WESTERN DIGITAL CORPORATION 
By IRVINE, Calif., Jan. 22, 2014 /PRNewswire/ -- Western Digital(®) Corp. (NASDAQ: WDC) today reported revenue of $4.0 billion and net income of $430 million, or $1.77 per share for its second fiscal quarter ended Dec. 27, 2013. On a non-GAAP basis, net income was $532 million or $2.19 per share.(1) In the year-ago quarter, the company reported revenue of $3.8 billion, net income of $335 million, or $1.36 per share. Non-GAAP net income in the year-ago quarter was $513 million, or $2.09 per share.(2)
The company generated $727 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $4.7 billion. During the quarter, the company utilized $150 million to buy back 2.0 million shares of common stock. On Nov. 13, the company declared a $0.30 per common-share dividend, which was paid on Jan. 15.
"We executed well in the December quarter as we continue participating in the ongoing growth of data in all of our served markets," said Steve Milligan, president and chief executive officer. "The industry TAM was slightly higher than anticipated driven by seasonal demand as we saw strength in gaming and branded products.
"We continue to be very excited about our unique position in the storage ecosystem, enabling a broad-based perspective on the dramatic changes that are underway," said Milligan. "We serve very large markets underpinned by strong data growth prospects. Strategically, we are well positioned to play a leadership role by innovating and collaborating with our customers to define the future digital data landscape."
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 live and archived conference call webcast can be accessed online at investor.wdc.com. The telephone replay number is 800-688-2171 in the U.S. or +1-402-998-0565 for international callers.
About Western Digital
Western Digital Corp. (NASDAQ: WDC), Irvine, Calif., is a global provider of products and services that empower people to create, manage, experience and preserve digital content. Its subsidiaries design and manufacture storage devices, networking equipment and home entertainment products under the WD(®), HGST and G-Technology brands. 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 within the meaning of the Private Securities Litigation Reform Act of 1995 concerning our participation in the growth, and our role in the future, of digital data and our position in the storage ecosystem. These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied 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; uncertainties concerning the availability and cost of commodity materials and specialized product components; 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; and other risks and uncertainties listed in the company's filings with the Securities and Exchange Commission (the "SEC"), including the company's Form 10-Q filed with the SEC on Oct. 29, 2013, and our registration statement on Form S-3 filed with the SEC on Oct. 30, 2013, 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 the company 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 in the U.S. and other countries. HGST trademarks are intended and authorized for use only in countries and jurisdictions in which HGST has obtained the rights to use, market and advertise the brand. Other marks may be mentioned herein that belong to other companies.
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WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
Dec. 27, June 28,
2013 2013
---- ----
ASSETS
Current assets:
Cash and
cash
equivalents $4,655 $4,309
Accounts
receivable,
net 1,959 1,793
Inventories 1,293 1,188
Other
current
assets 381 308
--- ---
Total current assets 8,288 7,598
Property, plant and
equipment, net 3,509 3,700
Goodwill 2,555 1,954
Other intangible assets, net 607 605
Other non-current assets 323 179
--- ---
Total assets $15,282 $14,036
======= =====
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts
payable $2,106 $1,990
Accrued
arbitration
award 732 706
Accrued
expenses 479 480
Accrued
compensation 456 453
Accrued
warranty 117 114
Short-term
debt 500 -
Current
portion of
long-term
debt 230 230
--- ---
Total current liabilities 4,620 3,973
Long-term debt 1,610 1,725
Other liabilities 473 445
--- ---
Total liabilities 6,703 6,143
Total shareholders' equity 8,579 7,893
----- -----
Total liabilities and
shareholders' equity $15,282 $14,036
======= =====
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts; unaudited)
Three Months Six Months
Ended Ended
------------- -----------
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2013 2012 2013 2012
---- ---- ---- ----
Revenue, net $3,972 $3,824 $7,776 $7,859
Cost of revenue 2,831 2,765 5,547 5,607
----- ----- ----- -----
Gross
profit 1,141 1,059 2,229 2,252
----- ----- ----- -----
Operating expenses:
Research
and
development 421 378 822 774
Selling,
general
and
administrative 229 162 361 341
Charges
related to
arbitration
award 13 - 26 -
Employee
termination
benefits
and other
charges - 41 - 67
--- --- --- ---
Total operating expenses 663 581 1,209 1,182
--- --- ----- -----
Operating income 478 478 1,020 1,070
Net
interest
and other (11) (10) (21) (24)
--- --- --- ---
Income before income taxes 467 468 999 1,046
Income tax provision 37 133 74 192
Net income $430 $335 $925 $854
==== ==== ==== ====
Income per common share:
Basic $1.82 $1.38 $3.92 $3.50
===== ===== ===== =====
Diluted $1.77 $1.36 $3.81 $3.43
===== ===== ===== =====
Weighted average shares
outstanding:
Basic 236 242 236 244
=== === === ===
Diluted 243 246 243 249
=== === === ===
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
Three Months Six Months
Ended Ended
------------- -----------
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2013 2012 2013 2012
---- ---- ---- ----
Cash flows from operating
activities
Net income $430 $335 $925 $854
Adjustments to reconcile
net income to net cash
provided by operations:
Depreciation
and
amortization 317 309 629 622
Stock-
based
compensation 42 32 84 71
Deferred
income
taxes (29) 80 (39) 68
Loss on
disposal
of assets 14 - 29 -
Gain from
insurance
recovery - - (65) -
Non-cash
portion of
employee
termination
benefits
and other
charges
15 - 15
Changes in
operating
assets and
liabilities,
net (47) 1 (157) 78
--- --- ---- ---
Net cash provided by
operating activities 727 772 1,406 1,708
--- --- ----- -----
Cash flows from investing
activities
Purchases of property,
plant and equipment (170) (246) (306) (628)
Acquisitions, net of cash
acquired (560) (18) (823) (27)
Other investing activities,
net (35) (15) 4 (15)
Net cash used in investing
activities (765) (279) (1,125) (670)
---- ---- ------ ----
Cash flows from financing
activities
Employee stock plans, net 91 53 98 113
Repurchases of common stock (150) (146) (300) (364)
Dividends to shareholders (59) (121) (118) (121)
Proceeds from debt ? ? 500 ?
Repayment of debt (58) ? (115) (58)
--- --- ---- ---
Net cash provided by (used
in) financing activities (176) (214) 65 (430)
---- ---- --- ----
Net increase (decrease) in
cash and cash equivalents (214) 279 346 608
Cash and cash equivalents,
beginning of period 4,869 3,537 4,309 3,208
----- ----- ----- -----
Cash and cash equivalents,
end of period $4,655 $3,816 $4,655 $3,816
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SOURCE Western Digital Corp.
