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To: Mark Oliver who wrote (1402)	1/26/1999 5:49:00 AM
From: Mark Oliver	Respond to of 2025

Don't know if you've noticed, but passive components makers have taken a real beating with price declines similar to DRAM while dealing with big price rises in palladium, their basic material. So, I find Kemet's forward looking statement showing positive sign is very welcome. Regards, Mark KEMET Reports Sales and Earnings for Third Quarter of Fiscal 1999 Business Wire - January 25, 1999 16:32 GREENVILLE, S. C.--(BUSINESS WIRE)--Jan. 25, 1999--KEMET Corporation (Nasdaq/NM:KMET) today reported financial results for the third fiscal quarter ended December 31, 1998. Third quarter net sales were $141.9 million compared with net sales of $170.4 million for the quarter ended December 31, 1997. Net earnings for the third quarter of fiscal 1999 were $1.9 million or $0.05 per share, compared to $7.6 million, or $0.19 per share, for the same quarter last year. Sequentially, net sales increased 3% from the September 1998 quarter and unit volume increased 6%, resulting in an earnings improvement of $1.5 million. "We continue to make significant reductions in our operational costs and at the same time continue to improve our technical and manufacturing efficiencies," stated David E. Maguire, CEO and President. "These programs will enable us to be poised for the maximum leverage in earnings growth as the electronics industry recovers. For example, KEMET is now producing and shipping base metal electrode (BME) multilayer ceramic capacitors and continues to make substantial progress in the reduction of palladium usage. We continue to see signs of market improvement such as the slowing rate of decline in average selling prices, the stronger yen, and the positive outlook for the electronics industry in FY00, but we expect the recovery to be gradual and somewhat erratic over the next several months." Sales of surface-mount capacitors were $117.4 million compared to net sales of $133.8 million for the same quarter last year, while sales of leaded capacitors were $24.6 million compared to $36.6 million for the prior period. Export sales decreased 4% to $70.9 million, when compared with the prior period, but increased sequentially over the September 1998 quarter by $7 million, or 11%, led primarily by improving sales in Asia. Earnings before depreciation, amortization, interest and taxes (EBDAIT) for the third quarter of fiscal 1999 were $18.0 million compared with $24.4 million for the same quarter last year. Net sales for the nine months ended December 31, 1998, were $422.1 million compared with net sales of $497.0 for the same period last year. Net earnings were $3.8 million, or $0.10 per share, for the nine months ended December 31, 1998, compared with $35.8 million or $0.91 per share, for the same period last year. KEMET Corporation, headquartered in Greenville, South Carolina, is the largest manufacturer of solid tantalum capacitors in the world and the second largest manufacturer of multilayer ceramic capacitors in the United States. KEMET's common stock is listed on the Nasdaq Stock Market's National Market under the symbol KMET. Company information is available via the Internet (http://www.kemet.com). This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 involving risks and uncertainties discussed in detail in the Company's Securities and Exchange Commission filings and reports, including the Company's 1998 Annual Report to Stockholders. Actual results may vary due to these or other risks and uncertainties. KEMET CORPORATION AND SUBSIDIARIES UNAUDITED FINANCIAL HIGHLIGHTS (Dollars in Thousands Except Per Share Data) Three Months Ended Nine Months Ended ------------------ ----------------- December 31, December 31, ACTUAL INFORMATION 1998 1997 1998 1997 ---- ---- ---- ---- Income Statement Data: ---------------------- Net sales $141,914 $170,359 $422,118 $497,041 Cost of goods sold, exclusive of depreciation 106,863 116,807 319,678 342,570 Selling, general and administrative expenses 12,360 12,185 36,451 36,577 Research and development 4,673 6,484 16,407 17,535 Depreciation and amortization 11,829 10,216 34,243 28,960 Restructuring charge -- 10,500 -- 10,500 Operating income 6,189 14,167 15,339 60,899 Interest expense, net 2,394 1,964 6,589 5,260 Other expense 1,073 1,492 3,200 3,926 Income taxes 871 3,154 1,776 15,904 Net earnings $ 1,851 $7,557 $ 3,774 $35,809 Per Common Share Data: ---------------------- Net earnings per share - diluted $ 0.05 $ 0.19 $ 0.10 $ 0.91 Weighted-average shares outstanding - diluted 39,368,977 39,424,840 39,370,124 39,424,797 Other Data: ----------- Earnings before depreciation, amortization, interest and income taxes (EBDAIT) $18,018 $24,383 $49,582 $89,859 CONTACT: KEMET Corp., Greenville Glenn H. Spears, 864/963-6674

