Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
May 28, 2021 | Jun. 24, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | SMART GLOBAL HOLDINGS, INC. | |
Entity Central Index Key | 0001616533 | |
Current Fiscal Year End Date | --08-27 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Trading Symbol | SGH | |
Document Period End Date | May 28, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 24,260,714 | |
Title of 12(b) Security | Ordinary shares, $0.03 par value per share | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-38102 | |
Entity Incorporation, State or Country Code | E9 | |
Entity Tax Identification Number | 98-1013909 | |
Entity Address, Address Line One | c/o Maples Corporate Services Limited | |
Entity Address, Address Line Two | P.O. Box 309 | |
Entity Address, Address Line Three | Ugland House | |
Entity Address, City or Town | Grand Cayman | |
Entity Address, Country | KY | |
Entity Address, Postal Zip Code | KY1-1104 | |
City Area Code | 510 | |
Local Phone Number | 623-1231 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 188,992 | $ 150,811 | |
Accounts receivable, net of allowances of $622 and $101 as of May 28, 2021 and August 28, 2020, respectively | 274,950 | 215,918 | |
Inventories | [1] | 288,962 | 162,991 |
Prepaid expenses and other current assets | 53,341 | 26,990 | |
Total current assets | 806,245 | 556,710 | |
Property and equipment, net | 153,261 | 54,705 | |
Operating lease right-of-use assets | 35,307 | 25,013 | |
Other noncurrent assets | 13,827 | 20,554 | |
Intangible assets, net | 107,160 | 55,671 | |
Goodwill | 73,257 | 73,955 | |
Total assets | 1,189,057 | 786,608 | |
Current liabilities: | |||
Accounts payable | 354,210 | 224,660 | |
Other current liabilities | 138,008 | 57,829 | |
Total current liabilities | 492,218 | 282,489 | |
Long-term debt | 338,047 | 195,573 | |
Long-term operating lease liabilities | 28,363 | 20,829 | |
Other long-term liabilities | 52,961 | 5,613 | |
Total liabilities | 911,589 | 504,504 | |
Commitments and contingencies (see Note 10) | |||
Shareholders’ equity: | |||
Ordinary shares, $0.03 par value. Authorized 200,000 shares; issued and outstanding 24,238 and 24,419 as of May 28, 2021 and August 28, 2020, respectively | 769 | 737 | |
Additional paid-in capital | 335,785 | 346,131 | |
Accumulated other comprehensive loss | (231,258) | (228,241) | |
Retained earnings | 164,137 | 163,477 | |
Total SGH shareholders’ equity | 269,433 | 282,104 | |
Noncontrolling interest in subsidiary | 8,035 | ||
Total equity | 277,468 | 282,104 | |
Total liabilities and shareholders’ equity | $ 1,189,057 | $ 786,608 | |
[1] | As of May 28, 2021 and August 28, 2020, 7% and 17%, respectively, of total inventories represented inventory held under the Company's supply chain services. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, net of allowances | $ 622 | $ 101 |
Ordinary shares, par value | $ 0.03 | $ 0.03 |
Ordinary shares, authorized | 200,000,000 | 200,000,000 |
Ordinary shares, issued | 24,238,000 | 24,419,000 |
Ordinary shares, outstanding | 24,238,000 | 24,419,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | ||
Income Statement [Abstract] | |||||
Net sales | [1] | $ 437,728 | $ 281,287 | $ 1,033,433 | $ 825,347 |
Cost of sales | 353,241 | 227,054 | 842,847 | 665,288 | |
Gross profit | 84,487 | 54,233 | 190,586 | 160,059 | |
Operating expenses: | |||||
Research and development | 16,718 | 14,436 | 32,534 | 44,023 | |
Selling, general, and administrative | 48,475 | 29,733 | 118,195 | 91,935 | |
Change in estimated fair value of acquisition-related contingent consideration | 16,400 | 16,400 | |||
Total operating expenses | 81,593 | 44,169 | 167,129 | 135,958 | |
Income from operations | 2,894 | 10,064 | 23,457 | 24,101 | |
Interest expense, net | (5,049) | (3,094) | (12,568) | (11,736) | |
Other expense, net | (489) | (3,445) | (1,187) | (16,671) | |
Total other expense | (5,538) | (6,539) | (13,755) | (28,407) | |
Income (loss) before income taxes | (2,644) | 3,525 | 9,702 | (4,306) | |
Provision for income taxes | 4,010 | 2,700 | 8,485 | 4,365 | |
Net income (loss) | (6,654) | 825 | 1,217 | (8,671) | |
Net income attributable to noncontrolling interest | 557 | 557 | |||
Net income (loss) attributable to SGH | $ (7,211) | $ 825 | $ 660 | $ (8,671) | |
Earnings per share: | |||||
Basic | $ (0.30) | $ 0.03 | $ 0.03 | $ (0.36) | |
Diluted | $ (0.30) | $ 0.03 | $ 0.03 | $ (0.36) | |
Shares used in computing earnings per share: | |||||
Basic | 24,035 | 24,066 | 24,843 | 23,895 | |
Diluted | 24,035 | 24,431 | 25,902 | 23,895 | |
[1] | Includes sales to affiliates of $20,103 and $53,251 in the three and nine months ended May 28, 2021 and $24,139 and $59,691 for the same periods ended May 29, 2020, respectively (see Note 3). |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Income Statement [Abstract] | ||||
Sales to affiliates | $ 20,103 | $ 24,139 | $ 53,251 | $ 59,691 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (6,654) | $ 825 | $ 1,217 | $ (8,671) |
Other comprehensive income (loss): | ||||
Foreign currency translation | 2,572 | (35,752) | (3,018) | (56,768) |
Comprehensive loss | (4,082) | (34,927) | (1,801) | (65,439) |
Comprehensive income attributable to noncontrolling interest | 557 | 557 | ||
Comprehensive loss attributable to SGH | $ (4,639) | $ (34,927) | $ (2,358) | $ (65,439) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Ordinary shares | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Total SGH-shareholder's equity | Non-controlling Interest in subsidiary |
Balances at Aug. 30, 2019 | $ 273,460 | $ 712 | $ 285,994 | $ (177,866) | $ 164,620 | $ 273,460 | |
Balances, Shares at Aug. 30, 2019 | 23,617 | ||||||
Share-based compensation expense | 5,956 | 5,956 | 5,956 | ||||
Issuance of ordinary shares from exercises | 1,166 | $ 2 | 1,164 | 1,166 | |||
Issuance of ordinary shares from exercises, Shares | 86 | ||||||
Issuance of ordinary shares from release of restricted stock units (RSUs) | $ 2 | (2) | |||||
Issuance of ordinary shares from release of restricted stock units, (RSUs) Shares | 69 | ||||||
Issuance of ordinary shares from employee share purchase plan (ESPP) | 1,242 | $ 2 | 1,240 | 1,242 | |||
Issuance of ordinary shares from employee share purchase plan (ESPP), Shares | 67 | ||||||
Withholding tax on restricted stock units (RSUs) | (20) | (20) | (20) | ||||
Withholding tax on restricted stock units (RSUs), Shares | (1) | ||||||
Foreign currency translation | (10,244) | (10,244) | (10,244) | ||||
Net income (loss) | 224 | 224 | 224 | ||||
Balances at Nov. 29, 2019 | 271,784 | $ 718 | 294,332 | (188,110) | 164,844 | 271,784 | |
Balances, Shares at Nov. 29, 2019 | 23,838 | ||||||
Balances at Aug. 30, 2019 | 273,460 | $ 712 | 285,994 | (177,866) | 164,620 | 273,460 | |
Balances, Shares at Aug. 30, 2019 | 23,617 | ||||||
Balances at Aug. 28, 2020 | 282,104 | $ 737 | 346,131 | (228,241) | 163,477 | 282,104 | |
Balances, Shares at Aug. 28, 2020 | 24,419 | ||||||
Balances at Nov. 29, 2019 | 271,784 | $ 718 | 294,332 | (188,110) | 164,844 | 271,784 | |
Balances, Shares at Nov. 29, 2019 | 23,838 | ||||||
Share-based compensation expense | 4,647 | 4,647 | 4,647 | ||||
Issuance of ordinary shares from exercises | 641 | $ 1 | 640 | 641 | |||
Issuance of ordinary shares from exercises, Shares | 49 | ||||||
Issuance of ordinary shares from release of restricted stock units (RSUs) | $ 4 | (4) | |||||
Issuance of ordinary shares from release of restricted stock units, (RSUs) Shares | 117 | ||||||
Withholding tax on restricted stock units (RSUs) | (351) | (351) | (351) | ||||
Withholding tax on restricted stock units (RSUs), Shares | (11) | ||||||
Equity component of convertible notes due 2026, net | 50,822 | 50,822 | 50,822 | ||||
Foreign currency translation | (10,772) | (10,772) | (10,772) | ||||
Net income (loss) | (9,720) | (9,720) | (9,720) | ||||
Balances at Feb. 28, 2020 | 307,051 | $ 723 | 350,086 | (198,882) | 155,124 | 307,051 | |
Balances, Shares at Feb. 28, 2020 | 23,993 | ||||||
Share-based compensation expense | 4,907 | 4,907 | 4,907 | ||||
Issuance of ordinary shares from exercises | 134 | 134 | 134 | ||||
Issuance of ordinary shares from exercises, Shares | 9 | ||||||
Issuance of ordinary shares from release of restricted stock units (RSUs) | $ 2 | (2) | |||||
Issuance of ordinary shares from release of restricted stock units, (RSUs) Shares | 64 | ||||||
Issuance of ordinary shares from employee share purchase plan (ESPP) | 1,742 | $ 3 | 1,739 | 1,742 | |||
Issuance of ordinary shares from employee share purchase plan (ESPP), Shares | 90 | ||||||
Withholding tax on restricted stock units (RSUs) | (282) | (282) | (282) | ||||
Withholding tax on restricted stock units (RSUs), Shares | (12) | ||||||
Reclassification of capped call upon modification of articles of association (See Note 7) | (14,106) | (14,106) | (14,106) | ||||
Foreign currency translation | (35,752) | (35,752) | (35,752) | ||||
Net income (loss) | 825 | 825 | 825 | ||||
Balances at May. 29, 2020 | 264,519 | $ 728 | 342,476 | (234,634) | 155,949 | 264,519 | |
Balances, Shares at May. 29, 2020 | 24,144 | ||||||
Balances at Aug. 28, 2020 | 282,104 | $ 737 | 346,131 | (228,241) | 163,477 | 282,104 | |
Balances, Shares at Aug. 28, 2020 | 24,419 | ||||||
Share-based compensation expense | 11,088 | 11,088 | 11,088 | ||||
Issuance of ordinary shares from exercises | 1,337 | $ 2 | 1,335 | 1,337 | |||
Issuance of ordinary shares from exercises, Shares | 59 | ||||||
Issuance of ordinary shares from release of restricted stock units (RSUs) | $ 9 | (9) | |||||
Issuance of ordinary shares from release of restricted stock units, (RSUs) Shares | 332 | ||||||
Issuance of ordinary shares from employee share purchase plan (ESPP) | 1,768 | $ 3 | 1,765 | 1,768 | |||
Issuance of ordinary shares from employee share purchase plan (ESPP), Shares | 88 | ||||||
Withholding tax on restricted stock units (RSUs) | (3,483) | (3,483) | (3,483) | ||||
Withholding tax on restricted stock units (RSUs), Shares | (139) | ||||||
Foreign currency translation | (16,523) | (16,523) | (16,523) | ||||
Net income (loss) | 2,027 | 2,027 | 2,027 | ||||
Balances at Nov. 27, 2020 | 278,318 | $ 751 | 356,827 | (244,764) | 165,504 | 278,318 | |
Balances, Shares at Nov. 27, 2020 | 24,759 | ||||||
Balances at Aug. 28, 2020 | 282,104 | $ 737 | 346,131 | (228,241) | 163,477 | 282,104 | |
Balances, Shares at Aug. 28, 2020 | 24,419 | ||||||
Repurchase of ordinary shares | (44,330) | ||||||
Foreign currency translation | (3,018) | ||||||
Net income (loss) | 1,217 | ||||||
Balances at May. 28, 2021 | 277,468 | $ 769 | 335,785 | (231,258) | 164,137 | 269,433 | $ 8,035 |
Balances, Shares at May. 28, 2021 | 24,238 | ||||||
Balances at Nov. 27, 2020 | 278,318 | $ 751 | 356,827 | (244,764) | 165,504 | 278,318 | |
Balances, Shares at Nov. 27, 2020 | 24,759 | ||||||
Share-based compensation expense | 5,398 | 5,398 | 5,398 | ||||
Issuance of ordinary shares from exercises | 2,546 | $ 3 | 2,543 | 2,546 | |||
Issuance of ordinary shares from exercises, Shares | 113 | ||||||
Issuance of ordinary shares from release of restricted stock units (RSUs) | $ 3 | (3) | |||||
Issuance of ordinary shares from release of restricted stock units, (RSUs) Shares | 73 | ||||||
Withholding tax on restricted stock units (RSUs) | (151) | (151) | (151) | ||||
Withholding tax on restricted stock units (RSUs), Shares | (4) | ||||||
Repurchase of ordinary shares | (44,330) | (44,330) | (44,330) | ||||
Ordinary shares repurchase, Shares | (1,100) | ||||||
Foreign currency translation | 10,934 | 10,934 | 10,934 | ||||
Net income (loss) | 5,844 | 5,844 | 5,844 | ||||
Balances at Feb. 26, 2021 | 258,559 | $ 757 | 320,284 | (233,830) | 171,348 | 258,559 | |
Balances, Shares at Feb. 26, 2021 | 23,841 | ||||||
Share-based compensation expense | 8,344 | 8,344 | 8,344 | ||||
Issuance of ordinary shares from exercises | 5,659 | $ 5 | 5,654 | 5,659 | |||
Issuance of ordinary shares from exercises, Shares | 181 | ||||||
Issuance of ordinary shares from release of restricted stock units (RSUs) | $ 4 | (4) | |||||
Issuance of ordinary shares from release of restricted stock units, (RSUs) Shares | 132 | ||||||
Issuance of ordinary shares from employee share purchase plan (ESPP) | 1,847 | $ 3 | 1,844 | 1,847 | |||
Issuance of ordinary shares from employee share purchase plan (ESPP), Shares | 90 | ||||||
Withholding tax on restricted stock units (RSUs) | (337) | (337) | (337) | ||||
Withholding tax on restricted stock units (RSUs), Shares | (6) | ||||||
Foreign currency translation | 2,572 | 2,572 | 2,572 | ||||
Acquisition of LED business | 7,478 | 7,478 | |||||
Net income (loss) | (6,654) | (7,211) | (7,211) | 557 | |||
Balances at May. 28, 2021 | $ 277,468 | $ 769 | $ 335,785 | $ (231,258) | $ 164,137 | $ 269,433 | $ 8,035 |
Balances, Shares at May. 28, 2021 | 24,238 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
May 28, 2021 | Nov. 27, 2020 | May 29, 2020 | May 28, 2021 | May 29, 2020 | May 29, 2020 | |
Cash flows from operating activities: | ||||||
Net income (loss) | $ (6,654) | $ 2,027 | $ 825 | $ 1,217 | $ (8,671) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation and amortization | 32,468 | 27,797 | ||||
Share-based compensation | 24,867 | 15,510 | ||||
Provision for doubtful accounts receivable and sales returns | 522 | 47 | ||||
Deferred income tax benefit | (3,083) | 65 | ||||
Gain on disposal of property and equipment | (34) | (19) | ||||
Loss on mark-to-market adjustment of the capped call | 2,924 | 7,719 | $ 7,719 | |||
Loss on extinguishment of debt | 192 | 6,822 | 6,822 | |||
Amortization of debt discounts and issuance costs | 6,503 | 3,786 | ||||
Amortization of operating lease right-of-use assets | 4,944 | 3,569 | ||||
Loss from mark-to-market adjustment of contingent consideration | 16,400 | |||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (15,455) | (17,885) | ||||
Inventories | (66,493) | (72,481) | ||||
Prepaid expenses and other assets | (14,163) | (1,119) | ||||
Accounts payable | 116,166 | 95,687 | ||||
Operating lease liabilities | (4,460) | (3,503) | ||||
Other current and long-term liabilities | 5,929 | 4,903 | ||||
Net cash provided by operating activities | 105,328 | 62,227 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures and deposits on equipment | (40,017) | (16,889) | ||||
Proceeds from sale of property and equipment | 222 | 154 | ||||
Acquisition of business, net of cash acquired | (28,613) | |||||
Net cash used in investing activities | (68,408) | (16,735) | ||||
Cash flows from financing activities: | ||||||
Repurchase of ordinary shares | (44,330) | |||||
Proceeds from FINEP loan | 11,439 | |||||
Proceeds from borrowings under revolving line of credit | 114,500 | 60,500 | ||||
Repayments of borrowings under revolving line of credit | (89,500) | (60,500) | ||||
Proceeds from issuance of ordinary shares from share option exercises | 9,542 | 1,941 | ||||
Proceeds from issuance of ordinary shares from ESPP | 3,615 | 2,984 | ||||
Tax payments due upon issuance of ordinary shares for release of RSUs | (3,971) | (653) | ||||
Purchase of capped call | (21,825) | |||||
Proceeds from convertible notes due 2026, net of discount | 243,125 | |||||
Payment for extinguishment of long-term debt | (204,904) | |||||
Net cash provided by financing activities | 1,295 | 12,751 | ||||
Effect of exchange rate changes on cash and cash equivalents | (34) | (24,537) | ||||
Net increase in cash and cash equivalents | 38,181 | 33,706 | ||||
Cash and cash equivalents at beginning of period | $ 150,811 | 150,811 | 98,139 | |||
Cash and cash equivalents at end of period | $ 188,992 | $ 131,845 | 188,992 | 131,845 | $ 131,845 | |
Cash paid during the period: | ||||||
Cash paid for interest | 3,398 | 9,939 | ||||
Cash paid for income taxes, net of refunds | 5,405 | 6,146 | ||||
Noncash activities information: | ||||||
Fair value of non-cash consideration for acquisition of business (see Note 2) | 160,723 | |||||
Capital expenditures included in accounts payable at period end | $ 2,355 | 3,720 | ||||
Unpaid debt fees related to convertible notes due 2026 | 1,990 | |||||
Term Loan | ||||||
Cash flows from financing activities: | ||||||
Long-term debt payments | (5,625) | |||||
BNDES | ||||||
Cash flows from financing activities: | ||||||
Long-term debt payments | $ (2,292) |
Overview, Basis of Presentation
Overview, Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
May 28, 2021 | |
Accounting Policies [Abstract] | |
Overview, Basis of Presentation and Significant Accounting Policies | ( 1 ) Overview, Basis of Presentation and Significant Accounting Policies (a) Overview On August 26, 2011, SMART Global Holdings, Inc., formerly known as Saleen Holdings, Inc., a Cayman Islands exempted company (“SMART Global Holdings” or “SGH”, and together with its subsidiaries, the “Company”), consummated a transaction with SMART Worldwide Holdings, Inc., formerly known as SMART Modular Technologies (WWH), Inc. (“SMART Worldwide”), pursuant to an Agreement and Plan of Merger whereby, through a series of transactions, SMART Global Holdings acquired substantially all of the equity interests of SMART Worldwide with SMART Worldwide surviving as an indirect wholly owned subsidiary of SMART Global Holdings (the “Acquisition”). SMART Global Holdings is an entity that was formed by investment funds affiliated with Silver Lake Partners and Silver Lake Sumeru (collectively “Silver Lake”). As a result of the Acquisition, since there was a change of control resulting in Silver Lake as the controlling shareholder group, the Company applied the acquisition method of accounting and established a new basis of accounting. SMART Global Holdings businesses are leading designers and manufacturers of electronics for computing, memory and specialty LED solutions. The Company specializes in application-specific product development and support for customers in enterprise, government, original equipment manufacturer (“OEM”) and other distribution and sales channels. Customers rely on SMART as a strategic partner with high performing technology products, customer service, technical support and worldwide supply chain and logistics excellence. The Company targets customers in markets such as computing, including edge computing and high performance computing, communications, storage, networking, mobile, industrial automation, internet of things, industrial internet of things, government, military and lighting. The Company operates in four segments: Specialty Memory Products (“Specialty”), Brazil Products (“Brazil”), Intelligent Platform Solutions (“IPS”), formerly Specialty Compute and Storage Solutions (“SCSS”), and LED Solutions (“LED”). SMART Global Holdings is domiciled in the Cayman Islands and has U.S. headquarters in Newark, California. The Company has operations in the United States, Brazil, Malaysia, Taiwan, Hong Kong, China, Scotland, Singapore, India, Netherlands, Germany and South Korea. (b) Basis of Presentation The accompanying condensed consolidated financial statements comprise SMART Global Holdings and its wholly owned subsidiaries. Intercompany transactions have been eliminated in the condensed consolidated financial statements. The Company uses a 52- to 53-week fiscal year ending on the last Friday in August. The three and nine months ended May 28, 2021 and May 29, 2020 were both 13-week and 39-week fiscal periods, respectively. The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information. As such, certain information and footnote disclosures normally included in complete annual financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to the interim periods are unaudited. All financial information for two of the Company’s subsidiaries, SMART Modular Technologies Indústria de Componentes Eletrônicos Ltda. (“SMART Brazil”) and SMART Modular Technologies do Brasil Indústria e Comércio de Componentes Ltda. (“SMART do Brazil”), is included in the Company’s condensed consolidated financial statements on a one-month lag because their fiscal years begin August 1 and end July 31. (c) Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could differ from the estimates made by management. Significant items subject to such estimates and assumptions include the evaluation of the fair value of the Company’s reporting units (as part of the Company’s goodwill impairment analysis), valuation and allocation of purchase price in connection with business acquisitions, accounting for the allocation of convertible debt between equity and debt, share-based compensation, the estimated net realizable value of Brazilian tax and financial credits, income tax uncertainties and other contingencies . (d) Revenue The Company’s revenues include products and services. The Company’s product revenues are predominantly derived from the sale of memory modules, flash memory cards, compute products, storage products and LED products (the latter as a result of our acquisition of CreeLED, Inc. as discussed in Note 2), which the Company designs and manufactures. The Company’s service revenues are derived from procurement, logistics, inventory management, temporary warehousing, kitting and packaging services. In addition, a small portion of the Company’s product sales include extended warranty and on-site services, subscriptions to the Company’s high performance computing environment, professional services, software and related support. The Company determines revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, a performance obligation is satisfied. The Company’s contracts are executed through a combination of written agreements along with purchase orders with customers, including certain general terms and conditions. Generally, purchase orders entail products, quantities and prices, which define the performance obligations of each party and are approved and accepted by the Company. The Company’s contracts with customers do not include extended payment terms. Payment terms vary by contract type and type of customer and generally range from 30 to 45 days from invoice. Additionally, taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and that are collected by the Company from a customer and deposited with the relevant government authority, are excluded from revenue. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer adjusted for estimated variable consideration. Variable consideration may include discounts, rights of return, refunds and other similar obligations. The Company allocates the transaction price to each distinct product and service based on its relative standalone selling price. The standalone selling price for products primarily involves the cost to produce the deliverable plus the anticipated margin and for services is estimated based on the Company’s approved list price. In the normal course of business, except as noted under LED products below, the Company does not accept product returns unless the items are defective as manufactured, nor does it typically provide customers with the right to a refund. The Company establishes provisions for estimated returns and warranties. In addition, the Company does not typically transact for noncash consideration. Standard Products The Company’s main performance obligations are to deliver the requested goods to customers according to the agreed-upon shipping terms. The Company recognizes revenue when control transfers to the customer (i.e., when the Company’s performance obligation is satisfied). The Company invoices the customer and recognizes revenues for such delivery when control transfers based on shipping terms. Customized Products For customized product sales with terms that require the customer to purchase 100% of all parts built to fulfill the customers forecast, the Company recognizes revenue when control of the underlying assets transfers to the customer, as the customer is able to both direct the use of, and obtain substantially all of the remaining benefit from the assets; the customer has the significant risks and rewards associated with ownership of the assets; and the Company has a present right to payment. For these sales, control transfers when the Company has made these products available to the customer and under the terms of the agreement cannot repurpose them without the customer’s express consent. Accordingly, the Company recognizes revenue at the point in time when products made to the customer’s order or forecast are completed and made available to the customer. Non-cancellable nonrefundable (“NCNR”), customized product sales are recognized over time on a cost incurred basis. The customer obtains control and benefits from the services as they are performed over the period based on the cost input measure in the production process for the NCNR customized product. The terms within the NCNR sales orders provide the Company with a legally enforceable right to receive payment including a reasonable profit margin upon customer cancellation for performance completed to date. Accordingly, the Company recognizes revenue over time as customized products listed within the NCNR orders are completed. Computing Products and Services A small portion of the Company’s product sales includes extended warranty and on-site services, subscriptions to the Company’s high performance computing environment, professional consulting services, including installation and other services, and hardware and software related support. Each contract may contain multiple performance obligations, which requires the transaction price to be allocated to each performance obligation. The Company allocates the consideration to each performance obligation based on the relative selling price. The Company uses best-estimated selling price, determined as the best estimate of the price at which the Company would transact if it sold the deliverable regularly on a stand-alone basis. For services provided to customers over a period of time, revenue is recognized as the customer receives the benefit of the services. Extended warranty and on-site services, hardware support, software support, and subscription revenue for access to the Company’s high performance computing environment is deferred and recognized ratably over the contractual period as the Company satisfies its performance obligations over time and services are rendered. These services contracts are typically one to three years in length. Subscription revenue for certain customers is recognized based on the contractual fee to use the high-performance-computing environment. Agency Services The Company has service performance obligations for agency related services such as procurement, logistics, inventory management, temporary warehousing, kitting and packaging services for certain agency basis customers. The agency services are also known as supply chain services and the performance obligations for these services consist of customized, integrated supply chain services management to assist customers in the planning, execution and overall management of the procurement processes. For customers accounted for on an agency basis, the Company recognizes as revenue the amount billed less the material procurement costs of products serviced as an agent with the cost of providing these services embedded with the cost of sales. The Company has separate agent performance obligations as follows: (a) procurement, logistics, and inventory management, (b) temporary warehousing, and (c) kitting and packaging services for these customers. Revenue from these arrangements is recognized as service revenue and is determined by a fee for services based on material procurement costs (i.e., fee as a percentage of the associated material being procured, warehoused, kitted or packaged). The Company recognizes revenue for procurement, logistics and inventory management upon the completion of the services or performance obligation, typically upon shipment of the product, as the criteria for over time recognition is not met. For temporary warehousing, kitting and packaging services, revenue is recognized over time, but the period of performance is typically very short in duration. There are no obligations subsequent to shipment of the product under the agency arrangements. Distribution of Products A substantial portion of the Company’s LED products are sold through distributors. Distributors purchase the Company’s LED products and then resell to their own customer base, which may include value-added resellers, manufacturers who incorporate the Company’s LED products into their own manufactured goods or ultimate end users of the Company’s LED products. The Company recognizes revenue upon shipment of its LED products to its distributors based on the amount of consideration to which the Company expects to be entitled to receive in exchange for LED products or services. We generally offer price protection to our distributors, which is a form of variable consideration that decreases the transaction price. Variable consideration is based on the expected value method, contractual terms, historical analysis of customer purchase volumes, or historical analysis using specific data for the type of consideration being assessed. Variable consideration is recognized as a reduction of net revenue with a corresponding reserve at the time of revenue recognition. Accordingly, estimates for these rights are recognized at the time of sale as a reduction of product revenue within other current liabilities in the accompanying condensed consolidated balance sheet. Differences between the estimated and actual amounts are recognized as adjustments to revenue. Contract Costs As a practical expedient, the Company recognizes the incremental costs of obtaining a contract, specifically commission expenses that have an amortization period of less than twelve months, as an expense when incurred. Additionally, the Company has adopted an accounting policy to recognize shipping and handling costs that occur after control transfers, if any, to the customer as a fulfillment activity. The Company records shipping and handling costs related to revenue transactions within cost of sales as a period cost. Gross Billings and Net Sales The following is a summary of the Company’s gross billings to customers and net sales for services and products (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Service revenue, net $ 8,846 $ 8,815 $ 22,354 $ 25,173 Cost of purchased materials - service (1) 205,530 168,638 481,163 463,527 Gross billings for services 214,376 177,453 503,517 488,700 Product net sales 428,882 272,472 1,011,079 800,174 Gross billings to customers $ 643,258 $ 449,925 $ 1,514,596 $ 1,288,874 Product net sales $ 428,882 $ 272,472 $ 1,011,079 $ 800,174 Service revenue, net 8,846 8,815 22,354 25,173 Net sales $ 437,728 $ 281,287 $ 1,033,433 $ 825,347 (1) Represents material procurement costs of products provided as an agent reported on a net basis. Gross billings to customers in the table above represents total amounts invoiced to customers during the period and is the sum of net sales plus material procurement costs of products the Company provides as an agent. The amount invoiced to customers for agency related services is the total of the related material procurement costs and fees for providing its services. Gross billings to customers are reflected in accounts receivable for unpaid invoices as of the end of the period. Additionally, material procurement costs of products the Company manages as an agent on behalf of its customers on hand as of the end of the period are reflected in inventory. Both the amounts in accounts receivable and inventory impact the determination of net cash provided by (or used in) operations. Contract Balances The Company records accounts receivable when it has an unconditional right to consideration. Contract assets represent amounts recognized as revenue for which the Company does not have the unconditional right to consideration. All contract assets represent amounts related to invoices expected to be issued during the next 12-month period and are recorded as prepaid expenses and other current assets. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities classified as deferred revenue are allocated between other current liabilities and other long-term liabilities on our condensed consolidated balance sheet based on the timing of when the customer takes control of the asset or receives the benefit of the service. Payment terms vary by customer. The time between invoicing and when payment is due is not significant. May 28, 2021 August 28, 2020 $ Change Contract assets $ 350 $ 5,068 $ (4,718 ) Deferred revenue $ 20,975 $ 20,124 $ 851 The decrease in contract assets from $5.1 million as of August 28, 2020 to $0.4 million as of May 28, 2021 was primarily driven by invoicing amounts previously recorded as contract assets as of August 28, 2020. The increase in deferred revenue from $20.1 million to $21.0 million was due to greater deferred services billed during the period. During the nine months ended May 28, 2021, Disaggregation of Revenue The Company disaggregates revenue by segment and geography. See Note 11. Revenue Allocated to Remaining Performance Obligations The Company’s performance obligations related to product sales have a contractual duration of less than one year. The Company elected to apply the optional exemption practical expedient provided in ASC 606 and, therefore, is not required to disclose the aggregate amount of the transaction price allocated to those performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Remaining performance obligations represent contracted revenue related to support services that have not yet been recognized and are therefore accounted for as deferred revenue . The Company expects to recognize revenue on the remaining performance obligations as follows (in thousands) : May 28, 2021 Within 1 year $ 15,855 2-3 years 4,261 Thereafter 859 $ 20,975 (e) Cash and Cash Equivalents All highly liquid investments with maturities of 90 days or less from original dates of purchase are carried at cost, which approximates fair value, and are considered to be cash equivalents. Cash and cash equivalents include cash on hand, cash deposited in checking and saving accounts, money market accounts, and securities with maturities of less than 90 days at the time of purchase. (f) Allowance for Doubtful Accounts The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, the Company records a specific allowance against amounts due and, thereby, reduces the net recognized receivable to the amount management reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on a combination of factors including the length of time the receivables are outstanding, industry and geographic concentrations, the current business environment and historical experience. (g) Derivative Financial Instrument The Company records the assets or liabilities associated with derivative instruments at fair value based on Level 2 inputs in prepaid expenses and other current assets and other current liabilities, respectively, in the condensed consolidated balance sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. See Note 4 for further details. (h) Inventories Inventories are valued at the lower of cost or net realizable value. Under the LED segment, cost is determined on a first-in, first-out method or average cost method. For all other segments, inventory value is determined on a specific identification basis for material and an allocation of labor and manufacturing overhead. At each balance sheet date, the Company evaluates the ending inventories for excess quantities and obsolescence. This evaluation includes an analysis of sales levels by product family and considers historical demand and forecasted demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles. The Company adjusts carrying value to the lower of its cost or net realizable value. Inventory write-downs are not reversed and create a new cost basis. (i) Brazil Taxes Financial Credits In 1991, Brazil created Lei da Informática—Processo Produtivo Básico (“PPB/IT”) Program to incentivize local manufacturing by allowing qualified companies to receive incentives when they sell specified IT products, including desktops, notebooks, servers, SmartTVs and mobile products manufactured in Brazil. In 2007, the Brazilian legislature created a program known as PADIS to promote the semiconductor industry. The Company has been a participant in the PPB/IT Program and PADIS since 2011. Among other incentives, the PPB/IT Program provided for certain reductions in the rate of IPI, a federal tax applied to industrial goods, as well as for PADIS companies, reducing to zero, IPI, import taxes and taxes known as PIS and COFINS levied over sales. As part of making the PPB/IT and P ADIS As a result, the PPB/IT Program and PADIS participants are entitled to a subsidy for operational costs, granted as financial credits, which may be used by participants either as a credit against certain federal taxes, or to request a refund in cash. PADIS beneficiaries are entitled to a subsidy for operational costs granted as financial credits to be used against certain federal taxes, equivalent to 2.62 times the effective disbursements in research and development initiatives under PADIS, limited to a cap of 13.1% of the total incentivized revenues within the country. The financial credits under the PPB/IT Program range from 2.73 to 3.41 times the research and development invested, limited to 10.92% to 13.65% of domestic gross sales revenues, depending on the location of the participant and on what products it manufactures and sells. These multipliers and caps decline over time. Under the current law, the financial credits are available for PADIS companies through January 2022 and for other PPB/IT Program participants through December 2029. For the three and nine months ended May 28, 2021, the Company recognized financial credits under PADIS totaling $8.2 million and $22.2 million, respectively, and $0 for both of the corresponding periods of 2020, which are reported under research and development as a reduction of expense on the condensed consolidated statements of operations. As of May 28, 2021, unused financial credits totaling R$108.1 million (or $20.0 million) are reported under prepaid expenses and other current assets and are expected to be applied against future taxes. Although PADIS participants were entitled to financial credits since April 2, 2020, the effective utilization of such credits depended on a federal decree enacting the amendments to PADIS, which was not issued until February 1, 2021. The Company obtained the recognition of the financial credits based on the research and development disbursements that were made from April 1, 2020 until December 31, 2020 on February 12, 2021 and from January 1, 2021 to March 31, 2021 on April 15, 2021. Given that financial credits can be applied for by PADIS participants on a quarterly basis, the Company expects to report and obtain the recognition of the financial credits related to the research and development disbursements that were made in the second quarter of calendar 2021 in July 2021. Prepaid State Value-Added Taxes (ICMS) Since 2004, the Sao Paulo State tax authorities have granted SMART Brazil a tax benefit to defer and eventually eliminate the payment of ICMS levied on certain imports from independent suppliers. This benefit, known as an ICMS Special Tax Regime, is subject to renewal every two years. When the then current ICMS Special Tax Regime expired on March 31, 2010, SMART Brazil timely applied for a renewal of the benefit, however, the renewal was not granted until August 4, 2010. On June 22, 2010, the Sao Paulo authorities published a regulation allowing companies that applied for a timely renewal of an ICMS Special Regime to continue utilizing the benefit until a final conclusion on the renewal request was rendered. As a result of this publication, SMART Brazil was temporarily allowed to utilize the benefit while it waited for its renewal. From April 1, 2010, when the ICMS benefit lapsed, through June 22, 2010 when the regulation referred to above was published, SMART Brazil was required to pay the ICMS taxes on imports, which payments result in ICMS credits that may be used to offset ICMS obligations generated from sales by SMART Brazil of its products; however, the vast majority of SMART Brazil’s sales in Sao Paulo were either subject to a lower ICMS rate or were made to customers that were entitled to other ICMS benefits that enabled them to eliminate the ICMS levied on their purchases of products from SMART Brazil. As a result, from April 1, 2010 through June 22, 2010, SMART Brazil did not have sufficient ICMS collections against which to apply the credits and the credit balance increased significantly. Effective February 1, 2011, in connection with its participation in a Brazilian government incentive program known as Support Program for the Technological Development of the Semiconductor and Display Industries Laws, or PADIS, SMART Brazil spun off the module manufacturing operations into SMART do Brazil, a separate subsidiary of the Company. In connection with this spin off, SMART do Brazil applied for a tax benefit from the State of Sao Paulo in order to obtain a deferral of state ICMS. This tax benefit is referred to as State PPB, or CAT 14. The CAT 14 approval was not obtained until July 21, 2011, and from February 1, 2011 until the CAT 14 approval was granted, SMART do Brazil did not have sufficient ICMS collections against which to apply the credits accrued upon payment of the ICMS on SMART do Brazil’s imports and inputs locally acquired, and therefore, it generated additional excess ICMS credits. In January 2021, the Company purchased fixed assets for use its manufacturing process, but these were subsequently transferred to be used in research and development, due to the delay of the uFS product process development. The production and sales of this product is now expected to commence in fiscal 2022. This transaction resulted in the reversal of R$8.4 million (or $1.6 million) of the ICMS credits. In April 2021, due to needs in the production process, the equipment returned to the manufacturing area and, consequently, the Company regained the right to the ICMS credits, in the same amount reversed in January 2021, that is, R$8.4 million (or $1.6 million). As a result, as of May 28, 2021, the total ICMS tax credits reported on the Company’s accompanying condensed consolidated balance sheet are R$16.7 million (or $3.1 million) are fully vested ICMS credits, classified as other noncurrent assets. As of August 28, 2020, the total ICMS tax credits reported on the Company’s accompanying condensed consolidated balance sheet are R$21.2 million (or $4.1 million), of which (i) R$19.6 million (or $3.8 million) are fully vested ICMS credits, classified as other noncurrent assets In April and June 2016, the Company filed cases with the State of Sao Paulo tax authorities to seek approval to sell these excess ICMS credits. In December 2017, the Company obtained approval to sell R$31.6 million (or $5.8 million) of its ICMS credits. Once approved, sale of ICMS credits usually take several months to complete and typically incur a discount to the face amount of the credits sold, as well as fees for the arrangers of these sales which together aggregate 10% to 15% of the face amount of the credits being sold. Once the sale is complete, the tax authorities usually approve the transfer of credits in monthly installments and the proceeds resulting from the sale of the aforementioned credits shall be received by the Company accordingly. The Company has recorded valuation adjustments for the estimated discount and fees that the Company will need to offer in order to sell the ICMS credits. To adapt to the market, in the fourth quarter of fiscal 2020, the Company reassessed the discount rate for the sale of the ICMS credits to other companies, adjusting it to 22%, resulting in a charge of R$5.9 million (or $1.1 million) on the condensed consolidated statements of operations. In the first quarter of fiscal 2021, the Company further adjusted the discount rate to 26%, resulting in a charge of R$1.2 million (or $0.2 million). In the second quarter of fiscal 2021, the Company further adjusted the discount rate to 27%. Due to the reversal of part of the ICMS in January 2021, there was a reduction of R$2.5 million (or $0.5 million) in the calculated discount amount. In the third quarter of fiscal 2021, the Company reassessed the discount rate to 36%, resulting in a charge of R$2.4 million (or $0.4 million). In the first quarter of fiscal 2019, the Company sold R$17.7 million (or $3.3 million) of its ICMS credits that had been approved to be sold in December 2017. The payments were received in 22 installments starting in the second quarter of fiscal 2019 through fiscal 2020, or R$10.0 million (or $1.8 million) and R$7.7 million (or $1.4 million) in fiscal 2019 and 2020, respectively, thus finalizing the receipt of all installments of the contract. Import Taxes – Out-of-Period Adjustment During the second quarter of fiscal 2021, the Company recorded an out-of-period adjustment to correct errors originating in previous periods related to understated import tax costs, which resulted in a $4.3 million increase in cost of sales and $0.8 million increase in interest expense, net. The tax impact of the $1.7 million benefit for income taxes related to this adjustment will be reflected in the Company’s annual effective tax rate for fiscal year ending August 27, 2021. (j) Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are computed based on the shorter of the estimated useful lives or the related lease terms, using the straight-line method. Estimated useful lives are presented below: Period Asset: Manufacturing equipment 2 to 5 years Buildings and building improvements 5 to 40 years Office furniture, software, computers and equipment 2 to 5 years Leasehold improvements* Shorter of estimated useful life or lease term * Includes the land leases for the Penang facility with a term expiring in 2070 and 2 parcels in Huizhou with terms expiring in 2057 and 2082. (k) Goodwill The Company performs a goodwill impairment test annually during the fourth quarter of its fiscal year and more frequently if events or circumstances indicate that impairment may have occurred. Such events or circumstances may, among others, include significant adverse changes in the general business climate. There were no events which required impairment analysis in the nine months ended May 28, 2021. When conducting the annual impairment test for goodwill, the Company compares the estimated fair value of a reporting unit containing goodwill to it |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
May 28, 2021 | |
Business Combinations [Abstract] | |
Business Acquisitions | (2) Business Acquisitions Fiscal Year 2021 LED Business On March 1, 2021, pursuant to the previously announced Asset Purchase Agreement, dated October 18, 2020, as amended by the Amendment to Asset Purchase Agreement dated March 1, 2021 (as amended, the “CreeLED Purchase Agreement”), each between Cree, Inc. (“Cree”), SGH and CreeLED, Inc. (formerly known as Chili Acquisition, Inc., a Delaware corporation and wholly owned subsidiary of SGH), (i) Cree completed the sale to SGH of (a) certain equipment, inventory, intellectual property rights, contracts, and real estate comprising Cree’s LED products segment, (b) all of the issued and outstanding equity interests of Cree Huizhou Solid State Lighting Company Limited, a limited liability company organized under the laws of the People’s Republic of China and an indirect wholly owned subsidiary of Cree, and (c) Cree’s 51% ownership interest in Cree Venture LED Company Limited, Cree’s joint venture with San’an Optoelectronics Co., Ltd. (“San’an”), and (ii) SGH assumed certain liabilities related to the LED business (collectively, (i) and (ii), the “LED Business”). In connection with the transaction, Cree retained certain assets used in and pre-closing liabilities associated with its LED products segment. In connection with this transaction, Cree and the Company also entered into certain ancillary and related agreements, including (i) an Intellectual Property Assignment and License Agreement, (ii) a Transition Services Agreement, (iii) a Wafer Supply and Fabrication Services Agreement, and (iv) a Real Estate License Agreement. Under the acquisition method of accounting, the assets acquired and liabilities assumed of the LED Business were recorded as of the acquisition date at their respective fair values. The LED Business’s results of operations are included in the condensed consolidated financial statements from the date of acquisition. The acquisition of the LED Business, a global industry leader, further enhances the Company’s growth and diversification strategy and fits well with its other specialty businesses in computing and memory. The LED Business comprises a broad portfolio of highly efficient LED chips and high-performance LED components within the industry, including general lighting, specialty lighting, large-format video screens and outdoor and architectural lighting. The LED Business will operate as the Company’s LED Solutions segment. Purchase Price The purchase price for the LED Business consisted of (i) a payment of $50 million in cash, subject to customary adjustments, (ii) an unsecured promissory note issued to Cree by the Company in the amount of $125 million (the “Purchase Price Note”), (iii) an earn-out payment of up to $125 million based on the revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing (the “Earnout Period”), with a minimum payment of $2.5 million, payable in the form of an unsecured promissory note to be issued by the Company (the “Earnout Note”), and (iv) the assumption of certain liabilities. The Purchase Price Note bears interest at LIBOR plus 3.0 % and is due on August 15, 2023 . T he Earnout Note will begin to bear interest upon completion of the Earnout Period at LIBOR plus 3.0 % and is due on March 27 , 2025 . The preliminary estimated purchase price is as follows (in thousands): Amount Cash $ 50,000 Additional payment for estimated net working capital adjustment (1) 22,958 Estimated fair value of Purchase Price Note 28,100 Estimated fair value of Earnout Note 125,000 $ 226,058 _______________ (1) Includes $15.3 million paid at closing and an estimated $7.6 million payable subsequent to the end of the third quarter of fiscal 2021 upon completion of the review of the assets acquired and liabilities assumed. Contingent Consideration The Earnout Note is accounted for as contingent consideration. The initial fair value of the Earnout Note was estimated as of the date of acquisition to be $28.1 million and was preliminarily valued using a Monte Carlo simulation analysis in a risk-neutral framework with assumptions for volatility, market price of risk adjustment, risk-free rate, and cost of debt. This fair value measurement is based on significant inputs not observable in the market. The Earnout Note is revalued each quarter and any change in valuation is reflected in the Company’s condensed consolidated statements of operations. During the third quarter of fiscal 2021, the Company adjusted the fair value of the Earnout Note to its current fair value with such change recognized in income from operations. The change in fair value reflects new information about the probability and timing of meeting the conditions of the revenue and gross profit targets. As of May 28, 2021, the fair value of the Earnout Note was $44.5 million. Provisional Valuation The Company estimated the provisional fair value of the assets and liabilities of the LED Business as of March 1, 2021, the acquisition date. Due to the timing of acquisition and the contractual provisions to review the net working capital of the acquired LED Business, the estimated purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on preliminary valuation analyses. These preliminary values may change in future reporting periods upon finalization of the net working capital adjustment and the allocation of consideration to the assets acquired and liabilities assumed. The provisional valuation of the LED Business assets acquired and liabilities assumed, noncontrolling interest in subsidiary, and consideration are as follows (in thousands): Amount Cash and cash equivalents $ 36,721 Accounts receivable, net 45,608 Inventories 60,423 Prepaid expenses and other current assets 5,204 Property and equipment, net 70,862 Operating lease right-of-use assets 7,494 Intangible assets, net 64,500 Other noncurrent assets 26 Accounts payable (14,181 ) Other current liabilities (37,001 ) Long-term operating lease liabilities (4,019 ) Other long-term liabilities (2,101 ) Total net assets acquired $ 233,536 Noncontrolling interest in subsidiary (7,478 ) Consideration $ 226,058 The estimated fair values and useful lives of the intangible asset acquired are as follows (in thousands): Amount Estimated Useful Life (in years) Technology $ 49,800 7-8 Tradenames/Tradenames 6,100 5 Customer relationships 5,200 7-8 Order backlogs 3,400 less than 1 $ 64,500 Technology intangible assets were valued using the multi-period excess earnings method based on the discounted cash flow and technology obsolescence rate. The discounted cash flow requires the use of significant assumptions, including projected revenue, expenses, capital expenditures and other costs, and discount rates calculated based on the cost of equity adjusted for various risks, including the size of the acquiree, industry risk, and other risk factors. Tradenames/trademarks intangible assets were valued using the relief from royalty method, which is the discounted cash flow savings accruing to the owner by virtue of the fact that the owner is not required to license the tradenames/trademarks from a third party. Key assumptions included attributable revenue expected from the tradenames/trademarks, royalty rates, and assumed asset life. Customer relationships intangible assets were valued using the multi-period excess earnings method, which is the present value of the projected cash flows that are expected to be generated by the existing intangible asset after reduction by an estimated fair rate of return on contributory assets required to generate the customer relationship revenues. Key assumptions included discounted cash flow, estimated life cycle, and customer attrition rates. Order backlog intangible assets represent the value of existing firm purchase orders in place at the time of acquisition and were valued using the discounted cash flow method, which accounts for the expected profit related to the purchase orders. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information presents the Company’s combined results of operations as if the acquisition of the LED Business had occurred on August 31, 2019. The unaudited pro forma financial information is based on various adjustments and assumptions and is not necessarily indicative of what the Company’s results of operations actually would have been had the acquisition been completed as of August 31, 2019 or will be for any future periods. Furthermore, the pro forma financial information does not include adjustments to reflect any potential revenue, synergies or dis-synergies, or cost savings that may be achievable in connection with the acquisition, or the associated costs that may be necessary to achieve such revenues, synergies or cost savings. The unaudited pro forma financial information for the three months ended May 29, 2020 combines the results of operations of the Company for the three months ended May 29, 2020 and the results of operations of the LED Business for the three months ended March 29, 2020. The unaudited pro forma financial information for the nine months ended May 28, 2021 combines the results of operations of the Company for the nine months ended May 28, 2021 (which include the results of the LED Business beginning on the March 1, 2021 acquisition date) and the results of operations of the LED Business for the six months ended December 27, 2020. The unaudited pro forma financial information for the nine months ended May 29, 2020 combines the results of operations of the Company for the nine months ended May 29, 2020 and the results of operations of the LED Business for the nine months ended March 29, 2020. Three Months Ended Nine Months Ended (in thousands, except per share data) May 29, 2020 May 28, 2021 May 29, 2020 Total net sales $ 382,987 $ 1,237,627 $ 1,161,347 Net loss attributable to SGH $ (28,172 ) $ (163,431 ) $ (92,592 ) Earnings per share: Basic $ (1.17 ) $ (6.58 ) $ (3.87 ) Diluted $ (1.17 ) $ (6.58 ) $ (3.87 ) The unaudited pro forma financial information above reflects the following adjustments: • Incremental cost of sales related to the esti • Incremental depreciation expense related to the estimated fair value of property and equipment. • Incremental amortization expense related to the estimated fair value of identifiable intangible assets. • Incremental • The adjustments to income tax expense as a result of the pro forma adjustments. Acquisition-related transaction expenses were $5.8 million for the nine months ended May 28, 2021, and are reflected in selling, general, and administrative expenses in the accompanying condensed consolidated statements of operations. For the period from March 1, 2021, the acquisition date, to May 28, 2021, revenues for the LED Business were $101.8 million, while earnings were not material. Fiscal Year 2019 SMART Embedded Computing, Inc. (SMART EC) On July 8, 2019, SMART Global Holdings entered into a Stock Purchase Agreement (the “Artesyn SPA”), by and among SMART Global Holdings, Artesyn Embedded Computing, Inc., a Wisconsin corporation (“AEC”), Pontus Intermediate Holdings II, LLC, a Delaware limited liability company, and Pontus Holdings LLC, a Delaware limited liability company. Pursuant to the Artesyn SPA, on July 8, 2019, the Company agreed to purchase all of the shares of AEC, a private company based in Tempe, Arizona and Artesyn Netherlands B.V., a company with limited liability organized under the laws of the Netherlands (AEC and Artesyn Netherlands B.V., collectively “Artesyn”), both entities being subsidiaries of Artesyn Embedded Technologies, Inc. SMART Global Holdings through one or more subsidiaries, paid the Artesyn equityholders a base purchase price of approximately $75 million at closing using cash on hand. Pursuant to the Artesyn SPA, the former equityholders of Artesyn were also entitled to earn-out payments of up to $10 million based on Artesyn’s achievement of specific gross revenue levels through December 31, 2019 plus additional earn-out payments of $0.10 for each dollar of gross revenue through December 31, 2019 over an agreed upon achievement level. The earn-out would have been payable, at the option of the Company, in either cash or ordinary shares of SMART Global Holdings. SMART Global Holdings deposited $0.8 million of the purchase price into escrow as security for sellers’ indemnification obligations during the escrow period of one year. The Company changed the name of AEC to SMART Embedded Computing, Inc. (“SMART EC”). No earn-out was achieved. Under the acquisition method of accounting, the assets acquired and liabilities assumed of SMART EC were recorded as of the acquisition date at their respective fair values. The reported consolidated financial condition after completion of the acquisition reflects these fair values. SMART EC’s results of operations are included in the condensed consolidated financial statements from the date of acquisition. The initial fair value of contingent consideration was estimated at the date of acquisition to be $2.7 million, which was recorded as a current liability. The Company determined the fair value of the obligations to pay contingent consideration using a real options technique which incorporates various estimates, including projected gross revenue for the period, a volatility factor applied to gross revenue based on year-on-year growth in gross revenue of comparable companies, discount rates and the estimated amount of time until final payment is made. This fair value measurement is based on significant inputs not observable in the market, which ASU 820-10-35 refers to as Level 3 inputs. The resulting probability-weighted cash flows were discounted using the Company’s estimated cost of debt of 8.50% derived from the Company’s interest rates from the existing line of credit (2.75% plus US Prime Rate) and its term loan (6.25% plus 3-month LIBOR). During fiscal 2019, the Company adjusted the contingent consideration to its current fair value with such changes recognized in income from operations. Changes in fair values reflect new information about the probability and timing of meeting the conditions of the gross revenue target. For the earn-out period ended December 31, 2019, the required gross revenue levels were not achieved. No additional consideration was included in the purchase price as a result of the earn-out provisions. A reconciliation of net cash exchanged in accordance with the Artesyn SPA to the total purchase price as of the closing date of the transaction, July 8, 2019, is presented below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Net cash for merger $ 74,358 $ — $ 74,358 Cash and cash equivalents acquired 37 — 37 Upfront payment in accordance with agreement 74,395 — 74,395 Post-closing adjustments in accordance with agreement 558 (234 ) 324 Total consideration 74,953 (234 ) 74,719 Estimated fair value of contingent consideration 2,700 - 2,700 Total purchase price $ 77,653 $ (234 ) $ 77,419 The total purchase consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed. The assets acquired and liabilities assumed at the acquisition date are based upon their respective fair values summarized below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Tangible assets acquired $ 16,482 $ — $ 16,482 Liabilities assumed (7,840 ) — (7,840 ) Identifiable intangible assets 41,900 — 41,900 Goodwill 27,111 (234 ) 26,877 Total net assets acquired $ 77,653 $ (234 ) $ 77,419 The provisional amounts presented in the table above pertained to the preliminary purchase price allocation reported in our Form 10-K for fiscal 2019. The measurement period adjustment, as recognized in the fourth quarter of fiscal 2020, is related to the finalization of the net working capital adjustment. We do not believe that the measurement period adjustments had a material impact on our condensed consolidated statements of operations, balance sheets or cash flows in any periods previously reported. The final determination of the fair values were completed within the measurement period of up to one year from the acquisition date, and adjustments to provisional amounts that were identified during the measurement period were recorded in the reporting period in which the adjustment was determined. Asset categories acquired included working capital, fixed assets, and identified intangible assets. The intangible assets are as follows (in thousands): Amount Estimated Useful Life (in years) Customer relationships $ 31,800 4-6 years Technology 10,100 4 years $ 41,900 The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. The Company does not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the SMART EC acquisition has been recorded as a noncurrent asset and is not amortized but is subject to an annual review for impairment. Factors that contributed to the recognition of goodwill include the broader reach and capabilities of the Company into new technologies, markets and channels that leverage its existing products and services. SMART EC brings an outstanding customer base, solid products and strong supplier relationships to the Company in the defense, industrial IoT (“IIoT”), edge computing, and communications OEM markets. SMART EC will have substantially improved access to capital to drive additional investment in, and further development and growth of its products and services. During fiscal 2020 and 2019, the Company incurred certain costs related to the acquisition, which are included in selling, general and administrative expense in the condensed consolidated statements of operations, these merger-related costs included professional fees in the amounts of $0.6 million and $1.0 million, respectively. The revenue and net income earned by SMART EC following the acquisition are not material to the Company’s condensed consolidated results of operations for fiscal 2019. SMART Wireless Computing, Inc. (SMART Wireless) On July 9, 2019, SMART Global Holdings entered into an Agreement and Plan of Merger (the “Inforce Merger Agreement”), by and among SMART Global Holdings, Thor Acquisition Sub I, Inc., a California corporation and a wholly-owned indirect subsidiary of the SMART Global Holdings (“Merger Sub I”), Thor Acquisition Sub II, Inc., a Delaware corporation and a wholly-owned indirect subsidiary of the SMART Global Holdings (“Merger Sub II”), and Inforce Computing, Inc., a California corporation (“Former Inforce”). Pursuant to the Inforce Merger Agreement, on July 9, 2019, Merger Sub I was merged with and into Former Inforce, with Former Inforce continuing as the surviving corporation (the “First Merger”) and, immediately following the effectiveness of the First Merger, the surviving corporation of the First Merger was merged with and into Merger Sub II, with Merger Sub II surviving as a wholly-owned indirect subsidiary of SMART Global Holdings (the “Inforce Merger”). SMART Global Holdings through one or more subsidiaries, paid the Former Inforce equityholders approximately $14.6 million, including amounts paid at closing composed of $3.2 million in cash and 382,788 of ordinary shares of SMART Global Holdings valued at $9.1 million, and amounts retained by the Company as security for the sellers’ indemnification obligations as well as any post-closing adjustments to the purchase price (the “Holdback”) composed of $0.7 million in cash and 67,550 of ordinary shares of SMART Global Holdings valued at $1.6 million. During the fourth quarter of fiscal 2020, the Company paid out $0.4 million in cash and issued all shares related to the Holdback. The Company changed the name of Inforce Computing to SMART Wireless Computing, Inc. (“SMART Wireless”). Under the acquisition method of accounting, the assets acquired and liabilities assumed of SMART Wireless were recorded as of the acquisition date at their respective fair values. The reported condensed consolidated financial condition after completion of the acquisition reflects these fair values. SMART Wireless’ results of operations are included in the condensed consolidated financial statements from the date of acquisition. A reconciliation of net cash exchanged in accordance with the Inforce Merger Agreement to the total purchase price as of the closing date of the transaction, July 9, 2019, is presented below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Net cash for merger $ 1,581 $ — $ 1,581 Cash and cash equivalents acquired 1,576 — 1,576 Upfront cash payment 3,157 — 3,157 Upfront shares issued 9,167 — 9,167 Upfront consideration in accordance with agreement 12,324 — 12,324 Purchase price holdback - cash due to pre-closing holders 413 — 413 Purchase price holdback - shares due to pre-closing holders 1,618 — 1,618 Post-closing adjustments in accordance with agreement 285 (39 ) 246 Total purchase price $ 14,640 $ (39 ) $ 14,601 The total purchase consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed. The assets acquired and liabilities assumed at the acquisition date are based upon their respective fair values summarized below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Tangible assets acquired $ 5,266 $ — $ 5,266 Liabilities assumed (5,643 ) — (5,643 ) Identifiable intangible assets 6,700 — 6,700 Goodwill 8,317 (39 ) 8,278 Total net assets acquired $ 14,640 $ (39 ) $ 14,601 The provisional amounts presented in the table above pertained to the preliminary purchase price allocation reported in our Form 10-K for fiscal 2019. The measurement period adjustment, as recognized in the fourth quarter of fiscal 2020, is related to the finalization of the net working capital adjustment. We do not believe that the measurement period adjustments had a material impact on our condensed consolidated statements of operations, balance sheets or cash flows in any periods previously reported. The final determination of the fair values were completed within the measurement period of up to one year from the acquisition date, and adjustments to provisional amounts that were identified during the measurement period were recorded in the reporting period in which the adjustment was determined. Asset categories acquired included working capital, fixed assets, and identified intangible assets. The intangible assets are as follows (in thousands): Amount Estimated Useful Life (in years) Customer relationships $ 5,800 5 years Technology 900 5 years $ 6,700 The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. The Company does not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the SMART Wireless acquisition has been recorded as a noncurrent asset and is not amortized, but is subject to an annual review for impairment. Factors that contributed to the recognition of goodwill include the broader reach and capabilities of the Company into new technologies, markets and channels that leverage its existing products and services. SMART Wireless is a fast growing developer of high-performance production-ready ARM ISA-based embedded computing platforms for IoT applications enabling the next generation of connected devices. During fiscal 2020 and 2019, the Company incurred certain costs related to the acquisition, which are included in selling, general and administrative expense in the condensed consolidated statements of operations, these merger-related costs included professional fees in the amounts of $0.2 million and $0.5 million, respectively. The revenue and net income earned by SMART Wireless following the acquisition are not material to the Company’s condensed consolidated results of operations for fiscal 2019. Premiere Logistics In February 2019, the Company acquired all of the outstanding shares of Premiere Customs Brokers, Inc. and Premiere Logistics, Inc., both privately-held California corporations (collectively “Premiere Logistics”). The primary purpose of this acquisition is to provide the Company with cost savings solutions in support of its own freight and logistics requirements. In connection with the acquisition, the Company paid upfront cash consideration of $0.2 million. The assets acquired and liabilities assumed at the acquisition date are based on their respective fair values summarized below (in thousands): Tangible assets acquired $ 277 Liabilities assumed (168 ) Identifiable intangible assets 83 Total net assets acquired $ 192 Results of operations of the businesses acquired have been included in the Company’s consolidated financial statements subsequent to the date of acquisition. The revenue and net income earned by the businesses acquired following the acquisition are not material to our condensed consolidated results of operations. No pro forma financial information is presented for any of the acquisitions in fiscal 2019 as the impact is not material, individually or in the aggregate, to the Company’s condensed consolidated statements of operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
May 28, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | ( 3 ) Related Party Transactions In the normal course of business, the Company had transactions with its affiliates as follows (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Affiliates: Net sales $ 20,103 $ 24,139 $ 53,251 $ 59,691 As of May 28, 2021 and August 28, 2020, amounts due from these affiliates were $14.2 million and $6.5 million, respectively. On July 9, 2019, SMART Wireless became a wholly-owned subsidiary of the Company (see Note 2). Included in the selling shareholders of this acquisition were the Company’s former CEO and two members of the Company’s Board of Directors, who became entitled to receive in the aggregate 397,407 SGH common shares valued at $ 9.5 million (consisting of 337,692 shares issued upon closing and 59,715 shares that were subject to the Holdback which were issued and paid in the fourth quarter of 2020 ). |
