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Hutchinson Technology Reports Fourth Quarter Results

Stocks in this article: HTCH

HUTCHINSON, Minn., Oct. 31, 2013 (GLOBE NEWSWIRE) -- Hutchinson Technology Incorporated (Nasdaq:HTCH) today reported suspension assembly shipments of 102.6 million for its fiscal fourth quarter ended September 29, 2013, up from 99.3 million in the preceding quarter. The company reported a net loss of $14.6 million, or $0.53 per share, on net sales of $63.7 million. The net loss for the fiscal 2013 fourth quarter included a $1.7 million impairment of BioMeasurement inventory, $900,000 of site consolidation costs, $800,000 of non-cash interest expense and a $100,000 foreign currency loss. Excluding these items, the company's fiscal 2013 fourth quarter net loss totaled $11.0 million, or $0.40 per share.

In the preceding quarter, the company reported a net loss of $15.9 million, or $0.59 per share, on net sales of $61.3 million. The net loss for the fiscal 2013 third quarter included a $3.4 million foreign currency loss, $750,000 of non-cash interest expense and $600,000 of site consolidation costs. Excluding these items, the company's fiscal 2013 third quarter net loss totaled $11.1 million, or $0.41 per share.

The company incurred a gross loss of $400,000, or 1% of net sales, in the fiscal 2013 fourth quarter, compared with a gross profit of $1.4 million, or 2% of net sales, in the preceding quarter. Excluding the impairment of BioMeasurement inventory, gross profit in the 2013 fourth quarter would have been $1.4 million, or 2% of net sales, reflecting the impact of the low yields that resulted from the manufacturing issues noted below.

"While we resolved the previously reported process issues encountered in our third quarter, we missed our operational targets in two areas during the fourth quarter," said Rick Penn, Hutchinson Technology's president and chief executive officer. "At our Thailand assembly operation, the aggressive ramp, combined with a heavier mix of new dual-stage actuated (DSA) programs, put pressure on our yields and efficiencies and caused them to come in lower than planned. We have intensified our support and expect improved operational performance as we ramp additional programs and continue to transition more assembly production to Thailand." Penn said the company also experienced low yields in the last month of the quarter from a manufacturing issue in its components operation that has since been corrected. He noted that neither of the issues impacted suspension assembly shipments to customers. "Although we are disappointed with these manufacturing issues, we have addressed them and are confident our operational performance will improve going forward," said Penn.

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