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Cree Reports Record Revenue
and Net Income

Quarterly Revenue increased 59% year-over-year to $268 Million

Cree, Inc. Press Release - 10/24/2010

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Cree XLamp MX-3 LED

Cree XLamp MX-3 LED

DURHAM, N.C. - Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced record revenue of $268.4 million for its first quarter of fiscal 2011, ended September 26, 2010. This represents a 59% increase compared to revenue of $169.1 million reported for the first fiscal quarter last year and a 1.5% increase compared to the fourth quarter of fiscal 2010. GAAP net income for the first quarter increased 176% year-over-year to $58.0 million, or $0.53 per diluted share, compared to GAAP net income of $21.0 million, or $0.23 per diluted share, for the first quarter of fiscal 2010. On a non-GAAP basis, net income for the first quarter of fiscal 2011 increased 142% year-over-year to $66.3 million, or $0.60 per diluted share, compared to non-GAAP net income for the first quarter of fiscal 2010 of $27.4 million or $0.30 per diluted share.

Q1 2011 Financial Metrics:

* Cash and investments increased $32.4 million from Q4 of fiscal 2010 to $1,098.8 million.
* Cash flow from operations was $88.5 million. Free cash flow (cash flow from operations less capital expenditures) was $26.9 million as we spent $61.6 million on capital expenditures.
* Accounts receivable (net) increased $5.5 million from Q4 of fiscal 2010 to $123.0 million, resulting in days sales outstanding of 41, an increase of 1 day from Q4 of fiscal 2010.
* Inventory increased $13.7 million from Q4 of fiscal 2010 to $125.9 million and represents 82 days of inventory, an increase of 6 days from Q4 of fiscal 2010.

Recent Business Highlights:

* Announced that The Home Depot customers can now purchase high-performance, affordable six-inch LED downlights powered with Cree TrueWhite® Technology.
* Announced a new 150mm LED wafer fab at our Research Triangle Park, N.C., facility that will allow Cree to help make LED lighting more cost-effective.
* Raised the standard for half-watt LED devices with the release of the Cree XLamp® ML-E LED.
* Extended Cree's lighting-class performance to a broader set of applications with the introduction of the XLamp MX-3 LED.

Business Outlook:

For its second quarter of fiscal 2011 ending December 26, 2010, Cree targets revenue in a range of $270 million to $280 million with GAAP net income of $51 million to $55 million, or $0.46 to $0.50 per diluted share. Non-GAAP net income is targeted in a range of $61 million to $65 million, or $0.56 to $0.60 per diluted share, based on an estimated $110.1 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles of $0.02 per diluted share, and stock-based compensation expense of $0.08 per diluted share.

Quarterly Conference Call:

The conference call will be available to the public through a live audio web broadcast via the Internet. Log on to Cree's website at and go to "Investor Relations - Financial Events and Presentations" for webcast details. The call will be archived and available on the website through November 2nd, 2010.

Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available in the "Investor Relations" section of Cree's website, under "Financial Information", "Quarterly Results", at

About Cree, Inc.

Cree is leading the LED lighting revolution and setting the stage to obsolete the incandescent light bulb through the use of energy-efficient, environmentally friendly LED lighting. Cree is a market-leading innovator of lighting-class LEDs, LED lighting, and semiconductor solutions for backlighting, wireless and power applications.

Cree's product families include LED fixtures and bulbs, blue and green LED chips, high-brightness LEDs, lighting-class power LEDs, power-switching devices and radio-frequency/wireless devices. Cree solutions are driving improvements in applications such as general illumination, electronic signs and signals, variable-speed motors and wireless systems.

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