SanDisk Announces First Quarter Results.SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif. -- SanDisk This article is about SanDisk Corporation. For Computer Storage Device in Storage Area Network (SAN), see Storage Area Network. SanDisk Corporation (NASDAQ: SNDK), formerly SunDisk (R) Corporation (Nasdaq:SNDK) --Revenue of $451 million up 17% year-over-year --Net Income of $75 million up 17% year-over-year; EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. $0.39 --Operating Margin of 25% driven by strong product gross margin --Successful 90-nanometer transition SanDisk(R) Corporation (Nasdaq:SNDK), the world's largest supplier of flash storage card products, today announced results for the first quarter ended April 3, 2005. Total first quarter revenues increased 17% on a year-over-year basis to $451 million. First quarter net income was $75 million, up 17% compared to $64 million in the first quarter of 2004. Fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.39, up 15% compared with $0.34 in the first quarter of 2004. "The first quarter was another good quarter for SanDisk coming off of the strong fourth quarter holiday sales. We are particularly pleased with this quarter's profitability. Shipments from 90-nanometer chips increased to more than 80% of our first quarter's captive supply Captive supply is a term for that part of the supply that is not owned by a company but is used by the company to maximize its own profits often at the unknowing expense of those who actually own those supplies. as 90-nanometer yields exceeded our expectations. Our product gross margins grew to 37%, driven by our increased 90-nanometer output and a modest 10% sequential decline in the average price per megabyte One million bytes, or more precisely 1,048,576 bytes. Also MB, Mbyte and M-byte. See mega and space/time. (unit) megabyte - (MB, colloquially "meg") 2^20 = 1,048,576 bytes = 1024 kilobytes. 1024 megabytes are one gigabyte. . Industry-wide supply for NAND (Not AND) A Boolean logic operation that is true if any single input is false. Two-input NAND gates are often used as the sole logic element on gate array chips, because all Boolean operations can be created from NAND gates. See flash memory. memory is currently well balanced with growing demand from existing applications and new markets. Demand in the first quarter was exceptionally strong for our high capacity cards, and royalty revenues grew nicely reflecting the continuing growth of the NAND flash See flash memory. market for our licensees," said SanDisk CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Eli Harari Harari may refer to:
Financial Results and Highlights --Product revenue grew 18% and royalty revenue grew 7% year-over-year. --Megabytes sold in the first quarter increased 189% year-over-year and were down approximately 13% from the seasonally strong fourth quarter of 2004. --Average density per card sold in retail was 411 megabytes, up 125% from the first quarter of 2004 and up 15% sequentially. --Average price per megabyte sold in the first quarter declined at a moderate pace of 10% sequentially and 59% from the first quarter of 2004. --Product gross margin in the first quarter increased 5 points both year-over-year and sequentially to a record 37.2%. --Operating income was $114 million and 25% of revenue compared to $99 million and 25% of revenue in the first quarter of 2004 and $126 million and 23% of revenue in the fourth quarter of 2004. --Cash flow from operations was $134 million compared to $76 million in the first quarter of 2004 and $12 million in the fourth quarter of 2004. --The SanDisk Sansa(TM) line of digital music players Hardware or software that plays audio files encoded in MP3, AAC, WMA or other audio formats. There are several software-based music players that play audio files in a desktop or laptop computer, including iTunes, RealPlayer and Windows Media Player. began shipping at the end of the first quarter. These players have embedded Inserted into. See embedded system. flash of 512 megabyte or 1 gigabyte One billion bytes. Also GB, Gbyte and G-byte. See giga and space/time. (unit) gigabyte - 2^30 = 1,073,741,824 bytes = 1024 megabytes. Roughly the amount of data required to encode a human gene sequence (including all the redundant codons). See prefix. capacities and they have a SD(TM) card slot A socket for inserting a printed circuit board or a PC Card (CardBus card). See PC Card. for expandable storage. --Gaming cards began shipping in Memory Stick PRO Duo(TM) and SD formats to support new generation portable game consoles See video game console. that now incorporate features such as digital audio, video playback Playback could mean:
