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EXHIBIT 99
CONTACT:
Todd Bradley
Investor Relations
Hutchinson Technology
320-587-1605
HUTCHINSON TECHNOLOGY REPORTS THIRD QUARTER NET LOSS
LOSS PER SHARE BEFORE CHARGE TOTALS $.42
THIRD QUARTER RESULTS INCLUDE ASSET WRITE-DOWN AND SEVERANCE CHARGES
TOTALING $16.7 MILLION
BOARD ADOPTS SHARE RIGHTS PLAN
HUTCHINSON, Minn., July 19, 2000 --- Hutchinson Technology Incorporated
(Nasdaq/NMS: HTCH) today reported a net loss of $22,919,000, or $.92 per diluted
share, on net sales of $108,663,000 for the fiscal third quarter ended June 25,
2000.
The company's fiscal 2000 third quarter results include a pre-tax
charge to earnings of $16,740,000, or $.50 per diluted share, related to
write-downs of certain assets and severance costs for approximately 950
positions eliminated in the quarter. The company had previously announced that
it expected to take this charge during its fiscal third quarter. Components of
the third quarter charge include a $12,995,000 write-down related to excess
manufacturing equipment and tooling, primarily for the company's TSA
suspensions, and $3,745,000 of severance costs.
Excluding this charge, the company would have reported a fiscal 2000
third quarter net loss of $10,364,000, or $.42 per diluted share. In the
comparable fiscal 1999 period, the company reported a net loss of $5,494,000, or
$.22 per diluted share, on net sales of $131,257,000.
For the nine months ended June 25, 2000, Hutchinson Technology reported
a net loss of $75,189,000, or $3.04 per diluted share, on net sales of
$343,423,000. Results for the nine-month period include cumulative pre-tax
charges to earnings of $63,268,000, or $1.92 per diluted share, related to
write-downs of certain assets and severance costs for positions eliminated
during the first nine months of fiscal 2000.
Excluding the year-to-date write-downs and severance costs, the company
would have reported a net loss of $27,738,000, or $1.12 per diluted share, for
the nine months ended June 25, 2000. In the comparable fiscal 1999 period, the
company reported net income of $19,787,000, or $.88 per diluted share, on net
sales of $438,898,000.
Wayne M. Fortun, Hutchinson Technology's president and chief executive
officer, said that demand for the company's suspension assemblies remained
essentially flat during the fiscal 2000 third quarter, with total suspension
assembly shipments for the quarter totaling 113 million compared to 119 million
in the fiscal 2000 second quarter and 147 million in the fiscal 1999 third
quarter. TSA suspensions accounted for approximately 68% of units shipped in the
fiscal 2000 third quarter compared 54% of units shipped in the fiscal 2000
second quarter and to 38% of units shipped in the fiscal 1999 third quarter.
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2--Hutchinson Technology Reports Third Quarter Results
"Demand has stabilized after declining steadily over the past several
quarters," said Fortun. He noted that the company has been selected to provide
TSA suspensions to Seagate Technology, Inc. (NYSE: SEG) on a specific disk drive
program and will begin supplying pre-production parts over the next few months.
"In light of market conditions, we have been focusing throughout the
current fiscal year on reducing costs, improving efficiency and maintaining a
strong cash position. Our prior operations consolidations and ongoing expense
reduction efforts are delivering cost savings meeting our goals. As a result, we
expect to further reduce our losses in our fiscal fourth quarter." Fortun said
the company currently expects to report a fourth quarter net loss of $.15 to
$.25 per diluted share on net sales currently projected to be $110 to $115
million.
Employment at Hutchinson Technology currently totals approximately
4,900 compared to approximately 6,300 at the end of the fiscal 2000 second
quarter and approximately 8,000 at the end of the fiscal 1999 third quarter.
At June 25, 2000, the company's cash and cash equivalents and
securities available for sale totaled $223.8 million, down from $239.5 million
at March 26, 2000. Fortun said the decline results primarily from the timing of
the receipt of certain accounts receivable. In light of its financial
performance, the company is currently negotiating amendments to covenants of
certain financing agreements.
The Board of Directors of Hutchinson Technology approved today a share
rights plan that is intended to increase the likelihood that shareholders of
Hutchinson Technology will realize the long-term value of their investment and
that all shareholders will receive fair and equal treatment for all of their
shares in the event of an attempted takeover of the company. The share rights
plan was not adopted in response to any current takeover approach.
Under the plan, the Board of Directors has declared a dividend
distribution of one common share purchase right on each outstanding share of
common stock of Hutchinson Technology held by shareholders of record as of the
close of business on August 10, 2000. The rights will expire on August 10, 2010.
Each right will entitle shareholders of Hutchinson Technology to buy
one-tenth of a share of common stock of the company at an exercise price of
$10.00 (subject to adjustment). The rights generally will become exercisable
after any person or group acquires beneficial ownership of 15 percent or more of
the company's common stock or announces a tender or exchange offer that would
result in that person or group beneficially owning 15 percent or more of the
company's common stock. If any person or group becomes an owner of 15 percent or
more of the company's common stock, each right will entitle its holder (other
than the 15-percent shareholder or group and related persons) to purchase, at an
adjusted exercise price equal to ten times the previous purchase price, shares
of the company's common stock having a value of twice the right's adjusted
exercise price.
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3--Hutchinson Technology Reports Third Quarter Results
In addition, if Hutchinson Technology is acquired in a merger or other
business-combination transaction, or sells 50 percent or more of its assets or
earnings power, each right generally will entitle its holder to purchase, at the
right's adjusted exercise price, common shares of the acquiring company having a
market value of twice the right's adjusted exercise price.
In certain circumstances, at the option of the Board of Directors,
Hutchinson Technology may exchange the rights for shares of its common stock,
delay or temporarily suspend the exercisability of the rights, or reduce the
stock-ownership threshold of 15 percent to not less than 10 percent.
At the option of the Board of Directors, the company may redeem the
rights at $.001 per right (subject to adjustment) at any time before a person or
group becomes the beneficial owner of at least 15 percent of the company's
common stock.
Further details of the new share rights plan will be outlined in a
letter to be mailed to all shareholders of Hutchinson Technology of record as of
the close of business on August 10, 2000.
Hutchinson Technology is the leading worldwide supplier of suspension
assemblies for disk drives.
This announcement contains forward-looking statements regarding the
company's anticipated financial results for its fiscal 2000 fourth quarter and
expected cost reduction efforts. These statements involve risks and
uncertainties. The company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of changes in market
consumption suspension assemblies, the company's ability to fully realize
anticipated cost reductions and other factors described from time to time in the
company's reports filed with the Securities and Exchange Commission.
(Financial data follows)
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4--Hutchinson Technology Reports Third Quarter Results
Hutchinson Technology Incorporated
(Nasdaq/NMS: HTCH)
<TABLE>
<CAPTION>
Third Quarter Ended
June 25, 2000 June 27, 1999
------------- -------------
<S> <C> <C>
Net sales $ 108,663,000 $ 131,257,000
Gross profit (loss) $ 4,238,000 $ 9,393,000
Asset impairment and severance $ (16,740,000) $ --
Income (loss) from operations $ (30,763,000) $ (7,520,000)
Net income (loss) $ (22,919,000) $ (5,494,000)
Net income (loss) per common share $ (.92) $ (.22)
Net income (loss) per common share --
Assuming dilution $ (.92) $ (.22)
Weighted average common and common equivalent
shares outstanding:
Common shares 24,791,000 24,650,000
Common shares -- assuming dilution 24,791,000 24,650,000
<CAPTION>
Thirty-nine Weeks Ended
June 25, 2000 June 27, 1999
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<S> <C> <C>
Net sales $ 343,423,000 $ 438,898,000
Gross profit (loss) $ 16,663,000 $ 79,368,000
Asset impairment and severance $ (63,268,000) $ --
Income (loss) from operations $(100,289,000) $ 26,363,000
Net income (loss) $ (75,189,000) $ 19,787,000
Net income (loss) per common share $ (3.04) $ 0.88
Net income (loss) per common share --
Assuming dilution $ (3.04) $ 0.88
Weighted average common and common equivalent
shares outstanding:
Common shares 24,765,000 22,371,000
Common shares -- assuming dilution 24,765,000 28,302,000
<CAPTION>
At June 25, 2000 At Sept. 26, 1999
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<S> <C> <C>
Total assets $ 672,254,000 $ 751,849,000
Cash and cash equivalents $ 107,312,000 $ 98,820,000
Securities available for sale $ 116,499,000 $ 139,402,000
Total shareholders' investment $ 390,544,000 $ 464,959,000
</TABLE>
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