SanDisk Announces First Quarter 2015 Results
MILPITAS, Calif.--(BUSINESS WIRE)--SanDisk Corporation (NASDAQ: SNDK), a global leader in flash storage solutions, today announced results for the first quarter ended March 29, 2015. First quarter revenue of $1.33 billion declined 12 percent on a year-over-year basis and decreased 23 percent sequentially. On a GAAP(1) basis, first quarter net income was $39 million, or $0.17 per share, compared to net income of $269 million, or $1.14 per share, in the first quarter of fiscal 2014 and $202 million, or $0.86 per share, in the fourth quarter of fiscal 2014. First quarter GAAP results include a $61 million impairment charge for an in-process R&D project from the Fusion-io acquisition and $41 million of restructuring and other charges. On a non-GAAP(2)(3) basis, first quarter net income was $134 million, or $0.62 per share, compared to net income of $330 million, or $1.44 per share, in the first quarter of fiscal 2014 and net income of $294 million, or $1.30 per share, in the fourth quarter of fiscal 2014. First quarter non-GAAP results include $41 million of restructuring and other charges. For a reconciliation of non-GAAP to GAAP results, see accompanying financial tables and footnotes. “We are disappointed with our financial and operational performance and are quickly taking aggressive measures to regain the excellence in execution that we have delivered in the past,” said Sanjay Mehrotra, president and chief executive officer, SanDisk. “Our top priorities for 2015 are to strengthen our product roadmap and rebuild our momentum across the business. We are excited about the long-term opportunities available to us and believe we are uniquely positioned in the industry to deliver innovative solutions to our growing customer base.” KEY FINANCIAL RESULTS (in millions, except percentages and per share amounts) GAAP (1) $0.86 OTHER FINANCIAL INFORMATION ($ 55) NEWS HIGHLIGHTS SanDisk launched a new category of “Big Data Flash” with the launch of the InfiniFlashTM System, a next generation storage platform offering flash at massive scale and at a breakthrough cost metric for the customer. SanDisk announced its 48-layer, second-generation 3D NAND planned for use in a broad range of solutions from removable products to enterprise SSDs. SanDisk introduced iNAND® 7132, a 1Y-nanometer 3-bit-per-cell (X3) embedded storage solution for flagship mobile devices. The iNAND 7132 storage solution uses SmartSLC to drive near single-level-cell performance for high-performance, data-intensive applications. SanDisk introduced the 200GB* SanDisk Ultra® microSDXC™ UHS-I card, the world’s highest capacity microSDTM card for use in mobile devices. SanDisk introduced a suite of robust, automotive grade NAND flash solutions designed for next-generation ‘connected cars’ and automotive infotainment systems. SanDisk announced today a second quarter 2015 dividend of $0.30 per share of common stock, payable on May 26, 2015 to stockholders of record as of the close of business on May 4, 2015. CONFERENCE CALL SanDisk’s first quarter of fiscal 2015 conference call is scheduled today at 2:00 P.M., Pacific Time, Wednesday, April 15, 2015. The conference call will be webcast and can be accessed live, and throughout the quarter, at SanDisk’s website at www.sandisk.com/IR. To participate in the call via telephone, the dial-in number is 719-325-4858 and the password is 3263627. Participants are encouraged to dial in at least 10 minutes before the call commences. 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, iNAND and SanDisk Ultra are trademarks of SanDisk Corporation, registered in the United States and other countries. InfiniFlash is a trademark of SanDisk Corporation. microSDXC and microSD are trademarks of SD-3C, LLC. This news release contains certain forward-looking statements, including those regarding our business prospects, our intended financial, operational and strategic plans and priorities, our future performance, our customer base 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; 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; 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; 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 Annual Report on Form 10-K for the fiscal year ended December 28, 2014. 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 convertible senior notes outstanding. (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. Actual user storage may be less. 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. Share-based compensation expense. (1)Revenue by category is estimated based on analysis of the information the company collects in its sales reporting processes. (1) Reflects SanDisk China and Malaysia factory employees, excluding temporary and contract workers. (2) Reflects SanDisk non-factory employees, excluding temporary and contract workers. (3) During fiscal 2014, 1,505 employees were converted from contractor to employee status in SanDisk's assembly and test facility in China.
Apr 15, 2015 | www.businesswire.com
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