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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): January 13, 2000
WESTERN DIGITAL CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 001-08703 95-264-7125
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
8105 Irvine Center Drive
Irvine, California 92618
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 932-5000
Not Applicable
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(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 January 13, 2000, Western Digital Corporation issued a press release
announcing the appointment of Matthew E. Massengill as President and Chief
Executive Officer.
On January 19, 2000, Western Digital Corporation issued a press release
announcing it will exit the enterprise hard drive business and shift its full
strategic focus and resources in the enterprise space to Internet-related data
content management systems and management software. The press release also
announced that the Company's operating loss for the fiscal 2000 second quarter,
ended December 31, 1999, was significantly lower than the Wall Street analysts'
consensus estimates of approximately $100 million, before previously-announced
special charges.
Attached hereto as Exhibits 99.1 and 99.2, respectively, are copies of
the January 13, 2000, and January 19, 2000, press releases, which are
incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibit Description
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99.1 Press Release dated January 13, 2000, regarding Western Digital
Corporation's announcement of the appointment of Matthew E.
Massengill as President and Chief Executive Officer.
99.2 Press Release dated January 19, 2000, regarding Western Digital
Corporation's announcement that it will exit the enterprise hard
drive business and that the Company's operating loss for the fiscal
2000 second quarter, ended December 31, 1999, was significantly
lower than the Wall Street analysts' consensus estimates of
approximately $100 million, before previously-announced special
charges.
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: January 19, 2000
WESTERN DIGITAL CORPORATION
By: /s/ Michael A. Cornelius
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Michael A. Cornelius
Vice President, Law and
Administration and Secretary
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EXHIBIT 99.1
For Immediate Release
MATT MASSENGILL APPOINTED PRESIDENT, CEO OF WESTERN DIGITAL AND ELECTED TO
BOARD; TOM PARDUN APPOINTED CHAIRMAN OF THE BOARD; CHUCK HAGGERTY RETIRING
IRVINE, CA. - January 13, 2000- The Board of Directors of Western Digital
Corporation (NYSE:WDC) has appointed Matthew E. Massengill president and chief
executive officer and elected him to the board, effective immediately.
Massengill, 38, has been with the California-based manufacturer of storage
solutions for 14 years, and most recently has been serving as chief operating
officer. Thomas E. Pardun, president of MediaOne International-Asia/Pacific and
a Western Digital director since 1993, was elected chairman of the board of
directors. Pardun, 56, will become chairman of the Western Digital board upon
completion of the merger between AT&T Corp. and MediaOne Group Inc. Chuck
Haggerty, 58, has resigned as president and chief executive officer and will
retire as chairman.
During 1999, Massengill led efforts to stabilize the Company's core hard drive
business through improved new product performance and manufacturing efficiencies
and has been leading Western Digital's repositioning as a data/content
storage-management company in both PC and non-PC markets. In 1999, the Company
returned to time-to- market leadership in its core desktop hard drive business
and removed $150 million in annualized costs from its manufacturing operations.
WD also recently launched new businesses in networked attached storage through
its Connex subsidiary, in home entertainment storage with its WD Performer
drives, and in data warehousing through its SageTree subsidiary.
Pardun, who will retire from MediaOne when it completes its merger with ATT, has
a 35-year career in the media, telecommunications and computer industries. Prior
to his current position, Pardun was president and chief executive officer of US
WEST Multimedia Communications (MediaOne became a separate company from US WEST
in 1998). During his 12 years at US WEST/MediaOne, Pardun held senior management
positions including vice president and general manager of business and
government services and vice president of marketing and planning for US WEST
Communications. Earlier in his career, Pardun was a division and group president
of Sprint Communications and began his career with IBM where he spent 19 years
in various marketing and product management assignments.
Western Digital's search for a new chief executive began in mid-1999 when
Haggerty announced his plan to retire before the end of the current fiscal year.
He has served Western Digital for more than seven years and has been in the high
technology industry for 36 years.
