Cree, Inc.
Apr 26, 2016

Cree Reports Financial Results for the Third Quarter of Fiscal Year 2016

DURHAM, N.C.--(BUSINESS WIRE)-- Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced revenue of $367 million for its third quarter of fiscal 2016, ended March 27, 2016. This compares to revenue of $410 million reported for the third quarter of fiscal 2015, and $436 million reported for the second quarter of fiscal 2016. GAAP net income for the third quarter of fiscal 2016 was $152 thousand, or $0.00 per diluted share, compared to GAAP net income of $476 thousand, or $0.00 per diluted share, for the third quarter of fiscal 2015. On a non-GAAP basis, net income for the third quarter of fiscal 2016 was $17 million, or $0.17 per diluted share, compared to non-GAAP net income for the third quarter of fiscal 2015 of $25 million, or $0.22 per diluted share.

"Q3 operating results were in-line with the preliminary estimates we provided on April 5th," stated Chuck Swoboda, Cree Chairman and CEO. "I believe we've addressed the root causes that led to our recent business challenges. We improved customer responsiveness in March, and we're optimistic that this, combined with new product momentum, will drive sequential growth in fiscal Q4."

Q3 2016 Financial Metrics

(in thousands, except per share amounts and percentages)

         
 
Third Quarter
2016     2015* Change
(unaudited) (unaudited)
Revenue, net $ 366,919 $ 409,519 $ (42,600 ) (10 )%
GAAP
Gross margin 29.7 % 30.6 %
Operating margin (1.2 )% 0.3 %
Net income (loss) $ 152 $ 476 $ (324 ) (68 )%
Earnings (loss) per diluted share $ $ $
Non-GAAP
Gross margin 30.6 % 31.3 %
Operating margin 4.5 % 6.3 %
Net income $ 16,943 $ 24,727 $ (7,784 ) (31 )%
Earnings per diluted share $ 0.17 $ 0.22 $ (0.05 ) (23 )%
 

* As revised to reflect the correction of an immaterial error. For additional information, see the Company's

Form 10-Q for the quarterly period ended March 27, 2016 to be filed with the Securities and Exchange Commission

on April 27, 2016.

Recent Business Highlights:

Business Outlook:

For its fourth quarter of fiscal 2016 ending June 26, 2016, Cree targets revenue in a range of $370 million to $395 million, with GAAP gross margin targeted to be 30.7%+/- and non-GAAP gross margin targeted to be 31.5%+/-. Our GAAP gross margin targets include stock-based compensation expense of approximately $3 million, while our non-GAAP targets do not. GAAP operating expenses are targeted to be approximately $117 million, and non-GAAP operating expenses are targeted to be approximately $98 million. The GAAP tax rate is targeted at 19%+/- and the non-GAAP tax rate is targeted at 16.0%+/- for the fourth quarter of fiscal 2016. GAAP net (loss) income is targeted at $(3) million to $3 million, or $(0.03) to $0.03 per diluted share, excluding any net changes associated with Cree's Lextar investment. Non-GAAP net income is targeted in a range of $16 million to $22 million, or $0.16 to $0.22 per diluted share. The GAAP and non-GAAP per diluted share targets are based on an estimated 101 million diluted weighted average shares. Targeted non-GAAP earnings exclude $0.19 per diluted share of expenses related to stock-based compensation expense, the amortization or impairment of acquisition-related intangibles and any net changes associated with Cree's Lextar investment.

Quarterly Conference Call:

Cree will host a conference call at 5:00 p.m. EST today to review the highlights of the fiscal 2016 third quarter results and the fiscal 2016 fourth quarter 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. For webcast details, visit Cree's website at investor.cree.com/events.cfm.

Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available on Cree's website at investor.cree.com/results.cfm.

About Cree, Inc.

Cree is a market-leading innovator of lighting-class LEDs, lighting products and semiconductor products for power and radio frequency (RF) applications. Cree believes in better light experiences and is delivering new innovative LED technology that transforms the way people experience light through high-quality, interior and exterior LED lighting solutions.

