falsedesktopSGH2020-11-27000156459021000281{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☐\tAccelerated filer\t☒\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\nEmerging growth company\t☐\t\t\n", "q10k_tbl_1": "\t\tPage\nPART I.\tFINANCIAL INFORMATION\t3\nItem 1.\tFinancial Statements (Unaudited)\t3\n\tCondensed Consolidated Balance Sheets\t3\n\tCondensed Consolidated Statements of Operations\t4\n\tCondensed Consolidated Statements of Comprehensive Loss\t5\n\tCondensed Consolidated Statements of Shareholders' Equity\t6\n\tCondensed Consolidated Statements of Cash Flows\t7\n\tNotes to Unaudited Condensed Consolidated Financial Statements\t8\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t40\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t44\nItem 4.\tControls and Procedures\t44\nPART II.\tOTHER INFORMATION\t46\nItem 1.\tLegal Proceedings\t46\nItem 1A.\tRisk Factors\t46\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t46\nItem 3.\tDefaults Upon Senior Securities\t46\nItem 4.\tMine Safety Disclosures\t46\nItem 6.\tExhibits\t47\nSignatures\t\t48\n", "q10k_tbl_2": "\tNovember 27\tAugust 28\n\t2020\t2020\nAssets\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t164097\t150811\nAccounts receivable net of allowances of $89 and $101 as of November 27 2020 and August 28 2020 respectively\t212886\t215918\nInventories\t147203\t162991\nPrepaid expenses and other current assets\t34337\t26990\nTotal current assets\t558523\t556710\nProperty and equipment net\t60045\t54705\nOperating lease right-of-use assets\t23050\t25013\nOther noncurrent assets\t18749\t20554\nIntangible assets net\t52258\t55671\nGoodwill\t72100\t73955\nTotal assets\t784725\t786608\nLiabilities and Shareholders' Equity\t\t\nCurrent liabilities:\t\t\nAccounts payable\t235557\t224660\nAccrued liabilities\t47011\t57829\nTotal current liabilities\t282568\t282489\nLong-term debt\t197634\t195573\nLong-term operating lease liabilities\t19524\t20829\nOther long-term liabilities\t6681\t5613\nTotal liabilities\t506407\t504504\nCommitments and contingencies (see Note 10)\t\t\nShareholders' equity:\t\t\nOrdinary shares $0.03 par value. Authorized 200000 shares; issued and outstanding 24759 and 24419 as of November 27 2020 and August 28 2020 respectively\t751\t737\nAdditional paid-in capital\t356827\t346131\nAccumulated other comprehensive loss\t(244764)\t(228241)\nRetained earnings\t165504\t163477\nTotal shareholders' equity\t278318\t282104\nTotal liabilities and shareholders' equity\t784725\t786608\n", "q10k_tbl_3": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nNet sales (1)\t291697\t272018\nCost of sales\t239053\t217698\nGross profit\t52644\t54320\nOperating expenses:\t\t\nResearch and development\t6964\t14886\nSelling general and administrative\t38056\t33553\nTotal operating expenses\t45020\t48439\nIncome from operations\t7624\t5881\nInterest expense net\t(3154)\t(4492)\nOther income (expense) net\t832\t(840)\nTotal other expense\t(2322)\t(5332)\nIncome before income taxes\t5302\t549\nProvision for income taxes\t3275\t325\nNet income\t2027\t224\nEarnings per share:\t\t\nBasic\t0.08\t0.01\nDiluted\t0.08\t0.01\nShares used in computing earnings per share:\t\t\nBasic\t24561\t23713\nDiluted\t25103\t24286\n", "q10k_tbl_4": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nNet income\t2027\t224\nOther comprehensive loss:\t\t\nForeign currency translation\t(16523)\t(10244)\nComprehensive loss\t(14496)\t(10020)\n", "q10k_tbl_5": "\t\t\t\tAccumulated\t\t\n\t\t\tAdditional\tother\t\tTotal\n\tOrdinary shares\t\tpaid-in\tcomprehensive\tRetained\tshareholders'\n\tShares\tAmount\tcapital\tloss\tearnings\tequity\nBalances