Condensed Consolidating Financial Statements

The 10.5% Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by certain of the Company’s 100% owned domestic subsidiaries (“Guarantor Subsidiaries”) and secured by a first priority lien on 51% of the capital stock of certain of our foreign restricted subsidiaries (“Non-Guarantor Subsidiaries”). The Company’s Guarantor Subsidiaries and Non-Guarantor Subsidiaries are not consistent with the Company’s business groups or geographic operations; accordingly this basis of presentation is not intended to present the Company’s financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting. The Company is required to present condensed consolidating financial information in order for the subsidiary guarantors of the Company’s public debt to be exempt from reporting under the Securities Exchange Act of 1934, as amended.

Condensed consolidating financial statements for the Company’s Guarantor Subsidiaries and Non-Guarantor Subsidiaries are presented in the following tables (amounts in thousands):

Condensed Consolidating Balance Sheet

September 30, 2014

(Unaudited)



	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	641	$	29,984	$	20,951	$	—		$	51,576
Accounts receivable, net	—		41,010		54,571		—			95,581
Intercompany receivable	320,305		348,367		217,971		(886,643		)	—
Inventories, net	—		127,232		61,601		—			188,833
Prepaid expenses and other	3,145		16,610		23,415		(2,941		)	40,229
Deferred income taxes	—		1,957		4,612		—			6,569
Total current assets	324,091		565,160		383,121		(889,584		)	382,788
Property and equipment, net	316		101,498		173,684		—			275,498
Goodwill	—		35,584		—		—			35,584
Intangible assets, net	—		27,688		7,689		—			35,377
Investment in NEC TOKIN	—		48,449		—		—			48,449
Investments in subsidiaries	421,754		424,312		30,285		(876,351		)	—
Restricted cash	—		12,955		—		—			12,955
Deferred income taxes	—		969		5,454		—			6,423
Other assets	4,750		14,486		917		—			20,153
Long-term intercompany receivable	74,603		58,634		2,800		(136,037		)	—
Total assets	$	825,514	$	1,289,735	$	603,950	$	(1,901,972	)	$	817,227
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	18,486	$	6,800	$	540	$	—		$	25,826
Accounts payable	93		35,621		36,915		—			72,629
Intercompany payable	208,989		590,222		87,432		(886,643		)	—
Accrued expenses	25,301		12,692		28,407		—			66,400
Income taxes payable and deferred income taxes	—		2,923		363		(2,941		)	345
Total current liabilities	252,869		648,258		153,657		(889,584		)	165,200
Long-term debt, less current portion	357,807		6,449		12,000		—			376,256
Other non-current obligations	—		3,626		48,620		—			52,246
Deferred income taxes	—		4,191		4,496		—			8,687
Long-term intercompany payable	—		74,603		61,434		(136,037		)	—
Stockholders’ equity	214,838		552,608		323,743		(876,351		)	214,838
Total liabilities and stockholders’ equity	$	825,514	$	1,289,735	$	603,950	$	(1,901,972	)	$	817,227

Condensed Consolidating Balance Sheet (1)

