WD Expects 4FQ16 Revenue at $3.46 Billion, Forecast Was $3.35 Billion to $3.45 Billion

Western Digital Corp. announced the appointment of Mark Long to oversee the company’s finance organization as EVP, finance, in addition to his role as chief strategy officer.

Long will succeed Olivier Leonetti as CFO on Sept. 1, 2016. Leonetti is leaving the company to pursue other opportunities but will continue as CFO through Sept. 1, 2016, reporting to CEO Steve Milligan, and will oversee the completion of the company’s fiscal year-end reporting requirements. He will continue in an advisory role to the CEO through Oct. 1, 2016.

Mark Long, 49, was appointed as the company’s EVP, chief strategy officer, effective August 2015 and, prior to that, served as EVP, strategy and corporate development, since February 2013. Prior to that, from March 2012 to February 2013, he served in various consulting capacities for the company. Prior to that, from July 2010 to March 2012, he served as senior VP, strategy and corporate development at HGST, which was acquired by the company in March 2012. From August 2005 to July 2010, he served as MD of VisionPoint Capital, where he provided merger and acquisition and corporate finance services to a range of technology companies, including Fabrik, Inc., which was acquired by HGST in April 2009. Prior to that, he served as a senior executive with both public and private venture-backed technology companies and was an investment banker with Credit Suisse First Boston and Deutsche Bank Securities. Among his duties as EVP, chief strategy officer, he also leads Western Digital Capital, WD’s wholly-owned strategic investment fund.

In connection with his appointment as EVP, finance and chief strategy officer, the compensation committee of the board of directors approved an increase in his annual base salary level to $625,000 and an increase in his target annual bonus opportunity under the company’s incentive compensation plan to 110% of his annual base salary. Long will also be eligible to receive annual long-term incentive equity awards in fiscal 2017 having a grant date fair value, measured at the target level for any performance-based equity awards, equal to $2.8 million, with such awards to be granted by the compensation committee in accordance with the company’s long-term incentive award guidelines as well as an additional number of performance stock units having a grant date fair value of $1.7 million, with such awards to be subject to any applicable performance conditions approved by the compensation committee. In connection with the foregoing, Long has agreed to forfeit certain performance stock units, covering a ‘target’ number of 13,978 stock units, which were previously awarded to him in September 2015.

“The company is going through a strategic and organizational transformation with the integration of our HGST and WD subsidiaries as well as integrating the recently completed acquisition of SanDisk,” said Milligan. “Although in the early stages, we are already seeing the benefits of these strategic steps. As we build on our strategy-driven focus in a tightly integrated manner, it is the right time to combine the strategy and finance organizations and Mark Long is the right leader of this integrated team, with his extensive experience in financial and strategic planning. Olivier Leonetti has made a tremendous contribution to Western Digital in nearly two years as CFO. He played a key role through the successful planning, financing and completion of the SanDisk acquisition. The company is grateful for his contribution and his continued stewardship of our finances through the fiscal year-end reporting process.”

“I am proud of what we have accomplished at Western Digital, particularly the successful completion of the transaction with SanDisk,” said Leonetti, who joined WDC as CFO in 2014. “Western Digital has a first-class executive team and I am confident that the finance and strategy organization is in good hands with Mark.”

“I am honored to succeed Olivier and look forward to working with the entire team as we continue on the path of long-term value creation for all of our stakeholders,” said Long. “I cannot think of a more exciting time to step into this position as we integrate and evolve. There are significant opportunities ahead of us as we come together and strive to reach our potential as the leading storage solutions provider.”

Long played a lead role in conceiving, executing and completing the SanDisk acquisition in addition to several other acquisitions.

Preliminary Fourth Fiscal Quarter Financial Results
Sets Q4 Earnings Call for July 28th
The company also reported preliminary financial results for its fourth fiscal quarter ended July 1, 2016. Reflecting the ownership of SanDisk Corp. as of May 12, 2016, the company now expects its fourth quarter revenue to be approximately $3.46 billion, compared to its earlier forecast of $3.35 billion to $3.45 billion. Non-GAAP gross margin is expected to be approximately 31%, consistent with its earlier forecast. The company now expects fourth quarter EPS, on a non- GAAP basis, to be approximately $0.72, compared with its earlier forecast range of $0.65 to $0.70.