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 7, 2007
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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 7, 2007, Hurco Companies,
Inc. (the "Registrant") reported its results of operations for the fourth
quarter ended October 31, 2007. The Registrant's earnings release for
the period is attached as Exhibit 99 and the information set forth therein
is
incorporated herein by reference and constitutes a part of this
report. The attached Exhibit is furnished pursuant to Item 2.02
of Form 8-K.
Item
9.01 Financial
Statements and Exhibits.
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99
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Press
Release dated December 7, 2007
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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
7, 2007
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HURCO
COMPANIES, INC
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By: /s/
John G. Oblazney
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Vice
President and
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Chief
Financial Officer
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EXHIBIT
INDEX
Exhibit
99 Press
Release of Hurco Companies, Inc. dated December 7, 2007
Exhibit
99
FOR
IMMEDIATE RELEASE
FRIDAY,
DECEMBER 7, 2007
HURCO
REPORTS STRONG FULL-YEAR AND FOURTH QUARTER RESULTS
INDIANAPOLIS,
INDIANA, — December 7, 2007, Hurco Companies, Inc., (Nasdaq, Global
Select Market: HURC) today reported for its fiscal year ending October 31,
2007,
net income of $20,889,000, or $3.24 per share, which is an increase of 35%
over
fiscal 2006 net income of $15,479,000, or $2.42 per share. For the
fourth quarter of fiscal 2007, Hurco recorded net income of $5,648,000, or
$0.88
per share, which is an increase of 20% over $4,714,000, or $0.74 per share,
for
the corresponding period in fiscal 2006.
Sales
and
service fees for fiscal 2007 totaled $188,047,000, an increase of $39,530,000,
or 27%, over fiscal 2006. Sales and service fees for the fourth
quarter of fiscal 2007 were $50,120,000, an increase of $6,956,000, or 16%,
over
the prior year period. The effect of a weaker U.S. dollar when
translating foreign sales to U.S. dollars for financial reporting purposes
had a
favorable impact on the year over year sales comparison of approximately 7%,
or
$11,011,000. The currency translation impact on fourth quarter sales
comparison was also 7%, or $3,179,000.
The
following table sets forth net sales and service fees by geographic region
for
the three and twelve month periods ended October 31, 2007 and 2006,
respectively:
Net
Sales
and Service Fees by Geographic Region
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Three
Months Ended October 31,
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Twelve
Months Ended October 31,
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|||||||||||||||||||||||
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2007
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2006
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%
Change
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2007
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2006
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%
Change
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North
America
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$ |
14,242
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$ |
14,386
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-1 | % | $ |
52,133
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$ |
50,563
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3 | % | ||||||||||||
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Europe
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32,215
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25,498
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26 | % |
125,446
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87,735
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43 | % | ||||||||||||||||
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Asia
Pacific
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3,663
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3,280
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12 | % |
10,468
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10,219
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2 | % | ||||||||||||||||
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Total
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$ |
50,120
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$ |
43,164
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16 | % | $ |
188,047
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$ |
148,517
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27 | % | ||||||||||||
The
annual and fourth quarter sales growth was primarily driven by a strong European
market and continued demand for our higher end VMX product line across all
three
geographical regions. The effect of a weaker U.S. dollar when
translating foreign sales dollars for financial reporting purposes had a
favorable impact of approximately 12% on the European sales comparison for
both
the full year and fourth quarter. Sales in the United States, for the
fourth quarter and full year, reflected market softening primarily in the
Midwest. Asia Pacific sales remained relatively unchanged for the
year, as Hurco continues the development of its selling channels in China and
India.
New
order
bookings in fiscal 2007, were $198,975,000, an increase of $44,208,000, or
29%,
over the prior year. Fourth quarter new order bookings totaled
$54,782,000, an increase of $12,695,000, or 30%, over the corresponding 2006
period. Europe was the primary contributor to both the annual and
quarterly increases. The impact of currency translation on new orders
booked was consistent with the impact on sales and service fees year over
year.
