Hutchinson Technology Reports Preliminary First Quarter Results
January 13 2015 - 6:00AM
Hutchinson Technology Incorporated (Nasdaq:HTCH) today reported
preliminary results for its fiscal 2015 first quarter ended
December 28, 2014. The company shipped 121.7 million suspension
assemblies in the fiscal 2015 first quarter, up 4% from 117.1
million in the preceding quarter. Rick Penn, Hutchinson
Technology's president and chief executive officer, said the higher
shipments resulted from the company's increased participation on
customers' programs. Net sales for the quarter totaled
approximately $72 million, compared with $70.3 million in the
preceding quarter. Average selling price was $0.58, flat compared
to the preceding quarter.
The company estimates that gross margin for the fiscal 2015
first quarter was 15% to 16% of net sales, up from 13% in the
preceding quarter, due to the higher volume in the quarter and
improved operating performance. The company also estimates that its
fiscal 2015 first quarter operating loss was reduced to
approximately $1 million, compared to an operating loss of $1.5
million in the preceding quarter. Research and development expenses
for the quarter increased to approximately $6 million, compared to
$4.8 million in the preceding quarter, primarily due to process
development costs for the company's SMA OIS actuators.
"We're still in the early phases of bringing our OIS actuator to
the market, and we continue to focus on increasing our OIS
production efficiency and capacity," said Penn. Penn also said that
a smartphone incorporating the company's SMA OIS actuators was
introduced last week for sale in Taiwan and China.
In connection with the financing transactions that closed in
October 2014, the company expects to record a loss on debt
extinguishment of approximately $4.3 million in the fiscal 2015
first quarter.
Cash and investments totaled approximately $35 million at the
end of the fiscal 2015 first quarter, compared to $38.9 million at
the end of the preceding quarter. The company also held
approximately $45 million of cash that is restricted in use,
including $35 million of cash held in an escrow account to
partially fund the previously announced redemption of its $39.8
million of 8.50% Convertible Senior Notes that will occur on
January 15, 2015.
As previously disclosed, the company obtained a $15 million term
loan during the fiscal 2015 first quarter. Outstanding borrowings
on the company's revolving line of credit were reduced from $9.5
million at the end of the preceding quarter to zero at the end of
the fiscal 2015 first quarter. Subsequent to the end of the fiscal
2015 first quarter, the company received a $15 million advance
payment from a customer for suspension assemblies expected to ship
to that customer in the fiscal 2015 second quarter.
The company said that it currently expects a sequential decline
in suspension assembly shipments and net sales during its fiscal
2015 second quarter, which is historically a seasonally weaker
quarter.
The company will provide further details in its first quarter
results announcement and conference call.
Fiscal 2015 First Quarter Results to be Reported on
January 28, 2015
The company announced it will report its fiscal 2015 first
quarter financial results on Wednesday, January 28, 2015, before
the open of the market. A subsequent conference call for the
investment community will take place at 8:00 a.m. Eastern Time
(7:00 a.m. Central Time).
Individual investors and news media may participate in the
conference call via a webcast, which will be accessible live and on
an archived basis on Hutchinson Technology's web site at
www.htch.com/investors. The webcast also will be distributed by
Thomson StreetEvents to both institutional and individual investors
at www.earnings.com.
About Hutchinson Technology
Hutchinson Technology is a global supplier of critical precision
component technologies. As a key supplier of suspension assemblies
for disk drives, we help customers improve overall disk drive
performance and meet the demands of an ever-expanding digital
universe. Through our new business development initiatives, we
focus on leveraging our unique precision manufacturing capabilities
in new markets to improve product performance, reduce size, lower
cost, and reduce time to market.
Cautionary Note Regarding Forward-Looking
Statements
This announcement contains forward-looking statements regarding
demand for and shipments of the company's products, production
capabilities, operating performance, debt repayments 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.
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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