WESTERN DIGITAL CORP. 
By LAKE FOREST, Calif., Jan. 21 /PRNewswire-FirstCall/ -- Western Digital Corp. (NYSE: WDC) today reported revenue of $2.6 billion, hard drive shipments of 49.5 million units and net income of $429 million, or $1.85 per share, for its second fiscal quarter ended Jan. 1, 2010. In the year-ago quarter, the company reported revenue of $1.8 billion, hard drive shipments of 35.5 million units, and net income of $14 million. The year-ago net income included $113 million of restructuring charges.
The company generated a record $557 million in cash from operations during the second quarter, ending with total cash and cash equivalents of $2.4 billion.
"We are very pleased with WD's strong financial performance in our second fiscal quarter," said John Coyne, president and chief executive officer. "For the third consecutive quarter, we increased output in a supply constrained environment, providing strong support of our customers' growth opportunities, primarily in the consumer segment but, notably, with some emerging strength in the commercial sector. Continued customer preference for WD products, our timely investments in capital, the support of our supply partners and outstanding execution by the WD team generated record revenue and profits. A moderate pricing environment, combined with our passionate focus on cost and efficiency, enabled gross margins of 26.2 percent -- well above the high end of our model range."
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: 800-925-0904 (toll-free)
+1-203-369-3093 (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.
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)
Jan. 1, Jul. 3,
2010 2009
---- ----
ASSETS
Current assets:
Cash and cash equivalents $2,435 $1,794
Accounts receivable, net 1,365 926
Inventories 453 376
Other 163 134
--- ---
Total current assets 4,416 3,230
Property and equipment, net 1,696 1,584
Goodwill 139 139
Other intangible assets, net 83 89
Other assets 251 249
--- ---
Total assets $6,585 $5,291
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,507 $1,101
Accrued expenses 288 247
Accrued warranty 118 95
Current portion of long-term debt 94 82
--- ---
Total current liabilities 2,007 1,525
Long-term debt 350 400
Other liabilities 237 174
--- ---
Total liabilities 2,594 2,099
Shareholders' equity 3,991 3,192
----- -----
Total liabilities and shareholders' equity $6,585 $5,291
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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
------------------ ----------------
Jan. 1, Dec. 26, Jan. 1, Dec. 26,
2010 2008 2010 2008
---- ---- ---- ----
Revenue, net $2,619 $1,823 $4,827 $3,933
Cost of revenue 1,932 1,533 3,626 3,219
----- ----- ----- -----
Gross margin 687 290 1,201 714
--- --- ----- ---
Operating expenses:
Research and development 154 119 296 252
Selling, general and
administrative 60 42 113 99
Restructuring - 113 - 113
--- --- --- ---
Total operating expenses 214 274 409 464
--- --- --- ---
Operating income 473 16 792 250
Net interest and other (2) (9) (4) (13)
--- --- --- ---
Income before income taxes 471 7 788 237
Income tax provision
(benefit) 42 (7) 71 12
--- --- --- ---
Net income $429 $14 $717 $225
==== === ==== ====
Income per common share:
Basic $1.89 $0.06 $3.17 $1.01
===== ===== ===== =====
Diluted $1.85 $0.06 $3.10 $1.00
===== ===== ===== =====
Common shares used in
computing per share amounts:
Basic 227 222 226 222
=== === === ===
Diluted 232 224 231 225
=== === === ===
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
Jan. 1, Dec. 26, Jan. 1, Dec. 26,
------- -------- ------- --------
2010 2008 2010 2008
---- ---- ---- ----
Cash flows from operating
activities
Net income $429 $14 $717 $225
Adjustments to reconcile
net income to net cash
provided by operations:
Depreciation and
amortization 126 122 247 239
Stock-based compensation 13 11 27 21
Deferred income taxes (5) (7) (5) (7)
Loss on investments - 6 - 9
Non-cash portion of
restructuring - 80 - 80
Changes in operating
assets and liabilities (6) 74 5 34
--- --- --- ---
Net cash provided by
operating activities 557 300 991 601
--- --- --- ---
Cash flows from investing
activities
Purchases of property and
equipment (199) (140) (375) (302)
Sales and maturities of
investments 3 - 3 1
--- --- --- ---
Net cash used in
investing activities (196) (140) (372) (301)
---- ---- ---- ----
Cash flows from financing
activities
Issuance of stock under
employee stock plans,
net 26 10 40 9
Increase (decrease) in
excess tax benefits from
employee stock plans 11 (4) 20 4
Repurchases of common
stock - - - (36)
Repayment of long-term
debt (19) (3) (38) (5)
--- --- --- ---
Net cash provided by
(used in) financing
activities 18 3 22 (28)
--- --- --- ---
Net increase in cash and
cash equivalents 379 163 641 272
Cash and cash
equivalents, beginning
of period 2,056 1,213 1,794 1,104
----- ----- ----- -----
Cash and cash
equivalents, end of
period $2,435 $1,376 $2,435 $1,376
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(Logo: http://www.newscom.com/cgi-bin/prnh/20000711/WDCLOGO)
SOURCE Western Digital Corp.
