SanDisk Corporation Form 8-K Dated 1/21/04

Current Report
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934


Delaware	000-26734	77-0191793

(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)


140 Caspian Court, Sunnyvale, California		94089

(Address of principal executive offices)		(Zip Code)

On January 21, 2004, SanDisk Corporation (the “Registrant”) issued a press release announcing a two-for-one stock split of its common stock to be effected in the form of a stock dividend. The press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

On January 21, 2004, the Registrant issued a press release to report its financial results for its fourth quarter and fiscal year ended December 28, 2003. The press release is attached hereto as Exhibit 99.2 and is incorporated herein in its entirety by reference.

The information contained herein and in the accompanying Exhibit 99.2 shall be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, where such incorporation is provided for, and shall be specifically incorporated by reference into our currently effective registration statements on Form S-3 and Form S-8. Except as provided in the previous sentence, the information in this Item 12, including Exhibit 99.2 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.


Number		Description of Document

99.1		Press Release of SanDisk Corporation dated January 21, 2004 announcing a two-for-one stock split of its common stock.

99.2		Press Release of SanDisk Corporation dated January 21, 2004 to report its financial results for its fourth quarter and fiscal year ended December 28, 2003.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


SanDisk Corporation

By:	/s/ MICHAEL GRAY

	Name:	Michael Gray
	Title:	Chief Financial Officer and Senior Vice
		President, Finance and Administration
		(Principal Financial and Accounting Officer)


Exhibit Number		Description of Document

99.1		Press Release of SanDisk Corporation dated January 21, 2004 announcing a two-for-one stock split of its common stock.

99.2		Press Release of SanDisk Corporation dated January 21, 2004 to report its financial results for its fourth quarter and fiscal year ended December 28, 2003.

EX-99.1 3 f95789exv99w1.txt EXHIBIT 99.1 Exhibit 99.1 CONTACT: SanDisk Corporation Lori Barker (408) 542-9565 lbarker@sandisk.com SANDISK ANNOUNCES 2-FOR-1 STOCK SPLIT SUNNYVALE, CA, JANUARY 21, 2004 - SanDisk Corporation (NASDAQ:SNDK) today announced that its Board of Directors approved a two-for-one stock split of its common stock to be effected in the form of a stock dividend. The stock split will entitle each stockholder of record at the close of business on February 3, 2004 (record date) to receive one additional share for every share of SanDisk common stock held on that date. Shares resulting from the split will be distributed by the transfer agent on February 18, 2004 (payment date). SanDisk, the world's largest supplier of flash data storage card products, designs, manufactures and markets industry-standard, solid-state data, digital imaging and audio storage products using its patented, high density flash memory and controller technology. SanDisk is based in Sunnyvale, CA. The matters discussed in this news release contain forward looking statements including relating to the Company's plans to effect a 2-for-1 forward stock split and the timing thereof that are subject to certain risks and uncertainties, including that the timing of the split may be changed and as described under the caption, "Factors That May Affect Future Results" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this release. SanDisk's web site/home page address: http://www.sandisk.com EX-99.2 4 f95789exv99w2.txt EXHIBIT 99.2 . . . Exhibit 99.2 CONTACT: Investor Contact: Media Contact: Lori Barker Mike Wong (408) 542-9565 (408) 548-0223

