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) |
Exhibit No. | Description of Exhibit | ||
99.1 | News Release, dated May 3, 2016 issued by the Company. | ||
99.2 | Slide Package prepared for use in connection with the Company’s fourth fiscal quarter and fiscal year earnings conference call to be held on May 3, 2016. |
Date: May 3, 2015 | KEMET Corporation |
/s/ WILLIAM M. LOWE, JR. | |
William M. Lowe, Jr. | |
Executive Vice President and | |
Chief Financial Officer |
News 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 | 954-766-2800 |
• | Net sales for the quarter up 3.8% to $183.9 million compared to the prior quarter ended December 31, 2015. |
• | Gross margin for fiscal year 2016 of 22.2% compared to 19.4% for the prior fiscal year 2015. |
• | Cash Balance as of March 31, 2016 of $65.0 million up $21.8 million from December 31, 2015 |
• | Board authorizes debt repurchase plan for Fiscal Year 2017 |
Quarters Ended March 31, | Fiscal Year Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net sales | $ | 183,926 | $ | 193,708 | $ | 734,823 | $ | 823,192 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of sales | 141,913 | 157,379 | 571,543 | 663,683 | |||||||||||
Selling, general and administrative expenses | 25,790 | 24,870 | 101,446 | 98,533 | |||||||||||
Research and development | 6,395 | 6,572 | 24,955 | 25,802 | |||||||||||
Restructuring charges | 617 | 3,437 | 4,178 | 13,017 | |||||||||||
Net (gain) loss on sales and disposals of assets | 608 | 538 | 375 | (221 | ) | ||||||||||
Total operating costs and expenses | 175,323 | 192,796 | 702,497 | 800,814 | |||||||||||
Operating income (loss) | 8,603 | 912 | 32,326 | 22,378 | |||||||||||
Other (income) expense: | |||||||||||||||
Interest income | (4 | ) | (4 | ) | (14 | ) | (15 | ) | |||||||
Interest expense | 9,929 | 10,020 | 39,605 | 40,701 | |||||||||||
Change in value of NEC TOKIN options | — | 11,100 | 26,300 | (2,100 | ) | ||||||||||
Other income (expense), net | 147 | (2,453 | ) | (2,348 | ) | (4,082 | ) | ||||||||
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN | (1,469 | ) | (17,751 | ) | (31,217 | ) | (12,126 | ) | |||||||
Income tax expense (benefit) | 2,056 | 3 | 6,006 | 5,227 | |||||||||||
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN | (3,525 | ) | (17,754 | ) | (37,223 | ) | (17,353 | ) | |||||||
Equity income (loss) from NEC TOKIN | (11,648 | ) | (2,093 | ) | (16,406 | ) | (2,169 | ) | |||||||
Income (loss) from continuing operations | (15,173 | ) | (19,847 | ) | (53,629 | ) | (19,522 | ) | |||||||
Income (loss) from discontinued operations | — | — | — | 5,379 | |||||||||||
Net income (loss) | $ | (15,173 | ) | $ | (19,847 | ) | $ | (53,629 | ) | $ | (14,143 | ) | |||
Net income (loss) per basic share: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.33 | ) | $ | (0.44 | ) | $ | (1.17 | ) | $ | (0.43 | ) | |||
Income (loss) from discontinued operations | $ | — | $ | — | $ | — | $ | 0.12 | |||||||
Net income (loss) | $ | (0.33 | ) | $ | (0.44 | ) | $ | (1.17 | ) | $ | (0.31 | ) | |||
Net income (loss) per diluted share: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.33 | ) | $ | (0.44 | ) | $ | (1.17 | ) | $ | (0.43 | ) | |||
Income (loss) from discontinued operations | $ | — | $ | — | $ | — | $ | 0.12 | |||||||
