x
|
Annual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended October 31, 2009
or
|
o
|
Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the transition period from _________ to
_________.
|
Indiana
|
35-1150732
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification Number)
|
incorporation
or organization)
|
|
One
Technology Way
|
|
Indianapolis, Indiana
|
46268
|
(Address
of principal executive offices)
|
(Zip
code)
|
Securities
registered pursuant to Section 12(b) of the Act:
|
None
|
Securities
registered pursuant to Section 12(g) of the Act:
|
Common Stock, No Par
Value
|
(Title
of Class)
|
|
·
|
United
States Machine Tool Consumption – generated by the Association for
Manufacturing Technology and American Machine Tool Distributor
Association, this report includes metal cutting machines of all types and
sizes, including segments in which we do not
compete
|
|
·
|
Purchasing
Manager’s Index - developed by the Institute for Supply
Management and reports activity levels in U.S. manufacturing
plants that purchase machine
tools
|
|
·
|
Capacity
Utilization of Manufacturing Companies – issued by the Federal
Reserve Board
|
Net
Sales and Service Fees by Product Category
|
||||||||||||||||||||||||
(Dollars
in thousands)
|
Year
ended October 31,
|
|||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||
Continuing Products and
Services
|
||||||||||||||||||||||||
Computerized
Machine Tools
|
$ | 75,213 | 82.7 | % | $ | 199,238 | 89.0 | % | $ | 165,832 | 88.2 | % | ||||||||||||
Computer
Control Systems and Software*
|
2,546 | 2.8 | % | 5,678 | 2.5 | % | 5,291 | 2.8 | % | |||||||||||||||
Service
Parts
|
8,851 | 9.7 | % | 13,240 | 5.9 | % | 12,096 | 6.4 | % | |||||||||||||||
Service
Fees
|
4,406 | 4.8 | % | 5,838 | 2.6 | % | 4,828 | 2.6 | % | |||||||||||||||
Total
|
$ | 91,016 | 100 | % | $ | 223,994 | 100 | % | $ | 188,047 | 100 | % |
*
|
Amounts
shown do not include computer control systems sold as integrated
components of computerized machine
tools.
|
|
·
|
maximize
the efficiency of their human
resources
|
|
·
|
continue
to expand their capability to make more advanced and complex parts from a
wide range of materials using multiple
processes
|
|
·
|
maintain
the ability to incorporate fast moving changes in technology into their
operations to keep their competitive
edge
|
|
·
|
continue
to integrate themselves into the global supply chain of their customers by
supporting small to medium lot sizes for “just in time”
initiatives
|
|
·
|
the
need to continuously improve productivity and shorten cycle
time
|
|
·
|
an
aging machine tool installed base that will require replacement with more
advanced and efficient technology created by shorter product life
cycles
|
|
·
|
the
industrial development of emerging markets in Asia and Eastern
Europe
|
|
·
|
the
declining supply of skilled
machinists
|
Fiscal Year
|
Non-capitalized
research and
development
|
Capitalized
software
development
|
||||||
2009
|
$ | 2,500 | $ | 2,000 | ||||
2008
|
3,000 | 900 | ||||||
2007
|
3,100 | 1,200 |
|
·
|
trade
barriers
|
|
·
|
regional
economic uncertainty
|
|
·
|
differing
labor regulation
|
|
·
|
governmental
expropriation
|
|
·
|
domestic
and foreign customs and tariffs
|
|
·
|
current
and changing regulatory environments affecting the importation and
exportation of products and raw
materials
|
|
·
|
difficulty
in obtaining distribution support
|
|
·
|
difficulty
in staffing and managing widespread
operations
|
|
·
|
differences
in the availability and terms of
financing
|
|
·
|
political
instability and unrest
|
|
·
|
changes
in tax regulations and rates in foreign
countries
|
|
·
|
difficulties
integrating the operations, technologies, products, and personnel of the
acquired companies
|
|
·
|
diversion
of management’s attention from normal daily operations of the
business
|
|
·
|
potential
difficulties completing projects associated with in-process research and
development
|
|
·
|
difficulties
entering markets in which we have no or limited prior experience,
especially when competitors in such markets have stronger market
positions
|
|
·
|
initial
dependence on unfamiliar supply chains or relatively small supply
partners
|
|
·
|
insufficient
revenues to offset increased expenses associated with
acquisitions
|
|
·
|
the
potential loss of key employees of the acquired
companies
|
|
·
|
issue
common stock that would dilute our current shareholders’ percentage
ownership
|
|
·
|
assume
liabilities
|
|
·
|
record
goodwill and non-amortizable intangible assets that will be subject to
impairment testing on a regular basis and potential periodic impairment
charges
|
|
·
|
incur
amortization expenses related to certain intangible
assets
|
|
·
|
incur
large and immediate write-offs, and restructuring and other related
expenses
|
|
·
|
become
subject to litigation
|
Principal Uses
|
Locations
|
Square Footage
|
||
Corporate
headquarters, design and engineering, product testing, sales and
marketing, application engineering and customer service.
|
Indianapolis,
Indiana, USA (1)
|
165,000
|
||
Manufacturing
|
Taichung,
Taiwan
|
229,000
|
||
Ningbo,
China
|
34,700
|
|||
Sales,
design engineering, product testing and customer service.
|
Dexter,
Michigan, USA
|
3,000
|
||
Sales,
application engineering & customer service.
|
Mississauga,
Canada
High
Wycombe, England
|
3,600
12,000
|
||
Benoni,
South Africa
|
2,500
|
|||
Paris
and Toulouse France
|
11,100
|
|||
Munich, Hagen
and Roedermark, Germany
|
26,000
|
|||
Milan
and Venice, Italy
|
13,000
|
|||
Bilbao,
Spain
|
3,500
|
|||
Singapore
|
6,300
|
|||
Shanghai,
China
|
8,000
|
|||
Guangzhou,
China
|
4,700
|
|||
Chennai,
India
|
5,400
|
|||
Liegnitz,
Poland
|
2,900
|
|||
Grand
Rapids, Michigan, USA
|
5,000
|
|||
Warehouse,
distribution, sales, application engineering and customer
service
|
Los
Angeles, California, USA
|
13,000
|
|
(1)
|
Approximately
50,000 square feet is leased to a third-party under a lease, which expires
October 31, 2011.
