Cree Q3 FY14 Net Revenue $28.2M +27% YoY

Cree Corporation (Nasdaq: CREE) announced that as of March 30, 2014, the company's revenue for the third quarter of fiscal 2014 was $405.3 million, an increase of 16% compared with revenue of $348.9 million for the third quarter of fiscal 2013. GAAP net income for the third quarter of fiscal 2014 was $28.2 million, or $0.23 per diluted share, compared to GAAP net income of $22.2 million, or $0.19 per diluted share, for the third quarter of fiscal 2013, an increase of 27%.

On a non-GAAP basis, net income for the third quarter of fiscal 2014 was $47.7 million (or $0.39 per diluted share), an increase of 17% compared to non-GAAP net income of $40.8 million (or $0.34 per diluted share) for the third quarter of fiscal 2013.

Chuck Swoboda, Cree Chairman and CEO, said: "The third quarter of fiscal 2014 was a solid quarter, with revenue and operating profit in line with our target range, and the business will have good growth in the fourth quarter of the fiscal year. These results once again demonstrate our ability to achieve strong business results while continuing to maintain long-term investment in new technologies and Cree brand building."

Financial indicators for the third quarter of fiscal 2014:
(Except for amounts and percentages per share, all other units are in thousands of dollars)

On a GAAP basis, gross profit decreased 50 basis points to 37.0% compared with the second quarter of fiscal 2014. On a non-GAAP basis, gross profit decreased 40 basis points to 37.8% from the second quarter of fiscal 2014.

Cash and investments totaled $1.2 billion, an increase of $39 million from the second quarter of fiscal 2014.

Net accounts receivable were $222.3 million, an increase of $8.8 million compared with the second quarter of fiscal 2014, and the accounts receivable turnover period was 49 days.

Inventory was $251.2 million, an increase of $16.8 million from the second quarter of fiscal 2014, equivalent to 89 days of inventory.

Looking forward to the fourth quarter of fiscal 2014 (as of June 29, 2014), Cree plans to achieve a revenue target of US$430 million to US$460 million, with a GAAP gross profit target of 36.8% +/- and a non-GAAP gross profit target of 37.5% +/-. The GAAP gross profit target includes stock-based compensation expense, which was approximately $3.2 million, while the non-GAAP target does not. Operating expenses are planned to increase by $7 million from the fiscal third quarter.

Cree said that the tax rate in the fourth quarter of fiscal year 2014 is expected to be 21.0% +/-. GAAP net income guidance is $28.2 million to $36.3 million, or diluted earnings per share of $0.23 to $0.29. Non-GAAP net income guidance is $46.5 million to $54.6 million, or $0.38 to $0.44 per diluted share. GAAP and non-GAAP diluted net income per share targets are based on an estimated diluted weighted average share of 124 million. Target non-GAAP earnings exclude amortization of acquired intangible assets and stock-based compensation expense ($0.15 per diluted share).