NEWARK, Calif., Sept. 28, 2017 (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 2017 ended August 25, 2017.
| Fourth Quarter Fiscal 2017 Highlights: | Full Year Fiscal 2017 Highlights: | |
| • Net sales 53% higher than year ago quarter | • Net sales 42% higher than prior fiscal year | |
| • Net sales of $223.0 million | • Net sales of $761.3 million | |
| • GAAP operating income $20.6 million | • GAAP operating income $53.9 million | |
| • GAAP net loss of $(10.2) million | • GAAP net loss of $(7.8) million | |
| • Adjusted EBITDA of $31.3 million | • Adjusted EBITDA of $99.4 million | |
| • GAAP EPS of $(0.48) | • GAAP EPS of $(0.49) | |
| • Non-GAAP diluted EPS of $0.79 | • Non-GAAP diluted EPS of $2.26 |
“We completed fiscal 2017 on a strong note, having accomplished a number of key milestones that set the foundation for continued momentum as we enter fiscal 2018,” commented Iain MacKenzie, President and Chief Executive Officer of SMART Global Holdings. “The strength of the global memory market contributed to all of our businesses across the board. In SMART Brazil we are also benefitting from the improving economy and the introduction of new products. Increasing demand from our networking and storage customers is driving healthy growth in our Specialty Memory business as well. We also recently paid off a portion of our term loan with the proceeds of our IPO, as well as completing an important debt refinancing that clears the path for improved operating leverage in our financial model, enabling us to drive increasing returns for our shareholders.”
| Quarterly Financial Results | GAAP (1) | Non-GAAP (2) | ||||||||||||||
| (In millions, except per share amounts) | Q4 FY17 | Q3 FY17 | Q4 FY16 | Q4 FY17 | Q3 FY17 | Q4 FY16 | ||||||||||
| Net Sales | $ | 223.0 | $ | 207.0 | $ | 146.2 | $ | 223.0 | $ | 207.0 | $ | 146.2 | ||||
| Gross Profit | $ | 48.0 | $ | 47.4 | $ | 29.9 | $ | 48.2 | $ | 47.6 | $ | 30.0 | ||||
| Operating Income | $ | 20.6 | $ | 20.4 | $ | 4.0 | $ | 25.4 | $ | 24.8 | $ | 8.3 | ||||
| Net Income (Loss) | $ | (10.2 | ) | $ | 8.0 | $ | (1.5 | ) | $ | 17.4 | $ | 13.7 | $ | 2.5 | ||
| Earnings (loss) per share | $ | (0.48 | ) | $ | 0.50 | $ | (0.11 | ) | $ | 0.79 | $ | 0.62 | * | $ | 0.18 | |
| Annual Financial Results | GAAP (1) | Non-GAAP (2) | |||||||||||
| (In millions, except per share amounts) | FY17 | FY16 | FY17 | FY16 | |||||||||
| Net Sales | $ | 761.3 | $ | 534.4 | $ | 761.3 | $ | 534.4 | |||||
| Gross Profit | $ | 162.3 | $ | 106.9 | $ | 162.9 | $ | 107.4 | |||||
| Operating Income | $ | 53.9 | $ | 6.2 | $ | 71.2 | $ | 23.4 | |||||
| Net Income (Loss) | $ | (7.8 | ) | $ | (20.0 | ) | $ | 36.6 | $ | (4.1 | ) | ||
| Earnings (loss) per share | $ | (0.49 | ) | $ | (1.44 | ) | $ | 2.26 | $ | (0.30 | ) | ||
| (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. | |||||||||||||
| * Represents pro forma non-GAAP earnings per diluted share. The pro forma weighted average diluted | |||||||||||||
| shares outstanding used in the computation includes the pro forma effect of the 6,095,000 shares issued | |||||||||||||
| in our IPO on May 30, 2017 as if they were outstanding for the entire third quarter. | |||||||||||||
Other Highlights
• Paid down $61.1 million of our term loan with proceeds from the IPO and then completed a refinancing transaction that extended the maturity date of the term loan; both transactions contributed to significantly reduce interest expense.
