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Press release from PR Newswire

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

Wednesday, January 23, 2013

Western Digital® Announces Q2 Revenue Of $3.8 Billion And Non-GAAP Net Income Of $513 Million, Or $2.09 Per Share(1)16:15 EST Wednesday, January 23, 2013IRVINE, 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.2The 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 DigitalWestern 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 $1.51 for the second quarter is calculated by using the same 237 million diluted shares as is used for GAAP earnings per share.    WESTERN DIGITAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in millions; unaudited)Dec. 28,Jun. 29,20122012ASSETSCurrent assets:Cash and cash equivalents$   3,816$   3,208Accounts receivable, net1,7322,364Inventories1,2041,210Other423359Total current assets7,1757,141Property, plant and equipment, net3,9384,067Goodwill 1,9071,975Other intangible assets, net709799Other assets200224Total assets$ 13,929$ 14,206LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Accounts payable$   2,185$   2,773Accrued expenses722858Accrued warranty131171Current portion of long-term debt288230Total current liabilities3,3264,032Long-term debt1,8401,955Other liabilities516550Total liabilities5,6826,537Total shareholders' equity8,2477,669Total liabilities and shareholders' equity$ 13,929$ 14,206       WESTERN DIGITAL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME      (in millions, except per share amounts)     (unaudited)Three Months EndedSix Months Ended Dec. 28,  Dec. 30,  Dec. 28,  Dec. 30, 2012201120122011Revenue, net$   3,824$   1,995$   7,859$   4,689Cost of revenue2,7651,3475,6073,500Gross profit1,0596482,2521,189Operating expenses:Research and development378191774384Selling, general and administrative16296341185Employee termination benefits and other charges41 ? 67 ? Charges related to flooding ? 199 ? 199Total operating expenses5814861,182768Operating income 4781621,070421Net interest and other(10)(2)(24)(3)Income before income taxes4681601,046418Income tax provision1331519234Net income $       335$       145$       854$       384Income per common share:Basic$      1.38$      0.62$      3.50$      1.64Diluted$      1.36$      0.61$      3.43$      1.62Weighted average shares outstanding:Basic242234244234Diluted246237249237 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, 2012201120122011Cash flows from operating activitiesNet income $ 335$ 145$ 854$ 384Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 309140622298Stock-based compensation 32247141Deferred income taxes 8096818Non-cash portion of employee termination benefits and other charges 15? 15? Non-cash portion of charges related to flooding ? 109? 109Changes in operating assets and liabilities, net 1(49)78(120)Net cash provided by operating activities 7723781,708730Cash 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 532211320Repurchases 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 279249608434Cash and cash equivalents, beginning of period 3,5373,6753,2083,490Cash 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.For further information: Bob Blair, Western Digital Investor Relations, +1-949-672-7834, robert.blair@wdc.com or Steve Shattuck, Western Digital Public Relations, +1-949-672-7817, steve.shattuck@wdc.com