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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ____ to _____
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COMMISSION FILE NUMBER: 000-27586
HMT TECHNOLOGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-3084354
----------------------------------- -----------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1055 PAGE AVENUE, FREMONT, CA 94538
----------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (510) 490-3100
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
--- ---
As of November 10, 1999, 45,794,115 shares of the registrant's common
stock, par value $0.001 per share, which is the only class of common
stock of the registrant, were outstanding.
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<PAGE>
HMT Technology Corporation
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
PART I FINANCIAL INFORMATION Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
September 30, 1999 and March 31, 1999 .................... 3
Condensed Consolidated Statements of
Operations for the three and six month
periods ended September 30, 1999 and 1998 ................ 4
Condensed Consolidated Statements of Cash
Flows for the six months ended September
30, 1999 and 1998 ........................................ 5
Notes to Condensed Consolidated Financial Statements ..... 6
Item 2. Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations ............ 9
Item 3 Quantitative and Qualitative Disclosures About
Market Risk .............................................. 11
PART II OTHER INFORMATION
Item 4 Submission of Matters to a Vote of the Security
Holders ................................................ 12
Item 6. Exhibits and Reports on Form 8-K ................. 13
Signatures ......................................... 14
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
HMT TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
------------ ------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................... $50,934 $53,077
Receivables, net............................. 32,925 29,572
Inventories.................................. 13,682 26,585
Deposits, prepaid expenses and other assets.. 541 588
Deferred tax assets, short term.............. 5,133 5,133
------------ ------------
Total current assets................. 103,215 114,955
Property, plant and equipment, net............. 297,113 321,508
Other assets................................... 5,529 6,077
------------ ------------
Total assets......................... $405,857 $442,540
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................. $15,127 $20,732
Accrued liabilities.......................... 9,233 8,498
Obligations under capital leases --
current portion............................ 215 555
------------ ------------
Total current liabilities............ 24,575 29,785
Long-term liabilities.......................... 2,074 2,680
Convertible subordinated promissory notes...... 230,000 230,000
Deferred tax liability, long term.............. 14,127 14,127
------------ ------------
Total liabilities.................... 270,776 276,592
Stockholders' equity:
Common stock................................. 45 44
Additional paid-in capital................... 115,169 113,661
Retained earnings ........................... 96,516 128,892
Distribution in excess of basis.............. (76,649) (76,649)
------------ ------------
Total stockholders' equity........... 135,081 165,948
------------ ------------
Total liabilities and stockholders' equity. $405,857 $442,540
============ ============
</TABLE>
See accompanying notes
<PAGE>
HMT TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------------------- -------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales ................... $44,791 $56,999 $89,690 $113,764
Cost of sales ............... 55,818 48,953 121,014 96,392
------------ ------------ ------------ ------------
Gross profit (Loss)........ (11,027) 8,046 (31,324) 17,372
------------ ------------ ------------ ------------
Operating expenses:
Research and development .. 2,294 2,382 4,435 4,817
Selling, general and
administrative ........... 2,518 2,214 4,980 4,878
------------ ------------ ------------ ------------
Total operating expenses . 4,812 4,596 9,415 9,695
------------ ------------ ------------ ------------
Operating income (loss) ..... (15,839) 3,450 (40,739) 7,677
Interest expense, net ....... 2,781 2,729 5,513 5,396
------------ ------------ ------------ ------------
Income (loss) before income
tax provision (benefit).... (18,620) 721 (46,252) 2,281
Income tax provision
(benefit) ................. (5,586) 216 (13,876) 684
------------ ------------ ------------ ------------
Net income (loss) ........ ($13,034) $505 ($32,376) $1,597
============ ============ ============ ============
Net income (loss) available
for common stockholders
per share:
Basic..................... ($0.29) $0.01 ($0.72) $0.04
============ ============ ============ ============
Diluted................... ($0.29) $0.01 ($0.72) $0.04
============ ============ ============ ============
Shares used in computing
per share amounts:
Basic..................... 45,124 43,570 44,709 43,493
============ ============ ============ ============
Diluted................... 45,124 43,570 44,709 43,493
============ ============ ============ ============
</TABLE>
See accompanying notes
<PAGE>
HMT TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
-------------------------
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ................................ ($32,376) $1,597
Adjustments to reconcile net income (loss)
to net cash used in operations:
Depreciation and amortization ................. 28,405 26,992
Changes in operating assets and liabilities:
Receivables ................................. (3,353) 16,894
Inventories ................................. 12,903 (9,882)
Deposits, prepaid expenses and other assets . 47 (246)
Accounts payable ............................ (5,605) (5,275)
Accrued liabilities ......................... 735 2,708
Long term liabilities ....................... (606) (653)
------------ ------------
Net cash provided by operating activities. 150 32,135
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment ... (3,975) (30,215)
Decrease in other assets ......................... 514 762
------------ ------------
Net cash used in investing activities .... (3,461) (29,453)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on obligations under capital
leases ........................................ (340) (2,375)
Proceeds from issuance of common stock ........... 1,508 1,734
------------ ------------
Net cash provided by (used in) financing
activities...................................... 1,168 (641)
------------ ------------
Net increase in cash and cash equivalents ........ (2,143) 2,041
Cash and cash equivalents at beginning of period .. 53,077 24,985
------------ ------------
Cash and cash equivalents at end of period ........ $50,934 $27,026
============ ============
</TABLE>
See accompanying notes
<PAGE>
HMT TECHNOLOGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared by
HMT Technology Corporation ("the Company") without audit in accordance
with generally accepted accounting principles for interim financial
information and pursuant to rules and regulations of the Securities and
Exchange Commission. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) considered necessary
for a fair representation have been included. These financial
statements should be read in conjunction with the Company's consolidated
financial statements and notes thereto contained in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1999.