Hurco’s
gross margin for fiscal 2007 was 38%, compared to 36% for the prior year,
reflecting the impact of higher sales and improved mix. Gross margin
for the fourth quarter of fiscal 2007, was 38%, unchanged from the corresponding
period in fiscal 2006. Selling, general and administrative expenses
were $40,124,000 for fiscal 2007, an increase of $9,427,000 over the amount
for
fiscal 2006, and $11,241,000 for the fourth quarter of fiscal 2007, an increase
of $1,372,000 over the fourth quarter of fiscal 2006. The increases
for both the full year and the fourth quarter were primarily attributable
to expenses supporting sales growth and market expansion.
Hurco’s
effective tax rate for fiscal 2007 was 36%, compared to 33% for the same period
in the prior year. The 2006 lower effective tax rate was primarily
due to a deduction generated from a change in tax code. The effective
tax rate for the fourth quarter of fiscal 2007 was 30%, compared to 31% for
the
same period in the prior year. The reduction in the fourth quarter
effective tax rate was due to year to year differences in the relative income
of
various foreign subsidiaries and the utilization of foreign net operating losses
and domestic tax credits.
Cash
and
cash equivalents totaled $39,760,000 as of October 31, 2007, compared to
$29,846,000 as of October 31, 2006. Working capital, excluding cash
and short-term debt, was $33,290,000 as of October 31, 2007, compared to
$26,832,000 as of October 31, 2006. The increase in working capital
relates to inventory to support increased order volume, particularly for Hurco’s
larger machines.
Michael
Doar, Chief Executive Officer, stated, "This was another great year for Hurco
as
we achieved even greater milestones. It is fitting that Hurco is in the best
financial position of its history as we kick off our 40-year
anniversary."
Doar
attributed the Company's successful financial position to the strategic plan
that was implemented in 2001. "Focusing on our core competencies has allowed
Hurco to develop the Hurco brand and strengthen its presence
globally. Using a disciplined approach, Hurco has leveraged its
extendable platforms to support its global business model and expansion in
emerging markets. These platforms encompass all areas of the
business, including product development, software development, marketing and
sales, manufacturing and information technology," stated Doar.
Hurco
Companies, Inc. is an industrial technology company that designs and produces
interactive computer controls, software and computerized machine tools for
the
worldwide metal cutting and metal forming industry. The end market
for the Company's products consists primarily of independent job shops and
short-run manufacturing operations within large corporations in industries
such
as the aerospace, defense, medical equipment, energy, transportation and
computer equipment. The Company is based in Indianapolis, Indiana,
and has sales, application engineering and service subsidiaries in High Wycombe,
England; Munich, Germany; Paris, France; Milan, Italy; Shanghai, China;
Mississauga, Canada and Singapore, along with manufacturing operations in Taiwan
and China. Products are sold through independent agents and
distributors in North America, Europe and Asia. The Company also has
direct sales forces in the United Kingdom, Germany, France, Italy, Canada,
and
Asia.
Web
Site: www.hurco.com
This
news release contains forward looking statements which involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. These factors include, among others, changes in general
economic and business conditions that affect demand for computerized machine
systems, computer numerical control systems and software products, changes
in
manufacturing markets, innovations by competitors, our ability to protect our
intellectual property, fluctuations in exchange rates, fluctuations in prices
of
raw materials, changes in market demands, quality and delivery performance
by
our contract manufacturers and governmental actions and initiatives including
import and export restrictions and tariffs.
