SMART Global Holdings Reports Second Quarter Fiscal 2021 Financial Results

NEWARK, Calif.–(BUSINESS WIRE)–$SGH #SGH–SMART Global Holdings, Inc. (“SGH” or the “Company”) (Nasdaq: SGH), today reported financial results for the second quarter fiscal 2021 ended February 26, 2021.

Second Quarter Fiscal 2021 Highlights:

  • Net sales of $304.0 million, up 11.8% compared to the year ago quarter.
  • GAAP net income of $5.8 million, or $0.23 per share, compared to a GAAP net loss of $9.7 million or ($0.41) per share in the year ago quarter.
  • Non-GAAP net income of $21.9 million or $0.87 per share, up 71.1% and 67.3%, respectively, compared to the year ago quarter.
  • Adjusted EBITDA of $31.0 million, up 38.9% compared to the year ago quarter.

“Our second quarter sales of $304 million, which represented an 11.8 percent increase compared to the same quarter of fiscal 2020, enabled us to achieve non-GAAP earnings per share of $0.87, exceeding the high end of our guidance,” commented Mark Adams, President and CEO. “The Intelligent Platform Solutions business, formerly referred to as Specialty Compute and Storage Solutions, grew sales 30% quarter over quarter, and when coupled with the newly acquired Cree LED, illustrates the continued progress of a growing and diversified SGH.”

 
Quarterly Financial Results GAAP (1) Non-GAAP (2)
(In millions, except per share amounts) Q2 FY21 Q1 FY21 Q2 FY20 Q2 FY21 Q1 FY21 Q2 FY20
Net sales

$

304.0

$

291.7

$

272.0

 

$

304.0

$

291.7

$

272.0

Gross profit

$

53.5

$

52.6

$

51.5

 

$

59.3

$

54.1

$

52.9

Operating income

$

12.9

$

7.6

$

8.2

 

$

27.2

$

23.7

$

17.3

Net income (loss)

$

5.8

$

2.0

$

(9.7

)

$

21.9

$

19.6

$

12.8

Diluted earnings per share (EPS)

$

0.23

$

0.08

$

(0.41

)

$

0.87

$

0.78

$

0.52

 
(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.

Business Outlook

The following statements are based upon management’s current expectations for the third quarter of fiscal 2021 ending May 28, 2021. These statements are forward-looking and actual results may differ materially. SMART undertakes no obligation to update these statements.

 
Net Sales

$400 to $430 million

Gross Margin – GAAP / Non-GAAP

19% to 21%

Diluted EPS – GAAP*

$0.64 ± $0.10

 

Share-based compensation per share

$0.24

Intangible amortization per share

$0.14

Convertible debt discount OID and fees per share

$0.08

 

Diluted EPS – Non-GAAP

$1.10 ± $0.10

 

Expected diluted share count – GAAP

27.0 million

Capped call anti-dilution related to convertible

(1.0 million)

Expected diluted share count – Non-GAAP

26.0 million

 
*Does not include purchase price accounting for Cree LED acquisition.
 

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 +1-844-912-3896, or International toll free +1-236-714-3344 using access code 8075139. We will post an accompanying slide presentation to our website prior to the call.

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 +1-800-585-8367, or International toll free +1 416-621-4642; Passcode: 8075139.

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 technology and lighting industries, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; disruptions in our operations, our supply chain or in global markets as a result of the outbreak of COVID-19; 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, additional capacity and acquisitions; unforeseen issues in completing the carveout of Cree LED from Cree, Inc. and in the integration of Cree LED into SMART; unforeseen issues in the execution of Cree LED’s margin expansion plans; changes in the availability of supply of materials and components; fluctuations in material costs; negative reaction to the acquisition of Cree LED by customers, suppliers and other business partners; 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 incentives for local manufacturing 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 our Penguin Computing subsidiary 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 (loss) plus net interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense, out-of-period adjustments related to import taxes, loss on extinguishment of debt/revolver, capped call mark to market (MTM) adjustment, restructuring expenses, integration expenses, COVID-19 expenses, acquisition-related expenses, gain on settlements 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, out-of-period adjustments related to import taxes , loss on extinguishment of debt/revolver, capped call MTM adjustment, convertible debt original issue discount (OID) and fees, restructuring expenses, integration expenses, COVID-19 expenses, acquisition-related expenses, gain on settlements 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 to Adjusted EBITDA” tables below for more detail on non-GAAP calculations.