Operating results for the quarter ended September 30, 1999 may not
necessarily be indicative of the results to be expected for any other
interim period or for the full year.
Fiscal Year
The Company uses a 52-week fiscal year ending on March 31 and thirteen-
to fourteen-week quarters that end on the Sunday closest to the calendar
quarter end.
Inventories
Inventories are stated at the lower of cost or market, and are reported
net of reserves. Cost is determined using the first-in, first-out basis.
Inventories
Inventories are stated at the lower of cost or market, and are reported
net of reserves. Cost is determined using the first-in, first-out basis.
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
------------ ------------
(in thousands)
<S> <C> <C>
Raw materials............................ $5,772 $5,575
Work-in-process.......................... 5,275 3,569
Finished goods........................... 2,635 17,441
------------ ------------
$13,682 $26,585
============ ============
</TABLE>
Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131"). SFAS 131
establishes standards for the way that public business enterprises
report information about operating segments in annual financial
statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued
to stockholders. SFAS 131 generally supersedes Statement of Financial
Accounting Standards No. 14, "Financial Reporting for Segments of a
Business Enterprise." Under SFAS 131, operating segments are components
of an enterprise about which separate financial information is available
that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
Generally, financial information is required to be reported on the basis
it is used internally. SFAS 131 is effective for financial statements
for periods beginning after December 15, 1997, and restatement of
comparative information for earlier years is required. However, SFAS
131 is not required to be applied to interim financial statements in
the initial year of application. Based upon the criteria of SFAS 131,
the Company has a single operating segment. Accordingly, the financial
statements provided herein satisfy the standard for reporting.
Geographic information about revenues, operating income and identifiable
assets are provided in the notes to the financial statements.
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities ("SFAS No. 133"). SFAS 133 requires
derivatives be recognized at fair value in the statement of financial
position, and that the corresponding gains or losses be reported either
in the statement of operations or as a component of comprehensive
income, depending on the type of hedging relationship that exists. SFAS
133 will be effective for fiscal years beginning after June 15, 1999.
The Company does not currently hold derivative instruments or engage in
hedging activities.
2. COMPUTATION OF NET INCOME (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ende Six Months Ended
September 30, September 30,
--------------------- ---------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Basic:
Weighted average shares outstanding
for the period..................... 45,124 43,570 44,709 43,461
---------- ---------- ---------- ----------
Shares used in computing
per share amounts.................. 45,124 43,570 44,709 43,461
========== ========== ========== ==========
Net income (loss) available for
common stockholders................ ($13,034) $505 ($32,376) $1,597
========== ========== ========== ==========
Net income (loss) available for
common stockholders per share...... ($0.29) $0.01 ($0.72) $0.04
========== ========== ========== ==========
Diluted (1):
Weighted average shares outstanding
for the period..................... 45,124 43,570 44,709 43,461
Net effect of dilutive stock
options based on the treasury stock
method using average market
price.............................. -- -- -- 1,804
Assumed conversion of 5 3/4%
convertible subordinated notes..... -- -- -- --
---------- ---------- ---------- ----------
Shares used in computing
per share amounts.................. 45,124 43,570 44,709 45,265
========== ========== ========== ==========
Net income (loss) available for
common stockholders................ ($13,034) $505 ($32,376) $1,597
Add 5 3/4% convertible subordinated
note interest, net of interest
capitalized and income tax effect.. -- -- -- --
---------- ---------- ---------- ----------
Net income (loss) available for
common stockholders................ ($13,034) $505 ($32,376) $1,597
========== ========== ========== ==========
Net income (loss) available for
common stockholders per share...... ($0.29) $0.01 ($0.72) $0.04
========== ========== ========== ==========
</TABLE>
(1) Diluted EPS for the six months ended September 30, 1999 and 1988 does not
assume conversion of the Company's 5 3/4% convertible subordinated notes, as
the effect would be anti-dilutive.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This discussion contains forward-looking statements, which are subject
to certain risks and uncertainties, including without limitation those
described below and in the Company's Annual Report on Form 10-K for the
year ended March 31, 1999, which has been filed with the Securities and
Exchange Commission. Actual results may differ materially from the
results discussed in the forward-looking statements.
Overview
HMT Technology Corporation (the "Company") is an independent supplier of
high-performance thin film disks for high-end, high-capacity and
removable hard disk drives, which in turn are used in PCs, network
servers and work-stations.
The Company derives substantially all of its sales from the sale of thin
film disks to a small number of customers. Loss of or a reduction in
orders from one or more of the Company's customers could result in a
substantial reduction in net sales. Because many of the Company's
expense levels are based, in part, on its expectations as to future
revenues, decreases in net sales may result in a disproportionately
greater negative impact on operating results. Due to the rapid
technological change and frequent development of new disk drive
products, it is common in the industry for the relative mix of customers
and products to change rapidly, even from quarter to quarter. At any
one time the Company typically supplies disks in volume for fewer than
twelve disk drive products.
Results of Operations
Net Sales Three Months Ended September 30, 1998 and 1999. Net sales for
the three months ended September 30, 1999 were $44.8 million, down 21.4%
from the $57.0 million reported in the three months ended September 30,
1998. For the first six months of fiscal 2000 net sales of $89.7 million
were $24.1 million, or 21.2% lower than the same period in fiscal 1999.
