-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LyGK8MN2DFTFniGvSoc5IA+e+9GVw/Dbw2EqgSbMmOCsQomZjJlTGBxFJvudut5Y HqaeovtmM/mG2zQJYpClTA== 0000887730-04-000007.txt : 20040430 0000887730-04-000007.hdr.sgml : 20040430 20040430092227 ACCESSION NUMBER: 0000887730-04-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040430 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEMET CORP CENTRAL INDEX KEY: 0000887730 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 570923789 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15491 FILM NUMBER: 04767494 BUSINESS ADDRESS: STREET 1: 2835 KEMET WAY CITY: SIMPSONVILLE STATE: SC ZIP: 29681 BUSINESS PHONE: 8039636300 MAIL ADDRESS: STREET 1: P O BOX 5928 STREET 2: 2835 KEMET WAY CITY: SIMPSONVILLE STATE: SC ZIP: 29681 8-K 1 eightfypr0404.txt 8K 4TH QTR FY04 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934 Date of Report (date of earliest event reported): April 30, 2004 KEMET Corporation - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-20289 57-0923789 - ------------------------------------------------------------------------------- (State or other (Commission File Number) (IRS Employer jurisdiction) Identification No.) 2835 KEMET Way, Simpsonville, SC 29681 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrants telephone number, including area code: (864) 963-6300 2 Item 7. Financial Statement and Exhibits (a) Not Applicable (b) Not Applicable (c) Exhibits 99.1 Press Release, dated April 26, 2004 issued by the Company. 3 Signature Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: April 30, 2004 KEMET Corporation /S/ D. E. Gable David E. Gable Vice President and Chief Financial Officer EX-99.1 CHARTER 3 exhibit0404991.txt EXHIBIT 4TH QTR FY04 1 Greenville, South Carolina (April 26, 2004) - KEMET Corporation (NYSE:KEM) today reported financial results for the quarter and fiscal year ended March 31, 2004. Net sales for the quarter were $117.1 million and net loss before special charges was $(2.1) million, or $(0.02) per diluted share. Comparisons to prior periods are as follows:
Quarter Ended Year Ended - ------------- - ---------- Mar 2004 Dec 2003 Mar 2003 Mar 2004 Mar 2003 - -------- - -------- - -------- - -------- - -------- (In Millions, Except Per Share Data) Net sales $ 117.1 $ 111.3 $ 106.5 $ 433.9 $ 447.3 Before special charges (non-GAAP) Net loss (2.1) (7.3) (3.6) (26.0) (3.7) Net loss per diluted share (0.02) (0.08) (0.04) (0.30) (0.04) Special after tax charges (50.0) (5.8) (12.9) (86.0) (52.3) Special after tax charges per diluted share (0.58) (0.07) (0.15) (1.00) (0.61) After special charges (GAAP) Net Loss (52.1) (13.1) (16.5) (112.0) (56.0) Net loss per diluted share (0.60) (0.15) (0.19) (1.30) (0.65)
"Reflecting the continuing improvement in the electronics industry, March 2004 quarter net sales increased 10% and total unit shipments increased 69% compared to the March 2003 quarter," stated Dr. Jeffrey Graves, Chief Executive Officer. "KEMET's capacity utilization is approximately 80%, and we believe industry wide capacity utilization is higher. Mix adjusted average selling prices rose 1% in the March 2004 quarter, the second quarterly increase, and this firmness in pricing is continuing in the June 2004 quarter. "KEMET's net sales and total unit shipments were up 5% sequentially in the March 2004 quarter. The strongest growth was in North America and Europe and in Distribution, which are benefiting from a recovery in IT infrastructure spending, combined with continued strength in the industrial, military and automotive sectors. Our expectation in the coming quarter is that, based on the assumption of continued economic recovery, unit shipment growth will continue, pricing will remain firm, and our product mix will shift toward larger case sizes and a stronger percentage growth in tantalum products. 2 "Currently, 90% of our production workforce is in low cost locations in the world. With the surge in demand we are experiencing, we have begun balancing the remaining manufacturing moves with increasing customer demand. We now estimate that virtually all of our commodity production should be in low cost regions by mid 2005. "KEMET's innovation continues to be strong. Recently we announced 67 new tantalum parts, including 41 that were first to market. With an experienced management team and a strong balance sheet, I remain confident in KEMET's future." As of March 31, 2004, KEMET had $271 million in cash and short and long-term investments in marketable securities, $100 million in long-term debt and $684 million in stockholders' equity. The company will hold a conference call at 8:30 am ET Tuesday, April 27, 2004, to discuss the earnings release. The call will last approximately one hour, and after an initial presentation, questions will be taken as time permits. To access the call, participants in the United States should dial 1-800-416-8033, and participants outside the United States should dial 1-706-643-0979. Participants should reference "KEMET Corporation" and the Conference ID #: 3123653. An archived replay of the conference call will be available through midnight on May 11, 2004, by calling 