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 17, 2008

SanDisk Corporation

(Exact name of registrant as specified in its charter)

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

601 McCarthy Boulevard, Milpitas, California 95035

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (408) 801-1000

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 provision (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

 EXHIBIT 99.1

Item 2.02 Results of Operations and Financial Condition

     On April 17, 2008, SanDisk Corporation (the “Registrant”) issued a press release to report its financial results for its first quarter ended March 30, 2008.

     The press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference. In addition to the condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), the attached press release contains non-GAAP measures of product gross margin, operating income, net income and earnings 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 the Registrant’s current financial performance and its prospects for the future. Specifically, the Registrant believes the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that it believes are not indicative of its core operating results and because it is consistent with the financial models and estimates published by many analysts who follow the Registrant. For example, because the non-GAAP results exclude the expenses the Registrant recorded for share-based compensation in accordance with SFAS 123(R) effective January 2, 2006 and the amortization of intangibles related to the acquisition of Matrix Semiconductor, Inc. in January 2006 and msystems Ltd. in November 2006, the Registrant believes the inclusion of non-GAAP financial measures provide consistency in its financial reporting. These non-GAAP results are some of the primary indicators management uses for assessing performance, allocating resources and planning and forecasting future periods. Further, management uses non-GAAP information as certain non-cash charges such as amortization of purchased intangibles and share-based compensation do not reflect the cash operating results of the business and certain one-time expenses such as write-off of acquired in-process technology do not reflect 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.

     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 this or 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 17, 2008 to report its financial results for its first quarter ended March 30, 2008.

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 17, 2008

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 17, 2008 to report its financial results for its first quarter ended March 30, 2008.

EX-99.1

Exhibit 99.1

SanDisk Corporation
601 McCarthy Boulevard
Milpitas, CA 95035-7932
Phone: 408-801-1000
Fax: 408-801-8657

CONTACT:	Investor Contacts:	Media Contact:
	Lori Barker Padon	Mike Wong
	(408) 801-1384	(408) 801-1240
	Jay Iyer
	(408) 801-2067

SANDISK ANNOUNCES FIRST QUARTER FINANCIAL RESULTS

Milpitas, CA, April 17, 2008 — SanDisk^® Corporation (NASDAQ:SNDK), the world’s largest supplier of flash storage card products, today announced results for the first quarter ended March 30, 2008. Total first-quarter revenue increased 8% on a year-over-year basis to $850 million and net income, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was $18 million, or $0.08 per diluted share, compared to a GAAP net loss of $0.6 million, or $0.00 per diluted share, in the first quarter of 2007.

Excluding the impact of acquisition-related charges, share-based compensation expense and the related tax effect, first quarter non-GAAP net income increased to $48 million, or $0.21 per diluted share, compared to first quarter 2007 non-GAAP net income of $45 million, or $0.19 per diluted share.

“Product sales were solid on the strength of our international business, Sansa^® MP3 players and sales to the mobile handset and GPS markets. Pricing was challenging throughout the quarter due to industry-wide excess supply which adversely impacted our product gross margin,” said Eli Harari, Chairman and CEO. “We expect demand to increase seasonally during the second quarter and price declines to moderate; however, product margins are expected to continue to be under pressure in Q2 with the anticipated benefit of low cost 43-nanometer and 3-bits per cell coming in the second half of the year. We are focused on cost controls and expense reductions and we continue to believe that the cumulative impact of price declines in recent quarters will accelerate the creation of new markets for Flash storage.”

Key Metrics for First Quarter of 2008

• Product revenue was $724 million, up 5% year-over-year.

• License and royalty revenue was $126 million, up 30% year-over-year.

• Total megabytes sold increased 189% year-over-year and decreased 9% from the record fourth quarter of 2007.

• Average price per megabyte sold declined 61% on a year-over-year basis and 29% sequentially.

• Average retail card capacity of 2.06 gigabytes increased 71% on a year-over-year basis and 16% sequentially.

• GAAP product gross margin increased to 18.4% from 14.2% in the first quarter of 2007. Non-GAAP product gross margin increased to 20.9% from 18.5% in the first quarter of 2007.

