News Summary
- Second quarter revenue was $3.03 billion, up 10% sequentially
(QoQ). Cloud revenue increased 23% (QoQ), Client revenue decreased
2% (QoQ) and Consumer revenue increased 15% (QoQ).
- Second quarter GAAP earnings per share (EPS) was $(0.87) and
Non-GAAP EPS was $(0.69), which includes $156 million of
underutilization-related charges in Flash and HDD.
- Expect fiscal third quarter 2024 revenue to be in the range of
$3.20 billion to $3.40 billion.
- Expect Non-GAAP EPS in the range of $(0.10) to $0.20, which
includes $30 to $40 million of underutilization-related charges in
HDD.
Western Digital Corp. (Nasdaq: WDC) today reported fiscal second
quarter 2024 financial results.
“Western Digital’s second quarter results demonstrate that the
structural changes we have put in place over the last few years and
the strategy we have been executing are producing significant
outperformance across our flash and HDD businesses,” said David
Goeckeler, Western Digital CEO. “We are seeing our efforts come to
fruition as our financial performance met, or exceeded, the
non-GAAP guidance ranges we provided in October, and I am confident
that our strategy of managing inventory proactively, offering a
broad range of products, closely controlling our product cost
through focused R&D and manufacturing, and bolstering the
agility of our business will allow us to improve through-cycle
profitability and dampen business cycles into the future.”
Q2 2024 Financial Highlights
GAAP
Non-GAAP
Q2 2024
Q1 2024
Q/Q
Q2 2024
Q1 2024
Q/Q
Revenue ($M)
$3,032
$2,750
up 10%
$3,032
$2,750
up 10%
Gross Margin
16.2%
3.6%
up 12.6 ppt
15.5%
4.1%
up 11.4 ppt
Operating Expenses ($M)
$702
$695
up 1%
$561
$555
up 1%
Operating Loss ($M)
$(210)
$(596)
*
$(91)
$(443)
*
Net Loss ($M)
$(268)
$(685)
*
$(210)
$(554)
*
Loss Per Share
$(0.87)
$(2.17)
*
$(0.69)
$(1.76)
*
* not a meaningful figure
GAAP
Non-GAAP
Q2 2024
Q2 2023
Y/Y
Q2 2024
Q2 2023
Y/Y
Revenue ($M)
$3,032
$3,107
down 2%
$3,032
$3,107
down 2%
Gross Margin
16.2%
17.0%
down 0.8 ppt
15.5%
17.4%
down 1.9 ppt
Operating Expenses ($M)
$702
$849
down 17%
$561
$659
down 15%
Operating Loss ($M)
$(210)
$(321)
*
$(91)
$(119)
*
Net Loss ($M)
$(268)
$(446)
*
$(210)
($135)
*
Loss Per Share
$(0.87)
$(1.40)
*
$(0.69)
$(0.42)
*
* not a meaningful figure
The company had an operating cash outflow of $92 million and
ended the quarter with $2.48 billion of total cash and cash
equivalents.
Additional details can be found within the company’s earnings
presentation, which is accessible online at investor.wdc.com.
End Market Summary
Revenue ($M)
Q2 2024
Q1 2024
Q/Q
Q2 2023
Y/Y
Cloud
$1,071
$872
up 23%
$1,224
down 13%
Client
1,122
1,147
down 2%
1,089
up 3%
Consumer
839
731
up 15%
794
up 6%
Total Revenue
$3,032
$2,750
up 10%
$3,107
down 2%
In the fiscal second quarter:
- Cloud represented 35% of total revenue. Sequentially, the
growth was attributed to higher nearline shipments to data center
customers and better nearline pricing. The year-over-year decrease
was due to lower eSSD bit shipments.
- Client represented 37% of total revenue. Sequentially, an
increase in flash ASPs was more than offset by a decline in flash
bit shipments. The year-over-year increase was due to higher flash
shipments, primarily driven by client SSD shipments into PC
applications, more than offsetting a decline in flash ASPs.
- Consumer represented 28% of total revenue. Sequentially, the
growth was primarily due to seasonal strength in flash bit
shipments. On a year-over-year basis, the increase in flash bit
shipments was partially offset by a decline in flash ASPs as well
as lower HDD shipments.
