DURHAM, N.C., Jan. 20, 2009 (GLOBE NEWSWIRE) -- Cree, Inc. (Nasdaq:CREE), a market leader in LED lighting, today announced revenue of $147.6 million for its second quarter of fiscal 2009, ended December 28, 2008. This represents a 24% increase compared to revenue of $119.0 million reported for the second fiscal quarter last year and a 5% increase compared to the fiscal first quarter of 2009. Revenue included $5.6 million in patent licensing fees which were not factored into previously announced targets. GAAP net income for the second quarter was $10.7 million, or $0.12 per diluted share, compared to net income of $6.6 million, or $0.08 per diluted share, for the second quarter of fiscal 2008. Net income included approximately $4.4 million, or $0.05 per diluted share, related to the patent licensing fees, as well as a franchise tax benefit, which was not factored into previously announced targets.
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 that 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 EPS of $0.12 per diluted share for the second quarter of fiscal 2009 includes expenses totaling $7.1 million, net of tax, or $0.08 per diluted share related to amortization of acquired intangibles and stock-based compensation expense. On a non-GAAP basis, adjusted to exclude these items, net income for the second quarter of fiscal 2009 was $17.8 million, or $0.20 per diluted share. On a non-GAAP basis, adjusted to exclude comparable items, net income for the second quarter of fiscal 2008 was $12.2 million, or $0.14 per diluted share.
"Cree delivered excellent financial results again despite challenging economic conditions, driven by strength in LED product sales for lighting applications," stated Chuck Swoboda, Cree chairman and CEO. "In the third quarter of fiscal 2009, we expect that lower demand for our products in consumer, mobile and automotive applications will be partially offset by growth in LED sales for commercial lighting applications. As we look ahead to calendar 2009, we are targeting that LED lighting adoption will continue to gain momentum as product availability increases and recognition of the benefits grows from new installations like the Federal Reserve and the planned Pentagon renovation."
Recent Business Highlights:
-- Announced volume availability of the LR24, a recessed LED
luminaire that offers high-quality, energy-efficient light for
the largest commercial lighting market, suspended-ceiling
applications traditionally addressed by linear fluorescents. The
LR24 has already been installed at the U.S. Federal Reserve in
Washington, D.C., as part of their ongoing energy-efficiency
program, and the Pentagon plans to install 4,200 of the
luminaires as part of a major renovation currently underway.
-- Announced the high-volume availability of XLamp XP-E LEDs with
output up to 122 lumens, the highest commercially available
minimum flux for a single-die LED, at 350 mA, in the industry
today. The volume availability of these XLamp LEDs is aimed at
further stimulating the LED lighting market, driving applications
in outdoor and indoor general illumination as well as portable
and retail display lighting.
-- Achieved industry-best reported R&D results of 161 lumens per
watt for a white power LED. These results demonstrate Cree's
continued commitment to deliver industry-leading performance
through a constant focus on innovation and R&D.
-- Entered into a patent license agreement granting Mitsubishi
Chemical Corporation (MCC) an exclusive license (subject to
certain exceptions) to manufacture and sell freestanding GaN
substrates, with Cree to receive over the life of the agreement a
combination of guaranteed payments and royalties on the sale of
GaN substrates.
-- Agreed with Bridgelux, Inc. to settle the parties' patent
infringement litigation and to dismiss all claims and
counterclaims in the suits. As part of the settlement, Cree
granted Bridgelux a license to the Cree and Boston University
patents at issue in the litigation, and Bridgelux agreed to pay a
license fee and royalties. In addition, Bridgelux and Cree have
entered into a supply agreement under which Cree will become a
significant supplier to Bridgelux.
-- Welcomed Indian Wells, California, to the LED City(r) Program.
The city has replaced much of the lighting in City Hall, with all
circular recessed lighting converted to the Cree LR6 LED light,
reducing electricity consumption by 80%. The city plans to
evaluate LED lighting for other municipal lighting applications
to further increase energy savings.
-- Welcomed Notre Dame, Madison Area Technical College, and the
University of California, Davis to the LED University Program(tm).
