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SanDisk Q4 Revenue More Than Doubles

Sunnyvale, Calif. – A strong surge in holiday season demand and a 39 percent increase in megabyte shipments, helped flash storage card maker SanDisk increase fourth quarter revenue 116 percent, to $389.3 million, up from $179.8 million in the year-ago period.

Fourth quarter product revenue hit $353.4 million, up 123 percent, compared with $158.7 million in the same period in 2002. Income from licensing and royalties grew 63 percent in the fourth quarter, to $35.9 million, up for $21.1 million year-on-year.

‘We are optimistic about our business prospects, based on continuing strong growth in our target markets for digital cameras and portable digital consumer electronics, the growing adoption of our cards in camera cellphones and our growing market share in USB flash drives,’ said Eli Harari, president/CEO.

Although average price per megabyte sold in the fourth quarter declined 36 percent, compared with the same three months a year earlier, product gross margin for the quarter climbed to 36.4 percent, up from 35.3 percent year-on-year.

Net income in the fourth quarter hit $87.8 million, a jump from the $19.6 million record year-over-year.

For the 12 months, total revenue reached $1.1 billion, up 99 percent from the $541.3 million recorded in the previous year. Product revenue also increase 99 percent for the 12 months, hitting $982.3 million, compared with the previous year’s $492.9 million. Licensing and royalty revenue for the 12 months more than doubled, reaching $97.5 million, from $48.4 million.

Net income for the 12 months moved up to $168.9 million, compared with $36.2 million in the same 12 months a year ago.

In the upcoming year, SanDisk is expecting between $1.5 billion and $1.8 billion in sales, with licensing and royalty revenue at about $30 million per quarter, with potential upside in the first and fourth periods. It is looking for average decline in selling price per megabyte, comparable to the overall 2003 decline, of about 40 percent.

In the first quarter, the company anticipates an average seasonal decline in product revenue of about 5 percent to 10 percent, compared with the fourth quarter just ended. Product gross margins should be between 33 percent and 35 percent, said SanDisk, below the 36.4 percent registered in the fourth quarter.

The company also approved a two-for-one split of its common stock, to be completed in the form of a stock dividend. It includes stockholders of record at the close of business Feb. 3.