KEMET Announces Third Customer-Financed Capacity Agreement
February 13 2019 - 4:15PM
KEMET Corporation, a Delaware corporation (“KEMET” or the
“Company”), a leading global supplier of passive electronic
components, announced today that it has entered into a customer
agreement which provides interest-free advance payments to KEMET
totaling $6 million, which will be used to fund KEMET investments
in increased capacity. Together with two similar agreements entered
into by the Company on September 4, 2018 and November 26, 2018,
respectively, the Company will be receiving interest-free customer
advances of $72 million to increase its capacity for the
manufacture of certain multi-layer ceramic capacitors requested by
the customers. For each agreement, the customer has a right of
first order regarding the use of the additional capacity funded by
its advance. KEMET retains the title and ownership to all equipment
purchased using the advance.
“We believe that these customer agreements reflect our
customers’ committed optimism in anticipating long-term market
growth and their confidence in KEMET’s outstanding product quality
and excellent customer service,” stated William Lowe, the Company's
Chief Executive Officer. “By partnering with KEMET in our
capital expansion plans, these customers are able to secure and
expand their supply of multi-layer ceramic capacitors despite the
current and possible future global supply constraints concerning
such products,” continued Lowe.
For each agreement, the advance is paid in quarterly
installments over an expected period of 18 – 24 months. Once the
additional capacity is fully installed and available, the advance
is repaid to the customer on a quarterly basis. Each quarterly
repayment amount is determined by a calculation that generally
takes into account the number of components purchased by the
customer in such quarter in excess of its established based
ordering rate and is capped at 1/40th of the total advance.
Although the minimum repayment period is ten years (beginning with
the initial repayment), if, based on the customer’s ordering rate,
the advance has not been fully repaid by a specific date (for each
agreement, such date being approximately 20 years after the
contract execution date), then any remaining amounts of the advance
are considered paid in full.
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 offers our customers the broadest
selection of capacitor technologies in the industry, along with an
expanding range of electromechanical devices, electromagnetic
compatibility solutions and supercapacitors. Our vision is to
be the preferred supplier of electronic component solutions
demanding the highest standards of quality, delivery and
service. 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” or other similar
expressions and future or conditional verbs such as “will,”
“should,” “would,” and “could” 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 could 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 Company's restructuring plans; (vii) acquisitions
and other strategic transactions expose us to a variety of risks,
including the ability to successfully integrate and maintain
adequate internal controls over financial reporting in compliance
with applicable regulations; (viii) our acquisition of TOKIN
Corporation 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,
data protection, cyber security, and privacy; (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) economic and demographic
experience for pension and other post-retirement benefit plans
could be less favorable than our assumptions; (xxii) fluctuation in
distributor sales could adversely affect our results of operations;
(xxiii) earthquakes and other natural disasters could disrupt our
operations and have a material adverse effect on our financial
condition and results of operations; and (xxiv) volatility in our
stock price.
Contact: |
Gregory C.
Thompson |
Richard J.
Vatinelle |
|
EVP and Chief Financial
Officer |
Vice President and
Treasurer |
|
GregThompson@KEMET.com |
InvestorRelations@KEMET.com |
|
954-595-5081 |
954-766-2819 |
KraneShares Trus (NYSE:KEM)
Historical Stock Chart
From Mar 2024 to Apr 2024
KraneShares Trus (NYSE:KEM)
Historical Stock Chart
From Apr 2023 to Apr 2024