Net income (loss) | $ | (0.33 | ) | $ | (0.44 | ) | $ | (1.17 | ) | $ | (0.31 | ) | |||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 46,160 | 45,443 | 46,004 | 45,381 | |||||||||||
Diluted | 46,160 | 45,443 | 46,004 | 45,381 |
March 31, 2016 | March 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 65,004 | $ | 56,362 | |||
Accounts receivable, net | 93,168 | 90,857 | |||||
Inventories, net | 168,879 | 171,843 | |||||
Prepaid expenses and other | 25,496 | 41,503 | |||||
Total current assets | 352,547 | 360,565 | |||||
Property plant and equipment net of accumulated depreciation of $815,338 and $804,286 as of March 31, 2016 and March 31, 2015, respectively | 241,839 | 249,641 | |||||
Goodwill | 40,294 | 35,584 | |||||
Intangible assets, net | 33,301 | 33,282 | |||||
Investment in NEC TOKIN | 20,334 | 45,016 | |||||
Deferred income taxes | 8,397 | 9,774 | |||||
Other assets | 5,832 | 12,831 | |||||
Total assets | $ | 702,544 | $ | 746,693 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | — | $ | 962 | |||
Accounts payable | 70,981 | 69,785 | |||||
Accrued expenses | 50,320 | 60,456 | |||||
Income taxes payable | 453 | 884 | |||||
Total current liabilities | 121,754 | 132,087 | |||||
Long-term debt, less current portion | 390,597 | 390,409 | |||||
Other non-current obligations | 74,892 | 57,131 | |||||
Deferred income taxes | 2,820 | 2,384 | |||||
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 March 31, 2016 and 2015 | 465 | 465 | |||||
Additional paid-in capital | 452,821 | 461,191 | |||||
Retained deficit | (299,510 | ) | (245,881 | ) | |||
Accumulated other comprehensive income | (31,425 | ) | (28,796 | ) | |||
Treasury stock, at cost (611 and 1,056 shares at March 31, 2016 and 2015, respectively) | (9,870 | ) | (22,297 | ) | |||
Total stockholders’ equity | 112,481 | 164,682 | |||||
Total liabilities and stockholders’ equity | $ | 702,544 | $ | 746,693 |
Fiscal Years Ended March 31, | ||||||||
2016 | 2015 | |||||||
Net income (loss) | $ | (53,629 | ) | $ | (14,143 | ) | ||
Adjustments to reconcile net 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 | ) | |||||
Depreciation and amortization | 39,016 | 40,768 | ||||||
Non-cash debt and financing costs | 859 | 2,032 | ||||||
Gain on early extinguishment of debt | — | (1,003 | ) | |||||
Equity income (loss) from NEC TOKIN | 16,406 | 2,169 | ||||||
Change in value of NEC TOKIN options | 26,300 | (2,100 | ) | |||||
Net (gain) loss on sales and disposals of assets | 375 | (221 | ) | |||||
Stock-based compensation expense | 4,774 | 4,512 | ||||||
Pension and other post-retirement benefits | 719 | (13,283 | ) | |||||
Deferred income tax expense (benefit) | 657 | (2,084 | ) | |||||
Write down of receivables | 24 | 52 | ||||||
Other, net | 306 | (7 | ) | |||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (2,346 | ) | 8,220 | |||||
Inventories | 3,338 | 8,559 | ||||||
Prepaid expenses and other current assets | 13,103 | (8,404 | ) | |||||
Accounts payable | (5,982 | ) | (2,879 | ) | ||||
Accrued income taxes | 280 | (383 | ) | |||||
Other operating liabilities | (11,835 | ) | 8,920 | |||||
Net cash provided by (used in) operating activities | 32,365 | 24,402 | ||||||
Investing activities: | ||||||||
Capital expenditures | (20,469 | ) | (22,232 | ) | ||||
Acquisitions, net of cash received | (2,892 | ) | — | |||||
Change in restricted cash | 1,802 | 11,509 | ||||||
