Hutchinson: Preliminary Sales for 2Q09

Hutchinson Technology Incorporated announced that it shipped approximately 107 million suspension assemblies during its fiscal 2009 second quarter ended March 29, 2009, compared with approximately 155 million in the preceding quarter. The company’s combined shipments for the mobile and enterprise segments declined more than 50% sequentially, while shipments for the 3.5" ATA segment increased sequentially. The company’s average selling price declined sequentially from $0.76 to $0.71 due primarily to this shift in product mix, as well as an expected continuation of aggressive pricing conditions. This decline in average selling price, combined with the lower shipments, resulted in net sales of approximately $79 million for the fiscal 2009 second quarter.

Hutchinson Technology was recently notified by Seagate Technology that it intends to phase out its procurement of suspension assemblies from the company. Hutchinson Technology estimates that this change will occur over the next 18 to 24 months. In the quarter ended March 29, 2009, Seagate Technology represented approximately 19% of the company’s net sales. Hutchinson Technology is currently evaluating the impact of this change on its overall strategies and restructuring plans and will provide further details in its second quarter results announcement and conference call. As previously reported, the company is making structural changes that consolidate certain operations, preserve cash and lower its annualized costs by $110 million to $125 million.