msystems Reports $217 Million in Revenues and Non GAAP EPS of 32 Cents for the Third Quarter of 2006

Share Name	Share Symbol	Market	Type
M Systems Flash Disk	NASDAQ:FLSH	NASDAQ	Common Stock

M Systems Flash Disk (NASDAQ:FLSH)
Historical Stock Chart

From Jun 2019 to Jun 2024

Click Here for more M Systems Flash Disk Charts.

msystems� (Nasdaq: FLSH), a leader in smart personal storage, today announced financial results for the third quarter ended September 30, 2006. GAAP financial highlights for the third quarter: Revenues totaled $217.1 million, reflecting a 41 percent increase compared with revenues of $153.9 million in the third quarter of 2005 and a 4 percent increase compared with revenues of $209.5 million in the second quarter of 2006. Gross margins were 25.8 percent, 250 basis points higher than gross margins of 23.3 percent in the second quarter of 2006. Net income was $5.8 million, or $0.14 per share on a fully diluted basis, compared with net income of $3.1 million, or $0.08 per share on a fully diluted basis, in the second quarter of 2006. Non GAAP financial highlights for the third quarter: Revenues totaled $217.1 million. Non GAAP gross margins were 26.0 percent, 260 basis points higher than non GAAP gross margins of 23.4 percent in the second quarter of 2006. Non GAAP net income was $13.6 million, or $0.32 per share on a fully diluted basis, compared with non GAAP net income of $10.8 million, or $0.26 per share on a fully diluted basis, in the second quarter of 2006. Non GAAP adjustments for the third quarter of 2006 (and, to the extent applicable, the second quarter of 2006) exclude the effects of stock-based compensation, amortization of intangible assets related to an acquisition, expenses attributable to the proposed merger with SanDisk Corporation, expenses attributable to the review of prior stock option grants and related withholding tax expenses. A reconciliation of all non GAAP results to the comparable GAAP results is set forth below. Commenting on the results, Dov Moran, Chief Executive Officer of msystems said, �The third quarter of 2006 was a unique quarter for msystems, as we announced our acquisition by SanDisk at the end of July. Nonetheless, we grew our revenues significantly compared to the third quarter of 2005 and also grew our revenues compared to the previous quarter. Our results in this past quarter demonstrated the continued strength of our OEM business model and the customer relationships we have built as demand in the quarter from our major OEM customers remained strong. We expect demand to continue to grow in the fourth quarter, typical for the holiday season. �msystems has shown phenomenal growth over the past 5 years � in the third quarter of 2001, we sold less than $10 million compared with $217 million in the third quarter, representing over 20 times growth. In the first nine months of 2006, our revenues were $646 million, higher than our full year 2005 revenues.� Mr. Moran continued, �As proud as I am of our achievements, I am very pleased with the acquisition as I believe that msystems and SanDisk are a great match with strong synergies in technology, channels and products. But most important, at SanDisk we found great people who truly share our first and foremost value: �People First�.� Mr. Moran concluded, �I would like to take this opportunity to thank all the employees of msystems who helped build this company and create its innovation, technology and tremendous success through their commitment to excellence, hard work and loyalty. In addition to the great team at msystems, I would like to thank our shareholders, suppliers and customers � you are all our partners in this successful journey.