Hutchinson Technology Reports Fourth Quarter Loss On Reduced Volume
HUTCHINSON, Minn., Nov. 1, 2010 (GLOBE NEWSWIRE) -- Hutchinson Technology Incorporated (Nasdaq:HTCH) today reported a net loss of $26.8 million, or $1.15 per share, on net sales of $74.0 million for its fiscal fourth quarter ended September 26, 2010. In the preceding quarter, the company reported a net loss of $18.5 million, or $0.79 per share, on net sales of $77.3 million.
Results for the fiscal 2010 fourth quarter included $3.7 million in severance costs, $2.9 million of startup costs for the company's Thailand assembly operation and $2.2 million of non-cash interest expense resulting from the company's adoption, at the beginning of fiscal 2010, of Financial Accounting Standards Board guidance for accounting for convertible debt instruments. Results for the fiscal 2010 third quarter included $2.3 million of non-recurring asset write-downs in the BioMeasurement Division, $2.1 million of non-cash interest expense and $1.7 million of startup costs for the Thailand assembly operation.
Wayne M. Fortun, Hutchinson Technology's president and chief executive officer, said the company's shipments of suspension assemblies declined 5 percent compared with the preceding quarter, in line with the company's expectations. "Inventory reductions at a certain customer reduced our shipments and, as we previously indicated would occur, our fourth quarter volume was negatively impacted by a defect on some TSA+ product that we encountered late in our third quarter," said Fortun. "By the middle of our fourth quarter, we had implemented and validated a solution for this defect, and our TSA+ output and yield now exceed previous highs."Fortun said the company completed construction of its Thailand facility on time and under budget and is now shipping product from the Thailand site for customer qualification, as planned. Fortun also said that the company is on track with previously announced plans to further reduce its costs by $25 million on an annualized basis and will continue to focus on reducing costs. "Continuing to improve our TSA+ production efficiency and ramping our Thailand assembly operations will move us closer to our goal of being the industry's lowest cost producer of suspension assemblies," said Fortun. "These efforts, combined with increasing our revenue through growth in the overall suspension assembly market and higher market share, are essential to returning the company to positive cash generation and profitability."
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