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Seagate Technology News
Seagate Technology Reports Fiscal Second Quarter 2008 Results
SCOTTS VALLEY, Calif.,
For the six months ended
"Seagate's strong financial performance in the quarter reflects the company's solid business model and expanded product portfolio, which positioned us well in a favorable industry environment characterized by seasonal strength across all storage markets and continued growth in global demand," said
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 second fiscal quarter of 2008 can be found online at seagate.com.
Business Outlook
For the March quarter, Seagate expects to report revenue of
This guidance does not include the impact of any future acquisitions, stock repurchases or restructuring activities the company may undertake.
Dividend and Stock Repurchase
The company has declared a quarterly dividend of
During the quarter ended
Conference Call
Seagate will hold a conference call to review the fiscal second quarter results at
USA: (877) 223-6202 International: (706) 679-3742 Conference ID: 28131131
Replay
A replay will be available beginning today at
USA: (800) 642-1687 International: (706) 645-9291 Conference ID: 28131131
About Seagate
Seagate is the worldwide leader in the design, manufacture and marketing of hard disc drives, providing products for a wide-range of applications, including Enterprise, Desktop, Mobile Computing, Consumer Electronics and Branded Solutions. Seagate's business model leverages technology leadership and world-class manufacturing to deliver industry-leading innovation and quality to its global customers, and to be the low cost producer in all markets in which it participates. The company is committed to providing 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 http://www.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, including expected revenue, net income and diluted earnings per share (presented on a GAAP basis as well as on a non-GAAP adjusted basis), price and product competition, customer demand for our products, 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, such risks and uncertainties include the impact of the variable demand and the aggressive pricing environment for disc drives; dependence on Seagate's ability to successfully qualify, manufacture and sell its disc drive products in increasing volumes on a cost-effective basis and with acceptable quality, particularly the new disc drive products with lower cost structures; the impact of competitive product announcements and possible excess industry supply with respect to particular disc drive products; and market conditions and alternative cash and imperatives which could impact our ability to repurchase our stock. Information concerning risk, 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
SEAGATE TECHNOLOGY CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited) December 28, June 29, 2007 2007 (a) ASSETS Cash and cash equivalents $1,433 $988 Short-term investments 317 156 Accounts receivable, net 1,593 1,383 Inventories 830 794 Deferred income taxes 215 196 Other current assets 469 284 Total Current Assets 4,857 3,801 Property, equipment and leasehold improvements, net 2,267 2,278 Goodwill 2,385 2,300 Other intangible assets 157 188 Deferred income taxes 674 574 Other assets, net 276 331 Total Assets $10,616 $9,472 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $1,776 $1,301 Accrued employee compensation 297 157 Accrued expenses, other 782 786 Accrued income taxes 2 75 Current portion of long-term debt 330 330 Total Current Liabilities 3,187 2,649 Other non-current liabilities 381 353 Long-term accrued income taxes 232 - Long-term debt, less current portion 1,734 1,733 Total Liabilities 5,534 4,735 Shareholders' Equity 5,082 4,737 Total Liabilities and Shareholders' Equity $10,616 $9,472 (a) The information in this column was derived from the Company's audited consolidated balance sheet as of June 29, 2007. SEAGATE TECHNOLOGY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) For the Three Months Ended For the Six Months Ended December 28, December 29, December 28, December 29, 2007 2006 2007 2006 Revenue $3,420 $2,996 $6,705 $5,788 Cost of revenue 2,531 2,450 5,008 4,800 Product development 262 226 504 470 Marketing and administrative 167 141 319 320 Amortization of intangibles 13 12 27 23 Restructuring and other, net 27 1 32 (3) Total operating expenses 3,000 2,830 5,890 5,610 Income from operations 420 166 815 178 Interest income 19 25 35 44 Interest expense (34) (55) (66) (74) Other, net 18 9 14 11 Other income (expense), net 3 (21) (17) (19) Income before income taxes 423 145 798 159 Provision for income taxes 20 5 40 - Net income $403 $140 $758 $159 Net income per share: Basic $0.77 $0.25 $1.43 $0.28 Diluted 0.73 0.23 1.37 0.27 Number of shares used in per share calculations: Basic 526 571 529 573 Diluted 556 598 558 600 SEAGATE TECHNOLOGY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) For the Six Months Ended December 28, December 29, 2007 2006 OPERATING ACTIVITIES Net income $758 $159 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 420 414 Stock-based compensation 58 69 Allowance for doubtful accounts receivable (4) 42 Redemption charges on 8% Senior Notes due 2009 - 19 In-process research and development 4 - Other non-cash operating activities, net 3 1 Changes in operating assets and liabilities: Current assets and liabilities 120 (431) Non-current assets and liabilities 119 28 Net cash provided by operating activities 1,478 301 INVESTING ACTIVITIES Acquisition of property, equipment and leasehold improvements (362) (466) Proceeds from sale of fixed assets 24 28 Purchases of short-term investments (383) (322) Maturities and sales of short-term investments 222 687 Acquisitions, net of cash acquired (78) - Other investing activities, net 17 (29) Net cash used in investing activities (560) (102) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt - 1,477 Repayment of long-term debt - (400) Redemption premium on 8% Senior Notes due 2009 - (16) Proceeds from exercise of employee stock options and employee stock purchase plan 132 104 Dividends to shareholders (107) (104) Repurchases of common shares (500) (1,075) Other financing activities, net 2 1 Net cash used in financing activities (473) (13) Increase in cash and cash equivalents 445 186 Cash and cash equivalents at the beginning of the period 988 910 Cash and cash equivalents at the end of the period $1,433 $1,096
Use of non-GAAP financial information
Our results of operations have undergone significant change in the past few years, most significantly in connection with our acquisition of Maxtor. To help the readers of our condensed consolidated financial statements prepared on a GAAP basis better understand our past financial performance and our expectations of our future results, we supplementally disclose, after making certain non-GAAP adjustments, non-GAAP net income and non-GAAP diluted net income per share. We also provide forecasts of these non-GAAP financial measures. A reconciliation of the adjustments to GAAP net income and diluted net income per share for the quarter and year-to-date periods are presented in the tables below. In addition, an explanation of the ways in which our board of directors and management use these non-GAAP financial measures to evaluate the business, the substance behind our management's decision to use these non-GAAP financial measures, the material limitations associated with the use of these non-GAAP financial measures, the manner in which Seagate management compensates for those limitations, and the substantive reasons why we believe that these non-GAAP financial measures provide useful information to investors is included under the caption "Use of Non-GAAP Financial Measures" in the Form 8-K furnished today with the U.S. Securities and Exchange Commission. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with GAAP. You should not compare our non-GAAP net income or non-GAAP diluted net income per share results with those of other companies, as the adjustments made to our GAAP results are unique to Seagate.
SEAGATE TECHNOLOGY ADJUSTMENTS TO GAAP NET INCOME AND DILUTED NET INCOME PER SHARE (In millions, except per share data) (Unaudited) Three Months Ended Six Months Ended December 28, 2007 December 28, 2007 GAAP net income $403 $758 Non-GAAP adjustments: Acquisition related adjustments: - Amortization of purchased intangible assets A 24 48 - Write-off of in-process research and development B 4 4 - Stock-based compensation C 3 9 - Gain on the sale of certain assets D (15) (15) Adjustments for taxes E - - Non-GAAP net income 419 804 Diluted net income per share: GAAP $ 0.73 $ 1.37 Non-GAAP $ 0.76 $ 1.45 Shares used in diluted net income per share calculation: 556 558 A For the three months and six months ended December 28, 2007, amortization of purchased intangible assets acquired in acquisitions was allocated as follows: Three Months Ended Six Months Ended December 28, 2007 December 28, 2007 Cost of revenue $11 $22 Amortization of intangibles 13 26 Total amortization of purchased intangible assets $24 $48 B To exclude the write-off of in-process research and development related to the MetaLINCS acquisition (allocated to Product development) C For the three months and six months ended December 28, 2007, stock-based compensation expense related to the Maxtor acquisition was allocated as follows: Three Months Ended Six Months Ended December 28, 2007 December 28, 2007 Cost of revenue $- $1 Product development 2 5 Marketing and administrative 1 3 Total stock-based compensation expense $3 $9 D To exclude the gain on the sale of certain assets (allocated to Other income, net) E To exclude the tax effects, where applicable, of adjustments to GAAP net income
SOURCE Seagate Technology
