Document and Entity Information
Document and Entity Information Document - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 27, 2021 | Oct. 08, 2021 | Feb. 26, 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 | Large Accelerated Filer | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Document Type | 10-K | ||
Trading Symbol | SGH | ||
Document Period End Date | Aug. 27, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Public Float | $ 737.9 | ||
Entity Common Stock, Shares Outstanding | 24,377,423 | ||
Title of 12(b) Security | Ordinary shares, $0.03 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-38102 | ||
Entity Incorporation, State or Country Code | E9 | ||
Entity Tax Identification Number | 98-1013909 | ||
Entity Address, Address Line One | c/o Maples Corporate Services Limited | ||
Entity Address, Address Line Two | P.O. Box 309 | ||
Entity Address, City or Town | Grand Cayman | ||
Entity Address, Country | KY | ||
Entity Address, Postal Zip Code | KY1-1104 | ||
City Area Code | 510 | ||
Local Phone Number | 623-1231 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for the 2021 General Meeting are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended August 27, 2021. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 | |
Assets | |||
Cash and cash equivalents | $ 222,986 | $ 150,811 | |
Accounts receivable, net | [1] | 313,393 | 215,918 |
Inventories | 363,601 | 162,991 | |
Other current assets | 50,838 | 26,990 | |
Total current assets | 950,818 | 556,710 | |
Property and equipment, net | 156,266 | 54,705 | |
Operating lease right-of-use assets | 40,869 | 25,013 | |
Intangible assets, net | 101,073 | 55,671 | |
Goodwill | 74,255 | 73,955 | |
Other noncurrent assets | 21,517 | 20,554 | |
Total assets | 1,344,798 | 786,608 | |
Liabilities and Equity | |||
Accounts payable and accrued expenses | 484,107 | 253,363 | |
Current debt | 25,354 | ||
Other current liabilities | 74,337 | 29,126 | |
Total current liabilities | 583,798 | 282,489 | |
Long-term debt | 340,484 | 195,573 | |
Acquisition-related contingent consideration | 60,500 | ||
Noncurrent operating lease liabilities | 32,419 | 20,829 | |
Other noncurrent liabilities | 8,673 | 5,613 | |
Total liabilities | 1,025,874 | 504,504 | |
Commitments and contingencies | |||
SMART Global Holdings shareholders’ equity: | |||
Ordinary shares, $0.03 par value. Authorized 200,000 shares; 25,770 issued and 24,368 outstanding as of August 27, 2021; 24,568 issued and 24,419 outstanding as of August 28, 2020 | 773 | 737 | |
Additional paid-in-capital | 396,851 | 348,163 | |
Retained earnings | 184,787 | 163,477 | |
Treasury shares, 1,402 and 149 shares held as of August 27, 2021 and August 28, 2020, respectively | (50,545) | (2,032) | |
Accumulated other comprehensive income (loss) | (221,615) | (228,241) | |
Total SGH shareholders’ equity | 310,251 | 282,104 | |
Noncontrolling interest in subsidiary | 8,673 | ||
Total equity | 318,924 | 282,104 | |
Total liabilities and equity | $ 1,344,798 | $ 786,608 | |
[1] | Receivables from related parties were $14,057 and $6,546 as of August 27, 2021 and August 28, 2020, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Statement Of Financial Position [Abstract] | ||
Ordinary shares, par value | $ 0.03 | $ 0.03 |
Ordinary shares, authorized | 200,000,000 | 200,000,000 |
Ordinary shares, issued | 25,770,000 | 24,568,000 |
Ordinary shares, outstanding | 24,368,000 | 24,419,000 |
Treasury shares | 1,402,000 | 149,000 |
Receivables from related parties | $ 14,057 | $ 6,546 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | ||
Income Statement [Abstract] | ||||
Net sales | [1] | $ 1,501,142 | $ 1,122,377 | $ 1,211,999 |
Cost of sales | 1,192,762 | 905,981 | 974,472 | |
Gross profit | 308,380 | 216,396 | 237,527 | |
Operating expenses: | ||||
Research and development | 49,274 | 52,056 | 47,920 | |
Selling, general and administrative | 169,455 | 119,523 | 103,226 | |
Change in fair value of contingent consideration | 32,400 | (2,700) | ||
Other operating (income) expense | 2,054 | 3,487 | ||
Total operating expenses | 253,183 | 175,066 | 148,446 | |
Operating income | 55,197 | 41,330 | 89,081 | |
Non-operating (income) expense: | ||||
Interest expense, net | 17,600 | 15,000 | 20,716 | |
Other non-operating (income) expense | (375) | 16,970 | 2,161 | |
Total other non-operating expense | 17,225 | 31,970 | 22,877 | |
Income before taxes | 37,972 | 9,360 | 66,204 | |
Income tax provision | 15,466 | 10,503 | 14,872 | |
Net income (loss) | 22,506 | (1,143) | 51,332 | |
Net income attributable to noncontrolling interest | 1,196 | |||
Net income (loss) attributable to SGH | $ 21,310 | $ (1,143) | $ 51,332 | |
Earnings (loss) per share: | ||||
Basic | $ 0.88 | $ (0.05) | $ 2.24 | |
Diluted | $ 0.83 | $ (0.05) | $ 2.19 | |
Shares used in per share calculations: | ||||
Basic | 24,279 | 23,994 | 22,959 | |
Diluted | 25,792 | 23,994 | 23,468 | |
[1] | Sales to related parties were $76,488, $75,837 and $117,403 in 2021, 2020 and 2019, respectively. |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Income Statement [Abstract] | |||
Sales to related parties | $ 76,488 | $ 75,837 | $ 117,403 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | $ 22,506 | $ (1,143) | $ 51,332 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 6,626 | (50,375) | (1,871) |
Comprehensive income (loss) | 29,132 | (51,518) | 49,461 |
Comprehensive income attributable to noncontrolling interest | 1,196 | ||
Comprehensive income (loss) attributable to SGH | $ 27,936 | $ (51,518) | $ 49,461 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative effect, period of adoption, adjustment | Ordinary shares | Additional Paid-in-capital | Retained Earnings | Retained EarningsCumulative effect, period of adoption, adjustment | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Total SGH Shareholder's Equity | Total SGH Shareholder's EquityCumulative effect, period of adoption, adjustment | Non-controlling Interest in Subsidiary |
Balances at Aug. 31, 2018 | $ 187,128 | $ 678 | $ 250,954 | $ 112,254 | $ (763) | $ (175,995) | $ 187,128 | ||||
Balances, Shares at Aug. 31, 2018 | 22,583 | ||||||||||
Net income (loss) | 51,332 | 51,332 | 51,332 | ||||||||
Other comprehensive income (loss) | (1,871) | (1,871) | (1,871) | ||||||||
Shares issued under equity plans | 7,373 | $ 23 | 7,350 | 7,373 | |||||||
Shares issued under equity plans, Shares | 772 | ||||||||||
Repurchase of ordinary shares | (520) | (520) | (520) | ||||||||
Shares issued or issuable in connection with acquisition of Inforce | 10,785 | $ 11 | 10,774 | 10,785 | |||||||
Issuance of ordinary shares in connection with acquisition of Inforce, Shares | 383 | ||||||||||
Share-based compensation expense | 18,199 | 18,199 | 18,199 | ||||||||
Cumulative effect from adoption of ASC 606 | $ 1,034 | $ 1,034 | $ 1,034 | ||||||||
Balances at Aug. 30, 2019 | 273,460 | $ 712 | 287,277 | 164,620 | (1,283) | (177,866) | 273,460 | ||||
Balances, Shares at Aug. 30, 2019 | 23,738 | ||||||||||
Net income (loss) | (1,143) | (1,143) | (1,143) | ||||||||
Other comprehensive income (loss) | (50,375) | (50,375) | (50,375) | ||||||||
Shares issued under equity plans | 5,479 | $ 23 | 5,456 | 5,479 | |||||||
Shares issued under equity plans, Shares | 762 | ||||||||||
Repurchase of ordinary shares | (749) | (749) | (749) | ||||||||
Shares issued or issuable in connection with acquisition of Inforce | $ 2 | (2) | |||||||||
Issuance of ordinary shares in connection with acquisition of Inforce, Shares | 68 | ||||||||||
Share-based compensation expense | 18,716 | 18,716 | 18,716 | ||||||||
Reclassification of Capped Calls to equity | (14,106) | (14,106) | (14,106) | ||||||||
Issuance of convertible notes | 50,822 | 50,822 | 50,822 | ||||||||
Balances at Aug. 28, 2020 | 282,104 | $ 737 | 348,163 | 163,477 | (2,032) | (228,241) | 282,104 | ||||
Balances, Shares at Aug. 28, 2020 | 24,568 | ||||||||||
Net income (loss) | 22,506 | 21,310 | 21,310 | $ 1,196 | |||||||
Other comprehensive income (loss) | 6,626 | 6,626 | 6,626 | ||||||||
Shares issued under equity plans | 14,923 | $ 36 | 14,887 | 14,923 | |||||||
Shares issued under equity plans, Shares | 1,202 | ||||||||||
Repurchase of ordinary shares | (48,513) | (48,513) | (48,513) | ||||||||
Share-based compensation expense | 33,801 | 33,801 | 33,801 | ||||||||
Acquisition of LED Business | 7,477 | 7,477 | |||||||||
Balances at Aug. 27, 2021 | $ 318,924 | $ 773 | $ 396,851 | $ 184,787 | $ (50,545) | $ (221,615) | $ 310,251 | $ 8,673 | |||
Balances, Shares at Aug. 27, 2021 | 25,770 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 22,506 | $ (1,143) | $ 51,332 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation expense and amortization of intangible assets | 49,111 | 36,430 | 29,206 |
Amortization of debt discounts and issuance costs | 8,798 | 5,866 | 2,803 |
Share-based compensation expense | 33,877 | 18,716 | 18,199 |
Change in fair value of contingent consideration | 32,400 | (2,700) | |
Amortization of operating lease right-of-use assets | 7,537 | 5,060 | |
Loss on remeasurement of Capped Calls | 7,719 | ||
Loss on extinguishment of debt | 6,822 | ||
Other | 829 | 2,471 | (13) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (51,440) | (12,348) | 35,240 |
Inventories | (137,889) | (51,840) | 102,083 |
Other current assets | (17,480) | 5,760 | (1,606) |
Accounts payable and accrued expenses | 214,959 | 70,570 | (64,168) |
Operating lease liabilities | (6,851) | (4,763) | |
Deferred income taxes, net | (3,007) | (2,115) | (719) |
Net cash provided by operating activities | 153,350 | 87,205 | 169,657 |
Cash flows from investing activities: | |||
Capital expenditures and deposits on equipment | (47,580) | (32,445) | (33,433) |
Acquisitions of businesses, net of cash acquired | (35,677) | (76,088) | |
Other | (921) | 404 | 81 |
Net cash used for investing activities | (84,178) | (32,041) | (109,440) |
Cash flows from financing activities: | |||
Proceeds from borrowing under line of credit | 172,500 | 103,000 | 254,500 |
Proceeds from issuance of ordinary shares | 14,923 | 5,479 | 7,373 |
Proceeds from issuance of debt | 11,439 | 243,125 | |
Repayments of borrowings under line of credit | (147,500) | (103,000) | (254,500) |
Payments to acquire ordinary shares | (48,513) | (749) | (520) |
Repayments of debt | (213,436) | (6,753) | |
Purchase of capped calls | (21,825) | ||
Net cash provided by financing activities | 2,849 | 12,594 | 100 |
Effect of changes in currency exchange rates on cash and cash equivalents | 154 | (15,086) | 588 |
Net increase in cash and cash equivalents | 72,175 | 52,672 | 60,905 |
Cash and cash equivalents at beginning of period | 150,811 | 98,139 | 37,234 |
Cash and cash equivalents at end of period | 222,986 | 150,811 | 98,139 |
Supplement disclosures: | |||
Interest paid, net of amounts capitalized | 8,029 | 12,983 | 20,648 |
Income taxes paid, net | $ 6,702 | $ 9,151 | $ 15,306 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Aug. 27, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation Since our inception over 30 years ago, SMART Global Holdings, Inc. (“SGH” or “Company”) has grown into a diversified group of businesses focused on the design and manufacture of specialty solutions for the computing, memory and LED markets. Our success is based on a customer-focused approach characterized by a commitment to quality, advanced technical expertise, quick time-to-market, build-to-order flexibility and excellence in customer service. The accompanying consolidated financial statements include SGH and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America. Intercompany balances and transactions have been eliminated in consolidation. Reclassifications : Certain reclassifications have been made to prior period amounts to conform to current period presentation, including, among others, presenting: (i) treasury shares separate from additional paid-in-capital in the consolidated balance sheets and consolidated statements of shareholders’ equity; (ii) components of accounts payable and accrued expenses in the consolidated balance sheet and footnotes; (iii) components of property and equipment in the footnotes; and (iv) the operating cash flow impacts of reclassifications in consolidated statements of cash flows. Fiscal Year : Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2021, 2020 and 2019 each contained 52 weeks. All period references are to our fiscal periods unless otherwise indicated. All financial information for our subsidiaries in Brazil is included in our consolidated financial statements on a one-month lag because their fiscal years end on July 31 of each year. Out-of-Period Adjustment : During the second quarter of 2021, we 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, $0.8 million increase in interest expense and $1.7 million benefit for income taxes. The adjustment was not considered material to the interim or annual consolidated financial statements for the year ended August 27, 2021 nor to any previously issued interim or annual consolidated financial statements. Cash and Cash Equivalents Cash equivalents include highly liquid short-term investments, readily convertible to known amounts of cash, with original maturities of three months or less. Derivative Instruments We use derivative instruments to manage our exposure to changes in currency exchange rates from certain monetary assets and liabilities denominated in currencies other than the U.S. dollar. Derivative instruments are measured at their fair values and recognized as either assets or liabilities. The accounting for changes in the fair value of derivative instruments is based on the intended use of the derivative and the resulting designation. For derivative instruments that are not designated for hedge accounting, gains or losses from changes in fair values are recognized in other non-operating (income) expense. We do not use foreign currency contracts for speculative or trading purposes. Fair Value Measurements We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. U.S. GAAP has established a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that can be obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party might use in pricing an asset or liability. The fair value hierarchy is categorized into three levels, based on the reliability of inputs, as follows: • Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities; • Level 2 – Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and • Level 3 – Valuations based on unobservable inputs for the asset or liability. Functional Currency Our primary functional currency is the U.S. dollar. Gains and losses from the remeasurement of non-functional currency balances are recorded in non-operating (income) expense. The functional currency of our subsidiaries in Brazil is the Brazilian real. Assets and liabilities of our Brazil subsidiaries are translated into U.S. dollars each period at the current exchange rate, while revenues and expenses are translated at the average exchange rate prevailing during the period. Cumulative translation gains and losses are included in accumulated other comprehensive income (loss). Goodwill We test goodwill for impairment in the fourth quarter of each year, or more frequently if indicators of an impairment exist, to determine whether it is more likely than not that the fair value of the reporting unit with goodwill is less than its carrying value. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting the fair value of the reporting unit. No impairment of goodwill was recognized through August 27, 2021. Government Incentives We receive incentives from governmental entities related to certain expenses and other activities. These government incentives may require that we meet or maintain specified spending levels and other operational metrics and are recorded in the financial statements in accordance with their purpose. Incentives related to specific operating activities are recorded against the related expense in the period the expense is incurred. Government incentives received prior to being earned are included in other current liabilities, whereas government incentives earned prior to being received are included in other current assets. Cash received from government incentives related to operating expenses is included as an operating activity in the consolidated statement of cash flows. Income Taxes We recognize current and deferred income taxes based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences and carryforwards recognized for financial reporting and income tax purposes. Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, utilizing tax rates that are expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. We recognize valuation allowances to reduce deferred tax assets to the amount that we estimate, based on available evidence and management judgment, will more likely than not be realized. We record a valuation allowance in the period the determination is made that all or part of the net deferred tax assets will not be realized. We record interest and penalties related to unrecognized tax benefits in tax expense. Intangible Assets Intangible assets are stated at cost and amortized on a straight-line basis over their estimated useful lives of generally four to eight years for technology, four to eight years for customer relationships, five to seven years for trademarks/tradenames and less than one year for order backlog. Intangible assets are retired in the period they become fully amortized. We review the carrying value of identified intangible assets for impairment when events and circumstances indicate that their carrying value may not be recoverable from the estimated future cash flows expected to result from their use and/or disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the estimated fair value of the identifiable intangible assets. Inventories Inventories are stated at the lower of cost or net realizable value. In our 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, we evaluate ending inventories for excess quantities and obsolescence, including analyses of sales levels by product family, historical demand and forecasted demand in relation to inventory on hand, competitiveness of product offerings, market conditions and product life cycles. Leases We have operating leases through which we acquire or utilize facilities, offices and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions. In determining the lease term, we assess whether it is reasonably certain we will exercise options to renew or terminate a lease, and when or whether we would exercise an option to purchase the right-of-use asset. Measuring the present value of the initial lease liability requires exercising judgment to determine the discount rate, which we base on interest rates for similar borrowings issued by entities with credit ratings similar to ours. We recognize right-of use assets and corresponding lease liabilities for leases with an initial term of more than 12 months and do not separate lease and non-lease components. Recognized leases are included in operating lease right-of-use assets and corresponding lease liabilities are included in other current liabilities or noncurrent operating lease liabilities. For operating leases of buildings, we account for non-lease components, such as common area maintenance, as a component of the lease and include the components in the initial measurement of our right-of-use assets and corresponding liabilities. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term. Property and Equipment Property and equipment is stated at cost and depreciated using the straight-line method over estimated useful lives of generally two to five years for equipment, five to forty years for buildings and building improvements and two to five years for furniture, fixtures and software. Land leases are amortized using the straight-line method over their lease terms, which expire from 2057 to 2082. We review the carrying value of property and equipment for impairment when events and circumstances indicate that the carrying value of an asset or group of assets may not be recoverable from the estimated future cash flows expected to result from its use and/or disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the estimated fair value of the assets. Research and Development Research and development expenditures are expensed in the period incurred. Revenue Recognition We recognize revenue based on the transfer of control of goods and services and apply the following five-step approach: (1) identification of a 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 as performance obligations are satisfied. Product Revenue : Product revenue is generally recognized at a point in time when control of the promised goods is transferred to customers. Contracts with customers are generally short-term in duration at fixed, negotiated prices with payment generally due shortly after delivery. We estimate a liability for returns using the expected value method based on historical rates of return. In addition, we generally offer price protection to our distributors, which is a form of variable consideration that decreases the transaction price. We use the expected value method, based on historical price adjustments and current pricing trends, to estimate the amount of revenue recognized from sales to distributors. Differences between the estimated and actual amounts are recognized as adjustments to revenue. Non-cancellable, nonrefundable customized product sales are recognized over time on a cost incurred basis. In connection with these arrangements, customers obtain control and benefit from the services as they are performed. The terms for these arrangements provide us with a legally enforceable right to receive payment, including a reasonable profit margin upon customer cancellation, for performance completed to date. Accordingly, we recognize revenue over time as we complete the manufacture of these products. A portion of our revenue is derived from the sale of customized products. In certain cases, we recognize revenue when control of the underlying assets passes to the customer when the customer is able to 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 we have a present right to payment. Under the terms of these arrangements, we cannot repurpose products without the customer’s consent and accordingly, we recognize revenue at the point in time when products are completed and made available to the customer. Service Revenue : Our service revenue is derived from supply chain services as well as professional services. Supply chain services includes procurement, logistics, inventory management, temporary warehousing, kitting and packaging. Professional services include solution design, system installation, software automation and managed support services related to high performance computing (“HPC”) and storage systems. A portion of our product sales include extended warranty and on-site services, subscriptions to our HPC environment, professional services, software and related support. Agent Services : We provide certain supply chain services on an agent basis, whereby we procure materials on behalf of our customers and then resell such materials to our customers. Gross amounts invoiced to customers in connection with these agent services include amounts related to the services performed by us in addition to the cost of the materials procured. However, only the amount related to the agent component is recognized as revenue in our results of operations. We generally recognize revenue for these procurement, logistics and inventory management services upon the completion of such services, which typically occurs at the time of shipment of product to the customer. Amounts we invoice to customers for cost of materials related to services performed, which remain unpaid as of the end of a reporting period, are included in accounts receivable. Additionally, cost of materials procured for customers under these agent services, but which remain on hand as of the end of a reporting period, are included in inventories. Amounts in accounts receivable and inventories impact the determination of net cash provided by (or used in) operations. Transaction Price : The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. We allocate 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 our approved list price. A portion of our service revenue is from 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. We allocate the consideration to each performance obligation based on the relative selling price, determined as the best estimate of the price at which we would transact if it sold the deliverable regularly on a stand-alone basis. Contract C osts : As a practical expedient, we recognize 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, we account for shipping and handling costs , if any, that occur after control transfers to the customer as a fulfillment activity. We record shipping and handling costs related to revenue transactions within cost of sales as a period cost. Share-Based Compensation Share-based compensation is measured at the grant date, based on the fair value of the award, and recognized as expense under the straight-line attribution method over the requisite service period. We account for forfeitures as they occur. Treasury Shares Treasury shares are carried at cost. When treasury shares are retired, any excess of the repurchase price paid over par value is allocated between additional capital and retained earnings. Use of Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Estimates and judgments are based on historical experience, forecasted events and various other assumptions. Significant items subject to such estimates and assumptions include business acquisitions, income taxes, inventories, goodwill and intangible assets, property and equipment, revenue recognition and share-based compensation. Actual results could differ from the estimates made by management. |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 12 Months Ended |
