Today’s presentations include forward-looking statements about our business outlook, and we may make other forward-looking statements during the call. These may include comments concerning trends and revenues, gross margin and earnings, plans for new products and other forward-looking statements indicated by words like anticipate, expect, target and estimate. Such forward-looking statements are subject to numerous risks and uncertainties.Our press release today and the SEC filings noted in the release mention important factors that could cause actual results to differ materially. Also, we’d like to note that we’ll be limiting our comments regarding Cree’s fourth quarter, the fiscal year 2012, to a discussion of the information included in our earnings release and the metrics posted on our website. We will not be able to answer any questions that would involve providing additional financial information about the quarter beyond the comments made in the prepared remarks. This call is being recorded on behalf of the company. The presentations and the recording of this call are copywritten property of the company and no other recording, reproduction or transcription is permitted unless authorized by the company in writing. Consistent with our previous conference calls, we are requesting that only sell-side analysts ask questions during the Q&A session. Also since we plan to complete the call in the allotted time of one hour, we ask that the analysts limit themselves to one question and one follow-up. We recognize that other investors may have additional questions, and we welcome you to contact us after the call by e-mail or phone at 919-287-7895. We are also webcasting our conference call and a replay will be available on our website through August 21, 2012. Now I’d like to turn the call over to Chuck. Chuck Swoboda Thank you, Raiford. In fiscal 2012, we once again demonstrated the strength of our industry leadership, delivering solid results in a very tough market, by focusing on innovation to drive LED lighting adoption. We gained significant momentum in scale in lighting with our acquisition of Ruud, which has better positioned Cree to lead the market. For the year, revenue increased 18% to $1.16 billion with non-GAAP net income of $109 million, or $0.95 per share.
We finished the year strong in fiscal Q4 with record revenue of $307 million and non-GAAP net income of $29 million, or $0.25 per diluted share. Revenue was slightly higher than the midpoint of our target range as LEDs, lighting and power and RF delivered solid growth in Q4. Non-GAAP earnings per share were also on the high-end of our target range for the quarter, primarily due to continued improvement in gross margins at a lower tax rate than we had forecast.The revenue trends in Q4 were as follows: lighting sales increased more than $14 million, or 16% from Q3 as we regained momentum with our agents and saw the initial benefits of our new product launches. LED sales increased $4 million from Q3, which was driven by growth in LED components. Power and RF sales increased almost $4 million from Q3, driven by growth in both product lines. Non-GAAP gross margin increased 70 basis points to 36.3% in Q4, which was on the high side of our target for the quarter. The overall improvement in margin was driven by a combination of factory cost reductions, lower cost new products and slightly higher factory utilization. While the LED market remained very competitive, pricing declines were in line with our targets for the quarter. We continued to closely manage inventory across our factories, while working to respond to short lead time expectations in both the LED and lighting markets and support a significant number of new product launches. Overall, we reduced inventory in Q4 by $8 million to 85 days. Cash and investments increased to $745 million due to solid execution, reduced capital spending, and higher profitability. Free cash flow was $47 million in Q4, and we remain in a good capacity position to support future increased demand in our LED product line. Overall, our strong balance sheet gives us the ability to continue to invest in growing our business and the market for LED lighting.
Overall company backlog is similar to this point last quarter with lighting trending higher, power and RF at a similar level, and LED slightly behind. While we are encouraged by our progress in LED lighting, the macroeconomic environment is impacting our growth outlook. And given the global nature of our LED business, we believe it could be impacted the most in the near-term.Read the rest of this transcript for free on seekingalpha.com