Unit sales volume decreased 5.7% during the three months ended September
30, 1999 and average selling prices declined 16.8%, compared to the
three months ended September 30, 1998. Media manufacturers expanded
capacity in calendar 1996 and 1997 to meet anticipated demand.
Beginning in 1998, demand for media slowed as storage capacity per disk
increased and drive designs incorporated fewer disks to meet the storage
capacities demanded by the market. The increase in production capacity
coupled with increased storage capacity per disk allowed the supply of
disks to meet and then exceed the market demand. The excess media
supply also heightened price competition among independent media
suppliers, causing the decline in average selling prices. Future
revenue will depend largely upon customer demand, unit shipments and
production volumes.
During the three months ended September 30, 1999, three customers, and
in the comparable period in 1998 four customers, each accounted for at
least ten percent of consolidated net sales. The Company expects that
it will continue to derive a substantial portion of its sales from a
relatively small number of customers, although the identity of such
customers may change from period to period.
Gross Profit. Gross margin (loss) was (24.6)% of net sales for the three
months ended September 30, 1999, compared with 14.1% for the three
months ended September 30, 1998. The decline in gross margin during the
three months ended September 30, 1999 was a result of higher unit
production costs and the decline in average selling prices versus the
comparable period in fiscal 1999. Unit production costs rose as fixed
costs were absorbed over lower unit production volumes. Production
volumes decreased 24.4% in the second quarter of fiscal 2000, compared
with the second quarter of fiscal 1999.
Research and Development. Research and development expenses decreased
$0.1million in the three months ended September 30, 1999, compared to
the same period in 1998. The Company anticipates that operating expenses
will continue to fluctuate somewhat from period to period due to changes
in products and operations.
Selling, General and Administrative. Selling, general and administrative
expenses increased $0.3 million in the three months ended September 30,
1999, compared to the same period in the prior fiscal year. The Company
anticipates that operating expenses will continue to fluctuate somewhat
from period to period due to changes in products and operations.
Interest Expense, Net. Net interest expense increased $0.1 million
during the three months ended September 30, 1999, compared to the same
period in fiscal 1999. The increase in interest expense, net, was
primarily the result of a decrease in capitalized interest partially
offset by an increase in interest income from improved cash balances.
Provision for Income Taxes. For the three months ended September 30,
1999 and 1998, the Company recorded income taxes at its estimated annual
effective tax rate of 30%.
The Company's operating results historically have been, and may continue
to be, subject to significant quarterly and annual fluctuations. As a
result, the Company's operating results in any quarter may not be
indicative of its future performance. Factors affecting operating
results include: market acceptance of new products; timing of
significant orders; changes in pricing by the Company or its
competitors; timing of product announcements by the Company, its
customers or its competitors; order cancellations, modifications and
quantity adjustments and shipment rescheduling; changes in product mix;
manufacturing yields; the level of utilization of the Company's
production capacity; increases in production and engineering costs
associated with initial manufacture of new products; and changes in the
cost of or limitations on the availability of materials. The impact of
these and other factors on the Company's revenues and operating results
in any future period cannot be forecasted with certainty. The Company's
expense levels are based, in part, on its expectations as to future
revenues. Because the Company's sales are generally made pursuant to
purchase orders that are subject to cancellation, modification, quantity
reduction or rescheduling on short notice and without significant
penalties, the Company's backlog as of any particular date may not be
indicative of sales for any future period, and such changes could cause
the Company's net sales to fall below expected levels. If revenue levels
are below expectations, operating results are likely to be materially
adversely effected. Net income, if any, and gross margins may be
disproportionately affected by a reduction in net sales because a
proportionately smaller amount of the Company's expenses varies with its
revenues.
Liquidity and Capital Resources
Cash and cash equivalents decreased by $2.1 million to $50.9 million at
September 30, 1999 from March 31, 1999. Cash flows from operations were
$151,000 for the six-month period ended September 30, 1999 as compared
to $32.1 million in the comparable period of 1998. Cash generated during
the six months ended September 30, 1999 reflected a net loss of $32.4
million offset by $28.4 million in depreciation and amortization.
Increased accounts receivable, decreased accounts payable and decreased
long-term liabilities served to decrease cash while decreased inventory
levels and increased accrued liabilities generated cash. Decreased
sales and lower margins contributed to the decline in positive cash flow
provided by operations during the six months ended September 30, 1999 as
compared to the six months ended September 30, 1998.
The Company invested $4.0 million and $30.2 million in property, plant
and equipment during the six months ended September 30, 1999 and 1998,
respectively. The Company currently expects to spend approximately $20
million over the next twelve months on property, plant and equipment.
Cash used by financing activities for the first six months of fiscal
2000 reflected $0.3 million in principal payments on capital leases,
offset by $1.5 million in cash received for employee stock purchases.
As of September 30, 1999, the Company's principal sources of liquidity
consisted of cash, cash equivalents and short-term investments, as well
as the full balance of a $50 million revolving credit facility.
The Company believes existing cash balances, cash generated from
operations and funds available under its credit facilities, will provide
adequate cash to fund its operations and anticipated capital
expenditures at least through September 30, 2000. Should improved
market conditions result in a need for a substantial expansion in the
Company's manufacturing capacity, the Company may need to obtain
additional sources of financing. There can be no assurance that the
Company will be able to obtain any needed alternative sources of
financing on favorable terms, if at all, at such time or times as the
Company may require such capital.
