EX-99.1 2 c20210exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
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 $158 MILLION, OR $0.67 PER SHARE
Full-Year Revenue Totals $9.53 Billion, Net Income of $3.09 Per Share
IRVINE, Calif.—Jul. 21, 2011—Western Digital Corp. (NYSE: WDC) today reported financial results for its fiscal year 2011 and fourth quarter ended Jul. 1, 2011.
For the quarter, revenue totaled $2.4 billion, net income was $158 million, or $0.67 per share, and hard-drive unit shipments were 54 million. The quarterly results included total expenses of $35 million associated with the planned acquisition of Hitachi Global Storage Technologies (Hitachi GST) announced Mar. 7, 2011, and for unrelated litigation accruals. Excluding these expenses, non-GAAP net income was $193 million or $0.81 per share.1
In the year-ago quarter, the company reported revenue of $2.38 billion, net income of $265 million, or $1.13 per share, and shipped 50 million hard drives. The 2010 results included $27 million of expenses related to litigation accruals. Excluding these expenses, the year-ago quarter non-GAAP net income was $292 million, or $1.24 per share.2

 

 

 

WD Announces Q4 Revenue of $2.4 Billion and
Net Income of $158 Million, or $0.67 Per Share
Page 2
The company generated $447 million in cash from operations during the June quarter, ending with total cash and cash equivalents of $3.5 billion.
For fiscal year 2011, the company posted revenue of $9.53 billion and net income of $726 million, or $3.09 per share, compared to fiscal 2010 revenue of $9.85 billion and net income of $1.38 billion, or $5.93 per share. The 2011 net income included total expenses of $44 million associated with the planned acquisition of Hitachi GST and unrelated litigation accruals. Excluding these expenses, fiscal 2011 non-GAAP net income was $770 million or $3.28 per share.1 The 2010 net income included $27 million of expenses related to litigation accruals. Excluding these expenses, fiscal 2010 non-GAAP net income was $1.41 billion, or $6.05 per share.2
“In the June quarter, we were able to meet stronger than anticipated demand, especially from our OEM customers,” said John Coyne, president and chief executive officer. “We believe the stronger demand was driven by increased use of sea freight in advance of the second half of the calendar year as well as supply continuity concerns in the aftermath of the Japan earthquake.
“In a challenging HDD market environment in fiscal 2011, the industry saw unit volume growth of four percent while WD achieved growth of six percent as customers demonstrated a continued preference for the WD value proposition.
“We remain focused on completing our strategic acquisition of Hitachi GST. We are continuing to engage in the approval process with all the appropriate regulatory agencies and thus far we have received clearance from Brazil, Taiwan and Turkey. We continue to work closely with the remaining agencies which are reviewing our transaction. As previously announced, we now expect that the transaction will close in the fourth calendar quarter of 2011, and our integration planning activities continue on schedule.”

 

 

 

WD Announces Q4 Revenue of $2.4 Billion and
Net Income of $158 Million, or $0.67 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 live and archived conference call webcast can be accessed online at www.westerndigital.com/investor, click on “Conference Calls.” The telephone replay dial-in number is 866.501.8774 in the U.S. or +1.203.369.1854 for international callers.
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 home entertainment 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 website (www.westerndigital.com) to access a variety of financial and investor information.

 

 

 

WD Announces Q4 Revenue of $2.4 Billion and
Net Income of $158 Million, or $0.67 Per Share
Page 4
This press release contains forward-looking statements concerning the expected timing of the completion of the planned acquisition of Hitachi GST. 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: the impact of continued 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 May 2, 2011, 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.
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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.
1   Non-GAAP net income for the fourth quarter of fiscal 2011 consists of GAAP net income of $158 million plus $35 million of acquisition-related expenses and unrelated litigation accruals. Non-GAAP net income for fiscal year 2011 consists of GAAP net income of $726 million plus $44 million of acquisition-related expenses and unrelated litigation accruals. Non-GAAP earnings per share of $0.81 and $3.28 for the fourth quarter and fiscal year 2011, respectively, is calculated by using the same 237 and 235 million diluted shares as is used for GAAP earnings per share. The tax effect of the acquisition-related expenses and unrelated litigation accruals was not material.
 
