Cover Page
Cover Page - shares | 6 Months Ended | |
Feb. 24, 2023 | Mar. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Feb. 24, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38102 | |
Entity Registrant Name | SMART GLOBAL HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | E9 | |
Entity Tax Identification Number | 98-1013909 | |
Entity Address, Address Line One | c/o Walkers Corporate Limited | |
Entity Address, Address Line Two | 190 Elgin Avenue | |
Entity Address, City or Town | George Town, Grand Cayman | |
Entity Address, Country | KY | |
Entity Address, Postal Zip Code | KY1-9008 | |
City Area Code | 510 | |
Local Phone Number | 623-1231 | |
Title of 12(b) Security | Ordinary shares, $0.03 par value per share | |
Trading Symbol | SGH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 49,071,741 | |
Entity Central Index Key | 0001616533 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-25 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Assets | ||
Cash and cash equivalents | $ 375,854 | $ 363,065 |
Accounts receivable, net | 229,474 | 410,323 |
Inventories | 294,367 | 323,084 |
Other current assets | 78,475 | 55,393 |
Total current assets | 978,170 | 1,151,865 |
Property and equipment, net | 171,798 | 153,935 |
Operating lease right-of-use assets | 80,468 | 77,399 |
Intangible assets, net | 182,894 | 77,812 |
Goodwill | 182,710 | 74,009 |
Other noncurrent assets | 44,043 | 37,044 |
Total assets | 1,640,083 | 1,572,064 |
Liabilities and Equity | ||
Accounts payable and accrued expenses | 226,289 | 413,354 |
Current debt | 32,141 | 12,025 |
Acquisition-related contingent consideration | 30,900 | 0 |
Other current liabilities | 131,117 | 90,161 |
Total current liabilities | 420,447 | 515,540 |
Long-term debt | 789,364 | 591,389 |
Noncurrent operating lease liabilities | 76,092 | 71,754 |
Other noncurrent liabilities | 22,660 | 14,835 |
Total liabilities | 1,308,563 | 1,193,518 |
Commitments and contingencies | ||
SMART Global Holdings shareholders’ equity: | ||
Ordinary shares, $0.03 par value; authorized 200,000 shares; 54,383 shares issued and 49,072 outstanding as of February 24, 2023; 52,880 shares issued and 48,604 outstanding as of August 26, 2022 | 1,631 | 1,586 |
Additional paid-in capital | 417,998 | 448,112 |
Retained earnings | 247,756 | 251,344 |
Treasury shares, 5,311 and 4,276 shares held as of February 24, 2023 and August 26, 2022, respectively | (123,999) | (107,776) |
Accumulated other comprehensive income (loss) | (217,557) | (221,655) |
Total SGH shareholders’ equity | 325,829 | 371,611 |
Noncontrolling interest in subsidiary | 5,691 | 6,935 |
Total equity | 331,520 | 378,546 |
Total liabilities and equity | $ 1,640,083 | $ 1,572,064 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value (in usd per share) | $ 0.03 | $ 0.03 |
Ordinary shares, authorized (in shares) | 200,000 | 200,000 |
Ordinary shares, issued (in shares) | 54,383 | 52,880 |
Ordinary shares, outstanding (in shares) | 49,072 | 48,604 |
Treasury shares (in shares) | 5,311 | 4,276 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Total net sales | $ 429,174 | $ 449,171 | $ 894,652 | $ 919,115 |
Total cost of sales | 318,793 | 336,458 | 665,861 | 684,201 |
Gross profit | 110,381 | 112,713 | 228,791 | 234,914 |
Operating expenses: | ||||
Research and development | 26,665 | 18,794 | 50,721 | 36,451 |
Selling, general and administrative | 62,771 | 53,114 | 133,793 | 105,664 |
Impairment of goodwill | 17,558 | 0 | 17,558 | 0 |
Change in fair value of contingent consideration | 6,400 | 24,000 | 10,100 | 41,200 |
Other operating (income) expense | 4,154 | 0 | 6,195 | 0 |
Total operating expenses | 117,548 | 95,908 | 218,367 | 183,315 |
Operating income (loss) | (7,167) | 16,805 | 10,424 | 51,599 |
Non-operating (income) expense: | ||||
Interest expense, net | 8,006 | 4,462 | 16,043 | 9,568 |
Other non-operating (income) expense | 13,329 | 1,785 | 12,669 | 3,020 |
Total non-operating (income) expense | 21,335 | 6,247 | 28,712 | 12,588 |
Income (loss) before taxes | (28,502) | 10,558 | (18,288) | 39,011 |
Income tax provision (benefit) | (1,716) | 7,586 | 3,174 | 15,341 |
Net income (loss) | (26,786) | 2,972 | (21,462) | 23,670 |
Net income attributable to noncontrolling interest | 433 | 514 | 765 | 1,185 |
Net income (loss) attributable to SGH | $ (27,219) | $ 2,458 | $ (22,227) | $ 22,485 |
Earnings (loss) per share | ||||
Basic (in usd per share) | $ (0.55) | $ 0.05 | $ (0.45) | $ 0.46 |
Diluted (in usd per share) | $ (0.55) | $ 0.04 | $ (0.45) | $ 0.40 |
Shares used in per share calculations: | ||||
Basic (in shares) | 49,116 | 49,522 | 49,039 | 49,267 |
Diluted (in shares) | 49,116 | 57,636 | 49,039 | 56,135 |
Products | ||||
Total net sales | $ 373,849 | $ 413,534 | $ 764,038 | $ 850,218 |
Total cost of sales | 297,134 | 320,827 | 615,794 | 656,251 |
Services | ||||
Total net sales | 55,325 | 35,637 | 130,614 | 68,897 |
Total cost of sales | $ 21,659 | $ 15,631 | $ 50,067 | $ 27,950 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (26,786) | $ 2,972 | $ (21,462) | $ 23,670 |
Other comprehensive income (loss), net of tax: | ||||
Cumulative translation adjustment | 6,121 | 11,379 | 4,113 | (8,061) |
Gains (losses) on derivative instruments | (24) | 0 | (4) | 0 |
Gains (losses) on investments | (4) | 0 | (11) | 0 |
Comprehensive income (loss) | (20,693) | 14,351 | (17,364) | 15,609 |
Comprehensive income attributable to noncontrolling interest | 433 | 514 | 765 | 1,185 |
Comprehensive income (loss) attributable to SGH | $ (21,126) | $ 13,837 | $ (18,129) | $ 14,424 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Revision of Prior Period, Accounting Standards Update, Adjustment | Ordinary shares | Additional Paid-in Capital | Additional Paid-in Capital Revision of Prior Period, Accounting Standards Update, Adjustment | Retained Earnings | Retained Earnings Revision of Prior Period, Accounting Standards Update, Adjustment | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Total SGH Shareholders’ Equity | Total SGH Shareholders’ Equity Revision of Prior Period, Accounting Standards Update, Adjustment | Non- controlling Interest in Subsidiary |
Common stock, beginning balance (in shares) at Aug. 27, 2021 | 50,138 | |||||||||||
Beginning balance at Aug. 27, 2021 | $ 318,924 | $ 1,504 | $ 396,120 | $ 184,787 | $ (50,545) | $ (221,615) | $ 310,251 | $ 8,673 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 20,698 | 20,027 | 20,027 | 671 | ||||||||
Other comprehensive income (loss) | (19,440) | (19,440) | (19,440) | |||||||||
Shares issued under equity plans (in shares) | 734 | |||||||||||
Shares issued under equity plans | 5,029 | $ 22 | 5,007 | 5,029 | ||||||||
Repurchase of ordinary shares (in shares) | (51) | |||||||||||
Repurchase of ordinary shares | (2,666) | $ (2) | 2 | (2,666) | (2,666) | |||||||
Share-based compensation expense | 9,739 | 9,739 | 9,739 | |||||||||
Common stock, ending balance (in shares) at Nov. 26, 2021 | 50,821 | |||||||||||
Ending balance at Nov. 26, 2021 | 332,284 | $ 1,524 | 410,868 | 204,814 | (53,211) | (241,055) | 322,940 | 9,344 | ||||
Common stock, beginning balance (in shares) at Aug. 27, 2021 | 50,138 | |||||||||||
Beginning balance at Aug. 27, 2021 | 318,924 | $ 1,504 | 396,120 | 184,787 | (50,545) | (221,615) | 310,251 | 8,673 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 23,670 | |||||||||||
Common stock, ending balance (in shares) at Feb. 25, 2022 | 51,189 | |||||||||||
Ending balance at Feb. 25, 2022 | 354,912 | $ 1,535 | 423,136 | 207,272 | (53,440) | (229,676) | 348,827 | 6,085 | ||||
Common stock, beginning balance (in shares) at Nov. 26, 2021 | 50,821 | |||||||||||
Beginning balance at Nov. 26, 2021 | 332,284 | $ 1,524 | 410,868 | 204,814 | (53,211) | (241,055) | 322,940 | 9,344 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 2,972 | 2,458 | 2,458 | 514 | ||||||||
Other comprehensive income (loss) | 11,379 | 11,379 | 11,379 | |||||||||
Shares issued under equity plans (in shares) | 372 | |||||||||||
Shares issued under equity plans | 2,431 | $ 11 | 2,420 | 2,431 | ||||||||
Repurchase of ordinary shares (in shares) | (4) | |||||||||||
Repurchase of ordinary shares | (229) | (229) | (229) | |||||||||
Share-based compensation expense | 9,848 | 9,848 | 9,848 | |||||||||
Distribution to noncontrolling interest | (3,773) | (3,773) | ||||||||||
Common stock, ending balance (in shares) at Feb. 25, 2022 | 51,189 | |||||||||||
Ending balance at Feb. 25, 2022 | $ 354,912 | $ 1,535 | 423,136 | 207,272 | (53,440) | (229,676) | 348,827 | 6,085 | ||||
Common stock, beginning balance (in shares) at Aug. 26, 2022 | 48,604 | 52,880 | ||||||||||
Beginning balance at Aug. 26, 2022 | $ 378,546 | $ (32,183) | $ 1,586 | 448,112 | $ (50,822) | 251,344 | $ 18,639 | (107,776) | (221,655) | 371,611 | $ (32,183) | 6,935 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 5,324 | 4,992 | 4,992 | 332 | ||||||||
Other comprehensive income (loss) | (1,995) | (1,995) | (1,995) | |||||||||
Shares issued under equity plans (in shares) | 1,060 | |||||||||||
Shares issued under equity plans | 3,942 | $ 32 | 3,910 | 3,942 | ||||||||
Repurchase of ordinary shares | (4,659) | (4,659) | (4,659) | |||||||||
Share-based compensation expense | 10,412 | 10,412 | 10,412 | |||||||||
Common stock, ending balance (in shares) at Nov. 25, 2022 | 53,940 | |||||||||||
Ending balance at Nov. 25, 2022 | $ 359,387 | $ 1,618 | 411,612 | 274,975 | (112,435) | (223,650) | 352,120 | 7,267 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 | |||||||||||
Common stock, beginning balance (in shares) at Aug. 26, 2022 | 48,604 | 52,880 | ||||||||||
Beginning balance at Aug. 26, 2022 | $ 378,546 | $ (32,183) | $ 1,586 | 448,112 | $ (50,822) | 251,344 | $ 18,639 | (107,776) | (221,655) | 371,611 | $ (32,183) | 6,935 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | $ (21,462) | |||||||||||
Common stock, ending balance (in shares) at Feb. 24, 2023 | 49,072 | 54,383 | ||||||||||
Ending balance at Feb. 24, 2023 | $ 331,520 | $ 1,631 | 417,998 | 247,756 | (123,999) | (217,557) | 325,829 | 5,691 | ||||
Common stock, beginning balance (in shares) at Nov. 25, 2022 | 53,940 | |||||||||||
Beginning balance at Nov. 25, 2022 | 359,387 | $ 1,618 | 411,612 | 274,975 | (112,435) | (223,650) | 352,120 | 7,267 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | (26,786) | (27,219) | (27,219) | 433 | ||||||||
Other comprehensive income (loss) | 6,093 | 6,093 | 6,093 | |||||||||
Shares issued under equity plans (in shares) | 443 | |||||||||||
Shares issued under equity plans | 308 | $ 13 | 295 | 308 | ||||||||
Repurchase of ordinary shares | (11,564) | (11,564) | (11,564) | |||||||||
Share-based compensation expense | 10,395 | 10,395 | 10,395 | |||||||||
Purchase of Capped Calls | (15,090) | (15,090) | (15,090) | |||||||||
Settlement of Capped Calls | 10,786 | 10,786 | 10,786 | |||||||||
Distribution to noncontrolling interest | $ (2,009) | (2,009) | ||||||||||
Common stock, ending balance (in shares) at Feb. 24, 2023 | 49,072 | 54,383 | ||||||||||
Ending balance at Feb. 24, 2023 | $ 331,520 | $ 1,631 | $ 417,998 | $ 247,756 | $ (123,999) | $ (217,557) | $ 325,829 | $ 5,691 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 24, 2023 | Nov. 25, 2022 | Feb. 25, 2022 | Nov. 26, 2021 | Feb. 24, 2023 | Feb. 25, 2022 | Aug. 26, 2022 | |
Cash flows from operating activities: | |||||||
Net income (loss) | $ (26,786) | $ 5,324 | $ 2,972 | $ 20,698 | $ (21,462) | $ 23,670 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation expense and amortization of intangible assets | 39,720 | 31,890 | |||||
Amortization of debt discount and issuance costs | 2,117 | 4,770 | |||||
Share-based compensation expense | 20,807 | 19,748 | |||||
Impairment of goodwill | 17,558 | 0 | 17,558 | 0 | |||
Change in fair value of contingent consideration | 6,400 | 24,000 | 10,100 | 41,200 | |||
Loss (gain) on extinguishment of debt | 16,691 | 653 | 15,924 | 653 | |||
Other | 4,024 | 688 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 208,224 | (75,579) | |||||
Inventories | 36,609 | 26,415 | |||||
Other assets | (6,724) | 10,445 | |||||
Accounts payable and accrued expenses and other liabilities | (228,981) | (36,142) | |||||
Payment of acquisition-related contingent consideration | (73,724) | 0 | |||||
Deferred income taxes, net | 2,358 | (447) | |||||
Net cash provided by operating activities | 26,550 | 47,311 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures and deposits on equipment | (24,262) | (20,142) | |||||
Acquisition of business, net of cash acquired | (213,073) | 0 | |||||
Other | 339 | (692) | |||||
Net cash used for investing activities | (236,996) | (20,834) | |||||
Cash flows from financing activities: | |||||||
Proceeds from debt | 295,287 | 270,775 | |||||
Proceeds from issuance of ordinary shares | 4,250 | 7,460 | |||||
Proceeds from borrowing under line of credit | 0 | 84,000 | |||||
Payment of acquisition-related contingent consideration | (28,100) | 0 | |||||
Payments to acquire ordinary shares | (16,223) | (2,895) | |||||
Payment of premium in connection with convertible note exchange | (14,141) | 0 | |||||
Repayments of debt | (8,996) | (125,000) | |||||
Net cash paid for settlement and purchase of Capped Calls | (4,304) | 0 | |||||
Distribution to noncontrolling interest | (2,009) | (3,773) | |||||
Repayments of borrowings under line of credit | 0 | (109,000) | |||||
Other | (3,416) | (3,841) | |||||
Net cash provided by financing activities | 222,348 | 117,726 | |||||
Effect of changes in currency exchange rates on cash, cash equivalents and restricted cash | 1,917 | (1,421) | |||||
Net increase in cash, cash equivalents and restricted cash | 13,819 | 142,782 | |||||
Cash, cash equivalents and restricted cash at beginning of period | $ 363,065 | $ 222,986 | 363,065 | 222,986 | $ 222,986 | ||