Foreign Currency Exchange Contr
Foreign Currency Exchange Contracts | 9 Months Ended |
May 28, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Foreign Currency Exchange Contracts | ( 4 ) Foreign Currency Exchange Contracts The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company utilizes foreign exchange forward contracts to mitigate foreign currency exchange rate risk associated with foreign-currency-denominated assets and liabilities, primarily third party payables. The Company does not use foreign currency contracts for speculative or trading purposes. Foreign exchange forward contracts outstanding at May 28, 2021 are not designated as hedging instruments for hedge accounting purposes. Accordingly, any gains or losses resulting from changes in the fair value of the non-designated forward contracts are reported in other income, net in the condensed consolidated statements of operations. The gains and losses on these forward contracts generally offset the gains and losses associated with the underlying foreign-currency-denominated balances, which are also reported in other income, net. As of May 28, 2021, the Company’s non-designated forward contacts resulted in a $3.4 million derivative liability. As of August 28, 2020, the Company’s non-designated forward contracts resulted in a $0.1 million derivative asset and a $0.9 million derivative liability. For the three and nine months ended May 28, 2021, the Company recognized net realized losses in the amount of $4.2 million and $3.5 million, respectively, and net unrealized gains on the change in the fair value of the non-designated forward contracts in the amount of $5.6 million and $2.5 million, respectively. |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
May 28, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | (5 ) Balance Sheet Details Inventories Inventories consisted of the following (in thousands): May 28, August 28, 2021 2020 Raw materials $ 134,180 $ 89,943 Work in process 47,697 16,672 Finished goods 107,085 56,376 Total inventories* $ 288,962 $ 162,991 * As of May 28, 2021 and August 28, 2020, 7% and 17%, respectively, of total inventories represented inventory held under the Company's supply chain services. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): May 28, August 28, 2021 2020 Financial credits* $ 20,006 $ 6,359 Prepayment for VAT and other transaction taxes 10,357 2,119 Prepaid R&D expenses 3,763 1,865 Unbilled service receivables 3,310 1,265 Prepaid income taxes 1,064 1,201 Other prepaid expenses and other current assets 14,841 14,181 Total prepaid expenses and other current assets $ 53,341 $ 26,990 * See Note 1(i). Property and Equipment, Net Property and equipment consisted of the following (in thousands): May 28, August 28, 2021 2020 Office furniture, software, computers and equipment $ 32,527 $ 21,528 Manufacturing equipment 170,173 113,035 Building and building improvements* 51,045 26,498 Land 16,129 1,208 269,874 162,269 Less accumulated depreciation and amortization 116,613 107,564 Net property and equipment $ 153,261 $ 54,705 * Includes facilities in Penang and Huizhou, which are situated on leased land. Depreciation and amortization expense for property and equipment during the three and nine months ended May 28, 2021 was approximately $9.1 million and $19.5 million, respectively and $5.4 million and $17.6 million, respectively for the corresponding periods of fiscal 2020. Other Noncurrent Assets Other noncurrent assets consisted of the following (in thousands): May 28, August 28, 2021 2020 Deferred tax asset $ 4,859 $ 3,450 Prepaid ICMS taxes in Brazil* 3,088 3,976 Prepaid R&D expense 881 1,356 Deposits on equipment — 8,170 Other 4,999 3,602 Total other noncurrent assets $ 13,827 $ 20,554 * See Note 1(i). Other Current Liabilities Other current liabilities consisted of the following (in thousands): May 28, August 28, 2021 2020 Accrued compensation $ 27,672 $ 16,862 Line of credit 25,000 — Accrued variable consideration 16,250 — Deferred revenue 15,855 17,264 Current portion of lease liabilities 8,547 5,304 VAT and other transaction taxes payable 6,775 6,143 Income taxes payable 4,952 1,352 Derivative liabilities 3,420 912 Accrued warranty reserve 1,791 1,316 Other current liabilities 27,746 8,676 Total other current liabilities $ 138,008 $ 57,829 Leases The Company determines if an arrangement is a lease as well as the classification of the lease at inception for arrangements with an initial term of more than 12 months and classifies it as either finance or operating. Operating leases are recorded in operating lease right-of-use assets, net, accrued liabilities, and long-term lease liabilities on the Company’s condensed consolidated balance sheets. For operating leases of buildings, the Company accounts for non-lease components, such as common area maintenance, as a component of the lease, and include s such in the initial measurement of the Company’s operating lease assets and corresponding liabilities. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term . The Company does not have financing leases as of May 28, 2021. The Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to us. The Company took into consideration its credit rating and the length of the lease when calculating the incremental borrowing rate. The Company considers the options to extend or terminate the lease in determining the lease term, when it is reasonably certain to exercise one of the options. For the purpose of lease liability measurement, the Company considers only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. The Company’s lease terms may include options to extend when it is reasonably certain that it will exercise that option. The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. The Company’s lease assets are tested for impairment in the same manner as long-lived assets used in operations. The Company generally recognizes sublease income on a straight-line basis over the sublease term. The components of lease costs are as follows (in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 29, 2020 May 28, 2021 May 29, 2020 Operating lease cost $ 2,856 $ 1,832 $ 6,310 $ 4,955 Variable lease cost 409 221 969 576 Short-term lease cost 106 36 221 252 Total lease costs $ 3,371 $ 2,089 $ 7,500 $ 5,783 Weighted-average remaining lease term 6.4 years 7.5 years 6.4 years 7.5 years Weighted-average discount rate 6.8 % 7.9 % 6.8 % 7.9 % Future minimum undiscounted payments under the Company’s non-cancelable operating leases were as follows as of May 28, 2021 (in thousands): Fiscal year ending August: Amount Remainder of 2021 $ 3,128 2022 10,663 2023 7,816 2024 4,536 2025 3,819 2026 and thereafter 18,822 Total 48,784 Less Short-term lease commitments (135 ) Less imputed interest (11,739 ) Present value of total lease liabilities $ 36,910 Right-of-use assets obtained in exchange for new operating lease liabilities for the three and nine months ended May 28, 2021 were $13.6 million and $16.9 million, respectively, and $0.9 million and $8.9 million, respectively for the corresponding periods in fiscal 2020. Noncontrolling Interest In connection with the Company’s acquisition of the LED Business on March 1, 2021, the Company has a 51% ownership interest in Cree Venture LED Company Limited (the “Cree Joint Venture”), a joint venture with San’an. The Cree Joint Venture has a five-member board of directors, three of which are designated by the Company and two of which are designated by San’an. As a result of the Company’s majority voting interest, the Company consolidates the operations of the Cree Joint Venture and reports its results of operations within the Company’s LED Products segment. The Cree Joint Venture has a manufacturing agreement pursuant to which San’an supplies the Cree Joint Venture with mid-power LED products, and the Company and the Cree Joint Venture have a sales agency agreement pursuant to which the Company is the independent sales representative of the Cree Joint Venture. The Cree Joint Venture produces and delivers to market high performing, mid-power lighting class LEDs serving the N orth and South America, Europe, Japan and China markets . The 49% ownership interest held by San’an is classified as noncontrolling interest in the accompanying condensed consolidated balance sheet. Subsequent to the acquisition of the LED Business, noncontrolling interest increased by $0.6 million in the third quarter of fiscal 2021 for the San’an share of net income from the Cree Joint Venture. |
Income Taxes
Income Taxes | 9 Months Ended |
May 28, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (6 ) Income Taxes Provision for income taxes for the three and nine month periods presented consisted of the following (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Provision for income taxes $ 4,010 $ 2,700 $ 8,485 $ 4,365 Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to the Company and its subsidiaries, adjusted for certain discrete items which are fully recognized in the period they occur. Provision for income taxes for the three and nine months ended May 28, 2021 increased by $1.3 million As of May 28, 2021, the Company has a full valuation allowance for its net deferred tax assets associated with its U.S. operations. The amount of the deferred tax asset considered realizable could be adjusted if significant positive evidence increases. Determining the consolidated provision for income tax expense, income tax liabilities, and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates, which involves estimating current tax exposures, as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction. The estimates used could differ from actual results, which may have a significant impact on operating results in future periods. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
May 28, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | ( 7 ) Long-Term Debt Convertible Senior Notes due 2026 In February 2020, the Company issued $250.0 million in aggregate principal amount of 2.25% convertible senior notes due 2026 (the “Notes”) in a private placement, including $30.0 million in aggregate principal amount of the Notes that the Company issued resulting from initial purchasers fully exercising their option to purchase additional notes. The Notes are general unsecured obligations and bear interest at an annual rate of 2.25% per year, payable semi-annually on February 15 and August 15 of each year, beginning on August 15, 2020 The Notes will mature on February 15, 2026, unless earlier converted, redeemed or repurchased. No sinking fund is provided for the Notes. The initial conversion rate of the Notes is 24.6252 ordinary shares per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $40.61 per ordinary share. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture. The holders of the Notes may convert their Notes at their option in the following circumstances: • during any fiscal quarter commencing after the fiscal quarter ending on May 28, 2021 (and only during such fiscal quarter), if the last reported sale price per ordinary share exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter; • during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the measurement period) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per ordinary share on such trading day and the conversion rate on such trading day; • upon the occurrence of certain corporate events or distributions on the Company’s ordinary shares, as provided in the Indenture; • if the Company calls such Notes for redemption; and • on or after August 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion, the Company will pay or deliver, as applicable, cash, ordinary shares or a combination of cash and ordinary shares at the Company's election. The Company’s intent is to settle conversions through combination settlement with a specified dollar amount of $1,000 per $1,000 principal amount of Notes, which involves repayment of the principal portion of such Notes in cash and any excess of the conversion value over the principal amount in ordinary shares, with cash in lieu of any fractional ordinary shares Upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time. In addition, upon the occurrence of a “fundamental change” (as defined in the Indenture), holders of the Notes may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. If any taxes imposed or levied by or on behalf of the Cayman Islands (or certain other jurisdictions described in the Indenture) are required to be withheld or deducted from any payments or deliveries made under or with respect to the Notes, then, subject to certain exceptions, the Company will pay or deliver to the holder of each Note such additional amounts as may be necessary to ensure that the net amount received by the beneficial owner of such Note after such withholding or deduction (and after withholding or deducting any taxes on the additional amounts) will equal the amounts that would have been received by such beneficial owner had no such withholding or deduction been required. The Company has a right to redeem the Notes, in whole or in part, at its option at any time, and from time to time, from February 21, 2023 through the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest. However, the repurchase right is only applicable if the last reported per share sale price of ordinary share exceeds 130% of the conversion price on each of at least twenty trading days during the thirty consecutive trading days ending on, and including, the trading day immediately before the redemption notice date for such redemption. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component of approximately $197.5 million was calculated by using a discount rate of 6.53%, which was the Company’s borrowing rate on the date of the issuance of the Notes for a similar debt instrument without the conversion feature. The carrying amount of the equity component of approximately $52.5 million, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component of the Notes is included in additional paid-in capital in the condensed consolidated balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification, which the Company will reassess every reporting period. The difference between the principal amount of the Notes and the liability component (the debt discount) is amortized to interest expense using the effective interest method over the term of the Notes. Debt issuance costs for the issuance of the Notes were approximately $8.0 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Notes. Transaction costs attributable to the liability component were approximately $6.3 million, were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes using the effective interest method. The transaction costs attributable to the equity component were approximately $1.7 million and were netted with the equity component in shareholders’ equity. The carrying value of the Notes is as follows (in thousands): May 28, August 28, 2021 2020 Principal $ 250,000 $ 250,000 Unamortized debt discount (43,009 ) (48,586 ) Unamortized issuance costs (5,171 ) (5,841 ) Net carrying amount $ 201,820 $ 195,573 As of May 28, 2021, the remaining life of the Notes was approximately 57 months. The unamortized debt discounts and unamortized debt issuance cost are amortized over the remaining useful life, using an effective interest rate of 7.06%. As of May 28, 2021 the carrying value of the equity component was $50.8 million, net of the issuance costs of $1.7 million. The following table sets forth the total interest expense recognized related to the Notes (in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 29, 2020 May 28, 2021 May 29, 2020 Contractual interest expenses $ 1,438 $ 1,391 $ 4,219 $ 1,688 Amortization of debt discount 1,864 1,707 5,577 2,106 Amortization of debt issuance costs 224 247 670 253 Total interest cost recognized $ 3,526 $ 3,345 $ 10,466 $ 4,047 As of May 28, 2021 and August 28, 2020, t he total estimated fair value for the Notes was determined to be $334.2 million and $221.5 million, respectively based on the closing trading price per $100 There are no future minimum principal payments made under the Notes as of May 28, 2021, the full amount of $250.0 million is due in fiscal 2026. Capped Calls In connection with the offering of the Notes, the Company entered into privately-negotiated capped call transactions, at arms-length, with certain counterparties (the “Capped Calls”). The Capped Calls each have an initial strike price of approximately $40.61 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have initial cap prices of $54.145 per share, which are subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, approximately 6.2 million of the Company’s ordinary shares. The Capped Calls are generally intended to reduce the potential economic dilution to the Company’s ordinary shares upon any conversion of Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The Capped Calls expire February 15, 2026 (the maturity date of the Notes), subject to earlier exercise. The Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including mergers, tender offers and delistings involving the Company. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including insolvency filings and hedging disruptions. The Capped Calls were originally classified as noncurrent derivative assets due to the Capped Calls only being settleable in cash until the Company has obtained shareholder approval for repurchasing its ordinary shares. The Capped Calls were initially recognized at fair value of $21.8 million, reflecting the premium paid by the Company to the capped call counterparties. The related noncurrent derivative assets were classified as a Level 3 measurement as the Company used stock price volatility implied from options traded with a substantially shorter term, which made this an unobservable input that is significant to the valuation. In a meeting of the Company’s shareholders held on March 30, 2020, the holders of the Company’s ordinary shares voted in favor of a proposal to amend and restate the Company’s memorandum and articles of association to permit the Company to purchase or otherwise acquire its ordinary shares in such amounts and at such prices and at such time and from time to time as the Company’s board of directors may approve in the future. This amendment and restatement also enables the Company to utilize shares or cash, or any combination thereof, in order to settle the capped call transactions, which resulted in the reclassification of the related non-current derivative asset to additional paid in capital within Shareholders’ Equity in an amount equal to the fair value of the Capped Calls as of March 30, 2020. The fair value of the Capped Calls on March 30, 2020 was approximately $14.1 million. The Company recognized a loss of approximately $7.7 million in fiscal 2020, due to remeasurement of the Capped Calls at fair value. These losses are included in the condensed consolidated statement of operations within Other expense, net. Purchase Price Note In connection with the acquisition of the LED Business on March 1, 2021, the Company issued an unsecured promissory note to Cree in the amount of $125 million. The Purchase Price Note bears interest at LIBOR plus 3.0% and is due on August 15, 2023. Interest is payable quarterly, beginning in June 2021. Amended Credit Agreement On August 9, 2017, SMART Worldwide, SMART Modular Technologies (Global), Inc. (“Global”), and SMART Modular Technologies, Inc. (“SMART Modular”) entered into a Second Amended and Restated Credit Agreement (together with all related loan documents, as amended by the First and Second 2018 Amendments as defined below, the “2017 Credit Agreement”) with certain lenders. The 2017 Credit Agreement amended and restated that certain Amended and Restated Credit Agreement dated as of November 5, 2016 (the “2016 Credit Agreement”), which had amended and restated that certain Credit Agreement dated as of August 26, 2011 (the “2011 Credit Agreement”). The Company’s subsidiaries that are named as borrowers in the 2017 Credit Agreement and certain other subsidiaries that entered into a guarantee with respect to the 2017 Credit Agreement, including Penguin, SMART EC and SMART Wireless, are collectively referred to as the “Loan Parties” and together with SMART Modular Technologies Sdn. Bhd. (“SMART Malaysia”), the “Credit Group.” The 2017 Credit Agreement provide d for $ 165 million of initial term loans (the “ Initial Term Loan ” ) with a maturity date of August 9, 2022 and $ 50 million of revolving loans with a maturity date of February 9, 2021 (the “ Initial Revolver Maturity Date ” ) which revolving loan maturity date would have automatically extend ed to February 9, 2022 if the total lever age ratio of the Credit Group was less than 3.0 :1.0 on the Initial Revolver Maturity Date. SMART Global Holding s was not a party to the 2011, 2016 or 2017 Credit Agreement s . On June 8, 2018, SMART Worldwide, Global and SMART Modular entered into an Incremental Facility Agreement (the “First 2018 Amendment”) which provided for incremental term loans under the 2017 Credit Agreement in the aggregate amount of $60 million (the “Incremental Term Loans”) which Incremental Term Loans were on substantially identical terms as the Initial Term Loans. Pursuant to the First 2018 Amendment, the borrowers agreed to pay the structuring advisor a $0.6 million fee pursuant to a separate agreement. On October 2, 2018, SMART Worldwide, Global and SMART Modular entered into a Second Amendment to the Amended Credit Agreement (the “Second 2018 Amendment”) which did not become effective until October 25, 2018 and which, among other things, created certain holidays from principal repayments. The 2017 Credit Agreement was jointly and severally guaranteed on a senior basis by certain subsidiaries of Global (excluding, among other subsidiaries, SMART Malaysia). In addition, the 2017 Credit Agreement was secured by a pledge of the capital stock of, or equity interests in, most of the subsidiaries of SMART Worldwide (including, without limitation, SMART Malaysia, Penguin, SMART EC and SMART Wireless) and by substantially all of the assets of the subsidiaries of SMART Worldwide, excluding the assets of SMART Malaysia and certain other subsidiaries. Covenants . The 2017 Credit Agreement contained various representations and warranties and affirmative and negative covenants that are usual and customary for loans of this nature including, among other things, limitations on the Credit Group’s ability to engage in certain transactions, incur debt, pay dividends, and make investments. The 2017 Credit Agreement also required that the Credit Group maintain a Secured Leverage Ratio not in excess of 3.5:1.0 as of the end of each fiscal quarter (commencing with the fiscal quarter ending November 24, 2017) and puts restrictions on the Credit Group’s ability to retain cash proceeds from the sale of certain assets with net proceeds in excess of $2 million, subject to customary six-month Interest and Interest Rates . Loans under the 2017 Credit Agreement accrued interest at a rate per annum equal to an applicable margin plus, at the borrowers’ option, either a LIBOR rate, or a base rate. The applicable margin for term loans with respect to LIBOR borrowings was 6.25% and with respect to base rate borrowings was 5.25%. The interest rate on the Initial Term Loans and Incremental Term Loans was 8.16 8.14 Under the 2017 Credit Agreement, the applicable margin for revolving loans adjusted every quarter based on the Secured Leverage Ratio for the most recent fiscal quarter with the applicable margin for revolving loans with respect to LIBOR borrowings ranging from 3.75% to 4.00% and the applicable margin for revolving loans with respect to base rate borrowings ranging from 2.75% to 3.00%. Interest on base rate loans were payable on the last day of each calendar quarter. Interest on LIBOR-based loans was payable every one, two, three, six, nine or twelve months after the date of each borrowing, dependent on the particular interest rate period selected with respect to such borrowing. Principal Payments . The 2017 Credit Agreement required quarterly repayments of principal under the Initial Term Loans equal to 2.5% of $165 million, or $4.1 million per fiscal quarter and, commencing on November 30, 2018, quarterly repayments of principal under the Incremental Term Loans equal to 2.5% of $60 million, or $1.5 million per fiscal quarter. As a result of the Second Amendment, the borrowers were granted a holiday in fiscal 2019 from the obligation to make quarterly repayments of principal under the Initial Term Loans and the Incremental Term Loans. Prepayments . The borrowers have the right at any time to make optional prepayments of the principal amounts outstanding under the 2017 Credit Agreement provided that prepayments of principal which are voluntary or will be made in connection with certain transactions were subject to prepayment premiums of 3%, 2%, and 1% during the first, second and third years, respectively, after the effective date of the 2017 Credit Agreement. The 2017 Credit Agreement also requires certain mandatory prepayments of principal whereby the borrowers must prepay outstanding loans, subject to certain exceptions, which include, among other things: • (i) 75% of excess cash flow on a semi-annual basis if the total leverage ratio was greater than 1.5:1.0, (ii) 50% of excess cash flow on a semi-annual basis if the total leverage ratio was greater than 1.0:1.0 but less than or equal to 1.5:1.0 and (iii) 25% of excess cash flow on an annual basis if the secured leverage ratio was less than or equal to 1.0:1.0, which amounts would have been reduced by any voluntary prepayments of principal made in the applicable period; • 100% of the net proceeds of certain asset sales or other dispositions of property of Global or any of its restricted subsidiaries, subject to customary rights to reinvest the proceeds within six months; and • 100% of the net cash proceeds of incurrence of certain debt by Global or any of its restricted subsidiaries, other than proceeds from debt permitted to be incurred under the 2017 Credit Agreement. On June 2, 2017, SMART Global Holdings contributed to Global $61.0 million from the proceeds of the IPO closed in May 2017. Global in turn used the proceeds to pay down the original term loans under the 2011 Credit Agreement, as required under the 2016 Credit Agreement, which resulted in Term loans under the 2017 Credit Agreement were issued at a discount of 2.0% of the then outstanding principal amount of $165 million, for a discount of $3.3 million. The Company incurred $8.7 million debt issuance costs upon entering into the 2017 Credit Agreement, of which $5.3 million was attributable to the term loans and recorded as a direct reduction to the face amount of the term loans, and $3.4 million was allocated to the revolving line of credit and recorded as a separate asset on the balance sheet. Debt issuance costs and debt discount related to term loans are being amortized to interest expense based on the effective interest rate method over the life of the term loans. Those fees allocated to the revolving line of credit were amortized to interest expense ratably over the life of the revolving line of credit. In February 2020, the Company used net proceeds from the offering of the Notes to repay in full all outstanding principal balances, and to pay the associated prepayment premiums, accrued and unpaid interest and related fees and expenses, of the term loans under the 2017 Credit Agreement. The Company paid $208.7 million toward the full repayment of the outstanding debt including $202.9 million of principal, $3.8 million of accrued interest and $2.0 million of prepayment premiums. Unamortized debt discounts and issuance costs as of February 11, 2020 amounted to $4.6 million. As a result of the early repayment of the term loans the Company recognized a loss on extinguishment of debt in other expense, net of $6.6 million. On March 6, 2020, SMART Worldwide, Global and SMART Modular entered into a third amended and restated credit agreement (the “Amended Credit Agreement”) which amended and restated the 2017 Credit Agreement, including amendments thereto. SMART Global Holdings is not a party to the Amended Credit Agreement. The Amended Credit Agreement provides for an extension of the maturity on the $50 million revolving credit facility from February 9, 2021, to March 6, 2025. The Amended Credit Agreement also reduces the applicable margin on revolving loans incurred thereunder. Under the Amended Credit Agreement, loans bear interest at a rate per annum equal to either, at the borrowers’ option, a LIBOR rate or a base rate, in each case plus an applicable margin. The applicable margin was reduced by 25 basis points and is now (i) 3.75% per annum with respect to LIBOR borrowings, and 2.75% per annum with respect to base rate borrowings when the First Lien Leverage Ratio, as defined in the Amended Credit Agreement, is greater than 2.25 to 1.00 and (ii) 3.50% per annum with respect to LIBOR borrowings, and 2.50% per annum with respect to base rate borrowings when the First Lien Leverage Ratio is less than or equal to 2.25 to 1.00. The Amended Credit Agreement also modifies the financial maintenance covenant included therein to be set at a First Lien Leverage Ratio of 3.50 to 1.00 and to be applicable only if drawn revolving loans (plus issued letters of credit in excess of $10 million) outstanding as of the last day of any quarter exceed 30% of the aggregate revolving commitments available under the Amended Credit Agreement. The Amended Credit Agreement also increases the cap on the run rate cost savings add-back to the definition of Consolidated EBITDA to 35%, from 20% in the 2017 Credit Agreement and extends the time period for run rate cost savings actions to 24 months, from 12 months in the 2017 Credit Agreement. The Amended Credit Agreement also makes certain changes and/or improvements to the covenants and other terms in the 2017 Credit Agreement, including, among other things, (i) the elimination of the quarterly/annual lender call requirements, (ii) the expansion of the provisions for “Limited Conditionality Transactions” to include dividend declarations and irrevocable prepayment notices, (iii) the addition of debt and lien baskets permitting the incurrence of up to $150 million of “asset-based” revolving facilities, (iv) the addition of certain debt and lien baskets permitting the incurrence of additional debt and liens based on compliance with certain specified leverage and/or interest coverage ratios and (v) adjustments to threshold amounts and baskets under certain other covenants. The Amended Credit Agreement is jointly and severally guaranteed on a senior basis by certain subsidiaries of Global (excluding, among other subsidiaries, SMART Malaysia). In addition, the Amended Credit Agreement is secured by a pledge of the capital stock of, or equity interests in, most of the subsidiaries of SMART Worldwide (including, without limitation, SMART Malaysia, Penguin, SMART EC. and SMART Wireless) and by substantially all of the assets of the subsidiaries of SMART Worldwide, excluding the assets of SMART Malaysia and certain other subsidiaries. As a result of the Amended Credit Agreement, approximately $0.2 million was recognized as loss on extinguishment in Other expenses, net in fiscal 2020, which relates to costs from replacing one of the banks participating in the new credit agreement. During the three and nine months ended May 28, 2021 and May 29, 2020, the borrowers made scheduled principal payments of $0, $0, $0 and $5.6 million, respectively. No mandatory prepayments were required for the three and nine months ended May 28, 2021 or for fiscal 2020. As of May 28, 2021 and August 28, 2020, the outstanding principal balance of all term loans under the Amended Credit Agreement was $0 ABL Credit Agreement On December 23, 2020, SMART Modular, SMART EC, Penguin (Penguin together with SMART Modular and SMART EC, collectively the “ABL Borrowers”), certain other U.S. subsidiaries of the Company party thereto as guarantors (such other U.S. subsidiaries, together with the Borrowers, collectively the “ABL Loan Parties”) entered into a Loan, Guaranty and Security Agreement (the “ABL Credit Agreement”) with the financial institutions party to the ABL Credit Agreement from time to time as lenders (the “ABL Lenders”), and Bank of America, N.A., as administrative agent for the ABL Lenders. The ABL Credit Agreement provides for a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $100 million. The ABL Borrowers have the option to increase the total commitments under the ABL Credit Agreement to $150 million, subject to certain conditions, including obtaining commitments from one or more lenders. The ABL Credit Agreement provides that up to $30 million of revolving credit facility is available for issuances of letters of credit, and allows for swingline loans in an amount not to exceed $15 million. Availability of borrowings under the ABL Credit Agreement are based upon monthly (or, in certain cases, weekly) borrowing base certifications valuing eligible inventory and eligible accounts receivable, as reduced by certain reserves in effect from time to time. Under the ABL Credit Agreement, loans bear interest at a rate per annum equal to either, at the ABL Borrowers’ option, a LIBOR rate or a base rate, in each case plus an applicable margin. The applicable margin is (i) 1.75% per annum with respect to LIBOR borrowings, and 0.75% per annum with respect to base rate borrowings when average daily Availability, as defined in the ABL Credit Agreement, is equal to or greater than $50 million, (ii) 2.00% per annum with respect to LIBOR borrowings, and 1.00% per annum with respect to base rate borrowings when average daily Availability is less than $50 million and greater than or equal to $35 million, and (iii) 2.25% per annum with respect to LIBOR borrowings, and 1.25% per annum with respect to base rate borrowings when average daily Availability is less than $35 million. In addition to paying interest on outstanding principal, the ABL Borrowers are required to pay a monthly unused line fee of (a) 0.35%, if average daily Revolver Usage (as defined in the ABL Credit Agreement) was less than 50% of the Commitments (as defined in the ABL Credit Agreement) during the preceding calendar month, or (b) 0.25%, if average daily Revolver Usage was equal to or greater than 50% of the Commitments during such month. The ABL Borrowers are not required to make any scheduled amortization payments. The principal amount outstanding under the ABL Credit Agreement will be due and payable in full and the Commitments available thereunder shall terminate, on December 23, 2023. The ABL Credit Agreement contains customary affirmative and negative covenants and restrictions typical for a financing of this nature that, among other things, restrict the ABL Loan Parties’ ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, enter into certain transactions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, and transfer and sell material assets and merge or consolidate. In the event that certain minimum availability thresholds are not met on the last day of any period of four fiscal quarters, the ABL Borrowers will be required to maintain (i) a minimum Borrower Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) of not less than 1.0 to 1.0, and (ii) a minimum Global Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) of not less than 1.0 to 1.0, in each case, as of such last day of any period of four fiscal quarters. Subject to the Intercreditor Agreement (as defined below), non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the ABL Credit Agreement becoming immediately due and payable and termination of the commitments available thereunder. The ABL Credit Agreement is jointly and severally guaranteed on a senior basis by the ABL Loan Parties. In addition, the ABL Credit Agreement is secured by a pledge of the capital stock of, or equity interests in, the ABL Loan Parties and by substantially all of the assets of the ABL Loan Parties subject to customary exceptions. In connection with the ABL Credit Agreement, the ABL Loan Parties entered into a customary intercreditor agreement (the “Intercreditor Agreement”) in relation to the Amended Credit Agreement which Intercreditor Agreement governs how the collateral securing the respective obligations under the ABL Credit Agreement and the Amended Credit Agreement will be treated among the secured parties. Pursuant to the ABL Credit Agreement and Intercreditor Agreement, the obligations under the ABL Credit Agreement are secured by (1) a first-priority security interest, subject to certain customary exceptions, in assets held by the ABL Loan Parties consisting of accounts receivable, inventory and intangible assets to the extent attached to the foregoing, books and records related to the foregoing and the proceeds thereof, and (2) a second-priority security interest, subject to certain customary exceptions, in substantially all other present and future tangible and intangible assets held by the ABL Loan Parties and proceeds of the foregoing; and the obligations under the Amended Credit Agreement are secured by (1) a second-priority security interest, subject to certain customary exceptions, in assets held by the ABL Loan Parties consisting of accounts receivable, inventory and intangible assets to the extent attached to the foregoing, books and records related to the foregoing and the proceeds thereof, and (2) a first-priority security interest in, subject to certain customary exceptions, substantially all other present and future tangible and intangible assets held by the Loan Parties and proceeds of the foregoing. As of May 28, 2021 and August 28, 2020, outstanding principal balance of the ABL Credit Agreement was $25.0 million and $0, respectively. FINEP Credit Agreement In December 2020, SMART Brazil entered into a credit facility with the Funding Authority for Studies and Projects, or “FINEP”, referred to as the FINEP Credit Agreement. FINEP is an organization of the Brazilian federal government under the Ministry of Science, Technology and Innovation, devoted to funding science and technology in the country. Under the FINEP Credit Agreement, a total of R$102.2 million (or $18.9 million) has been made available to SMART Brazil for investments in technology innovation projects that will be used in infrastructure and research and development conducted in Brazil as well as for acquisitions of equipment. Outstanding debt under the FINEP Credit Agreement accrues interest at a fixed rate of 2.8% per annum and the agreement includes an obligation to draw down the entire loan within specified periods of time or pay unused commitment fees of 0.1% per month. The agreement also includes an initial administration fee of 1.09%, which is deducted from each advance of funds under the loan agreement. The FINEP Credit Agreement is a term loan payable interest only for the first 18 months then fully amortizing in 67 equal monthly installments of principal and interest beginning in June 2022 with the final payment of principal and all accrued and unpaid interest being due in December 2027. Banco Votorantim S.A. and Banco Alfa de Investimento S.A. each guarantee 49% and 51% respectively of SMART Brazil’s obligations under the FINEP Credit Agreement which guarantees are backed by unsecured loan agreements with SMART Brazil and SMART do Brazil. The guarantees to FINEP need to be renewed annually. Banco Alfa de Investimento S.A. and Banco Votorantim S.A charge 1.3% and 1.7%, respectively per annum, on the aggregate of the total outstanding principal balance plus any amount remaining available to be borrowed under the FINEP Credit Agreement, plus commissions, administrative fees, interest and contractual penalties. While the FINEP Credit Agreement does not include any financial covenants, it contains affirmative and negative covenants customary for loans of this nature, including, among other things, an obligation to |
