Press Releases

SanDisk Announces Third Quarter 2015 Results

ott 21, 2015

MILPITAS, Calif., October 21, 2015 - SanDisk Corporation (NASDAQ: SNDK), a global leader in flash storage solutions, today announced results for the third quarter ended September 27, 2015.  Third quarter revenue of $1.45 billion decreased 17 percent on a year-over-year basis and increased 17 percent sequentially. 

On a GAAP(1) basis, third quarter net income was $133 million, or $0.65 per share, compared to net income of $263 million, or $1.09 per share, in the third quarter of 2014 and $81 million, or $0.38 per share, in the second quarter of 2015.

On a non-GAAP(2)(3) basis, third quarter net income was $223 million, or $1.09 per share, compared to net income of $336 million, or $1.45 per share, in the third quarter of 2014 and net income of $136 million, or $0.66 per share, in the second quarter of 2015.  For a reconciliation of non-GAAP to GAAP results, see accompanying financial tables and footnotes.

“SanDisk completed several important product qualifications in embedded and SSD solutions in the third quarter, contributing to our strong sequential revenue growth,” said Sanjay Mehrotra, president and chief executive officer, SanDisk.  “Our mix of 15 nanometer, three-bit-per-cell (X3) technology helped drive substantial cost reduction in the quarter. We are making excellent progress in expanding our product portfolio and building our customer engagements.”

 

KEY FINANCIAL RESULTS


OTHER FINANCIAL INFORMATION


NEWS HIGHLIGHTS

  • SanDisk and Toshiba Corporation announced the start of equipment installation in the New Fab 2 facility at Yokkaichi Operations and their entry into definitive agreements for joint manufacturing of 3D NAND and investment in New Fab 2.  New Fab 2 is primarily intended to provide the clean room space necessary to transition a significant portion of the current Yokkaichi 2D NAND capacity to 3D NAND. 
  • SanDisk announced a long-term partnership with HP to collaborate on a new technology within the Storage Class Memory category and create enterprise-wide solutions for Memory-driven Computing.  The partnership will center around SanDisk’s ReRAM technology and manufacturing and design expertise and HP’s Memristor technology.  SanDisk and HP will also partner to enhance data center solutions with SSDs.
  • SanDisk announced the world’s first 256 Gigabit (Gb), 3-bit-per-cell (X3), 48-layer 3D NAND chip and began 3D NAND pilot line operations in Yokkaichi, Japan. SanDisk’s 256Gb X3 3D NAND chip is designed for wide applicability in consumer, client, mobile and enterprise products and is expected to begin shipping in SanDisk products in 2016.
  • SanDisk entered into several agreements with SK Hynix, Inc. including an expanded and extended IP licensing agreement, a multi-year commercial relationship under which SK Hynix will supply its leading-edge DRAM products to SanDisk and a settlement of the trade secret misappropriation suit filed by SanDisk in 2014.
  • SanDisk introduced its iNAND® 7232, a high-performance embedded mobile storage solution optimized for best-in-class imaging performance in flagship mobile devices. The iNAND 7232 leverages SanDisk’s 15 nanometer X3 NAND flash storage and features SanDisk’s second-generation SmartSLC technology architecture that quickly and intelligently responds to mobile users’ changing needs.
  • SanDisk introduced three new reference architectures for VMware Virtual SAN™ 6 utilizing SSDs and Fusion ioMemory™ PCIe application accelerators. These reference architectures help customers gain exceptional performance on VMware’s Virtual SAN software-defined storage infrastructure.
  • SanDisk shipped its 2 billionth microSD™ card since beginning commercial shipments ten years ago. The introduction of the microSD card by SanDisk in 2004 significantly reduced the size of removable memory cards, helping to propel the growth of the smartphone market.
  • As a result of SanDisk’s pending acquisition by Western Digital Corporation, SanDisk’s capital return program, consisting of quarterly cash dividend and share repurchases, is suspended effective at the start of the fourth quarter of 2015.

SanDisk will not host a third quarter 2015 earnings conference call, previously scheduled for today.  SanDisk has posted its third quarter 2015 financial results, CEO and CFO commentaries, and earnings results presentation on its investor relations website at http://investor.sandisk.com.