1-800-642-1687 inside the United States, and 1-706-645-9291 internationally, and referencing the Conference ID #. KEMET's common stock is listed on The New York Stock Exchange under the symbol KEM. At the Investor Relations portion of the company's web site at http://www.KEMET.com/IR, users can subscribe to KEMET news releases and can find additional company information. BUSINESS OUTLOOK The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Current global economic conditions make it particularly difficult at present to predict product demand and other related matters. * Sales of surface-mount capacitors were 82%, and sales of leaded parts were 18% of total sales for the March 2004 quarter. * By region, 42% percent of total sales for the March 2004 quarter were to customers in North America, 35% were to Asia, 22% were to Europe, and 1% to the rest of the world. * By channel, 53% percent of total sales for the March 2004 quarter were to distribution customers, 25% were to Electronic Manufacturing Services customers, and 22% were to Original Equipment Manufacturing customers. * Average selling prices for the March 2004 quarter, adjusted for changes in product mix, increased approximately 1% from average selling prices for the December 2003 quarter. 3 * On July 2, 2003, KEMET announced the reorganization of its operations around the world resulting in the location of virtually all of commodity production in low cost regions to be completed by mid 2005. KEMET estimates it will incur special charges of approximately $35 million over the period of the reorganization related to movement of manufacturing operations. When the reorganization is complete, the company estimates this will yield an approximate one-year payback based on unit volumes at the time of the announcement, and a $50-60 million savings with volume recovery by fiscal 2006 if unit growth continues as it has in recent quarters. Various parts of KEMET's announced move of production have occurred in accordance with the anticipated time line. Charges related to movement of manufacturing operations in the March 2004, December 2003, and September 2003 quarters were $3 million, $10 million and $12 million, respectively. The balance of the $35 million is expected to be realized ratably over the next six quarters. The timing of the special charges is dependent on the timing of operational decisions, some of which have not been finalized, and on operational activities yet to occur. * Prior to the end of fiscal 2004, KEMET terminated and liquidated its defined benefit pension plan and, as a result, recognized a $47 million after-tax special charge (pension settlement charges) in the March 2004 quarter. The termination of the pension plan is anticipated to result in future savings of $6 million per year. KEMET continues to provide other defined contribution retirement plans to its employees. * Summary of special charges in the fiscal March 2004 periods:
Quarter Fiscal Year - -------------------------------------------- - ----------- Jun-03 Sep-03 Dec-03 Mar-04 Mar-04 - ------ - ------ - ------ - ------ - ------ (In Millions) Manufacturing relocation and employee termination costs $ 0.3 $ 11.9 $ 10.4 $ 2.8 $ 25.4 Termination of defined benefit pension plan - - - $ 50.4 50.4 Lower of cost or market valuation of tantalum supply agreement - 12.4 - - 12.4 Impairment (recovery of solid aluminum business line - 22.3 (1.6) - 20.7 Impaired assets associated with closing facilities - - - 4.6 - -------- - -------- - -------- - -------- - -------- Special charges 0.3 46.6 8.8 53.2 108.9 Income tax expense (0.1) (16.6) (3.0) (3.2) (22.9) - -------- - -------- - -------- - -------- - -------- Special charges net of taxes $ 0.2 $ 30.0 $ 5.8 $ 50.0 $ 86.0 ========= ======== ======== ======== ========
1 4 * For fiscal 2005, KEMET anticipates maintaining our investments in key customer relationships through our direct sales and customer service professionals, as well as our investments in research and development, to maintain our competitive position in the capacitor industry.
Fiscal Year Ended Fiscal Quarter Ended - -------------------------------------------------- - --------------------------------------- 2000 2001 2002 2003 2004 Jun 2003 Sep 2003 Dec 2003 Mar 2004 - ---- - ---- - ---- - ---- - ---- - -------- - -------- - -------- - -------- (In Millions) SG&A $52.7 $55.2 $62.3 $54.4 $51.2 $13.5 $13.0 $11.0 $12.8 R&D $22.1 $24.9 $27.2 $25.3 $24.4 $ 5.9 $ 5.9 $ 6.3 $ 6.3
* Capital expenditures for the March 2004 quarter were $12 million.
Fiscal Year Ended Fiscal Quarter Ended - -------------------------------------- - ---------------------------------------------------------- 2002 2003 2004 Jun 2003 Sep 2003 Dec 2003 Mar 2004 - ------- - ------- - ------- - ------------ - ------------ - ------------ - ------------ (In Millions) Additions to property, plant and equipment $ 79 $ 22 $ 26 $ 3 $ 6 $ 5 $ 12
* During the March 2004 quarter, inventories decreased $2 million to $129 million from $131 million at December 31, 2003. Raw materials and supplies decreased $5 million in the March 2004 quarter, and finished goods and work in process increased $3 million.
