Condensed Consolidating Financial Statements

As discussed in Note 2, "Debt", the Company's 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 the Company's foreign restricted subsidiaries ("Non-Guarantor Subsidiaries"). The Company's 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. We are required to present condensed consolidating financial information in order for the Guarantor Subsidiaries 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

March 31, 2016



	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	640	$	36,209	$	28,155	$	—		$	65,004
Accounts receivable, net	—		41,025		52,143		—			93,168
Intercompany receivable	30,210		132,523		170,224		(332,957		)	—
Inventories, net	—		113,289		55,590		—			168,879
Prepaid expenses and other	3,325		12,161		12,974		(2,964		)	25,496
Total current assets	34,175		335,207		319,086		(335,921		)	352,547
Property and equipment, net	255		93,936		147,648		—			241,839
Investments in NEC TOKIN	—		20,334		—		—			20,334
Investments in subsidiaries	382,108		429,723		93,359		(905,190		)	—
Goodwill	—		40,294		—		—			40,294
Intangible assets, net	—		27,252		6,049		—			33,301
Deferred income taxes	—		800		7,597		—			8,397
Other assets	2,764		2,452		616		—			5,832
Long-term intercompany receivable	67,500		41,428		1,088		(110,016		)	—
Total assets	$	486,802	$	991,426	$	575,443	$	(1,351,127	)	$	702,544
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	2,000	$	—	$	—	$	—		$	2,000
Accounts payable, trade	20		34,618		36,343		—			70,981
Intercompany payable	280		275,498		57,179		(332,957		)	—
Accrued expenses	17,305		11,807		21,208		—			50,320
Income taxes payable	—		2,983		434		(2,964		)	453
Total current liabilities	19,605		324,906		115,164		(335,921		)	123,754
Long-term debt, less current portion	354,716		19,881		14,000		—			388,597
Other non-current obligations	—		25,797		49,095		—			74,892
Deferred income taxes	—		2,242		578		—			2,820
Long-term intercompany payable	—		67,500		42,516		(110,016		)	—
Stockholders' equity	112,481		551,100		354,090		(905,190		)	112,481
Total liabilities and stockholders' equity	$	486,802	$	991,426	$	575,443	$	(1,351,127	)	$	702,544

Condensed Consolidating Balance Sheet

March 31, 2015



	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	640	$	33,094	$	22,628	$	—		$	56,362
Accounts receivable, net	—		35,535		55,322		—			90,857
Intercompany receivable	321,233		403,557		195,518		(920,308		)	—
Inventories, net	—		119,221		52,622		—			171,843
Prepaid expenses and other	3,191		21,134		20,164		(2,986		)	41,503
Total current assets	325,064		612,541		346,254		(923,294		)	360,565
Property and equipment, net	293		100,844		148,504		—			249,641
Investment in NEC TOKIN	—		45,016		—		—			45,016
Investment in subsidiaries	401,062		423,737		93,359		(918,158		)	—
Goodwill	—		35,584		—		—			35,584
Intangible assets, net	—		26,998		6,284		—			33,282
Restricted cash	—		—		—		—			—
Deferred income taxes	—		971		8,803		—			9,774
Other assets	4,088		7,824		919		—			12,831
Long-term intercompany receivable	63,788		39,151		1,088		(104,027		)	—
Total assets	$	794,295	$	1,292,666	$	605,211	$	(1,945,479	)	$	746,693
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	500	$	462	$	—		$	962
Accounts payable, trade	47		36,565		33,173		—			69,785
Intercompany payable	254,852		578,318		87,138		(920,308		)	—
Accrued expenses	17,253		16,644		26,559		—			60,456
Income taxes payable	—		2,928		942		(2,986		)	884
Total current liabilities	272,152		634,955		148,274		(923,294		)	132,087
Long-term debt, less current portion	357,461		20,948		12,000		—			390,409
Other non-current obligations	—		2,987		54,144		—			57,131
Deferred income taxes	—		2,241		143		—			2,384
Long-term intercompany payable	—		63,789		40,238		(104,027		)	—
Stockholders' equity	164,682		567,746		350,412		(918,158		)	164,682
Total liabilities and stockholders' equity	$	794,295	$	1,292,666	$	605,211	$	(1,945,479	)	$	746,693

