Hutchinson Technology Reports First Quarter Net Loss
In the fiscal 2011 first quarter, cash flow from operations totaled $1.4 million and capital expenditures totaled $4.7 million. The company's cash and investments balance at quarter end totaled $101.2 million compared with $104.5 million at the end of the preceding quarter. The company said that it continues to expect its fiscal 2011 capital expenditures to be $20 million to $25 million.
Disk Drive Components Division
The company shipped 106.5 million suspension assemblies in the fiscal 2011 first quarter compared with 110.4 million in the preceding quarter and 155.2 million in the fiscal 2010 first quarter. Compared with the preceding quarter, a decline in shipments for mobile applications was partially offset by an increase in suspension assembly shipments for 3.5-inch ATA applications. First quarter shipments for enterprise applications were flat compared with the preceding quarter. Average selling price in the fiscal 2011 first quarter was $0.62 compared with $0.66 in the preceding quarter and $0.68 in the fiscal 2010 first quarter.
The company shipped 48 million TSA+ suspension assemblies in the fiscal 2011 first quarter, compared with 38 million in the preceding quarter and 25 million in the fiscal 2010 first quarter. Kathleen Skarvan, president of the Disk Drive Components Division, said that the cost burden of TSA+ flexure production was reduced from $7.6 million in the preceding quarter to $3.1 million in the fiscal 2011 first quarter. "In the fiscal 2011 first quarter, we eliminated the cost burden of TSA+ flexure production during a four-week period in which we reached certain levels of yield, output and capacity utilization," said Skarvan. "Demonstrating that this cost burden can be eliminated is a significant achievement. With TSA+ yields continuing to improve as we entered the fiscal 2011 second quarter, our TSA+ cost per part will primarily be determined by our TSA+ output and capacity utilization." TSA+ suspension assemblies, which accounted for about 45 percent of fiscal 2011 first quarter shipments, are expected to account for more than half of the company's fiscal 2011 second quarter shipments and two-thirds of its shipments by year end.
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