10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to      

Commission File Number: 001-15491

KEMET CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	57-0923789
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2835 KEMET WAY, SIMPSONVILLE, SOUTH CAROLINA 29681

(Address of principal executive offices, zip code)

(864) 963-6300

(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report: N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES ý  NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES ý NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o YES  ý NO

The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, as of July 29, 2016 was 46,237,429.

KEMET CORPORATION AND SUBSIDIARIES

Form 10-Q for the Quarter ended June 30, 2016

INDEX

	Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at June 30, 2016 and March 31, 2016	3
Condensed Consolidated Statements of Operations for the Three-Month Periods Ended June 30, 2016 and June 30, 2015	4
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three-Month Periods Ended June 30, 2016 and June 30, 2015	5
Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended June 30, 2016 and June 30, 2015	6
Notes to the Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures About Market Risk	44
Item 4. Controls and Procedures	44
PART II OTHER INFORMATION
Item 1. Legal Proceedings	45
Item 1A. Risk Factors	45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3. Defaults Upon Senior Securities	45
Item 4. Mine Safety Disclosures	45
Item 5. Other Information	45
Item 6. Exhibits	45
Exhibit 10.1
Exhibit 10.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 99.1
Exhibit 99.2
Exhibit 101

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

KEMET CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Amounts in thousands, except per share data)

(Unaudited)

	June 30, 2016			March 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	52,938		$	65,004
Accounts receivable, net	89,085			93,168
Inventories, net	167,916			168,879
Prepaid expenses and other	30,925			25,496
Total current assets	340,864			352,547
Property, plant and equipment, net of accumulated depreciation of $816,331 and $815,338 as of June 30, 2016 and March 31, 2016, respectively	231,688			241,839
Goodwill	40,294			40,294
Intangible assets, net	32,613			33,301
Investment in NEC TOKIN	15,172			20,334
Deferred income taxes	7,605			8,397
Other assets	2,744			3,068
Total assets	$	670,980		$	699,780
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	2,000
Accounts payable	66,825			70,981
Accrued expenses	41,898			50,320
Income taxes payable	216			453
Total current liabilities	108,939			123,754
Long-term debt, less current portion	385,968			385,833
Other non-current obligations	84,694			74,892
Deferred income taxes	2,984			2,820
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 June 30, 2016 and March 31, 2016	465			465
Additional paid-in capital	444,772			452,821
Retained deficit	(311,845		)	(299,510		)
Accumulated other comprehensive income	(43,939		)	(31,425		)
Treasury stock, at cost (271 and 611 shares at June 30, 2016 and March 31, 2016, respectively)	(1,058		)	(9,870		)
Total stockholders’ equity	88,395			112,481
Total liabilities and stockholders’ equity	$	670,980		$	699,780

 See accompanying notes to the unaudited condensed consolidated financial statements.

3

KEMET CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share data)

(Unaudited)

	Quarters Ended June 30,
	2016			2015
Net sales	$	184,935		$	187,590
Operating costs and expenses:
Cost of sales	142,412			147,877
Selling, general and administrative expenses	25,914			30,430
Research and development	6,932			6,274
Restructuring charges	688			1,824
Net (gain) loss on sales and disposals of assets	91			(58		)
Total operating costs and expenses	176,037			186,347
Operating income (loss)	8,898			1,243
Non-operating (income) expense:
Interest income	(3		)	(3		)
Interest expense	9,923			10,013
Change in value of NEC TOKIN option	12,000			29,200
Other (income) expense, net	(2,394		)	916
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(10,628		)	(38,883		)
Income tax expense (benefit)	1,800			(248		)
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,428		)	(38,635		)
Equity income (loss) from NEC TOKIN	223			1,585
Net income (loss)	$	(12,205	)	$	(37,050	)
Net income (loss) per basic and diluted share	$	(0.26	)	$	(0.81	)
Weighted-average shares outstanding:
Basic	46,349			45,552
Diluted	46,349			45,552

See accompanying notes to the unaudited condensed consolidated financial statements.

4

KEMET CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Amounts in thousands)

(Unaudited)

	Quarters Ended June 30,
	2016			2015
Net income (loss)	$	(12,205	)	$	(37,050	)
Other comprehensive income (loss):
Foreign currency translation gains (losses)	(6,386		)	5,865
Defined benefit pension plans, net of tax impact	163			167
Post-retirement plan adjustments	(42		)	(40		)
Equity interest in NEC TOKIN's other comprehensive income (loss)	(5,384		)	(932		)
Foreign exchange contracts	(865		)	(2,947		)
Other comprehensive income (loss)	(12,514		)	2,113
Total comprehensive income (loss)	$	(24,719	)	$	(34,937	)

See accompanying notes to the unaudited condensed consolidated financial statements.

5

KEMET CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

	Quarters Ended June 30,
	2016			2015
Net income (loss)	$	(12,205	)	$	(37,050	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	9,436			9,917
Equity (income) loss from NEC TOKIN	(223		)	(1,585		)
Non-cash debt and financing costs	190			220
Stock-based compensation expense	1,228			1,279
Change in value of NEC TOKIN option	12,000			29,200
Net (gain) loss on sales and disposals of assets	91			(58		)
Pension and other post-retirement benefits	709			127
Change in deferred income taxes	1,294			(934		)
Change in operating assets	(2,357		)	(20,201		)
Change in operating liabilities	(13,088		)	(2,673		)
Other	(111		)	234
Net cash provided by (used in) operating activities	(3,036		)	(21,524		)
Investing activities:
Capital expenditures	(6,167		)	(5,773		)
Acquisitions, net of cash received	—			(2,892		)
Net cash provided by (used in) investing activities	(6,167		)	(8,665		)
Financing activities:
Proceeds from revolving line of credit	—			8,000
Payments on revolving line of credit	—			(2,500		)
Payments on long-term debt	(1,870		)	(481		)
Purchase of treasury stock	(595		)	(544		)
Net cash provided by (used in) financing activities	(2,465		)	4,475
Net increase (decrease) in cash and cash equivalents	(11,668		)	(25,714		)
Effect of foreign currency fluctuations on cash	(398		)	411
Cash and cash equivalents at beginning of fiscal period	65,004			56,362
Cash and cash equivalents at end of fiscal period	$	52,938		$	31,059

See accompanying notes to the unaudited condensed consolidated financial statements.

6

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Basis of Financial Statement Presentation

The condensed consolidated financial statements contained herein are unaudited and have been prepared from the books and records of KEMET Corporation and its subsidiaries (“KEMET” or the “Company”). In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q, and therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Although the Company believes the disclosures are adequate to make the information presented not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended March 31, 2016 (the “Company’s 2016 Annual Report”).

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. In consolidation, all significant intercompany amounts and transactions have been eliminated.  Certain prior year amounts have been reclassified to conform to current year presentation.  Net sales and operating results for the quarter ended June 30, 2016 are not necessarily indicative of the results to be expected for the full year.

The Company’s significant accounting policies are presented in the Company’s 2016 Annual Report.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and judgments based on historical data and other assumptions that management believes are reasonable.  These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. In addition, they affect the reported amounts of revenues and expenses during the reporting period.

The Company’s judgments are based on management’s assessment as to the effect certain estimates, assumptions, or future trends or events may have on the financial condition and results of operations reported in the unaudited condensed consolidated financial statements. It is important that readers of these unaudited financial statements understand that actual results could differ from these estimates, assumptions, and judgments.

Recently Issued Accounting Pronouncements

New accounting standards adopted/issued

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation-Stock Compensation. This guidance changes several aspects of the accounting for share-based payment award transactions, including: (1) Accounting and Cash Flow Classification for Excess Tax Benefits and Deficiencies, (2) Forfeitures, and (3) Tax Withholding Requirements and Cash Flow Classification. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early application is permitted, and KEMET adopted ASU No. 2016-09 as of April 1, 2016. The Company elected to discontinue estimating forfeitures that are expected to occur and recorded a cumulative effect adjustment to retained earnings for $130,000 as of April 1, 2016. There was no cumulative adjustment related to the excess tax benefits as the Company did not have an additional paid in capital pool of excess tax benefits. The adoption did not have a significant impact to the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The ASU requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than short-term leases). The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. Early application is permitted. The Company is currently in the process of assessing the impact the adoption of this guidance will have on the Company's consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The ASU requires an entity that uses first-in, first-out or average cost to measure its inventory at the lower of cost or net realizable value. Net

7

realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 was effective for interim and annual reporting periods beginning April 1, 2016. The adoption of ASU 2015-11 did not materially impact the Company's operating results and financial position.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The ASU specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. In August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which clarifies the treatment of debt issuance costs associated with line-of-credit arrangements that were not specifically addressed in ASU 2015-03. ASU 2015-15 states that entities may elect to continue to treat debt issuance costs associated with lines of credit as an asset, consistent with current treatment. The Company adopted these ASUs in the first quarter of 2017. The ASUs did not impact the Company's results of operations or liquidity. The balance sheet as of March 31, 2016 has been adjusted to reflect retrospective application of the new accounting guidance as follows (amounts in thousands):

	As Previously Reported		Retrospective Adjustment			As Adjusted
Other assets	$	5,832	$	(2,764	)	$	3,068
Total assets	702,544		(2,764		)	699,780
Long-term debt, less current portion	388,597		(2,764		)	385,833
Total liabilities and stockholders' equity	702,544		(2,764		)	699,780

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern. The new guidance requires management to assess if there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim period. If conditions or events give rise to substantial doubt, disclosures are required. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter; early application is permitted. This new guidance is not expected to have a material impact on the Company's Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes existing accounting standards for revenue recognition and creates a single framework. The new guidance requires either a retrospective or a modified retrospective approach at adoption. Early adoption is permitted, but not before Company's fiscal year that begins on April 1, 2017 (the original effective date of the ASU). Additional updates to Topic 606 issued by the FASB in 2015 and 2016 include the following:

• ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of the new guidance such that the new provisions will now be required for fiscal years, and interim periods within those years, beginning after December 15, 2017 (ASU No. 2015-14 is effective for the Company's fiscal year that begins on April 1, 2018 and interim periods within that fiscal year).

• ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations (reporting revenue gross versus net).

• ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies the implementation guidance on identifying performance obligations and classifying licensing arrangements.

• ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which clarifies the implementation guidance in a number of other areas.

The Company is currently in the process of assessing the impact the adoption of the new revenue standards will have on its consolidated financial statements and related disclosures, as well as the available transition methods.

There are currently no other accounting standards that have been issued that will have a significant impact on the Company’s financial position, results of operations or cash flows upon adoption.

8

Fair Value Measurement

The Company utilizes three levels of inputs to measure the fair value of (a) nonfinancial assets and liabilities that are recognized or disclosed at fair value in the Company’s consolidated financial statements on a recurring basis (at least annually) and (b) all financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The first two inputs are considered observable and the last is considered unobservable. The levels of inputs are as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and March 31, 2016 are as follows (amounts in thousands):

	Carrying Value June 30,			Fair Value June 30,			Fair Value Measurement Using									Carrying Value March 31,			Fair Value March 31,			Fair Value Measurement Using
	2016			2016			Level 1			Level 2 (2)			Level 3			2016			2016			Level 1			Level 2 (2)			Level 3
Assets (Liabilities):
Money markets (1)	$	739		$	739		$	739		$	—		$	—		$	738		$	738		$	738		$	—		$	—
Total debt	(385,968		)	(366,533		)	(337,115		)	(29,418		)	—			(387,833		)	(284,261		)	(254,713		)	(29,548		)	—
NEC TOKIN option,  net (3)	(32,600		)	(32,600		)	—			—			(32,600		)	(20,600		)	(20,600		)	—			—			(20,600		)

___________________

(1) Included in the line item “Cash and cash equivalents” on the Condensed Consolidated Balance Sheets.

(2) The valuation approach used to calculate fair value was a discounted cash flow based on the borrowing rate for each respective debt facility.

(3) See Note 5, Investment in NEC TOKIN, for a description of the NEC TOKIN option.  The value of the option depends on the enterprise value of NEC TOKIN Corporation and its forecasted EBITDA over the duration of the option. The option has been valued using option pricing methods in a Monte Carlo simulation.

The table below summarizes NEC TOKIN option valuation activity using significant unobservable inputs (Level 3) (amounts in thousands):

March 31, 2016	$	(20,600	)
Change in value of NEC TOKIN option	(12,000		)
June 30, 2016	$	(32,600	)

Inventories

Inventories are stated at the lower of cost or market.  The components of inventories are as follows (amounts in thousands):

	June 30, 2016			March 31, 2016
Raw materials and supplies	$	78,936		$	80,289
Work in process	48,478			46,631
Finished goods	55,697			58,060
	183,111			184,980
Inventory reserves	(15,195		)	(16,101		)
	$	167,916		$	168,879

9

Warrant

As of June 30, 2016 and March 31, 2016, 8.4 million shares were subject to the warrant (which expires June 30, 2019) held by K Equity, LLC.

Revenue Recognition

The Company ships products to customers based upon firm orders and revenue is recognized when the sales process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred and collectability is reasonably assured. Based on product availability, customer requirements and customer consent, the Company may ship products earlier than the initial planned ship date. Shipping and handling costs are included in cost of sales.

A portion of sales is related to products designed to meet customer specific requirements. These products typically have stricter tolerances making them useful to the specific customer requesting the product and to customers with similar or less stringent requirements. The Company recognizes revenue when title to the products transfers to the customer.

A portion of sales is made to distributors under agreements allowing certain rights of return and price protection on unsold merchandise held by distributors. The Company's distributor policy includes inventory price protection and "ship-from-stock and debit" ("SFSD") programs common in the industry.

KEMET's SFSD program provides authorized distributors with the flexibility to meet marketplace prices by allowing them, upon a pre-approved case-by-case basis, to adjust their purchased inventory cost to correspond with current market demand. Requests for SFSD adjustments are considered on an individual basis, require a pre-approved cost adjustment quote from their local KEMET sales representative and apply only to a specific customer, part, specified special price amount, specified quantity, and are only valid for a specific period of time. To estimate potential SFSD adjustments corresponding with current period sales, KEMET records a sales reserve based on historical SFSD credits, distributor inventory levels, and certain accounting assumptions, all of which are reviewed quarterly.

Most of the Company's distributors have the right to return to KEMET a certain portion of the purchased inventory, which, in general, does not exceed 6% of their purchases from the previous fiscal quarter. KEMET estimates future returns based on historical return patterns and records a corresponding allowance on the Condensed Consolidated Balance Sheets. The Company also offers volume based rebates on a case-by-case basis to certain customers in each of the Company's sales channels.

The establishment of sales allowances is recognized as a component of the line item "Net sales" on the Condensed Consolidated Statements of Operations, while the associated reserves are included in the line item "Accounts receivable, net" on the Condensed Consolidated Balance Sheets. Estimates used in determining sales allowances are subject to various factors. This includes, but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to the Company's estimates.

The Company provides a limited warranty to customers that the Company’s products meet certain specifications. The warranty period is generally limited to one year, and the Company’s liability under the warranty is generally limited to a replacement of the product or refund of the purchase price of the product. Warranty costs as a percentage of net sales were less than 1.0% for the quarters endedJune 30, 2016 and 2015. The Company recognizes warranty costs when they are both probable and reasonably estimable.

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Note 2. Debt

A summary of debt is as follows (amounts in thousands):

	June 30, 2016		March 31, 2016
10.5% Senior Notes, net (1)	$	352,087	$	353,952
Revolving line of credit	33,881		33,881
Total debt	385,968		387,833
Current maturities	—		(2,000		)
Total long-term debt	$	385,968	$	385,833

(1) As noted in Note 1, "Basis of Financial Statements Presentation", ASU No. 2015-03, Interest - Imputation of Interest, was adopted as of April 1, 2016. As such, debt issuance cost, if any, is included within the respective debt balance. Amounts shown are net of premium and debt issuance costs of $0.9 million and $1.0 million as of June 30, 2016 and March 31, 2016, respectively which reduce the 10.5% Senior Notes balance.

The line item “Interest expense” on the Condensed Consolidated Statements of Operations for the quarters endedJune 30, 2016 and 2015, consists of the following (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Contractual interest expense	$	9,710		$	9,746
Capitalized interest	(52		)	—
Amortization of debt issuance costs	348			348
Amortization of debt (premium) discount	(199		)	(181		)
Imputed interest on acquisition-related obligations	41			53
Interest expense on capital lease	75			47
Total interest expense	$	9,923		$	10,013

Revolving Line of Credit

On May 2, 2016, the Loan and Security Agreement dated September 30, 2010, as amended, by and among KEMET Electronics Corporation ("KEC"), KEMET Electronics Marketing (S) Pte. Ltd., KEMET Foil Manufacturing, LLC (“KEMET Foil”), KEMET Blue Powder Corporation (“KEMET Blue Powder”), The Forest Electric Company and the financial institutions party thereto (the “Loan and Security Agreement”), was amended and, as a result, the revolving credit facility has increased to $65.0 million. The Company had the following activity for the three-month period ended June 30, 2016 and resulting balances under the revolving line of credit (amounts in thousands, excluding percentages):

	March 31, 2016		Three-Month Period Ended June 30, 2016				June 30, 2016
	Outstanding Borrowings		Additional Borrowings		Repayments		Outstanding Borrowings		Rate (1) (2)		Due Date
U.S. Facility	$	19,881	$	—	$	—	$	19,881	4.750	%	December 19, 2019
Singapore Facility
Singapore Borrowing 1 (3)	12,000		—		—		12,000		3.250	%	August 22, 2016
Singapore Borrowing 2 (3)	2,000		—		—		2,000		3.250	%	October 11, 2016
Total Facilities	$	33,881	$	—	$	—	$	33,881

______________________________________________________________________________

(1) For U.S. borrowings, Base Rate plus 1.50%, as defined in the Loan and Security Agreement.

(2) For Singapore borrowings, London Interbank Offer Rate ("LIBOR"), plus a spread of 2.50% as of June 30, 2016.

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(3) The Company has the intent and ability to extend the due date on the Singapore borrowings.

As of June 30, 2016, these were the only borrowings under the revolving line of credit, and the Company's available borrowing capacity under the Loan and Security Agreement was $31.1 million. The borrowing capacity has increased primarily due to a $5.0 million increase in the credit facility noted above.

10.5% Senior Notes

On May 10, 2016, the Company repurchased and retired $2.0 million of its 10.5% Senior Notes due May 1, 2018 (the "10.5% Senior Notes"). As of June 30, 2016 and March 31, 2016, the Company had outstanding $353.0 million and $355.0 million, respectively in aggregate principal amount of the Company’s 10.5% Senior Notes.  The Company had interest payable related to the 10.5% Senior Notes included in the line item “Accrued expenses” on its Condensed Consolidated balance sheets of $6.2 million and $15.5 million as of June 30, 2016 and March 31, 2016, respectively.

Note 3. Restructuring Charges

KEMET's various restructuring plans to make the Company more competitive by reducing excess capacity, relocating production to lower cost locations and eliminating unnecessary costs throughout the Company are nearing completion.

A summary of the expenses aggregated in the Condensed Consolidated Statements of Operations line item “Restructuring charges” in the quarters endedJune 30, 2016 and 2015, is as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
Personnel reduction costs	$	647	$	1,544
Manufacturing and sales office relocation costs	$	41	$	280
Restructuring charges	$	688	$	1,824

Quarter Ended June 30, 2016

The Company incurred $0.7 million in restructuring charges in the quarter ended June 30, 2016 comprised of $0.6 million in personnel reduction costs and $41 thousand in manufacturing relocation costs.

The personnel reduction costs of $0.6 million consist of $0.3 million for overhead reductions in Sweden, $0.2 million related to manufacturing headcount reductions in Europe (primarily Italy and Landsberg, Germany) corresponding with the relocation of certain production lines to lower cost regions, and $0.1 millionrelated to the consolidation of certain Solid Capacitor manufacturing in Matamoros, Mexico.

The manufacturing relocation costs of $41 thousand consists of transfers of Film and Electrolytic production lines to lower cost regions.

Quarter Ended June 30, 2015

The Company incurred $1.8 million in restructuring charges in the quarter ended June 30, 2015 comprised of $1.5 million of personnel reduction costs and $0.3 million in manufacturing relocation costs.

The personnel reduction costs of $1.5 million consist of the following: $0.6 millionrelated a headcount reduction in Suzhou, China for the Film & Electrolytic production line transfer from Suzhou, China to Anting, China, $0.5 million for planned headcount reductions in Europe (primarily Landsberg, Germany), $0.2 million for headcount reductions in Matamoros, Mexico related to the relocation of certain Solid Capacitor manufacturing from Matamoros, Mexico to Victoria, Mexico, and $0.2 million for headcount reductions related to the outsourcing of the Company's information technology function and overhead reductions in North America and Europe.

The Company also incurred $0.3 million of manufacturing relocation costs for transfers of Film and Electrolytic production lines.

12

Reconciliation of restructuring liability

A reconciliation of the beginning and ending liability balances for restructuring charges included in the line items “Accrued expenses” and “Other non-current obligations” on the Condensed Consolidated Balance Sheets for the quarters endedJune 30, 2016 and 2015 are as follows (amounts in thousands):

	Quarter Ended June 30, 2016						Quarter Ended June 30, 2015
	Personnel  Reductions			Manufacturing  Relocations			Personnel  Reductions			Manufacturing  Relocations
Beginning of period	$	976		$	—		$	7,239		$	—
Costs charged to expense	647			41			1,544			280
Costs paid or settled	(523		)	(41		)	(2,439		)	(280		)
Change in foreign exchange	(21		)	—			212			—
End of period	$	1,079		$	—		$	6,556		$	—

Note 4. Comprehensive Income (Loss) and Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the quarters ended June 30, 2016 and 2015 include the following components (amounts in thousands):

	Foreign Currency Translation (1)			Post-Retirement  Benefit Plan Adjustments			Defined Benefit Pension Plans,  Net of Tax (2)			Ownership Share of Equity Method  Investees’ Other  Comprehensive  Income (Loss)			Foreign Exchange Contracts			Net Accumulated  Other  Comprehensive  Income (Loss)
Balance at March 31, 2016	$	(10,272	)	$	1,114		$	(15,161	)	$	(6,739	)	$	(367	)	$	(31,425	)
Other comprehensive income (loss) before reclassifications	(6,386		)	—			—			(5,384		)	(2,618		)	(14,388		)
Amounts reclassified out of AOCI	—			(42		)	163			—			1,753			1,874
Other comprehensive income (loss)	(6,386		)	(42		)	163			(5,384		)	(865		)	(12,514		)
Balance at June 30, 2016	$	(16,658	)	$	1,072		$	(14,998	)	$	(12,123	)	$	(1,232	)	$	(43,939	)

	Foreign Currency Translation			Post-Retirement  Benefit Plan Adjustments			Defined Benefit  Pension Plans,  Net of Tax (2)			Ownership Share of Equity Method  Investees’ Other  Comprehensive  Income (Loss)			Foreign Exchange Contracts			Net Accumulated  Other  Comprehensive  Income (Loss)
Balance at March 31, 2015	$	(12,132	)	$	1,159		$	(20,363	)	$	1,537		$	1,003		$	(28,796	)
Other comprehensive income (loss) before reclassifications	5,865			—			—			(932		)	(3,512		)	1,421
Amounts reclassified out of AOCI	—			(40		)	167			—			565			692
Other comprehensive income (loss)	5,865			(40		)	167			(932		)	(2,947		)	2,113
Balance at June 30, 2015	(6,267		)	$	1,119		$	(20,196	)	$	605		$	(1,944	)	$	(26,683	)

(1) Due primarily to the Company’s valuation allowance on deferred tax assets, there were no significant deferred tax effects associated with the cumulative currency translation gains and losses during the quarter ended June 30, 2016.

(2) Ending balance is net of tax of $2.0 million and $2.3 million as of June 30, 2016 and June 30, 2015, respectively.

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Note 5. Investment in NEC TOKIN

On March 12, 2012, KEC, a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with NEC TOKIN Corporation ("NEC TOKIN"), a manufacturer of tantalum capacitors, electro-magnetic, electro-mechanical and access devices, to acquire 51% of the common stock of NEC TOKIN (which represented a 34% economic interest, as calculated based on the number of common shares held by KEC, directly and indirectly, in proportion to the aggregate number of outstanding common and convertible preferred shares of NEC TOKIN as of such date) (the "Initial Purchase") from NEC Corporation ("NEC") of Japan. The transaction closed on February 1, 2013, at which time KEC paid a purchase price of $50.0 million for new shares of common stock of NEC TOKIN (the “Initial Closing”). The Company accounts for its investment in NEC TOKIN using the equity method for a non-consolidated variable interest entity since KEC does not have the power to direct significant activities of NEC TOKIN. The Company believes that the NEC TOKIN convertible preferred stock represents in-substance common stock of NEC TOKIN and, as a result, its method of calculating KEC’s economic basis in NEC TOKIN is the appropriate basis on which to recognize its share of the earnings or loss of NEC TOKIN.

In connection with KEC’s execution of the Stock Purchase Agreement, KEC entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”) with NEC TOKIN and NEC, which provides for restrictions on transfers of NEC TOKIN’s capital stock, certain tag-along and first refusal rights on transfer, restrictions on NEC’s ability to convert the preferred stock of NEC TOKIN held by it, certain management services to be provided to NEC TOKIN by KEC (or an affiliate of KEC) and certain board representation rights. KEC holds four of seven NEC TOKIN director positions. However, NEC has significant board rights.

Concurrent with execution of the Stock Purchase Agreement and the Stockholders’ Agreement, KEC entered into an Option Agreement (the “Option Agreement”) with NEC, which was amended on August 29, 2014, whereby KEC had the right to purchase additional shares of NEC TOKIN common stock from NEC TOKIN for a purchase price of $50.0 million resulting in an economic interest of approximately 49% while maintaining ownership of 51% of NEC TOKIN’s common stock (the “First Call Option”) by providing notice of the First Call Option between the Initial Closing and April 30, 2015. Upon providing such First Call Option notice, but not before April 1, 2015, KEC could also have exercised a second option to purchase all outstanding capital stock of NEC TOKIN from its stockholders, primarily NEC, for a purchase price based on the greater of six times LTM EBITDA (as defined in the Option Agreement) less the previous payments and certain other adjustments, or the outstanding amount of NEC TOKIN’s debt obligation to NEC (the “Second Call Option”) by providing notice of the Second Call Option by May 31, 2018. The First and Second Call Options expired on April 30, 2015 without being exercised.

Through May 31, 2018, NEC may require KEC to purchase all outstanding capital stock of NEC TOKIN from its stockholders, primarily NEC (the "Put Option"), provided that KEC's payment of the Put Option price is permitted under the 10.5% Senior Notes and Loan and Security Agreement. However, in the event that KEC issues new debt securities principally to refinance its outstanding 10.5% Senior Notes due 2018 and its currently outstanding credit agreement, including amounts to pay related fees and expenses and to use for general corporate purposes (“Refinancing Notes”), prior to NEC’s delivery of its notification of exercise of the Put Option, then the earliest date NEC may exercise the Put Option is automatically extended to the day immediately following the final scheduled maturity date of such Refinancing Notes, or in the event such Refinancing Notes are redeemed in full prior to such final scheduled maturity date, then on the day immediately following the date of such full redemption, but in any event beginning no later than November 1, 2019. If not previously exercised, the Put Option will expire on October 31, 2023.

The purchase price for the Put Option will be based on the greater of six times LTM EBITDA less previous payments and certain other adjustments, or the outstanding amount of NEC TOKIN’s debt obligation to NEC as of the date the Put Option is exercised. The purchase price for the Put Option is reduced by the amount of NEC TOKIN’s debt obligation to NEC which KEC will assume. The determination of the purchase price could be modified in the event there is a disagreement between NEC and KEC under the Stockholders’ Agreement.

The Company has marked the option to fair value and in the quarter ended June 30, 2016 recognized a $12.0 million loss, which was included on the line item “Change in value of the NEC TOKIN option” in the Condensed Consolidated Statement of Operations. The line item "Other non-current obligations" on the Condensed Consolidated Balance Sheets includes $32.6 million and $20.6 million as of June 30, 2016 and March 31, 2016, respectively, related to the respective fair value of the Put Option.

KEC's total investment in NEC TOKIN including the net call derivative described above on February 1, 2013, the closing date of the acquisition, was $54.5 million which includes $50 million cash consideration plus approximately $4.5

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million in transaction expenses (fees for legal, accounting, due diligence, investment banking and various other services necessary to complete the transactions). The Company has made an allocation of the aggregate purchase price, which was based upon estimates that the Company believes are reasonable.

Summarized financial information for NEC TOKIN follows (amounts in thousands):

	June 30, 2016		March 31, 2016
Current assets	$	247,713	$	240,427
Non-current assets	263,824		260,614
Current liabilities	178,451		179,360
Non-current liabilities	364,926		335,500

	Quarters Ended June 30,
	2016		2015
Sales	$	120,510	$	114,734
Gross profit	26,546		24,668
Net income (loss)	2,350		5,255

A reconciliation between NEC TOKIN's net income (loss) and KEC's equity investment income (loss) follows (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
NEC TOKIN net income (loss)	$	2,350		$	5,255
KEC's economic interest %	34		%	34		%
Equity income (loss) from NEC TOKIN before adjustments	799			1,787
Adjustments:
Amortization and depreciation	(544		)	(136		)
Inventory profit elimination	(32		)	(66		)
Equity income (loss) from NEC TOKIN	$	223		$	1,585

A reconciliation between NEC TOKIN's net assets and KEC's investment in NEC TOKIN balance follows (amounts in thousands):

	June 30, 2016			March 31, 2016
Investment in NEC TOKIN	$	15,172		$	20,334
Purchase price accounting basis adjustments:
Property, plant and equipment (1)	3,598			3,365
Technology (1)	(10,676		)	(10,134		)
Long-term debt (1)	(1,910		)	(1,975		)
Goodwill	(8,262		)	(7,555		)
Indemnity asset for legal investigation	(8,500		)	(8,500		)
Inventory profit elimination (2)	403			371
Other	(651		)	(604		)
KEC's 34% economic interest in NEC TOKIN's net assets	$	(10,826	)	$	(4,698	)

(1) Amortized over the estimated lives.

(2) Adjusted each period for any activity.

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As of June 30, 2016, KEC’s maximum loss exposure as a result of its investments in NEC TOKIN is limited to the aggregate of the carrying value of the investment, any accounts receivable balance due from NEC TOKIN and obligations in the Put Option. 

Summarized transactions between KEC and NEC TOKIN are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
KEC's sales to NEC TOKIN	$	3,147	$	4,855
NEC TOKIN's sales to KEMET	1,872		1,478

	June 30, 2016		March 31, 2016
Accounts receivable	$	2,072	$	5,220
Accounts payable	1,250		1,019
Management service agreement receivable (1)	693		748

(1) In accordance with the Stockholders’ Agreement, KEC entered into a management services agreement with NEC TOKIN to provide services for which KEC is being reimbursed.

Beginning in March 2014, NEC TOKIN and certain of its subsidiaries received inquiries, requests for information and other communications from government authorities in China, the United States, the European Commission, Japan, South Korea Taiwan, Singapore and Brazil concerning alleged anti-competitive activities within the capacitor industry. 

On September 2, 2015, the United States Department of Justice announced a plea agreement with NEC TOKIN in which NEC TOKIN agreed to plead guilty to a one-count felony charge of unreasonable restraint of interstate and foreign trade and commerce in violation of Section 1 of the Sherman Act, and to pay a criminal fine of $13.8 million. The plea agreement was approved by the United States District Court, Northern District of California, on January 21, 2016. The fine is payable over five years in six installments of $2.3 million each, plus accrued interest. The first payment was made in February 2016 and the next payment is due in February 2017.

On December 9, 2015, the Taiwan Fair Trade Commission (“TFTC”) publicly announced that NEC TOKIN would be fined 1,218.2 million New Taiwan dollars ("NTD") (approximately U.S. $37.7 million) for violations of the Taiwan Fair Trade Act. Subsequently, the TFTC has indicated the fine may be reduced to NTD609.1 million (approximately U.S. $18.9 million). In February, 2016, NEC TOKIN commenced an administrative suit in Taiwan, challenging the validity of the amount of the fine.

On March 29, 2016, the Japan Fair Trade Commission published an order by which NEC TOKIN was fined ¥127.2 million (approximately U.S. $1.2 million) for violation of the Japanese Antimonopoly Act. Payment of the fine is due by October 31, 2016.

The remaining governmental investigations are continuing at various stages.

On May 2, 2016, NEC TOKIN reached a preliminary settlement in two antitrust suits pending in the United States District Court, Northern District of California as In re: Capacitors Antitrust Litigation, No. 3:14-cv-03264-JD (the “Class Action Suits”). Pursuant to the terms of the settlement, in consideration of the release of NEC TOKIN and its subsidiaries (including NEC TOKIN America, Inc.) from claims asserted in the Class Action Suits, NEC TOKIN will pay an aggregate $37.3 million to a settlement class of direct purchasers of capacitors and a settlement class of indirect purchasers of capacitors. The preliminary settlement was followed by definitive settlement agreements as of July 15, 2016, with the same terms as the preliminary settlement except that the initial installment payment to each class plaintiff is to be made on July 29, 2016, while the terms of the subsequent payments are not changed from the ones of the preliminary settlement, i.e., due each year thereafter for three years, and a final, fifth payment due by December 31, 2019. Both settlements are subject to court approval.

Pursuant to the Stock Purchase Agreement, NEC is required to indemnify NEC TOKIN and/or KEC for any breaches by NEC TOKIN or NEC of certain representations, warranties and covenants in the Stock Purchase Agreement. NEC’s aggregate liability for indemnification claims is limited to $25.0 million. Accordingly, KEMET, under equity method accounting, has established an indemnity asset in the amount of $8.5 million (based upon our 34% economic interest in NEC

16

TOKIN). However, pursuant to the Stock Purchase Agreement, claims arising out of fraud or criminal conduct are not limited by the $25.0 million indemnification cap, and for such claims the claimant retains all remedies available in equity or at law.

As of June 30, 2016, NEC TOKIN's accrual for antitrust and civil litigation totaled $81.5 million. This amount includes the best estimate of losses which may result from the ongoing antitrust investigations and civil litigation. However, the actual outcomes could differ from what has been accrued.

Note 6. Segment and Geographic Information

The Company is organized into two business groups: Solid Capacitors and Film and Electrolytic.  The business groups are responsible for their respective manufacturing sites as well as their respective research and development efforts. The Company does not allocate indirect Selling, general and administrative (“SG&A”) or shared Research and development (“R&D”) expenses to the business groups. 

Solid Capacitors

Operating in nine manufacturing sites in the United States, Mexico and China, Solid Capacitors primarily produces tantalum, aluminum polymer, and ceramic capacitors which are sold globally.  Solid Capacitors also produces tantalum powder used in the production of tantalum capacitors and has a product innovation center in the United States.

Film and Electrolytic

Operating in ten manufacturing sites throughout Europe, Asia, and the United States, Film and Electrolytic primarily produces film, paper, and electrolytic capacitors which are sold globally. Film and Electrolytic also manufactures etched foils utilized as a core component in the manufacture of electrolytic capacitors. In addition, this business group has product innovation centers in the United Kingdom, Italy, Germany and Sweden.

The following table reflects each business group’s net sales, operating income (loss), depreciation and amortization expenses and sales by region for the quarters endedJune 30, 2016 and 2015 (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Net sales:
Solid Capacitors	$	141,944		$	139,677
Film and Electrolytic	42,991			47,913
	$	184,935		$	187,590
Operating income (loss) (1):
Solid Capacitors	$	35,079		$	30,033
Film and Electrolytic	(1,467		)	712
Corporate	(24,714		)	(29,502		)
	$	8,898		$	1,243
Depreciation and amortization expense:
Solid Capacitors	$	5,418		$	5,756
Film and Electrolytic	2,715			2,942
Corporate	1,303			1,219
	$	9,436		$	9,917

__________________

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(1)Restructuring charges included in Operating income (loss) are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
Restructuring charges:
Solid Capacitors	$	136	$	232
Film and Electrolytic	549		1,286
Corporate	3		306
	$	688	$	1,824

___________________

	Quarters Ended June 30,
	2016		2015
Sales by region:
North and South America (“Americas”)	$	55,101	$	56,034
Europe, Middle East, Africa (“EMEA”)	60,486		61,557
Asia and Pacific Rim (“APAC”)	69,348		69,999
	$	184,935	$	187,590

Note 7.  Defined Benefit Pension and Other Postretirement Benefit Plans

The Company sponsors six defined benefit pension plans in Europe, one plan in Singapore and two plans in Mexico.  In addition, the Company sponsors a post-retirement plan in the United States.  Costs recognized for benefit plans are recorded using estimated amounts which may change as actual costs for the fiscal year are determined.

The components of net periodic benefit (income) costs relating to the Company’s pension and other postretirement benefit plans are as follows for the quarters ended June 30, 2016 and 2015 (amounts in thousands):

	Pension						Post-retirement Benefit Plan
	Quarters Ended June 30,						Quarters Ended June 30,
	2016			2015			2016			2015
Net service cost	$	347		$	717		$	—		$	—
Interest cost	358			338			4			6
Expected return on net assets	(94		)	(105		)	—			—
Amortization:
Actuarial (gain) loss	115			197			(42		)	(40		)
Prior service cost	21			15			—			—
Total net periodic benefit (income) costs	$	747		$	1,162		$	(38	)	$	(34	)

In fiscal year 2017, the Company expects to contribute up to $1.7 million to the pension plans, $0.3 million of which has been contributed as of June 30, 2016.  For the postretirement benefit plan, the Company’s policy is to pay benefits as costs are incurred. 

