Segment and Geographic Information

6 Months Ended

Sep. 30, 2013

Segment and Geographic Information

Segment and Geographic Information

Note 6. Segment and Geographic Information

In the first quarter of fiscal year 2014, the Company reorganized its business by combining its Tantalum Business Group and Ceramic Business Group into one business group, Solid Capacitors Business Group (“Solid Capacitors”).  Following the reorganization, based on information regularly reviewed by the chief operating decision maker, KEMET’s two business groups are comprised of the Film and Electrolytic Business Group (“Film and Electrolytic”) and the Solid Capacitors.  These business groups are responsible for their respective manufacturing sites as well as related research and development efforts.

Consistent with management reporting, the Company does not allocate indirect Selling, general and administrative (“SG&A”) and Research and development (“R&D”) expenses to the business groups.  Prior period information has been reclassified to conform to current year presentation.

Solid Capacitors

Operating in ten manufacturing sites in the United States, Mexico, China and Portugal, 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

Film and Electrolytic operates fifteen manufacturing sites throughout Europe, Asia, and the United States and 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 and operates a machinery division located in Italy that provides automation solutions for the manufacture, processing and assembly of metalized films, film/foil and electrolytic capacitors; and designs, assembles and installs automation solutions for the production of energy storage devices. 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 and six month periods ended September 30, 2013 and 2012 (amounts in thousands):

	Quarters Ended September 30,						Six Month Periods Ended September 30,
	2013			2012			2013			2012
Net sales:
Solid Capacitors	$	157,714		$	162,424		$	307,115		$	323,168
Film and Electrolytic	55,026			53,567			108,348			116,455
	$	212,740		$	215,991		$	415,463		$	439,623
Operating income (loss)(1):
Solid Capacitors	$	25,386		$	23,098		$	38,194		$	48,768
Film and Electrolytic (2)	(3,487		)	(12,743		)	(11,530		)	(18,764		)
Unallocated operating expenses	(21,590		)	(24,375		)	(46,313		)	(48,069		)
	$	309		$	(14,020	)	$	(19,649	)	$	(18,065	)
Depreciation and amortization expenses:
Solid Capacitors	$	7,301		$	7,336		$	14,611		$	14,527
Film and Electrolytic	3,282			3,097			7,789			6,546
Unallocated operating expenses	1,466			1,088			3,380			2,104
	$	12,049		$	11,521		$	25,780		$	23,177

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

	Quarters Ended September 30,				Six Month Periods Ended September 30,
	2013		2012		2013		2012
Restructuring charges:
Solid Capacitors	$	99	$	3,217	3,144		3,210
Film and Electrolytic	1,063		5,305		2,473		6,576
Corporate	203		—		358		—
	$	1,365	$	8,522	$	5,975	$	9,786

(2) Film and Electrolytic incurred the following operating expenses (benefits): Goodwill impairment of $1.1 million, Write down of long-lived assets of $4.2 million and a Settlement gain on benefit plan of $(1.7) million in the quarter and six month period ended September 30, 2012.

	Quarters Ended September 30,				Six Month Periods Ended September 30,
	2013		2012		2013		2012
Sales by region:
North and South America (“Americas”)	$	67,798	$	62,243	$	127,368	$	122,728
Europe, Middle East, Africa (“EMEA”)	69,470		70,673		142,511		150,058
Asia and Pacific Rim (“APAC”)	75,472		83,075		145,584		166,837
	$	212,740	$	215,991	$	415,463	$	439,623

The following table reflects each business group’s total assets as of September 30, 2013 and March 31, 2013 (amounts in thousands):

	September 30, 2013		March 31, 2013
Total assets:
Solid Capacitors	$	502,624	$	517,024
Film and Electrolytic	302,105		308,751
Corporate	75,482		85,816
	$	880,211	$	911,591