Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Apr. 30, 2017 | May 31, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | HURCO COMPANIES INC | |
Entity Central Index Key | 315,374 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | HURC | |
Entity Common Stock, Shares Outstanding | 6,624,197 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Sales and service fees | $ 58,222 | $ 52,029 | $ 106,966 | $ 108,532 |
Cost of sales and service | 41,154 | 35,419 | 77,312 | 74,224 |
Gross profit | 17,068 | 16,610 | 29,654 | 34,308 |
Selling, general and administrative expenses | 11,714 | 11,943 | 22,881 | 23,904 |
Operating income | 5,354 | 4,667 | 6,773 | 10,404 |
Interest expense | 24 | 25 | 45 | 49 |
Interest income | 7 | 7 | 18 | 22 |
Investment income | 16 | 4 | 80 | 106 |
Other (income) expense, net | 240 | (246) | 291 | (20) |
Income before taxes | 5,113 | 4,899 | 6,535 | 10,503 |
Provision for income taxes | 1,467 | 1,225 | 2,010 | 2,934 |
Net income | $ 3,646 | $ 3,674 | $ 4,525 | $ 7,569 |
Income per common share | ||||
Basic (in dollars per share) | $ 0.55 | $ 0.56 | $ 0.68 | $ 1.15 |
Diluted (in dollars per share) | $ 0.54 | $ 0.56 | $ 0.67 | $ 1.14 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 6,617 | 6,570 | 6,600 | 6,564 |
Diluted (in shares) | 6,671 | 6,641 | 6,664 | 6,630 |
Dividends paid per share | $ 0.1 | $ 0.09 | $ 0.19 | $ 0.17 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Net income | $ 3,646 | $ 3,674 | $ 4,525 | $ 7,569 |
Other comprehensive income (loss): | ||||
Translation of foreign currency financial statements | 2,259 | 3,423 | 2,156 | 1,012 |
(Gain) / loss on derivative instruments reclassified into operations, net of tax of $(174), $(301), $(59) and $(811), respectively | (317) | (546) | (108) | (1,474) |
Gain / (loss) on derivative instruments, net of tax of $52, $(405), $233 and $(312), respectively | 95 | (736) | 424 | (567) |
Total other comprehensive income (loss) | 2,037 | 2,141 | 2,472 | (1,029) |
Comprehensive income | $ 5,683 | $ 5,815 | $ 6,997 | $ 6,540 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Realized loss (gains) on derivative instruments reclassified into operations, tax | $ (174) | $ (301) | $ (59) | $ (811) |
Unrealized (loss) gains on derivative instruments, tax | $ 52 | $ (405) | $ 233 | $ (312) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 30, 2017 | Oct. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 60,614 | $ 41,217 |
Accounts receivable, net | 35,831 | 48,631 |
Inventories, net | 118,853 | 117,025 |
Derivative assets | 1,227 | 1,725 |
Prepaid assets | 8,519 | 8,207 |
Other | 2,056 | 1,576 |
Total current assets | 227,100 | 218,381 |
Property and equipment: | ||
Land | 841 | 841 |
Building | 7,352 | 7,352 |
Machinery and equipment | 24,731 | 23,515 |
Leasehold improvements | 3,590 | 3,487 |
Property and equipment, gross | 36,514 | 35,195 |
Less accumulated depreciation and amortization | (24,375) | (22,898) |
Total property and equipment | 12,139 | 12,297 |
Non-current assets: | ||
Software development costs, less accumulated amortization | 5,520 | 4,926 |
Goodwill | 2,298 | 2,314 |
Intangible assets, net | 1,087 | 1,150 |
Deferred income taxes | 6,146 | 6,138 |
Investments and other assets, net | 7,079 | 6,743 |
Total non-current assets | 22,130 | 21,271 |
Total assets | 261,369 | 251,949 |
Current liabilities: | ||
Accounts payable | 43,957 | 37,200 |
Accrued expenses and other | 12,691 | 17,231 |
Accrued warranty expenses | 1,541 | 1,523 |
Derivative liabilities | 517 | 538 |
Short-term debt | 1,451 | 1,476 |
Total current liabilities | 60,157 | 57,968 |
Non-current liabilities: | ||
Deferred income taxes | 4,492 | 4,294 |
Accrued tax liability | 1,178 | 963 |
Deferred credits and other | 3,408 | 3,249 |
Total non-current liabilities | 9,078 | 8,506 |
Shareholders’ equity: | ||
Preferred stock: no par value per share, 1,000,000 shares authorized; no shares issued | 0 | 0 |
Common stock: no par value, $.10 stated value per share, 12,500,000 shares authorized, 6,782,006 and 6,720,453 shares issued and 6,624,197 and 6,573,103 shares outstanding, as of April 30, 2017 and October 31, 2016, respectively | 663 | 657 |
Additional paid-in capital | 60,028 | 59,119 |
Retained earnings | 140,014 | 136,742 |
Accumulated other comprehensive loss | (8,571) | (11,043) |
Total shareholders’ equity | 192,134 | 185,475 |
Total liabilities and shareholders’ equity | $ 261,369 | $ 251,949 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 30, 2017 | Oct. 31, 2016 |
Preferred stock, no par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, stated value per share | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 12,500,000 | 12,500,000 |
Common stock, shares issued | 6,782,006 | 6,720,453 |
Common stock, shares outstanding | 6,624,197 | 6,573,103 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Cash flows from operating activities: | ||||
Net income | $ 3,646 | $ 3,674 | $ 4,525 | $ 7,569 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities, net of acquisitions: | ||||
Provision for doubtful accounts | (30) | 7 | (11) | (45) |
Deferred income taxes | (170) | 440 | (547) | 909 |
Equity in (income) loss of affiliates | 31 | (108) | (192) | (258) |
Depreciation and amortization | 823 | 972 | 1,782 | 1,934 |
Foreign currency (gain) loss | 437 | (1,644) | 1,364 | (1,208) |
Unrealized (gain) loss on derivatives | 156 | 612 | (527) | 552 |
Stock-based compensation | 298 | 424 | 646 | 759 |
Change in assets and liabilities: | ||||
(Increase) decrease in accounts receivable | (3,519) | (522) | 12,975 | 1,961 |
(Increase) decrease in inventories | 867 | (10,017) | 393 | (16,273) |
(Increase) decrease in prepaid expenses | 886 | (688) | 227 | (1,705) |
Increase (decrease) in accounts payable | 2,687 | 943 | 5,472 | 2,400 |
Increase (decrease) in accrued expenses | 60 | (288) | (4,634) | (3,175) |
Net change in derivative assets and liabilities | 173 | 374 | 367 | 707 |
Other | (131) | (366) | (103) | (1,047) |
Net cash provided by (used for) operating activities | 6,214 | (6,187) | 21,737 | (6,920) |
Cash flows from investing activities: | ||||
Purchase of property and equipment | (200) | (510) | (998) | (1,145) |
Proceeds from sale of equipment | 0 | 232 | 0 | 236 |
Software development costs | (626) | (645) | (1,108) | (1,122) |
Net cash provided by (used for) investing activities | (826) | (923) | (2,106) | (2,031) |
Cash flows from financing activities: | ||||
