|From: slacker711||3/15/2019 9:55:43 AM|
|Cree to Sell Lighting Business to IDEAL INDUSTRIES, INC.|
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Transaction Sharpens Cree’s Strategic Focus as Powerhouse Semiconductor Company
DURHAM, N.C.--(BUSINESS WIRE)--Mar. 15, 2019-- Cree, Inc. (Nasdaq: CREE) announces the execution of a definitive agreement to sell its Lighting Products business unit (“Cree Lighting”), which includes the LED lighting fixtures, lamps and corporate lighting solutions business for commercial, industrial and consumer applications, to IDEAL INDUSTRIES, INC. for approximately $310 million before tax impacts, including up-front and contingent consideration and the assumption of certain liabilities. Cree expects to receive an initial cash payment of $225 million, subject to purchase price adjustments, and has the potential to receive a targeted earn-out payment of approximately $85 million based on an adjusted EBITDA metric for Cree Lighting over a 12-month period beginning two years after the transaction closes.
The agreement continues Cree’s strategy, announced in February 2018, to create a more focused, powerhouse semiconductor company, providing growth capital for Wolfspeed, its core Power and RF business, and equips Cree with additional resources to expand its semiconductor operations. The deal also enables Cree Lighting to gain additional global focus, channel support and investment as it becomes a growth engine for the IDEAL team.
“Cree has made significant progress over the last 18 months in sharpening the focus of our business to become a semiconductor powerhouse in Silicon Carbide and GaN technologies. Over that time frame, we have grown Wolfspeed by more than 100%, acquired the Infineon RF business, more than doubled our manufacturing capacity of Silicon Carbide materials, and signed multiple long-term supply agreements, which, in aggregate, are in excess of $500 million. With the addition of today’s lighting divestiture news, Cree is well positioned as a more focused semiconductor leader,” said Gregg Lowe, CEO of Cree. “Cree’s technologies are at the forefront of the automotive industry’s transition to zero emission electric vehicles, the telecommunications industry’s move to faster 5G networks and the continued ramp up of LEDs for specialty applications. Our leadership in Silicon Carbide and GaN positions us well to capitalize on the tremendous advantages that these technologies offer our customers. This transaction provides significant resources to help accelerate Wolfspeed’s growth while providing a terrific growth opportunity for the Lighting Business and its employees through an expanded channel that strengthens its market position. We believe this decision benefits the company and our employees, shareholders and customers as it unlocks value, increases management focus on the core business and supports our mission to accelerate silicon carbide adoption.”
IDEAL is a fourth-generation, family-owned, growing global company, serving as a market leader in electric power control and management. Cree Lighting’s portfolio and SmartCast® Technology are complementary to IDEAL’s advanced control business and channel of suppliers, distributors, agents, and customer relationships.
“Our combined technology and expertise will continue to build on Cree Lighting’s history of leadership and fits with the advanced systems IDEAL has pioneered over the past 103 years,” said Jim James, Chairman and CEO of IDEAL INDUSTRIES, INC. “Together, we will create a powerful combination of innovation, channel strength and operational excellence. We’re acquiring a very special business poised for sustained success, and we look forward to assisting Cree Lighting in realizing its potential.”
The closing of the transaction is anticipated to occur in the fourth quarter of fiscal 2019, and is subject to receipt of required regulatory approvals and satisfaction of customary closing conditions.
FY19 Q3 Business Update
Based on the agreement to sell Cree Lighting, it will be classified as discontinued operations as of FY19 3Q. As a result, Cree is updating its guidance to reflect continuing operations only.
For its third quarter of fiscal 2019 ending March 31, 2019, Cree targets revenue from continuing operations in a range of $271 million to $277 million. Wolfspeed revenue is targeted in a range of $139 million to $141 million, and LED Products revenue is targeted in a range of $132 million to $136 million. GAAP gross margin from continuing operations is targeted at approximately 35%, with non-GAAP gross margin from continuing operations targeted at approximately 36%. GAAP net loss from continuing operations is targeted at $(14) million to $(9) million, or $(.14) to $(.09) per diluted share. Non-GAAP net income from continuing operations is targeted to be in a range of $14 million to $18 million, or $0.14 to $0.18 earnings per diluted share. Targeted non-GAAP income from continuing operations excludes $27 million of expenses, net of tax, related to stock-based compensation expense, the amortization or impairment of acquisition-related intangibles, interest accretion on our convertible notes' issue costs and fair value adjustments, executive severance and expenses relating to the disposition. The GAAP and non-GAAP targets do not include any estimated change in the fair value of Cree’s Lextar investment. The Company also expects to incur a GAAP impairment charge on the Cree Lighting intangible assets, which charge will be reflected in discontinued operations when Cree reports its third quarter results.
