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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Yogi - Paul who wrote (6033)	4/9/1999 9:20:00 PM
From: Mark Oliver	Respond to of 9256

Western Digital, Komag Complete Transaction for Disk Media Manufacturing: Komag Acquires WD Media Business; Volume Purchase Agreement Signed PR Newswire - April 09, 1999 16:46 IRVINE, Calif., April 9 /PRNewswire/ -- Western Digital Corporation (NYSE: WDC) today announced it has completed the sale of its disk media business to Komag, Incorporated (Nasdaq: KMAG) for approximately 10.8 million shares of Komag stock, $30.1 million in a three-year note, and cash consideration of $1.6 million. In addition, Komag has assumed certain liabilities, mainly leases related to production equipment and facilities. Terms of the agreement include a three-year volume purchase agreement under which Western Digital will buy a substantial portion of its media from Komag. The Komag shares issued to Western Digital can be resold in specified increments over a 3 1/2 year period. The three-year note to Western Digital includes a forgiveness provision based on the performance of Komag's stock. No impact on Western Digital's statement of operations is expected if the note is forgiven. Western Digital indicated that as a result of the transaction it expects to take a charge of approximately $20 million in its June quarter, including $3 million in cash. As part of the transaction and the consolidation of the two companies' media operations, approximately 550 of the 1,100 positions that existed in the acquired disk media operation are being eliminated. This release contains forward-looking statements, including statements relating to: future purchases by Western Digital of media from Komag; the impact on Western Digital's statement of operations for forgiveness of the note issued in the transaction; and the charge that Western Digital will take in its June quarter as a result of the transaction. The forward looking statements are based on current expectations of Western Digital and Komag, respectively, and actual results may differ materially as a result of several factors, including: future product development by Komag; qualification of the Komag products by Western Digital; any changes in the accounting rules relating to the appropriate accounting for forgiveness of the note issued in the transaction; the extent to which actual charges in the June quarter may vary from current estimates of those charges; and other factors discussed in Western Digital's Form 10-K for its fiscal year 1998, its recent 10-Q's, and its other SEC filings. Western Digital does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements. SOURCE Western Digital Corporation /CONTACT: Robert J. Blair of Western Digital Corporation, 212-867-4490, bob.blair@wdc.com/ /Company News On-Call: prnewswire.com or fax, 800-758-5804, ext. 963251/ /Web site: westerndigital.com

To: Yogi - Paul who wrote (6033)	4/9/1999 9:32:00 PM
From: Mark Oliver	Read Replies (1) \| Respond to of 9256

A while back, I posted a link to the RDRT thread where an analyst gave a run down on the main players in the storage sector. At the time, there was a comment about WDC which I thought interesting. Western Digital Corporation (3-H)- Over the past 18 months Western Digital struggled with its transition to MR-based products and, hence, fell behind in time to market and lost market share; however, the company has made meaningful strides toward regaining share with its recent product generations. It has been a longer workout period than we originally thought, although we are encouraged by improved industry conditions and Western Digital's improved operational status and execution of its road map. The key to Western Digital's return to pr ofitability is its ability to restore its positioning (including time to market) in its desktop business, as well as execution in and growth of its enterprise business and continued focus on improved asset management. We forecast a net loss per share of $0.72 for Western Digital for the March quarter, and expect that the company will come in line with (or potentially slightly beat) this estimate. At a recent industry conference, management reiterated its comfort with the consensus loss estimate of $0.67 per share from operations, despite the fact that units and revenues will probably be lighter than the company's original guidance--lower volumes are due to slower pulls from one major OEM customer during February, compounded by slightly slower distribution sell-through (flat, not down). Other than the one major OEM noted here, all other major OEM customers appear to be pulling to plan. Can we assume this "one major OEM" was Compaq? By the way we keep hearing rumblings at Compaq and little bad news from other vendors, that the major cause for concern this quarter might rest with poor sales by Compaq? I wonder if the lack of volume from AMD has had any effect to exasperate this? Anyway, here's the pre-announce earnings warning. Compaq Announces Preliminary First Quarter Results Business Wire - April 09, 1999 16:44 HOUSTON--(BUSINESS WIRE)--April 9, 1999--Compaq Computer Corporation (NYSE: CPQ) announced that, based on preliminary analysis of its results for the quarter ended March 31, 1999, it expects to report results below analysts' estimates. Based upon a $9.4 billion revenue estimate and a less favorable sales mix, the Company now expects to report a profit of approximately $.15 per share. "The quarter's shortfall reflects lower than anticipated market demand and increased competitive pricing in the commercial PC sector," said Earl Mason, Senior Vice President and Chief Financial Officer. These statements regarding estimated results are preliminary. The Company expects to announce its final results on April 21, 1999. Business Outlook "While market conditions will continue to be competitive, we fully intend to expand our business and grow market share profitably in 1999," said Eckhard Pfeiffer, President and Chief Executive Officer. "We will roll out our enterprise strategy next week as 4,500 customers join us in Houston for Compaq's Innovate 99. The Company will continue its aggressive drive of reduction of cost and operating expenses in the face of a very competitive market." Company Background Compaq Computer Corporation, a Fortune Global 100 company, is the second largest computer company in the world and the largest global supplier of computer systems. Compaq develops and markets hardware, software, solutions, and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, networking and communication products, commercial desktop and portable products and consumer PCs. The Company is an industry leader in environmentally friendly programs and business practices. Compaq products are sold and supported in more than 100 countries through a network of authorized Compaq marketing partners. Customer support and information about Compaq and its products are available at compaq.com or by calling 1-800-OK-COMPAQ. Product information and reseller locations are available by calling 1-800-345-1518. This release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include the implementation of operations and systems improvements, particularly those associated with the Optimized Distribution Model; the operational integration associated with the acquisition of Digital Equipment Corporation; inventory risks due to shifts in market demand; timely development, production, continued competitive factors and pricing pressures; market responses to pricing actions and promotional programs; acceptance of the products; and changes in product mix. Further information on the factors that could affect the Company's financial results are included in its SEC filings, including the Form 10-K for the year ended December 31, 1998. Compaq, Registered U.S. Patent and Trademark Office. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. More financial information on Compaq is available at compaq.com. CONTACT: Compaq Computer Corporation, Houston Jim Finlaw, 281/514-6137 jim.finlaw@compaq.com or Investor Relations, 281/514-9549 Investor Relations Fax, 800/433-2391