Year 2000 Compliance
The Company has reviewed both its internal computer systems and its
products that could be affected by the "Year 2000" issue and has
identified some systems that would be affected. In the ordinary course
of replacing computer equipment and software, the Company attempts to
obtain replacements that are Year 2000 compliant. The Company has used
both internal and external resources to identify and assess needed Year
2000 remediation. The Company's internal Year 2000 identification,
assessment, remediation and testing efforts, which began in October
1997, have been completed.
The Company has completed modifications to existing software and
conversions to new software. The Company believes the "Year 2000"
issues relating to internal computer systems and products will not cause
significant operational problems or computer problems. Furthermore,
the cost of implementing these solutions to date is not material to the
financial position or results of operations of the Company. We are not
currently estimating significant additional costs will be incurred.
However, there can be no guarantee that new costs will not be exposed
after January 1, 2000. There can be no assurance that, once upgraded,
that the systems will be Year 2000 compliant. Should the upgrades fail
to be Year 2000 compliant, the Company may be unable to conduct business
or manufacture its products, which could cause a material adverse effect
on the Company.
The Company initiated formal communications with all of its significant
suppliers and large customers during fiscal 1999 to determine the extent
to which the Company is vulnerable to those third parties' failure to
remediate their own Year 2000 issues. There can be no guarantee that
the systems or products of other companies or significant suppliers will
be Year 2000 compliant. A failure to take appropriate remediation
measures by another company, or remediation that is incompatible with
the Company's systems, could have a material adverse effect on the
Company. As of June 1, 1999, the Company had received responses from
all critical vendors, and all have provided written assurances that they
expect to address all their significant Year 2000 issues on a timely
basis. Of these responses, all are considered to be adequate.
The Company has worked with its customers and suppliers to address their
Year 2000 compliance in a timely manner. The Company has completed this
effort. However, this effort does not ensure customer or supplier
compliance. Should the Company's customers or suppliers fail to address
Year 2000 issues, the Company could be adversely affected. Should any
of the Company's suppliers encounter Year 2000 problems that cause them
to delay manufacturing or shipments of key components, the Company may
be forced to delay or cancel shipments of its products, which could have
a material adverse effect on the Company. Additionally, any inability
of customers to become Year 2000 compliant, which would cause them to
delay or cancel substantial purchase orders or delivery of products,
could also have a material adverse effect on the Company.
The Company has a contingency plan in place for operation without its
computer based manufacturing control systems. However, there are
scenarios for failure of suppliers or infrastructure for which no
contingency exists.
Item 3 Quantitative and Qualitative Disclosures About Market Risk
There is no material change from that reported in the Company's Annual
Report on Form 10K for the year ended March 31, 1999
<PAGE>
Part II, OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on July 28, 1999.
(b) The following individuals, each of whom served as directors of the
Company prior to the annual meeting, were elected to serve as directors
until the next annual meeting:
Total Vote For Total Vote Withheld
Each Director From Each Director
----------------- ------------------
Ronald L. Schauer 41,767,396 243,434
Donald P. Beadle 41,779,736 231,094
Bruce C. Edwards 41,781,636 229,194
Richard S. Love 41,779,436 231,394
Harry G. Van Wickle 41,780,036 230,794
(c) At the annual meeting, the Stockholders voted as follows:
1. A proposal to approve the Company's Employee Stock Purchase
Plan, as amended, to increase the aggregate number of shares of
Common Stock authorized for issuance under such plan by 1,500,000
shares was approved: 35,116,579 shares were voted in favor of the
proposal, 6,398,588 shares were voted against the proposal,
495,663 shares abstained and 3,021,804 shares were broker non-
votes.
2. The ratification of the selection of PricewaterhouseCoopers
LLP as the Company's independent auditors for the fiscal year
ended March 31, 2000 was approved: 41,926,170 shares were voted in
favor of the proposal, 39,264 shares were voted against the
proposal, 45,396 shares abstained and 3,021,804 shares were broker
non-votes.
Item 5. Other Information
Pursuant to the Company's bylaws, stockholders who wish to
bring matters or propose nominees for director at the
Company's 1999 annual meeting of stockholders must provide
specified information to the Company between April 20, 2000
and May 20, 2000 (unless such matters are included in the
Company's proxy statement pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended).
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1.1 First Amendment to Fleet Revolving Credit Agreement, dated
August 16, 1999, between the Company and Fleet National Bank
and Credit Suisse First Boston.
10.1.2 First Amendment to Fleet Security Agreement, dated August
16, 1999, between the Company and Fleet National Bank and
Credit Suisse First Boston.
27.1 Financial Data Schedule
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
HMT Technology Corporation
(Registrant)
Date: November 12, 1999 BY: /s/ Peter S. Norris
Peter S. Norris
Vice President and
Chief Financial Officer
Date: November 12, 1999 BY: /s/ Ronald L. Schauer
Ronald L. Schauer
President and
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit No.
10.1.1 First Amendment to Fleet Revolving Credit Agreement, dated
August 16, 1999, between the Company and Fleet National Bank and
Credit Suisse First Boston
10.1.2 First Amendment to Fleet Security Agreement, dated August
16, 1999, between the Company and Fleet National Bank and Credit
Suisse First Boston
27.1 Financial Data Schedule.
Exhibit 10.1.1
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this "Amendment"),
dated as of August 16, 1999, is made among HMT TECHNOLOGY CORPORATION, a
Delaware corporation (the "Borrower"), the financial institutions listed
on the signature pages hereof under the heading "BANKS" (each a "Bank"
and, collectively, the "Banks"), and CREDIT SUISSE FIRST BOSTON and
FLEET NATIONAL BANK, as agents for the Banks (in such capacity, the
"Agents").
