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): October 24, 2013
Western Digital Corporation
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-08703 | 33-0956711 | ||
| (State or Other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 3355 Michelson Drive, Suite 100 Irvine, California |
92612 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(949) 672-7000
(Registrant’s Telephone Number, Including Area Code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 240.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On October 24, 2013, Western Digital Corporation (“Western Digital”) announced financial results for the first fiscal quarter ended September 27, 2013. A copy of the press release making this announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference. A copy of Western Digital’s Quarterly Fact Sheet for the first fiscal quarter ended September 27, 2013 is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| 99.1 | Press Release issued by Western Digital Corporation on October 24, 2013 announcing financial results for the first fiscal quarter ended September 27, 2013. | |
| 99.2 | First Quarter Fiscal Year 2014 Western Digital Corporation Quarterly Fact Sheet. | |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Western Digital Corporation | ||||||
| (Registrant) | ||||||
| By: | /s/ Michael C. Ray | |||||
| Date: October 24, 2013 | Michael C. Ray | |||||
| Senior Vice President, General Counsel and Secretary | ||||||
Exhibit 99.1
Company contacts:
Bob Blair
Western Digital Investor Relations
949.672.7834
robert.blair@wdc.com
Steve Shattuck
Western Digital Public Relations
949.672.7817
steve.shattuck@wdc.com
FOR IMMEDIATE RELEASE:
WESTERN DIGITAL ANNOUNCES Q1 REVENUE OF $3.8 BILLION AND
NON-GAAP NET INCOME OF $514 MILLION, OR $2.12 PER SHARE1
IRVINE, Calif. — Oct. 24, 2013 — Western Digital® Corp. (NASDAQ: WDC) today reported revenue of $3.8 billion and net income of $495 million, or $2.05 per share for its first fiscal quarter ended Sept. 27, 2013. On a non-GAAP basis, net income was $514 million or $2.12 per share.1 In the year-ago quarter, the company reported revenue of $4.0 billion, net income of $519 million, or $2.06 per share. Non-GAAP net income in the year-ago quarter was $594 million, or $2.36 per share.2
The company generated $680 million in cash from operations during the September quarter, ending with total cash and cash equivalents of $4.9 billion. During the quarter, the company utilized $150 million to buy back 2.3 million shares of common stock. On Sept. 19, the company declared a $0.25 per common share dividend, which was paid on Oct. 15.
“We continued to perform well in the September quarter as we remained focused on delivering value to our customers through differentiated and innovative storage solutions in all of our served markets,” said Steve Milligan, president and chief executive officer. “Our HGST and WD subsidiaries continued to execute very well. Outstanding linearity drove strong operating results, with gross margins above the midpoint of our model range and earnings per share well above the high end of our guidance. Longer term, we are very excited about our ability to enable the ongoing creation, storage and management of digital content by consumers and businesses.”
Western Digital Announces Q1 Revenue of $3.8 Billion and
Non-GAAP Net Income of $514 Million, or $2.12 Per Share
Page 2
The investment community conference call to discuss these results will be broadcast live over the Internet today at 3 p.m. Pacific/6 p.m. Eastern. The live and archived conference call webcast can be accessed online at investor.wdc.com. The telephone replay number is 1-800-685-6364 in the U.S. or +1-402-998-0553 for international callers.
About Western Digital
Western Digital Corp. (NASDAQ: WDC), Irvine, Calif., is a global provider of products and services that empower people to create, manage, experience and preserve digital content. Its subsidiaries design and manufacture storage devices, networking equipment and home entertainment products under the WD®, HGST and G-Technology brands. Visit the Investor section of the company’s website (www.westerndigital.com) to access a variety of financial and investor information.
###
Western Digital, WD and the WD logo are registered trademarks in the U.S. and other countries. HGST trademarks are intended and authorized for use only in countries and jurisdictions in which HGST has obtained the rights to use, market and advertise the brand. Other marks may be mentioned herein that belong to other companies.