Business Outlook for Fiscal Third Quarter of 2024
Three Months Ending
March 29, 2024
GAAP(1)
Non-GAAP(1)
Revenue ($B)
$3.20 - $3.40
$3.20 - $3.40
Gross margin
21.5% - 23.5%
22.0% - 24.0%
Operating expenses ($M)
$710 - $730
$600 - $620
Interest and other expense, net ($M)
~$95
~$95
Income tax expense ($M)(2)
N/A
$20 - $30
Preferred dividend ($M)
$15
$15
Diluted earnings per share
N/A
$(0.10) - $0.20
Diluted shares outstanding (in
millions)
~330
~330
__________
(1) Non-GAAP gross margin guidance excludes amortization of
acquired intangible assets and stock-based compensation expense of
approximately $10 million to $15 million. The company’s Non-GAAP
operating expenses guidance excludes stock-based compensation
expense, and expenses related to business separation costs,
totaling approximately $105 million to $115 million. In the
aggregate, Non-GAAP diluted earnings per share guidance excludes
these items totaling approximately $115 million to $130 million.
The timing and amount of additional charges the company excludes
from its Non-GAAP income tax expense and Non-GAAP diluted earnings
per share are dependent on the timing and determination of certain
actions and cannot be reasonably predicted. The timing and amount
of these charges excluded from Non-GAAP gross margin, Non-GAAP
operating expenses, and Non-GAAP diluted earnings per share cannot
be further allocated or quantified with certainty. Accordingly,
full reconciliations of Non-GAAP gross margin, Non-GAAP operating
expenses, Non-GAAP income tax expense and Non-GAAP diluted earnings
per share to the most directly comparable GAAP financial measures
(GAAP gross profit, GAAP operating expenses, income tax expense and
diluted earnings per share, respectively) are not available without
unreasonable effort.
(2) Non-GAAP income tax expense is determined based on a
percentage of Non-GAAP pre-tax income or loss. Our estimated
Non-GAAP tax dollars may differ from our GAAP tax dollars (i) due
to differences in the tax treatment of items excluded from our
Non-GAAP net income or loss; (ii) the fact that our GAAP income tax
expense or benefit recorded in any interim period is based on an
estimated forecasted GAAP tax rate for the full year, excluding
loss jurisdictions; and (iii) because our GAAP taxes recorded in
any interim period are dependent on the timing and determination of
certain GAAP operating expenses.
Investor Communications
The investment community conference call to discuss these
results and the company’s business outlook for the fiscal third
quarter of 2024 will be broadcast live online today at 1:30 p.m.
Pacific/4:30 p.m. Eastern. The live and archived conference
call/webcast and the earnings presentation can be accessed online
at investor.wdc.com.
About Western Digital
Western Digital is on a mission to unlock the potential of data
by harnessing the possibility to use it. With Flash and HDD
franchises, underpinned by advancements in storage technologies, we
create breakthrough innovations and powerful data storage solutions
that enable the world to actualize its aspirations. Core to our
values, we recognize the urgency to combat climate change and have
committed to ambitious carbon reduction goals approved by the
Science Based Targets initiative. Learn more about Western Digital
and the Western Digital®, SanDisk® and WD® brands at
www.westerndigital.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal securities laws, including statements
regarding expectations for the company’s business outlook and
financial performance for the fiscal third quarter of 2024 and
beyond; the impact of structural changes in the company’s business
and corporate strategy on operating and financial performance; and
the impact of the company’s inventory management, range of
products, cost controls and business agility on cyclicality and
through-cycle profitability. 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. The preliminary financial results for the company’s
fiscal second quarter ended December 29, 2023 included in this
press release represent the most current information available to
management. Actual results when disclosed in the company's Form
10-Q may differ from these preliminary results as a result of the
completion of the company’s financial closing procedures, final
adjustments, completion of the review by the company’s independent
registered accounting firm; and other developments that may arise
between now and the filing of the company's Form 10-Q. Other key
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in the forward-looking
statements include: volatility in global economic conditions;
future responses to and effects of global health crises; the impact
of business and market conditions; the outcome and impact of the
company's planned separation of its HDD and Flash business units,
including with respect to customer and supplier relationships,
contractual restrictions, stock price volatility and the diversion
of management’s attention from ongoing business operations and
opportunities; the impact of competitive products and pricing; the
company's development and introduction of products based on new
technologies and expansion into new data storage markets; risks
associated with cost saving initiatives, restructurings,
acquisitions, divestitures, mergers, joint ventures and the
company's strategic relationships; difficulties or delays in
manufacturing or other supply chain disruptions; hiring and
retention of key employees; the company's level of debt and other
financial obligations; changes to the company's relationships with
key customers; compromise, damage or interruption from
cybersecurity incidents or other data system security risks;
actions by competitors; the company's ability to achieve its GHG
emissions reduction and other ESG goals; risks associated with
compliance with changing legal and regulatory requirements and the
outcome of legal proceedings; and other risks and uncertainties
listed in the company’s filings with the Securities and Exchange
Commission (the “SEC”), including the company’s Annual Report on
Form 10-K filed with the SEC on August 22, 2023 and Quarterly
Report on Form 10-Q filed with the SEC on November 7, 2023 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 or
revise these forward-looking statements to reflect new information
or events, except as required by law.
Western Digital, the Western Digital logo, SanDisk and WD are
registered trademarks or trademarks of Western Digital Corporation
or its affiliates in the US and/or other countries.
WESTERN DIGITAL
CORPORATION
PRELIMINARY CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions; unaudited; on a
US GAAP basis)
December 29,
2023
June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
2,481
$
2,023
Accounts receivable, net
1,523
1,598
Inventories
3,216
3,698
Other current assets
618
567
Total current assets
7,838
7,886
Property, plant and equipment, net
3,315
3,620
Notes receivable and investments in Flash
Ventures
1,248
1,297
Goodwill
10,037
10,037
Other intangible assets, net
79
80
Other non-current assets
1,768
1,509
Total assets
$
24,285
$
24,429
LIABILITIES, CONVERTIBLE
PREFERRED STOCK AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
1,504
$
1,293
Accounts payable to related parties
251
292
Accrued expenses
1,037
1,288
Income taxes payable
506
999
Accrued compensation
353
349
Current portion of long-term debt
1,042
1,213
Total current liabilities
4,693
5,434
Long-term debt
7,351
5,857
Other liabilities
1,397
1,415
Total liabilities
13,441
12,706
Convertible preferred stock, aggregate
liquidation preference of $953 and $924, respectively
876
876
Total shareholders’ equity
9,968
10,847
Total liabilities, convertible preferred
stock and shareholders’ equity
$
24,285
$
24,429
WESTERN DIGITAL
CORPORATION
PRELIMINARY CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share
amounts; unaudited; on a US GAAP basis)
Three Months Ended
Six Months Ended
December 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
Revenue, net
$
3,032
$
3,107
$
5,782
$
6,843
Cost of revenue
2,540
2,579
5,191
5,334
Gross profit
492
528
591
1,509
Operating expenses:
Research and development
444
523
875
1,075
Selling, general and administrative
198
250
405
497
Employee termination, asset impairment,
and other
24
76
81
100
Business separation costs
36
—
36
—
Total operating expenses
702
849
1,397
1,672
Operating loss
(210
)
(321
)
(806
)
(163
)
Interest and other expense:
(30
)
(64
)
(116
)
(138
)
Loss before taxes
(240
)
(385
)
(922
)
(301
)
Income tax expense
28
61
31
118
Net loss
(268
)
(446
)
(953
)
(419
)
Less: cumulative dividends allocated to
preferred shareholders
14
—
29
—
Net loss attributable to common
shareholders
$
(282
)
$
(446
)
$
(982
)
$
(419
)
Net loss per common share:
Basic
$
(0.87
)
$
(1.40
)
$
(3.03
)
$
(1.32
)
Diluted
$
(0.87
)
$
(1.40
)
$
(3.03
)
$
(1.32
)
Weighted average shares outstanding:
Basic
325
318
324
317
Diluted
325
318
324
317
WESTERN DIGITAL
CORPORATION
PRELIMINARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited; on a
US GAAP basis)
Three Months Ended
Six Months Ended
December 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
Operating Activities
Net loss
$
(268
)
$
(446
)
(953
)
$
(419
)
Adjustments to reconcile net loss to net
cash provided by (used in) operations:
Depreciation and amortization
143
214
290
430
Stock-based compensation
72
86
149
172
Deferred income taxes
(22
)
67
(68
)
25
Loss (Gain) on disposal of assets
—
—
(87
)
1
Non-cash portion of asset impairment
—
15
95
15
Gain on repurchase of debt
(4
)
—
(4
)
—
Amortization of debt issuance costs and
discounts
5
2
9
5
Other non-cash operating activities,
net
(48
)
25
(47
)
69
Changes in:
Accounts receivable, net
(72
)
517
75
899
Inventories
281
89
482
(135
)
Accounts payable
274
(396
)
299
(521
)
Accounts payable to related parties
(26
)
74
(41
)
49
Accrued expenses
(309
)
(182
)
(246
)
(226
)
Income taxes payable
(169
)
39
(494
)
156
Accrued compensation
3
(58
)
4
(162
)
Other assets and liabilities, net
48
(11
)
(181
)
(317
)
Net cash provided by (used in) operating
activities
(92
)
35
(718
)
41
Investing Activities
Purchases of property, plant and
equipment, net
(150
)
(258
)
(81
)
(578
)
Activity related to Flash Ventures,
net
66
(17
)
79
82
Strategic investments and other, net
24
17
26
14
Net cash provided by (used in) investing
activities
(60
)
(258
)
24
(482
)
Financing Activities
Employee stock plans, net
33
43
(10
)
(7
)
Net proceeds from convertible preferred
stock
(2
)
—
(5
)
—
Purchase of capped calls
(155
)
—
(155
)
—
Repurchases of debt
(505
)
—
(505
)
—
Proceeds from debt, net of repayments
1,262
—
1,862
—
Debt issuance costs
(36
)
(5
)
(36
)
(5
)
Net cash provided by (used in) financing
activities
597
38
1,151
(12
)
Effect of exchange rate changes on
cash
4
7
1
(3
)
Net increase (decrease) in cash and cash
equivalents
449
(178
)
458
(456
)
Cash and cash equivalents, beginning of
period
2,032
2,049
2,023
2,327
Cash and cash equivalents, end of
period
$
2,481
$
1,871
$
2,481
$
1,871
WESTERN DIGITAL
CORPORATION
SUPPLEMENTAL OPERATING SEGMENT
RESULTS
(in millions; except
percentages; unaudited)
Three Months Ended
Six Months Ended
December 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
Net revenue:
Flash
$
1,665
$
1,657
$
3,221
$
3,379
HDD
1,367
1,450
2,561
3,464
Total net revenue
$
3,032
$
3,107
$
5,782
$
6,843
Gross profit:
Flash
$
131
$
240
$
(30
)
$
662
HDD
339
300
612
874
Total gross profit for segments
470
540
582
1,536
Unallocated corporate items:
Stock-based compensation expense
(13
)
(12
)
(26
)
(26
)
Amortization of acquired intangible
assets
(1
)
—
(1
)
(1
)
Recovery from contamination incident
36
—
36
—
Total unallocated corporate items
22
(12
)
9
(27
)
Consolidated gross profit
$
492
$
528
$
591
$
1,509
Gross margin:
Flash
7.9
%
14.5
%
(0.9
)%
19.6
%
HDD
24.8
%
20.7
%
23.9
%
25.2
%
Total gross margin for segments
15.5
%
17.4
%
10.1
%
22.4
%
Consolidated gross margin
16.2
%
17.0
%
10.2
%
22.1
%
The Company manages and reports under two reportable segments:
flash-based products (“Flash”) and hard disk drives (“HDD”). In the
table above, total gross profit for segments and total gross margin
for segments are Non-GAAP financial measures, which are also
referred to herein as Non-GAAP gross profit and Non-GAAP gross
margin, respectively.
