GlobeNewswire Inc | Oct 1, 2020 04:02PM EDT

October 01, 2020

NEWARK, Calif., Oct. 01, 2020 (GLOBE NEWSWIRE) -- SMART Global Holdings, Inc. (SMART or the Company) (NASDAQ: SGH), today reported financial results for the fourth quarter and full year fiscal 2020 ended August 28, 2020.

Fourth Quarter Fiscal 2020 Highlights:

-- Net sales of $297.0 million, 6.7% higher than the year ago quarter. -- GAAP net income of $7.5 million, or $0.30 per share, 33.8% and 28.3% higher than the year ago quarter, respectively. -- Non-GAAP net income of $20.4 million or $0.82 per share, 72.2% and 65.2% higher than the year ago quarter, respectively. -- Adjusted EBITDA of $33.0 million, 30.6% higher than the year ago quarter

Fiscal 2020 Highlights:

-- Net sales of $1.1 billion, versus $1.2 billion for the prior fiscal year. -- GAAP net loss of $1.1 million, or $0.05 per share. -- Non-GAAP net income of $63.7 million, or $2.59 per share. -- Adjusted EBITDA of $104.2 million. -- Ending cash and equivalents balance exceeded $150 million.

I am pleased to announce a strong conclusion to our fiscal 2020, commented Mark Adams, President and CEO. Our fourth fiscal quarter results demonstrate the strength of our business during these challenging times. Fourth quarter revenue grew by 5.6 percent sequentially, driven by strength in both our Specialty Compute and Storage Solutions and Brazil businesses. Additionally, reflecting the operating leverage in our business model, we achieved non-GAAP earnings per share of $0.82, more than 17 percent higher than the previous quarter.

Given our strong balance sheet, we believe we are well-positioned to build on our growth and diversification strategy while leveraging our strong customer relationships, established global manufacturing and supply chain capabilities, and our track record of operational excellence, concluded Mr. Adams.

Quarterly Financial Results GAAP ^(1) Non-GAAP ^(2)(In millions, except per share Q4 FY20 Q3 FY20 Q4 FY19 Q4 FY20 Q3 FY20 Q4 FY19amounts)Net sales $ 297.0 $ 281.3 $ 278.4 $ 297.0 $ 281.3 $ 278.4Gross profit $ 56.3 $ 54.2 $ 52.3 $ 57.8 $ 55.9 $ 53.4Operating income $ 17.2 $ 10.1 $ 11.4 $ 28.4 $ 20.3 $ 18.0Net income $ 7.5 $ 0.8 $ 5.6 $ 20.4 $ 17.1 $ 11.9Diluted earnings per share $ 0.30 $ 0.03 $ 0.24 $ 0.82 $ 0.70 $ 0.50(EPS)

Annual Financial Results GAAP ^(1) Non-GAAP ^(2) (In millions, except per share FY20 FY19 FY20 FY19 amounts)Net sales $ 1,122.4 $ 1,212.0 $ 1,122.4 $ 1,212.0 Gross profit $ 216.4 $ 237.5 $ 222.3 $ 240.6 Operating income $ 41.3 $ 89.1 $ 84.2 $ 113.2 Net income (loss) $ (1.1 ) $ 51.3 $ 63.7 $ 78.3 Diluted earnings per share (EPS) $ (0.05 ) $ 2.19 $ 2.59 $ 3.34 (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 reportingreferenced above and a reconciliation of such measures to our nearest GAAP measures.

Business OutlookThe following statements are based upon management's current expectations for the first quarter of fiscal 2021 ending November 27, 2020. These statements are forward-looking and actual results may differ materially. SMART undertakes no obligation to update these statements.

Net Sales $280 to $300 millionGross Margin - GAAP / Non-GAAP 18% to 19%Diluted EPS - GAAP $0.28 $0.05 Share-based compensation per share $0.20Intangible amortization per share $0.14Convertible debt discount OID and fees per share $0.08 Diluted EPS - Non-GAAP $0.70 $0.05 Expected diluted share count 25.0 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, or International toll free +1-213-660-0710 using access code 4779109. We will post an accompanying slide presentation to our website prior to the beginning of the call.

A replay of the conference call will be available for one week following todays call through the Events section of the SMART website at www.smartgh.comor by calling US toll free +1-855-859-2056, or International toll free +1 404-537-3406; Passcode: 4779109.