About SMART Global Holdings – SGH

SGH is comprised of business units that are leading designers and manufacturers of electronic products focused on computing, memory and LED lighting technologies. These businesses specialize in application-specific product development and support for customers in enterprise, government and OEM sales channels.

Customers rely on SGH businesses as their strategic suppliers providing exceptional customer service, product quality, and technical support with engineering, sales, manufacturing, supply chain and logistics capabilities that span the globe. SGH’s businesses support customers in computing including edge and high performance computing, communications, storage, networking, mobile, industrial automation, IoT and industrial IoT, government, military and LED lighting markets. SGH businesses operate in three primary areas: specialty computing, specialty memory products, and LED lighting.

For more information about SGH business units, visit: SMART Modular Technologies; SMART Embedded Computing; SMART Wireless Computing; SMART Supply Chain Services; Penguin Computing; Cree LED.

SMART Global Holdings, Inc.
and Subsidiaries
Consolidated Income Statements
(In thousands, except per share data)
 
Three Months Ended Six Months Ended
February 26,
2021
November 27,
2020
February 28,
2020
February 26,
2021
February 28,
2020
Net sales:
Specialty Memory Products

$

115,452

 

$

120,657

 

$

111,455

 

$

236,109

 

$

214,984

 

Brazil Products

 

103,145

 

 

105,166

 

 

97,700

 

 

208,312

 

 

191,699

 

Specialty Compute and Storage Solutions

 

85,411

 

 

65,873

 

 

62,887

 

 

151,284

 

 

137,377

 

Total net sales

 

304,009

 

 

291,697

 

 

272,042

 

 

595,705

 

 

544,060

 

Cost of sales (1) (2)

 

250,553

 

 

239,053

 

 

220,536

 

 

489,606

 

 

438,234

 

Gross profit

 

53,456

 

 

52,644

 

 

51,506

 

 

106,099

 

 

105,826

 

Operating expenses:
Research and development (1)

 

8,852

 

 

6,964

 

 

14,702

 

 

15,816

 

 

29,588

 

Selling, general and administrative (1) (2)

 

31,664

 

 

38,056

 

 

28,648

 

 

69,720

 

 

62,201

 

Total operating expenses

 

40,516

 

 

45,020

 

 

43,350

 

 

85,536

 

 

91,789

 

Income from operations

 

12,940

 

 

7,624

 

 

8,156

 

 

20,563

 

 

14,037

 

Other income (expense):
Interest expense, net

 

(4,365

)

 

(3,154

)

 

(4,150

)

 

(7,518

)

 

(8,642

)

Other income (expense), net

 

(1,531

)

 

832

 

 

(12,386

)

 

(699

)

 

(13,226

)

Total other expense

 

(5,896

)

 

(2,322

)

 

(16,536

)

 

(8,217

)

 

(21,868

)

Income before income taxes

 

7,044

 

 

5,302

 

 

(8,380

)

 

12,346

 

 

(7,831

)

Provision for income taxes

 

1,200

 

 

3,275

 

 

1,340

 

 

4,475

 

 

1,665

 

Net income (loss)

$

5,844

 

$

2,027

 

$

(9,720

)

$

7,871

 

$

(9,496

)

 
Earnings per share:
Basic

$

0.24

 

$

0.08

 

$

(0.41

)

$

0.32

 

$

(0.40

)

Diluted

$

0.23

 

$

0.08

 

$

(0.41

)

$

0.31

 

$

(0.40

)

 
Shares used in computing earnings per share:
Basic

 

24,217

 

 

24,561

 

 

23,906

 

 

24,389

 

 

23,809

 

Diluted

 

25,203

 

 

25,103

 

 

23,906

 

 

25,221

 

 

23,809

 

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

$

804

 

$

838

 

$

731

 

$

1,641

 

$

1,461

 

Research and development

 

810

 

 

778

 

 

783

 

 

1,588

 

 

1,527

 

Selling, general and administrative

 

3,784

 

 

9,472

 

 

3,133

 

 

13,257

 

 

7,615

 

Total stock-based compensation expense

$

5,398

 

$

11,088

 

$

4,647

 

$

16,486

 

$

10,603

 

 
(2) Includes amortization of intangible assets expense as follows:
Cost of sales

$

647

 

