What changed in this filing

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Item 1. Financial Statements

2025-06-06 compared with 2025-03-07 · 131 added, 62 removed, 414 unchanged (32% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Sales and service fees

7 unchanged sentences

(Loss) income before income taxes

(Benefit) provision for income taxes

Provision (benefit) for income taxes

Net (loss) income

7 unchanged sentences

Three Months Ended

Six Months Ended

Net (loss) income

2 unchanged sentences

(Gain) / loss on derivative instruments reclassified into operations, net of tax (expense)/ benefit of $ 86 , $ 121 , $ 242 and $ 185 , respectively

Gain / (loss) on derivative instruments, net of tax of ($ 29 ) and $ 5 , respectively

Gain / (loss) on derivative instruments, net of tax expense (benefit) of ($ 123 ), ($ 192 ), ($ 152 ) and ($ 187 ), respectively

Total other comprehensive (loss) income

45 unchanged sentences

no par value, $ .10 stated value per share, 12,500,000 shares authorized;

6,644,286 and 6,548,838 shares issued and 6,483,990 and 6,435,624 shares outstanding, as of January 31, 2025 and October 31, 2024, respectively

6,674,154 and 6,548,838 shares issued and 6,506,868 and 6,435,624 shares outstanding, as of April 30, 2025 and October 31, 2024, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Cash flows from operating activities:

24 unchanged sentences

Software development costs

Other investments

Net cash provided by (used for) investing activities

4 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

(In thousands, except shares outstanding)

Three Months Ended January 31, 2025 and 2024

Three Months Ended April 30, 2025 and 2024

Comprehensive

Income (Loss)

Balances, October 31, 2023

Balances, January 31, 2024

Net income (loss)

2 unchanged sentences

Dividends paid

Balances, April 30, 2024

Balances, January 31, 2025

Net income (loss)

Other comprehensive income (loss)

Deferred income tax valuation allowances

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Balances, April 30, 2025

Six Months Ended April 30, 2025 and 2024

Comprehensive

Income (Loss)

Balances, October 31, 2023

2 unchanged sentences

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Balances, January 31, 2025

Dividends paid

Balances, April 30, 2024

Balances, October 31, 2024

Net income (loss)

Other comprehensive income (loss)

Deferred income tax valuation allowances

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Balances, April 30, 2025

The accompanying notes are an integral part of the condensed consolidated financial statements.

8 unchanged sentences

We also provide machine tool components, automation integration equipment and solutions for job shops, software options, control upgrades, accessories and replacement parts for our products, as well as customer service, training, and applications support.

The condensed consolidated financial information as of January 31, 2025 and for the three months ended January 31, 2025 and January 31, 2024 is unaudited.

The condensed consolidated financial information as of April 30, 2025 and for the three and six months ended April 30, 2025, and April 30, 2024 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.

41 unchanged sentences

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 January 31, 2025, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from February 2025 through January 2026 .

We had forward contracts outstanding as of April 30, 2025, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from May 2025 through April 2026 .

The contract amounts, expressed at forward rates in U.S.

dollars at January 31, 2025, were $ 7.1 million for Euros, $ 4.7 million for Pounds Sterling, and $ 16.3 million for New Taiwan Dollars.

At January 31, 2025, we had $ 0.1 million of realized loss, net of tax, related to cash flow hedges deferred in Accumulated other comprehensive loss.

dollars at April 30, 2025, were $ 6.9 million for Euros, $ 4.2 million for Pounds Sterling, and $ 15.0 million for New Taiwan Dollars.

At April 30, 2025, we had $ 0.5 million of realized loss, net of tax, related to cash flow hedges deferred in Accumulated other comprehensive loss.

Included in this amount was $ 0.4 million of unrealized loss, net of tax, related to cash flow hedge instruments that remain subject to currency fluctuation risk.

The majority of these deferred gains will be recorded as an adjustment to Cost of sales and service in periods through January 2026, when the corresponding inventory that is the subject of the related hedge contracts is sold, as described above.

The majority of these deferred gains will be recorded as an adjustment to Cost of sales and service in periods through April 2026, when the corresponding inventory that is the subject of the related hedge contracts is sold, as described above.

We are also exposed to foreign currency exchange risk related to our investment in net assets in foreign countries.

4 unchanged sentences

This forward contract matures in November 2025 .

As of January 31, 2025, we had a realized gain of $ 1.2 million and an unrealized gain of $ 0.1 million, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive loss related to this forward contract.

As of April 30, 2025, we had a realized gain of $ 1.2 million and an unrealized loss of $ 0.1 million, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive loss related to this forward contract.

Derivatives Not Designated as Hedging Instruments

1 unchanged sentence

These derivative instruments are not designated as hedges under FASB guidance and, as a result, changes in their fair value are reported currently in Other (expense) income, net in the Condensed Consolidated Statements of Operations consistent with the transaction gain or loss on the related receivables and payables denominated in foreign currencies.

