<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended JUNE 29, 1997
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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 0-14709
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HUTCHINSON TECHNOLOGY INCORPORATED
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(Exact name of registrant as specified in its charter)
MINNESOTA 41-0901840
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 WEST HIGHLAND PARK, HUTCHINSON, MINNESOTA 55350
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(Address of principal executive offices) (Zip code)
(320) 587-3797
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(Registrant's telephone number, including area code)
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(Former name, address or fiscal year, if changed since last report)
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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of July 31, 1997 the registrant had 19,583,938 shares of Common Stock issued
and outstanding.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(Dollars in thousands, except shares and per share data)
June 29, September 29,
1997 1996
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ASSETS
Current assets:
Cash and cash equivalents $120,249 $ 22,884
Securities available for sale 26,262 3,064
Trade receivables, net 61,912 46,803
Other receivables 26,808 9,475
Inventories 20,720 17,235
Prepaid taxes and other expenses 10,514 9,204
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Total current assets 266,465 108,665
Property, plant and equipment, net 150,308 121,706
Other assets 8,585 8,612
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$425,358 $238,983
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt $ 5,752 $ 5,760
Accounts payable and accrued expenses 29,445 23,008
Accrued compensation 25,147 12,187
Accrued income taxes 5,535 5,608
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Total current liabilities 65,879 46,563
Long-term debt 74,737 53,185
Other long-term liabilities 3,497 5,551
Shareholders' investment:
Common stock, $.01 par value, 45,000,000
shares authorized, 19,532,000 and
16,356,000 issued and outstanding 196 164
Additional paid-in capital 149,374 43,343
Retained earnings 131,675 90,177
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Total shareholders' investment 281,245 133,684
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$425,358 $238,983
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See accompanying notes to condensed consolidated financial statements.
<PAGE>
HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
----------------------- -----------------------
June 29, June 23, June 29, June 23,
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Net sales $121,713 $91,418 $352,878 $261,296
Cost of sales 88,534 69,632 249,907 200,187
-------- ------- -------- --------
Gross profit 33,179 21,786 102,971 61,109
Research and development
expenses 4,671 6,239 15,157 19,042
Selling, general and
administrative expenses 11,955 8,669 34,921 25,769
-------- ------- -------- --------
Income from operations 16,553 6,878 52,893 16,298
Other income, net 1,759 267 2,926 956
Interest expense (759) (482) (2,626) (1,369)
-------- ------- -------- --------
Income before income taxes 17,553 6,663 53,193 15,885
Provision for income taxes 3,855 1,464 11,695 3,492
-------- ------- -------- --------
Net income $ 13,698 $ 5,199 $ 41,498 $ 12,393
-------- ------- -------- --------
-------- ------- -------- --------
Net income per common
and common equivalent share $ .68 $ .31 $ 2.24 $ .74
-------- ------- -------- --------
-------- ------- -------- --------
Weighted average common and
common equivalent shares outstanding 20,276 16,818 18,526 16,815
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Dollars in thousands)
Thirty-Nine Weeks Ended
-----------------------
June 29, June 23,
1997 1996
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Operating activities:
Net income $ 41,498 $12,393
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 28,938 23,881
Deferred tax benefit (752) (1,138)
Loss on disposal of assets 57 241
Change in operating assets and
liabilities (Note 7) (5,148) 4,891
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Cash provided by operating activities 64,593 40,268
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Investing activities:
Capital expenditures (51,588) (56,798)
Proceeds from sale of building - 15,300
Increase in other receivables (18,346) (3,007)
Sales of securities 4,195 3,070
Purchases of securities (27,393) (3,941)
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Cash used for investing activities (93,132) (45,376)
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Financing activities:
Repayments of long-term debt (3,455) (1,440)
Proceeds from issuance of long-term debt 25,000 500
Net proceeds from issuance of common stock 104,359 137
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Cash provided by (used for)
financing activities 125,904 (803)
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Net increase (decrease) in cash and cash
equivalents 97,365 (5,911)
Cash and cash equivalents at beginning of period 22,884 30,479
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Cash and cash equivalents at end of period $120,249 $24,568
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See accompanying notes to condensed consolidated financial statements.
<PAGE>
HUTCHINSON TECHNOLOGY INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
(Dollars in thousands)
(1) ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The information furnished in the
condensed consolidated financial statements includes normal recurring
adjustments and reflects all adjustments which are, in the opinion of
management, necessary for a fair presentation of such financial statements.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Although the Company believes that the disclosures are adequate
to make the information presented not misleading, it is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
Annual Report on Form 10-K. The quarterly results are not necessarily
indicative of the actual results that may occur for the entire fiscal year.
(2) NEW ACCOUNTING PRONOUNCEMENT
During March 1997, the Financial Accounting Standards Board released Statement
of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings per Share",
which requires the disclosure of basic earnings per share and diluted earnings
per share. The Company expects to adopt SFAS 128 in fiscal 1998 and anticipates
it will not have an impact on previously reported earnings per share.
(3) BUSINESS AND CUSTOMERS
The Company is the world's leading supplier of suspension assemblies for rigid
disk drives. Suspension assemblies hold the recording heads in position above
the spinning magnetic disks in the drive and are critical to maintaining the
necessary microscopic clearance between the head and disk. The Company
developed its leadership position in suspension assemblies through research,
development and design activities coupled with a substantial investment in
manufacturing technologies and equipment. The Company is focused on continuing
to develop suspension assemblies which address the rapidly changing requirements
of the rigid disk drive industry. The Company also is evaluating other product
opportunities in the medical devices market but does not expect any
medical-related revenues in fiscal 1997. A breakdown of customer sales is as
follows:
Thirteen Weeks Ended Thirty-Nine Weeks Ended
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June 29, June 23, June 29, June 23,
1997 1996 1997 1996
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Percentage of Net Sales
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Five Largest Customers 84% 87% 85% 88%
Seagate Technology Incorporated 35 31 35 32
SAE Magnetics, Ltd./TDK 13 15 13 14
Read-Rite Corporation 12 15 13 16
Yamaha Corporation 12 17 13 16
IBM 12 9 11 10
<PAGE>
(4) CASH, CASH EQUIVALENTS AND SECURITIES AVAILABLE FOR SALE
Cash equivalents consist of all highly liquid investments with maturities of
less than 90 days. Securities available for sale consist of investments with
original maturities greater than 90 days which are intended to be held less than
one year. Securities available for sale at June 29, 1997 consisted of U.S.
government securities with a market value and cost of $26,262,000. Securities
totaling $3,262,000 have been pledged for certain self-insured reserves.
