9th Consecutive Quarter of Year-over-Year Revenue Growth
Signed Definitive Agreement to Acquire Stratus Technologies to Expand High-Availability, Fault-Tolerant Solutions for Data Center and Edge Markets
SMART Global Holdings, Inc. ("SGH" or the "Company") (NASDAQ: SGH) today reported financial results for the third quarter of fiscal 2022. Per share measures for all periods reflect the effect of the February 2022 two-for-one share split.
Third Quarter Fiscal 2022 Highlights
-
Announced entry into a definitive agreement to acquire Stratus Technologies
(see separate press release issued on June 29, 2022 for details) - Net sales of $463 million, up 6% versus the year-ago quarter
- GAAP gross margin of 24.7%, up 540 basis points versus the year-ago quarter
- Non-GAAP gross margin of 25.7%, up 380 basis points versus the year-ago quarter
- GAAP EPS of $0.44 versus GAAP loss per share of $(0.15) in the year-ago quarter
- Non-GAAP EPS of $0.87, up 24% versus the year-ago quarter
- Repurchased ~450 thousand shares for $10.2 million in cash
YTD Fiscal 2022 Highlights
- Net sales of $1.38 billion, up 34% versus the year-ago period
- GAAP gross margin of 25.3%, up 690 basis points versus the year-ago period
- Non-GAAP gross margin of 26.3%, up 610 basis points versus the year-ago period
- GAAP EPS of $0.84 versus GAAP EPS of $0.01 for the year-ago period
- Non-GAAP EPS of $2.81, up 85% versus the year-ago period
"I am extremely proud of our team’s execution in Q3 in the midst of the macro-economic headwinds that all companies are facing," commented CEO Mark Adams. "We achieved strong financial results, with our ninth consecutive quarter of year-over-year revenue growth, coupled with strong gross margins and EPS, both of which exceeded our third quarter guidance."
The Company also announced its entry into a definitive agreement to acquire Stratus Technologies, a leader in high-availability, fault-tolerant systems and software in the data center and at the Edge.
"Today, we are taking another important step in our transformation with the announcement of our entry into a definitive agreement to acquire Stratus Technologies, a global leader in simplified, protected, and autonomous computing solutions in the data center and at the Edge," continued Mr. Adams. "Following the close of the transaction, expected to occur in the second half of calendar 2022, Stratus will operate as part of SGH’s Intelligent Platform Solutions (IPS) business line. We are excited to welcome the Stratus team to SGH as we continue to expand our capabilities with their high-availability, fault-tolerant computing platforms, software and services."
Quarterly Financial Results
|
GAAP (1) |
|
Non-GAAP (2) |
||||||||||||||||
(in millions, except per share amounts) |
Q3 FY22 |
|
Q2 FY22 |
|
Q3 FY21 |
|
Q3 FY22 |
|
Q2 FY22 |
|
Q3 FY21 |
||||||||
Net sales |
$ |
462.5 |
$ |
449.2 |
$ |
437.7 |
|
$ |
462.5 |
$ |
449.2 |
$ |
437.7 |
||||||
Gross profit |
|
114.5 |
|
112.7 |
|
84.5 |
|
|
118.9 |
|
116.9 |
|
95.7 |
||||||
Operating income |
|
35.3 |
|
16.8 |
|
2.9 |
|
|
54.3 |
|
57.4 |
|
43.3 |
||||||
Net income (loss) attributable to SGH |
|
24.1 |
|
2.5 |
|
(7.2 |
) |
|
45.9 |
|
47.6 |
|
35.5 |
||||||
Diluted earnings (loss) per share (3) |
$ |
0.44 |
$ |
0.04 |
$ |
(0.15 |
) |
$ |
0.87 |
$ |
0.87 |
$ |
0.70 |
||||||
(1) |
GAAP represents U.S. Generally Accepted Accounting Principles. |
|
(2) |
Non-GAAP represents GAAP excluding the impact of certain activities. Further information regarding our use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures is included within this press release. |
|
(3) |
Diluted earnings (loss) per share reflect the impact of the share dividend paid in February 2022. |
|
Business Outlook
As of June 29, 2022, SGH is providing the following financial outlook for its fourth quarter of fiscal 2022:
GAAP
|
|
Adjustments |
|
Non-GAAP
|
|||||||
| Net sales | $420 to $460 million |
|
— |
|
|
$420 to $460 million |
|||||
| Gross margin | 22.5% to 24.5% |
|
1% |
(A) |
|
23.5% to 25.5% |
|||||
| Diluted earnings per share | $0.22 +/- $.10 |