Financial Instruments
Financial Instruments | 9 Months Ended |
May 28, 2021 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | (8 ) Financial Instruments Fair Value of Financial Instruments The fair value of the Company’s cash, cash equivalents, accounts receivable and accounts payable approximates the carrying amount due to the relatively short maturity of these items. Cash and cash equivalents consist of funds held in general checking and savings accounts, money market accounts, and securities with maturities of less than 90 days at the time of purchase. The Company does not have investments in variable rate demand notes or auction rate The FASB guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets to identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: • Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company’s Level 1 assets include funds held in general checking accounts, savings accounts and money market funds that are classified as cash equivalents. • Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets and liabilities. The Company’s Level 2 assets and liabilities include derivative financial instruments. • Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s Level 3 liabilities include the contingent consideration related to the acquisition of the LED business (see Note 2), which had a fair value of $44.5 million as of May 28, 2021. Assets and liabilities measured at fair value on a recurring basis include the following (in thousands): Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Observable/ Unobservable Inputs Corroborated by Market Data (Level 2) Significant Unobservable Inputs (Level 3) Total Balances as of May 28, 2021: Assets Cash and cash equivalents $ 188,992 $ — $ — $ 188,992 Total assets measured at fair value $ 188,992 $ — $ — $ 188,992 Liabilities Derivative financial instruments (1) $ — $ 3,420 $ — $ 3,420 Acquisition-related contingent consideration (3) — — 44,500 44,500 Total liabilities measured at fair value $ — $ 3,420 44,500 $ 47,920 Balances as of August 28, 2020: Assets Cash and cash equivalents $ 150,811 $ — $ — $ 150,811 Derivative financial instruments (2) — 112 — 112 Total assets measured at fair value $ 150,811 $ 112 $ — $ 150,923 Liabilities Derivative financial instruments (1) $ — $ 912 $ — $ 912 Total liabilities measured at fair value $ — $ 912 $ — $ 912 (1) Included in other current liabilities on the Company’s condensed consolidated balance sheets - see Note 4. ( 2 ) Included in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheets - see Note 4. (3) Included in other long-term liabilities on the Company’s condensed consolidated balance sheets. |
Share-Based Compensation and Em
Share-Based Compensation and Employee Benefit Plans | 9 Months Ended |
May 28, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Share-Based Compensation and Employee Benefit Plans | (9 ) Share-Based Compensation and Employee Benefit Plans (a) Share-Based Compensation Equity Awards On August 26, 2011, the board of directors adopted the Saleen Holdings, Inc. 2011 Stock Incentive Plan which was amended and restated as of May 18, 2017 to be known as the SMART Global Holdings, Inc. Amended and Restated 2017 Share Incentive Plan. On January 29, 2019, the shareholders approved an amendment to the SMART Global Holdings, Inc. Amended and Restated 2017 Share Incentive Plan (as amended, the “Original SGH Plan”) which amendment increased the reserve under the Original SGH Plan by 1,500,000 shares effective as of February 1, 2019. On February 12, 2021 the shareholders approved an amendment to the Original SGH Plan (as further amended, the “SGH Plan”), which amendment increased the reserve under the Original SGH Plan by 1,000,000 shares effective February 12, 2021. The SGH Plan provides for grants of equity awards to employees, directors and consultants of SMART Global Holdings and its subsidiaries. As of February 15, 2021, the Board of Directors approved the SMART Global Holdings, Inc. 2021 Share Inducement Plan (the “Inducement Plan,” together with the SGH Plan the “SGH Plans”), which authorizes an additional 2,000,000 shares available for grant under the terms of the plan. Options granted under the SGH Plan provide the option to purchase SMART Global Holdings’ ordinary shares at the fair value of such shares on the grant date. O ptions and RSUs under the SGH Plans generally vest over a four-year period beginning on the grant date and generally have a ten-year term. Options granted after August 26, 2011 and before September 23, 2014 have an eight year term. As of May 28, 2021 , there were ordinary shares reserved for issuance under the SGH P lans , of which ordinary shares were available for grant under the SGH Plan and 882,713 ordinary shares were available for grant under the Inducement Plan . As of August 28, 2020 , there were ordinary shares reserved for issuance under the SGH Plan, of which ordinary shares were available for grant. Summary of Assumptions and Activity The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table. The expected volatility is based on the historical volatilities of the common stock of comparable publicly traded companies. The expected term of options granted represents the weighted average period of time that options granted are expected to be outstanding and we apply the simplified approach in which the expected term is the mid-point between the vesting date and the expiration date. The risk-free interest rate for the expected term of the option is based on the average U.S. Treasury yield curve at the end of the quarter in which the option was granted. The following assumptions were used to value the Company’s stock options: Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Stock options: Expected term (years) — 6.25 6.25 6.25 Expected volatility — 57.10 % 57.10 % 46.10% - 57.10% Risk-free interest rate — 0.40 % 0.49 % 0.40% - 1.68% Expected dividends — — — — SGH Plan—Options A summary of option activity for the SGH Plan is presented below (dollars and shares in thousands, except per share data): Weighted Weighted average average remaining per share contractual Aggregate exercise term intrinsic Shares price (years) value Options outstanding at August 28, 2020 2,109 $ 29.45 6.95 $ 7,225 Options granted 250 26.99 Options exercised (353 ) 27.03 Options cancelled (27 ) 32.09 Options outstanding at May 28, 2021 1,979 $ 29.53 6.60 $ 35,352 Options exercisable at May 28, 2021 978 $ 28.76 5.92 $ 18,235 In March 2018, the Company granted two performance-based stock options that contained a stock market index as a benchmark for performance (“Market-Based Options”). The share-based compensation expense for these options is recognized over the requisite service period by tranche. The exercisability of Market-Based Options will depend upon the 30-trading day rolling average closing price of Company’s ordinary shares. If the target price is not achieved by the end of 4 th th The Black-Scholes weighted average fair value of options granted under the SGH Plan during the three and nine months ended May 28, 2021 was $0 and $13.30 per share, respectively, and $9.76 and $9.89 per share, respectively for the corresponding periods of fiscal 2020. SGH Plan—Restricted Stock Awards (“RSAs”), Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) A summary of the changes in RSAs and RSUs outstanding is presented below (dollars and shares in thousands, except per share data): Weighted average grant date Aggregate fair value intrinsic Shares per share value Awards outstanding at August 28, 2020 1,273 $ 26.19 $ 31,721 Awards granted 2,256 35.30 Awards vested and released (537 ) 26.25 Awards forfeited and cancelled (80 ) 34.52 Awards outstanding at May 28, 2021 2,912 $ 33.01 $ 138,015 In May 2020, the Company granted a performance-based RSA which has both service and performance conditions. In May 2019, the Company granted a PSU which has both service and performance conditions. As of November 29, 2019, the Company deemed it probable that the service condition would be met, however, since the attainment of the performance condition for this award changed to not probable, there was $0.8 million of share-based compensation expense reversed for this award in the three months ended November 29, 2019. The share-based compensation expense related to RSAs, RSUs and PSUs during the three and nine months ended May 28, 2021 was approximately $6.1 million and $18.3 million, respectively, and $2.9 million and $7.3 million for the corresponding period in fiscal 2020. Employee Stock Purchase Plan In January 2018, the Company’s shareholders approved the SGH 2018 Employee Share Purchase Plan (the “Purchase Plan”) under which an aggregate of 650,000 of ordinary shares have been approved for issuance to eligible employees. The Purchase Plan generally permits employees to purchase ordinary shares at 85% of the lower of the fair market value of the ordinary shares at the beginning of the offering period or at the end of purchase period, which is generally six months. Rights to purchase ordinary shares are granted during the first and third quarter of each fiscal year. The Purchase Plan terminates in January 2028. As of May 28, 2021, 443,437 ordinary shares have been purchased under the Purchase Plan and 806,563 ordinary shares are reserved for future purchases by eligible employees. As of August 28, 2020, 266,816 ordinary shares have been purchased under the Purchase Plan and 683,184 ordinary shares are reserved for future purchases by eligible employees. Equity Rights and Restrictions The holders of ordinary shares of SMART Global Holdings are entitled to such dividends and other distributions as may be declared by the board of directors of SMART Global Holdings from time-to-time, out of the funds of SMART Global Holdings lawfully available therefor. Substantially all SMART Global Holdings shares owned by employees, by certain former lenders of the Company, and all shares underlying the SMART Global Holdings options, PSUs and RSUs are subject to either the Employee Investors Shareholders Agreement dated August 26, 2011 (the “Employee Investors Shareholders Agreement”), the Amended and Restated Investors Shareholders Agreement dated as of November 5, 2016 (as amended by Amendment No. 5, Amendment No. 4, Amendment No. 3, Amendment No. 2 and subsequent amendments, the “ Amended and Restated Investors Shareholders Agreement ” ) and the Amended and Restated Sponsors Shareholders Agreement dated May 30 2017 (as amended, the Sponsor Shareholder Agreement; the Employee Investors Shareholders Agreement, the Amended and Restated Investors Shareholders Agreement and the Sponsor Shareholder Agreement are collectively referred to as the “ Shareholders Agreements ” ). Under the terms of the Shareholders Agreements, such shares are subject to certain restrictions on sale and could become subject to lock-up restrictions in the event of any future registered public offerings by the Company. On January 7, 2021, the Company agreed to repurchase an aggregate of 1,100,000 of its ordinary shares, $0.03 par value per share from Silver Lake Partners III Cayman (AIV III), L.P., Silver Lake Technology Investors III Cayman, L.P., Silver Lake Sumeru Fund Cayman, L.P. and Silver Lake Technology Investors Sumeru Cayman, L.P. at a purchase price of $40.30 per share for aggregate consideration of approximately $44.3 million, in a privately negotiated transaction. The transaction closed on January 15, 2021. (b) Savings and Retirement Program The Company offers a 401(k) Plan to U.S. employees, which provides for tax-deferred salary deductions for eligible U.S. employees. Employees may contribute up to 60% of their annual eligible compensation to this plan, limited by an annual maximum amount determined by the U.S. Internal Revenue Service. The Company may also make discretionary matching contributions, which vest immediately, as periodically determined by management. The matching contributions made by the Company during the three and nine months ended May 28, 2021 were approximately were approximately $1.0 million and $2.4 million, respectively and $0.7 million and $1.8 million, respectively for the corresponding periods of fiscal 2020. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 28, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | ( 10 ) Commitments and Contingencies (a) Commitments Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease including any periods of free rent. Rent expense for operating leases during the three and nine months ended May 28, 2021 was $3.4 million and $7.5 million, respectively, and $2.1 million and $5.8 million, respectively for the corresponding periods of fiscal 2020. (b) Product Warranty and Indemnities Product warranty reserves are established in the same period that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality of a Company’s product. The amounts of the reserves are based on established terms and the Company’s best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. The following table reconciles the changes in the Company’s accrued warranty (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Beginning accrued warranty reserve $ 1,255 $ 1,608 $ 1,316 $ 1,770 Warranty claims (334 ) (452 ) (868 ) (1,588 ) LED business acquired warranty reserves 427 — 427 — Provision for product warranties 443 181 916 1,155 Ending accrued warranty reserve $ 1,791 $ 1,337 $ 1,791 $ 1,337 Product warranty reserves are recorded in other current liabilities in the accompanying condensed consolidated balance sheets. In addition to potential liability for warranties related to defective products, the Company currently has in effect a number of agreements in which it has agreed to defend, indemnify and hold harmless its customers and suppliers from damages and costs, which may arise from product defects as well as from any alleged infringement by its products of third-party patents, trademarks or other proprietary rights. The Company believes its internal development processes and other policies and practices limit its exposure related to such indemnities. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. However, to date, the Company has not had to reimburse any of its customers or suppliers for any losses related to these indemnities. The Company has not recorded any liability in its financial statements for such indemnities. (c) Legal Matters From time to time, the Company is involved in legal matters that arise in the normal course of business. Litigation in general and intellectual property, employment and shareholder litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. The Company believes that it has defenses to the cases pending, including those set forth below. Except as noted below, the Company is not currently able to estimate, with reasonable certainty, the possible loss, or range of loss, if any, from such legal matters, and accordingly, no provision for any potential loss, which may result from the resolution of these matters, has been recorded in the accompanying condensed consolidated financial statements. Indemnification Claims by SanDisk In August 2013, the Company completed the sale (the “Sale”) of substantially all of the business unit which was focused on solid state drives, to SanDisk Corporation (now a part of Western Digital). In connection with the Sale the sale agreement (the “Sale Agreement”) contained certain indemnification obligations, including, among others, for losses arising from breaches of representations and warranties relating to the Sale. These indemnification obligations are subject to a number of limitations, including certain deductibles and caps and limited time periods for making indemnification claims. On August 21, 2014, SanDisk made a claim against the Company under the indemnification provisions of the Sale Agreement in connection with a lawsuit filed by Netlist, Inc. (“Netlist”) against SanDisk alleging that certain products sold in the Sale infringe various Netlist patents, which SanDisk in turn alleges would, if true, constitute a breach of representations and warranties under the Sale Agreement. Under the Sale Agreement, the Company’s indemnification obligation in respect of intellectual property matters, such as those claimed by SanDisk, is subject to a deductible of approximately $1.8 million and a cap of $60.9 million. As required in the Sale Agreement, the SanDisk claim purported to include a preliminary good faith estimate of SanDisk’s alleged indemnifiable losses, which estimate was greater than the Sale Agreement cap for intellectual property matters. The Company believes that the allegations giving rise to the indemnification claim are without merit and the Company is disputing SanDisk’s claim for indemnification. In addition, there may be other grounds for the Company to dispute the indemnification claim and/or the amounts of any indemnifiable losses of SanDisk. On May 19, 2020 the court entered an order granting a joint stipulation of dismissal filed by Netlist and SanDisk. In November 2020, Western Digital made a request for reimbursement of legal fees in connection with this matter. The Company believes that this request is without merit. (d) Contingencies Import Duty Tax assessment in Brazil On February 23, 2012, SMART Brazil was served with a notice of a tax assessment for approximately R$117 million (approximately $21.7 million) (the “First Assessment”). On December 12, 2013, prior to the First Assessment and Second Assessment having been extinguished, SMART Brazil received a third notice of assessment in the amount of R$3.6 million (approximately $0.7 million) (the “Third Assessment”). The Third Assessment relates to the same tax issues and penalties that were at issue in the First Assessment and Second Assessment. The Third Assessment, however, does not seek import duties and related taxes on Dynamic Random Access Memory (“DRAM”) products and only seeks import duties and related taxes on Flash unmounted components with respect to the months of January 2012 to June 2012. This is because SMART Brazil’s imports of DRAM unmounted components were subject to 0%, and, after June 2012, SMART Brazil’s imports of Flash unmounted components became subject to 0% import duties and related taxes, both as a result of PADIS. Even with this 0%, if SMART Brazil is found to have used the incorrect product classification code, SMART Brazil will be subject to an administrative penalty equal to 1% of the value of the imports. SMART Brazil believes it has used the correct product codes and intends to vigorously fight this matter and has filed defenses to the Third Assessment. On September 8, 2020, the first level administrative court unanimously ruled in favor of SMART Brazil with respect to the Third Assessment. Due to the size of the Third Assessment, Brazil law required that the tax authorities appeal the decision to CARF. The amounts claimed by the tax authorities on the Third Assessment are subject to increases for interest and other charges, which resulted in a combined assessment balance of approximately R$5.8 million (or $1.1 million) as of May 28, 2021. As a result of the CARF decisions in favor of SMART Brazil on the First Assessment and the Second Assessment, as well as the basis given by the tax authorities in favorably ruling on the Third Assessment, the Company believes that the probability of any material charges as a result of the Third Assessment is remote and the Company does not expect the resolution of this disputed assessment to have a material impact on its condensed consolidated financial position, results of operations or cash flows. While the Company believes that the Third Assessment is incorrect, there can be no assurance that SMART Brazil will prevail in the dispute. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
May 28, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | (1 1 ) Segment and Geographic Information The Company’s chief operating decision-maker (“CODM”), the President and CEO, evaluates operating results to make decisions about allocating resources and assessing performance of the Company. The following table shows operating results net of inter-segment revenues, which for the respective three and nine months ended, are not material to the financial statements (dollars in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 28, 2021 Specialty Brazil IPS LED Total Specialty Brazil IPS LED Total Net Revenue $ 121,620 $ 118,496 $ 95,857 $ 101,755 $ 437,728 $ 357,729 $ 326,808 $ 247,141 $ 101,755 $ 1,033,433 Adjusted Gross Profit $ 22,299 $ 21,116 $ 22,139 $ 30,134 $ 95,688 $ 59,118 $ 54,646 $ 65,145 $ 30,134 $ 209,043 Adjusted Gross Margin 18 % 18 % 23 % 30 % 22 % 17 % 17 % 26 % 30 % 20 % Adjusted Gross Profit and Adjusted Gross Margin excludes share-based compensation (see Note 1(q)), intangible amortization (see Note 1(l)), LED net inventory adjustment ($7.1 million) and corporate expenses ($8 thousand and $15 thousand, respectively). Three Months Ended Nine Months Ended May 29, 2020 May 29, 2020 Specialty Brazil IPS LED Total Specialty Brazil IPS LED Total Net Revenue $ 127,700 $ 92,701 $ 60,886 — $ 281,287 $ 342,685 $ 284,400 $ 198,262 — $ 825,347 Adjusted Gross Profit $ 21,047 $ 19,685 $ 14,907 — $ 55,639 $ 61,166 $ 50,840 $ 52,312 — $ 164,318 Adjusted Gross Margin 16 % 21 % 24 % 20 % 18 % 18 % 26 % 20 % Adjusted Gross Profit and Adjusted Gross Margin excludes share-based compensation (see Note 1(q)), intangible amortization (see Note 1(l)) and corporate expenses ($0.1 million and $0.2 million, respectively). A summary of the Company’s net sales by geographic area, based on the ship-to location of the customer, property and equipment by geographic area is as follows (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Geographic Net Sales: U.S. $ 179,478 $ 131,596 $ 423,576 $ 362,215 Brazil 119,112 92,687 327,456 285,059 China 73,666 23,197 130,171 67,627 Europe 25,849 8,575 54,461 29,917 Other 39,623 25,232 97,769 80,529 Total $ 437,728 $ 281,287 $ 1,033,433 $ 825,347 May 28, August 28, 2021 2020 Property and Equipment, Net: U.S. $ 24,924 $ 11,635 Brazil 53,782 30,648 Malaysia 10,613 10,209 China 61,837 — Other 2,105 2,213 Total $ 153,261 $ 54,705 |
Major Customers
Major Customers | 9 Months Ended |
May 28, 2021 | |
Risks And Uncertainties [Abstract] | |
Major Customers | (1 2 ) Major Customers A majority of the Company’s net sales are attributable to customers operating in the information technology industry. Net sales to significant end user customers, including sales to their manufacturing subcontractors, defined as net sales in excess of 10% of total net sales, are as follows (dollars in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 29, 2020 May 28, 2021 May 29, 2020 Amount Percentage of net sales Amount Percentage of net sales Amount Percentage of net sales Amount Percentage of net sales Customer A (1) $ 61,177 14 % — — — — — — Customer B (2) 46,575 11 % — — — — — — Customer C (2) — — 38,778 14 % 143,019 14 % 144,847 18 % Customer D (3) — — 35,087 12 % — — 89,834 11 % $ 107,752 25 % $ 73,865 26 % $ 143,019 14 % $ 234,681 29 % (1) IPS customer (2) Brazil customer (3 ) Specialty customer As of May 28, 2021, three direct customers that represented less than 10% of net sales, Customer E, F and G, each accounted for approximately 15%, and |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
May 28, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | (1 3 ) Earnings Per Share Basic earnings per share is calculated by dividing net income (loss) by the weighted average of ordinary shares outstanding during the period. Diluted earnings per share is calculated by dividing the net income (loss) by the weighted average of ordinary shares and dilutive potential ordinary shares outstanding during the period. Dilutive potential ordinary shares consist of dilutive shares issuable upon the exercise of outstanding stock options, vesting of RSUs and the Notes computed using the treasury stock method. The dilutive weighted shares are excluded from the computation of diluted net loss per share when a net loss is recorded for the period as their effect would be anti-dilutive. As the Company has the intent and ability to settle the aggregate principal amount of the Notes plus any accrued and unpaid interest in cash and any excess in the Company’s ordinary shares, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. In order to compute the dilutive effect, the number of shares included in the denominator of diluted net income per share is determined by dividing the conversion spread value of the “in-the-money” Notes by the Company’s average share price during the period and including the resulting share amount in the diluted net income per share denominator. The conversion spread will have a dilutive impact on net income per ordinary share when the average market price of the Company’s ordinary shares for a given period exceeds the conversion price of $40.61 per share for the Notes. Until the third quarter of fiscal 2021, the Company’s weighted average ordinary share price since the issuance of the Notes has been below the conversion price. For the three months ended May 28, 2021, the weighted average ordinary share price was above the conversion price, and as such, the Notes would have been dilutive and included in dilutive shares had it not been for the net loss in the quarter. For the nine months ended May 28, 2021 and the three- and nine-months ended May 29, 2020, as a result of being below the conversion price, the Notes were anti-dilutive and were excluded from dilutive shares. The following table sets forth for all periods presented the computation of basic and diluted earnings per share, including the reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share (dollars and shares in thousands, except per share data): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Numerator: Net income (loss) $ (6,654 ) $ 825 $ 1,217 $ (8,671 ) Net income attributable to noncontrolling interest 557 — 557 — Net income (loss) attributable to SGH $ (7,211 ) $ 825 $ 660 $ (8,671 ) Denominator: Weighted average shares outstanding: Basic 24,035 24,066 24,843 23,895 Diluted 24,035 24,431 25,902 23,895 Earnings per share: Basic $ (0.30 ) $ 0.03 $ 0.03 $ (0.36 ) Diluted $ (0.30 ) $ 0.03 $ 0.03 $ (0.36 ) Anti-dilutive weighted shares excluded from the computation of diluted earnings per share 233 7,892 7,551 7,236 |
Other Income (Expense), Net
Other Income (Expense), Net | 9 Months Ended |
May 28, 2021 | |
Other Income And Expenses [Abstract] | |
Other Income (Expense), Net | (1 4 ) Other Income (Expense), Net The following table provides the detail of other expense, net as follows (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Foreign currency losses $ (994 ) $ (484 ) $ (1,195 ) $ (2,586 ) Loss on capped call mark-to-market adjustment — (2,924 ) — (7,719 ) Loss on early extinguishment of debt — (192 ) — (6,822 ) Other 505 155 8 456 Total other expense, net $ (489 ) $ (3,445 ) $ (1,187 ) $ (16,671 ) |
Overview, Basis of Presentati_2
Overview, Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
May 28, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (b) Basis of Presentation The accompanying condensed consolidated financial statements comprise SMART Global Holdings and its wholly owned subsidiaries. Intercompany transactions have been eliminated in the condensed consolidated financial statements. The Company uses a 52- to 53-week fiscal year ending on the last Friday in August. The three and nine months ended May 28, 2021 and May 29, 2020 were both 13-week and 39-week fiscal periods, respectively. The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information. As such, certain information and footnote disclosures normally included in complete annual financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to the interim periods are unaudited. All financial information for two of the Company’s subsidiaries, SMART Modular Technologies Indústria de Componentes Eletrônicos Ltda. (“SMART Brazil”) and SMART Modular Technologies do Brasil Indústria e Comércio de Componentes Ltda. (“SMART do Brazil”), is included in the Company’s condensed consolidated financial statements on a one-month lag because their fiscal years begin August 1 and end July 31. |
Use of Estimates | (c) Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could differ from the estimates made by management. Significant items subject to such estimates and assumptions include the evaluation of the fair value of the Company’s reporting units (as part of the Company’s goodwill impairment analysis), valuation and allocation of purchase price in connection with business acquisitions, accounting for the allocation of convertible debt between equity and debt, share-based compensation, the estimated net realizable value of Brazilian tax and financial credits, income tax uncertainties and other contingencies . |
