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

August 6, 2007

Date of Report (date of earliest event reported)

KOMAG, INCORPORATED

(Exact name of Registrant as specified in its charter)

Delaware	0-16852	94-2914864
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1710 Automation Parkway
San Jose, California 95131

(Address of principal executive offices)

Registrant’s telephone number, including area code: (408) 576-2000

Not Applicable

(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:

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

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

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

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

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition.

     On August 6, 2007, we issued a press release announcing our financial results for the quarter ended July 1, 2007. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Form 8-K and the attached exhibit shall not be deemed incorporated by reference into any registration statement heretofore or hereafter filed under the Securities Act of 1933, as amended, nor shall it be treated as “filed” for purposes of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is furnished herewith:

Exhibit No.	Description
99.1	Press Release of Komag, Incorporated dated August 6, 2007

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.

	Komag, Incorporated (Registrant)
Dated: August 6, 2007	By:	/s/ Kathleen A. Bayless
	Kathleen A. Bayless
	Executive Vice President, Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of Komag, Incorporated Dated August 6, 2007

EX-99.1

Exhibit 99.1

Investors and Press Contact:
Kathy Bayless
Chief Financial Officer
(408) 576-2000
ir_web@komag.com

Komag Reports Second Quarter 2007 Financial Results

FOR IMMEDIATE RELEASE

SAN JOSE, Calif., August 6, 2007— Komag, Incorporated (Nasdaq: KOMG), a leading independent supplier of thin-film media for disk drives, today announced revenue of $187.2 million and basic loss per share of $0.72 for the second quarter of 2007. Revenue decreased 20% over the prior year’s second quarter. Finished disk shipments decreased 29% in the second quarter of 2007 compared to the prior year period.

The Company’s second quarter of 2007 was significantly impacted by market pressure on unit volumes and average selling prices. The combined effect of low factory utilization, lower average selling prices, higher production costs associated with initial ramp of new products including additional new Perpendicular Magnetic Recording (PMR) media products resulted in significantly reduced gross margin and operating results. The Company’s second quarter of 2007 operating results include expenses of approximately $4.3 million related to the previously announced acquisition of the Company by Western Digital Corporation (WDC).

As previously announced on June 28, 2007, the Company and WDC announced that the two companies had entered into a definitive agreement for WDC to acquire Komag for $32.25 in cash per share. The transaction is structured as a cash tender offer for all the outstanding shares of Komag common stock. The cash tender is currently in process and the acquisition is expected to close in the third calendar quarter of 2007. WDC expects to fund the transaction, including the retirement of Komag’s convertible notes due 2014, through a combination of the companies’ cash and proceeds from a senior secured term loan of up to $1.25 billion.

On April 13, 2007, the Company completed its previously announced redemption of its $80.5 million 2.0% Convertible Subordinated Notes due 2024 (the “2.0% Notes”). Holders of all of the 2.0% Notes elected to convert their notes into shares of the Company’s common stock, in accordance with the terms of the notes, rather than having their notes redeemed and receiving the redemption price. In connection with the conversion of the 2.0% Notes, the Company issued 3,049,234 shares of its common stock.

Second Quarter Review

Sales to Western Digital, Seagate and Hitachi Global Storage Technologies accounted for 40%, 34% and 18% of disk product (media and substrates) revenue in the second quarter of 2007, respectively. Total finished disk shipments were 25.8 million in the second quarter of 2007.

High capacity 3.5-inch advanced disks with storage capacities of 160GB and above represented approximately 55% of our total finished disk shipments in the second quarter of 2007. These disks are primarily targeted for high capacity desktop and multi-platter consumer applications. These rapidly growing consumer applications include personal video recorders (PVRs), digital video recorders (DVRs), high definition television (HDTV), external storage, gaming and other home entertainment devices.

Other revenue, which includes sales of aluminum substrates, nickel-plated polished aluminum substrates and textured substrates, and the sale of $2.3 million worth of precious metals inventory, accounted for 24% of our total revenue in the second quarter.

Other Information

The Company will not be holding a second quarter 2007 conference call. In addition, the Company is not providing a business outlook due to the pending acquisition of the Company.

About Komag

Founded in 1983, Komag is a leading independent supplier of thin-film disks, the primary high-capacity storage medium for digital data. Komag leverages the combination of its world-class U.S. research and development center and Malaysian manufacturing operations to produce disks that meet the high-volume, stringent quality, low cost and demanding technology needs of its customers. By enabling rapidly improving storage density at ever-lower cost per gigabyte, Komag seeks to create extraordinary value for consumers of computers, enterprise storage systems and electronic appliances such as digital video recorders, game boxes and consumer electronic storage systems.

For more information about Komag, visit Komag’s Internet home page at http://www.komag.com. The Investors section of the website provides a variety of financial and investor information, including an investor presentation. To request an investor packet, call Komag’s Investor Relations at 408-576-2901.

