Taking Measures To Further Strengthen Balance Sheet and Reduce Expenses
Milpitas, CA, October 20, 2008 - SanDisk® Corporation (NASDAQ:SNDK), the world's largest supplier of flash storage card products, today announced results for the third quarter ended September 28, 2008, a non-binding MOU to restructure joint venture operations with Toshiba, a significant reduction in planned capital expenditures for 2009 and actions to reduce operating expenses. Total third-quarter revenue was $821 million, a decrease of 21% on a year-over-year basis. Net loss in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was ($155) million, or ($0.69) per diluted share, compared to GAAP net income of $85 million, or $0.36 per diluted share, in the third quarter of 2007.
Excluding the impact of acquisition-related charges, share-based compensation expense and the related tax effect, the third quarter non-GAAP net loss was ($132) million, or ($0.59) per diluted share, compared to the third quarter 2007 non-GAAP net income of $130 million, or $0.54 per diluted share.
SanDisk also announced today the signing of a non-binding memorandum of understanding with Toshiba to restructure the current Fab 3 and Fab 4 joint ventures, which would substantially reduce SanDisk's capital commitments in 2009, strengthen its balance sheet, and provide flexibility in managing supply.
"While third quarter revenue was down year-over-year, record megabyte sales demonstrate the resiliency and breadth of our channels and the elasticity of our end markets in the face of deteriorating global macroeconomic conditions. However, excess inventories resulted in severe pricing pressures and a disappointing loss for the quarter including $109 million of inventory related charges." said Eli Harari, Chairman and CEO. "To further strengthen our balance sheet we are taking decisive actions including: restructuring of our Fab joint ventures, deep cuts to our 2009 fab capacity investments, and substantial expense reduction measures for 2009. We believe the industry-wide moves to curtail flash capacity expansions are sowing the seeds for the next recovery. Times are tough, however, we believe we can maintain our strong market position with our intellectual property, our industry lead in manufacturing 3-bits per cell Flash, our strong execution of the 43-nanometer technology transition, our diversified OEM and retail global sales channels and our strong balance sheet."
Key Metrics for Third Quarter of 2008.
SanDisk's third quarter 2008 conference call is scheduled for 2:00 p.m. P.D.T., Monday, October 20, 2008. The conference call will be webcast by CCBN and can be accessed live, and throughout the quarter, at SanDisk's website at www.sandisk.com/IR and at www.streetevents.com for registered streetevents.com users. To participate in the call via telephone, the dial-in number is (913) 312-0939. The password is 6040075. 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.
A complete reconciliation between GAAP and non-GAAP information referred to in this release is provided in the attached tables.
This news release contains certain forward-looking statements, including statements about our business prospects and outlook, anticipated recovery in our industry, our ability to maintain our market position, our ability to continue to execute on our 43-nanometer technology transition, our cost reduction activities, the availability of our slotMusic cards, and our long-term prospects, that are based on our current expectations and involve 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. Risks that may cause these forward-looking statements to be inaccurate include, among others:
Future results may differ materially from those previously reported. We do not intend to update the information contained in this release.
SanDisk Corporation, the inventor and world's largest supplier of flash storage cards, is a global leader in flash memory - from research, manufacturing and product design to consumer branding and retail distribution. SanDisk's product portfolio includes flash memory cards for mobile phones, digital cameras and camcorders, digital audio/video players, USB flash drives for consumers and the enterprise, embedded memory for mobile devices, and solid state drives for computers. SanDisk (www.sandisk.com/corporate) is a Silicon Valley-based S&P 500 company, with more than half its sales outside the United States.
SanDisk, and the SanDisk logo are trademarks of SanDisk Corporation, registered in the United States and other countries. slotMusic is a trademark of SanDisk Corporation. microSD and SDHC are trademarks. Memory Stick Micro and M2 are trademarks of Sony Corporation. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder (s).
SanDisk Supporting Documents (.pdf)
- Reconciliation of GAAP to Non-GAAP Operating Results
- Reconciliation of GAAP to Non-GAAP Operating Results
*1 gigabyte (GB) = 1 billion bytes.
**Up to 45 MB/s read/write. Based on internal testing; performance may vary depending upon host device. 1 megabyte (MB) = 1 million bytes. X=150KB/sec.
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