SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 10, 2003 HURCO COMPANIES, INC. (Exact name of registrant as specified in its charter) INDIANA 0-9143 35-1150732 (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation or organization) Identification No.) ONE TECHNOLOGY WAY INDIANAPOLIS, INDIANA 46268 (Address of principal executive offices and zip code) (317) 293-5309 (Registrants' telephone number, including area code) NOT APPLICABLE (Former name or former address, if changed since last report)ITEM 12. RESULTS OF OPERATION AND FINANCIAL CONDITION On December 10, 2003, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the fiscal year ended October 31, 2003. The Registrant's earnings release for the period is attached as Exhibit 99(a) 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 12 of Form 8-K.
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. Dated: December 10, 2003 HURCO COMPANIES, INC. By: /s/ Roger J. Wolf Roger J. Wolf Senior Vice President and Chief Financial Officer
FOR IMMEDIATE RELEASE Exhibit 99(a) Wednesday, December 10, 2003 HURCO REPORTS FYE 2003 AND FOURTH QUARTER RESULTS INDIANAPOLIS, INDIANA, -- December 10, 2003 -- Hurco Companies, Inc. (Nasdaq:HURC) today reported net income of $462,000, or $.08 per share, for its fiscal year ended October 31, 2003 compared to a net loss of $8,263,000, or $1.48 per share, reported for fiscal 2002. For the final quarter of fiscal 2003, the Company reported net income of $574,000, or $.10 per share, compared to a net loss of $1,760,000, or $.32 per share, for the corresponding 2002 period. The Company attributed its return to profitability in fiscal 2003 to strengthening European currencies in relation to the U.S. dollar, a significant increase in fourth quarter sales and service fees and the benefits of restructuring actions implemented over the past 18 months. Results for fiscal 2002 also were adversely impacted by $3,838,000 of restructuring expense. Sales and service fees for fiscal 2003 were $75,532,000, compared to $70,486,000 recorded a year ago. Sales and service fees reported in U.S. dollars benefited from significantly stronger European currencies, when translating foreign sales for financial reporting purposes. When measured at constant exchange rates, sales and service fees for the year declined $1,837,000, or 3%, from the 2002 period, due to reduced shipments in Europe. For the fourth quarter, sales and service fees were $23,772,000, compared to $18,767,000 recorded in the corresponding 2002 period. When measured at constant exchange rates, sales and service fees increased $3,143,000, or 17%, from the prior year period due to increases in the United States, Europe and Asia of $770,000, $1,730,000 and $643,000, respectively. New order bookings in fiscal 2003 totaled $77,851,000, a 16% increase over the $66,992,000 of new order bookings in the prior year. For the fourth quarter of 2003, new order bookings were $24,508,000, an increase of 41% from the $17,405,000 recorded in the fourth quarter of fiscal 2002. When measured in constant dollars, new order bookings in the fourth quarter of 2003 increased $4,876,000, or 28% over those in the fourth quarter of fiscal 2002, due to increases in the United States, Europe and Asia of $330,000, $3,346,000 and $1,200,000, respectively. Backlog was $8,153,000 at October 31, 2003, compared to $7,280,000 at July 31, 2003, and $5,315,000 at October 31, 2002. Gross margin in fiscal 2003 increased to 27.6% compared to 23.2% (exclusive of an inventory write-down of $1,083,000) realized in 2002. The improvement is attributable to cost reductions, improved product mix and the strengthening of European currencies in relation to the U.S. dollar. Selling, general and administrative expenses in fiscal 2003 were $18,749,000, a reduction of $900,000, or 5%, from the prior year. When measured in constant exchange rates, selling general and administrative expenses decreased $2,077,000, or 11%. The Company also announced that on December 5, 2003 it amended and restated its bank credit agreement. The amendment extends the maturity date of the facility to December 1, 2006, increases the maximum permitted borrowings from $7,000,000 to $8,000,000 and in addition, provides for a separate, collateralized credit facility of GBP 1,000,000 (approximately $1,700,000) for the Company's subsidiary in the United Kingdom. Total debt was $9,222,000 at October 31, 2003, as compared to $8,885,000 at October 31, 2002, and constituted 24% of total capitalization. As of October 31, 2003, the Company had unutilized credit facilities of $6,351,000 available for direct borrowing or commercial letters of credit.The Company further announced that during the fourth quarter, it settled the disputed claim in the United Kingdom regarding a terminated facility lease for $1,150,000, which had been previously accrued. The payment will be made in the first quarter of fiscal 2004 and will be funded through cash flow from operations and borrowings available from bank credit facilities. Michael Doar, Chief Executive Officer stated, "2003 was a difficult year for the machine tool industry. Nevertheless, due to the restructuring we have done over the last 18 months, we were able to achieve a small profit in 2003. We benefited somewhat by the strengthening of the Euro over the course of the year. We are very pleased by the remarkable success of our new product, the VM1. This entry-level machine is particularly important in our U.S. market and has been an important factor in increasing our market share in the United States. The entering into the new loan agreement with our bank is important as we can now focus all our efforts on improving our business and selling more machines. We are cautiously optimistic about our outlook for 2004 and look forward to the challenges ahead." 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 primarily 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.