Proceeds from sale of discontinued operations | — | 9,564 | ||||||
Proceeds from sale of assets | 971 | 4,788 | ||||||
Net cash provided by (used in) investing activities | (20,588 | ) | 3,629 | |||||
Financing activities: | ||||||||
Proceeds from revolving line of credit | 10,000 | 42,340 | ||||||
Payments of revolving line of credit | (9,600 | ) | (27,342 | ) | ||||
Deferred acquisition payments | (3,000 | ) | (19,527 | ) | ||||
Payments of long-term debt | (481 | ) | (21,733 | ) | ||||
Proceeds from exercise of stock options | — | 24 | ||||||
Purchase of treasury stock | (722 | ) | (630 | ) | ||||
Net cash provided by (used in) financing activities | (3,803 | ) | (26,868 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 7,974 | 1,163 | ||||||
Effect of foreign currency fluctuations on cash | 668 | (2,730 | ) | |||||
Cash and cash equivalents at beginning of fiscal period | 56,362 | 57,929 | ||||||
Cash and cash equivalents at end of fiscal period | $ | 65,004 | $ | 56,362 |
Quarters Ended | Fiscal Years Ended | ||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | March 31, 2016 | March 31, 2015 | |||||||||||||||
(Unaudited) | |||||||||||||||||||
Net sales | $ | 183,926 | $ | 177,184 | $ | 193,708 | $ | 734,823 | $ | 823,192 | |||||||||
Gross Margin | 42,013 | 38,748 | 36,329 | 163,280 | 159,509 | ||||||||||||||
Gross margin as a % of net sales | 22.8 | % | 21.9 | % | 18.8 | % | 22.2 | % | 19.4 | % | |||||||||
Non-U.S. GAAP-adjustments: | |||||||||||||||||||
Plant shut-down costs | 141 | 231 | — | 372 | 889 | ||||||||||||||
Plant start-up costs | 319 | 160 | 651 | 861 | 4,556 | ||||||||||||||
Stock-based compensation expense | 278 | 268 | 465 | 1,418 | 1,576 | ||||||||||||||
Inventory Revaluation | — | — | (928 | ) | — | — | |||||||||||||
Adjusted gross margin | $ | 42,751 | $ | 39,407 | $ | 36,517 | $ | 165,931 | $ | 166,530 | |||||||||
Adjusted gross margin as a % of net sales | 23.2 | % | 22.2 | % | 18.9 | % | 22.6 | % | 20.2 | % |
Quarters Ended | Fiscal Year Ended | |||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | March 31, 2016 | March 31, 2015 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Operating income (loss) | $ | 8,603 | $ | 8,493 | $ | 912 | $ | 32,326 | $ | 22,378 | ||||||||||
Adjustments: | ||||||||||||||||||||
ERP integration costs/IT transition costs | 859 | 167 | 1,273 | 5,677 | 3,248 | |||||||||||||||
Stock-based compensation expense | 1,013 | 1,154 | 1,328 | 4,774 | 4,512 | |||||||||||||||
Restructuring charges | 617 | 1,714 | 3,437 | 4,178 | 13,017 | |||||||||||||||
Legal expenses related to antitrust class actions | 482 | 1,300 | 435 | 3,041 | 844 | |||||||||||||||
NEC TOKIN investment related expenses | 265 | 225 | 226 | 900 | 1,778 | |||||||||||||||
Plant start-up costs | 319 | 160 | 651 | 861 | 4,556 | |||||||||||||||
Net (gain) loss on sales and disposals of assets | 608 | 129 | 538 | 375 | (221 | ) | ||||||||||||||
Plant shut-down costs | 141 | 231 | — | 372 | 889 | |||||||||||||||
Pension plan adjustment | — | — | — | 312 | — | |||||||||||||||
Inventory Revaluation | — | — | (928 | ) | — | — | ||||||||||||||
Adjusted operating income (loss) | $ | 12,907 | $ | 13,573 | $ | 7,872 | $ | 52,816 | $ | 51,001 |
Quarters Ended | Fiscal Year Ended | |||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | March 31, 2016 | March 31, 2015 | ||||||||||||||||
