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) March 7, 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):

 

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 March 7, 2014, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the first quarter ended January 31, 2014. 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.

 

99

Press Release dated March 7, 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:  March 7, 2014
	HURCO COMPANIES, INC
	By:	/s/Sonja K. McClelland
		Sonja K. McClelland
		Interim Chief Financial Officer, Secretary, Corporate Controller and Principal Accounting Officer

 

 

EXHIBIT INDEX

 

Exhibit 99

Press Release of Hurco Companies, Inc. dated March 7, 2014.

  

FOR IMMEDIATE RELEASE

FRIDAY, March 7, 2014

 

HURCO REPORTS FIRST QUARTER RESULTS

 

INDIANAPOLIS, INDIANA — March 7, 2014, Hurco Companies, Inc. (Nasdaq Global Select Market: HURC) today reported results for the first fiscal quarter ended January 31, 2014. For the first quarter of fiscal 2014, Hurco recorded net income of $2,369,000, or $0.36 per diluted share, compared to net income of $2,254,000, or $0.34 per diluted share, for the corresponding period in fiscal 2013. The increase in net income was attributable to a 16% growth in sales and service fees year-over-year. Orders for the first quarter of fiscal 2014 were 12% higher than the first quarter of fiscal 2013.

 

Sales and service fees for the first quarter of fiscal 2014 were $50,970,000, an increase of $6,885,000, or 16%, from the corresponding prior year period. The increase in sales and service fees included a favorable impact of $600,000 primarily due to a stronger Euro when translating foreign sales to U.S. Dollars for financial reporting purposes.

 

The following table sets forth net sales and service fees by geographic region for the first quarters of fiscal 2014 and 2013 (in thousands):

 

Net Sales and Service Fees

Three Months Ended

January 31,

 

										$				%
		2014				2013				Change				Change
North America		$	16,293			$	16,252			$	41				0	%
Europe			29,234				24,670				4,564				19	%
Asia Pacific			5,443				3,163				2,280				72	%
Total		$	50,970			$	44,085			$	6,885				16	%

  

European and Asian Pacific sales increased during the first quarter of fiscal 2014 by 19% and 72%, respectively, compared to the corresponding prior year period. The overall improvement in sales was primarily driven by increased orders and shipments in Germany and China. European sales and service fees included $1,676,000 attributable to sales of electro-mechanical components and accessories manufactured by Hurco’s Italian-based subsidiary LCM Precision Technologies (LCM). Hurco acquired this business on July 1, 2013. LCM products accounted for 6% of Hurco’s sales in Europe for the first quarter of fiscal 2014. Asian Pacific sales in the fiscal 2014 period benefited from a multiple machine order from a customer in China totaling approximately $725,000, or 13% of total Asian Pacific sales.

 

Orders in the first quarter of fiscal 2014 increased by 12% compared to the corresponding period in the prior year. European orders included $3,357,000 of LCM products for the first quarter of fiscal 2014, or 9% of total orders for Europe. European and Asian Pacific orders in the first quarter of fiscal 2014 were higher than those reported in any of the previous four quarters of fiscal 2013, even when excluding orders for LCM products. The impact of currency translation on orders booked in the first quarter of fiscal 2014 was consistent with the impact on sales.

 

 

 

The following table sets forth orders by geographic region for the first quarters of fiscal 2014 and 2013 (in thousands):

 

Orders

Three Months Ended

January 31,

 

										$				%
		2014				2013				Change				Change
North America		$	14,572			$	14,613			$	(41	)			0	%
Europe			36,511				30,696				5,815				19	%
Asia Pacific			6,011				5,792				219				4	%
Total		$	57,094			$	51,101			$	5,993				12	%

 

Hurco’s gross profit for the first quarter of fiscal 2014 was $13,919,000, or 27% of sales, compared to $12,916,000, or 29% of sales, for the prior year period. The increase in gross profit was attributable to the increase in sales, including LCM products. The decrease in gross margin year over year was primarily due to the effect of selling machines in the first quarter of fiscal 2014 that were manufactured in fiscal 2013 when fixed costs were leveraged over lower production levels.

 

Selling, general and administrative expenses for the first quarter of fiscal 2014 were $10,600,000, or 21% of sales, compared to $8,920,000, or 20% of sales, in the same quarter of fiscal 2013. The increase in selling, general and administrative expenses was due primarily to incremental operating expenses associated with the acquisition of the LCM business and changes in incentive compensation implemented during the first quarter of fiscal 2014.