March 31, 2014



	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	616	$	22,200	$	35,113	$	—		$	57,929
Accounts receivable, net	—		49,462		49,485		—			98,947
Intercompany receivable	318,582		329,211		203,018		(850,811		)	—
Inventories, net	—		119,340		68,634		—			187,974
Prepaid expenses and other	3,146		15,286		21,380		(2,941		)	36,871
Deferred income taxes	—		1,022		5,673		—			6,695
Current assets of discontinued operations	—		—		12,160		—			12,160
Total current assets	322,344		536,521		395,463		(853,752		)	400,576
Property and equipment, net	329		104,874		187,445		—			292,648
Goodwill	—		35,584		—		—			35,584
Intangible assets, net	—		28,380		8,804		—			37,184
Investment in NEC TOKIN	—		46,419		—		—			46,419
Investments in subsidiaries	402,090		424,386		30,285		(856,761		)	—
Restricted cash	—		13,512		—		—			13,512
Deferred income taxes	—		1,010		5,768		—			6,778
Other assets	5,415		3,895		820		—			10,130
Non-current assets of discontinued operations	—		—		836		—			836
Long-term intercompany receivable	81,746		60,663		2,801		(145,210		)	—
Total assets	$	811,924	$	1,255,244	$	632,222	$	(1,855,723	)	$	843,667
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	5,988	$	—	$	1,309	$	—		$	7,297
Accounts payable	84		36,579		38,155		—			74,818
Intercompany payable	176,624		570,535		103,652		(850,811		)	—
Accrued expenses	34,236		13,698		28,534		—			76,468
Income taxes payable and deferred income taxes	—		2,909		1,012		(2,941		)	980
Current liabilities of discontinued operations	—		—		7,269		—			7,269
Total current liabilities	216,932		623,721		179,931		(853,752		)	166,832
Long-term debt, less current portion	372,251		6,449		12,592		—			391,292
Other non-current obligations	857		3,311		51,696		—			55,864
Deferred income taxes	—		3,258		1,945		—			5,203
Non-current liabilities of discontinued operations	—		—		2,592		—			2,592
Long-term intercompany payable	—		81,747		63,463		(145,210		)	—
Stockholders’ equity	221,884		536,758		320,003		(856,761		)	221,884
Total liabilities and stockholders’ equity	$	811,924	$	1,255,244	$	632,222	$	(1,855,723	)	$	843,667

(1) Derived from audited financial statements.

Condensed Consolidating Statement of Operations

For the Quarter Ended September 30, 2014

(Unaudited)



	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	57		$	250,019	$	198,983		$	(233,766	)	$	215,293
Operating costs and expenses:
Cost of sales	561			211,328		175,839			(218,190		)	169,538
Selling, general and administrative expenses	13,056			15,071		12,959			(15,576		)	25,510
Research and development	140			4,247		1,951			—			6,338
Restructuring charges	—			192		1,495			—			1,687
Net (gain) loss on sales and disposals of assets	(9		)	43		(584		)	—			(550		)
Total operating costs and expenses	13,748			230,881		191,660			(233,766		)	202,523
Operating income (loss)	(13,691		)	19,138		7,323			—			12,770
Interest income	—			—		(3		)				(3		)
Interest expense	9,726			263		298						10,287
Other (income) expense, net	(12,975		)	9,355		(3,975		)	—			(7,595		)
Equity in earnings of subsidiaries	(16,772		)	—		—			16,772			—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	6,330			9,520		11,003			(16,772		)	10,081
Income tax expense	—			210		2,373			—			2,583
Income (loss) from continuing operations before equity income from NEC TOKIN	6,330			9,310		8,630			(16,772		)	7,498
Equity income (loss) from NEC TOKIN	—			232		—			—			232
Income (loss) from continuing operations	6,330			9,542		8,630			(16,772		)	7,730
Income (loss) from discontinued operations	—			593		(1,993		)	—			(1,400		)
Net income (loss)	$	6,330		$	10,135	$	6,637		$	(16,772	)	$	6,330

Condensed Consolidating Statements of Comprehensive Income (Loss)

Quarter Ended September 30, 2014

(Unaudited)



Comprehensive income (loss)	$	(44	)	$	14,431	$	(1,933	)	$	(16,772	)	$	(4,318	)

