Hutchinson Technology Reports Fourth Quarter Results

Hutchinson Technology Reports Fourth Quarter Results

Program Ramps Partially Offsetting Market Weakness

HUTCHINSON, Minn., Nov. 8, 2012 (GLOBE NEWSWIRE) -- Hutchinson Technology
Incorporated (Nasdaq:HTCH) today reported a net loss of $14.7 million, or
$0.62 per share, on net sales of $63.6 million for its fiscal fourth quarter
ended September 30, 2012. Excluding certain items, the company's non-GAAP net
loss for the quarter was $13.0 million or $0.54 per share.

In the preceding quarter, the company reported a net loss of $13.9 million, or
$0.59 per share, on net sales of $61.0 million. Excluding certain items, the
non-GAAP net loss in the preceding quarter was $14.6 million, or $0.62 per
share. For a detailed reconciliation of GAAP to non-GAAP results, see
accompanying financial statements.

The company's suspension assembly shipments totaled 105.2 million in the
14-week fiscal 2012 fourth quarter, down 2 percent on a weekly shipment basis
compared with 100.1 million in the 13-week fiscal 2012 third quarter.
Decreased shipments of suspensions for enterprise applications were partially
offset by an increase in shipments of suspensions for mobile applications.

Industry sources estimate that disk drive shipments in the quarter ended in
September declined by approximately 11 percent compared with the preceding
quarter."Increased allocations on existing programs and participation on new
program ramps are helping us offset near-term market weakness," said Rick
Penn, Hutchinson Technology's president and chief executive officer.

Average selling price in the fiscal 2012 fourth quarter was $0.58, flat with
both the preceding quarter and the prior year's fourth quarter.Dual-stage
actuated (DSA) suspensions, which carry a higher selling price and are
costlier to manufacture, increased to 5 percent of the company's product mix
from 1 percent in the preceding quarter. The company expects its product mix
to continue to shift toward DSA suspensions for new disk drive programs
throughout fiscal 2013.

The company incurred a gross loss of $0.2 million in the fiscal 2012 fourth
quarter, an improvement of $1.0 million compared to the preceding
quarter.Despite lower production volume and resulting lower fixed cost
leverage than in the preceding quarter, gross margin benefited from a higher
mix of TSA+ suspensions and from measures taken to control costs, including a
one-week shutdown in early July.

Penn said that about half of the pre-flood production capacity at the
company's Thailand assembly operation is now installed."We are ramping our
Thai operations as planned and program qualifications are in progress," said
Penn."We currently expect to have approximately one-half of our total
assembly output coming from our Thailand assembly operation by the end of our
fiscal 2013 third quarter."

Cash and investments at the end of the 2012 fourth quarter totaled $54.9
million, down from $61.7 million at the end of the preceding quarter.Cash
generated by operations totaled $2.5 million in the fiscal 2012 fourth
quarter, and capital expenditures totaled $6.3 million.For fiscal 2013, the
company currently estimates capital spending will total $15 million to $20
million.

Regarding the company's outlook, Penn said the company expects fiscal 2013
first quarter suspension assembly shipments to be 100 million to 105 million,
an increase of 2 to 7 percent on a weekly basis compared with the 14-week
fiscal 2012 fourth quarter. Hard disk drive shipments in this period are
expected to be about flat with the preceding quarter. "Overall, we are
encouraged by our position on new and existing disk drive programs," said
Penn. "Looking ahead, we expect our financial results to benefit from higher
volume and improved fixed cost leverage, increased adoption of DSA
suspensions, the cost advantages we will realize as we increase output from
our Thailand assembly operation, and our continued focus on cost reduction."

Hutchinson Technology to Host Conference Call

The company will conduct a conference call and webcast for investors beginning
at 4:00 p.m. Central Time today. Individual investors and news media may
participate in the conference call live via the webcast, which will be
available through the Investor Relations page on Hutchinson Technology's web
site at www.htch.com/investors.Webcast participants will need to complete a
brief registration form and should allow extra time before the webcast begins
to register and, if necessary, download and install audio software.

About Hutchinson Technology

Hutchinson Technology is a global technology leader committed to creating
value by developing solutions to critical customer problems.The company's
Disk Drive Components Division is a key worldwide supplier of suspension
assemblies for disk drives. The company's BioMeasurement Division is focused
on bringing new technologies and products to the market that provide
information clinicians can use to improve the quality of health care and
reduce costs.

