Seagate Technology Reports Fiscal First Quarter 2023 Financial Results

• Revenue $2.04 billion

• GAAP diluted earnings per share (EPS) of $0.14; $0.48 non-GAAP diluted EPS

• Operating cash flow of $245 million and free cash flow of $112 million

• The restructuring plan was announced with projected annual savings of about $110 million

• It announced a cash dividend of $0.70 per share

FREMONT, Calif., Oct. 26, 2022 –(BUSINESS WIRE)–Seagate Technology Holdings plc (NASDAQ: STX ) (the "Company" or "Seagate") today released its financial results for the first fiscal quarter ended September 30, 2022 .

“Global economic uncertainty and broad customer supply intensified in the latter stages of the September quarter, and these dynamics were reflected in Seagate's near-term industry demand and financial performance. We have acted quickly and decisively to respond to today's markets. conditions and improving long-term profitability, including adjusting our annual production and capital expenditure plans and announcing a restructuring plan that will deliver significant cost savings while maintaining investments in capacity solutions that will drive our growth going forward ," said Dave Mosley, head of Seagate…

"We are continuing to meet our development milestones for our 30+ terabyte product range based on the latest HAMR technology. Our team is well on our way to innovation and we see strong customer engagement. We are confident that we will move beyond the current macroeconomic uncertainty.” Long-term demand for storage capacity, driven by underlying data growth, and believes Seagate is well positioned to take advantage of long-term growth opportunities.

During the first fiscal quarter, the Company generated $245 million in operating cash flow and $112 million in free cash flow, paid $147 million in cash dividends and paid $5.4 million in common stock repurchases for $408 million. The company raised $600 million in new capital through a new term loan, which was raised from a fiscal first quarter with cash and cash equivalents totaling $761 million. At the end of the quarter, 206 million common shares were issued and outstanding.

See the attached financial table for a detailed reconciliation of GAAP and non-GAAP results.

Seagate has released supplemental financial information documents which are available on Seagate's investor relations website at investor.seagate.com.

Quarterly cash dividend

The Company's board of directors (the "Board of Directors") has declared a quarterly cash dividend of $0.70 per share, payable on January 5, 2023 to stockholders of record at the close of business on December 21, 2022. Future Quarterly Payments of dividends are subject to the election of the Board of Directors and subject to Seagate's financial condition, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant to the recommendation.

restructuring plan

On October 24, 2022, the Company's Board of Directors approved and initiated a restructuring plan (the "Plan") aimed at reducing the cost structure to better align the Company's operational needs with current economic conditions, while continuing to support the long-term business strategy . . . . . The plan includes a global workforce reduction of approximately 3,000 employees, or 8% of the global workforce, and other cost-cutting measures.

The plan, which the company expects to be substantially completed by the end of the second fiscal quarter of 2023, is expected to generate a total pre-tax cost of $60 million to $70 million. The expense is expected to be primarily cash and consist of severance pay and other one-time termination benefits.

The company expects ongoing savings of approximately $110 million on an annualized basis beginning in the third quarter of fiscal 2023.

business prospects

The business outlook for the second quarter of 2023 is based on our current assumptions and expectations; Actual results could differ materially due to, among other things, the important factors discussed in the “Cautionary Notes Regarding Forward-Looking Statements” section of this press release.

The company provides the following guidance for the second fiscal quarter of 2023:

• $1.85 billion in revenue, plus or minus $150 million

• Non-GAAP diluted EPS of $0.15 plus or minus $0.20

Non-GAAP guidance for diluted earnings per share excludes recognized pre-tax costs related to amortization of acquired intangible assets of $0.01 per share, estimated share-based compensation expense of $0.18 per per share and restructuring costs of $0.18 per share from $0.29 to $0.34 per share.

