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Fourth Quarter Fiscal 2009 Highlights:
-- Net sales of $99.8 million
-- Gross profit of $21.3 million
-- GAAP EPS of $0.00 with a net loss of $0.3 million
-- Non-GAAP diluted EPS of $0.05
Fiscal 2009 Highlights:
-- Net sales of $441.3 million
-- Gross profit of $89.8 million
-- GAAP EPS of ($0.18)
-- Non-GAAP diluted EPS of $0.17
-- Operating cash flow of $52.5 million
-- Cash and cash equivalents of $147.7 million
Net sales for the fourth quarter of fiscal 2009 were $99.8 million, compared to $91.6 million for the third quarter of fiscal 2009, and $160.7 million for the fourth quarter of fiscal 2008. Net sales for the fiscal year 2009 were $441.3 million, compared to $670.2 million for fiscal year 2008.
Gross profit for the fourth quarter of fiscal 2009 was $21.3 million, compared to $18.6 million in the third quarter of fiscal 2009, and $24.9 million in the fourth quarter of fiscal 2008. Gross profit for fiscal year 2009 was $89.8 million, compared to $119.7 million in fiscal 2008.
GAAP net loss for the fourth quarter of fiscal 2009 was $0.3 million, or $0.00 per share, compared to $2.4 million, or ($0.04) per share in the third quarter of fiscal 2009, and $3.5 million, or ($0.06) per share in the fourth quarter of fiscal 2008. For fiscal year 2009, SMART reported GAAP net loss of $11.4 million, or ($0.18) per share, compared to net income of $9.0 million, or $0.14 per diluted share in fiscal 2008.
Non-GAAP net income was $3.1 million, or $0.05 per diluted share for the fourth quarter of fiscal 2009, compared to $0.9 million, or $0.01 per diluted share in the third quarter of fiscal 2009, and $3.4 million, or $0.05 per diluted share in the fourth quarter of fiscal 2008. For fiscal year 2009, SMART reported non-GAAP net income of $11.0 million, or $0.17 per diluted share, compared to $35.2 million, or $0.55 per diluted share in fiscal 2008. Non-GAAP net income excludes certain charges related to goodwill impairment, restructuring, and other infrequent or unusual items, as well as stock-based compensation.
Adjusted EBITDA for the fourth quarter of fiscal 2009 was $9.9 million, compared to $5.2 million for the third quarter of fiscal 2009, and $10.5 million for the fourth quarter of fiscal 2008. For fiscal year 2009, Adjusted EBITDA was $35.6 million, compared to $62.2 million in fiscal 2008.
Please refer to the Non-GAAP Information section and the "Reconciliation of Non-GAAP Financial Measures" table below for further detail on non-GAAP net income and Adjusted EBITDA.
Operating cash flow for the fourth quarter of fiscal 2009 was $7.9 million. For fiscal year 2009, operating cash flow was $52.5 million. Cash and cash equivalents at the end of fiscal year 2009 was $147.7 million and long-term debt, due in 2012, remained at $81.3 million.
"Our fourth fiscal quarter results were stronger than expected due to supply shortages for DDR2 and DDR3, and a better pricing environment for DRAM," commented Iain MacKenzie, President and CEO of SMART. "In addition, our financial results improved, due to the overall economy, the healthier DRAM environment and our disciplined approach to managing our business. While our full year results reflect the challenges of the global economic downturn, we are proud to have maintained our track record of non-GAAP profitability, achieving EPS of $0.17 per diluted share for the year."
Business Outlook
The following statements are based upon management's current expectations. These statements are forward-looking, and actual results may differ materially. The Company undertakes no obligation to update these statements.
"While we have seen some strength in the DRAM environment, we are cautious about how sustainable these market conditions are and we are managing our business accordingly," continued Mr. MacKenzie.