|
$0.43 |
(A)(B)(C) |
|
$0.65 +/- $.10 |
|||||
| Diluted shares | 55 million |
|
(2) million |
|
|
53 million |
|||||
| Non-GAAP adjustments: (in millions) |
|
|
|||||||||
(A) |
Share-based compensation and amortization of acquisition-related intangibles included in cost of sales |
|
$ |
5 |
|||||||
(B) |
Share-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A |
|
|
12 |
|||||||
(C) |
Amortization of debt discount and other costs |
|
|
5 |
|||||||
|
|
$ |
22 |
||||||||
Third Quarter Fiscal 2022 Earnings Conference Call and Webcast Details
SGH will hold a conference call and webcast to discuss the Q3 fiscal 2022 results and related matters at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Wednesday, June 29, 2022. Interested parties may access the call by dialing +1-844-200-6205 in the U.S. or +1-929-526-1599 from international locations using access code 421527. The webcast link is located on the SGH Investor Relations section of our website at https://sghcorp.com. We will also post the presentation to our website prior to the call.
Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on the SGH Investor Relations website for approximately seven days.
Use of Forward-Looking Statements
This press release contains, and statements made during the above-referenced conference call will contain, "forward-looking statements," including, among other things, statements regarding future events and the future financial performance of SGH (including the business outlook for the next fiscal quarter) and statements regarding growth drivers in SGH's industries and markets. These forward-looking statements are based on current expectations and preliminary assumptions that are subject to factors and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside SGH's control, including, among others: inability to obtain or delays in obtaining all regulatory approvals and otherwise completing all steps required to close on the acquisition of Stratus; issues, delays or complications in completing the acquisition of Stratus; global business and economic conditions and growth trends in technology industries, our customer markets and various geographic regions; uncertainties in the geopolitical environment; disruptions in our operations or our supply chain as a result of COVID-19 pandemic or otherwise; changes in trade regulations or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending; appropriations for government spending; the success of our strategic initiatives including additional investments in new products and additional capacity; acquisitions of companies or technologies, the failure to successfully integrate and operate them, or customers' negative reactions to them; limitations on or changes in the availability of supply of materials and components; fluctuations in material costs; the temporary or volatile nature of pricing trends in memory or elsewhere; deterioration in customer relationships; production or manufacturing difficulties; competitive factors; technological changes; difficulties with or delays in the introduction of new products; slowing or contraction of growth in the memory market in Brazil; reduction in or termination of incentives for local manufacturing in Brazil; changes to applicable tax regimes or rates; prices for the end products of our customers; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors; the inability to maintain or expand government business; and other factors and risks detailed in SGH's filings with the U.S. Securities and Exchange Commission, which include SGH's most recent reports on Form 8-K, Form 10-K and Form 10-Q, including SGH's future filings.
Such factors and risks as outlined above and in such filings do not constitute all factors and risks that could cause actual results of SGH to be materially different from our forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of today, and SGH does not intend, and has no obligation, to update or revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release, except as required by law.