Q3 2015 Financial Tables

 

ABOUT SANDISK

SanDisk Corporation (NASDAQ: SNDK), a Fortune 500 and S&P 500 company, is a global leader in flash storage solutions.  For more than 25 years, SanDisk has expanded the possibilities of storage, providing trusted and innovative products that have transformed the electronics industry.  Today, SanDisk’s quality, state-of-the-art solutions are at the heart of many of the world's largest data centers, and embedded in advanced smartphones, tablets and PCs.  SanDisk’s consumer products are available at hundreds of thousands of retail stores worldwide.  For more information, visit www.sandisk.com.

©2015 SanDisk Corporation. All rights reserved. SanDisk, the SanDisk logo and iNAND are trademarks of SanDisk Corporation, registered in the United States and other countries.  Fusion ioMemory is a trademark of SanDisk Corporation. microSD is a trademark of SD-3C, LLC.  Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s).

This news release contains certain forward-looking statements, including those regarding industry environment, our business prospects, our intended financial, operational and strategic plans and priorities, our future financial performance and market share, our customer base, customer qualifications and product mix, technology trends and adoption, strategic relationships, and new products and technologies, that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate.

Risks that may cause these forward-looking statements to be inaccurate include, among others:

·       failure to effectively or efficiently execute on our financial, operational or strategic plans or priorities, which may change, may not have the effects that we anticipate or otherwise be successful on the timeline that we expect or at all or may have unanticipated consequences;

·       changes in industry supply and demand environment, and production and pricing levels being different than what we anticipate;

·       competitive pricing pressures or product mix changes, resulting in lower average selling prices, lower revenues and reduced gross margins;

·       excess or mismatched captive memory output, capacity or inventory, resulting in lower average selling prices, financial charges and impairments, lower gross margin or other consequences, or insufficient or mismatched captive memory output, capacity or inventory, resulting in lost revenue and growth opportunities;

·       weakness in demand in one or more of our product categories, such as embedded products or SSDs, or adverse changes in our product or customer mix;

·       potential delays in product development or lack of customer acceptance and qualification of our solutions, including on new technology nodes, particularly OEM products such as our embedded flash storage and SSD solutions;

·       failure to successfully sell enterprise solutions on the timelines or in the quantities we expect or transition our enterprise customers to our leading edge solutions;

·       failure or delays in making new products or technologies available in the manner and capacities we anticipate, whether due to technology or supply chain difficulties or other factors;

·       inability to develop, or unexpected difficulties or delays in developing or ramping with acceptable yields, new technologies, such as 3D NAND technology or Storage Class Memory, or the failure of new technologies to effectively compete with those of our competitors; 

·       our 15-nanometer process technology, our X3 NAND memory architecture, our 3D NAND technology or our solutions utilizing these new technologies may not be available when we expect, in the capacities that we expect or perform as expected; 

·       failure to manage the risks associated with our ventures, strategic partnerships and commercial relationships, such as with Toshiba, HP and SK Hynix, including the risk of early termination;

·       inability to achieve the expected benefits from acquisitions and strategic relationships in a timely manner, or at all;

·       industry and technology trends not occurring in the timeline we anticipate or at all; 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 quarter ended June 28, 2015.

All statements made in this news release are made only as of the date of this release. We undertake no obligation to update the information in this release in the event facts or circumstances change after the date of this release.

Forward Looking Statements
All statements included or incorporated by reference in this document, other than statements or characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements are based on SanDisk’s current expectations, estimates and projections about its business and industry, management’s beliefs, and certain assumptions made by SanDisk and Western Digital Corporation, all of which are subject to change.  Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words.  Examples of such forward-looking statements include, but are not limited to, references to the anticipated benefits of the proposed merger and the expected date of closing of the merger with Western Digital’s wholly-owned subsidiary, Schrader Acquisition Corporation.  These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially and adversely from those expressed in any forward-looking statement. 

Important risk factors that may cause such a difference in connection with the proposed merger include, but are not limited to, the following factors: (1) the inability to complete the merger due to the failure to obtain stockholder approval for the merger or the failure to satisfy other conditions to completion of the merger, including the receipt of all regulatory approvals related to the merger; (2) uncertainties as to the timing of the consummation of the merger and the ability of each party to consummate the merger; (3) risks that the proposed merger disrupts the current plans and operations of Western Digital or SanDisk; (4) the ability of Western Digital and SanDisk to retain and hire key personnel; (5) competitive responses to the proposed merger; (6) unexpected costs, charges or expenses resulting from the merger; (7) the outcome of any legal proceedings that could be instituted against Western Digital, SanDisk or their respective directors related to the merger agreement; (8) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; (9) the inability to obtain, or delays in obtaining, cost savings and synergies from the merger; (10) delays, challenges and expenses associated with integrating the combined companies’ existing businesses and the indebtedness planned to be incurred in connection with the merger; and (11) legislative, regulatory and economic developments.  These risks, as well as other risks associated with the proposed merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that will be filed with the SEC in connection with the proposed merger.  The forward-looking statements in this document speak only as of this date. Neither SanDisk nor Western Digital undertake any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances. 

