Press Release

SMART Global Holdings Reports Fourth Quarter and Full Year Fiscal 2018 Financial Results

NEWARK, Calif., Oct. 04, 2018 (GLOBE NEWSWIRE) -- 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 2018 ended August 31, 2018.

Fourth Quarter Fiscal 2018 Highlights:
  • Net sales of $374.0 million, 68% higher than year ago quarter
  • GAAP operating income of $45.0 million
  • GAAP net income of $29.7 million
  • Adjusted EBITDA of $51.0 million
  • GAAP diluted EPS of $1.28
  • Non-GAAP diluted EPS of $1.72
    Full Year Fiscal 2018 Highlights:
  • Net sales of $1.3 billion, 69% higher than prior fiscal year
  • GAAP operating income of $170.2 million
  • GAAP net income of $119.5 million
  • Adjusted EBITDA of $195.5 million
  • GAAP diluted EPS of $5.17
  • Non-GAAP diluted EPS of $6.36

“We completed fiscal 2018 with another great quarter, including the closing of our acquisition of Penguin Computing,” commented Ajay Shah, Chairman and Chief Executive Officer.  “In addition, we closed our first full fiscal year as a public company with record revenues that crossed the $1 billion mark.  Driving this performance was strength in our Specialty Memory business which had a very strong quarter and earned new NVDIMM and VLP RDIMM design wins at major Storage and Server customers.  We also had design wins for our ruggedized SSD products and our Embedded Data Cache product in the Industrial Automation market. Brazil continued its strong performance and added many new memory products for PC, server and smartphone applications as well as a new polymer cell-based battery product for smartphones.” 

“Our new Specialty Compute and Storage Solutions business led by Penguin Computing performed well in its first quarter as part of SGH. During the quarter we won a number of key contracts with agencies within the Department of Energy (DoE), contractors to the Department of Defense (DoD) and with a number of other enterprise customers for our HPC and AI cluster products.”

“We continue to be focused on growing all our lines of business over the new fiscal year,” concluded Mr. Shah.

 

Quarterly Financial Results GAAP (1)   Non-GAAP (2)
(In millions, except per share amounts) Q4 FY18 Q3 FY18 Q4 FY17   Q4 FY18 Q3 FY18 Q4 FY17
Net sales $   374.0 $   335.5 $   223.0     $   374.0 $   335.5 $   223.0
Gross profit $   82.7 $   78.1 $   48.0     $   83.8 $   78.5 $   48.2
Operating income $   45.0 $   48.7 $   20.6     $   51.8 $   53.8 $   25.4
Net income (loss) $   29.7 $   31.9 $   (10.2 )   $   40.0 $   43.0 $   16.5
Diluted earnings (loss) per share (EPS) (3) $   1.28 $   1.37 $   (0.48 )   $   1.72 $   1.84 $   0.75


Annual Financial Results GAAP (1)   Non-GAAP (2)
(In millions, except per share amounts) FY18 FY17   FY18 FY17
Net sales $   1,288.8 $   761.3     $   1,288.8 $   761.3
Gross profit $   291.6 $   162.3     $   293.6 $   162.9
Operating income $   170.2 $   53.9     $   188.8 $   71.2
Net income (loss) $   119.5 $   (7.8 )   $   147.0 $   36.3
Diluted earnings (loss) per share (EPS) (3) $   5.17 $   (0.49 )   $   6.36 $   2.25
           
(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" tables below for further detail on the non-GAAP financial reporting referenced above and a reconciliation of such measures to our nearest GAAP measures.
(3)      We exclude foreign currency gains/losses from our non-GAAP diluted EPS as we believe this non-GAAP financial measure is a more relevant indicator of our core operating results. This change is reflected for all the periods presented in this release.
 

Other Highlights
SMART appointed an additional independent director, Bryan Ingram, Senior Vice President and General Manager of the Wireless Semiconductor Division of Broadcom Inc., to its board of directors and its Compensation Committee.

Business Outlook
The following statements are based upon management's current expectations for the first quarter of fiscal 2019 ending November 30, 2018. These statements are forward-looking, and actual results may differ materially. SMART undertakes no obligation to update these statements.

Net Sales - GAAP / Non-GAAP $375 to $390 million
Gross Margin - GAAP / Non-GAAP 22% to 23%
Diluted EPS - GAAP $1.49 to $1.54
   
Share-based compensation per share $0.16
Intangible amortization per share $0.04
Acquisition costs per share $0.05
   
Diluted EPS - Non-GAAP $1.74 to $1.79
   
Expected diluted share count 23.2 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 9390108.

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: 9390108.

