Seagate Announces Fourth Quarter Results.

SCOTTS VALLEY, Calif.--(BUSINESS WIRE)--July 9, 1997--Seagate Technology, Inc. (NYSE:SEG) today reported revenue, net income and fully diluted net income per share of $1.98 billion, $59 million and $0.23, respectively, for its quarter ended June 27, 1997. The results for the three months ended June 27, 1997 include charges of $153 million as a result of the adverse judgment in the Amstrad PLC litigation and $2.5 million for restructuring costs in the Company's Seagate Software subsidiary. Without these charges and their related tax effects, fully diluted net income per share for the three months ended June 27, 1997 would have been $0.61.

Revenue, net income and fully diluted net income per share for the quarter ended June 28, 1996 were $2.01 billion, $101 million and $0.42, respectively. Without one-time write-offs of in-process research and development incurred in connection with acquisitions of software companies and certain non-recurring charges related to the merger with Conner Peripherals, Inc., and their related tax effects, fully diluted net income per share for the three months ended June 28, 1996 would have been $0.52. Revenue, net income and fully diluted net income per share for the immediately preceding quarter ended March 28, 1997 were $2.50 billion, $257 million and $1.01, respectively. Without certain one-time charges associated with the acquisition of Holistic Systems Ltd. and write-offs and write-downs of certain intangible assets related to the Company's software businesses and their related tax effects, fully diluted net income per share for the three months ended March 28, 1997 would have been $1.07.

For the year ended June 27, 1997, revenue, net income and fully diluted net income per share were $8.94 billion, $658 million and $2.61, respectively. This compares with revenue, net income and fully diluted net income per share of $8.59 billion, $213 million and $0.97, respectively, for the year ended June 28, 1996. Without certain non-recurring acquisition-related charges and the Amstrad litigation charge and their related tax effects, fully diluted net income per share for the years ended June 27, 1997 and June 28, 1996 would have been $3.05 and $2.06, respectively.

On June 30, 1997, the Company received a statutory notice of potential deficiencies from the Internal Revenue Service (IRS) relative to taxable years 1991 through 1993 approximating $38.5 million plus interest, as well as approximately $5.7 million of penalties. The Company believes it has meritorious defenses to the IRS adjustments but has not yet determined the forum in which it will contest this proposed deficiency. Seagate believes that the likely outcome of this matter will not have a material effect on its financial position or results of operations.

The Company's foreign exchange hedging program currently utilizes forward currency contracts and currency options to hedge local currency cash flows in Singapore, Thailand, and Malaysia. Under this strategy, increases or decreases in the Company's local currency operating expenses are offset by realized gains and losses on the hedging transactions. The goal of this hedging program is to economically guarantee or lock in the exchange rates on the Company's foreign currency cash flows rather than to eliminate the possibility of short-term earnings volatility. Under existing accounting rules, certain of the Company's forward currency contracts have to be marked to market using the current forward rate and any resulting gains and losses must be recognized in the income statement in advance of the related foreign currency cash flows. This mismatch of accounting gains and losses versus actual foreign currency cash flows may be especially pronounced in the first fiscal quarter of 1998 as a result of the July 2, 1997 devaluation of the Thai Baht. Using today's Baht/US$ foreign exchange rate of Baht 29 to US$1, this mark to market adjustment would result in a net pretax charge of approximately $25 million, to be recognized as Other Expense at the end of the Company's first fiscal quarter ending October 3, 1997. The Company's ultimate realized gain or loss with respect to currency fluctuations will depend on the currency exchange rates and other factors in effect at the time such contracts mature over the next ten months. Although the Company cannot predict future movements in currency exchange rates, the Company believes that the benefits from recording local currency expenditures in lower US$ terms over the periods during which these foreign currency contracts are scheduled to mature should more than offset the charges to be recorded in the first quarter of fiscal 1998.

In November 1996, the Company effected a two-for-one stock split in the form of a stock dividend. Prior periods have been restated to reflect the stock split.

This release contains forward-looking statements relating to the Company's receipt of a statutory notice of potential deficiencies from the Internal Revenue Service and the potential impact of the Thai Baht devaluation. These forward-looking statements are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.

Seagate Technology is a data technology company that provides products for storing, managing and accessing digital information on the world's computer and data communications systems. Seagate, at $8.9 billion in revenue for its fiscal year ended June 27, 1997, is the largest independent disc drive and components company in the world. Seagate's home page address on the World Wide Web is http://www.seagate.com . -0-

                        SEAGATE TECHNOLOGY, INC.
                          FINANCIAL HIGHLIGHTS
             (In Thousands Except Per Share and Percent Data)

                   Three Months Ended           Year Ended
                 ----------------------   ----------------------
                  Jun. 27,    Jun. 28,     Jun. 27,    Jun. 28,
                    1997      1996 (1)       1997      1996 (1)
                 ----------  ----------   ----------  ----------

Net sales       $1,977,218  $2,014,528   $8,940,022  $8,588,350

Gross profit       457,146     393,497    2,022,255   1,581,001

As a percent
of sales              23.1%       19.5%        22.6%       18.4%

Income before
income taxes    $   59,692  $  139,110   $  891,235  $  331,460

Provision
for income
taxes                  365      38,095      233,197     118,199

Net income:

  Amount        $   59,327  $  101,015   $  658,038  $  213,261

  As a percent
  of sa1es             3.0%        5.0%         7.4%        2.5%

Net income
per share:

  Primary       $     0.23  $     0.46   $     2.73  $     1.03
  Fully diluted       0.23        0.42         2.61        0.97

Number of
shares used
in per share
computations:

  Primary          255,209     219,522      241,043     206,876
  Fully diluted    255,216     257,926      258,361     236,272

(1) The three and twelve month periods ended June 28, 1996 have been
restated to reflect a two-for-one stock split, effected in the form
of a stock dividend, in November 1996.

CONTACT: SEAGATE

Alan F. Shugart, CEO

Donald L. Waite, CFO

Julie Still, Press Relations

Deborah Peterson, Investor Relations

408/438-6550