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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 10, 2014

 

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 10, 2014, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the fourth quarter and fiscal year ended October 31, 2013. 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 9.01Financial Statements and Exhibits.
  
 99 Press Release dated January 10, 2014.

 

 
 

 

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 10, 2014
     
  HURCO COMPANIES, INC
     
  By: /s/John G. Oblazney
    John G. Oblazney,
    Vice President and
    Chief Financial Officer

 

 

 

 

 
 

 

EXHIBIT INDEX

 

Exhibit 99 Press Release of Hurco Companies, Inc. dated January 10, 2014

  

 

 

FOR IMMEDIATE RELEASE

FRIDAY, January 10, 2014

 

HURCO REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS FOR FISCAL 2013

 

INDIANAPOLIS, INDIANA, — January 10, 2014, Hurco Companies, Inc. (Nasdaq, Global Select Market: HURC) today reported results for the fourth quarter and full fiscal year ended October 31, 2013. For the fourth quarter of fiscal 2013, Hurco recorded net income of $1,899,000, or $0.29 per diluted share, as compared to net income of $4,086,000, or $0.63 per diluted share, for the corresponding period in fiscal 2012. For fiscal 2013, Hurco recorded net income of $8,190,000, or $1.25 per diluted share, as compared to net income of $15,638,000, or $2.40 per diluted share, for fiscal 2012.

 

Sales and service fees for the fourth quarter of fiscal 2013 were $53,942,000, a decrease of $2,125,000, or 4%, from the prior year period. This quarter-over-quarter decrease is net of the favorable impact of $700,000, or 1%, in the fourth quarter of fiscal 2013, due to a stronger Euro when translating foreign sales to U.S. Dollars for financial reporting purposes. Sales and service fees for fiscal 2013 totaled $192,804,000, a decrease of $10,313,000, or 5%, from fiscal 2012. The impact of currency translation on the year-over-year comparison was not material.

 

The following table sets forth net sales and service fees by geographic region for the quarter and fiscal year ending October 31, 2013 and 2012 (in thousands):

 

       Net Sales and Service Fees by Geographic Region         
                 
       Quarter Ended               Fiscal Year Ended         
       October 31,               October 31,         
           $   %           $   % 
   2013   2012   Change   Change   2013   2012   Change   Change 
North America  $16,697   $17,692   $(995)   -6%  $60,759   $60,527   $232    0%
Europe   32,316    33,745    (1,429)   -4%   114,855    119,359    (4,504)   -4%
Asia Pacific   4,929    4,630    299    6%   17,190    23,231    (6,041)   -26%
 Total  $53,942   $56,067   $(2,125)   -4%  $192,804   $203,117   $(10,313)   -5%

 

European sales included $1,923,000 for the fourth quarter of fiscal 2013 and $2,446,000 for fiscal 2013 that were attributable to sales of electro-mechanical components and accessories manufactured by Hurco’s subsidiary, LCM Precision Technologies (LCM). Hurco acquired this business in July 2013. LCM is based in Italy and supplies its components and accessories to Hurco, as well as third parties. LCM products accounted for 6% of sales in Europe for the fourth quarter of fiscal 2013 and 2% for fiscal 2013.

 

Fourth quarter sales in North America decreased slightly in comparison to a strong fourth quarter in fiscal 2012. Sales in Europe were down during the fourth quarter in comparison to the comparable period in the prior year due to weak market conditions in that region. The decline in sales for the full year was primarily due to weak market conditions in Europe and Asia during much of fiscal 2013.

 

 
 

 

The following table sets forth new orders booked by geographic region for the quarter and fiscal year ending October 31, 2013 and 2012 (in thousands):

 

               Orders by Geographic Region         
                         
       Quarter Ended               Fiscal Year Ended         
       October 31,               October 31,         
           $   %           $   % 
   2013   2012   Change   Change   2013   2012   Change   Change 
North America  $17,723   $20,398   $(2,675)   -13%  $59,799   $61,644   $(1,845)   -3%
Europe   30,630    27,745    2,885    10%   120,349    115,222    5,127    4%
Asia Pacific   3,506    3,674    (168)   -5%   17,718    21,271    (3,553)   -17%
 Total  $51,859   $51,817   $42    0%  $197,866   $198,137   $(271)   0%

 

European orders included LCM product orders of $1,951,000 for the fourth quarter of fiscal 2013, or 6% of total orders for Europe, and $5,719,000, or 5% of total orders for Europe, for fiscal 2013.

 

The decrease in orders in North America during the fourth quarter of fiscal 2013 was primarily due to the absence of the International Machine Tool Show (IMTS), which is held only during even numbered years in the United States. Excluding LCM orders and the impact of foreign currency translation, orders in Europe for the fourth quarter of 2013 were comparable to the fourth quarter of 2012. For the full fiscal year, excluding the impact of LCM, orders were down in all regions from the prior fiscal year. The largest decrease in order activity was in Asia, due to continued weak market conditions throughout the region. The impact of currency translation on orders booked in the fourth quarter and the full fiscal year was consistent with the impact on sales.

 

Hurco’s gross profit for the fourth quarter of fiscal 2013 was $15,142,000, or 28% of sales, compared to $17,220,000, or 31% of sales, for the prior year period. For fiscal 2013, gross profit was $55,056,000, or 29% of sales, compared to $63,181,000, or 31% of sales, for fiscal 2012. The decrease in gross profit for the fourth quarter of fiscal 2013 and the full fiscal year was due primarily to lower sales and increased pricing pressure in Europe, which is the primary market for Hurco’s larger, higher performance machines, as well as the adverse effect of leveraging fixed costs over lower sales.

