* As revised to reflect the correction of an immaterial error. For additional information, see the Company’s

Form 10-Q for the quarterly period ended March 27, 2016 to be filed with the Securities and Exchange Commission

on April 27, 2016.

• Gross margin decreased from 30.8% in Q2 of fiscal 2016 to 29.7% on a GAAP basis and decreased from 31.6% to 30.6% on a non-GAAP basis.

• Cash and investments increased by $3 million from Q2 of fiscal 2016 to $620 million.

• Accounts receivable, net decreased by $4 million from Q2 of fiscal 2016 to $179 million, with days sales outstanding of 44.

• Inventory increased by $18 million from Q2 of fiscal 2016 to $298 million and represents 104 days of inventory.

• Cash from operations was $15 million, free cash flow was $(6) million and share repurchases were $18 million for Q3 of fiscal 2016.

Recent Business Highlights:

• Expanded our lighting product portfolio with the introduction of Essentia^® by Cree, a new brand of commercial lighting products that offer a broad range of high quality lighting solutions at a great value;

• Introduced the Cree^® RSW^TM LED Street Luminaire, the first of a generation of streetlights that deliver LED energy savings and reliability in a warm color temperature that is preferred in many residential applications;

• Announced SmartCast^® Power over Ethernet (PoE), an intuitively simple, scalable and open platform that enables the Internet of Things (IoT) for buildings through better light, and SmartCast^® Manager, innovative software that unlocks the potential of better LED technology as the engine of limitless applications beyond light;

• Released the next generation of the XLamp^® XP-G platform, the XLamp XP-G3 LED, which delivers 31 percent more lumens than our prior generation, as well as improved lumen density, voltage characteristics and reliability;

• Announced TrueWhitePlus^TM Technology, a spectral control breakthrough that sets a new standard for what is possible with LED light;

• Introduced two new XLamp CXA2 high density LED arrays that double lumen output and deliver the highest lumen density in the industry for their LES (light emitting surface) size;

• Announced an agreement with Pilot Flying J, the largest operator of travel centers in North America, to install indoor and outdoor LED lighting at select locations.

Business Outlook:

For its fourth quarter of fiscal 2016 ending June 26, 2016, Cree targets revenue in a range of $370 million to $395 million, with GAAP gross margin targeted to be 30.7%+/- and non-GAAP gross margin targeted to be 31.5%+/-. Our GAAP gross margin targets include stock-based compensation expense of approximately $3 million, while our non-GAAP targets do not. GAAP operating expenses are targeted to be approximately $117 million, and non-GAAP operating expenses are targeted to be approximately $98 million. The GAAP tax rate is targeted at 19%+/- and the non-GAAP tax rate is targeted at 16.0%+/- for the fourth quarter of fiscal 2016. GAAP net (loss) income is targeted at $(3) million to $3 million, or $(0.03) to $0.03 per diluted share, excluding any net changes associated with Cree’s Lextar investment. Non-GAAP net income is targeted in a range of $16 million to $22 million, or $0.16 to $0.22 per diluted share. The GAAP and non-GAAP per diluted share targets are based on an estimated 101 million diluted weighted average shares. Targeted non-GAAP earnings exclude $0.19 per diluted share of expenses related to stock-based compensation expense, the amortization or impairment of acquisition-related intangibles and any net changes associated with Cree’s Lextar investment.