The Company will provide a complete review of Q3 results and FY19 Q4 outlook on its regularly scheduled financial results call on May 1 at 5:00 p.m. EDT.
The Company plans to hold a conference call on Monday, March 18, 2019 at 8:30 a.m. EDT to discuss the transaction and the FY19 Q3 business update. The conference call will be available to the public through a live audio web broadcast via the internet. For webcast details, visit Cree’s website at investor.cree.com/events.cfm.
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|To: slacker711 who wrote (9954)||3/15/2019 10:06:49 AM|
|For its third quarter of fiscal 2019 ending March 31, 2019, Cree targets revenue from continuing operations in a range of $271 million to $277 million. Wolfspeed revenue is targeted in a range of $139 million to $141 million, and LED Products revenue is targeted in a range of $132 million to $136 million. |
Guidance was for Wolfspeed to be up a few percent from $135m and LED revenue to be down 5% from $145m so it looks like Wolfspeed was on track in the quarter but LED revenue was going to come in light.
GAAP gross margin from continuing operations is targeted at approximately 35%, with non-GAAP gross margin from continuing operations targeted at approximately 36%.
It looks like non-GAAP margins will also be light versus previous guidance presumably because of the LED margins getting hit based on lower revenue.
Of course, the importance of this quarter pales in comparison with offloading the Lighting division. I wonder if Cree will talk about transitioning LED capacity to Wolfspeed on Monday (and maybe update their long-term Wolfspeed targets).
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|From: slacker711||3/17/2019 8:01:12 PM|
|Cree to sell lighting division for $310 million|
By Lauren Ohnesorge – Senior Staff Writer, Triangle Business Journal
Mar 15, 2019, 9:41am EDT Updated Mar 15, 2019, 3:41pm EDT
A year after its big pivot, Durham’s Cree (Nasdaq: Cree) is selling its entire lighting division to Illinois-based Ideal Industries Inc. in a $310 million deal
CEO Gregg Lowe was not available to talk about the news Friday.
Cree expects to receive an initial cash payment of $225 million, subject to price adjustments and has the potential to receive a targeted earn-out payment of about $85 million based on the adjusted EBITDA metric for the lighting business over a 12-month period that starts two years after the deal closes.
According to a securities filing, the deal has already been approved by the boards of both companies. The filing also notes that Ideal “is expected to hire most of Cree’s approximately 1300 employees of the lighting products business.”
If all goes as expected, the deal will close in the fourth quarter of fiscal 2019. In its second quarter, announced in January, the lighting business accounted for $132.5 million in revenue.
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|From: slacker711||3/18/2019 7:31:04 AM|
|I'll be disappointed if today's conference call doesnt talk about an acceleration of their SiC capacity plans and moving capacity from LED's seems like an obvious answer. |
Epistar, Epileds report losses
Siu Han, Taipei; Adam Hwang, DIGITIMES Monday 18 March 2019 0 Toggle Dropdown
LED epitaxial wafer and chip makers Epistar and Epileds Technologies both saw operations swing into operating losses in fourth-quarter 2018 thanks to price drops resulting from severe chip oversupply.
Although some China-based LED makers began to cut output in fourth-quarter 2018, the oversupply has seen almost no improvements, industry sources said.
But Epistar managed to reduce its inventory value from NT$5.2 billion (US$169 million) at the end of third-quarter 2018 to NT$4.7 billion at the end of the fourth quarter, the sources noted.
Epistar has reported net loss per share of NT$0.42 for 2018, but its board of directors has still decided to distribute a cash dividend of NT$0.30 from reserved earnings and capital reserve. Epistar will raise paid-in capital by issuing 120 million shares for private placement or floating GDR (global depository receipt).
Epileds will also issue 20 million new shares for open sale or floating GDR to raise paid-in capital.
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|To: slacker711 who wrote (9960)||3/18/2019 8:58:17 AM|
|Very little detail in the call about future plans except that they are doing everything they can to bring in the timeline of doubling capacity within 24 months and the money in this deal is more about the next step beyond that.|
Probably the best news in the call is that they plan to have an analyst day after the deal closes in Q4 and it sounds like they will update their plans then.
Overall, this deal increases the focus on Wolfspeed which is an obvious positive, but I really would like to hear more details about an acceleration of their buildout.
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