Cree Reports Record Quarterly Revenue and Net Income for the Second Quarter of
Cree, Inc., a market leader in LED lighting, today announced record revenue of $199.5 million for its second quarter of fiscal 2010, ended December 27, 2009. This represents a 35% increase compared to revenue of $147.6 million reported for the second fiscal quarter last year and an 18% increase compared to the first quarter of fiscal 2010. GAAP net income for the second quarter increased 216% year-overyear to $33.8 million, or $0.32 per diluted share, compared to GAAP net income of $10.7 million, or $0.12 per diluted share, for the second quarter of fiscal 2009. On a non-GAAP basis, net income for the second quarter of fiscal 2010 increased 126% year-over-year to $40.2 million, or $0.38 per diluted share, compared to non-GAAP net income for the second quarter of fiscal 2009 of $17.8 million or $0.20 per diluted share.
"We continued to execute very well in Q2, as we delivered record revenue and net income",stated Chuck Swoboda, Cree chairman and CEO. "LED lighting adoption continues to gain momentum and our near term focus is on factory execution and capacity expansion. Our strong balance sheet further enhances our leadership position and supports our mission of leading the LED lighting revolution".
Q2 2010 Financial Metrics:
Second Quarter (in thousands, except per share amounts)
2010 2009 Change
Net revenue $199,475 $147,623 $51,852 35%
GAAP
Gross Margin 47.2% 38.3%
Operating Margin 23.1% 7.8%
Net Income $33,786 $10,696 $23,090 216%
Earnings per diluted share $0.32 $0.12 $0.20 167%
Non-GAAP
Gross Margin 47.5% 38.9%
Operating Margin 27.6% 14.0%
Net Income $40,202 $17,769 $22,433 126%
Earnings per diluted share $0.38 $ 0.20 $0.18 90%
Cash and investments increased $65.6 million from Q1 of fiscal 2010 to $954.1 million.
Cash flow from operations was $21.5 million. Free cash flow (cash flow from operations less capital expenditures) was ($19.9) million as we spent $41.4 million on capital expenditures.
Accounts receivable (net) increased $20.3 million from Q1 of fiscal 2010 to $113.4 million, resulting in days sales outstanding of 51, an increase of 1 day from Q1 of fiscal 2010.
Inventory (net) increased $7.3 million from Q1 of fiscal 2010 to $93.3 million and represents 80 days of inventory, a decrease of 1 day from Q1 of fiscal 2010.
Recent Business Highlights:
Awarded $39 million in tax credits as part of the American Recovery and Reinvestment Act to support our investment to build energy efficient LED lighting
Announced that Cree LED lamps have been selected for an initial deployment in approximately 650 Walmart stores
Set a new standard for indoor LED lighting with the XLamp® MX-6 LED, the industrys first lighting-class PLCC LED
Demonstrated an A-lamp LED light bulb with the highest lumen output and efficacy reported in the industry
Achieved industry-best reported R&D results of 186 lumens per watt from a white high-power LED
Purchased a facility for manufacturing expansion in Huizhou, China
Business Outlook:
For its third quarter of fiscal 2010 ending March 28, 2010, Cree targets revenue in a range of
$215 million to $225 million with GAAP net income of $37 million to $40 million, or $0.35 to
$0.37 per diluted share. Non-GAAP net income is targeted to increase quarter-over-quarter to
$44 million to $47 million, or $0.41 to $0.44 per diluted share, based on an estimated 107.5
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 $0.04 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 second quarter 2010 results and the fiscal third 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 Crees 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 February 2, 2010.
Supplemental financial information, including the non-GAAP reconciliation is available in the "Investor Relations" section of Crees website, under "Financial Metrics", "Quarter ending December 27, 2009", at www.cree.com.
