Hurco Reports Fourth Quarter and Full-Year Results

Hurco Reports Fourth Quarter and Full-Year Results

INDIANAPOLIS, Jan. 11, 2013 (GLOBE NEWSWIRE) -- Hurco Companies, Inc.,
(Nasdaq:HURC) today reported results for the fourth quarter and the fiscal
year ended October 31, 2012. For the fourth quarter of fiscal 2012, Hurco
recorded net income of $4,086,000, or $0.63 per diluted share, as compared to
net income of $2,654,000, or $0.41 per diluted share, for the corresponding
period in fiscal 2011. For the full fiscal year 2012, Hurco recorded net
income of $15,638,000, or $2.40 per diluted share, as compared to net income
of $11,124,000, or $1.71 per diluted share, for fiscal 2011.

Sales and service fees for the fourth quarter of fiscal 2012 were $56,067,000,
an increase of $7,496,000, or 15%, from the prior year period. This
quarter-over-quarter improvement is net of the adverse impact of $2,087,000,
or 4%, in the fourth quarter of fiscal 2012, due to a weaker Euro when
translating foreign sales to U.S. Dollars for financial reporting purposes.
Sales and service fees for the full fiscal year totaled $203,117,000, an
increase of $22,716,000, or 13%, from fiscal 2011. The unfavorable impact of
currency translation on the full fiscal year-over-year comparison was
$7,609,000, or 4%.

The following table sets forth net sales and service fees by geographic region
for the quarter and fiscal year ending October 31, 2012 and 2011 (in
thousands), respectively:

                    
Net Sales and Service Fees by Geographic Region                        
                                                      
           Quarter Ended             Fiscal Year Ended              
            October 31,                October 31,
                               %                           %
            2012      2011      Change 2012      2011       Change
North       $17,692 $13,919 27%    $60,527 $49,637  22%
America
Europe      33,745   31,199   8%     119,359  111,080   7%
Asia        4,630    3,453    34%    23,231   19,683    18%
Pacific
Total       $56,067 $48,571 15%    $203,117 $ 180,400 13%

The fourth quarter increase in sales was driven by increased demand in North
America and Europe. The 8% increase in Europe was actually 15% when adjusted
to exclude the negative impact of foreign currency translation due to a weaker
Euro.Compared to the fourth quarter of fiscal 2011, unit shipments for the
fourth quarter of fiscal 2012 increased in North America by 33%, in Europe by
13%, and in Asia Pacific by 12%.For the full fiscal year, sales increased in
all regions, driven by higher customer demand.Unit shipments for the full
year 2012, compared to fiscal 2011, increased in North America by 14%, in
Europe by 4% and in Asia Pacific by 16%.

The following table sets forth new orders booked by geographic region for the
fourth quarter and fiscal year ending October 31, 2012 and 2011 (in
thousands), respectively:

                                             
Orders by Geographic Region                                             
                                                      
           Quarter Ended             Fiscal Year Ended             
            October 31,                October 31,
                               %                           %
            2012      2011      Change 2012      2011       Change
North       $20,398 $13,365 53%    $61,644 $50,058  23%
America
Europe      27,745   22,614   23%    115,222  121,274   -5%
Asia        3,674    4,324    -15%   21,271   25,651    -17%
Pacific
Total       $51,817 $40,303 29%    $198,137 $ 196,983 1%

During the fourth quarter of 2012, orders increased in North America and
Europe due to favorable market conditions.We experienced increased orders in
North America, following our successful showing at the International
Manufacturing Technology Show (IMTS) in Chicago where we launched our
rebranding initiative and new line of high speed machines.We experienced a
decline in order activity in Asia where industrial activity has been
slowing.Compared to the fourth quarter of fiscal 2011, unit orders for the
fourth quarter of fiscal 2012 increased in North America by 54% and in Europe
by 22%, but decreased in Asia Pacific by 9%.During the full fiscal year 2012,
orders remained relatively consistent with the prior fiscal year.Unit orders
for the fiscal year 2012 compared to fiscal 2011 increased in North America by
22%, but decreased in Europe by 9% and in Asia Pacific by 22%.The impact of
currency translation on orders booked in the fourth quarter and full fiscal
year was consistent with the impact on sales.

Hurco's fourth quarter gross profit was $17,220,000, or 31% of sales, compared
to $15,682,000, or 32% of sales, for the prior year period.For the full
fiscal year 2012, gross profit was $63,181,000, or 31% of sales, compared to
$55,874,000, or 31% of sales, for fiscal 2011.The increase in gross profit
for the fourth quarter and the year was due primarily to the increase in
sales.

Selling, general and administrative expenses for the fourth quarter of fiscal
2012 were $11,870,000, an increase of $778,000, or 7%, from the corresponding
period in 2011.Selling, general and administrative expenses were $41,160,000
for fiscal 2012, an increase of $2,667,000, or 7%, over fiscal 2011. The
increases in selling, general and administrative expenses for the fourth
quarter and fiscal year were primarily due to higher sales and marketing
expenses and higher commissions as a result of increased sales.

Other expenses during the fourth quarter of fiscal 2012 decreased $1,051,000
compared to the fourth quarter of fiscal 2011. Other expenses for fiscal 2012
decreased by $1,605,000.These decreases were primarily due to decreased
foreign currency losses experienced in fiscal 2012.

Cash and cash equivalents totaled $35,770,000 as of October 31, 2012, compared
to $44,961,000 as of October 31, 2011.Inventories as of October 31, 2012 were
$91,320,000, an increase of $10,193,000, or 13%, from the end of the prior
fiscal year primarily due to an increase in finished goods inventory intended
to meet forecasted growth in customer demand.Working capital, excluding cash,
was $88,239,000 as of October 31, 2012, compared to $61,885,000 as of October
31, 2011.The increase in working capital, excluding cash, was primarily due
to increased inventory resulting from higher production levels and increased
accounts receivable from higher sales volumes.

