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What changed in HURCO COMPANIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of HURCO COMPANIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+205 added−200 removedSource: 10-K (2025-01-10) vs 10-K (2024-01-05)

Top changes in HURCO COMPANIES INC's 2024 10-K

205 paragraphs added · 200 removed · 163 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

75 edited+17 added−8 removed70 unchanged
Biggest changeWe have not changed our overall strategy to design, manufacture, and sell a comprehensive line of computerized machine tools; rather, we have enhanced this strategy through growth both organically and through acquisitions in an effort to attain long-term stability and profitability. ​ During fiscal year 2023, our sales and service fees were $227.8 million, a decrease of $23.0 million, or 9%, compared to fiscal year 2022 and included an unfavorable currency impact of $2.4 million, or 1%, when translating foreign sales to U.S. dollars for financial reporting purposes.
Biggest changeWe have not changed our overall strategy to design, manufacture, and sell a comprehensive line of computerized machine tools; rather, we have enhanced this strategy through growth both organically and through acquisitions in an effort to attain long-term stability and profitability. ​ We have seen the demand for machine tools fluctuate over the last three years.
These three-axis, massive machines feature belt or geared spindles to provide maximum torque.
These massive three-axis machines feature belt or geared spindles to provide maximum torque.
We also maintain a whistleblower policy and anonymous hotline for the confidential reporting of any suspected policy violations or unethical business conduct on the part of our businesses, employees, officers, directors, or vendors and provide training and education to our global workforce with respect to our Code of Business Conduct and Ethics and anti-corruption and anti-bribery policies.
We also maintain a whistleblower policy and anonymous hotline for the confidential reporting of any suspected policy violations or unethical business conduct on the part of our businesses, employees, officers, directors, or vendors, and we provide training and education to our global workforce with respect to our Code of Business Conduct and Ethics and anti-corruption and anti-bribery policies.
We use this website as a means of disclosing pertinent information about the Company, free of charge, including: ​ ● Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, proxy materials, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file that material with or furnish it to the SEC; ● Press releases on quarterly earnings, product announcements, legal developments, and other material news that we may post from time to time; ● Corporate governance information including our Corporate Governance Principles, Code of Business Conduct and Ethics, information concerning our Board of Directors and its committees, including the charters of the Audit Committee, Compensation Committee, Nominating and Governance Committee and other governance-related policies; and ● Opportunities to sign up for email alerts and RSS feeds to have information provided in real time. ​ The information available on our website is not incorporated by reference in, or a part of, this or any other report we file with, or furnish to, the SEC. ​ ​ 18 ​
We use this website as a means of disclosing pertinent information about the Company, free of charge, including: ​ ● Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, proxy materials, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file that material with or furnish it to the SEC; ● Press releases on quarterly earnings, product announcements, legal developments, and other material news that we may post from time to time; ● Corporate governance information including our Corporate Governance Principles, Code of Business Conduct and Ethics, information concerning our Board of Directors and its committees, including the charters of the Audit Committee, Compensation Committee, Nominating and Governance Committee and other governance-related policies; and ● Opportunities to sign up for email alerts and RSS feeds to have information provided in real time. ​ The information available on our website is not incorporated by reference in, or a part of, this or any other report we file with, or furnish to, the SEC. ​
Major worldwide competitors include DMG Mori Seiki Co., Ltd., Mazak Corporation, Haas Automation, Inc., DN Solutions (formerly Doosan Corporation), Okuma Machinery Works, Ltd., Fryer Machine Systems Inc., ProtoTRAK CNC Machines, Quick Jet Machine, Co., Ltd., Gentiger Machinery Industrial, Co., Ltd., and Yeong Chin Machinery Industries, Co., Ltd. ​ Through our subsidiary LCM, we compete with manufacturers of machine tool components and accessories such as IBAG, Kessler, Peron Speed International, GSA Technology Co., Ltd., and Duplomatic Automation. ​ We strive to compete by developing patentable software and other proprietary features that offer enhanced productivity, technological capabilities, and ease of use.
Major worldwide competitors include DMG Mori Seiki Co., Ltd., Mazak Corporation, Haas Automation, Inc., Smart Machine Tool, DN Solutions (formerly Doosan Corporation), Okuma Machinery Works, Ltd., Fryer Machine Systems Inc., ProtoTRAK CNC Machines, Quick Jet Machine, Co., Ltd., Gentiger Machinery Industrial, Co., Ltd., and Yeong Chin Machinery Industries, Co., Ltd. ​ Through our subsidiary LCM, we compete with manufacturers of machine tool components and accessories such as IBAG, Kessler, Peron Speed International, GSA Technology Co., Ltd., and Duplomatic Automation. ​ We strive to compete by developing patentable software and other proprietary features that offer enhanced productivity, technological capabilities, and ease of use.
Industries served include aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer industries. ​ We also sell our Autobend ® computer control systems to OEMs of new metal fabrication machine tools that integrate them with their own products prior to the sale of those products to their own customers, to retrofitters of used metal fabrication machine tools that integrate them with those machines as part of the retrofitting operation, and to end-users that have an installed base of metal fabrication machine tools, either with or without related computer control systems. ​ Demand ​ We believe demand for our products is driven by advances in industrial technology and the related demand for automated process improvements.
Industries served include aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer industries. ​ We also sell our Autobend ® computer control systems to OEMs of new metal fabrication machine tools that integrate them with their own products prior to the sale of those products to their own customers, to retrofitters of used metal fabrication machine tools that integrate them with those machines as part of the retrofitting operation, and to end-users that have an installed base of metal fabrication machine tools, either with or without related computer control systems. 16 ​ Demand ​ We believe demand for our products is driven by advances in industrial technology and the related demand for automated process improvements.
These products are designed for high-mix, low-volume applications that benefit from a horizontal spindle configuration, but do not require an expensive pallet switching system typically found on competitive horizontal machines. ​ 7 ​ HBMXi Product Line The HBMX product line is beneficial to manufacturers that build custom machinery and parts for a multitude of industries, such as packaging, pharmaceutical, automotive, energy, and medical.
These products are designed for high-mix, low-volume applications that benefit from a horizontal spindle configuration, but do not require an expensive pallet switching system typically found on competitive horizontal machines. ​ HBMXi Product Line The HBMX product line is beneficial to manufacturers that build custom machinery and parts for a multitude of industries, such as packaging, pharmaceutical, automotive, energy, and medical.
We welcome and celebrate our teams’ differences, experiences, and beliefs, and we are investing in a more engaged, diverse, and inclusive workforce. ​ 17 ​ Ethical Business Practices We also foster a strong corporate culture that promotes high standards of ethics and compliance for our businesses, including policies that set forth principles to guide employee, officer, director, and vendor conduct, such as our Code of Business Conduct and Ethics.
We welcome and celebrate our teams’ differences, experiences, and beliefs, and we are investing in a more engaged, diverse, and inclusive workforce. ​ Ethical Business Practices We also foster a strong corporate culture that promotes high standards of ethics and compliance for our businesses, including policies that set forth principles to guide employee, officer, director, and vendor conduct, such as our Code of Business Conduct and Ethics.
They are available in either eight or ten-inch main chuck sizes. ​ Product Development Since Hurco is the technology and innovation brand of our corporate portfolio, we have focused our attention on product enhancements of existing models in an effort to align the Hurco brand with the newest engineering innovations and components available to compete with other premium brands in the marketplace.
They are available in either eight or ten-inch main chuck sizes. ​ 8 ​ Product Development Since Hurco is the technology and innovation brand of our corporate portfolio, we have focused our attention on product enhancements of existing models in an effort to align the Hurco brand with the newest engineering innovations and components available to compete with other premium brands in the marketplace.
We intend to disclose any amendment to, or a waiver from, a provision of our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on our website at www.hurco.com . ​ Backlog ​ For information on orders and backlog, see Item 7.
We intend to disclose any amendment to, or a waiver from, a provision of our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on our website at www.hurco.com . ​ ​ 18 ​ Backlog ​ For information on orders and backlog, see Item 7.
Therefore, we do not have the benefit of relying on the common leading indicators that other industries use for market analysis and forecasting purposes. ​ 4 ​ Products Our core products consist of general-purpose, computerized machine tools for the metal cutting industry, principally, vertical and horizontal machining centers (mills), turning centers (lathes), and toolroom machines.
Therefore, we do not have the benefit of relying on the common leading indicators that other industries use for market analysis and forecasting purposes. ​ Products Our core products consist of general-purpose, computerized machine tools for the metal cutting industry, principally, vertical and horizontal machining centers (mills), turning centers (lathes), and toolroom machines.
We believe our after-sales parts and service business strengthens our customer relationships and provides continuous information concerning the evolving requirements of end-users. ​ Manufacturing ​ Our computerized metal cutting machine tools are manufactured and assembled to our specifications primarily by our wholly-owned subsidiary in Taiwan (Hurco Manufacturing Limited (“HML”)).
We believe our after-sales parts and service business strengthens our customer relationships and provides continuous information concerning the evolving requirements of end-users. ​ 15 ​ Manufacturing ​ Our computerized metal cutting machine tools are manufactured and assembled to our specifications primarily by our wholly-owned subsidiary in Taiwan (Hurco Manufacturing Limited (“HML”)).
Due to leverage of shared resources and cross-utilization of proven engineering designs, we achieve manufacturing cost reductions from economies of scale and manufacturing efficiencies. ​ ​ 5 ​ Hurco CNC Machine Tools ​ Hurco computerized machine tools are equipped with a fully integrated interactive computer control system that features our proprietary WinMax ® software.
Due to leverage of shared resources and cross-utilization of proven engineering designs, we achieve manufacturing cost reductions from economies of scale and manufacturing efficiencies. ​ Hurco CNC Machine Tools ​ Hurco computerized machine tools are equipped with a fully integrated interactive computer control system that features our proprietary WinMax ® software.
Four models are available, two with 40-inch X-axis travels (a three-axis version and a five-axis version), as well as 53-inch and 63-inch X-axis travel models. The 53-inch and 63-inch models are available with #40 or #50 taper. ​ HMi Product Line The HM product line offers customers moderately-priced horizontal machining centers designed for small lot sizes.
Four models are available, two with 40-inch X-axis travels (a three-axis version and a five-axis version), as well as 53-inch and 63-inch X-axis travel models. The 53-inch and 63-inch models are available with #40 or #50 taper. ​ 7 ​ HMi Product Line The HM product line offers customers moderately-priced horizontal machining centers designed for small lot sizes.
It is important to note that data for foreign countries are based on government reports that may lag six to 12 months behind real-time and, therefore, are unreliable for forecasting purposes. ​ Demand for capital equipment can fluctuate significantly during periods of changing economic conditions.
It is important to note that data for foreign countries are based on government reports that may lag six to 12 months behind real-time and, therefore, are unreliable for forecasting purposes. ​ 4 ​ Demand for capital equipment can fluctuate significantly during periods of changing economic conditions.
Manufacturers and suppliers of capital goods, such as our company, are often the first to experience these changes in demand. Additionally, since build to stock and our typical order backlog is approximately 45 days, it is difficult to estimate demand with any reasonable certainty.
Manufacturers and suppliers of capital goods, such as our company, are often the first to experience these changes in demand. Additionally, since we build to stock and our typical order backlog is approximately 45 days, it is difficult to estimate demand with any reasonable certainty.
The main product categories of each brand are outlined below. ​ The Hurco, Milltronics, and Takumi product lines represent a comprehensive product portfolio with more than 150 different CNC machine models. The combined machine tool product lines provide benefits related to the development of product enhancements, technologies, and models.
The main product categories of each brand are outlined below. ​ 5 ​ The Hurco, Milltronics, and Takumi product lines represent a comprehensive product portfolio with more than 150 different CNC machine models. The combined machine tool product lines provide benefits related to the development of product enhancements, technologies, and models.
The sale of simultaneous five-axis contouring software is subject to government export licensing requirements. ​ ​ ​ 13 ​ ProCobots CNC Automation ​ ProCobots provides automation solutions including collaborative robots (cobots), grippers, material handling, and Industry 4.0-capable software and controls.
The sale of simultaneous five-axis contouring software is subject to government export licensing requirements. ​ ProCobots CNC Automation ​ ProCobots provides automation solutions including collaborative robots (cobots), grippers, material handling, and Industry 4.0-capable software and controls.
ProCobots solutions are available for any Hurco, Milltronics, or Takumi machine. ​ LCM Machine Tool Components and Accessories ​ Based in Italy, LCM designs, manufactures, and sells mechanical and electro-mechanical components and accessories for machine tools for a wide variety of machine tool OEMs.
ProCobots solutions are available for any Hurco, Milltronics, or Takumi machine. ​ ​ 14 ​ LCM Machine Tool Components and Accessories ​ Based in Italy, LCM designs, manufactures, and sells mechanical and electro-mechanical components and accessories for machine tools for a wide variety of machine tool OEMs.
The UR1000 has a two-axis head and a 39-inch rotary table integrated into a double-column machine, designed for large and heavy five-axis parts, such as those found in die and mold, aerospace, and energy applications. ​ G Series Designed specifically for the machining of graphite or copper electrodes used in electrical discharge machining (EDM), G Series machines offer the same extremely rigid and thermally stable double-column design of the H Series with high-speed, direct-drive spindles, or built-in HSK spindles, that have up to 20,000 rpm, but are also equipped with a graphite dust extraction system.
The UR1000 has a two-axis head and a 39-inch rotary table integrated into a double-column machine, designed for large and heavy five-axis parts, such as those found in die and mold, aerospace, and energy applications. ​ G Series Designed specifically for the machining of graphite or copper electrodes used in electrical discharge machining (EDM), G Series machines offer the same extremely rigid and thermally stable double-column design of the H Series with high-speed, direct-drive spindles, or built-in HSK spindles, that have up to 20,000rpm, but are also equipped with a graphite dust extraction system.
DCX machines are the largest models offered by Hurco that feature the powerful and flexible WinMax® control. ​ TMi/TM-Mi Product Line The TM/TM-M product line of slant-bed lathes (horizontal turning centers) is designed for entry-level job shops and contract manufacturers seeking efficient processing of small to medium lot sizes.
DCX machines are the largest models offered by Hurco that feature the powerful and flexible WinMax® control. ​ TMi Product Line The TM product line of slant-bed lathes (horizontal turning centers) is designed for entry-level job shops and contract manufacturers seeking efficient processing of small to medium lot sizes.
These models include twin pallets to maximize cutting time along with very fast pallet exchange times and rapid traverse rates. Available in 400, 500, and 630 mm pallet sizes, they can also be fitted with expandable automatic tool changers that hold up to 220 tools.
These models include twin pallets to maximize cutting time along with very fast pallet exchange times and rapid traverse rates. Available in 400-, 500-, and 630-millimeter pallet sizes, they can also be fitted with expandable automatic tool changers that hold up to 220 tools.
The VMX line consists of 14 models in eight sizes with X-axis travels of 24, 26, 30, 42, 50, 60, 64, and 84 inches. ​ HSi Product Line Due to the integral, motorized spindle with a maximum speed of 20,000 rpm, the HS product line is desirable for the die and mold industry because of that industry’s particular interest in the improvement of surface finish quality and the reduction of cycle time.
The VMX line consists of 14 models in eight sizes with X-axis travels of 24, 26, 30, 42, 50, 60, 64, and 84 inches. ​ HSi Product Line Due to the integral, motorized spindle with a maximum speed of 20,000rpm, the HS product line is desirable for the die and mold industry because of that industry’s particular interest in the improvement of surface finish quality and the reduction of cycle time.
The SW model utilizes the swivel head and a traditional machine table that can be then fitted with an A-axis rotary table to machine long five-axis parts. These models are available in either 42 or 60-inch X-axis travels.
The SW model utilizes the swivel head and a traditional machine table that can be then fitted with an A-axis rotary table to machine long five-axis parts. These models are available in 42-, 60-, or 84-inch X-axis travels.
There are 17 models available in a variety of thru hole sizes and in the following six swing-over bed diameters: 17, 19, 23, 27, 36, and 39.7 inches. ​ SL Product Line The SL product line of slant-bed lathes (horizontal turning centers) is designed for entry-level job shops and contract manufacturers seeking efficient processing of small to medium lot sizes.
There are 17 models available in a variety of thru hole sizes and in the following six swing-over bed diameters: 17, 19, 23, 27, 36, and 40 inches. ​ SL Product Line The SL product line of slant-bed lathes (horizontal turning centers) is designed for entry-level job shops and contract manufacturers seeking efficient processing of small to medium lot sizes.
Unlike most competitive models, it is not a retrofit kit but rather designed from the ground up as a CNC. ​ TRQ/TRM Product Line Products with the TRQ or TRM designation are part of the tool room bed mill category, which are machines that are available without an enclosure (also referred to as open bed machines), that provide easy access to the worktable.
Unlike most competitive models, it is not a retrofit kit but rather designed from the ground up as a CNC. ​ TRQ/TRM Product Line Products with the TRQ or TRM designation are part of the toolroom bed mill category, which are machines that are available without an enclosure (also referred to as open bed machines), that provide easy access to the worktable.
The U Series product line consists of six models, four of which offer trunnion table sizes of 10, 16, 24, and 31.5 inches. The UB version is equipped with a B/C swivel head and a 12,000 rpm built-in spindle. Its double-column design provides a spacious X-axis travel of 126 inches.
The U Series product line consists of six models, four of which offer trunnion table sizes of 10, 16, 24, and 31.5 inches. The UB version is equipped with a B/C swivel head and a 12,000rpm built-in spindle. Its double-column design provides a spacious X-axis travel of 126 inches.
The majority of our machine tools employ proprietary, interactive computer control technology that increases productivity through ease of operation via interactive conversational and graphical programming software. All of our machine tools, regardless of brand, deliver high levels of machine performance (speed, accuracy and surface finish quality) that increase productivity.
Most of our machine tools employ proprietary, interactive computer control technology that increases productivity through ease of operation via interactive conversational and graphical programming software. All of our machine tools, regardless of brand, deliver high levels of machine performance (speed, accuracy and surface finish quality) that increase productivity.
The majority of our machine tools are equipped with our fully integrated computer control systems that are powered by our proprietary software, while the remaining machine tools are equipped with industry standard controls.
Most of our machine tools are equipped with our fully integrated computer control systems that are powered by our proprietary software, while the remaining machine tools are equipped with industry standard controls.
Companies using computer-controlled machine tools are better able to: ​ ● maximize the efficiency of their human resources; ● make more advanced and complex parts from a wide range of materials using multiple processes; ● incorporate fast moving changes in technology into their operations to keep their competitive edge; and ● integrate their business into the global supply chain of their customers by supporting small to medium lot sizes for “just in time” initiatives. ​ Our Windows ® based Hurco control facilitates our ability to meet these customer needs.
Companies using computer-controlled machine tools are better able to: ​ ● maximize the efficiency of their human resources; ● make more advanced and complex parts from a wide range of materials using multiple processes; ● incorporate fast moving changes in technology into their operations to keep their competitive edge; ● integrate their business into the global supply chain of their customers by supporting small to medium lot sizes for “just in time” initiatives; and ● connect equipment to intranet and extranets to facilitate collaboration, communication and monitoring. ​ Our Windows ® based Hurco control facilitates our ability to meet these customer needs.
The detail allows the customer to evaluate how the part is programmed to be machined before cutting commences, which eliminates the need to scrap expensive material. ​ Our Swept Surface software option simplifies programming of 3D contours and significantly reduces programming time. ​ The DXF Transfer software option increases operator productivity because it eliminates manual data entry of part features by transferring AutoCAD ® * drawing files directly into our computer control or into our desktop programming software, WinMax ® Desktop. ​ Solid Model Import with 3D DXF Technology automatically uses geometry from a 3D CAD model to easily create conversational programs for 2D and 3D parts or even 3+2 and 5-sided parts. ​ ________________________ * AutoCAD® is a registered trademark of Autodesk, Inc., and/or its subsidiaries/ affiliates in the U.S. and/or other countries. 12 ​ Designed to take advantage of the Internet of Things, UltiMonitor is a web-based productivity, management, and service tool that enables customers to monitor, inspect, and receive notifications about their Hurco machines from any location where they can access the internet.
The detail allows the customer to evaluate how the part is programmed to be machined before cutting commences, which eliminates the need to scrap expensive material. ​ Our Swept Surface software option simplifies programming of 3D contours and significantly reduces programming time. ​ The DXF Transfer software option increases operator productivity because it eliminates manual data entry of part features by transferring AutoCAD ® * drawing files directly into our computer control or into our desktop programming software, WinMax ® Desktop. ​ Solid Model Import with 3D DXF Technology automatically uses geometry from a 3D CAD model to easily create conversational programs for 2D and 3D parts or even 3+2 and 5-sided parts. ​ Designed to take advantage of the Internet of Things, UltiMonitor is a web-based productivity, management, and service tool that enables customers to monitor, inspect, and receive notifications about their Hurco machines from any location where they can access the internet.
Although the majority of our computer control systems and software products are proprietary, they predominantly use industry standard personal computer components. Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products.
Although most of our computer control systems and software products are proprietary, they predominantly use industry standard personal computer components. Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products.
High-speed spindles (20,000 rpm) are offered as an option. ​ SRTi/SWi Product Line The SRT Series of five-axis machines utilizes motor spindles and a swivel head with a C-axis rotary table embedded into and flush with the machine table, making them among the most flexible machines in the industry.
High-speed spindles (20,000rpm or 30,000rpm) are offered as an option. ​ SRTi/SWi Product Line The SRT Series of five-axis machines utilizes motor spindles and a swivel head with a C-axis rotary table embedded into and flush with the machine table, making them among the most flexible machines in the industry.
As a global industrial technology company, a large number of our employees are engineers or trained trade or technical workers focusing on advanced manufacturing, and many of them hold masters’, doctorate, or equivalent advanced degrees.
As a global industrial technology company, a large number of our employees are engineers, trained trade, or technical workers focusing on advanced manufacturing, and many of them hold masters’, doctorate, or equivalent advanced degrees, or are veterans of the armed services.
ProCobots, LLC (“ProCobots”) is our wholly-owned subsidiary that provides practical automation solutions, such as feeders, machine tending systems, and collaborative robots (cobots). In addition, through our wholly-owned subsidiary LCM Precision Technology S.r.l. (“LCM”), we produce high-value machine tool components and accessories.
ProCobots, LLC (“ProCobots”) is our wholly-owned subsidiary that provides practical automation solutions, such as feeders, machine tending systems, and collaborative robots (cobots). In addition, through our wholly-owned subsidiary LCM, we produce high-value machine tool components and accessories.
We also own additional patents covering new technologies that we have acquired or developed, and that we are planning to incorporate into our control systems or products in the future. ​ Human Capital Resources ​ Hurco is committed to attracting and retaining the brightest and best talent. Therefore, investing, developing, and maintaining human capital is critical to our success.
We also own additional patents covering new technologies that we have acquired or developed, and that we are planning to incorporate into our control systems or products in the future. ​ 17 ​ Human Capital Resources ​ Hurco is committed to attracting and retaining the brightest and best talent.
We have sales, application engineering, and service subsidiaries in China, the Czech Republic, France, Germany, India, Italy, the Netherlands, Poland, Singapore, Taiwan, the United Kingdom, and the U.S.
We have sales, application engineering, and service subsidiaries in China, the Czech Republic, France, Germany, India, Italy, the Netherlands, Poland, Singapore, Taiwan, the United Kingdom, and the U.S. We have manufacturing and assembly operations in Taiwan, the U.S., Italy, and China, and distribution facilities in the U.S., the Netherlands, and Taiwan.
Our facility in Indianapolis, Indiana, also conducts final assembly operations for certain Hurco VMX machines, Milltronics IL/XP models, and Milltronics bridge mills for the American market and manufactures certain electro-spindle components for LCM. ​ We have a contract manufacturing agreement for computer control systems with Hurco Automation, Ltd. (“HAL”), a Taiwanese company in which we have a 35% ownership interest.
Our facility in Indianapolis, Indiana, also conducts final assembly operations for certain Hurco VMX machines, Milltronics IL/XP models, Milltronics bridge mills for the American market, certain electro-spindle components for LCM, and automation systems for ProCobots. ​ We have a contract manufacturing agreement for computer control systems with Hurco Automation, Ltd.
There is one TM model in four sizes, measured by chuck size: six, eight, ten, and 12 inches. We added motorized tooling on the lathe turret to further enhance the capability of the TM turning centers and designated it as the TM-M product line.
The 2-axis turning TM models are in four sizes, measured by chuck size: six, eight, ten, and 12 inches. We added motorized tooling on the lathe turret to further enhance the capability of the TM turning centers and designated it as the TM-M product line.
The G Series product line consists of three models with X-axis travels of 22, 30, and 40 inches. ​ BC Series BC Series machines are double column, three-axis machining centers designed for heavy cutting and applications that require high power and torque, such as die and mold.
The G Series product line consists of three models with X-axis travels of 22, 30, and 40 inches. ​ BC Series BC Series machines are double column, three-axis machining centers designed for heavy cutting and applications that require high power and torque, such as die and mold. These models include a heavy cutting, 6,000rpm geared-head spindle for maximum cutting power.
Typical applications for these machines include general machining, job shops, prototype, or maintenance and repair. Available with quill-head or rigid-head designs, there are six models in four sizes with X-axis travels of 30, 40, 60 and 78 inches.
Typical applications for these machines include general machining, job shops, prototype, or maintenance and repair. Available with quill-head or rigid-head designs, there are six models in four sizes with X-axis travels of 30, 40, 60 and 78 inches. The 60-inch model is also available with a high-torque option.
This technology differentiates us in the marketplace and is incorporated into our control. ​ Our offering of Hurco machining centers, currently equipped with either a dual touch-screen console or a single touch-screen console, consists of the following product lines: ​ VMi Product Line The VM product line consists of moderately priced vertical machining centers for the entry-level market, while still offering the advantage of our advanced control and motion systems.
This technology differentiates us in the marketplace and is incorporated into our control. ​ Our offering of Hurco machining centers, currently equipped with either a dual touch-screen console or a single touch-screen console, consists of the following product lines: ​ ​ ​ ​ ___________________ † Windows ® is a registered trademark of Microsoft Corporation in the United States and other countries. 6 ​ VMi Product Line The VM product line consists of moderately priced vertical machining centers for the entry-level market, and offer the advantage of our advanced control and motion systems.
These efforts collectively enhance software performance and efficiency, providing a more dependable and responsive experience while using WinMax®. ​ 8 ​ Milltronics CNC Machine Tools ​ Our Milltronics line of CNC machine tools is designed for excellent value with more standard features for the price versus competitors.
These efforts collectively enhance software performance and efficiency, providing more dependable and responsive experience while using WinMax®. ​ Milltronics CNC Machine Tools ​ Our Milltronics line of CNC machine tools is designed for excellent value with more standard features for the price versus competitors. We manufacture and sell these machine tools with a fully integrated interactive computer control system.
The following table sets forth the contribution of each of our product groups and services to our total revenues during each of the past three fiscal years (in thousands): ​ Net Sales and Service Fees by Product Category ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended October 31, ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ Computerized Machine Tools $ 188,335 83 % $ 211,804 85 % $ 198,602 85 % Computer Control Systems and Software † ​ 2,805 1 % 2,634 1 % 2,528 1 % Service Parts ​ 28,439 12 % 28,219 11 % 26,425 11 % Service Fees ​ 8,228 4 % 8,157 3 % 7,640 3 % Total ​ $ 227,807 100 % $ 250,814 100 % $ 235,195 100 % † Amounts shown do not include computer control systems and software sold as an integrated component of computerized machine systems.
The following table sets forth the contribution of each of our product groups and services to our total revenues during each of the past three fiscal years (in thousands): ​ Net Sales and Service Fees by Product Category ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended October 31, ​ ​ ​ 2024 ​ 2023 ​ 2022 ​ Computerized Machine Tools $ 147,561 79 % $ 188,335 83 % $ 211,804 85 % Computer Control Systems and Software † ​ 2,447 1 % 2,805 1 % 2,634 1 % Service Parts ​ 27,628 15 % 28,439 12 % 28,219 11 % Service Fees ​ 8,948 5 % 8,228 4 % 8,157 3 % Total ​ $ 186,584 100 % $ 227,807 100 % $ 250,814 100 % † Amounts shown do not include computer control systems and software sold as an integrated component of computerized machine tools.
These turning centers with live tooling allow our customers to complete a number of secondary milling, drilling, and tapping operations while the part is still held in the chuck after the turning operations are complete, which provides significant productivity gains.
These turning centers with live tooling allow our customers to complete a number of secondary milling, drilling, and tapping operations while the part is still held in the chuck after the turning operations are complete, which provides significant productivity gains. The TM-M product line consists of three models: TM8Mi, TM10Mi, and TM12Mi.
Customers can choose models with X-axis travels of 25, 30, 40, or 50 inches. There is also a model with extended spindle nose-to-table dimensions for large fourth-axis rotary applications. ​ VM Inline Performance (IL) Product Line The VM-IL product line consists of moderately-priced performance vertical machining centers for high-speed applications, such as die and mold, aerospace, and medical machining.
There is also a model with extended spindle nose-to-table dimensions for large fourth-axis rotary applications. ​ 9 ​ VM Inline Performance (IL) Product Line The VM-IL product line consists of moderately-priced performance vertical machining centers for high-speed applications, such as die and mold, aerospace, and medical machining.
Additionally, boring mills are also used to repair and/or rebuild large components. The HBMX boring mill product line consists of four models with X-axis travels of 55, 79, 94, and 120 inches. ​ DCXi Product Line The double column DCX series includes six models in four sizes.
