<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 MARCH 30, 1997
-----------------------------------------
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
------------------------------- -------------------------------
(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
----- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of May 2, 1997 the registrant had 19,530,533 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)
<TABLE>
<CAPTION>
March 30, September 29,
1997 1996
----------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $143,993 $ 22,884
Securities available for sale 20,262 3,064
Trade receivables, net 58,850 46,803
Other receivables 20,015 9,475
Inventories 17,860 17,235
Prepaid taxes and other expenses 9,456 9,204
---------- ----------
Total current assets 270,436 108,665
Property, plant and equipment, net 137,262 121,706
Other assets 7,423 8,612
---------- ----------
$415,121 $238,983
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt $ 5,752 $ 5,760
Accounts payable and accrued expenses 32,448 23,008
Accrued compensation 24,973 12,187
Accrued income taxes 6,010 5,608
---------- ----------
Total current liabilities 69,183 46,563
Long-term debt 74,937 53,185
Other long-term liabilities 3,516 5,551
Shareholders' investment:
Common stock, $.01 par value, 45,000,000 shares authorized,
19,529,000 and 16,356,000 issued and outstanding
195 164
Additional paid-in capital 149,313 43,343
Retained earnings 117,977 90,177
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Total shareholders' investment 267,485 133,684
---------- ----------
$415,121 $238,983
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
------------------------- ------------------------
March 30, March 24, March 30, March 24,
1997 1996 1997 1996
---------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Net sales $124,259 $86,546 $231,165 $169,878
Cost of sales 85,579 68,667 161,373 130,555
------- -------- -------- -------
Gross profit 38,680 17,879 69,792 39,323
Research and development
expenses 4,747 3,750 10,486 12,803
Selling, general and
administrative expenses 12,048 8,537 22,966 17,100
------- -------- -------- -------
Income from operations 21,885 5,592 36,340 9,420
Other income (net) 861 368 1,167 689
Interest expense (1,009) (407) (1,867) (887)
------- -------- -------- -------
Income before income taxes 21,737 5,553 35,640 9,222
Provision for income taxes 5,054 1,221 7,840 2,028
------- -------- -------- -------
Net income $16,683 $4,332 $27,800 $7,194
------- -------- -------- -------
------- -------- -------- -------
Net income per common
and common equivalent share $.91 $.26 $1.57 $.43
------- -------- -------- -------
------- -------- -------- -------
Weighted average common and
common equivalent shares outstanding 18,421 16,788 17,654 16,818
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
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HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Dollars in thousands)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
----------------------------
March 30, March 24,
1997 1996
------------ -----------
<S> <C> <C>
Operating activities:
Net income $ 27,800 $7,194
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 19,139 15,308
Deferred tax (benefit) provision 543 (1,298)
Loss on disposal of assets 129 157
Change in operating assets and liabilities (Note 7) 5,688 4,686
------- --------
Cash provided by operating activities 53,299 26,047
------- --------
Investing activities:
Capital expenditures (29,430) (36,336)
Increase in other receivables (11,623) -
Sales of securities 2,195 3,070
Purchases of securities (19,393) (3,941)
------- -------
Cash used for investing activities (58,251) (37,207)
------- -------
Financing activities:
Repayments of long-term debt (3,255) (1,340)
Proceeds from issuance of long-term debt 25,000 500
Net proceeds from issuance of common stock 104,316 56
------- --------
Cash provided by (used for) financing activities 126,061 (784)
------- --------
Net increase (decrease) in cash and cash equivalents 121,109 (11,944)
Cash and cash equivalents at beginning of period 22,884 30,479
------- --------
Cash and cash equivalents at end of period $143,993 $18,535
------- --------
------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
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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
reflect 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 a material impact on the financial position or the results of
operations of the Company.
(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 Twenty-Six Weeks Ended
-------------------- ----------------------
March 30, March 24, March 30, March 24,
Percentage of Net Sales 1997 1996 1997 1996
- ----------------------- ------- ------- -------- ---------
Five Largest Customers 84% 90% 84% 90%
Seagate Technology Incorporated 35 34 35 33
Read-Rite Corporation 13 15 13 17
Yamaha Corporation 13 17 13 16
SAE Magnetics, Ltd./TDK 13 12 13 14
IBM 10 12 10 10
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(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 March 30, 1997 consisted of U.S.
government securities with a market value and cost of $20,262,000. Securities
totaling $3,262,000 have been pledged for certain self-insured reserves. The
Company follows the provisions of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities".
(5) INVENTORIES
All inventories are stated at the lower of last-in, first-out (LIFO) cost or
market. Inventories consisted of the following:
March 30, September 29,
1997 1996
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Raw materials $6,692 $4,137
Work in process 7,499 5,558
Finished goods 3,959 7,830
LIFO reserve (290) (290)
------------ ------------
$17,860 $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 March 30, 1997:
March 30, September 29,
1997 1996
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Current deferred tax assets:
Sales and accounts receivables $1,308 $873
Inventories 5,458 5,419
Accruals and other reserves 2,517 2,367
------------ ------------
Total current deferred tax assets 9,283 8,659
Long-term deferred tax assets (liabilities):
Property, plant and equipment 3,447 3,753
Accruals and other reserves 2,051 2,146
Tax credits 1,234 2,738
Valuation allowance - (738)
------------ ------------
Total long-term deferred tax assets 6,732 7,899
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Total deferred tax assets $16,015 $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 $1,234 Does not expire
The Company determined that the realization of this tax credit did not meet the
recognition criteria under Statement of Financial Accounting Standards No. 109
("SFAS 109"), "Accounting for Income Taxes", and, accordingly, a valuation
allowance has been established.
