Cree Reports Record Revenue for Second Quarter Fiscal Year 2003
Thursday January 16, 4:03 pm ET
Earnings Per Share Grew Sequentially 140 Percent Net Margin Increased to 16 Percent
DURHAM, N.C., Jan. 16 /PRNewswire-FirstCall/ -- Cree, Inc. (Nasdaq: CREE - News) today reported the highest quarterly revenue in the company's history for its fiscal year 2003 second quarter of $56,727,000, a 16 percent increase, sequentially, and a 38 percent increase over the $41,092,000 reported in the comparable quarter in the year ago period. Net income for the second quarter increased to $8,996,000, or $0.12 per diluted share, compared to a loss of $17,376,000, or $0.24 per share, reported for the second quarter of fiscal 2002. Gross margin for the second quarter increased to 41 percent of revenue as compared to 38 percent reported in the first quarter of fiscal year 2003. Net margins for the December 2002 quarter increased to 16% of revenue.
For the six-month period ended December 29, 2002, Cree reported revenue of $105,539,000, an increase of 25 percent over the $84,258,000 reported for the comparable period in fiscal year 2002. Net income for the six-month period was $12,879,000, or $0.17 per diluted share, compared to a loss of $10,915,000, or $0.15 per share, in the year ago period.
Chuck Swoboda, President and Chief Executive Officer of Cree stated, "We are extremely pleased with our results in terms of revenue and earnings. During the quarter our ability to maximize capacity through productivity improvements and a more favorable product mix provided us with the leverage to grow the business faster than expected and exit the quarter with the highest quarterly revenue in the company's history."
Cree, Inc. will host a conference call at 4:30 p.m. EST today to review the details of the second quarter. The conference call will be available to all interested parties through a live audio web broadcast via the Internet. Log onto Cree's web site at www.cree.com and go to "Investor Info" for web cast details. The call will be archived and available on the web site through January 23, 2003.
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 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 could differ materially due to a number of factors, including risks associated with the production ramp-up for our new products such as our MegaBright(TM) and XBright(TM) LED chips and our LDMOS 8 RF transistor product family, including risks that we will be unable to achieve necessary improvements to these products as well as the possibility of unexpected delays, increased costs and manufacturing difficulties or less than expected market acceptance; 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; uncertain product demand; risks from increased competition; uncertainty regarding economic conditions; uncertainty whether we can achieve our targets for increased yields and cost reduction needed to protect our margins; risks associated with the planned release of new products under development, including the possibility we will be unable to develop and manufacture commercially viable versions of such products; risks that our investments in third parties will generate losses; and other factors discussed in our filings with the Securities and Exchange Commission, including our report on Form 10-K for the year ended June 30, 2002 and subsequent reports filed with the Commission.
Cree and the Cree logo are registered trademarks, and MegaBright and X-Bright are trademarks of Cree, Inc.
-- Tables Follow --
CREE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Six Months Ended
12/29/2002 12/23/2001 12/29/2002 12/23/2001
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Product revenue $49,222 $36,873 $91,376 $75,451
Contract revenue 7,505 4,219 14,163 8,807
Total revenue 56,727 41,092 105,539 84,258
Cost of product sales 27,510 18,508 52,627 38,420
Cost of contract sales 5,677 3,209 10,666 6,559
Total cost of sales 33,187 21,717 63,293 44,979
Gross profit 23,540 19,375 42,246 39,279
Operating expenses:
Research and development 7,667 6,748 14,231 10,853
Sales, general and
administrative 6,474 5,582 14,299 11,314
Amortization of purchased
intangibles -- 2,256 -- 4,511
Other expense 1,423 18,820 1,491 19,670
Income from operations 7,976 (14,031) 12,225 (7,069)
Other non operating
(income) expense (2,916) 11,794 (2,516) 11,794
Net interest income 1,265 1,353 2,663 3,490
Income (loss) before income
taxes 12,157 (24,472) 17,404 (15,373)
Income taxes (benefit) 3,161 (7,096) 4,525 (4,458)
Net income (loss) $8,996 $(17,376) $12,879 $(10,915)
Net income (loss) per share $0.12 $(0.24) $0.17 $(0.15)
Weighted average shares of
common stock outstanding,
basic 73,051 72,457 72,899 72,705
Weighted average shares of
common stock outstanding,
diluted 75,259 75,013 74,849 75,327
Reconciliation to adjusted
net income announced for
the three and six months
ended December 23, 2001:
Amortization of purchased
intangibles, net of tax -- 1,602 -- 3,203
Write off of fixed assets
due to technology changes,
net of tax -- 12,840 13,444
Reserve for investments in
privately held companies,
net of tax -- 8,770 8,770
Net income excluding
purchased intangibles and
other adjustments $8,996 $5,836 $12,879 $14,502
Net income per share
excluding purchased
intangibles and other
adjustments $0.12 $0.08 $0.17 $0.19
CREE, INC.
Operating Segment Information
(in thousands)
Three Months Ended Six Months Ended
12/29/2002 12/23/2001 12/29/2002 12/23/2001
(Unaudited) (Unaudited)(Unaudited) Unaudited)
Revenue:
Cree* $55,974 $33,311 $104,086 $66,804
Cree Microwave** 753 7,781 1,453 17,454
Total revenue $56,727 $41,092 $105,539 $84,258
Net income (loss) before
income taxes:
Cree* $11,819 $(22,713) $22,338 $(14,019)
Cree Microwave** 338 (1,759) (4,934) (1,354)
Total net income (loss) before
income taxes $12,157 $(24,472) $17,404 $(15,373)
* Includes interest income and other segment operating results
** Formerly UltraRF segment
CREE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
Balance Sheet
12/29/2002 6/30/2002
Assets:
Current assets:
Cash & equivalents & short term
investments $109,201 $106,140
Marketable securities -- 6,008
Accounts receivable, net 41,573 34,592
Inventory 15,144 17,966
Current portion of deferred taxes 3,726 3,322
Other current assets & prepaids 8,549 5,877
Total current assets 178,193 173,905
Property, plant & equipment, net 232,694 211,685
Long-term investments held to
maturity 68,002 64,225
Long term portion deferred income
taxes 21,750 27,365
Deposits 3,718 5,471
Patents, net 6,592 4,251
Other assets 15,942 17,293
Total assets $526,891 $504,195
Liabilities & Shareholders' Equity:
Current liabilities:
Accounts payable trade $16,050 $13,075
Accrued salaries & other expenses 11,769 8,979
Total current liabilities 27,819 22,054
Long term liabilities:
Other long term liabilites 27 37
Total long term liabilities 27 37
Shareholders' Equity:
Common stock 91 90
Additional paid in capital 512,243 508,432
Deferred compensation (446) (696)
Accumulated deficit (12,843) (25,722)
Total shareholders' equity 499,045 482,104
Total liabilities & shareholders' equity $526,891 $504,195
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Source: Cree, Inc.
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