Additionally, boring mills are also used to repair and/or rebuild large components. The HBMX boring mill product line consists of four models with X-axis travels of 55, 79, 94, and 120 inches. ​ DCXi Product Line The double column DCX series offers four different sizes, based on two, three, and four-meter X-axis travels and Y-axis travel.
BR machines have inline spindles and are available in six models with up to 200 inches in X-axis travel by 80 inches in Y-axis travel. ​ 9 ​ ML Product Line The ML product line consists of combination lathes that the customer can configure for either tool room or production applications with the option to add live tooling.
BR machines have inline spindles and are available with 150 inches in X-axis travel and 60 inches in Y-axis travel. ​ ML Product Line The ML product line consists of combination lathes that the customer can configure for either toolroom or production applications with the option to add live tooling.
We also believe that our competitiveness is aided by our reputation for reliability and quality, our strong international sales and distribution organization, and our extensive customer service organization. ​ 16 ​ Intellectual Property ​ We consider the majority of our products to be proprietary.
We offer our products in a range of prices and capabilities to target a broad potential market. We also believe that our competitiveness is aided by our reputation for reliability and quality, our strong international sales and distribution organization, and our extensive customer service organization. ​ Intellectual Property ​ We consider the majority of our products to be proprietary.
Our selling divisions in the United States have responsibility for the Americas, which includes Canada, Mexico, Central America, South America, and the U.S. ​ 15 ​ Approximately 87% of the worldwide demand for computerized machine tools and computer control systems is outside of the U.S.
Our selling divisions in the United States have responsibility for the Americas, which includes Canada, Mexico, Central America, South America, and the U.S. ​ Approximately 84% of the worldwide demand for computerized machine tools and computer control systems is outside of the U.S. In fiscal year 2024, approximately 61% of our revenues were derived from customers outside of the Americas.
We have made five acquisitions since 2013, and the products we have added through these acquisitions have given us more advanced products with significant improvements in our machine tool accuracy and precision, allow us to seek higher productivity in complex manufacturing environments, provide automation for machine tending solutions, and minimize dependencies associated with volatilities from economic and geographic cyclicality.
We have made five acquisitions since 2013, which: (1) has given us more advanced products with significant improvements in our machine tool accuracy and precision, (2) allows us to seek higher productivity in complex manufacturing environments, (3) provides automation for machine tending solutions, and (4) minimizes dependencies associated with volatilities from economic and geographic cyclicality.
These non-Hurco branded products are sold by our wholly-owned distributors and are comprised primarily of other general-purpose vertical machining centers and lathes, laser cutting machines, waterjet cutting machines, CNC grinders, compact horizontal machining centers, metal cutting saws, and CNC Swiss lathes. ​ ​ ​ ​ ​ 14 ​ Parts and Service ​ Our service organization provides installation, warranty, operator training, and customer support for our products on a worldwide basis.
These non-Hurco branded products are sold by our wholly-owned distributors and are comprised primarily of other general-purpose vertical machining centers and lathes, laser cutting machines, waterjet cutting machines, CNC grinders, compact horizontal machining centers, metal cutting saws, and CNC Swiss lathes.
These compact machines are available with chuck sizes of six, eight, and ten inches and support an optional conversational high-efficiency cutting cycle on the control called Bi-Directional Turning, a cutting strategy typically available only with high-end CAD/CAM systems. ​ Product Development In fiscal year 2023, Milltronics introduced the new Inspire CNC control, leveraging patented Hurco intellectual property to enhance cutting precision and surface finish on Milltronics machine tools.
These compact machines are available with chuck sizes of six, eight, and ten inches and support an optional conversational high-efficiency cutting cycle on the control called Bi-Directional Turning, a cutting strategy typically available only with high-end CAD/CAM systems. ​ Product Development In fiscal year 2024, Milltronics introduced the new INSPIRE+ control console, with a modern look, increased display size, and ergonomic input.
The H Series product line consists of 11 models with X-axis travels of 24, 40, 49, 63, 86, 126, 157, and 197 inches, with select models available with extended Y-axis travel and/or high-speed spindles.
These three-axis models feature high-speed, direct-drive spindles, or built-in HSK spindles, with up to 20,000rpm, in addition to spindle speed options of 24,000rpm and 36,000rpm. The H Series product line consists of 11 models with X-axis travels of 24, 40, 49, 63, 86, 126, 157, and 197 inches, with select models available with extended Y-axis travel and/or high-speed spindles.
The 60-inch model is also available with a high-torque option. ​ VM General Purpose (GP) Product Line The VM-GP product line consists of attractively-priced vertical machining centers designed for job shops, prototype, research and development, and other general machining applications. These belt-driven models have 40-taper spindles and are available in four different sizes.
Most toolroom models feature box way construction for rigidity and are designed to absorb vibrations. ​ VM General Purpose (GP) Product Line The VM-GP product line consists of attractively-priced vertical machining centers designed for job shops, prototype, research and development, and other general machining applications. These belt-driven models have 40-taper spindles and are available in four different sizes.
This “on-machine” technique improves the throughput of the measurement process when compared to traditional “off-machine” approaches. ​ The Tool and Material Library option stores the tool and material information with the machine instead of storing it with each individual part program.
This “on-machine” technique improves the throughput of the measurement process when compared to traditional “off-machine” approaches. ​ ________________________ * AutoCAD® is a registered trademark of Autodesk, Inc., and/or its subsidiaries/ affiliates in the U.S. and/or other countries. 13 ​ The Tool and Material Library option stores the tool and material information with the machine instead of storing it with each individual part program.
These cantilever machines are available with either a 20-inch or 23.6-inch pallet, moderately-priced models, or as a high speed, high performance model, with a torque motor-driven 23.6-inch-diameter rotary table. ​ BXi Product Line The BX product line is for customers that require higher accuracy parts, as they are built with an extremely rigid double column design that offers superior vibration dampening and excellent thermal characteristics.
High speed motor spindle (20,000rpm) is offered as option for high performance models. ​ BXi Product Line The BX product line is for customers that require higher accuracy parts, as they are built with an extremely rigid double column design that offers superior vibration dampening and excellent thermal characteristics.
The combination of microprocessor technology and patented interactive, conversational programming software in our proprietary computer control systems enables operators on the production floor to create a program quickly and easily to machine a particular part from a blueprint or computer aided design file, and immediately begin machining that part. ​ Our executive offices and principal design and engineering operations are headquartered in Indianapolis, Indiana, U.S.
The combination of microprocessor technology and patented interactive, conversational programming software in our proprietary computer control systems enables operators on the production floor to create a program quickly and easily to machine a particular part from a blueprint or computer aided design file, and immediately begin machining that part. ​ Our strategy is to design, manufacture, and sell a comprehensive line of computerized machine tools that help customers in the worldwide metal cutting market increase productivity and profitability.
These machines are specifically targeted for die and mold and aerospace customers. ​ U Series Designed with trunnion tables or swivel heads, these five-axis simultaneous machining centers provide versatility, as well as reduce setup time and process time. Most models are offered with a double-column structure for superior stability and performance.
Heidenhain® is a registered trademark of HEIDENHAIN CORPORATION, a wholly-owned subsidiary of the German company DR. JOHANNES HEIDENHAIN GmbH. 11 ​ U Series Designed with trunnion tables or swivel heads, these five-axis simultaneous machining centers provide versatility, as well as reduced setup time and process time. Most models are offered with a double-column structure for superior stability and performance.
In fiscal year 2023, approximately 61% of our revenues were derived from customers outside of the Americas. No single end-user or distributor of our products accounted for more than 5% of our total sales and service fees.
No single end-user or distributor of our products accounted for more than 5% of our total sales and service fees.
Featuring heavier castings, faster motion, and inline spindles, these 40-taper machines are available in four sizes. Models include X-axis travels of 30, 42, 50, or 60 inches. ​ VM Extra Power (XP) Product Line The VM-XP product line consists of moderately-priced, vertical machining centers for more demanding metal removal applications, such as castings or forgings.
Featuring heavier castings, faster motion, and inline spindles, these 40-taper machines are available in four sizes. Models include X-axis travels of 30, 42, 50, or 60 inches.
Additionally, a new 60” X-travel VC1500 was introduced to the marketplace. ​ Other Computer Control Systems and Software Products ​ The following machine tool computer control systems and software products are sold directly to end-users and/or to other original equipment manufacturers (“OEMs”). ​ Autobend ® Our Autobend ® computer control systems are applied to metal bending press brake machines that form parts from sheet metal and steel plate.
Finally, Takumi developed three intelligent thermal compensation levels, iSPIN-TC, which, depending on the application, greatly reduces spindle thermal deviation. ​ Other Computer Control Systems and Software Products ​ The following machine tool computer control systems and software products are sold directly to end-users and/or to other original equipment manufacturers (“OEMs”). ​ 12 ​ Autobend ® Our Autobend ® computer control systems are applied to metal bending press brake machines that form parts from sheet metal and steel plate.
The SL Series includes four models: the SL200 and SL250, both available with ten-inch chucks; the SL300, which has a 12-inch chuck; and the SL450, which has an 18-inch chuck. ​ 11 ​ Product Development In fiscal year 2023, Takumi introduced a #50 taper version of the HMX500 horizontal machining center, for applications that require heavy cutting and more power.
The SL Series includes four models: the SL200 and SL250, both available with ten-inch chucks; the SL300, which has a 12-inch chuck; and the SL450, which has an 18-inch chuck. ​ Product Development In fiscal year 2024, Takumi introduced a new UVC600 five-axis machine with a 600-millimeter cantilever table.
The VC machines are available in four sizes with X-axis travels of 34, 42, 50, and 60 inches. An extended Y-axis travel version of the 42-inch model is offered for mold shops making square mold bases. ________________________ * Fanuc® is a registered trademark of G E Fanuc Automation Americas, Inc. Siemens® is a registered trademark of Siemens AG.
The VC machines are available in five sizes with X-axis travels of 34, 42, 47, 50, and 60 inches. An extended Y-axis travel version of the 42-inch model is offered for mold shops making square mold bases. ​ V Series The V Series vertical machining centers are heavy-duty, box-way machines built for tough applications such as roughing cast iron.
The design premise of the machining center with a large work cube and a small footprint optimizes the use of available floor space.
The design premise of the machining center with a large work cube and a small footprint optimizes the use of available floor space. The VM line consists of six models in four sizes with X-axis (horizontal) travels of 26 (three models), 30, 40, and 50 inches.
LCM’s direct drive spindle, swivel head, and rotary torque table are used in the Hurco SRT line of five-axis machining centers to achieve simultaneous five-axis machining. ​ CNC Rotary Tables LCM has several lines of CNC rotary tables for both horizontal and vertical-horizontal positioning. Customers can choose rotary tables with either hydraulic or pneumatic clamping systems.
LCM’s direct drive spindle, swivel head, and rotary torque table are used in the Hurco SRT line of five-axis machining centers to achieve simultaneous five-axis machining. ​ CNC Rotary Tables LCM has introduced a new generation of trunnion tables that are common across various machine models.
We routinely expand our product offerings to meet customer needs, which has led us to design and manufacture more complex machining centers with advanced capabilities. We bring a disciplined approach to strategically enter new geographic markets, as appropriate. ​ 3 ​ Our strategic plans focus on market expansion to reach more customers with more products on a global basis.
We bring a disciplined approach to strategically enter new geographic markets, as appropriate. ​ 3 ​ Our strategy also focuses on market expansion to reach more customers with more products on a global basis.
As of October 31, 2023, Hurco had approximately 716 full-time employees, of which approximately 28% were in the Americas and 72% were in other global regions.
Therefore, investing, developing, and maintaining human capital is critical to our success. As of October 31, 2024, Hurco had approximately 688 full-time employees, of which approximately 30% were in the Americas and 70% were in other global regions.
Based on two, three, and four-meter X-axis travels, these machining centers are designed to facilitate production of large parts and molds often required by the aerospace, energy, and custom machinery industries. The 3-meter model is available as a five-axis machine equipped with an articulating head.
These machining centers are designed to facilitate production of large parts and molds often required by the aerospace, energy, and custom machinery industries. The 2- and 3-meter models offer two different spindle sizes to fit different applications.
Examples of product enhancements completed in fiscal year 2023 include new HSK spindles for our entry level high-speed VM10HSi 3-axis and VM10UHSi 5-axis machines. We also made background enhancements to our WinMax® software, focusing on bolstering reliability and optimizing resource management. These improvements are designed to ensure a smoother user experience without interrupting workflow.
We introduced the TM8MY and TM10MY multi-axis live tooling lathes models. Additionally, we made background enhancements to our WinMax® software, focusing on bolstering reliability and optimizing resource management. These improvements are designed to ensure smoother user experience without interrupting workflow.
The VM line consists of six models in four sizes with X-axis (horizontal) travels of 26 (three models), 30, 40, and 50 inches. ​ ​ ​ ​ ___________________ † Windows ® is a registered trademark of Microsoft Corporation in the United States and other countries. 6 ​ VMXi Product Line The VMX product line is our flagship series of machining centers and consists of higher performing vertical machining centers aimed at manufacturers that require faster speeds and greater part accuracy.
Most models are equipped with a belted spindle up to 12,000rpm, one model is equipped with an inline (direct drive) spindle, and one model includes motor spindle speeds up to 30,000rpm. ​ VMXi Product Line The VMX product line is our flagship series of machining centers and consists of higher performing vertical machining centers aimed at manufacturers that require faster speeds and greater part accuracy.
Sales decreased year-over-year due primarily to a decreased volume of shipments of higher-performance Hurco, Takumi, and Milltronics machines across Europe, Asia Pacific, and the Americas.
Sales decreased year-over-year due primarily to a decreased volume of shipments of higher-performance Hurco, Takumi, and Milltronics machines in the Americas, Germany, the United Kingdom, Italy and China, as well as decreased shipments of electro-mechanical components and accessories manufactured by our wholly-owned subsidiary, LCM Precision Technology S.r.l. (“LCM”).
For fiscal year 2023, we reported net income of $4.4 million, or $0.66 per diluted share, compared to net income of $8.2 million, or $1.23 per diluted share, for fiscal year 2022. ​ Industry Machine tool products are considered capital goods, which makes them part of an industry that has historically been highly cyclical.
For fiscal year 2024, we reported a net loss of $16.6 million, or $(2.56) per diluted share, compared to net income of $4.4 million, or $0.66 per diluted share, for fiscal year 2023.
The TM-M product line consists of three models: TM8Mi, TM10Mi, and TM12Mi. ​ TMXi Product Line The TMX product line consists of high-performance turning centers. There are six models in two sizes. The TMX-MY models are equipped with an additional axis and motorized live tooling while the TMX-MYS models also have an additional spindle.
The TMX models have higher spindles and a more rigid frame, the TMX-MY models are equipped with an additional axis and motorized live tooling, and the TMX-MYS models also have an additional spindle.
These heavy-duty, 50-taper models are designed for applications that require more power and torque.
Many of these models have extended Y-axis travels. ​ VM Extra Power (XP) Product Line The VM-XP product line consists of moderately-priced, vertical machining centers for more demanding metal removal applications, such as castings or forgings. These heavy-duty, 50-taper models are designed for applications that require more power and torque.
