Hutchinson Technology Reports First Quarter Net Loss

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements, including statements regarding demand for and shipments of the company's products, market position, pricing, production capability and costs, assembly operations in Thailand, capital expenditures, cost reductions, product commercialization and adoption, operating performance and financial results. Except as otherwise required by law, the company does not undertake to update its forward-looking statements for any reason. 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 ramp an assembly operation in Thailand, 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
	December 26,	December 27,
	2010	2009
Net sales	$ 68,244	$ 108,256
Cost of sales	64,920	87,479
Gross profit	3,324	20,777
Research and development expenses	4,049	5,147
Selling, general and
administrative expenses	13,634	12,501
(Loss) income from operations	(14,359)	3,129
Interest expense	(3,844)	(4,197)
Interest income	55	409
Gain on extinguishment of debt	--	5
Other income, net	831	558
Gain on short- and long-term investments	364	64
Loss before income taxes	(16,953)	(32)
Benefit for income taxes	(3)	(2,252)
Net (loss) income	$ (16,950)	$ 2,220
Basic (loss) earnings per share	$ (0.73)	$ 0.10
Diluted (loss) earnings per share	$ (0.73)	$ 0.09
Weighted-average common
shares outstanding	23,371	23,359
Weighted-average common
and diluted shares outstanding	23,371	23,609

Hutchinson Technology Incorporated
Condensed Consolidated Balance Sheets - Unaudited
(In thousands, except shares data)
	December 26,	September 26,
ASSETS	2010	2010
Current assets:
Cash and cash equivalents	$ 64,904	$ 55,639
Short-term investments	36,278	48,899
Trade receivables, net	40,301	47,629
Other receivables	6,558	7,849
Inventories	60,841	53,568
Other current assets	1,815	2,353
Total current assets	210,697	215,937
Property, plant and equipment, net	250,032	258,233
Other assets	5,351	5,542
	$ 466,080	$ 479,712
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt	$ 876	$ 1,280
Accounts payable	17,407	15,788
Accrued expenses	8,239	8,593
Accrued compensation	11,810	12,911
Total current liabilities	38,332	38,572
Long-term debt, less current maturities	190	271
Convertible subordinated notes	177,158	174,920
Other long-term liabilities	1,721	1,271
Shareholders' equity:
Common stock $.01 par value, 100,000,000 shares
authorized, 23,371,000 and 23,371,000
issued and outstanding	234	234
Additional paid-in capital	422,839	422,089
Accumulated other comprehensive income	1,077	876
Accumulated loss	(175,471)	(158,521)
Total shareholders' equity	248,679	264,678
	$ 466,080	$ 479,712

Hutchinson Technology Incorporated
Condensed Consolidated Statements of Cash Flows - Unaudited
(Dollars in thousands)
	Thirteen Weeks Ended
	December 26,	December 27,
	2010	2009
Operating activities:
Net (loss) income	$ (16,950)	$ 2,220
Adjustments to reconcile net income (loss) to
cash provided by operating activities:
Depreciation and amortization	11,797	14,836
Stock-based compensation	750	997
Non-cash interest expense	2,238	2,051
Gain on short- and long-term investments	(364)	(64)
Loss on disposal of assets	227	147
Severance and other expenses	290	--
Gain on extinguishment of debt	--	(5)
Changes in operating assets and liabilities	3,416	3,798
Cash provided by operating activities	1,404	23,980
Investing activities:
Capital expenditures	(4,686)	(4,098)
Purchases of marketable securities	(5,700)	(11,629)
Sales/maturities of marketable securities	18,732	9,077
Cash provided by (used for) investing activities	8,346	(6,650)
Financing activities:
Repayments of long-term debt	(485)	(5,260)
Cash used for financing activities	(485)	(5,260)
Net increase in cash and cash equivalents	9,265	12,070
Cash and cash equivalents at beginning of period	55,639	106,391
Cash and cash equivalents at end of period	$ 64,904	$ 118,461

Hutchinson Technology Incorporated
Earnings Per Share Calculation - Unaudited
(In thousands, except per share data)
	Thirteen Weeks Ended
	December 26,	December 27,
	2010	2009
Net (loss) income (A)	$ (16,950)	$ 2,220
Weighted average common shares outstanding (B)	23,371	23,359
Dilutive potential common shares	--	250
Weighted average common and diluted shares
outstanding (C)	23,371	23,609
Basic (loss) earnings per share [(A)/(B)]	$ (0.73)	$ 0.10
Diluted (loss) earnings per share [(A)/(C)]	$ (0.73)	$ 0.09

CONTACT: Investor Contact:
         Chuck Ives
         Hutchinson Technology Inc.
         320-587-1605
         
         Media Contact:
         Connie Pautz
         Hutchinson Technology Inc.
         320-587-1823

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