$

647

 

$

647

 

$

1,294

 

$

1,294

 

Selling, general and administrative

 

2,766

 

 

2,766

 

 

2,766

 

 

5,533

 

 

5,533

 

Total amortization expense

$

3,413

 

$

3,413

 

$

3,413

 

$

6,827

 

$

6,827

 

 
SMART Global Holdings, Inc.
and Subsidiaries
Reconciliation of Non-GAAP Financial Measures to GAAP Results
(In thousands, except per share data)
 
Three Months Ended Six Months Ended
February 26,
2021
November 27,
2020
February 28,
2020
February 26,
2021
February 28,
2020
Reconciliation of gross profit:
GAAP gross profit

$

53,456

 

$

52,644

 

$

51,506

 

$

106,099

 

$

105,826

 

GAAP gross margin

 

17.6

%

 

18.0

%

 

18.9

%

 

17.8

%

 

19.5

%

 
Add: Share-based compensation included in cost of sales

 

804

 

 

838

 

 

731

 

 

1,641

 

 

1,461

 

Add: Intangible amortization included in cost of sales

 

647

 

 

647

 

 

647

 

 

1,294

 

 

1,294

 

Add: Import taxes – Out of period adjustment

 

4,345

 

 

 

 

 

 

4,345

 

 

 

 
Non-GAAP gross profit

$

59,252

 

$

54,129

 

$

52,884

 

$

113,379

 

$

108,581

 

Non-GAAP gross margin

 

19.5

%

 

18.6

%

 

19.4

%

 

19.0

%

 

20.0

%

 
Reconciliation of operating expenses:
GAAP operating expenses

$

40,516

 

$

45,020

 

$

43,350

 

$

85,536

 

 

91,789

 

 
Less: Share-based compensation expense included in opex
Research and development

 

810

 

 

778

 

 

783

 

 

1,588

 

 

1,527

 

Selling, general and administrative

 

3,784

 

 

9,472

 

 

3,133

 

 

13,257

 

 

7,615

 

Total

 

4,594

 

 

10,250

 

 

3,916

 

 

14,845

 

 

9,142

 

Less: Amortization of intangible assets included in opex
Selling, general and administrative

 

2,766

 

 

2,766

 

 

2,766

 

 

5,533

 

 

5,533

 

Total

 

2,766

 

 

2,766

 

 

2,766

 

 

5,533

 

 

5,533

 

 
Less: Acquisition-related expenses

 

1,064

 

 

1,617

 

 

 

 

2,681

 

 

946

 

Less: Integration/restructuring expenses

 

 

 

 

 

1,040

 

 

 

 

3,092

 

 
Non-GAAP operating expenses

$

32,092

 

$

30,388

 

$

35,628

 

$

62,477

 

$

73,077

 

 
Reconciliation of income from operations:
GAAP income from operations

$

12,940

 

$

7,624

 

$

8,156

 

$

20,563

 

$

14,037

 

GAAP operating margin

 

4.3

%

 

2.6

%

 

3.0

%

 

3.5

%

 

2.6

%

 
Add: Share-based compensation expense

 

5,398

 

 

11,088

 

 

4,647

 

 

16,486

 

 

10,603

 

Add: Amortization of intangible assets

 

3,413

 

 

3,413

 

 

3,413

 

 

6,827

 

 

6,827

 

Add: Acquisition-related expenses

 

1,064

 

 

1,617

 

 

 

 

2,681

 

 

946

 

Add: Integration/restructuring expenses

 

 

 

 

 

1,040

 

 

 

 

3,092

 

Add: Import taxes – Out of period adjustment

 

4,345

 

 

 

 

 

 

4,345

 

 

 

Non-GAAP income from operations

$

27,160

 

$

23,741

 

$

17,256

 

$

50,902

 

$

35,504

 

Non-GAAP operating margin

 

8.9

%

 

8.1

%

 

6.3

%

 

8.5

%

 

6.5

%

 
SMART Global Holdings, Inc.
and Subsidiaries
Reconciliation of Non-GAAP Financial Measures to GAAP Results
(In thousands, except per share data)
 
Three Months Ended Six Months Ended

February 26,

2021

 

November 27,

2020

 

February 28,

2020

 

February 26,

2021

 

February 28,

2020

Reconciliation of income before income taxes:
GAAP income (loss) before income taxes

