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SGH Reports Fourth Quarter and Full Year Fiscal 2022 Financial Results

Achieved Record Net Sales and Record Gross Margins in Full Year Fiscal 2022

SMART Global Holdings, Inc. (“SGH” or the “Company”) (NASDAQ: SGH) today reported financial results for the fourth quarter and full year fiscal 2022. Per share measures for all periods reflect the effect of the February 2022 two-for-one share split.

Fiscal 2022 Highlights

  • Net sales of $1.82 billion, up 21% versus fiscal 2021
  • GAAP gross margin of 24.9%, up 440 basis points versus fiscal 2021
  • Non-GAAP gross margin of 25.9%, up 370 basis points versus fiscal 2021
  • GAAP EPS of $1.22 versus GAAP EPS of $0.41 for fiscal 2021
  • Non-GAAP EPS of $3.62 versus non-GAAP EPS of $2.61 for fiscal 2021
  • Repurchased 2.63 million shares for $50.0 million in cash

Fourth Quarter Fiscal 2022 Highlights

  • Net sales of $438 million, down 6% versus the year-ago quarter
  • GAAP gross margin of 23.7%, down 150 basis points versus the year-ago quarter
  • Non-GAAP gross margin of 24.6%, down 180 basis points versus the year-ago quarter
  • GAAP EPS of $0.40 versus $0.39 in the year-ago quarter
  • Non-GAAP EPS of $0.80 versus $1.08 in the year-ago quarter
  • Repurchased 2.18 million shares for $39.8 million in cash

“SGH delivered solid operating performance in the fourth quarter of fiscal 2022, capping off a record year of revenue, gross margins, adjusted EBITDA and non-GAAP earnings per share, as we continue our transformation into a diversified and growth-oriented company,” commented CEO Mark Adams. “As we enter fiscal 2023, we remain focused on execution as we manage through macroeconomic uncertainties. As evidenced by our acquisition of Stratus Technologies, we continue to invest in our future, and with multiple secular growth trends, we are positioned to drive attractive long-term returns for our shareholders.”

Annual Financial Results

 

GAAP (1)

 

Non-GAAP (2)

(in millions, except per share amounts)

FY22

 

FY21

 

FY22

 

FY21

Net sales

$ 1,819.4

 

$ 1,501.1

 

$ 1,819.4

 

$ 1,501.1

Gross profit

453.2

 

308.4

 

470.7

 

332.6

Operating income

114.5

 

55.2

 

227.6

 

160.8

Net income attributable to SGH

66.6

 

21.3

 

190.2

 

132.2

Diluted earnings per share (3)

$ 1.22

 

$ 0.41

 

$ 3.62

 

$ 2.61

Quarterly Financial Results

 

GAAP (1)

 

Non-GAAP (2)

(in millions, except per share amounts)

Q4 FY22

 

Q3 FY22

 

Q4 FY21

 

Q4 FY22

 

Q3 FY22

 

Q4 FY21

Net sales

$ 437.7

 

$ 462.5

 

$ 467.7

 

$ 437.7

 

$ 462.5

 

$ 467.7

Gross profit

103.8

 

114.5

 

117.8

 

107.8

 

118.9

 

123.6

Operating income

27.6

 

35.3

 

31.7

 

46.8

 

54.3

 

66.6

Net income attributable to SGH

20.0

 

24.1

 

20.7

 

40.4

 

45.9

 

55.1

Diluted earnings per share (3)

$ 0.40

 

$ 0.44

 

$ 0.39

 

$ 0.80

 

$ 0.87

 

$ 1.08

(1)

GAAP represents U.S. Generally Accepted Accounting Principles.

(2)

Non-GAAP represents GAAP excluding the impact of certain activities. Further information regarding our use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures is included within this press release.

(3)

Diluted earnings per share reflect the impact of the share dividend paid in February 2022.