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We have manufacturing and assembly operations in Taiwan, the U.S., Italy, and China, and distribution facilities in the U.S., the Netherlands, and Taiwan. ​ Our strategy is to design, manufacture, and sell a comprehensive line of computerized machine tools that help customers in the worldwide metal cutting market increase productivity and profitability.
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We routinely expand our product offerings to meet customer needs, which has led us to design and manufacture more complex machining centers with advanced capabilities. ​ Our executive offices and principal design and engineering operations are headquartered in Indianapolis, Indiana, U.S.
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Industry association data for the U.S. machine tool market is available, and that market accounts for approximately 13% of worldwide consumption.
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Our industry has continued to face global headwinds due to changing economic conditions.
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We manufacture and sell these machine tools with a fully integrated interactive computer control system called the Milltronics 9000 Series DGI CNC.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf a resurgence of COVID-19 or other severe global health crisis occurs, it could disrupt our ability to deliver and/or install machines, our procurement of supplies for our operations, and our customers’ purchasing behavior or decisions, including reduced demand for our products that could continue for an extended period of time. ​ Any or all of the foregoing in jurisdictions where we or our customers, suppliers, or business partners are located have had and could in the future have a material adverse effect on our business, results of operations, cash flows, and financial condition.
Biggest changeAny or all of the foregoing in jurisdictions where we or our customers, suppliers, or business partners are located have had and could in the future have a material adverse effect on our business, results of operations, cash flows, and financial condition.
Acquisitions involve numerous risks, including the following: • difficulties integrating the operations, technologies, products, and personnel of an acquired company or being subjected to liability for the target’s pre-acquisition activities or operations as a successor in interest; • diversion of management’s attention from normal daily operations of the business; • potential difficulties completing projects associated with in-process research and development; • difficulties entering markets in which we have no or limited prior experience, especially when competitors in such markets have stronger market positions; • initial dependence on unfamiliar supply chains or relatively small supply partners; • insufficient revenues to offset increased expenses associated with acquisitions; and 23 ​ • the potential loss of key employees of the acquired companies. ​ Acquisitions may also cause us to: • issue common stock that would dilute our current shareholders’ percentage ownership; • borrow and subject us to increasing interest rates; • assume or otherwise be subject to liabilities of an acquired company; • record goodwill and non-amortizable intangible assets that will be subject to impairment testing on a regular basis and potential periodic impairment charges; • incur amortization expenses related to certain intangible assets; • incur large acquisition and integration costs, immediate write-offs, and restructuring and other related expenses; and • become subject to litigation. ​ Mergers and acquisitions are inherently risky.
Acquisitions involve numerous risks, including the following: ​ • difficulties integrating the operations, technologies, products, and personnel of an acquired company or being subjected to liability for the target’s pre-acquisition activities or operations as a successor in interest; • diversion of management’s attention from normal daily operations of the business; • potential difficulties completing projects associated with in-process research and development; • difficulties entering markets in which we have no or limited prior experience, especially when competitors in such markets have stronger market positions; • initial dependence on unfamiliar supply chains or relatively small supply partners; • insufficient revenues to offset increased expenses associated with acquisitions; and • the potential loss of key employees of the acquired companies. ​ Acquisitions may also cause us to: ​ • issue common stock that would dilute our current shareholders’ percentage ownership; • borrow and subject us to increasing interest rates; • assume or otherwise be subject to liabilities of an acquired company; • record goodwill and non-amortizable intangible assets that will be subject to impairment testing on a regular basis and potential periodic impairment charges; • incur amortization expenses related to certain intangible assets; • incur large acquisition and integration costs, immediate write-offs, and restructuring and other related expenses; and • become subject to litigation. ​ Mergers and acquisitions are inherently risky.
Our international operations are subject to a number of risks, including: ​ • trade barriers; • regional economic uncertainty and nationalistic trade strategies; • differing labor regulation; • governmental expropriation; • domestic and foreign customs and tariffs; • current and changing regulatory environments affecting the importation and exportation of products and raw materials; • difficulty in obtaining distribution support; 19 ​ • difficulty in staffing and managing widespread operations; • differences in the availability and terms of financing; • political instability and unrest; • negative or unforeseen consequences resulting from the introduction, termination, modification, or renegotiation of international trade agreements or treaties or the imposition of countervailing measures or anti-dumping duties or similar tariffs; • foreign exchange controls that make it difficult to repatriate earnings and cash; • changes in tax regulations and rates in foreign countries; and • changes in the geopolitical environment, wars, conflicts, or trade barriers or blockades in the European Union and Asia, which may adversely affect business activity and economic conditions globally and could continue to contribute to instability in global financial and foreign exchange markets, as well as disrupt the free movement of goods, services, and people between countries. ​ Quotas, tariffs, taxes, or other trade barriers could require us to attempt to change manufacturing sources, reduce prices, increase spending on marketing or product development, withdraw from or not enter certain markets, or otherwise take actions that could be adverse to us and/or that we might not be able to accomplish in a timely manner or at all.
Our international operations are subject to a number of risks, including: ​ • trade barriers; • regional economic uncertainty and nationalistic trade strategies; • differing labor regulation; • governmental expropriation; • domestic and foreign customs and tariffs; • current and changing regulatory environments affecting the importation and exportation of products and raw materials; • difficulty in obtaining distribution support; • difficulty in staffing and managing widespread operations; • differences in the availability and terms of financing; • political instability and unrest; • negative or unforeseen consequences resulting from the introduction, termination, modification, or renegotiation of international trade agreements or treaties or the imposition of countervailing measures or anti-dumping duties or similar tariffs; • foreign exchange controls that make it difficult to repatriate earnings and cash; • changes in tax regulations and rates in foreign countries; and • changes in the geopolitical environment, wars, conflicts, or trade barriers or blockades in the European Union and Asia, which may adversely affect business activity and economic conditions globally and could continue to contribute to instability in global financial and foreign exchange markets, as well as disrupt the free movement of goods, services, and people between countries. ​ 20 ​ Quotas, tariffs, taxes, or other trade barriers could require us to attempt to change manufacturing sources, reduce prices, increase spending on marketing or product development, withdraw from or not enter certain markets, or otherwise take actions that could be adverse to us and/or that we might not be able to accomplish in a timely manner or at all.
In such a case, we may be forced to relocate and/or shift production facilities to other geographic territories to mitigate the risks associated with consolidating our manufacturing operations in such territories, which would likely result in disruptions to our production plans and/or our ability to meet forecasted customer demand in the near and medium term, all of which could have a material adverse effect on our business, financial results, future operations, and/or financial position. ​ Fluctuations in the exchange rates between the U.S. dollar and any of several foreign currencies can increase our costs and decrease our revenues.
In such a case, we may be forced to relocate and/or shift production facilities to other geographic territories to mitigate the risks associated with consolidating our manufacturing operations in such territories, which would likely result in disruptions to our production plans and/or our ability to meet forecasted customer demand in the near and medium term, all of which could have a material adverse effect on our business, financial results, future operations, and/or financial position. ​ 21 ​ Fluctuations in the exchange rates between the U.S. dollar and any of several foreign currencies can increase our costs and decrease our revenues.
Failure to comply with U.S. and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity, and could negatively affect our operating results and business. ​ If our network and system security measures are breached and unauthorized access is obtained to our data, to our employees’, customers’, or vendors’ data, or to our critical information technology systems, we may incur legal and financial exposure and liabilities.
Failure to comply with U.S. and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity, and could negatively affect our operating results and business. ​ 25 ​ If our network and system security measures are breached and unauthorized access is obtained to our data, to our employees’, customers’, or vendors’ data, or to our critical information technology systems, we may incur legal and financial exposure and liabilities.
A change in a statutory tax rate may result in the revaluation of our deferred tax assets and liabilities related to the relevant jurisdiction in which the new tax law is enacted, potentially resulting in a material expense or benefit recorded in our Consolidated Statements of Income for that period. ​ Changes in the tax laws of the jurisdictions where we do business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in our tax expense.
A change in a statutory tax rate may result in the revaluation of our deferred tax assets and liabilities related to the relevant jurisdiction in which the new tax law is enacted, potentially resulting in a material expense or benefit recorded in our Consolidated Statements of Income for that period. ​ 27 ​ Changes in the tax laws of the jurisdictions where we do business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in our tax expense.
As a result of this cyclicality, we have experienced significant fluctuations in our sales, which, in periods of reduced demand, have adversely affected our results of operations and financial condition, which could re-occur in the future. ​ Material adverse developments in global economic conditions, or the occurrence of certain other world events, could negatively affect demand for our products and harm our business.
As a result of this cyclicality, we have experienced significant fluctuations in our sales, which, in periods of reduced demand, have adversely affected our results of operations and financial condition, which could re-occur in the future. ​ 19 ​ Material adverse developments in global economic conditions, or the occurrence of certain other world events, could negatively affect demand for our products and harm our business.
If we are unable to secure access and/or rights to any such inputs, components, code, or similar items, our ability to continue to produce our products without interruption could be challenged, which could materially and adversely impact our business, financial condition, results of operation, and demand for our products. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22 ​ Disruptions in our manufacturing operations or the supply of materials and components could adversely affect our business, results of operations and financial condition.
If we are unable to secure access and/or rights to any such inputs, components, code, or similar items, our ability to continue to produce our products without interruption could be challenged, which could materially and adversely impact our business, financial condition, results of operation, and demand for our products. ​ Disruptions in our manufacturing operations or the supply of materials and components could adversely affect our business, results of operations and financial condition.
Our financial resources are limited compared to those of many of our competitors, making it challenging to remain competitive. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 21 ​ Operational and Strategic Risks ​ Our competitive position and prospects for growth may be diminished if we are unable to develop and introduce new and enhanced products on a timely basis that are accepted in the market.
Our financial resources are limited compared to those of many of our competitors, making it challenging to remain competitive. ​ Operational and Strategic Risks ​ Our competitive position and prospects for growth may be diminished if we are unable to develop and introduce new and enhanced products on a timely basis that are accepted in the market.
For additional information, please see the risk factor entitled, “Due to future changes in technology, changes in market demand, or changes in market expectations, portions of our inventory may become obsolete or excessive.” ​ Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business .
For additional information, please see the risk factor entitled, “Due to future changes in technology, changes in market demand, or changes in market expectations, portions of our inventory may become obsolete or excessive.” ​ 24 ​ Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business .
Our inability to protect our proprietary information and enforce our intellectual property rights through infringement proceedings could have a material adverse effect on our business, financial condition, and results of operations. ​ We are also subject to claims that we may be infringing certain patent or other intellectual property rights of third parties.
Our inability to protect our proprietary information and enforce our intellectual property rights through infringement proceedings could have a material adverse effect on our business, financial condition, and results of operations. ​ ​ ​ 22 ​ We are also subject to claims that we may be infringing certain patent or other intellectual property rights of third parties.
We will continue to monitor and assess the impact of these state laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation, and carry significant potential liability for our business. ​ 24 ​ Outside of the U.S., data protection laws, including the U.K. and E.U.
We will continue to monitor and assess the impact of these state laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation, and carry significant potential liability for our business. ​ Outside of the U.S., data protection laws, including the U.K. and E.U.
In addition, the cost and operational consequences of implementing further data protection or data restoration measures could be significant. ​ 25 ​ Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have disrupted, and could continue to disrupt, our operations and materially and adversely affect our business, financial condition, and results of operations.
In addition, the cost and operational consequences of implementing further data protection or data restoration measures could be significant. ​ Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have disrupted, and could continue to disrupt, our operations and materially and adversely affect our business, financial condition, and results of operations.
We could be required to record a significant charge to earnings in our financial statements for the period in which any impairment of these assets is determined, which would adversely affect our results of operations for that period. ​ ​ ​ 26 ​ We may experience negative or unforeseen tax consequences.
We could be required to record a significant charge to earnings in our financial statements for the period in which any impairment of these assets is determined, which would adversely affect our results of operations for that period. ​ We may experience negative or unforeseen tax consequences.
The loss of senior management or other key personnel may adversely affect our operating results as we incur costs to replace the departed personnel and potentially lose opportunities in the transition of important job functions. ​ Acquisitions could disrupt our operations and harm our operating results.
The loss of senior management or other key personnel may adversely affect our operating results as we incur costs to replace the departed personnel and potentially lose opportunities in the transition of important job functions. ​ 23 ​ Acquisitions could disrupt our operations and harm our operating results.
We actively seek additional opportunities to expand our product offerings or the markets we serve by acquiring other companies, product lines, technologies, and personnel.
We actively seek opportunities to expand our product offerings or the markets we serve by acquiring other companies, product lines, technologies, and personnel.
Our sales to customers located outside of the Americas, which generated approximately 61% of our revenues in fiscal year 2023, are invoiced and received in several foreign currencies, primarily the Euro, Pound Sterling and Chinese Yuan.
Our sales to customers located outside of the Americas, which generated approximately 61% of our revenues in fiscal year 2024, are invoiced and received in several foreign currencies, primarily the Euro, Pound Sterling and Chinese Yuan.
During fiscal year 2023, approximately 61% of our revenues were derived from sales to customers located outside of the Americas. In addition, our main manufacturing facilities are located outside of the U.S.
During fiscal year 2024, approximately 61% of our revenues were derived from sales to customers located outside of the Americas. In addition, our main manufacturing facilities are located outside of the U.S.
Because of unforeseen future changes in technology, market demand or competition, we might have to write off unusable inventory, which would adversely affect our results of operations. ​ Assets have become, and may become further, impaired, requiring us to record a significant charge to earnings.
Because of changes in technology, market demand or market expectations, we might have to write off unusable inventory, which would adversely affect our results of operations. ​ Assets have become, and may become further, impaired, requiring us to record a significant charge to earnings.
Various factors contribute to the uncertain economic environment, including geopolitical tensions, military conflicts, the level and volatility of interest rates, the level of inflation, the continuing effects of the COVID-19 pandemic, an actual recession or fears of a recession, trade policies and tariffs, and political and governmental instability. ​ Economic uncertainty has and could continue to negatively affect the businesses and purchasing decisions of companies in the industries we serve.
Various factors contribute to the uncertain economic environment, including geopolitical tensions, military conflicts, the level and volatility of interest rates, the level of inflation, the continuing effects of regional or global health pandemics, an actual recession or fears of a recession, trade policies and tariffs, and political and governmental instability. ​ Economic uncertainty has and could continue to negatively affect the businesses and purchasing decisions of companies in the industries we serve.
In addition, fluctuations in demand and other implications associated with the COVID-19 pandemic have resulted in, and could continue resulting in, certain supply chain constraints and challenges. ​ Financial, Credit, and Liquidity Risks ​ Due to future changes in technology, changes in market demand, or changes in market expectations, portions of our inventory may become obsolete or excessive.
