8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 30, 2019

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

Ireland	001-31560	98-0648577
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

38/39 Fitzwilliam Square Dublin 2, Ireland	D02 NX53
(Address of principal executive office)	(Zip Code)

Registrant’s telephone number, including area code: (353) (1) 234-3136

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition.

On April 30, 2019, Seagate Technology plc (the “Company” or “Seagate”) issued a press release reporting its financial results for the fiscal third quarter ended March 29, 2019. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1.

The information in this Item 2.02 and the exhibit hereto are “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section.

Item 7.01 Regulation FD Disclosure.

On April 30, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.63 per share, which will be payable on July 3, 2019 to shareholders of record as of the close of business on June 19, 2019.

Seagate has issued a Supplemental Financial Information document. The Supplemental Financial Information is available on Seagate’s Investors website at www.seagate.com/investors. Seagate management will hold a public webcast today at 6:00 a.m. Pacific Time that can be accessed on its Investor Relations website at www.seagate.com/investors. During today’s webcast, the Company will provide an outlook for its fiscal fourth quarter of 2019 including key underlying assumptions. A replay will be available on Seagate’s Investor Relations website at www.seagate.com/investors shortly following the conclusion of the event. Investors and others should note that the Company routinely uses the Investors section of its corporate website to announce material information to investors and the marketplace. While not all of the information that the Company posts on its corporate website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in the Company to review the information that it shares on www.seagate.com.

The information in this Item 7.01 is “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of such section.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is attached to this Current Report on Form 8-K:

Exhibit    No.	Description
99.1	Press release, dated April 30, 2019, of Seagate Technology plc entitled “Seagate Technology Reports Fiscal Third Quarter 2019 Financial Results.”

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

By:	/s/ Gianluca Romano
Name:	Gianluca Romano
Title:	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

Date: April 30, 2019

EX-99.1

Exhibit 99.1

Investor Relations Contact: Shanye Hudson, (408) 658-1863 shanye.hudson@seagate.com   Media Contact: Andrew Larg, (408) 658-1059 andrew.larg@seagate.com

SEAGATE TECHNOLOGY REPORTS FISCAL THIRD QUARTER 2019 FINANCIAL RESULTS

• Revenue of $2.31 billion

• GAAP diluted earnings per share (EPS) of $0.69; non-GAAP diluted EPS of $0.83

• Cash flow from operations of $438 million and free cash flow of $291 million

• Returned $505 million to shareholders; declared cash dividend of $0.63 per share

CUPERTINO, CA – April 30, 2019 – Seagate Technology plc (NASDAQ: STX) (the “Company” or “Seagate”) today reported financial results for its fiscal third quarter ending March 29, 2019.

“Seagate executed very well in the third quarter while navigating near-term demand head-winds. Our focus on operational efficiency and expense discipline drove better-than-expected EPS and free cash flow generation,” said Dave Mosley, Seagate’s chief executive officer.

“We began shipping the industry’s first 16-terabyte high capacity drives in the fiscal third quarter and expect to ramp high volume production in the second half calendar 2019. The Data Age digital transformation has given rise to many new applications including machine learning, autonomous vehicles, and Smart Cities, which all rely on faster access to an increasing amount of data. These trends are creating significant opportunities for our mass data storage solutions and we are successfully executing our technology roadmap to address growing demand.”

Quarterly Financial Results

	GAAP						Non-GAAP
	FQ3 2019			FQ3 2018			FQ3 2019			FQ3 2018
Revenue ($M)	$	2,313		$	2,803		$	2,313		$	2,803
Gross Margin		26.0	%		30.2	%		26.6	%		30.8	%
Net Income ($M)	$	195		$	381		$	235		$	424
Diluted Earnings Per Share	$	0.69		$	1.31		$	0.83		$	1.46

In the third quarter, the Company generated $438 million in cash flow from operations and $291 million in free cash flow. Year to date, the Company has generated $1.3 billion in cash flow from operations and $862 million in free cash flow. Seagate’s balance sheet is healthy and during the third quarter, the Company paid cash dividends of $178 million and repurchased 7.2 million ordinary shares for $327 million. Cash and cash equivalents totaled $1.4 billion at the end of the quarter. There were 277 million ordinary shares issued and outstanding as of the end of the quarter.

For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.

Seagate has issued a Supplemental Financial Information document, which is available on Seagate’s Investors Relations website at www.seagate.com/investors.

Quarterly Cash Dividend

The Board of Directors of the Company (the “Board”) declared a quarterly cash dividend of $0.63 per share, which will be payable on July 3, 2019 to shareholders of record as of the close of business on June 19, 2019. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.

Business Outlook

Our outlook for the fourth fiscal quarter is based on our current assumptions and expectations; actual results may differ materially, as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release.

