SanDisk 2009 Annual Report Download - page 91

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This is a TAB type table. Insert
conts here. Annual Report
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Overview
Fiscal Years Ended
January 3,
2010
%of
Revenue
December 28,
2008
%of
Revenue
December 30,
2007
%of
Revenue
(In thousands, except percentages)
Product revenues .................. $3,154,314 88.4% $ 2,843,243 84.8% $ 3,446,125 88.4%
License and royalty revenues ......... 412,492 11.6% 508,109 15.2% 450,241 11.6%
Total revenues ................ 3,566,806 100.0% 3,351,352 100.0% 3,896,366 100.0%
Cost of product revenues ............ 2,282,180 64.0% 3,288,265 98.1% 2,693,647 69.1%
Gross profit ...................... 1,284,626 36.0% 63,087 1.9% 1,202,719 30.9%
Operating expenses
Research and development ....... 384,158 10.8% 429,949 12.8% 418,066 10.7%
Sales and marketing ............ 208,514 5.8% 328,079 9.8% 294,594 7.6%
General and administrative ...... 171,359 4.8% 204,765 6.1% 181,509 4.7%
Impairment of goodwill ......... — — 845,453 25.2% — —
Impairment of acquisition-related
intangible assets ............. — — 175,785 5.3% — —
Amortization of acquisition-related
intangible assets ............. 1,167 0.0% 17,069 0.5% 25,308 0.6%
Restructuring and other ......... 38 0.0% 35,467 1.1% 6,728 0.2%
Total operating expenses ........ 765,236 21.4% 2,036,567 60.8% 926,205 23.8%
Operating income (loss) ............. 519,390 14.6% (1,973,480) (58.9)% 276,514 7.1%
Other income (expense), net ......... (15,589) (0.5)% 21,106 0.6% 76,144 2.0%
Income (loss) before provision for
taxes .......................... 503,801 14.1% (1,952,374) (58.3)% 352,658 9.1%
Provision for income taxes ........... 88,491 2.5% 34,250 1.0% 156,831 4.1%
Net income (loss) .................. 415,310 11.6% (1,986,624) (59.3)% 195,827 5.0%
Less: Net income attributable to
non-controlling interests .......... — — — — 5,211 0.1%
Net income (loss) attributable to
common stockholders ............ $ 415,310 11.6% $(1,986,624) (59.3)% $ 190,616 4.9%
General
We are the inventor of and largest supplier of NAND flash storage card products. Our mission is to provide
simple, reliable and affordable storage for consumer use in portable devices. We sell our products globally
through broad retail and OEM distribution channels.
We design, develop and manufacture data storage products and solutions in a variety of form factors using
our flash memory, proprietary controller and firmware technologies. We purchase the vast majority of our
NAND flash memory supply requirements through our significant flash venture relationships with Toshiba which
provide us with leading-edge, low-cost memory wafers. Our removable card products are used in a wide range of
consumer electronics devices such as mobile phones, digital cameras, gaming devices and laptop computers. Our
embedded flash products are used in mobile phones, navigation devices, gaming systems, imaging devices and
computing platforms. For computing platforms, we provide high-speed, high-capacity storage solutions known as
SSDs that can be used in lieu of hard disk drives in a variety of computing devices.
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