as of August 30 2019\t23617\t712\t285994\t(177866)\t164620\t273460\nShare-based compensation expense\t0\t0\t5956\t0\t0\t5956\nIssuance of ordinary shares from exercises\t86\t2\t1164\t0\t0\t1166\nIssuance of ordinary shares from release of restricted stock units (RSUs)\t69\t2\t(2)\t0\t0\t0\nIssuance of ordinary shares from employee share purchase plan (ESPP)\t67\t2\t1240\t0\t0\t1242\nEffect of adopting ASC 606\t(1)\t0\t(20)\t0\t0\t(20)\nForeign currency translation\t0\t0\t0\t(10244)\t0\t(10244)\nNet income\t0\t0\t0\t0\t224\t224\nBalances as of November 29 2019\t23838\t718\t294332\t(188110)\t164844\t271784\n", "q10k_tbl_6": "\t\t\t\tAccumulated\t\t\n\t\t\tAdditional\tother\t\tTotal\n\tOrdinary shares\t\tpaid-in\tcomprehensive\tRetained\tshareholders'\n\tShares\tAmount\tcapital\tloss\tearnings\tequity\nBalances as of August 28 2020\t24419\t737\t346131\t(228241)\t163477\t282104\nShare-based compensation expense\t0\t0\t11088\t0\t0\t11088\nIssuance of ordinary shares from exercises\t59\t2\t1335\t0\t0\t1337\nIssuance of ordinary shares from release of RSUs\t332\t9\t(9)\t0\t0\t0\nWithholding tax on RSUs\t(139)\t0\t(3483)\t0\t0\t(3483)\nIssuance of ordinary shares from ESPP\t88\t3\t1765\t0\t0\t1768\nForeign currency translation\t0\t0\t0\t(16523)\t0\t(16523)\nNet income\t0\t0\t0\t0\t2027\t2027\nBalances as of November 27 2020\t24759\t751\t356827\t(244764)\t165504\t278318\n", "q10k_tbl_7": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nCash flows from operating activities:\t\t\nNet income\t2027\t224\nAdjustments to reconcile net income to net cash provided by operating activities:\t\t\nDepreciation and amortization\t8367\t9544\nShare-based compensation\t11088\t5956\nProvision for doubtful accounts receivable and sales returns\t(9)\t73\nDeferred income tax benefit\t222\t(970)\nGain on disposal of property and equipment\t(5)\t(42)\nAmortization of debt discounts and issuance costs\t2116\t734\nAmortization of operating lease right-of-use assets\t1413\t1114\nChanges in operating assets and liabilities:\t\t\nAccounts receivable\t(1930)\t(13688)\nInventories\t12919\t(42206)\nPrepaid expenses and other assets\t(9277)\t5110\nAccounts payable\t18022\t60438\nOperating lease liabilities\t(1504)\t(1082)\nAccrued expenses and other liabilities\t(7880)\t62\nNet cash provided by operating activities\t35569\t25267\nCash flows from investing activities:\t\t\nCapital expenditures and deposits on equipment\t(14644)\t(5158)\nProceeds from sale of property and equipment\t16\t42\nNet cash used in investing activities\t(14628)\t(5116)\nCash flows from financing activities:\t\t\nLong-term debt payments - BNDES\t0\t(6435)\nProceeds from borrowings under revolving line of credit\t19500\t12500\nRepayments of borrowings under revolving line of credit\t(19500)\t(12500)\nProceeds from issuance of ordinary shares from share option exercises\t1337\t1166\nProceeds from issuance of ordinary shares from ESPP\t1768\t1242\nTax payments due upon issuance of ordinary shares for release of RSUs\t(3483)\t(20)\nNet cash used in financing activities\t(378)\t(4047)\nEffect of exchange rate changes on cash and cash equivalents\t(7277)\t(2854)\nNet increase in cash and cash equivalents\t13286\t13250\nCash and cash equivalents at beginning of period\t150811\t98139\nCash and cash equivalents at end of period\t164097\t111389\nSupplemental disclosures of cash flow information:\t\t\nCash paid during the period:\t\t\nCash paid for interest\t0\t4696\nCash paid for income taxes net of refunds\t1888\t914\nNoncash activities information:\t\t\nCapital expenditures included in accounts payable at period