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Hutchinson Technology Reports Third Quarter Loss

Hutchinson Technology to Host Conference Call

The company will conduct a conference call and webcast for investors beginning at 4:00 p.m. Central Time on Tuesday, July 27. Individual investors and news media may participate in the conference call live via the webcast. The webcast will be available through the Investor Relations page on Hutchinson Technology's web site at www.htch.com. 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 leading worldwide supplier of suspension assemblies for disk drives. The company's BioMeasurement Division is focused on bringing to the market new technologies and products 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 regarding demand for and shipments of the company's products, production capability and costs, assembly operations in Thailand, product commercialization and adoption, capital expenditures, cost reductions, operating performance 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, 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 establish an assembly operation in Asia, 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 Thirty-Nine Weeks Ended
  June 27, June 28, June 27, June 28,
  2010 2009 2010 2009
         
Net sales  $ 77,293  $ 106,105  $ 273,163  $ 304,780
         
Cost of sales 72,386 104,128 240,164 314,710
         
Gross profit (loss) 4,907 1,977 32,999 (9,930)
         
Research and development expenses 5,553 5,723 16,136 22,060
         
Selling, general and administrative expenses 14,686 13,302 40,386 44,652
         
Severance and other expenses  --  4,894  --  29,208
         
Asset impairment charge  --   20,841  --   71,809
         
Loss from operations (15,332) (42,783) (23,523) (177,659)
         
Interest expense (3,865) (5,033) (12,224) (15,109)
         
Interest Income 304 689 1,241 2,876
         
Gain on debt extinguishment  --   1,923  6  14,098
         
Gain (loss) on short- and long-term investments 37 224 (319) 4,134
         
Other income, net 437 432 1,257 1,042
         
Loss before income taxes (18,419) (44,548) (33,562) (170,618)
         
Provision (benefit) for income taxes 81 (215) (1,692) (154)
         
Net loss  $ (18,500)  $ (44,333)  $ (31,870)  $ (170,464)
         
Basic loss per share  $ (0.79)  $ (1.90)  $ (1.36)  $ (7.36)
         
Diluted loss per share  $ (0.79)  $ (1.90)  $ (1.36)  $ (7.36)
         
Weighted-average common shares outstanding 23,362 23,346 23,360 23,167
         
Weighted-average common and diluted shares outstanding 23,362 23,346 23,360 23,167
     
Hutchinson Technology Incorporated
Condensed Consolidated Balance Sheets - Unaudited
(In thousands, except shares data)
    June 27,   September 27,
ASSETS 2010 2009
Current assets:    
Cash and cash equivalents  $ 53,596  $ 106,391
Short-term investments 114,336 96,316
Trade receivables, net 46,051 63,448
Other receivables 7,845 8,445
Inventories 55,620 46,878
Other current assets 2,602 4,932
Total current assets 280,050 326,410
Long-term investments  --   24,316
Property, plant and equipment, net 261,139 279,336
Other assets 4,635 5,425
   $ 545,824  $ 635,487
     
LIABILITIES AND SHAREHOLDERS' INVESTMENT    
Current liabilities:    
Current maturities of long-term debt  $ 35,224  $ 102,804
Accounts payable 21,491 17,536
Accrued expenses 9,873 11,183
Accrued compensation 14,326 13,139
Total current liabilities 80,914 144,662
Long-term debt, less current maturities  --  946
Convertible subordinated notes 172,755 166,464
Other long-term liabilities 1,165 1,705
Shareholders' investment:    
Common stock $.01 par value, 100,000,000 shares authorized, 23,362,000 and 23,359,000 issued and outstanding 234 234
Additional paid-in capital 421,638 418,572
Accumulated other comprehensive income 587 2,503
Accumulated loss (131,469) (99,599)
Total shareholders' investment 290,990 321,710
   $ 545,824  $ 635,487
 
Hutchinson Technology Incorporated
Condensed Consolidated Statements of Cash Flows - Unaudited
(Dollars in thousands)
     
  Thirty-Nine Weeks Ended
  June 27, June 28,
  2010 2009
Operating activities:    
Net loss  $ (31,870)  $ (170,464)
Adjustments to reconcile net loss to cash provided by operating activities:    
Depreciation and amortization 41,457 61,515
Stock-based compensation 3,039 4,054
Benefit for deferred taxes  --  (67)
Non-cash interest expense 6,290 6,570
Loss (gain) on short- and long-term investments 319 (4,134)
Impairment of assets  2,294 71,669
Loss (gain) on disposal of assets 11 (355)
Severance and other expenses  --  2,155
Gain on extinguishment of debt (6) (14,098)
Changes in operating assets and liabilities 12,696 55,339
 Cash provided by operating activities 34,230 12,184
     
Investing activities:    
Capital expenditures (22,690) (18,728)
Purchases of marketable securities (71,739) (19,783)
Sales/maturities of marketable securities 75,811 124,663
 Cash (used for) provided by investing activities (18,618) 86,152
     
Financing activities:    
Repayment of long-term debt  (68,513)  (71,910)
Repayment of capital lease  79  -- 
Net proceeds from issuance of common stock  27 1,458
Net proceeds from loan  --  59,161
 Cash used for financing activities (68,407) (11,291)
     
Net (decrease) increase in cash and cash equivalents (52,795) 87,045
     
Cash and cash equivalents at beginning of period 106,391 62,309
     
Cash and cash equivalents at end of period  $ 53,596  $ 149,354
 
Hutchinson Technology Incorporated
Earnings Per Share Calculation - Unaudited
(In thousands, except per share data)
         
  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  June 27, June 28, June 27, June 28,
  2010 2009 2010 2009
         
Net loss (A)  $ (18,500)  $ (44,333)  $ (31,870)  $ (170,464)
Plus: interest expense on convertible subordinated notes  --   --   --   -- 
Less: additional profit sharing expense and income tax provision  --   --   --   -- 
Net loss available to common shareholders (B)  $ (18,500)  $ (44,333)  $ (31,870)  $ (170,464)
         
Weighted average common shares outstanding (C) 23,362 23,346 23,360 23,167
Dilutive potential common shares  --   --   --   -- 
Weighted average common and diluted shares outstanding (D) 23,362 23,346 23,360 23,167
         
Basic loss per share [(A)/(C)]  $ (0.79)  $ (1.90)  $ (1.36)  $ (7.36)
Diluted loss per share [(B)/(D)]  $ (0.79)  $ (1.90)  $ (1.36)  $ (7.36)
CONTACT:  Hutchinson Technology Inc.
          INVESTOR CONTACT:
          Chuck Ives
            320-587-1605
          MEDIA CONTACT:
          Connie Pautz
            320-587-1823

Hutchinson Technology Incorporated Logo

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