� Conference call msystems� management will host a conference call to discuss its third quarter financial results at 10:00 a.m. EDT today, October 23, 2006. In light of the pending transaction with SanDisk, there will be no question and answer session following management�s prepared comments on the call. A replay of the call will be available beginning at approximately 12:00 p.m. EDT, October�23, 2006, until October 30, 2006 at 11:59 p.m. To listen to the replay, please call +1 (973) 341-3080; ID code: 7984983. About msystems msystems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. More information is available online at www.msystems.com. msystems. made smarter. All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only. msystems is a trademark of msystems Ltd.; MegaSIM is a trademark of msystems Ltd. in the United States and other countries and registered in Israel and Japan. U3 is a trademark of U3, LLP. This press release includes forward-looking statements including statements regarding the proposed merger with SanDisk Corporation, the future market for the companies� products, as defined in the Private Securities Litigation Reform Act of 1995, including statements about our business outlook for the future, that our based on our current expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to: that the businesses of msystems and SanDisk will not be integrated successfully and that any synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; all risk associated with the development and implementation of x4 technology , including difficulties in utilization or implementation of 4-bit/cell NAND flash, any failure we may experience in perfecting and/or protecting our intellectual property rights related to x4 technology, and the risk that flash manufacturers may opt to utilize such other technologies and not our x4 technology; the risk that msystems business may not perform as expected, risks relating to msystems prior stock option grants, the effect of global economic conditions in general and conditions in msystems� industry and target markets in particular, shifts in supply and demand, difficulty in predicting the level of sales by our venture with a flash partner, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in msystems� and its customers� inventory levels and inventory valuations; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on msystems� and its customers� products and markets; the development, release and sale of new products by strategic suppliers and customers; the development and growth of anticipated markets for msystems� and its customers� products; and other risk factors detailed from time to time in msystems� filings with the Securities and Exchange Commission. msystems assumes no obligation to update the information in this press release and disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Reference to msystems� website above does not constitute incorporation of any of the information thereon into this press release. You may register to receive msystems� future press releases or to download a complete Digital Investor Kit� including press releases, regulatory filings and corporate materials by clicking on the �Digital Investor Kit�� icon at www.kcsa.com. Condensed Consolidated Balance Sheet(U.S. Dollars in thousands) � September 30, � June 30, 2006� 2006� ASSETS � Cash, cash equivalents, short-term bank deposits and marketable securities 160,660� 179,044� Trade receivables, net 129,750� 106,052� Related party trade receivables 1,061� 750� Inventories 117,871� 84,110� Other accounts receivable and prepaid expenses 12,193� 12,608� Severance pay funds 6,412� 5,579� Long-term investments and long-term receivables 7,137� 5,294� Investment in equity method affiliate 649� 615� Property and equipment, net 41,871� 35,723� Deferred purchase credits 85,583� 89,658� Other assets, net 46,957� 42,030� Total assets 610,144� 561,463� � LIABILITIES AND SHAREHOLDERS' EQUITY � CURRENT LIABILITIES: Trade payables 93,719� 80,768� Deferred revenues 3,214� 6,567� Other accounts payable and accrued expenses 37,623� 32,039� Total current liabilities 134,556� 119,374� � LONG-TERM LIABILITIES: Convertible Senior Notes 71,457� 71,431� Accrued severance pay 8,372� 7,458� Other long-term liabilities 7,418� 6,533� Total long-term liabilities 87,247� 85,422� � MINORITY INTEREST IN SUBSIDIARY 14,933� 590� � SHAREHOLDERS' EQUITY � Share capital 10� 10� Additional paid-in capital 350,318� 341,208� Accumulated other comprehensive income 6,656� 4,228� Retained earnings 16,424� 10,631� Total shareholders' equity 373,408� 356,077� � Total liabilities and shareholders' equity 610,144� 561,463� Condensed Consolidated Statements of Operations(U.S. dollars in thousands, except share and per share data) � Three