Western Digital Announces Q2 Revenue Of $4.0 Billion And Non-GAAP Net Income Of $532 Million, Or $2.19 Per Share(1)

22 Jan, 2014, 16:15 ET from Western Digital Corp.

IRVINE, Calif., Jan. 22, 2014 /PRNewswire/ -- Western Digital® Corp. (NASDAQ: WDC) today reported revenue of $4.0 billion and net income of $430 million, or $1.77 per share for its second fiscal quarter ended Dec. 27, 2013. On a non-GAAP basis, net income was $532 million or $2.19 per share.1 In the year-ago quarter, the company reported revenue of $3.8 billion, net income of $335 million, or $1.36 per share. Non-GAAP net income in the year-ago quarter was $513 million, or $2.09 per share.2

The company generated $727 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $4.7 billion. During the quarter, the company utilized $150 million to buy back 2.0 million shares of common stock. On Nov. 13, the company declared a $0.30 per common-share dividend, which was paid on Jan. 15.

"We executed well in the December quarter as we continue participating in the ongoing growth of data in all of our served markets," said Steve Milligan, president and chief executive officer. "The industry TAM was slightly higher than anticipated driven by seasonal demand as we saw strength in gaming and branded products.

"We continue to be very excited about our unique position in the storage ecosystem, enabling a broad-based perspective on the dramatic changes that are underway," said Milligan. "We serve very large markets underpinned by strong data growth prospects. Strategically, we are well positioned to play a leadership role by innovating and collaborating with our customers to define the future digital data landscape."

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 800-688-2171 in the U.S. or +1-402-998-0565 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 concerning our participation in the growth, and our role in the future, of digital data and our position in the storage ecosystem. 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-Q filed with the SEC on Oct. 29, 2013, and our registration statement on Form S-3 filed with the SEC on Oct. 30, 2013, 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.

1Non-GAAP net income for the second quarter fiscal 2014 consists of GAAP net income of $430 million plus $51 million of amortization of intangibles related to the acquisitions of HGST, sTec, VeloBit and Virident, $26 million related to employee termination benefits and other charges and $25 million of charges related to litigation. Non-GAAP earnings per share of $2.19 for the second quarter is calculated by using the same 243 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 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 non-GAAP charges was not material.

 

 WESTERN DIGITAL CORPORATION 

CONDENSED CONSOLIDATED BALANCE SHEETS 

(in millions; unaudited)

Dec. 27,

June 28,

2013

2013

ASSETS

Current assets:

Cash and cash equivalents

$     4,655

$   4,309

Accounts receivable, net

1,959

1,793

Inventories

1,293

1,188

Other current assets

381

308

Total current assets

8,288

7,598

Property, plant and equipment, net

3,509

3,700

Goodwill 

2,555

1,954

Other intangible assets, net

607

605

Other non-current assets

323

179

Total assets

$   15,282

$ 14,036

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$     2,106

$   1,990

Accrued arbitration award

732

706

Accrued expenses

479

480

Accrued compensation 

456

453

Accrued warranty

117

114

Short-term debt

500

Current portion of long-term debt

230

230

Total current liabilities

4,620

3,973

Long-term debt

1,610

1,725

Other liabilities

473

445

Total liabilities

6,703

6,143

Total shareholders' equity

8,579

7,893

Total liabilities and shareholders' equity

$   15,282

$ 14,036

 

 

 

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

     (in millions, except per share amounts; unaudited)

Three Months Ended

Six Months Ended

 Dec. 27, 

 Dec. 28, 

 Dec. 27, 

 Dec. 28, 

2013

2012

2013

2012

Revenue, net

$   3,972

$   3,824

$   7,776

$   7,859

Cost of revenue

2,831

2,765

5,547

5,607

Gross profit

1,141

1,059

2,229

2,252

Operating expenses:

Research and development

421

378

822

774

Selling, general and administrative

229

162

361

341

Charges related to arbitration award

13

26

Employee termination benefits and other charges

41

67

Total operating expenses

663

581

1,209

1,182

Operating income

478

478

1,020

1,070

Net interest and other

(11)

(10)

(21)

(24)

Income before income taxes

467

468

999

1,046

Income tax provision

37

133

74

192

Net income

$       430

$       335

$       925

$       854

Income per common share:

Basic

$      1.82

$      1.38

$      3.92

$      3.50

Diluted

$      1.77

$      1.36

$      3.81

$      3.43

Weighted average shares outstanding:

Basic

236

242

236

244

Diluted

243

246

243

249

 

 

 

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     (in millions; unaudited)

Three Months Ended

Six Months Ended

 Dec. 27, 

 Dec. 28, 

 Dec. 27, 

 Dec. 28, 

2013

2012

2013

2012

Cash flows from operating activities

Net income

$       430

$       335

$       925

$       854

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

Depreciation and amortization

317

309

629

622

Stock-based compensation

42

32

84

71

Deferred income taxes

(29)

80

(39)

68

Loss on disposal of assets

14

29

Gain from insurance recovery

(65)

Non-cash portion of employee termination benefits and other charges

15

15

Changes in operating assets and liabilities, net

(47)

1

(157)

78

Net cash provided by operating activities

727

772

1,406

1,708

Cash flows from investing activities

Purchases of property, plant and equipment

(170)

(246)

(306)

(628)

Acquisitions, net of cash acquired

(560)

(18)

(823)

(27)

Other investing activities, net

(35)

(15)

4

(15)

Net cash used in investing activities

(765)

(279)

(1,125)

(670)

Cash flows from financing activities

Employee stock plans, net

91

53

98

113

Repurchases of common stock

(150)

(146)

(300)

(364)

Dividends to shareholders

(59)

(121)

(118)

(121)

Proceeds from debt

 ― 

 ― 

500

 ― 

Repayment of debt

(58)

 ― 

(115)

(58)

Net cash provided by (used in) financing activities 

(176)

(214)

65

(430)

Net increase (decrease) in cash and cash equivalents

(214)

279

346

608

Cash and cash equivalents, beginning of period

4,869

3,537

4,309

3,208

Cash and cash equivalents, end of period

$   4,655

$   3,816

$   4,655

$   3,816

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

SOURCE Western Digital Corp.



RELATED LINKS

http://www.westerndigital.com