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
Ended |
Thirteen Weeks
Ended |
|
December 30,
2012 |
December 25,
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,
2012 |
September 30,
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 discount |
$ 15,968 |
$ 11,514 |
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 outstanding |
240 |
239 |
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 Weeks
Ended |
Thirteen Weeks
Ended |
|
December 30,
2012 |
December 25,
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
Ended |
Thirteen Weeks
Ended |
|
December 30,
2012 |
December 25,
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 outstanding (C) |
23,951 |
23,395 |
|
|
|
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
Ended |
Fourteen Weeks
Ended |
Thirteen Weeks
Ended |
|
December 30,
2012 |
September 30,
2012 |
December 25,
2011 |
|
|
|
|
Net loss - GAAP |
$ (6,522) |
$ (14,731) |
$ (12,476) |
Add flood-related
costs |
-- |
546 |
13,727 |
Subtract flood
insurance recoveries |
-- |
-- |
(13,727) |
Add severance and other
expenses |
1,018 |
-- |
-- |
Subtract severance and
other expenses |
-- |
-- |
(711) |
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
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