The Borrower, the Banks and the Agents are parties to a Revolving Credit
Agreement dated as of November 2, 1998 (the "Credit Agreement"). The
Borrower has requested that the Banks agree to certain amendments to the
Credit Agreement. The Banks have agreed to such request, subject to the
terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Definitions; Interpretation.
Terms Defined in Credit Agreement. All capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.
Interpretation. The rules of interpretation set forth in Section 1.2 of
the Credit Agreement shall be applicable to this Amendment and are
incorporated herein by this reference.
Amendments to the Credit Agreement.
Amendments. The Credit Agreement shall be amended as follows, effective
as of the date of satisfaction of the conditions set forth in Section 4
(the "Effective Date"):
Section 1.1 of the Credit Agreement is hereby amended as follows:
(A) The following new definitions shall be inserted
in proper alphabetical order:
"Borrowing Base. As of any date of determination, the
aggregate amount of all cash of the Borrower held in
deposit accounts at the Agents in which the Agents
have a perfected first priority security interest
securing the Obligations."
"Borrowing Base Effectiveness Period. The period
prior to the termination, if any, of the Borrowing
Base Effectiveness Period pursuant to Section 2.9."
(B) The definition of "LIBOR Spread" is amended and restated as
follows:
"LIBOR Spread. Fifty basis points (0.50%)."
(ii) Section 2.1 of the Credit Agreement is hereby amended
by amending and restating the proviso in the first sentence as
follows:
"provided that the sum of the outstanding amount
of the Revolving Credit Loans (after giving
effect to all amounts requested) plus the
Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not at any time
exceed (a) during the Borrowing Base
Effectiveness Period, the lesser of (i) the
Borrowing Base and (ii) the Total Commitment,
and (b) at any other time, the Total Commitment."
(iii) Section 2.2 of the Credit Agreement is hereby amended
and restated as follows:
"2.2 Commitment Fee. The Borrower agrees to
pay to the Agents for the respective accounts of
the Banks in accordance with their respective
Commitment Percentages a commitment fee (each a
"Commitment Fee" and, in the aggregate, the
"Commitment Fee") equal to twenty-five basis
points (0.25%), calculated on the average daily
amount during each calendar quarter, or such
shorter period as may exist from the end of the
final calendar quarter occurring prior to the
Maturity Date until the Maturity Date, by which
the Total Commitment minus the sum of the
Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the
outstanding amount of Revolving Credit Loans
during such calendar quarter. The Commitment
Fee shall be payable quarterly in arrears on the
first day of each calendar quarter for the
immediately preceding calendar quarter
commencing on the first such date following the
date hereof, with a final payment on the earlier
to occur of (i) the Maturity Date and (ii) any
earlier date on which the Commitments shall
terminate pursuant hereto."
(iv) Section 2 of the Credit Agreement is hereby further
amended by inserting a new Section 2.9 as follows:
"2.9 Termination of Borrowing Base. Provided that no
Default or Event of Default then exists, the Borrower may
elect by written notice to the Agents to terminate the
Borrowing Base Effectiveness Period upon delivery to the
Agents of Compliance Certificates evidencing Consolidated
Net Income for the Borrower and its Subsidiaries of not less
than $10,000,000 per fiscal quarter for any two consecutive
fiscal quarters ending after June 30, 1999."
(v) Section 3.2 of the Credit Agreement is hereby amended
by inserting immediately after the word "exceeds" in the third
line the following:
"(i) the Borrowing Base, during the Borrowing Base
Effectiveness Period, or (ii)"
(vi) Section 4.1.1 of the Credit Agreement is hereby
amended by inserting immediately after the word "exceed" in clause
(b) of the first proviso, which clause begins in the eleventh
line, the following:
"(A) during the Borrowing Base Effectiveness Period, the
lesser of (1) the Borrowing Base, and (2) the Total
Commitment, and (B) at any other time,"
(vii) Section 9 of the Credit Agreement is hereby amended by
inserting in the first line immediately after the text "The
Borrower covenants and agrees that," the following:
"after the termination, if any, of the Borrowing Base
Effectiveness Period,"
(viii) Section 11 of the Credit Agreement is hereby
amended by adding a new Section 11.5 as follows:
"11.5 Borrowing Base. After giving effect to any Loan to be
made hereunder and any Letter of Credit to be issued,
extended or renewed hereunder, the principal amount of all
outstanding Loans plus the Maximum Drawing Amount plus the
amount of all outstanding Unpaid Reimbursement Obligations
shall not exceed, during the Borrowing Base Effectiveness
Period, the Borrowing Base."
(ix) Section 28 of the Credit Agreement is hereby deleted
in its entirety.
Amendment to Table of Contents. The Table of Contents of the Credit
Agreement shall be amended to the extent necessary to reflect the
amendments to the Credit Agreement made in subsection (a).
References Within Credit Agreement. Each reference in the Credit
Agreement to "this Agreement" and the words "hereof," "herein,"
"hereunder," or words of like import, shall mean and be a reference to
the Credit Agreement as amended by this Amendment.
Fees. The Borrower shall pay an amendment fee to each Bank equal to
0.10% of such Bank's Commitment. Such amendment fee shall be due and
payable and fully earned on the date hereof and shall be nonrefundable.
Conditions of Effectiveness. The effectiveness of Section 2 of this
Amendment shall be subject to the satisfaction of each of the following
conditions precedent:
Executed Counterpart. The Agents shall have received from the Borrower
a duly executed counterpart of this Amendment.
Fees and Expenses. The Borrower shall have paid (i) all fees then due
in accordance with Section 3 and (ii) all invoiced costs and expenses
then due in accordance with Section 6(d).
