UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 9, 2013
KEMET Corporation
(Exact name of registrant as specified in its charter)
Delaware |
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001-15491 |
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57-0923789 |
(State of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
2835 KEMET Way, Simpsonville, SC |
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29681 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (864) 963-6300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On May 9, 2013, KEMET Corporation (the Company) issued a News Release announcing the preliminary financial information for the fourth fiscal quarter and fiscal year ended March 31, 2013.
A copy of this News Release is furnished as Exhibit 99.1 to this Form 8-K.
Item 7.01 Regulation FD Disclosure
On May 9, 2013, the Company will host a conference call to discuss financial results for its fourth fiscal quarter and fiscal year ended March 31, 2013. The slide package prepared for use by executive management for this presentation is attached hereto as Exhibit 99.2. All of the information in the presentation is presented as of May 9, 2013, and the Company does not assume any obligation to update such information in the future.
The information included in this Form 8-K, as well as the exhibits referenced herein, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits
(a.) Not Applicable
(b.) Not Applicable
(c.) Not Applicable
(d.) Exhibits
Exhibit No. |
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Description of Exhibit |
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99.1 |
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News Release, dated May 9, 2013 issued by the Company. |
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99.2 |
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Slide Package prepared for use in connection with the Companys fourth fiscal quarter and fiscal year earnings conference call to be held on May 9, 2013. |
Signature
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: May 9, 2013 |
KEMET Corporation | |
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/s/ WILLIAM M. LOWE, JR. |
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William M. Lowe, Jr. |
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Executive Vice President and |
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Chief Financial Officer |
Exhibit 99.1
News Release |
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FOR IMMEDIATE RELEASE
Contact: |
William M. Lowe, Jr. |
Dean W. Dimke |
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Executive Vice President and |
Director of Corporate and |
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Chief Financial Officer |
Investor Communications |
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williamlowe@kemet.com |
deandimke@kemet.com |
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864-963-6484 |
954-766-2800 |
KEMET REPORTS PRELIMINARY FINANCIAL INFORMATION FOR THE FOURTH QUARTER AND FISCAL YEAR 2013
Greenville, South Carolina (May 9, 2013) - KEMET Corporation (KEMET or the Company) (NYSE: KEM) today reported preliminary results for the fourth fiscal quarter and fiscal year ended March 31, 2013, before our anticipated loss from our 34% equity interest related to NEC TOKIN. Net sales for the fiscal year ended March 31, 2013 were $843.0 million which is a 14.4% decrease over the same period last fiscal year.
On a U.S. GAAP basis, for the fiscal year ended March 31, 2013, net loss before our equity loss from NEC TOKIN was $80.9 million, or $(1.80) per basic and diluted share compared to net income of $6.7 million or $0.13 per diluted share for fiscal year ended March 31, 2012. Fiscal years 2013 and 2012 include various items affecting comparability as denoted in the U.S. GAAP to Non-U.S. GAAP reconciliation below.
Non-GAAP adjusted net loss before our anticipated loss from NEC TOKIN for the fiscal year ended March 31, 2013 was $27.0 million, or $(0.60) per basic and diluted share compared to adjusted net income of $54.5 million or $1.04 per diluted share for the fiscal year ended March 31, 2012. Adjusted EBITDA for the fiscal years ended March 31, 2013 and 2012 was $59.8 million and $128.4, respectively.
On February 1, 2013 the Companys wholly owned subsidiary, KEMET Electronics Corporation completed the acquisition of 34% economic interest (51% voting common stock interest) in NEC TOKIN Corporation. The ownership interest in NEC TOKIN is treated as an equity method investment and as such the Company will report the 34% interest in the profit or loss of NEC TOKIN. The net loss from NEC TOKIN for the two month period ended March 31, 2013 is not yet available.
Net sales for the quarter ended March 31, 2013 were $203.0 million which is a 3.6% decrease over the same quarter last fiscal year. On a U.S. GAAP basis, for the fourth fiscal quarter of fiscal year 2013, net loss before equity loss from NEC TOKIN was $24.0 million, or $(0.53) per basic and diluted share compared to net loss of $11.7 million or $(0.26) per basic and diluted share for the same quarter last year. The fourth quarters of fiscal years 2013, and 2012 includes various items affecting comparability as denoted in the U.S. GAAP to Non-U.S. GAAP reconciliation below.
