8-K

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): January 29, 2015

KEMET Corporation

(Exact name of registrant as specified in its charter)

Delaware	001-15491	57-0923789
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2835 KEMET Way, Simpsonville, SC	29681
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (864) 963-6300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On January 29, 2015, KEMET Corporation (the “Company”) issued a News Release announcing the preliminary consolidated results for the third fiscal quarter ended December 31, 2014.

A copy of this News Release is furnished as Exhibit 99.1 to this Form 8-K.

Item 7.01 Regulation FD Disclosure

On January 29, 2015, the Company will host a conference call to discuss financial results for its third fiscal quarter ended December 31, 2014.  The slide package prepared for use by executive management for this presentation is attached hereto as Exhibit 99.2.  All of the information in the presentation is presented as of January 29, 2015, and the Company does not assume any obligation to update such information in the future.

The information included in this Form 8-K, as well as the exhibits referenced herein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(a) Not Applicable

(b) Not Applicable

(c) Not Applicable

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	News Release, dated January 29, 2015 issued by the Company.
99.2	Slide Package prepared for use in connection with the Company’s third fiscal quarter earnings conference call to be held on January 29, 2015.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 29, 2015	KEMET Corporation
By:	/s/ WILLIAM M. LOWE, JR.
	William M. Lowe, Jr.
	Executive Vice President and
	Chief Financial Officer

EX-99.1

Exhibit 99.1

NewsRelease

FOR IMMEDIATE RELEASE

Contact:	William M. Lowe, Jr.	Richard J. Vatinelle
	Executive Vice President and	Vice President and
	Chief Financial Officer	Treasurer
	williamlowe@kemet.com	richardvatinelle@kemet.com
	864-963-6484	954-766-2838

KEMET REPORTS PRELIMINARY FISCAL 2015 THIRD QUARTER RESULTS

Greenville, South Carolina (January 29, 2015) - KEMET Corporation (the “Company”) (NYSE: KEM), a leading global supplier of electronic components, today reported preliminary results for our third quarter ended December 31, 2014.

Net sales of $201.3 million for the quarter ended December 31, 2014decreased2.9% compared to net sales of $207.3 million for the quarter ended December 31, 2013. The U.S. GAAP net income from continuing operations was $3.1 million, or $0.06 per diluted share for the quarter ended December 31, 2014, compared to a net loss from continuing operations of $4.7 million or $0.11 loss per diluted share for the quarter ended December 31, 2013.

Non-U.S. GAAP Adjusted net income improved to $6.5 million or $0.13 per diluted share for the quarter ended December 31, 2014, compared to a non-U.S. GAAP Adjusted net income of $0.9 million or $0.02 income per basic and diluted share for the period ended December 31, 2013.

“We believe that this quarter was exceptional in many respects. Despite currency headwinds and inventory adjustments by our distribution partners we delivered increased overall operating margins that enabled us to post solid bottom line financial performance for the quarter,” stated Per Loof, KEMET’s Chief Executive Officer. “We will remain focused on continuing to improve parts of the business that have not yet met our performance standards while at the same time preserving our improvements in supply chain integration and cost improvements to continue to deliver increased shareholder value,” continued Loof.

The net income (loss) for the quarters ended December 31, 2014 and 2013 include various items affecting comparability as denoted in the U.S. GAAP to Non-U.S. GAAP reconciliation table included hereafter. Prior period financial results included in this earnings release have been adjusted to reflect discontinued operations as the Film and Electrolytic business group completed the sale of its machinery division on April 30, 2014.

About KEMET

The Company’s common stock is listed on the NYSE under the ticker symbol “KEM” (NYSE: KEM).  At the Investor Relations section of our web site at http://www.kemet.com/IR, users may subscribe to KEMET news releases and find additional information about our Company.  KEMET applies world class service and quality to deliver industry leading, high performance capacitance solutions to its customers around the world and offers the world’s most complete line of surface mount and through hole capacitor technologies across tantalum, ceramic, film, aluminum, electrolytic, and paper dielectrics. Additional information about KEMET can be found at http://www.kemet.com.

QUIET PERIOD

Beginning April 1, 2015, we will observe a quiet period during which the information provided in this news release and quarterly report on Form 10-Q will no longer constitute our current expectations. During the quiet period, this information should be considered to be historical, applying prior to the quiet period only and not subject to update by management. The quiet period will extend until the day when our next quarterly earnings release is published.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about the Company’s financial condition and results of operations that are based on management’s current expectations, estimates and projections about the markets, in which the Company operates, as well as management’s beliefs and assumptions. Words such as “expects,” “anticipates,” “believes,” “estimates,” variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s judgment only as of the date hereof. The Company undertakes no obligation to update publicly any of these forward-looking statements to reflect new information, future events or otherwise.

