KEMET Reports Preliminary Fourth Quarter and Fiscal Year 2016 Results
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GREENVILLE, SC -- (Marketwired) -- 05/03/16 -- KEMET Corporation (NYSE: KEM)
- Net sales for the quarter up 3.8% to $183.9 million compared to the prior quarter ended December 31, 2015.
- Gross margin for fiscal year 2016 of 22.2% compared to 19.4% for the prior fiscal year 2015.
- Cash Balance as of March 31, 2016 of $65.0 million up $21.8 million from December 31, 2015
- Board authorizes debt repurchase plan for Fiscal Year 2017
KEMET Corporation (the "Company") (NYSE: KEM), a leading global supplier of electronic components, today reported preliminary results for the fourth quarter and fiscal year ended March 31, 2016.
"We ended the year on a solid note with a strong finish with our cash flow exceeding our earlier forecasts," stated Per Loof, KEMET's Chief Executive Officer. "Overall, in a challenging economic environment, our operational excellence continued to improve margins and meet or exceed customer expectations. Finishing the fiscal year in this position has allowed our Board of Directors to authorize a debt repurchase plan, initially up to $20 million over the course of our Fiscal Year 2017 that began April 1, 2016, to facilitate lower interest payments and position the Company to accomplish our strategic objectives," continued Loof.
Net sales of $183.9 million for the quarter ended March 31, 2016 increased 3.8% from net sales of $177.2 million for the prior quarter ended December 31, 2015, and decreased 5.0% compared to net sales of $193.7 million for the quarter ended March 31, 2015. For the fiscal year ended March 31, 2016 net sales were $734.8 million compared to $823.2 million for the fiscal year ended March 31, 2015.
U.S. GAAP net loss from continuing operations before the equity loss from NEC TOKIN for the quarter ended March 31, 2016 was $3.5 million or $0.08 per basic and diluted share, compared to a net loss from continuing operations before equity loss from NEC TOKIN of $17.8 million or $0.39 for the quarter ended March 31, 2015 which included a non-cash loss of $11.1 million or $0.24 per basic and diluted share corresponding to the change in value of the NEC TOKIN option. The total U.S. GAAP net loss, including the equity loss from NEC TOKIN, for the quarter ended March 31, 2016 was $15.2 million, or $0.33 loss per basic and diluted share, compared to a net loss for the quarter ended March 31, 2015 of $19.8 million or $0.44 loss per basic and diluted share.
Non-U.S. GAAP Adjusted net income for the quarter ended March 31, 2016 was $1.8 million or $0.04 per basic and diluted share, compared to a non-U.S. GAAP Adjusted net loss of $1.6 million or $0.04 per basic and diluted share for the quarter ended March 31, 2015.
U.S. GAAP net loss from continuing operations before equity loss from NEC TOKIN for the fiscal year ended March 31, 2016 was $37.2 million or $0.81 per basic and diluted share which includes a non-cash loss of $26.3 million or $0.57 per basic and diluted share corresponding to the change in value of the NEC TOKIN option, compared to a net loss from continuing operations before equity loss from NEC TOKIN of $17.4 million or $0.38 per basic and diluted share which includes a non-cash gain of $2.1 million or $0.05 per basic and diluted share related to the change in value of the NEC TOKIN option for the fiscal year ended March 31, 2015. The total U.S. GAAP loss, including the equity loss from NEC TOKIN, for the fiscal year ended March 31, 2016 was $53.6 million, or $1.17 loss per basic and diluted share compared to a net loss of $14.1 million, or $0.31 loss per basic and diluted share for the fiscal year ended March 31, 2015.
For the fiscal year ended March 31, 2016, the non-U.S. GAAP Adjusted net income was $8.9 million, or $0.17 per diluted share compared to non-U.S. GAAP Adjusted net income of $7.0 million, or $0.13 per diluted share for the fiscal year ended March 31, 2015.
Net income (loss) for the fiscal quarters and years ended March 31, 2016 and 2015 include various items affecting comparability as denoted in the U.S. GAAP to Non-U.S. GAAP reconciliation table included hereafter.
About KEMET
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.
