IRVINE, Calif., Jan. 27, 2015 /PRNewswire/ -- Western
Digital® Corp. (NASDAQ: WDC) today reported revenue of
$3.9 billion and net income of
$460 million, or $1.93 per share, for its second fiscal quarter
ended Jan. 2, 2015. On a non-GAAP
basis, net income was $539 million or
$2.26 per share. In the year-ago
quarter, the company reported revenue of $4.0 billion and net income of $430 million, or $1.77 per share. Non-GAAP net income in the
year-ago quarter was $532 million, or
$2.19 per share.
The company generated $243 million
in cash from operations during the December quarter, net of the
Seagate arbitration award payment of $773
million, ending with total cash and cash equivalents of
$4.9 billion. During the December
quarter, the company utilized $309
million to repurchase 3.2 million shares of common stock. On
Nov. 4, the company declared a
$0.40 per common-share dividend,
which was paid on Jan. 15.
"We delivered strong financial results in the December quarter,
with better-than-anticipated revenues, gross margins, and
earnings," said Steve Milligan,
president and chief executive officer. "The diversified nature of
our business and solid execution by our HGST and
WD® subsidiaries are enabling us to consistently
deliver strong financial performance. Also, I am encouraged by the
market's response to our strategic growth initiatives, which we
believe position the company to thrive in the evolving data storage
ecosystem."
The investment community conference call to discuss these
results will be broadcast live over the Internet today at the
revised time of 3PM
Pacific/6PM Eastern. The live and
archived conference call webcast can be accessed online at
investor.wdc.com. The telephone replay number is 1-866-443-4169 in
the U.S. or +1-203-369-1117 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 the company's strategic investments positioning,
execution and financial performance. 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 volatility in global economic
conditions; business conditions and growth in the storage
ecosystem; pricing trends and fluctuations in average selling
prices; the availability and cost of commodity materials and
specialized product components; actions by competitors; unexpected
advances in competing technologies; the development and
introduction of products based on new technologies and expansion
into new data storage markets; 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-Q filed
with the SEC on Nov. 4, 2014, and the
company's registration statement on Form S-3 filed with the SEC on
Nov. 5, 2014, to which your attention
is directed. You should not 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 new information or
events.
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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PRELIMINARY1 CONDENSED
CONSOLIDATED BALANCE SHEETS
|
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(in millions;
unaudited)
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Jan.
2,
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Jun.
27,
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2015
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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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|
$ 4,902
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$ 4,804
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Short-term
investments
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|
241
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|
284
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Accounts receivable,
net
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|
1,880
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1,989
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Inventories
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|
1,282
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1,226
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Other current
assets
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355
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417
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Total current
assets
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8,660
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8,720
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Property, plant and
equipment, net
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3,099
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3,293
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Goodwill
|
|
|
|
2,566
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|
2,559
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Other intangible
assets, net
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|
359
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|
454
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Other non-current
assets
|
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|
455
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473
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Total
assets
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$ 15,139
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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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$ 2,071
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$ 1,971
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Accrued arbitration
award
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―
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|
758
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Accrued
expenses
|
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|
496
|
|
412
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|
Accrued
compensation
|
|
|
451
|
|
460
|
|
Accrued
warranty
|
|
|
|
146
|
|
119
|
|
Current portion of
long-term debt
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125
|
|
125
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|
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Total current
liabilities
|
|
|
3,289
|
|
3,845
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Long-term
debt
|
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|
|
2,250
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|
2,313
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Other
liabilities
|
|
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|
496
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|
499
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Total
liabilities
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6,035
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6,657
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Total shareholders'
equity
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9,104
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8,842
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Total liabilities and
shareholders' equity
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$ 15,139
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$ 15,499
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1On Jan.
15, 2015, the Higher Regional Court of Munich declared that Western
Digital must pay levies on certain hard drives sold in Germany from
January 2008 through December 2010. This decision pertains to third
party claims previously disclosed in Western Digital's periodic
filings, and the Company believes this will not have a material
adverse effect on its business. No accrual for this matter has been
previously recorded and the Company is reviewing the decision to
determine whether or not to record an accrual in its results for
the quarter ended Jan. 2, 2015.
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WESTERN DIGITAL
CORPORATION
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PRELIMINARY1 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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Six Months
Ended
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Jan.
2,
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Dec.
27,
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Jan.
2,
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Dec.
27,
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|
|
|
|
|
|
2015
|
|
2013
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2015
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2013
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Revenue,
net
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$ 3,888
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$ 3,972
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|
$ 7,831
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$ 7,776
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Cost of
revenue
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|
2,756
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|
2,816
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|
5,550
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|
5,521
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|
Gross
profit
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|
|
1,132
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|
1,156
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|
2,281
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|
2,255
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
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|
Research and
development
|
|
|
|
426
|
|
416
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|
863
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|
817
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|
Selling, general and
administrative
|
|
|
164
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|
226
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|
384
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|
358
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|
Charges related to
arbitration award
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|
1
|
|
13
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|
15
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|
26
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|
Employee termination,
asset impairment and other charges
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53
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|
23
|
|
62
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|
34
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|
|
Total operating
expenses
|
|
|
644
|
|
678
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|
1,324
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|
1,235
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Operating
income
|
|
|
|
|
488
|
|
478
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|
957
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|
1,020
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Net interest and
other
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(8)
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|
(11)
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|
(17)
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|
(21)
|
Income before income
taxes
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|
|
480
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|
467
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|
940
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|
999
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Income tax
provision
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|
20
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|
37
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|
57
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|
74
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Net income
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|
$ 460
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|
$ 430
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|
$ 883
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$ 925
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Income per common
share:
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Basic
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$ 1.97
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$ 1.82
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$ 3.79
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$ 3.92
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Diluted
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$ 1.93
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$ 1.77
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$ 3.69
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$ 3.81
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Weighted average
shares outstanding:
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Basic
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|
233
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|
236
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|
233
|
|
236
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Diluted
|
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|
|
|
238
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|
243
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|
239
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|
243
|
WESTERN DIGITAL
CORPORATION
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PRELIMINARY1 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
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|
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|
|
|
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(in millions;
unaudited)
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|
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|
|
|
|
|
|
|
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|
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|
|
|
|
|
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|
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|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
Jan.