(5) INVENTORIES
All inventories are stated at the lower of last-in, first-out (LIFO) cost or
market. Inventories consisted of the following:
June 29, September 29,
1997 1996
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Raw materials $ 9,244 $ 4,137
Work in process 7,038 5,558
Finished goods 4,728 7,830
LIFO reserve (290) (290)
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$20,720 $17,235
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(6) INCOME TAXES
The following table details the significant components of the Company's deferred
tax assets as of June 29, 1997:
June 29, September 29,
1997 1996
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Current deferred tax assets:
Sales and accounts receivables $ 1,132 $ 873
Inventories 6,301 5,419
Accruals and other reserves 2,573 2,367
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Total current deferred tax assets 10,006 8,659
Long-term deferred tax assets (liabilities):
Property, plant and equipment 3,737 3,753
Accruals and other reserves 1,747 2,146
Tax credits 1,820 2,738
Valuation allowance - (738)
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Total long-term deferred tax assets 7,304 7,899
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Total deferred tax assets $17,310 $16,558
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The following table lists the types of tax credits available to the Company, and
their expiration dates:
Year of
Carryforward Amount Expiration
- ------------ ------ ----------
Alternative minimum tax $1,820 Does not expire
<PAGE>
(7) SUPPLEMENTARY CASH FLOW INFORMATION
Thirty-Nine Weeks Ended
-----------------------
June 29, June 23,
1997 1996
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Changes in operating assets and liabilities:
Trade receivables, net ($15,109) ($2,240)
Inventories (3,485) (5,431)
Prepaid and other expenses 426 (2,875)
Accounts payable and accrued liabilities 15,075 12,437
Other noncurrent liabilities (2,055) 3,000
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($5,148) $ 4,891
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Cash paid for:
Interest (net of amount capitalized) $ 1,502 $ 2,433
Income taxes 10,424 5,674
Capitalized interest for the thirty-nine weeks ended June 29, 1997 was
$1,905,000 compared to $814,000 for the comparable period in fiscal 1996.
(8) SALE OF COMMON STOCK
In February 1997, the Company issued 3,000,000 shares of its common stock
through a public offering. The Company received net proceeds of $102,900,000
and is using the funds for general corporate purposes, primarily expenditures
for manufacturing and support equipment and construction of the Company's
photoetch plant at its Eau Claire, Wisconsin site. Pending such uses, the
Company has invested the net proceeds from the offering in short-term debt
securities.
(9) STOCK SPLIT
On January 20, 1997, the Company announced that its Board of Directors approved
a three-for-one stock split of the Company's common stock, effective at the
close of business on February 11, 1997. Common share and earnings per share
amounts in the accompanying condensed consolidated statements have been
retroactively adjusted to reflect the stock split.
<PAGE>
HUTCHINSON TECHNOLOGY INCORPORATED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED JUNE 29, 1997 VS. THIRTEEN WEEKS ENDED JUNE 23, 1996.
Net sales for the thirteen weeks ended June 29, 1997 were $121,713,000, an
increase of $30,295,000 or 33% compared to the comparable period in fiscal 1996.
This increase was primarily due to increased suspension assembly volume.
Gross profit for the thirteen weeks ended June 29, 1997 was $33,179,000, an
increase of $11,393,000 or 52% compared to the comparable period in fiscal 1996,
and gross profit as a percent of net sales increased from 24% to 27%, primarily
due to higher sales volume and improved manufacturing efficiencies.
Research and development expenses for the thirteen weeks ended June 29, 1997
were $4,671,000 compared to $6,239,000 for the thirteen weeks ended June 23,
1996. The prior year amount includes manufacturing expenses related to
production of TSA-TM- prototype suspensions.
Selling, general and administrative expenses for the thirteen weeks ended June
29, 1997 were $11,955,000, an increase of $3,286,000 or 38% compared to the
comparable period in fiscal 1996. The majority of the increase was due to
increased profit sharing and other incentive compensation costs of $1,911,000
and an increase in labor expenses of $599,000. As a percent of net sales,
selling, general and administrative expenses increased from 9% to 10%.
Other income for the thirteen weeks ended June 29, 1997 was $1,759,000, an
increase of $1,492,000, primarily due to an increase in interest income as a
result of a higher average investment balance.
Interest expense for the thirteen weeks ended June 29, 1997 was $759,000, an
increase of $277,000 from the comparable period in fiscal 1996, primarily due to
higher average outstanding debt, offset partially by higher capitalization of
interest of $604,000.
The income tax provision for the thirteen weeks ended June 29, 1997 was based on
an estimated effective tax rate for the fiscal year of 22% which was below the
statutory federal rate primarily due to the large portion of sales that
qualifies for the benefit of the Company's Foreign Sales Corporation.
Net income for the thirteen weeks ended June 29, 1997 was $13,698,000, an
increase of $8,499,000 compared to the comparable period in fiscal 1996. As a
percent of net sales, net income increased from 6% to 11% primarily due to the
higher sales volume and improved manufacturing efficiencies, noted above.
THIRTY-NINE WEEKS ENDED JUNE 29, 1997 VS. THIRTY-NINE WEEKS ENDED JUNE 23, 1996.