Condensed Consolidating Statements of Operations

Fiscal Year Ended March 31, 2016



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	866,163		$	703,690		$	(835,030	)	$	734,823
Operating costs and expenses:
Cost of sales	1,194			708,143			642,362			(780,156		)	571,543
Selling, general and administrative expenses	38,071			74,521			43,728			(54,874		)	101,446
Research and development	79			17,313			7,563			—			24,955
Restructuring charges	—			2,564			1,614			—			4,178
Net (gain) loss on sales and disposals of assets	(7		)	(484		)	866			—			375
Total operating costs and expenses	39,337			802,057			696,133			(835,030		)	702,497
Operating income (loss)	(39,337		)	64,106			7,557			—			32,326
Other (income) expense:
Interest income	—			—			(14		)	—			(14		)
Interest expense	37,856			1,189			560			—			39,605
Change in value of NEC TOKIN options	—			26,300			—			—			26,300
Non-operating (income) expense, net	(36,183		)	34,188			(353		)	—			(2,348		)
Equity in earnings of subsidiaries	12,619			—			—			(12,619		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(53,629		)	2,429			7,364			12,619			(31,217		)
Income tax expense (benefit)	—			(269		)	6,275			—			6,006
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(53,629		)	2,698			1,089			12,619			(37,223		)
Equity income (loss) from NEC TOKIN	—			(16,406		)	—			—			(16,406		)
Income (loss) from continuing operations	(53,629		)	(13,708		)	1,089			12,619			(53,629		)
Income (loss) from discontinued operations	—			—			—			—			—
Net income (loss)	$	(53,629	)	$	(13,708	)	$	1,089		$	12,619		$	(53,629	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Fiscal Year Ended March 31, 2016



Other comprehensive income (loss)	$	(49,918	)	$	(24,832	)	$	5,873	$	12,619	$	(56,258	)

Condensed Consolidating Statements of Operations

Fiscal Year Ended March 31, 2015



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	195		$	978,705		$	773,504		$	(929,212	)	$	823,192
Operating costs and expenses:
Cost of sales	2,468			823,429			707,493			(869,707		)	663,683
Selling, general and administrative expenses	41,783			70,074			46,181			(59,505		)	98,533
Research and development	436			17,588			7,778			—			25,802
Restructuring charges	—			3,310			9,707			—			13,017
Net (gain) loss on sales and disposals of assets	(10		)	181			(392		)	—			(221		)
Total operating costs and expenses	44,677			914,582			770,767			(929,212		)	800,814
Operating income (loss)	(44,482		)	64,123			2,737			—			22,378
Other (income) expense:
Interest income	—			—			(15		)	—			(15		)
Interest expense	38,632			998			1,071			—			40,701
Change in value of NEC TOKIN options	—			(2,100		)	—			—			(2,100		)
Non-operating (income) expense, net	(40,903		)	49,069			(12,248		)	—			(4,082		)
Equity in earnings of subsidiaries	(27,998		)	—			—			27,998			—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(14,213		)	16,156			13,929			(27,998		)	(12,126		)
Income tax expense (benefit)	(70		)	576			4,721			—			5,227
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(14,143		)	15,580			9,208			(27,998		)	(17,353		)
Equity income (loss) from NEC TOKIN	—			(2,169		)	—			—			(2,169		)
Income (loss) from continuing operations	(14,143		)	13,411			9,208			(27,998		)	(19,522		)
Income (loss) from discontinued operations	—			102			5,277			—			5,379
Net income (loss)	$	(14,143	)	$	13,513		$	14,485		$	(27,998	)	$	(14,143	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Fiscal Year Ended March 31, 2015



Comprehensive income (loss)	$	(32,103	)	$	19,650	$	(20,672	)	$	(27,998	)	$	(61,123	)

Condensed Consolidating Statements of Operations

Fiscal Year Ended March 31, 2014



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	218		$	966,369		$	817,945		$	(950,866	)	$	833,666
Operating costs and expenses:
Cost of sales	1,336			878,308			729,105			(895,824		)	712,925
Selling, general and administrative expenses	41,359			61,896			47,643			(55,042		)	95,856
Research and development	229			16,849			7,388			—			24,466
Restructuring charges	—			2,858			11,264			—			14,122
Write down of long-lived assets	—			1,118			3,358			—			4,476
Net (gain) loss on sales and disposals of assets	—			(625		)	657			—			32
Net (gain) loss on intercompany asset transfer	—			14,564			(14,564		)	—			—
Total operating costs and expenses	42,924			974,968			784,851			(950,866		)	851,877
Operating income (loss)	(42,706		)	(8,599		)	33,094			—			(18,211		)
Other (income) expense:
Interest income	(12		)	(4		)	(179		)	—			(195		)
Interest expense	40,069			1,130			(237		)	—			40,962
Change in value of NEC TOKIN options	—			(3,111		)	—			—			(3,111		)
Other (income) expense, net	(40,642		)	39,852			1,220			—			430
Equity in earnings of subsidiaries	26,332			—			—			(26,332		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(68,453		)	(46,466		)	32,290			26,332			(56,297		)
Income tax expense (benefit)	—			(1,302		)	2,784			—			1,482
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(68,453		)	(45,164		)	29,506			26,332			(57,779		)
Equity income (loss) from NEC TOKIN	—			(7,090		)	—			—			(7,090		)
Income (loss) from continuing operations	(68,453		)	(52,254		)	29,506			26,332			(64,869		)
Income (loss) from discontinued operations	(50		)	(1,195		)	(2,389		)	—			(3,634		)
Net income (loss)	$	(68,503	)	$	(53,449	)	$	27,117		$	26,332		$	(68,503	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Fiscal Year Ended March 31, 2014