Notre Dame is implementing four pilot installations to evaluate
the feasibility of LED lighting across the campus and is already
realizing energy savings of 81% compared to incandescent lighting
in the Hesburgh Library.
Q2 2009 Financial Metrics:
-- GAAP gross margin was 38% of revenue compared to 35% in Q2 of
fiscal 2008, and non-GAAP gross margin was 39% compared to 36% in
Q2 of fiscal 2008. Q2 gross margin included approximately 200
basis points of benefit related to the MCC and Bridgelux license
agreements.
-- Accounts receivable increased $5.1 million from Q1 of fiscal 2009
to $108.6 million, resulting in days sales outstanding of 66, the
same as Q1 of fiscal 2009.
-- Inventory decreased $0.4 million from Q1 of fiscal 2009 to $78.8
million and represents 78 days of inventory, the same as Q1 of
fiscal 2009.
-- Cash and investments increased $26.5 million to $365.5 million,
with cash flow from operations of $40.7 million and free cash
flow (cash flow from operations less capital expenditures) of
$23.2 million
Business Outlook:
Current uncertainty in global economic conditions makes it particularly difficult to predict demand and makes it more likely that Cree's actual results could differ materially from expectations. For its third quarter of fiscal 2009 ending March 29, 2009, Cree targets revenue in a range of $128 million to $135 million with GAAP earnings of $0.02 to $0.05 per diluted share and non-GAAP earnings of $0.10 to $0.13 per diluted share, based on an estimated 89 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles of $0.03 per diluted share and stock-based compensation expense of $0.05 per diluted share.
Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the fiscal second quarter 2009 results and the fiscal third quarter 2009 business outlook, including significant factors and assumptions underlying the targets noted above. The conference call will be available to the public through a live audio web broadcast via the Internet. Log on to Cree's website at www.cree.com and go to "Investor Relations - Overview" for webcast details. The call will be archived and available on the website through February 3, 2009.
Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available in the "Investor Relations" section of Cree's website, under "Financial Metrics", "Quarter ending December 28, 2008," at www.cree.com.
About Cree, Inc.
Cree is leading the LED lighting revolution and setting the stage to obsolete the incandescent light bulb through the use of energy-efficient, environmentally friendly LED lighting. Cree is a market-leading innovator of lighting-class LEDs, LED lighting solutions, and semiconductor solutions for wireless and power applications.
Cree's product families include recessed LED down lights, lighting-class power LEDs, high-brightness LEDs, blue and green LED chips, power-switching devices and radio-frequency/wireless devices. Cree solutions are driving improvements in applications such as general illumination, backlighting, electronic signs and signals, variable-speed motors, and wireless communications.
The Cree, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3529
For additional product and company information, please refer to www.cree.com.
The schedules attached to this release are an integral part of the release. This press release contains forward-looking statements involving risks and uncertainties, both known and unknown, that may cause actual results to differ materially from those indicated. Actual results, including with respect to our targets and prospects, could differ materially due to a number of factors, including current uncertainty in global economic conditions that could negatively affect product demand, collectability of receivables and other related matters as consumers and businesses may defer purchases or payments, or default on payments, in response to tighter credit and negative financial news; our ability to complete development and commercialization of products under development, such as our pipeline of brighter LED chips, LED components and LED lighting retrofit solutions; our ability to lower costs; increasing price competition in key markets; the risk that, due to the complexity of our manufacturing processes and transition of production to larger wafers, we may experience production delays that preclude us from shipping sufficient quantities to meet customer orders or that result in higher production costs and lower margins; risks associated with the ramp-up of our production for our new products, as well as production at our Huizhou facility and subcontractors; risks resulting from the concentration of our business among few customers, including the risk that customers may reduce or cancel orders or fail to honor purchase commitments; the rapid development of new technology and competing products that may impair demand or render our products obsolete; the potential lack of customer acceptance for our products; risks associated with our recent acquisitions; risks associated with ongoing litigation; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report on Form 10-K for the fiscal year ended June 29, 2008, and subsequent reports filed with the SEC. Except as required under the U.S. federal securities laws and the rules and regulations of the SEC, Cree disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.
