KeyBanc Conference Boston June 2 2010

8/8/2019 KeyBanc Conference Boston June 2 2010

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KEMET

Corporation

KeyBanc ConferenceBoston, MA

June 2, 2010

Investor Presentation


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Company

Overview

Per-Olof Lf

Chief Executive Officer


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3

Forward Looking Statements

During the course of this presentation, we may make forward-looking statements or provide forward-looking information. All statements that address expectations or projections about the future are forward-looking statements. Some of these statements include words such as expects, anticipates, believes,

estimates, plans, intends, projects, and indicates. Although they reflect our current expectations,

these statements are not guarantees of future performance, but involve a number of risks, uncertainties,and assumptions which are difficult to predict. Some of the factors that may cause actual outcomes andresults to differ materially from those expressed in, or implied by, the forward-looking statements include,

but are not necessarily limited to economic conditions, competitive pressures, raw material costs and theability to retain key employees. We urge you to review KEMET's SEC filings, particularly its latest annualreport on Form 10-K, which was amended by a Form 8-K filed on November 5, 2009 to retrospectivelyadjust for the required adoption of FSP APB 14-1 effective April 1, 2009 relating to the accounting forcertain convertible debt, and for a discussion of some of the factors which could cause actual results todiffer materially. The Company does not undertake to update any forward-looking statements as a resultof future developments or new information.

Non-GAAP Financial Measures

Included in this presentation are certain non-GAAP financial measures designed to complement thefinancial information presented in accordance with generally accepted accounting principles in the UnitedStates of America because management believes such measures are useful to investors.


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Company Overview

4

KEMET Laboratories was founded by Union Carbide in 1919

Headquartered in Greenville, South Carolina since 1963

Global manufacturer of tantalum, ceramic, film, aluminum, electrolytic & paper capacitors

KEMET shipped approximately 31 billion capacitors in FYE March 31, 2010 (FY2010)

21 manufacturing facilities: 4 in Mexico, 4 in China, 11 in Europe (in 7 countries), 1 in the UnitedStates, 1 in Indonesia

10,350 employees worldwide (March 31, 2010)

USA: 500 Mexico: 5,250 Asia: 2,500 Europe: 2,100

Global sales force covering the Americas, EMEA and Asia

KEMET Revenue by Business(1) KEMET Revenue by End Market (1)

(1) FY2010 data.


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What is a Capacitor?

Essential passive electronic componentthat stores, filters, and regulateselectrical energy

Required in anything that has an electriccurrent (from iPods to giant windmills)

Comes in various shapes and sizes witha myriad of technical specifications

May be numerous in some devices (e.g.3,000+ in some flat panel TVs, 700+ insome smartphones)

5


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Business Overview

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KEMET operates in three distinct businesses: Tantalum, Ceramic and Film & Electrolytic

The Tantalum and DC Film businesses are both #1 globally

The Ceramic business is #2 in North America and top ten worldwide

Film & Electrolytic is currently undergoing restructuring and is expected to be an Adjusted EBITDA contributor in FY2011

Tantalum Business Ceramic Business Film & Electrolytic Business

Market Size ~ $1.5 billion globally ~ $6+ billion globally ~ $6+ billion globally

Market Share Approximate 23% share Largest tantalum capacitor

manufacturer in the world

Approximate 3% share Second largest ceramic capacitor

manufacturer in North Americaand among top ten globally

Approximate 4% share (15 % inDC Film)

Global leader of Film with regionalplayers competing with morelimited product offerings

End Markets Computer, telecom, consumer,aerospace & defense, automotiveand general industrials

Computer, telecom, aerospace &defense, automotive and generalindustries

General industrial, automotive,consumer and computer

Competitors Panasonic/Sanyo, AVX, Vishayand NEC-Tokin Samsung, Murata, Taiyo Yuden,and several other Asiancompanies

EPCOS, Panasonic/Sanyo,Vishay and several Asian regionalcompanies

RecentFinancials

(9 Mo. 12/31/09)

Revenue and Adjusted EBITDA of$248mm and $43mm, respectively

Revenue and Adjusted EBITDA of$120mm and $22mm, respectively

Revenue and Adjusted EBITDA of$155mm and ($20mm),respectively


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Key Market Trends Driving Growthin Capacitors