|
Name
|
Age
|
Position(s) with the
Company
|
||
Michael
Doar
|
54
|
Chairman of the Board,
Chief Executive Officer and President
|
||
John
G. Oblazney
|
41
|
Vice
President, Secretary, Treasurer and Chief Financial
Officer
|
||
Sonja
K. McClelland
|
38
|
Corporate
Controller, Assistant Secretary
|
2009
|
2008
|
|||||||||||||||
Fiscal Quarter Ended:
|
High
|
Low
|
High
|
Low
|
||||||||||||
January
31
|
$ | 24.68 | $ | 11.81 | $ | 58.68 | $ | 30.24 | ||||||||
April
30
|
16.97 | 8.30 | 52.12 | 33.41 | ||||||||||||
July
31
|
19.89 | 12.01 | 49.30 | 23.11 | ||||||||||||
October
31
|
20.45 | 15.26 | 38.24 | 16.92 |
Year Ended October 31
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Statement of Operations Data: |
(Dollars
in thousands, except per share amounts)
|
|||||||||||||||||||
Sales
and service fees
|
$ | 91,016 | $ | 223,994 | $ | 188,047 | $ | 148,517 | $ | 125,509 | ||||||||||
Gross
profit
|
25,828 | 82,617 | 71,082 | 53,325 | 42,558 | |||||||||||||||
Selling,
general and administrative expenses
|
30,874 | 46,811 | 40,124 | 30,697 | 26,057 | |||||||||||||||
Operating
income (loss)
|
(5,046 | ) | 35,806 | 30,958 | 22,628 | 16,501 | ||||||||||||||
Other
income (expense)
|
1,234 | (1,640 | ) | 1,742 | 745 | (64 | ) | |||||||||||||
Net
income (loss)
|
(2,321 | ) | 22,520 | 20,889 | 15,479 | 16,443 | ||||||||||||||
Earnings
(loss) per common share- diluted
|
(0.36 | ) | 3.49 | 3.24 | 2.42 | 2.60 | ||||||||||||||
Weighted
average common shares outstanding-diluted
|
6,429 | 6,444 | 6,440 | 6,397 | 6,336 |
As
of October 31
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Balance
Sheet Data:
|
(Dollars
in thousands)
|
|||||||||||||||||||
Current
assets
|
$ | 118,264 | $ | 151,312 | $ | 139,265 | $ | 103,434 | $ | 73,818 | ||||||||||
Current
liabilities
|
20,807 | 51,129 | 63,215 | 44,340 | 30,761 | |||||||||||||||
Working
capital
|
97,457 | 100,183 | 76,050 | 59,094 | 43,057 | |||||||||||||||
Current
ratio
|
5.7 | 3.0 | 2.2 | 2.3 | 2.4 | |||||||||||||||
Total
assets
|
144,743 | 177,444 | 163,781 | 125,545 | 94,114 | |||||||||||||||
Non-current
liabilities
|
3,560 | 2,838 | 2,963 | 5,830 | 4,409 | |||||||||||||||
Total
debt
|
— | — | — | 4,010 | 4,136 | |||||||||||||||
Shareholders’
equity
|
120,376 | 123,477 | 97,603 | 75,375 | 58,944 |
Percentage of Revenues
|
Year-to-Year % Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
Increase (Decrease)
|
|||||||||||||||||
’09
vs. ’08
|
’08
vs. ’07
|
|||||||||||||||||||
Sales
and service fees
|
100.0 | % | 100.0 | % | 100.0 | % | (59.4 | )% | 19.1 | % | ||||||||||
Gross
profit
|
28.4 | % | 36.9 | % | 37.8 | % | (68.7 | )% | 16.2 | % | ||||||||||
Selling,
general and administrative expenses
|
33.9 | % | 20.9 | % | 21.3 | % | (34.0 | )% | 16.7 | % | ||||||||||
Operating
income (loss)
|
(5.5 | )% | 16.0 | % | 16.5 | % | (114.1 | )% | 15.7 | % | ||||||||||
Other
income (expense)
|
1.4 | % | (0.7 | )% | 0.9 | % | 175.2 | % | (194.1 | )% | ||||||||||
Net
income (loss)
|
(2.6 | )% | 10.1 | % | 11.1 | % | (110.3 | )% | 7.8 | % |
October 31,
|
Increase (Decrease)
|
|||||||||||||||||||||||
2009
|
2008
|
Amount
|
%
|
|||||||||||||||||||||
North
America
|
$ | 25,652 | 28.2 | % | $ | 48,373 | 21.6 | % | $ | (22,721 | ) | (47.0 | )% | |||||||||||
Europe
|
60,132 | 66.1 | % | 163,807 | 73.1 | % | (103,675 | ) | (63.3 | )% | ||||||||||||||
Asia
Pacific
|
5,232 | 5.7 | % | 11,814 | 5.3 | % | (6,582 | ) | (55.7 | )% | ||||||||||||||
Total
|
$ | 91,016 | 100.0 | % | $ | 223,994 | 100.0 | % | $ | (132,978 | ) | (59.4 | )% |
October 31,
|
Increase
|
|||||||||||||||||||||||
2009
|
2008
|
Amount
|
%
|
|||||||||||||||||||||
Computerized
Machine
Tools
|
$ | 75,213 | 82.6 | % | $ | 199,238 | 88.9 | % | $ | (124,025 | ) | (62.2 | )% | |||||||||||
Service
Fees, Parts and
Other
|
15,803 | 17.4 | % | 24,756 | 11.1 | % | (8,953 | ) | (36.2 | )% | ||||||||||||||
Total
|
$ | 91,016 | 100.0 | % | $ | 223,994 | 100.0 | % | $ | (132,978 | ) | (59.4 | )% |
October 31,
|
Increase (Decrease)
|
|||||||||||||||||||||||
2008
|
2007
|
Amount
|
%
|
|||||||||||||||||||||
North
America
|
$ | 48,373 | 21.6 | % | $ | 52,133 | 27.7 | % | $ | (3,760 | ) | (7.2 | )% | |||||||||||
Europe
|
163,807 | 73.1 | % | 125,446 | 66.7 | % | 38,361 | 30.6 | % | |||||||||||||||
Asia
Pacific
|
11,814 | 5.3 | % | 10,468 | 5.6 | % | 1,346 | 12.9 | % | |||||||||||||||
Total
|
$ | 223,994 | 100.0 | % | $ | 188,047 | 100.0 | % | $ | 35,947 | 19.1 | % |
October 31,
|
Increase
|
|||||||||||||||||||||||
2008
|
2007
|
Amount
|
%
|
|||||||||||||||||||||
Computerized
Machine
Tools
|
$ | 199,238 | 88.9 | % | $ | 165,832 | 88.2 | % | $ | 33,406 | 20.1 | % | ||||||||||||
Service
Fees, Parts and
Other
|
24,756 | 11.1 | % | 22,215 | 11.8 | % | 2,541 | 11.4 | % | |||||||||||||||
Total
|
$ | 223,994 | 100.0 | % | $ | 188,047 | 100.0 | % | $ | 35,947 | 19.1 | % |
Total
|
Less than
1 Year
|
1-3
Years
|
3-5
Years
|
More
than 5
Years
|
||||||||||||||||
Operating
Leases
|
$ | 4,780 | $ | 1,915 | $ | 2,002 | $ | 863 | $ | — | ||||||||||
Deferred
Credits and Other
|
990 | — | — | — | 990 | |||||||||||||||
Total
|
$ | 5,770 | $ | 1,915 | $ | 2,002 | $ | 863 | $ | 990 |
Notional
Amount
|
Weighted
Avg.