QUIET PERIOD
Beginning July 1, 2016, we will observe a quiet period during which the information provided in this news release and annual report on Form 10-K 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 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 outcomes 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) continued net losses could impact our ability to realize current operating plans and could materially adversely affect our liquidity and our ability to continue to operate; (iii) adverse economic conditions could cause the write down of long-lived assets or goodwill; (iv) an increase in the cost or a decrease in the availability of our principal or single-sourced purchased materials; (v) changes in the competitive environment; (vi) uncertainty of the timing of customer product qualifications in heavily regulated industries; (vii) economic, political, or regulatory changes in the countries in which we operate; (viii) difficulties, delays or unexpected costs in completing the restructuring plans; (ix) equity method investment in NEC TOKIN exposes us to a variety of risks; (x) acquisitions and other strategic transactions expose us to a variety of risks; (xi) possible acquisition of NEC TOKIN may not achieve all of the anticipated results; (xii) our business could be negatively impacted by increased regulatory scrutiny and litigation; (xiii) inability to attract, train and retain effective employees and management; (xiv) inability to develop innovative products to maintain customer relationships and offset potential price erosion in older products; (xv) exposure to claims alleging product defects; (xvi) the impact of laws and regulations that apply to our business, including those relating to environmental matters; (xvii) the impact of international laws relating to trade, export controls and foreign corrupt practices; (xviii) volatility of financial and credit markets affecting our access to capital; (xix) the need to reduce the total costs of our products to remain competitive; (xx) potential limitation on the use of net operating losses to offset possible future taxable income; (xxi) restrictions in our debt agreements that limit our flexibility in operating our business; (xxii) failure of our information technology systems to function properly or our failure to control unauthorized access to our systems may cause business disruptions; (xxiii) additional exercise of the warrant by K Equity which could potentially result in the existence of a significant stockholder who could seek to influence our corporate decisions; and (xxiv) fluctuation in distributor sales could adversely affect our results of operations.
KEMET CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
(Unaudited)
Quarters Ended March
31, Fiscal Year Ended
---------------------- ----------------------
2016 2015 2016 2015
---------- ---------- ---------- ----------
Net sales $ 183,926 $ 193,708 $ 734,823 $ 823,192
Operating costs and
expenses:
Cost of sales 141,913 157,379 571,543 663,683
Selling, general and
administrative expenses 25,790 24,870 101,446 98,533
Research and development 6,395 6,572 24,955 25,802
Restructuring charges 617 3,437 4,178 13,017
Net (gain) loss on sales
and disposals of assets 608 538 375 (221)
---------- ---------- ---------- ----------
Total operating costs
and expenses 175,323 192,796 702,497 800,814
---------- ---------- ---------- ----------
Operating income
(loss) 8,603 912 32,326 22,378
Other (income) expense:
Interest income (4) (4) (14) (15)
Interest expense 9,929 10,020 39,605 40,701
Change in value of NEC
TOKIN options - 11,100 26,300 (2,100)
Other income (expense),
net 147 (2,453) (2,348) (4,082)
---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before income taxes and
equity income (loss)
from NEC TOKIN (1,469) (17,751) (31,217) (12,126)
Income tax expense (benefit) 2,056 3 6,006 5,227
---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before equity income
(loss) from NEC TOKIN (3,525) (17,754) (37,223) (17,353)
Equity income (loss) from
NEC TOKIN (11,648) (2,093) (16,406) (2,169)
---------- ---------- ---------- ----------
Income (loss) from
continuing operations (15,173) (19,847) (53,629) (19,522)
Income (loss) from
discontinued operations - - - 5,379
---------- ---------- ---------- ----------
Net income (loss) $ (15,173) $ (19,847) $ (53,629) $ (14,143)
========== ========== ========== ==========
Net income (loss) per basic
share:
Income (loss) from
continuing operations $ (0.33) $ (0.44) $ (1.17) $ (0.43)
Income (loss) from
discontinued operations $ - $ - $ - $ 0.12
Net income (loss) $ (0.33) $ (0.44) $ (1.17) $ (0.31)
Net income (loss) per
diluted share:
Income (loss) from