Statement Regarding Use of Non-GAAP Financial Measures
SGH management uses non-GAAP measures to supplement SGH's financial results under GAAP. Management uses these measures to analyze its operations and make decisions as to future operational plans, and believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing the Company's past and future operating performance. These non-GAAP measures exclude certain items, such as share-based compensation expense, amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships, trademarks/trade names and backlog acquired in connection with business combinations), acquisition-related inventory adjustments, acquisition-related expenses, restructure charges and integration expenses, changes in the fair value of contingent consideration, (gains) losses from changes in currency exchange rates, COVID-19 expenses, amortization of debt discount and other costs and other infrequent or unusual items. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies is reflected in our non-GAAP measures and these intangible assets contribute to revenue generation. Management believes the presentation of operating results that exclude certain items provides useful supplemental information to investors and facilitates the analysis of the Company's core operating results and comparison of operating results across reporting periods. Management also uses adjusted EBITDA, which represents GAAP net income (loss), adjusted for net interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense, acquisition-related inventory adjustments, acquisition-related expenses, restructure charges and integration expenses, changes in the fair value of contingent consideration, COVID-19 expenses and other infrequent or unusual items.
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, as they exclude important information about our financial results, as noted above. The presentation of these adjusted amounts varies from amounts presented in accordance with GAAP and therefore may not be comparable to amounts reported by other companies. In addition, adjusted EBITDA does not purport to represent cash flow provided by, or used in, operating activities in accordance with GAAP and should not be used as a measure of liquidity. Investors are encouraged to review the "Reconciliation of GAAP to Non-GAAP Measures" tables below.
About SMART Global Holdings – SGH
At SGH, our companies are united by a drive to raise the bar, execute with discipline and focus on what's next for the technologies that support and advance the world. Across computing, memory and LED lighting solutions, we build long-term strategic partnerships with our customers.
Backed by a proven leadership team, we operate with excellence around the globe while unlocking new avenues of growth for our business and industry.
Learn more about us at SGHcorp.com.
SMART Global Holdings, Inc. |
||||||||||||||||||||
Consolidated Statements of Operations |
||||||||||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||
