x
|
Annual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended October 31, 2010
or
|
¨
|
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)
|
Registrant’s
telephone number, including area code
|
(317)
293-5309
|
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,
|
|||||||||||||||||||||||
2010
|
2009
|
2008
|
||||||||||||||||||||||
Continuing
Products and Services
|
||||||||||||||||||||||||
Computerized
Machine Tools
|
$ | 88,184 | 83.3 | % | $ | 75,213 | 82.7 | % | $ | 199,238 | 89.0 | % | ||||||||||||
Computer
Control Systems and Software *
|
2,347 | 2.2 | % | 2,546 | 2.8 | % | 5,678 | 2.5 | % | |||||||||||||||
Service
Parts
|
10,798 | 10.2 | % | 8,851 | 9.7 | % | 13,240 | 5.9 | % | |||||||||||||||
Service
Fees
|
4,564 | 4.3 | % | 4,406 | 4.8 | % | 5,838 | 2.6 | % | |||||||||||||||
Total
|
$ | 105,893 | 100 | % | $ | 91,016 | 100 | % | $ | 223,994 | 100 | % |
|
•
|
maximize
the efficiency of their human
resources
|
|
•
|
make
more advanced and complex parts from a wide range of materials using
multiple processes
|
|
•
|
incorporate
fast moving changes in technology into their operations to keep their
competitive edge
|
|
•
|
integrate
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
|
||||||
2010
|
$ | 2,200 | $ | 1,200 | ||||
2009
|
2,500 | 2,000 | ||||||
2008
|
3,000 | 900 |
|
·
|
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
|
229,100 | ||||
Ningbo,
China
|
61,200 | |||||
Sales,
design engineering, product testing and customer service.
|
Dexter,
Michigan, USA
|
3,000 | ||||
Sales,
application engineering & customer service.
|
Mississauga,
Canada
|
3,600 | ||||
High
Wycombe, England
|
12,000 | |||||
Benoni,
South Africa
|
2,500 | |||||
Paris
and Toulouse, France
|
11,100 | |||||
Munich, Hagen
and Roedermark, Germany
|
24,200 | |||||
Milan,
Italy
|
10,800 | |||||
Tegelen,
the Netherlands
|
800 | |||||
South
Korea
|
700 | |||||
Singapore
|
6,300 | |||||
Shanghai,
China
|
8,000 | |||||
Guangzhou,
China
|
4,000 | |||||
Ningbo,
China
|
3,200 | |||||
Chennai,
India
|
6,100 | |||||
Liegnitz,
Poland
|
2,900 | |||||
Grand
Rapids, Michigan, USA
|
5,000 | |||||
Ball
Ground, Georgia, USA
|
2,300 | |||||
Warehouse,
distribution, sales, application engineering and customer
service.
|
Los
Angeles, California, USA
|
13,100 |
|
(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
|
55
|
Chairman of the Board,
Chief Executive Officer and President
|
||
John
G. Oblazney
|
42
|
Vice
President, Secretary, Treasurer and Chief Financial
Officer
|
||
John
P. Donlon
|
53
|
Executive
Vice President, Worldwide Sales and Service
|
||
Sonja
K. McClelland
|
39
|
Corporate
Controller, Assistant Secretary
|
||
Gregory
S. Volovic
|
46
|
Executive
Vice President of Technology and
Operations
|
2010
|
2009
|
|||||||||||||||
Fiscal Quarter Ended:
|
High
|
Low
|
High
|
Low
|
||||||||||||
January
31
|
$ | 18.59 | $ | 13.83 | $ | 24.68 | $ | 11.81 | ||||||||
April
30
|
20.18 | 16.11 | 16.97 | 8.30 | ||||||||||||
July
31
|
19.50 | 14.29 | 19.89 | 12.01 | ||||||||||||
October
31
|
19.15 | 15.53 | 20.45 | 15.26 |
Year Ended October 31
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Statement
of Operations Data:
|
(Dollars
in thousands, except per share amounts)
|
|||||||||||||||||||
Sales
and service fees
|
$ | 105,893 | $ | 91,016 | $ | 223,994 | $ | 188,047 | $ | 148,517 | ||||||||||
Gross
profit
|
21,796 | 25,828 | 82,617 | 71,082 | 53,325 | |||||||||||||||
Selling,
general and administrative expenses
|
29,837 | 30,874 | 46,811 | 40,124 | 30,697 | |||||||||||||||
Operating
income (loss)
|
(8,041 | ) | (5,046 | ) | 35,806 | 30,958 | 22,628 | |||||||||||||
Other
income (expense)
|
(818 | ) | 1,234 | (1,640 | ) | 1,742 | 745 | |||||||||||||
Net
income (loss)
|
(5,744 | ) | (2,321 | ) | 22,520 | 20,889 | 15,479 | |||||||||||||