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; 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, non-GAAP net income per diluted share, non-GAAP diluted EPS excluding foreign currency gains (losses). We define Adjusted EBITDA as GAAP net income plus net interest expense, income tax expense, depreciation and amortization expense, stock-based compensation expense, acquisition-related expenses, restructuring charges, amortization of non-cash debt discount related to warrants, non-cash charges in connection with refinancing, 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 stock-based compensation expense, intangible amortization expense, acquisition-related expenses, amortization of non-cash debt discount related to warrants, non-cash charges in connection with refinancing 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 family of companies are global leaders in specialty memory, storage and hybrid solutions serving the electronics industry with standard and custom products for over 25 years. SMART delivers components, modules and solutions to a broad customer base, including OEMs in computing, networking, communications, storage, mobile and industrial markets. With the addition of Penguin Computing and the creation of a new business unit, SMART Specialty Compute & Storage Solutions (SCSS), SMART has expanded its serviceable markets into areas requiring specialized computing platforms in artificial intelligence and machine learning, advanced modeling and high performance computing. Customers rely on SMART as a strategic supplier with custom designs, product quality, technical support, a global footprint, and the ability to provide locally manufactured products in multiple geographies. See www.smartgh.com, www.smartm.com, www.smarth.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 31,
2018
 
   May 25,
2018 
   August 25,
2017 
   August 31,
2018
 
   August 25,
2017
 
Net sales:                    
  Brazil   $   198,624     $   232,742     $   134,765     $   797,849     $   398,175  
  Specialty Memory       122,820         102,735         88,254         438,446         363,116  
  Specialty Compute and Storage Solutions       52,526       —        —          52,526       —   
    Total net sales       373,970         335,477         223,019         1,288,821         761,291  
Cost of sales (1)(2)       291,291         257,423         175,011         997,235         599,041  
  Gross profit       82,679         78,054         48,008         291,586         162,250  
Operating expenses:                    
  Research and development (1) (2)       11,659         9,763         9,718         39,824         38,160  
  Selling, general and administrative (1) (2)       29,039         19,597         17,722         84,541         66,759  
  Change in estimated fair value of acquisition-related                     
    contingent consideration       (3,000 )     —        —          (3,000 )     —   
  Management advisory fees     —        —        —        —          3,000  
  Restructuring      —        —        —        —          457  
    Total operating expenses       37,698         29,360         27,440         121,365         108,376  
                         
    Income from operations       44,981         48,694         20,568         170,221         53,874  
Other income (expense):                    
  Interest expense, net       (6,217 )       (4,098 )       (6,132 )       (19,144 )       (29,204 )
  Other income (expense), net       (5,987 )       (7,145 )       (20,887 )       (13,299 )       (22,551 )
    Total other expense       (12,204 )       (11,243 )       (27,019 )       (32,443 )       (51,755 )
    Income (loss) before income taxes       32,777         37,451         (6,451 )       137,778         2,119  
Provision for income taxes       3,059         5,505         3,758         18,315         9,914  
    Net income (loss)   $   29,718     $   31,946     $   (10,209 )   $   119,463     $   (7,795 )
                         
Earnings (loss) per share:                    
  Basic   $   1.33     $   1.44     $   (0.48 )   $   5.42     $   (0.49 )
  Diluted   $   1.28     $   1.37     $   (0.48 )   $   5.17     $   (0.49 )
                         
Shares used in computing earnings (loss) per share:                    
  Basic       22,383         22,206         21,435         22,051         15,785  
  Diluted       23,270         23,306         21,435         23,119         15,785  
                         
(1) Includes share-based compensation expense as follows:                  
  Cost of sales   $   475     $   414     $   192     $   1,334     $   636  
  Research and development       572         325         232         1,459         655  
  Selling, general and administrative       2,911         2,558         1,407         7,764         4,073  
    Total stock-based compensation expense   $   3,958     $   3,297     $   1,831     $   10,557     $   5,364  
                         
(2) Includes amortization of intangible assets expense as follows:                
  Cost of sales   $   7     $   —      $   —      $   7     $   —   
  Research and development       252         245         1,225         987         4,897  
  Selling, general and administrative       2,144         976         1,746         5,136         7,042  
    Total amortization expense   $   2,403     $   1,221     $   2,971     $   6,130     $   11,939  
                         


 
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 31,
2018
   May 25,
2018
   August 25,
2017
   August 31,
2018
   August 25,
2017
Reconciliation of gross profit:                    
GAAP gross profit   $   82,679     $   78,054     $   48,008     $   291,586     $   162,250  
  GAAP gross margin     22.1 %     23.3 %     21.5 %     22.6 %     21.3 %
                         
Add: Share-based compensation included in cost of sales       475         414         192         1,334         636  
Add: Intangible amortization included in cost of sales       7       —        —          7       —   
Add: Purchase accounting adjustment       631       —        —          631       —   
                         
Non-GAAP gross profit   $   83,792     $   78,468     $   48,200     $   293,558     $   162,886  
  Non-GAAP gross margin     22.4 %     23.4 %     21.6 %     22.8 %     21.4 %
                         
Reconciliation of operating expenses:                    
GAAP operating expenses   $   37,698     $   29,360     $   27,440     $   121,365     $   108,376  
                         
Less: Share-based compensation expense included in opex                    
  Research and development       572         325         232         1,459         655  
  Selling, general and administrative       2,911         2,558         1,407         7,764         4,073  
    Total       3,483         2,883         1,639         9,223         4,728  
                         
Less: Amortization of intangible assets included in opex                    
  Research and development       252         245         1,225         987         4,897  
  Selling, general and administrative       2,144         976         1,746         5,136         7,042  
    Total       2,396         1,221         2,971         6,123         11,939  
                         
Less: S-1 related costs     —        —        —          813       —   
Less: Acquisition-related expenses       2,844         591       —          3,435       —   
Less: Contingent consideration fair value adjustment       (3,000 )     —        —          (3,000 )     —   
                         
Non-GAAP operating expenses   $   31,975     $   24,665     $   22,830     $   104,771     $   91,709  
                         
Reconciliation of income from operations:                    
GAAP income from operations   $   44,981     $   48,694     $   20,568     $   170,221     $   53,874  
  GAAP operating margin     12.0 %     14.5 %     9.2 %     13.2 %     7.1 %
                         
Add: Share-based compensation expense       3,958         3,297         1,831         10,557         5,364  
Add: Amortization of intangible assets       2,403         1,221         2,971         6,130         11,939  
Add: Purchase accounting adjustment       631       —        —          631       —   
Add: S-1 related costs     —        —        —          813       —   
Add: Acquisition-related expenses       2,844         591       —          3,435       —   
Less: Contingent consideration fair value adjustment       (3,000 )     —        —          (3,000 )     —   
                         
Non-GAAP income from operations   $   51,817     $   53,803     $   25,370     $   188,787     $   71,177  
  Non-GAAP operating margin     13.9 %     16.0 %     11.4 %     14.6 %     9.3 %
                         
Reconciliation of income before income taxes:                    
GAAP income before income taxes   $   32,777     $   37,451     $   (6,451 )   $   137,778     $   2,119  
Add: Share-based compensation expense       3,958         3,297         1,831         10,557         5,364  
Add: Amortization of intangible assets       2,403         1,221         2,971         6,130         11,939  
Add: Purchase accounting adjustment       631       —        —          631       —   
Add: S-1 related costs     —        —        —          813       —   
Add: Acquisition-related expenses       2,844       591          —          3,435       —   
Less: Contingent consideration fair value adjustment       (3,000 )     —        —          (3,000 )     —   
Less: Loss on early debt repayment     —        —          6,743       —          6,743  
Less: Amortization of debt discount related to warrants     —        —          1,214       —          5,127  
Less: Loss on extinguishment of LT debt     —        —          15,194       —          16,579  
Add: Foreign currency (gains) losses       5,968         6,932         (1,032 )       13,227         (285 )
                         
Non-GAAP income before income taxes   $   45,581     $   49,492     $   20,470     $   169,571     $   47,586  
                         


 
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 31,
2018
   May 25,
2018
   August 25,
2017
   August 31,
2018
   August 25,
2017
Reconciliation of provision for income taxes:                    
GAAP provision for income taxes   $   3,059     $   5,505     $   3,758     $   18,315     $   9,914  
  GAAP effective tax rate     9.3 %     14.7 %     -58.3 %     13.3 %     467.9 %
                         
Tax effect of adjustments to GAAP results       (2,529 )       (1,025 )       (214 )       (4,273 )       (1,367 )
                         
Non-GAAP provision for income taxes   $   5,588     $   6,530     $   3,972     $   22,588     $   11,281  
  Non-GAAP effective tax rate     12.3 %     13.2 %     19.4 %     13.3 %     23.7 %
                         
Reconciliation of net income and earnings per share (diluted):                    
GAAP net income (loss)   $   29,718     $   31,946     $   (10,209 )   $   119,463     $   (7,795 )
                         
