SanDisk Announces Fourth Quarter and 2012 Year-End Results

Before you go, we thought you'd like these...
Before you go close icon

SanDisk Announces Fourth Quarter and 2012 Year-End Results

  • Delivers fourth quarter revenue of $1.54 billion with record SSD & Embedded sales
  • Gross margin improvements drive substantial sequential earnings growth

MILPITAS, Calif.--(BUSINESS WIRE)-- SanDisk Corporation (NASDAQ: SNDK), a global leader in flash memory storage solutions, announced today results for the fourth quarter and fiscal year ended December 30, 2012. Total fourth quarter revenue of $1.54 billion decreased 2% on a year-over-year basis and increased 21% on a sequential basis. Total revenue for fiscal 2012 of $5.05 billion decreased 11% from $5.66 billion in fiscal 2011.

On a GAAP(1) basis, fourth quarter net income was $214 million, or $0.87 per diluted share, compared to net income of $281 million, or $1.14 per diluted share, in the fourth quarter of fiscal 2011 and $77 million, or $0.31 per diluted share, in the third quarter of fiscal 2012. Net income for fiscal 2012 was $417 million, or $1.70 per diluted share compared to $987 million, or $4.04 per diluted share in fiscal 2011.


On a non-GAAP(2) basis, fourth quarter net income was $257 million, or $1.05 per diluted share, compared to net income of $317 million, or $1.29 per diluted share, in the fourth quarter of fiscal 2011 and net income of $118 million, or $0.48 per diluted share, in the third quarter of fiscal 2012. Net income for fiscal 2012 was $582 million, or $2.38 per diluted share compared to $1.14 billion, or $4.65 per diluted share in fiscal 2011. For reconciliation of non-GAAP to GAAP results, see accompanying financial tables and footnotes.

"SanDisk ended 2012 with strong momentum in our SSD business, which contributed 10% of our Q4 revenue. We are now supplying client SSDs to ten leading PC OEMs and our enterprise SSDs are qualified at a fourth storage OEM," said Sanjay Mehrotra, president and chief executive officer of SanDisk. "We drove solid sequential growth in our embedded mobile products and continued to execute well in our retail business. We believe that our broadening customer engagements and expanding product portfolio position us well for strong profitability in 2013."

FOURTH QUARTER 2012 KEY FINANCIAL METRICS

Metric GAAP Non-GAAP
in millions of US$, except % Q412 Q411 Q312Q412 Q411 Q312
Revenue $1,542 $1,577 $1,273$1,542 $1,577 $1,273
Gross Profit$603 $662 $383$615 $676 $395
% of revenue 39.1% 42.0% 30.1%39.9% 42.9% 31.0%
Operating Income$336$416$132$368$449$164
% of revenue 21.8% 26.4% 10.4%23.9% 28.5% 12.9%

At the end of the fourth quarter, SanDisk's cash and short and long-term marketable investments totaled $5.71 billion.

CONFERENCE CALL

SanDisk's fourth quarter of fiscal 2012 conference call is scheduled for 2:00 P.M., Pacific Time, Wednesday, January 23, 2013. 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 719-457-2679 and the dial-in password is 5242141. 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.

ABOUT SANDISK

SanDisk Corporation (NAS: SNDK) 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.

© 2013 SanDisk Corporation. All rights reserved. SanDisk and the SanDisk logo are trademarks of SanDisk Corporation, registered in the United States and other countries. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s).

This press release contains certain forward-looking statements, including statements about our business prospects, including our expectations regarding strong profitability in 2013, continued growth of our SSD business as a result of increased customer engagements, our expanding product portfolio, our business and expected financial performance in fiscal 2013, 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. We undertake no obligation to update the information contained in this press release. 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;
  • inability to reduce our manufacturing costs to keep pace with reductions in average selling prices;
  • potential delays in product development or lack of customer acceptance of our solutions, particularly OEM products such as our embedded flash storage solutions, and client and enterprise SSD solutions;
  • inability to maintain or gain market share in client and enterprise SSD markets;
  • unpredictable or changing demand for our products, including for different form factors, capacities and underlying memory technologies;
  • excess or mismatched captive memory output or capacity, which could result in write-downs for excess inventory, lower of cost or market charges, lower average selling prices, fixed costs associated with under-utilized capacity or other consequences; 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 third fiscal quarter ended September 30, 2012.
(1) GAAP represents U.S. Generally Accepted Accounting Principles.
(2)Non-GAAP represents GAAP excluding the impact of share-based compensation expense, amortization and write-off of acquisition-related intangible assets, non-cash economic interest expense associated with the Company's convertible debt, the non-cash change in fair value of the liability component associated with the repurchased portion of SanDisk's convertible debt and related tax adjustments.
 