|
Contract Amount at
Forward
Rates in
U.S. Dollars
|
|||||||||||||||
Forward
Contracts
|
in Foreign
Currency
|
Forward
Rate
|
Contract
Date
|
October 31,
2009
|
Maturity
Dates
|
||||||||||||
Sale
Contracts:
|
|||||||||||||||||
Euro
|
6,900,000 | 1.3876 | $ | 9,574,440 | $ | 10,149,857 |
Nov 2009-Oct 2010
|
||||||||||
Sterling
|
2,015,000 | 1.5819 | $ | 3,187,529 | $ | 3,309,601 |
Nov 2009-Oct
2010
|
||||||||||
Purchase
Contracts:
|
|||||||||||||||||
New Taiwan
Dollar
|
275,000,000 | 32.29 | * | $ | 8,517,360 | $ | 8,578,063 |
Nov 2009-Oct
2010
|
Contract Amount at Forward
Rates in
U.S. Dollars
|
|||||||||||||||||
Forward Contracts
|
Notional
Amount in
Foreign
Currency
|
Weighted
Avg.
Forward
Rate
|
Contract
Date
|
October 31,
2009
|
Maturity Dates
|
||||||||||||
Sale
Contracts:
|
|||||||||||||||||
Euro
|
14,881,291 | 1.4494 | $ | 21,568,943 | $ | 21,909,736 |
Nov 2009 – Feb 2010
|
||||||||||
Pound
Sterling
|
108,276 | 1.6468 | $ | 178,309 | $ | 177,987 |
Nov 2009
|
||||||||||
Canadian
Dollar
|
278,873 | 0.9222 | $ | 257,177 | $ | 258,138 |
Dec 2009
|
||||||||||
Singapore
Dollar
|
5,090,247 | 1.5501 | $ | 3,283,718 | $ | 3,630,782 |
Mar 2010
|
||||||||||
Purchase Contracts: | |||||||||||||||||
New Taiwan
Dollar
|
11,780,000 | 32.34 | * | $ | 364,255 | $ | 361,350 |
Nov
2009
|
Notional
Amount
|
Weighted
Avg.
|
Contract Amount at Forward
Rates in
U.S. Dollars
|
|||||||||||||||
Forward Contracts
|
in Foreign
Currency
|
Forward
Rate
|
Contract
Date
|
October 31,
2009
|
Maturity Date
|
||||||||||||
Sale
Contracts:
|
|||||||||||||||||
Euro
|
3,000,000 | 1.2936 | $ | 3,880,800 | $ | 4,417,110 |
Nov
2009
|
/s/ Michael
Doar
|
Michael
Doar,
|
Chairman
of the Board, Chief Executive Officer and President
|
/s/ John G. Oblazney
|
John
G. Oblazney,
|
Vice
President & Chief Financial Officer
|
/s/ Sonja K. McClelland
|
Sonja
K. McClelland
|
Corporate
Controller, Assistant Secretary
|
(Principal
Accounting Officer)
|
Indianapolis,
Indiana
|
January 12,
2010
|
Year Ended October
31
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(Dollars in thousands, except per
share amounts)
|
||||||||||||
Sales and service
fees
|
$ | 91,016 | $ | 223,994 | $ | 188,047 | ||||||
Cost of sales and
service
|
65,188 | 141,377 | 116,965 | |||||||||
Gross
profit
|
25,828 | 82,617 | 71,082 | |||||||||
Selling, general and
administrative expenses
|
30,874 | 46,811 | 40,124 | |||||||||
Operating income
(loss)
|
(5,046 | ) | 35,806 | 30,958 | ||||||||
Interest
expense
|
35 | 63 | 201 | |||||||||
Interest
income
|
190 | 542 | 699 | |||||||||
Investment
income
|
16 | 465 | 339 | |||||||||
Earnings (losses) from equity
investments
|
(326 | ) | 12 | 1,048 | ||||||||
Other income (expense),
net
|
1,389 | (2,596 | ) | (78 | ) | |||||||
Income (loss) before income
taxes
|
(3,812 | ) | 34,166 | 32,765 | ||||||||
Provision (benefit) for income
taxes
|
(1,491 | ) | 11,646 | 11,876 | ||||||||
Net income
(loss)
|
$ | (2,321 | ) | $ | 22,520 | $ | 20,889 | |||||
Earnings (loss) per common share –
basic
|
$ | (0.36 | ) | $ | 3.51 | $ | 3.27 | |||||
Weighted average common shares
outstanding – basic
|
6,429 | 6,415 | 6,382 | |||||||||
Earnings (loss) per common share –
diluted
|
$ | (0.36 | ) | $ | 3.49 | $ | 3.24 | |||||
Weighted average common shares
outstanding – diluted
|
6,429 | 6,444 | 6,440 |
As of October 31 | ||||||||
2009
|
2008
|
|||||||
|
(Dollars
in thousands, except per share amounts)
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 28,782 | $ | 26,394 | ||||
Short-term
investments
|
— | 6,674 | ||||||
Accounts
receivable, less allowance for doubtful accounts of $809 in
2009 and $678 in 2008
|
13,988 | 31,952 | ||||||
Refundable
taxes
|
7,121 | — | ||||||
Inventories,
net
|
60,281 | 66,368 | ||||||
Deferred
income taxes and other
|
5,890 | 5,444 | ||||||
Derivative
assets
|
376 | 12,463 | ||||||
Other
|
1,826 | 2,017 | ||||||
Total
current assets
|
118,264 | 151,312 | ||||||
Property
and equipment:
|
||||||||
Land
|
782 | 782 | ||||||
Building
|
7,116 | 7,127 | ||||||
Machinery
and equipment
|
14,995 | 14,885 | ||||||
Leasehold
improvements
|
2,021 | 1,765 | ||||||
24,914 | 24,559 | |||||||
Less
accumulated depreciation and amortization
|
(11,802 | ) | (10,961 | ) | ||||
13,112 | 13,598 | |||||||
Software
development costs, less accumulated
amortization
|
6,503 | 5,711 | ||||||
Investments
and other assets, net
|
6,864 | 6,823 | ||||||
$ | 144,743 | $ | 177,444 | |||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 7,920 | $ | 26,691 | ||||
Accounts
payable-related parties
|
342 | 1,612 | ||||||
Accrued
expenses and other
|
9,025 | 17,598 | ||||||
Accrued
warranty expenses
|
1,286 | 2,536 | ||||||
Derivative
liabilities
|
2,234 | 2,692 | ||||||
Total
current liabilities
|
20,807 | 51,129 | ||||||
Non-current
liabilities:
|
||||||||
Deferred
income taxes
|
2,570 | 2,056 | ||||||
Deferred
credits and other
|
990 | 782 | ||||||
3,560 | 2,838 | |||||||
Commitments
and contingencies
|
||||||||
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, 13,250,000 shares