--SanDisk Ultra(R) and SanDisk Extreme(TM) high performance product lines were among our fastest growing products year-over-year. --Retail presence almost doubled year-over-year to 114,000 storefronts. Most recent additions have been in mobile handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. , convenience and gaming stores. --The new Flash Partners 300-millimeter Fab 3 began running initial test wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. in the first quarter and in February February: see month. we announced the 8Gigabit chip that is being jointly developed with Toshiba on 70-nanometer technology. Scheduled Interview SanDisk Corporation Executive Vice President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Sanjay Mehrotra, is scheduled to appear on CNBC's "Wake-Up Call", April 22, 2005 at approximately 6:50 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Judy Bruner, SanDisk's Executive Vice President, Administration and CFO See Chief Financial Officer. is scheduled to appear on Bloomberg Bloomberg A major global provider of 24-hour financial news and information including real-time and historic price data, financials data, trading news and analyst coverage, as well as general news and sports. TV "Market Line", April 22, 2005 at approximately 1:45 p.m. EDT. Conference Call SanDisk's first quarter 2005 conference call is scheduled for 2:00 p.m. Pacific Time, Thursday, April 21, 2005. The conference call will be web cast by CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network and can be accessed live, and throughout the quarter, at SanDisk's website at www.sandisk.com/IR and at www.streetevents.com for registered streetevents.com users. To participate in the call via telephone, the dial in number is (913) 981-4903. The call will also be available by telephone replay through Wednesday, April 27, 2005, by dialing (719) 457-0820 and entering the pass code 3497353. A copy of this press release will be filed with the Securities and Exchange Commission on a current report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and will be posted to our website prior to the conference call. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains certain forward-looking statements, including statements about our business outlook, expectations for new product introductions, applications, markets and customers and scheduled appearances by certain of our executives that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate and may significantly and adversely affect our business, financial condition and results of operations. Risks that may cause these forward-looking statements to be inaccurate include among others: slower than expected growth in market demand for our products or a slower adoption rate for these products in current and new markets that we are targeting, slower than expected expansion of our global sales channels, fluctuations in operating results, unexpected yield variances and longer than expected low yields and other possible delays related to our conversion to 90-nanometer and 70-nanometer NAND flash technology or the ramp-up of the new 300-millimeter flash fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. facility, any interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. of or delay in supply from any of the semiconductor manufacturing facilities that supply products to us, our inability to make additional planned smaller geometry geometry [Gr.,=earth measuring], branch of mathematics concerned with the properties of and relationships between points, lines, planes, and figures and with generalizations of these concepts. conversions in a timely manner, future average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. erosion that may be more severe than our expectations due to possible excess industry capacity of flash memory either from existing suppliers or from new competitors or decreased demand, price increases from non-captive flash memory sources and third-party subcontractors, higher than expected operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , higher than anticipated capital equipment expenditures, adverse global economic and geo-political conditions, including adverse currency exchange rates and acts of terror, the timely development, internal qualification and customer acceptance of new products that are based on the 90-nanometer and 70-nanometer NAND technologies, fluctuations in license and royalty revenues, business interruption due to earthquakes or other natural disasters, particularly in areas in the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. and Japan where we manufacture and assemble products, scheduled appearances by our executives could be cancelled or delayed by us or the network and the other risks detailed from time-to-time in our Securities and Exchange Commission filings and reports, including, but not limited to, the Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended January 2, 2005 and our quarterly reports on Form 10-Q Form 10-Q See 10-Q. . Future results may differ materially from those previously reported. We do not intend to update the information contained in this release. About SanDisk SanDisk is the original inventor INVENTOR. One who invents or finds out something. 2. The patent laws of the United States authorize a patent to be issued to the original inventor; if the invention is suggested by another, he is not the inventor within the meaning of those laws; but in that of flash storage cards and is the world's largest supplier of flash data storage card products using its patented, high-density flash memory and controller technology. SanDisk is headquartered in Sunnyvale, CA and has operations worldwide, with more than half its sales outside the U.S. www.sandisk.com SanDisk and SanDisk Ultra are trademarks of SanDisk Corporation, registered in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and other countries. Sansa and SanDisk Extreme are trademarks of SanDisk Corporation. SanDisk is an authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. of the SD trademark. Memory Stick PRO Duo is a trademark of Sony Corporation. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holders.
SanDisk Corporation
Condensed Consolidated Statements of Income
(In thousands, except per share data,
unaudited)
Three Months Ended
-------------------------
April 3, March 28,
2005 2004
--------- ---------
Revenues:
Product $399,679 $338,779
License and royalty 51,296 48,151
-------- --------
Total revenue 450,975 386,930
Cost of product revenues 251,188 231,012
-------- --------
Gross profits 199,787 155,918
Operating expenses:
Research and development 45,947 26,762
Sales and marketing 24,597 19,661
General and administrative 15,724 10,936
-------- --------
Total operating expenses 86,268 57,359
Operating income 113,519 98,559
Other income (expense), net 4,761 2,390
-------- --------
Income before taxes 118,280 100,949
Provision for income taxes 43,764 37,381
-------- --------
Net income $ 74,516 $ 63,568
======== ========
Shares used in computing net income per share
Basic 180,631 161,207
Diluted 189,999 189,403
Net income per share
Basic $ 0.41 $ 0.39
Diluted $ 0.39 $ 0.34
SanDisk Corporation
Condensed Consolidated Balance Sheets
(In thousands)
April 3, January 2,
2005 2005(a)
ASSETS (unaudited)
----------- -----------
Current Assets:
Cash and cash equivalents $ 571,805 $ 463,795
Short-term investments 842,095 859,175
Investment in foundries 18,448 20,398
Accounts receivable, net 208,810 194,535
Inventories 223,783 196,422
Deferred tax asset 92,746 83,150
Prepaid expenses, other current assets and
tax receivable 23,839 62,653
---------- ----------
Total current assets 1,981,526 1,880,128
Property and equipment, net 166,079 147,231
Investment in foundries 11,557 14,377
Investment in FlashVision 172,493 178,681
Investment in FlashPartners 23,272 24,192
Deferred tax asset 6,696 1,861
Note receivable, Flash Vision 55,504 35,413
Deposits and other non-current assets 32,937 38,297
---------- ----------
Total Assets $2,450,064 $2,320,180
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 94,482 $ 82,974
Accounts payable to related parties 64,500 48,115
Accrued payroll and related expenses 25,579 41,785
Income taxes payable 45,868 39,139
Research and development liability,
related party 6,149 5,549
Other accrued liabilities 33,178 45,584
Deferred income on shipments to
distributors and retailers and deferred
revenue 130,326 90,307
---------- ----------
Total current liabilities 400,082 353,453
Deferred tax liability 6,131 -
Deferred revenue and non-current
liabilities 18,217 26,577
---------- ----------
Total Liabilities 424,430 380,030
Commitments and contingencies
Stockholders' Equity:
Preferred stock -- --
Common stock 1,423,255 1,406,553
Retained earnings 594,756 520,240
Accumulated other comprehensive income 12,640 18,893
Deferred compensation (5,017) (5,536)
---------- ----------
Total stockholders' equity 2,025,634 1,940,150
---------- ----------
Total Liabilities and Stockholders'
Equity $2,450,064 $2,320,180
========== ==========
(a) Information derived from the audited Consolidated Financial
Statements.
SanDisk Corporation
Condensed Consolidated Comparative Statement of Cash Flows
March 2005
(in thousands, unaudited)
Three months ended
----------------------
April 3, March 28,
2005 2004
----------- ----------
Cash flows from Operating activities:
Net income 74,516 63,568
Adjustments to reconcile net income to
net cash provided by operating activities:
Deferred Taxes 1,088 0
Loss (gain) investment in foundries 4,029 573
Depreciation and amortization 14,462 7,999
Provision for doubtful accounts 0 1,681
Other non-cash charges (212) (388)
FlashVision wafer cost adjustment (487) (321)
Changes in operating assets and liabilities:
Accounts receivable (14,275) 47,120
Prepaid expenses, deposits and
other assets 43,972 28,847
Inventories (27,361) (42,814)
Income taxes payable and other accounts
payable (4,788) (32,236)
Other current liabilities (12,406) 1,752
Other current liabilities, related party 16,985 2,951
Deferred income on shipments and
deferred revenue 38,415 (2,698)
Other non-current liabilities 338 0
--------- ---------
Total adjustments 59,760 12,466
--------- ---------
Net cash provided by operating activities 134,276 76,034
--------- ---------
Cash flows from Investing activities:
Purchases of short term investments (139,198) (241,277)
Proceeds from sale of short term
investments 153,450 192,157
Acquisition of capital equipment, net (30,151) (9,410)
Loan to FlashVision (22,222) (21,637)
--------- ---------
Net cash used in investing activities (38,121) (80,167)
--------- ---------
Cash flows from financing activities:
Employee stock programs 11,272 6,015
--------- ---------
Net cash provided by financing activities 11,272 6,015
--------- ---------
Effect of changes in foreign currency
exchange rates on cash 583 0
--------- ---------
Net increase in cash and cash equivalents 108,010 1,882
Cash and cash equivalents at beginning
of period 463,795 734,479
--------- ---------
Cash and cash equivalents at end of period 571,805 736,361
========= =========
Additional information:
Net change in cash and cash equivalents $ 108,010 $ 1,882
Net change in short-term investments (17,080) 48,651
--------- ---------
Net change in cash, cash equivalents and
short-term investments $ 90,930 $ 50,533
========= =========
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