Cree Inc. released their FY20 Q4 report on August 18th, 2020. Here are the key points from their report (currency is in USD):
- 47% of Cree’s revenue is from their LED products, the same as Q4 2019.
- Cree’s LED revenue fell from $117.0m to $97.3m (-17%).
- LED segment revenue fell less than their Wolfspeed segment (-17% and -19% respectively).
- Overall revenue fell by 18% from FY19 Q4 to FY20 Q4.
- Gross margin decreased from 35% to 25%.
- EPS decreased from -$0.33 to -$0.36.
- Operating loss increased from -$25.6m (FY19 Q4) to -$64.3m (FY20 Q4).
Cree’s quarterly report was full of falling numbers and decreases in profitability. Revenue fell which was expected due to COVID-19. Their LED segment was slightly less affected by current conditions and operations than their Wolfspeed segment. Cree’s stock fell after their quarterly release and at the time of the writing. Cree’s CEO Gregg Lowe believes the company performed sufficiently during these unexpected market conditions.
The LED business was rarely mentioned in Investor Call. We counted the word LED mentioned only 6 times, — to 31 mentions for either Wolfspeed or Silicon Carbide. EdisonReport would not be surprised if one day Cree unloads their LED component business. Wolfspeed ahead!
DURHAM, N.C. August 18, 2020 — Cree, Inc. (Nasdaq: CREE) today announced revenue of $205.7 million for its fourth quarter of fiscal 2020, ended June 28, 2020. This represents an 18% decrease compared to revenue of $251.2 million reported for the fourth quarter of fiscal 2019, and a 5% decrease compared to the third quarter of fiscal 2020. GAAP net loss from continuing operations attributable to controlling interest for the fourth quarter was $39.5 million, or $0.36 per diluted share, compared to GAAP net loss from continuing operations attributable to controlling interest of $34.5 million, or $0.33 per diluted share, for the fourth quarter of fiscal 2019. On a non- GAAP basis, net loss from continuing operations attributable to controlling interest for the fourth quarter of fiscal 2020 was $20.0 million, or $0.18 per diluted share, compared to non-GAAP net income from continuing operations attributable to controlling interest for the fourth quarter of fiscal 2019 of $11.6 million, or $0.11 per diluted share.
For fiscal year 2020, Cree reported revenue of $903.9 million, which represents a 16% decrease when compared to revenue of $1,080.0 million for fiscal 2019. GAAP net loss attributable to controlling interest from continuing operations was $191.7 million, or $1.78 per diluted share. This compares to a GAAP net loss attributable to controlling interest from continuing operations of $57.9 million, or $0.56 per diluted share, for fiscal 2019. On a non-GAAP basis, net loss from continuing operations attributable to controlling interest for fiscal year 2020 was $49.1 million, or $0.45 per diluted share, compared to non-GAAP net income from continuing operations attributable to controlling interest of $76.9 million, or $0.74 per diluted share, for fiscal 2019.
“Our performance in the fourth quarter demonstrates solid execution despite the unprecedented challenges presented by the ongoing pandemic and geopolitical concerns. I would like to thank all our employees for their tremendous efforts in allowing us to safely operate our business and support our customers around the world,” said Cree CEO, Gregg Lowe. “Fiscal 2020 marked a transition year in our journey to become a global semiconductor powerhouse and we remain firmly committed to our capacity expansion plans to capitalize on what we believe to be a multi- decade growth opportunity for silicon carbide.”
Business Outlook:
For its first quarter of fiscal 2021, Cree targets revenue in a range of $203 million to $217 million. GAAP net loss is targeted at $83 million to $87 million, or $0.76 to $0.79 per diluted share. Non-GAAP net loss is targeted to be in a range of $22 million to $26 million, or $0.20 to $0.24 per diluted share. Targeted non-GAAP net loss excludes $61 million of estimated expenses, net of tax, related to stock-based compensation expense, amortization or impairment of acquisition-related intangibles, factory optimization restructuring and start-up costs, net accretion on convertible notes, and project, transformation, transaction and transition costs. The GAAP and non-GAAP targets do not include any estimated change in the fair value of Cree’s Lextar investment.