Earnings
(loss) per common share- diluted
|
(0.89 | ) | (0.36 | ) | 3.49 | 3.24 | 2.42 | |||||||||||||
Weighted
average common shares outstanding-diluted
|
6,441 | 6,429 | 6,444 | 6,440 | 6,397 |
As of October 31
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Balance Sheet Data:
|
(Dollars in thousands)
|
|||||||||||||||||||
Current
assets
|
$ | 136,208 | $ | 118,264 | $ | 151,312 | $ | 139,265 | $ | 103,434 | ||||||||||
Current
liabilities
|
42,240 | 20,807 | 51,129 | 63,215 | 44,340 | |||||||||||||||
Working
capital
|
93,968 | 97,457 | 100,183 | 76,050 | 59,094 | |||||||||||||||
Current
ratio
|
3.2 | 5.7 | 3.0 | 2.2 | 2.3 | |||||||||||||||
Total
assets
|
160,346 | 144,743 | 177,444 | 163,781 | 125,545 | |||||||||||||||
Non-current
liabilities
|
3,366 | 3,560 | 2,838 | 2,963 | 5,830 | |||||||||||||||
Total
debt
|
— | — | — | — | 4,010 | |||||||||||||||
Shareholders’
equity
|
114,740 | 120,376 | 123,477 | 97,603 | 75,375 |
Percentage of Revenues
|
Year-to-Year % Change
|
|||||||||||||||||||
2010
|
2009
|
2008
|
Increase (Decrease)
|
|||||||||||||||||
’10 vs. ’09
|
’09 vs. ’08
|
|||||||||||||||||||
Sales
and service fees
|
100.0 | % | 100.0 | % | 100.0 | % | 16.3 | % | (59.4 | )% | ||||||||||
Gross
profit
|
20.6 | % | 28.4 | % | 36.9 | % | (15.6 | )% | (68.7 | )% | ||||||||||
Selling,
general and administrative expenses
|
28.2 | % | 33.9 | % | 20.9 | % | (3.4 | )% | (34.0 | )% | ||||||||||
Operating
income (loss)
|
(7.6 | )% | (5.5 | )% | 16.0 | % | (59.4 | )% | (114.1 | )% | ||||||||||
Other
income (expense)
|
(0.8 | )% | 1.4 | % | (0.7 | )% | (166.3 | )% | 175.2 | % | ||||||||||
Net
income (loss)
|
(5.4 | )% | (2.6 | )% | 10.1 | % | (147.5 | )% | (110.3 | )% |
October 31,
|
Increase (Decrease)
|
|||||||||||||||||||||||
2010
|
2009
|
Amount
|
%
|
|||||||||||||||||||||
North
America
|
$ | 27,818 | 26.3 | % | $ | 25,652 | 28.2 | % | $ | 2,167 | 8.4 | % | ||||||||||||
Europe
|
65,678 | 62.0 | % | 60,132 | 66.1 | % | 5,547 | 9.2 | % | |||||||||||||||
Asia
Pacific
|
12,397 | 11.7 | % | 5,232 | 5.7 | % | 7,163 | 136.9 | % | |||||||||||||||
Total
|
$ | 105,893 | 100.0 | % | $ | 91,016 | 100.0 | % | $ | 14,877 | 16.3 | % |
October 31,
|
Increase
|
|||||||||||||||||||||||
2010
|
2009
|
Amount
|
%
|
|||||||||||||||||||||
Computerized
Machine Tools
|
$ | 88,184 | 83.3 | % | $ | 75,213 | 82.6 | % | $ | 12,971 | 17.2 | % | ||||||||||||
Service
Fees, Parts and Other
|
17,709 | 16.7 | % | 15,803 | 17.4 | % | $ | 1,906 | 12.1 | % | ||||||||||||||
Total
|
$ | 105,893 | 100.0 | % | $ | 91,016 | 100.0 | % | $ | 14,877 | 16.3 | % |
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 | )% |
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 Year
|
1-3
Years
|
3-5
Years
|
More
than 5
Years
|
||||||||||||||||
Operating
Leases
|
$ | 5,061 | $ | 2,329 | $ | 2,173 | $ | 463 | $ | 96 | ||||||||||
Other
|
1,031 | — | — | — | 1,031 | |||||||||||||||
Total
|
$ | 6,092 | $ | 2,329 | $ | 2,173 | $ | 463 | $ | 1,127 |
Contract
Amount at
|
|||||||||||||||||
Notional
|
Weighted
|
Forward
Rates in
|
|||||||||||||||
Amount
|
Avg.
|
U.S.
Dollars
|
|||||||||||||||
Forward
|
in
Foreign
|
Forward
|
Contract
|
October
31,
|
Maturity
|
||||||||||||
Contracts
|
Currency
|
Rate
|
Date
|
2010
|
Dates
|
||||||||||||
Sale
Contracts:
|
|||||||||||||||||
Euro
|
20,875,000 | 1.3195 | $ | 27,543,690 | $ | 28,937,664 |
Nov
2010-Oct 2011
|
||||||||||
Sterling
|
4,205,000 | 1.5373 | $ | 6,464,410 | $ | 6,725,763 |
Nov
2010-Oct 2011
|
||||||||||
Purchase
Contracts:
|
|||||||||||||||||
New
Taiwan Dollar
|
884,000,000 | 30.75 | * | $ | 28,751,939 | $ | 29,201,543 |
Nov
2010-Oct
2011
|
Contract
Amount at Forward
|
|||||||||||||||||
Notional
|
Weighted
|
Rates
in
|
|||||||||||||||
Amount
in
|
Avg.
|
U.S.