authorized, 6,440,851 and 6,420,851 shares issued and outstanding in 2009
and 2008, respectively
|
644 | 642 | ||||||
Additional
paid-in capital
|
52,003 | 51,690 | ||||||
Retained
earnings
|
69,568 | 71,889 | ||||||
Accumulated
other comprehensive loss
|
(1,839 | ) | (744 | ) | ||||
Total
shareholders’ equity
|
120,376 | 123,477 | ||||||
$ | 144,743 | $ | 177,444 |
Year Ended October
31
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
|
(Dollars in
thousands)
|
|||||||||||
Cash flows from operating activities: | ||||||||||||
Net income
(loss)
|
$ | (2,321 | ) | $ | 22,520 | $ | 20,889 | |||||
Adjustments to reconcile net
income (loss) to Net cash provided by (used for) operating
activities:
|
||||||||||||
Provision for doubtful
accounts
|
131 | (73 | ) | 116 | ||||||||
Deferred income tax
provision
|
(2,824 | ) | 1,048 | 1,216 | ||||||||
Equity in (income) loss of
affiliates
|
326 | (12 | ) | (1,048 | ) | |||||||
Foreign currency (gain)
loss
|
(6,422 | ) | 8,184 | (7,602 | ) | |||||||
Unrealized (gain) loss on
derivatives
|
4,058 | (3,886 | ) | 429 | ||||||||
Depreciation and
amortization
|
3,295 | 3,023 | 2,106 | |||||||||
Stock-based
compensation
|
246 | 535 | 480 | |||||||||
Change in assets and
liabilities:
|
||||||||||||
(Increase) decrease in accounts
receivable
|
14,262 | (6,260 | ) | (1,742 | ) | |||||||
(Increase) decrease in
inventories
|
11,409 | (11,832 | ) | (14,116 | ) | |||||||
Increase (decrease) in accounts
payable
|
(20,524 | ) | (7,649 | ) | 7,821 | |||||||
Increase (decrease) in accrued
expenses
|
(9,610 | ) | 3,304 | 6,474 | ||||||||
Net change in derivative assets
and liabilities
|
3,261 | (2,158 | ) | 491 | ||||||||
Other
|
3,230 | (6,583 | ) | (1,321 | ) | |||||||
Net cash provided by (used for)
operating activities
|
(1,483 | ) | 161 | 14,193 | ||||||||
Cash flows from investing
activities:
|
||||||||||||
Proceeds from sale of property and
equipment
|
239 | 17 | — | |||||||||
Purchase of property and
equipment
|
(1,679 | ) | (4,580 | ) | (3,325 | ) | ||||||
Purchase of
investments
|
— | (9,100 | ) | (24,000 | ) | |||||||
Sale of
investments
|
6,674 | 12,100 | 14,000 | |||||||||
Software development
costs
|
(2,020 | ) | (934 | ) | (1,185 | ) | ||||||
Other proceeds
(investments)
|
(889 | ) | (80 | ) | 1,898 | |||||||
Net cash provided by (used for)
investing activities
|
2,325 | (2,577 | ) | (12,612 | ) | |||||||
Cash flows from financing
activities:
|
||||||||||||
Repayment of first
mortgage
|
— | — | (4,010 | ) | ||||||||
Tax benefit from exercise of stock
options
|
26 | 36 | 298 | |||||||||
Proceeds from exercise of common
stock options
|
43 | 151 | 186 | |||||||||
Net cash provided by (used for)
financing activities
|
69 | 187 | (3,526 | ) | ||||||||
Effect of exchange rate changes on
cash
|
1,477 | (1,137 | ) | 1,859 | ||||||||
Net increase (decrease) in
cash
|
2,388 | (3,366 | ) | (86 | ) | |||||||
Cash and cash equivalents at
beginning of year
|
26,394 | 29,760 | 29,846 | |||||||||
Cash and cash equivalents at end
of year
|
$ | 28,782 | $ | 26,394 | $ | 29,760 | ||||||
Supplemental
disclosures:
|
||||||||||||
Cash paid
for:
|
||||||||||||
Interest
|
$ | 20 | $ | 12 | $ | 157 | ||||||
Income
taxes
|
$ | 4,877 | $ | 15,799 | $ | 9,971 |
Common
Stock
|
||||||||||||||||||||||||
(Dollars
in thousands, except
Shares
Issued and Outstanding)
|
Shares
Issued
&
Outstanding
|
Amount
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
|
||||||||||||||||||
Balances,
October 31, 2006
|
6,346,520 | $ | 635 | $ | 50,011 | $ | 28,480 | $ | (3,751 | ) | $ | 75,375 | ||||||||||||
Net
income
|
— | — | — | 20,889 | — | 20,889 | ||||||||||||||||||
Translation
of foreign currency financial statements
|
— | — | — | — | 2,568 | 2,568 | ||||||||||||||||||
Unrealized
loss of derivative instruments, net of tax
|
— | — | — | — | (2,193 | ) | (2,193 | ) | ||||||||||||||||
Comprehensive
income
|
21,264 | |||||||||||||||||||||||
Exercise
of common stock options
|
45,700 | 4 | 182 | — | — | 186 | ||||||||||||||||||
Tax
benefit from exercise of stock options
|
— | — | 298 | — | — | 298 | ||||||||||||||||||
Stock-based
compensation expense
|
— | — | 480 | — | — | 480 | ||||||||||||||||||
Balances,
October 31, 2007
|
6,392,220 | 639 | 50,971 | 49,369 | (3,376 | ) | 97,603 | |||||||||||||||||
Net
income
|
— | — | — | 22,520 | — | 22,520 | ||||||||||||||||||
Translation
of foreign currency financial statements
|
— | — | — | — | (3,747 | ) | (3,747 | ) | ||||||||||||||||
Unrealized
gain of derivative instruments, net of tax
|
— | — | — | — | 6,581 | 6,581 | ||||||||||||||||||
Unrealized
loss on investments, net of tax
|
— | — | — | — | (202 | ) | (202 | ) | ||||||||||||||||
Comprehensive
income
|
25,152 | |||||||||||||||||||||||
Exercise
of common stock options
|
28,631 | 3 | 148 | — | — | 151 | ||||||||||||||||||
Tax
benefit from exercise of stock options
|
— | — | 36 | — | — | 36 | ||||||||||||||||||
Stock-based
compensation expense
|
— | — | 535 | — | — | 535 | ||||||||||||||||||
Balances,
October 31, 2008
