DURHAM, NC, APRIL 20, 2006 — Cree, Inc. (Nasdaq: CREE) today announced revenue of $107,704,000 for the third quarter of fiscal 2006, which ended March 26, 2006. This represents a 12% increase over the Company’s comparable year-ago period revenue from continuing operations of $95,754,000, and a two-percent increase sequentially. Net income, including a loss from discontinued operations for the third quarter, was $24,000,000, or $0.31 per diluted share, compared to $20,683,000, or $0.27 per diluted share as reported for the third quarter of 2005.
During the third quarter of fiscal 2006, net income included a tax benefit of approximately $0.05 per share related to the Company’s investment in Color Kinetics and a prior year tax adjustment. Third quarter 2006 results also include stock compensation expense of $2,367,000, net of tax, or $0.03 per diluted share, due to new accounting requirements that became effective for fiscal 2006.
For the nine-month period ended March 26, 2006, Cree reported revenue from continuing operations of $316,246,000, an increase of 10% over the $286,275,000 reported for the comparable period in fiscal year 2005. Net income, including a loss from discontinued operations for the nine-month period, was $63,4 30,000, or $0.81 per share, compared to $70,132,000, or $0.91 per share, in the year-ago period. Nine-month results for fiscal 2006 include stock compensation expense from continuing operations of $6,543,000, net of tax, or $0.08 per diluted share.
“Q3 was another strong quarter for Cree as we delivered record revenue from continuing operations and solid earnings. We are particularly pleased with the success of our XLamp products, which grew nicely in Q3, offsetting the seasonality in LED chip sales,” stated Chuck Swoboda, Cree chairman and CEO. “The fourth quarter will be a transition quarter for Cree as we start production of our high power products in our new Research Triangle Park, North Carolina, fab, which will add some additional operational expenses as well as one-time costs associated with the move. The combination of these investments and those we are making in R&D should put Cree in a strong position to grow our new products businesses.”
For its fourth quarter of fiscal 2006, Cree currently targets revenue in a range of $106 million to $110 million with earnings of $0.22 to $0.24 per share, including the impact of $0.03 per share in our estimate for the cost of expensing of stock compensation. This target also includes a one-time charge of $0.01 per share related to the opening of our Research Triangle Park, North Carolina, facility.
Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the third quarter fiscal 2006 results and the fourth 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 May 4, 2006.
Supplemental financial information is available under “Q3 ’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 a market-leading innovator and manufacturer of semiconductors that enhance the value of solid-state lighting, power and communications products by significantly increasing their energy performance and efficiency. Key to Cree’s market advantage is its world-class materials expertise in silicon carbide (SiC) and gallium nitride (GaN) for chips and packaged devices that can handle more power in a smaller space while producing less heat than other available technologies, materials and products.
Cree drives its increased performance technology into multiple applications including exciting alternatives in brighter and more tunable light for general illumination, backlighting for more vivid displays, optimized power management for high-current switch-mode power supplies and variable speed motors, and more effective wireless infrastructure for data and voice communications. Cree customers range from innovative lighting fixtures makers to defense-related federal agencies.
Cree’s product families include blue and green LED chips, lighting LEDs in all colors, LED backlighting solutions, power switching devices and radio frequency/wireless devices. For additional information please refer to 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; increasing price competition in key markets; the risk that, due to the complexity of our manufacturing processes, transition of production to three-inch wafers, and transition of our advanced device wafer fabrication to our new facility, 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; Cree Microwave’s ability to sublease the Sunnyvale facility; risks associated with on-going 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, the Cree logo, and XLamp are registered trademarks of Cree, Inc.
Director, Investor Relations