Note 8. Stock-based Compensation

As of June 30, 2016, the 2014 Amendment and Restatement of the KEMET Corporation 2011 Omnibus Equity Incentive Plan (the “2011 Incentive Plan”), approved by the Company’s stockholders in 2014, is the only plan the Company has to issue equity based awards to executives and key employees. Upon adoption of the 2011 Incentive Plan, no further awards were permitted to be granted under the Company’s prior plans, including the 1992 Key Employee Stock Option Plan, the 1995 Executive Stock Option Plan, and the 2004 Long-Term Equity Incentive Plan (collectively, the “Prior Plans”).

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The 2011 Incentive Plan authorized the grant of up to 7.4 million shares of the Company's Common Stock, comprised of 6.6 million shares under the 2011 Incentive Plan and 0.8 million shares remaining from the Prior Plans and authorizes the Company to provide equity-based compensation in the form of:

• stock options, including incentive stock options, entitling the optionee to favorable tax treatment under Section 422 of the Code;

• stock appreciation rights;

• restricted stock and restricted stock units ("RSUs");

• other share-based awards; and,

• performance awards.

Options issued under these plans vest within one to three years and expire ten years from the grant date. The Company grants RSUs to members of the Board of Directors, the Chief Executive Officer and key management. Once vested and settled, RSUs are converted into restricted stock. For members of the Board of Directors and senior personnel, such restricted stock cannot be sold until 90 days after termination of service with the Company, or until the individual achieves the targeted ownership under the Company’s stock ownership guidelines, and only to the extent that such ownership level exceeds the target. Compensation expense is recognized over the respective vesting periods.

Historically, the Board of Directors of the Company has approved annual Long Term Incentive Plans (“LTIP”) which cover two year periods and are primarily based upon the achievement of an Adjusted EBITDA range for the two-year period. At the time of the award, the individual plans entitle the participants to receive cash or RSUs, or a combination of both as determined by the Company’s Board of Directors. The 2013/2014 LTIP, 2014/2015 LTIP, 2015/2016 LTIP, 2016/2017 LTIP, and 2017/2018 LTIP also awarded RSUs which vest over the course of three years from the anniversary of the establishment of the plan and are not subject to a performance metric. The Company assesses the likelihood of meeting the Adjusted EBITDA financial metric on a quarterly basis and adjusts compensation expense to match expectations. Any related liability is reflected in the line item “Accrued expenses” on the Condensed Consolidated Balance Sheets and any restricted stock unit commitment is reflected in the line item “Additional paid-in capital” on the Condensed Consolidated Balance Sheets.

On May 18, 2016, the Company granted RSUs under the 2017/2018 LTIP with a grant date fair value of $2.46 that vests as follows (amounts in thousands):

	Shares
May 18, 2017	202
May 18, 2018	202
May 18, 2019	209
Total shares granted	613

The following is the vesting schedule of RSUs under each respective LTIP, which vested during the three-month period endedJune 30, 2016 (shares in thousands):

	2016/2017	2015/2016	2014/2015
Time-based award vested	178	111	118
Performance-based award vested	—	103	73

Restricted stock activity, excluding the LTIP activity discussed above, for the three-month period endedJune 30, 2016 is as follows (amounts in thousands except fair value):

	Shares	Weighted- average Fair Value on Grant Date
Non-vested restricted stock at March 31, 2016	1,430	$	3.51
Granted	—
Vested	—
Forfeited	—
Non-vested restricted stock at June 30, 2016	1,430	$	3.51

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The compensation expense associated with stock-based compensation for the quarters ended June 30, 2016 and 2015 is recorded on the Condensed Consolidated Statements of Operations as follows (amounts in thousands):

	Quarter Ended June 30, 2016						Quarter Ended June 30, 2015
	Stock  Options		Restricted  Stock		LTIPs		Stock  Options		Restricted  Stock		LTIPs
Cost of sales	$	9	$	192	$	183	$	34	$	151	$	228
Selling, general and administrative expenses	10		347		427		42		343		458
Research and development	—		6		54		1		5		17
Total	$	19	$	545	$	664	$	77	$	499	$	703

In the “Operating activities” section of the Condensed Consolidated Statements of Cash Flows, stock-based compensation expense was treated as an adjustment to Net income (loss) for the quarters endedJune 30, 2016, and 2015. No stock options were exercised in the three-month periods endedJune 30, 2016 and June 30, 2015.

Note 9. Income Taxes

During the quarter ended June 30, 2016, the Company recognized $1.8 million of income tax expense from continuing operations which is comprised of $1.8 million of income tax expense related to foreign operations.

During the quarter ended June 30, 2015, the Company incurred $0.2 million of income tax benefit which is comprised of $0.6 million federal income tax benefit due to the reduction in the U.S. valuation allowance associated with the acquisition of IntelliData, Inc., $0.3 million income tax expense from continuing foreign operations and $0.1 million of state income tax expense.

There was no U.S. federal income tax benefit from net operating losses for the quarter ended June 30, 2016 and 2015 due to a valuation allowance recorded on deferred tax assets. 

Note 10. Basic and Diluted Net Income (Loss) Per Common Share

The following table presents basic earnings per share ("EPS") and diluted EPS (amounts in thousands, except per share data):

	Quarters Ended June 30,
	2016			2015
Numerator:
Net income (loss)	$	(12,205	)	$	(37,050	)
Denominator:
Weighted-average shares outstanding:
Basic	46,349			45,552
Assumed conversion of employee stock grants	—			—
Assumed conversion of warrants	—			—
Diluted	46,349			45,552
Net income (loss) per basic and diluted share	$	(0.26	)	$	(0.81	)

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Common stock equivalents that could potentially dilute net income (loss) per basic share in the future, but were not included in the computation of diluted earnings per share because the impact would have been anti-dilutive, are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016	2015
Assumed conversion of employee stock grants	2,330	2,303
Assumed conversion of warrants	4,853	6,015

Note 11: Derivatives

In fiscal year 2015, the Company began using certain derivative instruments (i.e., foreign exchange contracts) to reduce exposure to the volatility of foreign currencies impacting revenues and the costs of its products.

Certain operating expenses at the Company's Mexican facilities are paid in Mexican pesos. In order to hedge a portion of these forecasted cash flows, the Company purchases foreign exchange contracts, with terms generally less than twelve months, to buy Mexican pesos for periods and amounts consistent with underlying cash flow exposures. These contracts are designated as cash flow hedges at inception and monitored for effectiveness on a routine basis. There were $34.1 million in peso contracts (notional value) outstanding at June 30, 2016.

The Company formally documents all relationships between hedging instruments and hedged items, as well as risk management objectives and strategies for undertaking various hedge transactions.

The Company records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a net basis, since they are subject to master netting agreements. However, if the Company were to offset and record the asset and liability balances of its forward foreign currency exchange contracts on a gross basis, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current net presentation to the gross amounts as detailed in the following table.

The balance sheet classifications and fair value of derivative instruments as of June 30, 2016 are as follows (amounts in thousands):

	Fair Value of Derivative Instruments
	June 30, 2016
Balance Sheet Presentation	As Presented (1)		Offset			Gross
Prepaid and other current assets	$	—	$	(38	)	$	(38	)
Accrued expenses	1,232		38			1,270

______________________________________________________________________________

(1) Fair Value measured using Level 2 inputs by adjusting the market spot rate by forward points, based on the date of the contract. The spot rates and forward points used are based on an average rate from an actively traded market.

The impact on the Consolidated Statement of Operations for the three-month period endedJune 30, 2016 is as follows (amounts in thousands):

Impact of Foreign Exchange Contracts on Condensed Consolidated Statement of Operations
Statement Caption	Three-Month Period Ended June 30, 2016
Net Sales	$	—
Operating costs and expenses:
Cost of sales	$	(1,753	)
Total operating costs and expenses	$	(1,753	)
Operating income (loss)	$	(1,753	)

Unrealized gains and losses associated with the change in value of these financial instruments are recorded in AOCI. Changes in the derivatives' fair values are deferred and recorded as a component of AOCI until the underlying transaction is settled and recorded to the income statement. When the hedged item affects income, gains or losses are reclassified from AOCI

21

to the Consolidated Statement of Operations as Cost of sales for foreign exchange contracts to purchase such foreign currency. Any ineffectiveness, if material, in the Company's hedging relationships is recognized immediately as a loss, within the same income statement accounts as described above; to date, there has been no ineffectiveness. Changes in derivative balances impact the line items "Prepaid and other assets" and "Accrued Expenses" on the Consolidated Balance Sheets and Statements of Cash Flows.

Note 12. Concentrations of Risks

The Company sells to customers globally and, as the Company generally does not require collateral from its customers, on a monthly basis the Company evaluates customer account balances in order to assess the Company’s financial risks of collection.  One customer, TTI, Inc., an electronics distributor, accounted for over 10% of the Company’s net sales in the quarters endedJune 30, 2016 and 2015.  There were no accounts receivable balances from any customer exceeding 10% of gross accounts receivable as of June 30, 2016 and March 31, 2016.

Electronics distributors are an important distribution channel in the electronics industry and accounted for 46% and 43% of the Company’s net sales in the three-month periods ended June 30, 2016 and 2015, respectively.  As a result of the Company’s concentration of sales to electronics distributors, the Company may experience fluctuations in the Company’s operating results as electronics distributors experience fluctuations in end-market demand and/or adjust their inventory stocking levels. 

Note 13. 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):

22

Condensed Consolidating Balance Sheet

June 30, 2016

(Unaudited)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	640	$	22,573	$	29,725	$	—		$	52,938
Accounts receivable, net	—		33,716		55,369		—			89,085
Intercompany receivable	30,994		169,569		160,801		(361,364		)	—
Inventories, net	—		110,132		57,784		—			167,916
Prepaid expenses and other	3,325		16,833		13,731		(2,964		)	30,925
Deferred income taxes	—		—		—		—			—
Total current assets	34,959		352,823		317,410		(364,328		)	340,864
Property and equipment, net	244		90,226		141,218		—			231,688
Goodwill	—		40,294		—		—			40,294
Intangible assets, net	—		26,861		5,752		—			32,613
Investment in NEC TOKIN	—		15,172		—		—			15,172
Investments in subsidiaries	369,627		427,702		93,359		(890,688		)	—
Deferred income taxes	—		768		6,837		—			7,605
Other assets	—		2,144		600		—			2,744
Long-term intercompany receivable	65,822		40,397		1,089		(107,308		)	—
Total assets	$	470,652	$	996,387	$	566,265	$	(1,362,324	)	$	670,980
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—	$	—	$	—		$	—
Accounts payable	67		34,863		31,895		—			66,825
Intercompany payable	22,783		272,840		65,741		(361,364		)	—
Accrued expenses	7,320		13,042		21,536		—			41,898
Income taxes payable	—		2,988		192		(2,964		)	216
Total current liabilities	30,170		323,733		119,364		(364,328		)	108,939
Long-term debt, less current portion	352,087		19,881		14,000		—			385,968
Other non-current obligations	—		37,296		47,398		—			84,694
Deferred income taxes	—		2,242		742		—			2,984
Long-term intercompany payable	—		65,822		41,486		(107,308		)	—
Stockholders’ equity	88,395		547,413		343,275		(890,688		)	88,395
Total liabilities and stockholders’ equity	$	470,652	$	996,387	$	566,265	$	(1,362,324	)	$	670,980

23

Condensed Consolidating Balance Sheet (1)

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
Goodwill	—		40,294		—		—			40,294
Intangible assets, net	—		27,252		6,049		—			33,301
Investment in NEC TOKIN	—		20,334		—		—			20,334
Investments in subsidiaries	382,108		429,723		93,359		(905,190		)	—
Deferred income taxes	—		800		7,597		—			8,397
Other assets	—		2,452		616		—			3,068
Long-term intercompany receivable	67,500		41,428		1,088		(110,016		)	—
Total assets	$	484,038	$	991,426	$	575,443	$	(1,351,127	)	$	699,780
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	2,000	$	—	$	—	$	—		$	2,000
Accounts payable	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	351,952		19,881		14,000		—			385,833
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	$	484,038	$	991,426	$	575,443	$	(1,351,127	)	$	699,780

(1) Derived from audited financial statements.

24

Condensed Consolidating Statement of Operations

For the Quarter Ended June 30, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	213,513	$	170,550		$	(199,128	)	$	184,935
Operating costs and expenses:
Cost of sales	277			167,103		161,230			(186,198		)	142,412
Selling, general and administrative expenses	10,145			17,489		11,210			(12,930		)	25,914
Research and development	65			4,375		2,492			—			6,932
Restructuring charges	—			139		549			—			688
Net (gain) loss on sales and disposals of assets	—			388		(297		)	—			91
Total operating costs and expenses	10,487			189,494		175,184			(199,128		)	176,037
Operating income (loss)	(10,487		)	24,019		(4,634		)	—			8,898
Non-operating (income) expense:
Interest income	—			3		(6		)	—			(3		)
Interest expense	9,423			399		101			—			9,923
Change in value of NEC TOKIN option	—			12,000		—			—			12,000
Other (income) expense, net	(9,350		)	9,416		(2,460		)	—			(2,394		)
Equity in earnings of subsidiaries	1,645			—		—			(1,645		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(12,205		)	2,201		(2,269		)	1,645			(10,628		)
Income tax expense (benefit)	—			38		1,762			—			1,800
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,205		)	2,163		(4,031		)	1,645			(12,428		)
Equity income (loss) from NEC TOKIN	—			223		—			—			223
Net income (loss)	$	(12,205	)	$	2,386	$	(4,031	)	$	1,645		$	(12,205	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Quarter Ended June 30, 2016

(Unaudited)

Comprehensive income (loss) $ (13,883 ) $ (3,687 ) $ (8,794 ) $ 1,645 $ (24,719 )

25

Condensed Consolidating Statement of Operations

For the Quarter Ended June 30, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	221,770		$	181,600		$	(215,780	)	$	187,590
Operating costs and expenses:
Cost of sales	178			181,514			166,230			(200,045		)	147,877
Selling, general and administrative expenses	9,816			23,479			12,870			(15,735		)	30,430
Research and development	(119		)	4,384			2,009			—			6,274
Restructuring charges	—			515			1,309			—			1,824
Net (gain) loss on sales and disposals of assets	—			(353		)	295			—			(58		)
Total operating costs and expenses	9,875			209,539			182,713			(215,780		)	186,347
Operating income (loss)	(9,875		)	12,231			(1,113		)	—			1,243
Non-operating (income) expense:
Interest income	—			—			(3		)	—			(3		)
Interest expense	9,469			332			212			—			10,013
Change in value of NEC TOKIN option	—			29,200			—			—			29,200
Other (income) expense, net	(9,087		)	7,802			2,201			—			916
Equity in earnings of subsidiaries	26,793			—			—			(26,793		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(37,050		)	(25,103		)	(3,523		)	26,793			(38,883		)
Income tax expense (benefit)	—			(487		)	239			—			(248		)
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(37,050		)	(24,616		)	(3,762		)	26,793			(38,635		)
Equity income (loss) from NEC TOKIN	—			1,585			—			—			1,585
Net income (loss)	$	(37,050	)	$	(23,031	)	$	(3,762	)	$	26,793		$	(37,050	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

For the Quarter Ended June 30, 2015

(Unaudited)

Comprehensive income (loss) $ (34,501 ) $ (27,935 ) $ 706 $ 26,793 $ (34,937 )

26

Condensed

Consolidating Statement of Cash Flows

For the Quarter Ended June 30, 2016

(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	$	2,465		$	(13,651	)	$	8,150		$	—	$	(3,036	)
Investing activities:
Capital expenditures	—			15			(6,182		)	—		(6,167		)
Proceeds from sale of assets	—			—			—			—		—
Acquisitions, net of cash received	—			—			—			—		—
Net cash used in investing activities	—			15			(6,182		)	—		(6,167		)
Financing activities:
Proceeds from revolving line of credit	—			—			—			—		—
Payments of revolving line of credit	—			—			—			—		—
Payments of long-term debt	(1,870		)	—			—			—		(1,870		)
Purchase of treasury stock	(595		)	—			—			—		(595		)
Net cash provided by (used in) financing activities	(2,465		)	—			—			—		(2,465		)
Net increase (decrease) in cash and cash equivalents	—			(13,636		)	1,968			—		(11,668		)
Effect of foreign currency fluctuations on cash	—			—			(398		)	—		(398		)
Cash and cash equivalents at beginning of fiscal period	640			36,209			28,155			—		65,004
Cash and cash equivalents at end of fiscal period	$	640		$	22,573		$	29,725		$	—	$	52,938

27

Condensed Consolidating Statements of Cash Flows

For the Quarter Ended June 30, 2015

(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	$	544		$	(17,034	)	$	(5,034	)	$	—	$	(21,524	)
Investing activities:
Capital expenditures	—			(3,912		)	(1,861		)	—		(5,773		)
Acquisitions, net of cash received	—			(2,892		)	—			—		(2,892		)
Net cash used in investing activities	—			(6,804		)	(1,861		)	—		(8,665		)
Financing activities:
Proceeds from revolving line of credit	—			6,000			2,000			—		8,000
Payments of revolving line of credit	—			(2,500		)	—			—		(2,500		)
Payments of long-term debt	—			—			(481		)	—		(481		)
Purchase of treasury stock	(544		)	—			—			—		(544		)
Net cash provided by (used in) financing activities	(544		)	3,500			1,519			—		4,475
Net increase (decrease) in cash and cash equivalents	—			(20,338		)	(5,376		)	—		(25,714		)
Effect of foreign currency fluctuations on cash	—			—			411			—		411
Cash and cash equivalents at beginning of fiscal period	640			33,094			22,628			—		56,362
Cash and cash equivalents at end of fiscal period	$	640		$	12,756		$	17,663		$	—	$	31,059

28

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our forward-looking statements. Words such as “expects,” “anticipates,” “believes,” “estimates” or other similar expressions and future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Readers of this report should not rely solely on the forward-looking statements and should consider all uncertainties and risks throughout this report as well as those discussed under Part I, Item 1A Risk Factors, of the Company’s 2016 Annual Report. The statements are representative only as of the date they are made, and we undertake no obligation to update any forward-looking statement.

All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements. We face risks that are inherent in the businesses and the market places in which we operate. While management believes these forward-looking statements are accurate and reasonable, uncertainties, risks and factors, including those described below, could cause actual results to differ materially from those reflected in the forward-looking statements.

Factors that may cause actual outcomes 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 the 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) possible acquisition of NEC TOKIN may not achieve all of the anticipated results; (xii) our business could be negatively impacted by increased regulatory scrutiny and litigation; (xiii) inability to attract, train and retain effective employees and management; (xiv) inability to develop innovative products to maintain customer relationships and offset potential price erosion in older products; (xv) exposure to claims alleging product defects; (xvi) the impact of laws and regulations that apply to our business, including those relating to environmental matters; (xvii) the impact of international laws relating to trade, export controls and foreign corrupt practices; (xviii) volatility of financial and credit markets affecting our access to capital; (xix) the need to reduce the total costs of our products to remain competitive; (xx) potential limitation on the use of net operating losses to offset possible future taxable income; (xxi) restrictions in our debt agreements that limit our flexibility in operating our business; (xxii) failure of our information technology systems to function properly or our failure to control unauthorized access to our systems may cause business disruptions; (xxiii) 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; and (xxiv) fluctuation in distributor sales could adversely affect our results of operations.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and could cause actual results to differ materially from those included, contemplated or implied by the forward-looking statements made in this report, and the reader should not consider the above list of factors to be a complete set of all potential risks or uncertainties. 

Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations are based on the unaudited condensed consolidated financial statements included herein. Our significant accounting policies are described in Note 1 to the consolidated financial statements in our 2016 Annual Report. Our critical accounting policies are described under the caption “Critical Accounting Policies” in Item 7 of our 2016 Annual Report.

Long-Lived Assets

Due to the operating loss incurred by Film & Electrolytic, the Company tested its long-lived assets for impairment as of June 30, 2016 and concluded that they were not impaired. Tests for the recoverability of a long-lived asset to be held and used are performed by comparing the carrying amount of the long-lived asset to the sum of the estimated future net undiscounted cash flows expected to be generated by the asset group. In estimating the future undiscounted cash flows, we use

29

future projections of cash flows directly associated with, and which are expected to arise as a direct result of, the use and hypothetical disposal (salvage value) of the asset group. These assumptions primarily include the average asset useful life and projections of sales and cost of sales over these asset lives. The Company will monitor the Film and Electrolytic long-lived assets in future periods as material changes in certain assumptions could have a material effect on the estimated future undiscounted cash flows expected to be generated by the asset. This, in turn, could result in Film and Electrolytic not passing step 1 of the impairment test which would require the Company to perform a discounted cash flow analysis to determine the impairment amount (if any).

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates, assumptions, and judgments based on historical data and other assumptions that management believes are reasonable. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. In addition, they affect the reported amounts of revenues and expenses during the reporting period.

Our judgments are based on management’s assessment as to the effect certain estimates, assumptions, future trends or events may have on the financial condition and results of operations reported in the unaudited condensed consolidated financial statements. It is important that readers of these unaudited financial statements understand that actual results could differ from these estimates, assumptions, and judgments.

Business Overview

KEMET is a leading global manufacturer of a wide variety of capacitors. We compete in the passive electronic component industry, specifically multilayer ceramic, tantalum, film and aluminum (solid & electrolytic) capacitors. Product offerings include surface mount, which are attached directly to the circuit board; leaded capacitors, which are attached to the circuit board using lead wires; and chassis-mount and other pin-through-hole board-mount capacitors, which utilize attachment methods such as screw terminal and snap-in. Capacitors are electronic components that store, filter, and regulate electrical energy and current flow. As an essential passive component used in nearly all circuit boards, capacitors are typically used for coupling, decoupling, filtering, oscillating and wave shaping and are found in communication systems, servers, personal computers, tablets, cellular phones, automotive electronic systems, defense and aerospace systems, consumer electronics, power management systems and many other electronic devices and systems (basically anything that plugs in or has a battery).

Manufacturing a broad line of tantalum, multilayer ceramic, solid and electrolytic aluminum and film and paper capacitors, KEMET's product line consists of nearly 5 million distinct part configurations distinguished by various attributes, such as dielectric (or insulating) material, configuration, encapsulation, capacitance level and tolerance, voltage, operating temperature, performance characteristics and packaging. Because most of our customers have multiple capacitance requirements, often within each of their products, our broad product offering allows us to meet the majority of their needs independent of application and end use.

KEMET operates nineteen production facilities in Europe, North America, and Asia, and employs approximately 8,800 employees worldwide. Commodity manufacturing has been substantially relocated to our lower-cost manufacturing facilities in Mexico, China and Europe. Production remaining in the United States focuses primarily on early-stage manufacturing of new products and specialty products for which customers are predominantly located in North America.

Our products are sold into a wide range of different end markets, including computing, industrial, telecommunications, transportation, consumer, defense and healthcare across all geographic regions. No single end market industry accounted for more than 30% of net sales although, one customer, a distributor, accounted for more than 10% of net sales in the three-month period ended June 30, 2016.  During the three-month period ended June 30, 2016 we introduced 1,806 new products of which 609 were first to market. In addition, we continue to focus on specialty products which accounted for 39.8% of our revenue over this period.

We believe the long-term demand for capacitors will grow on a regional and global basis due to a variety of factors, including increasing demand for and complexity of electronic products, growing demand for technology in emerging markets and the ongoing development of new solutions for energy generation and conservation.

We are organized into two business groups: Solid Capacitors business group (“Solid Capacitors”) and the Film and Electrolytic business group ("Film and Electrolytic”).  The business groups are responsible for their respective manufacturing sites as well as all related research and development efforts. Sales, marketing and corporate finance functions are shared by each of the business groups.  

30

Recent Developments and Trends

The following items are reflected in the financial statements for the quarter ended June 30, 2016:

Equity Investment

In the quarter ended June 30, 2016 we incurred an equity income related to our 34% economic interest in NEC TOKIN of $0.2 million.

KEC's First and Second Call Options (as defined in Note 5, "Investment in NEC TOKIN") to purchase additional capital stock of NEC TOKIN expired on April 30, 2015 without being exercised. Through May 31, 2018, NEC Corporation of Japan may exercise its Put Option, provided that KEC's payment of the Put Option price is permitted under the 10.5% Senior Notes and Loan and Security Agreement. The Company has marked the option to fair value and in the quarter ended June 30, 2016 recognized a $12.0 million loss which was included on the line item “Change in Value of the NEC TOKIN option” in the Condensed Consolidated Statement of Operations. The line item "Other non-current obligations" on the Condensed Consolidated Balance Sheets includes $32.6 million as of June 30, 2016 related to the Put Option.

Global Economy

In June 2016, the United Kingdom voted in a referendum to exit the European Union, commonly referred to as “Brexit”. As a result of the referendum, the global markets and currencies have been subject to volatility, including as a result of a decline in the value of the U.K. pound sterling as compared to the U.S. dollar. We have performed a preliminary assessment of the possible impact of Brexit to our consolidated financial statements. We believe that the uncertainty surrounding Brexit is not a material risk to our consolidated financial statements, however, the macroeconomic impact on our results of operations from this vote remains unknown and we will continue to monitor the impact.

Outlook

For the second quarter of fiscal year 2017, we expect net sales to be within the $185 million to $190 million range, the possibility of a slight improvement in gross margin as a percentage of net sales and SG&A expenses are expected to be in the range of $22.5 million to $23.0 million.

31

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

Consolidated Comparison of the quarter ended June 30, 2016 with the quarter ended June 30, 2015

The following table sets forth the Condensed Consolidated Statements of Operations for the periods indicated (amounts in thousands):

	Quarters Ended June 30,
	2016			% to Total Sales		2015			% to Total Sales
Net sales	$	184,935				$	187,590
Gross margin	42,523			23.0	%	39,713			21.2	%
Selling, general and administrative expenses	25,914			14.0	%	30,430			16.2	%
Research and development	6,932			3.7	%	6,274			3.3	%
Restructuring charges	688			0.4	%	1,824			1.0	%
Net (gain) loss on sales and disposals of assets	91			n.m.		(58		)	n.m.
Operating income (loss)	8,898			4.8	%	1,243			0.7	%
Interest income	(3		)	n.m.		(3		)	n.m.
Interest expense	9,923			5.4	%	10,013			5.3	%
Change in value of NEC TOKIN option	12,000			6.5	%	29,200			15.6	%
Other (income) expense, net	(2,394		)	(1.3	)%	916			0.5	%
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(10,628		)	(5.7	)%	(38,883		)	(20.7	)%
Income tax expense (benefit)	1,800			1.0	%	(248		)	(0.1	)%
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,428		)	(6.7	)%	(38,635		)	(20.6	)%
Equity income (loss) from NEC TOKIN	223			0.1	%	1,585			0.8	%
Net income (loss)	$	(12,205	)	(6.6	)%	$	(37,050	)	(19.8	)%

n.m. - not meaningful

Net Sales

Net sales for the quarter ended June 30, 2016 of $184.9 milliondecreased$2.7 million or 1.4% from $187.6 million for the quarter ended June 30, 2015. Film and Electrolytic net sales decreased $4.9 million and Solid Capacitor net sales increased $2.3 million. For Film and Electrolytic, the decrease in net sales was primarily related to a decrease in net sales in the Europe Middle East and Africa ("EMEA") and North America and South America ("Americas") regions due to a decline in market conditions and declines within the Original Equipment Manufacturers ("OEM") channel corresponding with the relocation of our manufacturing line from Germany to Macedonia. The relocation and product qualification/customer approval was completed in early July 2016. Partially offsetting this decrease was a favorable impact of $0.7 million from foreign currency exchange primarily due to the change in the value of the Euro compared to the U.S. dollar for the quarter ended June 30, 2016 compared to the quarter ended June 30, 2015. The increase in Solid Capacitors net sales is primarily related to an increase in net sales in the Asia and Pacific Rim (“APAC”) and EMEA regions within the distributor channel. In addition, Solid Capacitor net sales were favorably impacted by $0.8 million from foreign currency exchange primarily due to the change in the value of the Euro compared to the U.S. dollar for the quarter ended June 30, 2016 compared to the quarter ended June 30, 2015.

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The following table reflects the percentage of net sales by region for the quarters ended June 30, 2016 and 2015:

	Quarters Ended June 30,
	2016		2015
Americas	30	%	30	%
EMEA	33	%	33	%
APAC	37	%	37	%
	100	%	100	%

The following table reflects the percentage of net sales by channel for the quarters ended June 30, 2016 and 2015:

	Quarters Ended June 30,
	2016		2015
Distributors	46	%	43	%
Electronics Manufacturing Services Providers ("EMS")	21	%	21	%
OEM	33	%	36	%
	100	%	100	%

Gross Margin

Gross margin for the quarter ended June 30, 2016 of $42.5 million (23.0% of net sales) increased $2.8 million or 7.1% from $39.7 million (21.2% of net sales) for the quarter ended June 30, 2015. Solid Capacitors gross margin increased $5.1 million or 14.1% primarily due to an increase in net sales and continued variable margin improvement due to our restructuring efforts, vertical integration, the favorable foreign currency impact on manufacturing costs, manufacturing process improvements as a result of our cost reduction activities and our partnership with NEC TOKIN. Film and Electrolytic gross margin decreased $2.3 million or 58.9% due to a decrease in net sales and unfavorable shift in product mix linked to our lower OEM sales volumes.

Selling, general and administrative expenses ("SG&A")

SG&A expenses of $25.9 million (14.0% of net sales) for the quarter ended June 30, 2016decreased$4.5 million or 14.8% from $30.4 million (16.2% of net sales) for the quarter ended June 30, 2015. The decrease is attributable primarily to the following items: a $2.6 million decrease in ERP integration and technology transition costs, a $0.9 million decrease related to the change in the allocation of IT and other costs between SG&A and cost of goods sold following an internal usage study, a $0.4 million decrease in training and development costs, a $0.3 million decrease in non-income-related taxes, a $0.3 million decrease in building and equipment rent expense, and a $0.2 million decrease in professional fees. Partially offsetting these decreases was a $0.4 million increase in payroll-related expenses and benefits.

Research and development ("R&D")

R&D expenses of $6.9 million (3.7% of net sales) for the quarter ended June 30, 2016increased$0.7 million or 10.5% compared to $6.3 million (3.3% of net sales) for the quarter ended June 30, 2015. The increase is primarily related to a $0.5 million increase in payroll-related expenses and benefits.

Restructuring charges

Restructuring charges of $0.7 million for the quarter ended June 30, 2016decreased$1.1 million or 62.3% from $1.8 million for the quarter ended June 30, 2015.  

The Company incurred $0.7 million in restructuring charges in the quarter ended June 30, 2016 including $0.6 million in personnel reduction costs and $41.0 thousand in manufacturing relocation costs. The personnel reduction costs of $0.6 million consist primarily of $0.3 million for overhead reductions in Sweden, $0.2 millionrelated to manufacturing headcount reductions in Europe (primarily Italy and Landsberg, Germany) corresponding with the relocation of certain production lines to lower cost regions, and $0.1 millionrelated to the consolidation of certain Solid Capacitor manufacturing in Matamoros, Mexico.     The manufacturing relocation costs of $41 thousand consist primarily of transfers of Film and Electrolytic production lines to lower cost regions.

33

The Company incurred $1.8 million in restructuring charges in the quarter ended June 30, 2015 including $1.5 million of personnel reduction costs. The personnel reduction costs of $1.5 million consist of the following: $0.6 million related a headcount reduction in Suzhou, China for the Film & Electrolytic production line transfer from Suzhou, China to Anting, China, $0.5 million for planned headcount reductions in Europe (primarily Landsberg, Germany), $0.2 million for headcount reductions in Matamoros, Mexico related to the relocation of certain Solid Capacitor manufacturing from Matamoros, Mexico to Victoria, Mexico, and $0.2 million for headcount reductions related to the outsourcing of the Company's information technology function and overhead reductions in North America and Europe. The Company also incurred $0.3 million of manufacturing relocation costs for transfers of Film and Electrolytic production lines.

Operating income (loss)

Operating income of $8.9 million for the quarter ended June 30, 2016improved$7.7 million from operating income of $1.2 million for the quarter ended June 30, 2015.  The increase in operating income was primarily attributable to a $4.5 milliondecrease in SG&A expenses, a $2.8 millionimprovement in gross margin and a $1.1 milliondecrease in restructuring charges. These improvements to operating income were partially offset by a $0.7 millionincrease in R&D expenses.

Non-operating (income) expense, net

Non-operating (income) expense, net was a net expense of $19.5 million for the quarter ended June 30, 2016 compared to a net expense of $40.1 million for the quarter ended June 30, 2015. The change is primarily attributable to a $12.0 million loss from the change in value of the NEC TOKIN option during the quarter ended June 30, 2016 compared to a $29.2 million loss from the change in value of the NEC TOKIN option during the quarter ended June 30, 2015. During the quarter ended June 30, 2016, we recognized a $1.9 million foreign currency exchange gain compared to a $1.0 million foreign currency exchange loss for the quarter ended June 30, 2015, which was due primarily to the change in the value of the Euro and Mexican Peso compared to the U.S. dollar.

Income taxes

Income tax expense from continuing operations of $1.8 million for the quarter ended June 30, 2016increased$2.0 million compared to income tax benefit from continuing operations of $0.2 million for the quarter ended June 30, 2015. During the quarter ended June 30, 2016, the income tax expense from continuing operations was comprised of a $1.8 million income tax expense from foreign operations.  During the quarter ended June 30, 2015, the Company incurred $0.2 million of income tax benefit which was comprised of a $0.6 million federal income tax benefit due to the reduction in the U.S. valuation allowance associated with the acquisition of IntelliData, Inc. ("IntelliData"), $0.3 million income tax expense from continuing foreign operations and $0.1 million of state income tax expense.

There was no U.S. federal income tax benefit from net operating losses for the quarters ended June 30, 2016 and 2015 due to a valuation allowance recorded on deferred tax assets. 

Equity income (loss) from NEC TOKIN

Equity income related to our 34% economic interest in NEC TOKIN of $0.2 million for the quarter ended June 30, 2016 reflects a $1.4 million unfavorable change compared to equity income of $1.6 million for the quarter ended June 30, 2015. The change is comprised of the following: a $0.5 million loss on foreign currency forward contract, a $0.2 million unfavorable change in the foreign exchange rates and a $0.4 million increase in step up basis adjustment amortization. In addition, there was a receipt of $1.0 million from a legal settlement in Hong Kong for the quarter ended June 30, 2015 and no similar receipt in the quarter ended June 30, 2016. Partially offsetting these unfavorable items were: a $0.3 million decrease in legal expenses relating to antitrust lawsuits and a $0.4 million increase in deferred income tax benefits.

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Business Groups Comparison of the Quarter Ended June 30, 2016 with the Quarter Ended June 30, 2015

The following table reflects each business group’s net sales and operating income (loss), for the quarters ended June 30, 2016 and 2015 (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Net sales:
Solid Capacitors	$	141,944		$	139,677
Film and Electrolytic	42,991			47,913
Total	$	184,935		$	187,590
Operating income (loss):
Solid Capacitors	$	35,079		$	30,033
Film and Electrolytic	(1,467		)	712
Corporate	(24,714		)	(29,502		)
Total	$	8,898		$	1,243

Solid Capacitors

The following table sets forth net sales, operating income (loss), and operating income (loss) as a percentage of net sales for our Solid Capacitors business group for the quarters ended June 30, 2016 and 2015 (amounts in thousands, except percentages):

	Quarters Ended June 30,
	2016			2015
	Amount		% to Net Sales	Amount		% to Net Sales
Tantalum product line net sales	$	83,869		$	87,004
Ceramic product line net sales	58,075			52,673
Solid Capacitors net sales	$	141,944		$	139,677
Solid Capacitors operating income (loss)	$	35,079	24.7%	$	30,033	21.5%

Net sales

Solid Capacitors net sales of $141.9 million for the quarter ended June 30, 2016increased$2.3 million or 1.6% from $139.7 million for the quarter ended June 30, 2015. The increase was driven by an increase in net sales in the APAC and EMEA regions within the distributor channel. The increase in Distributor sales was partially offset by normal erosion in market prices and changes in sales mix in the Americas and EMEA. The increase in net sales included a $0.8 million favorable impact from foreign currency exchange due primarily to the change in the value of the Euro compared to the U.S. dollar.

A summary of Solid Capacitors net sales by channel is shown below (amounts in thousands):

	Quarters Ended June 30,				Change in Net Sales
	2016		2015
Distributors	$	67,073	$	61,128	$	5,945
EMS	34,859		35,193		(334		)
OEM	40,012		43,356		(3,344		)
Solid Capacitors net sales	$	141,944	$	139,677	$	2,267

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Segment operating income (loss)

Segment operating income of $35.1 million for the quarter ended June 30, 2016improved $5.1 million or 16.8% from $30.0 million in the quarter ended June 30, 2015. The increase in operating income is a result of a $5.1 million improvement in gross margin. Improvements in gross margin are driven by an increase in net sales and continued variable margin improvement due to our restructuring efforts, vertical integration, the favorable foreign currency impact on manufacturing costs, and manufacturing process improvements as a result of our cost reduction activities and our partnership with NEC TOKIN.

Film and Electrolytic

The following table sets forth net sales, operating income (loss), and operating income (loss) as a percentage of net sales for our Film and Electrolytic business group for the quarters ended June 30, 2016 and 2015 (amounts in thousands, except percentages):

	Quarters Ended June 30,
	2016					2015
	Amount			% to Net Sales		Amount		% to Net Sales
Net sales	$	42,991				$	47,913
Operating income (loss)	(1,467		)	(3.4	)%	712		1.5	%

Net sales

Film and Electrolytic net sales of $43.0 million for the quarter ended June 30, 2016decreased$4.9 million or 10.3% from $47.9 million for the quarter ended June 30, 2015.  The decrease in net sales is due to a decrease in net sales in the EMEA and Americas regions of $5.6 million due to a decline in market conditions and declines within the OEM channel corresponding with the relocation of our manufacturing line from Germany to Macedonia. This decrease was partially offset by a $0.7 million favorable impact from foreign currency exchange primarily due to the change in the value of the Euro compared to the U.S. dollar.

