ALL:
Hutchinson Technology Second Quarter Net Income
Totals $13.7 Million on 60 Percent Increase in Sales
PR Newswire - April 20, 1999 17:30
HUTCHINSON, Minn., April 20 /PRNewswire/ -- Hutchinson Technology Incorporated
(Nasdaq: HTCH) today reported net income of $13,748,000, or $.54 per diluted share, on net
sales of $152,366,000 for its fiscal second quarter ended March 28, 1999. In the comparable fiscal
1998 period, the company reported a net loss of $14,425,000, or $.73 per diluted share, on net
sales of $95,128,000.
For the six months ended March 28, 1999, Hutchinson Technology reported net income of
$25,281,000, or $1.05 per diluted share, on net sales of $307,641,000 compared to a net loss of
$25,899,000, or $1.32 per diluted share, on net sales of $184,110,000 in the first six months of
fiscal 1998.
Wayne M. Fortun, Hutchinson Technology president and chief executive officer, attributed the
year-over-year improvement in the company's financial performance primarily to increased
shipments and profitability of TSA suspension assemblies. Fortun said the improvements were made
possible by expansion of the company's TSA production capacity as well as improved efficiency in
producing these products. "Our TSA output exceeded 6 million units per week in the latter part of
the second quarter as we continued to meet our targets for TSA capacity expansion," said Fortun.
TSA suspensions accounted for 40 percent of shipments in the second quarter and nearly
two-thirds of net sales compared to 11 percent of shipments and approximately one-third of net
sales in the fiscal 1998 second quarter. "During the quarter, Maxtor became the fifth major disk
drive manufacturer to use our TSA suspensions in their disk drive programs," said Fortun. "While
our capacity currently exceeds demand for TSA suspensions, we continue to be very encouraged
by the industry's adoption of our TSA products."
The company previously announced that demand for its suspension assembly products weakened in
the latter half of the second quarter. The continued weak demand, combined with
faster-than-expected improvements in productivity on certain TSA suspensions, has prompted the
company to further temporarily reduce its work force. "We are continuing to actively adjust our
work force and output levels to align them with current demand," said Fortun. "In addition, in light of
the progress we have made in improving productivity and capacity, we expect to reduce our capital
spending modestly from previously planned levels."
The company continues to take action to minimize the impact on margins of lower than expected
suspension assembly demand and declining TSA prices. Fortun said the company's financial
performance in the second half of its fiscal year will be largely determined by demand levels. "The
disk drive industry's transition to just-in-time manufacturing may result in a shorter down cycle than
we have previously experienced and we are also controlling our inventory levels. However, in the
past, demand during the summer months has typically been weak and we continue to have very
limited visibility for future demand. With our current balance sheet, we are well positioned for an
increase in suspension assembly demand and the further adoption of our TSA products as an
industry standard platform," said Fortun.
This announcement contains forward-looking statements regarding the industry adoption of the
company's products, future capital expenditures by the company, demand for and pricing of the
company's products, the company's manufacturing capacity and efficiencies, the company's need for
and ability to rehire its work force, and the results of operations of the company. 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 fluctuating order rates and product
mix, slower or faster customer acceptance of its new products, difficulties in expanding capacity,
changes in manufacturing efficiencies, inability to obtain sufficient staffing levels and the other factors
described from time to time in the company's reports filed with the Securities and Exchange
Commission, including but not limited to the company's Registration Statement on Form S-3, filed
on January 8, 1999.
Hutchinson Technology is the leading worldwide supplier of suspension assemblies for disk drives.
- financial data follows -
Hutchinson Technology Incorporated (Nasdaq/NMS: HTCH)
Second Quarter Ended
March 28, 1999 March 29, 1998
Net sales $152,366,000 $95,128,000
Gross profit (loss) $36,390,000 $(2,697,000)
Income (loss) from operations $17,169,000 $(19,639,000)
Net income (loss) $13,748,000 $(14,425,000)
Net income (loss) per common share $.61 $(.73)
Net income (loss) per common share -
assuming dilution $.54 $(.73)
Weighted average common and common
equivalent shares outstanding:
Common shares 22,681,000 19,673,000
Common shares -- assuming
dilution 28,812,000 19,673,000
Twenty-Six Weeks Ended
March 28, 1999 March 29, 1998
Net sales $307,641,000 $184,110,000
Gross profit (loss) $69,975,000 $(3,193,000)
Income (loss) from operations $33,883,000 $(35,565,000)
Net income (loss) $25,281,000 $(25,899,000)
Net income (loss) per common share $1.19 $(1.32)
Net income (loss) per common share -
assuming dilution $1.05 $(1.32)
Weighted average common and common
equivalent shares outstanding:
Common shares 21,232,000 19,651,000
Common shares -- assuming
dilution 27,222,000 19,651,000
At March 28, 1999 At Sept. 28, 1997
Total assets $783,558,000 $549,478,000
Cash and cash equivalents $243,956,000 $58,942,000
Total shareholders' investment $472,473,000 $236,830,000
SOURCE Hutchinson Technology, Inc.
/CONTACT: John Ingleman, Chief Financial Officer of Hutchinson Technology |