end\t424\t1335\n", "q10k_tbl_8": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nService revenue net\t6495\t7941\nCost of purchased materials - service (1)\t131524\t146025\nGross billings for services\t138019\t153966\nProduct net sales\t285202\t264077\nGross billings to customers\t423221\t418043\nProduct net sales\t285202\t264077\nService revenue net\t6495\t7941\nNet sales\t291697\t272018\n", "q10k_tbl_9": "\tNovember 27 2020\tAugust 28 2020\t Change\nAccounts receivable\t212886\t215918\t(3032)\nContract assets\t1392\t5068\t(3676)\nDeferred revenue\t16271\t20124\t(3853)\n", "q10k_tbl_10": "\tNovember 27 2020\nWithin 1 year\t12206\n2-3 years\t3117\nThereafter\t948\n\t16271\n", "q10k_tbl_11": "\tSpecialty Memory Products\tBrazil Products\tSCSS\tTotal\nBalance as of August 30 2019\t14720\t26029\t40674\t81423\nProvisional adjustment from business acquisition (see Note 2)\t0\t0\t(273)\t(273)\nTranslation adjustments\t0\t(7195)\t0\t(7195)\nBalance as of August 28 2020\t14720\t18834\t40401\t73955\nTranslation adjustments\t0\t(1855)\t0\t(1855)\nBalance as of November 27 2020\t14720\t16979\t40401\t72100\n", "q10k_tbl_12": "\t\tNovember 27 2020\t\t\tAugust 28 2020\t\t\n\tWeighted\tGross\t\t\tGross\t\t\n\tavg.\tCarrying\tAccumulated\t\tCarrying\tAccumulated\t\n\tlife (yrs)\tamount\tamortization\tNet\tamount\tamortization\tNet\nCustomer relationships\t4 - 7\t52300\t(15184)\t37116\t52300\t(12899)\t39401\nTrademarks/tradename\t5 - 7\t13100\t(4576)\t8524\t13100\t(4095)\t9005\nTechnology\t4\t10350\t(3732)\t6618\t10350\t(3085)\t7265\nBacklog\t< 1\t400\t(400)\t0\t400\t(400)\t0\nTotal\t\t76150\t(23892)\t52258\t76150\t(20479)\t55671\n", "q10k_tbl_13": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nAmortization of intangible assets classification (in thousands):\t\t\nCost of sales\t647\t647\nSelling general and administrative\t2766\t2766\nTotal\t3413\t3413\n", "q10k_tbl_14": "\tAmount\nFiscal year ending November:\t\nRemainder of fiscal 2021\t10240\n2022\t13204\n2023\t12443\n2024\t9092\n2025 and thereafter\t7279\nTotal\t52258\n", "q10k_tbl_15": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nShare-based compensation expense by category (in thousands):\t\t\nCost of sales\t838\t730\nResearch and development\t778\t744\nSelling general and administrative\t9472\t4482\nTotal\t11088\t5956\n", "q10k_tbl_16": "\tPreviously Reported\tPurchase Price Allocation Measurement period adjustment\tAs Adjusted\nNet cash for merger\t74358\t0\t74358\nCash and cash equivalents acquired\t37\t0\t37\nUpfront payment in accordance with agreement\t74395\t0\t74395\nPost-closing adjustments in accordance with agreement\t558\t(234)\t324\nTotal consideration\t74953\t(234)\t74719\nEstimated fair value of contingent consideration\t2700\t0\t2700\nTotal purchase price\t77653\t(234)\t77419\n", "q10k_tbl_17": "\tPreviously Reported\tPurchase Price Allocation Measurement period adjustment\tAs Adjusted\nTangible assets acquired\t16482\t0\t16482\nLiabilities assumed\t(7840)\t0\t(7840)\nIdentifiable intangible assets\t41900\t0\t41900\nGoodwill\t27111\t(234)\t26877\nTotal net assets acquired\t77653\t(234)\t77419\n", "q10k_tbl_18": "\tPreviously Reported\tPurchase Price Allocation Measurement period adjustment\tAs Adjusted\nNet cash for merger\t1581\t0\t1581\nCash and cash equivalents acquired\t1576\t0\t1576\nUpfront cash payment\t3157\t0\t3157\nUpfront shares issued\t9167\t0\t9167\nUpfront consideration in accordance with agreement\t12324\t0\t12324\nPurchase price holdback - cash due to pre-closing holders\t413\t0\t413\nPurchase price holdback - shares due to pre-closing holders\t1618\t0\t1618\nPost-closing adjustments in accordance with agreement\t285\t(39)\t246\nTotal purchase