continuing operations $ (0.33) $ (0.44) $ (1.17) $ (0.43)
Income (loss) from
discontinued operations $ - $ - $ - $ 0.12
Net income (loss) $ (0.33) $ (0.44) $ (1.17) $ (0.31)
Weighted-average shares
outstanding:
Basic 46,160 45,443 46,004 45,381
Diluted 46,160 45,443 46,004 45,381
KEMET CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in thousands, except per share data)
(Unaudited)
March 31, March 31,
2016 2015
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 65,004 $ 56,362
Accounts receivable, net 93,168 90,857
Inventories, net 168,879 171,843
Prepaid expenses and other 25,496 41,503
---------- ----------
Total current assets 352,547 360,565
Property plant and equipment net of accumulated
depreciation of $815,338 and $804,286 as of March
31, 2016 and March 31, 2015, respectively 241,839 249,641
Goodwill 40,294 35,584
Intangible assets, net 33,301 33,282
Investment in NEC TOKIN 20,334 45,016
Deferred income taxes 8,397 9,774
Other assets 5,832 12,831
---------- ----------
Total assets $ 702,544 $ 746,693
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ - $ 962
Accounts payable 70,981 69,785
Accrued expenses 50,320 60,456
Income taxes payable 453 884
---------- ----------
Total current liabilities 121,754 132,087
Long-term debt, less current portion 390,597 390,409
Other non-current obligations 74,892 57,131
Deferred income taxes 2,820 2,384
Stockholders' equity:
Preferred stock, par value $0.01, authorized
10,000 shares, none issued - -
Common stock, par value $0.01, authorized 175,000
shares, issued 46,508 shares at March 31, 2016
and 2015 465 465
Additional paid-in capital 452,821 461,191
Retained deficit (299,510) (245,881)
Accumulated other comprehensive income (31,425) (28,796)
Treasury stock, at cost (611 and 1,056 shares at
March 31, 2016 and 2015, respectively) (9,870) (22,297)
---------- ----------
Total stockholders' equity 112,481 164,682
---------- ----------
Total liabilities and stockholders' equity $ 702,544 $ 746,693
========== ==========
KEMET CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited) Fiscal Years Ended
March 31,
----------------------
2016 2015
---------- ----------
Net income (loss) $ (53,629) $ (14,143)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Gain on sale of discontinued operations - (5,644)
Net cash provided by (used in) operating
activities of discontinued operations - (679)
Depreciation and amortization 39,016 40,768
Non-cash debt and financing costs 859 2,032
Gain on early extinguishment of debt - (1,003)
Equity income (loss) from NEC TOKIN 16,406 2,169
Change in value of NEC TOKIN options 26,300 (2,100)
Net (gain) loss on sales and disposals of assets 375 (221)
Stock-based compensation expense 4,774 4,512
Pension and other post-retirement benefits 719 (13,283)
Deferred income tax expense (benefit) 657 (2,084)
Write down of receivables 24 52
Other, net 306 (7)
Changes in assets and liabilities:
Accounts receivable (2,346) 8,220
Inventories 3,338 8,559
Prepaid expenses and other current assets 13,103 (8,404)
Accounts payable (5,982) (2,879)
Accrued income taxes 280 (383)
Other operating liabilities (11,835) 8,920
---------- ----------
Net cash provided by (used in) operating
activities 32,365 24,402
Investing activities:
Capital expenditures (20,469) (22,232)
Acquisitions, net of cash received (2,892) -
Change in restricted cash 1,802 11,509
Proceeds from sale of discontinued operations - 9,564
Proceeds from sale of assets 971 4,788
---------- ----------
Net cash provided by (used in) investing
activities (20,588) 3,629
---------- ----------
Financing activities:
Proceeds from revolving line of credit 10,000 42,340
Payments of revolving line of credit (9,600) (27,342)
Deferred acquisition payments (3,000) (19,527)
Payments of long-term debt (481) (21,733)
Proceeds from exercise of stock options - 24
Purchase of treasury stock (722) (630)
---------- ----------
Net cash provided by (used in) financing
activities (3,803) (26,868)
---------- ----------
Net increase (decrease) in cash and cash
equivalents 7,974 1,163
Effect of foreign currency fluctuations on cash 668 (2,730)
Cash and cash equivalents at beginning of fiscal
period 56,362 57,929
---------- ----------
Cash and cash equivalents at end of fiscal period $ 65,004 $ 56,362
========== ==========
Non-U.S. GAAP Financial Measures
In this news release, the Company makes reference to certain Non-U.S. GAAP financial measures, including "Adjusted gross margin", "Adjusted operating income", "Adjusted net income (loss)", "Adjusted net income (loss) per share" and "Adjusted EBITDA". Management believes that investors may find it useful to review the Company's financial results as adjusted to exclude items as determined by management.