months ended September 30, Three months ended June 30, Nine months ended September 30, 2006� 2005� 2006� 2005� 2006� 2005� � Revenues 217,076� 153,910� 209,493� 121,635� 645,679� 392,540� � Costs and expenses: � Costs of goods sold (1) (2) 161,001� 115,870� 160,779� 87,476� 496,160� 288,717� Research and development, net (1) 13,920� 10,635� 12,996� 9,274� 38,206� 28,084� Selling and marketing (1) 13,161� 8,186� 13,666� 8,580� 40,748� 25,250� General and administrative (1) 9,873� 2,905� 9,199� 4,037� 24,045� 9,405� � � � � � � Total costs and expenses 197,955� 137,596� 196,640� 109,367� 599,159� 351,456� � Operating income 19,121� 16,314� 12,853� 12,268� 46,520� 41,084� Financial income, net 601� 2,373� 1,512� 2,988� 3,479� 6,923� Other income, net -� -� -� -� 1,184� -� � Income before taxes on income (income tax benefit) 19,722� 18,687� 14,365� 15,256� 51,183� 48,007� Taxes on income (income tax benefit) (1,885) -� 1,112� -� 641� -� Income after taxes on income (income tax benefit) 21,607� 18,687� 13,253� 15,256� 50,542� 48,007� � Equity in losses of an affiliate 1,471� 675� 1,334� 656� 4,013� 2,294� Minority interest in earnings of a subsidiary 14,343� 5,204� 8,786� 7,976� 31,952� 21,264� � Net income $5,793� $12,808� $3,133� $6,624� $14,577� $24,449� � Basic net earnings per share $0.15� $0.35� $0.08� $0.18� $0.38� $0.68� � Diluted net earnings per share $0.14� $0.31� $0.08� $0.17� $0.36� $0.62� � Weighted average number of shares used in computing basic earnings per share 38,168,586� 36,246,109� 37,957,382� 36,039,809� 37,907,373� 36,011,603� � Weighted average number of shares used in computing diluted earnings per share 42,773,561� 41,591,548� 42,465,375� 41,070,719� 42,194,638� 40,380,426� � � (1) Stock based compensation expense is included in the following line items: � Cost of goods sold $329� $49� $187� $45� $720� $143� Research and development, net 1,525� 245� 726� 225� 3,072� 715� Selling and marketing 1,304� 320� 691� 296� 2,973� 937� General and administrative 1,167� 172� 710� 156� 2,891� 500� � Total $4,325� $786� $2,314� $722� $9,656� $2,295� � � (2) Costs of goods sold for the three months and nine months ended September 30, 2006, include an extraordinary credit for flash components which were purchased in Q3 and prior periods. Reconciliation of GAAP to Non GAAP Operating Results(U.S. dollars in thousands, except share and per share data) � Three months ended September 30, Three months ended June 30, Nine months ended September 30, 2006� 2005� 2006� 2005� 2006� 2005� � GAAP costs of goods sold $161,001� $115,870� $160,779� $87,476� $496,160� $288,717� Stock based compensation (329) (49) (187) (45) (720) (143) Amortization of intangible assets (93) -� (92) -� (275) -� Withholding taxes related to stock option grants (10) -� (104) -� (131) -� Non GAAP costs of goods sold $160,569� $115,821� $160,396� $87,431� $495,034� $288,574� � GAAP research and development, net $13,920� $10,635� $12,996� $9,274� $38,206� $28,084� Stock based compensation (1,525) (245) (726) (225) (3,072) (715) Withholding taxes related to stock option grants (43) -� (417) -� (529) -� Non GAAP research and development, net $12,352� $10,390� $11,853� $9,049� $34,605� $27,369� � GAAP selling and marketing $13,161� $8,186� $13,666� $8,580� $40,748� $25,250� Stock based compensation (1,304) (320) (691) (296) (2,973) (937) Amortization of intangible assets (333) -� (329) -� (983) -� Withholding taxes related to stock option grants (21) (296) (856) (296) (1,317) (888) Non GAAP selling and marketing $11,503� $7,570� $11,790� $7,988� $35,475� $23,425� � GAAP general and administrative $9,873� $2,905� $9,199� $4,037� $24,045� $9,405� Stock based compensation (1,167) (172) (710) (156) (2,891) (500) Certain G&A expenses* (3,039) -� (3,176) -� (6,215) -� Withholding taxes related to stock option grants (52) -� (515) -� (652) -� Non GAAP general and administrative $5,615� $2,733� $4,798� $3,881� $14,287� $8,905� � GAAP operating income $19,121� $16,314� $12,853� $12,268� $46,520� $41,084� Stock based compensation 4,325� 786� 2,314� 722� 9,656� 2,295� Amortization of intangible assets 426� -� 421� -� 1,259� -� Certain G&A expenses* 3,039� -� 3,176� -� 6,215� -� Withholding taxes related to stock option grants 126� 296� 1,892� 296� 2,629� 888� Non GAAP operating income $27,037� $17,396� $20,656� $13,286� $66,279� $44,267� � GAAP other income, net $0� $0� $0� $0� $1,184� $0� Other income -� -� -� -� (1,184) -� Non GAAP other income, net $0� $0� $0� $0� $0� $0� � GAAP taxes on income (income tax benefit) ($1,885) $0� $1,112� $0� $641� $0� Amortization of intangible assets 149� -� 144� -� 293� -� Other income -� -� -� -� (367) -� Non GAAP taxes on income (income tax benefit) ($1,736) $0� $1,256� $0� $567� $0� � GAAP net income $5,793� $12,808� $3,133� $6,624� $14,577� $24,449� Stock based compensation 4,325� 786� 2,314� 722� 9,656� 2,295� Amortization of intangible assets 277� -� 277� -� 966� -� Certain G&A expenses* 3,039� -� 3,176� -� 6,215� -� Withholding taxes related to stock option grants 126� 296� 1,892� 296� 2,629� 888� Other income -� -� -� -� (817) -� Non GAAP net income $13,560� $13,890� $10,792� $7,642� $33,226� $27,632� � Basic earnings per share GAAP $0.15� $0.35� $0.08� $0.18� $0.38� $0.68� Non GAAP $0.36� $0.38� $0.28� $0.21� $0.88� $0.77� � Diluted earnings per share GAAP $0.14� $0.31� $0.08� $0.17� $0.36� $0.62� Non GAAP $0.32� $0.34� $0.26� $0.19� $0.79� $0.69� � Weighted average number of shares used in computing basic earnings per share GAAP 38,168,586� 36,246,109� 37,957,382� 36,039,809� 37,907,373� 36,011,603� Non GAAP 38,168,586� 36,246,109� 37,957,382� 36,039,809� 37,907,373� 36,011,603� � Weighted average number of shares used in computing diluted earnings per share GAAP 42,773,561� 41,591,548� 42,465,375� 41,070,719� 42,194,638� 40,380,426� Non GAAP 43,300,709� 41,898,049� 42,842,218� 41,262,582� 42,914,699� 40,692,177� � * Certain G&A expenses include expenses attributable to proposed merger with SanDisk Corporation and the review of prior stock option grants. msystems(TM) (Nasdaq: FLSH), a leader in smart personal storage, today announced financial results for the third quarter ended September 30, 2006. GAAP financial highlights for the third quarter: -- Revenues totaled $217.1 million, reflecting a 41 percent increase compared with revenues of $153.9 million in the third quarter of 2005 and a 4 percent increase compared with revenues of $209.5 million in the second quarter of 2006. -- Gross margins were 25.8 percent, 250 basis points higher than gross margins of 23.3 percent in the second quarter of 2006. -- Net income was $5.8 million, or $0.14 per share on a fully diluted basis, compared with net income of $3.1 million, or $0.08 per share on a fully diluted basis, in the second quarter of 2006. Non GAAP financial highlights for the third quarter: -- Revenues totaled $217.1 million. -- Non GAAP gross margins were 26.0 percent, 260 basis points higher than non GAAP gross margins of 23.4 percent in the second quarter of 2006. -- Non GAAP net income was $13.6 million, or $0.32 per share on a fully diluted basis, compared with non GAAP net income of $10.8 million, or $0.26 per share on a fully diluted basis, in the second quarter of 2006. Non GAAP adjustments for the third quarter of 2006 (and, to the extent applicable, the second quarter of 2006) exclude the effects of stock-based compensation, amortization of intangible assets related to an acquisition, expenses attributable to the proposed merger with SanDisk Corporation, expenses attributable to the review of prior stock option grants and related withholding tax expenses. A reconciliation of all non GAAP results to the comparable GAAP results is set forth below. Commenting on the results, Dov Moran, Chief Executive Officer of msystems said, "The third quarter of 2006 was a unique quarter for msystems, as we announced our acquisition by SanDisk at the end of July. Nonetheless, we grew our revenues significantly compared to the third quarter of 2005 and also grew our revenues compared to the previous quarter. Our results in this past quarter demonstrated the continued strength of our OEM business model and the customer relationships we have built as demand in the quarter from our major OEM customers remained strong. We expect demand to continue to grow in the fourth quarter, typical for the holiday season. "msystems has shown phenomenal growth over the past 5 years - in the third quarter of 2001, we sold less than $10 million compared with $217 million in the third quarter, representing over 20 times growth. In the first nine months of 2006, our revenues were $646 million, higher than our full year 2005 revenues." Mr. Moran continued, "As proud as I am of our achievements, I am very pleased with the acquisition as I believe that msystems and SanDisk are a great match with strong synergies in technology, channels and products. But most important, at SanDisk we found great people who truly share our first and foremost value: 'People First'." Mr. Moran concluded, "I would like to take this opportunity to thank all the employees of msystems who helped build this company and create its innovation, technology and tremendous success through their commitment to excellence, hard work and loyalty. In addition to the great team at msystems, I would like to thank our shareholders, suppliers and customers - you are all our partners in this successful journey." Conference call msystems' management will host a conference call to discuss its third quarter financial results at 10:00 a.m. EDT today, October 23, 2006. In light of the pending transaction with SanDisk, there will be no question and answer session following management's prepared comments on the call. A replay of the call will be available beginning at approximately 12:00 p.m. EDT, October 23, 2006, until October 30, 2006 at 11:59 p.m. To listen to the replay, please call +1 (973) 341-3080; ID code: 7984983. About msystems msystems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. More information is available online at www.msystems.com. msystems. made smarter. All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only. msystems is a trademark of msystems Ltd.; MegaSIM is a trademark of msystems Ltd. in the United States and other countries and registered in Israel and Japan. U3 is a trademark of U3, LLP. This press release includes forward-looking statements including statements regarding the proposed merger with SanDisk Corporation, the future market for the companies' products, as defined in the Private Securities Litigation Reform Act of 1995, including statements about our business outlook for the future, that our based on our current expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to: that the businesses of msystems and SanDisk will not be integrated successfully and that any synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; all risk associated with the development and implementation of x4 technology , including difficulties in utilization or implementation of 4-bit/cell NAND flash, any failure we may experience in perfecting and/or protecting our intellectual property rights related to x4 technology, and the risk that flash manufacturers may opt to utilize such other technologies and not our x4 technology; the risk that msystems business may not perform as expected, risks relating to msystems prior stock option grants, the effect of global economic conditions in general and conditions in msystems' industry and target markets in particular, shifts in supply and demand, difficulty in predicting the level of sales by our venture with a flash partner, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in msystems' and its customers' inventory levels and inventory valuations; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on msystems' and its customers' products and markets; the development, release and sale of new products by strategic suppliers and customers; the development and growth of anticipated markets for msystems' and its customers' products; and other risk factors detailed from time to time in msystems' filings with the Securities and Exchange Commission. msystems assumes no obligation to update the information in this press release and disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Reference to msystems' website above does not constitute incorporation of any of the information thereon into this press release. You may register to receive msystems' future press releases or to download a complete Digital Investor Kit(TM) including press releases, regulatory filings and corporate materials by clicking on the "Digital Investor Kit(TM)" icon at www.kcsa.com. -0- *T Condensed Consolidated Balance Sheet (U.S. Dollars in thousands) September 30, June 30, ------------------------- 2006 2006 ------------- ----------- ASSETS Cash, cash equivalents, short-term bank deposits and marketable securities 160,660 179,044 Trade receivables, net 129,750 106,052 Related party trade receivables 1,061 750 Inventories 117,871 84,110 Other accounts receivable and prepaid expenses 12,193 12,608 Severance pay funds 6,412 5,579 Long-term investments and long-term receivables 7,137 5,294 Investment in equity method affiliate 649 615 Property and equipment, net 41,871 35,723 Deferred purchase credits 85,583 89,658 Other assets, net 46,957 42,030 ------------- ----------- Total assets 610,144 561,463 ============= =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables 93,719 80,768 Deferred revenues 3,214 6,567 Other accounts payable and accrued expenses 37,623 32,039 ------------- ----------- Total current liabilities 134,556 119,374 ------------- ----------- LONG-TERM LIABILITIES: Convertible Senior Notes 71,457 71,431 Accrued severance pay 8,372 7,458 Other long-term liabilities 7,418 6,533 ------------- ----------- Total long-term liabilities 87,247 85,422 ------------- ----------- MINORITY INTEREST IN SUBSIDIARY 14,933 590 ------------- ----------- SHAREHOLDERS' EQUITY Share capital 10 10 Additional paid-in capital 350,318 341,208 Accumulated other comprehensive income 6,656 4,228 Retained earnings 16,424 10,631 ------------- ----------- Total shareholders' equity 373,408 356,077 ------------- ----------- Total liabilities and shareholders' equity 610,144 561,463 ============= =========== *T -0- *T Condensed Consolidated Statements of Operations (U.S. dollars in thousands, except share and per share data) Three months ended September 30, ------------------------- 2006 2005 ----------- ----------- Revenues 217,076 153,910 ----------- ----------- Costs and expenses: Costs of goods sold (1) (2) 161,001 115,870 Research and development, net (1) 13,920 10,635 Selling and marketing (1) 13,161 8,186 General and administrative (1) 9,873 2,905 ----------- ----------- Total costs and expenses 197,955 137,596 ----------- ----------- Operating income 19,121 16,314 Financial income, net 601 2,373 Other income, net - - ----------- ----------- Income before taxes on income (income tax benefit) 19,722 18,687 Taxes on income (income tax benefit) (1,885) - ----------- ----------- Income after taxes on income (income tax benefit) 21,607 18,687 Equity in losses of an affiliate 1,471 675 Minority interest in earnings of a subsidiary 14,343 5,204 ----------- ----------- Net income $5,793 $12,808 =========== =========== Basic net earnings per share $0.15 $0.35 =========== =========== Diluted net earnings per share $0.14 $0.31 =========== =========== Weighted average number of shares used in computing basic earnings per share 38,168,586 36,246,109 =========== =========== Weighted average number of shares used in computing diluted earnings per share42,773,561 41,591,548 =========== =========== (1) Stock based compensation expense is included in the following line items: Cost of goods sold $329 $49 Research and development, net 1,525 245 Selling and marketing 1,304 320 General and administrative 1,167 172 ----------- ----------- Total $4,325 $786 =========== =========== Three months ended June Nine months ended 30, September 30, ------------------------------------------------ 2006 2005 2006 2005 ------------ ----------- ----------- ----------- Revenues 209,493 121,635 645,679 392,540 ------------ ----------- ----------- ----------- Costs and expenses: Costs of goods sold (1) (2) 160,779 87,476 496,160 288,717 Research and development, net (1) 12,996 9,274 38,206 28,084 Selling and marketing (1) 13,666 8,580 40,748 25,250 General and administrative (1) 9,199 4,037 24,045 9,405 ------------ ----------- ----------- ----------- Total costs and expenses 196,640 109,367 599,159 351,456 ------------ ----------- ----------- ----------- Operating income 12,853 12,268 46,520 41,084 Financial income, net 1,512 2,988 3,479 6,923 Other income, net - - 1,184 - ------------ ----------- ----------- ----------- Income before taxes on income (income tax benefit) 14,365 15,256 51,183 48,007 Taxes on income (income