KEMET Reports Record Sales and Earnings for Fiscal 2001

Apr 23, 2001, 01:00 ET from KEMET Corporation

    GREENVILLE, S.C., April 23 /PRNewswire Interactive News Release/ --
     KEMET Corporation (NYSE:   KEM) today reported record sales and earnings for
 the fiscal year and the quarter ended March 31, 2001.  Net sales for the year
 increased 71% to $1,406.1 million, compared with $822.1 million last year.
 Net earnings for the year were $352.3 million, or $4.00 per diluted share,
 compared with $70.1 million, or $0.85 per diluted share, for last year.  Net
 sales for the March quarter increased 31% to $338.0 million, compared with
 $258.1 million for the same quarter last year.  Net earnings were $78.4
 million, or $0.90 per diluted share, up 106% from $38.1 million, or $0.44 per
 diluted share, for the same period last year.
     "KEMET has completed the most successful year in its history," stated
 David E. Maguire, Chairman and CEO.  "The electronics industry is a high-
 growth, but cyclical, industry.  The extraordinary financial results of fiscal
 2001 come at the end of a cycle that began with the Asian crisis in fiscal
 1999, which was a very challenging year.  KEMET's net income as a percentage
 of revenue averaged 15.3% over the thirty-six months from the beginning of
 fiscal 1999 through the end of fiscal 2001.  This performance validates
 KEMET's successful business model, focused on earning the preferred supplier
 position at the world's most successful electronics firms as well as the
 capabilities of our experienced management team.  KEMET ended fiscal 2001 with
 $360 million in cash, $100 million in long-term debt, and $886 million in
 shareholders' equity.  This is the strongest financial position in the
 company's history.  We anticipate using these resources to take advantage of
 significant market opportunities, including high-frequency tantalum, high-
 capacitance ceramic, and new solid aluminum capacitors.  Electronics remains a
 high-growth industry, but we are now in another correction phase of the long-
 term growth trend.  This is my tenth cycle, and the rapidity with which this
 inventory/capacity correction is occurring is unprecedented compared to
 previous cycles.  Our near-term visibility is limited because of the general
 uncertainty in the industry.  In this environment, we will focus our efforts
 on cost reduction and continued development of our new products so we again
 will be well positioned to benefit as the industry recovers.
     "On a personal note, Glenn Spears retired as Executive Vice President as
 of April 1, 2001, to spend more time with his family.  Many in the investment
 community who have worked with Glenn over the years have expressed their best
 wishes to him, and he will be missed by all of us."
     Earnings before depreciation, amortization, interest and taxes (EBDAIT)
 for the March quarter were $148.7 million, compared with $76.1 million for the
 same quarter last year.  Sales of surface-mount capacitors were $301.4 million
 for the March quarter, compared to $228.9 million for the same quarter last
 year, while sales of leaded capacitors were $36.6 million versus $29.2 million
 during the same period last year.  Export sales comprised 59% of total sales
 and increased 48% to $200.3 million, compared to $135.3 million in the same
 quarter last year.
     Net sales and net earnings for the last three fiscal years were:
 
                            Fiscal     Fiscal      Fiscal
                             1999       2000        2001
                                    (In Millions)
      Net sales            $565.6     $822.1    $1,406.1
      Net earnings           $6.2      $70.1      $352.3
 
     KEMET Corporation, headquartered in Greenville, South Carolina, is the
 largest manufacturer of solid tantalum capacitors and the fourth largest
 manufacturer of multilayer ceramic capacitors in the world.  KEMET's strategy
 is to be the preferred capacitor supplier to the world's largest, most
 successful electronics original equipment manufacturers, electronics
 manufacturing services providers, and electronics distributors.
     KEMET's common stock is listed on The New York Stock Exchange under the
 symbol KEM.  Additional Company information is available via the Internet
 (http://www.kemet.com).
 
     BUSINESS OUTLOOK
     The following statements are based on current expectations.  These
 statements are forward-looking, and actual results may differ materially.
 Current negative trends in global economic conditions make it particularly
 difficult at present to predict product demand and other related matters.
 
