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 Hutchinson Technology Incorporated Logo
Hutchinson Technology Reports Fourth Quarter Results
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