For the first quarter of fiscal 2010, SMART estimates net sales will be in the range of $98 million to $105 million, gross profit in the range of $20 million to $22 million, and net income per share will be in the range of ($0.01) to $0.01 on a GAAP basis. On a non-GAAP basis, the Company expects net income per diluted share will be in the range of $0.02 to $0.04. The guidance for the first quarter includes an income tax provision estimated in the range of $2.3 million to $2.6 million. Please refer to the Non-GAAP Information and the "Reconciliation of Guidance for Non-GAAP Financial Measures" table below for further detail.
Conference Call Details
SMART's fourth quarter and fiscal 2009 teleconference and webcast is scheduled to begin at 1:30 p.m. Pacific Daylight Time (PDT), or 4:30 p.m. Eastern Daylight Time (EDT), on Thursday, October 1, 2009. The call may be accessed US toll free by calling (877) 941-4774 or US toll by calling (480) 629-9760. Please join the conference call at least ten minutes early in order to register. The access code is 4160955. SMART will also offer a live and archived webcast of the conference call, accessible from the Company's website at http://www.smartm.com. A telephonic replay of the conference call will be available through midnight PDT, October 15, 2009, by dialing (303) 590-3030 and entering passcode 4160955#.
Forward-Looking Statements
Statements contained in this press release, including the quotations attributed to Mr. MacKenzie, that are not statements of historical fact, including any statements that use the words "will," "believes," "anticipates," "estimates," "expects," "intends" or similar words that describe the Company's or its management's future expectations, plans, objectives, or goals, are "forward-looking statements" and are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include projections regarding the Company's financial performance, benefits associated with operational efficiencies, the DRAM market, new product introductions, and customer demand for its products.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results and/or from any future results or outcomes expressed or implied by such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, the post-closing integration of the businesses and product lines of SMART and Adtron, production or manufacturing difficulties, competitive factors, new products and technological changes, fluctuations in product prices and raw material costs and availability, dependence upon third-party vendors, customer demand, changes in industry standards or release plans, fluctuations in the quarterly effective tax rate, possible increases in previously estimated restructuring charges, lower than anticipated cash savings from restructuring, higher anticipated costs from increasing capacity, changes in foreign currency exchange rates and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission including the Company's Form 10-K for the fiscal year ended August 29, 2008, its Form 10-Q for the quarter ended November 28, 2008, its Form 10-Q for the quarter ended February 27, 2009, its Form 10-Q for the quarter ended May 29, 2009, and its Proxy filed on August 6, 2009. Such risk factors as outlined in these reports may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. The Company operates in a continually changing business environment and new factors emerge from time to time. The Company cannot predict such factors, nor can it assess the impact, if any, from such factors on the Company or its results. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.
Non-GAAP Information
Certain non-GAAP financial measures are included in this press release, including 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, goodwill impairment charges, restructuring charges, and stock-based compensation expense. 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. Non-GAAP financial results do not include stock-based compensation expense, restructuring charges, impairment charges and other infrequent or unusual items. 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 the 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 and to plan and forecast future periods. The presentation of this additional information is not meant to be a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. 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 reconciliations of GAAP to non-GAAP financial measures, which are included below.
About SMART
SMART is a leading independent designer, manufacturer and supplier of electronic subsystems to original equipment manufacturers, or OEMs. SMART offers more than 500 standard and custom products to OEMs engaged in the computer, industrial, networking, gaming, telecommunications, and embedded application markets. Taking innovations from the design stage through manufacturing and delivery, SMART has developed a comprehensive memory product line that includes DRAM, SRAM, and Flash memory in various form factors. SMART also offers high performance, high capacity solid state drives for enterprise, defense/aerospace, industrial automation, medical, and transportation markets. SMART's Display Products Group designs, manufactures, and sells thin film transistors (TFT) liquid crystal display (LCD) solutions to customers developing casino gaming systems as well as embedded applications such as kiosk, ATM, point-of-service, and industrial control systems. SMART's presence in the U.S., Europe, Asia, and Latin America enables it to provide its customers with proven expertise in international logistics, asset management, and supply-chain management worldwide. See www.smartm.com for more information.
