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[August 2006]
KEMET Reports Increased Sales and Profitability for First Quarter
KEMET Corporation (Greenville, SC, USA) has reported that net sales for the quarter ended 30 June 2006 were US$169.6 million, which represents a 27% increase over the previous quarter and a 49% increase over the same quarter last year. Net income before special charges and the impact of SFAS No. 123R increased to US$12 million compared to US$7.9 million last quarter and a net loss of US$0.3 million for the same quarter last year.
On a GAAP basis, net income was US$0.6 million for the current quarter compared to the previous quarter's
net loss of US$2.3 million and a net income of US$3 million for the same quarter last year. KEMET also reports results before special charges because the results offer an alternative depiction of normal operations.
Comparisons to prior periods are as follows:"We are extremely pleased to report another solid quarter of increased sales and profitability," stated Per Loof, CEO. "Strong demand across all regions and channels, combined with a favorable pricing environment contributed to the growth in sales for the quarter.
"Profitability also improved as we capitalized on the increased revenue and continued to drive our cost reduction initiatives. Gross margins for the quarter increased to 22% (24% excluding the recent acquisition) compared to 21% in the previous quarter, and net income increased to $12.0 million, compared to $10.7 million in the previous quarter on a pro forma basis.
"This is also the first quarter that reflects the impact of our recent acquisition of the EPCOS tantalum business. Sales for this newly acquired business actually exceeded our previous estimates. Sales generated by the acquired tantalum business were $24.5 million in the quarter. We are very encouraged by the fact that the new business unit, excluding the impact from the German manufacturing operations, was accretive in our very first quarter, which was better than the dilution we previously estimated. As previously announced, we did not purchase the German manufacturing operations from EPCOS. In order to ensure no disruption in supply to our new customers, we entered into a temporary agreement with EPCOS. We are currently in the process of ramping down this temporary arrangement, therefore this will not impact our future results. We are very pleased with these initial results and with the progress we've made as we integrate this business into our Company. The response we have received from our new customers has been very positive. Our integration team, including our new employees in Europe, has worked diligently to make this transition virtually seamless."
www.kemet.com
ENDS