Dollars
|
|||||||||||||||
|
Foreign
|
Forward
|
Contract
|
October
31,
|
|
||||||||||||
Forward Contracts
|
Currency
|
Rate
|
Date
|
2010
|
Maturity Dates
|
||||||||||||
Sale
Contracts:
|
|||||||||||||||||
Euro
|
6,043,892 | 1.3773 | $ | 8,324,386 | $ | 8,389,553 |
Nov
2010 – Mar 2011
|
||||||||||
Pound
Sterling
|
469,366 | 1.5688 | $ | 736,345 | $ | 751,749 |
Nov
2010
|
||||||||||
Canadian
Dollar
|
438,485 | 0.9657 | $ | 423,453 | $ | 429,273 |
Dec
2010
|
||||||||||
South
African Rand
|
3,714,740 | 0.1391 | $ | 516,761 | $ | 523,283 |
Jan
2011
|
||||||||||
Singapore
Dollar
|
1,638,828 | 0.7132 | $ | 1,168,755 | $ | 1,265,795 |
Mar
2011
|
||||||||||
Purchase
Contracts:
|
|||||||||||||||||
New
Taiwan Dollar
|
325,443,155 | 30.41 | * | $ | 10,702,938 | $ | 10,647,022 |
Nov
2010 – Dec
2010
|
Notional
Amount
|
Weighted
Avg.
|
Contract
Amount at Forward
Rates
in
U.S. Dollars
|
|||||||||||||||
Forward Contracts
|
in
Foreign
Currency
|
Forward
Rate
|
Contract
Date
|
October
31,
2010
|
Maturity Date
|
||||||||||||
Sale
Contracts:
|
|||||||||||||||||
Euro
|
3,000,000 | 1.4896 | $ | 4,468,800 | $ | 4,168,230 |
Nov
2010
|
/s/ Michael
Doar
|
/s/ John G.
Oblazney
|
/s/ Sonja K.
McClelland
|
Year Ended October 31
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In
thousands, except per share amounts)
|
||||||||||||
Sales
and service fees
|
$ | 105,893 | $ | 91,016 | $ | 223,994 | ||||||
Cost
of sales and service
|
84,097 | 65,188 | 141,377 | |||||||||
Gross
profit
|
21,796 | 25,828 | 82,617 | |||||||||
Selling,
general and administrative expenses
|
29,837 | 30,874 | 46,811 | |||||||||
Operating
income (loss)
|
(8,041 | ) | (5,046 | ) | 35,806 | |||||||
Interest
expense
|
49 | 35 | 63 | |||||||||
Interest
income
|
86 | 190 | 542 | |||||||||
Investment
income
|
14 | 16 | 465 | |||||||||
Earnings
(losses) from equity investments
|
(149 | ) | (326 | ) | 12 | |||||||
Other
(income) expense, net
|
720 | (1,389 | ) | 2,596 | ||||||||
Income
(loss) before income taxes
|
(8,859 | ) | (3,812 | ) | 34,166 | |||||||
Provision
(benefit) for income taxes
|
(3,115 | ) | (1,491 | ) | 11,646 | |||||||
Net
income (loss)
|
$ | (5,744 | ) | $ | (2,321 | ) | $ | 22,520 | ||||
Earnings
(loss) per common share – basic
|
$ | (0.89 | ) | $ | (0.36 | ) | $ | 3.51 | ||||
Weighted
average common shares outstanding – basic
|
6,441 | 6,429 | 6,415 | |||||||||
Earnings
(loss) per common share – diluted
|
$ | (0.89 | ) | $ | (0.36 | ) | $ | 3.49 | ||||
Weighted
average common shares outstanding – diluted
|
6,441 | 6,429 | 6,444 |
As
of October 31
|
||||||||
2010
|
2009
|
|||||||
(
In thousands, except share and per share data)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 48,255 | $ | 28,782 | ||||
Accounts
receivable, less allowance for doubtful accounts of $497 in
2010 and $809 in 2009
|
20,114 | 13,988 | ||||||
Refundable
taxes
|
5,093 | 7,121 | ||||||
Inventories,
net
|
55,866 | 60,281 | ||||||
Deferred
income taxes, net
|
2,467 | 2,670 | ||||||
Derivative
assets
|
905 | 376 | ||||||
Other
|
3,508 | 5,046 | ||||||
Total
current assets
|
136,208 | 118,264 | ||||||
Property
and equipment:
|
||||||||
Land
|
782 | 782 | ||||||
Building
|
7,116 | 7,116 | ||||||
Machinery
and equipment
|
15,095 | 14,995 | ||||||
Leasehold
improvements
|
2,183 | 2,021 | ||||||
25,176 | 24,914 | |||||||
Less
accumulated depreciation and amortization
|
(13,424 | ) | (11,802 | ) | ||||
11,752 | 13,112 | |||||||
Software
development costs, less accumulated amortization
|
6,042 | 6,503 | ||||||
Investments
and other assets, net
|
6,344 | 6,864 | ||||||
$ | 160,346 | $ | 144,743 | |||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 28,715 | $ | 7,920 | ||||
Accounts
payable-related parties
|
1,679 | 342 | ||||||
Accrued
expenses and other
|
8,132 | 9,025 | ||||||
Accrued
warranty expenses
|
1,591 | 1,286 | ||||||
Derivative
liabilities
|
2,123 | 2,234 | ||||||
Total
current liabilities
|
42,240 | 20,807 | ||||||
