GREENVILLE, S.C., May 9, 2013 // -- KEMET Corporation (NYSE: KEM) (the "Company"), a leading manufacturer of tantalum, ceramic, aluminum, film, paper and electrolytic capacitors, announced today a reduction in force which will affect approximately 202 employees in 10 countries, representing 6.75% percent of the Company's salaried workforce and 2% of the global workforce. The Company said it has recorded a charge to earnings related to severance expenses of $1.8 million in the March 31, 2013 quarter financial results reported this morning as a result of this action. The Company will take an additional charge of $2.6 million in the upcoming quarter ending June 30, 2013.
The Company expects to achieve cost savings related to these actions and other cost eliminations of approximately $3.8 million per quarter beginning in the September 30, 2013 quarter and $12.3 million in its fiscal year ending March 31, 2014.
Per Loof, KEMET Corporation's Chief Executive Officer, stated, "We remain steadfast in our quest to lower our cost structure in view of the lethargic economy that has affected the volumes in our industry and the Company over the past couple of quarters. We expect to see significant leverage on these actions when the business climate returns to normal levels combined with the vertical integration of our tantalum supply chain and the expected improvement in our Film & Electrolytic business from our continuing restructuring efforts. Today's action is an early synergy benefit from our investment in NEC TOKIN, allowing us to significantly lower our breakeven threshold to within current revenue projections."
The Company's 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 world's 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.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about the Company's 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) 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.
Dean W. Dimke
Senior Director of Marketing
Communications and Investor Relations
William M. Lowe, Jr.
Executive Vice President and
Chief Financial Officer
SOURCE KEMET Corporation