EX-99.1 2 a40100exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
Company contacts:
Bob Blair
Investor Relations
949.672.7834
robert.blair@wdc.com
Steve Shattuck
Public Relations
949.672.7817
steve.shattuck@wdc.com
FOR IMMEDIATE RELEASE:
WDÒ ANNOUNCES STRONG Q3 YEAR-ON-YEAR PERFORMANCE:
REVENUE OF $2.1 BILLION UP 50 PERCENT,
EARNINGS PER SHARE OF $1.23 UP 132 PERCENT
Hard Drive Revenue Grows 43 Percent, Drive Shipments Up 41 Percent
LAKE FOREST, Calif. — Apr. 24, 2008 — Western Digital Corp. (NYSE: WDC) today reported revenue of $2.1 billion, comprised of $2.022 billion of hard drive revenue and $89 million of revenue from media and substrate sales for the third fiscal quarter ending Mar. 28, 2008. Hard drive revenue grew by 43 percent over the prior-year comparative period on shipments of approximately 34.5 million units, a year-on-year increase of 41 percent in unit volume. Net income was $280 million, or $1.23 per share. Earnings per share grew 132 percent over the prior year. In the year-ago quarter, the company reported revenue of $1.4 billion, unit shipments of 24.5 million and net income of $121 million, or $.53 per share.
     The company generated $431 million in cash from operations during the March quarter, ending with total cash, cash equivalents and short-term investments of $949 million. During the quarter, the company repaid $260 million of debt and repurchased $44 million of common stock.

 

 

WD Announces Strong Q3 Year-On-Year Performance
Page 2
The company recently announced an additional authorization to repurchase $500 million of its shares in the next five years.
     “The hard drive market continued to demonstrate strong year-on-year unit growth of 16.2 percent in the March quarter, while exhibiting an expected seasonal decline of 8.6 percent from the exceptionally strong December quarter, as anticipated in our guidance for the quarter issued on January 23,” said John Coyne, WD president and chief executive officer. “Our March quarter revenues demonstrate strong customer preference for the WD value proposition of quality and reliability, a compelling product portfolio and responsive and timely availability, supported by a demonstrated willingness and capability to invest in the future. Our earnings performance is a result of healthy market demand, disciplined financial management, a competitive cost structure, and a committed team with a passion to succeed. We remain very enthusiastic about our opportunities in the fast-growing hard drive industry in the years ahead.”
     For the nine-months ended Mar. 28, 2008, WD reported revenues of $6.1 billion and hard drive shipments of 98.1 million, for increases of 48 percent and 37 percent, respectively, over the comparable prior-year period revenue of $4.1 billion and unit shipments of 71.7 million. GAAP net income for the nine-months was $654 million, or $2.89 per share. Excluding $49 million of non-recurring charges for acquired in-process research and development and $60 million of non-recurring tax charges in the first quarter, non-GAAP net income for the current nine-month period was $763 million, or $3.38 per share. These current-period non-GAAP earnings reflect an approximately 117 percent increase over the prior-year nine-month net income and earnings per share amounts of $352 million and $1.56, respectively. There were no non-recurring items in the prior-year nine-month period and therefore there is no comparable non-GAAP measure for the prior year.

 

 

WD Announces Strong Q3 Year-On-Year Performance
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     The investment community conference call to discuss these results and the company’s outlook will be broadcast live over the Internet today at 2 p.m. PDT/5 p.m. EDT. The call will be accessible live and on an archived basis via the link below:
         
 
  Audio Webcast:   www.westerndigital.com/investor
 
      Click on “Conference Calls”
 
 
  Telephone Replay:   800-294-3089 (toll-free)
 
      +1-402-220-9768 (international)
About WD
     WD, one of the storage industry’s pioneers and long-time leaders, provides products and services for people and organizations that collect, manage and use digital information. The company produces reliable, high-performance hard drives that keep users’ data accessible and secure from loss. WD applies its storage expertise to consumer products for external, portable and shared storage applications.
     WD was founded in 1970. The company’s storage products are marketed to leading systems manufacturers, selected resellers and retailers under the Western Digital and WD brand names. Visit the Investor section of the company’s Web site (www.westerndigital.com) to access a variety of financial and investor information.
     This press release contains forward-looking statements concerning customer preference for WD’s brand and value proposition, WD’s opportunities in the hard drive industry and the growth of the hard drive industry. These forward-looking statements are based on WD’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including: supply and demand conditions in the hard drive industry; actions by competitors; unexpected advances in competing technologies; uncertainties related to the development and introduction of products

 

 

WD Announces Strong Q3 Year-On-Year Performance
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based on new technologies and expansion into new hard drive markets; business conditions and growth in the desktop, mobile PC, enterprise, consumer electronics and external hard drive markets; pricing trends and fluctuations in average selling prices; failure to continue to effectively integrate WD’s media and head technologies; changes in the availability and cost of commodity materials and specialized product components that WD does not make internally; negative impacts of the conditions in the global credit markets on our current investment portfolio; and other risks and uncertainties listed in WD’s recent Form 10-Q filed with the SEC on February 5, 2008, to which your attention is directed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and WD undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
###
Western Digital, WD, and the WD logo are registered trademarks of Western Digital Technologies, Inc. in the U.S. and other countries.

