##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 28, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-14709
 Hutchinson Technology Incorporated
  Minnesota
    
    41-0901840(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)40 West Highland Park Drive N.E.Hutchinson, Minnesota
    
    55350(Address of principal executive offices)
    
    (Zip Code)
 (320) 587-3797
 
 
  þ o
  o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o  o þ




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TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 1A. RISK FACTORSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 6. EXHIBITSSIGNATURESINDEX TO EXHIBITSEX-31.1EX-31.2EX-32    Table of Contents  
 PART I. FINANCIAL INFORMATION
 
  HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS  UNAUDITED
 March 28,
    
    
    September 27,2010
    
    
    2009 (1)(2)(as adjusted)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    96,500
    
    
    $
    106,391Short-term investments, including $4,170 and $3,031 restricted (Note 4)
    
    
    100,275
    
    
    
    96,316Trade receivables, net
    
    
    51,024
    
    
    
    63,448Other receivables
    
    
    8,401
    
    
    
    8,445Inventories
    
    
    46,705
    
    
    
    46,878Other current assets
    
    
    1,728
    
    
    
    4,932Total current assets
    
    
    304,633
    
    
    
    326,410Long-term investments (Note 4)
    
    
    
    
    
    
    24,316Property, plant and equipment, net
    
    
    263,543
    
    
    
    279,336Other assets
    
    
    4,890
    
    
    
    5,425$
    573,066
    
    
    $
    635,487LIABILITIES AND SHAREHOLDERS INVESTMENTCurrent liabilities:Current maturities of long-term debt
    
    $
    56,133
    
    
    $
    102,804Accounts payable
    
    
    12,942
    
    
    
    17,536Accrued expenses
    
    
    8,119
    
    
    
    11,183Accrued compensation and benefits
    
    
    15,626
    
    
    
    13,139Total current liabilities
    
    
    92,820
    
    
    
    144,662Convertible subordinated notes
    
    
    170,635
    
    
    
    166,464Long-term debt, less current maturities
    
    
    128
    
    
    
    946Other long-term liabilities
    
    
    1,168
    
    
    
    1,705Shareholders investment:Common stock, $.01 par value, 100,000,000 shares authorized, 23,362,000
and 23,359,000 issued and outstanding
    
    
    234
    
    
    
    234Additional paid-in capital
    
    
    420,603
    
    
    
    418,572Accumulated other comprehensive income
    
    
    447
    
    
    
    2,503Accumulated loss
    
    
    (112,969
    )
    
    
    (99,599
    )Total shareholders investment
    
    
    308,315
    
    
    
    321,710$
    573,066
    
    
    $
    635,487
 
 (1)
    
    Derived from our 2009 audited consolidated financial
statements.(2)
    
    Adjusted due to required retrospective adoption of the
authoritative guidance for accounting for convertible debt instruments (Note 2).  2




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HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  UNAUDITED
 Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedMarch 28,
    
    
    March 29,
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009 (1)
    
    
    2010
    
    
    2009 (1)(as adjusted)
    
    
    
    
    
    
    (as adjusted)Net sales
    
    $
    87,614
    
    
    $
    79,004
    
    
    $
    195,870
    
    
    $
    198,675Cost of sales
    
    
    80,299
    
    
    
    90,778
    
    
    
    167,778
    
    
    
    210,582Gross profit (loss)
    
    
    7,315
    
    
    
    (11,774
    )
    
    
    28,092
    
    
    
    (11,907
    )Research and development expenses
    
    
    5,436
    
    
    
    7,454
    
    
    
    10,583
    
    
    
    16,337Selling, general and administrative
expenses
    
    
    13,199
    
    
    
    14,934
    
    
    
    25,700
    
    
    
    31,350Severance and other expenses (Note 8)
    
    
    
    
    
    
    4,787
    
    
    
    
    
    
    
    24,314Asset impairment charge (Note 9)
    
    
    
    
    
    
    18,688
    
    
    
    
    
    
    
    50,968Loss from operations
    
    
    (11,320
    )
    