WESTERN DIGITAL
CORPORATION
PRELIMINARY RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions;
unaudited)
Three Months Ended
Six Months Ended
December 29,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
GAAP gross profit
$
492
$
99
$
528
$
591
$
1,509
Stock-based compensation expense
13
13
12
26
26
Amortization of acquired intangible
assets
1
—
—
1
1
Recovery from contamination incident
(36
)
—
—
(36
)
—
Non-GAAP gross profit
$
470
$
112
$
540
$
582
$
1,536
GAAP operating expenses
$
702
$
695
$
849
$
1,397
$
1,672
Stock-based compensation expense
(59
)
(64
)
(74
)
(123
)
(146
)
Business separation costs
(36
)
—
—
(36
)
—
Employee termination, asset impairment,
and other
(24
)
(57
)
(76
)
(81
)
(100
)
Strategic review
(20
)
(17
)
—
(37
)
—
Amortization of acquired intangible
assets
—
—
(39
)
—
(77
)
Other
(2
)
(2
)
(1
)
(4
)
(1
)
Non-GAAP operating expenses
$
561
$
555
$
659
$
1,116
$
1,348
GAAP operating loss
$
(210
)
$
(596
)
$
(321
)
$
(806
)
$
(163
)
Gross profit adjustments
(22
)
13
12
(9
)
27
Operating expense adjustments
141
140
190
281
324
Non-GAAP operating income
(loss)
$
(91
)
$
(443
)
$
(119
)
$
(534
)
$
188
GAAP interest and other expense,
net
$
(30
)
$
(86
)
$
(64
)
$
(116
)
$
(138
)
Other
(64
)
—
—
(64
)
(1
)
Non-GAAP interest and other expense,
net
$
(94
)
$
(86
)
$
(64
)
$
(180
)
$
(139
)
GAAP income tax expense
$
28
$
3
$
61
$
31
$
118
Income tax adjustments
(3
)
22
(109
)
19
2
Non-GAAP income tax expense
$
25
$
25
$
(48
)
$
50
$
120
WESTERN DIGITAL
CORPORATION
PRELIMINARY RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share
amounts; unaudited)
Three Months Ended
Six Months Ended
December 29,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
GAAP net loss
$
(268
)
$
(685
)
$
(446
)
$
(953
)
$
(419
)
Stock-based compensation expense
72
77
86
149
172
Business separation costs
36
—
—
36
—
Employee termination, asset impairment and
other
24
57
76
81
100
Strategic review
20
17
—
37
—
Amortization of acquired intangible
assets
1
—
39
1
78
Recovery from contamination incident
(36
)
—
—
(36
)
—
Other
(62
)
2
1
(60
)
—
Income tax adjustments
3
(22
)
109
(19
)
(2
)
Non-GAAP net loss
(210
)
(554
)
(135
)
(764
)
(71
)
Less: cumulative dividends allocated to
preferred shareholders
14
15
—
29
—
Non-GAAP net loss attributable to
common shareholders
$
(224
)
$
(569
)
$
(135
)
$
(793
)
$
(71
)
Diluted loss per common share
GAAP
$
(0.87
)
$
(2.17
)
$
(1.40
)
$
(3.03
)
$
(1.32
)
Non-GAAP
$
(0.69
)
$
(1.76
)
$
(0.42
)
$
(2.45
)
$
(0.22
)
Diluted weighted average shares
outstanding:
GAAP
325
323
318
324
317
Non-GAAP
325
323
318
324
317
Cash flows
Cash flow provided by (used in) operating
activities
$
(92
)
$
(626
)
$
35
$
(718
)
$
41
Purchases of property, plant and
equipment, net
(150
)
69
(258
)
(81
)
(578
)
Activity related to Flash Ventures,
net
66
13
(17
)
79
82
Free cash flow
$
(176
)
$
(544
)
$
(240
)
$
(720
)
$
(455
)
To supplement the condensed consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles (“GAAP”), the table above sets forth Non-GAAP gross
profit; Non-GAAP gross margin; Non-GAAP operating expenses;
Non-GAAP operating income and loss; Non-GAAP interest and other
expense, net; Non-GAAP income tax expense; Non-GAAP net income and
loss; Non-GAAP diluted income and loss per common share and free
cash flow (“Non-GAAP measures”). These Non-GAAP measures are not in
accordance with, or an alternative for, measures prepared in
accordance with GAAP and may be different from Non-GAAP measures
used by other companies. The company believes the presentation of
these Non-GAAP measures, when shown in conjunction with the
corresponding GAAP measures, provides useful information to
investors for measuring the company’s earnings performance and
comparing it against prior periods. Specifically, the company
believes these Non-GAAP measures provide useful information to both
management and investors as they exclude certain expenses, gains
and losses that the company believes are not indicative of its core
operating results or because they are consistent with the financial
models and estimates published by many analysts who follow the
company and its peers. As discussed further below, these Non-GAAP
measures exclude, as applicable, stock-based compensation expense,
business separation costs, employee termination, asset impairment,
and other, expenses related to our strategic review, amortization
of acquired intangible assets, recovery from contamination
incident, other adjustments, and income tax adjustments, and the
company believes these measures along with the related
reconciliations to the GAAP measures provide additional detail and
comparability for assessing the company’s results. These Non-GAAP
measures are some of the primary indicators management uses for
assessing the company’s performance and planning and forecasting
future periods. These measures should be considered in addition to
results prepared in accordance with GAAP, but should not be
considered a substitute for, or superior to, GAAP results.