Aug. 27, 2021 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13 – Measurement of Credit Losses on Financial Instruments In February 2016, the Financial Accounting Standards Board issued ASU 2016-02 – Leases |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Aug. 27, 2021 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2020, the FASB issued ASU 2020-06 – Debt – Debt with Conversion and Other Options and Derivatives and Hedging – Contracts in Entity’s Own Equity In December 2019, the FASB issued ASU 2019-12 – Income Taxes – Simplifying the Accounting for Income Taxes |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Aug. 27, 2021 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions 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”), (i) we acquired the LED business of Cree, Inc. (“Cree”), including (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 Joint Venture”), Cree’s joint venture with San’an Optoelectronics Co., Ltd. (“San’an”) and (ii) we 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 consolidated financial statements from the date of acquisition. The acquisition of the LED Business, a global industry leader, further enhances our growth and diversification strategy and fits well with our 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 our 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 (“LED 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 (“Earnout Period”), with a minimum payment of $2.5 million, payable in the form of an unsecured promissory note to be issued by us (“Earnout Note”) and (iv) the assumption of certain liabilities. The LED Purchase Price Note bears interest at LIBOR plus 3.0% and is due on August 15, 2023. The Earnout Note will begin to bear interest Cash $ 50,000 Additional payment for net working capital adjustment (1) 22,398 Fair value of LED Purchase Price Note 125,000 Fair value of Earnout Note 28,100 $ 225,498 (1) Includes $15.3 million paid at closing and $7.1 million paid in the fourth quarter of 2021 upon completion of the review of the net working capital assets acquired and liabilities assumed. Contingent Consideration : The Earnout Note is accounted for as contingent consideration. The fair value of the Earnout Note was estimated as of the date of acquisition to be $28.1 million and was 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. The fair value measurement was based on significant inputs not observable in the market. The Earnout Note is revalued each quarter and changes in valuation are reflected in results of operations. In the second half of 2021, we recorded charges of $32.4 million to adjust the value of the Earnout Note to the fair value as of August 27, 2021. The change in fair value reflected new information about the probability and timing of meeting the conditions of the revenue and gross profit targets of the LED Business. As of August 27, 2021, the fair value of the Earnout Note was $60.5 million. Valuation : We estimated the fair value of the assets and liabilities of the LED Business as of March 1, 2021, the acquisition date. The Cash and cash equivalents $ 36,721 Accounts receivable 45,608 Inventories 60,423 Other current assets 5,204 Property and equipment 70,116 Operating lease right-of-use assets 7,494 Intangible assets 64,500 Other noncurrent assets 26 Accounts payable and accrued expenses (23,673 ) Other current liabilities (27,509 ) Noncurrent operating lease liabilities (4,019 ) Other noncurrent liabilities (1,916 ) Total net assets acquired 232,975 Noncontrolling interest in subsidiary (7,477 ) Consideration $ 225,498 The fair values and useful lives of the intangible asset acquired was as follows: Amount Estimated useful life (in years) Technology $ 49,800 7-8 Trademarks/tradenames 6,100 5 Customer relationships 5,200 7-8 Order backlog 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. • Trademarks/tradenames 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 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 our 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 our 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 year ended August 27, 2021 combines our results of operations for the year ended August 27, 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 year ended August 28, 2020 combines our results of operations for the year ended August 28, 2020 and the results of operations of the LED Business for the year ended June 28, 2020. Year ended August 27, 2021 August 28, 2020 Net sales $ 1,705,366 $ 1,555,689 Net loss attributable to SGH (142,319 ) (95,926 ) Earnings (loss) per share: Basic $ (5.86 ) $ (4.00 ) Diluted (5.86 ) (4.00 ) The unaudited pro forma financial information above reflects the following adjustments: • Incremental cost of sales related to the estimated fair value of inventories. • 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 interest expense related to the LED Purchase Price Note and the Earnout Note. • The impacts to income tax expense as a result of the pro forma adjustments. In 2021 and 2020, we incurred costs related to the acquisition of $5.3 million and $1.1 million, respectively, which were included in selling, general and administrative expense. From March 1, 2021, the acquisition date, to August 27, 2021, revenues for the LED Business were $224.6 million and, for the same period, net income for the LED Business was $16.3 million, which excludes any expenses recognized to adjust the Earnout Note to its fair value. SMART EC In July 2019, we acquired Artesyn Embedded Computing, Inc. (“Artesyn”), which we subsequently renamed SMART Embedded Computing, Inc. (“SMART EC”), for $77.4 million. The purchase price consisted of (i) cash paid at closing, subject to customary adjustments and (ii) an earn-out payment 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 was payable, at our option in either cash or ordinary shares of SGH. No earn-out was achieved by Artesyn. The operations of SMART EC are part of our Intelligent Platforms Solutions segment. The purchase price was as follows: Cash $ 74,719 Fair value of contingent consideration 2,700 $ 77,419 The initial fair value of the contingent consideration was estimated using a real options technique which incorporated 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 was due. Under the acquisition method of accounting, the assets acquired and liabilities assumed were recorded as of the acquisition date at their respective fair values. Assets acquired and liabilities assumed were as follows: Tangible assets acquired $ 16,482 Intangible assets 41,900 Liabilities assumed (7,840 ) Goodwill 26,877 Total net assets acquired $ 77,419 The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents goodwill resulting from the acquisition. The goodwill is not deductible for tax purposes. The estimated fair values and useful lives of the intangible assets acquired included customer relationship assets with a fair value of $31.8 million and estimated useful lives of 4-6 years and technology assets with a fair value of $10.1 million and estimated useful lives of 4 years. In 2020 and 2019, we incurred costs related to the acquisition of $0.6 million and $1.0 million, respectively, which were are included in selling, general and administrative expense. SMART EC’s results of operations are included in the condensed consolidated financial statements from the date of acquisition. SMART Wireless In July 2019, we acquired Inforce Computing, Inc. (“Inforce”), which we subsequently renamed SMART Wireless Computing, Inc. (“SMART Wireless”), for $14.6 million. The purchase price consisted of (i) a payment of $3.2 million in cash paid at closing, subject to customary adjustments, (ii) 382,788 ordinary shares of SGH valued at $9.2 million and (iii) amounts retained by us as security for the sellers’ indemnification obligations as well as any post-closing adjustments to the purchase price consisting of $0.7 million in cash and 67,550 ordinary shares of SGH valued at $1.6 million. In 2020, we paid $0.4 million of the retained cash and issued all the retained shares. The operations of SMART Wireless are part of our Intelligent Platforms Solutions segment. The purchase price was as follows: Cash $ 3,157 Fair value of shares issued at closing 9,167 Cash initially retained and paid in 2020 413 Fair value of shares initially retained and issued in 2020 1,618 Cash paid for post-closing adjustments 246 $ 14,601 Under the acquisition method of accounting, the assets acquired and liabilities assumed were recorded as of the acquisition date at their respective fair values. Assets acquired and liabilities assumed were as follows: Tangible assets acquired $ 5,266 Intangible assets 6,700 Liabilities assumed (5,643 ) Goodwill 8,278 Total net assets acquired $ 14,601 The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents goodwill resulting from the acquisition. The goodwill is not deductible for tax purposes. The estimated fair values and useful lives of the intangible assets acquired included customer relationship assets with a fair value of $5.8 million and estimated useful lives of 5 years and technology assets with a fair value of $0.9 million and estimated useful lives of 5 years. In 2020 and 2019, we incurred costs related to the acquisition of $0.2 million and $0.5 million, respectively, which were are included in selling, general and administrative expense. SMART Wireless’ results of operations are included in the consolidated financial statements from the date of acquisition. At the time of the acquisition, Inforce’s selling shareholders included our CEO and two members of our Board of Directors. In connection with the acquisition, these individuals received an aggregate of 397,407 ordinary shares of SGH valued at $9.5 million, consisting of 337,692 shares issued upon closing and the balance issuable upon satisfaction of certain post-closing criteria. The remaining shares were issued in the fourth quarter of 2020. |
Inventories
Inventories | 12 Months Ended |
Aug. 27, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories As of August 27, 2021 August 28, 2020 Raw materials $ 163,610 $ 89,943 Work in process 92,901 16,672 Finished goods 107,090 56,376 $ 363,601 $ 162,991 As of August 27, 2021 and August 28, 2020, 11% and 17%, respectively, of total inventories were inventories owned and held under our supply chain services. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Aug. 27, 2021 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Property and Equipment As of August 27, 2021 August 28, 2020 Equipment $ 182,493 $ 113,035 Buildings and building improvements 53,502 26,498 Furniture, fixtures and software 32,114 21,528 Land 16,126 1,208 284,235 162,269 Accumulated depreciation (127,969 ) (107,564 ) $ 156,266 $ 54,705 Depreciation expense for property and equipment was $28.9 million, $22.8 million and $23.6 million in 2021, 2020 and 2019, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Aug. 27, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill As of August 27, 2021 As of August 28, 2020 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Intangible assets: Technology $ 61,307 $ (9,142 ) $ 10,350 $ (3,085 ) Customer relationships 57,500 (22,393 ) 52,300 (12,899 ) Trademarks/tradenames 19,200 (6,628 ) 13,100 (4,095 ) Order backlog 3,800 (2,571 ) 400 (400 ) $ 141,807 $ (40,734 ) $ 76,150 $ (20,479 ) Goodwill by segment: Intelligent Platform Solutions $ 40,401 $ 40,401 Memory Solutions 33,854 33,554 $ 74,255 $ 73,955 In 2021 and 2019, we capitalized $65.7 million and $48.6 million, respectively, for intangible assets, primarily acquired in connection with business acquisitions, with weighted-average useful lives of 6.7 years and 4.8 years, respectively. Amortization expense for intangible assets was $20.3 million, $13.7 million and $5.6 million in 2021, 2020 and 2019, respectively. Amortization expense is expected to be $23.9 million for 2022, $21.9 million for 2023, $18.1 million for 2024, $15.3 million for 2025 and $8.3 million for 2026 and $13.6 million thereafter. Goodwill of our Memory Solutions segment increased in 2021 by $0.3 million from translation adjustments. Goodwill of our Memory Solutions segment decreased in 2020 by $7.2 million from translation adjustments and, for our Intelligent Platforms Solutions, by $0.3 million from adjustments to the purchase price allocation of business acquisitions. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Aug. 27, 2021 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses As of August 27, 2021 August 28, 2020 Accounts payable (1) $ 429,640 $ 224,660 Salaries, wages and benefits 37,795 16,862 Income and other taxes 14,319 7,495 Other 2,353 4,346 $ 484,107 $ 253,363 (1) Includes accounts payable for property and equipment of $3.1 million and $1.8 million as of August 27, 2021 and August 28, 2020, respectively. |
Debt
Debt | 12 Months Ended |
Aug. 27, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of August 27, 2021 August 28, 2020 Convertible Senior Notes $ 203,992 $ 195,573 LED Purchase Price Note 125,000 — ABL Credit Agreement 25,000 — Other 11,846 — 365,838 195,573 Less current debt (25,354 ) — Long-term debt $ 340,484 $ 195,573 Reference Rate Reform In July 2017, the Financial Conduct Authority (which regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to LIBOR in derivatives and other financial contracts. On March 5, 2021, the Financial Conduct Authority confirmed a partial extension of this deadline announcing that it will cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021. The remaining U.S. dollar LIBOR settings will continue to be published until June 30, 2023. For each of our debt instruments that provide for interest based on LIBOR, the SOFR, as published by the Federal Reserve Bank of New York, is listed as the alternative index to replace LIBOR if a different alternative index is not agreed to prior such cessation of the LIBOR rate. Convertible Senior Notes In February 2020, we issued $250.0 million in aggregate principal amount of 2.25% convertible senior notes due 2026 (the “2026 Notes”). The 2026 Notes are general unsecured obligations, bear interest at an annual rate of 2.25% per year, payable semi-annually on February 15 and August 15, and mature on February 15, 2026, unless earlier converted, redeemed or repurchased. The 2026 Notes are governed by an indenture (the “Indenture”) between us and U.S. Bank National Association, as trustee. The initial conversion rate of the 2026 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. Conversion Rights : Holders of the 2026 Notes may convert them under the following circumstances: i. during any fiscal quarter commencing after the fiscal quarter ended on May 28, 2020 (and only during such fiscal quarter) if the last reported sale price per ordinary share exceeds 130% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter; ii. 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; iii. on or after August 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date; iv. upon the occurrence of certain corporate events or distributions on our ordinary shares, as provided in the Indenture; or v. the 2026 Notes are called for redemption. Upon conversion, we will pay or deliver, as applicable, cash, ordinary shares or a combination of cash and ordinary shares at our election. Our intent is to settle in cash the principal amount of our convertible notes upon conversion and may, at our option, settle any excess of the conversion value over the principal amount in cash, ordinary shares or any combination thereof. Upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture), we 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 2026 Notes may require us to repurchase their notes at a cash repurchase price equal to the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest. 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 2026 Notes, then, subject to certain exceptions, we 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. Cash Redemption at Our Option : We have the right to redeem the 2026 Notes, in whole or in part, at our 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 2026 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 our ordinary shares 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. Other : In connection with the issuance of the 2026 Notes, we separated the par value of the 2026 Notes into liability and equity components. The liability component of $197.5 million was calculated by using a discount rate of 6.53%, which was our borrowing rate on the date of the issuance of the 2026 Notes for a similar debt instrument without the conversion feature. The equity component of $52.5 million, representing the conversion option, was determined by deducting the liability component from the par value of the 2026 Notes. The equity component of the 2026 Notes is included in additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification, which we reassess every reporting period. The difference between the debt recorded at issuance and its principal amount is accreted using the effective interest method through interest expense over the term of the 2026 Notes. Debt issuance costs for the 2026 Notes were $8.0 million, consisting of initial purchasers' discount and other issuance costs, and were allocated to the liability and equity components using the same proportions as the allocation of the proceeds from the 2026 Notes. Transaction costs attributable to the liability component were $6.3 million and are netted with the debt balance and amortized to interest expense over the term of the 2026 Notes. Transaction costs attributable to the equity component were $1.7 million and are netted with the equity component in additional paid-in-capital. Interest expense for the 2026 Notes consisted of 2.25% contractual stated interest of $5.6 million and $3.1 million in 2021 and 2020, respectively, and amortization of discount and issuance costs of $8.4 million and $4.4 million in 2021 and 2020, respectively, resulting in an effective interest rate of 7.06%. As of both August 27, 2021 and August 28, 2020, the carrying amount of the equity components of the 2026 Notes, which are included in additional paid-in-capital, was $ 50.8 million. LED Purchase Price Note In connection with the acquisition of the LED Business in March 2021, we issued an unsecured promissory note to Cree in the amount of $125 million. The LED Purchase Price Note bears interest at LIBOR plus 3.0%, payable quarterly, and is due on August 15, 2023. The LED Purchase Price Note requires that we maintain a secured leverage ratio not in excess of 3.50:1.00 as of the end of each fiscal quarter. See “Business Acquisitions – LED Business.” Asset-Based Lending Credit Agreement In December 2020, our subsidiaries, SMART Modular, SMART EC and Penguin Computing, Inc. (collectively the “ABL Borrowers”), and certain other U.S. subsidiaries of the Company party thereto as guarantors (such other U.S. subsidiaries, together with the ABL Borrowers, collectively the “ABL Loan Parties”) entered into a Loan, Guaranty and Security Agreement (the “ABL Credit Agreement”), which provides for a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $100 million. Under the ABL Credit Agreement, we have the option to increase the total amount available to $150 million, subject to certain conditions, including obtaining commitments from one or more lenders. The ABL Credit Agreement, which expires on December 23, 2023, 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. There are no requirements to make any scheduled amortization payments of drawn amounts. Borrowings under the ABL Credit Agreement are available 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. Interest and Fees : The ABL Credit Agreement bears 