EX-99.1 2 a56769exv99w1.htm EX-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:
WD ANNOUNCES Q4 REVENUE OF $2.4 BILLION AND
NET INCOME OF $265 MILLION, OR $1.13 PER SHARE
Full-Year Revenue Totals $9.8 Billion, Up 32 Percent,
Net Income of $5.93 Per Share, Up 185 Percent
LAKE FOREST, Calif. — Jul. 21, 2010 — Western Digital Corp. (NYSE: WDC) today reported financial results for its fiscal year 2010 and fourth quarter ended July 2, 2010.
     For the quarter, revenue totaled $2.4 billion, hard drive unit shipments were 49.7 million and net income was $265 million, or $1.13 per share. The quarterly results included $27 million of expense related to litigation settlements. In the year-ago quarter, the company posted revenue of $1.9 billion, shipped 40.0 million hard drives, and reported net income and earnings per share of $196 million and $0.86, respectively. This included $5 million of income from the resolution of restructuring accruals and an $18 million gain on the sale of the company’s substrate manufacturing facility in Sarawak, Malaysia.
     The company generated $363 million in cash from operations during the June quarter, ending with total cash and cash equivalents of $2.7 billion. As previously announced, the company

 

 

WD Announces Q4 Revenue of $2.4 Billion and
Net Income of $265 Million, or $1.13 Per Share
Page 2
completed the acquisition of the magnetic media sputtering operations of Hoya Corporation during the June quarter for $233 million in cash.
     For fiscal year 2010, the company posted revenue of $9.8 billion and net income of $1.4 billion, or $5.93 per share, compared to revenue of $7.5 billion and net income of $470 million, or $2.08 per share, for the prior year. The 2010 net income included the $27 million of expense in the fiscal fourth quarter related to litigation settlements. The 2009 net income included a $14 million in-process research and development charge related to the acquisition of SiliconSystems, Inc., $112 million of restructuring charges with related tax benefits of $4 million, and an $18 million gain on the sale of the company’s substrate manufacturing facility.
     In fiscal year 2010, WD grew revenue 32 percent and increased its operating income by 194 percent year-on-year.
     “Despite softer than anticipated June quarter demand, fiscal year 2010 was another year of significant growth and profitability for Western Digital,” said John Coyne, president and chief executive officer. “The long-term demand for low-cost, high-volume storage driven by the proliferation of data and content-hungry consumer and commercial devices remains strong. With our focus on customer needs, quality, low cost, and high asset efficiency in the highest growth markets, we believe WD is well positioned to continue to generate growth on a sustained and profitable basis.”

 

 

WD Announces Q4 Revenue of $2.4 Billion and
Net Income of $265 Million, or $1.13 Per Share
Page 3
     The investment community conference call to discuss these results will be broadcast live over the Internet today at 2 p.m. Pacific/5 p.m. Eastern. 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:
  866-393-2012 (toll free)
 
  +1-203-369-0457 (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 designs and produces reliable, high-performance hard drives and solid state drives that keep users’ data accessible and secure from loss. Its advanced technologies are configured into applications for client and enterprise computing, embedded systems and consumer electronics, as well as its own consumer storage and media products.
     WD was founded in 1970. The company’s storage products are marketed to leading OEMs, 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 demand for digital storage and WD’s growth and profitability. The foregoing 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:

 

 

WD Announces Q4 Revenue of $2.4 Billion and
Net Income of $265 Million, or $1.13 Per Share
Page 4
the impact of recent uncertainty and volatility in global economic conditions; 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 based on new technologies and expansion into new data storage markets; business conditions and growth in the various hard drive markets; pricing trends and fluctuations in average selling prices; changes in the availability and cost of commodity materials and specialized product components that WD does not make internally; and other risks and uncertainties listed in WD’s recent Form 10-Q filed with the SEC on Apr. 30, 2010, 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. All other trademarks mentioned herein belong to their respective owners.