Growth of high frequency applications with faster microprocessors

Miniaturization and portability of consumer electronics

Global appetite for connectivity and resulting bandwidth requirements

Enhanced functionality and complexity of new products

Upgrade of global energy networks

Drive towards development of alternative energy solutions

Demand for higher capacitance values driving growth in tantalum and aluminum polymer

Growing middle class in emerging economies

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Trends Across Key End Markets Offer Compelling Growth Opportunity


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Broad and Diversified Product Offering

KEMET offers the most complete line of primary capacitor types, across the full spectrum of dielectric materials andtechnologies including tantalum, ceramic, solid and electrolytic aluminum, film and paper

As a result, the Company can satisfy virtually all of its customers capacitance needs, strengthening its position as their

supplier of choice

KEMET sells products into a wide range of different end markets, including industrial, telecommunications, automotive,consumer, defense and healthcare sectors, across the globe

No single end market accounted for more than 30%, and no single end user accounted for more than 3% of revenue inFY2010

9

Revenue by Business(1) Revenue by End Markets(1) Revenue by Geography(1)

(1) FY2010 data.


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FY10 Segment Performance

$18

$13

$8

$21

$3

$4

$12

$0

$5

$10

$15

$20

$25

APR MAY JUN JUL AUG SEP OCT NOV DEC JAN

2010

FEB MAR

M

illions

TELECOM

COMPUTERS

CONSUMER

INDUSTRIAL

MEDICAL

MILITARY

AUTOMOTIVE

The rebound was consistent and across all markets

10


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Leading Market Positionsand Operating Scale

#1 Tantalum capacitor manufacturer globally, with 23% market share

#1 DC Film capacitor manufacturer globally, with 15% market share

#2 Ceramic capacitor manufacturer in North America and top 10 globally

Growing exposure to higher growth, higher margin, specialty segments of the market

Worldwide sales and distribution network

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Global Reach andGeographic Diversification

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Strategically positioned to be in close proximity to the Companys diverse and expansive

customer baseThe Americas EMEA Asia

Manufacturing FacilitySales Off ice Distribut ion Hub

Shenzen, ChinaShenzen, ChinaShenzen, ChinaShenzen, ChinaShenzen, ChinaShenzen, ChinaShenzen, ChinaShenzen, ChinaShenzen, China

Taipei, TaiwanTaipei, TaiwanTaipei, TaiwanTaipei, TaiwanTaipei, TaiwanTaipei, TaiwanTaipei, TaiwanTaipei, TaiwanTaipei, Taiwan

Shanghai, ChinaShanghai, ChinaShanghai, ChinaShanghai, ChinaShanghai, ChinaShanghai, ChinaShanghai, ChinaShanghai, ChinaShanghai, China

Beijing, ChinaBeijing, ChinaBeijing, ChinaBeijing, ChinaBeijing, ChinaBeijing, ChinaBeijing, ChinaBeijing, ChinaBeijing, China

Penang, MalaysiaPenang, MalaysiaPenang, MalaysiaPenang, MalaysiaPenang, MalaysiaPenang, MalaysiaPenang, MalaysiaPenang, MalaysiaPenang, Malaysia

Bangalore, IndiaBangalore, IndiaBangalore, IndiaBangalore, IndiaBangalore, IndiaBangalore, IndiaBangalore, IndiaBangalore, IndiaBangalore, IndiaSingaporeSingaporeSingaporeSingaporeSingaporeSingaporeSingaporeSingaporeSingapore

Hong Kong, ChinaHong Kong, ChinaHong Kong, ChinaHong Kong, ChinaHong Kong, ChinaHong Kong, ChinaHong Kong, ChinaHong Kong, ChinaHong Kong, China

Suzhou, ChinaSuzhou, ChinaSuzhou, ChinaSuzhou, ChinaSuzhou, ChinaSuzhou, ChinaSuzhou, ChinaSuzhou, ChinaSuzhou, China

Anting, C hinaAnting, C hinaAnting, C hinaAnting, ChinaAnting, ChinaAnting, C hinaAnting, C hinaAnting, C hinaAnting, ChinaNantong, ChinaNantong, ChinaNantong, ChinaNantong, ChinaNantong, ChinaNantong, ChinaNantong, ChinaNantong, ChinaNantong, China

Batam, IndonesiaBatam, IndonesiaBatam, IndonesiaBatam, IndonesiaBatam, IndonesiaBatam, IndonesiaBatam, IndonesiaBatam, IndonesiaBatam, Indonesia