Proceeds from exercise of common stock options | 269 | 0 | 269 | 0 |
Dividends paid | (661) | (595) | (1,253) | (1,120) |
Net cash provided by (used for) financing activities | (392) | (595) | (984) | (1,120) |
Effect of exchange rate changes on cash | 478 | 1,244 | 750 | 159 |
Net increase (decrease) in cash and cash equivalents | 5,474 | (6,461) | 19,397 | (9,912) |
Cash and cash equivalents at beginning of period | 55,140 | 51,786 | 41,217 | 55,237 |
Cash and cash equivalents at end of period | $ 60,614 | $ 45,325 | $ 60,614 | $ 45,325 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balances, Beginning at Oct. 31, 2015 | $ 174,568 | $ 655 | $ 57,539 | $ 125,760 | $ (9,386) |
Balances, Beginning (Shares) at Oct. 31, 2015 | 6,551,718 | ||||
Net income | 7,569 | $ 0 | 0 | 7,569 | 0 |
Other comprehensive loss | (1,029) | 0 | 0 | 0 | (1,029) |
Stock-based compensation | 759 | $ 2 | 757 | 0 | 0 |
Stock-based compensation (shares) | 21,385 | ||||
Dividends paid | (1,120) | $ 0 | 0 | (1,120) | 0 |
Balances, Ending at Apr. 30, 2016 | 180,747 | $ 657 | 58,296 | 132,209 | (10,415) |
Balances, Ending (Shares) at Apr. 30, 2016 | 6,573,103 | ||||
Balances, Beginning at Oct. 31, 2016 | 185,475 | $ 657 | 59,119 | 136,742 | (11,043) |
Balances, Beginning (Shares) at Oct. 31, 2016 | 6,573,103 | ||||
Net income | 4,525 | $ 0 | 0 | 4,525 | 0 |
Other comprehensive loss | 2,472 | 0 | 0 | 0 | 2,472 |
Exercise of common stock options | $ 269 | $ 1 | 268 | 0 | 0 |
Exercise of common stock options (Shares) | 12,164 | 12,164 | |||
Stock-based compensation | $ 646 | $ 5 | 641 | 0 | 0 |
Stock-based compensation (shares) | 38,930 | ||||
Dividends paid | (1,253) | $ 0 | 0 | (1,253) | 0 |
Balances, Ending at Apr. 30, 2017 | $ 192,134 | $ 663 | $ 60,028 | $ 140,014 | $ (8,571) |
Balances, Ending (Shares) at Apr. 30, 2017 | 6,624,197 |
GENERAL
GENERAL | 6 Months Ended |
Apr. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | 1. GENERAL The unaudited Condensed Consolidated Financial Statements include the accounts of Hurco Companies, Inc. and its consolidated subsidiaries. As used in this report, unless the context indicates otherwise, the terms “we”, “us”, “our” and similar language refer to Hurco Companies, Inc. and its consolidated subsidiaries as a whole. We design, manufacture and sell computerized (i.e., Computer Numeric Control) machine tools, consisting primarily of vertical machining centers (mills) and turning centers (lathes), to companies in the metal cutting industry through a worldwide sales, service and distribution network. 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. We also provide machine tool components, software options, control upgrades, accessories and replacement parts for our products, as well as customer service and training support. The condensed financial information as of April 30, 2017 and for the three and six months ended April 30, 2017 and April 30, 2016 is unaudited. However, in our opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, results of operations, changes in shareholders’ equity and cash flows for and at the end of the interim periods. We suggest that you read these condensed consolidated financial statements in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended October 31, 2016. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Apr. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 2. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We are exposed to certain market risks relating to our ongoing business operations, including foreign currency risk, interest rate risk and credit risk. We manage our exposure to these and other market risks through regular operating and financing activities. Currently, the only risk that we manage through the use of derivative instruments is foreign currency risk, for which we enter into derivative instruments in the form of foreign currency forward exchange contracts with a major financial institution. We enter into these forward exchange contracts to reduce the potential effects of foreign exchange rate movements on our net equity investment in one of our foreign subsidiaries, to reduce the impact on gross profit and net earnings from sales and purchases denominated in foreign currencies, and to reduce the impact on our net earnings of foreign currency fluctuations on receivables and payables denominated in foreign currencies that are different than the subsidiaries’ functional currency. We are primarily exposed to foreign currency exchange rate risk with respect to transactions and net assets denominated in Euros, Pounds Sterling, Indian Rupee, South African Rand, Singapore Dollars, Chinese Yuan, Polish Zloty, and New Taiwan Dollars. We record all derivative instruments as assets or liabilities at fair value. Derivatives Designated as Hedging Instruments We enter into foreign currency forward exchange contracts periodically to hedge certain forecasted inter-company sales and purchases denominated in foreign currencies (the Pound Sterling, Euro and New Taiwan Dollar). The purpose of these instruments is to mitigate the risk that the U.S. Dollar net cash inflows and outflows resulting from sales and purchases denominated in foreign currencies will be adversely affected by changes in exchange rates. These forward contracts have been designated as cash flow hedge instruments and are recorded in the Condensed Consolidated Balance Sheets at fair value in Derivative assets and Derivative liabilities. The effective portion of the gains and losses resulting from the changes in the fair value of these hedge contracts is deferred in Accumulated other comprehensive loss and recognized as an adjustment to Cost of sales and service in the period that the corresponding inventory sold that is the subject of the related hedge contract is recognized, thereby providing an offsetting economic impact against the corresponding change in the U.S. Dollar value of the inter-company sale or purchase being hedged. The ineffective portion of gains and losses resulting from the changes in the fair value of these hedge contracts is reported in Other (income) expense, net immediately. We perform quarterly assessments of hedge effectiveness by verifying and documenting the critical terms of the hedge instrument and determining that forecasted transactions have not changed significantly. We also assess on a quarterly basis whether there have been adverse developments regarding the risk of a counterparty default. We had forward contracts outstanding as of April 