Penguin Solutions, Inc. · NASDAQ:PENG
Penguin Solutions — SMART Global Holdings — Q4 2020 Earnings Presentation
19 slides from Penguin Solutions's earnings presentation, Oct 1, 2020
Slide 1: Q4 FY2020 Financial Results Conference Call
OCTOBER 1, 2020 Q4 FY2020 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
Speakers Ajay Shah Executive Chairman of the Board Introduction SMART Global Holdings Mark Adams President and CEO Business Update SMART Global Holdings Jack Pacheco Financial Review COO and CFO SMART Global Holdings and Guidance 3
Slide 4: SMART's Business Update
❖ Strong finish to Fiscal 2020 • Fiscal Q4 2020 net sales and non-GAAP EPS both exceeded expectations ❖ Executing on Strategy to Grow and Diversify Revenues SMART’s • Entering Fiscal 2021 with a more balanced mix of revenue Business ❖ Positioned to Capitalize on LT Business Trends Update • Increasin
Slide 5: FY 2020: A More Balanced Mix of Revenue
FY 2020: A More Balanced Mix of Revenue 4% 18% 23% 34% 38% 42% 62% 44% 35% FY 2018 FY 2019 FY 2020 Brazil Specialty Memory Specialty Compute & Storage Note: Net sales by business unit 5
Slide 6: Specialty Compute & Storage
– Named HPC OEM Preferred Partner of the Year by NVIDIA based on continued growth of large AI system installations Specialty – Together with AMD, announced the first petaflop of compute capacity using Penguin Computing’s Compute & POD clusters and AMD’s CPUs to further COVID-19 Storage related resea
Slide 7: Specialty Memory
– Design activity remains strong; New wins in Networking, Telecom and Consumer Specialty – Announced new European sales team to broaden geographic reach Memory – Introduced Gen-Z development kit, moving up the stack to create higher-value solutions for our customers 7
Slide 8: Brazil
– Mobile memory business continues to recover. Both average densities and unit sales increased in the quarter – Qualified advanced new high density eMCP Brazil products with 11 high stacking enabling 64GB and 128GB densities – Increasing focus on new growth opportunities such as IoT and SSDs 8
Slide 9: CFO Financial Review
CFO Financial Review JACK PACHECO COO and CFO SMART Global Holdings 9
Slide 10: Q4 FY2020 Financial Highlights
Q4 FY2020 Financial Highlights $297.0 M $20.4M $0.82 $150.8M Net Sales Non-GAAP Net Income Non-GAAP EPS Cash & Equivalents Up 5.6% vs. Q3 FY20 Up 19.5% vs. Q3 FY20 Up 17.1% vs. Q3 FY20 Up 14% vs. Q3 FY20 • Net Sales driven by Specialty Compute & Storage and Brazil • Strong growth in Non-GAAP Net Inc
Slide 11: Q4 FY2020 Net Sales by End Market
Q4 FY2020 Net Sales by End Market Industrial, Mobile Defense & Other & PCs 32% 31% $297 M 12% 25% Network & Servers & Telecom Storage Strength in Mobile & PCs, Industrial, Defense, and Networking and Telecom, more than offset weakness in Servers and Storage 11
Slide 12: Q4 FY2020 Income Statement Highlights – Non-GAAP
Q4 FY2020 Income Statement Highlights – Non-GAAP Q4 FY19 Q3 FY20 Q4 FY20 Gross profit $53.4 M $55.9 M $57.8 M Gross margin 19.2% 19.9% 19.5% Gross Margin - SCSS 23% 24% 28% Gross Margin - Specialty Memory 21% 16% 16% Gross Margin - Brazil 14% 21% 19% Operating expenses $35.4 M $35.5 M $29.4 M Net in
Slide 13: Q4 FY2020 Balance Sheet Highlights
Q4 FY2020 Balance Sheet Highlights Working Capital Q3 FY20 Q4 FY20 Cash Flow Q3 FY20 Q4 FY20 Net Accounts Receivables $223.2 M $215.9 M Cash & equivalents $131.8 M $150.8 M Day Sales Outstanding 45 days 45 days CF from Operations $13.6 M $16.2 M Inventory $180.6 M $163.0 M LTM CF from Operations $16
Slide 14: Q1 FY2021 Guidance
Q1 FY2021 Guidance Net Sales $280M to $300M Gross margin 18% to 19% GAAP EPS* $0.28 +/- $0.05 Non-GAAP EPS* $0.70 +/- $0.05 Income tax provision 12% to 16% Capital expenditures $10M to $15M *Based upon ~25 million diluted shares Note: guidance does not include any view on the foreign exchange gains
Slide 15: Thank you
Thank you : SMART GLOBAL HOLDINGS
Slide 16: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations
Slide 17: Reconciliation of gross profit and operating expenses
Three Months Ended August 28, May 29, August 30, 2020 2020 2019 Reconciliation of gross profit: GAAP gross profit $ 56,337 $ 54,233 $ 52,292 GAAP gross margin 19.0% 19.3% 18.8% Add: Share-based compensation included in cost of sales 861 699 682 Add: Intangible amortization included in cost of sales
Slide 18: Reconciliation of net income and EPS
Three Months Ended August 28, May 29, August 30, 2020 2020 2019 Reconciliation of net income (loss) and earnings per share (diluted): GAAP net income (loss) $ 7,527 $ 825 $ 5,625 Adjustments to GAAP net income (loss): Share-based compensation 3,206 4,907 5,563 Amortization of intangible assets 3,414
Slide 19: Reconciliation of Adjusted EBITDA
Three Months Ended August 28, May 29, August 30, 2020 2020 2019 GAAP net income (loss) $ 7,527 $ 825 $ 5,625 Share-based compensation expense 3,206 4,907 5,563 Amortization of intangible assets 3,414 3,414 2,601 Interest expense, net 3,265 3,094 4,567 Provision for income tax 6,139 2,700 2,059 Depre
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