Factors that may cause actual outcome and results to differ materially from those expressed in, or implied by, these forward-looking statements include, but are not necessarily limited to the following: (i) adverse economic conditions could impact our ability to realize operating plans if the demand for our products declines, and such conditions could adversely affect our liquidity and ability to continue to operate; (ii) continued net losses could impact our ability to realize current operating plans and could materially adversely affect our liquidity and our ability to continue to operate; (iii) adverse economic conditions could cause the write down of long-lived assets or goodwill; (iv) an increase in the cost or a decrease in the availability of our principal or single-sourced purchased materials; (v) changes in the competitive environment; (vi) uncertainty of the timing of customer product qualifications in heavily regulated industries; (vii) economic, political, or regulatory changes in the countries in which we operate; (viii) difficulties, delays or unexpected costs in completing restructuring plans; (ix) equity method investment in NEC TOKIN exposes us to a variety of risks; (x) acquisitions and other strategic transactions expose us to a variety of risks; (xi) inability to attract, train and retain effective employees and management; (xii) inability to develop innovative products to maintain customer relationships and offset potential price erosion in older products; (xiii) exposure to claims alleging product defects; (xiv) the impact of laws and regulations that apply to our business, including those relating to environmental matters; (xv) the impact of international laws relating to trade, export controls and foreign corrupt practices; (xvi) volatility of financial and credit markets affecting our access to capital; (xvii) the need to reduce the total costs of our products to remain competitive; (xviii) potential limitation on the use of net operating losses to offset possible future taxable income; (xix) restrictions in our debt agreements that limit our flexibility in operating our business; and (xx) additional exercise of the warrant by K Equity which could potentially result in the existence of a significant stockholder who could seek to influence our corporate decisions.

2

KEMET CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(Amounts in thousands, except per share data)

(Unaudited)

	Quarters Ended December 31,
	2014			2013
Net sales	$	201,310		$	207,339
Operating costs and expenses:
Cost of sales	156,842			169,677
Selling, general and administrative expenses	23,374			22,431
Research and development	6,303			6,027
Restructuring charges	6,063			2,194
Write down of long-lived assets	—			3,358
Net (gain) loss on sales and disposals of assets	(574		)	29
Total operating costs and expenses	192,008			203,716
Operating income (loss)	9,302			3,623
Non-operating (income) expense:
Interest income	(5		)	(7		)
Interest expense	9,938			10,349
Other (income) expense, net	(3,701		)	(1,351		)
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	3,070			(5,368		)
Income tax expense	1,359			1,033
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	1,711			(6,401		)
Equity income (loss) from NEC TOKIN	1,367			1,657
Income (loss) from continuing operations	3,078			(4,744		)
Income (loss) from discontinued operations, net of income tax expense (benefit) of $36 and $67, respectively	(164		)	(1,076		)
Net income (loss)	$	2,914		$	(5,820	)
Net income (loss) per basic share:
Net income (loss) from continuing operations	$	0.07		$	(0.11	)
Net income (loss) from discontinued operations	$	—		$	(0.02	)
Net income (loss)	$	0.07		$	(0.13	)
Net income (loss) per diluted share:
Net income (loss) from continuing operations	$	0.06		$	(0.11	)
Net income (loss) from discontinued operations	$	—		$	(0.02	)
Net income (loss)	$	0.06		$	(0.13	)
Weighted-average shares outstanding:
Basic	45,407			45,120
Diluted	52,228			45,120

3

KEMET CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Amounts in thousands, except per share data)

(Unaudited)

	December 31, 2014			March 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	55,582		$	57,929
Accounts receivable, net	92,485			98,947
Inventories, net	187,614			187,974
Prepaid expenses and other	38,836			36,871
Deferred income taxes	6,695			6,695
Current assets of discontinued operations	—			12,160
Total current assets	381,212			400,576
Property, plant and equipment, net of accumulated depreciation of $816,317 and $805,687 as of December 31, 2014 and March 31, 2014, respectively	264,968			292,648
Goodwill	35,584			35,584
Intangible assets, net	34,595			37,184
Investment in NEC TOKIN	52,168			46,419
Restricted cash	2,003			13,512
Deferred income taxes	6,691			6,778
Other assets	22,523			10,130
Noncurrent assets of discontinued operations	—			836
Total assets	$	799,744		$	843,667
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	12,521		$	7,297
Accounts payable	62,132			74,818
Accrued expenses	58,611			76,468
Income taxes payable and deferred income taxes	396			980
Current liabilities of discontinued operations	—			7,269
Total current liabilities	133,660			166,832
Long-term debt, less current portion	392,082			391,292
Other non-current obligations	49,963			55,864
Deferred income taxes	8,131			5,203
Noncurrent liabilities of discontinued operations	—			2,592
Stockholders’ equity:
Preferred stock, par value $0.01, authorized 10,000 shares, none issued	—			—
Common stock, par value $0.01, authorized 175,000 shares, issued 46,508 shares at December 31, 2014 and March 31, 2014	465			465
Additional paid-in capital	462,586			465,027
Retained deficit	(226,034		)	(231,738		)
Accumulated other comprehensive income	3,857			18,184
Treasury stock, at cost (1,080 and 1,301 shares at December 31, 2014 and March 31, 2014, respectively)	(24,966		)	(30,054		)
Total stockholders’ equity	215,908			221,884
Total liabilities and stockholders’ equity	$	799,744		$	843,667

