AP NEWS

SMART Global Holdings Reports Fourth Quarter and Full Year Fiscal 2018 Financial Results

October 4, 2018

NEWARK, Calif., Oct. 04, 2018 (GLOBE NEWSWIRE) -- SMART 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: Full Year Fiscal 2018 Highlights: -- Net sales of $374.0 million, 68% higher than -- Net sales of $1.3 billion, 69% higher than prior year ago quarter fiscal year -- GAAP operating income of $45.0 million -- GAAP operating income of $170.2 million -- GAAP net income of $29.7 million -- GAAP net income of $119.5 million -- Adjusted EBITDA of $51.0 million -- Adjusted EBITDA of $195.5 million -- GAAP diluted EPS of $1.28 -- GAAP diluted EPS of $5.17 -- Non-GAAP diluted EPS of $1.72 -- 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 GAAP(1) Non-GAAP(2) ----------------------- (In millions, except per share amounts) Q4 FY18 Q3 FY18 Q4 FY17 Q4 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 (loss) $ 29.7 $ 31.9 $ (10.2 ) $ 40.0 $ 43.0 $ 16.5 ------------------------------------------ - ----- - ----- - ----- - - ----- - ----- - ----- Diluted earnings (loss) per share (EPS)(3) $ 1.28 $ 1.37 $ (0.48 ) $ 1.72 $ 1.84 $ 0.75 ------------------------------------------ - ----- - ----- - ----- - - ----- - ----- - -----

Annual Financial Results GAAP(1) Non-GAAP(2) ------------------- ----------------- (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 $ 36.3 ------------------------------------------------------------------ - ------- - ----- - - ------- - ----- Diluted earnings (loss) per share (EPS)(3) $ 5.17 $ (0.49 ) $ 6.36 $ 2.25 ------------------------------------------------------------------ - ------- - ----- - - ------- - ----- (1) GAAP represents U.S. Generally Accepted Accounting Principles. Please refer to the “Non-GAAP Information” section and the “Reconciliation of Non-GAAP Financial (2) 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. We exclude foreign currency gains/losses from our non-GAAP diluted EPS as we believe this non-GAAP (3) 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 HighlightsSMART 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 OutlookThe 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 diluted share count 23.2 million ---------------------------------- --------------------

Conference Call DetailsSMART 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 www.smartgh.com or by calling US toll free +1-855-859-2056; Passcode: 9390108.

Forward-Looking StatementsThis 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 InformationCertain 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 www.smartgh.com, www.smartm.com, www.smarth.com, www.smartsscs.com and www.penguincomputing.com for more information.