|
6,420,851 | 642 | $ | 51,690 | 71,889 | (744 | ) | 123,477 | ||||||||||||||||
Net
loss
|
— | — | — | (2,321 | ) | — | (2,321 | ) | ||||||||||||||||
Translation
of foreign currency financial statements
|
— | — | — | — | 3,080 | 3,080 | ||||||||||||||||||
Unrealized
loss of derivative instruments, net of tax
|
— | — | — | — | (4,377 | ) | (4,377 | ) | ||||||||||||||||
Reversal
of unrealized loss on investments, net of
tax
|
— | — | — | — | 202 | 202 | ||||||||||||||||||
Comprehensive
loss
|
(3,416 | ) | ||||||||||||||||||||||
Exercise
of common stock options
|
20,000 | 2 | 41 | — | — | 43 | ||||||||||||||||||
Tax
benefit from exercise of stock options
|
— | — | 26 | — | — | 26 | ||||||||||||||||||
Stock-based
compensation expense
|
— | — | 246 | — | — | 246 | ||||||||||||||||||
Balances,
October 31, 2009
|
6,440,851 | $ | 644 | $ | 52,003 | $ | 69,568 | $ | (1,839 | ) | $ | 120,376 |
2009
|
2008
|
||||||||||
Balance
Sheet
|
Fair
|
Balance
Sheet
|
Fair
|
||||||||
Derivatives
|
Location
|
Value
|
Location
|
Value
|
|||||||
Designated as Hedging Instruments: | |||||||||||
Foreign
exchange forward contracts
|
Derivative
assets
|
$ | 74 |
Derivative
assets
|
$ | 9,733 | |||||
Foreign
exchange forward contracts
|
Derivative
liabilities
|
$ | 1,246 |
Derivative
liabilities
|
$ | 2,568 | |||||
Not Designated as Hedging Instruments: | |||||||||||
Foreign
exchange forward contracts
|
Derivative
assets
|
$ | 302 |
Derivative
assets
|
$ | 2,730 | |||||
Foreign
exchange forward contracts
|
Derivative
liabilities
|
$ | 988 |
Derivative
liabilities
|
$ | 124 |
Derivatives
|
Amount of Gain (Loss)
Recognized in Other
Comprehensive Income
|
Location of Gain (Loss)
Reclassified from Other
Comprehensive Income
|
Amount of Gain (Loss)
Reclassified from Other
Comprehensive Income
|
||||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||||||
Designated as
Hedging Instruments:
|
|||||||||||||||||
(Effective Portion) | |||||||||||||||||
Foreign
exchange forward contracts
|
$ | (435 | ) | $ | 3,938 |
Cost
of sales and service
|
$ | 989 | $ | (4,682 | ) | ||||||
(Ineffective
Portion)
|
|||||||||||||||||
Foreign
exchange forward contracts
|
N/A | N/A |
Other
income (expense)
|
$ | 2,028 | $ | (220 | ) |
Location
of Gain (Loss)
|
Amount
of Gain (Loss)
|
|||||||||
Derivatives
|
Recognized in Operations
|
Recognized in Operations
|
||||||||
2009
|
2008
|
|||||||||
Not
Designated as Hedging Instruments:
|
||||||||||
Foreign
exchange forward contracts
|
Other
income (expense)
|
$ | (643 | ) | $ | 2,979 |
Number of Years
|
|
Building
|
40
|
Machines
|
7-10
|
Shop
and office equipment
|
3-7
|
Leasehold
improvements
|
3-40
|
Fiscal Year
|
Amortization
Expense
|
|||
2010
|
$ | 1,170 | ||
2011
|
1,170 | |||
2012
|
711 | |||
2013
|
68 | |||
2014
|
29 |
Three
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||||||||||||||||||
October
31,
|
October
31,
|
|||||||||||||||||||||||||||||||
(in
thousands, except per share amount)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||||||||||||||
Net
income (loss)
|
$ | (1,163 | ) | $ | (1,163 | ) | $ | 3,422 | $ | 3,422 | $ | (2,321 | ) | $ | (2,321 | ) | $ | 20,520 | $ | 20,520 | ||||||||||||
Weighted
average shares outstanding
|
6,441 | 6,441 | 6,415 | 6,415 | 6,429 | 6,429 | 6,415 | 6,415 | ||||||||||||||||||||||||
Assumed
issuances under stock options plans
|
— | — | — | 21 | — | — | — | 29 | ||||||||||||||||||||||||
6,441 | 6,441 | 6,415 | 6,436 | 6,429 | 6,429 | 6,415 | 6,444 | |||||||||||||||||||||||||
Income
(loss) per common share
|
$ | (0.18 | ) | $ | (0.18 | ) | $ | 0.51 | $ | 0.50 | $ | (0.36 | ) | $ | (0.36 | ) | $ | 3.51 | $ | 3.49 |
2009
|
2008
|
|||||||
Purchased
parts and sub assemblies
|
$ | 14,961 | $ | 13,098 | ||||
Work-in-process
|
3,559 | 11,243 | ||||||
Finished
goods
|
41,761 | 42,027 | ||||||
$ | 60,281 | $ | 66,368 |
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Derivative
Assets
|
$ | — | $ | 376 | $ | — | $ | 376 |
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Derivative
Liabilities
|
$ | — | $ | 2,234 | $ | — | $ | 2,234 |
(in
thousands)
|
Year Ended October 31
|
|||||||||||
2009
|
2008
|
2007
|
||||||||||
Current:
|
||||||||||||
U.S.
taxes
|
$ | (5,512 | ) | $ | 8,768 | $ | 9,290 | |||||
Foreign
taxes
|
1,197 | 3,926 | 3,802 | |||||||||
(4,315 | ) | 12,694 | 13,092 | |||||||||
Deferred:
|
||||||||||||
U.S.
taxes
|
2,954 | (1,163 | ) | (1,657 | ) | |||||||
Foreign
taxes
|
(130 | ) | 115 | 441 | ||||||||
2,824 | (1,048 | ) | (1,216 | ) | ||||||||
$ | (1,491 | ) | $ | 11,646 | $ | 11,876 |
Income
(Loss) before income taxes (in thousands):
|
Year Ended October 31
|
|||||||||||
2009
|
2008
|
2007
|
||||||||||
Domestic
|
$ | (7,097 | ) | $ | 20,856 | $ | 20,463 | |||||
Foreign
|
3,286 | 13,310 | 12,302 | |||||||||
Earnings
(Loss) before taxes on income
|
$ | (3,812 | ) | $ | 34,166 | $ | 32,765 | |||||
Tax
rates:
|
||||||||||||
U.S.
statutory rate
|
35.0 | % | 35.0 | % | 35.0 | % | ||||||
Effect
of tax rate of international jurisdictions in excess of (less than) U.S.
