Apr 15, 2003

Seagate Technology Reports Fiscal Third Quarter 2003 Results

SCOTTS VALLEY, Calif. - Seagate Technology (NYSE: STX) today reported revenue of $1.62 billion, net income of $174 million, and diluted earnings per share of $0.37 for the quarter ended March 28, 2003, compared to $1.69 billion, $193 million, and $0.45, respectively, in the year-ago quarter.

For the nine-month period ended March 28, 2003, Seagate reported revenue of $4.93 billion, net income of $481 million, and diluted earnings per share of $1.04, compared to $4.61 billion, $351 million and $0.85, respectively, for the nine months ended March 29, 2002.

The company shipped 16.6 million disc drives in the third fiscal quarter, reflecting an increase of 1.6 million units over the year-ago quarter. This includes approximately 4.6 million disc drives shipped on the 80GB/disc platform. The company expects OEMs still qualifying the 80GB/disc platform will complete qualification during the June quarter, and by the end of the June quarter substantially all of the company's personal storage shipments will be on this platform.

"Seagate's competitive advantages in the data storage marketplace, particularly our vertically integrated supply chain, drove solid financial results in what is a seasonally down quarter," said Steve Luczo, chairman and chief executive officer. "We continue to meet market challenges with leading technology, reliability and production flexibility which are defining characteristics of Seagate's leadership position. These enable us to offer a broad line of products that can be ramped up, qualified and shipped to meet quickly and cost-efficiently the changing needs of our customers in a dynamic market. We successfully ramped production of our 80GB/disc platform and expect continued progress in the upcoming quarter."

Consistent with its quarterly dividend policy, Seagate's board of directors has declared a quarterly cash distribution of $0.03 per share to be paid on or before May 23, 2003 to all common shareholders of record as of May 9, 2003.

Analyst and Investor Meeting

Seagate's senior management team will host a meeting for analysts and investors on Thursday, May 1, 2003. More information regarding this event and a link to the live webcast can be found at www.seagate.com.

Conference Call

Seagate Technology will hold a conference call to review the third quarter results at 2:00 p.m. Pacific Time on April 15, 2003. The live webcast of the conference call can be accessed online at www.seagate.com. A replay of the call will be available beginning April 15 at 5:30 p.m. Pacific Time through April 22 at 11:59 p.m. Pacific Time. The replay can be accessed from www.seagate.com or by telephone as follows:

USA: 800-475-6701
International: 320-365-3844
Access code: 680315

About Seagate

Seagate is the worldwide leader in the design, manufacturing and marketing of hard disc drives for Enterprise, PC and Consumer Electronics applications. The company is committed to delivering award-winning products, customer support and reliability, to meet the world's growing demand for information storage. Seagate can be found around the globe and at www.seagate.com.

This release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "intends" and similar expressions are generally intended to identify forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: risks in our ability to introduce, qualify, manufacture, and sell new products on a timely and cost-effective basis, the impact of changes in general world and domestic economic conditions in light of the military conflict in Iraq, the impact on operations and demand, particularly in the Far East, of the SARS outbreak, as well as other factors described in Seagate's Report on Form 10Q for the quarter ended December 27,2002 and its Registration Statement on Form S-1, each as filed with the Securities and Exchange Commission. The company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the company's estimates or views as of any subsequent date.

 

Seagate Technology
Financial Highlights

(In millions, except per share amounts)

Three Months Ended
 
Nine Months Ended
Statement of Operations Data
March 28,
2003
March 29,
2002
March 28,
2003
March 29,
2002
Revenue
$
1,620
$
1,691
$
4,933
$
4,614
Gross profit
$
434
$
511
$
1,299
$
1,246
As a percent of revenue
26.8
%
30.2
%
26.3
%
27.0
%
Income before income taxes
$
180
$
214
$
495
$
403
Provision for income taxes
$
6
$
21
$
14
$
52
Net income:
  Amount
$
174
$
193
$
481
$
351
  As a percent of revenue
10.7
%
11.4
%
9.8
%
7.6
%
Net income per share:
   
