LONDON Capacitor-maker Kemet Corp. (Greenville, South Carolina) is to reduce its workforce by around 12 percent or 640 employees and accrue a severance expense of approximately $20 million, primarily in the quarter ended September 2008.
Approximately 200 employees will be affected in the company's U.S. operations, with the balance at various facilities within Europe, Mexico and Asia. The company expects to reduce its support costs by approximately $24 million in the remainder of the current fiscal year (approx. $36 million on a full-year basis).
The company's preliminary results for the first quarter ended June 30, 2008 saw net sales of $242.8 million, which is a 32.6 percent increase over the same quarter last year and 0.7 percent higher than the prior quarter. The net loss was $187.3 million for the current quarter, compared to a net loss of $20.5 million for the prior quarter and n a profit of $7.0 million for the same quarter last year.
“The financial results for this quarter are below our expectations and are disappointing. Revenue increased slightly this quarter over our last quarter, but rising energy costs, pricing pressure in our Asian markets, and general weakening economic conditions set up a difficult environment to take advantage of the positive revenue increase,” said Per Loof, Kemet chief executive officer.
The company has set up a medium-term credit facility of €95.0 million (about $148million) with UniCredit Corporate Banking SpA, a financial institution headquartered in Italy. It will repay the principal amount in equal, semi-annual installments during the six-year term and the facility is to refinance two existing short-term credit facilities with UniCredit totaling €96.8 million and currently scheduled to mature in December 2008 and April 2009.