    
    (57,637
    )
    
    
    (8,191
    )
    
    
    (134,876
    )Other income, net
    
    
    262
    
    
    
    287
    
    
    
    820
    
    
    
    610Interest income
    
    
    528
    
    
    
    928
    
    
    
    937
    
    
    
    2,187Gain on extinguishment of debt
    
    
    1
    
    
    
    
    
    
    
    6
    
    
    
    12,175Interest expense
    
    
    (4,162
    )
    
    
    (5,200
    )
    
    
    (8,359
    )
    
    
    (10,076
    )(Loss) gain on short- and long-term
investments
    
    
    (420
    )
    
    
    1,506
    
    
    
    (356
    )
    
    
    3,910Loss before income taxes
    
    
    (15,111
    )
    
    
    (60,116
    )
    
    $
    (15,143
    )
    
    $
    (126,070
    )Provision (benefit) for income taxes
    
    
    479
    
    
    
    (204
    )
    
    $
    (1,773
    )
    
    $
    61Net loss
    
    $
    (15,590
    )
    
    $
    (59,912
    )
    
    $
    (13,370
    )
    
    $
    (126,131
    )Basic loss per share
    
    $
    (0.67
    )
    
    $
    (2.59
    )
    
    $
    (0.57
    )
    
    $
    (5.47
    )Diluted loss per share
    
    $
    (0.67
    )
    
    $
    (2.59
    )
    
    $
    (0.57
    )
    
    $
    (5.47
    )Weighted-average common shares
outstanding
    
    
    23,360
    
    
    
    23,160
    
    
    
    23,359
    
    
    
    23,078Weighted-average common and diluted
shares outstanding
    
    
    23,360
    
    
    
    23,160
    
    
    
    23,359
    
    
    
    23,078
 
 (1)
    
    Adjusted due to required retrospective
adoption of the authoritative guidance for accounting for convertible debt
instruments (Note 2).  3




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HUTCHINSON TECHNOLOGY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  UNAUDITED
 Twenty-Six Weeks EndedMarch 28,
    
    
    March 29,2010
    
    
    2009(1)(as adjusted)OPERATING ACTIVITIES:Net loss
    
    $
    (13,370
    )
    
    $
    (126,131
    )Adjustments to reconcile net loss to cash provided by operating activities:Depreciation and amortization
    
    
    28,113
    
    
    
    44,757Stock-based compensation
    
    
    2,031
    
    
    
    2,865Benefit for deferred tax assets
    
    
    
    
    
    
    (67
    )Loss (gain) on short- and long-term investments
    
    
    356
    
    
    
    (3,910
    )Loss on disposal of assets
    
    
    148
    
    
    
    37Severance and other expenses (Note 8)
    
    
    
    
    
    
    12,513Asset impairment charge (Note 9)
    
    
    
    
    
    
    50,878Amortization of debt discount
    
    
    4,171
    
    
    
    4,356Gain on extinguishment of debt
    
    
    (6
    )
    
    
    (12,175
    )Changes in operating assets and liabilities
    
    
    9,913
    
    
    
    56,523Cash provided by operating activities
    
    
    31,356
    
    
    
    29,646INVESTING ACTIVITIES:Capital expenditures
    
    
    (11,785
    )
    
    
    (17,693
    )Purchases of marketable securities
    
    
    (23,618
    )
    
    
    (10,852
    )Sales/maturities of marketable securities
    
    
    41,633
    
    
    
    109,101Cash provided by investing activities
    
    
    6,230
    
    
    
    80,556FINANCING ACTIVITIES:Proceeds from issuance of common stock
    
    
    
    
    
    
    1,062Repayments of long-term debt
    
    
    (47,477
    )
    
    
    (48,469
    )Proceeds from loan
    
    
    
    
    
    
    59,506Cash (used for) provided by financing activities
    
    
    (47,477
    )
    
    
    12,099Net (decrease) increase in cash and cash equivalents
    
    
    (9,891
    )
    
