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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 27, 2000
WESTERN DIGITAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 001-08703 95-264-7125
(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
8105 Irvine Center Drive
Irvine, California 92618
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 932-5000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS.
On April 27, 2000, Western Digital Corporation issued a press release
announcing its third quarter results and reporting revenues of $516.6 million
and a net loss before nonrecurring items of $22.6 million, or $.17 per share for
its third quarter ended March 31, 2000.
Attached hereto as Exhibit 99.1 is the copy of the April 27, 2000, press
release which is incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
99.1 Press Release dated April 27, 2000, announcing Western Digital
Corporation's third quarter results and reporting revenues of
$516.6 million and a net loss before nonrecurring items of
$22.6 million, or $.17 per share for its third quarter ended
March 31, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: May 4, 2000
WESTERN DIGITAL CORPORATION
By: /s/ Michael A. Cornelius
---------------------------------
Michael A. Cornelius
Vice President, Law and
Administration and Secretary
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EXHIBIT 99.1
Investor Analyst Contact:
Robert J. Blair
Western Digital Corporation
949.932.7834
[email protected]
Media Contact:
Steve Shattuck
Western Digital Corporation
949.932.5178
[email protected]
FOR IMMEDIATE RELEASE:
WESTERN DIGITAL ANNOUNCES NARROWER OPERATING LOSS FOR THIRD
QUARTER BASED ON SUSTAINED IMPROVEMENTS IN DESKTOP HDD BUSINESS
IRVINE, Calif. - April 27, 2000 - Western Digital Corporation (NYSE:WDC) today
reported revenues of $516.6 million and a net loss before nonrecurring items of
$22.6 million, or $.17 per share, for its fiscal quarter ended March 31, 2000.
The total net loss for the quarter was $70.7 million, or $.53 per share, and
included net restructuring and special charges of $62.8 million ($34.8 million
of which were included in cost of sales) related primarily to the Company's
previously announced plans to exit the enterprise hard drive market, and also
included a $14.7 million gain on the disposition of certain investment
securities. In the year-ago period, the Company reported a net loss before
nonrecurring charges of $61.3 million, or $.68 per share. The total net loss for
the year-ago period was $114.3 million, or $1.27 per share, and included special
charges of $12.0 million for in-process research and development in connection
with an acquisition and $41.0 million of restructuring charges resulting
primarily from the consolidation of the Company's desktop and enterprise
manufacturing facilities and operations.
Matt Massengill, president and chief executive officer, stated: "Our third
quarter performance sustains the ongoing recovery in our core hard drive
business and attests to the stable pricing environment and better than
anticipated demand in what is typically one of the industry's softer periods.
Our improved gross margin before nonrecurring items of 9% is very
encouraging--but by no means satisfactory. We are committed to continue closing
the gap in our financial results by earning back share in the desktop HDD market
through consistent performance, with time-to-market, industry-leading quality,
and an expanded product offering. We plan to achieve additional efficiencies and
cost reductions of a non-personnel nature through our single focus in the hard
drive business on the personal storage markets, continued effective management
of operating expenses and effective partnering with our strategic suppliers.
Improvements in the core drive business will be coupled with continued
investments in our new ventures to help shape the Western Digital business model
for the long term."
Massengill noted that Connex, Western Digital's subsidiary with solutions
targeted at the emerging network attached storage and storage area network
markets, met its plan for initial shipments of its N3000 networked attached
storage solution in the March quarter. He added that the SageTree subsidiary,
focused on data warehousing software and services, is expected to generate its
first revenue in the fourth fiscal quarter.
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"The customer reception of the Connex N3000(TM) in the mid-range of the NAS
market has been very positive. We are finding product feature set and
performance to be the primary buying-decision factors in this part of the NAS
market, so we couldn't be more pleased with our positioning here. Connex is on
target to make a meaningful revenue contribution in the second half of the
calendar year."
For the first nine months of fiscal year 2000, the Company reported revenues of
$1.5 billion and a net loss before nonrecurring items of $215.5 million, or $
1.84 per share. The total net loss for the fiscal 2000 period was $192.2
million, or $1.64 per share, and included net restructuring and special charges
of $158.3 million ($72.5 million of which were included in cost of sales), the
$14.7 million gain on disposition of investment securities and $166.9 million of
extraordinary gains for the redemption of a portion of the Company's convertible
debt. For the first nine months of fiscal year 1999, the Company reported
revenues of $2.1 billion and a net loss before nonrecurring charges of $253.7
million, or $2.85 per share. The total net loss for the fiscal 1999 period was
$391.2 million, or $4.39 per share, and included restructuring and special
charges of approximately $137.5 million ($77.0 million of which were included in
cost of sales, $12.0 million of which were included in research and development
expenses, and $7.5 million of which were included in SG&A).
