sgh-8k_20190830.htm

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 3, 2019

 

SMART GLOBAL HOLDINGS, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 Cayman Islands

001-38102

98-1013909

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

c/o Maples Corporate Services Limited

P.O. Box 309

Ugland House

Grand Cayman

 

KY1-1104

Cayman Islands

(Zip Code)

(Address of Principal Executive Offices)

 

 

 

Registrant’s Telephone Number, Including Area Code: (510) 623-1231

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Ordinary shares, $0.03 par value per share

SGH

The NASDAQ Stock Market LLC

(NASDAQ Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On October 3, 2019, SMART Global Holdings, Inc. (the “Company”) issued a press release and will hold a conference call announcing its financial results for the fourth quarter and full year fiscal 2019. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The Company refers to non-GAAP financial information in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.

This information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.  

Item 9.01 Financial Statements and Exhibits.

 

Exhibit Number

 

Description of Exhibit

 

 

 

99.1

 

Press release issued on October 3, 2019

 

 

1


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

SMART GLOBAL HOLDINGS, INC.

 

 

 

By:

 /s/ JACK PACHECO

 

 Name:

 Jack Pacheco

 

 Title: 

 Executive Vice President and Chief Financial Officer

 

 

(Principal Financial and Accounting Officer)

 

 

 

Date: October 3, 2019

 

 

2

sgh-ex991_6.htm

Exhibit 99.1

Press Release

FOR IMMEDIATE RELEASE

 

SMART Global Holdings Reports

Fourth Quarter and Full Year Fiscal 2019 Financial Results

 

NEWARK, CA – October 3, 2019 SMART Global Holdings, Inc. (“SMART”) (NASDAQ: SGH), parent company of SMART Modular Technologies, Inc., today reported financial results for the fourth quarter and full year fiscal 2019 ended August 30, 2019.

 

Fourth Quarter Fiscal 2019 Highlights:

Net sales of $278.4 million

GAAP operating income of $11.4 million

GAAP net income of $5.6 million

Adjusted EBITDA of $25.2 million

GAAP diluted EPS of $0.24

Non-GAAP diluted EPS of $0.50

 

Full Year Fiscal 2019 Highlights:

Net sales of $1.2 billion

GAAP operating income of $89.1 million

GAAP net income of $51.3 million

Adjusted EBITDA of $134.7 million

GAAP diluted EPS of $2.19

Non-GAAP diluted EPS of $3.34

Cash increase of $66.8 million

 

“Fiscal 2019 was a year of two halves.  In the first half we experienced a healthy memory pricing environment and our financial results benefited from that strength.  In the second half of fiscal 2019 component pricing in the memory market declined significantly, which primarily impacted our business in Brazil and, to a lesser extent, our Specialty Memory Products, and resulted in overall revenues in fiscal 2019 declining year-over-year by 6%,” commented Ajay Shah, Chairman and CEO.  

 

“Despite this challenging business environment, our Specialty Memory Products business grew year-over-year, and our Specialty Compute and Storage Solutions business finished strong representing 30% of total net sales for the fourth quarter of fiscal 2019. Additionally, during the year we added $66.8 million in cash while utilizing an additional $75 million to complete two significant acquisitions that are both accretive to earnings in the first full quarter of operations.”

 

“In Brazil, the new points-based system for local manufacturing became effective July 1, 2019. We are encouraged by the rebound in our forecasted unit volumes since the new rules went into effect,” continued Mr. Shah.

 

Jack Pacheco, Chief Operating Officer and Chief Financial Officer, added, “Fourth quarter fiscal 2019 financial results were below our previous guidance primarily due to weakness in our supply chain services business, which is reported as part of Specialty Memory Products.”

