Cayman Islands | 98-1013909 | ||||
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
c/o Walkers Corporate Limited | |||||
190 Elgin Avenue | |||||
George Town, Grand Cayman | |||||
Cayman Islands | KY1-9008 | ||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Ordinary shares, $0.03 par value per share | SGH | Nasdaq Global Select Market |
Exhibit No. |
Description | ||||
99.1 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Date: January 9, 2024 |
SMART Global Holdings, Inc. | |||||||
By: | /s/ Ken Rizvi | |||||||
Senior Vice President and Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
GAAP (1) |
Non-GAAP (2) |
||||||||||||||||||||||||||||||||||
(in thousands, except per share amounts) | Q1 FY24 | Q4 FY23 | Q1 FY23 | Q1 FY24 | Q4 FY23 | Q1 FY23 | |||||||||||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||||||||||||
Memory Solutions | $ | 85,668 | $ | 105,181 | $ | 118,286 | $ | 85,668 | $ | 105,181 | $ | 118,286 | |||||||||||||||||||||||
Intelligent Platform Solutions | 118,824 | 145,432 | 210,971 | 118,824 | 145,432 | 210,971 | |||||||||||||||||||||||||||||
LED Solutions | 69,755 | 66,045 | 62,540 | 69,755 | 66,045 | 62,540 | |||||||||||||||||||||||||||||
Total net sales | $ | 274,247 | $ | 316,658 | $ | 391,797 | $ | 274,247 | $ | 316,658 | $ | 391,797 | |||||||||||||||||||||||
Gross profit | $ | 82,850 | $ | 91,585 | $ | 112,098 | $ | 91,277 | $ | 100,300 | $ | 122,805 | |||||||||||||||||||||||
Operating income (loss) | 1,305 | (1,639) | 14,847 | 26,679 | 30,295 | 51,388 | |||||||||||||||||||||||||||||
Net income (loss) attributable to SGH | (11,773) | 64,841 | (3,939) | 12,538 | 18,406 | 37,364 | |||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | (0.23) | $ | 1.17 | $ | (0.08) | $ | 0.24 | $ | 0.35 | $ | 0.75 |
GAAP
Outlook
|
Adjustments |
Non-GAAP
Outlook
|
||||||||||||
Net sales | $285 million +/- $25 million | — | $285 million +/- $25 million | |||||||||||
Gross margin | 29.5% +/- 1% | 3% | (A) | 32.5% +/- 1% | ||||||||||
Operating expenses | $81 million +/- $3 million | ($15) million | (B)(C) | $66 million +/- $3 million | ||||||||||
Diluted earnings (loss) per share |
$(0.15) +/- $0.10 | $0.40 | (A)(B)(C)(D) | $0.25 +/- $0.10 | ||||||||||
Diluted shares |
52 million | 1 million | 53 million |
Non-GAAP adjustments (in millions) | |||||
(A) Share-based compensation and amortization of acquisition-related intangibles included in cost of sales | $ | 8 | |||
(B) Share-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A | 13 | ||||
(C) Other adjustments included in operating expenses | 2 | ||||
(D) Estimated income tax effects | (2) | ||||
$ | 21 |
Three Months Ended | |||||||||||||||||
December 1, 2023 |
August 25, 2023 |
November 25, 2022 |
|||||||||||||||
Net sales: | |||||||||||||||||
Memory Solutions | $ | 85,668 | $ | 105,181 | $ | 118,286 | |||||||||||
Intelligent Platform Solutions | 118,824 | 145,432 | 210,971 | ||||||||||||||
LED Solutions | 69,755 | 66,045 | 62,540 | ||||||||||||||
Total net sales | 274,247 | 316,658 | 391,797 | ||||||||||||||
Cost of sales | 191,397 | 225,073 | 279,699 | ||||||||||||||
Gross profit | 82,850 | 91,585 | 112,098 | ||||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 21,389 | 20,883 | 24,072 | ||||||||||||||
Selling, general and administrative | 57,217 | 65,026 | 67,708 | ||||||||||||||