Cree's product families include LED lighting systems and bulbs, blue and green LED chips, high-brightness LEDs, lighting-class power LEDs, power-switching devices and RF devices. Cree's products are driving improvements in applications such as general illumination, electronic signs and signals, power supplies and inverters.

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

Non-GAAP Financial Measures:

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 and expenses which 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.

Forward Looking Statements:

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 in the forward-looking statements. 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 not obtain sufficient orders to achieve our targeted revenues; price competition in key markets; the risk that we or our channel partners are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand; the risk that our commercial Lighting results will continue to suffer if new issues arise regarding the new ERP system we implemented in the third quarter of fiscal 2016 for this business; the risk that we may experience production difficulties that preclude us from shipping sufficient quantities to meet customer orders or that result in higher production costs and lower margins; our ability to lower costs; the risk that our results will suffer if we are unable to balance fluctuations in customer demand and capacity; product mix; risks associated with the ramp-up of production of our new products, and our entry into new business channels different from those in which we have historically operated; the risk that customers do not maintain their favorable perception of our brand and products, resulting in lower demand for our products; the risk that retail customers may alter promotional pricing, increase promotion of a competitor's products over our products or reduce their inventory levels, all of which could negatively affect product demand; the risk that our equity method investments may experience periods of significant stock price volatility causing us to recognize fair value losses on our investment; the risk that we have an increasingly complex supply chain and its ability to scale to enable maintaining a sufficient supply of raw materials; ongoing uncertainty in global economic conditions, infrastructure development or customer demand 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; the risk we may be required to record a significant charge to earnings if our goodwill or amortizable assets become impaired; our ability to complete development and commercialization of products under development, such as our pipeline of improved LED chips, LED components and LED lighting 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; risks related to our multi-year warranty periods for LED lighting products; risks associated with acquisitions, divestitures or investments; 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 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 28, 2015, and subsequent reports filed with the SEC. These forward-looking statements represent Cree's judgment as of the date of this release. Except as required under the U.S. federal securities laws and the rules and regulations of the SEC, Cree disclaims any intent or 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.

Cree®, Essentia®, SmartCast® and XLamp® are registered trademarks and RSW and TrueWhitePlus are trademarks of Cree, Inc.

CREE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands, except per share amounts and percentages)

   
Three Months Ended Nine Months Ended
March 27,
2016
 

March 29,

2015*

March 27,
2016
 

March 29,

2015*

Revenue, net $ 366,919 $ 409,519 $ 1,228,214 $ 1,250,348
Cost of revenue, net 257,886   284,371   854,163   853,119  
Gross profit 109,033 125,148 374,051 397,229
Gross margin percentage 29.7 % 30.6 % 30.5 % 31.8 %
 
Operating expenses:
Research and development 41,871 43,823 127,363 137,537
Sales, general and administrative 64,489 71,860 214,443 213,927
Amortization or impairment of acquisition-related intangibles 7,318 6,749 21,442 19,743
(Gain) loss on disposal or impairment of long-lived assets (104 ) 1,459   16,483   3,641  
Total operating expenses 113,574 123,891 379,731 374,848
 
Operating (loss) income (4,541 ) 1,257 (5,680 ) 22,381
Operating income percentage (1.2 )% 0.3 % (0.5 )% 1.8 %
 
Non-operating income (expense), net 717   (866 ) (14,075 ) 3,766  
(Loss) income before income taxes (3,824 ) 391 (19,755 ) 26,147
Income tax (benefit) expense (3,976 ) (85 ) (8,860 ) 2,739  
Net income (loss) $ 152   $ 476   $ (10,895 ) $ 23,408  
 
 
Diluted earnings (loss) per share $ $ $ (0.11 ) $ 0.20
 
Shares used in diluted per share calculation: 101,221 111,590 102,157 116,304
 

* As revised to reflect the correction of an immaterial error. For additional information, see the Company's Form 10-Q for

the quarterly period ended March 27, 2016 to be filed with the Securities and Exchange Commission on April 27, 2016.

CREE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

  March 27,
2016
 

June 28,

2015*

ASSETS
Current assets:
Cash, cash equivalents, and short-term investments $ 620,450 $ 713,191
Accounts receivable, net 178,606 186,157
Income tax receivable 12,261
Inventories 297,860 280,576
Deferred income taxes 39,190
Prepaid expenses 20,755 29,932
Other current assets 57,807 54,851
Assets held for sale 5,700   4,353
Total current assets 1,193,439 1,308,250
Property and equipment, net 612,072 635,072
Goodwill 618,828 616,345
Intangible assets, net 309,919 310,729
Other long-term investments 41,661 57,595
Deferred income taxes 28,578 8,951
Other assets 9,648   11,091
Total assets $ 2,814,145   $ 2,948,033
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 129,963 $ 163,128
Accrued salaries and wages 45,993 45,415
Income taxes payable 2,035
Other current liabilities 42,046   44,208

Total current liabilities

218,002 254,786
 
Long-term liabilities:
Long-term debt 225,000 200,000
Deferred income taxes 1,270 10,211
Other long-term liabilities 16,416   21,084
Total long-term liabilities 242,686 231,295
 
Shareholders' equity:
Common stock 124 131
Additional paid-in-capital 2,336,099 2,285,554
Accumulated other comprehensive income, net of taxes 7,206 5,798
Retained earnings 10,028   170,469
Total shareholders' equity 2,353,457   2,461,952
Total liabilities and shareholders' equity $ 2,814,145   $ 2,948,033
 

* As revised to reflect the correction of an immaterial error. For additional information, see the Company's Form 10-Q

for the quarterly period ended March 27, 2016 to be filed with the Securities and Exchange Commission on April 27, 2016.

CREE, INC.
UNAUDITED FINANCIAL RESULTS BY OPERATING SEGMENT
(in thousands, except percentages)

The following table reflects the results of the Company's reportable segments as reviewed by the Company's Chief Executive Officer, its Chief Operating Decision Maker or CODM, for the three and nine months ended March 27, 2016 and the three and nine months ended March 29, 2015. The CODM does not review inter-segment transactions when evaluating segment performance and allocating resources to each segment. As such, total segment revenue is equal to the Company's consolidated revenue.

  Three Months Ended    
March 27,
2016
  March 29,
2015
Change
Lighting Products revenue $ 187,714 $ 224,109 $ (36,395 ) (16 )%
Percent of revenue 51 % 55 %
LED Products revenue 150,189

154,384

(4,195 ) (3 )%
Percent of revenue 41 % 38 %
Power and RF Products revenue 29,016 31,026 (2,010 ) (6 )%
Percent of revenue 8 % 7 %  
Total revenue $ 366,919   $ 409,519   $ (42,600 ) (10 )%
  Nine Months Ended    
March 27,
2016
  March 29,
2015
Change
Lighting Products revenue $ 690,715 $ 677,363 $ 13,352 2 %
Percent of revenue 56 % 54 %
LED Products revenue 451,759 479,851 (28,092 ) (6 )%
Percent of revenue 37 % 38 %
Power and RF Products revenue 85,740 93,134 (7,394 ) (8 )%
Percent of revenue 7 % 8 %  
Total revenue $ 1,228,214   $ 1,250,348   $ (22,134 ) (2 )%
  Three Months Ended    
March 27,
2016
 

March 29,

2015*

Change
Lighting Products gross profit $ 48,808 $ 58,315 $ (9,507 ) (16 )%
Lighting Products gross margin 26.0 % 26.0 %
LED Products gross profit 52,102 55,358 (3,256 ) (6 )%
LED Products gross margin 34.7 % 35.9 %
Power and RF Products gross profit 13,477 16,484 (3,007 ) (18 )%
Power and RF Products gross margin 46.4 % 53.1 %
Unallocated costs (5,354 ) (5,009 ) (345 ) 7 %
Consolidated gross profit $ 109,033   $ 125,148   $ (16,115 ) (13 )%
Consolidated gross margin 29.7 % 30.6 %
 

* As revised to reflect the correction of an immaterial error. For additional

information, see the Company's Form 10-Q for the quarterly period ended March 27,

2016 to be filed with the Securities and Exchange Commission on April 27, 2016.

 

  Nine Months Ended    
March 27,
2016
 

March 29,

2015*

Change
Lighting Products gross profit $ 190,531 $ 178,608 $ 11,923 7 %
Lighting Products gross margin 27.6 % 26.4 %
LED Products gross profit 156,489 182,406 (25,917 ) (14 )%
LED Products gross margin 34.6 % 38.0 %
Power and RF Products gross profit 42,146 51,601 (9,455 ) (18 )%
Power and RF Products gross margin 49.2 % 55.4 %
Unallocated costs (15,115 ) (15,386 ) 271   (2 )%
Consolidated gross profit $ 374,051   $ 397,229   $ (23,178 ) (6 )%
Consolidated gross margin 30.5 % 31.8 %
 

* As revised to reflect the correction of an immaterial error. For additional

information, see the Company's Form 10-Q for the quarterly period ended March 27,

2016 to be filed with the Securities and Exchange Commission on April 27, 2016.

Reportable Segments Description

The Company's Lighting Products segment primarily consists of LED lighting systems and bulbs. The Company's LED Products segment includes LED components, LED chips, and silicon carbide materials. The Company's Power and RF Products segment includes power devices and RF devices.

Financial Results by Reportable Segment

The Company's CODM reviews gross profit as the lowest and only level of segment profit. As such, all items below gross profit in the consolidated statements of income (loss) must be included to reconcile the consolidated gross profit presented in the preceding table to the Company's consolidated income before taxes.

The Company allocates direct costs and indirect costs to each segment's cost of revenue. The allocation methodology is based on a reasonable measure of utilization considering the specific facts and circumstances of the cost being allocated.

Certain costs are not allocated when evaluating segment performance. These unallocated costs consist primarily of manufacturing employees' stock-based compensation, expenses for profit sharing and quarterly or annual incentive plans and matching contributions under the Company's 401(k) Plan.

Cree, Inc.
Non-GAAP Measures of Financial Performance

To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, Cree uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross margin, non-GAAP operating income, non-GAAP non-operating income, net, non-GAAP net income, non-GAAP earnings per diluted share and free cash flow.

Reconciliation to the nearest GAAP measure of all historical non-GAAP measures included in this press release can be found in the tables included with this press release. In this press release, Cree also presents its target for non-GAAP expenses, which are expenses less stock-based compensation expense, amortization or impairment of acquisition-related intangibles and net changes associated with equity method investments.

Non-GAAP measures presented in this press release are not in accordance with or an alternative to measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cree's results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate Cree's results of operations in conjunction with the corresponding GAAP measures.

Cree believes that these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, enhance investors' and management's overall understanding of the Company's current financial performance and the Company's prospects for the future, including cash flows available to pursue opportunities to enhance shareholder value. In addition, because Cree has historically reported certain non-GAAP results to investors, the Company believes the inclusion of non-GAAP measures provides consistency in the Company's financial reporting.

For its internal budgeting process, and as discussed further below, Cree's management uses financial statements that do not include stock-based compensation expense, amortization or impairment of acquisition-related intangibles, asset retirement charges, gains or charges associated with LED business restructuring, net changes associated with equity method investments, recognition of deferred Initial Public Offering (IPO) costs and the income taxes associated with the foregoing. Cree's management also uses non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the Company's financial results.

As described above, Cree excludes the following items from one or more of its non-GAAP measures when applicable:

Stock-based compensation expense. This expense consists of expenses for stock options, restricted stock, performance stock awards and employee stock purchases through its ESPP. Cree excludes stock-based compensation expenses from its non-GAAP measures because they are non-cash expenses that Cree does not believe are reflective of ongoing operating results.

Amortization or impairment of acquisition-related intangibles. Cree incurs amortization or impairment of acquisition-related intangibles in connection with acquisitions. Cree excludes these items because they arise from Cree's prior acquisitions and have no direct correlation to the ongoing operating results of Cree's business.

Asset retirement charges. Cree has recognized charges for the impact of the decision to abandon or retire certain property and equipment prior to the end of their estimated useful lives. Because these charges relate to assets which have been or will be retired prior to the end of their estimated useful lives, Cree does not consider these charges to be reflective of ongoing operating results.

LED business restructuring charges or gains. In June 2015, Cree's board of directors approved a plan to restructure the LED business. The restructuring which was completed during Cree's second quarter of fiscal 2016 reduced excess capacity and overhead in order to improve the cost structure moving forward. The components of the restructuring include the planned sale or abandonment of certain manufacturing equipment, facility consolidation and the elimination of certain positions. Because these charges relate to assets which have been retired prior to the end of their estimated useful lives and severance costs for eliminated positions, Cree does not consider these charges to be reflective of ongoing operating results. Similarly, Cree does not consider realized gains on the sale of assets relating to the restructuring to be reflective of ongoing operating results.

Net changes associated with equity method investments. The Company's common stock ownership investment in Lextar Electronics Corporation is accounted for under the equity method utilizing the fair value option. As such, changes in fair value are recognized in income, including fluctuations due to the exchange rate between the New Taiwan Dollar and the United States Dollar. Cree excludes the impact of these gains or losses from its non-GAAP measures because they are non-cash impacts that Cree does not believe are reflective of ongoing operating results. Additionally, Cree excludes the impact of dividends received on its Lextar investment as Cree does not believe it is reflective of ongoing operating results.

Recognition of deferred IPO (Initial Public Offering) costs. The Company has recognized an expense for previously deferred IPO costs due to the delay in the anticipated timing of the planned initial public offering of Wolfspeed, our Power and RF Products segment, as required by SEC guidance. Cree excludes the impact of this expense as Cree does not consider this charge to be reflective of ongoing operating results.

Income tax effects of the foregoing non-GAAP items. This amount is used to present each of the amounts described above on an after-tax basis consistent with the presentation of non-GAAP net income.

Cree expects to incur stock-based compensation expense, amortization or impairment of acquisition-related intangibles and net changes associated with equity method investments in future periods, including income taxes associated with all of the foregoing. In addition to the non-GAAP measures discussed above, Cree also uses free cash flow as a measure of operating performance. Free cash flow represents operating cash flows less net purchases of property and equipment and patent and licensing rights. Cree considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property and equipment, which can then be used to, among other things, invest in Cree's business, make strategic acquisitions, strengthen the balance sheet and repurchase stock. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period.

CREE, INC.

Unaudited Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except per share amounts and percentages)

   

Non-GAAP Gross Margin

 
Three Months Ended Nine Months Ended
March 27,
2016
  March 29, 2015* March 27,
2016
  March 29, 2015*
GAAP gross profit $ 109,033 $ 125,148 $ 374,051 $ 397,229
GAAP gross margin percentage 29.7 % 30.6 % 30.5 % 31.8 %
Adjustment:
Stock-based compensation expense 3,077   3,158   $ 9,224   $ 9,511  
Non-GAAP gross profit $ 112,110   $ 128,306   $ 383,275   $ 406,740  
Non-GAAP gross margin percentage 30.6 % 31.3 % 31.2 % 32.5 %
 

* As revised to reflect the correction of an immaterial error. For additional information,

see the Company's Form 10-Q for the quarterly period ended March 27, 2016 to be filed with

the Securities and Exchange Commission on April 27, 2016.

Non-GAAP Operating Income

  Three Months Ended   Nine Months Ended
March 27,
2016
 

March 29,

2015*

March 27,
2016
 

March 29,

2015*

GAAP operating (loss) income $ (4,541 ) $ 1,257 $ (5,680 ) $ 22,381
GAAP operating income percentage (1.2 )% 0.3 % (0.5 )% 1.8 %
Adjustments:
Stock-based compensation expense:
Cost of revenue, net 3,077 3,158 9,224 9,511
Research and development 3,694 4,212 10,554 12,795
Sales, general and administrative 8,084   8,694   24,538   26,954  
Total stock-based compensation expense 14,855 16,064 44,316 49,260

Amortization or impairment of acquisition-related

intangibles

7,318 6,749 21,442 19,743
Asset retirement charges 1,744 3,139
LED business restructuring charges (gains) (1,139 ) 17,576
Recognition of deferred IPO costs     1,810    
Total adjustments to GAAP operating income 21,034   24,557   85,144   72,142  
Non-GAAP operating income $ 16,493   $ 25,814   $ 79,464   $ 94,523  
Non-GAAP operating income percentage 4.5 % 6.3 % 6.5 % 7.6 %
 

* As revised to reflect the correction of an immaterial error. For additional information, see the

Company's Form 10-Q for the quarterly period ended March 27,2016 to be filed with the Securities and

Exchange Commission on April 27, 2016.

 

Non-GAAP Non-Operating Income, net

   
Three Months Ended Nine Months Ended
March 27,
2016
  March 29,
2015
March 27,
2016
  March 29,
2015
GAAP non-operating income (loss), net $ 717 $ (866 ) $ (14,075 ) $ 3,766
Adjustment:
Net changes associated with equity method investments 210   2,224   15,892   3,701
Non-GAAP non-operating income, net $ 927   $ 1,358   $ 1,817   $ 7,467

Non-GAAP Net Income

   

 

Three Months Ended Nine Months Ended
March 27,
2016
 

March 29,

2015*

March 27,
2016
 

March 29,

2015*

GAAP net (loss) income $ 152 $ 476 $ (10,895 ) $ 23,408
Adjustments
Stock-based compensation expense 14,855 16,064 44,316 49,260

Amortization or impairment of acquisition-related

 intangibles

7,318 6,749 21,442 19,743
Net changes associated with equity method investments 210 2,224 15,892 3,701
Asset retirement charges 1,744 3,139
LED business restructuring charges (gains) (1,139 ) 17,576
Recognition of deferred IPO costs     1,810    

Total adjustments to GAAP net income before

 provision for income taxes

21,244 26,781 101,036 75,843
Income tax effect ** (4,453 ) (2,530 ) (22,109 ) (8,582 )
Non-GAAP net income $ 16,943   $ 24,727   $ 68,032   $ 90,669  
 
Earnings per share
Non-GAAP diluted net income per share $ 0.17 $ 0.22 $ 0.67 $ 0.78
 
Shares used in diluted net income per share calculation
Non-GAAP shares used 101,221 111,590 102,157 116,304
 

* As revised to reflect the correction of an immaterial error. For additional information, see the Company's Form

10-Q for the quarterly period ended March 27, 2016 to be filed with the Securities and Exchange Commission on April 27, 2016.

**Estimated income tax effect is based upon the Company's overall consolidated effective tax rate for the given period.

 

Free Cash Flow

   
Three Months Ended Nine Months Ended
March 27,
2016
  March 29,
2015
March 27,
2016
  March 29,
2015
Cash flows from operations $ 14,967 $ 65,647 $ 138,763 $ 93,699
Less: PP&E spending (17,888 ) (44,902 ) (99,692 ) (158,277 )
Less: Patents spending (3,406 ) (4,946 ) (11,034 ) (14,550 )
Total free cash flow $ (6,327 ) $ 15,799   $ 28,037   $ (79,128 )

Cree, Inc.
Raiford Garrabrant, Director, Investor Relations
Phone: 919-407-7895, Fax: 919-407-5615
investorrelations@cree.com

Source: Cree, Inc.

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