Condensed Consolidating Statement of Operations

For the Quarter Ended September 30, 2013

(Unaudited)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	67		$	245,786		$	208,798		$	(246,202	)	$	208,449
Operating costs and expenses:
Cost of sales	299			222,882			184,945			(230,594		)	177,532
Selling, general and administrative expenses	9,944			16,075			11,904			(15,608		)	22,315
Research and development	54			3,791			1,766			—			5,611
Restructuring charges	—			446			918			—			1,364
Net (gain) loss on sales and disposals of assets	—			18			24			—			42
Total operating costs and expenses	10,297			243,212			199,557			(246,202		)	206,864
Operating income (loss)	(10,230		)	2,574			9,241			—			1,585
Non-operating (income) expense:
Interest income	(3		)	—			(8		)	—			(11		)
Interest expense	10,065			226			(383		)	—			9,908
Other (income) expense, net	(9,915		)	9,639			1,222			—			946
Equity in earnings of subsidiaries	2,703			—			—			(2,703		)	—
Income (loss) from continuing operations before income taxes	(13,080		)	(7,291		)	8,410			2,703			(9,258		)
Income tax expense	—			33			1,411			—			1,444
Income (loss) from continuing operations before equity loss from NEC TOKIN	(13,080		)	(7,324		)	6,999			2,703			(10,702		)
Equity income (loss) from NEC TOKIN	—			(1,243		)	—			—			(1,243		)
Income (loss) from continuing operations	(13,080		)	(8,567		)	6,999			2,703			(11,945		)
Income (loss) from discontinued operations	(16		)	(250		)	(885		)	—			(1,151		)
Net income (loss)	$	(13,096	)	$	(8,817	)	$	6,114		$	2,703		$	(13,096	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

For the Quarter Ended September 30, 2013

(Unaudited)



Comprehensive income (loss)	$	(10,576	)	$	(9,936	)	$	10,608	$	2,703	$	(7,201	)

Condensed Consolidating Statement of Operations

For the Six Month Period Ended September 30, 2014

(Unaudited)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	110		$	505,596		$	400,202		$	(477,734	)	$	428,174
Operating costs and expenses:
Cost of sales	1,025			434,000			360,747			(446,310		)	349,462
Selling, general and administrative expenses	24,145			32,223			25,345			(31,424		)	50,289
Research and development	206			8,597			4,124			—			12,927
Restructuring charges	—			562			2,955			—			3,517
Net gain (loss) on sales and disposals of assets	(9		)	230			(406		)	—			(185		)
Total operating costs and expenses	25,367			475,612			392,765			(477,734		)	416,010
Operating income (loss)	(25,257		)	29,984			7,437			—			12,164
Non-operating (income) expense:
Interest income	—			—			(6		)	—			(6		)
Interest expense	19,524			663			556			—			20,743
Non-operating (income) expense, net	(23,801		)	16,799			(4,126		)	—			(11,128		)
Equity in earnings of subsidiaries	(23,770		)	—			—			23,770			—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	2,790			12,522			11,013			(23,770		)	2,555
Income tax expense	—			233			3,632			—			3,865
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	2,790			12,289			7,381			(23,770		)	(1,310		)
Equity income (loss) from NEC TOKIN	—			(1,443		)	—			—			(1,443		)
Income (loss) from continuing operations	2,790			10,846			7,381			(23,770		)	(2,753		)
Income (loss) from discontinued operations	—			104			5,439			—			5,543
Net income (loss)	$	2,790		$	10,950		$	12,820		$	(23,770	)	$	2,790

Condensed Consolidating Statements of Comprehensive Income (Loss)

For the Six Month Period Ended September 30, 2014

(Unaudited)



Comprehensive income (loss)	$	(4,354	)	$	15,850	$	3,815	$	(23,770	)	$	(8,459	)

