SanDisk: Fiscal 4Q10 Financial Results

   
SanDisk Corporation announced results for the fourth quarter and fiscal year ended January 2, 2011.

Total fourth quarter revenue of $1.33 billion increased 7% on a year-over-year basis and increased 8% on a sequential basis. Total revenue for fiscal 2010 of $4.83 billion increased 35% from $3.57 billion in fiscal 2009.

Fourth quarter net income, in accordance with U.S. Generally Accepted Accounting Principles (GAAP), was $485 million, or $2.01 per diluted share, compared to net income of $340 million, or $1.45 per diluted share, in the fourth quarter of fiscal 2009 and $322 million, or $1.34 per diluted share, in the third quarter of fiscal 2010. The GAAP net income for fiscal 2010 was $1.30 billion, or $5.44 per diluted share, compared to net income of $415 million, or $1.79 per diluted share, in fiscal 2009. The fourth quarter of fiscal 2010 includes a $203 million tax provision benefit related to the release of net deferred tax asset valuation allowances.

On a non-GAAP basis, which excludes the impact of share-based compensation expense, amortization of acquisition-related intangible assets, non-cash economic interest expense associated with the convertible debt, related tax adjustments and tax valuation allowances, fourth-quarter net income was $307 million, or $1.27 per diluted share, compared to net income of $277 million, or $1.18 per diluted share, in the fourth quarter of fiscal 2009 and net income of $311 million, or $1.30 per diluted share, in the third quarter of fiscal 2010. For reconciliation of non-GAAP to GAAP results, see accompanying financial tables and footnotes.

"A strong Q4 capped an exceptional year for SanDisk with record results. Our growth was driven by accelerating momentum in the mobile embedded business and gains in APAC markets and customers," said Sanjay Mehrotra, President and CEO, SanDisk. "The market environment continues to be robust and we expect 2011 to be another strong year for SanDisk with smartphones and tablets continuing to lead our growth."

4Q10 Financial metrics

• Total fourth quarter revenue was $1.33 billion, up 7% year-over-year and up 8% sequentially.
• Product revenue was $1.24 billion, up 9% for both year-over-year and sequentially.
• License and royalty revenue was $87 million, down 13% year-over-year and down 10% sequentially.
• Cash flow from operations in the fourth quarter was $359 million and free cash flow was $254 million.
• Total cash and cash equivalents and short and long-term marketable securities at the end of the fourth quarter of fiscal 2010 was $5.3 billion compared to $3.0 billion at the end of the fourth quarter of fiscal 2009 and $5.1 billion at the end of the third quarter of fiscal 2010.
• Average price per gigabyte sold in the fourth quarter declined 30% on a year-over-year basis and declined 15% sequentially.