Non-current
liabilities:
|
||||||||
Deferred
income taxes, net
|
2,335 | 2,570 | ||||||
Deferred
credits and other
|
1,031 | 990 | ||||||
3,366 | 3,560 | |||||||
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 and 6,440,851 shares issued and outstanding
|
644 | 644 | ||||||
Additional
paid-in capital
|
52,144 | 52,003 | ||||||
Retained
earnings
|
63,824 | 69,568 | ||||||
Accumulated
other comprehensive loss
|
(1,872 | ) | (1,839 | ) | ||||
Total
shareholders’ equity
|
114,740 | 120,376 | ||||||
$ | 160,346 | $ | 144,743 |
Year Ended October 31
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In
thousands)
|
||||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income (loss)
|
$ | (5,744 | ) | $ | (2,321 | ) | $ | 22,520 | ||||
Adjustments
to reconcile net income (loss) to net cash provided by (used for)
operating activities:
|
||||||||||||
Provision
for doubtful accounts
|
(312 | ) | 131 | (73 | ) | |||||||
Changes
in deferred income taxes
|
(216 | ) | (2,824 | ) | 1,048 | |||||||
Equity
in (income) loss of affiliates
|
149 | 326 | (12 | ) | ||||||||
Foreign
currency (gain) loss
|
1,927 | (6,422 | ) | 8,184 | ||||||||
Unrealized
(gain) loss on derivatives
|
(624 | ) | 4,058 | (3,886 | ) | |||||||
Depreciation
and amortization
|
3,804 | 3,295 | 3,023 | |||||||||
Stock-based
compensation
|
141 | 246 | 535 | |||||||||
Change
in assets and liabilities:
|
||||||||||||
(Increase)
decrease in accounts receivable and refundable taxes
|
(4,047 | ) | 14,262 | (6,260 | ) | |||||||
(Increase)
decrease in inventories
|
4,154 | 11,409 | (11,832 | ) | ||||||||
Increase
(decrease) in accounts payable
|
21,114 | (20,524 | ) | (7,649 | ) | |||||||
Increase
(decrease) in accrued expenses
|
(398 | ) | (9,610 | ) | 3,304 | |||||||
Net
change in derivative assets and liabilities
|
(174 | ) | 3,261 | (2,158 | ) | |||||||
Other
|
1,978 | 3,230 | (6,583 | ) | ||||||||
Net
cash provided by (used for) operating activities
|
21,752 | (1,483 | ) | 161 | ||||||||
Cash
flows from investing activities:
|
||||||||||||
Proceeds
from sale of property and equipment
|
40 | 239 | 17 | |||||||||
Purchase
of property and equipment
|
(632 | ) | (1,679 | ) | (4,580 | ) | ||||||
Purchase
of investments
|
— | — | (9,100 | ) | ||||||||
Sale
of investments
|
— | 6,674 | 12,100 | |||||||||
Software
development costs
|
(1,216 | ) | (2,020 | ) | (934 | ) | ||||||
Other
proceeds (investments)
|
50 | (889 | ) | (80 | ) | |||||||
Net
cash provided by (used for) investing activities
|
(1,758 | ) | 2,325 | (2,577 | ) | |||||||
Cash
flows from financing activities:
|
||||||||||||
Tax
benefit from exercise of stock options
|
— | 26 | 36 | |||||||||
Proceeds
from exercise of common stock options
|
— | 43 | 151 | |||||||||
Net
cash provided by financing activities
|
— | 69 | 187 | |||||||||
Effect
of exchange rate changes on cash
|
(521 | ) | 1,477 | (1,137 | ) | |||||||
Net
increase (decrease) in cash
|
19,473 | 2,388 | (3,366 | ) | ||||||||
Cash
and cash equivalents at beginning of year
|
28,782 | 26,394 | 29,760 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 48,255 | $ | 28,782 | $ | 26,394 | ||||||
Supplemental
disclosures:
|
||||||||||||
Cash
paid for (refunds of):
|
||||||||||||
Interest
|
$ | 18 | $ | 4 | $ | — | ||||||
Income
taxes, net
|
$ | (6,211 | ) | $ | 3,844 | $ | 15,790 |
Common
Stock
|
||||||||||||||||||||||||
(Dollars
in thousands)
|
Shares
Issued
&
Outstanding
|
Amount
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
|
||||||||||||||||||
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
|
— | — | — | — | 2,716 | 2,716 | ||||||||||||||||||
Realized
gains on derivative instruments reclassified into operations, net of tax
of $366
|
— | — | — | — | 623 | 623 | ||||||||||||||||||
Unrealized
loss of derivative instruments, net of tax $(2,706)
|
— | — | — | — | (4,434 | ) | (4,434 | ) | ||||||||||||||||
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 | ||||||||||||
Net
loss
|
— | — | — | (5,744 | ) | — | (5,744 | ) | ||||||||||||||||
Translation
of foreign currency financial statements
|
— | — | — | — | (50 | ) | (50 | ) | ||||||||||||||||
Realized
losses on derivative instruments reclassified into operations, net of tax
of $(11)
|
— | — | — | — | (19 | ) | (19 | ) | ||||||||||||||||
Unrealized
gains of derivative instruments, net of tax of $20
|
— | — | — | — | 36 | 36 | ||||||||||||||||||
Comprehensive
loss
|
(5,777 | ) | ||||||||||||||||||||||
Exercise
of common stock options
|
— | — | — | — | — | — | ||||||||||||||||||
Tax
benefit from exercise of stock options
|
— | — | — | — | — | — | ||||||||||||||||||
Stock-based
compensation expense
|
— | — | 141 | — | — | 141 | ||||||||||||||||||
Balances,
October 31, 2010
|
6,440,851 | $ | 644 | $ | 52,144 | $ | 63,824 | $ | (1,872 | ) | $ | 114,740 |
2010
|
2009
|
||||||||||
Balance
Sheet
|
Fair
|
Balance
Sheet
|
Fair
|
||||||||
Derivatives
|
Location
|
Value
|
Location
|
Value
|
|||||||
Designated as Hedging Instruments: | |||||||||||
Foreign
exchange forward contracts
|
Derivative
assets
|
$ | 872 |
Derivative
assets
|
$ | 74 | |||||
Foreign
exchange forward contracts
|
Derivative
liabilities
|
$ | 1,778 |
Derivative
liabilities
|
$ | 1,246 | |||||
Not Designated as Hedging Instruments: | |||||||||||
Foreign
exchange forward contracts
|
Derivative
assets
|
$ | 33 |
Derivative
assets
|
$ | 302 | |||||
Foreign
exchange forward contracts
|
Derivative
liabilities
|
$ | 345 |
Derivative
liabilities
|
$ | 988 |
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
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
||||||||||||||
Designated
as Hedging Instruments:
(Effective
Portion)
|
|||||||||||||||||
Foreign
exchange forward contracts – Intercompany
sales/purchases
|
$ | 56 | $ | (7,140 | ) |
Cost
of sales and service
|
$ | (30 | ) | $ | 989 | ||||||
Foreign
exchange forward contract – Net Investment
|
$ | 228 | $ | (589 | ) |
Location
of Gain (Loss)
|
Amount
of Gain (Loss)
|
|||||||||||
Derivatives
|
Recognized
in Operations
|
Recognized
in Operations
|
||||||||||
2010
|
2009
|
|||||||||||
Not
Designated as Hedging Instruments:
|
||||||||||||
Foreign
exchange forward contracts
|
Other
income (expense)
|
$ | 539 | $ | (4,699 | ) |
Number of Years
|
||
Building
|
40
|
|
Machines
|
7-10
|
|
Shop
and office equipment
|
3-7
|
|
Leasehold
improvements
|
|
3-40
|
Fiscal Year
|
Amortization
Expense
|
|||
2011
|
$ | 2,212 | ||
2012
|
1,753 | |||
2013
|
793 | |||
2014
|
535 | |||
2015
|
317 |
Twelve
Months Ended
|
||||||||||||||||||||||||
(in thousands, except per share amount) |
October 31,
|
|||||||||||||||||||||||
|
2010
|
2009
|
2008
|
|||||||||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||||||||
Net
income (loss)
|
$ | (5,744 | ) | $ | (5,744 | ) | $ | (2,321 | ) | $ | (2,321 | ) | $ | 20,520 | $ | 20,520 | ||||||||
Weighted
average shares
|
||||||||||||||||||||||||
outstanding
|
6,441 | 6,441 | 6,429 | 6,429 | 6,415 | 6,415 | ||||||||||||||||||
Assumed
issuances under
|
||||||||||||||||||||||||
stock
options plans
|
— | — | — | — | — | 29 | ||||||||||||||||||
6,441 | 6,441 | 6,429 | 6,429 | 6,415 | 6,444 | |||||||||||||||||||
Income
(loss) per common share
|
$ | (0.89 | ) | $ | (0.89 | ) | $ | (0.36 | ) | $ | (0.36 | ) | $ | 3.51 | $ | 3.49 |
2010
|
2009
|
|||||||
Purchased
parts and sub-assemblies
|
$ | 16,137 | $ | 14,961 | ||||
Work-in-process
|
13,157 | 3,559 | ||||||
Finished
goods
|
26,572 | 41,761 | ||||||
$ | 55,866 | $ | 60,281 |
Assets
|
Liabilities
|
|||||||||||||||
October
31,
|
October
31,
|
October
31,
|
October
31,
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Level 1
|
||||||||||||||||
Deferred
Compensation
|
$ | 674 | $ | 642 | $ | - | $ | - | ||||||||
Level 2
|
||||||||||||||||
Derivatives
|
$ | 905 | $ | 376 | $ | 2,123 | $ | 2,234 |
(in
thousands)
|
Year
Ended October 31
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Current:
|
||||||||||||
U.S.