Segment operating income (loss)

Segment operating loss of $1.5 million for the quarter ended June 30, 2016declined$2.2 million from segment operating income of $0.7 million in the quarter ended June 30, 2015 and segment operating income (loss) as a percentage of net sales declined490 basis points between the two periods. The decrease in segment operating income (loss) was driven by lower revenue as well as unfavorable shift in product mix linked to our lower OEM sales volumes. During the quarter ended June 30, 2016, we had an increase of $0.3 million in R&D expenses and an increase of $0.1 million in SG&A expenses when compared to the quarter ended June 30, 2015. In addition, the quarter ended June 30, 2015 included a $0.2 million gain on the disposal of fixed assets and there was no such gain during the quarter ended June 30, 2016. Partially offsetting these increases was a $0.7 million decrease in restructuring charges during the quarter ended June 30, 2016 when compared to the quarter ended June 30, 2015.

Liquidity and Capital Resources

Our liquidity needs arise from working capital requirements, capital expenditures, acquisitions, principal and interest payments on debt, and costs associated with the implementation of our restructuring plans. Historically, our cash needs have been met by cash flows from operations, borrowings under our loan agreements, and existing cash balances.

10.5% Senior Notes

On May 10, 2016, the Company repurchased and retired $2.0 million of its 10.5% Senior Notes. As of June 30, 2016 and March 31, 2016, we had outstanding $353.0 million and $355.0 million, respectively in aggregate principal amount of the Company’s 10.5% Senior Notes due May 1, 2018 (the “10.5% Senior Notes”). 

Revolving Line of Credit

On May 2, 2016, the Loan and Security Agreement dated September 30, 2010, as amended, by and among KEMET Electronics Corporation ("KEC"), KEMET Electronics Marketing (S) Pte. Ltd., KEMET Foil Manufacturing, LLC (“KEMET

36

Foil”), KEMET Blue Powder Corporation (“KEMET Blue Powder”), The Forest Electric Company and the financial institutions party thereto (the “Loan and Security Agreement”), was amended and, as a result, the revolving credit facility has increased to $65.0 million. As of June 30, 2016, the Company had the following activity and resulting balances under its revolving line of credit (amounts in thousands, excluding percentages):

	As of March 31, 2016		Three-Month Period Ended June 30, 2016				As of June 30, 2016
	Outstanding Borrowings		Additional Borrowings		Repayments		Outstanding Borrowings		Rate (1) (2)		Due Date
U.S. Facility	$	19,881	$	—	$	—	$	19,881	4.750	%	December 19, 2019
Singapore Facility
Singapore Borrowing 1 (3)	12,000		—		—		12,000		3.250	%	August 22, 2016
Singapore Borrowing 2 (3)	2,000		—		—		2,000		3.250	%	October 11, 2016
Total Facilities	$	33,881	$	—	$	—	$	33,881

______________________________________________________________________________

(1) For U.S. borrowings, Base Rate plus 1.50%, as defined in the Loan and Security Agreement.

(2) For Singapore borrowings, London Interbank Offer Rate ("LIBOR"), plus a spread of 2.50% as of June 30, 2016.

(3) The Company has the intent and ability to extend the due date on the Singapore borrowings beyond one year.

These were the only borrowings under the revolving line of credit as of June 30, 2016.

Short-term Liquidity

Cash and cash equivalents as of June 30, 2016 of $52.9 milliondecreased$12.1 million from $65.0 million as of March 31, 2016. Our net working capital (current assets less current liabilities) as of June 30, 2016 was $231.9 million compared to $228.8 million as of March 31, 2016. Cash and cash equivalents held by our foreign subsidiaries totaled $29.7 million and $28.2 million at June 30, 2016 and March 31, 2016, respectively. Our operating income outside the U.S. is no longer deemed to be permanently reinvested in foreign jurisdictions. As a result, we set up a deferred tax liability as of March 31, 2015 on the undistributed foreign earnings which was offset by a reduction in the valuation allowance on our deferred tax assets. However, we currently do not intend nor foresee a need to repatriate cash and cash equivalents held by foreign subsidiaries. If these funds are needed for our operations in the U.S., we may be required to accrue U.S. withholding taxes on the distributed foreign earnings.

Based on our current operating plans, we believe domestic cash and cash equivalents are sufficient to fund our operating requirements for the next twelve months, including $38.4 million in interest payments, $20.0 million to $22.0 million in expected capital expenditures and $1.1 million in restructuring payments. As of June 30, 2016, our borrowing capacity under the revolving line of credit was $31.1 million.  The revolving line of credit expires on December 19, 2019. The borrowing capacity has increased primarily due to a $5.0 million increase in the credit facility noted above.

Should we require more capital than is generated by our operations or available through our revolving line of credit, we could attempt to raise capital through debt issuances or the sale of certain non-core assets. However, due to market conditions beyond our control, there can be no assurance that we would be able to complete such an offering or sale transaction. The incurrence of additional debt may result in increased interest expense.

Cash and cash equivalents decreased$12.1 million for the three-month period ended June 30, 2016, as compared with a decrease of $25.3 million during the three-month period ended June 30, 2015.

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The following table provides a summary of cash flows for the quarters presented (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Net cash provided by (used in) operating activities	$	(3,036	)	$	(21,524	)
Net cash provided by (used in) investing activities	(6,167		)	(8,665		)
Net cash provided by (used in) financing activities	(2,465		)	4,475
Effect of foreign currency fluctuations on cash	(398		)	411
Net increase (decrease) in cash and cash equivalents	$	(12,066	)	$	(25,303	)

Operating

Cash used in operating activities during the three-month period ended June 30, 2016 of $3.0 million decreased $18.5 million compared to cash used in operating activities of $21.5 million in the three-month period ended June 30, 2015. This favorable change in operating cash was primarily a result of a $24.8 million smaller net loss for the three-month period ended June 30, 2016 compared to the three-month period ended June 30, 2015. This was partially offset by a $17.2 million decrease in the non-cash loss related to the change in value of the NEC TOKIN option.

Also, contributing to the positive changes in cash was a $17.8 million improvement in cash from operating assets primarily due to an increase in inventory of $0.5 million in the three-month period ended June 30, 2016 compared to a $10.0 million increase in the three-month period ended June 30, 2015. The increase in inventory as of June 30, 2015 was primarily related to an increase of Film and Electrolytic's inventory in preparation for the temporary shut-down of production lines to relocate the production lines. Additionally, in the three-month period ended June 30, 2016, a decrease in accounts receivable generated $3.8 million compared to the three-month period ended June 30, 2015, during which accounts receivable increased by $4.9 million.

    Also, partially offsetting the positive changes noted above were changes in operating liabilities that resulted in a $10.4 milliondecrease in cash during the three-month period ended June 30, 2016 when compared to the three-month period ended June 30, 2015. The $10.4 milliondecrease in cash includes a $4.6 million reduction of accrued expenses, which was primarily related to a $5.0 million increase in accrued expenses during the three-month period ended June 30, 2015 for the deferred portion of our IntelliData acquisition and also derivative liabilities. In addition, the three-month period ended June 30, 2016 included pension contributions of $1.4 million. The remainder of the decrease in cash resulting from the change in operating liabilities is due to timing of supplier payments.

Investing

Cash used in investing activities during the three-month period ended June 30, 2016 of $6.2 million reflects a $2.5 million decrease compared to cash used in investing activities of $8.7 million in the three-month period ended June 30, 2015. The improvement is primarily related to cash used for the acquisition of IntelliData of $2.9 million in the three-month period ended June 30, 2015 compared to no acquisitions in the three-month period ended June 30, 2016.

Cash used in investing activities during the three-month period ended June 30, 2016 include capital expenditures of $6.2 million primarily related to expanding capacity at our manufacturing facilities in Evora, Portugal; Suzhou, China; Simpsonville, South Carolina; and Matamoros, Mexico as well as information technology projects in Simpsonville, South Carolina and equipment upgrades in Monterrey, Mexico.

In comparison, cash used in investing activities during the three-month period ended June 30, 2015 included $5.8 million used for capital expenditures primarily related to expanding capacity at our manufacturing facilities in Gränna, Sweden; Suzhou, China; and information technology projects in Simpsonville, South Carolina.

Financing

Cash used in financing activities during the three-month period ended June 30, 2016 of $2.5 million reflects a $6.9 million change from cash provided by financing activities of $4.5 million in the three-month period ended June 30, 2015, primarily due to a decrease in net proceeds from the revolving line of credit of $5.5 million in in the three-month period ended June 30, 2015 compared to no borrowings in the three-month period endedJune 30, 2016.

During the three-month period ended June 30, 2016, we used $1.9 million to retire $2.0 million face value of our 10.5% Senior Notes and also used $0.6 million for the purchase of treasury stock related to shares withheld to pay taxes due

38

upon the vesting of restricted stock. In comparison, during the three-month period ended June 30, 2015, we used $0.5 million for foreign subsidiary debt payments and $0.5 million for the purchase of treasury stock, again related to shares withheld to pay taxes due upon vesting of restricted stock.

Commitments

With the exception of our purchase commitments, our commitments have not materially changed from those disclosed in the Company’s 2016 Annual Report. Due to a delay in one of our contracts, an update to our purchase commitments is as follows (amounts in thousands):

			Payment Due by Period
Contractual obligations	Total		Year 1		Years 2 - 3		Years 4 - 5		More than 5 years
Purchase commitments	$	2,618	$	1,902	$	716	$	—	$	—

Non-U.S. Generally Accepted Accounting Principles ("GAAP") Financial Measures

To complement our Condensed Consolidated Statements of Operations and Cash Flows, we use non-U.S. GAAP financial measures of Adjusted gross margin, Adjusted operating income (loss), Adjusted net income (loss) and Adjusted EBITDA.  Management believes that Adjusted gross margin, Adjusted operating income (loss), Adjusted net income (loss) and Adjusted EBITDA are complements to U.S. GAAP amounts and such measures are useful to investors. The presentation of these non-U.S. GAAP measures is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity.

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

	Quarters Ended June 30,
	2016			2015
Net sales	$	184,935		$	187,590
Cost of sales	142,412			147,877
Gross margin (U.S. GAAP)	$	42,523		$	39,713
Gross margin as a % of net sales	23.0		%	21.2		%
Adjustments:
Plant start-up costs	308			195
Stock-based compensation expense	384			413
Adjusted gross margin (non-U.S. GAAP)	$	43,215		$	40,321
Adjusted gross margin as a % of net sales	23.4		%	21.5		%

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The following table provides reconciliation from U.S. GAAP Operating income (loss) to non-U.S. GAAP Adjusted operating income (loss) (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
Operating income (loss) (U.S. GAAP)	$	8,898	$	1,243
Adjustments:
Restructuring charges	688		1,824
Net (gain) loss on sales and disposals of assets	91		(58		)
Stock-based compensation expense	1,228		1,279
Legal expenses related to antitrust class actions	1,175		718
ERP integration/IT transition costs	1,768		4,369
Plant start-up costs	308		195
Pension plan adjustment	—		312
NEC TOKIN investment-related expenses	206		224
Adjusted operating income (loss) (non-U.S. GAAP)	$	14,362	$	10,106

The following table provides reconciliation from U.S. GAAP Net income (loss) to non-U.S. GAAP Adjusted net income (loss) (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Net income (loss) (U.S. GAAP)	$	(12,205	)	$	(37,050	)
Adjustments:
Restructuring charges	688			1,824
Equity (income) loss from NEC TOKIN	(223		)	(1,585		)
Net (gain) loss on sales and disposals of assets	91			(58		)
Stock-based compensation expense	1,228			1,279
Legal expenses related to antitrust class actions	1,175			718
ERP integration/IT transition costs	1,768			4,369
Change in value of NEC TOKIN option	12,000			29,200
Plant start-up costs	308			195
Net foreign exchange (gain) loss	(1,920		)	1,049
NEC TOKIN investment-related expenses	206			224
Amortization included in interest expense	190			220
Pension plan adjustment	—			312
Income tax effect of non-U.S. GAAP adjustments (1)	—			(37		)
Adjusted net income (loss) (non-U.S. GAAP)	$	3,306		$	660

(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.

40

The following table provides reconciliation from U.S. GAAP Net income (loss) to non-U.S. GAAP Adjusted EBITDA (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Net income (loss) (U.S. GAAP)	$	(12,205	)	$	(37,050	)
Adjustments:
Interest expense, net	9,920			10,010
Income tax expense (benefit)	1,800			(248		)
Depreciation and amortization	9,436			9,917
Restructuring charges	688			1,824
Legal expenses related to antitrust class actions	1,175			718
Equity (income) loss from NEC TOKIN	(223		)	(1,585		)
Net (gain) loss on sales and disposals of assets	91			(58		)
Stock-based compensation expense	1,228			1,279
ERP integration/IT transition costs	1,768			4,369
Change in value of NEC TOKIN option	12,000			29,200
Plant start-up costs	308			195
Net foreign exchange (gain) loss	(1,920		)	1,049
NEC TOKIN investment-related expenses	206			224
Pension plan adjustment	—			312
Adjusted EBITDA (non-U.S. GAAP)	$	24,272		$	20,156

Adjusted gross margin represents net sales less cost of sales excluding adjustments which are outlined in the quantitative reconciliation provided above.  Management uses Adjusted gross margin to facilitate our analysis and understanding of our business operations by excluding the items outlined in the quantitative reconciliation provided above which might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. The Company 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.

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 by excluding the items outlined in the quantitative reconciliation provided above which might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. The Company believes that Adjusted operating income (loss) is useful to investors to provide a supplemental way to understand our underlying operating performance and monitor and understand changes in our ability to generate income from ongoing business operations. Adjusted operating income (loss) should not be considered as an alternative to operating income or any other performance measure derived in accordance with U.S. GAAP.

Adjusted net income (loss) represents net income (loss), excluding adjustments which are more specifically outlined in the quantitative reconciliation provided above. We use Adjusted net income (loss) to evaluate our operating performance by excluding the items outlined in the quantitative reconciliation provided above which might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. The Company believes that Adjusted net income (loss) is useful to investors because it provides a supplemental way to understand our underlying operating performance and allows investors to monitor and understand changes in our ability to generate income from ongoing business operations. Adjusted net income (loss) should not be considered as an alternative to net income (loss) from continuing operations, operating income (loss) or any other performance measures derived in accordance with U.S. GAAP.

Adjusted EBITDA represents net income (loss) before interest expense, net, income tax expense (benefit), and depreciation and amortization expense, excluding adjustments which are outlined in the quantitative reconciliation provided above.  We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We also

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present Adjusted EBITDA because we believe this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is also used as a measure to determine incentive compensation.

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; and 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 from continuing operations, you should be aware that in the future we may incur expenses similar to the adjustments noted above. 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 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 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 payments 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 U.S. GAAP results and using Adjusted EBITDA as supplementary information. 

Off-Balance Sheet Arrangements

Other than operating lease commitments, we are not a party to any material off-balance sheet financing arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

Impact of Recently Issued Accounting Standards

New accounting standards adopted/issued

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation-Stock Compensation. This guidance changes several aspects of the accounting for share-based payment award transactions, including: (1) Accounting and Cash Flow Classification for Excess Tax Benefits and Deficiencies, (2) Forfeitures, and (3) Tax Withholding Requirements and Cash Flow Classification. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early application is permitted, and KEMET adopted ASU No. 2016-09 as of April 1, 2016. The Company elected to discontinue estimating forfeitures that are expected to occur and recorded a cumulative effect adjustment to retained earnings for $130,000 as of April 1, 2016. There was no cumulative

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adjustment related to the excess tax benefits as the Company did not have an additional paid in capital pool of excess tax benefits. The adoption did not have a significant impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The ASU requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than short-term leases). The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. Early application is permitted. We are currently in the process of assessing the impact the adoption of this guidance will have on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The ASU requires an entity that uses first-in, first-out or average cost to measure its inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 was effective for interim and annual reporting periods beginning April 1, 2016. The adoption of ASU 2015-11 did not materially impact the Company's operating results and financial position.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The ASU specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. In August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which clarifies the treatment of debt issuance costs associated with line-of-credit arrangements that were not specifically addressed in ASU 2015-03. ASU 2015-15 states that entities may elect to continue to treat debt issuance costs associated with lines of credit as an asset, consistent with current treatment. The Company adopted these ASUs in the first quarter of 2017. The ASUs did not impact the Company's results of operations or liquidity. The balance sheet as of March 31, 2016 has been adjusted to reflect retrospective application of the new accounting guidance as follows (amounts in thousands):

	As Previously Reported		Retrospective Adjustment			As Adjusted
Other assets	$	5,832	$	(2,764	)	$	3,068
Total assets	702,544		(2,764		)	699,780
Long-term debt, less current portion	388,597		(2,764		)	385,833
Total liabilities and stockholders' equity	702,544		(2,764		)	699,780

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern. The new guidance requires management to assess if there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim period. If conditions or events give rise to substantial doubt, disclosures are required. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter; early application is permitted. This new guidance is not expected to have a material impact on the Company's Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes existing accounting standards for revenue recognition and creates a single framework. The new guidance requires either a retrospective or a modified retrospective approach at adoption. Early adoption is permitted, but not before Company's fiscal year that begins on April 1, 2017 (the original effective date of the ASU). Additional updates to Topic 606 issued by the FASB in 2015 and 2016 include the following:

• ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of the new guidance such that the new provisions will now be required for fiscal years, and interim periods within those years, beginning after December 15, 2017 (ASU 2015-14 is effective for the Company's fiscal year that begins on April 1, 2018 and interim periods within that fiscal year).

• ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations (reporting revenue gross versus net).

• ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies the implementation guidance on identifying performance obligations and classifying licensing arrangements.

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• ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which clarifies the implementation guidance in a number of other areas.

The Company is currently in the process of assessing the impact the adoption of the new revenue standards will have on its consolidated financial statements and related disclosures, as well as the available transition methods.

There are currently no other accounting standards that have been issued that will have a significant impact on the Company’s financial position, results of operations or cash flows upon adoption.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes regarding the Company’s market risk position from the information included in the Company’s 2016 Annual Report. 

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2016, an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer.  Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

“Item 3. Legal Proceedings” of our 2016 Annual Report includes a discussion of our legal proceedings.  There have been no material changes from the Company's legal proceedings described in our 2016 Annual Report. For an update on certain legal matters concerning NEC TOKIN, our equity method investee, see Note 5, “Investment in NEC TOKIN.”

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A Risk Factors, of the Company’s 2016 Annual Report. 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information relating to our purchase of shares of our common stock during the quarter ended June 30, 2016 (amounts in thousands, except per share price):

Periods	(a) Total Number of Shares Purchased (1)	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Programs	(d) Maximum Number of Shares that may yet be Purchased Under the Programs
April 1 to April 30, 2016	—	$	—	—	—
May 1 to May 31, 2016	242,215	2.46		—	—
June 1 to June 30, 2016	—	—		—	—
Total for Quarter Ended June 30, 2016	242,215	$	2.46

(1) Represents shares withheld by the Company upon vesting of restricted stock to pay taxes due. The Company does not currently have a publicly announced share repurchase plan or program.

Item 3. Defaults Upon Senior Securities

None. 

Item 4. Mine Safety Disclosures

Not applicable. 

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit 10.1 Amendment Number Eight to Loan and Security Agreement, dated May 2, 2016, among KEMET Electronics Corporation, KEMET Foil Manufacturing, LLC, KEMET Blue Powder Corporation, The Forest Electric Company and KEMET Electronics Marketing (S) PTE LTD., as Borrowers, the financial institutions party thereto, as Lenders, and Bank of America, N.A., as agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-15491) filed on May 5, 2016).

Exhibit 10.2 Form of Long-Term Incentive Plan Award Agreement

Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification - Principal Executive Officer

Exhibit 31.2 Rule 13a-14(a)/15d-14(a) Certification - Principal Financial Officer

Exhibit 32.1 Section 1350 Certification - Principal Executive Officer

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Exhibit 32.2 Section 1350 Certification - Principal Financial Officer

Exhibit 99.1 Settlement Agreement dated July 15, 2016 by and among Defendants NEC TOKIN Corporation and NEC TOKIN America, Inc. and Plaintiffs Chip-Tech, Ltd., Dependable Component Supply Corp., eIQ Energy, Inc. and Walker Component Group, Inc. (together, the “Direct Purchaser Plaintiffs”), both individually and on behalf of a class named therein.

Exhibit 99.2 Settlement Agreement dated July 15, 2016 by and among Defendants NEC TOKIN Corporation and NEC TOKIN America, Inc. and Plaintiffs Michael Brooks, CAE Sound, Steve Wong, Toy-Knowlogy Inc.,  AGS Devices Co., AGS Devices Ltd., J&O Electronics, Nebraska Dynamics, Inc., Angstrom, Inc., MakersLED and In Home Tech Solutions, Inc. (together, the “Indirect Purchaser Plaintiffs”), both individually and on behalf of a class named therein.

Exhibit 101 The following financial information from KEMET Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i)  Condensed Consolidated Statements of Operations for the quarters and three-month periods ended June 30, 2016 and 2015, (ii) Condensed Consolidated Balance Sheets at June 30, 2016 and March 31, 2016, (iii) Condensed Consolidated Statements of Cash Flows for the three-month periods ended June 30, 2016, and 2015, and (iv) the Notes to Condensed Consolidated Financial Statements.

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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 thereunto duly authorized.

Date:	August 3, 2016
		KEMET Corporation
	By:	/s/ WILLIAM M. LOWE, JR.
		William M. Lowe, Jr.
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)
		(Duly Authorized Officer)

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EXHIBIT INDEX

Exhibit 10.1 Amendment Number Eight to Loan and Security Agreement, dated May 2, 2016, among KEMET Electronics Corporation, KEMET Foil Manufacturing, LLC, KEMET Blue Powder Corporation, The Forest Electric Company and KEMET Electronics Marketing (S) PTE LTD., as Borrowers, the financial institutions party thereto, as Lenders, and Bank of America, N.A., as agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-15491) filed on May 5, 2016).

Exhibit 10.2 Form of Long-Term Incentive Plan Award Agreement

Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification - Principal Executive Officer

Exhibit 31.2 Rule 13a-14(a)/15d-14(a) Certification - Principal Financial Officer

Exhibit 32.1 Section 1350 Certification - Principal Executive Officer

Exhibit 32.2 Section 1350 Certification - Principal Financial Officer

Exhibit 99.1 Settlement Agreement dated July 15, 2016 by and among Defendants NEC TOKIN Corporation and NEC TOKIN America, Inc. and Plaintiffs Chip-Tech, Ltd., Dependable Component Supply Corp., eIQ Energy, Inc. and Walker Component Group, Inc. (together, the “Direct Purchaser Plaintiffs”), both individually and on behalf of a class named therein.

Exhibit 99.2 Settlement Agreement dated July 15, 2016 by and among Defendants NEC TOKIN Corporation and NEC TOKIN America, Inc. and Plaintiffs Michael Brooks, CAE Sound, Steve Wong, Toy-Knowlogy Inc.,  AGS Devices Co., AGS Devices Ltd., J&O Electronics, Nebraska Dynamics, Inc., Angstrom, Inc., MakersLED and In Home Tech Solutions, Inc. (together, the “Indirect Purchaser Plaintiffs”), both individually and on behalf of a class named therein.

Exhibit 101 The following financial information from KEMET Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i)  Condensed Consolidated Statements of Operations for the quarters and three-month periods ended June 30, 2016 and 2015, (ii) Condensed Consolidated Balance Sheets at June 30, 2016 and March 31, 2016, (iii) Condensed Consolidated Statements of Cash Flows for the three-month periods ended June 30, 2016, and 2015, and (iv) the Notes to Condensed Consolidated Financial Statements.

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EX-10.2

Exhibit 10.2

KEMET CORPORATION

LONG-TERM INCENTIVE PLAN

AWARD AND RESTRICTED STOCK AGREEMENT

KEMET Corporation (the “Company”) is pleased to advise you that, pursuant to the 2014 Amendment and Restatement of the KEMET Corporation 2011 Omnibus Stock and Incentive Plan (the “Plan”), the Company’s Compensation Committee (the “Committee”) has granted to you this award under the FY20xx/FY20xx Long-Term Incentive Plan (the “LTIP Award”). [Alt. A: Sixty percent (60%) of the value of the LTIP Award is provided by a performance-based Performance Award which, if certain performance measures are met and other conditions satisfied, will provide you with a combination of cash and Restricted Stock Units of the Company. Forty percent (40%) of the value of the LTIP Award is provided by a time-based Restricted Stock Unit Award, by which, upon the vesting and settlement of the underlying Restricted Stock Units, you shall be issued Restricted Stock of the Company.] [Alt. B: Sixty percent (60%) of the value of the LTIP Award is provided by a performance-based Performance Award which, if certain performance measures are met and other conditions satisfied, will be paid to you in cash. Forty percent (40%) of the value of the LTIP Award is provided by a combination of cash and a time-based Restricted Stock Unit Award, by which, upon the vesting and settlement of the underlying Restricted Stock Units, you shall be issued Restricted Stock of the Company.] An illustration of your LTIP Award payouts in the event that the Company meets its performance targets has been provided to you in a separate document.

The LTIP Award is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan (which is incorporated herein by reference). Certain capitalized terms used herein are defined in the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan.

The terms of the LTIP Award may be amended from time to time by the Committee in its discretion in any manner that it deems appropriate; provided that, except as otherwise provided below, no such amendment shall adversely affect in a material manner any of your rights under the LTIP Award without your written consent.

I. Performance Award

1. Grant. Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to you a Performance Award to provide you with the amount identified to you separately upon the occurrence of the Company meeting the performance targets set forth in Annex A attached hereto.

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2. Amount and Timing. The Performance Award shall be paid based upon the Company’s achievement of certain performance targets for the two-year performance period ending March 31, 20xx (the “Measurement Date”). [Alt. A: The Performance Award shall be paid as follows: fifty percent (50%) in the form of performance-based restricted stock units ("PSUs") and fifty percent (50%) in performance-based cash. Fifty percent (50%) of the PSUs (i.e., 25% of the value of the Performance Award) will vest after the end of the performance period and the remaining fifty percent (50%) of the PSUs will vest one year thereafter, as set forth in Section 4(a) below. The entire cash award will be paid at the end of the performance period.] [Alt. B: The Performance Award shall be paid in performance-based cash. Seventy-five percent (75%) of the award will vest and be paid following the end of the performance period and the remaining twenty-five percent (25%) will vest and be paid one year following the end of the performance period, as set forth in Section 4(a) below.]

3. Performance-based Restricted Stock Units. At any time on or after the date hereof and prior to the Measurement Date, the Committee may, but shall not be required to, substitute performance-based restricted stock units (“PSUs”) for up to 100% of the cash portion of the Performance Award that may be earned hereunder. Notwithstanding anything in this Agreement to the contrary, in the event the Committee makes such a substitution, the PSUs will vest on the same schedule as the cash portion that the Performance Shares replaced. Any such determination will be subject to the sole discretion of the Committee, and communicated to you by any manner deemed appropriate by the Committee. In the event of any such substitution, the Committee shall value any such replacement PSUs at a price per share equal to the closing price of the Common Stock for the trading market on May xx, 20xx, the date of the grant of the Performance Award. Any such decision by the Committee shall also be subject to the Company having available authorized but unissued performance shares under the Plan to satisfy such Performance Award.

4. Exercisability/Vesting and Expiration.

(a) Normal Vesting. [Alt. A: The Performance Award granted hereunder may be exercised only to the extent it has become vested. One hundred percent (100%) of the cash component of the Performance Award, along with fifty percent (50%) of the PSUs, shall vest on the date of the first quarterly Board meeting following the Measurement Date set forth in Section I.2 above (the “Initial Vesting Date”), if and only if the Company has attained the performance goals set forth in Annex A attached hereto. Subject to attainment of the performance goals, the remaining fifty percent (50%) of the PSUs will vest one year after the Initial Vesting Date.] [Alt. B: The Performance Award granted hereunder will be paid to you only to the extent it has become vested. Seventy-five percent (75%) of the Performance Award shall vest on the date of the first quarterly Board meeting following the Measurement Date set forth in Section I.2 above (the “Initial Vesting Date”), if and only if the Company has attained the performance goals set forth in Annex A attached hereto. Subject to attainment of the performance goals, the remaining twenty-five (25%) of the Performance Award will vest one year after the Initial Vesting Date.]

(b) Effect on Vesting and Expiration of Employment Termination. Notwithstanding paragraph I.4(a) above, if your employment with the Company terminates prior to a component of the Performance Award becoming vested for any reason, you shall not be entitled to any right to receive such component of the Performance Award. There is no pro-rata vesting of a Performance Award.

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(c) Change in Control. Notwithstanding the foregoing paragraph I.4(b), if there is a Change in Control prior to the Measurement Date, then the Performance Award shall become vested and payable, but only on a pro-rata basis in an overall amount that takes into account the time of the Change in Control as compared to the Grant Date and the Measurement Date, and only if the Company has attained the performance targets at the time of the Change in Control (determined on the basis of actual results over the time elapsed from the Grant Date).

5. Payment and Issuance. Payment of the [Alt. A: cash component of the Performance Award and issuance of the PSUs pursuant to the Performance Award] [Alt. B: Performance Award] will be made following the Company’s final determination of its FYxx financial results and the Committee’s approval of Performance Award payouts under the FYxx/FYxx LTIP, but in no event later than the date that is 2.5 months after the end of calendaryear in which vesting occurs, or if later, the end of the Company’s tax year in which vesting occurs. [If substituted for cash pursuant to I.3 above,] PSUs will not be exercised for a fraction of a PSU, and components of the Performance Award will be rounded up or down to the nearest whole dollar or whole share, as applicable. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to you, an amount equal to any federal, state or local taxes of any kind required by law to be withheld with respect to the delivery of any component of the Performance Award. Issuance of the PSUs is subject to execution by you and the Company of a Restricted Stock Unit Grant Agreement concerning such PSUs, which shall detail the number of PSUs issued to you and shall include equivalent provisions to those set forth in Sections II.3 – 21 below, but which Restricted Stock Unit Grant Agreement shall not adjust the timing of settlement from that set forth above.

II. Restricted Stock Unit (RSU) Awardand Agreement (time-based vesting).

1. Grant. Subject to the terms and conditions set forth herein, the Company hereby grants to you the Restricted Stock Units. The Restricted Stock Units shall vest and become non-forfeitable in accordance with Section II.2 below.

2. Amount and Timing.

(a). Time-Based Vesting. The Restricted Stock Units shall vest and become non-forfeitable in the amounts as provided in your individual letter and on the dates indicated by the Vesting Dates of Restricted Stock Units on 5/xx/20xx, 5/xx/20xx, 5/xx/20xx.

(b). Forfeiture. You must be employed by the Company as of the date of vesting and must have been continuously employed by the Company from the date of this grant through the vesting date for the Restricted Stock Units to vest. Notwithstanding the foregoing, if you cease to be an employee of the Company due to Cause (as defined in the Plan), then all of the Restricted Stock (received from vested and settled Restricted Stock Units) not yet sold by you or your permitted transferor shall be forfeited immediately upon such cessation.

3. Settlement. No shares of Restricted Stock will be issued before the Restricted Stock Units vest in accordance with Section II.2 above. Within thirty (30) days after the date on which the Restricted Stock Units vest at the earlier of the vesting schedule provided in Section II.2 above or as vesting may be provided by employment agreement or otherwise, the Company will issue to you or

3

your legal guardian or representative (if applicable) one share of Restricted Stock for each vested Restricted Stock Unit. The issuance of shares of Restricted Stock may be in certificated form or in book entry form, in the Company’s sole discretion, in either case without restrictive legend or notation (except to the extent necessary or appropriate under applicable securities laws). The Restricted Stock Units shall not be settled in cash.

4. Payment and Withholding of Taxes.

(a). Net Settlement. You are responsible for the payment of all taxes on the LTIP Award. The Company will withhold Restricted Stock acquired upon the vesting and settlement of the Restricted Stock Units to satisfy, in whole or in part, the amount the Company is required to withhold for taxes in connection with vesting and settlement. The fair market value of the Restricted Stock to be withheld or delivered will be the Fair Market Value as of the date the amount of tax to be withheld is determined.

(b). Company Requirement. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to you, an amount equal to any federal, state or local taxes of any kind required by law to be withheld with respect to the delivery of any component of the LTIP Award under this Agreement. You shall have full responsibility, and, subject to Section II.4(a), the Company shall have no responsibility (except as may be imposed by applicable law), for satisfying any liability for any federal, state or local income or other taxes required by law to be paid with respect to the Restricted Stock Units, including upon the receipt, vesting or settlement of the Restricted Stock Units. You should seek your own tax counsel regarding the taxation of the Restricted Stock Units. Subject to Section II.4(a), the Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind otherwise due to you, an amount equal to any federal, state or local taxes of any kind required by law to be withheld with respect to the delivery of shares of Restricted Stock after settlement of the Restricted Stock Units awarded under this Agreement.

5. Transfer of Units Award. Neither this Units Award nor your rights under such award are assignable or transferable except by will or the laws of descent and distribution, or with the Committee’s consent in accordance with Section 12.3 of the Plan.

6. Restrictions on Sale.

(a). Compliance with Equity Ownership Guidelines. Notwithstanding anything else contained in this Agreement or the Plan, you agree not to sell, transfer, assign or otherwise dispose of any Restricted Stock issued from Unit Awards hereunder, and agree to place the same restrictions on any permitted transferee hereunder, until such time as the Company has determined, in its sole discretion and by written notice to you, that you have attained the targeted minimum ownership interest under Company equity ownership guidelines applicable to you, and only to the extent that such disposition does not cause you to fail to continue to comply with such ownership guidelines, unless the prior sale is approved in advance by the Committee. Upon written notice from the Company confirming that you are in compliance with the Company’s equity ownership guidelines, subject to Section II.10 below, you may dispose of your Restricted Stock issued from Unit Awards hereunder in excess of targeted minimum ownership requirements if they have vested in accordance with applicable law.

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(b). Holding Period. Except as provided in Section II.6(a) above, you are prohibited from selling, transferring, assigning or otherwise disposing of any Restricted Stock as long as you remain as an employee of the Company. Following the termination of your services as an employee, you may, 90 days following the date of your termination, dispose of your Restricted Stock in accordance with applicable law.

(c). Merrill Lynch Brokerage Account. As a participant in the Long Term Incentive Plan, you will be required to set up a Merrill Lynch Brokerage account through KEMET’s Benefits On-Line System. All vested shares must remain in this account until either (a) termination from KEMET as provided in I.6(b) above, or if in excess of targeted minimum ownership requirements as provided in I.6(a) above.

(d). Change in Control. The restrictions on sale set forth in Sections II.6(a) and (b) above shall lapse in the event of a Change in Control.

7. Rights as a Stockholder. You shall have no voting or other rights as a stockholder of the Company until certificates are issued or a book entry representing such shares has been made and such shares have been deposited with the appropriate registered book entry custodian.

8. Change in Capitalization. In the event of a dividend or distribution paid in shares of Common Stock or any other adjustment made upon a change in the capital structure of the Company as described in Section 12.2 of the Plan that occurs prior to settlement, appropriate adjustment shall be made to the Restricted Stock Units so that they represent the right to receive upon settlement any and all new, substituted or additional securities or other property (other than cash dividends) to which you would be entitled if you had owned, at the time of such change in capital structure, the shares of Restricted Stock issuable upon settlement of the Restricted Stock Units.

9. Limitation on Obligations. Except as provided in Section II.8 above, the Company’s obligation with respect to the Restricted Stock Units is limited solely to the delivery to you of shares of Restricted Stock upon settlement, and in no way shall the Company become obligated to pay cash or other assets in respect of such obligation. In addition, the Company shall not be liable to you for damages relating to any delay in issuing the shares or share certificates or any loss of the certificates.

10. Securities Laws and Trading Policy. Upon the vesting or settlement of any Restricted Stock Units, the Company may require you to make or enter into such written representations, warranties and agreements as the Compensation Committee may reasonably request in order to comply with applicable securities laws or with this Agreement. The granting of the Restricted Stock Units shall be subject to all applicable laws, rules and regulations and to such approvals of any governmental agencies as may be required. You agree to comply with all applicable requirements of the Company’s Statement of Policy to Directors, Officers and Key Employees Concerning Securities Trading and Disclosure of Confidential Information.

11. Conformity with Plan. The grant of Restricted Stock Units is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. By executing and returning the enclosed copy of this Agreement, you acknowledge your receipt of this Agreement and the Plan and agree to be bound by all of the terms of this Agreement and the Plan.

5

12. Rights of Participants. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its stockholders to terminate your duties as an employee at any time (with or without Cause), nor confer upon you any right to continue as an employee of the Company for any period of time, or to continue your present (or any other) rate of compensation. Any such termination prior to the vesting of the Restricted Stock Units shall result in the forfeiture of such Restricted Stock Units.

13. Remedies. The parties hereto shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto acknowledge and agree that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and that any party hereto may, in its sole discretion, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement.

14. Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not.

15. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

16. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same Agreement.

17. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

18. Governing Law. THE VALIDITY, CONSTRUCTION, INTERPRETATION, ADMINISTRATION AND EFFECT OF THE PLAN, AND OF ITS RULES AND REGULATIONS, AND RIGHTS RELATING TO THE PLAN AND TO THIS AGREEMENT, SHALL BE GOVERNED BY THE SUBSTANTIVE LAWS, BUT NOT THE CHOICE OF LAW RULES, OF THE STATE OF DELAWARE.

