UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10‑K
(Mark One)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended August 31, 2018
or
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 001-38102
SMART GLOBAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Cayman Islands | 98-1013909 |
( State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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c/o Maples Corporate Services Limited P.O. Box 309 Ugland House Grand Cayman, Cayman Islands | KY1-1104 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (510) 623-1231
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Name of each exchange on which registered |
Ordinary Shares, $0.03 par value per share | The Nasdaq Stock Market LLC (NASDAQ Global Select Market) |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b‑2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on The NASDAQ Stock Market on October 19, 2018, was $376.7 million. Shares of common stock held by each executive officer, director, and their affiliated holders have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
As of October 19, 2018, the registrant had 22,605,548 ordinary shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for the 2018 General Meeting are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended August 31, 2018 .
SMART GLOBAL HOLDINGS, INC.
TABLE OF CONTENTS
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Part I. |
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Item 1. | Business | 4 |
Item 1A. | Risk Factors | 18 |
Item 1B. | Unresolved Staff Comments | 54 |
Item 2. | Properties | 55 |
Item 3. | Legal Proceedings | 55 |
Item 4. | Mine Safety Disclosures | 57 |
Part II. |
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Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 58 |
Item 6. | Selected Financial Data | 59 |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 64 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 84 |
Item 8. | Financial Statements and Supplementary Data | 84 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 85 |
Item 9A. | Controls and Procedures | 85 |
Item 9B. | Other Information | 86 |
Part III. |
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Item 10. | Directors, Executive Officers and Corporate Governance | 87 |
Item 11. | Executive Compensation | 87 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 87 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 87 |
Item 14. | Principal Accounting Fees and Services | 87 |
Part IV. |
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Item 15. | Exhibits, Financial Statement Schedules | 88 |
Item 16. | Form 10-K Summary | 88 |
SIGNATURES | 96 | |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K ("Annual Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements by the use of forward-looking words such as "anticipate," "believe," "could," "expect," "should," "plan," "intend," "estimate" and "potential," among others.
Forward-looking statements appear in a number of places in this Annual Report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section entitled "Item 1A. Risk Factors" in this Annual Report. These risks and uncertainties include factors relating to:
| • | the losses we have experienced in the past and may experience in the future; |
| • | the unpredictable fluctuation of our operating results from quarter to quarter; |
| • | the highly cyclical markets in which we compete have experienced severe downturns; |
| • | declines in memory component prices and average selling prices that may cause declines in our net sales and gross profit; |
| • | worldwide economic and political conditions in Brazil or other countries, as well as other factors may adversely affect our operations and cause fluctuations in the demand for our products; |
| • | our dependence on growth in the memory market in Brazil, which could cease or contract; |
| • | the dependence of our sales and profit margins in Brazil on the continuing existence of local content requirements for electronics products; |
| • | the dependence of a significant portion of our net sales on the continuing existence of, and demand from, a limited number of key customers; |
| • | the amount of corporate income and excise and import taxes we pay that may increase significantly if tax incentives or tax holiday arrangements in Brazil or Malaysia are discontinued or if our interpretations and assumptions with respect to such tax incentives or tax holiday arrangements are incorrect; |
| • | other factors that may affect our financial condition, liquidity and results of operations; and |
| • | other risk factors discussed under "Item 1A. Risk Factors." |
Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events, except as otherwise required by the rules and regulations of the Securities and Exchange Commission.
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