taxes
|
$ | (4,410 | ) | $ | (5,512 | ) | $ | 8,768 | ||||
Foreign
taxes
|
1,079 | 1,197 | 3,926 | |||||||||
(3,331 | ) | (4,315 | ) | 12,694 | ||||||||
Deferred:
|
||||||||||||
U.S.
taxes
|
189 | 2,954 | (1,163 | ) | ||||||||
Foreign
taxes
|
27 | (130 | ) | 115 | ||||||||
216 | 2,824 | (1,048 | ) | |||||||||
$ | (3,115 | ) | $ | (1,491 | ) | $ | 11,646 |
Income
(Loss) before income taxes (in thousands):
|
Year Ended October 31
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Domestic
|
$ | (12,504 | ) | $ | (7,098 | ) | $ | 20,856 | ||||
Foreign
|
3,645 | 3,286 | 13,310 | |||||||||
Earnings
(Loss) before taxes on income
|
$ | (8,859 | ) | $ | (3,812 | ) | $ | 34,166 | ||||
Tax
rates:
|
||||||||||||
U.S.
statutory rate
|
35.0 | % | 35.0 | % | 35.0 | % | ||||||
Effect
of tax rate of international jurisdictions
|
||||||||||||
different
than U.S. statutory rates
|
2.6 | % | 4.4 | % | (1.9 | )% | ||||||
Valuation
allowance
|
(9.5 | )% | (2.2 | )% | — | |||||||
State
taxes
|
3.3 | % | 4.7 | % | 1.9 | % | ||||||
Uncertain
tax position statute expiration
|
5.6 | % | 3.4 | % | — | |||||||
Other
|
(1.8 | )% | (6.2 | )% | (0.9 | )% | ||||||
Effective
tax rate
|
35.2 | % | 39.1 | % | 34.1 | % |
October
31
|
||||||||
2010
|
2009
|
|||||||
Deferred
Tax Assets:
|
||||||||
Net
derivative instrument
|
162 | 268 | ||||||
Accrued
inventory reserves
|
801 | 1,068 | ||||||
Accrued
warranty expenses
|
212 | 59 | ||||||
Deferred
compensation
|
256 | 283 | ||||||
Other
accrued expenses
|
756 | 286 | ||||||
Net
operating loss and credit carryforwards
|
1,401 | 715 | ||||||
Other
|
267 | 620 | ||||||
3,855 | 3,299 | |||||||
Less:
Valuation allowance on net operating loss carryforwards
|
(961 | ) | (163 | ) | ||||
Deferred
tax assets
|
2,894 | 3,136 | ||||||
Deferred
Tax Liabilities:
|
||||||||
Property
and equipment and capitalized software development costs
|
(2,762 | ) | (3,036 | ) | ||||
Net
deferred tax assets
|
$ | 132 | $ | 100 |
2010
|
2009
|
2008
|
||||||||||
Balance,
beginning of year
|
$ | 574 | $ | 613 | $ | 576 | ||||||
Additions
based on tax positions related to the current year
|
- | 15 | - | |||||||||
Additions
for tax positions of prior years
|
1 | 51 | 40 | |||||||||
Reductions
due to statute expiration
|
(397 | ) | (105 | ) | (3 | ) | ||||||
Balance,
end of year
|
$ | 178 | $ | 574 | $ | 613 |
United
States federal
|
Fiscal
2007 through the current period
|
Indiana
|
Fiscal
2007 through the current period
|
California
|
Fiscal
2006 through the current period
|
Germany¹
|
Fiscal
2005 through the current period
|
Taiwan
|
Fiscal
2005 through the current
period
|
Shares Under
Option
|
Weighted Average
Exercise Price Per Share
|
|||||||
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 | |||||
Granted
|
50,000 | 16.14 | ||||||
Cancelled
|
— | — | ||||||
Expired
|
— | — | ||||||
Exercised
|
— | — | ||||||
Balance
October 31, 2010
|
115,369 | $ | 20.66 |
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 | 1.1 | ||||||||
14.82
|
30,000 | 14.82 | 9.1 | |||||||||
14.88
|
21,000 | 14.88 | 8.5 | |||||||||
18.13
|
20,000 | 18.13 | 9.5 | |||||||||
26.69
|
33,869 | 26.69 | 6.0 | |||||||||
35.83
|
10,000 | 35.83 | 7.6 | |||||||||
$ 2.15 – 35.83
|
115,369 | $ | 20.66 | 7.9 | ||||||||
Exercisable
|
||||||||||||
$2.15
|
500 | $ | 2.15 | 1.1 | ||||||||
14.88
|
7,000 | 14.88 | 8.5 | |||||||||
26.69
|
33,869 | 26.69 | 6.0 | |||||||||
35.83
|
10,000 | 35.83 | 7.6 | |||||||||
$ 2.15 – 35.83
|
