Western Digital Corp., an Irvine computer products maker, Tuesday announced a $40-million, two-year, unsecured credit agreement with three banks.
Bank of America is the primary bank, with First Interstate Bank and Morgan Guaranty Trust Co. also participating. The agreement gives Western Digital the option to convert up to 50% of the credit line into a three-year term loan.
The new credit line gives Western Digital the financial flexibility to keep up with the rapid growth it has been experiencing in recent months.
While many other computer products companies have seen sales plummet, Western Digital, which makes storage management and communications devices, has reported steady increases in earnings.
"This agreement culminates the significant financial turnaround that has occurred at the company over the past two years," said William Brechtel, treasurer, in a statement. "The long-term confidence that this select group of banks has demonstrated in a time of industry turbulence should be comforting to our investors, as it gives additional financial flexibility in our future growth."
For the first six months of fiscal 1985, ended Dec. 31, Western Digital revenues rose 74%, to $76.7 million, while net earnings rose 102%, to $5.6 million.
William Benz, chief financial officer, said the company's financial strength is also reflected in the sale of about $60 million worth of new Western Digital shares through stock offerings in the last 15 months.