10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to__________

Commission File Number: 1-7201

(Exact name of registrant as specified in its charter)

Delaware	33-0379007
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)
1 AVX Boulevard, Fountain Inn, South Carolina	29644
(Address of principal executive offices)	(Zip Code)

(864) 967-2150

(Registrant's telephone number, including area code)

Securities registered Pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.01 par value per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐    No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Based on the closing sales price of $18.23 on September 30, 2017, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the common stock held by non-affiliates of the registrant as of that date was $847,283,677.

As of May 15, 2018, there were 168,512,387 shares of the registrant’s common stock, par value $.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the 2018 Annual Meeting of Stockholders, which will be filed within 120 days of March 31, 2018, are incorporated by reference into Part III.

TABLE OF CONTENTS 

Part I		Page
Item 1.	Business	4
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	20
Item 3.	Legal Proceedings	21
Item 4.	Mine Safety Disclosures	21
Part II
Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22
Item 6.	Selected Financial Data	24
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 8.	Financial Statements and Supplementary Data	40
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	40
Item 9A.	Controls and Procedures	41
Item 9B.	Other Information	42
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	42
Item 11.	Executive Compensation	42
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	42
Item 13.	Certain Relationships and Related Transactions, and Director Independence	42
Item 14.	Principal Accounting Fees and Services	42
Part IV
Item 15.	Exhibits and Financial Statement Schedules	43
Signatures		45

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Cautionary Statement Regarding Forward-Looking Statements

The following discussion and analysis should be read in conjunction with the consolidated financial statements, including the notes thereto, appearing elsewhere herein. Statements in this Annual Report on Form 10-K that reflect projections or expectations of future financial or economic performance of AVX Corporation, and statements of the Company's plans and objectives for future operations, including, but not limited to, those contained in “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures about Market Risk,” or relating to the Company’s outlook for overall volume and pricing trends, end market demands, cost reduction strategies and their anticipated results, and expectations for research, development, and capital expenditures, are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “expects,” “anticipates,” “approximates,” “believes,” “estimates,” “intends,” "could," "should," "continue," and “hopes” and variations of such words and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain such language. No assurance can be given that actual results or events will not differ materially from those projected, estimated, assumed, or anticipated in any such forward-looking statements. Important factors that could result in such differences, in addition to the other factors noted in connection with such forward-looking statements and in “Risk Factors” in this Annual Report on Form 10-K, include: general economic conditions in the Company's market, including inflation, recession, interest rates, and other economic factors; casualty to or other disruption of the Company's facilities and equipment; changes in regulations related to our industry, trade regulations or environmental regulations; potential environmental liabilities; and other factors that generally affect the business of manufacturing and supplying electronic components and related products. Forward looking statements are intended to speak only as of the date they are made and AVX Corporation does not undertake to update or revise any forward-looking statement contained in this Annual Report on Form 10-K to reflect new events or circumstances unless and to the extent required by applicable law. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon forward-looking statements as predictions of future events.

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PART I

Item 1. Business

General

AVX Corporation (together with its consolidated subsidiaries, “AVX” or the “Company”) is a leading worldwide manufacturer, supplier, and reseller of a broad line of electronic components, interconnect, sensing and control devices, and related products. Electronic components and connector, sensing and control products manufactured or resold by AVX are used in many types of end use products, including those in telecommunications, automotive, transportation, energy harvesting, consumer electronics, military/aerospace, medical, computer, and industrial markets.

Our electronic component products include ceramic and tantalum capacitors, film capacitors, varistors, filters, passive and active electronic antennas, and other components manufactured in our facilities throughout the world, other manufacturing suppliers and, through March 31, 2018, components manufactured by Kyocera Corporation of Japan (“Kyocera”), a public company and our majority stockholder which owns approximately 72% of our outstanding common stock. We also sell electronic interconnect, sensing and control devices manufactured in our facilities and other manufacturing suppliers.

We are organized by product line with five main product groups: Ceramic Components; Tantalum Components; Advanced Components; Interconnect, Sensing and Control Devices; and Kyocera Electronic Devices (“KED”). Our reportable segments are based on the types of products from which we generate revenues and how management assesses performance and makes operating decisions related to these products. We had three reportable segments as of March 31, 2018: Electronic Components; Interconnect, Sensing and Control Devices; and KED Resale. Segment revenue and profit information is presented in Note 16 to the consolidated financial statements. The product groups of Ceramic Components, Tantalum Components and Advanced Components have been aggregated into the Electronic Components reportable segment. The Electronic Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick and thin film components, surface mount and leaded tantalum capacitors, surface mount and leaded film capacitors, ceramic and film power capacitors, super capacitors, EMI filters (bolt in and surface mount), thick and thin film packages of multiple integrated components, varistors, thermistors, inductors, resistive products, and passive and active electronic antennas manufactured by us or purchased from other manufacturers for resale. The Sensing and Control Devices business acquired during fiscal 2018 has been included in the Interconnect, Sensing and Control Devices segment. The Ethertronics business acquired during fiscal 2018 has been included in the Advanced Components product group within the Electronic Components segment. The reportable segments have been presented in accordance with the United States Securities and Exchange Commission's (the "SEC") aggregation criteria and quantitative thresholds. The aggregation criteria consist of similar economic characteristics, products and services, production processes, customer classes, and distribution channels. Sales and operating results from these reportable segments are shown in the tables below. In addition, we have a corporate administration group consisting of finance, legal, environmental, health & safety (“EH&S”), and administrative functions.

Our customers consist of multi-national original equipment manufacturers, or OEMs, independent electronic component distributors, and electronic manufacturing service providers, or EMSs. We market our products through our own direct sales force and independent manufacturers' representatives, based upon market characteristics and demands. We coordinate our sales, marketing, and manufacturing organizations by strategic customer account and globally by region.

We sell our products to customers in a broad array of industries, such as telecommunications, information technology hardware, automotive electronics, medical devices and instrumentation, industrial instrumentation, transportation, energy harvesting, defense and aerospace electronic systems, and consumer electronics.

Our principal strategic advantages include:

Creating Technology Leadership. We have research and development locations in Czechia, France, Germany, India, Israel, Japan, Malaysia, South Korea, the United Kingdom and the United States, although a certain level of innovation occurs at every one of our manufacturing sites. We developed numerous new products and product extensions during fiscal 2018 in addition to those added through our acquisition activity. These new products add to the broad product line we offer to our customers. Our research scientists and design engineers are working to develop product solutions to the challenges facing our customers as consumers and businesses demand more advanced electronic solutions to manage their everyday lives and businesses. Our engineers are continually working to enhance our manufacturing processes to improve capability, capacity, and yield, while reducing manufacturing costs.

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Providing a Broad Product Line. We believe that the breadth and quality of our product line and our ability to respond quickly to our customers’ design and delivery requirements make us a provider of choice for our multi-national customer base. We differentiate ourselves by providing our customers with a broad line of electronic component and interconnect, sensing and control solutions. This array of products allows our customers to streamline their purchasing and supply organization. Due to our broad product offering, none of our products individually represents a material portion of our revenues.

Maintaining the Lowest Cost, Highest Quality Manufacturing Organization. Excluding our acquisition activity, we have invested approximately $215 million over the past three fiscal years to upgrade and enhance our worldwide manufacturing facilities and capabilities with respect to the manufacture of ceramic, tantalum, and advanced components as well as interconnect, sensing and control devices. In order to reduce the cost of production, our strategy has included the transfer to, and expansion of, manufacturing operations in countries such as China, Czechia, El Salvador, India, Malaysia, Mexico, Romania, and Vietnam.

Globally Coordinating our Marketing, Distribution, and Manufacturing Facilities. We believe that our global presence is an important competitive advantage as it allows us to provide quality products on a timely basis to our global customers. We provide enhanced services and responsiveness to our customers by maintaining significant manufacturing and warehouse operations in regions where we market the majority of our products. As of March 31, 2018, we had 33 manufacturing facilities located in 16 different countries around the world. As our customers continue to expand their global production capabilities, we are ideally situated to meet their design and supply requirements.

Products

We offer an extensive line of electronic component products providing passive and active component solutions for our customers. Passive electronic components do not require power to operate. Such components adjust and regulate voltage and current, store energy, and filter frequencies. Active electronic components, which include amplifying components such as our active antenna components, require power in some way to make them function. In fiscal 2018, sales of Electronic Components represented approximately 60% of our net sales, Interconnect, Sensing and Control Devices, together with KCP Resale Connectors, represented approximately 23% of our net sales, and KDP and KCD Resale represented approximately 17% of our net sales. The table below presents revenues for fiscal 2016, 2017 and 2018 by product group. Financial information concerning our Electronic Components, Interconnect, Sensing and Control Devices, and KED Resale segments is set forth in Note 16 to the consolidated financial statements included elsewhere herein.

	Fiscal Year Ended March 31,
Sales revenue (in thousands)	2016		2017		2018
Ceramic Components	$	176,502	$	188,568	$	226,204
Tantalum Components		311,888		314,723		366,194
Advanced Components		333,693		372,279		346,459
Total Electronic Components		822,083		875,570		938,857
Interconnect, Sensing and Control Devices		111,609		118,163		327,301
KCP Resale Connectors		23,751		30,027		36,090
KDP and KCD Resale		238,086		288,901		260,226
Total KED Resale		261,837		318,928		296,316
Total Revenue	$	1,195,529	$	1,312,661	$	1,562,474

Electronic Components

Our strategic focus on the growing use of electronic components is reflected in our investment, excluding the cost of business acquired, of approximately $149 million in facilities and equipment used to manufacture electronic components during the past three fiscal years. Electronic Components accounted for approximately 60% of our net sales in fiscal 2018. We believe that sales of electronic components will continue to expand in the worldwide electronics market because technological advances in the markets that we serve have been constantly expanding the number and type of applications for these products.

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We manufacture and resell a broad line of ceramic and tantalum electrolytic capacitors in many different sizes and configurations. Tantalum and ceramic components are commonly used in conjunction with integrated circuits and are best suited for applications requiring low to medium capacitance values. However, with current capacitance range extensions, we are seeing more demand for higher capacitance (“High CV”) products that increase the demand for certain products we sell. Capacitance is the measure of the capacitor's ability to store electric energy. Generally, ceramic capacitors are more cost-effective at lower capacitance values, and tantalum capacitors are more cost-effective at medium capacitance values. The net sales of tantalum and ceramic capacitors accounted for approximately 63% of our Electronic Component segment net sales in fiscal 2018.

We also manufacture and resell a broad line of advanced electronic components to fill the special needs of our customers. Our family of advanced components includes specialized ceramic, tantalum and film capacitors, high energy/voltage power capacitors, passive and active antennas and varistors. Our advanced product engineers work with some customers’ in-house technical staffs to design and manufacture customized products to meet the specifications of particular applications. The manufacture of custom products permits us, through our research and development activities, to make technological advances, provide customers with design solutions to fit their needs, gain a marketing inroad with customers with respect to our complete product line, and, in some cases, develop products that can be sold to additional customers in the future. Sales of advanced electronic components accounted for approximately 37% of Electronic Component segment net sales in fiscal 2018.

Interconnect, Sensing and Control

We manufacture and resell high-quality electronic connectors, interconnect systems, and sensing and control devices for use in various industries. Our product lines include a variety of industry-standard connectors as well as products designed specifically for our customers' unique applications. An expanding portion of the electronics market for Interconnect, Sensing and Control products is the automotive market, with applications throughout a vehicle, including engine control, transmission control, audio, brakes, lighting, and stability and safety control systems. We produce fine pitch connectors used in portable devices such as smart phones, other cell phones, notebook computers, tablets, GPS, and other hand held devices. In addition, we offer specialty connectors designed to address customer specific applications across a wide range of products and end markets, including the expanding LED, LCD, and medical devices and hardware markets. Excluding acquisition related spending, we have invested approximately $61 million in facilities and equipment over the past three years, as we continue to focus on new product development and enhancement of production capabilities for our Interconnect, Sensing and Control business. Sales of Interconnect, Sensing and Control products, including KCP Resale connector products, accounted for approximately 23% of net sales in fiscal 2018. Approximately 10% of combined Interconnect, Sensing and Control and KCP Resale connector net sales in fiscal 2018 consisted of connectors manufactured by Kyocera. See below “AVX and Kyocera – Resale Sales Channel Changes” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Relationship with Kyocera and Related Transactions” for additional information regarding the Company’s relationship with Kyocera.

KED Resale

We had a non-exclusive license to distribute and sell select Kyocera-manufactured electronic component and connector products to our customers in certain geographical regions outside of Japan that terminated on January 1, 2018. The Kyocera KDP, KCP and KCD electronic components we marketed and sold included ceramic capacitors, RF modules, frequency control devices, SAW devices, sensor products, actuators, and acoustic devices. Sales of these products accounted for approximately 19% of net sales in fiscal 2018. For additional information regarding the Company’s relationship with Kyocera see below “AVX and Kyocera – Resale Sales Channel Changes” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Relationship with Kyocera and Related Transactions.”

AVX and Kyocera – Resale Sales Channel Changes

In December 2016, Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement of its intent, effective January 1, 2018, to market its manufactured electronic and interconnect products globally using Kyocera’s sales force rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Kyocera will pay commissions to AVX on sales by Kyocera, in the applicable territories, of products designed into customer applications by AVX prior to January 1, 2018 of 2.0% in calendar year 2018, 1.5% in calendar year 2019, and 1.0% in calendar year 2020. Sales of Kyocera resale products by AVX were $296.3 million and related operating profit was $18.2 million for the fiscal year ended March 31, 2018.

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In February 2017, AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement of its intent, effective April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera resell such products in this territory. AVX will pay commissions to Kyocera on sales by AVX, in the applicable territory, of products designed into customer applications by Kyocera prior to April 1, 2018 of 2.0% in fiscal year 2019, 1.5% in fiscal year 2020, and 1.0% in fiscal year 2021. Sales of AVX resale products by Kyocera were $21.9 million for the fiscal year ended March 31, 2018.

Marketing, Sales, and Distribution

We place a high priority on solving customers’ electronic component design challenges and responding to their needs. In order to better serve our customers, we frequently designate teams consisting of marketing, field application engineering, research and development, and manufacturing personnel to work with customers to design and manufacture products to suit their specific requirements. We expense costs related to these activities as incurred.

Approximately 26%, 37%, and 37% of our net sales for fiscal 2018 were to our customers in the Americas, Europe, and Asia, respectively. Financial information for these geographic regions is set forth in Note 16 to our consolidated financial statements included elsewhere herein. The section “Risk Factors,” contained herein, provides a discussion of risks associated with our non-U.S. operations.

We market our products worldwide through our own dedicated direct sales personnel that serve our major OEM and EMS customers. We also have a large network of independent electronic component distributors and independent manufacturers’ representatives who sell our products throughout the world. We have regional sales and design application personnel in strategic locations to provide technical and sales support for these independent manufacturers’ representatives and independent electronic component distributors. We believe that this combination of sales channels provides a high level of market penetration and efficient coverage of our customers on a cost-effective basis.

Our customers use our products in a wide variety of applications. In order to maximize growth opportunities, our engineering and sales teams maintain close relationships with OEM, EMS, and electronic component distributor customers. Our largest customers may vary from year to year, and no customer has a long-term commitment to purchase our products. During the fiscal years ended March 31, 2016, March 31, 2017 and March 31, 2018, no single customer accounted for more than 10% of our sales. As of March 31, 2017 and March 31, 2018, one customer represented 12% and 8%, respectively, of the Company’s accounts receivable balance. Because we are a supplier to several significant manufacturers across a broad-base of electronic devices industries and because of the cyclical nature of these industries, the significance of any one customer can vary from one period to the next.

We also have qualified products under various specifications approved and monitored by the United States Defense Electronic Supply Center (“DSCC”) and European Space Agency (“ESA”), and approved under certain U.S. and non-U.S., foreign military specifications.

Typically, independent electronic component and interconnect device distributors handle a wide variety of products and fill orders for many customers. The sales terms under non-exclusive agreements with independent electronic component and interconnect device distributors may vary by distributor and by geographic region. Such agreements may include stock rotation and ship-from-stock and debit (“ship and debit”) programs. Stock rotation is a program whereby distributors are allowed to return qualified inventory semi-annually, for credit equal to a certain percentage, primarily limited to 5%, of the previous six months’ net sales. In the United States, we may use a ship and debit program under which we may grant pricing adjustments to assist distributors in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a specific part of a sale to the distributor’s end customer from the distributor’s stock. In addition, certain agreements with distributors may include special incentive discounts based on the amount of product ordered or shipped. Our agreements with independent electronic component and interconnect device distributors generally also require that we repurchase qualified inventory from the distributor in the event that we terminate the distributor agreement or discontinue a particular product offering.

We had a backlog of orders of approximately $224 million at March 31, 2016, $280 million at March 31, 2017, and $535 million at March 31, 2018. Firm orders, primarily with delivery dates within six months of order placement, are included in backlog. Many of our customers encounter uncertain and changing demand for their products. Customer-provided forecasts of product usage and anticipated usage of inventory at consignment locations are not included in backlog. If demand falls below customers’ forecasts, or if customers do not effectively control their inventory, they may cancel or reschedule their planned shipments that are included in our backlog, in many instances without any penalty. Backlog fluctuates from year to year due, in part, to changes in customer inventory levels, changes to consignment inventory arrangements, order patterns, product delivery lead times in the industry, and the completion of acquisitions. Accordingly, the backlog outstanding at any point in time is not necessarily indicative of the level of business expected in any ensuing period since many orders are placed and delivered within the same period. In addition, the increased use of vendor-managed inventory and similar consignment type arrangements tend to limit the significance of backlog as future use and sale of such inventory is not typically reflected in backlog.

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Research, Development, and Engineering

Our emphasis on research and development is evidenced by the fact that most of our manufactured products and manufacturing processes have been designed and developed by our own engineers and scientists. Our research and development activities are carried out at facilities located in Czechia, France, Germany, India, Israel, Japan, Malaysia, South Korea, the United Kingdom and the United States, although a certain level of innovation occurs at all of our manufacturing sites.

Our research and development effort and our operational-level engineering effort place a priority on the design and development of product extensions, innovative new products, and improved manufacturing processes as well as engineering advances in existing product lines and manufacturing operations. Other areas of emphasis include material synthesis and the integration of components for applications requiring reduced size and lower manufacturing costs associated with circuit board assembly. Research, development, and engineering expenditures were approximately $28 million, $31 million, and $42 million during fiscal 2016, 2017, and 2018, respectively. The 2018 expenditures include the impact of the two businesses acquired during the year. The level of such spending can fluctuate as new products are transferred to full-scale production and process enhancements are implemented.

We own United States patents as well as corresponding patents in various other countries, and also have patent applications pending, although no individual patent or family of patents is material to the successful operation of our business. For discussion regarding our licensing arrangement with Kyocera, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Relationship with Kyocera and Related Transactions.”

Raw Materials

The costs of our products are influenced by a wide variety of raw materials, including tantalum and other minerals such as platinum, palladium, silver, nickel, gold, and copper as well as other chemicals and chemical mixes used in our manufacturing processes. The costs of these materials are subject to significant price fluctuation as well as occasional shortages. In some cases, raw materials cost increases may be offset by selling price increases, productivity improvements, and cost savings programs.

We are a major consumer of the world’s annual production of tantalum. Tantalum powder and wire are principal materials used in the manufacture of tantalum capacitor products. We purchase tantalum raw materials as well as processed powder and wire from suppliers in various parts of the world at prices that are subject to periodic adjustment and variations in the market. The tantalum required to manufacture our products has generally been available in sufficient quantity. The limited number of tantalum material suppliers that process tantalum ore into capacitor-grade tantalum powder has, at times, led to higher prices during periods of increased demand and/or limited mining output.

Although most materials incorporated in our products are available from a number of sources, certain materials are available only from a relatively limited number of suppliers. Historically, we had a policy of not using tantalum sourced from the conflict areas of the Democratic Republic of Congo (“DRC”), or any other area in which insurgents or similar groups benefit from the sale of minerals. As a key participant in Solutions for Hope, AVX was the first in its industry to validate a “closed tantalum pipe” process from the mine site to the customer. Furthermore, the “closed pipe” was validated under the Conflict-Free Smelter program in accordance with the principles of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank" Act) and the current Organization for Economic Cooperation and Development (“OECD”) guidelines. During 2017 and in the spirit of continuous improvement envisioned and enshrined by the OECD Due Diligence guidance, AVX continued to improve supply chain sustainability and reduce compliance cost by field-testing a new alternate traceability platform (“BSP”) and proof of concept of a geological science technique for mineral matching (Geological Passporting) in the DRC region. The result of the BSP pilot demonstrated that a new compliance model is possible using technology for the reporting, analysis, chain of custody and Geo Passporting for validation. AVX has obtained the patent for this technology and invested in equipment at its facility, thus mitigating supply chain risk by reducing cost and time required to validate the minerals and deliver them for manufacturing. Please refer to the Solutions for Hope website for more information.

Since December 2011, AVX has only sourced tantalum powder and wire used in its tantalum capacitors from smelters that are compliant with the RBA/GeSI conflict-free smelter program. In 2012, AVX began using Validated Conflict-Free Tantalum, which comes from verified sources in the DRC and surrounding countries. AVX also observes the rules for other conflict minerals governed by the Dodd-Frank Act (tin, tungsten, and gold). AVX has implemented a Due Diligence Policy on Conflict Minerals, and actively engages in industry initiatives, including the Responsible Sourcing Initiative (“RMI”), the ITRI Tin Supply Chain Initiative (“iTSCi”), and the Tantalum-Niobium International Study Center (“TIC”). AVX’s program for conflict minerals compliance has been independently audited as required by SEC rules annually since 2015. Further details of this effort are available in AVX’s annual Form SD filings under the Dodd-Frank Act at www.sec.gov.

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Our continued efforts affirm our commitment to supply conflict-free minerals to our customers and to comply fully with the OECD guidelines and SEC regulations.

Competition

Markets for our products are highly competitive. We encounter aggressive and able competition in our various product lines from many domestic and non-U.S. manufacturers. Competitive factors in the markets include product quality and reliability, breadth of product line, customer service, technological innovation, global production presence, timely delivery, and price. We believe we are competitively positioned on each of these factors. The breadth of our product offering enables us to strengthen our market position by providing customers with one of the broadest selections of electronic components and interconnect, sensing and control devices available from any one source.

Employees

As of March 31, 2018, we employed approximately 14,920 full-time employees. Approximately 1,430 of these employees are employed in the United States, of which, approximately 110 are covered by collective-bargaining arrangements. In addition, some non-U.S. employees are members of trade and government-affiliated unions. Our relationship with our employee union groups is generally good. However, no assurance can be given that, in response to changing social and economic conditions and our actions, labor unrest or strikes will not occur.

Environmental Matters

We are subject to federal, state, and local laws and regulations concerning the environment in the United States and to the environmental laws and regulations of the other countries in which we operate. These regulations include limitations on discharges into air and water; remediation requirements; chemical use and handling restrictions; pollution control requirements; waste minimization considerations; and hazardous materials transportation, treatment, storage and disposal restrictions. If we fail to comply with any of the applicable environmental regulations, we may be subject to fines, suspension of production, alteration of our manufacturing processes, sales limitations, and criminal and civil liabilities. Existing or future regulations could require us to procure expensive pollution abatement or remediation equipment, to modify product designs, or to incur expenses to comply with environmental regulations. Any failure to control the use, disposal, or storage, or to adequately restrict the discharge of hazardous substances, could subject us to future liabilities and could have a material adverse effect on our business. Based on our periodic reviews of the operating policies and practices at all of our facilities, we believe that our operations are currently in compliance with applicable environmental laws and regulations.

We have been identified by the United States Environmental Protection Agency (“EPA”), state governmental agencies or other private parties as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), or equivalent non-U.S., state or local laws, for clean-up and response costs associated with certain sites at which remediation is required with respect to prior contamination. Because CERCLA or such non-U.S. and state statutes authorize joint and several liability, the regulatory authorities could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and other PRPs.

To resolve our liability at the sites at which we have been named a PRP, we have entered into various administrative orders and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. As is customary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur, such as the discovery of significant new information about site conditions.

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On June 3, 2010, AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford, Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New Bedford with respect to the satisfaction of AVX’s federal law requirements. The Massachusetts Department of Environmental Protection has jurisdiction over the balance of the environmental remediation at the Site. AVX has submitted its proposed remedy, but until the state has approved such proposal, AVX cannot determine if additional groundwater and soil remediation will be required, if substantial material will have to be disposed of offsite, or if additional remediation techniques will be required, any of which could result in a more extensive and costly plan of remediation. Further, the Site and the remediation may be subject to additional scrutiny under other statutory procedures which could also add to the cost of remediation. We have a remaining accrual of $14.2 million at March 31, 2018, representing our current estimate of the potential liability related to the remaining performance of environmental remediation actions at the Site and neighboring properties using certain assumptions regarding the plan of remediation. Until all parties agree and remediation is complete, we cannot be certain there will be no additional cost relating to the Site.