Forward-Looking Statements

This press release contains certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These statements represent the Company’s current judgment and include, but are not limited to, the expectation that the acquisition of the Company will close in the third calendar quarter of 2007 and the expectation that the transaction, including the retirement of Komag’s convertible notes due 2014, will be funded through a combination of the Companies’ cash and proceeds from a senior secured term loan of

up to $1.25 billion. The Company’s actual results for future periods could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, costs related to the proposed tender offer and merger, the risk of failing to meet the minimum tender condition or obtain any required stockholder or regulatory approvals or satisfy other conditions to the transaction, the risk that the transaction will not close or that closing will be delayed, the risk that Komag’s business will suffer due to uncertainty related to the transaction and other risks related to its business set forth in its filings with the Securities and Exchange Commission, including the Company’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2007. There can be no assurance that the tender offer or any other transaction will be consummated. The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Komag’s control. Komag cautions investors that any forward-looking statements made by it are not guarantees of future performance or events. Komag disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments, except to the extent required by law.

KOMAG, INCORPORATED
Consolidated Statements Of Operations
(in thousands, except per share data)
(Unaudited)

	Three Months			Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended			Ended
	July 1, 2007			April 1, 2007			July 2, 2006			July 1, 2007			July 2, 2006
Net Sales	$	187,173		$	264,666		$	233,627		$	451,839		$	442,139
Cost of Sales		181,045			205,660			168,659			386,705			318,078
Gross Profit		6,128			59,006			64,968			65,134			124,061
Gross Profit %		3.3	%		22.3	%		27.8	%		14.4	%		28.1	%
Research, Development, and Engineering Expense		15,406			16,499			16,081			31,905			31,156
Selling, General, and Administrative Expense		11,707			8,467			9,125			20,174			17,149
Gain on Disposal of Assets		(166	)		(54	)		(26	)		(220	)		(86	)
Operating Income (Loss)		(20,819	)		34,094			39,788			13,275			75,842
Interest Income		2,300			1,459			1,867			3,759			3,938
Interest Expense		(1,637	)		(511	)		(441	)		(2,148	)		(882	)
Other Income (Expense), Net		3			(5	)		41			(2	)		(435	)
Income (Loss) before Income Taxes		(20,153	)		35,037			41,255			14,884			78,463
Provision for Income Taxes		823			2,060			966			2,883			1,937
Net Income (Loss)	$	(20,976	)	$	32,977		$	40,289		$	12,001		$	76,526
Net Income (Loss) %		(11.2	%)		12.5	%		17.2	%		2.7	%		17.3	%
Basic Net Income (Loss) per Share	$	(0.72	)	$	1.09		$	1.35		$	0.41		$	2.57
Diluted Net Income (Loss) per Share	$	(0.72	)	$	0.99		$	1.21		$	0.42		$	2.31
Basic Shares Outstanding		29,084			30,166			29,883			29,625			29,784
Diluted Shares Outstanding		29,084			33,811			33,544			33,841			33,525

KOMAG, INCORPORATED
Condensed Consolidated Balance Sheets
(in thousands)

	July 1, 2007		December 31, 2006
ASSETS	(Unaudited)		(NOTE 1)
Cash, Cash Equivalents, and Short-Term Investments	$	183,038	$	171,132
Receivables, Net		112,597		140,230
Inventories:
Raw Materials		152,459		78,701
Work In Process		18,292		15,900
Finished Goods		20,916		9,580
Total inventories		191,667		104,181
Prepaid Expenses and Deposits		2,126		2,119
Total Current Assets		489,428		417,662
Property, Plant, and Equipment, Net		533,330		542,585
Other Assets		18,329		17,440
TOTAL ASSETS	$	1,041,087	$	977,687
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade Accounts Payable	$	126,796	$	139,477
Customer Advances		79,045		127,181
Other Liabilities		19,825		25,412
Total Current Liabilities		225,666		292,070
Long-Term Debt		250,000		80,500
Other Long-Term Liabilities		3,810		3,091
Stockholders’ Equity		561,611		602,026
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,041,087	$	977,687

NOTE 1: The Condensed Consolidated Balance Sheet at December 31, 2006 was derived from the audited financial statements.

KOMAG, INCORPORATED
Condensed Consolidated Statements Of Cash Flows
(In thousands)

	Six Months Ended
	July 1, 2007			July 1, 2006
	(Unaudited)			(Unaudited)
Operating Activities
Net income	$	12,001		$	76,526
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property, plant, and equipment		52,263			32,738
Other non-cash items		13,448			11,146
Changes in operating assets and liabilities		(128,151	)		38,840
Net cash provided by (used in) operating activities		(50,439	)		159,250
Investing Activities
Acquisition of property, plant, and equipment		(41,806	)		(177,409	)
Short-term investments, net		(41,650	)		47,050
Other		267			95
Net cash used in investing activities		(83,189	)		(130,264	)
Financing Activities
Proceeds from long-term obligations, net of issuance costs		243,215			—
Repurchase of common stock		(140,417	)		(1,080	)
Proceeds from sale of common stock, net		1,021			3,235
Net cash provided by financing activities		103,819			2,155
Effect of exchange rate changes on cash and cash equivalents		65			1,074
Increase (decrease) in cash and cash equivalents		(29,744	)		32,215
Cash and cash equivalents at beginning of period		129,632			99,984
Cash and cash equivalents at end of period	$	99,888		$	132,199