Adjusted Gross Margin
Adjusted gross margin represents net sales less cost of sales excluding adjustments which are outlined in the quantitative reconciliation provided below. Management uses Adjusted gross margin to facilitate our analysis and understanding of our business operations and believes that Adjusted gross margin is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company. Adjusted gross margin should not be considered as an alternative to gross margin or any other performance measure derived in accordance with U.S. GAAP.
The following table provides a reconciliation from U.S. GAAP Gross margin to Non-U.S. GAAP Adjusted gross margin (amounts in thousands):
Quarters Ended Fiscal Years Ended
------------------------------- --------------------
March 31, December March 31, March 31, March 31,
2016 31, 2015 2015 2016 2015
--------- --------- --------- --------- ---------
(Unaudited)
Net sales $ 183,926 $ 177,184 $ 193,708 $ 734,823 $ 823,192
Gross Margin 42,013 38,748 36,329 163,280 159,509
Gross margin as a %
of net sales 22.8% 21.9% 18.8% 22.2% 19.4%
Non-U.S. GAAP-
adjustments:
Plant shut-down costs 141 231 - 372 889
Plant start-up costs 319 160 651 861 4,556
Stock-based
compensation expense 278 268 465 1,418 1,576
Inventory Revaluation - - (928) - -
--------- --------- --------- --------- ---------
Adjusted gross
margin $ 42,751 $ 39,407 $ 36,517 $ 165,931 $ 166,530
========= ========= ========= ========= =========
Adjusted gross margin
as a % of net sales 23.2% 22.2% 18.9% 22.6% 20.2%
Adjusted Operating Income (Loss)
Adjusted operating income represents operating income (loss), excluding adjustments which are outlined in the quantitative reconciliation provided below. We use Adjusted operating income to facilitate our analysis and understanding of our business operations and believe that Adjusted operating income (loss) is useful to investors because it provides a supplemental way to understand our underlying operating performance. Adjusted operating income (loss) should not be considered as an alternative to operating income (loss) or any other performance measure derived in accordance with U.S. GAAP.
Adjusted operating income (loss) is calculated as follows (amounts in thousands):
Quarters Ended Fiscal Year Ended
----------------------------- -------------------
March 31, December March 31, March 31, March 31,
2016 31, 2015 2015 2016 2015
--------- --------- --------- --------- ---------
(Unaudited)
--------------------------------------------------
Operating income (loss) $ 8,603 $ 8,493 $ 912 $ 32,326 $ 22,378
Adjustments:
ERP integration costs/IT
transition costs 859 167 1,273 5,677 3,248
Stock-based compensation
expense 1,013 1,154 1,328 4,774 4,512
Restructuring charges 617 1,714 3,437 4,178 13,017
Legal expenses related
to antitrust class
actions 482 1,300 435 3,041 844
NEC TOKIN investment
related expenses 265 225 226 900 1,778
Plant start-up costs 319 160 651 861 4,556
Net (gain) loss on sales
and disposals of assets 608 129 538 375 (221)
Plant shut-down costs 141 231 - 372 889
Pension plan adjustment - - - 312 -
Inventory Revaluation - - (928) - -
--------- --------- --------- --------- ---------
Adjusted operating
income (loss) $ 12,907 $ 13,573 $ 7,872 $ 52,816 $ 51,001
========= ========= ========= ========= =========
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share
"Adjusted net income (loss)" and "Adjusted net income (loss) per share" represent net income (loss) and net income (loss) per share excluding adjustments which are outlined in the quantitative reconciliation provided below. Management believes that these Non-U.S. GAAP financial measures are useful to investors because they provide a supplemental way to understand the underlying operating performance of the Company. Management uses these Non-U.S. GAAP financial measures to evaluate operating performance. Non-U.S. GAAP financial measures should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with U.S. GAAP.
