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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 9, 2015

 

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) (IRS Employer Identification No.)

 

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):

 

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

 

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

 

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

 

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02Results of Operations and Financial Condition

 

On January 9, 2015, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the fourth quarter and fiscal year ended October 31, 2014. The Registrant's earnings release for the period is attached as Exhibit 99.1 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

 

99.1Press Release of Hurco Companies, Inc. dated January 9, 2015

 

 
 

 

SIGNATURES

 

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 9, 2015
   
  HURCO COMPANIES, INC.

 

  By: /s/ Sonja K. McClelland
    Sonja K. McClelland, Vice President, Secretary,
    Treasurer and Chief Financial Officer

 

 
 

 

EXHIBIT INDEX

 

99.1Press Release of Hurco Companies, Inc. dated January 9, 2015

 

 

 

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Friday, January 9, 2015

HURCO REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS FOR FISCAL 2014

 

INDIANAPOLIS, INDIANA, — January 9, 2015, Hurco Companies, Inc. (Nasdaq, Global Select Market: HURC) today reported net income of $4,863,000, or $0.74 per diluted share, for its fourth fiscal quarter ended October 31, 2014, compared to $1,899,000, or $0.29 per diluted share, for the corresponding period in fiscal 2013. For fiscal 2014, Hurco reported net income of $15,143,000, or $2.30 per diluted share, compared to $8,190,000, or $1.25 per diluted share, for fiscal 2013.

 

Sales and service fees for the fourth quarter of fiscal 2014 totaled $62,223,000, an increase of $8,281,000, or 15%, compared to the fourth quarter of fiscal 2013. The year-over-year increase in sales and service fees for the fourth quarter included an unfavorable impact of approximately $662,000, or 1%, when translating foreign sales to U.S. Dollars for financial reporting purposes. Sales and service fees for fiscal 2014 totaled $222,303,000, an increase of $29,499,000, or 15%, from fiscal 2013. The year-over-year increase in sales and service fees for fiscal 2014 benefitted from a favorable currency impact of approximately $3,294,000, or 2%, when translating foreign sales to U.S. Dollars for financial reporting purposes.

 

The following table sets forth sales and service fees by geographic region for the quarter and fiscal year ended October 31, 2014 and 2013 (in thousands):

 

   Quarter Ended   Fiscal Year Ended 
   October 31,   October 31, 
           $   %           $   % 
   2014   2013   Change   Change   2014   2013   Change   Change 
North America  $19,919   $16,697   $3,222    19%  $62,142   $60,759   $1,383    2%
Europe   37,303    32,316    4,987    15%   138,201    114,855    23,346    20%
Asia Pacific   5,001    4,929    72    1%   21,960    17,190    4,770    28%
 Total  $62,223   $53,942   $8,281    15%  $222,303   $192,804   $29,499    15%

 

Sales and service fees increased in all regions during the fourth quarter of fiscal 2014. The overall improvement in sales for those regions was driven by increased shipments and a favorable mix of higher-performance machines. During the first three quarters of fiscal 2014, sales in North America experienced some market softening in comparison to the same periods in fiscal 2013. However, following the International Manufacturing Technology Show in September 2014, sales of our machine tools in North America increased due to year-end promotional activities, resulting in a year-over-year increase in the fourth quarter of fiscal 2014 of approximately 19% compared to the same period in fiscal 2013.

 

 
 

 

Sales and service fees in Europe during the fourth quarter of fiscal 2014 increased by 15%, compared to the corresponding prior year period. European sales and service fees for the fourth quarter and fiscal 2014 included $1,307,000 and $7,726,000, respectively, of sales from electro-mechanical components and accessories manufactured by Hurco’s Italian-based subsidiary, LCM Precision Technologies (LCM), compared to $1,923,000 and $2,446,000, respectively for each of those periods in fiscal 2013. Hurco acquired the LCM machine tool component business on July 1, 2013.

 

Orders for the fourth quarter of fiscal 2014 were $65,302,000, an increase of $13,444,000, or 26%, over the corresponding period in fiscal 2013. European orders for the fourth quarter of fiscal 2014 included $2,601,000 of LCM products compared to $1,951,000 in the fourth quarter of fiscal 2013. Orders for fiscal 2014 were $232,454,000, an increase of $34,589,000, or 17%, over fiscal 2013, and included $9,886,000 of orders for LCM products compared to $5,719,000 for fiscal 2013. North American orders for the fourth quarter and fiscal 2014 increased compared to the corresponding periods in fiscal 2013, primarily due to promotional activities related to the International Manufacturing Technology Show held in September 2014. European orders for the fourth quarter and fiscal 2014 increased compared to the corresponding periods in fiscal 2013, primarily due to increased orders in Germany and the United Kingdom. The year-over-year improvement in Asian Pacific orders for the fourth quarter and fiscal 2014 included the benefit of multiple machine orders and a favorable mix of higher-performance machines. The impact of currency translation on orders booked in the fourth quarter and fiscal 2014 was consistent with the impact on sales in those periods.

 

The following table sets forth new orders booked by geographic region for the fourth quarter and fiscal 2014 and 2013, respectively (in thousands):

 

   Quarter Ended   Fiscal Year Ended 
   October 31,   October 31, 
           $   %           $   % 
   2014   2013   Change   Change   2014   2013   Change   Change 
North America  $23,339   $17,722   $5,617    32%  $63,379   $59,798   $3,581    6%
Europe   37,797    30,630    7,167    23%   148,495    120,349    28,146    23%
Asia Pacific   4,166    3,506    660    19%   20,580    17,718    2,862    16%
 Total  $65,302   $51,858   $13,444    26%  $232,454   $197,865   $34,589    17%

 

Hurco’s gross profit for the fourth quarter of fiscal 2014 was $20,052,000, or 32% of sales, compared to $15,142,000, or 28% of sales, for the corresponding period in fiscal 2013. Gross profit for fiscal 2014 was $68,612,000, or 31% of sales, compared to $55,056,000, or 29% of sales, for fiscal 2013. The increases in gross profit were attributable to higher sales volumes, particularly in Europe, the primary market for higher-performance machines, and increased cost efficiencies realized from higher production levels.

 

Selling, general and administrative expenses for the fourth quarter of fiscal 2014 were $12,940,000, or 21% of sales, compared to $11,802,000, or 22% of sales, in the corresponding period in fiscal 2013. Selling, general and administrative expenses for fiscal 2014 were $46,615,000, or 21% of sales, compared to $41,413,000, or 21% of sales, for fiscal 2013. The year-over-year increases in selling, general and administrative expenses in both periods were primarily due to incremental operating expenses associated with the acquisition of the LCM business, increased tradeshow expenses, and increased incentive compensation for employees.

 

 
 

 

The effective tax rate for the fourth quarter of fiscal 2014 was 30%, compared to 39% for the fourth quarter of fiscal 2013. The effective tax rate for fiscal 2014 was 29%, compared to 34% for fiscal 2013. The changes in effective tax rates in the year-over-year comparisons reflected a shift in geographic mix of income and loss among tax jurisdictions.

 

Cash and cash equivalents totaled $53,846,000 at October 31, 2014, compared to $42,804,000 at October 31, 2013.

 

Michael Doar, Chief Executive Officer, stated, “I am excited about the performance of our company this year as all sales regions have shown improvement and contributed to one of the best financial years in the company’s history. The growth we have seen in Europe and Asia is attributable to improved market conditions and increased sales of our expanded product line of VMX machines. North America had a strong finish, due in part to the vitality of our brand and reputation as exhibited at the International Manufacturing Technology Show in September where our customers confirmed that our ability to make them more productive and more profitable with our control technologies is what sets us apart from the competition.”

 

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

 

Certain statements in this news release are 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, breach of our network and system security measures, 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, negative or unforeseen tax consequences and governmental actions and initiatives including import and export restrictions and tariffs.

