Attached files
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| 8-K - 8-K - Seagate Technology Holdings plc | a10-2184_18k.htm |
Exhibit 99.1
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Media Relations Contact: |
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Brian Ziel (831.439.5429) |
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Press Release |
brian.ziel@seagate.com |
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Investor Relations Contact: |
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Rod Cooper (831.439.2371) |
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rod.j.cooper@seagate.com |
SEAGATE TECHNOLOGY REPORTS FISCAL SECOND QUARTER
2010 FINANCIAL RESULTS
- Quarterly
revenue of $3 billion, net income of $533 million
and record unit shipments of 49.9 million
SCOTTS VALLEY, CA – January 20, 2010 – Seagate Technology (NASDAQ: STX) today reported financial results for the quarter ended January 1, 2010 of 49.9 million disk drive unit shipments, revenue of $3.03 billion, gross margin of 30.5%, net income of $533 million and diluted earnings per share of $1.03. The financial results for the quarter include $10 million of purchased intangibles amortization expense or approximately $0.02 per diluted share.
For the six months ended January 1, 2010 the company reported 96.2 million disk drive unit shipments, revenue of $5.69 billion, gross margin of 27.7%, net income of $712 million and diluted earnings per share of $1.38. The financial results for the six months ended January 1, 2010 include $20 million of purchased intangibles amortization expense, $46 million of restructuring costs and a write down of long-lived assets of $64 million. The aggregate impact of these expense items is $130 million or approximately $0.25 per diluted share.
“Our strong financial performance in the December quarter was the result of our ongoing progress in driving operational efficiencies, our leadership position in high capacity, high performance products, an improved product mix and the overall strength of demand for digital storage,” said Steve Luczo, Seagate CEO.
Additional information relating to the financial results for the fiscal second quarter of 2010 can be found online at seagate.com.
Conference Call
Seagate will hold a conference call to review the second quarter results at 2:00 p.m. Pacific Time today. During today’s conference call, the company will provide an outlook for its third fiscal quarter of 2010, including key underlying assumptions.
The conference call can be accessed online at seagate.com or by phone as follows:
USA: (800) 713-8562
International: (617) 597-5310
Participant Passcode: 79349419
Replay
A replay will be available beginning today at 6:00 p.m. Pacific Time. The replay can be accessed from seagate.com.
About Seagate
Seagate is the world leader in hard disk drives and storage solutions. Learn more at seagate.com.
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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements related to the Company’s future operating and financial performance in the March 2010 quarter, and thereafter, and include statements regarding expected revenue, gross margin, customer demand for disk drives and general market conditions. These forward-looking statements are based on information available to Seagate as of the date of this press release. Current expectations, forecasts and assumptions involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the Company’s control. In particular, the present global economic environment conditions may pose a risk to the Company’s operating and financial performance as consumers and businesses defer purchases in response to financial conditions. Such risks and uncertainties also include the impact of the variable demand, particularly in view of current business and economic conditions; dependence on Seagate’s ability to successfully qualify, manufacture and sell its disk drive products in increasing volumes on a cost-effective basis and with acceptable quality, particularly the new disk drive products with lower cost structures; the impact of competitive product announcements; and the Company’s ability to achieve projected cost savings. Information concerning risks, uncertainties and other factors that could cause results to differ materially from those projected in the forward-looking statements is contained in the Company’s Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission on August 19, 2009 and in the Company’s Quarterly Report on Form 10-Q as filed with the U.S. Securities and Exchange Commission on November 4, 2009, which statements are incorporated into this press release by reference. These forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date and Seagate undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made.
# # #
SEAGATE TECHNOLOGY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
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January 1, |
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July 3, |
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ASSETS |
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Cash and cash equivalents |
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$ |
1,891 |
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$ |
1,427 |
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Short-term investments |
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201 |
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114 |
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Restricted cash and investments |
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118 |
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508 |
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Accounts receivable, net |
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1,333 |
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1,033 |
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Inventories |
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645 |
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587 |
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Deferred income taxes |
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99 |
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97 |
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Other current assets |
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594 |
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528 |
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Total Current Assets |
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4,881 |
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4,294 |
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Property, equipment and leasehold improvements, net |
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1,983 |
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2,229 |
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Deferred income taxes |
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364 |
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372 |
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Other assets, net |
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160 |
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192 |
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Total Assets |
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$ |
7,388 |
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$ |
7,087 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Short-term borrowings |
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$ |
15 |
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$ |
350 |
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Accounts payable |
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1,810 |
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1,573 |
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Accrued employee compensation |
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207 |
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144 |
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Accrued warranty |
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200 |
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213 |
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Accrued expenses |
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467 |
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483 |
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Accrued income taxes |
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13 |
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10 |
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Current portion of long-term debt |
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81 |
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421 |
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Total Current Liabilities |
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2,793 |
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3,194 |
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Long-term accrued warranty |
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201 |
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224 |
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Long-term accrued income taxes |
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63 |
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69 |
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Other non-current liabilities |
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101 |
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120 |
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Long-term debt, less current portion |
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1,895 |
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1,926 |
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Total Liabilities |
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5,053 |
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5,533 |
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Shareholders’ Equity |
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2,335 |
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1,554 |
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Total Liabilities and Shareholders’ Equity |
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$ |
7,388 |
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$ |
7,087 |
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(a) As adjusted due to changes to the accounting for convertible debt instruments implemented in the first quarter of fiscal year 2010.