In addition, fluctuations in demand and other implications associated with a global health crisis, such as COVID-19, have resulted in, and could continue resulting in, certain supply chain constraints and challenges. ​ Financial, Credit, and Liquidity Risks ​ Due to future changes in technology, changes in market demand, or changes in market expectations, portions of our inventory may become obsolete or excessive.
The full extent to which a global health crisis, such as COVID-19, will impact our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new medical and other information that may emerge as a result and the actions by governmental entities or others to contain it or treat its impact. ​ The impacts of a potential resurgence of COVID-19 or other severe global health crisis could pose the risk that we or our employees, suppliers, customers and others may be restricted or prevented from conducting business activities for indefinite or intermittent periods of time, including as a result of employee health and safety concerns, shutdowns, shelter in place orders, travel restrictions and other actions and restrictions that may be prudent or required by governmental authorities. ​ We, our suppliers, and our customers had modified our business practices for the continued health and safety of our employees during the outbreak of COVID-19.
The full extent to which a global health crisis will impact our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new medical and other information that may emerge as a result and the actions by governmental entities or others to contain it or treat its impact. ​ The impacts of a severe global health crisis could pose the risk that we or our employees, suppliers, customers and others may be restricted or prevented from conducting business activities for indefinite or intermittent periods of time, including as a result of employee health and safety concerns, shutdowns, shelter in place orders, travel restrictions and other actions and restrictions that may be prudent or required by governmental authorities. ​ 26 ​ Global health crisis could disrupt our ability to deliver and/or install machines, our procurement of supplies for our operations, and our customers’ purchasing behavior or decisions, including reduced demand for our products that could continue for an extended period of time.
Also, any interruption in service by one of our key component suppliers, if prolonged, could have a material adverse effect on our business, results of operations and financial condition. ​ 20 ​ Additionally, the geopolitical environment and ongoing sovereign relationship between China and Taiwan, including recent heightened tensions between them, could have a material impact on our business.
The geopolitical environment and ongoing sovereign relationship between China and Taiwan, including recent heightened tensions between them, could have a material impact on our business.
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An unplanned interruption in manufacturing or supply, or significant increase in price from third party suppliers, could have a material adverse effect on our business, results of operations, and financial condition.
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Such an interruption or increase in price could result from various factors, including a change in the political environment, such as trade wars or tariffs, a natural disaster, such as an earthquake, typhoon, or tsunami, or vulnerabilities in our technology or cyber-attacks against our information systems, such as ransomware attacks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES The following table sets forth the principal use, location, and size of each of our facilities: ​ ​ ​ ​ ​ ​ Principal Uses ​ Locations ​ Square Footage Corporate headquarters, design and engineering, product testing, sales and marketing, application engineering, customer service, manufacturing and assembly Indianapolis, Indiana, U.S. 184,200 ​ Manufacturing, assembly, sales, application engineering and customer service Taichung, Taiwan 485,100 ​ Castell’Alfero, Italy 32,300 ​ Manufacturing Ningbo, China 31,000 ​ Sales, application engineering, customer service, and warehousing High Wycombe, England 26,300 ​ Paris, France 12,800 ​ Munich and Verl, Germany 20,900 ​ Milan, Italy 12,900 ​ Venlo, the Netherlands 9,700 ​ Toh Guan, Singapore 5,600 ​ Shanghai, Dongguan and Kunshan, China 9,700 ​ Chennai and Pune, India 16,700 ​ Liegnitz, Poland 1,000 ​ Grand Rapids, Michigan, U.S. 3,700 ​ Los Angeles, California, U.S. 11,400 ​ Stritez, the Czech Republic ​ 5,500 ​ We own the Indianapolis facility and lease all other facilities.
Biggest changePROPERTIES ​ The following table sets forth the principal use, location, and size of each of our facilities: ​ ​ ​ ​ ​ ​ Principal Uses ​ Locations ​ Square Footage Corporate headquarters, design and engineering, product testing, sales and marketing, application engineering, customer service, manufacturing and assembly Indianapolis, Indiana, U.S. 165,000 ​ Manufacturing, assembly, sales, application engineering and customer service Taichung, Taiwan 485,100 ​ Castell’Alfero, Italy 32,300 ​ Sales, application engineering, customer service, and warehousing High Wycombe, England 26,300 ​ Paris, France 12,800 ​ Munich and Verl, Germany 20,900 ​ Milan, Italy 13,800 ​ Venlo, the Netherlands 9,700 ​ Toh Guan, Singapore 9,600 ​ Shanghai, Dongguan and Kunshan, China 8,200 ​ Chennai and Pune, India 14,800 ​ Liegnitz, Poland 1,000 ​ ​ Indianapolis, Indiana, U.S. 19,200 ​ Grand Rapids, Michigan, U.S. 3,700 ​ Los Angeles, California, U.S. 11,400 ​ Stritez, the Czech Republic ​ 5,500 ​ We own the Indianapolis corporate headquarters facility and lease all other facilities.
The leases have terms expiring at various dates ranging from January 2024 to July 2032. We believe that all of our facilities are well maintained and are adequate for our needs now and in the foreseeable future.
The leases have terms expiring at various dates ranging from January 2025 to July 2032. We believe that all of our facilities are well maintained and are adequate for our needs now and in the foreseeable future.
We do not believe that we would experience significant difficulty in replacing any of the currently leased facilities if any of our leases were not renewed at expiration. ​ 28 ​
We do not believe that we would experience significant difficulty in replacing any of the currently leased facilities if any of our leases were not renewed at expiration. ​ 30 ​

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeVolovic ​ 59 ​ Director, President, and Chief Executive Officer Sonja K. McClelland ​ 52 ​ Executive Vice President, Treasurer and Chief Financial Officer HaiQuynh Jamison ​ 45 ​ Corporate Controller and Principal Accounting Officer Jonathon D.
Biggest changeVolovic ​ 60 ​ Director, President, and Chief Executive Officer Sonja K. McClelland ​ 53 ​ Executive Vice President, Treasurer and Chief Financial Officer HaiQuynh Jamison ​ 46 ​ Corporate Controller and Principal Accounting Officer Jonathon D.
Volovic was employed by Unisys Corporation. ​ 29 ​ Sonja K. McClelland has been employed by us since September 1996 and was appointed as Vice President, Treasurer and Chief Financial Officer in 2014, then as Executive Vice President in March 2017. She also served as our Corporate Secretary from 2014 until March 2021. Ms.
Volovic was employed by Unisys Corporation. ​ 31 ​ Sonja K. McClelland has been employed by us since September 1996 and was appointed as Vice President, Treasurer and Chief Financial Officer in 2014, then as Executive Vice President in March 2017. She also served as our Corporate Secretary from 2014 until March 2021. Ms.
Wright ​ 41 ​ General Counsel and Corporate Secretary ​ Michael Doar has been employed by us since November 2001 and has been a member of our Board of Directors since 2000. Mr.
Wright ​ 42 ​ General Counsel and Corporate Secretary ​ Michael Doar has been employed by us since November 2001 and has been a member of our Board of Directors since 2000. Mr.
The following information sets forth as of October 31, 2023, the name of each executive officer and his or her age, tenure as an officer, principal occupation, and business experience: ​ ​ ​ ​ ​ Name Age Position(s) with the Company Michael Doar ​ 68 ​ Executive Chairman of the Board Gregory S.
The following information sets forth as of October 31, 2024, the name of each executive officer and his or her age, tenure as an officer, principal occupation, and business experience: ​ ​ ​ ​ ​ Name Age Position(s) with the Company Michael Doar ​ 69 ​ Executive Chairman of the Board Gregory S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividend Policy We began declaring cash dividends on our common stock in the third quarter of fiscal year 2013, and we expect to continue to declare dividends on a quarterly basis; however, the declaration and amount of any future cash dividends will be subject to the sole discretion of our Board of Directors and will depend upon many factors, including our results of operations, financial condition, capital requirements, regulatory and contractual restrictions, our business strategy and other factors deemed relevant by our Board of Directors from time to time.
Biggest changeThe declaration and amount of any future cash dividends will be subject to the sole discretion of our Board of Directors and will depend upon many factors, including our results of operations, financial condition, capital requirements, regulatory and contractual restrictions, our business strategy and other factors deemed relevant by our Board of Directors from time to time. ​ Our payment of dividends is limited by our U.S. credit agreement, as further described in Item 7.
The disclosure under the caption “Equity Compensation Plan Information at 2023 Fiscal Year End” in our 2024 proxy statement is incorporated by reference in Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The performance graph information is included in Item 9B. Other Information. ​ ​
The disclosure under the caption “Equity Compensation Plan Information at 2024 Fiscal Year End” in our 2025 proxy statement is incorporated by reference in Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The performance graph information is included in Item 9B. Other Information. ​ ​
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “HURC”. Holders There were 119 holders of record of our common stock as of December 14, 2023.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “HURC”. Holders There were 119 holders of record of our common stock as of December 11, 2024.
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Our payment of dividends is limited by our U.S. credit agreement, as further described in Item 7.
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Dividend Policy We began declaring cash dividends on our common stock in the third quarter of fiscal year 2013, and continued to do so on a quarterly basis subsequently until the third quarter of fiscal year 2024, when we announced a temporary suspension of our regular quarterly cash dividend as we seek to enhance our financial flexibility and improve our ability to manage market volatility while focusing on strengthening our balance sheet, reinvesting in our core business and research and development related to emerging technologies, and returning value to shareholders via the appropriate channels in both the near- and long-term.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 4 of Notes to Consolidated Financial Statements. 30 ​ Other Information During the period covered by this report, we did not sell any equity securities that were not registered under the Securities Act of 1933, as amended.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 4 of Notes to Consolidated Financial Statements. 32 ​ Stock Repurchases On January 6, 2023, we announced a share repurchase program in an aggregate amount of up to $25.0 million.
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Repurchases under the program may be made in the open market or through privately negotiated transactions from time to time, subject to applicable laws, regulations, and contractual provisions. On September 25, 2024, we announced an extension of the term of this repurchase program from November 10, 2024 to November 10, 2026.
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The program may be amended, suspended, or discontinued at any time and does not commit us to repurchase any shares of our common stock.
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The following table summarizes the repurchases of common stock made by us during the three months ended October 31, 2024, based on the trade date of the repurchase: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ Dollar Value of ​ ​ ​ ​ ​ ​ ​ Shares ​ ​ Shares that ​ ​ ​ ​ ​ ​ ​ Purchased as ​ ​ May Yet Be ​ ​ ​ ​ ​ ​ ​ Part of Publicly ​ ​ Purchased ​ ​ Total Number ​ ​ Average Price ​ Announced ​ ​ Under Plans or ​ ​ of Shares ​ ​ Paid per ​ Plans or ​ ​ Programs ​ Purchased ​ Share Programs ​ ($ in thousands) August 2024 ​ 44,352 ​ $ 16.92 (1) ​ 44,352 ​ $ 21,933 September 2024 ​ 13,870 ​ $ 17.64 (1) ​ 13,870 ​ $ 21,688 October 2024 ​ - ​ $ - ​ - ​ $ 21,688 Total ​ 58,222 ​ ​ ​ ​ 58,222 ​ ​ ​ ​ (1) Reflects the average weighted price of the shares repurchased as part of the publicly announced programs and includes commissions paid related to our repurchase of shares of common stock. ​ Other Information During the period covered by this report, we did not sell any equity securities that were not registered under the Securities Act of 1933, as amended.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe believe our access to cash pooling and our borrowing capacity under our credit facilities provide adequate liquidity to fund our global operations over the next twelve months and beyond, and allow us to remain committed to our strategic plan of product innovation, acquisitions, targeted penetration of developing markets, payment of dividends and our stock repurchase program. ​ We continue to receive and review information on businesses and assets for potential acquisition, including intellectual property assets that are available for purchase.
Biggest changeWe believe our access to cash pooling and our borrowing capacity under our credit facilities provide adequate liquidity to fund our global operations over the next twelve months and beyond, and allow us to remain committed to our strategic plan of product innovation, acquisitions, targeted penetration of developing markets, and a balanced capital allocation program. ​ We continue to receive and review information on businesses and assets for potential acquisition, including intellectual property assets that are available for purchase. ​ Contractual Obligations and Commitments ​ The following is a table of contractual obligations and commitments as of October 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ More ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ than ​ Total 1 Year 1-3 Years 4-5 Years 5 Years Operating leases ​ $ 12,586 ​ $ 4,219 ​ $ 5,475 ​ $ 2,319 ​ $ 573 Accrued and deferred taxes and credits ​ 6,239 ​ 436 ​ 563 ​ ​ — ​ 5,240 Total ​ $ 18,825 ​ $ 4,655 ​ $ 6,038 ​ $ 2,319 ​ $ 5,813 ​ In addition to the contractual obligations and commitments disclosed above, we also have a variety of other obligations for the procurement of materials and services, none of which subject us to any material non-cancelable commitments.
In February and December 2023, NHML and HML, respectively, renewed the above-referenced credit facilities on substantially similar terms and identical maximum aggregate limits. ​ As of October 31, 2023, our existing credit facilities consisted of a €1.5 million revolving credit facility in Germany, the 150 million New Taiwan dollars Taiwan credit facility, the 32.5 million Chinese Yuan China credit facility and the $40.0 million revolving credit facility under the 2018 Credit Agreement.
In February and December 2023, NHML and HML, respectively, renewed the above-referenced credit facilities on substantially similar terms and identical maximum aggregate limits. ​ As of October 31, 2024, our existing credit facilities consisted of a €1.5 million revolving credit facility in Germany, the 150 million New Taiwan dollars Taiwan credit facility, the 32.5 million Chinese Yuan China credit facility and the $40.0 million revolving credit facility under the 2018 Credit Agreement.
Capital expenditures for fiscal year 2023 were primarily for software development costs, purchases of factory equipment for production facilities, and purchases of general software and equipment for sales and service divisions. We funded these expenditures with cash flows from operations. On January 6, 2023, we announced a share repurchase program in an aggregate amount of up to $25.0 million.
Capital expenditures for fiscal year 2024 were primarily for software development costs, purchases of factory equipment for production facilities, and purchases of general software and equipment for sales and service divisions. We funded these expenditures with cash flows from operations. On January 6, 2023, we announced a share repurchase program in an aggregate amount of up to $25.0 million.
This overview is intended to be read in conjunction with the more detailed information included in our financial statements, and notes thereto, that appear elsewhere in this report. ​ 31 ​ The market for machine tools is international in scope. We have both significant foreign sales and significant foreign manufacturing operations.
This overview is intended to be read in conjunction with the more detailed information included in our financial statements, and notes thereto, that appear elsewhere in this report. ​ The market for machine tools is international in scope. We have both significant foreign sales and significant foreign manufacturing operations.
We may use the proceeds from advances under the 2018 Credit Agreement for general corporate purposes. ​ 37 ​ In March 2019, our wholly-owned subsidiaries in Taiwan, HML, and China, NHML, closed on uncommitted revolving credit facilities with maximum aggregate amounts of 150 million New Taiwan dollars and 32.5 million Chinese Yuan, respectively.
