Kemet Corporation Announces Early Retirement Program

Business Wire, June 5, 1996

GREENVILLE, S.C.--(BUSINESS WIRE)--June 5, 1996--KEMET Corporation (Nasdaq/NM:KMET) today announced an early retirement incentive program for its U.S. hourly and salaried employees. The Company anticipates the program will reduce the U.S. hourly and salaried workforce by approximately 310 people with an annualized cost savings of approximately $13 million. The total cost of the program is estimated to be $10 million and will be charged to earnings in the quarter ending September 30, 1996. The Senior Management of the Company is not eligible for the early retirement incentive.

This reduction in the U.S. workforce reflects the ongoing consolidation of leaded and military capacitor production in Mexico and adjustments in the period and overhead costs consistent with current revenue levels. Manufacturing levels were adjusted to current demand levels in February and March of 1996 with the previously announced reduction in workforce of 290 employees in the U.S. and a similar number in Mexico.

KEMET's net sales and operating income for the quarters ending June 30, 1996, and September 30, 1996, are currently expected to be below the corresponding year-ago periods. The Company's results for the first fiscal quarter are expected to reflect the low point in the previously discussed industry inventory correction, with net sales expected to range between $125 million and $130 million. Based on discussions with major customers, the Company expects its demand for capacitors to increase in subsequent quarters.

KEMET Corporation, headquartered in Greenville, South Carolina, is the largest manufacturer and supplier of solid tantalum capacitors and the second largest manufacturer and supplier of multi-layer ceramic capacitors in the United States. KEMET's common stock is listed on The Nasdaq Stock Market's National Market under the symbol KMET.

CONTACT: KEMET Corporation, Greenville

Glenn H. Spears, 864/963-6674