We had total reserves of approximately $19.2 million and $18.6 million at March 31, 2017 and March 31, 2018, respectively, related to various environmental matters and sites, including those discussed above. These reserves are classified in the Consolidated Balance Sheets as $3.9 million and $3.3 million in accrued expenses at March 31, 2017 and March 31, 2018, respectively, and $15.3 million in other non-current liabilities at both March 31, 2017 and March 31, 2018. The amounts recorded for identified environmental liabilities are based on estimates. Periodically, we review amounts recorded and adjust them based upon additional legal and technical information that becomes available. Uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could differ from our current estimates.

On April 19, 2016, the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order naming AVX Corporation, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at one time the site of operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. This Director’s Order follows a draft order issued on November 4, 2015. AVX has taken the position that any liability of Aerovox Canada for such site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek to enforce such Canadian order against AVX, or one of the other responsive parties will initiate a private suit, and whether, in such an event, AVX will have any liability under applicable law. AVX intends to contest any such course of action that may be taken by the MoE.

We also operate, or did at one time, on other sites that may have potential future environmental issues as a result of activities at sites during AVX’s long history of manufacturing operations or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. A separate account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and do not reflect any possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing at multiple party sites or indemnification of our liability by a third party.

We are not involved in any pending or threatened environmental proceedings that would require curtailment of our operations. We continually expend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in compliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily have knowledge of all past occurrences on sites that we currently occupy. New environmental regulations may be enacted and we cannot determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future.

Company Information and Website

We file annual, quarterly, and current reports, proxy statements, and other documents with the SEC under the Securities Exchange Act of 1934 (the “Exchange Act”). The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov.

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In addition, our Company website can be found on the Internet at www.avx.com. Copies of each of our filings with the SEC including, but not limited to Form 10-K, Form 10-Q, and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC. To view the reports from our website, go to “Investors,” then to “SEC Filings.”

The following corporate governance related documents, as well as others, are also available free of charge on our website:

● Code of Business Conduct and Ethics

● Code of Business Conduct and Ethics Supplement Applicable to the Chief Executive Officer, Chief Financial Officer, Controllers and Financial Managers

● Corporate Governance Guidelines

● Audit Committee Charter

● Compensation Committee Charter

● Special Advisory Committee Charter

● Contact the Board – Whistleblower and Ethics Hotline Procedures

To review these documents, go to our website and select “About,” followed by “Corporate Information,” and then “Corporate Governance.”

Executive Officers of the Registrant

Our executive officers are appointed annually by our Board of Directors or, in some cases, appointed in accordance with our bylaws. Each officer holds office until the next annual appointment of officers or until a successor has been duly appointed and qualified, or until the officer’s death or resignation, or until the officer has otherwise been removed in accordance with our bylaws. The following table provides certain information regarding the current executive officers of the Company:

Name	Age	Position
John Sarvis	68	Chief Executive Officer and President
Jeffrey Schmersal	49	Chief Operating Officer
Kurt P. Cummings	62	Executive Vice President, Chief Financial Officer, and Treasurer
John Lawing	67	Senior Vice President and Chief Technology Officer
S. Willing King	55	Senior Vice President of Tantalum Products
Eric Pratt	58	Senior Vice President of Marketing
Evan Slavitt	60	Senior Vice President, General Counsel, and Corporate Secretary
Steven Sturgeon	49	Senior Vice President of Connector Products
Peter Venuto	65	Senior Vice President of Corporate Development

John Sarvis

Chief Executive Officer and President since April 2015. Chairman of the Board since 2016. Vice President of Ceramic Products from 2005 to 2015. Divisional Vice President – Ceramics Division from 1998 to 2005. Prior to 1998, held various Marketing and Operational positions. Employed by the Company since 1973.

Jeffrey Schmersal

Chief Operating Officer since April 2018. Senior Vice President since 2017. Divisional Vice President of Specialty Products from 2014 to 2017. Global Business Manager of various product groups from 2006 to 2014. Prior to 2006, held various Quality and Supply Chain positions. Employed by the Company since 1994.

Kurt P. Cummings

Executive Vice President since 2016. Chief Financial Officer and Treasurer since 2000. Senior Vice President from 2015 to 2016. Vice President from 2000 to 2015. Corporate Secretary from 1997 to 2016. Corporate Controller from 1992 to 2000. Prior to 1992, Partner with Deloitte & Touche LLP.

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John Lawing

Senior Vice President and Chief Technology Officer since 2015. Vice President and Chief Technology Officer from April 2014 to 2015. President and Chief Operating Officer from 2013 to March 2014. Vice President of Advanced Products from 2005 to April 2013. Divisional Vice President of Advanced Products from 2002 to 2005 and Divisional Vice President of Leaded Products from 1997 to 2002. Prior to 1997, held positions in Engineering, Technical, Operational, and Plant management. Employed by the Company since 1981.

S. Willing King

Senior Vice President of Tantalum Products since 2015. Vice President of Tantalum Products from 2013 to 2015. Deputy General Manager of Tantalum Products from 2012 to 2013. Vice President of Product Marketing from 2004 to 2012. Director of Product Marketing from 2000 to 2004. Prior to 2000, held positions in Technical Service, Sales, and Marketing. Employed by the Company since 1984.

Eric Pratt

Senior Vice President of Marketing since April 2017. Vice President of Kyocera Electronic Devices from 2015 to April 2017. Director of Marketing for Kyocera International Inc. from 2013 to 2015. Prior to 2013, held multiple positions in Sales and Marketing for the Company over 16 years.

Evan Slavitt

Senior Vice President, General Counsel and Secretary since 2016. Vice President of Business and Legal Affairs from 2007 to 2016. Trial lawyer in private practice in Massachusetts from 1987 to 2006. Assistant United States Attorney for the District of Massachusetts from 1983 to 1987. Trial Attorney with the Antitrust Division of the U.S. Department of Justice from 1981 to 1983.

Steven Sturgeon

Senior Vice President of Connector Products since April 2017. Divisional Vice President of Connector Products from 2015 to April 2017. Director of Corporate Strategic Planning from 2013 to 2015. Engineering Manager Corporate Strategic Planning from 2011 to 2013. Prior to 2011, held various Engineering and Operational positions. Employed by the company since 1995.

Peter Venuto

Senior Vice President of Corporate Development since May 2018. Senior Vice President of Sales since 2015. Vice President of Sales from 2009 to 2015. Vice President of North American and European Sales from 2004 to 2009. Vice President of North American Sales from 2001 to 2004. Divisional Vice President of Strategic Accounts from 1998 to 2000. Director of Strategic Accounts from 1990 to 1997. Director of Business Development from 1987 to 1989. Employed by the Company since 1987.

Item 1A. Risk Factors

From time to time, information provided by us, including, but not limited to, statements in this report, or other statements made by us or on our behalf, may contain “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from those anticipated.

Our businesses routinely encounter and address risks, some of which will cause our future results to be different – sometimes materially different – than we presently anticipate. Discussion about the important operational risks that our businesses encounter can also be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K. We wish to caution the reader that the following important risk factors and those factors described elsewhere in this report or other documents that we file or furnish to the SEC could cause our actual results to differ materially from those stated in forward-looking statements contained in this document and elsewhere. Below, we have described our current view of certain important strategic risks. These risks are not presented in order of importance or probability of occurrence. Our reactions to material future developments as well as our competitors’ reactions to those developments will affect our future results.

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We operate in a cyclical business, which could result in significant fluctuations in demand for our products

Cyclical changes in our customers’ businesses have, in the past, resulted in, and may in the future result in, significant fluctuations in demand for our products, selling prices, and our profitability. Most of our customers operate in cyclical industries. Their requirements for electronic components and interconnect, sensing and control devices fluctuate significantly as a result of changes in general economic conditions, technological changes, customer demand, and other factors. During periods of increasing demand, our customers typically seek to increase their inventory of our products to avoid production bottlenecks. When demand for their products peaks and begins to decline, as has happened in the past, they tend to reduce or cancel orders for our products while they use up accumulated inventory. Business cycles vary somewhat in different geographical regions and customer industries. Significant fluctuations in sales of our products affect our unit manufacturing costs and affect our profitability by making it more difficult for us to predict our production, raw materials, and shipping needs. Changes in demand mix, needed technologies, and end-use markets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and could adversely affect our operating results and financial condition. We are also vulnerable to general economic events or trends beyond our control, and our sales and profits may suffer in periods of weak demand.

We must consistently reduce costs to remain competitive and to address downward price trends

Our industry is intensely competitive, and prices for existing products tend to decrease over their life cycle. To remain competitive, we must achieve continuous cost reductions through process and material improvements. We must also be in a position to minimize our customers’ inventory financing costs and to meet their other goals for supply chain management. In addition, as a result of our efforts to streamline manufacturing and logistics operations and to enhance operations in lower operating cost regions we have incurred restructuring costs in the past and are likely to incur restructuring costs in the future in response to competitive pressures. If we are unsuccessful in implementing restructuring or other cost reduction plans, we may experience disruptions in our operations and incur higher ongoing costs, which may adversely affect our sales levels, financial condition, and operating results.

We attempt to improve profitability by operating in countries in which operating costs are lower; but the shift of operations to these regions may entail considerable expense and risk

Our strategy is aimed at achieving significant production cost savings through the transfer to and expansion of manufacturing operations in countries with lower operating costs, such as China, Czechia, El Salvador, India, Malaysia, Mexico, Romania, and Vietnam. During this process, we may experience under-utilization of certain factories in higher-cost regions and capacity constraints in plants and factories located in lower-cost regions. This under-utilization may result initially in production inefficiencies and higher overall costs. These costs also include those associated with compensation in connection with work force reductions and plant closings in the higher-cost regions, and start-up expenses, equipment relocation costs, manufacturing and construction delays, and increased depreciation costs in connection with the initiation or expansion of production in lower-cost regions. In addition, as we implement transfers of certain of our operations, we may experience labor strikes or other types of disruption due to lay-offs or termination of our employees in higher-cost countries.

Our global operations subject us to many different and complex laws and rules

Due to our global operations, we are subject to many laws governing international relations (including but not limited to the Foreign Corrupt Practices Act, the U.S. Export Administration Act the EU General Data Protection Regulation, and the U.K. Modern Anti-Slavery Act); which prohibit improper payments to government officials and restrict where and how we can do business, what information or products we can supply to certain countries, what personal information we can transfer, and what information we can provide to a non-U.S. government. Although we have procedures and policies in place that should mitigate the risk of violations of these laws, there is no guarantee that they will be sufficiently effective. If, and when we acquire new businesses we may not be able to ensure that the pre-existing controls and procedures meant to prevent violations of the rules and laws were effective, and we may not be able to implement effective controls and procedures to prevent violations quickly enough when integrating newly acquired businesses. Acquisitions of new businesses in new non-U.S. jurisdictions may also subject us to new regulations and laws, and we may face difficulties ensuring compliance with these new requirements.

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We encounter competition in substantially all areas of our business

We compete primarily on the basis of technology, product quality, price, sales terms, customer service, and delivery time. Competitors include large, diversified companies, some of which have substantial assets and financial resources, as well as medium to small companies. There can be no assurance that additional competitors will not enter into our existing markets, nor can there be any assurance that we will be able to compete successfully against existing or new competition.

We may not have adequate facilities to satisfy future increases in demand for our products

Our business is cyclical and in periods of a rising economy, we may experience intense demand for our products. During such periods, we may have difficulty expanding our manufacturing to satisfy demand. Factors that could limit such expansion include delays in procurement of manufacturing equipment, shortages of skilled personnel, physical constraints on expansion of our facilities, and shortages from our suppliers. If we are unable to meet our customers' requirements and our competitors sufficiently expand production, we could lose customers and/or market share. These losses could have an adverse effect on our financial condition and results of operations. Also, capacity that we add during upturns in the business cycle may result in excess capacity during periods when demand for our products recedes, resulting in inefficient use of capital which could also adversely affect us.

If we are unable to attract and retain qualified personnel, especially our design and technical personnel, we may not be able to execute our business strategy effectively.

Our future success depends on our ability to retain, attract and motivate qualified personnel, including our management, sales and marketing, finance, and especially our design and technical personnel. As the source of our technological and product innovations, our design and technical personnel represent a significant asset. Any inability to retain, attract or motivate such personnel could have a material adverse effect on our business and results of operations.

We must continue to develop new products and technology to remain competitive

Many of the fundamental technologies used in the electronics industry have been available for a long time. The market is subject to rapid changes in product designs and technological advances allowing for better performance and/or lower cost. New applications are frequently found for existing technologies, and new technologies occasionally replace existing technologies for some applications or open up new business opportunities in other areas of application. Successful innovation is critical for maintaining profitability in the face of potential erosion of selling prices for existing products. To address downward selling price pressure for our products and to meet market requirements, we must continue to develop innovative products and production techniques. Sustaining and improving our profitability depends a great deal on our ability to develop new products quickly and successfully meet changing customer specifications. Non-customized commodity products are especially vulnerable to price pressure, but customized products have also experienced selling price pressure over time. We have traditionally addressed downward pricing trends in part by offering products with new technologies or applications that offer our customers advantages over older products. We also seek to maintain profitability by developing products to our customers’ specifications that are not readily available from competitors. Developing and marketing these products requires start-up costs that may not be recouped if those new products or production techniques are not successful. There are numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market new products and applications in a timely fashion to satisfy customer demands. If this occurs, we could lose customers and experience adverse effects on our results of operations.

In addition to our own research and development initiatives, we may invest in technology start-up enterprises, in which we may acquire a controlling or non-controlling interest but whose technology would be available to be commercialized by us. There are numerous risks in investments of this nature, including the limited operating history of such start-up entities, their need for capital, their limited or absence of production experience, as well as the risk that their technologies may prove ineffective or fail to gain acceptance in the marketplace. There can be no assurance that our current and future investments in start-up enterprises will prove successful.

Our operating results are sensitive to raw material and resale product availability, quality, and cost

Many of our products require the use of raw materials that are available from only a limited number of regions around the world, are available from only a limited number of suppliers, or may be subject to significant fluctuations in market prices. Our results of operations may be adversely affected if we have difficulty obtaining these raw materials, our key suppliers experience financial difficulties, the quality of available raw materials deteriorates, or there are significant price increases for these raw materials. For example, the prices for tantalum, platinum, silver, nickel, gold, copper, palladium, and other raw materials that we use in the manufacture of our products are subject to fluctuation and have experienced significant variability in the past. Our inability to recover increased costs through increased sales prices could have an adverse impact on our results of operations. For periods in which the prices for these raw materials rise, we may be unable to pass on the increased cost to our customers, which would result in decreased sales margins for the products in which they are used. For periods in which sales margins are declining, we may be required, as has occurred in the past, to write down our inventory carrying cost of these raw materials and products. Depending on the extent of the difference between market price and our carrying cost, the write-down could have a significant adverse effect on our results of operations.

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We resell products manufactured by other component and interconnect product manufacturers. Should these manufacturers experience difficulties supplying the products that we resell, or such suppliers use other channels to market their products, we could experience lower sales, which could have an adverse effect on our results of operations.

Our sales to distribution sales channel customers may fluctuate

Selling products to our customers in the electronic component distribution sales channel has associated risks, including, without limitation, that sales can be negatively impacted on a short-term basis because of changes in distributor inventory levels; these changes may be unrelated to the purchasing trends by the end customer. In the past, we have gone through cycles of inventory correction as distributors increase or decrease their supply chain inventories based upon their anticipated market needs and economic conditions.

Our backlog is subject to customer cancellation

We generally do not obtain firm, long-term purchase commitments from our customers. Uncertain economic and geopolitical conditions have resulted in, and may continue to result in, some of our customers delaying the delivery of products that we manufacture or source for them and placing purchase orders for lower volumes of products than previously anticipated. Many of the orders that comprise our backlog may be canceled by our customers without penalty. Our customers may on occasion, order products from multiple sources to ensure timely delivery when delivery lead times are particularly long and product delivery is a concern. They may cancel orders when business is weak and inventories are excessive, a situation that we have experienced during periods of economic slowdown. Therefore, we cannot be certain that the amount of our backlog does not exceed the level of sales that will ultimately be made. Our results of operations could be adversely impacted if customers cancel a material portion of orders in our backlog.

Our growth strategy includes growth through acquisitions, which may involve significant risks

From time to time, we make strategic acquisitions of other companies or businesses as we believe such acquisitions can help to position us to take advantage of growth opportunities. Such acquisitions could introduce significant risks and uncertainties, including risks related to integrating the acquired businesses and achieving benefits from the acquisitions. More particularly, risks and uncertainties of an acquisition strategy could include: (1) difficulties in integrating newly-acquired businesses and operations in an efficient and effective manner; (2) challenges in achieving strategic objectives, cost savings, and other benefits from acquisitions; (3) risk that markets do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in those markets; (4) potential loss of key employees of the acquired businesses; (5) risk of diverting the attention of senior management from our operations; (6) risks of entering new markets in which we have limited experience; (7) risks associated with integrating financial reporting and internal control systems; (8) difficulties in expanding information technology systems and other business processes to accommodate the acquired businesses; (9) future impairments of goodwill and other intangible assets of an acquired business; (10) unanticipated legal and regulatory issues in the jurisdictions of the acquired business; (11) liabilities for activities of the acquired businesses, including environmental, tax, and other known and unknown liabilities; and (12) additional costs related to plant closures, employee terminations, etc. could be incurred to create operating inefficiencies for AVX and a newly acquired entity.

Changes in our environmental liability and compliance obligations may adversely affect our operations or financial condition

Our manufacturing operations, products, and/or product packaging are subject to environmental laws and regulations governing air emissions; wastewater discharges; the handling, disposal, and remediation of hazardous substances, wastes, and certain chemicals used or generated in our manufacturing process; employee health and safety; labeling or other notifications with respect to the content or other aspects of our processes, products, or packaging; restrictions on the use of certain materials in or on design aspects of our products or product packaging; and responsibility for disposal of products or product packaging. We also operate, or did at one time, at sites that may have potential future environmental issues as a result of activities at such sites during the long history of manufacturing operations of AVX or its corporate predecessor, or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. We establish reserves for specifically identified potential environmental liabilities when the liabilities are probable and reasonably estimated. Nevertheless, there can be no assurance we will not be obligated to address environmental matters that could have a material adverse impact on our operations or financial condition. In addition, new environmental regulations may be enacted and we cannot presently determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with these regulations. In order to resolve liabilities at various sites, we have entered into various administrative orders and consent decrees, some of which may be, under certain conditions, reopened or subject to renegotiation. See “Environmental Matters” in Item 1 elsewhere in this Form 10-K for additional information.

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Changes in regulatory compliance obligations may adversely affect our operations

The Dodd-Frank Act, signed into law on July 21, 2010, includes Section 1502, which required the SEC to adopt additional disclosure requirements related to the source of certain “conflict minerals” for issuers for which such “conflict minerals” are necessary to the functionality or production of a product manufactured, or contracted to be manufactured, by that issuer. The SEC issued a final rule on August 22, 2012. The minerals covered by the rules are commonly referred to as “3TG” and include tin, tantalum, tungsten, and gold. We use many of these materials in our production processes. The rule requires companies to perform due diligence, disclose, and report whether or not such minerals originate from the DRC and adjoining countries. We have incurred and will continue to incur additional costs to comply with these disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our products. Global supply chains are complicated with multiple layers and suppliers between the mine and the final product.

Historically, and prior to our participation in “Solutions for Hope,” we had a policy of not using tantalum sourced from the DRC or any other area in which insurgents or similar groups benefit from the sale of minerals. We continue to conduct extensive supply chain investigations to reduce risk and support supply chain sustainability in the region using the OECD guiding principles. AVX was the first in its industry to validate a “closed tantalum pipe” process, assuring all tantalum products contain only tantalum from smelters that have been independently verified under the Conflict Free Smelter program in accordance with the principles of the Dodd-Frank legislation and the current OECD guidelines.

Since December 2011, AVX has only sourced tantalum powder and wire used in its tantalum capacitors from smelters that are compliant with the RBC/GeSI conflict-free smelter program. In 2012, AVX began using Validated Conflict-Free Tantalum, which comes from verified sources in the DRC and surrounding countries. During 2016 and in the spirit of continuous improvement envisioned and enshrined by the OECD Due Diligence guidance, AVX continues to improve supply chain sustainability and reduce compliance cost by field-testing a new alternate traceability platform (“BSP”) and proof of concept of a geological science technique for mineral matching (Geological Passporting) in the DRC region. The result of the BSP pilot demonstrated that a new compliance model is possible using technology for the reporting, analysis, chain of custody and Geo Passporting for validation. Please refer to the Solutions for Hope website for more information.

Our continued efforts affirm our commitment to supply products with conflict-free minerals to our customers and to comply fully with the OECD guidelines and SEC regulations. The implementation of Rule 1502 has not had a material adverse effect on our ability to source raw materials or manufacture products containing the “3TG” metals. We filed our most recent Form SD with the SEC on May 25, 2017.

We use significant amounts of electrical energy and processed ores in our production processes. Although its status is uncertain, the Kyoto Protocol is an international agreement that purports to set binding targets for signatory industrialized countries for reducing greenhouse gas emissions. Further, a number of governments or governmental bodies have introduced or are contemplating legislative and regulatory changes in response to the potential impacts of climate change that would limit and reduce greenhouse gas emissions. Any significant, sustained increase in energy costs could result in increases in our capital expenditures, operating expenses, and costs of important raw materials resulting in an adverse effect on our results of operations and financial condition.

The potential physical impacts of climate change on our operations are highly uncertain, and will be particular to the geographic circumstances. These effects may adversely influence the cost, production, and financial performance of our operations.

The European Union has adopted Regulation 2016/679 of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) (“GDPR”), which will become effective on May 25, 2018. Other nations are similarly enacting new or updated privacy laws and regulations. It is still unclear how these privacy laws will impact our operations, but we expect that substantial resources will be required to conform our operations to comply with these laws.

Brexit adds additional uncertainty in one of our key markets

On June 23, 2016, the United Kingdom (U.K.) held a referendum in which voters approved an exit from the E.U., commonly referred to as “Brexit” and the U.K. Prime Minister has delivered a notice of withdrawal to the E.U. As a result, the British government is negotiating the terms of the U.K.’s future relationship with the E.U.  Although it is unknown what those terms will be, it is possible that there will be greater restrictions on imports and exports between the U.K. and E.U. countries and increased regulatory complexities. These changes may adversely affect our operations and financial results.

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Our results may be negatively affected by foreign currency exchange rates

We conduct business in several international currencies through our worldwide operations and, as a result, are subject to foreign exchange exposure due to changes in exchange rates of the various currencies. Volatility in exchange rates can affect our sales, gross margins, and stockholders’ equity both positively and negatively. In order to minimize the effects of movements in currency exchange rates, we enter into forward exchange contracts to hedge external and intercompany foreign currency transactions. In addition, we attempt to minimize currency exposure risk by producing our products in the same country or region in which the products are sold, thereby generating revenues and incurring expenses in the same currency. There can be no assurance that our approach will be successful, especially in the event of a significant and sudden decline in the value of any of the international currencies of our worldwide operations. We do not engage in purchasing forward exchange contracts for speculative purposes.

A significant portion of our cash, cash equivalents, and short-term investments are held by our non-U.S. subsidiaries

We generate a significant amount of cash and profits from our non-U.S. subsidiaries. Approximately 71% of our cash and investment securities are held by our foreign subsidiaries.

The Tax Cuts and Jobs Act (“TCJA”), enacted on December 22, 2017, transitions the U.S. from a worldwide tax system to a territorial tax system. Under previous law, companies could indefinitely defer U.S. income taxation on unremitted foreign earnings. The TCJA imposes a one-time transition tax on deferred foreign earnings of 15.5% for liquid assets and 8% for illiquid assets, payable in defined increments over eight years. As a result of this requirement, we expect to pay approximately $75.7 million over an eight year period, net of estimated applicable foreign tax credits.

As a result, previously deferred foreign earnings may now be repatriated to the United States without additional U.S. federal taxation. However, any such repatriation could incur withholding and other foreign taxes in the source and intervening foreign jurisdiction.

Our operating results may be adversely affected by non-U.S. operations

We have significant international operations and our operating results and financial condition could be adversely affected by economic, political, health, regulatory, and other circumstances existing in foreign countries in which we operate. International manufacturing and sales are subject to inherent risks, including production disruption by employee union or works council actions, changes in local economic or political conditions, the imposition of currency exchange restrictions, unexpected changes in regulatory environments, potentially adverse tax law changes, changes in trade, import or export laws and regulations, and the exchange rate risk discussed above. Further, we have operations, suppliers, and customers in countries that are in the Pacific Basin which may be more susceptible to certain natural disasters, including earthquakes, tsunamis, and typhoons. Although we have operations around the world, a significant natural event could disrupt supply or production or significantly affect the market for some or all of our products. There can be no assurance that these factors will not have an adverse impact on our production capabilities or otherwise adversely affect our business and operating results.