30, 2017, denominated in Euros, Pounds Sterling and New Taiwan Dollars with set maturity dates ranging from May 2017 through April 2018 23.7 7.3 21.5 1.6 372,000 We are also exposed to foreign currency exchange risk related to our investment in net assets in foreign countries. To manage this risk, we entered into a forward contract with a notional amount of € 3.0 809,000 14,000 Derivatives Not Designated as Hedging Instruments We also enter into foreign currency forward exchange contracts to protect against the effects of foreign currency fluctuations on receivables and payables denominated in foreign currencies. These derivative instruments are not designated as hedges under the FASB guidance and, as a result, changes in their fair value are reported currently as Other (income) expense, net in the Condensed Consolidated Statements of Income consistent with the transaction gain or loss on the related receivables and payables denominated in foreign currencies. We had forward contracts outstanding as of April 30, 2017, denominated in Euros, Pounds Sterling, South African Rand, and New Taiwan Dollars with set maturity dates ranging from May 2017 through October 2017 57.7 Fair Value of Derivative Instruments We recognize the fair value of derivative instruments as assets and liabilities on a gross basis on our Condensed Consolidated Balance Sheets. April 30, 2017 October 31, 2016 Balance Sheet Balance Sheet Derivatives Location Fair Value Location Fair Value Designated as Hedging Instruments: Foreign exchange forward contracts Derivative assets $ 997 Derivative assets $ 1,721 Foreign exchange forward contracts Derivative liabilities $ 442 Derivative liabilities $ 173 Not Designated as Hedging Instruments: Foreign exchange forward contracts Derivative assets $ 230 Derivative assets $ 4 Foreign exchange forward contracts Derivative liabilities $ 75 Derivative liabilities $ 365 Effect of Derivative Instruments on the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Income Derivative instruments had the following effects on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Income, net of tax, during the three months ended April 30, 2017 and 2016 (in thousands): Derivatives Amount of Gain Location of Amount of Gain (Loss) Three Months Ended Three Months Ended 2017 2016 2017 2016 Designated as Hedging Instruments: (Effective portion) Foreign exchange forward contracts Intercompany sales/purchases $ 95 $ (736) Cost of sales and service $ 317 $ 546 Foreign exchange forward contract Net investment $ (9) $ (116) We recognized a gain of $ 32,000 We recognized the following losses and gains in our Condensed Consolidated Statements of Income during the three months ended April 30, 2017 and 2016 on derivative instruments not designated as hedging instruments (in thousands): Location of Gain (Loss) Recognized Amount of Gain (Loss) Derivatives in Operations Recognized in Operations Three Months Ended April 30, Not Designated as Hedging Instruments: 2017 2016 Foreign exchange forward contracts Other (income) expense, net $ 165 $ (1,239) The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the three months ended April 30, 2017 (in thousands:) Foreign Cash Total Balance, January 31, 2017 $ (12,428) $ 1,820 $ (10,608) Other comprehensive income before reclassifications 2,259 95 2,354 Reclassifications (317) (317) Balance, April 30, 2017 $ (10,169) $ 1,598 $ (8,571) Derivative instruments had the following effects on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Income, net of tax, during the six months ended April 30, 2017 and 2016 (in thousands): Location of Gain (Loss) Amount of Gain Amount of Gain Reclassified (Loss) Reclassified (Loss) Recognized in from Other from Other Other Comprehensive Comprehensive Comprehensive Derivatives Income (Loss) Income (Loss) Income (Loss) Six Months Ended Six Months Ended April 30, April 30, 2017 2016 2017 2016 Designated as Hedging Instruments: (Effective portion) Foreign exchange forward contracts Intercompany sales/purchases $ 424 $ (567) Cost of sales and service $ 108 $ 1,474 Foreign exchange forward contract Net investment $ 30 $ (80) We recognized a gain of $ 168,000 32,000 We recognized the following losses and gains in our Condensed Consolidated Statements of Income during the six months ended April 30, 2017 and 2016 on derivative instruments not designated as hedging instruments (in thousands): Location of Gain (Loss) Recognized Amount of Gain (Loss) Derivatives in Operations Recognized in Operations Six Months Ended April 30, 2017 2016 Not Designated as Hedging Instruments: Foreign exchange forward contracts Other (income) expense, net $ 955 $ (1,100) The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the six months ended April 30, 2017 (in thousands:) Foreign Cash Currency Flow Translation Hedges Total Balance, October 31, 2016 $ (12,325) $ 1,282 $ (11,043) Other comprehensive income before reclassifications 2,156 424 2,580 Reclassifications (108) (108) Balance, April 30, 2017 $ (10,169) $ 1,598 $ (8,571) |
EQUITY INCENTIVE PLAN
EQUITY INCENTIVE PLAN | 6 Months Ended |
Apr. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY INCENTIVE PLAN | 3. EQUITY INCENTIVE PLAN In March 2016, we adopted the Hurco Companies, Inc. 2016 Equity Incentive Plan (the “2016 Equity Plan”), which allows us to grant awards of stock options, stock appreciation rights (“SARs”), restricted stock, stock units and other stock-based awards. The 2016 Equity Plan replaced the Hurco Companies, Inc. 2008 Equity Incentive Plan (the “2008 Plan”) and is the only active plan under which equity awards may be made by us to our employees and non-employee directors. No further awards will be made under our 2008 Plan. The total number of shares of our common stock that may be issued pursuant to awards under the 2016 Equity Plan is 856,048 386,048 The Compensation Committee of the Board of Directors has the authority to determine the officers, directors and key employees who will be granted awards under the 2016 Equity Plan; designate the number of shares subject to each award; determine the terms and conditions upon which awards will be granted; and prescribe the form and terms of award agreements. We have granted restricted shares and performance units under the 2016 Equity Plan that are currently outstanding, and we have granted stock options, restricted shares and performance shares under the 2008 Plan that are currently outstanding. No stock option may be exercised more than