Business Outlook

As of October 4, 2022, SGH is providing the following financial outlook for its first quarter of fiscal 2023:

 

GAAP

Outlook

Adjustments

Non-GAAP

Outlook

Net sales

$425 to $475 million

 

$425 to $475 million

Gross margin

24.5% to 26.5%

1%

(A)

25.5% to 27.5%

Diluted earnings per share

$0.14 +/- $0.15

$0.46

(A)(B)(C)

$0.60 +/- $0.15

Diluted shares

51 million

 

51 million

Non-GAAP adjustments (in millions)

 

 

(A) Share-based compensation and amortization of acquisition-related intangibles included in cost of sales

$

4

 

(B) Share-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A

 

11

 

(C) Amortization of debt discount and other costs

 

8

 

 

$

23

 

Our outlook incorporates the effects of the Company’s recent acquisition of Stratus Technologies, Inc. (“Stratus”). However, the Company has not completed its assessment of the provisional fair values of the assets and liabilities, and therefore, our GAAP outlook does not reflect the impact of any differences between the carrying values and fair values of Stratus’ assets or liabilities, including the impact of amortization of any identifiable intangible assets.

Fourth Quarter Fiscal 2022 Earnings Conference Call and Webcast Details

SGH will hold a conference call and webcast to discuss the fourth quarter and full year fiscal 2022 results and related matters at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Tuesday, October 4, 2022. Interested parties may access the call by dialing +1-844-200-6205 in the U.S. or +1-929-526-1599 from international locations using access code 284484. The webcast link is located on the SGH Investor Relations section of the website at https://sghcorp.com. We will also post the presentation to our website prior to the call.

Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on the SGH Investor Relations website for approximately seven days.

Use of Forward-Looking Statements

This press 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 SGH (including the business outlook for the next fiscal quarter) and statements regarding growth drivers in SGH’s industries and markets. These forward-looking statements are based on current expectations and preliminary assumptions that are subject to factors and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside SGH’s control, including, among others: issues, delays or complications in integrating the operations of Stratus; global business and economic conditions and growth trends in technology industries, our customer markets and various geographic regions; uncertainties in the geopolitical environment; uncertainties in the global macroeconomic environment; disruptions in our operations or our supply chain as a result of COVID-19 pandemic or otherwise; 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, the failure to successfully integrate and operate them, or customers’ negative reactions to them; 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; 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 or in the LED market; 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; 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 other factors and risks detailed in SGH’s filings with the U.S. Securities and Exchange Commission, which include SGH’s most recent reports on Form 8-K, Form 10-K and Form 10-Q, including SGH’s future filings.

Such factors and risks as outlined above and in such filings do not constitute all factors and risks that could cause actual results of SGH to be materially different from our forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of today, and SGH 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.

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, changes in the fair value of contingent consideration, (gains) losses from changes in currency exchange rates, COVID-19 expenses, amortization of debt discount and other costs and other infrequent or unusual items. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies is reflected in our 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, changes in the fair value of contingent consideration, COVID-19 expenses and other infrequent or unusual items.

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 our 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 in, 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, our companies are united by a drive to raise the bar, execute with discipline and focus on what’s next for the technologies that support and advance the world. Across computing, memory and LED lighting solutions, we build long-term strategic partnerships with our customers.

Backed by a proven leadership team, we operate with excellence around the globe while unlocking new avenues of growth for our business and industry.

Learn more about us at SGHcorp.com.

SMART Global Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

 

 

Three Months Ended

 

Year Ended

 

Aug 26,

2022

 

May 27,

2022

 

Aug 27,

2021

 

Aug 26,

2022

 

Aug 27,

2021

Net sales:

 

 

 

 

 

 

 

 

 

Memory Solutions

$

209,849

 

 

$

265,850

 

$

247,282

 

 

$

975,181

 

$

931,818

 

Intelligent Platform Solutions

 

144,730

 

 

 

95,345

 

 

97,614

 

 

 

440,986

 

 

344,757

 

LED Solutions

 

83,118

 

 

 

101,345

 

 

122,812

 

 

 

403,185

 

 

224,567

 

Total net sales

 

437,697

 

 

 

462,540

 

 

467,708

 

 

 

1,819,352

 

 

1,501,142

 

Cost of sales

 

333,854

 

 

 

348,077

 

 

349,915

 

 

 

1,366,132

 

 

1,192,762

 

Gross profit

 

103,843

 

 

 

114,463

 