We had forward contracts outstanding as of January 31, 2025, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from February 2025 through December 2025 .

We had forward contracts outstanding as of April 30, 2025, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from May 2025 through December 2025 .

The contract amounts, expressed at forward rates in U.S.

dollars at January 31, 2025, totaled $ 62.3 million.

dollars at April 30, 2025, totaled $ 63.8 million.

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.

As of January 31, 2025 and October 31, 2024, all derivative instruments were recorded at fair value on our Condensed Consolidated Balance Sheets as follows (in thousands):

January 31, 2025

As of April 30, 2025 and October 31, 2024, all derivative instruments were recorded at fair value on our Condensed Consolidated Balance Sheets as follows (in thousands):

April 30, 2025

October 31, 2024

16 unchanged sentences

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Operations

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 Operations, net of tax, during the three months ended January 31, 2025 and 2024 (in thousands):

Location of Gain

19 unchanged sentences

– Net investment

We did not recognize any gains or losses as a result of hedges deemed ineffective for either of the three months ended January 31, 2025 or 2024.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the three months ended January 31, 2025 and 2024 on derivative instruments not designated as hedging instruments (in thousands):

We did not recognize any gains or losses as a result of hedges deemed ineffective for either of the three months ended April 30, 2025 or 2024.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the three months ended April 30, 2025 and 2024 on derivative instruments not designated as hedging instruments (in thousands):

Location of Gain

7 unchanged sentences

Other (expense) income, net

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the three months ended January 31, 2025 (in thousands):

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the three months ended April 30, 2025 (in thousands):

Foreign Currency

Balance, January 31, 2025

Other comprehensive income (loss) before reclassifications

Reclassifications

Deferred income tax valuation allowances

Balance, April 30, 2025

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 Operations, net of tax, during the six months ended April 30, 2025 and 2024 (in thousands):

Location of Gain

Amount of Gain

Amount of Gain (Loss)

(Loss) Reclassified

Recognized in Other

Comprehensive

Income (Loss)

Six Months Ended

Designated as Hedging Instruments:

(Effective Portion)

Foreign exchange forward contracts

– Intercompany sales/purchases

Cost of sales and service

Foreign exchange forward contract

– Net investment

We did not recognize any gains or losses as a result of hedges deemed ineffective for either of the six months ended April 30, 2025 or 2024.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the six months ended April 30, 2025 and 2024 on derivative instruments not designated as hedging instruments (in thousands):

Location of Gain

(Loss) Recognized

Amount of Gain (Loss)

in Operations

Recognized in Operations

Six Months Ended

Not Designated as Hedging Instruments:

Foreign exchange forward contracts

Other (expense) income, net

The following table presents the changes in the components of Accumulated other comprehensive loss, net of tax, for the six months ended April 30, 2025 (in thousands):

Balance, October 31, 2024

2 unchanged sentences

Deferred income tax valuation allowances

Balance, January 31, 2025

Balance, April 30, 2025

EQUITY INCENTIVE PLAN

7 unchanged sentences

2016 Equity Incentive Plan, which, among other items, increased the aggregate number of shares that may be issued under the 2016 Equity Plan by 850,000 shares.

On March 13, 2025, our shareholders approved an amendment to the 2016 Equity Plan, which, once again, increased by 850,000 the aggregate number of shares that may be issued thereunder.

The Compensation Committee of our Board of Directors has the authority to determine the officers, directors, and key employees who will be granted awards under the 2016 Equity Plan;

4 unchanged sentences

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.

On January 7, 2025, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of time-based restricted shares and performance stock units (“PSUs”) under the 2016 Equity Plan, which will be payable in shares of our common stock if earned and vested.

On March 13, 2025, the Compensation Committee granted a total of 29,868 shares of time-based restricted stock to our non-employee directors.

The restricted shares vest in full one year from the date of grant provided the recipient remains on the board of directors through that date.

The grant date fair value of the restricted shares was based on the closing sales price of our common stock on the grant date, which was $ 16.07 per share.

On January 7, 2025, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of time-based restricted shares and performance stock units (“PSUs”), which will be payable in shares of our common stock if earned and vested.

The awards were approximately 45 % time-based vesting and approximately 55 % performance-based vesting.

6 unchanged sentences

Participants will have the ability to earn between 50 % of the target number of the PSUs – NI for achieving threshold performance and 200 % of the target number of the PSUs – NI for achieving maximum performance.

The grant date fair value of the PSUs – NI was based on the closing sales price of our common stock on grant date, which was $ 19.81 per PSU.

The grant date fair value of the PSUs – NI was based on the closing sales price of our common stock on the grant date, which was $ 19.81 per PSU.