Net sales for the thirty-nine weeks ended June 29, 1997 were $352,878,000, an
increase of $91,582,000 or 35% compared to the comparable period in fiscal 1996.
This increase was primarily due to increased suspension assembly volume.
Gross profit for the thirty-nine weeks ended June 29, 1997 was $102,971,000, an
increase of $41,862,000 or 69% compared to the comparable period in fiscal 1996,
and gross profit as a percent of
<PAGE>
net sales increased from 23% to 29%, primarily due to higher sales volume and
improved manufacturing efficiencies.
Research and development expenses for the thirty-nine weeks ended June 29, 1997
were $15,157,000 compared to $19,042,000 for the thirty-nine weeks ended June
23, 1996. The expenses for the first quarter of fiscal 1996 included a
$5,500,000 charge related to a technology sharing agreement with IBM. Excluding
the charge, research and development expenses increased mainly due to increased
development efforts on TSA-TM- suspensions.
Selling, general and administrative expenses for the thirty-nine weeks ended
June 29, 1997 were $34,921,000, an increase of $9,152,000 or 36% compared to the
comparable period in fiscal 1996. The increased expenses were due primarily to
increased profit sharing and other incentive compensation costs of $6,800,000
and a $1,631,000 increase in labor expenses. As a percent of net sales,
selling, general and administrative expenses remained at 10%.
Other income for the thirty-nine weeks ended June 29, 1997 was $2,926,000, an
increase of $1,970,000. The increase was primarily due to an increase of
$2,638,000 in interest income as a result of a higher average investment balance
offset partially by a $565,000 increase in royalties paid under licensing
agreements.
Interest expense for the thirty-nine weeks ended June 29, 1997 was $2,626,000,
an increase of $1,257,000 from the comparable period in fiscal 1996, primarily
due to higher average outstanding debt, offset partially by higher
capitalization of interest of $1,091,000.
The income tax provision for the thirty-nine weeks ended June 29, 1997 was based
on an estimated effective tax rate for the fiscal year of 22% which was below
the statutory federal rate primarily due to the large portion of sales that
qualifies for the benefit of the Company's Foreign Sales Corporation.
Net income for the thirty-nine weeks ended June 29, 1997 was $41,498,000, an
increase of $29,105,000 compared to the comparable period in fiscal 1996. As a
percent of net sales, net income increased from 5% to 12% primarily due to the
higher sales volume and improved manufacturing efficiencies, noted above.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity are cash flow from operations, cash
balances and additional financing capacity. The Company's cash and cash
equivalents increased to $120,249,000 at June 29, 1997 compared to $22,884,000
at September 29, 1996. The increase is primarily a result of the stock offering
noted below. The Company generated cash from operating activities of
$64,593,000 for the thirty-nine weeks ended June 29, 1997.
In February 1997, the Company issued 3,000,000 shares of its common stock
through a public offering. The Company received net proceeds of $102,900,000
and is using the funds for general corporate purposes, primarily expenditures
for manufacturing and support equipment and construction of the Company's
photoetch plant at its Eau Claire, Wisconsin site. Pending such uses, the
Company has invested the net proceeds from the offering in short-term debt
securities.
<PAGE>
Cash used for capital expenditures totaled $51,588,000 for the thirty-nine weeks
ended June 29, 1997, a decrease of $5,210,000 from the comparable period in
fiscal 1996. The expenditures for the thirty-nine weeks ended June 29, 1997
were primarily for manufacturing and support equipment and construction costs of
the photoetch plant at the Company's Eau Claire site. The Company anticipates,
but is not contractually committed to, fiscal 1997 expenditures of approximately
$90,000,000 primarily for manufacturing and support equipment and construction
of the Company's Eau Claire photoetch plant. Financing of these capital
expenditures will be principally from cash generated from operations, cash and
cash equivalents and additional financing capacity. The Company anticipates
financing a new Sioux Falls, South Dakota assembly plant through a lease
transaction and internal financing.
During the fourth quarter of fiscal 1996, the Company completed a $50,000,000
private debt placement, of which $25,000,000 was issued in July 1996 as senior
unsecured notes having a fixed rate of 7.85%, annual principal payments of
$8,333,000 beginning on July 26, 2001 and maturing in July 2003. The Company
issued the remaining $25,000,000 during the first quarter of fiscal 1997 as a
senior unsecured note having a fixed rate of 8.07%, annual principal payments of
$4,167,000 beginning on November 26, 2001 and maturing in November 2006.
During the first quarter of fiscal 1997, the Company signed a Master Lease
Agreement for up to $25,000,000 with General Electric Capital Corporation. The
agreement provides for leasing of various manufacturing equipment in fiscal 1997
for a noncancellable term of four years with various alternatives at the end of
the lease term.
The Company established a $25,000,000 unsecured credit facility with The First
National Bank of Chicago during the first quarter of fiscal 1996. At June 29,
1997, the Company had a letter of credit under this facility of $1,425,000 as
security for its variable rate demand note with the City of Hutchinson.
The Company's financing agreements contain various restrictive covenants. As of
June 29, 1997, the Company was in compliance with all such covenants.
The Company believes that cash generated from operations, cash and cash
equivalents, existing lending facilities and available financing capacity will
be sufficient to meet the Company's current and long-term liquidity, debt
installments and capital requirements.
During March 1997, the Financial Accounting Standards Board released Statement
of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings per Share",
which requires the disclosure of basic earnings per share and diluted earnings
per share. The Company expects to adopt SFAS 128 in fiscal 1998 and anticipates
it will not have an impact on previously reported earnings per share.
MARKET TRENDS AND CERTAIN CONTINGENCIES
The Company expects that the expanding use of personal computers and network
servers, increasingly complex software and the emergence of new applications for
disk storage that have contributed to the historical year-to-year increases in
disk drive production will continue for the foreseeable future. The Company
also believes demand for disk drives will continue to be subject, as it has in
the past, to rapid short-term changes resulting from, among other things,
changes in disk drive inventory levels, responses to competitive price changes
and unpredicted high or low market acceptance of new drive models.
