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

Thursday, October 24, 2013

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

16:15 EDT Thursday, October 24, 2013

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 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.

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.

For further information: Bob Blair, Western Digital Investor Relations, 949.672.7834, robert.blair@wdc.com or Steve Shattuck, Western Digital Public Relations, 949.672.7817, steve.shattuck@wdc.com

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