We may use the proceeds from advances under the 2018 Credit Agreement for general corporate purposes. ​ 40 ​ In March 2019, our wholly-owned subsidiaries in Taiwan, HML, and China, NHML, closed on uncommitted revolving credit facilities with maximum aggregate amounts of 150 million New Taiwan dollars and 32.5 million Chinese Yuan, respectively.
These non-Hurco branded products are sold by our wholly-owned distributors and are comprised primarily of other general-purpose vertical milling centers and lathes, laser cutting machines, waterjet cutting machines, CNC grinders, compact horizontal machines, metal cutting saws, and CNC swill lathes. ProCobots is our wholly-owned subsidiary that provides automation solutions.
These non-Hurco branded products are sold by our wholly-owned distributors and are comprised primarily of other general-purpose vertical milling centers and lathes, laser cutting machines, waterjet cutting machines, CNC grinders, compact horizontal machines, metal cutting saws, and CNC swiss lathes. ProCobots is our wholly-owned subsidiary that provides automation solutions.
The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the notes thereto included elsewhere in this report. The following MD&A generally focuses on the operating results and year-over-year comparisons between fiscal years 2023 and 2022.
The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the notes thereto included elsewhere in this report. The following MD&A generally focuses on the operating results and year-over-year comparisons between fiscal years 2024 and 2023.
Discussion of fiscal year 2021 results and year-over-year comparisons between fiscal years 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended October 31, 2022, filed with the SEC on January 6, 2023.
Discussion of fiscal year 2023 results and year-over-year comparisons between fiscal years 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended October 31, 2023, filed with the SEC on January 5, 2024.
We follow Financial Accounting Standards Board (“FASB”) guidance for accounting for guarantees (codified in Accounting Standards Codification (“ASC”) 460). As of October 31, 2023, we had nine outstanding third party payment guarantees totaling approximately $1.0 million. The terms of these guarantees are consistent with the underlying customer financing terms.
We follow Financial Accounting Standards Board (“FASB”) guidance for accounting for guarantees (codified in Accounting Standards Codification (“ASC”) 460). As of October 31, 2024, we had nine outstanding third party payment guarantees totaling approximately $0.9 million. The terms of these guarantees are consistent with the underlying customer financing terms.
Although the majority of our computer control systems and software products are proprietary, they predominantly use industry standard personal computer components. Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products.
Although most of our computer control systems and software products are proprietary, they predominantly use industry standard personal computer components. Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products.
We had no debt or borrowings under any of our credit facilities at October 31, 2023. ​ At October 31, 2023, we had an aggregate of approximately $50.6 million available for borrowing under our credit facilities and were in compliance with all covenants relating thereto. ​ We have an international cash pooling strategy that generally provides access to available cash deposits and credit facilities when needed in the U.S., Europe or Asia Pacific.
We had no debt or borrowings under any of our credit facilities as of October 31, 2024. ​ As of October 31, 2024, we had an aggregate of approximately $50.9 million available for borrowing under our credit facilities and were in compliance with all covenants relating thereto. ​ We have an international cash pooling strategy that generally provides access to available cash deposits and credit facilities when needed in the U.S., Europe or Asia Pacific.
We seek to mitigate those risks through the use of derivative instruments – principally foreign currency forward exchange contracts. ​ ​ 32 ​ Results of Operations The following table presents, for the fiscal years indicated, selected items from the Consolidated Statements of Operations expressed as a percentage of our worldwide sales and service fees and the year-to-year percentage changes in the dollar amounts of those items. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Revenues Year-to-Year % Change ​ 2023 2022 2021 Increase/Decrease ​ ​ ​ ​ ​ ​ ​ ​ ’23 vs. ’22 ​ ’22 vs. ’21 Sales and service fees ​ 100 % 100 % 100 % (9) % 7 % Gross profit ​ 25 % 26 % 24 % (13) % 15 % Selling, general and administrative expenses ​ 22 % 21 % 20 % (4) % 12 % Operating income ​ 3 % 5 % 4 % (48) % 24 % Net income ​ 2 % 3 % 3 % (47) % 22 % ​ Fiscal Year 2023 Compared to Fiscal Year 2022 Sales and Service Fees.
We seek to mitigate those risks through the use of derivative instruments – principally foreign currency forward exchange contracts. ​ Results of Operations The following table presents, for the fiscal years indicated, selected items from the Consolidated Statements of Operations expressed as a percentage of our worldwide sales and service fees and the year-to-year percentage changes in the dollar amounts of those items. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 35 ​ ​ Percentage of Revenues Year-to-Year % Change ​ 2024 2023 2022 Increase/(Decrease) ​ ​ ​ ​ ​ ​ ​ ​ ’24 vs. ’23 ​ ’23 vs. ’22 Sales and service fees ​ 100 % 100 % 100 % (18) % (9) % Gross profit ​ 20 % 25 % 26 % (33) % (13) % Selling, general and administrative expenses ​ 25 % 22 % 21 % (7) % (4) % Operating (loss) income ​ (4) % 3 % 5 % (225) % (48) % Net (loss) income ​ (9) % 2 % 3 % (478) % (47) % ​ Fiscal Year 2024 Compared to Fiscal Year 2023 Sales and Service Fees.
Unrecognized tax benefits in the amount of approximately $0.1 million, excluding any interest and penalties, have been excluded from the table above because we are unable to determine a reasonably reliable estimate of the timing of future payment. ​ 38 ​ We expect capital spending in fiscal year 2024 to be approximately $3.8 million, which includes investments for software development, leasehold improvement, factory equipment, and production facilities, as well as general software and equipment for selling facilities.
Unrecognized tax benefits, excluding any interest and penalties, were immaterial for fiscal year 2024 and have been excluded from the table above because we are unable to determine a reasonably reliable estimate of the timing of future payment. ​ ​ ​ 41 ​ We expect capital spending in fiscal year 2025 to be approximately $4.1 million, which includes investments for software development, leasehold improvement, factory equipment, and production facilities, as well as general software and equipment for selling facilities.
The decrease in cash and cash equivalents was primarily a result of net cash used for payments of outstanding accounts payable, stock repurchases and dividend payments . Approximately 26% of our $41.8 million of cash and cash equivalents is held in the U.S.
The decrease in cash and cash equivalents was primarily a result of net cash used for payments of outstanding accounts payable, stock repurchases and dividend payments . Approximately 12% of our $33.3 million of cash and cash equivalents is held in the U.S.
During fiscal year 2023, sales for all product categories included an unfavorable currency impact of 1%, when translating foreign sales to U.S. dollars for financial reporting purposes. ​ Orders and Backlog .
During fiscal year 2024, sales for all product categories included a favorable currency impact of less than 1%, when translating foreign sales to U.S. dollars for financial reporting purposes. ​ Orders and Backlog .
Selling, general, and administrative expenses for fiscal year 2023 were $49.6 million, or 22% of sales, compared to $51.7 million, or 21% of sales, in fiscal 2022, and included a favorable currency impact of $0.4 million, when translating foreign expenses to U.S. dollars for financial reporting purposes.
Selling, general, and administrative expenses for fiscal year 2024 were $46.0 million, or 25% of sales, compared to $49.6 million, or 22% of sales, in fiscal year 2023, and included an unfavorable currency impact of $0.4 million, when translating foreign expenses to U.S. dollars for financial reporting purposes.
The year-over-year decrease in European sales was primarily attributable to a decreased volume of shipments of Hurco machines in Germany, France, and Italy, partially offset by increased sales of electro-mechanical components and accessories manufactured by LCM and increased shipments of Hurco machines in the United Kingdom and Milltronics machines throughout Europe where our customers are located. ​ 33 ​ Asian Pacific sales for fiscal year 2023 decreased by 34%, compared to fiscal 2022, and included an unfavorable currency impact of 4%, when translating foreign sales to U.S. dollars for financial reporting purposes.
The year-over-year decrease in European sales was primarily attributable to a decreased volume of shipments of Hurco and Takumi machines in Germany, Italy, and the United Kingdom, and of electro-mechanical components and accessories manufactured by LCM, partially offset by an increased volume of shipments of Hurco and Takumi machines in France and increased sales of ProCobots automation solutions. ​ Asian Pacific sales for fiscal year 2024 increased by 2%, compared to fiscal year 2023, and included an unfavorable currency impact of 1%, when translating foreign sales to U.S. dollars for financial reporting purposes.
Sales of computerized machine tools for fiscal year 2023 decreased by 11%, compared to fiscal year 2022, primarily due to a decreased volume of shipments of Hurco machines in all regions where our customers are located, except the United Kingdom; Milltronics machines in North America; and Takumi machines in China.
Sales of computerized machine tools for fiscal year 2024 decreased by 22%, compared to fiscal year 2023, primarily due to a decreased volume of shipments of Hurco and Takumi machines in all regions where our customers are located, except India and France, partially offset by increased sales of Milltronics vertical machines in North America.
Inventory turns at October 31, 2023 were 1.1 compared to 1.2 at October 31, 2022. Capital expenditures were $2.6 million in fiscal year 2023, compared to $2.2 million in fiscal year 2022.
Inventory turns as of October 31, 2024 were 1.0 compared to 1.1 as of October 31, 2023. Capital expenditures were $2.9 million in fiscal year 2024, compared to $2.6 million in fiscal year 2023.
Critical Accounting Estimates Our discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles.
We accrue liabilities under these guarantees at fair value, which amounts are insignificant. ​ Critical Accounting Estimates ​ Our discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles.
Sales of computer control systems and software for fiscal 2023 increased by 6%, compared to fiscal 2022, due to increased sales of software for Hurco machines in North America.
Sales of computer control systems and software for fiscal year 2024 decreased by 13%, compared to fiscal year 2023, due to decreased sales of software for Hurco machines in North America and Germany.
Service fees increased by 1% for fiscal year 2023, compared to fiscal year 2022, primarily due to increased service of Hurco machines in the United Kingdom, France and Italy, mostly offset by a reduction in service of Hurco machines in North America and Germany.
Service fees increased by 9% for fiscal year 2024, compared to fiscal year 2023, primarily due to increased service of Hurco machines in the United Kingdom, France and North America.
The year-over-year decrease in European demand was primarily attributable to decreased demand for Hurco machines in Germany and France, partially offset by increased customer demand for Hurco machines in the United Kingdom and Italy, and electro-mechanical components and accessories manufactured by LCM. ​ Asian Pacific orders for fiscal year 2023 decreased by 45%, compared to fiscal 2022, and included an unfavorable currency impact of 3%, when translating foreign orders to U.S. dollars.
The decrease in orders was driven primarily by decreased customer demand for Hurco and Takumi machines in Germany, France, and Italy, as well as decreased demand for electro-mechanical components and accessories manufactured by LCM, partially offset by increased demand for Hurco higher-performance VMX machines in the United Kingdom and for ProCobots automation solutions sold across the European region. ​ Asian Pacific orders for fiscal year 2024 increased by 54%, compared to fiscal year 2023, and included an unfavorable currency impact of 2%, when translating foreign orders to U.S. dollars.
Upon shipment of a machine, the customer assumes the risk of ownership. The customer does not obtain title, however, until the customer has paid for the machine. A retention of title clause allows us to recover the machine if the customer defaults on the financing. We accrue liabilities under these guarantees at fair value, which amounts are insignificant.
Upon shipment of a machine, the customer assumes the risk of ownership. The customer does not obtain title, however, until the customer has paid for the machine. A retention of title clause allows us to recover the machine if the customer defaults on the financing.
The decrease in working capital was primarily driven by a decrease in cash and cash equivalents, mostly offset by decreases in accounts payable and customer deposits and increases in inventory and accounts receivable. ​ Inventories, net were $158.0 million at October 31, 2023, compared to $156.2 million at October 31, 2022, and included an unfavorable currency impact of $4.9 million, or 3%, when translating foreign inventories to U.S. dollars for financial reporting purposes.
The decrease in working capital was primarily driven by decreases in cash and cash equivalents, inventories, accounts receivable, net, and prepaid and other assets, as well as increases in customer deposits, partially offset by decreases in accounts payable and accrued payroll and employee benefits. ​ Inventories were $153.0 million as of October 31, 2024, compared to $158.0 million as of October 31, 2023, and included a favorable currency impact of $3.2 million, or 2%, when translating foreign inventories to U.S. dollars for financial reporting purposes.
Our judgment regarding the realization of deferred tax assets may change due to future profitability and market conditions, change in U.S. or foreign tax laws, and other factors.
Accordingly, the ultimate outcome with respect to taxes we may owe may differ from the amounts recognized. Our judgment regarding the realization of deferred tax assets may change due to future profitability and market conditions, change in U.S. or foreign tax laws, and other factors.
Net income for fiscal year 2023 was $4.4 million, or $0.66 per diluted share, compared to $8.2 million, or $1.23 per diluted share, for fiscal year 2022.
Net loss for fiscal year 2024 was $16.6 million, or $(2.56) per diluted share, compared to net income of $4.4 million, or $0.66 per diluted share, for fiscal year 2023.
Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results. ​ Goodwill and Intangible Assets.
Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results. ​ 42 ​ Income Taxes – We account for income taxes and the related accounts under the asset and liability method.
Sales of service parts for fiscal year 2023 increased by 1%, compared to fiscal year 2022, due mainly to increased volume of sales of Hurco and ProCobots parts in Europe and North America, mostly offset by a reduction in volume of sales of parts in North America.
Sales of service parts for fiscal year 2024 decreased by 3%, compared to fiscal year 2023, due mainly to a decreased volume of aftermarket sales of Hurco and LCM parts in Europe and North America.
The year-over-year decrease in net income was primarily due to decreased volume of machine shipments. ​ Liquidity and Capital Resources At October 31, 2023, we had cash and cash equivalents of $41.8 million, compared to $63.9 million at October 31, 2022.
The year-over-year decrease in net income was primarily due to decreased volume of machine shipments, as well as the valuation allowance recorded against our U.S. and China deferred tax assets. ​ Liquidity and Capital Resources As of October 31, 2024, we had cash and cash equivalents of $33.3 million, compared to $41.8 million as of October 31, 2023.
Operating income for fiscal year 2023 was $6.6 million, or 3% of sales, compared to $12.7 million, or 5% of sales, for fiscal year 2022. The year-over-year decrease in operating income was primarily due to decreased volume of machine shipments. ​ 35 ​ Other Expense, Net.
Operating loss for fiscal year 2024 was $8.3 million, or 4% of sales, compared to operating income of $6.6 million, or 3% of sales, for fiscal year 2023. The year-over-year decrease in operating income was primarily due to lower volume of vertical milling machine sales in the Americas and Europe. Other Expense, Net.
