History 2003: Response of Seagate to Distorted Financial Figures

In the last issue of StorageNewsletter.com, as well as in our August number, we expressed some surprise that the figures published by Seagate for its FY02 and 2FQ03 did not correspond to those supplied by the company a year earlier.

At last, the company has issued a response to our email query for an explanation. Here it is, for anyone who can make head or tail of it.

SN: In the press release concerning the 2003 just published, the figures are $1,629 million for revenue for 2FQ02 and $2,923 million for the first six-month period. It’s $124 million and $158 million for net income respectively. But, if we go back to the figures published by Seagate one year ago for the same periods of FY02, they are different: $1,718 million and $3,46 million for sales respectively. It was proforma pre-tax income of $42 million and net losses before taxes of $1,093 million for the quarter and $981 million for the six-month period. Do you have any explanation?

Seagate: To help eliminate confusion, please note that some of your comparisons of Seagate’s financials are from 2 years prior which includes activities from Affiliated Companies that Seagate no longer has any association with (either as a result of our privatization and going public again as well other strategic decisions Seagate has made).

The revenue figures of $1,718 million and $3,466 million are for the quarter and six months ended December 29, 2000 (FY01) for Seagate and its affiliated companies (known as New SAC).

These figures as well as the pro forma figures mentioned in your e-mail can be found in our public release on January 10, 2002 which is comparing the quarters and 6-month periods ended December 28, 2001 and December 29, 2000 (FY02 and FY01) for Seagate and its Affiliated Companies (known as New SAC).

Additionally our public financial release dated January 9, 2003 is comparing the quarters and 6-month periods ended December 27, 2002 and December 28, 2001 (FY03 and FY02) for the new company, Seagate Technology (as per the name change on December 13, 2002 from Seagate Technology Holdings).

Here is a breakdown of Seagate and its affiliated companies (known as New SAC). These business’ operating results were included in the public releases of earnings through our press releases dated April 11, 2002: Seagate Technology HDD business, XIOtech Corp. (SAN business), Seagate Technology Removable Storage Solutions (tape drive business), Crystal Decisions (software business), Seagate Technology Investment Holdings.

The following is a breakdown ofSeagate Technology (formerly Seagate Technology Holdings). These business’ operating results were included in the public releases of earnings beginning with our press release dated July 17, 2002.

Note [Seagate’s]: XIOtech (Seagate’s SAN business) was sold on November 4, 2002. Subsequently, XIOtech’s operating results are reflected in all releases of earnings up to the date that it was sold.