Hutchinson Technology Reports First Quarter Results Program Ramps Continue to Partially Offset Market Weakness HUTCHINSON, Minn., Jan. 29, 2013 (GLOBE NEWSWIRE) -- Hutchinson Technology Incorporated (Nasdaq:HTCH) today reported a net loss of $6.5 million, or $0.27 per share, on net sales of $63.7 million for its fiscal 2013 first quarter ended December 30, 2012. Results for the quarter included $1.0 million of severance costs and $1.0 million of non-cash interest expense. Excluding these items, the company's first quarter net loss was $4.5 million, or $0.19 per share. In the preceding quarter, the company reported a net loss of $14.7 million, or $0.62 per share, on net sales of $63.6 million. Excluding certain items, the non-GAAP net loss in the preceding quarter was $13.0 million, or $0.54 per share. A detailed reconciliation of GAAP to non-GAAP results is provided in the accompanying financial statements. The company's suspension assembly shipments totaled 103.6 million in the 13-week fiscal 2013 first quarter, up 6% on a weekly shipment basis compared with 105.2 million in the 14-week fiscal 2012 fourth quarter. "As in the preceding quarter, our shipments benefited from our market share positions on both existing and new customer programs even as worldwide disk drive and suspension assembly demand remained soft," said Rick Penn, Hutchinson Technology's president and chief executive officer. Average selling price in the fiscal 2013 first quarter was $0.60, up from $0.58 in the preceding quarter, due to a higher mix of both development and high volume dual-stage actuated (DSA) suspensions and suspensions for enterprise applications.DSA suspensions, which carry a higher selling price and cost more to manufacture, increased to 9% of the company's first quarter product mix from 5% in the preceding quarter. The company expects its product mix to continue to shift toward DSA suspensions throughout fiscal 2013. Gross profit in the fiscal 2013 first quarter was $7.4 million, or 11.6% of net sales, compared with a gross loss of $0.2 million in the preceding quarter. Compared with the fiscal 2012 fourth quarter, gross profit benefited from improved absorption of fixed costs due to higher weekly volume, continued efforts to reduce costs, increased shipments of higher-priced development products and increased scrap recoveries. TSA+ suspensions accounted for 85% of first quarter shipments, unchanged from the preceding quarter."We are very pleased with the levels of quality and output we are realizing from our existing TSA+ and DSA capacity," said Penn."Our manufacturing proficiency is enabling us to meet increasing customer demand for DSA suspensions." Penn said that the company's operation in Thailand accounted for 18% of assembly production in the fiscal first quarter. "We have qualified additional products at our Thailand site and remain on track to have about one-half of our total assembly output produced there by the end of our fiscal 2013 third quarter," said Penn. Cash and investments at the end of the 2013 first quarter totaled $57.5 million, up $2.6 million compared with the preceding quarter. Cash used by operations totaled $1.6 million in the fiscal 2013 first quarter, while capital spending totaled $5.1 million.Outstanding borrowings on the company's revolving line of credit totaled $4.1 million at the end of the fiscal 2013 first quarter compared with none at the end of the preceding quarter. After the end of the fiscal 2013 first quarter, as previously announced, the company issued $12.2 million of 10.875% Senior Secured Second Lien Notes due 2017 and used the proceeds to repurchase $18.7 million of its 8.50% Convertible Senior Notes. This reduced the company's outstanding debt with a first put date in 2015 from $58.5 million to $39.8 million. Combined with the planned redemption in the fiscal 2013 second quarter of the remaining $11.9 million of its 3.25% Convertible Subordinated Notes, the total principal amount of the company's outstanding long-term debt will be reduced to $131.0 million from $149.3 million. Regarding the company's outlook, Penn said the company expects its fiscal 2013 second quarter suspension assembly shipments to range from 95 million to 105 million, anticipating slightly lower demand for disk drives and a delay in some program ramps to the second half of fiscal 2013. Gross profit is expected to decline on the lower volume in the second quarter and on lower shipments of development products. "Looking beyond the second quarter," said Penn, "we expect our financial results to benefit from higher volume and improved fixed cost leverage, increased adoption of our DSA suspensions, the cost benefits of our TSA+ process, further cost reductions as we transition more assembly volume to Thailand and continued consolidation and streamlining of our U.S. operations." Hutchinson Technology to Host Conference Call The company will conduct a conference call and webcast for investors beginning at 4:30 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, operations in Thailand and the United States, cost reductions, outstanding debt 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) Thirteen Weeks Thirteen Weeks Ended Ended December 