Condensed Consolidating Statement of Operations

For the Six Month Period Ended September 30, 2013

(Unaudited)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	86		$	483,109		$	415,743		$	(488,432	)	$	410,506
Operating costs and expenses:
Cost of sales	691			449,930			373,114			(462,690		)	361,045
Selling, general and administrative expenses	20,555			28,132			25,450			(25,742		)	48,395
Research and development	144			8,066			3,467			—			11,677
Restructuring charges	—			2,380			3,594			—			5,974
Net (gain) loss on sales and disposals of assets	—			18			24			—			42
Total operating costs and expenses	21,390			488,526			405,649			(488,432		)	427,133
Operating income (loss)	(21,304		)	(5,417		)	10,094			—			(16,627		)
Non-operating (income) expense:
Interest income	(11		)	(3		)	(161		)	—			(175		)
Interest expense	20,194			478			(730		)	—			19,942
Other (income) expense, net	(19,975		)	20,446			830			—			1,301
Equity in earnings of subsidiaries	26,698			—			—			(26,698		)	—
Income (loss) from continuing operations before income taxes	(48,210		)	(26,338		)	10,155			26,698			(37,695		)
Income tax expense (benefit)	—			89			3,171			—			3,260
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(48,210		)	(26,427		)	6,984			26,698			(40,955		)
Equity income (loss) from NEC TOKIN	—			(4,620		)	—			—			(4,620		)
Income (loss) from continuing operations	(48,210		)	(31,047		)	6,984			26,698			(45,575		)
Income (loss) from discontinued operations	(26		)	(567		)	(2,068		)	—			(2,661		)
Net income (loss)	$	(48,236	)	$	(31,614	)	$	4,916		$	26,698		$	(48,236	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

For the Six Month Period Ended September 30, 2013

(Unaudited)



Comprehensive income (loss)	$	(44,087	)	$	(34,978	)	$	11,752	$	26,698	$	(40,615	)

Condensed

Consolidating Statement of Cash Flows

For the Six Month Period Ended September 30, 2014

(Unaudited)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations		Consolidated
Sources (uses) of cash and cash equivalents
Net cash provided by (used in) operating activities	$	12,417		$	4,666		$	(15,489	)	$	—	$	1,594
Investing activities:
Capital expenditures	—			(5,514		)	(6,461		)	—		(11,975		)
Change in restricted cash	—			558			—			—		558
Proceeds from sale of assets	—			2,273			178			—		2,451
Proceeds from sale of discontinued operations	—			—			10,125			—		10,125
Net cash used in investing activities	—			(2,683		)	3,842			—		1,159
Financing activities:
Proceeds from revolving line credit	—			14,300			—			—		14,300
Payments of revolving line credit	—			(7,500		)	—			—		(7,500		)
Deferred acquisition payments	(10,597		)	(1,000		)	—			—		(11,597		)
Payments of long-term debt	(1,820		)	—			(1,315		)	—		(3,135		)
Proceeds from exercise of stock options	25			—			—			—		25
Net cash provided by (used in) financing activities	(12,392		)	5,800			(1,315		)	—		(7,907		)
Net increase (decrease) in cash and cash equivalents	25			7,783			(12,962		)	—		(5,154		)
Effect of foreign currency fluctuations on cash	—			1			(1,200		)	—		(1,199		)
Cash and cash equivalents at beginning of fiscal period	616			22,200			35,113			—		57,929
Cash and cash equivalents at end of fiscal period	$	641		$	29,984		$	20,951		$	—	$	51,576

Condensed Consolidating Statements of Cash Flows

For the Six Month Period Ended September 30, 2013

(Unaudited)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations		Consolidated
Sources (uses) of cash and cash equivalents
Net cash provided by (used in) operating activities	$	(3,747	)	$	(29,147	)	$	1,288		$	—	$	(31,606	)
Investing activities:
Capital expenditures				(9,474		)	(8,863		)	—		(18,337		)
Change in restricted cash				2,874						—		2,874
Net cash used in investing activities	—			(6,600		)	(8,863		)	—		(15,463		)
Financing activities:
Proceeds from revolving line credit	—			9,000			12,000			—		21,000
Deferred acquisition payments	(10,452		)	(1,000		)				—		(11,452		)
Payments of long-term debt	(1,404		)	(18		)				—		(1,422		)
Proceeds from exercise of stock options	57									—		57
Net cash provided by (used in) financing activities	(11,799		)	7,982			12,000			—		8,183
Net increase (decrease) in cash and cash equivalents	(15,546		)	(27,765		)	4,425			—		(38,886		)
Effect of foreign currency fluctuations on cash	—			(475		)	1,083			—		608
Cash and cash equivalents at beginning of fiscal period	17,202			52,056			26,720			—		95,978
Cash and cash equivalents at end of fiscal period	$	1,656		$	23,816		$	32,228		$	—	$	57,700