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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (15311)	10/4/2000 9:00:32 AM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

John Fowler, "Certain of our licensees report royalty revenues to us only twice a year. The increase in royalty revenues for the second quarter of 2000 included an adjustment to reconcile the estimated royalty revenues recognized in the first half of 2000 with the actual royalties reported by our licensees." Substitute "calculated" for "recognized" in bold above or just delete it altogether. Substitute "production quantities" for "royalties" in bold above. SanDisk simply reconciled projected production quantities by competitors with actual shipments. It was more than estimated. That is to say, there was a significant upside surprise for the first 6 months of the year "because our licensees were very busy". ____________________________________________________________________________________ This confirms my belief in SanDisk as an investment, in that global sales of flash memory by some of the major flash producers (Hitachi, Samsung, Toshiba, Intel...) is reflected directly in SanDisk's bottom line. This is why Eli is so insistent that even competing standards help to pave the way for future demand for flash as a novel solution in portable computing. It also underscores the importance of re-negotiated and renewing licensing agreements like the one with Hitachi announced this week. ____________________________________________________________________________________ Also, if you wish to get a handle on "to-be-recognized" channel sales you can follow the "deferred revenues" item on the balance sheet. As this number increases it roughly reflects shipped, but unsold (to end-users) flash memory cards. Right now I suspect that a significant portion of these "deferred revenues" will be recognized in Q3 and Q4 as inventory is depleted. P-mail me with questions. Aus