Mar 2000 Mar 2001 Mar 2002 Mar 2003 Jun 2003 Sep 2003 Dec 2003 Mar 2004 - -------- - -------- - -------- - -------- - -------- - -------- - -------- - -------- (In Millions) Raw materials and supplies $ 53 $ 115 $ 118 $ 91 $ 81 $ 70 $ 65 $ 60 Work in process and finished goods 78 149 141 93 87 69 66 69 - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ $ 131 $ 264 $ 259 $ 184 $ 168 $ 139 $ 131 $ 129 ====== ====== ====== ====== ====== ====== ====== ======
5 * Cash and long and short-term investments in marketable securities during the March 2004 quarter decreased $30 million to $271 million from $301 million at December 31, 2003. QUIET PERIOD Beginning July 1, 2004, KEMET will observe a Quiet Period during which the Business Outlook as provided in this news release and the company's quarterly report on Form 10-Q will no longer constitute the company's current expectations. During the Quiet Period, the Business Outlook in these documents should be considered to be historical, applying prior to the Quiet Period only and not subject to update by the company. During the Quiet Period, KEMET representatives will not comment concerning the Business Outlook or KEMET's financial results or expectations. The Quiet Period will extend until the day when KEMET's next quarterly earnings release is published. This release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We intend that these forward-looking statements be subject to the safe harbor created by that provision. These forward-looking statements involve risks and uncertainties and include, but are not limited to, statements regarding future events and our plans, goals, and objectives. Our actual results may differ materially from these statements. These risks, trends, and uncertainties, which in some instances are beyond our control, include: risks associated with the cyclical nature of the electronics industry, the requirement to continue to reduce the cost of our products, the competitiveness of our industry, an increase in the cost of our raw materials, the location of several of our plants in Mexico, and the possible loss of key employees. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in these forward-looking statements will be realized. The inclusion of this forward-looking information should not be regarded as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved. Furthermore, past performance in operations and share price is not necessarily predictive of future performance. 6
KEMET CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (Dollars in Thousands Except Per Share Data) Unaudited Three months ended Twelve months ended March 31, March 31, - ------------------------------ - ------------------------------ 2004 2003 2004 2003 ------------- - ------------- - -------------- - ------------- Income Statement Data: Net Sales $ 117,101 $ 103,727 $ 316,781 $ 340,827 Cost of goods sold 101,876 93,956 312,104 294,886 Loss on long-term supply contract - 40,833 12,355 40,833 Selling, general and administrative expenses 12,752 13,834 38,494 40,984 Research and development 6,282 5,615 18,167 19,330 Pension settlement charges 50,398 - 50,398 - Restructuring and impairment charges 2,839 18,003 40,468 31,700 ----------- ----------- ----------- ----------- Operating loss (57,046) (28,009) (159,014) (97,002) Interest expense 1,732 1,378 6,472 6,097 Interest income (1,132) (767) (3,847) (3,818) Other (income) expense (1,228) (591) (3,311) (11,387) Income tax benefit (4,366) (11,582) (46,353) (31,906) ----------- ----------- ----------- ----------- Net loss $ (52,052) $ (16,537) $ (111,975) $ (55,988) =========== =========== =========== =========== Loss Per Share Data: Net loss per share: Basic $ (0.60) $ (0.19) $ (1.30) $ (0.65) Diluted $ (0.60) $ (0.19) $ (1.30) $ (0.65) Weight-average shares outstanding: Basic 86,462,742 86,230,198 86,412,281 86,167,563 Diluted 86,462,742 86,230,198 86,412,281 86,167,563
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KEMET CORPORATION AND SUBSIDIARIES Consolidated Balance Sheet (Dollars in Thousands) Unaudited March 31, 2004 December 31, 2003 ------------------ ---------------- ASSETS Cash and cash equivalents $ 183,528 $ 219,154 Short-term investments 3,172 9,207 Accounts receivable, net 57,303 55,521 Inventories 129,016 130,601 Prepaid expenses and other current assets 6,979 6,685 Deferred income taxes 652 29,716 - ------------ - ------------ Total current assets 380,650 450,884 Property, plant and equipment, net 424,161 428,429 Long-term investments in marketable securities 84,584 72,945 Investments in affiliates 3,610 3,808 Intangible assets, net 45,088 45,592 Other assets 3,321 25,366 - ------------ - ------------ Total assets $ 941,414 $ 1,026,024 ============ ============ Liabilities and Stockholders' Equity Accounts payable trade $ 38,268 $ 33,945 Accrued expenses 41,182 44,861 Income taxes payable 15,863 19,591 - ------------ - ------------ Total current liabilities 95,313 98,397 Long-term debt 100,000 100,000 Other non-current obligations 61,623 60,843 Deferred income taxes - 32,007 - ------------ - ------------ Total liabilities 256,936 291,247 Common stock 879 879 Additional paid-in capital 317,497 317,579 Retained earnings 394,940 446,992 Accumulated other comprehensive loss (1,457) (2,948) Treasury stock, at cost (27,381) (27,725) - ------------ - ------------ Total stockholders' equity 684,478 734,777 Total liabilities and stockholders' equity $ 941,414 $ 1,026,024 ============ ============
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