 

The effective tax rate for the first quarter of fiscal 2014 was 28%, compared to the rate of 39% for the corresponding prior year period, due to changes in the geographic mix of income or loss between tax jurisdictions.

 

Cash and cash equivalents totaled $47,993,000 at January 31, 2014, compared to $42,804,000 at October 31, 2013. Inventories at January 31, 2014 were $93,708,000, a decrease of $1,552,000 from those at the end of fiscal 2013.

 

Michael Doar, Chief Executive Officer, stated, “I am pleased that Europe has shown some improvement from the economic disruption experienced last year. Historically, our business has depended on the premium reputation our products have earned in Europe, which makes us sensitive to changes in market conditions there. As for Asia, since China is the number one consumer of machine tools in the world, our participation is vital to long-term success. I am optimistic that our sales in China will increase as their market begins to embrace more complex manufacturing operations, which is where our technology benefits customers the most.”

 

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:	Michael Doar
	Chairman, Chief Executive Officer
	317-293-5309

 

 

 

 

Hurco Companies, Inc.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per-share data)

 

		Quarter Ended
		January 31,
		2014				2013
		(unaudited)
Sales and service fees		$	50,970			$	44,085
Cost of sales and service			37,051				31,169
Gross profit			13,919				12,916
Selling, general and administrative expenses			10,600				8,920
Operating income			3,319				3,996
Interest expense			77				65
Interest income			16				16
Investment income			31				11
Other expense (income), net			16				259
Income before taxes			3,273				3,699
Provision for income taxes			904				1,445
Net income		$	2,369			$	2,254
Earnings per common share
Basic		$	0.36			$	0.35
Diluted		$	0.36			$	0.34
Weighted average common shares outstanding
Basic			6,477				6,447
Diluted			6,514				6,484

 

		Quarter Ended
OTHER CONSOLIDATED FINANCIAL DATA		January 31,
Operating Data:		2014				2013
		(unaudited)
Gross margin			27	%			29	%
SG&A expense as a percentage of sales			21	%			20	%
Operating income as a percentage of sales			7	%			9	%
Pre-tax income as a percentage of sales			6	%			8	%
Effective Tax Rate			28	%			39	%
Depreciation and amortization			735				917
Capital expenditures			519				836
Balance Sheet Data:			1/31/2014				10/31/2013
			(unaudited)				(audited)
Working capital (excluding cash)		$	83,097			$	86,512
Days sales outstanding (unaudited)			49				45
Inventory turns (unaudited)			1.5				1.4
Capitalization
Total debt		$	3,301			$	3,665
Shareholders' equity			152,884				151,491
Total		$	156,185			$	155,156

  

  

Hurco Companies, Inc.

CONSOLIDATED BALANCE SHEETS

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

        

		January 31,				October 31,
		2014				2013
		(unaudited)				(audited)
ASSETS
Current assets:
Cash and cash equivalents		$	47,993			$	42,804
Accounts receivable, net			34,579				36,139
Refundable taxes			3				6
Inventories, net			93,708				95,260
Deferred income taxes			2,218				2,080
Derivative assets			736				699
Other			9,089				8,014
Total current assets			188,326				185,002
Property and equipment:
Land			782				782
Building			7,326				7,326
Machinery and equipment			18,870				19,059
Leasehold improvements			3,577				3,634
			30,555				30,801
Less accumulated depreciation and amortization			(18,609	)			(18,502	)
			11,946				12,299
Non-current assets:
Software development costs, less accumulated amortization			3,697				3,714
Goodwill			2,789				2,807
Intangible assets, net			2,041				2,155
Other assets			5,445				5,258
		$	214,244			$	211,235
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	39,093			$	35,527
Derivative liabilities			1,447				1,212
Accrued expenses			13,395				15,282
Short-term debt			3,301				3,665
Total current liabilities			57,236				55,686
Non-current liabilities:
Deferred income taxes			744				743
Accrued Tax Liability			1,135				1,103
Deferred credits and other obligations			2,245				2,212
Total liabilities			61,360				59,744
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;
6,571,986 and 6,533,510 shares issued; and 6,482,344 and 6,465,054 shares outstanding,
as of January 31, 2014 and October 31, 2013, respectively			648				647
Additional paid-in capital			54,943				54,698
Retained earnings			100,175				98,130
Accumulated other comprehensive loss			(2,882	)			(1,984	)
Total shareholders' equity			152,884				151,491
		$	214,244			$	211,235