Hutchinson Technology Inc. (HTCH, Financial) filed Quarterly Report for the period ended 2009-06-28.
Hutchinson Technology Incorporated is an acknowledged world leader in precision manufacturing. Hutchinson Technology specialize in design and manufacture of close-tolerance products that require chemical mechanical and electronic technologies. Its primary products suspension assemblies hold magnetic read-write heads at microscopic distances above the disks in rigid disk drives. The Company is strongly positioned as a provider of technology that our customers value for its ability to help them differentiate their products on performance and value attributes. . Hutchinson Technology Inc. has a market cap of $86.4 million; its shares were traded at around $3.7 with and P/S ratio of 0.1.
Net sales for the thirteen weeks ended June 28, 2009, were $106,105,000, compared to $150,398,000 for the thirteen weeks ended June 29, 2008, a decrease of $44,293,000. Suspension assembly sales decreased $44,473,000 from the thirteen weeks ended June 29, 2008, due to decreased suspension assembly unit shipments and our average selling price decreasing from $0.79 to $0.71 during the same period due to competitive pressures and a higher mix of suspension assemblies for the 3.5-inch ATA segment, which typically has a lower average selling price. The decrease in unit shipments was primarily due to lower demand for disk drives and loss of market share.
Net sales for the thirty-nine weeks ended June 28, 2009, were $304,780,000, compared to $467,319,000 for the thirty-nine weeks ended June 29, 2008, a decrease of $162,539,000. Suspension assembly sales decreased $163,911,000 from the thirty-nine weeks ended June 29, 2008, due to decreased suspension assembly unit shipments and our average selling price decreasing from $0.80 to $0.73 during the same period due to competitive pressures. The decrease in unit shipments was primarily due to lower demand for disk drives, lower disk drive production as the drive makers reduced inventory levels and loss of market share.
Gross loss for the thirty-nine weeks ended June 28, 2009, was $9,930,000, compared to gross profit of $68,370,000 for the thirty-nine weeks ended June 29, 2008, a decrease of $78,300,000. Gross profit as a percent of net sales was negative 3% and positive 15% for the thirty-nine weeks ended June 28, 2009, and June 29, 2008, respectively. The lower gross profit was primarily due to the substantial decline in net sales, which reduced our ability to cover our fixed costs, and excess capacity. Cost of sales also included higher costs associated with TSA+ flexure production, which reduced gross profit by $24,900,000 for the thirty-nine weeks ended June 28, 2009, compared to $26,600,000 for the thirty-nine weeks ended June 29, 2008.
Our principal sources of liquidity are cash and cash equivalents, short- and long-term investments, cash flow from operations and additional financing capacity, if available given current credit market conditions and our operating performance. Our cash and cash equivalents increased from $62,309,000 at September 28, 2008, to $149,354,000 at June 28, 2009. Our short- and long-term investments decreased from $201,110,000 to $102,017,000 during the same period. In total, our cash and cash equivalents and short- and long-term investments decreased by $12,048,000. This decrease was primarily due to $71,910,000 in repayments of long-term debt and $18,728,000 for capital expenditures. These decreases were partially offset by $59,161,000 of net proceeds drawn from the UBS Credit Line (defined below), $12,184,000 of cash generated from operations, and $1,458,000 in net proceeds from issuances of our common stock from our employee stock purchase plan during the thirty-nine weeks ended June 28, 2009. The cash generated from operations is net of $27,053,000 of severance and other expenses for the thirty-nine weeks ended June 28, 2009.
Our ARS portfolio had an aggregate par value of $100,650,000 at September 28, 2008 and $94,775,000 at June 28, 2009. The reduction in par value was due to sales and redemptions of the ARS that we hold. We determine the estimated fair value of our ARS portfolio each quarter. At September 28, 2008, we estimated the fair value of our ARS portfolio to be $92,166,000. As of June 28, 2009, the estimated fair value of our ARS portfolio was $93,087,000. The increase in fair value from September 28, 2008, includes $5,952,000 of realized and unrealized gains related to the Rights Offering and increased value of ARS due to changes in the interest rate spread used in our discounted cash flow model. These increases were partially offset by $5,875,000 of ARS sales and redemptions for $5,031,000 in cash. Our ARS portfolio consists primarily of AAA/Aaa-rated securities that are collateralized by student loans that are primarily 97% guaranteed by the U.S. government under the Federal Family Education Loan Program. None of our ARS portfolio consists of mortgage-backed obligations.
Read the The complete ReportHTCH is in the portfolios of Arnold Van Den Berg of Century Management.
Hutchinson Technology Incorporated is an acknowledged world leader in precision manufacturing. Hutchinson Technology specialize in design and manufacture of close-tolerance products that require chemical mechanical and electronic technologies. Its primary products suspension assemblies hold magnetic read-write heads at microscopic distances above the disks in rigid disk drives. The Company is strongly positioned as a provider of technology that our customers value for its ability to help them differentiate their products on performance and value attributes. . Hutchinson Technology Inc. has a market cap of $86.4 million; its shares were traded at around $3.7 with and P/S ratio of 0.1.