2   Non-GAAP net income for the fourth quarter of fiscal 2010 consists of GAAP net income of $265 million plus $27 million of litigation accruals. Non-GAAP net income for fiscal year 2010 consists of GAAP net income of $1.38 billion plus $27 million of litigation accruals. Non-GAAP earnings per share of $1.24 and $6.05 for the fourth quarter and fiscal year 2010, respectively, is calculated by using the same 235 and 233 million diluted shares as is used for GAAP earnings per share. The tax effect of the litigation accruals was not material.

 

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
                 
    Jul. 1,     Jul. 2,  
    2011     2010  
ASSETS
 
                
Current assets:
                
Cash and cash equivalents
   $ 3,490     $ 2,734  
Accounts receivable, net
     1,206       1,256  
Inventories
     577       560  
Other
     214       170  
 
            
Total current assets
     5,487       4,720  
Property, plant and equipment, net
     2,224       2,159  
Goodwill
     151       146  
Other intangible assets, net
     71       88  
Other assets
     185       215  
 
            
Total assets
   $ 8,118     $ 7,328  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
                
Current liabilities:
                
Accounts payable
   $ 1,545     $ 1,507  
Accrued expenses
     349       281  
Accrued warranty
     132       129  
Current portion of long-term debt
     144       106  
 
            
Total current liabilities
     2,170       2,023  
Long-term debt
     150       294  
Other liabilities
     310       302  
 
            
Total liabilities
     2,630       2,619  
Shareholders’ equity
     5,488       4,709  
 
            
Total liabilities and shareholders’ equity
   $ 8,118     $ 7,328  
 
            

 

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
                                 
    Three Months Ended     Years Ended  
    Jul. 1,     Jul. 2,     Jul. 1,     Jul. 2,  
    2011     2010     2011     2010  
Revenue, net
   $ 2,403     $ 2,382     $ 9,526     $ 9,850  
Cost of revenue
     1,934       1,847       7,735       7,449  
 
                        
Gross margin
     469       535       1,791       2,401  
 
                        
Operating expenses:
                                
Research and development
     188       154       703       611  
Selling, general and administrative
     109       88       307       265  
 
                        
Total operating expenses
     297       242       1,010       876  
 
                        
Operating income
     172       293       781       1,525  
Net interest and other
     (2 )     (1 )     (1 )     (5 )
 
                        
Income before income taxes
     170       292       780       1,520  
Income tax provision
     12       27       54       138  
 
                        
Net income
   $ 158     $ 265     $ 726     $ 1,382  
 
                        
 
                                
Income per common share:
                                
Basic
   $ 0.68     $ 1.15     $ 3.14     $ 6.06  
 
                        
Diluted
   $ 0.67     $ 1.13     $ 3.09     $ 5.93  
 
                        
 
                                
Weighted average shares outstanding:
                                
Basic
     233       230       231       228  
 
                        
Diluted
     237       235       235       233  
 
                        

 

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
                                 
    Three Months Ended     Years Ended  
    Jul. 1,     Jul. 2,     Jul. 1,     Jul. 2,  
    2011     2010     2011     2010  
Cash flows from operating activities
                                
Net income
   $ 158     $ 265     $ 726     $ 1,382  
Adjustments to reconcile net income to net cash provided by operations:
                                
Depreciation and amortization
     150       134       602       510  
Stock-based compensation
     15       17       69       60  
Deferred income taxes
     16       29       20       27  
Changes in operating assets and liabilities
     108       (82 )     238       (37 )
 
                        
Net cash provided by operating activities
     447       363       1,655       1,942  
 
                        
Cash flows from investing activities
                                
Purchases of property, plant and equipment
     (153 )     (185 )     (778 )     (737 )
Acquisitions
     (15 )     (253 )     (15 )     (253 )
Sales and maturities of investments
     —       —       —       4  
 
                        
Net cash used in investing activities
     (168 )     (438 )     (793 )     (986 )
 
                        
Cash flows from financing activities
                                
Employee stock plans, net
     12       8       50       66  
Repurchases of common stock
     —       —       (50 )     —  
Repayment of long-term debt
     (31 )     (25 )     (106 )     (82 )
 
                        
Net cash used in financing activities
     (19 )     (17 )     (106 )     (16 )
 
                        
Net increase in cash and cash equivalents
     260       (92 )     756       940  
Cash and cash equivalents, beginning of period
     3,230       2,826       2,734       1,794  
 
                        
Cash and cash equivalents, end of period
   $ 3,490     $ 2,734     $ 3,490     $ 2,734