Hurco Companies (HURC) 8-K Hurco Reports Third Quarter 2005 Results

   EXHIBIT 99

FOR IMMEDIATE RELEASE

WEDNESDAY, AUGUST 17, 2005

HURCO REPORTS THIRD QUARTER 2005 RESULTS

INDIANAPOLIS, INDIANA, — August 17, 2005—Hurco Companies, Inc. (Nasdaq:HURC) today announced that for its third fiscal quarter, which ended July 31, 2005, it recorded net income of $2,879,000, or $.45 per share, compared to $1,582,000, or $.25 per share, for the corresponding quarter of 2004. For the first nine months of fiscal 2005, Hurco recorded net income of $9,208,000 or $1.46 per share, compared to $3,988,000, or $.67 per share, for the corresponding 2004 period.

Foreign currency exchange rates were not materially different in the third quarter of fiscal 2005 compared to the same period in the prior year and as a result, sales during the quarter were not impacted by foreign currency translation. However, sales during the first nine months of fiscal 2005 were impacted by foreign currency translation due to stronger European currencies during the first and second quarters.

Sales and service fees for the third quarter of fiscal 2005 were $29,555,000, an increase of $5,807,000, or 24%, over the corresponding quarter of 2004. Sales increased 41%, 13% and 44% in the United States, Europe and Asia, respectively. Approximately 63% of Hurco’s sales during the 2005 period were made outside the United States compared to 67% in the prior year. Sales and service fees for the nine months ended July 31, 2005 totaled $90,791,000, an increase of $20,070,000, or 28%, over the amount recorded in the prior year. Approximately $2,751,000, or 14%, of the increase for the nine-month period was attributable to the favorable effects of stronger European currencies in relation to the U.S. dollar during the first and second quarters.

New order bookings for the third quarter of fiscal 2005 were $28,892,000, an increase of $1,443,000, or 5%, over the third quarter of 2004. Orders in dollars during the third quarter increased 6% in the United States and 41% in Asia over the same period one year ago. Orders in Europe increased slightly during this same period. For the nine months ended July 31, 2005, new orders increased $15,368,000, or 21%, over the 2004 period. Approximately $2,684,000, or 17%, of the increase for the nine-month period was attributable to the favorable effects of stronger European currencies in relation to the U.S. dollar during the first and second quarters. Backlog was $10,566,000 at July 31, 2005, compared to $11,473,000 at April 30, 2005, and $12,746,000 at October 31, 2004.

Hurco’s gross margin for the third quarter of fiscal 2005 was 33.4% compared to 30.8% for the prior year period. The improvement was primarily the result of higher unit sales. Selling, general and administrative expenses were $6,637,000 for the 2005 period, an increase of $1,396,000 over the amount recorded for the corresponding 2004 period.

Operating income for the third quarter of fiscal 2005 totaled $3,226,000 or 11% of sales and service fees, compared to $2,072,000, or 9% of sales and service fees, for the same period in the prior year.

Total debt was $4,365,000 at July 31, 2005, and represented 8% of the Company’s total capitalization, which aggregated $56,237,000. As of July 31, 2005, the Company had unutilized credit facilities of $10,645,000 available for direct borrowing or commercial letters of credit.

Michael Doar, Chief Executive Officer, stated, "We are pleased with the financial results achieved in the third quarter. Order intake in the United States and Asia continues to be strong while order rates in Europe were sluggish in the third quarter. We are looking forward to showcasing our products in September at the EMO trade show, the largest metal working trade show in the world, in Hanover, Germany. I was also pleased with our recent open house in Indianapolis where over 300 customers attended the event, which featured product demonstrations and seminars. The enthusiasm our products have received at recent trade shows confirms the strength of our product line.”

Hurco Companies, Inc. is an industrial technology company that designs and produces interactive computer controls, software and computerized machine tools for the worldwide metal cutting and metal forming industry. The end market for the Company's products consists primarily of independent job shops and short-run manufacturing operations within large corporations in industries such as the aerospace, defense, medical equipment, energy, transportation and computer equipment. The Company is based in Indianapolis, Indiana, and has sales, application engineering and service subsidiaries in High Wycombe, England; Munich, Germany; Paris, France; Milan, Italy; Shanghai, China and Singapore, along with manufacturing operations in Taiwan. Products are sold through independent agents and distributors in the United States, Europe and Asia. The Company also has direct sales forces in the United Kingdom, Germany, France, Italy, and Asia.