Officer's Certificate. The Agents shall have received a certificate of
a Designated Officer of the Borrower, stating that (A) the
representations and warranties contained in Section 5 below are true and
correct on and as of the Effective Date as though made on and as of the
Effective Date, and (B) on and as of the Effective Date, after giving
effect to the amendment of the Credit Agreement contemplated hereby, no
Default shall have occurred and be continuing;
Representations and Warranties; No Default. On the Effective Date,
after giving effect to the amendment of the Credit Agreement
contemplated hereby:
the representations and warranties contained in Section 5 below shall be
true and correct on and as of the Effective Date as though made on and
as of such date; and
no Default shall have occurred and be continuing.
Additional Documents. The Agent shall have received, in form and
substance satisfactory to it, such additional approvals, documents and
other information as the Agents or any Bank (through the Agents) may
reasonably request.
Representations and Warranties. To induce the Banks to enter into this
Amendment, the Borrower hereby confirms and restates, as of the date
hereof, the representations and warranties made by it in Section 6 of
the Credit Agreement and in the other Loan Documents. For the purposes
of this Section 5, (i) each reference in Section 6 of the Credit
Agreement to "this Agreement," and the words "hereof," "herein,"
"hereunder," or words of like import in such Section, shall mean and be
a reference to the Credit Agreement as amended by this Amendment, and
each reference in such Section to "the Loan Documents" shall mean and be
a reference to the Loan Documents as amended as contemplated hereby,
(ii) Section 6.3 of the Credit Agreement shall be deemed instead to
refer to the last day of the most recent fiscal year for which financial
statements have then been delivered, and (iii) any representations and
warranties which relate solely to an earlier date shall not be deemed
confirmed and restated as of the date hereof (provided that such
representations and warranties shall be true, correct and complete as of
such earlier date).
Miscellaneous.
Notice. The Agents shall notify the Borrower and the Banks of the
occurrence of the Effective Date.
Credit Agreement Otherwise Not Affected. Except as expressly amended
pursuant hereto, the Credit Agreement shall remain unchanged and in full
force and effect and is hereby ratified and confirmed in all respects.
The Banks' and the Agents' execution and delivery of, or acceptance of,
this Amendment and any other documents and instruments in connection
herewith (collectively, the "Amendment Documents") shall not be deemed
to create a course of dealing or otherwise create any express or implied
duty by any of them to provide any other or further amendments, consents
or waivers in the future.
No Reliance. The Borrower hereby acknowledges and confirms to the
Agents and the Banks that the Borrower is executing this Amendment and
the other Amendment Documents on the basis of its own investigation and
for its own reasons without reliance upon any agreement, representation,
understanding or communication by or on behalf of any other Person.
Costs and Expenses. The Borrower agrees to pay to the Agents on demand
the reasonable out-of-pocket costs and expenses of the Agents, and the
reasonable fees and disbursements of counsel to the Agents, in
connection with the negotiation, preparation, execution and delivery of
this Amendment and any other documents to be delivered in connection
herewith.
Binding Effect. This Amendment shall be binding upon, inure to the
benefit of and be enforceable by the Borrower, the Agents and each Bank
and their respective successors and assigns.
Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
Complete Agreement; Amendments. This Amendment, together with the other
Amendment Documents and the other Loan Documents, contains the entire
and exclusive agreement of the parties hereto and thereto with reference
to the matters discussed herein and therein. This Amendment supersedes
all prior commitments, drafts, communications, discussion and
understandings, oral or written, with respect thereto. This Amendment
may not be modified, amended or otherwise altered except in accordance
with the terms of Section 25 of the Credit Agreement.
Severability. Whenever possible, each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of this
Amendment shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be
deemed modified to conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so modified, it shall
be ineffective and invalid only to the extent of such prohibition or
invalidity without affecting the remaining provisions of this Amendment,
or the validity or effectiveness of such provision in any other
jurisdiction.
Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all
of which taken together shall constitute but one and the same agreement.
Interpretation. This Amendment and the other Amendment Documents are
the result of negotiations between and have been reviewed by counsel to
the Agents, the Borrower and other parties, and are the product of all
parties hereto. Accordingly, this Amendment and the other Amendment
Documents shall not be construed against any of the Banks or the Agents
merely because of the Agents' or any Bank's involvement in the
preparation thereof.
Loan Documents. This Amendment and the other Amendment Documents shall
constitute Loan Documents.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date first above written.
THE BORROWER
HMT TECHNOLOGY CORPORATION
By
Name:
Title:
THE AGENTS
CREDIT SUISSE FIRST BOSTON,
as Agent
By
Name:
Title:
By
Name:
Title:
FLEET NATIONAL BANK, as Agent
By
Name:
Title:
THE BANKS
CREDIT SUISSE FIRST BOSTON
By
Name:
Title:
By
Name:
Title:
FLEET NATIONAL BANK
By
Name:
Title:
Exhibit 10.1.2
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT (this "Amendment"), dated as
of August 16, 1999, is made between HMT TECHNOLOGY CORPORATION, a
Delaware corporation (the "Borrower") and CREDIT SUISSE FIRST BOSTON and
FLEET NATIONAL BANK, as agents for the Banks party to the Credit
Agreement referenced below (in such capacity, the "Agents").
The Borrower, the Banks and the Agents are parties to a Revolving Credit
Agreement dated as of November 2, 1998. The Borrower's obligations under
the Revolving Credit Agreement are secured by certain Collateral, as
more specifically described in that certain Security Agreement dated as
of November 2, 1998, between the Borrower and the Agents (the "Security
Agreement").