ten years after the date of grant or such shorter period as the Compensation Committee may determine at the date of grant. The market value of a share of our common stock, for purposes of the 2016 Equity Plan, is the closing sale price as reported by the Nasdaq Global Select Market on the date in question or, if not a trading day, on the last preceding trading date. A summary of stock option activity for the six-month period ended April 30, 2017, is as follows: Stock Weighted Outstanding at October 31, 2016 107,889 $ 20.25 Options granted Options exercised (12,164) 22.11 Options cancelled Outstanding at April 30, 2017 95,725 $ 20.01 Summarized information about outstanding stock options as of April 30, 2017, that have already vested and those that are expected to vest, as well as stock options that are currently exercisable, are as follows: Options Already Number of outstanding options 95,725 Weighted average remaining contractual life (years) 3.73 Weighted average exercise price per share $ 20.01 Intrinsic value of outstanding options $ 894,000 The intrinsic value of an outstanding stock option is calculated as the difference between the stock price as of April 30, 2017 and the exercise price of the option. On January 5, 2017, the Compensation Committee determined the degree to which the long-term incentive compensation arrangement approved for the fiscal 2014-2016 performance period was attained, and the resulting payout level relative to the target amount for each of the metrics that were established by the Compensation Committee in 2014. As a result, the Compensation Committee determined that a total of 30,683 33.90 On January 5, 2017 25 75 On that date, the Compensation Committee granted a total of 14,747 33.90 On January 5, 2017, the Compensation Committee also granted a total target number of 18,496 40 50 200 43.25 On January 5, 2017, the Compensation Committee also granted a total target number of 20,647 35 50 200 33.90 On March 9, 2017, the Compensation Committee granted a total of 14,920 26.80 A reconciliation of the Company’s restricted stock activity, performance share and PSU and related information for the six-month period ended April 30, 2017 is as follows: Weighted Average Number of Grant Date Shares Fair Value Unvested at October 31, 2016 147,350 $ 28.79 Shares or units granted 71,011 34.61 Shares or units vested (38,930) 26.98 Shares or units cancelled (7,678) 29.98 Shares withheld (13,944) 25.89 Unvested at April 30, 2017 157,809 $ 32.05 During the first six months of fiscal 2017 and 2016, we recorded $ 646,000 759,000 2.9 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Apr. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 4. EARNINGS PER SHARE Per share results have been computed based on the average number of common shares outstanding over the period in question. The computation of basic and diluted net income per share is determined using net income applicable to common shareholders as the numerator and the number of shares outstanding as the denominator as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended April 30, April 30, 2017 2016 2017 2016 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income $ 3,646 $ 3,646 $ 3,674 $ 3,674 $ 4,525 $ 4,525 $ 7,569 $ 7,569 Undistributed earnings allocated to participating shares (24) (24) (21) (21) (30) (30) (43) (43) Net income applicable to common shareholders $ 3,622 $ 3,622 $ 3,653 $ 3,653 $ 4,495 $ 4,495 $ 7,526 $ 7,526 Weighted average shares outstanding 6,617 6,617 6,570 6,570 6,600 6,600 6,564 6,564 Stock options and contingently issuable shares 54 71 64 66 6,617 6,671 6,570 6,641 6,600 6,664 6,564 6,630 Income per share $ 0.55 $ 0.54 $ 0.56 $ 0.56 $ 0 .68 $ 0.67 $ 1.15 $ 1.14 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Apr. 30, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | 5. ACCOUNTS RECEIVABLE Accounts receivable are net of allowances for doubtful accounts of $ 653,000 664,000 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Apr. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 6. INVENTORIES Inventories, priced at the lower of cost (first-in, first-out method) or market, are summarized below (in thousands): April 30, October 31, Purchased parts and sub-assemblies $ 28,430 $ 25,661 Work-in-process 18,065 17,724 Finished goods 72,358 73,640 $ 118,853 $ 117,025 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Apr. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 7. SEGMENT INFORMATION We operate in a single segment: industrial automation equipment. We design, manufacture and sell computerized machine tools, consisting primarily of vertical machining centers (mills) and turning centers (lathes), to companies in the metal cutting industry through a worldwide sales, service and distribution network. Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products. We also provide machine tool components, software options, control upgrades, accessories and replacement parts for our products, as well as customer service and training support. |
GUARANTEES AND PRODUCT WARRANTI
GUARANTEES AND PRODUCT WARRANTIES | 6 Months Ended |
Apr. 30, 2017 | |
Standard Product Warranty Disclosure [Abstract] | |
GUARANTEES AND PRODUCT WARRANTIES | 8. GUARANTEES AND PRODUCT WARRANTIES From time to time, our subsidiaries guarantee third party payment obligations in connection with the sale of machines to customers that use financing. We follow FASB guidance for accounting for guarantees (codified in ASC 460). As of April 30, 2017, we had 24 1.1 We provide warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year for machines and certain components and shorter periods for service parts. We recognize a reserve with respect to this obligation at the time of product sale, with subsequent warranty claims recorded against the reserve. The amount of the warranty reserve is determined based on historical trend experience and any known warranty issues that could cause future warranty costs to differ from historical experience. A reconciliation of the changes in our warranty reserve is as follows (in thousands): Six Months Ended 2017 2016 Balance, beginning of period $ 1,523 $ 2,186 Provision for warranties during the period 1,614 1,414 Charges to the reserve (1,605) (1,755) Impact of foreign currency translation 9 8 Balance, end of period $ 1,541 $ 1,853 The year-over-year decrease in our warranty reserve was primarily due to a reduction in average warranty cost per machine as our machines under warranty shifted from more complex, higher-performance machines. |
