EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 exhibit99_1.htm
 
Exhibit 99.1
 
 
For Immediate Release
Press Release
 
Contact:
Raiford Garrabrant
 
Cree, Inc.
 
Director, Investor Relations
 
Ph: 919-287-7895
 
Fax: 919-313-5615
 
Email: raiford_garrabrant@cree.com
 

Cree Reports Record Revenue for the Fourth Quarter and Fiscal Year 2008
 
Annual Revenue Increased 25% to $493 Million

DURHAM, N.C., August 12, 2008 – Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced revenue of $135.9 million for its fiscal fourth quarter ended June 29, 2008.  This represents a 9% increase compared to the fiscal third quarter of 2008 and a 22% increase compared to revenue of $111.2 million reported for the fourth fiscal quarter last year.  GAAP net income for the fourth quarter was $8.4 million, or $0.09 per diluted share, compared to net income of $6.4 million or $0.08 per diluted share for the fourth quarter of fiscal 2007.

The remainder of this press release highlights the company’s financial results on both a GAAP and a non-GAAP basis.  The GAAP results include certain costs, charges, gains and losses which are excluded from non-GAAP results.  By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends.  Cree’s management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release.  Non-GAAP results are not prepared in accordance with GAAP and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP.  Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this press release.

GAAP net income from continuing operations was $0.07 per diluted share for the fourth quarter of fiscal 2008.  This amount excludes a gain from discontinued operations of $0.02 per diluted share, and includes expenses totaling $7.9 million, net of tax, or $0.09 per diluted share related to amortization of acquired intangibles and stock-based compensation expense.  On a non-GAAP basis, adjusted to exclude these items, net income from continuing operations for the fourth quarter of fiscal 2008 was $14.5 million, or $0.16 per diluted share.  Included in non-GAAP earnings is a $0.03 per diluted share benefit primarily due to a state franchise tax credit that reduced G&A for the quarter.  Excluding this $0.03 per diluted share benefit, non-GAAP earnings were consistent with the company’s previously announced target range.  On a non-GAAP basis, net income from continuing operations for the fourth quarter of fiscal 2007 was $7.4 million, or $0.09 per diluted share.  

For fiscal year 2008, Cree reported revenue of $493.3 million, which represents a 25% increase compared to revenue of $394.1 million for fiscal 2007.  GAAP net income was $33.4 million, or $0.38 per diluted share, compared to $57.3 million, or $0.72 per diluted share for fiscal 2007.
 
 
 
On a non-GAAP basis net income for fiscal year 2008 was $47.2 million, or $0.54 per diluted share, compared to $35.4 million, or $0.44 per diluted share, for fiscal 2007.

“Q4 represented a strong finish to a very successful year,” stated Chuck Swoboda, Cree Chairman and CEO.  “Revenue exceeded our previously announced guidance due to strong LED sales, which grew 11% sequentially and 27% from a year ago.   We have executed our strategy to transform Cree into a broad-based LED company with chips, components and systems that are leading the LED lighting revolution.  While we recognize that there is caution in the market about the global economic environment, we remain optimistic about the year ahead as the momentum continues to build for our new products and energy efficient lighting.”
 
 
Recent Business Highlights:

Ø  
Introduced several new LED lighting products:
 
·  
Announced a new version of the LR6 designed for 220V to 240V electrical systems to address Europe, Asia and other major markets.

·  
Released the LR4, a four-inch architectural recessed LED down light for new construction and renovation projects.  The LR4 delivers up to 540 lumens of high-quality, dimmable light from less than 11 watts of power.

·  
Demonstrated the XLamp® MC-E LED at LIGHTFAIR International.  The multi-chip LED retains the same footprint as Cree’s existing XLamp XR family LEDs while providing four times the light output of the existing XR-E.

·  
Announced a new standard for lighting-class LEDs with the introduction of the XLamp XP-E and XP-C LEDs.  These breakthrough LEDs have the smallest footprint in the industry for lighting-class LEDs—providing the same high-quality lighting performance and proven reliability as Cree XR-E and XR-C LEDs in an 80-percent smaller package.
 
Ø  
Cree’s flagship LED recessed down light, the LR6, won a prestigious Silver International Design Excellence Award (IDEA) in the EcoDesign category.  IDEA is one of the most prominent design competitions in the world, celebrating cutting-edge products and product concepts.

Ø  
Announced the LED UniversityTM program with North Carolina State University, Marquette University, University of California at Santa Barbara, University of Arkansas and Tianjin Polytechnic University.  Each of the participating universities is conducting LED lighting pilots to determine the cost and environmental benefits of switching to LED lighting in campus applications.
 
Ø  
Welcomed Anchorage, Alaska, into the LED City® program.  Anchorage Mayor Mark Begich announced his city’s participation in conjunction with an energy-related initiative for the retrofit of all 16,000 municipal roadway lights with high-efficiency LED fixture.
 
Ø  
Entered into an agreement with Toyoda Gosei providing each company with access to the other’s patents relating to LED chip and packaged LED technology.
 
 
 
- 2 -
 
Q4 2008 Financial Metrics:

Ø  
Gross margin was 34% of revenue.

Ø  
Inventory decreased $3.2 million from Q3 to $80.2 million, and represents 80 days of inventory (DOI), a decrease of 12 days from Q3.

Ø  
Accounts receivable decreased $1.2 million from Q3 to $110.4 million, resulting in days sales outstanding of 73, a decrease of 7 days from Q3.
 
Ø  
Cash flow from operations was $36.7 million.
 
Ø  
Cash and investments decreased $27.3 million to $371.0 million from Q3, as we used $51.1 million to repurchase approximately 2 million shares at an average cost of $25.96 per share.
 
 
Business Outlook:

For its first quarter of fiscal 2009 ending September 28, 2008, Cree targets revenue in a range of $138 million to $142 million with GAAP earnings of $0.06 to $0.08 per diluted share and non-GAAP earnings of $0.13 to $0.15 per diluted share, based on an estimated 89.5 million diluted weighted average shares.  Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles of $0.03 per diluted share, and stock-based compensation expense of $0.04 per diluted share.  

Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the fiscal fourth quarter 2008 results and the fiscal first quarter 2009 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 Cree’s 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 August 26, 2008.

Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available in the “Investor Relations” section of Cree’s website, under “Financial Metrics,” “Quarter ending June 29, 2008”, at www.cree.com.

About Cree, Inc.
 
Cree is leading the LED lighting revolution and setting the stage to obsolete the incandescent light bulb through the use of energy-efficient, environmentally friendly LED lighting. Cree is a market-leading innovator of lighting-class LEDs, LED lighting solutions, and semiconductor solutions for wireless and power applications.

Cree’s product families include recessed LED down lights, lighting-class power LEDs, high-brightness LEDs, blue and green LED chips, power-switching devices and radio-frequency/wireless devices. Cree solutions are driving improvements in applications such as general illumination, backlighting, electronic signs and signals, variable-speed motors, and wireless communications.

For additional product and company information, please refer to www.cree.com.
 
 
 
- 3 -

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 LED chips, LED components and LED lighting retrofit solutions; our ability to lower costs; potential changes in demand; increasing price competition in key markets; the risk that, due to the complexity of our manufacturing processes and transition of production to larger 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, as well as production at our Huizhou facility and subcontractors; 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 recent acquisitions; risks associated with ongoing litigation; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report on Form 10-K for the fiscal year ended June 24, 2007, and subsequent reports filed with the SEC. Except as required under the U.S. federal securities laws and the rules and regulations of the SEC, Cree disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.

Cree, the Cree logo, XLamp and LED City are registered trademarks, and LED University is a trademark, of Cree, Inc.
 