 

Quarterly Financial Results

GAAP (1)

 

 

Non-GAAP (2)

 

(In millions, except per share amounts)

Q4 FY19

 

Q3 FY19

 

Q4 FY18

 

 

Q4 FY19

 

Q3 FY19

 

Q4 FY18

 

Net sales

$

278.4

 

$

235.7

 

$

374.0

 

 

$

278.4

 

$

235.7

 

$

374.0

 

Gross profit

$

52.3

 

$

43.0

 

$

82.7

 

 

$

53.4

 

$

43.7

 

$

83.8

 

Operating income

$

11.4

 

$

7.4

 

$

45.0

 

 

$

18.0

 

$

13.2

 

$

51.8

 

Net income

$

5.6

 

$

1.9

 

$

29.7

 

 

$

11.9

 

$

7.9

 

$

40.0

 

Diluted earnings per share (EPS)

$

0.24

 

$

0.08

 

$

1.28

 

 

$

0.50

 

$

0.34

 

$

1.72

 

 

Annual Financial Results

GAAP (1)

 

 

Non-GAAP (2)

 

(In millions, except per share amounts)

FY19

 

FY18

 

 

FY19

 

FY18

 

Net sales

$

1,212.0

 

$

1,288.8

 

 

$

1,212.0

 

$

1,288.8

 

Gross profit

$

237.5

 

$

291.6

 

 

$

240.6

 

$

293.6

 

Operating income

$

89.1

 

$

170.2

 

 

$

113.2

 

$

188.8

 

Net income

$

51.3

 

$

119.5

 

 

$

78.3

 

$

147.0

 

Diluted earnings per share (EPS)(3)

$

2.19

 

$

5.17

 

 

$

3.34

 

$

6.36

 

 

(1)

GAAP represents U.S. Generally Accepted Accounting Principles.


(2)

Please refer to the “Non-GAAP Information” section and the "Reconciliation of Non-GAAP Financial Measures" table below for further detail on the non-GAAP financial reporting referenced above and a reconciliation of such measures to our nearest GAAP measures.

 

Business Outlook

The following statements are based upon management's current expectations for the first quarter of fiscal 2020 ending November 29, 2019. These statements are forward-looking, and actual results may differ materially. SMART undertakes no obligation to update these statements.

 

Net Sales

$275 to $285 million

Gross Margin - GAAP / Non-GAAP

21% to 23%

Diluted EPS - GAAP

$0.30 to $0.40

 

 

Share-based compensation per share

$0.22

Intangible amortization per share

$0.16

 

 

Diluted EPS - Non-GAAP

$0.68 to $0.78

 

 

Expected diluted share count

23.9 million

 

Conference Call Details

SMART will host a conference call today for analysts and investors at 1:30 p.m. Pacific time, 4:30 p.m. Eastern time. Dial-in US toll free +1-866-487-6452 using access code 6379732.

 

A replay of the conference call will be available for one week following today’s call through the Events section of the SMART website at www.smartgh.com or by calling US toll free +1-855-859-2056; Passcode: 6379732.

Forward-Looking Statements

This 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 SMART (including the business outlook for the next fiscal quarter) and statements regarding growth drivers in SMART’s industries and markets. These statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including but not limited to: business and economic conditions and growth trends in the technology industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; trade regulations and relations; 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, additional capacity and acquisitions; the DRAM market and the temporary and volatile nature of pricing trends; 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 local content requirements in Brazil;  changes to applicable tax regimes or rates; prices for the end products of our customers; fluctuations in material costs and availability; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors;  changes in the availability of supply of materials, components or memory products; the inability of Penguin Computing to obtain and retain security clearances to expand its government business; and other factors and risks detailed in SMART’s filings with the Securities and Exchange Commission. Such factors and risks as outlined above and in such filings may not constitute all factors and risks that could cause actual results of SMART to be materially different from the historical results and/or from any future results or outcomes expressed or implied by such forward-looking statements. SMART and its subsidiaries operate in a continually changing business environment and new factors emerge from time to time. SMART cannot predict such factors, nor can it assess the impact, if any, from such factors on SMART or its subsidiaries’ results. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements should not be relied upon as a prediction of actual results. These forward-looking statements are made as of today, and SMART 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.

 

Non-GAAP Information

Certain non-GAAP financial measures are contained in this press release or will be discussed on our conference call, including non-GAAP gross profit, non-GAAP operating income, Adjusted EBITDA, non-GAAP net income, and non-GAAP net income per diluted share. We define Adjusted EBITDA as GAAP net income plus net interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense, acquisition-related expenses and other infrequent or unusual items. Adjusted EBITDA is not a measure of financial performance calculated in accordance with U.S. GAAP and should be viewed as a supplement to, not a substitute for, our results of operations presented on the basis of U.S. GAAP. Adjusted EBITDA also does not


purport to represent cash flow provided by, or used in, operating activities in accordance with U.S. GAAP and should not be used as a measure of liquidity.

