Guess it's a sign of the total lack of interest in the drive segment that no one even bothers to report HTCH's quarter. Their release is below. One item of interest: They are shipping to Seagate now, in a desktop program, bad news for Innovex, I guess. They also generated positive cash flow in the quarter, though barely profitable. Note the CC webcast at the end of the release. They specifically say that both "individuals" and analysts may participate in the call. Nice touch.
Neff sounds like he has gone off the deep end. Why hasn't he arranged for more consolidation in the DD business? (<gg>)
Hutchinson Technology Reports First Quarter
Net Income of $.03 Per Share; Weaker Demand Prompts Workforce
Reduction and Expected Loss for Second Quarter
HUTCHINSON, Minn., Jan. 16 /PRNewswire/ --
Hutchinson Technology Incorporated (Nasdaq: HTCH - news) today reported net income of $715,000, or $.03 per
diluted share, on net sales of $118,914,000 for its fiscal 2001 first quarter ended December 24, 2000. In the comparable
fiscal 2000 period, the company reported a net loss of $39,169,000, or $1.58 per diluted share, on net sales of
$123,823,000. The company's results for the fiscal 2000 first quarter included a pre-tax charge to earnings of
$46,528,000, or $1.33 per diluted share, related to write-downs of certain assets and severance costs. In the fiscal 2000
fourth quarter, the company reported net income of $1,577,000, or $.06 per diluted share, on net sales of $116,149,000.
The company shipped approximately 125 million suspension assemblies during the fiscal 2001 first quarter, compared
to approximately 122 million in the fiscal 2000 fourth quarter and 133 million in the fiscal 2000 first quarter. The
company's TSA suspensions accounted for approximately 70 percent of shipments in both the fiscal 2001 first quarter
and the fiscal 2000 fourth quarter and 54 percent in the fiscal 2000 first quarter. Higher value TSA products
incorporating extended electrical leads (tailed TSAs) accounted for approximately 36 percent of fiscal 2001 first quarter
shipments, compared to 22 percent of fiscal 2000 fourth quarter shipments.
Wayne M. Fortun, Hutchinson Technology's president and chief executive officer, noted that the company's mix of
products shipped, net sales and gross margins were in line with its previously stated expectations for the quarter. ``We
achieved our net sales and gross margin targets for the quarter and continued to see wider acceptance of our higher value
tailed TSA products,'' said Fortun. ``These products, for which we have significant technological and production
advantages over our competitors, enable our customers to improve drive performance while reducing overall costs.''
Fortun said that in the company's current fiscal quarter demand for suspension assemblies has weakened from the levels
of the previous two quarters. ``A slowdown in computer sales has resulted in industry inventory levels that will need to
be worked down before demand recovers,'' said Fortun. ``In light of the weaker demand, we will be managing our costs
to adjust to the reduction in revenue, as we have done previously. We believe this reduction in demand is temporary and,
though we are taking actions to further reduce our costs, we are also confident we can respond quickly once demand
growth resumes,'' said Fortun.
The company is currently further reducing its workforce and implementing additional cost reduction efforts. It estimates
that up to 250 positions could be eliminated company wide. Employees whose positions are eliminated will be offered a
severance package.
Fortun said the company currently expects net sales for its fiscal second quarter to range from $95 to $110 million, and
that the company will have a net loss for the period. ``As a result of prior cost reductions and ongoing cost management,
we expect gross margins to be between 7 and 10 percent. This should enable us to contain our net loss for the period to
approximately $6 to $12 million, or $.23 to $.48 per share, not including severance charges,'' said Fortun. In the fiscal
2000 second quarter, the company reported a net loss of $13.1 million, or $.53 per diluted share, on net sales of $110.9
million.
At the end of the fiscal 2001 first quarter, the company's cash, cash equivalents and securities held for sale totaled $243.5
million compared to $244.4 million at the end of the comparable fiscal 2000 period.
Fortun noted that Hutchinson Technology continues to strengthen its working relationships with its customers. At the
end of the fiscal 2001 first quarter, the company was shipping TSA suspensions to Seagate Technology LLC for
qualification in Seagate's first desktop program incorporating TSA products. During the fiscal 2001 first quarter, the
company signed an agreement establishing joint development activities for suspension assembly products with Maxtor
Corporation (Nasdaq: MXTR - news) for products in the Maxtor DiamondMax® hard drive line. Under the agreement,
Hutchinson Technology has been designated as Maxtor's primary vendor for suspension assemblies. The company also
has a joint development and supply agreement with Read-Rite Corporation (Nasdaq: RDRT - news) a leading
manufacturer of recording heads.
Hutchinson Technology is the leading worldwide supplier of suspension assemblies for disk drives.
In connection with the adoption of the new Securities and Exchange Commission rules governing fair disclosure
(Regulation FD), the company is adopting a policy of providing financial information and projections only through
means that are designed to provide broad distribution of the information to the public, and the company will continue to
refrain from making or updating projections or otherwise providing material non-public information through any other
means.
This announcement contains forward-looking statements regarding the company's cost reduction efforts, demand for its
suspension assemblies, industry inventories and financial performance. 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 consumption of suspension assemblies, the company's ability to fully realize anticipated cost
reductions and other factors described from time to time in the company's reports filed with the Securities and Exchange
Commission.