Impairment of goodwill | — | 1,534 | — | ||||||||||||||
Change in fair value of contingent consideration | — | 4,100 | 3,700 | ||||||||||||||
Other operating (income) expense | 2,939 | 1,681 | 1,771 | ||||||||||||||
Total operating expenses | 81,545 | 93,224 | 97,251 | ||||||||||||||
Operating income (loss) | 1,305 | (1,639) | 14,847 | ||||||||||||||
Non-operating (income) expense: | |||||||||||||||||
Interest expense, net | 9,559 | 9,183 | 8,494 | ||||||||||||||
Other non-operating (income) expense | (576) | (462) | (1,362) | ||||||||||||||
Total non-operating (income) expense | 8,983 | 8,721 | 7,132 | ||||||||||||||
Income (loss) before taxes | (7,678) | (10,360) | 7,715 | ||||||||||||||
Income tax provision (benefit) | 3,534 | (75,890) | 11,322 | ||||||||||||||
Net income (loss) from continuing operations | (11,212) | 65,530 | (3,607) | ||||||||||||||
Net income (loss) from discontinued operations | (8,148) | (205,685) | 8,931 | ||||||||||||||
Net income (loss) | (19,360) | (140,155) | 5,324 | ||||||||||||||
Net income attributable to noncontrolling interest | 561 | 689 | 332 | ||||||||||||||
Net income (loss) attributable to SGH | $ | (19,921) | $ | (140,844) | $ | 4,992 | |||||||||||
Basic earnings (loss) per share: | |||||||||||||||||
Continuing operations | $ | (0.23) | $ | 1.28 | $ | (0.08) | |||||||||||
Discontinued operations | (0.15) | (4.05) | 0.18 | ||||||||||||||
$ | (0.38) | $ | (2.77) | $ | 0.10 | ||||||||||||
Diluted earnings (loss) per share: | |||||||||||||||||
Continuing operations | $ | (0.23) | $ | 1.17 | $ | (0.08) | |||||||||||
Discontinued operations | (0.15) | (3.71) | 0.18 | ||||||||||||||
$ | (0.38) | $ | (2.54) | $ | 0.10 | ||||||||||||
Shares used in per share calculations: | |||||||||||||||||
Basic | 52,068 | 50,807 | 48,962 | ||||||||||||||
Diluted | 52,068 | 55,523 | 48,962 |
Three Months Ended | |||||||||||||||||
December 1, 2023 |
August 25, 2023 |
November 25, 2022 |
|||||||||||||||
GAAP gross profit | $ | 82,850 | $ | 91,585 | $ | 112,098 | |||||||||||
Share-based compensation expense | 1,815 | 1,789 | 1,642 | ||||||||||||||
Amortization of acquisition-related intangibles | 5,944 | 5,876 | 6,466 | ||||||||||||||
Flow-through of inventory step up | — | — | 2,599 | ||||||||||||||
Cost of sales-related restructure | 668 | 1,050 | — | ||||||||||||||
Non-GAAP gross profit | $ | 91,277 | $ | 100,300 | $ | 122,805 | |||||||||||
GAAP gross margin | 30.2 | % | 28.9 | % | 28.6 | % | |||||||||||
Effect of adjustments | 3.1 | % | 2.8 | % | 2.7 | % | |||||||||||
Non-GAAP gross margin | 33.3 | % | 31.7 | % | 31.3 | % | |||||||||||
GAAP operating expenses | $ | 81,545 | $ | 93,224 | $ | 97,251 | |||||||||||
Share-based compensation expense | (9,155) | (7,785) | (8,339) | ||||||||||||||
Amortization of acquisition-related intangibles | (4,064) | (5,443) | (4,392) | ||||||||||||||
Acquisition and integration expenses | (789) | (2,676) | (6,732) | ||||||||||||||
Impairment of goodwill | — | (1,534) | — | ||||||||||||||
Change in fair value of contingent consideration | — | (4,100) | (3,700) | ||||||||||||||
Restructure charge | (2,939) | (1,681) | (1,771) | ||||||||||||||
Other | — | — | (900) | ||||||||||||||
Non-GAAP operating expenses | $ | 64,598 | $ | 70,005 | $ | 71,417 | |||||||||||
GAAP operating income (loss) | $ | 1,305 | $ | (1,639) | $ | 14,847 | |||||||||||