4

KEMET CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

	Nine Month Periods Ended December 31,
	2014			2013
Net income (loss)	$	5,704		$	(54,056	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Gain on sale of discontinued operations	(5,644		)	—
Net cash provided by (used in) operating activities of discontinued operations	(679		)	461
Depreciation and amortization	30,694			37,352
Equity (income) loss from NEC TOKIN	76			2,963
Amortization of debt and financing costs	1,706			2,817
(Gain) loss on early extinguishment of debt	(1,003		)	—
Stock-based compensation expense	3,185			2,330
Long-term receivable write down	27			1,484
Change in value of NEC TOKIN options	(13,200		)	(1,334		)
Net (gain) loss on sales and disposals of assets	(759		)	71
Pension and other post-retirement benefits	87			24
Write down of long-lived assets	—			3,358
Change in deferred income taxes	1,276			(2,496		)
Change in operating assets	(208		)	8,579
Change in operating liabilities	(24,732		)	(28,296		)
Other	200			431
Net cash provided by (used in) operating activities	(3,270		)	(26,312		)
Investing activities:
Capital expenditures	(17,474		)	(24,993		)
Proceeds from sale of assets	4,540			—
Change in restricted cash	11,509			3,532
Proceeds from sale of discontinued operations	9,564			—
Net cash provided by (used in) investing activities	8,139			(21,461		)
Financing activities:
Proceeds from revolving line of credit	42,340			21,000
Payments on revolving line of credit	(14,342		)	—
Deferred acquisition payments	(11,899		)	(11,703		)
Payments on long-term debt	(21,733		)	(2,858		)
Proceeds from exercise of stock options	24			86
Net cash provided by (used in) financing activities	(5,610		)	6,525
Net increase (decrease) in cash and cash equivalents	(741		)	(41,248		)
Effect of foreign currency fluctuations on cash	(1,606		)	864
Cash and cash equivalents at beginning of fiscal period	57,929			95,978
Cash and cash equivalents at end of fiscal period	$	55,582		$	55,594

5

Non-U.S. GAAP Financial Measures

In this news release, the Company makes reference to certain Non-U.S. GAAP financial measures, including "Adjusted gross margin", “Adjusted net income (loss)”, “Adjusted net income (loss) per share” and “Adjusted EBITDA”.  Management believes that investors may find it useful to review the Company’s financial results as adjusted to exclude items as determined by management.

Adjusted gross margin

Adjusted gross margin represents net sales less cost of sales excluding adjustments which are outlined in the quantitative reconciliation provided below.  Management uses Adjusted gross margin to facilitate our analysis and understanding of our business operations and believes that Adjusted gross margin is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company.  Adjusted gross margin should not be considered as an alternative to gross margin or any other performance measure derived in accordance with U.S. GAAP.

The following table provides reconciliation from U.S. GAAP Gross margin to Non-U.S. GAAP Adjusted gross margin (amounts in thousands):

	Quarters Ended
	(Unaudited)
	December 31, 2014			September 30, 2014			December 31, 2013
Net sales	$	201,310		$	215,293		$	207,339
Cost of sales	156,842			169,538			169,677
Gross margin	44,468			45,755			37,662
Non-U.S. GAAP-adjustments:
Plant start-up costs	1,144			1,114			485
Stock-based compensation expense	424			341			278
Inventory revaluation	(927		)	(821		)	—
Adjusted gross margin	$	45,109		$	46,389		$	38,425
Adjusted gross margin as a % of net sales	22.4		%	21.5		%	18.5		%

Adjusted Operating Income (Loss)

Adjusted operating income (loss) represents operating income (loss), excluding adjustments which are outlined in the quantitative reconciliation provided above. We use Adjusted operating income (loss) to facilitate our analysis and understanding of our business operations and believe that Adjusted operating income (loss) is useful to investors because it provides a supplemental way to understand our underlying operating performance. Adjusted operating loss should not be considered as an alternative to operating income (loss) or any other performance measure derived in accordance with U.S. GAAP.

6

Adjusted operating income (loss) is calculated as follows (amounts in thousands):

	Quarters Ended
	(Unaudited)
	December 31, 2014			September 30, 2014			December 31, 2013
Operating income (loss)	$	9,302		$	12,770		$	3,623
Adjustments:
Restructuring charges	6,063			1,687			2,194
Inventory revaluation	(927		)	(821		)	—
Net (gain) loss on sales and disposals of assets	(574		)	(550		)	29
Stock-based compensation expense	1,232			958			702
ERP integration costs	671			409			994
Plant start-up costs	1,144			1,114			485
Write down of long-lived assets	—			—			3,358
NEC TOKIN investment-related expenses	485			487			249
Adjusted operating income (loss)	$	17,396		$	16,054		$	11,634

Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share

“Adjusted net income (loss)” and “Adjusted net income (loss) per basic and diluted share” represent net income (loss) and net income (loss) per basic and diluted share excluding adjustments which are outlined in the quantitative reconciliation provided below.  Management believes that these Non-U.S. GAAP financial measures are useful to investors because they provide a supplemental way to understand the underlying operating performance of the Company.  Management uses these Non-U.S. GAAP financial measures to evaluate operating performance.  Non-U.S. GAAP financial measures should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with U.S. GAAP.

7

The following table provides reconciliation from U.S. GAAP net income (loss) to Non-U.S. GAAP adjusted net income (loss):

U.S.GAAP to Non-U.S.GAAP Reconciliation

	Quarters Ended
	December 31, 2014			September 30, 2014			December 31, 2013
	(Unaudited)
U.S. GAAP
Net sales	$	201,310		$	215,293		$	207,339
Net income (loss) from continuing operations	3,078			7,730			(4,744		)
Income (loss) from discontinued operations	(164		)	(1,400		)	(1,076		)
Net income (loss)	$	2,914		$	6,330		$	(5,820	)
Net income (loss) from continuing operations - basic	0.07			0.17			(0.11		)
Income (loss) from discontinued operations - basic	—			(0.03		)	(0.02		)
Net income (loss) - basic	0.07			0.14			(0.13		)
Net income (loss) from continuing operations - diluted	0.06			0.15			(0.11		)
Income (loss) from discontinued operations - diluted	—			(0.03		)	(0.02		)
Net income (loss) - diluted	0.06			0.12			(0.13		)
Non-U.S. GAAP
Net income (loss)	$	2,914		$	6,330		$	(5,820	)
Adjustments:
Restructuring charges	6,063			1,687			2,194
Equity (income) loss from NEC TOKIN	(1,367		)	(232		)	(1,657		)
Inventory revaluation	(927		)	(821		)	—
Net (gain) loss on sales and disposals of assets	(574		)	(550		)	29
Stock-based compensation expense	1,232			958			702
(Gain) loss on early extinguishment of debt	(1,003		)	—			—
Professional fees related to financing activities	1,142			—			—
ERP integration costs	671			409			994
Change in value of NEC TOKIN options	(2,500		)	(6,600		)	(1,716		)
Plant start-up costs	1,144			1,114			485
Write down of long-lived assets	—			—			3,358
Net foreign exchange (gain) loss	(1,257		)	(1,351		)	207
NEC TOKIN investment-related expenses	485			487			249
(Income) loss from discontinued operations	164			1,400			1,076
Amortization included in interest expense	322			583			858
Income tax effect of non-GAAP adjustments (1)	37			51			(52		)
Adjusted net income (loss)	$	6,546		$	3,465		$	907
Adjusted net income (loss) per basic share	$	0.14		$	0.08		$	0.02
Adjusted net income (loss) per diluted share	$	0.13		$	0.07		$	0.02
Weighted average shares outstanding:
Basic	45,407			45,400			45,120
Diluted	52,227			52,521			52,494

(1)         The income tax effect of the excluded items is calculated by applying the applicable jurisdictional income tax rate, considering the deferred tax valuation for each applicable jurisdiction.

8

Adjusted EBITDA

Adjusted EBITDA from continuing operations represents net income (loss) from continuing operations before net interest expense, income tax expense (benefit), and depreciation and amortization expense, adjusted to exclude certain items which are outlined in the quantitative reconciliation provided below.  We use Adjusted EBITDA from continuing operations to monitor and evaluate our operating performance and to facilitate internal and external comparisons of the historical operating performance of our business.  We present Adjusted EBITDA from continuing operations as a supplemental measure of our performance and ability to service debt.  We also present Adjusted EBITDA from continuing operations because we believe such measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

We believe Adjusted EBITDA from continuing operations is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. The other adjustments to arrive at Adjusted EBITDA from continuing operations are excluded in order to better reflect our continuing operations.

