Cree, Inc. Reports Record Third Quarter Revenue

Company Reiterates Targets for Fiscal Year 2002;

Charles Swoboda Named CEO, Hunter Continues as Executive Chairman



Apr 11, 2001, 01:00 ET from Cree, Inc.

    DURHAM, N.C., April 11 /PRNewswire/ -- Cree, Inc. (Nasdaq: CREE) today
 reported record revenue of $53,365,000, a 29 percent increase, sequentially,
 and an 81 percent increase over the $29,528,000 reported in the year ago
 period.  Product revenue grew 84 percent on a year-over-year basis, and
 28 percent, sequentially, to $48,042,000 over the $26,177,000 reported in the
 comparable quarter a year ago.  Excluding intangible asset amortization and a
 one-time charge of $17,400,000 for acquired in-process research and
 development as a result of the acquisition of UltraRF, net income grew
 53 percent to $13,724,000, or $0.18 per diluted share, over the $8,962,000, or
 $0.12 per diluted share, reported in the year ago period (as adjusted for the
 company's 2-for-1 stock split in December 2000).
     For the nine-month period, the company reported record revenue of
 $132,501,000 compared to $75,203,000 representing a 76 percent increase over
 the year ago period.  Product revenue increased 80 percent to $119,940,000
 over the $66,562,000 reported for the comparable period a year ago.  Net
 income rose 110 percent to $40,239,000, or $0.53 per diluted share, before
 intangible amortization and the one-time charge, and compares with net income
 of $19,163,000, or $0.28 per diluted share (as adjusted for the company's
 2-for-one stock split), for the corresponding period.
     Neal Hunter, Chairman and CEO stated, "We are pleased with our record
 revenue and strong profitability for the third quarter despite the global
 economic slowdown.  With a strong balance sheet and new capital
 infrastructure, we are in a unique position to focus on our next generation
 products that should position us to accelerate growth in fiscal 2002 and
 beyond."
     In addition, Cree today reaffirmed that its business plan for fiscal year
 2002 revenue is in the range of $200 to $240 million with earnings per share,
 before intangible amortization, to be flat to a 20 percent increase on a year-
 over-year basis.
     Cree also announced a key management change in the promotion of Chuck
 Swoboda to Cree's President and Chief Executive Officer effective
 June 25, 2001.  Neal Hunter will continue in a full-time capacity as Executive
 Chairman of Cree and focus on strategic initiatives for the company.  Swoboda,
 in his new position, will be responsible for Cree's day-to-day operations, and
 customer and shareholder relationships.
     Hunter added, "I am pleased to announce the promotion of Chuck as CEO.  He
 has played a fundamental role in the development and growth of Cree and he has
 proven his capability for leading the company.  His dedication and enthusiasm
 has been a key influence to our success over the past five years.  Chuck's
 assumption of the CEO's responsibilities will enable me to focus my full-time
 attention to strategic initiatives and expansion of our business."
     Cree, Inc. will host a conference call at 4:30 p.m. EDT today to review
 the details of the third quarter.  The conference call will be available to
 all interested parties through a live audio web broadcast via the Internet.
 Log onto Cree's website at www.cree.com and go to "Investor Info" for webcast
 details.  The call will be archived and available on the website through the
 sixth calendar day following the webcast.
     North Carolina-based Cree, Inc. develops and manufactures semiconductor
 materials and devices based on silicon carbide (SiC), gallium nitride (GaN)
 and related compounds. The company's products include blue and green LEDs, RF
 power transistors for use in wireless infrastructure applications, SiC
 crystals used in the production of unique gemstones and SiC wafers sold for
 use in research and development. Cree has new product initiatives based on its
 experience in SiC and GaN-based semiconductors, including blue laser diodes
 for optical storage applications, high frequency microwave devices for radar
 and other communications systems, and power devices for power conditioning and
 switching.  For more information on Cree, visit http://www.cree.com.
 