Business Outlook
The following statements are based upon management's current expectations for the first quarter of fiscal 2018 ending November 24, 2017. These statements are forward-looking, and actual results may differ materially. SMART undertakes no obligation to update these statements.
| Net Sales - GAAP/Non-GAAP | $225 to $240 million | |
| Gross Margin - GAAP/Non-GAAP | 21% to 22% | |
| Earnings per share - GAAP | $0.66 to $0.70 | |
| Intangible amortization per share | $0.06 | |
| Stock-based compensation per share | $0.07 | |
| Earnings per share - Non -GAAP | $0.79 to $0.83 | |
| Expected diluted share count | 22.3 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 79446792.
A replay of the conference call will be available until October 22, 2017 through the Events section of the SMART website at www.smartgh.com or until October 5, 2017 by calling US toll free +1-855-859-2056; Passcode: 79446792.
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 industry 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; overall information technology spending; the success of our strategic initiatives including additional investments in new products and additional capacity; 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; deterioration in or loss of relations with any of our limited number of key vendors; 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 operates 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 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
The following non-GAAP financial measures are included in this press release, including Adjusted EBITDA, non-GAAP net income, non-GAAP net income per diluted share, non-GAAP diluted EPS and pro forma non-GAAP diluted EPS. We define Adjusted EBITDA as GAAP net income plus net interest expense, income tax expense, depreciation and amortization expense, stock-based compensation expense, restructuring charges, 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 do not include stock-based compensation expense, intangible amortization expense, amortization of non-cash debt discount related to warrants and non-cash charges in connection with refinancing. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. By excluding these charges and gains, 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 Adjusted EBITDA and 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. 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 memory products in multiple geographies. See www.smartgh.com, www.smartm.com, www.smarth.com or www.smartsscs.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 25, 2017 | May 26, 2017 | August 26, 2016 | August 25, 2017 | August 26, 2016 | ||||||||||||||||||
| Net sales: | ||||||||||||||||||||||
| Brazil DRAM | $ | 46,830 | $ | 38,028 | $ | 19,473 | $ | 132,881 | $ | 86,936 | ||||||||||||
| Brazil Mobile Memory | 87,935 | 71,216 | 46,992 | 265,294 | 158,964 | |||||||||||||||||
| Specialty Memory | 88,254 | 97,730 | 79,736 | 363,116 | 288,523 | |||||||||||||||||
| Total net sales | 223,019 | 206,974 | 146,201 | 761,291 | 534,423 | |||||||||||||||||
| Cost of sales (1) | 175,011 | 159,599 | 116,325 | 599,041 | 427,491 | |||||||||||||||||
