IRVINE, Calif., July 30, 2014 /PRNewswire/ -- Western
Digital® Corp. (NASDAQ: WDC) today reported financial
results for the fourth quarter and fiscal year ended June 27, 2014. For the fourth quarter, the
company reported revenue of $3.7
billion and net income of $317
million, or $1.32 per share.
On a non-GAAP basis, net income was $445
million or $1.85 per
share.1 In the year-ago quarter, the company reported
revenue of $3.7 billion, a net loss
of $265 million, or $1.12 per share. Non-GAAP net income in the
year-ago quarter was $477 million, or
$1.96 per share.2
The company generated $713 million
in cash from operations during the June quarter, ending with total
cash and cash equivalents of $4.8
billion. During the June quarter, the company utilized
$272 million to repurchase 3.2
million shares of common stock. On May
14, the company declared a $0.40 per common-share dividend, which was paid
on July 15.
For the fiscal year, the company achieved revenue of
$15.1 billion and net income of
$1.6 billion, or $6.68 per share, compared to fiscal year 2013
revenue of $15.4 billion and net
income of $980 million, or
$3.98 per share. On a non-GAAP basis,
fiscal 2014 net income was $2.0
billion, or $8.10 per share,
compared to fiscal 2013 net income of $2.1
billion or $8.53 per
share.3 The company generated $2.8 billion in cash from operations during the
fiscal year and it utilized $1.1
billion for dividends and share repurchases.
"We achieved strong financial results in the June quarter, with
better-than-anticipated revenue, healthy gross margin performance
and continued strong cash flow generation," said Steve Milligan, president and chief executive
officer. "We did so by addressing continued robust demand in gaming
and stronger-than-expected demand in notebook PCs, demonstrating
our flexibility and capability in high-volume businesses. We also
saw strength in our performance enterprise business.
"Longer term, we remain excited about Western Digital's strong
strategic position at the center of the storage ecosystem, which
continues to expand, evolve and transform. The creation of digital
data continues unabated and the strategic value of that content is
increasing. With our deep insight and experience, we will
continue to play a vital role in unlocking the value of data with
innovative and industry-leading storage devices and solutions."
The investment community conference call to discuss these
results will be broadcast live over the Internet today at
2 p.m. Pacific/5 p.m. Eastern. The live and archived conference
call webcast can be accessed online at investor.wdc.com. The
telephone replay number is 1-800-324-4587 in the U.S. or
+1-402-220-3854 for international callers.
About Western Digital
Western Digital Corp. (NASDAQ: WDC), Irvine, Calif., is a global provider of
products and services that empower people to create, manage,
experience and preserve digital content. Its subsidiaries design
and manufacture storage devices, networking equipment and home
entertainment products under the WD®, HGST and
G-Technology brands. Visit the Investor section of the company's
website (www.westerndigital.com) to access a variety of financial
and investor information.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning our position in the storage ecosystem, the growth of
digital data and our role in the creation of additional data. These
forward-looking statements are based on management's current
expectations and are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied 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;
uncertainties concerning the availability and cost of commodity
materials and specialized product components; 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; and other risks and uncertainties listed in the company's
filings with the Securities and Exchange Commission (the "SEC"),
including the company's recent Form 10-Q filed with the SEC on
May 5, 2014, to which your attention
is directed. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speaks only as of the date
hereof, and the company 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 in
the U.S. and other countries. HGST trademarks are intended and
authorized for use only in countries and jurisdictions in which
HGST has obtained the rights to use, market and advertise the
brand. Other marks may be mentioned herein that belong to other
companies.
___________________________
1 Non-GAAP net income for the fourth quarter fiscal
2014 consists of GAAP net income of $317
million plus $47 million of
amortization of intangibles related to the acquisitions of HGST,
sTec, VeloBit and Virident, $13
million of charges related to litigation and
$68 million of employee termination, asset impairment and
other charges. Non-GAAP earnings per share of $1.85 for the fourth quarter is calculated by
using the same 241 million diluted shares as is used for GAAP
earnings per share. The tax effect of the aforementioned items was
not material.