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 SMARTs 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; disruptions in our operations or in global markets as a result of the outbreak of COVID-19; changes in trade regulations or adverse developments in international trade relations and agreements; 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 incentives for local manufacturing 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 SMARTs 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, and non-GAAP net income per diluted share. We define Adjusted EBITDA as GAAP net income (loss) plus net interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense, loss on extinguishment of debt/revolver, capped call mark to market (MTM) adjustment, restructuring expenses, integration expenses, COVID-19 expenses, acquisition-related expenses, gain on settlements 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 share-based compensation expense, intangible amortization expense, loss on extinguishment of debt/revolver, capped call MTM adjustment, convertible debt original issue discount (OID) and fees, restructuring expenses, integration expenses, COVID-19 expenses, acquisition-related expenses, gain on settlements and other infrequent or unusual expenses, 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 HoldingsThe SMART lines of business are leading designers andmanufacturers of electronic products focused on memory and computing technology areas. The Company specializes in application specific product development and support for customers in enterprise, government and OEM sales channels. Customers rely on SMART as a strategic supplier with top tier customer service, product quality, and technical support with engineering, sales, manufacturing, supply chain and logistics capabilities worldwide. The Company targets customers in markets such as communications, storage, networking, mobile, industrial automation, industrial internet of things, government, military, edge computing and high performance computing. SMART operates in three primary product areas: Specialty Memory products, Brazil products and Specialty Compute and Storage Solutions.

For more information about SMART Global Holdings business units, visit: SMART Modular Technologies;SMART Embedded Computing; SMART Supply Chain Services; and Penguin Computing.

SMART Global Holdings, Inc.and SubsidiariesConsolidated Income Statements(In thousands, except per share data) Three Months Ended Fiscal Year Ended August 28, May 29, August 30, August 28, August 30, 2020 2020 2019 2020 2019Net sales: Specialty Memory Products $ 125,142 $ 127,700 $ 104,634 $ 467,826 $ 458,946 Brazil Products 105,011 92,701 89,123 389,411 536,495 Specialty Compute and Storage 66,877 60,886 84,643 265,140 216,558 Solutions Total net sales 297,030 281,287 278,400 1,122,377 1,211,999 Cost of sales ^(1) (2) 240,693 227,054 226,108 905,981 974,472 Gross profit 56,337 54,233 52,292 216,396 237,527 Operating expenses: Research and development ^(1) 8,032 14,436 13,536 52,056 47,920 Selling, general and 27,587 29,733 30,024 119,523 103,226 administrative^ (1) (2) Restructuring charge 3,487 ? ? 3,487 ? Change in estimated fair value of ? ? (2,700 ) ? (2,700 ) acquisition-relatedcontingent consideration Total operating expenses 39,107 44,169 40,860 175,065 148,446 Income from operations 17,230 10,064 11,432 41,330 89,081 Other income (expense): Interest expense, net (3,265 ) (3,094 ) (4,567 ) (15,000 ) (20,716 ) Other income (expense), net (299 ) (3,445 ) 819 (16,970 ) (2,161 ) Total other expense (3,564 ) (6,539 ) (3,748 ) (31,970 ) (22,877 ) Income before income taxes 13,666 3,525 7,684 9,360 66,204 Provision for income taxes 6,139 2,700 2,059 10,503 14,872 Net income (loss) $ 7,527 $ 825 $ 5,625 $ (1,143 ) $ 51,332 Earnings per share: Basic $ 0.31 $ 0.03 $ 0.24 $ (0.05 ) $ 2.24 Diluted $ 0.30 $ 0.03 $ 0.24 $ (0.05 ) $ 2.19 Shares used in computing earnings per share: Basic 24,290 24,066 23,366 23,994 22,959 Diluted 24,839 24,431 23,825 23,994 23,468 (1) Includes share-based compensation expense as follows: Cost of sales $ 861 $ 699 $ 682 $ 3,022 $ 2,485 Research and development 763 780 687 3,069 2,654 Selling, general and 1,582 3,428 4,194 12,625 13,060 administrative Total stock-based $ 3,206 $ 4,907 $ 5,563 $ 18,716 $ 18,199 compensation expense (2) Includes amortization ofintangible assets expense as follows: Cost of sales $ 647 $ 647 $ 436 $ 2,588 $ 566 Selling, general and 2,767 2,767 2,165 11,066 5,048 administrative Total amortization expense $ 3,414 $ 3,414 $ 2,601 $ 13,654 $ 5,614

