Cree Reports Record Quarterly Revenue and Net Income for the Third Quarter of Fiscal Year 2010
DURHAM, N.C., April 20, 2010 Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced record revenue of $234.1 million for its third quarter of fiscal 2010, ended March 28, 2010. This represents a 78% increase compared to revenue of $131.1 million reported for the third fiscal quarter last year and a 17% increase compared to the second quarter of fiscal 2010. GAAP net income for the third quarter increased more than tenfold year-over-year to $44.6 million, or $0.41 per diluted share, compared to GAAP net income of $4.0 million, or $0.05 per diluted share, for the third quarter of fiscal 2009. On a non-GAAP basis, net income for the third quarter of fiscal 2010 increased 333% year-over-year to $51.3 million, or $0.47 per diluted share, compared to non-GAAP net income for the third quarter of fiscal 2009 of $11.8 million or $0.13 per diluted share.
"We achieved record revenue and net income again in Q3 due to a combination of strong LED demand and solid execution with our factory ramp," stated Chuck Swoboda, Cree chairman and CEO. "The LED lighting revolution continues to gain momentum, and we remain focused on extending our leadership position while we build the scale, cost structure and channels to win in the market."
Q3 2010 Financial Metrics:
* Cash and investments increased $36.9 million from Q2 of fiscal 2010 to $991.0 million.
* Cash flow from operations was $72.9 million. Free cash flow (cash flow from operations less capital expenditures) was $6.9 million as we spent $66.0 million on capital expenditures to support our capacity expansion.
* Accounts receivable (net) increased $12.4 million from Q2 of fiscal 2010 to $125.8 million, resulting in days sales outstanding of 48, a decrease of 3 days from Q2 of fiscal 2010.
* Inventory (net) increased $13.7 million from Q2 of fiscal 2010 to $107.0 million and represents 79 days of inventory, a decrease of 1 day from Q2 of fiscal 2010.
Recent Business Highlights:
* Announced a breakthrough new lighting-class LED platform, the XLamp XM, which delivers record-breaking efficiency of 160 lumens per watt at 350 mA
* Achieved industry-best reported R&D results of 208 lumens per watt from a white high-power LED
* Introduced the Cree LED Module LMR4, the first of a new LED module product line that brings Cree TrueWhite™ technology to lighting manufacturers
* Announced the Cree CR6™ product, a new 6-inch LED downlight designed for the residential market
* Introduced the XLamp® MPL EasyWhite™ LED, a breakthrough new lighting-class LED that can obsolete energy-inefficient light bulbs
* Announced that Cree LED lamps have been selected for deployment in the Hyatt Regency Grand Cypress Resort in Orlando, Florida
For its fourth quarter of fiscal 2010 ending June 27, 2010, Cree targets revenue in a range of $255 million to $265 million with GAAP net income of $46 million to $49 million, or $0.41 to $0.44 per diluted share. Non-GAAP net income is targeted to increase quarter-over-quarter to a range of $53 million to $56 million, or $0.48 to $0.51 per diluted share, based on an estimated 110.7 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles of $0.02 per diluted share, and stock-based compensation expense of $0.05 per diluted share.
Quarterly Conference Call:
Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the fiscal third quarter 2010 results and the fiscal fourth quarter 2010 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 on to Cree's website at www.cree.com and go to "Investor Relations Overview" for webcast details. The call will be archived and available on the website through May 4, 2010.
Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available in the "Investor Relations" section of Cree's website, under "Financial Metrics," "Quarter ending March 28, 2010," at www.cree.com.
About Cree, Inc.
Cree is leading the LED lighting revolution and setting the stage to obsolete the incandescent light bulb through the use of energy-efficient, environmentally friendly LED lighting. Cree is a market-leading innovator of lighting-class LEDs, LED lighting, and semiconductor solutions for backlighting, wireless and power applications.
Cree's product families include LED fixtures and bulbs, blue and green LED chips, high-brightness LEDs, lighting-class power LEDs, power-switching devices and radio-frequency/wireless devices. Cree solutions are driving improvements in applications such as general illumination, electronic signs and signals, variable-speed motors and wireless communications.
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. Actual results, including with respect to our targets and prospects, could differ materially due to a number of factors, including risks associated with the ramp-up of production of our new products, as well as production at our new Huizhou facility; the risk that, due to the complexity of our manufacturing processes, 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; ongoing uncertainty in global economic conditions 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, in response to tight credit and negative financial news; our ability to complete development and commercialization of products under development, such as our pipeline of brighter LED chips, LED components and LED lighting products; our ability to lower costs; increasing price competition in key markets; 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 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, 2009, and subsequent reports filed with the SEC. Except as required under the U.S. federal securities laws and the rules and regulations of the SEC, Cree disclaims any 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, the Cree logo and XLamp are registered trademarks, and CR6, Cree TrueWhite and EasyWhite are trademarks, of Cree, Inc.
Director, Investor Relations
Download Consolidated Statements of Income (pdf)
Download Consolidated Balance Sheets (pdf)
Download Non-GAAP Measures of Financial Performance (pdf)
Download Reconciliation of GAAP to Non-GAAP Measures (pdf)