WESTERN DIGITAL CORPORATION 
By IRVINE, Calif., Jan. 23, 2013 /PRNewswire-FirstCall/ -- Western Digital(®) Corp. (NASDAQ: WDC) today reported revenue of $3.8 billion, hard-drive shipments of 59.2 million and net income of $335 million, or $1.36 per share for its second fiscal quarter ended Dec. 28, 2012. On a non-GAAP basis, net income was $513 million or $2.09 per share.(1) In the year-ago quarter, the company reported revenue of $2.0 billion, net income of $145 million, or $0.61 per share, and shipped 28.5 million hard drives. Non-GAAP net income in the year-ago quarter was $358 million, or $1.51 per share.(2)
The company generated $772 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $3.8 billion. During the quarter, the company utilized $146 million to buy back 4.2 million shares of common stock. On Dec. 3, the company declared a $0.25 per common share dividend, which was paid on Dec. 26.
"We are pleased with our December quarter results, reflecting outstanding execution and value creation by our HGST and WD(®) teams," said Steve Milligan, president and chief executive officer. "In an environment marked by continued macroeconomic uncertainty, soft PC demand and inventory rebalancing by our customers, we continue to manage our business by focusing on those variables that we control, allowing us to generate better than expected revenue and profitability and strong cash generation."
The investment community conference call to discuss these results will be broadcast live over the Internet today at 3 p.m. Pacific/6 p.m. Eastern. The live and archived conference call webcast can be accessed online at investor.wdc.com. The telephone replay number is 888-568-0860 in the U.S. or +1-402-998-0245 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. These forward-looking statements include statements concerning the company's revenue, profitability and cash generation. 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 recent Form 10-Q filed with the SEC on Nov. 2, 2012, 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. Other marks may be mentioned herein that belong to other companies.
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(1)Non-GAAP net income for the second quarter fiscal 2013 consists of GAAP net income of $335 million plus $88 million for a tax-related matter, $49 million of amortization of intangibles related to the acquisition of HGST and $41 million related to employee termination benefits and other charges. Non-GAAP earnings per share of $2.09 for the second quarter is calculated by using the same 246 million diluted shares as is used for GAAP earnings per share. The tax effect of the employee termination benefits and other charges was not material.
(2)Non-GAAP net income for the second quarter fiscal 2012 consists of GAAP net income of $145 million plus $199 million for charges and expenses related to the flooding and $14 million of acquisition-related expenses. Non-GAAP earnings per share of $1.51 for the second 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)
Dec. 28, Jun. 29,
2012 2012
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $3,816 $3,208
Accounts
receivable, net 1,732 2,364
Inventories 1,204 1,210
Other 423 359
Total current
assets 7,175 7,141
Property, plant and equipment, net 3,938 4,067
Goodwill 1,907 1,975
Other intangible assets, net 709 799
Other assets 200 224
--- ---
Total assets $13,929 $14,206
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,185 $2,773
Accrued expenses 722 858
Accrued warranty 131 171
Current portion of
long-term debt 288 230
Total current
liabilities 3,326 4,032
Long-term debt 1,840 1,955
Other liabilities 516 550
--- ---
Total
liabilities 5,682 6,537
Total shareholders' equity 8,247 7,669
----- -----
Total
liabilities
and
shareholders'
equity $13,929 $14,206
======= =======
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
Dec. 28, Dec. 30, Dec. 28, Dec. 30,
2012 2011 2012 2011
---- ---- ---- ----
Revenue, net $3,824 $1,995 $7,859 $4,689
Cost of revenue 2,765 1,347 5,607 3,500
----- ----- ----- -----
Gross profit 1,059 648 2,252 1,189
Operating expenses:
Research and
development 378 191 774 384
Selling, general and
administrative 162 96 341 185
Employee termination
benefits and other
charges 41 ? 67 ?
Charges related
to flooding ? 199 ? 199
Total operating
expenses 581 486 1,182 768
--- --- ----- ---
Operating income 478 162 1,070 421
Net interest and
other (10) (2) (24) (3)
Income before income taxes 468 160 1,046 418
Income tax
provision 133 15 192 34
Net income $335 $145 $854 $384
==== ==== ==== ====
Income per common share:
Basic $1.38 $0.62 $3.50 $1.64
Diluted $1.36 $0.61 $3.43 $1.62
Weighted average shares outstanding:
Basic 242 234 244 234
Diluted 246 237 249 237
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
Dec. 28, Dec. 30, Dec. 28, Dec. 30,
2012 2011 2012 2011
---- ---- ---- ----
Cash flows from operating activities
Net income $335 $145 $854 $384
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and
amortization 309 140 622 298
Stock-based
compensation 32 24 71 41
Deferred income
taxes 80 9 68 18
Non-cash portion
of employee
termination
benefits and other
charges
15 ? 15 ?
Non-cash portion
of charges related
to flooding ? 109 ? 109
Changes in
operating assets
and liabilities,
net 1 (49) 78 (120)
Net cash
provided by
operating
activities 772 378 1,708 730
--- --- ----- ---
Cash flows from investing activities
Purchases of property, plant and equipment (246) (120) (628) (253)
Acquisitions, net of cash acquired (18) ? (27) ?
Purchase of investment (15) ? (15) ?
--- --- --- ---
Net cash used
in investing
activities (279) (120) (670) (253)
---- ---- ---- ----
Cash flows from financing activities
Employee stock plans, net 53 22 113 20
Repurchases of common stock (146) ? (364) ?
Dividends to shareholders (121) ? (121) ?
Repayment of debt ? (31) (58) (63)
--- --- --- ---
Net cash used
in financing
activities (214) (9) (430) (43)
---- --- ---- ---
Net increase in cash and cash equivalents 279 249 608 434
Cash and cash equivalents, beginning of period 3,537 3,675 3,208 3,490
----- ----- ----- -----
Cash and cash equivalents, end of period $3,816 $3,924 $3,816 $3,924
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SOURCE Western Digital Corp.
