CREE 2016 fiscal year second quarter earnings

CREE Inc. (NASDAQ: CREE) in the United States Eastern time January 19, 2016 announced that as of December 27, 2015, the company's fiscal 2016 second quarter revenue of $436 million, and the second quarter of fiscal 2015 revenue of $413 million compared to an increase of 5%, compared with the first quarter of fiscal year 2016 increased by 2%. 2016 in the second quarter of fiscal year (GAAP) GAAP net income of $14 million (or $0.14 per diluted share), compared with the second quarter of fiscal year 2015, the U.S. GAAP (GAAP) net income of $12 million (or $0.10 per diluted share). According to the non GAAP (non-GAAP) calculation, net income for the second quarter of fiscal year 2016 of $30 million (or $0.30 per diluted share), compared with the second quarter of fiscal year 2015 non GAAP (non-GAAP) net income of $38 million (or $0.33 per diluted share).

Cree Inc. chairman and chief executive officer Chuck Swoboda said: we achieved in the fiscal second quarter of the goal of building financial momentum. Thanks to solid revenue growth, good profits and operating costs leverage, our revenue exceeded the established target. Our lighting business continues to grow, LED business is stable, Wolfspeed power and RF business continues to move forward. Overall, we achieved good results in the first half of fiscal year 2016, to lay the foundation for strong growth in the second half of fiscal year 2016. "

According to the U.S. GAAP (GAAP) calculation, gross margin of 31%, the same as the first quarter of fiscal year 2016. According to non US GAAP (non-GAAP), gross profit 31.7%, the same as in the first quarter of fiscal year 2016;

The total amount of cash and investments of $617 million, $15 million less than the first quarter of fiscal year 2016;

The net accounts receivable of $183 million, $11 million less than the first quarter of fiscal year 2016, accounts receivable turnover was 38 days;

The inventory is $281 million, $8 million less than the first quarter of fiscal year 2016, the equivalent of 84 days of inventory;

The operating cash of $77 million, free cash flow of $42 million, 2016 in the second quarter of fiscal year stock repurchase $62 million.

Recent business highlights

The introduction of a breakthrough IG series car park lighting, and mass production. This is the first use of the new WaveMax technology product line, the novel design, functional intelligence, effective combination of control, consistency, efficiency, providing excellent and comfortable visual experience;

Thermo Fisher Scientific (Thermo Fisher Scientific) by Cree one-stop LED lighting in its North Carolina's Ashe Park solutions. Cree participated in the project from start to finish of the program design and management, replacing more than 2000 lamps, can achieve 3 years of investment recovery period, energy saving up to 40%;

In the second quarter of fiscal year, Cree LED business restructuring costs $3 million, including plant capacity and indirect cost reduction. Restructuring costs are only reflected in the results of the U.S. general accounting standards (GAAP).

Business outlook

In the third quarter of fiscal year 2016 (as of March 27, 2016), $400 million to $430 million revenue target to achieve Cree Inc. plan, GAAP (GAAP) gross profit target in 31.0%+/-, non GAAP gross profit target (non-GAAP) in 31.7%+/-. The U.S. general accounting standards (GAAP) gross profit target includes a stock compensation expense of approximately $3 million, while the non GAAP (non-GAAP) target does not include. U.S. general accounting standards (GAAP) operating expenses target of approximately $119 million, non GAAP (Non-GAAP) operating expenses target of approximately $100 million. 2016 fiscal year third quarter tax rate is expected at 20%+/-. GAAP (GAAP) net income target of $4 million to $11 million, or diluted earnings per share of 0.04 to $0.11, not including any net change of Cree produced in the Lunda investment. Non US GAAP (non-GAAP) net income target of $22 million to $29 million, or diluted earnings per share of $0.22 to $0.29. U.S. GAAP (GAAP) and non GAAP (non-GAAP) diluted net income per share target is based on the estimated 101 million diluted weighted average shares. Non GAAP (non-GAAP) target revenue excluding stock compensation costs, acquisition related intangible asset amortization or impairment, and any net change in Luanda investment, $0.18 per diluted share.

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