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To: unclewest who wrote (2541)	3/30/2000 9:16:00 AM
From: pompsander	Read Replies (1) \| Respond to of 10714

For what it is worth.....I believe the window dressing this quarter is worse than any I have ever seen. This is not the quarter that a big time money manager wants to show clients that they actually held CDNow or even AMZN all quarter! Too much explaining to do. So, we are rotating out of the unknowns or too weirds into oil, retail, autos, etc. CRee caught in the action. Next week, things start to sort out again. JMHO

To: unclewest who wrote (2541)	3/30/2000 2:49:00 PM
From: wildhart	Respond to of 10714

UncleWest, Thanks for replying to my post. I've enjoyed reading your contributions to this board for quite some time. I have posted below excerpts from the 10Q for the 2nd QTR of fiscal 2000 which I think are pertinent to this discussion. As you can see it was an increase in LED sales that had increased 105% in 2nd qtr of 2000 vs. the 2nd qtr of 1999. In that light, a 66% increase represents a marked slowing of growth!! This is not good. Also, a point of clarification. Cree's fiscal year ends in June. We are currently in the 2nd half of Cree's Year 2000 fiscal year. Therefore, the last 2 qtrs were for the first half of FY 2000. To wit (from the 10Q): "LED products represented 57% of our revenue for the first six months of fiscal 2000 and represented 48% of our revenue in the first six months of fiscal 1999." Thus, in this light, Ms. Merrill's remarks becomes even confusing! Is she referring to FY or Calender Year. The first half of FY LED unit sales growth was 88% with 99% dollar sales growth vs the first half of 1999. Again, from the 10Q: "Six Months Ended December 26, 1999 and December 27, 1998"......"This rise in product revenue was largely a result of the 99% increase in sales of our LED products in the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Our high brightness LED products experienced the heaviest demand. While our LED chip volume has grown 88% in the first six months of fiscal 2000 over units shipped in the first six months of fiscal 1999, our average sales prices for LEDs have also increased 6%"..... Also, it appears from the quarterly and semiannual results that the growth in LED sales is increasing from 99% to 105% which seems to me to be a 6% increase in the growth rate of LED sales sequentially. Putting all this together leads me to the conclusion that either growth is slowing, an enormous amount, or the CFO misspoke or the CFO doesn't know what is going on within her own her own company. Or, maybe I am missing something here? After writing this post and rereading Ms Merrill's remarks I realize that she is referring to overall company revenues. This is obvious, but for some reason I was focused on LEDs. None-the-less, 66% is also not good. This means that there will be a slow down in sales in the 2nd half considering that the last qtr saw in increase in revenues of 71% and the first half overall saw increased revenues of 67%. Simple arithmetic indicates that growth will slow in the 2nd half to 65%. This doesn't make sense considering the demand for the higher margin high brightness LEDs is leads growth. Unless growth is slowing! Also FROM THE 10Q.....During the first six months of fiscal 2000, revenues derived from sales of high brightness LEDs were greater than 60% of the total LED sales mix. Historically, we have experienced low margins with many new product introductions, including the high brightness products. We have continued to make improvements to output and yield since the high brightness products were introduced in fiscal 1999. During the first six months of fiscal 2000, we made progress towards our fiscal 2000 goal of a 50% cost reduction for high brightness LED products through a 36% reduction in unit costs from the fourth quarter of fiscal 1999. During the remainder of fiscal 2000, we plan to focus on reducing unit costs through higher production yields and increased volume..... ....3 Months REVENUE. Revenue increased 71% from $14.0 million in the second quarter of fiscal 1999 to $23.9 million in the second quarter of fiscal 2000. This increase was attributable to an increase in product revenue of 73% from $12.8 million in the second quarter of fiscal 1999 to $22.1 million in the second quarter of fiscal 2000. This rise in product revenue was a result of the 105% increase in sales of our LED products in the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. Growth in LED volume was due to a significant increase in demand for high brightness blue and green LED products which represented over 50% of total LED shipments for the second quarter of fiscal 2000. As a result of the increasing mix of high brightness products, average LED sales prices have increased 25% in the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999.>> Any thoughts on this would be of interest. Wildhart PS: Maybe Cree should let Fran do the public speaking!