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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) January 11, 2013

 

Hurco Companies, Inc.
(Exact Name of Registrant as Specified in Its Charter
     
Indiana
(State or Other Jurisdiction of Incorporation
     
0-9143   35-1150732
(Commission File Number)   (I.R.S. Employer Identification Number)
     
One Technology Way    
Indianapolis, Indiana   46268
(Address of principal executive offices)   (Zip code)
     
(317) 293-5309
(Registrant’s Telephone Number, Including Area Code
     
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

 

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):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨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 January 11, 2013, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the fourth quarter and fiscal year ended October 31, 2012. 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.

 

Item9.01Financial Statements and Exhibits.

 

99Press Release dated January 11, 2013.

 

 
 

 

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:  January 11, 2013
   
  HURCO COMPANIES, INC
   
  By: /s/John G. Oblazney
    John G. Oblazney,
    Vice President and
    Chief Financial Officer

 

 
 

 

EXHIBIT INDEX

 

Exhibit 99Press Release of Hurco Companies, Inc. dated January 11, 2013

  

 

 

FOR IMMEDIATE RELEASE

FRIDAY, January 11, 2013

 

HURCO REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS

 

INDIANAPOLIS, INDIANA, — January 11, 2013, Hurco Companies, Inc., (Nasdaq, Global Select Market: HURC) today reported results for the fourth quarter and the fiscal year ended October 31, 2012. For the fourth quarter of fiscal 2012, Hurco recorded net income of $4,086,000, or $0.63 per diluted share, as compared to net income of $2,654,000, or $0.41 per diluted share, for the corresponding period in fiscal 2011. For the full fiscal year 2012, Hurco recorded net income of $15,638,000, or $2.40 per diluted share, as compared to net income of $11,124,000, or $1.71 per diluted share, for fiscal 2011.

 

Sales and service fees for the fourth quarter of fiscal 2012 were $56,067,000, an increase of $7,496,000, or 15%, from the prior year period. This quarter-over-quarter improvement is net of the adverse impact of $2,087,000, or 4%, in the fourth quarter of fiscal 2012, due to a weaker Euro when translating foreign sales to U.S. Dollars for financial reporting purposes. Sales and service fees for the full fiscal year totaled $203,117,000, an increase of $22,716,000, or 13%, from fiscal 2011. The unfavorable impact of currency translation on the full fiscal year-over-year comparison was $7,609,000, or 4%.

 

The following table sets forth net sales and service fees by geographic region for the quarter and fiscal year ending October 31, 2012 and 2011 (in thousands), respectively:

 

       Net Sales and Service Fees by Geographic Region     
                         
       Quarter Ended           Fiscal Year Ended     
       October 31,           October 31,     
           %           % 
   2012   2011   Change   2012   2011   Change 
North America  $17,692   $13,919    27%  $60,527   $49,637    22%
Europe   33,745    31,199    8%   119,359    111,080    7%
Asia Pacific   4,630    3,453    34%   23,231    19,683    18%
Total  $56,067   $48,571    15%  $203,117   $180,400    13%

 

The fourth quarter increase in sales was driven by increased demand in North America and Europe. The 8% increase in Europe was actually 15% when adjusted to exclude the negative impact of foreign currency translation due to a weaker Euro. Compared to the fourth quarter of fiscal 2011, unit shipments for the fourth quarter of fiscal 2012 increased in North America by 33%, in Europe by 13%, and in Asia Pacific by 12%. For the full fiscal year, sales increased in all regions, driven by higher customer demand. Unit shipments for the full year 2012, compared to fiscal 2011, increased in North America by 14%, in Europe by 4% and in Asia Pacific by 16%.