|
May 27,
|
|
Feb 25,
|
|
May 28,
|
|
May 27,
|
|
May 28,
|
|||||||||||
Net sales: |
|
|
|
|
|
|||||||||||||||
Memory Solutions |
$ |
265,850 |
$ |
260,081 |
$ |
240,116 |
|
$ |
765,332 |
$ |
684,537 |
|||||||||
Intelligent Platform Solutions |
|
95,345 |
|
|
82,257 |
|
|
95,857 |
|
|
296,256 |
|
|
247,141 |
|
|||||
LED Solutions |
|
101,345 |
|
|
106,833 |
|
|
101,755 |
|
|
320,067 |
|
|
101,755 |
|
|||||
Total net sales |
|
462,540 |
|
|
449,171 |
|
|
437,728 |
|
|
1,381,655 |
|
|
1,033,433 |
|
|||||
Cost of sales |
|
348,077 |
|
|
336,458 |
|
|
353,241 |
|
|
1,032,278 |
|
|
842,847 |
|
|||||
Gross profit |
|
114,463 |
|
|
112,713 |
|
|
84,487 |
|
|
349,377 |
|
|
190,586 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Operating expenses: |
|
|
|
|
|
|||||||||||||||
Research and development |
|
20,298 |
|
|
18,794 |
|
|
16,718 |
|
|
56,749 |
|
|
32,534 |
|
|||||
Selling, general and administrative |
|
58,732 |
|
|
53,114 |
|
|
48,475 |
|
|
164,396 |
|
|
118,195 |
|
|||||
Change in fair value of contingent consideration |
|
124 |
|
|
24,000 |
|
|
16,400 |
|
|
41,324 |
|
|
16,400 |
|
|||||
Total operating expenses |
|
79,154 |
|
|
95,908 |
|
|
81,593 |
|
|
262,469 |
|
|
167,129 |
|
|||||
Operating income |
|
35,309 |
|
|
16,805 |
|
|
2,894 |
|
|
86,908 |
|
|
23,457 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Non-operating (income) expense: |
|
|
|
|
|
|||||||||||||||
Interest expense, net |
|
5,110 |
|
|
4,462 |
|
|
5,049 |
|
|
14,678 |
|
|
12,568 |
|
|||||
Other non-operating (income) expense |
|
550 |
|
|
1,785 |
|
|
489 |
|
|
3,570 |
|
|
1,187 |
|
|||||
Total non-operating (income) expense |
|
5,660 |
|
|
6,247 |
|
|
5,538 |
|
|
18,248 |
|
|
13,755 |
|
|||||
Income (loss) before taxes |
|
29,649 |
|
|
10,558 |
|
|
(2,644 |
) |
|
68,660 |
|
|
9,702 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Income tax provision |
|
5,154 |
|
|
7,586 |
|
|
4,010 |
|
|
20,495 |
|
|
8,485 |
|
|||||
Net income (loss) |
|
24,495 |
|
|
2,972 |
|
|
(6,654 |
) |
|
48,165 |
|
|
1,217 |
|
|||||
Net income attributable to noncontrolling interest |
|
382 |
|
|
514 |
|
|
557 |
|
|
1,567 |
|
|
557 |
|
|||||
Net income (loss) attributable to SGH |
$ |
24,113 |
|
$ |
2,458 |
|
$ |
(7,211 |
) |
$ |
46,598 |
|
$ |
660 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Earnings (loss) per share: |
|
|
|
|
|
|||||||||||||||
Basic |
$ |
0.48 |
|
$ |
0.05 |
|
$ |
(0.15 |
) |
$ |
0.94 |
|
$ |
0.01 |
|
|||||
Diluted |
$ |
0.44 |
|
$ |
0.04 |
|
$ |
(0.15 |
) |
$ |
0.84 |
|
$ |
0.01 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Shares used in per share calculations: |
|
|
|
|
|
|||||||||||||||
Basic |
|
50,095 |
|
|
49,522 |
|
|
48,071 |
|
|
49,543 |
|
|
48,542 |
|
|||||
Diluted |
|
54,998 |
|
|
57,636 |
|
|
48,071 |
|
|
55,756 |
|
|
51,167 |
|
|||||
Earnings per share and shares used in per share calculations reflect the impact of the share dividend.
SMART Global Holdings, Inc. |
||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||||||||||
(In thousands) |
