Stitch,
The news release:
SCOTTS VALLEY, CALIFORNIA. . . . Seagate Technology, Inc.
(NYSE:SEG) today reported revenue of $1.805 billion and net
income and diluted net income per share of $82 million and $0.34,
respectively, for its quarter ended April 2, 1999. The results
for the quarter include a charge to operations of $60 million
related to the restructuring of certain worldwide operations
including closure of the Company's microelectronics manufacturing
facility in Livingston, Scotland, the discontinuance of the
Company's recording head suspension business, the consolidation of
global customer service facilities and additional actions necessary
to further increase the productivity and efficiency of worldwide
operations. Excluding the restructuring charge of $60 million and
the related tax effects, the pro forma net income per share for
the three months ended April 2, 1999 would have been $0.49.
For the year-ago quarter ended April 3, 1998, revenue, net loss and
net loss per share were $1.675 billion, $129 million and $0.53,
respectively. Excluding the restructuring charge of $142 million
and special charges of $24 million, and the tax effects related to
these items, the pro forma net loss per share for the three months
ended April 3, 1998 would have been $0.10.
For the immediately preceding quarter ended January 1, 1999,
revenue was $1.801 billion with net income and diluted net income
per share of $104 million and $0.42, respectively. For the nine
months ended April 2, 1999, revenue was $5.159 billion and net
income and diluted net income per share were $157 million and
$0.63, respectively. Excluding the restructuring charge of $60
million, the $78 million charge in connection with an amendment to
the purchase agreement for the August 1997 acquisition of Quinta
Corporation and the $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
per share for the nine months ended April 2, 1999 would have been
$1.09. This compares with revenue, net loss and net loss per share
of $5.244 billion, $552 million and $2.27, respectively, for the
nine months ended April 3, 1998. Excluding the restructuring
charges of $347 million, the $216 million in-process research and
development write-off in connection with the acquisition of Quinta
Corporation, the $76 million charge for mark-to-market adjustments
on certain of the Company's foreign currency forward exchange
contracts, special charges of $83 million, the $22 million
reduction in the previously settled Amstrad litigation, and the tax
effects related to these items, the pro forma net loss per share
would have been $0.10.
The Company has filed a registration statement with the Securities
and Exchange Commission ("SEC") related to the proposed merger of
the Network & Storage Management Group of its Seagate Software,
Inc. subsidiary with Veritas Software Corporation. The Company is
currently in the process of responding to comments received from
the SEC related to the registration statement. The SEC comments
address various matters including the accounting treatment for the
Company's acquisition of Quinta Corporation in August 1997. These
matters include the amount of the in-process research and
development write-off and the period in which the Company should
recognize contingent payments to current and former
employee/shareholders of Quinta. Until the SEC's comments have
been resolved Seagate will not be able to quantify the impact, if
any, on the Company's financial statements. However, any such
adjustments would not affect the Company's cash or liquidity
position. The Company currently estimates consummating the Veritas
merger in mid-May.
Seagate is changing its method of doing business with its North
American distributors. In the future, sales to North American
distributors will be on a consignment basis. Generally speaking,
this change will delay Seagate's revenue recognition until the
product is sold by the distributor. The Company expects
substantially all inventory of Seagate products held by its North
American distributors will be owned by Seagate as of the end of
June 1999. The transition to this new method of doing business
and the delay in the timing of revenue recognition will result in
lower revenue from distribution for the fourth quarter of fiscal
1999 than would have been recognized using the Company's former
method.
During the quarter ended April 2, 1999, the Company acquired
approximately 23 million shares of its common stock for
approximately $742 million under the June 1997 stock repurchase
program as amended in February 1999. |