Share-based compensation expense | 10,970 | 9,574 | 9,981 | ||||||||||||||
Amortization of acquisition-related intangibles | 10,008 | 11,319 | 10,858 | ||||||||||||||
Flow-through of inventory step up | — | — | 2,599 | ||||||||||||||
Cost of sales-related restructure | 668 | 1,050 | — | ||||||||||||||
Acquisition and integration expenses | 789 | 2,676 | 6,732 | ||||||||||||||
Impairment of goodwill | — | 1,534 | — | ||||||||||||||
Change in fair value of contingent consideration | — | 4,100 | 3,700 | ||||||||||||||
Restructure charge | 2,939 | 1,681 | 1,771 | ||||||||||||||
Other | — | — | 900 | ||||||||||||||
Non-GAAP operating income | $ | 26,679 | $ | 30,295 | $ | 51,388 |
Three Months Ended | |||||||||||||||||
December 1, 2023 |
August 25, 2023 |
November 25, 2022 |
|||||||||||||||
GAAP net income (loss) attributable to SGH | $ | (11,773) | $ | 64,841 | $ | (3,939) | |||||||||||
Share-based compensation expense | 10,970 | 9,574 | 9,981 | ||||||||||||||
Amortization of acquisition-related intangibles | 10,008 | 11,319 | 10,858 | ||||||||||||||
Flow-through of inventory step up | — | — | 2,599 | ||||||||||||||
Cost of sales-related restructure | 668 | 1,050 | — | ||||||||||||||
Acquisition and integration expenses | 789 | 2,676 | 6,732 | ||||||||||||||
Impairment of goodwill | — | 1,534 | — | ||||||||||||||
Change in fair value of contingent consideration | — | 4,100 | 3,700 | ||||||||||||||
Restructure charge | 2,939 | 1,681 | 1,771 | ||||||||||||||
Amortization of debt discount and other costs | 1,042 | 1,010 | 1,069 | ||||||||||||||
Loss (gain) on extinguishment of debt | — | — | (767) | ||||||||||||||
Foreign currency (gains) losses | (546) | (276) | (520) | ||||||||||||||
Other | — | — | 900 | ||||||||||||||
Income tax effects | (1,559) | (79,103) | 4,980 | ||||||||||||||
Non-GAAP net income attributable to SGH | $ | 12,538 | $ | 18,406 | $ | 37,364 | |||||||||||
Weighted-average shares outstanding - Diluted: | |||||||||||||||||
GAAP weighted-average shares outstanding | 52,068 | 55,523 | 48,962 | ||||||||||||||
Adjustment for dilutive securities and capped calls | 1,213 | (2,233) | 829 | ||||||||||||||
Non-GAAP weighted-average shares outstanding | 53,281 | 53,290 | 49,791 | ||||||||||||||
Diluted earnings (loss) per share from continuing operations: | |||||||||||||||||
GAAP diluted earnings (loss) per share | $ | (0.23) | $ | 1.17 | $ | (0.08) | |||||||||||
Effect of adjustments | 0.47 | (0.82) | 0.83 | ||||||||||||||
Non-GAAP diluted earnings per share | $ | 0.24 | $ | 0.35 | $ | 0.75 | |||||||||||
Net income (loss) attributable to SGH | $ | (11,773) | $ | 64,841 | $ | (3,939) | |||||||||||
Interest expense, net | 9,559 | 9,183 | 8,494 | ||||||||||||||
Income tax provision (benefit) | 3,534 | (75,890) | 11,322 | ||||||||||||||
Depreciation expense and amortization of intangible assets | 17,654 | 18,830 | 17,049 | ||||||||||||||
Share-based compensation expense | 10,970 | 9,574 | 9,981 | ||||||||||||||
Flow-through of inventory step up | — | — | 2,599 | ||||||||||||||
Cost of sales-related restructure | 668 | 1,050 | — | ||||||||||||||
Acquisition and integration expenses | 789 | 2,676 | 6,732 | ||||||||||||||
Impairment of goodwill | — | 1,534 | — | ||||||||||||||
Change in fair value of contingent consideration | — | 4,100 | 3,700 | ||||||||||||||
