Hutchinson Expects Near Breakeven in Fiscal 4Q09

Hutchinson Technology Inc. expects net income for its fiscal 2009 fourth quarter ending September 27, 2009 to be near breakeven on net sales of $100 to $107 million and unit shipments of 140 to 150 million suspension assemblies.

Through the first nine weeks of its fourth quarter, the company had net sales of approximately $69 million and had shipped approximately 97 million suspension assemblies.

The fiscal 2009 fourth quarter is benefiting from the full effects of the company’s fiscal 2009 restructuring actions. Net income in the fiscal 2009 fourth quarter will also benefit from a $1.9 million gain on the sale of the company’s building in Sioux Falls, South Dakota, and the repurchase of $19.5 million par value of the company’s 2.25% Convertible Subordinated Notes due 2010 for $19.3 million, including accrued interest.

Wayne M. Fortun, Hutchinson Technology’s president and chief executive officer, said that while the company expects improved fourth quarter results, it is likely to incur a net loss in the fiscal 2010 first quarter. The company’s fiscal 2010 first quarter results will include a non-cash interest expense of approximately $2.2 million due to the company’s adoption of Financial Accounting Standards Board Staff Position No. APB 14-1, ‘Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement),’ as well as costs associated with establishing its Thailand assembly operations.