| Gross profit | 48,008 | 47,375 | 29,876 | 162,250 | 106,932 | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||
| Research and development (1) (2) | 9,718 | 8,797 | 10,353 | 38,160 | 38,116 | |||||||||||||||||
| Selling, general and administrative (1) (2) | 17,722 | 17,193 | 14,532 | 66,759 | 57,495 | |||||||||||||||||
| Management advisory fees | - | 1,000 | 1,000 | 3,000 | 4,001 | |||||||||||||||||
| Restructuring | - | - | (8 | ) | 457 | 1,135 | ||||||||||||||||
| Total operating expenses | 27,440 | 26,990 | 25,877 | 108,376 | 100,747 | |||||||||||||||||
| Income from operations | 20,568 | 20,385 | 3,999 | 53,874 | 6,185 | |||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||
| Interest expense, net | (6,132 | ) | (8,294 | ) | (6,310 | ) | (29,204 | ) | (25,575 | ) | ||||||||||||
| Other income (expense), net | (20,887 | ) | (762 | ) | 1,144 | (22,551 | ) | 1,874 | ||||||||||||||
| Total other expense | (27,019 | ) | (9,056 | ) | (5,166 | ) | (51,755 | ) | (23,701 | ) | ||||||||||||
| Income (loss) before income taxes | (6,451 | ) | 11,329 | (1,167 | ) | 2,119 | (17,516 | ) | ||||||||||||||
| Provision for income taxes | 3,758 | 3,371 | 294 | 9,914 | 2,444 | |||||||||||||||||
| Net income (loss) | $ | (10,209 | ) | $ | 7,958 | $ | (1,461 | ) | $ | (7,795 | ) | $ | (19,960 | ) | ||||||||
| Earnings per share: | ||||||||||||||||||||||
| Basic | $ | (0.48 | ) | $ | 0.57 | $ | (0.11 | ) | $ | (0.49 | ) | $ | (1.44 | ) | ||||||||
| Diluted | $ | (0.48 | ) | $ | 0.50 | $ | (0.11 | ) | $ | (0.49 | ) | $ | (1.44 | ) | ||||||||
| Shares used in computing per-share calculation: | ||||||||||||||||||||||
| Basic | 21,435 | 13,986 | 13,865 | 15,785 | 13,841 | |||||||||||||||||
| Diluted | 21,435 | 15,955 | 13,865 | 15,785 | 13,841 | |||||||||||||||||
| (1) Includes share-based compensation expense as follows: | ||||||||||||||||||||||
| Cost of sales | $ | 192 | $ | 176 | $ | 113 | $ | 636 | $ | 461 | ||||||||||||
| Research and development | 232 | (22 | ) | 162 | 655 | $ | 725 | |||||||||||||||
| Selling, general and administrative | 1,407 | 1,235 | 627 | 4,073 | $ | 2,686 | ||||||||||||||||
| Total stock-based compensation expense | $ | 1,831 | $ | 1,389 | $ | 902 | $ | 5,364 | $ | 3,872 | ||||||||||||
| (2) Includes amortization of intangible assets expense as follows: | ||||||||||||||||||||||
| Research and development | $ | 1,225 | $ | 1,224 | $ | 1,225 | $ | 4,897 | $ | 4,897 | ||||||||||||
| Selling, general and administrative | 1,746 | 1,774 | 2,196 | 7,042 | 8,471 | |||||||||||||||||
| Total amortization expense | $ | 2,971 | $ | 2,998 | $ | 3,421 | $ | 11,939 | $ | 13,368 | ||||||||||||
| 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 25, 2017 | May 26, 2017 | August 26, 2016 | August 25, 2017 | August 26, 2016 | ||||||||||||||||||
| Reconciliation of gross profit: | ||||||||||||||||||||||
| GAAP gross profit | $ | 48,008 | $ | 47,375 | $ | 29,876 | $ | 162,250 | $ | 106,932 | ||||||||||||
| GAAP gross margin | 21.5% | 22.9% | 20.4% | 21.3% | 20.0% | |||||||||||||||||
| Add: Share-based compensation included in cost of sales | 192 | 176 | 113 | 636 | 461 | |||||||||||||||||
| Non-GAAP gross profit | $ | 48,200 | $ | 47,551 | $ | 29,989 | $ | 162,886 | $ | 107,393 | ||||||||||||
| Non-GAAP gross margin | 21.6% | 23.0% | 20.5% | 21.4% | 20.1% | |||||||||||||||||