SMART Global Holdings, Inc.and SubsidiariesReconciliation of Non-GAAP Financial Measures to GAAP Results(In thousands, except per share data) Three Months Ended Fiscal Year Ended August 28, May 29, August 30, August 28, August 30, 2020 2020 2019 2020 2019Reconciliation of gross profit:GAAP gross profit $ 56,337 $ 54,233 $ 52,292 $ 216,396 $ 237,527 GAAP gross margin 19.0 % 19.3 % 18.8 % 19.3 % 19.6 %Add: Share-basedcompensation 861 699 682 3,022 2,485 included in cost ofsalesAdd: Intangibleamortization 647 647 436 2,588 566 included in cost ofsalesAdd: COVID-19 ? 282 ? 282 ? expensesNon-GAAP gross $ 57,845 $ 55,861 $ 53,410 $ 222,288 $ 240,578 profit Non-GAAP gross 19.5 % 19.9 % 19.2 % 19.8 % 19.8 % marginReconciliation of operating expenses:GAAP operating $ 39,107 $ 44,169 $ 40,860 $ 175,065 148,446 expensesLess: Share-basedcompensation expense included inopex Research and 763 780 687 3,069 2,654 development Selling, general and 1,582 3,428 4,194 12,625 13,060 administrative Total 2,345 4,208 4,881 15,694 15,714 Less: Amortizationof intangible assets included inopex Selling, general and 2,767 2,767 2,165 11,066 5,048 administrative Total 2,767 2,767 2,165 11,066 5,048 Less: Legal fees -term loan (payment ? ? ? ? 126 holiday)Less:Acquisition-related ? ? 1,068 946 2,922 expensesLess: Integration/Restructuring 4,548 1,432 ? 9,072 ? expensesLess: COVID-19 ? 228 ? 228 ? expensesLess: Contingentconsideration fair ? ? (2,700 ) ? (2,700 )value adjustmentNon-GAAP operating $ 29,447 $ 35,534 $ 35,446 $ 138,060 $ 127,336 expenses Reconciliation ofincome from operations:GAAP income from $ 17,230 $ 10,064 $ 11,432 $ 41,330 $ 89,081 operations GAAP operating 5.8 % 3.6 % 4.1 % 3.7 % 7.3 % margin Add: Share-basedcompensation 3,206 4,907 5,563 18,716 18,199 expenseAdd: Amortizationof intangible 3,414 3,414 2,601 13,654 5,614 assetsAdd: Legal fees -term loan (payment ? ? ? ? 126 holiday)Add:Acquisition-related ? ? 1,068 946 2,922 expensesAdd: Integration/Restructuring 4,548 1,432 ? 9,072 ? expensesAdd: COVID-19 ? 510 ? 510 ? expensesAdd: Contingentconsideration fair ? ? (2,700 ) ? (2,700 )value adjustment Non-GAAP income $ 28,398 $ 20,327 $ 17,964 $ 84,228 $ 113,242 from operations Non-GAAP 9.6 % 7.2 % 6.5 % 7.5 % 9.3 % operating margin