Cash, cash equivalents and restricted cash at end of period | $ 376,884 | $ 365,768 | $ 376,884 | $ 365,768 | $ 363,065 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Feb. 24, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation 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 (“GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended August 26, 2022 and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. These consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended August 26, 2022. Certain reclassifications have been made to prior period amounts to conform to current period presentation. Fiscal Year : Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2023 and 2022 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. 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. Recently Adopted Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06 – Debt – Debt with Conversion and Other Options and Derivatives and Hedging – Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU was effective for us in the first quarter of 2023 and permits the use of either the modified retrospective or fully retrospective method of transition. We adopted ASU 2020-06 in the first quarter of 2023 under the modified retrospective method. Upon adoption of ASU 2020-06, the previously separated equity component and associated issuance costs of our 2.25% convertible senior notes due 2026 were reclassified from additional paid-in capital to long-term debt, thereby eliminating future amortization of the debt discount as interest expense. The following table summarizes the effects of adopting ASU 2020-06: Ending Adoption of Beginning Long-term debt $ 591,389 $ 32,183 $ 623,572 Additional paid-in capital 448,112 (50,822) 397,290 Retained earnings 251,344 18,639 269,983 In October 2021, the FASB issued ASU 2021-08 – Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers , to require that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers . We adopted ASU 2021-08 in the third quarter of 2022 for any acquisitions occurring after our adoption. |
Business Acquisition
Business Acquisition | 6 Months Ended |
Feb. 24, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisition | Business Acquisition Stratus Technologies On August 29, 2022 (the “Acquisition Date”), we completed our previously announced acquisition of Storm Private Holdings I Ltd., a Cayman Islands exempted company (“Stratus Holding Company” and together with its subsidiaries, “Stratus Technologies”), pursuant to the terms of that certain Share Purchase Agreement (the “Purchase Agreement”), dated as of June 28, 2022, by and among SGH, Stratus Holding Company and Storm Private Investments LP, a Cayman Islands exempted limited partnership (“Seller”). Pursuant to the Purchase Agreement, among other matters, Seller sold to SGH, and SGH purchased from Seller, all of Seller’s right, title and interest in and to the outstanding equity securities of Stratus Holding Company (the “Share Purchase”). Stratus will operate as part of SGH’s Intelligent Platform Solutions (“IPS”) segment. Stratus Technologies is a global leader in simplified, protected, and autonomous computing platforms and services in the data center and at the Edge. For more than 40 years, Stratus Technologies has provided high-availability, fault-tolerant computing to Fortune 500 companies and small-to-medium sized businesses enabling them to securely and remotely run critical applications with minimal downtime. The acquisition of Stratus Technologies further enhances SGH’s growth and diversification strategy and complements and expands SGH’s IPS business in data center and edge environments. Purchase Price : At the closing of the transaction, we paid the seller a cash purchase price of $225 million, subject to certain adjustments. In addition, the Seller has the right to receive, and we will be obligated to pay, contingent consideration (if any) of up to $50 million (the “Earnout”) based on the gross profit performance of Stratus Technologies during the first full 12 fiscal months following the closing. The Earnout, if any, will be payable in cash, ordinary shares of SGH or a mix of cash and SGH Shares, at our election. See “Equity – SGH Shareholders’ Equity – Stratus Technologies Earnout.” Cash paid was utilized, in part, to settle the outstanding debt of Stratus Technologies as of the closing of the transaction and was recognized as a component of consideration transferred. As a result, the assets acquired and liabilities assumed do not include an assumed liability for the outstanding debt of Stratus Technologies. The provisional purchase price was as follows: Cash $ 225,000 Additional payment for net working capital adjustment (1) 17,246 Fair value of Earnout 20,800 $ 263,046 (1) Includes $14.4 million paid at closing and $2.8 million paid in the second quarter of 2023 upon completion of the review of the working capital assets acquired and liabilities assumed. Contingent Consideration : The Earnout was accounted for as contingent consideration. As of the Acquisition Date, the fair value of the Earnout was estimated to be $20.8 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, including forecasted gross profit, comparable company volatility, discount rate and cost of debt. The fair value of the Earnout was estimated based on the Company’s evaluation of the probability and amount of Earnout to be achieved based on the expected gross profit of Stratus Technologies. A Monte Carlo simulation model was used to estimate the Earnout payment, which was discounted to its present value based on the expected payment date of the Earnout. The model used an estimated gross profit volatility of 33.4% and a discount rate of 7.3% as of the Acquisition Date. The Earnout is revalued each quarter and any change in valuation is reflected in our results of operations. In the first six months of 2023, we adjusted the fair value of the Earnout to its current fair value with such change recognized in income from operations. The change in fair value reflected new information about the estimate of the gross profit of Stratus Technologies during the first full 12 fiscal months following the closing. As of February 24, 2023, the fair value of the Earnout was $30.9 million. Valuation : We estimated the fair value of the assets and liabilities of Stratus Technologies as of the Acquisition Date. The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on these valuation analyses and were as follows: Cash and cash equivalents $ 29,174 Accounts receivable 26,685 Inventories 10,890 Other current assets 6,536 Property and equipment 7,292 Operating lease right-of-use assets 9,216 Intangible assets 123,700 Goodwill 125,929 Other noncurrent assets 11,661 Accounts payable and accrued expenses (32,656) Other current liabilities (36,723) Noncurrent operating lease liabilities (7,067) Other noncurrent liabilities (11,591) Total net assets acquired $ 263,046 The goodwill arising from the acquisition of Stratus Technologies was assigned to our IPS segment. None of the goodwill recognized is expected to be deductible for income tax purposes. The fair values and useful lives of identifiable intangible assets were as follows: Amount Estimated useful life (in years) Technology $ 82,000 5 Customer relationships 27,800 8 Trademarks/trade names 10,000 9 In-process research and development 3,900 N/A $ 123,700 • Technology intangible assets were valued using the multi-period excess earnings method based on the discounted cash flow and technology obsolescence rate. Discounted cash flow requires the use of significant unobservable inputs, 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. • Customer relationship intangible assets were valued using the multi-period excess earnings method, which is the present value of the projected cash flows that are expected to be generated by the existing intangible assets 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. • Trademark/trade name 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 trademarks/trade names from a third party. Key assumptions included attributable revenue expected from the trademarks/trade names, royalty rates and assumed asset life. • In-process research and development (“IPR&D”) relates to next generation fault tolerant architecture. IPR&D is indefinite-lived and will be reviewed for impairment at least annually. Amortization will commence upon completion of research and development efforts. IPR&D was valued based on discounted cash flow, which requires the use of significant unobservable inputs, including projected revenue, expenses, capital expenditures and other costs. Unaudited Pro Forma Financial Information : The following unaudited pro forma financial information presents SGH’s combined results of operations as if the acquisition of Stratus Technologies had occurred on August 27, 2021. The unaudited pro forma financial information is based on various adjustments and assumptions and is not necessarily indicative of what SGH’s results of operations actually would have been had the acquisition been completed as of August 27, 2021 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 following unaudited pro forma financial information for the three and six months ended February 25, 2022 combines the historical results of operations of SGH for the three and six months ended February 25, 2022 and the historical results of operations of Stratus Technologies for the three and six months ended November 28, 2021: Three Months Ended Six Months Ended February 25, February 25, Net sales $ 489,336 $ 997,166 Net income attributable to SGH 1,299 6,479 Earnings per share: Basic $ 0.03 $ 0.13 Diluted $ 0.02 $ 0.12 |
Inventories
Inventories | 6 Months Ended |
Feb. 24, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories As of February 24, August 26, Raw materials $ 120,665 $ 150,913 Work in process 51,642 38,624 Finished goods 122,060 133,547 $ 294,367 $ 323,084 As of February 24, 2023 and August 26, 2022, 5% and 6%, respectively, of total inventories were inventories owned and held under our logistics services. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Feb. 24, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment As of February 24, August 26, Equipment $ 229,908 $ 204,805 Buildings and building improvements 65,736 59,047 Furniture, fixtures and software 41,742 38,715 Land 16,126 16,126 353,512 318,693 Accumulated depreciation (181,714) (164,758) $ 171,798 $ 153,935 Depreciation expense for property and equipment was $9.0 million and $17.8 million in the second quarter and first six months of 2023, respectively, and $10.2 million and $19.7 million in the second quarter and first six months of 2022, respectively. Change in Accounting Estimate : During the first quarter of 2023, we completed an assessment of the estimated useful lives of our manufacturing equipment. Based on that assessment, we revised the estimated useful lives from five years to eight years as of the beginning of the first quarter of 2023. The change reduced our non-cash depreciation expense for the first six months of 2023 by approximately $5.3 million, which resulted in aggregate reductions of $5.1 million in cost of sales and research and development expense and $0.2 million in the cost of our inventories as of the end of the second quarter of 2023. The reduction benefited net income by $4.2 million, or $0.09 per share. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Feb. 24, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill As of February 24, 2023 As of August 26, 2022 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Intangible assets: Technology $ 150,757 $ (31,578) $ 61,594 $ (18,473) Customer relationships 85,300 (38,890) 57,500 (32,238) Trademarks/trade names 29,200 (11,895) 19,200 (9,771) $ 265,257 $ (82,363) $ 138,294 $ (60,482) Goodwill by segment: Intelligent Platform Solutions $ 148,771 $ 40,401 Memory Solutions 33,939 33,608 $ 182,710 $ 74,009 In the first six months of 2023 and 2022, we capitalized $127.0 million, primarily in connection with our acquisition of Stratus Technologies, and $0.8 million, respectively, for intangible assets with weighted-average useful lives of 6.1 years and 13.6 years, respectively. Amortization expense for intangible assets was $11.0 million and $21.9 million in the second quarter and first six months of 2023, respectively, and $5.9 million and $12.2 million in the second quarter and first six months of 2022, respectively. Amortization expense is expected to be $22.0 million for the remainder of 2023, $41.9 million for 2024, $35.6 million for 2025, $30.4 million for 2026, $29.5 million for 2027 and $23.5 million for 2028 and thereafter. Goodwill of our IPS segment increased in the first six months of 2023, primarily due to the addition of $125.9 million in connection with our acquisition of Stratus Technologies. See “Business Acquisition – Stratus Technologies.” In connection with the preparation of the financial statements included in this quarterly report, we assessed goodwill associated with our Penguin Edge business within our IPS segment and concluded it was partially impaired. As a result, we recognized a charge of $17.6 million to impair the carrying value of goodwill. See “Impairment of Penguin Edge Goodwill.” Goodwill of our Memory Solutions segment increased by $0.3 million in the first six months of 2023 and decreased in all of 2022 by $0.2 million from translation adjustments. Impairment of Penguin Edge Goodwill During the second quarter of 2023, we initiated a plan within our IPS segment pursuant to which we intend to wind down manufacturing and discontinue the sale of certain legacy products offered through our Penguin Edge business by approximately the end of calendar 2024. In connection therewith and with the preparation of the financial statements included in this quarterly report, we performed a quantitative assessment of the fair value of goodwill using an income approach with assumptions that are considered Level 3 measurements and concluded that the carrying value of the Penguin Edge reporting unit goodwill exceeded its fair value. As a result, we recorded a charge of $17.6 million in the second quarter of 2023 to impair the carrying value of IPS goodwill. The fair value of the Penguin Edge reporting unit was determined primarily by discounting estimated future cash flows, which were determined based on revenue and expense assumptions over the next two years, at a weighted-average cost of capital of 14.5%. We concluded that long-lived assets other than goodwill, primarily consisting of customer relationship intangible assets, had fair values in excess of their carrying amounts, and accordingly recorded no impairments of such assets. These assets will continue to be amortized over their remaining useful lives through the date of our anticipated completion of wind-down activities. At each reporting date through the end of the wind-down period, we will estimate the then-future cash flows of the Penguin Edge business. As future cash flows are generally expected to decline over time, we currently anticipate that the |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Feb. 24, 2023 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses As of February 24, August 26, Accounts payable (1) $ 167,769 $ 345,063 Salaries, wages and benefits 34,046 45,189 Income and other taxes 16,068 17,961 Other 8,406 5,141 $ 226,289 $ 413,354 (1) Includes accounts payable for property and equipment of $6.3 million and $3.5 million as of February 24, 2023 and August 26, 2022, respectively. |
