EXHIBIT 99.1
| Company contacts: | ||
| Steve Shattuck | Bob Blair | |
| Public Relations | Investor Relations | |
| 949.672.7817 | 949.672.7834 | |
| steve.shattuck@wdc.com | robert.blair@wdc.com |
FOR IMMEDIATE RELEASE:
WD ANNOUNCES Q3 REVENUE OF $1.6 BILLION AND
NET INCOME OF $50 MILLION, OR $0.22 PER SHARE
NET INCOME OF $50 MILLION, OR $0.22 PER SHARE
Continued Profitability and Cash Generation Achieved While Resizing Business in
Challenging Environment
Challenging Environment
LAKE FOREST, Calif. — Apr. 23, 2009 — Western Digital Corp. (NYSE: WDC) today reported revenue of $1.6 billion, on shipments of approximately 31.6 million units and net income of $50 million, or $0.22 per share, for its fiscal third quarter ended Mar. 27, 2009. The company’s results include charges of $14 million for in-process research and development related to the SiliconSystems, Inc. acquisition and $4 million associated with the restructuring plan announced Dec. 17, 2008. Excluding these charges, non-GAAP net income was $68 million or $0.30 per share.1 In the year-ago quarter, the company reported revenue of $2.1 billion, unit shipments of 34.5 million and net income of $280 million, or $1.23 per share.
The company generated $355 million in cash from operations during the March quarter, ending with total cash and cash equivalents of $1.6 billion.
“We are pleased with our financial performance in the March quarter, reflecting continued profitability and cash generation,” said John Coyne, president and chief executive officer of WD. “We managed our market segment participation, product mix and costs to optimize our returns in a challenging environment. We have taken a series of actions to resize and restructure the
| 1 | Non-GAAP net income consists of GAAP net income of $50 million plus $14 million in-process research and development charge and $4 million of restructuring charges. Non-GAAP earnings per share of $0.30 is calculated by using the same 226 million diluted shares as is used for GAAP earnings per share. |
WD Announces Q3 Revenue of $1.6 Billion and
Net Income of $50 Million, or $0.22 Per Share
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Net Income of $50 Million, or $0.22 Per Share
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business to remain profitable and cash flow positive at a $1.5 billion quarterly revenue level and the effects of these actions are already showing up in our results.”
Coyne also noted that WD sustained its investments in technology and new products in the March quarter, with growing shipments of the industry’s first 2 terabyte hard drive and of several new products in its branded products portfolio.
The company also broadened its product and market breadth with the recent acquisition of SiliconSystems, a leading maker of solid-state drives, which now comprises WD’s solid-state storage business unit. “SiliconSystems’ intellectual property and technical expertise will accelerate WD’s solid-state drive development programs, providing greater choice for our customers to satisfy all their storage requirements,” said Coyne. “Integration into WD is well under way and proceeding according to plan.”
The investment community conference call to discuss these results 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: | 800-835-4112 (toll-free) | |
| +1-203-369-3829 (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 produces reliable, high-performance hard drives and solid-state storage that keep users’
WD Announces Q3 Revenue of $1.6 Billion and
Net Income of $50 Million, or $0.22 Per Share
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Net Income of $50 Million, or $0.22 Per Share
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data accessible and secure from loss. WD applies its storage expertise to consumer products for external, portable and network storage applications.
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 forward-looking statements concerning WD’s profitability and cash generation at certain revenue levels, acceleration of WD’s solid-state drive programs by the intellectual property and technical expertise added through the acqusition of SiliconSystems, and integration of SiliconSystems’ business into WD’s business. 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 current negative 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 on January 29, 2009, to which your attention is directed. Readers are cautioned not to place undue reliance on these forward-looking statements, which
WD Announces Q3 Revenue of $1.6 Billion and
Net Income of $50 Million, or $0.22 Per Share
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Net Income of $50 Million, or $0.22 Per Share
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speak only as of the date hereof, and WD undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
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Western Digital, WD, the WD logo and SiliconSystems are registered trademarks of Western Digital Technologies, Inc. or its subsidiaries in the U.S. and other countries.