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. We are subject to a monthly unused facility fee (i) 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 (ii) 0.25%, if average daily Revolver Usage was equal to or greater than 50% of the Commitments during such month. Covenants : 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. Security : 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”) which 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 ( i ) 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 ( ii ) 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 ( i ) 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 ( ii ) 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. Amended Credit Agreement In March 2020, three of our subsidiaries, SMART Worldwide Holdings, Inc. (“SMART Worldwide”); SMART Modular Technologies (Global), Inc. (“SMART Global”); and SMART Modular Technologies, Inc. (“SMART Modular”) (collectively, “Borrowers”) entered into a third amended and restated credit agreement (“Amended Credit Agreement”), which provides for $50 million of revolving loans with a maturity date of March 6, 2025. Interest : Amounts outstanding under the Amended Credit Agreement bear interest at a rate of: • When the First Lien Leverage Ratio, as defined in the Amended Credit Agreement, is greater than 2.25 to 1.00: o 3.75% per annum with respect to LIBOR borrowings and o 2.75% 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: o 3.50% per annum with respect to LIBOR borrowings and o 2.50% per annum with respect to base rate borrowings. Covenants : The Amended Credit Agreement contains 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 incur debt and liens, issue preferred equity, engage in certain transactions, make investments, dispose of assets, pay dividends and engage in certain transactions with affiliates. The Amended Credit Agreement also requires 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. Security : The Amended Credit Agreement is jointly and severally guaranteed on a senior basis by certain subsidiaries of Global (excluding, among other subsidiaries, SMART Modular Technologies Sdn. Bhd. (“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 Computing; 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. Other Through one of our Brazil subsidiaries, we are party to a credit facility with the Funding Authority for Studies and Projects (“FINEP”), an organization of the Brazilian federal government under the Ministry of Science, Technology and Innovation devoted to funding science and technology in Brazil. The facility provides for borrowings of up to R$102.2 million (or $20.0 million) for investments in technology innovation projects used in infrastructure and research and development conducted in Brazil as well as for the acquisition of equipment. The facility bears interest bears interest at 2.8% per annum and provides for unused commitment fees of 0.1% per month. The agreement also provides for initial administration fees of 1.09%, deducted from each advance of funds. Amounts outstanding and available under the facility are guaranteed by two unrelated parties, subject to a guarantee fee of 1.5% per annum. The facility includes customary conditions and can be terminated in the event of a change of effective control. Amounts borrowed under the agreement are due in monthly installments of principal and interest beginning in June 2022, with the final payment due in December 2027. On December 30, 2020, we borrowed R$60.7 million (or $11.9 million) under the agreement and, as of August 27, 2021, the outstanding balance was $11.8 million. Maturities of Debt As of August 27, 2021, maturities of debt were as follows: 2022 $ 354 2023 127,122 2024 2,122 2025 2,122 2026 252,122 Thereafter 3,004 Less unamortized discount and issuance costs (46,008 ) $ 340,838 Maturities in the table above exclude amounts drawn under our ABL Credit Agreement, which expires in December 2023. As of August 27, 2021, there was $25.0 million included in current debt for amounts drawn under this facility. |
Leases
Leases | 12 Months Ended |
Aug. 27, 2021 | |
Leases [Abstract] | |
Leases | Leases As of August 27, 2021 and August 28, 2020, we had operating leases through which we utilize facilities, offices and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions. Year ended August 27, 2021 August 28, 2020 Fixed lease cost $ 9,377 $ 6,743 Variable lease cost 1,445 842 Short-term lease cost 288 295 $ 11,110 $ 7,880 Cash flows used for operating activities in 2021 and 2020 included payments for operating leases of $7.5 million and $5.1 million, respectively. Noncash acquisitions of right-of-use assets were $24.5 million and $8.8 million in 2021 and 2020, respectively. As of August 27, 2021 and August 28, 2020, the weighted-average remaining lease term for our operating leases was 6.1 years and 7.6 years, respectively. Certain of our operating leases include one or more options to extend the lease term for periods from two to five years. In determining the present value of our operating lease liabilities, we have assumed we will not extend any lease terms. As of August 27, 2021 and August 28, 2020, the weighted-average discount rate for our operating leases was 6.7% and 8.0%, respectively. Minimum payments of lease liabilities as of August 27, 2021 were as follows: 2022 $ 12,319 2023 10,553 2024 7,342 2025 5,151 2026 3,599 2027 and thereafter 15,498 54,462 Less imputed interest (11,787 ) Present value of total lease liabilities $ 42,675 The table above excludes lease liabilities for leases that have been executed but not yet commenced. As of August 27, 2021, we had such lease commitments relating to operating lease payment obligations of $51.8 million for a building lease with a term of 16 years. We will recognize a right-of-use asset and an associated lease liability at the time such asset becomes available for our use. Such lease is currently expected to commence in the second half of calendar 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 27, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments As of August 27, 2021, we had commitments of $170.0 million for purchase obligations, a substantial majority of which will be due within one year. Purchase obligations include payments for the acquisition of inventories, property and equipment and other goods or services of either a fixed or minimum quantity. Product Warranty and Indemnities We generally provide a limited warranty that our products are in compliance with applicable specifications existing at the time of delivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair or replacement of defective items or return of amounts paid for such items. Our warranty obligations are not material. We are party to a number of agreements in which we have agreed to defend, indemnify and hold harmless our customers and suppliers from damages and costs, which may arise from product defects as well as from any alleged infringement by our products of third-party patents, trademarks or other proprietary rights. We believe our internal development processes and other policies and practices limit our 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, we have not had to reimburse any of our customers or suppliers for any losses related to these indemnities. We have not recorded any liability for such indemnities. Contingencies From time to time, we are 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. Additionally, from time to time, we are a party in the normal course of business to a variety of agreements pursuant to which we may be obligated to indemnify another party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a material adverse effect on our business, results of operations or financial condition. We regularly review contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. |
Equity
Equity | 12 Months Ended |
Aug. 27, 2021 | |
Equity [Abstract] | |
Equity | Equity SGH Shareholders’ Equity Ordinary Share Repurchases In January 2021, we repurchased an aggregate of 1.1 million of our ordinary shares 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 an aggregate amount of $44.3 million in a privately negotiated transaction. The repurchased shares were recorded as treasury shares. Ordinary shares withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are also treated as ordinary share repurchases. An aggregate of 153 thousand, 28 thousand and 18 thousand shares were acquired for $4.2 million, $0.7 million and $0.5 million in 2021, 2020 and 2019, respectively. Capped Calls In connection with the offering of the our 2026 Notes in February 2020, we entered into capped call transactions (“Capped Calls”), at arms-length, which have initial strike prices of approximately $40.61 per share, subject to certain adjustments, corresponding to the initial conversion price of the 2026 Notes, and 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 ordinary shares of the Company and are generally intended to reduce the potential economic dilution upon any conversion of 2026 Notes and/or offset any potential cash payments we may be required to make in excess of the principal amount of converted 2026 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 2026 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 because they could be settled only in cash. In March 2020, our shareholders approved a proposal to amend our memorandum and articles of association to permit us to purchase or otherwise acquire our ordinary shares. The amendment also enabled us to utilize shares or cash, or any combination thereof, to settle the capped call transactions, which resulted in the reclassification of the noncurrent derivative assets to additional paid in capital in an amount equal to the $14.1 million fair value of the Capped Calls as of March 30, 2020. In connection therewith, we recognized a loss of $7.7 million in 2020 in other non-operating expense from the revaluation of the Capped Calls. Noncontrolling Interest in Subsidiary In connection with our acquisition of the LED Business, we have a 51% ownership interest in the Cree Joint Venture. The remaining 49% ownership interest is held by San’an. The Cree Joint Venture has a five-member board of directors, three of which are designated by us and two of which are designated by San’an. As a result of our majority voting interest, we consolidate the operations of the Cree Joint Venture and report its results of operations within our LED Solutions segment. The Cree Joint Venture has a manufacturing agreement pursuant to which San’an supplies it with mid-power LED products and we and the Cree Joint Venture have a sales agent agreement pursuant to which we are 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 in an exclusive arrangement serving the expanding markets of North and South America, Europe and Japan, and serves China markets and the rest of the world on a non-exclusive basis. The 49% ownership interest held by San’an is classified as noncontrolling interest. Subsequent to the acquisition of the LED Business, noncontrolling interest increased by an aggregate of $1.2 million in 2021 for San’an’s share of net income from the Cree Joint Venture. Cash and other assets of the Cree Joint Venture are generally not available for use by us in our other operations. |
Government Incentives
Government Incentives | 12 Months Ended |
Aug. 27, 2021 | |
Receivables [Abstract] | |
Government Incentives | Government Incentives Brazil Financial Credits Through our Brazil subsidiaries, we participate in two programs (“Brazil Incentive Programs”), pursuant to which the Brazilian government incentivizes the manufacture and sale of certain information technology and consumer electronics products within Brazil. The programs include 1) Lei da Informática – Processo Produtivo Básico Program (aka Informatics Law – Basic Productive Process Program) (“PPB/IT”) and 2) Programa de Incentivo ao Setor de Semicondutores (aka Program of Incentives for the Semiconductor Sector) (“PADIS”). The financial credits available through PADIS are currently set to expire in January 2022. The Brazil Incentive Programs provide for reduced import and other transaction-related taxes for certain procurement, manufacturing and sales activities. In exchange, we must invest in certain research and development activities related to semiconductors and displays in aggregate amounts that exceed a specified percentage of our gross revenues recognized in connection with sales in Brazil. Accordingly, financial credits earned in connection with the Brazil Incentive Programs are reflected as a reduction of research and development expense. Financial credits available under the Brazil Incentive Programs are subject to limitations, which range from approximately 11% to 14% of gross revenues recognized for sales in Brazil. Pursuant to the Brazil Incentive Programs, we recognized aggregate financial credits, reflected as a reduction of research and development expense, of $30.0 million and $6.4 million in 2021 and 2020, respectively. Financial credits earned under the Brazil Incentive Programs may be refunded in cash or used to offset liabilities for Brazil federal taxes. As of August 27, 2021 and August 28, 2020, earned but unused financial credits of $19.8 million and $6.4 million, respectively, were included in other current assets. Financial credits earned but unused as of August 27, 2021 can be utilized through August 2026. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Aug. 27, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Cash and cash equivalents as of August 27, 2021 included money market funds of $2.7 million which were valued based on Level 1 measurements using quoted prices in active markets for identical assets. Fair value measurements of other assets and liabilities were as follows: As of August 27, 2021 As of August 28, 2020 Fair Value Carrying Value Fair Value Carrying Value Derivative financial instrument assets $ 883 $ 883 $ 112 $ 112 Derivative financial instrument liabilities (50 ) (50 ) (912 ) (912 ) Convertible Senior Notes (335,668 ) (203,992 ) (221,500 ) (195,573 ) LED Purchase Price Note (125,000 ) (125,000 ) — — ABL Credit Agreement (25,000 ) (25,000 ) — — Debt – other (10,702 ) (11,846 ) — — Acquisition-related contingent consideration (60,500 ) (60,500 ) — — The fair values of our derivative financial instruments, as measured on a recurring basis, were based Level 2 measurements, including market-based observable inputs of currency exchange spot and forward rates, interest rates and credit-risk spreads. The fair value of our Convertible Senior Notes (excluding the value of the equity component of our convertible notes), as measured on a non-recurring basis, was determined based on Level 2 measurements, including the trading price of the convertible notes. The fair values of our LED Purchase Price Note, ABL Credit Agreement and other debt, as measured on a non-recurring basis, were estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours. Acquisition-related contingent consideration relates to our acquisition of the LED Business and is included in other noncurrent liabilities. The fair value, as measured on a recurring basis, was based on Level 3 measurements, which includes significant inputs not observable in the market. The fair value was estimated 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. Assumptions used in the determination of fair value also included estimates of future revenue and gross profit of the LED Business in Cree’s first four full fiscal quarters following the closing of the acquisition. Generally, changes in the assumptions for projected future revenue, gross profit and volatility would be accompanied by a directionally similar change in the fair value measurement. Conversely, changes in the discount rate would be accompanied by a directionally opposite change in the related fair value measurement. However, due to the contingent consideration having a maximum payout amount, changes in these assumptions would not affect the fair value of the contingent consideration if they increase (decrease) beyond certain amounts. Subsequent to the acquisition date, at each reporting date, the contingent consideration liability is remeasured to fair value with changes recorded in our results of operations. See “Business Acquisition – LED Business.” |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Aug. 27, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments We use currency forward contracts to mitigate our exposure of certain monetary assets and liabilities from changes in currency exchange rates. Realized and unrealized gains and losses on derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating (income) expense. For derivative instruments without hedge accounting designation, in 2021, we recognized net realized losses of $2.3 million and net unrealized gains on the change in the fair value of the non-designated forward contracts of $2.1 million. In 2020, we recognized realized gains of $11.1 million and net unrealized gains on the change in the fair value of the non-designated forward contracts of $0.3 million. In 2019, we recognized net realized losses in the amount of $2.6 million and net unrealized losses on the change in the fair value of the non-designated forward contracts in the amount of $0.1 million. |
Equity Plans
Equity Plans | 12 Months Ended |
Aug. 27, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Equity Plans | Equity Plans Our Amended and Restated 2017 Share Incentive Plan (as amended, the “2017 Plan”) provides for the issuance of equity awards to our employees, directors and consultants. Such awards include both incentive and non-qualified options, share appreciation rights, restricted share awards (“RSAs”), restricted share units (“RSUs”) and performance-based awards such as performance-based restricted stock awards (“PRSAs”) and performance-based restricted share units (“PSUs”). As of August 27, 2021, 2.0 million of our ordinary shares were available for issuance under the 2017 Plan. Our 2021 Share Inducement Plan (the “Inducement Plan” and together with the 2017 Plan, our “SGH Plans”) provides for the issuance of equity awards to provide inducements for certain individuals to enter into employment with us within the meaning of Rule 5635(c)(4) of the Nasdaq Marketplace Rules, and to motivate such persons to contribute to, and to enable them to share in any long-term growth and financial success we may experience. Such awards include options, share appreciation rights, RSAs, RSUs and performance-based awards such as PRSAs and PSUs. As of August 27, 2021, 0.9 million of our ordinary shares were available for issuance under the Inducement Plan. Our employee share purchase plan (“ESPP”) has been offered to substantially all employees since April 2018 and generally permits eligible employees to purchase our ordinary shares through payroll deductions of up to 15% of their eligible compensation, subject to certain limitations. As of August 27, 2021, 0.8 million of our ordinary shares were available for issuance under the ESPP. Options granted under the SGH Plans have an exercise price not less than the fair market value of a share of our common stock on the date of grant. Options and RSUs generally vest over a period of four years, and options generally have a ten-year eight-year Restricted Share Awards and Restricted Share Units Awards (“Restricted Awards”) Shares Weighted Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Outstanding as of August 28, 2020 1,273 $ 26.19 $ 31,721 Granted 2,325 $ 39.19 Vested (591 ) $ 26.63 Forfeited and cancelled (188 ) $ 36.18 Outstanding as of August 27, 2021 2,819 $ 36.16 $ 134,425 Aggregate Restricted Award activity and assumptions were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Awards granted 2,325 840 652 Weighted average grant-date fair value per share $ 39.19 $ 24.41 $ 24.22 Aggregate vesting-date fair value of shares vested $ 21,381 $ 12,464 $ 6,837 In May 2020, we granted a PRSA that had both service and performance conditions. As of August 28, 2020, we deemed it was probable that the service condition would be met, and the attainment of the performance condition for this award was probable. On October 20, 2020, we modified this award, as well as another time-based award, each for our former CEO, to accelerate the remaining service-based vesting requirements such that they became fully vested as of the acceleration date. These modifications resulted in additional share-based compensation expense in the first quarter of 2021 of $5.8 million. As of August 27, 2021, total aggregate unrecognized compensation costs for unvested Restricted Awards was $87.6 million, which was expected to be recognized over a weighted average period of 3.02 years. Share Options As of August 27, 2021, there were 1.9 million share options outstanding, which are generally exercisable in increments of either one-fourth or one-third per year beginning one year from the date of grant. Share options generally expire seven to ten years from the date of grant. The total intrinsic value for options exercised was $8.6 million, $3.0 million and $7.4 million in 2021, 2020 and 2019, respectively. Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding as of August 28, 2020 2,109 $ 29.45 6.95 $ 7,225 Granted 250 $ 26.99 Exercised (434 ) $ 26.09 Forfeited and cancelled (36 ) $ 28.98 Outstanding as of August 27, 2021 1,889 $ 29.91 6.33 $ 33,602 Exercisable as of August 27, 2021 957 $ 29.33 5.69 $ 17,572 S hare option activity and assumptions were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Share options granted 250 963 356 Weighted average grant-date fair value per share $ 13.30 $ 11.46 $ 10.16 Average expected term in years 6.25 6.25 6.25 Weighted-average expected volatility 52.07 % 49.18 % 42.47 % Weighted-average risk-free interest rate 0.49 % 1.32 % 2.51 % Expected dividend yield — — — The fair value of share options is estimated on the date of grant using the Black-Scholes option pricing model. 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. 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 is based on the average U.S. Treasury yield curve at the end of the quarter in which the option was granted. As of August 27, 2021, total aggregate unrecognized compensation costs for unvested options was $6.4 million, which was expected to be recognized over a weighted average period of 1.6 years. In March 2018, we granted two performance-based options that contained a stock market index as a benchmark for performance (“Market-Based Options”). 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 our ordinary shares. If the target price is not achieved by the end of 4th or 7th anniversary of the respective grant date, the options will expire. The fair value of Market-Based Options was determined by using a Monte Carlo valuation model, using the following assumptions: expected term of 1.10-4.00 years, expected volatility of 46.29%, risk-free interest rate of 2.75% and no expected dividends. One of the Market-Based Options was cancelled in November 2019, resulting in an additional $2.0 million share-based compensation expense recorded in the first quarter of 2020. In August 2020, we modified the terms of the remaining Market-Based Option to remove one of the service conditions to allow the continuation of vesting of the unvested options subject to the remaining service condition. The modification resulted in an updated fair value using the Monte Carlo valuation model, with the following assumptions: expected volatility of 56.07% and risk-free interest rate of 0.34%. The modification of this Market-Based Option, as well as a time-based option also granted in March 2018, resulted in the reversal of $2.3 million share-based compensation expense in the fourth quarter of 2020. Employee Share Purchase Plan The SMART Global Holdings, Inc. Employee Share Purchase Plan has been offered to substantially all employees since April 2018 and generally permits eligible employees to purchase our ordinary shares through payroll deductions of up to 15% of their eligible compensation, subject to certain limitations. The purchase price of the shares under the ESPP equals 85% of the lower of the fair market value of our ordinary shares on either the first or last day of each offering period, which is generally six months. Compensation expense is calculated as of the beginning of the offering period as the fair value of the employees’ purchase rights utilizing the Black-Scholes option valuation model and is recognized over the offering period. Under the ESPP, employees purchased 0.2 million ordinary shares for $3.6 Share- B ased Compensation Expense Year ended August 27, 2021 August 28, 2020 August 30, 2019 Share-based compensation expense by caption: Cost of sales $ 4,593 $ 3,022 $ 2,485 Research and development 4,429 3,069 2,654 Selling, general and administrative 24,855 12,625 13,060 $ 33,877 $ 18,716 $ 18,199 Income tax benefits related to the tax deductions for share-based awards are recognized only upon the settlement of the related share-based awards. Share-based compensation expense in 2021, 2020 and 2019 reflects de minimis income tax benefits, which is consistent with our treatment of income or loss from our U.S. operations. |