<PAGE>
As in past years, disk drives continue to be the storage device of choice for
applications requiring low access times and higher capacities because of their
speed and low cost per megabyte of stored data. The cost of storing data on
disk drives continues to decrease primarily due to increasing areal density, the
amount of data which can be stored on magnetic disks. Improvements in areal
density have been attained by lowering the fly height of the read/write head,
using smaller read/write heads and using new read/write head types such as those
of magneto-resistive (MR) design. The move to MR heads, which require more
electrical leads, and the transition to smaller or pico-sized heads, may compel
drive manufacturers to use newer suspension technologies, such as the Company's
TSA-TM- suspensions. Although customer demand for TSA-TM- suspensions is
growing, the Company expects that conventional suspensions will make up a
majority of its shipments for the next couple of years.
The introduction of new types or sizes of read/write heads and new disk drive
designs tends to decrease customers' yields with the result that the Company may
experience temporary elevations of demand for some types of suspension
assemblies. The advent of new heads and new drive designs may require the
Company to rapidly develop and manufacture new suspension types which
temporarily may reduce the Company's manufacturing yields and efficiencies.
There can be no assurance that such changes will not continue to affect the
Company.
The Company generally experiences declining selling prices due to product
maturity and competitive pricing pressures. These forces may be temporarily
offset when the Company's new products, having initially higher selling prices,
enter the market.
The statements above under the heading "Market Trends and Certain Contingencies"
about demand for disk drives and suspension assemblies, including TSA-TM-
suspensions, manufacturing yields and selling prices, and the statements under
the heading "Liquidity and Capital Resources" about anticipated capital
expenditures and capital resources, are forward-looking statements based on
current expectations. These statements are subject to risks and uncertainties,
including slower or faster acceptance of its new products, difficulties in
producing its TSA-TM- suspensions, difficulties in expanding capacity and those
discussed above. These factors may cause the Company's actual future results to
differ materially from historical earnings and from the financial performance of
the Company presently anticipated.
The Company and certain users of the Company's products have from time to time
received, and may in the future receive, communications from third parties
asserting patents against the Company or its customers which may relate to
certain of the Company's manufacturing equipment or products or to products
which include the Company's products as a component. Although the Company has
not been a party to any material intellectual property litigation, certain of
its customers have been sued on patents having claims closely related to
products sold by the Company. In the event any third party were to make a valid
infringement claim and a license were not available on terms acceptable to the
Company, the Company's operating results could be adversely affected. The
Company expects that, as the number of patents issued continues to increase, and
as the Company grows, the volume of intellectual property claims could increase.
The Company is party to certain other claims arising in the ordinary course of
business. In the opinion of management, the outcome of such claims will not
materially affect the Company's current or future financial position or results
of operations.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
A) EXHIBITS.
3.1 Restated Articles of Incorporation of the Company, as amended by
Articles of Amendment dated January 27, 1988 and as amended by Articles of
Amendment dated January 21, 1997.
.
3.2 Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2
to the Company's Quarterly Report on Form 10-Q for the quarter ended
December 29, 1996, File No. 0-14709).
4.1 Instruments defining the rights of security holders, including an
indenture. The Registrant agrees to furnish the Securities and Exchange
Commission upon request copies of instruments with respect to long-term
debt.
4.2 Note Purchase Agreement dated as of April 20, 1994, providing for the
placement of $20,000,000 of senior unsecured notes with Teachers Insurance
and Annuity Association of America (incorporated by reference to Exhibit
4.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 27, 1994, File No. 0-14709), Amendment dated as of March 15, 1996
(incorporated by reference to Exhibit 4.2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 24, 1996, File No. 0-14709), and
Amendment dated as of February 24, 1997 (incorporated by reference to
Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 30, 1997, File No. 0-14709).
4.3 Note Purchase Agreement dated as of April 20, 1994, providing for the
placement of $5,000,000 of senior unsecured notes with Central Life
Assurance Company (incorporated by reference to Exhibit 4.11 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 27,
1994, File No. 0-14709), Amendment dated as of March 15, 1996 (incorporated
by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 24, 1996, File No. 0-14709), and Amendment
dated as of February 24, 1997 (incorporated by reference to Exhibit 4.3 to
the Company's Quarterly Report on Form 10-Q for the quarter ended March 30,
1997, File No. 0-14709).
4.4 Note Purchase Agreement dated as of April 20, 1994, providing for the
placement of $5,000,000 of senior unsecured notes with Modern Woodmen of
America (incorporated by reference to Exhibit 4.12 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 27, 1994, File
No. 0-14709), Amendment dated as of March 15, 1996 (incorporated by
reference to Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 24, 1996, File No. 0-14709), and Amendment dated as
of February 24, 1997 (incorporated by reference to Exhibit 4.4 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 30,
1997, File No. 0-14709).
4.5 Credit Agreement between the Company and The First National Bank of
Chicago, dated as of December 8, 1995 (incorporated by reference to Exhibit
4.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended
December 24, 1995, File No. 0-14709), First Amendment dated as of June 22,
1996 (incorporated by reference to Exhibit 4.5 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 23, 1996, File No. 0-14709),
and Second Amendment dated as of February 24, 1997 (incorporated by
<PAGE>
reference to Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 30, 1997, File No. 0-14709).
4.6 Note Purchase Agreement dated as of July 26, 1996, providing for the
placement of $15,000,000 of senior unsecured notes with Metropolitan
Insurance and Annuity Company (incorporated by reference to Exhibit 4.6 to
the Company's Annual Report on Form 10-K for the fiscal year ended
September 29, 1996, File No. 0-14709), and Amendment dated as of February
24, 1997 (incorporated by reference to Exhibit 4.6 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 30, 1997, File
No. 0-14709).