The company will conduct a conference call and webcast for investors beginning at 4:00 p.m. Central Standard Time
(CST) on January 16. Individual investors and news media may participate in the conference call via the live webcast.
The webcast will be available through the Investor Relations page on Hutchinson Technology's web site at
htch.com  or at www.StreetFusion.com. The webcast will be available from 4:00 p.m. CST on January 16
through 8:00 p.m. on January 19. Webcast participants will need to complete a brief registration form and should allot
extra time before the webcast begins to register and, if necessary, download and install audio software. A replay of the
call will be available beginning at approximately 6:00 p.m. CST on January 16 until 8:00 p.m. CST on January 19. To
access the replay, dial 800-633-8284 or 858-812-6440 and enter 17288454 at the reservation number prompt.
Hutchinson Technology Incorporated
(Nasdaq/NMS: HTCH - news)
First Quarter Ended
Dec. 24, 2000 Dec. 26, 1999
Net sales $118,914,000 $123,823,000
Gross profit $ 19,895,000 $7,983,000
Income (loss) from operations $634,000 $(53,395,000)a
Net income (loss) $715,000 $(39,169,000)b
Net income (loss) per common share $.03 $(1.58)
Net income (loss) per common share --
Assuming dilution $.03 $(1.58)
Weighted average common and common equivalent
shares outstanding:
Common shares 24,849,000 24,745,000
Common shares -- assuming dilution 25,162,000 24,745,000
(a) Includes $46,528,000 for asset impairment and other charges.
(b) Includes (net of tax) $34,896,000 for asset impairment and other
charges.
At Dec. 24, 2000 At Dec. 26, 1999
Total assets $671,600,000 $727,400,000
Cash and cash equivalents $146,800,000 $84,600,000
Securities available for sale $96,700,000 $159,800,000
Total shareholders' investment $393,400,000 $425,800,000
HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(Dollars in thousands)
December 24, September 24,
2000 2000
ASSETS
Current assets:
Cash and cash equivalents $146,826 $129,314
Securities available for sale 96,661 110,955
Trade receivables, net 63,164 60,637
Other receivables 3,641 4,071
Inventories 29,398 32,516
Prepaid taxes and other expenses 17,855 16,967
Total current assets 357,545 354,460
Property, plant and equipment, net 270,965 283,659
Other assets 43,048 45,814
$671,558 $683,933
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Current portion of capital lease obligation $8,855 $8,538
Current maturities of long-term debt $19,277 $20,910
Accounts payable and accrued expenses 32,942 38,674
Accrued compensation 17,147 15,729
Total current liabilities 78,221 83,851
Capital lease obligation 7,857 9,718
Long-term debt, less current maturities 39,334 44,706
Convertible subordinated notes 150,000 150,000
Other long-term liabilities 2,699 3,169
Shareholders' investment:
Common stock, $.01 par value, 45,000,000 shares
authorized, 24,850,000 and 24,830,000 issued
and outstanding 249 248
Additional paid-in capital 364,782 364,540
Retained earnings 28,416 27,701
Total shareholders' investment 393,447 392,489
$671,558 $683,933
HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Thirteen Weeks Ended
December 24, December 26,
2000 1999
Net sales $118,914 $123,823
Cost of sales 99,020 115,840
Gross profit 19,894 7,983
Selling, general and administrative expenses 12,752 11,309
Research and development expenses 6,508 5,541
Asset impairment and other 0 46,528
Income (loss) from operations 634 (55,395)
Interest expense (3,973) (2,999)
Other income, net 4,133 3,227
Income (loss) before income taxes 794 (55,167)
Provision (benefit) for income taxes 79 (15,998)
Net income (loss) 715 ($39,169)
Basic earnings (loss) per share $0.03 ($1.58)
Diluted earnings (loss) per share $0.03 ($1.58)
Weighted average common shares outstanding 24,849 24,745
Weighted average common and diluted shares
outstanding 25,162 24,745
HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Dollars in thousands)
Thirteen Weeks Ended
December 24, December 26,
2000 1999
Operating activities:
Net income (loss) $715 ($39,169)
Adjustments to reconcile net income (loss) to
cash provided by (used for) operating
activities:
Asset impairment and other 0 46,528
Depreciation and amortization 22,429 24,056
Deferred taxes 965 (19,163)
Change in operating assets and liabilities (2,887) 19,981
Cash provided by operating activities 21,222 32,233
Investing activities:
Proceeds from the sale of property, plant
and equipment 304 0
Capital expenditures (10,002) (26,059)
Sales of marketable securities 39,688 11,461
Purchases of marketable securities (25,394) (31,880)
Cash used for investing activities 4,596 (46,478)
Financing activities:
Repayments of long-term debt (1,544) (21)
(7,005) 0
Net proceeds from issuance of common stock 243 30
Cash provided by (used for) financing
activities (8,306) 9
Net increase (decrease) in cash and cash
equivalents 17,512 (14,236)
Cash and cash equivalents at beginning of
period 129,314 98,820
Cash and cash equivalents at end of period $146,826 $84,584
SOURCE: Hutchinson Technology
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