Non-GAAP adjusted net loss, before our anticipated loss from NEC TOKIN, was $9.8 million or $(0.22) per basic and diluted share for the fourth quarter of fiscal year 2013 compared to $7.0 million of adjusted net loss or $(0.16) per diluted share for the same quarter last year. Adjusted EBITDA for the quarter ended March 31, 2013 was $11.4 million as compared to $9.7 million for the quarter ended March 31, 2012.
Per Loof, KEMETs Chief Executive Officer, stated, Revenue remained more or less flat to our prior quarter as forecasted and seems to have leveled off at this level for at least one more quarter. The team remains focused on delivering improved financial results even as the industry remains trapped by an economy that is moving sideways. We expect to see benefits during our next fiscal year from our relationship with NEC TOKIN primarily related to our recently signed PLP and cross-licensing agreements. We are optimistic that we can build significant shareholder value from our recent equity investment.
About KEMET
The Companys common stock is listed on the NYSE under the ticker symbol KEM (NYSE: KEM). At the Investor Relations section of our web site at http://www.kemet.com/IR, users may subscribe to KEMET news releases and find additional information about our Company. KEMET applies world class service and quality to deliver industry leading, high performance capacitance solutions to its customers around the world and offers the worlds most complete line of surface mount and through hole capacitor technologies across tantalum, ceramic, film, aluminum, electrolytic, and paper dielectrics. Additional information about KEMET can be found at http://www.kemet.com.
QUIET PERIOD
Beginning July 1, 2013, we will observe a quiet period during which the information provided in this news release and our annual report on Form 10-K will no longer constitute our current expectations. During the quiet period, this information should be considered to be historical, applying prior to the quiet period only and not subject to update by management. The quiet period will extend until the day when our next quarterly earnings release is published.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about KEMET Corporations (the Company) financial condition and results of operations that are based on managements current expectations, estimates and projections about the markets, in which the Company operates, as well as managements beliefs and assumptions. Words such as expects, anticipates, believes, estimates, variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect managements judgment only as of the date hereof. The Company undertakes no obligation to update publicly any of these forward-looking statements to reflect new information, future events or otherwise.
Factors that may cause actual outcome and results to differ materially from those expressed in, or implied by, these forward-looking statements include, but are not necessarily limited to the following:
(i) adverse economic conditions could impact our ability to realize operating plans if the demand for our products declines, and such conditions could adversely affect our liquidity and ability to continue to operate; (ii) adverse economic conditions could cause the write down of long-lived assets or goodwill; (iii) an increase in the cost or a decrease in the availability of our principal or single-sourced purchased materials; (iv) changes in the competitive environment; (v) uncertainty of the timing of customer product qualifications in heavily regulated industries; (vi) economic, political, or regulatory changes in the countries in which we operate; (vii) difficulties, delays or unexpected costs in completing the restructuring plan; (viii) equity method investments expose us to a variety of risks; (ix) acquisitions and other strategic transactions expose us to a variety of risks; (x) the inability to attract, train and retain effective employees and management; (xi) the inability to develop innovative products to maintain customer relationships and offset potential price erosion in older products; (xii) exposure to claims alleging product defects; (xiii) the impact of laws and regulations that apply to our business, including those relating to environmental matters; (xiv) the impact of international laws relating to trade, export controls and foreign corrupt practices; (xv) volatility of financial and credit markets affecting our access to capital; (xvi) the need to reduce the total costs of our products to remain competitive; (xvii) potential limitation on the use of net operating losses to offset possible future taxable income; (xviii) restrictions in our debt agreements that limit our flexibility in operating our business; and (xix) additional exercise of the warrant by K Equity, LLC which could potentially result in the existence of a significant stockholder who could seek to influence our corporate decisions.
