KEMET Reports Fourth Quarter and Fiscal Year 2009 Results
Financial Highlights:
- Net sales for the fourth quarter were $136 million and $804.4 million for fiscal year 2009
- Fourth Quarter GAAP net income (loss) per share of $0.06 compared to $(0.14) for prior quarter ended December 31, 2008
- Fourth Quarter Non-GAAP net income (loss) per share of $(0.23) compared to $(0.06) for prior quarter ended December 31, 2008
- SG&A expenses declined $7.8 million compared to quarter ended March 31, 2008 and $5.2 million versus fiscal year 2008
- Cash balance increased $13.8 million during quarter ended March 31, 2009
Greenville, South Carolina (May 19, 2009) - KEMET Corporation (Other OTC: KEME) today reported preliminary results for the fourth quarter ended March 31, 2009. Net sales for the quarter ended March 31, 2009, were $136.0 million, which is a 43.6% decrease over the same quarter last year and a 28.7% decrease over the prior quarter ended December 31, 2008. Net sales for fiscal year 2009, which includes a full year of operating results for the acquisition in October 2007 of Arcotronics Italia S.p.A., were $804.4 million which is a 5.4% decrease compared to the prior fiscal year ended March 31, 2008.
On a U.S. GAAP basis net income was $4.5 million, or $0.06 per share for the fourth fiscal quarter compared to a net loss of $20.5 million or $(0.24) per share for the same quarter last year and compares to a net loss of $11.1 million or $(0.14) per share for the prior quarter ended December 31, 2008. The Non-GAAP net loss, excluding special charges, was $18.5 million or $(0.23) per share for the current quarter compared to net loss of $2.3 million, or $(0.03) per share for the same quarter last year and compares to a net loss of $4.9 million, or $(0.06) per share for the prior quarter ended December 31, 2008.
The current quarter includes a net $28.6 million gain related primarily to the curtailment of a post-retirement benefit plan, $2.5 million of impairment charges related to long-lived assets, $1.8 million of restructuring charges and acquisition related integration expenses and $1.3 million of non-recurring interest amortization charges.
“Our industry and our business continue to be affected by the worldwide recession. Inventory management was a key focus for us during this last quarter and proved to be a success as we increased our unrestricted cash for the quarter by $13.8 million over last quarter even as our sales declined almost 29% from the prior quarter ended December 31, 2008.” stated Per Loof, KEMET's Chief Executive Officer. “We may have hit the bottom in some markets and regions this past quarter, but we expect further decline in some markets through this current quarter. I am pleased by the actions we have taken recently that have strengthened our balance sheet and we continue to pursue that objective. Continued pressure on our operating cash will remain a challenge for us as we maneuver through the balance of the calendar year,” continued Loof.
Management believes that investors may find it useful to review the Company’s financial results that exclude special items as determined by management. These special items include impairment charges associated with goodwill and long-lived assets, integration costs incurred as a result of recent business acquisitions, restructuring charges related primarily to employee severance and equipment moves, losses incurred due to the early retirement of debt, benefit plan curtailments, non-recurring interest amortization charges, certain inventory adjustments, other non-cash acquisition related expenses, and sales or disposals of certain asset groups. Management believes that this Non-GAAP disclosure is useful to investors in that it provides a supplemental way to possibly better understand the underlying operating performance of the Company. Management uses Non-GAAP financial reporting to evaluate operating performance; however Non-GAAP financial performance should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP.
The following table provides reconciliation from GAAP net income (loss) to Non-GAAP net income (loss):
KEMET's common stock is listed on the OTC Bulletin Board and on the Pink OTC Markets, Inc., Pink Quote System under the symbol KEME. 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.
QUIET PERIOD
Beginning July 1, 2009, 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 security laws about KEMET Corporation (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 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) the Company’s ability to consummate the tender offer for its 2.25% Convertible Senior Notes due 2026 and accomplish its financing plan described in the Offer to Purchase dated May 5, 2009; (ii) generally adverse economic and industry conditions, including a decline in demand for the Company’s products; (iii) the ability to maintain sufficient liquidity to realize current operating plans; (iv) adverse economic conditions could cause further reevaluation of the fair value of our reporting segments and the write down of long-lived assets; (v) the cost and availability of raw materials; (vi) changes in the competitive environment of the Company; (vii) economic, political, or regulatory changes in the countries in which the Company operates; (viii) the ability to successfully integrate the operations of acquired businesses; (ix) the ability to attract, train and retain effective employees and management; (x) the ability to develop innovative products to maintain customer relationships; (xi) the impact of environmental issues, laws, and regulations; (xii) the Company’s ability to achieve the expected benefits of its manufacturing relocation plan or other restructuring plan; and (xiii) volatility of financial and credit markets which would affect access to capital for the Company. Other risks and uncertainties may be described from time to time in the Company’s other reports and filings with the Securities and Exchange Commission.
 | Contact: | William M. Lowe, Jr.
Executive Vice President and
Chief Financial Officer
billlowe@KEMET.com
864-963-6484 | Dean W. Dimke
Director of Corporate and
Investor Communication
deandimke@kemet.com
954-766-2806 |
|
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