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Hurco Reports First Quarter Results -- Sales Up 92%, Orders Up 115% And Earnings Of $1.5 Million

Michael Doar, Chairman, Chief Executive Officer and President, stated, "I am encouraged about the direction of our current order trend and our return to profitability. Due to our solid financial position, we had the resources to continue research and development projects during the downturn, and received several patent awards and introduced new products focused on making our customer's operations more profitable. Ultimately, this will allow us to expand our customer base and increase our market share as we continue to emerge from the recent recession." 

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 Canada, China, England, France, Germany, India, Italy, Poland, Singapore, South Africa, South Korea 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, changes in general economic and business conditions that affect demand for computerized machine systems, computer numerical control systems and software products, changes in manufacturing markets, innovations by competitors, our ability to protect our intellectual property, fluctuations in exchange rates, fluctuations in prices of raw materials, changes in market demands, quality and delivery performance by our vendors, uncertainty concerning our ability to use tax loss carryforwards and governmental actions and initiatives including import and export restrictions and tariffs.
     
Hurco Companies, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per-share data)
     
  Three Months Ended  January 31,
  2011 2010
   (unaudited) 
Sales and service fees  $ 39,680  $ 20,616
     
Cost of sales and service  27,989  16,636
Gross profit  11,691  3,980
     
Selling, general and administrative expenses  8,830  6,533
Operating income (loss)  2,861  (2,553)
     
Interest expense  5  14
     
Interest income  40  20
     
Investment income  5  5
     
Other expense (income), net  456  277
     
Income (loss) before taxes  2,445  (2,819)
     
Provision (benefit) for income taxes  899  (983)
     
Net income (loss)  $ 1,546  $ (1,836)
     
Earnings (losses) per common share    
Basic  $ 0.24  $ (0.29)
Diluted  $ 0.24  $ (0.29)
     
Weighted average common shares outstanding    
Basic  6,441  6,441
Diluted  6,463  6,441
     
OTHER CONSOLIDATED FINANCIAL DATA Three Months Ended  January 31,
Operating Data: 2011 2010
   (unaudited) 
Gross margin 29% 19%
     
SG&A expense as a percentage of sales 22% 32%
     
Operating income (loss) as a percentage of sales 7% -12%
     
Pre-tax income (loss) as a percentage of sales  6% -14%
     
Effective Tax Rate 37% 35%
     
Depreciation and amortization  1,067  833
     
Capital expenditures  541  475
     
Balance Sheet Data: 1/31/2011 10/31/2010
   (unaudited)   
Working capital (excluding cash)  $ 47,165  $ 45,713
     
Days sales outstanding  33  33
     
Inventory turns  1.6  1.5
     
Capitalization    
Total debt  $ --   $ -- 
Shareholders' equity  117,808  114,740
Total  $ 117,808  $ 114,740
     
Hurco Companies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per-share data)
     
  January 31, October 31,
  2011 2010
   (unaudited)   (audited) 
ASSETS    
Current assets:    
Cash and cash equivalents  $ 50,289  $ 48,255
Accounts receivable, net  18,073  20,114
Refundable taxes  4,731  5,093
Inventories, net  59,668  55,866
Deferred income taxes, net  2,087  2,467
Derivative assets  1,429  905
Other  3,847  3,508
Total current assets  140,124  136,208
     
Property and equipment:    
Land  782  782
Building  7,116  7,116
Machinery and equipment  15,426  15,095
Leasehold improvements  2,256  2,183
   25,580  25,176
Less accumulated depreciation and amortization  (14,066)  (13,424)
   11,514  11,752
     
Non-current assets:    
 Software development costs, less accumulated amortization  5,862  6,042
 Other assets  6,347  6,344
   $ 163,847  $ 160,346
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 29,189  $ 30,394
Derivative liabilities  1,759  2,123
Accrued expenses  11,722  9,723
Total current liabilities  42,670  42,240
     
Non-current liabilities:    
Deferred income taxes, net  2,295  2,335
Deferred credits and other obligations  1,074  1,031
Total liabilities  46,039  45,606
     
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;    
13,250,000 shares authorized; and 6,440,851 shares issued    
 and outstanding  644  644
Additional paid-in capital  52,215  52,144
Retained earnings  65,370  63,824
Accumulated other comprehensive loss  (421)  (1,872)
Total shareholders' equity  117,808  114,740
   $ 163,847  $ 160,346
CONTACT: John G. Oblazney
         Vice President & Chief Financial Officer
         317-293-5309

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