sgh-8k_20191219.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): December 19, 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 December 19, 2019, SMART Global Holdings, Inc. (the “Company”) issued a press release and will hold a conference call announcing its financial results for the first quarter of fiscal 2020. 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 December 19, 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: December 19, 2019

 

 

2

sgh-ex991_6.htm

Exhibit 99.1

Press Release

FOR IMMEDIATE RELEASE

 

SMART Global Holdings Reports

First Quarter Fiscal 2020 Financial Results

 

NEWARK, CA – December 19, 2019 SMART Global Holdings, Inc. (“SMART”) (NASDAQ: SGH), today reported financial results for the first quarter of fiscal 2020 ended November 29, 2019.

 

First Quarter Fiscal 2020 Highlights:

Net sales of $272.0 million

Adjusted EBITDA of $23.5 million

GAAP diluted EPS of $0.01

Non-GAAP diluted EPS of $0.55

Increase cash and equivalents to $111.4 million

Reduce net long-term debt to $200.3 million

 

“In the first quarter of fiscal 2020, our Memory businesses, Specialty Memory Products and Brazil memory performed at or above expectations. In our Specialty Compute business, our two new acquisitions in July 2019 performed as expected, while our high performance computing business, Penguin Computing, experienced worse than expected seasonal weakness. We remain disciplined in managing our operating model and continue to drive improvements across all of our businesses. During the quarter, we meaningfully increased our cash position while reducing our debt. Overall we were able to increase non-GAAP EPS quarter-over-quarter in a difficult memory market,” commented Ajay Shah, Chairman and CEO.  

 

“In Brazil, having completed our first full quarter under the new points-based system for local manufacturing, we are encouraged by the results with units and revenues increasing from the previous quarter,” continued Mr. Shah.

 

“Looking forward, we continue to see improvement in our Memory related businesses and expect our second quarter to be the low point in this market,” concluded Mr. Shah.

 

Quarterly Financial Results

GAAP (1)

 

 

Non-GAAP (2)

 

(In millions, except per share amounts)

Q1 FY20

 

Q4 FY19

 

Q1 FY19

 

 

Q1 FY20

 

Q4 FY19

 

Q1 FY19

 

Net sales

$

272.0

 

$

278.4

 

$

393.9

 

 

$

272.0

 

$

278.4

 

$

393.9

 

Gross profit

$

54.3

 

$

52.3

 

$

85.1

 

 

$

55.7

 

$

53.4

 

$

85.6

 

Operating income

$

5.9

 

$

11.4

 

$

47.8

 

 

$

18.2

 

$

18.0

 

$

54.4

 

Net income

$

0.2

 

$

5.6

 

$

31.0

 

 

$

13.4

 

$

11.9

 

$

40.6

 

Diluted earnings per share (EPS)

$

0.01

 

$

0.24

 

$

1.33

 

 

$

0.55

 

$

0.50

 

$

1.75

 

 

(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 second quarter of fiscal 2020 ending February 28, 2020. These statements are forward-looking and actual results may differ materially. SMART undertakes no obligation to update these statements.

 

Net Sales

$265 to $275 million

Gross Margin - GAAP / Non-GAAP

19% to 21%

Diluted EPS - GAAP

$0.14 ± $0.05

 

 

Share-based compensation per share

$0.22

Intangible amortization per share

$0.14

 

 

Diluted EPS - Non-GAAP

$0.50 ± $0.05

 

 

Expected diluted share count

24.0 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 4198684.

 

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: 4198684.

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, integration 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

 

 

 

November 29,

2019

 

 

August 30,

2019

 

 

November 30,

2018

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Memory Products

 

$

103,529

 

 

$

104,634

 

 

$

139,949

 

Brazil Products

 

 

93,999

 

 

 

89,123

 

 

 

199,279

 

Specialty Compute and Storage Solutions

 

 

74,490

 

 

 

84,643

 

 

 

54,651

 

Total net sales

 

 

272,018

 

 

 

278,400

 

 

 

393,879

 

Cost of sales (1)(2)

 

 

217,698

 

 

 

226,108

 

 

 

308,810

 

Gross profit

 

 

54,320

 

 

 

52,292

 

 

 

85,069

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (1)

 

 

14,886

 

 

 

13,536

 

 

 

11,816

 