| Reconciliation of operating expenses: | ||||||||||||||||||||||
| GAAP operating expenses | $ | 27,440 | $ | 26,990 | $ | 25,877 | $ | 108,376 | $ | 100,747 | ||||||||||||
| Less: Share-based compensation expense included in opex | ||||||||||||||||||||||
| Research and development | 232 | (22 | ) | 162 | 655 | 725 | ||||||||||||||||
| Selling, general and administrative | 1,407 | 1,235 | 627 | 4,073 | 2,686 | |||||||||||||||||
| Total | 1,639 | 1,213 | 789 | 4,728 | 3,411 | |||||||||||||||||
| Less: Amortization of intangible assets included in opex | ||||||||||||||||||||||
| Research and development | 1,225 | 1,224 | 1,225 | 4,897 | 4,897 | |||||||||||||||||
| Selling, general and administrative | 1,746 | 1,774 | 2,196 | 7,042 | 8,471 | |||||||||||||||||
| Total | 2,971 | 2,998 | 3,421 | 11,939 | 13,368 | |||||||||||||||||
| Non-GAAP operating expenses | $ | 22,830 | $ | 22,779 | $ | 21,667 | $ | 91,709 | $ | 83,968 | ||||||||||||
| Reconciliation of income from operations: | ||||||||||||||||||||||
| GAAP income from operations | $ | 20,568 | $ | 20,385 | $ | 3,999 | $ | 53,874 | $ | 6,185 | ||||||||||||
| GAAP operating margin | 9.2% | 9.8% | 2.7% | 7.1% | 1.2% | |||||||||||||||||
| Add: Share-based compensation expense | 1,831 | 1,389 | 902 | 5,364 | 3,872 | |||||||||||||||||
| Add: Amortization of intangible assets | 2,971 | 2,998 | 3,421 | 11,939 | 13,368 | |||||||||||||||||
| Non-GAAP income from operations | $ | 25,370 | $ | 24,772 | $ | 8,322 | $ | 71,177 | $ | 23,425 | ||||||||||||
| Non-GAAP operating margin | 11.4% | 12.0% | 5.7% | 9.3% | 4.4% | |||||||||||||||||
| Reconciliation of provision for income taxes: | ||||||||||||||||||||||
| GAAP provision for income taxes | $ | 3,758 | $ | 3,371 | $ | 294 | $ | 9,914 | $ | 2,444 | ||||||||||||
| GAAP effective tax rate | -58.3% | 29.8% | -25.2% | 467.9% | -14.0% | |||||||||||||||||
| Tax effect of adjustments to GAAP results | (317 | ) | (376 | ) | (357 | ) | (1,395 | ) | (1,365 | ) | ||||||||||||
| Non-GAAP provision for income taxes | $ | 4,075 | $ | 3,747 | $ | 651 | $ | 11,309 | $ | 3,809 | ||||||||||||
| Non-GAAP effective tax rate | 19.0% | 21.5% | 20.6% | 23.6% | -1380.1% | |||||||||||||||||
| Reconciliation of net income (loss) per share (diluted) | ||||||||||||||||||||||
| and diluted per share amounts: | ||||||||||||||||||||||
| GAAP net income (loss) | $ | (10,209 | ) | $ | 7,958 | $ | (1,461 | ) | $ | (7,795 | ) | $ | (19,960 | ) | ||||||||
| Adjustments to GAAP net income: | ||||||||||||||||||||||
| Share-based compensation | 1,831 | 1,389 | 902 | 5,364 | 3,872 | |||||||||||||||||
| Amortization of intangible assets | 2,971 | 2,998 | 3,421 | 11,939 | 13,368 | |||||||||||||||||
| Amortization of debt discount related to warrants | 1,214 | 1,733 | - | 5,127 | - | |||||||||||||||||
| Loss on early debt repayment | 6,743 | - | - | 6,743 | - | |||||||||||||||||
| Loss on extinguishment of LT debt | 15,194 | - | - | 16,579 | - | |||||||||||||||||
| Tax effect of items excluded from non-GAAP results | (317 | ) | (376 | ) | (357 | ) | (1,395 | ) | (1,365 | ) | ||||||||||||
| Non-GAAP net income (loss) | $ | 17,427 | $ | 13,702 | $ | 2,505 | $ | 36,562 | $ | (4,085 | ) | |||||||||||
