SanDisk Corporation (NASDAQ: SNDK), a global leader in flash
storage solutions, today announced results for the second quarter
ended June 28, 2015. Second quarter revenue of
$1.24 billion decreased 24 percent on a year-over-year
basis and decreased 7 percent sequentially.
On a GAAP(1) basis, second quarter net income was $81 million,
or $0.38 per share, compared to net income of
$274 million, or $1.14 per share, in the second quarter
of 2014 and $39 million, or $0.17 per share, in the first
quarter of 2015.
On a non-GAAP(2)(3) basis, second quarter net income was
$136 million, or $0.66 per share, compared to net income
of $329 million, or $1.41 per share, in the second
quarter of 2014 and net income of $134 million, or
$0.62 per share, in the first quarter of 2015. For a
reconciliation of non-GAAP to GAAP results, see accompanying
financial tables and footnotes.
“During the second quarter, we strengthened our portfolio with
several new product launches in both the retail and commercial
channels,” said Sanjay Mehrotra, president and chief executive
officer, SanDisk. “We are making steady progress on all operational
fronts, and remain focused on enhancing our financial
performance.”
KEY FINANCIAL RESULTS
(in millions, except percentages and per share amounts)
GAAP (1)
Non-GAAP (2)
Q2’15 Q2’14 Q1’15
Q2’15 Q2’14
Q1’15 Revenue $1,237 $1,634
$1,332 $1,237
$1,634 $1,332 Gross profit $484
$760 $545 $518
$783 $574 percent of revenue 39%
46% 41% 42% 48%
43% Operating income $104 $417
$57 $191 $472
$198 percent of revenue 8% 25%
4% 15% 29%
15% EPS (3) $0.38 $1.14
$0.17 $0.66 $1.41
$0.62
OTHER FINANCIAL INFORMATION
(in millions)
Q2’15 Q2’14
Q1’15 Cash, cash equivalents, short and
long-term marketable securities $ 4,003
$ 6,249 $ 4,394 Less aggregate
principal amount of convertible senior notes outstanding
(2,497 ) (2,500 )
(2,497 ) Net cash (4) $ 1,506
$ 3,749 $ 1,897 Net cash
provided by operating activities $ 29
$ 241 $ 309 Less acquisition of
property and equipment, net (96 )
(44 ) (98 ) Change in investment
and notes receivable activity with Flash Ventures
15 —
(11 ) Free cash flow (5) $ (52 ) $ 197
$ 200
NEWS HIGHLIGHTS
- SanDisk announced the availability of
its new Fusion ioMemoryTM PCIe application accelerators which
utilize SanDisk NAND and dramatically improve performance compared
to the previous generation ioDrive®2, enabling datacenter
consolidation and lower total cost of ownership. These application
accelerators also feature updated Virtual Storage Layer (VSL) data
access acceleration software.
- SanDisk announced its new CloudSpeed
Eco™ Gen. II enterprise SATA SSD for cloud service providers, with
up to 2TB* capacity, based on 15 nanometer NAND flash. The
CloudSpeed Eco Gen. II delivers greater storage density with three
times the streaming bandwidth versus hard disk drives (HDDs).
- SanDisk announced the SanDisk Extreme®
500 and the SanDisk Extreme® 900 families of high-performance
portable SSDs at capacities up to 480GB and 1.92TB respectively.
These SSDs feature significantly faster transfer speeds than a
portable hard drive.
- SanDisk introduced the new SanDisk
Z400s SSD, a cost-effective 15 nanometer-based SSD designed to
replace HDDs in computing platforms and embedded applications, such
as digital signage, security surveillance, and point of sale or
kiosk environments.
- SanDisk announced today a third quarter
2015 dividend of $0.30 per share of common stock, payable on
August 25, 2015 to stockholders of record as of the close of
business on August 3, 2015.
CONFERENCE CALL
SanDisk’s second quarter 2015 conference call is scheduled for
today at 2:00 P.M., Pacific Time, Wednesday, July 22,
2015. The conference call will be on live webcast and can be
accessed from SanDisk’s investor relations website at
www.sandisk.com/IR. To dial into the live call, please dial
719-325-4800 and provide the password 3235993. Participants are
encouraged to dial in at least 10 minutes before the call
commences. Supplemental information and slides that accompany the
web broadcast will be available on the SanDisk’s investor relations
website at www.sandisk.com/IR after the prepared remarks. 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
SanDisk’s website prior to the conference call.