Debt
Debt | 6 Months Ended |
Feb. 24, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of February 24, August 26, Amended 2027 TLA $ 558,383 $ 269,304 2029 Notes 146,635 — 2026 Notes 98,353 213,023 LED Earnout Note — 101,824 Other 18,134 19,263 821,505 603,414 Less current debt (32,141) (12,025) Long-term debt $ 789,364 $ 591,389 Credit Facility On February 7, 2022, SGH and SMART Modular Technologies, Inc. (collectively, the “Borrowers”) entered into a credit agreement (the “Original Credit Agreement”) with a syndicate of banks that provides for (i) a term loan credit facility in an aggregate principal amount of $275.0 million (the “2027 TLA”) and (ii) a revolving credit facility in an aggregate principal amount of $250.0 million (the “2027 Revolver” and together with the 2027 TLA, the “Original Credit Facility”), in each case, maturing on February 7, 2027 (subject to certain earlier “springing maturity” dates upon certain conditions specified in the Original Credit Agreement). The Original Credit Agreement provides that up to $35.0 million of the 2027 Revolver is available for issuances of letters of credit. Incremental Amendment : On August 29, 2022, the Borrowers entered into the First Amendment (the “Amended Credit Agreement”) with and among the lenders party thereto and Citizens Bank, N.A., as Administrative Agent (the “Incremental Amendment”). The Incremental Amendment amends the Original Credit Agreement and (i) provides for incremental term loans under the Amended Credit Agreement in an aggregate amount of $300.0 million (the “Incremental Term Loans” and together with the 2027 TLA, the “Amended 2027 TLA”) which Incremental Term Loans are on the same terms as the term loans incurred under the Original Credit Agreement, (ii) increases the maximum First Lien Leverage Ratio (as defined in the Amended Credit Agreement) financial covenant from 3.00:1.00 to 3.25:1.00 and (iii) increases the aggregate amount of unrestricted cash and permitted investments netted from the definitions of Consolidated First Lien Debt and Consolidated Net Debt under the Amended Credit Agreement from $100 million to $125 million. Substantially simultaneously with entering into the Incremental Amendment, the Borrowers applied a portion of the proceeds of the Incremental Term Loans to (i) finance a portion of the purchase price for the acquisition of Stratus Technologies and (ii) prepay in full the $101.8 million outstanding under the LED Earnout Note. In connection with our prepayment of the LED Earnout Note, we recognized a gain of $0.8 million, which is included in other non-operating (income) expense in the accompanying statement of operations. Other : As of February 24, 2023, there was $566.1 million of principal amount outstanding under the Amended 2027 TLA, unamortized issuance costs were $7.7 million and the effective interest rate was 7.45%. As of February 24, 2023, there were no amounts outstanding under the 2027 Revolver. Convertible Senior Notes Convertible Senior Notes Exchange On January 18, 2023, SGH entered into separate, privately negotiated exchange agreements with a limited number of holders of its 2.25% Convertible Senior Notes due 2026 (“2026 Notes”) to exchange $150.0 million principal amount of the 2026 Notes for (i) $150.0 million in aggregate principal amount of new 2.00% Convertible Senior Notes due 2029 (“2029 Notes”) and (ii) an aggregate of approximately $15.6 million in cash, with such cash payment representing $14.1 million of premium paid for the 2026 Notes in excess of par value and $1.5 million of accrued and unpaid interest on the 2026 Notes (collectively, the “Exchange Transactions”). The 2029 Notes were issued pursuant to, and are governed by, an indenture (“2029 Indenture”), dated as of January 23, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee. Transactions involving contemporaneous exchanges between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation are accounted for as debt extinguishments if the debt instruments have substantially different terms. An exchange is deemed to have substantially different terms if: • The present value of the remaining cash flows of the old instrument differs by more than 10% of the present value of the cash flows of the new instrument, or • The change in the fair value of the conversion option immediately before and after the exchange is greater than 10% of the carrying value of the debt instrument immediately prior to the exchange. We concluded that the exchanged 2026 Notes and the 2029 Notes had substantially different terms, and accordingly, we accounted for the Exchange Transactions as the extinguishment of the 2026 Notes and the issuance of the 2029 Notes. As a result, we recognized an extinguishment loss, included in other non-operating expense, of $16.7 million, consisting of $14.1 million of premium paid to extinguish the 2026 Notes and $2.5 million for the write-off of unamortized issuance costs. 2029 Notes The 2029 Notes are senior, unsecured obligations of the Company and are equal in right of payment with our existing and future senior, unsecured indebtedness, senior in right of payment to our existing and future indebtedness that is expressly subordinated to the 2029 Notes and effectively subordinated to our existing and future senior, secured indebtedness, to the extent of the value of the collateral securing that indebtedness. Our 2026 Notes and 2029 Notes are structurally subordinated to all other existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of our subsidiaries. The 2029 Notes bear interest at a rate of 2.00% per annum on the principal amount thereof, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2023, to the noteholders of record of the 2029 Notes as of the close of business on the immediately preceding January 15 and July 15, respectively. The 2029 Notes will mature on February 1, 2029 (the “2029 Maturity Date”), unless earlier converted, redeemed or repurchased. The 2029 Notes are convertible into cash or a combination of cash and the Company’s ordinary shares, $0.03 par value per share (the “ordinary shares”), at our election. The initial conversion rate of the 2029 Notes is 47.1059 ordinary shares per $1,000 principal amount of the 2029 Notes, which represents an initial conversion price of approximately $21.23 per ordinary share. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the 2029 Indenture. In connection with any conversion of the 2029 Notes, we are required to pay the principal amount in cash and have the option to settle any amount in excess of the principal portion in cash and/or ordinary shares. Conversion Rights : Holders of the 2029 Notes may convert them under the following circumstances: i. during any fiscal quarter commencing after the fiscal quarter ended on May 26, 2023 (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. upon the occurrence of certain corporate events or distributions on our ordinary shares, as provided in the 2029 Indenture; iv. if we call the 2029 Notes for redemption; and v. on or after August 1, 2028 until the close of business on the second scheduled trading day immediately before the maturity date. Upon the occurrence of a “make-whole fundamental change” (as defined in the 2029 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 2029 Indenture), holders of the 2029 Notes may require us to repurchase their 2029 Notes at a cash repurchase price equal to the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of fundamental change includes certain business combination transactions involving the Company and certain de-listing events with respect to our ordinary shares. Cash Redemption at Our Option : We have the right to redeem the 2029 Notes, in whole or in part, at our option at any time, and from time to time, on or after February 6, 2026 and on or before the 40th scheduled trading day immediately before the 2029 Maturity Date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported per share sale price of our ordinary shares exceeds 130% of the conversion price on (i) each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the trading day immediately before the redemption notice date for such redemption and (ii) the trading day immediately before the date we send such notice. In addition, we have the right to redeem all, but not less than all, of the 2029 Notes if certain changes in tax law occur. Calling any 2029 Note for redemption will constitute a make-whole fundamental change with respect to such note, in which case the conversion rate applicable to the conversion of such note will be increased in certain circumstances if it is converted after it is called for redemption. 2026 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 “2026 Indenture”) between us and U.S. Bank National Association, as trustee. After the effect of the share dividend paid in the second quarter of 2022, the conversion rate of the 2026 Notes is 49.2504 ordinary shares per $1,000 principal amount of notes, which represents a conversion price of approximately $20.30 per ordinary share. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the 2026 Indenture. On January 18, 2023, we exchanged $150.0 million principal amount of 2026 Notes for $150.0 million principal amount of new 2029 Notes. As a result, as of February 24, 2023, $100.0 million in aggregate principal amount of 2026 Notes remain outstanding. See “Convertible Senior Notes – Convertible Senior Notes Exchange.” First Supplemental Indenture to Indenture Governing the 2026 Notes : On August 26, 2022, SGH entered into the First Supplemental Indenture (the “2026 First Supplemental Indenture”) to the 2026 Indenture governing the 2026 Notes. The 2026 First Supplemental Indenture became effective on August 27, 2022. Pursuant to the 2026 First Supplemental Indenture, SGH irrevocably elected (i) to eliminate SGH’s option to elect Physical Settlement (as defined in the 2026 Indenture) on any conversion of the 2026 Notes that occurs on or after the date of the 2026 First Supplemental Indenture and (ii) with respect to any Combination Settlement (as defined in the 2026 Indenture) for a conversion of the 2026 Notes, the Specified Dollar Amount (as defined in the 2026 Indenture) that will be settled in cash per $1,000 principal amount of the 2026 Notes shall be no lower than $1,000. As a result of our election, upon any conversion of the 2026 Notes, we will be required to pay cash in an amount at least equal to the principal portion while continuing to have the option to settle any amount in excess of the principal portion in cash and/or ordinary shares. Following the irrevocable election, only the amounts expected to be settled in excess of the principal portion are considered in calculating diluted earnings per share under the if-converted method. Convertible Senior Note Interest Unamortized debt discount and issuance costs are amortized over the terms of our 2026 Notes and 2029 Notes using the effective interest method. As of February 24, 2023 and August 26, 2022, the effective interest rate for our 2026 Notes was 2.83% and 7.06%, respectively. As of February 24, 2023, the effective interest rate for our 2029 Notes was 2.40%. Aggregate interest expense for our convertible notes consisted of contractual stated interest and amortization of discount and issuance costs and included the following: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Contractual stated interest $ 1,366 $ 1,390 $ 2,757 $ 2,781 Amortization of discount and issuance costs 317 2,250 654 4,460 $ 1,683 $ 3,640 $ 3,411 $ 7,241 As of August 26, 2022, the carrying amount of the equity components of the 2026 Notes, which was included in additional paid-in-capital, was $50.8 million. As of the beginning of the first quarter of 2023, we adopted ASU 2020-06. In connection therewith, we reclassified $32.2 million from additional paid-in-capital to long-term debt and $18.6 million from additional paid-in-capital to retained earnings. See “Recently Adopted Accounting Standards.” Maturities of Debt As of February 24, 2023, maturities of debt were as follows: Remainder of 2023 $ 16,266 2024 39,743 2025 32,532 2026 132,532 2027 461,592 2028 and thereafter 151,537 Less unamortized discount and issuance costs (12,697) $ 821,505 |
Leases
Leases | 6 Months Ended |
Feb. 24, 2023 | |
Leases [Abstract] | |
Leases | Leases As of February 24, 2023 and August 26, 2022, 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. Sublease income was not significant in any period presented. The components of operating lease expense were as follows: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Fixed lease cost $ 5,223 $ 3,213 $ 10,319 $ 6,516 Variable lease cost 299 453 683 821 Short-term lease cost 558 182 1,057 258 $ 6,080 $ 3,848 $ 12,059 $ 7,595 Cash flows used for operating activities in the first six months of 2023 and 2022 included payments for operating leases of $5.2 million and $5.1 million, respectively. Acquisitions of right-of-use assets were $10.5 million in the first six months of 2023, primarily due to the acquisition of Stratus Technologies, and $0.6 million in the first six months of 2022. As of February 24, 2023 and August 26, 2022, the weighted-average remaining lease term for our operating leases was 10.3 years and 10.9 years, respectively. Certain of our operating leases include one or more options to extend the lease term for periods from two Minimum payments of operating lease liabilities as of February 24, 2023 were as follows: Remainder of 2023 $ 6,008 2024 14,746 2025 12,633 2026 11,047 2027 8,629 2028 and thereafter 65,972 119,035 Less imputed interest (33,370) Present value of total lease liabilities $ 85,665 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Feb. 24, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 | 6 Months Ended |