 

The non-GAAP financial results presented herein exclude share-based compensation expense, intangible amortization expense, acquisition-related expenses and other infrequent or unusual expenses, and with respect to non-GAAP diluted EPS, foreign currency gains (losses). These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. By excluding these charges, as well as any related tax effects, our non-GAAP results provide information to management and investors that is useful in assessing SMART's core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to evaluate financial results, to plan and forecast future periods, and to assess performance of certain executives for compensation purposes. The presentation of this additional information is not meant to be a substitute for the corresponding financial measures prepared in accordance with U.S. GAAP. In addition, these measures may not be used similarly by other companies and therefore may not be comparable between companies.

 

Investors are encouraged to review the “Reconciliation of Non-GAAP Financial Measures to GAAP Results” and “Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA” tables below for more detail on non-GAAP calculations.

 

About SMART Global Holdings

 

The SMART lines of business are leading designers and manufacturers of electronic products focused on memory and computing technology areas. The company specializes in application specific product development and support for customers in enterprise, government and OEM sales channels. Customers rely on SMART as a strategic supplier with top tier customer service, product quality, and technical support with engineering, sales, manufacturing, supply chain and logistics capabilities worldwide. The company targets customers in markets such as communications, storage, networking, mobile, industrial automation, industrial internet of things, government, military, edge computing and high performance computing.  SMART operates in three primary product areas: specialty memory products, Brazil products and specialty compute and storage solutions.

 

See www.smartgh.com, www.smartm.com, www.smartembedded.com, www.smartsscs.com and www.penguincomputing.com for more information.


SMART Global Holdings, Inc.

and Subsidiaries

Consolidated Statements of Income

(In thousands, except per share data)

 

  

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

August 30,

2019

 

 

May 31,

2019

 

 

August 31,

2018

 

 

August 30,

2019

 

 

August 31,

2018

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

$

89,123

 

 

$

100,982

 

 

$

198,624

 

 

$

536,495

 

 

$

797,849

 

Specialty Memory

 

 

104,634

 

 

 

98,755

 

 

 

122,820

 

 

 

458,946

 

 

 

438,446

 

Specialty Compute and Storage Solutions

 

 

84,643

 

 

 

35,920

 

 

 

52,526

 

 

 

216,558

 

 

 

52,526

 

Total net sales

 

 

278,400

 

 

 

235,657

 

 

 

373,970

 

 

 

1,211,999

 

 

 

1,288,821

 

Cost of sales (1)(2)

 

 

226,108

 

 

 

192,622

 

 

 

291,291

 

 

 

974,472

 

 

 

997,235

 

Gross profit

 

 

52,292

 

 

 

43,035

 

 

 

82,679

 

 

 

237,527

 

 

 

291,586

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (1) (2)

 

 

13,536

 

 

 

11,330

 

 

 

11,659

 

 

 

47,920

 

 

 

39,824

 

Selling, general and administrative (1) (2)

 

 

30,024

 

 

 

24,306

 

 

 

29,039

 

 

 

103,226

 

 

 

84,541

 

Change in estimated fair value of acquisition-related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   contingent consideration

 

 

(2,700

)

 

 

 

 

 

(3,000

)

 

 

(2,700

)

 

 

(3,000

)

Total operating expenses

 

 

40,860

 

 

 

35,636

 

 

 

37,698

 

 

 

148,446

 

 

 

121,365

 

Income from operations

 

 

11,432

 

 

 

7,399

 

 

 

44,981

 

 

 

89,081

 

 

 

170,221

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(4,567

)

 

 

(5,001

)

 

 

(6,217

)

 

 

(20,716

)

 

 

(19,144

)

Other income (expense):

 

 

819

 

 

 

97

 

 

 

(5,987

)

 

 

(2,161

)

 

 

(13,299

)

Total other expense

 

 

(3,748

)

 

 

(4,904

)

 

 

(12,204

)

 

 

(22,877

)

 

 

(32,443

)

Income before income taxes

 

 

7,684

 

 

 

2,495

 

 

 

32,777

 

 

 

66,204

 

 

 

137,778

 

Provision for income taxes

 

 

2,059

 

 

 

550

 

 

 

3,059

 

 

 

14,872

 

 

 

18,315

 

Net income

 

$

5,625

 

 

$

1,945

 