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, ioDrive and SanDisk Extreme are trademarks of SanDisk
Corporation, registered in the United States and other countries.
CloudSpeed Eco and Fusion ioMemory are trademarks of SanDisk
Corporation. 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, 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 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 or perform as expected;
- failure to manage the risks associated
with our ventures and strategic partnerships with Toshiba;
- inability to achieve the expected
benefits from acquisitions 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 March 29, 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.
(1)
GAAP represents U.S. Generally Accepted Accounting
Principles.
(2)
Non-GAAP represents GAAP excluding the impact of share-based
compensation, 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 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. * 1GB=1,000,000,000 bytes. 1TB=1,000,000,000,000 bytes.
Actual user storage may be less.
SanDisk
Corporation Preliminary Condensed Consolidated Statements of
Operations (in thousands, except per share amounts,
unaudited) Three months
ended Six months ended June 28, 2015 June 29,
2014 June 28, 2015 June 29, 2014 Revenue $
1,237,196 $ 1,634,011 $ 2,569,437 $ 3,145,956 Cost of
revenue 723,995 854,640 1,486,478 1,595,679 Amortization of
acquisition-related intangible assets 28,822
19,721 53,578 39,337 Total cost
of revenue 752,817 874,361
1,540,056 1,635,016 Gross profit 484,379
759,650 1,029,381 1,510,940 Operating expenses: Research and
development 218,418 204,030 441,144 402,859 Sales and marketing
96,681 83,398 198,501 160,370 General and administrative 41,932
54,085 89,979 102,754 Amortization of acquisition-related
intangible assets 13,681 1,481 27,362 3,127 Impairment of
acquisition-related intangible assets ― ― 61,000 ― Restructuring
and other 9,746 ― 50,287 ―
Total operating expenses 380,458
342,994 868,273 669,110
Operating income 103,921 416,656 161,108 841,830 Other
income (expense), net (12,777 ) (13,579 )
(36,347 ) (29,214 ) Income before income taxes 91,144
403,077 124,761 812,616 Provision for income taxes
10,171 129,131 4,763
269,722 Net income $ 80,973 $ 273,946 $
119,998 $ 542,894 Net income per share: Basic
$ 0.39 $ 1.21 $ 0.57 $ 2.41 Diluted $ 0.38 $ 1.14 $ 0.55 $ 2.28
Shares used in computing net income per share: Basic 206,737
225,544 209,083 225,694 Diluted 212,712 240,756 218,490 238,463
SanDisk Corporation Reconciliation of
Preliminary GAAP to Non-GAAP Operating Results (1)
(in thousands, except per share data, unaudited)
Three months ended Six months
ended June 28, 2015 June 29, 2014 June 28,
2015 June 29, 2014 SUMMARY RECONCILIATION OF
NET INCOME: GAAP NET INCOME $ 80,973 $ 273,946 $
119,998 $ 542,894 Share-based compensation (a) 44,422 34,449 85,832
64,479 Amortization of acquisition-related intangible assets (b)
42,503 21,202 80,940 42,464 Impairment of acquisition-related
intangible assets (c) ― ― 61,000 ― Convertible debt interest (d)
22,603 21,125 44,737 42,089 Income tax adjustments (e)
(54,045 ) (22,023 ) (122,364 ) (33,197 )
NON-GAAP NET INCOME $ 136,456 $ 328,699 $
270,143 $ 658,729
GAAP COST OF REVENUE
$ 752,817 $ 874,361 $ 1,540,056 $ 1,635,016 Share-based
compensation (a) (5,022 ) (3,507 ) (9,084 ) (6,117 ) Amortization
of acquisition-related intangible assets (b) (28,822 )
(19,721 ) (53,578 ) (39,337 )
NON-GAAP COST
OF REVENUE $ 718,973 $ 851,133 $ 1,477,394
$ 1,589,562
GAAP GROSS PROFIT $ 484,379 $
759,650 $ 1,029,381 $ 1,510,940 Share-based compensation (a) 5,022
3,507 9,084 6,117 Amortization of acquisition-related intangible
assets (b) 28,822 19,721 53,578
39,337
NON-GAAP GROSS PROFIT $ 518,223
$ 782,878 $ 1,092,043 $ 1,556,394
GAAP RESEARCH AND DEVELOPMENT EXPENSES $ 218,418 $
204,030 $ 441,144 $ 402,859 Share-based compensation (a)
(22,309 ) (17,500 ) (43,352 ) (33,175 )
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES $ 196,109