(7) SUPPLEMENTARY CASH FLOW INFORMATION
Twenty-Six Weeks Ended
-----------------------
March 30, March 24,
1997 1996
--------- ---------
Changes in operating assets and liabilities:
Trade receivables, net ($12,047) ($3,336)
Inventories (625) (5,491)
Prepaid and other expenses 1,455 (1,551)
Accounts payable and accrued liabilities 18,941 12,064
Other noncurrent liabilities (2,036) 3,000
--------- ---------
$5,688 $4,686
--------- ---------
--------- ---------
Cash paid for:
Interest (net of amount capitalized) $1,211 $1,461
Income taxes 5,144 2,865
Capitalized interest for the twenty-six weeks ended March 30, 1997 was
$1,052,000 compared to $565,000 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 expects to use 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) RESTATEMENT IN CONNECTION WITH 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.
7
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HUTCHINSON TECHNOLOGY INCORPORATED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED MARCH 30, 1997 VS. THIRTEEN WEEKS ENDED MARCH 24, 1996.
Net sales for the thirteen weeks ended March 30, 1997 were $124,259,000, an
increase of $37,713,000 or 44% 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 March 30, 1997 was $38,680,000, an
increase of $20,801,000 or 116% compared to the comparable period in fiscal
1996, and gross profit as a percent of net sales increased from 21% to 31%,
primarily due to higher sales volume and improved manufacturing efficiencies.
Research and development expenses for the thirteen weeks ended March 30, 1997
were $4,747,000 compared to $3,750,000 for the thirteen weeks ended March 24,
1996. The increase was mainly due to increased development efforts on TSA-TM-
suspensions.
Selling, general and administrative expenses for the thirteen weeks ended March
30, 1997 were $12,048,000, an increase of $3,511,000 or 41% compared to the
comparable period in fiscal 1996. The increased expenses were due primarily to
increased profit sharing and other incentive compensation costs of $2,783,000
and an increase in labor expenses of $552,000. As a percent of net sales,
selling, general and administrative expenses remained at 10%.
Other income for the thirteen weeks ended March 30, 1997 was $861,000, an
increase of $493,000. The increase was primarily due to an increase of $936,000
in interest income as a result of a higher average investment balance offset
partially by a $302,000 increase in royalties paid under licensing agreements.
Interest expense for the thirteen weeks ended March 30, 1997 was $1,009,000, an
increase of $602,000 from the comparable period in fiscal 1996, primarily due to
higher average outstanding debt.
The income tax provision for the thirteen weeks ended March 30, 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 March 30, 1997 was $16,683,000, an
increase of $12,351,000 compared to the comparable period in fiscal 1996. As a
percent of net sales, net income increased from 5% to 13% primarily due to the
higher sales volume and improved manufacturing efficiencies, noted above.
TWENTY-SIX WEEKS ENDED MARCH 30, 1997 VS. TWENTY-SIX WEEKS ENDED MARCH 24, 1996.
Net sales for the twenty-six weeks ended March 30, 1997 were $231,165,000, an
increase of $61,287,000 or 36% compared to the comparable period in fiscal 1996.
This increase was primarily due to increased suspension assembly volume.
Gross profit for the twenty-six weeks ended March 30, 1997 was $69,792,000, an
increase of $30,469,000 or 77% compared to the comparable period in fiscal 1996,
and gross profit as a percent of
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net sales increased from 23% to 30%, primarily due to higher sales volume and
improved manufacturing efficiencies.
Research and development expenses for the twenty-six weeks ended March 30, 1997
were $10,486,000 compared to $12,803,000 for the twenty-six weeks ended March
24, 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 twenty-six weeks ended
March 30, 1997 were $22,966,000, an increase of $5,866,000 or 34% compared to
the comparable period in fiscal 1996. The increased expenses were due
primarily to increased profit sharing and other incentive compensation costs
of $4,889,000 and a $1,033,000 increase in labor expenses. As a percent of
net sales, selling, general and administrative expenses remained at 10%.
Other income for the twenty-six weeks ended March 30, 1997 was $1,167,000, an
increase of $478,000. The increase was primarily due to an increase of
$1,106,000 in interest income as a result of a higher average investment balance
offset partially by a $427,000 increase in royalties paid under licensing
agreements.
Interest expense for the twenty-six weeks ended March 30, 1997 was $1,867,000,
an increase of $980,000 from the comparable period in fiscal 1996, primarily due
to higher average outstanding debt.
The income tax provision for the twenty-six weeks ended March 30, 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 twenty-six weeks ended March 30, 1997 was $27,800,000, an
increase of $20,606,000 compared to the comparable period in fiscal 1996. As a
percent of net sales, net income increased from 4% 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 $143,933,000 at March 30, 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
$53,299,000 for the twenty-six weeks ended March 30, 1996.
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 expects to use 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 the
short-term debt securities.