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
                 
    Jul. 2,     Jul. 3,  
    2010(1)     2009  
ASSETS
Current assets:
                
Cash and cash equivalents
   $ 2,734     $ 1,794  
Accounts receivable, net
     1,256       926  
Inventories
     560       376  
Other
     170       134  
 
            
Total current assets
     4,720       3,230  
Property and equipment, net
     2,159       1,584  
Goodwill
     146       139  
Other intangible assets, net
     88       89  
Other assets
     215       249  
 
            
Total assets
   $ 7,328     $ 5,291  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
                
Accounts payable
   $ 1,507     $ 1,101  
Accrued expenses
     281       247  
Accrued warranty
     129       95  
Current portion of long-term debt
     106       82  
 
            
Total current liabilities
     2,023       1,525  
Long-term debt
     294       400  
Other liabilities
     302       174  
 
            
Total liabilities
     2,619       2,099  
Shareholders’ equity
     4,709       3,192  
 
            
Total liabilities and shareholders’ equity
   $ 7,328     $ 5,291  
 
            
 
(1)   Includes the purchase price allocation of the company’s acquisition of Hoya’s magnetic media sputtering operations based on preliminary estimates of fair value and therefore may be adjusted when finalized.

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
                                 
    Three Months Ended     Years Ended  
    Jul. 2,     Jul. 3,     Jul. 2,     Jul. 3,  
    2010     2009     2010     2009  
Revenue, net
   $ 2,382     $ 1,928     $ 9,850     $ 7,453  
Cost of revenue
     1,847       1,558       7,449       6,116  
 
                        
Gross margin
     535       370       2,401       1,337  
 
                        
Operating expenses:
                                
Research and development
     154       132       611       509  
Selling, general and administrative
     88       52       265       201  
Acquired in-process research and development
     —       —       —       14  
Restructuring and other, net
     —       (23 )     —       94  
 
                        
Total operating expenses
     242       161       876       818  
 
                        
Operating income
     293       209       1,525       519  
Net interest and other
     (1 )     (2 )     (5 )     (18 )
 
                        
Income before income taxes
     292       207       1,520       501  
Income tax provision
     27       11       138       31  
 
                        
Net income
   $ 265     $ 196     $ 1,382     $ 470  
 
                        
 
                                
Income per common share:
                                
 
                                
Basic
   $ 1.15     $ 0.88     $ 6.06     $ 2.12  
 
                        
Diluted
   $ 1.13     $ 0.86     $ 5.93     $ 2.08  
 
                        
 
                                
Common shares used in computing per share amounts:
                                
 
                                
Basic
     230       223       228       222  
 
                        
 
                                
Diluted
     235       227       233       226  
 
                        

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
                                 
    Three Months Ended     Years Ended  
    Jul. 2,     Jul. 3,     Jul. 2,     Jul. 3,  
    2010     2009     2010     2009  
Cash flows from operating activities
                                
Net income
   $ 265     $ 196     $ 1,382     $ 470  
Adjustments to reconcile net income to net cash provided by operations:
                                
Depreciation and amortization
     134       122       510       479  
Stock-based compensation
     17       13       60       47  
Deferred income taxes
     29       31       27       24  
Loss on investments
     —       —       —       10  
Non-cash portion of restructuring and other, net
     —       (18 )     —       63  
Acquired in-process research and development
     —       —       —       14  
Changes in operating assets and liabilities
     (82 )     5       (37 )     198  
 
                        
Net cash provided by operating activities
     363       349       1,942       1,305  
 
                        
Cash flows from investing activities
                                
Purchases of property and equipment
     (185 )     (111 )     (737 )     (519 )
Proceeds from sale of property and equipment
     —       29       —       29  
Acquisitions, net of cash acquired
     (253 )     (19 )     (253 )     (63 )
Sales and maturities of investments
     —       1       4       2  
 
                        
Net cash used in investing activities
     (438 )     (100 )     (986 )     (551 )
 
                        
Cash flows from financing activities
                                
Issuance of stock under employee stock plans, net
     24       14       62       23  
Increase (decrease) in excess tax benefits from employee stock plans
     (16 )     (28 )     4       (24 )
Repurchases of common stock
     —       —       —       (36 )
Repayment of long-term debt
     (25 )     (20 )     (82 )     (27 )
 
                        
Net cash used in financing activities
     (17 )     (34 )     (16 )     (64 )
 
                        
Net change in cash and cash equivalents
     (92 )     215       940       690  
Cash and cash equivalents, beginning of period
     2,826       1,579       1,794       1,104  
 
                        
Cash and cash equivalents, end of period
   $ 2,734     $ 1,794     $ 2,734     $ 1,794