SMART Global Holdings, Inc. and Subsidiaries Consolidated Statements of Income (In thousands, except per share data) Three Months Ended Fiscal Year Ended ------------------------------------- -------------------------- August 31, May 25, August 25, August 31, August 25, 2018 2018 2017 2018 2017 ----------- ----------- ----------- ------------- ----------- Net sales: Brazil $ 198,624 $ 232,742 $ 134,765 $ 797,849 $ 398,175 Specialty Memory 122,820 102,735 88,254 438,446 363,116 Specialty Compute and Storage Solutions 52,526 — — 52,526 — - ------- - - ------- - - ------- - - --------- - - ------- - Total net sales 373,970 335,477 223,019 1,288,821 761,291 Cost of sales (1)(2) 291,291 257,423 175,011 997,235 599,041 Gross profit 82,679 78,054 48,008 291,586 162,250 - ------- - - ------- - - ------- - - --------- - - ------- - Operating expenses: Research and development (1) (2) 11,659 9,763 9,718 39,824 38,160 Selling, general and administrative(1) 29,039 19,597 17,722 84,541 66,759 (2) Change in estimated fair value of acquisition-related contingent consideration (3,000 ) — — (3,000 ) — Management advisory fees — — — — 3,000 Restructuring — — — — 457 Total operating expenses 37,698 29,360 27,440 121,365 108,376 - ------- - - ------- - - ------- - - --------- - - ------- - Income from operations 44,981 48,694 20,568 170,221 53,874 Other income (expense): Interest expense, net (6,217 ) (4,098 ) (6,132 ) (19,144 ) (29,204 ) Other income (expense), net (5,987 ) (7,145 ) (20,887 ) (13,299 ) (22,551 ) Total other expense (12,204 ) (11,243 ) (27,019 ) (32,443 ) (51,755 ) - ------- - - ------- - - ------- - - --------- - - ------- - Income (loss) before income taxes 32,777 37,451 (6,451 ) 137,778 2,119 Provision for income taxes 3,059 5,505 3,758 18,315 9,914 Net income (loss) $ 29,718 $ 31,946 $ (10,209 ) $ 119,463 $ (7,795 ) - ------- - - ------- - - ------- - - --------- - - ------- - Earnings (loss) per share: Basic $ 1.33 $ 1.44 $ (0.48 ) $ 5.42 $ (0.49 ) - ------- - - ------- - - ------- - - --------- - - ------- - Diluted $ 1.28 $ 1.37 $ (0.48 ) $ 5.17 $ (0.49 ) - ------- - - ------- - - ------- - - --------- - - ------- - Shares used in computing earnings (loss) per share: Basic 22,383 22,206 21,435 22,051 15,785 - ------- - - ------- - - ------- - - --------- - - ------- - Diluted 23,270 23,306 21,435 23,119 15,785 - ------- - - ------- - - ------- - - --------- - - ------- - (1) Includes share-based compensation expense as follows: Cost of sales $ 475 $ 414 $ 192 $ 1,334 $ 636 Research and development 572 325 232 1,459 655 Selling, general and administrative 2,911 2,558 1,407 7,764 4,073 Total stock-based compensation expense $ 3,958 $ 3,297 $ 1,831 $ 10,557 $ 5,364 - ------- - - ------- - - ------- - - --------- - - ------- - (2) Includes amortization of intangible assets expense as follows: Cost of sales $ 7 $ — $ — $ 7 $ — Research and development 252 245 1,225 987 4,897 Selling, general and administrative 2,144 976 1,746 5,136 7,042 Total amortization expense $ 2,403 $ 1,221 $ 2,971 $ 6,130 $ 11,939 - ------- - - ------- - - ------- - - --------- - - ------- -

