SGH Reports First Quarter Fiscal 2024 Financial Results
- Record non-GAAP gross margins reflecting the shift to higher value enterprise solutions.
- End of the quarter with record cash and short-term investments of $553 million.
- Share repurchase authorization of $75 million approved.
- 30% decrease in net sales due to divestiture of SMART Brazil operations.
- GAAP EPS of $(0.23) versus $(0.08) in the year-ago quarter.
- Non-GAAP EPS of $0.24 versus $0.75 in the year-ago quarter.
Insights
SMART Global Holdings' first quarter fiscal 2024 financial results indicate a significant reduction in net sales by 30% compared to the previous year, which could signal challenges in revenue generation or market demand. However, the increase in GAAP and Non-GAAP gross margins suggests improvements in cost management and a strategic shift towards higher value enterprise solutions. The divestiture of the SMART Brazil operations could be a strategic move to streamline the company's focus but may also reflect a decision to exit less profitable or non-core business segments.
The share repurchase authorization of $75 million is a positive sign for shareholder value, indicating that the company believes its shares are undervalued or that it wishes to return value to shareholders. This move could potentially increase earnings per share by reducing the number of shares outstanding, but it also suggests that the company has sufficient cash reserves to support such a program without compromising its growth initiatives.
Examining SMART Global Holdings' performance within the semiconductor industry, the decline in net sales is a concern, especially when contrasted with the broader industry trend where demand for enterprise solutions and advanced memory technologies is growing. The company's focus on developing AI products and strengthening CreeLED’s portfolio aligns with industry growth areas, potentially positioning SGH for future recovery and growth.
The record cash and short-term investments position SGH to invest in innovation and strategic growth opportunities, which could be essential for long-term competitiveness. Investors should monitor how effectively SGH deploys these resources to capture market share and drive new revenue streams in a highly competitive and rapidly evolving industry.
From an economic perspective, the financial results of SMART Global Holdings reflect the company's adaptive strategies in response to market conditions. The increase in gross margins despite a downturn in sales suggests that SGH is successfully navigating cost pressures, possibly through supply chain optimization or product mix adjustments. The company's future outlook, projecting a slight increase in net sales and stable gross margins, indicates cautious optimism but also underscores the need for vigilance in a market that is sensitive to global economic shifts, including interest rates, trade policies and technological disruptions.
Record GAAP and Non-GAAP Gross Margins
On November 29, 2023, we completed our previously announced divestiture of an
First Quarter Fiscal 2024 Highlights for Continuing Operations
-
Net sales of
$274.2 million 30.0% versus the year-ago quarter -
Record GAAP gross margin of
30.2% , up 160 basis points versus the year-ago quarter -
Record Non-GAAP gross margin of
33.3% , up 200 basis points versus the year-ago quarter -
GAAP EPS of
$(0.23) $(0.08) -
Non-GAAP EPS of
$0.24 $0.75
“We are pleased with the progress we are making on our transformation journey, marked by the strategic divestiture of our
Share Repurchase Authorization
On January 8, 2024, the Audit Committee of the Board of Directors approved a
Quarterly Financial Results of Continuing Operations
|
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 |
(1) |
GAAP represents |
|
(2) |
Non-GAAP represents GAAP excluding the impact of certain activities. Further information regarding the Company’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures is included within this press release. |
Business Outlook
As of January 9, 2024, SGH is providing the following financial outlook for its continuing operations for the second quarter of fiscal 2024:
|
GAAP Outlook |
Adjustments |
Non-GAAP Outlook |
|
Net sales |
|
— |
|
|
Gross margin |
|
|
(A) |
|
Operating expenses |
|
|
(B)(C) |
|
Diluted earnings (loss) per share |
|
|
(A)(B)(C)(D) |
|
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 |
|
First Quarter Fiscal 2024 Earnings Conference Call and Webcast Details
SGH will hold a conference call and webcast to discuss the first quarter of fiscal 2024 results and related matters today, January 9, 2024, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Interested parties may access the call by dialing +1-833-470-1428 in the
Use of Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements concerning or regarding future events and the future financial and operating performance of SGH; statements regarding the extent and timing of and expectations regarding SGH’s future revenues and expenses and customer demand; statements regarding SGH’s strategic investments and priorities; statements regarding long-term effective tax rates; and statements regarding the business and financial outlook for the next fiscal quarter described under “Business Outlook” above.
