Cree, Inc., a market-leading innovator of lighting-class LEDs, LED lighting retrofit solutions, and semiconductor solutions for backlighting, wireless and power applications, today announced revenue of $125.0 million for its fiscal third quarter ended March 30, 2008. This represents a 5% increase compared to the fiscal second quarter of 2008 and a 38% increase compared to revenue of $90.3 million reported for the third fiscal quarter last year. GAAP net income for the third quarter was $5.7 million, or $0.06 per diluted share, compared to net income of $21.1 million or $0.27 per diluted share for the third quarter of fiscal 2007. The acquisition of LED Lighting Fixtures, Inc., which closed during the quarter, increased revenue by $0.7 million and reduced earnings by $0.01 per diluted share.

The remainder of this press release highlights the company's financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain costs, charges, gains and losses which are excluded from non-GAAP results. By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. Cree's management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release. Non-GAAP results are not prepared in accordance with GAAP, and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this press release.

GAAP earnings of $0.06 per diluted share includes expenses totaling $6.4 million, net of tax, or $0.07 per diluted share due to certain items. These items consist of amortization of acquired intangibles of $0.04 per diluted share and stock-based compensation expense of $0.03 per diluted share. On a non-GAAP basis, adjusted to exclude these items, net income for the third quarter of fiscal 2008 was $12.0 million, or $0.14 per diluted share. On a non-GAAP basis, adjusted to exclude similar items as in fiscal 2008 and a non-recurring tax benefit of $0.22 per diluted share, net income for the third quarter of fiscal 2007 was $4.7 million, or $0.06 per diluted share.

"Cree's strategy to drive revenue growth by focusing on LED lighting continued to pay dividends in Q3, as we delivered financial performance that was in line with our previously announced guidance," stated Chuck Swoboda, Cree Chairman and CEO. "Revenue growth was led by higher sales of LED components, which exceeded sales of LED chips for the first time. In addition, we took another bold step in leading the LED lighting revolution with our acquisition of LED Lighting Fixtures, which positions us even better to drive the adoption of LED lighting going forward. For Q4, we target growth from XLamp® LEDs, high-brightness LED components and our new LED lighting solutions, all of which are benefitting from the rising demand for energy-efficient LED lighting."