SANDISK ANNOUNCES SECOND QUARTER 2011 FINANCIAL RESULTS
Reports best quarterly revenue in SanDisk's
history
Milpitas, CA, July 21, 2011 - SanDisk
Corporation (NASDAQ:SNDK), a global leader in flash memory storage
solutions, today announced results for the second fiscal quarter
ending July 3, 2011. Total second quarter revenue of $1.375 billion
increased 17% on a year-over-year basis and increased 6% on a
sequential basis. Second quarter net income, in accordance with
U.S. Generally Accepted Accounting Principles (GAAP), was $248
million, or $1.02 per diluted share, compared to net income of $258
million, or $1.08 per diluted share in the second quarter of fiscal
2010 and $224 million, or $0.92 per diluted share, in the first
quarter of fiscal 2011.
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 convertible debts and related tax adjustments,
second-quarter net income was $278 million, or $1.14 per diluted
share, compared to net income of $258 million, or $1.08 per diluted
share, in the second quarter of fiscal 2010 and net income of $251
million, or $1.03 per diluted share, in the first quarter of fiscal
2011. For reconciliation of non-GAAP to GAAP results, see
accompanying financial tables and footnotes.
"We delivered record quarterly revenue, driven by our broad
product offerings and our well diversified Retail and OEM
channels," said Sanjay Mehrotra, President and CEO, SanDisk. "Solid
execution on product cost reductions enabled strong profitability.
Our integration of Pliant Technology is progressing well and we are
excited by our business prospects in the enterprise storage
segment."
SECOND QUARTER 2011 KEY FINANCIAL METRICS
- Total second quarter revenue was $1.375 billion, up 17%
year-over-year and up 6% sequentially.
- Total second quarter gross profit, product gross profit and
operating income compared on a year-over-year and sequential basis
are shown in the table below:
Metric
in millions of US$, except % |
GAAP
|
Non - GAAP
|
|
Q211 |
Q210 |
Q111 |
Q211 |
Q210 |
Q111 |
Total gross profit
% of total revenue |
$613
44.6% |
$546
46.3% |
$552
42.6% |
$623
45.3% |
$551
46.7% |
$558
43.1% |
Product gross profit
% of product revenue |
$520
40.6% |
$459
42.0% |
$468
38.6% |
$530
41.3% |
$463
42.4% |
$474
39.1% |
Operating income
% of total revenue |
$379
27.6% |
$359
30.4% |
$349
27.0% |
$402
29.3% |
$377
32% |
$369
28.5% |
- Cash flow from operations in the second quarter was $269
million and free cash flow(1) was ($232) million.
- Total cash and cash equivalents and short and long-term
marketable securities at the end of the second quarter of fiscal
2011 was $5.28 billion compared to $3.72 billion at the end of the
second quarter of fiscal 2010 and $5.51 billion at the end of the
first quarter of fiscal 2011.
OTHER HIGHLIGHTS
- SanDisk, along with its manufacturing partner Toshiba,
announced the opening of Fab 5, their third 300-millimeter joint
venture wafer fab in Yokkaichi, Japan.
- SanDisk completed the acquisition of Pliant Technology, Inc., a
leading developer of enterprise solid state drives. With the
completion of the transaction, Pliant became SanDisk's Enterprise
Storage Solutions business.
- SanDisk expanded its Lightning® Enterprise Flash Drive family
with six new 2.5-inch 6GB SAS (6 gigabits per second Serial
Attached SCSI) models.
- SanDisk augmented its embedded product line up with the
announcement of the SanDisk iNAND Extreme™ embedded flash drives.
Combined with the iNAND™ and iNAND Ultra™ products, the iNAND
family of products now cover the needs of all mobile market
segments, from feature phones to high-end tablets.
CONFERENCE CALL
SanDisk's second quarter of fiscal 2011 conference call is
scheduled for 2:00 P.M., Pacific Time, Thursday, July 21, 2011. The
conference call will be webcast and can be accessed live, and
throughout the quarter, at SanDisk's website at www.sandisk.com/IR. To
participate in the call via telephone, the dial-in number is
719-325-2437 and the dial-in password is 3644989. 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 INTERVIEW
SanDisk Corporation President and CEO, Sanjay Mehrotra, is
scheduled to appear on CNBC's "Closing Bell with Maria Bartiromo,"
on Thursday, July 21, 2011, at approximately 1:15 P.M., Pacific
Time.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements,
including statements about our business prospects and outlook in
fiscal 2011, the integration of Pliant Technology, the expected
benefits of the enterprise storage segment and our expectations
regarding our business, 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:
- we may not be able to effectively assimilate and integrate
Pliant's operations, personnel, technologies, products and
information systems on a timely basis or at all;
- the integration of Pliant's business, personnel and operations
may disrupt our ongoing business, distract our management and
employees, harm our reputation and increase our expenses;
- we may not be able to maintain and grow our enterprise storage
customer relationships required to achieve our anticipated revenue
and margins;
- competitive pricing pressures, resulting in lower average
selling prices and lower or negative product gross margins;
- unpredictable or changing demand for our products, particularly
for certain form factors, such as embedded flash memory, or
capacities, or the mix of X2 and X3;
- insufficient supply from captive flash memory sources,
inability to obtain non-captive flash memory supply of the right
product mix with adequate margins and quality in the time frame
necessary to meet demand, or inability to realize a positive margin
on non-captive purchases;
- expansion of industry supply, including low grade supply
useable in limited markets, creating excess market supply, causing
our average selling prices to decline faster than our costs;
- excess captive memory output or capacity which could result in
write-downs for excess inventory, lower of cost or market charges,
fixed costs associated with under-utilized capacity, or other
consequences;
- increased memory component and other costs as a result of
currency exchange rate fluctuations to the U.S. dollar,
particularly with respect to the Japanese yen;
- lower than anticipated demand, including due to general
economic weakness in our markets; and
- the 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 fiscal quarter ended April 3, 2011.
(1) Free cash flow represents net cash provided by
operating activities plus net cash used in investing activities
less net purchases, sales and maturities of short- and long-term
marketable securities.
ABOUT SANDISK
SanDisk Corporation is a global leader in flash memory storage
solutions, from research and development, product design and
manufacturing to branding and distribution for OEM and retail
channels. Since 1988, SanDisk's innovations in flash memory and
storage system technologies have provided customers with new and
transformational digital experiences. SanDisk's diverse product
portfolio includes flash memory cards and embedded solutions used
in smart phones, tablets, digital cameras, camcorders, digital
media players and other consumer electronic devices, as well as USB
flash drives and solid-state drives (SSD) for the computing market.
SanDisk's products are used by consumers and enterprise customers
around the world.
SanDisk is a Silicon Valley-based S&P 500 and Fortune 500
company, with more than half its sales outside the United States.
For more information, visit www.sandisk.com
SanDisk and the SanDisk logo are trademarks of SanDisk
Corporation, registered in the United States and other countries.
Lightning is a U.S. registered trademark of SanDisk Corporation.
iNAND, iNAND Ultra and iNAND Extreme are trademarks of SanDisk
Corporation. Other brand names mentioned herein are for
identification purposes only and may be the trademarks of their
respective holder(s).
Q2 2011 Financial
Tables
| CONTACT: |
| Investor Contact: |
Media Contact: |
| Jay Iyer |
Lee Flanagin |
| (408) 801-2067 |
(408) 801-2463 |