Results Reflect Strong Execution, Sustained Cash Flow Generation in Challenging Industry Pricing Environment
LAKE FOREST, Calif., July 29 -- Western Digital Corp. (NYSE: WDC) today reported revenue of $749 million on shipments of approximately 12.5 million units, and net income of $29.6 million, or $.14 per share, for its fourth fiscal quarter ended July 2, 2004.
A year ago in the June 2003 quarter, Western Digital produced revenue of $680 million, shipped approximately 10.5 million units and earned $31.0 million, or $.15 per share. On a year-over-year basis, revenue grew 10 percent and units increased 19 percent. Net income in the year-ago period included a $3.4 million gain on the sale of investment securities and an $18.5 million loss on settlement of litigation. Excluding these items and the related tax effects, net income in the year-ago period on a non-GAAP basis would have been $45.5 million, or $.21 per share.(1)
Matt Massengill, chairman and chief executive officer of Western Digital, stated: "Sustained execution of our business model is serving us well in a demanding hard drive industry environment. We have strengthened customer relationships in our core desktop hard drive market through predictable supply of high quality products and we continued to expand our business in adjacent storage markets such as digital video recorders and non-PC, IT applications with Serial ATA hard drives. Relative to the hard drive industry, we achieved outstanding financial results, validating the low-cost structure we have put in place to remain profitable even in the most challenging of business environments.
"Reflecting our focus on cash generation, we realized $73 million cash from operations in the quarter. On a full fiscal year basis, we generated $190 million cash flow from operations and ended with $378 million of cash, even with our acquisition of the Read-Rite assets and the related volume production ramp of heads," said Massengill. The company also repurchased approximately 1.9 million shares of its common stock in the quarter at a total cost of $16 million.
The company indicated that fourth quarter pricing in the distribution channel was very aggressive and that it experienced a higher mix of business with OEM customers, which is typically lower gross margin business than distribution. These factors resulted in lower total gross margins of 13.5 percent.
For the year ended July 2, 2004, Western Digital reported revenue of $3.0 billion, net income of $151.3 million and diluted earnings per share of $.70, compared to $2.7 billion, $182.1 million and $.89, respectively, for the prior year ended June 27, 2003.
The fiscal 2004 results included $50.4 million of first quarter start-up expenses and other one-time charges related to the Read-Rite asset acquisition. Excluding these items and the related tax effects, net income on a non-GAAP basis would have been $200 million, or $.92 per share. In the year-ago period, net income included a $3.4 million gain on sale of investment securities and an $18.5 million loss on settlement of litigation. Excluding these items and the related tax effects, net income on a non-GAAP basis would have been $197 million, or $.96 per share.(1)
The investment community conference call to discuss these results and the company's outlook will be broadcast live over the Internet today at 2 p.m. PDT/5 p.m. EDT. The call will be accessible live and on an archived basis on the company's Web site at the following link: http://www.westerndigital.com/invest -- click on Conference Calls. A telephone replay will also be available at 888.562.0227 (toll-free) or 402.998.1410 (international).
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About Western Digital
Western Digital, one of the storage industry's pioneers and long-time leaders, provides products and services for people and organizations that collect, manage and use digital information. The company produces reliable, high-performance hard drives that keep users' data close-at-hand and secure from loss.
Western Digital was founded in 1970. The company's storage products are marketed to leading systems manufacturers and selected resellers under the Western Digital brand name. Visit the Investor section of the company's Web site (www.westerndigital.com) to access a variety of financial and investor information.
(1) The net income amount of $200 million, or $.92 per share, for fiscal 2004 is a non-GAAP measure that excludes $50.4 million of start-up expenses and other one-time charges related to the Read-Rite asset acquisition, reduced by $1.3 million, the amount of tax expense that would have been recorded had these charges not been incurred. The net income amounts of $45.5 million, or $.21 per share, for the June 2003 quarter and $197 million, or $.96 per share, for fiscal 2003 are non-GAAP measures that exclude $3.4 million of investment gains and an $18.5 million loss on settlement of litigation, reduced by $0.6 million, the net amount of tax expense that would have been recorded had these transactions not occurred.
Western Digital and the Western Digital logo are registered trademarks of Western Digital Technologies, Inc. All other trademarks herein are property of their respective owner.
Voor meer informatie:
Lammers van Toorenburg Benelux PR
Marjan Kok
030 - 65 65 070
WD@lvtpr.nl