||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||
|
May 27,
|
|
Feb 25,
|
|
May 28,
|
|
May 27,
|
|
May 28,
|
|||||||||||
GAAP gross profit |
$ |
114,463 |
|
$ |
112,713 |
|
$ |
84,487 |
|
$ |
349,377 |
|
$ |
190,586 |
|
|||||
Share-based compensation expense |
|
1,724 |
|
|
1,648 |
|
|
1,166 |
|
|
5,103 |
|
|
2,807 |
|
|||||
Amortization of acquisition-related intangibles |
|
2,696 |
|
|
2,582 |
|
|
2,937 |
|
|
8,374 |
|
|
4,231 |
|
|||||
Flow-through of inventory step up |
|
— |
|
|
— |
|
|
7,090 |
|
|
— |
|
|
7,090 |
|
|||||
Out of period import tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,345 |
|
|||||
Non-GAAP gross profit |
$ |
118,883 |
|
$ |
116,943 |
|
$ |
95,680 |
|
$ |
362,854 |
|
$ |
209,059 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP operating expenses |
$ |
79,154 |
|
$ |
95,908 |
|
$ |
81,593 |
|
$ |
262,469 |
|
$ |
167,129 |
|
|||||
Share-based compensation expense |
|
(8,823 |
) |
|
(8,325 |
) |
|
(7,215 |
) |
|
(25,192 |
) |
|
(22,060 |
) |
|||||
Amortization of acquisition-related intangibles |
|
(3,247 |
) |
|
(3,247 |
) |
|
(3,247 |
) |
|
(9,741 |
) |
|
(8,780 |
) |
|||||
Change in fair value of contingent consideration |
|
(124 |
) |
|
(24,000 |
) |
|
(16,400 |
) |
|
(41,324 |
) |
|
(16,400 |
) |
|||||
Other |
|
(2,349 |
) |
|
(828 |
) |
|
(2,356 |
) |
|
(4,215 |
) |
|
(5,037 |
) |
|||||
Non-GAAP operating expenses |
$ |
64,611 |
|
$ |
59,508 |
|
$ |
52,375 |
|
$ |
181,997 |
|
$ |
114,852 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP operating income |
$ |
35,309 |
|
$ |
16,805 |
|
$ |
2,894 |
|
$ |
86,908 |
|
$ |
23,457 |
|
|||||
Share-based compensation expense |
|
10,547 |
|
|
9,973 |
|
|
8,381 |
|
|
30,295 |
|
|
24,867 |
|
|||||
Amortization of acquisition-related intangibles |
|
5,943 |
|
|
5,829 |
|
|
6,184 |
|
|
18,115 |
|
|
13,011 |
|
|||||
Flow-through of inventory step up |
|
— |
|
|
— |
|
|
7,090 |
|
|
— |
|
|
7,090 |
|
|||||
Change in fair value of contingent consideration |
|
124 |
|
|
24,000 |
|
|
16,400 |
|
|
41,324 |
|
|
16,400 |
|
|||||
Out of period import tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,345 |
|
|||||
Other |
|
2,349 |
|
|
828 |
|
|
2,356 |
|
|
4,215 |
|
|
5,037 |
|
|||||
Non-GAAP operating income |
$ |
54,272 |
|
$ |
57,435 |
|
$ |
43,305 |
|
$ |
180,857 |
|
$ |
94,207 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP net income (loss) attributable to SGH |
$ |
24,113 |
|
$ |
2,458 |
|
$ |
(7,211 |
) |
$ |
46,598 |
|
$ |
660 |
|
|||||
Share-based compensation expense |
|
10,547 |
|
|
9,973 |
|
|
8,381 |
|
|
30,295 |
|
|
24,867 |
|
|||||
Amortization of acquisition-related intangibles |
|
5,943 |
|
|
5,829 |
|
|
6,184 |
|
|
18,115 |
|
|
13,011 |
|
|||||
Flow-through of inventory step up |
|
— |
|
|
— |
|
|
7,090 |
|
|
— |
|
|
7,090 |
|
|||||
Change in fair value of contingent consideration |
|
124 |
|
|
24,000 |
|
|
16,400 |
|
|
41,324 |
|
|
16,400 |
|
|||||
Out of period import tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,358 |
|
|||||
