KEMET Comments on European Commission Announcement of TOKIN Corporation Fine
March 21 2018 - 4:30PM
KEMET Corporation (“KEMET” or the “Company”) (NYSE:KEM), a leading
global supplier of passive electronic components, announced today
that the European Commission (the “Commission”) has completed its
investigation into alleged aluminum and tantalum electrolytic
capacitor cartel activities, and assessed penalties to eight
capacitor manufacturers, including TOKIN Corporation (“TOKIN”),
according to a March 21 Commission press release. KEMET
Electronics Corporation (“KEC”), a wholly-owned subsidiary of the
Company, acquired TOKIN on April 19, 2017. KEMET and KEC were not a
part of the investigation by the Commission.
The Commission assessed TOKIN fines of €8.8 million directly
(approximately $10.7 million) and €5.0 million (approximately $6.1
million) jointly and severally with NEC Corporation. The
fines are subject to payment within 90 days of notification to
TOKIN. The Company has previously accrued approximately $15
million for this liability and therefore does not expect a material
impact to its financial statements because of this
assessment. The total accrued liability expected at March 31,
2018 for antitrust issues is approximately $77.0 million, a
decrease of $6.4 million from $83.4 million at March 31, 2017.
“We are pleased to have one more jurisdiction complete its
review and announce its findings concerning our subsidiary TOKIN,
as it removes more uncertainty related to the total
liability. We anticipated this range of settlement, and
previously accrued a liability to the TOKIN Balance Sheet related
to the European Union as well as included it in our future cash
flow expectations,” stated Per Loof, KEMET's Chief Executive
Officer. “This settlement brings the TOKIN group closer to closing
this chapter in its history. Several of the previous fines assessed
to TOKIN permit payments over time, between five and eight years,
and will not have a material impact on our operating cash flows in
future periods,” continued Loof.
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 April 1, 2018, we will observe a quiet period
during which the information provided in this news release and
quarterly report on Form 10-Q will no longer constitute our
current expectations. During the quiet period, this information
should 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 and cause a write down of
long-lived assets or goodwill; (ii) an increase in the cost or a
decrease in the availability of our principal or single-sourced
purchased raw materials; (iii) changes in the competitive
environment; (iv) uncertainty of the timing of customer product
qualifications in heavily regulated industries; (v) economic,
political, or regulatory changes in the countries in which we
operate; (vi) difficulties, delays or unexpected costs in
completing the restructuring plans; (vii) acquisitions and other
strategic transactions expose us to a variety of risks; (viii)
acquisition of TOKIN may not achieve all of the anticipated
results; (ix) our business could be negatively impacted by
increased regulatory scrutiny and litigation; (x) difficulties
associated with retaining, attracting and training effective
employees and management; (xi) the need 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 and cyber security; (xiv) the impact of international laws
relating to trade, export controls and foreign corrupt practices;
(xv) changes impacting international trade and corporate tax
provisions related to the global manufacturing and sales of our
products may have an adverse effect on our financial condition and
results of operations; (xvi) volatility of financial and credit
markets affecting our access to capital; (xvii) the need to reduce
the total costs of our products to remain competitive; (xviii)
potential limitation on the use of net operating losses to offset
possible future taxable income; (xix) restrictions in our debt
agreements that could limit our flexibility in operating our
business; (xx) disruption to our information technology systems to
function properly or control unauthorized access to our systems may
cause business disruptions; (xxi) any economic and demographic
experience for our pension plans and other post-retirement benefit
plans that is less favorable than our assumptions; (xxii)
fluctuation in distributor sales could adversely affect our results
of operations; and (xxiii) earthquakes and other natural disasters
could disrupt our operations and have a material adverse effect on
our financial condition and results of operations.
Our acquisition accounting, including the acquisition gains, are
preliminary as management continues to evaluate the fair value of
the net assets acquired and consideration transferred. In addition,
the allocation of the purchase price is based on estimates and
assumption that are subject to change with the measurement
period.
|
|
Contact: |
William M.
Lowe, Jr. |
|
Executive Vice
President and |
|
Chief Financial
Officer |
|
williamlowe@kemet.com |
|
864-963-6484 |
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