8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported) April 21, 2005

SanDisk Corporation

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 000-26734
(Commission
File Number) 77-0191793
(IRS Employer
Identification No.)

140 Caspian Court, Sunnyvale, California
(Address of principal executive offices) 94089
(Zip Code)

Registrant’s telephone number, including area code (408) 542-0500

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition

     On April 21, 2005, SanDisk Corporation (“the Registrant”) issued a press release to report its financial results for its first quarter ended April 3, 2005. The press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

     The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall be deemed to be “furnished” and therefore 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.

Item 9.01. Financial Statements and Exhibits

     (c) Exhibits

Number	Description of Document
99.1	Press Release of SanDisk Corporation dated April 21, 2005 to report its financial results for its first quarter ended April 3, 2005.

SIGNATURES

     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.

Date: April 21, 2005

SanDisk Corporation
By:	/s/ Judy Bruner
	Name:	Judy Bruner
	Title:	Executive Vice President, Administration and Chief Financial Officer (Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit
Number	Description of Document
99.1	Press Release of SanDisk Corporation dated April 21, 2005 to report its financial results for its first quarter ended April 3, 2005.

EX-99.1

Exhibit 99.1

CONTACT:	Investor Contact:	Media Contact:
	Lori Barker Padon (408) 542-0585	Mike Wong (408) 548-0223

SANDISK ANNOUNCES FIRST QUARTER RESULTS

•   Revenue of $451 million up 17% year-over-year

•   Net Income of $75 million up 17% year-over-year; EPS $0.39

•   Operating Margin of 25% driven by strong product gross margin

•   Successful 90-nanometer transition

SUNNYVALE, CA, April 21, 2005 — SanDisk® Corporation (NASDAQ:SNDK), the world’s largest supplier of flash storage card products, today announced results for the first quarter ended April 3, 2005. Total first quarter revenues increased 17% on a year-over-year basis to $451 million. First quarter net income was $75 million, up 17% compared to $64 million in the first quarter of 2004. Fully diluted earnings per share were $0.39, up 15% compared with $0.34 in the first quarter of 2004.

“The first quarter was another good quarter for SanDisk coming off of the strong fourth quarter holiday sales. We are particularly pleased with this quarter’s profitability. Shipments from 90-nanometer chips increased to more than 80% of our first quarter’s captive supply as 90-nanometer yields exceeded our expectations. Our product gross margins grew to 37%, driven by our increased 90-nanometer output and a modest 10% sequential decline in the average price per megabyte. Industry-wide supply for NAND memory is currently well balanced with growing demand from existing applications and new markets. Demand in the first quarter was exceptionally strong for our high capacity cards, and royalty revenues grew nicely reflecting the continuing growth of the NAND flash market for our licensees,” said SanDisk CEO Eli Harari. “As we move forward in 2005, we believe SanDisk is well positioned to continue expanding into new markets such as the emerging market for our flash cards in handsets, the digital flash music player market and the exciting market for our cards in video game consoles such as the Sony PlayStation Portable.”

Financial Results and Highlights

•   Product revenue grew 18% and royalty revenue grew 7% year-over-year.

•   Megabytes sold in the first quarter increased 189% year-over-year and were down approximately 13% from the seasonally strong fourth quarter of 2004.

•   Average density per card sold in retail was 411 megabytes, up 125% from the first quarter of 2004 and up 15% sequentially.

•   Average price per megabyte sold in the first quarter declined at a moderate pace of 10% sequentially and 59% from the first quarter of 2004.

•   Product gross margin in the first quarter increased 5 points both year-over-year and sequentially to a record 37.2%.

•   Operating income was $114 million and 25% of revenue compared to $99 million and 25% of revenue in the first quarter of 2004 and $126 million and 23% of revenue in the fourth quarter of 2004.

•   Cash flow from operations was $134 million compared to $76 million in the first quarter of 2004 and $12 million in the fourth quarter of 2004.

•   The SanDisk Sansa^™ line of digital music players began shipping at the end of the first quarter. These players have embedded flash of 512 megabyte or 1 gigabyte capacities and they have a SD^™ card slot for expandable storage.