Revenue | (d) Revenue The Company’s revenues include products and services. The Company’s product revenues are predominantly derived from the sale of memory modules, flash memory cards, compute products, storage products and LED products (the latter as a result of our acquisition of CreeLED, Inc. as discussed in Note 2), which the Company designs and manufactures. The Company’s service revenues are derived from procurement, logistics, inventory management, temporary warehousing, kitting and packaging services. In addition, a small portion of the Company’s product sales include extended warranty and on-site services, subscriptions to the Company’s high performance computing environment, professional services, software and related support. The Company determines revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, a performance obligation is satisfied. The Company’s contracts are executed through a combination of written agreements along with purchase orders with customers, including certain general terms and conditions. Generally, purchase orders entail products, quantities and prices, which define the performance obligations of each party and are approved and accepted by the Company. The Company’s contracts with customers do not include extended payment terms. Payment terms vary by contract type and type of customer and generally range from 30 to 45 days from invoice. Additionally, taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and that are collected by the Company from a customer and deposited with the relevant government authority, are excluded from revenue. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer adjusted for estimated variable consideration. Variable consideration may include discounts, rights of return, refunds and other similar obligations. The Company allocates the transaction price to each distinct product and service based on its relative standalone selling price. The standalone selling price for products primarily involves the cost to produce the deliverable plus the anticipated margin and for services is estimated based on the Company’s approved list price. In the normal course of business, except as noted under LED products below, the Company does not accept product returns unless the items are defective as manufactured, nor does it typically provide customers with the right to a refund. The Company establishes provisions for estimated returns and warranties. In addition, the Company does not typically transact for noncash consideration. Standard Products The Company’s main performance obligations are to deliver the requested goods to customers according to the agreed-upon shipping terms. The Company recognizes revenue when control transfers to the customer (i.e., when the Company’s performance obligation is satisfied). The Company invoices the customer and recognizes revenues for such delivery when control transfers based on shipping terms. Customized Products For customized product sales with terms that require the customer to purchase 100% of all parts built to fulfill the customers forecast, the Company recognizes revenue when control of the underlying assets transfers to the customer, as the customer is able to both direct the use of, and obtain substantially all of the remaining benefit from the assets; the customer has the significant risks and rewards associated with ownership of the assets; and the Company has a present right to payment. For these sales, control transfers when the Company has made these products available to the customer and under the terms of the agreement cannot repurpose them without the customer’s express consent. Accordingly, the Company recognizes revenue at the point in time when products made to the customer’s order or forecast are completed and made available to the customer. Non-cancellable nonrefundable (“NCNR”), customized product sales are recognized over time on a cost incurred basis. The customer obtains control and benefits from the services as they are performed over the period based on the cost input measure in the production process for the NCNR customized product. The terms within the NCNR sales orders provide the Company with a legally enforceable right to receive payment including a reasonable profit margin upon customer cancellation for performance completed to date. Accordingly, the Company recognizes revenue over time as customized products listed within the NCNR orders are completed. Computing Products and Services A small portion of the Company’s product sales includes extended warranty and on-site services, subscriptions to the Company’s high performance computing environment, professional consulting services, including installation and other services, and hardware and software related support. Each contract may contain multiple performance obligations, which requires the transaction price to be allocated to each performance obligation. The Company allocates the consideration to each performance obligation based on the relative selling price. The Company uses best-estimated selling price, determined as the best estimate of the price at which the Company would transact if it sold the deliverable regularly on a stand-alone basis. For services provided to customers over a period of time, revenue is recognized as the customer receives the benefit of the services. Extended warranty and on-site services, hardware support, software support, and subscription revenue for access to the Company’s high performance computing environment is deferred and recognized ratably over the contractual period as the Company satisfies its performance obligations over time and services are rendered. These services contracts are typically one to three years in length. Subscription revenue for certain customers is recognized based on the contractual fee to use the high-performance-computing environment. Agency Services The Company has service performance obligations for agency related services such as procurement, logistics, inventory management, temporary warehousing, kitting and packaging services for certain agency basis customers. The agency services are also known as supply chain services and the performance obligations for these services consist of customized, integrated supply chain services management to assist customers in the planning, execution and overall management of the procurement processes. For customers accounted for on an agency basis, the Company recognizes as revenue the amount billed less the material procurement costs of products serviced as an agent with the cost of providing these services embedded with the cost of sales. The Company has separate agent performance obligations as follows: (a) procurement, logistics, and inventory management, (b) temporary warehousing, and (c) kitting and packaging services for these customers. Revenue from these arrangements is recognized as service revenue and is determined by a fee for services based on material procurement costs (i.e., fee as a percentage of the associated material being procured, warehoused, kitted or packaged). The Company recognizes revenue for procurement, logistics and inventory management upon the completion of the services or performance obligation, typically upon shipment of the product, as the criteria for over time recognition is not met. For temporary warehousing, kitting and packaging services, revenue is recognized over time, but the period of performance is typically very short in duration. There are no obligations subsequent to shipment of the product under the agency arrangements. Distribution of Products A substantial portion of the Company’s LED products are sold through distributors. Distributors purchase the Company’s LED products and then resell to their own customer base, which may include value-added resellers, manufacturers who incorporate the Company’s LED products into their own manufactured goods or ultimate end users of the Company’s LED products. The Company recognizes revenue upon shipment of its LED products to its distributors based on the amount of consideration to which the Company expects to be entitled to receive in exchange for LED products or services. We generally offer price protection to our distributors, which is a form of variable consideration that decreases the transaction price. Variable consideration is based on the expected value method, contractual terms, historical analysis of customer purchase volumes, or historical analysis using specific data for the type of consideration being assessed. Variable consideration is recognized as a reduction of net revenue with a corresponding reserve at the time of revenue recognition. Accordingly, estimates for these rights are recognized at the time of sale as a reduction of product revenue within other current liabilities in the accompanying condensed consolidated balance sheet. Differences between the estimated and actual amounts are recognized as adjustments to revenue. Contract Costs As a practical expedient, the Company recognizes the incremental costs of obtaining a contract, specifically commission expenses that have an amortization period of less than twelve months, as an expense when incurred. Additionally, the Company has adopted an accounting policy to recognize shipping and handling costs that occur after control transfers, if any, to the customer as a fulfillment activity. The Company records shipping and handling costs related to revenue transactions within cost of sales as a period cost. Gross Billings and Net Sales The following is a summary of the Company’s gross billings to customers and net sales for services and products (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Service revenue, net $ 8,846 $ 8,815 $ 22,354 $ 25,173 Cost of purchased materials - service (1) 205,530 168,638 481,163 463,527 Gross billings for services 214,376 177,453 503,517 488,700 Product net sales 428,882 272,472 1,011,079 800,174 Gross billings to customers $ 643,258 $ 449,925 $ 1,514,596 $ 1,288,874 Product net sales $ 428,882 $ 272,472 $ 1,011,079 $ 800,174 Service revenue, net 8,846 8,815 22,354 25,173 Net sales $ 437,728 $ 281,287 $ 1,033,433 $ 825,347 (1) Represents material procurement costs of products provided as an agent reported on a net basis. Gross billings to customers in the table above represents total amounts invoiced to customers during the period and is the sum of net sales plus material procurement costs of products the Company provides as an agent. The amount invoiced to customers for agency related services is the total of the related material procurement costs and fees for providing its services. Gross billings to customers are reflected in accounts receivable for unpaid invoices as of the end of the period. Additionally, material procurement costs of products the Company manages as an agent on behalf of its customers on hand as of the end of the period are reflected in inventory. Both the amounts in accounts receivable and inventory impact the determination of net cash provided by (or used in) operations. Contract Balances The Company records accounts receivable when it has an unconditional right to consideration. Contract assets represent amounts recognized as revenue for which the Company does not have the unconditional right to consideration. All contract assets represent amounts related to invoices expected to be issued during the next 12-month period and are recorded as prepaid expenses and other current assets. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities classified as deferred revenue are allocated between other current liabilities and other long-term liabilities on our condensed consolidated balance sheet based on the timing of when the customer takes control of the asset or receives the benefit of the service. Payment terms vary by customer. The time between invoicing and when payment is due is not significant. May 28, 2021 August 28, 2020 $ Change Contract assets $ 350 $ 5,068 $ (4,718 ) Deferred revenue $ 20,975 $ 20,124 $ 851 The decrease in contract assets from $5.1 million as of August 28, 2020 to $0.4 million as of May 28, 2021 was primarily driven by invoicing amounts previously recorded as contract assets as of August 28, 2020. The increase in deferred revenue from $20.1 million to $21.0 million was due to greater deferred services billed during the period. During the nine months ended May 28, 2021, Disaggregation of Revenue The Company disaggregates revenue by segment and geography. See Note 11. Revenue Allocated to Remaining Performance Obligations The Company’s performance obligations related to product sales have a contractual duration of less than one year. The Company elected to apply the optional exemption practical expedient provided in ASC 606 and, therefore, is not required to disclose the aggregate amount of the transaction price allocated to those performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Remaining performance obligations represent contracted revenue related to support services that have not yet been recognized and are therefore accounted for as deferred revenue . The Company expects to recognize revenue on the remaining performance obligations as follows (in thousands) : May 28, 2021 Within 1 year $ 15,855 2-3 years 4,261 Thereafter 859 $ 20,975 |
Cash and Cash Equivalents | (e) Cash and Cash Equivalents All highly liquid investments with maturities of 90 days or less from original dates of purchase are carried at cost, which approximates fair value, and are considered to be cash equivalents. Cash and cash equivalents include cash on hand, cash deposited in checking and saving accounts, money market accounts, and securities with maturities of less than 90 days at the time of purchase. |
Allowance for Doubtful Accounts | (f) Allowance for Doubtful Accounts The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, the Company records a specific allowance against amounts due and, thereby, reduces the net recognized receivable to the amount management reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on a combination of factors including the length of time the receivables are outstanding, industry and geographic concentrations, the current business environment and historical experience. |
Derivative Financial Instrument | (g) Derivative Financial Instrument The Company records the assets or liabilities associated with derivative instruments at fair value based on Level 2 inputs in prepaid expenses and other current assets and other current liabilities, respectively, in the condensed consolidated balance sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. See Note 4 for further details. |
Inventories | (h) Inventories Inventories are valued at the lower of cost or net realizable value. Under the LED segment, cost is determined on a first-in, first-out method or average cost method. For all other segments, inventory value is determined on a specific identification basis for material and an allocation of labor and manufacturing overhead. At each balance sheet date, the Company evaluates the ending inventories for excess quantities and obsolescence. This evaluation includes an analysis of sales levels by product family and considers historical demand and forecasted demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles. The Company adjusts carrying value to the lower of its cost or net realizable value. Inventory write-downs are not reversed and create a new cost basis. |
Prepaid State Value-Added Taxes (ICMS) | (i) Brazil Taxes Financial Credits In 1991, Brazil created Lei da Informática—Processo Produtivo Básico (“PPB/IT”) Program to incentivize local manufacturing by allowing qualified companies to receive incentives when they sell specified IT products, including desktops, notebooks, servers, SmartTVs and mobile products manufactured in Brazil. In 2007, the Brazilian legislature created a program known as PADIS to promote the semiconductor industry. The Company has been a participant in the PPB/IT Program and PADIS since 2011. Among other incentives, the PPB/IT Program provided for certain reductions in the rate of IPI, a federal tax applied to industrial goods, as well as for PADIS companies, reducing to zero, IPI, import taxes and taxes known as PIS and COFINS levied over sales. As part of making the PPB/IT and P ADIS As a result, the PPB/IT Program and PADIS participants are entitled to a subsidy for operational costs, granted as financial credits, which may be used by participants either as a credit against certain federal taxes, or to request a refund in cash. PADIS beneficiaries are entitled to a subsidy for operational costs granted as financial credits to be used against certain federal taxes, equivalent to 2.62 times the effective disbursements in research and development initiatives under PADIS, limited to a cap of 13.1% of the total incentivized revenues within the country. The financial credits under the PPB/IT Program range from 2.73 to 3.41 times the research and development invested, limited to 10.92% to 13.65% of domestic gross sales revenues, depending on the location of the participant and on what products it manufactures and sells. These multipliers and caps decline over time. Under the current law, the financial credits are available for PADIS companies through January 2022 and for other PPB/IT Program participants through December 2029. For the three and nine months ended May 28, 2021, the Company recognized financial credits under PADIS totaling $8.2 million and $22.2 million, respectively, and $0 for both of the corresponding periods of 2020, which are reported under research and development as a reduction of expense on the condensed consolidated statements of operations. As of May 28, 2021, unused financial credits totaling R$108.1 million (or $20.0 million) are reported under prepaid expenses and other current assets and are expected to be applied against future taxes. Although PADIS participants were entitled to financial credits since April 2, 2020, the effective utilization of such credits depended on a federal decree enacting the amendments to PADIS, which was not issued until February 1, 2021. The Company obtained the recognition of the financial credits based on the research and development disbursements that were made from April 1, 2020 until December 31, 2020 on February 12, 2021 and from January 1, 2021 to March 31, 2021 on April 15, 2021. Given that financial credits can be applied for by PADIS participants on a quarterly basis, the Company expects to report and obtain the recognition of the financial credits related to the research and development disbursements that were made in the second quarter of calendar 2021 in July 2021. Prepaid State Value-Added Taxes (ICMS) Since 2004, the Sao Paulo State tax authorities have granted SMART Brazil a tax benefit to defer and eventually eliminate the payment of ICMS levied on certain imports from independent suppliers. This benefit, known as an ICMS Special Tax Regime, is subject to renewal every two years. When the then current ICMS Special Tax Regime expired on March 31, 2010, SMART Brazil timely applied for a renewal of the benefit, however, the renewal was not granted until August 4, 2010. On June 22, 2010, the Sao Paulo authorities published a regulation allowing companies that applied for a timely renewal of an ICMS Special Regime to continue utilizing the benefit until a final conclusion on the renewal request was rendered. As a result of this publication, SMART Brazil was temporarily allowed to utilize the benefit while it waited for its renewal. From April 1, 2010, when the ICMS benefit lapsed, through June 22, 2010 when the regulation referred to above was published, SMART Brazil was required to pay the ICMS taxes on imports, which payments result in ICMS credits that may be used to offset ICMS obligations generated from sales by SMART Brazil of its products; however, the vast majority of SMART Brazil’s sales in Sao Paulo were either subject to a lower ICMS rate or were made to customers that were entitled to other ICMS benefits that enabled them to eliminate the ICMS levied on their purchases of products from SMART Brazil. As a result, from April 1, 2010 through June 22, 2010, SMART Brazil did not have sufficient ICMS collections against which to apply the credits and the credit balance increased significantly. Effective February 1, 2011, in connection with its participation in a Brazilian government incentive program known as Support Program for the Technological Development of the Semiconductor and Display Industries Laws, or PADIS, SMART Brazil spun off the module manufacturing operations into SMART do Brazil, a separate subsidiary of the Company. In connection with this spin off, SMART do Brazil applied for a tax benefit from the State of Sao Paulo in order to obtain a deferral of state ICMS. This tax benefit is referred to as State PPB, or CAT 14. The CAT 14 approval was not obtained until July 21, 2011, and from February 1, 2011 until the CAT 14 approval was granted, SMART do Brazil did not have sufficient ICMS collections against which to apply the credits accrued upon payment of the ICMS on SMART do Brazil’s imports and inputs locally acquired, and therefore, it generated additional excess ICMS credits. In January 2021, the Company purchased fixed assets for use its manufacturing process, but these were subsequently transferred to be used in research and development, due to the delay of the uFS product process development. The production and sales of this product is now expected to commence in fiscal 2022. This transaction resulted in the reversal of R$8.4 million (or $1.6 million) of the ICMS credits. In April 2021, due to needs in the production process, the equipment returned to the manufacturing area and, consequently, the Company regained the right to the ICMS credits, in the same amount reversed in January 2021, that is, R$8.4 million (or $1.6 million). As a result, as of May 28, 2021, the total ICMS tax credits reported on the Company’s accompanying condensed consolidated balance sheet are R$16.7 million (or $3.1 million) are fully vested ICMS credits, classified as other noncurrent assets. As of August 28, 2020, the total ICMS tax credits reported on the Company’s accompanying condensed consolidated balance sheet are R$21.2 million (or $4.1 million), of which (i) R$19.6 million (or $3.8 million) are fully vested ICMS credits, classified as other noncurrent assets In April and June 2016, the Company filed cases with the State of Sao Paulo tax authorities to seek approval to sell these excess ICMS credits. In December 2017, the Company obtained approval to sell R$31.6 million (or $5.8 million) of its ICMS credits. Once approved, sale of ICMS credits usually take several months to complete and typically incur a discount to the face amount of the credits sold, as well as fees for the arrangers of these sales which together aggregate 10% to 15% of the face amount of the credits being sold. Once the sale is complete, the tax authorities usually approve the transfer of credits in monthly installments and the proceeds resulting from the sale of the aforementioned credits shall be received by the Company accordingly. The Company has recorded valuation adjustments for the estimated discount and fees that the Company will need to offer in order to sell the ICMS credits. To adapt to the market, in the fourth quarter of fiscal 2020, the Company reassessed the discount rate for the sale of the ICMS credits to other companies, adjusting it to 22%, resulting in a charge of R$5.9 million (or $1.1 million) on the condensed consolidated statements of operations. In the first quarter of fiscal 2021, the Company further adjusted the discount rate to 26%, resulting in a charge of R$1.2 million (or $0.2 million). In the second quarter of fiscal 2021, the Company further adjusted the discount rate to 27%. Due to the reversal of part of the ICMS in January 2021, there was a reduction of R$2.5 million (or $0.5 million) in the calculated discount amount. In the third quarter of fiscal 2021, the Company reassessed the discount rate to 36%, resulting in a charge of R$2.4 million (or $0.4 million). In the first quarter of fiscal 2019, the Company sold R$17.7 million (or $3.3 million) of its ICMS credits that had been approved to be sold in December 2017. The payments were received in 22 installments starting in the second quarter of fiscal 2019 through fiscal 2020, or R$10.0 million (or $1.8 million) and R$7.7 million (or $1.4 million) in fiscal 2019 and 2020, respectively, thus finalizing the receipt of all installments of the contract. Import Taxes – Out-of-Period Adjustment During the second quarter of fiscal 2021, the Company recorded an out-of-period adjustment to correct errors originating in previous periods related to understated import tax costs, which resulted in a $4.3 million increase in cost of sales and $0.8 million increase in interest expense, net. The tax impact of the $1.7 million benefit for income taxes related to this adjustment will be reflected in the Company’s annual effective tax rate for fiscal year ending August 27, 2021. |
Property and Equipment | (j) Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are computed based on the shorter of the estimated useful lives or the related lease terms, using the straight-line method. Estimated useful lives are presented below: Period Asset: Manufacturing equipment 2 to 5 years Buildings and building improvements 5 to 40 years Office furniture, software, computers and equipment 2 to 5 years Leasehold improvements* Shorter of estimated useful life or lease term * Includes the land leases for the Penang facility with a term expiring in 2070 and 2 parcels in Huizhou with terms expiring in 2057 and 2082. |
Goodwill | (k) Goodwill The Company performs a goodwill impairment test annually during the fourth quarter of its fiscal year and more frequently if events or circumstances indicate that impairment may have occurred. Such events or circumstances may, among others, include significant adverse changes in the general business climate. There were no events which required impairment analysis in the nine months ended May 28, 2021. When conducting the annual impairment test for goodwill, the Company compares the estimated fair value of a reporting unit containing goodwill to its carrying value. If the fair value of the reporting unit is determined to be more than its carrying value, no goodwill impairment is recognized. The Company determines the fair value of the Company's reporting units using the income approach methodology of valuation that includes the discounted cash flow method as well as the market approach which includes the guideline company method. No impairment of goodwill was recognized through May 28, 2021. The changes in the carrying amount of goodwill during the nine months ended May 28, 2021 and fiscal 2020 are as follows (in thousands): Specialty Memory Products Brazil Products IPS Total Balance as of August 30, 2019 $ 14,720 $ 26,029 $ 40,674 $ 81,423 Provisional adjustment from business acquisition (see Note 2) — — (273 ) (273 ) Translation adjustments — (7,195 ) — (7,195 ) Balance as of August 28, 2020 14,720 18,834 40,401 73,955 Translation adjustments — (698 ) — (698 ) Balance as of May 28, 2021 $ 14,720 $ 18,136 $ 40,401 $ 73,257 |
Intangible Assets, Net | (l) Intangible Assets, Net The following table summarizes the gross amounts and accumulated amortization of intangible assets by type as of May 28, 2021 and August 28, 2020 (dollars in thousands): May 28, 2021 August 28, 2020 Gross Gross Carrying Accumulated Carrying Accumulated Life (years) amount amortization Net amount amortization Net Customer relationships 4 - 8 $ 57,500 $ (19,931 ) $ 37,569 $ 52,300 $ (12,899 ) $ 39,401 Trademarks/tradename 5 - 7 19,200 (5,842 ) 13,358 13,100 (4,095 ) 9,005 Technology 4 - 8 60,150 (6,761 ) 53,389 10,350 (3,085 ) 7,265 Backlog < 1 3,800 (956 ) 2,844 400 (400 ) — Total $ 140,650 $ (33,490 ) $ 107,160 $ 76,150 $ (20,479 ) $ 55,671 Amortization expense related to intangible assets is detailed in the table below. Acquired intangibles are amortized on a straight-line basis over the remaining estimated economic life of the underlying intangible assets. Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Amortization of intangible assets classification (in thousands): Cost of sales $ 2,937 $ 647 4,231 $ 1,941 Selling, general and administrative 3,247 2,767 8,780 8,299 Total $ 6,184 $ 3,414 $ 13,011 $ 10,240 Estimated amortization expense of these intangible assets for the next five fiscal years and all years thereafter are as follows (in thousands): Amount Fiscal year ending August: Remainder of fiscal 2021 $ 7,244 2022 20,808 2023 18,771 2024 16,292 2025 13,537 2026 and thereafter 30,508 Total $ 107,160 |
Long-Lived Assets | (m) Long-Lived Assets Long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to the future undiscounted cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed are reported at the lower of the carrying amount or fair value, less cost to sell. No impairment of long-lived assets was recognized during the three and nine months ended May 28, 2021 and May 29, 2020. |
Research and Development Expense | (n) Research and Development Expense Research and development expenditures are expensed in the period incurred. |
Income Taxes | (o) Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and net operating loss and credit carryforwards. When necessary, a valuation allowance is recorded to reduce tax assets to amounts expected to be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (or loss) in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in tax expense. |
Foreign Currency Translation | (p) Foreign Currency Translation For foreign subsidiaries using the local currency as their functional currency, assets and liabilities are translated at exchange rates in effect at the balance sheet date and income and expenses are translated at average exchange rates during the period. The effect of this translation is reported in other comprehensive income (loss). Exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the respective foreign subsidiaries are included in results of operations. For foreign subsidiaries using the U.S. dollar as their functional currency, the financial statements of these foreign subsidiaries are remeasured into U.S. dollars using the historical exchange rate for property and equipment and certain other nonmonetary assets and liabilities and related depreciation and amortization on these assets and liabilities. The Company uses the exchange rate at the balance sheet date for the remaining assets and liabilities, including deferred taxes. A weighted average exchange rate is used for each period for revenues and expenses. All foreign subsidiaries and branch offices, except Brazil and South Korea, use the U.S. dollar as their functional currency. The gains or losses resulting from the remeasurement process are recorded in other expense, net in the accompanying condensed consolidated statements of operations. During the three and nine months ended May 28, 2021 the Company recorded $1.0 million and $1.2 million, respectively, and $0.5 million and $2.6 million, respectively for the corresponding periods of 2020, of foreign exchange losses primarily related to its Brazilian operating subsidiaries. |
Share-Based Compensation | (q) Share-Based Compensation The Company accounts for share-based compensation under ASC 718, Compensation—Stock Compensation Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Share-based compensation expense by category (in thousands): Cost of sales $ 1,166 $ 699 $ 2,807 $ 2,161 Research and development 1,468 780 3,056 2,306 Selling, general and administrative 5,747 3,428 19,004 11,043 Total $ 8,381 $ 4,907 $ 24,867 $ 15,510 |
Loss Contingencies | (r) Loss Contingencies The Company is subject to the possibility of various loss contingencies arising in the ordinary course of business. The Company considers the likelihood of a loss and the ability to reasonably estimate the amount of loss in determining the necessity for and amount of any loss contingencies. Estimated loss contingencies are accrued when it is probable that a liability has been incurred or an asset impaired and the amount of loss can be reasonably estimated. The Company regularly evaluates the most current information available to determine whether any such accruals should be recorded or adjusted. |
Comprehensive Income (Loss) | (s) Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting shareholders’ equity that, under U.S. GAAP are excluded from net income (loss). For the Company, other comprehensive income (loss) generally consists of foreign currency translation adjustments. |
Concentration of Credit and Supplier Risk | (t) Concentration of Credit and Supplier Risk The Company’s concentration of credit risk consists principally of cash and cash equivalents and accounts receivable. The Company’s revenues and related accounts receivable reflect a concentration of activity with certain customers (see Note 12). The Company does not require collateral or other security to support accounts receivable. The Company performs periodic credit evaluations of its customers to minimize collection risk on accounts receivable and maintains allowances for potentially uncollectible accounts. The Company relies on four suppliers for the majority of its raw materials. At May 28, 2021 and August 28, 2020, the Company owed these four suppliers $180.2 million and $139.5 million, respectively, which was recorded as accounts payable and other current liabilities. The inventory purchases from these suppliers during the three and nine months ended May 28, 2021 were $0.4 billion and $0.9 billion, respectively, and $0.3 billion and $0.7 billion, respectively for the corresponding periods of fiscal 2020. |
New Accounting Pronouncements | (u) New Accounting Pronouncements In August 2020, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) other things. ASU 2016-02 is effective for annual reporting periods and interim periods within those years, beginning after December 15, 2018. Effective August 31, 2019, the Company adopted Topic 842, using the modified retrospective transition approach. The Company applied the new guidance to all leases existing as of the date of adoption. The Company’s reported results beginning in fiscal 2020 reflect the application of Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with its historical accounting under Topic 840. The Company elected the practical expedient package permitted under the transition approach. As such, the Company did not reassess whether any expired or existing contracts are or contain leases, did not reassess its historical lease classification, and did not reassess its initial direct costs for any leases that existed prior to August 31, 2019. The Company did not elect the use-of-hindsight. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption. This means, for those leases that qualify, the Company will not recognize a right-of-use asset or lease liability. The Company also elected the practical expedient to not separate lease and non-lease components for all its leases. As of the date of adoption, the Company recognized operating lease right-of-use assets of $24.3 million, with corresponding operating lease liabilities of $25.0 million on the condensed consolidated balance sheets. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to deferred rent. For further information regarding leases, see Note 5 Balance Sheet Details. |
Restructuring Expense | (v) During the fourth quarter of fiscal 2020, the Company recorded restructuring charges amounting to $3.5 million, composed of $2.7 million of asset impairment, $0.4 million of deferred ICMS taxes related to impaired assets, and $0.4 million accrued for contract termination costs. As of May 28, 2021, the contract termination costs have been paid. The Company does not expect additional costs to be incurred in connection with these restructuring efforts. |
Overview, Basis of Presentati_3
Overview, Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
May 28, 2021 | |
Accounting Policies [Abstract] | |
Summary of Gross Billings to Customers and Net Sales for Services and Products | The following is a summary of the Company’s gross billings to customers and net sales for services and products (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Service revenue, net $ 8,846 $ 8,815 $ 22,354 $ 25,173 Cost of purchased materials - service (1) 205,530 168,638 481,163 463,527 Gross billings for services 214,376 177,453 503,517 488,700 Product net sales 428,882 272,472 1,011,079 800,174 Gross billings to customers $ 643,258 $ 449,925 $ 1,514,596 $ 1,288,874 Product net sales $ 428,882 $ 272,472 $ 1,011,079 $ 800,174 Service revenue, net 8,846 8,815 22,354 25,173 Net sales $ 437,728 $ 281,287 $ 1,033,433 $ 825,347 (1) Represents material procurement costs of products provided as an agent reported on a net basis. |
Schedule of Changes in Accounting Receivable, Contract Assets and Deferred Revenues Balances | Changes in the contract assets and deferred revenue during the nine months ended May 28, 2021 are as follows (in thousands): May 28, 2021 August 28, 2020 $ Change Contract assets $ 350 $ 5,068 $ (4,718 ) Deferred revenue $ 20,975 $ 20,124 $ 851 |
Summary of Revenue Recognize on Remaining Performance Obligations | The Company expects to recognize revenue on the remaining performance obligations as follows (in thousands) : May 28, 2021 Within 1 year $ 15,855 2-3 years 4,261 Thereafter 859 $ 20,975 |
Estimated Useful Lives | Estimated useful lives are presented below: Period Asset: Manufacturing equipment 2 to 5 years Buildings and building improvements 5 to 40 years Office furniture, software, computers and equipment 2 to 5 years Leasehold improvements* Shorter of estimated useful life or lease term * Includes the land leases for the Penang facility with a term expiring in 2070 and 2 parcels in Huizhou with terms expiring in 2057 and 2082. |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill during the nine months ended May 28, 2021 and fiscal 2020 are as follows (in thousands): Specialty Memory Products Brazil Products IPS Total Balance as of August 30, 2019 $ 14,720 $ 26,029 $ 40,674 $ 81,423 Provisional adjustment from business acquisition (see Note 2) — — (273 ) (273 ) Translation adjustments — (7,195 ) — (7,195 ) Balance as of August 28, 2020 14,720 18,834 40,401 73,955 Translation adjustments — (698 ) — (698 ) Balance as of May 28, 2021 $ 14,720 $ 18,136 $ 40,401 $ 73,257 |