statutory rates
|
4.4 | % | (1.9 | )% | 0.1 | % | ||||||
Valuation
allowance
|
(2.2 | )% | — | — | ||||||||
State
income taxes
|
4.7 | % | 1.9 | % | 2.4 | % | ||||||
Permanent
items
|
(12.5 | )% | 0.1 | % | 0.8 | % | ||||||
FIN48
Statute expiration
|
3.4 | % | — | — | ||||||||
All
other
|
6.3 | % | (1.0 | )% | (2.1 | )% | ||||||
Effective
tax rate
|
39.1 | % | 34.1 | % | 36.2 | % |
October 31
|
||||||||
2009
|
2008
|
|||||||
Deferred
Tax Assets and Other:
|
||||||||
Current:
|
||||||||
Inter-company
profit in inventory
|
$ | 3,220 | $ | 5,575 | ||||
Derivative
liabilities (assets)
|
268 | (2,477 | ) | |||||
Accrued
inventory reserves
|
1,068 | 1,070 | ||||||
Accrued
warranty expenses
|
59 | 148 | ||||||
Deferred
compensation
|
283 | 264 | ||||||
Other
accrued expenses
|
286 | 864 | ||||||
Foreign
net operating loss carry forward
|
86 | - | ||||||
Other
|
706 | - | ||||||
5,976 | 5,444 | |||||||
Less:
Valuation allowance on foreign net operating loss carry
forward
|
(86 | ) | - | |||||
Current
deferred tax assets and other, net
|
5,890 | 5,444 | ||||||
Deferred Tax Liabilities: | ||||||||
Non-current:
|
||||||||
Property
and equipment and capitalized software development costs
|
(3,036 | ) | (2,717 | ) | ||||
Other
|
466 | 661 | ||||||
Non-current
deferred tax liabilities, net
|
(2,570 | ) | (2,056 | ) | ||||
Net
deferred tax asset
|
$ | 3,320 | $ | 3,388 |
2009
|
2008
|
|||||||
Balance,
beginning of year
|
$ | 613 | $ | 576 | ||||
Additions
based on tax positions related to the current year
|
15 | |||||||
Additions
for tax positions of prior years
|
51 | 40 | ||||||
Reduction
for tax positions of prior years
|
- | - | ||||||
Settlements
|
- | - | ||||||
Reductions
due to statute expiration
|
(105 | ) | (3 | ) | ||||
Balance,
end of year
|
$ | 574 | $ | 613 |
United
States federal
|
Fiscal
2006 through the current period
|
Indiana
|
Fiscal
2006 through the current period
|
California
|
Fiscal
2005 through the current period
|
Germany¹
|
Fiscal
2005 through the current period
|
Taiwan
|
Fiscal
2004 through the current
period
|
Shares Under
Option
|
Weighted Average
Exercise Price Per Share
|
|||||||
Balance
October 31, 2006
|
88,700 | $ | 2.46 | |||||
Granted
|
40,000 | 26.69 | ||||||
Cancelled
|
— | — | ||||||
Expired
|
— | — | ||||||
Exercised
|
(45,700 | ) | $ | 4.08 | ||||
Balance
October 31, 2007
|
83,000 | $ | 13.24 | |||||
Granted
|
10,000 | 35.83 | ||||||
Cancelled
|
— | — | ||||||
Expired
|
— | — | ||||||
Exercised
|
(28,631 | ) | $ | 5.26 | ||||
Balance
October 31, 2008
|
64,369 | $ | 20.29 | |||||
Granted
|
21,000 | 14.88 | ||||||
Cancelled
|
— | — | ||||||
Expired
|
— | — | ||||||
Exercised
|
(20,000 | ) | $ | 2.15 | ||||
Balance October 31, 2009
|
65,369 | $ | 24.11 |
Range of Exercise
Prices Per Share
|
Shares Under
Option
|
Weighted Average
Exercise Price Per
Share
|
Weighted Average
Remaining Contractual
Life in Years
|
|||||||||
Outstanding
|
||||||||||||
$ 2.15
|
500 | $ | 2.15 | 2.1 | ||||||||
14.88
|
21,000 | 14.88 | 9.5 | |||||||||
26.69
|
33,869 | 26.69 | 7.0 | |||||||||
35.83
|
10,000 | 35.83 | 8.6 | |||||||||
$ 2.15
– 35.83
|
65,369 | $ | 24.11 | 7.5 | ||||||||
Exercisable
|
||||||||||||
$ 2.15
|
500 | $ | 2.15 | 2.1 | ||||||||
14.88
|
— | 14.88 | — | |||||||||
26.69
|
23,869 | 26.69 | 4.7 | |||||||||
35.83
|
10,000 | 35.83 | 8.6 | |||||||||
$ 2.15
– 35.83
|
34,369 | $ | 28.99 | 6.2 |
(in
thousands)
|
2009
|
2008
|
2007 (1)
|
|||||||||
Net
Sales
|
$ | 3,710 | $ | 11,935 | $ | 58,053 | ||||||
Gross
Profit
|
488 | 1,883 | 10,061 | |||||||||
Operating
Income (Loss)
|
(689 | ) | 159 | 3,757 | ||||||||
Net
Income (Loss)
|
(1,203 | ) | 147 | 3,467 | ||||||||
Current
Assets
|
$ | 6,110 | $ | 8,658 | $ | 36,945 | ||||||
Non-current
Assets
|
1,742 | 2,195 | 10,636 | |||||||||
Current
Liabilities
|
1,211 | 3,176 | 18,785 |
2009
|
2008
|
|||||||
Balance,
beginning of year
|
$ | 2,536 | $ | 2,449 | ||||
Provision
for warranties during the period
|
799 | 2,944 | ||||||
Charges
to the accrual
|
(2,096 | ) | (2,666 | ) | ||||
Impact
of foreign currency translation
|
47 | (189 | ) | |||||
Balance,
end of year
|
$ | 1,286 | $ | 2,536 |
2010
|
$ | 1,915 | ||
2011
|
1,224 | |||
2012
|
778 | |||
2013
|
581 | |||
2014
|
282 | |||
Total
|
$ | 4,780 |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
2009 (In thousands, except per share
data)
|
||||||||||||||||
Sales
and service fees
|
$ | 28,307 | $ | 20,489 | $ | 19,039 | $ | 23,181 | ||||||||
Gross
profit
|
8,542 | 5,220 | 5,251 | 6,815 | ||||||||||||
Gross
profit margin
|
30.2 | % | 25.5 | % | 27.6 | % | 29.4 | % | ||||||||
Selling,
general and administrative expenses
|
8,029 | 7,518 | 7,200 | 8,127 | ||||||||||||
Operating
income (loss)
|
513 | (2,298 | ) | (1,949 | ) | (1,312 | ) | |||||||||
Provision
(benefit) for income taxes
|
195 | (207 | ) | (552 | ) | (927 | ) | |||||||||
Net
income (loss)
|
354 | (281 | ) | (1,231 | ) | (1,163 | ) | |||||||||
Income
(loss) per common share – basic
|
$ | 0.06 | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.18 | ) | |||||
Income
(loss) per common share – diluted
|
