RELATED PARTY TRANSACTIONS

12 Months Ended

Oct. 31, 2018

9. RELATED PARTY TRANSACTIONS

As of October 31, 2018, we owned approximately 35% of the outstanding shares of a Taiwanese

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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 $4.0 million and $3.6 million at October 31, 2018 and 2017, respectively, is included in Investments and other assets, net on the Consolidated Balance Sheets. Purchases of controls from HAL amounted to $11.3 million, $10.0 million and $9.9 million in fiscal 2018, 2017 and 2016, respectively. Sales of control component parts to HAL were $197,000, $139,000 and $623,000 for the fiscal years ended October 31, 2018, 2017 and 2016, respectively. Trade payables to HAL were $3.4 million and $2.5 million at October 31, 2018 and 2017, respectively. Trade receivables from HAL were $68,000 and $30,000 at October 31, 2018 and 2017, respectively.

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

	2018		2017		2016

Net Sales	$	17,841	$	15,800	$	13,948
Gross Profit		2,944		2,457		2,240
Operating Income		1,534		1,037		952
Net Income		1,845		1,320		1,323

Current Assets	$	12,870	$	11,310	$	10,238
Non – current Assets		4,579		4,440		3,733
Current Liabilities		4,666		3,916		2,572