Cree will host a con erence call at 500 p

Achie ed industry-best reported R&D results o 161 lumens perwatt or a white power LED. These results demonstrate Cree'scontinued commitment to deli er industry-leading per ormancethrough a constant ocus on inno ation and R&D. Entered into a patent license agreement granting MitsubishiChemical Corporation (MCC) an exclusi e license (subject tocertain exceptions) to manu acture and sell reestanding GaNsubstrates, with Cree to recei e o er the li e o the agreement acombination o guaranteed payments and royalties on the sale o GaN substrates Agreed with Bridgelux, Inc. to settle the parties' patentin ringement litigation and to dismiss all claims andcounterclaims in the suits. In addition, Bridgelux and Cree ha eentered into a supply agreement under which Cree will become asigni icant supplier to Bridgelux. Welcomed Indian Wells, Cali ornia, to the LED City(r) Program.The city has replaced much o the lighting in City Hall, with allcircular recessed lighting con erted to the Cree LR6 LED light,reducing electricity consumption by 80.

The city plans toe aluate LED lighting or other municipal lighting applicationsto urther increase energy sa ings. Welcomed Notre Dame, Madison Area Technical College, and theUni ersity o Cali ornia, Da is to the LED Uni ersity Program(tm).Notre Dame is implementing our pilot installations to e aluatethe easibility o LED lighting across the campus and is alreadyrealizing energy sa ings o 81 compared to incandescent lightingin the Hesburgh Library.Q2 2009 inancial Metrics: GAAP gross margin was 38 o re enue compared to 35 in Q2 o iscal 2008, and non-GAAP gross margin was 39 compared to 36 inQ2 o iscal 2008. Q2 gross margin included approximately 200basis points o bene it related to the MCC and Bridgelux licenseagreements. Accounts recei able increased $5.1 million rom Q1 o iscal 2009to $108.6 million, resulting in days sales outstanding o 66, thesame as Q1 o iscal 2009. In entory decreased $0.4 million rom Q1 o iscal 2009 to $78.8million and represents 78 days o in entory, the same as Q1 o iscal 2009. Cash and in estments increased $26.5 million to $365.5 million,with cash low rom operations o $40.7 million and ree cash low (cash low rom operations less capital expenditures) o $23.2 millionBusiness Outlook:Current uncertainty in global economic conditions makes it particularlydi icult to predict demand and makes it more likely that Cree's actual resultscould di er materially rom expectations.

or its third quarter o iscal 2009ending March 29, 2009, Cree targets re enue in a range o $128 million to $135million with GAAP earnings o $0.02 to $0.05 per diluted share and non-GAAPearnings o $0.10 to $0.13 per diluted share, based on an estimated 89 milliondiluted weighted a erage shares. Targeted non-GAAP earnings exclude expensesrelated to the amortization o acquired intangibles o $0.03 per diluted shareand stock-based compensation expense o $0.05 per diluted share.Cree will host a con erence call at 5:00 p.m. Eastern time today to re iew thehighlights o the iscal second quarter 2009 results and the iscal thirdquarter 2009 business outlook, including signi icant actors and assumptionsunderlying the targets noted abo e. Log on to Cree'swebsite at and go to "In estor Relations - O er iew" or webcastdetails.

The call will be archi ed and a ailable on the website through ebruary3, 2009.Supplemental inancial in ormation, including the non-GAAP reconciliationattached to this press release, is a ailable in the "In estor Relations" sectiono Cree's website, under " inancial Metrics", "Quarter ending December 28,2008," at Cree, Inc.Cree is leading the LED lighting re olution and setting the stage to obsoletethe incandescent light bulb through the use o energy-e icient, en ironmentally riendly LED lighting. Cree is a market-leading inno ator o lighting-classLEDs, LED lighting solutions, and semiconductor solutions or wireless and powerapplications.Cree's product amilies include recessed LED down lights, lighting-class powerLEDs, high-brightness LEDs, blue and green LED chips, power-switching de icesand radio- requency/wireless de ices. Cree solutions are dri ing impro ements inapplications such as general illumination, backlighting, electronic signs andsignals, ariable-speed motors, and wireless communications.The Cree, Inc. logo is a ailable at http:// additional product and company in ormation, please re er to schedules attached to this release are an integral part o the release.