 

$

29,718

 

 

$

51,332

 

 

$

119,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.24

 

 

$

0.08

 

 

$

1.33

 

 

$

2.24

 

 

$

5.42

 

Diluted

 

$

0.24

 

 

$

0.08

 

 

$

1.28

 

 

$

2.19

 

 

$

5.17

 

Shares used in computing per-share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

23,366

 

 

 

23,005

 

 

 

22,383

 

 

 

22,959

 

 

 

22,051

 

Diluted

 

 

23,825

 

 

 

23,330

 

 

 

23,270

 

 

 

23,468

 

 

 

23,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes share-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

682

 

 

$

651

 

 

$

475

 

 

$

2,485

 

 

$

1,334

 

Research and development

 

 

687

 

 

 

673

 

 

 

572

 

 

 

2,654

 

 

 

1,459

 

Selling, general and administrative

 

 

4,194

 

 

 

3,109

 

 

 

2,911

 

 

 

13,060

 

 

 

7,764

 

Total stock-based compensation expense

 

$

5,563

 

 

$

4,433

 

 

$

3,958

 

 

$

18,199

 

 

$

10,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Includes amortization of intangible assets expense as

   follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

436

 

 

$

16

 

 

$

7

 

 

$

566

 

 

$

7

 

Research and development

 

 

 

 

 

 

 

 

252

 

 

 

 

 

 

987

 

Selling, general and administrative

 

 

2,165

 

 

 

961

 

 

 

2,144

 

 

 

5,048

 

 

 

5,136

 

Total amortization expense

 

$

2,601

 

 

$

977

 

 

$

2,403

 

 

$

5,614

 

 

$

6,130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


SMART Global Holdings, Inc.

and Subsidiaries

Reconciliation of Non-GAAP Financial Measures to GAAP Results

(In thousands, except per share data)

 

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

August 30,

2019

 

 

May 31,

2019

 

 

August 31,

2018

 

 

August 30,

2019

 

 

August 31,

2018

 

Reconciliation of gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

52,292

 

 

$

43,035

 

 

$

82,679

 

 

$

237,527

 

 

$

291,586

 

GAAP gross margin

 

 

18.8

%

 

 

18.3

%

 

 

22.1

%

 

 

19.6

%

 

 

22.6

%

Add: Share-based compensation included in cost of sales

 

 

682

 

 

 

651

 

 

 

475

 

 

 

2,485

 

 

 

1,334

 

Add: Amortization of intangible assets

 

 

436

 

 

 

16

 

 

 

7

 

 

 

566

 

 

 

7

 

Add: Purchase accounting adjustment

 

 

 

 

 

 

 

 

631

 

 

 

 

 

 

631

 

Non-GAAP gross profit

 

$

53,410

 

 

$

43,702

 

 

$

83,792

 

 

$

240,578

 

 

$

293,558

 

Non-GAAP gross margin

 

 

19.2

%

 

 

18.5

%

 

 

22.4

%

 

 

19.8

%

 

 

22.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating expenses

 

$

40,860

 

 

$

35,636

 

 

$

37,698

 

 

$

148,446

 

 

$

121,365

 

Less: Share-based compensation expense included in opex

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

687

 

 

 

673

 

 

 

572

 

 

 

2,654

 

 

 

1,459

 

Selling, general and administrative

 

 

4,194

 

 

 

3,109

 

 

 

2,911

 

 

 

13,060

 

 

 

7,764

 

Total

 

 

4,881

 

 

 

3,782

 

 

 

3,483

 

 

 

15,714

 

 

 

9,223

 

Less: Amortization of intangible assets included in opex

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

 

 

 

 

 

 

252

 

 

 

 

 

 

987

 

Selling, general and administrative

 

 

2,165

 

 

 

961

 

 

 

2,144

 

 

 

5,048

 

 

 

5,136

 

Total

 

 

2,165

 

 

 

961

 

 

 

2,396

 

 

 

5,048

 

 

 

6,123

 

Less: S-1 related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

813

 

Less: Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

 

 

 

126

 

 

 

 

Less: Acquisition-related costs

 

 

1,068

 

 

 

431

 

 

 

2,844

 

 

 

2,922

 

 

 

3,435

 

Less: Contingent consideration fair value adjustment

 

 

(2,700

)

 

 

 

 

 

(3,000

)