We have not reconciled our non-GAAP diluted earnings per share guidance for the second quarter of fiscal year 2023 to the most comparable GAAP measure due to material items that may affect measures that are outside of our control and/or not can reasonably be expected, including but not limited to accelerated depreciation, write-offs and other costs associated with cost-saving measures, pandemic-related control costs, losses and costs of modification or write-offs and settlement of debts, losses (profits) or damage to strategic investments, income tax adjustments for these actions and other costs or benefits that may arise. The amount for this action is not currently available, but it may affect future results. A reconciliation of non-GAAP diluted earnings per share guidance for the second quarter of fiscal year 2023 to the appropriate GAAP measures is not available without undue effort. A reconciliation of our historical non-GAAP financial measures to the closest GAAP equivalent is included in this press release.

communication with investors

Seagate management will meet today at 6:00 am. PT / 9:00 a.m. ET will host a public webcast available on its investor relations page at investor.seagate.com.

An archived audio broadcast of this event will be available on Seagate's investor relations website at investor.seagate.com once the event has concluded.

About Seagate

Seagate technologies shape the data realm and help maximize human potential by developing precision engineered data management and storage solutions with a focus on sustainable partnerships. The company has been a global leader in technology for more than 40 years and has used more than three billion terabytes of data capacity. To learn more about Seagate, visit www.seagate.com or follow us on Twitter, Facebook, LinkedIn, YouTube and subscribe to our blog.

© 2022 Seagate Technologies LLC. All rights reserved. Seagate, Seagate Technology and the Spiral logo are registered trademarks of Seagate Technology LLC in the US and/or other countries.

Be careful with forward-looking statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide actual expectations of future events based on certain assumptions and include any statements that are not direct facts. historical. Forward-looking statements include, but are not limited to, statements regarding the Company's plans, programs, strategies and prospects; financial outlook for the coming period, including the second fiscal quarter of 2023; expectations regarding logistical, macroeconomic or other factors affecting the Company and its ability to execute the plan as currently intended; Statements and beliefs regarding the outcome of any governmental or legal action or event and their effect on the Company; changes in the assumptions on which projected costs related to the plan are based; Expectations regarding market demand for our products, our ability to optimize our production levels, our ability to reduce costs, trends in the warehousing industry, our ability to meet market and industry expectations and the impact of future trends in the technological performance developments of the company; Expectations regarding the impact of the pandemic on global economic conditions and other macroeconomic disruptions, including the possibility or significance of continued supply chain disruptions, high inflation and high interest rates; and expectations regarding the company's business strategy and performance and dividend distribution plans for the fiscal quarter ending December 30, 2022 and thereafter. Forward-looking statements generally can be identified by words such as "expects," "intends," "plans," "expects," "believes," "estimates," "predicts," "anticipates," "should," "estimates ". "." . may', 'must', 'must', 'must', 'must', 'may' or the negative forms of these words, variations of these words and comparable terminology, each of which is intended to refer to events or circumstances However, the absence of similar words or expressions does not mean that any statement is not forward-looking. Forward-looking statements are subject to various uncertainties and risks that could cause our actual results to differ materially from experience and historical expectations.uncertainty forecasts including, but not limited to, those discussed in "Risk Factors" and "Disclosure and Analysis of Financial Condition and Acquisition Proceeds" in the Company's Annual Report on Form 10-K for the year financial statements ended on July 1, 2022, in the filing with the United States Securities and Exchange Commission on August 5, 2022. Undue reliance should not be placed on the statements of inf forward-looking statements are not included in this press release, which is based on information available to us as of the date of this press release and speaks only as of that date. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date they are made, except as required by law.

Seagate's website address is included in this press release for convenience only. Information contained or available on Seagate's websites and social media channels is not part of this press release.

Use of non-GAAP financial information

The companies use non-GAAP measures of gross revenue, gross margin, operating expenses, operating income, operating margin, net income, diluted EPS and adjusted free cash flow from results based on GAAP for specific performance , costs, profits and losses. These non-GAAP financial measures are provided to improve users' overall understanding of a company's current financial performance and future prospects. In particular, the Company believes that non-GAAP results are useful information to management and investors because these non-GAAP results exclude certain benefits, costs, gains and losses that are not believed to be representative of the primary operating results and because they are similar to the approach used in relation to financial models and forecasts produced by financial analysts covering the company.

These non-GAAP results are part of the metrics that management uses to evaluate the company's performance, allocate resources and plan for future periods. The reported non-GAAP results should be considered only in addition to the results prepared in accordance with GAAP and should not be interpreted as a substitute for, a substitute for or superior to the GAAP results. These non-GAAP measures may differ from the non-GAAP measures used by other companies in their industry.

