SMART Global : Investor Presentation, October 2020

Investor Presentation

Disclaimer

This presentation and oral communications made during the course of this presentation contain "forward-looking statements" including among other things, statements regarding future events and the future financial performance of SMART Global Holdings, Inc. (including the business outlook for the next fiscal quarter) and statements regarding growth drivers in SMART's industries and markets. These statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including but not limited to: business and economic conditions and growth trends in the technology industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; disruptions in our operations or in global markets as a result of the outbreak of COVID-19; changes in trade regulations or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending; appropriations for government spending; the success of our strategic initiatives including additional investments in new products, additional capacity and acquisitions; the DRAM market and the temporary and volatile nature of pricing trends; deterioration in customer relationships; production or manufacturing difficulties; competitive factors; technological changes; difficulties with or delays in the introduction of new products; slowing or contraction of growth in the memory market in Brazil; reduction in or termination of incentives for local manufacturing in Brazil; changes to applicable tax regimes or rates; prices for the end products of our customers; fluctuations in material costs and availability; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors; changes in the availability of supply of materials, components or memory products; the inability of Penguin Computing to obtain and retain security clearances to expand its government business; and other factors and risks detailed in SMART's filings with the Securities and Exchange Commission. Such factors and risks as outlined above and in such filings may not constitute all factors and risks that could cause actual results of SMART to be materially different from the historical results and/or from any future results or outcomes expressed or implied by such forward-looking statements. SMART and its subsidiaries operate in a continually changing business environment and new factors emerge from time to time. SMART cannot predict such factors, nor can it assess the impact, if any, from such factors on SMART or its subsidiaries' results. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements should not be relied upon as a prediction of actual results. Forward-looking statements are based on available information as of the day made, and SMART does not intend, and has no obligation, to update or revise any forward-looking statements in order to reflect events or circumstances that may arise after the date made, except as required by law.

Non-GAAP Information

Certain non-GAAP financial measures are contained in this presentation or will be discussed on our conference call, including non-GAAP gross profit, non-GAAP operating income, Adjusted EBITDA, non-GAAP net income, and non- GAAP net income per diluted share. We define Adjusted EBITDA as GAAP net income (loss) plus net interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense, loss on extinguishment of debt/revolver, capped call mark to market (MTM) adjustment, restructuring expenses, integration expenses, COVID-19 expenses, acquisition-related expenses and other infrequent or unusual items. Adjusted EBITDA is not a measure of financial performance calculated in accordance with U.S. GAAP and should be viewed as a supplement to, not a substitute for, our results of operations presented on the basis of U.S. GAAP. Adjusted EBITDA also does not purport to represent cash flow provided by, or used in, operating activities in accordance with U.S. GAAP and should not be used as a measure of liquidity.

The non-GAAP financial results presented herein exclude share-based compensation expense, intangible amortization expense, loss on extinguishment of debt/revolver, capped call MTM adjustment, convertible debt original issue discount (OID), restructuring expenses, integration expenses, COVID-19 expenses, acquisition-related expenses and other infrequent or unusual expenses, and with respect to non-GAAP diluted EPS, foreign currency gains (losses). These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. By excluding these charges, as well as any related tax effects, our non-GAAP results provide information to management and investors that is useful in assessing SMART's core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to evaluate financial results, to plan and forecast future periods, and to assess performance of certain executives for compensation purposes. The presentation of this additional information is not meant to be a substitute for the corresponding financial measures prepared in accordance with U.S. GAAP. In addition, these measures may not be used similarly by other companies and therefore may not be comparable between companies.

Investors are encouraged to review the "Reconciliation of Non-GAAP Financial Measures to GAAP Results" and "Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA" tables in the appendix for more detail on non-GAAP calculations.

Note: Fiscal year ending August 28, 2020.

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SMART is a proven technology leader in the design, development and deployment of current and next-generation specialty high value memory, storage and compute products and solutions.

1988	2011	2017	2018	2019
Founded	Taken private by	Public on	Acquired Penguin	Acquired Artesyn &
	Silver Lake	NASDAQ (SGH)	Computing	Inforce Computing

	Specialty Memory		Brazil		Specialty Compute & Storage
				(High Volume)
	(High Mix)			- AI/Machine Learning Systems
	- DRAM Modules		- DRAM Packaging/Modules
			- HPC/Commercial and Federal Systems
	- Flash Products		- Flash Packaging/Modules
			- Embedded Computing Platform
	- Persistent Memory		- Mobile Memory Products
			- System on Module/Single Board Computers
	- Supply Chain Services		- Battery and Other Products
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SMART's Current Revenue Mix (Q4 FY20)

23%

42%

35%

Specialty Memory

Brazil

Specialty Compute & Storage

Specialty Memory:

• High mix, long life cycle and design win oriented products
• Strong relationships with global OEM's

Specialty Compute & Storage:

• Large HPC systems for Enterprise and Government
• AI training driving new HPC requirements
• Top tier customers in Enterprise and Government / Labs

Brazil:

• Leading edge memory, packaging and test for mobile phones and servers
• Close relationships with vendors and large OEM's
• Domestic manufacturing incentives

Note: Represents fiscal year ending August 30, 2020.

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