 

 

(2,700

)

 

 

(3,000

)

Non-GAAP operating expenses

 

$

35,446

 

 

$

30,462

 

 

$

31,975

 

 

$

127,336

 

 

$

104,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income from operations

 

$

11,432

 

 

$

7,399

 

 

$

44,981

 

 

$

89,081

 

 

$

170,221

 

GAAP operating margin

 

 

4.1

%

 

 

3.1

%

 

 

12.0

%

 

 

7.3

%

 

 

13.2

%

Add: Share-based compensation expense

 

 

5,563

 

 

 

4,433

 

 

 

3,958

 

 

 

18,199

 

 

 

10,557

 

Add: Amortization of intangible assets

 

 

2,601

 

 

 

977

 

 

 

2,403

 

 

 

5,614

 

 

 

6,130

 

Add: Purchase accounting adjustment

 

 

 

 

 

 

 

 

631

 

 

 

 

 

 

631

 

Add: S-1 related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

813

 

Add: Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

 

 

 

126

 

 

 

 

Add: Acquisition-related costs

 

 

1,068

 

 

 

431

 

 

 

2,844

 

 

 

2,922

 

 

 

3,435

 

Add: Contingent consideration fair value adjustment

 

 

(2,700

)

 

 

 

 

 

(3,000

)

 

 

(2,700

)

 

 

(3,000

)

Non-GAAP income from operations

 

$

17,964

 

 

$

13,240

 

 

$

51,817

 

 

$

113,242

 

 

$

188,787

 

Non-GAAP operating margin

 

 

6.5

%

 

 

5.6

%

 

 

13.9

%

 

 

9.3

%

 

 

14.6

%

 


SMART Global Holdings, Inc.

and Subsidiaries

Reconciliation of Non-GAAP Financial Measures to GAAP Results (continued)

(In thousands, except per share data)

 

  

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

August 30,

2019

 

 

May 31,

2019

 

 

August 31,

2018

 

 

August 30,

2019

 

 

August 31,

2018

 

Reconciliation of income before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income before income taxes

 

$

7,684

 

 

$

2,495

 

 

$

32,777

 

 

$

66,204

 

 

$

137,778

 

Add: Share-based compensation expense

 

 

5,563

 

 

 

4,433

 

 

 

3,958

 

 

 

18,199

 

 

 

10,557

 

Add: Amortization of intangible assets

 

 

2,601

 

 

 

977

 

 

 

2,403

 

 

 

5,614

 

 

 

6,130

 

Add: Purchase accounting adjustment

 

 

 

 

 

 

 

 

631

 

 

 

 

 

 

631

 

Add: S-1 related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

813

 

Add: Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

 

 

 

126

 

 

 

 

Add: Acquisition-related costs

 

 

1,068

 

 

 

431

 

 

 

2,844

 

 

 

2,922

 

 

 

3,435

 

Add: Contingent consideration fair value adjustment

 

 

(2,700

)

 

 

 

 

 

(3,000

)

 

 

(2,700

)

 

 

(3,000

)

Add: Foreign currency (gains)/losses

 

 

(332

)

 

 

144

 

 

 

5,968

 

 

 

3,149

 

 

 

13,227

 

Non-GAAP income before income taxes

 

$

13,884

 

 

$

8,480

 

 

$

45,581

 

 

$

93,514

 

 

$

169,571

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of provision for income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP provision for income taxes

 

$

2,059

 

 

$

550

 

 

$

3,059

 

 

$

14,872

 

 

$

18,315

 

GAAP effective tax rate

 

 

26.8

%

 

 

22.0

%

 

 

9.3

%

 

 

22.5

%

 

 

13.3

%

Tax effect of adjustments to GAAP results

 

 

33

 

 

 

(14

)

 

 

(2,529

)

 

 

(314

)

 

 

(4,273

)

Non-GAAP provision for income taxes

 

$

2,026

 

 

$

564

 

 

$

5,588

 

 

$

15,186

 

 

$

22,588

 

Non-GAAP effective tax rate

 

 

14.6

%

 

 

6.7

%

 

 

12.3

%

 

 

16.2

%

 

 

13.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income and earnings per share (diluted):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

5,625

 

 

$

1,945

 

 

$

29,718

 

 

$

51,332

 

 

$

119,463

 

Adjustments to GAAP net income: