EX-99.01 3 f8k_041504exh.txt PRESS RELEASE, DATED APRIL 15, 2004 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