•   Gaming cards began shipping in Memory Stick PRO Duo^™ and SD formats to support new generation portable game consoles that now incorporate features such as digital audio, video playback and photo viewing. These features demand high capacity memory storage cards.

•   SanDisk Ultra® and SanDisk Extreme™ high performance product lines were among our fastest growing products year-over-year.

•   Retail presence almost doubled year-over-year to 114,000 storefronts. Most recent additions have been in mobile handset, convenience and gaming stores.

•   The new Flash Partners 300-millimeter Fab 3 began running initial test wafers in the first quarter and in February we announced the 8Gigabit chip that is being jointly developed with Toshiba on 70-nanometer technology.

Scheduled Interview

SanDisk Corporation Executive Vice President and Chief Operating Officer, Sanjay Mehrotra, is scheduled to appear on CNBC’s “Wake-Up Call”, April 22, 2005 at approximately 6:50 a.m. EDT. Judy Bruner, SanDisk’s Executive Vice President, Administration and CFO is scheduled to appear on Bloomberg TV “Market Line”, April 22, 2005 at approximately 1:45 p.m. EDT.

Conference Call

SanDisk’s first quarter 2005 conference call is scheduled for 2:00 p.m. Pacific Time, Thursday, April 21, 2005. The conference call will be web cast 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) 981-4903. The call will also be available by telephone replay through Wednesday, April 27, 2005, by dialing (719) 457-0820 and entering the pass code 3497353. 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.

Forward-Looking Statements

This news release contains certain forward-looking statements, including statements about our business outlook, expectations for new product introductions, applications, markets and customers and scheduled appearances by certain of our executives 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: slower than expected growth in market demand for our products or a slower adoption rate for these products in current and new markets that we are targeting, slower than expected expansion of our global sales channels, fluctuations in operating

results, unexpected yield variances and longer than expected low yields and other possible delays related to our conversion to 90-nanometer and 70-nanometer NAND flash technology or the ramp-up of the new 300-millimeter flash fabrication facility, any interruption of or delay in supply from any of the semiconductor manufacturing facilities that supply products to us, our inability to make additional planned smaller geometry conversions in a timely manner, 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 or decreased demand, price increases from non-captive flash memory sources and third-party subcontractors, higher than expected operating expenses, higher than anticipated capital equipment expenditures, adverse global economic and geo-political conditions, including adverse currency exchange rates and acts of terror, the timely development, internal qualification and customer acceptance of new products that are based on the 90-nanometer and 70-nanometer NAND technologies, fluctuations in license and royalty revenues, business interruption due to earthquakes or other natural disasters, particularly in areas in the Pacific Rim and Japan where we manufacture and assemble products, scheduled appearances by our executives could be cancelled or delayed by us or the network 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-K for the year ended January 2, 2005 and our quarterly reports on Form 10-Q. Future results may differ materially from those previously reported. We do not intend to update the information contained in this release.

About SanDisk

SanDisk is the original inventor of flash storage cards and is the world’s largest supplier of flash data storage card products using its patented, high-density flash memory and controller technology. SanDisk is headquartered in Sunnyvale, CA and has operations worldwide, with more than half its sales outside the U.S.

www.sandisk.com

SanDisk and SanDisk Ultra are trademarks of SanDisk Corporation, registered in the United States and other countries. Sansa and SanDisk Extreme are trademarks of SanDisk Corporation. SanDisk is an authorized licensee of the SD trademark. Memory Stick PRO Duo is a trademark of Sony Corporation. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holders.