In evaluating Adjusted EBITDA from continuing operations, you should be aware that in the future we may incur expenses similar to the adjustments noted below.  Our presentation of Adjusted EBITDA from continuing operations should not be construed as an inference that our future results will be unaffected by these types of adjustments.  Adjusted EBITDA from continuing operations is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.

Our Adjusted EBITDA from continuing operations measure has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.  Some of these limitations are:

• it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;

• it does not reflect changes in, or cash requirements for, our working capital needs;

• it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and our Adjusted EBITDA from continuing operations measure does not reflect any cash requirements for such replacements;

• it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;

• it does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;

• it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and

• other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA from continuing operations should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations.  You should compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA from continuing operations as supplementary information.

9

The following table provides a reconciliation from U.S. GAAP net income (loss) to Adjusted EBITDA from continuing operations (amounts in thousands):

	For the Quarters Ended
(Amounts in thousands)	December 31, 2014			September 30, 2014			December 31, 2013
U.S. GAAP
Net income (loss)	$	2,914		$	6,330		$	(5,820	)
Interest expense, net	9,933			10,284			10,342
Income tax expense (benefit)	1,359			2,583			1,033
Depreciation and amortization	9,720			10,177			11,762
EBITDA	23,926			29,374			17,317
Excluding the following items (non-GAAP):
Restructuring charges	6,063			1,687			2,194
Equity (income) loss from NEC TOKIN	(1,367		)	(232		)	(1,657		)
Inventory revaluation	(927		)	(821		)	—
Net (gain) loss on sales and disposals of assets	(574		)	(550		)	29
Stock-based compensation expense	1,232			958			702
(Gain) loss on early extinguishment of debt	(1,003		)	—			—
Professional fees related to financing activities	1,142			—			—
ERP integration costs	671			409			994
Change in value of NEC TOKIN options	(2,500		)	(6,600		)	(1,716		)
Plant start-up costs	1,144			1,114			485
Write down of long-lived assets	—			—			3,358
Net foreign exchange (gain) loss	(1,257		)	(1,351		)	207
NEC TOKIN investment-related expenses	485			487			249
(Income) loss from discontinued operations	164			1,400			1,076
Adjusted EBITDA	$	27,199		$	25,875		$	23,238

10

EX-99.2

Earnings Conference Call January 29, 2015 Quarter Ended December 31, 2014

Cautionary Statement Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about KEMET Corporation's (the "Company") financial condition and results of operations that are based on management's current expectations, estimates and projections about the markets in which the Company operates, as well as management's beliefs and assumptions. Words such as "expects," "anticipates," "believes," "estimates," variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof. The Company undertakes no obligation to update publicly any of these forward-looking statements to reflect new information, future events or otherwise. Factors that may cause actual outcome and results to differ materially from those expressed in, or implied by, these forward- looking statements include, but are not necessarily limited to the following: (i) adverse economic conditions could impact our ability to realize operating plans if the demand for our products declines, and such conditions could adversely affect our liquidity and ability to continue to operate; (ii) continued net losses could impact our ability to realize current operating plans and could materially adversely affect our liquidity and our ability to continue to operate; (iii) adverse economic conditions could cause the write down of long-lived assets or goodwill; (iv) an increase in the cost or a decrease in the availability of our principal or single-sourced purchased materials; (v) changes in the competitive environment; (vi) uncertainty of the timing of customer product qualifications in heavily regulated industries; (vii) economic, political, or regulatory changes in the countries in which we operate; (viii) difficulties, delays or unexpected costs in completing restructuring plans; (ix) equity method investment in NEC TOKIN exposes us to a variety of risks; (x) acquisitions and other strategic transactions expose us to a variety of risks; (xi) inability to attract, train and retain effective employees and management; (xii) inability to develop innovative products to maintain customer relationships and offset potential price erosion in older products; (xiii) exposure to claims alleging product defects; (xiv) the impact of laws and regulations that apply to our business, including those relating to environmental matters; (xv) the impact of international laws relating to trade, export controls and foreign corrupt practices; (xvi) volatility of financial and credit markets affecting our access to capital; (xvii) the need to reduce the total costs of our products to remain competitive; (xviii) potential limitation on the use of net operating losses to offset possible future taxable income; (xix) restrictions in our debt agreements that limit our flexibility in operating our business; and (xx) additional exercise of the warrant by K Equity which could potentially result in the existence of a significant stockholder who could seek to influence our corporate decisions. 2