The following table provides reconciliation from U.S. GAAP net income (loss) to Non-U.S. GAAP adjusted net income (loss):
U.S. GAAP to Non- U.S. GAAP Reconciliation
Quarters Ended Fiscal Year Ended
------------------------------- --------------------
March 31, December March 31, March 31, March 31,
2016 31, 2015 2015 2016 2015
--------- --------- --------- --------- ---------
(Unaudited, Amounts in thousands, except per share
data)
U.S. GAAP
Net sales $ 183,926 $ 177,184 $ 193,708 $ 734,823 $ 823,192
Net income (loss)
from continuing
operations (15,173) (8,600) (19,847) (53,629) (19,522)
Income (loss) from
discontinued
operations - - - - 5,379
--------- --------- --------- --------- ---------
Net income (loss) $ (15,173) $ (8,600) $ (19,847) $ (53,629) $ (14,143)
Net income (loss) per
basic and diluted
share:
Net income (loss)
from continuing
operations $ (0.33) $ (0.19) $ (0.44) $ (1.17) $ (0.43)
Net income (loss)
from discontinued
operations $ - $ - $ - $ - $ 0.12
--------- --------- --------- --------- ---------
Net income (loss) $ (0.33) $ (0.19) $ (0.44) $ (1.17) $ (0.31)
Non-U.S. GAAP
Net income (loss) (15,173) (8,600) (19,847) (53,629) (14,143)
Adjustments:
Change in value
of NEC TOKIN
options - (700) 11,100 26,300 (2,100)
Equity (gain)
loss from NEC
TOKIN 11,648 6,505 2,093 16,406 2,169
Restructuring
charges 617 1,714 3,437 4,178 13,017
ERP integration
costs/IT
transition costs 859 167 1,273 5,677 3,248
Stock-based
compensation 1,013 1,154 1,328 4,774 4,512
Legal expenses
related to
antitrust class
actions 482 1,300 435 3,041 844
Net foreign
exchange (gain)
loss 122 (1,036) (2,168) (3,036) (4,249)
NEC TOKIN
investment
related expenses 265 225 226 900 1,778
Income tax effect
of pension
curtailment 155 720 - 875 -
Plant start-up
costs 319 160 651 861 4,556
Amortization
included in
interest expense 210 212 244 859 1,814
(Gain) loss on
sales and
disposals of
assets 608 129 538 375 (221)
Plant shut-down
costs 141 231 - 372 889
Pension plan
adjustment - - - 312 -
Income tax effect
of non-GAAP
adjustments (1) 546 (10) 20 652 84
(Income) loss
from
discontinued
operations - - - - (5,379)
(Gain) loss on
early
extinguishment
of debt - - - - (1,003)
Professional fees
related to
financing
activities - - - - 1,142
Inventory
Revaluation - - (928) - -
--------- --------- --------- --------- ---------
Adjusted net income
(loss) $ 1,812 $ 2,171 $ (1,598) $ 8,917 $ 6,958
========= ========= ========= ========= =========
Adjusted net income
(loss) per basic
share $ 0.04 $ 0.05 $ (0.04) $ 0.19 $ 0.15
Adjusted net income
(loss) per diluted
share $ 0.04 $ 0.04 $ (0.04) $ 0.17 $ 0.13
Weighted average
shares outstanding:
Basic 46,160 46,081 45,443 46,004 45,381
Diluted (2) 50,056 51,865 45,443 51,436 52,588
(1) The income tax effect of the excluded items is calculated by applying the applicable jurisdictional income tax rate, considering the deferred tax valuation for each applicable jurisdiction.
(2) Used to calculate adjusted net income (loss) per diluted share.
Adjusted EBITDA
Adjusted EBITDA represents net income (loss) before net interest expense, income tax expense, and depreciation and amortization expense, adjusted to exclude certain item which are outlined in the quantitative reconciliation provided below. We use Adjusted EBITDA to monitor and evaluate our operating performance and to facilitate internal and external comparisons of the historical operating performance of our business. We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We also present Adjusted EBITDA because we believe such measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
We believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. The other adjustments to arrive at Adjusted EBITDA are excluded in order to better reflect our continuing operations.
