8-K

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) July 31, 2006

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):

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 2.02.Results of Operation and Financial Condition

On August 22, 2006, Hurco Companies, Inc. (the "Registrant") reported its results of operations for the third quarter ended July 31, 2006. 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 9.01Financial Statements and Exhibits.

99 Press Release dated August 22, 2006

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: August 22, 2006

HURCO COMPANIES, INC

By: /s/ Stephen J. Alesia

Vice President and

Chief Financial Officer

EXHIBIT INDEX

Exhibit 99Press Release of Hurco Companies, Inc. dated August 22, 2006

EX-99

                           

FOR IMMEDIATE RELEASE                        EXHIBIT 99

TUESDAY, AUGUST 22, 2006

HURCO REPORTS THIRD QUARTER 2006 RESULTS

INDIANAPOLIS, INDIANA, — August 22, 2006—Hurco Companies, Inc. (Nasdaq:HURC) today announced that for its third fiscal quarter, which ended July 31, 2006, it recorded net income of $3,802,000, or $.59 per share, compared $2,879,000, or $.45 per share, for the corresponding quarter of 2005. For the first nine months of fiscal 2006, Hurco recorded net income of $10,764,000 or $1.68 per share, compared to $9,208,000 or $1.46 per share, for the corresponding 2005 period.

The company noted that its provision for income taxes for the third quarter and first nine months of fiscal 2006 increased by approximately $1,300,000 and $4,000,000, respectively, over the amounts recorded for the corresponding periods of fiscal 2005, due primarily to its prior utilization of substantially all of its domestic net operating loss carryforwards. Income before taxes for the latest quarter was $5,448,000, an increase of 70% over the $3,196,000 reported for the same period one year ago.

Sales and service fees for the third quarter of fiscal 2006 were $36,597,000, an increase of $7,042,000, or 24%, over the corresponding quarter of 2005. The increase was most pronounced in Europe and Asia, where sales and service fees rose 35% and 36%, respectively, and accounted for approximately 69% of total sales for the 2006 quarter, as compared to 63% for the corresponding quarter of fiscal 2005. These results reflected a significant improvement in demand as well as increased shipments of the company’s larger and more highly-priced models in overseas markets, and, to a lesser extent, the favorable effects of a weakened U.S. Dollar in the 2006 third quarter when translating foreign sales into U.S. Dollars for financial reporting purposes. In contrast, for the full nine months ended July 31, 2006, the U.S. Dollar was stronger than in the corresponding period of fiscal 2005, and total sales and service fees increased by only 16% to $105,352,000.

New orders booked in the third quarter of fiscal 2006 were $38,010,000, an increase of $9,118,000, or 32%, over the third quarter of 2005. The dollar value of orders booked was a record for the company and benefited from a significant increase in orders of higher-priced machines from customers in the United Kingdom and Germany, as well as the favorable currency translation effects of the weakened U.S. Dollar during the 2006 third quarter, which accounted for $1,333,000, or 14.6%, of the increase. For the nine months ended July 31, 2006, new orders booked totaled $112,680,000, an increase of $23,972,000, or 27%, over the corresponding 2005 period. As was the case with sales and service fees, the greater strength of the U.S. Dollar on an average basis during the nine-month period in 2006 compared to its level in the 2005 period had an unfavorable impact on the amount of orders recorded in the 2006 period after giving effect to currency translation. Orders booked for the first nine months of fiscal 2006 were unfavorably affected by approximately $2,535,000 due to currency translation.

Hurco’s gross margin for the third quarter of fiscal 2006 was 35.1% compared to 33.4% for the prior year period. The improvement was primarily the result of increased unit volume.

Operating income for the third quarter of fiscal 2006 totaled $5,443,000, or 15% of sales and service fees, compared to $3,226,000, or 11% of sales and service fees, for the same period in the prior year.

Michael Doar, Chief Executive Officer, stated, "We are pleased with the financial results achieved in the third quarter. Order intake in the Europe and Asia continues to be strong while order rates in United States were up only slightly in the third quarter. We are looking forward to showcasing our new products, particularly our new Winmax control, in September at the bi-annual Chicago IMTS trade show, the largest metal working trade show in the United States, which I expect will provide a boost to domestic order activity. I was also pleased with our recent open house in Indianapolis, where over 300 customers attended the event, which featured product demonstrations and seminars. The enthusiasm our products have received at recent trade shows confirms the strength of our product line.”

