(Durham, N.C.) Cree, Inc. (NASDAQ:CREE), a market leader in LED lighting, today announced record revenue of $199.5 million for its second quarter of fiscal 2010, ended December 27, 2009. This represents a 35% increase compared to revenue of $147.6 million reported for the second fiscal quarter last year and an 18% increase compared to the first quarter of fiscal 2010. GAAP net income for the second quarter increased 216% year-over-year to $33.8 million, or $0.32 per diluted share, compared to GAAP net income of $10.7 million, or $0.12 per diluted share, for the second quarter of fiscal 2009. On a non-GAAP basis, net income for the second quarter of fiscal 2010 increased 126% year-over-year to $40.2 million, or $0.38 per diluted share, compared to non-GAAP net income for the second quarter of fiscal 2009 of $17.8 million or $0.20 per diluted share.

“We continued to execute very well in Q2, as we delivered record revenue and net income,” stated Chuck Swoboda, Cree Chairman and CEO. “LED lighting adoption continues to gain momentum and our near term focus is on factory execution and capacity expansion. Our strong balance sheet further enhances our leadership position and supports our mission of leading the LED lighting revolution.”

•Cash and investments increased $65.6 million from Q1 of fiscal 2010 to $954.1 million.
•Cash flow from operations was $21.5 million. Free cash flow (cash flow from operations less capital expenditures) was ($19.9) million as we spent $41.4 million on capital expenditures.
•Accounts receivable (net) increased $20.3 million from Q1 of fiscal 2010 to $113.4 million, resulting in days sales outstanding of 51, an increase of 1 day from Q1 of fiscal 2010.
•Inventory (net) increased $7.3 million from Q1 of fiscal 2010 to $93.3 million and represents 80 days of inventory, a decrease of 1 day from Q1 of fiscal 2010.

Recent Business Highlights:

•Awarded $39 million in tax credits as part of the American Recovery and Reinvestment Act to support our investment to build energy efficient LED lighting
•Announced that Cree LED lamps have been selected for an initial deployment in approximately 650 Walmart stores
•Set a new standard for indoor LED lighting with the XLamp® MX-6 LED, the industry’s first lighting-class PLCC LED
•Demonstrated an A-lamp LED light bulb with the highest lumen output and efficacy reported in the industry
•Achieved industry-best reported R&D results of 186 lumens per watt from a white high-power LED
•Purchased a facility for manufacturing expansion in Huizhou, China

For its third quarter of fiscal 2010 ending March 28, 2010, Cree targets revenue in a range of $215 million to $225 million with GAAP net income of $37 million to $40 million, or $0.35 to $0.37 per diluted share. Non-GAAP net income is targeted to increase quarter-over-quarter to $44 million to $47 million, or $0.41 to $0.44 per diluted share, based on an estimated 107.5 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 $0.04 per diluted share.

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 communications.

For additional product and company information, please refer to www.cree.com.