,075 | ||||||||
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Earnings
per common share
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Basic
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$ | 0.85 | $ | 0.73 | $ | 2.07 | $ | 1.58 | ||||||||
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Diluted
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$ | 0.85 | $ | 0.73 | $ | 2.06 | $ | 1.57 | ||||||||
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Weighted
average common shares outstanding
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Basic
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6,410 | 6,373 | 6,410 | 6,373 | ||||||||||||
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Diluted
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6,444 | 6,431 | 6,442 | 6,427 | ||||||||||||
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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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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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34.9 | % | 38.5 | % | 37.9 | % | 37.7 | % | ||||||||
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SG&A
expense as a percentage of sales
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20.0 | % | 22.1 | % | 20.2 | % | 20.9 | % | ||||||||
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Operating
income as a percentage of sales
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14.8 | % | 16.3 | % | 17.7 | % | 16.8 | % | ||||||||
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Pre-tax
income as a percentage of sales
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14.6 | % | 17.5 | % | 17.5 | % | 17.7 | % | ||||||||
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Effective
Tax Rate
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35.8 | % | 37.1 | % | 36.3 | % | 36.4 | % | ||||||||
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Depreciation
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730 | 396 | 1,413 | 787 | ||||||||||||
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Capital
expenditures
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767 | 984 | 1,914 | 1,642 | ||||||||||||
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Balance
Sheet Data:
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4/30/2008
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4/30/2007
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Working
capital (excluding short term debt)
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$ | 85,233 | $ | 61,938 | ||||||||||||
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Days
sales outstanding
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43 | 45 | ||||||||||||||
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Inventory
turns
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2.0 | 2.5 | ||||||||||||||
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Capitalization
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Total debt
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$ |
-
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$ |
-
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Shareholders' equity
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112,563 | 86,199 | ||||||||||||||
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Total
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$ | 112,563 | $ | 86,199 | ||||||||||||
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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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April
30,
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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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$ | 25,609 | $ | 29,760 | ||||
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Short-term
investments
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3,650 | 10,000 | ||||||
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Accounts
receivable, net
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35,741 | 25,645 | ||||||
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Inventories,
net
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68,735 | 61,121 | ||||||
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Deferred
tax assets, net
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8,810 | 8,258 | ||||||
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Other
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5,960 | 4,481 | ||||||
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Total
current assets
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148,505 | 139,265 | ||||||
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Property
and equipment:
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Land
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776 | 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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14,643 | 13,629 | ||||||
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Leasehold
improvements
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1,668 | 1,473 | ||||||
| 24,222 | 23,013 | |||||||
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Less
accumulated depreciation and amortization
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(11,606 | ) | (11,617 | ) | ||||
| 12,616 | 11,396 | |||||||
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Non-current
assets:
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Software
development costs, less amortization
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5,542 | 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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7,284 | 7,160 | ||||||
| $ | 178,721 | $ | 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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$ | 36,750 | $ | 35,486 | ||||
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Accrued
expenses
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26,522 | 27,729 | ||||||
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Total
current liabilities
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63,272 | 63,215 | ||||||
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Non-current
liabilities:
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Deferred
tax liability, net
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1,886 | 1,956 | ||||||
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Deferred
credits and other obligations
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1,000 | 1,007 | ||||||
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Total
liabilities
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66,158 | 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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51,269 | 50,971 | ||||||
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Retained
earnings
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62,641 | 49,369 | ||||||
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Accumulated
other comprehensive income
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(1,989 | ) | (3,376 | ) | ||||
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Total
shareholders' equity
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112,563 | 97,603 | ||||||
| $ | 178,721 | $ | 163,781 | |||||