SMART Global Holdings, Inc.and SubsidiariesReconciliation of Non-GAAP Financial Measures to GAAP Results(In thousands, except per share data) Three Months Ended Fiscal Year Ended August 28, May 29, August 30, August 28, August 30, 2020 2020 2019 2020 2019Reconciliation ofincome before income taxes:GAAP income before $ 13,666 $ 3,525 $ 7,684 $ 9,360 $ 66,204 income taxesAdd: Share-basedcompensation 3,206 4,907 5,563 18,716 18,199 expenseAdd: Amortizationof intangible 3,414 3,414 2,601 13,654 5,614 assetsAdd: Legal fees -term loan (payment ? ? ? ? 126 holiday)Add:Acquisition-related ? ? 1,068 946 2,922 expensesAdd: Integration/Restructuring 4,548 1,432 ? 9,072 ? expensesAdd: COVID-19 ? 510 ? 510 ? expensesAdd: Gain onsettlement of (364 ) (364 ) indemnity claimAdd: Extinguishmentof term loan/ ? 192 ? 6,822 ? revolverAdd: Capped call ? 2,924 ? 7,719 ? MTM adjustmentAdd: Convertibledebt discount OID 2,026 1,960 ? 4,385 ? and feesAdd: Contingentconsideration fair ? ? (2,700 ) ? (2,700 )value adjustmentAdd: Foreigncurrency (gains)/ 822 484 (332 ) 3,408 3,149 lossesNon-GAAP income $ $ $ $ $ before income taxes 27,318 19,348 13,884 74,228 93,514 Reconciliation ofprovision for income taxes:GAAP provision for $ 6,139 $ 2,700 $ 2,059 $ 10,503 $ 14,872 income taxes GAAP effective 44.9 % 76.6 % 26.8 % 112.2 % 22.5 % tax rateLess: Goodwill tax (673 ) 484 ? 295 ? creditTax effect ofadjustments to GAAP (82 ) (48 ) 33 (340 ) (314 )resultsNon-GAAP provision $ $ $ $ $ for income taxes 6,894 2,264 2,026 10,548 15,186 Non-GAAP effective tax 25.2 % 11.7 % 14.6 % 14.2 % 16.2 % rate Reconciliation ofnet income (loss) and earnings pershare (diluted):GAAP net income $ $ $ $ ) $ (loss) 7,527 825 5,625 (1,143 51,332Adjustments to GAAP net income (loss): Share-based 3,206 4,907 5,563 18,716 18,199 compensation Amortization of 3,414 3,414 2,601 13,654 5,614 intangible assets Legal fees - term loan (payment ? ? ? ? 126 holiday) Acquisition ? ? 1,068 946 2,922 related expenses Integration/ Restructuring 4,548 1,432 ? 9,072 ? expenses COVID-19 expenses ? 510 ? 510 ? Extinguishment of term loan/ ? 192 ? 6,822 ? revolver Capped call MTM ? 2,924 ? 7,719 ? adjustment Convertible debt discount OID and 2,026 1,960 ? 4,385 ? fees Gain on settlement of (364 ) ? ? (364 ) ? indemnity claim Goodwill tax (673 ) 484 ? 295 ? credit Contingent consideration ? ? (2,700 ) ? (2,700 ) fair value adjustment Foreign currency 822 484 (332 ) 3,408 3,149 (gains)/losses Tax effect of items excluded (82 ) (48 ) 33 (340 ) (314 ) from non-GAAP results Non-GAAP net income $ $ $ $ $ 20,424 17,084 11,858 63,680 78,328 Shares used incomputing earnings 24,839 24,431 23,825 24,566 23,468 per share (diluted) Non-GAAP earnings $ $ $ $ $ per share (diluted) 0.82 0.70 0.50 2.59 3.34 GAAP earnings per $ 0.30 $ 0.03 $ 0.24 $ (0.05 ) $ 2.19 share (diluted)

SMART Global Holdings, Inc.and SubsidiariesReconciliation of GAAP Net Income (Loss) to Adjusted EBITDA(In thousands) Three Months Ended Fiscal Year Ended August 28, May 29, August 30, August 28, August 30, 2020 2020 2019 2020 2019 GAAP net income $ $ $ $ ) $ (loss) 7,527 825 5,625 (1,143 51,332 Share-based compensation 3,206 4,907 5,563 18,716 18,199 expense Amortization of 3,414 3,414 2,601 13,654 5,614 intangible assets Interest expense, 3,265 3,094 4,567 15,000 20,716 net Provision for 6,139 2,700 2,059 10,504 14,872 income tax Depreciation 5,219 5,405 6,452 22,776 23,592 Legal fees - term loan (payment ? ? ? ? 126 holiday) Acquisition-related ? ? 1,068 946 2,922 expenses^(1) Integration/ Restructuring 4,548 1,432 ? 9,072 ? expenses COVID-19 expenses ? 510 ? 510 ? Extinguishment of ? 192 ? 6,822 ? term loan/revolver Capped call MTM ? 2,924 ? 7,719 ? adjustment Gain on settlement (364 ) ? ? (364 ) ? of indemnity claim Contingent consideration fair ? ? (2,700 ) ? (2,700 ) value adjustment^(1) Adjusted EBITDA $ $ $ $ $ 32,954 25,403 25,235 104,212 134,673 (1) Amounts related to acquisitions of new businesses, SMART EC & Wireless (July 2019). - -

SMART Global Holdings, Inc.and SubsidiariesConsolidated Balance Sheets(In thousands) August 28, August 30, 2020 2019 Assets Current assets: Cash and cash equivalents $ 150,811 $ 98,139 Accounts receivable, net 215,918 217,433 Inventories 162,991 118,738 Prepaid expenses and other current assets 26,990 37,950 Total current assets 556,710 472,260 Property and equipment, net 54,705 68,345 Operating lease right-of-use assets 25,013 ? Other noncurrent assets 20,554 12,784 Intangible assets, net 55,671 69,325 Goodwill 73,955 81,423 Total assets $ 786,608 $ 704,137 Liabilities and Shareholders? Equity Current liabilities: Accounts payable $ 224,660 $ 164,866 Accrued liabilities 57,829 48,980 Current portion of long-term debt ? 24,054 Total current liabilities 282,489 237,900 Long-term debt 195,573 182,450 Long-term operating lease liabilities 20,829 ? Other long-term liabilities 5,613 10,327 Total liabilities 504,504 430,677 Shareholders? equity: Ordinary shares 737 712 Additional paid-in capital 346,131 285,994 Accumulated other comprehensive loss (228,240 ) (177,866 ) Retained earnings 163,476 164,620 Total shareholders? equity 282,104 273,460 Total liabilities and shareholders? equity $ 786,608 $ 704,137

