Hutchinson Technology Incorporated (NASDAQ: HTCH) is reporting a net loss of $6.5 million, or $0.27 per share, on net sales of $63.7 million for its fiscal 2013 first quarter ended December 30, 2012. Results for the quarter included $1.0 million of severance costs and $1.0 million of non-cash interest expense. Excluding these items, the company’s first quarter net loss was $4.5 million, or $0.19 per share.
In the preceding quarter, the company reported a net loss of $14.7 million, or $0.62 per share, on net sales of $63.6 million.
The company’s computer disk drive suspension assembly shipments totaled 103.6 million in the 13-week fiscal 2013 first quarter, up 6% on a weekly shipment basis compared with 105.2 million in the 14-week fiscal 2012 fourth quarter. Rick Penn, Hutchinson Technology’s president and chief executive officer says “As in the preceding quarter, our shipments benefited from our market share positions on both existing and new customer programs even as worldwide disk drive and suspension assembly demand remained soft.”
Gross profit in the fiscal 2013 first quarter was $7.4 million, or 11.6% of net sales, compared with a gross loss of $0.2 million in the preceding quarter. Compared with the fiscal 2012 fourth quarter, gross profit benefited from improved absorption of fixed costs due to higher weekly volume, continued efforts to reduce costs, increased shipments of higher-priced development products and increased scrap recoveries.
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. 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.
“Looking beyond the second quarter,” said Penn, “we expect our
financial results to benefit from higher volume and improved fixed
cost leverage, increased adoption of our DSA suspensions, the cost
benefits of our TSA+ process, further cost reductions as we transition
more assembly volume to Thailand and continued consolidation and
streamlining of our U.S. Operations.”