   
   
   
  Basic
$
0.41
 
$
0.48
 
$
1.17
 
$
0.88
 
  Diluted  
0.37
   
0.45
   
1.04
   
0.85
 
Number of shares used in per share calculations:                        
  Basic  
429
   
401
   
413
   
400
 
  Diluted  
476
 
429
 
465
 
411
 
         

Seagate Technology
Financial Highlights

(Dollars in millions)

Balance Sheet Data
March 28,
2003
March 29,
2002
Cash, Cash Equivalents and Short-term Investments
$
1,076
 
$
1,103
 
Accounts Receivable, net
$
657
 
$
703
 
Days Sales Outstanding
37
 
38
 
Inventories
$
301
 
$
315
 
Inventory Turns
15.8
 
15.0
 
Capital Expenditures (3 months)
$
136
 
$
90
 

For further information, contact:

Rod Cooper, Investor Relations
831.439.2371 rod.cooper@seagate.com
Brian Ziel, Media Relations
831.439.5429 brian.ziel@seagate.com

Seagate Technology
920 Disc Drive
Scotts Valley, CA 95066
831-438-6550

Seagate Technology
Condensed Consolidated Statement of Operations

(In millions, except per share amounts)
(Unaudited)

Three Months Ended
 
Nine Months Ended
 
March 28,
2003
March 29,
2002
March 28,
2003
March 29,
2002
Revenue
$
1,620
$
1,691
$
4,933
$
4,614
   
   
   
   
Cost of revenue
1,186
1,180
3,634
3,368
Product development
167
177
496
492
Marketing and administrative
85
97
276
302
Amortization of intangibles
5
15
Restructuring
4
7
4
  Total Operating Expenses
$
1,438
 
$
1,463
 
$
4,413
 
$
4,181
 
Income from operations
$
182
$
228
$
520
$
433
 
Interest income
4
6
12
21
Interest expense
(11)  
(19)  
(36)  
(61)  
Other, net
5  
(1)  
(1)  
10  
  Other Income (Expense), net
$
(2)
 
$
(14)
 
$
(25)
 
$
(30)
 
Income before income taxes
$
180
$
214
$
495
$
403
Provision for income taxes
6
21
14
52
 
Net income
$
174
$
193
$
481
$
351
 
Net income per share:
 
  Basic
$
0.41
$
0.48
$
1.17
$
0.88
  Diluted
0.37
   
0.45
 
1.04
 
0.85
 
Number of shares used in per share calculations:
 
  Basic
429
   
401
 
413
 
400
 
  Diluted
476
429
465
411
 
           

Seagate Technology
Condensed Consolidated Balance Sheet

(In millions)
(Unaudited)


March 28,
2003
June 28,
2002
Assets
   
   
Cash and cash equivalents
$
679
 
$
612
 
  Short-term investments
397
 
231
 
  Accounts receivable, net
657
 
614
 
  Inventories
301
 
347
 
  Other current assets
162
 
158
 
  Total Current Assets
2,196
 
1,962
 
Property, equipment and leasehold improvements, net
1,062
 
1,022
 
  Intangible assets, net
5
 
6
 
  Other assets, net
119
 
105
 
  Total Assets
$
3,382
 
$
3,095
 
Liabilities and Shareholders' Equity
   
   
  Accounts payable
$
709
 
$
743
 
  Affiliate accounts payable
3
 
12
 
  Accrued employee compensation
179
 
190
 
  Accrued deferred compensation
 
147
 
  Accrued expenses
319
 
339
 
  Accrued income taxes
179
 
170
 
  Current portion of long-term debt
4
 
2
 
  Total Current Liabilities
$
1,393
 
$
1,603
 
 
   
   
  Other liabilities
98
 
102
 
  Long-term debt, less current portion
745
 
749
 
  Total Liabilities
$
2,236
 
$
2,454
 
   
   
  Shareholders' Equity
$
1,146
 
$
641
 
  Total Liabilities and Shareholders' Equity
$
3,382
 
$
3,095