19. 409A. Notwithstanding anything in this Agreement to the contrary, this LTIP Award is intended to satisfy the “short-term deferral” exception to Section 409A and shall be interpreted and administered to further such intent. If for any reason it is determined that an LTIP Award or portion of LTIP Award is subject to the requirements of Section 409A, then as to that LTIP Award or portion of LTIP Award only. If the vesting of the balance, or some lesser portion of the balance, of the applicable sub-Award is accelerated in connection with your termination of service (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) you are a “specified employee” within the meaning of Section 409A at the time of such Termination of Service, and (y) the payment of such accelerated applicable sub-

6

Award will result in the imposition of additional tax under Section 409A if paid to you on or within the six (6) month period following your termination of service, then the payment of such applicable sub-Award will not be made until the date six (6) months and one (1) day following the date of your termination of service, unless you die following your termination of service, in which case, the applicable sub-Award will be paid in Restricted Stock as soon as practicable following your death. It is the intent of this Agreement to comply with the requirements of Section 409A so that none of the Restricted Stock Units provided under this Agreement or Restricted Stock issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. For purposes of this Agreement, “Section 409A” means Section 409A of the Code, and any Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

20. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally or mailed by certified or registered mail, return receipt requested and postage prepaid, to the recipient. Such notices, demands and other communications shall be sent to you at the address appearing on the signature page to this Agreement and to the Company at KEMET Corporation, 101 NE 3^rd Avenue #1700, Fort Lauderdale, FL 33301, Attn: Stefano Vetralla, Senior Vice President - Chief Human Resources Officer, or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

21. Data Protection. By Accepting this Agreement, you are consenting to the holding, processing and transfer of personal data by or to the Company, any subsidiary or affiliate, any third party broker, registrar or administrator or any future purchaser of the Company or relevant subsidiary or affiliate employing you for all purposes relating to the operation of the Plan and this Award and this consent shall include transferring or processing personal data outside the United States or European Economic Area (as defined by the Data Protection Act 1998) or other jurisdiction to which you or the Company or other party named above might be subject.

22. Entire Agreement. This Agreement and the terms of the Plan constitute the entire understanding between you and the Company, and supersede all other agreements, whether written or oral, with respect to your acquisition of the Restricted Stock Units.

*    *    *    *    *

Acceptance of FYxx/FYxx Long Term Incentive

Award and Restricted Stock Unit Grant Agreement

23. On–Line Acceptance. This Agreement is not effective until you confirm your understanding and acceptance of the agreements contained in this Agreement as follows: by clicking the “Accept Now” link on the Equity Plan page of your Merrill Lynch Benefits Online

7

account, you acknowledge having read this Agreement and the Plan and agree to be bound by all provisions set forth herein and in the Plan.

By accepting your award(s), you agree to the terms of the stock agreement(s) applicable to your award(s) and acknowledge receipt by access to the 2014 Amendment and Restatement of the KEMET Corporation 2011 Omnibus Stock and Incentive Plan. These documents are also accessible via the Merrill Lynch Web site by selecting the Individual Plan Information tab -] Communications Center -] Plan Documents for KEMET Corporation.

Very truly yours,
KEMET Corporation

Name: Stefano Vetralla Title:     Senior Vice President -

Chief Human Resources Officer

8

ANNEX A

FYxx/FYxx LTIP PERFORMANCE MEASURES

9

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Per-Olof Lööf, certify that:

1. I have reviewed this quarterly report on Form 10-Q of KEMET Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: August 3, 2016
	/s/ PER-OLOF LÖÖF
	Per-Olof Lööf
	Chief Executive Officer and Director

1

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, William M. Lowe, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of KEMET Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2016
	/s/ WILLIAM M. LOWE, JR.
	William M. Lowe, Jr.
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Per-Olof Lööf, hereby certify pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to my knowledge:

The accompanying Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of KEMET Corporation.

Date: August 3, 2016

/s/ PER-OLOF LÖÖF

Per-Olof Lööf

Chief Executive Officer and Director

The foregoing certifications are being furnished solely pursuant to 18 U.S.C. Section 1350 and are not being filed as part of this report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, William M. Lowe, Jr., hereby certify pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to my knowledge:

The accompanying Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of KEMET Corporation.

Date:  August 3, 2016

 /s/ WILLIAM M. LOWE, JR.

William M. Lowe, Jr.

Executive Vice President and Chief Financial Officer

The foregoing certifications are being furnished solely pursuant to 18 U.S.C. Section 1350 and are not being filed as part of this report or as a separate disclosure document.

EX-99.1

EX-99.2

Settlement Agreement; Case No. 3:14-cv-03264-JD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION IN RE CAPACITORS ANTITRUST LITIGATION Case No. 3:14-cv-03264-JD SETTLEMENT AGREEMENT This Document Relates to: Indirect Purchaser Actions

Settlement Agreement; Case No. 3:14-cv-03264-JD 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP This Settlement Agreement (“Settlement Agreement”) is made and entered into this 15th day of July, 2016, by and among Defendant NEC TOKIN Corp. and NEC TOKIN America, Inc. and Indirect Purchaser Plaintiffs, both individually and on behalf of Classes in the above captioned class action. This Settlement Agreement is intended by the Settling Parties to fully, finally and forever resolve, discharge and settle the Released Claims, upon and subject to the terms and conditions hereof. RECITALS WHEREAS, Indirect Purchaser Plaintiffs are prosecuting the above-captioned action (the “Class Action”) on their own behalf and on behalf of Classes against, among others, NEC TOKIN and other Defendants and alleged co-conspirators; WHEREAS, Indirect Purchaser Plaintiffs allege, among other things, that NEC TOKIN violated the antitrust and consumer protection laws by conspiring to fix, raise, maintain or stabilize the prices of Electrolytic Capacitors; and these acts caused the Classes to incur damages; WHEREAS, NEC TOKIN has denied and continues to deny each and all of Indirect Purchaser Plaintiffs’ claims and allegations of wrongdoing; has not conceded or admitted any liability, or that it violated or breached any law, regulation, or duty owed to the Indirect Purchaser Plaintiffs; has denied and continues to deny all charges of wrongdoing or liability against it arising out of any of the conduct, statements, acts or omissions alleged in the Actions; and further denies the allegations that the Indirect Purchaser Plaintiffs or any member of the Classes were harmed by any conduct by NEC TOKIN alleged in the Actions or otherwise; WHEREAS, Indirect Purchaser Plaintiffs and Defendants have engaged in extensive discovery regarding the facts pertaining to Indirect Purchaser Plaintiffs’ claims and Defendants’ defenses; WHEREAS, Indirect Purchaser Plaintiffs and NEC TOKIN agree that neither this Settlement Agreement nor any statement made in the negotiation thereof shall be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or

Settlement Agreement; Case No. 3:14-cv-03264-JD 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP wrongdoing by NEC TOKIN or of the truth of any of the claims or allegations alleged in the Actions; WHEREAS, Indirect Purchaser Plaintiffs’ Class Counsel have concluded, after due investigation and after carefully considering the relevant circumstances, including, without limitation, the claims asserted in the Indirect Purchaser Plaintiffs’ Fourth Consolidated Complaint filed in Docket No. 3:14-cv-03263-JD, the legal and factual defenses thereto and the applicable law, that it is in the best interests of the Indirect Purchaser Plaintiffs and the Classes to enter into this Settlement Agreement to avoid the uncertainties of litigation and to assure that the benefits reflected herein are obtained for the Indirect Purchaser Plaintiffs and the Classes, and, further, that Indirect Purchaser Plaintiffs’ Class Counsel consider the Settlement set forth herein to be fair, reasonable and adequate and in the best interests of the Indirect Purchaser Plaintiffs and the Classes; WHEREAS, NEC TOKIN has concluded, despite its belief that it is not liable for the claims asserted against it in the Actions and that it has good defenses thereto, that it will enter into this Settlement Agreement in order to avoid further expense, inconvenience, and the distraction of burdensome and protracted litigation, and thereby to put to rest this controversy with respect to the Indirect Purchaser Plaintiffs and the Classes and avoid the risks inherent in complex litigation; and WHEREAS, arm’s length settlement negotiations have taken place between counsel for Indirect Purchaser Plaintiffs and NEC TOKIN, including with the assistance of a nationally- recognized neutral third party mediator (Hon. Ret. Judge Layn Phillips), and this Settlement Agreement, which embodies all of the terms and conditions of the Settlement between the Settling Parties, both individually and on behalf of the Classes, has been reached as a result of the Settling Parties’ negotiations (subject to the approval of the Court) as provided herein and is intended to supersede any prior agreements between the Settling Parties. AGREEMENT NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the Settling Parties, by and through their undersigned attorneys of record, in consideration of the

Settlement Agreement; Case No. 3:14-cv-03264-JD 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP covenants, agreements, and releases set forth herein and for other good and valuable consideration, that the Actions and the Released Claims as against NEC TOKIN shall be finally and fully settled, compromised and dismissed on the merits and with prejudice, without costs as to Indirect Purchaser Plaintiffs, the Classes, or NEC TOKIN, upon and subject to the approval of the Court, following notice to the Class, on the following terms and conditions: A. Definitions 1. As used in this Settlement Agreement the following terms shall have the meanings specified below: (a) “Action” or “Actions” means In re Capacitors Antitrust Litigation – All Indirect Purchaser Actions, Case No. 3:14-cv-03264-JD, and each of the cases brought on behalf of indirect purchasers that have been consolidated and/or included as part of Docket No. 3:14-cv-03264-JD. (b) “Affiliates” means entities controlling, controlled by or under common control with any Person. (c) “Authorized Claimant” means any Indirect Plaintiff Purchaser who, in accordance with the terms of this Settlement Agreement, is entitled to a distribution consistent with any Distribution Plan or order of the Court ordering distribution to the Classes. (d) “Capacitors” means electronic components that store electric charges between one or more pairs of conductors separated by an insulator. It includes electrolytic, aluminum, tantalum, and film capacitors. (e) “Claims Administrator” means the claims administrator(s) to be selected by Class Counsel. (f) “Class” or “Classes” is generally defined as all persons and entities in the United States who, during the period from April 1, 2002 to the Execution Date, purchased directly from a distributor one or more Capacitor(s) that a Defendant manufactured. Excluded from the Classes are Defendants, their parent companies, subsidiaries and Affiliates, any co-conspirators, Defendants’

Settlement Agreement; Case No. 3:14-cv-03264-JD 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP attorneys in this case, federal government entities and instrumentalities, states and their subdivisions, all judges assigned to this case, and all jurors in this case. (g) “Class Counsel” means the law firm of Cotchett, Pitre & McCarthy, LLP. (h) “Class Member” means a Person who falls within the definition of the Classes and who does not timely and validly elect to be excluded from the Classes in accordance with the procedure to be established by the Court. (i) “Court” means the United States District Court for the Northern District of California. (j) “Defendants” means Hitachi Chemical Co., Ltd., Hitachi AIC Inc., Hitachi Chemical Co. America, Ltd., Nippon Chemi-Con Corp., United Chemi-Con, Inc., Rubycon Corp., Rubycon America Inc., Panasonic Corp., Panasonic Corp. of North America, SANYO Electric Co., Ltd., SANYO Electronic Device (U.S.A.) Corp., Elna Co., Ltd. and Elna America Inc., Matsuo Electric Co., Ltd., NEC TOKIN Corp., NEC TOKIN America Inc., Nichicon Corp., Nichicon America Corp., Fujitsu Media Devices, Ltd., Nissei Electric Co., Ltd., Nitsuko Electronics Corp., Okaya Electric Industries Co., Ltd., Shinyei Technology Co., Ltd., Shinyei Capacitor Co., Ltd., Soshin Electric Co., Ltd., Taitsu Corp., and Toshin Kogyo Co., Ltd. (k) “Distribution Plan” means any plan or formula of allocation of the Gross Settlement Fund, to be approved by the Court, whereby the Net Settlement Fund shall in the future be distributed to Authorized Claimants. (l) “Document” is synonymous in meaning and equal in scope to the usage of this term in Fed. R. Civ. P. 34(a), including, without limitation, electronic or computerized data compilations. A draft or non-identical copy is a separate document within the meaning of this term. (m) “Effective Date” means the first date by which all of the following events and conditions have been met or have occurred: (i) All parties have executed this Settlement Agreement; (ii) The Court has preliminarily approved this Settlement Agreement; (iii) Notice has been provided to the Classes in a manner approved by the Court;

Settlement Agreement; Case No. 3:14-cv-03264-JD 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP (iii) The Court has entered a Final Judgment; and (iv) The Final Judgment has become final, with the occurrence of the following: (a) the entry by the Court of a final order approving this Settlement Agreement under Rule 23(e) of the Federal Rules of Civil Procedure together with entry of a final judgment dismissing the Class Action and all claims therein against NEC TOKIN with prejudice as to Indirect Purchaser Plaintiffs and all Class Members (the "Final Judgment"), and (b) the expiration of the time for appeal or to seek permission to appeal from the Court's approval of this Settlement Agreement and entry of the Final Judgment or, if an appeal from an approval and Final Judgment is taken, the affirmance of such Final Judgment in its entirety, without modification, by the court of last resort to which an appeal of such Final Judgment may be taken, provided, however, a modification or reversal on appeal of any amount of Class Counsel's fees and expenses awarded by the Court from the Gross Settlement Fund or any plan of allocation or distribution of the Gross Settlement Fund shall not be deemed a modification of all or part of the terms of this Settlement Agreement or the Final Judgment. Neither the provisions of Rule 60 of the Federal Rules of Civil Procedure nor the All Writs Act, 28 U.S.C. § 1651, shall be taken into account in determining the above-stated times. (n) “Electrolytic Capacitor” means a capacitor that uses an electrolyte (an ionic conducting liquid) as one of its plates to achieve a relatively larger capacitance per volume. It includes the following: circular polymer aluminum electrolytic capacitors, rectangular polymer aluminum capacitors, manganese tantalum capacitors, rectangular polymer tantalum capacitors, non-polymer aluminum electrolytic capacitors, and non-polymer electrolytic double-layer capacitors. (o) “Escrow Agent” means the agent jointly designated by Class Counsel and NEC TOKIN, and any successor agent. (p) “Execution Date” means July 15, 2016, the date by which all parties have executed this Settlement Agreement. (q) “Final” means, with respect to any order of court, including, without limitation, the Judgment, that such order represents a final and binding determination of all issues within its scope

Settlement Agreement; Case No. 3:14-cv-03264-JD 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP and is not subject to further review on appeal or otherwise. Without limitation, an order becomes “Final” when: (a) no appeal has been filed and the prescribed time for commencing any appeal has expired; or (b) an appeal has been filed and either (i) the appeal has been dismissed and the prescribed time, if any, for commencing any further appeal has expired, or (ii) the order has been affirmed in its entirety and the prescribed time, if any, for commencing any further appeal has expired. For purposes of this Settlement Agreement, an “appeal” includes appeals as of right, discretionary appeals, interlocutory appeals, proceedings involving writs of certiorari or mandamus, and any other proceedings of like kind. Any appeal or other proceeding pertaining solely to any order adopting or approving a Distribution Plan, and/or to any order issued in respect of an application for attorneys’ fees and expenses consistent with this Settlement Agreement, shall not in any way delay or preclude the Judgment from becoming Final. (r) “Gross Settlement Fund” means the Settlement Amount plus any interest that may accrue. (s) “Indirect Purchaser Plaintiffs” means the Plaintiffs listed in the Indirect Purchasers’ Fourth Consolidated Complaint ¶¶ 29-39. (t) “Judgment” means the order of judgment and dismissal of the Actions with prejudice against NEC TOKIN. (u) “Net Settlement Fund” means the Gross Settlement Fund, less the payments set forth in ¶ 20. (v) “NEC TOKIN” means NEC TOKIN Corporation and NEC TOKIN America, Inc. (w) “Notice and Administrative Costs” means the reasonable sum of money not in excess of $350,000.00 to be paid out of the Gross Settlement Fund to pay for notice to the Classes and related administrative costs. (x) “Person(s)” means an individual, corporation, limited liability corporation, professional corporation, limited liability partnership, partnership, limited partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political

Settlement Agreement; Case No. 3:14-cv-03264-JD 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP subdivision or agency thereof, and any business or legal entity and any spouses, heirs, predecessors, successors, representatives or assignees of any of the foregoing. (y) “Proof of Claim and Release” means the form, to be approved by further order(s) of the Court, by which any member of the Classes may make claims against the Gross Settlement Fund. (z) “Released Claims” means any and all manner of claims, demands, rights, actions, suits, causes of action, whether class, individual or otherwise in nature, fees, costs, penalties, injuries, damages whenever incurred, liabilities of any nature whatsoever, known or unknown (including, but not limited to, Unknown Claims), foreseen or unforeseen, suspected or unsuspected, asserted or unasserted, contingent or non-contingent, in law or in equity, under the laws of any jurisdiction, which Releasors or any of them, whether directly, representatively, derivatively, or in any other capacity, ever had, now have or hereafter can, shall or may have, relating in any way to any conduct prior to the Execution Date and arising out of or related in any way in whole or in part to any facts, circumstances, acts, or omissions arising out of or related to (1) the purchase, pricing, selling, discounting, marketing, manufacturing and/or distributing of Capacitors in the United States and its territories or for delivery in the United States and its territories; (2) any agreement, combination or conspiracy to raise, fix, maintain or stabilize the prices of Capacitors or restrict, reduce, alter or allocate the supply, quantity or quality of Capacitors or concerning the development, manufacture, supply, distribution, transfer, marketing, sale or pricing of Capacitors, or any other restraint of competition alleged in the Action or that could have been or hereafter could be alleged against the Releasees relating to Capacitors, or (3) any other restraint of competition relating to Capacitors that could be asserted as a violation of the Sherman Act or any other antitrust, unjust enrichment, unfair competition, unfair practices, trade practices, price discrimination, unitary pricing, racketeering, civil conspiracy or consumer protection law, whether under federal, state, local or foreign law. (aa) “Releasees” refers jointly and severally, individually and collectively to NEC TOKIN Corporation and NEC TOKIN America, Inc., their Affiliates and joint ventures (other than the shareholders of NEC TOKIN Corporation and the parents of the shareholders of NEC TOKIN

Settlement Agreement; Case No. 3:14-cv-03264-JD 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP Corporation), their respective past and present officers, directors, employees, managers, members, partners, agents, attorneys and legal representatives, assigns, servants, and representatives, and the predecessors, successors, heirs, executors, administrators, and assigns of each of the foregoing, but excluding Defendants other than NEC TOKIN Corporation and NEC TOKIN America, Inc. and any current or former NEC TOKIN officer, director, employee, agent, affiliate or joint venture that fails to cooperate with Indirect Purchaser Plaintiffs. (bb) “Releasors” refers jointly and severally, individually and collectively to the Indirect Purchaser Plaintiffs and each and every member of the Settlement Class on their own behalf and on behalf of their respective past, present, and/or future direct and indirect parents, members, subsidiaries and Affiliates, and their past, present and/or future officers, directors, employees, agents, attorneys and legal representatives, servants, and representatives, and the predecessors, successors, heirs, executors, administrators and assigns of each of the foregoing. (cc) “Settlement” means the settlement of the Released Claims set forth herein. (dd) “Settlement Amount” means Thirteen Million and Two Hundred Fifty Thousand U.S. Dollars ($13,250,000). (ee) “Settlement Class” means all persons and entities in the United States who from April 1, 2002 through the Execution Date purchased directly from a distributor one or more Electrolytic Capacitor(s) manufactured by a defendant (or the current or former subsidiary of any such defendant) alleged to have participated in a conspiracy described in the Indirect Purchaser Plaintiffs’ Fourth Consolidated Complaint (Dkt. 1111-4) with respect to Electrolytic Capacitors. (ff) “Settling Parties” means, collectively, the Indirect Purchaser Plaintiffs (on behalf of themselves and the Classes) and NEC TOKIN. (gg) “Unknown Claims” means any Released Claim that an Indirect Purchaser Plaintiff and/or Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Releasees that if known by him, her or it, might have affected his, her or its settlement with and release of the Releasees, or might have affected his, her or its decision not to object to this

Settlement Agreement; Case No. 3:14-cv-03264-JD 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP Settlement. Such Unknown Claims include claims that are the subject of California Civil Code § 1542 and equivalent, similar or comparable laws or principles of law. California Civil Code § 1542 provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. B. Preliminary Approval Order, Notice Order and Settlement Hearing 2. Reasonable Best Efforts to Effectuate this Settlement. The Settling Parties: (a) acknowledge that it is their intent to consummate this Settlement Agreement; and (b) agree to cooperate to the extent reasonably necessary to effectuate and implement the terms and conditions of this Settlement Agreement and to exercise their reasonable best efforts to accomplish the terms and conditions of this Settlement Agreement. 3. Motion for Preliminary Approval. At a time to be determined by Class Counsel, Class Counsel shall submit this Settlement Agreement to the Court and shall apply for entry of a Preliminary Approval Order, requesting, inter alia, preliminary approval of the Settlement. The motion shall include (a) the proposed Preliminary Approval Order, and (b) a definition of the proposed Settlement Classes, defined at §A (1) (ee) supra, pursuant to Federal Rule of Civil Procedure 23. 4. Proposed Notice. At a time to be determined in their sole discretion, Class Counsel shall submit to the Court for approval a proposed form of, method for and schedule for dissemination of notice to the Classes. To the extent practicable and to the extent consistent with this paragraph, Class Counsel may seek to coordinate this notice program with other settlements that may be reached in the Action in order to reduce the expense of notice. This motion shall recite and ask the Court to find that the proposed form of and method for dissemination of the notice to the Class constitutes valid, due and sufficient notice to the Class, constitutes the best notice

Settlement Agreement; Case No. 3:14-cv-03264-JD 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP practicable under the circumstances, and complies fully with the requirements of Federal Rule of Civil Procedure 23. Except for as provided in §A (1) (w), Counsel for the Settlement Class shall be responsible for arranging and paying for class notice, claims administration, and distribution of settlement funds, and for obtaining any needed court approvals. 5. Claims Administrator. Indirect Purchaser Plaintiffs shall retain a Claims Administrator, which shall be responsible for the claims administration process including distribution of the Gross Settlement Fund to Class Members pursuant to a court-approved plan of distribution. The fees and expenses of the Claims Administrator shall be paid exclusively out of the Gross Settlement Fund. In no event shall NEC TOKIN be separately responsible for any fees or expenses of the Claims Administrator. 6. Motion for Final Approval and Entry of Final Judgment. Not less than thirty five (35) days prior to the date set by the Court to consider whether this Settlement should be finally approved, Class Counsel shall submit a motion for final approval of the Settlement by the Court. The Settling Parties shall jointly seek entry of the Final Approval Order and Judgment: (a) certifying the Classes, pursuant to Federal Rule of Civil Procedure 23, solely for purposes of this Settlement; (b) fully and finally approving the Settlement contemplated by this Settlement Agreement and its terms as being fair, reasonable and adequate within the meaning of Federal Rule of Civil Procedure 23 and directing its consummation pursuant to its terms and conditions; (c) finding that the notice given to the Class Members constituted the best notice practicable under the circumstances and complies in all respects with the requirements of Federal Rule of Civil Procedure 23 and due process; (d) directing that the Actions be dismissed with prejudice as to NEC TOKIN and, except as provided for herein, without costs; (e) discharging and releasing the Releasees from all Released Claims;

Settlement Agreement; Case No. 3:14-cv-03264-JD 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP (f) permanently barring and enjoining the institution and prosecution, by Indirect Purchaser Plaintiffs and Class Members, of any other action against the Releasees in any court asserting any claims related in any way to the Released Claims; (g) reserving continuing and exclusive jurisdiction over the Settlement, including all future proceedings concerning the administration, consummation and enforcement of this Settlement Agreement; (h) expressly determining pursuant to Federal Rule of Civil Procedure 54(b) that there is no just reason for delay and directing entry of a Final Judgment as to NEC TOKIN; and (i) containing such other and further provisions consistent with the terms of this Settlement Agreement to which the parties expressly consent in writing. 7. Stay Order. Upon the date that the Court enters an order preliminarily approving the Settlement, Indirect Purchaser Plaintiffs and members of the Classes shall be barred and enjoined from commencing, instituting or continuing to prosecute any action or any proceeding in any court of law or equity, arbitration tribunal, administrative forum or other forum of any kind worldwide based on the Released Claims. Nothing in this provision shall prohibit the Indirect Purchaser Plaintiffs or Class Counsel from continuing to participate in discovery in the Actions that is initiated by other plaintiffs or that is subject to and consistent with the cooperation provisions set forth in ¶¶30-36, infra. C. Releases 8. Released Claims. Upon the Effective Date, the Releasors (regardless of whether any such Releasor ever seeks or obtains any recovery by any means, including, without limitation, by submitting a Proof of Claim and Release, any distribution from the Gross Settlement Fund) shall be deemed to have, and by operation of the Judgment shall have fully, finally and forever released, relinquished and discharged all Released Claims against all Releasees. 9. No Future Actions Following Release. The Releasors shall not, after the Effective Date, seek (directly or indirectly) to commence, institute, maintain or prosecute any suit, action or

Settlement Agreement; Case No. 3:14-cv-03264-JD 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP complaint or collect from or proceed against NEC TOKIN or any other Releasee (including pursuant to the Actions) based on the Released Claims in any forum worldwide, whether on his, her or its own behalf or as part of any putative, purported or certified class of purchasers or consumers. 10. Covenant Not to Sue. Releasors hereby covenant not to sue the Releasees with respect to any such Released Claims. Releasors shall be permanently barred and enjoined from instituting, commencing or prosecuting against the Releasees any claims based in whole or in part on the Released Claims. The Settling Parties contemplate and agree that this Settlement Agreement may be pleaded as a bar to a lawsuit, and an injunction may be obtained, preventing any action from being initiated or maintained in any case sought to be prosecuted on behalf of Indirect Purchaser Plaintiffs with respect to the Released Claims. 11. Waiver of California Civil Code § 1542 and Similar Laws. The Releasors acknowledge that, by executing this Settlement Agreement, and for the consideration received hereunder, it is their intention to release, and they are releasing, all Released Claims, even Unknown Claims. In furtherance of this intention, the Releasors expressly waive and relinquish, to the fullest extent permitted by law, any rights or benefits conferred by the provisions of California Civil Code § 1542 or equivalent, similar or comparable laws or principles of law. The Releasors acknowledge that they have been advised by Class Counsel of the contents and effects of California Civil Code § 1542, and hereby expressly waive and release with respect to the Released Claims any and all provisions, rights and benefits conferred by California Civil Code § 1542 or by any equivalent, similar or comparable law or principle of law in any jurisdiction. The Releasors may hereafter discover facts other than or different from those which they know or believe to be true with respect to the subject matter of the Released Claims, but the Releasors hereby expressly waive and fully, finally and forever settle and release any known or unknown, suspected or unsuspected, foreseen or unforeseen, asserted or unasserted, contingent or non-contingent, and accrued or unaccrued claim, loss or damage with respect to the Released Claims, whether or not concealed or hidden, without regard to the subsequent discovery or existence of such additional or different facts. The release of

Settlement Agreement; Case No. 3:14-cv-03264-JD 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP unknown, unanticipated, unsuspected, unforeseen, and unaccrued losses or claims in this paragraph is not a mere recital. 12. Claims Excluded from Release. Notwithstanding the foregoing, the releases provided herein shall not release claims against NEC TOKIN for product liability, breach of contract, breach of warranty or personal injury, or any other claim unrelated to the allegations in the Actions of restraint of competition or unfair competition with respect to Capacitors. Additionally, the releases provided herein shall not release any claims to enforce the terms of this Settlement Agreement. D. Settlement Fund 13. Settlement Payment. NEC TOKIN shall pay by wire transfer the Settlement Amount to the Escrow Agent pursuant to mutually agreeable escrow instructions in four installments. The first installment shall be paid on or before July 29, 2016, in the amount of $5 million. The second installment shall be paid on or before May 15, 2017, in the amount of $2.75 million. The third installment shall be paid on or before May 15, 2018, in the amount of $2.75 million. The fourth installment shall be paid on or before May 15, 2019, in the amount of $2.75 million. This amount constitutes the total amount of payment that NEC TOKIN is required to make in connection with this Settlement Agreement. This amount shall not be subject to reduction, and upon the occurrence of the Effective Date, no funds shall revert to NEC TOKIN except as provided herein. The Escrow Agent shall only act in accordance with the mutually agreed escrow instructions. 14. Disbursements Prior to Effective Date. No amount may be disbursed from the Gross Settlement Fund unless and until the Effective Date, except that: (a) Notice and Administrative Costs, which may not exceed $350,000, may be paid from the Gross Settlement Fund as they become due; (b) Taxes and Tax Expenses (as defined in ¶18 below) may be paid from the Gross Settlement Fund as they become due, and (c) attorneys’ fees and reimbursement of litigation costs may be paid as ordered by the Court, which may be disbursed during the pendency of any appeals that may be taken from the judgment to be entered by the Court finally approving this Settlement.

Settlement Agreement; Case No. 3:14-cv-03264-JD 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP 15. Refund by Escrow Agent. If the Settlement as described herein is not finally approved by any court, or it is terminated as provided herein, or the Judgment is overturned on appeal or by writ, the Gross Settlement Fund, including the Settlement Amount and all interest earned on the Settlement Amount while held in escrow, excluding only Notice and Administrative Costs and Taxes and/or Tax Expenses (as defined in ¶18 below), shall be refunded, reimbursed and repaid by the Escrow Agent to NEC TOKIN within five (5) business days after receiving notice pursuant to ¶42 below. 16. Refund by Class Counsel. If the Settlement as described herein is not finally approved by any court, or it is terminated as provided herein, or the Judgment is overturned on appeal or by writ, any attorneys’ fees and costs previously paid pursuant to this Settlement Agreement (as well as interest on such amounts) shall be refunded, reimbursed and repaid by Class Counsel to NEC TOKIN within thirty (30) business days after receiving notice pursuant to ¶42 below. 17. No Additional Payments by NEC TOKIN. Under no circumstances will NEC TOKIN be required to pay more or less than the Settlement Amount pursuant to this Settlement Agreement and the Settlement set forth herein. For purposes of clarification, the payment of any Fee and Expense Award (as defined in ¶27 below), the Notice and Administrative Costs, and any other costs associated with the implementation of this Settlement Agreement shall be exclusively paid from the Settlement Amount. 18. Taxes. The Settling Parties and the Escrow Agent agree to treat the Gross Settlement Fund as being at all times a “qualified settlement fund” within the meaning of Treas. Reg. §1.468B- 1. The Escrow Agent shall timely make such elections as necessary or advisable to carry out the provisions of this paragraph, including the “relation-back election” (as defined in Treas. Reg. §1.468B-1) back to the earliest permitted date. Such elections shall be made in compliance with the procedures and requirements contained in such regulations. It shall be the responsibility of the Escrow Agent to prepare and deliver timely and properly the necessary documentation for signature by all necessary parties, and thereafter to cause the appropriate filing to occur.

Settlement Agreement; Case No. 3:14-cv-03264-JD 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP (a) For the purpose of §468B of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, the “administrator” shall be the Escrow Agent. The Escrow Agent shall satisfy the administrative requirements imposed by Treas. Reg. §1.468B-2 by, e.g., (i) obtaining a taxpayer identification number, (ii) satisfying any information reporting or withholding requirements imposed on distributions from the Gross Settlement Fund, and (iii) timely and properly filing applicable federal, state and local tax returns necessary or advisable with respect to the Gross Settlement Fund (including, without limitation, the returns described in Treas. Reg. §1.468B-2(k)) and paying any taxes reported thereon. Such returns (as well as the election described in this paragraph) shall be consistent with the provisions of this paragraph and in all events shall reflect that all Taxes as defined in ¶18(b) below on the income earned by the Gross Settlement Fund shall be paid out of the Gross Settlement Fund as provided in ¶18(b) hereof; (b) The following shall be paid out of the Gross Settlement Fund: (i) all taxes (including any estimated taxes, interest or penalties) arising with respect to the income earned by the Gross Settlement Fund, including, without limitation, any taxes or tax detriments that may be imposed upon NEC TOKIN or its counsel with respect to any income earned by the Gross Settlement Fund for any period during which the Gross Settlement Fund does not qualify as a “qualified settlement fund” for federal or state income tax purposes (collectively, “Taxes”); and (ii) all expenses and costs incurred in connection with the operation and implementation of this paragraph, including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) the returns described in this paragraph (collectively, “Tax Expenses”). In all events neither NEC TOKIN nor its counsel shall have any liability or responsibility for the Taxes or the Tax Expenses. With funds from the Gross Settlement Fund, the Escrow Agent shall indemnify and hold harmless NEC TOKIN and its counsel for Taxes and Tax Expenses (including, without limitation, Taxes payable by reason of any such indemnification). Further, Taxes and Tax Expenses shall be treated as, and considered to be, a cost of administration of the Gross Settlement Fund and shall timely be paid by the Escrow Agent out of

Settlement Agreement; Case No. 3:14-cv-03264-JD 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP the Gross Settlement Fund without prior order from the Court and the Escrow Agent shall be obligated (notwithstanding anything herein to the contrary) to withhold from distribution to Authorized Claimants any funds necessary to pay such amounts, including the establishment of adequate reserves for any Taxes and Tax Expenses (as well as any amounts that may be required to be withheld under Treas. Reg. §1.468B-2(1)(2)); neither NEC TOKIN nor its counsel is responsible therefor, nor shall they have any liability therefor. The Settling Parties agree to cooperate with the Escrow Agent, each other, their tax attorneys and their accountants to the extent reasonably necessary to carry out the provisions of this paragraph. E. Administration and Distribution of Gross Settlement Fund 19. Time to Appeal. The time to appeal from an approval of the Settlement shall commence upon the Court’s entry of the Judgment regardless of whether or not either the Distribution Plan or an application for attorneys’ fees and expenses has been submitted to the Court or resolved. 20. Distribution of Gross Settlement Fund. Upon further orders of the Court, the Claims Administrator, subject to such supervision and direction of the Court and/or Class Counsel as may be necessary or as circumstances may require, shall administer the claims submitted by members of the Classes and shall oversee distribution of the Gross Settlement Fund to Authorized Claimants pursuant to the Distribution Plan. Subject to the terms of this Settlement Agreement and any order(s) of the Court, except for the $350,000 of the Gross Settlement Fund which may be used towards notice to the class and the costs of administration on a non-refundable basis, Class Counsel shall be responsible for the following: (a) To pay all costs and expenses reasonably and actually incurred in connection with providing notice to the Classes, administering and distributing the Gross Settlement Fund to Authorized Claimants, and paying escrow fees and costs, if any; (b) To pay all costs and expenses, if any, reasonably and actually incurred in soliciting claims and assisting with the filing and processing of such claims; (c) To pay the Taxes and Tax Expenses as defined herein;

Settlement Agreement; Case No. 3:14-cv-03264-JD 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP (d) To pay any Attorney Fee and Expense Award that is allowed by the Court, subject to and in accordance with this Settlement Agreement; and (e) To distribute the balance of the Net Settlement Fund to Authorized Claimants as allowed by this Settlement Agreement, any Distribution Plan or order of the Court. 21. Distribution of Net Settlement Fund. The Net Settlement Fund shall be distributed in accordance with the Distribution Plan that is approved by the Court. 22. All Persons who fall within the definition of the Classes who do not timely and validly request to be excluded from the Classes shall be subject to and bound by the provisions of this Settlement Agreement, the releases contained herein, and the Judgment with respect to all Released Claims, regardless of whether such Persons seek or obtain by any means, including, without limitation, by submitting a Proof of Claim and Release or any similar document, any distribution from the Gross Settlement Fund or the Net Settlement Fund. 23. No Liability for Distribution of Settlement Funds. Neither the Releasees nor their counsel shall have any responsibility for, interest in or liability whatsoever with respect to the distribution of the Gross Settlement Fund; the Distribution Plan; the determination, administration, or calculation of claims; the Gross Settlement Fund’s qualification as a “qualified settlement fund”; the payment or withholding of Taxes or Tax Expenses; the distribution of the Net Settlement Fund; or any losses incurred in connection with any such matters. The Releasors hereby fully, finally and forever release, relinquish and discharge the Releasees and their counsel from any and all such liability. No Person shall have any claim against Class Counsel or the Claims Administrator based on the distributions made substantially in accordance with this Settlement Agreement and the Settlement contained herein, the Distribution Plan or further orders of the Court. 24. Balance Remaining in Net Settlement Fund. If after the Distribution Plan is executed there is any balance remaining in the Net Settlement Fund (whether by reason of tax refunds, uncashed checks or otherwise), Class Counsel may reallocate such a balance among Authorized Claimants in an equitable and economic fashion, distribute the remaining funds through cy pres, or

Settlement Agreement; Case No. 3:14-cv-03264-JD 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP allow the money to escheat to federal or state governments, subject to Court approval. In no event shall the Net Settlement Fund revert to NEC TOKIN. 25. Distribution Plan Not Part of Settlement. It is understood and agreed by the Settling Parties that any Distribution Plan, including any adjustments to any Authorized Claimant’s claim, is not a part of this Settlement Agreement and is to be considered by the Court separately from the Court’s consideration of the fairness, reasonableness and adequacy of the Settlement set forth in this Settlement Agreement, and any order or proceedings relating to the Distribution Plan shall not operate to terminate or cancel this Settlement Agreement or affect the finality of the Judgment, the Final Approval Order, or any other orders entered pursuant to this Settlement Agreement. The time to appeal from an approval of the Settlement shall commence upon the Court’s entry of the Judgment regardless of whether either the Distribution Plan or an application for attorneys’ fees and expenses has been submitted to the Court or approved. F. Attorneys’ Fees and Reimbursement of Expenses 26. Fee and Expense Application. Class Counsel may submit an application or applications (the “Fee and Expense Application”) for distributions from the Gross Settlement Fund, for: (a) an award of attorneys’ fees; plus (b) reimbursement of expenses incurred in connection with prosecuting the Actions; plus (c) any interest on such attorneys’ fees and expenses (until paid) at the same rate and for the same periods as earned by the Gross Settlement Fund, as appropriate, and as may be awarded by the Court. 27. Payment of Fee and Expense Award. Any amounts that are awarded by the Court pursuant to the above paragraph (the “Fee and Expense Award”) shall be paid from the Gross Settlement Fund consistent with the provisions of this Settlement Agreement. 28. Award of Fees and Expenses Not Part of Settlement. The procedure for, and the allowance or disallowance by the Court of, the Fee and Expense Application are not part of the Settlement set forth in this Settlement Agreement, and are to be considered by the Court separately from the Court’s consideration of the fairness, reasonableness and adequacy of the Settlement set

