IRVINE, Calif., Oct. 28, 2014 /PRNewswire/ -- Western
Digital® Corp. (NASDAQ: WDC) today reported revenue of
$3.9 billion and net income of
$423 million, or $1.76 per share, for its first fiscal quarter
ended Oct. 3, 2014. On a non-GAAP
basis, net income was $504 million or
$2.10 per share. In the year-ago
quarter, the company reported revenue of $3.8 billion and net income of $495 million, or $2.05 per share. Non-GAAP net income in the
year-ago quarter was $514 million, or
$2.12 per share.
The company generated $827 million
in cash from operations during the September quarter, ending with
total cash and cash equivalents of $5.2
billion. During the September quarter, the company utilized
$223 million to repurchase 2.2
million shares of common stock. On Aug.
5, the company declared a $0.40 per common-share dividend, which was paid
on Oct. 15.
"We achieved solid revenue, gross margins and EPS in the
September quarter, along with continued strong cash flow
generation, as the company continued its crisp execution and
consistent financial performance," said Steve Milligan, president and chief executive
officer of Western Digital. "We were pleased to see strength and
momentum in our capacity enterprise hard drive and flash platform
solutions businesses. Our client and branded products businesses
were seasonally strong as expected and our performance enterprise
business was steady. Overall, we believe industry dynamics are
stable in terms of supply and demand and inventory levels."
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 1-800-839-2325 in the U.S. or
+1-402-998-1125 for international callers.
About Western Digital
Founded in 1970, Western Digital Corp. (NASDAQ: WDC),
Irvine, Calif., is an
industry-leading developer and manufacturer of storage solutions
that enable people to create, manage, experience and preserve
digital content. Its HGST and WD® subsidiaries are
long-time innovators in the storage industry. Western Digital
Corporation is responding to changing market needs by providing a
full portfolio of compelling, high-quality storage products with
effective technology deployment, high efficiency, flexibility and
speed. Our products are marketed under the HGST, WD and
G-Technology™ brands to OEMs, distributors, resellers, cloud
infrastructure providers and consumers. Financial and investor
information is available on the company's Investor Relations
website at investor.wdc.com.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning industry dynamics. 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 Form
10-K filed with the SEC on Aug. 15,
2014, 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 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.
WESTERN
DIGITAL CORPORATION
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CONDENSED
CONSOLIDATED BALANCE SHEETS
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(in millions;
unaudited)
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Oct.
3,
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Jun.
27,
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2014
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2014
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ASSETS
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Current
assets:
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Cash and cash
equivalents
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$ 5,159
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$ 4,804
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Short-term
investments
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222
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284
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Accounts receivable,
net
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1,915
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1,989
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Inventories
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1,272
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1,226
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Other current
assets
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422
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417
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Total current
assets
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8,990
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8,720
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Property, plant and
equipment, net
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3,202
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3,293
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Goodwill
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2,559
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2,559
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Other intangible
assets, net
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406
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454
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Other non-current
assets
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495
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473
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Total
assets
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$ 15,652
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$ 15,499
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LIABILITIES AND
SHAREHOLDERS' EQUITY
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Current
liabilities:
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Accounts
payable
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$ 2,016
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$ 1,971
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Accrued arbitration
award
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772
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758
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Accrued
expenses
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433
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412
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Accrued
compensation
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438
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460
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Accrued
warranty
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134
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119
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Current portion of
long-term debt
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125
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125
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Total current
liabilities
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3,918
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3,845
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Long-term
debt
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2,281
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2,313
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Other
liabilities
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490
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499
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Total
liabilities
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6,689
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6,657
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Total shareholders'
equity
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8,963
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8,842
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Total liabilities and
shareholders' equity
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$ 15,652
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$ 15,499
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WESTERN DIGITAL
CORPORATION
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
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(in millions, except per
share amounts; unaudited)
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Three Months
Ended
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Oct.
3,
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Sept.