    
    122,301Cash and cash equivalents at beginning of period
    
    
    106,391
    
    
    
    62,309Cash and cash equivalents at end of period
    
    $
    96,500
    
    
    $
    184,610Supplemental cash flow disclosure:Cash interest paid (net of amount capitalized)
    
    $
    3,806
    
    
    $
    4,748Income taxes
    
    $
    309
    
    
    $
    68
 
 (1)
    
    Adjusted due to required retrospective adoption of the
authoritative guidance for accounting for convertible debt instruments (Note 2).  4




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HUTCHINSON TECHNOLOGY INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
 When we refer to we, our, us, the company or HTI, we mean Hutchinson Technology
Incorporated and its subsidiaries. Unless otherwise indicated, references to 2011 mean our fiscal
year ending September 25, 2011, references to 2010 mean our fiscal year ending September 26,
2010, references to 2009 mean our fiscal year ended September 27, 2009, and references to 2008
mean our fiscal year ended September 28, 2008.
 (1) BASIS OF PRESENTATION
  (2) ACCOUNTING PRONOUNCEMENTS
   5




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March 28,
    
    
    September 27,2010
    
    
    2009(as adjusted)Principal balance
    
    $
    197,500
    
    
    $
    197,500Debt discount
    
    
    (26,865
    )
    
    
    (31,036
    )Convertible subordinated notes, net
    
    $
    170,635
    
    
    $
    166,464
  Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedMarch 28,
    
    
    March 29,
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    2010
    
    
    2009Coupon rate of interest (cash interest)
    
    $
    1,623
    
    
    $
    1,848
    
    
    $
    3,227
    
    
    $
    3,677Debt discount amortization (non-cash
interest)
    
    
    2,120
    
    
    
    2,214
    
    
    
    4,172
    
    
    
    4,357Total interest expense for the 3.25% Notes
    
    $
    3,743
    
    
    $
    4,062
    
    
    $
    7,399
    
    
    $
    8,034
   ConvertibleAs Originally
    
    DebtReported
    
    Adjustments
    
    As AdjustedConvertible subordinated notes
    
    $
    197,500
    
    
    $
    (31,036
    )
    
    $
    166,464Additional paid-in capital
    
    
    377,713
    
    
    
    40,859
    
    
    
    418,572Accumulated loss
    
    
    (89,776
    )
    
    
    (9,823
    )
    
    
    (99,599
    )Total shareholders investment
    
    
    290,674
    
    
    
    31,036
    
    
    
    321,710Total liabilities and shareholders investment
    
    
    635,487
    
    
    
    
    
    
    
    635,487
  Thirteen Weeks Ended
    
    Twenty-Six Weeks EndedMarch 29, 2009
    
    March 29, 2009Convertible
    
    
    
    
    
    
    
    
    
    ConvertibleAs Originally
    
    Debt
    
    
    
    
    
    As Originally
    
    DebtReported
    
    Adjustments
    
    As Adjusted
    
    Reported
    
    Adjustments
    
    As AdjustedInterest expense
    
    $
    (2,986
    )
    
    $
    (2,214
    )
    
    $
    (5,200
    )
    
    $
    (5,720
    )
    
    $
    (4,356
    )
    
    $
    (10,076
    )Loss before income
taxes
    
    
    (57,902
    )
    
    
    (2,214
    )
    
    
    (60,116
    )
    
    
    (121,714
    )
    
    
    (4,356
    )
    
    
    (126,070
    )(Benefit) provision
for income taxes
    
    
    (204
    )
    
    
    
    
    
    
    (204
    )
    
    
    61
    
    
    
    
    
    
    
    61Net loss
    
    
    (57,698
    )
    
    
    (2,214
    )
    
    
    (59,912
    )
    
    
    (121,775
    )
    
    
    (4,356
    )
    
    
    (126,131
    )Basic and diluted
loss per share
    
    
    (2.49
    )
    
    
    (0.10
    )
    
    
    (2.59
    )
    
    
    (5.28
    )
    