 

 
 

 

The following table sets forth new orders booked by geographic region for the fourth quarter and fiscal year ending October 31, 2012 and 2011 (in thousands), respectively:

 

           Orders by Geographic Region     
                         
       Quarter Ended           Fiscal Year Ended     
       October 31,           October 31,     
           %           % 
   2012   2011   Change   2012   2011   Change 
North America  $20,398   $13,365    53%  $61,644   $50,058    23%
Europe   27,745    22,614    23%   115,222    121,274    -5%
Asia Pacific   3,674    4,324    -15%   21,271    25,651    -17%
Total  $51,817   $40,303    29%  $198,137   $196,983    1%

 

During the fourth quarter of 2012, orders increased in North America and Europe due to favorable market conditions. We experienced increased orders in North America, following our successful showing at the International Manufacturing Technology Show (IMTS) in Chicago where we launched our rebranding initiative and new line of high speed machines. We experienced a decline in order activity in Asia where industrial activity has been slowing. Compared to the fourth quarter of fiscal 2011, unit orders for the fourth quarter of fiscal 2012 increased in North America by 54%and in Europe by 22%, but decreased in Asia Pacific by 9%. During the full fiscal year 2012, orders remained relatively consistent with the prior fiscal year. Unit orders for the fiscal year 2012 compared to fiscal 2011 increased in North America by 22%, but decreased in Europe by 9% and in Asia Pacific by 22%. The impact of currency translation on orders booked in the fourth quarter and full fiscal year was consistent with the impact on sales.

 

Hurco’s fourth quarter gross profit was $17,220,000, or 31% of sales, compared to $15,682,000, or 32% of sales, for the prior year period. For the full fiscal year 2012, gross profit was $63,181,000, or 31% of sales, compared to $55,874,000, or 31% of sales, for fiscal 2011. The increase in gross profit for the fourth quarter and the year was due primarily to the increase in sales.

 

Selling, general and administrative expenses for the fourth quarter of fiscal 2012 were $11,870,000, an increase of $778,000, or 7%, from the corresponding period in 2011. Selling, general and administrative expenses were $41,160,000 for fiscal 2012, an increase of $2,667,000, or 7%, over fiscal 2011. The increases in selling, general and administrative expenses for the fourth quarter and fiscal year were primarily due to higher sales and marketing expenses and higher commissions as a result of increased sales.

 

Other expenses during the fourth quarter of fiscal 2012 decreased $1,051,000 compared to the fourth quarter of fiscal 2011. Other expenses for fiscal 2012 decreased by $1,605,000. These decreases were primarily due to decreased foreign currency losses experienced in fiscal 2012.

 

 
 

 

Cash and cash equivalents totaled $35,770,000 as of October 31, 2012, compared to $44,961,000 as of October 31, 2011. Inventories as of October 31, 2012 were $91,320,000, an increase of $10,193,000, or 13%, from the end of the prior fiscal year primarily due to an increase in finished goods inventory intended to meet forecasted growth in customer demand. Working capital, excluding cash, was $88,239,000 as of October 31, 2012, compared to $61,885,000 as of October 31, 2011. The increase in working capital, excluding cash, was primarily due to increased inventory resulting from higher production levels and increased accounts receivable from higher sales volumes.

 

Michael Doar, President and Chief Executive Officer, stated, “Considering the economic uncertainty in Europe, we finished the year with a strong performance. I believe our results are a testament to customer acceptance of our cutting edge control technology and product line expansion. North America achieved record sales for the quarter, which I attribute to the excitement surrounding the rebranding initiative that we introduced at the International Manufacturing Technology Show in Chicago. Additionally, I believe U.S. customers appreciate the fact that our control technology focuses on helping them increase profitability, especially in the manufacture of small-to-medium-sized lots, which accounts for the majority of their machining activity. Going forward, we will continue to deliver machine tools with advanced technology that simplifies complex operations, while providing a user interface that is intuitive and user-friendly.”

 

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 aerospace, defense, medical equipment, energy, transportation and computer equipment. The Company is based in Indianapolis, Indiana, with manufacturing operations in Taiwan and China, and sells its products through direct and indirect sales forces throughout North America, Europe, and Asia. The Company has sales, application engineering support and service subsidiaries in China, England, France, Germany, India, Italy, Poland, Singapore, South Africa and the United States of America.  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, the cyclical nature of the machine tool industry, changes in general economic and business conditions that affect demand for our products, the risks of our international operations, changes in manufacturing markets, innovations by competitors, the ability to protect our intellectual property, fluctuations in foreign currency exchange rates, increases in prices of raw materials, quality and delivery performance by our vendors, changes in operations due to acquisitions, the loss of key personnel, and governmental actions and initiatives including import and export restrictions and tariffs.