SMART Global Holdings, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures to GAAP Results (In thousands, except per share data) Three Months Ended Fiscal Year Ended ---------------------------------- ------------------------ August 31, May 25, August 25, August 31, August 25, 2018 2018 2018 2017 2017 ---------- ---------- ---------- ----------- ----------- Reconcil iation of gross profit: GAAP gross $ 82,679 $ 78,054 $ 48,008 $ 291,586 $ 162,250 profit GAAP gross 22.1 % 23.3 % 21.5 % 22.6 % 21.3 % margin Add: Share-ba sed compensa tion 475 414 192 1,334 636 included in cost of sales Add: Intangib le amortiza tion 7 — — 7 — included in cost of sales Add: Purchase accounti 631 — — 631 — ng adjustme nt - ------ - - ------ - - ------ - - ------- - - ------- - Non-GAAP gross $ 83,792 $ 78,468 $ 48,200 $ 293,558 $ 162,886 profit - ------ - - ------ - - ------ - - ------- - - ------- - Non-GAA P 22.4 % 23.4 % 21.6 % 22.8 % 21.4 % gross margin Reconcil iation of operatin g expenses : GAAP operatin $ 37,698 $ 29,360 $ 27,440 $ 121,365 $ 108,376 g expenses Less: Share-ba sed compensa tion expense included in opex Researc h and 572 325 232 1,459 655 develop ment Selling , general 2,911 2,558 1,407 7,764 4,073 and adminis trative - ------ - - ------ - - ------ - - ------- - - ------- - Total 3,483 2,883 1,639 9,223 4,728 - ------ - - ------ - - ------ - - ------- - - ------- - Less: Amortiza tion of intangib le assets included in opex Researc h and 252 245 1,225 987 4,897 develop ment Selling , general 2,144 976 1,746 5,136 7,042 and adminis trative Total 2,396 1,221 2,971 6,123 11,939 - ------ - - ------ - - ------ - - ------- - - ------- - Less: S-1 — — — 813 — related costs Less: Acquisit ion-rela 2,844 591 — 3,435 — ted expenses Less: Continge nt consider ation (3,000 ) — — (3,000 ) — fair value adjustme nt - ------ - - ------ - - ------ - - ------- - - ------- - Non-GAAP operatin $ 31,975 $ 24,665 $ 22,830 $ 104,771 $ 91,709 g expenses - ------ - - ------ - - ------ - - ------- - - ------- - Reconcil iation of income from operatio ns: GAAP income from $ 44,981 $ 48,694 $ 20,568 $ 170,221 $ 53,874 operatio ns GAAP operati 12.0 % 14.5 % 9.2 % 13.2 % 7.1 % ng margin Add: Share-ba sed 3,958 3,297 1,831 10,557 5,364 compensa tion expense Add: Amortiza tion of 2,403 1,221 2,971 6,130 11,939 intangib le assets Add: Purchase accounti 631 — — 631 — ng adjustme nt Add: S-1 — — — 813 — related costs Add: Acquisit ion-rela 2,844 591 — 3,435 — ted expenses Less: Continge nt consider ation (3,000 ) — — (3,000 ) — fair value adjustme nt - ------ - - ------ - - ------ - - ------- - - ------- - Non-GAAP income from $ 51,817 $ 53,803 $ 25,370 $ 188,787 $ 71,177 operatio ns - ------ - - ------ - - ------ - - ------- - - ------- - Non-GAA P operati 13.9 % 16.0 % 11.4 % 14.6 % 9.3 % ng margin Reconcil iation of income before income taxes: GAAP income before $ 32,777 $ 37,451 $ (6,451 ) $ 137,778 $ 2,119 income taxes Add: Share-ba sed 3,958 3,297 1,831 10,557 5,364 compensa tion expense Add: Amortiza tion of 2,403 1,221 2,971 6,130 11,939 intangib le assets Add: Purchase accounti 631 — — 631 — ng adjustme nt Add: S-1 — — — 813 — related costs Add: Acquisit ion-rela 2,844 591 — 3,435 — ted expenses Less: Continge nt consider ation (3,000 ) — — (3,000 ) — fair value adjustme nt Less: Loss on early — — 6,743 — 6,743 debt repaymen t Less: Amortiza tion of debt — — 1,214 — 5,127 discount related to warrants Less: Loss on extingui — — 15,194 — 16,579 shment of LT debt Add: Foreign currency 5,968 6,932 (1,032 ) 13,227 (285 ) (gains) losses - ------ - - ------ - - ------ - - ------- - - ------- - Non-GAAP income before $ 45,581 $ 49,492 $ 20,470 $ 169,571 $ 47,586 income taxes - ------ - - ------ - - ------ - - ------- - - ------- -

SMART Global Holdings, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures to GAAP Results (In thousands, except per share data) Three Months Ended Fiscal Year Ended ----------------------------------- ----------------------- August 31, May 25, August 25, August 31, August 25, 2018 2018 2017 2018 2017 ---------- ---------- ----------- ----------- ---------- Reconciliation of provision for income taxes: GAAP provision for income taxes $ 3,059 $ 5,505 $ 3,758 $ 18,315 $ 9,914 GAAP effective tax rate 9.3 % 14.7 % -58.3 % 13.3 % 467.9 % Tax effect of adjustments to GAAP results (2,529 ) (1,025 ) (214 ) (4,273 ) (1,367 ) - ------ - - ------ - - ------- - - ------- - - ------ - Non-GAAP provision for income taxes $ 5,588 $ 6,530 $ 3,972 $ 22,588 $ 11,281 - ------ - - ------ - - ------- - - ------- - - ------ - Non-GAAP effective tax rate 12.3 % 13.2 % 19.4 % 13.3 % 23.7 % Reconciliation of net income and earnings per share (diluted): GAAP net income (loss) $ 29,718 $ 31,946 $ (10,209 ) $ 119,463 $ (7,795 ) Adjustments to GAAP net income: Share-based compensation 3,958 3,297 1,831 10,557 5,364 Amortization of intangible assets 2,403 1,221 2,971 6,130 11,939 Purchase accounting adjustment 631 — — 631 — S-1 related costs — — — 813 — Acquisition-related expenses 2,844 591 — 3,435 — Contingent consideration fair value adjustment (3,000 ) — — (3,000 ) — Loss on early debt repayment — — 6,743 — 6,743 Amortization of debt discount related to — — 1,214 — 5,127 warrants Loss on extinguishment of LT debt — — 15,194 — 16,579 Foreign currency (gains) losses 5,968 6,932 (1,032 ) 13,227 (285 ) Tax effect of items excluded from non-GAAP (2,529 ) (1,025 ) (214 ) (4,273 ) (1,367 ) results - ------ - - ------ - - ------- - - ------- - - ------ - Non-GAAP net income $ 39,993 $ 42,962 $ 16,498 $ 146,983 $ 36,305 - ------ - - ------ - - ------- - - ------- - - ------ - Shares used in computing earnings per share 23,270 23,306 22,011 23,119 16,171 (diluted) - ------ - - ------ - - ------- - - ------- - - ------ - Non-GAAP earnings per share (diluted) $ 1.72 $ 1.84 $ 0.75 $ 6.36 $ 2.25 - ------ - - ------ - - ------- - - ------- - - ------ - GAAP income (loss) per share (diluted) $ 1.28 $ 1.37 $ (0.48 ) $ 5.17 $ (0.49 ) - ------ - - ------ - - ------- - - ------- - - ------ -

