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UPDATE 1-Cree sees demand growth, could tap debt market
May 12, 2009 / 3:54 PM / 8 years ago

UPDATE 1-Cree sees demand growth, could tap debt market

* Cree CEE “cautiously optimistic” on demand growth

* Could tap debt markets to fund growth if needed

NEW YORK, May 12 (Reuters) - LED lighting maker Cree Inc (CREE.O) is “cautiously optimistic” that demand for its products will pick up in the coming months, and it could tap the debt markets to help fund its growth, Chief Executive Chuck Swoboda told Reuters on Tuesday.

The company, which currently has no outstanding debt and more than $400 million in cash, is not currently planning a debt issuance, but Swoboda said it would be better to issue debt before the company was in need of cash.

“I think there’s always that opportunity, if and when we’re ready,” he said.

Cree, which last month posted fiscal third-quarter profit of $4.0 million, or 5 cents per share, has seen demand from automobile, cell phone and other consumer applications sink with the weak economy.

But Swoboda said the U.S. stimulus packaged passed earlier this year is helping cities and municipalities fund new LED projects, and the company is expecting some growth in the current quarter.

“The initial signals are positive,” he said.

LEDs, or light-emitting diodes, are typically more expensive than conventional lights but consume far less energy and can last for two decades or more.

Those energy savings allow companies or cities to recoup their investment in the LEDs in as little as two to three years, Swoboda said.

Shares in Cree have gained nearly 70 percent so far this year. (Reporting by Matt Daily, editing by Gerald E. McCormick)

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