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Hutchinson Technology Reports First Quarter Results

TSA+ suspensions accounted for 85% of first quarter shipments, unchanged from the preceding quarter. "We are very pleased with the levels of quality and output we are realizing from our existing TSA+ and DSA capacity," said Penn. "Our manufacturing proficiency is enabling us to meet increasing customer demand for DSA suspensions."

Penn said that the company's operation in Thailand accounted for 18% of assembly production in the fiscal first quarter.  "We have qualified additional products at our Thailand site and remain on track to have about one-half of our total assembly output produced there by the end of our fiscal 2013 third quarter," said Penn. 

Cash and investments at the end of the 2013 first quarter totaled $57.5 million, up $2.6 million compared with the preceding quarter.  Cash used by operations totaled $1.6 million in the fiscal 2013 first quarter, while capital spending totaled $5.1 million. Outstanding borrowings on the company's revolving line of credit totaled $4.1 million at the end of the fiscal 2013 first quarter compared with none at the end of the preceding quarter.

After the end of the fiscal 2013 first quarter, as previously announced, the company issued $12.2 million of 10.875% Senior Secured Second Lien Notes due 2017 and used the proceeds to repurchase $18.7 million of its 8.50% Convertible Senior Notes.  This reduced the company's outstanding debt with a first put date in 2015 from $58.5 million to $39.8 million.  Combined with the planned redemption in the fiscal 2013 second quarter of the remaining $11.9 million of its 3.25% Convertible Subordinated Notes, the total principal amount of the company's outstanding long-term debt will be reduced to $131.0 million from $149.3 million.

Regarding the company's outlook, Penn said the company expects its fiscal 2013 second quarter suspension assembly shipments to range from 95 million to 105 million, anticipating slightly lower demand for disk drives and a delay in some program ramps to the second half of fiscal 2013.  Gross profit is expected to decline on the lower volume in the second quarter and on lower shipments of development products.  

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