Western Digital 1996 Annual Report Download - page 5

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We enter the high-end enterprise drive business with new products that have deep roots in
Western Digital’s long-time technological leadership. They share our traditional desktop prod-
ucts’proven manufacturing, test and quality-assurance disciplines. We will continue our focus
on outstanding execution with planned rapid but controlled growth in this, the most profitable
sector of the drive business, and we expect to see substantial sales results beginning in the
current fiscal year.
Operations of Western Digital’s Microcomputer Products Group were sold in three transactions
last year, resulting in gains totaling $17.3 million. These dispositions will enable us to focus on
the hard drive business that we know best, and where we see the greatest opportunity.
The Company invested $259 million in capital and product development last year. Despite these
significant investments,Western Digital remains 100 percent debt-free. We generated $58 million
in cash flow from operations, the balance sheet is superb, and we have ample cash and credit
resources for foreseeable needs.
To date,Western Digital has repurchased 8.8 million of its common shares for $149 million,
or an average cost of $17 a share. Depending on market conditions, an additional 2.3 million
shares can be acquired under our Board of Directors authorization, for a total of up to 11.1
million shares.
The Western Digital brand continues to earn customer loyalty because of its reputation and
performance, both in our products and in the organization that stands behind them. As a brand
is a promise to deliver certain attributes of a product or a company, we aim to provide those
attributes that our customers need, expect and deserve. We will not fail in our determination
to maintain the highest quality in the industry, which will continue to build customer satisfac-
tion and customer loyalty and preserve the great value in the Western Digital brand.
The opportunity going forward is huge. Demand is strong for both our Personal Storage
and Enterprise Storage Groups’products. Industry analysts expect hard drive unit growth to
continue at more than 20 percent through the remainder of this decade. Our plants are among
the industry’s most efficient, our financial condition is excellent and our people are motivated.
Western Digital is ready to keep on growing.
Sincerely,
Charles A. Haggerty
Chairman, President and Chief Executive Officer
September 30, 1996
Western Digital Corporation