Cree reports Q4 revenue drop and annual loss
Cree, the North Carolina maker of LED lighting and semiconductor products, has announced a 12 percent drop in revenue for Q4 2015 (ended June 28th) of $382 million compared to $436 million in Q4 2014, and 7 percent down compared to Q3 2015.
GAAP net loss for Q4 was $88 million compared to GAAP net income of $30 million for Q4 2014. On a non-GAAP basis, net loss for the Q4 2015 was $21 million, compared to non-GAAP net income for the Q4 2014 of $51 million.
For the whole year 2015, Cree reported revenue of $1.63 billion, which represents a 1 percent decrease compared to revenue of $1.65 billion for fiscal 2014. GAAP net loss was $64 million compared to $124 million of net income for fiscal 2014. On a non-GAAP basis, net income for fiscal year 2015 was $72 million compared to $203 million for fiscal 2014.
During Q4 2015, Cree recognised $84 million of costs related to the LED business restructuring announced on June 24, 2015. The restructuring charges included $27 million of LED revenue reserves, $11 million of LED inventory reserves and $46 million of factory capacity and overhead cost reductions. The revenue and inventory reserves are included in both the GAAP and non-GAAP results, while the capacity and overhead charges are included in the GAAP results only.
"Fiscal 2015 was a year of good progress in our Lighting and Power and RF businesses, mixed with challenges in the LED industry," stated Chuck Swoboda, Cree Chairman and CEO. "The actions we took in Q4 to restructure our LED business position us for solid revenue growth and margin expansion in fiscal 2016, driven by the strength of our commercial lighting business."
Recent business highlights include a confidential draft registration statement to the US Securities and Exchange Commission for a potential initial public offering of Cree's Power and RF business; a global LED chip patent cross-license agreement with Epistar, under which Cree will receive a licensing fee and royalty payments from Epistar; and the acqusition of APEI (Arkansas Power Electronics International, Inc) a power modules and power electronics firm.
The company also introduced Cree WaveMax Technology, an optical breakthrough that enables next generation light experiences and delivers superior value, visual performance and energy-saving potential; and launched the new Cree XLamp XHP35 family of LEDs with 50 percent more light output than Cree's previous highest-performing single-die LED, enabling new designs with reduced size and lower system costs.
Business Outlook
For its first quarter of fiscal 2016 ending September 27, 2015, Cree targets revenue in a range of $410 million to $430 million, with GAAP gross margin targeted to be 31.3 percent+/- and non-GAAP gross margin targeted to be 32.0 percent+/-. GAAP gross margin targets include stock-based compensation expense of approximately $3 million, while non-GAAP targets do not. GAAP operating expenses are targeted to be approximately $142 million, and non-GAAP operating expenses are targeted to be approximately $107 million.