 

 
- 4 -
 
 
CREE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
                                 
                                 
   
Three Months Ended
      
Years Ended
  
     
June 29, 2008
      
June 24, 2007
      
June 29, 2008
      
June 24, 2007
  
     
(Unaudited)
      
(Unaudited)
          
                                 
Product revenue
   $
129,443
     $
103,459
      $
 464,907
     $
364,718
  
Contract revenue
    
        6,482
      
        7,709
      
      28,389
      
      29,403
  
Total revenue
    
    135,925
      
    111,168
      
    493,296
      
    394,121
  
                                 
Cost of product revenue
    
      84,897
      
      73,350
      
    304,663
      
    237,125
  
Cost of contract revenue
    
        5,286
      
        6,073
      
      22,806
      
      23,008
  
Total cost of revenue
    
      90,183
      
      79,423
      
    327,469
      
    260,133
  
                                 
Gross margin
    
      45,742
      
      31,745
      
    165,827
      
    133,988
  
Gross margin percentage
    
33.7
 %     
28.6
 %     
33.6
%
    
34.0
 %
                                 
Operating expenses:
                                
Research and development
    
      15,763
      
      14,564
      
      58,846
      
      58,836
  
Sales, general and administrative
    
      19,158
      
      15,471
      
      76,607
      
      53,105
  
Amortization of acquisition related intangibles
    
        4,806
      
        3,664
      
      17,127
      
        4,192
  
Loss on disposal and impairment of long-lived assets
    
           719
      
        1,170
      
        1,206
      
        1,199
  
Total operating expenses
    
      40,446
      
      34,869
      
    153,786
      
    117,332
  
                                 
Operating income
    
        5,296
      
       (3,124
 )     
      12,041
      
      16,656
  
Operating income percentage       3.9 %      -2.8 %     
 2.4
 %       4.2 % 
                                 
Non-operating income:
                                
Gain on sale of investments, net
    
              -
      
        7,822
      
      14,117
      
      19,233
  
Interest and other non-operating income, net
    
        2,699
      
        3,384
      
      14,891
      
      15,222
  
Income from continuing operations before income taxes
    
        7,995
      
        8,082
      
      41,049
      
      51,111
  
                                 
Income tax expense
    
        1,352
      
        1,566
      
        9,237
      
           918
  
Net income from continuing operations
    
        6,643
      
6,516
      
      31,812
      
50,193
  
                                 
 Income (loss) from discontinued operations, net of related tax effect
    
        1,803
      
(83
 )     
        1,627
      
7,141
  
Net income
   $
8,446
     $
6,433
      $
33,439
     $
57,334
  
                                 
Diluted earnings per share:
                                
Income from continuing operations
   $
0.07
     $
0.08
      $
0.36
     $
0.63
  
 Income (loss) from discontinued operations
   $
0.02
     $
(0.00
 )     $
0.02
     $
0.09
  
Net income
   $
0.09
     $
0.08
      $
0.38
     $
0.72
  
                                 
Weighted average shares of common
                                
   stock outstanding, basic
    
      88,380
      
      83,815
      
      86,366
      
      78,560
  
                                 
Weighted average shares of common
                                
   stock outstanding, diluted
    
      89,615
      
      84,929
      
      88,077
      
      79,496
  
                                 

 
 
- 5 -
 
CREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                   
                   
   
June 29, 2008
    
March 30, 2008
    
June 24, 2007
  
 
  
(Unaudited)
    
(Unaudited)
        
Assets:                  
Current assets:
                  
Cash, cash equivalents and short term investments
   $ 312,428     $ 336,965     $ 242,655  
Accounts receivable, net
     110,376       111,604       79,668  
Inventory, net
     80,161       83,328       71,068  
Income taxes receivable
     9,825       2,000       7,947  
Deferred income taxes
     4,578       20,886       23,573  
Prepaid expenses and other current assets
     12,900       11,918       8,920  
Assets of discontinued operations
     2,600       133       301  
Total current assets
     532,868       566,834       434,132  
                         