Selling, general and administrative (1) (2)

 

 

33,553

 

 

 

30,024

 

 

 

25,454

 

Change in estimated fair value of acquisition-related

 

 

 

 

 

 

 

 

 

 

 

 

   contingent consideration

 

 

 

 

 

(2,700

)

 

 

 

Total operating expenses

 

 

48,439

 

 

 

40,860

 

 

 

37,270

 

Income from operations

 

 

5,881

 

 

 

11,432

 

 

 

47,799

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(4,492

)

 

 

(4,567

)

 

 

(5,875

)

Other income (expense):

 

 

(840

)

 

 

819

 

 

 

(3,329

)

Total other expense

 

 

(5,332

)

 

 

(3,748

)

 

 

(9,204

)

Income before income taxes

 

 

549

 

 

 

7,684

 

 

 

38,595

 

Provision for income taxes

 

 

325

 

 

 

2,059

 

 

 

7,619

 

Net income

 

$

224

 

 

$

5,625

 

 

$

30,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.01

 

 

$

0.24

 

 

$

1.37

 

Diluted

 

$

0.01

 

 

$

0.24

 

 

$

1.33

 

Shares used in computing per-share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

23,713

 

 

 

23,366

 

 

 

22,595

 

Diluted

 

 

24,286

 

 

 

23,825

 

 

 

23,257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

730

 

 

$

682

 

 

$

545

 

Research and development

 

 

744

 

 

 

687

 

 

 

634

 

Selling, general and administrative

 

 

4,482

 

 

 

4,194

 

 

 

2,876

 

Total stock-based compensation expense

 

$

5,956

 

 

$

5,563

 

 

$

4,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Includes amortization of intangible assets expense as

   follows:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

647

 

 

$

436

 

 

$

16

 

Selling, general and administrative

 

 

2,766

 

 

 

2,165

 

 

 

961

 

Total amortization expense

 

$

3,413

 

 

$

2,601

 

 

$

977

 

 

 

 

 

 

 

 

 

 

 

 

 

 


SMART Global Holdings, Inc.

and Subsidiaries

Reconciliation of Non-GAAP Financial Measures to GAAP Results

(In thousands, except per share data)

 

  

 

Three Months Ended

 

 

 

November 29,

2019

 

 

August 30,

2019

 

 

November 30,

2018

 

Reconciliation of gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

54,320

 

 

$

52,292

 

 

$

85,069

 

GAAP gross margin

 

 

20.0

%

 

 

18.8

%

 

 

21.6

%

Add: Share-based compensation included in cost of sales

 

 

730

 

 

 

682

 

 

 

545

 

Add: Amortization of intangible assets

 

 

647

 

 

 

436

 

 

 

16

 

Non-GAAP gross profit

 

$

55,697

 

 

$

53,410

 

 

$

85,630

 

Non-GAAP gross margin

 

 

20.5

%

 

 

19.2

%

 

 

21.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating expenses

 

$

48,439

 

 

$

40,860

 

 

$

37,270

 

Less: Share-based compensation expense included in opex

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

744

 

 

 

687

 

 

 

634

 

Selling, general and administrative

 

 

4,482

 

 

 

4,194

 

 

 

2,876

 

Total

 

 

5,226

 

 

 

4,881

 

 

 

3,510

 

Less: Amortization of intangible assets included in opex

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

2,766

 

 

 

2,165

 

 

 

961

 

Total

 

 

2,766

 

 

 

2,165

 

 

 

961

 

Less: Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

126

 

Less: Acquisition-related costs

 

 

946

 

 

 

1,068

 

 

 

1,423

 

Less: Integration expenses

 

 

2,052

 

 

 

 

 

 

 

Less: Contingent consideration fair value adjustment

 

 

 

 

 

(2,700

)

 

 

 

Non-GAAP operating expenses

 

$

37,449

 

 

$

35,446

 

 

$

31,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income from operations

 

$

5,881

 

 

$

11,432

 

 

$

47,799

 

GAAP operating margin

 

 

2.2

%

 

 

4.1

%

 

 

12.1

%

Add: Share-based compensation expense

 

 

5,956

 

 

 

5,563

 

 

 

4,055

 

Add: Amortization of intangible assets

 

 

3,413

 

 

 

2,601

 

 

 

977

 