     ** The company's best current estimate, given the high level of economic
 uncertainty, is that revenues for the June quarter will be down approximately
 40% from March quarter revenues due to the inventory correction in the
 electronics industry.  The backlog entering the June quarter is down
 substantially from the level going into the March quarter, but the rate of
 order cancellations and push-outs has slowed considerably.  Selling prices for
 tantalum capacitors increased significantly during the March quarter, due to
 the dramatic rise in cost for tantalum material.  We expect selling prices for
 tantalum capacitors to decline industry-wide as shortages in the world supply
 of tantalum material are alleviated.  We expect that the gross margin
 percentage for fiscal 2002 will average in the range of 30% to 35%.  We
 believe profitability for the June quarter should be the low point for this
 cycle, and we are encouraged by the fact that our distributors' capacitor
 inventories began to decline during March.
     ** During fiscal 2001, KEMET entered into a 50/50 joint venture agreement
 with Australasian Gold Mines NL (AGM) to establish an independent source of
 tantalum to meet the increasing demand for tantalum capacitors from key
 customers.  This transaction closed in April 2001.  KEMET's initial investment
 in the joint venture is approximately $4.9 million, and KEMET acquired a 10
 percent interest in AGM for approximately $2.3 million.  KEMET also has the
 right to acquire all processed tantalum products from the initial production
 plant, which began operations in the March quarter, and from any future
 processing operations.  These tantalum products are expected to be toll
 converted into tantalum powder necessary for the production of capacitors.
 KEMET anticipates that current mining operations will initially provide up to
 10% to 15% of our annual tantalum requirements.
     ** For fiscal 2002, KEMET anticipates maintaining our investment in key
 customer relationships through our direct sales and customer service
 professionals, as well as our research and development to maintain our
 position at the leading edge of technology in the capacitor industry.
 
                         Fiscal   Fiscal    Fiscal   Fiscal
                          1998     1999      2000     2001
                                  (In Millions)
       SG&A              $48.8    $46.6     $48.5    $55.7
       R&D               $23.8    $21.1     $23.9    $26.2
 
     ** Capital expenditures for fiscal 2002 are anticipated to be in the range
 of $100 to $150 million, compared to $211 million in fiscal 2001.  "Production
 capacity" capital expenditures are equipment and other manufacturing assets
 that can be added incrementally during the year as market demand dictates.
 "Facilities and cost reduction" capital expenditures are long-term investments
 that maintain KEMET's ability to be cost competitive and to add equipment
 lines as needed to respond to market demands.  The fiscal 2001 increase in
 facilities and cost reduction capital expenditures over prior years related
 primarily to adding capacity to manufacture base metal electrode ceramic
 capacitors.  By the end of the March quarter we had displaced approximately
 30% of the palladium we otherwise would have used to make ceramic capacitors,
 and by the end of fiscal 2002 we anticipate that we will have displaced 60% of
 our palladium usage.
 
                              Fiscal    Fiscal   Fiscal    Fiscal
                               1998      1999     2000      2001
                                        (In Millions)
        Production capacity   $  85       $34      $61      $144
        Facilities & cost
         reduction            $  30       $25      $21      $ 67
                              $ 115       $59      $82      $211
 
     Quiet Period
     Beginning July 2, 2001, KEMET will observe a Quiet Period during which the
 Business Outlook as provided in this press release and the Company's quarterly
 report on Form 10-Q will no longer constitute the Company's current
 expectations.  During the Quiet Period, the Business Outlook in these
 documents should be considered to be historical, applying prior to the Quiet
 Period only and not subject to update by the Company.  During the Quiet
 Period, KEMET representatives will not comment concerning the Business Outlook
 or KEMET's financial results or expectations.  The Quiet Period will extend
 until the day when KEMET's next quarterly earnings release is published,
 presently scheduled for July 23, 2001.
     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.
 
                       KEMET CORPORATION AND SUBSIDIARIES
                         UNAUDITED FINANCIAL HIGHLIGHTS
                  (Dollars in Thousands Except Per Share Data)
 
                               Three months ended        Twelve months ended
                                    March 31,                   March 31,
     ACTUAL INFORMATION        2001        2000          2001         2000
 
     Income Statement Data:
 
     Net Sales              $337,999     $258,120     $1,406,147     $822,095
 
     Cost of goods sold,
      exclusive of
      depreciation           166,730      160,691        693,659      569,706
     Selling, general and
      administrative expenses 15,395       13,178         55,713       48,457
     Research and development  7,210        8,107         26,188       23,918
     Depreciation and
      amortization            15,596       14,419         63,601       55,699
 
     Operating income       133,068        61,725        566,986      124,315
 
     Interest expense         1,833         2,024          7,507        9,135
     Interest income         (4,909)       (2,389)       (16,713)      (2,079)
     Other expense            2,344         3,663          7,892       11,695
     Income taxes            55,356        20,361        215,954       35,445
 
