TechWeb

Western DigitalĀ® Announces Record Financial Results

Jul 25, 2012 (04:07 PM EDT)
URL: http://www.techweb.com/show-press-release/X915077/western-digital-announces-record-financial-results.html

Full-Year Revenue Grew 31 Percent; Earnings More Than Doubled

IRVINE, Calif., July 25, 2012 /PRNewswire-FirstCall/ -- Western Digital® Corp. (NASDAQ: WDC) today reported revenue of $12.5 billion and net income of $1.6 billion, or $6.58 per share for fiscal year 2012, compared to fiscal 2011 revenue of $9.5 billion and net income of $726 million, or $3.09 per share. On a non-GAAP basis, fiscal 2012 net income was $2.1 billion or $8.61 per share, compared to fiscal 2011 net income of $770 million or $3.28 per share.1 Both the GAAP and non-GAAP fiscal 2012 results include results from the company's newly acquired HGST subsidiary from the acquisition date of March 8 through the end of fiscal 2012.

For its fourth fiscal quarter ended June 29, 2012, the company reported revenue of $4.8 billion, hard-drive shipments of 71.0 million and net income of $745 million, or $2.87 per share. On a non-GAAP basis, net income was $872 million, or $3.35 per share.2 In the year-ago quarter, the company reported revenue of $2.4 billion, net income of $158 million, or $0.67 per share, and shipped 53.8 million hard drives. Non-GAAP net income in the year-ago quarter was $193 million, or $0.81 per share.3

The company generated $1.1 billion in cash from operations during the June quarter, ending with total cash and cash equivalents of $3.2 billion. During the quarter, the company repaid $558 million of debt and spent $604 million to buy back over 16 million shares of common stock.

"Fiscal 2012 was one of the most challenging and exciting years in our 42-year history," said John Coyne, chief executive officer. "While responding to two major natural disasters and completing the largest acquisition in the history of the industry, we achieved year-over-year revenue growth of 31 percent and more than doubled earnings per share.

"In the June quarter, demand was in line with our forecast as industry shipments reached 157 million units, bringing total HDD shipments for the year to 599 million units. Our WD and HGST subsidiaries both performed ahead of plan in Q4, delivering great products with consistent execution, resulting in strong revenue growth, gross margin and cash flows."

The investment community conference call to discuss these results and the company's September quarter and fiscal year 2013 outlook will be broadcast live over the Internet today at 2 p.m. Pacific/5 p.m. Eastern. The live and archived conference call webcast can be accessed online at investor.wdc.com. The telephone replay number is 800-274-1341 in the U.S. or +1-203-369-3636 for international callers.

About Western Digital

Western Digital, a storage industry pioneer and long-time leader, 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 storage technologies serve a wide range of host applications including client and enterprise computing, embedded systems and consumer electronics, as well as its own storage systems. Its home entertainment products enable rich engagement with stored digital content.

Western Digital was founded in 1970. The company's products are marketed to leading OEMs, systems manufacturers, selected resellers and retailers under the Western Digital®, WD® and HGST brand names. 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 of Western Digital Technologies, Inc.  All other trademarks mentioned herein belong to their respective owners.

1 Non-GAAP net income for fiscal 2012 consists of GAAP net income of $1.6 billion plus $214 million of charges and expenses related to the flooding net of recoveries, $91 million for costs recognized upon the sale of acquired inventory that was written-up to fair value, $80 million related to restructuring, $63 million for amortization of intangibles related to the acquisition, $62 million of acquisition-related expenses, $7 million of litigation accruals, less $20 million of tax effects related to the aforementioned items. Non-GAAP earnings per share of $8.61 for fiscal 2012 is calculated by using the same 245 million diluted shares as is used for GAAP earnings per share. Non-GAAP net income for fiscal 2011 consists of GAAP net income of $726 million plus $44 million of acquisition-related expenses and unrelated litigation accruals. Non-GAAP earnings per share of $3.28 for fiscal 2011 is calculated by using the same 235 million diluted shares as is used for GAAP earnings per share.

2 Non-GAAP net income for the fourth quarter fiscal 2012 consists of GAAP net income of $745 million plus $51 million for amortization of intangibles related to the acquisition, $80 million related to restructuring less a $4 million tax effect related to the restructuring. Non-GAAP earnings per share of $3.35 for the fourth quarter is calculated by using the same 260 million diluted shares as is used for GAAP earnings per share.