    
    (0.19
    )
    
    
    (5.47
    )
  6




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(3) FAIR VALUE MEASUREMENTS
   Level 1
    
    Unadjusted quoted prices in an active market for the identical assets or liabilities at the measurement date.Level 2
    
    Other observable inputs available at the measurement date, other than quoted prices included in Level 1,
either directly or indirectly, including:
 
    
    Quoted prices for similar assets or liabilities in active markets;
    
    Quoted prices for identical or similar assets in nonactive markets;
    
    Inputs other than quoted prices that are observable for the asset or liability; and
    
    Inputs that are derived principally from or corroborated by other observable market data.
 Level 3
    
    Unobservable inputs that reflect the use of significant management judgment. These values are generally
determined using pricing models for which assumptions utilize managements estimates of market participant
assumptions.
  Fair Value Measurements atMarch 28, 2010Level 1
    
    
    Level 2
    
    
    Level 3AssetsTrading securitiesMarketable securities  auction rate
securities (ARS)
    
    $
    
    
    
    $
    
    
    
    $
    61,765Available-for-saleMarketable securities
    
    
    35,287
    
    
    
    
    
    
    
    Rights Offering (described in Note 4 below)
    
    
    
    
    
    
    
    
    
    
    3,223Total assets
    
    $
    35,287
    
    
    $
    
    
    
    $
    64,988
  RightsARS
    
    
    Offering
    
    
    TotalBalances at September 27, 2009
    
    $
    86,207
    
    
    $
    4,037
    
    
    $
    90,244Net realized gain (loss) included in other income
    
    
    458
    
    
    
    (814
    )
    
    
    (356
    )Unrealized loss included in other comprehensive income
    
    
    (2,169
    )
    
    
    
    
    
    
    (2,169
    )Sales and redemptions
    
    
    (22,731
    )
    
    
    
    
    
    
    (22,731
    )Balances at March 28, 2010
    
    $
    61,765
    
    
    $
    3,223
    
    
    $
    64,988
 7




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(4) INVESTMENTS
   Cost
    
    
    Gross Realized
    
    
    Gross Unrealized
    
    
    RecordedBasis
    
    
    Gains
    
    
    Losses
    
    
    Gains
    
    
    Losses
    
    
    BasisAvailable-for-sale securitiesShort-term investmentsDebt securities
    
    $
    35,177
    
    
    $
    
    
    
    $
    
    
    
    $
    110
    
    
    $
    
    
    
    $
    35,287Trading securitiesShort-term investmentsARS  secured
    
    
    65,025
    
    
    
    
    
    
    
    3,260
    
    
    
    
    
    
    
    
    
    
    
    61,765OtherRights Offering
    
    
    
    
    
    
    3,223
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,223$
    100,202
    
    
    $
    3,223
    
    
    $
    3,260
    
    
    $
    110
    
    
    $
    
    
    
    $
    100,275
 8




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Cost
    
    
    Gross Realized
    
    
    Gross Unrealized
    
    
    RecordedBasis
    
    
    Gains
    
    
    Losses
    
    
    Gains
    
    
    Losses
    
    
    BasisAvailable-for-sale securitiesShort-term investmentsDebt securities
    
    $
    30,320
    
    
    $
    
    
    
    $
    
    
    
    $
    68
    
    
    $
    
    
    
    $
    30,388Long-term investmentsARS
    
    
    25,200
    
    
    
    
    
    
    
    3,053
    
    
    
    2,169
    
    
    
    
    
    
    
    24,316Total available-for-sale
securities
    
    
    55,520
    
    
    
    
    
    
    
    3,053
    
    
    
    2,237
    
    
    
    
    
    
    
    54,704Trading securitiesShort-term investmentsARS  secured
    
    
    66,125
    
    
    
    
    
    
    
    4,234
    
    
    
    
    
    
    
    
    
    
    
    61,891OtherRights Offering
    
    
    
    
    
    
    4,037
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,037$
    121,645
    
    
    $
    4,037
    
    
    $
    7,287
    
    
    $
    2,237
    
    
    $
    
    
    