Restructure charge | 2,939 | 1,681 | 1,771 | ||||||||||||||
Loss on extinguishment of debt | — | — | (767) | ||||||||||||||
Other | — | — | 900 | ||||||||||||||
Adjusted EBITDA | $ | 34,340 | $ | 37,579 | $ | 57,842 |
As of | December 1, 2023 |
August 25, 2023 |
|||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 529,059 | $ | 365,563 | |||||||
Short-term investments | 24,385 | 25,251 | |||||||||
Accounts receivable, net | 170,590 | 219,247 | |||||||||
Inventories | 208,441 | 174,977 | |||||||||
Other current assets | 54,373 | 51,790 | |||||||||
Current assets of discontinued operations | — | 70,574 | |||||||||
Total current assets | 986,848 | 907,402 | |||||||||
Property and equipment, net | 112,328 | 118,734 | |||||||||
Operating lease right-of-use assets | 64,637 | 68,444 | |||||||||
Intangible assets, net | 150,283 | 160,185 | |||||||||
Goodwill | 161,958 | 161,958 | |||||||||
Deferred tax assets | 74,365 | 74,085 | |||||||||
Other noncurrent assets | 80,446 | 15,150 | |||||||||
Total assets | $ | 1,630,865 | $ | 1,505,958 | |||||||
Liabilities and Equity | |||||||||||
Accounts payable and accrued expenses | $ | 219,082 | $ | 182,035 | |||||||
Current debt | 28,511 | 35,618 | |||||||||
Deferred revenue | 39,096 | 48,096 | |||||||||
Other current liabilities | 32,115 | 32,731 | |||||||||
Acquisition-related contingent consideration | 50,000 | 50,000 | |||||||||
Current liabilities of discontinued operations | — | 77,770 | |||||||||
Total current liabilities | 368,804 | 426,250 | |||||||||
Long-term debt | 748,299 | 754,820 | |||||||||
Noncurrent operating lease liabilities | 64,407 | 66,407 | |||||||||
Other noncurrent liabilities | 33,346 | 29,248 | |||||||||
Total liabilities | 1,214,856 | 1,276,725 | |||||||||
Commitments and contingencies | |||||||||||
SMART Global Holdings shareholders’ equity: | |||||||||||
Ordinary shares | 1,753 | 1,726 | |||||||||
Additional paid-in capital | 491,145 | 476,703 | |||||||||
Retained earnings | 62,536 | 82,457 | |||||||||
Treasury shares | (145,577) | (132,447) | |||||||||
Accumulated other comprehensive income (loss) | 303 | (205,964) | |||||||||
Total SGH shareholders’ equity | 410,160 | 222,475 | |||||||||
Noncontrolling interest in subsidiary | 5,849 | 6,758 | |||||||||
Total equity | 416,009 | 229,233 | |||||||||
Total liabilities and equity | $ | 1,630,865 | $ | 1,505,958 |
Three Months Ended | |||||||||||||||||
December 1, 2023 |
August 25, 2023 |
November 25, 2022 |
|||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net income (loss) | $ | (19,360) | $ | (140,155) | $ | 5,324 | |||||||||||
Net income (loss) from discontinued operations | (8,148) | (205,685) | 8,931 | ||||||||||||||
Net income (loss) from continuing operations | (11,212) | 65,530 | (3,607) | ||||||||||||||
Adjustments to reconcile net income (loss) from continuing operations to cash provided by (used for) operating activities | |||||||||||||||||
Depreciation expense and amortization of intangible assets | 17,654 | 18,830 | 17,049 | ||||||||||||||
Amortization of debt discount and issuance costs | 1,042 | 1,010 | 1,069 | ||||||||||||||
Share-based compensation expense | 10,970 | 9,574 | 9,981 | ||||||||||||||
Impairment of goodwill and other assets | — | 1,534 | — | ||||||||||||||
Change in fair value of contingent consideration | — | 4,100 | 3,700 | ||||||||||||||
