Seagate Technology plc (NASDAQ: STX) (the "Company" or "Seagate") today
reported financial results for the second quarter of fiscal year 2014
ended December 27, 2013. During the second quarter, the Company reported
revenue of $3.53 billion, gross margin of 28.0%, net income of $428
million and diluted earnings per share of $1.24. On a non-GAAP basis,
which excludes the net impact of certain items, Seagate reported gross
margin of 28.5%, net income of $455 million and diluted earnings per
share of $1.32.
During the second quarter, the Company generated approximately $856
million in operating cash flow, paid cash dividends of $142 million and
repurchased 33 million ordinary shares for approximately $1.5 billion.
There were 328 million ordinary shares issued and outstanding as of the
end of the quarter. Cash, cash equivalents, restricted cash, and
short-term investments totaled approximately $2.3 billion at the end of
"Seagate's results in the December quarter reflect discipline in
managing the profitability of our business and strong operational
execution. We continue to strategically invest in our product portfolio
and enhance our vertically integrated manufacturing capabilities to
effectively capitalize on the cloud, mobile and open source storage
trends that are being fueled by data growth," said Steve Luczo,
Seagate's chairman and chief executive officer. "Our cash flow was very
strong this quarter, and combined with the execution of our capital
allocation strategy, we are on track to meet our goal of returning 70%
of our operating cash flow to shareholders this fiscal year."
For a detailed reconciliation of GAAP to non-GAAP results, see
accompanying financial tables.
Seagate has issued a Supplemental Commentary document. The Supplemental
Commentary will not be read during today's call, but is available on
Seagate's Investors website at www.seagate.com/investors.
Quarterly Cash Dividend
The Board of Directors has approved a quarterly cash dividend of $0.43
per share, which will be payable on February 24, 2014 to shareholders of
record as of the close of business on February 10, 2014. The payment of
any future quarterly dividends will be at the discretion of the Board
and will be dependent upon Seagate's financial position, results of
operations, available cash, cash flow, capital requirements and other
factors deemed relevant by the Board.
Seagate management will hold a public webcast today at 2:00 p.m. Pacific
Time that can be accessed on its Investors website at www.seagate.com/investors.
During today's webcast, the Company will provide an outlook for its
third fiscal quarter of 2014, including key underlying assumptions.
A replay will be available beginning today at approximately 6:00 p.m.
Pacific Time at www.seagate.com/investors.
Seagate is a world leader in hard disk drives and storage solutions.
Learn more at www.seagate.com.
Cautionary Note Regarding Forward-Looking
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934, each as amended, including, in
particular, statements about our plans, strategies and prospects and
estimates of industry growth for the fiscal quarter ending March 28,
2014 and beyond. These statements identify prospective information and
include words such as "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "projects" and similar expressions. These
forward-looking statements are based on information available to the
Company as of the date of this press release and are based on
management's current views and assumptions. These forward-looking
statements are conditioned upon and also involve a number of known and
unknown risks, uncertainties, and other factors that could cause actual
results, performance or events to differ materially from those
anticipated by these forward-looking statements. Such risks,
uncertainties, and other factors may be beyond the Company's control and
may pose a risk to the Company's operating and financial condition. Such
risks and uncertainties include, but are not limited to: the uncertainty
in global economic conditions, as consumers and businesses may defer
purchases in response to tighter credit and financial news; the impact
of the variable demand and adverse pricing environment for disk drives,
particularly in view of current business and economic conditions;
dependence on the Company's ability to successfully qualify, manufacture
and sell its disk drive products in increasing volumes on a
cost-effective basis and with acceptable quality, particularly the new
disk drive products with lower cost structures; the impact of
competitive product announcements; possible excess industry supply with
respect to particular disk drive products; and the Company's ability to
achieve projected cost savings in connection with restructuring plans.
Information concerning risks, uncertainties and other factors that could
cause results to differ materially from the expectations described in
this press release is contained in the Company's Annual Report on Form
10-K filed with the U.S. Securities and Exchange Commission on August 7,
2013 and the Quarterly Report on Form 10-Q filed with the U.S.
Securities and Exchange Commission on October 29, 2013, the "Risk
Factors" sections of which are incorporated into this press release by
reference. These forward-looking statements should not be relied upon as
representing the Company's views as of any subsequent date and the
Company undertakes no obligation to update forward-looking statements to
reflect events or circumstances after the date they were made.
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
The information as of June 28, 2013 was derived from the Company's
audited Consolidated Balance Sheet as of June 28, 2013.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Use of non-GAAP financial information
To supplement the condensed consolidated financial statements presented
in accordance with generally accepted accounting principles (GAAP), the
Company provides non-GAAP measures of net income, diluted net income per
share and gross margin as a percentage of revenue, which are adjusted
from results based on GAAP to exclude certain expenses, gains and
losses. These non-GAAP financial measures are provided to enhance the
user's overall understanding of the Company's current financial
performance and our prospects for the future. Specifically, the Company
believes non-GAAP results provide useful information to both management
and investors as these non-GAAP results exclude certain expenses, gains
and losses that we believe are not indicative of our core operating
results and because it is consistent with the financial models and
estimates published by financial analysts who follow the Company.
These non-GAAP results are some of the primary measurements management
uses to assess the Company's performance, allocate resources and plan
for future periods. Reported non-GAAP results should only be considered
as supplemental to results prepared in accordance with GAAP, and not
considered as a substitute for, or superior to, GAAP results. These
non-GAAP measures may differ from the non-GAAP measures reported by
other companies in our industry.
ADJUSTMENTS TO GAAP NET INCOME AND DILUTED NET INCOME PER SHARE
(In millions, except per share amounts)
For the ThreeMonths EndedDecember 27,
For the Six MonthsEnded December 27,
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