Summary of Gross Amounts and Accumulated Amortization of Intangible Assets from Acquisition by Type | The following table summarizes the gross amounts and accumulated amortization of intangible assets by type as of May 28, 2021 and August 28, 2020 (dollars in thousands): May 28, 2021 August 28, 2020 Gross Gross Carrying Accumulated Carrying Accumulated Life (years) amount amortization Net amount amortization Net Customer relationships 4 - 8 $ 57,500 $ (19,931 ) $ 37,569 $ 52,300 $ (12,899 ) $ 39,401 Trademarks/tradename 5 - 7 19,200 (5,842 ) 13,358 13,100 (4,095 ) 9,005 Technology 4 - 8 60,150 (6,761 ) 53,389 10,350 (3,085 ) 7,265 Backlog < 1 3,800 (956 ) 2,844 400 (400 ) — Total $ 140,650 $ (33,490 ) $ 107,160 $ 76,150 $ (20,479 ) $ 55,671 |
Amortization of Intangible Assets Classification | Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Amortization of intangible assets classification (in thousands): Cost of sales $ 2,937 $ 647 4,231 $ 1,941 Selling, general and administrative 3,247 2,767 8,780 8,299 Total $ 6,184 $ 3,414 $ 13,011 $ 10,240 |
Summary of Estimated Amortization Expense of Intangible Assets | Estimated amortization expense of these intangible assets for the next five fiscal years and all years thereafter are as follows (in thousands): Amount Fiscal year ending August: Remainder of fiscal 2021 $ 7,244 2022 20,808 2023 18,771 2024 16,292 2025 13,537 2026 and thereafter 30,508 Total $ 107,160 |
Share-Based Compensation Expense by Category | Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Share-based compensation expense by category (in thousands): Cost of sales $ 1,166 $ 699 $ 2,807 $ 2,161 Research and development 1,468 780 3,056 2,306 Selling, general and administrative 5,747 3,428 19,004 11,043 Total $ 8,381 $ 4,907 $ 24,867 $ 15,510 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
May 28, 2021 | |
CreeLED Inc. | |
Summary Of Preliminary Estimated Purchase Price | The preliminary estimated purchase price is as follows (in thousands): Amount Cash $ 50,000 Additional payment for estimated net working capital adjustment (1) 22,958 Estimated fair value of Purchase Price Note 28,100 Estimated fair value of Earnout Note 125,000 $ 226,058 _______________ (1) Includes $15.3 million paid at closing and an estimated $7.6 million payable subsequent to the end of the third quarter of fiscal 2021 upon completion of the review of the assets acquired and liabilities assumed. |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | The Company estimated the provisional fair value of the assets and liabilities of the LED Business as of March 1, 2021, the acquisition date. Due to the timing of acquisition and the contractual provisions to review the net working capital of the acquired LED Business, the estimated purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on preliminary valuation analyses. These preliminary values may change in future reporting periods upon finalization of the net working capital adjustment and the allocation of consideration to the assets acquired and liabilities assumed. The provisional valuation of the LED Business assets acquired and liabilities assumed, noncontrolling interest in subsidiary, and consideration are as follows (in thousands): Amount Cash and cash equivalents $ 36,721 Accounts receivable, net 45,608 Inventories 60,423 Prepaid expenses and other current assets 5,204 Property and equipment, net 70,862 Operating lease right-of-use assets 7,494 Intangible assets, net 64,500 Other noncurrent assets 26 Accounts payable (14,181 ) Other current liabilities (37,001 ) Long-term operating lease liabilities (4,019 ) Other long-term liabilities (2,101 ) Total net assets acquired $ 233,536 Noncontrolling interest in subsidiary (7,478 ) Consideration $ 226,058 |
Summary of Intangible Assets | The estimated fair values and useful lives of the intangible asset acquired are as follows (in thousands): Amount Estimated Useful Life (in years) Technology $ 49,800 7-8 Tradenames/Tradenames 6,100 5 Customer relationships 5,200 7-8 Order backlogs 3,400 less than 1 $ 64,500 |
Summary of Unaudited Pro Forma Information | The unaudited pro forma financial information for the three months ended May 29, 2020 combines the results of operations of the Company for the three months ended May 29, 2020 and the results of operations of the LED Business for the three months ended March 29, 2020. The unaudited pro forma financial information for the nine months ended May 28, 2021 combines the results of operations of the Company for the nine months ended May 28, 2021 (which include the results of the LED Business beginning on the March 1, 2021 acquisition date) and the results of operations of the LED Business for the six months ended December 27, 2020. The unaudited pro forma financial information for the nine months ended May 29, 2020 combines the results of operations of the Company for the nine months ended May 29, 2020 and the results of operations of the LED Business for the nine months ended March 29, 2020. Three Months Ended Nine Months Ended (in thousands, except per share data) May 29, 2020 May 28, 2021 May 29, 2020 Total net sales $ 382,987 $ 1,237,627 $ 1,161,347 Net loss attributable to SGH $ (28,172 ) $ (163,431 ) $ (92,592 ) Earnings per share: Basic $ (1.17 ) $ (6.58 ) $ (3.87 ) Diluted $ (1.17 ) $ (6.58 ) $ (3.87 ) |
Artesyn Embedded Computing, Inc | |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | The assets acquired and liabilities assumed at the acquisition date are based upon their respective fair values summarized below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Tangible assets acquired $ 16,482 $ — $ 16,482 Liabilities assumed (7,840 ) — (7,840 ) Identifiable intangible assets 41,900 — 41,900 Goodwill 27,111 (234 ) 26,877 Total net assets acquired $ 77,653 $ (234 ) $ 77,419 |
Summary of Intangible Assets | Asset categories acquired included working capital, fixed assets, and identified intangible assets. The intangible assets are as follows (in thousands): Amount Estimated Useful Life (in years) Customer relationships $ 31,800 4-6 years Technology 10,100 4 years $ 41,900 |
Reconciliation of Net Cash Exchanged in Accordance with the Purchase Agreement to the Total Purchase Price | A reconciliation of net cash exchanged in accordance with the Artesyn SPA to the total purchase price as of the closing date of the transaction, July 8, 2019, is presented below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Net cash for merger $ 74,358 $ — $ 74,358 Cash and cash equivalents acquired 37 — 37 Upfront payment in accordance with agreement 74,395 — 74,395 Post-closing adjustments in accordance with agreement 558 (234 ) 324 Total consideration 74,953 (234 ) 74,719 Estimated fair value of contingent consideration 2,700 - 2,700 Total purchase price $ 77,653 $ (234 ) $ 77,419 |
Inforce Computing, Inc | |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | The assets acquired and liabilities assumed at the acquisition date are based upon their respective fair values summarized below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Tangible assets acquired $ 5,266 $ — $ 5,266 Liabilities assumed (5,643 ) — (5,643 ) Identifiable intangible assets 6,700 — 6,700 Goodwill 8,317 (39 ) 8,278 Total net assets acquired $ 14,640 $ (39 ) $ 14,601 |
Summary of Intangible Assets | Asset categories acquired included working capital, fixed assets, and identified intangible assets. The intangible assets are as follows (in thousands): Amount Estimated Useful Life (in years) Customer relationships $ 5,800 5 years Technology 900 5 years $ 6,700 |
Reconciliation of Net Cash Exchanged in Accordance with the Purchase Agreement to the Total Purchase Price | A reconciliation of net cash exchanged in accordance with the Inforce Merger Agreement to the total purchase price as of the closing date of the transaction, July 9, 2019, is presented below (in thousands): Previously Reported Purchase Price Allocation Measurement period adjustment As Adjusted Net cash for merger $ 1,581 $ — $ 1,581 Cash and cash equivalents acquired 1,576 — 1,576 Upfront cash payment 3,157 — 3,157 Upfront shares issued 9,167 — 9,167 Upfront consideration in accordance with agreement 12,324 — 12,324 Purchase price holdback - cash due to pre-closing holders 413 — 413 Purchase price holdback - shares due to pre-closing holders 1,618 — 1,618 Post-closing adjustments in accordance with agreement 285 (39 ) 246 Total purchase price $ 14,640 $ (39 ) $ 14,601 |
Premiere Logistics | |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | The assets acquired and liabilities assumed at the acquisition date are based on their respective fair values summarized below (in thousands): Tangible assets acquired $ 277 Liabilities assumed (168 ) Identifiable intangible assets 83 Total net assets acquired $ 192 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
May 28, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions With Affiliates | In the normal course of business, the Company had transactions with its affiliates as follows (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Affiliates: Net sales $ 20,103 $ 24,139 $ 53,251 $ 59,691 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
May 28, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): May 28, August 28, 2021 2020 Raw materials $ 134,180 $ 89,943 Work in process 47,697 16,672 Finished goods 107,085 56,376 Total inventories* $ 288,962 $ 162,991 * As of May 28, 2021 and August 28, 2020, 7% and 17%, respectively, of total inventories represented inventory held under the Company's supply chain services. |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): May 28, August 28, 2021 2020 Financial credits* $ 20,006 $ 6,359 Prepayment for VAT and other transaction taxes 10,357 2,119 Prepaid R&D expenses 3,763 1,865 Unbilled service receivables 3,310 1,265 Prepaid income taxes 1,064 1,201 Other prepaid expenses and other current assets 14,841 14,181 Total prepaid expenses and other current assets $ 53,341 $ 26,990 * See Note 1(i). |
Schedule of Property and Equipment | Property and equipment consisted of the following (in thousands): May 28, August 28, 2021 2020 Office furniture, software, computers and equipment $ 32,527 $ 21,528 Manufacturing equipment 170,173 113,035 Building and building improvements* 51,045 26,498 Land 16,129 1,208 269,874 162,269 Less accumulated depreciation and amortization 116,613 107,564 Net property and equipment $ 153,261 $ 54,705 * Includes facilities in Penang and Huizhou, which are situated on leased land. |
Schedule of Other Noncurrent Assets | Other noncurrent assets consisted of the following (in thousands): May 28, August 28, 2021 2020 Deferred tax asset $ 4,859 $ 3,450 Prepaid ICMS taxes in Brazil* 3,088 3,976 Prepaid R&D expense 881 1,356 Deposits on equipment — 8,170 Other 4,999 3,602 Total other noncurrent assets $ 13,827 $ 20,554 * See Note 1(i). |
Schedule Of Other Current Liabilities | Other current liabilities consisted of the following (in thousands): May 28, August 28, 2021 2020 Accrued compensation $ 27,672 $ 16,862 Line of credit 25,000 — Accrued variable consideration 16,250 — Deferred revenue 15,855 17,264 Current portion of lease liabilities 8,547 5,304 VAT and other transaction taxes payable 6,775 6,143 Income taxes payable 4,952 1,352 Derivative liabilities 3,420 912 Accrued warranty reserve 1,791 1,316 Other current liabilities 27,746 8,676 Total other current liabilities $ 138,008 $ 57,829 |
Components of Lease Costs | The components of lease costs are as follows (in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 29, 2020 May 28, 2021 May 29, 2020 Operating lease cost $ 2,856 $ 1,832 $ 6,310 $ 4,955 Variable lease cost 409 221 969 576 Short-term lease cost 106 36 221 252 Total lease costs $ 3,371 $ 2,089 $ 7,500 $ 5,783 Weighted-average remaining lease term 6.4 years 7.5 years 6.4 years 7.5 years Weighted-average discount rate 6.8 % 7.9 % 6.8 % 7.9 % |
Schedule of Future Minimum Undiscounted Payments under Non-Cancelable Operating Leases | Future minimum undiscounted payments under the Company’s non-cancelable operating leases were as follows as of May 28, 2021 (in thousands): Fiscal year ending August: Amount Remainder of 2021 $ 3,128 2022 10,663 2023 7,816 2024 4,536 2025 3,819 2026 and thereafter 18,822 Total 48,784 Less Short-term lease commitments (135 ) Less imputed interest (11,739 ) Present value of total lease liabilities $ 36,910 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
May 28, 2021 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | Provision for income taxes for the three and nine month periods presented consisted of the following (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Provision for income taxes $ 4,010 $ 2,700 $ 8,485 $ 4,365 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
May 28, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Notes | The carrying value of the Notes is as follows (in thousands): May 28, August 28, 2021 2020 Principal $ 250,000 $ 250,000 Unamortized debt discount (43,009 ) (48,586 ) Unamortized issuance costs (5,171 ) (5,841 ) Net carrying amount $ 201,820 $ 195,573 |
Schedule of Interest Expense Recognized Related to Notes | The following table sets forth the total interest expense recognized related to the Notes (in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 29, 2020 May 28, 2021 May 29, 2020 Contractual interest expenses $ 1,438 $ 1,391 $ 4,219 $ 1,688 Amortization of debt discount 1,864 1,707 5,577 2,106 Amortization of debt issuance costs 224 247 670 253 Total interest cost recognized $ 3,526 $ 3,345 $ 10,466 $ 4,047 |
Summary of Convertible Senior Notes, due 2026, Seller Note, due 2023, FINEP Credit Agreement and ABL Credit Agreement | The Convertible Senior Notes, due 2026, Purchase Price Note, due 2023, FINEP Credit Agreement and ABL Credit Agreement are classified as follows in the accompanying consolidating balance sheets (in thousands): May 28, August 28, 2021 2020 Notes $ 250,000 $ 250,000 Purchase price note 125,000 — FINEP loan 11,228 — Unamortized debt discount (43,010 ) (48,586 ) Unamortized debt issuance costs (5,171 ) (5,841 ) Long-term debt $ 338,047 $ 195,573 |
Summary of Future Minimum Principal Payments | The future minimum principal payments under the Notes, FINEP Credit Agreement and Purchase Price Note as of May 28, 2021 are (in thousands): Notes Purchase Price Note FINEP TOTAL Fiscal year ending August: Remainder of fiscal 2021 $ — $ — $ — $ — 2022 — — 335 335 2023 — 125,000 2,011 127,011 2024 — — 2,011 2,011 2025 — — 2,011 2,011 2026 250,000 — 2,011 252,011 2027 — — 2,011 2,011 2028 — — 838 838 Total $ 250,000 $ 125,000 $ 11,228 $ 386,228 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
May 28, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis include the following (in thousands): Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Observable/ Unobservable Inputs Corroborated by Market Data (Level 2) Significant Unobservable Inputs (Level 3) Total Balances as of May 28, 2021: Assets Cash and cash equivalents $ 188,992 $ — $ — $ 188,992 Total assets measured at fair value $ 188,992 $ — $ — $ 188,992 Liabilities Derivative financial instruments (1) $ — $ 3,420 $ — $ 3,420 Acquisition-related contingent consideration (3) — — 44,500 44,500 Total liabilities measured at fair value $ — $ 3,420 44,500 $ 47,920 Balances as of August 28, 2020: Assets Cash and cash equivalents $ 150,811 $ — $ — $ 150,811 Derivative financial instruments (2) — 112 — 112 Total assets measured at fair value $ 150,811 $ 112 $ — $ 150,923 Liabilities Derivative financial instruments (1) $ — $ 912 $ — $ 912 Total liabilities measured at fair value $ — $ 912 $ — $ 912 (1) Included in other current liabilities on the Company’s condensed consolidated balance sheets - see Note 4. ( 2 ) Included in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheets - see Note 4. (3) Included in other long-term liabilities on the Company’s condensed consolidated balance sheets. |
Share-Based Compensation and _2
Share-Based Compensation and Employee Benefit Plans (Tables) | 9 Months Ended |
May 28, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Assumptions Used to Value Stock Options | The following assumptions were used to value the Company’s stock options: Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Stock options: Expected term (years) — 6.25 6.25 6.25 Expected volatility — 57.10 % 57.10 % 46.10% - 57.10% Risk-free interest rate — 0.40 % 0.49 % 0.40% - 1.68% Expected dividends — — — — |
2017 Share Incentive Plan (SGH Plan) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Options Activity | A summary of option activity for the SGH Plan is presented below (dollars and shares in thousands, except per share data): Weighted Weighted average average remaining per share contractual Aggregate exercise term intrinsic Shares price (years) value Options outstanding at August 28, 2020 2,109 $ 29.45 6.95 $ 7,225 Options granted 250 26.99 Options exercised (353 ) 27.03 Options cancelled (27 ) 32.09 Options outstanding at May 28, 2021 1,979 $ 29.53 6.60 $ 35,352 Options exercisable at May 28, 2021 978 $ 28.76 5.92 $ 18,235 |
Summary of Changes in RSAs and RSUs Outstanding | A summary of the changes in RSAs and RSUs outstanding is presented below (dollars and shares in thousands, except per share data): Weighted average grant date Aggregate fair value intrinsic Shares per share value Awards outstanding at August 28, 2020 1,273 $ 26.19 $ 31,721 Awards granted 2,256 35.30 Awards vested and released (537 ) 26.25 Awards forfeited and cancelled (80 ) 34.52 Awards outstanding at May 28, 2021 2,912 $ 33.01 $ 138,015 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
May 28, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Reconcile Changes in Accrued Warranty | The following table reconciles the changes in the Company’s accrued warranty (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Beginning accrued warranty reserve $ 1,255 $ 1,608 $ 1,316 $ 1,770 Warranty claims (334 ) (452 ) (868 ) (1,588 ) LED business acquired warranty reserves 427 — 427 — Provision for product warranties 443 181 916 1,155 Ending accrued warranty reserve $ 1,791 $ 1,337 $ 1,791 $ 1,337 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
May 28, 2021 | |
Segment Reporting [Abstract] | |
Summary of Operating Results Net of Inter-Segment Revenues | The following table shows operating results net of inter-segment revenues, which for the respective three and nine months ended, are not material to the financial statements (dollars in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 28, 2021 Specialty Brazil IPS LED Total Specialty Brazil IPS LED Total Net Revenue $ 121,620 $ 118,496 $ 95,857 $ 101,755 $ 437,728 $ 357,729 $ 326,808 $ 247,141 $ 101,755 $ 1,033,433 Adjusted Gross Profit $ 22,299 $ 21,116 $ 22,139 $ 30,134 $ 95,688 $ 59,118 $ 54,646 $ 65,145 $ 30,134 $ 209,043 Adjusted Gross Margin 18 % 18 % 23 % 30 % 22 % 17 % 17 % 26 % 30 % 20 % Adjusted Gross Profit and Adjusted Gross Margin excludes share-based compensation (see Note 1(q)), intangible amortization (see Note 1(l)), LED net inventory adjustment ($7.1 million) and corporate expenses ($8 thousand and $15 thousand, respectively). Three Months Ended Nine Months Ended May 29, 2020 May 29, 2020 Specialty Brazil IPS LED Total Specialty Brazil IPS LED Total Net Revenue $ 127,700 $ 92,701 $ 60,886 — $ 281,287 $ 342,685 $ 284,400 $ 198,262 — $ 825,347 Adjusted Gross Profit $ 21,047 $ 19,685 $ 14,907 — $ 55,639 $ 61,166 $ 50,840 $ 52,312 — $ 164,318 Adjusted Gross Margin 16 % 21 % 24 % 20 % 18 % 18 % 26 % 20 % Adjusted Gross Profit and Adjusted Gross Margin excludes share-based compensation (see Note 1(q)), intangible amortization (see Note 1(l)) and corporate expenses ($0.1 million and $0.2 million, respectively). |
Summary of Net Sales and Property and Equipment by Geographic Area | A summary of the Company’s net sales by geographic area, based on the ship-to location of the customer, property and equipment by geographic area is as follows (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Geographic Net Sales: U.S. $ 179,478 $ 131,596 $ 423,576 $ 362,215 Brazil 119,112 92,687 327,456 285,059 China 73,666 23,197 130,171 67,627 Europe 25,849 8,575 54,461 29,917 Other 39,623 25,232 97,769 80,529 Total $ 437,728 $ 281,287 $ 1,033,433 $ 825,347 May 28, August 28, 2021 2020 Property and Equipment, Net: U.S. $ 24,924 $ 11,635 Brazil 53,782 30,648 Malaysia 10,613 10,209 China 61,837 — Other 2,105 2,213 Total $ 153,261 $ 54,705 |
Major Customers (Tables)
Major Customers (Tables) | 9 Months Ended |
May 28, 2021 | |
Risks And Uncertainties [Abstract] | |
Summary of Net Sales to Major Customer | A majority of the Company’s net sales are attributable to customers operating in the information technology industry. Net sales to significant end user customers, including sales to their manufacturing subcontractors, defined as net sales in excess of 10% of total net sales, are as follows (dollars in thousands): Three Months Ended Nine Months Ended May 28, 2021 May 29, 2020 May 28, 2021 May 29, 2020 Amount Percentage of net sales Amount Percentage of net sales Amount Percentage of net sales Amount Percentage of net sales Customer A (1) $ 61,177 14 % — — — — — — Customer B (2) 46,575 11 % — — — — — — Customer C (2) — — 38,778 14 % 143,019 14 % 144,847 18 % Customer D (3) — — 35,087 12 % — — 89,834 11 % $ 107,752 25 % $ 73,865 26 % $ 143,019 14 % $ 234,681 29 % (1) IPS customer (2) Brazil customer (3 ) Specialty customer |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
May 28, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth for all periods presented the computation of basic and diluted earnings per share, including the reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share (dollars and shares in thousands, except per share data): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Numerator: Net income (loss) $ (6,654 ) $ 825 $ 1,217 $ (8,671 ) Net income attributable to noncontrolling interest 557 — 557 — Net income (loss) attributable to SGH $ (7,211 ) $ 825 $ 660 $ (8,671 ) Denominator: Weighted average shares outstanding: Basic 24,035 24,066 24,843 23,895 Diluted 24,035 24,431 25,902 23,895 Earnings per share: Basic $ (0.30 ) $ 0.03 $ 0.03 $ (0.36 ) Diluted $ (0.30 ) $ 0.03 $ 0.03 $ (0.36 ) Anti-dilutive weighted shares excluded from the computation of diluted earnings per share 233 7,892 7,551 7,236 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
May 28, 2021 | |
Other Income And Expenses [Abstract] | |
Detail of Other Expense, Net | The following table provides the detail of other expense, net as follows (in thousands): Three Months Ended Nine Months Ended May 28, May 29, May 28, May 29, 2021 2020 2021 2020 Foreign currency losses $ (994 ) $ (484 ) $ (1,195 ) $ (2,586 ) Loss on capped call mark-to-market adjustment — (2,924 ) — (7,719 ) Loss on early extinguishment of debt — (192 ) — (6,822 ) Other 505 155 8 456 Total other expense, net $ (489 ) $ (3,445 ) $ (1,187 ) $ (16,671 ) |
Overview, Basis of Presentati_4
Overview, Basis of Presentation and Significant Accounting Policies - Additional Information (Details) R$ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Apr. 30, 2016 | May 28, 2021USD ($)Supplier | Feb. 26, 2021USD ($) | Nov. 27, 2020USD ($) | Aug. 28, 2020USD ($) | May 29, 2020USD ($) | Mar. 01, 2019USD ($) | Mar. 01, 2019BRL (R$) | Nov. 30, 2018USD ($)Installment | May 28, 2021USD ($)ReportingunitSupplier | May 28, 2021BRL (R$)Reportingunit | May 29, 2020USD ($) | May 29, 2020USD ($) | Aug. 28, 2020USD ($) | Aug. 28, 2020BRL (R$) | May 28, 2021BRL (R$)Supplier | Apr. 30, 2021USD ($) | Apr. 30, 2021BRL (R$) | Feb. 26, 2021BRL (R$) | Jan. 31, 2021USD ($) | Jan. 31, 2021BRL (R$) | Nov. 27, 2020BRL (R$) | Aug. 28, 2020BRL (R$) | Nov. 30, 2018BRL (R$) | Dec. 21, 2017USD ($) | Dec. 21, 2017BRL (R$) | |
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Number of reporting units | Reportingunit | 4 | 4 | ||||||||||||||||||||||||
Amortization period | 12 months | 12 months | ||||||||||||||||||||||||
Revenue recognized | $ 16,300,000 | |||||||||||||||||||||||||
Contract With Customer Liability Current | $ 15,855,000 | $ 17,264,000 | 15,855,000 | $ 17,264,000 | ||||||||||||||||||||||
Sale of excess tax credit approved amount | $ 400,000 | $ 500,000 | $ 200,000 | $ 1,100,000 | 400,000 | 1,100,000 | R$ 2.4 | R$ 2.5 | R$ 1.2 | R$ 5.9 | ||||||||||||||||
Number of installments for sale of credits | Installment | 22 | |||||||||||||||||||||||||
Discount rate for the sale of tax credits | 36.00% | 27.00% | 26.00% | 22.00% | ||||||||||||||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 1,700,000 | |||||||||||||||||||||||||
Additional impairment | 0 | |||||||||||||||||||||||||
Goodwill impairment | 0 | |||||||||||||||||||||||||
Impairment of long-lived assets | $ 0 | $ 0 | 0 | $ 0 | ||||||||||||||||||||||
Foreign exchange gains (losses) | (994,000) | (484,000) | (1,195,000) | $ (2,586,000) | ||||||||||||||||||||||
Operating lease right-of-use assets | 35,307,000 | $ 25,013,000 | 35,307,000 | 25,013,000 | ||||||||||||||||||||||
Lease liability | $ 36,910,000 | $ 36,910,000 | ||||||||||||||||||||||||
Restructuring charge | 3,500,000 | |||||||||||||||||||||||||
Asset impairment | 2,700,000 | |||||||||||||||||||||||||
Accrued contract termination costs | 400,000 | 400,000 | ||||||||||||||||||||||||
Supplier Concentration Risk | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Number of suppliers | Supplier | 4 | 4 | 4 | |||||||||||||||||||||||
Accounts payable and other current liabilities | $ 180,200,000 | 139,500,000 | $ 180,200,000 | 139,500,000 | ||||||||||||||||||||||
Inventory purchases | 400,000,000 | 300,000,000 | 900,000,000 | 700,000,000 | ||||||||||||||||||||||
ICMS | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Tax credits | 3,100,000 | 4,100,000 | $ 3,100,000 | 4,100,000 | R$ 16.7 | $ 1,600,000 | R$ 8.4 | $ 1,600,000 | R$ 8.4 | 21.2 | ||||||||||||||||
Tax credits, subject to vesting | 300,000 | $ 300,000 | 1.6 | |||||||||||||||||||||||
Tax credits, vesting period | 48 months | 48 months | ||||||||||||||||||||||||
Sale of excess tax credit | $ 3,300,000 | R$ 17.7 | ||||||||||||||||||||||||
Excess tax credit received through monthly installments | $ 1,400,000 | R$ 7.7 | ||||||||||||||||||||||||
Deferred tax impaired assets | 400,000 | 400,000 | ||||||||||||||||||||||||
ICMS | Sao Paulo Tax Authorities | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Sale of excess tax credit approved amount | $ 5,800,000 | R$ 31.6 | ||||||||||||||||||||||||
Excess tax credit received through monthly installments | $ 1,800,000 | R$ 10.0 | ||||||||||||||||||||||||
ICMS | Earliest Tax Year | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Excess credits to be recovered, year | 2021 | 2021 | ||||||||||||||||||||||||
ICMS | Latest Tax Year | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Excess credits to be recovered, year | 2023 | 2023 | ||||||||||||||||||||||||
SMART Brazil | ICMS | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Tax benefit, renewal period | 2 years | 2 years | ||||||||||||||||||||||||
Brazilian Operating Subsidiaries | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Foreign exchange gains (losses) | 1,000,000 | 500,000 | $ 1,200,000 | 2,600,000 | ||||||||||||||||||||||
Research & Development | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Incentivized revenue percentage | 2.62 | 2.62 | ||||||||||||||||||||||||
Financial credits | 8,200,000 | $ 0 | $ 22,200,000 | $ 0 | ||||||||||||||||||||||
Cost Of Sales [Member] | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Prior Period Reclassification Adjustment | 4,300,000 | |||||||||||||||||||||||||
Interest Expense [Member] | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Prior Period Reclassification Adjustment | $ 800,000 | |||||||||||||||||||||||||
Contract Assets | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Contract assets | 350,000 | 5,068,000 | 350,000 | 5,068,000 | ||||||||||||||||||||||
Contract Liability | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Contract With Customer Liability Current | 21,000,000 | 20,100,000 | 21,000,000 | 20,100,000 | ||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Unused financial credits | $ 20,000,000 | R$ 108.1 | ||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | ICMS | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Tax credits, subject to vesting | 100,000 | 100,000 | 0.7 | |||||||||||||||||||||||
Other Noncurrent Assets | ICMS | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Tax credits, vested | 3,800,000 | 3,800,000 | 19.6 | |||||||||||||||||||||||
Tax credits, subject to vesting | $ 200,000 | $ 200,000 | R$ 0.9 | |||||||||||||||||||||||
Minimum | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Term of services contract | 1 year | 1 year | ||||||||||||||||||||||||
Percentage of gross sales revenues | 10.92% | 10.92% | ||||||||||||||||||||||||
Percentage of income tax positions likely to be realized | 50.00% | 50.00% | ||||||||||||||||||||||||
Minimum | ICMS | Sao Paulo Tax Authorities | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Percentage of discount to face amount and fees for arrangers on excess credits sold | 10.00% | |||||||||||||||||||||||||
Minimum | Research & Development | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Multiplier of financial credit range | 2.73 | 2.73 | ||||||||||||||||||||||||
Maximum | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Term of services contract | 3 years | 3 years | ||||||||||||||||||||||||
Incentivized revenue percentage | 13.10% | 13.10% | ||||||||||||||||||||||||
Percentage of gross sales revenues | 13.65% | 13.65% | ||||||||||||||||||||||||
Maximum | ICMS | Sao Paulo Tax Authorities | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Percentage of discount to face amount and fees for arrangers on excess credits sold | 15.00% | |||||||||||||||||||||||||
Maximum | Research & Development | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Multiplier of financial credit range | 3.41 | 3.41 | ||||||||||||||||||||||||
ASU No. 2014-09 | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Percentage of customer purchase to fulfill customers forecast | 100.00% | 100.00% | ||||||||||||||||||||||||
ASU 2016-02 | ||||||||||||||||||||||||||
Overview Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||
Operating lease right-of-use assets | 24,300,000 | $ 24,300,000 | ||||||||||||||||||||||||
Lease liability | $ 25,000,000 | $ 25,000,000 |
Overview, Basis of Presentati_5
Overview, Basis of Presentation and Significant Accounting Policies - Summary of Gross Billings to Customers and Net Sales for Services and Products (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | [1] | May 29, 2020 | |||||
Disaggregation Of Revenue [Line Items] | ||||||||||
Net sales | $ 437,728 | [1] | $ 281,287 | [1] | $ 1,033,433 | [1] | $ 825,347 | $ 825,347 | ||
Cost of purchased materials - service | [2] | 205,530 | 168,638 | 481,163 | 463,527 | |||||
Gross billings for services | 214,376 | 177,453 | 503,517 | 488,700 | ||||||
Gross billings to customers | 643,258 | 449,925 | 1,514,596 | 1,288,874 | ||||||
Service Revenue, Net | ||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||
Net sales | 8,846 | 8,815 | 22,354 | 25,173 | ||||||
Product Net Sales | ||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||
Net sales | $ 428,882 | $ 272,472 | $ 1,011,079 | $ 800,174 | ||||||
[1] | Includes sales to affiliates of $20,103 and $53,251 in the three and nine months ended May 28, 2021 and $24,139 and $59,691 for the same periods ended May 29, 2020, respectively (see Note 3). | |||||||||
[2] | Represents material procurement costs of products provided as an agent reported on a net basis. |
Overview, Basis of Presentati_6
Overview, Basis of Presentation and Significant Accounting Policies - Schedule of Changes in Accounts Receivable, Contract Assets and Deferred Revenues Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
May 28, 2021 | Aug. 28, 2020 | |
Contract Assets | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract with customer asset | $ 350 | $ 5,068 |
Change in contract with customer asset | (4,718) | |
Contract Liability | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract with customer liability | 20,975 | $ 20,124 |
Change in contract with customer liability | $ 851 |
Overview, Basis of Presentati_7
Overview, Basis of Presentation and Significant Accounting Policies - Summary of Revenue Recognize on Remaining Performance Obligations (Details) $ in Thousands | May 28, 2021USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Expected revenue recognized on remaining performance obligations | $ 20,975 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-05-29 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Expected revenue recognized on remaining performance obligations | $ 15,855 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-08-28 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Expected revenue recognized on remaining performance obligations | $ 4,261 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-08-26 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Expected revenue recognized on remaining performance obligations | $ 859 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Overview, Basis of Presentati_8
Overview, Basis of Presentation and Significant Accounting Policies - Summary of Revenue Recognize on Remaining Performance Obligations (Details 1) $ in Thousands | May 28, 2021USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Expected revenue recognized on remaining performance obligations | $ 20,975 |
Overview, Basis of Presentati_9
Overview, Basis of Presentation and Significant Accounting Policies - Estimated Useful Lives (Details) | 9 Months Ended | |
May 28, 2021 | ||
Manufacturing Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, estimated useful lives | 2 years | |
Manufacturing Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, estimated useful lives | 5 years | |
Building and Building Improvements | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, estimated useful lives | 5 years | |
Building and Building Improvements | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, estimated useful lives | 40 years | |
Office Furniture, Software, Computers and Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, estimated useful lives | 2 years | |
Office Furniture, Software, Computers and Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, estimated useful lives | 5 years | |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, estimated useful lives | Shorter of estimated useful life or lease term | [1] |
[1] | Includes the land leases for the Penang facility with a term expiring in 2070 and 2 parcels in Huizhou with terms expiring in 2057 and 2082. |
Overview, Basis of Presentat_10
Overview, Basis of Presentation and Significant Accounting Policies - Estimated Useful Lives (Parenthetical) (Details) | 9 Months Ended |
May 28, 2021Parcel | |
Land | Penang | |
Property Plant And Equipment [Line Items] | |
Lease term, expiration year | 2070 |
Parcels | Huizhou | |
Property Plant And Equipment [Line Items] | |
Number of parcels | 2 |
Parcels One | Huizhou | |
Property Plant And Equipment [Line Items] | |
Lease term, expiration year | 2057 |
Parcels Two | Huizhou | |
Property Plant And Equipment [Line Items] | |
Lease term, expiration year | 2082 |
Overview, Basis of Presentat_11
Overview, Basis of Presentation and Significant Accounting Policies - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
May 28, 2021 | Aug. 28, 2020 | |
Goodwill [Line Items] | ||
Beginning balance | $ 73,955 | $ 81,423 |
Provisional adjustments from business acquisition (See Note 2) | (273) | |
Translation adjustments | (698) | (7,195) |
Ending balance | 73,257 | 73,955 |
Brazil Products | ||
Goodwill [Line Items] | ||
Beginning balance | 18,834 | 26,029 |
Translation adjustments | (698) | (7,195) |