• GAAP operating income was $5 million compared to a loss of $20 million in the first quarter of 2007. Non-GAAP operating income was $47 million, or 6% of revenue, compared to $47 million, or 6% of revenue, in the first quarter of 2007.

• SanDisk announced an increase in the capacity of its embedded iNAND product to 16 Gigabytes for mobile handset storage.

• SanDisk unveiled the Sansa^® Fuze^™, a feature rich MP3 player.

Scheduled Interview

SanDisk Corporation Chairman and Chief Executive Officer, Eli Harari, is scheduled to appear on CNBC’s “Closing Bell with Maria Bartiromo,” on April 17, 2008 at approximately 1:15 p.m. P.D.T.

Conference Call

SanDisk’s first quarter 2008 conference call is scheduled for 2:00 p.m. P.D.T., Thursday, April 17, 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) 312-0941. The dial-in password is 3645393. 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.

Forward-Looking Statements

This news release contains certain forward-looking statements, including statements about our business prospects and outlook, anticipated increased demand for products, anticipated price declines, our expectation for product margins in Q2 2008, the expected cost benefits of 43-nm and 3-bit per cell manufacturing output in the second half of 2008 and the anticipated emergence of new markets for Flash storage, 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 including our solid state drives, or a slower adoption rate for our products in current and new markets that we are targeting including the mobile phone market,

• future average selling price erosion that may be more severe than our expectations due to decreased demand or excess industry capacity of flash memory from ourselves as well as from existing suppliers or from new competitors,

• adverse global economic and geo-political conditions, including continued declines in the global economy, particularly in the U.S. and Europe, or continued adverse currency exchange rates particularly related to the Japanese yen,

• any interruption of or delay in supply from any of the semiconductor manufacturing or subcontracting facilities, including test and assembly facilities that supply products to us,

• slower than expected expansion of our global sales channels,

• fluctuations in operating results, unexpected yield variances and delays related to our conversion to 43-nanometer NAND flash technology or the ramp-up of the 300-millimeter flash fabrication facility,

• unexpected yield variances in, or delays related to the ramp-up of, 3-bits per cell manufacturing,

• less than expected growth in the average megabyte capacity per card,

• fluctuations in license and royalty revenues,

• higher than anticipated operating expenses,

• business interruption due to earthquakes, hurricanes or other natural disasters, particularly in areas in the Pacific Rim and Japan where we manufacture and assemble products,

• adverse results in litigation or regulatory actions affecting us, and

• 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 30, 2007 and our Forms 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 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, the SanDisk logo, and Sansa are trademarks of SanDisk Corporation, registered in the United States and other countries. Sansa Fuze is a trademark of SanDisk Corporation.

SanDisk Corporation
Preliminary Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)

	Three months ended
	March 30, 2008		April 1, 2007
Revenues:
Product	$	724,051	$	689,357
License and royalty		125,916		96,729
Total revenues		849,967		786,086
Cost of product revenues		576,604		570,088
Amortization of acquisition-related intangible assets		14,582		21,062
Total cost of product revenues		591,186		591,150
Gross profit		258,781		194,936
Operating expenses:
Research and development		111,434		95,640
Sales and marketing		80,156		56,206
General and administrative		57,804		46,991
Restructuring		—		6,516
Amortization of acquisition-related intangible assets		4,475		9,100
Total operating expenses		253,869		214,453
Operating income (loss)		4,912		(19,517	)
Total other income		25,882		36,259
Income before provision for income taxes		30,794		16,742
Provision for income taxes		12,914		12,157
Income after taxes		17,880		4,585
Minority interest		—		5,160
Net income (loss)	$	17,880	$	(575	)
Net income (loss) per share calculation:
Net income (loss) used in computing basic net income (loss) per share	$	17,880	$	(575	)
Tax-effected interest costs related to convertible long term debt		117		—
Net income (loss) used in computing diluted net income (loss) per share	$	17,997	$	(575	)
Net income (loss) per share:
Basic	$	0.08	$	(0.00	)
Diluted	$	0.08	$	(0.00	)
Shares used in computing net income (loss) per share:
Basic		224,518		227,455
Diluted		229,480		227,455

SanDisk Corporation
Reconciliation of GAAP to Non-GAAP Operating Results ⁽¹⁾
(in thousands, except per share data, unaudited)