The Borrower, the Banks and the Agents have agreed to
certain amendments to the above-referenced Revolving Credit Agreement,
as more specifically set forth in that certain First Amendment to
Revolving Credit Agreement of even date herewith (the "First Amendment")
(the Revolving Credit Agreement, as amended by the First Amendment, the
"Credit Agreement").
In connection with the First Amendment, the Borrower has requested that
the Agents agree to certain amendments to the Security Agreement to,
among other things, release the Agents' security interest in certain
Collateral. The Agents have agreed to such request, subject to the
terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Definitions; Interpretation.
Terms Defined in Security Agreement. All capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings
assigned to them in the Security Agreement.
Interpretation. The rules of interpretation set forth in Section 1.2 of
the Credit Agreement shall be applicable to this Amendment and are
incorporated herein by this reference.
Partial Release of Collateral. Effective on the date of the
satisfaction of the conditions precedent set forth in Section 4 below
(the "Effective Date"), the Agents hereby release their security
interest in the following types or items of Collateral, whether now
existing or hereafter acquired or arising: all Accounts, all Documents,
all Equipment, all Inventory and, except as provided in the immediately
succeeding sentence, all Books. The Borrower agrees and acknowledges
that the Agents do not hereby release, and the Agents expressly retain,
their security interests and Liens upon all Collateral, whether now
existing or hereafter acquired or arising, consisting of Deposit
Accounts, Instruments, Investment Property, Chattel Paper, Books
relating to Deposit Accounts, Instruments, Investment Property or
Chattel Paper, products and Proceeds of any and all of the foregoing and
Letter of Credit Proceeds.
Reaffirmation of Liens. Except as expressly amended or released hereby,
the Borrower hereby reaffirms that the Liens granted to the Agents for
the benefit of the Banks under the Security Agreement and the other
Collateral Documents constitute valid and perfected first priority Liens
on the Collateral (subject only to Permitted Liens) securing the
Borrower's Obligations under the Credit Agreement and the other Loan
Documents.
Other Amendments to the Security Agreement.
Amendments. The Security Agreement shall be amended as follows,
effective as of the Effective Date:
Section 4 of the Security Agreement is hereby amended by deleting
subsections (g), (h) and (i).
(ii) Section 5 of the Security Agreement is hereby amended
by deleting subsections (l), (m), (p) and (q).
Section 6 of the Security Agreement is hereby amended by deleting
subsection (a).
(iv) Section 7 of the Security Agreement is hereby amended
and restated as follows:
"SECTION 7 Authorization; Agents Appointed
Attorney-in-Fact. The Agents shall have the right to, in the name
of the Borrower, or in the name of the Agents or otherwise,
without notice to or assent by the Borrower, and the Borrower
hereby constitutes and appoints the Agents (and any of each
Agent's officers or employees or agents designated by either
Agent) as the Borrower's true and lawful attorney-in-fact, with
full power and authority to:
(1) sign any of the Financing
Statements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the
Agents' security interest in the Collateral;
(2) take possession of and endorse
any notes, acceptances, checks, drafts, money orders or other
forms of payment or security in order to collect any Proceeds of
any Collateral;
(3) exercise dominion and control
over, and refuse to permit further withdrawals from, Deposit
Accounts maintained with the Agents, any Bank or any other bank,
financial institution or other Person;
(4) enforce payment or any other
rights in respect of any Collateral, grant consents, agree to any
amendments, modifications or waivers of the agreements and
documents governing any Collateral, and otherwise file any claims,
take any action or institute, defend, settle or adjust any
actions, suits or proceedings with respect to any Collateral, as
the Agents may deem necessary or desirable to maintain, preserve
and protect the Collateral, to collect the Collateral or to
enforce the rights of the Agents with respect to the Collateral;
(5) execute any and all
endorsements, assignments or other documents and instruments
necessary to sell, lease, assign, convey or otherwise transfer
title in or dispose of the Collateral;
(6) execute and deliver to any
securities intermediary or other Person any entitlement order,
Account Control Agreement or other notice, document or instrument
which the Agents may deem necessary of advisable to maintain,
protect, realize upon and preserve the Investment Property and the
Agents' security interest therein; and
(7) execute any and all such other
documents and instruments, and do any and all acts and things for
and on behalf of the Borrower, which the Agents may deem necessary
or advisable to maintain, protect, realize upon and preserve the
Collateral and the Agents' security interest therein and to
accomplish the purposes of this Agreement.
The Agents agree that, except upon the occurrence and
during the continuance of an Event of Default, it shall not
exercise the power of attorney, or any rights granted to the
Agents, pursuant to clauses (2) through (7). Subject to the
immediately preceding sentence with respect to the periods during
which the foregoing power of attorney may be exercised, the
foregoing power of attorney is coupled with an interest and
irrevocable so long as the Banks have any Commitments or the
Secured Obligations have not been paid and performed in full. The
Borrower hereby ratifies, to the extent permitted by law, all that
the Agents shall lawfully and in good faith do or cause to be done
by virtue of and in compliance with this Section 7."
(v) Section 10 of the Security Agreement is hereby amended
by deleting the text "or, in the case of Equipment, render it
nonfunctional," from the third line.
(vi) Section 22 of the Security Agreement is hereby amended
by deleting the text "earlier of (i) the release of the security
interest granted hereby pursuant to Section 28 of the Credit Agreement,
or (ii) the" from the first and second lines.
References Within Security Agreement. Each reference in the Security
Agreement to "this Agreement" and the words "hereof," "herein,"
"hereunder," or words of like import, shall mean and be a reference to
the Security Agreement as amended by this Amendment.