 

117,793

 

 

 

453,220

 

 

308,380

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

20,607

 

 

 

20,298

 

 

16,740

 

 

 

77,356

 

 

49,274

 

Selling, general and administrative

 

55,635

 

 

 

58,732

 

 

53,314

 

 

 

220,031

 

 

171,509

 

Change in fair value of contingent consideration

 

 

 

 

124

 

 

16,000

 

 

 

41,324

 

 

32,400

 

Total operating expenses

 

76,242

 

 

 

79,154

 

 

86,054

 

 

 

338,711

 

 

253,183

 

Operating income

 

27,601

 

 

 

35,309

 

 

31,739

 

 

 

114,509

 

 

55,197

 

 

 

 

 

 

 

 

 

 

 

Non-operating (income) expense:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

6,491

 

 

 

5,110

 

 

5,032

 

 

 

21,169

 

 

17,600

 

Other non-operating (income) expense

 

1,267

 

 

 

550

 

 

(1,563

)

 

 

4,837

 

 

(375

)

Total non-operating (income) expense

 

7,758

 

 

 

5,660

 

 

3,469

 

 

 

26,006

 

 

17,225

 

Income before taxes

 

19,843

 

 

 

29,649

 

 

28,270

 

 

 

88,503

 

 

37,972

 

 

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

(584

)

 

 

5,154

 

 

6,981

 

 

 

19,911

 

 

15,466

 

Net income

 

20,427

 

 

 

24,495

 

 

21,289

 

 

 

68,592

 

 

22,506

 

Net income attributable to noncontrolling interest

 

468

 

 

 

382

 

 

639

 

 

 

2,035

 

 

1,196

 

Net income attributable to SGH

$

19,959

 

 

$

24,113

 

$

20,650

 

 

$

66,557

 

$

21,310

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.41

 

 

$

0.48

 

$

0.42

 

 

$

1.35

 

$

0.44

 

Diluted

$

0.40

 

 

$

0.44

 

$

0.39

 

 

$

1.22

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

Basic

 

49,238

 

 

 

50,095

 

 

48,605

 

 

 

49,467

 

 

48,558

 

Diluted

 

50,504

 

 

 

54,998

 

 

52,835

 

 

 

54,443

 

 

51,584

 

Earnings per share and shares used in per share calculations reflect the impact of the share dividend.

SMART Global Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(In thousands)

 

 

Three Months Ended

 

Year Ended

 

Aug 26,

2022

 

May 27,

2022

 

Aug 27,

2021

 

Aug 26,

2022

 

Aug 27,

2021

GAAP gross profit

$

103,843

 

 

$

114,463

 

 

$

117,793

 

 

$

453,220

 

 

$

308,380

 

Share-based compensation expense

 

1,637

 

 

 

1,724

 

 

 

1,786

 

 

 

6,740

 

 

 

4,593

 

Amortization of acquisition-related intangibles

 

2,367

 

 

 

2,696

 

 

 

3,997

 

 

 

10,741

 

 

 

8,228

 

Flow-through of inventory step up

 

 

 

 

 

 

 

 

 

 

 

 

 

7,090

 

Out of period import tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

4,345

 

Non-GAAP gross profit

$

107,847

 

 

$

118,883

 

 

$

123,576

 

 

$

470,701

 

 

$

332,636

 

 

 

 

 

 

 

 

 

 

 

GAAP operating expenses

$

76,242

 

 

$

79,154

 

 

$

86,054

 

 

$

338,711

 

 

$

253,183

 

Share-based compensation expense

 

(8,187

)

 

 

(8,823

)

 

 

(7,224

)

 

 

(33,379

)

 

 

(29,284

)

Amortization of acquisition-related intangibles

 

(3,247

)

 

 

(3,247

)

 

 

(3,248

)

 

 

(12,988

)

 

 

(12,027

)

Acquisition and integration expenses

 

(3,620

)

 

 

(2,181

)

 

 

(543

)

 

 

(7,090

)

 

 

(5,314

)

Change in fair value of contingent consideration

 

 

 

 

(124

)

 

 

(16,000

)

 

 

(41,324

)

 

 

(32,400

)