     This press release contains forward-looking statements involving risks and
 uncertainties that may cause actual results to differ materially from those
 indicated including statements regarding targeted financial results for future
 periods.  Actual results could differ materially due to a number of factors,
 including uncertainty regarding economic conditions; risks from increased
 competition; uncertain product demand; uncertainty whether we can achieve our
 targets for increased yields and cost reductions needed to permit lower
 product pricing without margin reductions; risks associated with the
 production ramp-up for our ultra bright LED chips, including the possibility
 of unexpected delays, increased costs and manufacturing difficulties or less
 than expected market acceptance; 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; the
 possibility of adverse results in our pending intellectual property
 litigation; uncertainty whether our intellectual property rights will provide
 meaningful protection; concentration of our business among few customers; 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 25, 2000
 and subsequent reports filed with the Commission.
 
 
 
                  CONSOLIDATED FINANCIAL STATEMENT HIGHLIGHTS
                     (in thousands, except per share data)
 
 
                                  Three Months Ended*      Nine Months Ended*
                                 3/25/2001** 03/26/2000  3/25/2001** 03/26/2000
                                 (Unaudited)(Unaudited)(Unaudited)(Unaudited)
     Product Revenue               $48,042    $26,177    $119,940   $66,562
     Contract Revenue                5,323      3,351      12,561     8,641
     Total Revenue                  53,365     29,528     132,501    75,203
 
     Cost of Product Sales          23,819     10,971      54,471    30,542
     Cost of Contract Sales          3,849      2,758       9,693     6,658
     Total Cost of Sales            27,668     13,729      64,164    37,200
 
     Gross Profit                   25,697     15,799      68,337    38,003
 
     Operating Expenses:
     Research & Development          3,627      2,246       8,023     5,088
     Sales, General &
      Administrative                 5,105      2,969      12,072     7,792
     Amortization of Purchased
      Intangibles                    2,280         --       2,280        --
     Other Expenses                    159      1,169         221     1,262
     Income From Operations         14,526      9,415      45,741    23,861
 
     Other Non Operating Income        162        495          63       495
     Net Interest Income             3,825      3,768      12,930     4,894
     Income Before Income Taxes,
       IPR&D Related To
        Acquisition                 18,513     13,678      58,734    29,250
 
     Acquired IPR&D                 17,400         --      17,400        --
     Net Income Before Tax           1,113     13,678      41,334    29,250
     Income Taxes                    6,294      4,716      20,000    10,087
     Net Income (Loss)             $(5,181)    $8,962     $21,334   $19,163
 
     Net Income (Loss) Per Share
      (diluted)                     $(0.07) #   $0.12  #    $0.28 #   $0.28 #
 
     Weighted Average Shares of
      Common
        Stock Outstanding, diluted  76,992  #  73,122  #   75,818 #  68,844 #
 
     Net Income Excluding
       Purchased Intangibles &
        IPR&D                      $13,724     $8,962     $40,239   $19,163
 
     Net Income Per Share
      Excluding  and
         One Time Charge             $0.18  #   $0.12  #    $0.53 #   $0.28 #
 
 
 
                                                    Balance Sheet Highlights*
                                                03/25/2001    **    06/25/2000
 
     Accounts Receivable, Net                    $  31,540           $  12,406
     Inventory                                      15,853               9,320
     Current Assets                                256,627             289,019
     Total Assets                                  611,515             486,202
     Current Liabilities                            39,736              23,062
     Long Term Debt                                     --                  --
     Shareholders' Equity                        $ 571,341           $ 463,140
 
 
     *  Consolidated statements including the impact of the acquisition of
     Nitres, Inc. in a pooling of interests transaction.
 
     ** Consolidated statements including the impact of the acquisition of
     UltraRF in a purchase accounting transaction.
 
     # Earnings per share reflects adjustment for two-for-one stock split
     effective 12/1/00
 
 
 
                         Operating Segment Information
                                 (in thousands)
 
 
                                     Three Months Ended    Nine Months Ended
                                 03/25/2001 03/26/2000 03/25/2001 03/26/2000
                                (Unaudited)(Unaudited)(Unaudited)(Unaudited)
 
     Revenue:
 
     Cree, Inc.                    $44,064    $29,528    $123,200   $75,203
     UltraRF                         9,301         --       9,301        --
     Total Revenue                  53,365     29,528     132,501    75,203
 
     Net Income (Loss) Before Income
      Taxes:
 
     Cree, Inc.                    $18,579    $13,678     $58,800   $29,250
     UltraRF                       (17,466)        --     (17,466)       --
     Net Income (Loss) Before
      Income Taxes                   1,113     13,678      41,334    29,250
 
