Penguin Solutions, Inc. · NASDAQ:PENG
Penguin Solutions — SMART Global Holdings — Q3 FY2020 Earnings Presentation
16 slides from Penguin Solutions's earnings presentation, Jul 7, 2020
Slide 1: Q3 FY2020 Financial Results Conference Call
J U LY 7 , 2 0 2 0 Q3 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: CEO Overview
CEO Overview AJAY SHAH Chairman and CEO SMART Global Holdings 3
Slide 4: Q3 FY2020 Highlights
Q3 FY2020 Highlights $281.3 M $17.1M $0.70 $91.0M Net Sales Non-GAAP Net Income Non-GAAP EPS LTM FCF Up 19% YoY Up 116% YoY Up 106% YoY Up 23% YoY • Revenues grew sequentially and year over year with new products and customers • Non-GAAP EPS more than doubled year over year, demonstrating strong ope
Slide 5: Q3 FY2020 Revenue Mix
Specialty Memory (45%) Q3 FY2020 Revenue Mix – Benefitting from increases in memory demand & stable market prices – New DDR4 Module-in-a-PackageTM (MIPTM) expands memory within a minimal footprint – Began production shipments of new DDR4 module for edge and cloud access applications Specialty – New
Slide 6: SMART's Business Update
Strong Financial Performance & Position • Cash position of $130M+ with minimal current debt • LTM ROIC of 16% • LTM Free Cash Flow of $91M SMART’s Favorable longer-term underlying business trends • Need for more Edge computing, HPC, and AI-related computing, Business communications and storage • Gre
Slide 7: CFO Financial Review
CFO Financial Review JACK PACHECO COO and CFO SMART Global Holdings 7
Slide 8: Q3 FY2020 Net Sales by End Market
Q3 FY2020 Net Sales by End Market Industrial, Mobile Defense & Other & PCs 27% 33% $281 M 15% 25% Network & Servers & Telecom Storage Strength in Servers, Networking and Telecom end markets drove the quarter 8
Slide 9: Q3 FY2020 Income Statement Highlights – Non-GAAP
Q3 FY2020 Income Statement Highlights – Non-GAAP Q3 FY19 Q2 FY20 Q3 FY20 vs. Prior Q Gross profit $43.7 M $52.9 M $55.9 M 6% Operating expenses $30.5 M $35.6 M $35.5 M 0% Net income $7.9 M $12.8 M $17.1 M 34% Earnings per Share $0.34 $0.52 $0.70 35% Adjusted EBITDA $19.2 M $22.3 M $25.4 M 14% SMART
Slide 10: Q3 FY2020 Balance Sheet Highlights
Q3 FY2020 Balance Sheet Highlights Working Capital Q2 FY20 Q3 FY20 Cash Flow Q2 FY20 Q3 FY20 Net Accounts Receivables $217.4 M $223.2 M Cash & equivalents $141.9 M $131.8 M Day Sales Outstanding 47 days 45 days CF from Operations $22.3 M $13.6 M Inventory $161.4 M $180.6 M LTM CF from Operations $14
Slide 11: Q4 FY2020 Guidance
Q4 FY2020 Guidance Net Sales $290M to $310M Gross margin 20% to 22% GAAP EPS* $0.34 +/- $0.08 Non-GAAP EPS* $0.78 +/- $0.08 Income tax provision 16% to 20% Capital expenditures $6M to $10M *Based upon ~24.5 million diluted shares Note: guidance does not include any view on the foreign exchange gains
Slide 12: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations
Slide 13: Reconciliation of gross profit and operating expenses
Three Months Ended May 29, February 28, May 31, 2020 2020 2019 Reconciliation of gross profit: GAAP gross profit S$ 54233 § 51,506 $ 43,035 GAAP gross margin 19.3% 189% 18.3% Add Share-based compensation inchided in cost of sales 699 731 651 Add Intangible am ortization included in cost of sales 647
Slide 14: Reconciliation of net income and EPS
Three Months Ended May 29, February 28, May 31, 2020 2020 2019 Reconciliation of net income (loss) and earnings per share (diluted): GAAP net income (loss) $ s25 $ (9,720) $ 1,945 Adjustments to GAAP net income (loss): Share-based compensation 4,907 4,647 4,433 Am ortization of intangible assets 3,4
Slide 15: Adjusted EBITDA reconciliation
Three Months Ended May 29, February 28, May 31, 2020 2020 2019 GAAP net income (loss) $ 825 $ (9,720) $ 1,945 Share-based compensation expense 4.907 4.647 4.433 Amortization of intangible assets 3.414 3.413 976 Interest expense, net 3,094 4.150 5,001 Provision for income tax 2.700 1,340 550 Deprecia
Slide 16: Free Cash Flow and ROIC reconciliation
Three Months Ended ($ in thousands) Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 LTM'Q320 Free Cash Flow - reconciliation: Net Cash From Operating Activities $ 48,941 $ 25,267 $ 23,334 $ 13,626 Cap Ex from Investing Activities (3,321) (5,158) (4,210) (7,521) Free Cash Flow $ 45,620 $ 20,109 $ 19,124 $ 6,105 $ 90
SMART Global Holdings — Q3 FY2020 Earnings Presentation on 6ix