Hutchinson Technology Inc. (HTCH, Financial) filed Quarterly Report for the period ended 2009-12-27.
Hutchinson Technology Inc. has a market cap of $159.8 million; its shares were traded at around $6.84 with and P/S ratio of 0.4. HTCH is in the portfolios of Arnold Van Den Berg of Century Management, Bruce Kovner of Caxton Associates, Chuck Royce of ROYCE & ASSOCIATES.
Gross profit for the thirteen weeks ended December 27, 2009, was $20,777,000, compared to gross loss of $133,000 for the thirteen weeks ended December 28, 2008, an increase of $20,910,000. Gross profit as a percent of net sales was 19 percent and 0 percent, respectively. The higher gross profit was primarily due to the benefits of our 2009 restructuring and cost reduction actions, and lower costs associated with the production of TSA+ suspension assemblies. The TSA+ cost burden reduced gross profit by $7,400,000 for the thirteen weeks ended December 27, 2009, compared to $9,500,000 for the thirteen weeks ended December 28, 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 $106,391,000 at September 27, 2009, to $118,461,000 at December 27, 2009. Our short- and long-term investments increased from $120,632,000 to $123,200,000 during the same period. In total, our cash and cash equivalents and short- and long-term investments increased by $14,638,000. This increase was primarily due to $23,980,000 of cash generated from operations. This increase was partially offset by $5,260,000 for the repayment of short- and long-term debt and $4,098,000 for capital expenditures.
Our ARS portfolio had an aggregate par value of $91,325,000 at September 27, 2009 and $88,625,000 at December 27, 2009. The reduction in par value was due to the sales and redemptions of portions of the ARS that we held. We determine the estimated fair value of our ARS portfolio each quarter. At September 27, 2009, we estimated the fair value of our ARS portfolio to be $90,244,000. As of December 27, 2009, we estimated the fair value of our ARS portfolio was $87,790,000. The decrease in fair value from September 27, 2009, was primarily due to sales and redemptions for an aggregate of $2,700,000 par value of our ARS for $2,418,000 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.
Our ARS portfolio had an aggregate par value of $91,325,000 at September 27, 2009 and $88,625,000 at December 27, 2009. The reduction in par value was due to the sales and redemptions of portions of the ARS that we held. We determine the estimated fair value of our ARS portfolio each quarter. At September 27, 2009, we estimated the fair value of our ARS portfolio to be $90,244,000. As of December 27, 2009, we estimated the fair value of our ARS portfolio to be $87,790,000. The decrease in fair value from September 27, 2009, is primarily due to sales and redemptions for an aggregate of $2,700,000 par value of our ARS for $2,418,000 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.
Our ARS portfolio and the Rights Offering are classified as short- and long-term investments on our condensed consolidated balance sheets unaudited. A portion of the ARS were reclassified as short-term due to the terms of the UBS Settlement, which includes the Rights Offering. The balance of the ARS are classified as long-term due to the uncertainty of when we will be able to sell these securities. As of the date of this report, there was insufficient observable ARS market information available to directly determine the fair value of our investments, including the Rights Offering. Using the limited available market valuation information, we performed a discounted cash flow analysis to determine the estimated fair value of the investments and recorded an unrealized loss of $100,000, plus an other than temporary realized gain of $464,000 as of December 27, 2009. This overall increase in fair value was primarily due to a favorable change in the interest rate spread used in our discounted cash flow model. We elected the fair value option (described above) on September 29, 2008, and subsequently elected to treat the portion of our ARS portfolio subject to the Rights Offering as trading securities valued under the fair value method. Accordingly, we recorded a benefit of $8,577,000 as of December 28, 2008, which was reduced to $4,037,000 as of September 27, 2009, related to the Rights Offering in Long-term investments on our condensed consolidated balance sheets unaudited and a corresponding gain in Other income on our condensed consolidated statements of operations unaudited. As of December 27, 2009, we reduced the estimated fair value of the Rights Offering to $3,637,000. The valuation models we used to estimate the fair market values included numerous assumptions such as assessments of credit quality, contractual rate, expected cash flows, discount rates, expected term and overall ARS market liquidity. Our valuations are sensitive to market conditions and management judgment and can change significantly based on the assumptions used. If we are unable to sell our ARS at auction or o
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Hutchinson Technology Inc. has a market cap of $159.8 million; its shares were traded at around $6.84 with and P/S ratio of 0.4. HTCH is in the portfolios of Arnold Van Den Berg of Century Management, Bruce Kovner of Caxton Associates, Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:
Net sales for the thirteen weeks ended December 27, 2009, were $108,256,000, compared to $119,671,000 for the thirteen weeks ended December 28, 2008, a decrease of $11,415,000. Suspension assembly sales decreased $11,667,000 from the thirteen weeks ended December 28, 2008, primarily due to our average selling price decreasing from $0.76 to $0.68 during the same period due to competitive pressures and the mix of products shipped. The decrease in unit shipments was primarily due to lower worldwide suspension assembly demand and loss of market share. Net sales in our BioMeasurement Division for the thirteen weeks ended December 27, 2009 were $509,000, compared to $265,000 for the thirteen weeks ended December 28, 2008.Gross profit for the thirteen weeks ended December 27, 2009, was $20,777,000, compared to gross loss of $133,000 for the thirteen weeks ended December 28, 2008, an increase of $20,910,000. Gross profit as a percent of net sales was 19 percent and 0 percent, respectively. The higher gross profit was primarily due to the benefits of our 2009 restructuring and cost reduction actions, and lower costs associated with the production of TSA+ suspension assemblies. The TSA+ cost burden reduced gross profit by $7,400,000 for the thirteen weeks ended December 27, 2009, compared to $9,500,000 for the thirteen weeks ended December 28, 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 $106,391,000 at September 27, 2009, to $118,461,000 at December 27, 2009. Our short- and long-term investments increased from $120,632,000 to $123,200,000 during the same period. In total, our cash and cash equivalents and short- and long-term investments increased by $14,638,000. This increase was primarily due to $23,980,000 of cash generated from operations. This increase was partially offset by $5,260,000 for the repayment of short- and long-term debt and $4,098,000 for capital expenditures.
Our ARS portfolio had an aggregate par value of $91,325,000 at September 27, 2009 and $88,625,000 at December 27, 2009. The reduction in par value was due to the sales and redemptions of portions of the ARS that we held. We determine the estimated fair value of our ARS portfolio each quarter. At September 27, 2009, we estimated the fair value of our ARS portfolio to be $90,244,000. As of December 27, 2009, we estimated the fair value of our ARS portfolio was $87,790,000. The decrease in fair value from September 27, 2009, was primarily due to sales and redemptions for an aggregate of $2,700,000 par value of our ARS for $2,418,000 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.
Our ARS portfolio had an aggregate par value of $91,325,000 at September 27, 2009 and $88,625,000 at December 27, 2009. The reduction in par value was due to the sales and redemptions of portions of the ARS that we held. We determine the estimated fair value of our ARS portfolio each quarter. At September 27, 2009, we estimated the fair value of our ARS portfolio to be $90,244,000. As of December 27, 2009, we estimated the fair value of our ARS portfolio to be $87,790,000. The decrease in fair value from September 27, 2009, is primarily due to sales and redemptions for an aggregate of $2,700,000 par value of our ARS for $2,418,000 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.
Our ARS portfolio and the Rights Offering are classified as short- and long-term investments on our condensed consolidated balance sheets unaudited. A portion of the ARS were reclassified as short-term due to the terms of the UBS Settlement, which includes the Rights Offering. The balance of the ARS are classified as long-term due to the uncertainty of when we will be able to sell these securities. As of the date of this report, there was insufficient observable ARS market information available to directly determine the fair value of our investments, including the Rights Offering. Using the limited available market valuation information, we performed a discounted cash flow analysis to determine the estimated fair value of the investments and recorded an unrealized loss of $100,000, plus an other than temporary realized gain of $464,000 as of December 27, 2009. This overall increase in fair value was primarily due to a favorable change in the interest rate spread used in our discounted cash flow model. We elected the fair value option (described above) on September 29, 2008, and subsequently elected to treat the portion of our ARS portfolio subject to the Rights Offering as trading securities valued under the fair value method. Accordingly, we recorded a benefit of $8,577,000 as of December 28, 2008, which was reduced to $4,037,000 as of September 27, 2009, related to the Rights Offering in Long-term investments on our condensed consolidated balance sheets unaudited and a corresponding gain in Other income on our condensed consolidated statements of operations unaudited. As of December 27, 2009, we reduced the estimated fair value of the Rights Offering to $3,637,000. The valuation models we used to estimate the fair market values included numerous assumptions such as assessments of credit quality, contractual rate, expected cash flows, discount rates, expected term and overall ARS market liquidity. Our valuations are sensitive to market conditions and management judgment and can change significantly based on the assumptions used. If we are unable to sell our ARS at auction or o
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