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements, including statements
regarding demand for and shipments of disk drives, disk drive components and
the company's products, product mix, production capability and costs,
operating performance, assembly operations in Thailand, cost reductions,
capital spending and financial results.The company does not undertake to
update its forward-looking statements.These statements involve risks and
uncertainties.The company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of changes in
market demand and market consumption of disk drives or suspension assemblies,
changes in demand for our products, market acceptance of new products, the
company's ability to produce suspension assemblies at levels of precision,
quality, volume and cost its customers require, changes in product mix,
changes in customers yields, changes in storage capacity requirements, changes
in expected data density, changes in the company's ability to operate its
assembly operation in Thailand, changes in the company's ability to reduce
costs and other factors described from time to time in the company's reports
filed with the Securities and Exchange Commission.

Hutchinson Technology Incorporated
Condensed Consolidated Statements of Operations - Unaudited
(In thousands, except per share data)
                                                             
                      Fourteen      Thirteen      Fifty-Three   Fifty-Two
                       Weeks Ended   Weeks Ended   Weeks Ended   Weeks Ended
                      September 30, September 25, September 30, September 25,
                       2012          2011          2012          2011
                                                             
                                                             
Net sales              $63,626     $74,385     $248,589    $278,090
Cost of sales          63,867        69,249        245,068       267,739
Gross (loss) profit    (241)         5,136         3,521         10,351
                                                             
Research and           4,088         3,107         16,474        14,592
development expenses
Selling, general and
administrative         6,866         7,931         28,398        40,844
expenses
Severance and other    --          352          (711)        6,745
expenses
Debt refinancing costs 201          --          4,127        --
Flood-related costs,
(net of insurance      546          --          (4,640)      --
recoveries)
Loss from operations   (11,942)      (6,254)       (40,127)      (51,830)
                                                             
Other income, net      1,273         211           1,646         1,868
Gain on extinguishment --          2,915        5,897        8,382
of long-term debt
Interest Income        39            74            131           188
Interest expense       (4,016)       (4,054)       (16,551)      (15,065)
Gain on short- and     --          --          567          978
long-term investments
Loss before income     (14,646)      (7,108)       (48,437)      (55,479)
taxes
                                                             
Provision for income   85           85            205           86
taxes
                                                             
Net loss               $(14,731)   $(7,193)    $(48,642)   $(55,565)
                                                             
Basic loss per share   $(0.62)     $(0.31)     $(2.06)     $(2.38)
                                                             
Diluted loss per share $(0.62)     $(0.31)     $(2.06)     $(2.38)
                                                             
Weighted-average
common shares          23,884        23,383        23,565        23,377
outstanding
                                                             
Weighted-average
diluted shares         23,884        23,383        23,565        23,377
outstanding


Hutchinson Technology Incorporated
Condensed Consolidated Balance Sheets - Unaudited
(In thousands, except shares data)
                                                               
                                                  September 30, September 25,
                                                   2012          2011
ASSETS                                                          
Current assets:                                                 
Cash and cash equivalents                          $53,653     $57,554
Short-term investments - restricted                1,200         1,612
Trade receivables, net                             21,438        44,998
Other receivables                                  3,880         7,064
Inventories                                        41,432        55,018
Other current assets                               7,203         4,312
Total current assets                               128,806       170,558
Property, plant and equipment, net                 202,468       223,134
Other assets                                       5,014         7,313
                                                  $336,288    $401,005
LIABILITIES AND SHAREHOLDERS' INVESTMENT                        
Current liabilities:                                            
Current maturities of long-term debt, net of       $11,698     $10,681
discount
Accounts payable                                   13,982        18,373
Accrued expenses                                   6,350         7,759
Accrued compensation                               9,656         12,431
Total current liabilities                          41,686        49,244
Long-term debt, net of discount                    125,232       144,159
Other long-term liabilities                        1,540         1,280
Shareholders' equity:                                           
Common stock $.01 par value, 100,000,000 shares
authorized, 23,900,000 and 23,387,000 issued and   239           234
outstanding
Additional paid-in capital                         430,448       419,984
Accumulated other comprehensive (loss) income      (129)         190
Accumulated loss                                   (262,728)     (214,086)
Total shareholders' equity                         167,830       206,322
                                                  $336,288    $401,005


Hutchinson Technology Incorporated
Condensed Consolidated Statements of Cash Flows - Unaudited
(Dollars in thousands)
                                                               