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
                 
    Mar. 28,     Jun. 29,  
    2008     2007  
ASSETS
 
                
Current assets:
                
Cash and cash equivalents
  $ 917     $ 700  
Short-term investments
    32       207  
Accounts receivable, net
    1,014       697  
Inventories
    455       259  
Other
    211       166  
 
            
Total current assets
    2,629       2,029  
Property and equipment, net
    1,529       741  
Goodwill and other intangible assets, net
    187       4  
Other assets
    198       127  
 
            
Total assets
  $ 4,543     $ 2,901  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
                
Current liabilities:
                
Accounts payable
  $ 1,144     $ 882  
Customer advances
    28       —  
Accrued expenses
    226       163  
Accrued warranty
    85       73  
Current portion of long-term debt
    11       12  
 
            
Total current liabilities
    1,494       1,130  
Long-term debt
    503       10  
Other liabilities
    129       45  
 
            
Total liabilities
    2,126       1,185  
Shareholders’ equity
    2,417       1,716  
 
            
Total liabilities and shareholders’ equity
  $ 4,543     $ 2,901  
 
            

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
                                         
    Three Months Ended     Nine Months Ended  
    Mar. 28,     Dec. 28,     Mar. 30,     Mar. 28,     Mar. 30,  
    2008     2007     2007     2008     2007  
 
                                        
Revenue, net
   $ 2,111     $ 2,204     $ 1,410     $ 6,081     $ 4,101  
Cost of revenue
     1,634       1,691       1,188       4,767       3,406  
 
                              
Gross margin
     477       513       222       1,314       695  
 
                              
Operating expenses:
                                        
Research and development
     123       122       75       336       227  
Selling, general and administrative
     56       59       32       164       132  
Acquired in-process research and development
     —       —       —       49       —  
 
                              
Total operating expenses
     179       181       107       549       359  
 
                              
Operating income
     298       332       115       765       336  
Net interest and other expense
     (8 )     (16 )     7       (21 )     20  
 
                              
Income before income taxes
     290       316       122       744       356  
Income tax provision
     10       11       1       90       4  
 
                              
Net income
   $ 280     $ 305     $ 121     $ 654     $ 352  
 
                              
 
                                        
Net income per common share:
                                        
 
                                        
Basic
   $ 1.26     $ 1.39     $ .55     $ 2.97     $ 1.60  
 
                              
Diluted
   $ 1.23     $ 1.35     $ .53     $ 2.89     $ 1.56  
 
                              
 
                                        
Common shares used in computing per share amounts:
                                        
 
                                        
Basic
     222       220       220       220       219  
 
                              
 
                                        
Diluted
     227       226       226       226       226  
 
                              

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    Mar. 28,     Mar. 30,     Mar. 28,     Mar. 30,  
    2008     2007     2008     2007  
Cash flows from operating activities
                                
Net income
   $ 280     $ 121     $ 654     $ 352  
Adjustments to reconcile net income to net cash provided by operations:
                                
Depreciation and amortization
     111       55       300       149  
In-process research and development
     —       —       49       —  
Deferred income taxes
     7       2       76       3  
Stock-based compensation
     10       13       27       34  
Loss on short-term investments
     3       —       12       —  
Changes in operating assets and liabilities
     20       (27 )     51       (74 )
 
                        
Net cash provided by operating activities
     431       164       1,169       464  
 
                        
Cash flows from investing activities
                                
Acquisitions, net of cash acquired
     (10 )     —       (925 )     —  
Capital expenditures
     (137 )     (70 )     (469 )     (238 )
Short-term investments, net
     15       (16 )     222       (23 )
 
                        
Net cash used in investing activities
     (132 )     (86 )     (1,172 )     (261 )
 
                        
Cash flows from financing activities
                                
Acquisition-related debt, net
     (260 )     —       250       —  
Issuance of common stock under employee plans
     6       1       38       17  
Repurchase of common stock
     (44 )     (29 )     (60 )     (29 )
Repayment of long-term debt
     (1 )     (22 )     (8 )     (38 )
 
                        
Net cash provided by (used in) financing activities
     (299 )     (50 )     220       (50 )
 
                        
Net increase in cash and cash equivalents
     —       28       217       153  
Cash and cash equivalents, beginning of period
     917       676       700       551  
 
                        
Cash and cash equivalents, end of period
   $ 917     $ 704     $ 917     $ 704