SANDISK ANNOUNCES RECORD FOURTH QUARTER REVENUES AND OPERATING EARNINGS ANNUAL REVENUES INCREASE 99% YEAR-OVER-YEAR TO EXCEED $1 BILLION; ANNUAL EARNINGS PER SHARE INCREASE 298% YEAR-OVER-YEAR SUNNYVALE, CA, January 21, 2004 -- SanDisk Corporation (NASDAQ:SNDK), the world's largest supplier of flash storage card products, today announced results for the fourth quarter ended December 28, 2003. Total fourth quarter revenues grew 116% to $389 million compared to the fourth quarter of 2002 and increased 38% sequentially. Income from license and royalties grew to $36 million, up 63% from $22 million in the prior quarter. Fourth quarter net income was $88 million compared to $20 million and $15 million for the fourth quarter of 2002 and the third quarter of 2003, respectively. Earnings per share grew 262% for the fourth quarter of 2003 and were $0.94 per diluted share compared with $0.26 per diluted share in the same quarter of 2002. Total revenue for fiscal 2003 was $1.1 billion, up 99% from $541 million in 2002. Product revenues were $982 million, up 99% from $493 million in 2002. Net income was $169 million, compared to net income of $36 million in 2002. Earnings per share for fiscal 2003 were $2.03 per diluted share, which compared to net earnings of $0.51 per diluted share in 2002. "Our excellent performance in the fourth quarter capped an outstanding year for SanDisk," said Eli Harari, President and CEO of SanDisk Corporation. "In the fourth quarter we were able to meet the strong surge in holiday season demand and increased our megabyte shipments by 39%, primarily from increased production of .13 micron NAND at our FlashVision joint venture. In the past two quarters alone, we shipped almost as many megabytes of flash memory as in the prior fifteen years combined. Royalty income increased dramatically in the fourth quarter, reflecting the industry-wide growth of flash memory shipments by our licensees. This is a testimony to the value of SanDisk's broad based patents in these growing markets." "I am grateful to our worldwide employees for their fantastic team execution, our global customers for making this our first billion dollar year, and our partners and suppliers. In particular, we are privileged to have Toshiba as our steadfast FlashVision joint venture partner. We are also appreciative of the excellent support we are receiving from Samsung in consistently meeting their supply commitments in the face of tight capacity." "We are optimistic about our business prospects, based on projected continuing strong growth in our target markets for digital cameras and portable digital consumer electronics, the growing adoption of our cards in camera cell phones, and our growing market share in USB flash drives. Flash storage technology and product innovations are enabling numerous other emerging industrial, telecom, automotive and medical applications. Market research reports are forecasting flash cards to grow from $3.5 billion in 2003 to more than $10 billion by 2007. SanDisk is the market leader for flash cards worldwide and we believe we are exceptionally well positioned to be a major participant as this very large opportunity unfolds. We expect to face competition from new flash memory chip suppliers starting late in 2004 or in 2005. This will challenge us to relentlessly drive down our costs through our technology transitions and economies of scale, create new and exciting storage products, and expand our global sales reach and brand awareness among consumers." Q4 FINANCIAL/BUSINESS HIGHLIGHTS - Product revenues were a record $353 million, a growth rate of 36% sequentially and 123% year-over-year. - Income from license and royalties increased to $36 million, up 63% from $22 million in the third quarter and up 70% from the corresponding quarter last year. - Sales of CompactFlash and SD cards each exceeded $100 million in the fourth quarter. SanDisk also experienced strong sales growth of Cruzer Mini, miniSD, xD Picture Card and TriFlash products. - Total megabytes sold in the fourth quarter were a record and increased 39% sequentially and 250% year-over-year. Total megabytes sold in 2003 were approximately 235% higher than in 2002. - Average price per megabyte sold in the fourth quarter declined 1.7% sequentially and 36% compared to the corresponding quarter of last year. Average price per megabyte sold in 2003 declined by 40% compared to 2002. - Total gross margin was 42.3% of total revenues and product gross margin was 36.4%, up from 35.3% in the third quarter of 2003. - Net cash provided by operating activities was approximately $109 million in the fourth quarter and SanDisk completed an underwritten public offering in the fourth quarter adding $522 million in net proceeds. SanDisk's cash and short-term investment position was $1.3 billion at year-end. - SanDisk signed an agreement with Fujifilm