Cree Announces Preliminary Third Quarter Fiscal 2020 Results and Provides Business Update
Revenue for the third quarter of fiscal 2020 is expected to be approximately
Cree CEO
The Company will provide a more detailed review of its business when it reports its third quarter fiscal 2020 results on
Lowe continued, “Our strong balance sheet allows us to navigate the current environment while maintaining capital expenditure plans, including the construction of our new facilities in
Q3 FY2020 |
Preliminary Results |
Prior Outlook Guidance |
Revenue |
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Wolfspeed revenue |
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LED revenue |
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Non-GAAP net loss |
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Non-GAAP loss per diluted share |
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(1) For a reconciliation to GAAP net loss outlook range, refer to the Company's most recent quarterly earnings release, furnished as Exhibit 99.1 to the Company's Current Report on Form 8-K dated |
About
Cree is an innovator of Wolfspeed® power and radio frequency (RF) semiconductors and lighting class LEDs. Cree’s Wolfspeed product families include silicon carbide materials, power-switching devices and RF devices targeted for applications such as electric vehicles, fast charging inverters, power supplies, telecom and military and aerospace. Cree’s LED product families include blue and green LED chips, high-brightness LEDs and lighting-class power LEDs targeted for indoor and outdoor lighting, video displays, transportation and specialty lighting applications.
For additional product and Company information, please refer to www.cree.com.
Non-GAAP Financial Measures:
This press release highlights the Company's preliminary financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain costs, charges and expenses that are excluded from non-GAAP results. By publishing 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. 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 preliminary non-GAAP net loss to its most directly comparable GAAP measure, preliminary GAAP net loss, 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 Cree’s actual results to differ materially from those indicated in the forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our final results for the third quarter of fiscal 2020, our expectations about the opportunities for silicon carbide, our continued operations during the COVID-19 pandemic and our plans for capital expenditures and increased capacity. Actual results could differ materially due to a number of factors, including risks relating to the COVID-19 pandemic, including but not limited to, the risk of new and different government restrictions that limit our ability to do business, the risk of infection in our workforce and subsequent impact on our ability to conduct business, the risk that our supply chain or customer demand may be negatively impacted and the potential for costs associated with our operations during the third quarter and future quarters to be greater than we anticipate as a result of all of these factors; the risk that the economic and political uncertainty caused by the tariffs imposed by
Cree® and Wolfspeed® are registered trademarks of
Non-GAAP Measures of Financial Performance
Reconciliation to the nearest GAAP measure of non-GAAP net loss included in this press release can be found in the table included with this press release.
Non-GAAP net loss presented in this press release is 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, this non-GAAP measure is 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. This non-GAAP measure should only be used to evaluate Cree's results of operations in conjunction with the corresponding GAAP measure.
Cree believes that non-GAAP net loss, when shown in conjunction with the corresponding GAAP measure, 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 net loss 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 the items listed below and the income tax effects 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.
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.
Factory optimization restructuring and start-up costs. In
Accretion on convertible notes. In
Net changes in fair value of our Lextar investment. The Company's common stock ownership investment in Lextar Electronics Corporation is accounted for 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
Project, transformation, transition and transaction costs. The Company has incurred professional services fees and other costs associated with acquisitions and divestitures, as well as for internal transformation programs designed to improve its operating margins and change the manner in which business is conducted. Additionally, as a result of the sale of the Lighting Products business unit, the Company is providing certain IT services under a transition services agreement which will not be reimbursed. Cree excludes the costs of these services because Cree believes they are not reflective of the ongoing operating results of Cree's business.
Income tax adjustment. This amount reconciles GAAP tax expense (benefit) to a calculated non-GAAP tax expense (benefit) utilizing a non-GAAP tax rate. The non-GAAP tax rate estimates an appropriate tax rate if the listed non-GAAP items were excluded. This reconciling item adjusts non-GAAP net (loss) income to the amount it would be if the calculated non-GAAP tax rate was applied to non-GAAP (loss) income before taxes.
Cree may incur some of these same expenses, including income taxes associated with these expenses, in future periods.
Preliminary Third Quarter Fiscal 2020 Results Unaudited GAAP to Non-GAAP Reconciliation |
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Three Months Ended |
(in millions of |
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Preliminary GAAP net loss range |
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( |
Adjustments: |
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Stock-based compensation expense |
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11 |
Amortization or impairment of acquisition-related intangibles |
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4 |
Factory optimization restructuring and start-up costs |
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3 |
Accretion on convertible notes |
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6 |
Net change in the fair value of Lextar investment |
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19 |
Project, transformation, transaction and transition costs |
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2 |
Total adjustments to GAAP net loss before provision for income taxes |
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45 |
Income tax adjustment |
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3 |
Preliminary Non-GAAP net loss range |
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( |
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Vice President, Investor Relations
Phone: 919-407-4820
investorrelations@cree.com
Source: