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 AND EARNINGS FOR
THIRD QUARTER OF FISCAL YEAR 2004
Net Income Increased 42 Percent over Prior Year Period;
EPS $0.20 Per Diluted Share
Durham, NC, April 15, 2004 - Cree, Inc. (Nasdaq: CREE) today reported quarterly
revenue for its fiscal year 2004 third quarter of $77,113,000, a 28 percent
increase over the $60,223,000 reported in the comparable quarter in the year ago
period. Net income for the third quarter increased 42 percent to $15,089,000, or
$0.20 per diluted share, compared to $10,632,000, or $0.14 per diluted share, as
reported for the third quarter of fiscal 2003. Overall gross margin for the
third quarter increased to 50 percent of revenue compared to 47 percent of
revenue reported in the second quarter of fiscal 2004, while net margin
increased to 20 percent of revenue. Cash and investments increased to $241
million and cash flow from operations was $30.5 million during the third quarter
of fiscal 2004.
For the nine-month period ended March 28, 2004, Cree reported revenue of
$216,008,000, an increase of 30 percent over the $165,761,000 reported for the
comparable period in fiscal year 2003. Net income for the nine-month period
increased 57 percent to $36,975,000, or $0.49 per diluted share, compared to
$23,511,000, or $0.31 per diluted share, in the year ago period.
Chuck Swoboda, President and CEO of Cree stated, "Cree delivered excellent
revenue and earnings in the quarter led by continued strong demand for our LEDs.
Our decision to invest aggressively in R&D is paying off as new high brightness
products are driving the growth of our business. We have good visibility for Q4,
which allows us to target a strong finish to the fiscal year and puts us in a
good position to build on this momentum in 2005."
Business Outlook
Cree provided guidance for its fourth quarter of fiscal 2004 indicating that it
currently targets increased revenue in a range of $83 to $85 million with
earnings of $0.20 to $0.22 per diluted share
Cree will host a conference call at 5:00 p.m. Eastern Time today to review the
highlights of the third 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
April 30, 2004.
Supplemental financial information is available under "Q3 '04 Financial Metrics"
in the "Investor Info" section of Cree's web site at http://www.cree.com/News/
metrics.asp.
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 near 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
fourth 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; 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 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 Nine Months Ended
03/28/2004 03/30/2003 03/28/2004 03/30/2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Product revenue $ 71,383 $ 53,774 $ 197,131 $ 145,149
Contract revenue 5,730 6,449 18,877 20,612
----------- ----------- ----------- -----------
Total revenue 77,113 60,223 216,008 165,761
Cost of product sales 33,261 27,018 98,979 79,662
Cost of contract sales 5,021 5,158 16,136 15,824
----------- ---------- ----------- -----------
Total cost of sales 38,282 32,176 115,115 95,486
Gross profit 38,831 28,047 100,893 70,275
Operating expenses:
Research and development 10,534 8,138 27,196 22,369
Sales, general and administrative 7,888 6,712 23,670 20,993
Severance expense - - - 400
Loss on disposal of fixed assets 80 - 226 1,491
----------- ---------- ----------- -----------
Operating expenses 18,502 14,850 51,092 45,253
Gain on termination of supply agreement - - - 5,000
Income from operations 20,329 13,197 49,801 30,022
Non-operating income (expense):
(Loss) gain on investments in marketable securities (1) - - (2,067)
Other non operating income (expense) 598 (29) 1,007 (46)
Net interest income 942 1,199 2,779 3,863
----------- ---------- ----------- -----------
Income before income taxes 21,868 14,367 53,587 31,772
Income taxes 6,779 3,735 16,612 8,261
----------- ---------- ----------- -----------
Net income $ 15,089 $ 10,632 $ 36,975 $ 23,511
=========== ========== =========== ===========
Net income per share, diluted $ 0.20 $ 0.14 $ 0.49 $ 0.31
=========== ========== =========== ===========
Weighted average shares of common
stock outstanding, basic 74,050 73,266 74,143 73,022
Weighted average shares of common
stock outstanding, diluted 76,399 75,394 75,979 75,026
CREE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
Balance Sheet
03/28/2004
(Unaudited) 06/29/2003
----------- ----------
Assets:
Current assets:
Cash & equivalents & short term investments $ 179,425 $ 140,037
Accounts receivable, net 38,066 43,901
Inventory 17,124 17,674
Current portion of deferred taxes 1,863 1,863
Other current assets & prepaid expenses 6,239 5,880
----------- ----------
Total current assets 242,717 209,355
Property, plant & equipment, net 260,368 251,346
Long-term investments held to maturity 61,562 58,794
Long term portion deferred income taxes 7,045 20,934
Patents and license rights, net 11,602 7,146
Other assets 15,954 16,119
----------- ----------
Total assets $ 599,248 $ 563,694
=========== ==========
Liabilities & Shareholders' Equity:
Current liabilities:
Accounts payable trade $ 12,817 $ 14,916
Accrued salaries & other expenses 9,542 7,843
Deferred revenue 7,196 5,533
----------- ----------
Total current liabilities 29,555 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 523,446 526,318
Deferred compensation - (218)
Retained earnings 46,155 9,179
----------- ----------
Total shareholders' equity 569,693 535,371
----------- ----------
Total liabilities & shareholders' equity $ 599,248 $ 563,694
=========== ==========
CREE, INC.
OPERATING SEGMENT INFORMATION
(in thousands)
Three Months Ended Nine Months Ended
03/28/2004 03/30/2003 03/28/2004 03/30/2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Revenue:
Cree* $ 74,938 $ 59,579 $ 210,799 $ 163,664
Cree Microwave 2,175 644 5,209 2,097
----------- ----------- ----------- -----------
Total revenue $ 77,113 $ 60,223 $ 216,008 $ 165,761
=========== =========== =========== ===========
Net income (loss) before income taxes:
Cree* $ 24,149 $ 17,882 $ 61,861 $ 40,220
Cree Microwave (2,281) (3,515) (8,274) (8,448)
----------- ----------- ----------- -----------
Total net income before income taxes $ 21,868 $ 14,367 $ 53,587 $ 31,772
=========== =========== =========== ===========
* Includes interest income and other segment operating results