Third Quarter Fiscal 2009 Highlights:

 --  Net Sales of $91.6 Million --  Gross Profit of $18.6 Million --  Adjusted EBITDA of $5.2 Million --  GAAP EPS of ($0.04) --  Non-GAAP Diluted EPS of $0.01 --  Year-to-date Operating Cash Flow of $44.6 Million --  Cash and Cash Equivalents of $139.2 Million      

Net sales for the third quarter of fiscal 2009 were $91.6 million, compared to $109.1 million for the second quarter of fiscal 2009, and $167.6 million for the third quarter of fiscal 2008.

Gross profit for the third quarter of fiscal 2009 was $18.6 million, compared to $24.1 million for the second quarter of fiscal 2009, and $27.8 million for the third quarter of fiscal 2008.

GAAP net loss for the third quarter of fiscal 2009 was $2.4 million, or $0.04 per share, compared to a loss of $1.8 million, or $0.03 per share for the second quarter of fiscal 2009, and a loss of $11.0 million, or $0.18 per share for the third quarter of fiscal 2008.

Non-GAAP net income was $0.9 million or $0.01 per diluted share for the third quarter of fiscal 2009, compared to a net income of $4.1 million, or $0.06 per diluted share for the second quarter of fiscal 2009, and a net income of $4.9 million, or $0.08 per diluted share for the third quarter of fiscal 2008. Non-GAAP net income excludes certain charges such as those related to goodwill impairment, restructuring, and other one-time charges, stock-based compensation, and for the third quarter of fiscal 2009, charges in connection with corporate headquarters relocation.

Adjusted EBITDA for the third quarter of fiscal 2009 was $5.2 million, compared to $10.2 million for the second quarter of fiscal 2009, and $12.6 million for the third quarter of fiscal 2008.

Please refer to the Non-GAAP Information section and the "Reconciliation of Non-GAAP Financial Measures" table below for further detail on non-GAAP net income and Adjusted EBITDA.

Operating cash flow for the third quarter of fiscal 2009 was $20.0 million. Year-to-date operating cash flow was $44.6 million. Cash and cash equivalents at the end of the third quarter of fiscal 2009 was $139.2 million and long-term debt, due in 2012, remained at $81.3 million.

"For the third quarter of fiscal 2009, gross profit, and GAAP and non-GAAP EPS results met our guidance as careful control of expenses in combination with a favorable mix of business and lower taxes more than offset the impact of the decline in net sales," commented Iain MacKenzie, President and CEO of SMART.

"Earlier this month, we were proud to announce our XceedIOPS PCIe SSD, further demonstrating our continued investment and development in support of the growing enterprise solid state storage business," continued Mr. MacKenzie. "This collaborative effort between SMART and Marvell involves multiple facets, which include research and development, product technology, packaging, sales, manufacturing and logistics. We believe that our XceedIOPS PCIe addresses the top three requirements in enterprise storage moving forward: increased performance, reduced power consumption and lower dollars per IOPS. Customer sampling is expected to begin this quarter with production volumes expected to begin in calendar Q4. The product joins our extensive portfolio of SSDs available today supporting customers in the defense/aerospace, industrial, embedded, telecom/datacom, enterprise and other OEM markets."

"On the DRAM portion of our business, we see the industry working towards the introduction of the next-generation DDR3 module for servers, and with our comprehensive suite of products, we believe that we are well-positioned to capture a meaningful portion of this market. The DDR3 ramp is underway, and the adoption of Intel's Nehalem processor architecture across multiple platforms, combined with the diminishing price premium of DDR3 over DDR2, bode well for our future success on this front. In addition, we expect that the recent introduction of AMD's Istanbul processor should generate growing demand for our high density DDR2 modules," added Mr. MacKenzie.

Business Outlook

The following statements are based upon management's current expectations. These statements are forward-looking, and actual results may differ materially. The Company undertakes no obligation to update these statements.

For the fourth quarter of fiscal 2009, SMART estimates net sales will be in the range of $90 million to $100 million, gross profit in the range of $17 million to $19 million, and net (loss) per share will be in the range of ($0.02) to ($0.01) on a GAAP basis. On a non-GAAP basis, excluding charges related to stock-based compensation, the Company expects net income per diluted share will be in the range of $0.00 to $0.01.

Conference Call Details

SMART's third quarter, fiscal 2009 teleconference and webcast is scheduled to begin at 2:30 p.m. Pacific Daylight Time (PDT), or 5:30 p.m. Eastern Daylight Time (EDT), on Thursday, June 25, 2009. The call may be accessed US toll free by calling 1-877-941-4774 or US toll by calling 1-480-629-9760. Please join the conference call at least ten minutes early in order to register. The passcode for the call is 4094900. SMART will also offer a live and archived webcast of the conference call, accessible from the Company's website at http://www.smartm.com. A telephonic replay of the conference call will be available through midnight PDT, July 9, 2009, by dialing 1-800-406-7325 and entering passcode 4094900. Callers outside the U.S. and Canada may access the replay by dialing 1-303-590-3030.

Forward-Looking Statements

Statements contained in this press release, including the quotations attributed to Mr. MacKenzie, that are not statements of historical fact, including any statements that use the words "will," "believes," "anticipates," "estimates," "expects," "intends" or similar words that describe the Company's or its management's future expectations, plans, objectives, or goals, are "forward-looking statements" and are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, projections regarding the Company's financial performance and financial condition, the benefits of its joint efforts with Marvell, the timing of new product availability, and the Company's market position.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the company to be materially different from the historical results and/or from any future results or outcomes expressed or implied by such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, DRAM supply and demand, production or manufacturing difficulties, design issues, competitive factors, new products and technological changes (or rate of adoption), industry and technology trends, fluctuations in product prices and raw material costs, dependence upon third-party vendors, customer demand, changes in industry standards or release plans, regulatory requirements, and market conditions, failure of the Company to achieve stated targets relating to solid state storage products, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission including the Company's Form 10-K for the fiscal year ended August 29, 2008, Form 10-Q for the quarter ended November 28, 2008, Form 10-Q for the quarter ended February 27, 2009, and the Form 10-Q for the quarter ended May 28, 2009 to be filed with the SEC.