Comprehensive income (loss)	$	(62,676	)	$	(57,309	)	$	35,640	$	26,332	$	(58,013	)

Condensed Consolidating Statements of Cash Flows

Fiscal Year Ended March 31, 2016



	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	$	3,722		$	15,107		$	13,536		$	—	$	32,365
Investing activities:
Capital expenditures	—			(9,550		)	(10,919		)	—		(20,469		)
Change in restricted cash	—			1,802			—			—		1,802
Proceeds from sale of assets	—			248			723			—		971
Acquisitions, net of cash received	—			(2,892		)	—			—		(2,892		)
Net cash provided by (used in) investing activities	—			(10,392		)	(10,196		)	—		(20,588		)
Financing activities:
Proceeds from revolving line of credit	—			8,000			2,000			—		10,000
Payments of revolving line of credit	—			(9,600		)	—			—		(9,600		)
Deferred acquisition payments	(3,000		)	—			—			—		(3,000		)
Payments of long-term debt	—			—			(481		)	—		(481		)
Proceeds from exercise of stock options	—			—			—			—		—
Purchase of treasury stock	(722		)	—			—			—		(722		)
Net cash provided by (used in) financing activities	(3,722		)	(1,600		)	1,519			—		(3,803		)
Net increase (decrease) in cash and cash equivalents	—			3,115			4,859			—		7,974
Effect of foreign currency fluctuations on cash	—			—			668			—		668
Cash and cash equivalents at beginning of fiscal year	640			33,094			22,628			—		56,362
Cash and cash equivalents at end of fiscal year	$	640		$	36,209		$	28,155		$	—	$	65,004

Condensed Consolidating Statements of Cash Flows

Fiscal Year Ended March 31, 2015



	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	$	39,575		$	(4,085	)	$	(11,088	)	$	—	$	24,402
Investing activities:
Capital expenditures	—			(12,930		)	(9,302		)	—		(22,232		)
Change in restricted cash	—			11,509			—			—		11,509
Proceeds from sale of assets	—			2,403			2,385			—		4,788
Proceeds from sale of discontinued operations	—			—			9,564			—		9,564
Net cash provided by (used in) investing activities	—			982			2,647			—		3,629
Financing activities:
Proceeds from revolving line of credit	—			37,340			5,000			—		42,340
Payments on revolving line of credit	—			(22,342		)	(5,000		)	—		(27,342		)
Deferred acquisition payments	(18,527		)	(1,000		)	—			—		(19,527		)
Payments of long-term debt	(20,417		)	—			(1,316		)	—		(21,733		)
Proceeds from exercise of stock options	24			—			—			—		24
Purchase of treasury stock	(630		)	—			—			—		(630		)
Net cash provided by (used in) financing activities	(39,550		)	13,998			(1,316		)	—		(26,868		)
Net increase (decrease) in cash and cash equivalents	25			10,895			(9,757		)	—		1,163
Effect of foreign currency fluctuations on cash	(1		)	(1		)	(2,728		)	—		(2,730		)
Cash and cash equivalents at beginning of fiscal year	616			22,200			35,113			—		57,929
Cash and cash equivalents at end of fiscal year	$	640		$	33,094		$	22,628		$	—	$	56,362

Condensed Consolidating Statements of Cash Flows

Fiscal Year Ended March 31, 2014



	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	$	7,724		$	(26,984	)	$	12,514		$	—	$	(6,746	)
Investing activities:
Capital expenditures	—			(13,348		)	(18,799		)	—		(32,147		)
Change in restricted cash	—			4,047			—			—		4,047
Proceeds from sale of assets	—			996			1,851			—		2,847
Net cash provided by (used in) investing activities	—			(8,305		)	(16,948		)	—		(25,253		)
Financing activities:
Proceeds from revolving line of credit	—			9,000			12,000			—		21,000
Payments on revolving line of credit	—			(2,551		)	—			—		(2,551		)
Deferred acquisition payments	(20,977		)	(1,000		)	—			—		(21,977		)
Payments of long-term debt	(3,583		)	(16		)	—			—		(3,599		)
Proceeds from exercise of stock options	250			—			—			—		250
Net cash provided by (used in) financing activities	(24,310		)	5,433			12,000			—		(6,877		)
Net increase (decrease) in cash and cash equivalents	(16,586		)	(29,856		)	7,566			—		(38,876		)
Effect of foreign currency fluctuations on cash	—			—			827			—		827
Cash and cash equivalents at beginning of fiscal year	17,202			52,056			26,720			—		95,978
Cash and cash equivalents at end of fiscal year	$	616		$	22,200		$	35,113		$	—	$	57,929