Employee Savings and Retirement
Employee Savings and Retirement Plan | 12 Months Ended |
Aug. 27, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Savings and Retirement Plan | Employee Savings and Retirement Plan We have a 401(k) retirement plan under which U.S. employees may contribute up to 60% of their eligible pay, subject to Internal Revenue Service annual contribution limits, to various savings alternatives, none of which include direct investment in the Company’s shares. We may make matching contributions, which vest immediately, at our discretion. Contribution expense for the 401(k) plan was $3.4 million, $2.3 million and $2.0 million in 2021, 2020 and 2019, respectively. |
Revenue and Customer Contract B
Revenue and Customer Contract Balances | 12 Months Ended |
Aug. 27, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue and Customer Contract Balances | Revenue and Customer Contract Balances We disaggregate revenue by segment and geography and by product and service revenue. See “Segment and Other Information.” Net Sales and Gross Billings Net sales by products and services and gross amounts billed for services, including those services in which we act as an agent for our customers, were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Net sales: Products $ 1,465,765 $ 1,090,173 $ 1,169,472 Services 35,377 32,204 42,527 $ 1,501,142 $ 1,122,377 $ 1,211,999 Gross billings in connection with services: Services $ 35,377 $ 32,204 $ 42,527 Cost of materials (1) 751,985 604,698 946,303 $ 787,362 $ 636,902 $ 988,830 (1) Included in gross billings in connection with services are amounts billed to customers for the cost of materials procured in an agent capacity in connection with our procurement, logistics, inventory management, temporary warehousing, kitting and packaging services. While we take title to inventory under such arrangements, control of such inventory does not transfer to us as we do not, at any point, have the ability to direct the use, and thereby obtain the benefits of, the inventory. Customer Contract Balances As of August 27, 2021 August 28, 2020 Contract assets $ 4,247 $ 5,068 Contract liabilities: Deferred revenue $ 19,271 $ 20,124 Customer advances 15,835 3,917 $ 35,106 $ 24,041 (1) Contract assets are included in other current assets. (2) Contract liabilities are included in other current liabilities and noncurrent liabilities based on the timing of when our customer is expected to take control of the asset or receive the benefit of the service. Contract assets represent amounts recognized as revenue for which we do not have the unconditional right to consideration. Contract assets as of August 27, 2021 related to amounts expected to be invoiced during the next 12 months. Contract assets of $5.1 million as of August 28, 2020 were invoiced during 2021. Deferred revenue related to amounts received from customers in advance of satisfying performance obligations. As of August 27, 2021, we expect to recognize revenue of $14.1 million of the balance of $19.3 million in the next 12 months, and the remaining amount thereafter. In 2021, we recognized revenue of $17.3 million from satisfying performance obligations related to amounts included in deferred revenue as of August 28, 2020. Customer advances represent amounts received from customers for advance payments to secure product and services within the next 12 months. As of August 27, 2021, other current liabilities included $24.9 million for estimates of consideration payable to customers, including estimates for pricing adjustments and returns. |
Other Operating (Income) Expens
Other Operating (Income) Expense | 12 Months Ended |
Aug. 27, 2021 | |
Other Income And Expenses [Abstract] | |
Other Operating (Income) Expense | Other Operating (Income) Expense In the fourth quarter of 2021, we initiated plans that included workforce reductions and the elimination of certain projects in our Intelligent Platforms Solutions segment. In connection therewith, we recorded restructure charges of $2.1 million, primarily for employee severance costs and other benefits. We do not expect additional costs to be incurred in connection with these restructure actions and, as of August 27, 2021, $0.5 million remained unpaid. In the fourth quarter of 2020, we initiated plans to cease manufacturing and selling our battery product line. In connection therewith, we recorded restructure charges in our Memory Solutions segment of $3.5 million, including $2.7 million of asset impairment, $0.4 million of receivables for value-added taxes and $0.4 million for contract termination costs. We do not expect additional costs to be incurred in connection with these restructure actions and, as of August 27, 2021, no amounts remained outstanding or unpaid. |
Other Non-operating (Income) Ex
Other Non-operating (Income) Expense | 12 Months Ended |
Aug. 27, 2021 | |
Nonoperating Income Expense [Abstract] | |
Other Non-operating (Income) Expense | Other Non-operating (Income) Expense Year ended August 27, 2021 August 28, 2020 August 30, 2019 Foreign currency (gains) losses $ 719 $ 3,408 $ 3,148 Loss from remeasurement of Capped Calls — 7,719 — Loss on extinguishment of debt — 6,822 — Other (1,094 ) (979 ) (987 ) $ (375 ) $ 16,970 $ 2,161 Foreign currency (gains) and losses relate primarily to our Brazil operating subsidiaries. The loss from remeasurement of our Capped Calls resulted from the reclassification of the Capped Calls from a noncurrent derivative asset to additional paid in capital in an amount equal to their fair value as of March 30, 2020. See “Equity.” In February 2020, we used $208.7 million from the net proceeds from the offering of the 2026 Notes to repay in full our then-outstanding term loans under our Amended Credit Agreement, including the payment of accrued interest, premiums, related fees and expenses. Related unamortized debt discounts and issuance costs of $4.6 million were charged to operations in connection with the extinguishment. As a result, we recognized a loss on the extinguishment of debt of $6.6 million. In the third quarter of 2020, we restructured our Amendment Credit Agreement and recognized debt extinguishment losses of $0.2 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 27, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax provision (benefit) consisted of the following: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Income (loss) before income taxes: U.S. $ (28,326 ) $ (13,120 ) $ 4,279 Foreign 66,298 22,480 61,925 $ 37,972 $ 9,360 $ 66,204 Income tax provision (benefit): Current: Federal $ — $ — $ (163 ) State 623 143 120 Foreign 18,022 12,164 15,633 18,645 12,307 15,590 Deferred: Federal (13 ) 258 (1,445 ) State 3 37 229 Foreign (3,169 ) (2,099 ) 498 (3,179 ) (1,804 ) (718 ) $ 15,466 $ 10,503 $ 14,872 In applying the statutory tax rate in the effective income tax rate reconciliation, we used the U.S. statutory tax rate, rather than the Cayman Islands zero percent tax rate. The table below reconciles our tax provision (benefit) based on the U.S. federal statutory rate to our effective rate: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Statutory tax rate 21.0 % 21.0 % 21.0 % Foreign income taxes at different rates 19.9 % 58.5 % 1.3 % State income tax, net of federal benefit 4.2 % 3.5 % 3.6 % Tax on uncertain tax positions 0.1 % 0.6 % 0.1 % Change in valuation allowance 26.9 % 22.4 % (3.0 )% Non-deductible expenses (non-taxable income) (5.7 )% 5.1 % (0.8 )% Brazil financial credit incentive (26.9 )% — — Other 1.1 % 1.1 % 0.3 % Effective income tax rate 40.6 % 112.2 % 22.5 % Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes as well as carryforwards. Net deferred tax assets are included in other noncurrent assets and consisted of the following: As of August 27, 2021 August 28, 2020 Deferred tax assets: Accruals and allowances $ 22,629 $ 6,316 Share-based compensation 8,581 6,284 Research and other tax credit carryforwards 8,971 7,155 Property and equipment — 244 Operating lease liability 7,721 4,473 Tax amortizable goodwill 7,086 — Net operating loss carryforwards 29,834 31,920 Gross deferred tax assets 84,822 56,392 Less valuation allowance (49,154 ) (38,921 ) Deferred tax assets, net of valuation allowance 35,668 17,471 Deferred tax liabilities: Right-of-use assets (7,280 ) (4,199 ) Property and equipment (14,078 ) — Intangible assets (9,643 ) (10,117 ) Deferred tax liabilities (31,001 ) (14,316 ) Net deferred tax assets $ 4,667 $ 3,155 As of August 27, 2021, we had U.S. federal and state net operating loss carryforwards of $120.1 Activity related to our deferred tax valuation allowance was as follows: Balance at Beginning of Period Charged (Credited) to Operations Charged to Other Accounts Business Acquisitions Balance at End of Period Deferred tax valuation allowance: Year ended August 27, 2021 $ 38,921 $ 10,234 $ — $ — $ 49,155 Year ended August 28, 2020 36,722 2,199 — — 38,921 Year ended August 30, 2019 32,497 (3,415 ) — 7,640 36,722 In connection with our acquisition of SMART EC in 2019, we recognized a deferred tax asset valuation allowance of $7.6 million. See “Business Acquisitions – SMART EC.” Our valuation allowance on deferred tax assets primarily relates to our U.S. net operating loss carryforwards and tax credit carryforwards and Netherlands net operating loss carryforwards. The increase in valuation allowance of $10.2 million is primarily attributable to the valuation allowance on deferred tax assets related to the LED Business subsequent to the date of acquisition. We intend to maintain a valuation allowance until sufficient positive evidence exists to support the realizations of such deferred tax assets. Provisions have been made for deferred income taxes on undistributed earnings of foreign subsidiaries to the extent that dividend payments by such foreign subsidiaries are expected to result in additional tax liability. The undistributed foreign earnings would not be included in U.S. taxable income because the U.S. subsidiaries are not direct or indirect shareholders of these foreign subsidiaries. SGH, a Cayman Islands entity, is the indirect holding company for which the Cayman Islands do not assess income taxes. The foreign country withholding taxes on undistributed foreign earnings would have an insignificant impact on our consolidated results if it were to be distributed to SGH due to foreign tax laws and rulings. Effective February 1, 2011, SMART Brazil began to participate in PADIS. This program is specifically designed to promote the development of the local semiconductor industry. The Brazilian government has approved multiple applications for different products by SMART Brazil for certain beneficial tax treatment under the PADIS incentive. This beneficial tax treatment includes a reduction in the Brazil statutory income tax rate from 34% to 9% on taxable income for the Brazilian semiconductor operations of SMART Brazil. We have operations in Malaysia, where we have tax incentive arrangements for our pioneer status activities and our global supply chain business. The statutory tax rate for Malaysia is 24%. These arrangements are scheduled to expire in August 2028 and are subject to certain conditions, for which we have complied in 2021, 2020 and 2019. The effect of these tax incentive arrangements reduced our income tax provision, as compared to the statutory rates of Malaysia and Brazil, by $15.6 Below is a reconciliation of the beginning and ending amount of our unrecognized tax benefits: Year ended August 27, 2021 August 28, 2020 Beginning unrecognized tax benefits $ 16,514 $ 15,037 Increases related to prior year tax provisions — 67 Decreases related to prior year tax provisions (397 ) — Increases related to current year tax provisions 1,337 1,410 Ending unrecognized tax benefits $ 17,454 $ 16,514 As of August 27, 2021 and August 28, 2020, the total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, was $1.8 We and our subsidiaries file income tax returns with the U.S. federal government, various U.S. states and various foreign jurisdictions throughout the world. We regularly engage in discussions and negotiations with tax authorities regarding tax matters, including transfer pricing, and we continue to defend any and all such claims presented. Our U.S. federal and state tax returns remain open to examination for 2005 through 2020. In addition, tax returns that remain open to examination in non-U.S. subsidiaries, including Malaysia, Brazil, Luxembourg, United Kingdom, Hong Kong and China vary by country. We believe that adequate amounts of taxes and related interest and penalties have been provided, and any adjustments as a result of examinations are not expected to materially adversely affect our business, results of operations or financial condition. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Aug. 27, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Year ended August 27, 2021 August 28, 2020 August 30, 2019 Net income (loss) attributable to SGH – Basic and Diluted $ 21,310 $ (1,143 ) $ 51,332 Weighted-average shares outstanding – Basic 24,279 23,994 22,959 Dilutive effect of equity plans and convertible notes 1,513 — 509 Weighted-average shares outstanding – Diluted 25,792 23,994 23,468 Earnings (loss) per share: Basic $ 0.88 $ (0.05 ) $ 2.24 Diluted $ 0.83 $ (0.05 ) $ 2.19 Below are potentially dilutive shares, as of the end of the periods shown, that were not included in the computation of diluted earnings per share because to do so would have been antidilutive: As of August 27, 2021 August 28, 2020 August 30, 2019 Equity plans 1,481 1,333 1,549 Convertible notes — 6,156 — 1,481 7,489 1,549 We have the option to pay cash, issue shares, or any combination thereof for the aggregate amount due upon any conversion of our 2026 Notes. It is our intent to settle the principal amount of the 2026 Notes in cash upon any conversion. As a result, only the amounts payable in excess if the principal amounts upon conversion of the 2026 Notes are considered in diluted earnings per share under the treasury stock method. As a result, the 2026 Notes would be dilutive when the average share price of the Company’s ordinary shares for a reporting period exceeds the conversion price of the 2026 Notes of $40.61 per share. See “Debt – Convertible Senior Notes.” |
Segment and Other Information
Segment and Other Information | 12 Months Ended |
Aug. 27, 2021 | |
Segment Reporting [Abstract] | |
Segment and Other Information | Segment and Other Information Segment information presented below is consistent with how our chief operating decision maker evaluates operating results to make decisions about allocating resources and assessing performance. In the fourth quarter of 2021, we reorganized SGH into three business units: Memory Solutions, Intelligent Platforms Solutions and LED Solutions. Two of our previous segments, specialty memory products and Brazil products, have been combined to become Memory Solutions. Intelligent Platform Solutions was formerly referred to as specialty compute and storage solutions. All prior year information in the tables below has been revised to reflect the change to our three reportable segments. • Memory Solutions : Our Memory Solutions group provides high performance and reliable memory solutions through the design, development and advanced packaging of leading-edge to extended lifecycle products. These specialty products are tailored to meet customer-specific requirements across networking and communications, enterprise storage, computing, including desktop, notebook and server applications, smartphones and other vertical markets. These products are marketed to OEMs and to commercial and government customers. The Memory Solutions group also offers SMART Supply Chain Services, which provides customized, integrated supply chain services to enable our customers to better manage supply chain planning and execution, reduce costs and increase productivity. • Intelligent Platform Solutions (“IPS”) : Our IPS group consists of Penguin Computing and Penguin Edge. Penguin Computing offers specialized platform solutions for high-performance computing, artificial intelligence, machine learning and advanced modeling for technology research. We provide these leading-edge solutions to customers in the government, hyper-scale, energy, financial services and education markets. Penguin Edge encompasses the operations of SMART EC and SMART Wireless and offers solutions for embedded and wireless applications, specializing in high-reliability products for a wide range of customers in government, telecommunications, health care, smart city, network edge and industrial applications. • LED Solutions : Our LED Solutions group offers a broad portfolio of application-optimized LEDs focused on improving on lumen density, intensity, efficacy, optical control and reliability. Backed by expert design assistance and superior sales support, our LED products enable our customers to develop and market LED-based products for lighting, video screens and specialty lighting applications. Our LED Solutions is comprised of the LED business we acquired from Cree, Inc. on March 1, 2021. Segments are determined based on sources of revenue, types of customers and operating performance. There are no differences between the accounting policies for our segment reporting and our consolidated results of operations. Operating expenses directly associated with the activities of a specific segment are charged to that segment. Certain other indirect operating income and expenses are generally allocated to segments based on their respective percentage of net sales. We do not allocate interest, other non-operating (income) expense or taxes to segments. Year ended August 27, 2021 August 28, 2020 August 30, 2019 Net sales: Memory Solutions $ 931,818 $ 857,237 $ 995,441 Intelligent Platform Solutions 344,757 265,140 216,558 LED Solutions 224,567 — — $ 1,501,142 $ 1,122,377 $ 1,211,999 Segment operating income: Memory Solutions $ 91,737 $ 71,867 $ 109,314 Intelligent Platform Solutions 32,931 12,362 3,579 LED Solutions 36,126 — — Total segment operating income 160,794 84,229 112,893 Unallocated: Share-based compensation (33,877 ) (18,716 ) (18,199 ) Change in fair value of contingent consideration (32,400 ) — 2,700 Amortization of intangible assets (20,255 ) (13,654 ) (5,614 ) Flow through of inventory step up (7,090 ) — — Restructure and integration expense (2,054 ) (3,487 ) — Other (9,921 ) (7,042 ) (2,699 ) (105,597 ) (42,899 ) (23,812 ) Consolidated operating income $ 55,197 $ 41,330 $ 89,081 Depreciation included in segment operating income was as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Memory Solutions $ 19,547 $ 19,118 $ 21,132 Intelligent Platform Solutions 3,275 3,659 2,461 LED Solutions 6,034 — — $ 28,856 $ 22,777 $ 23,593 |
Concentrations
Concentrations | 12 Months Ended |
Aug. 27, 2021 | |
Risks And Uncertainties [Abstract] | |
Concentrations | Concentrations Our concentrations of credit risk consists principally of cash and cash equivalents and accounts receivable. Our revenues and related accounts receivable reflect a concentration of activity with certain customers. We generally do not require collateral or other security to support accounts receivable. We perform periodic credit evaluations of our customers to minimize collection risk on accounts receivable and maintain allowances for potentially uncollectible accounts. A significant portion of our net sales is concentrated with a select number of customers. In 2021, 2020 and 2019, sales to our ten largest customers were 65%, 66% and 73%, respectively, of total net sales. As of August 27, 2021, three customers accounted for 16%, 10% and 10%, respectively, of accounts receivable. Net sales to a number of customers exceed 10% of our total net sales in the past three years. Net sales to a Memory Solutions customer were 12%, 17% and 18% of total net sales in 2021, 2020 and 2019, respectively. Net sales to an IPS customer were 10% of total net sales in 2021. Additionally, net sales to another Memory Solutions customer were 11% of total net sales in 2020; and net sales to two additional Memory Solutions customers were 13% and 11% of total net sales in 2019. No other customers accounted for more than 10% of our total net sales in 2021, 2020 or 2019. We rely on four suppliers for a significant portion of our raw materials. Purchases from these suppliers in 2021, 2020 and 2019 were $1.3 billion, $1.0 billion and $1.2 billion, respectively. At August 27, 2021 and August 28, 2020, accounts payable and accrued expenses included $190.2 million and $139.5 million, respectively, for amounts owed to these suppliers. |