Other

 

(115

)

 

 

(168

)

 

 

(2,052

)

 

 

(858

)

 

 

(2,316

)

Non-GAAP operating expenses

$

61,073

 

 

$

64,611

 

 

$

56,987

 

 

$

243,072

 

 

$

171,842

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

$

27,601

 

 

$

35,309

 

 

$

31,739

 

 

$

114,509

 

 

$

55,197

 

Share-based compensation expense

 

9,824

 

 

 

10,547

 

 

 

9,010

 

 

 

40,119

 

 

 

33,877

 

Amortization of acquisition-related intangibles

 

5,614

 

 

 

5,943

 

 

 

7,245

 

 

 

23,729

 

 

 

20,255

 

Flow-through of inventory step up

 

 

 

 

 

 

 

 

 

 

 

 

 

7,090

 

Out of period import tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

4,345

 

Acquisition and integration expenses

 

3,620

 

 

 

2,181

 

 

 

543

 

 

 

7,090

 

 

 

5,314

 

Change in fair value of contingent consideration

 

 

 

 

124

 

 

 

16,000

 

 

 

41,324

 

 

 

32,400

 

Other

 

115

 

 

 

168

 

 

 

2,052

 

 

 

858

 

 

 

2,316

 

Non-GAAP operating income

$

46,774

 

 

$

54,272

 

 

$

66,589

 

 

$

227,629

 

 

$

160,794

 

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to SGH

$

19,959

 

 

$

24,113

 

 

$

20,650

 

 

$

66,557

 

 

$

21,310

 

Share-based compensation expense

 

9,824

 

 

 

10,547

 

 

 

9,010

 

 

 

40,119

 

 

 

33,877

 

Amortization of acquisition-related intangibles

 

5,614

 

 

 

5,943

 

 

 

7,245

 

 

 

23,729

 

 

 

20,255

 

Flow-through of inventory step up

 

 

 

 

 

 

 

 

 

 

 

 

 

7,090

 

Out of period import tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

4,345

 

Acquisition and integration expenses

 

3,620

 

 

 

2,181

 

 

 

543

 

 

 

7,090

 

 

 

5,314

 

Change in fair value of contingent consideration

 

 

 

 

124

 

 

 

16,000

 

 

 

41,324

 

 

 

32,400

 

Amortization of debt discount and other costs

 

2,788

 

 

 

2,705

 

 

 

2,172

 

 

 

9,999

 

 

 

8,419

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

653

 

 

 

 

Foreign currency (gains) losses

 

1,212

 

 

 

641

 

 

 

(476

)

 

 

4,728

 

 

 

719

 

Other

 

114

 

 

 

168

 

 

 

1,051

 

 

 

859

 

 

 

2,054

 

Estimated tax effects of above and other tax adjustments

 

(2,696

)

 

 

(513

)

 

 

(1,057

)

 

 

(4,835

)

 

 

(3,572

)

Non-GAAP net income attributable to SGH

$

40,435

 

 

$

45,909

 

 

$

55,138

 

 

$

190,223

 

 

$

132,211

 

SMART Global Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(In thousands, except per share amounts)

 

 

Three Months Ended

 

Year Ended

 

Aug 26,

2022

 

May 27,

2022

 

Aug 27,

2021

 

Aug 26,

2022

 

Aug 27,

2021

Weighted-average shares outstanding - Diluted:

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding

 

50,504

 

 

 

54,998

 

 

 

52,835

 

 

 

54,443

 

 

 

51,584

 

Adjustment for capped calls

 

 

 

 

(2,063

)

 

 

(1,734

)

 

 

(1,851

)

 

 

(897

)

Non-GAAP weighted-average shares outstanding

 

50,504

 

 

 

52,935

 

 

 

51,101

 

 

 

52,592

 

 

 

50,687

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

$

0.40

 

 

$

0.44

 

 

$

0.39

 

 

$

1.22

 

 

$

0.41

 

Effect of adjustments

 

0.40

 

 

 

0.43

 

 

 

0.69

 

 

 

2.40

 

 

 

2.20

 

Non-GAAP diluted earnings per share

$

0.80

 

 

$

0.87

 