Ending balance | 18,136 | 18,834 |
Specialty Memory Products | ||
Goodwill [Line Items] | ||
Beginning balance | 14,720 | 14,720 |
Ending balance | 14,720 | 14,720 |
IPS | ||
Goodwill [Line Items] | ||
Beginning balance | 40,401 | 40,674 |
Provisional adjustments from business acquisition (See Note 2) | (273) | |
Ending balance | $ 40,401 | $ 40,401 |
Overview, Basis of Presentat_12
Overview, Basis of Presentation and Significant Accounting Policies - Summary of Gross Amounts and Accumulated Amortization of Intangible Assets from Acquisition by Type (Details) - USD ($) $ in Thousands | 9 Months Ended | |
May 28, 2021 | Aug. 28, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 140,650 | $ 76,150 |
Accumulated amortization | (33,490) | (20,479) |
Net | 107,160 | 55,671 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 57,500 | 52,300 |
Accumulated amortization | (19,931) | (12,899) |
Net | $ 37,569 | 39,401 |
Customer Relationships | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Life (years) | 4 years | |
Customer Relationships | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Life (years) | 8 years | |
Trademarks/Tradename | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 19,200 | 13,100 |
Accumulated amortization | (5,842) | (4,095) |
Net | $ 13,358 | 9,005 |
Trademarks/Tradename | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Life (years) | 5 years | |
Trademarks/Tradename | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Life (years) | 7 years | |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 60,150 | 10,350 |
Accumulated amortization | (6,761) | (3,085) |
Net | $ 53,389 | 7,265 |
Technology | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Life (years) | 4 years | |
Technology | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Life (years) | 8 years | |
Backlog | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 3,800 | 400 |
Accumulated amortization | (956) | $ (400) |
Net | $ 2,844 | |
Backlog | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Life (years) | 1 year |
Overview, Basis of Presentat_13
Overview, Basis of Presentation and Significant Accounting Policies - Amortization of Intangible Assets Classification (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 6,184 | $ 3,414 | $ 13,011 | $ 10,240 |
Cost of Sales | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 2,937 | 647 | 4,231 | 1,941 |
Selling, General and Administrative | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 3,247 | $ 2,767 | $ 8,780 | $ 8,299 |
Overview, Basis of Presentat_14
Overview, Basis of Presentation and Significant Accounting Policies - Summary of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Remainder of fiscal 2021 | $ 7,244 | |
2022 | 20,808 | |
2023 | 18,771 | |
2024 | 16,292 | |
2025 | 13,537 | |
2026 and thereafter | 30,508 | |
Net | $ 107,160 | $ 55,671 |
Overview, Basis of Presentat_15
Overview, Basis of Presentation and Significant Accounting Policies - Share-Based Compensation Expense by Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | $ 8,381 | $ 4,907 | $ 24,867 | $ 15,510 |
Cost of Sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | 1,166 | 699 | 2,807 | 2,161 |
Research & Development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | 1,468 | 780 | 3,056 | 2,306 |
Selling, General and Administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | $ 5,747 | $ 3,428 | $ 19,004 | $ 11,043 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) | May 28, 2021USD ($) | Mar. 01, 2021 | Oct. 18, 2020USD ($) | Jul. 09, 2019USD ($)shares | Jul. 08, 2019USD ($)$ / shares | Feb. 28, 2019USD ($) | Aug. 28, 2020USD ($) | May 29, 2020USD ($) | May 28, 2021USD ($) | May 29, 2020USD ($) | Aug. 28, 2020USD ($) | Aug. 29, 2019USD ($) |
CreeLED Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Date of acquisition | Oct. 18, 2020 | |||||||||||
Ownership interest | 51.00% | |||||||||||
Payments to acquire business, in cash | $ 50,000,000 | $ 50,000,000 | ||||||||||
Business combination, consideration transferred, equity interests issued and issuable | 125,000,000 | |||||||||||
Business combination maximum earn out payment based on specific revenue achievement | 125,000,000 | |||||||||||
Business combination, minimum earn out payable in unsecured promissory note | $ 2,500,000 | |||||||||||
Acquisition date, provisional fair value of assets and liabilities | Mar. 1, 2021 | |||||||||||
Total net sales | $ 101,800,000 | $ 382,987,000 | $ 1,237,627,000 | $ 1,161,347,000 | ||||||||
CreeLED Inc. | Selling, General and Administrative | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Acquisition-related transaction expenses | $ 5,800,000 | |||||||||||
CreeLED Inc. | Purchase Price Note | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Note maturity date | Aug. 15, 2023 | |||||||||||
CreeLED Inc. | Earnout Note | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Note maturity date | Mar. 27, 2025 | |||||||||||
Estimated initial fair value of contingent consideration | $ 28,100,000 | |||||||||||
Fair value of contingent consideration | $ 44,500,000 | $ 44,500,000 | ||||||||||
Estimated initial fair value of contingent consideration | $ 28,100,000 | |||||||||||
CreeLED Inc. | 3-Month LIBOR | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Note interest rate | 3.00% | |||||||||||
CreeLED Inc. | 3-Month LIBOR | Purchase Price Note | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Note interest rate | 3.00% | |||||||||||
CreeLED Inc. | 3-Month LIBOR | Earnout Note | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Note interest rate | 3.00% | |||||||||||
Artesyn Embedded Computing, Inc | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Date of acquisition | Jul. 8, 2019 | |||||||||||
Payments to acquire business, in cash | $ 74,395,000 | |||||||||||
Business combination maximum earn out payment based on specific revenue achievement | 10,000,000 | |||||||||||
Estimated initial fair value of contingent consideration | 2,700,000 | |||||||||||
Purchase price | $ 74,719,000 | |||||||||||
Business combination additional earn out payments rate for each dollar of gross revenue | $ / shares | $ 0.10 | |||||||||||
Estimated initial fair value of contingent consideration | $ 2,700,000 | |||||||||||
Purchase price in cash | $ 77,419,000 | |||||||||||
Artesyn Embedded Computing, Inc | Selling, General and Administrative | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Professional fees | $ 600,000 | $ 1,000,000 | ||||||||||
Artesyn Embedded Computing, Inc | Level 3 | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent consideration, liability, measurement input | 0.0850 | |||||||||||
Artesyn Embedded Computing, Inc | Indemnification Obligations | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Escrow Deposit | $ 800,000 | |||||||||||
Artesyn Embedded Computing, Inc | US Prime Rate | Level 3 | Line of Credit | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent consideration, liability, measurement input | 0.0275 | |||||||||||
Artesyn Embedded Computing, Inc | 3-Month LIBOR | Level 3 | Term Loan | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent consideration, liability, measurement input | 0.0625 | |||||||||||
Inforce Computing, Inc | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Date of acquisition | Jul. 9, 2019 | |||||||||||
Payments to acquire business, in cash | $ 3,157,000 | |||||||||||
Business combination, consideration transferred, equity interests issued and issuable | 9,167,000 | |||||||||||
Purchase price in cash | 14,601,000 | |||||||||||
Upfront cash payment | $ 400,000 | |||||||||||
Inforce Computing, Inc | Selling, General and Administrative | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Professional fees | $ 200,000 | $ 500,000 | ||||||||||
Inforce Computing, Inc | Indemnification Obligations | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Upfront cash payment | $ 3,200,000 | |||||||||||
Upfront issued shares | shares | 382,788 | |||||||||||
Upfront issued value | $ 9,100,000 | |||||||||||
Inforce Computing, Inc | Post-Closing Adjustments | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Upfront cash payment | $ 700,000 | |||||||||||
Upfront issued shares | shares | 67,550 | |||||||||||
Upfront issued value | $ 1,600,000 | |||||||||||
Premiere Logistics | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments to acquire business, in cash | $ 200,000 |
Business Acquisitions - Summary
Business Acquisitions - Summary of Preliminary Estimated Purchase Price (Details) - CreeLED Inc. - USD ($) $ in Thousands | Oct. 18, 2020 | May 28, 2021 |
Business Acquisition [Line Items] | ||
Payments to acquire business, in cash | $ 50,000 | $ 50,000 |
Additional payment for estimated net working capital adjustment | 22,958 | |
Estimated fair value of Purchase Price Note | 28,100 | |
Estimated fair value of Earnout Note | 125,000 | |
Total purchase price | $ 226,058 |
Business Acquisitions - Summa_2
Business Acquisitions - Summary of Preliminary Estimated Purchase Price (Parenthetical) (Details) - CreeLED Inc. $ in Millions | May 28, 2021USD ($) |
Business Acquisition [Line Items] | |
Assets Acquired | $ 15.3 |
Liabilities assumed | $ 7.6 |
Business Acquisitions - Summa_3
Business Acquisitions - Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date (Details) - USD ($) $ in Thousands | May 28, 2021 | Mar. 01, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | Jul. 09, 2019 | Jul. 08, 2019 | Feb. 28, 2019 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 73,257 | $ 73,955 | $ 81,423 | ||||
CreeLED Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 36,721 | ||||||
Accounts receivable, net | 45,608 | ||||||
Inventories | 60,423 | ||||||
Prepaid expenses and other current assets | 5,204 | ||||||
Property and equipment, net | 70,862 | ||||||
Operating lease right-of-use assets | 7,494 | ||||||
Intangible assets, net | 64,500 | ||||||
Other noncurrent assets | 26 | ||||||
Accounts payable | (14,181) | ||||||
Other current liabilities | (37,001) | ||||||
Long-term operating lease liabilities | (4,019) | ||||||
Other long-term liabilities | (2,101) | ||||||
Total net assets acquired | 233,536 | ||||||
Noncontrolling interest in subsidiary | (7,478) | ||||||
Consideration | $ 226,058 | ||||||
Liabilities assumed | $ (7,600) | ||||||
Artesyn Embedded Computing, Inc | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment, net | $ 16,482 | ||||||
Intangible assets, net | 41,900 | ||||||
Liabilities assumed | (7,840) | ||||||
Goodwill | 26,877 | ||||||
Total net assets acquired | 77,419 | ||||||
Artesyn Embedded Computing, Inc | Previously Reported | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment, net | 16,482 | ||||||
Intangible assets, net | 41,900 | ||||||
Liabilities assumed | (7,840) | ||||||
Goodwill | 27,111 | ||||||
Total net assets acquired | 77,653 | ||||||
Artesyn Embedded Computing, Inc | Purchase Price Allocation Measurement Period Adjustment | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | (234) | ||||||
Total net assets acquired | $ (234) | ||||||
Inforce Computing, Inc | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment, net | $ 5,266 | ||||||
Intangible assets, net | 6,700 | ||||||
Liabilities assumed | (5,643) | ||||||
Goodwill | 8,278 | ||||||
Total net assets acquired | 14,601 | ||||||
Inforce Computing, Inc | Previously Reported | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment, net | 5,266 | ||||||
Intangible assets, net | 6,700 | ||||||
Liabilities assumed | (5,643) | ||||||
Goodwill | 8,317 | ||||||
Total net assets acquired | 14,640 | ||||||
Inforce Computing, Inc | Purchase Price Allocation Measurement Period Adjustment | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | (39) | ||||||
Total net assets acquired | $ (39) | ||||||
Premiere Logistics | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment, net | $ 277 | ||||||
Intangible assets, net | 83 | ||||||
Liabilities assumed | (168) | ||||||
Total net assets acquired | $ 192 |
Business Acquisitions - Summa_4
Business Acquisitions - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Jul. 09, 2019 | Jul. 08, 2019 | May 28, 2021 |
Technology | Minimum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 4 years | |||
Technology | Maximum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 8 years | |||
Customer Relationships | Minimum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 4 years | |||
Customer Relationships | Maximum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 8 years | |||
Backlog | Maximum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 1 year | |||
CreeLED Inc. | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 64,500 | |||
CreeLED Inc. | Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 49,800 | |||
CreeLED Inc. | Technology | Minimum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 7 years | |||
CreeLED Inc. | Technology | Maximum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 8 years | |||
CreeLED Inc. | Tradenames | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 6,100 | |||
Estimated Useful Life (in years) | 5 years | |||
CreeLED Inc. | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 5,200 | |||
CreeLED Inc. | Customer Relationships | Minimum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 7 years | |||
CreeLED Inc. | Customer Relationships | Maximum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 8 years | |||
CreeLED Inc. | Backlog | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 3,400 | |||
CreeLED Inc. | Backlog | Maximum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 1 year | |||
Artesyn Embedded Computing, Inc | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 41,900 | |||
Artesyn Embedded Computing, Inc | Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 10,100 | |||
Estimated Useful Life (in years) | 4 years | |||
Artesyn Embedded Computing, Inc | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 31,800 | |||
Artesyn Embedded Computing, Inc | Customer Relationships | Minimum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 4 years | |||
Artesyn Embedded Computing, Inc | Customer Relationships | Maximum | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (in years) | 6 years | |||
Inforce Computing, Inc | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 6,700 | |||
Inforce Computing, Inc | Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 900 | |||
Estimated Useful Life (in years) | 5 years | |||
Inforce Computing, Inc | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 5,800 | |||
Estimated Useful Life (in years) | 5 years |
Business Acquisitions - Summa_5
Business Acquisitions - Summary of Unudited Pro Forma Information (Details) - CreeLED Inc. - USD ($) $ / shares in Units, $ in Thousands | May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 |
Business Acquisition [Line Items] | ||||
Total net sales | $ 101,800 | $ 382,987 | $ 1,237,627 | $ 1,161,347 |
Net loss attributable to SGH | $ (28,172) | $ (163,431) | $ (92,592) | |
Earnings per share: | ||||
Basic | $ (1.17) | $ (6.58) | $ (3.87) | |
Diluted | $ (1.17) | $ (6.58) | $ (3.87) |
Business Acquisitions - Reconci
Business Acquisitions - Reconciliation of Net Cash Exchanged in Accordance with the Purchase Agreement to the Total Purchase Price (Details) - USD ($) $ in Thousands | Jul. 09, 2019 | Jul. 08, 2019 | May 28, 2021 |
Business Acquisition [Line Items] | |||
Net cash for merger | $ 28,613 | ||
Artesyn Embedded Computing, Inc | |||
Business Acquisition [Line Items] | |||
Net cash for merger | $ 74,358 | ||
Cash and cash equivalents acquired | 37 | ||
Upfront payment in accordance with agreement | 74,395 | ||
Post-closing adjustments in accordance with agreement | 324 | ||
Total consideration | 74,719 | ||
Estimated initial fair value of contingent consideration | 2,700 | ||
Total purchase price | 77,419 | ||
Artesyn Embedded Computing, Inc | Previously Reported | |||
Business Acquisition [Line Items] | |||
Net cash for merger | 74,358 | ||
Cash and cash equivalents acquired | 37 | ||
Upfront payment in accordance with agreement | 74,395 | ||
Post-closing adjustments in accordance with agreement | 558 | ||
Total consideration | 74,953 | ||
Estimated initial fair value of contingent consideration | 2,700 | ||
Total purchase price | 77,653 | ||
Artesyn Embedded Computing, Inc | Purchase Price Allocation Measurement Period Adjustment | |||
Business Acquisition [Line Items] | |||
Post-closing adjustments in accordance with agreement | (234) | ||
Total consideration | (234) | ||
Total purchase price | $ (234) | ||
Inforce Computing, Inc | |||
Business Acquisition [Line Items] | |||
Net cash for merger | $ 1,581 | ||
Cash and cash equivalents acquired | 1,576 | ||
Upfront payment in accordance with agreement | 3,157 | ||
Business combination, consideration transferred, equity interests issued and issuable | 9,167 | ||
Upfront consideration in accordance with agreement | 12,324 | ||
Purchase price holdback - cash due to pre-closing holders | 413 | ||
Purchase price holdback - shares due to pre-closing holders | 1,618 | ||
Post-closing adjustments in accordance with agreement | 246 | ||
Total purchase price | 14,601 | ||
Inforce Computing, Inc | Previously Reported | |||
Business Acquisition [Line Items] | |||
Net cash for merger | 1,581 | ||
Cash and cash equivalents acquired | 1,576 | ||
Upfront payment in accordance with agreement | 3,157 | ||
Business combination, consideration transferred, equity interests issued and issuable | 9,167 | ||
Upfront consideration in accordance with agreement | 12,324 | ||
Purchase price holdback - cash due to pre-closing holders | 413 | ||
Purchase price holdback - shares due to pre-closing holders | 1,618 | ||
Post-closing adjustments in accordance with agreement | 285 | ||
Total purchase price | 14,640 | ||
Inforce Computing, Inc | Purchase Price Allocation Measurement Period Adjustment | |||
Business Acquisition [Line Items] | |||
Post-closing adjustments in accordance with agreement | (39) | ||
Total purchase price | $ (39) |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions With Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Related Party Transaction [Line Items] | ||||
Net sales | $ 20,103 | $ 24,139 | $ 53,251 | $ 59,691 |
Affiliates | ||||
Related Party Transaction [Line Items] | ||||
Net sales | $ 20,103 | $ 24,139 | $ 53,251 | $ 59,691 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | Jul. 09, 2019 | Aug. 28, 2020 | May 28, 2021 |
Related Party Transaction [Line Items] | |||
Due from affiliates | $ 6.5 | $ 14.2 | |
Inforce Computing, Inc | Ordinary shares | Former CEO and Board Members | |||
Related Party Transaction [Line Items] | |||
Aggregate common shares received | 397,407 | ||
Common shares valued | $ 9.5 | ||
Shares issued upon closing | 337,692 | ||
Shares are subject to holdback | 59,715 |
Foreign Currency Exchange Con_2
Foreign Currency Exchange Contracts - Additional Information (Details) - Forward Contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | Aug. 28, 2020 | |
Derivative Instruments Gain Loss [Line Items] | |||||
Non-designated forward contracts resulted in derivative asset | $ 0.1 | ||||
Non-designated forward contracts resulted in derivative liability | $ 3.4 | $ 3.4 | $ 0.9 | ||
Recognized realized gains (losses) | (4.2) | $ 8.8 | (3.5) | $ 9.5 | |
Non-designated | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Net unrealized gains (losses) on change in fair value | $ 5.6 | $ 2.1 | $ 2.5 | $ 3.3 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Inventories (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 134,180 | $ 89,943 | |
Work in process | 47,697 | 16,672 | |
Finished goods | 107,085 | 56,376 | |
Total inventories | [1] | $ 288,962 | $ 162,991 |
[1] | As of May 28, 2021 and August 28, 2020, 7% and 17%, respectively, of total inventories represented inventory held under the Company's supply chain services. |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Inventories (Parenthetical) (Details) | May 28, 2021 | Aug. 28, 2020 |
Inventory Disclosure [Abstract] | ||
Percentage of inventories | 7.00% | 17.00% |
Balance Sheet Details - Sched_3
Balance Sheet Details - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |||
Financial credits | [1] | $ 20,006 | $ 6,359 |
Prepayment for VAT and other transaction taxes | 10,357 | 2,119 | |
Prepaid R&D expenses | 3,763 | 1,865 | |
Unbilled service receivables | 3,310 | 1,265 | |
Prepaid income taxes | 1,064 | 1,201 | |
Other prepaid expenses and other current assets | 14,841 | 14,181 | |
Total prepaid expenses and other current assets | $ 53,341 | $ 26,990 | |
[1] | See Note 1(i). |
Balance Sheet Details - Sched_4
Balance Sheet Details - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 269,874 | $ 162,269 |
Less accumulated depreciation and amortization | 116,613 | 107,564 |
Net property and equipment | 153,261 | 54,705 |
Office Furniture, Software, Computers and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 32,527 | 21,528 |
Manufacturing Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 170,173 | 113,035 |
Building and Building Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 51,045 | 26,498 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 16,129 | $ 1,208 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 9.1 | $ 5.4 | $ 19.5 | $ 17.6 |
Balance Sheet Details - Sched_5
Balance Sheet Details - Schedule of Other Noncurrent Assets (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |||
Deferred tax asset | $ 4,859 | $ 3,450 | |
Prepaid ICMS taxes in Brazil | [1] | 3,088 | 3,976 |
Prepaid R&D expense | 881 | 1,356 | |
Deposits on equipment | 8,170 | ||
Other | 4,999 | 3,602 | |
Total other noncurrent assets | $ 13,827 | $ 20,554 | |
[1] | See Note 1(i). |
Balance Sheet Details - Sched_6
Balance Sheet Details - Schedule of Other Current Liabilites (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 |
Payables And Accruals [Abstract] | ||
Accrued compensation | $ 27,672 | $ 16,862 |
Line of credit | 25,000 | |
Accrued variable consideration | 16,250 | |
Contract With Customer Liability Current | 15,855 | 17,264 |
Current portion of lease liabilities | 8,547 | 5,304 |
VAT and other transaction taxes payable | 6,775 | 6,143 |
Income taxes payable | $ 4,952 | $ 1,352 |
Operating Lease Liability Current Statement Of Financial Position Extensible List | us-gaap:AccruedLiabilitiesMember | us-gaap:AccruedLiabilitiesMember |
Derivative liabilities | $ 3,420 | $ 912 |
Accrued warranty reserve | 1,791 | 1,316 |
Other current liabilities | 27,746 | 8,676 |
Total other current liabilities | $ 138,008 | $ 57,829 |
Balance Sheet Details - Compone
Balance Sheet Details - Components of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,856 | $ 1,832 | $ 6,310 | $ 4,955 |
Variable lease cost | 409 | 221 | 969 | 576 |
Short-term lease cost | 106 | 36 | 221 | 252 |
Total lease costs | $ 3,371 | $ 2,089 | $ 7,500 | $ 5,783 |
Weighted-average remaining lease term | 6 years 4 months 24 days | 7 years 6 months | 6 years 4 months 24 days | 7 years 6 months |
Weighted-average discount rate | 6.80% | 7.90% | 6.80% | 7.90% |
Balance Sheet Details - Sched_7
Balance Sheet Details - Schedule of Future Minimum Undiscounted Payments under Non-Cancelable Operating Leases (Details) $ in Thousands | May 28, 2021USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Remainder of 2021 | $ 3,128 |
2022 | 10,663 |
2023 | 7,816 |
2024 | 4,536 |
2025 | 3,819 |
2026 and thereafter | 18,822 |
Total | 48,784 |
Less Short-term lease commitments | (135) |
Less imputed interest | (11,739) |
Present value of total lease liabilities | $ 36,910 |
Balance Sheet Details - Leases
Balance Sheet Details - Leases - Additional Information (Details) $ in Thousands | Mar. 01, 2021USD ($)Director | May 28, 2021USD ($) | May 29, 2020USD ($) | May 28, 2021USD ($) | May 29, 2020USD ($) |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 13,600 | $ 900 | $ 16,900 | $ 8,900 | |
Increase in non controlling interest related to business acquisition | 7,478 | ||||
Non-controlling Interest in subsidiary | |||||
Increase in non controlling interest related to business acquisition | $ 7,478 | ||||
LED Business Member | |||||
Increase in non controlling interest related to business acquisition | $ 600 | ||||
LED Business Member | Cree Joint Venture Member | |||||
Date of acquisition | Mar. 1, 2021 | ||||
Number of board of directors | Director | 5 | ||||
LED Business Member | Cree Joint Venture Member | Parent Member | |||||
Ownership interest percentage | 51.00% | ||||
LED Business Member | Cree Joint Venture Member | Non-controlling Interest in subsidiary | |||||
Ownership interest percentage calculated as non controlling interest | 49.00% |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 4,010 | $ 2,700 | $ 8,485 | $ 4,365 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
May 28, 2021 | May 28, 2021 | |
Income Tax Disclosure [Abstract] | ||
Increase (decrease) in provision for income taxes | $ 1.3 | $ 4.1 |
Long-Term Debt - Convertible Se
Long-Term Debt - Convertible Senior Notes Due 2026 - Additional Information (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Feb. 28, 2020USD ($)TradingDayBusinessDay$ / shares | May 28, 2021USD ($) | Aug. 28, 2020USD ($) | |
Debt Instrument [Line Items] | |||
Due in fiscal 2026 | $ 2,011,000 | ||
2.25% Convertible Senior Notes Due 2026 | |||
Debt Instrument [Line Items] | |||
Note interest rate | 2.25% | ||
Note maturity date | Feb. 15, 2026 | ||
Debt instrument, sinking fund provided | $ 0 | ||
Debt instrument, convertible, initial conversion rate in ordinary shares | 24.6252 | ||
Debt instrument, convertible, principal amount considered for conversion rate | $ 1,000 | $ 1,000 | |
Debt instrument, convertible, initial conversion price per ordinary share | $ / shares | $ 40.61 | ||
Debt instrument, convertible, terms of conversion feature | The holders of the Notes may convert their Notes at their option in the following circumstances: • during any fiscal quarter commencing after the fiscal quarter ending on May 28, 2021 (and only during such fiscal quarter), if the last reported sale price per ordinary share exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter; • during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the measurement period) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per ordinary share on such trading day and the conversion rate on such trading day; • upon the occurrence of certain corporate events or distributions on the Company’s ordinary shares, as provided in the Indenture; • if the Company calls such Notes for redemption; and • on or after August 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. | ||
Debt instrument, convertible, threshold consecutive trading days | TradingDay | 30 | ||
Debt instrument, convertible, threshold consecutive business days | BusinessDay | 5 | ||
Debt instrument, convertible, measurement period for conversion option | 10 days | ||
Debt instrument specified dollar amount | $ 1,000 | ||
Debt instrument, combination settlement description | The Company’s intent is to settle conversions through combination settlement with a specified dollar amount of $1,000 per $1,000 principal amount of Notes, which involves repayment of the principal portion of such Notes in cash and any excess of the conversion value over the principal amount in ordinary shares, with cash in lieu of any fractional ordinary shares | ||
Debt instrument, convertible, carrying amount of liability component | $ 197,500,000 | ||
Debt instrument, convertible, discount rate used to calculate carrying amount of liability component | 6.53% | ||
Debt instrument, convertible, carrying amount of equity component gross | $ 52,500,000 | ||
Debt issuance costs and purchaser discount | 8,000,000 | ||
Debt issuance costs for liability component | 6,300,000 | ||
Debt issuance costs for equity component | $ 1,700,000 | $ 1,700,000 | |
Debt instrument, remaining life of debt | 57 months | ||
Debt instrument, effective interest rate | 7.06% | ||
Debt instrument, convertible, carrying amount of equity component | $ 50,800,000 | ||
Debt instrument, convertible, principal amount of debt considered for estimation of fair value | 100,000 | $ 100,000 | |
2.25% Convertible Senior Notes Due 2026 | Fair Value Measurement, Inputs, Level 2 | |||
Debt Instrument [Line Items] | |||
Debt instrument, convertible, estimated fair value | 334,200,000 | $ 221,500,000 | |
2.25% Convertible Senior Notes Due 2026 | Redeem from February 21, 2023 before Maturity Date | |||
Debt Instrument [Line Items] | |||
Debt instrument, convertible, threshold trading days | TradingDay | 20 | ||
2.25% Convertible Senior Notes Due 2026 | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||
Debt instrument, convertible, threshold trading days | TradingDay | 20 | ||
2.25% Convertible Senior Notes Due 2026 | Minimum | Redeem from February 21, 2023 before Maturity Date | |||
Debt Instrument [Line Items] | |||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||
2.25% Convertible Senior Notes Due 2026 | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, convertible, product percentage of last reported sale price per ordinary share and conversion rate | 98.00% | ||
2.25% Convertible Senior Notes Due 2026 | Private Placement | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 250,000,000 | ||
Note interest rate | 2.25% | ||
2.25% Convertible Senior Notes Due 2026 | Exercise of Option to Purchase Additional Notes by Initial Purchasers | Private Placement | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 30,000,000 | ||
Convertible Notes Payable | |||
Debt Instrument [Line Items] | |||
Future minimum principal payments | 0 | ||
Due in fiscal 2026 | $ 250,000,000 |
Long-Term Debt - Schedule of Ca
Long-Term Debt - Schedule of Carrying Value of Notes (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 |
Debt Instrument [Line Items] | ||
Principal | $ 386,228 | |
Unamortized issuance costs | (5,171) | $ (5,841) |
2.25% Convertible Senior Notes Due 2026 | ||
Debt Instrument [Line Items] | ||
Principal | 250,000 | 250,000 |
Unamortized debt discount | (43,009) | (48,586) |
Unamortized issuance costs | (5,171) | (5,841) |
Net carrying amount | $ 201,820 | $ 195,573 |
Long-Term Debt - Schedule of In
Long-Term Debt - Schedule of Interest Expense Recognized Related to Notes (Details) - 2.25% Convertible Senior Notes Due 2026 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Debt Instrument [Line Items] | ||||
Contractual interest expenses | $ 1,438 | $ 1,391 | $ 4,219 | $ 1,688 |
Amortization of debt discount | 1,864 | 1,707 | 5,577 | 2,106 |
Amortization of debt issuance costs | 224 | 247 | 670 | 253 |
Total interest cost recognized | $ 3,526 | $ 3,345 | $ 10,466 | $ 4,047 |
Long-Term Debt - Capped Calls -
Long-Term Debt - Capped Calls - Additional Information (Details) - Capped Calls - USD ($) $ in Millions | Mar. 30, 2020 | May 28, 2021 | Aug. 28, 2020 |
Debt Instrument [Line Items] | |||
Initial strike price of capped call transaction | $ 40.61 | ||
Cap price of capped call transaction | 54.145 | ||
Capped calls cover, subject to anti-dilution adjustments | $ 6.2 | ||
Capped cells, expiry date | Feb. 15, 2026 | ||
Initially recognized at fair value of capped call transaction | $ 21.8 | ||
Fair value of capped calls | $ 14.1 | ||
Other Income (Expense), Net | |||
Debt Instrument [Line Items] | |||
Loss due to remeasurement of capped calls at fair value | $ 7.7 |
Long-Term Debt - Purchase Price
Long-Term Debt - Purchase Price Note - Additional Information (Details) - CreeLED Inc. $ in Millions | Oct. 18, 2020USD ($) |
Debt Instrument [Line Items] | |
Business combination, consideration transferred, equity interests issued and issuable | $ 125 |
3-Month LIBOR | |
Debt Instrument [Line Items] | |
Note interest rate | 3.00% |
Long-Term Debt - Amended Credit
Long-Term Debt - Amended Credit Agreement - Additional Information (Details) | Mar. 06, 2020USD ($) | Feb. 11, 2020USD ($) | Jun. 08, 2018USD ($) | Aug. 09, 2017USD ($) | Jun. 02, 2017USD ($) | May 28, 2021USD ($) | May 29, 2020USD ($) | Nov. 30, 2018USD ($) | May 28, 2021USD ($) | May 29, 2020USD ($) | May 29, 2020USD ($) | Aug. 29, 2019 | Feb. 01, 2021USD ($) | Aug. 28, 2020USD ($) | Feb. 28, 2020 |
Debt Instrument [Line Items] | |||||||||||||||
Interest rate at the end of period | 8.14% | ||||||||||||||
Debt instrument outstanding amount | $ 386,228,000 | $ 386,228,000 | |||||||||||||
Debt Instrument, unamortized discount | 43,010,000 | 43,010,000 | $ 48,586,000 | ||||||||||||
Prepayment premiums | $ 204,904,000 | ||||||||||||||
Loss on extinguishment of debt | $ 192,000 | 6,822,000 | $ 6,822,000 | ||||||||||||
Proceeds from borrowings under revolving line of credit | $ 114,500,000 | 60,500,000 | |||||||||||||
Incremental Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate at the end of period | 8.16% | ||||||||||||||
Amended Credit Agreement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Customary reinvestment rights | 6 months | ||||||||||||||
Percentage of net proceeds of certain asset sales or other dispositions of property | 100.00% | ||||||||||||||
Percentage of net cash proceeds of incurrence of certain debt | 100.00% | ||||||||||||||
Proceeds from IPO | $ 61,000,000 | ||||||||||||||
Loss on early repayment of long-term debt | 6,700,000 | ||||||||||||||
Percentage of consolidated EBITDA | 35.00% | ||||||||||||||
Run rate cost savings period | 24 months | ||||||||||||||
Amended Credit Agreement | 75% of Excess Cash Flow | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Percentage of excess cash flow for mandatory prepayments | 75.00% | ||||||||||||||
Amended Credit Agreement | 50% of Excess Cash Flow | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Percentage of excess cash flow for mandatory prepayments | 50.00% | ||||||||||||||
Amended Credit Agreement | 25% of Excess Cash Flow | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Percentage of excess cash flow for mandatory prepayments | 25.00% | ||||||||||||||
Amended Credit Agreement | 3-Month LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Frequency of periodic interest payments | Every one, two, three, six, nine or twelve months after the date of each borrowing | ||||||||||||||
Amended Credit Agreement | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Frequency of periodic interest payments | Last day of each calendar quarter | ||||||||||||||
Amended Credit Agreement | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Secured leverage ratio | 3.50% | ||||||||||||||
Amended Credit Agreement | Maximum | 50% of Excess Cash Flow | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Leverage ratio | 1.5 | ||||||||||||||
Amended Credit Agreement | Maximum | 25% of Excess Cash Flow | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Leverage ratio | 1 | ||||||||||||||
Amended Credit Agreement | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Retained cash proceeds from sale of assets | $ 2,000,000 | ||||||||||||||
Amended Credit Agreement | Minimum | 75% of Excess Cash Flow | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Leverage ratio | 1.5 | ||||||||||||||
Amended Credit Agreement | Minimum | 50% of Excess Cash Flow | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Leverage ratio | 1 | ||||||||||||||
Amended Credit Agreement | Term Loans | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, face amount | $ 202,900,000 | $ 165,000,000 | |||||||||||||
Note maturity date | Aug. 9, 2022 | ||||||||||||||
Repayment of outstanding debt | 208,700,000 | ||||||||||||||
Accrued interest | 3,800,000 | ||||||||||||||
Prepayment premiums | 2,000,000 | ||||||||||||||
Unamortized debt discounts and issuance costs | 4,600,000 | ||||||||||||||
Amended Credit Agreement | Term Loans | Other Income (Expense), Net | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Loss on extinguishment of debt | $ 6,600,000 | ||||||||||||||
Amended Credit Agreement | Revolving Loans | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, face amount | $ 50,000,000 | ||||||||||||||