$ 186,530 $ 397,792 $ 369,684
GAAP
SALES AND MARKETING EXPENSES $ 96,681 $ 83,398 $ 198,501 $
160,370 Share-based compensation (a) (9,948 ) (7,204
) (19,483 ) (13,461 )
NON-GAAP SALES AND MARKETING
EXPENSES $ 86,733 $ 76,194 $ 179,018 $
146,909
GAAP GENERAL AND ADMINISTRATIVE
EXPENSES $ 41,932 $ 54,085 $ 89,979 $ 102,754 Share-based
compensation (a) (7,143 ) (6,238 ) (13,913 )
(11,726 )
NON-GAAP GENERAL AND ADMINISTRATIVE
EXPENSES $ 34,789 $ 47,847 $ 76,066 $
91,028
GAAP TOTAL OPERATING EXPENSES $ 380,458
$ 342,994 $ 868,273 $ 669,110 Share-based compensation (a) (39,400
) (30,942 ) (76,748 ) (58,362 ) Amortization of acquisition-related
intangible assets (b) (13,681 ) (1,481 ) (27,362 ) (3,127 )
Impairment of acquisition-related intangible assets (c) ― ―
(61,000 ) ―
NON-GAAP TOTAL OPERATING
EXPENSES $ 327,377 $ 310,571 $ 703,163 $
607,621
GAAP OPERATING INCOME $ 103,921 $
416,656 $ 161,108 $ 841,830 Cost of revenue adjustments (a) (b)
33,844 23,228 62,662 45,454 Operating expense adjustments (a) (b)
(c) 53,081 32,423 165,110
61,489
NON-GAAP OPERATING INCOME $ 190,846
$ 472,307 $ 388,880 $ 948,773
GAAP OTHER INCOME (EXPENSE), NET $ (12,777 ) $ (13,579 ) $
(36,347 ) $ (29,214 ) Convertible debt interest (d) 22,603
21,125 44,737 42,089
NON-GAAP OTHER INCOME (EXPENSE), NET $ 9,826 $
7,546 $ 8,390 $ 12,875
GAAP NET
INCOME $ 80,973 $ 273,946 $ 119,998 $ 542,894 Cost of revenue
adjustments (a) (b) 33,844 23,228 62,662 45,454 Operating expense
adjustments (a) (b) (c) 53,081 32,423 165,110 61,489 Other income
(expense) adjustments (d) 22,603 21,125 44,737 42,089 Income tax
adjustments (e) (54,045 ) (22,023 ) (122,364 )
(33,197 )
NON-GAAP NET INCOME $ 136,456 $
328,699 $ 270,143 $ 658,729 Diluted net
income per share: GAAP $ 0.38 $ 1.14 $ 0.55 $ 2.28 Non-GAAP $ 0.66
$ 1.41 $ 1.27 $ 2.84 Shares used in computing diluted net
income per share: GAAP 212,712 240,756 218,490 238,463 Non-GAAP (f)
208,093 232,808 212,351 231,570
SanDisk
Corporation Reconciliation of Preliminary GAAP to Non-GAAP
Operating Results (1) (in thousands, unaudited)
Three months ended Six months
ended June 28, 2015 June 29, 2014 June 28,
2015 June 29, 2014 SUMMARY RECONCILIATION OF
DILUTED SHARES: GAAP 212,712 240,756 218,490
238,463 Adjustments for share-based compensation 89 336 107 266
Offsetting shares from call options (4,708 ) (8,284 ) (6,246 )
(7,159 )
Non-GAAP (f) 208,093 232,808 212,351
231,570 ––––––––––––––– (1) To
supplement our condensed consolidated financial statements
presented in accordance with generally accepted accounting
principles (GAAP), we use non-GAAP measures of operating results,
net income and net income per share, which are adjusted from
results based on GAAP to exclude certain expenses, gains and
losses. These non-GAAP financial measures are provided to enhance
the user's overall understanding of our current financial
performance and our prospects for the future. Specifically, we
believe the non-GAAP results provide useful information to both
management and investors as these non-GAAP results exclude certain
expenses, gains and losses that we believe are not indicative of
our core operating results and because they are consistent with the
financial models and estimates published by many analysts who
follow us. For example, because the non-GAAP results exclude the
expenses we recorded for share-based compensation, amortization of
acquisition-related intangible assets related to acquisitions of
Pliant Technology, Inc. in May 2011, FlashSoft Corporation in
February 2012, Schooner Information Technology, Inc. in June 2012,
SMART Storage Systems in August 2013 and Fusion-io, Inc. in July
2014, impairment of acquisition-related in-process research and
development 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, we believe the
inclusion of non-GAAP financial measures provides consistency in
our financial reporting. In addition, our non-GAAP diluted shares
are adjusted for the impact of expensing share-based compensation
