SanDisk

History

2015

Sale of SanDisk of Western Digital company for $19 billion

On October 21, 2015 Western Digital officially announced purchase of SanDisk for $19 billion. The united company which was headed by the CEO of Western Digital Steve Milligan will be based in the headquarters of the buyer in the city of Irvayn (the State of California, the USA). The president of SanDisk Sanjay Mehrotra will join Western Digital the board.

Fall of profit by 2.5 times

At the end of January, 2016 SanDisk which is in process of merge to Western Digital published the annual financial report. The profit of the company was reduced more than by 2.5 times.

For the reporting 12-month period closed on January 3, 2016 revenue of SanDisk made $5.56 billion that is 16% less than an indicator of year prescription. Net profit was during this time reduced to $388.5 million from $1 billion.

Replaceable drives remain the main source of revenues of SanDisk

In structure of annual sales revenues of SanDisk in the retail channel were 36% of total whereas in 2014 they were measured by 33%. The share of proceeds from sales of products to producers and other commercial clients, on the contrary, decreased — from 67% to 64%.

The most part of revenues of SanDisk — 40% in 2015 — still create replaceable drives. In the 2014th 38% of sales of the company fell to their share. The share of the built-in solutions in 2015 reached 24%. The remained percent was divided by corporate data storage devices, consumer solid state drives and other products.

The CEO of SanDisk Sanjay Mehrotra said that the company achieved "significant progress" in strengthening of the product portfolio in the second half of 2016.

We also reached the sign moment at the beginning of our long-term way to transition to memory 3D NAND, having begun the retail supplies of the first such products and trial samples to OEM clients in the fourth quarter — the head of the American company noted.

In 2015 SanDisk increased deliveries of drives to 51% in terms of their total capacitance that there are more growth rates of all market, the producer notes. In 2016 the company expects rise below average market.

In October, 2015 Western Digital  announced  purchase of SanDisk for $19 billion, is going to close the transaction to the third quarter 2016. In October-December of the 2015th SanDisk expenses connected with this merge made $28.1 million because of what the quarterly net profit of the company fell to a third to $135.5 million^[1]

2014: Interruptions in deliveries collapsed the profit of SanDisk

On January 22, 2015 SanDisk announced the financial results in 2014. Though for the 12-month period the profit of the company fell slightly, according to the results of final quarter it was reduced significantly what interruptions in deliveries of products are guilty of.^[2]

For reporting 2014 which SanDisk closed for itself on December 28 the 2014th the net profit of the company was $1.01 billion, or $4.52 counting on an action, against $1.04 billion, or $4.44 for one security, the previous year. Revenue jumped up from $6.17 billion in 2013 to $6.63 billion a year later. Operating profit in a year changed slightly, having reached $1.56 billion.

In the report of SanDisk it is also said that the volume of operating expenses of the producer of solid state drives and flash cards appeared to equal $1.51 billion in 2014 whereas the indicator of year prescription was $1.31 billion. In the specified expenses costs for marketing and the organization of sales entered $383.3 million, the total administrative expenses in $214.9 million R&D-инвестиции in the amount of $852.3 million.

Interruptions in deliveries collapsed the profit of SanDisk

Commenting on the published financial statements, the president and the CEO of SanDisk Sanjay Mehrotra expressed disappointment to quarter results which the arisen problems with deliveries of products negatively affected. Because of difficulties revenue of the company in October-December, 2014 grew up for only 0.4% year on year (to $1.74 billion), and net profit dropped by 40% to $202 million.

According to the analyst of Pacific Crest Securities Monika Garg, the SanDisk company did not expand the production capacities about two years therefore now she reaps the fruits of the failure to act, doing forecasts below market.

In the first quarter 2015 of SanDisk expects sale in the range from $1.4 billion up to $1.45 billion whereas the analysts polled by Thomson Reuters predict revenue at the level of $1.6 billion SanDisk warns that throughout all first half of 2015 income can decrease as the company will increase product inventories.^[3]

SanDisk hopes to return to financial growth in the second half of the year thanks to increase in production of chips of memory and a share in the market of solid state drives. These devices in 2014 occupied 29% of revenue of vendor, their sales jumped up as in consumer, and corporate segments.

As of April, 2014 the SSD drives SanDisk offer an energy efficient, compact and long-lasting alternative traditional tough to disks for desktop computers, notebooks and ultrathin PCs.

Providing the increased performance for consumer and corporate applications, solid state drives have data transfer rate which in many respects exceeds the speed of devices with traditional hard drives (HDD). SSD drives consume less energy and render smaller load of system resources.

In controllers of SanDisk solid state drives the architecture of parallel processing of data thanks to which they show excellent characteristics, both as independent drives, and as a part of dual accelerators of a cache is used, meeting needs of corporate users. And as the SanDisk company makes solid state drives according to specifications and form factors of customers, OEM manufacturing can expect satisfaction of needs for design and performances.

2011: Merger of Pliant Technology

May, 2011. SanDisk announced signing of the final agreement about purchase of Pliant Technology Inc. company, developer of solid state drives (SSD) for business market. In accordance with the terms agreements of SanDisk will be paid by about 327 million US dollars in the form of money and will transfer some packet of securities. The transaction was approved by Boards of Directors of both companies and at the moment is in process of a design which provides receiving approval from regulating authorities. Full completion of the transaction is planned for the end of the second financial quarter of SanDisk. According to forecasts of SanDisk, this transaction will reduce by 2-3% the volume of profit of corporation for 2011 financial year (not according to GAAP), but will promote profit increase based on 2012 financial year (not according to GAAP).

Notes