Seagate Technology Reports Fiscal Fourth Quarter and Year-End 2009 Results

七月 21, 2009

Seagate Technology (NASDAQ: STX) today reported results for the quarter ended July 3, 2009 of 40.6 million disk drive unit shipments, revenue of $2.35 billion, a net loss of $81 million and net loss per share of $0.16. The financial results for the quarter include $21 million of purchased intangibles amortization and other charges associated with acquisitions, and $85 million of restructuring and related accelerated depreciation charges. The aggregate impact of these items is $106 million or approximately $0.22 per share.

“The overall organizational, operational, technical and product progress we have made during the last six months is reflected in our financial results for the June quarter and demonstrates meaningful progress toward the goal of returning to sustained GAAP profitability as soon as possible,” said Steve Luczo, Seagate CEO. “We are also seeing signs that the storage markets are improving and are providing better visibility into the demand environment. Our approach to the September quarter with respect to our production volumes and product mix is to continue to manage our factories with an intense focus on maximizing our return on invested capital while satisfying our customers’ requirements."

For the fiscal year ended July 3, 2009, the company reported disk drive unit shipments of 163.8 million, revenue of $9.8 billion, a net loss of $3.1 billion, and net loss per share of $6.32. The financial results for the fiscal year include $77 million of purchased intangibles amortization and other charges associated with acquisitions, charges related to restructuring activities of $266 million, a charge of $271 million that reflects an unfavorable adjustment to the valuation allowance related to the company’s deferred tax assets and a $2.3 billion charge relating to the write-off of goodwill and other long-lived assets. The aggregate impact of these items is a $2.9 billion reduction in earnings, or a decrease of approximately $5.95 per share. Of the $266 million in restructuring related charges, $56 million was for accelerated depreciation charges, with $30 million recorded in cost of revenue and $26 million in product development expense. The majority of the remaining balance of the restructuring charges relate to global headcount reductions.

Business Outlook
While there are signs of improved visibility, the ongoing uncertainty in global economic conditions makes it difficult to predict product demand and other related matters, which makes it more likely that Seagate’s actual results could differ materially from current expectations.

For the September quarter, the company is planning for the overall industry demand for disk drives to be 135-140 million units. Consequently, the company expects revenue to be approximately $2.4 - $2.6 billion and gross margin as a percent of revenue to improve by 200-350 basis points as compared to the June quarter. Product development and marketing/administrative costs are expected to decrease to approximately $315 million while other income and expense is expected to be a charge of approximately $40 million.

The September quarter outlook does not include the impact of any potential new restructuring activities, future mergers, acquisitions, financing, dispositions or other business combinations the company may undertake.

Additional information relating to the financial results for the fiscal fourth quarter and year-end 2009 can be found online at seagate.com.

Conference Call

Seagate will hold a conference call to review the fiscal fourth quarter results at 2:00 p.m. Pacific Time today. The conference call can be accessed online at seagate.com or by phone as follows:
USA: (877) 223-6202
International: (706) 679-3742
Conference ID: 15815830

Replay
A replay will be available beginning today at 6:00 p.m. Pacific Time through July 28 at 8:59 p.m. Pacific Time. The replay can be accessed from seagate.com or by phone as follows:
USA: (800) 642-1687
International: (706) 645-9291
Conference ID: 15815830

About Seagate
Seagate is the world leader in hard disk drives and storage solutions. Learn more at seagate.com.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements related to the Company’s future operating and financial performance in the September 2009 quarter, and thereafter, and include statements regarding expected revenue, gross margin,  product competition, customer demand for disk drives, the Company’s ability to return to profitability and general market conditions. These forward-looking statements are based on information available to Seagate as of the date of this press release. Current expectations, forecasts and assumptions involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the Company’s control. In particular, the decline in global economic conditions continues to pose a risk to the Company’s operating and financial performance as consumers and businesses have, and may continue to, defer purchases in response to tighter credit and negative financial conditions. Such risks and uncertainties also include the impact of the variable demand and the aggressive pricing environment for disk drives, particularly in view of current business and economic conditions; dependence on Seagate’s ability to successfully qualify, manufacture and sell its disk drive products in increasing volumes on a cost-effective basis and with acceptable quality, particularly the new disk drive products with lower cost structures; the impact of competitive product announcements and possible excess industry supply with respect to particular disk drive products; and the Company’s ability to achieve projected cost savings in connection with restructuring plans. Information concerning risks, uncertainties and other factors that could cause results to differ materially from those projected in the forward-looking statements is contained in the Company’s Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission on August 13, 2008, and in the Company’s Quarterly Report on Form 10-Q as filed with the U.S. Securities and Exchange Commission on May 6, 2009, which statements are incorporated into this press release by reference. These forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date and Seagate undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made.

