Western Digital 2007 Annual Report Download - page 3
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FELLOW SHAREHOLDERS:
Fiscal 2007 was another strong year for Western Digital, demonstrating
the flexibility and consistency of our efficient business model.
Customer satisfaction with WD’s broad product line, superior quality and
reliability, service excellence and a solid overall value proposition continue
to drive our business growth. The fiscal 2007 performance provides
further evidence of steady financial results and continued excellence in
execution by the WD team:
• Revenue in fiscal 2007 was $5.5 billion, an increase of 26 percent
from last year.
• Earnings per share of $2.50 compared with $1.76 per share in
fiscal 2006, a 42 percent increase.
• We generated over $600 million in cash from operations during
fiscal 2007, a 68 percent improvement over 2006, and ended the year
with $907 million of cash and short-term investments, an increase of
30 percent over the prior fiscal year.
• Fiscal 2007 represented our fifth consecutive year of substantial
growth in our research and development and capital spending to
support a significant deepening and acceleration of our technology
capability and a broadening of our product portfolio. Over the five-year
period, we have grown our investment spending 270 percent, from
$170 million in fiscal 2002 to $630 million in fiscal 2007.
• While maintaining our focus in the high-volume desktop market, we
have made major strides in growing our footprint in non-traditional
markets such as 2.5-inch notebook drives, branded products,
consumer electronics (CE) and Serial ATA (SATA) drives for the
enterprise space.
• We more than doubled our 2.5-inch drive shipments, year-over-year,
to 12.3 million units.
• Revenue from Branded Products grew by over 180 percent
year-over-year to more than $870 million as we established an
industry-leading position in a market segment that surged to
prominence as consumers began taking seriously the need to backup
and remotely access their valuable digital content.
• In Enterprise SATA, the fastest growing segment of enterprise storage,
we led the industry in introducing 3.5-inch SATA solutions in 2003.
Our share in this segment is now similar to our position in the desktop
and CE markets.
• As a result of this activity in newer markets, we have seen our revenue
from non-desktop PC drives expand to 43 percent of revenue in
fiscal 2007, compared with 29 percent in fiscal 2006 and we exit the
year with almost 50 percent of revenues derived from non-desktop
applications.
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While maintaining our focus in the high-volume
desktop business, we have made major strides
in growing our footprint in new markets. This has
resulted in a 50% increase in revenue over the past
two years.
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$OLLARSÖINÖMILLIONS
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WD’s continued consistent performance resulted in
fiscal 2007 operating income of $415 million.
John F. Coyne, President and Chief Executive Officer