Amortization of debt discount and other costs |
|
2,705 |
|
|
2,296 |
|
|
2,088 |
|
|
7,211 |
|
|
6,247 |
|
|||||
Foreign currency (gains) losses |
|
641 |
|
|
1,408 |
|
|
994 |
|
|
3,516 |
|
|
1,195 |
|
|||||
Other |
|
2,349 |
|
|
1,481 |
|
|
2,356 |
|
|
4,868 |
|
|
5,037 |
|
|||||
Estimated tax effects of non-GAAP adjustments |
|
(513 |
) |
|
126 |
|
|
(768 |
) |
|
(2,139 |
) |
|
(788 |
) |
|||||
Non-GAAP net income attributable to SGH |
$ |
45,909 |
|
$ |
47,571 |
|
$ |
35,514 |
|
$ |
149,788 |
|
$ |
77,077 |
|
|||||
SMART Global Holdings, Inc. |
||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||
|
May 27,
|
|
Feb 25,
|
|
May 28,
|
|
May 27,
|
|
May 28,
|
|||||||||||
Weighted-average shares outstanding - Diluted: |
|
|
|
|
|
|||||||||||||||
GAAP weighted-average shares outstanding |
|
54,998 |
|
|
57,636 |
|
|
48,071 |
|
|
55,756 |
|
|
51,167 |
|
|||||
Adjustment for capped calls |
|
(2,063 |
) |
|
(2,759 |
) |
|
2,961 |
|
|
(2,468 |
) |
|
(618 |
) |
|||||
Non-GAAP weighted-average shares outstanding |
|
52,935 |
|
|
54,877 |
|
|
51,032 |
|
|
53,288 |
|
|
50,549 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Diluted earnings (loss) per share: |
|
|
|
|
|
|||||||||||||||
GAAP diluted earnings (loss) per share |
$ |
0.44 |
|
$ |
0.04 |
|
$ |
(0.15 |
) |
$ |
0.84 |
|
$ |
0.01 |
|
|||||
Effect of above adjustments |
|
0.43 |
|
|
0.83 |
|
|
0.85 |
|
|
1.97 |
|
|
1.51 |
|
|||||
Non-GAAP diluted earnings per share |
$ |
0.87 |
|
$ |
0.87 |
|
$ |
0.70 |
|
$ |
2.81 |
|
$ |
1.52 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Net income (loss) attributable to SGH |
$ |
24,113 |
|
$ |
2,458 |
|
$ |
(7,211 |
) |
$ |
46,598 |
|
$ |
660 |
|
|||||
Interest expense, net |
|
5,110 |
|
|
4,462 |
|
|
5,049 |
|
|
14,678 |
|
|
12,568 |
|
|||||
Income tax provision |
|
5,154 |
|
|
7,586 |
|
|
4,010 |
|
|
20,495 |
|
|
8,485 |
|
|||||
Depreciation expense and amortization of intangible assets |
|
16,571 |
|
|
16,077 |
|
|
15,308 |
|
|
48,461 |
|
|
32,468 |
|
|||||
Share-based compensation expense |
|
10,547 |
|
|
9,973 |
|
|
8,381 |
|
|
30,295 |
|
|
24,867 |
|
|||||
Flow-through of inventory step up |
|
— |
|
|
— |
|
|
7,090 |
|
|
— |
|
|
7,090 |
|
|||||
Change in fair value of contingent consideration |
|
124 |
|
|
24,000 |
|
|
16,400 |
|
|
41,324 |
|
|
16,400 |
|
|||||
Out of period import tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,345 |
|
|||||
Other |
|
2,349 |
|
|
1,481 |
|
|
2,356 |
|
|
4,868 |
|
|
5,037 |
|
|||||
Adjusted EBITDA |
$ |
63,968 |
|
$ |
66,037 |
|
$ |
51,383 |
|
$ |
206,719 |
|
$ |
111,920 |
|
|||||
Weighted average shares outstanding and diluted earnings per share reflect the impact of the share dividend.
SMART Global Holdings, Inc. |
||||||||
Consolidated Balance Sheets |
||||||||
(In thousands) |
||||||||
As of |
May 27,
|
August 27,
|
||||||
Assets |
|
|
||||||
Cash and cash equivalents |
$ |
387,326 |
|
$ |
222,986 |
|
||
Accounts receivable, net |
|
357,457 |
|
|
313,393 |
|
||
Inventories |
|
365,258 |
|
|
363,601 |
|
||
Other current assets |
|
57,525 |