Cash used for capital expenditures totaled $29,430,000 for the twenty-six weeks
ended March 30, 1997, a decrease of $6,906,000 from the comparable period in
fiscal 1996. The expenditures for the twenty-six
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weeks ended March 30, 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 $100,000,000 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 March 30,
1997, the Company had a letter of credit under this facility of $1,625,000 as
security for its variable rate demand note with the City of Hutchinson.
The Company's financing agreements contain various restrictive covenants. As of
March 30, 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 a material impact on the financial position or the results of
operations of the Company.
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.
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
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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.
11
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Company's 1997 Annual Meeting of Shareholders held on January 29th, 1997,
the shareholders approved the following:
(a) the election of directors to serve until their successors are duly
elected. Each nominated director was elected as follows:
Director - Nominee Votes For Votes Withheld
-------------------------- ---------- --------------
Jeffrey W. Green 15,201,102 269,274
Wayne M. Fortun 15,202,152 268,224
W. Thomas Brunberg 15,191,952 278,424
Archibald Cox 15,200,910 269,466
James E. Donaghy 15,192,252 278,124
Harry C. Ervin, Jr. 15,199,005 271,371
Richard N. Rosett 15,200,328 270,048
(b) a proposal to approve the Hutchinson Technology Incorporated 1996
Incentive Plan. The proposal received 8,002,995 votes for, and 3,350,973
votes against, approval. There were 68,649 abstentions and 4,047,759
broker non-votes.
(c) a proposal to ratify the appointment of Arthur Andersen LLP to serve as
independent public accountants of the Company for the fiscal year ending
September 28, 1997. The proposal received 15,401,946 votes for, and 26,085
votes against, ratification. There were 42,345 abstentions and no broker
non-votes.
The number of shares voted on the above matters have been adjusted to reflect
the three-for-one stock split of the Company's common stock effective at the
close of business on February 11, 1997.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) EXHIBITS.
3.1 Restated Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to Registration Statement No. 2-98270), as
amended by Articles of Amendment dated January 27, 1988
(incorporated by reference to Exhibit 4.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended December 27, 1987, File
No. 0-14709) and as amended by Articles of Amendment dated January
21, 1997 (incorporated by reference to Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended December 29,
1996, File No. 0-14709).
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.
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.
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.
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
13
<PAGE>
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.
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.
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.
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.
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 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
14
<PAGE>
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 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
15
<PAGE>
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 March 30, 1997.
* Exhibits 10.8 and 10.9 contain portions for which confidential
treatment has been granted by the Securities and Exchange
Commission.
16
<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: May 6, 1997 By /s/ Wayne M. Fortun
------------------------------ -----------------------------------
Wayne M. Fortun
President, Chief Executive Officer
and Chief Operating Officer
Date: May 6, 1997 By /s/ John A. Ingleman
------------------------------- -----------------------------------
John A. Ingleman
Vice President, Chief Financial
Officer and Secretary
17
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Page
- ------- ---------------
4.2 Amendment dated as of February 24, 1997 Electronically
Filed
4.3 Amendment dated as of February 24, 1997 Electronically
Filed
4.4 Amendment dated as of February 24, 1997 Electronically
Filed
4.5 Second Amendment dated as of February 24, 1997 Electronically
Filed
4.6 Amendment dated as of February 24, 1997 Electronically
Filed
4.7 Amendment dated as of February 24, 1997 Electronically
Filed
4.8 Amendment dated as of February 24, 1997 Electronically
Filed
11 Statement Regarding Computation of Net
Income Per Share Electronically
Filed
27 Financial Data Schedule Electronically
Filed
18
<PAGE>
Exhibit 4.2
Dated as of February 24, 1997
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Amerus Life Insurance Company,
as successor to Central
Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Modern Woodmen of America
1701 First Avenue
Rock Island, Illinois 61201
Ladies and Gentlemen:
Reference is made to those certain Note Purchase Agreements between
Hutchinson Technology Incorporated, a Minnesota corporation (the "Company"), and
each of Teachers Insurance and Annuity Association of America, Central Life
Assurance Company and Modern Woodmen of America (collectively, the
"Purchasers"), each dated as of April 20, 1994, as heretofore amended as of
March 15, 1996 (collectively, as amended, the "Agreements"), pursuant to which
the Purchasers purchased the 7.46% Senior Notes of the Company dated April 20,
1994 in the aggregate original principal amount of $30,000,000 (the "Notes").
The Purchasers or their successors or assigns (collectively, the "Noteholders")
are the registered holders of 100% of the aggregate outstanding principal amount
of the Notes as reflected in the Note Register required to be maintained by the
Company pursuant to Section 10.1 of each of the Agreements, and the Noteholders
whose signatures are affixed below hold at least 66-2/3% of the aggregate unpaid
principal amount of the Notes outstanding as of the date hereof.
The Company has informed the Noteholders that it desires to amend the
Agreements in certain respects as of the date hereof, and the Noteholders have
agreed to such an amendment as more fully described below.