KEMET CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations - Highlights
(Amounts in thousands, except per share data)
(Unaudited)
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Quarters Ended |
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Fiscal Years Ended |
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March 31, 2013 |
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March 31, 2012 |
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March 31, 2013 |
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March 31, 2012 |
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Net sales |
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$ |
203,034 |
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$ |
210,668 |
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$ |
842,954 |
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$ |
984,833 |
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Cost of sales |
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175,867 |
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183,542 |
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716,358 |
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775,670 |
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Operating income (loss) |
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(15,927 |
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(9,992 |
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(39,282 |
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37,801 |
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Income (loss) before income taxes and equity loss from NEC TOKIN |
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(24,652 |
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(15,849 |
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(77,610 |
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8,444 |
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Income tax expense (benefit) |
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(655 |
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(4,145 |
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3,318 |
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1,752 |
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Income (loss) before equity loss from NEC TOKIN |
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$ |
(23,997 |
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$ |
(11,704 |
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$ |
(80,928 |
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$ |
6,692 |
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Net income (loss) per share before equity loss from NEC TOKIN (basic) |
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$ |
(0.53 |
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$ |
(0.26 |
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$ |
(1.80 |
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$ |
0.15 |
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Net income (loss) per share before equity loss from NEC TOKIN (diluted) |
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$ |
(0.53 |
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$ |
(0.26 |
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$ |
(1.80 |
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$ |
0.13 |
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Weighted-average shares outstanding: |
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Basic |
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44,953 |
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44,662 |
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44,897 |
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43,285 |
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Diluted |
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44,953 |
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44,662 |
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44,897 |
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52,320 |
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KEMET CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets - Highlights
(Amounts in thousands, except per share data)
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March 31, |
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2013 |
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2012 |
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Cash and cash equivalents |
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$ |
95,978 |
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$ |
210,521 |
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Accounts receivable, net |
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96,564 |
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104,950 |
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Inventories, net |
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205,615 |
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212,234 |
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Accounts payable |
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73,669 |
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74,404 |
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Short-term debt |
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10,793 |
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1,951 |
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Long-term debt |
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369,990 |
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341,841 |
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Debt premium |
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2,717 |
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3,539 |
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Total debt |
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383,500 |
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347,331 |
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Total stockholders equity |
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276,760 |
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358,996 |
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KEMET CORPORATION AND SUBSIDIARIES
Consolidated Cash Flows - Highlights
(Amounts in thousands)
(Unaudited)
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Fiscal Years Ended March 31, |
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2013 |
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2012 |
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2011 |
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Net cash (used in) provided by operating activities |
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$ |
(24,312 |
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$ |
80,730 |
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$ |
113,968 |
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Capital expenditures |
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(46,174 |
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(49,314 |
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(34,989 |
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Investment in NEC TOKIN |
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(50,917 |
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Change in restricted cash |
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(15,284 |
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Proceeds from issuance of debt |
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39,825 |
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116,050 |
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227,525 |
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Deferred acquisition payments |
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(16,900 |
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Net (decrease) increase in cash and cash equivalents |
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(113,952 |
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59,169 |
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71,066 |
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Non-U.S. GAAP Financial Measures
In this news release, the Company makes reference to certain Non-U.S. GAAP financial measures, including Adjusted net income (loss) before equity loss from NEC TOKIN, Adjusted net income (loss) before equity loss from NEC TOKIN per share and Adjusted EBITDA. Management believes that investors may find it useful to review the Companys financial results as adjusted to exclude items as determined by management.
Adjusted Net Income (Loss) Before Equity Loss From NEC TOKIN and Adjusted Net Income (Loss) Before Equity Loss From NEC TOKIN Per Share
Adjusted net income (loss) before equity loss from NEC TOKIN and Adjusted net income (loss) before equity loss from NEC TOKIN per share represent net income (loss) before equity loss from NEC TOKIN and net income (loss) before equity loss from NEC TOKIN per share excluding write down of long-lived assets, restructuring charges related primarily to equipment moves and employee severance, plant start-up costs, amortization related to debt issuance costs and debt discount, net gain/loss on sales and disposals of assets, ERP integration costs, stock-based compensation expense, net foreign exchange gain/loss, inventory write-downs, registration related fees, acquisition related fees, gain on licensing of patents, loss on early extinguishment of debt, income tax expense related to foreign tax law changes which limit the utilization of net operating losses, curtailment and settlement gain on benefit plans, goodwill impairment and income tax effect on non-GAAP adjustments. Management believes that these Non-U.S. GAAP financial measures are useful to investors because they provide a supplemental way to understand the underlying operating performance of the Company. Management uses these Non-U.S. GAAP financial measures to evaluate operating performance. Non-U.S. GAAP financial measures should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with U.S. GAAP.