     Net earnings           $78,444       $38,066       $352,346     $ 70,119
 
     Earnings Per Share Data:
 
     Net earnings per share:
       Basic                  $0.91         $0.44         $4.05        $0.87
       Diluted                $0.90         $0.44         $4.00        $0.85
 
     Weighted-average shares outstanding:
       Basic             86,362,252    85,554,814    86,930,965   80,650,376
       Diluted           87,414,105    87,379,088    88,181,118   82,411,634
 
     Other Data:
 
     Earnings before depreciation,
       amortization, interest
       and income taxes
      (EBDAIT)             $148,664     $ 76,144       $630,587     $180,014
 
 
 
                         KEMET CORPORATION AND SUBSIDIARIES
                       UNAUDITED CONSOLIDATED BALANCE SHEETS
                               YEARS ENDED MARCH 31,
                              (Dollars in thousands)
 
                                                      2001              2000
                 ASSETS
 
      Cash                                         $360,758           $75,735
      Short-term investments                             --           123,687
      Accounts receivable, net                       96,583            94,127
      Inventories                                   202,277           130,959
      Accrued income taxes receivable                    --                --
      Prepaid expenses and other current
       assets                                        50,493             4,688
      Deferred income taxes                          35,018            20,099
         Total current assets                       745,129           449,295
      Property, plant and equipment, net            567,262           423,399
      Intangible assets, net                         44,027            46,198
      Other assets                                  $10,112            $8,364
 
            Total assets                         $1,366,530          $927,256
 
             LIABILITIES AND SHAREHOLDERS'
              EQUITY
 
      Accounts payable, trade                      $201,767          $123,708
      Accrued expenses                               49,230            42,045
      Income taxes payable                           34,078            23,388
         Total current liabilities                  285,075           189,141
      Long-term debt                                100,000           100,000
      Other non-current obligations                  51,084            54,757
      Deferred income taxes                          44,196            35,902
         Total liabilities                          480,355           379,800
 
      Common stock                                      876               870
      Additional paid-in capital                    322,070           308,724
      Retained earnings                             590,189           237,846
      Accumulated other comprehensive
       income                                         2,355                16
      Treasury stock at cost                        (29,315)               --
      Total stockholders' equity                    886,175           547,456
 
              Total liabilities and
               stockholders' equity              $1,366,530          $927,256
 
 
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SOURCE KEMET Corporation
    GREENVILLE, S.C., April 23 /PRNewswire Interactive News Release/ --
     KEMET Corporation (NYSE:   KEM) today reported record sales and earnings for
 the fiscal year and the quarter ended March 31, 2001.  Net sales for the year
 increased 71% to $1,406.1 million, compared with $822.1 million last year.
 Net earnings for the year were $352.3 million, or $4.00 per diluted share,
 compared with $70.1 million, or $0.85 per diluted share, for last year.  Net
 sales for the March quarter increased 31% to $338.0 million, compared with
 $258.1 million for the same quarter last year.  Net earnings were $78.4
 million, or $0.90 per diluted share, up 106% from $38.1 million, or $0.44 per
 diluted share, for the same period last year.
     "KEMET has completed the most successful year in its history," stated
 David E. Maguire, Chairman and CEO.  "The electronics industry is a high-
 growth, but cyclical, industry.  The extraordinary financial results of fiscal
 2001 come at the end of a cycle that began with the Asian crisis in fiscal
 1999, which was a very challenging year.  KEMET's net income as a percentage
 of revenue averaged 15.3% over the thirty-six months from the beginning of
 fiscal 1999 through the end of fiscal 2001.  This performance validates
 KEMET's successful business model, focused on earning the preferred supplier
 position at the world's most successful electronics firms as well as the
 capabilities of our experienced management team.  KEMET ended fiscal 2001 with
 $360 million in cash, $100 million in long-term debt, and $886 million in
 shareholders' equity.  This is the strongest financial position in the
 company's history.  We anticipate using these resources to take advantage of
 significant market opportunities, including high-frequency tantalum, high-
 capacitance ceramic, and new solid aluminum capacitors.  Electronics remains a
 high-growth industry, but we are now in another correction phase of the long-
 term growth trend.  This is my tenth cycle, and the rapidity with which this
 inventory/capacity correction is occurring is unprecedented compared to
 previous cycles.  Our near-term visibility is limited because of the general
 uncertainty in the industry.  In this environment, we will focus our efforts
 on cost reduction and continued development of our new products so we again
 will be well positioned to benefit as the industry recovers.
     "On a personal note, Glenn Spears retired as Executive Vice President as
 of April 1, 2001, to spend more time with his family.  Many in the investment
 community who have worked with Glenn over the years have expressed their best
 wishes to him, and he will be missed by all of us."
     Earnings before depreciation, amortization, interest and taxes (EBDAIT)
 for the March quarter were $148.7 million, compared with $76.1 million for the
 same quarter last year.  Sales of surface-mount capacitors were $301.4 million
 for the March quarter, compared to $228.9 million for the same quarter last
 year, while sales of leaded capacitors were $36.6 million versus $29.2 million
 during the same period last year.  Export sales comprised 59% of total sales
 and increased 48% to $200.3 million, compared to $135.3 million in the same
 quarter last year.
     Net sales and net earnings for the last three fiscal years were:
 