SanDisk Corporation
Preliminary Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)
    
 
Three months endedTwelve months ended
December 30, 2012January 1, 2012December 30, 2012January 1, 2012
Revenues:
Product$1,444,719$1,473,444$4,678,504$5,287,555
License and royalty 96,784  103,476 374,005  374,590 
Total revenues1,541,5031,576,9205,052,5095,662,145
 
Cost of product revenues928,661901,9933,326,7473,183,257
Amortization of acquisition-related intangible assets 9,830  13,186 42,542  39,742 
Total cost of product revenues938,491915,1793,369,2893,222,999
    
Gross profit603,012661,7411,683,2202,439,146
 
Operating expenses:
Research and development159,075147,228602,765547,373
Sales and marketing64,82055,227224,054199,422
General and administrative39,91341,746150,401157,766
Amortization and write-off of acquisition-related intangible assets 3,229  1,877 9,905  4,485 
Total operating expenses 267,037  246,078 987,125  909,046 
 
Operating income335,975415,663696,0951,530,100
 
Other income (expense), net (12,971) 2,871 (69,179) (53,346)
 
Income before income taxes323,004418,534626,9161,476,754
 
Provision for income taxes109,461137,311209,512489,764
    
Net income$213,543 $281,223$417,404 $986,990 
 
Net income per share:
Basic$0.88$1.16$1.72$4.12
Diluted$0.87$1.14$1.70$4.04
 
Shares used in computing net income per share:
Basic241,451241,775242,076239,484
Diluted244,161246,543245,253244,553
 
SanDisk Corporation
Reconciliation of Preliminary GAAP to Non-GAAP Operating Results(1)
(in thousands, except per share data, unaudited)
    
Three months endedTwelve months ended
December 30, 2012January 1, 2012December 30, 2012January 1, 2012
 
SUMMARY RECONCILIATION OF NET INCOME
GAAP NET INCOME$213,543$281,223$417,404$986,990
Share-based compensation (a)19,16018,43278,44363,110
Amortization and write-off of acquisition-related intangible assets (b)13,05915,06352,44744,227
Convertible debt interest (c)23,03621,31689,963111,354
Income tax adjustments (d) (11,582) (18,893) (55,848) (67,673)
NON-GAAP NET INCOME$257,216 $317,141 $582,409 $1,138,008 
 
 
GAAP COST OF PRODUCT REVENUES$938,491$915,179$3,369,289$3,222,999
Share-based compensation (a)(2,070)(1,358)(7,459)(4,674)
Amortization of acquisition-related intangible assets (b) (9,830) (13,186) (42,542) (39,742)
NON-GAAP COST OF PRODUCT REVENUES$926,591 $900,635 $3,319,288 $3,178,583 
 
GAAP GROSS PROFIT$603,012$661,741$1,683,220$2,439,146
Share-based compensation (a)2,0701,3587,4594,674
Amortization of acquisition-related intangible assets (b) 9,830  13,186  42,542  39,742 
NON-GAAP GROSS PROFIT$614,912 $676,285 $1,733,221 $2,483,562 
 
GAAP RESEARCH AND DEVELOPMENT EXPENSES$159,075$147,228$602,765$547,373
Share-based compensation (a) (9,981) (10,929) (41,010) (34,177)
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES$149,094 $136,299 $561,755 $513,196 
 
GAAP SALES AND MARKETING EXPENSES$64,820$55,227$224,054$199,422
Share-based compensation (a) (3,528) (2,847) (14,585) (10,593)
NON-GAAP SALES AND MARKETING EXPENSES$61,292 $52,380 $209,469 $188,829 
 
GAAP GENERAL AND ADMINISTRATIVE EXPENSES$39,913$41,746$150,401$157,766
Share-based compensation (a) (3,581) (3,298) (15,389)
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Sat, Dec 03
Set Your Location
City, State, or Zip