Adjustments to GAAP net income:                    
  Share-based compensation       3,958         3,297         1,831         10,557         5,364  
  Amortization of intangible assets       2,403         1,221         2,971         6,130         11,939  
  Purchase accounting adjustment       631       —        —          631       —   
  S-1 related costs     —        —        —          813       —   
  Acquisition-related expenses       2,844       591          —          3,435       —   
  Contingent consideration fair value adjustment       (3,000 )     —        —          (3,000 )     —   
  Loss on early debt repayment     —        —          6,743       —          6,743  
  Amortization of debt discount related to warrants     —        —          1,214       —          5,127  
  Loss on extinguishment of LT debt     —        —          15,194       —          16,579  
  Foreign currency (gains) losses       5,968         6,932         (1,032 )       13,227         (285 )
  Tax effect of items excluded from non-GAAP results       (2,529 )       (1,025 )       (214 )       (4,273 )       (1,367 )
                         
Non-GAAP net income   $   39,993     $   42,962     $   16,498     $   146,983     $   36,305  
                         
Shares used in computing earnings per share (diluted)       23,270         23,306         22,011         23,119         16,171  
                         
Non-GAAP earnings per share (diluted)   $   1.72     $   1.84     $   0.75     $   6.36     $   2.25  
                         
GAAP income (loss) per share (diluted)   $   1.28     $   1.37     $   (0.48 )   $   5.17     $   (0.49 )
 


 
SMART Global Holdings, Inc.
and Subsidiaries
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(In thousands)
                         
        Three Months Ended   Fiscal Year Ended
         August 31,
2018
   May 25,
2018
   August 25,
2017
   August 31,
2018
   August 25,
2017
                         
GAAP net income (loss)   $   29,718     $   31,946   $   (10,209 )   $   119,463     $   (7,795 )
                         
  Share-based compensation expense       3,958         3,297       1,831     $   10,557         5,364  
  Amortization of intangible assets       2,403         1,221       2,971         6,130         11,939  
  Interest expense, net       6,217         4,098       6,132         19,144         29,204  
  Provision for income tax       3,059         5,505       3,758         18,315         9,914  
  Depreciation       5,124         4,806       4,869         20,052         21,300  
  S-1 related costs     —        —      —          813       —   
  Investment advisory fees     —        —      —        —          540  
  Restructuring     —        —      —        —          457  
  Obsolete inventory related to restructuring     —        —      —        —          372  
  Management advisory fees     —        —      —        —          3,000  
  Debt extension costs(1)     —        —      —        —          1,745  
  Loss on early debt repayment(2)     —        —      6,743          —          6,743  
  Loss on extinguishment of LT debt(3)     —        —      15,194          —          16,579  
  Purchase accounting adjustment(4)     631          —      —          631       —   
  Acquisition-related expenses(4)     2,844          591        —          3,435       25     
  Contingent consideration fair value adjustment(4)     (3,000   )     —      —          (3,000 )     —   
                         
  Adjusted EBITDA   $   50,954     $   51,464   $   31,289     $   195,540     $   99,387  
                         
  (1) Debt extension costs consist of $1.7 million associated with the amendment of our senior secured term loan and revolving credit facility in November 2016.
  (2) Loss on early payment of term loan for principal amount of $61.1 million in June 2017 related to IPO.    
  (3) Consists of $15.2 million loss on extinguishment of long-term debt for principal payment of $151.0 and $1.4 million loss on a February 2017 extinguishment.
  (4) Amounts in FY18 related to acquisition of Penguin Computing in June 2018.        
           


 
SMART Global Holdings, Inc.
and Subsidiaries
Consolidated Balance Sheets
(In thousands)
             
        August 31,   August 25,
          2018       2017  
Assets        
Current assets:        
  Cash and cash equivalents   $   31,375     $   22,436  
  Accounts receivable, net       237,212         183,303  
  Inventories         221,419         127,135  
  Prepaid expenses and other current assets       32,043         14,115  
    Total current assets       522,049         346,989  
Property and equipment, net       56,615         55,182  
Other noncurrent assets       22,449         26,728  
Intangible assets, net       26,255         5,107  
Goodwill         45,394         46,022  
    Total assets   $   672,762     $   480,028  
Liabilities and Shareholders’ Equity        
Current liabilities:        
  Accounts payable   $   223,186     $   189,717  
  Accrued liabilities       45,190         27,316  
  Current portion of long-term debt       27,409         22,841  
    Total current liabilities       295,785         239,874  
Long-term debt       184,190         154,450  
Other long-term liabilities       5,659         3,308  
    Total liabilities   $   485,634     $   397,632  
Shareholders’ equity:        
  Ordinary shares       678         653  
  Additional paid-in capital       250,191         232,162  
  Accumulated other comprehensive loss       (175,995 )       (143,210 )
  Retained earnings       112,254         (7,209 )
    Total shareholders’ equity       187,128         82,396  
    Total liabilities and shareholders’ equity   $   672,762     $   480,028  
             