The following table provides reconciliation from U.S. GAAP net income (loss) before equity loss from NEC TOKIN to Non-U.S. GAAP adjusted net income (loss) before equity loss from NEC TOKIN:
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GAAP to Non-GAAP Reconciliation |
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(Unaudited) |
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Quarters Ended |
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Fiscal Years Ended |
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March 31, 2013 |
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December 31, 2012 |
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March 31, 2012 |
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March 31, 2013 |
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March 31, 2012 |
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(Amounts in thousands, except per share data) |
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Including adjustments (GAAP) |
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Net sales |
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$ |
203,034 |
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$ |
200,297 |
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$ |
210,668 |
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$ |
842,954 |
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$ |
984,833 |
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Net income (loss) before equity loss from NEC TOKIN |
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$ |
(23,997 |
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$ |
(14,257 |
) |
$ |
(11,704 |
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$ |
(80,928 |
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$ |
6,692 |
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Net income (loss) before equity loss from NEC TOKIN per share (basic) |
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$ |
(0.53 |
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$ |
(0.32 |
) |
$ |
(0.26 |
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$ |
(1.80 |
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$ |
0.15 |
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Net income (loss) before equity loss from NEC TOKIN per share (diluted) |
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$ |
(0.53 |
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$ |
(0.32 |
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$ |
(0.26 |
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$ |
(1.80 |
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$ |
0.13 |
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Excluding the following items (Non-GAAP) |
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Net income (loss) before equity loss from NEC TOKIN |
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$ |
(23,997 |
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$ |
(14,257 |
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$ |
(11,704 |
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$ |
(80,928 |
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$ |
6,692 |
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Adjustments: |
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Restructuring charges |
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5,047 |
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3,886 |
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876 |
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18,719 |
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14,254 |
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Acquisition related fees |
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3,009 |
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164 |
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866 |
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4,581 |
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1,476 |
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ERP integration costs |
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2,469 |
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1,458 |
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2,772 |
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7,702 |
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7,707 |
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Net curtailment and settlement gain on benfit plans |
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1,354 |
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587 |
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266 |
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Plant start-up costs |
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1,307 |
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1,524 |
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2,190 |
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6,122 |
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3,574 |
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Stock-based compensation expense |
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1,015 |
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1,078 |
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1,697 |
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4,599 |
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3,075 |
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Amortization included in interest expense |
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1,092 |
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1,122 |
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696 |
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4,138 |
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3,599 |
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Net foreign exchange (gain) loss |
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(911 |
) |
(464 |
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(652 |
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(28 |
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919 |
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Write down of long lived assets |
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264 |
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3,084 |
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7,582 |
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15,786 |
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Loss (gain) on sales and disposals of assets |
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141 |
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(196 |
) |
226 |
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18 |
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318 |
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Registration related fees |
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20 |
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281 |
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Goodwill impairment |
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1,092 |
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Income tax effect of non-GAAP adjustments (1) |
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(591 |
) |
(228 |
) |
(3,991 |
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(906 |
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(3,203 |
) | |||||
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Adjusted net income (loss) before equity loss from NEC TOKIN (excluding adjustments) |
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$ |
(9,801 |
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$ |
(2,242 |
) |
$ |
(7,024 |
) |
$ |
(27,023 |
) |
$ |
54,478 |
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Adjusted net income (loss) before equity loss from NEC TOKIN per basic share (excluding adjustments) |
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$ |
(0.22 |
) |
$ |
(0.05 |
) |
$ |
(0.16 |
) |
$ |
(0.60 |
) |
$ |
1.26 |
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Adjusted net income (loss) before equity loss from NEC TOKIN per diluted share (excluding adjustments) |
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$ |
(0.22 |
) |
$ |
(0.05 |
) |
$ |
(0.16 |
) |
$ |
(0.60 |
) |
$ |
1.04 |
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(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, and includes the income tax affect of law changes related to the utilization of net operating loss carryforwards.
Adjusted EBITDA
Adjusted EBITDA represents net income (loss) before equity loss from NEC TOKIN, income tax expense (benefit), net interest expense, and depreciation and amortization expense, adjusted to exclude: restructuring charges, write down of long-lived assets, ERP integration costs, plant start-up costs, stock-based compensation expense, goodwill impairment, acquisition related fees, net curtailment and settlement gain/loss on benefit plans, net foreign exchange gain/loss, net loss on sales and disposals of assets and registration related fees. We use Adjusted EBITDA to monitor and evaluate our operating performance and to facilitate internal and external comparisons of the historical operating performance of our business. We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We also present Adjusted EBITDA because we believe such measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
We believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. The other items excluded from Adjusted EBITDA are excluded in order to better reflect our continuing operations.
In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments noted below. 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 you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:
· it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
· it does not reflect changes in, or cash requirements for, our working capital needs;
· it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
· although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and our Adjusted EBITDA 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 only supplementally.