price\t14640\t(39)\t14601\n", "q10k_tbl_19": "\tPreviously Reported\tPurchase Price Allocation Measurement period adjustment\tAs Adjusted\nTangible assets acquired\t5266\t0\t5266\nLiabilities assumed\t(5643)\t0\t(5643)\nIdentifiable intangible assets\t6700\t0\t6700\nGoodwill\t8317\t(39)\t8278\nTotal net assets acquired\t14640\t(39)\t14601\n", "q10k_tbl_20": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nAffiliates:\t\t\nNet sales\t14975\t16956\n", "q10k_tbl_21": "\tNovember 27\tAugust 28\n\t2020\t2020\nRaw materials\t86330\t89943\nWork in process\t18907\t16672\nFinished goods\t41966\t56376\nTotal inventories*\t147203\t162991\n", "q10k_tbl_22": "\tNovember 27\tAugust 28\n\t2020\t2020\nFinancial credits*\t13421\t6359\nPrepayment for VAT and other transaction taxes\t3163\t2119\nUnbilled service receivables\t2491\t1265\nContract assets**\t1392\t5068\nPrepaid income taxes\t1343\t1201\nPrepaid R&D expenses\t1336\t1865\nOther prepaid expenses and other current assets\t11191\t9113\nTotal prepaid expenses and other current assets\t34337\t26990\n", "q10k_tbl_23": "\tNovember 27\tAugust 28\n\t2020\t2020\nOffice furniture software computers and equipment\t25092\t21528\nManufacturing equipment\t113176\t113035\nLeasehold improvements*\t26614\t27706\n\t164882\t162269\nLess accumulated depreciation and amortization\t104837\t107564\nNet property and equipment\t60045\t54705\n", "q10k_tbl_24": "\tNovember 27\tAugust 28\n\t2020\t2020\nDeposits on equipment\t7901\t8170\nPrepaid ICMS taxes in Brazil*\t2968\t3976\nDeferred tax asset\t2932\t3450\nPrepaid R&D expense\t1090\t1356\nOther\t3858\t3602\nTotal other noncurrent assets\t18749\t20554\n", "q10k_tbl_25": "\tNovember 27\tAugust 28\n\t2020\t2020\nAccrued employee compensation\t15152\t16862\nDeferred revenue\t12206\t17264\nCurrent portion of lease liabilities\t4554\t5304\nVAT and other transaction taxes payable\t3773\t6143\nIncome taxes payable\t1860\t1352\nCustomer deposits\t1631\t3917\nAccrued warranty reserve\t1261\t1316\nOther accrued liabilities\t6574\t5671\nTotal accrued liabilities\t47011\t57829\n", "q10k_tbl_26": "\tThree Months Ended\t\n\tNovember 27 2020\tNovember 29 2019\nOperating lease cost\t1539\t1458\nVariable lease cost\t272\t167\nShort-term lease cost\t58\t134\nTotal lease costs\t1869\t1759\nWeighted-average remaining lease term\t7.6 years\t8.0 years\nWeighted-average discount rate\t8.1%\t8.2%\n", "q10k_tbl_27": "Fiscal year ending August:\tAmount\nRemainder of 2021\t5185\n2022\t4808\n2023\t4012\n2024\t3529\n2025 and thereafter\t17297\nTotal\t34831\nLess Short-term lease commitments\t(177)\nLess imputed interest\t(10576)\nPresent value of total lease liabilities\t24078\n", "q10k_tbl_28": "\tNovember 27\tAugust 28\n\t2020\t2020\nPrincipal\t250000\t250000\nUnamortized debt discount\t(46746)\t(48586)\nUnamortized issuance costs\t(5620)\t(5841)\nNet carrying amount\t197634\t195573\n", "q10k_tbl_29": "\tThree Months Ended\n\tNovember 27 2020\nContractual interest expenses\t1391\nAmortization of debt discount\t1840\nAmortization of debt issuance costs\t221\nTotal interest cost recognized\t3452\n", "q10k_tbl_30": "\tQuoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)\tObservable/ Unobservable Inputs Corroborated by Market Data (Level 2)\tSignificant Unobservable Inputs (Level 3)\tTotal\nBalances as of November 27 2020:\t\t\t\t\nAssets\t\t\t\t\nCash and cash equivalents\t164.1\t0\t0\t164.1\nDerivative financial instruments(1)\t0\t2.1\t0\t2.1\nTotal assets measured at fair value\t164.1\t2.1\t0\t166.2\nBalances as of August 28 2020:\t\t\t\t\nAssets\t\t\t\t\nCash and cash equivalents\t150.8\t0\t0\t150.8\nDerivative financial instruments(1)\t0\t0.1\t0\t0.1\nTotal