Western Digital Announces Fourth Quarter Year End Results
IRVINE, Calif., July 27 /PRNewswire/ -- Western Digital Corporation (NYSE: WDC - news) today reported revenues of $473.9 million and a proforma net loss of $26.3 million, or $.19 per share, for its fourth quarter ended June 30, 2000. For the same period, on a GAAP basis, Western Digital reported net income of $4.2 million and earnings per share of $.03. The total results for the quarter included non-recurring benefits for tax and other accrual adjustments of $30.5 million, $11.0 million of which was included in selling, general and administrative expenses. In the year-ago period, the Company reported revenues of $709.3 million and a proforma net loss of $81.5 million, or $.90 per share. The total net loss for the year-ago period was $101.5 million, or $1.12 per share, and included a restructuring charge of approximately $20 million for the sale of the Company's media business.
Matt Massengill, president and chief executive officer, stated: ``Both our fourth quarter and year-over-year results reflect substantial progress at Western Digital in a challenging industry environment. Price competition in the June quarter was significant and the non-linear supply of microprocessors led to fewer desktop PCs being shipped in the quarter than otherwise would have been the case. Nevertheless, the reductions in operating expenses and manufacturing costs we implemented over the last year enabled us to mitigate our operating loss for the quarter. Thus far into the September quarter, we have seen signs of healthier demand as availability of microprocessors has improved and our recovery of business with major PC OEM customers continues, albeit at prices impacted by the June quarter activity.
``For the year, we are pleased with the significant progress made by the WD team on many fronts in the core HDD business,'' said Massengill, noting:
-- Closing the gap on competitive gross margin performance, moving from
negative gross margins in Q1 to near double-digit performance in the
second half of fiscal 2000;
-- Increased market share with major PC OEM customers, based on solid and
sustained time-to-market performance and supply chain management
expertise;
-- Technology leadership with time-to-market WD Caviar(TM) 7200 RPM hard
drives, including shipment of its first Ultra ATA/100-enabled 7200 RPM
hard drive in the June quarter. 7200 RPM hard drives accounted for 32%
of the company's units shipped in the fourth quarter, up from 20% in
the March quarter;
-- Reduction of nearly 30%, or $106 million, in operating expenses;
-- Successful consolidation of three manufacturing operations into a
single highly-efficient site in Kuala Lumpur, Malaysia; and
-- Improved asset management, including a combined 10-day decrease in
receivable and inventory days from the fourth quarter of 1999.
``We launched two new ventures in fiscal 2000 -- Connex and SageTree -- and leveraged our storage technology expertise into a leadership position in the emerging hard drive market for set-top boxes, home servers, television receivers, audio juke boxes and other consumer products. The selection of the WD Performer(TM) 15i hard drive by Microsoft WebTV Networks, Inc. for use in its Ultimate TV service was a major validation of WD as a player in this space,'' continued Massengill.
For fiscal year 2000, the Company reported revenues of $2.0 billion and a proforma net loss of $241.8 million, or $ 1.97 per share. The total net loss for fiscal 2000 was $188.0 million, or $1.53 per share, and included: restructuring and special charges of $158.3 million, of which $72.5 million was included in cost of sales; a $14.7 million gain on disposition of investment securities; $166.9 million of extraordinary gains for redemption of a portion of the Company's convertible debt; and $30.5 million of non-recurring benefits for tax and other accrual adjustments. For fiscal year 1999, the Company reported revenues of $2.8 billion and a proforma net loss of $335.2 million, or $3.75 per share. The total net loss for fiscal 1999 was $492.7 million, or $5.51 per share, and included restructuring and special charges of approximately $157.5 million ($77.0 million of which was included in cost of sales, $12.0 million of which was included in research and development expenses, and $7.5 million of which was included in SG&A).
About Western Digital
One of the data storage industry's longtime leaders, Western Digital Corporation has leveraged its core strengths in becoming a leading Internet solutions company. Western Digital provides services and products to manage, store and communicate both digital content and network intelligence. The Company remains an industry-leading designer and manufacturer of hard drives for desktop computers and home entertainment applications. Through its Connex subsidiary, Western Digital delivers enterprise-class storage functionality for the department and mid-sized business markets, including storage management software, network attached storage and storage area networks. The Company's SageTree subsidiary markets packaged analytical applications and professional services to help manufacturers manage quality and quality-related business decisions throughout the entire supply chain and product lifecycle.
Western Digital was founded in 1970. The Company's storage products are marketed to leading systems manufacturers and selected resellers under the Western Digital brand name. Its home page can be found at www.westerndigital.com.
WESTERN DIGITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
June 30, July 3, March 31, June 30, July 3,
2000 1999 2000 2000 1999
Revenues, net $473,862 $709,302 $516,587 $1,957,580 $2,767,206
Costs and expenses:
Cost of
revenues 432,275 688,429 505,003 1,949,511 2,770,054
Research and
development 35,202 52,003 33,770 163,198 216,986
Selling,
general and
administrative 21,461 44,597 33,970 138,323 195,958
Restructuring
charges -- 20,000 28,002 85,837 61,000
Total costs
and expenses 488,938 805,029 600,745 2,336,869 3,243,998
Operating loss (15,076) (95,727) (84,158) (379,289) (476,792)
Net interest and
other income
(expense) (259) (5,759) 13,489 4,874 (15,898)
Loss before income
taxes and
extraordinary
item (15,335) (101,486) (70,669) (374,415) (492,690)
Income tax
benefit 19,500 -- -- 19,500 --
Income (loss)
before
extraordinary
item 4,165 (101,486) (70,669) (354,915) (492,690)
Extraordinary
gain from
redemption
of debentures -- -- -- 166,899 --
Net income (loss) $4,165 $(101,486) $(70,669) $(188,016) $(492,690)
Basic and diluted
earnings (loss)
per common share:
Basic before
extraordinary item $.03 $(1.12) $(.53) $(2.89) $(5.51)
Extraordinary gain $-- $-- $-- $1.36 $--
Basic $.03 $(1.12) $(.53) $(1.53) $(5.51)
Diluted $.03 $(1.12) $(.53) $(1.53) $(5.51)
Common shares used
in computing per
share amounts:
Basic 139,547 90,596 133,903 122,624 89,478
Diluted 143,337 90,596 133,903 122,624 89,478
WESTERN DIGITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
June 30, July 3,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $184,021 $226,147
Accounts receivable, net 149,135 273,435
Inventories 84,546 144,093
Prepaid expenses and other
current assets 33,693 81,853
Total current assets 451,395 725,528
Property and equipment, net 98,952 237,939
Intangible and other assets, net 65,227 58,935
Total assets $615,574 $1,022,402
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $266,841 $335,907
Accrued expenses 178,225 248,201
Current portion of long-term debt -- 10,000
Total current liabilities 445,066 594,108
Long-term debt 225,496 534,144
Other liabilities 44,846 47,940
Minority interest 10,000 --
Shareholders' deficit:
Common stock, $.01 par value 1,436 906
Additional paid-in capital 371,587 140,145
Accumulated deficit (482,857) (294,841)
Total shareholders' deficit (109,834) (153,790)
Total liabilities and
shareholders' deficit $615,574 $1,022,402
Note: Certain July 3, 1999 amounts have been reclassified to conform to
the June 30, 2000 presentation.
SOURCE: Western Digital Corporation |