51,369 | $ | 26.62 | 5.9 |
(in
thousands)
|
2010
|
2009
|
2008
|
|||||||||
Net
Sales
|
$ | 7,057 | $ | 3,710 | $ | 11,935 | ||||||
Gross
Profit
|
816 | 488 | 1,883 | |||||||||
Operating
Income (Loss)
|
(399 | ) | (689 | ) | 159 | |||||||
Net
Income (Loss)
|
(337 | ) | (1,203 | ) | 147 | |||||||
Current
Assets
|
$ | 7,439 | $ | 6,110 | $ | 8,658 | ||||||
Non-current
Assets
|
1,846 | 1,742 | 2,195 | |||||||||
Current
Liabilities
|
2,529 | 1,211 | 3,176 |
2010
|
2009
|
2008
|
||||||||||
Balance,
beginning of year
|
$ | 1,286 | $ | 2,536 | $ | 2,449 | ||||||
Provision
for warranties during the period
|
2,170 | 799 | 2,944 | |||||||||
Charges
to the accrual
|
(1,875 | ) | (2,096 | ) | (2,666 | ) | ||||||
Impact
of foreign currency translation
|
10 | 47 | (189 | ) | ||||||||
Balance,
end of year
|
$ | 1,591 | $ | 1,286 | $ | 2,536 |
2011
|
$ | 2,329 | ||
2012
|
1,378 | |||
2013
|
795 | |||
2014
|
368 | |||
2015
and thereafter
|
191 | |||
Total
|
$ | 5,061 |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
2010 (In thousands, except per share
data)
|
||||||||||||||||
Sales
and service fees
|
$ | 20,616 | $ | 24,088 | $ | 26,474 | $ | 34,715 | ||||||||
Gross
profit
|
3,980 | 4,677 | 4,659 | 8,480 | ||||||||||||
Gross
profit margin
|
19.3 | % | 19.4 | % | 17.6 | % | 24.4 | % | ||||||||
Selling,
general and administrative expenses
|
6,533 | 7,230 | 6,994 | 9,080 | ||||||||||||
Operating
income (loss)
|
(2,553 | ) | (2,553 | ) | (2,335 | ) | (600 | ) | ||||||||
Provision
(benefit) for income taxes
|
(983 | ) | (1,096 | ) | (1,210 | ) | 174 | |||||||||
Net
income (loss)
|
(1,836 | ) | (1,573 | ) | (1,173 | ) | (1,162 | ) | ||||||||
Income
(loss) per common share – basic
|
$ | (0.29 | ) | $ | (0.24 | ) | $ | (0.18 | ) | $ | (0.18 | ) | ||||
Income
(loss) per common share – diluted
|
$ | (0.29 | ) | $ | (0.24 | ) | $ | (0.18 | ) | $ | (0.18 | ) |
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 | ) |
Net
Sales and Service Fees by Product Category
|
Year ended October
31,
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Computerized
Machine Tools
|
$ | 88,184 | $ | 75,213 | $ | 199,238 | ||||||
Computer
Control Systems and Software *
|
2,347 | 2,546 | 5,678 | |||||||||
Service
Parts
|
10,798 | 8,851 | 13,240 | |||||||||
Service
Fees
|
4,564 | 4,406 | 5,838 | |||||||||
Total
|
$ | 105,893 | $ | 91,016 | $ | 223,994 |
Revenues
by Geographic Area
|
Year Ended October
31
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
North
America
|
$ | 26,079 | $ | 25,203 | $ | 48,087 | ||||||
Germany
|
25,887 | 26,273 | 81,945 | |||||||||
United
Kingdom
|
13,703 | 11,242 | 20,877 | |||||||||
Italy
|
5,863 | 4,969 | 10,329 | |||||||||
France
|
6,061 | 4,486 | 13,412 | |||||||||
Other
Europe
|
12,185 | 11,372 | 36,202 | |||||||||
Total
Europe
|
63,699 | 58,342 | 162,765 | |||||||||
Asia
|
13,697 | 5,557 | 11,816 | |||||||||
Other
Foreign
|
2,418 | 1,914 | 1,326 | |||||||||
Total
Foreign
|
79,814 | 65,813 | 175,907 | |||||||||
$ | 105,893 | $ | 91,016 | $ | 223,994 |
As
of October 31
|
||||||||
2010
|
2009
|
|||||||
United
States
|
$ | 6,998 | $ | 7,942 | ||||
Foreign
countries
|
6,277 | 7,048 | ||||||
$ | 13,275 | $ | 14,990 |
As of October
31
|
||||||||
2010
|
2009
|
|||||||
North
America
|
$ | 55,961 | $ | 63,659 | ||||
Europe
|
41,737 | 41,824 | ||||||
Asia
|
17,042 | 14,893 | ||||||
$ | 114,740 | $ | 120,376 |
10/05 | 10/06 | 10/07 | 10/08 | 10/09 | 10/10 | |||||||||||||||||||
Hurco
Companies, Inc.
