News Column

Cree Reports Financial Results for 2Q Fiscal 2014

January 30, 2014

Cree, Inc. , a provider of LED lighting, has announced revenue of $415.1 million for its second quarter of fiscal 2014, ended December 29, 2013 . In a release on January 21 , the company noted that this represents a 20 percent increase compared to revenue of $346.3 million reported for the second quarter of fiscal 2013, and a 6 percent increase compared to the first quarter of fiscal 2014. GAAP net income for the second quarter was $35.7 million , or $0.29 per diluted share, an increase of 75 percent year-over-year compared to GAAP net income of $20.4 million , or $0.18 per diluted share, for the second quarter of fiscal 2013. On a non-GAAP basis, net income for the second quarter of fiscal 2014 was $56.8 million , or $0.46 per diluted share, an increase of 54 percent year-over-year compared to non-GAAP net income for the second quarter of fiscal 2013 of $36.9 million , or $0.32 per diluted share. "Fiscal Q2 was another strong quarter as revenue increased to a record $415 million driven by strong growth in LED fixtures and LED bulbs. For the first half of fiscal 2014, revenue is up 22 percent from the first half of fiscal 2013 and Non-GAAP operating profit is up 38 percent," said Chuck Swoboda , Cree Chairman and CEO. "Our strategy is working, the business is growing and we've made great initial progress building the Cree brand." -Gross margin decreased 110 basis points from Q1 of fiscal 2014 to 37.5 percent on a GAAP basis and decreased 100 basis points to 38.2 percent on a non-GAAP basis. -Cash and investments increased by $95.6 million from Q1 of fiscal 2014 to $1.2 billion . -Accounts receivable (net) increased by $4.3 million from Q1 of fiscal 2014 to $213.5 million , with days sales outstanding of 46. -Inventory increased $17.1 million from Q1 of fiscal 2014 to $234.5 million , with days of inventory of 81 days. Recent Business Highlights: -Released the LEDway High Output (HO) LED street light to address large multi-lane freeways and expressway applications, replacing inefficient High Pressure Sodium (HPS) lighting up to 400 watts; -Introduced the CXB High-Bay LED luminaire, which cuts energy consumption in half and nearly eliminates maintenance costs, making it the ideal replacement for energy-wasting fluorescent and HID high- bay luminaires; -Launched the new XLamp CXA 3590 LED array, the ideal light source to replace 250-watt metal-halide fixtures. This new array delivers up to 16,225 lumens at 85oC, 68 percent more lumens compared to Cree's previous brightest array; -Expanded our product line with the introduction of the new Cree LED 75-watt Replacement Bulb. Business Outlook: For its third quarter of fiscal 2014 ending March 30 , Cree targets revenue in a range of $390 million to $420 million with GAAP gross margin targeted to be 37.7 percent+/- and non-GAAP gross margin targeted to be 38.5 percent+/-. Our GAAP gross margin targets include stock-based compensation expense of approximately $3.2 million , while our non-GAAP targets do not. Operating expenses are targeted to be similar to Q2. The tax rate is targeted at 21.0 percent+/- for the third quarter of fiscal 2014. GAAP net income is targeted at $24 million to $32 million , or $0.19 to $0.26 per diluted share. Non-GAAP net income is targeted in a range of $42 million to $51 million , or $0.34 to $0.41 per diluted share. The GAAP and non-GAAP net income per diluted share targets are based on an estimated 123.5 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles and stock-based compensation expense of $0.15 per diluted share. For our fiscal fourth quarter, the trends in the business suggest that the Company is in a good position to grow LED fixtures, LED bulbs and LED components. More Information: cree.com ((Comments on this story may be sent to health@closeupmedia.com ))


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