(Unaudited, Amounts in thousands, except per share data) | ||||||||||||||||||||
U.S. GAAP | ||||||||||||||||||||
Net sales | $ | 183,926 | $ | 177,184 | $ | 193,708 | $ | 734,823 | $ | 823,192 | ||||||||||
Net income (loss) from continuing operations | (15,173 | ) | (8,600 | ) | (19,847 | ) | (53,629 | ) | (19,522 | ) | ||||||||||
Income (loss) from discontinued operations | — | — | — | — | 5,379 | |||||||||||||||
Net income (loss) | $ | (15,173 | ) | $ | (8,600 | ) | $ | (19,847 | ) | $ | (53,629 | ) | $ | (14,143 | ) | |||||
Net income (loss) per basic and diluted share: | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | (0.33 | ) | $ | (0.19 | ) | $ | (0.44 | ) | $ | (1.17 | ) | $ | (0.43 | ) | |||||
Net income (loss) from discontinued operations | $ | — | $ | — | $ | — | $ | — | $ | 0.12 | ||||||||||
Net income (loss) | $ | (0.33 | ) | $ | (0.19 | ) | $ | (0.44 | ) | $ | (1.17 | ) | $ | (0.31 | ) | |||||
Non-U.S. GAAP | ||||||||||||||||||||
Net income (loss) | (15,173 | ) | (8,600 | ) | (19,847 | ) | (53,629 | ) | (14,143 | ) | ||||||||||
Adjustments: | ||||||||||||||||||||
Change in value of NEC TOKIN options | — | (700 | ) | 11,100 | 26,300 | (2,100 | ) | |||||||||||||
Equity (gain) loss from NEC TOKIN | 11,648 | 6,505 | 2,093 | 16,406 | 2,169 | |||||||||||||||
Restructuring charges | 617 | 1,714 | 3,437 | 4,178 | 13,017 | |||||||||||||||
ERP integration costs/IT transition costs | 859 | 167 | 1,273 | 5,677 | 3,248 | |||||||||||||||
Stock-based compensation | 1,013 | 1,154 | 1,328 | 4,774 | 4,512 | |||||||||||||||
Legal expenses related to antitrust class actions | 482 | 1,300 | 435 | 3,041 | 844 | |||||||||||||||
Net foreign exchange (gain) loss | 122 | (1,036 | ) | (2,168 | ) | (3,036 | ) | (4,249 | ) | |||||||||||
NEC TOKIN investment related expenses | 265 | 225 | 226 | 900 | 1,778 | |||||||||||||||
Income tax effect of pension curtailment | 155 | 720 | — | 875 | — | |||||||||||||||
Plant start-up costs | 319 | 160 | 651 | 861 | 4,556 | |||||||||||||||
Amortization included in interest expense | 210 | 212 | 244 | 859 | 1,814 | |||||||||||||||
(Gain) loss on sales and disposals of assets | 608 | 129 | 538 | 375 | (221 | ) | ||||||||||||||
Plant shut-down costs | 141 | 231 | — | 372 | 889 | |||||||||||||||
Pension plan adjustment | — | — | — | 312 | — | |||||||||||||||
Income tax effect of non-GAAP adjustments (1) | 546 | (10 | ) | 20 | 652 | 84 | ||||||||||||||
(Income) loss from discontinued operations | — | — | — | — | (5,379 | ) | ||||||||||||||
(Gain) loss on early extinguishment of debt | — | — | — | — | (1,003 | ) | ||||||||||||||
Professional fees related to financing activities | — | — | — | — | 1,142 | |||||||||||||||
Inventory Revaluation | — | — | (928 | ) | — | — | ||||||||||||||
Adjusted net income (loss) | $ | 1,812 | $ | 2,171 | $ | (1,598 | ) | $ | 8,917 | $ | 6,958 | |||||||||
Adjusted net income (loss) per basic share | $ | 0.04 | $ | 0.05 | $ | (0.04 | ) | $ | 0.19 | $ | 0.15 | |||||||||
Adjusted net income (loss) per diluted share | $ | 0.04 | $ | 0.04 | $ | (0.04 | ) | $ | 0.17 | $ | 0.13 | |||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 46,160 | 46,081 | 45,443 | 46,004 | 45,381 | |||||||||||||||
Diluted (2) | 50,056 | 51,865 | 45,443 | 51,436 | 52,588 |
• | 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. |
Fiscal Year 2016 | |||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||
