EX-99.1 2 a29593exv99w1.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 Q3 REVENUE OF $1.4 BILLION AND
NET INCOME OF $.53 PER SHARE
LAKE FOREST, Calif. — Apr. 26, 2007 — Western Digital Corp. (NYSE: WDC) today reported revenue of $1.4 billion on shipments of approximately 24.5 million units, and net income of $121 million, or $.53 per share, for its third fiscal quarter ended Mar. 30, 2007. The third quarter results include a $13 million recovery related to a receivable previously deemed uncollectible.
     The March quarter results represented strong year-over-year performance, including growth in revenue and unit shipments of 25 percent and 30 percent, respectively. In the year-ago quarter, the company reported revenue of $1.1 billion, unit shipments of 18.8 million and net income of $102 million, or $.45 per share.
     Forty-seven percent of Q3 revenue was derived from newer market sources, while 53 percent came from hard drives configured into desktop PCs. This compares with a mix in the year-ago quarter of 29 percent newer markets versus 71 percent desktop PC revenue. The company’s newer market revenue includes hard drives for notebook PCs, consumer electronics, enterprise applications, and WD branded products.

 

 

WD Announces Q3 Revenue of $1.4 Billion and
Net Income of $.53 Per Share
Page 2
     The company shipped 3.7 million 2.5-inch mobile drives and 2.6 million 3.5-inch units for the PVR/DVR market, compared with 1.4 million and 1.7 million, respectively, a year ago. The branded products business was another strong factor in the diversification of the business, accounting for approximately $266 million in revenue. The company also grew unit shipments of its 3.5-inch enterprise-class drives, including the 10,000 RPM WD RaptorÒ and the 7,200 RPM WD RE.
     The company generated $164 million in cash from operations during the March quarter, ending with total cash and short-term investments of $875 million. It also paid off its remaining $19 million in bank debt and repurchased 1.5 million shares of common stock. Since May of 2004, the company has repurchased 11.7 million shares at a total cost of $143 million.
     “The industry saw seasonally softer demand and pricing in the March quarter and we were able to adjust to those challenges and post solid financial results, generate cash and grow in several of our newer markets,” said John Coyne, president and chief executive officer of WD. “We are pleased with our financial performance as it demonstrates our execution to the flexible WD business model and our ability to perform in a wide range of market environments.”
     The investment community conference call to discuss these results and the company’s outlook will be broadcast live over the Internet today at 2 p.m. PDT/5 p.m. EDT. The call will be accessible live and on an archived basis via the link below:
     Audio Webcast: www.westerndigital.com/investor — click on “Conference Calls”
     Telephone Replay: 866-439-3725 (toll-free) or +1-203-369-1044 (international)

 

 

WD Announces Q3 Revenue of $1.4 Billion and
Net Income of $.53 Per Share
Page 3
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 produces reliable, high-performance hard drives that keep users’ data close-at-hand and secure from loss. WD applies its storage expertise to consumer products for external, portable and shared storage products.
     WD was founded in 1970. The company’s storage products are marketed to leading 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.
     This press release contains a forward-looking statement regarding the company’s ability to perform in a wide range of market environments. This forward-looking statement is based on the company’s current expectations and is subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statement, including supply and demand conditions in the hard drive industry; actions by competitors; uncertainties related to the development and introduction of products based on new technologies and successful expansion into new hard drive markets; business conditions and growth in the notebook, consumer electronics, enterprise, branded products and desktop markets; pricing trends and fluctuations in average selling prices (ASPs); changes in the availability and cost of specialized product components; changes in product and customer mix; difficulties in reducing yield losses from complex manufacturing processes and new technologies; and other risks and uncertainties listed in the company’s recent Form 10-Q filed with the SEC on February 7, 2007, to which your attention is directed. Readers are cautioned not to place undue reliance on this forward-looking statement, which speaks only as of the date hereof, and the company undertakes no obligation to update this forward-looking statement to reflect subsequent events or circumstances.
###
Western Digital, WD, the WD logo, and WD Raptor are registered trademarks of Western Digital Technologies, Inc.