	Three months ended
	March 30, 2008			April 1, 2007
SUMMARY RECONCILIATION OF NET INCOME
GAAP NET INCOME (LOSS)	$	17,880		$	(575	)
Adjustments:
Share-based compensation (a)		23,226			31,219
Amortization of acquisition-related intangible assets (b)		19,057			30,162
Inventory step-up expense related to msystems acquisition (c)		—			4,947
Income tax adjustments (d)		(12,377	)		(20,918	)
NON-GAAP NET INCOME	$	47,786		$	44,835
GAAP COST OF PRODUCT REVENUES	$	591,186		$	591,150
Share-based compensation (a)		(3,629	)		(3,214	)
Amortization of acquisition-related intangible assets (b)		(14,582	)		(21,062	)
Inventory step-up expense related to msystems acquisition (c)		—			(4,947	)
NON-GAAP COST OF PRODUCT REVENUES	$	572,975		$	561,927
GAAP GROSS PROFIT	$	258,781		$	194,936
Share-based compensation (a)		3,629			3,214
Amortization of acquisition-related intangible assets (b)		14,582			21,062
Inventory step-up expense related to msystems acquisition (c)		—			4,947
NON-GAAP GROSS PROFIT	$	276,992		$	224,159
GAAP RESEARCH AND DEVELOPMENT EXPENSES	$	111,434		$	95,640
Share-based compensation (a)		(8,826	)		(12,687	)
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES	$	102,608		$	82,953
GAAP SALES AND MARKETING EXPENSES	$	80,156		$	56,206
Share-based compensation (a)		(3,511	)		(6,923	)
NON-GAAP SALES AND MARKETING EXPENSES	$	76,645		$	49,283
GAAP GENERAL AND ADMINISTRATIVE EXPENSES	$	57,804		$	46,991
Share-based compensation (a)		(7,260	)		(8,395	)
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSES	$	50,544		$	38,596
GAAP TOTAL OPERATING EXPENSES	$	253,869		$	214,453
Share-based compensation (a)		(19,597	)		(28,005	)
Amortization of acquisition-related intangible assets (b)		(4,475	)		(9,100	)
NON-GAAP TOTAL OPERATING EXPENSES	$	229,797		$	177,348
GAAP OPERATING INCOME (LOSS)	$	4,912		$	(19,517	)
Cost of product revenues adjustments (a)(b)(c)		18,211			29,223
Operating expense adjustments (a)(b)		24,072			37,105
NON-GAAP OPERATING INCOME	$	47,195		$	46,811
GAAP NET INCOME (LOSS)	$	17,880		$	(575	)
Cost of product revenues adjustments (a)(b)(c)		18,211			29,223
Operating expense adjustments (a)(b)		24,072			37,105
Income tax adjustments (d)		(12,377	)		(20,918	)
NON-GAAP NET INCOME	$	47,786		$	44,835
Net income (loss) per share calculation: GAAP
Net income (loss) used in computing basic GAAP net income per share	$	17,880		$	(575	)
Tax-effected interest costs related to convertible long term debt		117			—
Net income (loss) used in computing diluted net income per share	$	17,997		$	(575	)
Net income per share calculation: Non-GAAP
Net income used in computing basic Non-GAAP net income per share	$	47,786		$	44,835
Tax-effected interest costs related to convertible long term debt		117			117
Net income used in computing diluted net income per share	$	47,903		$	44,952
Diluted net income (loss) per share:
GAAP	$	0.08		$	(0.00	)
Non-GAAP	$	0.21		$	0.19
Shares used in computing diluted net income (loss) per share:
GAAP		229,480			227,455
Non-GAAP		229,383			236,426

SanDisk Corporation
Reconciliation of GAAP to Non-GAAP Operating Results ⁽¹⁾

(1)	To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), we use non-GAAP measures of operating results, net income and earnings 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 it is consistent with the financial models and estimates published by many analysts who follow the Company. For example, because the non-GAAP results exclude the expenses we recorded for share-based compensation in accordance with SFAS 123(R) effective January 2, 2006 and the acquisition of Matrix Semiconductor, Inc. in January 2006 and msystems Ltd. in November 2006, we believe the inclusion of non-GAAP financial measures provide consistency in our financial reporting. 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 as certain non-cash charges such as amortization of purchased intangibles and share-based compensation do not reflect the cash operating results of the business and certain one-time expenses such as write-off of acquired in-process technology do not reflect 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.
(a)	Share-based compensation expense.
(b)	Amortization of acquisition-related intangible assets, primarily core and developed technology, related to the acquisition of Matrix (January 2006) and msystems (November 2006).
(c)	Inventory step-up expense related to msystems acquisition.
(d)	Income taxes associated with certain non-GAAP adjustments.

