KEMET Reports Third Quarter Results of Fiscal Year 2009
Quarter Highlights:
- Net sales declined 16.6% versus same quarter last fiscal year
- Gross Margin increased approximately 1% over prior quarter September 2008
- Non-GAAP net loss per share of $(.06) compared to $(.04) for prior quarter September 2008
- GAAP net loss per share of $(0.14) compared to $(1.03) for prior quarter September 2008
- SG&A expenses declined $3.2 million compared to September 2008 quarter and $7.6 million versus June 2008 quarter
Greenville, South Carolina (January 28, 2009) - KEMET Corporation (Other OTC: KEME) today reported preliminary results for the third quarter ended December 31, 2008. Net sales for the quarter ended December 31, 2008, were $190.7 million, which is a 16.6% decrease over the same quarter last year. Net sales for the nine month period ended December 31, 2008 were $668.3 million which is a 9.8% increase compared to the same period last year, inclusive of acquisitions. Sales declined approximately 13 percent compared to the prior quarter ended September 2008 excluding the impact of exchange rates and the sale of the Company’s wet tantalum assets.
The Non-GAAP net loss, excluding special charges, was $(4.9) million or $(0.06) per share for the current quarter compared to net loss of $(1.6) million, or $(0.02) per share for the same quarter last year and compares to a net loss of $(3.6) million, or $(0.04) per share for the prior quarter ended September 2008. On a U.S. GAAP basis net loss was $(11.1) million, or $(0.14) per share for the third fiscal quarter compared to a net loss of $(8.2) million or $(0.10) per share for the same quarter last year.
The current quarter includes a $4.6 million restructuring charge primarily related to a global headcount reduction plan, $0.6 million in integration expenses related to recent acquisitions, and a $1.1 million loss on sales and disposals of certain assets.
"Although the world-wide recession continues to put pressure on our business the actions that we took last year minimized the impact to our operating income this quarter. Since last August we have taken over fifty million dollars of annual expense out of the business and that is clearly reflected in our financial results this quarter as sales decreased forty-four million, but our operating income was only impacted by nine-hundred thousand dollars versus the September quarter," stated Per Loof, KEMET's Chief Executive Officer. "Our cash balance remains stable and we remain focused on keeping our working capital in line with market demands to maximize cash to position KEMET for a strong rebound when normal economic activities resume," 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 and sales or disposals of certain asset groups. Management believes that this Non-GAAP disclosure is useful to investors in that it provides an alternative way to possibly better understand the underlying operating performance. 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 Financial Industry Regulatory Authority’s over-the-counter bulletin board and on the Pink Sheets Inc.’s 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 April 1, 2009, we will observe a quiet period during which the information provided in this news release and our quarterly report on Form 10-Q 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) generally adverse economic and industry conditions, including a decline in demand for the Company’s products; (ii) the ability to maintain sufficient liquidity to realize current operating plans; (iii) adverse economic conditions could cause further reevaluation of the fair value of our reporting segments and the write down of long-lived assets; (iv) the cost and availability of raw materials; (v) changes in the competitive environment of the Company; (vi) economic, political, or regulatory changes in the countries in which the Company operates; (vii) the ability to successfully integrate the operations of acquired businesses; (viii) the ability to attract, train and retain effective employees and management; (ix) the ability to develop innovative products to maintain customer relationships; (x) the impact of environmental issues, laws, and regulations; (xi) the Company’s ability to achieve the expected benefits of its manufacturing relocation plan or other restructuring plan; and (xii) 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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