DEBT AGREEMENTS
DEBT AGREEMENTS | 6 Months Ended |
Apr. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT AGREEMENTS | 9. DEBT AGREEMENTS On December 7, 2012, we entered into an agreement (the “U.S. credit agreement”) with a financial institution that provided us with an unsecured revolving credit and letter of credit facility. The U.S. credit agreement contains customary financial covenants, including covenants (1) restricting us from making certain investments, loans, advances and acquisitions (but permitting us to make investments in subsidiaries of up to $ 5.0 On December 6, 2016, we entered into a fourth amendment to our U.S. credit agreement to, among other things, increase the unsecured revolving credit facility from $ 12.5 15.0 4.0 5.0 December 31, 2018 5.0 90.0 105.0 120.0 125.0 On February 16, 2017, we amended our credit facility in China to decrease the credit facility from 40.0 20.0 2.9 February 15, 2018 1.5 4.4 4.6 1.0 1.5 All of our credit facilities are unsecured. At April 30, 2017, we were in compliance with all covenants contained in the related credit agreements and, as of that date, we had unutilized credit facilities of $ 19.4 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Apr. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES Our effective tax rate for the first six months of fiscal 2017 was 31 28 2.0 2.9 Our unrecognized tax benefits were $ 1.2 1.1 We recognize accrued interest and penalties related to unrecognized tax benefits as components of income tax expense. As of April 30, 2017, the gross amount of interest accrued, reported in Accrued expenses and other, was approximately $ 62,000 We file U.S. federal and state income tax returns, as well as tax returns in several foreign jurisdictions. The statutes of limitations with respect to unrecognized tax benefits will expire between July 2017 and July 2019. We are under audit by the Internal Revenue Service (IRS) for our federal income tax return for fiscal year 2015. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 6 Months Ended |
Apr. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS FASB fair value guidance established a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exist, therefore, requiring an entity to develop its own assumptions. Assets Liabilities April 30, October 31, April 30, October 31, 2017 2016 2017 2016 Level 1 Deferred Compensation $ 1,508 $ 1,363 $ - $ - Level 2 Derivatives $ 1,227 $ 1,725 $ 517 $ 538 Included in Level 1 assets are mutual fund investments under a nonqualified deferred compensation plan. We estimate the fair value of these investments on a recurring basis using market prices that are readily available. Included in Level 2 fair value measurements are derivative assets and liabilities related to gains and losses on foreign currency forward exchange contracts entered into with a third party. We estimate the fair value of these derivatives on a recurring basis using foreign currency exchange rates obtained from active markets. Derivative instruments are reported in the accompanying condensed consolidated financial statements at fair value. We have derivative financial instruments in the form of foreign currency forward exchange contracts as described in Note 2 of Notes to the Condensed Consolidated Financial Statements. The U.S. Dollar equivalent notional amounts of these contracts was $ 112.5 125.6 1.2 1.7 0.5 0.5 The fair value of our foreign currency forward exchange contracts and the related currency positions are subject to offsetting market risk resulting from foreign currency exchange rate volatility. The counterparty to the forward exchange contracts is a substantial and creditworthy financial institution. We do not consider either the risk of counterparty non-performance or the economic consequences of counterparty non-performance as material risks. |
CONTINGENCIES AND LITIGATION
CONTINGENCIES AND LITIGATION | 6 Months Ended |
Apr. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND LITIGATION | 12. CONTINGENCIES AND LITIGATION We are involved in various claims and lawsuits arising in the normal course of business. Pursuant to applicable accounting rules, we accrue the minimum liability for each known claim when the estimated outcome is a range of possible loss and no one amount within that range is more likely than another. We maintain insurance policies for such matters, and we record insurance recoveries when we determine such recovery to be probable. We do not expect any of these claims, individually or in the aggregate, to have a material adverse effect on our consolidated financial position or results of operations. We believe that the ultimate resolution of claims for any losses will not exceed our insurance policy coverages. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Apr. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | 13. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. In January 2017, the FASB issued ASU No. 2017-04, IntangiblesGoodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, CompensationStock Compensation (Topic 718): Scope of Modification Accounting |
DERIVATIVE INSTRUMENTS AND HE22
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Apr. 30, 2017 | |
Schedule of Fair Value of Derivative Instruments | April 30, 2017 October 31, 2016 Balance Sheet Balance Sheet Derivatives Location Fair Value Location Fair Value Designated as Hedging Instruments: Foreign exchange forward contracts Derivative assets $ 997 Derivative assets $ 1,721 Foreign exchange forward contracts Derivative liabilities $ 442 Derivative liabilities $ 173 Not Designated as Hedging Instruments: Foreign exchange forward contracts Derivative assets $ 230 Derivative assets $ 4 Foreign exchange forward contracts Derivative liabilities $ 75 Derivative liabilities $ 365 |
Period One [Member] | |
Schedule of Changes in Components of Accumulated Other Comprehensive Loss | Foreign Cash Total Balance, January 31, 2017 $ (12,428) $ 1,820 $ (10,608) Other comprehensive income before reclassifications 2,259 95 2,354 Reclassifications (317) (317) Balance, April 30, 2017 $ (10,169) $ 1,598 $ (8,571) Foreign Cash Currency Flow Translation Hedges Total Balance, October 31, 2016 $ (12,325) $ 1,282 $ (11,043) Other comprehensive income before reclassifications 2,156 424 2,580 Reclassifications (108) (108) Balance, April 30, 2017 $ (10,169) $ 1,598 $ (8,571) |