|
|
50,838 |
|
||
Total current assets |
|
1,167,566 |
|
|
950,818 |
|
||
Property and equipment, net |
|
159,111 |
|
|
156,266 |
|
||
Operating lease right-of-use assets |
|
43,524 |
|
|
40,869 |
|
||
Intangible assets, net |
|
83,219 |
|
|
101,073 |
|
||
Goodwill |
|
75,043 |
|
|
74,255 |
|
||
Other noncurrent assets |
|
25,589 |
|
|
21,517 |
|
||
Total assets |
$ |
1,554,052 |
|
$ |
1,344,798 |
|
||
|
|
|
||||||
Liabilities and Equity |
|
|
||||||
Accounts payable and accrued expenses |
$ |
448,012 |
|
$ |
484,107 |
|
||
Current debt |
|
8,795 |
|
|
25,354 |
|
||
Other current liabilities |
|
68,089 |
|
|
74,337 |
|
||
Total current liabilities |
|
524,896 |
|
|
583,798 |
|
||
Long-term debt |
|
485,026 |
|
|
340,484 |
|
||
Acquisition-related contingent consideration |
|
101,824 |
|
|
60,500 |
|
||
Noncurrent operating lease liabilities |
|
36,594 |
|
|
32,419 |
|
||
Other noncurrent liabilities |
|
6,643 |
|
|
8,673 |
|
||
Total liabilities |
|
1,154,983 |
|
|
1,025,874 |
|
||
|
|
|
||||||
Commitments and contingencies |
|
|
||||||
|
|
|
||||||
SMART Global Holdings shareholders’ equity: |
|
|
||||||
Ordinary shares |
|
1,573 |
|
|
1,504 |
|
||
Additional paid-in-capital |
|
437,863 |
|
|
396,120 |
|
||
Retained earnings |
|
231,385 |
|
|
184,787 |
|
||
Treasury shares |
|
(67,345 |
) |
|
(50,545 |
) |
||
Accumulated other comprehensive income (loss) |
|
(210,874 |
) |
|
(221,615 |
) |
||
Total SGH shareholders’ equity |
|
392,602 |
|
|
310,251 |
|
||
Noncontrolling interest in subsidiary |
|
6,467 |
|
|
8,673 |
|
||
Total equity |
|
399,069 |
|
|
318,924 |
|
||
Total liabilities and equity |
$ |
1,554,052 |
|
$ |
1,344,798 |
|
||
SMART Global Holdings, Inc. |
||||||||||||||||||||
Consolidated Statements of Cash Flows |
||||||||||||||||||||
(In thousands) |
||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||
|
May 27,
|
|
February 25,
|
|
May 28,
|
|
May 27,
|
|
May 28,
|
|||||||||||
Cash flows from operating activities: |
|
|
|
|
|
|||||||||||||||
Net income (loss) |
$ |
24,495 |
|
$ |
2,972 |
|
$ |
(6,654 |
) |
$ |
48,165 |
|
$ |
1,217 |
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|||||||||||||||
Depreciation expense and amortization of intangible assets |
|
16,571 |
|
|
16,077 |
|
|
15,308 |
|
|
48,461 |
|
|
32,468 |
|
|||||
Amortization of debt discount and issuance costs |
|
2,706 |
|
|
2,438 |
|
|
2,196 |
|
|
7,476 |
|
|
6,503 |
|
|||||
Share-based compensation expense |
|
10,547 |
|
|
9,973 |
|
|
8,381 |
|
|
30,295 |
|
|
24,867 |
|
|||||
Change in fair value of contingent consideration |
|
124 |
|
|
24,000 |
|
|
16,400 |
|
|
41,324 |
|
|
16,400 |
|
|||||
Amortization of operating lease right-of-use assets |
|
2,708 |
|
|
2,697 |
|
|
2,031 |
|
|
7,953 |
|
|
4,944 |
|
|||||
Other |
|
(47 |
) |
|
1,533 |
|
|
(493 |
) |
|
1,294 |
|
|
488 |
|
|||||
Changes in operating assets and liabilities: |
|
|
|
|
|
|||||||||||||||
Accounts receivable |
|
34,089 |
|
|
(39,526 |
) |
|
(25,537 |
) |
|
(41,490 |
) |
|
(15,455 |
) |
|||||
Inventories |
|