Bishop's Stortford, UKBishop's Stortford, UKBishop's Stortford, UKBishop's Stortford, UKBishop's Stortford, UKBishop's Stortford, UKBishop's Stortford, UKBishop's Stortford, UKBishop's Stortford, UK

Kwidzyn, PolandKwidzyn, PolandKwidzyn, PolandKwidzyn, PolandKwidzyn, PolandKwidzyn, PolandKwidzyn, PolandKwidzyn, PolandKwidzyn, Poland

Espoo, FinlandEspoo, FinlandEspoo, FinlandEspoo, FinlandEspoo, FinlandEspoo, FinlandEspoo, FinlandEspoo, FinlandEspoo, Finland

Rainhill, UKRainhill, UKRainhill, UKRainhill, UKRainhill, UKRainhill, UKRainhill, UKRainhill, UKRainhill, UK

Coatbridge, UKCoatbridge, UKCoatbridge, UKCoatbridge, UKCoatbridge, UKCoatbridge, UKCoatbridge, UKCoatbridge, UKCoatbridge, UK

Paris, FranceParis, FranceParis, FranceParis, FranceParis, FranceParis, FranceParis, FranceParis, FranceParis, France Landsberg, GermanyLandsberg, GermanyLandsberg, GermanyLandsberg, GermanyLandsberg, GermanyLandsberg, GermanyLandsberg, GermanyLandsberg, GermanyLandsberg, Germany

Dortmund, GermanyDortmund, GermanyDortmund, GermanyDortmund, GermanyDortmund, GermanyDortmund, GermanyDortmund, GermanyDortmund, GermanyDortmund, Germany

Geneva, SwitzerlandGeneva, SwitzerlandGeneva, SwitzerlandGeneva, SwitzerlandGeneva, SwitzerlandGeneva, SwitzerlandGeneva, SwitzerlandGeneva, SwitzerlandGeneva, Switzerland

Milan, ItalyMilan, ItalyMilan, ItalyMilan, ItalyMilan, ItalyMilan, ItalyMilan, ItalyMilan, ItalyMilan, Italy

Madrid, SpainMadrid, SpainMadrid, SpainMadrid, SpainMadrid, SpainMadrid, SpainMadrid, SpainMadrid, SpainMadrid, Spain

Rome, ItalyRome, ItalyRome, ItalyRome, ItalyRome, ItalyRome, ItalyRome, ItalyRome, ItalyRome, Italy

Amsterdam, NetherlandsAmsterdam, NetherlandsAmsterdam, NetherlandsAmsterdam, NetherlandsAmsterdam, NetherlandsAmsterdam, NetherlandsAmsterdam, NetherlandsAmsterdam, NetherlandsAmsterdam, Netherlands

Bologna, ItalyBologna, ItalyBologna, ItalyBologna, ItalyBologna, ItalyBologna, ItalyBologna, ItalyBologna, ItalyBologna, Italy

Granna, SwedenGranna, SwedenGranna, SwedenGranna, SwedenGranna, SwedenGranna, SwedenGranna, SwedenGranna, SwedenGranna, Sweden

Suomussalmi, FinlandSuomussalmi, FinlandSuomussalmi, FinlandSuomussalmi, FinlandSuomussalmi, FinlandSuomussalmi, FinlandSuomussalmi, FinlandSuomussalmi, FinlandSuomussalmi, Finland

Weymouth, UKWeymouth, UKWeymouth, UKWeymouth, UKWeymouth, UKWeymouth, UKWeymouth, UKWeymouth, UKWeymouth, UKTowcester, UKTowcester, UKTowcester, UKTowcester, UKTowcester, UKTowcester, UKTowcester, UKTowcester, UKNorthhampton, UK

Evora, PortugalEvora, PortugalEvora, PortugalEvora, PortugalEvora, PortugalEvora, PortugalEvora, PortugalEvora, PortugalEvora, Portugal

Vergato, ItalyVergato, ItalyVergato, ItalyVergato, ItalyVergato, ItalyVergato, ItalyVergato, ItalyVergato, ItalyVergato, Italy

Monghidoro, ItalyMonghidoro, ItalyMonghidoro, ItalyMonghidoro, ItalyMonghidoro, ItalyMonghidoro, ItalyMonghidoro, ItalyMonghidoro, ItalyMonghidoro, Italy

