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Cree Reports Strong 4Q Earnings

CreeDURHAM, N.C.–(BUSINESS WIRE)– Cree, Inc. (CREE) today announced revenue of $409 million for its fourth quarter of fiscal 2018, ended June 24, 2018. This represents a 14% increase compared to revenue of $359 million reported for the fourth quarter of fiscal 2017, and a 15% increase compared to the third quarter of fiscal 2018. GAAP net loss for the fourth quarter was $33 million, or $0.33 per diluted share, compared to GAAP net loss of $6 million, or $0.06 per diluted share, for the fourth quarter of fiscal 2017. On a non-GAAP basis, net income for the fourth quarter of fiscal 2018 was $12 million, or $0.11 per diluted share, compared to non-GAAP net income for the fourth quarter of fiscal 2017 of $4 million, or $0.04 per diluted share.

For fiscal year 2018, Cree reported revenue of $1.49 billion, which represents a 1% increase when compared to revenue of $1.47 billion for fiscal 2017. GAAP net loss was $280 million, or $2.81 per diluted share, which includes a $247.5 million impairment charge attributable to Cree’s Lighting Products segment taken in the third fiscal quarter. This compares to a GAAP net loss of $98 million, or $1.00 per diluted share, for fiscal 2017. On a non-GAAP basis, net income for fiscal year 2018 was $19 million, or $0.19 per diluted share, compared to $50 million, or $0.50 per diluted share, for fiscal 2017.

“Fiscal year 2018 finished with good momentum, with fourth quarter non-GAAP earnings per share that exceeded the top end of our range driven by Wolfspeed growth and gross margin improvement,” stated Gregg Lowe, Cree CEO. “The demand for Silicon Carbide and GaN technologies continues to grow, as evidenced by the excellent results of our Wolfspeed business. We are expanding our manufacturing footprint and broadening our product portfolio to extend our leadership position in this market and drive growth.”

Business Outlook:

For its first quarter of fiscal 2019 ending September 23, 2018, Cree targets revenue in a range of $395 million to $415 million. GAAP net loss is targeted at $9 million to $14 million, or $0.09 to $0.14 per diluted share. Non-GAAP net income is targeted in a range of $10 million to $14 million, or $0.10 to $0.14 per diluted share. Targeted GAAP and non-GAAP earnings reflect the negative impact of approximately $0.02 per diluted share for the tariffs that went into effect on July 6, 2018. Targeted non-GAAP income excludes $23 million of pre-tax expenses related to stock-based compensation expense, Lighting Products restructuring costs and the amortization of acquisition-related intangibles. The GAAP and non-GAAP targets do not include any estimated change in the fair value of Cree’s Lextar investment.

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