and include the impact of the call options which, when exercised,
will offset the issuance of dilutive shares from the convertible
senior notes, while our GAAP diluted shares exclude the
anti-dilutive impact of these call options. These non-GAAP results
are some of the primary indicators management uses for assessing
our performance, allocating resources, and planning and forecasting
future periods. Further, management uses non-GAAP information that
excludes certain non-cash charges, such as share-based
compensation, amortization of acquisition-related intangible
assets, impairment of acquisition-related in-process research and
development 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, as these
non-GAAP charges do not reflect the cash operating results of the
business or the ongoing results. These measures should be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for, or superior to, GAAP
results. These non-GAAP measures may be different than the non-GAAP
measures used by other companies. (a) Share-based
compensation expense. (b) Amortization of
acquisition-related intangible assets, primarily developed
technology, customer relationships, and trademarks and trade names
related to the acquisitions of Pliant Technology, Inc., FlashSoft
Corporation, Schooner Information Technology, Inc., SMART Storage
Systems and Fusion-io, Inc. (c) Impairment of
acquisition-related in-process research and development intangible
assets related to the acquisition of Fusion-io, Inc. (d)
Incremental interest expense related to the non-cash economic
interest expense associated with the convertible senior notes and
the 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. (e) Income taxes
associated with certain non-GAAP to GAAP adjustments and the
effects of one-time income tax adjustments recorded in a specific
quarter for GAAP purposes are reflected on a forecast basis in the
non-GAAP tax rate but not in the forecasted GAAP tax rate.
(f) 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.
SanDisk Corporation
Preliminary Condensed Consolidated Balance Sheets (in
thousands, unaudited) June 28, 2015
December 28, 2014 ASSETS Current assets: Cash
and cash equivalents $ 685,790 $ 809,003 Short-term marketable
securities 1,078,221 1,455,509 Accounts receivable, net 640,842
842,476 Inventory 780,773 698,011 Deferred taxes 160,935 180,134
Other current assets 310,795 214,992
Total current assets 3,657,356 4,200,125 Long-term
marketable securities 2,239,072 2,758,475 Property and equipment,
net 804,764 724,357 Notes receivable and investments in Flash
Ventures 936,392 962,817 Deferred taxes 158,506 161,827 Goodwill
831,328 831,328 Intangible assets, net 390,355 542,351 Other
non-current assets 131,658 108,677
Total assets $ 9,149,431 $ 10,289,957
LIABILITIES, CONVERTIBLE SHORT-TERM DEBT CONVERSION OBLIGATION
AND EQUITY Current liabilities: Accounts payable trade $
412,403 $ 404,237 Accounts payable to related parties 139,771
136,051 Convertible short-term debt (1) 892,054 869,645 Other
current accrued liabilities 356,480 506,293 Deferred income on
shipments to distributors and retailers and deferred revenue
236,352 274,657 Total current liabilities
2,037,060 2,190,883 Convertible long-term debt 1,222,642
1,199,696 Non-current liabilities 163,080
245,554 Total liabilities 3,422,782
3,636,133 Convertible short-term debt conversion
obligation (1) 104,666 127,143 Stockholders' equity: Common
stock 5,141,172 5,236,982 Retained earnings 704,389 1,499,149
Accumulated other comprehensive loss (223,578 )
(208,072 ) Total stockholders' equity 5,621,983 6,528,059
Non-controlling interests ― (1,378 ) Total equity
5,621,983 6,526,681 Total liabilities,
convertible short-term debt conversion obligation and equity $
9,149,431 $ 10,289,957 –––––––––––––––
(1) The 1.5% Convertible Senior Notes due 2017 were convertible
through June 30, 2015 as a result of the Company’s common stock
price exceeding the trigger price set forth in the indenture.