Sasso Marconi, ItalySasso Marconi, ItalySasso Marconi, ItalySasso Marconi, ItalySasso Marconi, ItalySasso Marconi, ItalySasso Marconi, ItalySasso Marconi, ItalySasso Marconi, Italy

Kyustendil, BulgariaKyustendil, BulgariaKyustendil, BulgariaKyustendil, BulgariaKyustendil, BulgariaKyustendil, BulgariaKyustendil, BulgariaKyustendil, BulgariaKyustendil, Bulgaria

Farjestaden, SwedenFarjestaden, SwedenFarjestaden, SwedenFarjestaden, SwedenFarjestaden, SwedenFarjestaden, SwedenFarjestaden, SwedenFarjestaden, SwedenFarjestaden, Sweden

_

Wilmington, MAWilmington, MAWilmington, MAWilmington, MAWilmington, MAWilmington, MAWilmington, MAWilmington, MAWilmington, MA

Toronto, CanadaToronto, CanadaToronto, CanadaToronto, CanadaToronto, CanadaToronto, CanadaToronto, CanadaToronto, CanadaToronto, CanadaCarmel, INCarmel, INCarmel, INCarmel, INCarmel, INCarmel, INCarmel, INCarmel, INCarmel, IN

West Chester, PAWest Chester, PAWest Chester, PAWest Chester, PAWest Chester, PAWest Chester, PAWest Chester, PAWest Chester, PAWest Chester, PA

Schaumburg, ILSchaumburg, ILSchaumburg, ILSchaumburg, ILSchaumburg, ILSchaumburg, ILSchaumburg, ILSchaumburg, ILSchaumburg, IL

Milpitas, CAMilpitas, CAMilpitas, CAMilpitas, CAMilpitas, CAMilpitas, CAMilpitas, CAMilpitas, CAMilpitas, CA

Lake Mary, FLLake Mary, FLLake Mary, FLLake Mary, FLLake Mary, FLLake Mary, FLLake Mary, FLLake Mary, FLLake Mary, FL

Fort Lauderdale, FLFort Lauderdale, FLFort Lauderdale, FLFort Lauderdale, FLFort Lauderdale, FLFort Lauderdale, FLFort Lauderdale, FLFort Lauderdale, FLFort Lauderdale, FL

Sao Paulo, BrazilSao Paulo, BrazilSao Paulo, BrazilSao Paulo, BrazilSao Paulo, BrazilSao Paulo, BrazilSao Paulo, BrazilSao Paulo, BrazilSao Paulo, Brazil

Atlanta, GAAtlanta, GAAtlanta, GAAtlanta, GAAtlanta, GAAtlanta, GAAtlanta, GAAtlanta, GAAtlanta, GA

Tijuana, MexicoTijuana, MexicoTijuana, MexicoTijuana, MexicoTijuana, MexicoTijuana, MexicoTijuana, MexicoTijuana, MexicoTijuana, Mexico

Guadalajara, MexicoGuadalajara, MexicoGuadalajara, MexicoGuadalajara, MexicoGuadalajara, MexicoGuadalajara, MexicoGuadalajara, MexicoGuadalajara, MexicoGuadalajara, Mexico

Brownsville, TXBrownsville, TXBrownsville, TXBrownsville, TXBrownsville, TXBrownsville, TXBrownsville, TXBrownsville, TXBrownsville, TX

Simpsonville, SCSimpsonville, SCSimpsonville, SCSimpsonville, SCSimpsonville, SCSimpsonville, SCSimpsonville, SCSimpsonville, SCSimpsonville, SC

Monterrey, MexicoMonterrey, MexicoMonterrey, MexicoMonterrey, MexicoMonterrey, MexicoMonterrey, MexicoMonterrey, MexicoMonterrey, MexicoMonterrey, Mexico

Ciudad Victoria, MexicoCiudad Victoria, MexicoCiudad Victoria, MexicoCiudad Victoria, MexicoCiudad Victoria, MexicoCiudad Victoria, MexicoCiudad Victoria, MexicoCiudad Victoria, MexicoCiudad Victoria, Mexico

Matamoros, MexicoMatamoros, MexicoMatamoros, MexicoMatamoros, MexicoMatamoros, MexicoMatamoros, MexicoMatamoros, MexicoMatamoros, MexicoMatamoros, Mexico


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Robust and Growing Presence in SpecialtyProducts

Alternative Energy

Extreme Environment (e.g. High Temp, Vibration)

Energy Exploration (e.g. Gas, Oil, Geothermal)