Income Statement Highlights U.S. GAAP 3 For the Quarters Ended (Amounts in thousands, except percentages and per share data) Dec 2014 Sep 2014 Dec 2013 Net sales $ 201,310 $ 215,293 $ 207,339 Gross margin $ 44,468 $ 45,755 $ 37,662 Gross margin as a percentage of net sales 22.1 % 21.3 % 18.2 % Selling, general and administrative $ 23,374 $ 25,510 $ 22,431 SG&A as a percentage of net sales 11.6 % 11.8 % 10.8 % Operating income (loss) $ 9,302 $ 12,770 $ 3,623 Net income (loss) from continuing operations $ 3,078 $ 7,730 $ (4,744 ) Net income (Ioss) from discontinued operations (164 ) (1,400 ) (1,076 ) Net income (loss) $ 2,914 $ 6,330 $ (5,820 ) Per share data: Net income (loss) from continuing operations - basic $ 0.07 $ 0.17 $ (0.11 ) Net income (loss) from discontinued operations - basic — (0.03 ) (0.02 ) Net income (loss) - basic 0.07 0.14 (0.13 ) Net income (loss) from continuing operations - diluted 0.06 0.15 (0.11 ) Net income (loss) from discontinued operations - diluted — (0.03 ) (0.02 ) Net income (loss) - diluted 0.06 0.12 (0.13 ) Weighted avg. shares - basic 45,407 45,400 45,120 Weighted avg. shares - diluted 52,228 52,521 45,120

Income Statement Highlights Non-GAAP 4 For the Quarters Ended (Amounts in thousands, except percentages and per share data) Dec 2014 Sep 2014 Dec 2013 Net sales $ 201,310 $ 215,293 $ 207,339 Adjusted gross margin $ 45,109 $ 46,389 $ 38,425 Gross margin as a percentage of net sales 22.4 % 21.5 % 18.5 % Adjusted selling, general and administrative $ 21,510 $ 24,119 $ 20,795 SG&A as a percentage of net sales 10.7 % 11.2 % 10.0 % Adjusted operating income (loss) $ 17,396 $ 16,054 $ 11,634 Adjusted net income (loss) from continuing operations $ 6,546 $ 3,465 $ 907 Adjusted EBITDA $ 27,199 $ 25,875 $ 23,238 Per share data: Adjusted net income (loss) from continuing operations - basic $ 0.14 $ 0.08 $ 0.02 Adjusted net income (loss) from continuing operations - diluted $ 0.13 $ 0.07 $ 0.02 Weighted avg. shares - basic 45,407 45,400 45,120 Weighted avg. shares - diluted 52,227 52,521 52,494

Adjusted Gross Margin & Operating Income (Loss)-Non-GAAP Solid Capacitors 5 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Net sales $ 152,785 $ 163,019 $ 156,082 Adjusted gross margin 43,831 44,125 35,393 Adjusted gross margin percentage 28.7 % 27.1 % 22.7 % Adjusted operating income (loss) $ 39,044 $ 39,224 $ 30,631

Adjusted Gross Margin & Operating Income (Loss) -Non-GAAP Film & Electrolytics 6 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Net sales $ 48,525 $ 52,274 $ 51,256 Adjusted gross margin 1,278 2,264 3,032 Adjusted gross margin percentage 2.6 % 4.3 % 5.9 % Adjusted operating income (loss) $ (1,012 ) $ 1 $ 1,026

Financial Highlights (1) Excludes resricted cash as of December 31, 2014 and September 30, 2014 of $2.0 million and $13.0, respectively. (2) Calculated as accounts receivable, net, plus inventories, net, less accounts payable (3) Calculated by annualizing the current quarter’s Net sales and Cost of sales 7 (Amounts in millions, except DSO and DPO) Dec 2014 Sep 2014 FX Impact Cash, cash equivalents (1) $ 55.6 $ 51.6 $ 0.4 Capital expenditures $ 5.5 $ 6.8 Short-term debt $ 12.5 $ 25.8 Long-term debt 389.4 373.6 Debt premium 2.6 2.7 Total debt $ 404.5 $ 402.1 $ — Equity $ 215.9 $ 214.8 $ 3.9 Net working capital (2) $ 218.0 $ 211.8 $ (0.9 ) Days in receivables (DSO)(3) 42 41 Days in payables (DPO)(3) 36 39

Sales Summary - Q3 FY2015 8

Appendix

Adjusted Gross Margin Non-GAAP 10 For the Quarters Ended (Amounts in thousands, except percentages) Dec 2014 Sep 2014 Dec 2013 Net Sales $ 201,310 $ 215,293 $ 207,339 Gross Margin $ 44,468 $ 45,755 $ 37,662 Adjustments: Plant start-up costs 1,144 1,114 485 Stock-based compensation expense 424 341 278 Inventory revaluation (927 ) (821 ) — Adjusted Gross margin $ 45,109 $ 46,389 $ 38,425 Adjusted gross margin as a percentage of net sales 22.4 % 21.5 % 18.5 %