Period One [Member] | Designated as Hedging Instrument [Member] | |
Schedule of Effect of Derivative Instruments on the Balance Sheets, Statements of Changes in Shareholders' Equity and Statements of Operations | Derivatives Amount of Gain Location of Amount of Gain (Loss) Three Months Ended Three Months Ended 2017 2016 2017 2016 Designated as Hedging Instruments: (Effective portion) Foreign exchange forward contracts Intercompany sales/purchases $ 95 $ (736) Cost of sales and service $ 317 $ 546 Foreign exchange forward contract Net investment $ (9) $ (116) Location of Gain (Loss) Amount of Gain Amount of Gain Reclassified (Loss) Reclassified (Loss) Recognized in from Other from Other Other Comprehensive Comprehensive Comprehensive Derivatives Income (Loss) Income (Loss) Income (Loss) Six Months Ended Six Months Ended April 30, April 30, 2017 2016 2017 2016 Designated as Hedging Instruments: (Effective portion) Foreign exchange forward contracts Intercompany sales/purchases $ 424 $ (567) Cost of sales and service $ 108 $ 1,474 Foreign exchange forward contract Net investment $ 30 $ (80) |
Period One [Member] | Not Designated as Hedging Instrument [Member] | |
Schedule of Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized Amount of Gain (Loss) Derivatives in Operations Recognized in Operations Three Months Ended April 30, Not Designated as Hedging Instruments: 2017 2016 Foreign exchange forward contracts Other (income) expense, net $ 165 $ (1,239) Location of Gain (Loss) Recognized Amount of Gain (Loss) Derivatives in Operations Recognized in Operations Six Months Ended April 30, 2017 2016 Not Designated as Hedging Instruments: Foreign exchange forward contracts Other (income) expense, net $ 955 $ (1,100) |
EQUITY INCENTIVE PLAN (Tables)
EQUITY INCENTIVE PLAN (Tables) | 6 Months Ended |
Apr. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | Stock Weighted Outstanding at October 31, 2016 107,889 $ 20.25 Options granted Options exercised (12,164) 22.11 Options cancelled Outstanding at April 30, 2017 95,725 $ 20.01 |
Schedule of Information about Outstanding Stock Options that have Already Vested and those that are Expected to Vest | Options Already Number of outstanding options 95,725 Weighted average remaining contractual life (years) 3.73 Weighted average exercise price per share $ 20.01 Intrinsic value of outstanding options $ 894,000 |
Reconciliation of Restricted Stock Activity and Related Information | Weighted Average Number of Grant Date Shares Fair Value Unvested at October 31, 2016 147,350 $ 28.79 Shares or units granted 71,011 34.61 Shares or units vested (38,930) 26.98 Shares or units cancelled (7,678) 29.98 Shares withheld (13,944) 25.89 Unvested at April 30, 2017 157,809 $ 32.05 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Apr. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Earnings Per Share | Three Months Ended Six Months Ended April 30, April 30, 2017 2016 2017 2016 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income $ 3,646 $ 3,646 $ 3,674 $ 3,674 $ 4,525 $ 4,525 $ 7,569 $ 7,569 Undistributed earnings allocated to participating shares (24) (24) (21) (21) (30) (30) (43) (43) Net income applicable to common shareholders $ 3,622 $ 3,622 $ 3,653 $ 3,653 $ 4,495 $ 4,495 $ 7,526 $ 7,526 Weighted average shares outstanding 6,617 6,617 6,570 6,570 6,600 6,600 6,564 6,564 Stock options and contingently issuable shares 54 71 64 66 6,617 6,671 6,570 6,641 6,600 6,664 6,564 6,630 Income per share $ 0.55 $ 0.54 $ 0.56 $ 0.56 $ 0 .68 $ 0.67 $ 1.15 $ 1.14 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Apr. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, priced at the lower of cost (first-in, first-out method) or market, are summarized below (in thousands): April 30, October 31, Purchased parts and sub-assemblies $ 28,430 $ 25,661 Work-in-process 18,065 17,724 Finished goods 72,358 73,640 $ 118,853 $ 117,025 |
GUARANTEES AND PRODUCT WARRAN26
GUARANTEES AND PRODUCT WARRANTIES (Tables) | 6 Months Ended |
Apr. 30, 2017 | |
Standard Product Warranty Disclosure [Abstract] | |
Reconciliation of Warranty Reserve | A reconciliation of the changes in our warranty reserve is as follows (in thousands): Six Months Ended 2017 2016 Balance, beginning of period $ 1,523 $ 2,186 Provision for warranties during the period 1,614 1,414 Charges to the reserve (1,605) (1,755) Impact of foreign currency translation 9 8 Balance, end of period $ 1,541 $ 1,853 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Apr. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Fair Value | In accordance with this guidance, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value as of April 30, 2017 and October 31, 2016 (in thousands): Assets Liabilities April 30, October 31, April 30, October 31, 2017 2016 2017 2016 Level 1 Deferred Compensation $ 1,508 $ 1,363 $ - $ - Level 2 Derivatives $ 1,227 $ 1,725 $ 517 $ 538 |
DERIVATIVE INSTRUMENTS AND HE28
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Apr. 30, 2017 | Oct. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 1,227 | $ 1,725 |
Derivative liabilities | 517 | 538 |
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 997 | 1,721 |
Derivative liabilities | 442 | 173 |
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 230 | 4 |
Derivative liabilities | $ 75 | $ 365 |
DERIVATIVE INSTRUMENTS AND HE29
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Effect of Derivative Instruments on Consolidated Balance Sheets, Statements of Changes in Shareholders' Equity and Statements of Operations) (Details) - Foreign Exchange Forward [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Designated as Hedging Instrument [Member] | Intercompany sales/purchases [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 95 | $ (736) | $ 424 | $ (567) |
Designated as Hedging Instrument [Member] | Cost of Sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Other Comprehensive Income (Loss) | 317 | 546 | 108 | 1,474 |
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | (9) | (116) | 30 | (80) |
Not Designated as Hedging Instrument [Member] | Other Income And Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Operations | $ 165 | $ (1,239) | $ 955 | $ (1,100) |
DERIVATIVE INSTRUMENTS AND HE30
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Changes in Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Derivative [Line Items] | ||||
Beginning Balance | $ (10,608) | $ (11,043) | ||
Other comprehensive income before reclassifications | 2,354 | 2,580 | ||
