SanDisk Corp. (
SNDK)
Q3 2009 Earnings Call Transcript
October 20, 2009 5:00 p.m. ET
Executives
Jay Iyer - Director, Investor Relations
Eli Harari - Chairman and Chief Executive Officer
Sanjay Mehrotra - President and Chief Operating Officer
Judy Bruner - Chief Financial Officer and Executive Vice President, Administration
Analysts
Daniel Amir - Lazard Capital Markets
Vijay Rakesh - ThinkEquity LLC
Daniel Barenbaum - Auriga USA
Uche Orji - UBS
Kevin Cassidy - Thomas Wiesel Partners
James Covello - Goldman Sachs
Paul Coster - J.P. Morgan Securities Inc.
Tristan Gerra - Robert W. Baird & Co’s
Craig Ellis - Caris & Company
Bob Gujavarty - Deutsche Bank Securities Inc.
Edwin Mok - Needham & Company
Gary Hsueh - Oppenheimer & Company
Presentation
Operator
Good day. And welcome to the SanDisk Corporation third quarter 2009 earnings conference call. As a reminder, today’s conference is being recorded.
At this time, I would like to turn the conference over to Jay Iyer, Director of Investor Relations. Please go ahead.
Jay Iyer
Thank you, Kevin. And good afternoon, everyone. Joining us on the call today are Dr. Eli Harari, Chairman and CEO of SanDisk; Sanjay Mehrotra, President and COO; and Judy Bruner, Executive Vice President of Administration and CFO. Eli is dialing in from our Shanghai office.
Before we begin, please note that any non-GAAP financial measures discussed during this call as defined by the SEC in Regulation G will be reconciled to the most directly comparable GAAP financial measure. That reconciliation is now available along with supplemental schedules on our website at sandisk.com/ir.
In addition, during our call today we’ll make forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events, including financial projections and future market conditions is a forward-looking statement. Actual results may differ materially from those expressed in these forward-looking statements.
For more information, please refer to the risk factors discussed in the documents we file from time-to-time with the SEC, including our annual report on Form 10-K/A for fiscal 2008, and subsequent quarterly reports on Form 10-Q. SanDisk assumes no obligation to update these forward-looking statements which speak of the date hereof.
With that, I would like to turn the call over to Eli.
Eli Harari
Thank you, Jay. And good afternoon from Shanghai. So visiting our plants here, I’ll keep my remarks brief. You’ll hear a lot more today from Sanjay and Judy. Third quarter was an outstanding quarter, substantially better than we had expected. One factor has been the favorable industry conditions which we see continuing into the fourth quarter, other contributing factors were our focus on improved profitability, successful diversification into new sales channels and really excellent product cost reductions.
Our decision late last year to participate more aggressively in the OEM space began to pay off in the third quarter. OEM unit demand took off and the OEM channel became our number one revenue generator, OEM growth is diversified and global. In addition to growing our traditional embedded iNAND and bundled OEM cards, we are gaining traction in the markets for private label cards, flash components and flash wafers.
Our OEM orders for Q4 are very strong. We believe that our high quality captive iNAND output is allowing us to develop long-term relationships with top tier OEMs and given how large these OEM opportunities are, there is substantial room for us to go further -- grow further our OEM business in 2010.
Concurrently, our branded retail business continues to execute well with a focus on profitability and we believe we are maintaining share in all retail geographies even after raising prices during the year. SanDisk is uniquely advantaged with a strong retail position and a growing OEM business both on a local basis.