Settlement Agreement; Case No. 3:14-cv-03264-JD 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP forth in this Settlement Agreement. Any order or proceeding relating to the Fee and Expense Application, or any appeal from any Fee and Expense Award or any other order relating thereto or reversal or modification thereof, shall not operate to terminate or cancel this Settlement Agreement, or affect or delay the finality of the Judgment and the Settlement of the Actions as set forth herein. No order of the Court or modification or reversal on appeal of any order of the Court concerning any Fee and Expense Award or Distribution Plan shall constitute grounds for cancellation or termination of this Settlement Agreement. 29. No Liability for Fees and Expenses of Class Counsel. NEC TOKIN shall have no responsibility for, and no liability whatsoever with respect to, any payment(s) to Class Counsel pursuant to this Settlement Agreement and/or to any other Person who may assert some claim thereto or any Fee and Expense Award that the Court may make in the Actions, other than to make the Settlement Payment as set forth in ¶13 of this Settlement Agreement. G. Cooperation 30. Cooperation as Consideration. In return for the Release provided herein, NEC TOKIN agrees to pay the Settlement Amount and agrees to provide cooperation to Indirect Purchaser Plaintiffs as set forth specifically below. 31. Attorney Proffer. Within thirty (30) business days after Preliminary Approval by the Court of this Settlement Agreement or such time as mutually agreed by the Settling Parties, counsel for NEC TOKIN shall provide Class Counsel with an oral proffer of facts known to them about meetings or communications between competitors in the Capacitors industry. Should the attorney proffer required by this paragraph not occur within the 30 business days after Preliminary Approval, Indirect Purchaser Plaintiffs do not waive their right to an attorney proffer. 32. Cooperation Subject to and Consistent with Prior Obligations. NEC TOKIN and the Indirect Purchaser Plaintiffs shall not be obligated to provide cooperation, including but not limited to the further cooperation described in ¶33 below, that would violate an applicable court order or NEC TOKIN's commitments to the United States Department of Justice (“DOJ”) or any other

Settlement Agreement; Case No. 3:14-cv-03264-JD 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP governmental entity. With the exception of DOJ’s objection discussed in ¶33, below, NEC TOKIN represents that it is not presently aware of any court order prohibiting, or any objection from an enforcement authority to NEC TOKIN providing the cooperation contemplated by this section. Additionally, Indirect Purchaser Plaintiffs and NEC TOKIN will take reasonable efforts to accommodate the other’s efforts to minimize duplication in the providing of any cooperation. 33. Further Cooperation. (a) NEC TOKIN shall extend to Indirect Purchaser Plaintiffs a Most Favored Nations Provision, with respect to cooperation. To the extent that NEC TOKIN enters into settlement agreements regarding civil claims with other parties, Indirect Purchaser Plaintiffs shall obtain at least as much cooperation as those other parties. (b) NEC TOKIN shall, to the extent it has not done so already, produce ordinary course of business documents that it has provided to the U.S. and foreign law enforcement authorities, concerning Capacitors, to the extent they exist, within fifteen (15) business days after Preliminary Approval by the Court of this Settlement Agreement. NEC TOKIN represents that DOJ continues to object to a production of English translations to the Indirect Purchaser Plaintiffs as part of this Settlement Agreement and its cooperation obligations thereto. Accordingly, NEC TOKIN shall not be required to produce such English translations unless the DOJ formally or informally withdraws its objection thereto, or the Indirect Purchaser Plaintiffs obtain an order of the Court permitting production of such documents. The Indirect Purchaser Plaintiffs expressly reserve their right to move the Court for an order permitting production of such documents. (c) NEC TOKIN shall make up to six current employees available for interviews by Plaintiffs, deposition, and testimony at hearings or trial. To the extent feasible, the employees shall be made available, at NEC TOKIN’s expense, at a location in the United States. (d) NEC TOKIN shall encourage up to six former employees to make themselves available for interviews by Plaintiffs, deposition, and testimony at hearings or trials. To the extent that the

Settlement Agreement; Case No. 3:14-cv-03264-JD 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP former employees agree to be available at a location in the United States, NEC TOKIN shall cover the costs of their travel expenses. (e) NEC TOKIN shall continue to assist Indirect Purchaser Plaintiffs in understanding and using the transactional data NEC TOKIN has produced. (f) NEC TOKIN shall provide cooperation that it represented it could provide in settlement discussions with the Indirect Purchaser Plaintiffs, as memorialized by the parties’ writings. Such information shall not be filed with the Court, absent an Order of the Court requiring disclosure of such information. If the Court orders disclosure of such information, the information shall be filed under seal with the Court, unless the Court orders otherwise. (g) NEC TOKIN will engage in reasonable efforts to provide evidence in admissible form to help establish these facts of the conspiracy, including declarations authenticating evidence, and laying the business records foundation under the Federal Rules of Evidence. (h) NEC TOKIN agrees to provide assistance reasonably necessary to establish the foundation for and admissibility of documents it has produced in the Actions or pursuant to this Settlement Agreement, including, as reasonably necessary, producing at trial in person, by deposition or by declaration or affidavit (Federal Rules of Evidence 902(11) and (12)), whichever is legally required, one current employee to testify as to the genuineness, status as business records, and/or authenticity any documents produced by NEC TOKIN in these Actions, including NEC TOKIN’s transactional data, as necessary for use in briefing on class certification, dispositive motion practice or trial. 34. Minimizing burden. Indirect Purchaser Plaintiffs and Class Counsel shall coordinate with Direct Purchaser Plaintiffs and any other parties with whom NEC TOKIN has agreed to provide cooperation so as to minimize NEC TOKIN’s burden and costs in providing cooperation. 35. Other Discovery. Upon the Execution Date, neither NEC TOKIN nor the Indirect Purchaser Plaintiffs shall file motions against the other or initiate or participate in any discovery, motion or proceeding directly adverse to the other in connection with the Actions, except as

Settlement Agreement; Case No. 3:14-cv-03264-JD 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP specifically provided for herein. NEC TOKIN and the Indirect Purchaser Plaintiffs shall not be obligated to respond or supplement prior responses to formal discovery that has been previously propounded by the other in the Actions. 36. Resolution of Disputes. To the extent the Settling Parties disagree about the interpretation or enforcement of any terms of this Settlement Agreement relating to future cooperation by NEC TOKIN, or about the triggering of the threshold specified in the Confidential Termination Agreement described in ¶39(b), they agree to submit such disputes for binding resolution by former United States District Judge Layn Phillips or another mutually agreed neutral. H. Conditions of Settlement, Effect of Disapproval, Cancellation or Termination 37. Occurrence of Effective Date. Upon the occurrence of all of the events required in order to trigger the Effective Date as defined in ¶1(m), supra, any and all remaining interest or right of NEC TOKIN in or to the Gross Settlement Fund, if any, shall be absolutely and forever extinguished, and the Gross Settlement Fund (less any Notice and Administrative Costs, Taxes or Tax Expenses or any Fee and Expense Award paid) shall be transferred from the Escrow Agent to the Claims Administrator as successor Escrow Agent within ten (10) days after the Effective Date. 38. Failure of Effective Date to Occur. If, for whatever reason, the Effective Date does not occur or is not met, then this Settlement Agreement shall be cancelled and terminated, subject to and in accordance with ¶42, below, unless the Settling Parties mutually agree in writing to proceed with this Settlement Agreement. 39. Exclusions. a. Any Class Member that wishes to seek exclusion from the Settlement Class by “opting out” must timely submit a written request for exclusion to the Claims Administrator. Class Counsel shall cause copies of requests for exclusion to be provided to NEC TOKIN’s counsel. No later than fourteen (14) days after the final date for mailing requests for exclusion, as determined by the Court as part of the Motion for Preliminary Approval, Class Counsel shall provide NEC TOKIN’s counsel with a complete and final list of opt-outs. With the Motion for Final Approval of the Settlement,

Settlement Agreement; Case No. 3:14-cv-03264-JD 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP Class Counsel will file with the Court a complete list of requests for exclusion from the Class, including only the name, city and state of the person or entity requesting exclusion. b. NEC TOKIN shall have the option to rescind and terminate this Settlement Agreement in its entirety and without liability of any kind if based on available data, the aggregate purchases of Electrolytic Capacitors purchased from distributors by Class Members that opt out pursuant to Paragraph 39(a) of this Settlement Agreement exceeds a threshold agreed to by Indirect Purchaser Plaintiffs and NEC TOKIN in the Confidential Termination Agreement that has been executed separately by Indirect Purchaser Plaintiffs and NEC TOKIN. NEC TOKIN shall exercise this option to rescind and terminate this Settlement Agreement by providing ten (10) business days written notice to Class Counsel. Upon such rescission and termination, Indirect Purchaser Plaintiffs and NEC TOKIN will notify the Court immediately and withdraw all pending motions filed to effectuate this Settlement. Indirect Purchaser Plaintiffs and NEC TOKIN will also, as may be required by the Court, submit the Confidential Termination Agreement to the Court for in camera review. In the event that NEC TOKIN exercises its option to rescind and terminate this Settlement Agreement: (i) this Settlement Agreement shall be null and void as to NEC TOKIN, and shall have no force or effect and shall be without prejudice to the rights and contentions of Releasees and Releasors in this or any other litigation; and (ii) the Gross Settlement fund shall be refunded promptly to NEC TOKIN, minus such payment (as set forth in this Settlement Agreement) of Notice and Administrative Costs and Taxes and Tax Expenses, consistent with the provisions of ¶¶14 and 18, respectively. 40. Objections. Settlement Class members who wish to object to any aspect of the Settlement must file with the Court a written statement containing their objection by end of the period to object to the Settlement. Any award or payment of attorneys’ fees made to counsel to an objector to the Settlement shall only be made by Court order and upon a showing of the benefit conferred to the class. In determining any such award of attorneys’ fees to an objectors’ counsel, the Court will consider the incremental value to the Class caused by any such objection. Any award of

Settlement Agreement; Case No. 3:14-cv-03264-JD 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP attorneys’ fees by the Court will be conditioned on the objector and his or her attorney stating under penalty of perjury that no payments shall be made to the objector or the objector’s counsel based on the objector’s participation in the matter - other than as ordered by the Court. 41. Failure to Enter Proposed Preliminary Approval Order, Final Approval Order or Judgment. If the Court does not enter the Preliminary Approval Order, the Final Approval Order or the Judgment, or if the Court enters the Final Approval Order and the Judgment and appellate review is sought and, on such review, the Final Approval Order or the Judgment is finally vacated, modified or reversed in a material way, then this Settlement Agreement and the Settlement incorporated therein shall be cancelled and terminated; provided, however, the Settling Parties agree to act in good faith to secure Final Approval of this Settlement and to attempt to address in good faith concerns regarding the Settlement identified by the Court and any court of appeal. No Settling Party shall have any obligation whatsoever to proceed under any terms other than substantially in the form provided and agreed to herein; provided, however, that no order of the Court concerning any Fee and Expense Application or Distribution Plan, or any modification or reversal on appeal of such order, shall constitute grounds for cancellation or termination of this Settlement Agreement by any Settling Party. Without limiting the foregoing, NEC TOKIN shall have, in its sole and absolute discretion, the option to terminate the Settlement in its entirety in the event that the Judgment, upon becoming Final, does not provide for the dismissal with prejudice of all of the Actions against them. 42. Termination. Unless otherwise ordered by the Court, in the event that the Effective Date does not occur or this Settlement Agreement should terminate, or be cancelled or otherwise fail to become effective for any reason, including, without limitation, in the event that NEC TOKIN elects to terminate this Settlement Agreement pursuant to ¶39(b), the Settlement as described herein is not finally approved by the Court, or the Judgment is reversed or vacated following any appeal taken therefrom, then:

Settlement Agreement; Case No. 3:14-cv-03264-JD 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP (a) within fifteen (15) business days after written notification of such event is sent by counsel for NEC TOKIN to the Escrow Agent, the Gross Settlement Fund excluding only Notice and Administrative Costs that have either been properly disbursed or are due and owing, Taxes and Tax Expenses that have been paid or that have accrued and will be payable at some later date, and attorneys’ fees and costs that have been disbursed pursuant to Court order will be refunded, reimbursed and repaid by the Escrow Agent to NEC TOKIN; if said amount or any portion thereof is not returned within such fifteen (15) day period, then interest shall accrue thereon at the rate of ten percent (10%) per annum until the date that said amount is returned; (b) within thirty (30) business days after written notification of such event is sent by Counsel for NEC TOKIN to Class Counsel, all attorneys’ fees and costs which have been disbursed to class counsel pursuant to Court order shall be refunded, reimbursed and repaid by Class Counsel to NEC TOKIN; (c) the Escrow Agent or its designee shall apply for any tax refund owed to the Gross Settlement Fund and pay the proceeds to NEC TOKIN, after deduction of any fees or expenses reasonably incurred in connection with such application(s) for refund, pursuant to such written request; (d) the Settling Parties shall be restored to their respective positions in the Actions as of the Execution Date, with all of their respective claims and defenses, preserved as they existed on that date; (e) the terms and provisions of this Settlement Agreement, with the exception of ¶¶43-45 (which shall continue in full force and effect), shall be null and void and shall have no further force or effect with respect to the Settling Parties, and neither the existence nor the terms of this Settlement Agreement (nor any negotiations preceding this Settlement Agreement nor any acts performed pursuant to, or in furtherance of, this Settlement Agreement) shall be used in the Actions or in any other action or proceeding for any purpose (other than to enforce the terms remaining in effect); and

Settlement Agreement; Case No. 3:14-cv-03264-JD 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP (f) any judgment or order entered by the Court in accordance with the terms of this Settlement Agreement shall be treated as vacated, nunc pro tunc. I. No Admission of Liability 43. Final and Complete Resolution. The Settling Parties intend the Settlement as described herein to be a final and complete resolution of all disputes between them with respect to the Actions and Released Claims and to compromise claims that are contested, and it shall not be deemed an admission by any Settling Party as to the merits of any claim or defense or any allegation made in the Actions. 44. Federal Rule of Evidence 408. The Settling Parties agree that this Settlement Agreement, its terms and the negotiations surrounding this Settlement Agreement shall be governed by Federal Rule of Evidence 408 and shall not be admissible or offered or received into evidence in any suit, action or other proceeding, except upon the written agreement of the Settling Parties hereto, pursuant to an order of a court of competent jurisdiction, or as shall be necessary to give effect to, declare or enforce the rights of the Settling Parties with respect to any provision of this Settlement Agreement. 45. Use of Agreement as Evidence. Neither this Settlement Agreement nor the Settlement, nor any act performed or document executed pursuant to or in furtherance of this Settlement Agreement or the Settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claims, of any allegation made in the Actions, or of any wrongdoing or liability of NEC TOKIN; or (b) is or may be deemed to be or may be used as an admission of, or evidence of, any liability, fault or omission of the Releasees in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal. Neither this Settlement Agreement nor the Settlement, nor any act performed or document executed pursuant to or in furtherance of this Settlement Agreement or the Settlement shall be admissible in any proceeding for any purpose, except to enforce the terms of the Settlement, and except that the Releasees may file this Settlement Agreement and/or the Judgment in any action for any purpose,

Settlement Agreement; Case No. 3:14-cv-03264-JD 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP including, but not limited to, in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim. The limitations described in this paragraph apply whether or not the Court enters the Preliminary Approval Order, the Final Approval Order or the Judgment. J. Miscellaneous Provisions 46. Voluntary Settlement. The Settling Parties agree that the Settlement Amount and the other terms of the Settlement as described herein were negotiated in good faith by the Settling Parties, and reflect a settlement that was reached voluntarily and after consultation with competent legal counsel. 47. Consent to Jurisdiction. NEC TOKIN and each Class Member hereby irrevocably submit to the exclusive jurisdiction of the Court only for the specific purpose of any suit, action, proceeding or dispute arising out of or relating to this Settlement Agreement or the applicability of this Settlement Agreement. Solely for purposes of such suit, action or proceeding, to the fullest extent that they may effectively do so under applicable law, NEC TOKIN and the Class Members irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim or objection that they are not subject to the jurisdiction of the Court or that the Court is in any way an improper venue or an inconvenient forum. Nothing herein shall be construed as a submission to jurisdiction for any purpose other than any suit, action, proceeding or dispute arising out of or relating to this Settlement Agreement or the applicability of this Settlement Agreement. 48. Resolution of Disputes; Retention of Exclusive Jurisdiction. Subject to ¶36, supra, and the Confidential Termination Agreement referenced in Paragraph 39(b) of this Settlement Agreement, the Court shall retain exclusive jurisdiction over the implementation and enforcement of this Settlement Agreement. 49. Binding Effect. This Settlement Agreement shall be binding upon, and inure to the benefit of, the successors and assigns of the parties hereto. Without limiting the generality of the

Settlement Agreement; Case No. 3:14-cv-03264-JD 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP foregoing, each and every covenant and agreement herein by Indirect Purchaser Plaintiffs and Class Counsel shall be binding upon all Class Members. 50. Authorization to Enter Settlement Agreement. The undersigned representatives of NEC TOKIN represent that they are fully authorized to enter into and to execute this Settlement Agreement on behalf of NEC TOKIN. Class Counsel, on behalf of Indirect Purchaser Plaintiffs and the Classes, represent that they are, subject to Court approval, expressly authorized to take all action required or permitted to be taken by or on behalf of the Indirect Purchaser Plaintiffs and the Classes pursuant to this Settlement Agreement to effectuate its terms and to enter into and execute this Settlement Agreement and any modifications or amendments to this Settlement Agreement on behalf of the Classes that they deem appropriate. 51. Notices. All notices under this Settlement Agreement shall be in writing. Each such notice shall be given either by (a) e-mail; (b) hand delivery; (c) registered or certified mail, return receipt requested, postage pre-paid; (d) Federal Express or similar overnight courier; or (e) facsimile and first class mail, postage pre-paid and, if directed to any Class Member, shall be addressed to Class Counsel at their addresses set forth below, and if directed to NEC TOKIN, shall be addressed to their attorneys at the addresses set forth below or such other addresses as Class Counsel or NEC TOKIN may designate, from time to time, by giving notice to all parties hereto in the manner described in this paragraph. If directed to the Indirect Purchaser Plaintiffs, address notice to: COTCHETT, PITRE & MCCARTHY Steven N. Williams (swilliams@cpmlegal.com) San Francisco Airport Office Center 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: 650-697-6000 Facsimile: 650-697-0577

Settlement Agreement; Case No. 3:14-cv-03264-JD 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP If directed to NEC TOKIN, address notice to: GIBSON, DUNN & CRUTCHER LLP George A. Nicoud III (tnicoud@gibsondunn.com) 555 Mission Street San Francisco, CA 94105 Telephone:415-393-8200 Facsimile: 415-393-8306 52. Headings. The headings used in this Settlement Agreement are intended for the convenience of the reader only and shall not affect the meaning or interpretation of this Settlement Agreement. 53. No Party Deemed to Be the Drafter. None of the parties hereto shall be deemed to be the drafter of this Settlement Agreement or any provision hereof for the purpose of any statute, case law or rule of interpretation or construction that would or might cause any provision to be construed against the drafter hereof. 54. Choice of Law. This Settlement Agreement shall be considered to have been negotiated, executed and delivered, and to be wholly performed, in the State of California, and the rights and obligations of the parties to this Settlement Agreement shall be construed and enforced in accordance with, and governed by, the internal, substantive laws of the State of California without giving effect to that State’s choice of law principles. 55. Amendment; Waiver. This Settlement Agreement shall not be modified in any respect except by a writing executed by all the parties hereto, and the waiver of any rights conferred hereunder shall be effective only if made by written instrument of the waiving party. The waiver by any party of any breach of this Settlement Agreement shall not be deemed or construed as a waiver of any other breach, whether prior, subsequent or contemporaneous, of this Settlement Agreement.

Settlement Agreement; Case No. 3:14-cv-03264-JD 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP 56. Execution in Counterparts. This Settlement Agreement may be executed in one or more counterparts. All executed counterparts and each of them shall be deemed to be one and the same instrument. Counsel for the parties to this Settlement Agreement shall exchange among themselves original signed counterparts and a complete set of executed counterparts shall be filed with the Court. 57. Notification of State Officials. NEC TOKIN shall be responsible for providing all notices required by the Class Action Fairness Act to be provided to state attorneys general or to the United States of America. 58. Entire Agreement. This Settlement Agreement and the Confidential Termination Agreement referenced in Paragraph 39(b) of this Settlement Agreement constitute the entire agreement between the Settling Parties and no representations, warranties or inducements have been made to any party concerning this Settlement Agreement and the Confidential Termination Agreement other than the representations, warranties and covenants contained and memorialized in them. It is understood by the Settling Parties that, except for the matters expressly represented in them, the facts or law with respect to which this Settlement Agreement and the Confidential Termination Agreement are entered into may turn out to be other than or different from the facts now known to each party or believed by such party to be true; each party therefore expressly assumes the risk of the facts or law turning out to be so different, and agrees that this Settlement Agreement and the Confidential Termination Agreement shall be in all respects effective and not subject to termination by reason of any such different facts or law. 59. Except as otherwise provided herein, each party shall bear its own costs and attorneys’ fees. IN WITNESS WHEREOF, the parties hereto, through their fully authorized representatives, have executed this Settlement Agreement as of the date first herein above written.

XML

Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document and Entity Information
Entity Registrant Name	KEMET CORP
Entity Central Index Key	0000887730
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		46,237,429
Document Fiscal Year Focus	2017
Document Fiscal Period Focus (Q1,Q2,Q3,FY)	Q1

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Current assets:
Cash and cash equivalents	$ 52,938	$ 65,004
Accounts receivable, net	89,085	93,168
Inventories, net	167,916	168,879
Prepaid expenses and other	30,925	25,496
Total current assets	340,864	352,547
Noncurrent Assets:
Property, plant and equipment, net of accumulated depreciation of $816,331 and $815,338 as of June 30, 2016 and March 31, 2016, respectively	231,688	241,839
Goodwill	40,294	40,294
Intangible assets, net	32,613	33,301
Equity Method Investments	15,172	20,334
Deferred income taxes	7,605	8,397
Other assets	2,744	3,068
Total assets	670,980	699,780
Current liabilities:
Current portion of long-term debt	0	2,000
Accounts payable	66,825	70,981
Accrued expenses	41,898	50,320
Taxes Payable, Current	216	453
Total current liabilities	108,939	123,754
Liabilities, Noncurrent [Abstract]
Long-term debt, less current portion	385,968	385,833
Other non-current obligations	84,694	74,892
Deferred income taxes	2,984	2,820
Stockholders’ equity:
Preferred stock, par value $0.01, authorized 10,000 shares, none issued	0	0
Common stock, par value $0.01, authorized 175,000 shares, issued 46,508 shares at June 30, 2016 and March 31, 2016	465	465
Additional paid-in capital	444,772	452,821
Retained deficit	(311,845)	(299,510)
Accumulated other comprehensive income	(43,939)	(31,425)
Treasury stock, at cost (271 and 611 shares at June 30, 2016 and March 31, 2016, respectively)	(1,058)	(9,870)
Total stockholders’ equity	88,395	112,481
Total liabilities and stockholders’ equity	$ 670,980	$ 699,780

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Property, Plant and Equipment, Net [Abstract]
Property, Plant and Equipment, Gross	$ 1,048,019	$ 1,057,177
Property and equipment, accumulated depreciation	816,331	815,338
Property, Plant and Equipment, Net	$ 231,688	$ 241,839
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	10,000,000	10,000,000
Preferred stock, issued shares	0	0
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common stock, authorized shares	175,000,000	175,000,000
Common stock, issued shares	46,508,000	46,508,000
Treasury Stock, Shares	271,000	611,000

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Revenues [Abstract]
Net sales	$ 184,935	$ 187,590
Operating costs and expenses:
Cost of sales	142,412	147,877
Selling, general and administrative expenses	25,914	30,430
Research and development	6,932	6,274
Restructuring charges	688	1,824
Net (gain) loss on sales and disposals of assets	91	(58)
Total operating costs and expenses	176,037	186,347
Operating income (loss)	8,898	1,243
Non-operating (income) expense:
Interest income	3	3
Interest expense	9,923	10,013
Change in value of NEC TOKIN options	12,000	29,200
Other (income) expense, net	(2,394)	916
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(10,628)	(38,883)
Income Tax Expense (Benefit)	(1,800)	248
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,428)	(38,635)
Equity income (loss) from NEC TOKIN	223	1,585
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (12,205)	$ (37,050)
Net income (loss) per basic and diluted share:
Net income (loss) per basic and diluted share	$ (0.26)	$ (0.81)
Weighted-average shares outstanding:
Basic	46,349	45,552
Diluted	46,349	45,552

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Net Income (Loss) Available to Common Stockholders, Basic	$ (12,205)	$ (37,050)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(14,388)	1,421
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(12,514)	2,113
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	(24,719)	(34,937)
Foreign currency translation gains (losses)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(6,386)	5,865
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(6,386)	5,865
Accumulated Defined Benefit Plans Adjustment [Member]
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	163	167
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	163	167
Post-retirement plan adjustments
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(42)	(40)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	42	40
Forward Contracts [Member]
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(2,618)	(3,512)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(1,753)	(565)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(865)	(2,947)
Foreign exchange contracts
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(5,384)	(932)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	$ (5,384)	$ (932)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Statement of Cash Flows [Abstract]
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (12,205)	$ (37,050)
Operating Activities:
Depreciation and amortization	9,436	9,917
Equity income (loss) from NEC TOKIN	223	1,585
Non-cash debt and financing costs	190	220
Stock-based compensation expense	1,228	1,279
Change in value of NEC TOKIN options	12,000	29,200
Net (gain) loss on sales and disposals of assets	91	(58)
Pension and other post-retirement benefits	709	127
Change in deferred income taxes	1,294	(934)
Change in operating assets	(2,357)	(20,201)
Change in operating liabilities	(13,088)	(2,673)
Other	(111)	234
Net cash provided by (used in) operating activities	(3,036)	(21,524)
Investing activities:
Capital expenditures	6,167	5,773
Payments to Acquire Investments	0	(2,892)
Net cash provided by (used in) investing activities	(6,167)	(8,665)
Financing activities:
Proceeds from revolving line of credit	0	8,000
Payments of revolving line of credit	0	(2,500)
Payments on long-term debt	(1,870)	(481)
Payments for Repurchase of Common Stock	595	544
Net cash provided by (used in) financing activities	(2,465)	4,475
Net increase (decrease) in cash and cash equivalents	11,668	25,714
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of foreign currency fluctuations on cash	(398)	411
Cash and cash equivalents at beginning of fiscal period	65,004	56,362
Cash and cash equivalents at end of fiscal period	$ 52,938	$ 31,059

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Basis of Financial Statement Presentation

3 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Financial Statement Presentation

Basis of Financial Statement Presentation

The condensed consolidated financial statements contained herein are unaudited and have been prepared from the books and records of KEMET Corporation and its subsidiaries (“KEMET” or the “Company”). In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q, and therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Although the Company believes the disclosures are adequate to make the information presented not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended March 31, 2016 (the “Company’s 2016 Annual Report”).

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. In consolidation, all significant intercompany amounts and transactions have been eliminated.  Certain prior year amounts have been reclassified to conform to current year presentation.  Net sales and operating results for the quarter ended June 30, 2016 are not necessarily indicative of the results to be expected for the full year.

The Company’s significant accounting policies are presented in the Company’s 2016 Annual Report.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and judgments based on historical data and other assumptions that management believes are reasonable.  These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. In addition, they affect the reported amounts of revenues and expenses during the reporting period.

The Company’s judgments are based on management’s assessment as to the effect certain estimates, assumptions, or future trends or events may have on the financial condition and results of operations reported in the unaudited condensed consolidated financial statements. It is important that readers of these unaudited financial statements understand that actual results could differ from these estimates, assumptions, and judgments.

Recently Issued Accounting Pronouncements

New accounting standards adopted/issued

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation-Stock Compensation. This guidance changes several aspects of the accounting for share-based payment award transactions, including: (1) Accounting and Cash Flow Classification for Excess Tax Benefits and Deficiencies, (2) Forfeitures, and (3) Tax Withholding Requirements and Cash Flow Classification. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early application is permitted, and KEMET adopted ASU No. 2016-09 as of April 1, 2016. The Company elected to discontinue estimating forfeitures that are expected to occur and recorded a cumulative effect adjustment to retained earnings for $130,000 as of April 1, 2016. There was no cumulative adjustment related to the excess tax benefits as the Company did not have an additional paid in capital pool of excess tax benefits. The adoption did not have a significant impact to the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The ASU requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than short-term leases). The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. Early application is permitted. The Company is currently in the process of assessing the impact the adoption of this guidance will have on the Company's consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The ASU requires an entity that uses first-in, first-out or average cost to measure its inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 was effective for interim and annual reporting periods beginning April 1, 2016. The adoption of ASU 2015-11 did not materially impact the Company's operating results and financial position.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The ASU specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. In August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which clarifies the treatment of debt issuance costs associated with line-of-credit arrangements that were not specifically addressed in ASU 2015-03. ASU 2015-15 states that entities may elect to continue to treat debt issuance costs associated with lines of credit as an asset, consistent with current treatment. The Company adopted these ASUs in the first quarter of 2017. The ASUs did not impact the Company's results of operations or liquidity. The balance sheet as of March 31, 2016 has been adjusted to reflect retrospective application of the new accounting guidance as follows (amounts in thousands):

	As Previously Reported		Retrospective Adjustment			As Adjusted
Other assets	$	5,832	$	(2,764	)	$	3,068
Total assets	702,544		(2,764		)	699,780
Long-term debt, less current portion	388,597		(2,764		)	385,833
Total liabilities and stockholders' equity	702,544		(2,764		)	699,780

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern. The new guidance requires management to assess if there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim period. If conditions or events give rise to substantial doubt, disclosures are required. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter; early application is permitted. This new guidance is not expected to have a material impact on the Company's Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes existing accounting standards for revenue recognition and creates a single framework. The new guidance requires either a retrospective or a modified retrospective approach at adoption. Early adoption is permitted, but not before Company's fiscal year that begins on April 1, 2017 (the original effective date of the ASU). Additional updates to Topic 606 issued by the FASB in 2015 and 2016 include the following:

• ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of the new guidance such that the new provisions will now be required for fiscal years, and interim periods within those years, beginning after December 15, 2017 (ASU No. 2015-14 is effective for the Company's fiscal year that begins on April 1, 2018 and interim periods within that fiscal year).

• ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations (reporting revenue gross versus net).

• ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies the implementation guidance on identifying performance obligations and classifying licensing arrangements.

• ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which clarifies the implementation guidance in a number of other areas.

The Company is currently in the process of assessing the impact the adoption of the new revenue standards will have on its consolidated financial statements and related disclosures, as well as the available transition methods.

There are currently no other accounting standards that have been issued that will have a significant impact on the Company’s financial position, results of operations or cash flows upon adoption.

Fair Value Measurement

The Company utilizes three levels of inputs to measure the fair value of (a) nonfinancial assets and liabilities that are recognized or disclosed at fair value in the Company’s consolidated financial statements on a recurring basis (at least annually) and (b) all financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The first two inputs are considered observable and the last is considered unobservable. The levels of inputs are as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and March 31, 2016 are as follows (amounts in thousands):

	Carrying Value June 30,			Fair Value June 30,			Fair Value Measurement Using									Carrying Value March 31,			Fair Value March 31,			Fair Value Measurement Using
	2016			2016			Level 1			Level 2 (2)			Level 3			2016			2016			Level 1			Level 2 (2)			Level 3
Assets (Liabilities):
Money markets (1)	$	739		$	739		$	739		$	—		$	—		$	738		$	738		$	738		$	—		$	—
Total debt	(385,968		)	(366,533		)	(337,115		)	(29,418		)	—			(387,833		)	(284,261		)	(254,713		)	(29,548		)	—
NEC TOKIN option,  net (3)	(32,600		)	(32,600		)	—			—			(32,600		)	(20,600		)	(20,600		)	—			—			(20,600		)

___________________

(1) Included in the line item “Cash and cash equivalents” on the Condensed Consolidated Balance Sheets.

(2) The valuation approach used to calculate fair value was a discounted cash flow based on the borrowing rate for each respective debt facility.

(3) See Note 5, Investment in NEC TOKIN, for a description of the NEC TOKIN option.  The value of the option depends on the enterprise value of NEC TOKIN Corporation and its forecasted EBITDA over the duration of the option. The option has been valued using option pricing methods in a Monte Carlo simulation.

The table below summarizes NEC TOKIN option valuation activity using significant unobservable inputs (Level 3) (amounts in thousands):

March 31, 2016	$	(20,600	)
Change in value of NEC TOKIN option	(12,000		)
June 30, 2016	$	(32,600	)

Inventories

Inventories are stated at the lower of cost or market.  The components of inventories are as follows (amounts in thousands):

	June 30, 2016			March 31, 2016
Raw materials and supplies	$	78,936		$	80,289
Work in process	48,478			46,631
Finished goods	55,697			58,060
	183,111			184,980
Inventory reserves	(15,195		)	(16,101		)
	$	167,916		$	168,879

Warrant

As of June 30, 2016 and March 31, 2016, 8.4 million shares were subject to the warrant (which expires June 30, 2019) held by K Equity, LLC.

Revenue Recognition

The Company ships products to customers based upon firm orders and revenue is recognized when the sales process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred and collectability is reasonably assured. Based on product availability, customer requirements and customer consent, the Company may ship products earlier than the initial planned ship date. Shipping and handling costs are included in cost of sales.

A portion of sales is related to products designed to meet customer specific requirements. These products typically have stricter tolerances making them useful to the specific customer requesting the product and to customers with similar or less stringent requirements. The Company recognizes revenue when title to the products transfers to the customer.

A portion of sales is made to distributors under agreements allowing certain rights of return and price protection on unsold merchandise held by distributors. The Company's distributor policy includes inventory price protection and "ship-from-stock and debit" ("SFSD") programs common in the industry.

KEMET's SFSD program provides authorized distributors with the flexibility to meet marketplace prices by allowing them, upon a pre-approved case-by-case basis, to adjust their purchased inventory cost to correspond with current market demand. Requests for SFSD adjustments are considered on an individual basis, require a pre-approved cost adjustment quote from their local KEMET sales representative and apply only to a specific customer, part, specified special price amount, specified quantity, and are only valid for a specific period of time. To estimate potential SFSD adjustments corresponding with current period sales, KEMET records a sales reserve based on historical SFSD credits, distributor inventory levels, and certain accounting assumptions, all of which are reviewed quarterly.

Most of the Company's distributors have the right to return to KEMET a certain portion of the purchased inventory, which, in general, does not exceed 6% of their purchases from the previous fiscal quarter. KEMET estimates future returns based on historical return patterns and records a corresponding allowance on the Condensed Consolidated Balance Sheets. The Company also offers volume based rebates on a case-by-case basis to certain customers in each of the Company's sales channels.

The establishment of sales allowances is recognized as a component of the line item "Net sales" on the Condensed Consolidated Statements of Operations, while the associated reserves are included in the line item "Accounts receivable, net" on the Condensed Consolidated Balance Sheets. Estimates used in determining sales allowances are subject to various factors. This includes, but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to the Company's estimates.

The Company provides a limited warranty to customers that the Company’s products meet certain specifications. The warranty period is generally limited to one year, and the Company’s liability under the warranty is generally limited to a replacement of the product or refund of the purchase price of the product. Warranty costs as a percentage of net sales were less than 1.0% for the quarters endedJune 30, 2016 and 2015. The Company recognizes warranty costs when they are both probable and reasonably estimable.

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Debt

3 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt

Debt

A summary of debt is as follows (amounts in thousands):

	June 30, 2016		March 31, 2016
10.5% Senior Notes, net (1)	$	352,087	$	353,952
Revolving line of credit	33,881		33,881
Total debt	385,968		387,833
Current maturities	—		(2,000		)
Total long-term debt	$	385,968	$	385,833

(1) As noted in Note 1, "Basis of Financial Statements Presentation", ASU No. 2015-03, Interest - Imputation of Interest, was adopted as of April 1, 2016. As such, debt issuance cost, if any, is included within the respective debt balance. Amounts shown are net of premium and debt issuance costs of $0.9 million and $1.0 million as of June 30, 2016 and March 31, 2016, respectively which reduce the 10.5% Senior Notes balance.

The line item “Interest expense” on the Condensed Consolidated Statements of Operations for the quarters endedJune 30, 2016 and 2015, consists of the following (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Contractual interest expense	$	9,710		$	9,746
Capitalized interest	(52		)	—
Amortization of debt issuance costs	348			348
Amortization of debt (premium) discount	(199		)	(181		)
Imputed interest on acquisition-related obligations	41			53
Interest expense on capital lease	75			47
Total interest expense	$	9,923		$	10,013

Revolving Line of Credit

On May 2, 2016, the Loan and Security Agreement dated September 30, 2010, as amended, by and among KEMET Electronics Corporation ("KEC"), KEMET Electronics Marketing (S) Pte. Ltd., KEMET Foil Manufacturing, LLC (“KEMET Foil”), KEMET Blue Powder Corporation (“KEMET Blue Powder”), The Forest Electric Company and the financial institutions party thereto (the “Loan and Security Agreement”), was amended and, as a result, the revolving credit facility has increased to $65.0 million. The Company had the following activity for the three-month period ended June 30, 2016 and resulting balances under the revolving line of credit (amounts in thousands, excluding percentages):

	March 31, 2016		Three-Month Period Ended June 30, 2016				June 30, 2016
	Outstanding Borrowings		Additional Borrowings		Repayments		Outstanding Borrowings		Rate (1) (2)		Due Date
U.S. Facility	$	19,881	$	—	$	—	$	19,881	4.750	%	December 19, 2019
Singapore Facility
Singapore Borrowing 1 (3)	12,000		—		—		12,000		3.250	%	August 22, 2016
Singapore Borrowing 2 (3)	2,000		—		—		2,000		3.250	%	October 11, 2016
Total Facilities	$	33,881	$	—	$	—	$	33,881

______________________________________________________________________________

(1) For U.S. borrowings, Base Rate plus 1.50%, as defined in the Loan and Security Agreement.