(TABLES TO FOLLOW)
SMART Modular Technologies (WWH), Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data; unaudited)
Three Months Ended Twelve Months Ended
------------------------------- ---------------------
August 28, May 29, August 29, August 28, August 29,
2009 2009 2008 2009 2008
--------- --------- --------- --------- ----------
Net income (loss) $ (289) $ (2,386) $ (3,528) $ (11,403) $ 8,974
Add:
Goodwill impairment,
no tax effect - - 3,187 10,416 3,187
Restructuring
charges, net of tax - 945 1,795 2,756 1,795
Stock-based
compensation
expense charged
to operating
expense, net of tax 3,384 1,478 1,899 8,424 7,225
Deferred tax assets
valuation allowance
increase - - - - 9,630
One-time charge to
IPR&D related to
Adtron
acquisition - - - - 4,400
Relocation of
corporate
headquarter
charges, net of tax - 820 - 820 -
--------- --------- --------- --------- ----------
Non-GAAP net income $ 3,095 $ 857 $ 3,353 $ 11,013 $ 35,211
========= ========= ========= ========= ==========
Non-GAAP net income
per diluted share $ 0.05 $ 0.01 $ 0.05 $ 0.17 $ 0.55
========= ========= ========= ========= ==========
Shares used in
computing net
income per diluted
share: 63,626 63,489 63,403 63,443 63,555
========= ========= ========= ========= ==========
Net income (loss) $ (289) $ (2,386) $ (3,528) $ (11,403) $ 8,974
Interest expense,
net 1,530 1,629 1,536 6,609 5,355
Income taxes 1,763 368 1,810 5,571 18,421
Depreciation and
amortization 3,491 3,142 3,646 13,077 12,700
--------- --------- --------- --------- ----------
EBITDA 6,495 2,753 3,464 13,854 45,450
Adjustments:
Goodwill impairment - - 3,187 10,416 3,187
Restructuring
charges - 989 1,938 2,810 1,938
Stock-based
compensation
expense charges
to operating
expense 3,398 1,490 1,911 8,475 7,271
One-time charge to
IPR&D related to
Adtron acquisition - - - - 4,400
--------- --------- --------- --------- ----------
Adjusted EBITDA $ 9,893 $ 5,232 $ 10,500 $ 35,555 $ 62,246
========= ========= ========= ========= ==========
Reconciliation of Q1-10 Guidance for Non-GAAP Financial Measures
(In millions, except per share data; unaudited)
Three Months Ending November 27, 2009
----------------------------------------------------
Non-GAAP GAAP
Range of Estimates Range of Estimates
----------------- -----------------
From To Adjustments From To
-------- -------- ------------ ------- --------
Net income (loss) $ 1.0 $ 2.3 $ 1.7(a) $ (0.7) $ 0.6
======== ======== ======= ========
Net income (loss) per
share $ 0.02 $ 0.04 ($ 0.01) $ 0.01
======== ======== ======= ========
Shares used in
computing net income
(loss) per share 64.0 64.0 62.0 64.0
======== ======== ======= ========
(a) Reflects estimated adjustment for stock-based compensation expense.