Geographic Information
Geographic Information | 12 Months Ended |
Aug. 27, 2021 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information Net sales by geographic area, based on customer ship-to location, were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 United States $ 601,728 $ 477,975 $ 383,316 Brazil 447,249 390,021 536,510 China 213,989 90,705 129,911 Europe 84,216 37,758 42,497 Other 153,960 125,918 119,765 $ 1,501,142 $ 1,122,377 $ 1,211,999 Long-lived assets by geographic area, including property and equipment and right-of-use assets, were as follows: As of August 27, 2021 August 28, 2020 Brazil $ 63,858 $ 37,601 China 61,405 — United States 56,746 28,775 Malaysia 11,329 10,318 Other 3,797 3,024 $ 197,135 $ 79,718 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 27, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Since our inception over 30 years ago, SMART Global Holdings, Inc. (“SGH” or “Company”) has grown into a diversified group of businesses focused on the design and manufacture of specialty solutions for the computing, memory and LED markets. Our success is based on a customer-focused approach characterized by a commitment to quality, advanced technical expertise, quick time-to-market, build-to-order flexibility and excellence in customer service. The accompanying consolidated financial statements include SGH and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America. Intercompany balances and transactions have been eliminated in consolidation. Reclassifications : Certain reclassifications have been made to prior period amounts to conform to current period presentation, including, among others, presenting: (i) treasury shares separate from additional paid-in-capital in the consolidated balance sheets and consolidated statements of shareholders’ equity; (ii) components of accounts payable and accrued expenses in the consolidated balance sheet and footnotes; (iii) components of property and equipment in the footnotes; and (iv) the operating cash flow impacts of reclassifications in consolidated statements of cash flows. Fiscal Year : Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2021, 2020 and 2019 each contained 52 weeks. All period references are to our fiscal periods unless otherwise indicated. All financial information for our subsidiaries in Brazil is included in our consolidated financial statements on a one-month lag because their fiscal years end on July 31 of each year. Out-of-Period Adjustment : During the second quarter of 2021, we 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, $0.8 million increase in interest expense and $1.7 million benefit for income taxes. The adjustment was not considered material to the interim or annual consolidated financial statements for the year ended August 27, 2021 nor to any previously issued interim or annual consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include highly liquid short-term investments, readily convertible to known amounts of cash, with original maturities of three months or less. |
Derivative Instruments | Derivative Instruments We use derivative instruments to manage our exposure to changes in currency exchange rates from certain monetary assets and liabilities denominated in currencies other than the U.S. dollar. Derivative instruments are measured at their fair values and recognized as either assets or liabilities. The accounting for changes in the fair value of derivative instruments is based on the intended use of the derivative and the resulting designation. For derivative instruments that are not designated for hedge accounting, gains or losses from changes in fair values are recognized in other non-operating (income) expense. We do not use foreign currency contracts for speculative or trading purposes. |
Fair Value Measurements | Fair Value Measurements We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. U.S. GAAP has established a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that can be obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party might use in pricing an asset or liability. The fair value hierarchy is categorized into three levels, based on the reliability of inputs, as follows: • Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities; • Level 2 – Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and • Level 3 – Valuations based on unobservable inputs for the asset or liability. |
Functional Currency | Functional Currency Our primary functional currency is the U.S. dollar. Gains and losses from the remeasurement of non-functional currency balances are recorded in non-operating (income) expense. The functional currency of our subsidiaries in Brazil is the Brazilian real. Assets and liabilities of our Brazil subsidiaries are translated into U.S. dollars each period at the current exchange rate, while revenues and expenses are translated at the average exchange rate prevailing during the period. Cumulative translation gains and losses are included in accumulated other comprehensive income (loss). |
Goodwill | Goodwill We test goodwill for impairment in the fourth quarter of each year, or more frequently if indicators of an impairment exist, to determine whether it is more likely than not that the fair value of the reporting unit with goodwill is less than its carrying value. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting the fair value of the reporting unit. No impairment of goodwill was recognized through August 27, 2021. |
Government Incentives | Government Incentives We receive incentives from governmental entities related to certain expenses and other activities. These government incentives may require that we meet or maintain specified spending levels and other operational metrics and are recorded in the financial statements in accordance with their purpose. Incentives related to specific operating activities are recorded against the related expense in the period the expense is incurred. Government incentives received prior to being earned are included in other current liabilities, whereas government incentives earned prior to being received are included in other current assets. Cash received from government incentives related to operating expenses is included as an operating activity in the consolidated statement of cash flows. |
Income Taxes | Income Taxes We recognize current and deferred income taxes based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences and carryforwards recognized for financial reporting and income tax purposes. Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, utilizing tax rates that are expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. We recognize valuation allowances to reduce deferred tax assets to the amount that we estimate, based on available evidence and management judgment, will more likely than not be realized. We record a valuation allowance in the period the determination is made that all or part of the net deferred tax assets will not be realized. We record interest and penalties related to unrecognized tax benefits in tax expense. |
Intangible Assets | Intangible Assets Intangible assets are stated at cost and amortized on a straight-line basis over their estimated useful lives of generally four to eight years for technology, four to eight years for customer relationships, five to seven years for trademarks/tradenames and less than one year for order backlog. Intangible assets are retired in the period they become fully amortized. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. In our 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, we evaluate ending inventories for excess quantities and obsolescence, including analyses of sales levels by product family, historical demand and forecasted demand in relation to inventory on hand, competitiveness of product offerings, market conditions and product life cycles. |
Leases | Leases We have operating leases through which we acquire or utilize facilities, offices and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions. In determining the lease term, we assess whether it is reasonably certain we will exercise options to renew or terminate a lease, and when or whether we would exercise an option to purchase the right-of-use asset. Measuring the present value of the initial lease liability requires exercising judgment to determine the discount rate, which we base on interest rates for similar borrowings issued by entities with credit ratings similar to ours. We recognize right-of use assets and corresponding lease liabilities for leases with an initial term of more than 12 months and do not separate lease and non-lease components. Recognized leases are included in operating lease right-of-use assets and corresponding lease liabilities are included in other current liabilities or noncurrent operating lease liabilities. For operating leases of buildings, we account for non-lease components, such as common area maintenance, as a component of the lease and include the components in the initial measurement of our right-of-use assets and corresponding liabilities. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost and depreciated using the straight-line method over estimated useful lives of generally two to five years for equipment, five to forty years for buildings and building improvements and two to five years for furniture, fixtures and software. Land leases are amortized using the straight-line method over their lease terms, which expire from 2057 to 2082. We review the carrying value of property and equipment for impairment when events and circumstances indicate that the carrying value of an asset or group of assets may not be recoverable from the estimated future cash flows expected to result from its use and/or disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the estimated fair value of the assets. |
Research and Development | Research and Development Research and development expenditures are expensed in the period incurred. |
Revenue Recognition | Revenue Recognition We recognize revenue based on the transfer of control of goods and services and apply the following five-step approach: (1) identification of a 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 as performance obligations are satisfied. Product Revenue : Product revenue is generally recognized at a point in time when control of the promised goods is transferred to customers. Contracts with customers are generally short-term in duration at fixed, negotiated prices with payment generally due shortly after delivery. We estimate a liability for returns using the expected value method based on historical rates of return. In addition, we generally offer price protection to our distributors, which is a form of variable consideration that decreases the transaction price. We use the expected value method, based on historical price adjustments and current pricing trends, to estimate the amount of revenue recognized from sales to distributors. Differences between the estimated and actual amounts are recognized as adjustments to revenue. Non-cancellable, nonrefundable customized product sales are recognized over time on a cost incurred basis. In connection with these arrangements, customers obtain control and benefit from the services as they are performed. The terms for these arrangements provide us with a legally enforceable right to receive payment, including a reasonable profit margin upon customer cancellation, for performance completed to date. Accordingly, we recognize revenue over time as we complete the manufacture of these products. A portion of our revenue is derived from the sale of customized products. In certain cases, we recognize revenue when control of the underlying assets passes to the customer when the customer is able to 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 we have a present right to payment. Under the terms of these arrangements, we cannot repurpose products without the customer’s consent and accordingly, we recognize revenue at the point in time when products are completed and made available to the customer. Service Revenue : Our service revenue is derived from supply chain services as well as professional services. Supply chain services includes procurement, logistics, inventory management, temporary warehousing, kitting and packaging. Professional services include solution design, system installation, software automation and managed support services related to high performance computing (“HPC”) and storage systems. A portion of our product sales include extended warranty and on-site services, subscriptions to our HPC environment, professional services, software and related support. Agent Services : We provide certain supply chain services on an agent basis, whereby we procure materials on behalf of our customers and then resell such materials to our customers. Gross amounts invoiced to customers in connection with these agent services include amounts related to the services performed by us in addition to the cost of the materials procured. However, only the amount related to the agent component is recognized as revenue in our results of operations. We generally recognize revenue for these procurement, logistics and inventory management services upon the completion of such services, which typically occurs at the time of shipment of product to the customer. Amounts we invoice to customers for cost of materials related to services performed, which remain unpaid as of the end of a reporting period, are included in accounts receivable. Additionally, cost of materials procured for customers under these agent services, but which remain on hand as of the end of a reporting period, are included in inventories. Amounts in accounts receivable and inventories impact the determination of net cash provided by (or used in) operations. Transaction Price : The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. We allocate 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 our approved list price. A portion of our service revenue is from 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. We allocate the consideration to each performance obligation based on the relative selling price, determined as the best estimate of the price at which we would transact if it sold the deliverable regularly on a stand-alone basis. Contract C osts : As a practical expedient, we recognize 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, we account for shipping and handling costs , if any, that occur after control transfers to the customer as a fulfillment activity. We record shipping and handling costs related to revenue transactions within cost of sales as a period cost. |
Share-based Compensation | Share-Based Compensation Share-based compensation is measured at the grant date, based on the fair value of the award, and recognized as expense under the straight-line attribution method over the requisite service period. We account for forfeitures as they occur. |
Treasury Shares | Treasury Shares Treasury shares are carried at cost. When treasury shares are retired, any excess of the repurchase price paid over par value is allocated between additional capital and retained earnings. |
Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Estimates and judgments are based on historical experience, forecasted events and various other assumptions. Significant items subject to such estimates and assumptions include business acquisitions, income taxes, inventories, goodwill and intangible assets, property and equipment, revenue recognition and share-based compensation. Actual results could differ from the estimates made by management. |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
CreeLED Inc. | |
Schedule of Purchase Price | The purchase price was as follows: Cash $ 50,000 Additional payment for net working capital adjustment (1) 22,398 Fair value of LED Purchase Price Note 125,000 Fair value of Earnout Note 28,100 $ 225,498 (1) Includes $15.3 million paid at closing and $7.1 million paid in the fourth quarter of 2021 upon completion of the review of the net working capital assets acquired and liabilities assumed. |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | The valuation of the LED Business assets acquired and liabilities assumed, noncontrolling interest in subsidiary and consideration was as follows: Cash and cash equivalents $ 36,721 Accounts receivable 45,608 Inventories 60,423 Other current assets 5,204 Property and equipment 70,116 Operating lease right-of-use assets 7,494 Intangible assets 64,500 Other noncurrent assets 26 Accounts payable and accrued expenses (23,673 ) Other current liabilities (27,509 ) Noncurrent operating lease liabilities (4,019 ) Other noncurrent liabilities (1,916 ) Total net assets acquired 232,975 Noncontrolling interest in subsidiary (7,477 ) Consideration $ 225,498 |
Summary of Intangible Assets | The fair values and useful lives of the intangible asset acquired was as follows: Amount Estimated useful life (in years) Technology $ 49,800 7-8 Trademarks/tradenames 6,100 5 Customer relationships 5,200 7-8 Order backlog 3,400 less than 1 $ 64,500 |
Summary of Unaudited Pro Forma Information | The unaudited pro forma financial information for the year ended August 27, 2021 combines our results of operations for the year ended August 27, 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 year ended August 28, 2020 combines our results of operations for the year ended August 28, 2020 and the results of operations of the LED Business for the year ended June 28, 2020. Year ended August 27, 2021 August 28, 2020 Net sales $ 1,705,366 $ 1,555,689 Net loss attributable to SGH (142,319 ) (95,926 ) Earnings (loss) per share: Basic $ (5.86 ) $ (4.00 ) Diluted (5.86 ) (4.00 ) |
Artesyn Embedded Computing, Inc | |
Schedule of Purchase Price | The purchase price was as follows: Cash $ 74,719 Fair value of contingent consideration 2,700 $ 77,419 |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | the assets acquired and liabilities assumed were recorded as of the acquisition date at their respective fair values. Assets acquired and liabilities assumed were as follows: Tangible assets acquired $ 16,482 Intangible assets 41,900 Liabilities assumed (7,840 ) Goodwill 26,877 Total net assets acquired $ 77,419 |
Inforce Computing, Inc | |
Schedule of Purchase Price | The purchase price was as follows: Cash $ 3,157 Fair value of shares issued at closing 9,167 Cash initially retained and paid in 2020 413 Fair value of shares initially retained and issued in 2020 1,618 Cash paid for post-closing adjustments 246 $ 14,601 |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | the assets acquired and liabilities assumed were recorded as of the acquisition date at their respective fair values. Assets acquired and liabilities assumed were as follows: Tangible assets acquired $ 5,266 Intangible assets 6,700 Liabilities assumed (5,643 ) Goodwill 8,278 Total net assets acquired $ 14,601 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | As of August 27, 2021 August 28, 2020 Raw materials $ 163,610 $ 89,943 Work in process 92,901 16,672 Finished goods 107,090 56,376 $ 363,601 $ 162,991 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | As of August 27, 2021 August 28, 2020 Equipment $ 182,493 $ 113,035 Buildings and building improvements 53,502 26,498 Furniture, fixtures and software 32,114 21,528 Land 16,126 1,208 284,235 162,269 Accumulated depreciation (127,969 ) (107,564 ) $ 156,266 $ 54,705 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill by Segment | As of August 27, 2021 As of August 28, 2020 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Intangible assets: Technology $ 61,307 $ (9,142 ) $ 10,350 $ (3,085 ) Customer relationships 57,500 (22,393 ) 52,300 (12,899 ) Trademarks/tradenames 19,200 (6,628 ) 13,100 (4,095 ) Order backlog 3,800 (2,571 ) 400 (400 ) $ 141,807 $ (40,734 ) $ 76,150 $ (20,479 ) Goodwill by segment: Intelligent Platform Solutions $ 40,401 $ 40,401 Memory Solutions 33,854 33,554 $ 74,255 $ 73,955 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Payables And Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | As of August 27, 2021 August 28, 2020 Accounts payable (1) $ 429,640 $ 224,660 Salaries, wages and benefits 37,795 16,862 Income and other taxes 14,319 7,495 Other 2,353 4,346 $ 484,107 $ 253,363 (1) Includes accounts payable for property and equipment of $3.1 million and $1.8 million as of August 27, 2021 and August 28, 2020, respectively. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | As of August 27, 2021 August 28, 2020 Convertible Senior Notes $ 203,992 $ 195,573 LED Purchase Price Note 125,000 — ABL Credit Agreement 25,000 — Other 11,846 — 365,838 195,573 Less current debt (25,354 ) — Long-term debt $ 340,484 $ 195,573 |
Summary of Maturities of Debt | As of August 27, 2021, maturities of debt were as follows: 2022 $ 354 2023 127,122 2024 2,122 2025 2,122 2026 252,122 Thereafter 3,004 Less unamortized discount and issuance costs (46,008 ) $ 340,838 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Leases [Abstract] | |
Summary of Components of Operating Lease Expense | The components of operating lease expense were as follows: Year ended August 27, 2021 August 28, 2020 Fixed lease cost $ 9,377 $ 6,743 Variable lease cost 1,445 842 Short-term lease cost 288 295 $ 11,110 $ 7,880 |
Schedule of Minimum Payments of Lease Liabilities | Minimum payments of lease liabilities as of August 27, 2021 were as follows: 2022 $ 12,319 2023 10,553 2024 7,342 2025 5,151 2026 3,599 2027 and thereafter 15,498 54,462 Less imputed interest (11,787 ) Present value of total lease liabilities $ 42,675 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements of Other Assets and Liabilities | Fair value measurements of other assets and liabilities were as follows: As of August 27, 2021 As of August 28, 2020 Fair Value Carrying Value Fair Value Carrying Value Derivative financial instrument assets $ 883 $ 883 $ 112 $ 112 Derivative financial instrument liabilities (50 ) (50 ) (912 ) (912 ) Convertible Senior Notes (335,668 ) (203,992 ) (221,500 ) (195,573 ) LED Purchase Price Note (125,000 ) (125,000 ) — — ABL Credit Agreement (25,000 ) (25,000 ) — — Debt – other (10,702 ) (11,846 ) — — Acquisition-related contingent consideration (60,500 ) (60,500 ) — — The fair values of our derivative financial instruments, as measured on a recurring basis, were based Level 2 measurements, including market-based observable inputs of currency exchange spot and forward rates, interest rates and credit-risk spreads. The fair value of our Convertible Senior Notes (excluding the value of the equity component of our convertible notes), as measured on a non-recurring basis, was determined based on Level 2 measurements, including the trading price of the convertible notes. The fair values of our LED Purchase Price Note, ABL Credit Agreement and other debt, as measured on a non-recurring basis, were estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours. Acquisition-related contingent consideration relates to our acquisition of the LED Business and is included in other noncurrent liabilities. The fair value, as measured on a recurring basis, was based on Level 3 measurements, which includes significant inputs not observable in the market. The fair value was estimated 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. Assumptions used in the determination of fair value also included estimates of future revenue and gross profit of the LED Business in Cree’s first four full fiscal quarters following the closing of the acquisition. Generally, changes in the assumptions for projected future revenue, gross profit and volatility would be accompanied by a directionally similar change in the fair value measurement. Conversely, changes in the discount rate would be accompanied by a directionally opposite change in the related fair value measurement. However, due to the contingent consideration having a maximum payout amount, changes in these assumptions would not affect the fair value of the contingent consideration if they increase (decrease) beyond certain amounts. Subsequent to the acquisition date, at each reporting date, the contingent consideration liability is remeasured to fair value with changes recorded in our results of operations. See “Business Acquisition – LED Business.” |
