Western Digital 1995 Annual Report Download - page 16

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    .
L  C R
At July 1, 1995, the Company had $307.7 million in cash and short-term invest-
ments as compared with $243.5 million at June 30, 1994. During 1995, the
Company generated $121.3 million in cash flow from operations, with cash flow
from earnings, net of depreciation and amortization, and an increase in current
liabilities being offset by cash used to fund increased accounts receivable, invento-
ries and other assets. Capital expenditures totaled $54.8 million and were incurred
primarily for the expansion of media production and the retooling of the
Company’s Malaysian facility into a hard drive manufacturing site. The Company
anticipates that capital expenditures in 1996 will total approximately $125.0 mil-
lion and will relate to increased hard drive capacity and normal replacement of
existing assets. Approximately $10.8 million was used to repurchase 805,000
shares of the Company’s common stock in the open market in 1995. The
Company believes that its current cash and short-term investments and anticipated
future cash flow from operations will be sufficient to meet all currently planned
expenditures and sustain operations during the next fiscal year.
The Company has an $85.0 million accounts receivable facility with certain
financial institutions. The facility consists of a $50.0 million arrangement at
Eurodollar or reference rates of the participating banks which expires in 1997 and
a $35.0 million committed arrangement at a rate approximating commercial paper
rates which expires in 1996. This facility is intended to serve as a source of work-
ing capital as may be needed from time to time.
Notwithstanding the significant improvements in financial position realized
over the past years, the ability of the Company to sustain its improved working
capital management and to continue operating profitably is dependent upon a
number of factors including competitive conditions in the marketplace, general
economic conditions, the efficiency of the Company’s manufacturing operations
and the timely development and introductions of new products which address
market needs.