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WESTERN DIGITAL REPORTS FOURTH QUARTER EARNINGS

 WESTERN DIGITAL REPORTS FOURTH QUARTER EARNINGS
 IRVINE, Calif., July 28 /PRNewswire/ -- Western Digital Corp.


(NYSE: WDC) today reported net income of $4.1 million, or $.13 per share, on revenue of $293.5 million for the fourth fiscal quarter ended June 30, 1992, compared with a net loss of $26.5 million, or $.91 per share, on revenue of $253.3 million for the fourth quarter of fiscal 1991. Results for the comparable period in fiscal 1991 included revenue of $31.2 million from the local area network board business which was sold in the second quarter of fiscal 1992.
 The fiscal 1992 fourth quarter report -- including the company's first profit in seven quarters -- reflects a trend of improved operating results over the last several quarters. Income from operations was $8.7 million, compared with operating losses of $13.0 million and $30.5 million in the third and second fiscal quarters of 1992, respectively. Strong sequential revenue growth continued with fourth quarter levels up 28 percent from third quarter revenue of $229.3 million and up 36 percent from second quarter revenue of $216.3 million.
 The net loss for fiscal 1992 totaled $72.9 million, or $2.49 per share, on revenue of $938.3 million, compared with a net loss of $134.2 million, or $4.59 per share, on revenue of $986.2 million in fiscal 1991. Results for fiscal 1991 included revenue of $115.8 million from the local area network board business, compared to $48.4 million in 1992.
 Roger W. Johnson, chairman and chief executive officer of Western Digital, stated, "The ongoing trend of improved operating results and strengthening of the balance sheet is the result of continuous improvement activities that remain in place throughout the company -- including an aggressive asset management program. Continued strong demand and stable pricing in our disk drive business has been another key factor. Our decision to maintain significant levels of research and development during our restructuring has produced a strong set of new drive and LSI products, record volume shipments of drives and a quality list of original equipment manufacturer customers.
 "Our year-long focus on winning drive design-ins with the world's 30 leading suppliers of PC systems has more than doubled our revenue with these targeted accounts. The high acceptance level of our 3.5-inch Caviar family has driven this penetration and many customers have indicated that our expansion plans for the Caviar family in the new fiscal year match very well with their new systems under design, particularly their 486-based machines.
 "Gross profit grew to 18.2 percent in the fourth quarter, an improvement of $24 million from the third quarter. This was due to the more stable pricing in the disk drive business and a 33 percent increase in disk drive unit volumes, which resulted in more effective utilization of our manufacturing capacity.
 "We are very pleased with our demonstrated ability over the last three quarters to internally fund our turnaround of the business through increased revenue performance and aggressive working capital management. In the fourth quarter, inventories declined $19.1 million sequentially to $106.8 million and days sales outstanding of accounts receivable were reduced to 49 days from 53 days in the third quarter. Our cash balance at the end of Q4 was $33.8 million, essentially unchanged from our Q3 position, despite a $5.3 million paydown of long-term debt. During this time, we have also limited our capital expenditures to essential programs."
 Western Digital Corp., headquartered in Irvine, is a multinational company that designs and manufactures semiconductor, subsystem and intelligent drive products for OEMs and resellers which serve the microcomputer industry. The company's storage, video and systems logic products are designed to work in concert, and the resulting interarchitecture products yield increased system functionality and performance.
 WESTERN DIGITAL CORP.
 Consolidated Statements of Operations
 (In thousands, except per share data)
 Three months ended Year ended
 June 30, June 30, Mar. 28, June 30, June 30,
 1992 1991 1992 1992 1991
 Revenues $293,538 $253,298 $229,349 $938,332 $986,201
 Cost of
 revenues 240,181 215,731 200,055 827,707 812,967
 Gross profit 53,357 37,567 29,294 110,625 173,234
 Operating
 expenses:
 Research and
 development 21,606 21,562 22,604 89,566 93,107
 Selling,
 general and
 administrative 23,030 23,412 19,731 88,012 116,361
 Restructuring
 charges --- 15,500 --- --- 81,540
 Total 44,636 60,474 42,335 177,578 291,008
 Operating
 income (loss) 8,721 (22,907) (13,041) (66,953) (117,774)
 Interest expense,
 net 4,237 5,125 4,908 20,203 14,737
 Gain on sale of
 LAN business --- --- --- 15,784 ---
 Income (loss)
 before income
 taxes 4,484 (28,032) (17,949) (71,372) (132,511)
 Income taxes 416 (1,492) 658 1,488 1,660
 Net income (loss)$4,068 ($26,540) ($18,607) ($72,860) ($134,171)
 Primary income
 (loss) per
 common and
 common
 equivalent share $.13 ($0.91) ($0.64) ($2.49) ($4.59)
 Common and common
 equivalent
 shares 30,162 29,208 29,208 29,209 29,208
 WESTERN DIGITAL CORP.
 Consolidated Statements of Financial Position
 Assets
 (In thousands, except share data)
 June 30, June 30,
 1992 1991
 Current assets:
 Cash and cash equivalents $33,815 $36,061
 Accounts receivable, net 152,591 140,481
 Inventories 106,834 174,469
 Prepaid expenses 9,053 2,669
 Total current assets 302,293 353,680
 Property and equipment, net 196,328 228,098
 Intangible and other assets 33,922 38,662
 Total assets $532,543 $620,440
 Liabilities and Shareholders' Equity
 June 30, June 30
 1992 1991
 Current liabilities:
 Short-term bank
 borrowings and current
 installments of
 long-term debt $19,596 $4,083
 Current installments of
 capital lease obligations 7,565 9,854
 Accounts payable 85,910 123,115
 Accrued expenses 50,303 49,309
 Total current liabilities 163,374 186,361
 Convertible subordinated
 debentures 59,000 59,000
 Long-term debt 180,813 165,395
 Capital lease obligations 3,138 10,538
 Deferred income taxes 13,961 14,044
 Total liabilities 420,286 435,338
 Shareholders' equity:
 Preferred stock, $.10 par value --- ---
 Common stock, $.10 par value 2,921 2,921
 Additional paid-in capital 157,090 157,075
 Retained earnings
 (accumulated deficit) (47,754) 25,106
 Total shareholders' equity 112,257 185,102
 Total liabilities and
 shareholders' equity $532,543 $620,440
 -0- 7/28/92 R
 /CONTACT: Robert J. Blair of Western Digital, 714-932-7834/
 (WDC) CO: Western Digital Corp. ST: California IN: CPR SU: ERN


JB-JL -- LA017R -- 4555 07/29/92 11:11 EDT
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Date:Jul 29, 1992
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