"DURHAM, N.C., April 21, 2009 – Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced revenue of $131.1 million for its third quarter of fiscal 2009, ended March 29, 2009. This represents a 5% increase compared to revenue of $125.0 million reported for the third fiscal quarter last year and an 11% decrease compared to the fiscal second quarter of 2009. GAAP net income for the third quarter was $4.0 million, or $0.05 per diluted share, compared to net income of $5.7 million, or $0.06 per diluted share, for the third quarter of fiscal 2008. On a non-GAAP basis, net income for the third quarter of fiscal 2009 was $11.8 million, or $0.13 per diluted share compared to net income for the third quarter of fiscal 2008, which was $12.0 million or $0.14 per diluted share. Cree generated $49.9 million of operating cash flow and $40.5 million of free cash flow during the third quarter. “Q3 was a solid quarter for Cree, as we achieved revenue and profits within our previously announced targets,” stated Chuck Swoboda, Cree Chairman and CEO. “Growth in LED lighting partially offset lower demand for auto, mobile and consumer applications in Q3, and we target total LED revenue to rebound in Q4 driven by increased demand for commercial lighting and video screens. As we look ahead to Fiscal 2010, we are targeting our LED lighting and LED component product lines to continue to grow, and we are planning to continue to invest in R&D and capacity to enable this growth.” Recent Business Highlights:
* Earned commercial and residential ENERGY STAR® qualifications for best-in-class LED downlight family. The product line, including the LR6, LR5 and LR4 downlights, has demonstrated LED lifetime and fixture efficacy that qualifies for the stringent commercial rating, as well as the residential rating. * Welcomed the University of Miami and the University of Alaska at Anchorage to the LED University™ program. The University of Miami has installed new LED pole lights to improve walkway illumination on the main campus and is evaluating LED lighting for interior applications such as conference rooms, hallways and classrooms. The University of Alaska at Anchorage recently completed a parking lot pilot and is also evaluating LED lighting for recessed lighting in stairwells and mechanical rooms, walkway bollards and parking-lot lights for the new Health Science Building. * Welcomed Chapel Hill, North Carolina, to the LED City® Program. Chapel Hill has installed LED streetlights along the high-profile 100 block of Franklin Street, one of the town’s most recognizable landmarks. According to Mayor Kevin Foy, “By replacing low-pressure sodium streetlights with LEDs, Chapel Hill can reduce energy consumption for street lighting, which we hope will positively impact our budget as well as our carbon emissions.” * Launched the Product Characterization Tool (PCT), an interactive LED design tool that simplifies the task of translating nominal LED performance to real-world conditions. Cree’s PCT, which introduces functionality not commercially offered by any other LED supplier, allows users to easily characterize any XLamp® LED over a wide range of operating conditions, including drive current, flux bin, price and junction temperature. It also calculates metrics such as lumen output, lumens per watt, and lumens per dollar. * Developed a demonstration dual switch 1200-volt, 100-amp power module featuring all-SiC semiconductors and capable of operating at junction temperatures up to 200 degrees C. This was accomplished by working with both the United States Air Force Research Lab Propulsion Directorate and high-power module pioneer Powerex, Inc. The all-SiC power switch module can be an enabling technology for next-generation military systems. * Accounts receivable decreased $5.6 million from Q2 of fiscal 2009 to $102.9 million, resulting in days sales outstanding of 71, an increase of 5 days from Q2 of fiscal 2009. * Inventory decreased $1.3 million from Q2 of fiscal 2009 to $77.5 million and represents 83 days of inventory, an increase of 5 days from Q2 of fiscal 2009. * Cash and investments increased $39.4 million to $404.9 million, with cash flow from operations of $49.9 million and free cash flow (cash flow from operations less capital expenditures) of $40.5 million. Business Outlook:
For its fourth quarter of fiscal 2009 ending June 28, 2009, Cree targets revenue in a range of $137 million to $143 million with GAAP earnings of $0.05 to $0.07 per diluted share and non-GAAP earnings of $0.13 to $0.15 per diluted share, based on an estimated 89 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles of $0.03 per diluted share, and stock-based compensation expense of $0.05 per diluted share. Quarterly Conference Call:
Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the fiscal third quarter 2009 results and the fiscal fourth quarter 2009 business outlook, including significant factors and assumptions underlying the targets noted above. The conference call will be available to the public through a live audio web broadcast via the Internet. Log on to Cree’s website at www.cree.com and go to “Investor Relations — Overview” for webcast details. The call will be archived and available on the website through May 5, 2009. Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available in the “Investor Relations” section of Cree’s website, under “Financial Metrics,” “Quarter ending March 29, 2009,” at www.cree.com."