In addition to specific country risks, our operations and sales are dependent on an integrated global operation. As a result, disruptions resulting from inter-governmental trade disputes, imposition of tariffs, imposition of trade sanctions, and direct conflict in locations such as the Korean peninsula could adversely affect our operations, growth, or profitability.

Our products are subject to stringent specifications and operating tolerances

All of our products are built to specifications and tested for adherence to such specifications before shipment to customers. We warrant that our products will meet such specifications. In the past, we have not incurred significant warranty claims. However, we have seen an increasing trend in the marketplace for claims related to end market product application failures or end-user recall or damage claims related to product defects, which could result in future claims that have an adverse impact on our results of operations.

Our ability to maintain our competitiveness depends, in part, on our maintaining the proprietorship of our technology

We will protect our proprietary rights as long as our proprietary technologies are maintained as trade secrets or are covered by recognized patents. We properly apply for, and will continue to apply for, patents covering our technologies. However, each patent application may not result in a successful patent issuance and competitors may develop similar, alternative, or new technologies, which reduce the positive impact of our patents. In addition, competitors may challenge our patents, as has happened in the past, or seek to invalidate them, or operate in certain countries who do not recognize our legal patent rights. The protection of intellectual property involves multiple legal and factual issues, which makes the process difficult and potentially expensive.

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We will vigorously defend our patent and intellectual property rights and may be involved in future litigation alleging our infringement of such rights from others. We may seek various remedies to resolve these claims, including the offering or purchasing of licenses in an acceptable manner. An unfavorable outcome regarding these rights could have an adverse effect on our business and our results of operations.

Fluctuations in the market values of our investment portfolio could adversely affect our financial condition and operating results

Although we have not recognized any material losses related to our cash equivalents, short-term investments, or long-term investments, future declines in the market values of such investments could have an adverse effect on our financial condition and operating results. Given the global nature of our business, we have investments both domestically and internationally. Additionally, a portion of our overall investment portfolio includes investment securities in the financial sector. If the issuers of such investments default on their obligations or their credit ratings are negatively impacted by liquidity, credit deterioration or losses, poor financial results, or other factors, the value of our cash equivalents, short-term investments, and long-term investments could decline and have an adverse effect on our financial condition and operating results. In addition, our ability to find investments that are both safe and liquid and that provide a reasonable return may be impaired. This could result in lower interest income and/or higher other-than-temporary impairments.

Credit risk on our accounts receivable could adversely affect our financial condition and operating results

Our outstanding trade receivables are not covered by collateral or credit insurance. While we have procedures to monitor and limit exposure to credit risk on our trade receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid losses, which could have an adverse effect on our financial condition and operating results.

Counterparty non-performance to derivative transactions could adversely affect our financial condition and operating results

We evaluate the credit quality of potential counterparties to derivative transactions and only enter into agreements with those deemed to have minimal credit risk at the time the agreements are executed. Our foreign exchange hedge portfolio is diversified across several credit line banks and we carefully monitor the amount of exposure we have with any given bank. We also periodically monitor changes to counterparty credit quality as well as our concentration of credit exposure to individual counterparties. In some cases, we have master netting agreements that help reduce the risk of counterparty exposures. We do not hold or issue derivative financial instruments for trading or speculative purposes. Nevertheless, a credit crisis could have an impact on our hedging contracts if our counterparties are forced to file for bankruptcy or are otherwise unable to perform their obligations. If we are required to terminate hedging contracts prior to their scheduled settlement dates, we may be required to recognize losses that could have an adverse effect on our financial condition and operating results.

Returns on pension and retirement plan assets and interest rate changes could affect our operating results

The funding position of our defined benefit pension plans is influenced by the performance of the financial markets, and the discount rate used to calculate our pension obligations for funding and expense purposes. In the past, declines in the financial markets have negatively affected the value of the assets in our defined benefit pension plans. In addition, lower discount rates for actuarial purposes may result in increased pension contributions and expense.

Funding obligations are generally determined under government regulations and measured periodically based on the value of the assets and liabilities determined on a specific date. If the financial markets do not provide the expected long-term returns, we could be required to make larger contributions. The financial markets can be, and in the recent past have been, very volatile, and therefore our estimate of future contribution requirements can change at any time. In a low interest rate environment, the likelihood of higher contributions in the future increases.

We may not generate sufficient future taxable income, which may require additional valuation allowances against our deferred tax assets

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax liabilities together with assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheet.

We assess the likelihood that our deferred tax assets will be recoverable as a result of future taxable income and, to the extent we believe that recovery is not more likely than not, we establish a valuation allowance.

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We have recorded valuation allowances due to uncertainties related to our ability to realize some of our deferred tax assets, primarily consisting of certain net operating losses carried forward before they expire. The valuation allowances are based on our estimates of future taxable income over the periods that our deferred tax assets will be recoverable.

We also record provisions for certain foreign and domestic federal and state tax contingencies based on the likelihood of obligation, when needed. In the normal course of business, we are subject to challenges from U.S. and foreign tax authorities regarding the amount of taxes due. These challenges may result in adjustments to the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may influence our ability to utilize tax benefits as well as the estimated taxes to be paid in future periods. In the event that actual results differ from our estimates, we may need to adjust tax accounts and related payments, which could materially affect our financial condition and results of operations.

If we are unable to generate sufficient future taxable income in certain jurisdictions, or if there is a significant change in the actual tax rates or the time period within which the underlying temporary differences become taxable or deductible, we could be required to increase our valuation allowances resulting in an increase in our effective tax rate and have an adverse impact on future operating results.

We are increasingly dependent on information technology, and if we are unable to protect against service interruptions, data corruption, cyber-based attacks, or network security breaches our operations could be disrupted and we could incur significant costs and reputational harm as a result

We rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic and financial information; to manage a variety of business processes and activities; and to comply with regulatory, legal, and tax requirements. We also depend on our information technology infrastructure for digital marketing and sales activities and for electronic communications among our locations, personnel, customers, and suppliers around the world. Many of the information technology systems used by us globally have been in place for many years and not all hardware and software is currently supported by vendors. These information technology systems are susceptible to damage, disruptions, or shutdowns due to failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, or catastrophic events. If our information technology systems suffer severe damage, disruption, or shutdown and our business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, and results of operations may be materially affected, and we could experience delays in reporting our financial results.

Third-party service providers, such as distributors, subcontractors, vendors, and data processors have access to certain portions of our sensitive data. In the event that these service providers do not appropriately protect our data, the result could be a security breach or loss of our data. Any such loss of data by our third-party service providers could have a material adverse impact on our business and results of operations.

In addition, if we are unable to prevent security breaches, we may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information belonging to us or to our customers or suppliers. In addition, the disclosure of non-public sensitive information through external media channels could lead to the loss of intellectual property or damage our reputation and brand image.

We are also in the process of converting certain information technology networks and systems and consolidating certain global systems. If such projects fail, or if unexpected technical difficulties arise, our operations and financial systems could be adversely affected. Further, we could incur additional costs or require additional technical support to resolve such difficulties.

Changes in global geopolitical and general economic conditions and other factors beyond our control may adversely affect our business

The following factors beyond our control could adversely affect our business:

● A global economic slowdown affecting any one, or all, of our markets.

● Rapid escalation of the cost of regulatory compliance and litigation.

● Unexpected government policies and regulations affecting us or our significant customers’ sales or production facilities.

● Regional conflicts or actions, including, but not limited to, armed conflict and trade wars that could affect our, or our customer's or vendor's, production and delivery capabilities.

● Unforeseen interruptions to our business with our significant customers and suppliers resulting from labor strikes, financial instabilities, computer malfunctions, environmental disruptions, natural disasters, inventory excesses or other unforeseen events or circumstances.

We operate in a continually changing business environment and new factors emerge from time to time. Other unknown and unpredictable factors also could have either adverse or positive effects on our future results of operations or financial condition.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties

Our fixed assets include manufacturing plants, warehouses, and machinery and equipment. In many instances, the machinery and equipment have been manufactured to our specifications and/or have special adaptations. Our plants, warehouses, machinery, and equipment are in good operating condition and are well maintained. Substantially all of our facilities are in regular use. We consider the present level of fixed assets, along with planned capital expenditures, as suitable and adequate for our operations in the current business environment. Excluding acquisition related spending, our capital expenditures for plant and equipment were $48.1 million in fiscal 2016, $66.3 million in fiscal 2017 and $100.5 million in fiscal 2018.

We believe that our facilities are suitable and adequate for the business conducted therein and are being utilized appropriately for their intended purposes. Utilization of the facilities varies based on demand for the products. We continuously review our anticipated requirements for facilities and, based on that review, may from time to time construct, acquire, or lease additional facilities and/or dispose of existing facilities.

AVX manufactures products worldwide to support the Commercial, Automotive, Aerospace, Medical, and other markets. The appropriate ISO standard based on market requirements are in place and include but are not limited to ISO9001, AS9100 and ISO13485.

Virtually all of our manufacturing, research and development, and warehousing facilities could at any time be involved in the manufacturing, sale, or distribution of electronic components, interconnect, sensing and control device products or resale products. The following is a list of our significant facilities and related information.

Location	Approximate Square Footage	Type of Interest	Description of Use
UNITED STATES
Fountain Inn, SC	370,000	Owned	Headquarters/Manufacturing/Warehouse/Research
Biddeford, ME	72,000	Owned	Manufacturing
Huntington Station, NY	73,600	Owned	Manufacturing/Research
Jacksonville, FL	100,000	Owned	Manufacturing
Myrtle Beach, SC	150,000	Owned	Manufacturing
NON U.S.
Salzburg, Austria	80,800	Owned	Warehouse/Research/Development
Tianjin, China	520,000	Owned	Manufacturing
Bzenec, Czechia	200,000	Owned	Manufacturing
Lanskroun, Czechia	542,000	Owned	Manufacturing/Research
Uherske Hradiste, Czechia	336,000	Owned	Manufacturing
San Salvador, El Salvador	420,000	Owned	Manufacturing
Saint-Apollinaire, France	322,000	Leased	Manufacturing/Research
Betzdorf, Germany	111,000	Owned	Manufacturing
Werne, Germany	192,000	Owned	Manufacturing/Research/Development
Jerusalem, Israel	88,000	Leased	Manufacturing/Research
Adogawa, Japan	206,000	Owned	Manufacturing/Research/Warehouse
Penang, Malaysia	190,000	Owned	Manufacturing/Research
Juarez, Mexico	218,000	Owned	Manufacturing
Coleraine, N. Ireland	185,000	Owned	Manufacturing/Research
Timisoara, Romania	172,400	Leased	Manufacturing/Warehouse
Bac Ninh, Vietnam	108,500	Leased	Manufacturing/Administration

In addition to the foregoing, we have many other less significant manufacturing, research, warehouse, sales office, and administrative office locations throughout the world. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities, if necessary.

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Item 3. Legal Proceedings

See “Environmental Matters” in "Item 1. Business" elsewhere in this Form 10-K for a discussion of our involvement as a PRP at certain environmental clean-up sites.

On April 25, 2013, AVX was named as a defendant in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v. AVX Corporation. This case alleged that certain AVX products infringe on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first phase of a segmented trial and a mixed verdict in the second phase of a segmented trial, and found damages to Greatbatch in the amount of $37.5 million. The damages award was later vacated by the court on March 30, 2018.  Profit from operations for the year ended March 31, 2018 reflects a favorable accrual adjustment of $1.5 million related to this patent infringement case.  The amount of damages will be subject to further legal proceedings including a potential trial on damages, which we would expect to occur in fiscal 2019. AVX is continuing to litigate the case.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent infringement case filed in the United States District Court of the Southern District of California captioned Presidio Components, Inc. v. American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016, the jury returned a verdict in favor of the plaintiff and found damages to Presidio. On August 17, 2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction whereby ATC was allowed to continue to sell the disputed product until March 17, 2017 to anyone who was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent injunction were subject to court mandated intellectual property damages for each product sold. In December, 2017, a panel of the Federal Circuit vacated the damage award to Presidio, vacated the injunction, and remanded the case for further proceedings to determine damages limited to “reasonable royalties” and to reconsider the requested injunction in light of its opinion and any additional facts.

As of March 31, 2018, we had total reserves of $76.5 million plus accrued interest in accrued expenses with respect to the two intellectual property cases discussed above. The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to reflect additional information that becomes available. Accordingly, the actual costs related to these cases could differ from our current estimates.

During calendar year 2014, AVX was named as a co-defendant in a series of cases filed in the United States and in the Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States, state and Canadian antitrust laws asserting that AVX and numerous other companies were participants in alleged price-fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on October 2, 2014. Some plaintiffs have broken off from the United States class action and filed actions on their own, although AVX is not named in all of these independent actions. The cases in Canada have not been consolidated. All of these cases are still in progress. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes, warranty claims, and legal proceedings arising in the normal course of business. While we cannot predict the outcome of these other disputes and proceedings, we believe, based upon a review with legal counsel, that none of these other disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss), or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that may arise and their potential impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for Common Stock

Our common stock is listed on the New York Stock Exchange and trades under the symbol “AVX.” At May 15, 2018, there were 282 holders of record of the Company's common stock. In addition, there were numerous beneficial holders of the common stock, representing persons whose stock is held in nominee or “street name” accounts through brokers. The following table presents the high and low sale prices for our common stock on the New York Stock Exchange and the dividends declared per common share for each quarter for the fiscal years ended March 31, 2017 and March 31, 2018. Future dividends, if any, will be determined by the Company’s Board of Directors and may depend on the Company’s future profitability and anticipated operating cash requirements.

	Common Stock Price Range								Dividends Declared
	2017				2018				Per Share
	High		Low		High		Low		2017		2018
First Quarter	$	14.24	$	11.77	$	17.72	$	15.85	$	0.105	$	0.110
Second Quarter		14.14		13.04		18.44		16.12		0.105		0.110
Third Quarter		16.07		13.58		20.22		16.92		0.110		0.115
Fourth Quarter		16.65		15.38		19.55		16.25		0.110		0.115

The name, address, and phone number of our stock transfer agent and registrar is:

The American Stock Transfer and Trust Company, LLC

6201 15^th Avenue

Brooklyn, NY 11219

1-718-921-8300

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Stock Performance Graph

The following chart shows, from the end of fiscal year 2013 to the end of fiscal year 2018, changes in the value of $100 invested in each of the Company’s common stock, Standard & Poor’s 500 Composite Index, and a peer group consisting of two companies whose businesses are representative of our business segments. The companies in the peer group are Kemet Corporation and Vishay Intertechnology, Inc.

Cumulative Total Return
	3/31/13		3/31/14		3/31/15		3/31/16		3/31/17		3/31/18
AVX - NYSE	$	100	$	114	$	127	$	115	$	155	$	161
S & P 500	$	100	$	122	$	137	$	140	$	164	$	187
Peer Group	$	100	$	108	$	99	$	85	$	138	$	168

Purchases of Equity Securities by the Issuer

On October 17, 2007, the Board of Directors of the Company authorized the repurchase of up to 5,000,000 shares of our common stock from time to time on the open market. The repurchased shares are held as treasury stock and are available for general corporate purposes. The Company did not repurchase any shares during fiscal 2018. As of March 31, 2018, there were 3,067,074 shares that may be repurchased under this program.

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Item 6. Selected Financial Data

The following table sets forth selected consolidated financial data for AVX for the five preceding fiscal years ended March 31. The selected consolidated financial data for the five fiscal years ended March 31 are derived from AVX’s audited consolidated financial statements. The consolidated financial data set forth below should be read in conjunction with AVX’s consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.

Selected Financial Data

(in thousands, except per share data)

	Fiscal Year Ended March 31,
	2014			2015			2016		2017		2018
OPERATING RESULTS DATA:
Net sales	$	1,442,604		$	1,353,228		$	1,195,529	$	1,312,661	$	1,562,474
Cost of sales		1,163,770			1,024,659			906,460		1,027,906		1,243,612
Gross profit		278,834			328,569			289,069		284,755		318,862
Selling, general and administrative expenses		119,670			115,820			119,767		117,598		140,528
Legal and environmental charges		-			-			45,318		3,600		(1,500	)
Profit from operations		159,164			212,749			123,984		163,557		179,834
Interest income		4,899			4,554			5,003		7,381		12,778
Other, net		(706	)		1,296			3,165		4,011		(299	)
Income before income taxes		163,357			218,599			132,152		174,949		192,313
Provision for (benefit from) income taxes		36,320			(7,272	)		30,617		49,164		187,403
Net income	$	127,037		$	225,871		$	101,535	$	125,785	$	4,910
Income per share:
Basic	$	0.75		$	1.34		$	0.61	$	0.75	$	0.03
Diluted	$	0.75		$	1.34		$	0.60	$	0.75	$	0.03
Weighted average common shares outstanding:
Basic		168,473			168,148			167,797		167,506		168,262
Diluted		168,658			168,402			167,961		167,837		168,925
Cash dividends declared per common share	$	0.37		$	0.41		$	0.42	$	0.43	$	0.45

	As of March 31,
	2014		2015		2016		2017		2018
BALANCE SHEET DATA:
Working capital	$	1,606,789	$	1,478,243	$	1,506,589	$	1,620,337	$	1,407,161
Total assets		2,384,988		2,459,015		2,409,819		2,477,413		2,672,766
Stockholders' equity		2,047,685		2,131,963		2,177,106		2,216,479		2,243,443

	Fiscal Year Ended March 31,
	2014		2015		2016		2017		2018
OTHER DATA:
Capital expenditures	$	26,805	$	26,599	$	48,103	$	66,288	$	100,537
Research, development and engineering expenses		26,240		25,390		28,300		30,946		41,778

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

AVX Corporation is a leading worldwide manufacturer, supplier, and reseller of a broad line of electronic components and interconnect, sensing and control devices, and related products. These products manufactured or resold by AVX are used in virtually all types of end use products, including those in telecommunications, automotive, transportation, energy harvesting, consumer electronics, military/aerospace, medical, computer, and industrial markets. We have five main product groups: Ceramic Components; Tantalum Components; Advanced Components; Interconnect, Sensing and Control Devices (formerly AVX Interconnect); and Kyocera Electronic Devices (“KED”). These product lines are organized into three reportable segments: Electronic Components, Interconnect, Sensing and Control Devices, and KED Resale.

Consolidated revenues for the fiscal year ended March 31, 2018 were $1,562.5 million compared to consolidated revenues of $1,312.7 million for the fiscal year ended March 31, 2017. During fiscal 2018, we saw an increase in sales due to a number of factors, including the effect of acquisitions and higher volumes across almost all of our product groups resulting from improved global market conditions reflective of higher overall demand, primarily in the automotive, defense, industrial, and networking markets. The increase in revenue includes sales of $193.3 million in our Interconnect, Sensing and Control Devices segment and $12.7 million in our Electronic Components segment that are attributable to our acquisition of the AB Electronic sensing and control business ("S&C") and Ethertronics, Inc. ("Ethertronics"), respectively. In addition, approximately $42.5 million of the increase in revenues is a result of the currency movement due to the strength of the Japanese Yen and Euro in relation to the U.S. Dollar when compared to the same period last year.

Profit from operations for the year ended March 31, 2018 reflects a favorable accrual adjustment of $1.5 million related to an ongoing patent infringement case.

Profit from operations for the fiscal year ended March 31, 2017 includes post judgment charges of $34.9 million related to intellectual property damages awards resulting from litigation with respect to a patent infringement case filed in the United States District Court for the Southern District of California by Presidio Components, Inc. (“Presidio”). Net sales for the fiscal year ended March 31, 2017 includes $21.4 million from increased sales prices related to the affected products which have the effect of partially offsetting the effect of court awarded damages on all pre- and post-verdict sales of the product subject to the intellectual property damages awards, resulting in a net impact on profit from operations of $13.5 million for fiscal 2017.

Additionally, profit from operations for the fiscal year ended March 31, 2017 reflects a charge of $3.6 million related to estimated environmental remediation costs resulting from legacy environmental issues at an inactive property.

Profit from operations for the fiscal year ended March 31, 2016 reflects charges of $45.3 million, of which $37.8 million is related to amounts awarded in patent infringement cases and $7.5 million is related to the settlement of certain litigation involving legacy environmental issues.

In fiscal 2018, we generated $195.5 million of cash from operating activities. We used cash generated from operations to fund $83.1 million of general working capital requirements and $100.5 million of property and equipment purchases. We continued to use our resources to provide value to our stockholders by paying $290.3 million, net of cash and debt acquired, in connection with the two business acquisitions and dividends of $75.7 million during fiscal year 2018. Our financial position remains strong with approximately $827.2 million of cash, cash equivalents, and securities investments and no borrowings as of March 31, 2018.

We remain committed to investing in new products and improvements to our production facilities, manufacturing capacity and processes as well as continued investment in research, development, and engineering in order to provide our customers with new generations of electronic component and interconnect, sensing and control solutions. We are currently producing sophisticated electronic components and other devices necessitated by the breadth and increase in functionality of the electronics included in products such as cellular phones, wearable electronic devices, tablets, ultrabooks, netbooks, automobiles, planes, industrial equipment, medical devices, and renewable energy products that are manufactured by our customers. We have continued to focus on the sale of value-added electronic components and interconnect, sensing and control solutions to serve these expanding markets and enhance our operating margins. We are also focused on controlling and reducing costs to accommodate market sales price forces and offset rising operating costs. We do this by investing in automated manufacturing technologies, enhancing manufacturing materials and efficiencies, and rationalizing our production capabilities around the world. We believe that these strategies enable us to adapt quickly and benefit as market conditions change in order to provide stockholder value.

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During the fiscal year ended March 31, 2018 we completed two acquisitions. We may consider additional strategic acquisitions of other companies or businesses in the future in order to expand our product offerings or otherwise improve our market position and cost structure. We evaluate potential acquisitions in order to position ourselves to take advantage of profitable growth opportunities.

Outlook

Near-Term:

With uncertain global geopolitical and economic conditions, it is difficult to quantify expectations for fiscal 2019. Near-term results for us will depend on the impact of the overall global geopolitical and economic conditions and their impact on telecommunications, information technology hardware, automotive, consumer electronics, and other electronic markets as well as our effectiveness in integrating our acquisitions. Looking ahead, visibility is low and forecasting is a challenge in this uncertain and volatile market. We expect to see typical sales price pressure in the markets we serve due to competitive activity. In response to anticipated market conditions, we expect to continue to focus on cost management and product line rationalization to maximize earnings potential. We also continue to focus on process improvements and enhanced production capabilities in conjunction with our focus on the sales of value-added electronic components to support today’s advanced electronic use products. If current global geopolitical and economic conditions worsen, the overall impact on our customers as well as end-user demand for electronic products could have a significant adverse impact on our near-term results.

In December 2016, Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement of its intent, effective January 1, 2018, to market its manufactured electronic and interconnect products globally using Kyocera’s sales force rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Kyocera will pay commissions to AVX on sales by Kyocera, in the applicable territories, of products designed into customer applications by AVX prior to January 1, 2018 of 2.0% in calendar year 2018, 1.5% in calendar year 2019, and 1.0% in calendar year 2020. Sales of Kyocera resale products were $296.3 million and related operating profit was $18.2 million for the fiscal year ended March 31, 2018.

In February 2017, AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement of its intent, effective April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera resell such products in this territory. AVX will pay commissions to Kyocera on sales by AVX, in the applicable territory, of products designed into customer applications by Kyocera prior to April 1, 2018 of 2.0% in fiscal year 2019, 1.5% in fiscal year 2020, and 1.0% in fiscal year 2021. Sales of AVX resale products by Kyocera were $21.9 million for the fiscal year ended March 31, 2018.

On October 2, 2017, AVX completed its acquisition of S&C for $162.1 million, net of cash acquired. The purchase includes S&C’s subsidiaries located in Austria, China, Germany, India, Mexico, Romania, South Korea, the U.K., and the U.S., including R&D, manufacturing and sales office locations.

On January 31, 2018, AVX completed its acquisition of Ethertronics for $128.2 million in cash, net of cash and debt acquired, subject to customary post-closing adjustments. Ethertronics operates facilities in six locations in China, South Korea, Vietnam, France, Taiwan, and the Americas, comprising R&D, manufacturing and sales office locations.