2 Non-GAAP net income for the fourth quarter fiscal
2013 consists of GAAP net loss of $265
million plus $681 million for
charges related to an arbitration award, $46
million for amortization of intangibles related to the
acquisition of HGST and $15 million
for employee termination benefits and other unrelated charges.
Non-GAAP earnings per share of $1.96
for the fourth quarter is calculated using 243 million diluted
shares. The tax effect of the aforementioned items was not
material.
3 Non-GAAP net income for fiscal 2014 consists of
GAAP net income of $1.6 billion plus
$195 million of amortization of
intangibles related to the acquisitions of HGST, sTec, VeloBit and
Virident, $64 million of charges
related to litigation, $133 million
of employee termination, asset impairment and other charges,
$13 million of acquisition charges
and $4 million of expense due to the
write-off of debt issuance costs offset by a $65 million gain on an insurance recovery.
Non-GAAP earnings per share of $8.10
for fiscal 2014 is calculated by using the same 242 million diluted
shares as is used for GAAP earnings per share. Non-GAAP net income
for fiscal 2013 consists of GAAP net income of $980 million plus $681
million for charges related to an arbitration award,
$193 million for amortization of
intangibles related to the acquisition of HGST, $138 million for employee termination benefits
and other charges and a net $106
million for tax-related matters and other unrelated charges.
Non-GAAP earnings per share of $8.53
for fiscal 2013 is calculated by using the same 246 million diluted
shares as is used for GAAP earnings per share. The tax effect of
the aforementioned items was not material.
WESTERN
DIGITAL CORPORATION
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
June
27,
|
|
June
28,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 4,804
|
|
$ 4,309
|
|
Short-term
investments
|
284
|
|
—
|
|
Accounts receivable,
net
|
1,989
|
|
1,793
|
|
Inventories
|
1,226
|
|
1,188
|
|
Other current
assets
|
417
|
|
308
|
|
|
Total current
assets
|
8,720
|
|
7,598
|
Property, plant and
equipment, net
|
3,293
|
|
3,700
|
Goodwill
|
2,559
|
|
1,954
|
Other intangible
assets, net
|
454
|
|
605
|
Other non-current
assets
|
473
|
|
179
|
|
|
Total
assets
|
$ 15,499
|
|
$ 14,036
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$ 1,971
|
|
$ 1,990
|
|
Accrued arbitration
award
|
758
|
|
706
|
|
Accrued
expenses
|
412
|
|
480
|
|
Accrued
compensation
|
460
|
|
453
|
|
Accrued
warranty
|
119
|
|
114
|
|
Current portion of
long-term debt
|
125
|
|
230
|
|
|
Total current
liabilities
|
3,845
|
|
3,973
|
Long-term
debt
|
2,313
|
|
1,725
|
Other
liabilities
|
499
|
|
445
|
|
|
Total
liabilities
|
6,657
|
|
6,143
|
Total shareholders'
equity
|
8,842
|
|
7,893
|
|
|
Total liabilities and
shareholders' equity
|
$ 15,499
|
|
$ 14,036
|
|
|
|
|
|
|
WESTERN DIGITAL
CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except per
share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
|
|
June
27,
|
|
June
28,
|
|
June
27,
|
|
June
28,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
|
$ 3,651
|
|
$ 3,728
|
|
$ 15,130
|
|
$ 15,351
|
Cost of
revenue
|
|
2,622
|
|
2,678
|
|
10,770
|
|
10,988
|