Highlight of Business Operations:
We spent $39,711,000 on research and development in 2008 compared to $55,245,000 in 2007. In 2007, we continued development of the additive processes required for our TSA+ suspension assemblies and development of new process technologies for next-generation suspension assembly products and equipment. The decrease in 2008 was primarily attributable to $11,018,000 of lower expenses primarily related to the classification of the costs of running the TSA+ manufacturing lines as cost of sales beginning in the fourth quarter of 2007. Research and development spending specific to our BioMeasurement Division was $4,767,000 in 2008 and $4,207,000 in 2007. For the thirty-nine weeks ended June 28, 2009, we spent $22,060,000 on research and development, with $3,326,000 specific to our BioMeasurement Division. We expect our research and development spending in 2009 will be less than $30,000,000.Net sales for the thirteen weeks ended June 28, 2009, were $106,105,000, compared to $150,398,000 for the thirteen weeks ended June 29, 2008, a decrease of $44,293,000. Suspension assembly sales decreased $44,473,000 from the thirteen weeks ended June 29, 2008, due to decreased suspension assembly unit shipments and our average selling price decreasing from $0.79 to $0.71 during the same period due to competitive pressures and a higher mix of suspension assemblies for the 3.5-inch ATA segment, which typically has a lower average selling price. The decrease in unit shipments was primarily due to lower demand for disk drives and loss of market share.
Net sales for the thirty-nine weeks ended June 28, 2009, were $304,780,000, compared to $467,319,000 for the thirty-nine weeks ended June 29, 2008, a decrease of $162,539,000. Suspension assembly sales decreased $163,911,000 from the thirty-nine weeks ended June 29, 2008, due to decreased suspension assembly unit shipments and our average selling price decreasing from $0.80 to $0.73 during the same period due to competitive pressures. The decrease in unit shipments was primarily due to lower demand for disk drives, lower disk drive production as the drive makers reduced inventory levels and loss of market share.
Gross loss for the thirty-nine weeks ended June 28, 2009, was $9,930,000, compared to gross profit of $68,370,000 for the thirty-nine weeks ended June 29, 2008, a decrease of $78,300,000. Gross profit as a percent of net sales was negative 3% and positive 15% for the thirty-nine weeks ended June 28, 2009, and June 29, 2008, respectively. The lower gross profit was primarily due to the substantial decline in net sales, which reduced our ability to cover our fixed costs, and excess capacity. Cost of sales also included higher costs associated with TSA+ flexure production, which reduced gross profit by $24,900,000 for the thirty-nine weeks ended June 28, 2009, compared to $26,600,000 for the thirty-nine weeks ended June 29, 2008.
Our principal sources of liquidity are cash and cash equivalents, short- and long-term investments, cash flow from operations and additional financing capacity, if available given current credit market conditions and our operating performance. Our cash and cash equivalents increased from $62,309,000 at September 28, 2008, to $149,354,000 at June 28, 2009. Our short- and long-term investments decreased from $201,110,000 to $102,017,000 during the same period. In total, our cash and cash equivalents and short- and long-term investments decreased by $12,048,000. This decrease was primarily due to $71,910,000 in repayments of long-term debt and $18,728,000 for capital expenditures. These decreases were partially offset by $59,161,000 of net proceeds drawn from the UBS Credit Line (defined below), $12,184,000 of cash generated from operations, and $1,458,000 in net proceeds from issuances of our common stock from our employee stock purchase plan during the thirty-nine weeks ended June 28, 2009. The cash generated from operations is net of $27,053,000 of severance and other expenses for the thirty-nine weeks ended June 28, 2009.
Our ARS portfolio had an aggregate par value of $100,650,000 at September 28, 2008 and $94,775,000 at June 28, 2009. The reduction in par value was due to sales and redemptions of the ARS that we hold. We determine the estimated fair value of our ARS portfolio each quarter. At September 28, 2008, we estimated the fair value of our ARS portfolio to be $92,166,000. As of June 28, 2009, the estimated fair value of our ARS portfolio was $93,087,000. The increase in fair value from September 28, 2008, includes $5,952,000 of realized and unrealized gains related to the Rights Offering and increased value of ARS due to changes in the interest rate spread used in our discounted cash flow model. These increases were partially offset by $5,875,000 of ARS sales and redemptions for $5,031,000 in cash. Our ARS portfolio consists primarily of AAA/Aaa-rated securities that are collateralized by student loans that are primarily 97% guaranteed by the U.S. government under the Federal Family Education Loan Program. None of our ARS portfolio consists of mortgage-backed obligations.
Read the The complete ReportHTCH is in the portfolios of Arnold Van Den Berg of Century Management.
