-----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, HL77IvILRQkyKdOGDqKcKZrcP5afZuqIfn6+F3hjH4bzIYkSzZE5lyQfJIWSyUTM IU8g4VEt6GMGbr8IWDBDuQ== 0000895419-05-000014.txt : 20050414 0000895419-05-000014.hdr.sgml : 20050414 20050414160302 ACCESSION NUMBER: 0000895419-05-000014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050414 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050414 DATE AS OF CHANGE: 20050414 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: 05750959 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_041405.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): April 14, 2005 CREE, INC. (Exact name of registrant as specified in its charter) North Carolina 0-21154 56-1572719 (State or other jurisdiction (Commission File (I.R.S. Employer of 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 April 14, 2005, Cree, Inc. (the "Company") issued a press release announcing results for the fiscal quarter ended March 27, 2005. 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, April 14, 2005 -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: April 14, 2005 Cynthia B. Merrell Chief Financial Officer -3- EXHIBIT INDEX Exhibit No. Description of Exhibit - ----------- ----------------------- 99.01 Press Release, April 14, 2005 -4- EX-99.01 2 f8k_041405exh.txt PRESS RELEASE, APRIL 14, 2005 EXHIBIT 99.01 FOR IMMEDIATE RELEASE Press Release Contact: Raiford Garrabrant Director, Investor Relations Cree, Inc. raiford_garrabrant@cree.com (T) 919-313-5397 (F) 919-313-5615 CREE REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER OF FISCAL YEAR 2005 Revenue of $96.7 Million Earnings Per Share of $0.27 Durham, NC, April 14, 2005 - Cree, Inc. (Nasdaq: CREE) today announced revenue of $96,710,000 for the third quarter of fiscal 2005 which ended on March 27, 2005, representing a 25 percent increase over the Company's comparable year ago period revenue of $77,223,000. Net income for the third quarter increased 37 percent to $20,683,000, or $0.27 per share, compared to $15,089,000, or $0.20 per share, as reported for the third quarter of fiscal 2004. Gross margin for the third quarter of fiscal 2005 was 53 percent of revenue and compares to 49 percent in the prior year period and 50 percent in the second quarter of fiscal 2005. During the third quarter of fiscal 2005, net income included approximately $25,000 of net adjustments for changes in estimates to the Company's sales return provision to better reflect product return history and tax adjustments that did not change reported earnings per share. The adjustments included a $1.2 million after-tax benefit to gross profit related to the change recorded to the Company's sales return provision which increased third quarter gross margin by two percentage points. The sales return provision benefit was mostly offset by non-operating adjustments, which negatively impacted net income by $1.2 million. The non-operating adjustments were related primarily to tax adjustments associated with the decline in the value of the Company's marketable securities and offset partly by a gain on the sale of a portion of these securities. For the nine-month period ended March 27, 2005, Cree reported revenue of $290,181,000, an increase of 34 percent over the $216,497,000 reported for the comparable period in fiscal year 2004. Net income for the nine-month period rose 90 percent to $70,132,000, or $0.91 per share, compared to $36,975,000, or $0.49 per share, in the year ago period. "The fact that our LED business grew sequentially in what is normally a seasonally down quarter for the industry is a testament to the strength of our product offering," stated Chuck Swoboda, Cree President and CEO. "As we enter the final quarter of our fiscal year, I believe that we are in a favorable competitive position. Based on current orders and customer forecasts, we are optimistic that our revenue should grow sequentially in the fourth quarter." Today the Company also announced that as part of its ongoing stock buyback program, it had repurchased 1.45 million shares in the third quarter at an average price of $24.32. Business Outlook: For its fourth quarter of fiscal 2005, Cree currently targets revenue in a range of $98 to $102 million with earnings of $0.25 to $0.28 per share. Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the third quarter fiscal 2005 results and the fourth quarter fiscal 2005 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 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 28, 2005. Supplemental financial information is available under "Q3 '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 experienced will not continue; the risk that, due to the complexity of our manufacturing processes and transition of production to three-inch wafers, 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 INCOME (in thousands, except per share data)