Feb. 24, 2023 | |
Equity [Abstract] | |
Equity | Equity SGH Shareholders’ Equity Share Dividend On January 3, 2022, our Board of Directors declared a share dividend of one ordinary share, $0.03 par value per share, for every one outstanding ordinary share owned to shareholders of record as of January 25, 2022. The dividend was paid on February 1, 2022. The accompanying consolidated financial statements and notes have been restated and adjusted for the impact of the share dividend. Share Repurchase Authorization On April 4, 2022, our Board of Directors approved a $75 million share repurchase authorization, under which we may repurchase our outstanding ordinary shares from time to time through open market purchases, privately-negotiated transactions or otherwise. The share repurchase authorization has no expiration date but may be suspended or terminated by the Board of Directors at any time. In the first six months of 2023 and in 2022, we repurchased 0.5 million and 2.6 million shares, respectively, for $8.4 million and $50.0 million, respectively, under the repurchase authorization. Other Share Repurchases Ordinary shares withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are treated as ordinary share repurchases. We repurchased 33 thousand and 177 thousand ordinary shares as payment of withholding taxes for $0.6 million and $2.4 million, respectively, in the second quarter and first six months of 2023, and 4 thousand and 55 thousand ordinary shares for $0.2 million and $2.9 million, respectively, in the second quarter and first six months of 2022. In connection with the Exchange Transactions in the second quarter of 2023, we repurchased 326 thousand ordinary shares for $5.4 million. Stratus Technologies Earnout In connection with our acquisition of Status Technologies, the Seller has the right to receive an Earnout of up to $50.0 million based on the gross profit performance of Stratus Technologies during the first full 12 fiscal months following the closing. The Earnout, if any, will be payable in cash, ordinary shares of SGH or a mix of cash and SGH shares, at SGH’s election. At the time of settlement of the Earnout, SGH may elect to pay any portion in SGH shares and, if so, the number of SGH shares issued will be determined based on the volume weighted-average price per SGH share for the 30 consecutive trading days ending on and including the trading day immediately preceding the date of payment of the Earnout (subject to equitable adjustment in the event of certain changes to SGH shares occurring during such 30 consecutive trading days). Shares issuable pursuant to the Earnout are contingently issuable shares and are considered in the computation of diluted earnings per share if dilutive. The number of contingently issuable shares included in diluted earnings per share is the number of shares, if any, that would be issuable at the time of settlement based on the assumption that the current fair value of the Earnout remains unchanged until the end of the earnout period. As of February 24, 2023, based on the fair value of the Earnout, the contingently issuable shares were anti-dilutive. 2029 Capped Calls On January 18, 2023, in connection with the pricing of the 2029 Notes, we entered into privately negotiated capped call transactions (the “2029 Capped Calls”). The 2029 Capped Calls cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2029 Notes, the aggregate number of ordinary shares that initially underlie the 2029 Notes, and are expected generally to reduce potential dilution to our ordinary shares upon any conversion of the 2029 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the 2029 Capped Calls. The cap price of the 2029 Capped Calls is initially $29.1375 per share, which represented a premium of 75% over the last reported sale price of our ordinary shares on January 18, 2023. The cost of the 2029 Capped Calls, which are considered capital transactions, was $15.1 million and was recognized as a decrease to additional paid-in capital. The 2029 Capped Calls are separate transactions, each between the Company and the counterparties to the 2029 Capped Calls, and are not part of the terms of the 2029 Notes and do not affect any holder’s rights under the 2029 Notes or the 2029 Indenture. Holders of the 2029 Notes do not have any rights with respect to the 2029 Capped Calls. 2026 Capped Calls In connection with our issuance of the 2026 Notes in February 2020, we entered into capped call transactions (the “2026 Capped Calls”). As part of the Exchange Transactions, we entered into agreements with a number of counterparties to settle a portion of the 2026 Capped Calls in a notional amount corresponding to the amount of the 2026 Notes that were exchanged. The value received in connection with the settlement of a portion of the 2026 Capped Calls was $10.8 million and was recognized as an increase in additional paid-in capital. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component for the six months ended February 24, 2023 were as follows: Cumulative Translation Adjustment Gains (Losses) on Derivative Instruments Gains (Losses) on Investments Total As of August 26, 2022 $ (221,655) $ — $ — $ (221,655) Other comprehensive income (loss) before reclassifications 4,113 124 (11) 4,226 Reclassifications out of accumulated other comprehensive income — (128) — (128) Other comprehensive income (loss) 4,113 (4) (11) 4,098 As of February 24, 2023 $ (217,542) $ (4) $ (11) $ (217,557) Noncontrolling Interest in Subsidiary Noncontrolling interest increased by $0.4 million and $0.8 million in the second quarter and first six months of 2023 and $0.5 million and $1.2 million in the second quarter and first six months of 2022, respectively, for San’an’s 49% share of net income from the Cree Joint Venture. In the second quarters of 2023 and 2022, the Cree Joint Venture distributed an aggregate of $4.1 million and $7.7 million to its partners, including $2.1 million and $3.9 million to SGH and $2.0 million and $3.8 million to San’an, respectively. 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 | 6 Months Ended |
Feb. 24, 2023 | |
Receivables [Abstract] | |
Government Incentives | Government Incentives Brazil Financial Credits Through one of our Brazilian subsidiaries, we participate in an incentive program, known as Programa de Apoio ao Desenvolvimento Tecnológico da Indústria de Semicondutores (also known as Technology Development Support of the Semiconductor Industry Program) (“PADIS”), pursuant to which the Brazilian government incentivizes the manufacture and sale of semiconductor components within Brazil. In January 2022, the Brazilian government approved an extension to PADIS. The financial credits available through the program are set to expire in December 2026. PADIS provides 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 semiconductor-based solutions in an amount equivalent to 5% of the gross revenues of such Brazilian subsidiary recognized in connection with incentivized sales of semiconductor components in Brazil, excluding exports and sales to customers located at the Manaus Free Trade Zone, subject to the limitations of 13.1% (through December 31, 2024) and 12.3% (from January 1, 2025 through December 31, 2026) of the subsidiary’s gross revenues. Pursuant to PADIS, we recognized aggregate financial credits, reflected as a reduction of research and development expense, of $1.4 million and $4.0 million in the second quarter and first six months of 2023, respectively, and $6.0 million and $11.9 million in the second quarter and first six months of 2022, respectively. Financial credits earned under PADIS may be refunded in cash or used to offset liabilities for Brazil federal taxes. As of February 24, 2023 and August 26, 2022, receivables for earned but unused financial credits were $19.6 million and $18.7 million, respectively. Financial credits earned but unused as of February 24, 2023 can be utilized through December 2027. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Feb. 24, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Cash and cash equivalents as of February 24, 2023 and August 26, 2022 included money market funds of $15.6 million and $13.8 million, respectively, which were valued based on Level 1 measurements using quoted prices in active markets for identical assets. Restricted cash was $1.0 million as of February 24, 2023. Fair value measurements were as follows: As of February 24, 2023 As of August 26, 2022 Fair Carrying Fair Carrying Assets: Derivative financial instrument assets $ 146 $ 146 $ — $ — Liabilities: Derivative financial instrument liabilities $ 509 $ 509 $ 605 $ 605 Acquisition-related contingent consideration 30,900 30,900 — — Amended 2027 TLA 566,070 558,383 273,281 269,304 2029 Notes 155,220 146,635 — — 2026 Notes 108,857 98,353 290,223 213,023 LED Earnout Note — — 96,412 101,824 Debt – other 17,101 18,134 17,855 19,263 The fair values of our derivative financial instruments, as measured on a recurring basis, were based on Level 2 measurements, including market-based observable inputs of currency exchange spot and forward rates, interest rates and credit-risk spreads. Acquisition-related contingent consideration is related to our acquisition of Stratus Technologies and is included in current liabilities as of February 24, 2023. The fair value as of February 24, 2023, measured on a recurring basis, was based on Level 3 measurements, which included 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. The fair value of the Earnout was estimated based on the Company’s evaluation of the probability and amount of Earnout to be achieved based on the expected gross profit of Stratus Technologies. The Monte Carlo simulation model was used to estimate the Earnout payment, which was discounted to its present value based on the expected payment date of the Earnout. The model used an estimated gross profit volatility of 33.2% and a discount rate of 8.8% as of February 24, 2023. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Feb. 24, 2023 | |
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 from 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. Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Realized (gains) losses on currency forward contracts $ 276 $ (1,236) $ 1,283 $ (5,146) Unrealized (gains) losses on currency forward contracts 325 4,336 (105) 3,583 |
Equity Plans
Equity Plans | 6 Months Ended |
Feb. 24, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Plans | Equity Plans As of February 24, 2023, 8.8 million shares of our ordinary shares were available for future awards under our equity plans. Restricted Share Awards and Restricted Share Units Awards (“Restricted Awards”) Aggregate Restricted Award activity was as follows: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Awards granted 82 113 1,222 646 Weighted-average grant date fair value per share $ 17.15 $ 30.28 $ 19.05 $ 28.42 Aggregate vesting date fair value of shares vested $ 6,665 $ 6,272 $ 15,614 $ 18,228 As of February 24, 2023, total unrecognized compensation costs for unvested Restricted Awards was $84.9 million, which was expected to be recognized over a weighted-average period of 2.5 years. Share Options As of February 24, 2023, total aggregate unrecognized compensation costs for unvested options was $1.8 million, which was expected to be recognized over a weighted-average period of 1.4 years. Employee Share Purchase Plan (“ESPP”) Under our ESPP, employees purchased 265 thousand ordinary shares for $2.9 million in the first six months of 2023 and 133 thousand shares for $3.0 million in the first six months of 2022. Share-Based Compensation Expense Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Share-based compensation expense by caption: Cost of sales $ 1,369 $ 1,648 $ 3,077 $ 3,379 Research and development 1,441 1,559 3,075 3,099 Selling, general and administrative 7,585 6,766 14,655 13,270 $ 10,395 $ 9,973 $ 20,807 $ 19,748 Income tax benefits related to the tax deductions for share-based awards are recognized only upon the settlement of the related share-based awards. Income tax benefits for share-based awards were $1.8 million and $4.0 million in the second quarter and first six months of 2023, respectively, and $1.8 million and $4.9 million in the second quarter and first six months of 2022, respectively. |
Revenue and Customer Contract B
Revenue and Customer Contract Balances | 6 Months Ended |