Add: Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

126

 

Add: Acquisition-related costs

 

 

946

 

 

 

1,068

 

 

 

1,423

 

Add: Integration expenses

 

 

2,052

 

 

 

 

 

 

 

Add: Contingent consideration fair value adjustment

 

 

 

 

 

(2,700

)

 

 

 

Non-GAAP income from operations

 

$

18,248

 

 

$

17,964

 

 

$

54,380

 

Non-GAAP operating margin

 

 

6.7

%

 

 

6.5

%

 

 

13.8

%

 


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

 

 

 

November 29,

2019

 

 

August 30,

2019

 

 

November 30,

2018

 

Reconciliation of income before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income before income taxes

 

$

549

 

 

$

7,684

 

 

$

38,595

 

Add: Share-based compensation expense

 

 

5,956

 

 

 

5,563

 

 

 

4,055

 

Add: Amortization of intangible assets

 

 

3,413

 

 

 

2,601

 

 

 

977

 

Add: Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

126

 

Add: Acquisition-related costs

 

 

946

 

 

 

1,068

 

 

 

1,423

 

Add: Integration expenses

 

 

2,052

 

 

 

 

 

 

 

Add: Contingent consideration fair value adjustment

 

 

 

 

 

(2,700

)

 

 

 

Add:  Foreign currency (gains)/losses

 

 

911

 

 

 

(332

)

 

 

3,384

 

Non-GAAP income before income taxes

 

$

13,827

 

 

$

13,884

 

 

$

48,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of provision for income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

GAAP provision for income taxes

 

$

325

 

 

$

2,059

 

 

$

7,619

 

GAAP effective tax rate

 

 

59.2

%

 

 

26.8

%

 

 

19.7

%

Tax effect of adjustments to GAAP results

 

 

(91

)

 

 

33

 

 

 

(338

)

Non-GAAP provision for income taxes

 

$

416

 

 

$

2,026

 

 

$

7,957

 

Non-GAAP effective tax rate

 

 

3.0

%

 

 

14.6

%

 

 

16.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

224

 

 

$

5,625

 

 

$

30,976

 

Adjustments to GAAP net income:

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

5,956

 

 

 

5,563

 

 

 

4,055

 

Amortization of intangible assets

 

 

3,413

 

 

 

2,601

 

 

 

977

 

Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

126

 

Acquisition-related costs

 

 

946

 

 

 

1,068

 

 

 

1,423

 

Integration expenses

 

 

2,052

 

 

 

 

 

 

 

Contingent consideration fair value adjustment

 

 

 

 

 

(2,700

)

 

 

 

Foreign currency (gains)/losses

 

 

911

 

 

 

(332

)

 

 

3,384

 

Tax effect of items excluded from non-GAAP results

 

 

(91

)

 

 

33

 

 

 

(338

)

Non-GAAP net income

 

$

13,411

 

 

$

11,858

 

 

$

40,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share (diluted)

 

 

24,286

 

 

 

23,825

 

 

 

23,257

 

Non-GAAP earnings per share (diluted)

 

$

0.55

 

 

$

0.50

 

 

$

1.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings per share (diluted)

 

$

0.01

 

 

$

0.24

 

 

$

1.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 


SMART Global Holdings, Inc.

and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted EBITDA

(In thousands)

 

 

Three Months Ended

 

 

 

November 29,

2019

 

 

August 30,

2019

 

 

November 30,

2018

 

GAAP net income

 

$

224

 

 

$

5,625

 

 

$

30,976

 

Share-based compensation expense

 

 

5,956

 

 

 

5,563

 

 

 

4,055

 

Amortization of intangible assets

 

 

3,413

 

 

 

2,601

 

 

 

977

 

Interest expense, net

 

 

4,492

 

 

 

4,567

 

 

 

5,875

 

Provision for income tax

 

 

325

 

 

 

2,059

 

 

 

7,619

 

Depreciation

 

 

6,131

 

 

 

6,452

 

 

 

5,431

 

Legal fees - term loan (payment holiday)

 

 

 

 

 

 

 

 

126

 

Acquisition-related costs(1)

 

 

946

 

 

 

1,068

 

 

 

1,423

 

Integration expenses

 

 

2,052

 

 

 

 

 

 

 

Contingent consideration fair value adjustment(1)

 

 

 

 

 

(2,700

)

 

 

 

Adjusted EBITDA

 

$

23,539

 

 

$

25,235

 

 

$

56,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Amounts in FY20 & FY19 related to acquisitions of new business, SMART EC & Wireless (July 2019) and Penguin Computing (June 2018).