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
                 
    Mar. 30,     Jun. 30,  
    2007     2006  
ASSETS
 
                
Current assets:
                
Cash and cash equivalents
  $ 704     $ 551  
Short-term investments
    171       148  
Accounts receivable, net
    715       481  
Inventories
    243       205  
Other
    100       107  
 
            
Total current assets
    1,933       1,492  
Property and equipment, net
     672       549  
Other assets, net
    48       32  
 
            
Total assets
  $ 2,653     $ 2,073  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
                
Current liabilities:
                
Accounts payable
  $ 851     $ 632  
Accrued expenses
    125       131  
Accrued warranty
    74       71  
Current portion of long-term debt
    14       25  
 
            
Total current liabilities
    1,064       859  
Long-term debt
    13       19  
Other liabilities
    40       38  
 
            
Total liabilities
    1,117       916  
Shareholders’ equity
    1,536       1,157  
 
            
Total liabilities and shareholders’ equity
  $ 2,653     $ 2,073  
 
            

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
                                         
    Three Months Ended     Nine Months Ended  
    Mar. 30,     Dec. 29,     Mar. 31,     Mar. 30,     Mar. 31,  
    2007     2006     2006     2007     2006  
Revenue, net
   $ 1,410     $ 1,428     $ 1,129     $ 4,101     $ 3,256  
Cost of revenue
     1,188       1,173       911       3,406       2,631  
 
                              
Gross margin
     222       255       218       695       625  
 
                              
Operating expenses:
                                        
Research and development
     75       77       79       227       226  
Selling, general and administrative
     32       56       39       132       127  
 
                              
Total operating expenses
     107       133       118       359       353  
 
                              
Operating income
     115       122       100       336       272  
Net interest and other income
     7       6       5       20       10  
 
                              
Income before income taxes
     122       128       105       356       282  
Income tax provision
     1       —       3       4       7  
 
                              
Net income
   $ 121     $ 128     $ 102     $ 352     $ 275  
 
                              
 
                                        
Net income per common share:
                                        
 
                                        
Basic
   $ .55     $ .58     $ .47     $ 1.60     $ 1.28  
 
                              
Diluted
   $ .53     $ .57     $ .45     $ 1.56     $ 1.23  
 
                              
 
                                        
Common shares used in computing per share amounts:
 
                                        
Basic
     220       220       217       219       214  
 
                              
Diluted
     226       226       227       226       223  
 
                              

 

 

WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    Mar. 30,     Mar. 31,     Mar. 30,     Mar. 31,  
    2007     20061     2007     20061  
Cash flows from operating activities
                                
Net income
   $ 121     $ 102     $ 352     $ 275  
Adjustments to reconcile net income to net cash provided by operations:
                                
Depreciation and amortization
     55       42       149       116  
Stock-based compensation
     13       9       34       25  
Deferred income taxes
     2       —       3       —  
Other non-cash items
     —       (2 )     —       5  
Changes in operating assets and liabilities
     (27 )     (49 )     (74 )     (154 )
 
                        
Net cash provided by operating activities
     164       102       464       267  
 
                        
Cash flows from investing activities
                                
Capital expenditures
     (70 )     (87 )     (238 )     (198 )
Short-term investments, net
     (16 )     (36 )     (23 )     (18 )
 
                        
Net cash used in investing activities
     (86 )     (123 )     (261 )     (216 )
 
                        
Cash flows from financing activities
                                
Issuance of common stock under employee plans
     1       38       17       68  
Repurchase of common stock
     (29 )     (18 )     (29 )     (44 )
Repayment of long-term debt
     (22 )     (6 )     (38 )     (17 )
 
                        
Net cash (used in) provided by financing activities
     (50 )     14       (50 )     7  
 
                        
Net increase (decrease) in cash and cash equivalents
     28       (7 )     153       58  
Cash and cash equivalents, beginning of period
     676       550       551       485  
 
                        
Cash and cash equivalents, end of period
   $ 704     $ 543     $ 704     $ 543  
 
                        
 
1   Capital expenditures in the current period have been presented on a cash disbursements basis. The comparative amounts for capital expenditures and cash flows from operating activities have been reclassified to conform to the current period presentation.