Feb. 24, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Customer Contract Balances | Revenue and Customer Contract Balances Net Sales and Gross Billings We provide certain logistics services on an agent basis, whereby we procure materials on behalf of our customers and then resell such materials to our customers. Our logistics services business includes procurement, logistics, inventory management, temporary warehousing, kitting and/or 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. 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. The cost of materials billed to our customers under these arrangements, but not recognized as revenue or cost of sales in our results of operations, were as follows: Three Months ended Six Months Ended February 24, February 25, February 24, February 25, Cost of materials billed in connection with logistics services $ 143,984 $ 339,715 $ 521,735 $ 675,990 Customer Contract Balances As of February 24, August 26, Contract assets (1) $ 1,296 $ 1,322 Contract liabilities: (2) Deferred revenue (3) $ 61,841 $ 39,676 Customer advances 52,061 24,125 $ 113,902 $ 63,801 (1) Contract assets are included in other current and noncurrent assets. (2) Contract liabilities are included in other current 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. (3) Deferred revenue includes $15.6 million and $23.3 million as of February 24, 2023 and August 26, 2022, respectively, related to contracts that contain termination rights. Deferred revenue represents amounts received from customers in advance of satisfying performance obligations. As of February 24, 2023, we expect to recognize revenue of $49.3 million of the balance of $61.8 million in the next 12 months and the remaining amount thereafter. In the first six months of 2023, we recognized revenue of $29.8 million from satisfying performance obligations related to amounts included in deferred revenue as of August 26, 2022. Customer advances represent amounts received from customers for advance payments to secure product. In the first six months of 2023, we recognized revenue of $1.8 million from satisfying performance obligations related to amounts included in customer advances as of August 26, 2022. As of February 24, 2023 and August 26, 2022, other current liabilities included $12.0 million and $15.4 million, respectively, for estimates of consideration payable to customers, including estimates for pricing adjustments and returns. |
Other Operating (Income) Expens
Other Operating (Income) Expense | 6 Months Ended |
Feb. 24, 2023 | |
Other Income and Expenses [Abstract] | |
Other Operating (Income) Expense | Other Operating (Income) Expense In the first quarter of 2023, we initiated plans that included workforce reductions and the elimination of certain projects across our businesses. In connection therewith, we recorded restructure charges of $4.2 million and $6.2 million for the second quarter and first six months of 2023, respectively, primarily for employee severance costs and other benefits. We anticipate that these activities will continue into subsequent quarters of 2023 and anticipate recording additional restructure charges. As of February 24, 2023, $3.3 million remained unpaid, which is expected to be paid in the remainder of 2023. |
Other Non-operating (Income) Ex
Other Non-operating (Income) Expense | 6 Months Ended |
Feb. 24, 2023 | |
Nonoperating Income (Expense) [Abstract] | |
Other Non-operating (Income) Expense | Other Non-operating (Income) Expense Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Loss (gain) on extinguishment of debt $ 16,691 $ 653 $ 15,924 $ 653 Foreign currency losses 281 1,408 523 2,875 Loss (gain) on disposition of assets (3,037) 25 (3,116) 46 Other (606) (301) (662) (554) $ 13,329 $ 1,785 $ 12,669 $ 3,020 In the second quarter of 2023, we recognized a loss in connection with the extinguishment of $150.0 million of our 2026 Notes. See “Debt – Convertible Senior Notes – Convertible Senior Notes Exchange.” |
Income Taxes
Income Taxes | 6 Months Ended |
Feb. 24, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Income (loss) before taxes $ (28,502) $ 10,558 $ (18,288) $ 39,011 Income tax provision (benefit) (1,716) 7,586 3,174 15,341 Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to us and our subsidiaries, adjusted for certain discrete items which are fully recognized in the period they occur. Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate. Our provision for income taxes for the first six months of 2023 decreased by $12.2 million as compared to the same period in the prior year, primarily due to a decrease in profit before tax. As of February 24, 2023 and August 26, 2022, we had a full valuation allowance for net deferred tax assets associated with our U.S. operations. Management continues to evaluate future projected financial performance to determine whether such performance is sufficient evidence to support a reduction in or reversal of the valuation allowances. The amount of the deferred tax asset considered realizable could be adjusted if significant positive evidence increases. Determining the consolidated provision for income tax expense, income tax liabilities and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates, which involves estimating current tax exposures as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction. The estimates used could differ from actual results, which may have a significant impact on operating results in future periods. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Feb. 24, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Net income (loss) attributable to SGH – Basic and Diluted $ (27,219) $ 2,458 $ (22,227) $ 22,485 Weighted-average shares outstanding – Basic 49,116 49,522 49,039 49,267 Dilutive effect of equity plans and convertible notes — 8,114 — 6,868 Weighted-average shares outstanding – Diluted 49,116 57,636 49,039 56,135 Earnings (loss) per share: Basic $ (0.55) $ 0.05 $ (0.45) $ 0.46 Diluted $ (0.55) $ 0.04 $ (0.45) $ 0.40 Below are unweighted potentially dilutive shares that were not included in the computation of diluted earnings per share because to do so would have been antidilutive: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Equity plans 7,688 24 7,688 276 Stratus Technologies contingently issuable shares 1,787 — 1,787 — 9,475 24 9,475 276 Upon any conversion of our 2026 Notes or 2029 Notes, we will be required to pay cash in an amount at least equal to the principal portion and have the option to settle any amount in excess of the principal portion in cash and/or ordinary shares. As a result, only the amounts settled in excess of the principal portion are considered in calculating diluted earnings per share. See “Debt – Convertible Senior Notes.” Upon completion of the Earnout period, we will be obligated to pay the Stratus contingent consideration in cash, ordinary shares of SGH or a mix of cash and SGH shares, at our election. See “Equity – SGH Shareholders’ Equity – Stratus Technologies Earnout.” |
Segment and Other Information
Segment and Other Information | 6 Months Ended |
Feb. 24, 2023 | |
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. We have the following three businesses, which are our reportable segments: • Memory Solutions : Our Memory Solutions group, under our SMART Modular brand, 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, under our Penguin Solutions and newly acquired Stratus Technologies brands, offers specialized platform solutions and services for high-performance computing (“HPC”), artificial intelligence (“AI”), machine learning (“ML”), advanced modeling and the internet of things (“IoT”) that span the continuum of edge, core and cloud. Our solutions are designed specifically for customers across multiple markets, including government, hyperscale, energy, financial services, health care, education and others. On August 29, 2022, we completed the acquisition of Stratus Technologies, a global leader in simplified, protected and autonomous computing solutions in the data center and at the Edge. • LED Solutions : Our LED Solutions group, under our Cree LED brand, 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 general lighting, video screens and specialty lighting applications. 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. Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Net sales: Memory Solutions $ 151,136 $ 260,081 $ 343,103 $ 499,482 Intelligent Platform Solutions 222,451 82,257 433,422 200,911 LED Solutions 55,587 106,833 118,127 218,722 Total net sales $ 429,174 $ 449,171 $ 894,652 $ 919,115 Segment operating income: Memory Solutions $ 14,430 $ 32,496 $ 35,575 $ 69,166 Intelligent Platform Solutions 37,978 7,702 72,144 21,882 LED Solutions (977) 17,237 (1,455) 35,537 Total segment operating income 51,431 57,435 106,264 126,585 Unallocated: Share-based compensation expense (10,395) (9,973) (20,807) (19,748) Amortization of acquisition-related intangibles (10,815) (5,829) (21,673) (12,172) Flow through of inventory step up — — (2,599) — Cost of sales related restructure (5,552) — (5,552) — Acquisition and integration expenses (2,824) (252) (9,556) (1,290) Impairment of goodwill (17,558) — (17,558) — Change in fair value of contingent consideration (6,400) (24,000) (10,100) (41,200) Restructure charge (4,154) — (6,195) — Other (900) (576) (1,800) (576) Total unallocated (58,598) (40,630) (95,840) (74,986) Consolidated operating income (loss) $ (7,167) $ 16,805 $ 10,424 $ 51,599 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Feb. 24, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation 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 (“GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended August 26, 2022 and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. These consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended August 26, 2022. Certain reclassifications have been made to prior period amounts to conform to current period presentation. Fiscal Year : Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2023 and 2022 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. 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. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06 – Debt – Debt with Conversion and Other Options and Derivatives and Hedging – Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU was effective for us in the first quarter of 2023 and permits the use of either the modified retrospective or fully retrospective method of transition. We adopted ASU 2020-06 in the first quarter of 2023 under the modified retrospective method. Upon adoption of ASU 2020-06, the previously separated equity component and associated issuance costs of our 2.25% convertible senior notes due 2026 were reclassified from additional paid-in capital to long-term debt, thereby eliminating future amortization of the debt discount as interest expense. The following table summarizes the effects of adopting ASU 2020-06: Ending Adoption of Beginning Long-term debt $ 591,389 $ 32,183 $ 623,572 Additional paid-in capital 448,112 (50,822) 397,290 Retained earnings 251,344 18,639 269,983 In October 2021, the FASB issued ASU 2021-08 – Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers , to require that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers . We adopted ASU 2021-08 in the third quarter of 2022 for any acquisitions occurring after our adoption. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Accounting Policies [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | The following table summarizes the effects of adopting ASU 2020-06: Ending Adoption of Beginning Long-term debt $ 591,389 $ 32,183 $ 623,572 Additional paid-in capital 448,112 (50,822) 397,290 Retained earnings 251,344 18,639 269,983 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price | The provisional purchase price was as follows: Cash $ 225,000 Additional payment for net working capital adjustment (1) 17,246 Fair value of Earnout 20,800 $ 263,046 (1) Includes $14.4 million paid at closing and $2.8 million paid in the second quarter of 2023 upon completion of the review of the working capital assets acquired and liabilities assumed. |
Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date | The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on these valuation analyses and were as follows: Cash and cash equivalents $ 29,174 Accounts receivable 26,685 Inventories 10,890 Other current assets 6,536 Property and equipment 7,292 Operating lease right-of-use assets 9,216 Intangible assets 123,700 Goodwill 125,929 Other noncurrent assets 11,661 Accounts payable and accrued expenses (32,656) Other current liabilities (36,723) Noncurrent operating lease liabilities (7,067) Other noncurrent liabilities (11,591) Total net assets acquired $ 263,046 |
Summary of Intangible Assets | The fair values and useful lives of identifiable intangible assets were as follows: Amount Estimated useful life (in years) Technology $ 82,000 5 Customer relationships 27,800 8 Trademarks/trade names 10,000 9 In-process research and development 3,900 N/A $ 123,700 |
Summary of Unaudited Pro Forma Information | The following unaudited pro forma financial information for the three and six months ended February 25, 2022 combines the historical results of operations of SGH for the three and six months ended February 25, 2022 and the historical results of operations of Stratus Technologies for the three and six months ended November 28, 2021: Three Months Ended Six Months Ended February 25, February 25, Net sales $ 489,336 $ 997,166 Net income attributable to SGH 1,299 6,479 Earnings per share: Basic $ 0.03 $ 0.13 Diluted $ 0.02 $ 0.12 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | As of February 24, August 26, Raw materials $ 120,665 $ 150,913 Work in process 51,642 38,624 Finished goods 122,060 133,547 $ 294,367 $ 323,084 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of February 24, August 26, Equipment $ 229,908 $ 204,805 Buildings and building improvements 65,736 59,047 Furniture, fixtures and software 41,742 38,715 Land 16,126 16,126 353,512 318,693 Accumulated depreciation (181,714) (164,758) $ 171,798 $ 153,935 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill by Segment | As of February 24, 2023 As of August 26, 2022 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Intangible assets: Technology $ 150,757 $ (31,578) $ 61,594 $ (18,473) Customer relationships 85,300 (38,890) 57,500 (32,238) Trademarks/trade names 29,200 (11,895) 19,200 (9,771) $ 265,257 $ (82,363) $ 138,294 $ (60,482) Goodwill by segment: Intelligent Platform Solutions $ 148,771 $ 40,401 Memory Solutions 33,939 33,608 $ 182,710 $ 74,009 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | As of February 24, August 26, Accounts payable (1) $ 167,769 $ 345,063 Salaries, wages and benefits 34,046 45,189 Income and other taxes 16,068 17,961 Other 8,406 5,141 $ 226,289 $ 413,354 (1) Includes accounts payable for property and equipment of $6.3 million and $3.5 million as of February 24, 2023 and August 26, 2022, respectively. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | As of February 24, August 26, Amended 2027 TLA $ 558,383 $ 269,304 2029 Notes 146,635 — 2026 Notes 98,353 213,023 LED Earnout Note — 101,824 Other 18,134 19,263 821,505 603,414 Less current debt (32,141) (12,025) Long-term debt $ 789,364 $ 591,389 |
