MILPITAS, Calif. — SMART Global Holdings, Inc. 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.
“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) |
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|
(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.
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