Accordingly, the carrying value of the notes is reported as
short-term debt as of June 28, 2015. Based upon the Company's stock
price not exceeding the trigger price set forth in the indenture at
June 30, 2015, the 1.5% Convertible Senior Notes due 2017 will not
be convertible during the calendar quarter ending September 30,
2015. The Convertible short-term debt conversion obligation
represents the difference between the carrying value of the
convertible debt and the principal amount due in cash upon
conversion.
SanDisk
Corporation Preliminary Condensed Consolidated Statements of
Cash Flows (in thousands, unaudited)
Three months ended Six months ended June 28,
2015 June 29, 2014 June 28, 2015 June 29,
2014 Cash flows from operating activities: Net income $
80,973 $ 273,946 $ 119,998 $ 542,894 Adjustments to
reconcile net income to net cash provided by operating activities:
Deferred taxes (2,232 ) 641 (3,197 ) 7,592 Depreciation 70,074
61,364 139,155 121,453 Amortization 86,358 72,996 169,732 145,594
Provision for doubtful accounts 310 388 640 (159 ) Share-based
compensation expense 44,422 34,449 85,832 64,479 Excess tax benefit
from share-based plans (1,476 ) (10,552 ) (10,341 ) (28,012 )
Impairment and other ― ― 63,709 ― Other non-operating (2,909 ) (312
) (7,096 ) 708 Changes in operating assets and liabilities:
Accounts receivable, net (51,190 ) (163,687 ) 201,709 (76,998 )
Inventory (67,707 ) 48,562 (81,652 ) 6,445 Other assets (12,379 )
(55,066 ) (107,052 ) (519 ) Accounts payable trade 3,733 49,795
(22,357 ) 13,249 Accounts payable to related parties (8,099 )
(9,292 ) 3,720 4,280 Other liabilities (111,014 )
(62,372 ) (215,071 ) (178,067 ) Total adjustments
(52,109 ) (33,086 ) 217,731
80,045 Net cash provided by operating activities
28,864 240,860 337,729
622,939
Cash flows from investing activities:
Purchases of short and long-term marketable securities (580,930 )
(1,511,635 ) (1,273,586 ) (2,778,534 ) Proceeds from sales of short
and long-term marketable securities 877,931 1,078,061 1,923,028
2,093,666 Proceeds from maturities of short and long-term
marketable securities 106,811 249,875 206,692 379,495 Acquisition
of property and equipment, net (95,562 ) (44,149 ) (193,849 )
(78,666 ) Investment in Flash Ventures ― (24,296 ) ― (24,296 )
Notes receivable issuances to Flash Ventures (71,347 ) (63,607 )
(171,846 ) (87,959 ) Notes receivable proceeds from Flash Ventures
86,463 87,952 176,156 112,304 Purchased technology and other assets
(5,374 ) (684 ) (6,874 ) (1,553 ) Acquisitions, net of cash
acquired ― ― ― 2,368 Other (866 ) ― (866 ) ―
Net cash provided by (used in) investing activities
317,126 (228,483 ) 658,855
(383,175 )
Cash flows from financing activities:
Repayment of debt financing ― ― (68 ) ― Proceeds from employee
stock programs 4,855 51,682 35,699 103,564 Excess tax benefit from
share-based plans 1,476 10,552 10,341 28,012 Dividends paid (62,596
) (50,838 ) (127,099 ) (102,398 ) Share repurchases (1)
(253,576 ) (256,996 ) (1,037,475 ) (371,448 )
Net cash used in financing activities (309,841 )
(245,600 ) (1,118,602 ) (342,270 ) Effect of changes
in foreign currency exchange rates on cash (299 )
1,400 (1,195 ) 1,375 Net
increase (decrease) in cash and cash equivalents 35,850 (231,823 )
(123,213 ) (101,131 ) Cash and cash equivalents at beginning
of period 649,940 1,116,938 809,003 986,246
Cash and cash equivalents at end
of period $ 685,790 $ 885,115 $ 685,790 $
885,115 ––––––––––––––– (1) Share repurchases include
cash used to repurchase common stock and cash used to settle
employee tax withholding obligations due upon the vesting of
restricted stock units.