|
100.00 | 146.16 | 320.25 | 126.19 | 89.19 | 103.20 | ||||||||||||||||||
Russell
2000
|
100.00 | 119.98 | 131.10 | 86.32 | 91.89 |
116.31
|
||||||||||||||||||
Peer
Group - SIC Codes 3540-3549
|
100.00 | 119.03 | 168.84 | 84.92 | 107.93 | 149.54 |
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
|
115,369 | $ | 20.66 | 669,000 | ||||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
115,369 | $ | 20.66 | 669,000 |
(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, 2010, 2009 and
2008
|
31
|
|||
Consolidated
Balance Sheets – as of October 31, 2010 and 2009
|
32
|
|||
Consolidated
Statements of Cash Flows – years ended October 31, 2010, 2009 and
2008
|
33
|
|||
Consolidated
Statements of Changes in Shareholders’ Equity – years ended October
31, 2010, 2009 and 2008
|
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, 2010
|
$ | 809 | $ | (301 | ) | — | $ | 11 | (1) | $ | 497 | |||||||||
October
31, 2009
|
$ | 678 | $ | 736 | — | $ | 605 | (2) | $ | 809 | ||||||||||
October
31, 2008
|
$ | 751 | $ | (42 | ) | — | $ | 31 | (3) | $ | 678 | |||||||||
Accrued
warranty expenses for the year ended:
|
||||||||||||||||||||
October
31, 2010
|
$ | 1,286 | $ | 2,180 | — | $ | 1,875 | $ | 1,591 | |||||||||||
October
31, 2009
|
$ | 2,536 | $ | 846 | — | $ | 2,096 | $ | 1,286 | |||||||||||
October
31, 2008
|
$ | 2,449 | $ | 2,755 | — | $ | 2,666 | $ | 2,536 |
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, 2011
|
|
Michael
Doar, Chairman of the Board,
|
||
Chief
Executive Officer and President
|
||
of
Hurco Companies, Inc.
|
||
(Principal
Executive Officer)
|
||
/s/ John G. Oblazney
|
January
12, 2011
|
|
John
G. Oblazney
|
||
Vice-President,
|
||
Secretary,
Treasurer and
|
||
Chief
Financial Officer
|
||
of
Hurco Companies, Inc.
|
||
(Principal
Financial Officer)
|
||
/s/ Sonja K. McClelland
|
January
12, 2011
|
|
Sonja
K. McClelland
|
||
Corporate
Controller, Assistant Secretary
|
||
of
Hurco Companies, Inc.
|
||
(Principal
Accounting Officer)
|
||
/s/ Stephen H. Cooper
|
January
12, 2011
|
|
Stephen
H. Cooper, Director
|
||
/s/ Robert W. Cruickshank
|
January
12, 2011
|
|
Robert
W. Cruickshank, Director
|
||
/s/ Philip James
|
January
12, 2011
|
|
Philip
James, Director
|
||
/s/ Michael P. Mazza
|
January
12, 2011
|
|
Michael
P. Mazza, Director
|
||
/s/ Richard T. Niner
|
January
12, 2011
|
|
Richard
T. Niner, Director
|
||
/s/ Charlie Rentschler
|
January
12, 2011
|
|
Charlie
Rentschler, Director
|
||
/s/ Janaki Sivanesan
|
January
12, 2011
|
|
Janaki
Sivanesan, Director
|
|
·
|
Audit
Committee Chair - $5,000 per fiscal
quarter.
|
|
·
|
All
other Committee Chairs - $2,500 per fiscal
quarter.
|
|
·
|
Audit
Committee Members - $2,500 per fiscal
quarter
|
Michael
Doar
Chairman,
Chief Executive Officer and President
|
$ | 375,000 | ||
John
G. Oblazney
Vice
President, Secretary, Treasurer and Chief
Financial Officer
|
$ | 190,000 | ||
John
P. Donlon
Executive
Vice President, Worldwide Sales and Service
|
$ | 200,000 | ||
Sonja
K. McClelland
Corporate
Controller and Assistant
Secretary
|
$ | 145,000 | ||
Gregory
S. Volovic
Executive
Vice President of Technology and Operations
|
$ | 215,000 |
Name
|
Jurisdiction of
Incorporation
|
|
Hurco
B.V.
Hurco
Canada
|
the
Netherlands
Canada
|
|
Hurco
Europe Limited
|
United
Kingdom
|
|
Hurco
GmbH
Hurco
India Private, Ltd.
|
Federal
Republic of Germany
India
|
|
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, 2011
|
|
I,
John G. Oblazney, certify that:
|
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
|
|
January
12, 2011
|
(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, 2011
|
/s/ John G. Oblazney
|
|
John
G. Oblazney
|
|
Vice
President & Chief Financial Officer
|
|
January
12, 2011
|