Property and equipment, net
     348,013       351,222       372,345  
Long-term investments
     58,604       61,369       68,363  
Intangible assets, net
     126,037       129,644       96,138  
Goodwill
     244,003       187,873       141,777  
Deferred income taxes
     -       7,053       1,227  
Other assets
     3,882       2,296       2,248  
Total assets
   $ 1,313,407     $ 1,306,291     $ 1,116,230  
                         
Liabilities and Shareholders' Equity:
                        
Current liabilities:
                        
Accounts payable, trade
   $ 37,402     $ 44,797     $ 32,940  
Accrued salaries and wages
     13,471       14,337       10,241  
Income taxes payable
     5,314       -       4,504  
Deferred income taxes
     -       3,343       844  
Other current liabilities
     7,938       4,758       5,415  
Contingent payment due related to COTCO acquisition
     60,000       -       -  
Liabilities of discontinued operations
     550       541       505  
Total current liabilities
     124,675       67,776       54,449  
                         
Long-term liabilities:
                        
Deferred income taxes
     38,048       55,937       38,758  
Other long-term liabilities
     4,199       5,014       5,921  
Long-term liabilities of discontinued operations
     745       835       1,103  
Total long-term liabilities
     42,992       61,786       45,782  
                         
Shareholders' Equity:
                        
Common stock
     110       112       106  
Additional paid-in-capital
     811,015       851,362       713,778  
Accumulated other comprehensive income
     8,923       8,008       9,826  
Retained earnings
     325,692       317,247       292,289  
Total shareholders' equity
     1,145,740       1,176,729       1,015,999  
Total liabilities and shareholders' equity
   $ 1,313,407     $ 1,306,291     $ 1,116,230  
                         
 
 
 
- 6 -
 
The following is a reconciliation showing how Cree, Inc.'s fourth quarter income statements for fiscal 2008 and 2007 would appear if they were adjusted for the items noted below.
                                         
                                         
CREE, INC.
Reconciling Items to Q4 2008 & 2007 Financial Statements - GAAP to Non-GAAP
(in thousands, except per share amounts)
(Unaudited)
                                         
                                         
   
Three Months Ended
    
Three Months Ended
  
   
June 29, 2008
    
June 24, 2007
  
   
GAAP
    
Adjustments
      
Non-GAAP
    
GAAP
    
Adjustments
      
Non-GAAP
  
                                         
Product revenue
   $ 129,443     $ -       $ 129,443     $ 103,459     $ -       $ 103,459  
Contract revenue
     6,482       -         6,482       7,709       -         7,709  
Total revenue
     135,925       -         135,925       111,168       -         111,168  
                                                     
Cost of product revenue
     84,897       (703 )
(a)
     84,194       73,350       (3,541 )
(a), (d)
     69,809  
Cost of contract revenue
     5,286       -         5,286       6,073       -         6,073  
Total cost of sales
     90,183       (703 )       89,480       79,423       (3,541 )       75,882  
                                                     
Gross margin
     45,742       703         46,445       31,745       3,541         35,286  
Gross margin percentage
     33.7 %               34.2 %     28.6 %               31.7 %
                                                     
Operating expenses:
                                                    
Research and development
     15,763       (1,331 )
(a)
     14,432       14,564       (1,680 )
(a), (e)
     12,884  
Sales, general and administrative
     19,158       (2,638 )
(a)
     16,520       15,471       (1,272 )
(a)
     14,199  
Amortization of acquisition related intangibles
     4,806       (4,806 )
(b)
     -       3,664       (3,664 )
(b)
     -  
Loss on disposal and impairment of long-lived assets
     719       -         719       1,170       -         1,170  
Total operating expenses
     40,446       (8,775 )       31,671       34,869       (6,616 )       28,253  
                                                     
Operating income
     5,296       9,478         14,774       (3,124 )     10,157         7,033  
Operating income percentage
     3.9 %               10.9 %     -2.8 %               6.3 %
                                                     
Non-operating income:
                                                    