 

$

1.08

 

 

$

3.62

 

 

$

2.61

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to SGH

$

19,959

 

 

$

24,113

 

 

$

20,650

 

 

$

66,557

 

 

$

21,310

 

Interest expense, net

 

6,491

 

 

 

5,110

 

 

 

5,032

 

 

 

21,169

 

 

 

17,600

 

Income tax provision (benefit)

 

(584

)

 

 

5,154

 

 

 

6,981

 

 

 

19,911

 

 

 

15,466

 

Depreciation expense and amortization of intangible assets

 

16,446

 

 

 

16,571

 

 

 

16,643

 

 

 

64,907

 

 

 

49,111

 

Share-based compensation expense

 

9,824

 

 

 

10,547

 

 

 

9,010

 

 

 

40,119

 

 

 

33,877

 

Flow-through of inventory step up

 

 

 

 

 

 

 

 

 

 

 

 

 

7,090

 

Out of period import tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

4,345

 

Acquisition and integration expenses

 

3,620

 

 

 

2,181

 

 

 

543

 

 

 

7,090

 

 

 

5,314

 

Change in fair value of contingent consideration

 

 

 

 

124

 

 

 

16,000

 

 

 

41,324

 

 

 

32,400

 

Other

 

114

 

 

 

168

 

 

 

1,051

 

 

 

1,512

 

 

 

1,314

 

Adjusted EBITDA

$

55,870

 

 

$

63,968

 

 

$

75,910

 

 

$

262,589

 

 

$

187,827

 

Weighted average shares outstanding and diluted earnings per share reflect the impact of the share dividend.

SMART Global Holdings, Inc.

Consolidated Balance Sheets

(In thousands)

 

As of

August 26,

2022

 

August 27,

2021

Assets

 

 

 

Cash and cash equivalents

$

363,065

 

 

$

222,986

 

Accounts receivable, net

 

410,323

 

 

 

313,393

 

Inventories

 

323,084

 

 

 

363,601

 

Other current assets

 

55,393

 

 

 

50,838

 

Total current assets

 

1,151,865

 

 

 

950,818

 

Property and equipment, net

 

153,935

 

 

 

156,266

 

Operating lease right-of-use assets

 

77,399

 

 

 

40,869

 

Intangible assets, net

 

77,812

 

 

 

101,073

 

Goodwill

 

74,009

 

 

 

74,255

 

Other noncurrent assets

 

37,044

 

 

 

21,517

 

Total assets

$

1,572,064

 

 

$

1,344,798

 

 

 

 

 

Liabilities and Equity

 

 

 

Accounts payable and accrued expenses

$

413,354

 

 

$

484,107

 

Current debt

 

12,025

 

 

 

25,354

 

Other current liabilities

 

90,161

 

 

 

74,337

 

Total current liabilities

 

515,540

 

 

 

583,798

 

Long-term debt

 

591,389

 

 

 

340,484

 

Noncurrent operating lease liabilities

 

71,754

 

 

 

32,419

 

Acquisition-related contingent consideration

 

 

 

 

60,500

 

Other noncurrent liabilities

 

14,835

 

 

 

8,673

 

Total liabilities

 

1,193,518

 

 

 

1,025,874

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

SMART Global Holdings shareholders’ equity:

 

 

 

Ordinary shares

 

1,586

 

 

 

1,504

 

Additional paid-in-capital

 

448,112

 

 

 

396,120

 

Retained earnings

 

251,344

 

 

 

184,787

 

Treasury shares

 

(107,776

)

 

 

(50,545

)

Accumulated other comprehensive income (loss)

 

(221,655

)

 

 

(221,615

)

Total SGH shareholders’ equity

 

371,611

 

 

 

310,251

 

Noncontrolling interest in subsidiary

 

6,935

 

 

 

8,673

 

Total equity

 

378,546

 

 

 

318,924

 

Total liabilities and equity

$

1,572,064

 

 

$

1,344,798

 

SMART Global Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

Three Months Ended

 

Year Ended

 

August 26,

2022

 

May 27,

2022

 

August 27,

2021

 

August 26,

2022

 

August 27,

2021

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

$

20,427

 

