Sort By Date

Cree Reports Record Quarterly Revenue for the Second Quarter of Fiscal Year 2009

Jan 20, 2009


"DURHAM, N.C., JANUARY 20, 2009 – Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced revenue of $147.6 million for its second quarter of fiscal 2009, ended December 28, 2008. This represents a 24% increase compared to revenue of $119.0 million reported for the second fiscal quarter last year and a 5% increase compared to the fiscal first quarter of 2009. Revenue included $5.6 million in patent licensing fees which were not factored into previously announced targets. GAAP net income for the second quarter was $10.7 million, or $0.12 per diluted share, compared to net income of $6.6 million, or $0.08 per diluted share, for the second quarter of fiscal 2008. Net income included approximately $4.4 million, or $0.05 per diluted share, related to the patent licensing fees, as well as a franchise tax benefit, which was not factored into previously announced targets. The remainder of this press release highlights the company’s financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain costs, charges, gains and losses that are excluded from non-GAAP results. By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. Cree’s management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release. Non-GAAP results are not prepared in accordance with GAAP, and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this press release. GAAP EPS of $0.12 per diluted share for the second quarter of fiscal 2009 includes expenses totaling $7.1 million, net of tax, or $0.08 per diluted share related to amortization of acquired intangibles and stock-based compensation expense. On a non-GAAP basis, adjusted to exclude these items, net income for the second quarter of fiscal 2009 was $17.8 million, or $0.20 per diluted share. On a non-GAAP basis, adjusted to exclude comparable items, net income for the second quarter of fiscal 2008 was $12.2 million, or $0.14 per diluted share. “Cree delivered excellent financial results again despite challenging economic conditions, driven by strength in LED product sales for lighting applications,” stated Chuck Swoboda, Cree chairman and CEO. “In the third quarter of fiscal 2009, we expect that lower demand for our products in consumer, mobile and automotive applications will be partially offset by growth in LED sales for commercial lighting applications. As we look ahead to calendar 2009, we are targeting that LED lighting adoption will continue to gain momentum as product availability increases and recognition of the benefits grows from new installations like the Federal Reserve and the planned Pentagon renovation.” Recent Business Highlights:
* Announced volume availability of the LR24, a recessed LED luminaire that offers high-quality, energy-efficient light for the largest commercial lighting market, suspended-ceiling applications traditionally addressed by linear fluorescents. The LR24 has already been installed at the U.S. Federal Reserve in Washington, D.C., as part of their ongoing energy-efficiency program, and the Pentagon plans to install 4,200 of the luminaires as part of a major renovation currently underway. * Announced the high-volume availability of XLamp XP-E LEDs with output up to 122 lumens, the highest commercially available minimum flux for a single-die LED, at 350 mA, in the industry today. The volume availability of these XLamp LEDs is aimed at further stimulating the LED lighting market, driving applications in outdoor and indoor general illumination as well as portable and retail display lighting. * Achieved industry-best reported R&D results of 161 lumens per watt for a white power LED. These results demonstrate Cree’s continued commitment to deliver industry-leading performance through a constant focus on innovation and R&D. * Entered into a patent license agreement granting Mitsubishi Chemical Corporation (MCC) an exclusive license (subject to certain exceptions) to manufacture and sell freestanding GaN substrates, with Cree to receive over the life of the agreement a combination of guaranteed payments and royalties on the sale of GaN substrates. * Welcomed Indian Wells, California, to the LED City® Program. The city has replaced much of the lighting in City Hall, with all circular recessed lighting converted to the Cree LR6 LED light, reducing electricity consumption by 80%. The city plans to evaluate LED lighting for other municipal lighting applications to further increase energy savings. * Welcomed Notre Dame, Madison Area Technical College, and the University of California, Davis to the LED University™ Program. Notre Dame is implementing four pilot installations to evaluate the feasibility of LED lighting across the campus and is already realizing energy savings of 81% compared to incandescent lighting in the Hesburgh Library.
Q2 2009 Financial Metrics:
* GAAP gross margin was 38% of revenue compared to 35% in Q2 of fiscal 2008, and non-GAAP gross margin was 39% compared to 36% in Q2 of fiscal 2008. Q2 gross margin included approximately 200 basis points of benefit related to the MCC and Bridgelux license agreements. * Accounts receivable increased $5.1 million from Q1 of fiscal 2009 to $108.6 million, resulting in days sales outstanding of 66, the same as Q1 of fiscal 2009. * Inventory decreased $0.4 million from Q1 of fiscal 2009 to $78.8 million and represents 78 days of inventory, the same as Q1 of fiscal 2009. * Cash and investments increased $26.5 million to $365.5 million, with cash flow from operations of $40.7 million and free cash flow (cash flow from operations less capital expenditures) of $23.2 million. Business Outlook:
Current uncertainty in global economic conditions makes it particularly difficult to predict demand and makes it more likely that Cree’s actual results could differ materially from expectations. For its third quarter of fiscal 2009 ending March 29, 2009, Cree targets revenue in a range of $128 million to $135 million with GAAP earnings of $0.02 to $0.05 per diluted share and non-GAAP earnings of $0.10 to $0.13 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. Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the fiscal second quarter 2009 results and the fiscal third 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 and go to “Investor Relations — Overview” for webcast details. The call will be archived and available on the website through February 3, 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 December 28, 2008,” at


Post Your Comment