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 the aerospace, defense, medical equipment, energy, transportation and computer equipment. The Company is based in Indianapolis, Indiana, and has sales, application engineering and service subsidiaries in High Wycombe, England; Munich, Germany; Paris, France; Milan, Italy; Shanghai, China and Singapore, along with manufacturing operations in Taiwan. Products are sold through independent agents and distributors in the United States, Europe and Asia. The Company also has direct sales forces in the United Kingdom, Germany, France, Italy, and Asia.

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, quality and delivery performance by our contract manufacturers and governmental actions and initiatives including import and export restrictions and tariffs.

Contact: Stephen J. Alesia

Vice President & CFO

317-298-2631

Hurco Companies, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per-share data)
		Three Months Ended July 31,						Nine Months  Ended July 31,
		2006			2005			2006			2005
		(unaudited)						(unaudited)
Sales and service fees	$	36,597		$	29,555		$	105,352		$	90,791
Cost of sales and service		23,762			19,692			68,412			60,421
Gross profit		12,835			9,863			36,940			30,370
Selling, general and administrative expenses		7,392			6,637			20,828			19,187
Operating income		5,443			3,226			16,112			11,183
Interest expense		78			79			242			248
Other income (expense), net		83			49			408			(260	)
Income before taxes		5,448			3,196			16,278			10,675
Provision for income taxes		1,646			317			5,514			1,467
Net income	$	3,802		$	2,879		$	10,764		$	9,208
Earnings per common share
Basic	$	0.60		$	0.46		$	1.71		$	1.50
Diluted	$	0.59		$	0.45		$	1.68		$	1.46
Weighted average common shares outstanding
Basic		6,308			6,206			6,308			6,156
Diluted		6,392			6,379			6,393			6,325
OTHER CONSOLIDATED FINANCIAL DATA		Three Months Ended July 31,						Nine Months Ended July 31,
Operating Data:		2006			2005			2006			2005
		(unaudited)						(unaudited)
Gross margin		35.1	%		33.4	%		35.1	%		33.5	%
SG&A expense as a percentage of sales		20.2	%		22.5	%		19.8	%		21.1	%
Operating income as a percentage of sales		14.9	%		10.9	%		15.3	%		12.3	%
Income before taxes as a percentage of sales		14.9	%		10.8	%		15.5	%		11.8	%
Effective Tax Rate		30.2	%		9.9	%		33.9	%		13.7	%
Depreciation		385			323			1,117			945
Capital expenditures		921			681			2,117			1,756
Balance Sheet Data:		7/31/2006			7/31/2005
Working capital (excluding short term debt)	$	52,747		$	38,687
Days sales outstanding		52			48
Inventory turns		2.3			2.4
Capitalization
Total debt	$	4,042		$	4,365
Shareholders' equity		70,384			51,872
Total	$	74,426		$	56,237

Hurco Companies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per-share data)
		July 31,			October 31,
		2006			2005
		(unaudited)			(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	24,504		$	17,559
Accounts receivable		22,240			20,100
Inventories		43,171			29,530
Deferred tax assets, net		2,325			3,043
Other		3,605			3,586
Total current assets		95,845			73,818
Property and equipment:
Land		761			761
Building		7,234			7,205
Machinery and equipment		13,385			13,170
Leasehold improvements		1,136			1,102
		22,516			22,238
Less accumulated depreciation and amortization		(13,681	)		(13,187	)
		8,835			9,051
Deferred tax assets, net		1,382			1,346
Software development costs, less amortization		4,994			3,752
Investments and other assets		6,956			6,147
	$	118,012		$	94,114
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	28,495		$	17,051
Accrued expenses		14,603			13,584
Current portion of long-term debt		133			126
Total current liabilities		43,231			30,761
Non-current liabilities:
Long-term debt		3,909			4,010
Deferred credits and other obligations		488			399
Total liabilities		47,628			35,170
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; and 6,341,020 and
6,220,220 shares issued, respectively		634			622
Additional paid-in capital		49,731			48,701
Retained earnings		23,765			13,001
Accumulated other comprehensive income		(3,746	)		(3,380	)
Total shareholders' equity		70,384			58,944
	$	118,012		$	94,114