AVX Corporation Announces Preliminary Fourth Quarter and Fiscal Year Results

Category:

Tuesday, April 26, 2016 8:30 am EDT

Dateline:

FOUNTAIN INN, S.C.

Public Company Information:

NYSE:
AVX

FOUNTAIN INN, S.C.--(BUSINESS WIRE)--AVX Corporation (NYSE: AVX) today reported preliminary unaudited results for the fourth quarter and fiscal year ended March 31, 2016.

Chief Executive Officer and President, John Sarvis, stated, “We completed the fourth quarter of our fiscal year with net sales of $303.6 million and gross profit of $74.1 million, or 24.4%, reflecting solid operating performance in a marginally improving global economy. These results continue to reflect our focus on value added products for our customers. We continue to be optimistic in this challenging market. This optimism was bolstered by a modest build in our order backlog during the quarter. Furthermore, we expect that the continuing evolution of new electronic devices necessary in today’s digital world will provide growth opportunities in the coming fiscal year as our customers introduce new products.”

For the quarter ended March 31, 2016, net sales were $303.6 million compared to net sales of $315.5 million for the same quarter last year. The sales decline from the three month period ended March 31, 2015 is primarily due to generally weaker global economic conditions, our customers’ cautious inventory management programs and a reduction in sales of Kyocera Resale Connector products in the Asian region. Effective April 1, 2015, Kyocera began selling such Kyocera manufactured connectors in Asia using Kyocera’s sales force rather than having AVX resell such products in that region, which negatively impacted our sales by $6.6 million when compared to the same quarter last year.

On a U.S. GAAP basis, unaudited results include net income for the current quarter of $32.7 million, or $0.19 per diluted share, compared to net income of $101.5 million, or $0.60 per diluted share, for the quarter ended March 31, 2015. Non-GAAP net income (excluding special charges and net discrete income tax benefits) was $32.0 million, or $0.19 per diluted share, for the quarter ended March 31, 2016 compared to non-GAAP net income of $34.4 million, or $0.20 per diluted share, for the quarter ended March 31, 2015. During the current quarter, pre-tax special charges consisted of a $1.3 million charge ($0.8 million after-tax) related to a new environmental remediation demand related to a legacy environmental issue and a $0.4 million charge ($0.3 million after-tax) related to a recent jury finding with respect to an intellectual property lawsuit. Net income for the quarter also included a total of $1.7 million of favorable discrete income tax items. Net income for the quarter ended March 31, 2015 included a total of $67.2 million of favorable net discrete income tax items.

For the fiscal year ended March 31, 2016, net sales were $1,195.5 million compared to net sales of $1,353.2 million for the fiscal year ended March 31, 2015. The sales decline for the fiscal year ended March 31, 2016, is due to weaker global economic conditions and the negative impact on reported sales resulting from the strength of the U.S. Dollar, as well as a $46.4 million reduction in sales of Kyocera Resale Connector products in the Asian region as discussed above.

On a U.S. GAAP basis, unaudited results include net income for the fiscal year ended March 31, 2016 of $101.5 million, or $0.60 per diluted share, compared to net income of $225.9 million, or $1.34 per diluted share, for the fiscal year ended March 31, 2015. Non-GAAP net income (excluding special charges and net discrete income tax benefits) was $126.1 million, or $0.75 per diluted share, for the fiscal year ended March 31, 2016 compared to non-GAAP net income of $155.5 million, or $0.92 per diluted share, for the fiscal year ended March 31, 2015. For the fiscal year ended March 31, 2016, special charges consisted of $45.3 million in pre-tax charges ($29.0 million after-tax) related to intellectual property lawsuits and environmental remediation. Results for the fiscal year ended March 31, 2016 also included a total $4.4 million of favorable net discrete income tax items. Results for the fiscal year ended March 31, 2015 included a total $70.3 million of favorable net discrete income tax items.

AVX CORPORATION

Consolidated Condensed Statements of Income

(unaudited)

(in thousands, except per share data)

     
Three Months Ended Twelve Months Ended
March 31, March 31,
2015 2016 2015 2016
Net sales $ 315,547 $ 303,605 $ 1,353,228 $ 1,195,529
Cost of sales   238,605   229,529   1,024,659   906,459
Gross profit 76,942 74,076 328,569 289,070
Selling, general & admin. expense 30,272 32,172 115,820 119,768
Legal and environmental charges   -   1,668 -   45,318
Profit from operations 46,670 40,236 212,749 123,984
Other income, net   2,250   3,076 5,850   8,168
Income before income taxes 48,920 43,312 218,599 132,152
Provision (benefit) for taxes   (52,606)   10,647   (7,272)   30,617
Net income $ 101,526 $ 32,665 $ 225,871 $ 101,535
-
Basic income per share $ 0.60 $ 0.19 $ 1.34 $ 0.61
Diluted income per share $ 0.60 $ 0.19 $ 1.34 $ 0.60
 
Weighted average common shares outstanding: -
Basic 168,245 167,535 168,148 167,797
Diluted 168,490 167,605 168,402 167,961

NOTES

Sales in our Asian region for the quarter and fiscal year ended March 31, 2015 included $6.6 million and $47.5 million, respectively, of sales of Kyocera Resale Connector products compared to sales of $0.0 million and $1.1 million for the quarter and fiscal year ended March 31, 2016, respectively. As previously disclosed, effective April 1, 2015, Kyocera began selling such Kyocera manufactured connectors in Asia using Kyocera’s sales force rather than having AVX resell such products in that region.

Results for the quarter and fiscal year ended March 31, 2016 include $1.7 million and $4.4 million, respectively, of net one-time income tax benefits primarily attributable to the reduction of reserves related to the expiration of statutory periods with regard to certain income tax positions.

Results for the quarter and fiscal year ended March 31, 2015 include $67.2 million and $70.3 million, respectively, of net one-time income tax benefits primarily attributable to the reversal of valuation allowances related to the future utilization of net operating loss carryforwards (“NOL’s”) in our European operations and tax benefits related to the restructuring of foreign subsidiaries in the fourth quarter.

AVX CORPORATION

GAAP to Non-GAAP Reconciliation

(unaudited)

(in thousands, except per share data)

       
Three Months Ended
March 31,
Twelve Months Ended
March 31,
2015 2016 2015 2016
Including special charges (benefits) (GAAP)
Net sales $ 315,547 $ 303,605 $ 1,353,228 $ 1,195,529
 
Net income $ 101,526   $ 32,665   $ 225,871   $ 101,536  
Diluted income per share $ 0.60 $ 0.19 $ 1.34 $ 0.60
 
Excluding special charges (benefits) (Non-GAAP)
Special charges (after-tax)
Litigation and environmental charges $ - $ 1,068 $ - $ 29,004
Discrete tax benefits (net) (67,153 ) (1,693 ) (70,341 ) (4,446 )
Net income $ 34,373   $ 32,040   $ 155,530   $ 126,094  
Diluted income per share $ 0.20 $ 0.19 $ 0.92 $ 0.75

In order to better understand the Company’s short-term and long-term financial trends, investors may find it helpful to consider results excluding special charges. The resulting non-GAAP financial measure provides additional information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and may be of assistance for period-over-period comparisons of such operations. Management considers the exclusion of such charges as part of its evaluation of the operating performance of the Company. Investors should consider the non-GAAP measure as a supplement to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, the non-GAAP financial measure may not be similarly titled to or calculated in a manner consistent with non-GAAP information presented by other companies. Detail of the Company’s non-GAAP net income is provided in the table above.

Chief Financial Officer, Kurt Cummings, stated, “As a part of our strategy, we continued to foster our financial strength in order to allow flexibility for investments in potential acquisitions, materials, equipment and people to support future growth. We have cash, cash equivalents and short and long-term investments in securities of approximately $1.0 billion and no debt. We continued to use our resources to provide value to our stockholders during the fiscal year by paying $70.5 million in dividends to stockholders and using $10.2 million to repurchase shares of AVX stock on the open market.”

AVX CORPORATION

Consolidated Condensed Balance Sheets

(unaudited)

(in thousands)

   
March 31, March 31,
2015 2016
Assets
Cash and cash equivalents $ 381,605 $ 454,208
Short-term investments in securities 461,901 494,594
Accounts receivable, net 188,992 168,673
Inventories 535,912 484,268
Other current assets   176,142   85,150
Total current assets 1,744,552 1,686,893
Long-term investments in securities 150,029 85,577
Property, plant and equipment, net 199,842 217,998
Goodwill and other intangibles 275,638 270,605
Other assets   88,954   136,762
 
TOTAL ASSETS $ 2,459,015 $ 2,397,835
 
Liabilities and Stockholders' Equity
Accounts payable $ 76,043 $ 78,167
Income taxes payable and accrued expenses   190,266   100,635
Total current liabilities 266,309 178,802
Other liabilities   60,743   41,927
 
TOTAL LIABILITIES 327,052 220,729
 
TOTAL STOCKHOLDERS' EQUITY   2,131,963   2,177,106
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,459,015 $ 2,397,835

This Press Release contains "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in this Press Release are forward-looking. The forward-looking information may include, among other information, statements concerning our outlook for fiscal year 2017, overall volume and pricing trends, potential for future growth, cost reduction and acquisition strategies and their anticipated results, expectations for research and development, and capital expenditures. There may also be other statements of expectations, beliefs, outlook, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect management's expectations and are inherently uncertain. The forward-looking information and statements in this Press Release are subject to risks and uncertainties, including those discussed in our Annual Report on Form 10-K for fiscal year ended March 31, 2015, that could cause actual results to differ materially from those expressed in or implied by the information or statements herein. Forward-looking statements should be read in context with, and with the understanding of, the various other disclosures concerning the Company and its business made elsewhere in this Press Release as well as other public reports filed by the Company with the SEC. You should not place undue reliance on any forward-looking statements as a prediction of actual results or developments.

Any forward-looking statements by the Company are intended to speak as of the date thereof. We do not intend to update or revise any forward-looking statement contained in this Press Release to reflect new events or circumstances unless and to the extent required by applicable law. All forward-looking statements contained in this Press Release constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934 and, to the extent it may be applicable by way of incorporation of statements contained in this Press Release by reference or otherwise, Section 27A of the United States Securities Act of 1933, each of which establishes a safe-harbor from private actions for forward-looking statements as defined in those statutes.

AVX, headquartered in Fountain Inn, South Carolina, is a leading manufacturer and supplier of a broad line of passive electronic components and related products.

Please visit our website at www.avx.com.

Contact:

AVX Corporation, Greenville
Kurt Cummings, 864-967-9303
investor.relations@avx.com