Cree reports record revenue and net income for the first quarter of fiscal year 2011

Date Announced: 21 Oct 2010

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 was another record quarter for Cree as revenue grew in lighting, LED components and power products,” stated Chuck Swoboda, Cree chairman and CEO. “Although total revenue was on the low end of our target range of $270-280 million due to a decline in LED chips, LED lighting adoption continues to gain momentum and the growth drivers for the company remain on track.”

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:

Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the fiscal first quarter 2011 results and the fiscal second quarter 2011 business outlook, including significant factors and assumptions underlying the targets noted above. 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 www.cree.com 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 www.cree.com.

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.

Contact
Raiford Garrabrant Cree, Inc. Director, Investor Relations Ph: 919-287-7895 Fax: 919-313-5615

E-mail:investorrelations@cree.com

Web Site:www.cree.com

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