enabling the Company to manufacture xD-Picture Cards for Fuji and to sell cards under the Fuji label through SanDisk's global retail distribution channels. - SanDisk was added to the prestigious NASDAQ -100(R) Index. - Toshiba and SanDisk announced that they intend to accelerate construction of a new 300-millimeter Fab 3 wafer fabrication facility at Toshiba's Yokkaichi operations in order to meet projected growing demand for NAND flash memory in the second half of the decade. SEPARATE ANNOUNCEMENT SanDisk separately announced today that its Board of Directors approved a two-for-one stock split of its common stock to be effected in the form of a stock dividend to each stockholder of record at the close of business on February 3, 2004. BUSINESS OUTLOOK FOR 2004 SanDisk is optimistic about business prospects in 2004 and expects: - Total annual revenues between $1.5 billion and $1.75 billion - License and royalty revenue of approximately $30 million per quarter with potential upside in the first and fourth quarters - Average change in selling price per megabyte comparable to the overall decline in 2003 rates at approximately 40%. Price declines are expected to be more moderate in the first half and in the second half of the year price declines are expected to reflect new capacity increases - Product gross margins in the first half of approximately 32-36%, and 28-32% in the second half - Operating expenses are expected to increase as the business grows and average approximately 15% of total revenues - Effective tax rate of approximately 37% - Capital equipment outlays of approximately $75 million primarily for SanDisk test equipment and $175 million in equipment loans to FlashVision. In the first quarter of 2004 SanDisk projects: - Modest seasonal decline in product revenues of 5%-10% sequentially. License and royalty revenues comparable with the fourth quarter of 2003 - Product gross margins of between 33% and 35% - Operating expense sequential growth of approximately 12%-14% due to volume increases, additional research and development hiring, and increases in marketing expenses. These projections could vary significantly depending on a number of factors primarily related to growth in demand and the growth in supply, both of which are difficult to forecast accurately for any particular quarter in 2004. FORWARD-LOOKING STATEMENTS This news release contains certain forward-looking statements, including our business outlook, expectations for new product introductions, capacity, future product revenues, average selling prices, gross margins, operating margins and tax rates, 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 and adversely affect our business, financial condition and results of operations. Risks that may cause these forward-looking statements to be inaccurate include among others: market demand for our products that may grow more slowly than our expectations or a slower adoption rate for our products in new markets that we are targeting, fluctuations in operating results, yields and possible delays related to our planned conversion to 90 nanometer NAND flash currently planned to start in the second half of the year, any interruption of or delay in supply from any of the semiconductor manufacturing facilities that supply products to us, future average selling price erosion that may be more severe than our expectations due to possible excess industry capacity of flash memory either from existing suppliers or from new competitors, price increases from non-captive flash memory sources and third-party subcontractors, higher than expected operating expenses due to unanticipated hiring and marketing expenses, higher than anticipated capital expenditures due to unexpected outlays for test equipment and FlashVision, adverse global economic and geo-political conditions, including adverse currency exchange rates, the timely development, internal qualification and customer acceptance of new products that are based on the 90 nanometer NAND technology, fluctuations in license and royalty revenues, business interruption due to earthquakes or other natural disasters, particularly in areas in the Pacific Rim where we manufacture and assemble products, further impairment of our investments in Tower Semiconductor Ltd. due to any decline in stock valuations, and the other risks detailed from time-to-time in our Securities and Exchange Commission filings and reports, including, but not limited to, the Form 10-Q for the quarter ended September 28, 2003 and the Annual Report on Form 10-K for the year ended December 29, 2002. Future results may differ materially from those previously reported. We assume no obligation to update the information contained in this release. ABOUT SANDISK SanDisk Corporation, the world's largest supplier of flash storage card products, designs, manufactures and markets industry-standard, solid-state data, digital imaging and audio storage products using its patented, high-density flash memory and controller technology. SanDisk is based in Sunnyvale, CA. CONFERENCE CALL SanDisk's fourth quarter 2003 conference call is scheduled for 2:00 p.m. Pacific Time, Wednesday, January 21, 2004. 