assets measured at fair value\t150.8\t0.1\t0\t150.9\nLiabilities\t\t\t\t\nDerivative financial instruments(2)\t0\t0.9\t0\t0.9\nTotal liabilities measured at fair value\t0\t0.9\t0\t0.9\n", "q10k_tbl_31": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nStock options:\t\t\nExpected term (years)\t6.25\t6.25\nExpected volatility\t52.07%\t46.10%\nRisk-free interest rate\t0.49%\t1.68%\nExpected dividends\t0\t0\n", "q10k_tbl_32": "\t\t\tWeighted\t\n\t\tWeighted\taverage\t\n\t\taverage\tremaining\t\n\t\tper share\tcontractual\tAggregate\n\t\texercise\tterm\tintrinsic\n\tShares\tprice\t(years)\tvalue\nOptions outstanding at August 28 2020\t2109\t29.45\t6.95\t7225\nOptions granted\t250\t26.99\t\t\nOptions exercised\t(59)\t22.60\t\t\nOptions cancelled\t(3)\t15.51\t\t\nOptions outstanding at November 27 2020\t2297\t29.38\t7.01\t13951\nOptions exercisable at November 27 2020\t968\t28.26\t6.33\t7393\n", "q10k_tbl_33": "\t\tWeighted\t\n\t\taverage\t\n\t\tgrant date\tAggregate\n\t\tfair value\tintrinsic\n\tShares\tper share\tvalue\nAwards outstanding at August 28 2020\t1273\t26.19\t31721\nAwards granted\t548\t20.81\t\nAwards vested and released\t(332)\t26.05\t\nAwards forfeited and cancelled\t(7)\t28.05\t\nAwards outstanding at November 27 2020\t1482\t24.23\t45920\n", "q10k_tbl_34": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nBeginning accrued warranty reserve\t1316\t1770\nWarranty claims\t(313)\t(716)\nProvision for product warranties\t258\t695\nEnding accrued warranty reserve\t1261\t1749\n", "q10k_tbl_35": "\tThree Months Ended\t\t\t\t\t\t\t\n\tNovember 27 2020\t\t\t\tNovember 29 2019\t\t\t\n\tSpecialty Memory Products\tBrazil Products\tSCSS\tTotal\tSpecialty Memory Products\tBrazil Products\tSCSS\tTotal\nNet Revenue\t120657\t105166\t65874\t291697\t103529\t93999\t74490\t272018\nAdjusted Gross Profit\t18245\t17881\t17985\t54111\t19336\t16658\t19748\t55742\nAdjusted Gross Margin\t15%\t17%\t27%\t19%\t19%\t18%\t27%\t20%\n", "q10k_tbl_36": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nGeographic Net Sales:\t\t\nU.S.\t117294\t119206\nBrazil\t105181\t94799\nAsia\t48805\t39224\nEurope\t12313\t10401\nOther Americas\t8104\t8388\nTotal\t291697\t272018\n", "q10k_tbl_37": "\tNovember 27\tAugust 28\n\t2020\t2020\nProperty and Equipment Net:\t\t\nU.S.\t15028\t11635\nBrazil\t33218\t30648\nMalaysia\t9671\t10209\nOther\t2128\t2213\nTotal\t60045\t54705\n", "q10k_tbl_38": "\tThree Months Ended\t\t\t\n\tNovember 27 2020\t\tNovember 29 2019\t\n\tAmount\tPercentage of net sales\tAmount\tPercentage of net sales\nCustomer A(1)\t52648\t18%\t50016\t18%\n\t52648\t18%\t50016\t18%\n", "q10k_tbl_39": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nNumerator:\t\t\nNet income\t2027\t224\nDenominator:\t\t\nWeighted average shares outstanding:\t\t\nBasic\t24561\t23713\nDiluted\t25103\t24286\nEarnings per share:\t\t\nBasic\t0.08\t0.01\nDiluted\t0.08\t0.01\nAnti-dilutive weighted shares excluded from the computation of diluted earnings per share\t1497\t1056\n", "q10k_tbl_40": "\tThree Months Ended\t\n\tNovember 27\tNovember 29\n\t2020\t2019\nForeign currency gains (losses)\t642\t(911)\nOther\t190\t71\nTotal other income (expense) net\t832\t(840)\n", "q10k_tbl_41": "\tThree Months Ended\t\t\t\t\t\n\tNovember 27 2020\t% of sales*\t\tNovember 29 2019\t% of sales*\t\n\t(in thousands other than percentages and per share data)\t\t\t\t\t\nConsolidated Income Statements:\t\t\t\t\t\t\nNet sales\t291697\t100%\t\t272018\t100%\t\nCost of sales (1)(2)\t239053\t82%\t\t217698\t80%\t\nGross profit\t52644\t18%\t\t54320\t20%\t\nOperating expenses:\t\t\t\t\t\t\nResearch and development (1)\t6964\t2%\t\t14886\t5%\t\nSelling