Seagate Technology News
Seagate Technology Reports Fiscal Third Quarter 2008 Results
For the nine months ended
"We are pleased with Seagate's solid operational and financial performance in the quarter driven by continued strong global demand for storage products," said
Adjustments made to GAAP net income and diluted net income per share can be found with the financial statements included with this press release. Additional information relating to the financial results for the third fiscal quarter of 2008 can be found online at seagate.com.
Business Outlook
For the June 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 third quarter results at
USA: (877) 223-6202 International: (706) 679-3742 Conference ID: 41681231
Replay
A replay will be available beginning today at
USA: (800) 642-1687 International: (706) 645-9291 Conference ID: 41681231
About Seagate
Seagate is the worldwide leader in the design, manufacture and marketing of hard disc drives and storage solutions, 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, with the goal of being the time-to-market leader 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, particularly in view of current economic conditions; 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 imperatives which could impact our ability to repurchase 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) March 28, June 29, 2008 2007 (a) ASSETS Cash and cash equivalents $1,143 $988 Short-term investments 140 156 Accounts receivable, net 1,351 1,383 Inventories 1,073 794 Deferred income taxes 225 196 Other current assets 675 284 Total Current Assets 4,607 3,801 Property, equipment and leasehold improvements, net 2,357 2,278 Goodwill 2,366 2,300 Other intangible assets 132 188 Deferred income taxes 659 574 Other assets, net 292 331 Total Assets $10,413 $9,472 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $1,915 $1,301 Accrued employee compensation 380 157 Accrued expenses, other 803 786 Accrued income taxes 11 75 Current portion of long-term debt 345 330 Total Current Liabilities 3,454 2,649 Other non-current liabilities 399 353 Long-term accrued income taxes 212 - Long-term debt, less current portion 1,685 1,733 Total Liabilities 5,750 4,735 Shareholders' Equity 4,663 4,737 Total Liabilities and Shareholders' Equity $10,413 $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 Nine Months Ended March 28, March 30, March 28, March 30, 2008 2007 2008 2007 Revenue $3,104 $2,828 $9,809 $8,616 Cost of revenue 2,288 2,225 7,295 7,025 Product development 254 214 758 683 Marketing and administrative 164 126 484 446 Amortization of intangibles 15 13 41 36 Restructuring and other, net 20 3 52 - Total operating expenses 2,741 2,581 8,630 8,190 Income from operations 363 247 1,179 426 Interest income 16 15 51 59 Interest expense (30) (33) (96) (107) Other, net - 1 13 11 Other expense, net (14) (17) (32) (37) Income before income taxes 349 230 1,147 389 Provision for income taxes 5 18 45 18 Net income $344 $212 $1,102 $371 Net income per share: Basic $0.68 $0.39 $2.11 $0.66 Diluted 0.65 0.37 2.02 0.62 Number of shares used in per share calculations: Basic 507 546 522 564 Diluted 530 577 549 595 SEAGATE TECHNOLOGY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) For the Nine Months Ended March 28, March 30, 2008 2007 OPERATING ACTIVITIES Net income $1,102 $371 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 631 650 Stock-based compensation 86 101 Allowance for doubtful accounts receivable (3) 42 Redemption charges on 8% Senior Notes due 2009 - 19 In-process research and development 4 4 Other non-cash operating activities, net 6 16 Changes in operating assets and liabilities: Current assets and liabilities 134 (703) Non-current assets and liabilities 183 70 Net cash provided by operating activities 2,143 570 INVESTING ACTIVITIES Acquisition of property, equipment and leasehold improvements (637) (688) Proceeds from sale of fixed assets 29 29 Purchases of short-term investments (439) (322) Maturities and sales of short-term investments 425 851 Acquisitions, net of cash acquired (78) (178) Other investing activities, net 15 (44) Net cash used in investing activities (685) (352) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt - 1,477 Repayment of debt (34) (405) Redemption premium on 8% Senior Notes due 2009 - (16) Proceeds from exercise of employee stock options and employee stock purchase plan 172 207 Dividends to shareholders (159) (158) Repurchases of common shares (1,284) (1,324) Other financing activities, net 2 - Net cash used in financing activities (1,303) (219) Increase (decrease) in cash and cash equivalents 155 (1) Cash and cash equivalents at the beginning of the period 988 910 Cash and cash equivalents at the end of the period $1,143 $909 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) For the For the Three Months Ended Nine Months Ended March 28, 2008 March 28, 2008 GAAP net income $344 $1,102 Non-GAAP adjustments: Acquisition related adjustments: - Amortization of purchased intangible assets (A) 26 74 - Write-off of in-process research and development (B) - 4 - Stock-based compensation (C) 3 12 - Gain on the sale of certain assets (D) (4) (19) Adjustments for taxes (E) - - Non-GAAP net income 369 1,173 Diluted net income per share: GAAP $ 0.65 $ 2.02 Non-GAAP $ 0.70 $ 2.15 Shares used in diluted net income per share calculation: 530 549 (A) For the three months and nine months ended March 28, 2008, amortization of purchased intangible assets acquired in acquisitions was allocated as follows: For the For the Three Months Ended Nine Months Ended March 28, 2008 March 28, 2008 Cost of revenue $11 $33 Amortization of intangibles 15 41 Total amortization of purchased intangible assets $26 $74 (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 nine months ended March 28, 2008, stock-based compensation expense related to the Maxtor acquisition was allocated as follows: For the For the Three Months Ended Nine Months Ended March 28, 2008 March 28, 2008 Cost of revenue $1 $2 Product development 2 7 Marketing and administrative - 3 Total stock-based compensation expense $3 $12 (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
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