SMART Modular Technologies (WWH), Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Twelve Months Ended
------------------------- ------------------------
August 28, August 29, August 28, August 29,
2009 2008 2009 2008
----------- ----------- ----------- -----------
(In thousands, except per share data)
Net sales $ 99,808 $ 160,666 $ 441,317 $ 670,151
Cost of sales 78,489 135,729 351,478 550,420
----------- ----------- ----------- -----------
Gross profit 21,319 24,937 89,839 119,731
Research and
development 4,755 5,437 19,811 20,164
Selling, general,
and administrative 13,671 15,064 55,505 59,849
Restructuring charges - 1,938 2,810 1,938
Goodwill impairment - 3,187 10,416 3,187
In process research
and development
charge - - - 4,400
----------- ----------- ----------- -----------
Total operating
expenses 18,426 25,626 88,542 89,538
----------- ----------- ----------- -----------
Income (loss) from
operations 2,893 (689) 1,297 30,193
Interest expense,
net (1,530) (1,536) (6,609) (5,355)
Other income, net 111 507 (520) 2,557
----------- ----------- ----------- -----------
Total other
expense, net (1,419) (1,029) (7,129) (2,798)
----------- ----------- ----------- -----------
Income (loss) before
provision for
income taxes 1,474 (1,718) (5,832) 27,395
Provision for income
taxes 1,763 1,810 5,571 18,421
----------- ----------- ----------- -----------
Net income (loss) ($ 289) ($ 3,528) ($ 11,403) $ 8,974
=========== =========== =========== ===========
Net income (loss)
per share, basic ($ 0.00) ($ 0.06) ($ 0.18) $ 0.15
=========== =========== =========== ===========
Shares used in
computing net
income (loss) per
ordinary share 61,863 61,348 61,699 60,985
=========== =========== =========== ===========
Net income (loss)
per share, diluted ($ 0.00) ($ 0.06) ($ 0.18) $ 0.14
=========== =========== =========== ===========
Shares used in
computing net
income (loss) per
diluted share 61,863 61,348 61,699 63,555
=========== =========== =========== ===========
SMART Modular Technologies (WWH), Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
August 28, August 29,
2009 2008
----------- ----------
(In thousands)
ASSETS
Cash and cash equivalents $ 147,658 $ 115,994
Accounts receivable, net of allowances of
$1,591 and $1,517 as of August 28, 2009 and
August 29, 2008 130,953 193,736
Inventories 63,115 62,430
Prepaid expense and other current assets 12,628 14,973
----------- ----------
Total current assets 354,354 387,133
Property and equipment, net 36,263 39,317
Goodwill 1,061 7,210
Other intangible assets, net 7,475 8,545
Other non-current assets 4,585 4,943
----------- ----------
Total assets $ 403,738 $ 447,148
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 68,928 $ 93,482
Accrued expenses and other current liabilities 16,615 23,942
----------- ----------
Total current liabilities 85,543 117,424
Long-term debt 81,250 81,250
Other long-term liabilities 2,120 1,568
----------- ----------
Total liabilities 168,913 200,242
----------- ----------
Shareholders' equity:
Ordinary shares 10 10
Additional paid in capital 109,264 100,234
Deferred stock-based compensation - (91)
Accumulated other comprehensive income 4,333 14,132
Retained earnings 121,218 132,621
----------- ----------
Total shareholders' equity 234,825 246,906
----------- ----------
Total liabilities and shareholders' equity $ 403,738 $ 447,148
=========== ==========
SMART Modular Technologies (WWH), Inc. and Subsidiaries
Summary Cash Flow Information
(Unaudited)
Three Months Ended
----------------------
August 28, August 29,
2009 2008
---------- ----------
(In thousands)
Net cash provided by (used in) operating activities $ 7,924 $ 578
Net cash used in investing activities $ (2,471) $ (2,362)
Net cash used in financing activities $ 231 $ 6
Year Ended
----------------------
August 28, August 29,
2009 2008
---------- ----------
(In thousands)
Net cash provided by (used in) operating activities $ 52,519 $ 4,550
Net cash used in investing activities $ (21,074) $ (33,819)
Net cash used in financing activities $ 645 $ 18
For More Information Investor Contacts: Suzanne Craig The Blueshirt Group for SMART Modular Technologies 415-217-7722 Email Contact Barry Zwarenstein CFO, Senior Vice President SMART Modular Technologies 510-624-8134 Email Contact
SOURCE: SMART Modular Technologies
http://www2.marketwire.com/mw/emailprcntct?id=1E713A9DCA8C9BBE http://www2.marketwire.com/mw/emailprcntct?id=5A1B91A16D8DA985
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