$

7,044

 

$

5,302

 

$

(8,380

)

$

12,346

 

$

(7,831

)

Add: Share-based compensation expense

 

5,398

 

 

11,088

 

 

4,647

 

 

16,486

 

 

10,603

 

Add: Amortization of intangible assets

 

3,413

 

 

3,413

 

 

3,413

 

 

6,827

 

 

6,827

 

Add: Acquisition-related expenses

 

1,064

 

 

1,617

 

 

 

 

2,681

 

 

946

 

Add: Integration/Restructuring expenses

 

 

 

 

 

1,040

 

 

 

 

3,092

 

Add: Import taxes – Out of period adjustment

 

5,085

 

 

 

 

 

 

5,085

 

 

 

Add: Extinguishment of term loan

 

 

 

 

 

6,630

 

 

 

 

6,630

 

Add: Capped call MTM adjustment

 

 

 

 

 

4,795

 

 

 

 

4,795

 

Add: Convertible debt discount OID and fees

 

2,098

 

 

2,062

 

 

399

 

 

4,160

 

 

399

 

Add: Foreign currency (gains)/losses

 

843

 

 

(642

)

 

1,191

 

 

201

 

 

2,102

 

 
Non-GAAP income before income taxes

$

24,945

 

$

22,839

 

$

13,735

 

$

47,785

 

$

27,562

 

 
Reconciliation of provision for income taxes:
GAAP provision for income taxes

$

1,200

 

$

3,275

 

$

1,340

 

$

4,475

 

$

1,665

 

GAAP effective tax rate

 

17.0

%

 

61.8

%

 

-16.0

%

 

36.2

%

 

-21.3

%

 

 

Less: Goodwill tax credit

 

 

 

 

 

484

 

 

 

 

484

 

Add: Import taxes – Out of period adjustment

 

1,727

 

 

 

 

 

 

1,727

 

 

 

Tax effect of other adjustments to GAAP results

 

(84

)

 

64

 

 

(119

)

 

(20

)

 

(210

)

 
Non-GAAP provision for income taxes

$

3,011

 

$

3,211

 

$

975

 

$

6,222

 

$

1,391

 

Non-GAAP effective tax rate

 

12.1

%

 

14.1

%

 

7.1

%

 

13.0

%

 

5.0

%

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

$

5,844

 

$

2,027

 

$

(9,720

)

$

7,871

 

$

(9,496

)

 

 

Adjustments to GAAP net income (loss):
Share-based compensation

 

5,398

 

 

11,088

 

 

4,647

 

 

16,486

 

 

10,603

 

Amortization of intangible assets

 

3,413

 

 

3,413

 

 

3,413

 

 

6,827

 

 

6,827

 

Acquisition-related expenses

 

1,064

 

 

1,617

 

 

 

 

2,681

 

 

946

 

Integration/restructuring expenses

 

 

 

 

 

1,040

 

 

 

 

3,092

 

Import taxes – Out of period adjustment

 

3,358

 

 

 

 

 

 

3,358

 

 

 

Extinguishment of term loan

 

 

 

 

 

6,630

 

 

 

 

6,630

 

Capped call MTM adjustment

 

 

 

 

 

4,795

 

 

 

 

4,795

 

Convertible debt discount OID and fees

 

2,098

 

 

2,062

 

 

399

 

 

4,160

 

 

399

 

Goodwill tax credit

 

 

 

 

 

484

 

 

 

 

484

 

Foreign currency (gains)/losses

 

843

 

 

(642

)

 

1,191

 

 

201

 

 

2,102

 

Tax effect of other items excluded from non-GAAP results

 

(84

)

 

64

 

 

(119

)

 

(20

)

 

(210

)

 
Non-GAAP net income

$

21,934

 

$

19,628

 

$

12,760

 

$

41,564

 

$

26,171

 

 
Shares used in computing earnings per share (diluted)

 

25,203

 

 

25,103

 

 

24,567

 

 

25,221

 

 

24,440

 

 
Non-GAAP earnings per share (diluted)

$

0.87

 

$

0.78

 

$

0.52

 

$

1.65

 

$

1.07

 

 
GAAP earnings per share (diluted)

$

0.23

 

$

0.08

 

$

(0.41

)

$

0.31

 

$

(0.40

)

 
SMART Global Holdings, Inc.
and Subsidiaries
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(In thousands)
 