                            Fiscal     Fiscal      Fiscal
                             1999       2000        2001
                                    (In Millions)
      Net sales            $565.6     $822.1    $1,406.1
      Net earnings           $6.2      $70.1      $352.3
 
     KEMET Corporation, headquartered in Greenville, South Carolina, is the
 largest manufacturer of solid tantalum capacitors and the fourth largest
 manufacturer of multilayer ceramic capacitors in the world.  KEMET's strategy
 is to be the preferred capacitor supplier to the world's largest, most
 successful electronics original equipment manufacturers, electronics
 manufacturing services providers, and electronics distributors.
     KEMET's common stock is listed on The New York Stock Exchange under the
 symbol KEM.  Additional Company information is available via the Internet
 (http://www.kemet.com).
 
     BUSINESS OUTLOOK
     The following statements are based on current expectations.  These
 statements are forward-looking, and actual results may differ materially.
 Current negative trends in global economic conditions make it particularly
 difficult at present to predict product demand and other related matters.
 
     ** The company's best current estimate, given the high level of economic
 uncertainty, is that revenues for the June quarter will be down approximately
 40% from March quarter revenues due to the inventory correction in the
 electronics industry.  The backlog entering the June quarter is down
 substantially from the level going into the March quarter, but the rate of
 order cancellations and push-outs has slowed considerably.  Selling prices for
 tantalum capacitors increased significantly during the March quarter, due to
 the dramatic rise in cost for tantalum material.  We expect selling prices for
 tantalum capacitors to decline industry-wide as shortages in the world supply
 of tantalum material are alleviated.  We expect that the gross margin
 percentage for fiscal 2002 will average in the range of 30% to 35%.  We
 believe profitability for the June quarter should be the low point for this
 cycle, and we are encouraged by the fact that our distributors' capacitor
 inventories began to decline during March.
     ** During fiscal 2001, KEMET entered into a 50/50 joint venture agreement
 with Australasian Gold Mines NL (AGM) to establish an independent source of
 tantalum to meet the increasing demand for tantalum capacitors from key
 customers.  This transaction closed in April 2001.  KEMET's initial investment
 in the joint venture is approximately $4.9 million, and KEMET acquired a 10
 percent interest in AGM for approximately $2.3 million.  KEMET also has the
 right to acquire all processed tantalum products from the initial production
 plant, which began operations in the March quarter, and from any future
 processing operations.  These tantalum products are expected to be toll
 converted into tantalum powder necessary for the production of capacitors.
 KEMET anticipates that current mining operations will initially provide up to
 10% to 15% of our annual tantalum requirements.
     ** For fiscal 2002, KEMET anticipates maintaining our investment in key
 customer relationships through our direct sales and customer service
 professionals, as well as our research and development to maintain our
 position at the leading edge of technology in the capacitor industry.
 
                         Fiscal   Fiscal    Fiscal   Fiscal
                          1998     1999      2000     2001
                                  (In Millions)
       SG&A              $48.8    $46.6     $48.5    $55.7
       R&D               $23.8    $21.1     $23.9    $26.2
 
     ** Capital expenditures for fiscal 2002 are anticipated to be in the range
 of $100 to $150 million, compared to $211 million in fiscal 2001.  "Production
 capacity" capital expenditures are equipment and other manufacturing assets
 that can be added incrementally during the year as market demand dictates.
 "Facilities and cost reduction" capital expenditures are long-term investments
 that maintain KEMET's ability to be cost competitive and to add equipment
 lines as needed to respond to market demands.  The fiscal 2001 increase in
 facilities and cost reduction capital expenditures over prior years related
 primarily to adding capacity to manufacture base metal electrode ceramic
 capacitors.  By the end of the March quarter we had displaced approximately
 30% of the palladium we otherwise would have used to make ceramic capacitors,
 and by the end of fiscal 2002 we anticipate that we will have displaced 60% of
 our palladium usage.
 