Long-Term:

Although there is uncertainty in the near-term market as a result of the current global geopolitical and economic conditions, we continue to see opportunities for long-term growth and profitability improvement due to: (a) a projected increase in the long-term worldwide demand for more sophisticated electronic end use products, which require electronic components and interconnect, sensing and control devices such as the ones we sell, (b) cost reductions and improvements in our production processes, and (c) opportunities for growth in our Electronic Components and Interconnect, Sensing and Control Devices product lines due to advances in component design and our production capabilities and capacity. We have fostered our financial health and the strength of our balance sheet putting us in a good position to react to changes in the marketplace as they occur. We remain confident that our strategies will enable our continued long-term success.

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Results of Operations

Year Ended March 31, 2018 compared to Year Ended March 31, 2017

Net sales for the fiscal year ended March 31, 2018 were $1,562.5 million compared to $1,312.7 million for the fiscal year ended March 31, 2017.

The table below represents product group revenues for the fiscal years ended March 31, 2016, 2017, and 2018.

	Fiscal Year Ended March 31,
Sales revenue (in thousands)	2016		2017		2018
Ceramic Components	$	176,502	$	188,568	$	226,204
Tantalum Components		311,888		314,723		366,194
Advanced Components		333,693		372,279		346,459
Total Electronic Components		822,083		875,570		938,857
Interconnect, Sensing and Control Devices		111,609		118,163		327,301
KCP Resale Connectors		23,751		30,027		36,090
KDP and KCD Resale		238,086		288,901		260,226
Total KED Resale		261,837		318,928		296,316
Total Revenue	$	1,195,529	$	1,312,661	$	1,562,474

Electronic Component sales were $938.9 million for the fiscal year ended March 31, 2018 compared to $875.6 million during the fiscal year ended March 31, 2017. The sales increase in Electronic Components product sales was driven by increased volume in our Ceramic and Tantalum Components across most markets resulting from favorable global market conditions and increased demand for our electronic component products resulting from technological advances across a broad range of industries, including Internet of Things related products, industrial, telecommunications and automotive markets. Fiscal year 2018 sales also included $12.7 million of Ethertronics product sales. These increases were partially offset by sales decreases in our Advanced Components group primarily due to a reduction in sales of certain advanced ceramic capacitors which were the subject of intellectual property litigation whereby our sales of those products essentially ended in March of 2017.

Total Interconnect, Sensing and Control Devices product sales, including KCP Resale connectors, were $363.4 million in the fiscal year ended March 31, 2018 compared to $148.2 million during the fiscal year ended March 31, 2017. This increase is attributable to the additional sales resulting from our S&C acquisition which accounted for $193.3 million of the increased sales and increased demand in the U.S. and European automotive markets when compared to the fiscal year ended March 31, 2017.

KDP and KCD Resale sales were $260.2 million for the fiscal year ended March 31, 2018 compared to $288.9 million during the fiscal year ended March 31, 2017. This decrease is primarily a result of the planned phase out of KDP and KCD Resale products resulting from the previously announced decision by Kyocera to market its manufactured electronic component and interconnect products globally using Kyocera’s sales force rather than continuing to have AVX resell such products starting January 1, 2018.

Our sales to independent electronic distributors represented 42.7% of total net sales for the fiscal year ended March 31, 2018, compared to 44.5% for fiscal year ended March 31, 2017. Our S&C device sales are primarily direct to OEM customers, which led to the decrease in our distributor sales percentage when compared to the same period last year. Overall, distributor sales activity increased when compared to the same period last year as distributors increased order activity throughout the year in response to improved end-market demand and extended product delivery lead times. This increase in distributor activity is reflective of the increased customer demand, a more balanced inventory pipeline, and steadily improving market conditions. Our sales to distributor customers involve specific ship and debit and stock rotation programs for which sales allowances are recorded as reductions in sales. As a result of the increased distributors’ customer sales volume, such allowance charges increased to $30.5 million, or 4.6% of gross sales to distributor customers, for the fiscal year ended March 31, 2018 compared to $25.5 million, or 4.4% of gross sales to distributor customers, for the fiscal year ended March 31, 2017. Applications under such programs for fiscal years ended March 31, 2018 and 2017 were approximately $29.4 million and $24.9 million, respectively.

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With the addition of S&C, whose sales are currently concentrated in Europe, the regional sales percentages of our total sales in the fiscal year ended March 31, 2018 decreased in the Asian and American regions while increasing in the European region compared to the fiscal year ended March 31, 2017. Sales in the Asian, American, and European regions represented 37.2%, 25.6% and 37.2% of total sales, respectively, for the fiscal year ended March 31, 2018. This compares to 44.1%, 29.1% and 26.8% of total sales for the Asian, American, and European regions in the prior year, respectively. As a result of the movement of the U.S. dollar against certain foreign currencies, reported sales for the fiscal year ended March 31, 2018 were favorably impacted by approximately $42.5 million when compared to the prior year.

Gross profit in the fiscal year ended March 31, 2018 was $318.9 million, compared to gross profit of $284.8 million in the fiscal year ended March 31, 2017. This overall increase in dollars is primarily attributable to higher sales. Gross profit as a percentage of sales for the fiscal year ended March 31, 2017 was 21.7% compared to 20.4% for the fiscal year ended March 31, 2018. The decline in gross profit as a percentage of sales is reflective of the sale of higher margin advanced ceramic capacitors during the fiscal year ended March 31, 2017 which were the subject of intellectual property litigation and were not being sold by us during the fiscal year ended March 31, 2018. For the fiscal year ended March 31, 2017, gross profit was negatively impacted by charges of approximately $34.9 million related to sales of those advanced ceramic capacitors subject to the intellectual property litigation discussed above, partially offset by $21.4 million from increased sales prices related to the affected products. In addition, we incurred increased costs of $4.2 million during the second half of the fiscal year ended March 31, 2018 for the effects of purchase accounting adjustments to inventory and fixed assets related to the S&C and Ethertronics acquisitions. For the fiscal year ended March 31, 2018, gross profit due to currency movement were unfavorably impacted by approximately $1.2 million when compared to the previous fiscal year.

Selling, general, and administrative expenses for the fiscal year ended March 31, 2018 were $140.5 million, or 9.0% of net sales, compared to $117.6 million, or 9.0% of net sales, for the fiscal year ended March 31, 2017. The overall increase in these expenses is primarily due to higher selling expenses resulting from the increase in sales and $3.6 million of amortization of intangible assets related to the S&C and Ethertronics acquisitions.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent infringement case filed in the United States District Court of the Southern District of California captioned Presidio Components, Inc. v. American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016, the jury returned a verdict in favor of the plaintiff and found damages to Presidio. On August 17, 2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction whereby ATC was allowed to continue to sell the disputed product until March 17, 2017 to anyone who was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent injunction were subject to court mandated intellectual property damages for each product sold. In December, 2017, a panel of the Federal Circuit vacated the damage award to Presidio, vacated the injunction, and remanded the case for further proceedings to determine damages limited to “reasonable royalties” and to consider the requested injunction in light of its opinion and any additional facts. The case is ongoing.

Additionally, on January 26, 2016, in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v. AVX Corporation the jury returned a verdict in favor of the plaintiff and found damages to the plaintiff in the amount of $37.5 million, which was recorded in fiscal 2016. That verdict was later vacated by the Court on March 30, 2018. Profit from operations for the year ended March 31, 2018 reflects a favorable accrual adjustment of $1.5 million related to this patent infringement case. The amount of damages will be subject to further legal proceedings including a potential trial on damages some time in fiscal 2019. In addition, during the fiscal year ended March 31, 2017, we accrued a $3.6 million estimated charge related to new environmental remediation activities related to a legacy environmental issue at a site referred to as the “Aerovox Site,” located in New Bedford, Massachusetts.

Profit from operations for the fiscal year ended March 31, 2018 increased $16.2 million to $179.8 million compared to $163.6 million for the fiscal year ended March 31, 2017. This increase is a result of the factors above.

Other income, net was $12.5 million in fiscal year 2018 compared to $11.4 million in fiscal year 2017. This increase is primarily attributable to foreign exchange gains resulting from currency fluctuations during the period, other income, net for the period ended March 31, 2017 includes a gain on the sale of an idle facility of $1.6 million in the fiscal year ended March 31, 2017.

The tax rate for the fiscal year ended March 31, 2018 was 97.4% compared to 28.1% for the fiscal year ended March 31, 2017. For the fiscal year ended March 31, 2018, compared to the fiscal year ended March 31, 2017, the increase in the tax rate is primarily a result of the Tax Cuts and Jobs Act (the “Act”) enacted in the U.S. on December 22, 2017. Among numerous other provisions, the Act reduced the statutory U.S. corporation income tax rate from 35% to 21%, effective January 1, 2018.  Excluding discrete items, the tax rate for the fiscal year ended March 31, 2018 was 28.0% compared to 27.8% for the fiscal year ended March 31, 2017.

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The provision for income tax expense for the fiscal year ended March 31, 2018 was $187.4 million compared to $49.2 million for the fiscal year ended March 31, 2017. On December 22, 2017, the Tax Cuts and Jobs Act was enacted in the U.S. Among numerous other provisions, the Act reduced the statutory U.S. corporation income tax rate from 35% to 21%, effective January 1, 2018. The Act also reduced or eliminated certain corporate tax deductions and provided for a transition from a worldwide to a modified territorial tax system for resident corporations and related corporate group members.  The transition is accompanied by a one-time tax, effective December 31, 2017, on all U.S.-based corporate groups’ accumulated foreign earnings as yet untaxed by the U.S., assessed at a 15.5% rate on all such earnings held in cash or liquid asset positions and at an 8% rate on all other non-liquid asset positions. This estimated one-time tax was recorded in the results for the quarter ended December 31, 2017, and was approximately $75.7 million, which is payable in eight annual installments over an eight-year period, beginning in 2018. Also, in consideration of the Act, we have determined that it is no longer necessary to assert that cash and profits generated by our foreign subsidiaries will continue to be reinvested locally indefinitely. Accordingly, in addition to the one-time tax estimate noted above, we also provided for estimated foreign withholding taxes of approximately $13.6 million related to the potential distribution of such foreign earnings.

In addition, on December 21, 2017, the French Parliament enacted the Finance Law for 2018, which reduces France’s statutory corporate tax rate from its present 33.33% to 25%, in stages over the next five years.  This rate decrease resulted in an estimated net decrease in AVX’s French net deferred tax assets and liabilities of $14.2 million, which is also reflected as a discrete charge for the fiscal year ended March 31, 2018.

As a result of the factors discussed above, net income for the fiscal year ended March 31, 2018 was $4.9 million compared to $125.8 million for the fiscal year ended March 31, 2017.

Year Ended March 31, 2017 compared to Year Ended March 31, 2016

Net sales for the fiscal year ended March 31, 2017 were $1,312.7 million compared to $1,195.5 million for the fiscal year ended March 31, 2016.

The table below represents product group revenues for the fiscal years ended March 31, 2015, 2016, and 2017.

	Fiscal Year Ended March 31,
Sales revenue (in thousands)	2015		2016		2017
Ceramic Components	$	202,719	$	176,502	$	188,568
Tantalum Components		355,974		311,888		314,723
Advanced Components		359,315		333,693		372,279
Total Electronic		918,008		822,083		875,570
AVX Interconnect		134,610		111,609		118,163
KCP Resale Connectors		70,741		23,751		30,027
KDP and KCD Resale		229,869		238,086		288,901
Total KED Resale		300,610		261,837		318,928
Total Revenue	$	1,353,228	$	1,195,529	$	1,312,661

Electronic Component sales were $875.6 million for the fiscal year ended March 31, 2017 compared to $822.1 million during the fiscal year ended March 31, 2016. The sales increase in Electronic Components product sales was driven by increased volume across all of our electronic component groups as a result of improved global market conditions compared to the same period last year. Our Ceramic Components sales improvement is primarily due to increased activity in the cellular telecommunications and automotive markets in addition to our focus on the sale of higher value capacitance components. Much of the sales increase in our Advanced Components was primarily attributable to the accelerated sales, including $21.4 million from increased sales prices, of certain advanced ceramic capacitors at the request of our customers. These advanced ceramic capacitors were the subject of intellectual property litigation discussed below. The increase in sales of our Tantalum Components is primarily driven by increased demand in the telecommunications and industrial markets.

Total connector sales, including AVX Interconnect products and KCP Resale Connectors, were $148.2 million in the fiscal year ended March 31, 2017 compared to $135.4 million during the fiscal year ended March 31, 2016. This increase is attributable to increased demand in the U.S. and European automotive and industrial markets.

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KDP and KCD Resale sales were $288.9 million for the fiscal year ended March 31, 2017 compared to $238.1 million during the fiscal year ended March 31, 2016. This increase is primarily attributable to higher demand from our cellular device customers, in addition to a favorable currency impact on reported revenues when compared to the same period in fiscal 2016 as the Japanese Yen strengthened against the U.S. Dollar.

Our sales to independent electronic distributors represented 44.5% of total net sales for the fiscal year ended March 31, 2017, compared to 45.0% for fiscal year ended March 31, 2016. Overall, distributor sales increased when compared to the same period last year as distributors increased order activity and inventory intake during the year. This increase is reflective of the distributors’ customer demand, a more balanced inventory pipeline and steadily improving market conditions. Our sales to distributor customers involve specific ship and debit and stock rotation programs for which sales allowances are recorded as reductions in sales. As a result of the increased distributors’ customer demand and a more balanced inventory pipeline, such allowance charges decreased to $25.5 million, or 4.4% of gross sales to distributor customers, for the fiscal year ended March 31, 2017 compared to $29.4 million, or 5.5% of gross sales to distributor customers, for the fiscal year ended March 31, 2016. Applications under such programs for fiscal years ended March 31, 2017 and 2016 were approximately $24.9 million and $31.5 million, respectively.

Geographically, compared to the prior fiscal year, regional sales as a percentage of total sales for the fiscal year ended March 31, 2017 remained relatively consistent in all regions. Sales in Asia increased to 44.1% of total sales, while sales in the Americas decreased slightly to 29.1% and sales in Europe decreased to 26.8% of total sales. This compares to 41.6%, 30.0%, and 28.4% of total sales for the Asian, American, and European regions in fiscal 2016, respectively. As a result of the movement of the U.S. dollar against certain foreign currencies, reported sales for the fiscal year ended March 31, 2017 were favorably impacted by approximately $6.3 million when compared to fiscal 2016.

Gross profit margin in the fiscal year ended March 31, 2017 decreased to 21.7% of sales, or $284.8 million, compared to a gross profit margin of 24.2% of sales, or $289.1 million, in the fiscal year ended March 31, 2016. This overall decrease in dollars and percent is primarily attributable to charges of $34.9 million related to sales of those advanced ceramic capacitors subject to the intellectual property litigation discussed above, partially offset by $21.4 million from increased sales prices related to the affected products. In addition, for the fiscal year ended March 31, 2017, the currency impact of the movement of the U.S. dollar against certain foreign currencies unfavorably impacted our gross profit by approximately $3.0 million when compared to the same period last year.

Selling, general, and administrative expenses for the fiscal year ended March 31, 2017 were $117.6 million, or 9.0% of net sales, compared to $119.8 million, or 10.0% of net sales, for the fiscal year ended March 31, 2016. The overall decrease in these expenses is primarily due to lower litigation costs partially offset by higher selling expenses resulting from the increase in sales for the fiscal year ended March 31, 2017 when compared to the fiscal year ended March 31, 2016.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent infringement case filed in the United States District Court of the Southern District of California captioned Presidio Components, Inc. v. American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016, the jury returned a verdict in favor of the plaintiff and found damages to Presidio in the amount of $2.2 million. On August 17, 2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after November 16, 2016 and awarded Presidio damages related to ATC’s sale of such products from February 21, 2016 through November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction whereby AVX was allowed to continue to sell the disputed product until March 17, 2017 to anyone who was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent injunction are subject to court mandated intellectual property damages for each product sold. Accordingly, in addition to the $2.2 million jury verdict award above, we recorded during fiscal year 2017 an estimated reserve for damages on all pre- and post-verdict sales of product subject to that litigation in the event that the verdict withstands future challenges. As of March 31, 2017, we had reserved $34.9 million related to the pre- and post-verdict sales of such product. On September 1, 2016, we filed an appeal with the Federal Circuit to appeal this verdict.

Additionally, on January 26, 2016, in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v. AVX Corporation, the jury returned a verdict in favor of the plaintiff and found damages to the plaintiff in the amount of $37.5 million, which was recorded in fiscal 2016. In addition, during the fiscal year ended March 31, 2017, we accrued a $3.6 million estimated charge related to new environmental remediation activities related to a legacy environmental issue at a site referred to as the “Aerovox Site,” located in New Bedford, Massachusetts.

Profit from operations for the fiscal year ended March 31, 2017 increased $39.6 million to $163.6 million compared to $124.0 million for the fiscal year ended March 31, 2016. This increase is a result of the factors above.

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Other income increased $3.2 million to $11.4 million in fiscal 2017 compared to $8.2 million in fiscal 2016. This increase is primarily attributable to foreign exchange gains resulting from currency fluctuations during the period in addition to a gain on the sale of an idle facility of $1.6 million.

The tax rate for the fiscal year ended March 31, 2017 was 28.1% compared to 23.2% for the fiscal year ended March 31, 2016. For the fiscal year ended March 31, 2017, compared to the fiscal year ended March 31, 2016, the increase in the tax rate is caused principally by an increase in our U.S. taxable income and an adverse U.S. federal audit adjustment, partially offset by increased U.S. foreign tax credits and the release of the valuation allowance against deferred tax assets at a Japanese subsidiary. Excluding discrete items, the tax rate for the fiscal year ended March 31, 2017 is 27.8% compared to 26.5% for the fiscal year ended March 31, 2016.

As a result of the factors discussed above, net income for the fiscal year ended March 31, 2017 was $125.8 million compared to $101.5 million for the fiscal year ended March 31, 2016.

Financial Condition

Liquidity and Capital Resources

Our liquidity needs arise primarily from working capital requirements, dividends, capital expenditures and acquisitions. Historically, we have satisfied our operating liquidity requirements through funds from operations, investment income from cash and investments in securities, and cash on hand. As of March 31, 2018, we had a current ratio of 5.8 to 1, $827.2 million of cash, cash equivalents, and investments in securities, $2,243.4 million of stockholders' equity and no borrowings. On December 22, 2017, the Act was enacted in the U.S. Among numerous other provisions, the Act reduced or eliminated certain corporate tax deductions and provided for a transition from a worldwide to a territorial tax system for resident corporations and related corporate group members. The transition is accompanied by a one-time tax, effective December 31, 2017, on all U.S.-based corporate groups’ accumulated foreign earnings as yet untaxed by the U.S., assessed at a 15.5% rate on all such earnings held in cash or liquid asset positions and at an 8% rate on all other non-liquid asset positions. This tax, approximately $75.7 million for us, is payable in installments over an eight-year period beginning in 2018.

As of March 31, 2018, we had cash, cash equivalents, and short-term investments in securities of $827.2 million, of which $585.8 million was held outside the U.S. Liquidity is subject to many factors, such as normal business operations as well as general economic, financial, competitive, legislative, and regulatory factors that are beyond our control. Cash balances generated and held outside the U.S. are generally used for local on-going working capital, capital expenditure needs, and to support regional acquisitions. In consideration of the Act, we have determined that it is no longer necessary to assert that cash and profits generated by our foreign subsidiaries will continue to be reinvested locally indefinitely. Accordingly, in addition to the U.S. taxes on such earnings noted above, we also provided for estimated foreign withholding taxes of approximately $13.6 million related to the potential distribution of such foreign earnings. As a result of the Act we will have greater flexibility to redirect our global cash resources where they are needed.

Net cash provided by operating activities was $195.5 million for the fiscal year ended March 31, 2018, compared to cash provided by operations of $195.0 million for the fiscal year ended March 31, 2017 and cash provided by operations of $166.4 million for the fiscal year ended March 31, 2016.

Purchases of property and equipment totaled $100.5 million in fiscal 2018, $66.3 million in fiscal 2017, and $48.1 million in fiscal 2016. The increase in expenditures during fiscal 2018 was primarily made in connection with strategic building expansion and equipment purchase activities in our Fountain Inn, South Carolina facilities and our plants in the Czechia, Germany, El Salvador, and Malaysia. We expect to continue to make strategic capital investments in our Electronic Component and Interconnect, Sensing and Control Devices product lines and estimate that we will incur capital expenditures of approximately $85 million in fiscal 2019. The actual amount of capital expenditures will depend upon the outlook for end market demand and timing of capital projects.

On October 2, 2017, AVX completed its acquisition of S&C for $162.1 million, net of cash acquired. The purchase comprises S&C’s subsidiaries located in Austria, China, Germany, India, Mexico, Romania, South Korea, the U.K., and the U.S., including R&D, manufacturing and sales office locations.

During the quarter ending March 31, 2018, AVX completed its acquisition of Ethertronics for $128.2 million in cash, net of debt acquired, subject to customary post-closing adjustments. Ethertronics operates facilities in six locations in China, South Korea, Vietnam, France, Taiwan, and the Americas, comprising R&D, manufacturing and sales office locations.

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Historically, our operating funding has been internally generated through operations, investment income from cash, cash equivalents, and investments in securities and cash on hand. We have assessed the condition of our financial resources and our current business and believe that, based on our financial condition as of March 31, 2018, cash on hand and cash expected to be generated from operating activities and investment income from cash, cash equivalents, and investments in securities will be sufficient to satisfy our anticipated financing needs for working capital, capital expenditures, environmental clean-up costs, expenses related to ongoing litigation, pension plan funding, research, development, and engineering expenses, and dividend payments or stock repurchases to be made during the next twelve months. While changes in customer demand have an impact on our future cash requirements, changes in those requirements are mitigated by our ability to adjust manufacturing capabilities to meet increases or decreases in customer demand. In addition, potential acquisitions, depending upon their size, could require us to utilize our current cash resources, or use external borrowings. We do not anticipate any significant changes in our ability to generate cash flows or meet our liquidity needs in the foreseeable future.

In fiscal 2018, 2017, and 2016, dividends of $75.7 million, $72.0 million, and $70.5 million, respectively, were paid to stockholders.

On October 17, 2007, the Board of Directors of the Company authorized the repurchase of up to 5,000,000 shares of our common stock. We did not purchase any shares during fiscal 2018. We purchased 356,364 shares at a cost of $4.8 million during fiscal 2017, and 761,145 shares at a cost of $10.2 million during fiscal 2016. The repurchased shares are held as treasury stock and are available for general corporate purposes. As of March 31, 2018, there were 3,067,074 shares that may yet be repurchased under this program.

At March 31, 2018, we had contractual obligations for the construction of plants and acquisition of equipment aggregating approximately $51.2 million.

We make contributions to our U.S. and foreign defined benefit plans as required under various pension funding regulations. Contributions are based on a percentage of pensionable wages or requirements necessary to satisfy long-term funding obligations. We made contributions of $0.3 million to our U.S. and $6.1 million to our foreign defined benefit plans during the fiscal year ended March 31, 2018. We expect to make contributions of approximately $6.6 million for our foreign defined benefits plans for the fiscal year ending March 31, 2019. We do not anticipate making contributions to the U.S. plans in fiscal 2019. We have funded actuarially computed pension assets of approximately $12.9 million related to these defined benefit pension plans as of March 31, 2018.

During the fiscal year ended March 31, 2018, we made contributions of $4.4 million to Company sponsored retirement savings plans. Our contributions are partially based on employee contributions as a percentage of their salaries. Certain of our contributions to these savings plans are discretionary and are determined by the Board of Directors each year. We expect that our contributions for the fiscal year ending March 31, 2019 will be approximately $4.4 million.

We are a lessee under long-term operating leases primarily for office space, plant, and equipment. Future minimum lease commitments under non-cancelable operating leases as of March 31, 2018, were approximately $21.6 million.

Occasionally we enter into delivery contracts with selected suppliers for certain metals used in our production processes. The delivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt.

We have been identified by the United States Environmental Protection Agency (“EPA”), state governmental agencies or other private parties as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), or equivalent non-U.S., state or local laws, for clean-up and response costs associated with certain sites at which remediation is or may be required with respect to prior contamination. Because CERCLA or such state statutes authorize joint and several liability, the EPA or non-U.S., state or local regulatory authorities could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and other PRPs.

To resolve our liability at the sites at which we have been named a PRP, we have entered into various administrative orders and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. As is customary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur, such as the discovery of significant new information about site conditions.

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On June 3, 2010, AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford, Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New Bedford with respect to the satisfaction of AVX’s federal law requirements. The Massachusetts Department of Environmental Protection has jurisdiction over the balance of the environmental remediation at the Site. AVX has submitted its proposed remedy, but until the state has approved such proposal, AVX cannot determine if additional groundwater and soil remediation will be required, if substantial material will have to be disposed of offsite, or if additional remediation techniques will be required, any of which could result in a more extensive and costly plan of remediation. Further, the Site and the remediation may be subject to additional scrutiny under other statutory procedures which could also add to the cost of remediation. We have a remaining accrual of $14.2 million at March 31, 2018, representing our current estimate of the potential liability related to the remaining performance of environmental remediation actions at the Site and neighboring properties using certain assumptions regarding the plan of remediation. Until all parties agree and remediation is complete, we cannot be certain there will be no additional cost relating to the Site.

