KEMET Corp. recently announced that facility restructuring continues, and the company expects to take a charge to earnings related to severance expenses of approximately $6.5 million to $7 million during the current quarter, which ends December 31. The company has discussed in various earnings calls and prior investor presentations that it intends to continue its restructuring efforts within Europe, primarily within its Film and Electrolytic segment, with various facility closures. These closures are expected to begin during the company’s next fiscal year, which begins in April 2012. Construction will start in the near-term on a new facility in Pontecchio, Italy, which will allow the closure and consolidation of multiple manufacturing operations located in Italy. The company also said it will evaluate whether an impairment charge may be required related to the carrying value of the facilities to be affected by a closure in the future, and it is reviewing the value of certain manufacturing assets within Europe.
The company reportedly expects to achieve cost savings related to these actions of $3 million to $4 million in its fiscal year ending March 31, 2013, and an additional $7 million to $8 million in its fiscal year ending March 31, 2014. Beginning in the fiscal year ending March 31, 2015, the company reportedly expects the annual cost savings will be approximately $15 million to $18 million.
“There has been significant improvement in our Film and Electrolytic segment financial results over the past several quarters from our prior actions, but more is required to be competitive in the future,” said Per Loof, CEO. “We have received excellent cooperation from our local unions and government representatives to achieve a partnership of driving for success that we believe can provide a level of economic stability for our employees and profitability for the company.”
For more information, visit www.kemet.com