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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): October 15, 2003
KEMET Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-20289 57-0923789
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(State or other (Commission File Number) (IRS Employer
jurisdiction) Identification No.)
2835 KEMET Way, Simpsonville, SC 29681
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(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (864) 963-6300
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Greenville, South Carolina (October 7, 2003) KEMET Corporation (NYSE:KEM)
today announced that sales for the September 2003 quarter were approximately
$100 million. Unit shipments in the quarter were approximately 250% higher
than the low point in the industry cycle in the September 2001 quarter, and
capacity utilization rose to approximately 65%. September quarter shipments
and orders were strong. However, significant average selling price declines
were experienced, especially in the first half of the quarter, which resulted
in lower revenue than the prior quarter.
Various parts of KEMET's announced move of production to low-cost locations
around the world have occurred in accordance with, or faster than, the
anticipated time line. As previously announced, KEMET estimates special
charges of approximately $35 million will be incurred over the period of the
reorganization related to this movement of manufacturing operations.
Approximately $12 million of this charge was recognized in the September 2003
quarter. In addition, KEMET previously estimated that there would be a special
charge of approximately $15 million reflecting the write-down of US
manufacturing facilities to their residual value, of which approximately $2
million was recognized in the September quarter.
KEMET has a supply agreement to acquire tantalum powder and tantalum wire
products through 2006 with Cabot Corporation (NYSE:CBT). In accordance with
generally accepted accounting principles, KEMET records inventory at the lower
of cost or market. The company estimated that the commitment under the long-
erm supply agreement, net of prior charges, exceeded tantalum market prices
by approximately $13 million at the end of the quarter, which KEMET recognized
as a special charge in the September 2003 quarter.
In 1999, KEMET announced its entry into the market for solid aluminum
capacitors. Since that time, KEMET has made significant technology advances
in both high-capacitance MLCCs and organic tantalum capacitors, limiting the
applications for which solid aluminum capacitors are now superior solutions.
As a result, KEMET is restructuring its solid aluminum capacitor business
line and recognized a $19 million non-cash special charge in the September
2003 quarter related to the write-down of related assets. This should result
in realized cash savings of approximately $10 million annually once the
restructuring is complete.
Additional details will be available when the company releases earnings for
the September 2003 quarter after 4:00 pm ET on Monday, October 20, 2003, and
in the subsequent conference call at 8:30 am ET Tuesday, October 21, 2003.
Until the earnings release, KEMET is in a Quiet Period.
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To access the call, participants in the United States should dial
1-800-416-8033, and participants outside the United States should dial
1-706-643-0979. Participants should reference "KEMET Corporation" and the
Conference ID #:3123653. An archived replay of the conference call will be
available through midnight on November 18, 2003, by calling 1-800-642-1687
inside the United States, and 1-706-645-9291 internationally, and referencing
the Conference
ID #.
KEMET Corporation is a global leader in passive electronic technologies to
the world's most successful electronic manufacturers and distributors. KEMET's
commonstock is listed on The New York Stock Exchange under the symbol KEM.
This release contains certain forward-looking statements within the meaning of
section 21E of the Securities Exchange Act of 1934, as amended. We intend that
these forward-looking statements be subject to the safe harbor created by that
provision. These forward-looking statements involve risks and uncertainties
and include, but are not limited to, statements regarding future events and
our plans, goals, and objectives. Our actual results may differ materially
from these statements. These risks, trends, and uncertainties, which in some
instances are beyond our control, include: risks associated with the cyclical
nature of the electronics industry, the requirement to continue to reduce the
cost of our products, the competitiveness of our industry, an increase in the
cost of our raw materials, the location of several of our plants in Mexico,
and the possible loss of key employees. Although we believe that the
assumptions underlying the forward-looking statements are reasonable, any of
the assumptions could prove to be inaccurate. Therefore, we can give no
assurance that the results contemplated in these forward-looking statements
will be realized. The inclusion of this forward-looking information should
not be regarded as a representation by our company or any person that the
future events, plans, or expectations contemplated by our company will be
achieved Furthermore, past performance in operations and share price is not
necessarily predictive of future performance.
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SIGNATURE
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.
KEMET Corporation
Dated: October 15, 2003 /S/ David E. Gable
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David E. Gable
Vice President, Chief Financial Officer
(Principal Accounting and Financial
Officer)