The following tables provide a reconciliation from U.S. GAAP net income (loss) before equity loss from NEC TOKIN to Adjusted EBITDA (amounts in thousands):
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Fiscal Year 2013 |
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Q1 |
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Q2 |
|
Q3 |
|
Q4 |
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Total |
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Net loss before equity loss from NEC TOKIN |
|
$ |
(17,753 |
) |
$ |
(24,921 |
) |
$ |
(14,257 |
) |
$ |
(23,997 |
) |
$ |
(80,928 |
) |
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|
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|
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Adjustments: |
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|
|
|
|
|
|
|
|
|
| |||||
Income tax expense (benefit) |
|
1,771 |
|
1,787 |
|
415 |
|
(655 |
) |
3,318 |
| |||||
Interest expense, net |
|
10,426 |
|
10,110 |
|
10,193 |
|
10,463 |
|
41,192 |
| |||||
Depreciation and amortization expense |
|
11,656 |
|
11,521 |
|
10,502 |
|
11,880 |
|
45,559 |
| |||||
Restructuring charges |
|
1,264 |
|
8,522 |
|
3,886 |
|
5,047 |
|
18,719 |
| |||||
Write down of long lived assets |
|
|
|
4,234 |
|
3,084 |
|
264 |
|
7,582 |
| |||||
ERP integration costs |
|
1,676 |
|
2,099 |
|
1,458 |
|
2,469 |
|
7,702 |
| |||||
Plant start-up costs |
|
1,361 |
|
1,930 |
|
1,524 |
|
1,307 |
|
6,122 |
| |||||
Acquisition related fees |
|
542 |
|
866 |
|
164 |
|
3,009 |
|
4,581 |
| |||||
Stock-based compensation expense |
|
1,264 |
|
1,242 |
|
1,078 |
|
1,015 |
|
4,599 |
| |||||
Goodwill impairment |
|
|
|
1,092 |
|
|
|
|
|
1,092 |
| |||||
Loss (gain) on sales and disposals of assets |
|
104 |
|
(31 |
) |
(196 |
) |
141 |
|
18 |
| |||||
Net curtailment and setlement gain on benefit plans |
|
|
|
(1,675 |
) |
587 |
|
1,354 |
|
266 |
| |||||
Net foreign exchange loss (gain) |
|
1,789 |
|
(442 |
) |
(464 |
) |
(911 |
) |
(28 |
) | |||||
Registration related fees |
|
20 |
|
|
|
|
|
|
|
20 |
| |||||
Adjusted EBITDA |
|
$ |
14,120 |
|
$ |
16,334 |
|
$ |
17,974 |
|
$ |
11,386 |
|
$ |
59,814 |
|
|
|
Fiscal Year 2012 |
| |||||||||||||
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Total |
| |||||
Net income (loss) |
|
$ |
31,849 |
|
$ |
14,318 |
|
$ |
(27,771 |
) |
$ |
(11,704 |
) |
$ |
6,692 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
| |||||
Income tax expense (benefit) |
|
1,731 |
|
2,047 |
|
2,119 |
|
(4,145 |
) |
1,752 |
| |||||
Interest expense, net |
|
7,357 |
|
7,251 |
|
6,974 |
|
6,810 |
|
28,392 |
| |||||
Depreciation and amortization expense |
|
11,159 |
|
11,852 |
|
10,373 |
|
10,740 |
|
44,124 |
| |||||
Restructuring charges |
|
1,025 |
|
1,605 |
|
10,748 |
|
876 |
|
14,254 |
| |||||
Write down of long lived assets |
|
|
|
|
|
15,786 |
|
|
|
15,786 |
| |||||
ERP integration costs |
|
1,205 |
|
1,918 |
|
1,812 |
|
2,772 |
|
7,707 |
| |||||
Plant start-up costs |
|
|
|
718 |
|
666 |
|
2,190 |
|
3,574 |
| |||||
Acquisition related fees |
|
610 |
|
|
|
|
|
866 |
|
1,476 |
| |||||
Stock-based compensation expense (recovery) |
|
1,191 |
|
984 |
|
(797 |
) |
1,697 |
|
3,075 |
| |||||
Loss (gain) on sales and disposals of assets |
|
123 |
|
(40 |
) |
9 |
|
226 |
|
318 |
| |||||
Net foreign exchange (gain) loss |
|
(123 |
) |
1,391 |
|
303 |
|
(652 |
) |
919 |
| |||||
Registration related fees |
|
204 |
|
77 |
|
|
|
|
|
281 |
| |||||
Adjusted EBITDA |
|
$ |
56,331 |
|
$ |
42,121 |
|
$ |
20,222 |
|
$ |
9,676 |
|
$ |
128,350 |
|
Exhibit 99.2
|
Quarter Ended March 31, 2013 Earnings Conference Call May 9, 2013 |
|