Equity Plans (Tables)
Equity Plans (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Share Options | Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding as of August 28, 2020 2,109 $ 29.45 6.95 $ 7,225 Granted 250 $ 26.99 Exercised (434 ) $ 26.09 Forfeited and cancelled (36 ) $ 28.98 Outstanding as of August 27, 2021 1,889 $ 29.91 6.33 $ 33,602 Exercisable as of August 27, 2021 957 $ 29.33 5.69 $ 17,572 |
Assumptions Used to Value Stock Options | S hare option activity and assumptions were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Share options granted 250 963 356 Weighted average grant-date fair value per share $ 13.30 $ 11.46 $ 10.16 Average expected term in years 6.25 6.25 6.25 Weighted-average expected volatility 52.07 % 49.18 % 42.47 % Weighted-average risk-free interest rate 0.49 % 1.32 % 2.51 % Expected dividend yield — — — |
Schedule of Share Based Compensation Expense Allocation | Year ended August 27, 2021 August 28, 2020 August 30, 2019 Share-based compensation expense by caption: Cost of sales $ 4,593 $ 3,022 $ 2,485 Research and development 4,429 3,069 2,654 Selling, general and administrative 24,855 12,625 13,060 $ 33,877 $ 18,716 $ 18,199 |
Restricted Awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of Outstanding Restricted Share Awards and Restricted Share Units Awards | Shares Weighted Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Outstanding as of August 28, 2020 1,273 $ 26.19 $ 31,721 Granted 2,325 $ 39.19 Vested (591 ) $ 26.63 Forfeited and cancelled (188 ) $ 36.18 Outstanding as of August 27, 2021 2,819 $ 36.16 $ 134,425 |
Summary of Aggregate Restricted Award Activity and Assumptions | Aggregate Restricted Award activity and assumptions were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Awards granted 2,325 840 652 Weighted average grant-date fair value per share $ 39.19 $ 24.41 $ 24.22 Aggregate vesting-date fair value of shares vested $ 21,381 $ 12,464 $ 6,837 |
Revenue and Customer Contract_2
Revenue and Customer Contract Balances (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Net Sales by Products and Services and Gross Amounts Billed for Services | Net sales by products and services and gross amounts billed for services, including those services in which we act as an agent for our customers, were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Net sales: Products $ 1,465,765 $ 1,090,173 $ 1,169,472 Services 35,377 32,204 42,527 $ 1,501,142 $ 1,122,377 $ 1,211,999 Gross billings in connection with services: Services $ 35,377 $ 32,204 $ 42,527 Cost of materials (1) 751,985 604,698 946,303 $ 787,362 $ 636,902 $ 988,830 (1) Included in gross billings in connection with services are amounts billed to customers for the cost of materials procured in an agent capacity in connection with our procurement, logistics, inventory management, temporary warehousing, kitting and packaging services. While we take title to inventory under such arrangements, control of such inventory does not transfer to us as we do not, at any point, have the ability to direct the use, and thereby obtain the benefits of, the inventory. |
Summary of Customer Contract Balances | As of August 27, 2021 August 28, 2020 Contract assets $ 4,247 $ 5,068 Contract liabilities: Deferred revenue $ 19,271 $ 20,124 Customer advances 15,835 3,917 $ 35,106 $ 24,041 (1) Contract assets are included in other current assets. (2) Contract liabilities are included in other current liabilities and noncurrent liabilities based on the timing of when our customer is expected to take control of the asset or receive the benefit of the service. |
Other Non-operating (Income) _2
Other Non-operating (Income) Expense (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Nonoperating Income Expense [Abstract] | |
Schedule of Other Non-operating (Income) Expense | Year ended August 27, 2021 August 28, 2020 August 30, 2019 Foreign currency (gains) losses $ 719 $ 3,408 $ 3,148 Loss from remeasurement of Capped Calls — 7,719 — Loss on extinguishment of debt — 6,822 — Other (1,094 ) (979 ) (987 ) $ (375 ) $ 16,970 $ 2,161 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) before Income Taxes and Components of Income Tax Provision (Benefit) | Our income tax provision (benefit) consisted of the following: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Income (loss) before income taxes: U.S. $ (28,326 ) $ (13,120 ) $ 4,279 Foreign 66,298 22,480 61,925 $ 37,972 $ 9,360 $ 66,204 Income tax provision (benefit): Current: Federal $ — $ — $ (163 ) State 623 143 120 Foreign 18,022 12,164 15,633 18,645 12,307 15,590 Deferred: Federal (13 ) 258 (1,445 ) State 3 37 229 Foreign (3,169 ) (2,099 ) 498 (3,179 ) (1,804 ) (718 ) $ 15,466 $ 10,503 $ 14,872 |
Effective Income Tax Rate Reconciliation | The table below reconciles our tax provision (benefit) based on the U.S. federal statutory rate to our effective rate: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Statutory tax rate 21.0 % 21.0 % 21.0 % Foreign income taxes at different rates 19.9 % 58.5 % 1.3 % State income tax, net of federal benefit 4.2 % 3.5 % 3.6 % Tax on uncertain tax positions 0.1 % 0.6 % 0.1 % Change in valuation allowance 26.9 % 22.4 % (3.0 )% Non-deductible expenses (non-taxable income) (5.7 )% 5.1 % (0.8 )% Brazil financial credit incentive (26.9 )% — — Other 1.1 % 1.1 % 0.3 % Effective income tax rate 40.6 % 112.2 % 22.5 % |
Net Tax Effects of Temporary Differences Between Bases of Assets and Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes as well as carryforwards. Net deferred tax assets are included in other noncurrent assets and consisted of the following: As of August 27, 2021 August 28, 2020 Deferred tax assets: Accruals and allowances $ 22,629 $ 6,316 Share-based compensation 8,581 6,284 Research and other tax credit carryforwards 8,971 7,155 Property and equipment — 244 Operating lease liability 7,721 4,473 Tax amortizable goodwill 7,086 — Net operating loss carryforwards 29,834 31,920 Gross deferred tax assets 84,822 56,392 Less valuation allowance (49,154 ) (38,921 ) Deferred tax assets, net of valuation allowance 35,668 17,471 Deferred tax liabilities: Right-of-use assets (7,280 ) (4,199 ) Property and equipment (14,078 ) — Intangible assets (9,643 ) (10,117 ) Deferred tax liabilities (31,001 ) (14,316 ) Net deferred tax assets $ 4,667 $ 3,155 |
Summary of Deferred Tax Valuation Allowance | Activity related to our deferred tax valuation allowance was as follows: Balance at Beginning of Period Charged (Credited) to Operations Charged to Other Accounts Business Acquisitions Balance at End of Period Deferred tax valuation allowance: Year ended August 27, 2021 $ 38,921 $ 10,234 $ — $ — $ 49,155 Year ended August 28, 2020 36,722 2,199 — — 38,921 Year ended August 30, 2019 32,497 (3,415 ) — 7,640 36,722 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | Below is a reconciliation of the beginning and ending amount of our unrecognized tax benefits: Year ended August 27, 2021 August 28, 2020 Beginning unrecognized tax benefits $ 16,514 $ 15,037 Increases related to prior year tax provisions — 67 Decreases related to prior year tax provisions (397 ) — Increases related to current year tax provisions 1,337 1,410 Ending unrecognized tax benefits $ 17,454 $ 16,514 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Year ended August 27, 2021 August 28, 2020 August 30, 2019 Net income (loss) attributable to SGH – Basic and Diluted $ 21,310 $ (1,143 ) $ 51,332 Weighted-average shares outstanding – Basic 24,279 23,994 22,959 Dilutive effect of equity plans and convertible notes 1,513 — 509 Weighted-average shares outstanding – Diluted 25,792 23,994 23,468 Earnings (loss) per share: Basic $ 0.88 $ (0.05 ) $ 2.24 Diluted $ 0.83 $ (0.05 ) $ 2.19 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Below are potentially dilutive shares, as of the end of the periods shown, that were not included in the computation of diluted earnings per share because to do so would have been antidilutive: As of August 27, 2021 August 28, 2020 August 30, 2019 Equity plans 1,481 1,333 1,549 Convertible notes — 6,156 — 1,481 7,489 1,549 |
Segment and Other Information (
Segment and Other Information (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Segments are determined based on sources of revenue, types of customers and operating performance. There are no differences between the accounting policies for our segment reporting and our consolidated results of operations. Operating expenses directly associated with the activities of a specific segment are charged to that segment. Certain other indirect operating income and expenses are generally allocated to segments based on their respective percentage of net sales. We do not allocate interest, other non-operating (income) expense or taxes to segments. Year ended August 27, 2021 August 28, 2020 August 30, 2019 Net sales: Memory Solutions $ 931,818 $ 857,237 $ 995,441 Intelligent Platform Solutions 344,757 265,140 216,558 LED Solutions 224,567 — — $ 1,501,142 $ 1,122,377 $ 1,211,999 Segment operating income: Memory Solutions $ 91,737 $ 71,867 $ 109,314 Intelligent Platform Solutions 32,931 12,362 3,579 LED Solutions 36,126 — — Total segment operating income 160,794 84,229 112,893 Unallocated: Share-based compensation (33,877 ) (18,716 ) (18,199 ) Change in fair value of contingent consideration (32,400 ) — 2,700 Amortization of intangible assets (20,255 ) (13,654 ) (5,614 ) Flow through of inventory step up (7,090 ) — — Restructure and integration expense (2,054 ) (3,487 ) — Other (9,921 ) (7,042 ) (2,699 ) (105,597 ) (42,899 ) (23,812 ) Consolidated operating income $ 55,197 $ 41,330 $ 89,081 Depreciation included in segment operating income was as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 Memory Solutions $ 19,547 $ 19,118 $ 21,132 Intelligent Platform Solutions 3,275 3,659 2,461 LED Solutions 6,034 — — $ 28,856 $ 22,777 $ 23,593 |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Aug. 27, 2021 | |
Segment Reporting [Abstract] | |
Summary of Net Sales and Long-lived Assets by Geographic Area Including Property and Equipment and Right-of-use Assets | Net sales by geographic area, based on customer ship-to location, were as follows: Year ended August 27, 2021 August 28, 2020 August 30, 2019 United States $ 601,728 $ 477,975 $ 383,316 Brazil 447,249 390,021 536,510 China 213,989 90,705 129,911 Europe 84,216 37,758 42,497 Other 153,960 125,918 119,765 $ 1,501,142 $ 1,122,377 $ 1,211,999 Long-lived assets by geographic area, including property and equipment and right-of-use assets, were as follows: As of August 27, 2021 August 28, 2020 Brazil $ 63,858 $ 37,601 China 61,405 — United States 56,746 28,775 Malaysia 11,329 10,318 Other 3,797 3,024 $ 197,135 $ 79,718 |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Feb. 26, 2021 | Aug. 27, 2021 | Aug. 30, 2019 | |
Significant Accounting Policies [Line Items] | |||
Tax Adjustments, Settlements, and Unusual Provisions | $ 1,700,000 | ||
Goodwill impairment loss | $ 0 | ||
Intangible assets estimated useful lives | 6 years 8 months 12 days | 4 years 9 months 18 days | |
Amortization period | 12 months | ||
Minimum | Equipment | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 2 years | ||
Minimum | Building and Building Improvements | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 5 years | ||
Minimum | Furniture, Fixtures and Software | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 2 years | ||
Minimum | Land | |||
Significant Accounting Policies [Line Items] | |||
Lease term, expiration year | 2057 | ||
Maximum | Equipment | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 5 years | ||
Maximum | Building and Building Improvements | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 40 years | ||
Maximum | Furniture, Fixtures and Software | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 5 years | ||
Maximum | Land | |||
Significant Accounting Policies [Line Items] | |||
Lease term, expiration year | 2082 | ||
Technology | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 4 years | ||
Technology | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 8 years | ||
Customer Relationships | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 4 years | ||
Customer Relationships | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 8 years | ||
Trademarks/Tradenames | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 5 years | ||
Trademarks/Tradenames | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 7 years | ||
Order Backlog | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 1 year | ||
Cost of Sales | |||
Significant Accounting Policies [Line Items] | |||
Prior Period Reclassification Adjustment | 4,300,000 | ||
Interest Expense | |||
Significant Accounting Policies [Line Items] | |||
Prior Period Reclassification Adjustment | $ 800,000 |
Recently Adopted Accounting S_2
Recently Adopted Accounting Standards - Additional Information (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Nov. 27, 2020 | Aug. 28, 2020 | Nov. 29, 2019 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 40,869 | $ 25,013 | ||
Operating lease, liability | $ 42,675 | |||
ASU 2016-13 | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Aug. 29, 2020 | |||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | |||
ASU 2016-02 | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Aug. 31, 2019 | |||
Operating lease right-of-use assets | $ 24,300 | |||
Operating lease, liability | $ 25,000 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands | Mar. 01, 2021 | Oct. 18, 2020 | Jul. 31, 2019 | Aug. 27, 2021 | Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 |
Business Acquisition [Line Items] | |||||||
Change in fair value of contingent consideration | $ 32,400,000 | $ (2,700,000) | |||||
Acquisition-related contingent consideration | $ 60,500,000 | 60,500,000 | |||||
Intangible assets | 65,700,000 | $ 65,700,000 | $ 48,600,000 | ||||
Intangible assets estimated useful lives | 6 years 8 months 12 days | 4 years 9 months 18 days | |||||
Customer Relationships | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 4 years | ||||||
Customer Relationships | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 8 years | ||||||
Technology | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 4 years | ||||||
Technology | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 8 years | ||||||
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 | ||||||
Business combination, consideration transferred, equity interests issued and issuable | 125,000,000 | $ 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 | ||||||
Fair value of contingent consideration | 28,100,000 | ||||||
Acquisition date, provisional fair value of assets and liabilities | Mar. 1, 2021 | ||||||
Net sales | 224,600,000 | $ 1,705,366,000 | $ 1,555,689,000 | ||||
Net loss attributable to SGH | 16,300,000 | (142,319,000) | (95,926,000) | ||||
Purchase price | 225,498,000 | ||||||
Intangible assets | 64,500,000 | ||||||
CreeLED Inc. | Customer Relationships | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 5,200,000 | ||||||
CreeLED Inc. | Customer Relationships | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 7 years | ||||||
CreeLED Inc. | Customer Relationships | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 8 years | ||||||
CreeLED Inc. | Technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 49,800,000 | ||||||
CreeLED Inc. | Technology | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 7 years | ||||||
CreeLED Inc. | Technology | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 8 years | ||||||
CreeLED Inc. | Selling, General and Administrative Expenses | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition-related transaction expenses | 5,300,000 | 1,100,000 | |||||
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 | ||||||
Change in fair value of contingent consideration | 32,400,000 | ||||||
Acquisition-related contingent consideration | $ 60,500,000 | $ 60,500,000 | |||||
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% | ||||||
SMART EC | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business, in cash | $ 74,719,000 | ||||||
Business combination maximum earn out payment based on specific revenue achievement | 10,000,000 | ||||||
Fair value of contingent consideration | 2,700,000 | ||||||
Purchase price | $ 77,419,000 | ||||||
Business combination additional earn out payments rate for each dollar of gross revenue | $ 0.10 | ||||||
Intangible assets | $ 41,900,000 | ||||||
SMART EC | Customer Relationships | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 31,800,000 | ||||||
SMART EC | Customer Relationships | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 4 years | ||||||
SMART EC | Customer Relationships | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets estimated useful lives | 6 years | ||||||
SMART EC | Technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 10,100,000 | ||||||
Intangible assets estimated useful lives | 4 years | ||||||
SMART EC | Selling, General and Administrative Expenses | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition-related transaction expenses | 600,000 | $ 1,000,000 | |||||
SMART Wireless | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business, in cash | $ 3,157,000 | ||||||
Business combination, consideration transferred, equity interests issued and issuable | 9,167,000 | ||||||
Purchase price | 14,601,000 | ||||||
Intangible assets | $ 6,700,000 | ||||||
Shares issued for acquisition | 382,788 | ||||||
Upfront cash payment | 400,000 | ||||||
SMART Wireless | Ordinary shares | Former CEO and Board Members | |||||||
Business Acquisition [Line Items] | |||||||
Aggregate common shares received | 397,407 | ||||||
Common shares valued | $ 9,500,000 | ||||||
Shares issued upon closing | 337,692 | ||||||
SMART Wireless | Post-Closing Adjustments | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business, in cash | $ 700,000 | ||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 1,600,000 | ||||||
Shares issued for acquisition | 67,550 | ||||||
SMART Wireless | Customer Relationships | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 5,800,000 | ||||||
Intangible assets estimated useful lives | 5 years | ||||||
SMART Wireless | Technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 900,000 | ||||||
Intangible assets estimated useful lives | 5 years | ||||||
SMART Wireless | Selling, General and Administrative Expenses | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition-related transaction expenses | $ 200,000 | $ 500,000 |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Purchase Price (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Oct. 18, 2020 | Jul. 31, 2019 |
CreeLED Inc. | |||
Business Acquisition [Line Items] | |||
Payments to acquire business, in cash | $ 50,000 | ||
Additional payment for net working capital adjustment | 22,398 | ||
Fair value of LED Purchase Price Note | 125,000 | ||
Fair value of Earnout Note | 28,100 | ||
Fair value of contingent consideration | 28,100 | ||
Business combination, consideration transferred, equity interests issued and issuable | 125,000 | $ 125,000 | |
Total consideration | $ 225,498 | ||
SMART EC | |||
Business Acquisition [Line Items] | |||
Payments to acquire business, in cash | $ 74,719 | ||
Fair value of contingent consideration | 2,700 | ||
Total consideration | 77,419 | ||
SMART Wireless | |||
Business Acquisition [Line Items] | |||
Payments to acquire business, in cash | 3,157 | ||
Business combination, consideration transferred, equity interests issued and issuable | 9,167 | ||
Cash initially retained and paid in 2020 | 413 | ||
Fair value of shares initially retained and issued in 2020 | 1,618 | ||
Cash paid for post-closing adjustments | 246 | ||
Total consideration | $ 14,601 |
Business Acquisitions - Sched_2
Business Acquisitions - Schedule of Purchase Price (Parenthetical) (Details) - CreeLED Inc. $ in Millions | Aug. 27, 2021USD ($) |
Business Acquisition [Line Items] | |
Assets Acquired | $ 15.3 |
Liabilities assumed | $ 7.1 |
Business Acquisitions - Summary
Business Acquisitions - Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Mar. 01, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | Jul. 31, 2019 |
Business Acquisition [Line Items] | |||||
Intangible assets | $ 65,700 | $ 48,600 | |||
Goodwill | 74,255 | $ 73,955 | |||
CreeLED Inc. | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 36,721 | ||||
Accounts receivable | 45,608 | ||||
Inventories | 60,423 | ||||
Other current assets | 5,204 | ||||
Property and equipment | 70,116 | ||||
Operating lease right-of-use assets | 7,494 | ||||
Intangible assets | 64,500 | ||||
Other noncurrent assets | 26 | ||||
Accounts payable and accrued expenses | (23,673) | ||||
Other current liabilities | (27,509) | ||||
Noncurrent operating lease liabilities | (4,019) | ||||
Other noncurrent liabilities | (1,916) | ||||
Total net assets acquired | 232,975 | ||||
Noncontrolling interest in subsidiary | (7,477) | ||||
Consideration | $ 225,498 | ||||
Liabilities assumed | $ (7,100) | ||||
SMART EC | |||||
Business Acquisition [Line Items] | |||||
Property and equipment | $ 16,482 | ||||
Intangible assets | 41,900 | ||||
Liabilities assumed | (7,840) | ||||
Goodwill | 26,877 | ||||
Total net assets acquired | 77,419 | ||||
SMART Wireless | |||||
Business Acquisition [Line Items] | |||||
Property and equipment | 5,266 | ||||
Intangible assets | 6,700 | ||||