| Weighted average shares outstanding for calculation | ||||||||||||||||||||||
| of non-GAAP income per share (diluted) | 22,011 | 15,955 | 13,865 | 16,171 | 13,841 | |||||||||||||||||
| Non-GAAP net income per share (diluted) | $ | 0.79 | $ | 0.86 | $ | 0.18 | $ | 2.26 | $ | (0.30 | ) | |||||||||||
| Pro forma weighted average shares outstanding for | ||||||||||||||||||||||
| computing pro forma diluted per-share calculation* | 22,050 | |||||||||||||||||||||
| Pro forma non-GAAP net income per share (diluted) | $ | 0.62 | ||||||||||||||||||||
| * Assuming IPO closing shares (6,095) on May 30, 2017 were issued and outstanding as of the beginning of Q3'17. | ||||||||||||||||||||||
| SMART Global Holdings, Inc. | |||||||||||||||||||||
| and Subsidiaries | |||||||||||||||||||||
| Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA | |||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||
| August 25, 2017 | May 26, 2017 | August 26, 2016 | August 25, 2017 | August 26, 2016 | |||||||||||||||||
| GAAP net income (loss) | $ | (10,209 | ) | $ | 7,958 | $ | (1,461 | ) | $ | (7,795 | ) | $ | (19,960 | ) | |||||||
| Share-based compensation expense | 1,831 | 1,389 | 902 | 5,364 | 3,872 | ||||||||||||||||
| Amortization of intangible assets | 2,971 | 2,998 | 3,421 | 11,939 | 13,368 | ||||||||||||||||
| Interest expense, net | 6,132 | 8,294 | 6,310 | 29,204 | 25,575 | ||||||||||||||||
| Provision for income tax | 3,758 | 3,371 | 294 | 9,914 | 2,444 | ||||||||||||||||
| Depreciation | 4,869 | 4,848 | 4,668 | 21,300 | 18,111 | ||||||||||||||||
| Management advisory fees | — | 1,000 | 1,000 | 3,000 | 4,001 | ||||||||||||||||
| Debt extension costs* | — | — | — | 1,745 | — | ||||||||||||||||
| Loss on early debt repayment ** | 6,743 | — | — | 6,743 | — | ||||||||||||||||
| Loss on extinguishment of LT debt *** | 15,194 | — | — | 16,579 | — | ||||||||||||||||
| Restructuring | — | — | (8 | ) | 457 | 1,135 | |||||||||||||||
| Special retention bonuses | — | — | 265 | 25 | 1,611 | ||||||||||||||||
| Valuation adjustment related to prepaid | |||||||||||||||||||||
| state value-added taxes | — | — | 908 | — | 908 | ||||||||||||||||
| Investment advisory fees | — | — | — | 540 | — | ||||||||||||||||
| Obsolete inventory related to restructuring | — | — | — | 372 | — | ||||||||||||||||
| Misappropriated product shipment | — | — | — | — | 695 | ||||||||||||||||
| Adjusted EBITDA | $ | 31,289 | $ | 29,858 | $ | 16,299 | $ | 99,387 | $ | 51,760 | |||||||||||
| * 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. | |||||||||||||||||||||
| ** Loss on early payment of term loan for principal amount of $61.1 million in June 2017 related to IPO. | |||||||||||||||||||||
| *** Consists of $15.2 million loss on extinguishment of long-term debt for principal payment of $151.0 million in August 2017 | |||||||||||||||||||||
| and $1.4 million loss on a February 2017 extinguishment. | |||||||||||||||||||||
| SMART Global Holdings, Inc. | ||||||||||||||||||
| and Subsidiaries | ||||||||||||||||||
| Consolidated Balance Sheets | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| August 25 | May 26, | August 26, | ||||||||||||||||
| 2017 | 2017 | 2016 | ||||||||||||||||
| Assets | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 22,436 | $ | 22,341 | $ | 58,634 | ||||||||||||