    $
    120,632
    9




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10




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(5) TRADE RECEIVABLES
   Increases in the
    
    Reductions in theAllowance
    
    Allowance forRelated to
    
    Returns UnderSeptember 27, 2009
    
    Warranties Issued
    
    Warranties
    
    March 28, 2010$275
    
    $143
    
    ($346)
    
    $72
 (6) INVENTORIES
  March 28,
    
    
    September 27,2010
    
    
    2009Raw materials
    
    $
    19,241
    
    
    $
    21,069Work in process
    
    
    6,536
    
    
    
    9,990Finished goods
    
    
    20,928
    
    
    
    15,819$
    46,705
    
    
    $
    46,878
 11




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(7) EARNINGS (LOSS) PER SHARE
  Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedMarch 28,
    
    
    March 29,
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    2010
    
    
    2009(as adjusted)
    
    
    
    
    
    
    (as adjusted)Net loss
    
    $
    (15,590
    )
    
    $
    (59,912
    )
    
    $
    (13,370
    )
    
    $
    (126,131
    )Plus: interest expense on convertible subordinated notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Less: additional profit-sharing expense and income tax
provision
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss available to common shareholders
    
    $
    (15,590
    )
    
    $
    (59,912
    )
    
    $
    (13,370
    )
    
    $
    (126,131
    )Weighted-average common shares outstanding
    
    
    23,360
    
    
    
    23,160
    
    
    
    23,359
    
    
    
    23,078Dilutive potential common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-average common and diluted shares outstanding
    
    
    23,360
    
    
    
    23,160
    
    
    
    23,359
    
    
    
    23,078Basic loss per share
    
    $
    (0.67
    )
    
    $
    (2.59
    )
    
    $
    (0.57
    )
    
    $
    (5.47
    )Diluted loss per share
    
    $
    (0.67
    )
    
    $
    (2.59
    )
    
    $
    (0.57
    )
    
    $
    (5.47
    )
  (8) SEVERANCE AND OTHER EXPENSES
   12




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(9) ASSET IMPAIRMENT
   (10) INCOME TAXES
     13




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(11) SHORT- AND LONG-TERM DEBT
  March 28,
    
    
    September 27,2010
    
    
    2009(as adjusted)3.25% Notes
    
    $
    197,500
    
    
    $
    197,500Debt discount
    
    
    (26,865
    )
    
    
    (31,036
    )2.25% Notes
    
    
    
    
    
    
    45,554Eau Claire building mortgage
    
    
    1,735
    
    
    
    2,497UBS Credit Line
    
    
    54,526
    
    
    
    55,699Total debt
    
    
    226,896
    
    
    
    270,214Less: Current maturities
    
    
    (56,133
    )
    
    
    (102,804
    )$
    170,763
    
    
    $
    167,410
      14




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(12) DERIVATIVES
       15




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Location of Gain or(Loss)Reclassified fromDerivatives in Cash Flow
    
    Amount of Gain or (Loss)
    
    
    Accumulated OCI
    
    
    Amount of Gain or (Loss)Value Hedging
    
    Recognized in OCI on Derivative
    
    
    into Income
    
    
    Reclassified from AccumulatedRelationships
    
    (Effective Portion)
    
    
    (Effective Portion)
    
    
    OCI into Income (Effective Portion)Thirteen Weeks
    
    
    Thirteen Weeks
    
    
    
    
    
    
    Thirteen Weeks
    
    
    Thirteen WeeksEnded
    
    
    Ended
    
    
    
    
    
    
    Ended
    
    
    EndedMarch 28,
    
    
    March 29,
    
    
    
    
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    
    
    
    
    2010
    
    
    2009Commodity contracts
    
    $
    (89
    )
    
    $
    1,368
    
    
    Cost of sales
    
    $
    (102
    )
    
    $
    (678
    )
 Location of Gain or(Loss)Reclassified fromDerivatives in Cash Flow
    