 

 


SMART Global Holdings, Inc.

and Subsidiaries

Consolidated Balance Sheets

(In thousands)

 

 

November 29,

 

 

August 30,

 

 

 

2019

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

111,389

 

 

$

98,139

 

Accounts receivable, net

 

 

228,782

 

 

 

217,433

 

Inventories

 

 

159,999

 

 

 

118,738

 

Prepaid expenses and other current assets

 

 

32,158

 

 

 

37,950

 

Total current assets

 

 

532,328

 

 

 

472,260

 

Property and equipment, net

 

 

63,902

 

 

 

68,345

 

Operating lease right-of-use assets

 

 

27,211

 

 

 

 

Other noncurrent assets

 

 

13,512

 

 

 

12,784

 

Intangible assets, net

 

 

65,912

 

 

 

69,325

 

Goodwill

 

 

79,868

 

 

 

81,423

 

Total assets

 

$

782,733

 

 

$

704,137

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

224,213

 

 

$

164,866

 

Accrued liabilities

 

 

52,723

 

 

 

48,980

 

Current portion of long-term debt

 

 

23,039

 

 

 

24,054

 

Total current liabilities

 

 

299,975

 

 

 

237,900

 

Long-term debt

 

 

177,303

 

 

 

182,450

 

Long-term operating lease liabilities

 

 

23,452

 

 

 

 

Other long-term liabilities

 

 

10,219

 

 

 

10,327

 

Total liabilities

 

 

510,949

 

 

 

430,677

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Ordinary shares

 

 

718

 

 

 

712

 

Additional paid-in capital

 

 

294,332

 

 

 

285,994

 

Accumulated other comprehensive loss

 

 

(188,110

)

 

 

(177,866

)

Retained earnings

 

 

164,844

 

 

 

164,620

 

Total shareholders’ equity

 

 

271,784

 

 

 

273,460

 

Total liabilities and shareholders’ equity

 

$

782,733

 

 

$

704,137

 

 

 

 

 

 

 

 

 

 


SMART Global Holdings, Inc.

and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

 

 

Three Months Ended

 

 

 

November 29,

2019

 

 

August 30,

2019

 

 

November 30,

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

224

 

 

$

5,625

 

 

$

30,976

 

Adjustments to reconcile net income to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

9,544

 

 

 

9,054

 

 

 

6,408

 

Share-based compensation

 

 

5,956

 

 

 

5,563

 

 

 

4,055

 

Provision for doubtful accounts receivable and sales

   returns

 

 

73

 

 

 

(66

)

 

 

(104

)

Deferred income tax benefit

 

 

(970

)

 

 

(1,149

)

 

 

403

 

Loss on disposal of property and equipment

 

 

(42

)

 

 

56

 

 

 

3

 

Amortization of debt discounts and issuance costs

 

 

734

 

 

 

718

 

 

 

685

 

Amortization of operating lease right-of-use assets

 

 

1,114

 

 

 

 

 

 

 

Change in fair value of contingent consideration

 

 

 

 

 

(2,700

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(13,688

)

 

 

27,582

 

 

 

(89,441

)

Inventories

 

 

(42,206

)

 

 

19,312

 

 

 

30,576

 

Prepaid expenses and other assets

 

 

5,110

 

 

 

(3,393

)

 

 

(3,182

)

Accounts payable

 

 

60,438

 

 

 

(19,684

)

 

 

48,574

 

Operating lease liabilities

 

 

(1,082

)

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

62

 

 

 

8,023

 

 

 

6,399

 

Net cash provided by (used in) operating activities

 

 

25,267

 

 

 

48,941

 

 

 

35,352

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures and deposits on equipment

 

 

(5,158

)

 

 

(3,321

)

 

 

(13,384

)

Proceeds from sale of property and equipment

 

 

42

 

 

 

10

 

 

 

21

 

Acquisitions of business, net of cash acquired

 

 

 

 

 

(75,940

)

 

 

 

Net cash used in investing activities

 

 

(5,116

)