SANDISK TO OFFER $1 BILLION OF CONVERTIBLE SENIOR NOTES
MILPITAS, CA, August 18, 2010 - SanDisk
Corporation (NASDAQ: SNDK), the global leader in flash memory
cards, announced today its intention to commence an underwritten
public offering, subject to market and other conditions, of $1.0
billion principal amount of Convertible Senior Notes due in 2017
pursuant to an effective registration statement previously filed
with the Securities and Exchange Commission. In addition, the
Company expects to grant the underwriters an option to purchase up
to an additional $150 million principal amount of notes from the
Company to cover overallotments.
The Company currently intends to use the net proceeds of the
offering for general corporate purposes, including (1) the
repayment at maturity or repurchase, from time to time, of a
portion of its outstanding $1.15 billion aggregate principal amount
of senior convertible notes originally issued in 2006, which bear
interest at a rate of 1% per annum and mature on May 15, 2013; (2)
capital expenditures for new and existing manufacturing facilities;
(3) development of new technologies; (4) general working capital;
and (5) other non-manufacturing capital expenditures. The net
proceeds may also be used to fund strategic investments or
acquisitions of products, technologies or complementary businesses
or to obtain the right or license to use additional
technologies. The Company currently has no such commitments
or agreements for any specific acquisitions, investments or
licenses. In addition, the Company intends to use a portion
of the net proceeds of the offering to fund the cost to it of the
privately negotiated convertible note hedge transactions (after
taking into account the proceeds to it from warrant transactions)
that the Company intends to enter into with one or more dealers,
each of whom may be an affiliate of an underwriter in the
offering. The Company also intends to enter into separate
warrant transactions with such dealers or their affiliates, and
anticipates that the warrants will have an exercise price that is
up to approximately 75% higher than the closing price of the
Company's common stock on the date the warrants are issued.
These convertible note hedge transactions and warrant transactions
are expected to reduce the potential dilution with respect to the
Company's common stock upon conversion of the notes; however, the
warrant transactions will have a dilutive effect with respect to
the Company's common stock to the extent that the market price per
share of the Company's common stock exceeds the strike price of the
warrants.
In connection with hedging these transactions, such dealers or
their affiliates expect to enter into various derivatives
transactions and engage in other activities that could have the
effect of increasing or preventing a decline in the price of the
Company's common stock in connection with the pricing of the note
offering. These activities may be discontinued at any time.
In addition, in connection with any conversion of the notes, the
dealers or their respective affiliates may enter into derivative
transactions and engage in other activities that could adversely
impact the price of the Company's common stock and of the
notes.
Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.
are the joint book running managers for the offering.
ABOUT THE OFFERING
A preliminary prospectus supplement related to the offering will
be filed with the SEC and will be available on the SEC's website at
www.sec.gov. Printed copies of the preliminary prospectus
supplement relating to the offering may also be obtained from
Morgan Stanley & Co. Incorporated, Prospectus Department, 180
Varick Street, New York, NY 10014 (telephone no. 212-761-6775) and
Goldman, Sachs & Co., Prospectus Department, 200 West Street,
New York, NY 10282 (telephone no. 212-902-1171, facsimile:
212-902-9316, email: prospectus-ny@ny.email.gs.com).
The Company has filed a registration statement (File No.
333-157078) (including a prospectus and prospectus supplement) with
the SEC for the offering. Before you invest, you should read
the prospectus and prospectus supplement to that registration
statement and other documents the Company has filed with the SEC
for more complete information about the Company and the
offering. You may obtain these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov.
SCHEDULED WEBCAST
SanDisk will provide a live webcast of a management presentation
on Thursday, August 19, 2010 at 8:00 A.M., Pacific Daylight
Time. Interested parties can access the webcast for the
duration of the presentation, which is expected to be approximately
one hour, at
http://www.thomson-webcast.net/us/dispatching/SandiskEvent20100818
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements,
including statements regarding the Company's intent to offer the
notes, enter into related transactions and intended use of proceeds
from the offering that are based on our current expectations and
involve numerous risks and uncertainties that may cause these
forward-looking statements to be inaccurate. Risks that may
cause these forward-looking statements to be inaccurate include
among others:
- competitive pricing pressures, resulting in
lower average selling prices and lower or negative product gross
margins;
- less than anticipated demand, including due to
economic weakness in our markets and among consumers
generally;
- unpredictable or changing demand for our
products, particularly for certain form factors or capacities;
- insufficient captive and non-captive memory
supply to meet demand;
- insufficient non-memory materials or capacity
from our suppliers and contract manufacturers to meet demand; or
increases in cost of non-memory materials or capacity;
- our products may not perform as expected or
may not be available at the prices, in the regions, in the
capacities or at the time expected;
- difficulties or delays in closing the proposed
offering; and
- other risks detailed from time-to-time
under the caption "Risk Factors" and elsewhere in our SEC filings
and reports, including, but not limited to, our most recent annual
report on Form 10-K and our subsequent quarterly reports on Form
10-Q.
We do not intend to update the information contained in this
press release.
ABOUT SANDISK
SanDisk Corporation is the global leader in flash memory cards,
from research, manufacturing and product design to consumer
branding and retail distribution. SanDisk's product portfolio
includes flash memory cards for mobile phones, digital cameras and
camcorders; digital audio/video players; USB flash drives for
consumers and the enterprise; embedded memory for mobile devices;
and solid state drives for computers. SanDisk is a Silicon
Valley-based S&P 500 company, with more than half its sales
outside the United States.
SanDisk and the SanDisk logo and are trademarks of SanDisk
Corporation, registered in the United States and other
countries. Other brand names mentioned herein are for
identification purposes only and may be the trademarks of their
respective holder(s).
| Investor Contact: |
Media Contact: |
| Jay Iyer |
Ryan Donovan |
| SanDisk Corporation |
SanDisk Corporation |
| 408-801-2067 |
408-801-2857 |
| |