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):
July 27, 2005

Maxtor Corporation

(Exact name of registrant as specified in its charter)

Delaware	1-16447	77-0123732
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

500 McCarthy Blvd., Milpitas, California 95035
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(408) 894-5000

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 (17 CFR 230.425)

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

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

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

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.02 Results of Operations and Financial Condition.

     On July 27, 2005, Maxtor Corporation (the “Company”) issued a press release announcing its financial results for the second quarter ended July 2, 2005.

     The press release relating to the financial results for the second quarter ended July 2, 2005 is attached hereto as Exhibit 99.1.

Item 8.01 Other Events.

     On July 27, 2005, the Company announced its financial results for the second quarter ended July 2, 2005. Revenue for the second quarter of 2005 was $925 million and the Company reported net income on a GAAP basis of $9.4 million, or $0.04 per diluted share. In the second quarter of 2004, revenue totaled $818 million and the Company reported net loss on a GAAP basis of $26.5 million, or $(0.11) per share.

     On February 7, 2005, the Company amended the terms of Dr. C. S. Park’s and Mr. Michael J. Wingert’s Employment Offer Letters, dated November 12 and November 17, 2004, respectively. The Company amended the terms of Dr. Park’s and Mr. Wingert’s Employment Offer Letter to reduce their base salary by ten percent (10%) from the earlier agreed upon base salary, with the salary reduction to last from February 6, 2005 until the first pay period following the first quarter in which the Company reports net income calculated pursuant to Generally Accepted Accounting Principles (“GAAP”). The amended Employment Offer Letters provided that upon the Company’s achievement of GAAP net income for a fiscal quarter, both Dr. Park’s and Mr. Wingert’s salary would return to its original level without catch-up or deferred payment by the Company.

     As announced herein, the Company has achieved GAAP net income for the second quarter ended July 2, 2005. In accordance with the previously disclosed agreements, the salaries of Dr. Park and Mr. Wingert were adjusted back to their original levels without any catch-up for past salary, effective as of the first pay period following the end of the second quarter of fiscal 2005.

     For additional information on the terms of Dr. Park’s and Mr. Wingert’s Employment Offer Letters, and amendments thereto, refer to the Company’s Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on November 18 and November 23, 2004, respectively. Dr. Park’s and Mr. Wingert’s amended Employment Offer Letters were filed as Exhibits 99.1 and 99.3 to a Form 8-K filed with the SEC on February 11 and February 25, 2005, respectively, and are hereby incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

Exhibit
No.	Description
Exhibit 99.1	Earnings release, dated July 27, 2005, regarding the second quarter 2005 results of Maxtor Corporation.

Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

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.

Date: July 27, 2005
	MAXTOR CORPORATION
	By:	/s/ Duston M. Williams
	Name:	Duston M. Williams
	Title:	Executive Vice President, Finance and Chief Financial Officer

EXHIBIT INDEX

Exhibit
No.	Description
Exhibit 99.1	Earnings release, dated July 27, 2005, regarding the second quarter 2005 results of Maxtor Corporation.

EX-99.1

Exhibit 99.1

CONTACT:
Media Relations	Investor Relations
Alan Bernheimer	Jenifer Kirtland
408-894-4233	408-324-7056
alan_bernheimer@maxtor.com	jenifer_kirtland@maxtor.com

MAXTOR REPORTS PROFITABLE SECOND QUARTER

Results Driven Primarily by a Strong Enterprise Performance

MILPITAS, CA, July 27, 2005 — Maxtor Corporation (NYSE: MXO) today announced a profitable second quarter ended July 2, 2005. Net income totaled $9.4 million, or $0.04 per diluted share. Revenue for the second quarter of 2005 was $925 million. In the second quarter of 2004, the Company reported a net loss of $26.5 million, or $(0.11) per share. Revenue for the second quarter of 2004 totaled $818 million.

     “We are very pleased with our return to profitability in the second quarter,” said Dr. C.S. Park, chairman and chief executive officer. “Our results were primarily due to a strong enterprise performance. During the second quarter, we shipped 926,000 SCSI drives, a 20% increase over the first quarter volume. Furthermore, we were successful in shipping a richer mix of SCSI products. Our performance also reflected the incremental benefits of our efforts to drive quality improvements and cost and expense reductions on our desktop products.”

     Drive shipments in the quarter totaled 12.1 million. Desktop drives totaled 11.1 million, which included 1,065,000 drives shipped to consumer electronics OEMs. The average selling price in the second quarter increased to $77 compared to $75 in the first quarter. The gross profit margin was 13.2% compared with 10.9% in the first quarter.

