RELATED PARTY TRANSACTIONS

12 Months Ended

Oct. 31, 2017

9. RELATED PARTY TRANSACTIONS

As of October 31, 2017, 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 $3.6 million at October 31, 2017 and 2016, respectively, is included in Investments and other assets, net on the Consolidated Balance Sheets. Purchases of controls from HAL amounted to $10.0 million, $9.9 million and $8.9 million in fiscal 2017, 2016 and 2015, respectively. Sales of control component parts to HAL were $139,000, $623,000 and $723,000 for the fiscal years ended October 31, 2017, 2016 and 2015, respectively. Trade payables to HAL were $2.5 million and $2.0 million at October 31, 2017 and 2016, respectively. Trade receivables from HAL were $30,000 and $94,000 at October 31, 2017 and 2016, respectively.

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

	2017		2016		2015

Net Sales	$	15,800	$	13,948	$	12,852
Gross Profit		2,457		2,240		2,041
Operating Income		1,037		952		665
Net Income		1,320		1,323		1,546

Current Assets	$	11,310	$	10,238	$	10,262
Non-current Assets		4,440		3,733		3,087
Current Liabilities		3,916		2,572		3,472