27,
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2014
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2013
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Revenue,
net
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$ 3,943
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$ 3,804
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Cost of
revenue
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2,794
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2,705
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Gross
profit
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1,149
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1,099
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Operating
expenses:
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Research and
development
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437
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401
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Selling, general and
administrative
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220
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132
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Charges related to
arbitration award
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14
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13
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Employee termination,
asset impairment and other charges
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9
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11
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Total operating
expenses
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680
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557
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Operating
income
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469
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542
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Net interest and
other
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(9)
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(10)
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Income before income
taxes
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460
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532
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Income tax
provision
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37
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37
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Net income
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$ 423
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$ 495
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Income per common
share:
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Basic
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$ 1.81
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$ 2.10
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Diluted
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$ 1.76
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$ 2.05
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Weighted average
shares outstanding:
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Basic
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234
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236
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Diluted
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240
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242
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WESTERN DIGITAL
CORPORATION
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CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(in millions;
unaudited)
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Three Months
Ended
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Oct.
3,
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Sept.
27,
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2014
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2013
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Cash flows from
operating activities
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Net income
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$ 423
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$ 495
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Adjustments to
reconcile net income to net cash
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provided by
operations:
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Depreciation and
amortization
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289
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312
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Stock-based
compensation
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39
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42
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Deferred income
taxes
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10
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(10)
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Gain from insurance
recovery
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—
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(65)
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Loss on disposal of
assets
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4
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—
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Non-cash portion of
employee termination, asset
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impairment and other
charges
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1
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7
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Changes in operating
assets and liabilities, net
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61
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(101)
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Net cash provided by
operating activities
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827
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680
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Cash flows from
investing activities
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Purchases of
property, plant and equipment
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(160)
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(136)
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Acquisitions, net of
cash acquired
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—
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(263)
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Purchases of
investments
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(120)
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—
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Proceeds from sales
of investments
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166
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—
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Other investing
activities, net
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(12)
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39
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Net cash used in
investing activities
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(126)
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(360)
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Cash flows from
financing activities
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Employee stock plans,
net
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2
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7
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Repurchases of common
stock
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(223)
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(150)
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Dividends to
shareholders
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(94)
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(59)
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Proceeds from debt,
net of issuance costs
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—
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500
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Repayment of
debt
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(31)
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(58)
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Net cash provided by
(used in) financing activities
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(346)
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240
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Net increase in cash
and cash equivalents
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355
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560
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Cash and cash
equivalents, beginning of period
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4,804
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4,309
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Cash and cash
equivalents, end of period
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$ 5,159
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$ 4,869
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WESTERN DIGITAL
CORPORATION
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GAAP TO NON-GAAP
RECONCILIATION
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(in millions, except per
share amounts; unaudited)
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Three Months
Ended
|
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Oct.
3,
|
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Sept.
27,
|
|
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2014
|
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2013
|
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GAAP net
income
|
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$
423
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$
495
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Non-GAAP
adjustments:
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Amortization of
intangibles
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46
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47
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Employee termination,
asset impairment and other charges
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9
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11
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Charges related to
arbitration award
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14
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13
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Acquisition-related
expense
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―
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13
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Flood-related
insurance recovery
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―
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(65)
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Other expense,
net
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12
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―
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Non-GAAP net
income
|
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$
504
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$
514
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Diluted net income
per common share:
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GAAP
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$
1.76
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$
2.05
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Non-GAAP
|
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$
2.10
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$
2.12
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|
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Weighted average
shares outstanding:
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Diluted
|
|
|
|
|
240
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242
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The table above sets
forth non-GAAP net income and non-GAAP diluted net income per
common share. These non-GAAP net income and diluted net income per
common share measures exclude amortization of intangibles related
to acquisitions, certain employee termination, asset impairment and
other charges, certain charges related to an arbitration award and
other charges that are unusual, non-recurring or may not be
indicative of ongoing operations. The Company believes that
non-GAAP net income and non-GAAP earnings per share are useful
measures to investors as an alternative method for measuring the
Company's earnings performance and comparing it against prior
periods. The presentation of these adjusted amounts vary from
numbers presented in accordance with U.S. GAAP and therefore may
not be comparable to amounts reported by other
companies.
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SOURCE Western Digital Corp.