The Company is providing the following guidance for its fiscal fourth quarter 2019:

• Revenue of approximately $2.32 billion, plus or minus 5%

• Non-GAAP diluted earnings per share of approximately $0.83, plus or minus 5%

Guidance regarding non-GAAP diluted earnings per share excludes known charges related to amortization of acquired intangible assets of $0.06 per share.

We have not reconciled our non-GAAP diluted earnings per share to the most directly comparable GAAP measure because material items that may impact these measures are out of our control and/or cannot be reasonably predicted including, but not limited to, accelerated depreciation, impairment, and other charges related to cost saving efforts, restructuring charges, strategic investment losses or impairment recognized, income tax adjustments on these measures, and other charges that may arise. The amounts of these measures are not currently available, but may be material to future results. A reconciliation of the non-GAAP diluted earnings per share to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release.

Investor Communications

Seagate management will hold a public webcast today at 6:00 a.m. Pacific Time that can be accessed on its Investor Relations website at www.seagate.com/investors.

An archived audio webcast of this event will be available on Seagate’s Investors Relations website at www.seagate.com/investors shortly following the event conclusion.

About Seagate

To learn more about the Company’s products and services, visit www.seagate.com and follow us on Twitter, Facebook, LinkedIn, Spiceworks, YouTube and subscribe to our blog. The contents of our website and social media channels are not a part of this release.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about the Company’s plans, strategies and prospects, financial outlook for future periods, including the fourth quarter of fiscal 2019, expectations regarding the Company’s products, our ability to ramp production, market demand, shifts in technology, the Company’s ability to meet market and industry expectations and the effects of these future trends and expectations on the Company’s business as well as dividend issuance plans for the fiscal quarter ending June 28, 2019 and beyond. These statements identify prospective information and may include words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “should,” “may,” “will,” or the negative of these words, variations of these words and comparable terminology. These forward-looking statements are based on information available to the Company as of the date of this report and are based on management’s current views and assumptions. These forward-looking statements are conditioned upon and also involve a number of known and unknown risks, uncertainties, and other factors that could cause actual results, performance or events to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the Company’s control and may pose a risk to the Company’s operating and financial condition. Such risks and uncertainties include, but are not limited to: items that may be identified during its financial statement closing process that cause adjustments to the estimates included in this report; the uncertainty in global economic and political conditions; the impact of the variable demand and adverse pricing environment for storage products; the Company’s ability to successfully qualify, manufacture and sell its storage products in increasing volumes on a cost-effective basis and with acceptable quality; the impact of competitive product announcements; the Company’s ability to achieve projected cost savings in connection with restructuring plans and consolidation of manufacturing activities; possible excess industry supply with respect to particular storage products and competing alternative storage technology solutions; the impact of trade barriers, such as import/export duties and restrictions, tariffs and quotas, imposed by the U.S. or other countries in which the Company conducts business; disruptions to its supply chain or production capabilities; unexpected advances in competing technologies or changes in market trends; the development and introduction of products based on new technologies and expansion into new data storage markets; the Company’s ability to effectively manage its debt obligations and comply with certain covenants in its credit facilities with respect to financial ratios and financial condition tests; currency fluctuations that may impact the Company’s margins, international sales and results of operations; cyber-attacks or other data breaches that disrupt the Company’s operations or result in the dissemination of proprietary or confidential information and cause reputational harm; cybersecurity threats and vulnerabilities associated with the Company’s infrastructure updates to its information technology systems; and fluctuations in interest rates. Information concerning risks, uncertainties and other factors that could cause results to differ materially from the expectations described in this press release is contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on August 3, 2018, the “Risk Factors” section of which is incorporated into this press release by reference, and other documents filed with or furnished to the SEC. These forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date and the Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by applicable law.

The inclusion of Seagate’s website address in this press release is intended to be an inactive textual reference only and not an active hyperlink. The information contained in, or that can be accessed through, Seagate’s website and social media channels are not part of this press release.

SEAGATE TECHNOLOGY PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

	March 29, 2019		June 29, 2018 (a)
ASSETS
Current assets:
Cash and cash equivalents	$	1,388	$	1,853
Accounts receivable, net		897		1,184
Inventories		1,001		1,053
Other current assets		201		220
Total current assets		3,487		4,310
Property, equipment and leasehold improvements, net		1,822		1,792
Investment in debt security		1,318		1,275
Goodwill		1,237		1,237
Other intangible assets, net		129		188
Deferred income taxes		416		417
Other assets, net		187		191
Total Assets	$	8,596	$	9,410
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,310	$	1,728
Accrued employee compensation		145		253
Accrued warranty		100		112
Current portion of long-term debt		—		499
Accrued expenses		591		598
Total current liabilities		2,146		3,190
Long-term accrued warranty		112		125
Long-term accrued income taxes		5		10
Other non-current liabilities		122		100
Long-term debt, less current portion		4,522		4,320
Total Liabilities		6,907		7,745
Total Equity		1,689		1,665
Total Liabilities and Equity	$	8,596	$	9,410

(a) The information in this column was derived from the Company’s audited Consolidated Balance Sheet as of June 29, 2018.