Cree, the Cree logo, XLamp and LED City are registered trademarks, and LED University is a trademark of Cree, Inc.
CREE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Six Months Ended
------------------- -------------------
Dec. 28, Dec. 30, Dec. 28, Dec. 30,
2008 2007 2008 2007
-------- -------- -------- --------
(Unaudited) (Unaudited)
Product revenue $137,595 $111,341 $272,288 $217,304
Contract revenue 4,446 7,658 10,131 15,081
Up-front license fees 5,582 -- 5,582 --
-------- -------- -------- --------
Total revenue 147,623 118,999 288,001 232,385
Cost of product revenue 86,831 71,251 173,475 143,831
Cost of contract revenue 3,790 5,952 8,161 12,018
Up-front license fees 506 -- 506 --
-------- -------- -------- --------
Total cost of revenue 91,127 77,203 182,142 155,849
Gross profit 56,496 41,796 105,859 76,536
Gross margin percentage 38.3% 35.1% 36.8% 32.9%
Operating expenses:
Research and development 18,441 14,901 35,716 27,678
Sales, general and
administrative 21,843 18,211 44,761 36,373
Amortization of
acquisition-related
intangibles 4,062 4,048 8,124 8,096
Loss on disposal and
impairment of long-lived
assets 645 474 1,050 1,209
-------- -------- -------- --------
Total operating expenses 44,991 37,634 89,651 73,356
Operating income 11,505 4,162 16,208 3,180
Operating income percentage 7.8% 3.5% 5.6% 1.4%
Non-operating income:
Gain on sale of
investments, net 53 -- 65 14,117
Interest and other non-
operating income, net 2,507 4,582 5,484 8,309
-------- -------- -------- --------
Income from continuing
operations before income
taxes 14,065 8,744 21,757 25,606
Income tax expense 3,218 2,104 4,972 6,098
-------- -------- -------- --------
Net income from continuing
operations 10,847 6,640 16,785 19,508
Loss from discontinued
operations, net of
related tax effect (151) (20) (170) (174)
-------- -------- -------- --------
Net income $ 10,696 $ 6,620 $ 16,615 $ 19,334
======== ======== ======== ========
Diluted earnings per share:
Income from continuing
operations $ 0.12 $ 0.08 $ 0.19 $ 0.22
Loss from discontinued
operations $ (0.00) $ (0.00) $ (0.00) $ (0.00)
-------- -------- -------- --------
Net income $ 0.12 $ 0.08 $ 0.19 $ 0.22
======== ======== ======== ========
Weighted average shares of
common stock outstanding,
basic 88,057 85,190 87,954 84,936
======== ======== ======== ========
Weighted average shares of
common stock outstanding,
diluted 88,511 86,848 88,619 86,713
======== ======== ======== ========
CREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Dec. 28, June 29,
2008 2008
---------- ----------
(Unaudited)
Assets:
Current assets:
Cash, cash equivalents and short-term
investments $ 322,193 $ 312,428
Accounts receivable, net 108,552 110,376
Inventory, net 78,816 80,161
Income taxes receivable 18,064 9,825
Deferred income taxes 5,032 4,578
Prepaid expenses and other current assets 14,125 13,000
Assets of discontinued operations 2,002 2,600
---------- ----------
Total current assets 548,784 532,968
Property and equipment, net 339,793 348,013
Long-term investments 43,325 58,604
Intangible assets, net 118,890 125,037
Goodwill 248,365 244,003
Other assets 7,342 4,782
---------- ----------
Total assets $1,306,499 $1,313,407
========== ==========
Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable, trade $ 43,988 $ 37,402
Accrued salaries and wages 15,206 13,471
Income taxes payable 9,780 5,314
Deferred income taxes 1,178 --
Other current liabilities 4,631 7,938
Contingent payment due related to LLF
acquisition 4,400 --
Contingent payment due related to COTCO
acquisition -- 60,000
Liabilities of discontinued operations 480 550
---------- -----------
Total current liabilities 79,663 124,675
Long-term liabilities:
Deferred income taxes 45,123 38,048
Other long-term liabilities 4,212 4,199
Long-term liabilities of discontinued
operations 834 745
---------- ----------
Total long-term liabilities 50,169 42,992
Shareholders' Equity:
Common stock 110 110
Additional paid-in-capital 823,762 811,015
Accumulated other comprehensive income 10,488 8,923
Retained earnings 342,307 325,692
---------- ----------
Total shareholders' equity 1,176,667 1,145,740
---------- ----------
Total liabilities and shareholders' equity $1,306,499 $1,313,407
========== ==========
The following is a reconciliation showing how Cree, Inc.'s second quarter income statements for fiscal 2009 and 2008 would appear if they were adjusted for the items noted below.
