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To: Tech Master who wrote (14831)	7/15/1998 2:51:00 PM
From: Robert Einstein	Read Replies (1) \| Respond to of 17305

Tech Master, Is it safe to assume that the Sox has bottomed.?? Thankyou Robert

To: Tech Master who wrote (14831)	7/16/1998 12:11:00 AM
From: Andrew Vance	Respond to of 17305

AV-- A little background first for those that are unfamiliar with KMET. KEMET is the world leader in low ESR tantalum capacitor products with its T510 Multiple Anode Tantalum (MAT) offering ultra low ESR with high capacitance. NEC is the world leader in conductive polymer tantalum technology offering the benefits of low ESR and ignition prevention to the tantalum capacitor. This technology is the basis for the KEMET/NEC agreement. The NEC offerings are marketed under the Neocapacitor trade name. The agreement also contains provisions for KEMET and NEC to jointly develop and market next-generation capacitor technologies. This agreement covers both the manufacture and marketing of polymer-based capacitors, as well as capacitors manufactured from newly developed materials technologies. This agreement between the two technology-focused companies will further support and fulfill the constantly changing and demanding needs of the worldwide electronics market. ============ Cost of sales, exclusive of depreciation for the year ended March 31, 1998, was $463.6 million as compared to $377.5 million, for the year ended March 31, 1997. As a percentage of net sales, cost of sales, exclusive of depreciation, for fiscal year 1998 was 69% as compared to 68% for fiscal year 1997. The increase in cost of sales as a percentage of net sales was attributable to the decline in average selling prices from fiscal year 1997 to fiscal year 1998 combined with higher palladium prices experienced by the industry during the last quarter of fiscal year 1998. The Company continues to address this negative impact on cost of sales through cost reduction activities as evidenced by the announced restructuring during the third quarter of fiscal year 1998. The Company invested $114.5 million in capital expenditures in fiscal year 1998, and expects to invest $60.0 million in fiscal year 1999. The fiscal year 1998 capital was primarily invested in surface-mount manufacturing capacity. During fiscal year 1998, the company completed a 70,000 square foot expansion of its Fountain Inn, South Carolina plant. In April 1998, the company announced plans to build a new tantalum manufacturing facility in Ciudad Victoria, Mexico. The new facility will initially produce tantalum leaded products; however, this expansion is a direct result of the ever growing demand for the Company's tantalum surface-mount products. The Company presently has a total of seven manufacturing facilities in Matamoros and Monterrey, Mexico with approximately 60% of the Company's employees located there. In fiscal year 1998, the devaluation of the Mexican peso proved favorable, but did not have a material impact on the Company's performance. There is no assurance that the devaluation will continue and any effect this might have on the future performance of the Company cannot be determined. =================== It's a mixed bag since they seem to be affected by some Asian woes as far as products are concerned and any spill over into a non US economy like Mexico could wreak havoc down the road. Andrew