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) December 6, 2005
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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
December
6, 2005, Hurco Companies, Inc. (the "Registrant") reported its results of
operations for the year ended October 31, 2005. 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.
The
press
release includes net income and earnings per diluted share excluding
the
effects of an adjustment for tax benefits. The measurements of net
income
and earnings per share before the adjustment for tax benefits are non-GAAP
financial measures. The Company believes that a reconciliation of non-GAAP
financial measures to the most directly comparable GAAP financial measures
is
unnecessary because the GAAP financial measures and the adjustments
are set
forth in the release. The Company believes the presentation of these non-GAAP
financial measures allows investors to compare results with prior periods in
which there were no comparable tax benefits. The Company does not use these
financial measures for any other purpose.
Item
9.01 Financial
Statements and Exhibits.
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99
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Press
Release dated December 6, 2005
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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:
December 6, 2005
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HURCO
COMPANIES, INC
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By:
/s/
Stephen J. Alesia
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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 December 6, 2005
FOR
IMMEDIATE RELEASE
TUESDAY,
DECEMBER 6, 2005
HURCO
REPORTS RECORD FULL-YEAR AND FOURTH QUARTER RESULTS
INDIANAPOLIS,
INDIANA, — December 6, 2005—Hurco Companies, Inc. (Nasdaq:HURC)
today
announced net income of $16,443,000, or $2.60 per share, for its fiscal year
ended October 31, 2005. Net income includes a favorable non-cash adjustment
recorded in the fourth quarter of approximately $2,340,000, or $.37 per share,
due to the reversal of previously-established deferred tax valuation allowances
as a result of the company’s determination that the benefits of domestic tax
credits and European net operating loss carryforwards are likely to be realized.
Excluding the benefits of this adjustment, net income for fiscal 2005 was equal
to a record $14,103,000, or $2.23 per share, compared to $6,269,000, or $1.04
per share, for fiscal 2004. The Company expects to be fully taxable in fiscal
2006.
For
the
final quarter of fiscal 2005, which also benefited from the non-cash adjustment,
net income was $7,235,000, or $1.13 per share. Fourth quarter net income
excluding the benefits of the adjustment was a record $4,895,000, or $.77 per
share, compared to $2,281,000, or $.36 per share, for the corresponding 2004
period.
Sales
and
service fees for fiscal 2005 were the highest in the company’s 37-year history,
totaling $125,509,000, an increase of $25,937,000, or 26%, over fiscal 2004.
The
increase represented operational growth of 23.5% and a favorable currency
translation impact of 2.5%. Computerized machine tool sales, which also were
the
highest in the company’s history, totaled $107,313,000, an increase of 28% from
the $83,663,000 recorded in 2004 primarily driven by strong worldwide demand
for
our existing products. Approximately $6,000,000, or 25%, of the increase in
sales of computerized machine tools was the result of sales of our new lathe
machine line, which was introduced in December of 2004. Sales and service fees
for the fourth quarter of fiscal 2005 were also a record and totaled
$34,718,000, an increase of $5,867,000, or 20%, over the corresponding period
of
2004.
New
order
bookings in fiscal 2005 were a record amount and totaled $122,862,000,
representing an increase of $19,362,000, or 19%, over the prior year.
Approximately $2,432,000 of the increase was attributable to the effects of
currency translation. Unit orders increased 18% in the United States, 15% in
Europe and 13% in Asia. New order bookings for the fourth quarter of fiscal
2005
also were a record, totaling $34,155,000, an increase of $3,995,000, or 13%,
over the corresponding 2004 period. Backlog was $10,031,000 at October 31,
2005,
compared to $10,566,000 at July 31, 2005, and $12,746,000 at October 31,
2004.
Hurco’s
gross margin for fiscal 2005 was 33.9% compared to 30.4% for the prior year,
reflecting the benefits of higher unit sales. Selling, general and
administrative expenses were $26,057,000 for fiscal 2005, an increase of
$4,191,000 over the amount recorded for 2004.
Operating
income for fiscal 2005 was $16,501,000, or 13.1% of sales, compared to
$8,432,000, or 8.5% of sales, in the prior year. Operating income in the fourth
quarter totaled $5,318,000, or 15.3% of sales, compared to $2,470,000, or 8.6%
of sales, in the same period one year ago.
Cash
totaled $17,559,000 at October 31, 2005 compared to $8,526,000 at October 31,
2004. Total debt was $4,136,000 at October 31, 2005 and represented 6.6% of
the
company’s total capitalization, which aggregated $63,080,000.
Michael
Doar, Chief Executive Officer, stated, "I am extremely pleased with the
financial results achieved in fiscal 2005. We were able to grow sales by $25
million while generating $12 million of cash from operations and only increasing
inventory and accounts receivable by $3.4 million. This efficient use of our
working capital demonstrates how well our business model functions. I am most
thankful to our dedicated employees for their outstanding performance in
executing our business strategy.
Order
intake throughout our worldwide markets strengthened during the year and our
new
products continued to gain acceptance in the market. We
are
anticipating another strong year in fiscal 2006 driven by growth from our
existing operations, new product introductions and new opportunities in emerging
markets. We are also beginning a new production cost reduction program, which
will make our machines even more competitive in our existing and new markets.