Interest Income and Interest Expense Disclosure | nterest expense for our convertible notes consisted of contractual stated interest and amortization of discount and issuance costs and included the following: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Contractual stated interest $ 1,366 $ 1,390 $ 2,757 $ 2,781 Amortization of discount and issuance costs 317 2,250 654 4,460 $ 1,683 $ 3,640 $ 3,411 $ 7,241 |
Summary of Maturities of Debt | As of February 24, 2023, maturities of debt were as follows: Remainder of 2023 $ 16,266 2024 39,743 2025 32,532 2026 132,532 2027 461,592 2028 and thereafter 151,537 Less unamortized discount and issuance costs (12,697) $ 821,505 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Leases [Abstract] | |
Summary of Components of Operating Lease Expense | The components of operating lease expense were as follows: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Fixed lease cost $ 5,223 $ 3,213 $ 10,319 $ 6,516 Variable lease cost 299 453 683 821 Short-term lease cost 558 182 1,057 258 $ 6,080 $ 3,848 $ 12,059 $ 7,595 |
Schedule of Minimum Payments of Lease Liabilities | Minimum payments of operating lease liabilities as of February 24, 2023 were as follows: Remainder of 2023 $ 6,008 2024 14,746 2025 12,633 2026 11,047 2027 8,629 2028 and thereafter 65,972 119,035 Less imputed interest (33,370) Present value of total lease liabilities $ 85,665 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) by component for the six months ended February 24, 2023 were as follows: Cumulative Translation Adjustment Gains (Losses) on Derivative Instruments Gains (Losses) on Investments Total As of August 26, 2022 $ (221,655) $ — $ — $ (221,655) Other comprehensive income (loss) before reclassifications 4,113 124 (11) 4,226 Reclassifications out of accumulated other comprehensive income — (128) — (128) Other comprehensive income (loss) 4,113 (4) (11) 4,098 As of February 24, 2023 $ (217,542) $ (4) $ (11) $ (217,557) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements of Other Assets and Liabilities | Fair value measurements were as follows: As of February 24, 2023 As of August 26, 2022 Fair Carrying Fair Carrying Assets: Derivative financial instrument assets $ 146 $ 146 $ — $ — Liabilities: Derivative financial instrument liabilities $ 509 $ 509 $ 605 $ 605 Acquisition-related contingent consideration 30,900 30,900 — — Amended 2027 TLA 566,070 558,383 273,281 269,304 2029 Notes 155,220 146,635 — — 2026 Notes 108,857 98,353 290,223 213,023 LED Earnout Note — — 96,412 101,824 Debt – other 17,101 18,134 17,855 19,263 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Gain (Loss) | Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Realized (gains) losses on currency forward contracts $ 276 $ (1,236) $ 1,283 $ (5,146) Unrealized (gains) losses on currency forward contracts 325 4,336 (105) 3,583 |
Equity Plans (Tables)
Equity Plans (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Aggregate Restricted Award Activity and Assumptions | Aggregate Restricted Award activity was as follows: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Awards granted 82 113 1,222 646 Weighted-average grant date fair value per share $ 17.15 $ 30.28 $ 19.05 $ 28.42 Aggregate vesting date fair value of shares vested $ 6,665 $ 6,272 $ 15,614 $ 18,228 |
Schedule of Share Based Compensation Expense Allocation | Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Share-based compensation expense by caption: Cost of sales $ 1,369 $ 1,648 $ 3,077 $ 3,379 Research and development 1,441 1,559 3,075 3,099 Selling, general and administrative 7,585 6,766 14,655 13,270 $ 10,395 $ 9,973 $ 20,807 $ 19,748 |
Revenue and Customer Contract_2
Revenue and Customer Contract Balances (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Net Sales by Products and Services and Gross Amounts Billed for Services | The cost of materials billed to our customers under these arrangements, but not recognized as revenue or cost of sales in our results of operations, were as follows: Three Months ended Six Months Ended February 24, February 25, February 24, February 25, Cost of materials billed in connection with logistics services $ 143,984 $ 339,715 $ 521,735 $ 675,990 |
Summary of Customer Contract Balances | As of February 24, August 26, Contract assets (1) $ 1,296 $ 1,322 Contract liabilities: (2) Deferred revenue (3) $ 61,841 $ 39,676 Customer advances 52,061 24,125 $ 113,902 $ 63,801 (1) Contract assets are included in other current and noncurrent assets. (2) Contract liabilities are included in other current 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. (3) Deferred revenue includes $15.6 million and $23.3 million as of February 24, 2023 and August 26, 2022, respectively, related to contracts that contain termination rights. |
Other Non-operating (Income) _2
Other Non-operating (Income) Expense (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Nonoperating Income (Expense) [Abstract] | |
Schedule of Other Non-operating (Income) Expense | Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Loss (gain) on extinguishment of debt $ 16,691 $ 653 $ 15,924 $ 653 Foreign currency losses 281 1,408 523 2,875 Loss (gain) on disposition of assets (3,037) 25 (3,116) 46 Other (606) (301) (662) (554) $ 13,329 $ 1,785 $ 12,669 $ 3,020 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) before Income Taxes and Components of Income Tax Provision (Benefit) | Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Income (loss) before taxes $ (28,502) $ 10,558 $ (18,288) $ 39,011 Income tax provision (benefit) (1,716) 7,586 3,174 15,341 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Net income (loss) attributable to SGH – Basic and Diluted $ (27,219) $ 2,458 $ (22,227) $ 22,485 Weighted-average shares outstanding – Basic 49,116 49,522 49,039 49,267 Dilutive effect of equity plans and convertible notes — 8,114 — 6,868 Weighted-average shares outstanding – Diluted 49,116 57,636 49,039 56,135 Earnings (loss) per share: Basic $ (0.55) $ 0.05 $ (0.45) $ 0.46 Diluted $ (0.55) $ 0.04 $ (0.45) $ 0.40 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Below are unweighted potentially dilutive shares that were not included in the computation of diluted earnings per share because to do so would have been antidilutive: Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Equity plans 7,688 24 7,688 276 Stratus Technologies contingently issuable shares 1,787 — 1,787 — 9,475 24 9,475 276 |
Segment and Other Information (
Segment and Other Information (Tables) | 6 Months Ended |
Feb. 24, 2023 | |
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. Three Months Ended Six Months Ended February 24, February 25, February 24, February 25, Net sales: Memory Solutions $ 151,136 $ 260,081 $ 343,103 $ 499,482 Intelligent Platform Solutions 222,451 82,257 433,422 200,911 LED Solutions 55,587 106,833 118,127 218,722 Total net sales $ 429,174 $ 449,171 $ 894,652 $ 919,115 Segment operating income: Memory Solutions $ 14,430 $ 32,496 $ 35,575 $ 69,166 Intelligent Platform Solutions 37,978 7,702 72,144 21,882 LED Solutions (977) 17,237 (1,455) 35,537 Total segment operating income 51,431 57,435 106,264 126,585 Unallocated: Share-based compensation expense (10,395) (9,973) (20,807) (19,748) Amortization of acquisition-related intangibles (10,815) (5,829) (21,673) (12,172) Flow through of inventory step up — — (2,599) — Cost of sales related restructure (5,552) — (5,552) — Acquisition and integration expenses (2,824) (252) (9,556) (1,290) Impairment of goodwill (17,558) — (17,558) — Change in fair value of contingent consideration (6,400) (24,000) (10,100) (41,200) Restructure charge (4,154) — (6,195) — Other (900) (576) (1,800) (576) Total unallocated (58,598) (40,630) (95,840) (74,986) Consolidated operating income (loss) $ (7,167) $ 16,805 $ 10,424 $ 51,599 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | Jan. 18, 2023 | Feb. 28, 2020 |
2.25% Convertible Senior Notes Due 2026 | ||
Significant Accounting Policies [Line Items] | ||
Note interest rate | 2.25% | 2.25% |
Significant Accounting Polici_5
Significant Accounting Policies - Accounting Standards Update and Change in Accounting Principle (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 27, 2022 | Aug. 26, 2022 |
Significant Accounting Policies [Line Items] | |||
Long-term debt | $ 789,364 | $ 591,389 | |
Additional paid-in capital | $ 397,290 | 448,112 | |
Retained earnings | $ 247,756 | 269,983 | 251,344 |
Cumulative Translation Adjustment | |||
Significant Accounting Policies [Line Items] | |||
Additional paid-in capital | (50,822) | ||
Retained earnings | 18,639 | ||
2.25% Convertible Senior Notes Due 2026 | |||
Significant Accounting Policies [Line Items] | |||
Long-term debt | 623,572 | $ 591,389 | |
2.25% Convertible Senior Notes Due 2026 | Cumulative Translation Adjustment | |||
Significant Accounting Policies [Line Items] | |||
Long-term debt | $ 32,183 |
Business Acquisition - Addition
Business Acquisition - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 29, 2022 USD ($) | Feb. 25, 2022 USD ($) | Feb. 24, 2023 USD ($) | Feb. 25, 2022 USD ($) | |
Measurement Input, Price Volatility | Valuation Technique, Monte Carlo Simulation | ||||
Business Acquisition [Line Items] | ||||
Measurement input | 0.334 | 0.332 | ||
Measurement Input, Discount Rate | Valuation Technique, Monte Carlo Simulation | ||||
Business Acquisition [Line Items] | ||||
Measurement input | 0.073 | 0.088 | ||
Stratus Technologies | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, gross | $ 225,000 | |||
Contingent consideration (up to) | 50,000 | |||
Acquisition-related contingent consideration | $ 20,800 | $ 30,900 | ||
Net sales | $ 489,336 | 85,900 | $ 997,166 | |
Net income attributable to SGH | $ 1,299 | (5,300) | $ 6,479 | |
Stratus Technologies | Selling, general and administrative | ||||
Business Acquisition [Line Items] | ||||
Acquisition-related transaction expenses | $ 4,800 |
Business Acquisition - Schedule
Business Acquisition - Schedule of Purchase Price (Details) - Stratus Technologies - USD ($) $ in Thousands | Aug. 29, 2022 | Feb. 24, 2023 |
Business Acquisition [Line Items] | ||
Cash | $ 225,000 | |
Additional payment for net working capital adjustment | 17,246 | |
Change in fair value of contingent consideration | 20,800 | |
Total consideration | $ 263,046 | |
Assets acquired | $ 14,400 | |
Liabilities assumed | $ 2,800 |
Business Acquisition - Summary
Business Acquisition - Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 29, 2022 | Aug. 26, 2022 | Feb. 25, 2022 |
Business Acquisition [Line Items] | ||||
Intangible assets | $ 127,000 | $ 800 | ||
Goodwill | $ 182,710 | $ 74,009 | ||
Stratus Technologies | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 29,174 | |||
Accounts receivable | 26,685 | |||
Inventories | 10,890 | |||
Other current assets | 6,536 | |||
Property and equipment | 7,292 | |||
Operating lease right-of-use assets | 9,216 | |||
Intangible assets | 123,700 | |||
Goodwill | 125,929 | |||
Other noncurrent assets | 11,661 | |||
Accounts payable and accrued expenses | (32,656) | |||
Other current liabilities | (36,723) | |||
Noncurrent operating lease liabilities | (7,067) | |||
Other noncurrent liabilities | (11,591) | |||
Total net assets acquired | $ 263,046 |
Business Acquisition - Summar_2
Business Acquisition - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Aug. 29, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Business Acquisition [Line Items] | |||
Amount | $ 127,000 | $ 800 | |
Estimated useful life (in years) | 6 years 1 month 6 days | 13 years 7 months 6 days | |
Stratus Technologies | |||
Business Acquisition [Line Items] | |||
Amount | $ 123,700 | ||
Stratus Technologies | Technology | |||
Business Acquisition [Line Items] | |||
Amount | $ 82,000 | ||
Estimated useful life (in years) | 5 years | ||
Stratus Technologies | Customer relationships | |||
Business Acquisition [Line Items] | |||
Amount | $ 27,800 | ||
Estimated useful life (in years) | 8 years | ||
Stratus Technologies | Trademarks/trade names | |||
Business Acquisition [Line Items] | |||
Amount | $ 10,000 | ||
Estimated useful life (in years) | 9 years | ||
Stratus Technologies | In-process research and development | |||
Business Acquisition [Line Items] | |||
Amount | $ 3,900 |
Business Acquisition - Summar_3
Business Acquisition - Summary of Unaudited Pro Forma Information (Details) - Stratus Technologies - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Business Acquisition [Line Items] | |||
Net sales | $ 489,336 | $ 85,900 | $ 997,166 |
Net income attributable to SGH | $ 1,299 | $ (5,300) | $ 6,479 |
Earnings per share: | |||
Basic (in usd per share) | $ 0.03 | $ 0.13 | |
Diluted (in usd per share) | $ 0.02 | $ 0.12 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 120,665 | $ 150,913 |
Work in process | 51,642 | 38,624 |
Finished goods | 122,060 | 133,547 |
Total inventories | $ 294,367 | $ 323,084 |
Inventories - Additional Inform
Inventories - Additional Information (Details) | Feb. 24, 2023 | Aug. 26, 2022 |
Inventory Disclosure [Abstract] | ||
Percentage of inventories | 5% | 6% |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 353,512 | $ 318,693 |
Accumulated depreciation | (181,714) | (164,758) |
Net property and equipment | 171,798 | 153,935 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 229,908 | 204,805 |
Buildings and building improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 65,736 | 59,047 |
Furniture, fixtures and software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 41,742 | 38,715 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 16,126 | $ 16,126 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 24, 2023 | Nov. 25, 2022 | Feb. 25, 2022 | Nov. 26, 2021 | Feb. 24, 2023 | Feb. 25, 2022 | Aug. 26, 2022 | |
Property Plant And Equipment [Line Items] | |||||||
Depreciation expense | $ 9,000 | $ 10,200 | $ 17,800 | $ 19,700 | |||
Total cost of sales | (318,793) | (336,458) | (665,861) | (684,201) | |||
Inventories | (294,367) | (294,367) | $ (323,084) | ||||
Net income (loss) | (26,786) | $ 5,324 | $ 2,972 | $ 20,698 | (21,462) | $ 23,670 | |
Service Life | |||||||
