On Jan. 30, memory maven SanDisk (NASDAQ:SNDK) released fourth-quarter earnings for the 2006 fiscal year, a period that ended Dec. 31, 2006.

  • Last year's profit turned into this year's loss, as the company absorbed msystems with its lower margins and the related pre-acquisition costs, and suffered a 62% year over year price decline for each megabyte of memory sold.
  • The negative net profit and EPS numbers were also dampened considerably by the write-off of acquired technologies from msystems and Matrix Semiconductor.
  • msystems contributed $115.5 million of revenue and a $900,000 operating loss to this quarter's results.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$1,163.7

$750.6

55.0%

Net Profit

-$35.1

$133.9

N/A

EPS

($0.17)

$0.68

N/A

Diluted Shares

210.8

197.5

6.8%


Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

35.8%

40.2%

(4.5)

Operating Margin

1.0%

26.4%

(25.5)

Net Margin

-3.0%

17.8%

(20.9)
*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Management Effectiveness

Q4 2006

Q4 2005

Change*

Return on Assets

(2.3%)

18.2%

(20.5)

Return on Equity

(3.4%)

22.4%

(25.8)
*Expressed in percentage points.

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$2,809.5

$1,697.7

65.5%

Accounts Rec.

$611.7

$329.0

85.9%

Inventory

$496.0

$331.6

49.6%


Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$241.2

$231.2

4.3%

Long-Term Debt

$1,225.0

$0.0

N/A


Learn the ways of the balance sheet.

Cash Flow Highlights

Q4 2006

Q4 2005

Change

Cash From Ops.

$184.0

$78.9

133.4%

Capital Expenditures

$53.0

$83.8

(36.7%)

Free Cash Flow

$131.0

($4.9)

N/A

Owner Earnings

$143.7

$69.0

108.2%


Find out why Fools always follow the money.

Cash Conversion Checkup

Q4 2006

Q4 2005

Change

Days in Inventory

53.7

62.1

(8.4)

Days in Receivables

35.4

32.4

3.1

Days Payables Outstanding

29.4

45.0

(15.6)

Cash Conversion Cycle

59.7

49.4

10.3


Read up on cash conversion metrics.

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At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.