I
was
very happy with the customer response to our existing and new machine tool
models at the EMO Trade Show in September in Hanover Germany.”
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 and Singapore,
along with manufacturing operations in Taiwan. Products are sold through
independent agents and distributors in the United States, Europe and Asia.
The
Company also has direct sales forces in the United Kingdom, Germany, France,
Italy, 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, quality and delivery
performance by our contract manufacturers and governmental actions and
initiatives including import and export restrictions and
tariffs.
Contact:
Stephen J. Alesia
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 October 31,
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Twelve
Months Ended October 31,
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2005
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2004
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2005
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2004
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(audited)
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(audited)
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Sales
and service fees
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$
34,718
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$
28,851
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$
125,509
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$
99,572
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Cost
of sales and service
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22,530
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19,810
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82,951
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69,274
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Cost
of sales - restructuring
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-
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-
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-
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-
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Gross
profit
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12,188
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9,041
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42,558
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30,298
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Selling,
general and administrative expenses
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6,870
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6,106
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26,057
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21,401
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Severance
expense
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-
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465
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-
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465
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Operating
income
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5,318
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2,470
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16,501
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8,432
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License
fee income, net
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-
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-
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-
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-
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Interest
expense
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107
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94
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355
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468
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Variable
Option Expense
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-
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-
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-
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322
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Other
income (expense), net
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196
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45
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(64)
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(74)
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Income
before taxes
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5,407
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2,421
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16,082
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7,568
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Provision
(benefit) for income taxes
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(1,828)
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140
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(361)
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1,299
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Net
income
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$
7,235
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$
2,281
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$
16,443
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$
6,269
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Earnings
per common share
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Basic
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$
1.16
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$
0.38
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$
2.66
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$
1.08
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Diluted
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$
1.13
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$
0.36
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$
2.60
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$
1.04
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Weighted
average common shares outstanding
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Basic
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6,216
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5,969
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6,171
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5,784
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Diluted
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6,384
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6,263
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6,336
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6,026
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OTHER
CONSOLIDATED FINANCIAL DATA
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Three
Months Ended October 31,
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Twelve
Months Ended October 31,
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Operating
Data:
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2005
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2004
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2005
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2004
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(audited)
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(audited)
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Gross
margin
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35.1%
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31.3%
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33.9%
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30.4%
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SG&A
expense as a percentage of sales
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19.8%
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21.2%
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20.8%
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21.5%
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Operating
income as a percentage of sales
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15.3%
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8.6%
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13.1%
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8.5%
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Income
before taxes as a percentage of sales
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15.6%
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8.4%
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12.8%
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7.6%
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Depreciation
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387
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291
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1,332
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1,223
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Capital
expenditures
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1,284
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371
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3,040
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2,103
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Balance
Sheet Data:
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10/31/2005
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10/31/2004
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Working
capital (excluding short term debt)
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$
43,183
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$
26,664
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Days
sales outstanding
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41
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38
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Inventory
turns
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2.6
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2.3
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Capitalization
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Total
debt
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$
4,136
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$
4,600
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Shareholders'
equity
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58,944
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38,455
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Total
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$
63,080
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$
43,055
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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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October
31,
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October
31,
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2005
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2004
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(audited)
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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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$
17,559
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$
8,249
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Cash
- restricted
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-
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277
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Accounts
receivable
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20,100
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17,337
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Inventories
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29,530
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28,937
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Deferred
tax assets
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3,043
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-
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Other
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3,586
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1,672
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Total
current assets
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73,818
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56,472
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Property
and equipment:
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Land
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761
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761
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Building
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7,205
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7,205
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Machinery
and equipment
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13,170
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12,106
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Leasehold
improvements
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1,102
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676
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22,238
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20,748
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Less
accumulated depreciation and amortization
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(13,187)
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(12,512)
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9,051
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8,236
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Deferred
tax assets
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1,346
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-
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Software
development costs, less amortization
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3,752
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2,920
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Investments
and other assets
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6,147
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5,818
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$
94,114
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$
73,446
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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Current
liabilities:
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Accounts
payable
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$
17,051
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$
18,361
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Accrued
expenses
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13,584
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11,447
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Current
portion of long-term debt
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126
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|
317
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Total
current liabilities
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30,761
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30,125
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Non-current
liabilities:
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Long-term
debt
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4,010
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4,283
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Deferred
credits and other obligations
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399
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583
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Total
liabilities
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35,170
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34,991
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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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-
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-
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authorized;
no shares issued
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Common
stock: no par value; $.10 stated value per share;
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|||
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12,500,000
shares authorized; and 6,220,220 and
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|||
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6,019,594
shares issued, respectively
|
622
|
|
602
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Additional
paid-in capital
|
48,701
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|
46,778
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Retained
earnings (deficit)
|
13,001
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(3,442)
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Accumulated
other comprehensive income
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(3,380)
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(5,483)
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Total
shareholders' equity
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58,944
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|
38,455
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$
94,114
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$
73,446
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