Cautionary Statement Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about KEMET Corporation's (the "Company") financial condition and results of operations that are based on management's current expectations, estimates and projections about the markets in which the Company operates, as well as management's beliefs and assumptions. Words such as "expects," "anticipates," "believes," "estimates," variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof. The Company undertakes no obligation to update publicly any of these forward-looking statements to reflect new information, future events or otherwise. Factors that may cause the actual outcome and results to differ materially from those expressed in, or implied by, these forward-looking statements include, but are not necessarily limited to the following: (i) adverse economic conditions could impact our ability to realize operating plans if the demand for our products declines, and such conditions could adversely affect our liquidity and ability to continue to operate; (ii) adverse economic conditions could cause the write down of long-lived assets or goodwill; (iii) an increase in the cost or a decrease in the availability of our principal or single-sourced purchased materials; (iv) changes in the competitive environment; (v) uncertainty of the timing of customer product qualifications in heavily regulated industries; (vi) economic, political, or regulatory changes in the countries in which we operate; (vii) difficulties, delays or unexpected costs in completing the restructuring plan; (viii) equity method investments expose us to a variety of risks; (ix) acquisitions and other strategic transactions expose us to a variety of risks; (x) inability to attract, train and retain effective employees and management; (xi) inability to develop innovative products to maintain customer relationships and offset potential price erosion in older products; (xii) exposure to claims alleging product defects; (xiii) the impact of laws and regulations that apply to our business, including those relating to environmental matters; (xiv) the impact of international laws relating to trade, export controls and foreign corrupt practices; (xv) volatility of financial and credit markets affecting our access to capital; (xvi) the need to reduce the total costs of our products to remain competitive; (xvii) potential limitation on the use of net operating losses to offset possible future taxable income; (xviii) restrictions in our debt agreements that limit our flexibility in operating our business; and (xix) additional exercise of the warrant by K Equity which could potentially result in the existence of a significant stockholder who could seek to influence our corporate decisions. 2 |
|
Income Statement Highlights U.S. GAAP 3 FY 2013 Mar-13 Dec-12 Mar-12 Net sales 842,954 $ 203,034 $ 200,297 $ 210,668 $ Gross margin 126,596 $ 27,167 $ 34,180 $ 27,126 $ Gross margin as a percentage of net sales 15.0% 13.4% 17.1% 12.9% Selling, general and administrative 110,474 $ 30,913 $ 25,411 $ 28,196 $ SG&A as a percentage of net sales 13.1% 15.2% 12.7% 13.4% Operating loss (37,519) $ (14,164) $ (5,290) $ (9,992) $ Net loss before equity loss from NEC TOKIN (80,928) $ (23,997) $ (14,257) $ (11,704) $ Loss per share before equity loss from NEC TOKIN - basic (1.80) $ (0.53) $ (0.32) $ (0.26) $ Loss per share before equity loss from NEC TOKIN - diluted (1.80) $ (0.53) $ (0.32) $ (0.26) $ Weighted avg. shares - basic 44,897 44,953 44,918 44,662 Weighted avg. shares - diluted 44,897 44,953 44,918 44,662 For the Quarters Ended (Amounts in thousands, except percentages and per share data) |
|
Sales Summary Q4 FY13 Updated 4-30-2013 |
|
Sales Summary FY13 Updated 4-30-2013 |
|
Adjusted Gross Margin Non-GAAP 6 For the Quarters Ended (Amounts in thousands, except percentages) Mar-13 Dec-12 Mar-12 Net sales 203,034 $ 200,297 $ 210,668 $ Gross margin 27,167 $ 34,180 $ 27,126 $ Adjustments: Plant Start-up costs 1,307 1,524 2,190 Stock-based compensation expense 328 359 458 Adjusted gross margin 28,802 $ 36,063 $ 29,774 $ Adjusted gross margin as a percentage of net sales 14.2% 18.0% 14.1% |
|
Adjusted Selling, General and Administrative Expenses Non-GAAP 7 For the Quarters Ended Mar-13 Dec-12 Mar-12 Net sales 203,034 $ 200,297 $ 210,668 $ Selling, general and administrative expenses (1) 30,913 $ 25,998 $ 28,196 $ Adjustments: ERP integration costs (2,469) (1,458) (2,772) Stock-based compensation expense (655) (664) (1,239) Acquisition related fees (3,009) (164) (866) Net curtailment and settlement loss on benefit plans (1) (1,354) (587) - Adjusted selling, general and administrative expenses 23,426 $ 23,125 $ 23,319 $ Adjusted selling, general and administrative as a percentage of net sales 11.5% 11.5% 11.1% (1) Amounts in December 2012 have been reclassified to conform to the current presentation. (Amounts in thousands, except percentages) |