| 1 | Non-GAAP net income for the first quarter fiscal 2014 consists of GAAP net income of $495 million plus $47 million of amortization of intangibles related to the acquisitions of HGST, sTec and VeloBit, $13 million of charges related to litigation, $13 million for acquisition-related expenses and $11 million related to fixed asset impairment and other charges, offset by a gain of $65 million for a flood-related insurance recovery. Non-GAAP earnings per share of $2.12 for the first quarter is calculated by using the same 242 million diluted shares as is used for GAAP earnings per share. The tax effect of the non-GAAP charges was not material. |
| 2 | Non-GAAP net income for the first quarter fiscal 2013 consists of GAAP net income of $519 million plus $49 million of amortization of intangibles related to the acquisition of HGST and $26 million related to employee termination benefits and other charges. Non-GAAP earnings per share of $2.36 for the first quarter is calculated by using the same 252 million diluted shares as is used for GAAP earnings per share. The tax effect of the non-GAAP charges was not material. |
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
| Sept. 27, 2013 |
June 28, 2013 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 4,869 | $ | 4,309 | ||||
| Accounts receivable, net |
1,791 | 1,793 | ||||||
| Inventories |
1,244 | 1,188 | ||||||
| Other current assets |
357 | 308 | ||||||
|
|
|
|
|
|||||
| Total current assets |
8,261 | 7,598 | ||||||
| Property, plant and equipment, net |
3,638 | 3,700 | ||||||
| Goodwill |
2,051 | 1,954 | ||||||
| Other intangible assets, net |
616 | 605 | ||||||
| Other non-current assets |
240 | 179 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 14,806 | $ | 14,036 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 2,061 | $ | 1,990 | ||||
| Accrued arbitration award |
719 | 706 | ||||||
| Accrued expenses |
406 | 480 | ||||||
| Accrued compensation |
388 | 453 | ||||||
| Accrued warranty |
123 | 114 | ||||||
| Short-term debt |
500 | — | ||||||
| Current portion of long-term debt |
230 | 230 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
4,427 | 3,973 | ||||||
| Long-term debt |
1,668 | 1,725 | ||||||
| Other liabilities |
458 | 445 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
6,553 | 6,143 | ||||||
| Total shareholders’ equity |
8,253 | 7,893 | ||||||
|
|
|
|
|
|||||
| Total liabilities and shareholders’ equity |
$ | 14,806 | $ | 14,036 | ||||
|
|
|
|
|
|||||
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts; unaudited)
| Three Months Ended | ||||||||
| Sept. 27, | Sept. 28, | |||||||
| 2013 | 2012 | |||||||
| Revenue, net |
$ | 3,804 | $ | 4,035 | ||||
| Cost of revenue |
2,716 | 2,842 | ||||||
|
|
|
|
|
|||||
| Gross profit |
1,088 | 1,193 | ||||||
|
|
|
|
|
|||||
| Operating expenses: |
||||||||
| Research and development |
401 | 396 | ||||||
| Selling, general and administrative |
132 | 179 | ||||||
| Charges related to arbitration award |
13 | — | ||||||
| Employee termination benefits and other charges |
— | 26 | ||||||
|
|
|
|
|
|||||
| Total operating expenses |
546 | 601 | ||||||
|
|
|
|
|
|||||
| Operating income |
542 | 592 | ||||||
| Net interest and other |
(10 | ) | (14 | ) | ||||
|
|
|
|
|
|||||
| Income before income taxes |
532 | 578 | ||||||
| Income tax provision |
37 | 59 | ||||||
|
|
|
|
|
|||||
| Net income |
$ | 495 | $ | 519 | ||||
|
|
|
|
|
|||||
| Income per common share: |
||||||||
| Basic |
$ | 2.10 | $ | 2.11 | ||||
|
|
|
|
|
|||||
| Diluted |
$ | 2.05 | $ | 2.06 | ||||
|
|
|
|
|
|||||
| Weighted average shares outstanding: |
||||||||
| Basic |
236 | 246 | ||||||
|
|
|
|
|
|||||
| Diluted |
242 | 252 | ||||||
|
|
|
|
|
|||||
WESTERN DIGITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
| Three Months Ended | ||||||||
| Sept. 27, | Sept. 28, | |||||||
| 2013 | 2012 | |||||||
| Cash flows from operating activities |
||||||||
| Net income |
$ | 495 | $ | 519 | ||||
| Adjustments to reconcile net income to net cash provided by operations: |
||||||||
| Depreciation and amortization |
312 | 313 | ||||||
| Stock-based compensation |
42 | 39 | ||||||
| Deferred income taxes |
(10 | ) | (12 | ) | ||||
| Gain from insurance recovery |
(65 | ) | — | |||||
| Changes in operating assets and liabilities, net |
(94 | ) | 77 | |||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
680 | 936 | ||||||
|
|
|
|
|
|||||
| Cash flows from investing activities |
||||||||
| Purchases of property, plant and equipment |
(136 | ) | (382 | ) | ||||
| Acquisitions, net of cash acquired |
(263 | ) | (9 | ) | ||||
| Other investing activities, net |
39 | — | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(360 | ) | (391 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities |
||||||||
| Employee stock plans, net |
7 | 60 | ||||||
| Repurchases of common stock |
(150 | ) | (218 | ) | ||||
| Dividends to shareholders |
(59 | ) | — | |||||
| Proceeds from debt |
500 | — | ||||||
| Repayment of debt |
(58 | ) | (58 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
240 | (216 | ) | |||||
|
|
|
|
|
|||||
| Net increase in cash and cash equivalents |
560 | 329 | ||||||
| Cash and cash equivalents, beginning of period |
4,309 | 3,208 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents, end of period |
$ | 4,869 | $ | 3,537 | ||||
|
|
|
|
|
|||||
Exhibit 99.2