We had total reserves of approximately $19.2 million and $18.6 million at March 31, 2017 and March 31, 2018, respectively, related to various environmental matters and sites, including those discussed above. These reserves are classified in the Consolidated Balance Sheets as $3.9 million and $3.3 million in accrued expenses at March 31, 2017 and March 31, 2018, respectively, and $15.3 million in other non-current liabilities at both March 31, 2017 and March 31, 2018. The amounts recorded for identified environmental liabilities are based on estimates. Periodically, we review amounts recorded and adjust them to reflect additional legal and technical information that becomes available. Uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could differ from our current estimates.

On April 19, 2016, the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order naming AVX Corporation, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at one time the site of operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. This Director’s Order follows a draft order issued on November 4, 2015. AVX has taken the position that any liability of Aerovox Canada for such site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek to enforce such Canadian order against AVX, and whether, in the event it does so, AVX will have any liability under applicable law. AVX intends to contest any such course of action that may be taken by the MoE.

We also operate, or did at one time, on other sites that may have potential future environmental issues as a result of activities at sites during AVX’s long history of manufacturing operations or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. A separate account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and do not reflect any possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing at multiple party sites or indemnification of our liability by a third party.

We are not involved in any pending or threatened environmental proceedings that would require curtailment of our operations. We continually expend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in compliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily have knowledge of all past occurrences on sites that we currently occupy. New environmental regulations may be enacted and we cannot determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future.

On April 25, 2013, AVX was named as a defendant in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v. AVX Corporation. This case alleged that certain AVX products infringe on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first phase of a segmented trial and a mixed verdict in the second phase of a segmented trial, and found damages to Greatbatch in the amount of $37.5 million, which was recorded in fiscal 2016. The verdict was later vacated by the court on March 30, 2018. Profit from operations for the year ended March 31, 2018 reflects a favorable accrual adjustment of $1.5 million related to this patent infringement case. The amount of damages will be subject to further legal proceedings including a potential trial on damages, which we expect to occur in fiscal 2019.

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On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent infringement case filed in the United States District Court of the Southern District of California captioned Presidio Components, Inc. v. American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016, the jury returned a verdict in favor of the plaintiff and found damages to Presidio. On August 17, 2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction whereby ATC was allowed to continue to sell the disputed product until March 17, 2017 to anyone who was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent injunction were subject to court mandated intellectual property damages for each product sold. In December, 2017, a panel of the Federal Circuit vacated the damage award to Presidio, vacated the injunction, and remanded the case for further proceedings to determine damages limited to “reasonable royalties” and to reconsider the requested injunction in light of its opinion and any additional facts.

As of March 31, 2018, we had total reserves of $76.5 million plus accrued interest in accrued expenses with respect to the two intellectual property cases discussed above. The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to reflect additional information that becomes available. Accordingly, these costs could differ from our current estimates.

During calendar year 2014, AVX was named as a co-defendant in a series of cases filed in the United States and in the Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States, state and Canadian antitrust laws asserting that AVX and numerous other companies were participants in alleged price-fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on October 2, 2014. Some plaintiffs have broken off from the United States class action and filed actions on their own, although AVX is not named in all of these independent actions. The cases in Canada have not been consolidated. These cases are still in progress. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot predict the outcome of these other disputes and proceedings, we believe, based upon a review with legal counsel, that none of these other disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss), or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that may arise and their potential impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

Disclosures about Contractual Obligations and Commitments

The Company has the following contractual obligations and commitments as of March 31, 2018 as noted below.

					FY 2020 -		FY 2022-
Contractual Obligations (in thousands)	Total		FY 2019		FY 2021		FY 2023		Thereafter
Operating Leases	$	21,605	$	6,803	$	8,242	$	4,283	$	2,277
Plant and Equipment	$	51,195	$	49,302	$	1,640	$	253	$	-

During the fiscal year ended March 31, 2018, we made contributions of $4.4 million to our Company sponsored retirement savings plans. Our contributions are partially based on employee contributions as a percentage of their salaries. Certain contributions by us are discretionary and are determined by the Board of Directors each year. We expect that our contributions for the fiscal year ending March 31, 2019 will be approximately $4.4 million.

During the fiscal year ended March 31, 2018, we made contributions of $0.3 million and $6.1 million to our U.S. and international defined benefit plans, respectively. Contributions are based on a percentage of pensionable wages or requirements necessary to satisfy funding obligations. We expect to make contributions of approximately $6.6 million for our international defined benefit plans for the fiscal year ending March 31, 2019. We do not anticipate making contributions to the U.S. plans in fiscal 2019.

Occasionally we enter into delivery contracts with selected suppliers for certain metals used in our production processes. The delivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As of March 31, 2018, we had no material outstanding purchase commitments.

We have a $3.2 million liability recorded at March 31, 2018 related to our uncertain tax positions. Due to the nature of the underlying liabilities and the extended time often needed to resolve income tax uncertainties, we cannot reasonably estimate the amount or timing of cash payments that may be required to settle these liabilities beyond 2018. For additional information, refer to Note 9.

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Critical Accounting Policies and Estimates

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based upon our consolidated financial statements and the notes thereto, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods.

On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, warranties, inventories, pensions, income taxes, and contingencies. Management bases its estimates, judgments, and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. While we base our estimates and assumptions on our knowledge of current events and actions that we may undertake in the future, there can be no assurance that actual results will not differ from these estimates and assumptions. On an ongoing basis, we evaluate our accounting policies and disclosure practices. In management’s opinion, the critical accounting policies and estimates, as defined below, are more complex in nature and require a higher degree of judgment than the remainder of our accounting policies described in Note 1 to our consolidated financial statements elsewhere herein.

Revenue Recognition

All of our products are built to specification and tested by us or our suppliers for adherence to such specification before shipment to customers. We ship products to customers based upon firm orders, or sales occur when the customers pull inventory from consignment locations. Shipping and handling costs are included in cost of sales. We recognize revenue when the sales process is complete. This occurs when products are shipped to, or used by, the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is reasonably assured. We evaluate gross versus net presentation on revenues from products purchased and resold in accordance with the revenue recognition criteria outlined in FASB ASC 605-45, Principal Agent Considerations. Based on the evaluation of our resale arrangements with Kyocera and others, including consideration of the primary indicators set forth in ASC 605-45-45, we record revenue related to products purchased and resold on a gross basis. Estimates used in determining sales allowance programs described below are subject to the volatilities of the market place. This includes, but is not limited to, changes in economic conditions, sales pricing, product demand, inventory levels in the supply chain, technology, and other variables that might result in adjustments to our estimates. Accordingly, there can be no assurance that actual results will not differ from the estimates recorded.

Returns

Sales revenue and cost of sales reported in the income statement are reduced to reflect estimated returns. We record an estimated sales allowance for returns at the time of sale based on historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. The amount accrued reflects the return of value of the customer’s inventory. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns. Our actual results have historically approximated our estimates. The customer is given credit against their accounts receivable after the product is returned and verified.

Distribution Programs

A portion of our sales is to independent electronic component distributors, which are subject to various distributor sales programs. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report distributor allowances in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we do not track the individual units that we record against specific products sold from distributor inventories, which would allow us to directly compare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold during that period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates for each program.

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Distributor Stock Rotation Program

Stock rotation is a program whereby distributors are allowed to return qualified inventory semi-annually and receive credit equal to a certain percentage, primarily limited to 5% of the previous six months net sales. We record an estimated sales allowance for stock rotation at the time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgment. We believe that these procedures enable us to make reliable estimates of future returns under the stock rotation program. Our actual results have historically approximated our estimates. When the product is returned and verified, the distributor is given credit against their accounts receivable.

Distributor Ship-from-Stock and Debit Program

Ship-from-Stock and Debit (“ship and debit”) is a program designed to assist distributor customers in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations may cover current and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgment. We believe that these procedures enable us to make reliable estimates of future credits under the ship and debit program. Our actual results have historically approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment.

Special Incentive Programs

We may offer special incentive discounts based on amount of product ordered or shipped. At the time we record sales under these agreements, we provide an allowance for the discounts on the sales for which the customer is eligible to take. The customer then debits us for the authorized discount amount.

Inventories

We determine the cost of raw materials, work in process, and finished goods inventories by the first-in, first-out (“FIFO”) method. Manufactured inventory costs include material, labor, and manufacturing overhead. Inventories are valued at the lower of cost or market (net realizable value). We value inventory at its market value where there is evidence that the utility of goods will be less than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value the carrying value and excess quantities. We review and adjust the carrying value of our inventories based on historical usage, customer forecasts received from marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts, and obsolescence and aging.

Income Taxes

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure together with assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that our deferred tax assets will be recoverable based on all available evidence, both positive and negative. To the extent we believe that recovery is not more likely than not, we establish a valuation allowance.

We have recorded valuation allowances due to uncertainties related to our ability to realize some of our deferred tax assets, primarily consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our estimates of future taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate countries where we have a valuation allowance on our deferred tax assets due to historical operating losses and when such positive evidence outweighs negative evidence, we will release such valuation allowance as appropriate.

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We also record a provision for certain foreign, federal, and state tax contingencies based on the likelihood of obligation, when needed. In the normal course of business, we are subject to challenges from U.S. and foreign tax authorities regarding the amount of taxes due. These challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may affect our ability to utilize tax benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposures have been sufficiently provided for in the consolidated financial statements. In the event that actual results differ from these estimates, we may need to adjust tax accounts and related payments, which could materially affect our financial condition and results of operations.

We account for uncertainty in income taxes recognized in our financial statements. We recognize in our financial statements the impact of a tax position, if that position would “more likely than not” be sustained on audit, based on the technical merits of the position. Accruals for estimated interest and penalties are recorded as a component of interest expense.

We record deferred tax liabilities for temporary differences associated with deductions for foreign branch losses claimed by us in our U.S. income tax returns, as these deductions are subject to recapture provisions in the U.S. income tax code. When the recapture period expires for these deductions, the liabilities are removed and the tax benefit is recognized in the income tax provision.

In relation to critical estimates for income taxes, the Tax Cuts and Jobs Act (the "Act") was enacted into law in the U.S. on December 22, 2017. Among numerous other provisions, the Act reduced the statutory U.S. corporation income tax rate from 35% to 21%, effective January 1, 2018. This was the primary reason for a change in AVX's global tax rate estimate for the fiscal year ending March 31, 2018, resulting in a blended, estimated global tax rate of 27% for fiscal 2018. The Act also resulted in an estimated net decrease in the valuation of U.S. net current and deferred tax assets and liabilities of $24.7 million. The Act reduced or eliminated certain corporate tax deductions and provided for a transition from a worldwide to a modified territorial tax system for resident corporations and related corporate group members accompanied by a one-time tax, effective December 31, 2017, on all U.S.-based corporate groups' accumulated foreign earnings as yet untaxed by the U.S. This one-time tax is assessed at a 15.5% rate on all such earnings held in cash or liquid asset positions, and at an 8% rate on all other non-liquid asset positions. This one-time tax was recorded in the results for the quarter ended December 31, 2017, and was approximately $75.7 million, which is payable in installments over an eight-year period beginning in 2018. Based on our interpretation of the Act, we made reasonable estimates to record provisional adjustments during fiscal 2018.

The Act also puts in place several new tax laws that are generally effective prospectively from January 1, 2018, including, but not limited to: a base erosion and anti-abuse tax; elimination of U.S. federal taxes on substantially all dividends from foreign subsidiaries; a lower U.S. tax rate on certain revenues from sources outside the U.S.; and, implementation of a new provision to tax certain global intangible low-taxed income of foreign subsidiaries.

We will continue to assess all of the other relevant aspects of the Act, including additional guidance under the Act, among other things which might impact our income tax provision. 

In consideration of the Act, the Company has determined that it is no longer necessary to assert that cash and profits generated by our foreign subsidiaries will continue to be reinvested locally indefinitely. Accordingly, we provided for estimated foreign withholding taxes and associated foreign tax credits related to the potential distribution of such earnings. Therefore, in addition to the one-time tax noted above, we also provided for estimated foreign withholding taxes of approximately $13.6 million related to the potential distribution of such foreign earnings.

Pension Assumptions

Pension benefit obligations and the related effects on operations are calculated using actuarial models. Two critical assumptions, discount rate and expected rate of return on plan assets, are important elements of plan expense and/or liability measurement. We evaluate these assumptions at least annually. The discount rate enables us to state expected future cash flows at a present value on the measurement date. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s measurement date and determine a level equivalent yield that may be unique to each plan. A lower discount rate increases the present value of benefit obligations and increases pension expense. To determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. Other assumptions involve demographic factors such as retirement, mortality, and turnover. These assumptions are evaluated periodically and are updated to reflect our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. In such cases, the differences between actual results and actuarial assumptions are amortized over future periods.

Environmental Compliance

We are subject to federal, state, and local laws and regulations concerning the environment in the United States and to the environmental laws and regulations of the other countries in which we operate. Based on our periodic review of the operating policies and practices at all of our facilities, we believe that our operations are currently in compliance with applicable environmental laws and regulations. Regarding sites identified by the EPA at which remediation is required, our ultimate liability in connection with environmental claims will depend on many factors, including our volumetric share of non-environmentally safe waste, the total cost of remediation, and the financial viability of other companies having liability. Additionally, we operate on sites that may have potential future environmental issues as a result of activities at sites during the long history of manufacturing operations by AVX or its corporate predecessor or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. We recognize liabilities for environmental exposures when analysis indicates that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely amount. In the event that no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. The uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure; therefore, these costs could differ from our current estimates. Our environmental reserves are not discounted and do not reflect any possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing at multiple party sites or indemnification of our liability by a third party.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance modifies how an entity will determine the measurement of revenue and timing of when it is recognized. The guidance provides for a five-step approach in applying the standard: 1) identifying the contract with the customer, 2) identifying separate performance obligations in the contract, 3) determining the transaction price, 4) allocating the transaction price to separate performance obligations, and 5) recognizing the revenue when the performance obligation has been satisfied. The new guidance requires enhanced disclosures for the nature, amount, timing, and uncertainty of revenue that is being recognized. The guidance is effective for public companies for interim and annual reporting periods beginning after December 15, 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. We have assessed the impact of the new standard and anticipate no material impact from adopting ASU 2014-09 in how we recognize revenue. We identified a change in how we recognize right-of-return liabilities which impact Current Assets and Current Liabilities. We will adopt ASU 2014-09 using the modified retrospective approach in the first quarter of fiscal year 2019. 

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In February 2016, FASB issued ASU 2016-02, “Leases.” This guidance changes the requirements for inclusion of certain right-of-use assets and the associated lease liabilities to be included in a statement of financial position. The classification criteria maintains the distinction between finance leases and operating leases. Regarding finance leases, lessees are required to 1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, 2) recognize interest on the lease liability separate from the amortization of the right-of-use asset in the statement of comprehensive income, and 3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. Regarding operating leases, lessees are required to 1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, 2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and 3) classify all cash payments within operating activities in the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We previously disclosed prior to our recent acquisitions that we anticipated no material impact from adopting ASU 2016-02. However, we are in the process of updating our assessment to include the impact of our recently acquired companies.

In March 2016, the FASB issued ASU 2016-09, “Compensation — Stock Compensation.” The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The guidance is effective for public companies for annual reporting periods that began after December 15, 2016, and interim periods within those annual periods. The standard became effective for the interim reporting period ending June 30, 2017 and has not had a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other.” This guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of goodwill. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU also removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment, and if it fails that qualitative test to perform Step 2 of the goodwill impairment test. Companies are to apply the standard on a prospective basis. The guidance is effective for public companies that are an SEC filer for fiscal years beginning after December 15, 2019. Early adoption is permitted and management elected to adopt this guidance beginning with the interim period ending June 30, 2017. The adoption of this standard has not had a material impact on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging.” The standard aims to align the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results for cash flow and fair value hedge accounting with risk management activities. The guidance is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted in any interim period after issuance. Management is currently evaluating the impact this guidance will have on our consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income." This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. We are currently evaluating the potential impact on our consolidated financial statements and disclosures.

We have reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to our business or that no material effect is expected on our consolidated financial statements as a result of future adoption.

Relationship with Kyocera and Related Transactions

Kyocera is the majority stockholder of AVX. As of May 18, 2018, Kyocera owned beneficially and of record 121,800,000 shares of AVX common stock, representing approximately 72% of our outstanding shares.

From January 1990 through August 15, 1995, AVX was wholly owned by Kyocera. On August 15, 1995, Kyocera sold 22.9%, or 39,300,000 shares of AVX's common stock, and AVX sold an additional 4,400,000 shares of common stock, in a public offering. In February 2000, Kyocera sold an additional 10,500,000 shares of its AVX common stock.

Our business includes transactions with Kyocera. Such transactions involve the purchase of resale inventories, raw materials, supplies and equipment, the sale of products for resale, raw materials, supplies and equipment, the payment of dividends, subcontracting activities, and commissions. See Note 15 to our consolidated financial statements elsewhere herein for more information on the related party transactions.

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In December 2016, Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement of its intent, effective January 1, 2018, to market its manufactured electronic and interconnect products globally using Kyocera’s sales force rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Kyocera will pay commissions to AVX on sales by Kyocera, in the applicable territories, of products designed into customer applications by AVX prior to January 1, 2018 of 2.0% in calendar year 2018, 1.5% in calendar year 2019, and 1.0% in calendar year 2020. Sales of Kyocera resale products by AVX were $296.3 and related operating profit was $18.2 million for the fiscal year ended March 31, 2018.

In February 2017, AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement of its intent, effective April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera resell such products in this territory. AVX will pay commissions to Kyocera on sales by AVX, in the applicable territory, of products designed into customer applications by Kyocera prior to April 1, 2018 of 2.0% in fiscal year 2019, 1.5% in fiscal year 2020, and 1.0% in fiscal year 2021. Sales of AVX resale products by Kyocera were $21.9 million for the fiscal year ended March 31, 2018.

The exchange of information with Kyocera relating to the development and manufacture of multi-layer ceramic capacitors and various other ceramic products benefits AVX. AVX and Kyocera have executed several agreements that govern the foregoing transactions and which are described below.

The Special Advisory Committee of our Board, comprised of our independent directors (currently Messrs. Stach, DeCenzo, and Christiansen), reviews and approves any significant agreements between AVX and Kyocera and any significant transactions between AVX and Kyocera not covered by such agreements. The committee is also responsible for reviewing and approving any agreements and transactions between AVX and any other related party that are or may be within the scope of applicable rules, regulations and guidance of the New York Stock Exchange and Item 404 of Regulation S-K, if they arise. The Special Advisory Committee operates under a written charter that sets forth the policies and procedures for such approvals. In approving any such agreement or transaction pursuant to those procedures, the Special Advisory Committee must determine that, in its judgment, the terms thereof are equivalent to those to which an independent unrelated party would agree at arm’s-length or are otherwise in the best interests of the Company and its stockholders generally. Each of the agreements described below contains provisions requiring that the terms of any transaction under such agreement be equivalent to those to which an independent unrelated party would agree at arm's-length.

Disclosure and Option to License Agreement. Pursuant to the Disclosure and Option to License Agreement (the “License Agreement”), AVX and Kyocera exchange confidential information relating to the development and manufacture of multi-layered ceramic capacitors and various other ceramic products, as well as the license of technologies in certain circumstances. The License Agreement has a term of one year with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.

Materials Supply Agreement. Pursuant to the Materials Supply Agreement (the “Supply Agreement”), AVX and Kyocera will, from time to time, supply the other party with certain raw and semi-processed materials used in the manufacture of capacitors and other electronic components. The Supply Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.

Machinery and Equipment Purchase Agreement. Pursuant to the Machinery and Equipment Purchase Agreement (the “Machinery Purchase Agreement”), AVX and Kyocera will, from time to time, design and manufacture for the other party certain equipment and machinery of a proprietary and confidential nature used in the manufacture of capacitors and other electronic components. The Machinery Purchase Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.

Products Supply and Distribution Agreement. Pursuant to the Products Supply and Distribution Agreement (the “Distribution Agreement”) (i) AVX will act as the non-exclusive distributor of certain Kyocera-manufactured products to certain customers in certain territories outside of Japan and (ii) Kyocera will act as the non-exclusive distributor of certain AVX-manufactured products within Japan. Each party has the ability to appoint a replacement distributor of its products with a minimum one year’s notice period. The Distribution Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least three months prior written notice. As a result of the December 2016 and January 2017 notices referred to above, this agreement effectively terminated effective April 1, 2018.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency

 We are exposed to foreign currency exchange risk with respect to our sales, profits, and assets and liabilities denominated in currencies other than the U.S. dollar. Although we use financial instruments to hedge certain foreign currency risks, we are not fully protected against foreign currency fluctuations and our reported results of operations could be affected by changes in foreign currency exchange rates. International revenues and expenses transacted by our foreign subsidiaries may be denominated in local currency. See Note 14 to the consolidated financial statements elsewhere herein for further discussion of derivative financial instruments.

For fiscal 2018, our exposure to foreign currency exchange risk was estimated using a sensitivity analysis, which illustrates a hypothetical change in the average foreign currency exchange rates used during the year. Actual changes in foreign currency exchange rates may differ from this hypothetical change. Based on a hypothetical increase or decrease of 10% in the exchange rates, assuming no hedging against foreign currency rate changes, we would have incurred an additional foreign currency gain or loss of approximately $53.4 million in fiscal 2018.

Materials

We are at risk to fluctuations in prices for commodities used to manufacture our products, primarily tantalum, palladium, platinum, silver, nickel, gold, and copper.

Tantalum powder and wire are principal materials used in the manufacture of tantalum capacitor products. The tantalum required to manufacture our products has generally been available in sufficient quantity. The limited number of tantalum material suppliers has led to higher prices during periods of increased demand. 

Item 8. Financial Statements and Supplementary Data

The following consolidated financial statements of the Company and its subsidiaries, together with the Report of Independent Registered Public Accounting Firm thereon, are presented beginning on page 46 of this report:

Consolidated Balance Sheets, March 31, 2017 and 2018	46
Consolidated Statements of Operations, Years Ended March 31, 2016, 2017, and 2018	47
Consolidated Statements of Comprehensive Income (Loss), Years Ended March 31, 2016, 2017, and 2018	48
Consolidated Statements of Stockholders’ Equity, Years Ended March 31, 2016, 2017, and 2018	49
Consolidated Statements of Cash Flows, Years Ended March 31, 2016, 2017, and 2018	50
Notes to Consolidated Financial Statements	51
Report of Independent Registered Public Accounting Firm	80

All financial statement schedules are omitted because of the absence of the conditions under which they are required or because the information required is shown in the consolidated financial statements or notes thereto.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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Item 9A. Controls and Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Annual Report on Form 10-K, as of March 31, 2018, an evaluation was performed under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the Company’s disclosure controls and procedures. Based on the evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2018 to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2018. In making its assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Based on the results of this assessment, management, including the CEO and CFO, has concluded that the Company’s internal control over financial reporting was effective as of the end of its fiscal year ended March 31, 2018.

The scope of management’s assessment of the effectiveness of internal control over financial reporting includes all of the Company’s consolidated operations except for the operations of S&C and Ethertronics, which the Company acquired on October 2, 2017 and January 31, 2018, respectively. S&C’s and Ethertronics’ operations represent 12.4% and 0.8%, respectively, of the Company’s consolidated revenues for the fiscal year ended March 31, 2018, and assets associated with S&C’s and Ethertronics’ operations represent 7.9% and 0.1%, respectively, of the Company’s consolidated total assets, as of March 31, 2018.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an attestation report on the Company’s internal control over financial reporting as of March 31, 2018, as stated in their report, which appears in this Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

- 41 -

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance

Information required by this item with respect to our directors, the committees of the Board of Directors, corporate governance and compliance by our directors, executive officers, and certain beneficial owners of our common stock with Section 16(a) of the Exchange Act is provided by incorporation by reference to information under the captions entitled “Proposal I Election of Directors,” “Board of Directors – Governance,” “Board of Directors – Meetings Held and Committees,” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company's definitive proxy statement for the 2018 Annual Meeting of Stockholders (the “Proxy Statement”) and perhaps elsewhere therein. Information required by this item relating to our executive officers also appears in Item 1 of Part I of this Form 10-K under the caption “Executive Officers of the Registrant.”

