Hutchinson Technology reduces debt by $10.4 million in fiscal Q1

By Lisa Kerner

Charlotte, N.C., Jan. 24 - Hutchinson Technology Inc. used $10.4 million of cash to repay borrowings on its revolving line of credit during the fiscal first quarter ended Dec. 25, chief financial officer David P. Radloff said during the company's earning call on Tuesday.

Cash and investments at the end of the 2012 first quarter totaled $55.8 million, compared with $59.2 million at the end of the preceding quarter.

Radloff said the company's debt at quarter's end totaled $161.4 million, down $10.4 million from the end of the proceeding quarter.

Hutchinson reported cash generated from operations for the quarter of $12.5 million, including $9 million of insurance proceeds. Capital expenditures totaled $5.4 million.

The insurance proceeds were related to flood damage to the company's assembly plant in Thailand. Hutchinson expects to resume production at the plant by the end of June, with pre-flood output levels not expected to resume until the middle of fiscal 2013, president and chief executive officer Wayne M. Fortun said during the call.

The company estimates that it will spend $25 million to $30 million in fiscal 2012 and an additional $5 million in fiscal 2013 to restore its assembly operation in Thailand and to cover the incremental costs of manufacturing in the United States.

An additional $16 million of insurance proceeds have been received in the fiscal second quarter.

Also for the first quarter, Hutchinson reported a net loss of $12.5 million, or $0.53 per share, on net sales of $58.5 million. In the preceding quarter, the company reported a net loss of $7.2 million, or $0.31 per share, on net sales of $74.4 million. Results for the preceding quarter included a gain on debt extinguishment of $2.9 million, according to a company news release.

Gross profit in the fiscal 2012 first quarter was $2.3 million, or 4% of net sales, compared with $5.1 million, or 7% of net sales, in the preceding quarter.

Hutchinson Technology is a Hutchinson, Minn.-based designer and manufacturer of precision technologies. Its disk drive components division supplies suspension assemblies for disk drives. The company also operates a biomeasurement division.

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