general and administrative (1) (2)\t38056\t13%\t\t33553\t12%\t\nTotal operating expenses\t45020\t15%\t\t48439\t18%\t\nIncome from operations\t7624\t3%\t\t5881\t2%\t\nOther income (expense):\t\t\t\t\t\t\nInterest expense net\t(3154)\t(1\t%)\t(4492)\t(2\t%)\nOther income (expense) net\t832\t0%\t\t(840)\t0%\t\nTotal other expense\t(2322)\t(1\t%)\t(5332)\t(2\t%)\nIncome before income taxes\t5302\t2%\t\t549\t0%\t\nProvision for income taxes\t3275\t1%\t\t325\t0%\t\nNet income\t2027\t1%\t\t224\t0%\t\nEarnings per share:\t\t\t\t\t\t\nBasic\t0.08\t\t\t0.01\t\t\nDiluted\t0.08\t\t\t0.01\t\t\nShares used in computing earnings per share:\t\t\t\t\t\t\nBasic\t24561\t\t\t23713\t\t\nDiluted\t25103\t\t\t24286\t\t\n* Summations may not compute precisely due to rounding.\t\t\t\t\t\t\n(1) Includes share-based compensation expense as follows:\t\t\t\t\t\t\nCost of sales\t838\t\t\t730\t\t\nResearch and development\t778\t\t\t744\t\t\nSelling general and administrative\t9472\t\t\t4482\t\t\n(2) Includes amortization of intangible assets expense as follows:\t\t\t\t\t\t\nCost of sales\t647\t\t\t647\t\t\nSelling general and administrative\t2766\t\t\t2766\t\t\n", "q10k_tbl_42": "\tThree Months Ended\t\n\tNovember 27 2020\tNovember 29 2019\n\t(in thousands)\t\nCash provided by operating activities\t35569\t25267\nCash used in investing activities\t(14628)\t(5116)\nCash used in financing activities\t(378)\t(4047)\nEffect of exchange rate changes on cash and cash equivalents\t(7277)\t(2854)\nNet increase in cash and cash equivalents\t13286\t13250\n", "q10k_tbl_43": "Exhibit No.\tExhibit Title\n2.1^*\tAsset Purchase Agreement dated October 18 2020 between Cree Inc. SMART Global Holdings Inc. and CreeLED Inc. (formerly known as Chili Acquisition Inc.)\n10.1\tLease Agreement dated October 8 2020 between SMART Modular Technologies Inc. and Regency Tasman Holdings LLC (incorporated by reference to Exhibit 10.14 of the Registrant's Current Report on Form 10-K filed with the SEC on October 22 2020).\n10.2*\tSecond Amendment to Lease dated as of December 3 2020 between SMART Modular Technologies Inc. and Thomson Logistics Assets LLC.\n10.3\tLoan Guaranty and Security Agreement dated as of December 23 2020 among SMART Modular Technologies Inc. SMART Embedded Computing Inc. and Penguin Computing Inc. as borrowers the financial institutions party thereto as Lenders and Bank of America N.A. as the agent for the lenders (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the SEC on December 29 2020).\n31.1*\tCertification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.\n31.2*\tCertification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.\n32.1**\tCertification of Principal Executive Officer pursuant 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n32.2**\tCertification of Principal Financial Officer pursuant 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101.INS\tInline XBRL Instance Document\n101.SCH\tInline XBRL Taxonomy Extension Schema Document\n101.CAL\tInline XBRL Taxonomy Extension Calculation Linkbase Document\n101.LAB\tInline XBRL Taxonomy Extension Label Linkbase Document\n101.PRE\tInline XBRL Taxonomy Extension Presentation Linkbase Document\n101.DEF\tInline XBRL Taxonomy Extension Definition Linkbase Document\n104\tCover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_7"}None
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 6. Exhibits
Exhibits
EX-2.1
sgh-ex21_165.htm
EX-10.2
sgh-ex102_274.htm
EX-31.1
sgh-ex311_9.htm
EX-31.2
sgh-ex312_6.htm
EX-32.1
sgh-ex321_8.htm
EX-32.2
sgh-ex322_7.htm
Smart Global Holdings Earnings 2020-11-27
Balance Sheet
Income Statement