SanDisk Corporation
Preliminary Quarterly Metrics Revenue Mix by
Category (1) % of revenue (unaudited) Percentages may not add to
100% due to rounding
Q1'14
Q2'14 Q3'14
Q4'14 Q1'15
Q2'15 FY'14 FY'15
YTD Embedded (2) 20 % 19 % 24 % 26 % 25 %
20
%
23 % 23 % Removable (3) 40 % 40 % 38 % 33 % 38 %
44
%
38 % 41 % Client SSD Solutions (4) 22 % 21 % 17 % 16 % 13 %
10
%
19 % 12 % Enterprise Solutions (5) 6 % 8 % 10 % 15 % 14 %
14
%
10 % 14 % Other (6) 11 % 12 % 11 % 10 % 10 %
11
%
11 % 11 % Total Revenue 100 % 100 % 100 % 100 % 100 %
100
%
100 % 100 %
(1) Revenue by category is estimated based
on analysis of the information the company collects in its sales
reporting processes.
(2) Embedded includes products that attach
to a host system board.
(3) Removable includes products such as
cards, USB flash drives and audio/video players.
(4) Client SSD Solutions includes SSDs
used in client devices and associated software.
(5) Enterprise Solutions includes SSDs,
system solutions and software used in data center applications.
(6) Other includes wafers, components,
accessories and license and royalty.
Revenue Mix by Channel % of revenue
(unaudited)
Q1'14 Q2'14
Q3'14 Q4'14
Q1'15 Q2'15
FY'14 FY'15 YTD
Retail 35 % 33 % 32 % 31 % 35 %
39
%
33 % 37 % Commercial (1) 65 % 67 % 68 % 69 % 65 %
61
%
67 % 63 % Total Revenue 100 % 100 % 100 % 100 % 100 %
100
%
100 % 100 %
(1) Commercial includes revenue from OEMs,
system integrators, value-added resellers, direct sales and license
and royalties.
SanDisk Corporation Preliminary Quarterly
Metrics (unaudited)
Q1'14 Q2'14
Q3'14 Q4'14
Q1'15 Q2'15 Q/Q
Change in Gigabytes Sold -10% +31% +9% +4% -15% -1% Y/Y
Change in Gigabytes Sold +20% +51% +43% +32% +24% -6% Q/Q
Change in ASP/Gigabyte -3% -16% -3% -4% -10% -6% Y/Y Change
in ASP/Gigabyte -7% -26% -26% -24% -29% -21% Q/Q Change in
Cost/Gigabyte(1) -3% -12% -3% +3% -6% -4% Y/Y Change in
Cost/Gigabyte(1) -23% -28% -23% -15% -17% -10% Average
Gigabyte/Unit Capacity 13.9 14.1 16.5 22.3 20.8 19.2 As of
end of period: Factory Headcount (2)(3) 1,366 2,874 3,276 3,284
3,149 3,149
Non-Factory Headcount(4)
4,490 4,664 5,461
5,412 5,490 5,371
(5)
Total Headcount 5,856 7,538 8,737 8,696 8,639 8,520
(1) Cost per gigabyte and cost reduction
are non-GAAP and are computed from non-GAAP cost of revenue.
(2) Reflects SanDisk China and Malaysia
factory employees, excluding temporary and contract workers.
(3) During 2014, 1,505 employees were
converted from contractor to employee status in SanDisk's assembly
and test facility in China.
(4) Reflects SanDisk non-factory
employees, excluding temporary and contract workers.
(5) Headcount at the end of Q2’15 included
107 employees who had been notified of reduction-in-force but were
still on the payroll as of the end of Q2’15.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150722006332/en/
SanDisk CorporationInvestor Contacts:Jay Iyer,
408-801-2067jay.iyer@sandisk.comorBrendan Lahiff,
408-801-1732brendan.lahiff@sandisk.comorMedia
Contact:Michael Diamond,
408-801-1108michael.diamond@sandisk.com
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