Financial Performance - Total net sales for the three months ended November 29, 2024, were $341.1 million, a 24.3% increase from $274.2 million in the same period last year[13]. - Gross profit for the same period was $97.8 million, resulting in a gross margin of 28.7%, compared to $82.9 million and a gross margin of 30.2% in the prior year[13]. - Operating income increased significantly to $17.4 million from $1.3 million year-over-year, reflecting improved operational efficiency[13]. - Net income attributable to Penguin Solutions was $5.2 million, compared to a net loss of $19.9 million in the same quarter last year[13]. - The company reported basic earnings per share of $0.10, compared to a loss of $0.38 per share in the prior year[13]. - Comprehensive income for the quarter was $5.2 million, a significant recovery from a comprehensive loss of $186.3 million in the same period last year[14]. - For the three months ended November 29, 2024, net income was $5,964,000 compared to a net loss of $19,360,000 for the same period in 2023, indicating a significant turnaround in performance[17]. - Total segment operating income for the three months ended November 29, 2024, was $40.9 million, compared to $26.7 million for the same period in 2023, reflecting a 53.4% increase[86]. - The company reported a net income of $5.2 million from continuing operations for the three months ended November 29, 2024, compared to a net loss of $11.8 million for the same period in 2023[83]. Assets and Liabilities - Total current assets rose to $995.6 million, up from $867.7 million, driven by increases in accounts receivable and inventories[12]. - Total liabilities increased to $1.17 billion from $1.08 billion, primarily due to higher accounts payable and accrued expenses[12]. - Total assets as of November 29, 2024, increased to $1,583,015,000 from $1,474,506,000 as of August 30, 2024, marking a 7.4% growth[12]. - Accounts payable increased to $244.3 million as of November 29, 2024, from $182.0 million on August 30, 2024, representing a 34.3% increase[48]. - Long-term debt remained stable at $658.1 million as of November 29, 2024, compared to $657.3 million on August 30, 2024[49]. Cash Flow and Investments - Cash and cash equivalents decreased slightly to $370.3 million from $383.1 million, reflecting ongoing operational investments[12]. - Operating cash flow from continuing operations was $13,819,000 for the three months ended November 29, 2024, down from $59,713,000 in the prior year, primarily due to changes in working capital[17]. - Capital expenditures for the three months ended November 29, 2024, were $1,836,000, a decrease from $4,648,000 in the prior year, indicating a reduction in investment in fixed assets[17]. - The company repurchased shares worth $11,123,000 during the three months ended November 29, 2024, compared to $13,130,000 in the same period of the previous year[17]. - The company repurchased $80.0 million of its 2.25% Convertible Senior Notes due 2026 for $100.6 million, resulting in a loss of $20.4 million recognized in Q4 2024[51]. Research and Development - Research and development expenses decreased to $19.8 million from $21.4 million, indicating a focus on cost management[13]. - The company reported share-based compensation expense of $11,531,000 for the three months ended November 29, 2024, compared to $10,970,000 in the prior year[17]. Divestitures and Impairments - The divestiture of SMART Brazil was completed on November 29, 2023, with the company retaining a 19% interest, which is expected to impact future financial results positively[19][26]. - An impairment charge of $153.0 million was recognized in Q4 2023 for the net assets of SMART Brazil, which were classified as held for sale[32]. - The loss from the divestiture of the 81% interest in SMART Brazil was calculated at $190.5 million, including a pre-tax loss of $163.9 million[35]. - As of November 29, 2024, the carrying value of the remaining 19% interest in SMART Brazil was $37.8 million, classified as a non-marketable equity investment[36]. Future Outlook and Strategic Plans - The company plans to wind down manufacturing and discontinue the sale of legacy products in its Advanced Computing segment by the end of 2025, with potential impairment of $16.1 million in goodwill[47]. - The company continues to focus on expanding its Advanced Computing and Integrated Memory segments to drive future growth and profitability[84].
Penguin Solutions, Inc.(PENG) - 2025 Q1 - Quarterly Report