Exhibit 99.1
 
 
For Immediate Release
Press Release
 
Contact:
Raiford Garrabrant
 
Cree, Inc.
 
Director, Investor Relations
 
Ph: 919-287-7895
 
Fax: 919-313-5615
 
Email: raiford_garrabrant@cree.com
 

Cree Reports Record Revenue for the Fourth Quarter and Fiscal Year 2009
 
Annual Revenue Increased 15% to $567 Million

DURHAM, N.C., August 11, 2009
– Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced record revenue of $148.1 million for its fourth quarter of fiscal 2009, ended June 28, 2009.  This represents a 9% increase compared to revenue of $135.9 million reported for the fourth fiscal quarter last year and a 13% increase compared to the fiscal third quarter of 2009.  GAAP net income for the fourth quarter was $9.7 million, or $0.11 per diluted share, compared to GAAP net income of $8.4 million, or $0.09 per diluted share, for the fourth quarter of fiscal 2008. On a non-GAAP basis, net income for the fourth quarter of fiscal 2009 was $16.3 million, or $0.18 per diluted share, compared to non-GAAP net income for the fourth quarter of fiscal 2008 of $14.5 million or $0.16 per diluted share. Cree generated $43.0 million of operating cash flow and $28.3 million of free cash flow (cash flow from operations less capital expenditures) during the fourth quarter.

For fiscal year 2009, Cree reported revenue of $567.3 million, which represents a 15% increase compared to revenue of $493.3 million for fiscal 2008.  GAAP net income was $30.3 million, or $0.34 per diluted share, compared to $33.4 million, or $0.38 per diluted share for fiscal 2008.  GAAP net income for fiscal 2008 included a benefit of $0.12 per diluted share related to a gain on the sale of investments.  On a non-GAAP basis, net income for fiscal year 2009 was $59.2 million, or $0.66 per diluted share, compared to $47.2 million, or $0.54 per diluted share, for fiscal 2008.  Cree generated $177.9 million of operating cash flow and $122.6 million of free cash flow during fiscal 2009.
 
“Our strong Q4 results were an outstanding finish to a very good year and reflect the success of our strategy to drive growth in LEDs and LED lighting applications,” stated Chuck Swoboda, Cree Chairman and CEO.  “Entering fiscal 2010, our Q1 backlog is very strong as we see growing demand across our LED product lines.  We are well positioned to benefit from the worldwide growth in LED lighting. As such, we continue to invest in the new products, channels and technical support needed to accelerate the LED lighting revolution.”
 
 
 
 

 
 
Recent Business Highlights:

»  
Introduced the LRP-38, the revolutionary PAR38 LED bulb that delivers the same vibrant color as halogen with 75 percent less energy.
 
»  
Announced that Chuck Swoboda, Cree chairman and CEO, joined President Obama at the White House to discuss innovation and the latest developments in energy-efficient technologies.

»  
Announced that North Carolina’s first eco-friendly McDonald’s is 97% lit with LEDs, and includes Cree’s entire line of LED fixtures and lamps.
 
»  
Welcomed Fairview, Texas, and Gwangju, South Korea, to the LED City® Program.
 
»  
Demonstrated the XLamp® XP-G, the industry’s brightest and highest-efficiency lighting-class LED.
 
 
Q4 2009 Financial Metrics:
 
     
Fourth Quarter
(in thousands, except per
share amounts)
   
           
     
2009
2008
Change
   
Net revenue
 $148,110
$135,925
$12,185
9%
 
GAAP
       
   
Gross Margin
39.6%
33.7%
 
 
   
Net Income
$9,695
$8,446
$1,249
15%
   
Earnings per diluted share
$   0.11
$   0.09
$  0.02
22%
 
Non-GAAP
       
   
Gross Margin
40.3%
34.2%
 
 
   
Net Income
$16,336
$14,501
$1,835
13%
   
Earnings per diluted share
$    0.18
$    0.16
$  0.02
13%
 
 
»  
Cash and investments increased $42.3 million to $447.2 million, with cash flow from operations of $43.0 million and free cash flow of $28.3 million.

»  
Accounts receivable (net) increased $0.1 million from Q3 of fiscal 2009 to $103.0 million, resulting in days sales outstanding of 63, a decrease of 8 days from Q3 of fiscal 2009.

»  
Inventory (net) increased $1.3 million from Q3 of fiscal 2009 to $78.8 million and represents 79 days of inventory, a decrease of 4 days from Q3 of fiscal 2009.
 
 
 
- 2 -

 
 
Business Outlook:
 
For its first quarter of fiscal 2010 ending September 27, 2009, Cree targets revenue in a range of $160 million to $166 million with GAAP earnings of $0.14 to $0.16 per diluted share and non-GAAP earnings of $0.21 to $0.23 per diluted share, based on an estimated 91 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 fourth quarter 2009 results and the fiscal first 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 August 25, 2009.
 
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 June 28, 2009”, 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 solutions, and semiconductor solutions for wireless and power applications.
 
Cree’s product families include recessed LED down lights, lighting-class power LEDs, high-brightness LEDs, blue and green LED chips, power-switching devices and radio-frequency/wireless devices. Cree solutions are driving improvements in applications such as general illumination, backlighting, 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, gains and losses 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.
 
 
 
- 3 -

 

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 current 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 tighter 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 retrofit solutions; our ability to lower costs; increasing price competition in key markets; the risk that, due to the complexity of our manufacturing processes and transition of production to larger wafers, 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, as well as production at our Huizhou facility and subcontractors; 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 our recent acquisitions; 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 29, 2008, 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, XLamp and LED City are registered trademarks of Cree, Inc.

 
 
- 4 -

 
 
CREE, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
(in thousands, except per share data)
 
                         
                         
    Three Months Ended     Year Ended  
   
June 28, 2009
   
June 29, 2008
   
June 28, 2009
   
June 29, 2008
 
    (Unaudited)     (Unaudited)  
                         
Product revenue
  $ 143,672     $ 129,443     $ 542,837     $ 464,907  
Contract revenue
    4,438       6,482       18,836       28,389  
Up-front license fees
    -       -       5,582       -  
Total revenue
    148,110       135,925       567,255       493,296  
                                 
Cost of product revenue
    85,362       84,897       339,038       304,663  
Cost of contract revenue
    4,052       5,286       15,805       22,806  
Up-front license fees
    -       -       506       -  
Total cost of revenue
    89,414       90,183       355,349       327,469  
                                 
Gross profit
    58,696       45,742       211,906       165,827  
Gross margin percentage
    39.6 %     33.7 %     37.4 %     33.6 %
                                 
Operating expenses:
                               
Research and development
    18,576       15,763       71,363       58,846  
Sales, general and administrative
    21,125       19,158       86,929       76,607  
Amortization of acquisition related intangibles
    4,062       4,806       16,248       17,127  
Loss on disposal or impairment of long-lived assets
    3,471       719       6,776       1,206  
Total operating expenses
    47,234       40,446       181,316       153,786  
                                 
Operating income
    11,462       5,296       30,590       12,041  
Operating income percentage
    7.7 %     3.9 %     5.4 %     2.4 %
                                 
Non-operating income:
                               
Gain on sale of investments, net
    -       -       78       14,117  
Interest and other non-operating income, net
    1,650       2,699       8,999       14,891  
Income from continuing operations before income taxes
    13,112       7,995       39,667       41,049  
                                 
Income tax expense
    3,277       1,352       9,017       9,237  
Income from continuing operations
    9,835       6,643       30,650       31,812  
                                 
(Loss) income from discontinued operations, net of related tax effect
    (140 )     1,803       (325 )     1,627  
Net income
  $ 9,695     $ 8,446     $ 30,325     $ 33,439  
                                 
Diluted earnings per share:
                               
Income from continuing operations
  $ 0.11     $ 0.07     $ 0.34     $ 0.36  
(Loss) income from discontinued operations
  $ (0.00 )   $ 0.02     $ (0.00 )   $ 0.02  
Net income
  $ 0.11     $ 0.09     $ 0.34     $ 0.38  
                                 
Weighted average shares of common
                               
   stock outstanding, diluted
    89,983       89,615       89,081       88,077  

 
 
- 5 -

 
 
CREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
           
           
   
June 28, 2009
 
June 29, 2008
 
 
 
(Unaudited)
     
Assets:          
Current assets:
         
Cash, cash equivalents and short term investments
  $ 417,653   $ 312,428  
Accounts receivable, net
    103,035     110,376  
Inventory, net
    78,841     80,161  
Income taxes receivable
    1,526     9,825  
Deferred income taxes
    10,022     4,578  
Prepaid expenses and other current assets
    18,359     13,000  
Assets of discontinued operations
    -     2,600  
Total current assets
    629,436     532,968  
               
Property and equipment, net
    320,110     348,013  
Long-term investments
    29,557     58,604  
Intangible assets, net
    113,328     125,037  
Goodwill
    304,791     244,003  
Other assets
    7,345     4,782  
Total assets
  $ 1,404,567   $ 1,313,407  
               
Liabilities and Shareholders' Equity:
             
Current liabilities:
             
Accounts payable, trade
  $ 38,770   $ 37,402  
Accrued salaries and wages
    16,732     13,471  
Income taxes payable
    8,139     5,314  
Deferred income taxes
    122     -  
Other current liabilities
    7,868     7,938  
Contingent payment due related to COTCO acquisition
    57,050     60,000  
Liabilities of discontinued operations
    -     550  
Total current liabilities
    128,681     124,675  
               
Long-term liabilities:
             
Deferred income taxes
    42,752     38,048  
Other long-term liabilities
    8,386     4,199  
Long-term liabilities of discontinued operations
    -     745  
Total long-term liabilities
    51,138     42,992  
               
Shareholders' Equity:
             
Common stock
    112     110  
Additional paid-in-capital
    857,383     811,015  
Accumulated other comprehensive income
    11,236     8,923  
Retained earnings
    356,017     325,692  
Total shareholders' equity
    1,224,748     1,145,740  
Total liabilities and shareholders' equity
  $ 1,404,567   $ 1,313,407  
 
 
 
- 6 -

 
 
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 net income, non-GAAP earnings per diluted share, non-GAAP gross margin, and free cash flow.

Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release can be found in the tables included with this press release.

These non-GAAP measures 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 acquired intangible assets, impairment of goodwill, gain on the sale of Color Kinetics Inc.’s common stock, personal property tax adjustments related to prior years 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 and employee stock purchases under Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment.” Cree excludes stock-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses that Cree does not believe are reflective of ongoing operating results.

Amortization or impairment of acquired intangible assets and impairment of goodwill. Cree incurs amortization or impairments of acquired intangible assets and goodwill in connection with acquisitions. Cree excludes these items because they arise from Cree’s prior acquisitions and have no direct correlation to the current operating results of Cree’s business.

Gain on the sale of 500,000 shares of Color Kinetics Inc. common stock.  Cree excludes this item because it arose from Cree’s prior investments and has no direct correlation to the current operating results of Cree’s business.

Personal property assessment of $1.0 million related to the audit of our 2002 through 2007 property tax returns.  Cree excludes this item because it arose from prior investments and has no direct correlation to the current operating results of Cree’s business.

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 of acquired intangible assets and may also incur impairments of acquired intangible assets, impairments of goodwill, gains or losses on the sale of investments in certain companies and significant non-income tax adjustments 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. 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.
 

 
- 7 -

 
 
CREE, INC.
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except per share amounts)
(Unaudited)
                         
   
Three Months Ended
   
Year Ended
 
    June 28, 2009     June 29, 2008     June 28, 2009     June 29, 2008  
                         
GAAP Gross Profit
  $ 58,696     $ 45,742     $ 211,906     $ 165,827  
GAAP Gross Margin
    39.6 %     33.7 %     37.4 %     33.6 %
    Adjustment:
                               
Stock-based compensation expense
    1,052       703       4,250       2,913  
Non-GAAP Gross Profit
  $ 59,748     $ 46,445     $ 216,156     $ 168,740  
Non-GAAP Gross Margin
    40.3 %     34.2 %     38.1 %     34.2 %
                                 
   
Three Months Ended
   
Year Ended
 
    June 28, 2009     June 29, 2008     June 28, 2009     June 29, 2008  
                                 
GAAP net income
  $ 9,695     $ 8,446     $ 30,325     $ 33,439  
    Adjustments:
                               
Stock-based compensation expense
    5,320       4,672       21,112       15,985  
Amortization of acquisition-related intangible assets
    4,062       4,806       16,248       17,127  
Net gain on sale of certain patents related to the discontinued
                         
Cree Microwave segment
    -       (1,820 )     -       (1,820 )
Personal property assessment related to finalizing the
                         
audits of the Company's 2002 through 2007 property
                         
tax returns
    -       -       -       1,048  
Gain on sale of 500,000 shares of Color Kinetics
                               
Incorporated common stock
    -       -       -       (14,117 )
Total adjustments to GAAP income before provision
                               
for income taxes
    9,382       7,658       37,360       18,223  
Income tax effect
    (2,741 )     (1,603 )     (8,493 )     (4,510 )
Non-GAAP net income
    16,336       14,501       59,192       47,152  
Diluted net income per share:
                               
GAAP net income
  $ 0.11     $ 0.09     $ 0.34     $ 0.38  
Non-GAAP
  $ 0.18     $ 0.16     $ 0.66     $ 0.54  
Shares used in diluted net income per share calculation:
                               
GAAP net income
    89,983       89,615       89,081       88,077  
Non-GAAP
    89,983       89,615       89,081       88,077  
                                 
   
Three Months Ended
   
Year Ended
 
    June 28, 2009     June 29, 2008     June 28, 2009     June 29, 2008  
Free Cash Flows
                               
Cash flow from operations
  $ 43,010     $ 36,682     $ 177,919     $ 102,807  
Less:  PP&E CapEx spending
    14,689       18,199       55,283       55,741  
Total Free Cash Flows
  $ 28,321     $ 18,483     $ 122,636     $ 47,066  
                                 
 
Additional Financial Information
(in thousands)
(Unaudited)
                                 
   
Three Months Ended
   
Year Ended
 
    June 28, 2009     June 29, 2008     June 28, 2009     June 29, 2008  
Stock-Based Compensation Expense
                               
Cost of sales
  $ 1,052     $ 703     $ 4,250     $ 2,913  
                                 
Research and development
    1,172       1,331       5,267       4,362  
Sales, general and administrative
    3,096       2,638       11,595       8,710  
Total stock-based compensation in operating expense
    4,268       3,969       16,862       13,072  
                                 
Total Stock-Based Compensation Expense
  $ 5,320     $ 4,672     $ 21,112     $ 15,985  
                                 
                                 
    June 28, 2009     March 29, 2009     September 28, 2008     June 29, 2008  
Cash, Cash Equivalents and Investments
                               
Cash and cash equivalents
  $ 290,154     $ 244,667     $ 177,444     $ 261,633  
Short term investments
    127,499       122,051       109,054       50,795  
Long term investments
    29,557       38,159       52,566       58,604  
Total Cash, Cash Equivalents and Investments
  $ 447,210     $ 404,877     $ 339,064     $ 371,032  
 
 
 
- 8 -

 

The following information was filed by Cree Inc (CREE) on Tuesday, August 11, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one year to another to evaluate Cree Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-K Annual Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Cree Inc.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account