Cree Raises Financial Targets for the Fourth Quarter of Fiscal Year 2009

DURHAM, N.C. -- Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced increased revenue and earnings targets for its fiscal fourth quarter ending June 28, 2009. Cree now targets revenue in a range of $143 million to $150 million with GAAP earnings of $0.07 to $0.09 per diluted share and non-GAAP earnings of $0.15 to $0.17 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.

The targeted revenue range is higher than previously announced primarily due to stronger LED component bookings for lighting-related applications, as well as higher LED chip bookings for notebook backlighting.

Gross margin for the quarter is targeted to be at the higher end of previously targeted levels.

Operating expenses are targeted to be approximately $46 million.

“We are pleased with the strong booking trends for Q4,” stated Chuck Swoboda, Cree chairman and CEO. “We also remain optimistic about the growth potential for LED lighting in fiscal 2010, although there is some near term execution risk as we ramp up production to meet these higher targets.”

About Cree, Inc.
Cree is leading the LED lighting revolution and setting the stage to obsolete the incandescent light bulb through the use of energy-efficient, environmentally friendly LED lighting. Cree is a market-leading innovator of lighting-class LEDs, LED lighting solutions, and semiconductor solutions for wireless and power applications.

Cree’s product families include recessed LED fixtures and bulbs, lighting-class power LEDs, high-brightness LEDs, blue and green LED chips, power-switching devices and radio-frequency/wireless devices. Cree solutions are driving improvements in applications such as general illumination, backlighting, electronic signs and signals, variable-speed motors, and wireless communications.

For additional product and company information, please refer to www.cree.com.

Non-GAAP Financial Measures:
This press release highlights the company’s earnings targets on both a GAAP and a non-GAAP basis. The GAAP measure includes certain costs, charges, gains and losses which are excluded from the non-GAAP measure. By publishing the non-GAAP measure, management intends to provide investors with additional information to further analyze the company's future performance. Cree’s management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release. Non-GAAP measures 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.

Forward Looking Statements:
This press release contains forward-looking statements involving risks and uncertainties, both known and unknown, that may cause actual results to differ materially from those indicated. Actual results, including with respect to our targets and prospects, could differ materially due to a number of factors, including the risk that we may be unable to ramp our production quickly enough to meet the targeted revenue levels; the risk that, due to the complexity of our manufacturing processes and transition of production to larger wafers, we may experience production delays that preclude us from shipping sufficient quantities to meet customer orders or that result in higher production costs and lower margins; risks associated with the ramp-up of our production for our new products, as well as production at our Huizhou facility and subcontractors; current uncertainty in global economic conditions that could negatively affect product demand, collectability of receivables and other related matters as consumers and businesses may defer purchases or payments, or default on payments, in response to tighter credit and negative financial news; our ability to complete development and commercialization of products under development, such as our pipeline of brighter LED chips, LED components and LED lighting retrofit solutions; our ability to lower costs; increasing price competition in key markets; risks resulting from the concentration of our business among few customers, including the risk that customers may reduce or cancel orders or fail to honor purchase commitments; the rapid development of new technology and competing products that may impair demand or render our products obsolete; the potential lack of customer acceptance for our products; risks associated with our recent acquisitions; risks associated with ongoing litigation; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report on Form 10-K for the fiscal year ended June 29, 2008, and subsequent reports filed with the SEC. Except as required under the U.S. federal securities laws and the rules and regulations of the SEC, Cree disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.