To: Mark Oliver who wrote (1402)	1/26/1999 6:00:00 AM
From: Mark Oliver	Respond to of 2025

From Electronic News--January 25, 1998 Rubbing the Jini for Luck Havi manufacturers look to Sun for help By Peter Brown San Jose—Philips Electronics N.V., Sony Electronics Corp. and Sun Microsystems Inc. last week announced a collaboration to bring Sun's Jini personal network technology to the home audio/video interoperability (Havi) architecture for home consumer electronics (CE) networks. The move is an effort to bring more clout and a higher level of functionality to home networking for consumer devices. Havi is supported by eight consumer companies with the belief that by having the ability to connect CE appliances, consumers will be more inclined to purchase emerging technologies. “Because the devices will have common controls, protocols and specifications, each consumer device will be able to connect to the network easier and have the control center of the network immediately recognize the appliance,” said Frans van Houten, COO of Philips Digital Video division. Two camps have set up in the home networking market. One of the factions, pushing the Havi architecture, includes the major consumer electronics manufacturers. The other camp, which includes Intel and PC OEMs, would have the network centered around the PC. Intel and PC OEMs want their own “no new wires” standard to be the network of choice for the power line, the phone line and wireless devices in the home, all with a PC as a host. Some say, however, this may not be what consumer are necessarily looking for. “It really makes sense how the different vendor fall out because of the PC issue,” said Mike Paxton, industry analyst at Cahners In-Stat Group, a market research firm in Scottsdale, Ariz. Paxton “This is not the killer (application) that everyone says it will be but the growth is there and the technology is there so it's something the big vendors from whatever side of the industry can't ignore,” said Paxton. He noted that the in-fighting between the two home networking camps may stymie the proliferation of the technology. Paxton forecasts the home networking market including all the different standards and technologies to grow to $250 million by the end of this year—an increase of 100 percent. By the year 2000, In-Stat forecasts this number to triple. Sony sees Havi as the gateway to the home from any outside information service, according to spokesman Mack Araki. Also, Havi will allow numerous companies to use a set-top box as the control device instead of PCs in the home while connecting to a variety of appliances and applications. The control device can be beyond the set-top or the PC. It could be the television or even a connected remote control or PDA handset, he added. “This will enable plug and play in the home with consumer devices and that will make life a lot easier for those people who have multiple appliances in the home,” said Araki. The consumer companies involved with creating Havi will license the technology for an initial fee of $5,000 and a royalty fee of 10 cents per unit sold. This will allow many consumer OEMs to sell the devices at an attractive consumer price point, said Araki. The Havi application programming interfaces (APIs) and specification were created by Grundig AG, Hitachi Electronics Corp., Matsushita Electric Corp., Philips, Sony, Sharp Electronics Corp., Thomson Consumer Electronics, Inc. and Toshiba Corp. The Havi technology uses the IEEE 1394 interface so that if a legacy device that is not Havi compliant has a 1394 interface it can still be connected to the Havi network. Also, using Sun's Jini technology will allow users to access the Havi network through handheld PCs, cellular phones and PalmPilots. Through the Jini technology, Havi will allow digital audio/video electronics appliances to access remote network services and allow users to remotely operate digital audio/video appliance and PCs across a Jini technology-based network. “So I can basically set my VCR while driving home from work through my cellular phone. That is what Jini brings to the home network,” said Philips' van Houten

To: Mark Oliver who wrote (1402)	1/26/1999 6:21:00 AM
From: Mark Oliver	Read Replies (3) \| Respond to of 2025

