These and other risks, uncertainties and factors are described in greater detail under the sections titled "Risk Factors," "Critical Accounting Estimates," "Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and "Liquidity and Capital Resources" contained in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and our other filings with the U.S. Securities and Exchange Commission. In addition, such risks, uncertainties and factors as outlined above and in such filings do not constitute all risks, uncertainties and factors that could cause our actual results to be materially different from such forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statements that we make in this press release speak only as of the date of this press release. Except as required by law, we do not undertake to update the forward-looking statements contained in this press release to reflect the impact of circumstances or events that may arise after the date that the forward-looking statements were made.
Statement Regarding Use of Non-GAAP Financial Measures
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP effective tax rate, non-GAAP net income, non-GAAP weighted-average shares outstanding, non-GAAP diluted earnings per share and Adjusted EBITDA. Penguin Solutions management uses these non-GAAP measures to supplement Penguin Solutions' financial results under GAAP. Management uses these measures to analyze its operations and make decisions as to future operational plans and believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing the Company's past and future operating performance. These non-GAAP measures exclude certain items, such as share-based compensation expense; amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships and trademarks/trade names acquired in connection with business combinations); cost of sales-related restructuring; diligence, acquisition and integration expense; restructuring charges; impairment of goodwill; changes in the fair value of contingent consideration; gains (losses) from changes in foreign currency exchange rates; amortization of debt issuance costs; gain (loss) on extinguishment or prepayment of debt; other infrequent or unusual items and related tax effects and other tax adjustments. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies are reflected in the Company's non-GAAP measures and these intangible assets contribute to revenue generation. Management believes the presentation of operating results that exclude certain items provides useful supplemental information to investors and facilitates the analysis of the Company's core operating results and comparison of operating results across reporting periods. Management also uses adjusted EBITDA, which represents GAAP net income (loss), adjusted for net interest expense; income tax provision (benefit); depreciation expense and amortization of intangible assets; share-based compensation expense; cost of sales-related restructuring; diligence, acquisition and integration expense; restructuring charges; loss on extinguishment of debt and other infrequent or unusual items.
In fiscal 2024, for our non-GAAP reporting, we began to utilize a long-term projected non-GAAP effective tax rate of 28%, which includes the tax impact of pre-tax non-GAAP adjustments and reflects currently available information as well as other factors and assumptions. While we expect to use this normalized non-GAAP effective tax rate through fiscal 2025, this long-term non-GAAP effective tax rate may be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or business operations. Our GAAP effective tax rate can vary significantly from quarter to quarter based on a variety of factors, including, but not limited to, discrete items which are recorded in the period they occur, the tax effects of certain items of income or expense, significant changes in our geographic earnings mix or changes to our strategy or business operations. We are unable to predict the timing and amounts of these items, which could significantly impact our GAAP effective tax rate, and therefore we are unable to reconcile our forward-looking non-GAAP effective tax rate measure to our GAAP effective tax rate.
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, as they exclude important information about Penguin Solutions' financial results, as noted above. The presentation of these adjusted amounts varies from amounts presented in accordance with GAAP and therefore may not be comparable to amounts reported by other companies. In addition, adjusted EBITDA does not purport to represent cash flow provided by, or used for, operating activities in accordance with GAAP and should not be used as a measure of liquidity. Investors are encouraged to review the "Reconciliation of GAAP to Non-GAAP Measures" tables below.
About Penguin Solutions
The most exciting technological advancements are also the most challenging for companies to adopt. At Penguin Solutions, we support our customers in achieving their ambitions across our computing, memory, and LED lines of business. With our expert skills, experience, and partnerships, we turn our customers' most complex challenges into compelling opportunities.
For more information, visit www.penguinsolutions.com.
Penguin Solutions, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended ------------------------------------------------ November 29, August 30, December 1, 2024 2024 2023 ---------------------- --------------- ------------- ---------------- Net sales: Advanced Computing $ 177,426 $ 149,355 $ 118,824 Integrated Memory 96,706 95,832 85,668 Optimized LED 66,970 65,961 69,755 ----------- -------- --------- Total net sales 341,102 311,148 274,247 Cost of sales 243,290 224,062 191,397 ----------- -------- --------- Gross profit 97,812 87,086 82,850 ----------- -------- --------- Operating expenses: Research and development 19,811 19,941 21,389 Selling, general and administrative 60,536 58,029 57,217 Other operating (income) expense 109 325 2,939 ----------- -------- --------- Total operating expenses 80,456 78,295 81,545 ----------- -------- --------- Operating income (loss) 17,356 8,791 1,305 ----------- -------- --------- Non-operating (income) expense: Interest expense, net 4,396 5,403 9,559 Other non-operating (income) expense 636 20,971 (576) ----------- -------- --------- Total non-operating (income) expense 5,032 26,374 8,983 ----------- -------- --------- Income (loss) before taxes 12,324 (17,583) (7,678) Income tax provision 6,360 6,209 3,534 ----------- -------- --------- Net income (loss) from continuing operations 5,964 (23,792) (11,212) Net loss from discontinued operations -- -- (8,148) ----------- -------- --------- Net income (loss) 5,964 (23,792) (19,360) Net income attributable to noncontrolling interest 747 755 561 ----------- -------- --------- Net income (loss) attributable to Penguin Solutions $ 5,217 $ (24,547) $ (19,921) =========== ======== ========= Basic earnings (loss) per share: Continuing operations $ 0.10 $ (0.46) $ (0.23) Discontinued operations -- -- (0.15) ----------- -------- --------- $ 0.10 $ (0.46) $ (0.38) =========== ======== ========= Diluted earnings (loss) per share: Continuing operations $ 0.10 $ (0.46) $ (0.23) Discontinued operations -- -- (0.15) ----------- -------- --------- $ 0.10 $ (0.46) $ (0.38) =========== ======== ========= Shares used in per share calculations:
(MORE TO FOLLOW) Dow Jones Newswires
January 08, 2025 16:05 ET (21:05 GMT)
Comments