$ | 0.05 | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.18 | ) | |||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
2008 (In thousands, except per share
data)
|
||||||||||||||||
Sales
and service fees
|
$ | 60,923 | $ | 58,285 | $ | 57,318 | $ | 47,468 | ||||||||
Gross
profit
|
24,857 | 20,331 | 20,879 | 16,550 | ||||||||||||
Gross
profit margin
|
40.8 | % | 34.9 | % | 36.4 | % | 34.9 | % | ||||||||
Selling,
general and administrative expenses
|
12,376 | 11,676 | 11,829 | 10,930 | ||||||||||||
Operating
income
|
12,481 | 8,655 | 9,050 | 5,620 | ||||||||||||
Provision
for income taxes
|
4,522 | 3,054 | 2,954 | 1,116 | ||||||||||||
Net
income
|
7,805 | 5,467 | 5,826 | 3,422 | ||||||||||||
Income
per common share – basic
|
$ | 1.22 | $ | 0.85 | $ | 0.91 | $ | 0.51 | ||||||||
Income
per common share – diluted
|
$ | 1.21 | $ | 0.85 | $ | 0.90 | $ | 0.50 |
Net
Sales and Service Fees by Product Category
|
Year ended October 31,
|
|||||||||||
2009
|
2008
|
2007
|
||||||||||
Computerized
Machine Tools
|
$ | 75,213 | $ | 199,238 | $ | 165,832 | ||||||
Computer
Control Systems and Software *
|
2,546 | 5,678 | 5,291 | |||||||||
Service
Parts
|
8,851 | 13,240 | 12,096 | |||||||||
Service
Fees
|
4,406 | 5,838 | 4,828 | |||||||||
Total
|
$ | 91,016 | $ | 223,994 | $ | 188,047 |
Revenues
by Geographic Area
|
Year Ended October 31
|
|||||||||||
2009
|
2008
|
2007
|
||||||||||
North
America
|
$ | 25,203 | $ | 48,087 | $ | 50,010 | ||||||
Germany
|
26,273 | 81,945 | 58,860 | |||||||||
United
Kingdom
|
11,242 | 20,877 | 19,326 | |||||||||
Italy
|
4,969 | 10,329 | 9,389 | |||||||||
France
|
4,486 | 13,412 | 11,019 | |||||||||
Other
Europe
|
11,372 | 36,202 | 25,856 | |||||||||
Total
Europe
|
58,342 | 162,765 | 124,450 | |||||||||
Asia
|
5,557 | 11,816 | 12,493 | |||||||||
Other
Foreign
|
1,914 | 1,326 | 1,094 | |||||||||
Total
Foreign
|
65,813 | 175,907 | 138,037 | |||||||||
$ | 91,016 | $ | 223,994 | $ | 188,047 |
As
of October 31
|
||||||||
2009
|
2008
|
|||||||
United
States
|
$ | 7,942 | $ | 8,421 | ||||
Foreign
countries
|
7,048 | 6,996 | ||||||
$ | 14,990 | $ | 15,417 |
As of October 31
|
||||||||
2009
|
2008
|
|||||||
North
America
|
$ | 63,659 | $ | 73,793 | ||||
Europe
|
41,824 | 36,008 | ||||||
Asia
|
14,893 | 13,676 | ||||||
$ | 120,376 | $ | 123,477 |
10/04 | 10/05 | 10/06 | 10/07 | 10/08 | 10/09 | ||||||||||||||
Hurco
Companies, Inc.
|
100.00 | 124.42 | 181.86 | 398.46 | 157.01 | 110.96 | |||||||||||||
Russell
2000
|
100.00 | 112.08 | 134.47 | 146.94 | 96.74 | 102.99 | |||||||||||||
Peer
Group - SIC Codes 3540-3549
|
100.00 | 106.59 | 111.11 | 137.94 | 73.10 | 73.45 |
Plan Category
|
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights (a) (#)
|
Weighted-average
exercise price
of outstanding
options,
warrants and
rights (b) ($)
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a) (c) (#)
|
|||||||||
Equity
compensation plans approved by security holders
|
65,369 | $ | 24.11 | 719,000 | ||||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
65,369 | $ | 24.11 | 719,000 |
(a)
|
1.
|
Financial
Statements. The following consolidated financial
statements of Registrant are included herein under Item 8 of Part
II:
|
Page
|
||
Report
of Independent Registered Public Accounting Firm – Ernst & Young
LLP
|
28
|
|
Report
of Independent Registered Public Accounting Firm – Crowe Horwath
LLP
|
30
|
|
Consolidated
Statements of Operations – years ended
October 31, 2009, 2008 and 2007 |
31
|
|
Consolidated
Balance Sheets – as of October 31, 2009 and 2008
|
32
|
|
Consolidated
Statements of Cash Flows – years
ended October 31, 2009, 2008 and 2007 |
33
|
|
Consolidated
Statements of Changes in Shareholders’ Equity –
years ended October 31, 2009, 2008 and 2007 |
34
|
|
Notes
to Consolidated Financial Statements
|
35
|
|
2.
|
Financial Statement
Schedule. The following financial statement schedule is
included in this Item.
|
Page
|
|
Schedule
II - Valuation and Qualifying Accounts and Reserves
|
57
|
|
All
other financial statement schedules are omitted because they are not
applicable or the required information is included in the consolidated
financial statements or notes
thereto.
|
(b)
|
Exhibits
|
|
Exhibits
being filed with this Form 10-K or incorporated herein by reference are
listed on page 58.
|
Description
|
Balance at
Beginning
of Period
|
Charged to
Costs and
Expenses
|
Charged
To Other
Accounts
|
Deductions
|
Balance
At End
Of Period
|
|||||||||||||||
Allowance
for doubtful Accounts for the year ended:
|
||||||||||||||||||||
October
31,
2009
|
$ | 678 | $ | 736 | — | $ | 605 |
(1)
|
$ | 809 | ||||||||||
October
31,
2008
|
$ | 751 | $ | (42 | ) | — | $ | 31 |
(2)
|
$ | 678 | |||||||||
October
31,
2007
|
$ | 635 | $ | 128 | — | $ | 12 |
(3)
|
$ | 751 | ||||||||||
Accrued
warranty expenses For the year ended:
|
||||||||||||||||||||
October
31,
2009
|
$ | 2,536 | $ | 846 | — | $ | 2,096 | $ | 1,286 | |||||||||||
October
31,
2008
|
$ | 2,449 | $ | 2,755 | — | $ | 2,666 | $ | 2,536 | |||||||||||
October
31,
2007
|
$ | 1,926 | $ | 2,610 | — | $ | 2,087 | $ | 2,449 |
10.1*
|
Summary
compensation sheet.
|
|
21
|
Subsidiaries
of the Registrant.