Now, therefore, the Company and the Noteholders (by their acceptance
hereof) hereby agree as follows:
<PAGE>
1. AMENDMENT TO SECTION 6.5(a)(i). Section 6.5(a)(i) of each of the
Agreements is amended by restating clause (i) thereof in its entirety as
follows:
(i) readily marketable direct obligations of the United States
of America or of any agency or instrumentality thereof the obligations
of which are backed by the full faith and credit of the United States
of America or readily marketable obligations unconditionally
guaranteed by the United States of America or by any such agency or
instrumentality, in each case (A) maturing on or before March 1, 1999,
PROVIDED that the aggregate amount of all such obligations at any one
time outstanding shall not exceed $50,000,000, or (B) maturing within
one year from the date of acquisition thereof;
2. MISCELLANEOUS. Except as specifically amended hereby, all terms and
provisions of each of the Agreements shall remain in full force and effect.
This Letter Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Capitalized terms used but not otherwise defined
in this Letter Amendment shall have the meanings assigned to them by each of the
Agreements.
-2-
<PAGE>
If you are in agreement with the foregoing, please so indicate by executing
the form of acknowledgment set forth below, whereupon this letter shall become a
binding agreement effective as of the date hereof.
Very truly yours,
HUTCHINSON TECHNOLOGY
INCORPORATED
By /s/ John A. Ingleman
-------------------------------------------
Its C.F.O.
----------------------------------------
Agreed to and accepted as of
the date first above written.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Marie A. Shmaruk
-----------------------------------------
Its MARIE A. SHMARUK
--------------------------------------
Associate Director Private Placements
--------------------------------------
AMERUS LIFE INSURANCE COMPANY,
as successor to Central Life Assurance Company
By
-----------------------------------------
Its
--------------------------------------
MODERN WOODMEN OF AMERICA
By /s/ Nick S. Coin
-----------------------------------------
Its Supervisor, Securities Division
--------------------------------------
Nick S. Coin
-3-
<PAGE>
Exhibit 4.3
Dated as of February 24, 1997
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Amerus Life Insurance Company,
as successor to Central
Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Modern Woodmen of America
1701 First Avenue
Rock Island, Illinois 61201
Ladies and Gentlemen:
Reference is made to those certain Note Purchase Agreements between
Hutchinson Technology Incorporated, a Minnesota corporation (the "Company"), and
each of Teachers Insurance and Annuity Association of America, Central Life
Assurance Company and Modern Woodmen of America (collectively, the
"Purchasers"), each dated as of April 20, 1994, as heretofore amended as of
March 15, 1996 (collectively, as amended, the "Agreements"), pursuant to which
the Purchasers purchased the 7.46% Senior Notes of the Company dated April 20,
1994 in the aggregate original principal amount of $30,000,000 (the "Notes").
The Purchasers or their successors or assigns (collectively, the "Noteholders")
are the registered holders of 100% of the aggregate outstanding principal amount
of the Notes as reflected in the Note Register required to be maintained by the
Company pursuant to Section 10.1 of each of the Agreements, and the Noteholders
whose signatures are affixed below hold at least 66-2/3% of the aggregate unpaid
principal amount of the Notes outstanding as of the date hereof.
The Company has informed the Noteholders that it desires to amend the
Agreements in certain respects as of the date hereof, and the Noteholders have
agreed to such an amendment as more fully described below.
Now, therefore, the Company and the Noteholders (by their acceptance
hereof) hereby agree as follows:
<PAGE>
1. AMENDMENT TO SECTION 6.5(a)(i). Section 6.5(a)(i) of each of the
Agreements is amended by restating clause (i) thereof in its entirety as
follows:
(i) readily marketable direct obligations of the United States
of America or of any agency or instrumentality thereof the obligations
of which are backed by the full faith and credit of the United States
of America or readily marketable obligations unconditionally
guaranteed by the United States of America or by any such agency or
instrumentality, in each case (A) maturing on or before March 1, 1999,
PROVIDED that the aggregate amount of all such obligations at any one
time outstanding shall not exceed $50,000,000, or (B) maturing within
one year from the date of acquisition thereof;
2. MISCELLANEOUS. Except as specifically amended hereby, all terms and
provisions of each of the Agreements shall remain in full force and effect.
This Letter Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Capitalized terms used but not otherwise defined
in this Letter Amendment shall have the meanings assigned to them by each of the
Agreements.
-2-
<PAGE>
If you are in agreement with the foregoing, please so indicate by executing
the form of acknowledgment set forth below, whereupon this letter shall become a
binding agreement effective as of the date hereof.
Very truly yours,
HUTCHINSON TECHNOLOGY
INCORPORATED
By /s/ John A. Ingleman
-------------------------------------------
Its C.F.O.
----------------------------------------
Agreed to and accepted as of
the date first above written.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Marie A. Shmaruk
-----------------------------------------
Its MARIE A. SHMARUK
--------------------------------------
Associate Director Private Placements
--------------------------------------
AMERUS LIFE INSURANCE COMPANY,
as successor to Central Life Assurance Company
By
-----------------------------------------
Its
--------------------------------------
MODERN WOODMEN OF AMERICA
By /s/ Nick S. Coin
-----------------------------------------
Its Supervisor, Securities Division
--------------------------------------
Nick S. Coin
-3-
<PAGE>
Exhibit 4.4
Dated as of February 24, 1997
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Amerus Life Insurance Company,
as successor to Central
Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Modern Woodmen of America
1701 First Avenue
Rock Island, Illinois 61201
Ladies and Gentlemen:
Reference is made to those certain Note Purchase Agreements between
Hutchinson Technology Incorporated, a Minnesota corporation (the "Company"), and
each of Teachers Insurance and Annuity Association of America, Central Life
Assurance Company and Modern Woodmen of America (collectively, the
"Purchasers"), each dated as of April 20, 1994, as heretofore amended as of
March 15, 1996 (collectively, as amended, the "Agreements"), pursuant to which
the Purchasers purchased the 7.46% Senior Notes of the Company dated April 20,
1994 in the aggregate original principal amount of $30,000,000 (the "Notes").