Property Plant And Equipment [Line Items] | |||||||
Depreciation expense | (5,300) | ||||||
Property and equipment, estimated useful lives | 8 years | 5 years | |||||
Total cost of sales | 5,100 | ||||||
Inventories | 200 | $ 200 | |||||
Net income (loss) | $ 4,200 | ||||||
Earnings per share impact (in usd per share) | $ 0.09 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Schedule of Intangible Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | $ 265,257 | $ 138,294 |
Intangible assets, Accumulated Amortization | (82,363) | (60,482) |
Goodwill by segment, Gross Amount | 182,710 | 74,009 |
Intelligent Platform Solutions | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill by segment, Gross Amount | 148,771 | 40,401 |
Memory Solutions | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill by segment, Gross Amount | 33,939 | 33,608 |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | 150,757 | 61,594 |
Intangible assets, Accumulated Amortization | (31,578) | (18,473) |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | 85,300 | 57,500 |
Intangible assets, Accumulated Amortization | (38,890) | (32,238) |
Trademarks/trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Amount | 29,200 | 19,200 |
Intangible assets, Accumulated Amortization | $ (11,895) | $ (9,771) |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 24, 2023 USD ($) | Feb. 25, 2022 USD ($) | Feb. 24, 2023 USD ($) | Feb. 25, 2022 USD ($) | Aug. 26, 2022 USD ($) | Aug. 29, 2022 USD ($) | |
Finite Lived Intangible Assets [Line Items] | ||||||
Amount | $ 127,000 | $ 800 | $ 127,000 | $ 800 | ||
Estimated useful life (in years) | 6 years 1 month 6 days | 13 years 7 months 6 days | ||||
Amortization of intangible assets | 11,000 | 5,900 | $ 21,900 | $ 12,200 | ||
Finite-lived intangible assets, expected amortization for 2023 | 22,000 | 22,000 | ||||
Finite-lived intangible assets, expected amortization for 2024 | 41,900 | 41,900 | ||||
Finite-lived intangible assets, expected amortization for 2025 | 35,600 | 35,600 | ||||
Finite-lived intangible assets, expected amortization for 2026 | 30,400 | 30,400 | ||||
Finite-lived intangible assets, expected amortization for 2027 | 29,500 | 29,500 | ||||
Finite-lived intangible assets, expected amortization, thereafter | 23,500 | 23,500 | ||||
Goodwill | 182,710 | 182,710 | $ 74,009 | |||
Impairment of goodwill | 17,558 | $ 0 | $ 17,558 | $ 0 | ||
Penguin Edge | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Impairment of goodwill | $ 17,600 | |||||
Weighted-average cost of capital | 0.145 | 0.145 | ||||
Stratus Technologies | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Amount | $ 123,700 | |||||
Goodwill | $ 125,929 | |||||
Intelligent Platform Solutions | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 148,771 | $ 148,771 | 40,401 | |||
Memory Solutions | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 33,939 | 33,939 | 33,608 | |||
Goodwill, increase (decrease) | $ 300 | $ (200) |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 167,769 | $ 345,063 |
Salaries, wages and benefits | 34,046 | 45,189 |
Income and other taxes | 16,068 | 17,961 |
Other | 8,406 | 5,141 |
Total | 226,289 | 413,354 |
Accounts payable for property and equipment | $ 6,300 | $ 3,500 |
Debt - Summary of Long-Term Deb
Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 27, 2022 | Aug. 26, 2022 |
Debt Instrument [Line Items] | |||
Debt | $ 821,505 | $ 603,414 | |
Less current debt | (32,141) | (12,025) | |
Long-term debt | 789,364 | 591,389 | |
Amended 2027 TLA | |||
Debt Instrument [Line Items] | |||
Debt | 558,383 | 269,304 | |
2029 Notes | |||
Debt Instrument [Line Items] | |||
Debt | 146,635 | 0 | |
2026 Notes | |||
Debt Instrument [Line Items] | |||
Debt | 98,353 | 213,023 | |
Long-term debt | $ 623,572 | 591,389 | |
LED Earnout Note | |||
Debt Instrument [Line Items] | |||
Debt | 0 | 101,824 | |
Other | |||
Debt Instrument [Line Items] | |||
Debt | $ 18,134 | $ 19,263 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Aug. 29, 2022 USD ($) | Feb. 07, 2022 USD ($) | Feb. 24, 2023 USD ($) | Feb. 25, 2022 USD ($) | Feb. 24, 2023 USD ($) | Feb. 25, 2022 USD ($) | Aug. 26, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||
Repayment of outstanding debt | $ 8,996,000 | $ 125,000,000 | |||||
Loss (gain) on extinguishment of debt | $ 16,691,000 | $ 653,000 | 15,924,000 | $ 653,000 | |||
Unamortized debt discounts and issuance costs | (12,697,000) | (12,697,000) | |||||
The Credit Facility Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt covenant, first lien leverage ratio | 3.25 | 3 | |||||
Debt covenant, reduction of debt amount used for the purposes of calculating debt covenant ratios | $ 125,000,000 | $ 100,000,000 | |||||
LED Earnout Note | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of outstanding debt | $ 101,800,000 | ||||||
L E D Purchase Price Note | |||||||
Debt Instrument [Line Items] | |||||||
Loss (gain) on extinguishment of debt | (800,000) | ||||||
Amended 2027 TLA | The Credit Facility Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 300,000,000 | 275,000,000 | |||||
Debt instrument outstanding amount | 566,100,000 | 566,100,000 | |||||
Unamortized debt discounts and issuance costs | $ (7,700,000) | $ (7,700,000) | |||||
Debt instrument, effective interest rate | 7.45% | 7.45% | |||||
Revolving Credit Facility | The Credit Facility Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | 250,000,000 | ||||||
Line of credit facility, maximum borrowing capacity | $ 35,000,000 | ||||||
Debt instrument outstanding amount | $ 0 | $ 0 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jan. 18, 2023 USD ($) businessDay tradingDay $ / shares | Aug. 26, 2022 USD ($) $ / shares | Feb. 28, 2020 USD ($) $ / shares | Feb. 24, 2023 USD ($) $ / shares | Feb. 25, 2022 USD ($) | Feb. 24, 2023 USD ($) $ / shares | Feb. 25, 2022 USD ($) | Aug. 27, 2022 USD ($) | Jan. 03, 2022 $ / shares | |
Debt Instrument [Line Items] | |||||||||
Convertible notes, cash payment | $ 15,600,000 | ||||||||
Payment of premium for convertible notes in excess of par value | 14,100,000 | $ 14,141,000 | $ 0 | ||||||
Convertible notes, payment for accrued and unpaid interest | $ 1,500,000 | ||||||||
Gain (loss) on extinguishment of debt | $ 16,691,000 | $ 653,000 | $ 15,924,000 | $ 653,000 | |||||
Ordinary shares, par value (in usd per share) | $ / shares | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | |||||
Long-term debt | $ 603,414,000 | $ 821,505,000 | $ 821,505,000 | ||||||
Retained earnings | 251,344,000 | 247,756,000 | 247,756,000 | $ 269,983,000 | |||||
Cumulative Translation Adjustment | |||||||||
Debt Instrument [Line Items] | |||||||||
Retained earnings | $ 18,639,000 | ||||||||
Cumulative Translation Adjustment | Accounting Standards Update 2020-06 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | 32,200,000 | ||||||||
Retained earnings | 18,600,000 | ||||||||
2.25% Convertible Senior Notes Due 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Note interest rate | 2.25% | 2.25% | |||||||
Debt instrument, face amount | $ 150,000,000 | $ 250,000,000 | |||||||
Payment of premium for convertible notes in excess of par value | 14,100,000 | ||||||||
Gain (loss) on extinguishment of debt | 150,000,000 | ||||||||
Write off of unamortized debt issuance cost | $ 2,500,000 | ||||||||
Debt instrument, convertible, initial conversion rate in ordinary shares | 49.2504 | ||||||||
Debt instrument, convertible, principal amount considered for conversion rate | $ 1,000 | $ 1,000 | |||||||
Debt instrument, convertible, initial conversion price per ordinary share (in usd per share) | $ / shares | $ 20.30 | ||||||||
Debt instrument outstanding amount | $ 100,000,000 | $ 100,000,000 | |||||||
Debt instrument, effective interest rate | 7.06% | 2.83% | 2.83% | ||||||
Long-term debt | $ 213,023,000 | $ 98,353,000 | $ 98,353,000 | ||||||
2.25% Convertible Senior Notes Due 2026 | Additional Paid-in Capital | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, carrying amount of equity component | 50,800,000 | ||||||||
2.00% Convertible Senior Notes Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Note interest rate | 2% | ||||||||
Debt instrument, face amount | $ 150,000,000 | ||||||||
Debt instrument, convertible, initial conversion rate in ordinary shares | 47.1059 | ||||||||
Debt instrument, convertible, principal amount considered for conversion rate | $ 1,000 | ||||||||
Debt instrument, convertible, initial conversion price per ordinary share (in usd per share) | $ / shares | $ 21.23 | ||||||||
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 | tradingDay | 10 | ||||||||
Debt instrument, effective interest rate | 2.40% | 2.40% | |||||||
Long-term debt | $ 0 | $ 146,635,000 | $ 146,635,000 | ||||||
2.00% Convertible Senior Notes Due 2029 | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130% | ||||||||
Debt instrument, convertible, threshold trading days | tradingDay | 20 | ||||||||
2.00% Convertible Senior Notes Due 2029 | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, convertible, product percentage of last reported sale price per ordinary share and conversion rate | 98% |
Debt - Interest Expense Disclos
Debt - Interest Expense Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Debt Instrument [Line Items] | ||||
Amortization of debt discount and issuance costs | $ 2,117 | $ 4,770 | ||
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual stated interest | $ 1,366 | $ 1,390 | 2,757 | 2,781 |
Amortization of debt discount and issuance costs | 317 | 2,250 | 654 | 4,460 |
Total interest cost recognized | $ 1,683 | $ 3,640 | $ 3,411 | $ 7,241 |
Debt - Summary of Maturities of
Debt - Summary of Maturities of Debt (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Debt Disclosure [Abstract] | ||
Remainder of 2023 | $ 16,266 | |
2024 | 39,743 | |
2025 | 32,532 | |
2026 | 132,532 | |
2027 | 461,592 | |
2028 and thereafter | 151,537 | |
Less unamortized discount and issuance costs | (12,697) | |
Debt | $ 821,505 | $ 603,414 |
Leases - Summary of Components
Leases - Summary of Components of Operating Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Leases [Abstract] | ||||
Fixed lease cost | $ 5,223 | $ 3,213 | $ 10,319 | $ 6,516 |
Variable lease cost | 299 | 453 | 683 | 821 |
Short-term lease cost | 558 | 182 | 1,057 | 258 |
Total lease cost | $ 6,080 | $ 3,848 | $ 12,059 | $ 7,595 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 24, 2023 | Feb. 25, 2022 | Aug. 26, 2022 | |
Lessee Lease Description [Line Items] | ||||
Operating lease payments | $ 5.2 | $ 5.1 | ||
Right-of-use assets obtained in exchange for operating lease liabilities | $ 10.5 | $ 0.6 | ||
Weighted-average remaining lease term for operating leases | 10 years 3 months 18 days | 10 years 3 months 18 days | 10 years 10 months 24 days | |
Weighted-average discount rate for operating leases | 6.20% | 6.20% | 6.10% | |
Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease term | 2 years | 2 years | ||
Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease term | 5 years | 5 years |
Leases - Schedule of Minimum Pa
Leases - Schedule of Minimum Payments of Lease Liabilities (Details) $ in Thousands | Feb. 24, 2023 USD ($) |
Leases [Abstract] | |
Remainder of 2023 | $ 6,008 |
2024 | 14,746 |
2025 | 12,633 |
2026 | 11,047 |
2027 | 8,629 |
2028 and thereafter | 65,972 |
Total | 119,035 |
Less imputed interest | (33,370) |
Present value of total lease liabilities | $ 85,665 |
Equity - Additional Information
Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||||
Jan. 18, 2023 USD ($) $ / Unit | Jan. 03, 2022 $ / shares shares | Feb. 24, 2023 USD ($) $ / shares shares | Nov. 25, 2022 USD ($) | Feb. 25, 2022 USD ($) shares | Nov. 26, 2021 USD ($) | Feb. 24, 2023 USD ($) tradingDay $ / shares shares | Feb. 25, 2022 USD ($) shares | Aug. 29, 2022 USD ($) | Aug. 26, 2022 $ / shares | Apr. 04, 2022 USD ($) | |
Class Of Stock [Line Items] | |||||||||||
Share dividend declared for each ordinary share owned (in shares) | shares | 1 | ||||||||||
Ordinary shares, par value (in usd per share) | $ / shares | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | |||||||
Shares acquired, value | $ 11,564 | $ 4,659 | $ 229 | $ 2,666 | |||||||
Cap price of capped call transaction (in usd per share) | $ / Unit | 29.1375 | ||||||||||
Premium of capped call transaction | 0.75 | ||||||||||
Purchase of Capped Calls | $ (15,100) | (15,090) | |||||||||
Settlement of Capped Calls | $ 10,800 | 10,786 | |||||||||
Net income attributable to noncontrolling interest | 433 | 514 | $ 765 | $ 1,185 | |||||||
Distribution to noncontrolling interest | 2,009 | 3,773 | |||||||||
Total SGH Shareholders’ Equity | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Shares acquired, value | 11,564 | $ 4,659 | 229 | $ 2,666 | |||||||
Purchase of Capped Calls | (15,090) | ||||||||||
Settlement of Capped Calls | 10,786 | ||||||||||
Non- controlling Interest in Subsidiary | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Distribution to noncontrolling interest | 2,009 | 3,773 | |||||||||
Cree Joint Venture | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Distribution to noncontrolling interest | $ 4,100 | 7,700 | |||||||||
Cree Joint Venture | San’an | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Ownership percentage by noncontrolling owners | 49% | 49% | |||||||||
Stratus Technologies | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Contingent consideration (up to) | $ 50,000 | ||||||||||
Debt instrument, convertible, threshold consecutive trading days | tradingDay | 30 | ||||||||||
LED Business | San’an | Non- controlling Interest in Subsidiary | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Distribution to noncontrolling interest | $ 2,000 | 3,800 | |||||||||
LED Business | Cree Joint Venture | Total SGH Shareholders’ Equity | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Distribution to noncontrolling interest | $ 2,100 | $ 3,900 | |||||||||
Share Repurchase Authorization | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Stock repurchase program, authorized amount | $ 75,000 | ||||||||||
Repurchase of ordinary shares (in shares) | shares | 500,000 | 2,600,000 | |||||||||
