Smart Global Announces 4Q Results; Beats Estimates; Stock Soars

Editor’s Note:  Smart Global Holdings is the company that acquired Cree LED. As of this writing the stock price is 51.39+7.58 (+17.30%)

MILPITAS, Calif., October 12, 2021–(BUSINESS WIRE)–SMART Global Holdings, Inc. (“SGH” or the “Company”) (Nasdaq: SGH) today reported financial results for the fourth quarter and full year fiscal 2021.

Fourth Quarter Fiscal 2021 Financial Highlights

  • Net sales of $467.7 million, up 57% from the year ago quarter
  • GAAP gross margin of 25.2%, up 620 basis points versus the year ago quarter
  • Non-GAAP gross margin of 26.4%, up 690 basis points versus the year ago quarter
  • GAAP EPS of $0.78, up 160% versus the year ago quarter
  • Non-GAAP EPS of $2.16, up 163% versus the year ago quarter

Fiscal 2021 Highlights

  • Net sales of $1.5 billion, up 34% versus the prior year
  • GAAP gross margin of 20.5%, up 120 basis points versus the prior year
  • Non-GAAP gross margin of 22.2%, up 240 basis points versus the prior year
  • GAAP EPS of $0.83 compared with ($0.05) in the prior year
  • Non-GAAP EPS of $5.22, up 102% versus the prior year

“Fiscal 2021 has been a transformative year for SGH. We are proud of the team’s many accomplishments across each of our lines of business, Intelligent Platform Solutions, Memory Solutions, and LED solutions,” commented SGH CEO Mark Adams. “As we enter fiscal 2022, we believe we have the right platform to continue to execute our growth and diversification strategy while increasing value for our stakeholders.”

Fourth Quarter Fiscal 2021 and Historical Financial Data

Quarterly Financial Results GAAP (1) Non-GAAP (2)
(In millions, except per share amounts) Q4 FY21 Q3 FY21 Q4 FY20 Q4 FY21 Q3 FY21 Q4 FY20
Net sales $ 467.7 $ 437.7 $ 297.0 $ 467.7 $ 437.7 $ 297.0
Gross profit $ 117.8 $ 84.5 $ 56.3 $ 123.6 $ 95.7 $ 57.8
Operating income $ 31.7 $ 2.9 $ 17.2 $ 66.6 $ 43.3 $ 28.4
Net income (loss) (3) $ 20.7 $ (7.2 ) $ 7.5 $ 55.1 $ 35.5 $ 20.4
Diluted earnings (loss) per share (EPS) $ 0.78 $ (0.30 ) $ 0.30 $ 2.16 $ 1.39 $ 0.82
Annual Financial Results GAAP (1) Non-GAAP (2)
(In millions, except per share amounts) FY21 FY20 FY21 FY20
Net sales $ 1,501.1 $ 1,122.4 $ 1,501.1 $ 1,122.4
Gross profit $ 308.4 $ 216.4 $ 332.6 $ 222.3
Operating income $ 55.2 $ 41.3 $ 160.8 $ 84.2
Net income (loss) (3) $ 21.3 $ (1.1 ) $ 132.2 $ 63.7
Diluted earnings (loss) per share (EPS) $ 0.83 $ (0.05 ) $ 5.22 $ 2.59
(1) GAAP represents U.S. Generally Accepted Accounting Principles.
(2) Please refer to the “Non-GAAP Information” section and the “Reconciliation of Non-GAAP Financial Measures” tables below for further detail on the non-GAAP financial reporting referenced above and a reconciliation of such measures to our nearest GAAP measures.
(3) Refers to net income (loss) attributable to SGH.

Business Outlook

GAAP Non-GAAP
Outlook Adjustments Outlook
Net sales $440 to $480 million $440 to $480 million
Gross Margin 24% to 26% 1% (A) 25% to 27%
Diluted EPS $1.20 ± $0.20 $0.80 (A,B,C) $2.00 ± $0.20
Diluted shares 27 million (1) million 26 million
Non-GAAP adjustments (in millions):
(A) Share-based compensation and amortization of intangible assets– cost of sales $ 6
(B) Share-based compensation and amortization of intangible assets– R&D and SG&A $ 11
(C) Convertible debt discount OID and fees, integration costs and other adjustments $ 3
$ 20

As of October 12, 2021, SGH is providing the following financial outlook for its first quarter of fiscal 2022:

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