Net income (loss) | $ | (37,050 | ) | $ | 7,194 | $ | (8,600 | ) | $ | (15,173 | ) | $ | (53,629 | ) | |
Adjustments: | |||||||||||||||
Income tax expense (benefit) | (248 | ) | 1,438 | 2,760 | 2,056 | 6,006 | |||||||||
Interest expense, net | 10,010 | 9,808 | 9,848 | 9,925 | 39,591 | ||||||||||
Depreciation and amortization | 9,917 | 9,265 | 9,674 | 10,160 | 39,016 | ||||||||||
Change in value of NEC TOKIN options | 29,200 | (2,200 | ) | (700 | ) | — | 26,300 | ||||||||
Equity (gain) loss from NEC TOKIN | (1,585 | ) | (162 | ) | 6,505 | 11,648 | 16,406 | ||||||||
ERP integration costs/IT transition costs | 4,369 | 282 | 167 | 859 | 5,677 | ||||||||||
Stock-based compensation | 1,279 | 1,328 | 1,154 | 1,013 | 4,774 | ||||||||||
Restructuring charges | 1,824 | 23 | 1,714 | 617 | 4,178 | ||||||||||
Legal expenses related to antitrust class actions | 718 | 541 | 1,300 | 482 | 3,041 | ||||||||||
Net foreign exchange (gain) loss | 1,049 | (3,171 | ) | (1,036 | ) | 122 | (3,036 | ) | |||||||
NEC TOKIN investment-related expenses | 224 | 186 | 225 | 265 | 900 | ||||||||||
Plant start-up costs | 195 | 187 | 160 | 319 | 861 | ||||||||||
(Gain) loss on sales and disposals of assets | (58 | ) | (304 | ) | 129 | 608 | 375 | ||||||||
Plant shut-down costs | — | — | 231 | 141 | 372 | ||||||||||
Pension plan adjustment | 312 | — | — | — | 312 | ||||||||||
Adjusted EBITDA | $ | 20,156 | $ | 24,415 | $ | 23,531 | $ | 23,042 | $ | 91,144 | |||||
Fiscal Year 2015 | |||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||
Net income (loss) | $ | (3,540 | ) | $ | 6,330 | $ | 2,914 | $ | (19,847 | ) | $ | (14,143 | ) | ||
Adjustments: | |||||||||||||||
Income tax expense (benefit) | 1,282 | 2,583 | 1,359 | 3 | 5,227 | ||||||||||
Interest expense, net | 10,453 | 10,284 | 9,933 | 10,016 | 40,686 | ||||||||||
Depreciation and amortization | 10,797 | 10,177 | 9,720 | 10,074 | 40,768 | ||||||||||
Change in value of NEC TOKIN options | (4,100 | ) | (6,600 | ) | (2,500 | ) | 11,100 | (2,100 | ) | ||||||
Equity (gain) loss from NEC TOKIN | 1,675 | (232 | ) | (1,367 | ) | 2,093 | 2,169 | ||||||||
ERP integration costs/IT transition costs | 895 | 409 | 671 | 1,273 | 3,248 | ||||||||||
Stock-based compensation | 994 | 958 | 1,232 | 1,328 | 4,512 | ||||||||||
Restructuring charges | 1,830 | 1,687 | 6,063 | 3,437 | 13,017 | ||||||||||
Legal expenses related to antitrust class actions | — | — | 409 | 435 | 844 | ||||||||||
Net foreign exchange (gain) loss | 527 | (1,351 | ) | (1,257 | ) | (2,168 | ) | (4,249 | ) | ||||||
NEC TOKIN investment-related expenses | 580 | 487 | 485 | 226 | 1,778 | ||||||||||
Plant start-up costs | 1,647 | 1,114 | 1,144 | 651 | 4,556 | ||||||||||
(Gain) loss on sales and disposals of assets | 365 | (550 | ) | (574 | ) | 538 | (221 | ) | |||||||
Plant shut-down costs | 889 | — | — | — | 889 | ||||||||||
(Income) loss from discontinued operations | (6,943 | ) | 1,400 | 164 | — | (5,379 | ) | ||||||||
(Gain) loss on early extinguishment of debt | — | — | (1,003 | ) | — | (1,003 | ) | ||||||||
Professional fees related to financing activities | — | — | 1,142 | — | 1,142 | ||||||||||
Inventory revaluation | 2,676 | (821 | ) | (927 | ) | (928 | ) | — | |||||||
Adjusted EBITDA | $ | 20,027 | $ | 25,875 | $ | 27,608 | $ | 18,231 | $ | 91,741 |
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