Shares acquired, value | $ 8,400 | $ 50,000 | |||||||||
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. | Silver Lake Partners, Repurchase | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Repurchase of ordinary shares (in shares) | shares | 33,000 | 4,000 | 177,000 | 55,000 | |||||||
Shares acquired, value | $ 600 | $ 200 | $ 2,400 | $ 2,900 | |||||||
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. | Exchange Transaction | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Repurchase of ordinary shares (in shares) | shares | 326,000 | ||||||||||
Shares acquired, value | $ 5,400 |
Equity - Schedule of Accumulate
Equity - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 6 Months Ended |
Feb. 24, 2023 USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | $ 378,546 |
Components of Other Comprehensive Income (Loss): | |
Other comprehensive income (loss) before reclassifications | 4,226 |
Reclassifications out of accumulated other comprehensive income | (128) |
Other comprehensive income (loss) | 4,098 |
Ending balance | 331,520 |
AOCI Including Portion Attributable to Noncontrolling Interest | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | (221,655) |
Components of Other Comprehensive Income (Loss): | |
Ending balance | (217,557) |
Cumulative Translation Adjustment | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | (221,655) |
Components of Other Comprehensive Income (Loss): | |
Other comprehensive income (loss) before reclassifications | 4,113 |
Reclassifications out of accumulated other comprehensive income | 0 |
Other comprehensive income (loss) | 4,113 |
Ending balance | (217,542) |
Gains (Losses) on Derivative Instruments | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | 0 |
Components of Other Comprehensive Income (Loss): | |
Other comprehensive income (loss) before reclassifications | 124 |
Reclassifications out of accumulated other comprehensive income | (128) |
Other comprehensive income (loss) | (4) |
Ending balance | (4) |
Gains (Losses) on Investments | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | 0 |
Components of Other Comprehensive Income (Loss): | |
Other comprehensive income (loss) before reclassifications | (11) |
Reclassifications out of accumulated other comprehensive income | 0 |
Other comprehensive income (loss) | (11) |
Ending balance | $ (11) |
Government Incentives - Additio
Government Incentives - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | Aug. 26, 2022 | |
Brazilian Operating Subsidiaries | Revenue from Rights Concentration Risk | Net sales | ||||||
Government Incentives [Line Items] | ||||||
Concentration risk, percentage | 5% | |||||
Other Current Assets | ||||||
Government Incentives [Line Items] | ||||||
Unused financial credits | $ 19.6 | $ 18.7 | ||||
Research and development | ||||||
Government Incentives [Line Items] | ||||||
Financial credits | $ 1.4 | $ 6 | $ 4 | $ 11.9 | ||
Minimum | Revenue from Rights Concentration Risk | Net sales | ||||||
Government Incentives [Line Items] | ||||||
Concentration risk, percentage | 13.10% | |||||
Maximum | Revenue from Rights Concentration Risk | Net sales | ||||||
Government Incentives [Line Items] | ||||||
Concentration risk, percentage | 12.30% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Feb. 24, 2023 USD ($) | Aug. 29, 2022 | Aug. 26, 2022 USD ($) |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Restricted cash | $ 1 | ||
Measurement Input, Price Volatility | Valuation Technique, Monte Carlo Simulation | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Measurement input | 0.332 | 0.334 | |
Measurement Input, Discount Rate | Valuation Technique, Monte Carlo Simulation | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Measurement input | 0.088 | 0.073 | |
Level 1 | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Money market funds | $ 15.6 | $ 13.8 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements of Other Assets and Liabilities (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other noncurrent assets | Other noncurrent assets |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other noncurrent liabilities | Other noncurrent liabilities |
Fair Value | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative financial instrument assets | $ 146 | $ 0 |
Derivative financial instrument liabilities | 509 | 605 |
Fair Value | Level 2 | Amended 2027 TLA | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 566,070 | 273,281 |
Fair Value | Level 2 | 2029 Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 155,220 | 0 |
Fair Value | Level 2 | 2026 Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 108,857 | 290,223 |
Fair Value | Level 2 | LED Earnout Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 0 | 96,412 |
Fair Value | Level 2 | Other | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 17,101 | 17,855 |
Fair Value | Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Acquisition-related contingent consideration | 30,900 | 0 |
Carrying Value | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative financial instrument assets | 146 | 0 |
Derivative financial instrument liabilities | 509 | 605 |
Carrying Value | Level 2 | Amended 2027 TLA | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 558,383 | 269,304 |
Carrying Value | Level 2 | 2029 Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 146,635 | 0 |
Carrying Value | Level 2 | 2026 Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 98,353 | 213,023 |
Carrying Value | Level 2 | LED Earnout Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 0 | 101,824 |
Carrying Value | Level 2 | Other | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt instruments fair value | 18,134 | 19,263 |
Carrying Value | Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Acquisition-related contingent consideration | $ 30,900 | $ 0 |
Derivative Instruments - Deriva
Derivative Instruments - Derivative Instruments, Gain (Loss) (Details) - Forward Contracts - Non-designated - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Realized (gains) losses on currency forward contracts | $ 276 | $ (1,236) | $ 1,283 | $ (5,146) |
Unrealized (gains) losses on currency forward contracts | $ 325 | $ 4,336 | $ (105) | $ 3,583 |
Equity Plans - Additional Infor
Equity Plans - Additional Information (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Ordinary shares, available for issuance (in shares) | 8,800 | 8,800 | ||
Unrecognized compensation costs related to awards | $ 1.8 | $ 1.8 | ||
Unrecognized compensation costs recognition period | 1 year 4 months 24 days | |||
Income tax benefits for share-based awards | 1.8 | $ 1.8 | $ 4 | $ 4.9 |
Restricted Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation costs related to awards | $ 84.9 | $ 84.9 | ||
Unrecognized compensation costs recognition period | 2 years 6 months | |||
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share issued under purchase plan (in shares) | 265 | 133 | ||
Share issued under purchase plan | $ 2.9 | $ 3 |
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 | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Awards granted (in shares) | 82 | 113 | 1,222 | 646 |
Weighted average grant-date fair value per share (in usd per share) | $ 17.15 | $ 30.28 | $ 19.05 | $ 28.42 |
Aggregate vesting date fair value of shares vested | $ 6,665 | $ 6,272 | $ 15,614 | $ 18,228 |
Equity Plans - Summary of Share
Equity Plans - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 10,395 | $ 9,973 | $ 20,807 | $ 19,748 |
Cost of sales | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,369 | 1,648 | 3,077 | 3,379 |
Research and development | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,441 | 1,559 | 3,075 | 3,099 |
Selling, general and administrative | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 7,585 | $ 6,766 | $ 14,655 | $ 13,270 |
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 | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Cost of materials billed in connection with logistics services | $ 143,984 | $ 339,715 | $ 521,735 | $ 675,990 |
Revenue and Customer Contract_4
Revenue and Customer Contract Balances - Summary of Customer Contract Balances (Details) - USD ($) $ in Thousands | Feb. 24, 2023 | Aug. 26, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 1,296 | $ 1,322 |
Contract liabilities: | ||
Deferred revenue | 61,841 | 39,676 |
Customer advances | 52,061 | 24,125 |
Contract liabilities | 113,902 | 63,801 |
Termination fees | $ 15,600 | $ 23,300 |
Revenue and Customer Contract_5
Revenue and Customer Contract Balances - Additional information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Feb. 24, 2023 | Aug. 26, 2022 | |
Disaggregation Of Revenue [Line Items] | ||
Expected revenue recognized on remaining performance obligations | $ 61.8 | |
Revenue recognized | 29.8 | |
Estimates of consideration payable to customers, including estimates for pricing adjustments and returns | 12 | $ 15.4 |
Customer Advances | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue recognized | 1.8 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-02-25 | ||
Disaggregation Of Revenue [Line Items] | ||
Expected revenue recognized on remaining performance obligations | $ 49.3 | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Other Operating (Income) Expe_2
Other Operating (Income) Expense - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Feb. 24, 2023 USD ($) | Feb. 24, 2023 USD ($) | |
Other Income and Expenses [Abstract] | ||
Restructure charge | $ 4.2 | $ 6.2 |
Restructuring costs payable | $ 3.3 | $ 3.3 |
Other Non-operating (Income) _3
Other Non-operating (Income) Expense - Schedule of Other Non-operating (Income) Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Nonoperating Income (Expense) [Abstract] | ||||
Loss (gain) on extinguishment of debt | $ 16,691 | $ 653 | $ 15,924 | $ 653 |
Foreign currency losses | 281 | 1,408 | 523 | 2,875 |
Loss (gain) on disposition of assets | (3,037) | 25 | (3,116) | 46 |
Other | (606) | |||
Other non-operating (income) expense | $ 13,329 | $ 1,785 | $ 12,669 | $ 3,020 |
Other Non-operating (Income) _4
Other Non-operating (Income) Expense - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Debt Instrument [Line Items] | ||||
Gain (loss) on extinguishment of debt | $ 16,691 | $ 653 | $ 15,924 | $ 653 |
2.25% Convertible Senior Notes Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Gain (loss) on extinguishment of debt | $ 150,000 |
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 | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) before taxes | $ (28,502) | $ 10,558 | $ (18,288) | $ 39,011 |
Income tax provision (benefit) | $ (1,716) | $ 7,586 | $ 3,174 | $ 15,341 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ in Millions | 6 Months Ended |
Feb. 24, 2023 USD ($) | |
Income Tax Disclosure [Abstract] | |
Increase (decrease) in income taxes | $ (12.2) |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to SGH – Basic and Diluted | $ (27,219) | $ 2,458 | $ (22,227) | $ 22,485 |
Weighted-average shares outstanding – Basic (in shares) | 49,116 | 49,522 | 49,039 | 49,267 |
Dilutive effect of equity plans and convertible notes (in shares) | 0 | 8,114 | 0 | 6,868 |
Weighted-average shares outstanding – Diluted (in shares) | 49,116 | 57,636 | 49,039 | 56,135 |
Earnings (loss) per share: | ||||
Basic (in usd per share) | $ (0.55) | $ 0.05 | $ (0.45) | $ 0.46 |
Diluted (in usd per share) | $ (0.55) | $ 0.04 | $ (0.45) | $ 0.40 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 9,475 | 24 | 9,475 | 276 |
Equity plans | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 7,688 | 24 | 7,688 | 276 |
Stratus Technologies contingently issuable shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,787 | 0 | 1,787 | 0 |
Segment and Other Information -
Segment and Other Information - Additional Information (Details) | 6 Months Ended |
Feb. 24, 2023 businessUnit | |
Segment Reporting [Abstract] | |
Number of business units | 3 |
Segment and Other Information_2
Segment and Other Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 24, 2023 | Feb. 25, 2022 | Feb. 24, 2023 | Feb. 25, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total net sales | $ 429,174 | $ 449,171 | $ 894,652 | $ 919,115 |
Total segment operating income | (7,167) | 16,805 | 10,424 | 51,599 |
Share-based compensation expense | (20,807) | (19,748) | ||
Amortization of acquisition-related intangibles | (11,000) | (5,900) | (21,900) | (12,200) |
Impairment of goodwill | (17,558) | 0 | (17,558) | 0 |
Change in fair value of contingent consideration | (6,400) | (24,000) | (10,100) | (41,200) |
Restructure charge | (4,200) | (6,200) | ||
Total unallocated | (117,548) | (95,908) | (218,367) | (183,315) |
Unallocated | ||||
Segment Reporting Information [Line Items] | ||||
Share-based compensation expense | (10,395) | (9,973) | (20,807) | (19,748) |
Amortization of acquisition-related intangibles | (10,815) | (5,829) | (21,673) | (12,172) |
Flow through of inventory step up | 0 | 0 | (2,599) | 0 |
Cost of sales related restructure | (5,552) | 0 | (5,552) | 0 |
Acquisition and integration expenses | (2,824) | (252) | (9,556) | (1,290) |
Impairment of goodwill | (17,558) | 0 | (17,558) | 0 |
Change in fair value of contingent consideration | (6,400) | (24,000) | (10,100) | (41,200) |
Restructure charge | (4,154) | 0 | (6,195) | 0 |
Other | (900) | (576) | (1,800) | (576) |
Total unallocated | (58,598) | (40,630) | (95,840) | (74,986) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 429,174 | 449,171 | 894,652 | 919,115 |
Total segment operating income | 51,431 | 57,435 | 106,264 | 126,585 |
Operating Segments | Memory Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 151,136 | 260,081 | 343,103 | 499,482 |
Total segment operating income | 14,430 | 32,496 | 35,575 | 69,166 |
Operating Segments | Intelligent Platform Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 222,451 | 82,257 | 433,422 | 200,911 |
Total segment operating income | 37,978 | 7,702 | 72,144 | 21,882 |
Operating Segments | LED Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 55,587 | 106,833 | 118,127 | 218,722 |
Total segment operating income | $ (977) | $ 17,237 | $ (1,455) | $ 35,537 |