SEAGATE TECHNOLOGY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
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For the Three Months Ended |
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For the Six Months Ended |
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January 1, |
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January 2, |
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January 1, |
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January 2, |
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Revenue |
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$ |
3,027 |
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$ |
2,270 |
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$ |
5,690 |
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$ |
5,302 |
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Cost of revenue |
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2,104 |
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1,954 |
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4,114 |
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4,460 |
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Product development |
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227 |
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235 |
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434 |
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495 |
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Marketing and administrative |
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110 |
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142 |
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217 |
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290 |
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Amortization of intangibles |
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8 |
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14 |
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16 |
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28 |
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Restructuring and other, net |
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— |
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78 |
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46 |
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101 |
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Impairment of goodwill and other long-lived assets |
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— |
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2,320 |
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64 |
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2,320 |
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Total operating expenses |
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2,449 |
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4,743 |
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4,891 |
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7,694 |
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Income (loss) from operations |
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578 |
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(2,473 |
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799 |
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(2,392 |
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Interest income |
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1 |
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5 |
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2 |
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12 |
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Interest expense |
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(41 |
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(32 |
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(87 |
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(65 |
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Other, net |
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(11 |
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(8 |
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(7 |
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(22 |
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Other income (expense), net |
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(51 |
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(35 |
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(92 |
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(75 |
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Income (loss) before income taxes |
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527 |
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(2,508 |
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707 |
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(2,467 |
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Provision for (benefit from) income taxes |
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(6 |
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316 |
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(5 |
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300 |
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Net income (loss) |
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$ |
533 |
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$ |
(2,824 |
) |
$ |
712 |
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$ |
(2,767 |
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Net income (loss) per share: |
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Basic |
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$ |
1.07 |
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$ |
(5.80 |
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$ |
1.43 |
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$ |
(5.69 |
) |
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Diluted |
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1.03 |
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(5.80 |
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1.38 |
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(5.69 |
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Number of shares used in per share calculations: |
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Basic |
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498 |
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487 |
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496 |
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486 |
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Diluted |
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520 |
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487 |
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518 |
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486 |
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(a) As adjusted due to changes to the accounting for convertible debt instruments implemented in the first quarter of fiscal year 2010.
SEAGATE TECHNOLOGY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
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For the Six Months Ended |
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January 1, |
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January 2, |
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OPERATING ACTIVITIES |
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Net income (loss) |
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$ |
712 |
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$ |
(2,767 |
) |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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396 |
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481 |
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Stock-based compensation |
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25 |
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53 |
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Impairment of goodwill and other long-lived assets |
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64 |
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2,320 |
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Deferred income taxes |
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6 |
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305 |
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Other non-cash operating activities, net |
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22 |
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(8 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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(300 |
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368 |
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Inventories |
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(58 |
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149 |
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Accounts payable |
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229 |
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(282 |
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Accrued employee compensation |
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63 |
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(284 |
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Accrued expenses and warranty |
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(90 |
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(105 |
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Other assets and liabilities |
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(38 |
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162 |
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Net cash provided by (used in) operating activities |
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1,031 |
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392 |
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INVESTING ACTIVITIES |
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Acquisition of property, equipment and leasehold improvements |
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(192 |
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(494 |
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Purchases of short-term investments |
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(190 |
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(116 |
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Maturities and sales of short-term investments |
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101 |
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120 |
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Decrease in restricted cash and investments |
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11 |
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— |
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Proceeds from sale of investment in equity securities |
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— |
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11 |
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Other investing activities, net |
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(3 |
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4 |
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Net cash provided by (used in) investing activities |
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(273 |
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(475 |
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FINANCING ACTIVITIES |
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Proceeds from short-term borrowings |
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15 |
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350 |
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Repayment of short-term borrowings |
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(350 |
) |
— |
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Repayment of long-term debt |
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(380 |
) |
(15 |
) |
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Decrease in restricted cash and investments |
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379 |
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— |
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Proceeds from exercise of employee stock options and employee stock purchase plan |
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42 |
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36 |
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Dividends to shareholders |
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— |
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(117 |
) |
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Net cash provided by (used in) financing activities |
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(294 |
) |
254 |
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Increase (decrease) in cash and cash equivalents |
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464 |
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171 |
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Cash and cash equivalents at the beginning of the period |
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1,427 |
|
990 |
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Cash and cash equivalents at the end of the period |
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$ |
1,891 |
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$ |
1,161 |
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(a) As adjusted due to changes to the accounting for convertible debt instruments implemented in the first quarter of fiscal year 2010.