Cash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 27, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-38102
SMART GLOBAL HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
Cayman Islands
98-1013909
( State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
c/o Maples Corporate Services Limited
P.O. Box 309
Ugland House
Grand Cayman, Cayman Islands
KY1-1104
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (510) 623-1231
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Ordinary shares, $0.03 par value per share
SGH
The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of December 9, 2020, the registrant had 24,772,568 ordinary shares outstanding.
This Quarterly Report on Form 10-Q includes a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve many risks and uncertainties. Forward-looking statements are identified by the use of the words “would,” “could,” “will,” “may,” “expect,” “believe,” “should,” “anticipate,” “if,” “future,” “intend,” “plan,” “estimate,” “potential,” “target,” “seek,” or “continue” and similar words and phrases, including the negatives of these terms, or other variations of these terms, that denote future events. These statements reflect our current views with respect to future events and our potential financial performance and are subject to risks and uncertainties that could cause our actual results and financial position to differ materially and adversely from what is projected or implied in any forward-looking statements included in this report. These factors include, but are not limited to, the risks described under the caption “Risk Factors” in the documents we file from time to time with the Securities and Exchange Commission, including in our Annual Report on Form 10-K for our fiscal year ended August 28, 2020, and in this report, and in Item 2 of Part I – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We make these forward-looking statements based upon information available on the date of this report, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information or otherwise, except as required by law.
2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
SMART Global Holdings, Inc.
and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
November 27,
August 28,
2020
2020
Assets
Current assets:
Cash and cash equivalents
$
164,097
$
150,811
Accounts receivable, net of allowances of $89 and $101 as of November 27, 2020
and August 28, 2020, respectively
212,886
215,918
Inventories
147,203
162,991
Prepaid expenses and other current assets
34,337
26,990
Total current assets
558,523
556,710
Property and equipment, net
60,045
54,705
Operating lease right-of-use assets
23,050
25,013
Other noncurrent assets
18,749
20,554
Intangible assets, net
52,258
55,671
Goodwill
72,100
73,955
Total assets
$
784,725
$
786,608
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$
235,557
$
224,660
Accrued liabilities
47,011
57,829
Total current liabilities
282,568
282,489
Long-term debt
197,634
195,573
Long-term operating lease liabilities
19,524
20,829
Other long-term liabilities
6,681
5,613
Total liabilities
$
506,407
$
504,504
Commitments and contingencies (see Note 10)
Shareholders’ equity:
Ordinary shares, $0.03 par value. Authorized 200,000 shares; issued and
outstanding 24,759 and 24,419 as of November 27, 2020 and August 28, 2020,
respectively
751
737
Additional paid-in capital
356,827
346,131
Accumulated other comprehensive loss
(244,764
)
(228,241
)
Retained earnings
165,504
163,477
Total shareholders’ equity
278,318
282,104
Total liabilities and shareholders’ equity
$
784,725
$
786,608
See accompanying notes to unaudited condensed consolidated financial statements.
