1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): July 27, 2000 WESTERN DIGITAL CORPORATION (Exact Name of Registrant as Specified in Charter) Delaware 001-08703 95-264-7125 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 8105 Irvine Center Drive Irvine, California 92618 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (949) 932-5000 Not Applicable (Former Name or Former Address, if Changed Since Last Report)
2 INFORMATION TO BE INCLUDED IN THE REPORT ITEM 5. OTHER EVENTS. On July 27, 2000, the Registrant issued a press release announcing its fourth quarter and year-end results. Attached hereto as Exhibit 99 and incorporated by reference herein is a copy of the July 27, 2000 press release. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. Exhibit Description - -------- --------------- 99 Press Release dated July 27, 2000. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 28, 2000 WESTERN DIGITAL CORPORATION By: /s/ Michael A. Cornelius ------------------------------------- Michael A. Cornelius Vice President, Law and Administration and Secretary 2
3 EXHIBIT INDEX Exhibit No. Document - ----------- -------- Exhibit 99 Press Release issued July 27, 2000. 3
1 Investor Relations: Bob Blair Western Digital Corporation 949.932.7834 bob.blair@wdc.com Public Relations: Steve Shattuck Western Digital Corporation 949.932.5178 steve.shattuck@wdc.com FOR IMMEDIATE RELEASE: WESTERN DIGITAL ANNOUNCES FOURTH QUARTER YEAR END RESULTS IRVINE, Calif. -- July 27, 2000 -- Western Digital Corporation (NYSE: WDC) today reported revenues of $473.9 million and a proforma net loss of $26.3 million, or $.19 per share, for its fourth quarter ended June 30, 2000. For the same period, on a GAAP basis, Western Digital reported net income of $4.2 million and earnings per share of $.03. The total results for the quarter included non-recurring benefits for tax and other accrual adjustments of $30.5 million, $11.0 million of which was included in selling, general and administrative expenses. In the year-ago period, the Company reported revenues of $709.3 million and a proforma net loss of $81.5 million, or $.90 per share. The total net loss for the year-ago period was $101.5 million, or $1.12 per share, and included a restructuring charge of approximately $20 million for the sale of the Company's media business. Matt Massengill, president and chief executive officer, stated: "Both our fourth quarter and year-over-year results reflect substantial progress at Western Digital in a challenging industry
2 Western Digital Announces Fourth Quarter Year End Results Page 2 environment. Price competition in the June quarter was significant and the non-linear supply of microprocessors led to fewer desktop PCs being shipped in the quarter than otherwise would have been the case. Nevertheless, the reductions in operating expenses and manufacturing costs we implemented over the last year enabled us to mitigate our operating loss for the quarter. Thus far into the September quarter, we have seen signs of healthier demand as availability of microprocessors has improved and our recovery of business with major PC OEM customers continues, albeit at prices impacted by the June quarter activity. "For the year, we are pleased with the significant progress made by the WD team on many fronts in the core HDD business," said Massengill, noting: - Closing the gap on competitive gross margin performance, moving from negative gross margins in Q1 to near double-digit performance in the second half of fiscal 2000; - Increased market share with major PC OEM customers, based on solid and sustained time-to-market performance and supply chain management expertise; - Technology leadership with time-to-market WD Caviar(TM) 7200 RPM hard drives, including shipment of its first Ultra ATA/100-enabled 7200 RPM hard drive in the June quarter. 7200 RPM hard drives accounted for 32% of the company's units shipped in the fourth quarter, up from 20% in the March quarter; - Reduction of nearly 30%, or $106 million, in operating expenses; - Successful consolidation of three manufacturing operations into a single highly-efficient site in Kuala Lumpur, Malaysia; and - Improved asset management, including a combined 10-day decrease in receivable and inventory days from the fourth quarter of 1999. -MORE-
3 Western Digital Announces Fourth Quarter Year End Results Page 3 "We launched two new ventures in fiscal 2000--Connex and SageTree--and leveraged our storage technology expertise into a leadership position in the emerging hard drive market for set-top boxes, home servers, television receivers, audio juke boxes and other consumer products. The selection of the WD Performer(TM) 15i hard drive by Microsoft WebTV Networks, Inc. for use in its Ultimate TV service was a major validation of WD as a player in this space," continued Massengill. For fiscal year 2000, the Company reported revenues of $2.0 billion and a proforma net loss of $241.8 million, or $ 1.97 per share. The total net loss for fiscal 2000 was $188.0 million, or $1.53 per share, and included: restructuring and special charges of $158.3 million, of which $72.5 million was included in cost of sales; a $14.7 million gain on disposition of investment securities; $166.9 million of extraordinary gains for redemption of a portion of the Company's convertible debt; and $30.5 million of non-recurring benefits for tax and other accrual adjustments. For fiscal year 1999, the Company reported revenues of $2.8 billion and a proforma net loss of $335.2 million, or $3.75 per share. The total net loss for fiscal 1999 was $492.7 million, or $5.51 per share, and included restructuring and special charges of approximately $157.5 million ($77.0 million of which was included in cost of sales, $12.0 million of which was included in research and development expenses, and $7.5 million of which was included in SG&A). -MORE-
4 Western Digital Announces Fourth Quarter Year End Results Page 4 ABOUT WESTERN DIGITAL One of the data storage industry's longtime leaders, Western Digital Corporation has leveraged its core strengths in becoming a leading Internet solutions company. Western Digital provides services and products to manage, store and communicate both digital content and network intelligence. The Company remains an industry-leading designer and manufacturer of hard drives for desktop computers and home entertainment applications. Through its Connex subsidiary, Western Digital delivers enterprise-class storage functionality for the department and mid-sized business markets, including storage management software, network attached storage and storage area networks. The Company's SageTree subsidiary markets packaged analytical applications and professional services to help manufacturers manage quality and quality-related business decisions throughout the entire supply chain and product lifecycle. 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. Its home page can be found at www.westerndigital.com.