|
Adjusted Operating Income (Loss) Non-GAAP 8 Mar-13 Dec-12 Mar-12 Operating loss (15,927) $ (5,290) $ (9,992) $ Adjustments: Restructuring charges 5,047 3,886 876 Write down of long-lived assets 264 3,084 - ERP integration costs 2,469 1,458 2,772 Plant start-up costs 1,307 1,524 2,190 Stock-based compensation expense 1,015 1,078 1,697 Acquisition related fees 3,009 164 866 Net curtailment and settlement loss on benefit plans 1,354 587 - Net loss (gain) on sales and disposals of assets 141 (196) 226 Adjusted operating income (loss) (1,321) $ 6,295 $ (1,365) $ For the Quarters Ended (Amounts in thousands) |
|
Adjusted Net Income (Loss) and Adjusted EBITDA Non-GAAP 9 For the Quarters Ended FY 2013 Mar-13 Dec-12 Mar-12 Net loss before equity loss from NEC TOKIN (80,928) $ (23,997) $ (14,257) $ (11,704) $ Adjustments: Restructuring charges 18,719 5,047 3,886 876 Write down of long-lived assets 7,582 264 3,084 - ERP integration costs 7,702 2,469 1,458 2,772 Plant start-up costs 6,122 1,307 1,524 2,190 Stock-based compensation expense 4,599 1,015 1,078 1,697 Goodwill impairment 1,092 - - - Amortization included in interest expense 4,138 1,092 1,122 696 Acquisition related fees 4,581 3,009 164 866 Net curtailment and settlement loss on benefit plans 266 1,354 587 - Net foreign exchange loss (28) (911) (464) (652) Net (gain) loss on sales and disposals of assets 18 141 (196) 226 Registration related fees 20 - - - Income tax impact of non-GAAP adjustments (906) (591) (228) (3,991) Adjusted net loss before equity loss from NEC TOKIN (27,023) $ (9,801) $ (2,242) $ (7,024) $ Adjusted EPS before equity loss from NEC TOKIN - basic (0.60) $ (0.22) $ (0.05) $ (0.16) $ Adjusted EPS before equity loss from NEC TOKIN - diluted (0.60) $ (0.22) $ (0.05) $ (0.16) $ Adjusted EBITDA 59,814 $ 11,386 $ 17,974 $ 9,676 $ Weighted avg. shares - basic 44,897 44,953 44,918 44,662 Weighted avg. shares - diluted 44,897 44,953 44,918 44,662 (Amounts in thousands, except percentages and per share data) |
|
Tantalum Adjusted Gross Margin Non-GAAP 10 (in thousands) Q4 - FY13 Q3 - FY13 Net sales 95,788 $ 98,496 $ Gross margin 13,970 17,492 Gross margin % 14.6% 17.8% Stock-based compensation expense 118 132 - - Adjusted gross margin 14,088 $ 17,624 $ Adjusted gross margin as a % of net sales 14.7% 17.9% |
|
Ceramic Adjusted Gross Margin Non-GAAP 11 (in thousands) Q4 - FY13 Q3 - FY13 Net sales 53,577 $ 51,276 $ Gross margin 17,781 18,562 Gross margin % 33.2% 36.2% Stock-based compensation expense 54 74 - - Adjusted gross margin 17,835 $ 18,636 $ Adjusted gross margin as a % of net sales 33.3% 36.3% |
|
Film & Electrolytic Adjusted Gross Margin Non-GAAP 12 (in thousands) Q4 - FY13 Q3 - FY13 Net sales 53,669 $ 50,525 $ Gross loss (4,584) (1,874) Gross margin % -8.5% -3.7% Plant start-up costs 1,307 1,524 Stock-based compensation expense 156 154 - - Adjusted gross loss (3,121) $ (196) $ Adjusted gross margin as a % of net sales -5.8% -0.4% |
|
Financial Highlights Includes only Accounts receivable, net; Inventories, net; and Accounts payable Calculated by annualizing the current quarters Net sales and Cost of sales 13 (Amounts in millions, except DSO and DPO) Mar-13 Dec-12 FX Impact Cash, cash equivalents and restricted cash 113.4 $ 163.7 $ (0.5) $ Capital expenditures 7.2 $ 8.0 $ Short-term debt 10.8 $ 7.9 $ Long-term debt 370.0 372.9 Debt premium 2.7 2.7 Total debt 383.5 $ 383.5 $ 0.1 $ Equity 278.2 $ 303.8 $ Net working capital (1) 228.5 $ 256.4 $ (2.7) $ Days in receivables (DSO)(2) 43.38 44 Days in payables (DPO)(2) 34 34 (1) (2) |
|
Adjusted EBITDA Reconciliation Non-GAAP 14 For the Quarters Ended (Amounts in thousands) Mar-13 Dec-12 Mar-12 GAAP Net loss before equity loss from NEC TOKIN (23,997) $ (14,257) $ (11,704) $ Interest expense, net 10,463 10,193 10,740 Income tax expense (benefit) (655) 415 (4,145) Depreciation and amortization 11,880 10,502 6,810 EBITDA (2,309) 6,853 1,701 Excluding the following items (Non-GAAP) Restructuring charges 5,047 3,886 876 Write down of long-lived assets 264 3,084 - ERP integration costs 2,469 1,458 2,772 Plant start-up costs 1,307 1,524 2,190 Stock-based compensation expense 1,015 1,078 1,697 Acquisition related fees 3,009 164 866 Net curtailment and settlement loss on benefit plans 1,354 587 - Net foreign exchange (gain) (911) (464) (652) Net (gain) loss on sales and disposals of assets 141 (196) 226 Adjusted EBITDA 11,386 $ 17,974 $ 9,676 $ |
