Hutchinson Technology Reports Fourth Quarter Results
November 02 2015 - 8:05AM
Hutchinson Technology Incorporated (NASDAQ:HTCH) today reported net
sales of $63.4 million for its fiscal fourth quarter ended
September 27, 2015. Suspension assembly shipments for the quarter
totaled 105.4 million, up 22% from 86.6 million in the preceding
quarter.
"As we expected, overall demand for suspension assemblies grew
in what is typically a seasonally stronger period for disk drive
production," said Rick Penn, Hutchinson Technology's president and
chief executive officer. "Our sales to all of our major disk drive
customers increased in the quarter and we also benefited from our
market position on suspension assemblies for 2.5-inch disk
drives."
Gross profit in the fiscal 2015 fourth quarter totaled $7.5
million, or 11.8% of net sales, up from $4.8 million, or 8.8% of
net sales, in the fiscal third quarter. The improvement resulted
from the higher volume in the quarter and the resulting increase in
operating leverage. The company continued to optimize costs by
shifting assembly production to its Thailand assembly operation,
which accounted for 92% of the fourth quarter's assembly
production, up from 89% in the preceding quarter.
The company's operating loss in the fiscal fourth quarter
declined to $3.9 million from $6.1 million in the preceding
quarter. The improvement resulted from the increase in gross profit
and lower research and development expenses, which declined to $3.8
million from $5.2 million in the preceding quarter due primarily to
the recognition of $1.5 million of previously deferred income
described below. Penn noted that research and development expenses
are expected to return to $5 million to $6 million in the fiscal
2016 first quarter.
Penn said that results from reliability testing for its new
shape memory alloy ("SMA") optical image stabilization ("OIS")
actuator have been encouraging. "We have shipped prototypes of our
Gemini OIS actuator to lensholder assembly manufacturers and
currently expect some smartphone makers to begin receiving
prototype camera modules that use our new OIS actuator by the end
of this calendar year."
For its fiscal 2015 fourth quarter, the company reported a net
loss of $9.3 million, or $0.28 per share. The net loss for the
quarter included:
- a $2.4 million foreign currency loss;
- a $1.6 million asset impairment charge on the company's
development center building in Hutchinson, Minnesota; and
- $340,000 of non-cash interest expense, partially offset by
- $1.5 million of previously deferred income related to a former
cost-sharing agreement for development of the company's SMA OIS
actuator.
Excluding these items, the company's net loss for the fiscal
2015 fourth quarter was $6.5 million, or $0.20 per share.
In the preceding quarter, the company reported a net loss of
$10.2 million, or $0.30 per share, on net sales of $54.7 million.
The third quarter net loss included a $1.1 million foreign currency
loss and $330,000 of non-cash interest expense. Excluding
these items, the company's net loss for the fiscal 2015 third
quarter was $8.7 million, or $0.26 per share.
Cash and investments at the end of the fiscal 2015 fourth
quarter totaled $40.4 million compared with $36.4 million at the
end of the preceding quarter. Cash increased primarily due to
favorable changes in working capital, including a $4.7 million
reduction in receivables and a $3.8 million reduction in
inventories. Capital spending totaled approximately $600,000 in the
quarter, compared with $2.8 million in the third quarter. In
2016, capital spending is expected to be $10 million to $15
million. There were no outstanding borrowings on the
company's revolving line of credit at quarter end compared with
$3.0 million at the end of the fiscal third quarter.
For its fiscal 2016 first quarter, the company currently expects
its suspension assembly shipments to be flat to up 5% sequentially
with an average selling price of $0.57, flat with the fiscal 2015
fourth quarter. Gross profit is currently expected to be flat
to up slightly on a sequential basis.
"We are pleased with the progress evident in our fourth quarter
performance," said Penn. "We continue to focus on improving
our position in the suspension assembly market and expanding our
relationships in the smartphone camera supply chain."
Conference Call and Webcast Cancelled
Due to today's earlier announcement of a definitive merger
agreement between the company and TDK Corporation, the conference
call and webcast previously scheduled for 7:00 a.m. Central Time on
Friday, November 6 has been cancelled.