Liabilities assumed | (5,643) | ||||
Goodwill | 8,278 | ||||
Total net assets acquired | $ 14,601 |
Business Acquisitions - Summa_2
Business Acquisitions - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Aug. 27, 2021 | Aug. 30, 2019 |
Business Acquisition [Line Items] | |||
Intangible assets | $ 65,700 | $ 48,600 | |
Intangible assets estimated useful lives | 6 years 8 months 12 days | 4 years 9 months 18 days | |
Technology | Minimum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 4 years | ||
Technology | Maximum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 8 years | ||
Customer Relationships | Minimum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 4 years | ||
Customer Relationships | Maximum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 8 years | ||
Order Backlog | Maximum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 1 year | ||
CreeLED Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 64,500 | ||
CreeLED Inc. | Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 49,800 | ||
CreeLED Inc. | Technology | Minimum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 7 years | ||
CreeLED Inc. | Technology | Maximum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 8 years | ||
CreeLED Inc. | Trademarks/ Tradenames | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 6,100 | ||
CreeLED Inc. | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 5,200 | ||
CreeLED Inc. | Customer Relationships | Minimum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 7 years | ||
CreeLED Inc. | Customer Relationships | Maximum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 8 years | ||
CreeLED Inc. | Order Backlog | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 3,400 | ||
CreeLED Inc. | Order Backlog | Maximum | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 1 year | ||
CreeLED Inc. | Trade Names | |||
Business Acquisition [Line Items] | |||
Intangible assets estimated useful lives | 5 years |
Business Acquisitions - Summa_3
Business Acquisitions - Summary of Unudited Pro Forma Information (Details) - CreeLED Inc. - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Aug. 27, 2021 | Aug. 27, 2021 | Aug. 28, 2020 | |
Business Acquisition [Line Items] | |||
Net sales | $ 224,600 | $ 1,705,366 | $ 1,555,689 |
Net loss attributable to SGH | $ 16,300 | $ (142,319) | $ (95,926) |
Earnings (loss) per share: | |||
Basic | $ (5.86) | $ (4) | |
Diluted | $ (5.86) | $ (4) |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 163,610 | $ 89,943 |
Work in process | 92,901 | 16,672 |
Finished goods | 107,090 | 56,376 |
Total inventories | $ 363,601 | $ 162,991 |
Inventories - Additional Inform
Inventories - Additional Information (Details) | Aug. 27, 2021 | Aug. 28, 2020 |
Inventory Disclosure [Abstract] | ||
Percentage of inventories | 11.00% | 17.00% |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 284,235 | $ 162,269 |
Accumulated depreciation | (127,969) | (107,564) |
Net property and equipment | 156,266 | 54,705 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 182,493 | 113,035 |
Building and Building Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 53,502 | 26,498 |
Furniture, Fixtures and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 32,114 | 21,528 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 16,126 | $ 1,208 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 28.9 | $ 22.8 | $ 23.6 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Schedule of Intangible Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | $ 141,807 | $ 76,150 |
Intangible Assets, Accumulated Amortization | (40,734) | (20,479) |
Goodwill by segment, Gross Amount | 74,255 | 73,955 |
Intelligent Platform Solutions | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill by segment, Gross Amount | 40,401 | 40,401 |
Memory Solutions | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill by segment, Gross Amount | 33,854 | 33,554 |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | 61,307 | 10,350 |
Intangible Assets, Accumulated Amortization | (9,142) | (3,085) |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | 57,500 | 52,300 |
Intangible Assets, Accumulated Amortization | (22,393) | (12,899) |
Trademarks/Tradenames | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | 19,200 | 13,100 |
Intangible Assets, Accumulated Amortization | (6,628) | (4,095) |
Order Backlog | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | 3,800 | 400 |
Intangible Assets, Accumulated Amortization | $ (2,571) | $ (400) |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Finite Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 65.7 | $ 48.6 | |
Intangible assets estimated useful lives | 6 years 8 months 12 days | 4 years 9 months 18 days | |
Amortization of intangible assets | $ 20.3 | $ 13.7 | $ 5.6 |
Finite-lived intangible assets, expected amortization for 2022 | 23.9 | ||
Finite-lived intangible assets, expected amortization for 2023 | 21.9 | ||
Finite-lived intangible assets, expected amortization for 2024 | 18.1 | ||
Finite-lived intangible assets, expected amortization for 2025 | 15.3 | ||
Finite-lived intangible assets, expected amortization for 2026 | 8.3 | ||
Finite-lived intangible assets, expected amortization, thereafter | 13.6 | ||
Memory Solutions | |||
Finite Lived Intangible Assets [Line Items] | |||
Goodwill, increase (decrease) | 0.3 | $ (7.2) | |
Intelligent Platform Solutions | |||
Finite Lived Intangible Assets [Line Items] | |||
Purchase price allocation of business acquisitions | $ 0.3 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 | |
Payables And Accruals [Abstract] | |||
Accounts payable | [1] | $ 429,640 | $ 224,660 |
Salaries, wages and benefits | 37,795 | 16,862 | |
Income and other taxes | 14,319 | 7,495 | |
Other | 2,353 | 4,346 | |
Total | $ 484,107 | $ 253,363 | |
[1] | Includes accounts payable for property and equipment of $3.1 million and $1.8 million as of August 27, 2021 and August 28, 2020, respectively. |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Parenthetical) (Details) - USD ($) $ in Millions | Aug. 27, 2021 | Aug. 28, 2020 |
Payables And Accruals [Abstract] | ||
Accounts payable for property and equipment | $ 3.1 | $ 1.8 |
Debt - Summary of Long-Term Deb
Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Debt Instrument [Line Items] | ||
Debt | $ 365,838 | $ 195,573 |
Less current debt | (25,354) | |
Long-term debt | 340,484 | 195,573 |
Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt | 203,992 | $ 195,573 |
LED Purchase Price Note | ||
Debt Instrument [Line Items] | ||
Debt | 125,000 | |
ABL Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt | 25,000 | |
Other | ||
Debt Instrument [Line Items] | ||
Debt | $ 11,846 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2020USD ($)TradingDayBusinessDay$ / shares | Aug. 27, 2021USD ($) | Aug. 28, 2020USD ($) | Aug. 30, 2019USD ($) | |
Debt Instrument [Line Items] | ||||
Amortization of debt discounts and issuance costs | $ 8,798,000 | $ 5,866,000 | $ 2,803,000 | |
2.25% Convertible Senior Notes Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 250,000,000 | |||
Note interest rate | 2.25% | |||
Note maturity date | Feb. 15, 2026 | |||
Debt instrument, convertible, initial conversion rate in ordinary shares | 24.6252 | |||
Debt instrument, convertible, principal amount considered for conversion rate | $ 1,000 | |||
Debt instrument, convertible, initial conversion price per ordinary share | $ / shares | $ 40.61 | |||
Debt instrument, convertible, terms of conversion feature | Conversion Rights: Holders of the 2026 Notes may convert them under the following circumstances: i. during any fiscal quarter commencing after the fiscal quarter ended on May 28, 2020 (and only during such fiscal quarter) if the last reported sale price per ordinary share exceeds 130% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter; ii. 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; iii. on or after August 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date; iv. upon the occurrence of certain corporate events or distributions on our ordinary shares, as provided in the Indenture; or v. the 2026 Notes are called for redemption. | |||
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, combination settlement description | Our intent is to settle in cash the principal amount of our convertible notes upon conversion and may, at our option, settle any excess of the conversion value over the principal amount in cash, ordinary shares or any combination thereof. | |||
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 | |||
Interest Expense | $ 5,600,000 | 3,100,000 | ||
Amortization of debt discounts and issuance costs | $ 8,400,000 | 4,400,000 | ||
Debt instrument, effective interest rate | 7.06% | |||
2.25% Convertible Senior Notes Due 2026 | Additional Paid-in-capital | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, convertible, carrying amount of equity component | $ 50,800,000 | $ 50,800,000 | ||
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 | 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 | 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% |
Debt - LED Purchase Price Note
Debt - LED Purchase Price Note - Additional Information (Details) - CreeLED Inc. - USD ($) $ in Millions | Mar. 01, 2021 | Oct. 18, 2020 | Aug. 27, 2021 |
Debt Instrument [Line Items] | |||
Business combination, consideration transferred, equity interests issued and issuable | $ 125 | $ 125 | |
Maximum | |||
Debt Instrument [Line Items] | |||
Secured leverage ratio | 3.50% | ||
3-Month LIBOR | |||
Debt Instrument [Line Items] | |||
Note interest rate | 3.00% |
Debt - Asset-Based Lending Cred
Debt - Asset-Based Lending Credit Agreement - Additional Information (Details) - ABL Credit Agreement $ in Millions | 1 Months Ended |
Dec. 31, 2020USD ($) | |
Asset-Based Revolving Facilities | |
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 100 |
Debt Instrument Option To Increase Face Amount | $ 150 |
Note maturity date | Dec. 23, 2023 |
Revolving Credit Facility Amount Available For Issuance Of Letters Of Credit | $ 30 |
Revolving Credit Facility Amount Available For Swingline Loans | $ 15 |
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. |
Borrower fixed charge coverage ratio | 1.00% |
Global fixed charge coverage ratio | 1.00% |
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% |
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% |
Greater than $50 million | Minimum | |
Debt Instrument [Line Items] | |
Debt Instrument Average Daily Availability | $ 50 |
Greater than $50 million | Minimum | London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 1.75% |
Greater than $50 million | Minimum | Base Rate | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 0.75% |
Between $50 and $35 million | London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 2.00% |
Between $50 and $35 million | Base Rate | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 1.00% |
Between $50 and $35 million | Minimum | |
Debt Instrument [Line Items] | |
Debt Instrument Average Daily Availability | $ 35 |
Between $50 and $35 million | Maximum | |
Debt Instrument [Line Items] | |
Debt Instrument Average Daily Availability | 50 |
Less than 35 million | Maximum | |
Debt Instrument [Line Items] | |
Debt Instrument Average Daily Availability | $ 35 |
Less than 35 million | Maximum | London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 2.25% |
Less than 35 million | Maximum | Base Rate | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 1.25% |
Debt - Amended Credit Agreement
Debt - Amended Credit Agreement - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 30, 2020USD ($)Subsidiary | Aug. 27, 2021USD ($) | Aug. 28, 2020USD ($) | Aug. 30, 2019USD ($) | |
Debt Instrument [Line Items] | ||||
Proceeds from borrowings under revolving line of credit | $ 172,500 | $ 103,000 | $ 254,500 | |
Amended Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Number of subsidiaries | Subsidiary | 3 | |||
Debt Instrument Extension of Maturity Amount | $ 50,000 | |||
Note maturity date | Mar. 6, 2025 | |||
First lien leverage ratio | 3.50% | |||
Percentage of aggregate revolving commitments | 30.00% | |||
Amended Credit Agreement | Maximum | ||||
Debt Instrument [Line Items] | ||||
First lien leverage ratio | 2.25% | |||
Amended Credit Agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
First lien leverage ratio | 2.25% | |||
Amended Credit Agreement | Minimum | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Proceeds from borrowings under revolving line of credit | $ 10,000 | |||
Amended Credit Agreement | 3-Month LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument variable rate | 3.75% | |||
Amended Credit Agreement | 3-Month LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument variable rate | 3.50% | |||
Amended Credit Agreement | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument variable rate | 2.75% | |||
Amended Credit Agreement | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument variable rate | 2.50% |
Debt - Other - Additional Infor
Debt - Other - Additional Information (Details) $ in Thousands, R$ in Millions | Dec. 30, 2020USD ($) | Dec. 30, 2020BRL (R$) | Aug. 27, 2021USD ($) | Aug. 28, 2020USD ($) | Aug. 30, 2019USD ($) | Aug. 27, 2021BRL (R$) |
Debt Instrument [Line Items] | ||||||
Proceeds from borrowing under line of credit | $ 172,500 | $ 103,000 | $ 254,500 | |||
FINEP Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 20,000 | R$ 102.2 | ||||
Line of credit facility, interest rate | 2.80% | |||||
Line of credit facility unused capacity commitment fee percentage | 0.10% | |||||
Line Of Credit Facility Administration Fee Percentage | 1.09% | |||||
Line of credit facility guarantee fee percentage | 1.50% | |||||
Frequency of periodic principal payments | monthly | |||||
Debt instrument payment term, beginning | 2022-06 | |||||
Debt instrument payment term, ending | 2027-12 | |||||
Proceeds from borrowing under line of credit | $ 11,900 | R$ 60.7 | ||||
Other | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument outstanding amount | $ 11,800 |
Debt - Summary of Maturities of
Debt - Summary of Maturities of Debt (Details) $ in Thousands | Aug. 27, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 354 |
2023 | 127,122 |
2024 | 2,122 |
2025 | 2,122 |
2026 | 252,122 |
Thereafter | 3,004 |
Less unamortized discount and issuance costs | (46,008) |
Debt | $ 340,838 |
Debt - Maturities of Debt - Add
Debt - Maturities of Debt - Additional Information (Details) $ in Thousands | Aug. 27, 2021USD ($) |
Debt Instrument [Line Items] | |
Current debt | $ 25,354 |
Asset-Based Revolving Facilities | |
Debt Instrument [Line Items] | |
Current debt | $ 25,000 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Lessee Lease Description [Line Items] | |||
Operating lease description | As of August 27, 2021 and August 28, 2020, we had operating leases through which we utilize facilities, offices and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions. | ||
Operating lease expense prior to ASC 842 | $ 5 | ||
Operating lease payments | $ 7.5 | $ 5.1 | |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 24.5 | $ 8.8 | |
Weighted-average remaining lease term for operating leases | 6 years 1 month 6 days | 7 years 7 months 6 days | |
Weighted-average discount rate for operating leases | 6.70% | 8.00% | |
Operating lease, existence of option to extend [true false] | true | ||
Lessee, operating lease, lease not yet commenced, description | As of August 27, 2021, we had such lease commitments relating to operating lease payment obligations of $51.8 million for a building lease with a term of 16 years. We will recognize a right-of-use asset and an associated lease liability at the time such asset becomes available for our use | ||
Lessee, operating lease, lease not yet commenced, existence of option to extend [true false] | false | ||
Office Leases | |||
Lessee Lease Description [Line Items] | |||
Operating lease term | 16 years | ||
Additional operating lease commitments | $ 51.8 | ||
Minimum | |||
Lessee Lease Description [Line Items] | |||
Operating lease term | 2 years | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Operating lease term | 5 years |
Leases - Summary of Components
Leases - Summary of Components of Operating Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 27, 2021 | Aug. 28, 2020 | |
Leases [Abstract] | ||
Fixed lease cost | $ 9,377 | $ 6,743 |
Variable lease cost | 1,445 | 842 |
Short-term lease cost | 288 | 295 |
Total lease cost | $ 11,110 | $ 7,880 |
Leases - Schedule of Minimum Pa
Leases - Schedule of Minimum Payments of Lease Liabilities (Details) $ in Thousands | Aug. 27, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 12,319 |
2023 | 10,553 |
2024 | 7,342 |
2025 | 5,151 |
2026 | 3,599 |
2027 and thereafter | 15,498 |
Total | 54,462 |
Less imputed interest | (11,787) |
Operating lease, liability | $ 42,675 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended |
Aug. 27, 2021USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Purchase obligation | $ 170 |
Purchase obligation due period | 1 year |
Equity - Additional Information
Equity - Additional Information (Details) $ / shares in Units, shares in Thousands, $ in Thousands | Mar. 30, 2020USD ($) | Jan. 31, 2021USD ($)$ / sharesshares | Aug. 27, 2021USD ($)Director$ / sharesshares | Aug. 28, 2020USD ($)shares | Aug. 30, 2019USD ($)shares |
Class Of Stock [Line Items] | |||||
Shares acquired, value | $ 48,513 | $ 749 | $ 520 | ||
Acquisition of LED Business | 7,477 | ||||
Parent | |||||
Class Of Stock [Line Items] | |||||
Shares acquired, value | 48,513 | 749 | $ 520 | ||
Non-controlling Interest in Subsidiary | |||||
Class Of Stock [Line Items] | |||||
Acquisition of LED Business | 7,477 | ||||
LED Business | |||||
Class Of Stock [Line Items] | |||||
Acquisition of LED Business | $ 1,200 | ||||
LED Business | Cree Joint Venture | |||||
Class Of Stock [Line Items] | |||||
Number of board of directors | Director | 5 | ||||
LED Business | Cree Joint Venture | Parent | |||||
Class Of Stock [Line Items] | |||||
Ownership interest percentage | 51.00% | ||||
LED Business | San’an | Non-controlling Interest in Subsidiary | |||||
Class Of Stock [Line Items] | |||||
Ownership interest percentage | 49.00% | ||||
Capped Calls | |||||
Class Of Stock [Line Items] | |||||
Initial strike price of capped call transaction | $ / shares | $ 40.61 | ||||
Cap price of capped call transaction | $ / shares | 54.145 | ||||
Capped calls cover, subject to anti-dilution adjustments | $ 6,200 | ||||
Capped cells, expiry date | Feb. 15, 2026 | ||||
Fair value of capped calls | $ 14,100 | ||||
Capped Calls | Other Income (Expense), Net | |||||
Class Of Stock [Line Items] | |||||
Loss due to revaluation of capped calls at fair value | $ 7,700 | ||||
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. | |||||
Class Of Stock [Line Items] | |||||
Number of shares repurchase | shares | 1,100 | ||||
Purchase price per share | $ / shares | $ 40.30 | ||||
Aggregate consideration | $ 44,300 | ||||
Shares acquired, shares | shares | 153 | 28 | 18 | ||
Shares acquired, value | $ 4,200 | $ 700 | $ 500 |
Government Incentives - Additio
Government Incentives - Additional Information (Details) $ in Millions | 12 Months Ended | |
Aug. 27, 2021USD ($)Program | Aug. 28, 2020USD ($) | |
Research & Development | ||
Government Incentives [Line Items] | ||
Financial credits | $ 30 | $ 6.4 |
Other Current Assets | ||
Government Incentives [Line Items] | ||
Unused financial credits | $ 19.8 | $ 6.4 |
Minimum | ||
Government Incentives [Line Items] | ||
Percentage of gross sales revenues | 11.00% | |
Maximum | ||
Government Incentives [Line Items] | ||
Percentage of gross sales revenues | 14.00% | |
Brazilian Operating Subsidiaries | ||
Government Incentives [Line Items] | ||
Number of incentive programs | Program | 2 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Aug. 27, 2021USD ($) |
Level 1 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Money market funds | $ 2.7 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements of Other Assets and Liabilities (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Acquisition-related contingent consideration | $ (60,500) | |
Fair Value | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative financial instrument assets | 883 | $ 112 |
Derivative financial instrument liabilities | (50) | (912) |
Fair Value | Level 2 | Convertible Senior Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (335,668) | (221,500) |
Fair Value | Level 2 | LED Purchase Price Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (125,000) | |
Fair Value | Level 2 | ABL Credit Agreement | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (25,000) | |
Fair Value | Level 2 | Other | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (10,702) | |
Fair Value | Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Acquisition-related contingent consideration | (60,500) | |
Carrying Value | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative financial instrument assets | 883 | 112 |
Derivative financial instrument liabilities | (50) | (912) |
Carrying Value | Level 2 | Convertible Senior Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (203,992) | $ (195,573) |
Carrying Value | Level 2 | LED Purchase Price Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (125,000) | |
Carrying Value | Level 2 | ABL Credit Agreement | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (25,000) | |
Carrying Value | Level 2 | Other | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | (11,846) | |
Carrying Value | Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Acquisition-related contingent consideration | $ (60,500) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - Forward Contracts - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Derivative Instruments Gain Loss [Line Items] | |||
Recognized realized gains (losses) | $ 2.3 | $ 11.1 | $ (2.6) |
Non-designated | |||
Derivative Instruments Gain Loss [Line Items] | |||
Net unrealized gains (losses) on change in fair value | $ 2.1 | $ 0.3 | $ (0.1) |
Equity Plans - Additional Infor
Equity Plans - Additional Information (Details) shares in Thousands, $ in Thousands | Aug. 27, 2021USD ($)shares | Aug. 26, 2011 | Aug. 31, 2020 | Nov. 30, 2019StockOption | Apr. 30, 2018 | Mar. 31, 2018TradingDayStockOption | Nov. 27, 2020USD ($) | Aug. 31, 2020USD ($) | Aug. 27, 2021USD ($)shares | Aug. 28, 2020USD ($)shares | Aug. 30, 2019USD ($)shares | Sep. 23, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||
Vesting period description | Options granted under the SGH Plans have an exercise price not less than the fair market value of a share of our common stock on the date of grant. Options and RSUs generally vest over a period of four years, and options generally have a ten-year term, though options granted after August 26, 2011 and before Sept. 23, 2014 have an eight-year term. | |||||||||||
