MILPITAS, Calif.—(BUSINESS WIRE)—January 28, 2008— SanDisk(R) Corporation (NASDAQ: SNDK), the world's largest supplier of flash storage card products, today announced results for the fourth quarter ended December 30, 2007. Fourth-quarter revenue of $1.246 billion increased 7% on a year-over-year basis and 20% on a sequential basis. Fourth-quarter net income, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was $106 million, or $0.45 per diluted share, compared to a GAAP net loss of $35 million, or $0.17 per diluted share, in the fourth quarter of 2006 that included a write-off of acquired in-process technology.
Total revenue for fiscal 2007 of $3.896 billion increased 20% from
$3.258 billion in 2006. Net income for fiscal 2007 was $218 million,
or $0.93 per diluted share, compared to net income of $199 million, or
$0.96 per diluted share that included write-offs of acquired
in-process technology in fiscal 2006.
Excluding the impact of acquisition-related charges, share-based
compensation expense and the related tax effect, fourth quarter
non-GAAP net income increased to $162 million, or $0.69 per diluted
share, compared to third quarter 2007 non-GAAP net income of $130
million, or $0.54 per diluted share. Non-GAAP net income was $192
million, or $0.87 per diluted share, in the fourth quarter of 2006. On
the same non-GAAP basis, total fiscal 2007 non-GAAP net income was
$408 million, or $1.73 per diluted share, compared to $523 million, or
$2.51 per diluted share in fiscal 2006.
"This was a good quarter for SanDisk considering the challenging
business conditions in our markets. We continued to see strong growth
in our mobile business where we sold a record 51 million units and our
diversified and differentiated product portfolio delivered sequential
growth in product gross margin," said Eli Harari, Chairman and CEO.
"Despite current uncertainties in the worldwide economy and a
challenging industry pricing environment in the first quarter, we
expect to grow our top and bottom line in 2008, driven by continuing
strength in our mobile markets, our expanding international retail
footprint and our competitive cost structure."
Key Metrics and Highlights for Fourth Quarter of 2007
-- Product revenue was a record $1.118 billion, up 4%
year-over-year and 22% sequentially.
-- License and royalty revenue was a record $128 million, up 51%
year-over-year and 8% sequentially.
-- Total megabytes sold increased 146% year-over-year and 37%
-- Average price per megabyte sold declined 58% on a
year-over-year basis and 11% sequentially.
-- Average retail card capacity of 1816 megabytes was an increase
of 63% on a year-over-year basis and 12% sequentially.
-- For fiscal 2007 total megabytes sold increased 190% and
average price per megabyte sold declined 60%.
-- GAAP product gross margin was 28.1% compared to 30.7% in the
fourth quarter of 2006 and 24.3% in the third quarter of 2007.
-- Non-GAAP product gross margin was 29.7% compared to 32.3% in
the fourth quarter of 2006 and 26.4% in the third quarter of
-- GAAP operating income was $173 million compared to $12 million
in the fourth quarter of 2006 and $109 million in the third
quarter of 2007.
-- Non-GAAP operating income was $223 million, or 18% of revenue,
compared to $248 million, or 21% of revenue, in the fourth
quarter of 2006 and $162 million, or 16% of revenue, in the
third quarter of 2007.
-- SanDisk announced Cruzer(R) Titanium Plus, a USB flash drive
with automatic online file backup.
-- SanDisk unveiled Vaulter(TM), a solid-state storage solution
that works in conjunction with a PC's hard drive to store and
launch the computer's operating system and software
-- SanDisk launched Video HD cards to provide consumers with
high-definition, fast speed storage in the growing flash-based
digital camcorder market.
-- SanDisk filed patent infringement actions against 25 companies
that manufacture, sell and import various removable flash
storage products. Since filing these actions, 8 companies have
signed patent cross license agreements with SanDisk.
-- SanDisk repurchased 7.5 million shares during 2007 under a
previously announced $300 million share repurchase plan to
reduce the level of stockholder dilution caused by issuance of
employee equity incentive awards.
SanDisk's fourth quarter 2007 conference call is scheduled for
2:00 p.m. PST, Monday, January 28, 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) 312-1451. The dial-in password
is 7440453. 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.
This news release contains certain forward-looking statements,
including statements about our business prospects and outlook,
anticipated increased demand for products including our mobile
products, and expected growth in international retail, 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
-- slower than expected growth in market demand for our products
including, for example, our solid state drives, or a slower
adoption rate for our products in current and new markets that
we are targeting including, for example, the mobile phone
-- 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
-- slower than expected expansion of our global sales channels,
-- fluctuations in operating results, unexpected yield variances
and delays related to our conversion to 43nm NAND flash
technology or the ramp-up of the 300 millimeter flash
-- 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,
-- risks related to our acquisition of msystems,
-- adverse results in litigation or regulatory actions affecting
-- the risk that scheduled appearances by our executives could be
cancelled or delayed by us or the network, and