(2) For Singapore borrowings, London Interbank Offer Rate ("LIBOR"), plus a spread of 2.50% as of June 30, 2016.

(3) The Company has the intent and ability to extend the due date on the Singapore borrowings.

As of June 30, 2016, these were the only borrowings under the revolving line of credit, and the Company's available borrowing capacity under the Loan and Security Agreement was $31.1 million. The borrowing capacity has increased primarily due to a $5.0 million increase in the credit facility noted above.

10.5% Senior Notes

On May 10, 2016, the Company repurchased and retired $2.0 million of its 10.5% Senior Notes due May 1, 2018 (the "10.5% Senior Notes"). As of June 30, 2016 and March 31, 2016, the Company had outstanding $353.0 million and $355.0 million, respectively in aggregate principal amount of the Company’s 10.5% Senior Notes.  The Company had interest payable related to the 10.5% Senior Notes included in the line item “Accrued expenses” on its Condensed Consolidated balance sheets of $6.2 million and $15.5 million as of June 30, 2016 and March 31, 2016, respectively.

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Restructuring Charges

3 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Charges

Restructuring Charges

KEMET's various restructuring plans to make the Company more competitive by reducing excess capacity, relocating production to lower cost locations and eliminating unnecessary costs throughout the Company are nearing completion.

A summary of the expenses aggregated in the Condensed Consolidated Statements of Operations line item “Restructuring charges” in the quarters endedJune 30, 2016 and 2015, is as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
Personnel reduction costs	$	647	$	1,544
Manufacturing and sales office relocation costs	$	41	$	280
Restructuring charges	$	688	$	1,824

Quarter Ended June 30, 2016

The Company incurred $0.7 million in restructuring charges in the quarter ended June 30, 2016 comprised of $0.6 million in personnel reduction costs and $41 thousand in manufacturing relocation costs.

The personnel reduction costs of $0.6 million consist of $0.3 million for overhead reductions in Sweden, $0.2 million related to manufacturing headcount reductions in Europe (primarily Italy and Landsberg, Germany) corresponding with the relocation of certain production lines to lower cost regions, and $0.1 millionrelated to the consolidation of certain Solid Capacitor manufacturing in Matamoros, Mexico.

The manufacturing relocation costs of $41 thousand consists of transfers of Film and Electrolytic production lines to lower cost regions.

Quarter Ended June 30, 2015

The Company incurred $1.8 million in restructuring charges in the quarter ended June 30, 2015 comprised of $1.5 million of personnel reduction costs and $0.3 million in manufacturing relocation costs.

The personnel reduction costs of $1.5 million consist of the following: $0.6 millionrelated a headcount reduction in Suzhou, China for the Film & Electrolytic production line transfer from Suzhou, China to Anting, China, $0.5 million for planned headcount reductions in Europe (primarily Landsberg, Germany), $0.2 million for headcount reductions in Matamoros, Mexico related to the relocation of certain Solid Capacitor manufacturing from Matamoros, Mexico to Victoria, Mexico, and $0.2 million for headcount reductions related to the outsourcing of the Company's information technology function and overhead reductions in North America and Europe.

The Company also incurred $0.3 million of manufacturing relocation costs for transfers of Film and Electrolytic production lines.

Reconciliation of restructuring liability

A reconciliation of the beginning and ending liability balances for restructuring charges included in the line items “Accrued expenses” and “Other non-current obligations” on the Condensed Consolidated Balance Sheets for the quarters endedJune 30, 2016 and 2015 are as follows (amounts in thousands):

	Quarter Ended June 30, 2016						Quarter Ended June 30, 2015
	Personnel  Reductions			Manufacturing  Relocations			Personnel  Reductions			Manufacturing  Relocations
Beginning of period	$	976		$	—		$	7,239		$	—
Costs charged to expense	647			41			1,544			280
Costs paid or settled	(523		)	(41		)	(2,439		)	(280		)
Change in foreign exchange	(21		)	—			212			—
End of period	$	1,079		$	—		$	6,556		$	—

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Comprehensive Income (Loss) and Accumulated Other Comprehensive Income

3 Months Ended

Jun. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Comprehensive Income (Loss) and Accumulated Other Comprehensive Income

Comprehensive Income (Loss) and Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the quarters ended June 30, 2016 and 2015 include the following components (amounts in thousands):

	Foreign Currency Translation (1)			Post-Retirement  Benefit Plan Adjustments			Defined Benefit Pension Plans,  Net of Tax (2)			Ownership Share of Equity Method  Investees’ Other  Comprehensive  Income (Loss)			Foreign Exchange Contracts			Net Accumulated  Other  Comprehensive  Income (Loss)
Balance at March 31, 2016	$	(10,272	)	$	1,114		$	(15,161	)	$	(6,739	)	$	(367	)	$	(31,425	)
Other comprehensive income (loss) before reclassifications	(6,386		)	—			—			(5,384		)	(2,618		)	(14,388		)
Amounts reclassified out of AOCI	—			(42		)	163			—			1,753			1,874
Other comprehensive income (loss)	(6,386		)	(42		)	163			(5,384		)	(865		)	(12,514		)
Balance at June 30, 2016	$	(16,658	)	$	1,072		$	(14,998	)	$	(12,123	)	$	(1,232	)	$	(43,939	)

	Foreign Currency Translation			Post-Retirement  Benefit Plan Adjustments			Defined Benefit  Pension Plans,  Net of Tax (2)			Ownership Share of Equity Method  Investees’ Other  Comprehensive  Income (Loss)			Foreign Exchange Contracts			Net Accumulated  Other  Comprehensive  Income (Loss)
Balance at March 31, 2015	$	(12,132	)	$	1,159		$	(20,363	)	$	1,537		$	1,003		$	(28,796	)
Other comprehensive income (loss) before reclassifications	5,865			—			—			(932		)	(3,512		)	1,421
Amounts reclassified out of AOCI	—			(40		)	167			—			565			692
Other comprehensive income (loss)	5,865			(40		)	167			(932		)	(2,947		)	2,113
Balance at June 30, 2015	(6,267		)	$	1,119		$	(20,196	)	$	605		$	(1,944	)	$	(26,683	)

(1) Due primarily to the Company’s valuation allowance on deferred tax assets, there were no significant deferred tax effects associated with the cumulative currency translation gains and losses during the quarter ended June 30, 2016.

(2) Ending balance is net of tax of $2.0 million and $2.3 million as of June 30, 2016 and June 30, 2015, respectively.

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Investment in NEC TOKIN

3 Months Ended

Jun. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

Investment in NEC TOKIN

Investment in NEC TOKIN

On March 12, 2012, KEC, a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with NEC TOKIN Corporation ("NEC TOKIN"), a manufacturer of tantalum capacitors, electro-magnetic, electro-mechanical and access devices, to acquire 51% of the common stock of NEC TOKIN (which represented a 34% economic interest, as calculated based on the number of common shares held by KEC, directly and indirectly, in proportion to the aggregate number of outstanding common and convertible preferred shares of NEC TOKIN as of such date) (the "Initial Purchase") from NEC Corporation ("NEC") of Japan. The transaction closed on February 1, 2013, at which time KEC paid a purchase price of $50.0 million for new shares of common stock of NEC TOKIN (the “Initial Closing”). The Company accounts for its investment in NEC TOKIN using the equity method for a non-consolidated variable interest entity since KEC does not have the power to direct significant activities of NEC TOKIN. The Company believes that the NEC TOKIN convertible preferred stock represents in-substance common stock of NEC TOKIN and, as a result, its method of calculating KEC’s economic basis in NEC TOKIN is the appropriate basis on which to recognize its share of the earnings or loss of NEC TOKIN.

In connection with KEC’s execution of the Stock Purchase Agreement, KEC entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”) with NEC TOKIN and NEC, which provides for restrictions on transfers of NEC TOKIN’s capital stock, certain tag-along and first refusal rights on transfer, restrictions on NEC’s ability to convert the preferred stock of NEC TOKIN held by it, certain management services to be provided to NEC TOKIN by KEC (or an affiliate of KEC) and certain board representation rights. KEC holds four of seven NEC TOKIN director positions. However, NEC has significant board rights.

Concurrent with execution of the Stock Purchase Agreement and the Stockholders’ Agreement, KEC entered into an Option Agreement (the “Option Agreement”) with NEC, which was amended on August 29, 2014, whereby KEC had the right to purchase additional shares of NEC TOKIN common stock from NEC TOKIN for a purchase price of $50.0 million resulting in an economic interest of approximately 49% while maintaining ownership of 51% of NEC TOKIN’s common stock (the “First Call Option”) by providing notice of the First Call Option between the Initial Closing and April 30, 2015. Upon providing such First Call Option notice, but not before April 1, 2015, KEC could also have exercised a second option to purchase all outstanding capital stock of NEC TOKIN from its stockholders, primarily NEC, for a purchase price based on the greater of six times LTM EBITDA (as defined in the Option Agreement) less the previous payments and certain other adjustments, or the outstanding amount of NEC TOKIN’s debt obligation to NEC (the “Second Call Option”) by providing notice of the Second Call Option by May 31, 2018. The First and Second Call Options expired on April 30, 2015 without being exercised.

Through May 31, 2018, NEC may require KEC to purchase all outstanding capital stock of NEC TOKIN from its stockholders, primarily NEC (the "Put Option"), provided that KEC's payment of the Put Option price is permitted under the 10.5% Senior Notes and Loan and Security Agreement. However, in the event that KEC issues new debt securities principally to refinance its outstanding 10.5% Senior Notes due 2018 and its currently outstanding credit agreement, including amounts to pay related fees and expenses and to use for general corporate purposes (“Refinancing Notes”), prior to NEC’s delivery of its notification of exercise of the Put Option, then the earliest date NEC may exercise the Put Option is automatically extended to the day immediately following the final scheduled maturity date of such Refinancing Notes, or in the event such Refinancing Notes are redeemed in full prior to such final scheduled maturity date, then on the day immediately following the date of such full redemption, but in any event beginning no later than November 1, 2019. If not previously exercised, the Put Option will expire on October 31, 2023.

The purchase price for the Put Option will be based on the greater of six times LTM EBITDA less previous payments and certain other adjustments, or the outstanding amount of NEC TOKIN’s debt obligation to NEC as of the date the Put Option is exercised. The purchase price for the Put Option is reduced by the amount of NEC TOKIN’s debt obligation to NEC which KEC will assume. The determination of the purchase price could be modified in the event there is a disagreement between NEC and KEC under the Stockholders’ Agreement.

The Company has marked the option to fair value and in the quarter ended June 30, 2016 recognized a $12.0 million loss, which was included on the line item “Change in value of the NEC TOKIN option” in the Condensed Consolidated Statement of Operations. The line item "Other non-current obligations" on the Condensed Consolidated Balance Sheets includes $32.6 million and $20.6 million as of June 30, 2016 and March 31, 2016, respectively, related to the respective fair value of the Put Option.

KEC's total investment in NEC TOKIN including the net call derivative described above on February 1, 2013, the closing date of the acquisition, was $54.5 million which includes $50 million cash consideration plus approximately $4.5 million in transaction expenses (fees for legal, accounting, due diligence, investment banking and various other services necessary to complete the transactions). The Company has made an allocation of the aggregate purchase price, which was based upon estimates that the Company believes are reasonable.

Summarized financial information for NEC TOKIN follows (amounts in thousands):

	June 30, 2016		March 31, 2016
Current assets	$	247,713	$	240,427
Non-current assets	263,824		260,614
Current liabilities	178,451		179,360
Non-current liabilities	364,926		335,500

	Quarters Ended June 30,
	2016		2015
Sales	$	120,510	$	114,734
Gross profit	26,546		24,668
Net income (loss)	2,350		5,255

A reconciliation between NEC TOKIN's net income (loss) and KEC's equity investment income (loss) follows (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
NEC TOKIN net income (loss)	$	2,350		$	5,255
KEC's economic interest %	34		%	34		%
Equity income (loss) from NEC TOKIN before adjustments	799			1,787
Adjustments:
Amortization and depreciation	(544		)	(136		)
Inventory profit elimination	(32		)	(66		)
Equity income (loss) from NEC TOKIN	$	223		$	1,585

A reconciliation between NEC TOKIN's net assets and KEC's investment in NEC TOKIN balance follows (amounts in thousands):

	June 30, 2016			March 31, 2016
Investment in NEC TOKIN	$	15,172		$	20,334
Purchase price accounting basis adjustments:
Property, plant and equipment (1)	3,598			3,365
Technology (1)	(10,676		)	(10,134		)
Long-term debt (1)	(1,910		)	(1,975		)
Goodwill	(8,262		)	(7,555		)
Indemnity asset for legal investigation	(8,500		)	(8,500		)
Inventory profit elimination (2)	403			371
Other	(651		)	(604		)
KEC's 34% economic interest in NEC TOKIN's net assets	$	(10,826	)	$	(4,698	)

(1) Amortized over the estimated lives.

(2) Adjusted each period for any activity.

As of June 30, 2016, KEC’s maximum loss exposure as a result of its investments in NEC TOKIN is limited to the aggregate of the carrying value of the investment, any accounts receivable balance due from NEC TOKIN and obligations in the Put Option. 

Summarized transactions between KEC and NEC TOKIN are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
KEC's sales to NEC TOKIN	$	3,147	$	4,855
NEC TOKIN's sales to KEMET	1,872		1,478

	June 30, 2016		March 31, 2016
Accounts receivable	$	2,072	$	5,220
Accounts payable	1,250		1,019
Management service agreement receivable (1)	693		748

(1) In accordance with the Stockholders’ Agreement, KEC entered into a management services agreement with NEC TOKIN to provide services for which KEC is being reimbursed.

Beginning in March 2014, NEC TOKIN and certain of its subsidiaries received inquiries, requests for information and other communications from government authorities in China, the United States, the European Commission, Japan, South Korea Taiwan, Singapore and Brazil concerning alleged anti-competitive activities within the capacitor industry. 

On September 2, 2015, the United States Department of Justice announced a plea agreement with NEC TOKIN in which NEC TOKIN agreed to plead guilty to a one-count felony charge of unreasonable restraint of interstate and foreign trade and commerce in violation of Section 1 of the Sherman Act, and to pay a criminal fine of $13.8 million. The plea agreement was approved by the United States District Court, Northern District of California, on January 21, 2016. The fine is payable over five years in six installments of $2.3 million each, plus accrued interest. The first payment was made in February 2016 and the next payment is due in February 2017.

On December 9, 2015, the Taiwan Fair Trade Commission (“TFTC”) publicly announced that NEC TOKIN would be fined 1,218.2 million New Taiwan dollars ("NTD") (approximately U.S. $37.7 million) for violations of the Taiwan Fair Trade Act. Subsequently, the TFTC has indicated the fine may be reduced to NTD609.1 million (approximately U.S. $18.9 million). In February, 2016, NEC TOKIN commenced an administrative suit in Taiwan, challenging the validity of the amount of the fine.

On March 29, 2016, the Japan Fair Trade Commission published an order by which NEC TOKIN was fined ¥127.2 million (approximately U.S. $1.2 million) for violation of the Japanese Antimonopoly Act. Payment of the fine is due by October 31, 2016.

The remaining governmental investigations are continuing at various stages.

On May 2, 2016, NEC TOKIN reached a preliminary settlement in two antitrust suits pending in the United States District Court, Northern District of California as In re: Capacitors Antitrust Litigation, No. 3:14-cv-03264-JD (the “Class Action Suits”). Pursuant to the terms of the settlement, in consideration of the release of NEC TOKIN and its subsidiaries (including NEC TOKIN America, Inc.) from claims asserted in the Class Action Suits, NEC TOKIN will pay an aggregate $37.3 million to a settlement class of direct purchasers of capacitors and a settlement class of indirect purchasers of capacitors. The preliminary settlement was followed by definitive settlement agreements as of July 15, 2016, with the same terms as the preliminary settlement except that the initial installment payment to each class plaintiff is to be made on July 29, 2016, while the terms of the subsequent payments are not changed from the ones of the preliminary settlement, i.e., due each year thereafter for three years, and a final, fifth payment due by December 31, 2019. Both settlements are subject to court approval.

Pursuant to the Stock Purchase Agreement, NEC is required to indemnify NEC TOKIN and/or KEC for any breaches by NEC TOKIN or NEC of certain representations, warranties and covenants in the Stock Purchase Agreement. NEC’s aggregate liability for indemnification claims is limited to $25.0 million. Accordingly, KEMET, under equity method accounting, has established an indemnity asset in the amount of $8.5 million (based upon our 34% economic interest in NEC TOKIN). However, pursuant to the Stock Purchase Agreement, claims arising out of fraud or criminal conduct are not limited by the $25.0 million indemnification cap, and for such claims the claimant retains all remedies available in equity or at law.

As of June 30, 2016, NEC TOKIN's accrual for antitrust and civil litigation totaled $81.5 million. This amount includes the best estimate of losses which may result from the ongoing antitrust investigations and civil litigation. However, the actual outcomes could differ from what has been accrued.

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Segment and Geographic Information

3 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment and Geographic Information

Segment and Geographic Information

The Company is organized into two business groups: Solid Capacitors and Film and Electrolytic.  The business groups are responsible for their respective manufacturing sites as well as their respective research and development efforts. The Company does not allocate indirect Selling, general and administrative (“SG&A”) or shared Research and development (“R&D”) expenses to the business groups. 

Solid Capacitors

Operating in nine manufacturing sites in the United States, Mexico and China, Solid Capacitors primarily produces tantalum, aluminum polymer, and ceramic capacitors which are sold globally.  Solid Capacitors also produces tantalum powder used in the production of tantalum capacitors and has a product innovation center in the United States.

Film and Electrolytic

Operating in ten manufacturing sites throughout Europe, Asia, and the United States, Film and Electrolytic primarily produces film, paper, and electrolytic capacitors which are sold globally. Film and Electrolytic also manufactures etched foils utilized as a core component in the manufacture of electrolytic capacitors. In addition, this business group has product innovation centers in the United Kingdom, Italy, Germany and Sweden.

The following table reflects each business group’s net sales, operating income (loss), depreciation and amortization expenses and sales by region for the quarters endedJune 30, 2016 and 2015 (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Net sales:
Solid Capacitors	$	141,944		$	139,677
Film and Electrolytic	42,991			47,913
	$	184,935		$	187,590
Operating income (loss) (1):
Solid Capacitors	$	35,079		$	30,033
Film and Electrolytic	(1,467		)	712
Corporate	(24,714		)	(29,502		)
	$	8,898		$	1,243
Depreciation and amortization expense:
Solid Capacitors	$	5,418		$	5,756
Film and Electrolytic	2,715			2,942
Corporate	1,303			1,219
	$	9,436		$	9,917

__________________

(1)Restructuring charges included in Operating income (loss) are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
Restructuring charges:
Solid Capacitors	$	136	$	232
Film and Electrolytic	549		1,286
Corporate	3		306
	$	688	$	1,824

___________________

	Quarters Ended June 30,
	2016		2015
Sales by region:
North and South America (“Americas”)	$	55,101	$	56,034
Europe, Middle East, Africa (“EMEA”)	60,486		61,557
Asia and Pacific Rim (“APAC”)	69,348		69,999
	$	184,935	$	187,590

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Defined Benefit Pension and Other Postretirement Benefit Plans Defined Benefit Pension and Other Postretirement Benefit Plans (Notes)

3 Months Ended

Jun. 30, 2016

Defined Benefit Pension and Other Postretirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Defined Benefit Pension and Other Postretirement Benefit Plans

The Company sponsors six defined benefit pension plans in Europe, one plan in Singapore and two plans in Mexico.  In addition, the Company sponsors a post-retirement plan in the United States.  Costs recognized for benefit plans are recorded using estimated amounts which may change as actual costs for the fiscal year are determined.

The components of net periodic benefit (income) costs relating to the Company’s pension and other postretirement benefit plans are as follows for the quarters ended June 30, 2016 and 2015 (amounts in thousands):

	Pension						Post-retirement Benefit Plan
	Quarters Ended June 30,						Quarters Ended June 30,
	2016			2015			2016			2015
Net service cost	$	347		$	717		$	—		$	—
Interest cost	358			338			4			6
Expected return on net assets	(94		)	(105		)	—			—
Amortization:
Actuarial (gain) loss	115			197			(42		)	(40		)
Prior service cost	21			15			—			—
Total net periodic benefit (income) costs	$	747		$	1,162		$	(38	)	$	(34	)

In fiscal year 2017, the Company expects to contribute up to $1.7 million to the pension plans, $0.3 million of which has been contributed as of June 30, 2016.  For the postretirement benefit plan, the Company’s policy is to pay benefits as costs are incurred.

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Stock-based Compensation

3 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

Stock-based Compensation

As of June 30, 2016, the 2014 Amendment and Restatement of the KEMET Corporation 2011 Omnibus Equity Incentive Plan (the “2011 Incentive Plan”), approved by the Company’s stockholders in 2014, is the only plan the Company has to issue equity based awards to executives and key employees. Upon adoption of the 2011 Incentive Plan, no further awards were permitted to be granted under the Company’s prior plans, including the 1992 Key Employee Stock Option Plan, the 1995 Executive Stock Option Plan, and the 2004 Long-Term Equity Incentive Plan (collectively, the “Prior Plans”).

The 2011 Incentive Plan authorized the grant of up to 7.4 million shares of the Company's Common Stock, comprised of 6.6 million shares under the 2011 Incentive Plan and 0.8 million shares remaining from the Prior Plans and authorizes the Company to provide equity-based compensation in the form of:

• stock options, including incentive stock options, entitling the optionee to favorable tax treatment under Section 422 of the Code;

• stock appreciation rights;

• restricted stock and restricted stock units ("RSUs");

• other share-based awards; and,

• performance awards.

Options issued under these plans vest within one to three years and expire ten years from the grant date. The Company grants RSUs to members of the Board of Directors, the Chief Executive Officer and key management. Once vested and settled, RSUs are converted into restricted stock. For members of the Board of Directors and senior personnel, such restricted stock cannot be sold until 90 days after termination of service with the Company, or until the individual achieves the targeted ownership under the Company’s stock ownership guidelines, and only to the extent that such ownership level exceeds the target. Compensation expense is recognized over the respective vesting periods.

Historically, the Board of Directors of the Company has approved annual Long Term Incentive Plans (“LTIP”) which cover two year periods and are primarily based upon the achievement of an Adjusted EBITDA range for the two-year period. At the time of the award, the individual plans entitle the participants to receive cash or RSUs, or a combination of both as determined by the Company’s Board of Directors. The 2013/2014 LTIP, 2014/2015 LTIP, 2015/2016 LTIP, 2016/2017 LTIP, and 2017/2018 LTIP also awarded RSUs which vest over the course of three years from the anniversary of the establishment of the plan and are not subject to a performance metric. The Company assesses the likelihood of meeting the Adjusted EBITDA financial metric on a quarterly basis and adjusts compensation expense to match expectations. Any related liability is reflected in the line item “Accrued expenses” on the Condensed Consolidated Balance Sheets and any restricted stock unit commitment is reflected in the line item “Additional paid-in capital” on the Condensed Consolidated Balance Sheets.

On May 18, 2016, the Company granted RSUs under the 2017/2018 LTIP with a grant date fair value of $2.46 that vests as follows (amounts in thousands):

	Shares
May 18, 2017	202
May 18, 2018	202
May 18, 2019	209
Total shares granted	613

The following is the vesting schedule of RSUs under each respective LTIP, which vested during the three-month period endedJune 30, 2016 (shares in thousands):

	2016/2017	2015/2016	2014/2015
Time-based award vested	178	111	118
Performance-based award vested	—	103	73

Restricted stock activity, excluding the LTIP activity discussed above, for the three-month period endedJune 30, 2016 is as follows (amounts in thousands except fair value):

	Shares	Weighted- average Fair Value on Grant Date
Non-vested restricted stock at March 31, 2016	1,430	$	3.51
Granted	—
Vested	—
Forfeited	—
Non-vested restricted stock at June 30, 2016	1,430	$	3.51

The compensation expense associated with stock-based compensation for the quarters ended June 30, 2016 and 2015 is recorded on the Condensed Consolidated Statements of Operations as follows (amounts in thousands):

	Quarter Ended June 30, 2016						Quarter Ended June 30, 2015
	Stock  Options		Restricted  Stock		LTIPs		Stock  Options		Restricted  Stock		LTIPs
Cost of sales	$	9	$	192	$	183	$	34	$	151	$	228
Selling, general and administrative expenses	10		347		427		42		343		458
Research and development	—		6		54		1		5		17
Total	$	19	$	545	$	664	$	77	$	499	$	703

In the “Operating activities” section of the Condensed Consolidated Statements of Cash Flows, stock-based compensation expense was treated as an adjustment to Net income (loss) for the quarters endedJune 30, 2016, and 2015. No stock options were exercised in the three-month periods endedJune 30, 2016 and June 30, 2015.

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Income Taxes

3 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the quarter ended June 30, 2016, the Company recognized $1.8 million of income tax expense from continuing operations which is comprised of $1.8 million of income tax expense related to foreign operations.

During the quarter ended June 30, 2015, the Company incurred $0.2 million of income tax benefit which is comprised of $0.6 million federal income tax benefit due to the reduction in the U.S. valuation allowance associated with the acquisition of IntelliData, Inc., $0.3 million income tax expense from continuing foreign operations and $0.1 million of state income tax expense.

There was no U.S. federal income tax benefit from net operating losses for the quarter ended June 30, 2016 and 2015 due to a valuation allowance recorded on deferred tax assets.

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Basic and Diluted Net Loss Per Common Share

3 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Basic and Diluted Net Income (Loss) Per Common Share

Basic and Diluted Net Income (Loss) Per Common Share

The following table presents basic earnings per share ("EPS") and diluted EPS (amounts in thousands, except per share data):

	Quarters Ended June 30,
	2016			2015
Numerator:
Net income (loss)	$	(12,205	)	$	(37,050	)
Denominator:
Weighted-average shares outstanding:
Basic	46,349			45,552
Assumed conversion of employee stock grants	—			—
Assumed conversion of warrants	—			—
Diluted	46,349			45,552
Net income (loss) per basic and diluted share	$	(0.26	)	$	(0.81	)

Common stock equivalents that could potentially dilute net income (loss) per basic share in the future, but were not included in the computation of diluted earnings per share because the impact would have been anti-dilutive, are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016	2015
Assumed conversion of employee stock grants	2,330	2,303
Assumed conversion of warrants	4,853	6,015

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Concentrations of Risks

3 Months Ended

Jun. 30, 2016

Risks and Uncertainties [Abstract]

Concentrations of Risks

Concentrations of Risks

The Company sells to customers globally and, as the Company generally does not require collateral from its customers, on a monthly basis the Company evaluates customer account balances in order to assess the Company’s financial risks of collection.  One customer, TTI, Inc., an electronics distributor, accounted for over 10% of the Company’s net sales in the quarters endedJune 30, 2016 and 2015.  There were no accounts receivable balances from any customer exceeding 10% of gross accounts receivable as of June 30, 2016 and March 31, 2016.

Electronics distributors are an important distribution channel in the electronics industry and accounted for 46% and 43% of the Company’s net sales in the three-month periods ended June 30, 2016 and 2015, respectively.  As a result of the Company’s concentration of sales to electronics distributors, the Company may experience fluctuations in the Company’s operating results as electronics distributors experience fluctuations in end-market demand and/or adjust their inventory stocking levels.

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Condensed Consolidating Financial Statements

3 Months Ended

Jun. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

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

June 30, 2016

(Unaudited)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	640	$	22,573	$	29,725	$	—		$	52,938
Accounts receivable, net	—		33,716		55,369		—			89,085
Intercompany receivable	30,994		169,569		160,801		(361,364		)	—
Inventories, net	—		110,132		57,784		—			167,916
Prepaid expenses and other	3,325		16,833		13,731		(2,964		)	30,925
Deferred income taxes	—		—		—		—			—
Total current assets	34,959		352,823		317,410		(364,328		)	340,864
Property and equipment, net	244		90,226		141,218		—			231,688
Goodwill	—		40,294		—		—			40,294
Intangible assets, net	—		26,861		5,752		—			32,613
Investment in NEC TOKIN	—		15,172		—		—			15,172
Investments in subsidiaries	369,627		427,702		93,359		(890,688		)	—
Deferred income taxes	—		768		6,837		—			7,605
Other assets	—		2,144		600		—			2,744
Long-term intercompany receivable	65,822		40,397		1,089		(107,308		)	—
Total assets	$	470,652	$	996,387	$	566,265	$	(1,362,324	)	$	670,980
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—	$	—	$	—		$	—
Accounts payable	67		34,863		31,895		—			66,825
Intercompany payable	22,783		272,840		65,741		(361,364		)	—
Accrued expenses	7,320		13,042		21,536		—			41,898
Income taxes payable	—		2,988		192		(2,964		)	216
Total current liabilities	30,170		323,733		119,364		(364,328		)	108,939
Long-term debt, less current portion	352,087		19,881		14,000		—			385,968
Other non-current obligations	—		37,296		47,398		—			84,694
Deferred income taxes	—		2,242		742		—			2,984
Long-term intercompany payable	—		65,822		41,486		(107,308		)	—
Stockholders’ equity	88,395		547,413		343,275		(890,688		)	88,395
Total liabilities and stockholders’ equity	$	470,652	$	996,387	$	566,265	$	(1,362,324	)	$	670,980

Condensed Consolidating Balance Sheet (1)

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
Goodwill	—		40,294		—		—			40,294
Intangible assets, net	—		27,252		6,049		—			33,301
Investment in NEC TOKIN	—		20,334		—		—			20,334
Investments in subsidiaries	382,108		429,723		93,359		(905,190		)	—
Deferred income taxes	—		800		7,597		—			8,397
Other assets	—		2,452		616		—			3,068
Long-term intercompany receivable	67,500		41,428		1,088		(110,016		)	—
Total assets	$	484,038	$	991,426	$	575,443	$	(1,351,127	)	$	699,780
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	2,000	$	—	$	—	$	—		$	2,000
Accounts payable	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	351,952		19,881		14,000		—			385,833
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	$	484,038	$	991,426	$	575,443	$	(1,351,127	)	$	699,780

(1) Derived from audited financial statements.

Condensed Consolidating Statement of Operations

For the Quarter Ended June 30, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	213,513	$	170,550		$	(199,128	)	$	184,935
Operating costs and expenses:
Cost of sales	277			167,103		161,230			(186,198		)	142,412
Selling, general and administrative expenses	10,145			17,489		11,210			(12,930		)	25,914
Research and development	65			4,375		2,492			—			6,932
Restructuring charges	—			139		549			—			688
Net (gain) loss on sales and disposals of assets	—			388		(297		)	—			91
Total operating costs and expenses	10,487			189,494		175,184			(199,128		)	176,037
Operating income (loss)	(10,487		)	24,019		(4,634		)	—			8,898
Non-operating (income) expense:
Interest income	—			3		(6		)	—			(3		)
Interest expense	9,423			399		101			—			9,923
Change in value of NEC TOKIN option	—			12,000		—			—			12,000
Other (income) expense, net	(9,350		)	9,416		(2,460		)	—			(2,394		)
Equity in earnings of subsidiaries	1,645			—		—			(1,645		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(12,205		)	2,201		(2,269		)	1,645			(10,628		)
Income tax expense (benefit)	—			38		1,762			—			1,800
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,205		)	2,163		(4,031		)	1,645			(12,428		)
Equity income (loss) from NEC TOKIN	—			223		—			—			223
Net income (loss)	$	(12,205	)	$	2,386	$	(4,031	)	$	1,645		$	(12,205	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Quarter Ended June 30, 2016

(Unaudited)

Comprehensive income (loss) $ (13,883 ) $ (3,687 ) $ (8,794 ) $ 1,645 $ (24,719 )

Condensed Consolidating Statement of Operations

For the Quarter Ended June 30, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	221,770		$	181,600		$	(215,780	)	$	187,590
Operating costs and expenses:
Cost of sales	178			181,514			166,230			(200,045		)	147,877
Selling, general and administrative expenses	9,816			23,479			12,870			(15,735		)	30,430
Research and development	(119		)	4,384			2,009			—			6,274
Restructuring charges	—			515			1,309			—			1,824
Net (gain) loss on sales and disposals of assets	—			(353		)	295			—			(58		)
Total operating costs and expenses	9,875			209,539			182,713			(215,780		)	186,347
Operating income (loss)	(9,875		)	12,231			(1,113		)	—			1,243
Non-operating (income) expense:
Interest income	—			—			(3		)	—			(3		)
Interest expense	9,469			332			212			—			10,013
Change in value of NEC TOKIN option	—			29,200			—			—			29,200
Other (income) expense, net	(9,087		)	7,802			2,201			—			916
Equity in earnings of subsidiaries	26,793			—			—			(26,793		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(37,050		)	(25,103		)	(3,523		)	26,793			(38,883		)
Income tax expense (benefit)	—			(487		)	239			—			(248		)
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(37,050		)	(24,616		)	(3,762		)	26,793			(38,635		)
Equity income (loss) from NEC TOKIN	—			1,585			—			—			1,585
Net income (loss)	$	(37,050	)	$	(23,031	)	$	(3,762	)	$	26,793		$	(37,050	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

For the Quarter Ended June 30, 2015

(Unaudited)

Comprehensive income (loss) $ (34,501 ) $ (27,935 ) $ 706 $ 26,793 $ (34,937 )

Condensed

Consolidating Statement of Cash Flows

For the Quarter Ended June 30, 2016

(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	$	2,465		$	(13,651	)	$	8,150		$	—	$	(3,036	)
Investing activities:
Capital expenditures	—			15			(6,182		)	—		(6,167		)
Proceeds from sale of assets	—			—			—			—		—
Acquisitions, net of cash received	—			—			—			—		—
Net cash used in investing activities	—			15			(6,182		)	—		(6,167		)
Financing activities:
Proceeds from revolving line of credit	—			—			—			—		—
Payments of revolving line of credit	—			—			—			—		—
Payments of long-term debt	(1,870		)	—			—			—		(1,870		)
Purchase of treasury stock	(595		)	—			—			—		(595		)
Net cash provided by (used in) financing activities	(2,465		)	—			—			—		(2,465		)
Net increase (decrease) in cash and cash equivalents	—			(13,636		)	1,968			—		(11,668		)
Effect of foreign currency fluctuations on cash	—			—			(398		)	—		(398		)
Cash and cash equivalents at beginning of fiscal period	640			36,209			28,155			—		65,004
Cash and cash equivalents at end of fiscal period	$	640		$	22,573		$	29,725		$	—	$	52,938

Condensed Consolidating Statements of Cash Flows

For the Quarter Ended June 30, 2015

(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	$	544		$	(17,034	)	$	(5,034	)	$	—	$	(21,524	)
Investing activities:
Capital expenditures	—			(3,912		)	(1,861		)	—		(5,773		)
Acquisitions, net of cash received	—			(2,892		)	—			—		(2,892		)
Net cash used in investing activities	—			(6,804		)	(1,861		)	—		(8,665		)
Financing activities:
Proceeds from revolving line of credit	—			6,000			2,000			—		8,000
Payments of revolving line of credit	—			(2,500		)	—			—		(2,500		)
Payments of long-term debt	—			—			(481		)	—		(481		)
Purchase of treasury stock	(544		)	—			—			—		(544		)
Net cash provided by (used in) financing activities	(544		)	3,500			1,519			—		4,475
Net increase (decrease) in cash and cash equivalents	—			(20,338		)	(5,376		)	—		(25,714		)
Effect of foreign currency fluctuations on cash	—			—			411			—		411
Cash and cash equivalents at beginning of fiscal period	640			33,094			22,628			—		56,362
Cash and cash equivalents at end of fiscal period	$	640		$	12,756		$	17,663		$	—	$	31,059

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Basis of Financial Statement Presentation (Tables)

3 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Use of Estimates and Assumptions

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and judgments based on historical data and other assumptions that management believes are reasonable.  These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. In addition, they affect the reported amounts of revenues and expenses during the reporting period.