Michael Doar, President and Chief Executive Officer, stated, "Considering the
economic uncertainty in Europe, we finished the year with a strong
performance. I believe our results are a testament to customer acceptance of
our cutting edge control technology and product line expansion. North America
achieved record sales for the quarter, which I attribute to the excitement
surrounding the rebranding initiative that we introduced at the International
Manufacturing Technology Show in Chicago. Additionally, I believe U.S.
customers appreciate the fact that our control technology focuses on helping
them increase profitability, especially in the manufacture of
small-to-medium-sized lots, which accounts for the majority of their machining
activity. Going forward, we will continue to deliver machine tools with
advanced technology that simplifies complex operations, while providing a user
interface that is intuitive and user-friendly."

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 China, England, France, Germany, India, Italy, Poland,
Singapore, South Africa and the United States of America. Web Site:
www.hurco.com

The Hurco Companies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=14761

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, changes in operations due to acquisitions, the
loss of key personnel, and governmental actions and initiatives including
import and export restrictions and tariffs.

Hurco Companies, Inc.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per-share data)
                                                                
                                  Three Months Ended   Twelve Months Ended
                                   October 31,           October 31,
                                  2012       2011       2012       2011
                                  (unaudited)         
Sales and service fees             $56,067  $48,571  $203,117 $180,400
                                                                
Cost of sales and service          38,847    32,889    139,936   124,526
Gross profit                       17,220    15,682    63,181    55,874
                                                                
Selling, general and               11,870    11,092    41,160    38,493
administrative expenses
Operating income                   5,350     4,590     22,021    17,381
                                                                
Interest expense                   63        82        168       143
                                                                
Interest income                    11        25        69        132
                                                                
Investment income (expense)        2         4         7         13
                                                                
Other expense (income), net        (5)       1,043     65        1,764
                                                                
Income before taxes                5,305     3,494     21,864    15,619
                                                                
Provision for income taxes         1,219     840       6,226     4,495
                                                                
Net income                         $4,086   $2,654   $15,638  $11,124
                                                                
Earnings per common share                                        
                                                                
Basic                              $0.63    $0.41    $2.41    $1.72
Diluted                            $0.63    $0.41    $2.40    $1.71
                                                                
Weighted average common shares                                   
outstanding
Basic                              6,447     6,441     6,445     6,441
Diluted                            6,469     6,467     6,470     6,472
                                                                
OTHER CONSOLIDATED FINANCIAL DATA  Three Months Ended   Twelve Months Ended
                                   October 31,           October 31,
Operating Data:                    2012       2011       2012       2011
                                  (unaudited)         
Gross margin                       31%        32%        31%        31%
                                                                
SG&A expense as a percentage of    21%        23%        20%        21%
sales
                                                                
Operating income as a percentage   10%        9%         11%        10%
of sales
                                                                
Pre-tax income as a percentage of  9%         7%         11%        9%
sales
                                                                
Effective Tax Rate                 23%        24%        28%        29%
                                                                
Depreciation and amortization      931       1,073     4,126     4,300
                                                                
Capital expenditures               1,129     1,097     3,732     2,842
                                                                
Balance Sheet Data:                10/31/2012 10/31/2011           
                                                                
Working capital (excluding cash)   $88,239  $61,885            
                                                                
Days sales outstanding (unaudited) 38        37                  
                                                                
Inventory turns (unaudited)        1.5       1.6                 
                                                                
Capitalization                                                   
Total debt                         $3,206   $865               
Shareholders' equity               143,793   126,212             
Total                              $146,999 $127,077           


Hurco Companies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per-share data)
                                                            
                                            October 31, 2012 October 31, 2011
                                                            
ASSETS                                                       
Current assets:                                              
Cash and cash equivalents                    $35,770        $44,961
Accounts receivable, net                     35,297          27,057
Refundable taxes                             1,459           1,442
Inventories, net                             91,320          81,127
Deferred income taxes                        1,182           2,692
Derivative assets                            708             1,197
Other                                        7,645           5,598
Total current assets                         173,381         164,074
                                                            
Property and equipment:                                      
Land                                         782             782
Building                                     7,352           7,116
Machinery and equipment                      17,411          16,336
Leasehold improvements                       3,467           2,508
                                            29,012          26,742
Less accumulated depreciation and            (16,933)        (15,198)
amortization
                                            12,079          11,544
                                                            
Non-current assets:                                          
Software development costs, less            3,969           4,928
accumulated amortization
Other assets                                5,883           5,999
                                            $195,312       $186,545
                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                         
                                                            
Current liabilities:                                         
Accounts payable                             $29,788        $39,046
Derivative liabilities                       569             1,609
Accrued expenses                             15,809          15,708
Short-term debt                              3,206           865
Total current liabilities                    49,372          57,228
                                                            
Non-current liabilities:                                     
Deferred income taxes                        903             1,982
Deferred credits and other obligations       1,244           1,123
Total liabilities                            51,519          60,333
                                                            
Commitments and contingencies                                
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; 6,502,928 and 6,471,710 shares   645             644
issued; and 6,447,210 and 6,440,851 shares
outstanding, as of October 31, 2012 and
October 31, 2011, respectively
Additional paid-in capital                   53,415          52,614
Retained earnings                            90,586          74,948
Accumulated other comprehensive loss         (853)           (1,994)
Total shareholders' equity                   143,793         126,212
                                            $195,312       $186,545

CONTACT: John G. Oblazney
         Vice President & Chief Financial Officer
         317-293-5309

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