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 (888) 515-2781 or (719) 457-2605 for international callers. The call will also be available by telephone replay through Sunday, January 25, 2004, by dialing (888) 203-1112 or, for international callers, (719) 457-0820 and entering the pass code 565670. A copy of this press release will be filed with 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. SanDisk's web site / home page address: http:/ / www.sandisk.com All trade names are either registered trademarks or trademarks of their respective holders. SANDISK CORPORATION Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited)
Three Months Ended Twelve Months Ended --------------------------- ----------------------------- December 28, December 29, December 28, December 29, 2003 2002 2003 2002 ----------- ----------- ------------ ----------- Revenues: Product $ 353,403 $ 158,714 $ 982,341 $ 492,900 License and royalty 35,892 21,114 97,460 48,373 --------- --------- ----------- --------- Total revenue 389,295 179,828 1,079,801 541,273 Cost of product revenues 224,681 99,882 641,189 352,452 --------- --------- ----------- --------- Gross profits 164,614 79,946 438,612 188,821 Operating expenses: Research and development 25,263 17,328 84,200 63,177 Sales and marketing 21,251 11,800 66,317 40,407 General and administrative 9,210 8,168 31,057 27,086 --------- --------- ----------- --------- Total operating expenses 55,724 37,296 181,574 130,670 Operating income 108,890 42,650 257,038 58,151 Equity in income of joint ventures 88 572 178 856 Interest income 3,243 2,124 8,865 8,675 Interest expense (1,687) (1,593) (6,750) (6,700) Gain (loss) in investment in foundries 667 (13,962) 3,746 (15,163) Loss on unauthorized sale of UMC shares -- -- (18,339) -- Loss in equity investment -- (1,800) (148) (2,700) Other loss, net (1,705) (518) (2,709) (3,140) --------- --------- ----------- --------- Income before taxes 109,496 27,473 241,881 39,979 Provision for income taxes 21,658 7,863 73,022 3,739 --------- --------- ----------- --------- Net income $ 87,838 $ 19,610 $ 168,859 $ 36,240 ========= ========= =========== ========= Net income per share: Basic $ 1.10 $ 0.28 $ 2.33 $ 0.53 Diluted $ 0.94 $ 0.26 $ 2.03 $ 0.51 Shares used in computing net income per share: Basic 79,942 69,057 72,391 68,805 Diluted 95,126 80,213 85,808 71,230
SANDISK CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
December 28, 2003 December 29, 2002* ----------------- ------------------ (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 734,479 $ 220,785 Short-term investments 528,117 235,706 Investment in foundries 36,976 110,069 Accounts receivable, net 184,236 81,086 Inventories 116,896 88,595 Deferred tax asset 70,806 -- Prepaid expenses, other current assets and tax receivable 53,394 18,489 ---------- --------- Total current assets 1,724,904 754,730 Property and equipment, net 59,470 30,307 Investment in foundries 40,446 24,197 Investment in FlashVision 144,616 142,825 Deferred tax asset 7,927 6,922 Deposits and other non-current assets 46,151 14,598 ---------- --------- Total Assets $2,023,514 $ 973,579 ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY: Current Liabilities: Accounts payable $ 88,737 $ 28,294 Accounts payable to related parties 45,013 26,349 Accrued payroll and related expenses 28,233 11,690 Income taxes payable 37,254 15,978 Deferred tax liability -- 6,922 Research and development liability, related party 11,800 10,507 Other accrued liabilities 36,661 26,780 Deferred income on shipments to distributors and retailers and deferred revenue 99,136 43,760 ---------- --------- Total current liabilities 346,834 170,280 Convertible subordinated notes payable 150,000 150,000 Deferred revenue and other non-current liabilities 25,992 25,579 ---------- --------- Total Liabilities 522,826 345,859 Commitments and contingencies Stockholders' Equity: Preferred stock -- -- Common stock 1,207,958 585,968 Retained earnings 253,624 84,765 Accumulated other comprehensive income (loss) 39,106 (43,013) ---------- --------- Total stockholders' equity 1,500,688 627,720 Total Liabilities and Stockholders' Equity $2,023,514 $ 973,579 ========== =========
*Information derived from the audited Consolidated Financial Statements. ~~-----END PRIVACY-ENHANCED MESSAGE-----~~


	ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE.
	ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
	ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
SIGNATURES
EXHIBIT 99.1
EXHIBIT 99.2

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