SEAGATE TECHNOLOGY PLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018
Revenue	$	2,313		$	2,803		$	8,019		$	8,349
Cost of revenue		1,712			1,956			5,711			5,889
Product development		238			254			750			767
Marketing and administrative		110			135			345			422
Amortization of intangibles		6			6			17			47
Restructuring and other, net		11			11			41			95
Total operating expenses		2,077			2,362			6,864			7,220
Income from operations		236			441			1,155			1,129
Interest income		21			10			67			23
Interest expense		(55	)		(60	)		(169	)		(182	)
Other, net		13			2			28			(18	)
Other expense, net		(21	)		(48	)		(74	)		(177	)
Income before income taxes		215			393			1,081			952
Provision for income taxes		20			12			52			231
Net income	$	195		$	381		$	1,029		$	721
Net income per share:
Basic	$	0.69		$	1.33		$	3.62		$	2.50
Diluted		0.69			1.31			3.57			2.48
Number of shares used in per share calculations:
Basic		281			286			284			288
Diluted		284			291			288			291
Cash dividends declared per ordinary share	$	0.63		$	0.63		$	1.89		$	1.89

SEAGATE TECHNOLOGY PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	For the Nine Months Ended
	March 29, 2019			March 30, 2018
OPERATING ACTIVITIES
Net income	$	1,029		$	721
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		407			461
Share-based compensation		73			85
Deferred income taxes		15			209
Gain on sale of property and equipment		(1	)		—
Other non-cash operating activities, net		(68	)		9
Changes in operating assets and liabilities:
Accounts receivable, net		296			124
Inventories		49			(20	)
Accounts payable		(366	)		74
Accrued employee compensation		(108	)		(49	)
Accrued expenses, income taxes and warranty		(32	)		(24	)
Other assets and liabilities		19			55
Net cash provided by operating activities		1,313			1,645
INVESTING ACTIVITIES
Acquisition of property, equipment and leasehold improvements		(451	)		(270	)
Proceeds from settlement of foreign currency forward exchange contracts		66			—
Proceeds from sale of strategic investments		10			—
Proceeds from sale of properties previously classified as held for sale		27			43
Proceeds from sale of property and equipment		3			2
Purchases of strategic investments		(14	)		(8	)
Other investing activities, net		—			(6	)
Net cash used in investing activities		(359	)		(239	)
FINANCING ACTIVITIES
Redemption and repurchase of debt		(499	)		(209	)
Dividends to shareholders		(539	)		(545	)
Repurchases of ordinary shares		(613	)		(361	)
Taxes paid related to net share settlement of equity awards		(30	)		(22	)
Net proceeds from issuance of long-term debt		196			—
Proceeds from issuance of ordinary shares under employee stock plans		68			110
Net cash used in financing activities		(1,417	)		(1,027	)
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash		(3	)		8
(Decrease) increase in cash, cash equivalents and restricted cash		(466	)		387
Cash, cash equivalents and restricted cash at the beginning of the period		1,857			2,543
Cash, cash equivalents and restricted cash at the end of the period	$	1,391		$	2,930

Use of non-GAAP financial information

The Company uses non-GAAP measures of adjusted revenue, gross margin, operating expenses, net income, diluted earnings per share and free cash flow which are adjusted from results based on GAAP to exclude certain gains, losses and expenditures. These non-GAAP financial measures may be provided to enhance the user’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain gains, losses and expenditures that it believes are not indicative of its core operating results and because it is similar to the approach used in connection with the financial models and estimates published by financial analysts who follow the Company.

These non-GAAP results are some of the measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in its industry.

SEAGATE TECHNOLOGY PLC

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

(In millions, except per share amounts and gross margin)

