Seagate's Strong Q2 Results Reflect Ongoing Operational Improvements; Company Continues to Implement New Business Model
SCOTTS VALLEY, CALIF. (Jan. 12) BUSINESS WIRE -Jan. 12, 1999--Seagate Technology, Inc. (NYSE:SEG) today reported revenue of $1.801 billion and net income and diluted net income per share of $104 million and $0.42, respectively, for its quarter ended January 1, 1999.
Stephen Luczo, Seagate's President and Chief Executive Officer said, "We had an excellent quarter with strong revenue growth and improving gross and operating margins in the disc drive, tape and software businesses. The Company's total revenue for the quarter represented a 16% increase over the prior quarter, with gross margins of 23.8%, up 3.1 percentage points from the prior quarter. In addition, Seagate's cash position increased to $2.2 billion, which is an increase of $345 million from last quarter. We also posted significant improvements in earnings per share, inventory turns and other financial and operating metrics.
"We believe that this performance is directly related to the actions we have taken over the last year to increase our productivity and improve the competitiveness of our products. Most important, the performance is a reflection of the outstanding talent, dedication and effort put forth by all of Seagate's employees throughout the world.
"We are encouraged by the effectiveness of the programs implemented to date and are anticipating additional benefits by the end of the calendar year from our three major initiatives: Time to Market Leadership, Six Sigma and Supply Chain Management."
For the quarter ended January 2, 1998, revenue, net loss and net loss per share were $1.673 billion, $183 million and $0.75, respectively. Excluding the restructuring charge of $205 million, special charges of $72 million and a $22 million reduction in the $153 million charge previously recorded for settlement of the Amstrad litigation, and the tax effects related to these items, the pro forma net loss per share for the quarter ended January 2, 1998 would have been $0.08. For the immediately preceding quarter ended October 2, 1998, revenue was $1.553 billion with a net loss and net loss per share of $30 million and $0.12, respectively. Excluding the $77 million charge in connection with an amendment to the purchase agreement for the August 1997 acquisition of Quinta Corporation and a $7 million charge related to the separation agreement with the Company's former Chief Executive Officer and the tax effects related to these items, the pro forma net income and diluted net income per share would have been $46 million and $0.19, respectively.
For the six months ended January 1, 1999, revenue was $3.354 billion and net income and diluted net income per share were $74 million and $0.30, respectively. This compares with revenue, net loss and net loss per share of $3.569 billion, $423 million and $1.74, respectively, for the six months ended January 2, 1998.
This release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, the implementation of ongoing operational improvements, the realization of anticipated benefits from the Company's Time to Market Leadership, Six Sigma and Supply Chain Management initiatives and other factors listed in the Company's SEC filings, including its Form 10-K, proxy statement and annual report and in its Form 10-Q filing for the period ended October 2, 1998. Seagate undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.
Seagate Technology, Inc. is a leading provider of technology and products enabling people to store, access, and manage information. The Company is committed to providing best-in-class products to help people get information when, where and how they want it. Seagate is the world's largest manufacturer of disc drives, magnetic discs and read-write heads, an innovator in tape drives, and a leading developer of Enterprise Information Management software. Seagate can be found around the globe and at seagate.com . For automated news, stock and financial information by phone, dial toll-free 877-SEG-NYSE. Outside the U.S. and Canada, dial 760-704-4368.
SEAGATE TECHNOLOGY, INC.
FINANCIAL HIGHLIGHTS
(In Millions Except Per Share and Percent Data)
Three Months Ended Six Months Ended
January 1, January 2, January 1, January 2,
1999 1998 1999 1998
Income Statement
Revenue $ 1,801 $ 1,673 $ 3,354 $ 3,569
Gross profit 428 191 749 487
As a percent
of revenue 23.8% 11.4% 22.3% 13.6%
Income (loss) before
income taxes $ 145 $ (283) $ 124 $ (533)
Provision (benefit)
for income taxes 41 (100) 50 (110)
Net income loss:
Amount $ 104 $ (183) $ 74 $ (423)
As a percent
of revenue 5.8% (10.9%) 2.2% (11.9%)
Net income loss
per share:
Basic $ 0.43 $ (0.75) $ 0.30 $ (1.74)
Diluted 0.42 (0.75) 0.30 (1.74)
Number of shares
used in per share
computations:
Basic 244.9 243.1 245.0 243.8
Diluted 250.4 243.1 249.1 243.8
Three Months Ended
January 1, January 2,
1999 1998
Balance Sheet
Cash, Cash Equivalents
and Short-Term
Investments $ 2,217 $ 1,650
Inventories 410 761
Inventory Turns 13.4 7.8 |