SanDisk Corporation
Preliminary Condensed Consolidated Balance Sheets
(in thousands)

	March 30, 2008		December 30, 2007
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,225,285	$	833,749
Short-term investments		628,416		1,001,641
Accounts receivable from product revenues, net		180,273		462,983
Inventory		694,823		555,077
Deferred taxes		190,839		212,255
Other current assets		117,570		233,952
Total current assets		3,037,206		3,299,657
Long-term investments		1,169,993		1,060,393
Property and equipment, net		457,666		422,895
Notes receivable and investments in flash ventures with Toshiba		1,299,225		1,108,905
Deferred taxes		123,666		117,130
Goodwill		840,853		840,870
Intangibles, net		301,208		322,023
Other non-current assets		57,115		62,946
Total Assets	$	7,286,932	$	7,234,819
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	233,363	$	285,711
Accounts payable to related parties		161,498		158,443
Other current accrued liabilities		277,581		286,850
Deferred income on shipments to distributors and retailers and deferred revenue		158,478		182,879
Total current liabilities		830,920		913,883
Convertible long-term debt		1,225,000		1,225,000
Non-current liabilities		179,894		135,252
Total Liabilities		2,235,814		2,274,135
Minority interest		151		1,067
Stockholders’ Equity:
Common stock		3,825,827		3,797,073
Retained earnings		1,147,949		1,130,069
Accumulated other comprehensive income		77,191		32,475
Total Stockholders’ Equity		5,050,967		4,959,617
Total Liabilities and Stockholders’ Equity	$	7,286,932	$	7,234,819

SanDisk Corporation
Preliminary Condensed Consolidated Statement of Cash Flows
(in thousands, unaudited)

	Three months ended
	March 30, 2008			April 1, 2007
Cash flows from operating activities:
Net income (loss)	$	17,880		$	(575	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred and other taxes		(4,369	)		11,431
(Gain) loss on equity investments		3,934			(2,204	)
Depreciation and amortization		62,883			65,096
Provision for doubtful accounts		5,774			913
Share-based compensation expense		23,226			31,219
Excess tax benefit from share-based compensation		(794	)		(6,261	)
Other non-cash charges		5,392			5,693
Changes in operating assets and liabilities:
Accounts receivable from product revenues		251,138			467,030
Inventory		(140,362	)		(98,109	)
Other assets		135,780			63,426
Accounts payable trade		(52,348	)		(73,234	)
Accounts payable to related parties		3,055			22,547
Other liabilities		(92,556	)		(231,723	)
Total adjustments		200,753			255,824
Net cash provided by operating activities		218,633			255,249
Cash flows from investing activities:
Purchases of short and long-term investments		(354,955	)		(537,162	)
Proceeds from sale and maturities of short and long-term investments		624,413			549,146
Acquisition of property and equipment, net		(56,774	)		(43,799	)
Notes receivable from FlashVision Ltd.		—			24,777
Notes receivable from Flash Partners Ltd.		(37,418	)		—
Purchased technology and other assets		1,125			(13,240	)
Net cash provided by (used in) investing activities		176,391			(20,278	)
Cash flows from financing activities:
Repayment from debt financing		(9,785	)		—
Proceeds from employee stock programs		6,437			38,370
Distribution to minority interest		—			(7,485	)
Excess tax benefit from share-based compensation		794			6,261
Share repurchase programs		—			(42,096	)
Net cash used in financing activities		(2,554	)		(4,950	)
Effect of changes in foreign currency exchange rates on cash		(934	)		388
Net increase in cash and cash equivalents		391,536			230,409
Cash and cash equivalents at beginning of period		833,749			1,580,700
Cash and cash equivalents at end of period	$	1,225,285		$	1,811,109