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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (15193)	1/14/2000 9:40:00 PM
From: uel_Dave	Respond to of 54805

Thanks Bill, I was very specific with the March 7th AGM date in my e-mail and was surprised to see March 22 in Scott's response today. Well Julie Cunningham could be the tie breaker / best out of three Investor relations people :-) David

To: LindyBill who wrote (15193)	1/14/2000 11:41:00 PM
From: StockHawk	Read Replies (3) \| Respond to of 54805

A little CREE DD: -The 9/6/99 issue of Fortune listed CREE as #15 on a list of the 100 fastest growing co's in America. -On 1/3/00 CREE reported 2nd Q. results. Revenues were approx. $24 mil, a 70% Q over Q increase, and suggesting a run rate of $96 mil (24 x 4). This highlights the magnitude of their backlog which stood at $111 mil on 9/1/99, which was up from a backlog of $37 mil at the end of June. Press releases issued 12/8/99 and 12/30/99 noted new orders of $22 mil and $11 mil. -not all areas showed improvements. "During fiscal 1999, sales from our display business declined 96% from the prior year and we have chosen to discontinue this product line." -the company reported gross margins of 53% in the last quarter -for the full fiscal year 1999 sales of LEDs grew by 160% while prices declined 38% -some people have mentioned that CREE is paid for doing their research. Here are the facts: In 1999 the company spent $9.4 million on R&D. Against this they received $6.6 mil in US Gov. grants and $4.5 mil from other companies for an implied profit of $1.7 mil. In 1998 those numbers were $8.6 R&D, $8.2 gov and $3.5 other cos. -just 5 customers accounted for 81% of revenue in 1999. One company, Osram, a subsidiary of Siemens, accounted for 37%. CREE notes that Siemens could become a formidable competitor. -On 1/3/00 CREE announced a stock offering of 2.6 to 3 million shares. A previous stock offering, on 2/17/99 was for 1.3 to 1.5 mil shares. In both offerings all the shares where being sold by the company, none by insiders. -management owns about 11% of the company -the stated use of the proceeds from the current stock offering is for facilities expansion, both through purchase and construction. -a 12/21/99 press release noted plans for construction of a new 125,000 sq ft production facility that is projected to increase capacity by 45% -62% of 1999 revenues were derrived from sales to parties outside the US -notes on the competitive situation taken from SEC filing dated 1/14/00: "Our primary competition for the blue and green LED products comes from Nichia Chemical Industries, Ltd., Toyoda Gosei Co. Ltd. and LumiLeds Lighting, a joint venture between Agilent Technologies and Philips Lighting, which currently market blue and green LED products that are brighter than our high brightness blue and green LED devices. In addition, Uniroyal Technologies, Inc. has announced its intention to begin production of blue and green LEDs in January 2000. Existing competitors historically have been successful in the market for outdoor display applications because of the brightness demands of outdoor displays, as well as the decreased price sensitivity of the outdoor display market. We believe our brighter blue and green LEDs have enabled us to compete successfully in this market because our LEDs can be used in the same applications at a lower cost than competing products. At the same time, we continue development to improve the brightness of our LEDs to enhance our ability to compete in this market. We believe that our approach to manufacturing blue and green LEDs from SiCsubstrates offers a more cost-effective design and process than our competitors,who use a sapphire substrate. Our smaller chip design, which is compatible with industry trends toward package miniaturization, enables the diode to use less material and permits more devices to be fabricated on each wafer processed, lowering the cost per unit." -Current Products: PRODUCT USER APPLICATIONS --------------------------------------------------------------------------------------------------------- Blue and green LEDs - Backlighting in applications such as automotive dashboards and LCDs, including wireless handsets and other lighting applications - Large indoor full color displays, such as arena video screens - Large outdoor full color displays - White light products to replace miniature incandescent bulbs, such as those used in automobile map lights and other lighting applications - Traffic signals --------------------------------------------------------------------------------------------------------- Wafer products - Manufacture of LEDs - Research and development for new semiconductor applications --------------------------------------------------------------------------------------------------------- SiC crystals - Gemstones --------------------------------------------------------------------------------------------------------- RF transistors (first product available on a - Communications and other wireless test sample basis) applications -PRODUCTS UNDER DEVELOPMENT PRODUCT CATEGORY POTENTIAL USER APPLICATIONS --------------------------------------------------------------------------------------------------------- High power RF and microwave devices - Power amplifier systems for wireless applications, such as personal communications service base stations - Power amplifier systems for third generation, or 3G, wireless local loop and multi-channel, multi-point distribution service transmitter sites - Digital broadcast systems - Solid-state radar systems --------------------------------------------------------------------------------------------------------- Power devices - Industrial motor controls - Electric vehicles - High voltage power supplies - Lighting ballasts - Factory robotics - Locomotive applications - Solid-state power transmission --------------------------------------------------------------------------------------------------------- Blue and ultraviolet lasers - High density optical storage, such as CDs and DVDs --------------------------------------------------------------------------------------------------------- High temperature devices - Automotive and aerospace electronics ------------------------------------------------------------ StockHawk