From correspondents in Delhi, India, 08:58 PM IST
Seagate Technology (NYSE: STX) reported disc drive unit shipments of approximately 43 million, revenue of $2.9 billion, GAAP net income of $160 million, and diluted net income per share of $0.32 for the quarter ended June 27, 2008. GAAP net income and diluted net income per share includes approximately $23 million of purchased intangibles amortization and other charges associated with Seagate’s recent acquisitions. Excluding these items, non-GAAP net income and diluted net income per share were $183 million and $0.37, respectively. Included in both GAAP and non-GAAP results are restructuring charges of approximately $36 million or approximately $0.07 per share.
For the twelve months ended June 27, 2008, Seagate reported revenue of $12.7 billion, GAAP net income of $1.3 billion, and diluted net income per share of $2.36. GAAP net income and diluted net income per share includes approximately $113 million of purchased intangibles amortization and other charges associated with Seagate’s recent acquisitions and also a net gain from asset sales of approximately $19 million. Excluding these items, non-GAAP net income and diluted net income per share were $1.4 billion and $2.54, respectively. Included in both GAAP and non-GAAP results are restructuring and other charges of approximately $88 million or approximately $0.16 per share.
"We delivered strong growth in fiscal year 2008, with unit volume and revenue up 15% and 12%, respectively over fiscal year 2007, and with net income of $1.3 billion," said Bill Watkins, Seagate chief executive officer. "Sequentially, our market-leading share positions remainedunchanged in the enterprise and desktop markets, we grew our leading share position in the consumer electronics market, and we grew share in the notebook and retail markets. Were it not for some product execution issues in the notebook and nearline markets, we believe we would have delivered an even stronger quarter and year, with improved share positions. We have now made significant strides in reclaiming our product leadership in these areas. While we expect that the residual effects of the previously missed execution will be reflected in the first quarter, we believe that we will grow revenue and improve earnings throughout the remainder of FY2009."
A reconciliation of adjustments made to GAAP net income and diluted net income per share can be found following the financial statements included with this press release. Additional information relating to the financial results for the fourth fiscal quarter of 2008 can be found online at seagate.com.
Business Outlook
For the September quarter, Seagate expects to report revenue of $3.15 - $3.3 billion, and GAAP diluted net income per share of $0.18 - $0.22. Adjusting for approximately $20 million of purchased intangibles amortization and other charges associated with past closed acquisitions, non-GAAP diluted net income per share
for the September quarter is expected to fall within the range of $0.22 - $0.26. The GAAP and non-GAAP outlook for the September quarter does not include restructuring costs or accelerated depreciation charges relating to the previously announced closing of our substrate operations in Limavady and the finished media operations in Milpitas. Additionally, the outlook does not include the impact of any future acquisitions, stock repurchases or potential restructuring activities the company may undertake during the quarter. For fiscal 2009, Seagate believes the demand trends for storage continue to support healthy industry unit growth of 10-15% and industry revenue growth of 5-10%. Specific to Seagate, the company is confident that its performance relative to time-to-market, inventory management and its overall cost structure will improve as it executes the plans that are currently in place. Financial performance improvement will be incremental as the company implements numerous changes across the business during the first half of the fiscal year. As such, Seagate expects gross margins to begin improving with the December quarter and settle into the targeted range of 21-25% for the balance of the fiscal year.
Dividend and Stock Repurchase
The company has declared a quarterly dividend of $0.12 per share to be paid on or before August 15, 2008 to all common shareholders of record as of August 1, 2008. During the quarter ended June 27, 2008 the company purchased, under a 10b5-1 qualified stock repurchase plan, 9.1 million of its common shares at an average cost of $21.36. The company has authorization to purchase approximately $2.0 billion of additional shares under the current stock repurchase program.
SEAGATE TECHNOLOGY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions) (Unaudited)
June 27, 2008
June 29, 2007 (a)
ASSETS
Cash and cash equivalents
$ 990
$ 988
Short-term investments
151
156
Accounts receivable, net
1,410
1,383
Inventories
945
794
Deferred income taxes
274
196
Other current assets
502
284
Total Current Assets
4,272
3,801
Property, equipment and leasehold improvements, net
2,464
2,278
Goodwill
2,352
2,300
Other intangible assets
111
188
Deferred income taxes
616
574
Other assets, net
305
331
Total Assets
$ 10,120
$ 9,472
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable
$ 1,652
$ 1,301
Accrued employee compensation
440
157
Accrued expenses, other
825
786
Accrued income taxes
10
75
Current portion of long-term debt
360
330
Total Current Liabilities
3,287
2,649
Other non-current liabilities
367
353
Long-term accrued income taxes
210
―
Long-term debt, less current portion
1,670
1,733
Total Liabilities
5,534
4,735
Shareholders’ Equity
4,586
4,737
Total Liabilities and Shareholders’ Equity
$ 10,120
$ 9,472
(a) The information in this column was derived from the Company’s audited consolidated balance sheet as of June 29, 2007.
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