3
SMART Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
November 27,
November 29,
2020
2019
Net sales (1)
$
291,697
$
272,018
Cost of sales
239,053
217,698
Gross profit
52,644
54,320
Operating expenses:
Research and development
6,964
14,886
Selling, general, and administrative
38,056
33,553
Total operating expenses
45,020
48,439
Income from operations
7,624
5,881
Interest expense, net
(3,154
)
(4,492
)
Other income (expense), net
832
(840
)
Total other expense
(2,322
)
(5,332
)
Income before income taxes
5,302
549
Provision for income taxes
3,275
325
Net income
$
2,027
$
224
Earnings per share:
Basic
$
0.08
$
0.01
Diluted
$
0.08
$
0.01
Shares used in computing earnings per share:
Basic
24,561
23,713
Diluted
25,103
24,286
(1)
Includes sales to affiliates of $14,975 and $16,956 in the three months ended November 27, 2020 and November 29, 2019, respectively (see Note 3).
See accompanying notes to unaudited condensed consolidated financial statements.
4
SMART Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)
Three Months Ended
November 27,
November 29,
2020
2019
Net income
$
2,027
$
224
Other comprehensive loss:
Foreign currency translation
(16,523
)
(10,244
)
Comprehensive loss
$
(14,496
)
$
(10,020
)
See accompanying notes to unaudited condensed consolidated financial statements.
5
SMART Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity
(In thousands)
(Unaudited)
Accumulated
Additional
other
Total
Ordinary shares
paid-in
comprehensive
Retained
shareholders’
Shares
Amount
capital
loss
earnings
equity
Balances as of August 30, 2019
23,617
$
712
$
285,994
$
(177,866
)
$
164,620
$
273,460
Share-based compensation expense
—
—
5,956
—
—
5,956
Issuance of ordinary shares from exercises
86
2
1,164
—
—
1,166
Issuance of ordinary shares from release of restricted stock units (RSUs)
69
2
(2
)
—
—
—
Issuance of ordinary shares from employee share purchase plan (ESPP)
67
2
1,240
—
—
1,242
Effect of adopting ASC 606
(1
)
—
(20
)
—
—
(20
)
Foreign currency translation
—
—
—
(10,244
)
—
(10,244
)
Net income
—
—
—
—
224
224
Balances as of November 29, 2019
23,838
$
718
$
294,332
$
(188,110
)
$
164,844
$
271,784
Accumulated
Additional
other
Total
Ordinary shares
paid-in
comprehensive
Retained
shareholders’
Shares
Amount
capital
loss
earnings
equity
Balances as of August 28, 2020
24,419
$
737
$
346,131
$
(228,241
)
$
163,477
$
282,104
Share-based compensation expense
—
—
11,088
—
—
11,088
Issuance of ordinary shares from exercises
59
2
1,335
—
—
1,337
Issuance of ordinary shares from release of RSUs
332
9
(9
)
—
—
—
Withholding tax on RSUs
(139
)
—
(3,483
)
—
—
(3,483
)
Issuance of ordinary shares from ESPP
88
3
1,765
—
—
1,768
Foreign currency translation
—
—
—
(16,523
)
—
(16,523
)
Net income
—
—
—
—
2,027
2,027
Balances as of November 27, 2020
24,759
$
751
$
356,827
$
(244,764
)
$
165,504
$
278,318
See accompanying notes to unaudited condensed consolidated financial statements.
6
SMART Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
November 27,
November 29,
2020
2019
Cash flows from operating activities:
Net income
$
2,027
$
224
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
8,367
9,544
Share-based compensation
11,088
5,956
Provision for doubtful accounts receivable and sales returns
(9
)
73
Deferred income tax benefit
222
(970
)
Gain on disposal of property and equipment
(5
)
(42
)
Amortization of debt discounts and issuance costs
2,116
734
Amortization of operating lease right-of-use assets
1,413
1,114
Changes in operating assets and liabilities:
Accounts receivable
(1,930
)
(13,688
)
Inventories
12,919
(42,206
)
Prepaid expenses and other assets
(9,277
)
5,110
Accounts payable
18,022
60,438
Operating lease liabilities
(1,504
)
(1,082
)
Accrued expenses and other liabilities
(7,880
)
62
Net cash provided by operating activities
35,569
25,267
Cash flows from investing activities:
Capital expenditures and deposits on equipment
(14,644
)
(5,158
)
Proceeds from sale of property and equipment
16
42
Net cash used in investing activities
(14,628
)
(5,116
)
Cash flows from financing activities:
Long-term debt payments - BNDES
—
(6,435
)
Proceeds from borrowings under revolving line of credit