WESTERN DIGITAL CORP. 
By IRVINE, Calif., Jan. 18, 2011 /PRNewswire-FirstCall/ -- Western Digital Corp. (NYSE: WDC) today reported revenue of $2.475 billion, hard-drive unit shipments of 52.2 million and net income of $225 million, or $0.96 per share, for its second fiscal quarter ended Dec. 31, 2010. In the year-ago quarter, the company reported revenue of $2.619 billion, shipped 49.5 million hard drives, and reported net income and earnings per share of $429 million and $1.85, respectively.
The company generated $505 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $3.1 billion.
"We are pleased to deliver better-than-expected revenues, profitability and gross margin in the December quarter, reflecting solid execution and an improvement in hard drive industry conditions compared with the prior two quarters," said John Coyne, president and chief executive officer. "The opportunity for profitable growth in our industry remains tremendous and we are committed to improving our financial performance over the longer term. We plan to do so with a continued emphasis on our industry-leading low-cost structure, high quality, highly reliable and highly available products, and a sharp focus on matching production with true customer demand."
The investment community conference call to discuss these results will be broadcast live over the Internet today at 3 p.m. PST/6 p.m. EST. The call will be accessible live and on an archived basis via the link below. The company is publishing an expanded investor summary sheet today on the investor relations section of its Web site. After the conclusion of today's webcast conference call, the summary sheet will be updated to reflect the company's guidance.
Audio webcast: www.westerndigital.com/investor
Click on "Conference Calls"
Telephone replay: 888-568-0891 (toll free)
+1-402-998-1567 (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 Web site (www.westerndigital.com) to access a variety of financial and investor information.
This press release contains forward-looking statements concerning opportunities for growth in the industry and WD's financial performance. 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 continued 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 Oct. 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)
Dec. 31, Jul. 2,
2010 2010
---- ----
ASSETS
Current assets:
Cash and cash equivalents $3,110 $2,734
Accounts receivable, net 1,250 1,256
Inventories 568 560
Other 192 170
--- ---
Total current assets 5,120 4,720
Property and equipment, net 2,277 2,159
Goodwill 151 146
Other intangible assets, net 79 88
Other assets 216 215
--- ---
Total assets $7,843 $7,328
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,628 $1,507
Accrued expenses 262 281
Accrued warranty 135 129
Current portion of long-term
debt 119 106
--- ---
Total current liabilities 2,144 2,023
Long-term debt 231 294
Other liabilities 309 302
--- ---
Total liabilities 2,684 2,619
Shareholders' equity 5,159 4,709
----- -----
Total liabilities and
shareholders' equity $7,843 $7,328
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WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
2010 2010 2010 2010
---- ---- ---- ----
Revenue, net $2,475 $2,619 $4,871 $4,827
Cost of revenue 2,000 1,932 3,959 3,626
----- ----- ----- -----
Gross margin 475 687 912 1,201
--- --- --- -----
Operating expenses:
Research and
development 169 154 336 296
Selling, general and
administrative 66 60 125 113
--- --- --- ---
Total operating
expenses 235 214 461 409
--- --- --- ---
Operating income 240 473 451 792
Net interest and
other (1) (2) (1) (4)
--- --- --- ---
Income before income
taxes 239 471 450 788
Income tax provision 14 42 28 71
--- --- --- ---
Net income $225 $429 $422 $717
==== ==== ==== ====
Income per common
share:
Basic $0.98 $1.89 $1.83 $3.17
===== ===== ===== =====
Diluted $0.96 $1.85 $1.80 $3.10
===== ===== ===== =====
Weighted average
shares outstanding:
Basic 230 227 230 226
=== === === ===
Diluted 235 232 235 231
=== === === ===
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
Three Months
Ended Six Months Ended
------------ ----------------
Dec. Jan. Dec. Jan.
31, 1, 31, 1,
2010 2010 2010 2010
---- ---- ---- ----
Cash flows from operating
activities
Net income $225 $429 $422 $717
Adjustments to reconcile net
income to net cash
provided by operations:
Depreciation and amortization 151 126 301 247
Stock-based compensation 18 13 37 27
Deferred income taxes 1 (5) 1 (5)
Changes in operating assets
and liabilities 110 (6) 134 5
--- --- --- ---
Net cash provided by
operating activities 505 557 895 991
--- --- --- ---
Cash flows from investing
activities
Purchases of property and
equipment (250) (199) (450) (375)
Sales and maturities of
investments - 3 - 3
--- --- --- ---
Net cash used in investing
activities (250) (196) (450) (372)
---- ---- ---- ----
Cash flows from financing
activities
Employee stock plans, net 22 37 31 60
Repurchases of common stock - - (50) -
Repayment of long-term debt (25) (19) (50) (38)
--- --- --- ---
Net cash provided by (used
in) financing activities (3) 18 (69) 22
--- --- --- ---
Net increase in cash and cash
equivalents 252 379 376 641
Cash and cash equivalents,
beginning of period 2,858 2,056 2,734 1,794
----- ----- ----- -----
Cash and cash equivalents,
end of period $3,110 $2,435 $3,110 $2,435
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(Logo: http://photos.prnewswire.com/prnh/20000711/WDCLOGO)
SOURCE Western Digital Corp.
