Hutchinson Technology (HTCH), a manufacturer of suspension assemblies for hard disk drives, saw its loss narrow to $11.21 million or $0.40 a share for the quarter ended Jun. 29, 2014. In the previous year period, the company disclosed a loss of $15.87 million or $0.59 a share. Adjusted net loss earnings per share came in at $0.32, when analysts expected loss of $0.34.
Revenue during the third-quarter went down marginally 2.51 percent to $59.77 million from $61.31 million in the last year period.
Gross margin expanded by 367 basis points over the previous year period to 5.95 percent. Operating margin for the current period stood at negative 12.40 percent as compared to negative 14.56 percent for the previous year period.
The company disclosed operating loss of $7.41 million, compared with operating loss of $8.93 million in the last year period.
Rick Penn, Hutchinson Technology's president and chief executive officer, said the sequential decline in gross profit was in line with the company's expectations for the quarter. ''As planned, we decreased production volume in the third quarter, which is typically a seasonally slower period for suspension assembly demand. The lower production volume resulted in lower fixed cost absorption and a decline in gross profit,'' said Penn.
Cash Flow
Hutchinson Technology has generated cash of $0.34 million from operating activities during the nine month period, down 88.85 percent or $2.73 million when compared with the last year period.
The company has spent $1.02 million cash to meet investing activities during the nine month period, as against cash outgo of $7.97 million in the last year period. It has made net capital expenditure of $9.03 million during the nine month period, which was lower by 39.93 percent or $6 million, from a year ago.
The company has spent $0.38 million cash to meet financing activities during the nine month period, as against cash outgo of $12.47 million in the last year period. It has made net repayment of $0.41 million debt during the nine month period. It has raised net of $0.03 million by selling common stocks.
As on Jun. 29, 2014, the company's cash balance stood at $39.00 million, up 7.47 percent or $2.71 million from Jun. 30, 2013.
Working Capital
Hutchinson Technology has witnessed a decline in the working capital over the last one year. The company's working capital stood at $34.61 million as at Jun. 29, 2014, down $48.58 million or 58.40 percent from $83.19 million on Jun. 30, 2013. It registered a decrease in current ratio to 1.43 as at Jun. 29, 2014 from 3.26 on Jun. 30, 2013.
Debt Position
Hutchinson Technology has witnessed an increase in the total debt over the last one year. As on Jun. 29, 2014, total debt stood at $137.33 million, up 7.05 percent or $9.04 million, from Jun. 30, 2013.
The company's total debt was 49.94 percent of total assets as on Jun. 29, 2014, compared with 41.08 percent on Jun. 30, 2013. It has witnessed an increase in debt to equity ratio to 1.38 on Jun. 29, 2014 compared with 0.87 on Jun. 30, 2013.
Shares of the company declined $0.11 or 4.96 percent to settle at $2.22 on Thursday.