Loss on extinguishment of debt | — | — | (767) | ||||||||||||||
Deferred income taxes, net | (282) | (65,228) | 1,718 | ||||||||||||||
Other | 664 | 701 | 357 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivable | 48,658 | 3,007 | 123,097 | ||||||||||||||
Inventories | (33,464) | 28,564 | (102,047) | ||||||||||||||
Other assets | 2,102 | (290) | (6,828) | ||||||||||||||
Accounts payable and accrued expenses and other liabilities | 23,581 | (29,776) | (54,749) | ||||||||||||||
Payment of acquisition-related contingent consideration | — | — | (73,724) | ||||||||||||||
Net cash provided by (used for) operating activities from continuing operations | 59,713 | 37,556 | (84,751) | ||||||||||||||
Net cash provided by (used for) operating activities from discontinued operations | (28,235) | (757) | 10,766 | ||||||||||||||
Net cash provided by (used for) operating activities | 31,478 | 36,799 | (73,985) | ||||||||||||||
Cash flows from investing activities | |||||||||||||||||
Capital expenditures and deposits on equipment | (4,648) | (7,747) | (7,991) | ||||||||||||||
Acquisition of business, net of cash acquired | — | — | (210,273) | ||||||||||||||
Proceeds from maturities of investment securities | 9,665 | — | — | ||||||||||||||
Purchases of held-to-maturity investment securities | (8,469) | (25,015) | — | ||||||||||||||
Other | (188) | (4,345) | (1,759) | ||||||||||||||
Net cash used for investing activities from continuing operations | (3,640) | (37,107) | (220,023) | ||||||||||||||
Net cash provided by (used for) investing activities from discontinued operations | 118,938 | (11,640) | (3,620) | ||||||||||||||
Net cash provided by (used for) investing activities | $ | 115,298 | $ | (48,747) | $ | (223,643) |
Three Months Ended | |||||||||||||||||
December 1, 2023 |
August 25, 2023 |
November 25, 2022 |
|||||||||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from debt | $ | — | $ | — | $ | 295,287 | |||||||||||
Proceeds from issuance of ordinary shares | 3,455 | 34,615 | 3,942 | ||||||||||||||
Payment of acquisition-related contingent consideration | — | — | (28,100) | ||||||||||||||
Payments to acquire ordinary shares | (13,130) | (7,788) | (4,659) | ||||||||||||||
Repayments of debt | (14,423) | (7,212) | (3,606) | ||||||||||||||
Distribution to noncontrolling interest | (1,470) | — | — | ||||||||||||||
Other | (582) | (487) | (788) | ||||||||||||||
Net cash provided by (used for) financing activities from continuing operations | (26,150) | 19,128 | 262,076 | ||||||||||||||
Net cash used for financing activities from discontinued operations | (606) | (426) | (97) | ||||||||||||||
Net cash provided by (used for) financing activities | (26,756) | 18,702 | 261,979 | ||||||||||||||
Effect of changes in currency exchange rates | (1,025) | 2,035 | 205 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | 118,995 | 8,789 | (35,444) | ||||||||||||||
Cash and cash equivalents at beginning of period | 410,064 | 401,275 | 363,065 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 529,059 | $ | 410,064 | $ | 327,621 |
Investor Contact: | PR Contact: | ||||
Suzanne Schmidt | Valerie Sassani | ||||
Investor Relations | VP of Marketing and Communications | ||||
+1-510-360-8596 | +1-510-941-8921 | ||||
ir@sghcorp.com | pr@sghcorp.com |