Specialty Automotive (e.g. Under-Hood, Safety,Electric Drive VehicleEDV)

Lighting

Medical Military/Aerospace

Telecom Infrastructure

Power Supplies

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Targeted Specialty Markets Specialty Products Attributes

High Reliability (Long-life)

Low ESR/ESL (Lower Energy Consumption andHigher Efficiency)

Resistant to Environmental Stimuli (Heat,Vibration, Fluids)

Non-Standard Configurations (Array, Low Profile,Case Size/Footprint)

High Voltage

High Temperature (>125C)

High Frequency (>1 Ghz)

KEMET is focusing on specialty markets as its primary areas of growth given the higher margin

profile, recurring revenue potential and increased end market visibility

In recent years, KEMET has put more focus on growing market share in the specialty markets,including: alternative energy, extreme environments, medical, and military/aerospace


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Specialty Markets are Key to Growth

Specialty products represent higher margin business and also require a longer product design/life cyclewith greater servicing needs

In August 2009, KEMET was selected as one of thirty companies to receive a grant from theDepartment of Energy

The $15.1 million award will enable KEMET to produce film and electrolytic capacitors within theU.S. to support alternative energy products and emerging green technologies, such as hybridelectric drive vehicles

Producing these parts in the United States will allow KEMET to effectively compete in the growingalternative energy market in the Americas

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KEMET is a leader in the global capacitance space and one of the

largest specialty capacitor technologies companies


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Development Activities to Sustain GrowthWell into the Future

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The breadth and depth of KEMETs capacitance offering uniquely positions KEMET to capitalize

on critical industry growth trends such as Alternative Energy and Hybrid Vehicle technologies

KEMET is actively involved with 13 distinct hybrid electric vehicle programs with such companies asBosch, Continental, Delphi, TRW and Visteon, with 15 more programs in the developing stages

KEMETs F&E capacitors are already designed-in and used in equipment manufactured byConverteam, Vestas, Gamesa, Emerson and ABB in windmill installations around the globe withongoing qualification at GE

Solar power conversion is another application where KEMET is a key supplier to Siemens, Inge Team,SolarMax, Kostal and PowerOne

Power Factor Correction is key to the efficient use of electricity for industry. KEMET capacitors are amainstay with industry leaders such as Vacon and Danfoss


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Cost Reduction Initiatives

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Completed tantalum, ceramic and corporateheadcount optimization initiative

Successfully renegotiated unfavorablesourcing contracts

Fixed cost restructuring in relation torationalization of low margin products intantalum and ceramics

Seamlessly relocated tantalum

manufacturing to Mexico and Suzhou Integration of Evox Rifa and Arcotronics

Completed Cost Reduction Initiatives In-Process Cost Reduction Initiatives

Continued relocation / combination ofmanufacturing facilities (e.g. F&E) to

improve cost structure and distribution

Emphasis on further yield improvements

Gradual deployment of more efficientinternal systems (e.g. Oracle)

Continued emphasis on operationalexcellence via lean Six Sigma initiatives

New manufacturing technologydevelopment

Between August 2008 and January 2009, KEMET completed numerous cost reduction initiativeswhich have resulted in meaningful savings

KEMET continues to significantly improve its low-cost production base through numerous costreduction initiatives and process improvements


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Lean Activities Coupled with Restructuringto Support Bottom Line Growth

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Lean Six-Sigma is at the core of the reduction in working capital as well as manufacturing productivityand cost improvements

This lean focus supports KEMETs global facilities moves (US-Mexico / Mexico-China, US-China,Europe-Mexico), without disruption to customer operations

This collective knowledge and experience is critical as KEMET moves high volume F&E equipmentfrom Europe to Mexico and Asia, to production ready facilities, allowing KEMET to serve local marketsin a cost effective manner without interruption

KEMETs local administrative and HR capabilities support these moves through the efficient hiring and

training practices that have evolved based on experience

KEMET has a proven track record in reorganizing businesses, moving operations and developing lean

operations to maximize manufacturing efficiency


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Financial

Overview

Bill LoweEVP and CFO


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Adjusted Net Income

Mar-10 Dec-09 Mar-09

Net income (loss) 317$ (1,779)$ 2,382$

Adjustments:

Amortization included in interest expense 3,806 3,703 2,424

Restructuring charges 6,609 1,322 1,295

Write down of long-lived assets - 656 2,469

(Gain)/loss on disposal of assets (1,501) 240 1,731Curtailment gains on benefit plan - - (30,835)