#  #  #

 

Seagate Technology
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)

 
July 3,
2009
   
June 27,
2008 (a)
Assets        
Cash and cash equivalents
$
1,427
 
$
990
  Short-term investments
114
 
151
 
  Restricted cash and investments 508   space  
  Accounts receivable, net
1,033
 
1,410
 
  Inventories
587
 
945
 
  Deferred income taxes
94
274
 
  Other current assets
528
 
502
 
   
 
  Total Current Assets
4,291
 
4,272
 
               
Property, equipment and leasehold   improvements, net
2,229
 
2,464
 
  Goodwill
31
 
2,352
 
  Other intangible assets, net
42
 
111
 
  Deferred income taxes
375
616
 
  Other assets, net
119
 
305
 
   
 
  Total Assets
$
7,087
   
$
10,120
 
Liabilities and Shareholders' Equity        
  Short-term borrowings
$
350
   
$
space  
  Accounts payable
1,573
   
1,652
 
  Accrued employee compensation
144
 
440
 
  Accrued warranty
213
 
226
 
  Accrued expenses
483
 
599
 
  Accrued income taxes
10
 
10
 
  Current portion of long-term debt
421
 
360
 
   
 
  Total Current Liabilities
3,194
 
3,287
 
         
  Long-term accrued warranty
224
 
219
 
  Long-term accrued income taxes
69
 
210
 
  Other non-current liabilities
120
  148  
  Long-term debt, less current portion
1,956
  1,670  
   
 
  Total Liabilities
5,563
 
5,534
 
       
  Shareholders' Equity
1,524
 
4,586
 
 
 
  Total Liabilities and Shareholders'  Equity
$
7,087
   
$
10,120
 
 
(a)
    The information in this column was derived from the Company’s audited consolidated balance sheet as of June 27, 2008.





 

Seagate Technology
Condensed Consolidated Statements of Operations
(In millions, except per share data)
(Unaudited)
       
For the Three Months Ended
 
For the Year Ended
 
July 3,
2009
June 27,
2008
July 3,
2009
June 27,
2008 (a)
Revenue
$
2,353
$
2,899
$
9,805
$
12,708
               
Cost of revenue
1,946
2,208
8,395
9,503
Product development
215
270
953
1,028
Marketing and administrative
114
175
537
659
Amortization of intangibles 14 13 55 54
Restructuring and other, net
84
36
210
88
Impairment of goodwill and other        
  long-lived assets blank space blank space 2,290 blank space
  Total operating expenses
2,373
 
2,702
 
12,440
 
11,332
 
   
       
Income (loss) from operations
(20)
197
(2,635)
1,376
       
Interest income
2
6
17
57
Interest expense (39)   (30)   (134)   (126)  
Other, net
3
  9   (23)  
22
 
  Other income (expense), net (34)   (15)   (140)   (47)  
   
       
Income (loss) before income taxes
(54)
182
(2,775)
1,329
Provision for (benefit from) income   taxes
27
22
311 67
 
Net income (loss)
$
(81)
$
160
$
(3,086)
$
1,262
 
Net income (loss) per share:  
  Basic
$
(0.16)
$
0.33
$
(6.32)
$
2.46
  Diluted
(0.16)
   
0.32
 
(6.32)
 
2.36
 
Number of shares used in per share   calculations:  
  Basic
491
   
484
 
488
 
512
 
  Diluted
491
500
488
538


(a)
    The information in this column was derived from the Company’s audited consolidated statement of operations for the year ended June 27, 2008.


 

Seagate Technology
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
 
For the Year Ended
null

July 3,
2009
June 27,
2008 (a)
Operating Activities        
Net income (loss)
$
(3,086)
   
$
1,262
 
Adjustments to reconcile net income (loss) to net   cash provided by (used in) operating activities:            
Depreciation and amortization
931
 
844
 
  Stock-based compensation 83   113  
  Impairment of goodwill and other long-lived        
    assets 2,290   blank space  
  Deferred income taxes 306   10  
Other non-cash operating activities, net
(1)
 
(15)
 
Changes in operating assets and liabilities:    
    Accounts receivable  
372
     
(67)
 
    Inventories  
358
     
(151)
 
    Accounts payable  
(79)
     
351
 
    Accrued expenses, employee              
      compensation and warranty   (568)       154  
  Other assets and liabilities  
217
     
37
 
   
 
  Net cash provided by (used in) operating  activities
823
 
2,538
 
   
 
 
Investing Activities        
Acquisition of property, equipment and  leasehold   improvements  
(633)
     
(930)
 
Proceeds from sale of fixed assets 7   29  
Purchases of short-term investments
(155)
 
(486)
 
Maturities and sales of short-term investments  
192
     
460
 
Increase in restricted cash and investments   (128)       space  
Proceeds from sale of deferred compensation              
  plan investments   85       space  
Proceeds from sale of investment in equity              
  securities   11       space  
Acquisitions, net of cash acquired         (78)  
Other investing activities, net
3
 
14
 
   
 
Net cash provided by (used in) investing activities
(618)
 
(991)
 
   
 
               
Financing Activities        
Proceeds from short-term borrowings   350       space  
Net proceeds from issuance of long-term debt   399       space  
Retirements and maturities of long-term debt   (55)       (34)  
Increase in restricted cash and investments   (380)       space  
Proceeds from exercise of employee stock   options and employee stock purchase plan   54       178  
Dividends to shareholders   (132)       (216)  
Repurchases of common shares         (1,479)  
Other financing activities, net   (4)       6  
   
 
Net cash provided by (used in) financing activities
232
 
(1,545)
 
   
 
               
  Increase (decrease) in cash and cash        
  equivalents 437   2  
       
Cash and cash equivalents at the beginning of
  the period
990
 
988
 
 
 
Cash and cash equivalents at the end of the   period
$
1,427
 
$
990
 
(a)

    The information in this column was derived from the Company’s audited consolidated statement of cash flows for the year ended June 27, 2008.