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WD(R) Announces Fiscal Q3 Revenue of $2.6 Billion With Net Income of $400 Million, or $1.71 Per Share
Apr 22, 2010 (04:04 PM EDT)


Revenue Up 66 Percent, Hard Drive Shipments up 62 Percent, From Year-ago quarter

LAKE FOREST, Calif., April 22 /PRNewswire-FirstCall/ -- Western Digital Corp. (NYSE: WDC) today reported revenue of $2.6 billion, hard drive shipments of 51.1 million units and net income of $400 million, or $1.71 per share, for its third fiscal quarter ended Apr. 2, 2010. In the year-ago quarter, the company reported revenue of $1.6 billion, hard drive shipments of 31.6 million units, and net income of $50 million, or $0.22 per share.

The company generated $588 million in cash from operations during the third quarter, ending with total cash and cash equivalents of $2.8 billion.  

John Coyne, president and chief executive officer, said: "With market demand stronger than anticipated in the March quarter, our large-scale vertical integration, agile business model and product breadth allowed us to respond to this upside opportunity and again grow our share of the overall hard drive market.

"We believe that 2010 will continue to be a strong year for digital storage," said Coyne. "We will maintain our focus on facilitating our customers' growth and making them successful while at the same time achieving sustained profitability for WD."

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 call will be accessible live and on an archived basis via the link below:

Audio Webcast:

www.westerndigital.com/investor


Click on "Conference Calls"

Telephone Replay:

800-879-3693 (toll-free)


+1-402-220-4717 (international)



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 designs and produces reliable, high-performance hard drives and solid state drives that keep users' data accessible and secure from loss. Its advanced technologies are configured into applications for client and enterprise computing, embedded systems and consumer electronics, as well as its own consumer storage and media products.

WD was founded in 1970. The company's storage products are marketed to leading OEMs, systems manufacturers, selected resellers and retailers under the Western Digital® and WD brand names. 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 concerning demand for digital storage in 2010, growth by WD's customers and WD's profitability. The foregoing forward-looking statements are based on WD's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including: the impact of recent uncertainty and volatility in global economic conditions; supply and demand conditions in the hard drive industry; 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; changes in the availability and cost of commodity materials and specialized product components that WD does not make internally; and other risks and uncertainties listed in WD's recent Form 10-Q filed with the SEC on Jan. 29, 2010, 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 WD 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 of Western Digital Technologies, Inc.  All other trademarks mentioned herein belong to their respective owners.

WESTERN DIGITAL CORPORATION




CONDENSED CONSOLIDATED BALANCE SHEETS




(in millions; unaudited)





Apr. 2,

Jul. 3,


2010

2009




ASSETS




Current assets:



Cash and cash equivalents

$  2,826

$  1,794

Accounts receivable, net

1,257

926

Inventories

507

376

Other

188

134

Total current assets

4,778

3,230

Property and equipment, net

1,756

1,584

Goodwill

139

139

Other intangible assets, net

80

89

Other assets

247

249

Total assets

$  7,000

$  5,291







LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:



Accounts payable

$  1,508

$  1,101

Accrued expenses

225

247

Accrued warranty

124

95

Current portion of long-term debt

100

82

Total current liabilities

1,957

1,525

Long-term debt

325

400

Other liabilities

287

174

Total liabilities

2,569

2,099

Shareholders' equity

4,431

3,192

Total liabilities and shareholders' equity

$  7,000

$  5,291






WESTERN DIGITAL CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(in millions, except per share amounts)

(unaudited)




Three Months Ended

Nine Months Ended



Apr. 2,

2010

Mar. 27,

2009

Apr. 2,

2010

Mar. 27,

2009

Revenue, net

$  2,641

$  1,592

$  7,468

$  5,524

Cost of revenue

1,976

1,339

5,602

4,557

Gross margin

665

253

1,866

967

Operating expenses:





Research and development

160

125

456

377

Selling, general and administrative

64

49

177

149

Acquired in-process research and development

14

14

Restructuring

4

117

Total operating expenses

224

192

633

657

Operating income

441

61

1,233

310

Net interest and other

(1)

(3)

(5)

(16)

Income before income taxes

440

58

1,228

294

Income tax provision

40

8

110

20

Net income

$  400

$  50

$  1,118

$  274






Income per common share:










Basic

$  1.75

$  0.22

$  4.93

$  1.23

Diluted

$  1.71

$  0.22

$  4.82

$  1.22






Common shares used in computing per share amounts:










Basic

229

223

227

222






Diluted

234

226

232

225




WESTERN DIGITAL CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(in millions; unaudited)



Three Months Ended

Nine Months Ended



Apr. 2,

2010

Mar. 27,

2009

Apr. 2,

2010

Mar. 27,

2009

Cash flows from operating activities





Net income

$  400

$  50

$  1,118

$  274

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





Depreciation and amortization

128

119

376

358

Stock-based compensation

16

12

43

33

Deferred income taxes

4

(2)

(7)

Loss on investments

1

10

Non-cash portion of restructuring

1

81

Acquired in-process research and development

14

14

Changes in operating assets and liabilities

40

158

44

193

Net cash provided by operating activities

588

355

1,579

956

Cash flows from investing activities





Acquisitions, net of cash acquired

(44)

(44)

Purchases of property and equipment

(177)

(106)

(552)

(408)

Sales and maturities of investments

1

4

1

Net cash used in investing activities

(176)

(150)

(548)

(451)

Cash flows from financing activities





Issuance of stock under employee stock plans, net

(2)

(1)

38

8

Excess tax benefits from employee stock plans

1

20

5

Repurchases of common stock

(36)

Repayment of long-term debt

(19)

(2)

(57)

(7)

Net cash provided by (used in) financing activities

(21)

(2)

1

(30)

Net increase in cash and cash equivalents

391

203

1,032

475

Cash and cash equivalents, beginning of period

2,435

1,376

1,794

1,104

Cash and cash equivalents, end of period

$  2,826

$  1,579

$  2,826

$  1,579




(Logo:  http://www.newscom.com/cgi-bin/prnh/20000711/WDCLOGO)

SOURCE Western Digital Corp.