On January 7, 2025, the Compensation Committee also granted a total target number of 41,735 PSUs to our executive officers designated as “PSU –FCF”.

5 unchanged sentences

The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $ 21.80 per share.

A reconciliation of our restricted stock and PSU activity and related information for the three-month period ended January 31, 2025 is as follows:

A reconciliation of our restricted stock and PSU activity and related information for the six-month period ended April 30, 2025 is as follows:

Weighted Average Grant

6 unchanged sentences

Shares withheld

Unvested at January 31, 2025

During each of the first three months of fiscal 2025 and 2024, we recorded approximately $ 0.6 million, of stock-based compensation expense related to grants under the 2016 Equity Plan.

As of January 31, 2025, there was an estimated $ 5.2 million of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal year 2028.

Unvested at April 30, 2025

During the first six months of fiscal 2025 and 2024, we recorded approximately $ 1.1 million and $ 0.8 million, respectively, of stock-based compensation expense related to grants under the 2016 Equity Plan.

As of April 30, 2025, there was an estimated $ 4.1 million of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal year 2028.

EARNINGS (LOSS) PER SHARE

2 unchanged sentences

Three Months Ended

Six Months Ended

Net (loss) income

4 unchanged sentences

(Loss) income per share

For the three and six months ended April 30, 2025, there were an immaterial number of stock options and contingently issuable securities that were excluded from the diluted loss per share calculation because they were anti-dilutive due to the net loss in the period.

ACCOUNTS RECEIVABLE

Accounts receivable is net of provision for credit losses of $ 1.5 million as of each of January 31, 2025 and October 31, 2024.

Accounts receivable is net of provision for credit losses of $ 1.5 million as of each of April 30, 2025 and October 31, 2024.

Inventories, priced at the lower of cost (first-in, first-out method) or net realizable value, are summarized below (in thousands):

8 unchanged sentences

In determining the lease liability, we utilize our incremental borrowing rate to discount the future lease payments over the lease term to present value.

We record a right-of-use asset and lease liability on our Consolidated Balance Sheets for all leases that, at the commencement date, have a lease term of more than 12 months and are classified as leases under ASC 842.

We recorded total operating lease expense of $ 1.3 million for each of the three months ended January 31, 2025 and 2024, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Condensed Consolidated Statements of Operations.

We record a right-of-use asset and lease liability on our Condensed Consolidated Balance Sheets for all leases that, at the commencement date, have a lease term of more than 12 months and are classified as leases under ASC 842.

We recorded total operating lease expense of $ 1.4 million and $ 1.5 million for the three months ended April 30, 2025 and 2024, respectively, and $ 2.7 million and $ 2.8 million for the six months ended April 30, 2025 and 2024, respectively, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Condensed Consolidated Statements of Operations.

Operating lease expense includes short-term leases and variable lease payments which are immaterial.

There have been no lease costs capitalized on the Condensed Consolidated Balance Sheets as of January 31, 2025.

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for the three months ended January 31, 2025 and 2024 (in thousands):

Three Months Ended

January 31, 2025

January 31, 2024

There were no lease costs capitalized on the Condensed Consolidated Balance Sheets as of April 30, 2025.

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for the three and six months ended April 30, 2025 and 2024 (in thousands):

Three Months Ended April 30,

Six Months Ended April 30,

Operating cash flow information:

Cash paid for amounts included in the measurement of lease liabilities

Cash paid for amounts included in the

measurement of lease liabilities

Non-cash information:

Right-of-use assets obtained in exchange for new operating lease liabilities

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of January 31, 2025 (in thousands):

Right-of-use assets obtained in exchange for

new operating lease liabilities

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of April 30, 2025 (in thousands):

Remainder of 2025

2 unchanged sentences

Present value of operating lease liabilities

As of January 31, 2025, the weighted-average remaining term of our lease portfolio was approximately 3.7 years and the weighted-average discount rate was approximately 3.5 %.

As of April 30, 2025, the weighted-average remaining term of our lease portfolio was approximately 3.6 years and the weighted-average discount rate was approximately 3.5 %.

SEGMENT INFORMATION

5 unchanged sentences

The following table sets forth sales and service fees by product group and services for the fiscal quarter ended January 31, 2025 and 2024 (dollars in thousands):

Three Months Ended January 31,

The following table sets forth sales and service fees by product group and services for the three and six months ended April 30, 2025 and 2024 (in thousands):

Three Months Ended April 30,

Six Months Ended April 30,

Computerized Machine Tools

5 unchanged sentences

We follow FASB guidance for accounting for guarantees (codified in ASC 460 Guarantees).

As of January 31, 2025, we had eight outstanding third party payment guarantees totaling approximately $ 0.8 million.

As of April 30, 2025, we had seven outstanding third party payment guarantees totaling approximately $ 0.8 million.

The terms of these guarantees are consistent with the underlying customer financing terms.

