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WESTERN DIGITAL REPORTS THIRD QUARTER EARNINGS

 IRVINE, Calif., April 21 /PRNewswire/ -- Western Digital Corp. (NYSE: WDC) today reported results for the third fiscal quarter ended March 27, 1993. Net income was $1.6 million, or $.05 per share, on revenue of $325.4 million, a 42 percent increase from revenue in the third quarter of fiscal 1992. The year-ago results included a net loss of $18.6 million, or $.64 per share, on revenue of $229.3 million.
 Net income for the first nine months of fiscal 1993 totaled $12.7 million, or $.39 per share, on revenue of $940.0 million, compared with a net loss of $76.9 million, or $2.64 per share, on revenue of $644.8 million for the corresponding period of the prior year.
 Roger W. Johnson, chairman and chief executive officer, stated: "This was Western Digital's fourth consecutive quarter of profitability, although we saw our financial performance severely impacted by pricing pressures in the disk drives industry. Some of the competition found themselves faced with excess inventory of older technology product, causing an abnormal ripple effect across all 3.5-inch capacity price points.
 "Product demand remains strong -- especially from larger OEM customers for our higher-capacity Caviar Architecture One family of disk drives. Two quarters ago, we decided to de-emphasize the lower capacity 80- and 120-megabyte 3.5-inch drives and accelerate our shift to the new drives. This strategy has been executed as planned and, consequently, Western Digital enters the fourth quarter with minimal inventory of older drives and strong bookings for the new drives featuring our industry-leading technology. Inventory turns in our drives business were 19 during the quarter."
 Charles A. Haggerty, president and chief operating officer, said, "Our ability to rapidly shift the mix of our drives due to the common componentry of the Architecture One family was a key factor in our third quarter profitability. These drives comprised 43 percent of our total drive units shipped. We are on target to more than double our shipments of Architecture One drives in the fourth quarter. The result of the mix shift is a steady increase in business with top tier personal computer manufacturers as they ship systems with our 250, 340 and 420 megabyte drives to accommodate end-users' increased storage needs.
 "Disk drive unit shipments were virtually flat with second quarter levels as planned. Revenues declined due to the unfortunate pricing environment. As forecasted, total megabytes shipped increased substantially with the shift to higher capacities.
 "The Microcomputer Products (MCP) business continued its improvement in operating performance in the third quarter. MCP is beginning to make solid progress on new product introductions, time- to-market and gross margin improvement under its new leadership," said Haggerty. "Design win momentum with top tier OEMs is building for MCP's new graphics, storage, and core logic chipset products, which we expect to begin shipping in volume in the second half of the calendar year."
 Headquartered in Irvine, Western Digital Corp. 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 serving the personal computer industry, under the Western Digital, Caviar and Paradise brand names. The company was founded in 1970 and has long been noted for its storage controller expertise, end-market systems-level design knowledge, and advanced semiconductor manufacturing capabilities.
 WESTERN DIGITAL CORP.
 Consolidated Statements of Operation
 (In thousands, except per share amounts)
 Three Months Ended Nine Months Ended
 Mar. 27, Mar. 28, Dec. 26, Mar. 27, Mar. 28,
 1993 1992 1992 1993 1992
 Revenues, net $325,407 $229,349 $343,475 $940,023 $644,794
 Costs and expenses:
 Cost of revenues 273,107 200,055 284,889 778,763 587,526
 Research and
 development 24,946 22,604 24,718 71,816 67,960
 Selling,
 general and
 administrative 22,092 19,731 22,079 63,854 64,982
 Total costs
 and expenses 320,145 242,390 331,686 914,433 720,468
 Operating
 income (loss) 5,262 (13,041) 11,789 25,590 (75,674)
 Net interest
 expense 3,629 4,908 4,109 11,646 15,966
 Gain on sale of
 LAN business --- --- --- --- 15,784
 Income (loss) before
 income taxes 1,633 (17,949) 7,680 13,944 (75,856)
 Provision for
 income taxes --- 658 768 1,231 1,072
 Net income (loss) $1,633 ($18,607) $6,912 $12,713 ($76,928)
 Earnings (loss)
 per common and common
 equivalent share:
 Primary $.05 ($.64) $.22 $.39 ($2.64)
 Fully diluted $.05 ($.64) $.21 $.39 ($2.64)
 Common and common
 equivalent shares used
 in computing
 per share amounts:
 Primary 35,302 29,208 31,835 32,546 29,208
 Fully diluted 35,306 29,208 32,383 32,681 29,208
 WESTERN DIGITAL CORP.
 Consolidated Balance Sheets
 (In thousands, except per share amounts)
 March 27, Dec. 26,
 1993 1992
 ASSETS
 Current assets:
 Cash and cash equivalents $34,948 $33,323
 Accounts receivable, net 195,101 185,458
 Inventories 89,665 97,600
 Prepaid expenses 11,292 10,531
 Total current assets 331,006 326,912
 Property and equipment, net 193,313 191,055
 Intangible and other assets, net 34,133 32,705
 Total assets $558,452 $550,672
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $113,836 $101,698
 Accrued expenses 54,293 54,094
 Current portion of long-term debt 19,862 27,938
 Total current liabilities 187,991 183,730
 Long-term debt, less current portion 187,797 228,914
 Deferred income taxes 13,900 13,918
 Commitments and contingent liabilities
 Shareholders' equity:
 Preferred stock, $.10 par value --- ---
 Common stock, $.10 par value 3,534 2,940
 Additional paid-in capital 200,271 157,844
 Accumulated deficit (35,041) (36,674)
 Total shareholders' equity 168,764 124,110
 Total liabilities and shareholders'
 equity $558,452 $550,672
 -0- 4/21/93
 /CONTACT: Robert J. Blair of Western Digital, 714-932-7834/
 (WDC)


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

JL -- LA034 -- 8936 04/21/93 16:17 EDT
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Date:Apr 21, 1993
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