|
Gross
profit
|
|
1,029
|
|
1,050
|
|
4,360
|
|
4,363
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
426
|
|
402
|
|
1,661
|
|
1,572
|
|
Selling, general and
administrative
|
|
202
|
|
180
|
|
761
|
|
706
|
|
Charges related to
arbitration award
|
|
13
|
|
681
|
|
52
|
|
681
|
|
Employee termination,
asset impairment
|
|
|
|
|
|
|
|
|
|
and
other charges
|
|
36
|
|
8
|
|
95
|
|
138
|
|
|
Total operating
expenses
|
|
677
|
|
1,271
|
|
2,569
|
|
3,097
|
Operating income
(loss)
|
|
352
|
|
(221)
|
|
1,791
|
|
1,266
|
|
Net interest and
other
|
|
(5)
|
|
(9)
|
|
(39)
|
|
(44)
|
Income before (loss)
income taxes
|
|
347
|
|
(230)
|
|
1,752
|
|
1,222
|
Income tax
provision
|
|
30
|
|
35
|
|
135
|
|
242
|
Net income
(loss)
|
|
$ 317
|
|
$ (265)
|
|
$ 1,617
|
|
$ 980
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 1.35
|
|
$ (1.12)
|
|
$ 6.88
|
|
$ 4.07
|
|
Diluted
|
|
$ 1.32
|
|
$ (1.12)
|
|
$ 6.68
|
|
$ 3.98
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
234
|
|
236
|
|
235
|
|
241
|
|
Diluted
|
|
241
|
|
236
|
|
242
|
|
246
|
WESTERN DIGITAL
CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
|
|
June
27,
|
|
June
28,
|
|
June
27,
|
|
June
28,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ 317
|
|
$ (265)
|
|
$ 1,617
|
|
$ 980
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
|
provided by
operations:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
308
|
|
302
|
|
1,244
|
|
1,233
|
|
Stock-based
compensation
|
|
31
|
|
30
|
|
156
|
|
137
|
|
Deferred income
taxes
|
|
53
|
|
(24)
|
|
(13)
|
|
35
|
|
Gain from insurance
recovery
|
|
—
|
|
—
|
|
(65)
|
|
—
|
|
Loss on disposal of
assets
|
|
7
|
|
—
|
|
40
|
|
—
|
|
Non-cash portion of
employee termination, asset
|
|
|
|
|
|
|
|
|
|
|
impairment and other
charges
|
|
36
|
|
3
|
|
62
|
|
19
|
|
Other non-cash
operating activities, net
|
|
5
|
|
—
|
|
9
|
|
—
|
|
Changes in operating
assets and liabilities, net
|
|
(44)
|
|
638
|
|
(234)
|
|
715
|
|
|
Net cash provided by
operating activities
|
|
713
|
|
684
|
|
2,816
|
|
3,119
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(161)
|
|
(136)
|
|
(628)
|
|
(952)
|
Acquisitions, net of
cash acquired
|
|
—
|
|
—
|
|
(823)
|
|
(1)
|
Purchases of
investments
|
|
(91)
|
|
—
|
|
(561)
|
|
(17)
|
Proceeds from sales
of investments
|
|
72
|
|
—
|
|
72
|
|
—
|
Other investing
activities, net
|
|
—
|
|
—
|
|
4
|
|
—
|
|
|
Net cash used in
investing activities
|
|
(180)
|
|
(136)
|
|
(1,936)
|
|
(970)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Employee stock plans,
net
|
|
75
|
|
53
|
|
215
|
|
205
|
Repurchases of common
stock
|
|
(272)
|
|
(235)
|
|
(816)
|
|
(842)
|
Dividends to
shareholders
|
|
(70)
|
|
(60)
|
|
(259)
|
|
(181)
|
Proceeds from debt,
net of issuance costs
|
|
—
|
|
—
|
|
2,992
|
|
―
|
Repayment of
debt
|
|
(31)
|
|
(57)
|
|
(2,517)
|
|
(230)
|
|
|
Net cash used in
financing activities
|
|
(298)
|
|
(299)
|
|
(385)
|
|
(1,048)
|
Net increase in cash
and cash equivalents
|
|
235
|
|
249
|
|
495
|
|
1,101
|
Cash and cash
equivalents, beginning of period
|
|
4,569
|
|
4,060
|
|
4,309
|
|
3,208
|
Cash and cash
equivalents, end of period
|
|
$ 4,804
|
|
$ 4,309
|
|
$ 4,804
|
|
$ 4,309
|
SOURCE Western Digital Corp.