Cree, Inc. (NASDAQ:CREE) Q2 2015 Earnings Conference Call - Final Transcript

Jan 20, 2015 • 05:00 pm ET

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Cree, Inc. (NASDAQ:CREE) Q2 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good day, ladies and gentlemen, and welcome to Cree's second quarter 2015 earnings conference call. (Operator instructions) I would now like to hand the conference over to Mr. Raiford Garrabrant, director of investor relations. Sir, you may begin.

Executive
Raiford Garrabrant

Thank you, Syed, and good afternoon. Welcome to Cree's second quarter fiscal 2015 earnings conference call. By now, you should have all received a copy of the press release. If you did not receive a copy, please call our office at (919) 287-7895, and we will be pleased to assist you.

Today, Chuck Swoboda, our chairman and CEO, and Mike McDevitt, our CFO, will report on our results for the second quarter of fiscal year 2015. Please note that we will be presenting both GAAP and non-GAAP financial results in our remarks during today's call, which are reconciled in our press release and posted in the Investor Relations section of our website at www.cree.com under quarterly results on the financial information tab.

Executive
Unidentified Speaker

(Forward-Looking Cautionary Statements)

Our press release today, and the SEC filings noted in the release, mentioned important factors could cause actual results to differ materially. Also, we'd like to note that we will be limiting our comments regarding Cree's second quarter of fiscal year 2015 to a discussion of the information included in our earnings release. We will not be able to answer any questions that would involve providing additional financial information about the quarter beyond the comments made in the prepared remarks.

This call is being recorded on behalf of the company. The presentations and the recording of this call are copyrighted property of the company, and no other recording, reproduction, or transcription is permitted unless authorized by the company in writing. Consistent with our previous conference calls, we're requesting that only sell-side analysts ask questions during the Q&A session.

Also, since we plan to complete the call in the allotted time of one hour, we ask that analysts limit themselves to one question and one follow up. We recognize that other investors may have additional questions, we welcome you to contact us after the call by email or phone. We're also webcasting our conference call, and a replay will be available on our website through February 3.

Now, I would like to turn the call over to Chuck.

Executive
Chuck Swoboda

Thank you, Raiford. Fiscal Q2 revenue was $413 million, which was on the upper end of our target range due to strong growth in LED lighting. Non-GAAP net income increased 28% sequentially to $38 million or $0.33 per diluted share, due primarily to improved gross margins and an $0.08 per share tax benefit related to the retroactive reinstatement of the federal R&D tax credit.

Excluding the catch up tax benefit, non-GAAP earnings per share would have been $0.25, which was above our target for the quarter. The sales trends for Q2 were as follows. Lighting revenue increased 33% year over year and 3% sequentially to $230 million, driven by double-digit growth in LED fixtures, which more than offset the expected lower