Cree, Inc., a market leader in LED lighting, today announced revenue of US$ 391.0 million for its first quarter of fiscal 2014, ended September 29, 2013. This represents a 24% increase compared to revenue of US$ 315.8 million reported for the first quarter of fiscal 2013, and a 4% increase compared to the fourth quarter of fiscal 2013. GAAP net income for the first quarter was $30.5 million, or US$ 0.25 per diluted share, an increase of 89% year-over-year compared to GAAP net income of US$ 16.1 million, or US$ 0.14 per diluted share, for the first quarter of fiscal 2013. On a non-GAAP basis, net income for the first quarter of fiscal 2014 was US$ 47.3 million, or US$ 0.39 per diluted share, an increase of 49% year-over-year compared to non-GAAP net income for the first quarter of fiscal 2013 of US$ 31.8 million, or US$ 0.27 per diluted share.
"Fiscal 2014 is off to a good start, as we delivered solid Q1 revenue and earnings growth in line with our targets," stated Chuck Swoboda, Cree chairman and CEO. "The strong performance was primarily due to increased sales of our lighting products, higher gross margins and improved operating leverage across the business. Based on our backlog, current sales activity and project forecasts, we are targeting growth in all product segments in Q2, led by growth in LED fixtures and the Cree® LED Bulb. Even with our success, LED lighting remains a largely untapped opportunity and we remain focused on investing in new products, new channels and building the Cree brand to grow our company and lead the market."
Gross margin increased 110 basis points from Q4 of fiscal 2013 to 38.6% on a GAAP basis and increased 100 basis points to 39.2% on a non-GAAP basis. Cash and investments increased by $64.9 million from Q4 of fiscal 2013 to $1.1 billion. Accounts receivable (net) increased by $16.7 million from Q4 of fiscal 2013 to $209.3 million, with days sales outstanding of 48. Inventory increased $20.3 million from Q4 of fiscal 2013 to $217.3 million, with days of inventory of 81 days.
Recent Business Highlights:
Introduced Cree TW (TrueWhite®) Series LED Bulb, which emits natural LED light with a Color Rendering Index (CRI) of 93, making Cree the first company to meet the California Energy Commission (CEC) LED bulb specification;
Earned ENERGY STAR® qualification for the game-changing soft-white Cree LED Bulbs;
Introduced the XLamp® CXA 1520 LED array, the industry's first High-Density (HD) LED Array. This breakthrough technology delivers double the lumen density to enable the next generation of LED spot lights;
Launched the XLamp XQ-E LEDs, a new generation of lighting-class LEDs that deliver big performance in a tiny package;
Announced that the National Aeronautics and Space Administration (NASA) headquarters in Washington, D.C., has been outfitted with energy-saving CR Series LED Troffers by Cree.
Business Outlook:
For its second quarter of fiscal 2014 ending December 29, 2013, Cree targets revenue in a range of $400 million to $420 million with GAAP gross margin targeted to be 37.8%+/- and non-GAAP gross margin targeted to be 38.5%+/-. Our GAAP gross margin targets include stock-based compensation expense of approximately $2.8 million, while our non-GAAP targets do not. Operating expenses are targeted to increase by approximately $5.5 million on both a GAAP basis and non-GAAP basis to promote the Cree LED Bulb and take advantage of ENERGY STAR® qualification and associated utility rebates to drive increased sales momentum. The tax rate is targeted at 23.0%+/- for the second quarter of fiscal 2014. GAAP net income is targeted at $26 million to $32 million, or $0.21 to $0.26 per diluted share. Non-GAAP net income is targeted in a range of $44 million to $50 million, or $0.36 to $0.41 per diluted share. The GAAP and non-GAAP net income per diluted share targets are based on an estimated 123 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles and stock-based compensation expense of $0.15 per diluted share.