                              Fiscal    Fiscal   Fiscal    Fiscal
                               1998      1999     2000      2001
                                        (In Millions)
        Production capacity   $  85       $34      $61      $144
        Facilities & cost
         reduction            $  30       $25      $21      $ 67
                              $ 115       $59      $82      $211
 
     Quiet Period
     Beginning July 2, 2001, KEMET will observe a Quiet Period during which the
 Business Outlook as provided in this press release and the Company's quarterly
 report on Form 10-Q will no longer constitute the Company's current
 expectations.  During the Quiet Period, the Business Outlook in these
 documents should be considered to be historical, applying prior to the Quiet
 Period only and not subject to update by the Company.  During the Quiet
 Period, KEMET representatives will not comment concerning the Business Outlook
 or KEMET's financial results or expectations.  The Quiet Period will extend
 until the day when KEMET's next quarterly earnings release is published,
 presently scheduled for July 23, 2001.
     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.
 
                       KEMET CORPORATION AND SUBSIDIARIES
                         UNAUDITED FINANCIAL HIGHLIGHTS
                  (Dollars in Thousands Except Per Share Data)
 
                               Three months ended        Twelve months ended
                                    March 31,                   March 31,
     ACTUAL INFORMATION        2001        2000          2001         2000
 
     Income Statement Data:
 
     Net Sales              $337,999     $258,120     $1,406,147     $822,095
 
     Cost of goods sold,
      exclusive of
      depreciation           166,730      160,691        693,659      569,706
     Selling, general and
      administrative expenses 15,395       13,178         55,713       48,457
     Research and development  7,210        8,107         26,188       23,918
     Depreciation and
      amortization            15,596       14,419         63,601       55,699
 
     Operating income       133,068        61,725        566,986      124,315
 
     Interest expense         1,833         2,024          7,507        9,135
     Interest income         (4,909)       (2,389)       (16,713)      (2,079)
     Other expense            2,344         3,663          7,892       11,695
     Income taxes            55,356        20,361        215,954       35,445
 
     Net earnings           $78,444       $38,066       $352,346     $ 70,119
 
     Earnings Per Share Data:
 
     Net earnings per share:
       Basic                  $0.91         $0.44         $4.05        $0.87
       Diluted                $0.90         $0.44         $4.00        $0.85
 
     Weighted-average shares outstanding:
       Basic             86,362,252    85,554,814    86,930,965   80,650,376
       Diluted           87,414,105    87,379,088    88,181,118   82,411,634
 
     Other Data:
 
     Earnings before depreciation,
       amortization, interest
       and income taxes
      (EBDAIT)             $148,664     $ 76,144       $630,587     $180,014
 
 
 
                         KEMET CORPORATION AND SUBSIDIARIES
                       UNAUDITED CONSOLIDATED BALANCE SHEETS
                               YEARS ENDED MARCH 31,
                              (Dollars in thousands)
 
                                                      2001              2000
                 ASSETS
 
      Cash                                         $360,758           $75,735
      Short-term investments                             --           123,687
      Accounts receivable, net                       96,583            94,127
      Inventories                                   202,277           130,959
      Accrued income taxes receivable                    --                --
      Prepaid expenses and other current
       assets                                        50,493             4,688
      Deferred income taxes                          35,018            20,099
         Total current assets                       745,129           449,295
      Property, plant and equipment, net            567,262           423,399
      Intangible assets, net                         44,027            46,198
      Other assets                                  $10,112            $8,364
 
            Total assets                         $1,366,530          $927,256
 
             LIABILITIES AND SHAREHOLDERS'
              EQUITY
 
      Accounts payable, trade                      $201,767          $123,708
      Accrued expenses                               49,230            42,045
      Income taxes payable                           34,078            23,388
         Total current liabilities                  285,075           189,141
      Long-term debt                                100,000           100,000
      Other non-current obligations                  51,084            54,757
      Deferred income taxes                          44,196            35,902
         Total liabilities                          480,355           379,800
 
      Common stock                                      876               870
      Additional paid-in capital                    322,070           308,724
      Retained earnings                             590,189           237,846
      Accumulated other comprehensive
       income                                         2,355                16
      Treasury stock at cost                        (29,315)               --
      Total stockholders' equity                    886,175           547,456
 
              Total liabilities and
               stockholders' equity              $1,366,530          $927,256
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
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 SOURCE  KEMET Corporation