Wolfspeed (WOLF) 8-K Cree Reports Financial Results for the Third Quarter of

Exhibit 99.1

FOR IMMEDIATE RELEASEPress Release

Contact:Raiford Garrabrant

Director, Investor Relations

Cree, Inc.

raiford_garrabrant@cree.com

(T) 919-313-5397

(F) 919-313-5615

CREE REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER OF

FISCAL 2006

Record Revenue of $107.7 Million from Continuing Operations

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 compensationexpense 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 $63,430,000, 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.”

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Financial Highlights:

Ø   Net income from continuing operations for the third quarter was $24,294,000, or $0.31 per share.

Ø   Gross profit from continuing operations was 48% of revenue.

Ø   Operating profit from continuing operations was 24% of revenue.

Ø   Cash flow from operations was $35 million.

Ø   Cash and investments equaled $367 million.

Ø   Accounts receivable from continuing operations of $58 million represented days sales outstanding (DSO) of 41. DSO is calculated using our trailing monthly revenue profile.

Ø   Inventory from continuing operations of $29 million represented 46 days of inventory (DOI).

Business Outlook:

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.

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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 production 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.

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CREE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
	Three Months Ended				Nine Months Ended
		3/26/2006		3/27/2005		3/26/2006			3/27/2005
		(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
Product revenue	$	100,378	$	90,279	$	295,382		$	269,084
Contract revenue		7,326		5,475		20,864			17,191
Total revenue		107,704		95,754		316,246			286,275
Cost of product revenue		50,946		38,567		145,634			114,652
Cost of contract revenue		5,423		4,260		14,880			13,604
Total cost of revenue		56,369		42,827		160,514			128,256
Gross profit		51,335		52,927		155,732			158,019
Operating expenses:
Research and development		13,333		10,893		40,910			30,788
Sales, general and administrative		11,826		8,367		33,395			22,324
Loss on disposal of property and equipment		208		277		908			603
Operating expenses		25,367		19,537		75,213			53,715
Income from operations		25,968		33,390		80,519			104,304
Non-operating income:
Gain on investments in securities		-		2,808		583			935
Other non-operating income		38		-		45	��		4
Interest income, net		3,482		1,403		8,777			3,691
Income from continuing operations before income taxes		29,488		37,601		89,924			108,934
Income tax expense		5,194		14,801		22,342			32,457
Net income from continuing operations		24,294		22,800		67,582			76,477
(Loss) from discontinued operations, net of related tax
benefit		(294)		(2,117)		(4,152)			(6,345)
Net income	$	24,000	$	20,683	$	63,430		$	70,132
Earnings per share:
Diluted
Income from continuing operations	$	0.31	$	0.29	$	0.87		$	0.99
(Loss) from discontinued operations	$	-	$	(0.02)	$	(0.06)		$	(0.08)
Net income	$	0.31	$	0.27	$	0.81		$	0.91
		��
Weighted average shares of common
stock outstanding, basic		76,464		75,694		76,011			74,860
Weighted average shares of common
stock outstanding, diluted		78,471		77,428		77,943			77,256

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CREE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
		3/26/2006		6/26/2005
		(Unaudited)		(Audited)
Assets:
Current assets:
Cash and equivalents and short term investments	$	251,016	$	173,468
Accounts receivable, net		58,335		34,476
Inventory		28,759		30,045
Deferred income taxes		10,420		23,531
Income tax receivable		-		9,900
Prepaid insurance		3,334		2,199
Other current assets and prepaid expenses		7,688		5,593
Assets of discontinued operations		274		3,149
Total current assets		359,826		282,361
Property, plant and equipment, net		337,564		340,689
Long-term investments held to maturity		115,845		103,791
Patents and license rights, net		29,834		28,667
Marketable securities available for sale		32,699		20,937
Other assets		3,402		963
Total assets	$	879,170	$	777,408
Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable trade	$	23,531	$	23,153
Accrued salaries and wages		8,663		8,934
Other accrued expenses		5,621		3,312
Deferred revenue		1,410		-
Liabilities of discontinued operations		938		637
Total current liabilities		40,163		36,036
Long term liabilities:
Deferred income taxes		32,747		28,454
Long term liabilities of discontinued operations		2,120		-
Total long term liabilities		34,867		28,454
Shareholders' Equity:
Common stock		96		94
Additional paid in capital		568,296		548,342
Comprehensive income		14,036		6,200
Retained earnings		221,712		158,282
Total shareholders' equity		804,140		712,918
Total liabilities and shareholders' equity	$	879,170	$	777,408

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