 

$

24,495

 

 

$

21,289

 

 

$

68,592

 

 

$

22,506

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation expense and amortization of intangible assets

 

16,446

 

 

 

16,571

 

 

 

16,643

 

 

 

64,907

 

 

 

49,111

 

Amortization of debt discount and issuance costs

 

2,787

 

 

 

2,706

 

 

 

2,295

 

 

 

10,263

 

 

 

8,798

 

Share-based compensation expense

 

9,824

 

 

 

10,547

 

 

 

9,010

 

 

 

40,119

 

 

 

33,877

 

Change in fair value of contingent consideration

 

 

 

 

124

 

 

 

16,000

 

 

 

41,324

 

 

 

32,400

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

653

 

 

 

 

Other

 

54

 

 

 

(47

)

 

 

341

 

 

 

695

 

 

 

829

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(56,019

)

 

 

34,089

 

 

 

(35,985

)

 

 

(97,509

)

 

 

(51,440

)

Inventories

 

39,783

 

 

 

(26,531

)

 

 

(71,396

)

 

 

39,667

 

 

 

(137,889

)

Other assets

 

(3,422

)

 

 

(8,376

)

 

 

(724

)

 

 

(1,353

)

 

 

(9,943

)

Accounts payable and accrued expenses and other liabilities

 

(7,564

)

 

 

(18,032

)

 

 

90,473

 

 

 

(61,738

)

 

 

208,108

 

Deferred income taxes, net

 

(1,410

)

 

 

1,168

 

 

 

76

 

 

 

(689

)

 

 

(3,007

)

Net cash provided by operating activities

 

20,906

 

 

 

36,714

 

 

 

48,022

 

 

 

104,931

 

 

 

153,350

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Capital expenditures and deposits on equipment

 

(8,855

)

 

 

(9,156

)

 

 

(7,563

)

 

 

(38,153

)

 

 

(47,580

)

Acquisition of business, net of cash acquired

 

 

 

 

 

 

 

(7,064

)

 

 

 

 

 

(35,677

)

Other

 

(71

)

 

 

(54

)

 

 

(1,143

)

 

 

(817

)

 

 

(921

)

Net cash used for investing activities

 

(8,926

)

 

 

(9,210

)

 

 

(15,770

)

 

 

(38,970

)

 

 

(84,178

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from debt

 

7,882

 

 

 

 

 

 

 

 

 

278,657

 

 

 

11,439

 

Proceeds from borrowing under line of credit

 

 

 

 

 

 

 

50,000

 

 

 

84,000

 

 

 

172,500

 

Proceeds from issuance of ordinary shares

 

291

 

 

 

4,389

 

 

 

1,766

 

 

 

12,140

 

 

 

14,923

 

Repayments of debt

 

(2,073

)

 

 

 

 

 

 

 

 

(127,073

)

 

 

 

Repayments of borrowings under line of credit

 

 

 

 

 

 

 

(50,000

)

 

 

(109,000

)

 

 

(147,500

)

Payments to acquire ordinary shares

 

(40,431

)

 

 

(13,905

)

 

 

(212

)

 

 

(57,231

)

 

 

(48,513

)

Distribution to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

(3,773

)

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

(3,841

)

 

 

 

Net cash provided by (used for) financing activities

 

(34,331

)

 

 

(9,516

)

 

 

1,554

 

 

 

73,879

 

 

 

2,849

 

 

 

 

 

 

 

 

 

 

 

Effect of changes in currency exchange rates on cash and cash equivalents

 

(1,910

)

 

 

3,570

 

 

 

188

 

 

 

239

 

 

 

154

 

Net increase (decrease) in cash and cash equivalents

 

(24,261

)

 

 

21,558

 

 

 

33,994

 

 

 

140,079

 

 

 

72,175

 

Cash and cash equivalents at beginning of period

 

387,326

 

 

 

365,768

 

 

 

188,992

 

 

 

222,986

 

 

 

150,811

 

Cash and cash equivalents at end of period

$

363,065

 

 

$

387,326

 

 

$

222,986

 

 

$

363,065

 

 

$

222,986

 

 

Contacts

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

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