CREE, INC.
Reconciling Items to Q2 2009 &
2008 Financial Statements - GAAP to Non-GAAP
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 28, 2008
----------------------------------------------
GAAP Adjustments Non-GAAP
-------------- -------------- --------------
Product revenue $ 137,595 $ -- $ 137,595
Contract revenue 4,446 -- 4,446
Up-front
license fees 5,582 -- 5,582
-------------- -------------- --------------
Total revenue 147,623 -- 147,623
Cost of product
revenue 86,831 (883)(a) 85,948
Cost of contract
revenue 3,790 -- 3,790
Cost of up-front
license fees 506 -- 506
-------------- -------------- --------------
Total cost of sales 91,127 (883) 90,244
Gross margin 56,496 883 57,379
Gross margin
percentage 38.3% 38.9%
Operating expenses:
Research and
development 18,441 (1,247)(a) 17,194
Sales, general and
administrative 21,843 (2,979)(a) 18,864
Amortization of
acquisition-related
intangibles 4,062 (4,062)(b) --
Gain on disposal
of assets 645 -- 645
-------------- -------------- --------------
Total operating
expenses 44,991 (8,288) 36,703
Operating income 11,505 9,171 20,676
Operating income
percentage 7.8% 14.0%
Non-operating income:
Gain on investments in
securities 53 -- 53
Interest and other
non-operating
income, net 2,507 -- 2,507
-------------- -------------- --------------
Income from continuing
operations before
income taxes 14,065 9,171 23,236
Income tax expense 3,218 2,098(c) 5,316
-------------- -------------- --------------
Net income from
continuing operations 10,847 7,073 17,920
Loss from discontinued
operations, net of
related tax (151) -- (151)
-------------- -------------- --------------
Net income $ 10,696 $ 7,073 $ 17,769
============== ============== ==============
Earnings per diluted
share:
From continuing
operations $ 0.12 $ 0.07 $ 0.20
From discontinued
operations $ (0.00) $ -- $ (0.00)
-------------- -------------- --------------
From net income $ 0.12 $ 0.07 $ 0.20
============== ============== ==============
Weighted average
shares of common
stock outstanding,
basic 88,057 -- 88,057
============== ============== ==============
Weighted average
shares of common
stock outstanding,
diluted 88,511 -- 88,511
============== ============== ==============
Three Months Ended
December 30, 2007
----------------------------------------------
GAAP Adjustments Non-GAAP
-------------- -------------- --------------
Product revenue $ 111,341 $ -- $ 111,341
Contract revenue 7,658 -- 7,658
Up-front
license fees -- -- --
-------------- -------------- --------------
Total revenue 118,999 -- 118,999
Cost of product
revenue 71,251 (726)(a) 70,525
Cost of contract
revenue 5,952 -- 5,952
Cost of up-front
license fees -- -- --
-------------- -------------- --------------
Total cost of sales 77,203 (726) 76,477
Gross margin 41,796 726 42,522
Gross margin
percentage 35.1% 35.7%
Operating expenses:
Research and
development 14,901 (1,039)(a) 13,862
Sales, general and
administrative 18,211 (1,492)(a,d) 16,719
Amortization of
acquisition-related
intangibles 4,048 (4,048)(b) --
Gain on disposal
of assets 474 -- 474
-------------- -------------- --------------
Total operating
expenses 37,634 (6,579) 31,055
Operating income 4,162 7,305 11,467
Operating income
percentage 3.5% 9.6%
Non-operating income:
Gain on investments in
securities -- -- --
Interest and other
non-operating
income, net 4,582 -- 4,582
-------------- -------------- --------------
Income from continuing
operations before
income taxes 8,744 7,305 16,049
Income tax expense 2,104 1,753(e) 3,857
-------------- -------------- --------------
Net income from
continuing operations 6,640 5,552 12,192
Loss from discontinued
operations, net of
related tax (20) -- (20)
-------------- -------------- --------------
Net income $ 6,620 $ 5,552 $ 12,172
============== ============== ==============
Earnings per diluted
share:
From continuing