Hurco Companies, Inc. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per-share data) Three Months Ended Twelve Months Ended October 31, October 31, 2003 2002 2003 2002 --------- -------- -------- --------- Sales and service fees $23,772 $ 18,767 $75,532 $70,486 Cost of sales and service 17,146 13,788 54,710 54,157 Cost of sales - restructuring - - - 1,083 --------- -------- -------- --------- Gross profit 6,626 4,979 20,822 15,246 Selling, general and administrative expenses 5,426 5,237 18,749 19,658 Restructuring and other expense, net (124) 1,004 (124) 2,755 --------- -------- -------- --------- Operating income (loss) 1,324 (1,262) 2,197 (7,167) License fee income, net - - - 163 Interest expense 182 165 658 634 Other income (expense), net (124) (26) (119) (36) --------- -------- -------- --------- Income (loss) before taxes 1,018 (1,453) 1,420 (7,674) Provision for income taxes 444 307 958 589 --------- -------- -------- --------- Net income (loss) $ 574 $ (1,760) $ 462 $ (8,263) ========= ========== ======== ========= Earnings (loss) per common share Basic $ 0.10 $ (0.32) $ 0.08 $ (1.48) ========= ========== ======== ========= Diluted $ 0.10 $ (0.32) $ 0.08 $ (1.48) ========= ========== ======== ========= Weighted average common shares outstanding Basic 5,578 5,583 5,582 5,583 ========= ========== ======== ========= Diluted 5,612 5,583 5,582 5,583 ========= ========== ======== =========
OTHER CONSOLIDATED FINANCIAL DATA Three Months Ended Twelve Months Ended October 31, October 31, Operating Data: 2003 2002 2003 2002 ---------- --------- --------- --------- Gross margin, excluding restructuring charges 27.9% 26.5% 27.6% 23.2% SG&A expense as a percentage of sales 22.8% 27.9% 24.8% 27.9% Operating income (loss) as a percentage of sales 5.6% -6.7% 2.9% -10.2% Pre-tax income (loss) as a percentage of sales 4.3% -7.7% 1.9% -10.9% Depreciation and amortization 356 454 1,429 1,929 Capital expenditures 380 203 1,215 1,716 Balance Sheet Data: 10/31/2003 10/31/2002 ---------- ---------- Working capital (excluding short term debt) $ 22,881 $ 21,663 Days sales outstanding 39 44 Inventory turns 2.3 2.3 Net assets per $ of revenue (trailing twelve months) Working capital, net $ 0.30 $ 0.31 All other 0.20 0.22 ------- ------ Total $ 0.50 $ 0.53 ======= ======
Hurco Companies, Inc. CONDENSED CONSOLIDATED BALANCE SHEET (In thousands, except per-share data) October 31, October 31, 2003 2002 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $ 5,289 $ 4,358 Cash - restricted 622 - Accounts receivable 12,823 13,425 Inventories 22,247 22,548 Other 1,409 1,204 -------- ------- Total current assets 42,390 41,535 Property and equipment: Land 761 761 Building 7,239 7,203 Machinery and equipment 10,568 10,144 Leasehold improvements 544 396 -------- ------- 19,112 18,504 Less accumulated depreciation and amortization (10,730) (9,696) -------- ------- 8,382 8,808 Software development costs, less amortization 1,922 1,604 Investments and other assets 5,264 5,205 -------- ------- $ 57,958 $ 57,152 ======== ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 9,461 $ 9,856 Accrued expenses 10,048 10,016 Current portion of long-term debt 645 1,313 -------- ------- Total current liabilities 20,154 21,185 Non-current liabilities: Long-term debt 8,577 7,572 Deferred credits and other obligations 486 378 -------- ------- Total liabilities 29,217 29,135 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; 12,500,000 shares authorized; and 5,583,158 and 5,580,658 shares issued, respectively 556 558 Additional paid-in capital 44,696 44,717 Accumulated deficit (9,711) (10,173) Accumulated other comprehensive income (6,800) (7,085) -------- ------- Total shareholders' equity 28,741 28,017 -------- ------- $ 57,958 $ 57,152 ======= =======