    Amount of Gain or (Loss)
    
    
    Accumulated OCI
    
    
    Amount of Gain or (Loss)Value Hedging
    
    Recognized in OCI on Derivative
    
    
    into Income
    
    
    Reclassified from AccumulatedRelationships
    
    (Effective Portion)
    
    
    (Effective Portion)
    
    
    OCI into Income (Effective Portion)Twenty-Six
    
    
    Twenty-Six
    
    
    
    
    
    
    Twenty-Six
    
    
    Twenty-SixWeeks Ended
    
    
    Weeks Ended
    
    
    
    
    
    
    Weeks Ended
    
    
    Weeks EndedMarch 28,
    
    
    March 29,
    
    
    
    
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    
    
    
    
    2010
    
    
    2009Commodity contracts
    
    $
    (237
    )
    
    $
    925
    
    
    Cost of sales
    
    $
    (343
    )
    
    $
    (1,509
    )
 Location of Gain or (Loss)Recognized in Income on
    
    
    Amount of Gain or (Loss)
    
    
    Amount of Gain or (Loss)Derivative (Ineffective
    
    
    Recognized in Income
    
    
    Recognized in IncomeDerivatives in Cash Flow
    
    Portion and Amount
    
    
    on Derivative (Ineffective Portion and
    
    
    on Derivative (Ineffective Portion andValue Hedging
    
    Excluded from
    
    
    Amount Excluded from
    
    
    Amount Excluded fromRelationships
    
    Effectiveness Testing)
    
    
    Effectiveness Testing)
    
    
    Effectiveness Testing)ThirteenWeeks
    
    
    Thirteen
    
    
    Twenty-Six
    
    
    Twenty-SixEnded
    
    
    Weeks Ended
    
    
    Weeks Ended
    
    
    Weeks EndedMarch 28,
    
    
    March 29,
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    2010
    
    
    2009Commodity contracts
    
    Cost of sales
    
    $
    
    
    
    $
    (41
    )
    
    $
    
    
    
    $
    (50
    )
 Derivatives Not
    
    Location of Gain or (Loss)
    
    
    Amount of Gain or (Loss)
    
    
    Amount of Gain or (Loss)Designated as
    
    Recognized in Income on
    
    
    Recognized in Income on
    
    
    Recognized in Income onHedging Instruments
    
    Derivative
    
    
    Derivative
    
    
    DerivativeThirteenWeeks
    
    
    Thirteen
    
    
    Twenty-Six
    
    
    Twenty-SixEnded
    
    
    Weeks Ended
    
    
    Weeks Ended
    
    
    Weeks EndedMarch 28,
    
    
    March 29,
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    2010
    
    
    2009Commodity contracts
    
    Cost of sales
    
    $
    
    
    
    $
    308
    
    
    $
    
    
    
    $
    (90
    )
 16




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Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedMarch 28,
    
    
    March 29,
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    2010
    
    
    2009Beginning of period unrealized gain in
accumulated OCI
    
    $
    118
    
    
    $
    1,480
    
    
    $
    267
    
    
    $
    1,037Decrease in fair value of derivative instruments
    
    
    (64
    )
    
    
    (708
    )
    
    
    (196
    )
    
    
    (481
    )(Loss) gain reclassified from OCI into cost of sales
    
    
    (102
    )
    
    
    (678
    )
    
    
    (343
    )
    
    
    (1,509
    )Loss on dedesignated derivative instruments
reclassified from OCI into cost of sales
    
    
    
    
    
    
    (559
    )
    
    
    
    
    
    
    (470
    )Settlements
    
    
    77
    
    
    
    577
    
    
    
    301
    
    
    
    1,535End of period unrealized gain in accumulated OCI
    
    $
    29
    
    
    $
    112
    
    
    $
    29
    
    
    $
    112
 (13) STOCK-BASED COMPENSATION
    Twenty-Six Weeks EndedMarch 28,
    
    March 29,2010
    
    2009Risk-free interest rate
    
    
    2.7
    %
    
    
    1.9
    %Expected volatility
    
    
    80.0
    %
    
    
    60.0
    %Expected life (in years)
    
    
    7.4
    
    
    
    7.7Dividend yield
    
    
    
    
    
    
    
  17




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##### Table of Contents



Weighted-AverageWeighted-Average
    
    Remaining
    
    AggregateNumber of Shares
    
    Exercise Price ($)
    
    Contractual Life (yrs.)
    
