SMART Global Holdings Inc (SGH) Reports Record Gross Margins for FY2023
Net sales of $1.44 billion, up 3.3% versus fiscal year 2022
Record GAAP gross margin of 28.8%, up 80 basis points versus fiscal year 2022
Record Non-GAAP gross margin of 31.7%, up 250 basis points versus fiscal year 2022
GAAP EPS of $0.15 versus $0.41 in fiscal year 2022
On October 12, 2023, SMART Global Holdings Inc (NASDAQ:SGH) released its financial results for the fourth quarter and full year fiscal 2023. The company reported net sales of $1.44 billion, up 3.3% compared to fiscal year 2022. The GAAP gross margin was a record 28.8%, up 80 basis points versus fiscal year 2022, and the Non-GAAP gross margin was a record 31.7%, up 250 basis points versus fiscal year 2022. The GAAP EPS was $0.15, compared to $0.41 in fiscal year 2022.
Financial Highlights
For the fourth quarter of fiscal 2023, SGH reported net sales of $316.7 million, down 12.6% versus the year-ago quarter. The GAAP gross margin was 28.9%, up 290 basis points versus the year-ago quarter, and the Non-GAAP gross margin was 31.7%, up 460 basis points versus the year-ago quarter. The GAAP EPS was $1.17, compared to $0.18 in the year-ago quarter, and the Non-GAAP EPS was $0.35, compared to $0.63 in the year-ago quarter.
SGH's CEO Mark Adams commented,
Throughout fiscal 2023 the team has made significant progress in our transformational journey towards becoming an enterprise solutions company focused on higher quality revenue and improving gross margins. In the fourth quarter, in what remains a challenging global economic environment, non-GAAP gross margin increased to 31.7%, an improvement of 460 basis points from the same period last year, and non-GAAP earnings were $0.35 per share. In addition, we exited the fourth quarter with a strong balance sheet, including cash, cash equivalents and short term investments of $391 million."
Financial Tables Summary
The annual financial results of continuing operations showed that the Memory Solutions segment had net sales of $443,264,000, the Intelligent Platform Solutions segment had net sales of $749,708,000, and the LED Solutions segment had net sales of $248,278,000. The total net sales were $1,441,250,000. The gross profit was $415,171,000 and the operating income was $8,745,000. The net income attributable to SGH was $7,858,000 and the diluted earnings per share was $0.15.
The quarterly financial results of continuing operations showed that the Memory Solutions segment had net sales of $105,181,000, the Intelligent Platform Solutions segment had net sales of $145,432,000, and the LED Solutions segment had net sales of $66,045,000. The total net sales were $316,658,000. The gross profit was $91,585,000 and the operating income was -$1,639,000. The net income attributable to SGH was $64,841,000 and the diluted earnings per share was $1.17.
Business Outlook
For the first quarter of fiscal 2024, SGH is providing a financial outlook for its continuing operations. The company expects net sales to be $275 million +/- $25 million, the gross margin to be 28.5% +/- 1%, operating expenses to be $82 million +/- $1 million, and diluted earnings per share to be $(0.16) +/- $0.15.
SGH will hold a conference call and webcast to discuss the fourth quarter and full year fiscal 2023 results and related matters today, October 12, 2023, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
This article first appeared on GuruFocus.