4.7 Note Purchase Agreement dated as of July 26, 1996, providing for the
placement of $10,000,000 of senior unsecured notes with Metropolitan Life
Insurance Company (incorporated by reference to Exhibit 4.7 to the
Company's Annual Report on Form 10-K for the fiscal year ended September
29, 1996, File No. 0-14709), and Amendment dated as of February 24, 1997
(incorporated by reference to Exhibit 4.7 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 30, 1997, File No. 0-14709).
4.8 Note Purchase Agreement dated as of July 26, 1996, providing for the
placement of $25,000,000 of senior unsecured notes with Teachers Insurance
and Annuity Association of America (incorporated by reference to Exhibit
4.8 to the Company's Annual Report on Form 10-K for the fiscal year ended
September 29, 1996, File No. 0-14709), and Amendment dated as of February
24, 1997 (incorporated by reference to Exhibit 4.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 30, 1997, File
No. 0-14709).
10.1 Lease with Right of Refusal between Donald Wendorff and Laura Wendorff,
Lessors, and the Company, Lessee, dated September 6, 1995 (incorporated by
reference to Exhibit 10.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended September 24, 1995, File No. 0-14709).
10.2 Office/Warehouse Lease between OPUS Corporation, Lessor, and the Company,
Lessee, dated December 29, 1995 (incorporated by reference to Exhibit 10.2
to the Company's Quarterly Report on Form 10-Q for the quarter ended March
24, 1996, File No. 0-14709), and First Amendment to Office/Warehouse Lease
dated April 30, 1996 (incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 23,
1996, File No. 0-14709).
10.3 Building Lease dated April 1988 and Amendment to Building Lease dated
August 29, 1988 (incorporated by reference to Exhibit 10.9 to the Company's
Annual Report on Form 10-K for the fiscal year ended September 25, 1988,
File No. 0-14709), Second Amendment to Building Lease dated as of September
18, 1989, relating to the Company's Sioux Falls, South Dakota facility
(incorporated by reference to Exhibit 10.9 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1990, File No.
0-14709), Third Amendment to Building Lease dated September 19, 1991,
relating to the Company's Sioux Falls, South Dakota facility
(incorporated by reference to Exhibit 10.9 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 29, 1991, File No.
0-14709), Fourth Amendment to Commercial Lease dated September 29, 1992,
relating to the Company's Sioux Falls, South Dakota facility (incorporated
by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K
for the fiscal year ended
<PAGE>
September 27, 1992, File No. 0-14709), Fifth Amendment to Commercial Lease
dated February 11, 1993, relating to the Company's Sioux Falls, South
Dakota facility (incorporated by reference to Exhibit 10.6 to the Company's
Annual Report on Form 10-K for the fiscal year ended September 24, 1995,
File No. 0-14709), Sixth Amendment to Commercial Lease dated February 17,
1995, relating to the Company's Sioux Falls, South Dakota facility
(incorporated by reference to Exhibit 10.6 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 24, 1995, File No.
0-14709), and Seventh Amendment to Commercial Lease dated April 1, 1995,
relating to the Company's Sioux Falls, South Dakota facility (incorporated
by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K
for the fiscal year ended September 24, 1995, File No. 0-14709).
10.4 Hutchinson Technology Incorporated 401-K Plan and related 401-K Trust
(incorporated by reference to Exhibit 10.10 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1990, File No.
0-14709), and Amendment effective April 1, 1995 (incorporated by reference
to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 24, 1996, File No. 0-14709), and Amendment effective
April 1, 1996 (incorporated by reference to Exhibit 10.4 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 23, 1996, File No.
0-14709).
.
10.5 Directors' Retirement Plan effective as of January 1, 1992 (incorporated by
reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for
the fiscal year ended September 27, 1992, File No. 0-14709).
10.6 Description of Bonus Program for Key Employees of Hutchinson
Technology Incorporated (incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the fiscal year ended September
27, 1992, File No. 0-14709).
10.7 1988 Stock Option Plan (incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the fiscal year ended September
25, 1988, File No. 0-14709), Amendment to the 1988 Stock Option Plan
(incorporated by reference to Exhibit 10.5 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 26, 1993, File No.
0-14709), and Amendment to the 1988 Stock Option Plan (incorporated by
reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 26, 1995, File No. 0-14709).
*10.8 Technology Transfer and Development Agreement, effective as of September
1, 1994, between Hutchinson Technology Incorporated and International
Business Machines Corporation (incorporated by reference to Exhibit 10.10
to the Company's Quarterly Report on Form 10-Q/A for the quarter ended
June 25, 1995, File No. 0-14709), and Amendment dated December 11, 1995 to
the Technology Transfer and Development Agreement between International
Business Machines Corporation and Hutchinson Technology Incorporated
executed June 15, 1995 (incorporated by reference to Exhibit 10.8 to the
Company's Quarterly Report on Form 10-Q for the quarter ended December 24,
1995, File No. 0-14709).
*10.9 Patent License Agreement, effective as of September 1, 1994, between
Hutchinson Technology Incorporated and International Business Machines
Corporation (incorporated
<PAGE>
by reference to Exhibit 10.11 to the Company's Quarterly Report on Form
10-Q/A for the quarter ended June 25, 1995, File No. 0-14709).
10.10 Lease Agreement between Meridian Eau Claire LLC and Hutchinson Technology
Incorporated, dated May 1, 1996 (incorporated by reference to Exhibit
10.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 23, 1996, File No. 0-14709).
10.11 Master Lease Agreement dated as of December 19, 1996 between General
Electric Capital Corporation, as Lessor, and Hutchinson Technology
Incorporated, as Lessee (incorporated by reference to Exhibit 10.11 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
December 29, 1996, File No. 0-14709).
.
10.12 Hutchinson Technology Incorporated 1996 Incentive Plan (incorporated by
reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q
for the quarter ended December 29, 1996, File No. 0-14709).
11 Statement Regarding Computation of Net Income Per Share.
27 Financial Data Schedule.
B) REPORTS ON FORM 8-K.