 

Contact: John G. Oblazney
  Vice President & Chief Financial Officer
  317-293-5309

 

 
 

 

Hurco Companies, Inc.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per-share data)

 

   Three Months Ended
October 31,		   Twelve Months Ended
October 31,		 
   2012   2011   2012   2011 
   (unaudited)     
Sales and service fees  $56,067   $48,571   $203,117   $180,400 
                     
Cost of sales and service   38,847    32,889    139,936    124,526 
Gross profit   17,220    15,682    63,181    55,874 
                     
Selling, general and administrative expenses   11,870    11,092    41,160    38,493 
Operating income   5,350    4,590    22,021    17,381 
                     
Interest expense   63    82    168    143 
                     
Interest income   11    25    69    132 
                     
Investment income (expense)   2    4    7    13 
                     
Other expense (income), net   (5)   1,043    65    1,764 
Income before taxes   5,305    3,494    21,864    15,619 
                     
Provision for income taxes   1,219    840    6,226    4,495 
Net income  $4,086   $2,654   $15,638   $11,124 
                     
Earnings per common share                    
                     
Basic  $0.63   $0.41   $2.41   $1.72 
Diluted  $0.63   $0.41   $2.40   $1.71 
                     
Weighted average common shares outstanding                    
Basic   6,447    6,441    6,445    6,441 
Diluted   6,469    6,467    6,470    6,472 

 

OTHER CONSOLIDATED FINANCIAL DATA  Three Months Ended
October 31,		   Twelve Months Ended
October 31,		 
Operating Data:  2012   2011   2012   2011 
   (unaudited)     
Gross margin   31%   32%   31%   31%
                     
SG&A expense as a percentage of sales   21%   23%   20%   21%
                     
Operating income as a percentage of sales   10%   9%   11%   10%
                     
Pre-tax income as a percentage of sales   9%   7%   11%   9%
                     
Effective Tax Rate   23%   24%   28%   29%
                     
Depreciation and amortization   931    1,073    4,126    4,300 
                     
Capital expenditures   1,129    1,097    3,732    2,842 

 

Balance Sheet Data:  10/31/2012   10/31/2011 
Working capital (excluding cash)  $88,239   $61,885 
           
Days sales outstanding (unaudited)   38    37 
           
Inventory turns (unaudited)   1.5    1.6 
           
Capitalization          
Total debt  $3,206   $865 
Shareholders' equity   143,793    126,212 
Total  $146,999   $127,077 

 

 
 

 

Hurco Companies, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share data)

 

   October 31,   October 31, 
   2012   2011 
         
ASSETS          
Current assets:          
Cash and cash equivalents  $35,770   $44,961 
Accounts receivable, net   35,297    27,057 
Refundable taxes   1,459    1,442 
Inventories, net   91,320    81,127 
Deferred income taxes   1,182    2,692 
Derivative assets   708    1,197 
Other   7,645    5,598 
Total current assets   173,381    164,074 
           
Property and equipment:          
Land   782    782 
Building   7,352    7,116 
Machinery and equipment   17,411    16,336 
Leasehold improvements   3,467    2,508 
    29,012    26,742 
Less accumulated depreciation and amortization   (16,933)   (15,198)
    12,079    11,544 
           
Non-current assets:          
 Software development costs, less accumulated amortization   3,969    4,928 
 Other assets   5,883    5,999 
   $195,312   $186,545 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Current liabilities:          
Accounts payable  $29,788   $39,046 
Derivative liabilities   569    1,609 
Accrued expenses   15,809    15,708 
Short-term debt   3,206    865 
Total current liabilities   49,372    57,228 
           
Non-current liabilities:          
Deferred income taxes   903    1,982 
Deferred credits and other obligations   1,244    1,123 
Total liabilities   51,519    60,333 
           
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; 12,500,000 shares authorized; 6,502,928 and 6,471,710 shares issued; and 6,447,210 and 6,440,851 shares outstanding, as of October 31, 2012 and October 31, 2011, respectively   645    644 
Additional paid-in capital   53,415    52,614 
Retained earnings   90,586    74,948 
Accumulated other comprehensive loss   (853)   (1,994)
Total shareholders' equity   143,793    126,212 
   $195,312   $186,545