ABOUT WESTERN DIGITAL
One of the data storage industry's longtime leaders, Western Digital Corporation
is leveraging its core strengths to become a leading Internet solutions company,
providing 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 designs
analytical data warehousing tools to help manufacturers manage quality and
quality-related business decisions throughout the entire 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 http://www.westerndigital.com.
This release contains forward-looking statements, including statements relating
to the Company's market share in the desktop HDD market, efficiencies in the its
hard drive business, investments in new business ventures, and future revenue
from the Company's Connex and SageTree subsidiaries. The forward-looking
statements are based on current management expectations, and actual results may
differ materially as a result of several factors, including: market acceptance
for the Company's products; the Company's ability to execute future production
ramps and utilize manufacturing assets efficiently; changes in product and
customer mix; pricing trends; actions by competitors; successful entry into new
markets by the Company and its subsidiaries; and other factors discussed in the
Company's recent SEC filings. The Company undertakes no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.
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WESTERN DIGITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
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<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------------- ------------------------
MAR. 31, MAR. 27, DEC. 31, MAR. 31, MAR. 27,
2000 1999 1999 2000 1999
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<S> <C> <C> <C> <C> <C>
Revenues, net ......................................... $516,587 $ 668,456 $560,174 $1,483,718 $2,057,904
Costs and expenses:
Cost of revenues ............................... 505,003 628,592 539,932 1,517,235 2,081,625
Research and development ....................... 33,770 62,699 44,083 127,996 164,983
Selling, general and administrative ............ 33,970 46,210 39,070 116,862 151,361
Restructuring provision ........................ 28,002 41,000 25,535 85,837 41,000
-------- --------- -------- ---------- ----------
Total costs and expenses ................. 600,745 778,501 648,620 1,847,930 2,438,969
-------- --------- -------- ---------- ----------
Operating loss ........................................ (84,158) (110,045) (88,446) (364,212) (381,065)
Net interest and other income (expense) ............... 13,489 (4,248) (3,028) 5,132 (10,139)
-------- --------- -------- ---------- ----------
Loss before income taxes and
extraordinary item ............................. (70,669) (114,293) (91,474) (359,080) (391,204)
Provision for income taxes ............................ -- -- -- -- --
-------- --------- -------- ---------- ----------
Loss before extraordinary item ........................ (70,669) (114,293) (91,474) (359,080) (391,204)
Extraordinary gain from redemption of
debentures ..................................... -- -- 76,277 166,899 --
-------- --------- -------- ---------- ----------
Net loss .............................................. $(70,669) $(114,293) $(15,197) $ (192,181) $ (391,204)
======== ========= ======== ========== ==========
Basic and diluted income (loss) per common share:
Loss per common share before
extraordinary item ............................. $ (.53) $ (1.27) $ (.76) $ (3.07) $ (4.39)
Extraordinary gain .................................... $-- $-- $ .63 $ 1.43 $--
-------- --------- -------- ---------- ----------
Loss per common share ................................. $ (.53) $ (1.27) $ (.13) $ (1.64) $ (4.39)
======== ========= ======== ========== ==========
Common shares used in computing
per share amounts ..................................... 133,903 89,883 121,128 116,983 89,105
======== ========= ======== ========== ==========
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WESTERN DIGITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
(UNAUDITED)
MAR. 31, JULY 3,
2000 1999
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ASSETS
Current assets:
Cash and cash equivalents ................................ $ 202,087 $ 226,147
Accounts receivable, net ................................. 177,455 273,435
Inventories .............................................. 98,208 144,093
Prepaid expenses & other current assets .................. 56,068 81,853
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Total current assets ............................... 533,818 725,528
Property and equipment, net ..................................... 108,886 237,939
Intangible and other assets, net ................................ 47,491 58,935
--------- ----------
Total assets ....................................... $ 690,195 $1,022,402
========= ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable ......................................... $ 290,330 $ 335,907
Accrued expenses ......................................... 234,713 252,791
Current portion of long-term debt ........................ -- 10,000
--------- ----------
Total current liabilities .......................... 525,043 598,698
Long-term debt .................................................. 222,562 534,144
Other liabilities ............................................... 51,393 43,350
Shareholders' deficit:
Common stock, $.01 par value ............................. 1,492 1,019
Additional paid-in capital ............................... 351,440 142,155
Accumulated other comprehensive income (loss) ............ 25,287 (2,123)
Accumulated deficit ...................................... (487,022) (294,841)
--------- ----------
Total shareholders' deficit ........................ (108,803) (153,790)
--------- ----------
Total liabilities and shareholders' deficit ........ $ 690,195 $1,022,402
========= ==========
</TABLE>
Note: Certain July 3, 1999 amounts have been reclassified to conform to
the March 31, 2000 presentation.