SMART Global Holdings, Inc. and Subsidiaries Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (In thousands) Three Months Ended Fiscal Year Ended --------------------------------- ----------------------- August 31, May 25, August 25, August 31, August 25, 2018 2018 2017 2018 2017 ---------- -------- ----------- ----------- ---------- GAAP net income (loss) $ 29,718 $ 31,946 $ (10,209 ) $ 119,463 $ (7,795 ) Share-based compensation expense 3,958 3,297 1,831 $ 10,557 5,364 Amortization of intangible assets 2,403 1,221 2,971 6,130 11,939 Interest expense, net 6,217 4,098 6,132 19,144 29,204 Provision for income tax 3,059 5,505 3,758 18,315 9,914 Depreciation 5,124 4,806 4,869 20,052 21,300 S-1 related costs — — — 813 — Investment advisory fees — — — — 540 Restructuring — — — — 457 Obsolete inventory related to restructuring — — — — 372 Management advisory fees — — — — 3,000 Debt extension costs(1) — — — — 1,745 Loss on early debt repayment(2) — — 6,743 — 6,743 Loss on extinguishment of LT debt(3) — — 15,194 — 16,579 Purchase accounting adjustment(4) 631 — — 631 — Acquisition-related expenses(4) 2,844 591 — 3,435 25 Contingent consideration fair value adjustment(4) (3,000 ) — — (3,000 ) — - ------ - - ------ - ------- - - ------- - - ------ - Adjusted EBITDA $ 50,954 $ 51,464 $ 31,289 $ 195,540 $ 99,387 ------------------------------------------------ - ------ - - ------ - ------- - - ------- - - ------ - (1) Debt extension costs consist of $1.7 million associated with the amendment of our senior secured term loan and revolving credit facility in November 2016. (2) Loss on early payment of term loan for principal amount of $61.1 million in June 2017 related to IPO. (3) Consists of $15.2 million loss on extinguishment of long-term debt for principal payment of $151.0 and $1.4 million loss on a February 2017 extinguishment. (4) Amounts in FY18 related to acquisition of Penguin Computing in June 2018.

SMART Global Holdings, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) August 31, August 25, 2018 2017 - -------- - - -------- - Assets Current assets: Cash and cash equivalents $ 31,375 $ 22,436 Accounts receivable, net 237,212 183,303 Inventories 221,419 127,135 Prepaid expenses and other current assets 32,043 14,115 - -------- - - -------- - Total current assets 522,049 346,989 Property and equipment, net 56,615 55,182 Other noncurrent assets 22,449 26,728 Intangible assets, net 26,255 5,107 Goodwill 45,394 46,022 Total assets $ 672,762 $ 480,028 - -------- - - -------- - Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 223,186 $ 189,717 Accrued liabilities 45,190 27,316 Current portion of long-term debt 27,409 22,841 - -------- - - -------- - Total current liabilities 295,785 239,874 Long-term debt 184,190 154,450 Other long-term liabilities 5,659 3,308 Total liabilities $ 485,634 $ 397,632 - -------- - - -------- - Shareholders’ equity: Ordinary shares 678 653 Additional paid-in capital 250,191 232,162 Accumulated other comprehensive loss (175,995 ) (143,210 ) Retained earnings 112,254 (7,209 ) - -------- - - -------- - Total shareholders’ equity 187,128 82,396 Total liabilities and shareholders’ equity $ 672,762 $ 480,028 - -------- - - -------- -

