SAN JOSE, Calif. - In a major surprise, Eli Harari, founder, chairman and chief executive of SanDisk Corp., will retire from his current positions on Dec. 31, 2010.
Harari will provide advisory services to the company for a period of two years starting Jan. 1, 2011. SanDisk (Milpitas, Calif.) has appointed Sanjay Mehrotra, currently SanDisk’s president and chief operating officer, to be the president and CEO, effective Jan. 1, 2011. SanDisk has appointed him to the company’s board, effective July 21.
The company announced that Michael Marks, a member of the SanDisk board since 2003, will assume the role of chairman effective Jan. 1, 2011. Marks is president of Riverwood Capital LLC, a private equity firm, and formerly was CEO of Flextronics for 12 years.
The move was a surprise. Harari, who was not expected to retire at this juncture, has led the company from an obscure startup to a major player in NAND and flash-based products.
Analyst were suprised by news. ''Yes it does'' surprise me that Harari is retiring, said Gregory Wong, an analyst with Forward Insights. ''Eli has molded the company after him but Eli is at heart an engineer and with NAND technology scaling facing serious challenges going forward, Eli has the opportunity to focus on the technology in his capacity as an advisor. With the market dynamics strong for NAND, he leaves on a high note.''
''It's a litle surprising. It almost seemed as if he would stay on ad infinitum. He's leaving at a high point,'' added Jim Handy, an analyst with Objective Analysis.
''Eli just turned 65 a short time ago and has been running the company that he founded for the past 22 years. It wasn't a surprise to those of us within the company. Sanjay is also a co-founder so we expect a smooth transition when it formally takes place on 1/1/11,'' according to a SanDisk spokesman.
“Over the past 22 years, SanDisk has grown to become a leading provider of flash memory-based storage solutions with total annual revenues approaching $5 billion,” said Harari in a statement. “I have been fortunate to lead this great company and its people all these years. The company’s management is broad and deep, and I am very pleased to hand over my responsibilities to Sanjay Mehrotra, my co-founder and business partner, at the end of this year. Our business and technology leadership have never been stronger and I’m confident the company will scale new heights under Sanjay’s leadership.”
SanDisk also announced results for the second quarter ended July 4, 2010. Total second quarter revenue of $1.18 billion increased 61 percent on a year-over-year basis and increased 9 percent on a sequential basis.
Net income, in accordance with U.S. Generally Accepted Accounting Principles (GAAP), was $258 million, or $1.08 per diluted share, compared to GAAP net income of $53 million, or $0.23 per diluted share, in the second quarter of 2009 and GAAP net income of $235 million, or $0.99 per diluted share, in the first quarter of 2010.
SanDisk beat Wall Street's estimates. It was supposed to earn $0.90 a share on sales of $1.16 billion