HURCO COMPANIES INC Leases Disclosure
12. LEASES
Our lease portfolio includes leased production and assembly facilities, warehouses and distribution centers, office space, vehicles, material handling equipment utilized in our production and assembly facilities, laptops and other information technology equipment, as well as other miscellaneous leased equipment. Most of the leased production and assembly facilities have lease terms ranging from to five years, although the terms and conditions of our leases can vary significantly from lease to lease. We have assessed the specific terms and conditions of each lease to determine the amount of the lease payments and the length of the lease term, which includes the minimum period over which lease payments are required plus any renewal options that are both within our control to exercise and reasonably certain of being exercised upon lease commencement. In determining whether or not a renewal option is reasonably certain of being exercised, we assessed all relevant factors to determine if sufficient incentives exist as of lease commencement to conclude renewal is reasonably certain. There are no material residual value guarantees provided by us, nor any restrictions or covenants imposed by the leases to which we are a party. 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 for the fiscal years ended October 31, 2025 2024, and 2023 of $5.4 million, $5.4 million, and $5.2 million, respectively, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Consolidated Statements of Operations. Operating lease expense includes short-term leases and variable lease payments, which are immaterial. There has been no cost to obtain leases capitalized on the Consolidated Balance Sheets as of October 31, 2025.
The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for fiscal years 2025, 2024 and 2023 (in thousands):
2025 | 2024 | 2023 | ||||||||
Operating cash flow information: | ||||||||||
Cash paid for amounts included in the | $ | 5,064 | $ | 4,950 | $ | 4,770 | ||||
Non-cash information: | ||||||||||
Right-of-use assets obtained in exchange for | $ | 4,763 | $ | 4,929 | $ | 7,485 |
The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of October 31, 2025 (in thousands):
2026 | | $ | 4,712 |
2027 |
|
| 3,777 |
2028 |
|
| 2,458 |
2029 |
|
| 784 |
2030 | 405 | ||
2031 and thereafter |
|
| 538 |
Total |
|
| 12,674 |
Less: Imputed interest | (740) | ||
Present value of operating lease liabilities | $ | 11,934 |
As of October 31, 2025, the weighted-average remaining term of our lease portfolio was approximately 3.3 years, and the weighted-average discount rate was approximately 3.3%.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 9, 2026 | Showing above |
| 2024 | Jan 10, 2025 | |
| 2023 | Jan 5, 2024 | |
| 2022 | Jan 6, 2023 | |
| 2021 | Jan 7, 2022 | |
| 2020 | Jan 8, 2021 | |
| 2018 | Jan 4, 2019 | |
| 2017 | Jan 5, 2018 | |
| 2016 | Jan 6, 2017 | |
| 2015 | Jan 8, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.