Acquisitions integration costs - - 543

Tax impact of adjustments (462) (143) (141)

Total adjustments 8,452 5,778 (22,514)

Adjusted net income (loss) 8,769$ 3,999$ (20,132)$

Adjusted EPS basic 0.11$ 0.05$ (0.24)$

Adjusted EPS diluted 0.06$ 0.03$ (0.24)$


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Strong Operating Trends

GM % 11.9% 12.7% -1.2% 13.6% 14.4% 18.2% 20.2%

($ in millions)


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Adjusted EBITDA

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Balance Sheet Highlights

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(Amounts in millions, except days in

receivables/payables.)

Cash and Cash Equivalents

Restricted Cash

Capital Expenditures

Short-Term Debt

Long-Term Debt

Debt Discount

Total Debt

Equity

Net Working Capital (1)

Days in Receivable (2)

Days in Payables (2) 43 38

213.5$ (3.1) 220.1$

61 63

284.3$ 291.7$

(34.2) (37.1)

249.5$ (8.8) 257.1$

17.9$ 35.0$

265.8 259.2

5.4$ 3.9$

2.2$ 3.9$

2010 Impact 200979.2$ 65.0$

Fourth Quarter

March Exchange Rate December

(1) Includes only Receivables, Inventories, and Accounts Payable

(2) DSO and DPO are calculated by annualizing the current quarters net sales and cost of sales


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Strong and Growing Cash Position

Cash balances include restricted cash.

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Recent

Developments &Conclusion


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Bond offering finalized and funded on Wednesday, May 5, 2010. Wenow have in place the new 10.5% Senior Notes in the principal amount of$230 million which will mature on May 1, 2018

The principal balance is due at maturity. During the term of this loan, we

will be making semi-annual interest payments beginning November 2010

The proceeds from these new bonds have been used to prepay all thedebt previously owed to Platinum Equity (principal of $57.8 million),UniCredit Corporate Banking (principal of $ 104.7 million) and Vishay

Intertechnology (principal of $15.0 million)

The new 10.5% Senior Notes represent a major milestone in KEMETsfinancial evolution

Recent Developments

26


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Recent Developments

May 18, 2010, completion of KEMETs tender offer for its 2.25%Convertible Senior Notes due 2026

KEMET accepted for purchase $40.5 million in principal amount ofoutstanding Notes that were tendered

$57.5 million in principal amount of Notes, approximately 71 percentof the principal amount of the outstanding Notes were tendered

The successful tender offer and the Bond offering greatly improveKEMETs balance sheet by eliminating debt and improve cash flow byreducing debt payments

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Recent Developments Debt Components($ in millions)

Debt Outstanding after Tender Offer and New Bond Issue

Description Rate

Long-Term

Amount

Short-Term

Amount Total

Convertible Notes (put date November 2011) 2.25% 40.6$ -$ 40.6$

New Senior Notes 10.50% 230.0 - 230.0

Miscellaneous Foreign Subsidiary Debt various 7.1 6.0 13.1

277.7$ 6.0$ 283.7$


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Recent Developments

We have consolidated our Ceramic and Film and Electrolytic BusinessGroups under the leadership of Chuck Meeks

This will allow us to capitalize on the Ceramic teams proven trackrecord of consistently demonstrated restructuring capabilities

We are ready to begin realignment the Film and Electrolytic Business toachieve profitability. We have reached an agreement with three laborunions in Italy and with the regional government in Emilia Romagna,Italy, to proceed with our planned restructuring process

The realignment will allow us to focus on producing specialty products inEurope and the U.S. and shift standard and commodity production tolower cost regions

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KEMET has successfully restructured andrepositioned its Tantalum and Ceramic businesses

Total debt has decreased by $129 million fromFY08 to Q4 FY10

F&E business realignment has been reinitiated.Expected costs of $35-$40M.

Forecasted improvement in underlyingAdjusted EBITDA for F&E is projected to bea $10M improvement in FY2011 and $42Mimprovement in FY 2012 over FY2010respectively. Beginning in Q1FY2012 runrate expected of $6M positive EBITDA perquarter over FY2010 average rate ofnegative ($6M) per quarter resulting in a $48

million change.