Unrecognized compensation costs related to awards | $ 6,400 | $ 6,400 | ||||||||||
Unrecognized compensation costs recognition period | 1 year 7 months 6 days | |||||||||||
Share options outstanding | shares | 1,889 | 1,889 | 2,109 | |||||||||
Total intrinsic value of employee stock options exercised | $ 8,600 | $ 3,000 | $ 7,400 | |||||||||
Share Options, Description | share options outstanding, which are generally exercisable in increments of either one-fourth or one-third per year beginning one year from the date of grant. Share options generally expire seven to ten years from the date of grant. | |||||||||||
Stock options: | ||||||||||||
Share-based compensation expense | $ 33,877 | $ 18,716 | $ 18,199 | |||||||||
Weighted-average risk-free interest rate | 0.49% | 1.32% | 2.51% | |||||||||
Performance-based Restricted Share Award (RSA) | ||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||
Additional share-based compensation expense | $ 5,800 | |||||||||||
Restricted Awards | ||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||
Unrecognized compensation costs related to awards | $ 87,600 | $ 87,600 | ||||||||||
Unrecognized compensation costs recognition period | 3 years 7 days | |||||||||||
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 | $ 2,000 | |||||||||||
Reversal Of Share Based Compensation Expense | $ 2,300 | |||||||||||
Expected volatility | 56.07% | 46.29% | ||||||||||
Weighted-average risk-free interest rate | 0.34% | 2.75% | ||||||||||
Expected dividend yield | 0.00% | |||||||||||
Employee Stock Purchase Plan | ||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||
Ordinary shares, available for issuance | shares | 800 | 800 | ||||||||||
Percentage of maximum number of ordinary shares through payroll deductions. | 15.00% | 15.00% | ||||||||||
Stock options: | ||||||||||||
Fair market value percentage of ordinary share | 85.00% | |||||||||||
Share issued under purchase plan | shares | shares | 200 | 200 | 100 | |||||||||
Share issued under purchase plan | $ 3,600 | $ 3,000 | $ 2,300 | |||||||||
2017 Plan | ||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||
Ordinary shares, available for issuance | shares | 2,000 | 2,000 | ||||||||||
Inducement Plan | ||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||
Ordinary shares, available for issuance | shares | 900 | 900 | ||||||||||
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 | |||||||||||
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 |
Equity Plans - Schedule of Outs
Equity Plans - Schedule of Outstanding Restricted Share Awards and Restricted Share Units Awards (Details) - Restricted Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards outstanding, Shares, Beginning Balance | 1,273 | ||
Awards granted, Shares | 2,325 | 840 | 652 |
Awards vested, Shares | (591) | ||
Awards forfeited and cancelled, Shares | (188) | ||
Awards outstanding, Shares, Ending Balance | 2,819 | 1,273 | |
Awards outstanding, Weighted average grant date fair value per share, Beginning Balance | $ 26.19 | ||
Awards granted, Weighted average grant date fair value per share | 39.19 | $ 24.41 | $ 24.22 |
Awards vested, Weighted average grant date fair value per share | 26.63 | ||
Awards forfeited and cancelled, Weighted average grant date fair value per share | 36.18 | ||
Awards outstanding, Weighted average grant date fair value per share, Ending Balance | $ 36.16 | $ 26.19 | |
Awards outstanding, Aggregate intrinsic value | $ 134,425 | $ 31,721 |
Equity Plans - Summary of Aggre
Equity Plans - Summary of Aggregate Restricted Award Activity and Assumptions (Details) - Restricted Award Activity - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards granted | 2,325 | 840 | 652 |
Weighted average grant-date fair value per share | $ 39.19 | $ 24.41 | $ 24.22 |
Aggregate vesting-date fair value of shares vested | $ 21,381 | $ 12,464 | $ 6,837 |
Equity Plans - Summary of Share
Equity Plans - Summary of Share Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Options outstanding, Shares, Beginning Balance | 2,109 | ||
Options granted, Shares | 250 | 963 | 356 |
Options exercised, Shares | (434) | ||
Options forfeited and cancelled, Shares | (36) | ||
Options outstanding, Shares, Ending Balance | 1,889 | 2,109 | |
Options exercisable, Shares | 957 | ||
Options outstanding, Weighted average per share exercise price, Beginning Balance | $ 29.45 | ||
Options granted, Weighted average per share exercise price | 26.99 | ||
Options exercised, Weighted average per share exercise price | 26.09 | ||
Options forfeited and cancelled, Weighted average per share exercise price | 28.98 | ||
Options outstanding, Weighted average per share exercise price, Ending Balance | 29.91 | $ 29.45 | |
Options exercisable, Weighted average per share exercise price | $ 29.33 | ||
Options outstanding, Weighted average remaining contractual term (years) | 6 years 3 months 29 days | 6 years 11 months 12 days | |
Options exercisable, Weighted average remaining contractual term (years) | 5 years 8 months 8 days | ||
Options outstanding, Aggregate intrinsic value | $ 33,602 | $ 7,225 | |
Options exercisable, Aggregate intrinsic value | $ 17,572 |
Equity Plans - Assumptions Used
Equity Plans - Assumptions Used to Value Stock Options (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Share options granted | 250 | 963 | 356 |
Weighted average grant-date fair value per share | $ 13.30 | $ 11.46 | $ 10.16 |
Average expected term in years | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Weighted-average expected volatility | 52.07% | 49.18% | 42.47% |
Weighted-average risk-free interest rate | 0.49% | 1.32% | 2.51% |
Equity Plans - Summary of Sha_2
Equity Plans - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expense | $ 33,877 | $ 18,716 | $ 18,199 |
Cost of Sales | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expense | 4,593 | 3,022 | 2,485 |
Research & Development | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expense | 4,429 | 3,069 | 2,654 |
Selling, General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expense | $ 24,855 | $ 12,625 | $ 13,060 |
Employee Savings and Retireme_2
Employee Savings and Retirement Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |||
Employees maximum contribution for eligible pay under 401(k) retirement plan | 60.00% | ||
Contribution expense under 401(k) plan | $ 3.4 | $ 2.3 | $ 2 |
Revenue and Customer Contract_3
Revenue and Customer Contract Balances - Summary of Net Sales by Products and Services and Gross Amounts Billed for Services (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | ||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | [1] | $ 1,501,142 | $ 1,122,377 | $ 1,211,999 |
Cost of materials | 751,985 | 604,698 | 946,303 | |
Gross billings in connection with services | [2] | 787,362 | 636,902 | 988,830 |
Product | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 1,465,765 | 1,090,173 | 1,169,472 | |
Service | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 35,377 | $ 32,204 | $ 42,527 | |
[1] | Sales to related parties were $76,488, $75,837 and $117,403 in 2021, 2020 and 2019, respectively. | |||
[2] | Included in gross billings in connection with services are amounts billed to customers for the cost of materials procured in an agent capacity in connection with our procurement, logistics, inventory management, temporary warehousing, kitting and packaging services. While we take title to inventory under such arrangements, control of such inventory does not transfer to us as we do not, at any point, have the ability to direct the use, and thereby obtain the benefits of, the inventory. |
Revenue and Customer Contract_4
Revenue and Customer Contract Balances - Summary of Customer Contract Balances (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Revenue From Contract With Customer [Abstract] | ||
Contract assets | $ 4,247 | $ 5,068 |
Contract liabilities: | ||
Deferred revenue | 19,271 | 20,124 |
Customer advances | 15,835 | 3,917 |
Contract liabilities | $ 35,106 | $ 24,041 |
Revenue and Customer Contract_5
Revenue and Customer Contract Balances - Additional information (Details) $ in Millions | 12 Months Ended |
Aug. 27, 2021USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Contract assets invoiced during period | $ 5.1 |
Expected revenue recognized on remaining performance obligations | 19.3 |
Revenue recognized | 17.3 |
Estimates of consideration payable to customers, including estimates for pricing adjustments and returns | $ 24.9 |
Revenue and Customer Contract_6
Revenue and Customer Contract Balances - Additional information (Details1) $ in Millions | Aug. 27, 2021USD ($) |
Disaggregation Of Revenue [Line Items] | |
Expected revenue recognized on remaining performance obligations | $ 19.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-08-28 | |
Disaggregation Of Revenue [Line Items] | |
Expected revenue recognized on remaining performance obligations | $ 14.1 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Other Operating (Income) Expe_2
Other Operating (Income) Expense - Additional Information (Details) - USD ($) | 3 Months Ended | |
Aug. 27, 2021 | Aug. 28, 2020 | |
Restructuring Cost And Reserve [Line Items] | ||
Restructure charges | $ 2,100,000 | |
Restructuring costs payable | $ 500,000 | $ 0 |
Memory Solutions | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructure charges | 3,500,000 | |
Asset impairment | 2,700,000 | |
Value added taxes | 400,000 | |
Accrued contract termination costs | $ 400,000 |
Other Non-operating (Income) _3
Other Non-operating (Income) Expense - Schedule of Other Non-operating (Income) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Nonoperating Income Expense [Abstract] | |||
Foreign currency (gains) losses | $ 719 | $ 3,408 | $ 3,148 |
Loss on remeasurement of Capped Calls | 7,719 | ||
Loss on extinguishment of debt | 6,822 | ||
Other | (1,094) | (979) | (987) |
Other non-operating (income) expense | $ (375) | $ 16,970 | $ 2,161 |
Other Non-operating (Income) _4
Other Non-operating (Income) Expense - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Feb. 29, 2020 | May 29, 2020 | Aug. 28, 2020 | Aug. 30, 2019 | Aug. 27, 2021 | |
Debt Instrument [Line Items] | |||||
Repayment of outstanding debt | $ 213,436 | $ 6,753 | |||
Unamortized debt discounts and issuance costs | $ 46,008 | ||||
Loss on extinguishment of debt | $ 6,822 | ||||
Term Loans | |||||
Debt Instrument [Line Items] | |||||
Repayment of outstanding debt | $ 208,700 | ||||
Unamortized debt discounts and issuance costs | 4,600 | ||||
Loss on extinguishment of debt | $ 6,600 | $ 200 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) before Income Taxes and Components of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (28,326) | $ (13,120) | $ 4,279 |
Foreign | 66,298 | 22,480 | 61,925 |
Income before taxes | 37,972 | 9,360 | 66,204 |
Current: | |||
Federal | (163) | ||
State | 623 | 143 | 120 |
Foreign | 18,022 | 12,164 | 15,633 |
Total current | 18,645 | 12,307 | 15,590 |
Deferred: | |||
Federal | (13) | 258 | (1,445) |
State | 3 | 37 | 229 |
Foreign | (3,169) | (2,099) | 498 |
Total deferred | (3,179) | (1,804) | (718) |
Total income tax provision (benefit) | $ 15,466 | $ 10,503 | $ 14,872 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 21.00% | 21.00% | 21.00% |
Foreign income taxes at different rates | 19.90% | 58.50% | 1.30% |
State income tax, net of federal benefit | 4.20% | 3.50% | 3.60% |
Tax on uncertain tax positions | 0.10% | 0.60% | 0.10% |
Change in valuation allowance | 26.90% | 22.40% | (3.00%) |
Non-deductible expenses (non-taxable income) | (5.70%) | 5.10% | (0.80%) |
Brazil financial credit incentive | (26.90%) | ||
Other | 1.10% | 1.10% | 0.30% |
Effective income tax rate | 40.60% | 112.20% | 22.50% |
Income Taxes - Net Tax Effects
Income Taxes - Net Tax Effects of Temporary Differences Between Bases of Assets and Liabilities (Details) - USD ($) $ in Thousands | Aug. 27, 2021 | Aug. 28, 2020 |
Deferred tax assets: | ||
Accruals and allowances | $ 22,629 | $ 6,316 |
Share-based compensation | 8,581 | 6,284 |
Research and other tax credit carryforwards | 8,971 | 7,155 |
Property and equipment | 244 | |
Operating lease liability | 7,721 | 4,473 |
Tax amortizable goodwill | 7,086 | |
Net operating loss carryforwards | 29,834 | 31,920 |
Gross deferred tax assets | 84,822 | 56,392 |
Less valuation allowance | (49,154) | (38,921) |
Deferred tax assets, net of valuation allowance | 35,668 | 17,471 |
Deferred tax liabilities: | ||
Right-of-use assets | (7,280) | (4,199) |
Property and equipment | (14,078) | |
Intangible assets | (9,643) | (10,117) |
Deferred tax liabilities | (31,001) | (14,316) |
Net deferred tax assets | $ 4,667 | $ 3,155 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 01, 2011 | Jan. 31, 2011 | Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 |
Income Taxes [Line Items] | |||||
Remaining operating loss carry forwards indefinite lived | $ 12,200 | ||||
Statutory tax rate | 21.00% | 21.00% | 21.00% | ||
Tax holiday, expiring date | 2028-08 | ||||
Impact of income tax holidays, decrease in income tax expense | $ 15,600 | $ 13,500 | $ 16,300 | ||
Per share amount benefited from effect of the income tax incentive arrangements | $ 0.65 | $ 0.56 | $ 0.70 | ||
Unrecognized tax benefits that would affect the effective tax rate | $ 1,800 | $ 1,700 | |||
Malaysia | |||||
Income Taxes [Line Items] | |||||
Statutory tax rate | 24.00% | ||||
Deferred Tax Valuation Allowance | |||||
Income Taxes [Line Items] | |||||
Deferred tax valuation allowance, Business Acquisition | $ 7,640 | ||||
State | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | $ 55,000 | ||||
Tax credit carryforwards | $ 900 | ||||
State | Earliest Tax Year | |||||
Income Taxes [Line Items] | |||||
Tax year open to examination | 2005 | ||||
State | Latest Tax Year | |||||
Income Taxes [Line Items] | |||||
Tax year open to examination | 2020 | ||||
State | Minimum | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards, expiration year | 2023 | ||||
State | Maximum | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards, expiration year | 2039 | ||||
Foreign | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | $ 16,200 | ||||
Foreign | Minimum | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards, expiration year | 2022 | ||||
Foreign | Maximum | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards, expiration year | 2025 | ||||
U.S. Federal and Netherlands | |||||
Income Taxes [Line Items] | |||||
Increase (decrease) in valuation allowance | $ 10,200 | ||||
U.S. Federal | Earliest Tax Year | |||||
Income Taxes [Line Items] | |||||
Tax year open to examination | 2005 | ||||
U.S. Federal | Latest Tax Year | |||||
Income Taxes [Line Items] | |||||
Tax year open to examination | 2020 | ||||
U.S. Federal | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | $ 120,100 | ||||
Tax credit carryforwards | $ 7,300 | ||||
U.S. Federal | Minimum | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards, expiration year | 2026 | ||||
U.S. Federal | Maximum | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards, expiration year | 2038 | ||||
Federal [Member] | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | $ 107,900 | ||||
Brazilian Tax Authorities | SMART Brazil | |||||
Income Taxes [Line Items] | |||||
Statutory tax rate | 9.00% | 34.00% |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Valuation Allowance (Details) - Deferred Tax Valuation Allowance - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Valuation Allowance [Line Items] | |||
Deferred tax valuation allowance, Beginning Balance | $ 38,921 | $ 36,722 | $ 32,497 |
Deferred tax valuation allowance, Charged (Credited) to Operations | 10,234 | 2,199 | (3,415) |
Deferred tax valuation allowance, Business Acquisition | 7,640 | ||
Deferred tax valuation allowance, Ending Balance | $ 49,155 | $ 38,921 | $ 36,722 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 27, 2021 | Aug. 28, 2020 | |
Income Tax Disclosure [Abstract] | ||
Beginning unrecognized tax benefits | $ 16,514 | $ 15,037 |
Increases related to prior year tax provisions | 67 | |
Decreases related to prior year tax provisions | (397) | |
Increases related to current year tax provisions | 1,337 | 1,410 |
Ending unrecognized tax benefits | $ 17,454 | $ 16,514 |
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 | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Earnings Per Share [Abstract] | |||
Net income (loss) attributable to SGH – Basic and Diluted | $ 21,310 | $ (1,143) | $ 51,332 |
Weighted-average shares outstanding – Basic | 24,279 | 23,994 | 22,959 |
Dilutive effect of equity plans and convertible notes | 1,513 | 509 | |
Weighted-average shares outstanding – Diluted | 25,792 | 23,994 | 23,468 |
Earnings (loss) per share: | |||
Basic | $ 0.88 | $ (0.05) | $ 2.24 |
Diluted | $ 0.83 | $ (0.05) | $ 2.19 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 1,481 | 7,489 | 1,549 |
Equity Plans | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 1,481 | 1,333 | 1,549 |
Convertible Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 6,156 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) | 12 Months Ended |
Aug. 27, 2021$ / shares | |
Earnings Per Share [Abstract] | |
Dilutive impact of conversion price per share | $ 40.61 |
Segment and Other Information -
Segment and Other Information - Additional Information (Details) - segment | 12 Months Ended | |
Aug. 27, 2021 | Aug. 28, 2020 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 3 | 3 |
Segment and Other Information_2
Segment and Other Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | ||
Segment Reporting Information [Line Items] | ||||
Net sales | [1] | $ 1,501,142 | $ 1,122,377 | $ 1,211,999 |
Operating income | 55,197 | 41,330 | 89,081 | |
Share-based compensation | (33,877) | (18,716) | (18,199) | |
Change in fair value of contingent consideration | (32,400) | 2,700 | ||
Amortization of intangible assets | (20,300) | (13,700) | (5,600) | |
Total operating expenses | (253,183) | (175,066) | (148,446) | |
Depreciation expense | 28,900 | 22,800 | 23,600 | |
Unallocated | ||||
Segment Reporting Information [Line Items] | ||||
Share-based compensation | (33,877) | (18,716) | (18,199) | |
Change in fair value of contingent consideration | (32,400) | 2,700 | ||
Amortization of intangible assets | (20,255) | (13,654) | (5,614) | |
Flow through of inventory step up | (7,090) | |||
Restructure and integration expense | (2,054) | (3,487) | ||
Other | (9,921) | (7,042) | (2,699) | |
Total operating expenses | (105,597) | (42,899) | (23,812) | |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,501,142 | 1,122,377 | 1,211,999 | |
Operating income | 160,794 | 84,229 | 112,893 | |
Depreciation expense | 28,856 | 22,777 | 23,593 | |
Operating Segments | Memory Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 931,818 | 857,237 | 995,441 | |
Operating income | 91,737 | 71,867 | 109,314 | |
Depreciation expense | 19,547 | 19,118 | 21,132 | |
Operating Segments | Intelligent Platform Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 344,757 | 265,140 | 216,558 | |
Operating income | 32,931 | 12,362 | 3,579 | |
Depreciation expense | 3,275 | $ 3,659 | $ 2,461 | |
Operating Segments | LED Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 224,567 | |||
Operating income | 36,126 | |||
Depreciation expense | $ 6,034 | |||
[1] | Sales to related parties were $76,488, $75,837 and $117,403 in 2021, 2020 and 2019, respectively. |
Concentrations - Additional Inf
Concentrations - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2021USD ($)CustomerSupplier | Aug. 28, 2020USD ($) | Aug. 30, 2019USD ($) | |
Concentration Risk [Line Items] | |||
Accounts payable and accrued expenses | $ 484,107 | $ 253,363 | |
Supplier Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of suppliers | Supplier | 4 | ||
Purchase of raw materials from suppliers | $ 1,300,000 | 1,000,000 | $ 1,200,000 |
Accounts payable and accrued expenses | $ 190,200 | $ 139,500 | |
Net sales | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of largest customers | Customer | 10 | ||
Net sales | Customer Concentration Risk | Largest Customer | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 65.00% | 66.00% | 73.00% |
Net sales | Customer Concentration Risk | Customer A | Memory Solutions | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 12.00% | 17.00% | 18.00% |
Net sales | Customer Concentration Risk | Customer B | IPS | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | ||
Net sales | Customer Concentration Risk | Customer C | Memory Solutions | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 11.00% | ||
Net sales | Customer Concentration Risk | Customer D | Memory Solutions | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13.00% | ||
Net sales | Customer Concentration Risk | Customer E | Memory Solutions | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 11.00% | ||
Accounts Receivable | Customer Concentration Risk | Customer One | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.00% | ||
Accounts Receivable | Customer Concentration Risk | Customer Two | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | ||
Accounts Receivable | Customer Concentration Risk | Customer Three | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% |
Geographic Information - Summar
Geographic Information - Summary of Net Sales and Long-lived Assets by Geographic Area Including Property and Equipment and Right-of-use Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 27, 2021 | Aug. 28, 2020 | Aug. 30, 2019 | ||
Segment Reporting Information [Line Items] | ||||
Net sales | [1] | $ 1,501,142 | $ 1,122,377 | $ 1,211,999 |
Long-lived assets including property and equipment and right-of-use assets | 197,135 | 79,718 | ||
United States | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 601,728 | 477,975 | 383,316 | |
Long-lived assets including property and equipment and right-of-use assets | 56,746 | 28,775 | ||
Brazil | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 447,249 | 390,021 | 536,510 | |
Long-lived assets including property and equipment and right-of-use assets | 63,858 | 37,601 | ||
China | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 213,989 | 90,705 | 129,911 | |
Long-lived assets including property and equipment and right-of-use assets | 61,405 | |||
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 84,216 | 37,758 | 42,497 | |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 153,960 | 125,918 | $ 119,765 | |
Long-lived assets including property and equipment and right-of-use assets | 3,797 | 3,024 | ||
Malaysia | ||||
Segment Reporting Information [Line Items] | ||||
Long-lived assets including property and equipment and right-of-use assets | $ 11,329 | $ 10,318 | ||
[1] | Sales to related parties were $76,488, $75,837 and $117,403 in 2021, 2020 and 2019, respectively. |