-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KhpiyvssaZ1njbTK3nknxQLmwDDZLjwkCvpD3hucG9JXckz6JhuDi1Qv4FhTMuWE LLq6yY20sKxnYhsHugFVZg== 0000895419-04-000037.txt : 20041014 0000895419-04-000037.hdr.sgml : 20041014 20041014160112 ACCESSION NUMBER: 0000895419-04-000037 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041014 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041014 DATE AS OF CHANGE: 20041014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREE INC CENTRAL INDEX KEY: 0000895419 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 561572719 STATE OF INCORPORATION: NC FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21154 FILM NUMBER: 041078983 BUSINESS ADDRESS: STREET 1: 4600 SILICON DR CITY: DURHAM STATE: NC ZIP: 27703 BUSINESS PHONE: 9193135300 MAIL ADDRESS: STREET 1: 4600 SILICON DR CITY: DURHAM STATE: NC ZIP: 27703-8475 FORMER COMPANY: FORMER CONFORMED NAME: CREE RESEARCH INC /NC/ DATE OF NAME CHANGE: 19940224 8-K 1 f8k_10142004.txt CURRENT REPORT ON FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): October 14, 2004 CREE, INC. (Exact name of registrant as specified in its charter) North Carolina 0-21154 56-1572719 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation) Number) Identification Number) 4600 Silicon Drive Durham, North Carolina 27703 (Address of principal executive offices) (Zip Code) (919) 313-5300 Registrant's telephone number, including area code N/A (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On October 14, 2004, Cree, Inc. (the "Company") issued a press release announcing results for the fiscal quarter ended September 26, 2004. The press release is attached as Exhibit 99.01 and incorporated into this report by reference. The information in this report shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Furthermore, the information in this report shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended. Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit No. Description of Exhibit ----------- ---------------------- 99.01 Press Release, October 14, 2004 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CREE, INC. By: /s/ Cynthia B. Merrell ------------------------------------ Dated: October 14, 2004 Cynthia B. Merrell Chief Financial Officer 3 EXHIBIT INDEX Exhibit No. Description of Exhibit - ----------- ---------------------- 99.01 Press Release, October 14, 2004 4 EX-99.01 2 f8k_10142004exh.txt PRESS RELEASE, OCTOBER 14, 2004 EXHIBIT 99.01 Contact: Cynthia Merrell Chief Financial Officer Cree, Inc. cynthia_merrell@cree.com (T) 919-313-5300 (F) 919-313-5615 CREE REPORTS RECORD REVENUE, GROSS MARGIN AND EARNINGS FOR THE FIRST QUARTER OF FISCAL YEAR 2005 Quarterly EPS Increases 14% Sequentially to $0.32 Per Diluted Share; Gross Margin Increases to 56% of Revenue Durham, NC, October 14, 2004 - Cree, Inc. (Nasdaq: CREE) today announced revenue of $95,897,000 for the first quarter of fiscal 2005, representing a 45 percent increase over the Company's comparable year ago period revenue of $66,211,000. Gross margin for the first quarter of fiscal 2005 increased to 56 percent of revenue, which sets a new high for the Company, and compares to 43 percent in the prior year period and to 52 percent reported for the fourth quarter of fiscal 2004. Operating income nearly tripled to $34,917,000 compared to $11,974,000 reported in the comparable prior year period. Net income for the first quarter was $24,428,000 or $0.32 per share, compared to $8,879,000 or $0.12 per share, as reported for the first quarter of fiscal 2004. After tax net margins were 25 percent of revenue for the first quarter. LED product sales represented 82% of the Company's revenue in the first quarter and continued to drive higher financial results. LED revenue increased 56% from the comparable year ago period and 9% from the previous quarter to $78.9 million. Profitability of the LED business also increased in the first quarter as compared to the fourth quarter of fiscal 2004 as the average LED cost declined 11% while the average selling price declined 1%. "These results demonstrate once again the power of our business model and our ability to develop new products while reducing costs. In addition to our record revenue and earnings for the third consecutive quarter, we are extremely pleased about our 56% gross margin result," stated Chuck Swoboda, Cree President and CEO. "Our factory continues to improve its efficiency and although we have started the 3" conversion for LEDs, we really haven't seen the benefit yet. We expect the 3" migration to be a more important cost driver over the next several quarters that should enable us to continue to aggressively pursue new business. These dynamics position us well for another solid quarter." Business Outlook: - ----------------- Cree provides guidance for its second quarter of fiscal 2005 indicating that it currently targets revenue in a range of $98 to $100 million with earnings of $0.30 to $0.32 per diluted share. The target for earnings per share is higher than the current First Call analyst consensus estimate of $0.28 per diluted share for the second quarter of fiscal 2005. Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the first quarter fiscal 2005 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 October 28, 2004. Supplemental financial information is available under "Q1 '05 Financial Metrics" in the "Investor Info" section of Cree's web site at http://www.cree.com/News/metrics.asp. About Cree, Inc. - ---------------- Cree is an advanced semiconductor company that leverages its expertise in silicon carbide (SiC) and gallium nitride (GaN) materials technology to produce new and enabling semiconductors. The products include blue, green and near ultraviolet (UV) light emitting diodes (LEDs), power switching devices, and radio frequency (RF) and microwave devices. The Company is currently developing near UV lasers. Targeted applications for these products include solid-state illumination, power switching, wireless infrastructure and optical storage. Cree understands the important convergence of science, technology and creativity, placing high value on ideas, as well as the energy and ability of its people. For more information on Cree, please visit www.cree.com. The schedules attached to this release are an integral part of the 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 targets and prospects, could differ materially due to a number of factors, including our ability to complete development and commercialization of products under development, such as our pipeline of brighter LEDs; our ability to lower costs; 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 securities litigation; 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 27, 2004 and subsequent reports filed with the SEC. Cree and the Cree logo are registered trademarks of Cree, Inc. ### CREE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended 9/26/2004 9/28/2003 (Unaudited) (Unaudited) ----------- ----------- Product revenue $ 90,186 $ 59,163 Contract revenue 5,711 7,048 ----------- ----------- Total revenue 95,897 66,211 Cost of product revenue 37,936 32,503 Cost of contract revenue 4,291 5,492 ----------- ----------- Total cost of sales 42,227 37,995 Gross profit 53,670 28,216 Operating expenses: Research and development 11,015 8,327 Sales, general and administrative 7,660 7,912 Other expense 78 3 ----------- ----------- Operating expenses 18,753 16,242 Income from operations 34,917 11,974 Non-operating income: Gain on investments in marketable securities 118 - Other non-operating income 5 2 Net interest income 1,149 892 ----------- ----------- Income before income taxes 36,189 12,868 Income tax expense 11,761 3,989 ----------- ----------- Net income $ 24,428 $ 8,879 =========== =========== Earnings per share, diluted $ 0.32 $ 0.12 =========== =========== Weighted average shares of common stock outstanding, basic 73,503 74,174 Weighted average shares of common stock outstanding, diluted 75,600 75,754 CREE, INC. CONSOLIDATED BALANCE SHEETS (in thousands) 9/26/2004 6/27/2004 (Unaudited) (Audited) ----------- --------- Assets: Current assets: Cash and equivalents and short term investments $ 176,008 $ 158,163 Accounts receivable, net 46,110 47,766 Inventory 22,813 19,428 Current portion of deferred income taxes 2,560 2,560 Other current assets and prepaid expenses 6,946 6,976 ----------- --------- Total current assets 254,437 234,893 Property, plant and equipment, net 293,918 273,342 Long-term investments held to maturity 76,914 72,730 Patents and license rights, net 20,491 19,831 Long-term marketable securities 33,191 22,002 Other assets 4,073 5,202 ----------- --------- Total assets $ 683,024 $ 628,000 =========== ========= Liabilities and Shareholders' Equity: Current liabilities: Accounts payable trade $ 31,097 $ 25,102 Accrued salaries and other expenses 10,338 11,443 Income tax payable 11,504 - Deferred revenue 7,142 8,437 ----------- --------- Total current liabilities 60,081 44,982 Long term liabilities: Long term deferred tax liability 8,305 3,886 ----------- --------- Total long term liabilities 8,305 3,886 Shareholders' Equity: Common stock 92 91 Additional paid in capital 510,583 506,275 Comprehensive income 12,396 5,627 Retained earnings 91,567 67,139 ----------- --------- Total shareholders' equity 614,638 579,132 ----------- --------- Total liabilities and shareholders' equity $ 683,024 $ 628,000 =========== ========= CREE, INC. Operating Segment Information (in thousands) Three Months Ended 9/26/2004 9/28/2003 (Unaudited) (Unaudited) ----------- ----------- Revenue: Cree* $ 94,461 $ 65,161 Cree Microwave 1,436 1,050 ----------- ----------- Total revenue $ 95,897 $ 66,211 =========== =========== Net income (loss) before income taxes: Cree* $ 39,360 $ 16,271 Cree Microwave (3,171) (3,403) ----------- ----------- Total net income before income taxes $ 36,189 $ 12,868 =========== =========== * Includes interest income and other segment operating results -----END PRIVACY-ENHANCED MESSAGE-----