Adjusted Selling, General & Administrative Expenses Non-GAAP 11 For the Quarters Ended (Amounts in thousands, except percentages) Dec 2014 Sep 2014 Dec 2013 Net sales $ 201,310 $ 215,293 $ 207,339 Selling, general and administrative expenses $ 23,374 $ 25,510 $ 22,431 Less adjustments: ERP integration costs 671 409 994 NEC TOKIN investment-related expenses 485 487 249 Stock-based compensation expense 708 495 393 Adjusted selling, general and administrative expenses $ 21,510 $ 24,119 $ 20,795 Adjusted selling, general, and administrative as a percentage of net sales 10.7 % 11.2 % 10.0 %

Adjusted Operating Income (Loss) Non-GAAP 12 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Operating income (loss) $ 9,302 $ 12,770 $ 3,623 Adjustments: Restructuring charges 6,063 1,687 2,194 Write down of long-lived assets — — 3,358 Stock-based compensation expense 1,232 958 702 ERP integration costs 671 409 994 Plant start-up costs 1,144 1,114 485 NEC TOKIN investment-related expenses 485 487 249 Net (gain) loss on sales and disposals of assets (574 ) (550 ) 29 Inventory revaluation (927 ) (821 ) — Adjusted operating income (loss) $ 17,396 $ 16,054 $ 11,634

Adjusted Net Income (Loss) From Continuing Operations and Adjusted EBITDA Non-GAAP For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Net income (loss) $ 2,914 $ 6,330 $ (5,820 ) Adjustments: Restructuring charges 6,063 1,687 2,194 Equity (income) loss from NEC TOKIN (1,367 ) (232 ) (1,657 ) Inventory revaluation (927 ) (821 ) — Net (gain) loss on sales and disposals of assets (574 ) (550 ) 29 Write down of long-lived assets — — 3,358 Stock-based compensation expense 1,232 958 702 (Gain) loss on early extinguishment of debt (1,003 ) — — Professional fees related to financing activities 1,142 — — ERP integration costs 671 409 994 Change in value of NEC TOKIN options (2,500 ) (6,600 ) (1,716 ) Plant start-up costs 1,144 1,114 485 Net foreign exchange (gain) loss (1,257 ) (1,351 ) 207 NEC TOKIN investment-related expenses 485 487 249 (Income) loss from discontinued operations 164 1,400 1,076 Amortization included in interest expense 322 583 858 Income tax effect of non-GAAP adjustments (1) 37 51 (52 ) Adjusted net income (loss) $ 6,546 $ 3,465 $ 907 Adjusted net income (loss) per share from continuing operations - basic $ 0.14 $ 0.08 $ 0.02 Adjusted net income (loss) per share from continuing operations - diluted $ 0.13 $ 0.07 $ 0.02 Adjusted EBITDA $ 27,199 $ 25,875 $ 23,238 Weighted avg. shares - basic 45,407 45,400 45,120 Weighted avg. shares - diluted 52,227 52,521 52,494 13 (1) The income tax effect of the excluded items is calculated by applying the applicable jurisdictional income tax rate, considering the deferred tax valuation for each applicable jurisdiction.

Adjusted EBITDA Reconciliation Non-GAAP 14 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 U.S. GAAP Net income (loss) $ 2,914 $ 6,330 $ (5,820 ) Interest expense, net 9,933 10,284 10,342 Income tax expense 1,359 2,583 1,033 Depreciation and amortization 9,720 10,177 11,762 EBITDA 23,926 29,374 17,317 Excluding the following items (non-GAAP): Restructuring charges 6,063 1,687 2,194 Equity (income) loss from NEC TOKIN (1,367 ) (232 ) (1,657 ) Inventory revaluation (927 ) (821 ) — Net (gain) loss on sales and disposals of assets (574 ) (550 ) 29 Write down of long-lived assets — — 3,358 Stock-based compensation expense 1,232 958 702 (Gain) loss on early extinguishment of debt (1,003 ) — — Professional fees related to financing activities 1,142 — — ERP integration costs 671 409 994 Change in value of NEC TOKIN options (2,500 ) (6,600 ) (1,716 ) Plant start-up costs 1,144 1,114 485 Net foreign exchange (gain) loss (1,257 ) (1,351 ) 207 NEC TOKIN investment-related expenses 485 487 249 (Income) loss from discontinued operations 164 1,400 1,076 Adjusted EBITDA $ 27,199 $ 25,875 $ 23,238

Adjusted Gross Margin-Non-GAAP Solid Capacitors 15 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Net sales $ 152,785 $ 163,019 $ 156,082 Gross margin 43,385 43,460 35,275 Gross margin percentage 28.4 % 26.7 % 22.6 % Adjustments: Inventory revaluation (238 ) (238 ) — Stock-based compensation expense 221 190 118 Plant start-up costs 463 713 — Adjusted gross margin $ 43,831 $ 44,125 $ 35,393 Adjusted gross margin percentage 28.7 % 27.1 % 22.7 %

Adjusted Gross Margin-Non-GAAP Film & Electrolytics 16 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Net sales $ 48,525 $ 52,274 $ 51,256 Gross margin 1,082 2,295 2,387 Gross margin percentage 2.2 % 4.4 % 4.7 % Adjustments: Inventory revaluation (689 ) (583 ) — Stock-based compensation expense 204 151 160 Plant start-up costs 681 401 485 Adjusted gross margin $ 1,278 $ 2,264 $ 3,032 Adjusted gross margin percentage 2.6 % 4.3 % 5.9 %

Adjusted Operating Income (Loss)-Non-GAAP Solid Capacitors 17 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Net sales $ 152,785 $ 163,019 $ 156,082 Operating income (loss) 38,103 38,386 27,616 Adjustments: Inventory revaluation (238 ) (238 ) — Restructuring charges 496 169 91 Write down of long-lived assets — — 2,802 Stock-based compensation expense 221 190 118 Plant start-up costs 463 713 — ERP integration expenses — — 12 NEC TOKIN investment-related expenses 6 — — (Gain) loss on sales and disposals of assets (7 ) 4 (8 ) Adjusted operating income (loss) $ 39,044 $ 39,224 $ 30,631

Adjusted Operating Income (Loss)-Non-GAAP Film & Electrolytics 18 For the Quarters Ended (Amounts in thousands) Dec 2014 Sep 2014 Dec 2013 Net sales $ 48,525 $ 52,274 $ 51,256 Operating income (loss) (5,137 ) (917 ) (2,374 ) Adjustments: Inventory revaluation (689 ) (583 ) — Restructuring charges 4,496 1,500 2,100 Write down of long-lived assets — — 556 Stock-based compensation expense 204 151 160 Plant start-up costs 681 401 485 ERP integration expenses — — 80 (Gain) loss on sales and disposals of assets (567 ) (551 ) 19 Adjusted operating income (loss) $ (1,012 ) $ 1 $ 1,026

Non-GAAP Financial Measures Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors. Adjusted gross margin Adjusted gross margin represents net sales less cost of sales excluding adjustments which are outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted gross margin to facilitate our analysis and understanding of our business operations and believes that Adjusted gross margin is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company. Adjusted gross margin should not be considered as an alternative to gross margin or any other performance measure derived in accordance with GAAP. Adjusted selling, general and administrative expenses Adjusted selling, general and administrative expenses represents selling, general and administrative expenses excluding adjustments which are outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted selling, general and administrative expenses to facilitate our analysis and understanding of our business operations and believes that Adjusted selling, general and administrative expenses is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company. Adjusted selling, general and administrative expenses should not be considered as an alternative to selling, general and administrative expenses or any other performance measure derived in accordance with GAAP. Adjusted operating income (loss) Adjusted operating income (loss) represents operating income (loss), excluding adjustments which are outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted operating income to facilitate our analysis and understanding of our business operations and believes that Adjusted operating income is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company. Adjusted operating income should not be considered as an alternative to operating loss or any other performance measure derived in accordance with GAAP. 19

Non-GAAP Financial Measures Continued Adjusted net income (loss) and Adjusted EPS Adjusted net income (loss) and Adjusted EPS represent net income (loss) and EPS, excluding adjustments which are more specifically outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted net income (loss) and Adjusted EPS to evaluate the Company's operating performance and believes that Adjusted net income (loss) and Adjusted EPS are useful to investors because they provide a supplemental way to possibly better understand the underlying operating performance of the Company. Adjusted net income (loss) and Adjusted EPS should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP. Adjusted EBITDA Adjusted EBITDA represents net loss before income tax expense (benefit), interest expense, net, and depreciation and amortization expense, excluding adjustments which are more specifically outlined in the quantitative reconciliation provided earlier in this presentation. We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We also present Adjusted EBITDA because we believe such measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. The other items excluded from Adjusted EBITDA are excluded in order to better reflect our continuing operations. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these types of adjustments. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. 20

Non-GAAP Financial Measures Continued Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: • it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments; • it does not reflect changes in, or cash requirements for, our working capital needs; • it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and our Adjusted EBITDA measure does not reflect any cash requirements for such replacements; • it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; • it does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; • it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and • other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. 21