tax benefit) 1,112 - 641 - ------------ ----------- ----------- ----------- Income after taxes on income (income tax benefit) 13,253 15,256 50,542 48,007 Equity in losses of an affiliate 1,334 656 4,013 2,294 Minority interest in earnings of a subsidiary 8,786 7,976 31,952 21,264 ------------ ----------- ----------- ----------- Net income $3,133 $6,624 $14,577 $24,449 ============ =========== =========== =========== Basic net earnings per share $0.08 $0.18 $0.38 $0.68 ============ =========== =========== =========== Diluted net earnings per share $0.08 $0.17 $0.36 $0.62 ============ =========== =========== =========== Weighted average number of shares used in computing basic earnings per share 37,957,382 36,039,809 37,907,373 36,011,603 ============ =========== =========== =========== Weighted average number of shares used in computing diluted earnings per share 42,465,375 41,070,719 42,194,638 40,380,426 ============ =========== =========== =========== (1) Stock based compensation expense is included in the following line items: Cost of goods sold $187 $45 $720 $143 Research and development, net 726 225 3,072 715 Selling and marketing 691 296 2,973 937 General and administrative 710 156 2,891 500 ------------ ----------- ----------- ----------- Total $2,314 $722 $9,656 $2,295 ============ =========== =========== =========== (2) Costs of goods sold for the three months and nine months ended September 30, 2006, include an extraordinary credit for flash components which were purchased in Q3 and prior periods. *T -0- *T Reconciliation of GAAP to Non GAAP Operating Results (U.S. dollars in thousands, except share and per share data) Three months ended September 30, ------------------------- 2006 2005 ----------- ----------- GAAP costs of goods sold $161,001 $115,870 Stock based compensation (329) (49) Amortization of intangible assets (93) - Withholding taxes related to stock option grants (10) - ----------- ----------- Non GAAP costs of goods sold $160,569 $115,821 =========== =========== GAAP research and development, net $13,920 $10,635 Stock based compensation (1,525) (245) Withholding taxes related to stock option grants (43) - ----------- ----------- Non GAAP research and development, net $12,352 $10,390 =========== =========== GAAP selling and marketing $13,161 $8,186 Stock based compensation (1,304) (320) Amortization of intangible assets (333) - Withholding taxes related to stock option grants (21) (296) ----------- ----------- Non GAAP selling and marketing $11,503 $7,570 =========== =========== GAAP general and administrative $9,873 $2,905 Stock based compensation (1,167) (172) Certain G&A expenses* (3,039) - Withholding taxes related to stock option grants (52) - ----------- ----------- Non GAAP general and administrative $5,615 $2,733 =========== =========== GAAP operating income $19,121 $16,314 Stock based compensation 4,325 786 Amortization of intangible assets 426 - Certain G&A expenses* 3,039 - Withholding taxes related to stock option grants 126 296 ----------- ----------- Non GAAP operating income $27,037 $17,396 =========== =========== GAAP other income, net $0 $0 Other income - - ----------- ----------- Non GAAP other income, net $0 $0 =========== =========== GAAP taxes on income (income tax benefit) ($1,885) $0 Amortization of intangible assets 149 - Other income - - ----------- ----------- Non GAAP taxes on income (income tax benefit) ($1,736) $0 =========== =========== GAAP net income $5,793 $12,808 Stock based compensation 4,325 786 Amortization of intangible assets 277 - Certain G&A expenses* 3,039 - Withholding taxes related to stock option grants 126 296 Other income - - ----------- ----------- Non GAAP net income $13,560 $13,890 =========== =========== Basic earnings per share GAAP $0.15 $0.35 =========== =========== Non GAAP $0.36 $0.38 =========== =========== Diluted earnings per share GAAP $0.14 $0.31 =========== =========== Non GAAP $0.32 $0.34 =========== =========== Weighted average number of shares used in computing basic earnings per share GAAP 38,168,586 36,246,109 =========== =========== Non GAAP 38,168,586 36,246,109 =========== =========== Weighted average number of shares used in computing diluted earnings per share GAAP 42,773,561 