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Press Room
Cree Reports Record Quarterly Revenue
Which Exceeded $100 Million for the First Time
DURHAM,
NC, OCTOBER 20, 2005 — Cree, Inc. (Nasdaq:
CREE) today announced revenue of $103,856,000 for the
first quarter of fiscal 2006, representing an eight percent
increase over the Company’s comparable year ago
period revenue of $95,897,000, and a five percent increase
sequentially. Net income for the first quarter
was $21,720,000, or $.28 per diluted share, compared
to $24,428,000, or $.32 per diluted share, as reported
for the first quarter of fiscal 2005.
“We are pleased that Cree achieved record revenue
and exceeded our EPS targets for the first quarter of
fiscal 2006,” stated Chuck Swoboda, Cree Chairman
and CEO. “These results are a testament to
Cree’s strong position in what has become an increasingly
competitive environment. Our strategy to win share
in white LED cell phone backlight applications has been
gaining momentum, and we made excellent progress on the
3” wafer conversion during the quarter. Looking
forward, with global trends helping to drive demand for
Cree’s energy-efficient solutions, we remain optimistic
about the tremendous growth opportunities for our products
in lighting, power and communications.”
Financial Highlights:
- Net income included a $.03 per
share benefit related to our investment in Color
Kinetics that was not included in our original targets
for the quarter. Excluding
this benefit, earnings per share was one penny higher
than our target range from our last conference call
of $.22 to $.24.
- Gross margin was 49% and was
within our target range for the quarter. It
is not directly comparable to prior periods due to
the inclusion of $628,000 in cost of sales related
to stock option expense now required under new accounting
rules and $200,000 in costs associated with the shutdown
of Cree Microwave Sunnyvale.
- Operating profit was 25% of revenue and is not directly
comparable to prior periods due to the inclusion of
$2,850,000 in stock option expense and $787,000 in
costs associated with the shutdown of Cree Microwave
Sunnyvale.
- Cash flow from operations was $31 million.
- Cash and short-term and long-term investments equaled
$296 million, an increase of $19 million from Q4 2005.
- Accounts receivable of $52 million
was $16 million higher than Q4 2005, resulting in
days sales outstanding (DSO) of 39, compared to 32
in Q4 2005. DSO is
calculated using our trailing monthly revenue profile.
- Inventory of $29 million was $1.9 million lower than
Q4 2005, and represents 50 days of inventory (DOI),
a decrease of 9 days from Q4 2005.
Business Outlook:
For its second quarter of fiscal 2006, Cree currently
targets revenue in a range of $106 million to $109 million
with earnings of $0.24 to $0.27 per share, including
the impact of $0.03 per share in our estimate for the
cost of expensing of stock options and other equity compensation
and approximately one-half cent per share for costs associated
with the wind down of Cree Microwave Sunnyvale.
Cree will host a conference call
at 5:00 p.m. Eastern time today to review the highlights
of the first quarter fiscal 2006 results and the second
quarter fiscal 2006 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 onto Cree’s
website at www.cree.com and
go to “News & Investor—Overview” for
webcast details. The call will be archived and available
on the website through November 3, 2005.
Supplemental financial information
is available under “Q1 ’06
Financial Metrics” in the “Investor Info” section
of Cree’s web site at http://www.cree.com/investor/metrics.htm.
About Cree, Inc.
Cree is an advanced semiconductor
company that leverages its expertise in silicon carbide
(SiC) and gallium nitride (GaN) materials technology
to produce new and enabling semiconductors. The company’s
products include blue, green and near ultraviolet (UV)
light emitting diodes (LEDs), packaged LEDs, power
switching devices, and radio frequency (RF) and microwave
devices. The Company is currently developing near UV
lasers. Targeted applications for these products include
solid-state illumination, power switching, wireless
infrastructure and optical storage. Cree understands
the important convergence of science, technology and
creativity, placing high value on ideas, as well as
the energy and ability of its people. For more information
on Cree, please visit www.cree.com.
The schedules attached to this release are an integral
part of the release. 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 our
ability to complete development and commercialization
of products under development, such as our pipeline of
brighter LEDs; our ability to lower costs; potential
changes in demand; the risk that, due to the complexity
of our manufacturing processes and transition of production
to three-inch 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; 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 the wind-down of our Cree Microwave operations, including increases in
cash expenditures related to the discontinuation of operations in Sunnyvale,
California, Cree Microwave’s ability to sublease the Sunnyvale facility,
the amount of last-time buy orders and the time needed to fulfill such orders
for silicon products, and the company’s ability to complete the wind-down
process by the end of calendar 2005; risks associated with securities litigation;
and other factors discussed in our filings with the Securities and Exchange
Commission, including our report on Form 10-K for the fiscal year ended June
26, 2005 and subsequent reports filed with the SEC.
Cree and the Cree logo are registered trademarks of
Cree, Inc.
Consolidated
Balance Sheets (pdf)
Statement of Operations
(pdf)
Contact:
Raiford Garrabrant
Director, Investor Relations
Cree, Inc.
(P) 919-313-5397
(F) 919-313-5615
email: raiford_garrabrant@cree.com
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