Kemet Corp., Greenville, SC, reported record sales and earnings for the fiscal third quarter ended December 31, 2000. Net sales for the quarter were $374.9 million, a 74% increase over the $215.1 million for the same quarter last year.
Net earnings were $97.4 million, or $1.10 per diluted share, compared with $18.2 million, or 22 cents per diluted share, for the same period in 1999.
"Kemet has achieved the sixth consecutive quarter of record sales and earnings, passing a major milestone by generating over $1.1 billion in revenue at net margins exceeding 25% for the nine months ended December 2000," stated David E. Maguire, chairman and chief executive of Kemet.
The recent slowdown in the electronics industry, however, has also affected the short-term financial picture for the manufacturer of solid tantalum and multilayer ceramic capacitors.
"Sequential revenue growth in the December quarter slowed to 3% as the industry-wide inventory correction began," said Maguire. "We expect, based on our most recent customer forecasts, that unit shipments in the March quarter will be down approximately 10% to 15% as the inventory correction works through the supply chain."
Revenues for the March quarter will be flat as compared to the December quarter, according to Maguire, as Kemet's product mix shifts to larger ceramic and tantalum capacitors and as partial material cost pass-throughs are implemented.
In a conference call, Maguire told analysts that the material cost pass-throughs, caused by shortages of tantalum and palladium, should ease in coming months as the company brings additional tantalum powder processing capacity online and as more ceramic capacitors convert from palladium to base metal electrodes.
"There's a grudging acceptance now on the part of customers accepting the material cost pass-throughs," said Maguire. He added that the cost pass-throughs should subside in the next six to nine months and capacitor prices will come down a bit.
Kemet expects capital expenditures for the 2002 fiscal year, which begins in April, to total between $150 and $200 million, said Ray Cash, chief financial officer for Kemet, during the conference call. While the figure is less than the $210 million in the 2001 fiscal year, Cash is hopeful that the company's planned expansion into aluminum capacitors will bring capital expenditures closer to $200 million.
The long-term outlook for Kemet looks good, the company said. "Overall tantalum and ceramic capacitor consumption remains on a strong, long-term growth trend of 23% over the last decade, and we expect shipments to return to this trend by mid-2001," said Maguire. "Barring a recession, we expect fiscal 2002 revenue growth to be in excess of 10% over fiscal 2001 revenues with earnings of at least $3 per share."