 
SMART Global Holdings, Inc.
and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
                                 
                Three Months Ended   Fiscal Year Ended
                August 31,
2018
  May 25,
2018
  August 25,
2017
   August 31,
2018
   August 25,
2017
Cash flows from operating activities:                    
  Net income (loss)   $   29,718     $   31,946     $   (10,209 )   $   119,463     $   (7,795 )
  Adjustments to reconcile net income (loss) to net cash                    
    provided by (used in) operating activities:                    
      Depreciation and amortization       7,526         6,028         7,839         26,182         33,238  
      Share-based compensation       3,958         3,297         1,831         10,557         5,364  
      Provision for doubtful accounts receivable and sales returns       (73 )       (80 )       (82 )       (86 )       (51 )
      Deferred income tax benefit       (1,444 )       (422 )       (1,194 )       (2,820 )       (2,389 )
      (Gain) loss on disposal of property and equipment       461         (14 )       223         691         352  
      Write off of long-term asset     —          250       —          250       —   
      Extinguishment loss on long-term debt     —        —          15,194       —          16,580  
      Loss on early debt payment     —        —          6,744       —          6,744  
      Amortization of debt discounts and issuance costs       807         714         1,807         2,972         8,231  
      Change in fair value of contingent consideration       (3,000 )     —        —          (3,000 )     —   
      Changes in operating assets and liabilities:                    
        Accounts receivable       31,409         (45,799 )       (6,910 )       (55,297 )       (40,426 )
        Inventories       (14,495 )       (6,384 )       9,333         (42,435 )       (21,851 )
        Prepaid expenses and other assets       (5,241 )       (5,186 )       (799 )       (8,736 )       (58 )
        Accounts payable       (66,331 )       46,532         (22,407 )       17,548         (10,608 )
        Accrued expenses and other liabilities       7,321         (2,545 )       4,639         2,618         11,736  
          Net cash provided by (used in) operating activities       (9,384 )       28,337         6,009         67,907         (933 )
Cash flows from investing activities:                    
  Capital expenditures and deposits on equipment       (7,487 )       (7,794 )       (7,499 )       (25,738 )       (18,678 )
  Proceeds from sale of property and equipment       204         35         184         305         651  
  Acquisition of business, net of cash acquired       (42,316 )     —        —          (42,316 )     —   
          Net cash used in investing activities       (49,599 )       (7,759 )       (7,315 )       (67,749 )       (18,027 )
Cash flows from financing activities:                    
  Long-term debt payment       (5,865 )       (6,093 )       (2,009 )       (24,267 )       (19,698 )
  Early payment of long-term debt     —        —          (61,127 )     —          (61,127 )
  Payment for extinguishment of long-term debt     —        —          (151,008 )     —          (151,946 )
  Proceeds from issuance of long-term debt, net of costs paid       59,365       —          156,962         59,365         156,962  
  Fees paid for revolving line of credit refinancing     —        —          (3,167 )       (768 )       (3,167 )
  Issuance of ordinary shares from an initial public offering,                    
    net of underwriting commissions     —        —          63,507       —          63,507  
  Payment of costs related to initial public offering     —        —          (949 )       (1,591 )       (1,149 )
  Proceeds from borrowings under revolving line of credit       134,500         69,000         119,500         412,000         457,750  
  Repayments of borrowings under revolving line of credit       (166,789 )       (69,000 )       (119,500 )       (444,289 )       (457,750 )
  Proceeds from issuance of ordinary shares from share option exercises     1,324         1,993         58         7,494         406  
  Tax payments due upon issuance of ordinary shares for release of                    
    restricted stock units     —        —          (763 )     —          (763 )
          Net cash provided by (used) in financing activities       22,535          (4,100 )       1,504         7,944         (16,975 )
   
  Effect of exchange rate changes on cash and cash equivalents       3,328         (3,799 )       (103 )       837         (263 )
                                                   
          Net increase (decrease) in cash and cash equivalents       (33,120 )       12,679         95         8,939         (36,198 )
 
Cash and cash equivalents at beginning of period       64,495         51,816         22,341         22,436         58,634  
 
Cash and cash equivalents at end of period   $   31,375     $   64,495     $   22,436     $   31,375     $   22,436  
                                 


Investor Contact:

Suzanne Schmidt
Investor Relations for SMART Global Holdings, Inc.
(510) 360-8596
ir@smartm.com

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SMART Global Holdings, Inc.