The Purchasers or their successors or assigns (collectively, the "Noteholders")
are the registered holders of 100% of the aggregate outstanding principal amount
of the Notes as reflected in the Note Register required to be maintained by the
Company pursuant to Section 10.1 of each of the Agreements, and the Noteholders
whose signatures are affixed below hold at least 66-2/3% of the aggregate unpaid
principal amount of the Notes outstanding as of the date hereof.
The Company has informed the Noteholders that it desires to amend the
Agreements in certain respects as of the date hereof, and the Noteholders have
agreed to such an amendment as more fully described below.
Now, therefore, the Company and the Noteholders (by their acceptance
hereof) hereby agree as follows:
<PAGE>
1. AMENDMENT TO SECTION 6.5(a)(i). Section 6.5(a)(i) of each of the
Agreements is amended by restating clause (i) thereof in its entirety as
follows:
(i) readily marketable direct obligations of the United States
of America or of any agency or instrumentality thereof the obligations
of which are backed by the full faith and credit of the United States
of America or readily marketable obligations unconditionally
guaranteed by the United States of America or by any such agency or
instrumentality, in each case (A) maturing on or before March 1, 1999,
PROVIDED that the aggregate amount of all such obligations at any one
time outstanding shall not exceed $50,000,000, or (B) maturing within
one year from the date of acquisition thereof;
2. MISCELLANEOUS. Except as specifically amended hereby, all terms and
provisions of each of the Agreements shall remain in full force and effect.
This Letter Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Capitalized terms used but not otherwise defined
in this Letter Amendment shall have the meanings assigned to them by each of the
Agreements.
-2-
<PAGE>
If you are in agreement with the foregoing, please so indicate by executing
the form of acknowledgment set forth below, whereupon this letter shall become a
binding agreement effective as of the date hereof.
Very truly yours,
HUTCHINSON TECHNOLOGY
INCORPORATED
By /s/ John A. Ingleman
-------------------------------------------
Its C.F.O.
----------------------------------------
Agreed to and accepted as of
the date first above written.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Marie A. Shmaruk
-----------------------------------------
Its MARIE A. SHMARUK
--------------------------------------
Associate Director Private Placements
--------------------------------------
AMERUS LIFE INSURANCE COMPANY,
as successor to Central Life Assurance Company
By
-----------------------------------------
Its
--------------------------------------
MODERN WOODMEN OF AMERICA
By /s/ Nick S. Coin
-----------------------------------------
Its Supervisor, Securities Division
--------------------------------------
Nick S. Coin
-3-
<PAGE>
Exhibit 4.5
SECOND AMENDMENT TO
HUTCHINSON TECHNOLOGY INCORPORATED
CREDIT AGREEMENT
This Second Amendment (this "AMENDMENT") is entered into as of February 24,
1997 by and between HUTCHINSON TECHNOLOGY INCORPORATED (the "BORROWER") and THE
FIRST NATIONAL BANK OF CHICAGO, as Agent (in such capacity, the "AGENT") and
Lender. The parties hereto agree as follows:
WHEREAS, the Borrower, the Agent and the Lender have entered into that
certain Credit Agreement dated as of December 8, 1995, as heretofore amended as
of June 22, 1996 (as amended, the "AGREEMENT"); and
WHEREAS, the parties thereto desire to amend the Agreement in certain
respects more fully described hereinafter;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used and not otherwise defined in
this Amendment shall have the meanings attributed to them in the Agreement.
2. AMENDMENT OF AGREEMENT. The Agreement is hereby amended as follows:
2.1 Clause (i) of Section 6.16 (INVESTMENTS AND ACQUISITIONS) is
deleted in its entirety and the following is inserted in lieu thereof:
"(i) Obligations of, or fully guaranteed by, the United
States of America maturing within two years from
the date of acquisition thereof."
3. REPRESENTATIONS AND WARRANTIES The Borrower hereby confirms and
reaffirms that the representations and warranties contained in Article V of the
Agreement are true and correct in all material respects as of the Effective Date
(as defined in Paragraph 4 of this Amendment) except for changes reflecting
transactions permitted by the Agreement or otherwise previously consented to by
the Lenders, PROVIDED that such representations and warranties shall be and
hereby are amended as follows: each reference therein to "this Agreement,"
including, without limitation, such a reference included in the term "Loan
Documents," shall be deemed to be a collective reference to the Agreement, this
Amendment, and the Agreement as amended by this Amendment. A Default under and
as defined in the Agreement as amended by this Amendment shall be deemed to have
occurred if any representation or warranty made pursuant to the preceding
sentence shall be materially false as of the date on which it was made.
<PAGE>
4. EFFECTIVE DATE. This Amendment shall become effective as of the date
first written above (the "EFFECTIVE DATE") upon receipt by the Agent of
counterparts of this Amendment duly executed by the Borrower and the Agent and
Lender.
5. RATIFICATION. Except as amended hereby, the Agreement shall remain in
full force and effect and is hereby ratified, approved and confirmed in all
respects. Upon the effectiveness of this Amendment, all references in the
Agreement to "this Agreement" (and all indirect references such as "hereby,"
"herein," "hereof" and "hereunder') shall be deemed to be references to the
Agreement as amended by this Amendment.
6. EXPENSES. The Borrower shall reimburse the Agent for any and all
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' fees of attorneys for the Agent, which attorneys may be employees of
the Agent) paid or incurred by the Agent in connection with the preparation,
review, execution and delivery of this Amendment.
7. ENTIRE AGREEMENT. This Amendment, the Agreement as amended by this
Amendment, and the other Loan Documents embody the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings among the parties hereto relating to the subject
matter hereof.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one Amendment, and
any parties hereto may execute this Amendment by signing any such counterpart.
9. GOVERNING LAW. This Amendment shall be construed in accordance with
the internal laws (and not the law of conflicts) of the State of Illinois, but
giving effect to federal laws applicable to a national banking association in
the State of Illinois.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
HUTCHINSON TECHNOLOGY INCORPORATED
By /s/ John A.Ingleman
----------------------------------------
John A. Ingleman
Chief Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO,
INDIVIDUALLY AND AS AGENT
By /s/ J. Garland Smith
----------------------------------------
J. Garland Smith
Managing Director
-3-
<PAGE>
Exhibit 4.6
Dated as of February 24, 1997
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Metropolitan Life Insurance Company
334 Madison Avenue
Convent Station, New Jersey 07936
Metropolitan Insurance and Annuity Company
334 Madison Avenue
Convent Station, New Jersey 07936
Ladies and Gentlemen:
Reference is made to those certain Note Purchase Agreements between
Hutchinson Technology Incorporated, a Minnesota corporation (the "Company"), and
each of Metropolitan Life Insurance Company and Metropolitan Insurance and
Annuity Company (each, a "Series A Purchaser") and Teachers Insurance and
Annuity Association of America (the "Series B Purchaser"), each dated as of July
26, 1996 (collectively, the "Agreements"), providing for the issuance to the
Series A Purchasers of the 7.85% Senior Notes due 2003 of the Company dated July
26, 1996 in the aggregate original principal amount of $25,000,000 (the "Series
A Notes"), and the issuance to the Series B Purchaser of the 8.07% Senior Note
due 2006 of the Company dated November 26, 1996 in the original principal amount
of $25,000,000 (the "Series B Note"). The Series A Purchaser and the Series B
Purchaser, or their respective successors or assigns (collectively, the
"Noteholders"), are the registered holders of 100% of the aggregate outstanding
principal amount of the Series A Notes and the Series B Notes (collectively, the
"Notes") as reflected in the Note Register required to be maintained by the
Company pursuant to Section 10.1 of each of the Agreements, and the Noteholders
whose signatures are affixed below hold at least 66-2/3% of the aggregate unpaid
principal amount of the Notes outstanding as of the date hereof.
The Company has informed the Noteholders that it desires to amend the
Agreements in certain respects as of the date hereof, and the Noteholders have
agreed to such an amendment as more fully described below.
Now, therefore, the Company and the Noteholders (by their acceptance
hereof) hereby agree as follows:
<PAGE>
1. AMENDMENT TO SECTION 6.5(a)(i). Section 6.5(a)(i) of each of the
Agreements is amended by restating clause (i) thereof in its entirety as
follows:
(i) readily marketable direct obligations of the United States
of America or of any agency or instrumentality thereof the obligations
of which are backed by the full faith and credit of the United States
of America or readily marketable obligations unconditionally
guaranteed by the United States of America or by any such agency or
instrumentality, in each case (A) maturing on or before March 1, 1999,
PROVIDED that the aggregate amount of all such obligations at any one
time outstanding shall not exceed $50,000,000, or (B) maturing within
one year from the date of acquisition thereof;
2. MISCELLANEOUS. Except as specifically amended hereby, all terms and
provisions of each of the Agreements shall remain in full force and effect.
This Letter Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Capitalized terms used but not otherwise defined
in this Letter Amendment shall have the meanings assigned to them by each of the
Agreements.
-2-
<PAGE>
If you are in agreement with the foregoing, please so indicate by executing
the form of acknowledgment set forth below, whereupon this letter shall become a
binding agreement effective as of the date hereof.
Very truly yours,
HUTCHINSON TECHNOLOGY
INCORPORATED
By /s/ John A. Ingleman
-------------------------------------------
Its C.F.O.
----------------------------------------
Agreed to and accepted as of
the date first above written.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Marie A. Shmaruk
----------------------------------------
Its MARIE A. SHMARUK
-------------------------------------
Associate Director Private Placements
-------------------------------------
METROPOLITAN LIFE INSURANCE COMPANY
By /s/ Bob Noll
----------------------------------------
Its Bob Noll Vice President
-------------------------------------
METROPOLITAN INSURANCE AND ANNUITY COMPANY
By /s/ Bob Noll
----------------------------------------
Its Bob Noll Vice President
-------------------------------------
-3-
<PAGE>
Exhibit 4.7
Dated as of February 24, 1997
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Metropolitan Life Insurance Company
334 Madison Avenue
Convent Station, New Jersey 07936
Metropolitan Insurance and Annuity Company
334 Madison Avenue
Convent Station, New Jersey 07936
Ladies and Gentlemen:
Reference is made to those certain Note Purchase Agreements between
Hutchinson Technology Incorporated, a Minnesota corporation (the "Company"), and
each of Metropolitan Life Insurance Company and Metropolitan Insurance and
Annuity Company (each, a "Series A Purchaser") and Teachers Insurance and
Annuity Association of America (the "Series B Purchaser"), each dated as of July
26, 1996 (collectively, the "Agreements"), providing for the issuance to the
Series A Purchasers of the 7.85% Senior Notes due 2003 of the Company dated July
26, 1996 in the aggregate original principal amount of $25,000,000 (the "Series
A Notes"), and the issuance to the Series B Purchaser of the 8.07% Senior Note
due 2006 of the Company dated November 26, 1996 in the original principal amount
of $25,000,000 (the "Series B Note"). The Series A Purchaser and the Series B
Purchaser, or their respective successors or assigns (collectively, the
"Noteholders"), are the registered holders of 100% of the aggregate outstanding
principal amount of the Series A Notes and the Series B Notes (collectively, the
"Notes") as reflected in the Note Register required to be maintained by the
Company pursuant to Section 10.1 of each of the Agreements, and the Noteholders
whose signatures are affixed below hold at least 66-2/3% of the aggregate unpaid
principal amount of the Notes outstanding as of the date hereof.
The Company has informed the Noteholders that it desires to amend the
Agreements in certain respects as of the date hereof, and the Noteholders have
agreed to such an amendment as more fully described below.
Now, therefore, the Company and the Noteholders (by their acceptance
hereof) hereby agree as follows:
<PAGE>
1. AMENDMENT TO SECTION 6.5(a)(i). Section 6.5(a)(i) of each of the
Agreements is amended by restating clause (i) thereof in its entirety as
follows:
(i) readily marketable direct obligations of the United States
of America or of any agency or instrumentality thereof the obligations
of which are backed by the full faith and credit of the United States
of America or readily marketable obligations unconditionally
guaranteed by the United States of America or by any such agency or
instrumentality, in each case (A) maturing on or before March 1, 1999,
PROVIDED that the aggregate amount of all such obligations at any one
time outstanding shall not exceed $50,000,000, or (B) maturing within
one year from the date of acquisition thereof;
2. MISCELLANEOUS. Except as specifically amended hereby, all terms and
provisions of each of the Agreements shall remain in full force and effect.
This Letter Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Capitalized terms used but not otherwise defined
in this Letter Amendment shall have the meanings assigned to them by each of the
Agreements.
-2-
<PAGE>
If you are in agreement with the foregoing, please so indicate by executing
the form of acknowledgment set forth below, whereupon this letter shall become a
binding agreement effective as of the date hereof.
Very truly yours,
HUTCHINSON TECHNOLOGY
INCORPORATED
By /s/ John A. Ingleman
-------------------------------------------
Its C.F.O.
----------------------------------------
Agreed to and accepted as of
the date first above written.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Marie A. Shmaruk
----------------------------------------
Its MARIE A. SHMARUK
-------------------------------------
Associate Director Private Placements
-------------------------------------
METROPOLITAN LIFE INSURANCE COMPANY
By /s/ Bob Noll
----------------------------------------
Its Bob Noll Vice President
-------------------------------------
METROPOLITAN INSURANCE AND ANNUITY COMPANY
By /s/ Bob Noll
----------------------------------------
Its Bob Noll Vice President
-------------------------------------
-3-
<PAGE>
Exhibit 4.8
Dated as of February 24, 1997
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Metropolitan Life Insurance Company
334 Madison Avenue
Convent Station, New Jersey 07936
Metropolitan Insurance and Annuity Company
334 Madison Avenue
Convent Station, New Jersey 07936
Ladies and Gentlemen:
Reference is made to those certain Note Purchase Agreements between
Hutchinson Technology Incorporated, a Minnesota corporation (the "Company"), and
each of Metropolitan Life Insurance Company and Metropolitan Insurance and
Annuity Company (each, a "Series A Purchaser") and Teachers Insurance and
Annuity Association of America (the "Series B Purchaser"), each dated as of July
26, 1996 (collectively, the "Agreements"), providing for the issuance to the
Series A Purchasers of the 7.85% Senior Notes due 2003 of the Company dated July
26, 1996 in the aggregate original principal amount of $25,000,000 (the "Series
A Notes"), and the issuance to the Series B Purchaser of the 8.07% Senior Note
due 2006 of the Company dated November 26, 1996 in the original principal amount
of $25,000,000 (the "Series B Note"). The Series A Purchaser and the Series B
Purchaser, or their respective successors or assigns (collectively, the
"Noteholders"), are the registered holders of 100% of the aggregate outstanding
principal amount of the Series A Notes and the Series B Notes (collectively, the
"Notes") as reflected in the Note Register required to be maintained by the
Company pursuant to Section 10.1 of each of the Agreements, and the Noteholders
whose signatures are affixed below hold at least 66-2/3% of the aggregate unpaid
principal amount of the Notes outstanding as of the date hereof.