Pardun said, "Our search committee found no one in the company or in the larger
business community with talents, experience, enthusiasm and knowledge to equal
those of Matt Massengill. Matt has great energy, operating experience and a
clear vision of the future for Western Digital. He is clearly the right leader
for this company as we move into the 21st century."
"Western Digital has core technology, intellectual property and brand equity
that are enabling us to expand our market reach and re-invent the company," said
Massengill. "In our traditional hard drive markets, where the landscape has
changed dramatically, we have taken steps to establish WD as the low-cost
provider of hard drives. Leveraging our core strengths, we are entering new
storage-related markets with higher value propositions designed to greatly
enhance the WD business model."
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"I am delighted to be leading this great company at such an exciting juncture
and working in partnership with Tom Pardun to realize its potential," said
Massengill. "I have known and worked with Tom throughout his six years as a
Western Digital director and look forward to his counsel as chairman."
Massengill joined Western Digital in 1985 as a product engineer. He held various
engineering and marketing positions in the company's desktop hard drive business
from the late 1980's to the mid 1990's when Western Digital grew from a small
HDD supplier to become one of the largest global supplier of hard drives in the
desktop personal computer market.
He led the Enterprise Storage Group in 1997 as senior vice president and general
manager, returning to the company's headquarters to lead the Drive Products
Division when the company's desktop and enterprise-class hard drive operations
were combined in 1998. Massengill was appointed executive vice president,
worldwide operations and geographies in early 1999 and was subsequently named
co-chief operating officer in August 1999. He was named chief operating officer
in October.
Before joining Western Digital, Massengill served Ford Aerospace and
Communications Corporation for three years as a research engineer developing
materials and devices for infrared detectors and imaging systems. He received
his degree in engineering from Purdue University in 1983, and in 1988 was
honored by Purdue with its Outstanding Engineering Alumni award.
Western Digital Corporation is a leading manufacturer of hard drives used for
information storage in desktop computers, servers, workstations and home
entertainment electronic products. Through its Connex subsidiary, the company
serves users of network-attached storage systems and enterprise-wide storage
area networks. The wholly-owned SageTree develops data warehouses for use in
quality information systems and a variety of other applications requiring
multiple-user access to vast stores of information. Western Digital was founded
in 1970 and has long been noted for its storage and end-market systems-level
design knowledge. The company's 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.
Company Contact:
Robert J. Blair
914-632-3919
[email protected]
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EXHIBIT 99.2
Contacts:
Brenda Bennett
Western Digital Corporation
425.869.6467
[email protected]
Bob Blair
949-932-7834
[email protected]
FOR IMMEDIATE RELEASE:
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WESTERN DIGITAL SHIFTS FULL ENTERPRISE FOCUS TO DATA CONTENT MANAGEMENT SYSTEMS
AND SOFTWARE; EXITING ENTERPRISE HARD DRIVE BUSINESS; PREANNOUNCES THAT DECEMBER
QUARTER RESULTS WILL BE SIGNIFICANTLY BETTER THAN CONSENSUS
DESKTOP HDD BUSINESS INTACT; ROCHESTER, MINNESOTA
ENTERPRISE HDD DESIGN CENTER CLOSING
IRVINE, CA. -- January 19, 2000 -- Western Digital Corporation (NYSE:WDC) today
announced that it will exit the enterprise hard drive business and shift its
full strategic focus and resources in the enterprise space to Internet-related
data content management systems and management software. Western Digital's
Rochester, Minnesota-based enterprise hard drive design center will cease
operations, resulting in a special charge against operations in the company's
2000 fiscal third quarter, which ends March 31.
The Company also announced that its operating loss for the 2000 fiscal
second quarter, which ended December 31, was significantly lower than the Wall
Street analysts' consensus estimates of approximately $100 million, before
previously-announced special charges. Western Digital attributed the better
operating performance to improved pricing and demand conditions
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in the desktop hard drive business, improved operational efficiencies, cost
structure reductions, and the Company's successful implementation of a desktop
product recall begun in September. The Company will formally announce its
December quarter results on January 25.
"We are exiting the enterprise hard drive business because our share
has been declining in a market that is getting increasingly competitive with
fewer suppliers required, yet which demands continued major investments to be a
dominant player, " said Matt Massengill, Western Digital's president and chief
executive officer, who emphasized that Western Digital would remain a major
supplier of desktop and home entertainment hard drives. "Coupled with recent
indications from two major enterprise- class OEM customers that they are
reducing their number of enterprise HDD suppliers and our own lack of execution
in the enterprise business over the last year, these trends made it clear that
this was the right decision now for Western Digital."
Massengill indicated that WD would fully support its enterprise drive
installed-base customers throughout the products' life cycle and that the
Company expects to sell its remaining enterprise drives through the balance of
the calendar year. In the fiscal year ending July 3, 1999, the enterprise drives
product line accounted for approximately 11% of Western Digital's $2.8 billion
in revenue.
"The greater promise for Western Digital in the enterprise market,"
said Massengill, "is to claim more of the opportunity created by the Internet in
emerging high-growth markets without established players, in managing the
content, flow and security of the growing amounts of stored data. We have the
talent, intellectual property, heritage of innovation, and the vision to assert
a much broader role for WD in storage on the Internet. Our first such initiative
is through Connex, a wholly-owned subsidiary, which expects to begin shipments
of its first product into
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the NAS/SAN market later this month. Another subsidiary, SageTree , is focused
on data warehousing software and services. This is the direction we've set for
the company in the enterprise market, and subsequent initiatives and technology
investments will reflect this strategy."
Western Digital opened its Rochester operation in December of 1994, to
be run as a separate business unit focused on the enterprise hard drive market.
The Rochester facility was transformed into a Design Center last year. From
initial product launch , the Rochester group gained a noteworthy market share of
up to 8% and brought it first products to market within just 18 months of its
opening. However, the enterprise hard drive market is dominated by two players,
and improved execution by the other second tier players has diluted margins and
made the market more competitive and price sensitive. Western Digital currently
employs approximately 420 people in its Rochester enterprise drive operation.
These employees will be given consideration for job openings at WD operations in
San Jose and Irvine, California, although it is anticipated the vast majority
will be laid off and given severance and outplacement packages.
The Company also indicated it has signed a purchase agreement with the
Mayo Foundation for the sale of its Rochester research and development facility,
subject to Mayo Foundation's board of trustee approval at their scheduled
February meeting. The sale price of the facility is not being disclosed.
Massengill stated: "We are grateful to our WD Rochester people for
having made such an impressive early impact in serving this market and a gallant
effort to succeed as the space became more competitive. We also greatly
appreciate the support we have received from the greater Rochester community
over the last five years."
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Western Digital Corporation is a leading manufacturer of hard drives
used for information storage in desktop computers and home entertainment
electronic products. Long known for its involvement in hard drive interface
architecture, Western Digital created the Integrated Drive Electronics (IDE)
interface that became the personal computer hard drive interface standard in
1986. Through its Connex subsidiary, the company serves users of
network-attached storage systems and enterprise-wide storage area networks.
Western Digital was founded in 1970 and is well recognized for its storage and
end-market systems-level design knowledge. The company's products are marketed
to leading systems manufacturers and selected resellers under the Western
Digital brand name. Its home page can be found on the World Wide Web at
www.westerndigital.com.
This release contains forward-looking statements, including statements
relating to support of enterprise customers, future sales of enterprise drives,
shipments of the first Connex products, and future initiatives in the enterprise
market. The forward looking statements are based on current management
expectations, and actual results may differ materially as a result of several
factors, including: requirements of the Company's customers; overall supply and
customer demand in the hard drive industry; changes in customer order patterns;
business conditions and growth in the enterprise computing industry; successful
development and sale of Connex's first product for the networked attached
storage market; 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 is a registered trademark of Western Digital Corporation. All
other brand and product names mentioned herein are the property of their
respective companies.
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