The company's non-GAAP measures are adjusted for:

Accelerated depreciation, amortization and other costs related to cost reduction efforts

These expenses are excluded from non-GAAP measures due to discrepancies in amount and frequency, and are issued to provide a more meaningful assessment of the Company's current operating performance and comparison to prior period operating performance.

Amortization of purchased intangible assets

The Company recognizes amortization of intangible assets acquired through a business combination over their estimated useful lives. These costs vary in magnitude and are strongly influenced by the timing and size of the company's acquisition. Accordingly, these costs are excluded from non-GAAP measures to provide a more meaningful assessment of current operating performance and comparison to prior period operating performance.

Stock-based compensation

This expense consists primarily of expenses related to employee stock awards. Given the variety of stock prices used by companies, the different methods used to determine stock-based compensation cost, the subjective assumptions involved in making these determinations, and the volatility of valuations, which may be affected by conditions of the market beyond that of the company. control. believes that the exclusion of stock-based compensation costs improves the ability of management and investors to understand and evaluate the Company's fundamental performance over time and to compare it to the Company's peers, most of which also exclude stock-based compensation costs based on shares from non-GAAP results.

Restructuring and other, clean

Restructuring and other costs, net, are costs related to the restructuring plan, which are primarily related to costs related to downsizing, closing certain facilities and other related costs. It also does not include costs or gains from the sale of real estate. These costs or benefits do not reflect the company's ongoing operating performance and are therefore excluded from non-GAAP measures to provide a more meaningful assessment of current operating performance and comparison to historical period operating performance.

Other costs

Other expenses mainly include IT transformation costs. These costs vary in amount and frequency and are excluded from non-GAAP measures to provide a more meaningful assessment of current operating performance and comparison to historical operating performance.

The costs of pandemic lockdown

Pandemic lock-in cost is an unused cost incurred at our facility in Wuxi, China as a result of pandemic control measures. These costs vary in amount and frequency and are excluded from non-GAAP measures to provide a more meaningful assessment of current operating performance and comparison to historical operating performance.

Losses and Costs of Modification or Redemption and Repayment of Debts

From time to time, the Company will incur losses and expenses as a result of the repayment and settlement of certain long-term debt obligations. The capital loss is the difference between the repayment cost and the face value of the debt written off. Expenses include certain costs related to the modification or cancellation of debt and the amortization of any unamortized costs of issuing debt instruments in connection with the cancellation of debt. The amount of these costs may be volatile and change depending on the timing of debt repayment and therefore are excluded from non-GAAP measures to provide a more meaningful assessment of current operating performance and comparison to prior operating periods. Achievement.

Loss (gain) or impairment on strategic investments

From time to time, the Company will experience a loss, gain or impairment on strategic investments that are measured and carried at fair value using the equity method, such as available-for-sale debt securities or regulated by an adjustment to increasing or decreasing accounting values. below.. alternative measurement if an observable impairment or price adjustment is recognized in the current period that is not considered part of continuing operating performance. The resulting costs, gains or losses vary in amount and frequency and are therefore excluded from non-GAAP measures to provide a more meaningful assessment of current operating performance and comparison to prior period operating performance.

Income tax adjustment

Income tax allowance or gain is the tax effect of a non-GAAP adjustment determined using the hybrid method with and without the effective tax method and rate for the applicable adjustment and jurisdiction.

free movement of capital

Free cash flow is a non-GAAP measure defined as net cash from operations less purchases of property, plant and equipment and rent increases. Free cash flows do not reflect non-monetary items, net cash used or provided by financing activities and net cash used or provided by investing activities, except for purchases of property, plant and equipment and rent increases . This non-GAAP financial measure is used by management to evaluate the company's liquidity resources, capital structure and operating performance.

View the source version at businesswire.com: https://www.businesswire.com/news/home/2221026005040/en/

contact

Contact Investor Relations:
Shanye Hudson, (510) 661-1600
[email protected]

Media contact:
Gregory Belloni, (415) 235-9092
[email protected]

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