WESTERN DIGITAL ANNOUNCES FOURTH QUARTER, FISCAL YEAR END RESULTS Thursday 26 July 2001 PDF Print Hard Drive Business Posts Small Fourth Quarter Operating Profit Amid Soft Industry Environment, Achieves Substantial Year-Over-Year Improvement in Operating Performance Western Digital Corporation today reported fourth quarter revenues of $456.0 million and a net loss of $9.0 million, or $.05 per share, before nonrecurring items. The results include an operating profit of approximately $2.8 million and unit shipments of 5.3 million by the Company's hard drive business. Including nonrecurring charges of $52.2 million, the total net loss for the fourth quarter was $61.2 million, or $.34 per share. The nonrecurring charges recorded in the fourth quarter result from adjustments to the carrying values of equity investments in and notes receivable from Komag Inc., and accrual of Komag contingent guarantees, all of which originally arose when Western Digital sold its disk media business to Komag in April 1999. The decision to take these charges was prompted by Komag's previous announcement that it did not pay its senior debt or the interest on its convertible bonds due June 30 and July 15, 2001, respectively. In the year-ago period, Western Digital reported revenues of $473.9 million and a net loss before nonrecurring items of $26.3 million, or $.19 per share. Including nonrecurring benefits for tax and other accrual adjustments of $30.5 million, the Company reported net income of $4.2 million, or $.03 per share. Matt Massengill, president and chief executive officer of Western Digital, said: "The fourth quarter reflected continued execution in our core hard drive business, culminating a 12-month positive swing in operating profit of nearly $190 million, with a near break-even operating performance for the fiscal year. We demonstrated continued leadership in the high performance 7200 RPM segment - which accounted for 58 percent of our quarterly revenue - and we maintained our relentless focus on low-cost leadership and expense management. We also delivered on our commitment to reduce losses from our new-venture activities, which declined to $11.5 million from $15.0 million in the March quarter. Faced with soft PC demand in the fourth fiscal quarter, we adjusted our build plan downward to avoid contributing to excess supply in the industry, affecting our revenue and unit volumes. "Based on our flexible manufacturing model, we are positioned to weather the current PC environment and quickly respond to and participate in the eventual recovery in PC growth," said Massengill. "We remain excited about the prospects for incremental growth in the new applications of personal storage such as video game systems and personal video recorders. This quarter, we will begin volume production deliveries of WD hard drives to Microsoft for its new Xbox video game system." For fiscal year 2001, the Company reported revenues of $1.95 billion and a net loss before nonrecurring items of $67.4 million, or $.40 per share. Including nonrecurring charges and extraordinary gains from bond redemptions, the total net loss for fiscal 2001 was $98.9 million, or $.59 per share. For fiscal year 2000, the Company reported revenues of $1.96 billion and a net loss before nonrecurring items of $241.8 million, or $1.97 per share. Including nonrecurring items and extraordinary gains, the total net loss was $188.0 million, or $1.53 per share. During the fourth quarter, the Company adopted the provisions of SEC Staff Accounting Bulletin No. 101 ("SAB101"). As a result, revenues for the quarter and year ended June 29, 2001 were increased by $19.5 million and $13.1 million, respectively, and the operating loss for the quarter and year ended June 29, 2001 were reduced by $2.5 million, or $.01 per share, and $1.1 million, or $.01 per share, respectively. The adjustments made to implement SAB101 in the current quarter and restate prior quarters accordingly, reflect the deferral of revenue for quarter-end sales made to the Company's channel customers under certain shipping terms. About Western Digital Western Digital, one of the storage industry's pioneers and long-time leaders, provides products and services for people and organisations that collect, manage and use digital information. The Company's core business produces reliable, high-performance hard drives that keep users' data close-at-hand and secure from loss. Applying its data storage core competencies to emerging markets, Western Digital's new ventures meet the increasing demand for innovative information management solutions arising from the proliferation of the Internet and broadband services. Keen Personal Media helps cable TV MSOs build their brand and revenue by providing personal video recording technology and services. Connex designs Network Attached Storage products that enable IT managers to quickly expand network storage. SANavigator develops and markets software that simplifies the central management of Storage Area Networks. SageTree is a software company providing enterprise manufacturing and supply chain analytic applications. Western Digital was founded in 1970. The Company's storage products are marketed to leading systems manufacturers and selected resellers under the Western Digital brand name. Visit the Investor section of the Company's Web site http://www.westerndigital.com to access a variety of financial and investor information. This release contains forward-looking statements, including statements relating to the Company's participation in the recovery in PC growth and the incremental growth in new applications for personal storage. The forward looking statements are based on current management expectations, and actual results may differ materially as a result of several factors, including: supply and demand conditions in the hard drive industry; overall economic conditions; changes in product and customer mix; pricing trends; actions by competitors; the pace of development of new markets; successful entry into new markets by the Company; the outcome of litigation between the Company and Cirrus Logic, Inc.; and other factors discussed in the Company's recent SEC filings. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements. Western Digital is a registered trademark of Western Digital Technologies, Inc. Keen Personal Media and TV4me are trademarks of Keen Personal Media, Inc. Connex is a trademark of Connex, Inc. SageTree is a registered trademark of SageTree, Inc. SANavigator is a trademark of SANavigator, Inc. All other brand and product names mentioned herein are the property of their respective companies. Editorial Contacts: Paul Calderwood Western Digital Europe Tel: 020 8763 2241 Fax: 020 8763 2245 Email: firstname.lastname@example.org Emma Gurd Account Executive Bluegrass Tel: 01264 323 141 Fax: 01264 323251 http://www.bluegrass.co.uk email@example.com This press release was distributed by ResponseSource Press Release Wire on behalf of Bluegrass Marketing Communications in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit https://pressreleasewire.responsesource.com/about.