MANHASSET, N.Y. Kemet Corp. (Greenville, S.C.) reported a net loss of $16.7 million, before special charges, on sales of $106.0 million in its second 2005 fiscal quarter ended September, as the passives supplier announced it would reduce its workforce by 820 employees, or 10 percent.
Including charges, Kemet posted a loss of $7.5 million. By comparison, the company lost $1.9 million on sales of $122.4 million the previous quarter and $43.3 million on sales of $100.1 million a year ago.
Like other passive suppliers, Kemet's sales and earnings have slipped in recent months as inventories have bulged, prompting analysts to lower near-term earnings expectations.
"Over the course of the summer and continuing into the fall, Kemet has been negatively impacted by an inventory cycle in our industry, especially at our distribution customers which represent approximately one half of our revenue," said Jeffrey Graves, Kemet's chief executive, in a statement.
Graves added, "Based on the best information we have from customers, we do not believe this represents a prolonged slump in our industry, but the inventory correction has continued into the December 2004 quarter, which we anticipate will be flat in terms of revenue with the September 2004 quarter."
Kemet will take a one-time charge of $5.5 million in the December 2004 quarter for the employee reductions and expects to achieve annualized savings of $11.1 million.