operations $ 0.08 $ 0.06 $ 0.14
From discontinued
operations $ (0.00) $ -- $ (0.00)
-------------- -------------- --------------
From net income $ 0.08 $ 0.06 $ 0.14
============== ============== ==============
Weighted average
shares of common
stock outstanding,
basic 85,190 -- 85,190
============== ============== ==============
Weighted average
shares of common
stock outstanding,
diluted 86,848 -- 86,848
============== ============== ==============
(a) Non-cash stock-based compensation expense of $883 in costs of
product revenue, $1,247 in research and development and $2,979 in
sales, general and administrative for the three months ended
December 28, 2008 and $726 in costs of product revenue, $1,039 in
research and development and $2,174 in sales, general and
administrative for the three months ended December 30, 2007.
(b) Amortization expense of $4,062 for the three months ended
December 28, 2008 and $4,048 for the three months ended December
30, 2007 recognized on intangible assets resulting from
acquisitions.
(c) Estimated tax effects of non-cash stock-based compensation
expense and amortization related to acquisition-related
intangible assets based upon the Company's effective tax rate for
the given period.
(d) Reversal of $682 in personal property assessment related to
settling the audits of the Company's 2002 through 2007 property
tax returns with the County of Durham, NC.
(e) Estimated tax effects of non-cash stock-based compensation
expense, amortization related to acquisition-related intangible
assets and the reversal of a portion of the amount accrued
related to our personal property tax assessments based upon the
Company's overall consolidated effective tax rate for the given
period.
The following is a reconciliation showing how Cree, Inc.'s year-to-date income statements for fiscal 2009 and 2008 would appear if they were adjusted for the items noted below.
CREE, INC.
Reconciling Items to Six Months Financial Statements -
GAAP to Non-GAAP
(in thousands, except per share amounts)
(Unaudited)
Six Months Ended
December 28, 2008
----------------------------------------------
GAAP Adjustments As Adjusted
-------------- -------------- --------------
Product revenue $ 272,288 $ -- $ 272,288
Contract revenue 10,131 -- 10,131
Up-front license fees 5,582 -- 5,582
-------------- -------------- --------------
Total revenue 288,001 -- 288,001
Cost of
product revenue 173,475 (2,185)(a) 171,290
Cost of
contract revenue 8,161 -- 8,161
Cost of up-front
license fees 506 -- 506
-------------- -------------- --------------
Total cost of sales 182,142 (2,185) 179,957
Gross margin 105,859 2,185 108,044
Gross margin
percentage 37% 38%
Operating expenses:
Research and
development 35,716 (2,693)(a) 33,023
Sales, general
and administrative 44,761 (5,664)(a) 39,097
Amortization of
acquisition-related
intangibles 8,124 (8,124)(b) --
Loss on disposal and
impairment of
long-lived assets 1,050 -- 1,050
-------------- -------------- --------------
Total operating
expenses 89,651 (16,481) 73,170
Operating income 16,208 18,666 34,874
Operating income
percentage 5.6% 12.1%
Non-operating income:
Gain (loss) on
investments in
securities 65 -- 65
Interest and other
non-operating
income, net 5,484 -- 5,484
-------------- -------------- --------------
Income from continuing
operations before
income taxes 21,757 18,666 40,423
Income tax expense 4,972 4,338(c) 9,310
-------------- -------------- --------------
Net income from
continuing operations 16,785 14,328 31,113
Loss from discontinued
operations, net of
related tax (170) -- (170)
-------------- -------------- --------------
Net income $ 16,615 $ 14,328 $ 30,943
============== ============== ==============
Earnings per
diluted share:
From continuing
operations $ 0.19 $ 0.16 $ 0.35
From discontinued
operations $ (0.00) $ -- $ (0.00)
-------------- -------------- --------------