8 unchanged sentences

A reconciliation of the changes in our warranty estimated liability is as follows (in thousands):

Three Months Ended

Six Months Ended

Balance, beginning of period

3 unchanged sentences

Balance, end of period

The year-over-year decrease in our warranty reserve was primarily due to a lower volume of more complexed, higher-performance machine sales.

The year-over-year decrease in our warranty estimated liability was primarily due to a lower sales volume of more complex, higher-performance machines.

DEBT AGREEMENTS

18 unchanged sentences

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 January 31, 2025, 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.

As of January 31, 2025, there were no borrowings under any of our credit facilities and there was approximately $ 50.6 million of available borrowing capacity thereunder.

As of April 30, 2025, 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.

As of April 30, 2025, there were no borrowings under any of our credit facilities and there was approximately $ 50.8 million of available borrowing capacity thereunder.

There were also no borrowings under any of our credit facilities as of October 31, 2024.

Our provision for income taxes and effective tax rate is affected by the geographic composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates, and other events that are not consistent from period to period, such as changes in income tax laws.

We recorded an income tax expense during the first three months of fiscal 2025 of $ 2.0 million, compared to an income tax benefit $ 0.6 million, for the same period in fiscal 2024.

Our effective tax rate for the first three months of fiscal 2025 was ( 90 %), compared to 27 % in the corresponding prior year period.

Our provision for income taxes and effective tax rate is affected by the geographic composition of pre-tax income that includes jurisdictions with differing tax rates, conditional reduced tax rates, and other events that are not consistent from period to period, such as changes in income tax laws.

We recorded an income tax expense during the first six months of fiscal 2025 of $ 2.6 million, compared to an income tax benefit of $ 0.6 million, for the same period in fiscal 2024.

Our effective tax rate for the first six months of fiscal 2025 was ( 44 %), compared to 9 % in the corresponding prior year period.

The year-over-year change was primarily due to a $ 3.7 million non-cash valuation allowance recorded on our Italian, 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.

and Chinese 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.

Because we have a valuation allowance recorded against our Italian, U.S.

and China deferred tax assets, we did not record a tax benefit of $ 1.2 million for our U.S., Italy and China pre-tax losses for the three months ended January 31, 2025.

The valuation allowance recorded during the first quarter of fiscal 2025 reflected a full valuation allowance and was recorded based on our conclusion that the deferred tax assets were not more likely than not going to be realized.

Our unrecognized tax benefits were $ 28,000 as of each of January 31, 2025 and October 31, 2024, and in each case included accrued interest.

and Chinese deferred tax assets, we did not record a tax benefit of $ 2.4 million for our U.S., Italian and Chinese pre-tax losses for the six months ended April 30, 2025.

The valuation allowance recorded during the first six months of fiscal 2025 reflected a full valuation allowance and was recorded based on our conclusion that the deferred tax assets were not more likely than not going to be realized.

Our unrecognized tax benefits were $ 28,000 as of each of April 30, 2025 and October 31, 2024, and in each case included accrued interest.

We recognize accrued interest and penalties related to unrecognized tax benefits as components of income tax expense.

As of January 31, 2025, the gross amount of interest accrued, reported in Accrued expenses, was approximately $ 7,000 , which did not include the federal tax benefit of interest deductions.

As of April 30, 2025, the gross amount of interest accrued, reported in Accrued expenses, was approximately $ 8,000 , which did not include the U.S.

federal tax benefit of interest deductions.

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 this fiscal year.

Currently, our manufacturing subsidiary in Italy is under tax audit for fiscal year 2021.

FINANCIAL INSTRUMENTS

6 unchanged sentences

The carrying amount of short-term debt approximates fair value due to the variable rate of the interest and the short-term nature of the instrument.

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 January 31, 2025 and October 31, 2024 (in thousands):

January 31, 2025

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, 2025 and October 31, 2024 (in thousands):

April 30, 2025

October 31, 2024

January 31, 2025

April 30, 2025

October 31, 2024

4 unchanged sentences

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 3 of Notes to the Condensed Consolidated Financial Statements.

dollar equivalent notional amounts of these contracts were $ 95.6 million and $ 85.1 million at January 31, 2025 and October 31, 2024, respectively.

We have derivative financial instruments in the form of foreign currency forward exchange contracts as described in Note 3 of Notes to Condensed Consolidated Financial Statements.

dollar equivalent notional amounts of these contracts were $ 90.8 million and $ 85.1 million at April 30, 2025 and October 31, 2024, respectively.

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.

21 unchanged sentences

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires companies to disclose disaggregated information about any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories, as applicable:

(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (“DD&A”) recognized as part of oil- and gas-producing activities or other depletion expenses.

(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other depletion expenses.

This update will be effective for our fiscal year 2028 annual reporting.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements