|By Business Wire||
|April 29, 2014 04:06 PM EDT||
Seagate Technology plc (NASDAQ: STX) (the “Company” or “Seagate”) today reported financial results for the third quarter of fiscal year 2014 ended March 28, 2014. For the third quarter, the Company reported revenue of approximately $3.4 billion, gross margin of 28.2%, net income of $395 million and diluted earnings per share of $1.17. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 28.5%, net income of $453 million and diluted earnings per share of $1.34. For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.
During the third quarter, the Company generated approximately $443 million in operating cash flow, paid cash dividends of $140 million and repurchased 3.5 million ordinary shares for $184 million. There were 326 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 the quarter.
“Seagate’s March quarter results reflect ongoing effective execution in a dynamic market environment,” said Steve Luczo, Seagate’s chairman and chief executive officer. “We are positioning the Company to lead in the evolving storage ecosystem by leveraging and investing in our market-leading product portfolio to enable shifts in the storage landscape in hyperscale, performance and mobility. In addition, we are maintaining our focus on operational discipline through conservative demand forecasting and supply management.”
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 May 28, 2014 to shareholders of record as of the close of business on May 14, 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 fourth 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 Statements
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 year ending June 27, 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, the “Risk Factors” section of which is incorporated into this press release by reference, and other documents filed with or furnished to the Securities and Exchange Commission. 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
|Cash and cash equivalents||$||2,259||$||1,708|
|Restricted cash and investments||4||101|
|Accounts receivable, net||1,633||1,670|
|Deferred income taxes||116||115|
|Other current assets||246||484|
|Total current assets||5,151||5,412|
|Property, equipment and leasehold improvements, net||2,065||2,269|
|Other intangible assets, net||304||405|
|Deferred income taxes||467||456|
|Other assets, net||195||225|
|LIABILITIES AND EQUITY|
|Accrued employee compensation||212||335|
|Current portion of long-term debt||—||3|
|Total current liabilities||2,162||2,611|
|Long-term accrued warranty||134||144|
|Long-term accrued income taxes||90||87|
|Other non-current liabilities||121||121|
|Long-term debt, less current portion||3,514||2,774|
|Total Liabilities and Equity||$||8,659||$||9,243|
The information as of June 28, 2013 was derived from the Company’s audited Consolidated Balance Sheet as of June 28, 2013.
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
|For the Three Months Ended||For the Nine Months Ended|
|Cost of revenue||2,447||2,578||7,502||7,926|
|Marketing and administrative||190||168||561||457|
|Amortization of intangibles||26||20||71||59|
|Restructuring and other, net||2||1||20||2|
|Total operating expenses||2,962||3,061||9,057||9,283|
|Income from operations||444||465||1,366||1,644|
|Other expense, net||(54||)||(35||)||(94||)||(116||)|
|Income before income taxes||390||430||1,272||1,528|
|(Benefit from) provision for income taxes||(5||)||14||22||38|
|Less: Net income attributable to noncontrolling interest||—||—||—||—|
|Net income attributable to Seagate Technology plc||$||395||$||416||$||1,250||$||1,490|
|Net income per share attributable to Seagate Technology plc ordinary shareholders:|
|Number of shares used in per share calculations:|
|Cash dividends declared per Seagate Technology plc ordinary share||$||0.43||$||—||$||1.24||$||1.02|
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|For the Nine Months Ended|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Depreciation and amortization||668||651|
|Deferred income taxes||(17||)||(14||)|
|Gain on sale of investments||(32||)||(51||)|
|Gain on sale of property and equipment||(6||)||(34||)|
|Loss on redemption and repurchase of debt||7||31|
|Other non-cash operating activities, net||16||1|
|Changes in operating assets and liabilities:|
|Accounts receivable, net||32||769|
|Accrued employee compensation||(123||)||(85||)|
|Accrued expenses, income taxes and warranty||16||(124||)|
|Vendor non-trade receivables||204||—|
|Other assets and liabilities||41||308|
Net cash provided by operating activities
|Acquisition of property, equipment and leasehold improvements||(428||)||(658||)|
|Proceeds from the sale of property and equipment||—||29|
|Proceeds from the sale of strategic investments||72||—|
|Purchases of short-term investments||(87||)||(227||)|
|Sales of short-term investments||463||201|
|Maturities of short-term investments||61||26|
|Cash used in acquisition of LaCie S.A., net of cash acquired||—||(36||)|
|Other investing activities, net||(29||)||(16||)|
|Net cash provided by (used in) investing activities||52||(681||)|
|Repayments of long-term debt and capital lease obligations||(64||)||(421||)|
|Net proceeds from issuance of long-term debt||791||—|
|Repurchases of ordinary shares||(1,886||)||(1,612||)|
|Dividends to shareholders||(417||)||(381||)|
|Proceeds from issuance of ordinary shares under employee stock plans||98||233|
|Escrow deposit for acquisition of noncontrolling shares of LaCie S.A.||—||(72||)|
|Other financing activities, net||(5||)||—|
|Net cash used in financing activities||(1,483||)||(2,253||)|
|Effect of foreign currency exchange rate changes on cash and cash equivalents||1||1|
|Increase (decrease) in cash and cash equivalents||551||(274||)|
|Cash and cash equivalents at the beginning of the period||1,708||1,707|
|Cash and cash equivalents at the end of the period||$||2,259||$||1,433|
Use of non-GAAP financial information
To supplement the condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP measures of net income, diluted net income per share, gross margin, gross margin as a percentage of revenue, operating margin, operating expenses, and operating income which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP financial measures are provided to enhance the user's overall understanding of the Company’s current financial performance and our prospects for the future. Specifically, the Company believes non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because it is consistent with the financial models and estimates published by financial analysts who follow the Company.
These non-GAAP results are some of the primary measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in our industry.
SEAGATE TECHNOLOGY PLC
ADJUSTMENTS TO GAAP NET INCOME AND DILUTED NET INCOME PER SHARE
(In millions, except per share amounts)
For the Three
For the Nine
|GAAP net income||$||395||$||1,250|
|Cost of revenue||A||11||48|
|Marketing and administrative||B||17||23|
|Amortization of intangibles||C||26||71|
|Restructuring and other, net||D||2||20|
|Other expense (income), net||E||2||(31||)|
|Benefit from income taxes||F||—||(6||)|
|Non-GAAP net income||$||453||$||1,381|
|Diluted net income per share:|
|Shares used in diluted net income per share calculation||338||351|
A For the three and nine months ended March 28, 2014, Cost of revenue on a GAAP basis totaled $2,447 million and $7,502 million, respectively, while non-GAAP Cost of revenue, which excludes the net impact of certain adjustments, was $2,436 million and $7,454 million, respectively. The non-GAAP adjustments include amortization of intangibles, and other acquisition related expenses associated with the December 2011 acquisition of Samsung Electronics Co., Ltd.'s hard disk drive business (the "Samsung HDD business") and the August 2012 acquisition of LaCie S.A. ("LaCie").
B For the three and nine months ended March 28, 2014, Product development and Marketing and administrative expenses have been adjusted on a non-GAAP basis to exclude the impact of acquisition costs associated with the March 31, 2014 acquisition of Xyratex Ltd., and acquisition and integration costs associated with the acquisitions of the Samsung HDD business and LaCie.
C For the three and nine months ended March 28, 2014, Amortization of intangibles related to our Samsung HDD business and LaCie acquisitions have been excluded on a non-GAAP basis.
D For the three and nine months ended March 28, 2014, Restructuring and other, net, primarily related to our existing restructuring plans have been excluded on a non-GAAP basis.
E For the three and nine months ended March 28, 2014, Other expense, net, has been adjusted on a non-GAAP basis primarily to exclude the impact of losses recognized on the early redemption of debt, partially offset by gains recognized upon the sale of certain strategic investments.
F For the nine months ended March 28, 2014, Benefit from income taxes has been adjusted on a non-GAAP basis primarily to exclude the impact related to the release of valuation allowance on U.S. deferred tax assets associated with increases in the Company's forecasted U.S. taxable income.
UpGuard has become a member of the Center for Internet Security (CIS), and will continue to help businesses expand visibility into their cyber risk by providing hardening benchmarks to all customers. By incorporating these benchmarks, UpGuard's CSTAR solution builds on its lead in providing the most complete assessment of both internal and external cyber risk. CIS benchmarks are a widely accepted set of hardening guidelines that have been publicly available for years. Numerous solutions exist t...
Jul. 26, 2016 11:45 AM EDT Reads: 525
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 26, 2016 10:45 AM EDT Reads: 1,710
Choosing the right cloud for your workloads is a balancing act that can cost your organization time, money and aggravation - unless you get it right the first time. Economics, speed, performance, accessibility, administrative needs and security all play a vital role in dictating your approach to the cloud. Without knowing the right questions to ask, you could wind up paying for capacity you'll never need or underestimating the resources required to run your applications.
Jul. 26, 2016 10:37 AM EDT Reads: 213
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
Jul. 26, 2016 10:15 AM EDT Reads: 1,174
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
Jul. 26, 2016 10:00 AM EDT Reads: 978
The competitive landscape of the global cloud computing market in the healthcare industry is crowded due to the presence of a large number of players. The large number of participants has led to the fragmented nature of the market. Some of the major players operating in the global cloud computing market in the healthcare industry are Cisco Systems Inc., Carestream Health Inc., Carecloud Corp., AGFA Healthcare, IBM Corp., Cleardata Networks, Merge Healthcare Inc., Microsoft Corp., Intel Corp., an...
Jul. 26, 2016 09:45 AM EDT Reads: 922
SYS-CON Events announced today the Kubernetes and Google Container Engine Workshop, being held November 3, 2016, in conjunction with @DevOpsSummit at 19th Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA. This workshop led by Sebastian Scheele introduces participants to Kubernetes and Google Container Engine (GKE). Through a combination of instructor-led presentations, demonstrations, and hands-on labs, students learn the key concepts and practices for deploying and maintainin...
Jul. 26, 2016 09:45 AM EDT Reads: 752
StackIQ has announced the release of Stacki 3.2. Stacki is an easy-to-use Linux server provisioning tool. Stacki 3.2 delivers new capabilities that simplify the automation and integration of site-specific requirements. StackIQ is the commercial entity behind this open source bare metal provisioning tool. Since the release of Stacki in June of 2015, the Stacki core team has been focused on making the Community Edition meet the needs of members of the community, adding features and value, while ...
Jul. 26, 2016 09:45 AM EDT Reads: 324
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Jul. 26, 2016 09:30 AM EDT Reads: 1,067
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Jul. 26, 2016 09:15 AM EDT Reads: 1,007
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Jul. 26, 2016 09:02 AM EDT Reads: 211
Ovum, a leading technology analyst firm, has published an in-depth report, Ovum Decision Matrix: Selecting a DevOps Release Management Solution, 2016–17. The report focuses on the automation aspects of DevOps, Release Management and compares solutions from the leading vendors.
Jul. 26, 2016 09:00 AM EDT Reads: 1,691
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
Jul. 26, 2016 09:00 AM EDT Reads: 1,952
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Jul. 26, 2016 08:45 AM EDT Reads: 1,312
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Jul. 26, 2016 08:45 AM EDT Reads: 601