As LED lighting technology company Cree (NASDAQ:CREE) looks ahead to its new fiscal year, CEO Chuck Swoboda has set some goals for the company’s growth, including expansion into new market segments.
The “growth” Swoboda has in mind does not necessarily mean acquisitions to get the Durham company into new geographic markets. Think less about geographies and more about applications that are unserved, Swoboda said during a conference call with analysts to discuss fiscal 2013 and fourth quarter financial results. For example, Cree recently introduced its new UR Series LED Upgrade Kit, which makes it easy to upgrade fluorescent lamps to LED lighting.
“It’s not a lighting fixture and it’s not a bulb,” Swoboda said. “It’ s essentially a product that enables a very large chunk of the electrical contracting industry to get into the LED upgrade business.”
Swoboda said Cree is eying more opportunities to address needs with new technologies and products. This “hybrid approach” with innovation will allow Cree to go after new market opportunities in a slightly different way.
Cree reported a record $375 million in fiscal fourth quarter 2013 revenue, performance driven by strong sales of its lighting products. Despite the 22 percent increase year-over-year increase the results still fell shy of analyst estimates. The average estimate of analysts polled by Thomson Reuters was $377.2 million. Net income for the Durham LED lighting technology company was $28.2 million, or 23 cents per diluted share – a 182 percent increase over net income of $10.0 million, or 9 cents per diluted share, in the fiscal fourth quarter of 2012.
For fiscal year 2013, Cree reported $1.39 billion in revenue, a 19 percent increase compared to revenue of $1.16 billion for fiscal 2012. Net income for the fiscal year was $86.9 million, or 74 cents per diluted share, a 96 percent increase compared to fiscal 2012.
Cree saw its strongest sales growth come from LED lighting products, which generated $495.0 million in revenue, up 48 percent year over year. Swoboda said that sales of the new consumer targeted LED bulb are ahead of the expectations of both Cree and Home Depot, the retailer selling the product. LED Products still represent the biggest share of Cree’s revenue, with $801.4 million in sales for fiscal 2013.
Cree’s growth has come with some growing pains. Swoboda said that the backlog of customer orders is up and the company has faced some capacity constraints. Swoboda said that Cree will need to make capacity investments in the next few quarters to support the growth. But he added that needing to add capacity is a nice problem to have.
Cree has money to spend. The company finished the fiscal year with $1.0 billion in cash and investments.