Kemet Shares Collapse; Default Danger Looms
Kemet (KEM) shares have lost more than half their value today after the company reported ugly financial results for its fiscal first quarter June 30, announced plans to cut 12 percent of its staff and warned that it faces a potential debt default.
For the quarter, Kemet posted revenue of $242.8 million, slightly below the Street consensus of $245.2 million. The bigger issue: The company recorded a loss of $187.3 million, or $2.33 a share. That includes an assortment of special charges, including a $152.6 million in impairment charges as the company reduced the carrying value of both its ceramic business group and its electrolytic business group. The company also took a $16.5 million hit for inventory write-downs and variances, a $4.1 million charge for equipment relocation and integration costs, and a $4.9 million charge for severance expenses.