Contact: John
Oblazney
Vice
President
& Chief Financial Officer
317-293-5309
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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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|||||||
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2007
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2006
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(unaudited)
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(audited)
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ASSETS
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ |
39,760
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$ |
29,846
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Accounts
receivable
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25,645
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22,248
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Inventories
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61,121
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43,343
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Deferred
tax assets, net
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5,909
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2,768
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Other
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4,481
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2,677
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Total
current assets
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136,916
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100,882
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Property
and equipment:
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Land
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776
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761
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Building
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7,135
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7,234
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Machinery
and equipment
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13,629
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12,952
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Leasehold
improvements
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1,473
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1,147
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23,013
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22,094
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Less
accumulated depreciation and amortization
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(11,617 | ) | (12,944 | ) | ||||
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11,396
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9,150
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Deferred
tax assets, net
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774
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1,121
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Software
development costs, less amortization
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5,960
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5,580
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Investments
and other assets
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7,160
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7,381
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| $ |
162,206
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$ |
124,114
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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Current
liabilities:
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Accounts
payable
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$ |
35,486
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$ |
26,605
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Accrued
expenses
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28,380
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17,599
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Current
portion of long-term debt
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-
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136
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Total
current liabilities
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63,866
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44,340
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Non-current
liabilities:
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Long-term
debt
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-
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3,874
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Deferred
credits and other obligations
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737
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525
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Total
liabilities
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64,603
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48,739
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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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12,500,000
shares authorized; and 6,392,220 and
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6,346,520
shares issued, respectively
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639
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635
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Additional
paid-in capital
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50,971
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50,011
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Retained
earnings
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49,367
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28,480
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Accumulated
other comprehensive income
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(3,374 | ) | (3,751 | ) | ||||
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Total
shareholders' equity
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97,603
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75,375
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||||||
| $ |
162,206
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$ |
124,114
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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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||||||||||||||||
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Three
Months Ended October 31,
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Twelve
Months Ended October 31,
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|||||||||||||||
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2007
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2006
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2007
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2006
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|||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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Sales
and service fees
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$ |
50,120
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$ |
43,164
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$ |
188,047
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$ |
148,517
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||||||||
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Cost
of sales and service
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31,128
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26,780
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116,965
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95,192
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||||||||||||
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Gross
profit
|
18,992
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16,384
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71,082
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53,325
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||||||||||||
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Selling,
general and administrative expenses
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11,241
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9,869
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40,124
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30,697
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||||||||||||
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Operating
income
|
7,751
|
6,515
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30,958
|
22,628
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||||||||||||
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Interest
expense (income)
|
(17 | ) |
18
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(65 | ) |
259
|
||||||||||
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Other
income (expense), net
|
335
|
337
|
1,742
|
745
|
||||||||||||
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Income
before taxes
|
8,103
|
6,834
|
32,765
|
23,114
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||||||||||||
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Provision
for income taxes
|
2,455
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2,120
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11,876
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7,635
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||||||||||||
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Net
income
|
$ |
5,648
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$ |
4,714
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$ |
20,889
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$ |
15,479
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Earnings
per common share
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||||||||||||||||
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Basic
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$ |
0.88
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$ |
0.75
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$ |
3.27
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$ |
2.45
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Diluted
|
$ |
0.88
|
$ |
0.74
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$ |
3.24
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$ |
2.42
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Weighted
average common shares outstanding
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||||||||||||||||
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Basic
|
6,382
|
6,317
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6,382
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6,317
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||||||||||||
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Diluted
|
6,445
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6,396
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6,440
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6,397
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||||||||||||
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OTHER
CONSOLIDATED FINANCIAL DATA
|
Three
Months Ended October 31,
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Twelve
Months Ended October 31,
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||||||||||||||
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Operating
Data:
|
2007
|
2006
|
2007
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2006
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||||||||||||
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(unaudited)
|
(unaudited)
|
|||||||||||||||
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Gross
margin
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37.9 | % | 38.0 | % | 37.8 | % | 35.9 | % | ||||||||
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SG&A
expense as a percentage of sales
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22.4 | % | 22.9 | % | 21.3 | % | 20.7 | % | ||||||||
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Operating
income as a percentage of sales
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15.5 | % | 15.1 | % | 16.5 | % | 15.2 | % | ||||||||
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Income
before taxes as a percentage of sales
|
16.2 | % | 15.8 | % | 17.4 | % | 15.6 | % | ||||||||
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Effective
Tax Rate
|
30.3 | % | 31.0 | % | 36.2 | % | 33.0 | % | ||||||||
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Depreciation
|
730
|
387
|
2,106
|
1,504
|
||||||||||||
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Capital
expenditures
|
2,212
|
1,183
|
4,510
|
3,301
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||||||||||||
|
Balance
Sheet Data:
|
10/31/2007
|
10/31/2006
|
||||||||||||||
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Working
capital (excluding short term debt)
|
$ |
73,050
|
$ |
56,678
|
||||||||||||
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Days
sales outstanding
|
33
|
41
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||||||||||||||
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Inventory
turns
|
2.0
|
2.2
|
||||||||||||||
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Capitalization
|
||||||||||||||||
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Total
debt
|
$ |
-
|
$ |
4,010
|
||||||||||||
|
Shareholders'
equity
|
97,603
|
75,375
|
||||||||||||||
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Total
|
$ |
97,603
|
$ |
79,385
|
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