2014

Western Digital Announces Q1 Revenue Of $3.8 Billion And Non-GAAP Net Income Of $514 Million, Or $2.12 Per Share(1)

IRVINE, Calif., Oct. 24, 2013 /PRNewswire-FirstCall/ -- Western Digital® Corp. (NASDAQ: WDC) today reported revenue of $3.8 billion and net income of $495 million, or $2.05 per share for its first fiscal quarter ended Sept. 27, 2013. On a non-GAAP basis, net income was $514 million or $2.12 per share.1 In the year-ago quarter, the company reported revenue of $4.0 billion, net income of $519 million, or $2.06 per share. Non-GAAP net income in the year-ago quarter was $594 million, or $2.36 per share.2

The company generated $680 million in cash from operations during the September quarter, ending with total cash and cash equivalents of $4.9 billion. During the quarter, the company utilized $150 million to buy back 2.3 million shares of common stock. On Sept. 19, the company declared a $0.25 per common share dividend, which was paid on Oct. 15.

"We continued to perform well in the September quarter as we remained focused on delivering value to our customers through differentiated and innovative storage solutions in all of our served markets," said Steve Milligan, president and chief executive officer. "Our HGST and WD subsidiaries continued to execute very well. Outstanding linearity drove strong operating results, with gross margins above the midpoint of our model range and earnings per share well above the high end of our guidance. Longer term, we are very excited about our ability to enable the ongoing creation, storage and management of digital content by consumers and businesses."

The investment community conference call to discuss these results will be broadcast live over the Internet today at 3 p.m. Pacific/6 p.m. Eastern. The live and archived conference call webcast can be accessed online at investor.wdc.com. The telephone replay number is 1-800-685-6364 in the U.S. or +1-402-998-0553 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.

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.

___________________________
1Non-GAAP net income for the first quarter fiscal 2014 consists of GAAP net income of $495 million plus $47 million of amortization of intangibles related to the acquisitions of HGST, sTec and VeloBit, $13 million of charges related to litigation, $13 million for acquisition-related expenses and $11 million related to fixed asset impairment and other charges, offset by a gain of $65 million for a flood-related insurance recovery. Non-GAAP earnings per share of $2.12 for the first quarter is calculated by using the same 242 million diluted shares as is used for GAAP earnings per share. The tax effect of the non-GAAP charges was not material.

2Non-GAAP net income for the first quarter fiscal 2013 consists of GAAP net income of $519 million plus $49 million of amortization of intangibles related to the acquisition of HGST and $26 million related to employee termination benefits and other charges. Non-GAAP earnings per share of $2.36 for the first quarter is calculated by using the same 252 million diluted shares as is used for GAAP earnings per share. The tax effect of the non-GAAP charges was not material.  

 

 WESTERN DIGITAL CORPORATION 










CONDENSED CONSOLIDATED BALANCE SHEETS 










(in millions; unaudited)
















Sept. 27,


June 28,







2013


2013










ASSETS







Current assets:






Cash and cash equivalents


$   4,869


$   4,309


Accounts receivable, net


1,791


1,793


Inventories


1,244


1,188


Other current assets


357


308



Total current assets


8,261


7,598

Property, plant and equipment, net


3,638


3,700

Goodwill 


2,051


1,954

Other intangible assets, net


616


605

Other non-current assets


240


179



Total assets



$ 14,806


$ 14,036













LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






Accounts payable


$   2,061


$   1,990


Accrued arbitration award


719


706


Accrued expenses


406


480


Accrued compensation 


388


453


Accrued warranty


123


114


Short-term debt


500



Current portion of long-term debt


230


230



Total current liabilities


4,427


3,973

Long-term debt


1,668


1,725

Other liabilities


458


445



Total liabilities


6,553


6,143

Total shareholders' equity


8,253


7,893



Total liabilities and shareholders' equity


$ 14,806


$ 14,036

 

 

     WESTERN DIGITAL CORPORATION











CONDENSED CONSOLIDATED STATEMENTS OF INCOME











     (in millions, except per share amounts; unaudited)





























Three Months Ended








 Sept. 27, 


 Sept. 28, 








2013


2012











Revenue, net


$     3,804


$     4,035

Cost of revenue


2,716


2,842


Gross profit


1,088


1,193

Operating expenses:






Research and development


401


396


Selling, general and administrative


132


179


Charges related to arbitration award


13



Employee termination benefits and other charges



26



Total operating expenses


546


601

Operating income


542


592


Net interest and other


(10)


(14)

Income before income taxes


532


578

Income tax provision


37


59

Net income


$        495


$        519







Income per common share:






Basic


$       2.10


$       2.11


Diluted


$       2.05


$       2.06







Weighted average shares outstanding:






Basic


236


246


Diluted


242


252

 

 

     WESTERN DIGITAL CORPORATION











CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS











     (in millions; unaudited)




























Three Months Ended








 Sept. 27, 


 Sept. 28, 








2013


2012











Cash flows from operating activities





Net income


$        495


$        519

Adjustments to reconcile net income to net cash 





  provided by operations:






Depreciation and amortization


312


313


Stock-based compensation


42


39


Deferred income taxes


(10)


(12)


Gain from insurance recovery


(65)



Changes in operating assets and liabilities, net


(94)


77



Net cash provided by operating activities


680


936










Cash flows from investing activities





Purchases of property, plant and equipment


(136)


(382)

Acquisitions, net of cash acquired


(263)


(9)

Other investing activities, net


39


 ― 



Net cash used in investing activities


(360)


(391)











Cash flows from financing activities





Employee stock plans, net


7


60

Repurchases of common stock


(150)


(218)

Dividends to shareholders


(59)


 ― 

Proceeds from debt


500


 ― 

Repayment of debt


(58)


(58)



Net cash provided by (used in) financing activities 


240


(216)

Net increase in cash and cash equivalents


560


329

Cash and cash equivalents, beginning of period


4,309


3,208

Cash and cash equivalents, end of period


$     4,869


$     3,537

(Logo: http://photos.prnewswire.com/prnh/20000711/WDCLOGO)

SOURCE Western Digital Corp.



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