Cree Reports Record Quarterly Revenue which Exceeded $100 Million for the First Time
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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:
oNet 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.
oGross 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.
oOperating 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.
oCash flow from operations was $31 million.
oCash and short-term and long-term investments equaled $296 million, an
increase of $19 million from Q4 2005.
oAccounts 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.
oInventory 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 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.