                                                  Fifty-Three   Fifty-Two
                                                   Weeks Ended   Weeks Ended
                                                  September 30, September 25,
                                                   2012          2011
Operating activities:                                           
Net loss                                           $(48,642)   $(55,565)
Adjustments to reconcile net loss to cash provided              
by (used for) operating activities:
Depreciation and amortization                      41,459        48,086
Stock-based compensation                           1,979         1,870
Gain on short- and long-term investments           (567)         (978)
Loss on disposal of assets                         418           1,182
Asset impairment charge                            8,537        --
Non-cash interest expense                          5,467         7,576
Gain on extinguishment of debt                     (5,897)       (8,382)
Severance and other expenses                       (1,741)      1,741
Changes in operating assets and liabilities        37,079        1,932
Cash provided by (used for) operating activities  38,092        (2,538)
                                                               
Investing activities:                                           
Capital expenditures                               (27,880)      (13,506)
Change in restricted cash                          (2,799)       (2,620)
Purchases of marketable securities                 (2,813)       (12,412)
Sales / maturities of marketable securities        3,789         60,440
Cash (used for) provided by investing activities  (29,703)      31,902
                                                               
Financing activities:                                           
Proceeds from issuance of common stock             --          2
Repayments of revolving credit line                (311,771)    (4,932)
Proceeds from revolving credit line                301,362      15,341
Repayments of debt                                 (37,154)     (34,370)
Proceeds from private placement of debt            39,400       --
Debt refinancing costs                             (4,127)      (3,490)
Cash used for financing activities                (12,290)      (27,449)
                                                               
Net (decrease) increase in cash and cash           (3,901)       1,915
equivalents
                                                               
Cash and cash equivalents at beginning of period   57,554        55,639
                                                               
Cash and cash equivalents at end of period         $53,653     $57,554


Hutchinson Technology Incorporated
Earnings Per Share Calculation - Unaudited
(In thousands, except per share data)
                                                             
                      Fourteen      Thirteen      Fifty-Three   Fifty-Two
                       Weeks Ended   Weeks Ended   Weeks Ended   Weeks Ended
                      September 30, September 25, September 30, September 25,
                       2012          2011          2012          2011
                                                             
Net loss (A)           $(14,731)   $(7,193)    $(48,642)   $(55,565)
                                                             
Weighted average
common shares          23,884        23,383        23,565        23,377
outstanding (B)
Dilutive potential     --          --          --          --
common shares
                                                             
Weighted average
common and diluted     23,884        23,383        23,565        23,377
shares outstanding (C)
                                                             
Basic loss per share   $(0.62)     $(0.31)     $(2.06)     $(2.38)
[(A)/(B)]
Diluted loss per share $(0.62)     $(0.31)     $(2.06)     $(2.38)
[(A)/(C)]


Hutchinson Technology Incorporated
Reconciliation of Non-GAAP to GAAP Financial Measures - Unaudited
(In thousands, except per share data)
                                                            
                                Fourteen         Thirteen     Thirteen
                                 Weeks Ended      Weeks Ended  Weeks Ended
                                September 30,    June 24,     September 25,
                                 2012             2012         2011
                                                            
Net loss - GAAP                  $(14,731)      $(13,890)  $(7,193)
Add flood-related costs          546             3,647       --
Add severance and other expenses --              --          352
Add debt refinancing costs       201             426         --
Subtract gain on extinguishment  --              (5,897)     (2,915)
of debt
Add accelerated depreciation     --              --          152
Add non-cash interest expenses   980             1,095       1,685
Net loss - Adjusted              $(13,004)      $(14,619)  $(7,919)
                                                            
                                                            
Net loss per common share –                                  
GAAP:
                                                            
Basic loss per share             $(0.62)        $(0.59)    $(0.31)
Diluted loss per share           $(0.62)        $(0.59)    $(0.31)
                                                            
Net loss per common share –                                  
Adjusted:
                                                            
Basic loss per share             $(0.54)        $(0.62)    $(0.34)
Diluted loss per share           $(0.54)        $(0.62)    $(0.34)
                                                            
Weighted average common and
common equivalent shares                                     
outstanding:
                                                            
Basic                            23,884           23,575       23,383
Diluted                          23,884           23,575       23,383
                                                            
Net loss per common share basic and diluted, is calculated by dividing net
income by weighted average common and common equivalent shares outstanding
basic and diluted, respectively.

CONTACT: INVESTOR CONTACT:
         Chuck Ives
         Hutchinson Technology Inc.
         320-587-1605
        
         MEDIA CONTACT:
         Connie Pautz
         Hutchinson Technology Inc.
         320-587-1823

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