The Company’s judgments are based on management’s assessment as to the effect certain estimates, assumptions, or future trends or events may have on the financial condition and results of operations reported in the unaudited condensed consolidated financial statements. It is important that readers of these unaudited financial statements understand that actual results could differ from these estimates, assumptions, and judgments.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

New accounting standards adopted/issued

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation-Stock Compensation. This guidance changes several aspects of the accounting for share-based payment award transactions, including: (1) Accounting and Cash Flow Classification for Excess Tax Benefits and Deficiencies, (2) Forfeitures, and (3) Tax Withholding Requirements and Cash Flow Classification. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early application is permitted, and KEMET adopted ASU No. 2016-09 as of April 1, 2016. The Company elected to discontinue estimating forfeitures that are expected to occur and recorded a cumulative effect adjustment to retained earnings for $130,000 as of April 1, 2016. There was no cumulative adjustment related to the excess tax benefits as the Company did not have an additional paid in capital pool of excess tax benefits. The adoption did not have a significant impact to the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The ASU requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than short-term leases). The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. Early application is permitted. The Company is currently in the process of assessing the impact the adoption of this guidance will have on the Company's consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The ASU requires an entity that uses first-in, first-out or average cost to measure its inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 was effective for interim and annual reporting periods beginning April 1, 2016. The adoption of ASU 2015-11 did not materially impact the Company's operating results and financial position.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The ASU specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. In August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which clarifies the treatment of debt issuance costs associated with line-of-credit arrangements that were not specifically addressed in ASU 2015-03. ASU 2015-15 states that entities may elect to continue to treat debt issuance costs associated with lines of credit as an asset, consistent with current treatment. The Company adopted these ASUs in the first quarter of 2017. The ASUs did not impact the Company's results of operations or liquidity. The balance sheet as of March 31, 2016 has been adjusted to reflect retrospective application of the new accounting guidance as follows (amounts in thousands):

	As Previously Reported		Retrospective Adjustment			As Adjusted
Other assets	$	5,832	$	(2,764	)	$	3,068
Total assets	702,544		(2,764		)	699,780
Long-term debt, less current portion	388,597		(2,764		)	385,833
Total liabilities and stockholders' equity	702,544		(2,764		)	699,780

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern. The new guidance requires management to assess if there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim period. If conditions or events give rise to substantial doubt, disclosures are required. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter; early application is permitted. This new guidance is not expected to have a material impact on the Company's Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes existing accounting standards for revenue recognition and creates a single framework. The new guidance requires either a retrospective or a modified retrospective approach at adoption. Early adoption is permitted, but not before Company's fiscal year that begins on April 1, 2017 (the original effective date of the ASU). Additional updates to Topic 606 issued by the FASB in 2015 and 2016 include the following:

• ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of the new guidance such that the new provisions will now be required for fiscal years, and interim periods within those years, beginning after December 15, 2017 (ASU No. 2015-14 is effective for the Company's fiscal year that begins on April 1, 2018 and interim periods within that fiscal year).

• ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations (reporting revenue gross versus net).

• ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies the implementation guidance on identifying performance obligations and classifying licensing arrangements.

• ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which clarifies the implementation guidance in a number of other areas.

The Company is currently in the process of assessing the impact the adoption of the new revenue standards will have on its consolidated financial statements and related disclosures, as well as the available transition methods.

There are currently no other accounting standards that have been issued that will have a significant impact on the Company’s financial position, results of operations or cash flows upon adoption.

Schedule of assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and March 31, 2016 are as follows (amounts in thousands):

	Carrying Value June 30,			Fair Value June 30,			Fair Value Measurement Using									Carrying Value March 31,			Fair Value March 31,			Fair Value Measurement Using
	2016			2016			Level 1			Level 2 (2)			Level 3			2016			2016			Level 1			Level 2 (2)			Level 3
Assets (Liabilities):
Money markets (1)	$	739		$	739		$	739		$	—		$	—		$	738		$	738		$	738		$	—		$	—
Total debt	(385,968		)	(366,533		)	(337,115		)	(29,418		)	—			(387,833		)	(284,261		)	(254,713		)	(29,548		)	—
NEC TOKIN option,  net (3)	(32,600		)	(32,600		)	—			—			(32,600		)	(20,600		)	(20,600		)	—			—			(20,600		)

___________________

(1) Included in the line item “Cash and cash equivalents” on the Condensed Consolidated Balance Sheets.

(2) The valuation approach used to calculate fair value was a discounted cash flow based on the borrowing rate for each respective debt facility.

(3) See Note 5, Investment in NEC TOKIN, for a description of the NEC TOKIN option.  The value of the option depends on the enterprise value of NEC TOKIN Corporation and its forecasted EBITDA over the duration of the option. The option has been valued using option pricing methods in a Monte Carlo simulation.

Fair Value Measurement

Fair Value Measurement

The Company utilizes three levels of inputs to measure the fair value of (a) nonfinancial assets and liabilities that are recognized or disclosed at fair value in the Company’s consolidated financial statements on a recurring basis (at least annually) and (b) all financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The first two inputs are considered observable and the last is considered unobservable. The levels of inputs are as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and March 31, 2016 are as follows (amounts in thousands):

	Carrying Value June 30,			Fair Value June 30,			Fair Value Measurement Using									Carrying Value March 31,			Fair Value March 31,			Fair Value Measurement Using
	2016			2016			Level 1			Level 2 (2)			Level 3			2016			2016			Level 1			Level 2 (2)			Level 3
Assets (Liabilities):
Money markets (1)	$	739		$	739		$	739		$	—		$	—		$	738		$	738		$	738		$	—		$	—
Total debt	(385,968		)	(366,533		)	(337,115		)	(29,418		)	—			(387,833		)	(284,261		)	(254,713		)	(29,548		)	—
NEC TOKIN option,  net (3)	(32,600		)	(32,600		)	—			—			(32,600		)	(20,600		)	(20,600		)	—			—			(20,600		)

___________________

(1) Included in the line item “Cash and cash equivalents” on the Condensed Consolidated Balance Sheets.

(2) The valuation approach used to calculate fair value was a discounted cash flow based on the borrowing rate for each respective debt facility.

(3) See Note 5, Investment in NEC TOKIN, for a description of the NEC TOKIN option.  The value of the option depends on the enterprise value of NEC TOKIN Corporation and its forecasted EBITDA over the duration of the option. The option has been valued using option pricing methods in a Monte Carlo simulation.

The table below summarizes NEC TOKIN option valuation activity using significant unobservable inputs (Level 3) (amounts in thousands):

March 31, 2016	$	(20,600	)
Change in value of NEC TOKIN option	(12,000		)
June 30, 2016	$	(32,600	)

Summary of NEC TOKIN option valuation activity using significant unobservable inputs (Level 3)

The table below summarizes NEC TOKIN option valuation activity using significant unobservable inputs (Level 3) (amounts in thousands):

March 31, 2016	$	(20,600	)
Change in value of NEC TOKIN option	(12,000		)
June 30, 2016	$	(32,600	)

Inventories

Inventories

Inventories are stated at the lower of cost or market.  The components of inventories are as follows (amounts in thousands):

	June 30, 2016			March 31, 2016
Raw materials and supplies	$	78,936		$	80,289
Work in process	48,478			46,631
Finished goods	55,697			58,060
	183,111			184,980
Inventory reserves	(15,195		)	(16,101		)
	$	167,916		$	168,879

Schedule of components of inventories

Inventories are stated at the lower of cost or market.  The components of inventories are as follows (amounts in thousands):

	June 30, 2016			March 31, 2016
Raw materials and supplies	$	78,936		$	80,289
Work in process	48,478			46,631
Finished goods	55,697			58,060
	183,111			184,980
Inventory reserves	(15,195		)	(16,101		)
	$	167,916		$	168,879

Warrant

Warrant

As of June 30, 2016 and March 31, 2016, 8.4 million shares were subject to the warrant (which expires June 30, 2019) held by K Equity, LLC.

Revenue Recognition

Revenue Recognition

The Company ships products to customers based upon firm orders and revenue is recognized when the sales process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred and collectability is reasonably assured. Based on product availability, customer requirements and customer consent, the Company may ship products earlier than the initial planned ship date. Shipping and handling costs are included in cost of sales.

A portion of sales is related to products designed to meet customer specific requirements. These products typically have stricter tolerances making them useful to the specific customer requesting the product and to customers with similar or less stringent requirements. The Company recognizes revenue when title to the products transfers to the customer.

A portion of sales is made to distributors under agreements allowing certain rights of return and price protection on unsold merchandise held by distributors. The Company's distributor policy includes inventory price protection and "ship-from-stock and debit" ("SFSD") programs common in the industry.

KEMET's SFSD program provides authorized distributors with the flexibility to meet marketplace prices by allowing them, upon a pre-approved case-by-case basis, to adjust their purchased inventory cost to correspond with current market demand. Requests for SFSD adjustments are considered on an individual basis, require a pre-approved cost adjustment quote from their local KEMET sales representative and apply only to a specific customer, part, specified special price amount, specified quantity, and are only valid for a specific period of time. To estimate potential SFSD adjustments corresponding with current period sales, KEMET records a sales reserve based on historical SFSD credits, distributor inventory levels, and certain accounting assumptions, all of which are reviewed quarterly.

Most of the Company's distributors have the right to return to KEMET a certain portion of the purchased inventory, which, in general, does not exceed 6% of their purchases from the previous fiscal quarter. KEMET estimates future returns based on historical return patterns and records a corresponding allowance on the Condensed Consolidated Balance Sheets. The Company also offers volume based rebates on a case-by-case basis to certain customers in each of the Company's sales channels.

The establishment of sales allowances is recognized as a component of the line item "Net sales" on the Condensed Consolidated Statements of Operations, while the associated reserves are included in the line item "Accounts receivable, net" on the Condensed Consolidated Balance Sheets. Estimates used in determining sales allowances are subject to various factors. This includes, but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to the Company's estimates.

The Company provides a limited warranty to customers that the Company’s products meet certain specifications. The warranty period is generally limited to one year, and the Company’s liability under the warranty is generally limited to a replacement of the product or refund of the purchase price of the product. Warranty costs as a percentage of net sales were less than 1.0% for the quarters endedJune 30, 2016 and 2015. The Company recognizes warranty costs when they are both probable and reasonably estimable.

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Debt (Tables)

3 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Summary of Debt

A summary of debt is as follows (amounts in thousands):

	June 30, 2016		March 31, 2016
10.5% Senior Notes, net (1)	$	352,087	$	353,952
Revolving line of credit	33,881		33,881
Total debt	385,968		387,833
Current maturities	—		(2,000		)
Total long-term debt	$	385,968	$	385,833

Schedule of line item Interest expense on the Condensed Consolidated Statements of Operations

The line item “Interest expense” on the Condensed Consolidated Statements of Operations for the quarters endedJune 30, 2016 and 2015, consists of the following (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Contractual interest expense	$	9,710		$	9,746
Capitalized interest	(52		)	—
Amortization of debt issuance costs	348			348
Amortization of debt (premium) discount	(199		)	(181		)
Imputed interest on acquisition-related obligations	41			53
Interest expense on capital lease	75			47
Total interest expense	$	9,923		$	10,013

Schedule of Line of Credit Facilities [Table Text Block]

The Company had the following activity for the three-month period ended June 30, 2016 and resulting balances under the revolving line of credit (amounts in thousands, excluding percentages):

	March 31, 2016		Three-Month Period Ended June 30, 2016				June 30, 2016
	Outstanding Borrowings		Additional Borrowings		Repayments		Outstanding Borrowings		Rate (1) (2)		Due Date
U.S. Facility	$	19,881	$	—	$	—	$	19,881	4.750	%	December 19, 2019
Singapore Facility
Singapore Borrowing 1 (3)	12,000		—		—		12,000		3.250	%	August 22, 2016
Singapore Borrowing 2 (3)	2,000		—		—		2,000		3.250	%	October 11, 2016
Total Facilities	$	33,881	$	—	$	—	$	33,881

______________________________________________________________________________

(1) For U.S. borrowings, Base Rate plus 1.50%, as defined in the Loan and Security Agreement.

(2) For Singapore borrowings, London Interbank Offer Rate ("LIBOR"), plus a spread of 2.50% as of June 30, 2016.

(3) The Company has the intent and ability to extend the due date on the Singapore borrowings.

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Restructuring Charges (Tables)

3 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Summary of the expenses aggregated on the Condensed Consolidated Statements of Operations line item "Restructuring charges"

A summary of the expenses aggregated in the Condensed Consolidated Statements of Operations line item “Restructuring charges” in the quarters endedJune 30, 2016 and 2015, is as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
Personnel reduction costs	$	647	$	1,544
Manufacturing and sales office relocation costs	$	41	$	280
Restructuring charges	$	688	$	1,824

Reconciliation of the beginning and ending liability balances for restructuring charges included in the line items Accrued expenses and Other non-current obligations on the Condensed Consolidated Balance Sheets

A reconciliation of the beginning and ending liability balances for restructuring charges included in the line items “Accrued expenses” and “Other non-current obligations” on the Condensed Consolidated Balance Sheets for the quarters endedJune 30, 2016 and 2015 are as follows (amounts in thousands):

	Quarter Ended June 30, 2016						Quarter Ended June 30, 2015
	Personnel  Reductions			Manufacturing  Relocations			Personnel  Reductions			Manufacturing  Relocations
Beginning of period	$	976		$	—		$	7,239		$	—
Costs charged to expense	647			41			1,544			280
Costs paid or settled	(523		)	(41		)	(2,439		)	(280		)
Change in foreign exchange	(21		)	—			212			—
End of period	$	1,079		$	—		$	6,556		$	—

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Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Jun. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of changes in Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the quarters ended June 30, 2016 and 2015 include the following components (amounts in thousands):

	Foreign Currency Translation (1)			Post-Retirement  Benefit Plan Adjustments			Defined Benefit Pension Plans,  Net of Tax (2)			Ownership Share of Equity Method  Investees’ Other  Comprehensive  Income (Loss)			Foreign Exchange Contracts			Net Accumulated  Other  Comprehensive  Income (Loss)
Balance at March 31, 2016	$	(10,272	)	$	1,114		$	(15,161	)	$	(6,739	)	$	(367	)	$	(31,425	)
Other comprehensive income (loss) before reclassifications	(6,386		)	—			—			(5,384		)	(2,618		)	(14,388		)
Amounts reclassified out of AOCI	—			(42		)	163			—			1,753			1,874
Other comprehensive income (loss)	(6,386		)	(42		)	163			(5,384		)	(865		)	(12,514		)
Balance at June 30, 2016	$	(16,658	)	$	1,072		$	(14,998	)	$	(12,123	)	$	(1,232	)	$	(43,939	)

	Foreign Currency Translation			Post-Retirement  Benefit Plan Adjustments			Defined Benefit  Pension Plans,  Net of Tax (2)			Ownership Share of Equity Method  Investees’ Other  Comprehensive  Income (Loss)			Foreign Exchange Contracts			Net Accumulated  Other  Comprehensive  Income (Loss)
Balance at March 31, 2015	$	(12,132	)	$	1,159		$	(20,363	)	$	1,537		$	1,003		$	(28,796	)
Other comprehensive income (loss) before reclassifications	5,865			—			—			(932		)	(3,512		)	1,421
Amounts reclassified out of AOCI	—			(40		)	167			—			565			692
Other comprehensive income (loss)	5,865			(40		)	167			(932		)	(2,947		)	2,113
Balance at June 30, 2015	(6,267		)	$	1,119		$	(20,196	)	$	605		$	(1,944	)	$	(26,683	)

(1) Due primarily to the Company’s valuation allowance on deferred tax assets, there were no significant deferred tax effects associated with the cumulative currency translation gains and losses during the quarter ended June 30, 2016.

(2) Ending balance is net of tax of $2.0 million and $2.3 million as of June 30, 2016 and June 30, 2015, respectively.

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Investment in NEC TOKIN Equity Investment in NEC Tokin (Tables)

3 Months Ended

Jun. 30, 2016

Schedule of Equity Method Investments [Line Items]

Reconciliation between NEC TOKIN's net loss and KEMET's equity investment loss

Summarized financial information for NEC TOKIN follows (amounts in thousands):

	June 30, 2016		March 31, 2016
Current assets	$	247,713	$	240,427
Non-current assets	263,824		260,614
Current liabilities	178,451		179,360
Non-current liabilities	364,926		335,500

	Quarters Ended June 30,
	2016		2015
Sales	$	120,510	$	114,734
Gross profit	26,546		24,668
Net income (loss)	2,350		5,255

A reconciliation between NEC TOKIN's net income (loss) and KEC's equity investment income (loss) follows (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
NEC TOKIN net income (loss)	$	2,350		$	5,255
KEC's economic interest %	34		%	34		%
Equity income (loss) from NEC TOKIN before adjustments	799			1,787
Adjustments:
Amortization and depreciation	(544		)	(136		)
Inventory profit elimination	(32		)	(66		)
Equity income (loss) from NEC TOKIN	$	223		$	1,585

A reconciliation between NEC TOKIN's net assets and KEC's investment in NEC TOKIN balance follows (amounts in thousands):

	June 30, 2016			March 31, 2016
Investment in NEC TOKIN	$	15,172		$	20,334
Purchase price accounting basis adjustments:
Property, plant and equipment (1)	3,598			3,365
Technology (1)	(10,676		)	(10,134		)
Long-term debt (1)	(1,910		)	(1,975		)
Goodwill	(8,262		)	(7,555		)
Indemnity asset for legal investigation	(8,500		)	(8,500		)
Inventory profit elimination (2)	403			371
Other	(651		)	(604		)
KEC's 34% economic interest in NEC TOKIN's net assets	$	(10,826	)	$	(4,698	)

(1) Amortized over the estimated lives.

(2) Adjusted each period for any activity.

Related Party Transactions Disclosure [Text Block]

Summarized transactions between KEC and NEC TOKIN are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
KEC's sales to NEC TOKIN	$	3,147	$	4,855
NEC TOKIN's sales to KEMET	1,872		1,478

	June 30, 2016		March 31, 2016
Accounts receivable	$	2,072	$	5,220
Accounts payable	1,250		1,019
Management service agreement receivable (1)	693		748

(1) In accordance with the Stockholders’ Agreement, KEC entered into a management services agreement with NEC TOKIN to provide services for which KEC is being reimbursed.

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Segment and Geographic Information (Tables)

3 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of business group's net sales, operating income (loss), depreciation and amortization expenses and sales by region

The following table reflects each business group’s net sales, operating income (loss), depreciation and amortization expenses and sales by region for the quarters endedJune 30, 2016 and 2015 (amounts in thousands):

	Quarters Ended June 30,
	2016			2015
Net sales:
Solid Capacitors	$	141,944		$	139,677
Film and Electrolytic	42,991			47,913
	$	184,935		$	187,590
Operating income (loss) (1):
Solid Capacitors	$	35,079		$	30,033
Film and Electrolytic	(1,467		)	712
Corporate	(24,714		)	(29,502		)
	$	8,898		$	1,243
Depreciation and amortization expense:
Solid Capacitors	$	5,418		$	5,756
Film and Electrolytic	2,715			2,942
Corporate	1,303			1,219
	$	9,436		$	9,917

__________________

(1)Restructuring charges included in Operating income (loss) are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016		2015
Restructuring charges:
Solid Capacitors	$	136	$	232
Film and Electrolytic	549		1,286
Corporate	3		306
	$	688	$	1,824

___________________

	Quarters Ended June 30,
	2016		2015
Sales by region:
North and South America (“Americas”)	$	55,101	$	56,034
Europe, Middle East, Africa (“EMEA”)	60,486		61,557
Asia and Pacific Rim (“APAC”)	69,348		69,999
	$	184,935	$	187,590

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Defined Benefit Pension and Other Postretirement Benefit Plans (Tables)

3 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of components of net periodic benefit (income) costs relating to pension and other postretirement benefit plans

The components of net periodic benefit (income) costs relating to the Company’s pension and other postretirement benefit plans are as follows for the quarters ended June 30, 2016 and 2015 (amounts in thousands):

	Pension						Post-retirement Benefit Plan
	Quarters Ended June 30,						Quarters Ended June 30,
	2016			2015			2016			2015
Net service cost	$	347		$	717		$	—		$	—
Interest cost	358			338			4			6
Expected return on net assets	(94		)	(105		)	—			—
Amortization:
Actuarial (gain) loss	115			197			(42		)	(40		)
Prior service cost	21			15			—			—
Total net periodic benefit (income) costs	$	747		$	1,162		$	(38	)	$	(34	)

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Stock-based Compensation (Tables)

3 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding [Table Text Block]

The following is the vesting schedule of RSUs under each respective LTIP, which vested during the three-month period endedJune 30, 2016 (shares in thousands):

	2016/2017	2015/2016	2014/2015
Time-based award vested	178	111	118
Performance-based award vested	—	103	73

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

Restricted stock activity, excluding the LTIP activity discussed above, for the three-month period endedJune 30, 2016 is as follows (amounts in thousands except fair value):

	Shares	Weighted- average Fair Value on Grant Date
Non-vested restricted stock at March 31, 2016	1,430	$	3.51
Granted	—
Vested	—
Forfeited	—
Non-vested restricted stock at June 30, 2016	1,430	$	3.51

Schedule of the compensation expense (recovery) associated with stock-based compensation

The compensation expense associated with stock-based compensation for the quarters ended June 30, 2016 and 2015 is recorded on the Condensed Consolidated Statements of Operations as follows (amounts in thousands):

	Quarter Ended June 30, 2016						Quarter Ended June 30, 2015
	Stock  Options		Restricted  Stock		LTIPs		Stock  Options		Restricted  Stock		LTIPs
Cost of sales	$	9	$	192	$	183	$	34	$	151	$	228
Selling, general and administrative expenses	10		347		427		42		343		458
Research and development	—		6		54		1		5		17
Total	$	19	$	545	$	664	$	77	$	499	$	703

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Basic and Diluted Net Loss Per Common Share (Tables)

3 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Schedule of basic EPS and diluted EPS

The following table presents basic earnings per share ("EPS") and diluted EPS (amounts in thousands, except per share data):

	Quarters Ended June 30,
	2016			2015
Numerator:
Net income (loss)	$	(12,205	)	$	(37,050	)
Denominator:
Weighted-average shares outstanding:
Basic	46,349			45,552
Assumed conversion of employee stock grants	—			—
Assumed conversion of warrants	—			—
Diluted	46,349			45,552
Net income (loss) per basic and diluted share	$	(0.26	)	$	(0.81	)

Schedule of common stock equivalents that could potentially dilute net income (loss) per basic share in the future, but were not included in the computation of diluted earnings per share because the impact would have been antidilutive

Common stock equivalents that could potentially dilute net income (loss) per basic share in the future, but were not included in the computation of diluted earnings per share because the impact would have been anti-dilutive, are as follows (amounts in thousands):

	Quarters Ended June 30,
	2016	2015
Assumed conversion of employee stock grants	2,330	2,303
Assumed conversion of warrants	4,853	6,015

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Derivatives Derivative Instruments (Tables)

3 Months Ended

Jun. 30, 2016

Derivatives [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The balance sheet classifications and fair value of derivative instruments as of June 30, 2016 are as follows (amounts in thousands):

	Fair Value of Derivative Instruments
	June 30, 2016
Balance Sheet Presentation	As Presented (1)		Offset			Gross
Prepaid and other current assets	$	—	$	(38	)	$	(38	)
Accrued expenses	1,232		38			1,270

______________________________________________________________________________

(1) Fair Value measured using Level 2 inputs by adjusting the market spot rate by forward points, based on the date of the contract. The spot rates and forward points used are based on an average rate from an actively traded market.

Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block]

The impact on the Consolidated Statement of Operations for the three-month period endedJune 30, 2016 is as follows (amounts in thousands):

Impact of Foreign Exchange Contracts on Condensed Consolidated Statement of Operations
Statement Caption	Three-Month Period Ended June 30, 2016
Net Sales	$	—
Operating costs and expenses:
Cost of sales	$	(1,753	)
Total operating costs and expenses	$	(1,753	)
Operating income (loss)	$	(1,753	)

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivatives

In fiscal year 2015, the Company began using certain derivative instruments (i.e., foreign exchange contracts) to reduce exposure to the volatility of foreign currencies impacting revenues and the costs of its products.

Certain operating expenses at the Company's Mexican facilities are paid in Mexican pesos. In order to hedge a portion of these forecasted cash flows, the Company purchases foreign exchange contracts, with terms generally less than twelve months, to buy Mexican pesos for periods and amounts consistent with underlying cash flow exposures. These contracts are designated as cash flow hedges at inception and monitored for effectiveness on a routine basis. There were $34.1 million in peso contracts (notional value) outstanding at June 30, 2016.

The Company formally documents all relationships between hedging instruments and hedged items, as well as risk management objectives and strategies for undertaking various hedge transactions.

The Company records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a net basis, since they are subject to master netting agreements. However, if the Company were to offset and record the asset and liability balances of its forward foreign currency exchange contracts on a gross basis, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current net presentation to the gross amounts as detailed in the following table.

The balance sheet classifications and fair value of derivative instruments as of June 30, 2016 are as follows (amounts in thousands):

	Fair Value of Derivative Instruments
	June 30, 2016
Balance Sheet Presentation	As Presented (1)		Offset			Gross
Prepaid and other current assets	$	—	$	(38	)	$	(38	)
Accrued expenses	1,232		38			1,270

______________________________________________________________________________

(1) Fair Value measured using Level 2 inputs by adjusting the market spot rate by forward points, based on the date of the contract. The spot rates and forward points used are based on an average rate from an actively traded market.

The impact on the Consolidated Statement of Operations for the three-month period endedJune 30, 2016 is as follows (amounts in thousands):

Impact of Foreign Exchange Contracts on Condensed Consolidated Statement of Operations
Statement Caption	Three-Month Period Ended June 30, 2016
Net Sales	$	—
Operating costs and expenses:
Cost of sales	$	(1,753	)
Total operating costs and expenses	$	(1,753	)
Operating income (loss)	$	(1,753	)

Unrealized gains and losses associated with the change in value of these financial instruments are recorded in AOCI. Changes in the derivatives' fair values are deferred and recorded as a component of AOCI until the underlying transaction is settled and recorded to the income statement. When the hedged item affects income, gains or losses are reclassified from AOCI to the Consolidated Statement of Operations as Cost of sales for foreign exchange contracts to purchase such foreign currency. Any ineffectiveness, if material, in the Company's hedging relationships is recognized immediately as a loss, within the same income statement accounts as described above; to date, there has been no ineffectiveness. Changes in derivative balances impact the line items "Prepaid and other assets" and "Accrued Expenses" on the Consolidated Balance Sheets and Statements of Cash Flows.

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Condensed Consolidating Financial Statements (Tables)

3 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet (1)

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
Goodwill	—		40,294		—		—			40,294
Intangible assets, net	—		27,252		6,049		—			33,301
Investment in NEC TOKIN	—		20,334		—		—			20,334
Investments in subsidiaries	382,108		429,723		93,359		(905,190		)	—
Deferred income taxes	—		800		7,597		—			8,397
Other assets	—		2,452		616		—			3,068
Long-term intercompany receivable	67,500		41,428		1,088		(110,016		)	—
Total assets	$	484,038	$	991,426	$	575,443	$	(1,351,127	)	$	699,780
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	2,000	$	—	$	—	$	—		$	2,000
Accounts payable	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	351,952		19,881		14,000		—			385,833
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	$	484,038	$	991,426	$	575,443	$	(1,351,127	)	$	699,780

(1) Derived from audited financial statements.

Condensed Consolidating Balance Sheet

June 30, 2016

(Unaudited)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	640	$	22,573	$	29,725	$	—		$	52,938
Accounts receivable, net	—		33,716		55,369		—			89,085
Intercompany receivable	30,994		169,569		160,801		(361,364		)	—
Inventories, net	—		110,132		57,784		—			167,916
Prepaid expenses and other	3,325		16,833		13,731		(2,964		)	30,925
Deferred income taxes	—		—		—		—			—
Total current assets	34,959		352,823		317,410		(364,328		)	340,864
Property and equipment, net	244		90,226		141,218		—			231,688
Goodwill	—		40,294		—		—			40,294
Intangible assets, net	—		26,861		5,752		—			32,613
Investment in NEC TOKIN	—		15,172		—		—			15,172
Investments in subsidiaries	369,627		427,702		93,359		(890,688		)	—
Deferred income taxes	—		768		6,837		—			7,605
Other assets	—		2,144		600		—			2,744
Long-term intercompany receivable	65,822		40,397		1,089		(107,308		)	—
Total assets	$	470,652	$	996,387	$	566,265	$	(1,362,324	)	$	670,980
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—	$	—	$	—		$	—
Accounts payable	67		34,863		31,895		—			66,825
Intercompany payable	22,783		272,840		65,741		(361,364		)	—
Accrued expenses	7,320		13,042		21,536		—			41,898
Income taxes payable	—		2,988		192		(2,964		)	216
Total current liabilities	30,170		323,733		119,364		(364,328		)	108,939
Long-term debt, less current portion	352,087		19,881		14,000		—			385,968
Other non-current obligations	—		37,296		47,398		—			84,694
Deferred income taxes	—		2,242		742		—			2,984
Long-term intercompany payable	—		65,822		41,486		(107,308		)	—
Stockholders’ equity	88,395		547,413		343,275		(890,688		)	88,395
Total liabilities and stockholders’ equity	$	470,652	$	996,387	$	566,265	$	(1,362,324	)	$	670,980

Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Operations

For the Quarter Ended June 30, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	221,770		$	181,600		$	(215,780	)	$	187,590
Operating costs and expenses:
Cost of sales	178			181,514			166,230			(200,045		)	147,877
Selling, general and administrative expenses	9,816			23,479			12,870			(15,735		)	30,430
Research and development	(119		)	4,384			2,009			—			6,274
Restructuring charges	—			515			1,309			—			1,824
Net (gain) loss on sales and disposals of assets	—			(353		)	295			—			(58		)
Total operating costs and expenses	9,875			209,539			182,713			(215,780		)	186,347
Operating income (loss)	(9,875		)	12,231			(1,113		)	—			1,243
Non-operating (income) expense:
Interest income	—			—			(3		)	—			(3		)
Interest expense	9,469			332			212			—			10,013
Change in value of NEC TOKIN option	—			29,200			—			—			29,200
Other (income) expense, net	(9,087		)	7,802			2,201			—			916
Equity in earnings of subsidiaries	26,793			—			—			(26,793		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(37,050		)	(25,103		)	(3,523		)	26,793			(38,883		)
Income tax expense (benefit)	—			(487		)	239			—			(248		)
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(37,050		)	(24,616		)	(3,762		)	26,793			(38,635		)
Equity income (loss) from NEC TOKIN	—			1,585			—			—			1,585
Net income (loss)	$	(37,050	)	$	(23,031	)	$	(3,762	)	$	26,793		$	(37,050	)

Condensed Consolidating Statement of Operations

For the Quarter Ended June 30, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	213,513	$	170,550		$	(199,128	)	$	184,935
Operating costs and expenses:
Cost of sales	277			167,103		161,230			(186,198		)	142,412
Selling, general and administrative expenses	10,145			17,489		11,210			(12,930		)	25,914
Research and development	65			4,375		2,492			—			6,932
Restructuring charges	—			139		549			—			688
Net (gain) loss on sales and disposals of assets	—			388		(297		)	—			91
Total operating costs and expenses	10,487			189,494		175,184			(199,128		)	176,037
Operating income (loss)	(10,487		)	24,019		(4,634		)	—			8,898
Non-operating (income) expense:
Interest income	—			3		(6		)	—			(3		)
Interest expense	9,423			399		101			—			9,923
Change in value of NEC TOKIN option	—			12,000		—			—			12,000
Other (income) expense, net	(9,350		)	9,416		(2,460		)	—			(2,394		)
Equity in earnings of subsidiaries	1,645			—		—			(1,645		)	—
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(12,205		)	2,201		(2,269		)	1,645			(10,628		)
Income tax expense (benefit)	—			38		1,762			—			1,800
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,205		)	2,163		(4,031		)	1,645			(12,428		)
Equity income (loss) from NEC TOKIN	—			223		—			—			223
Net income (loss)	$	(12,205	)	$	2,386	$	(4,031	)	$	1,645		$	(12,205	)

Condensed Statement of Comprehensive Income

Condensed Consolidating Statements of Comprehensive Income (Loss)

Quarter Ended June 30, 2016

(Unaudited)

Comprehensive income (loss) $ (13,883 ) $ (3,687 ) $ (8,794 ) $ 1,645 $ (24,719 )

Condensed Consolidating Statements of Comprehensive Income (Loss)

For the Quarter Ended June 30, 2015

(Unaudited)

Comprehensive income (loss) $ (34,501 ) $ (27,935 ) $ 706 $ 26,793 $ (34,937 )

Condensed Consolidating Statement of Cash Flows

Condensed

Consolidating Statement of Cash Flows

For the Quarter Ended June 30, 2016

(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	$	2,465		$	(13,651	)	$	8,150		$	—	$	(3,036	)
Investing activities:
Capital expenditures	—			15			(6,182		)	—		(6,167		)
Proceeds from sale of assets	—			—			—			—		—
Acquisitions, net of cash received	—			—			—			—		—
Net cash used in investing activities	—			15			(6,182		)	—		(6,167		)
Financing activities:
Proceeds from revolving line of credit	—			—			—			—		—
Payments of revolving line of credit	—			—			—			—		—
Payments of long-term debt	(1,870		)	—			—			—		(1,870		)
Purchase of treasury stock	(595		)	—			—			—		(595		)
Net cash provided by (used in) financing activities	(2,465		)	—			—			—		(2,465		)
Net increase (decrease) in cash and cash equivalents	—			(13,636		)	1,968			—		(11,668		)
Effect of foreign currency fluctuations on cash	—			—			(398		)	—		(398		)
Cash and cash equivalents at beginning of fiscal period	640			36,209			28,155			—		65,004
Cash and cash equivalents at end of fiscal period	$	640		$	22,573		$	29,725		$	—	$	52,938

Condensed Consolidating Statements of Cash Flows

For the Quarter Ended June 30, 2015

(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	$	544		$	(17,034	)	$	(5,034	)	$	—	$	(21,524	)
Investing activities:
Capital expenditures	—			(3,912		)	(1,861		)	—		(5,773		)
Acquisitions, net of cash received	—			(2,892		)	—			—		(2,892		)
Net cash used in investing activities	—			(6,804		)	(1,861		)	—		(8,665		)
Financing activities:
Proceeds from revolving line of credit	—			6,000			2,000			—		8,000
Payments of revolving line of credit	—			(2,500		)	—			—		(2,500		)
Payments of long-term debt	—			—			(481		)	—		(481		)
Purchase of treasury stock	(544		)	—			—			—		(544		)
Net cash provided by (used in) financing activities	(544		)	3,500			1,519			—		4,475
Net increase (decrease) in cash and cash equivalents	—			(20,338		)	(5,376		)	—		(25,714		)
Effect of foreign currency fluctuations on cash	—			—			411			—		411
Cash and cash equivalents at beginning of fiscal period	640			33,094			22,628			—		56,362
Cash and cash equivalents at end of fiscal period	$	640		$	12,756		$	17,663		$	—	$	31,059

XML

Basis of Financial Statement Presentation (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2016
Segment Reporting, Other Significant Reconciling Item, Consolidated [Abstract]
Other Assets			$ 3,068
Total assets	$ 670,980		699,780
Long-term debt, less current portion	385,968		385,833
Liabilities and Equity	670,980		699,780
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Money markets	739		738
Debt, Long-term and Short-term, Combined Amount	(385,968)		(387,833)
Change in value of NEC TOKIN options	12,000	$ 29,200
Inventory, Gross [Abstract]
Raw materials and supplies	78,936		80,289
Work in process	48,478		46,631
Finished goods	55,697		58,060
Inventory, gross	183,111		184,980
Inventory reserves	(15,195)		(16,101)
Inventories, net	$ 167,916		$ 168,879
Warrant
Number of shares subject to a warrant held by K Equity, LLC	8,416,815		8,416,815
Revenue Recognition
Maximum Percentage of Purchased Inventory that Can be Returned by Distributor	6.00%
Period of product warranty	1 year
Warranty costs as a percentage of net sales, maximum	1.00%	1.00%
Reported Value Measurement [Member]
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Derivative Assets (Liabilities), at Fair Value, Net	$ (32,600)		$ (20,600)
Recurring
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Money markets	739		738
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs	(32,600)		(20,600)
Change in value of NEC TOKIN options	12,000
Recurring | Estimate of Fair Value Measurement [Member]
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Total debt	(366,533)		(284,261)
Derivative Assets (Liabilities), at Fair Value, Net	(32,600)		(20,600)
Recurring | Level 1
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Money markets	739		738
Debt, Long-term and Short-term, Combined Amount	(337,115)		(254,713)
Recurring | Level 2
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Money markets	0		0
Debt, Long-term and Short-term, Combined Amount	(29,418)		(29,548)
Recurring | Level 3
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Money markets	0		0
Debt, Long-term and Short-term, Combined Amount	0		0
Restatement Adjustment [Member] | Accounting Standards Update 2015-17 [Member]
Segment Reporting, Other Significant Reconciling Item, Consolidated [Abstract]
Other Assets			(2,764)
Total assets			(2,764)
Long-term debt, less current portion			(2,764)
Liabilities and Equity			(2,764)
Scenario, Previously Reported [Member] | Accounting Standards Update 2015-17 [Member]
Segment Reporting, Other Significant Reconciling Item, Consolidated [Abstract]
Other Assets			5,832
Total assets			702,544
Long-term debt, less current portion			388,597
Liabilities and Equity			702,544
NEC TOKIN Corporation [Member] | Put Option [Member]
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Forward Option Net Asset (Liability) Fair Value	(32,600)		(20,600)
NEC TOKIN Corporation [Member] | Put Option [Member] | Recurring | Level 3
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Change in value of NEC TOKIN options	$ 12,000
Other Noncurrent Assets [Member] | NEC TOKIN Corporation [Member] | Put Option [Member] | Recurring | Level 3
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Forward Option Net Asset (Liability) Fair Value			$ (20,600)

