RELATED PARTY TRANSACTIONS

12 Months Ended

Oct. 31, 2016

10.

RELATED PARTY TRANSACTIONS

As of October 31, 2016, we owned approximately 35% of the outstanding shares of a Taiwanese-based contract manufacturer, Hurco Automation, Ltd. (“HAL”). HAL’s scope of activities includes the design, manufacture, sales and distribution of industrial automation products, software systems and related components, including control systems and components produced under contract for sale exclusively to us. We are accounting for this investment using the equity method. The investment of $3.6 million and $3.0 million at October 31, 2016 and 2015, respectively, is included in Investments and other assets, net on the Consolidated Balance Sheets. Purchases of controls from HAL amounted to $9.9 million, $8.9 million and $9.3 million in fiscal 2016, 2015 and 2014, respectively. Sales of control component parts to HAL were $623,000, $723,000 and $1.4 million for the fiscal years ended October 31, 2016, 2015 and 2014, respectively. Trade payables to HAL were $2.0 million and $1.8 million at October 31, 2016 and 2015, respectively. Trade receivables from HAL were $94,000 and $55,000 at October 31, 2016 and 2015, respectively.

Summary unaudited financial information for HAL’s operations and financial condition is as follows (in thousands):

	2016		2015		2014

Net Sales	$	13,948	$	12,852	$	12,063
Gross Profit		2,240		2,041		1,759
Operating Income		952		665		468
Net Income		1,323		1,546		1,264

Current Assets	$	10,238	$	10,262	$	10,469
Non-current Assets		3,733		3,087		3,065
Current Liabilities		2,572		3,472		3,637