Gain (loss) on investments in securities
     -       -         -       7,822       (7,822 )
(f)
     -  
Interest and other non-operating income, net
     2,699       -         2,699       3,384       -         3,384  
Income from continuing operations before income taxes
     7,995       9,478         17,473       8,082       2,335         10,417  
                                                     
Income tax expense (benefit)
     1,352       1,603  
(c)
     2,955       1,566       1,323  
(c)
     2,889  
Net income from continuing operations
     6,643       7,875         14,518       6,516       1,012         7,528  
                                                     
(Loss) gain from discontinued operations, net of related tax
     1,803       (1,820 )
(g)
     (17 )     (83 )     -         (83 )
Net income
   $ 8,446     $ 6,055       $ 14,501     $ 6,433     $ 1,012       $ 7,445  
                                                     
Earnings per diluted share:
                                                    
From continuing operations
   $ 0.07     $ 0.09       $ 0.16     $ 0.08     $ 0.01       $ 0.09  
From discontinued operations
   $ 0.02     $ (0.02 )     $ (0.00 )   $ (0.00 )   $ -       $ (0.00 )
From net income
   $ 0.09     $ 0.07       $ 0.16     $ 0.08     $ 0.01       $ 0.09  
                                                     
Weighted average shares of common
                                                    
   stock outstanding, basic
     88,380       -         88,380       83,815       -         83,815  
                                                     
Weighted average shares of common
                                                    
   stock outstanding, diluted
     89,615       -         89,615       84,929       -         84,929  
                                                     
                                                     
(a) Non-cash stock-based compensation expense of $703,000 in costs of product revenue, $1,331,000 in research and development and $2,638,000 in sales, general and administrative for the three months ended June 29, 2008 and $550,000 in costs of product revenue, $730,000 in research and development and $1,272,000 in sales, general and administrative for the three months ended June 24, 2007.
  
                                                     
(b) Amortization expense of $4,806,000 for the three months ended June 29, 2008 and $3,664,000 for the three months ended June 24, 2007 recognized on intangible assets resulting from acquisitions.
  
                                                     
(c) Tax effects of non-cash stock-based compensation expense, amortization related to acquisition related intangible assets and other non-GAAP adjustments.
  
                                                     
(d) FAS 141 adjustment of $3.0 million related to the valuation of inventory in connection with the purchase of COTCO.
  
                                                     
(e) IPR&D charge of $950,000 specifically related to the COTCO acquisition.
                            
                                                     
(f) Gain on the sale of shares of Color Kinetics common stock.
                                      
                                                     
(g) Net gain on sale of certain patents related to the discontinued Cree Microwave segment.
                    
                                                     

 
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The following is a reconciliation showing how Cree, Inc.'s income statements for fiscal years 2008 and 2007 would appear if they were adjusted for the items noted below.
  
                                         
                                         
CREE, INC.
Reconciling Items to Annual Financial Statements - GAAP to Non-GAAP
(in thousands, except per share amounts)
(Unaudited)
                                         
                                         
   
Year Ended
    
Year Ended
  
   
June 29, 2008
    
June 24, 2007
  
   
GAAP
    
Adjustments
      
As Adjusted
    
GAAP
    
Adjustments
      
 As Adjusted
  
                                         
Product revenue
   $ 464,907     $ -       $ 464,907     $ 364,718     $ -       $ 364,718  
Contract revenue
     28,389       -         28,389       29,403       -         29,403  
Total revenue
     493,296       -         493,296       394,121       -         394,121  
                                                     
Cost of product revenue
     304,663       (2,913 )
(a)
     301,750       237,125       (6,328 )
(a), (i)
     230,797  
Cost of contract revenue
     22,806       -         22,806       23,008       -         23,008  
Total cost of sales
     327,469       (2,913 )       324,556       260,133       (6,328 )       253,805  
                                                     
Gross margin
     165,827       2,913         168,740       133,988       6,328         140,316  
Gross margin percentage
     33.6 %               34.2 %     34.0 %               35.6 %
                                                     
Operating expenses:
                                                    