| Accounts receivable, net | 183,303 | 174,453 | 141,036 | |||||||||||||||
| Inventories | 127,135 | 135,489 | 103,066 | |||||||||||||||
| Prepaid expenses and other current assets | 14,115 | 15,699 | 16,522 | |||||||||||||||
| Total current assets | 346,989 | 347,982 | 319,258 | |||||||||||||||
| Property and equipment, net | 55,182 | 52,006 | 57,600 | |||||||||||||||
| Other noncurrent assets | 26,728 | 21,936 | 19,937 | |||||||||||||||
| Intangible assets, net | 5,107 | 8,001 | 16,884 | |||||||||||||||
| Goodwill | 46,022 | 45,360 | 44,976 | |||||||||||||||
| Total assets | $ | 480,028 | $ | 475,285 | $ | 458,655 | ||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable | $ | 189,717 | $ | 210,633 | $ | 197,976 | ||||||||||||
| Accrued liabilities | 27,316 | 22,130 | 14,071 | |||||||||||||||
| Current portion of long-term debt | 22,841 | 13,024 | 17,116 | |||||||||||||||
| Total current liabilities | 239,874 | 245,787 | 229,163 | |||||||||||||||
| Long-term debt | 154,450 | 197,910 | 225,587 | |||||||||||||||
| Deferred tax liabilities | 1,439 | 1,769 | 2,677 | |||||||||||||||
| Other long-term liabilities | 1,869 | 2,437 | 2,465 | |||||||||||||||
| Total liabilities | $ | 397,632 | $ | 447,903 | $ | 459,892 | ||||||||||||
| Shareholders’ equity (deficit): | ||||||||||||||||||
| Ordinary shares | 653 | 420 | 416 | |||||||||||||||
| Additional paid-in capital | 232,162 | 170,502 | 145,284 | |||||||||||||||
| Accumulated other comprehensive loss | (143,210 | ) | (146,540 | ) | (147,523 | ) | ||||||||||||
| Retained earnings (accumulated deficit) | (7,209 | ) | 3,000 | 586 | ||||||||||||||
| Total shareholders’ equity (deficit) | 82,396 | 27,382 | (1,237 | ) | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 480,028 | $ | 475,285 | $ | 458,655 | ||||||||||||
| SMART Global Holdings, Inc. | ||||||||||||||||||||||||||
| and Subsidiaries | ||||||||||||||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Fiscal Year Ended | |||||||||||||||||||||||||
| August 25, 2017 | May 26, 2017 | August 26, 2016 | August 25, 2017 | August 26, 2016 | ||||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||||||
| Net income (loss) | $ | (10,209 | ) | $ | 7,958 | $ | (1,461 | ) | $ | (7,795 | ) | $ | (19,960 | ) | ||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by | ||||||||||||||||||||||||||
| (used in) operating activities: | ||||||||||||||||||||||||||
| Depreciation and amortization | 7,839 | 7,846 | 8,090 | 33,238 | 31,480 | |||||||||||||||||||||
| Share-based compensation | 1,831 | 1,389 | 902 | 5,364 | 3,872 | |||||||||||||||||||||
| Provision for doubtful accounts receivable and sales returns | (82 | ) | 205 | 34 | (51 | ) | 18 | |||||||||||||||||||
| Deferred income tax benefit | (1,194 | ) | (84 | ) | 270 | (2,389 | ) | (1,417 | ) | |||||||||||||||||
| (Gain) loss on disposal of property and equipment | 223 | — | 2 | 352 | (55 | ) | ||||||||||||||||||||
| Extinguishment loss on long-term debt | 15,194 | — | — | 16,580 | — | |||||||||||||||||||||
| Loss on early debt payment | 6,744 | — | — | 6,744 | — | |||||||||||||||||||||
| Amortization of debt issuance costs | 486 | 628 | 768 | 2,337 | 3,042 | |||||||||||||||||||||