From net income $ 0.19 $ 0.16 $ 0.35
============== ============== ==============
Weighted average
shares of common
stock outstanding,
basic 87,954 -- 87,954
============== ============== ==============
Weighted average
shares of common
stock outstanding,
diluted 88,619 -- 88,619
============== ============== ==============
Six Months Ended
December 30, 2007
----------------------------------------------
GAAP Adjustments As Adjusted
-------------- -------------- --------------
Product revenue $ 217,304 $ -- $ 217,304
Contract revenue 15,081 -- 15,081
Up-front license fees -- -- --
-------------- -------------- --------------
Total revenue 232,385 -- 232,385
Cost of
product revenue 143,831 (1,640)(a) 142,191
Cost of
contract revenue 12,018 -- 12,018
Cost of up-front
license fees -- -- --
-------------- -------------- --------------
Total cost of sales 155,849 (1,640) 154,209
Gross margin 76,536 1,640 78,176
Gross margin
percentage 33% 34%
Operating expenses:
Research and
development 27,678 (1,936)(a) 25,742
Sales, general
and administrative 36,373 (4,656)(a,d) 31,717
Amortization of
acquisition-related
intangibles 8,096 (8,096)(b) --
Loss on disposal and
impairment of
long-lived assets 1,209 -- 1,209
-------------- -------------- --------------
Total operating
expenses 73,356 (14,688) 58,668
Operating income 3,180 16,328 19,508
Operating income
percentage 1.4% 8.4%
Non-operating income:
Gain (loss) on
investments in
securities 14,117 (14,117)(e) --
Interest and other
non-operating
income, net 8,309 -- 8,309
-------------- -------------- --------------
Income from continuing
operations before
income taxes 25,606 2,211 27,817
Income tax expense 6,098 547(f) 6,645
-------------- -------------- --------------
Net income from
continuing operations 19,508 1,664 21,172
Loss from discontinued
operations, net of
related tax (174) -- (174)
-------------- -------------- --------------
Net income $ 19,334 $ 1,664 $ 20,998
============== ============== ==============
Earnings per
diluted share:
From continuing
operations $ 0.22 $ 0.02 $ 0.24
From discontinued
operations $ (0.00) $ -- $ (0.01)
-------------- -------------- --------------
From net income $ 0.22 $ 0.02 $ 0.24
============== ============== ==============
Weighted average
shares of common
stock outstanding,
basic 84,936 -- 84,936
============== ============== ==============
Weighted average
shares of common
stock outstanding,
diluted 86,713 -- 86,713
============== ============== ==============
(a) Non-cash stock-based compensation expense of $2,185 in costs of
product revenue, $2,693 in research and development and $5,664 in
sales, general and administrative for the six months ended
December 28, 2008 and $1,640 in costs of product revenue, $1,936
in research and development and $3,068 in sales, general and
administrative for the six months ended December 30, 2007.
(b) Amortization expense of $8,124 for the six months ended December
28, 2008 and $8,096 for the six months ended December 30, 2007
recognized on intangible assets resulting from prior-year
acquisitions.
(c) Estimated tax effects of non-cash stock-based compensation
expense and amortization related to acquisition-related
intangible assets based upon the Company's effective tax rate for
the given period.
(d) Personal property assessment of $1,048 related to finalizing the
audits of the Company's 2002 through 2007 property tax returns.
(e) Gain on the sale of 500,000 shares of Color Kinetics Incorporated
common stock during the six months ended December 30, 2007.
(f) Estimated tax effects of non-cash stock-based compensation
expense, personal property tax assessment, amortization related
to acquisition-related intangible assets and gain on sale of
Color Kinetics Incorporated common stock based upon the Company's
overall consolidated effective tax rate for the given period.