SMART Global Holdings, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Three Months Ended Fiscal Year Ended --------------------------------------- -------------------------- August 31, May 25, August 25, August 31, August 25, 2018 2018 2017 2018 2017 ------------ ----------- ------------ ------------ ------------ Cash flows from operating activities: Net income (loss) $ 29,718 $ 31,946 $ (10,209 ) $ 119,463 $ (7,795 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 7,526 6,028 7,839 26,182 33,238 Share-based compensation 3,958 3,297 1,831 10,557 5,364 Provision for doubtful accounts (73 ) (80 ) (82 ) (86 ) (51 ) receivable and sales returns Deferred income tax benefit (1,444 ) (422 ) (1,194 ) (2,820 ) (2,389 ) (Gain) loss on disposal of 461 (14 ) 223 691 352 property and equipment Write off of long-term asset — 250 — 250 — Extinguishment loss on long-term — — 15,194 — 16,580 debt Loss on early debt payment — — 6,744 — 6,744 Amortization of debt discounts and 807 714 1,807 2,972 8,231 issuance costs Change in fair value of contingent (3,000 ) — — (3,000 ) — consideration Changes in operating assets and liabilities: Accounts receivable 31,409 (45,799 ) (6,910 ) (55,297 ) (40,426 ) Inventories (14,495 ) (6,384 ) 9,333 (42,435 ) (21,851 ) Prepaid expenses and other assets (5,241 ) (5,186 ) (799 ) (8,736 ) (58 ) Accounts payable (66,331 ) 46,532 (22,407 ) 17,548 (10,608 ) Accrued expenses and other 7,321 (2,545 ) 4,639 2,618 11,736 liabilities Net cash provided by (used in) (9,384 ) 28,337 6,009 67,907 (933 ) operating activities - -------- - - ------- - - -------- - - -------- - - -------- - Cash flows from investing activities: Capital expenditures and deposits on (7,487 ) (7,794 ) (7,499 ) (25,738 ) (18,678 ) equipment Proceeds from sale of property and 204 35 184 305 651 equipment Acquisition of business, net of cash (42,316 ) — — (42,316 ) — acquired - ------- - - -------- - - -------- - Net cash used in investing (49,599 ) (7,759 ) (7,315 ) (67,749 ) (18,027 ) activities - -------- - - ------- - - -------- - - -------- - - -------- - Cash flows from financing activities: Long-term debt payment (5,865 ) (6,093 ) (2,009 ) (24,267 ) (19,698 ) Early payment of long-term debt — — (61,127 ) — (61,127 ) Payment for extinguishment of — — (151,008 ) — (151,946 ) long-term debt Proceeds from issuance of long-term 59,365 — 156,962 59,365 156,962 debt, net of costs paid Fees paid for revolving line of — — (3,167 ) (768 ) (3,167 ) credit refinancing Issuance of ordinary shares from an initial public offering, net of underwriting commissions — — 63,507 — 63,507 Payment of costs related to initial — — (949 ) (1,591 ) (1,149 ) public offering Proceeds from borrowings under 134,500 69,000 119,500 412,000 457,750 revolving line of credit Repayments of borrowings under (166,789 ) (69,000 ) (119,500 ) (444,289 ) (457,750 ) revolving line of credit Proceeds from issuance of ordinary shares 1,324 1,993 58 7,494 406 from share option exercises Tax payments due upon issuance of ordinary shares for release of restricted stock units — — (763 ) — (763 ) - -------- - - ------- - - -------- - - -------- - - -------- - Net cash provided by (used) in 22,535 (4,100 ) 1,504 7,944 (16,975 ) financing activities Effect of exchange rate changes on 3,328 (3,799 ) (103 ) 837 (263 ) cash and cash equivalents - -------- - - ------- - - -------- - - -------- - - -------- - Net increase (decrease) in cash (33,120 ) 12,679 95 8,939 (36,198 ) and cash equivalents Cash and cash equivalents at 64,495 51,816 22,341 22,436 58,634 beginning of period - -------- - - ------- - Cash and cash equivalents at end of $ 31,375 $ 64,495 $ 22,436 $ 31,375 $ 22,436 period - -------- - - ------- - - -------- - - -------- - - -------- -

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

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