Quarterly report pursuant to Section 13 or 15(d)

Concentrations of Risks

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Concentrations of Risks
3 Months Ended
Jun. 30, 2012
Concentrations of Risks  
Concentrations of Risks

Note 13. Concentrations of Risks

 

Sales and Credit Risks

 

The Company sells to customers globally.  Credit evaluations of the Company’s customers’ financial condition are performed periodically, and the Company generally does not require collateral from its customers.  One customer, TTI, Inc., accounted for over 10% of the Company’s net sales in the quarters ended June 30, 2012 and 2011.  There were no customers’ accounts receivable balances exceeding 10% of gross accounts receivable at June 30, 2012 or March 31, 2012.

 

Electronics distributors are an important distribution channel in the electronics industry and accounted for 46% and 45% of the Company’s net sales in the quarters ended June 30, 2012 and 2011, respectively.  As a result of the Company’s concentration of sales to electronics distributors, the Company may experience fluctuations in the Company’s operating results as electronics distributors experience fluctuations in end-market demand or adjust their inventory stocking levels.

 

Employee Risks

 

As of June 30, 2012, KEMET had approximately 10,200 employees in the following locations:

 

Mexico

 

5,000

 

Asia

 

2,600

 

Europe

 

2,000

 

United States

 

600

 

 

The number of employees represented by labor organizations at KEMET locations in each of the following countries is:

 

Mexico

 

3,300

 

Italy

 

350

 

Bulgaria

 

250

 

Indonesia

 

250

 

China

 

200

 

Finland

 

200

 

Portugal

 

100

 

Sweden

 

100

 

 

For fiscal year 2012 and the current fiscal year to date, the Company has not experienced any major work stoppages. The Company’s labor costs in Mexico, Asia and various locations in Europe are denominated in local currencies, and a significant depreciation or appreciation of the United States dollar against the local currencies would increase or decrease labor costs.