SMART Global Holdings, Inc.and SubsidiariesConsolidated Statements of Cash Flows(In thousands) Three Months Ended Fiscal Year Ended August 28, May 29, August 30, August 28, August 30, 2020 2020 2019 2020 2019Cash flows fromoperating activities: Net income (loss) $ 7,527 $ 825 $ 5,625 $ (1,143 ) $ 51,332 Adjustments to reconcile net income (loss) to net cashprovided by operating activities: Depreciation and 8,633 8,818 9,054 36,430 29,206 amortization Share-based 3,206 4,907 5,563 18,716 18,199 compensation Provision for doubtful accounts (118 ) 70 (66 ) (75 ) (90 ) receivable and sales returns Deferred income (2,181 ) 425 (1,149 ) (2,115 ) (719 ) tax benefit (Gain) Loss on disposal of 2,565 41 56 2,546 77 property and equipment Loss on mark-to-market ? 2,924 ? 7,719 ? adjustment of the capped call Loss on extinguishment ? 192 ? 6,822 ? of debt/ revolver Amortization of debt discounts 2,080 2,005 718 5,866 2,803 and issuance costs Amortization of operating lease 1,491 1,287 ? 5,060 ? right-of-use assets Change in fair value of ? ? (2,700 ) ? (2,700 ) contingent consideration Changes in operating assets and liabilities: Accounts 5,537 (13,396 ) 27,582 (12,348 ) 35,240 receivable Inventories 20,641 (26,932 ) 19,312 (51,840 ) 102,083 Prepaid expenses and (1,291 ) (7,615 ) (3,393 ) (2,410 ) (1,606 ) other assets Accounts (26,251 ) 39,031 (19,684 ) 69,436 (64,569 ) payable Operating lease (1,260 ) (1,362 ) ? (4,763 ) ? liabilities Accrued expenses and (4,421 ) 2,401 8,023 482 401 other liabilities Net cash provided by 16,159 13,623 48,941 78,382 169,657 operating activities Cash flows frominvesting activities: Capital expenditures and (7,386 ) (7,521 ) (3,321 ) (24,275 ) (33,433 ) deposits on equipment Proceeds from sale of property 250 58 10 404 81 and equipment Acquisitions of business, net of ? ? (75,940 ) ? (76,088 ) cash acquired Net cash used in (7,136 ) (7,462 ) (79,251 ) (23,871 ) (109,440 ) investing activities Cash flows fromfinancing activities: Long-term debt payment - Term ? ? ? (5,625 ) ? Loan Long-term debt (615 ) (685 ) (1,680 ) (2,907 ) (6,753 ) payment - BNDES Purchase of ? ? ? (21,825 ) ? capped call Proceeds from convertible notes ? ? ? 243,125 ? due 2026, net of discount Payment for extinguishment of ? ? ? (204,904 ) ? long-term debt Proceeds from borrowings under 42,500 42,000 19,000 103,000 254,500 revolving line of credit Repayments of borrowings under (42,500 ) (42,000 ) (19,000 ) (103,000 ) (254,500 ) revolving line of credit Proceeds from issuance of ordinary shares 554 134 1,300 2,495 5,070 from share option exercises Proceeds from issuance of ? 1,742 ? 2,984 2,303 ordinary shares from ESPP Withholding tax on restricted (96 ) (282 ) (290 ) (749 ) (520 ) stock units Net cash provided by (used in) (157 ) 909 (670 ) 12,594 100 financing activities Effect of exchange rate changes on the 10,100 (17,084 ) 3,020 (14,434 ) 588 cash and cash equivalents Net increase (decrease) 18,966 (10,015 ) (27,960 ) 52,672 60,905 in cash and cash equivalents Cash and cashequivalents at 131,845 141,860 126,099 98,139 37,234 beginning of periodCash and cashequivalents at end $ 150,811 $ 131,845 $ 98,139 $ 150,811 $ 98,139 of period

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