Code of Business Conduct and Ethics

As discussed above in “Company Information and Website” in Item 1 of Part I of this Annual Report on Form 10-K, our Code of Business Conduct and Ethics and the Code of Business Conduct and Ethics Supplement Applicable to the Chief Executive Officer, Chief Financial Officer, Controllers and Financial Managers have been posted on our website. We will post on our website any amendments to, or waivers from, a provision of the Code of Business Conduct and Ethics or the Supplement Applicable to the Chief Executive Officer, Chief Financial Officer, Controllers and Financial Managers that applies to our principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions, and that relates to any of the following: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications made by us; (iii) compliance with applicable governmental laws, rules, and regulations; (iv) the prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; or (v) accountability for adherence to the code.

Item 11. Executive Compensation

The information required by this item is provided by incorporation by reference to information under the captions entitled “Director Compensation,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report,” “Compensation Discussion and Analysis,” and “Executive Compensation” in the Proxy Statement and perhaps elsewhere therein.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is provided by incorporation by reference to information under the captions entitled “Ownership of Securities by Directors, Director Nominees and Executive Officers,” “Security Ownership of Certain Beneficial Owners,” and “Equity Compensation Plan Information” in the Proxy Statement and perhaps elsewhere therein.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is provided by incorporation by reference to information under the caption “Relationship with Kyocera and Related Transactions” and “Board of Directors – Governance” in the Proxy Statement and perhaps elsewhere therein.

Item 14. Principal Accounting Fees and Services

The information required by this item is provided by incorporation by reference to information under the caption entitled “Report of the Audit Committee – Principal Independent Registered Public Accounting Firm Fees” in the Proxy Statement and perhaps elsewhere therein.

- 42 -

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)	Financial Statements and Financial Statement Schedules - See Index to Consolidated Financial Statements at Item 8 of this report.
(b)	Exhibits:
	As indicated below, certain of the exhibits to this report are hereby incorporated by reference from other documents on file with the Securities and Exchange Commission.
3.1	Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 (File No. 33-94310) of the Company (the “Form S-1”)).
3.2	By-laws of AVX Corporation as Amended and Restated May 7, 2012 (incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 11, 2012).
10.1	Products Supply and Distribution Agreement by and between Kyocera Corporation and AVX Corporation (incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2000).
*10.2	AVX Nonqualified Supplemental Retirement Plan Amended and Restated effective January 1, 2008 (the AVX Corporation SERP was merged into this plan effective January 1, 2005) (incorporated by reference to Exhibit 10.4 to the Annual Report on Form10-K of the Company for the year ended March 31, 2009).
*10.3	Amendment to AVX Nonqualified Supplemental Retirement Plan, effective December 15, 2014. (incorporated by reference to Exhibit 10.4 to the Annual Report on Form10-K of the Company for the year ended March 31, 2015).
*10.4	AVX Corporation 2004 Stock Option Plan as amended through July 23, 2008 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2008).
*10.5	AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan as amended through July 28, 2008 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2008).
*10.6	Form of Notice of Grant of Stock Options and Option Agreement for awards pursuant to AVX Corporation 2004 Stock Option Plan and AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan (incorporated by reference to Exhibit 10.8 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2013).
10.7	Machinery and Equipment Purchase Agreement by and between Kyocera Corporation and AVX Corporation (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2005).
10.8	Materials Supply Agreement by and between Kyocera Corporation and AVX Corporation (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2005).
10.9	Disclosure and Option to License Agreement effective as of April 1, 2008 by and between Kyocera Corporation and AVX Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on March 25, 2008).
10.10	Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.16 to the Annual Report on Form 10-K of the Company for year ended March 31, 2010).
10.11	Supplemental Consent Decree with Defendant AVX Corporation containing agreement among the Company, the United States Environmental Protection Agency and the Commonwealth of Massachusetts, dated October 10, 2012 (incorporated by reference to Exhibit 99.2 to Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on October 11, 2012).
*10.12	AVX Corporation 2014 Stock Option Plan (incorporated by reference to Exhibit 10.17 of the Annual Report on Form 10K/A of the Company for the year ended March 31, 2013).
*10.13	AVX Corporation 2014 Non-Employee Directors’ Stock Option Plan as amended May 12, 2016 (incorporated by reference to Exhibit 10.13 of the Annual Report on Form 10-K of the Company for the year ended March 31, 2016).
*10.14	Form of Notice of Grant of Stock Options and Option Agreement for awards pursuant to AVX Corporation 2014 Stock Option Plan and AVX Corporation 2014 Non-Employee Directors’ Stock Option Plan (incorporated by reference to Exhibit 10.19 of the Annual Report on Form 10-K of the Company for the year ended March 31, 2014).

- 43 -

*10.15	AVX Corporation 2014 Restricted Stock Unit Plan (incorporated by reference to Exhibit 99.1 of Form S-8 filed with the Securities and Exchange Commission on August 6, 2014.)
*10.16	AVX Corporation 2014 Management Incentive Plan, as amended August 2, 2017, and effective April 1, 2017 (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2017).
*10.17	Form of Notice of Grant of Restricted Stock Units for awards pursuant to AVX Corporation 2014 Restricted Stock Unit Plan (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2016).
10.18	Technology Disclosure Agreement, effective as of October 7, 2016, between the Company and Kyocera Corporation (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q of the Company for the period ended December 31, 2016).
10.19	Sale and Purchase Agreement, dated July 19, 2017, among AVX Limited, AVX Corporation and TT Electronics, PLC related to the acquisition of the Transportation, Sensing and Control division from the U.S. Company, TT Electronics, PLC (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2017.
*10.20	Agreement and Plan of Merger, dated December 29, 2017, by and among AVX Corporation, Armstrong Alpert, Inc., Ethertronics, Inc., and Fortis Advisors LLC (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q of the Company for the period ended December 31, 2017).
10.21	Share Purchase and Transfer Agreement, dated March 27, 2018 by and among AVX Corporation, AVX INTERCONNECT Europe GmbH, and the Shareholders of  KUMATEC.
*10.22	Agreement between AVX Corporation and Kurt P. Cummings dated March 26, 2018
21.1	Subsidiaries of the Registrant.
23.1	Consent of PricewaterhouseCoopers LLP.
24.1	Power of Attorney
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer – John Sarvis
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer – Kurt P. Cummings
32.1	Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - John Sarvis and Kurt P. Cummings
101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

* Agreement relates to executive compensation.

**XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

- 44 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AVX Corporation

by: /s/ Michael E. Hufnagel

MICHAEL E. HUFNAGEL

Vice President of Corporate Finance

Dated: May 18, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John Sarvis	Chairman of the Board, Chief Executive Officer and President	May 18, 2018
John Sarvis	(Principal Executive Officer)
/s/ Kurt P. Cummings	Executive Vice President, Chief Financial Officer, Treasurer	May 18, 2018
Kurt P. Cummings	(Principal Financial Officer)
/s/ Michael E. Hufnagel	Vice President of Corporate Finance	May 18, 2018
Michael E. Hufnagel	(Principal Accounting Officer)
*
Goro Yamaguchi	Director	May 18, 2018
*
Hideo Tanimoto	Director	May 18, 2018
*
Shoichi Aoki	Director	May 18, 2018
*
Koichi Kano	Director	May 18, 2018
*
Hiroshi Fure	Director	May 18, 2018
*
Donald B. Christiansen	Director	May 18, 2018
*
David DeCenzo	Director	May 18, 2018
*
Joseph Stach	Director	May 18, 2018
* by: /s/ Kurt P. Cummings
KURT P. CUMMINGS, Attorney-in-Fact for each of the persons indicated.

- 45 -

AVX Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except per share data)

	As of March 31,
	2017			2018
Assets
Current assets:
Cash and cash equivalents	$	578,634		$	547,415
Short-term investments in securities		528,748			279,787
Accounts receivable - trade, net		176,730			275,259
Accounts receivable - affiliates		10,074			9,255
Inventories, net		474,128			516,777
Income taxes receivable		34,287			2,566
Prepaid and other		33,803			70,665
Total current assets		1,836,404			1,701,724
Property and equipment, net		239,951			418,286
Goodwill		213,051			316,298
Intangible assets, net		53,650			128,612
Deferred income taxes		124,589			75,720
Other assets		9,768			32,126
Total Assets	$	2,477,413		$	2,672,766
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable - trade	$	43,778		$	89,726
Accounts payable - affiliates		36,663			26,320
Income taxes payable		3,944			8,290
Accrued payroll and benefits		32,980			52,044
Accrued expenses		98,702			118,183
Total current liabilities		216,067			294,563
Income taxes payable		-			69,645
Pensions		12,663			10,605
Deferred income taxes		957			12,895
Other liabilities		31,247			41,615
Total non-current liabilities		44,867			134,760
Total Liabilities		260,934			429,323
Commitments and contingencies (Note 13)
Stockholders' Equity:
Preferred stock, par value $.01 per share:		-			-
Authorized, 20,000 shares; None issued and outstanding
Common stock, par value $.01 per share:		1,764			1,764
Authorized, 300,000 shares; issued, 176,369 shares; outstanding, 167,930 and 168,434 shares for 2017 and 2018, respectively
Additional paid-in capital		357,203			360,077
Retained earnings		2,033,285			1,962,467
Accumulated other comprehensive (loss)		(67,163	)		21,257
Treasury stock, at cost, 8,439 and 7,935 shares for 2017 and 2018, respectively		(108,610	)		(102,122	)
Total Stockholders' Equity		2,216,479			2,243,443
Total Liabilities and Stockholders' Equity	$	2,477,413		$	2,672,766

See accompanying notes to consolidated financial statements.

- 46 -

AVX Corporation and Subsidiaries

Consolidated Statements of Operations

(in thousands, except per share data)

	Fiscal Year Ended March 31,
	2016		2017		2018
Net sales	$	1,195,529	$	1,312,661	$	1,562,474
Cost of sales		906,460		1,027,906		1,243,612
Gross profit		289,069		284,755		318,862
Selling, general and administrative expenses		119,767		117,598		140,528
Legal and environmental (benefit) charges		45,318		3,600		(1,500	)
Profit from operations		123,984		163,557		179,834
Other income (loss):
Interest income		5,003		7,381		12,778
Other, net		3,165		4,011		(299	)
Income before income taxes		132,152		174,949		192,313
Provision for income taxes		30,617		49,164		187,403
Net income	$	101,535	$	125,785	$	4,910
Income per share:
Basic	$	0.61	$	0.75	$	0.03
Diluted	$	0.60	$	0.75	$	0.03
Dividends declared (per share)	$	0.42	$	0.43	$	0.45
Weighted average common shares outstanding:
Basic		167,797		167,506		168,262
Diluted		167,961		167,837		168,925

See accompanying notes to consolidated financial statements.

- 47 -

AVX Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

	Fiscal Year Ended March 31,
	2016			2017			2018
Net income	$	101,535		$	125,785		$	4,910
Other comprehensive income, net of income taxes:
Foreign currency translation adjustment		14,330			(14,674	)		76,711
Foreign currency cash flow hedges adjustment		2			183			(490)
Pension liabilities adjustment		8,209			(7,527	)		12,199
Other post-employment obligations		(244	)		(777	)		-
Other comprehensive income (loss), net of income taxes		22,297			(22,795	)		88,420
Comprehensive income	$	123,832		$	102,990		$	93,330

See accompanying notes to consolidated financial statements.

- 48 -

AVX Corporation and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(in thousands, except per share data)

															Accumulated
	Common Stock								Additional						Other
	Number					Treasury			Paid-In			Retained			Comprehensive
	Of Shares			Amount		Stock			Capital			Earnings			Income (Loss)			Total
Balance at March 31, 2015		168,191		$	1,764	$	(104,608	)	$	352,996		$	1,948,476		$	(66,665	)	$	2,131,963
Net income		-			-		-			-			101,535			-			101,535
Other comprehensive income, net of income taxes		-			-		-			-			-			22,297			22,297
Dividends of $0.42 per share		-			-		-			-			(70,499	)		-			(70,499	)
Stock-based compensation expense		-			-		-			1,229			-			-			1,229
Stock option activity		62			-		805			(97	)		-			-			708
Tax benefit of stock option exercises		-			-		-			58			-			-			58
Treasury stock purchased		(761	)		-		(10,185	)		-			-			-			(10,185	)
Balance at March 31, 2016		167,492		$	1,764	$	(113,988	)	$	354,186		$	1,979,512		$	(44,368	)	$	2,177,106
Net income		-			-		-			-			125,785			-			125,785
Other comprehensive loss, net of income taxes		-			-		-			-			-			(22,795	)		(22,795	)
Dividends of $0.43 per share		-			-		-			-			(72,012	)		-			(72,012	)
Stock-based compensation expense		-			-		-			2,327			-			-			2,327
Stock option activity		794			-		10,211			(93	)		-			-			10,118
Tax benefit of stock option exercises		-			-		-			782			-			-			782
Treasury stock purchased		(356	)		-		(4,833	)		-			-			-			(4,833	)
Balance at March 31, 2017		167,930		$	1,764	$	(108,610	)	$	357,203		$	2,033,285		$	(67,163	)	$	2,216,479
Net income		-			-		-			-			4,910			-			4,910
Other comprehensive loss, net of income taxes		-			-		-			-			-			88,420			88,420
Dividends of $0.45 per share		-			-		-			-			(75,728	)		-			(75,728	)
Stock-based compensation expense		-			-		-			3,407			-			-			3,407
Stock option activity		504			-		6,488			(10	)		-			-			6,478
Payments of tax withholding for vested restricted stock units		-			-		-			(523	)		-			-			(523	)
Balance at March 31, 2018		168,434		$	1,764	$	(102,122	)	$	360,077		$	1,962,467		$	21,257		$	2,243,443

See accompanying notes to consolidated financial statements.

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AVX Corporation and Subsidiaries

Consolidated Statements of Cash Flows

 (in thousands)

	Fiscal Year Ended March 31,
	2016			2017			2018
OPERATING ACTIVITIES:
Net income	$	101,535		$	125,785		$	4,910
Adjustment to reconcile net income to net cash from operating activities:
Depreciation and amortization		38,951			42,687			59,788
Stock-based compensation expense		1,229			2,327			3,407
Deferred income taxes		26,722			(2,175	)		43,993
Gain (loss) on disposal of property and equipment		87			(1,894	)		267
Changes in operating assets and liabilities, excluding acquisitions :
Accounts receivable		20,578			(18,116	)		(26,075	)
Inventories		55,482			6,798			20,850
Accounts payable and accrued expenses		(77,494	)		33,447			(32,981	)
Income taxes payable		(591	)		(39,272	)		72,112
Other assets		8,429			13,219			50,037
Other liabilities		(8,487	)		32,205			(811	)
Net cash provided by operating activities		166,441			195,011			195,497
INVESTING ACTIVITIES:
Purchases of property and equipment		(48,103	)		(66,288	)		(100,537	)
Purchase of business, net of cash and debt acquired		-			-			(290,280	)
Purchases of investment securities		(771,178	)		(1,449,298	)		(1,724,921	)
Redemptions of investment securities		803,470			1,500,586			1,978,157
Proceeds from property, plant & equipment dispositions		1,084			11,266			36
Other investing activities		-			-			(969	)
Net cash used in investing activities		(14,727	)		(3,734	)		(138,514	)
FINANCING ACTIVITIES:
Dividends paid		(70,499	)		(72,012	)		(75,728	)
Purchase of treasury stock		(10,185	)		(4,833	)		-
Proceeds from exercise of stock options		708			10,118			5,955
Principle payments of debt		-			-			(21,106	)
Payments of tax withholding for vested restricted stock units		-			-			(523	)
Excess tax benefit from stock-based payment arrangements		58			782			-
Net cash used in financing activities		(79,918	)		(65,945	)		(91,402	)
Effect of exchange rate on cash		807			(906	)		3,200
Increase (decrease) in cash and cash equivalents		72,603			124,426			(31,219	)
Cash and cash equivalents at beginning of period		381,605			454,208			578,634
Cash and cash equivalents at end of period	$	454,208		$	578,634		$	547,415

See accompanying notes to consolidated financial statements.

- 50 -

AVX Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(in thousands, except per share data)

1. Summary of Significant Accounting Policies:

General:

AVX Corporation is a leading worldwide manufacturer, supplier and reseller of a broad line of electronic components and interconnect, sensing and control devices, and related products. The consolidated financial statements of AVX Corporation (“AVX” or “the Company”) include all accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated.

From January 1990 through August 15, 1995, we were wholly owned by Kyocera Corporation (“Kyocera”). As of March 31, 2018, Kyocera owned approximately 72% of our outstanding shares of common stock.

Use of Estimates:

The consolidated financial statements are prepared in accordance with generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. We base our estimates and judgments on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates. On an ongoing basis, we evaluate our accounting policies and disclosure practices.

Cash Equivalents and Investments in Securities:

We consider all highly liquid investments purchased with an original maturity of three months (90 days) or less to be cash equivalents.

Our short-term and long-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments are recorded as interest income.

Inventories:

       We determine the cost of raw materials, work in process, and finished goods inventories by the first-in, first-out (“FIFO”) method. Manufactured inventory costs include material, labor, and manufacturing overhead. Inventories are valued at the lower of cost or market (realizable value) and are valued at market value where there is evidence that the utility of goods will be less than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value. We review and adjust the carrying value of our inventories based on historical usage, customer forecasts received from marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts, and obsolescence and aging.

Property and Equipment:

Property and equipment are recorded at cost. Machinery and equipment are depreciated on the double-declining balance and straight-line methods. Buildings are depreciated on the straight-line method. The estimated useful lives used for computing depreciation are as follows: buildings and improvements – 10 to 31.5 years, machinery and equipment – 3 to 10 years. Depreciation expense was $33,918, $37,493 and $50,813 for the fiscal years ended March 31, 2016, 2017 and 2018, respectively.

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of any such assets may not be recoverable. If the sum of the undiscounted cash flows is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets.

The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in our results of operations.

- 51 -

Goodwill and Acquired Intangible Assets:

We do not amortize goodwill. We test goodwill for impairment annually or whenever conditions indicate that such impairment could exist. The carrying value of goodwill is evaluated in relation to the operating performance and estimated future discounted cash flows of the related reporting unit. If the sum of the discounted cash flows is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets. The estimate of cash flow is based upon, among other things, certain assumptions about expected future operating performance. Our annual goodwill impairment analysis indicated that there was no related impairment for the fiscal years ended March 31, 2016, 2017, or 2018.

We have determined that our intangible assets have finite useful lives. Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was $5,033, $5,194, and $9,006 for the fiscal years ended March 31, 2016, 2017, and 2018, respectively.

	March 31, 2017					March 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	$	51,000	$	(26,917	)	$	96,388	$	(30,819	)
Developed technology and other		14,521		(12,153	)		43,689		(13,816	)
Trade name and trademarks		34,000		(6,800	)		43,380		(10,210	)
Total		99,521		(45,870	)		183,457		(54,845	)

The estimated future annual amortization expense for intangible assets is as follows:

Fiscal Year ended March 31,	Estimated Amortization Expense
2019	$	13,421
2020		13,375
2021		13,077
2022		12,201
2023		12,040
Thereafter		64,498

Pension Assumptions:

Pension benefit obligations and the related effects on our results of operations are calculated using actuarial models. Two critical assumptions, discount rate and expected rate of return on plan assets, are important elements of plan expense and/or liability measurement. We evaluate these assumptions annually. The discount rate enables us to state expected future cash flows at a present value on the measurement date. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s measurement date and determine a level equivalent yield unique to each plan. A lower discount rate increases the present value of benefit obligations and increases pension expense. To determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. Other assumptions involve demographic factors such as retirement, mortality, and turnover. These assumptions are evaluated annually and are updated to reflect our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. In such cases, the differences between actual results and actuarial assumptions are amortized over future periods.

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Income Taxes:

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure together with assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that our deferred tax assets will be recoverable based on all available evidence, both positive and negative. To the extent we believe that recovery is not more likely than not, we establish a valuation allowance.

We have recorded valuation allowances due to uncertainties related to our ability to realize some of our deferred tax assets, primarily consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our estimates of future taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate countries where we have a valuation allowance on our deferred tax assets due to historical operating losses and when such positive evidence outweighs negative evidence we will release such valuation allowance as appropriate.

We also record a provision for certain international, federal, and state tax contingencies based on the likelihood of obligation, when needed. In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of taxes due. These challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may affect our ability to utilize tax benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposures have been sufficiently provided for in the consolidated financial statements. In the event that actual results differ from these estimates, we may need to adjust tax accounts and related payments, which could materially impact our financial condition and results of operations.

We account for uncertainty in income taxes recognized in our financial statements. We recognize in our financial statements the impact of a tax position, if that position would “more likely than not” be sustained on audit, based on the technical merits of the position. Accruals for estimated interest and penalties are recorded as a component of interest expense.

The Tax Cuts and Jobs Act (the "Act") was enacted into law in the U.S. on December 22, 2017. Among numerous other provisions, the Act reduced the statutory U.S. corporation income tax rate from 35% to 21%, effective January 1, 2018. This was the primary reason for a change in AVX's global tax rate estimate for the fiscal year ending March 31, 2018, resulting in a blended, estimated global tax rate of 27% for fiscal 2018. The Act also resulted in an estimated net decrease in the valuation of U.S. net current and deferred tax assets and liabilities of $24.7 million. The Act reduced or eliminated certain corporate tax deductions and provided for a transition from a worldwide to a modified territorial tax system for resident corporations and related corporate group members accompanied by a one-time tax, effective December 31, 2017, on all U.S.-based corporate groups' accumulated foreign earnings as yet untaxed by the U.S. This one-time tax is assessed at a 15.5% rate on all such earnings held in cash or liquid asset positions, and at an 8% rate on all other non-liquid asset positions. This one-time tax was recorded in the results for the quarter ended December 31, 2017, and was approximately $75.7 million, which is payable in installments over an eight-year period beginning in 2018. Based on our interpretation of the Act, we made reasonable estimates to record provisional adjustments during fiscal 2018.

The Act also puts in place several new tax laws that are generally effective prospectively from January 1, 2018, including but not limited to: a base erosion and anti-abuse tax; elimination of U.S. federal taxes on substantially all dividends from foreign subsidiaries; a lower U.S. tax rate on certain revenues from sources outside the U.S.; and, implementation of a new provision to tax certain global intangible low-taxed income of foreign subsidiaries. We will continue to assess all of the other relevant aspects of the Act, including additional guidance under the Act, among other things which might impact our income tax provision.

In consideration of the Act, the Company has determined that it is no longer necessary to assert that cash and profits generated by our foreign subsidiaries will continue to be reinvested locally indefinitely. Accordingly, we provided for estimated foreign withholding taxes and associated foreign tax credits related to the potential distribution of such earnings. Therefore, in addition to the one-time tax noted above, we also provided for estimated foreign withholding taxes of approximately $13.6 million related to the potentional distribution of such foreign earnings.

Foreign Currency Activity:

Assets and liabilities of foreign subsidiaries, where functional currencies are their local currencies, are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments result from the process of translating foreign currency financial statements into U.S. dollars and are reported separately as a component of accumulated other comprehensive income (loss). Transaction gains and losses reflected in the functional currencies are reported in our results of operations at the time of the transaction.

Derivative Financial Instruments:

Derivative instruments are reported on the consolidated balance sheets at their fair values. The accounting for changes in fair value depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. For instruments designated as accounting hedges, the effective portion of gains or losses is reported in other comprehensive income (loss) and is reclassified into the statement of operations in the same period during which the hedged transaction affects our results of operations. Any contracts that do not qualify as hedges, for accounting purposes, are marked to market with the resulting gains and losses recognized in other income or expense.

We use financial instruments such as forward exchange contracts to hedge a portion, but not all, of our firm commitments denominated in foreign currencies. The purpose of our foreign currency management is to minimize the effect of exchange rate changes on actual cash flows from foreign currency denominated transactions. See Note 14 for further discussion of derivative financial instruments.

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Revenue Recognition and Accounts Receivable:

All products are built to specification and tested by AVX or our suppliers for adherence to such specification before shipment to customers. We ship products to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenue when the sales process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is reasonably assured. We evaluate gross versus net presentation on revenues from products purchased and resold in accordance with the revenue recognition criteria outlined in FASB ASC 605-45, Principal Agent Considerations. Based on the evaluation with our resale arrangements with Kyocera, including consideration of the primary indicators set forth in ASC 605-45-45, we record revenue related to products purchased and resold on a gross basis. Estimates used in determining sales allowance programs described below are subject to the volatilities of the marketplace. This includes, but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be no assurance that actual results will not differ from those estimates.

Accounts Receivable

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends and an evaluation of the impact of current and projected economic conditions. We evaluate the past-due status of trade receivables based on contractual terms of sale. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Returns

Sales revenue and cost of sales reported in the statement of operations are reduced to reflect estimated returns. We record an estimated sales allowance for returns at the time of sale based on historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. The amount accrued reflects the return of value of the customer’s inventory. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns. Our actual results have historically approximated our estimates. When the product is returned and verified, the customer is given credit against their accounts receivable.