2,
|
|
Dec.
27,
|
|
Jan.
2,
|
|
Dec.
27,
|
|
|
|
|
|
|
|
2015
|
|
2013
|
|
2015
|
|
2013
|
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|
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|
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|
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|
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Cash flows from
operating activities
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Net income
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|
|
|
|
$ 460
|
|
$ 430
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|
$ 883
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|
$ 925
|
Adjustments to
reconcile net income to net cash
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|
|
|
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|
provided by
operations:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
290
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|
317
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|
579
|
|
629
|
|
Stock-based
compensation
|
|
|
41
|
|
42
|
|
80
|
|
84
|
|
Deferred income
taxes
|
|
|
21
|
|
(29)
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|
31
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|
(39)
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|
Gain from insurance
recovery
|
|
|
(37)
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|
—
|
|
(37)
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|
(65)
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|
Loss on disposal of
assets
|
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|
8
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|
14
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|
12
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|
29
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|
Non-cash portion of
employee termination, asset impairment and other charges
|
|
18
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|
2
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|
19
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|
9
|
|
Changes in operating
assets and liabilities, net
|
|
(558)
|
|
(49)
|
|
(497)
|
|
(166)
|
|
|
Net cash provided by
operating activities
|
|
243
|
|
727
|
|
1,070
|
|
1,406
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
|
(146)
|
|
(170)
|
|
(306)
|
|
(306)
|
Acquisitions, net of
cash acquired
|
|
|
(6)
|
|
(560)
|
|
(6)
|
|
(823)
|
Purchases of
investments
|
|
|
(475)
|
|
—
|
|
(595)
|
|
—
|
Proceeds from sales
of investments
|
|
|
464
|
|
—
|
|
630
|
|
—
|
Proceeds from sale of
property, plant and equipment
|
|
|
7
|
|
—
|
|
7
|
|
—
|
Other investing
activities, net
|
|
|
28
|
|
(35)
|
|
16
|
|
4
|
|
|
Net cash used in
investing activities
|
|
(128)
|
|
(765)
|
|
(254)
|
|
(1,125)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
Employee stock plans,
net
|
|
|
|
62
|
|
91
|
|
64
|
|
98
|
Repurchases of common
stock
|
|
|
(309)
|
|
(150)
|
|
(532)
|
|
(300)
|
Dividends to
shareholders
|
|
|
|
(94)
|
|
(59)
|
|
(188)
|
|
(118)
|
Proceeds from
debt
|
|
|
|
—
|
|
—
|
|
—
|
|
500
|
Repayment of
debt
|
|
|
|
|
(31)
|
|
(58)
|
|
(62)
|
|
(115)
|
|
|
Net cash provided by
(used in) financing activities
|
|
(372)
|
|
(176)
|
|
(718)
|
|
65
|
Net increase
(decrease) in cash and cash equivalents
|
|
(257)
|
|
(214)
|
|
98
|
|
346
|
Cash and cash
equivalents, beginning of period
|
|
5,159
|
|
4,869
|
|
4,804
|
|
4,309
|
Cash and cash
equivalents, end of period
|
|
|
$ 4,902
|
|
$ 4,655
|
|
$ 4,902
|
|
$ 4,655
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WESTERN DIGITAL
CORPORATION
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|
|
|
|
|
|
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PRELIMINARY1 GAAP TO
NON-GAAP RECONCILIATION
|
|
|
|
|
|
|
|
|
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|
(in millions,
except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
Jan.
2,
|
|
Dec.
27,
|
|
Jan.
2,
|
|
Dec.
27,
|
|
|
|
|
|
2015
|
|
2013
|
|
2015
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
|
|
|
$
460
|
|
$
430
|
|
$
883
|
|
$
925
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
|
|
|
45
|
|
51
|
|
91
|
|
98
|
|
Employee termination,
asset impairment and other charges
|
|
53
|
|
23
|
|
62
|
|
34
|
|
Charges related to
arbitration award
|
|
|
1
|
|
13
|
|
15
|
|
26
|
|
Acquisition-related
expense
|
|
|
|
—
|
|
—
|
|
—
|
|
13
|
|
Flood-related
insurance recovery
|
|
|
(37)
|
|
—
|
|
(37)
|
|
(65)
|
|
Other
|
|
|
|
|
17
|
|
15
|
|
29
|
|
15
|
Non-GAAP net
income
|
|
|
|
$
539
|
|
$
532
|
|
$ 1,043
|
|
$ 1,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per common share:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
$
1.93
|
|
$
1.77
|
|
$
3.69
|
|
$
3.81
|
|
Non-GAAP
|
|
|
|
|
$
2.26
|
|
$
2.19
|
|
$
4.36
|
|
$
4.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
238
|
|
243
|
|
239
|
|
243
|
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. The tax
effect of the aforementioned items was not material to the
condensed consolidated statements of income for the three and six
month periods ended January 2, 2015 and December 27,
2013.
|
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To view the original version on PR Newswire,
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SOURCE Western Digital Corp.