No Current Reports on Form 8-K were filed during the thirteen weeks ended
June 29, 1997.
* Exhibits 10.8 and 10.9 contain portions for which confidential treatment
has been granted by the Securities and Exchange Commission.
<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.
HUTCHINSON TECHNOLOGY INCORPORATED
Date: August 1, 1997 By /s/Wayne M. Fortun
----------------------------- --------------------------------
Wayne M. Fortun
President, Chief Executive Officer
and Chief Operating Officer
Date: August 1, 1997 By /s/John A. Ingleman
----------------------------- --------------------------------
John A. Ingleman
Vice President, Chief Financial
Officer and Secretary
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Page
------- ----
3.1 Restated Articles, as amended Electronically
Filed
11 Statement Regarding Computation of Net
Income Per Share Electronically
Filed
27 Financial Data Schedule Electronically
Filed
<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
HUTCHINSON TECHNOLOGY INCORPORATED
ARTICLE I
The name of this Corporation is Hutchinson Technology Incorporated.
ARTICLE II
The registered office of this Corporation is located at 40 West
Highland Park, Hutchinson, Minnesota 55350.
ARTICLE III
This Corporation is authorized to issue an aggregate total of
15,000,000 shares, all of which shall be designated Common Stock, $.02 par
value.
ARTICLE IV
The shareholders of this Corporation shall have no preemptive right to
subscribe to any issue of shares of any class of this Corporation now or
hereafter made. Voting by shareholders shall not be cumulative.
ARTICLE V
(a) Whether or not a vote of shareholders is otherwise required, the
affirmative vote of the holders of not less than two-thirds of the voting power
of the outstanding "voting shares" (as hereinafter defined) of the Corporation
shall be required for (i) the approval or authorization of any "Related Person
Business Transaction" (as hereinafter defined) involving the Corporation or (ii)
the approval or authorization by the Corporation, in its capacity as a
shareholder, of any Related Person Business Transaction involving a "Subsidiary"
(as hereinafter defined) which requires the approval or authorization of the
shareholders of the Subsidiary; provided, however, that such two-thirds voting
requirement shall not be applicable if the "Continuing Directors" (as
hereinafter defined) by a vote of not less than the greater of (A) two-thirds or
(B) two of the Continuing Directors have expressly approved the Related Person
Business Transaction.
<PAGE>
(b) For the purposes of this Article V:
(i) The term "Related Person Business Transaction" shall mean (A) any
merger of the Corporation or a Subsidiary with or into a Related Person, (B) any
exchange of shares of the Corporation or a Subsidiary for shares of a Related
Person which, in the absence of this Article, would have required the
affirmative vote of at least a majority of the voting power of the outstanding
shares of the Corporation entitled to vote or the affirmative vote of the
Corporation, in its capacity as a shareholder of the Subsidiary, (C) any sale,
lease, exchange, transfer, or other disposition (in one transaction or a series
of transactions), including without limitation a mortgage or any other security
device, of all or any "Substantial Part" (as hereinafter defined) of the assets
either of the Corporation (including without limitation any voting shares of a
Subsidiary) or of a Subsidiary to or with a Related Person, (D) any sale, lease,
exchange, transfer, or other disposition (in one transaction or a series of
transactions) of all or any Substantial Part of the assets of a Related Person
to or with the Corporation or a Subsidiary, (E) the issuance of any securities
of the Corporation (except pursuant to stock dividends, stock splits, or similar
transactions which would not have the effect of increasing the proportionate
voting power of a Related Person) or of a Subsidiary to a Related Person, (F)
any recapitalization or reclassification that would have the effect of
increasing the proportionate voting power of a Related Person, (G) the adoption
of any plan or proposal for the liquidation or dissolution of the Corporation at
the time the Corporation has a Related Person, and (H) any agreement, contract,
arrangement, or understanding providing for any of the transactions described in
this definition of Related Person Business Transaction.
(ii) The term "Related Person" shall mean and include (A) any person
or entity which, together with its "Affiliates" and "Associates" (both as
hereinafter defined), "beneficially owns" (as hereinafter defined) in the
aggregate 20 percent or more of the outstanding voting shares of the
Corporation, and (B) any Affiliate or Associate (other than the Corporation or a
wholly-owned subsidiary of the Corporation) of any such person or entity. Two
or more persons or entities acting as a syndicate or group, or otherwise, for
the purpose of acquiring, holding, or disposing of voting shares of the
Corporation shall be deemed to be a "person" or "entity", as the case may be.
(iii) The term "Affiliate", used to indicate a relationship with a
specified person or entity, shall mean a person or entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person or entity specified.
(iv) The term "Associate", used to indicate a relationship with a
specified person or entity, shall mean (A) any entity of which such specified
person or entity is an officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity securities, (B)
any trust or other estate in which such specified person or entity has a
substantial beneficial interest or as to which such specified person or entity
serves as
2
<PAGE>
trustee or in a similar fiduciary capacity, (C) any relative or spouse of such
specified person, or any relative of such spouse, who has the same home as such
specified person or who is a director or officer of the Corporation or any
Subsidiary, and (D) any person who is a director or officer of such specified
entity or any of its parents or subsidiaries (other than the Corporation or a
wholly-owned subsidiary of the Corporation).
(v) The term "Substantial Part" shall mean 30 percent or more of the
fair market value of the total assets of the person or entity in question, as
reflected on the most recent balance sheet of such person or entity existing at
the time the shareholders of the Corporation would be required to approve or
authorize the Related Person Business Transaction involving the assets
constituting any such Substantial Part.
(vi) The term "Subsidiary" shall mean any corporation, a majority of
the equity securities of any class of which are owned by the Corporation, by
another Subsidiary, or in the aggregate by the Corporation and one or more of
its Subsidiaries.