Reclassifications | (317) | $ (546) | (108) | $ (1,474) |
Ending Balance | (8,571) | (8,571) | ||
Foreign Currency Translation [Member] | ||||
Derivative [Line Items] | ||||
Beginning Balance | (12,428) | (12,325) | ||
Other comprehensive income before reclassifications | 2,259 | 2,156 | ||
Reclassifications | 0 | 0 | ||
Ending Balance | (10,169) | (10,169) | ||
Cash Flow Hedges [Member] | ||||
Derivative [Line Items] | ||||
Beginning Balance | 1,820 | 1,282 | ||
Other comprehensive income before reclassifications | 95 | 424 | ||
Reclassifications | (317) | (108) | ||
Ending Balance | $ 1,598 | $ 1,598 |
DERIVATIVE INSTRUMENTS AND HE31
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Narrative) (Details) € in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2016EUR (€) | Apr. 30, 2017USD ($) | Apr. 30, 2016USD ($) | Apr. 30, 2017USD ($) | Apr. 30, 2016USD ($) | Oct. 31, 2016USD ($) | |
Derivative financial instruments: | ||||||
Notional principal of foreign exchange contracts | $ 112,500,000 | $ 112,500,000 | $ 125,600,000 | |||
(Losses) gains, net of tax, related to cash flow hedges deferred in Accumulated Other Comprehensive Loss | 1,600,000 | 1,600,000 | ||||
Unrealized gain (loss), net of tax, to be reclassified in next 12 months | 372,000 | 372,000 | ||||
Gain (loss) on hedge ineffectiveness | 32,000 | $ 32,000 | 168,000 | $ 32,000 | ||
Not Designated as Hedging Instrument [Member] | ||||||
Derivative financial instruments: | ||||||
Notional principal of foreign exchange contracts | 57,700,000 | 57,700,000 | ||||
Forward Contracts [Member] | Designated as Hedging Instrument [Member] | ||||||
Derivative financial instruments: | ||||||
Realized gain on net investment hedge | 809,000 | |||||
Notional amount of derivatives designated as net investment hedge | € | € 3 | |||||
Unrealized gain (loss), net of tax, recorded as cumulative translation adjustments in Accumulated Other Comprehensive Loss | (14,000) | $ (14,000) | ||||
Derivative maturity date | May 2017 through April 2018 | |||||
Forward Contracts [Member] | Not Designated as Hedging Instrument [Member] | ||||||
Derivative financial instruments: | ||||||
Derivative maturity date | May 2017 through October 2017 | |||||
Euros [Member] | Designated as Hedging Instrument [Member] | ||||||
Derivative financial instruments: | ||||||
Notional principal of foreign exchange contracts | 23,700,000 | $ 23,700,000 | ||||
Pounds Sterling [Member] | Designated as Hedging Instrument [Member] | ||||||
Derivative financial instruments: | ||||||
Notional principal of foreign exchange contracts | 7,300,000 | 7,300,000 | ||||
New Taiwan Dollars [Member] | Designated as Hedging Instrument [Member] | ||||||
Derivative financial instruments: | ||||||
Notional principal of foreign exchange contracts | $ 21,500,000 | $ 21,500,000 |
EQUITY INCENTIVE PLAN (Summary
EQUITY INCENTIVE PLAN (Summary of Stock Option Activity and Related Information) (Details) | 6 Months Ended |
Apr. 30, 2017$ / sharesshares | |
Stock Options | |
Outstanding | shares | 107,889 |
Options granted | shares | 0 |
Options exercised | shares | (12,164) |
Options cancelled | shares | 0 |
Outstanding | shares | 95,725 |
Weighted Average Exercise Price | |
Outstanding | $ / shares | $ 20.25 |
Options granted | $ / shares | 0 |
Options exercised | $ / shares | 22.11 |
Options cancelled | $ / shares | 0 |
Outstanding | $ / shares | $ 20.01 |
EQUITY INCENTIVE PLAN (Schedule
EQUITY INCENTIVE PLAN (Schedule of Information about Outstanding Stock Options Vested and Expected to Vest) (Details) | 6 Months Ended |
Apr. 30, 2017USD ($)$ / sharesshares | |
Options Currently Exercisable | |
Number of outstanding options | shares | 95,725 |
Weighted average remaining contractual life (years) | 3 years 8 months 23 days |
Weighted average exercise price per share | $ / shares | $ 20.01 |
Intrinsic value of outstanding options | $ | $ 894,000 |
EQUITY INCENTIVE PLAN (Reconcil
EQUITY INCENTIVE PLAN (Reconciliation of Restricted Stock Activity and Related Information) (Details) | 6 Months Ended |
Apr. 30, 2017$ / sharesshares | |
Number of Shares | |
Unvested at October 31, 2016 | shares | 147,350 |
Shares or units granted | shares | 71,011 |
Shares or units vested | shares | (38,930) |
Shares or units cancelled | shares | (7,678) |
Shares withheld | shares | (13,944) |
Unvested at April 30, 2017 | shares | 157,809 |
Weighted Average Grant Date Fair Value | |
Unvested at October 31, 2016 | $ / shares | $ 28.79 |
Shares or units granted | $ / shares | 34.61 |
Shares or units vested | $ / shares | 26.98 |
Shares or units cancelled | $ / shares | 29.98 |
Shares withheld | $ / shares | 25.89 |
Unvested at April 30, 2017 | $ / shares | $ 32.05 |
EQUITY INCENTIVE PLAN (Narrativ
EQUITY INCENTIVE PLAN (Narrative) (Details) - USD ($) | Mar. 10, 2017 | Mar. 09, 2017 | Jan. 05, 2017 | Apr. 30, 2017 | Apr. 30, 2016 | Oct. 31, 2016 | Mar. 10, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 646,000 | $ 759,000 | |||||
Unrecognized Stock-based compensation expense | $ 2,900,000 | ||||||
Restricted stock granted | 71,011 | ||||||
Grant date fair value of restricted stock | $ 32.05 | $ 28.79 | |||||
Weighted Average Grant Date Fair Value | $ 26.98 | ||||||
2016 Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period of options granted | 10 years | ||||||
Total number of shares of common stock that may be issued as awards under 2016 Plan | 856,048 | ||||||
2008 Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of Shares Available for Grant under the 2008 Plan | 386,048 | ||||||
Long-term Incentive Compensation [Member] | Executive Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock granted | 30,683 | ||||||
Vesting Date | Jan. 5, 2017 | ||||||
Weighted Average Grant Date Fair Value | $ 33.90 | ||||||
Time Based [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock granted | 14,747 | ||||||
Grant date fair value of restricted stock | $ 33.90 | ||||||
Vesting period | 1 year | ||||||
Percentage of incentive compensation arrangement | 25.00% | ||||||
Time Based [Member] | 2016 Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock granted | 14,920 | ||||||
Grant date fair value of restricted stock | $ 26.80 | ||||||
Performance Based [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Percentage of incentive compensation arrangement | 75.00% | ||||||
Performance Based [Member] | PSU TSR [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock granted | 18,496 | ||||||