In addition, actual results are subject to other risks and uncertainties that relate more broadly to SanDisk’s overall business, including those more fully described in SanDisk’s filings with the Securities and Exchange Commission (“SEC”) including its annual report on Form 10-K for the fiscal year ended December 28, 2014, and its quarterly reports filed on Form 10-Q for the current fiscal year, and Western Digital’s overall business and financial condition, including those more fully described in Western Digital’s filings with the SEC including its annual report on Form 10-K for the fiscal year ended July 3, 2015.  The forward-looking statements in this document speak only as of date of this document.  We undertake no obligation to revise or update publicly any forward-looking statement, except as required by law.

Additional Information And Where To Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Western Digital will file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement/prospectus of SanDisk and Western Digital.  Each of SanDisk and Western Digital will provide the joint proxy statement/prospectus to their respective stockholders.  SanDisk and Western Digital also plan to file other documents with the SEC regarding the proposed merger.  This document is not a substitute for the joint proxy statement/prospectus or registration statement or any other document which SanDisk or Western Digital may file with the SEC in connection with the proposed merger.  INVESTORS AND SECURITY HOLDERS OF SANDISK AND WESTERN DIGITAL ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.  You may obtain copies of all documents filed with the SEC regarding this merger, free of charge, at the SEC’s website (www.sec.gov).  In addition, copies of the documents filed with the SEC by SanDisk will be available free of charge on SanDisk’s website at http://www.sandisk.com.  Copies of the documents filed with the SEC by Western Digital will be available free of charge on Western Digital’s website at http://www.westerndigital.com.

Participants in the Solicitation
SanDisk, Western Digital, and certain of their respective directors, executive officers and other members of management and employees, under SEC rules may be deemed to be participants in the solicitation of proxies from SanDisk and Western Digital stockholders in connection with the proposed merger.  You can find more detailed information about SanDisk’s executive officers and directors in its definitive proxy statement filed with the SEC on April 27, 2015.  You can find more detailed information about Western Digital’s executive officers and directors in its definitive proxy statement filed with the SEC on September 23, 2015.  Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of stockholders in connection with the proposed merger will be set forth in the joint proxy statement/prospectus when it is filed with the SEC.  Additional information about SanDisk’s executive officers and directors and Western Digital’s executive officers and directors can be found in the joint proxy statement/prospectus regarding the proposed merger when it is filed with the SEC.

(1)       GAAP represents U.S. Generally Accepted Accounting Principles.

(2)       Non-GAAP represents GAAP excluding the impact of share-based compensation, inventory step-up expense, amortization and impairment of acquisition-related intangible assets, non-cash economic interest expense associated with the convertible senior notes, non-cash change in fair value of the liability component of the convertible senior notes due to the conversion of a portion of the 1.5% Convertible Senior Notes due 2017 and related tax adjustments. 

(3)       Non-GAAP diluted shares are adjusted for the impact of expensing share-based compensation and include the impact of offsetting shares from the call options related to the convertible senior notes.

(4)       Net cash is defined as cash, cash equivalents, short and long-term marketable securities, minus the aggregate principal amount of the outstanding convertible senior notes.

(5)       Free cash flow is defined as net cash provided by operating activities less (a) acquisition of property and equipment, net, and (b) net investment and notes receivables activity with Flash Ventures.  Calculation of free cash flow may not agree to the sum of the components presented due to rounding.

*   1Gb=125,000,000 bits.  Actual user storage may be less.

Source: SanDisk Corporation

Investor Contacts:
Jay Iyer
408-801-2067, jay.iyer@sandisk.com

Brendan Lahiff
408-801-1732, brendan.lahiff@sandisk.com

Media Contact:
Michael Diamond
408-801-1108, michael.diamond@sandisk.com 

REFERENTI PER I MEDIA

Referente SanDisk per la stampa

press@sandisk.com