| Amortization of debt original issuance discount | 106 | 119 | 419 | 766 | 1,654 | |||||||||||||||||||||
| Amortization of debt discount | 1,215 | 1,733 | — | 5,128 | — | |||||||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||||||||
| Accounts receivable | (6,910 | ) | (36,891 | ) | (9,147 | ) | (40,426 | ) | 44,922 | |||||||||||||||||
| Inventories | 9,333 | (4,833 | ) | 5,616 | (21,851 | ) | 31,326 | |||||||||||||||||||
| Prepaid expenses and other assets | (799 | ) | (735 | ) | 8,663 | (58 | ) | 11,007 | ||||||||||||||||||
| Accounts payable | (22,407 | ) | 27,525 | (15,595 | ) | (10,608 | ) | (86,588 | ) | |||||||||||||||||
| Accrued expenses and other liabilities | 4,639 | 3,846 | (3,811 | ) | 11,736 | (4,251 | ) | |||||||||||||||||||
| Net cash provided by (used in) operating activities | 6,009 | 8,706 | (5,250 | ) | (933 | ) | 15,050 | |||||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||||||||
| Capital expenditures and deposits on equipment | (7,499 | ) | (3,784 | ) | (3,849 | ) | (18,678 | ) | (13,844 | ) | ||||||||||||||||
| Restricted cash | — | — | 13 | — | 194 | |||||||||||||||||||||
| Proceeds from sale of property and equipment | 184 | 425 | 36 | 651 | 281 | |||||||||||||||||||||
| Net cash used in investing activities | (7,315 | ) | (3,359 | ) | (3,800 | ) | (18,027 | ) | (13,369 | ) | ||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||||||
| Proceeds from long-term debt borrowing | — | — | 592 | — | 5,771 | |||||||||||||||||||||
| Long-term debt payment | (2,009 | ) | (5,954 | ) | (4,246 | ) | (19,698 | ) | (16,694 | ) | ||||||||||||||||
| 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 | 156,962 | — | — | 156,962 | — | |||||||||||||||||||||
| Fees paid for revolving line of credit refinancing | (3,167 | ) | — | — | (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 | ) | (200 | ) | 6 | (1,149 | ) | — | ||||||||||||||||||
| Proceeds from borrowings under revolving line of credit | 119,500 | 123,000 | 106,500 | 457,750 | 279,200 | |||||||||||||||||||||
| Repayments of borrowings under revolving line of credit | (119,500 | ) | (123,000 | ) | (106,500 | ) | (457,750 | ) | (279,200 | ) | ||||||||||||||||
| Proceeds from issuance of ordinary shares from share option exercise | 58 | 348 | 92 | 406 | 133 | |||||||||||||||||||||
| Tax payments due upon issuance of oridnary shares for release of | ||||||||||||||||||||||||||
| restricted stock units | (763 | ) | — | — | (763 | ) | — | |||||||||||||||||||
| Repurchase of ordinary shares | — | — | — | — | (124 | ) | ||||||||||||||||||||
| Net cash used in financing activities | 1,504 | (5,806 | ) | (3,556 | ) | (16,975 | ) | (10,914 | ) | |||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (103 | ) | (541 | ) | (1,936 | ) | (263 | ) | (227 | ) | ||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 95 | (1,000 | ) | (14,542 | ) | (36,198 | ) | (9,460 | ) | |||||||||||||||||
| Cash and cash equivalents at beginning of period | 22,341 | 23,341 | 73,176 | 58,634 | 68,094 | |||||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 22,436 | $ | 22,341 | $ | 58,634 | $ | 22,436 | $ | 58,634 | ||||||||||||||||
Investor Contact:
Suzanne Schmidt
Investor Relations for SMART Global Holdings, Inc.
(510) 360-8596
ir@smartm.com