 

Selling, general and administrative expenses for the fourth quarter of fiscal 2013 were $11,802,000, which was consistent with the prior year period. Selling, general and administrative expenses were $41,413,000 for fiscal 2013, an increase of $253,000, or 1%, over fiscal 2012. The increase in selling, general and administrative expenses for fiscal 2013 was due to approximately $675,000 of one-time costs related to the acquisition and integration of the LCM business.

 

Cash and cash equivalents totaled $42,804,000 as of October 31, 2013, compared to $35,770,000 as of October 31, 2012. Inventories as of October 31, 2013 were $95,260,000, an increase of $3,940,000, from the end of the prior fiscal year primarily due to an increase of $3,179,000 in inventories of the LCM products.

 

 
 

 

Michael Doar, Chief Executive Officer, stated, “The European and Asian markets were challenging in fiscal 2013. Since we typically sell the majority of our high performance machines in Europe, we are particularly sensitive to conditions in that region, which have been weak. Earlier this year, we acquired the business of an Italian manufacturer of rotary tables and tilting heads for machine tools. The integration of this business into our operations has gone well, and I’m confident that the advanced technology they provide will yield significant value to our business and to our customers.”

 

Hurco Companies, Inc. is an industrial technology company that designs and produces interactive computer controls, software and computerized machine tools and machine tool components 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, Italy, 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, our ability to effectively integrate acquisitions, uncertainty concerning our ability to use tax loss carryforwards 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.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per-share data)

 

   Three Months Ended   Twelve Months Ended 
   October 31,   October 31, 
   2013   2012   2013   2012 
   (unaudited)     
Sales and service fees  $53,942   $56,067   $192,804   $203,117 
                     
Cost of sales and service   38,800    38,847    137,748    139,936 
Gross profit   15,142    17,220    55,056    63,181 
                     
Selling, general and administrative expenses   11,802    11,870    41,413    41,160 
Operating income   3,340    5,350    13,643    22,021 
                     
Interest expense   86    63    280    168 
                     
Interest income   12    11    74    69 
                     
Investment income   2    2    21    7 
                     
Other (income) expense, net   154    (5)   1,016    65 
                     
Income before taxes   3,114    5,305    12,442    21,864 
                     
Provision for income taxes   1,215    1,219    4,252    6,226 
                     
Net income  $1,899   $4,086   $8,190   $15,638 
                     
Income per common share                    
                     
Basic  $0.29   $0.63   $1.26   $2.41 
Diluted  $0.29   $0.63   $1.25   $2.40 
                     
Weighted average common shares outstanding                    
Basic   6,465    6,447    6,455    6,445 
Diluted   6,503    6,469    6,497    6,470 

 

OTHER CONSOLIDATED FINANCIAL DATA  Three Months Ended   Twelve Months Ended 
   October 31,   October 31, 
   2013   2012   2013   2012 
   (unaudited)     
Operating Data:                    
                     
Gross margin   28%   31%   29%   31%
                     
SG&A expense as a percentage of sales   22%   21%   21%   20%
                     
Operating income as a percentage of sales   6%   10%   7%   11%
                     
Pre-tax income as a percentage of sales   6%   9%   6%   11%
                     
Effective Tax Rate   39%   23%   34%   28%
                     
Depreciation and amortization   886    931    3,392    4,126 
                     
Capital expenditures   483    1,129    2,380    3,732 
                     
Balance Sheet Data:   10/31/2013    10/31/2012           
                     
Working capital (excluding cash)  $86,512   $88,239           
                     
Days sales outstanding (unaudited)   45    38           
                     
Inventory turns (unaudited)   1.4    1.5           
                     
Capitalization                    
Total debt  $3,665   $3,206           
Shareholders' equity   151,491    143,793           
Total  $155,156   $146,999           

 

 
 

 

Hurco Companies, Inc.

CONSOLIDATED BALANCE SHEETS

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

 

   October 31,   October 31, 
   2013   2012 
         
ASSETS          
Current assets:          
Cash and cash equivalents  $42,804   $35,770 
Accounts receivable, net   36,139    35,297 
Refundable taxes   6    1,459 
Inventories, net   95,260    91,320 
Deferred income taxes   2,080    1,182 
Derivative assets   699    708 
Other   8,014    7,645 
Total current assets   185,002    173,381 
           
Property and equipment:          
Land   782    782 
Building   7,326    7,352 
Machinery and equipment   19,059    17,411 
Leasehold improvements   3,634    3,467 
    30,801    29,012 
Less accumulated depreciation and amortization   (18,502)   (16,933)
    12,299    12,079 
           
Non-current assets:          
Software development costs, less accumulated amortization   3,714    3,969 
Goodwill   2,807    233 
Intangible assets, net   2,155    937 
Other assets   5,258    4,713 
   $211,235   $195,312 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Current liabilities:          
Accounts payable  $35,527   $29,788 
Derivative liabilities   1,212    569 
Accrued expenses   15,282    15,809 
Short-term debt   3,665    3,206 
Total current liabilities   55,686    49,372 
           
Non-current liabilities:          
Deferred income taxes   743    903 
Accrued Tax Liability   1,103    - 
Deferred credits and other obligations   2,212    1,244 
Total liabilities   59,744    51,519 
           
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; 6,533,510 and 6,502,928 shares issued; and 6,465,054 and 6,447,210 shares outstanding, as of October 31, 2013 and October 31, 2012, respectively   647    645 
Additional paid-in capital   54,698    53,415 
Retained earnings   98,130    90,586 
Accumulated other comprehensive loss   (1,984)   (853)
Total shareholders' equity   151,491    143,793 
   $211,235   $195,312