Conditions of Effectiveness. The effectiveness of this
Amendment shall be subject to the satisfaction of each of the following
conditions precedent:
Executed Counterpart. The Agents shall have received from the Borrower
a duly executed counterpart of this Amendment.
First Amendment to Revolving Credit Agreement. All conditions precedent
to the effectiveness of the First Amendment shall have been satisfied.
Representations and Warranties; No Default. On the Effective Date,
after giving effect to the amendment of the Security Agreement
contemplated hereby:
the representations and warranties contained in Section 5 below shall be
true and correct on and as of the Effective Date as though made on and
as of such date; and
no Default shall have occurred and be continuing.
Additional Documents. The Agent shall have received, in form and
substance satisfactory to it, such additional approvals, documents and
other information as the Agents or any Bank (through the Agents) may
reasonably request.
Representations and Warranties. To induce the Agents to
enter into this Amendment, the Borrower hereby confirms and restates, as
of the date hereof, the representations and warranties made by it in
Section 4 of the Security Agreement, after giving effect to the
amendments set forth in Section 2 above. For the purposes of this
Section 5, (i) each reference in Section 4 of the Security Agreement to
"this Agreement," and the words "hereof," "herein," "hereunder," or
words of like import in such Section, shall mean and be a reference to
the Security Agreement as amended by this Amendment, and each reference
in such Section to "the Loan Documents" shall mean and be a reference to
the Loan Documents as amended as contemplated hereby and (ii) any
representations and warranties which relate solely to an earlier date
shall not be deemed confirmed and restated as of the date hereof
(provided that such representations and warranties shall be true,
correct and complete as of such earlier date).
Miscellaneous.
Notice. The Agents shall notify the Borrower and the Banks of the
occurrence of the Effective Date.
Security Agreement Otherwise Not Affected. Except as expressly amended
pursuant hereto, the Security Agreement shall remain unchanged and in
full force and effect and is hereby ratified and confirmed in all
respects. The Banks' and the Agents' execution and delivery of, or
acceptance of, this Amendment and any other documents and instruments in
connection herewith (collectively, the "Amendment Documents") shall not
be deemed to create a course of dealing or otherwise create any express
or implied duty by any of them to provide any other or further
amendments, consents or waivers in the future.
No Reliance. The Borrower hereby acknowledges and confirms to the
Agents and the Banks that the Borrower is executing this Amendment and
the other Amendment Documents on the basis of its own investigation and
for its own reasons without reliance upon any agreement, representation,
understanding or communication by or on behalf of any other Person.
Costs and Expenses. The Borrower agrees to pay to the Agents on demand
the reasonable out-of-pocket costs and expenses of the Agents, and the
reasonable fees and disbursements of counsel to the Agents, in
connection with the negotiation, preparation, execution and delivery of
this Amendment and any other documents to be delivered in connection
herewith.
Binding Effect. This Amendment shall be binding upon, inure to the
benefit of and be enforceable by the Borrower, the Agents and each Bank
and their respective successors and assigns.
Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
Complete Agreement; Amendments. This Amendment, together with the other
Amendment Documents and the other Loan Documents, contains the entire
and exclusive agreement of the parties hereto and thereto with reference
to the matters discussed herein and therein. This Amendment supersedes
all prior commitments, drafts, communications, discussion and
understandings, oral or written, with respect thereto. This Amendment
may not be modified, amended or otherwise altered except in accordance
with the terms of Section 25 of the Credit Agreement.
Severability. Whenever possible, each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of this
Amendment shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be
deemed modified to conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so modified, it shall
be ineffective and invalid only to the extent of such prohibition or
invalidity without affecting the remaining provisions of this Amendment,
or the validity or effectiveness of such provision in any other
jurisdiction.
Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all
of which taken together shall constitute but one and the same agreement.
Interpretation. This Amendment and the other Amendment Documents are
the result of negotiations between and have been reviewed by counsel to
the Agents, the Borrower and other parties, and are the product of all
parties hereto. Accordingly, this Amendment and the other Amendment
Documents shall not be construed against any of the Banks or the Agents
merely because of the Agents' or any Bank's involvement in the
preparation thereof.
Loan Documents. This Amendment and the other Amendment Documents shall
constitute Loan Documents.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date first above written.
THE BORROWER
HMT TECHNOLOGY CORPORATION
By
Name:
Title:
THE AGENTS
CREDIT SUISSE FIRST BOSTON,
as Agent
By
Name:
Title:
By
Name:
Title:
FLEET NATIONAL BANK, as Agent
By
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF
OPERATIONS INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD
ENDED September 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 50,934
<SECURITIES> 0
<RECEIVABLES> 32,925
<ALLOWANCES> 0
<INVENTORY> 13,682
<CURRENT-ASSETS> 103,215
<PP&E> 297,113
<DEPRECIATION> 0
<TOTAL-ASSETS> 405,857
<CURRENT-LIABILITIES> 24,575
<BONDS> 230,000
0
0
<COMMON> 45
<OTHER-SE> 135,036
<TOTAL-LIABILITY-AND-EQUITY> 405,857
<SALES> 44,791
<TOTAL-REVENUES> 44,791
<CGS> 55,818
<TOTAL-COSTS> 55,818
<OTHER-EXPENSES> 4,812
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,781
<INCOME-PRETAX> (18,620)
<INCOME-TAX> (5,586)
<INCOME-CONTINUING> (13,034)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,034)
<EPS-BASIC> ($0.29)
<EPS-DILUTED> ($0.29)
</TABLE>