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm, Ernst & Young
LLP
|
|
23.2
|
Consent
of Independent Registered Public Accounting Firm, Crowe Horwath
LLP
|
|
31.1
|
Certification
by the Chief Executive Officer, pursuant to Rule 13a-15(b) under the
Securities and Exchange Act of 1934, as amended.
|
|
31.2
|
Certification
by the Chief Financial Officer, pursuant to Rule 13a-15(b) under the
Securities and Exchange Act of 1934, as amended.
|
|
32.1
|
Certification
by the Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification
by the Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
3.1
|
Amended
and Restated Articles of Incorporation of the Registrant, incorporated by
reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended July 31, 2000.
|
|
3.2
|
Amended
and Restated By-Laws of the Registrant as amended through July 8, 2009,
incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly
Report on Form 10-Q for the quarter ended July 31,
2009.
|
|
10.2
|
Credit
Agreement dated as of December 7, 2007, between Hurco Companies, Inc. and
JP Morgan Chase Bank, N.A. incorporated by reference to Exhibit 10.1 to
the Registrant’s Current Report on Form 8-K filed December 12,
2007.
|
|
10.3
|
First
Amendment to Credit Agreement dated as of October 30, 2009, between Hurco
Companies, Inc. and JP Morgan Chase Bank, N.A. incorporated by reference
to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed
November 4, 2009.
|
|
10.4*
|
Employment
Agreement between the Registrant and John G. Oblazney dated January 12,
2007, incorporated by reference to Exhibit 10.1 to the Registrant’s Annual
Report on Form 10-K for the year ended October 31,
2006.
|
|
10.5*
|
Separation
and Release Agreement between the Registrant and James D. Fabris dated
October 1, 2009, incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K filed on October 2,
2009.
|
|
10.6*
|
Employment
Agreement between the Registrant and Michael Doar dated November 13, 2001,
incorporated by reference as Exhibit 10.2 to the Registrant’s Quarterly
Report on Form 10-Q for the quarter ended January 31,
2002.
|
|
10.7*
|
Amended
1997 Stock Option and Incentive Plan incorporated by reference as Exhibit
10 to the Registrant’s Quarterly Report on Form 10-Q filed for the quarter
ended July 31, 2005.
|
|
10.8
|
Hurco
Companies, Inc. 2008 Equity Incentive Plan incorporated by reference to
Appendix A of the Registrant’s definitive Proxy Statement on Schedule 14A
filed January 28, 2008.
|
|
10.9*
|
Form
of restated split-dollar insurance agreement incorporated by reference to
Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the year
ended October 31, 2008.
|
*
|
The
indicated exhibit is a management contract, compensatory plan or
arrangement required to be listed by Item 601 of Regulation
S-K.
|
HURCO
COMPANIES, INC.
|
|||
By:
|
/s/ John G. Oblazney
|
||
John
G. Oblazney
|
|||
Vice-President,
Secretary,
|
|||
Treasurer
and
|
|||
Chief
Financial
Officer
|
Signature and Title(s)
|
Date
|
|
/s/ Michael Doar
|
January
12, 2010
|
|
Michael
Doar, Chairman of the Board,
|
||
Chief
Executive Officer and President
|
||
of
Hurco Companies, Inc.
|
||
(Principal
Executive Officer)
|
||
/s/ John G. Oblazney
|
January
12, 2010
|
|
John
G. Oblazney
|
||
Vice-President,
|
||
Secretary,
Treasurer and
|
||
Chief
Financial Officer
|
||
of
Hurco Companies, Inc.
|
||
(Principal
Financial Officer)
|
||
/s/ Sonja K. McClelland
|
January
12, 2010
|
|
Sonja
K. McClelland
|
||
Corporate
Controller, Assistant Secretary
|
||
of
Hurco Companies, Inc.
|
||
(Principal
Accounting Officer)
|
/s/ Stephen H. Cooper
|
January
12, 2010
|
|
Stephen
H. Cooper, Director
|
||
/s/ Robert W. Cruickshank
|
January
12, 2010
|
|
Robert
W. Cruickshank, Director
|
||
/s/ Philip James
|
January
12, 2010
|
|
Philip
James, Director
|
||
/s/ Michael P. Mazza
|
January
12, 2010
|
|
Michael
P. Mazza, Director
|
||
/s/ Richard T. Niner
|
January
12, 2010
|
|
Richard
T. Niner, Director
|
||
/s/ Charlie Rentschler
|
January
12, 2010
|
|
Charlie
Rentschler, Director
|
||
/s/ Janaki Sivanesan
|
January
12, 2010
|
|
Janaki
Sivanesan, Director
|
|
·
|
Audit
Committee Chair - $4,750 per fiscal
quarter.
|
|
·
|
All
other Committee Chairs - $2,375 per fiscal
quarter.
|
|
·
|
Audit
Committee Members - $2,375 per fiscal
quarter
|
Michael
Doar
Chairman,
Chief Executive Officer and
President
|
$ | 337,500 | ||
John
G. Oblazney
Vice
President, Secretary, Treasurer and
Chief
Financial Officer
|
$ | 185,000 | ||
Sonja
K. McClelland
Corporate
Controller and
Assistant
Secretary
|
$ | 130,000 |
Jurisdiction
|
||
Name
|
Of Incorporation
|
|
Hurco
B.V.
|
the
Netherlands
|
|
Hurco
Europe Limited
|
United
Kingdom
|
|
Hurco
GmbH
|
Federal
Republic of Germany
|
|
Hurco
Manufacturing Ltd.
|
Taiwan
R.O.C.
|
|
Hurco
S.a.r.l.
|
France
|
|
Hurco
S.r.l.
|
Italy
|
|
Hurco
(S.E. Asia) Pte Ltd.
|
Singapore
|
|
Ningbo
Hurco Machine Tool Company, Ltd.
|
China
|
|
1.
|
I
have reviewed this annual report on Form 10-K of Hurco Companies,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures [as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal
control over financial reporting [as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)] for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financing reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with U.S. Generally Accepted Accounting
Principles.
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
/s/ Michael Doar
|
Michael
Doar,
|
Chairman
of the Board, Chief Executive Officer and President
|
January
12, 2010
|
|
1.
|
I
have reviewed this annual report on Form 10-K of Hurco Companies,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures [as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal
control over financial reporting [as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)] for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financing reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with U.S. Generally Accepted Accounting
Principles.
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
/s/ John G.
Oblazney
|
John
G. Oblazney
|
Vice
President & Chief Financial
Officer
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934;
and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
/s/Michael Doar
|
Michael
Doar
|
Chairman
of the Board, Chief Executive Officer and President
|
January
12, 2010
|
/s/John G.
Oblazney
|
John
G. Oblazney
|
Vice
President & Chief Financial Officer
|
January
12, 2010
|