 

SOURCE Cree, Inc.
    DURHAM, N.C., April 11 /PRNewswire/ -- Cree, Inc. (Nasdaq: CREE) today
 reported record revenue of $53,365,000, a 29 percent increase, sequentially,
 and an 81 percent increase over the $29,528,000 reported in the year ago
 period.  Product revenue grew 84 percent on a year-over-year basis, and
 28 percent, sequentially, to $48,042,000 over the $26,177,000 reported in the
 comparable quarter a year ago.  Excluding intangible asset amortization and a
 one-time charge of $17,400,000 for acquired in-process research and
 development as a result of the acquisition of UltraRF, net income grew
 53 percent to $13,724,000, or $0.18 per diluted share, over the $8,962,000, or
 $0.12 per diluted share, reported in the year ago period (as adjusted for the
 company's 2-for-1 stock split in December 2000).
     For the nine-month period, the company reported record revenue of
 $132,501,000 compared to $75,203,000 representing a 76 percent increase over
 the year ago period.  Product revenue increased 80 percent to $119,940,000
 over the $66,562,000 reported for the comparable period a year ago.  Net
 income rose 110 percent to $40,239,000, or $0.53 per diluted share, before
 intangible amortization and the one-time charge, and compares with net income
 of $19,163,000, or $0.28 per diluted share (as adjusted for the company's
 2-for-one stock split), for the corresponding period.
     Neal Hunter, Chairman and CEO stated, "We are pleased with our record
 revenue and strong profitability for the third quarter despite the global
 economic slowdown.  With a strong balance sheet and new capital
 infrastructure, we are in a unique position to focus on our next generation
 products that should position us to accelerate growth in fiscal 2002 and
 beyond."
     In addition, Cree today reaffirmed that its business plan for fiscal year
 2002 revenue is in the range of $200 to $240 million with earnings per share,
 before intangible amortization, to be flat to a 20 percent increase on a year-
 over-year basis.
     Cree also announced a key management change in the promotion of Chuck
 Swoboda to Cree's President and Chief Executive Officer effective
 June 25, 2001.  Neal Hunter will continue in a full-time capacity as Executive
 Chairman of Cree and focus on strategic initiatives for the company.  Swoboda,
 in his new position, will be responsible for Cree's day-to-day operations, and
 customer and shareholder relationships.
     Hunter added, "I am pleased to announce the promotion of Chuck as CEO.  He
 has played a fundamental role in the development and growth of Cree and he has
 proven his capability for leading the company.  His dedication and enthusiasm
 has been a key influence to our success over the past five years.  Chuck's
 assumption of the CEO's responsibilities will enable me to focus my full-time
 attention to strategic initiatives and expansion of our business."
     Cree, Inc. will host a conference call at 4:30 p.m. EDT today to review
 the details of the third quarter.  The conference call will be available to
 all interested parties through a live audio web broadcast via the Internet.
 Log onto Cree's website at www.cree.com and go to "Investor Info" for webcast
 details.  The call will be archived and available on the website through the
 sixth calendar day following the webcast.
     North Carolina-based Cree, Inc. develops and manufactures semiconductor
 materials and devices based on silicon carbide (SiC), gallium nitride (GaN)
 and related compounds. The company's products include blue and green LEDs, RF
 power transistors for use in wireless infrastructure applications, SiC
 crystals used in the production of unique gemstones and SiC wafers sold for
 use in research and development. Cree has new product initiatives based on its
 experience in SiC and GaN-based semiconductors, including blue laser diodes
 for optical storage applications, high frequency microwave devices for radar
 and other communications systems, and power devices for power conditioning and
 switching.  For more information on Cree, visit http://www.cree.com.
 
     This press release contains forward-looking statements involving risks and
 uncertainties that may cause actual results to differ materially from those
 indicated including statements regarding targeted financial results for future
 periods.  Actual results could differ materially due to a number of factors,
 including uncertainty regarding economic conditions; risks from increased
 competition; uncertain product demand; uncertainty whether we can achieve our
 targets for increased yields and cost reductions needed to permit lower
 product pricing without margin reductions; risks associated with the
 production ramp-up for our ultra bright LED chips, including the possibility
 of unexpected delays, increased costs and manufacturing difficulties or less
 than expected market acceptance; 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; the
 possibility of adverse results in our pending intellectual property
 litigation; uncertainty whether our intellectual property rights will provide
 meaningful protection; concentration of our business among few customers; 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 25, 2000
 and subsequent reports filed with the Commission.
 
 
 
                  CONSOLIDATED FINANCIAL STATEMENT HIGHLIGHTS
                     (in thousands, except per share data)
 
 
                                  Three Months Ended*      Nine Months Ended*
                                 3/25/2001** 03/26/2000  3/25/2001** 03/26/2000
                                 (Unaudited)(Unaudited)(Unaudited)(Unaudited)
     Product Revenue               $48,042    $26,177    $119,940   $66,562
     Contract Revenue                5,323      3,351      12,561     8,641
     Total Revenue                  53,365     29,528     132,501    75,203
 
     Cost of Product Sales          23,819     10,971      54,471    30,542
     Cost of Contract Sales          3,849      2,758       9,693     6,658
     Total Cost of Sales            27,668     13,729      64,164    37,200
 
     Gross Profit                   25,697     15,799      68,337    38,003
 
     Operating Expenses:
     Research & Development          3,627      2,246       8,023     5,088
     Sales, General &
      Administrative                 5,105      2,969      12,072     7,792
     Amortization of Purchased
      Intangibles                    2,280         --       2,280        --
     Other Expenses                    159      1,169         221     1,262
     Income From Operations         14,526      9,415      45,741    23,861
 
     Other Non Operating Income        162        495          63       495
     Net Interest Income             3,825      3,768      12,930     4,894
     Income Before Income Taxes,
       IPR&D Related To
        Acquisition                 18,513     13,678      58,734    29,250
 
     Acquired IPR&D                 17,400         --      17,400        --
     Net Income Before Tax           1,113     13,678      41,334    29,250
     Income Taxes                    6,294      4,716      20,000    10,087
     Net Income (Loss)             $(5,181)    $8,962     $21,334   $19,163
 
     Net Income (Loss) Per Share
      (diluted)                     $(0.07) #   $0.12  #    $0.28 #   $0.28 #
 
     Weighted Average Shares of
      Common
        Stock Outstanding, diluted  76,992  #  73,122  #   75,818 #  68,844 #
 
     Net Income Excluding
       Purchased Intangibles &
        IPR&D                      $13,724     $8,962     $40,239   $19,163
 
     Net Income Per Share
      Excluding  and
         One Time Charge             $0.18  #   $0.12  #    $0.53 #   $0.28 #
 
 
 
                                                    Balance Sheet Highlights*
                                                03/25/2001    **    06/25/2000
 
     Accounts Receivable, Net                    $  31,540           $  12,406
     Inventory                                      15,853               9,320
     Current Assets                                256,627             289,019
     Total Assets                                  611,515             486,202
     Current Liabilities                            39,736              23,062
     Long Term Debt                                     --                  --
     Shareholders' Equity                        $ 571,341           $ 463,140
 
 
     *  Consolidated statements including the impact of the acquisition of
     Nitres, Inc. in a pooling of interests transaction.
 
     ** Consolidated statements including the impact of the acquisition of
     UltraRF in a purchase accounting transaction.
 
     # Earnings per share reflects adjustment for two-for-one stock split
     effective 12/1/00
 
 
 
                         Operating Segment Information
                                 (in thousands)
 
 
                                     Three Months Ended    Nine Months Ended
                                 03/25/2001 03/26/2000 03/25/2001 03/26/2000
                                (Unaudited)(Unaudited)(Unaudited)(Unaudited)
 
     Revenue:
 
     Cree, Inc.                    $44,064    $29,528    $123,200   $75,203
     UltraRF                         9,301         --       9,301        --
     Total Revenue                  53,365     29,528     132,501    75,203
 
     Net Income (Loss) Before Income
      Taxes:
 
     Cree, Inc.                    $18,579    $13,678     $58,800   $29,250
     UltraRF                       (17,466)        --     (17,466)       --
     Net Income (Loss) Before
      Income Taxes                   1,113     13,678      41,334    29,250
 
 SOURCE  Cree, Inc.