Ongoing expansion within specialty andemerging markets will allow KEMET tocontinue to further improve margins andincrease pricing

(1) Shown as Fiscal Quarters

Strong Operating Momentum

$150.2

$173.3

$199.9

$213.0

$9.9

$13.5

$22.2

$25.4

$0

$5

$10

$15

$20

$25

$30

$0

$50

$100

$150

$200

$250

Q1 FY10 Q2 FY10 Q3 FY10 Q FY10

Revenue and Adjusted EBITDA (1)

Revenue Adjusted EBITDA


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Appendix


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Adjusted EBITDA Reconciliation to Net Income

33

(1) Certain prior periods have been adjusted to conform with current period presentation which is determined by management.

(Amounts in thousands)Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 FY10

Net income (loss) $ 25,090 $ (93,075) $ (1,779) $ 317 $ (69,447)

Income tax expense (benefit) 1,030 1,712 (93) 2,387 5,036

Interest expense, net 5,788 6,389 7,420 6,223 25,820

Depreciation and amortization expense 12,264 13,288 13,701 13,391 52,644

Share-based compensation expense 241 1,387 160 77 1,865

Increase in value of warrant - 81,088 - - 81,088Write down of long-lived assets - - 656 - 656

(Gain)/loss on disposal of assets 206 52 240 (1,501) (1,003)

Gain on early extinguishment of debt (38,921) - - - (38,921)

Foreign exchange transaction (gain)/loss 4,221 1,419 523 (2,057) 4,106

Restructuring charges - 1,267 1,322 6,609 9,198

Adjusted EBITDA (1) $ 9,919 $ 13,527 $ 22,150 $ 25,446 $ 71,042


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34


Included in this presentation are certain non-GAAP financial measures designed to complement the financial

information presented in accordance with generally accepted accounting principles in the United States of America because

management believes such measures are useful to investors.

Adjusted operating income (loss)

Adjusted operating income (loss) represents operating income (loss), excluding adjustments which are outlined in

the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted operating income (loss) to evaluate

the Companys operating performance and believes that Adjusted operating income (loss) is useful to investors because it provides

a supplemental way to possibly better understand the underlying operating performance of the Company. Adjusted operatingincome (loss) should not be considered as an alternative to operating income or any other performance measure derived in

accordance with GAAP.

Adjusted net income (loss) and Adjusted EPS

Adjusted net income (loss) and Adjusted EPS represent net income (loss) and EPS, excluding adjustments which are

more specifically outlined in the quantitative reconciliation provided earlier in this presentation. Management uses Adjusted net

income (loss) and Adjusted EPS to evaluate the Company's operating performance and believes that Adjusted net income (loss) and

Adjusted EPS are useful to investors because they provide a supplemental way to possibly better understand the underlyingoperating performance of the Company. Adjusted net income (loss) and Adjusted EPS should not be considered as an alternative to

net income, operating income or any other performance measures derived in accordance with GAAP.


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Non-GAAP Financial MeasuresContinued

35

Adjusted EBITDA

Adjusted EBITDA represents net income (loss) before income tax expense, interest expense, and depreciation and

amortization expense, adjusted to exclude restructuring charges, impairment write-downs, share-based compensation expense,

gain/loss on the disposal of assets, gain on the early extinguishment of debt, increase in fair value of warrant, and foreign exchange

transaction gain/loss. We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We

also present Adjusted EBITDA because we believe such measure is frequently used by securities analysts, investors and other

interested parties in the evaluation of companies in our industry.

We believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash

expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense

because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. Theother items excluded from Adjusted EBITDA are excluded in order to better reflect our continuing operations.

In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the

adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future

results will be unaffected by these types of adjustments. Adjusted EBITDA is not a measurement of our financial performance

under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures

derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.


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Non-GAAP Financial MeasuresContinued

36

Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute

for analysis of our results as reported under GAAP. Some of these limitations are:

it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;

it does not reflect changes in, or cash requirements for, our working capital needs;

it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment

on our debt;

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to

be replaced in the future, and our Adjusted EBITDA measure does not reflect any cash requirements for such replacements;

it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;

it does not reflect the impact of earnings or charges resulting from matters we consider not be indicative of our ongoing

operations;

it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and

other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparativemeasure.

Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash

available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our

obligations. You should compensate for these limitations by relying primarily on our GAAP results and using Adjusted

EBITDA only supplementally.

KeyBanc Conference Boston June 2 2010

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Transcript of KeyBanc Conference Boston June 2 2010