From Electronic News--January 25, 1998 DSL Enters The Fray By Brian Strachman Local Exchange Carriers (LECs) have been enthusiastically awaiting the rollout of a service called DSL (digital subscriber line), a high-speed data service targeted at homes and small businesses. In direct competition with cable modem services like Cox@Home, DSL provides an Internet connection at speeds of 256K and faster across a standard phone line, yet allows to the user to conduct voice conversations. The LECs have been slow to launch this service compared to the cable providers who have been selling high-speed connections over coaxial cable for almost two years now. Due to the cable industry's head start, the market has been slow to adopt DSL service and the LECs haven't made any proactive moves. While it seems that almost every press release from the LECs touts DSL as the future of data communications technology, actually subscribing to the service is another matter. As an early adopter of technology, a high-speed connection in my home is an absolute necessity. In Arizona, our phone service is provided by U S West, who has creatively branded their DSL offering “MegaBit Service.” While this is analogous to the water company calling its product the “gallon service,” U S West is now stuck with the name and is milking it for all its worth. I contacted my Mega-salesperson to find if my area was one of the few vicinities in which the service was available. The first response of the U S West salesperson was, “Mega-what?” Finally after several slow, painful explanations about DSL, my Mega-salesperson decided to check with his manager and call me back. To my surprise, I was informed that my residence was in one of the few scattered areas with MegaBit availability. U S West put me in touch with the salesperson with the most DSL experience; he had signed up two other customers in addition to myself. He explained that the service would cost $40 per month after a $140 installation fee to turn the service on, and another $110 if I needed a technician to come to my home to configure my computer. While I actually considered spending the $110 simply for the entertainment value of watching a U S West “technician” in action, I opted to do the installation myself. The installation involves plugging in a network card and making a few minor adjustments to the computer's system, not difficult but most likely above the skill set of the average home user. While $140 may sound like an exorbitant installation fee, in reality it is quite reasonable considering what U S West includes. With my MegaBit service I received: a 100baseT network card worth $50, a Cisco router (the DSL modem) with a value of at least $300, eight microfilters to plug my regular phones into so as not to interfere with the DSL, and for some reason they also included a $110 feature phone with caller ID. U S West is obviously so desperate to recover some market share from the cable industry that they are willing to take a loss at the front door. By way of comparison, to get up and running with high speed service over coax requires the purchase of a cable modem at $300 or more. The only catch is that I have to subscribe to an ISP that can handle the DSL service, and not surprisingly US West has its own ISP ready and waiting. Interestingly, the DSL service doesn't function as much like a modem, but more like a node on a network (thus the need for the router.) Given this situation, I wondered if it was possible to get a fixed IP address. IP addresses are the Internet's means of identifying computers and are randomly assigned each time a user dials in with a modem. A fixed IP would allow me to serve my own web site from my home. Unfortunately, my Mega-salesperson had no idea what a fixed IP was, or where I could find one. After countless phone calls to U S West tech support, and U S West's ISP, I finally discovered that a fixed IP runs an additional $20 per month. Following the mandatory seven day waiting period (to allow the central office to establish the proper connection), my Mega-line was functional. I've now had the service for over a month, and despite the initial aggravation with installation, I am very pleased with MegaBit. The download speeds well exceed the promised 256K and the service has been steadily up and running the entire time. Since DSL operates from a star type network (unlike cable modems that use a tree branch style), I have never experienced degradation in service quality due to other users in my area. It is even relatively simple to network other computers on the same service. By plugging the DSL modem into a hub, every computer in the home can share the more than adequate bandwidth. While very few people are using DSL service presently, it puts many other features within reach. Unified messaging in particular, the prodigal child of telecom, becomes a viable service as it now takes just seconds to download voice messages to a PC. I believe that service providers should consider bundling unified messaging with DSL, as bandwidth issues were the major sticking point. Additionally, four LECs including U S West, are presently negotiating to buy PointCast, an on-line news service and pioneer of Internet push technology. While PointCast has fallen out of favor recently due to lack of bandwidth, it would be an ideal bundle with DSL service. I am constantly annoyed that I am not consuming nearly enough of the bandwidth that I pay so much for each month, but PointCast's constant news and informational broadcasts should alleviate my concerns. Due to its modest pricing and low entry fees, DSL is a viable solution in the home as well as small business arenas and is in a position to seriously cannibalize T-carrier service. As more service providers begin to aggressively market DSL, I expect to see it make significant headway against the cable modems. I believe that once the LECs have worked the kinks out of their customer service and marketing issues, DSL will be a Mega-success.