EXHIBIT 99.01
FOR IMMEDIATE RELEASE NEWS RELEASE
Contact: Fran Barsky
Manager, Investor Relations and
Corporate Communications
Cree, Inc.
(T) 919-313-5397
(F) 919-313-5615
Fran_Barsky@Cree.com
CREE REPORTS RECORD REVENUE FOR
SECOND QUARTER OF FISCAL YEAR 2004
Reported EPS of $0.17 Per Diluted Share
Generated $52.4 Million in Cash From Operations
Durham, NC, January 15, 2004 - Cree, Inc. (Nasdaq: CREE) today reported revenue
for its second quarter of fiscal year 2004 of $72,684,000, a 28 percent increase
over the $56,727,000 reported in the comparable quarter in fiscal 2003. Net
income for the second quarter increased 45 percent to $13,007,000, or $0.17 per
diluted share, compared to $8,996,000, or $0.12 per diluted share, as reported
for the second quarter of fiscal 2003. Overall gross margin for the second
quarter increased to 47 percent of revenue as compared to 43 percent reported in
the first quarter of fiscal 2004, while net margin increased to 18 percent of
revenue.
For the six-month period ended December 28, 2003, Cree reported revenue of
$138,895,000, an increase of 32 percent over the $105,539,000 reported for the
comparable period in fiscal year 2003. Net income for the six-month period
increased 70 percent to $21,886,000, or $0.29 per diluted share, compared to
$12,879,000, or $0.17 per share, in the year ago period.
Chuck Swoboda, Chief Executive Officer and President of Cree stated, "Our record
revenue and higher profitability were driven by strong LED sales as we benefited
from increased demand for LEDs in mobile phone applications. The combination of
a favorable product mix, reduced pricing pressure and improved operational
efficiencies resulted in a significant increase in product gross margin, which
drove our net income for the quarter to the highest level in several years. Our
cash position also grew significantly during the quarter as we generated a
record $52.4 million of cash from operations. As we begin the third quarter of
our fiscal year, we remain focused on our strategy of delivering
industry-leading new products and we now target an even stronger second half."
Business Outlook
Cree provided guidance for its third quarter of fiscal 2004 indicating that it
currently targets increased revenue in a range of $75 to $76 million with
earnings of $0.17 to $0.19 per diluted share. Cree also aims for gross margin to
be in a range of the mid to high 40's as a percentage of revenue with higher
research and development expenses to support the new product pipeline.
Cree will host a conference call at 5:00 p.m. Eastern Time today to review the
highlights of the second quarter fiscal 2004 results. 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 January 29, 2004.
Supplemental financial information is available under "Q2 '04 Financial Metrics"
in the "Investor Info" section of Cree's web site at
http://www.cree.com/about/share.htm.
Cree is an advanced semiconductor company that leverages its expertise in
silicon carbide (SiC), gallium nitride (GaN) and silicon (Si) materials
technology to produce new and enabling semiconductors. The products include
blue, green and ultraviolet (UV) light emitting diodes (LEDs), near UV lasers,
radio frequency (RF) and microwave devices, and power switching devices.
Targeted applications for these products include solid-state illumination,
optical storage, wireless infrastructure and power switching. For more
information on Cree, please visit www.cree.com.
The schedules attached to this release are an integral part of this 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
third quarter targets, could differ materially due to a number of factors,
including potential changes in demand; the risk that price stability, improved
operational efficiencies, and the favorable product mix we have recently
experienced will not continue; 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; risks associated with the ramp up of
our production for our new products; 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 pending securities and other litigation and SEC inquiry; 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 29, 2003 and subsequent
reports filed with the SEC.
Cree and the Cree logo are registered trademarks of Cree, Inc.
