Penguin Solutions, Inc. · NASDAQ:PENG
Penguin Solutions — SMART Global Holdings — Q2 FY2021 Earnings Presentation
21 slides from Penguin Solutions's earnings presentation, Apr 6, 2021
Slide 1: Q2 FY2021 Financial Results Conference Call
APRIL 6, 2021 Q2 FY2021 Financial Results Conference Call
Slide 2: Disclaimer
Disclaimer This presentation and oral communications made during the course of this presentation contain "forward-looking Non-GAAP Information statements" including among other things, statements regarding future events and the future financial performance of Certain non-GAAP financial measures are
Slide 3: Speakers
Mark Adams President and CEO SMART Global Holdings Speakers Jack Pacheco EVP and COO SMART Global Holdings President, Memory Solutions Group Ken Rizvi SVP and CFO SMART Global Holdings
Slide 4: Entering A New Chapter
❖ Strengthened Management Team • Ken Rizvi, CFO • Anne Kuykendall, General Counsel • Bruce Goldberg, Chief of Staff • Valerie Sassani, VP Marketing and Comms • Thierry Pellegrino, President, IPS • Jean McDaniel, VP Office of Transformation • Claude Demby, President, LED Solutions ❖ Completed Acquisi
Slide 5: Q2 FY2021 Exceeded Expectations
Q2 FY2021 Exceeded Expectations Net Sales $304.0 M Non-GAAP Gross Margin 19.5% Non-GAAP EPS $0.87 5
Slide 6: Intelligent Platform Solutions Group
❖ Revenues up almost 30% sequentially • Growth across HPC, embedded computing, edge computing, and AI • Demand driven by key customers in: cloud, financial services, federal, Intelligent telecom and energy Platform • New products for edge/AI analytics slated for introduction in 2H FY21, Solutions ta
Slide 7: Memory Solutions Group
❖ Demand for Memory Solutions business returning and new designs gaining traction • Demand returning from industrial customers previously impacted by Covid • Design wins in new verticals including transportation, hyperscale, cloud and data centers. Memory • Controller-based memory products (NVDIMM a
Slide 8: LED Solutions Group
❖ Cree LED acquisition closed March 1, 2021; integration underway ❖ Transition to sapphire from silicon carbide on track ❖ Transition to outsourced wafer model on track LED Solutions ❖ Over next 18 months: • Substantially complete transition to sapphire process and outsourced wafers Group • Creating
Slide 9: CFO Financial Review
CFO Financial Review KEN RIZVI SVP and CFO SMART Global Holdings
Slide 10: Q2 FY2021 Financial Highlights: Exceeded Expectations
Q2 FY2021 Financial Highlights: Exceeded Expectations Net Sales Non-GAAP Gross Margin Non-GAAP EPS Actuals $304.0 M 19.5% $0.87 Guidance on Q1 FY2021 $295.0 M 19.0% $0.80 Earnings Call • Intelligent Platform Solutions sales drove strength in the quarter • Gross margin improvement due primarily to mi
Slide 11: Q2 FY2021 Income Statement Highlights – Non-GAAP
Q2 FY2021 Income Statement Highlights – Non-GAAP Q2 FY20 Q1 FY21 Q2 FY21 Gross profit $52.9 M $54.1 M $59.3 M Gross margin 19.4% 18.6% 19.5% Gross Margin – Intelligent Platform Solutions 28.1% 27.3% 29.3% Gross Margin – Specialty Memory 18.6% 15.1% 16.1% Gross Margin - Brazil 14.8% 17.0% 15.2% Opera
Slide 12: Q2 FY2021 Net Sales by End Market
Q2 FY2021 Net Sales by End Market Industrial, Defense & Mobile & Other PCs Strength in Network & 31% Telecom and Industrial, 35% Defense & Other more than $304.0 M offset lower sales in Servers & Storage, Mobile & PCs on a 13% 21% sequential basis Servers & Storage Network & Telecom 12
Slide 13: Q2 FY2021 Balance Sheet Highlights
Q2 FY2021 Balance Sheet Highlights Working Q1 Q2 Cash Q1 Q2 Q1 Q2 CapEx Capital FY21 FY21 Flow FY21 FY21 FY21 FY21 Net Accounts Cash & CapEx $14.6 M $20.0 M $212.9 M $203.4 M $164.1 M $139.8 M* Receivable Equivalents Depreciation $5.0 M $5.4 M Days Sales CF from 46 days 41 days $35.6M $20.4M Outstan
Slide 14: Q3 FY2021 Guidance
Q3 FY2021 Guidance Q3 FY21 Guidance Net Sales $400 to $430 M Gross Margin 19% to 21% Diluted EPS - GAAP $0.64 ± $0.10 Shares-based compensation per share $0.24 Intangible amortization per share $0.14 Convertible debt discount OID and fees per share $0.08 Diluted EPS – Non-GAAP $1.10 ± $0.10 Expected
Slide 15: Reminder: SGH Virtual Analyst Day
REMINDER SGH Virtual Analyst Day SMART Global Holdings will hold a Virtual Analyst Day on April 20, 2021. To register for the event please review the event information below. The event will include a live Q&A with members of SGH’s executive leadership team. Event Information: Date: Tuesday, April 20
Slide 16: Thank you
Thank you SMART GLOBAL HOLDINGS
Slide 17: Appendix
Appendix: SMART GLOBAL HOLDINGS
Slide 18: Reconciliation of gross profit and operating expenses
Three Months Ended February 26, November 27, February 28, 2021 2020 2020 Reconciliation of gross profit: GAAP gross profit $ 53,456 $ 52,644 $ 51,506 GAAP gross margin 17.6% 18.0% 18.9% Add: Share-based compensation included in cost of sales 804 838 731 Add: Intangible amortization included in cost
Slide 19: Reconciliation of net income and EPS
Three Months Ended February 26, November 27, February 28, 2021 2020 2020 Reconciliation of net income and earnings per share (diluted): GAAP net income (loss) $ 5,844 $ 2,027 $ (9,720) Adjustments to GAAP net income (loss): Share-based compensation 5,398 11,088 4,647 Amortization of intangible asset
Slide 20: Adjusted EBITDA Reconciliation
Three Months Ended February 26, November 27, February 28, 2021 2020 2020 GAAP net income (loss) $ 5,844 $ 2,027 $ (9,720) Share-based compensation expense 5,398 11,088 4,647 Amortization of intangible assets 3,413 3,413 3,413 Interest expense, net 4,365 3,154 4,150 Provision for income tax 1,200 3,2
Slide 21: Convertible Dilution Table
Convertible Share Net Share Dilution Dilution Table Capped Call Dilution to SGH Stock Price $40.00 0.00 0.00 0.00 $42.50 0.27 0.27 0.00 $45.00 0.60 0.60 0.00 $47.50 0.89 0.89 0.00 $50.00 1.16 1.16 0.00 $52.50 1.39 1.39 0.00 $55.00 1.61 1.52 0.10 $57.50 1.81 1.45 0.36 $60.00 1.99 1.39 0.60 $62.50 2.1
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