Press Releases

SANDISK ANNOUNCES SECOND QUARTER 2010 FINANCIAL RESULTS

jul 22, 2010

Milpitas, CA, July 22, 2010 - SanDisk Corporation (NASDAQ:SNDK), the global leader in flash memory cards, today announced results for the second quarter ended July 4, 2010.  Total second quarter revenue of $1.18 billion increased 61% on a year-over-year basis and increased 9% on a sequential basis.  Net income, in accordance with U.S. Generally Accepted Accounting Principles (GAAP), was $258 million, or $1.08 per diluted share, compared to GAAP net income of $53 million, or $0.23 per diluted share, in the second quarter of 2009 and GAAP net income of $235 million, or $0.99 per diluted share, in the first quarter of 2010.

On a non-GAAP basis, which excludes the impact of share-based compensation expense, amortization of acquisition-related intangible assets, non-cash economic interest expense associated with the cash-settled convertible note, and related tax adjustments and valuation allowance, second-quarter net income was $258 million, or $1.08 per diluted share, compared to net income of $83 million, or $0.36 per diluted share, in the second quarter of 2009 and net income of $225 million, or $0.95 per diluted share, in the first quarter of 2010.  For reconciliation of non-GAAP to GAAP results, see accompanying financial tables and footnotes.

"SanDisk delivered another excellent quarter, with OEM demand driving record unit and gigabytes sold.  We achieved 47% total gross margin, due to cost reductions and a stable pricing environment.  We exited the quarter with a record high cash balance of $3.7 billion or $2.6 billion net of debt.  For the second half of the year, demand from our diversified customer base is very strong.  We expect our recent announcement of our Fab 5 joint venture with Toshiba to allow us to meet our customers' growing demand for flash in the coming years", said Eli Harari, Chairman and CEO of SanDisk.

SECOND QUARTER 2010 METRICS & HIGHLIGHTS

  • Total revenue was $1.18 billion, up 61% year-over-year and up 9% sequentially.
  • Product revenue was $1.09 billion, up 79% year-over-year and up 10% sequentially.
  • License and royalty revenue was $88 million, down 27% year-over-year and down 6% sequentially.
  • Total gross profit, product gross profit and operating income compared on a year-over-year and sequential basis are shown in the table below:
Metric
in millions of US$, except %
GAAP Non - GAAP
Q210 Q209 Q110 Q210 Q209 Q110
Total gross profit
% of total revenue
$546
46.3%
$249
34.1%
$500
46.0%
$551
46.7%
$255
34.8%
$506
46.5%
Product gross profit
% of product revenue
$459
42.0%
$129
21.1%
$407
40.9%
$463
42.4%
$134
22.0%
$412
41.5%
Operating income
% of total revenue
$359
30.4%
$68
9.4%
$314
28.9%
$377
32.0%
$94
12.9%
$334
30.8%
  • Cash flow from operations was $385 million and free cash flow was $363 million.
  • Total cash and equivalents, short and long-term marketable securities at the end of the second quarter were $3.7 billion compared to $2.3 billion at the end of the second quarter of 2009 and $3.3 billion at the end of the first quarter of 2010.
  • Average price per gigabyte sold declined 18% on a year-over-year basis and declined 8% sequentially.

 OTHER RECENT KEY ANNOUNCEMENTS

  • Separately today, SanDisk announced that Dr. Eli Harari, Founder, Chairman and Chief Executive Officer, will retire from his current positions on December 31, 2010. As part of the succession planning process, the Board of Directors appointed Sanjay Mehrotra, currently SanDisk's President and Chief Operating Officer, as the new Chief Executive Officer of the company, effective January 1, 2011. Mr. Mehrotra was appointed to the Company's Board of Directors effective July 21, 2010. The Board also appointed Michael Marks, a member of the SanDisk Board since 2003, to the role of Chairman effective January 1, 2011.
  • SanDisk and Toshiba signed primary agreements towards forming their third 300 millimeter joint venture that will build and operate a new NAND wafer fab, Fab 5, in Yokkaichi, Japan. 
  • SanDisk began shipping its SanDisk® SDTM "write once read many" (WORM) card with 1 gigabyte of capacity.  The WORM card is ideal for archival purposes, with data storage of up to 100 years.
  • SanDisk introduced its next-generation multi-level cell NAND based solid-state drive, SanDisk® SSD G4, and modular solid-state drive, SanDisk® SSD P4, with capacities up to 256 gigabytes and 128 gigabytes, respectively. 

