Western Digital® Announces Q2 Revenue Of $3.8 Billion And Non-GAAP Net Income Of $513 Million, Or $2.09 Per Share(1)

IRVINE, Calif., Jan. 23, 2013 /PRNewswire-FirstCall/ -- Western Digital® Corp. (NASDAQ: WDC) today reported revenue of $3.8 billion, hard-drive shipments of 59.2 million and net income of $335 million, or $1.36 per share for its second fiscal quarter ended Dec. 28, 2012. On a non-GAAP basis, net income was $513 million or $2.09 per share.1 In the year-ago quarter, the company reported revenue of $2.0 billion, net income of $145 million, or $0.61 per share, and shipped 28.5 million hard drives. Non-GAAP net income in the year-ago quarter was $358 million, or $1.51 per share.2

The company generated $772 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $3.8 billion. During the quarter, the company utilized $146 million to buy back 4.2 million shares of common stock. On Dec. 3, the company declared a $0.25 per common share dividend, which was paid on Dec. 26.

"We are pleased with our December quarter results, reflecting outstanding execution and value creation by our HGST and WD® teams," said Steve Milligan, president and chief executive officer. "In an environment marked by continued macroeconomic uncertainty, soft PC demand and inventory rebalancing by our customers, we continue to manage our business by focusing on those variables that we control, allowing us to generate better than expected revenue and profitability and strong cash generation."

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 888-568-0860 in the U.S. or +1-402-998-0245 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. These forward-looking statements include statements concerning the company's revenue, profitability and cash generation. 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 Nov. 2, 2012, 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. Other marks may be mentioned herein that belong to other companies.

___________________________
1Non-GAAP net income for the second quarter fiscal 2013 consists of GAAP net income of $335 million plus $88 million for a tax-related matter, $49 million of amortization of intangibles related to the acquisition of HGST and $41 million related to employee termination benefits and other charges. Non-GAAP earnings per share of $2.09 for the second quarter is calculated by using the same 246 million diluted shares as is used for GAAP earnings per share. The tax effect of the employee termination benefits and other charges was not material.

2Non-GAAP net income for the second quarter fiscal 2012 consists of GAAP net income of $145 million plus $199 million for charges and expenses related to the flooding and $14 million of acquisition-related expenses. Non-GAAP earnings per share of $1.51 for the second quarter is calculated by using the same 237 million diluted shares as is used for GAAP earnings per share.

 

 

 

 WESTERN DIGITAL CORPORATION 


CONDENSED CONSOLIDATED BALANCE SHEETS 


(in millions; unaudited)




Dec. 28,


Jun. 29,






2012


2012










ASSETS











Current assets:






Cash and cash equivalents


$   3,816


$   3,208


Accounts receivable, net


1,732


2,364


Inventories


1,204


1,210


Other


423


359



Total current assets


7,175


7,141

Property, plant and equipment, net


3,938


4,067

Goodwill 


1,907


1,975

Other intangible assets, net


709


799

Other assets


200


224



Total assets




$ 13,929


$ 14,206















LIABILITIES AND SHAREHOLDERS' EQUITY











Current liabilities:






Accounts payable


$   2,185


$   2,773


Accrued expenses


722


858


Accrued warranty


131


171


Current portion of long-term debt


288


230



Total current liabilities


3,326


4,032

Long-term debt


1,840


1,955

Other liabilities


516


550



Total liabilities



5,682


6,537

Total shareholders' equity


8,247


7,669



Total liabilities and shareholders' equity



$ 13,929


$ 14,206

 

 

     WESTERN DIGITAL CORPORATION















CONDENSED CONSOLIDATED STATEMENTS OF INCOME 















     (in millions, except per share amounts)

     (unaudited)




































Three Months Ended


Six Months Ended








 Dec. 28, 


 Dec. 30, 


 Dec. 28, 


 Dec. 30, 








2012


2011


2012


2011















Revenue, net





$   3,824


$   1,995


$   7,859


$   4,689

Cost of revenue





2,765


1,347


5,607


3,500


Gross profit



1,059


648


2,252


1,189

Operating expenses:












Research and development



378


191


774


384


Selling, general and administrative


162


96


341


185


Employee termination benefits and other charges

41


 ― 


67


 ― 


Charges related to flooding



 ― 


199


 ― 


199



Total operating expenses


581


486


1,182


768

Operating income 





478


162


1,070


421


Net interest and other



(10)


(2)


(24)


(3)

Income before income taxes




468


160


1,046


418


Income tax provision



133


15


192


34

Net income 





$       335


$       145


$       854


$       384















Income per common share:












Basic





$      1.38


$      0.62


$      3.50


$      1.64


Diluted





$      1.36


$      0.61


$      3.43


$      1.62















Weighted average shares outstanding:











Basic





242


234


244


234


Diluted





246


237


249


237

 

WESTERN DIGITAL CORPORATION















CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS















(in millions; unaudited)




































Three Months Ended


Six Months Ended








Dec. 28,


Dec. 30,


Dec. 28,


Dec. 30,








2012


2011


2012


2011















Cash flows from operating activities








Net income

$ 335


$ 145


$ 854


$ 384

Adjustments to reconcile net income to net cash provided by operations:









Depreciation and amortization

309


140


622


298


Stock-based compensation

32


24


71


41


Deferred income taxes

80


9


68


18


Non-cash portion of employee termination benefits and other charges









15



15



Non-cash portion of charges related to flooding


109



109


Changes in operating assets and liabilities, net

1


(49)


78


(120)



Net cash provided by operating activities

772


378


1,708


730









Cash flows from investing activities








Purchases of property, plant and equipment

(246)


(120)


(628)


(253)

Acquisitions, net of cash acquired

(18)



(27)


Purchase of investment

(15)



(15)




Net cash used in investing activities

(279)


(120)


(670)


(253)









Cash flows from financing activities








Employee stock plans, net

53


22


113


20

Repurchases of common stock

(146)



(364)


Dividends to shareholders

(121)



(121)


Repayment of debt


(31)


(58)


(63)



Net cash used in financing activities

(214)


(9)


(430)


(43)















Net increase in cash and cash equivalents

279


249


608


434

Cash and cash equivalents, beginning of period

3,537


3,675


3,208


3,490

Cash and cash equivalents, end of period

$ 3,816


$ 3,924


$ 3,816


$ 3,924















 

 

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

SOURCE Western Digital Corp.



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