Note maturity date | Feb. 9, 2021 | ||||||||||||||
Amended Credit Agreement | Initial Revolver Maturity Date | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument extended maturity date | Feb. 9, 2022 | ||||||||||||||
Amended Credit Agreement | Initial Revolver Maturity Date | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Secured net leverage ratio | 3 | ||||||||||||||
Amended Credit Agreement | Incremental Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, face amount | $ 60,000,000 | ||||||||||||||
Frequency of periodic principal payments | Quarterly | ||||||||||||||
Frequency of periodic principal payments, percentage | 2.50% | ||||||||||||||
Quarterly principal repayments | $ 1,500,000 | ||||||||||||||
Amended Credit Agreement | Revolving Facility | Maximum | 3-Month LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Additional spread on variable rate | 4.00% | ||||||||||||||
Amended Credit Agreement | Revolving Facility | Maximum | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Additional spread on variable rate | 3.00% | ||||||||||||||
Amended Credit Agreement | Revolving Facility | Minimum | 3-Month LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Additional spread on variable rate | 3.75% | ||||||||||||||
Amended Credit Agreement | Revolving Facility | Minimum | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Additional spread on variable rate | 2.75% | ||||||||||||||
Amended Credit Agreement | Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, face amount | 165,000,000 | $ 165,000,000 | |||||||||||||
Frequency of periodic principal payments | Quarterly | ||||||||||||||
Frequency of periodic principal payments, percentage | 2.50% | ||||||||||||||
Quarterly principal repayments | $ 4,100,000 | ||||||||||||||
Scheduled principal payments | $ 0 | $ 0 | $ 0 | $ 5,600,000 | |||||||||||
Amended Credit Agreement | Term Loan | First Year | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Principal prepayment premium percentage | 3.00% | 3.00% | |||||||||||||
Amended Credit Agreement | Term Loan | Second Year | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Principal prepayment premium percentage | 2.00% | 2.00% | |||||||||||||
Amended Credit Agreement | Term Loan | Third Year | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Principal prepayment premium percentage | 1.00% | 1.00% | |||||||||||||
Amended Credit Agreement | New Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, face amount | 165,000,000 | ||||||||||||||
Debt instrument outstanding amount | 151,000,000 | ||||||||||||||
Write off of original issue discount and debt issuance costs as an extinguishment loss | $ 15,200,000 | ||||||||||||||
Incremental Amendment | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Advisor fee | $ 600,000 | ||||||||||||||
Incremental Amendment | Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, face amount | $ 60,000,000 | ||||||||||||||
Amended Credit Agreement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt issuance costs | 8,700,000 | ||||||||||||||
Loss on extinguishment of debt | $ 200,000 | ||||||||||||||
Debt instrument variable rate | 25.00% | ||||||||||||||
First lien leverage ratio | 3.50% | ||||||||||||||
Percentage of aggregate revolving commitments | 30.00% | ||||||||||||||
Percentage of consolidated EBITDA | 20.00% | ||||||||||||||
Run rate cost savings period | 12 months | ||||||||||||||
Amended Credit Agreement | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
First lien leverage ratio | 2.25% | ||||||||||||||
Amended Credit Agreement | Maximum | 3-Month LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument variable rate | 3.75% | ||||||||||||||
Amended Credit Agreement | Maximum | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument variable rate | 2.75% | ||||||||||||||
Amended Credit Agreement | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
First lien leverage ratio | 2.25% | ||||||||||||||
Amended Credit Agreement | Minimum | 3-Month LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument variable rate | 3.50% | ||||||||||||||
Amended Credit Agreement | Minimum | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument variable rate | 2.50% | ||||||||||||||
Amended Credit Agreement | Revolving Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument outstanding amount | $ 0 | $ 0 | |||||||||||||
Debt issuance costs | 3,400,000 | ||||||||||||||
Debt Instrument, extension of maturity amount | $ 50,000,000 | ||||||||||||||
Debt instrument, extension maturity date start | Feb. 9, 2021 | ||||||||||||||
Debt instrument, extension maturity date end | Mar. 6, 2025 | ||||||||||||||
Amended Credit Agreement | Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument outstanding amount | $ 165,000,000 | $ 0 | $ 0 | ||||||||||||
Debt instrument issue discount percentage | 2.00% | ||||||||||||||
Debt Instrument, unamortized discount | $ 3,300,000 | ||||||||||||||
Debt issuance costs | $ 5,300,000 | ||||||||||||||
Amended Credit Agreement | Term Loan | 3-Month LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Additional spread on variable rate | 6.25% | ||||||||||||||
Amended Credit Agreement | Term Loan | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Additional spread on variable rate | 5.25% | ||||||||||||||
Amended Credit Agreement | Letter of Credit | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from borrowings under revolving line of credit | $ 10,000,000 | ||||||||||||||
Amended Credit Agreement | Asset-Based Revolving Facilities | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Revolving credit facilities | $ 150,000,000 | ||||||||||||||
Senior Secured Credit Agreement | Revolving Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument outstanding amount | 0 | ||||||||||||||
Senior Secured Credit Agreement | Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument outstanding amount | $ 0 |
Long-Term Debt - ABL Credit Agr
Long-Term Debt - ABL Credit Agreement - Additional Information (Details) - USD ($) | Dec. 23, 2020 | May 28, 2021 | Aug. 28, 2020 |
Debt Instrument [Line Items] | |||
Debt instrument outstanding amount | $ 386,228,000 | ||
ABL Credit Agreement | |||
Debt Instrument [Line Items] | |||
Debt instrument outstanding amount | $ 25,000 | $ 0 | |
ABL Credit Agreement | Asset-Based Revolving Facilities | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 100,000,000 | ||
Debt instrument option to increase face amount | 150,000,000 | ||
Revolving credit facility amount available for issuance of letters of credit | 30,000,000 | ||
Revolving credit facility amount available for swingline loans | $ 15,000,000 | ||
Borrower fixed charge coverage ratio | 1.00% | ||
Global fixed charge coverage ratio | 1.00% | ||
Note maturity date | Dec. 23, 2023 | ||
Debt instrument, covenant description | The ABL Credit Agreement contains customary affirmative and negative covenants and restrictions typical for a financing of this nature that, among other things, restrict the ABL Loan Parties’ ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, enter into certain transactions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, and transfer and sell material assets and merge or consolidate. In the event that certain minimum availability thresholds are not met on the last day of any period of four fiscal quarters, the ABL Borrowers will be required to maintain (i) a minimum Borrower Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) of not less than 1.0 to 1.0, and (ii) a minimum Global Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) of not less than 1.0 to 1.0, in each case, as of such last day of any period of four fiscal quarters. Subject to the Intercreditor Agreement (as defined below), non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the ABL Credit Agreement becoming immediately due and payable and termination of the commitments available thereunder. | ||
ABL Credit Agreement | Asset-Based Revolving Facilities | Minimum | |||
Debt Instrument [Line Items] | |||
Line of credit facility unused capacity commitment fee percentage | 0.25% | ||
Line of credit facility average daily revolver usage percentage | 50.00% | ||
ABL Credit Agreement | Asset-Based Revolving Facilities | Maximum | |||
Debt Instrument [Line Items] | |||
Line of credit facility unused capacity commitment fee percentage | 0.35% | ||
Line of credit facility average daily revolver usage percentage | 50.00% | ||
ABL Credit Agreement | Greater than $50 million | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument average daily availability | $ 50,000,000 | ||
ABL Credit Agreement | Greater than $50 million | 3-Month LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument variable rate | 1.75% | ||
ABL Credit Agreement | Greater than $50 million | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument variable rate | 0.75% | ||
ABL Credit Agreement | Between $50 and $35 million | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument average daily availability | $ 35,000,000 | ||
ABL Credit Agreement | Between $50 and $35 million | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument average daily availability | $ 50,000,000 | ||
ABL Credit Agreement | Between $50 and $35 million | 3-Month LIBOR | |||
Debt Instrument [Line Items] | |||
Debt instrument variable rate | 2.00% | ||
ABL Credit Agreement | Between $50 and $35 million | Base Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument variable rate | 1.00% | ||
ABL Credit Agreement | Less than 35 million | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument average daily availability | $ 35,000,000 | ||
ABL Credit Agreement | Less than 35 million | 3-Month LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument variable rate | 2.25% | ||
ABL Credit Agreement | Less than 35 million | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument variable rate | 1.25% |
Long-Term Debt - FINEP Credit A
Long-Term Debt - FINEP Credit Agreement - Additional Information (Details) $ in Thousands, R$ in Millions | Nov. 30, 2020 | Dec. 31, 2020USD ($) | May 28, 2021USD ($) | May 28, 2021BRL (R$) | Dec. 31, 2020BRL (R$) | Dec. 30, 2020USD ($) | Dec. 30, 2020BRL (R$) | Aug. 28, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||
Debt instrument outstanding amount | $ 386,228 | |||||||
FINEP Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 18,900 | R$ 102.2 | ||||||
Debt instrument fixed interest rate | 2.80% | 2.80% | ||||||
Percentage of unused commitment fees | 0.10% | |||||||
Percentage of administration fee | 1.09% | |||||||
Line of credit facility payable interest, description | term loan payable interest only for the first 18 months | |||||||
Frequency of periodic principal payments | 67 equal monthly installments | |||||||
Debt instrument payment term, beginning | 2022-06 | |||||||
Debt instrument payment term, ending | 2027-12 | |||||||
Debt instrument guarantee and cost, description | Banco Votorantim S.A. and Banco Alfa de Investimento S.A. each guarantee 49% and 51% respectively of SMART Brazil’s obligations under the FINEP Credit Agreement which guarantees are backed by unsecured loan agreements with SMART Brazil and SMART do Brazil. The guarantees to FINEP need to be renewed annually. Banco Alfa de Investimento S.A. and Banco Votorantim S.A charge 1.3% and 1.7%, respectively per annum, on the aggregate of the total outstanding principal balance plus any amount remaining available to be borrowed under the FINEP Credit Agreement, plus commissions, administrative fees, interest and contractual penalties. | |||||||
Received advance of debt | $ 11,700 | R$ 60.7 | ||||||
Debt instrument outstanding amount | 11,228 | R$ 60.7 | $ 0 | |||||
Fair value of debt amount outstanding | 10,100 | $ 0 | ||||||
FINEP Credit Agreement | Level 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Unobservable Inputs | $ 0 |
Long-Term Debt - BNDES Credit A
Long-Term Debt - BNDES Credit Agreements - Additional Information (Details) R$ in Millions | 9 Months Ended | |||||
May 28, 2021USD ($) | Aug. 28, 2020USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014BRL (R$) | Dec. 31, 2013USD ($) | Dec. 31, 2013BRL (R$) | |
Debt Instrument [Line Items] | ||||||
Debt instrument outstanding amount | $ 386,228,000 | |||||
BNDES 2013 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 9,700,000 | R$ 50.6 | ||||
Minimum cash balances of maximum aggregate balances of principal, interest and fees outstanding | 11.85% | 11.85% | ||||
Frequency of periodic principal payments | 48 equal monthly installments | |||||
Debt instrument payment term, beginning | Aug. 15, 2015 | |||||
Debt instrument payment term, ending | Jul. 15, 2019 | |||||
Debt instrument outstanding amount | $ 0 | $ 0 | ||||
Line of credit facility unused capacity commitment fee percentage | 0.10% | |||||
BNDES 2014 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 10,100,000 | R$ 52.8 | ||||
Frequency of periodic principal payments | 48 equal monthly installments | |||||
Debt instrument payment term, beginning | Aug. 15, 2016 | |||||
Debt instrument payment term, ending | Jul. 15, 2020 | |||||
Debt instrument fixed interest rate | 4.00% | |||||
Percentage of face amount of loan facility required for loan fee | 0.30% |
Long-Term Debt - Summary of Con
Long-Term Debt - Summary of Convertible Senior Notes, due 2026,Seller Note, due 2023, FINEP Credit Agreement and ABL Credit Agreement (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 |
Debt Instrument [Line Items] | ||
Debt instrument outstanding amount | $ 386,228 | |
Debt Instrument, unamortized discount | 43,010 | $ 48,586 |
Unamortized debt issuance costs | 5,171 | 5,841 |
Long-term debt | 338,047 | 195,573 |
Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Debt instrument outstanding amount | 250,000 | $ 250,000 |
Purchase Price Note | ||
Debt Instrument [Line Items] | ||
Debt instrument outstanding amount | 125,000 | |
FINEP loan | ||
Debt Instrument [Line Items] | ||
Debt instrument outstanding amount | $ 11,228 |
Long-Term Debt - Summary of Fut
Long-Term Debt - Summary of Future Minimum Principal Payments (Details) R$ in Millions | May 28, 2021USD ($) | May 28, 2021BRL (R$) | Aug. 28, 2020USD ($) |
Debt Instrument [Line Items] | |||
2022 | $ 335,000 | ||
2023 | 127,011,000 | ||
2024 | 2,011,000 | ||
2025 | 2,011,000 | ||
2026 | 252,011,000 | ||
2027 | 2,011,000 | ||
2028 | 838,000 | ||
Total | 386,228,000 | ||
Convertible Notes Payable | |||
Debt Instrument [Line Items] | |||
Remainder of fiscal 2021 | 0 | ||
2026 | 250,000,000 | ||
2027 | 250,000,000 | ||
Total | 250,000,000 | $ 250,000,000 | |
Purchase Price Note | |||
Debt Instrument [Line Items] | |||
2023 | 125,000,000 | ||
Total | 125,000,000 | ||
FINEP Credit Agreement | |||
Debt Instrument [Line Items] | |||
2022 | 335,000 | ||
2023 | 2,011,000 | ||
2024 | 2,011,000 | ||
2025 | 2,011,000 | ||
2026 | 2,011,000 | ||
2027 | 2,011,000 | ||
2028 | 838,000 | ||
Total | $ 11,228,000 | R$ 60.7 | $ 0 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) $ in Millions | May 28, 2021USD ($) |
Contingent Consideration Related to SMART EC Acquisition | Level 3 | |
Liabilities | |
Fair value of liabilities | $ 44.5 |
Financial Instruments - Assets
Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | May 28, 2021 | Aug. 28, 2020 | |
Fair Value, Measurements, Recurring Basis | |||
Assets | |||
Assets measured at fair value | $ 188,992 | $ 150,923 | |
Liabilities | |||
Liabilities measured at fair value | 47,920 | 912 | |
Fair Value, Measurements, Recurring Basis | Acquisition-related contingent consideration | |||
Liabilities | |||
Liabilities measured at fair value | [1] | 44,500 | |
Fair Value, Measurements, Recurring Basis | Cash and Cash Equivalents | |||
Assets | |||
Assets measured at fair value | 188,992 | 150,811 | |
Fair Value, Measurements, Recurring Basis | Derivative Financial Instruments, Liabilities | |||
Liabilities | |||
Liabilities measured at fair value | [2] | 3,420 | 912 |
Fair Value, Measurements, Recurring Basis | Derivative Financial Instruments | |||
Assets | |||
Assets measured at fair value | [3] | 112 | |
Level 1 | Fair Value, Measurements, Recurring Basis | |||
Assets | |||
Assets measured at fair value | 188,992 | 150,811 | |
Level 1 | Fair Value, Measurements, Recurring Basis | Cash and Cash Equivalents | |||
Assets | |||
Assets measured at fair value | 188,992 | 150,811 | |
Level 2 | Fair Value, Measurements, Recurring Basis | |||
Assets | |||
Assets measured at fair value | 112 | ||
Liabilities | |||
Liabilities measured at fair value | 3,420 | 912 | |
Level 2 | Fair Value, Measurements, Recurring Basis | Derivative Financial Instruments, Liabilities | |||
Liabilities | |||
Liabilities measured at fair value | [2] | 3,420 | 912 |
Level 2 | Fair Value, Measurements, Recurring Basis | Derivative Financial Instruments | |||
Assets | |||
Assets measured at fair value | [3] | $ 112 | |
Level 3 | Acquisition-related contingent consideration | |||
Liabilities | |||
Liabilities measured at fair value | 44,500 | ||
Level 3 | Fair Value, Measurements, Recurring Basis | |||
Liabilities | |||
Liabilities measured at fair value | 44,500 | ||
Level 3 | Fair Value, Measurements, Recurring Basis | Acquisition-related contingent consideration | |||
Liabilities | |||
Liabilities measured at fair value | [1] | $ 44,500 | |
[1] | Included in other long-term liabilities on the Company’s condensed consolidated balance sheets. | ||
[2] | Included in other current liabilities on the Company’s condensed consolidated balance sheets - see Note 4. | ||
[3] | Included in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheets - see Note 4. |
Share-Based Compensation and _3
Share-Based Compensation and Employee Benefit Plans - Additional Information (Details) $ / shares in Units, $ in Millions | Jan. 07, 2021USD ($)$ / sharesshares | Aug. 26, 2011shares | Aug. 31, 2020 | Nov. 29, 2019StockOption | Mar. 31, 2018TradingDayStockOption | Jan. 31, 2018shares | May 28, 2021USD ($)$ / sharesshares | Nov. 27, 2020USD ($) | Aug. 28, 2020USD ($)$ / sharesshares | May 29, 2020USD ($)$ / shares | Nov. 29, 2019USD ($) | May 28, 2021USD ($)$ / sharesshares | May 29, 2020USD ($)$ / shares | Aug. 28, 2020$ / sharesshares | Aug. 25, 2017 | Sep. 23, 2014 | Feb. 15, 2021shares | Feb. 12, 2021shares | Feb. 01, 2019shares |
Stock options: | |||||||||||||||||||
Expected volatility | 57.10% | 57.10% | |||||||||||||||||
Risk-free interest rate | 0.40% | 0.49% | |||||||||||||||||
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||||
Ordinary shares, par value | $ / shares | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | |||||||||||||||
Employees maximum contribution for annual eligible compensation under 401(k) plan | 60.00% | ||||||||||||||||||
Contribution made by company under 401(k) plan | $ 1 | $ 0.7 | $ 2.4 | $ 1.8 | |||||||||||||||
Silver Lake Partners III Cayman (AIV III), L.P., Silver Lake Technology Investors III Cayman, L.P., Silver Lake Sumeru Fund Cayman, L.P. and Silver Lake Technology Investors Sumeru Cayman, L.P. | |||||||||||||||||||
Stock options: | |||||||||||||||||||
Number of shares repurchase | shares | 1,100,000 | ||||||||||||||||||
Ordinary shares, par value | $ / shares | $ 0.03 | ||||||||||||||||||
Purchase price per share | $ / shares | $ 40.30 | ||||||||||||||||||
Aggregate consideration | $ 44.3 | ||||||||||||||||||
Transaction closing date | Jan. 15, 2021 | ||||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||||
Ordinary shares reserved for issuance | shares | 806,563 | 683,184 | 806,563 | 683,184 | |||||||||||||||
Stock options: | |||||||||||||||||||
Number of shares authorized | shares | 650,000 | ||||||||||||||||||
Fair market value percentage of ordinary share | 85.00% | ||||||||||||||||||
Purchase plan termination period | 2028-01 | ||||||||||||||||||
Share issued under purchase plan | shares | 443,437 | 266,816 | |||||||||||||||||
Performance Based Stock Options | |||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||||
Number of Performance-based stock options granted | StockOption | 2 | ||||||||||||||||||
Share based compensation threshold trading days | TradingDay | 30 | ||||||||||||||||||
Number of performance based stock options cancelled | StockOption | 1 | ||||||||||||||||||
Stock options: | |||||||||||||||||||
Share-based compensation expense | $ 2 | ||||||||||||||||||
Reversal of share-based compensation expense | $ 2.3 | ||||||||||||||||||
Expected volatility | 56.07% | 46.29% | |||||||||||||||||
Risk-free interest rate | 0.34% | 2.75% | |||||||||||||||||
Expected dividends | 0.00% | ||||||||||||||||||
Performance-based Restricted Share Unit Award (PSU) | |||||||||||||||||||
Stock options: | |||||||||||||||||||
Reversal of share-based compensation expense | $ 0.8 | ||||||||||||||||||
Performance-based Restricted Share Award (RSA) | |||||||||||||||||||
Stock options: | |||||||||||||||||||
Additional share-based compensation expense | $ 5.8 | $ 5.8 | |||||||||||||||||
2017 Share Incentive Plan (SGH Plan) | |||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||||
Ordinary shares reserved for issuance | shares | 5,684,558 | 4,545,631 | 5,684,558 | 4,545,631 | 1,000,000 | 1,500,000 | |||||||||||||
Ordinary shares available for grant | shares | 1,911,550 | 1,432,721 | 1,911,550 | 1,432,721 | |||||||||||||||
Stock options: | |||||||||||||||||||
Weighted average fair value of options granted | $ / shares | $ 0 | $ 9.76 | $ 13.30 | $ 9.89 | |||||||||||||||
Total intrinsic value of employee stock options exercised | $ 4 | $ 0.1 | $ 6.4 | $ 2.6 | |||||||||||||||
Unrecognized compensation costs related to stock options | $ 8.1 | 8.1 | |||||||||||||||||
2017 Share Incentive Plan (SGH Plan) | Options | |||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||||
Vesting period | 4 years | ||||||||||||||||||
Expiration term | 10 years | ||||||||||||||||||
Stock options: | |||||||||||||||||||
Unrecognized compensation costs recognition period | 1 year 9 months 18 days | ||||||||||||||||||
2017 Share Incentive Plan (SGH Plan) | Options | After August 26, 2011 and Before September 23, 2014 | |||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||||
Expiration term | 8 years | ||||||||||||||||||
2017 Share Incentive Plan (SGH Plan) | RSUs | |||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||||
Vesting period | 4 years | ||||||||||||||||||
Expiration term | 10 years | ||||||||||||||||||
2017 Share Incentive Plan (SGH Plan) | RSAs, RSUs and PSUs | |||||||||||||||||||
Stock options: | |||||||||||||||||||
Share-based compensation expense | $ 6.1 | 2.9 | $ 18.3 | 7.3 | |||||||||||||||
Unrecognized compensation costs recognition period | 3 years 2 months 19 days | ||||||||||||||||||
Total fair value of shares vested | 7.3 | $ 1.5 | $ 18.7 | $ 7.4 | |||||||||||||||
Unrecognized compensation costs related to awards | $ 86.9 | $ 86.9 | |||||||||||||||||
Inducement Plan | |||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||||
Ordinary shares available for grant | shares | 882,713 | 2,000,000 |
Share-Based Compensation and _4
Share-Based Compensation and Employee Benefit Plans - Assumptions Used to Value Stock Options (Details) | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Stock options: | ||||
Expected term (years) | 6 years 3 months | 6 years 3 months | 6 years 3 months | |
Expected volatility | 57.10% | 57.10% | ||
Expected volatility, minimum | 46.10% | |||
Expected volatility, maximum | 57.10% | |||
Risk-free interest rate | 0.40% | 0.49% | ||
Risk-free interest rate, minimum | 0.40% | |||
Risk-free interest rate, maximum | 1.68% | |||
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Share-Based Compensation and _5
Share-Based Compensation and Employee Benefit Plans - Summary of Options Activity (Details) - 2017 Share Incentive Plan (SGH Plan) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
May 28, 2021USD ($)$ / sharesshares | Aug. 28, 2020USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Options outstanding, Shares, Beginning Balance | shares | 2,109 | |
Options granted, Shares | shares | 250 | |
Options exercised, Shares | shares | (353) | |
Options cancelled, Shares | shares | (27) | |
Options outstanding, Shares, Ending Balance | shares | 1,979 | 2,109 |
Options exercisable, Shares | shares | 978 | |
Options outstanding, Weighted average per share exercise price, Beginning Balance | $ / shares | $ 29.45 | |
Options granted, Weighted average per share exercise price | $ / shares | 26.99 | |
Options exercised, Weighted average per share exercise price | $ / shares | 27.03 | |
Options cancelled, Weighted average per share exercise price | $ / shares | 32.09 | |
Options outstanding, Weighted average per share exercise price, Ending Balance | $ / shares | 29.53 | $ 29.45 |
Options exercisable, Weighted average per share exercise price | $ / shares | $ 28.76 | |
Options outstanding, Weighted average remaining contractual term (years) | 6 years 7 months 6 days | 6 years 11 months 12 days |
Options exercisable, Weighted average remaining contractual term (years) | 5 years 11 months 1 day | |
Options outstanding, Aggregate intrinsic value | $ | $ 35,352 | $ 7,225 |
Options exercisable, Aggregate intrinsic value | $ | $ 18,235 |
Share-Based Compensation and _6
Share-Based Compensation and Employee Benefit Plans - Summary of Changes in RSAs and RSUs Outstanding (Details) - 2017 Share Incentive Plan (SGH Plan) - RSAs and RSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | |
May 28, 2021 | Aug. 28, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Awards outstanding, Shares, Beginning Balance | 1,273 | |
Awards granted, Shares | 2,256 | |
Awards vested and released, Shares | (537) | |
Awards forfeited and cancelled, Shares | (80) | |
Awards outstanding, Shares, Ending Balance | 2,912 | |
Awards outstanding, Weighted average grant date fair value per share, Beginning Balance | $ 26.19 | |
Awards granted, Weighted average grant date fair value per share | 35.30 | |
Awards vested and released, Weighted average grant date fair value per share | 26.25 | |
Awards forfeited and cancelled, Weighted average grant date fair value per share | 34.52 | |
Awards outstanding, Weighted average grant date fair value per share | $ 33.01 | |
Awards outstanding, Aggregate intrinsic value | $ 138,015 | $ 31,721 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) R$ in Millions | Aug. 21, 2013USD ($) | May 28, 2021USD ($) | May 29, 2020USD ($) | May 28, 2021USD ($) | May 29, 2020USD ($) | May 28, 2021BRL (R$) | Dec. 12, 2013USD ($) | Dec. 12, 2013BRL (R$) | Aug. 30, 2013USD ($) | Mar. 06, 2012USD ($) | Mar. 06, 2012BRL (R$) | Feb. 23, 2012USD ($) | Feb. 23, 2012BRL (R$) |
Loss Contingencies [Line Items] | |||||||||||||
Rental expense | $ 3,400,000 | $ 2,100,000 | $ 7,500,000 | $ 5,800,000 | |||||||||
Provision for any potential loss | 0 | 0 | |||||||||||
SMART Brazil | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Tax assessment amount | $ 1,100,000 | $ 1,100,000 | R$ 5.8 | $ 700,000 | R$ 3.6 | $ 21,700,000 | R$ 117.0 | ||||||
Administrative penalty amount | $ 1,100,000 | R$ 6.0 | |||||||||||
Percentage of administrative penalty | 1.00% | 1.00% | |||||||||||
SMART Brazil | DRAM | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Percentage of import duty on product classification | 0.00% | 0.00% | |||||||||||
SMART Brazil | Flash | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Percentage of import duty on product classification | 0.00% | 0.00% | |||||||||||
SanDisk | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Indemnification obligation deductible amount | $ 1,800,000 | ||||||||||||
Indemnification obligation cap | $ 60,900,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Reconcile Changes in Accrued Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Beginning accrued warranty reserve | $ 1,255 | $ 1,608 | $ 1,316 | $ 1,770 |
Warranty claims | (334) | (452) | (868) | (1,588) |
LED business acquired warranty reserves | 427 | 427 | ||
Provision for product warranties | 443 | 181 | 916 | 1,155 |
Ending accrued warranty reserve | $ 1,791 | $ 1,337 | $ 1,791 | $ 1,337 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) | 9 Months Ended |
May 28, 2021Reportingunit | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segment and Geographic Inform_4
Segment and Geographic Information - Summary of Operating Results Net of Inter-Segment Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | May 29, 2020 | |||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | $ 437,728 | [1] | $ 281,287 | [1] | $ 1,033,433 | [1] | $ 825,347 | [1] | $ 825,347 |
Adjusted Gross Profit | $ 95,688 | $ 55,639 | $ 209,043 | $ 164,318 | |||||
Adjusted Gross Margin | 22.00% | 20.00% | 20.00% | 20.00% | |||||
Brazil Products | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | $ 118,496 | $ 92,701 | $ 326,808 | $ 284,400 | |||||
Adjusted Gross Profit | $ 21,116 | $ 19,685 | $ 54,646 | $ 50,840 | |||||
Adjusted Gross Margin | 18.00% | 21.00% | 17.00% | 18.00% | |||||
Specialty Memory Products | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | $ 121,620 | $ 127,700 | $ 357,729 | $ 342,685 | |||||
Adjusted Gross Profit | $ 22,299 | $ 21,047 | $ 59,118 | $ 61,166 | |||||
Adjusted Gross Margin | 18.00% | 16.00% | 17.00% | 18.00% | |||||
IPS | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | $ 95,857 | $ 60,886 | $ 247,141 | $ 198,262 | |||||
Adjusted Gross Profit | $ 22,139 | $ 14,907 | $ 65,145 | $ 52,312 | |||||
Adjusted Gross Margin | 23.00% | 24.00% | 26.00% | 26.00% | |||||
LED | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | $ 101,755 | $ 101,755 | |||||||
Adjusted Gross Profit | $ 30,134 | $ 30,134 | |||||||
Adjusted Gross Margin | 30.00% | 30.00% | |||||||
[1] | Includes sales to affiliates of $20,103 and $53,251 in the three and nine months ended May 28, 2021 and $24,139 and $59,691 for the same periods ended May 29, 2020, respectively (see Note 3). |
Segment and Geographic Inform_5
Segment and Geographic Information - Summary of Operating Results Net of Inter-Segment Revenues (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | |
Segment Reporting Information [Line Items] | ||||
Corporate expenses | $ 8 | $ 100 | $ 15 | $ 200 |
LED | ||||
Segment Reporting Information [Line Items] | ||||
Net Inventory Adjustment | $ 7,100 |
Segment and Geographic Inform_6
Segment and Geographic Information - Summary of Net Sales and Property and Equipment by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | May 29, 2020 | Aug. 28, 2020 | |||||
Segment Reporting Information [Line Items] | ||||||||||
Geographic Net Sales | $ 437,728 | [1] | $ 281,287 | [1] | $ 1,033,433 | [1] | $ 825,347 | [1] | $ 825,347 | |
Net sales | 437,728 | [1] | 281,287 | [1] | 1,033,433 | [1] | 825,347 | [1] | $ 825,347 | |
Property and equipment, net | 153,261 | 153,261 | $ 54,705 | |||||||
U.S. | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Geographic Net Sales | 179,478 | 131,596 | 423,576 | 362,215 | ||||||
Net sales | 179,478 | 131,596 | 423,576 | 362,215 | ||||||
Property and equipment, net | 24,924 | 24,924 | 11,635 | |||||||
Ship-to-Regions Brazil | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Geographic Net Sales | 119,112 | 92,687 | 327,456 | 285,059 | ||||||
Net sales | 119,112 | 92,687 | 327,456 | 285,059 | ||||||
Europe | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Geographic Net Sales | 25,849 | 8,575 | 54,461 | 29,917 | ||||||
Net sales | 25,849 | 8,575 | 54,461 | 29,917 | ||||||
Other | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Geographic Net Sales | 39,623 | 25,232 | 97,769 | 80,529 | ||||||
Net sales | 39,623 | 25,232 | 97,769 | 80,529 | ||||||
Property and equipment, net | 2,105 | 2,105 | 2,213 | |||||||
Brazil | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Property and equipment, net | 53,782 | 53,782 | 30,648 | |||||||
Malaysia | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Property and equipment, net | 10,613 | 10,613 | $ 10,209 | |||||||
China | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Geographic Net Sales | 73,666 | 23,197 | 130,171 | 67,627 | ||||||
Net sales | 73,666 | $ 23,197 | 130,171 | $ 67,627 | ||||||
Property and equipment, net | $ 61,837 | $ 61,837 | ||||||||
[1] | Includes sales to affiliates of $20,103 and $53,251 in the three and nine months ended May 28, 2021 and $24,139 and $59,691 for the same periods ended May 29, 2020, respectively (see Note 3). |
Major Customers - Summary of Ne
Major Customers - Summary of Net Sales to Major Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | May 29, 2020 | ||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | $ 437,728 | [1] | $ 281,287 | [1] | $ 1,033,433 | [1] | $ 825,347 | [1] | $ 825,347 | |
Net sales | Customer Concentration Risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | $ 107,752 | $ 73,865 | $ 143,019 | $ 234,681 | ||||||
Percentage of net sales | 25.00% | 26.00% | 14.00% | 29.00% | ||||||
Customer A | Net sales | Customer Concentration Risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | [2] | $ 61,177 | ||||||||
Percentage of net sales | [2] | 14.00% | ||||||||
Customer B | Net sales | Customer Concentration Risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | [3] | $ 46,575 | ||||||||
Percentage of net sales | [3] | 11.00% | ||||||||
Customer C | Net sales | Customer Concentration Risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | [4] | $ 38,778 | $ 143,019 | $ 144,847 | ||||||
Percentage of net sales | [4] | 14.00% | 14.00% | 18.00% | ||||||
Customer D | Net sales | Customer Concentration Risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | [3] | $ 35,087 | $ 89,834 | |||||||
Percentage of net sales | [3] | 12.00% | 11.00% | |||||||
[1] | Includes sales to affiliates of $20,103 and $53,251 in the three and nine months ended May 28, 2021 and $24,139 and $59,691 for the same periods ended May 29, 2020, respectively (see Note 3). | |||||||||
[2] | IPS customer | |||||||||
[3] | Brazil customer | |||||||||
[4] | Specialty customer |
Major Customers - Additional In
Major Customers - Additional Information (Details) - Accounts Receivable - Customer Concentration Risk | 9 Months Ended | 12 Months Ended |
May 28, 2021 | Aug. 28, 2020 | |
Customer E | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.00% | 19.00% |
Customer F | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 13.00% | 15.00% |
Customer G | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 13.00% |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) | 9 Months Ended |
May 28, 2021$ / shares | |
Earnings Per Share [Abstract] | |
Dilutive impact of conversion price per share | $ 40.61 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
May 28, 2021 | Feb. 26, 2021 | Nov. 27, 2020 | May 29, 2020 | Feb. 28, 2020 | Nov. 29, 2019 | May 28, 2021 | May 29, 2020 | |
Numerator: | ||||||||
Net income (loss) | $ (6,654) | $ 5,844 | $ 2,027 | $ 825 | $ (9,720) | $ 224 | $ 1,217 | $ (8,671) |
Net income attributable to noncontrolling interest | 557 | 557 | ||||||
Net income (loss) attributable to SGH | $ (7,211) | $ 825 | $ 660 | $ (8,671) | ||||
Weighted average shares outstanding: | ||||||||
Basic | 24,035 | 24,066 | 24,843 | 23,895 | ||||
Diluted | 24,035 | 24,431 | 25,902 | 23,895 | ||||
Earnings per share: | ||||||||
Basic | $ (0.30) | $ 0.03 | $ 0.03 | $ (0.36) | ||||
Diluted | $ (0.30) | $ 0.03 | $ 0.03 | $ (0.36) | ||||
Anti-dilutive weighted shares excluded from the computation of diluted earnings per share | 233 | 7,892 | 7,551 | 7,236 |
Other Income (Expense), Net - D
Other Income (Expense), Net - Detail of Other Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 28, 2021 | May 29, 2020 | May 28, 2021 | May 29, 2020 | May 29, 2020 | |
Other Income And Expenses [Abstract] | |||||
Foreign exchange gains (losses) | $ (994) | $ (484) | $ (1,195) | $ (2,586) | |
Loss on capped call mark-to-market adjustment | (2,924) | $ (7,719) | (7,719) | ||
Loss on early extinguishment of debt | (192) | (6,822) | (6,822) | ||
Other | 505 | 155 | 8 | 456 | |
Total other expense, net | $ (489) | $ (3,445) | $ (1,187) | $ (16,671) | $ (16,671) |