SanDisk Corporation
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)

	Three Months Ended
	April 3, 2005		March 28, 2004
Revenues:
Product	$	399,679	$	338,779
License and royalty		51,296		48,151
Total revenue		450,975		386,930
Cost of product revenues		251,188		231,012
Gross profits		199,787		155,918
Operating expenses:
Research and development		45,947		26,762
Sales and marketing		24,597		19,661
General and administrative		15,724		10,936
Total operating expenses		86,268		57,359
Operating income		113,519		98,559
Other income (expense), net		4,761		2,390
Income before taxes		118,280		100,949
Provision for income taxes		43,764		37,381
Net income	$	74,516	$	63,568
Shares used in computing net income per share Basic		180,631		161,207
Diluted		189,999		189,403
Net income per share Basic	$	0.41	$	0.39
Diluted	$	0.39	$	0.34

SanDisk Corporation
Condensed Consolidated Balance Sheets
(In thousands)

	April 3, 2005			January 2, 2005*
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	571,805		$	463,795
Short-term investments		842,095			859,175
Investment in foundries		18,448			20,398
Accounts receivable, net		208,810			194,535
Inventories		223,783			196,422
Deferred tax asset		92,746			83,150
Prepaid expenses, other current assets and tax receivable		23,839			62,653
Total current assets		1,981,526			1,880,128
Property and equipment, net		166,079			147,231
Investment in foundries		11,557			14,377
Investment in FlashVision		172,493			178,681
Investment in FlashPartners		23,272			24,192
Deferred tax asset		6,696			1,861
Note receivable, Flash Vision		55,504			35,413
Deposits and other non-current assets		32,937			38,297
Total Assets	$	2,450,064		$	2,320,180
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current Liabilities:
Accounts payable	$	94,482		$	82,974
Accounts payable to related parties		64,500			48,115
Accrued payroll and related expenses		25,579			41,785
Income taxes payable		45,868			39,139
Research and development liability, related party		6,149			5,549
Other accrued liabilities		33,178			45,584
Deferred income on shipments to distributors and retailers and deferred revenue		130,326			90,307
Total current liabilities		400,082			353,453
Deferred tax liability		6,131			—
Deferred revenue and non-current liabilities		18,217			26,577
Total Liabilities		424,430			380,030
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		—			—
Common stock		1,423,255			1,406,553
Retained earnings		594,756			520,240
Accumulated other comprehensive income		12,640			18,893
Deferred compensation		(5,017	)		(5,536	)
Total stockholders’ equity		2,025,634			1,940,150
Total Liabilities and Stockholders’ Equity	$	2,450,064		$	2,320,180

*Information derived from the audited Consolidated Financial Statements.

SanDisk Corporation
Condensed Consolidated Comparative Statement of Cash Flows
March 2005
(in thousands, unaudited)

	Three months ended
	April 3, 2005			March 28, 2004
Cash flows from Operating activities:
Net income		74,516			63,568
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred Taxes		1,088			0
Loss (gain) investment in foundries		4,029			573
Depreciation and amortization		14,462			7,999
Provision for doubtful accounts		0			1,681
Other non-cash charges		(212	)		(388	)
FlashVision wafer cost adjustment		(487	)		(321	)
Changes in operating assets and liabilities:
Accounts receivable		(14,275	)		47,120
Prepaid expenses, deposits and other assets		43,972			28,847
Inventories		(27,361	)		(42,814	)
Income taxes payable and other accounts payable		(4,788	)		(32,236	)
Other current liabilities		(12,406	)		1,752
Other current liabilities, related party		16,985			2,951
Deferred income on shipments and deferred revenue		38,415			(2,698	)
Other non-current liabilities		338			0
Total adjustments		59,760			12,466
Net cash provided by operating activities		134,276			76,034
Cash flows from Investing activities:
Purchases of short term investments		(139,198	)		(241,277	)
Proceeds from sale of short term investments		153,450			192,157
Acquisition of capital equipment, net		(30,151	)		(9,410	)
Loan to FlashVision		(22,222	)		(21,637	)
Net cash used in investing activities		(38,121	)		(80,167	)
Cash flows from financing activities:
Employee stock programs		11,272			6,015
Net cash provided by financing activities		11,272			6,015
Effect of changes in foreign currency exchange rates on cash		583			0
Net increase in cash and cash equivalents		108,010			1,882
Cash and cash equivalents at beginning of period		463,795			734,479
Cash and cash equivalents at end of period		571,805			736,361
Additional information:
Net change in cash and cash equivalents	$	108,010		$	1,882
Net change in short-term investments		(17,080	)		48,651
Net change in cash, cash equivalents and short-term investments	$	90,930		$	50,533