-- Tables Follow --
CREE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Six Months Ended
12/28/2003 12/29/2002 12/28/2003 12/29/2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Product revenue $ 66,585 $ 49,222 $125,748 $ 91,376
Contract revenue 6,099 7,505 13,147 14,163
----------- ----------- ----------- -----------
Total revenue 72,684 56,727 138,895 105,539
Cost of product sales 33,216 27,510 65,719 52,627
Cost of contract sales 5,623 5,677 11,115 10,666
----------- ----------- ----------- -----------
Total cost of sales 38,839 33,187 76,834 63,293
Gross profit 33,845 23,540 62,061 42,246
Operating expenses:
Research and development 8,336 7,667 16,662 14,231
Sales, general and administrative 7,869 6,474 15,781 14,300
Severance expense - - - 400
Loss on disposal of fixed assets 142 1,423 146 1,491
----------- ----------- ----------- -----------
Operating expenses 16,347 15,564 32,589 30,422
Gain on termination of supply agreement - 5,000 - 5,000
Income from operations 17,498 12,976 29,472 16,824
Non-operating income (expense):
(Loss) gain on investments in marketable securities - (2,067) - (2,067)
Other non operating income (expense) 407 (17) 410 (16)
Net interest income 945 1,265 1,837 2,663
----------- ----------- ----------- -----------
Income before income taxes 18,850 12,157 31,719 17,404
Income taxes 5,843 3,161 9,833 4,525
----------- ----------- ----------- -----------
Net income $ 13,007 $ 8,996 $ 21,886 $ 12,879
=========== =========== =========== ===========
Net income per share, diluted $ 0.17 $ 0.12 $ 0.29 $ 0.17
=========== =========== =========== ===========
Weighted average shares of common
stock outstanding, basic 74,206 73,051 74,190 72,899
Weighted average shares of common
stock outstanding, diluted 76,005 75,259 75,881 74,849
CREE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
Balance Sheet
12/28/2003
(Unaudited) 06/29/2003
----------- ----------
Assets:
Current assets:
Cash & equivalents & short term investments $ 154,684 $ 140,037
Accounts receivable, net 39,201 43,901
Inventory 16,756 17,674
Current portion of deferred taxes 1,863 1,863
Other current assets & prepaid expenses 4,402 5,880
----------- ----------
Total current assets 216,906 209,355
Property, plant & equipment, net 263,229 251,346
Long-term investments held to maturity 62,953 58,794
Long term portion deferred income taxes 13,504 20,934
Patents and license rights, net 11,036 7,146
Other assets 15,894 16,119
----------- ----------
Total assets $ 583,522 $ 563,694
=========== ==========
Liabilities & Shareholders' Equity:
Current liabilities:
Accounts payable trade $ 17,913 $ 14,916
Accrued salaries & other expenses 8,597 7,843
Deferred revenue 8,271 5,533
----------- ----------
Total current liabilities 34,781 28,292
Long term liabilities:
Other long term liabilities - 31
----------- ----------
Total long term liabilities - 31
Shareholders' Equity:
Common stock 92 92
Additional paid in capital 517,596 526,318
Deferred compensation (13) (218)
Retained earnings 31,066 9,179
----------- ----------
Total shareholders' equity 548,741 535,371
----------- ----------
Total liabilities & shareholders' equity $ 583,522 $ 563,694
=========== ==========
CREE, INC.
Operating Segment Information
(in thousands)
Three Months Ended Six Months Ended
12/28/2003 12/29/2002 12/28/2003 12/29/2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Revenue:
Cree* $ 70,701 $ 55,974 $135,861 $104,086
Cree Microwave 1,983 753 3,034 1,453
----------- ----------- ----------- -----------
Total revenue $ 72,684 $ 56,727 $138,895 $105,539
=========== =========== =========== ===========
Net income (loss) before income taxes:
Cree* $ 21,440 $ 11,819 $ 37,711 $ 22,338
Cree Microwave (2,590) 338 (5,992) (4,934)
----------- ----------- ----------- ----------
Total net income before income taxes $ 18,850 $ 12,157 $ 31,719 $ 17,404
=========== =========== =========== ==========
* Includes interest income and other segment operating results