KEMET Corp. (NYSE:KEM) Q1 2019 Earnings Conference Call - Final Transcript

Jul 25, 2018 • 09:00 am ET


KEMET Corp. (NYSE:KEM) Q1 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen. My name is Lance, and I will be your operator for today's conference. At this time, I would like to welcome everyone to the KEMET's First Quarter Fiscal Year 2019 Earnings Conference Call. (Operator Instructions) I would like to introduce our host for today, Ms. Robin Blackwell. You may begin your conference.

Robin Blackwell

Thank you Lance, and good morning everyone. This is Robin Blackwell. Welcome to KEMET's conference call to discuss the financial results for the first quarter fiscal year 2019 which concluded on June 30, 2018.

Joining me today on the call is Per Loof, CEO and Bill Lowe, EVP and CFO. As a reminder to you, a presentation is available on the website, which will help you follow along in the financial portion of the discussion.

(Forward-Looking Cautionary Statements)

Now, I turn the call over to Per Loof.

Per Loof

Thank you, Robin and good morning everyone. We started the fiscal year strong with mixed shipments and orders exceeding expectations as well as some new capacity coming online. This is the 10th consecutive quarter of revenue growth. Quarter-over-quarter and our view looking into the next quarter is that we could see another 2% to 4% revenue growth for the September quarter over June.

As a result of this we have revised our full fiscal year revenue growth forecast over the last fiscal year to range over 11% to 13% up from 4% to 6%. We continue to believe that this is a market trend which has been further impacted by various actions taken by competitors resulting in even higher demand for our products. Global markets showed continued strength in all regions with solid performance in all segments. Global capacity constraints continue for many products types not just MLCCs and as a result, we're currently and increasingly involved in helping our customers manage potential line down situations.

Revenue for the quarter was $327.6 million up 3% from our March quarter and up 19.6% compared to Q1 last year. GAAP gross margin was strong at 28.9%, non-GAAP came in at 29.4% up 130 basis points from last quarter and up 220 basis points from a year ago. EPS improved strongly in the quarter as well. GAAP diluted EPS of $0.60 and non-GAAP diluted EPS of $0.55 up $0.11 compared to last quarter and up $0.22 from a year ago. Bill will go in a more detail, but all in a strong quarter and we firmly believe that Q2 will be our 11th quarter of consecutive growth.

July 6 was the effective date of the United States government impose tax on particular goods imported from China into the United States. Some of the electronic components which KEMET produces in China are on the list of goods effective. We have coordinated participation between the business groups sales, distribution, supply chain, logistics and IT in our Company. We have put systems in place to ensure compliance and these systems are consistent with the direction given by the Electronic Components Industry Association and