These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe,” “could,” and other words of similar meaning. Forward-looking statements provide SGH’s current expectations or forecasts of future events, circumstances, results or aspirations and are subject to a number of significant risks, uncertainties and other factors, many of which are outside of SGH’s control, including but not limited to, global business and economic conditions and growth trends in technology industries, our customer markets and various geographic regions; uncertainties in the geopolitical environment; the ability to manage our cost structure; disruptions in our operations or supply chain; changes in trade regulations or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending; appropriations for government spending; the success of our strategic initiatives including additional investments in new products and additional capacity; acquisitions of companies or technologies and the failure to successfully integrate and operate them or customers’ negative reactions to them; incurring unanticipated costs following the completion of the sale of our SMART Brazil business; issues, delays or complications in integrating the operations of Stratus Technologies; limitations on or changes in the availability of supply of materials and components; fluctuations in material costs; the temporary or volatile nature of pricing trends in memory or elsewhere; deterioration in customer relationships; our dependence on a select number of customers and the timing and volume of customer orders; 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 LED market; changes to applicable tax regimes or rates; prices for the end products of our customers; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors; the inability to maintain or expand government business; and the continuing availability of borrowings under term loans and revolving lines of credit and our ability to raise capital through debt or equity financings.
These and other risks, uncertainties and factors are described in greater detail under the sections titled “Risk Factors,” “Critical Accounting Estimates,” “Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and “Liquidity and Capital Resources” contained in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and the Company’s other filings with the
Statement Regarding Use of Non-GAAP Financial Measures
SGH management uses non-GAAP measures to supplement SGH’s financial results under GAAP. Management uses these measures to analyze its operations and make decisions as to future operational plans and believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing the Company’s past and future operating performance. These non-GAAP measures exclude certain items, such as share-based compensation expense, amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships, trademarks/trade names and backlog acquired in connection with business combinations), acquisition-related inventory adjustments, acquisition-related expenses, restructure charges and integration expenses, impairment of goodwill, changes in the fair value of contingent consideration, gains (losses) from changes in currency exchange rates, amortization of debt discount and other costs, gain (loss) on extinguishment of debt, other infrequent or unusual items and related tax effects and other tax adjustments. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies is reflected in the Company’s non-GAAP measures and these intangible assets contribute to revenue generation. Management believes the presentation of operating results that exclude certain items provides useful supplemental information to investors and facilitates the analysis of the Company’s core operating results and comparison of operating results across reporting periods. Management also uses adjusted EBITDA, which represents GAAP net income (loss), adjusted for net interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense, acquisition-related inventory adjustments, acquisition-related expenses, restructure charges and integration expenses, impairment of goodwill, changes in the fair value of contingent consideration, gain (loss) on extinguishment of debt and other infrequent or unusual items.
Beginning in 2024, for our non-GAAP reporting, we are utilizing a long-term projected non-GAAP effective tax rate of
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, as they exclude important information about SGH’s financial results, as noted above. The presentation of these adjusted amounts varies from amounts presented in accordance with GAAP and therefore may not be comparable to amounts reported by other companies. In addition, adjusted EBITDA does not purport to represent cash flow provided by, or used for, operating activities in accordance with GAAP and should not be used as a measure of liquidity. Investors are encouraged to review the “Reconciliation of GAAP to Non-GAAP Measures” tables below.
About SMART Global Holdings – SGH
At SGH, we design, build, deploy and manage high-performance, high-availability enterprise solutions that help our customers solve for the future. Across our computing, memory, and LED lines of business, we focus on serving our customers by providing deep technical knowledge and expertise, custom design engineering, build-to-order flexibility and a commitment to best-in-class quality.
Learn more about us at SGHcorp.com.
SMART Global Holdings, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
December 1,
|
|
August 25,
|
|
November 25,
|
||||||
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 |
|
SMART Global Holdings, Inc. Reconciliation of GAAP to Non-GAAP Measures (In thousands) (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
December 1,
|
|
August 25,
|
|
November 25,
|
||||||
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 |
|
SMART Global Holdings, Inc. Reconciliation of GAAP to Non-GAAP Measures (In thousands, except per share amounts) (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
December 1,
|
|
August 25,
|
|
November 25,
|
||||||
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 |
|
SMART Global Holdings, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) |
|||||||
As of |
December 1,
|
|
August 25,
|
||||
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 |
|
SMART Global Holdings, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
December 1,
|
|
August 25,
|
|
November 25,
|
||||||
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 |
) |
SMART Global Holdings, Inc. Consolidated Statements of Cash Flows, Continued (In thousands) (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
December 1,
|
|
August 25,
|
|
November 25,
|
||||||
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 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240109180450/en/
Investor Contact:
Suzanne Schmidt
Investor Relations
+1-510-360-8596
ir@sghcorp.com
PR Contact:
Valerie Sassani
VP of Marketing and Communications
+1-510-941-8921
pr@sghcorp.com
Source: SMART Global Holdings, Inc.
FAQ
What are the Q1 fiscal 2024 financial results of SMART Global Holdings, Inc. (SGH)?
What was the share repurchase authorization approved by SMART Global Holdings, Inc. (SGH)?
What was the impact of the divestiture of SMART Brazil operations on net sales?
What was the ending cash and short-term investments of SMART Global Holdings, Inc. (SGH) in Q1 fiscal 2024?
What was the business outlook provided by SMART Global Holdings, Inc. (SGH) for the second quarter of fiscal 2024?