Three Months Ended Nine Months Ended 3/27/2005 3/28/2004 3/27/2005 3/28/2004 (Unaudited) (Unaudited) (Unaudited) (Unaudited) ----------- ----------- ----------- ----------- Product revenue $ 91,236 $ 71,493 $272,990 $197,620 Contract revenue 5,474 5,730 17,191 18,877 ----------- ----------- ----------- ----------- Total revenue 96,710 77,223 290,181 216,497 Cost of product revenue 41,210 33,992 123,224 100,838 Cost of contract revenue 4,260 5,021 13,604 16,136 ----------- ----------- ----------- ----------- Total cost of sales 45,470 39,013 136,828 116,974 Gross profit 51,240 38,210 153,353 99,523 Operating expenses: Research and development 11,505 10,481 33,144 26,988 Sales, general and administrative 9,025 7,210 24,512 22,019 Loss on disposal of property and equipment 277 80 603 226 ----------- ----------- ----------- ----------- Operating expenses 20,807 17,771 58,259 49,233 Income from operations 30,433 20,439 95,094 50,290 Non-operating income: Gain (loss) on investments in securities 2,808 (1) 935 - Other non-operating income - 488 4 518 Net interest income 1,404 942 3,691 2,779 ----------- ----------- ----------- ----------- Income before income taxes 34,645 21,868 99,724 53,587 Income tax expense 13,962 6,779 29,592 16,612 ----------- ----------- ----------- ----------- Net income $ 20,683 $ 15,089 $ 70,132 $ 36,975 =========== =========== =========== =========== Earnings per share, diluted $ 0.27 $ 0.20 $ 0.91 $ 0.49 =========== =========== =========== =========== Weighted average shares of common stock outstanding, basic 75,694 74,050 74,860 74,143 Weighted average shares of common stock outstanding, diluted 77,428 76,399 77,256 75,979
CREE, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) 3/27/2005 6/27/2004 (Unaudited) (Audited) ----------- ----------- Assets: Current assets: Cash and equivalents and short term investments held to maturity $ 142,102 $ 158,163 Accounts receivable, net 50,274 47,766 Inventories, net 29,346 19,428 Deferred income taxes 2,270 2,560 Prepaid Insurance 3,356 2,304 Prepaid expenses and other current assets 10,122 4,672 ----------- ----------- Total current assets 237,470 234,893 Property and equipment, net 343,521 273,342 Long-term investments held to maturity 86,982 72,730 Patents and license rights, net 21,344 19,831 Marketable securities available for sale 18,613 22,002 Other assets 7,367 5,202 ----------- ----------- Total assets $ 715,297 $ 628,000 =========== =========== Liabilities and Shareholders' Equity: Current liabilities: Accounts payable trade $ 27,706 $ 25,102 Accrued salaries and other expenses 11,818 11,443 Income tax payable 4,297 - Deferred revenue - 8,437 ----------- ----------- Total current liabilities 43,821 44,982 Long term liabilities: Deferred income taxes 9,484 3,886 ----------- ----------- Total long term liabilities 9,484 3,886 Shareholders' Equity: Common stock 94 91 Additional paid in capital 519,853 506,275 Other comprehensive income, net of tax 4,773 5,627 Retained earnings 137,272 67,139 ----------- ----------- Total shareholders' equity 661,992 579,132 ----------- ----------- Total liabilities and shareholders' equity $ 715,297 $ 628,000 =========== =========== CREE, INC. OPERATING SEGMENT INFORMATION (in thousands)
Three Months Ended Nine Months Ended 3/27/2005 3/28/2004 3/27/2005 3/28/2004 (Unaudited) (Unaudited) (Unaudited) (Unaudited) ----------- ----------- ----------- ----------- Revenue: Cree* $ 95,753 $ 75,048 $ 286,275 $ 211,288 Cree Microwave 957 2,175 3,906 5,209 ----------- ----------- ----------- ---------- Total revenue $ 96,710 $ 77,223 $ 290,181 $ 216,497 =========== =========== =========== ========== Net income (loss) before income taxes: Cree* $ 37,593 $ 24,149 $ 108,927 $ 61,861 Cree Microwave (2,948) (2,281) (9,203) (8,274) ----------- ----------- ----------- ---------- Total net income before income taxes $ 34,645 $ 21,868 $ 99,724 $ 53,587 =========== =========== =========== ========== * Includes interest income and other segment operating results
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