SanDisk Announces Record Revenue and Earnings
Business Wire - October 15, 1997 16:26
%SANDISK SNDK %CALIFORNIA %COMPUTERS %ELECTRONICS %COMED %EARNINGS V%BW P%BW
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 15, 1997--SanDisk Corporation (NASDAQ:SNDK), the world's
largest supplier of flash memory data storage products, today announced financial results for its third quarter ended
September 30, 1997.
Third quarter revenues were $36.1 million, up 39% from revenues of $26.0 million for the same period last year. Net
income for the quarter was $6.8 million, or $.27 per share, compared to $3.6 million, or $.15 per share for the third
quarter of 1996.
Revenues for the third quarter increased 32% from the prior quarter and consisted of a 26% increase in product revenue and
a 73% increase in royalties. Current quarter net income grew 84% and earnings per share, 80%, compared to the second
quarter of this year.
Revenues for the first nine months of 1997 were $84.9 million, an increase of 19% over revenues of $71.3 million for the
comparable period last year. Net income for the first nine months of 1997 was $12.6 million, compared with $10.1 million
for same period of 1996.
"We are very pleased with SanDisk's performance in the third quarter," said Dr. Eli Harari, President and CEO of
SanDisk. "SanDisk shipped a record number of flash storage cards and had the highest quarterly revenue in the Company's
history. Unit shipments of our CompactFlash product were again at record volumes fueled by the recent market
introduction of several new digital cameras.
"Revenues attributable to CompactFlash products accounted for approximately 56% of the Company's product revenue
during the third quarter, making this the second consecutive quarter where CompactFlash revenues exceeded PCMCIA
Flash card revenues. Shipments of more than 350,000 units of CompactFlash represented approximately 80% of all units
shipped in the current quarter. Total unit shipments increased 34% compared to the second quarter of 1997. This increase
was partially offset by a decline in average selling prices of 7%, primarily due to high volume shipments of low capacity,
lower margin CompactFlash cards. Product gross margin increased to 33.4%, up from 31.5% in the second quarter due in
part to continued product cost reductions. Revenues from licenses and royalties in the current quarter increased by $2.5
million, to $5.9 million, attributable to recent cross-license agreements entered into by SanDisk with Hitachi, Toshiba and
Samsung.
"New product introductions during the quarter, including the Kodak DC 210 and the Casio QV-700, both using SanDisk's
CompactFlash cards bundled with each camera, are further evidence of the growing market acceptance of CompactFlash
cards as the global standard. We also announced strategic OEM and distribution agreements during the quarter with Pentax
and Ingram Micro."
Harari also stated, "Bookings and shipments during the third quarter were strong as our consumer electronic OEM
customers are stocking for the upcoming holiday season. We are expecting product revenues in the fourth quarter to be flat,
or possibly up slightly relative to the third quarter of 1997, albeit perhaps at slightly lower gross margins due to anticipated
increased competition. The outlook for the first quarter of 1998 is uncertain due to the seasonal nature of the consumer
electronics markets addressed by CompactFlash."
The matters discussed in this news release contain forward looking statements that are subject to certain risks and
uncertainties as described in the Company's reports filed with the Securities and Exchange Commission. The timely
acceptance of new consumer products that incorporate our flash storage devices, as well as future price competition may
affect the Company's business, financial condition and results of operations. Future results may differ materially from
those previously reported. The Company assumes no obligation to update the information in this release.
SanDisk Corporation, the world's largest supplier of flash data storage products, designs, manufactures and markets
industry-standard, solid-state data, image and audio storage products using patented, high density flash memory and
controller technology. SanDisk has strategic alliances with Seagate Technology, Matsushita Electronic Corp., NEC Corp.
and LG Semicon. Seagate holds a 25 percent equity stake in SanDisk. The company is based in Sunnyvale, CA.
SanDisk Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data; unaudited)
Three months ended Nine months ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Revenues:
Product $30,219 $24,798 $72,335 $67,599
Royalty 5,925 1,250 12,600 3,750
Total revenues 36,144 26,048 84,935 71,349
Cost of sales 20,135 15,759 49,476 43,538
Gross profits 16,009 10,289 35,459 27,811
Operating expenses:
Research and development 3,550 2,735 9,634 7,280
Sales and marketing 3,197 2,161 8,728 6,467
General and
administrative 2,029 2,279 4,933 5,580
Total operating expenses 8,776 7,175 23,295 19,327
Operating income 7,233 3,114 12,164 8,484
Interest and other
income, net 771 799 2,680 2,320
Income before taxes 8,004 3,913 14,844 10,804
Provision for income taxes 1,202 270 2,227 702
Net income $ 6,802 $ 3,643 $12,617 $10,102
Net income per share $ 0.27 $ 0.15 $ 0.51 $ 0.42
Shares used in computing
net income per share 24,986 24,268 24,502 24,204
SanDisk Corporation
Condensed Consolidated Balance Sheets
(In thousands; unaudited)
ASSETS Sept. 30, 1997 Dec. 31, 1996
Current Assets:
Cash and cash equivalents $ 18,337 $ 19,323
Short-term investments 41,986 54,965
Accounts receivable, net 22,681 11,885
Inventories, net 11,320 9,630
Prepaid expenses and
other current assets 4,491 1,684
Total current assets 98,815 97,487
Property and equipment, net 13,284 10,285
Investment in joint venture 40,231 --
Deposits and other assets 489 496
Total Assets $152,819 $108,268
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 11,165 $ 7,595
Accrued payroll and
related expenses 4,240 2,857
Other accrued liabilities 3,394 4,354
Deferred revenue 31,994 5,652
Total current liabilities 50,793 20,458
Stockholders' Equity:
Common stock 99,837 98,233
Retained earnings
(Accumulated deficit) 2,189 (10,423)
Total stockholders' equity 102,026 87,810
Total Liabilities and
Stockholders' Equity $152,819 $108,268
Note to Editors: CompactFlash and CF are trademarks of SanDisk Corporation. SanDisk's web site /home page address:
sandisk.com
CONTACT: SanDisk Corporation
Cindy Burgdorf, 408/542-0577 (CFO)
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