LAKE FOREST, Calif., July 21 /PRNewswire-FirstCall/ -- Western Digital Corp. (NYSE: WDC) today reported financial results for its fiscal year 2010 and fourth quarter ended July 2, 2010.

For the quarter, revenue totaled $2.4 billion, hard drive unit shipments were 49.7 million and net income was $265 million, or $1.13 per share. The quarterly results included $27 million of expense related to litigation settlements. In the year-ago quarter, the company posted revenue of $1.9 billion, shipped 40.0 million hard drives, and reported net income and earnings per share of $196 million and $0.86, respectively. This included $5 million of income from the resolution of restructuring accruals and an $18 million gain on the sale of the company's substrate manufacturing facility in Sarawak, Malaysia.

The company generated $363 million in cash from operations during the June quarter, ending with total cash and cash equivalents of $2.7 billion. As previously announced, the company completed the acquisition of the magnetic media sputtering operations of Hoya Corporation during the June quarter for $233 million in cash.

For fiscal year 2010, the company posted revenue of $9.8 billion and net income of $1.4 billion, or $5.93 per share, compared to revenue of $7.5 billion and net income of $470 million, or $2.08 per share, for the prior year. The 2010 net income included the $27 million of expense in the fiscal fourth quarter related to litigation settlements. The 2009 net income included a $14 million in-process research and development charge related to the acquisition of SiliconSystems, Inc., $112 million of restructuring charges with related tax benefits of $4 million, and an $18 million gain on the sale of the company's substrate manufacturing facility.

In fiscal year 2010, WD grew revenue 32 percent and increased its operating income by 194 percent year-on-year.

"Despite softer than anticipated June quarter demand, fiscal year 2010 was another year of significant growth and profitability for Western Digital," said John Coyne, president and chief executive officer. "The long-term demand for low-cost, high-volume storage driven by the proliferation of data and content-hungry consumer and commercial devices remains strong. With our focus on customer needs, quality, low cost, and high asset efficiency in the highest growth markets, we believe WD is well positioned to continue to generate growth on a sustained and profitable basis."

The investment community conference call to discuss these results will be broadcast live over the Internet today at 2 p.m. Pacific/5 p.m. Eastern. The call will be accessible live and on an archived basis via the link below:

    Audio Webcast:              www.westerndigital.com/investor
                                Click on "Conference Calls"
    Telephone Replay:           866-393-2012 (toll free)
                                +1-203-369-0457 (international)

About WD

WD, one of the storage industry's pioneers and long-time leaders, provides products and services for people and organizations that collect, manage and use digital information. The company designs and produces reliable, high-performance hard drives and solid state drives that keep users' data accessible and secure from loss. Its advanced technologies are configured into applications for client and enterprise computing, embedded systems and consumer electronics, as well as its own consumer storage and media products.

WD was founded in 1970. The company's storage products are marketed to leading OEMs, systems manufacturers, selected resellers and retailers under the Western Digital® and WD brand names. Visit the Investor section of the company's Web site (www.westerndigital.com) to access a variety of financial and investor information.

This press release contains forward-looking statements concerning demand for digital storage and WD's growth and profitability. The foregoing forward-looking statements are based on WD's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including: the impact of recent uncertainty and volatility in global economic conditions; supply and demand conditions in the hard drive industry; actions by competitors; unexpected advances in competing technologies; uncertainties related to the development and introduction of products based on new technologies and expansion into new data storage markets; business conditions and growth in the various hard drive markets; pricing trends and fluctuations in average selling prices; changes in the availability and cost of commodity materials and specialized product components that WD does not make internally; and other risks and uncertainties listed in WD's recent Form 10-Q filed with the SEC on Apr. 30, 2010, to which your attention is directed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and WD undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Western Digital, WD, and the WD logo are registered trademarks of Western Digital Technologies, Inc. All other trademarks mentioned herein belong to their respective owners.

                       WESTERN DIGITAL CORPORATION

                  CONDENSED CONSOLIDATED BALANCE SHEETS

                         (in millions; unaudited)

                                                       Jul. 2,         Jul. 3,
                                                       2010(1)            2009
                                                        ------            ----

                                     ASSETS

    Current assets:
      Cash and cash equivalents                         $2,734          $1,794
      Accounts receivable, net                           1,256             926
      Inventories                                          560             376
      Other                                                170             134
                                                           ---             ---
        Total current assets                             4,720           3,230
    Property and equipment, net                          2,159           1,584
    Goodwill                                               146             139
    Other intangible assets, net                            88              89
    Other assets                                           215             249
                                                           ---             ---
        Total assets                                    $7,328          $5,291
                                                        ======          ======


                      LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                                  $1,507          $1,101
      Accrued expenses                                     281             247
      Accrued warranty                                     129              95
      Current portion of long-term debt                    106              82
                                                           ---             ---
        Total current liabilities                        2,023           1,525
    Long-term debt                                         294             400
    Other liabilities                                      302             174
                                                           ---             ---
        Total liabilities                                2,619           2,099
    Shareholders' equity                                 4,709           3,192
                                                         -----           -----
        Total liabilities and shareholders' equity      $7,328          $5,291
                                                        ======          ======

    (1) Includes the purchase price allocation of the company's
    acquisition of Hoya's magnetic media sputtering
    operations based on preliminary estimates of fair value and therefore
    may be adjusted when finalized.

                             WESTERN DIGITAL CORPORATION

                     CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                       (in millions, except per share amounts)
                                     (unaudited)

                                  Three Months Ended          Years Ended
                                  ------------------          -----------
                                 Jul. 2,      Jul. 3,  Jul. 2,      Jul. 3,
                                    2010         2009     2010         2009
                                    ----         ----     ----         ----


    Revenue, net                  $2,382       $1,928   $9,850       $7,453
    Cost of revenue                1,847        1,558    7,449        6,116
                                   -----        -----    -----        -----
      Gross margin                   535          370    2,401        1,337
                                     ---          ---    -----        -----
    Operating expenses:
      Research and development       154          132      611          509
      Selling, general and
       administrative                 88           52      265          201
      Acquired in-process
       research and development        -            -        -           14
      Restructuring and other,
       net                             -          (23)       -           94
                                     ---          ---      ---          ---
        Total operating expenses     242          161      876          818
                                     ---          ---      ---          ---
    Operating income                 293          209    1,525          519
      Net interest and other          (1)          (2)      (5)         (18)
                                     ---          ---      ---          ---
    Income before income
     taxes                           292          207    1,520          501
      Income tax provision            27           11      138           31
                                     ---          ---      ---          ---
    Net income                      $265         $196   $1,382         $470
                                    ====         ====   ======         ====

    Income per common share:

    Basic                          $1.15        $0.88    $6.06        $2.12
                                   =====        =====    =====        =====
    Diluted                        $1.13        $0.86    $5.93        $2.08
                                   =====        =====    =====        =====

    Common shares used in
     computing per share
     amounts:

    Basic                            230          223      228          222
                                     ===          ===      ===          ===

    Diluted                          235          227      233          226
                                     ===          ===      ===          ===

                           WESTERN DIGITAL CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (in millions; unaudited)

                               Three Months Ended           Years Ended
                               ------------------           -----------
                             Jul. 2,       Jul. 3,  Jul. 2,       Jul. 3,
                                2010          2009     2010          2009
                                ----          ----     ----          ----


    Cash flows from
     operating
     activities
    Net income                  $265          $196   $1,382          $470
    Adjustments to
     reconcile net
     income to net cash
      provided by
       operations:
      Depreciation and
       amortization              134           122      510           479
      Stock-based
       compensation               17            13       60            47
      Deferred income
       taxes                      29            31       27            24
      Loss on investments          -             -        -            10
      Non-cash portion of
       restructuring and
       other, net                  -           (18)       -            63
      Acquired in-process
       research and
       development                 -             -        -            14
      Changes in operating
       assets and
       liabilities               (82)            5      (37)          198
                                 ---           ---      ---           ---
        Net cash provided by
         operating
         activities              363           349    1,942         1,305
    Cash flows from
     investing
     activities
    Purchases of
     property and
     equipment                  (185)         (111)    (737)         (519)
    Proceeds from sale
     of property and
     equipment                     -            29        -            29
    Acquisitions, net of
     cash acquired              (253)          (19)    (253)          (63)
    Sales and maturities
     of investments                -             1        4             2
                                 ---           ---      ---           ---
        Net cash used in
         investing
         activities             (438)         (100)    (986)         (551)
    Cash flows from
     financing
     activities
    Issuance of stock
     under employee
     stock plans, net             24            14       62            23
    Increase (decrease)
     in excess tax
     benefits from
      employee stock plans       (16)          (28)       4           (24)
    Repurchases of
     common stock                  -             -        -           (36)
    Repayment of long-
     term debt                   (25)          (20)     (82)          (27)
                                 ---           ---      ---           ---
        Net cash used in
         financing
         activities              (17)          (34)     (16)          (64)
    Net change in cash
     and cash
     equivalents                 (92)          215      940           690
    Cash and cash
     equivalents,
     beginning of period       2,826         1,579    1,794         1,104
                               -----         -----    -----         -----
    Cash and cash
     equivalents, end of
     period                   $2,734        $1,794   $2,734        $1,794
                              ======        ======   ======        ======

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SOURCE Western Digital Corp.