Western Digital, IRVINE
Nature of Business: Designs and manufacturers advanced semiconductor devices for the microcomputer industry.
Employees Total: 6,509
In Orange County: 1,580
Stock Listed in The Times: On NYSE as “WDigitl”
Ticker Symbol: “WDC”
Friday’s Stock Close: $3.13
One-Week Change: None
Analyst Review: “The major reason for Western Digital’s difficulty is its disk drive operation. They bought Tandon Computer’s disk drive division three years ago at a time when the industry was seeing a significant downturn. Not only have stock prices fallen, but they’re in trouble with their loan companies because retained earnings have fallen to a point that they have had to take on more debt. But the company is not insolvent. They sold one of their divisions to a New York company, and when the monies are transferred, they will have enough cash to get by for the next three to six months. In the next two to five years, they’ll scrape by. I’m not recommending the stock. I’m telling investors to stay away until we get the restructuring agreements in place. Right now, it’s too risky.” -- Richard L. Whittington, analyst, Kidder, Peabody & Co. Inc., New York
SALES VS. PROFITS
Fiscal year ending June 30 June 30 June 30 1 Qtr. 1 Qtr. 1989 1990 1991 1991 1992 Net Sales $992.1 $1,074 $986.2 $294.8 $253.3 Net Profit (Loss) $34.4 $24.2 ($134.2) $9.5 -$26.5
Corporate Outlook: “The personal computer industry is going through major structural changes, exacerbated by the recession. This has led to an overall softness in demand and deteriorating product prices in Western Digital’s markets, and our recent financial results have been severly impacted by these factors. Early in the down cycle, we took many steps such as plantclosings, work force reductions, and inventory writedowns to restructure the company. We arestill in the process of finalizing our financial restructuring, and our profits and cash willremain under pressure for several quarters. We believe, however, that the actions we have taken--combined with a strong set of new products aimed at the high performance desktop andlaptop/notebook personal computer markets--will enhance our position when the economy andindustry come back.” -- Roger W. Johnson, chairman/president/CEO
RETURN ON INVESTMENT: 3-YEAR SUMMARY AND YEAR-TO-DATE
Fiscal year ending June 30 June 30 June 30 1 Qtr. 1989 1990 1991 1991 52-Week High $16.25 $14.88 $14.25 $14.25 52-Week Low $8.63 $5.75 $3.50 $5.38 Book Value Per Share* $10.42 $11.03 $6.34 $9.76 Net Earnings (Loss) Per Share $1.18 $0.82 ($4.59) $0.32 Price-to-Earnings Ratio 9:1 16:1 N/A 5:1 Avg. Return on Investor Equity 11% 8% N/A 12%
Fiscal year ending 1 Qtr. 1992 52-Week High $4.13 52-Week Low $2.50 Book Value Per Share* $5.17 Net Earnings (Loss) Per Share ($0.91) Price-to-Earnings Ratio N/A Avg. Return on Investor Equity N/A
Source: Western Digital Corp For more information call or write, Western Digital Corp.: 8105 Irvine Center Drive, Irvine, Calif., 92718. (714) 932-5000