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018
GAAP Revenue	$	2,313		$	2,803		$	8,019		$	8,349
Adjustment to discontinued products		—			—			1			(6	)
Non-GAAP Revenue	$	2,313		$	2,803		$	8,020		$	8,343
GAAP Gross Margin	$	601		$	847		$	2,308		$	2,460
Adjustment to discontinued products		—			—			1			(6	)
Accelerated depreciation, impairment and other charges related to cost saving efforts		—			1			—			2
Amortization of acquired intangible assets		14			15			40			43
Other charges		—			—			(1	)		11
Non-GAAP Gross Margin	$	615		$	863		$	2,348		$	2,510
GAAP Gross Margin		26.0	%		30.2	%		28.8	%		29.5	%
Non-GAAP Gross Margin		26.6	%		30.8	%		29.3	%		30.1	%
GAAP Operating Expenses	$	365		$	406		$	1,153		$	1,331
Accelerated depreciation, impairment and other charges related to cost saving efforts		—			(4	)		(2	)		(6	)
Amortization of acquired intangible assets		(5	)		(4	)		(14	)		(43	)
Restructuring and other, net		(11	)		(11	)		(41	)		(95	)
Other charges		—			(2	)		—			(4	)
Non-GAAP Operating Expenses	$	349		$	385		$	1,096		$	1,183
GAAP Net Income	$	195		$	381		$	1,029		$	721
Adjustment to discontinued products		—			—			1			(6	)
Accelerated depreciation, impairment and other charges related to cost saving efforts		—			5			2			8
Amortization of acquired intangible assets		19			19			54			86
Restructuring and other, net		11			11			41			95
Losses recognized on the early redemption and repurchase of debt		—			1			—			4
Strategic investment losses or impairment recognized		—			3			2			3
Other charges		—			3			(1	)		15
Income tax adjustments		10			1			8			208
Non-GAAP Net Income	$	235		$	424		$	1,136		$	1,134
Shares used in diluted net income per share calculation		284			291			288			291
GAAP Diluted Net Income Per Share	$	0.69		$	1.31		$	3.57		$	2.48
Non-GAAP Diluted Net Income Per Share	$	0.83		$	1.46		$	3.94		$	3.90
GAAP Net Cash Provided by Operating Activities	$	438		$	558		$	1,313		$	1,645
Acquisition of property, equipment and leasehold improvements		147			69			451			270
Free Cash Flow	$	291		$	489		$	862		$	1,375

The Company’s Non-GAAP measures are adjusted for the following items:

Adjustment to discontinued products

These adjustments relate to sales of certain discontinued products or changes in sales provision for discontinued products. These adjustments are inconsistent in amount and frequency and are excluded in the non-GAAP measures as these adjustments are not indicative of the underlying ongoing operating performance.

Accelerated depreciation, impairment and other charges related to cost saving efforts

These expenses are excluded in the non-GAAP measure due to its inconsistency in amount and frequency and are excluded to facilitate a more meaningful evaluation of the Company’s current operating performance and comparison to its past periods operating performance.

Amortization of acquired intangible assets

The Company records expense from amortization of intangible assets that were acquired in connection with its business combinations over their estimated useful lives. Such charges are inconsistent in size and are significantly impacted by the timing and magnitude of the Company’s acquisitions. Consequently, these expenses are excluded in the non-GAAP measures to facilitate a more meaningful evaluation of its current operating performance and comparison to its past periods operating performance.

Other charges

The other charges primarily include write-off of certain discontinued inventory and expense related to disposed business. These charges are inconsistent in amount and frequency and are excluded in the non-GAAP measures to facilitate a more meaningful evaluation of its current operating performance and comparison to its past periods operating performance.

Restructuring and other, net

Restructuring charges and other, net are costs associated with restructuring plans that are primarily related to costs associated with reduction in the Company’s workforce, exiting certain facilities and other related costs. These also exclude charges or gains from sale of properties classified as held-for-sale. These costs or benefits do not reflect the Company’s ongoing operating performance and consequently are excluded from the non-GAAP measures to facilitate a more meaningful evaluation of its current operating performance and comparison to its past periods operating performance.

Losses Recognized on the early redemption and repurchase of debt

From time to time, the Company incurs losses from the early redemption and repurchase of certain long-term debt instruments. These losses represent the difference between the reacquisition costs and the par value of the debt extinguished and include the write off of any related unamortized debt issuance costs. The amount of these charges may be inconsistent in size and varies depending on the timing of the repurchase of debt.

Strategic investment losses, (gains) or impairment recognized

From time to time, the Company incurs losses or gains from strategic investment accounted under equity method of accounting or records impairments charges which are not considered as part of its ongoing operating performance. The resulting expense or gain is inconsistent in amount and frequency and consequently are excluded from the non-GAAP measures to facilitate a more meaningful evaluation of its current operating performance and comparison to its past periods operating performance.

Income tax adjustments

Provision for income taxes represents the tax effects of non-GAAP adjustments determined using a hybrid with and without method and effective tax rate for the applicable adjustment and jurisdiction. It also includes a provisional tax benefit for the re-measurement of the Company’s U.S. deferred tax assets at the lower 21% tax rate resulting from the U.S. Tax Cuts and Jobs Act enacted on December 22, 2017.

Free cash flow

Free cash flow is a non-GAAP measure defined as net cash provided by operating activities less acquisition of property, equipment and leasehold improvements. This non-GAAP financial measure is used by management to assess the Company’s sources of liquidity, capital structure and operating performance.