Three Months Ended Six Months Ended
February 26,
2021
November 27,
2020
February 28,
2020
February 26,
2021
February 28,
2020
 
GAAP net income (loss)

$

5,844

$

2,027

$

(9,720

)

$

7,871

$

(9,496

)

 
Share-based compensation expense

 

5,398

 

11,088

 

4,647

 

 

16,486

 

10,603

 

Amortization of intangible assets

 

3,413

 

3,413

 

3,413

 

 

6,827

 

6,826

 

Interest expense, net

 

4,365

 

3,154

 

4,150

 

 

7,519

 

8,642

 

Provision for income tax

 

1,200

 

3,275

 

1,340

 

 

4,475

 

1,665

 

Depreciation

 

5,378

 

4,954

 

6,021

 

 

10,332

 

12,152

 

Acquisition-related expenses(1)

 

1,064

 

1,617

 

 

 

2,681

 

946

 

Integration/restructuring expenses

 

 

 

1,040

 

 

 

3,092

 

Import taxes – Out of period adjustment

 

4,345

 

 

 

 

4,345

 

 

Extinguishment of term loan

 

 

 

6,630

 

 

 

6,630

 

Capped call MTM adjustment

 

 

 

4,795

 

 

 

4,795

 

 
Adjusted EBITDA

$

31,007

$

29,527

$

22,316

 

$

60,536

$

45,855

 

 
(1) Amounts related to acquisitions of Cree LED (March 2021) and SMART EC & Wireless (July 2019).
 
SMART Global Holdings, Inc.
and Subsidiaries
Consolidated Balance Sheets
(In thousands)
 
February 26, August 28,

 

2021

 

 

 

2020

 

Assets
Current assets:
Cash and cash equivalents

$

139,803

 

$

150,811

 

Accounts receivable, net

 

203,376

 

 

215,918

 

Inventories

 

189,327

 

 

162,991

 

Prepaid expenses and other current assets

 

46,321

 

 

26,990

 

Total current assets

 

578,827

 

 

556,710

 

Property and equipment, net

 

78,146

 

 

54,705

 

Operating lease right-of-use assets

 

25,049

 

 

25,013

 

Other noncurrent assets

 

16,924

 

 

20,554

 

Intangible assets, net

 

48,844

 

 

55,671

 

Goodwill

 

73,017

 

 

73,955

 

Total assets

$

820,807

 

$

786,608

 

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable

$

261,443

 

$

224,660

 

Accrued liabilities

 

61,581

 

 

57,829

 

Total current liabilities

 

323,024

 

 

282,489

 

Long-term debt

 

210,811

 

 

195,573

 

Long-term operating lease liabilities

 

21,342

 

 

20,829

 

Other long-term liabilities

 

7,071

 

 

5,613

 

Total liabilities

 

562,248

 

 

504,504

 

Shareholders’ equity:
Ordinary shares

 

757

 

 

737

 

Additional paid-in capital

 

320,284

 

 

346,131

 

Accumulated other comprehensive loss

 

(233,830

)

 

(228,241

)

Retained earnings

 

171,348

 

 

163,477

 

Total shareholders’ equity

 

258,559

 

 

282,104

 

Total liabilities and shareholders’ equity

$

820,807

 

$

786,608

 

 
SMART Global Holdings, Inc.
and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
 
Three Months Ended Six Months Ended
February 26,
2021
November 27,
2020
February 28,
2020
February 26,
2021
February 28,
2020
Cash flows from operating activities:
Net income (loss)

$

5,844

 

$

2,027

 

$

(9,720

)

$

7,871

 

$

(9,496

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization

 

8,793

 

 

8,367

 

 

9,435

 

 

17,160

 

 

18,979

 

Share-based compensation

 

5,398

 

 

11,088

 

 

4,647

 

 

16,486

 

 

10,603

 

Provision for doubtful accounts receivable and sales returns

 

6

 

 

(9

)

 

(100

)

 

(3

)

 

(27

)

Deferred income tax benefit

 

49

 

 

222

 

 

610

 

 

271

 

 

(360

)

(Gain) Loss on disposal of property and equipment

 

988

 

 

(5

)

 

(18

)

 

984

 

 

(60

)

Loss on mark-to-market adjustment of the capped call

 

 

 

 

 

4,795

 

 

 

 

