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 6, 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):

 

¨     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 Operations and Financial Condition

 

On March 6, 2015, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the first quarter ended January 31, 2015. 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 9.01

Financial Statements and Exhibits

 

99.1

Press Release of Hurco Companies, Inc. dated March 6, 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:  March 6, 2015
	HURCO COMPANIES, INC.
	By:	/s/ Sonja K. McClelland
		Sonja K. McClelland, Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

EXHIBIT INDEX

 

99.1

Press Release of Hurco Companies, Inc. dated March 6, 2015

 

 

 

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

FRIDAY, March 6, 2015

 

HURCO REPORTS FIRST QUARTER RESULTS

 

INDIANAPOLIS, INDIANA — March 6, 2015, Hurco Companies, Inc. (Nasdaq Global Select Market: HURC) today reported results for the first fiscal quarter ended January 31, 2015. Hurco recorded net income of $3,766,000, or $0.57 per diluted share, for the first quarter of fiscal 2015 compared to net income of $2,369,000 or $0.36 per diluted share, for the corresponding period in fiscal 2014.

 

Sales and service fees for the first quarter of fiscal 2015 were $50,972,000, a slight increase from the same period in the prior year. However, sales and service fees for the first quarter of fiscal 2015 were adversely affected by an unfavorable currency impact of approximately $3,578,000, or 7%, 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 2015 and 2014 (in thousands):

 

		Three Months Ended January 31,
		2015				2014				$ Change				% Change
North America		$	14,851			$	16,293			$	(1,442	)			-9	%
Europe			31,800				29,234				2,566				9	%
Asia Pacific			4,321				5,443				(1,122	)			-21	%
Total		$	50,972			$	50,970			$	2				0	%

 

European sales increased during the first quarter of fiscal 2015 by 9% compared to the corresponding prior year period. European sales for the first quarter of fiscal 2015 were adversely affected by an unfavorable currency impact of approximately $3,365,000, or 12%, due primarily to a weaker Euro and Pound Sterling when translating foreign sales to U.S. Dollars for financial reporting purposes. The year-over-year improvement in European sales was primarily driven by increased shipments of higher-performance machines in Germany, France and Italy. North American sales decreased in the first quarter of fiscal 2015 by 9%, reflecting lower order levels in comparison to the same period in the prior year, as many customers took advantage of promotional activities for the International Manufacturing Technology Show (IMTS) during the fourth quarter of fiscal 2014. Asian Pacific sales decreased in the first quarter of fiscal 2015 by 21% compared to the corresponding prior year period, primarily due to a large multiple machine order received in the prior year period from a customer in China.

 

  

Orders in the first quarter of fiscal 2015 were $45,009,000, a decrease of $12,085,000, or 21%, compared to the corresponding period in fiscal 2014. The following table sets forth new orders booked by geographic region for the first quarters of fiscal 2015 and 2014 (in thousands):

 

		Three Months Ended January 31,
		2015				2014				$ Change				% Change
North America		$	13,911			$	14,572			$	(661	)			-5	%
Europe			25,979				36,511				(10,532	)			-29	%
Asia Pacific			5,119				6,011				(892	)			-15	%
Total		$	45,009			$	57,094			$	(12,085	)			-21	%

 

European orders for the first quarter of fiscal 2015 decreased by 29% compared to the corresponding period in fiscal 2014 primarily due to softening market conditions, particularly in Eastern Europe. European orders for the first quarter of fiscal 2015 were adversely affected by an unfavorable currency impact of approximately $2,878,000, or 9%, due primarily to a weaker Euro and Pound Sterling when translating foreign orders to U.S. Dollars for financial reporting purposes. North American orders for the first quarter of fiscal 2015 decreased by 5% compared to the corresponding period in fiscal 2014, as many customers took advantage of promotional activities at the IMTS during the fourth quarter of fiscal 2014. The year-over-year decrease in Asian Pacific orders of 15% was due primarily to a large multiple machine order received in the prior year period from a customer in China.

 

Hurco’s gross profit for the first quarter of fiscal 2015 was $16,547,000, or 32% of sales, compared to $13,919,000, or 27% of sales, for the corresponding prior year period. The increase in gross profit was attributable to increased sales in Europe of higher-performance machines and improved leverage of fixed costs over higher production levels in comparison to the corresponding prior year period.

 

Selling, general and administrative expenses for the first quarter of fiscal 2015 were $10,454,000, or 21% of sales, compared to $10,600,000, or 21% of sales, in the corresponding period in fiscal 2014. Selling, general and administrative expenses were favorably impacted by approximately $474,000, or 4%, when translating foreign expenses to U.S. Dollars for financial reporting purposes.

 

The effective tax rate for the first quarter of fiscal 2015 was 35%, compared to 28% for the corresponding prior year period, due to changes in the geographic mix of income and loss among tax jurisdictions.

 

Cash and cash equivalents totaled $59,855,000 at January 31, 2015, compared to $53,846,000 at October 31, 2014. Working capital, excluding cash and cash equivalents, was $85,831,000 at January 31, 2015 compared to $90,105,000 at October 31, 2014. The decrease in working capital, excluding cash, was primarily due to decreases in accounts receivable and the impact of translating foreign currencies to U.S. Dollars for financial reporting purposes.

 

  

Michael Doar, Chief Executive Officer, stated, “We continue to focus on shareholder return and investing in new products for our customers. Increased sales, excluding the impact of currency, and improved earnings reflect our discipline and financial stability despite challenging market conditions. We continue to expand our product line as we are confident these new products will enable us to fulfill the needs of more manufacturers worldwide. Additionally, we have begun the transition to our new control technology that we introduced at the International Manufacturing Technology Show last year. The new control features and numerous enhancements offer efficiencies that we expect to improve profitability for 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

 

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, breaches 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 STATEMENT OF INCOME

(In thousands, except per-share data)

 

		Quarter Ended January 31,
		2015				2014
		(unaudited)
Sales and service fees		$	50,972			$	50,970
Cost of sales and service			34,425				37,051
Gross profit			16,547				13,919
Selling, general and administrative expenses			10,454				10,600
Operating income			6,093				3,319
Interest expense			69				77
Interest income			21				16
Investment income			65				31
Other expense (income), net			307				16
Income before taxes			5,803				3,273
Provision for income taxes			2,037				904
Net income		$	3,766			$	2,369
Earnings per common share
Basic		$	0.57			$	0.36
Diluted		$	0.57			$	0.36
Weighted average common shares outstanding
Basic			6,523				6,477
Diluted			6,569				6,514

 

OTHER CONSOLIDATED FINANCIAL DATA		Quarter Ended January 31,
Operating Data:		2015				2014
		(unaudited)
Gross margin			32	%			27	%
SG&A expense as a percentage of sales			21	%			21	%
Operating income as a percentage of sales			12	%			7	%
Pre-tax income as a percentage of sales			11	%			6	%
Effective Tax Rate			35	%			28	%
Depreciation and amortization			726				735
Capital expenditures			524				519

 

Balance Sheet Data:		1/31/2015				10/31/2014
		(unaudited)				(audited)
Working capital (excluding cash)		$	85,831			$	90,105
Days sales outstanding (unaudited)			55				49
Inventory turns (unaudited)			1.6				1.5
Capitalization
Total debt		$	3,198			$	3,272
Shareholders' equity			165,265				164,645
Total		$	168,463			$	167,917

 

  

Hurco Companies, Inc.

CONSOLIDATED BALANCE SHEETS

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

 

		January 31,				October 31,
		2015				2014
		(unaudited)				(audited)
ASSETS
Current assets:
Cash and cash equivalents		$	59,855			$	53,846
Accounts receivable, net			37,234				45,435
Inventories, net			91,104				95,992
Deferred income taxes			889				2,062
Derivative assets			7,455				3,127
Prepaid expenses			10,375				8,927
Other			1,282				1,365
Total current assets			208,194				210,754
Property and equipment:
Land			782				782
Building			7,314				7,314
Machinery and equipment			18,741				19,432
Leasehold improvements			3,294				3,523
			30,131				31,051
Less accumulated depreciation and amortization			(19,136	)			(19,546	)
			10,995				11,505
Non-current assets:
Software development costs, less accumulated amortization			3,455				3,519
Goodwill			2,373				2,606
Intangible assets, net			1,431				1,635
Other assets			6,876				6,912
		$	233,324			$	236,931
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	40,853			$	42,718
Derivative liabilities			1,269				705
Accrued expenses			17,188				20,108
Short-term debt			3,198				3,272
Total current liabilities			62,508				66,803
Non-current liabilities:
Deferred income taxes			1,194				993
Accrued tax liability			969				1,054
Deferred credits and other obligations			3,388				3,436
Total liabilities			68,059				72,286
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; 6,638,931 and 6,589,918 shares issued; and 6,537,983 and 6,508,880 shares outstanding, as of January 31, 2015 and October 31, 2014, respectively			654				651
Additional paid-in capital			56,418				55,974
Retained earnings			114,889				111,580
Accumulated other comprehensive loss			(6,696	)			(3,560	)
Total shareholders' equity			165,265				164,645
		$	233,324			$	236,931