The year-over-year decrease in Asian Pacific sales for the fiscal year primarily resulted from a reduced volume of shipments of Takumi machines in China and Hurco machines in Southeast Asia, China, and India, partially offset by an increased volume of shipments of Takumi machines in India. ​ Net Sales and Service Fees by Product Category ​ The following table sets forth net sales and service fees by product group and services for the fiscal years ended October 31, 2023 and 2022 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended October 31, ​ Increase/Decrease ​ ​ ​ 2023 2022 Amount % Computerized Machine Tools ​ $ 188,335 83 % $ 211,804 85 % $ (23,469) (11) % Computer Control Systems and Software † ​ 2,805 1 % 2,634 1 % 171 6 % Service Parts ​ 28,439 12 % 28,219 11 % 220 1 % Service Fees ​ 8,228 4 % 8,157 3 % 71 1 % Total ​ $ 227,807 100 % $ 250,814 100 % $ (23,007) (9) % † Amounts shown do not include computer control systems and software sold as an integrated component of computerized machine systems.
The year-over-year increase in Asian Pacific sales for the fiscal year was primarily attributable to increased shipments of Hurco and Takumi machines in India and to one customer with multiple machine orders in China, partially offset by decreased shipments of Hurco and Takumi machines in China and Southeast Asia. ​ 36 ​ Net Sales and Service Fees by Product Category ​ The following table sets forth net sales and service fees by product group and services for the fiscal years ended October 31, 2024 and 2023 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended October 31, ​ Increase/Decrease ​ ​ ​ 2024 2023 Amount % Computerized Machine Tools ​ $ 147,561 79 % $ 188,335 83 % $ (40,774) (22) % Computer Control Systems and Software † ​ 2,447 1 % 2,805 1 % (358) (13) % Service Parts ​ 27,628 15 % 28,439 12 % (811) (3) % Service Fees ​ 8,948 5 % 8,228 4 % 720 9 % Total ​ $ 186,584 100 % $ 227,807 100 % $ (41,223) (18) % † Amounts shown do not include computer control systems and software sold as an integrated component of computerized machine tools.
We do not believe backlog is a useful measure of past performance or indicative of future performance. Backlog orders as of October 31, 2023 are expected to be fulfilled in fiscal year 2024. ​ Gross Profit. Gross profit for fiscal year 2023 was $56.2 million, or 25% of sales, compared to $64.5 million, or 26% of sales, for fiscal 2022.
Backlog orders as of October 31, 2024 are expected to be fulfilled in fiscal year 2025. ​ Gross Profit. Gross profit for fiscal year 2024 was $37.7 million, or 20% of sales, compared to $56.2 million, or 25% of sales, for fiscal year 2023.
Sales and service fees for fiscal year 2023 were $227.8 million, a decrease of $23.0 million, or 9%, compared to fiscal year 2022, and included an unfavorable currency impact of $2.4 million, or 1%, when translating foreign sales to U.S. dollars for financial reporting purposes. ​ Net Sales and Service Fees by Geographic Region ​ The following table sets forth net sales and service fees by geographic region for the fiscal years ended October 31, 2023 and 2022 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended October 31, ​ Increase/Decrease ​ ​ ​ 2023 2022 Amount % Americas ​ $ 88,329 39 % $ 95,964 38 % $ (7,635) (8) % Europe ​ 120,525 53 % 126,050 50 % (5,525) (4) % Asia Pacific ​ 18,953 8 % 28,800 12 % (9,847) (34) % Total ​ $ 227,807 100 % $ 250,814 100 % $ (23,007) (9) % ​ Sales in the Americas for fiscal year 2023 decreased by 8%, compared to fiscal 2022, primarily due to decreased shipments of Hurco and Milltronics machines, particularly the higher-performance VMX machines. ​ European sales for fiscal year 2023 decreased by 4%, compared to fiscal year 2022, and included an unfavorable currency impact of 1%, when translating foreign sales to U.S. dollars for financial reporting purposes.
Sales and service fees for fiscal year 2024 were $186.6 million, a decrease of $41.2 million, or 18%, compared to fiscal year 2023, and included a favorable currency impact of $1.8 million, or less than 1%, when translating foreign sales to U.S. dollars for financial reporting purposes. ​ Net Sales and Service Fees by Geographic Region ​ The following table sets forth net sales and service fees by geographic region for the fiscal years ended October 31, 2024 and 2023 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended October 31, ​ Increase/Decrease ​ ​ ​ 2024 2023 Amount % Americas ​ $ 72,317 39 % $ 88,329 39 % $ (16,012) (18) % Europe ​ 94,919 51 % 120,525 53 % (25,606) (21) % Asia Pacific ​ 19,348 10 % 18,953 8 % 395 2 % Total ​ $ 186,584 100 % $ 227,807 100 % $ (41,223) (18) % ​ Sales in the Americas for fiscal year 2024 decreased by 18%, compared to fiscal year 2023, primarily due to decreased shipments of Hurco and Takumi machines.
These changes, if any, may require material adjustments to these deferred tax assets and an accompanying reduction or increase in net income. ​ Capitalized Software Development Costs – Costs incurred to develop computer software products and significant enhancements to software features of existing products are capitalized as required by FASB guidance relating to accounting for the costs of computer software to be sold, leased, or otherwise marketed, and such capitalized costs are amortized over the estimated product life of the related software.
Because we have a valuation allowance recorded against our U.S. deferred tax assets, we did not record a tax benefit for our U.S. net losses for fiscal year 2024. ​ Capitalized Software Development Costs – Costs incurred to develop computer software products and significant enhancements to software features of existing products are capitalized as required by FASB guidance relating to accounting for the costs of computer software to be sold, leased, or otherwise marketed, and such capitalized costs are amortized over the estimated product life of the related software.
Working capital at October 31, 2023 was $193.3 million, compared to $194.7 million at October 31, 2022.
Working capital as of October 31, 2024 was $180.8 million, compared to $193.3 million as of October 31, 2023.
Repurchases under the program may be made in the open market or through privately negotiated transactions from time to time through November 10, 2024, subject to applicable laws, regulations, and contractual provisions. The program may be amended, suspended, or discontinued at any time and does not commit us to repurchase any shares of our common stock.
Repurchases under the program may be made in the open market or through privately negotiated transactions from time to time, subject to applicable laws, regulations, and contractual provisions. On September 25, 2024, we announced an extension of the term of this $25.0 million repurchase program from November 10, 2024 to November 10, 2026.
Other expense, net for fiscal year 2023 decreased by $1.3 million from fiscal year 2022, due mainly to a decrease in foreign currency exchange losses and increased gains on sale of property and equipment. Provision for Income Taxes . We recorded income tax expense of $2.4 million for fiscal year 2023, compared to $3.7 million for fiscal year 2022.
Other expense, net for fiscal year 2024 increased by $1.5 million from fiscal year 2023, due mainly to an increase in foreign currency exchange losses. 38 ​ Provision for Income Taxes . Income tax expense for fiscal year 2024 was $6.8 million, compared to $2.4 million for fiscal year 2023.
During fiscal year 2023, approximately 53% of our revenues were attributable to customers in Europe, where we typically sell more of our higher-performance VMX series machines. Additionally, approximately 8% of our revenues were attributable to customers in the Asia Pacific region, where we encounter greater pricing pressures. ​ We have three brands of CNC machine tools in our product portfolio.
During fiscal year 2024, approximately 51% of our revenues were attributable to customers in Europe, where we typically sell more of our higher-performance, higher-priced VMX series machines.
The year-over-year increase in the effective tax rate in the full year was primarily due to changes in geographic mix of income and loss that includes jurisdictions with differing tax rates, discrete items related to stock compensation and the impact of valuation allowances for our China operations combined with lower levels of consolidated income before taxes. ​ Net Income.
The year-over-year increase in income tax expense was primarily due to an $8.4 million non-cash valuation allowance recorded on U.S. and China deferred tax assets, as well as changes in geographic mix of income and loss that includes jurisdictions with differing tax rates, and discrete items related to unvested stock compensation.
We periodically review the carrying values of these assets and make judgments as to ultimate realization considering the above-mentioned risk factors. ​ 40 ​ Derivative Financial Instruments – Critical aspects of our accounting policy for derivative financial instruments that we designate as hedging instruments include conditions that require that critical terms of a hedging instrument are essentially the same as a hedged forecasted transaction.
We periodically review the carrying values of these assets and make judgments as to ultimate realization considering the above-mentioned risk factors. ​ ​
The year-over-year decreases in gross profit and gross profit as a percentage of sales were primarily due to the lower volume of sales of our higher-performance VMX machines and the negative impact of fixed costs on lower sales and production volumes. ​ Operating Expenses.
The decreases in both sales volume and pricing negatively impacted gross profit in dollars and as a percentage of sales, reducing our leverage of fixed costs, in comparison to fiscal year 2023. Further, certain cost reductions were implemented in the third quarter of fiscal year 2024 to help offset the impact of lower sales volumes and pricing. ​ Operating Expenses.
The decrease in Asian Pacific orders year-over-year was driven primarily by decreased customer demand for Hurco and Takumi machines in China and Hurco machines in Southeast Asia and India, partially offset by increased demand for Takumi machines in India. ​ Backlog at October 31, 2023 decreased to $28.3 million from $44.8 million at October 31, 2022, primarily due to decreased customer demand during fiscal year 2023 for Hurco, Milltronics, and Takumi machines in the U.S., Germany, France, China and Southeast Asia.
The increase in Asian Pacific orders was driven primarily by increased customer demand for Hurco and Takumi machines in China, India, and Southeast Asia.
Orders for fiscal year 2023 were $209.7 million, a decrease of $31.3 million, or 13%, compared to fiscal 2022, and included an unfavorable currency impact of $2.0 million, or less than 1%, when translating foreign orders to U.S. dollars. 34 ​ The following table sets forth new orders booked by geographic region for the fiscal years ended October 31, 2023 and 2022 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended October 31, ​ Increase/Decrease ​ ​ ​ 2023 2022 Amount % Americas ​ $ 80,412 38 % $ 92,268 38 % $ (11,856) (13) % Europe ​ 114,961 55 % 122,556 51 % (7,595) (6) % Asia Pacific ​ 14,303 7 % 26,107 11 % (11,804) (45) % Total ​ $ 209,676 100 % $ 240,931 100 % $ (31,255) (13) % ​ Orders in the Americas for fiscal year 2023 decreased by 13%, compared to fiscal year 2022, mainly due to decreased customer orders for Hurco and Milltronics, particularly higher-performance VMX machines, partially offset by increased demand for Takumi machines. ​ European orders for fiscal 2023 decreased by 6%, compared to fiscal 2022, and included an unfavorable currency impact of 1%, when translating foreign orders to U.S. dollars.
The following table sets forth new orders booked by geographic region for the fiscal years ended October 31, 2024 and 2023 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended October 31, ​ Increase/Decrease ​ ​ ​ 2024 2023 Amount % Americas ​ $ 76,711 39 % $ 80,412 38 % $ (3,701) (5) % Europe ​ 99,633 50 % 114,961 55 % (15,328) (13) % Asia Pacific ​ 21,958 11 % 14,303 7 % 7,655 54 % Total ​ $ 198,302 100 % $ 209,676 100 % $ (11,374) (5) % ​ Orders in the Americas for fiscal year 2024 decreased by 5%, compared to fiscal year 2023.
Removed
The year-over-year decrease in selling, general and administrative expenses in absolute dollar terms was primarily attributable to lower costs related to tradeshow expenses, sales commissions, and employee support costs for our global operations. ​ Operating Income.
Added
Additionally, approximately 10% of our revenues were attributable to customers in the Asia Pacific region, where we encounter greater pricing pressures. ​ During a time of global uncertainty and lower sales volumes, we have turned our attention to adjusting overhead expenses and operating expenses to help minimize the impact of the lower volumes of sales on operating income.
Removed
Our effective tax rate for fiscal year 2023 was 35%, compared to 31% for fiscal year 2022.
Added
We implemented cost reductions in the third quarter of fiscal year 2024, adjusted and managed inventories (excluding the impact of foreign currency) and temporary suspended our regular quarterly cash dividend .
Removed
During fiscal year 2023, approximately 67,513 shares were repurchased at an aggregate value of approximately $1.8 million under that program, resulting in $23.2 million remaining available under the program as of October 31, 2023. ​ 36 ​ Our prior $7.0 million share repurchase program also remained in effect until its scheduled expiration on March 10, 2023.
Added
We used that cashflow to manage our capital allocation strategies to continue investing in new technologies, product development, and necessary capital expenditures to maximize cashflows without incurring any significant indebtedness as we continue to seek new acquisitions and other growth opportunities.
Removed
During fiscal year 2023, approximately 98,776 shares were repurchased at an aggregate value of approximately $2.8 million under that program. Aggregate repurchases under all programs during fiscal year 2023 were approximately $4.6 million. ​ In addition, during fiscal year 2023, we paid cash dividends to our shareholders equal to $4.1 million.
Added
The cyclicality of our business requires that we exercise discipline in managing through unexpected changes in the markets and industries in which we operate.
Removed
We remain committed to a balanced capital allocation strategy that prioritizes a strong balance sheet and liquidity position while recognizing the importance of accretive growth and returning value to shareholders through dividends and stock repurchases, where appropriate.
Added
We believe that our long history of profitability and the strength of our balance sheet can provide us with stability to manage through these business cycles and we rely on our past experience in making measured decisions for the long-term success of our business. 34 ​ We have three brands of CNC machine tools in our product portfolio.
Removed
As such, we continue to actively evaluate acquisition opportunities that support our long-term strategic plan. ​ Contractual Obligations and Commitments ​ The following is a table of contractual obligations and commitments as of October 31, 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ More than ​ Total 1 Year 1-3 Years 3-5 Years 5 Years Operating leases ​ $ 12,220 ​ $ 4,027 ​ $ 4,263 ​ $ 2,807 ​ $ 1,123 Accrued and deferred taxes and credits ​ 5,779 ​ 349 ​ 1,027 ​ — ​ 4,403 Total ​ $ 17,999 ​ $ 4,376 ​ $ 5,290 ​ $ 2,807 ​ $ 5,526 ​ In addition to the contractual obligations and commitments disclosed above, we also have a variety of other obligations for the procurement of materials and services, none of which subject us to any material non-cancelable commitments.
Added
The decrease in sales of these machines was mainly attributable to decreased shipments of Hurco and Takumi 3-axis vertical machines, partially offset by increased sales of higher-performance Hurco 5-axis machines and Milltronics 3-axis vertical machines. ​ European sales for fiscal year 2024 decreased by 21%, compared to fiscal year 2023, and included a favorable currency impact of 2%, when translating foreign sales to U.S. dollars for financial reporting purposes.
Removed
Goodwill and indefinite-lived intangibles arising from a business combination are reviewed for impairment annually as of the last day of our third fiscal quarter, or more frequently, if circumstances arise indicating potential impairment. We have no goodwill as of October 31, 2023.
Added
Orders for fiscal year 2024 were $198.3 million, a decrease of $11.4 million, or 5%, compared to fiscal year 2023, and included a favorable currency impact of $1.9 million, or less than 1%, when translating foreign orders to U.S. dollars.
Removed
Other indefinite-lived intangible assets primarily consist of trademarks and trade names and are not material to our consolidated financial statements. Finite-lived intangible assets are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recovered through future net cash flows generated by the assets.