Distribution Programs

A portion of our sales to independent electronic component distributor customers are subject to various distributor sales programs. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report distributor allowances in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we do not track the individual units that are recorded against specific products sold from distributor inventories, which would allow us to directly compare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold during that period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates for each program.

Distributor Stock Rotation Program

Stock rotation is a program whereby distributor customers are allowed to return for credit qualified inventory, semi-annually, equal to a certain percentage, primarily limited to 5% of the previous six months net sales. We record an estimated sales allowance for stock rotation at the time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns under the stock rotation program. Our actual results have historically approximated our estimates. When the product is returned and verified, the distributor is given credit against their accounts receivable.

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Distributor Ship-from-Stock and Debit Program

Ship-from-Stock and Debit (“ship and debit”) is a program designed to assist distributor customers in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations may cover current and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future credits under the ship and debit program. Our actual results have historically approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment.

Special Incentive Programs

We may offer special incentive discounts based on amount of product ordered or shipped. At the time we record sales under these agreements, we provide an allowance for the discounts on the sales for which the customer is eligible. The customer then debits us for the authorized discount amount.

Research, Development, and Engineering:

Research, development, and engineering expenditures are expensed when incurred. Research and development expenses are included in selling, general, and administrative expenses and were $13,683, $16,493, and $17,886 for the fiscal years ended March 31, 2016, 2017, and 2018, respectively. Engineering expenses are included in cost of sales and were $14,616, $14,453, and $23,892 for the fiscal years ended March 31, 2016, 2017, and 2018, respectively.

Stock-Based Compensation:

We recognize compensation cost resulting from all share-based payment transactions in the financial statements. The amount of compensation cost is measured based on the grant-date fair value for the share-based payment issued. Our policy is to grant stock options with an exercise price equal to our stock price on the date of grant. Compensation cost is recognized over the vesting period of the award.

We use the Black-Scholes-Merton option-pricing model to determine the fair value of stock options at the grant date. We use the closing fair market value of the Company’s common stock on the grant date to determine the fair value of restricted stock units (“RSU”) at the grant date. See Note 12 for assumptions used.

Treasury Stock:

Our Board of Directors has approved stock repurchase authorizations in 2005 and 2007 whereby up to 10,000 shares of common stock can be purchased from time to time at the discretion of management. Accordingly, 761 shares were purchased during the fiscal year ended March 31, 2016, 356 shares were purchased during the fiscal year ended March 31, 2017, and 0 shares were purchased during the fiscal year ended March 31, 2018. As of March 31, 2018, we had in treasury 7,935 common shares at a cost of $102,122. There are 3,067 shares that may yet be purchased under the 2007 authorization.

Commitments and Contingencies:

Liabilities for loss contingencies are recorded when analysis indicates that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely amount. In the event that no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Legal advisory costs are expensed as incurred.

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New Accounting Standards:

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance modifies how an entity will determine the measurement of revenue and timing of when it is recognized. The guidance provides for a five-step approach in applying the standard: 1) identifying the contract with the customer, 2) identifying separate performance obligations in the contract, 3) determining the transaction price, 4) allocating the transaction price to separate performance obligations, and 5) recognizing the revenue when the performance obligation has been satisfied. The new guidance requires enhanced disclosures for the nature, amount, timing, and uncertainty of revenue that is being recognized. The guidance is effective for public companies for interim and annual reporting periods beginning after December 15, 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. We have assessed the impact of the new standard and anticipate no material impact from adopting ASU 2014-09 in how we recognize revenue. We identified a change in how we recognize right-of-return liabilities which impact Current Assets and Current Liabilities. We will adopt ASU 2014-09 using the modified retrospective approach in the first quarter of fiscal year 2019. 

In February 2016, FASB issued ASU 2016-02, “Leases.” This guidance changes the requirements for inclusion of certain right-of-use assets and the associated lease liabilities to be included in a statement of financial position. The classification criteria maintains the distinction between finance leases and operating leases. Regarding finance leases, lessees are required to 1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, 2) recognize interest on the lease liability separate from the amortization of the right-of-use asset in the statement of comprehensive income, and 3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. Regarding operating leases, lessees are required to 1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, 2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and 3) classify all cash payments within operating activities in the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We previously disclosed prior to our recent acquisitions that we anticipated no material impact from adopting ASU 2016-02. However, we are in the process of updating our assessment to include the impact of our recently acquired companies.

In March 2016, the FASB issued ASU 2016-09, “Compensation — Stock Compensation.” The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The guidance is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. The standard became effective for the interim reporting period ending June 30, 2017 and has not had a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other.” This guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of goodwill. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU also removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment, and if it fails that qualitative test to perform Step 2 of the goodwill impairment test. Companies are to apply the standard on a prospective basis. The guidance is effective for public companies that are an SEC filer for fiscal years beginning after December 15, 2019. Early adoption is permitted and management elected to adopt this guidance beginning with the interim period ending June 30, 2017. The adoption of this standard has not had a material impact on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging.” The standard aims to align the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results for cash flow and fair value hedge accounting with risk management activities. The guidance is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted in any interim period after issuance. We do not anticipate a material impact from adopting this standard in the first quarter of fiscal year 2019.

In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income." This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. We are currently evaluating the potential impact on our consolidated financial statements and disclosures.

      We have reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to our business or that no material effect is expected on our consolidated financial statements as a result of future adoption.

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2. Earnings Per Share:

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the dilutive effect of potential common stock equivalents during the period. Stock options and unvested service-based RSU awards make up the common stock equivalents and are computed using the treasury stock method.

The table below represents the basic and diluted earnings per share, calculated using the weighted average number of shares of common stock and potential common stock equivalents outstanding for the years ended March 31, 2016, 2017, and 2018:

	Fiscal Year Ended March 31,
	2016		2017		2018
Net income	$	101,535	$	125,785	$	4,910
Computation of Basic EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		167,797		167,506		168,262
Basic earnings per share	$	0.61	$	0.75	$	0.03
Computation of Diluted EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		167,797		167,506		168,262
Effect of stock options		164		331		663
Weighted Average Shares used in Computing Diluted EPS (1)		167,961		167,837		168,925
Diluted earnings per share	$	0.60	$	0.75	$	0.03

(1) Common stock equivalents not included in the computation of diluted earnings per share because the impact would have been anti-dilutive were 2,974 shares, 1,381 shares, and 1,733 shares for the fiscal years ended March 31, 2016, 2017, and 2018, respectively.

3. Comprehensive Income:

Comprehensive income (loss) includes the following components:

	Fiscal Year Ended March 31,
	2016						2017						2018
	Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax
Foreign currency translation adjustment	$	14,330		$	14,330		$	(14,674	)	$	(14,674	)	$	76,711		$	76,711
Foreign currency cash flow hedges adjustment		29			2			205			183			(626	)		(490	)
Pension liability adjustment		11,077			8,209			(10,155	)		(7,527	)		16,063			12,199
Other post-employment obligations		(244	)		(244	)		(777	)		(777	)		-			-
Other comprehensive income (loss)	$	25,192		$	22,297		$	(25,401	)	$	(22,795	)	$	92,148		$	88,420

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The accumulated balance of comprehensive income (loss) is as follows:

	As of March 31,
	2017			2018
Foreign currency translation adjustment	$	(14,330	)	$	62,381
Foreign currency cash flow hedges adjustment		367			(123	)
Pension liability adjustment		(49,618	)		(37,419	)
Other post-employment obligations		(3,582	)		(3,582	)
Accumulated other comprehensive income (loss)	$	(67,163	)	$	21,257

4. Fair Value:

Fair Value Hierarchy:

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

^■ Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

^■ Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

^■ Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

During the fiscal years ended March 31, 2016, 2017, and 2018, there have been no transfers of assets between the levels within the fair value hierarchy.

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
Assets held in the non-qualified deferred compensation program(1)	$	6,082	$	4,810	$	1,272	$	-
Foreign currency derivatives(2)		1,492		-		1,492		-
Total	$	7,574	$	4,810	$	2,764	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Liabilities measured at fair value on a recurring basis:
Obligation related to assets held in the non-qualified deferred compensation program(1)	$	6,082	$	4,810	$	1,272	$	-
Foreign currency derivatives(2)		886		-		886		-
Total	$	6,968	$	4,810	$	2,158	$	-

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			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
Assets held in the non-qualified deferred compensation program(1)	$	6,649	$	5,959	$	690	$	-
Foreign currency derivatives(2)		257		-		257		-
Total	$	6,906	$	5,959	$	947	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Liabilities measured at fair value on a recurring basis:
Obligation related to assets held in the non-qualified deferred compensation program(1)	$	6,649	$	5,959	$	690	$	-
Foreign currency derivatives(2)		514		-		514		-
Total	$	7,163	$	5,959	$	1,204	$	-

(1) The market value of the assets held in the trust for the non-qualified deferred compensation program is included as an asset and as a liability as the trust’s assets are both assets of the Company and also a liability as they are available to general creditors in certain circumstances.

(2) Foreign currency derivatives in the form of forward contracts are included in prepaid and other assets and liabilities in the March 31, 2017 and 2018 consolidated balance sheets. Unrealized gains and losses on derivatives classified as cash flow hedges are recorded in other comprehensive income (loss). Realized gains and losses on derivatives classified as cash flow hedges and gains and losses on derivatives not designated as hedges are recorded in other income.

Valuation Techniques:

The following describes valuation techniques used to value our assets held in the non-qualified deferred compensation plan and derivatives.

Assets held in the non-qualified deferred compensation plan

Assets valued using Level 1 inputs in the table above represent assets from our non-qualified deferred compensation program. The funds in the non-qualified deferred compensation program are valued based on the number of shares in the funds using a price per share traded in an active market.

Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an investment exceeds its fair value, among other factors, we evaluate general market conditions, the duration and extent to which the fair value is less than cost, our intent and ability to hold the investment, and whether or not we expect to recover the security’s entire amortized cost. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.

Derivatives

      We primarily use forward contracts, with maturities generally less than four months, designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in forecasted transactions related to purchase commitments and sales, denominated in various currencies. We also use derivatives not designated as hedging instruments to hedge foreign currency balance sheet exposures. These derivatives are used to offset currency changes in the fair value of the hedged assets and liabilities. Fair values for all of our derivative financial instruments are valued by adjusting the market spot rate by forward points, based on the date of the contract. The spot rates and forward points used are an average rate from an actively traded market. At March 31, 2017 and 2018, all of our forward contracts have been designated as Level 2 measurements.

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5. Accounts Receivable:

	Fiscal Year Ended March 31,
	2017		2018
Gross Accounts Receivable - Trade	$	198,491	$	300,016
Less:
Allowances for doubtful accounts		1,285		1,893
Stock rotation and ship from stock and debit		14,853		15,989
Sales returns and discounts		5,623		6,875
Total allowances		21,761		24,757
	$	176,730	$	275,259

Charges related to allowances for doubtful accounts are charged to selling, general, and administrative expenses. Charges related to stock rotation, ship from stock and debit, sales returns, and sales discounts are reported as deductions from revenue. 

	Fiscal Year Ended March 31,
	2016			2017		2018
Allowances for doubtful accounts:
Beginning Balance	$	659		$	423	$	1,285
Charges		112			785		209
Applications		(348	)		77		(1,524	)
Translation, Acquisition and other		-			-		1,923
Ending Balance	$	423		$	1,285	$	1,893

	Fiscal Year Ended March 31,
	2016			2017			2018
Stock rotation and ship from stock debit:
Beginning Balance	$	16,378		$	14,314		$	14,853
Charges		29,432			25,470			30,523
Applications		(31,496	)		(24,931	)		(29,387	)
Ending Balance	$	14,314		$	14,853		$	15,989

	Fiscal Year Ended March 31,
	2016			2017			2018
Sales returns and discounts:
Beginning Balance	$	6,186		$	6,681		$	5,623
Charges		21,736			13,831			24,150
Applications		(21,271	)		(14,841	)		(23,399	)
Translation, Acquisition and other		30			(48	)		501
Ending Balance	$	6,681		$	5,623		$	6,875

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6. Inventories:

	Fiscal Year Ended March 31,
	2017		2018
Finished goods	$	92,563	$	93,467
Work in process		107,392		133,556
Raw materials		274,173		289,754
	$	474,128	$	516,777

7. Property and Equipment:

	Fiscal Year Ended March 31,
	2017			2018
Land	$	32,839		$	43,209
Buildings and improvements		307,098			393,247
Machinery and equipment		1,150,999			1,470,460
Construction in progress		38,315			73,572
		1,529,251			1,980,488
Accumulated depreciation		(1,289,300	)		(1,562,202	)
	$	239,951		$	418,286

8. Financial Instruments and Investments in Securities:

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, securities investments, and trade accounts receivable. We place our cash and cash equivalents with high credit quality institutions. At times, such investments may be in excess of the Federal Deposit Insurance Corporation insurance limit. Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities comprising our customer base and their dispersion across many different industries and countries. As of March 31, 2018, we believe that our credit risk exposure is not significant.

At March 31, 2017 and 2018 we classified investments in debt securities and time deposits as held-to-maturity securities.

Our long-term and short-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments is recorded as interest income.

Investments in held-to-maturity securities, recorded at amortized cost, were as follows:

	As of March 31, 2017
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Short-term investments:
Corporate bonds	$	10,120	$	-	$	(1	)	$	10,119
Time deposits		518,628		148		-			518,776
	$	528,748	$	148	$	(1	)	$	528,895

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	As of March 31, 2018
	Cost		Gross Unrealized Gains			Gross Unrealized Losses		Estimated Fair Value
Short-term investments:
Commercial Paper	$	10,597	$	(1	)	$	-	$	10,596
Time deposits		269,190		203			-		269,393
	$	279,787	$	202		$	-	$	279,989

The amortized cost and estimated fair value of held-to-maturity investments at March 31, 2018, by contractual maturity, are shown below. The estimated fair value of these investments are based on valuation inputs that include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data, which are Level 2 inputs in the fair value hierarchy. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

	Held-to-Maturity
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	279,787	$	279,989
Due after one year through five years		-		-
Total	$	279,787	$	279,989

9. Income Taxes:

For financial reporting purposes, income before income taxes includes the following components:

	Fiscal Year Ended March 31,
	2016		2017		2018
Domestic	$	39,713	$	75,659	$	85,263
Foreign		92,439		99,290		107,050
Total	$	132,152	$	174,949	$	192,313

The provision for income taxes consisted of:

	Fiscal Year Ended March 31,
	2016			2017			2018
Current:
Federal/State	$	(11,117	)	$	33,220		$	123,527
Foreign		15,028			18,494			19,883
Total		3,911			51,714			143,410
Deferred:
Federal/State		23,903			1,725			25,822
Foreign		2,803			(4,275	)		18,171
Total		26,706			(2,550	)		43,993
	$	30,617		$	49,164		$	187,403

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Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

	As of March 31,
	2017					2018
Non-current:	Assets			Liabilities		Assets			Liabilities
Sales and receivable allowances	$	9,090		$	-	$	5,711		$	-
Inventory reserves		12,276			-		7,645			-
Depreciation and amortization		3,696			-		-			(22,336	)
Pension obligations		5,817			-		550			-
Accrued expenses		34,282			-		30,089			-
Other, net		2,044			-		-			(21,692	)
Net operating loss and tax credit carry forwards		70,360			-		77,108			-
Sub total		137,565			-		121,103			(44,028	)
Less: valuation allowances		(13,933	)		-		(14,250	)		-
Total Non-current	$	123,632		$	-	$	106,853		$	(44,028	)

	As of March 31,
	2017		2018
Assets, net of valuation allowances	$	123,632	$	106,853
Liabilities		-		(44,028	)
Net deferred income tax assets	$	123,632	$	62,825

	As of March 31,
Balance Sheet Presentation	2017			2018
Noncurrent assets	$	124,589		$	75,720
Noncurrent liabilities		(957	)		(12,895	)
Net deferred income tax assets	$	123,632		$	62,825

	As of March 31,
	2016			2017			2018
Valuation allowance beginning balance	$	27,207		$	26,034		$	13,933
Charged to income tax provision		413			(1,128	)		(2,879	)
Additions		-			-			2,975
Releases		(2,730	)		(7,413	)		-
Translation and other		1,144			(3,560	)		221
Valuation allowance ending balance	$	26,034		$	13,933		$	14,250

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Reconciliation between the U.S. Federal statutory income tax rate and our effective rate for income tax is as follows:

	Fiscal Year Ended March 31,
	2016		2017		2018
U.S. Federal statutory rate		35.0%		35.0%		31.5%
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal benefit		0.4		0.5		0.8
Effect of foreign operations		(8.7)		(8.3)		(7.1)
Change in valuation allowance		0.5		(5.0)		-
Deemed dividends from subsidiaries		2.9		6.3		7.3
Deduction for domestic production activities		-		(1.7)		(1.2)
Utilization of foreign tax credits		(2.4)		(3.9)		(4.0)
US and Foreign Tax Reform		-		-		66.7
Change in uncertain tax positions		(2.6)		(0.8)		0.2
Adjustment made by taxing authorities		-		3.3		-
Adjustment of prior year balances		-		1.7		1.4
Other, net		(1.9)		1.0		1.8
Effective tax rate		23.2%		28.1%		97.4%

At March 31, 2018, certain of our foreign subsidiaries in Brazil, France, Germany, Israel, Japan, and Korea had tax net operating loss carry forwards totaling approximately $206,212 of which most had no expiration date. There is a greater likelihood of not realizing the future tax benefits of these net operating losses and other deductible temporary differences in Brazil, Israel, China, and Korea since these losses and other deductible temporary differences must be used to offset future taxable income of those subsidiaries, which cannot be assured, and are not available to offset taxable income of other subsidiaries located in those countries. Accordingly, we have recorded valuation allowances related to the net deferred tax assets in these jurisdictions. Valuation allowances decreased $(1,173), $(12,101), and increased $317 during the years ended March 31, 2016, 2017, and 2018, respectively, as a result of changes in the net operating losses of the subsidiaries or as a result of changes in foreign currency exchange rates in the countries mentioned above.

The decrease in valuation allowance during the year ended March 31, 2017 was also due to the reversal of valuation allowances of $5,530 related to the future utilization of NOLs totaling $15,878 at a Japanese subsidiary. The related tax benefits upon utilization of the Japanese NOLs expire eight years after they are generated, and they are not subject to annual utilization limitations. The realization of tax benefits due to the utilization of these NOLs could take an extended period of time to realize and are dependent upon the Japanese subsidiary’s continuing profitability, and some could expire prior to utilization.

Income taxes paid totaled $22,919, $55,642 and $66,354 during the years ended March 31, 2016, 2017 and 2018, respectively.

We do not expect that the balances with respect to our uncertain tax positions will significantly increase or decrease within the next 12 months. For our more significant locations, we are subject to income tax examinations for the tax years 2014 and forward in the United States, 2014 and forward in Germany, 2012 and forward in Hong Kong, and 2012 and forward in the United Kingdom.

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A reconciliation of the beginning and ending balance for liabilities associated with uncertain tax positions is as follows:

Balance at March 31, 2015	$	6,776
Additions for tax positions of prior years		10
Additions for tax positions in current period		228
Reductions for tax positions of prior years		(30	)
Reductions due to expiration of statutory periods		(3,585	)
Balance at March 31, 2016	$	3,399
Reductions for tax positions of prior years		(89	)
Reductions due to expiration of statutory periods		(895	)
Reductions due to settlements with taxing authorities		(478	)
Balance at March 31, 2017	$	1,937
Additions for tax positions of prior years		948
Additions for tax positions in current period		642
Reductions due to expiration of statutory periods		(317	)
Balance at March 31, 2018	$	3,210

We recognize interest and penalties related to uncertain tax positions in interest expense. As of March 31, 2017 and 2018, we had accrued interest related to uncertain tax positions of $340 and $470, respectively. During the year ended March 31, 2017 and 2018, we recognized a $(195) reduction in interest expense mainly due to the expirations of statutory periods and a $71 increase in interest expense mainly due to the Ethertronics acquisition.

The amount of unrecognized tax benefits recorded on our balance sheet that, if recognized, would affect the effective tax rate is approximately $1,937 and $3,210 at March 31, 2017 and 2018, respectively. This amount excludes the accrual for estimated interest discussed above.

10. Acquisitions:

On October 2, 2017, AVX acquired the AB Electronics sensing and control business from TT Electronics, PLC, for $162,038, net of cash acquired. Now named Sensing and Control (“S&C”) and consolidated within our Interconnect, Sensing and Control Devices segment (formerly AVX Interconnect) for financial reporting purposes, the acquisition enhances AVX’s position in the automotive business and provides further opportunities for expansion and growth. Goodwill associated with the acquisition has been allocated to the Interconnect, Sensing and Control Devices reporting unit.

We have used the acquisition method of accounting to record the transaction in accordance with FASB Accounting Standards Codification Topic 805, “Business Combinations.” In accordance with the acquisition method, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values with the excess being allocated to goodwill. Factors that contributed to the recognition of goodwill include expected synergies and the trained workforce. The goodwill is not deductible for tax purposes.

As of March 31, 2018, the allocation of the purchase price was prepared based on estimates of fair values, as shown in the table below. The results of operations for S&C since the acquisition date are included in the accompanying consolidated statement of operations.

Assets Acquired and Liabilities Assumed	Allocation of Purchase Price
Accounts receivable	$	61,483
Inventory		42,443
Accounts payable and accrued liabilities		(67,343	)
Other current assets and liabilities, net		9,250
Working capital		45,833
Property and equipment		85,794
Intangible assets		18,168
Other non-current assets and liabilities, net		(13,806	)
Total identified assets and liabilities		135,989
Purchase price		162,038
Goodwill	$	26,049

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We recorded approximately $18,168 of identifiable intangible assets and $26,049 of Goodwill as indicated above. The acquired intangible assets relate to the S&C trade name, existing technology and customer relationships which are being amortized over one, eleven, and six years respectively.  In the quarter ended March 31, 2018 goodwill increased by $9,691.

The unaudited pro forma combined financial information is provided for the twelve month periods ended 2018 as though S&C had been acquired as of April 1, 2016. These unaudited pro forma combined results of revenues have been prepared by adjusting our historical results to include the historical results of S&C based on information available. Unaudited pro forma net sales for the twelve month periods ended March 31, 2017 and 2018 would be $1,633,626 and $1,736,425, respectively. We recognized revenue of $193,326 from S&C in fiscal 2018.

On January 31, 2018, AVX acquired Ethertronics, Inc. for $128,242 net of cash and debt acquired. Now named AVX Antenna and consolidated with our Electronic Components segment. The purchase of Ethertronics expands AVX’s extensive electronic product offering into the antenna technology market and will provide new and exciting growth opportunities for AVX going forward.

The Company has used the acquisition method of accounting to record the transaction in accordance with FASB Accounting Standards Codification Topic 805, “Business Combinations.” In accordance with the acquisition method, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values with the excess being allocated to goodwill. Factors that contributed to the recognition of goodwill include expected synergies and the trained workforce. The goodwill is not deductible for tax purposes.

As of March 31, 2018, the allocation of the purchase price was prepared based on estimates of fair values, as shown in the table below. The results of operations for AVX Antenna since the acquisition date are included in the accompanying consolidated statement of operations.

Assets Acquired and Liabilities Assumed	Allocation of Purchase Price
Accounts receivable	$	16,350
Accounts payable		(10,141	)
Other current assets and liabilities, net		2,868
Working capital		9,077
Debt		(21,105	)
Property and equipment		13,760
Intangible assets		64,800
Other non-current assets and liabilities, net		(13,763	)
Total identified assets and liabilities		52,769
Purchase price		128,242
Goodwill	$	75,473

We recorded approximately $64,800 of identifiable intangible assets and $75,473 of Goodwill as indicated above. The acquired intangible assets relate to the AVX Antenna trade name, existing technology and customer relationships which are being amortized over ten, ten, and thirteen years, respectively. We recognized revenue of $12,740 from AVX Antenna in fiscal 2018.

Our estimates of fair value and resulting purchase price allocations related to our fiscal 2018 acquisitions are preliminary. We are in the process of finalizing the valuations. The final allocation of the purchase price may differ from the information presented in these Consolidated Financial Statements.

11. Employee Retirement Plans:

 Pension Plans:

We sponsor various defined benefit pension plans covering certain employees. Pension benefits provided to certain U.S. employees covered under collective bargaining agreements are based on a flat benefit formula. Effective December 31, 1995, we froze benefit accruals under our domestic non-contributory defined benefit pension plan for a significant portion of the employees covered under collective bargaining agreements. Our pension plans for certain international employees provide for benefits based on a percentage of final pay. Our funding policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws.