(vii) The term "Continuing Director" shall mean a director who was a
member of the Board of Directors of the Corporation either on May 15, 1983, or
immediately prior to the time that any Related Person involved in the Related
Person Business Transaction in question became a Related Person, provided that
in no event shall a Related Person involved in the Related Person Business
Transaction in question be deemed to be a Continuing Director.
(viii) The term "voting shares" shall mean shares of capital stock of a
corporation entitled to vote generally in the election of directors, considered
for the purposes of this Article as one class.
(ix) (A) A person or entity "beneficially owns" voting shares of the
Corporation if such person or entity, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or shares
(1) voting power which includes the power to vote, or to direct the voting of,
such voting shares, or (2) investment power which includes the power to dispose,
or to direct the disposition of, such voting shares. Any person or entity
which, directly or indirectly, creates or uses a trust, proxy, power of
attorney, pooling arrangement or any other contract, arrangement, or device with
the purpose or effect of divesting such person or entity of beneficial ownership
of voting shares of the Corporation or preventing the vesting of such beneficial
ownership as part of a plan or scheme to avoid becoming a Related Person shall
be deemed for purposes of this Article V to be the beneficial owner of such
voting shares. All voting shares of the Corporation beneficially owned by a
person or entity, regardless of the form which such beneficial ownership takes,
shall be aggregated in calculating the number of voting shares of the
Corporation beneficially owned by such person or entity. Any voting shares of
the Corporation that any person or entity has the right to acquire pursuant to
any agreement, contract, arrangement, or understanding, or upon exercise of any
conversion right, warrant, or option, or pursuant to the automatic
3
<PAGE>
termination of a trust, discretionary account or similar arrangement, or
otherwise shall be deemed beneficially owned by such person or entity. Any
voting shares of the Corporation not outstanding which any person or entity has
a right to acquire shall be deemed to be outstanding for the purpose of
computing the percentage of outstanding voting shares of the Corporation
beneficially owned by such person or entity but shall not be deemed to be
outstanding for the purpose of computing the percentage of outstanding voting
shares of the Corporation beneficially owned by any other person or entity.
(B) Notwithstanding the foregoing provisions of subparagraph
(b)(ix)(A) hereof:
(1) A member of a national securities exchange shall not be deemed to
be a beneficial owner of voting shares of the Corporation held directly or
indirectly by it on behalf of another person or entity solely because such
member is the record holder of such voting shares and, pursuant to the rules of
such exchange, may direct the vote of such voting shares, without instruction,
on other than contested matters or matters that may affect substantially the
rights or privileges of the holders of the voting shares of the Corporation to
be voted, but is otherwise precluded by the rules of such exchange from voting
without instruction;
(2) A commercial bank, broker or dealer or insurance company which in
the ordinary course of business is a pledgee of voting shares of the Corporation
under a written pledge agreement shall not be deemed to be the beneficial owner
of such pledged voting shares until the pledgee has taken all formal steps
necessary to declare a default and determines that the power to vote or to
direct the vote or to dispose or to direct the disposition of such pledged
securities will be exercised, provided that the pledgee agreement is bona fide
and was not entered into with the purpose nor with the effect of changing or
influencing the control of the Corporation nor in connection with any
transaction having such purpose or effect and, prior to default, does not grant
to the pledgee the power to vote or to direct the vote of the pledged voting
shares of the Corporation; and
(3) A person or entity engaged in business as an underwriter of
securities who acquires voting shares of the Corporation through its
participation in good faith in a firm commitment underwriting registered under
the Securities Act of 1933, or comparable successor law, rule or regulation,
shall not be deemed to be the beneficial owner of such voting shares until the
expiration of forty days after the date of such acquisition.
(x) A merger shall mean a statutory merger or consolidation.
(c) For the purposes of this Article V the Continuing Directors by a
vote of not less than the greater of (A) two-thirds or (B) two of the Continuing
Directors shall have the power to make a good faith determination, on the basis
of information known to them, of: (i) the number of voting shares of the
Corporation that any person or entity "beneficially owns", (ii) whether a person
or entity is an Affiliate or Associate of another, (iii) whether the
4
<PAGE>
assets subject to any Related Person Business Transaction constitute a
Substantial Part, (iv) whether any business transaction is one in which a
Related Person has an interest, and (v) such other matters with respect to which
a determination is required under this Article V.
(d) The provisions set forth in this Article V, including this
paragraph (d), may not be repealed or amended in any respect unless such action
is approved by the affirmative vote of the holders of not less than two-thirds
of the voting power of the outstanding voting shares of the Corporation.
5
<PAGE>
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
HUTCHINSON TECHNOLOGY INCORPORATED
I, Jeffrey W. Green, the Chief Executive Officer of Hutchinson
Technology Incorporated, a Minnesota corporation, do hereby certify that an
amendment adding the following new Article VI to the Restated Articles of
Incorporation, as amended, of said corporation was duly adopted pursuant to
Section 302A.135 of the Minnesota Statutes at a meeting of the shareholders of
said corporation held on January 27, 1988:
"ARTICLE VI
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this Article VI shall
not eliminate or limit the liability of a director to the extent provided
by applicable law (i) for any breach of the director's duty of loyalty to
the Corporation or its shareholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) under section 302A.559 or 80A.23 of the Minnesota Statutes, (iv) for
any transaction from which the director derived an improper personal
benefit, or (v) for any act or omission occurring prior to the effective
date of this Article VI. No amendment to or repeal of this Article VI
shall apply to or have any effect on the liability or alleged liability of
any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal."
IN WITNESS WHEREOF, I have subscribed my name this 27th day of
January, 1988.
/s/ Jeffrey W. Green
--------------------------------------------
Jeffrey W. Green
Chief Executive Officer
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
Subscribed and sworn to before me this 27th day of January, 1988.