Added
The decrease in orders was primarily due to decreased customer demand for Hurco 3-axis vertical machines, partially offset by increased demand for Hurco higher-performing 5-axis machines. ​ 37 ​ European orders for fiscal year 2024 decreased by 13%, compared to fiscal year 2023, and included a favorable currency impact of 2%, when translating foreign orders to U.S. dollars.
Removed
We are not aware of any events or changes in circumstances that indicate the carrying value of its finite-lived assets may not be recoverable. ​ 39 ​ Impairment of Long-Lived Assets – We are required periodically to review the recoverability of certain assets, including property, plant, and equipment, intangible assets, and goodwill, based on projections of anticipated future cash flows, including future profitability assessments of various product lines.
Added
The increased customer demand for Hurco machines in China and India for the fiscal year included two customers with multiple machine orders. ​ Backlog as of October 31, 2024 increased to $40.8 million from $28.3 million as of October 31, 2023, primarily due to increased customer demand during the last six months of fiscal year 2024, compared to the same period in prior year.
Removed
We estimate cash flows using internal budgets based on recent sales data.
Added
The increase in backlog was driven primarily by increased demand for higher-performance VMX and 5-axis Hurco machines in the U.S. and Europe, Milltronics toolroom and 3-axis vertical machines in the U.S., and Hurco 3-axis vertical machines and Takumi bridge mills in Asia Pacific. We do not believe backlog is a useful measure of past performance or indicative of future performance.
Removed
We are not aware of any events or changes in circumstances that indicate the carrying value of our long-lived assets may not be recoverable. ​ Inventories and Related Reserves – We determine at each balance sheet date how much, if any, of our inventory may ultimately prove to be either unsalable or unsalable at its carrying cost.
Added
The year-over-year decrease in gross profit was primarily due to the lower volume of vertical milling machine sales in the Americas and Europe. Additionally, there were decreases in average net selling prices for certain machines during fiscal year 2024 that were designed to penetrate key markets and reduce inventories.
Removed
Reserves are established to effectively adjust the carrying value of such inventory to lower of cost (first-in, first-out method) or net realizable value. To determine the appropriate level of valuation reserves, we evaluate current stock levels in relation to historical and expected patterns of demand for all of our products.
Added
The year-over-year reduction in selling, general, and administrative expenses was primarily due to cost reductions implemented in the third quarter of fiscal year 2024 to help offset the impact of lower sales volume, partially offset by increased tradeshow costs (for IMTS) in the fourth quarter of fiscal year 2024.
Removed
We evaluate the need for changes to valuation reserves based on market conditions, competitive offerings, and other factors on a regular basis. We have not experienced substantive write-offs due to obsolescence. Income Taxes – We account for income taxes and the related accounts under the asset and liability method.
Added
Despite the reduction from an absolute dollar perspective, selling, general, and administrative expenses increased as a percentage of sales in fiscal year 2024, compared to fiscal year 2023, due to the lower volume of sales year-over-year. Operating (Loss) Income.
Removed
The estimates of our uncertain tax positions involve judgments and assessment of the potential tax implications. We recognize uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination by relevant taxing authorities, based on the technical merits of the position.
Added
Because we have an $8.3 million valuation allowance recorded against our U.S. deferred tax assets, we did not record a tax benefit for our U.S. net losses for fiscal year 2024.
Removed
The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Accordingly, the ultimate outcome with respect to taxes we may owe may differ from the amounts recognized.
Added
The valuation allowance recorded during fiscal year 2024 reflected a full valuation allowance of the U.S. deferred tax assets and was recorded after evaluating changes to tax laws, statutory tax rates, and our cumulative three-year income (loss) levels for the U.S. for fiscal year 2024. ​ Net (Loss) Income.
Removed
Another important element of our policy demands that formal documentation be maintained as required by FASB guidance relating to accounting for derivative instruments and hedging activities. Failure to comply with these conditions would result in a requirement to recognize changes in market value of hedge instruments in earnings.
Added
The program may be amended, suspended, or discontinued at any time and does not commit us to repurchase any shares of our common stock.
Removed
We routinely monitor significant estimates, assumptions, and judgments associated with derivative instruments and compliance with formal documentation requirements. ​ Stock Compensation – We account for share-based compensation according to FASB guidance relating to share-based payments, which requires the measurement and recognition of compensation expense for all share-based awards made to employees and directors based on estimated fair values on the grant date.
Added
During fiscal year 2024, we repurchased $1.5 million, or 87,635 shares, under the program, and $21.7 million remained available under the program as of October 31, 2024. ​ 39 ​ During fiscal year 2024, we paid cash dividends to our shareholders of $2.1 million.
Removed
This guidance requires that we estimate the fair value of share-based awards on the date of grant and recognize as expense the value of the portion of the award that is ultimately expected to vest over the requisite service period. ​
Added
On June 14, 2024, we announced a temporary suspension of our regular quarterly cash dividend as we seek to enhance our financial flexibility and improve our ability to manage market volatility while focusing on strengthening our balance sheet, reinvesting in our core business and research and development related to emerging technologies, and returning value to shareholders via the appropriate channels in both the near- and long-term.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDollars ​ ​ ​ Forward ​ Amount ​ Avg. ​ Contract ​ October 31, ​ Maturity ​ Contracts in Foreign Currency Forward Rate Date 2023 Date Sale Contracts: Euro 3,000 1.0275 3,083 3,169 Nov 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ 43 ​ Management’s Annual Report on Internal Control over Financial Reporting ​ To the Shareholders and Board of Directors of Hurco Companies, Inc.
Biggest changeDollars ​ ​ ​ Forward ​ in Foreign ​ Forward ​ Contract ​ October 31, ​ Maturity ​ Contracts Currency Rate Date 2024 Date Sale Contracts: Euro 3,000 1.0823 3,247 3,258 Nov 2024 ​ ​ ​ ​ 45 ​
The predominant portion of the exchange rate risk associated with our product purchases relates to the New Taiwan Dollar and the Euro. ​ We enter into foreign currency forward exchange contracts from time to time to hedge the cash flow risk related to forecasted inter-company sales and purchases denominated in, or based on, foreign currencies (primarily the Euro, Pound Sterling, and New Taiwan Dollar).
The predominant portion of the exchange rate risk associated with our product purchases relates to the New Taiwan Dollar and the Euro. ​ 43 ​ We enter into foreign currency forward exchange contracts from time to time to hedge the cash flow risk related to forecasted inter-company sales and purchases denominated in, or based on, foreign currencies (primarily the Euro, Pound Sterling, and New Taiwan Dollar).
To manage this risk, we entered into a forward contract with a notional amount of €3.0 million in November 2022. We designated this forward contract as a hedge of our net investment in Euro denominated assets. We selected the forward method under the FASB guidance related to the accounting for derivative instruments and hedging activities.
To manage this risk, we entered into a forward contract with a notional amount of €3.0 million in November 2023. We designated this forward contract as a hedge of our net investment in Euro denominated assets. We selected the forward method under the FASB guidance related to the accounting for derivative instruments and hedging activities.
We do not speculate in the financial markets and, therefore, do not enter into these contracts for trading purposes. ​ Forward contracts for the sale or purchase of foreign currencies as of October 31, 2023, which are designated as cash flow hedges under FASB guidance related to accounting for derivative instruments and hedging activities, were as follows (in thousands, except weighted average forward rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 41 ​ ​ ​ ​ ​ ​ ​ Contract Amount at ​ ​ ​ ​ Notional ​ Weighted ​ Forward Rates in ​ ​ ​ ​ Amount ​ Avg. ​ U.S.
We do not speculate in the financial markets and, therefore, do not enter into these contracts for trading purposes. ​ Forward contracts for the sale or purchase of foreign currencies as of October 31, 2024, which are designated as cash flow hedges under FASB guidance related to accounting for derivative instruments and hedging activities, were as follows (in thousands, except weighted average forward rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract Amount at ​ ​ ​ ​ Notional ​ Weighted ​ Forward Rates in ​ ​ ​ ​ Amount ​ Avg. ​ U.S.
This forward contract matured in November 2023 and we entered into a new forward contract for the same notional amount that is set to mature in November 2024.
This forward contract matured in November 2024 and we entered into a new forward contract for the same notional amount that is set to mature in November 2025.
As of October 31, 2023, we had $1.3 million of realized gain and $0.1 million of unrealized loss, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive loss, related to these forward contracts. 42 ​ Forward contracts designated as net investment hedges under this guidance as of October 31, 2023, were as follows (in thousands, except weighted average forward rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract Amount at ​ ​ ​ ​ ​ Notional ​ Weighted Forward Rates in U.S.
As of October 31, 2024, we had $1.2 million of realized gain and an immaterial amount of unrealized loss, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive loss, related to these forward contracts. ​ Forward contracts designated as net investment hedges under this guidance as of October 31, 2024, were as follows (in thousands, except weighted average forward rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ Weighted Contract Amount at Forward Rates in ​ ​ ​ ​ ​ Amount ​ Avg. ​ U.S.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk Interest on borrowings under our bank credit agreements are tied to prevailing domestic and foreign interest rates. At October 31, 2023, we had no borrowings outstanding under any of our credit facilities.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ Interest Rate Risk Interest on borrowings under our bank credit agreements are tied to prevailing domestic and foreign interest rates.
Dollars ​ ​ Forward in Foreign Forward Contract October 31, ​ ​ Contracts Currency Rate Date 2023 Maturity Dates Sale Contracts: ​ ​ Euro 12,400 1.0850 13,454 13,196 Nov 2023 - Oct 2024 Sterling 4,100 1.2349 5,063 4,981 Nov 2023 - Oct 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase Contracts: ​ ​ ​ ​ ​ New Taiwan Dollar 660,000 30.3066 * 21,777 20,655 Nov 2023 - Oct 2024 * New Taiwan Dollars per U.S. dollar Forward contracts for the sale or purchase of foreign currencies as of October 31, 2023, which were entered into to protect against the effects of foreign currency fluctuations on inter-company receivables, payables, and loans and are not designated as hedges under this guidance denominated in foreign currencies, were as follows (in thousands, except weighted average forward rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract Amount at ​ ​ ​ ​ Notional ​ Weighted ​ Forward Rates in ​ ​ ​ ​ Amount ​ Avg. ​ U.S.
Dollars ​ ​ Forward in Foreign Forward Contract October 31, ​ ​ Contracts Currency Rate Date 2024 Maturity Dates Sale Contracts: ​ ​ Euro 7,500 ​ 1.1037 ​ 8,278 ​ 8,201 ​ Nov 2024 - Oct 2025 Sterling 3,400 ​ 1.2830 ​ 4,362 ​ 4,374 ​ Nov 2024 - Oct 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase Contracts: ​ ​ ​ ​ ​ New Taiwan Dollar 490,000 ​ 30.7269 * 15,947 ​ 15,628 ​ Nov 2024 - Oct 2025 * New Taiwan Dollars per U.S. dollar ​ Forward contracts for the sale or purchase of foreign currencies as of October 31, 2024, which were entered into to protect against the effects of foreign currency fluctuations on inter-company receivables, payables, and loans and are not designated as hedges under this guidance denominated in foreign currencies, were as follows (in thousands, except weighted average forward rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract Amount at ​ ​ ​ ​ Notional ​ Weighted ​ Forward Rates in ​ ​ ​ ​ Amount ​ Avg. ​ U.S.
All of our computerized machine tools and computer control systems, as well as certain proprietary service parts, are sourced by our U.S.-based engineering and manufacturing division and re-invoiced to our foreign sales and service subsidiaries, primarily in their functional currencies.
All of our computerized machine tools and computer control systems, as well as certain proprietary service parts, are sourced by our U.S.-based engineering and manufacturing division and re-invoiced to our foreign sales and service subsidiaries, primarily in their functional currencies. ​ Our products are sourced from foreign suppliers or built to our specifications by either our wholly-owned subsidiaries in Taiwan, the U.S., Italy, and China or an affiliated contract manufacturer in Taiwan.
Foreign Currency Exchange Risk In fiscal year 2023, we derived approximately 61% of our revenues from customers located outside of the Americas, where we invoiced and received payments in several foreign currencies.
As of October 31, 2024, we had no borrowings outstanding under any of our credit facilities. ​ Foreign Currency Exchange Risk In fiscal year 2024, we derived approximately 61% of our revenues from customers located outside of the Americas, where we invoiced and received payments in several foreign currencies.
Dollars ​ ​ Forward in Foreign Forward Contract October 31, ​ ​ Contracts Currency Rate Date 2023 Maturity Dates Sale Contracts: Euro 16,024 1.0783 17,278 16,975 Nov 2023 - Feb 2024 Sterling 738 1.2125 895 895 Nov 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase Contracts: ​ ​ ​ ​ ​ New Taiwan Dollar 1,139,418 31.4244 * 36,259 35,685 Nov 2023 - Mar 2024 * New Taiwan Dollars per U.S. dollar We are also exposed to foreign currency exchange risk related to our investment in net assets in foreign countries.
Dollars ​ ​ Forward in Foreign Forward Contract October 31, ​ ​ Contracts Currency Rate Date 2024 Maturity Dates Sale Contracts: Euro 9,061 ​ 1.0913 ​ 9,888 ​ 9,859 ​ Nov 2024 - Feb 2025 Sterling 400 ​ 1.2916 ​ 517 ​ 515 ​ Nov 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase Contracts: ​ ​ ​ ​ ​ ​ ​ ​ ​ New Taiwan Dollar 1,352,500 ​ 31.5496 * 42,869 ​ 42,721 ​ Nov 2024 - Mar 2025 * New Taiwan Dollars per U.S. dollar ​ 44 ​ We are also exposed to foreign currency exchange risk related to our investment in net assets in foreign countries.
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Our products are sourced from foreign suppliers or built to our specifications by either our wholly-owned subsidiaries in Taiwan, the U.S., Italy, and China or an affiliated contract manufacturer in Taiwan.
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Management of Hurco Companies, Inc. (the “Company”) has assessed the effectiveness of the Company’s internal control over financial reporting as of October 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (COSO).
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Management is responsible for the Company’s financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting. Because of its inherent limitations, the Company’s internal control over financial reporting may not prevent or detect misstatements.
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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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In management’s opinion, the Company’s internal control over financial reporting as of October 31, 2023, was effective based on the criteria specified above. Our independent registered public accounting firm, RSM US LLP (“RSM”), which also audited our consolidated financial statements, audited the effectiveness of our internal control over financial reporting as of October 31, 2023.
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RSM has issued their attestation report, which is included in Part II, Item 8 of this Annual Report on Form 10-K. ​ ​ ​ /s/ Gregory S. Volovic Gregory S. Volovic President and Chief Executive Officer /s/ Sonja K. McClelland Sonja K.
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McClelland Executive Vice President, Treasurer, and Chief Financial Officer ​ Indianapolis, Indiana January 5, 2024 ​ ​ ​ ​ ​ ​ 44 ​

Other HURC 10-K year-over-year comparisons