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8-K - FORM 8-K - WESTERN DIGITAL CORPc11127e8vk.htm
EX-99.2 - EXHIBIT 99.2 - WESTERN DIGITAL CORPc11127exv99w2.htm
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 Q2 REVENUE OF $2.475 BILLION AND
NET INCOME OF $225 MILLION, OR $0.96 PER SHARE
IRVINE, Calif. — Jan. 18, 2011 — Western Digital Corp. (NYSE: WDC) today reported revenue of $2.475 billion, hard-drive unit shipments of 52.2 million and net income of $225 million, or $0.96 per share for its second fiscal quarter ended Dec. 31, 2010. In the year-ago quarter, the company reported revenue of $2.619 billion, shipped 49.5 million hard drives, and reported net income and earnings per share of $429 million and $1.85, respectively.
The company generated $505 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $3.1 billion.
“We are pleased to deliver better-than-expected revenues, profitability and gross margin in the December quarter, reflecting solid execution and an improvement in hard drive industry conditions compared with the prior two quarters,” said John Coyne, president and chief executive officer. “The opportunity for profitable growth in our industry remains tremendous and we are committed to improving our financial performance over the longer term. We plan to do so with a continued emphasis on our industry-leading low-cost structure, high quality, highly reliable and highly available products, and a sharp focus on matching production with true customer demand.”

 

 


 

WD Announces Q2 Revenue of $2.475 Billion and
Net Income of $225 Million, or $0.96 Per Share
Page 2
The investment community conference call to discuss these results will be broadcast live over the Internet today at 3 p.m. PST/6 p.m. EST. The call will be accessible live and on an archived basis via the link below. The company is publishing an expanded investor summary sheet today on the investor relations section of its Web site. After the conclusion of today’s webcast conference call, the summary sheet will be updated to reflect the company’s guidance.
         
 
  Audio webcast:   www.westerndigital.com/investor
 
      Click on “Conference Calls”
 
       
 
  Telephone replay:   888-568-0891 (toll free)
 
      +1-402-998-1567 (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.

 

 


 

WD Announces Q2 Revenue of $2.475 Billion and
Net Income of $225 Million, or $0.96 Per Share
Page 3
This press release contains forward-looking statements concerning opportunities for growth in the industry and WD’s financial performance. 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 Oct. 29, 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)
                 
    Dec. 31,     Jul. 2,  
    2010     2010  
 
               
ASSETS
 
               
Current assets:
               
Cash and cash equivalents
  $ 3,110     $ 2,734  
Accounts receivable, net
    1,250       1,256  
Inventories
    568       560  
Other
    192       170  
 
           
Total current assets
    5,120       4,720  
Property and equipment, net
    2,277       2,159  
Goodwill
    151       146  
Other intangible assets, net
    79       88  
Other assets
    216       215  
 
           
Total assets
  $ 7,843     $ 7,328  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
               
Current liabilities:
               
Accounts payable
  $ 1,628     $ 1,507  
Accrued expenses
    262       281  
Accrued warranty
    135       129  
Current portion of long-term debt
    119       106  
 
           
Total current liabilities
    2,144       2,023  
Long-term debt
    231       294  
Other liabilities
    309       302  
 
           
Total liabilities
    2,684       2,619  
Shareholders’ equity
    5,159       4,709  
 
           
Total liabilities and shareholders’ equity
  $ 7,843     $ 7,328  
 
           

 

 


 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
                                 
    Three Months Ended     Six Months Ended  
    Dec. 31,     Jan. 1,     Dec. 31,     Jan. 1,  
    2010     2010     2010     2010  
 
                               
Revenue, net
  $ 2,475     $ 2,619     $ 4,871     $ 4,827  
Cost of revenue
    2,000       1,932       3,959       3,626  
 
                       
Gross margin
    475       687       912       1,201  
 
                       
Operating expenses:
                               
Research and development
    169       154       336       296  
Selling, general and administrative
    66       60       125       113  
 
                       
Total operating expenses
    235       214       461       409  
 
                       
Operating income
    240       473       451       792  
Net interest and other
    (1 )     (2 )     (1 )     (4 )
 
                       
Income before income taxes
    239       471       450       788  
Income tax provision
    14       42       28       71  
 
                       
Net income
  $ 225     $ 429     $ 422     $ 717  
 
                       
 
                               
Income per common share:
                               
Basic
  $ 0.98     $ 1.89     $ 1.83     $ 3.17  
 
                       
Diluted
  $ 0.96     $ 1.85     $ 1.80     $ 3.10  
 
                       
 
                               
Weighted average shares outstanding:
                               
Basic
    230       227       230       226  
 
                       
Diluted
    235       232       235       231  
 
                       

 

 


 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
                                 
    Three Months Ended     Six Months Ended  
    Dec. 31,     Jan. 1,     Dec. 31,     Jan. 1,  
    2010     2010     2010     2010  
 
                               
Cash flows from operating activities
                               
Net income
  $ 225     $ 429     $ 422     $ 717  
Adjustments to reconcile net income to net cash provided by operations:
                               
Depreciation and amortization
    151       126       301       247  
Stock-based compensation
    18       13       37       27  
Deferred income taxes
    1       (5 )     1       (5 )
Changes in operating assets and liabilities
    110       (6 )     134       5  
 
                       
Net cash provided by operating activities
    505       557       895       991  
 
                       
Cash flows from investing activities
                               
Purchases of property and equipment
    (250 )     (199 )     (450 )     (375 )
Sales and maturities of investments
          3             3  
 
                       
Net cash used in investing activities
    (250 )     (196 )     (450 )     (372 )
 
                       
Cash flows from financing activities
                               
Employee stock plans, net
    22       37       31       60  
Repurchases of common stock
                (50 )      
Repayment of long-term debt
    (25 )     (19 )     (50 )     (38 )
 
                       
Net cash provided by (used in) financing activities
    (3 )     18       (69 )     22  
 
                       
Net increase in cash and cash equivalents
    252       379       376       641  
Cash and cash equivalents, beginning of period
    2,858       2,056       2,734       1,794  
 
                       
Cash and cash equivalents, end of period
  $ 3,110     $ 2,435     $ 3,110     $ 2,435