 

Contact: Sonja K. McClelland

Vice President, Secretary, Treasurer & Chief Financial Officer

317-293-5309

 

 
 

  

Hurco Companies, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per-share data)

 

   Three Months Ended
October 31,		   Twelve Months Ended
October 31,		 
   2014   2013   2014   2013 
   (unaudited)     
Sales and service fees  $62,223   $53,942   $222,303   $192,804 
                     
Cost of sales and service   42,171    38,800    153,691    137,748 
Gross profit   20,052    15,142    68,612    55,056 
                     
Selling, general and administrative expenses   12,940    11,802    46,615    41,413 
Operating income   7,112    3,340    21,997    13,643 
                     
Interest expense   68    86    264    280 
                     
Interest income   23    13    78    74 
                     
Investment income (expense)   2    2    42    21 
                     
Other (income) expense, net   161    155    492    1,016 
                     
Income before income taxes   6,908    3,114    21,361    12,442 
                     
Provision for income taxes   2,045    1,215    6,218    4,252 
                     
Net income  $4,863   $1,899   $15,143   $8,190 
                     
Income per common share                    
                     
Basic  $0.74   $0.29   $2.31   $1.26 
Diluted  $0.74   $0.29   $2.30   $1.25 
                     
Weighted average common shares outstanding                    
Basic   6,508    6,465    6,497    6,455 
Diluted   6,564    6,503    6,538    6,497 

 

OTHER CONSOLIDATED FINANCIAL DATA

 

   Three Months Ended
October 31,		   Twelve Months Ended
October 31,		 
  2014   2013   2014   2013 
   (unaudited)     
Operating Data:                    
                     
Gross margin   32%   28%   31%   29%
                     
SG&A expense as a percentage of sales   21%   22%   21%   21%
                     
Operating income as a percentage of sales   11%   6%   10%   7%
                     
Pre-tax income as a percentage of sales   11%   6%   10%   6%
                     
Effective tax rate   30%   39%   29%   34%
                     
Depreciation and amortization   950    886    3,309    3,392 
                     
Capital expenditures   500    483    2,635    2,380 

 

 

10/31/2014

  

10/31/2013

 
         
Balance Sheet Data:          
           
Working capital (excluding cash)  $90,105   $86,512 
           
Days sales outstanding (unaudited)   45    45 
           
Inventory turns (unaudited)   1.5    1.4 
           
Capitalization          
Total debt  $3,272   $3,665 
Shareholders' equity   164,645    151,491 
Total  $167,917   $155,156 

  

 
 

  

Hurco Companies, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

   October 31,   October 31, 
   2014   2013 
         
ASSETS          
Current assets:          
Cash and cash equivalents  $53,846   $42,804 
Accounts receivable, net   45,435    36,145 
Inventories, net   95,992    95,260 
Deferred income taxes   2,062    2,080 
Derivative assets   3,127    699 
Prepaid expenses   8,927    6,584 
Other   1,365    1,430 
Total current assets   210,754    185,002 
           
Property and equipment:          
Land   782    782 
Building   7,314    7,326 
Machinery and equipment   19,432    19,059 
Leasehold improvements   3,523    3,634 
    31,051    30,801 
Less accumulated depreciation and amortization   (19,546)   (18,502)
    11,505    12,299 
           
Non-current assets:          
 Software development costs, less accumulated amortization   3,519    3,714 
 Goodwill   2,606    2,807 
 Intangible assets, net   1,635    2,155 
 Other assets   6,912    5,258 
   $236,931   $211,235 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Current liabilities:          
Accounts payable  $42,718   $35,527 
Derivative liabilities   705    1,212 
Accrued expenses   20,108    15,282 
Short-term debt   3,272    3,665 
Total current liabilities   66,803    55,686 
           
Non-current liabilities:          
Deferred income taxes   993    743 
Accrued tax liability   1,054    1,103 
Deferred credits and other obligations   3,436    2,212 
Total liabilities   72,286    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; 6,589,918 and 6,533,510 shares issued; and 6,508,880 and 6,465,054 shares outstanding, as of October 31, 2014 and October 31, 2013, respectively   651    647 
Additional paid-in capital   55,974    54,698 
Retained earnings   111,580    98,130 
Accumulated other comprehensive loss   (3,560)   (1,984)
Total shareholders' equity   164,645    151,491 
   $236,931   $211,235