4,795

 

Loss on extinguishment of debt

 

 

 

 

 

6,630

 

 

 

 

6,630

 

Amortization of debt discounts and issuance costs

 

2,191

 

 

2,116

 

 

1,047

 

 

4,307

 

 

1,781

 

Amortization of operating lease right-of-use assets

 

1,500

 

 

1,413

 

 

1,168

 

 

2,913

 

 

2,282

 

Changes in operating assets and liabilities:
Accounts receivable

 

12,012

 

 

(1,930

)

 

9,198

 

 

10,082

 

 

(4,490

)

Inventories

 

(41,053

)

 

12,919

 

 

(3,343

)

 

(28,134

)

 

(45,549

)

Prepaid expenses and other assets

 

(9,849

)

 

(9,277

)

 

1,386

 

 

(19,126

)

 

6,496

 

Accounts payable

 

21,607

 

 

18,022

 

 

(3,782

)

 

39,629

 

 

56,656

 

Operating lease liabilities

 

(1,238

)

 

(1,504

)

 

(1,058

)

 

(2,742

)

 

(2,140

)

Accrued expenses and other liabilities

 

14,173

 

 

(7,880

)

 

2,439

 

 

6,292

 

 

2,501

 

Net cash provided by operating activities

 

20,421

 

 

35,569

 

 

23,334

 

 

55,990

 

 

48,601

 

Cash flows from investing activities:
Capital expenditures and deposits on equipment

 

(20,151

)

 

(14,644

)

 

(4,210

)

 

(34,795

)

 

(9,368

)

Proceeds from sale of property and equipment

 

151

 

 

16

 

 

54

 

 

167

 

 

96

 

Net cash used in investing activities

 

(20,000

)

 

(14,628

)

 

(4,156

)

 

(34,628

)

 

(9,272

)

Cash flows from financing activities:
Repurchase of ordinary shares

 

(44,330

)

 

 

 

 

 

(44,330

)

 

 

Proceeds from FINEP loan

 

11,439

 

 

 

 

 

 

11,439

 

 

 

Proceeds from borrowings under revolving line of credit

 

23,000

 

 

19,500

 

 

6,000

 

 

42,500

 

 

18,500

 

Repayments of borrowings under revolving line of credit

 

(23,000

)

 

(19,500

)

 

(6,000

)

 

(42,500

)

 

(18,500

)

Proceeds from issuance of ordinary shares from share option exercises

 

2,546

 

 

1,337

 

 

641

 

 

3,883

 

 

1,807

 

Proceeds from issuance of ordinary shares from ESPP

 

 

 

1,768

 

 

 

 

1,768

 

 

1,242

 

Withholding tax on restricted stock units

 

(151

)

 

(3,483

)

 

(351

)

 

(3,634

)

 

(371

)

Long-term debt payment – Term loan

 

 

 

 

 

 

 

 

 

(5,625

)

Long-term debt payment – BNDES

 

 

 

 

 

(797

)

 

 

 

(1,607

)

Purchase of capped call

 

 

 

 

 

(21,825

)

 

 

 

(21,825

)

Proceeds from convertible notes due 2026, net of discount

 

 

 

 

 

243,125

 

 

 

 

243,125

 

Payment for extinguishment of long-term debt

 

 

 

 

 

(204,904

)

 

 

 

(204,904

)

Net cash provided by (used in) financing activities

 

(30,496

)

 

(378

)

 

15,889

 

 

(30,874

)

 

11,842

 

 
Effect of exchange rate changes on the cash and cash equivalents

 

5,781

 

 

(7,277

)

 

(4,596

)

 

(1,496

)

 

(7,450

)

 
Net increase (decrease) in cash and cash equivalents

 

(24,294

)

 

13,286

 

 

30,471

 

 

(11,008

)

 

43,721

 

Cash and cash equivalents at beginning of period

 

164,097

 

 

150,811

 

 

111,389

 

 

150,811

 

 

98,139

 

Cash and cash equivalents at end of period

$

139,803

 

$

164,097

 

$

141,860

 

$

139,803

 

$

141,860

 

Contacts

Investor Contact:
Suzanne Schmidt

Investor Relations for SMART Global Holdings, Inc.

(510) 360-8596

[email protected]

PR Contact:
Valerie Sassani

VP of Marketing and Communications

(510) 941 -8921

[email protected]

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