In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments noted below. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these types of adjustments. Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.
Our Adjusted EBITDA measure has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:
- it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
- it does not reflect changes in, or cash requirements for, our working capital needs;
- it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and our Adjusted EBITDA measure does not reflect any cash requirements for such replacements;
- it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
- it does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;
- it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and
- other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only supplementally.
The following table provides a reconciliation from U.S. GAAP net income (loss) to Adjusted EBITDA (amounts in thousands):
Fiscal Year 2016
------------------------------------------------
Q1 Q2 Q3 Q4 Total
-------- -------- -------- -------- --------
Net income (loss) $(37,050) $ 7,194 $ (8,600) $(15,173) $(53,629)
Adjustments:
Income tax expense
(benefit) (248) 1,438 2,760 2,056 6,006
Interest expense, net 10,010 9,808 9,848 9,925 39,591
Depreciation and
amortization 9,917 9,265 9,674 10,160 39,016
Change in value of NEC
TOKIN options 29,200 (2,200) (700) - 26,300
Equity (gain) loss from
NEC TOKIN (1,585) (162) 6,505 11,648 16,406
ERP integration costs/IT
transition costs 4,369 282 167 859 5,677
Stock-based compensation 1,279 1,328 1,154 1,013 4,774
Restructuring charges 1,824 23 1,714 617 4,178
Legal expenses related to
antitrust class actions 718 541 1,300 482 3,041
Net foreign exchange
(gain) loss 1,049 (3,171) (1,036) 122 (3,036)
NEC TOKIN investment-
related expenses 224 186 225 265 900
Plant start-up costs 195 187 160 319 861
(Gain) loss on sales and
disposals of assets (58) (304) 129 608 375
Plant shut-down costs - - 231 141 372
Pension plan adjustment 312 - - - 312
-------- -------- -------- -------- --------
Adjusted EBITDA $ 20,156 $ 24,415 $ 23,531 $ 23,042 $ 91,144
======== ======== ======== ======== ========
Fiscal Year 2015
------------------------------------------------
Q1 Q2 Q3 Q4 Total
-------- -------- -------- -------- --------
Net income (loss) $ (3,540) $ 6,330 $ 2,914 $(19,847) $(14,143)
Adjustments:
Income tax expense
(benefit) 1,282 2,583 1,359 3 5,227
Interest expense, net 10,453 10,284 9,933 10,016 40,686
Depreciation and
amortization 10,797 10,177 9,720 10,074 40,768
Change in value of NEC
TOKIN options (4,100) (6,600) (2,500) 11,100 (2,100)
Equity (gain) loss from
NEC TOKIN 1,675 (232) (1,367) 2,093 2,169
ERP integration costs/IT
transition costs 895 409 671 1,273 3,248
Stock-based compensation 994 958 1,232 1,328 4,512
Restructuring charges 1,830 1,687 6,063 3,437 13,017
Legal expenses related to
antitrust class actions - - 409 435 844
Net foreign exchange
(gain) loss 527 (1,351) (1,257) (2,168) (4,249)
NEC TOKIN investment-
related expenses 580 487 485 226 1,778
Plant start-up costs 1,647 1,114 1,144 651 4,556
(Gain) loss on sales and
disposals of assets 365 (550) (574) 538 (221)
Plant shut-down costs 889 - - - 889
(Income) loss from
discontinued operations (6,943) 1,400 164 - (5,379)
(Gain) loss on early
extinguishment of debt - - (1,003) - (1,003)
Professional fees related
to financing activities - - 1,142 - 1,142
Inventory revaluation 2,676 (821) (927) (928) -
-------- -------- -------- -------- --------
Adjusted EBITDA $ 20,027 $ 25,875 $ 27,608 $ 18,231 $ 91,741
======== ======== ======== ======== ========
Contact: William M. Lowe, Jr. Executive Vice President and Chief Financial Officer [email protected] Richard J. Vatinelle Vice President and Treasurer [email protected]
Source: KEMET Corporation
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