CONFERENCE CALL

SanDisk's second quarter 2010 conference call is scheduled for 2:00 P.M., Pacific Time, Thursday, July 22, 2010.  The conference call will be webcast and can be accessed live, and throughout the quarter, at SanDisk's website at http://www.sandisk.com/IR.  To participate in the call via telephone, the dial-in number is 719-325-4819 and the dial-in password is 8237874.  A copy of this press release will be furnished to the Securities and Exchange Commission on a current report on Form 8-K and will be posted to our website prior to the conference call.

SCHEDULED INTERVIEWS

SanDisk Corporation Chairman and Chief Executive Officer, Eli Harari, is scheduled to appear on CNBC's "Power Lunch," on Friday, July 23, 2010, at approximately 10:20 A.M., Pacific Time.

FORWARD LOOKING STATEMENTS

This news release contains certain forward-looking statements, including statements about our business prospects and outlook, our expectations for fiscal year 2010 and our expectations regarding our business, including expected growth in flash memory demand in 2010 and beyond, our ability to obtain supply to meet that demand and our customer base, that are based on our current expectations and are subject to numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate and may significantly harm our business, financial condition and results of operations.  Risks that may cause these forward-looking statements to be inaccurate include among others:

  • competitive pricing pressures, resulting in lower average selling prices and lower or negative product gross margins;
  • less than anticipated demand, including due to economic weakness in our markets and among consumers generally;
  • unpredictable or changing demand for our products, particularly for certain form factors or capacities;
  • excess captive memory output or capacity which could result in write-downs for excess inventory, lower of cost or market reserves, fixed costs associated with under-utilized capacity, or other consequences;
  • insufficient captive and non-captive memory supply to meet demand;
  • insufficient non-memory materials or capacity from our suppliers and contract manufacturers to meet demand; or increases in cost of non-memory materials or capacity;
  • our products may not perform as expected; and
  • other risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our Quarterly Report on Form 10-Q for the first quarter of fiscal 2010.

FORWARD LOOKING STATEMENTS REGARDING EXECUTIVE TRANSITION

This press release contains certain forward-looking statements, including statements about the retirement of Mr. Harari, the promotion of Mr. Mehrotra, the appointment of Mr. Marks  and the expected performance of SanDisk, particularly in the quotes included above that are based on SanDisk's current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate, including, among others:  that either Mr. Mehrotra or Mr. Marks is no longer with the Company or otherwise does not assume their new positions with SanDisk on the effective time of such appointment, that this leadership transition is not successful, or that SanDisk does not perform as expected and the other risks detailed from time-to-time in SanDisk's Securities and Exchange Commission filings and reports, including, but not limited to, under the caption "Risk Factors" and elsewhere in SanDisk's most recent annual report on Form 10-K and SanDisk's subsequent quarterly reports on Form 10-Q.  The parties do not intend to update the information contained in this release.

ABOUT SANDISK

SanDisk Corporation is the global leader in flash memory cards, from research, manufacturing and product design to consumer branding and retail distribution.  SanDisk's product portfolio includes flash memory cards for mobile phones, digital cameras and camcorders; digital audio/video players; USB flash drives for consumers and the enterprise; embedded memory for mobile devices; and solid state drives for computers.  SanDisk is a Silicon Valley-based S&P 500 company, with more than half its sales outside the United States.

SanDisk and the SanDisk logo and are trademarks of SanDisk Corporation, registered in the United States and other countries.  SD is a trademark of SD-3C LLC.  Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s).

SanDisk Supporting Document (.pdf)

Q2 2010 Financial Tables

Contact:
Investor Contact: Media Contact:
Jay Iyer Ryan Donovan
(408) 801-2067 (408) 801-2857

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Contato de Imprensa da SanDisk

press@sandisk.com