Tuesday, Hutchinson Technology Inc. (HTCH), a disc drive suspension assemblies maker, reported a net loss for the first quarter, hurt by costs and restructuring charges.
The Hutchinson, Minnesota-based company reported a first-quarter net loss of $64.1 million or $2.79 per share, compared to net income of $2.3 million or $0.09 per share in the same quarter last year.
Excluding items, net loss was $26.8 million or $1.17 per share for the first quarter.
On average, six analysts polled by First Call/Thomson Financial expected the company to report a loss of $0.94 million for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter plunged to $119.7 million from $173.1 million in the comparable quarter. Analysts expected the company to report revenue of $123.00 million for the quarter.
Research and development expenses for the quarter decreased to $8.9 million from $10.4 million in the year ago quarter. Selling, general and administrative expenses for the quarter were $16.4 million, down from $18.4 million in the prior year quarter.
The first-quarter results for the company included asset impairment charges of $32.3 million, severance costs of $19.5 million related to workforce reduction, $12.2 million gain on the repurchase of $59.9 million par value of its 2.25% convertible subordinated notes due 2010, and a $2.4 million net gain related to the valuation of auction-rate securities portfolio.
For the fiscal year 2009, net sales for the BioMeasurement Division are expected to reach $3 million-$5 million. As a result of the expected increase in sales and restructuring actions, the division's operating loss is expected to decline in fiscal 2009.
Commenting on the results, Wayne Fortun, President and Chief Executive Officer said the company has made structural changes that would consolidate certain operations, lower fixed costs, preserve cash to meet debt obligations and make strategic investments as needed. The company expects that these actions would generate $110 million-$125 million in annualized cost savings and reduce the expected loss in fiscal 2009.
HTCH closed Tuesday's regular trade at $2.79, up $0.05 or 1.82%, on a volume of 193,878 shares on the Nasdaq.
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