(26,531 |
) |
|
(13,225 |
) |
|
(38,359 |
) |
|
(116 |
) |
|
(66,493 |
) |
|||||
Other current assets |
|
(11,084 |
) |
|
6,132 |
|
|
4,963 |
|
|
(5,884 |
) |
|
(14,163 |
) |
|||||
Accounts payable and accrued expenses |
|
(15,323 |
) |
|
22,105 |
|
|
76,174 |
|
|
(46,969 |
) |
|
122,095 |
|
|||||
Operating lease liabilities |
|
(2,709 |
) |
|
(2,355 |
) |
|
(1,718 |
) |
|
(7,205 |
) |
|
(4,460 |
) |
|||||
Deferred income taxes, net |
|
1,168 |
|
|
(656 |
) |
|
(3,354 |
) |
|
721 |
|
|
(3,083 |
) |
|||||
Net cash provided by operating activities |
|
36,714 |
|
|
32,165 |
|
|
49,338 |
|
|
84,025 |
|
|
105,328 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Cash flows from investing activities: |
|
|
|
|
|
|||||||||||||||
Capital expenditures and deposits on equipment |
|
(9,156 |
) |
|
(7,376 |
) |
|
(5,222 |
) |
|
(29,298 |
) |
|
(40,017 |
) |
|||||
Acquisition of business, net of cash acquired |
|
— |
|
|
— |
|
|
(28,613 |
) |
|
— |
|
|
(28,613 |
) |
|||||
Other |
|
(54 |
) |
|
(81 |
) |
|
55 |
|
|
(746 |
) |
|
222 |
|
|||||
Net cash used for investing activities |
|
(9,210 |
) |
|
(7,457 |
) |
|
(33,780 |
) |
|
(30,044 |
) |
|
(68,408 |
) |
|||||
|
|
|
|
|
|
|||||||||||||||
Cash flows from financing activities: |
|
|
|
|
|
|||||||||||||||
Proceeds from debt |
|
— |
|
|
270,775 |
|
|
— |
|
|
270,775 |
|
|
11,439 |
|
|||||
Proceeds from borrowing under line of credit |
|
— |
|
|
24,000 |
|
|
80,000 |
|
|
84,000 |
|
|
122,500 |
|
|||||
Proceeds from issuance of ordinary shares |
|
4,389 |
|
|
2,431 |
|
|
7,506 |
|
|
11,849 |
|
|
13,157 |
|
|||||
Repayments of debt |
|
— |
|
|
(125,000 |
) |
|
— |
|
|
(125,000 |
) |
|
— |
|
|||||
Repayments of borrowings under line of credit |
|
— |
|
|
(59,000 |
) |
|
(55,000 |
) |
|
(109,000 |
) |
|
(97,500 |
) |
|||||
Distribution to noncontrolling interest |
|
— |
|
|
(3,773 |
) |
|
— |
|
|
(3,773 |
) |
|
— |
|
|||||
Payments to acquire ordinary shares |
|
(13,905 |
) |
|
(230 |
) |
|
(337 |
) |
|
(16,800 |
) |
|
(48,301 |
) |
|||||
Other |
|
— |
|
|
(3,840 |
) |
|
— |
|
|
(3,841 |
) |
|
— |
|
|||||
Net cash provided by (used for) financing activities |
|
(9,516 |
) |
|
105,363 |
|
|
32,169 |
|
|
108,210 |
|
|
1,295 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Effect of changes in currency exchange rates on cash and cash equivalents |
|
3,570 |
|
|
2,647 |
|
|
1,462 |
|
|
2,149 |
|
|
(34 |
) |
|||||
Net increase in cash and cash equivalents |
|
21,558 |
|
|
132,718 |
|
|
49,189 |
|
|
164,340 |
|
|
38,181 |
|
|||||
Cash and cash equivalents at beginning of period |
|
365,768 |
|
|
233,050 |
|
|
139,803 |
|
|
222,986 |
|
|
150,811 |
|
|||||
Cash and cash equivalents at end of period |
$ |
387,326 |
|
$ |
365,768 |
|
$ |
188,992 |
|
$ |
387,326 |
|
$ |
188,992 |
|
|||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220629005283/en/
Contacts
Investor Contact:
Suzanne Schmidt
Investor Relations
+1-510-360-8596
ir@sghcorp.com
PR Contact:
Valerie Sassani
VP of Marketing and Communications
+1-510-941-8921
pr@sghcorp.com
