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  "documentTitle": "SMART Global Holdings, Inc. (SGH)",
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  "authorName": "Wolfpack Research",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-09-25 00:00:00",
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  "notes": "Includes a table of current assets showing a projected cash deficit by 4Q20.",
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      "text": "Finally, and most importantly, this all has a detrimental effect on SGH's balance sheet. As you can see in the chart below, the cash burn eats into the Company's balance sheet and causes a big problem by fiscal Q4 2020.",
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      "text": "The sell-side as well as management are forecasting a massive reversal in the sales trend... The sell side as well as management are forecasting a massive rebound in margins... And they forecast a decline in R&D and SG&A as a proportion of revenues.",
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      "text": "Cash & Equivalents: (1.9)",
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      "text": "We have noted that the Company's use of its prepaid expenses account has increased since the IPO. Our analysis of this prepayments account is suggestive of P&L smoothing.",
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      "text": "As you can see, even with the unrealistic expectations for a reversal in the declining sales trend, the lower margins and necessary working capital expansion means the Company starts to burn cash.",
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      "text": "Management's guidance for fiscal 4Q19... suggests significant rebounds on SGH's top and bottom lines. To us, this looks like an unachievable target.",
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      "text": "In effect, if revenue meets the Street's projections, but on realistic margin expectations given the loss of the PPB in Brazil, SGH's balance sheet could put a cap on growth.",
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      "text": "SMART Global Holdings Balance Sheet (USD, Millions) Assets: Cash & Equivalents, Accounts receivable, Inventories",
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