|
Non-GAAP Financial Measures 15 Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors. Adjusted gross margin Adjusted gross margin represents net sales less cost of sales excluding adjustments which are outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted gross margin to facilitate our analysis and understanding of our business operations and believes that Adjusted gross margin is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company. Adjusted gross margin should not be considered as an alternative to gross margin or any other performance measure derived in accordance with GAAP. Adjusted selling, general and administrative expenses Adjusted selling, general and administrative expenses represents selling, general and administrative expenses excluding adjustments which are outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted selling, general and administrative expenses to facilitate our analysis and understanding of our business operations and believes that Adjusted selling, general and administrative expenses is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company. Adjusted selling, general and administrative expenses should not be considered as an alternative to selling, general and administrative expenses or any other performance measure derived in accordance with GAAP. Adjusted operating income Adjusted operating income represents operating income (loss), excluding adjustments which are outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted operating income to facilitate our analysis and understanding of our business operations and believes that Adjusted operating income is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company. Adjusted operating income should not be considered as an alternative to operating income or any other performance measure derived in accordance with GAAP. 15 |
|
Non-GAAP Financial Measures Continued 16 Adjusted net income (loss) and Adjusted EPS Adjusted net income and Adjusted EPS represent net income (loss) and EPS, excluding adjustments which are more specifically outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted net income and Adjusted EPS to evaluate the Company's operating performance and believes that Adjusted net income and Adjusted EPS are useful to investors because they provide a supplemental way to possibly better understand the underlying operating performance of the Company. Adjusted net income and Adjusted EPS should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP. Adjusted EBITDA Adjusted EBITDA represents net loss before income tax expense (benefit), interest expense, net, and depreciation and amortization expense, adjusted to exclude the following: restructuring charges, write down of long-lived assets, ERP integration costs, plant start-up costs, stock-based compensation expense (recovery), goodwill impairment, acquisition related fees, net curtailment and settlement gain (loss) on benefit plans, net foreign exchange (gain) loss, and net (gain) loss on sales and disposals of assets. We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We also present Adjusted EBITDA because we believe such measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. The other items excluded from Adjusted EBITDA are excluded in order to better reflect our continuing operations. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these types of adjustments. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. 16 |
|
Non-GAAP Financial Measures Continued 17 Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments; it does not reflect changes in, or cash requirements for, our working capital needs; it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and our Adjusted EBITDA measure does not reflect any cash requirements for such replacements; it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; it does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. 17 |
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