NEWARK, CA, October 4, 2018SMART 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 2018 ended August 31, 2018.

Fourth Quarter Fiscal 2018 Highlights:

  • Net sales of $374.0 million, 68% higher than year ago quarter
  • GAAP operating income of $45.0 million
  • GAAP net income of $29.7 million
  • Adjusted EBITDA of $51.0 million
  • GAAP diluted EPS of $1.28
  • Non-GAAP diluted EPS of $1.72

Full Year Fiscal 2018 Highlights:

  • Net sales of $1.3 billion, 69% higher than prior fiscal year
  • GAAP operating income of $170.2 million
  • GAAP net income of $119.5 million
  • Adjusted EBITDA of $195.5 million
  • GAAP diluted EPS of $5.17
  • Non-GAAP diluted EPS of $6.36

"We completed fiscal 2018 with another great quarter, including the closing of our acquisition of Penguin Computing," commented Ajay Shah, Chairman and Chief Executive Officer. "In addition, we closed our first full fiscal year as a public company with record revenues that crossed the $1 billion mark. Driving this performance was strength in our Specialty Memory business which had a very strong quarter and earned new NVDIMM and VLP RDIMM design wins at major Storage and Server customers. We also had design wins for our ruggedized SSD products and our Embedded Data Cache product in the Industrial Automation market. Brazil continued its strong performance and added many new memory products for PC, server and smartphone applications as well as a new polymer cell-based battery product for smartphones."

"Our new Specialty Compute and Storage Solutions business led by Penguin Computing performed well in its first quarter as part of SGH. During the quarter we won a number of key contracts with agencies within the Department of Energy (DoE), contractors to the Department of Defense (DoD) and with a number of other enterprise customers for our HPC and AI cluster products."

"We continue to be focused on growing all our lines of business over the new fiscal year," concluded Mr. Shah.

Quarterly Financial Results
(In millions, except per share amounts)
  Q4 FY18 Q3 FY18 Q4 FY17 Q3 FY18 Q3 FY18 Q4 FY17
Net Sales $ 374.0 $ 335.5 $ 223.0 $ 374.0 $ 335.5 $ 223.0
Gross Profit $ 82.7 $ 78.1 $ 48.0 $ 83.8 $ 78.5 $ 48.2
Operating Income $ 45.0 $ 48.7 $ 20.6 $ 51.8 $ 53.8 $ 25.4
Net Income $ 29.7 $ 31.9 $ (10.2) $ 40.0 $ 43.0 $ 16.5
Diluted Earnings Per Share (EPS)3 $ 1.28 $ 1.37 $ (0.48) $ 1.72 $ 1.84 $ 0.75

Annual Financial Results
(In millions, except per share amounts)
  FY18 FY17 FY18 FY17
Net Sales $ 1,288.8 $ 761.3 $ 1,288.8 $ 761.3
Gross Profit $ 291.6 $ 162.3 $ 293.6 $ 162.9
Operating Income $ 170.2 $ 53.9 $ 188.8 $ 71.2
Net Income (Loss) $ 119.5 $ (7.8) $ 147.0 $ 36.6
Earnings (Loss) Per Share $ 5.17 $ (0.49) $ 6.36 $ 2.26

(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) We exclude foreign currency gains/losses from our non-GAAP diluted EPS as we believe this non-GAAP financial measure is a more relevant indicator of our core operating results. This change is reflected for all the periods presented in this release.

Other Highlights
SMART appointed an additional independent director, Bryan Ingram, Senior Vice President and General Manager of the Wireless Semiconductor Division of Broadcom Inc., to its board of directors and its Compensation Committee.

Business Outlook
The following statements are based upon management's current expectations for the first quarter of fiscal 2019 ending November 30, 2018. These statements are forward-looking, and actual results may differ materially. SMART undertakes no obligation to update these statements.

Net Sales - GAAP/Non-GAAP $375 to $390 Million
Gross Margin - GAAP/Non-GAAP 22% to 23%
Diluted EPS - GAAP $1.49 to $1.54
Share-Based Compensation Per Share $0.16
Intangible Amortization Per Share $0.04
Acquisition Costs Per Share $0.05
Diluted EPS - Non-GAAP $1.74 to $1.79
Expected Dilute Share Count 23.2 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 9390108.

A replay of the conference call will be available for one week following today's call through the Events section of the SMART website at or by calling US toll free +1-855-859-2056; Passcode: 9390108.

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 industries 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; 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, additional capacity and acquisitions; 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; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors; changes in the availability of supply of materials, components or memory products; the inability of Penguin Computing to obtain and retain security clearances to expand its government business; 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 and its subsidiaries operate 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 subsidiaries' 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
Certain non-GAAP financial measures are contained in this press release or will be discussed on our conference call, including non-GAAP gross profit, non-GAAP operating income, Adjusted EBITDA, non-GAAP net income, non-GAAP net income per diluted share, non-GAAP diluted EPS excluding foreign currency gains (losses). We define Adjusted EBITDA as GAAP net income plus net interest expense, income tax expense, depreciation and amortization expense, stock-based compensation expense, acquisition-related expenses, restructuring charges, amortization of non-cash debt discount related to warrants, 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 exclude stock-based compensation expense, intangible amortization expense, acquisition-related expenses, amortization of non-cash debt discount related to warrants, non-cash charges in connection with refinancing and, with respect to non-GAAP diluted EPS, foreign currency gains (losses). These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. By excluding these charges, 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 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. With the addition of Penguin Computing and the creation of a new business unit, SMART Specialty Compute & Storage Solutions (SCSS), SMART has expanded its serviceable markets into areas requiring specialized computing platforms in artificial intelligence and machine learning, advanced modeling and high performance computing. 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 products in multiple geographies. See,,, and for more information.


# # #

Investor Contact:
Suzanne Schmidt
Investor Relations for SMART Global Holdings, Inc.
(510) 360-8596