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
our market position, demand for and shipments of suspension
assemblies, product mix, pricing, operating performance, market
adoption and production of OIS actuators, our capital spending,
operating costs 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 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 |
Fifty-Two Weeks
Ended |
|
September 27, |
September 28, |
September 27, |
September 28, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Net sales |
$ 63,366 |
$ 70,304 |
$ 252,823 |
$ 261,087 |
Cost of sales |
55,889 |
61,353 |
222,791 |
237,186 |
Gross profit |
7,477 |
8,951 |
30,032 |
23,901 |
|
|
|
|
|
Research and development
expenses |
3,796 |
4,828 |
22,100 |
17,316 |
Selling, general and administrative
expenses |
5,922 |
5,648 |
23,481 |
22,990 |
Severance and site consolidation
expenses |
-- |
(60) |
159 |
2,726 |
Asset impairment |
1,620 |
-- |
1,620 |
4,470 |
Loss from
operations |
(3,861) |
(1,465) |
(17,328) |
(23,601) |
|
|
|
|
|
Other (expense) income,
net |
(2,246) |
500 |
(3,538) |
(1,738) |
Loss on extinguishment of long-term
debt |
-- |
-- |
(4,318) |
-- |
Interest income |
14 |
10 |
40 |
73 |
Interest expense |
(3,219) |
(4,186) |
(14,028) |
(15,909) |
Loss before income
taxes |
(9,312) |
(5,141) |
(39,172) |
(41,175) |
|
|
|
|
|
Provision (benefit) for income
taxes |
24 |
15 |
(74) |
(761) |
|
|
|
|
|
Net loss |
$ (9,336) |
$ (5,156) |
$ (39,098) |
$ (40,414) |
|
|
|
|
|
Basic loss per share |
$ (0.28) |
$ (0.18) |
$ (1.20) |
$ (1.44) |
|
|
|
|
|
Diluted loss per share |
$ (0.28) |
$ (0.18) |
$ (1.20) |
$ (1.44) |
|
|
|
|
|
Weighted-average common shares
outstanding |
33,533 |
28,072 |
32,711 |
27,993 |
|
|
|
|
|
Weighted-average diluted shares
outstanding |
33,533 |
28,072 |
32,711 |
27,993 |
|
|
Hutchinson Technology
Incorporated |
Condensed Consolidated
Balance Sheets - Unaudited |
(In thousands, except shares
data) |
|
|
|
|
September 27, |
September 28, |
|
2015 |
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 39,454 |
$ 37,939 |
Short-term investments -
restricted |
965 |
965 |
Trade receivables,
net |
15,860 |
23,971 |
Other receivables |
2,707 |
2,894 |
Inventories |
40,148 |
48,978 |
Other current
assets |
3,588 |
4,323 |
Total current
assets |
102,722 |
119,070 |
Property, plant and equipment,
net |
134,509 |
153,169 |
Other assets |
4,281 |
2,926 |
Total assets |
$ 241,512 |
$ 275,165 |
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
Current liabilities: |
|
|
Current debt, net of
discount |
$ 3,000 |
$ 48,731 |
Current portion of capital lease
obligation |
2,188 |
2,109 |
Accounts payable |
19,877 |
19,055 |
Accrued expenses |
7,077 |
6,406 |
Accrued
compensation |
9,388 |
9,312 |
Total current
liabilities |
41,530 |
85,613 |
Long-term debt, net of
discount |
122,156 |
87,168 |
Capital lease
obligation |
4,220 |
4,464 |
Other long-term
liabilities |
2,731 |
3,092 |
Shareholders' equity: |
|
|
Common stock $.01 par
value, 100,000,000 shares |
authorized, 33,540,000 and
28,102,000 |
|
|
issued and
outstanding |
335 |
281 |
Additional paid-in
capital |
452,165 |
433,308 |
Accumulated other comprehensive
loss |
(4,309) |
(543) |
Accumulated loss |
(377,316) |
(338,218) |
Total shareholders'
equity |
70,875 |
94,828 |
Total liabilities and shareholders'
equity |
$ 241,512 |
$ 275,165 |
|
|
|
|
Hutchinson Technology
Incorporated |
Condensed Consolidated
Statements of Cash Flows - Unaudited |
(Dollars in thousands) |