The Company has informed the Noteholders that it desires to amend the
Agreements in certain respects as of the date hereof, and the Noteholders have
agreed to such an amendment as more fully described below.
Now, therefore, the Company and the Noteholders (by their acceptance
hereof) hereby agree as follows:
<PAGE>
1. AMENDMENT TO SECTION 6.5(a)(i). Section 6.5(a)(i) of each of the
Agreements is amended by restating clause (i) thereof in its entirety as
follows:
(i) readily marketable direct obligations of the United States
of America or of any agency or instrumentality thereof the obligations
of which are backed by the full faith and credit of the United States
of America or readily marketable obligations unconditionally
guaranteed by the United States of America or by any such agency or
instrumentality, in each case (A) maturing on or before March 1, 1999,
PROVIDED that the aggregate amount of all such obligations at any one
time outstanding shall not exceed $50,000,000, or (B) maturing within
one year from the date of acquisition thereof;
2. MISCELLANEOUS. Except as specifically amended hereby, all terms and
provisions of each of the Agreements shall remain in full force and effect.
This Letter Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Capitalized terms used but not otherwise defined
in this Letter Amendment shall have the meanings assigned to them by each of the
Agreements.
-2-
<PAGE>
If you are in agreement with the foregoing, please so indicate by executing
the form of acknowledgment set forth below, whereupon this letter shall become a
binding agreement effective as of the date hereof.
Very truly yours,
HUTCHINSON TECHNOLOGY
INCORPORATED
By /s/ John A. Ingleman
-------------------------------------------
Its C.F.O.
----------------------------------------
Agreed to and accepted as of
the date first above written.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Marie A. Shmaruk
----------------------------------------
Its MARIE A. SHMARUK
-------------------------------------
Associate Director Private Placements
-------------------------------------
METROPOLITAN LIFE INSURANCE COMPANY
By /s/ Bob Noll
----------------------------------------
Its Bob Noll Vice President
-------------------------------------
METROPOLITAN INSURANCE AND ANNUITY COMPANY
By /s/ Bob Noll
----------------------------------------
Its Bob Noll Vice President
-------------------------------------
-3-
<PAGE>
Exhibit 11
HUTCHINSON TECHNOLOGY INCORPORATED
STATEMENT REGARDING COMPUTATION
OF NET INCOME PER SHARE - UNAUDITED
(In thousands, except per share data)
Thirteen Weeks Ended Twenty-Six Weeks Ended
--------------------- ----------------------
March 30, March 24, March 30, March 24,
1997 1996 1997 1996
--------- --------- --------- ---------
NET INCOME $16,683 $4,332 $27,800 $7,194
--------- --------- --------- ---------
--------- --------- --------- ---------
NET INCOME PER SHARE -
PRIMARY:
Weighted average common
shares outstanding 17,610 16,344 16,986 16,344
Dilutive effect of stock options
outstanding after application
of treasury stock method 811 444 668 474
--------- --------- ---------- ---------
18,421 16,788 17,654 16,818
--------- --------- ---------- ---------
--------- --------- ---------- ---------
PRIMARY
NET INCOME PER SHARE $.91 $.26 $1.57 $.43
--------- --------- ---------- ---------
--------- --------- ---------- ---------
NET INCOME PER SHARE -
FULLY DILUTED:
Weighted average common
shares outstanding 17,610 16,344 16,986 16,344
Dilutive effect of stock options
outstanding after application
of treasury stock method 811 444 784 474
--------- --------- ---------- ---------
18,421 16,788 17,770 16,818
--------- --------- ---------- ---------
--------- --------- ---------- ---------
FULLY DILUTED
NET INCOME PER SHARE $.91 $.26 $1.56 $.43
--------- --------- ---------- ---------
--------- --------- ---------- ---------
<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 TWENTY-SIX WEEKS ENDED MARCH 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> SEP-30-1996
<PERIOD-END> MAR-30-1997
<CASH> 143,993,000
<SECURITIES> 20,262,000
<RECEIVABLES> 62,133,000
<ALLOWANCES> 3,283,000
<INVENTORY> 17,860,000
<CURRENT-ASSETS> 270,436,000
<PP&E> 294,753,000
<DEPRECIATION> 157,491,000
<TOTAL-ASSETS> 415,121,000
<CURRENT-LIABILITIES> 69,183,000
<BONDS> 74,937,000
0
0
<COMMON> 195,000
<OTHER-SE> 267,290,000
<TOTAL-LIABILITY-AND-EQUITY> 415,121,000
<SALES> 231,165,000
<TOTAL-REVENUES> 231,165,000
<CGS> 161,373,000
<TOTAL-COSTS> 161,373,000
<OTHER-EXPENSES> 10,486,000<F1>
<LOSS-PROVISION> 1,278,000
<INTEREST-EXPENSE> 1,867,000
<INCOME-PRETAX> 35,640,000
<INCOME-TAX> 7,840,000
<INCOME-CONTINUING> 27,800,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,800,000
<EPS-PRIMARY> 1.57
<EPS-DILUTED> 1.56
<FN>
<F1>OTHER EXPENSES REFLECT RESEARCH AND DEVELOPMENT
EXPENSES.
</FN>
</TABLE>
