KEMET Corp. has previewed results for the second fiscal quarter ended September 30, 2009. The company expects a revenue decrease of 26.2% vs. last year’s results at $173.3 million, and a sequential increase of 15.4% compared to the prior fiscal quarter ended June 30, 2009. The company reported a net loss of $93.1 million, or $(1.15) per share, for the second quarter compared to net loss of $85.1 million, or $(1.06) per share, for the same quarter last year and net income of $25.1 million, or $0.31 per share, for the prior quarter ended June 30, 2009.
Kamet’s second quarter results include an $81.1 million non-cash charge due to a mark-to-market adjustment for Platinum Closing Warrants. The accounting for this charge did not result in a change to net equity. On September 29, 2009, the Company borrowed $10.0 million from a Platinum working capital loan facility and fixed the exercise price of the Platinum warrants. This eliminates any ongoing requirements to mark-to-market the warrants after September 29, 2009. Second quarter results also include $1.3 million of restructuring charges primarily associated with reductions in force in the Film and Electrolytic Business.
Per Loof, Kamet’s Chief Executive Officer commented, “Significant actions we took a year ago have paid substantial dividends in generating a positive operating income this quarter, before special charges, slightly exceeding our break-even operating income revenue goals. We also continued to generate significant cash flow from operations this quarter that will allow us to optimize our market share during this time of increased demand.”
“While we do not see future quarter-over-quarter revenue increases similar to this quarter, our bookings remain strong and overall supply chain inventories remain in check. We expect increased demand to remain for the near term and we are cautiously optimistic about calendar year 2010,” continued Loof.
The table below offers reconciliation from GAAP net income (loss) to Non-GAAP adjusted net loss:
• $173.3 million in net sales for the second quarter of fiscal year 2010 vs. $150.2 million for the first quarter of fiscal year 2010 and $136.0 million for the fourth quarter of fiscal year 2009
• 14.4% gross margin as a percentage of net sales for the second quarter of fiscal year 2010 vs. 13.7% for the first quarter of fiscal year 2010
• $(0.07) adjusted net loss per share for the Second quarter Non-GAAP compared to $(0.14) for the first quarter of fiscal year 2010
• 16.8 million in cash flow from operations for the second quarter of 2010
Net income for the quarter and six month period ended September 30, 2008 included a reduction of $2.1 million and $4.1 million, respectively, due to a required retrospective change in accounting for convertible debt. Also, Kemet recorded $1.1 million and $3.4 million, respectively, in non-cash interest expense related to the adoption of FSP APB 14-1, primarily codified in FASB ASC 470, in the quarter and for the six month period ended September 30, 2009.
Kemet has also informed investors that starting January 1, 2010, the company will observe a quiet period during which the information provided in this news release and quarterly reports on Form 10-Q will no longer constitute Kemet’s current expectations. During the upcoming quiet period, this information should be considered historical. The quiet period will be extended until the company’s next quarterly earnings release is published