|
|
|
|
Fifty-Two Weeks
Ended |
|
September 27, |
September 28, |
|
2015 |
2014 |
Operating activities: |
|
|
Net loss |
$ (39,098) |
$ (40,414) |
Adjustments to reconcile net loss
to |
|
|
cash provided by (used for)
operating activities: |
|
|
Depreciation and
amortization |
31,945 |
37,204 |
Stock-based
compensation |
1,415 |
1,345 |
Loss on disposal of
assets |
63 |
(57) |
Asset impairment
charge |
1,620 |
4,470 |
Non-cash interest
expense |
1,963 |
3,343 |
Loss on extinguishment of
debt |
4,318 |
-- |
Severance and site consolidation
expenses |
(27) |
27 |
Changes in operating assets and
liabilities |
16,566 |
(7,392) |
Cash provided by (used for)
operating activities |
18,765 |
(1,474) |
|
|
|
Investing activities: |
|
|
Capital
expenditures |
(17,940) |
(17,283) |
Proceeds from sale / leaseback of
equipment |
3,221 |
6,395 |
Proceeds from sale of building
and other assets |
-- |
4,563 |
Change in restricted
cash |
382 |
1,662 |
Purchases of marketable
securities |
(1,930) |
(2,395) |
Sales / maturities of marketable
securities |
1,930 |
2,630 |
Cash used for
investing activities |
(14,337) |
(4,428) |
|
|
|
Financing activities: |
|
|
Proceeds from issuance of common
stock |
83 |
59 |
Repayments of capital
lease |
(2,382) |
(1,739) |
Repayments of revolving credit
line |
(127,773) |
(189,389) |
Proceeds from revolving credit
line |
118,240 |
194,942 |
Repayments of debt |
(41,322) |
-- |
Proceeds from private placement
of debt |
37,500 |
-- |
Proceeds from term
loan |
15,000 |
-- |
Debt refinancing
costs |
(3,175) |
-- |
Cash (used for) provided by
financing activities |
(3,829) |
3,873 |
|
|
|
Effect of exchange rate changes on
cash |
916 |
565 |
|
|
|
Net increase (decrease) in cash and
cash equivalents |
1,515 |
(1,464) |
|
|
|
Cash and cash equivalents at
beginning of period |
37,939 |
39,403 |
|
|
|
Cash and cash equivalents at end of
period |
$ 39,454 |
$ 37,939 |
|
|
|
Hutchinson Technology
Incorporated |
Reconciliation of
Non-GAAP to GAAP Financial Measures - Unaudited |
(In thousands, except per share
data) |
|
|
|
|
|
Thirteen Weeks
Ended |
|
September 27, |
June 28, |
September 28, |
|
2015 |
2015 |
2014 |
|
|
|
|
Net loss - GAAP |
$ (9,336) |
$ (10,160) |
$ (5,156) |
Subtract deferred income
recognized |
(1,520) |
-- |
-- |
Subtract foreign currency
gain |
-- |
-- |
(396) |
Subtract reversal of severance
expense |
-- |
-- |
(325) |
Add foreign currency
loss |
2,355 |
1,093 |
-- |
Add non-cash interest
expenses |
340 |
332 |
869 |
Add site consolidation and
severance expenses |
-- |
-- |
268 |
Add asset
impairment |
1,620 |
-- |
-- |
Net loss - Adjusted |
$ (6,541) |
$ (8,735) |
$ (4,740) |
|
|
|
|
|
|
|
|
Net loss per common share –
GAAP: |
|
|
|
|
|
|
|
Basic loss income per
share |
$ (0.28) |
$ (0.30) |
$ (0.18) |
Diluted loss income per
share |
$ (0.28) |
$ (0.30) |
$ (0.18) |
|
|
|
|
Net loss per common share –
Adjusted: |
|
|
|
|
|
|
|
Basic loss per share |
$ (0.20) |
$ (0.26) |
$ (0.17) |
Diluted loss per share |
$ (0.20) |
$ (0.26) |
$ (0.17) |
|
|
|
|
Weighted average common and common
equivalent shares outstanding: |
|
|
|
|
|
|
|
Basic |
33,533 |
33,493 |
28,072 |
Diluted |
33,533 |
33,493 |
28,072 |
|
|
|
|
Net loss per common share
basic and diluted, is calculated by dividing net loss 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 (NASDAQ:HTCH)
Historical Stock Chart
From Mar 2024 to Apr 2024
Hutchinson (NASDAQ:HTCH)
Historical Stock Chart
From Apr 2023 to Apr 2024