    Intrinsic Value ($)Outstanding at September 27, 2009
    
    
    3,570,323
    
    
    
    21.08
    
    
    
    5.5
    
    
    
    2,601,000Granted
    
    
    1,037,211
    
    
    
    7.37Exercised
    
    
    
    
    
    
    Expired/Canceled
    
    
    (305,590
    )
    
    
    18.64Outstanding at March 28, 2010
    
    
    4,301,944
    
    
    
    17.95
    
    
    
    6.7
    
    
    
    2,157,000Options vested or expected to vest at
March 28, 2010
    
    
    4,217,959
    
    
    
    18.16
    
    
    
    6.6
    
    
    
    2,157,000Options exercisable at March 28, 2010
    
    
    2,372,833
    
    
    
    25.83
    
    
    
    4.5
    
    
    
    
  Options Outstanding
    
    Options ExercisableWeighted-AverageRemainingRange of
    
    Number
    
    Contractual
    
    Weighted-Average
    
    Number
    
    Weighted-AverageExercise Prices ($)
    
    Outstanding
    
    Life (yrs.)
    
    Exercise Price ($)
    
    Exercisable
    
    Exercise Price ($)3.03-10.00
    
    
    1,670,861
    
    
    
    9.6
    
    
    
    5.70
    
    
    
    
    
    
    
    10.01-20.00
    
    
    273,960
    
    
    
    1.7
    
    
    
    18.63
    
    
    
    243,960
    
    
    
    18.9620.01-25.00
    
    
    1,027,892
    
    
    
    4.3
    
    
    
    23.19
    
    
    
    1,014,142
    
    
    
    23.2025.01-30.00
    
    
    780,516
    
    
    
    7.0
    
    
    
    26.78
    
    
    
    566,016
    
    
    
    27.0030.01-45.06
    
    
    548,715
    
    
    
    4.4
    
    
    
    32.53
    
    
    
    548,715
    
    
    
    32.53Total
    
    
    4,301,944
    
    
    
    6.7
    
    
    
    17.95
    
    
    
    2,372,833
    
    
    
    25.83
 (14) SEGMENT REPORTING
   18




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Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedMarch 28,
    
    
    March 29,
    
    
    March 28,
    
    
    March 29,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales:Disk Drive Components Division:Suspension assemblies
    
    $
    85,344
    
    
    $
    76,198
    
    
    $
    190,944
    
    
    $
    193,465Other products
    
    
    1,583
    
    
    
    2,348
    
    
    
    3,730
    
    
    
    4,487Total Disk Drive Components Division
    
    
    86,927
    
    
    
    78,546
    
    
    
    194,674
    
    
    
    197,952BioMeasurement Division
    
    
    687
    
    
    
    458
    
    
    
    1,196
    
    
    
    723$
    87,614
    
    
    $
    79,004
    
    
    $
    195,870
    
    
    $
    198,675(Loss) income from operations:Disk Drive Components Division
    
    $
    (6,044
    )
    
    $
    (51,388
    )
    
    $
    1,976
    
    
    $
    (121,989
    )BioMeasurement Division
    
    
    (5,276
    )
    
    
    (6,249
    )
    
    
    (10,167
    )
    
    
    (12,887
    )$
    (11,320
    )
    
    $
    (57,637
    )
    
    $
    (8,191
    )
    