Research and development
     58,846       (4,362 )
(a)
     54,484       58,836       (4,286 )
(a), (e)
     54,550  
Sales, general and administrative
     76,607       (9,758 )
(a)(b)
     66,849       53,105       (5,047 )
(a)
     48,058  
Amortization of acquisition related intangibles
     17,127       (17,127 )
(c)
     -       4,192       (4,192 )
(c)
     -  
Loss on disposal and impairment of long-lived assets
     1,206       -         1,206       1,199       -         1,199  
Total operating expenses
     153,786       (31,247 )       122,539       117,332       (13,525 )       103,807  
                                                     
Operating income
     12,041       34,160         46,201       16,656       19,853         36,509  
Operating income percentage
     2.4 %               9.4 %     4.2 %               9.3 %
                                                     
Non-operating income:
                                                    
Gain (loss) on investments in securities
     14,117       (14,117 )
(d)
     -       19,233       (19,233 )
(d)
     -  
Interest and other non-operating income, net
     14,891       -         14,891       15,222       -         15,222  
Income from continuing operations before income taxes
     41,049       20,043         61,092       51,111       620         51,731  
                                                     
Income tax expense
     9,237       4,510  
(f)
     13,747       918       15,029  
(f)
     15,947  
Net income from continuing operations
     31,812       15,533         47,345       50,193       (14,409 )       35,784  
                                                     
(Loss) gain from discontinued operations, net of related tax
     1,627       (1,820 )
(g)
     (193 )     7,141       (7,566 )
(h)
     (425 )
Net income
   $ 33,439     $ 13,713       $ 47,152     $ 57,334     $ (21,975 )     $ 35,359  
                                                     
Earnings per diluted share:
                                                    
From continuing operations
   $ 0.36     $ 0.18       $ 0.54     $ 0.63     $ (0.18 )     $ 0.45  
From discontinued operations
   $ 0.02     $ (0.02 )     $ (0.00 )   $ 0.09     $ (0.10 )     $ (0.01 )
From net income
   $ 0.38     $ 0.16       $ 0.54     $ 0.72     $ (0.28 )     $ 0.44  
                                                     
Weighted average shares of common
                                                    
   stock outstanding, basic
     86,366       -         86,366       78,560       -         78,560  
                                                     
Weighted average shares of common
                                                    
   stock outstanding, diluted
     88,077       -         88,077       79,496       -         79,496  
                                                     
                                                     
                                                     
(a) Non-cash stock-based compensation expense of $2,913,000 in costs of product revenue, $4,362,000 in research and development and $8,710,000 in sale, general and administrative for the year ended June 29, 2008 and $3,300,000 in costs of product revenue, $3,400,000 in research and development and $5,047,000 in sale, general and administrative for the year ended June 24, 2007.
  
                                                     
(b) Personal property assessment of $1,048,000 related to finalizing the audits of our 2002 through 2007 property tax returns.
  
                                                     
(c) Amortization expense of $17,127,000 for the year ended June 29, 2008 and $4,192,000 for the year ended June 24, 2007 recognized on acquisition related intangibles.
  
                                                     
(d) Gain on the sale of shares of Color Kinetics common stock during the respective periods.
                    
                                                     
(e) IPR&D charge of $950,000 specifically related to the COTCO acquisition.
                            
                                                     
(f) Tax effects of non-cash stock-based compensation expense, amortization related to acquisition related intangible assets and other non-GAAP adjustments.
  
                                                     
(g) Net gain on sale of certain patents related to the discontinued Cree Microwave segment.
                    
                                                     
(h) Tax benefit related to the the release of contingent tax reserves associated with the completion of Internal Revenue Service audits of fiscal 2003, 2004 and 2005 Federal tax returns, and gain realized as a result of entering into a sublease agreement at Cree Microwave.
  
                                                     
(i) FAS 141 adjustment of $3.0 million related to the valuation of inventory in connection with the purchase of COTCO.
  
                                                     

 
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