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 IRVINE, Calif., Oct. 12 /PRNewswire/ -- Western Digital Corporation (NYSE: WDC) today reported a net loss of $5.1 million, or $.14 per share, on revenues of $285.5 million for the first fiscal quarter ended Sept. 25, 1993, compared with a net income of $4.2 million, or $.14 per share, on revenues of $271.1 million in the first quarter last year.
 In its fourth quarter ended June 30, 1993, the company reported a net loss of $37.8 million, or $1.07 per share, on revenues of $285.2 million.
 The company's disk drives business returned to operating profitability in the first quarter on revenues of $242.3 million, versus a substantial operating loss in Q4 on revenue of $242.8 million. In the year-ago quarter, disk drive revenues totaled $224.8 million.
 The Microcomputer Products business posted revenue of $43.2 million, flat with Q4 performance and down from $46.3 million in the first quarter last year.
 The profitability improvement in the disk drives business was due to the impact of continued structural changes, a broad-based cost-reduction program and the completion of a year-long shift to production of the company's industry-leading Caviar Architecture 1 drives.
 The company also announced that it has terminated negotiations with Rockwell International, Telecommunications to sell its semiconductor wafer fabrication facility and has reopened discussions with other interested parties. Previously, Western Digital and Rockwell had announced the signing of a letter of intent involving the sale of the facility.
 "The sale of the wafer fab is still something we intend to do," said Charles A. Haggerty, chairman, president and chief executive officer of Western Digital, "because of the immediate positive effect such a sale would have on our balance sheet and the reduction in future capital expenditures it would afford.
 "While we have seen some abatement in overall disk drive industry pricing pressures, the first quarter was a challenging one due to a continuation of aggressive pricing in the OEM channel and the usual seasonal slowness associated with the summer quarter. In this context, we are extremely pleased with our quarter-to-quarter financial improvements, particularly the performance of our drives business.
 "The combination of substantial cost reductions in the drives business, the commonality of parts across our Caviar product family, and accelerated demand in our domestic distribution business were key factors in the Q1 drives performance. We also maintained our technology leadership in the PC desktop drive segment during the first quarter with the introduction of the 3.5 inch Caviar 540, the industry's first two- platter 540 megabyte drive. Total megabytes shipped to our customers should continue to expand as we increase shipments of our 340, 420, and 540 megabyte drives in the quarters ahead.
 "Our Microcomputer Products business unit achieved its best gross margin performance in years through manufacturing improvements and a very strong quarter in our SCSI controller chip business."
 Headquartered in Irvine, Western Digital Corporation is a recognized leader in the design and manufacture of hard disk drives, integrated circuits, and graphics controller board-level products. The company markets these products to leading systems manufacturers and selected resellers under the Western Digital, Caviar(TM), Paradise, RocketCHIP(TM), and TakeCharge(TM) brand names. The company was founded in 1970 and has long been noted for its storage and graphics controller expertise and end-market systems-level design knowledge.
 Consolidated Statements of Operations
 (In thousands, except per share amounts)
 Three Months Ended
 Sept. 25, Sept. 26, June 30,
 1993 1992 1993
 Revenues, net $285,498 $271,141 $285,208
 Costs and expenses:
 Cost of revenues 239,079 220,767 264,421
 Research and development 26,352 22,152 29,777
 Selling, general and
 administrative 22,112 19,683 26,616
 Total costs and expenses 287,543 262,602 320,814
 Operating income (loss) (2,045) 8,539 (35,606)
 Net interest expense 3,053 3,908 3,446
 Income(loss) before
 income taxes (5,098) 4,631 (39,052)
 Provision (benefit) for
 income taxes --- 463 (1,231)
 Net income (loss) ($5,098) $4,168 ($37,821)
 Earnings (loss) per
 common and common
 equivalent share ($.14) $.14 ($1.07)
 Common and common equivalent
 shares used in computing per
 share amounts 35,367 30,348 35,337
 Consolidated Balance Sheets
 (In thousands, except per share amounts)
 Sept. 25, June 30,
 1993 1993
 Current assets:
 Cash and cash equivalents $35,471 $33,837
 Accounts receivable, net 154,766 159,478
 Inventories 100,208 112,516
 Prepaid expenses 13,641 12,626
 Total current assets 304,086 318,457
 Property and equipment, net 172,776 181,030
 Intangible and other assets, net 32,088 31,684
 Total assets $508,950 $531,171
 Current liabilities:
 Accounts payable $110,367 $128,538
 Accrued expenses 62,790 54,911
 Current portion of long-term debt 22,397 23,460
 Total current liabilities 195,554 206,909
 Long-term debt, less current
 portion 177,392 182,561
 Deferred income taxes 9,922 10,751
 Commitments and contingent liabilities
 Shareholders' equity:
 Preferred stock, $.10 par value --- ---
 Common stock, $.10 par value 3,540 3,534
 Additional paid-in capital 200,502 200,278
 Accumulated deficit (77,960) (72,862)
 Total shareholders' equity 126,082 130,950
 Total liabilities and
 shareholders' equity $508,950 $531,171
 NOTE TO EDITORS: Western Digital and Paradise are registered trademarks of Western Digital Corporation. Caviar, RocketCHIP, TakeCharge, CacheFlow2 and Fit Lab are trademarks of Western Digital Corporation. All other marks mentioned herein belong to other companies.
 -0- 10/12/93
 /CONTACT: Robert J. Blair of Western Digital, 714-932-7834/

CO: Western Digital Corp. ST: California IN: CPR SU: ERN

JB-EH -- LA038 -- 1270 10/12/93 16:18 EDT
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Publication:PR Newswire
Date:Oct 12, 1993

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