    $
    (134,876
    )
 (15) SUBSEQUENT EVENTS
  19




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When we refer to we, our, us, the company or HTI, we mean Hutchinson Technology
Incorporated and its subsidiaries. Unless otherwise indicated, references to 2011 mean our fiscal
year ending September 25, 2011, references to 2010 mean our fiscal year ending September 26,
2010, references to 2009 mean our fiscal year ended September 27, 2009, and references to 2008
mean our fiscal year ended September 28, 2008.
  GENERAL
   InSpectra ® StO 2 2 2 2
    20




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Suspension Assembly Shipments by Quarter2009
    
    2010First
    
    Second
    
    Third
    
    Fourth
    
    First
    
    SecondSuspension
assembly shipment
quantities
    
    
    155
    
    
    
    107
    
    
    
    146
    
    
    
    145
    
    
    
    155
    
    
    
    130
       21




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RESULTS OF OPERATIONS
 Thirteen Weeks Ended March 28, 2010 vs. Thirteen Weeks Ended March 29, 2009
        22




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Twenty-Six Weeks Ended March 28, 2010 vs. Twenty-Six Weeks Ended March 29, 2009
      23




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LIQUIDITY AND CAPITAL RESOURCES
  24




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25




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26




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2
   27




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CRITICAL ACCOUNTING POLICIES
  RECENT ACCOUNTING PRONOUNCEMENTS
  FORWARD-LOOKING STATEMENTS
  28




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29




---



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EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
  CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
  30




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PART II. OTHER INFORMATION
 
   We may be unable to achieve our financial and strategic goals in connection with investments in new
manufacturing locations.
  Healthcare reform legislation could adversely affect our revenue and financial condition.
  31




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##### Table of Contents



1.
    
    Election of nine directors for a one-year
term:
 For
    
    WithheldMark A. Augusti
    
    
    14,054,613
    
    
    
    211,860W. Thomas Brunberg
    
    
    13,933,912
    
    
    
    332,561Wayne M. Fortun
    
    
    13,962,088
    
    
    
    304,385Jeffrey W. Green
    
    
    13,967,762
    
    
    
    298,711Gary D. Henley
    
    
    14,051,995
    
    
    
    214,478Russell Huffer
    
    
    13,941,867
    
    
    
    324,606William T. Monahan
    
    
    14,118,311
    
    
    
    148,162Richard B. Solum
    
    
    14,021,210
    
    
    
    245,263Thomas R. VerHage
    
    
    14,052,421
    
    
    
    214,052
 For
    
    Against
    
    Abstain
    
    Broker Non-Vote2.
    
    Ratification of
the appointment of
Deloitte & Touche LLP as
independent registered
public accountants for
the 2010 fiscal year.
    
    
    20,607,173
    
    
    
    71,904
    
    
    
    26,099
    
    
    
    0
 
  (a) Exhibits :
 Unless otherwise indicated, all documents incorporated herein by reference to a document filed with
the SEC pursuant to the Exchange Act, are located under SEC file number 0-14709.
 3.1
    
    Amended and Restated Articles of Incorporation of HTI (incorporated
by reference to Exhibit 3.1 to HTIs Quarterly Report on Form 10-Q
for the quarter ended 12/29/02).3.2
    
    Restated By-Laws of HTI, as amended December 3, 2008 (incorporated by
reference to Exhibit 3.1 to HTIs Current Report on Form 8-K filed
12/9/08).31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.32
    
    Section 1350 Certifications.
 32




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SIGNATURES
  HUTCHINSON TECHNOLOGY INCORPORATEDDate: May 5, 2010
    By
    /s/ Wayne M. FortunWayne M. FortunPresident and Chief Executive OfficerDate: May 5, 2010
    By
    /s/ Steven L. PolacekSteven L. PolacekSenior Vice President and Chief Financial Officer




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INDEX TO EXHIBITS
 Exhibit No.
    
    
    
    Page3.1
    
    Amended and Restated Articles of Incorporation of HTI.
    
    Incorporated by Reference3.2
    
    Restated By-Laws of HTI, as amended December 3, 2008.
    
    Incorporated by Reference31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
    
    Filed Electronically31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
    
    Filed Electronically32
    
    Section 1350 Certifications.
    
    Filed Electronically