Web Site: www.hurco.com

This news release contains forward looking statements which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, changes in general economic and business conditions that affect demand for computerized machine systems, computer numerical control systems and software products, changes in manufacturing markets, innovations by competitors, quality and delivery performance by our contract manufacturers and governmental actions and initiatives including import and export restrictions and tariffs.

Contact: Stephen J. Alesia

Vice President & CFO

317-298-2631

Hurco Companies, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per-share data)
	Three Months Ended July 31,						Nine Months Ended July 31,
	2005			2004			2005			2004
	(unaudited)						(unaudited)
Sales and service fees	$	29,555		$	23,748		$	90,791		$	70,721
Cost of sales and service		19,692			16,435			60,421			49,464
Gross profit		9,863			7,313			30,370			21,257
Selling, general and administrative expenses		6,637			5,241			19,187			15,295
Operating income		3,226			2,072			11,183			5,962
Interest expense		79			113			248			374
Variable Option Expense		-			-			-			322
Other income (expense), net		49			28			(260	)		(119	)
Income before taxes		3,196			1,987			10,675			5,147
Provision for income taxes		317			405			1,467			1,159
Net income	$	2,879		$	1,582		$	9,208		$	3,988
Earnings per common share
Basic	$	0.46		$	0.27		$	1.50		$	0.70
Diluted	$	0.45		$	0.25		$	1.46		$	0.67
Weighted average common shares outstanding
Basic		6,206			5,882			6,156			5,722
Diluted		6,379			6,204			6,325			5,964
OTHER CONSOLIDATED FINANCIAL DATA		Three Months Ended July 31,						Nine Months Ended July 31,
Operating Data:		2005			2004			2005			2004
(unaudited)								(unaudited	)
Gross margin		33.4	%		30.8	%		33.5	%		30.1	%
SG&A expense as a percentage of sales		22.5	%		22.1	%		21.1	%		21.6	%
Operating income as a percentage of sales		10.9	%		8.7	%		12.3	%		8.4	%
Income before taxes as a percentage of sales		10.8	%		8.4	%		11.8	%		7.3	%
Depreciation		323			291			945			932
Capital expenditures		681			742			1,756			1,732
Balance Sheet Data:		7/31/2005			7/31/2004
Working capital (excluding short term debt)	$	38,687		$	24,698
Days sales outstanding		48			45
Inventory turns		2.4			2.5
Capitalization
Total debt	$	4,365		$	4,953
Shareholders' equity		51,872			35,906
Total	$	56,237		$	40,859

Hurco Companies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per-share data)
	July 31,			October 31,
	2005			2004
	(unaudited)			(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	12,907		$	8,249
Cash - restricted		-			277
Accounts receivable		17,563			17,337
Inventories		34,217			28,937
Other		4,049			1,672
Total current assets		68,736			56,472
Property and equipment:
Land		761			761
Building		7,240			7,205
Machinery and equipment		12,986			12,106
Leasehold improvements		811			676
		21,798			20,748
Less accumulated depreciation and amortization		(13,103	)		(12,512	)
		8,695			8,236
Software development costs, less amortization		3,279			2,920
Investments and other assets		5,970			5,818
	$	86,680		$	73,446
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	18,363		$	18,361
Accrued expenses		11,686			11,447
Current portion of long-term debt		323			317
Total current liabilities		30,372			30,125
Non-current liabilities:
Long-term debt		4,042			4,283
Deferred credits and other obligations		394			583
Total liabilities		34,808			34,991
Shareholders' equity:
Preferred stock: no par value per share; 1,000,000 shares		-			-
authorized; no shares issued
Common stock: no par value; $.10 stated value per share;
12,500,000 shares authorized; and 6,213,820 and
6,019,594 shares issued, respectively		621			602
Additional paid-in capital		47,519			46,778
Retained earnings (deficit)		5,766			(3,442	)
Accumulated other comprehensive income		(2,034	)		(5,483	)
Total shareholders' equity		51,872			38,455
	$	86,680		$	73,446