Hurco Companies, Inc. (Nasdaq:HURC)
Indianapolis, Ind.
http://www.hurco.com/

52-week low / high: $30.24/$60.44
Shares Outstanding: 6.42 million
Market Capitalization: $309 million

1968. Sen. Robert F. Kennedy was assassinated, 2001: A Space Odyssey premiered to the delight of sci-fi enthusiasts everywhere, and a little-known business that would eventually become Hurco Companies, Inc. (Nasdaq:HURC) was just beginning to take root.

Forty years later, Indianapolis, Ind.-based Hurco has maintained the same mission it had from its inception: to provide original, cutting-edge products to help its customers maximize productivity through reduced setup time and multi-tasking on the shop floor.

Hurco designs, manufactures and sells computerized machine tools, computer control systems and software products to global businesses in the metal working industry. Hurco also makes and distributes software options, control upgrades, hardware accessories, and replacement parts for its machine lines, as well as provides operator training and support services.

In layman’s terms, Hurco supplies businesses with “user-friendly” machinery and the software that powers them. It doesn’t take long to realize that speaking in “layman” is Hurco’s stock and trade. The company realizes that its customers need simplicity to productively manage their businesses, so allowing clients to process high-level, user-friendly programs in the simplest way possible gives them the benefits of rapid prototyping, integrated networking and quick turn-around, among other things. To make its products even more easy-to-use and uncomplicated, Hurco’s software also includes 3-D, conversational tool and laser probing, and translation and editing capabilities for clients to utilize.

The company’s wares are used by precision tool, die, and mold manufacturers; independent metal parts manufacturers; and specialized production application or prototype departments within manufacturing companies. It caters to the aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer equipment industries.

Hurco’s endeavors are no trivial pursuit: for the first quarter ended Jan. 31, 2008, net income was $7.8 million, or $1.21 a share, up 45% from the $5.4 million, or $0.84 a share, reported in the first quarter of 2007. Sales rose 30% to $60.9 million from the $46.9 million reported last year. The weaker dollar boded well in Hurco’s favor when translating foreign sales to U.S. dollars: the impact was about 10%, or $4.6 million, in the year-to-year comparison.

The company’s growth was driven by demand in existing European markets, expansion into Eastern European markets, and a strong push into India, which Hurco began targeting last year.

New order bookings in the first quarter of fiscal 2008 were up 30% to $61.1 million, compared with $14 million in the prior-year period. Europe and the Asia Pacific accounted for $14,180,000, or 44%, and $603,000, or 27%, respectively. North American orders fell by $750,000, or 6%, but that didn’t exactly faze CEO Michael Doar.

“Strong first-quarter results, despite market softness in the United States, affirm the importance of our global strategy,” Doar said in a statement when earnings were released on Feb. 28. “Europe continues to exceed expectations. Increased sales in the Asia Pacific region are a direct result of the resources we devoted to India last year to expand our presence in this key market. We will continue to monitor the U.S. market closely.''

If the past has been any indicator, the company’s future is a wide, open road. Increased reliance on markets outside of the United States, especially emerging markets such as India, coupled with a weak dollar, are playing into Hurco’s pockets nicely. In the decades since its inception, popular trends and technologies have come and gone, but Hurco has remained strong, proving that consistency is the true test of profitable endurance.

Note: Hurco Companies, Inc. (Nasdaq:HURC) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Hurco displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.

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