30, December 25, 2012 2011 Net sales $63,699 $58,475 Cost of sales 56,278 56,174 Gross profit 7,421 2,301 Research and development expenses 3,339 3,948 Selling, general and administrative expenses 6,166 7,173 Severance and other expenses 1,018 (711) Flood-related costs, (net of insurance -- -- recoveries) Loss from operations (3,102) (8,109) Other income (expense), net 472 (87) Interest Income 50 17 Interest expense (4,023) (4,283) Gain on short- and long-term investments 127 30 Loss before income taxes (6,476) (12,432) Provision for income taxes 46 44 Net loss $(6,522) $(12,476) Basic loss per share $(0.27) $(0.53) Diluted loss per share $(0.27) $(0.53) Weighted-average common shares outstanding 23,951 23,395 Weighted-average diluted shares outstanding 23,951 23,395 Hutchinson Technology Incorporated Condensed Consolidated Balance Sheets - Unaudited (In thousands, except shares data) December 30, September 30, 2012 2012 ASSETS Current assets: Cash and cash equivalents $56,300 $53,653 Short-term investments - restricted 1,200 1,200 Trade receivables, net 23,998 21,438 Other receivables 6,735 3,880 Inventories 46,844 41,432 Other current assets 3,433 7,203 Total current assets 138,510 128,806 Property, plant and equipment, net 199,280 202,468 Other assets 4,929 5,014 Total assets $342,719 $336,288 LIABILITIES AND SHAREHOLDERS' INVESTMENT Current liabilities: Current maturities of long-term debt, net of $15,968 $11,514 discount Current portion of capital lease 424 184 Accounts payable 17,950 13,982 Accrued expenses 8,950 6,350 Accrued compensation 9,066 9,656 Total current liabilities 52,358 41,686 Long-term debt, net of discount 126,091 125,232 Capital lease obligation 1,213 -- Other long-term liabilities 1,600 1,540 Shareholders' equity: Common stock $.01 par value, 100,000,000 shares authorized, 24,046,000 and 23,900,000 issued and 240 239 outstanding Additional paid-in capital 430,536 430,448 Accumulated other comprehensive loss (69) (129) Accumulated loss (269,250) (262,728) Total shareholders' equity 161,457 167,830 Total liabilities and shareholders' equity $342,719 $336,288 Hutchinson Technology Incorporated Condensed Consolidated Statements of Cash Flows - Unaudited (Dollars in thousands) Thirteen Thirteen Weeks Ended Weeks Ended December 30, December 25, 2012 2011 Operating activities: Net loss $(6,522) $(12,476) Adjustments to reconcile net loss to cash (used for) provided by operating activities: Depreciation and amortization 9,596 9,334 Stock-based compensation 88 388 Gain on short- and long-term investments (127) (30) Loss on disposal of assets 62 (38) Asset impairment charge -- 8,338 Non-cash interest expense 1,020 1,672 Severance and other expenses 387 (1,624) Flood insurance receivable -- (4,727) Changes in operating assets and liabilities (6,068) 11,665 Cash (used for) provided by operating activities (1,564) 12,502 Investing activities: Capital expenditures (5,063) (5,384) Change in restricted cash 3,400 (2) Purchases of marketable securities (1,200) (1,613) Sales / maturities of marketable securities 1,327 2,055 Cash used for investing activities (1,536) (4,944) Financing activities: Repayments of capital lease (47) (88) Proceeds from sale/leaseback 1,685 -- Repayments of revolving credit line (58,648) (65,131) Proceeds from revolving credit line 62,757 54,722 Proceeds from issuance of common stock -- 20 Cash provided by (used for) financing activities 5,747 (10,477) Net increase (decrease) in cash and cash equivalents 2,647 (2,919) Cash and cash equivalents at beginning of period 53,653 57,554 Cash and cash equivalents at end of period $56,300 $54,635 Hutchinson Technology Incorporated Loss Per Share Calculation - Unaudited (In thousands, except per share data) Thirteen Weeks Thirteen Weeks Ended Ended December 30, December 25, 2012 2011 Net loss (A) $(6,522) $(12,476) Weighted average common shares outstanding (B) 23,951 23,395 Dilutive potential common shares -- -- Weighted average common and diluted shares 23,951 23,395 outstanding (C) Basic loss per share [(A)/(B)] $(0.27) $(0.53) Diluted loss per share [(A)/(C)] $(0.27) $(0.53) Hutchinson Technology Incorporated Reconciliation of Non-GAAP to GAAP Financial Measures - Unaudited (In thousands, except per share data) Thirteen Weeks Fourteen Thirteen Weeks Ended Weeks Ended Ended December 30, September 30, December 25, 2012 2012 2011 Net loss - GAAP $(6,522) $(14,731) $(12,476) Add flood-related costs -- 546 13,727 Subtract flood insurance -- -- (13,727) recoveries Add severance and other 1,018 -- -- expenses Subtract severance and other -- -- (711) expenses Add debt refinancing costs -- 201 -- Add non-cash interest expenses 1,020 980 1,672 Net loss - Adjusted $(4,484) $(13,004) $(11,515) Net loss per common share – GAAP: Basic loss per share $(0.27) $(0.62) $(0.53) Diluted loss per share $(0.27) $(0.62) $(0.53) Net loss per common share – Adjusted: Basic loss per share $(0.19) $(0.54) $(0.49) Diluted loss per share $(0.19) $(0.54) $(0.49) Weighted average common and common equivalent shares outstanding: Basic 23,951 23,884 23,395 Diluted 23,951 23,884 23,395 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 First Quarter Results
Press spacebar to pause and continue. Press esc to stop.