(NOTARIAL SEAL) /s/ Patricia J. Thompson
--------------------------------------------
Notary Public
<PAGE>
ARTICLES OF AMENDMENT
OF AMENDED AND
RESTATED ARTICLES OF INCORPORATION
OF
HUTCHINSON TECHNOLOGY INCORPORATED
The undersigned, John A. Ingleman, Secretary of Hutchinson Technology
Incorporated, a Minnesota corporation (the "Corporation"), hereby certifies (i)
that Article III of the Corporation's Amended and Restated Articles of
Incorporation has been amended, effective at the close of business on
February 11, 1997 (the "Effective Time"), to read in its entirety as follows:
"ARTICLE III
This Corporation is authorized to issue an aggregate of
45,000,000 shares, all of which shall be designated as Common Stock,
having a par value of $0.01 per share."
(ii) that such amendment has been adopted in accordance with the requirements
of, and pursuant to, Chapter 302A of the Minnesota Statutes; (iii) that such
amendment was adopted pursuant to Section 302A.402, Subd. 3, of the Minnesota
Statutes in connection with a three-for-one division of the Corporation's Common
Stock; and (iv) that such amendment will not adversely affect the rights or
preferences of the holders of outstanding shares of any class or series of the
Corporation and will not result in the percentage of authorized shares that
remains unissued after such division exceeding the percentage of authorized
shares that were unissued before the division.
The division giving rise to the amendment set forth above concerns a
three-for-one division of the Common Stock of the Corporation. Such division is
being effected as follows:
(i) Effective at the Effective Time, each share of Common Stock of
the Corporation, par value $0.02 per share, outstanding immediately prior to
the Effective Time will be split and divided into three shares of Common
Stock of the Corporation, par value $0.01 per share, all of which shall be
validly issued, fully paid and nonassessable;
(ii) each stock certificate representing a share or shares of Common
Stock of the Corporation, par value $0.02 per share, immediately prior to the
Effective Time shall continue to represent the same number of shares of Common
Stock of the Corporation, par value $0.01 per share, following the Effective
Time; and
<PAGE>
(iii) a stock certificate or certificates representing two
additional shares of the authorized but previously unissued Common Stock of
the Corporation, par value $0.01 per share, for each share of Common Stock of
the Corporation, par value $0.02 per share, outstanding immediately prior to
the Effective Time shall be mailed or delivered on February 11, 1997 or as
soon thereafter as practicable. The record date for determining the
shareholders of record entitled to receive such stock certificate or
certificates with respect to Common Stock outstanding as of the close of
business on January 31, 1997, and remaining outstanding at the Effective
Time, shall be the close of business on January 31, 1997. With respect to
each share of Common Stock of the Corporation, par value $0.02 per share, if
any, that is first issued and becomes outstanding after the close of business
on January 31, 1997, but prior to the Effective Time and remains outstanding
at the Effective Time, the stock certificate for the additional share
resulting from the division of any such share of Common Stock shall be mailed
or delivered to the first holder of record to whom such share of Common Stock
was issued.
The foregoing Articles of Amendment shall take effect at the Effective
Time previously stated herein.
IN WITNESS WHEREOF, I have subscribed my name this 21st day of
January, 1997.
/s/ John A. Ingleman
-------------------------------------------------
John A. Ingleman
-2-
<PAGE>
EXHIBIT 11
HUTCHINSON TECHNOLOGY INCORPORATED
STATEMENT REGARDING COMPUTATION
OF NET INCOME PER SHARE - UNAUDITED
(In thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
---------------------- ------------------------
June 29, June 23, June 29, June 23,
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
NET INCOME $13,698 $ 5,199 $41,498 $12,393
------- ------- ------- -------
------- ------- ------- -------
NET INCOME PER SHARE -
PRIMARY:
Weighted average common
shares outstanding 19,531 16,353 17,834 16,347
Dilutive effect of stock options
outstanding after application
of treasury stock method 745 465 692 468
------- ------- ------- -------
20,276 16,818 18,526 16,815
------- ------- ------- -------
------- ------- ------- -------
PRIMARY
NET INCOME PER SHARE $ .68 $ .31 $ 2.24 $ .74
------- ------- ------- -------
------- ------- ------- -------
NET INCOME PER SHARE -
FULLY DILUTED:
Weighted average common
shares outstanding 19,531 16,353 17,834 16,347
Dilutive effect of stock options
outstanding after application
of treasury stock method 745 465 770 468
------- ------- ------- -------
20,276 16,818 18,604 16,815
------- ------- ------- -------
------- ------- ------- -------
FULLY DILUTED
NET INCOME PER SHARE $ .68 $ .31 $ 2.23 $ .74
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS OF
HUTCHINSON TECHNOLOGY INCORPORATED FOR THE THIRTY-NINE WEEKS ENDED JUNE 29,1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> SEP-30-1997
<PERIOD-END> JUN-29-1997
<CASH> 120,249,000
<SECURITIES> 26,262,000
<RECEIVABLES> 64,765,000
<ALLOWANCES> 2,853,000
<INVENTORY> 20,720,000
<CURRENT-ASSETS> 266,465,000
<PP&E> 315,402,000
<DEPRECIATION> 165,094,000
<TOTAL-ASSETS> 425,358,000
<CURRENT-LIABILITIES> 65,879,000
<BONDS> 74,737,000
0
0
<COMMON> 196,000
<OTHER-SE> 281,049,000
<TOTAL-LIABILITY-AND-EQUITY> 425,358,000
<SALES> 352,878,000
<TOTAL-REVENUES> 352,878,000
<CGS> 249,907,000
<TOTAL-COSTS> 249,907,000
<OTHER-EXPENSES> 15,157,000<F1>
<LOSS-PROVISION> 1,435,000
<INTEREST-EXPENSE> 2,626,000
<INCOME-PRETAX> 53,193,000
<INCOME-TAX> 11,695,000
<INCOME-CONTINUING> 41,498,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,498,000
<EPS-PRIMARY> 2.24
<EPS-DILUTED> 2.23
<FN>
<F1>OTHER EXPENSES REFLECT RESEARCH AND DEVELOPMENT EXPENSES.
</FN>
</TABLE>