Grant date fair value of restricted stock | $ 43.25 | ||||||
Percentage of incentive compensation arrangement | 40.00% | ||||||
Performance Based [Member] | PSU TSR [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of incentive compensation arrangement | 200.00% | ||||||
Performance Based [Member] | PSU TSR [Member] | Minimum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of incentive compensation arrangement | 50.00% | ||||||
Performance Based [Member] | PSU ROIC [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock granted | 20,647 | ||||||
Grant date fair value of restricted stock | $ 33.90 | ||||||
Percentage of incentive compensation arrangement | 35.00% | ||||||
Performance Based [Member] | PSU ROIC [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of incentive compensation arrangement | 200.00% | ||||||
Performance Based [Member] | PSU ROIC [Member] | Minimum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of incentive compensation arrangement | 50.00% |
EARNINGS PER SHARE (Reconciliat
EARNINGS PER SHARE (Reconciliation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income | $ 3,646 | $ 3,674 | $ 4,525 | $ 7,569 |
Undistributed earnings allocated to participating shares | (24) | (21) | (30) | (43) |
Net income applicable to common shareholders | $ 3,622 | $ 3,653 | $ 4,495 | $ 7,526 |
Weighted average shares outstanding, Basic | 6,617 | 6,570 | 6,600 | 6,564 |
Stock options and contingently issuable shares | 54 | 71 | 64 | 66 |
Weighted average shares outstanding, Diluted | 6,671 | 6,641 | 6,664 | 6,630 |
Income per share, Basic | $ 0.55 | $ 0.56 | $ 0.68 | $ 1.15 |
Income per share, Diluted | $ 0.54 | $ 0.56 | $ 0.67 | $ 1.14 |
ACCOUNTS RECEIVABLE (Narrative)
ACCOUNTS RECEIVABLE (Narrative) (Details) - USD ($) | Apr. 30, 2017 | Oct. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for Doubtful Accounts Receivable | $ 653,000 | $ 664,000 |
INVENTORIES (Schedule Of Invent
INVENTORIES (Schedule Of Inventory Current) (Details) - USD ($) $ in Thousands | Apr. 30, 2017 | Oct. 31, 2016 |
Inventory [Line Items] | ||
Purchased parts and sub-assemblies | $ 28,430 | $ 25,661 |
Work-in-process | 18,065 | 17,724 |
Finished goods | 72,358 | 73,640 |
Inventories | $ 118,853 | $ 117,025 |
GUARANTEES AND PRODUCT WARRAN39
GUARANTEES AND PRODUCT WARRANTIES (Reconciliation of the changes in our warranty reserve) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2017 | Apr. 30, 2016 | |
Product Warranty Liability [Line Items] | ||
Balance, beginning of period | $ 1,523 | $ 2,186 |
Provision for warranties during the period | 1,614 | 1,414 |
Charges to the reserve | (1,605) | (1,755) |
Impact of foreign currency translation | 9 | 8 |
Balance, end of period | $ 1,541 | $ 1,853 |
GUARANTEES AND PRODUCT WARRAN40
GUARANTEES AND PRODUCT WARRANTIES (Narrative) (Details) $ in Millions | 6 Months Ended |
Apr. 30, 2017USD ($) | |
Product Warranty Liability [Line Items] | |
Number Of Guarantees | 24 |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 1.1 |
Term of Product Warranty | 1 year |
DEBT AGREEMENTS (Narrative) (De
DEBT AGREEMENTS (Narrative) (Details) € in Millions, ¥ in Millions, £ in Millions, $ in Millions | Dec. 06, 2016USD ($) | Dec. 07, 2012USD ($) | Feb. 16, 2017USD ($) | Apr. 30, 2017USD ($) | Apr. 30, 2017EUR (€) | Apr. 30, 2017GBP (£) | Feb. 16, 2017CNY (¥) | Feb. 15, 2017CNY (¥) | Dec. 05, 2016USD ($) | Oct. 31, 2016 |
Line of Credit Facility [Line Items] | ||||||||||
Borrowings available under credit facility | $ 19.4 | |||||||||
Letter of Credit [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit, maximum borrowing capacity | $ 5 | |||||||||
Revolving Credit Facility [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit, maximum borrowing capacity | 15 | $ 12.5 | ||||||||
Maximum dividends allowable | 5 | 4 | ||||||||
Minimum working capital requirement | 105 | 90 | ||||||||
Minimum tangible net worth requirement | $ 125 | $ 120 | ||||||||
Line of Credit, interest rate description | Borrowings under our U.S. credit agreement bear interest either at a LIBOR-based rate or a floating rate, in each case with an interest rate floor of 0.00%. The floating rate equals the greatest of (a)a one month LIBOR-based rate plus 1.00% per annum, (b)the federal funds effective rate plus 0.50% per annum, (c) the prevailing prime rate and (d) 0.00%. The rate we must pay for that portion of the U.S. credit agreement which is not utilized is 0.05% per annum. | |||||||||
Line of credit, maturity date | Dec. 31, 2018 | |||||||||
Allowable investments in subsidiaries | $ 5 | |||||||||
Revolving Credit Facility [Member] | United Kingdom [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit, maximum borrowing capacity | £ | £ 1 | |||||||||
Revolving Credit Facility [Member] | Germany [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit, maximum borrowing capacity | € | € 1.5 | |||||||||
Revolving Credit Facility [Member] | China [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit, maximum borrowing capacity | $ 2.9 | ¥ 20 | ¥ 40 | |||||||
Line of credit, maturity date | Feb. 15, 2018 | |||||||||
Interest rate | 4.40% | 4.40% | 4.40% | 4.60% | ||||||
Long-term Line of Credit | $ 1.5 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | Oct. 31, 2016 | |
Income Tax Contingency [Line Items] | |||||
Unrecognized tax benefits, interest accrued | $ 62,000 | $ 62,000 | |||
Effective Income Tax Rate Reconciliation, Percent, Total | 31.00% | 28.00% | |||
Unrecognized Tax Benefits Expiration Term | expire between July 2017 and July 2019. | ||||
Income Tax Expense (Benefit) | 1,467,000 | $ 1,225,000 | $ 2,010,000 | $ 2,934,000 | |
Unrecognized Tax Benefits, Ending Balance | $ 1,200,000 | $ 1,200,000 | $ 1,100,000 |
FINANCIAL INSTRUMENTS (Fair val
FINANCIAL INSTRUMENTS (Fair value hierarchy) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Apr. 30, 2017 | Oct. 31, 2016 |
Level 1 [Member] | ||
Assets | ||
Deferred Compensation | $ 1,508 | $ 1,363 |
Liabilities | ||
Deferred Compensation | 0 | 0 |
Level 2 [Member] | ||
Assets | ||
Derivatives | 1,227 | 1,725 |
Liabilities | ||
Derivatives | $ 517 | $ 538 |
FINANCIAL INSTRUMENTS (Narrativ
FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) $ in Thousands | Apr. 30, 2017 | Oct. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notional amount of contracts | $ 112,500 | $ 125,600 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets | ||
Derivatives | 1,227 | 1,725 |
Liabilities | ||
Derivatives | $ 517 | $ 538 |