41,591,548 =========== =========== Non GAAP 43,300,709 41,898,049 =========== =========== Three months ended June Nine months ended 30, September 30, ------------------------------------------------ 2006 2005 2006 2005 ------------ ----------- ----------- ----------- GAAP costs of goods sold $160,779 $87,476 $496,160 $288,717 Stock based compensation (187) (45) (720) (143) Amortization of intangible assets (92) - (275) - Withholding taxes related to stock option grants (104) - (131) - ------------ ----------- ----------- ----------- Non GAAP costs of goods sold $160,396 $87,431 $495,034 $288,574 ============ =========== =========== =========== GAAP research and development, net $12,996 $9,274 $38,206 $28,084 Stock based compensation (726) (225) (3,072) (715) Withholding taxes related to stock option grants (417) - (529) - ------------ ----------- ----------- ----------- Non GAAP research and development, net $11,853 $9,049 $34,605 $27,369 ============ =========== =========== =========== GAAP selling and marketing $13,666 $8,580 $40,748 $25,250 Stock based compensation (691) (296) (2,973) (937) Amortization of intangible assets (329) - (983) - Withholding taxes related to stock option grants (856) (296) (1,317) (888) ------------ ----------- ----------- ----------- Non GAAP selling and marketing $11,790 $7,988 $35,475 $23,425 ============ =========== =========== =========== GAAP general and administrative $9,199 $4,037 $24,045 $9,405 Stock based compensation (710) (156) (2,891) (500) Certain G&A expenses* (3,176) - (6,215) - Withholding taxes related to stock option grants (515) - (652) - ------------ ----------- ----------- ----------- Non GAAP general and administrative $4,798 $3,881 $14,287 $8,905 ============ =========== =========== =========== GAAP operating income $12,853 $12,268 $46,520 $41,084 Stock based compensation 2,314 722 9,656 2,295 Amortization of intangible assets 421 - 1,259 - Certain G&A expenses* 3,176 - 6,215 - Withholding taxes related to stock option grants 1,892 296 2,629 888 ------------ ----------- ----------- ----------- Non GAAP operating income $20,656 $13,286 $66,279 $44,267 ============ =========== =========== =========== GAAP other income, net $0 $0 $1,184 $0 Other income - - (1,184) - ------------ ----------- ----------- ----------- Non GAAP other income, net $0 $0 $0 $0 ============ =========== =========== =========== GAAP taxes on income (income tax benefit) $1,112 $0 $641 $0 Amortization of intangible assets 144 - 293 - Other income - - (367) - ------------ ----------- ----------- ----------- Non GAAP taxes on income (income tax benefit) $1,256 $0 $567 $0 ============ =========== =========== =========== GAAP net income $3,133 $6,624 $14,577 $24,449 Stock based compensation 2,314 722 9,656 2,295 Amortization of intangible assets 277 - 966 - Certain G&A expenses* 3,176 - 6,215 - Withholding taxes related to stock option grants 1,892 296 2,629 888 Other income - - (817) - ------------ ----------- ----------- ----------- Non GAAP net income $10,792 $7,642 $33,226 $27,632 ============ =========== =========== =========== Basic earnings per share GAAP $0.08 $0.18 $0.38 $0.68 ============ =========== =========== =========== Non GAAP $0.28 $0.21 $0.88 $0.77 ============ =========== =========== =========== Diluted earnings per share GAAP $0.08 $0.17 $0.36 $0.62 ============ =========== =========== =========== Non GAAP $0.26 $0.19 $0.79 $0.69 ============ =========== =========== =========== Weighted average number of shares used in computing basic earnings per share GAAP 37,957,382 36,039,809 37,907,373 36,011,603 ============ =========== =========== =========== Non GAAP 37,957,382 36,039,809 37,907,373 36,011,603 ============ =========== =========== =========== Weighted average number of shares used in computing diluted earnings per share GAAP 42,465,375 41,070,719 42,194,638 40,380,426 ============ =========== =========== =========== Non GAAP 42,842,218 41,262,582 42,914,699 40,692,177 ============ =========== =========== =========== * Certain G&A expenses include expenses attributable to proposed merger with SanDisk Corporation and the review of prior stock option grants. *T

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

FLSH M Systems Flash Disk