Western Digital announces fourth quarter revenue of $940 million

LAKE FOREST, Calif. - July 29, 2005 - Western Digital Corp. (NYSE: WDC) today reported revenue of $940 million on shipments of approximately 15.8 million units, and net income of $41.2 million, or $.19 per share for its fourth fiscal quarter ended July 1, 2005, including a previously-announced $19 million charge for settlement of a lawsuit. On a non-GAAP basis, net income was $60.2 million, or $.27 per share. Gross margin for the quarter was 17.0 percent.

These results represented strong year-over-year performance, including 26 percent unit growth, 26 percent growth in revenue versus $749 million in the year ago period and 39 percent growth in net income over the $29.6 million reported last year. The growth in net income on a non-GAAP basis was 103 percent. A year ago, the company reported earnings of $.14 per share in the fiscal fourth quarter, shipped 12.5 million units, and posted gross margin of 13.5 percent.

From a balance sheet perspective, the company's cash and short-term investments at the end of the quarter grew to $598 million, an increase of $24 million from the March quarter. The company generated $113 million in cash from operations in the June quarter. It also repurchased 1.7 million shares for approximately $21.7 million in the June quarter. Since the inception of the share repurchase program in May 2004, the company has repurchased 6.7 million shares for approximately $61 million.

"We continue to increase our presence in markets for hard drives such as notebook PCs, enterprise applications and personal and digital video recorders while maintaining our leadership in the high-volume desktop PC business," said Matt Massengill, chairman and chief executive officer of Western Digital. "We saw healthy demand in all of our markets in what is typically the slowest quarter of the year for our industry."

WD indicated that 23 percent of its Q4 revenue was derived from sources including consumer electronics, enterprise applications, notebook PCs and retail sales. Seventy-seven percent of the company's fourth quarter revenue came from hard drives configured into desktop PCs. This compares with a mix in the year-ago quarter of 15 percent non-desktop PC revenue, 85 percent desktop PC revenue. In fiscal 2005, WD funded, developed or launched several new products aimed at the consumer electronics segments for personal and digital video recorders (PVR/DVR) and handheld devices and at the markets for notebook PCs, enterprise and retail consumer storage.

For the year ended July 1, 2005, WD reported revenue of $3.6 billion, net income of $198.4 million and diluted earnings per share of $.91, compared to $3.0 billion, $151.3 million and $.70, respectively, for the prior year ended July 2, 2004. The fiscal 2005 results included the $19 million charge for the lawsuit settlement. Excluding this item, net income on a non-GAAP basis would have been $217.4 million, or $1.00 per share. In the year-ago period, net income included $50.4 million of 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 $200.4 million, or $.92 per share.

About WD
WD, 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. WD was founded in 1970. The company's storage products are marketed to leading systems manufacturers and selected resellers under the Western Digital and WD brand names. Visit the Investor section of the company's Web site (www.westerndigital.com) to access a variety of financial and investor information.

Western Digital is a registered trademark and WD and the Western Digital logo are trademarks of Western Digital Technologies, Inc. All other trademarks herein are property of their respective owner.

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Voor meer informatie:

Lammers van Toorenburg Benelux PR
Marjan Kok
030 - 65 65 070
WD@lvtpr.nl

Daniel Mauerhofer      
EMEA Public Relations    
Daniel.Mauerhofer@wdc.com