Company: PENG
Filing Date: 2025-04-02
Form Type: 10-Q
Source: 0001628280-25-016182
Chunk: 47

Company: Penguin Solutions, Inc.
Filing Date: 2025-04-02
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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 Brazil), estimated costs to sell and expected proceeds and concluded the net assets were impaired as of August 25, 2023. As a result, we recognized an impairment charge of $153.0 million in the fourth quarter of 2023 to write down the carrying value of the net assets of SMART Brazil. In addition, we concluded that the outside basis of SMART Brazil inclusive of any withholding taxes should be recognized upon the classification as held for sale as of August 25, 2023. Accordingly, we recognized withholding taxes on the expected capital gain and deferred tax liabilities of $28.6 million in 2023.Assets and liabilities of SMART Brazil as of the November 29, 2023 disposal date were as follows:As ofNovember 29,2023Cash and cash equivalents$40,927 Accounts receivable, net16,482 Inventories26,103 Other current assets17,800 Total current assets101,312 Property and equipment, net66,870 Operating lease right-of-use assets6,912 Goodwill19,856 Other noncurrent assets27,490 Total assets222,440 Impairment of SMART Brazil assets(153,036)Total assets, net of impairment$69,404 Accounts payable and accrued expenses$20,576 Current debt3,872 Other current liabilities1,023 Total current liabilities25,471 Long-term debt11,938 Noncurrent operating lease liabilities5,686 Noncurrent deferred tax liabilities28,564 Other noncurrent liabilities93 Total liabilities$71,752 Net assets (liabilities) of discontinued operations$(2,348)

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The following table presents the results of operations for SMART Brazil:Six Months EndedMarch 1,2024Net sales$55,159 Cost of sales50,560 Gross profit4,599 Operating expenses:Research and development157 Selling, general and administrative5,421 Other operating (income) expense64 Total operating expenses5,642 Operating loss(1,043) Non-operating (income) expense:Loss from divestiture of 81% interest in SMART Brazil10,888 Interest (income) expense, net(1,262)Other non-operating (income) expense138 Total non-operating (income) expense9,764 Loss before taxes(10,807)Income tax benefit(2,659)Net loss from discontinued operations$(8,148)Loss from Div