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
| Mar. 27, | Jun. 27, | |||||||
| 2009 | 2008 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,579 | $ | 1,104 | ||||
| Accounts receivable, net | 824 | 1,010 | ||||||
| Inventories | 385 | 456 | ||||||
| Other | 134 | 161 | ||||||
| Total current assets | 2,922 | 2,731 | ||||||
| Property and equipment, net | 1,570 | 1,668 | ||||||
| Goodwill | 138 | 116 | ||||||
| Other intangible assets, net | 93 | 81 | ||||||
| Other assets | 269 | 279 | ||||||
| Total assets | $ | 4,992 | $ | 4,875 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,001 | $ | 1,181 | ||||
| Accrued expenses | 252 | 266 | ||||||
| Accrued warranty | 93 | 90 | ||||||
| Current portion of long-term debt | 77 | 27 | ||||||
| Total current liabilities | 1,423 | 1,564 | ||||||
| Long-term debt | 425 | 482 | ||||||
| Other liabilities | 152 | 133 | ||||||
| Total liabilities | 2,000 | 2,179 | ||||||
| Shareholders’ equity | 2,992 | 2,696 | ||||||
| Total liabilities and shareholders’ equity | $ | 4,992 | $ | 4,875 | ||||
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Mar. 27, | Mar. 28, | Mar. 27, | Mar. 28, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Revenue, net | $ | 1,592 | $ | 2,111 | $ | 5,524 | $ | 6,081 | ||||||||
| Cost of revenue | 1,339 | 1,634 | 4,557 | 4,767 | ||||||||||||
| Gross margin | 253 | 477 | 967 | 1,314 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 125 | 123 | 377 | 336 | ||||||||||||
| Selling, general and administrative | 49 | 56 | 149 | 164 | ||||||||||||
| Acquired in-process research and development | 14 | — | 14 | 49 | ||||||||||||
| Restructuring | 4 | — | 117 | — | ||||||||||||
| Total operating expenses | 192 | 179 | 657 | 549 | ||||||||||||
| Operating income | 61 | 298 | 310 | 765 | ||||||||||||
| Net interest and other | (3 | ) | (8 | ) | (16 | ) | (21 | ) | ||||||||
| Income before income taxes | 58 | 290 | 294 | 744 | ||||||||||||
| Income tax provision | 8 | 10 | 20 | 90 | ||||||||||||
| Net income | $ | 50 | $ | 280 | $ | 274 | $ | 654 | ||||||||
| Net income per common share: | ||||||||||||||||
| Basic | $ | 0.22 | $ | 1.26 | $ | 1.23 | $ | 2.97 | ||||||||
| Diluted | $ | 0.22 | $ | 1.23 | $ | 1.22 | $ | 2.89 | ||||||||
| Common shares used in computing per share amounts: | ||||||||||||||||
| Basic | 223 | 222 | 222 | 220 | ||||||||||||
| Diluted | 226 | 227 | 225 | 226 | ||||||||||||
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Mar. 27, | Mar. 28, | Mar. 27, | Mar. 28, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Cash flows from operating activities | ||||||||||||||||
| Net income | $ | 50 | $ | 280 | $ | 274 | $ | 654 | ||||||||
| Adjustments to reconcile net income to net cash provided by operations: | ||||||||||||||||
| Depreciation and amortization | 119 | 111 | 358 | 300 | ||||||||||||
| Stock-based compensation | 12 | 10 | 33 | 27 | ||||||||||||
| Deferred income taxes | — | 14 | (7 | ) | 76 | |||||||||||
| Loss on investments | 1 | 4 | 10 | 12 | ||||||||||||
| Non-cash portion of restructuring | 1 | — | 81 | — | ||||||||||||
| In-process research and development | 14 | — | 14 | 49 | ||||||||||||
| Changes in operating assets and liabilities | 158 | 12 | 193 | �� | 51 | |||||||||||
| Net cash provided by operating activities | 355 | 431 | 956 | 1,169 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
| Acquisitions, net of cash acquired | (44 | ) | (10 | ) | (44 | ) | (925 | ) | ||||||||
| Capital expenditures | (106 | ) | (137 | ) | (408 | ) | (469 | ) | ||||||||
| Investments, net | — | 15 | 1 | 222 | ||||||||||||
| Net cash used in investing activities | (150 | ) | (132 | ) | (451 | ) | (1,172 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
| Issuance of common stock under employee plans, net | (1 | ) | 6 | 8 | 38 | |||||||||||
| Tax benefit from employee stock plans | 1 | — | 5 | — | ||||||||||||
| Repurchase of common stock | — | (44 | ) | (36 | ) | (60 | ) | |||||||||
| Acquisition-related debt, net | — | (260 | ) | — | 250 | |||||||||||
| Repayment of long-term debt | (2 | ) | (1 | ) | (7 | ) | (8 | ) | ||||||||
| Net cash provided by (used in) financing activities | (2 | ) | (299 | ) | (30 | ) | 220 | |||||||||
| Net increase in cash and cash equivalents | 203 | — | 475 | 217 | ||||||||||||
| Cash and cash equivalents, beginning of period | 1,376 | 917 | 1,104 | 700 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 1,579 | $ | 917 | $ | 1,579 | $ | 917 | ||||||||