     “We continue to focus on our turnaround plan,” Dr. Park continued. “We are working very hard to ensure we deliver our 500 GB drive and other new products scheduled for release in 2005 and early 2006 on time and with the quality our customers expect from Maxtor. The manufacturing transition of a majority of our desktop products

to China remains on track. Finally, we have begun implementation of our plan to produce media in Asia.”

About Maxtor

Maxtor Corporation (www.maxtor.com) is one of the world’s leading suppliers of information storage solutions. The Company has an expansive line of storage products for desktop computers, near-line storage, high-performance Intel-based servers, and consumer electronics. Maxtor has a reputation as a proven market leader built by consistently providing high-quality products and service and support for its customers. Maxtor and its products can be found at www.maxtor.com or by calling toll-free (800) 2-MAXTOR. Maxtor is traded on the NYSE under the MXO symbol.

The Company’s results are subject to risks and uncertainties which could materially affect its results, including, but not limited to, market demand for hard disk drives, qualification of the Company’s products, market acceptance of its products, the Company’s ability to execute future development and production ramps and utilize manufacturing assets efficiently, changes in product and customer mix, the availability of components, pricing trends, actions by competitors, and general economic and industry conditions. These and other risk factors are contained in periodic reports filed with the SEC, including, but not limited to, the Form 10-K/A for fiscal 2004. Maxtor is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Conference Call

Maxtor has scheduled a conference call for analysts and investors today, July 27, 2005, at 2:00 p.m. PT to discuss the second quarter 2005 results. Financial information to be discussed on the call will be available on the Company’s website immediately prior to the commencement of the call. The dial-in number for the live call is (800) 374-1806 or (706) 634-2296. The call will be webcast on the Company’s site at www.maxtor.com. There will be a replay available shortly following the call through August 3, 2005. The dial-in number for the replay is (800) 642-1687 or (706) 645-9291, access code: 7717495.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except share and per share amounts)
(Unaudited)

	Three months ended						Six months ended
	July 2,			June 26,			July 2,			June 26,
	2005			2004			2005			2004
Net revenues	$	924,729		$	818,254		$	1,994,330		$	1,837,942
Cost of revenues		802,936			745,771			1,756,133			1,611,699
Gross profit		121,793			72,483			238,197			226,243
Operating expenses:
Research and development		68,318			79,188			146,869			162,543
Selling, general and administrative		37,216			33,083			74,518			66,042
Amortization of intangible assets		219			5,053			436			25,889
Restructuring charges		710			—			14,564			—
Total operating expenses		106,463			117,324			236,387			254,474
Income (loss) from operations		15,330			(44,841	)		1,810			(28,231	)
Interest expense		(7,673	)		(7,141	)		(16,074	)		(16,073	)
Interest income		2,293			1,082			4,649			2,370
Other gain (loss)		18			24,766			(250	)		24,804
Income (loss) before income taxes		9,968			(26,134	)		(9,865	)		(17,130	)
Provision for income taxes		524			317			852			591
Net income (loss)	$	9,444		$	(26,451	)	$	(10,717	)	$	(17,721	)
Net income (loss) per share
- basic	$	0.04		$	(0.11	)	$	(0.04	)	$	(0.07	)
- diluted	$	0.04		$	(0.11	)	$	(0.04	)	$	(0.07	)
Shares used in per share calculation
-basic		253,310,023			247,367,176			252,431,153			246,981,817
-diluted		255,543,219			247,367,176			252,431,153			246,981,817

MAXTOR CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	July 2,		December 25,
	2005		2004
ASSETS
Current assets:
Cash and cash equivalents	$	335,992	$	378,065
Restricted cash		14,273		24,561
Marketable securities		89,279		103,969
Accounts receivable, net		420,288		466,366
Inventories		264,443		229,410
Prepaid expenses and other		33,561		36,336
Total current assets		1,157,836		1,238,707
Property, plant and equipment, net		337,818		347,934
Goodwill and other intangible assets, net		490,496		490,932
Other assets		11,593		30,168
Total assets	$	1,997,743	$	2,107,741
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, including current portion of long-term debt	$	21,808	$	82,561
Accounts payable		643,105		674,947
Accrued and other liabilities		330,271		324,369
Total current liabilities		995,184		1,081,877
Long-term debt, net of current portion		362,757		382,570
Other liabilities		63,524		66,695
Total liabilities		1,421,465		1,531,142
Total stockholders’ equity		576,278		576,599
Total liabilities and stockholders’ equity	$	1,997,743	$	2,107,741