5 WESTERN DIGITAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) THREE MONTHS ENDED YEAR ENDED ----------------------------------------------- ----------------------------- JUNE 30, JULY 3, MARCH 31, JUNE 30, JULY 3, 2000 1999 2000 2000 1999 ----------- ----------- ----------- ----------- ----------- Revenues, net .......................... $ 473,862 $ 709,302 $ 516,587 $ 1,957,580 $ 2,767,206 Costs and expenses: Cost of revenues .................. 432,275 688,429 505,003 1,949,511 2,770,054 Research and development .......... 35,202 52,003 33,770 163,198 216,986 Selling, general and administrative 21,461 44,597 33,970 138,323 195,958 Restructuring charges ............. -- 20,000 28,002 85,837 61,000 ----------- ----------- ----------- ----------- ----------- Total costs and expenses ...... 488,938 805,029 600,745 2,336,869 3,243,998 ----------- ----------- ----------- ----------- ----------- Operating loss ......................... (15,076) (95,727) (84,158) (379,289) (476,792) Net interest and other income (expense) (259) (5,759) 13,489 4,874 (15,898) ----------- ----------- ----------- ----------- ----------- Loss before income taxes and extraordinary item ................ (15,335) (101,486) (70,669) (374,415) (492,690) Income tax benefit ..................... 19,500 -- -- 19,500 -- ----------- ----------- ----------- ----------- ----------- Income (loss) before extraordinary item 4,165 (101,486) (70,669) (354,915) (492,690) Extraordinary gain from redemption of debentures ........................ -- -- -- 166,899 -- ----------- ----------- ----------- ----------- ----------- Net income (loss) ...................... $ 4,165 $ (101,486) $ (70,669) $ (188,016) $ (492,690) =========== =========== =========== =========== =========== Basic and diluted earnings (loss) per common share: Basic before extraordinary item ........ $ .03 $ (1.12) $ (.53) $ (2.89) $ (5.51) Extraordinary gain ..................... $ -- $ -- $ -- $ 1.36 $ -- ----------- ----------- ----------- ----------- Basic .................................. $ .03 $ (1.12) $ (.53) $ (1.53) $ (5.51) =========== =========== =========== =========== =========== Diluted ................................ $ .03 $ (1.12) $ (.53) $ (1.53) $ (5.51) =========== =========== =========== =========== =========== Common shares used in computing per share amounts: Basic .................................. 139,547 90,596 133,903 122,624 89,478 =========== =========== =========== =========== =========== Diluted ................................ 143,337 90,596 133,903 122,624 89,478 =========== =========== =========== =========== ===========
6 WESTERN DIGITAL CORPORATION CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) JUNE 30, JULY 3, 2000 1999 ----------- ----------- ASSETS Current assets: Cash and cash equivalents .......................... $ 184,021 $ 226,147 Accounts receivable, net ........................... 149,135 273,435 Inventories ........................................ 84,546 144,093 Prepaid expenses and other current assets .......... 33,693 81,853 ----------- ----------- Total current assets ........................... 451,395 725,528 Property and equipment, net ............................. 98,952 237,939 Intangible and other assets, net ........................ 65,227 58,935 ----------- ----------- Total assets ................................... $ 615,574 $ 1,022,402 =========== =========== LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable ................................... $ 266,841 $ 335,907 Accrued expenses ................................... 178,225 248,201 Current portion of long-term debt .................. -- 10,000 ----------- ----------- Total current liabilities ...................... 445,066 594,108 Long-term debt .......................................... 225,496 534,144 Other liabilities ....................................... 44,846 47,940 Minority interest ....................................... 10,000 -- Shareholders' deficit: Common stock, $.01 par value ....................... 1,436 906 Additional paid-in capital ......................... 371,587 140,145 Accumulated deficit ................................ (482,857) (294,841) ----------- ----------- Total shareholders' deficit .................... (109,834) (153,790) ----------- ----------- Total liabilities and shareholders' deficit .... $ 615,574 $ 1,022,402 =========== =========== Note: Certain July 3, 1999 amounts have been reclassified to conform to the June 30, 2000 presentation.