3 Non-GAAP net income for the fourth quarter fiscal 2011 consists of GAAP net income of $158 million plus $35 million of acquisition-related expenses and unrelated litigation accruals. Non-GAAP earnings per share of $0.81 for the fourth 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)
















Jun. 29,


Jul. 1,







2012


2011










ASSETS










Current assets:








Cash and cash equivalents



$ 3,208


$ 3,490


Accounts receivable, net



2,364


1,206


Inventories




1,210


577


Other




359


214



Total current assets



7,141


5,487

Property, plant and equipment, net



4,067


2,224

Goodwill




1,975


151

Other intangible assets, net



799


71

Other assets




224


185



Total assets




$ 14,206


$ 8,118



















LIABILITIES AND SHAREHOLDERS' EQUITY










Current liabilities:








Accounts payable




$ 2,773


$ 1,545


Accrued expenses



858


349


Accrued warranty




171


132


Current portion of long-term debt



230


144



Total current liabilities



4,032


2,170

Long-term debt




1,955


150

Other liabilities




550


310



Total liabilities




6,537


2,630

Total shareholders' equity



7,669


5,488



Total liabilities and shareholders' equity


$ 14,206


$ 8,118

 

WESTERN DIGITAL CORPORATION











CONDENSED CONSOLIDATED STATEMENTS OF INCOME











(in millions, except per share amounts)

(unaudited)
























Three Months Ended


Years Ended




Jun. 29,


Jul. 1,


Jun. 29,


Jul. 1,




2012


2011


2012


2011











Revenue, net

$ 4,754


$ 2,403


$ 12,478


$ 9,526

Cost of revenue

3,282


1,934


8,840


7,735


Gross margin

1,472


469


3,638


1,791

Operating expenses:









Research and development

406


188


1,055


703


Selling, general and administrative

178


109


518


307


Charges related to flooding, net



214



Restructuring

80



80




Total operating expenses

664


297


1,867


1,010

Operating income

808


172


1,771


781


Net interest and other

(7)


(2)


(14)


(1)

Income before income taxes

801


170


1,757


780


Income tax provision

56


12


145


54

Net income

$ 745


$ 158


$ 1,612


$ 726











Income per common share:









Basic

$ 2.93


$ 0.68


$ 6.69


$ 3.14


Diluted

$ 2.87


$ 0.67


$ 6.58


$ 3.09











Weighted average shares outstanding:









Basic

254


233


241


231


Diluted

260


237


245


235


 

WESTERN DIGITAL CORPORATION















CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS















(in millions; unaudited)




































Three Months Ended


Years Ended








Jun. 29,


Jul. 1,


Jun. 29,


Jul. 1,








2012


2011


2012


2011















Cash flows from operating activities










Net income





$ 745


$ 158


$ 1,612


$ 726

Adjustments to reconcile net income to net cash








provided by operations:









Depreciation and amortization

339


150


825


602


Stock-based compensation

31


15


92


69


Deferred income taxes

(8)


16


34


20


Non-cash portion of charges related to flooding



119



Non-cash portion of restructuring

56



56



Changes in operating assets and liabilities, net

(35)


108


329


238



Net cash provided by operating activities

1,128


447


3,067


1,655















Cash flows from investing activities








Purchases of property, plant and equipment

(324)


(153)


(717)


(778)

Acquisitions, net of cash acquired



15


(15)


(3,526)


(15)

Proceeds from the sale of equipment



76



76




Cash used in investing activities

(233)


(168)


(4,167)


(793)















Cash flows from financing activities








Employee stock plans, net

93


12


141


50

Repurchases of common stock

(604)



(604)


(50)

Proceeds from debt, net of issuance costs



2,775


Repayment of assumed debt



(585)


Repayment of debt

(558)


(31)


(908)


(106)



Net cash provided by (used in) financing activities

(1,069)


(19)


819


(106)

Effect of exchange rate changes on cash

5



(1)


Net increase (decrease) in cash and cash equivalents

(169)


260


(282)


756

Cash and cash equivalents, beginning of period

3,377


3,230


3,490


2,734

Cash and cash equivalents, end of period

$ 3,208


$ 3,490


$ 3,208


$ 3,490















(Logo:  http://photos.prnewswire.com/prnh/20000711/WDCLOGO)

SOURCE Western Digital Corp.