As described above, the company excludes the following items
from its Non-GAAP measures:
Stock-based compensation expense.
Because of the variety of equity awards used by companies, the
varying methodologies for determining stock-based compensation
expense, the subjective assumptions involved in those
determinations, and the volatility in valuations that can be driven
by market conditions outside the company’s control, the company
believes excluding stock-based compensation expense enhances the
ability of management and investors to understand and assess the
underlying performance of its business over time and compare it
against the company’s peers, a majority of whom also exclude
stock-based compensation expense from their Non-GAAP results.
Business separation cost. The
company incurred expenses associated with the separation of its HDD
and Flash business units to create two independent, public
companies. The Company believes these charges do not reflect the
company's operating results and that they are not indicative of the
underlying performance of its business.
Employee termination, asset impairment,
and other. From time-to-time, in order to realign the
company’s operations with anticipated market demand or to achieve
cost synergies from the integration of acquisitions, the company
may terminate employees and/or restructure its operations. From
time-to-time, the company may also incur charges from the
impairment of intangible assets and other long-lived assets. In
addition, the company may record credits related to gains upon sale
of property due to restructuring or reversals of charges recorded
in prior periods. In addition, the Company has taken actions to
reduce the amount of capital invested in facilities, including the
sale-leaseback of facilities. These charges or credits are
inconsistent in amount and frequency, and the company believes they
are not indicative of the underlying performance of its
business.
Strategic review. The company
incurred expenses associated with its review of strategic
alternatives that resulted in the planned separation of its HDD and
Flash business units to create two independent, public companies.
The company believes these charges do not reflect the company’s
operating results and that they are not indicative of the
underlying performance of its business.
Amortization of acquired intangible
assets. The company incurs expenses from the amortization of
acquired intangible assets over their economic lives. Such charges
are significantly impacted by the timing and magnitude of the
company’s acquisitions and any related impairment charges.
Recovery from contamination
incident. In February 2022, a contamination of certain
materials used in the company's manufacturing process occurred and
affected production operations at the flash-based memory
manufacturing facilities in Yokkaichi and Kitakami, Japan, which
are operated through the company's joint business ventures with
Kioxia Corporation (collectively, "Flash Ventures"). The
contamination resulted in scrapped inventory and rework costs,
decontamination and other costs needed to restore the facilities to
normal capacity, and under absorption of overhead costs which were
expensed as incurred. During the quarter ended December 29, 2023,
the company received a partial recovery of these losses from other
parties. The contamination charges and the related recovery are
inconsistent in amount and frequency, and the company believes they
are not part of the ongoing production operation of its
business.
Other adjustments. From
time-to-time, the company sells or impairs investments or other
assets which are not considered necessary to its business
operations, or incurs other charges or gains that the company
believes are not a part of the ongoing operation of its business.
The resulting expense or benefit is inconsistent in amount and
frequency.
Income tax adjustments. Income tax
adjustments include the difference between income taxes based on a
forecasted annual Non-GAAP tax rate and a forecasted annual GAAP
tax rate as a result of the timing of certain Non-GAAP pre-tax
adjustments. The income tax adjustments also include adjustments
for the re-measurement of certain unrecognized tax benefits
primarily related to tax positions taken in prior quarters,
including interest. These adjustments are excluded because the
company believes that they are not indicative of the underlying
performance of its ongoing business.
Additionally, free cash flow is defined as cash flows provided
by (used in) operating activities less purchases of property, plant
and equipment, net, and the activity related to Flash Ventures,
net. The company considers free cash flow generated in any period
to be a useful indicator of cash that is available for strategic
opportunities including, among others, investing in the company’s
business, making strategic acquisitions, repaying debt and
strengthening the balance sheet.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240125462016/en/
Western Digital Corp.
Investor Contact: T. Peter Andrew 949.672.9655
peter.andrew@wdc.com investor@wdc.com
Media Contact: Media Relations 408.801.0021
WD.Mediainquiries@wdc.com
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