Press Releases

SanDisk Announces First Quarter Financial Results

Apr 17, 2008

Milpitas, CA, April 17, 2008 - SanDisk® Corporation (NASDAQ:SNDK), the world's largest supplier of flash storage card products, today announced results for the first quarter ended March 30, 2008. Total first-quarter revenue increased 8% on a year-over-year basis to $850 million and net income, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was $18 million, or $0.08 per diluted share, compared to a GAAP net loss of $0.6 million, or $0.00 per diluted share, in the first quarter of 2007.

Excluding the impact of acquisition-related charges, share-based compensation expense and the related tax effect, first quarter non-GAAP net income increased to $48 million, or $0.21 per diluted share, compared to first quarter 2007 non-GAAP net income of $45 million, or $0.19 per diluted share.

"Product sales were solid on the strength of our international business, Sansa® MP3 players and sales to the mobile handset and GPS markets. Pricing was challenging throughout the quarter due to industry-wide excess supply which adversely impacted our product gross margin," said Eli Harari, Chairman and CEO. "We expect demand to increase seasonally during the second quarter and price declines to moderate; however, product margins are expected to continue to be under pressure in Q2 with the anticipated benefit of low cost 43-nanometer and 3-bits per cell coming in the second half of the year. We are focused on cost controls and expense reductions and we continue to believe that the cumulative impact of price declines in recent quarters will accelerate the creation of new markets for Flash storage."

Key Metrics for First Quarter of 2008

  • Product revenue was $724 million, up 5% year-over-year.
  • License and royalty revenue was $126 million, up 30% year-over-year.
  • Total megabytes sold increased 189% year-over-year and decreased 9% from the record fourth quarter of 2007.
  • Average price per megabyte sold declined 61% on a year-over-year basis and 29% sequentially.
  • Average retail card capacity of 2.06 gigabytes increased 71% on a year-over-year basis and 16% sequentially.
  • GAAP product gross margin increased to 18.4% from 14.2% in the first quarter of 2007. Non-GAAP product gross margin increased to 20.9% from 18.5% in the first quarter of 2007.
  • GAAP operating income was $5 million compared to a loss of $20 million in the first quarter of 2007. Non-GAAP operating income was $47 million, or 6% of revenue, compared to $47million, or 6% of revenue, in the first quarter of 2007.
  • SanDisk announced an increase in the capacity of its embedded iNAND product to 16 Gigabytes for mobile handset storage.
  • SanDisk unveiled the Sansa® Fuze™, a feature rich MP3 player.

Scheduled Interview
SanDisk Corporation Chairman and Chief Executive Officer, Eli Harari, is scheduled to appear on CNBC's "Closing Bell with Maria Bartiromo," on April 17, 2008 at approximately 1:15 p.m. P.D.T.

Conference Call
SanDisk's first quarter 2008 conference call is scheduled for 2:00 p.m. P.D.T., Thursday, April 17, 2008. The conference call will be webcast by CCBN 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) 312-0941. The dial-in password is 3645393. 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.

A complete reconciliation between GAAP and non-GAAP information referred to in this release is provided in the attached tables.

Forward-Looking Statements
This news release contains certain forward-looking statements, including statements about our business prospects and outlook, anticipated increased demand for products, anticipated price declines, our expectation for product margins in Q2 2008, the expected cost benefits of 43-nm and 3-bit per cell manufacturing output in the second half of 2008 and the anticipated emergence of new markets for Flash storage, 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 including our solid state drives, or a slower adoption rate for our products in current and new markets that we are targeting including the mobile phone market
  • future average selling price erosion that may be more severe than our expectations due to decreased demand or excess industry capacity of flash memory from ourselves as well as from existing suppliers or from new competitors
  • adverse global economic and geo-political conditions, including continued declines in the global economy, particularly in the U.S. and Europe, or continued adverse currency exchange rates particularly related to the Japanese yen
  • any interruption of or delay in supply from any of the semiconductor manufacturing or subcontracting facilities, including test and assembly facilities that supply products to us
  • slower than expected expansion of our global sales channels,
  • fluctuations in operating results, unexpected yield variances and delays related to our conversion to 43-nanometer NAND flash technology or the ramp-up of the 300-millimeter flash fabrication facility
  • unexpected yield variances in, or delays related to the ramp-up of, 3-bits per cell
    manufacturing
  • less than expected growth in the average megabyte capacity per card
  • fluctuations in license and royalty revenues
  • higher than anticipated operating expenses
  • business interruption due to earthquakes, hurricanes or other natural disasters, particularly in areas in the Pacific Rim and Japan where we manufacture and assemble products,
  • adverse results in litigation or regulatory actions affecting us, 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 Annual Report on Form 10-K for the fiscal year ended December 30, 2007 and
    our Forms 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 Corporation, the inventor and world's largest supplier of flash storage cards, is a global leader in flash memory - 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 (www.sandisk.com/corporate) is a Silicon Valley-based S&P 500 company, with more than half its sales outside the United States.

 

SanDisk, the SanDisk logo, and Sansa are trademarks of SanDisk Corporation, registered in the United States and other countries. Sansa Fuze is a trademark of

SanDisk Corporation.SanDisk Supporting Documents (.pdf)
- Condensed Consolidated Statements of Operations
- Reconciliation of GAAP to Non-GAAP Operating Results (*)
- Reconciliation of GAAP to Non-GAAP Operating Results
- Preliminary Condensed Consolidated Balance Sheets
- Condensed Consolidated Comparative Statement of Cash Flows

CONTACTS: 
Investor Contacts:        
Lori Barker Padon      
(408) 801-1384      
 
Jay Iyer
(408) 801-2067

Media Contact:
Mike Wong
(408) 801-1240

MEDIA CONTACTS

SanDisk Press Contact

press@sandisk.com