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Debt (Details) - USD ($)	3 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Mar. 31, 2015	May 02, 2016
Debt, Long-term and Short-term, Combined Amount [Abstract]
Total debt	$ 385,968,000	$ 387,833,000
Line of Credit Facility, Fair Value of Amount Outstanding	33,881,000	33,881,000
Current portion of long-term debt	0	(2,000,000)
Total long-term debt	385,968,000	385,833,000
Amortization of Financing and Debt Discount	(900,000)	(1,000,000)
Interest expense
Contractual interest expense	9,710,000		$ 9,746,000
Interest Costs Capitalized Adjustment	(52,000)		0
Amortization of debt issuance costs	348,000		348,000
Amortization of debt (premium) discount	(199,000)		(181,000)
Amortization of Acquisition Costs	41,000		53,000
Interest expense on capital lease	75,000		47,000
Total interest expense	9,923,000		10,013,000
Line of Credit Facility [Abstract]
Proceeds from Lines of Credit	0
Repayments of lines of credit	0		$ 2,500,000
10.5% Senior Notes, net (1)
Debt, Long-term and Short-term, Combined Amount [Abstract]
Total debt	352,087,000	353,952,000
Amortization of Financing and Debt Discount	$ (913,000)			$ (1,047,000)
Line of Credit Facility [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	10.50%
Long-term Debt, Unclassified [Abstract]
Repayments of Debt	$ 2,000,000
Long-term debt outstanding	353,000,000	354,999,000
Interest payable	6,200,000	15,500,000
Revolving Line of Credit
Line of Credit Facility [Abstract]
Line of Credit Facility, Current Borrowing Capacity					$ 65,000,000
Remaining borrowing capacity	31,100,000
Domestic Line of Credit [Member]
Debt, Long-term and Short-term, Combined Amount [Abstract]
Line of Credit Facility, Fair Value of Amount Outstanding	19,881,000	19,881,000
Line of Credit Facility [Abstract]
Proceeds from Lines of Credit	0
Repayments of lines of credit	$ 0
Domestic Line of Credit [Member] | Base Rate [Member]
Line of Credit Facility [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	4.75%
Foreign Line of Credit [Member]
Line of Credit Facility [Abstract]
Proceeds from Lines of Credit	$ 0
Foreign Line of Credit [Member] | LIBOR
Line of Credit Facility [Abstract]
Debt Instrument, Basis Spread on Variable Rate	2.50%
US Facility [Member] | Base Rate [Member]
Line of Credit Facility [Abstract]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Letter of Credit One [Member] | Foreign Line of Credit [Member]
Debt, Long-term and Short-term, Combined Amount [Abstract]
Line of Credit Facility, Fair Value of Amount Outstanding	$ 12,000,000	$ 12,000,000
Letter of Credit One [Member] | Foreign Line of Credit [Member] | LIBOR
Line of Credit Facility [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	3.25%
Letter of Credit Two [Member] | Foreign Line of Credit [Member]
Debt, Long-term and Short-term, Combined Amount [Abstract]
Line of Credit Facility, Fair Value of Amount Outstanding	$ 2,000,000
Letter of Credit Two [Member] | Foreign Line of Credit [Member] | LIBOR
Line of Credit Facility [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	3.25%

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Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Restructuring Charges
Restructuring charges	$ 688	$ 1,824
Reconciliation of restructuring liability
Costs charged to expense	688	1,824
Solid Capacitors
Restructuring Charges
Restructuring charges	136	232
Reconciliation of restructuring liability
Costs charged to expense	136	232
Film and Electrolytic [Member]
Restructuring Charges
Restructuring charges	549	1,286
Reconciliation of restructuring liability
Costs charged to expense	549	1,286
Manufacturing Relocation [Member]
Restructuring Charges
Restructuring charges	41	280
Reconciliation of restructuring liability
Beginning of period	0	0
Costs charged to expense	41	280
Costs paid or settled	(41)	(280)
Change in foreign exchange	0	0
End of period	0	0
Manufacturing Relocation [Member] | Film and Electrolytic [Member]
Restructuring Charges
Restructuring charges	41	280
Reconciliation of restructuring liability
Costs charged to expense	41	280
Employee Severance [Member]
Restructuring Charges
Restructuring charges	647	1,544
Reconciliation of restructuring liability
Beginning of period	976	7,239
Costs charged to expense	647	1,544
Costs paid or settled	(523)	(2,439)
Change in foreign exchange	(21)	212
End of period	1,079	6,556
Employee Severance [Member] | SWEDEN | Film and Electrolytic [Member]
Restructuring Charges
Restructuring charges	300
Reconciliation of restructuring liability
Costs charged to expense	300
Employee Severance [Member] | CHINA | Film and Electrolytic [Member]
Restructuring Charges
Restructuring charges		600
Reconciliation of restructuring liability
Costs charged to expense		600
Employee Severance [Member] | Landsberg Germany [Member] | Film and Electrolytic [Member]
Restructuring Charges
Restructuring charges	200	500
Reconciliation of restructuring liability
Costs charged to expense	200	500
Employee Severance [Member] | Mexican operations | Solid Capacitors
Restructuring Charges
Restructuring charges		200
Reconciliation of restructuring liability
Costs charged to expense		200
Employee Severance [Member] | Europe and North America [Member] | Corporate, Non-Segment [Member]
Restructuring Charges
Restructuring charges		200
Reconciliation of restructuring liability
Costs charged to expense		$ 200
Employee Severance [Member] | Victoria Mexico [Member] | Solid Capacitors
Restructuring Charges
Restructuring charges	100
Reconciliation of restructuring liability
Costs charged to expense	$ 100

XML

Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	$ (31,425)	$ (28,796)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(14,388)	1,421
Other Comprehensive Income, Other, Net of Tax	1,874	692
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	12,514	(2,113)
Balance at the end of the period	(43,939)	(26,683)
Foreign Currency Translation
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(10,272)	(12,132)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(6,386)	5,865
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	6,386	(5,865)
Balance at the end of the period	(16,658)	(6,267)
Deferred Income Taxes Related to Other Comprehensive Income	0
Accumulated Defined Benefit Plans Adjustment [Member]
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(15,161)	(20,363)
Amounts reclassified out of AOCI	(163)	(167)
Other Comprehensive Income, Other, Net of Tax	163	167
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(163)	(167)
Balance at the end of the period	(14,998)	(20,196)
Accumulated tax expense (benefit)	2,000	2,300
Post-Retirement Benefit Plans
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	1,114	1,159
Amounts reclassified out of AOCI	42	40
Other Comprehensive Income, Other, Net of Tax	(42)	(40)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(42)	(40)
Balance at the end of the period	1,072	1,119
Ownership Share of Equity Method Investees’ Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(6,739)	1,537
Amounts reclassified out of AOCI	5,384	932
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	5,384	932
Balance at the end of the period	(12,123)	605
Forward Contracts [Member]
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(367)	1,003
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(2,618)	(3,512)
Amounts reclassified out of AOCI	1,753	565
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	865	2,947
Balance at the end of the period	$ (1,232)	$ (1,944)

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Investment in NEC TOKIN Investment in NEC TOKIN Stock Purchase Agreement (Details) $ in Thousands		3 Months Ended		8 Months Ended
	Feb. 01, 2013 USD ($) director_position	Jun. 30, 2016 USD ($) number_of_times	Jun. 30, 2015 USD ($)	Apr. 30, 2015 number_of_times	Mar. 31, 2016 USD ($)	Mar. 31, 2015	Mar. 12, 2012
Schedule of Equity Method Investments [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)		$ (12,000)	$ (29,200)
NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage		34.00%				34.00%
Stockholders Agreement [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Number of Director Positions | director_position	7
Put Option [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Derivative Assets (Liabilities), at Fair Value, Net		$ (32,600)			$ (20,600)
KEMET Electronics Corporation [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Aggregate Cost	$ 54,500
Business Acquisition, Transaction Costs	4,500
KEMET Electronics Corporation [Member] | Stock Purchase Agreement [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired							51.00%
Equity Method Investment, Ownership Percentage							34.00%
Payments to Acquire Businesses, Gross	50,000
Payments to Acquire Equity Method Investments	$ 50,000
KEMET Electronics Corporation [Member] | Stockholders Agreement [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Number of Director Positions | director_position	4
KEMET Electronics Corporation [Member] | Option Agreement [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Business Acquisition Potential Future Purchase Price		$ 50,000
Economic Ownership, Percentage of Ownership After Transaction				49.00%
Sale of Stock, Percentage of Ownership after Transaction				51.00%
Business Acquisition Contingent Consideration Multiple Applied to LTMEBITDA to Determine Purchase Price | number_of_times				6
KEMET Electronics Corporation [Member] | Put Option [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Business Acquisition Contingent Consideration Multiple Applied to LTMEBITDA to Determine Purchase Price | number_of_times		6
Senior Notes [Member]
Schedule of Equity Method Investments [Line Items]
Debt Instrument, Interest Rate, Stated Percentage		10.50%
Fair Value, Measurements, Recurring [Member]
Schedule of Equity Method Investments [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)		$ (12,000)
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Put Option [Member] | NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)		$ (12,000)

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Investment in NEC TOKIN (Details) - NEC TOKIN Corporation [Member] - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2016
Summarized financial information
Net income (loss)	$ 2,350	$ 5,255
Equity Method Investment, Summarized Financial Information, Assets [Abstract]
Current assets	247,713		$ 240,427
Non-current assets	263,824		260,614
Equity Method Investment, Summarized Financial Information, Liabilities and Equity [Abstract]
Current liabilities	178,451		179,360
Non-current liabilities	364,926		$ 335,500
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Sales	120,510	114,734
Gross profit	$ 26,546	$ 24,668

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Investment in NEC TOKIN NEC Tokin Equity Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2015
Schedule of Equity Method Investments [Line Items]
Income (Loss) from Equity Method Investments	$ 223	$ 1,585
NEC TOKIN Corporation [Member]
Schedule of Equity Method Investments [Line Items]
Net income (loss)	$ 2,350	5,255
KEC's economic interest %	34.00%		34.00%
Equity Method Investment, Equity Income (Loss) Before Adjustments	$ 799	1,787
Amortization and depreciation	(544)	(136)
Equity Method investment, Inventory Profit Elimination	(32)	(66)
Income (Loss) from Equity Method Investments	$ 223	$ 1,585

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Investment in NEC TOKIN NEC Tokin Equity Method Investment (Details) $ in Thousands, ¥ in Millions, TWD in Millions		3 Months Ended
	May 02, 2016 USD ($) suit	Jun. 30, 2016 USD ($) item	Jun. 30, 2016 JPY (¥) item	Jun. 30, 2016 TWD item	Jun. 30, 2015 USD ($)	Mar. 31, 2016 USD ($)	Mar. 31, 2015
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity [Abstract]
Investment in NEC TOKIN		$ 15,172				$ 20,334
NEC TOKIN Corporation [Member]
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity [Abstract]
Investment in NEC TOKIN		15,172				20,334
Property, plant and equipment (1)		3,598				3,365
Technology (1)		(10,676)				(10,134)
Long-term debt (1)		(1,910)				(1,975)
Goodwill		(8,262)				(7,555)
Equity Method Investment, Indemnity Asset		(8,500)				(8,500)
Inventory Profit Elimination (2)		403				371
Other		(651)				(604)
KEC's 34% economic interest in NEC TOKIN's net assets		(10,826)				(4,698)
Related Party Transactions [Abstract]
Sales to NEC TOKIN		3,147			$ 4,855
NEC TOKIN's sales to KEMET		1,872			$ 1,478
Accounts receivable		2,072				5,220
Accounts payable		$ 1,250				1,019
KEC's economic interest %		34.00%					34.00%
NEC TOKIN Corporation [Member]
Related Party Transactions [Abstract]
Loss Contingency Accrual		$ 81,500
KEMET Electronics Corporation [Member]
Related Party Transactions [Abstract]
Business Combination, Indemnification Assets, Range of Outcomes, Value, Low		8,500
Stockholders Agreement [Member] | KEMET Electronics Corporation [Member]
Related Party Transactions [Abstract]
Receivable balances		693				$ 748
Equity Method Investments [Member] | Stockholders Agreement [Member]
Related Party Transactions [Abstract]
Business Combination, Indemnification Assets, Range of Outcomes, Value, Low		25,000
Indemnification Agreement [Member] | Equity Method Investments [Member]
Related Party Transactions [Abstract]
Litigation Settlement, Amount		13,800
Indemnification Agreement [Member] | Equity Method Investments [Member] | NEC TOKIN Corporation [Member]
Related Party Transactions [Abstract]
Litigation Settlement, Amount	$ 37,300
Settled Litigation [Member] | Indemnification Agreement [Member] | Equity Method Investments [Member]
Related Party Transactions [Abstract]
Litigation Settlement, Amount		$ 2,300
Business Combination, Indemnification Assets, Description | item		6	6	6
Preliminary Settlement [Member] | Indemnification Agreement [Member] | Equity Method Investments [Member] | NEC TOKIN Corporation [Member]
Related Party Transactions [Abstract]
Loss Contingency, Pending Claims, Number | suit	2
TAIWAN, PROVINCE OF CHINA | Taiwan, New Dollars
Related Party Transactions [Abstract]
Loss Contingency, Damages Sought, Value | TWD				TWD 1,218.2
TAIWAN, PROVINCE OF CHINA | Taiwan, New Dollars | Minimum
Related Party Transactions [Abstract]
Loss Contingency, Damages Sought, Value | TWD				609.1
TAIWAN, PROVINCE OF CHINA | United States of America, Dollars
Related Party Transactions [Abstract]
Loss Contingency, Damages Sought, Value | TWD				TWD 37.7
TAIWAN, PROVINCE OF CHINA | United States of America, Dollars | Minimum
Related Party Transactions [Abstract]
Loss Contingency, Damages Sought, Value		$ 18,900
JAPAN | United States of America, Dollars
Related Party Transactions [Abstract]
Litigation Settlement, Amount		$ 1,200
JAPAN | Japan, Yen
Related Party Transactions [Abstract]
Litigation Settlement, Amount | ¥			¥ 127.2

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Segment and Geographic Information (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2016 USD ($) manufacturing_site business_group	Jun. 30, 2015 USD ($)
Segment and geographic information
Number of business groups | business_group	2
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	$ 184,935	$ 187,590
Operating loss (loss)	8,898	1,243
Depreciation and amortization expense	9,436	9,917
Restructuring charges included in Operating income (loss)
Restructuring charges	688	1,824
North and South America (“Americas”)
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	55,101	56,034
Europe, Middle East, Africa (“EMEA”)
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	60,486	61,557
Asia and Pacific Rim (“APAC”)
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	69,348	69,999
Corporate, Non-Segment [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Operating loss (loss)	(24,714)	(29,502)
Depreciation and amortization expense	1,303	1,219
Restructuring charges included in Operating income (loss)
Restructuring charges	$ 3	306
Solid Capacitors [Member]
Segment and geographic information
Number of Manufacturing Sites | manufacturing_site	9
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	$ 141,944	139,677
Operating loss (loss)	35,079	30,033
Depreciation and amortization expense	5,418	5,756
Restructuring charges included in Operating income (loss)
Restructuring charges	$ 136	232
Film and Electrolytic [Member]
Segment and geographic information
Number of Manufacturing Sites | manufacturing_site	10
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	$ 42,991	47,913
Operating loss (loss)	(1,467)	712
Depreciation and amortization expense	2,715	2,942
Restructuring charges included in Operating income (loss)
Restructuring charges	$ 549	$ 1,286

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Defined Benefit Pension and Other Postretirement Benefit Plans (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2016 USD ($) plan	Jun. 30, 2015 USD ($)
Pension
Defined Benefit Plan Disclosure
Contribution by employer	$ 300
Net periodic benefit (income) costs
Net service cost	347	$ 717
Interest cost	358	338
Expected return on net assets	(94)	(105)
Amortization:
Defined Benefit Plan, Actuarial Gain (Loss)	115	197
Prior service cost	21	15
Total net periodic benefit (income) costs	747	1,162
Pension | Maximum
Defined Benefit Plan Disclosure
Estimated employer contribution in current fiscal year	$ 1,700
Pension | Europe
Defined Benefit Plan Disclosure
Defined Benefit Plan, Number of Plans | plan	6
Pension | Singapore
Defined Benefit Plan Disclosure
Defined Benefit Plan, Number of Plans | plan	1
Pension | Mexico
Defined Benefit Plan Disclosure
Defined Benefit Plan, Number of Plans | plan	2
Other Postretirement Benefit Plan [Member]
Net periodic benefit (income) costs
Net service cost	$ 0	0
Interest cost	4	6
Expected return on net assets	0	0
Amortization:
Defined Benefit Plan, Actuarial Gain (Loss)	(42)	(40)
Prior service cost	0	0
Total net periodic benefit (income) costs	$ (38)	$ (34)

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Stock-based Compensation LTIP (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended
	Jun. 29, 2015	Jun. 30, 2016	Jun. 30, 2015
Stock Options
Stock-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		7,400
Expiration period		10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		$ 19	$ 77
Stock Options | Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		9	34
Stock Options | Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		10	42
Stock Options | Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		$ 0	1
Stock Options | Minimum
Stock-based Compensation
Vesting period		1 year
Stock Options | Maximum
Stock-based Compensation
Vesting period		3 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		$ 545	499
Restricted Stock | Executive leadership
Stock-based Compensation
Period of restriction for sale of shares		90 days
Restricted Stock | Chief Executive Officer
Stock-based Compensation
Period of restriction for sale of shares		90 days
Restricted Stock | Director
Stock-based Compensation
Period of restriction for sale of shares		90 days
Restricted Stock | Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		$ 192	151
Restricted Stock | Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		347	343
Restricted Stock | Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		$ 6	5
Omnibus Equity Incentive Plan 2011 [Member] | Stock Options
Stock-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		6,600
Prior Plans [Member] | Stock Options
Stock-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		800
Deferred Compensation, Share-based Payments [Member]
Stock-based Compensation
Performance period		P2Y
2013/2014 LTIP | Restricted stock units
Stock-based Compensation
Vesting period		3 years
2014/2015 LTIP | Restricted stock units
Stock-based Compensation
Vesting period		3 years
Restricted Stock | Deferred Compensation, Share-based Payments [Member]
Stock-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 2.46
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	613
Share-based Compensation Award, Tranche One [Member] | Restricted Stock | Deferred Compensation, Share-based Payments [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares		202
Share-based Compensation Award, Tranche Two [Member] | Restricted Stock | Deferred Compensation, Share-based Payments [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares		202
Share-based Compensation Award, Tranche Three [Member] | Restricted Stock | Deferred Compensation, Share-based Payments [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares		209
Deferred Compensation, Share-based Payments [Member] | Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		$ 183	228
Deferred Compensation, Share-based Payments [Member] | Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		427	458
Deferred Compensation, Share-based Payments [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		664	703
Deferred Compensation, Share-based Payments [Member] | Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Allocated Share-based Compensation Expense		$ 54	$ 17
Long Term Incentive Plan 2016 2017 [Member] | Deferred Compensation, Share-based Payments [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number		178
Long Term Incentive Plan 2015 2016 [Member] | Deferred Compensation, Share-based Payments [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number		111
Long Term Incentive Plan 2015 2016 [Member] | Deferred Compensation, Share-based Payments [Member] | Stock Options with Performance Conditions [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number		103
Long Term Incentive Plan 2014 2015 [Member] | Deferred Compensation, Share-based Payments [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number		118
Long Term Incentive Plan 2014 2015 [Member] | Deferred Compensation, Share-based Payments [Member] | Stock Options with Performance Conditions [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number		73

XML

Stock-based Compensation Stock-based Compensation Non-LTIP (Details) - Restricted Stock [Member] - $ / shares shares in Thousands	Jun. 30, 2016	Mar. 31, 2016
Stock-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	1,430	1,430
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 3.51	$ 3.51

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Income Taxes (Details) - USD ($)	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Income Tax Contingency [Line Items]
Current Income Tax Expense (Benefit)	$ 1,800,000
Current Foreign Tax Expense (Benefit)	1,800,000
Income tax expense (benefit)	1,800,000	$ (248,000)
Current Federal Tax Expense (Benefit)	$ 0	0
Foreign Tax Authority [Member]
Income Tax Contingency [Line Items]
Income tax expense (benefit)		300,000
State and Local Jurisdiction [Member]
Income Tax Contingency [Line Items]
Income tax expense (benefit)		100,000
Intellidata [Member]
Income Tax Contingency [Line Items]
Current Income Tax Expense (Benefit)		$ 600,000

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Basic and Diluted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Numerator:
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (12,205)	$ (37,050)
Weighted-average shares outstanding:
Basic	46,349	45,552
Assumed conversion of employee stock grants	0	0
Assumed conversion of warrants	0	0
Diluted (in shares)	46,349	45,552
Net income (loss) per basic share:
Net income (loss)	$ (0.26)	$ (0.81)
Assumed conversion of employee stock grants
Common stock equivalents that could potentially dilute net income per basic share in the future, but were not included in the computation of diluted earnings per share because the impact would have been antidilutive
Common stock equivalents	2,330	2,303
Assumed conversion of warrants
Common stock equivalents that could potentially dilute net income per basic share in the future, but were not included in the computation of diluted earnings per share because the impact would have been antidilutive
Common stock equivalents	4,853	6,015

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Derivatives Fair Value (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2016 USD ($)
Foreign Exchange Forward [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivative Instrument Detail [Abstract]
Derivative Asset, Fair Value, Gross Asset	$ 0
Derivative Asset, Fair Value, Gross Liability	38
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	(38)
Foreign Exchange Forward [Member] | Accrued Liabilities [Member]
Derivative Instrument Detail [Abstract]
Derivative Liability, Fair Value, Gross Liability	1,232
Derivative Liability, Fair Value, Gross Asset	38
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	1,270
Mexico, Pesos
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	34,100
Cost of sales
Derivative Instrument Detail [Abstract]
Derivative, Gain (Loss) on Derivative, Net	(1,753)
Operating Expense [Member]
Derivative Instrument Detail [Abstract]
Derivative, Gain (Loss) on Derivative, Net	(1,753)
Operating Income (Loss) [Member]
Derivative Instrument Detail [Abstract]
Derivative, Gain (Loss) on Derivative, Net	$ (1,753)

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Concentrations of Risks (Details)	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Sep. 30, 2014	Mar. 31, 2015
Net revenue | Sales risk
Concentration of Risk
Concentration Risk, Customer	1	1
Net revenue | Sales risk | Minimum
Concentration of Risk
Concentration risk, percentage	10.00%	10.00%
Net revenue | Electronics distributor risk
Concentration of Risk
Concentration risk, percentage	46.00%	43.00%
Accounts receivable | Sales risk
Concentration of Risk
Concentration Risk, Customer	0	0
Accounts receivable | Sales risk | Maximum
Concentration of Risk
Concentration risk, percentage			10.00%
Accounts receivable | Credit Concentration Risk [Member]
Concentration of Risk
Concentration Risk, Customer				0
Accounts receivable | Credit Concentration Risk [Member] | Maximum
Concentration of Risk
Concentration risk, percentage	10.00%

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Condensed Consolidating Financial Statements Balance Sheet (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Mar. 31, 2015
Current assets:
Cash and cash equivalents	$ 52,938	$ 65,004	$ 31,059	$ 56,362
Accounts receivable, net	89,085	93,168
Intercompany receivable	0	0
Inventories, net	167,916	168,879
Prepaid expenses and other	30,925	25,496
Deferred income taxes	0
Total current assets	340,864	352,547
Assets, Noncurrent [Abstract]
Property and equipment, net	231,688	241,839
Goodwill	40,294	40,294
Intangible assets, net	32,613	33,301
Investment in NEC TOKIN	15,172	20,334
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	0	0
Deferred income taxes	7,605	8,397
Other assets	2,744	3,068
Long-term intercompany receivable	0	0
Total assets	670,980	699,780
Current liabilities:
Current portion of long-term debt	0	2,000
Accounts payable	66,825	70,981
Intercompany payable	0	0
Accrued expenses	41,898	50,320
Taxes Payable, Current	216	453
Total current liabilities	108,939	123,754
Liabilities, Noncurrent [Abstract]
Long-term debt, less current portion	385,968	385,833
Other non-current obligations	84,694	74,892
Deferred income taxes	2,984	2,820
Long-term intercompany payable	0	0
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	88,395	112,481
Total liabilities and stockholders’ equity	670,980	699,780
Parent
Current assets:
Cash and cash equivalents	640	640	640	640
Accounts receivable, net	0	0
Intercompany receivable	30,994	30,210
Inventories, net	0	0
Prepaid expenses and other	3,325	3,325
Deferred income taxes	0
Total current assets	34,959	34,175
Assets, Noncurrent [Abstract]
Property and equipment, net	244	255
Goodwill	0	0
Intangible assets, net	0	0
Investment in NEC TOKIN	0	0
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	369,627	382,108
Deferred income taxes	0	0
Other assets	0	0
Long-term intercompany receivable	65,822	67,500
Total assets	470,652	484,038
Current liabilities:
Current portion of long-term debt	0	2,000
Accounts payable	67	20
Intercompany payable	22,783	280
Accrued expenses	7,320	17,305
Taxes Payable, Current	0	0
Total current liabilities	30,170	19,605
Liabilities, Noncurrent [Abstract]
Long-term debt, less current portion	352,087	351,952
Other non-current obligations	0	0
Deferred income taxes	0	0
Long-term intercompany payable	0	0
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	88,395	112,481
Total liabilities and stockholders’ equity	470,652	484,038
Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	22,573	36,209	12,756	33,094
Accounts receivable, net	33,716	41,025
Intercompany receivable	169,569	132,523
Inventories, net	110,132	113,289
Prepaid expenses and other	16,833	12,161
Deferred income taxes	0
Total current assets	352,823	335,207
Assets, Noncurrent [Abstract]
Property and equipment, net	90,226	93,936
Goodwill	40,294	40,294
Intangible assets, net	26,861	27,252
Investment in NEC TOKIN	15,172	20,334
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	427,702	429,723
Deferred income taxes	768	800
Other assets	2,144	2,452
Long-term intercompany receivable	40,397	41,428
Total assets	996,387	991,426
Current liabilities:
Current portion of long-term debt	0	0
Accounts payable	34,863	34,618
Intercompany payable	272,840	275,498
Accrued expenses	13,042	11,807
Taxes Payable, Current	2,988	2,983
Total current liabilities	323,733	324,906
Liabilities, Noncurrent [Abstract]
Long-term debt, less current portion	19,881	19,881
Other non-current obligations	37,296	25,797
Deferred income taxes	2,242	2,242
Long-term intercompany payable	65,822	67,500
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	547,413	551,100
Total liabilities and stockholders’ equity	996,387	991,426
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	29,725	28,155	17,663	22,628
Accounts receivable, net	55,369	52,143
Intercompany receivable	160,801	170,224
Inventories, net	57,784	55,590
Prepaid expenses and other	13,731	12,974
Deferred income taxes	0
Total current assets	317,410	319,086
Assets, Noncurrent [Abstract]
Property and equipment, net	141,218	147,648
Goodwill	0	0
Intangible assets, net	5,752	6,049
Investment in NEC TOKIN	0	0
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	93,359	93,359
Deferred income taxes	6,837	7,597
Other assets	600	616
Long-term intercompany receivable	1,089	1,088
Total assets	566,265	575,443
Current liabilities:
Current portion of long-term debt	0	0
Accounts payable	31,895	36,343
Intercompany payable	65,741	57,179
Accrued expenses	21,536	21,208
Taxes Payable, Current	192	434
Total current liabilities	119,364	115,164
Liabilities, Noncurrent [Abstract]
Long-term debt, less current portion	14,000	14,000
Other non-current obligations	47,398	49,095
Deferred income taxes	742	578
Long-term intercompany payable	41,486	42,516
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	343,275	354,090
Total liabilities and stockholders’ equity	$ 566,265	575,443
Reportable legal entities | Guarantor Subsidiaries
Condensed Consolidating Balance Sheet
Percentage of ownership interest	100.00%
Reclassifications and Eliminations
Current assets:
Cash and cash equivalents	$ 0	0	$ 0	$ 0
Accounts receivable, net	0	0
Intercompany receivable	(361,364)	(332,957)
Inventories, net	0	0
Prepaid expenses and other	(2,964)	(2,964)
Deferred income taxes	0
Total current assets	(364,328)	(335,921)
Assets, Noncurrent [Abstract]
Property and equipment, net	0	0
Goodwill	0	0
Intangible assets, net	0	0
Investment in NEC TOKIN	0	0
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	(890,688)	(905,190)
Deferred income taxes	0	0
Other assets	0	0
Long-term intercompany receivable	(107,308)	(110,016)
Total assets	(1,362,324)	(1,351,127)
Current liabilities:
Current portion of long-term debt	0	0
Accounts payable	0	0
Intercompany payable	(361,364)	(332,957)
Accrued expenses	0	0
Taxes Payable, Current	(2,964)	(2,964)
Total current liabilities	(364,328)	(335,921)
Liabilities, Noncurrent [Abstract]
Long-term debt, less current portion	0	0
Other non-current obligations	0	0
Deferred income taxes	0	0
Long-term intercompany payable	(107,308)	(110,016)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(890,688)	(905,190)
Total liabilities and stockholders’ equity	$ (1,362,324)	$ (1,351,127)
10.5% Senior Notes, net (1)
Condensed Consolidating Balance Sheet
Interest rate of senior notes (as a percent)	10.50%
10.5% Senior Notes, net (1) | Non-Guarantor Subsidiaries
Condensed Consolidating Balance Sheet
Percentage of capital stock	51.00%

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Condensed Consolidating Financial Statements Income Statement (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Revenues [Abstract]
Net sales	$ 184,935	$ 187,590
Operating costs and expenses:
Cost of sales	142,412	147,877
Selling, general and administrative expenses	25,914	30,430
Research and development	6,932	6,274
Restructuring charges	688	1,824
Net (gain) loss on sales and disposals of assets	91	(58)
Total operating costs and expenses	176,037	186,347
Operating income (loss)	8,898	1,243
Interest income	(3)	(3)
Interest Expense	9,923	10,013
Change in value of NEC TOKIN options	12,000	29,200
Other (income) expense, net	2,394	(916)
Income (Loss) from Subsidiaries, before Tax	0	0
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(10,628)	(38,883)
Income Tax Expense (Benefit)	1,800	(248)
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,428)	(38,635)
Income (Loss) from Equity Method Investments	223	1,585
Net Income (Loss) Attributable to Parent	(12,205)	(37,050)
Parent
Revenues [Abstract]
Net sales	0	0
Operating costs and expenses:
Cost of sales	277	178
Selling, general and administrative expenses	10,145	9,816
Research and development	65	(119)
Restructuring charges	0	0
Net (gain) loss on sales and disposals of assets	0	0
Total operating costs and expenses	10,487	9,875
Operating income (loss)	(10,487)	(9,875)
Interest income	0	0
Interest Expense	9,423	9,469
Change in value of NEC TOKIN options	0	0
Other (income) expense, net	9,350	9,087
Income (Loss) from Subsidiaries, before Tax	(1,645)	(26,793)
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(12,205)	(37,050)
Income Tax Expense (Benefit)	0	0
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(12,205)	(37,050)
Income (Loss) from Equity Method Investments	0	0
Net Income (Loss) Attributable to Parent	(12,205)	(37,050)
Guarantor Subsidiaries
Revenues [Abstract]
Net sales	213,513	221,770
Operating costs and expenses:
Cost of sales	167,103	181,514
Selling, general and administrative expenses	17,489	23,479
Research and development	4,375	4,384
Restructuring charges	139	515
Net (gain) loss on sales and disposals of assets	388	(353)
Total operating costs and expenses	189,494	209,539
Operating income (loss)	24,019	12,231
Interest income	3	0
Interest Expense	399	332
Change in value of NEC TOKIN options	12,000	29,200
Other (income) expense, net	(9,416)	(7,802)
Income (Loss) from Subsidiaries, before Tax	0	0
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	2,201	(25,103)
Income Tax Expense (Benefit)	38	(487)
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	2,163	(24,616)
Income (Loss) from Equity Method Investments	223	1,585
Net Income (Loss) Attributable to Parent	2,386	(23,031)
Non-Guarantor Subsidiaries
Revenues [Abstract]
Net sales	170,550	181,600
Operating costs and expenses:
Cost of sales	161,230	166,230
Selling, general and administrative expenses	11,210	12,870
Research and development	2,492	2,009
Restructuring charges	549	1,309
Net (gain) loss on sales and disposals of assets	(297)	295
Total operating costs and expenses	175,184	182,713
Operating income (loss)	(4,634)	(1,113)
Interest income	(6)	(3)
Interest Expense	101	212
Change in value of NEC TOKIN options	0	0
Other (income) expense, net	2,460	(2,201)
Income (Loss) from Subsidiaries, before Tax	0	0
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	(2,269)	(3,523)
Income Tax Expense (Benefit)	1,762	239
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	(4,031)	(3,762)
Income (Loss) from Equity Method Investments	0	0
Net Income (Loss) Attributable to Parent	(4,031)	(3,762)
Reclassifications and Eliminations
Revenues [Abstract]
Net sales	(199,128)	(215,780)
Operating costs and expenses:
Cost of sales	(186,198)	(200,045)
Selling, general and administrative expenses	(12,930)	(15,735)
Research and development	0	0
Restructuring charges	0	0
Net (gain) loss on sales and disposals of assets	0	0
Total operating costs and expenses	(199,128)	(215,780)
Operating income (loss)	0	0
Interest income	0	0
Interest Expense	0	0
Change in value of NEC TOKIN options	0
Other (income) expense, net	0	0
Income (Loss) from Subsidiaries, before Tax	1,645	26,793
Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN	1,645	26,793
Income Tax Expense (Benefit)	0	0
Income (loss) from continuing operations before equity income (loss) from NEC TOKIN	1,645	26,793
Income (Loss) from Equity Method Investments	0	0
Net Income (Loss) Attributable to Parent	$ 1,645	$ 26,793

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Condensed Consolidating Financial Statements Comprehensive Income(Details 3) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Condensed Consolidated Statements of Comprehensive Income (Loss)
Comprehensive income (loss)	$ (24,719)	$ (34,937)
Parent
Condensed Consolidated Statements of Comprehensive Income (Loss)
Comprehensive income (loss)	(13,883)	(34,501)
Guarantor Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
Comprehensive income (loss)	(3,687)	(27,935)
Non-Guarantor Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
Comprehensive income (loss)	(8,794)	706
Reclassifications and Eliminations
Condensed Consolidated Statements of Comprehensive Income (Loss)
Comprehensive income (loss)	$ 1,645	$ 26,793

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Condensed Consolidating Financial Statements Cash Flow (Details 4) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating Activities:
Net cash provided by (used in) operating activities	$ (3,036)	$ (21,524)
Investing activities:
Capital expenditures	(6,167)	(5,773)
Payments to Acquire Businesses, Net of Cash Acquired	0	(2,892)
Proceeds from sale of assets	0
Net cash provided by (used in) investing activities	(6,167)	(8,665)
Financing activities:
Proceeds from revolving line of credit	0	8,000
Payments of revolving line of credit	0	(2,500)
Payments on long-term debt	(1,870)	(481)
Payments for Repurchase of Common Stock	(595)	(544)
Net cash provided by (used in) financing activities	(2,465)	4,475
Net increase (decrease) in cash and cash equivalents	(11,668)	(25,714)
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of foreign currency fluctuations on cash	(398)	411
Cash and cash equivalents at beginning of fiscal period	65,004	56,362
Cash and cash equivalents at end of fiscal period	52,938	31,059
Parent
Operating Activities:
Net cash provided by (used in) operating activities	2,465	544
Investing activities:
Capital expenditures	0	0
Payments to Acquire Businesses, Net of Cash Acquired	0	0
Proceeds from sale of assets	0
Net cash provided by (used in) investing activities	0	0
Financing activities:
Proceeds from revolving line of credit	0	0
Payments of revolving line of credit	0	0
Payments on long-term debt	(1,870)	0
Payments for Repurchase of Common Stock	(595)	(544)
Net cash provided by (used in) financing activities	(2,465)	(544)
Net increase (decrease) in cash and cash equivalents	0	0
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of foreign currency fluctuations on cash	0	0
Cash and cash equivalents at beginning of fiscal period	640	640
Cash and cash equivalents at end of fiscal period	640	640
Guarantor Subsidiaries
Operating Activities:
Net cash provided by (used in) operating activities	(13,651)	(17,034)
Investing activities:
Capital expenditures	15	(3,912)
Payments to Acquire Businesses, Net of Cash Acquired	0	(2,892)
Proceeds from sale of assets	0
Net cash provided by (used in) investing activities	15	(6,804)
Financing activities:
Proceeds from revolving line of credit	0	6,000
Payments of revolving line of credit	0	(2,500)
Payments on long-term debt	0	0
Payments for Repurchase of Common Stock	0	0
Net cash provided by (used in) financing activities	0	3,500
Net increase (decrease) in cash and cash equivalents	(13,636)	(20,338)
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of foreign currency fluctuations on cash	0	0
Cash and cash equivalents at beginning of fiscal period	36,209	33,094
Cash and cash equivalents at end of fiscal period	22,573	12,756
Non-Guarantor Subsidiaries
Operating Activities:
Net cash provided by (used in) operating activities	8,150	(5,034)
Investing activities:
Capital expenditures	(6,182)	(1,861)
Payments to Acquire Businesses, Net of Cash Acquired	0	0
Proceeds from sale of assets	0
Net cash provided by (used in) investing activities	(6,182)	(1,861)
Financing activities:
Proceeds from revolving line of credit	0	2,000
Payments of revolving line of credit	0	0
Payments on long-term debt	0	(481)
Payments for Repurchase of Common Stock	0	0
Net cash provided by (used in) financing activities	0	1,519
Net increase (decrease) in cash and cash equivalents	1,968	(5,376)
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of foreign currency fluctuations on cash	(398)	411
Cash and cash equivalents at beginning of fiscal period	28,155	22,628
Cash and cash equivalents at end of fiscal period	29,725	17,663
Reclassifications and Eliminations
Operating Activities:
Net cash provided by (used in) operating activities	0	0
Investing activities:
Capital expenditures	0	0
Payments to Acquire Businesses, Net of Cash Acquired	0	0
Proceeds from sale of assets	0
Net cash provided by (used in) investing activities	0	0
Financing activities:
Proceeds from revolving line of credit	0	0
Payments of revolving line of credit	0	0
Payments on long-term debt	0	0
Payments for Repurchase of Common Stock	0	0
Net cash provided by (used in) financing activities	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of foreign currency fluctuations on cash	0	0
Cash and cash equivalents at beginning of fiscal period	0	0
Cash and cash equivalents at end of fiscal period	$ 0	$ 0