Hutchinson Technology Reports Fourth Quarter Loss On Reduced Volume
In the fiscal 2010 fourth quarter, the company's cash used by operations was $19.2 million, capital expenditures totaled $9.8 million and the company repaid the remaining $34 million balance on the loan obtained against its portfolio of auction rate securities. All of the company's remaining auction rate securities were put back to UBS at par value during the quarter, under the terms of a previous agreement. The company's cash and investments balance at quarter end totaled $104.5 million. The company said that it expects its fiscal 2011 capital expenditures to be $20 million to $25 million, compared to $32 million for fiscal 2010.
Disk Drive Components Division
The company shipped 110.4 million suspension assemblies in the fiscal 2010 fourth quarter, down from 116.6 million in the preceding quarter and 145.4 million in the fiscal 2009 fourth quarter. Compared with the preceding quarter, shipments for mobile and 3.5-inch ATA applications declined while shipments for enterprise applications increased.
The higher mix of shipments for enterprise applications mitigated continued pressure on prices. As a result, average selling price in the fourth quarter was 66 cents, up from 65 cents in the preceding quarter. Average selling price in the fiscal 2009 fourth quarter was 70 cents.The company shipped 38 million TSA+ suspensions in the fiscal 2010 fourth quarter, up from 33 million in the preceding quarter and 18 million in the fiscal 2009 fourth quarter. Kathleen Skarvan, president of the Disk Drive Components Division, said that the cost burden of TSA+ flexure production in the fourth quarter remained about flat with the preceding quarter at $7.6 million primarily due to the costs of remediating the TSA+ defect. "However, due to a resumption of yield improvements and higher output, the cost burden decreased as we moved through the quarter," said Skarvan. "We are still targeting elimination of the cost burden in the first half of fiscal 2011, after which we will begin to realize a competitive cost advantage." The company's overall cost position is expected to further improve as its Thailand assembly operations ramp to higher volume.
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