We recognize the overfunded or underfunded status of our defined benefit post-retirement plans as an asset or liability in our statement of financial position and recognize changes in that funded status in the year in which the changes occur through comprehensive income. The adjustment to our pension liability due to the change in the funded status of our plans resulted in an increase in recorded net pension liabilities by $1,069 during the fiscal year ended March 31, 2017, and an increase in recorded net pension assets by $21,016 during the fiscal year ended March 31, 2018.

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The change in the benefit obligation and plan assets of the U.S. and international defined benefit plans for 2017 and 2018 were as follows:

	Fiscal Year Ended March 31,
	U.S. Plans						International Plans
	2017			2018			2017			2018
Change in benefit obligation:
Benefit obligation at beginning of year	$	42,980		$	38,625		$	156,617		$	169,921
Service cost		168			131			902			959
Interest cost		1,457			1,408			4,310			4,383
Plan participants' contributions		-			-			7			-
Actuarial loss (gain)		(2,443	)		(633	)		32,882			(11,077	)
Benefits paid		(3,537	)		(3,297	)		(6,029	)		(8,420	)
Foreign currency exchange rate changes		-			-			(18,768	)		22,732
Benefit obligation at end of year	$	38,625		$	36,234		$	169,921		$	178,498
Change in plan assets:
Fair value of plan assets at beginning of year	$	34,125		$	36,689		$	156,410		$	161,726
Actual return (loss) on assets		3,100			2,355			24,432			8,121
Employer contributions		3,001			261			6,934			7,761
Plan participants' contributions		-			-			7			-
Benefits paid		(3,537	)		(3,298	)		(6,029	)		(7,702	)
Foreign currency exchange rate changes		-			-			(20,028	)		21,756
Fair value of plan assets at end of year		36,689			36,007			161,726			191,662
Funded status	$	(1,936	)	$	(227	)	$	(8,195	)	$	13,164

The combined accumulated benefit obligation at March 31, 2017 and 2018 was $208,546 and $214,732 respectively.

At March 31, 2018, the accumulated benefit obligation exceeded the fair value of the assets for all of the U.S. defined benefit plans and all but one of the international defined benefit plans.

Our assumptions used in determining the pension assets and liabilities were as follows:

	As of March 31,
	2017			2018
Assumptions:
Discount rates	0.1	-	3.8%	0.3	-	3.8%
Increase in compensation		-			-

The following table shows changes in accumulated comprehensive income, excluding the effect of income taxes, related to amounts recognized in other comprehensive income during fiscal 2017 and 2018 and amounts reclassified to the statement of operations as a component of net periodic pension cost during fiscal 2017 and 2018.

	Fiscal Year Ended March 31,
	U.S. Plans						International Plans
	2017			2018			2017			2018
Beginning balance	$	17,909		$	12,323		$	38,189		$	46,201
Net loss (gain) incurred during the year		(3,762	)		(1,187	)		14,248			(13,766	)
Amortization of net actuarial loss		(1,824	)		(1,143	)		(1,241	)		(1,974	)
Foreign currency exchange rate changes		-			-			(4,995	)		6,420
Ending Balance	$	12,323		$	9,993		$	46,201		$	36,881

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Amounts that have not yet been recognized as components of net periodic pension cost as a component of accumulated comprehensive income (loss) at March 31, 2017 and 2018 are as follows:

	Fiscal Year Ended March 31,
	U.S. Plans				International Plans
	2017 (1)		2018 (2)		2017 (1)		2018 (2)
Unrecognized net actuarial loss	$	7,895	$	7,792	$	36,549	$	29,487
Unamortized prior service cost		-		-		-		-
Total	$	7,895	$	7,792	$	36,549	$	29,487

(1) Amounts in the above table as of March 31, 2017 are net of $4,428 and $9,652 tax benefit for the U.S. and International Plans, respectively.

(2) Amounts in the above table as of March 31, 2018 are net of $2,201 and $7,394 tax benefit for the U.S. and International Plans, respectively.

The March 31, 2018 balance of unrecognized net actuarial losses expected to be amortized in fiscal 2018 is $917 for the U.S. Plans and $1,317 for the International Plans, respectively.

Net pension cost related to these pension plans includes the following components:

	Fiscal Year Ended March 31,
	2016			2017			2018
Service cost	$	1,177		$	1,102		$	1,038
Interest cost		6,939			5,997			5,516
Expected return on plan assets		(8,677	)		(7,579	)		(7,231	)
Recognized actuarial loss		3,740			3,142			3,130
Net periodic pension cost	$	3,179		$	2,662		$	2,453

Our assumptions used in determining the net periodic pension expense were as follows:

	As of March 31,
	2016			2017			2018
Assumptions:
Discount rates	0.5%	-	3.6%	0.1%	-	3.6%	0.3	-	3.8%
Increase in compensation		3.4%			3.4%			0.0%
Expected long-term rate of return on plan assets	1.4%	-	7.3%	1.4%	-	4.2%	1.4	-	3.3%

The pension expense is calculated based upon a number of actuarial assumptions established annually for each plan year, detailed in the table above, including discount rate, rate of increase in future compensation levels, and expected long-term rate of return on plan assets. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s measurement date and determine a level equivalent yield that may be unique to each plan. On that basis, the range of discount rates remained constant from March 31, 2017 to March 31, 2018.

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The fair value of pension assets at March 31, 2017 and 2018 was determined using:

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:
Cash	$	166	$	166	$	-	$	-
Pooled Separate Accounts		29,046		-		29,046		-
Guaranteed Interest Account		7,477		-		7,477		-
International Defined Benefit Plan Assets:
Cash		608		608		-		-
Depository Account		7,897		7,897		-		-
Pooled Separate Accounts		153,222		-		153,222		-
Total	$	198,416	$	8,671	$	189,745	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:
Cash	$	170	$	170	$	-	$	-
Pooled Separate Accounts		28,071		-		28,071		-
Guaranteed Interest Account		7,766		-		7,766		-
International Defined Benefit Plan Assets:
Cash		480		480		-		-
Depository Account		8,664		8,664		-		-
Pooled Separate Accounts		182,518		-		182,518		-
Total	$	227,669	$	9,314	$	218,355	$	-

Assets valued using Level 1 inputs in the table above are cash and an interest-bearing depository account.

Assets valued using Level 2 inputs in the table above are investments held in pooled separate accounts and a guaranteed deposit account. See discussion in the “Valuation of Investments” section below.

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Valuation of Investments

Our investments are held in a Depository Account, Pooled Separate Accounts, and a Guaranteed Deposit Account. Assets held in the Depository Account are cash and cash equivalents. Investments held in the Pooled Separate Accounts are based on the fair value of the underlying securities within the fund, which represent the net asset value, a practical expedient to fair value, of the units held by the pension plan at year-end. Those assets held in the Guaranteed Deposit Account are valued at the contract value of the account, which approximates fair value. The contract value represents contributions plus accumulated interest at the contract rate, less benefits paid to participants, contract administration fees, and other direct expenses.

The expected long-term rate of return on plan assets assumption is based upon actual historical returns and future expectations for returns for each asset class. These expected results were adjusted for payment of reasonable expenses from plan assets. Our long-term strategy is for target allocation of 50% equity and 50% fixed income for our U.S. defined benefit plans and 45% equity and 55% fixed income for our international defined benefit plans.

Our pension plans’ weighted average asset allocations at March 31, 2017 and 2018, by asset category are as follows:

	As of March 31, 2017				As of March 31, 2018
Asset Category	U.S. Plans		International Plans		U.S. Plans		International Plans
Equity securities		59%		38%		57%		33%
Debt securities		20%		57%		22%		62%
Other		21%		5%		21%		5%
Total		100%		100%		100%		100%

We make contributions to our defined benefit plans as required under various pension funding regulations. We expect to make contributions of approximately $6,571 to the international plans in fiscal 2019 based on current actuarial computations.

Estimated future benefit payments are as follows:

Fiscal Year ended March 31,	U.S. Plans		International Plans
2019	$	2,235	$	7,545
2020		2,287		7,684
2021		2,361		7,832
2022		2,413		7,975
2023		2,468		8,122
2024-2028		12,706		42,895

Savings Plans:

We sponsor retirement savings plans, which allow eligible employees to defer part of their annual compensation. Certain contributions by us are discretionary and are determined by our Board of Directors each year. Our contributions to the savings plans in the United States for the fiscal years ended March 31, 2016, 2017 and 2018 were approximately $4,222, $4,367, and $4,421, respectively.

We also sponsor a nonqualified deferred compensation program, which permits certain employees to annually elect to defer a portion of their compensation until retirement. A portion of the deferral is subject to a matching contribution by us. The employees select among various investment alternatives, which are the same as are available under the retirement savings plans, with the investments held in a separate trust. The value of the participants’ balances fluctuate based on the performance of the investments. The market value of the trust at March 31, 2017 and 2018 of $6,082 and $6,649, respectively, is included as an asset and a liability in our accompanying balance sheet because the trust’s assets are both assets of the Company and a liability as they are available to general creditors in certain circumstances.

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12. Stock-Based Compensation:

Under the 2014 RSU Plan, we may grant restricted stock units of up to an aggregate of 3,000 units. Each unit converts to one share of the Company’s stock at the time of vesting. The fair value of RSU awards is determined at the closing market price of the Company’s common stock at the date of grant. For the years ended March 31, 2017 and 2018, there were 266 and 292 awards, respectively, granted from this plan. Restricted stock activity during the year ended 2018 is as follows:

	March 31, 2018
	Number of Shares			Weighted-Average Grant Date Fair Value per Share
Non-vested at March 31, 2017		259			13.36
Granted		292			16.93
Vested		(101	)		13.36
Cancelled and forfeited		(92	)		13.36
Non-vested at March 31, 2018		358			16.27

Performance-based awards vest one year after the grant date. Service-based awards vest as to one-third annually with the requisite service periods beginning on the grant date. Awards are amortized over their respective grade-vesting periods. The total unrecognized compensation costs related to unvested stock awards expected to be recognized over the vesting period, approximately three years, was $1,132 at March 31, 2018.

We have four fixed stock option plans. Under the 2004 Stock Option Plan, as amended, we may grant options to employees for the purchase of up to an aggregate of 10,000 shares of common stock. Under the 2004 Non-Employee Directors’ Stock Option Plan, as amended, we may grant options for the purchase of up to an aggregate of 1,000 shares of common stock. No awards were made under these two plans after August 1, 2013. Under the 2014 Stock Option Plan, we can grant options to employees for the purchase of up to an aggregate of 10,000 shares of common stock. Under the 2014 Non-Employee Directors’ Stock Option Plan, as amended, we can grant options to our directors for the purchase of up to an aggregate of 1,000 shares of common stock. Under all plans, the exercise price of each option shall not be less than the market price of our stock on the date of grant and an option’s maximum term is 10 years. Options granted under the 2004 Stock Option Plan and the 2014 Stock Option Plan vest as to 25% annually and options granted under the 2004 Non-Employee Directors’ Stock Option Plan and the 2014 Non-Employee Director’s Stock Option Plan vest as to one-third annually. Requisite service periods related to all plans begin on the grant date. As of March 31, 2018, there were 12,574 shares of common stock available for future issuance under all of the plans, consisting of options available to be granted and options currently outstanding.

Activity under our stock option plans is summarized as follows:

	Number of Shares			Average Price (a)		Average Life (years) (b)		Aggregate Intrinsic Value
Outstanding at March 31, 2017		2,719		$	13.65		-		-
Options granted		-			-		-		-
Options exercised		(433	)		13.38		-	$	1,724
Options cancelled/forfeited		(392	)		17.67		-		55
Outstanding at March 31, 2018		1,894		$	12.90		4.12	$	6,912
Exercisable at March 31, 2018		1,601		$	12.66		3.64	$	6,224

(a) Weighted-average exercise price

(b) Weighted-average contractual life remaining

The total aggregate intrinsic value of options exercised is $170, $2,149, and $1,724 for fiscal years ended March 31, 2016, 2017, and 2018, respectively.

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Unvested share activity under our stock option plans for the year ended March 31, 2018 is summarized as follows:

	Number of Shares			Weighted Average Grant- Date Fair Value
Unvested balance at March 31, 2017		608		$	2.52
Options granted		-			-
Options cancelled/forfeited		(14	)		2.58
Options vested		(301	)		2.47
Unvested balance at March 31, 2018		293		$	2.57

The total unrecognized compensation costs related to unvested option awards expected to be recognized over the vesting period, approximately four years, was $984 and $59 as of March 31, 2017 and 2018, respectively. The total aggregate fair value of options vested is $951, $994, and $747 for fiscal years ended March 31, 2016, 2017, and 2018, respectively.

The weighted average estimated fair value of our stock options granted at grant date market prices was $2.49, $2.52, and $2.57 per option during fiscal years ended March 31, 2016, 2017, and 2018, respectively. The consolidated statement of operations includes $2,224, net of $1,183 of tax benefit, in stock-based compensation expense for fiscal 2018.

Our weighted average fair value is estimated at the date of grant using a Black-Scholes-Merton option-pricing model. We estimated volatility by considering our historical stock volatility. We calculated the dividend yield based on historical dividends paid. We have estimated forfeitures in determining the weighted average fair value calculation. The forfeiture rate used for the fiscal year ended March 31, 2018 was 0%. No stock options were granted during fiscal 2018. 

13. Commitments and Contingencies:

We are a lessee under long-term operating leases primarily for office space, warehouse, plant and equipment. Future minimum lease commitments under non-cancelable operating leases as of March 31, 2018, were as follows:

Fiscal Year ended March 31, 2018
2019	$	6,803
2020		4,844
2021		3,398
2022		2,340
2023		1,943
Thereafter		2,277

Rental expense for operating leases was $6,352, $5,919, and $7,374 for the fiscal years ended March 31, 2016, 2017, and 2018, respectively.

Occasionally we enter into delivery contracts with selected suppliers for certain metals used in our production processes. The delivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As of March 31, 2018, we had no significant outstanding purchase commitments.

We have been identified by the United States Environmental Protection Agency (“EPA”), state governmental agencies or other private parties as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), or equivalent state or local laws, for clean-up and response costs associated with certain sites at which remediation is required with respect to prior contamination. Because CERCLA or such state statutes authorize joint and several liability, the EPA or state regulatory authorities could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and other PRPs.

To resolve our liability at the sites at which we have been named a PRP, we have entered into various administrative orders and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. As is customary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur, such as the discovery of significant new information about site conditions.

On June 3, 2010, AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford, Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New Bedford with respect to the satisfaction of AVX’s federal law requirements. The Massachusetts Department of Environmental Protection has jurisdiction over the balance of the environmental remediation at the Site. AVX has submitted its proposed remedy, but until the state has approved such proposal, AVX cannot determine if additional groundwater and soil remediation will be required, if substantial material will have to be disposed of offsite, or if additional remediation techniques will be required, any of which could result in a more extensive and costly plan of remediation. Further, the Site and the remediation may be subject to additional scrutiny under other statutory procedures which could also add to the cost of remediation. We have a remaining accrual of $14,150 at March 31, 2018, representing our current estimate of the potential liability related to the remaining performance of environmental remediation actions at the Site and neighboring properties using certain assumptions regarding the plan of remediation. Until all parties agree and remediation is complete, we cannot be certain there will be no additional cost relating to the Site.

We had total reserves of approximately $19,181 and $18,618 at March 31, 2017 and March 31, 2018, respectively, related to various environmental matters and sites, including those discussed above. These reserves are classified in the Consolidated Balance Sheets as $3,892 and $3,329 in accrued expenses at March 31, 2017 and March 31, 2018, respectively, and $15,289 in other non-current liabilities at both March 31, 2017 and March 31, 2018. The amounts recorded for identified environmental liabilities are based on estimates. Periodically, we review amounts recorded and adjust them to reflect additional legal and technical information that becomes available. Uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could differ from our current estimates.

On April 19, 2016, the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order naming AVX Corporation, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at one time the site of operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. This Director’s Order follows a draft order issued on November 4, 2015. AVX has taken the position that any liability of Aerovox Canada for such site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek to enforce such Canadian order against AVX, and whether, in the event it does so, AVX will have any liability under applicable law. AVX intends to contest any such course of action that may be taken by the MoE.

We also operate, or did at one time, on other sites that may have potential future environmental issues as a result of activities at sites during AVX’s long history of manufacturing operations or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. A separate account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and do not reflect any possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing at multiple party sites or indemnification of our liability by a third party.

We are not involved in any pending or threatened environmental proceedings that would require curtailment of our operations. We continually expend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in compliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily have knowledge of all past occurrences on sites that we currently occupy. New environmental regulations may be enacted and we cannot determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future.

On April 25, 2013, AVX was named as a defendant in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v. AVX Corporation. This case alleged that certain AVX products infringe on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first phase of a segmented trial and a mixed verdict in the second phase of a segmented trial, and found damages to Greatbatch in the amount of $37,500, which was recorded in fiscal 2016.  That verdict was later vacated by the court on March 30, 2018.  Profit from operations for the year ended March 31, 2018 reflects a favorable accrual adjustment of $1,500 related to this patent infringement case.  The amount of damages will be subject to further legal proceedings including a potential trial on damages, which we expect to occur in fiscal 2019.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent infringement case filed in the United States District Court of the Southern District of California captioned Presidio Components, Inc. v. American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016, the jury returned a verdict in favor of the plaintiff and found damages to Presidio. On August 17, 2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction whereby ATC was allowed to continue to sell the disputed product until March 17, 2017 to anyone who was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent injunction were subject to court mandated intellectual property damages for each product sold. In December, 2017, a panel of the Federal Circuit vacated the damage award to Presidio, vacated the injunction, and remanded the case for further proceedings to determine damages limited to “reasonable royalties” and to reconsider the requested injunction in light of its opinion and any additional facts.

As of March 31, 2018, we had total reserves of $76,502 plus accrued interest in accrued expenses with respect to the two intellectual property cases discussed above. The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to reflect additional information that becomes available. Accordingly, these costs could differ from our current estimates.

During calendar year 2014, AVX was named as a co-defendant in a series of cases filed in the United States and in the Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States, state and Canadian antitrust laws asserting that AVX and numerous other companies were participants in alleged price-fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on October 2, 2014. Some plaintiffs have broken off from the United States class action and filed actions on their own, although AVX is not named in all of these independent actions. The cases in Canada have not been consolidated. These cases are still in progress. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot predict the outcome of these other disputes and proceedings, we believe, based upon a review with legal counsel, that none of these other disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss), or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that may arise and their potential impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

14. Derivative Financial Instruments:

We are exposed to foreign currency exchange rate fluctuations in the normal course of business. We use derivative instruments (forward contracts) to hedge certain foreign currency exposures as part of our risk management strategy. The objective is to offset gains and losses resulting from these exposures with gains and losses on the forward contracts used to hedge them, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. We do not enter into any trading or speculative positions with regard to derivative instruments.

We primarily use forward contracts, with maturities less than four months, to protect against the foreign currency exchange rate risks inherent in our forecasted transactions related to purchase commitments and sales, denominated in various currencies. These derivative instruments are designated and qualify as cash flow hedges.

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The effectiveness of the cash flow hedges is determined by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the hedged transaction, both of which are based on forward rates. The effective portion of the gain or loss on these cash flow hedges is initially recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Once the hedged transaction is recognized, the gain or loss is recognized in our statement of operations. At March 31, 2017 and 2018, respectively, we had the following forward contracts that were entered into to hedge against the volatility of foreign currency exchange rates for certain forecasted sales and purchases.

March 31, 2017	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	1,151	Accrued expenses	$	690

March 31, 2018	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	212	Accrued expenses	$	377

For these derivatives designated as cash flow hedging instruments, during fiscal 2016, 2017, and 2018, net pre-tax gains (losses) of $40, $1,095, and $(5), respectively, were recognized in other comprehensive income (loss). In addition, during fiscal 2016, 2017, and 2018, net pretax gains (losses) of $(773), $3,355, and $1,807, respectively, were reclassified from accumulated other comprehensive income (loss) into cost of sales (for hedging purchases), and net pre-tax gains of $807, $1,710 and $ (2,264), respectively, were reclassified from accumulated other comprehensive income (loss) into sales (for hedging sales) in the accompanying statement of operations.

Derivatives not designated as cash flow hedging instruments consist primarily of forwards used to hedge foreign currency balance sheet exposures. These hedging instruments are used to offset foreign currency changes in the fair values of the underlying assets and liabilities. The gains and losses on these foreign currency forward contracts are recognized in other income and expense in the same period as the remeasurement gains and losses of the related foreign currency denominated assets and liabilities and thus naturally offset these gains and losses. At March 31, 2017 and 2018, we had the following forward contracts that were entered into to hedge against these exposures.

March 31, 2017	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	341	Accrued expenses	$	196

March 31, 2018	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	45	Accrued expenses	$	137

For these derivatives not designated as cash flow hedging instruments during fiscal 2016, 2017, and 2018, gains/(losses) of $(818), $460, and $(791), respectively, were recognized in other expense, which partially offset the $1,231, $(2,059) and $(2,289) in exchange gains/(losses), respectively, that were recognized in other income in the accompanying statement of operations.

At March 31, 2017 and 2018, we had outstanding foreign exchange contracts with notional amounts totaling $193,156 and $156,238, respectively, denominated primarily in Euros, Czech Korunas, British Pounds, and Japanese Yen.

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15. Transactions With Affiliate:

Our business includes certain transactions with our majority shareholder, Kyocera, that are governed by agreements between the parties that define the sales terms, including pricing for the products. The nature and amounts of transactions with Kyocera are included in the table below.

	Fiscal Year Ended March 31,
	2016		2017		2018
Sales:
Product and equipment sales to affiliates	$	22,230	$	30,303	$	26,069
Purchases:
Purchases of resale inventories, raw materials, supplies, equipment, and services		233,637		303,793		256,660
Other:
Dividends paid		51,156		52,983		54,810

     Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement in December 2016 of its intent, effective January 1, 2018, to market its manufactured electronic and interconnect products globally using Kyocera’s sales force rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Sales of Kyocera resale products by AVX were $296,316 and related operating profit was $18,177 for the fiscal year ended March 31, 2018.

     AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement in February 2017 of its intent, effective April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera resell such products in this territory. Sales of AVX resale products by Kyocera were $21,892 for the fiscal year ended March 31, 2018.

16. Segment and Geographic Information:

Our operating segments are based on the types of products from which we generate revenues. We are organized by product lines with five main product groups and three reportable segments: Electronic Components, Interconnect, Sensing and Control Devices, and KED Resale. The product groups of Ceramic, Advanced, and Tantalum have been aggregated into the Electronic Components reportable segment in accordance with the aggregation criteria and quantitative thresholds. The aggregation criteria consist of similar economic characteristics, products and services, production processes, customer classes, and distribution channels. The Electronic Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick and thin film components, surface mount and leaded tantalum capacitors, surface mount and leaded film capacitors, ceramic and film power capacitors, super capacitors, EMI filters (bolt in and surface mount), thick and thin film packages of multiple electronic integrated components, varistors, thermistors, inductors, and resistive products manufactured by us or purchased from other manufacturers for resale. The Interconnect, Sensing and Control Devices segment consists primarily of automotive sensing and control devices and automotive, telecom, and memory connectors manufactured by or for AVX. The KED Resale segment consists primarily of ceramic capacitors, frequency control devices, SAW devices, sensor products, RF modules, actuators, acoustic devices, and connectors produced by Kyocera and resold by AVX. Sales and operating results from these reportable segments are shown in the tables below. In addition, we have a corporate administration group consisting of finance, legal, environmental, health & safety (“EH&S”), and administrative activities.

We evaluate performance of our segments based upon sales and operating profit. There are no intersegment revenues. We allocate the costs of shared resources between segments based on each segment’s usage of the shared resources. Cash, accounts receivable, investments in securities, and certain other assets, which are centrally managed, are not readily allocable to operating segments.

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The tables below present information about reported segments:

	Fiscal Year Ended March 31,
Sales revenue (in thousands)	2016		2017		2018
Ceramic Components	$	176,502	$	188,568	$	226,204
Tantalum Components		311,888		314,723		366,194
Advanced Components		333,693		372,279		346,459
Total Electronic Components		822,083		875,570		938,857
Interconnect, Sensing and Control Devices		111,609		118,163		327,301
KCP Resale Connectors		23,751		30,027		36,090
KDP and KCD Resale		238,086		288,901		260,226
Total KED Resale		261,837		318,928		296,316
Total Revenue	$	1,195,529	$	1,312,661	$	1,562,474

	Fiscal Year Ended March 31,
	2016			2017			2018
Operating profit (loss):
Electronic Components	$	198,268		$	190,007		$	204,624
Interconnect, Sensing and Control Devices		19,954			16,437			17,802
KED Resale		16,764			17,076			18,177
Corporate activities		(111,002	)		(59,963	)		(60,769	)
Total	$	123,984		$	163,557		$	179,834

	Fiscal Year Ended March 31,
	2016		2017		2018
Depreciation and amortization:
Electronic Components	$	28,460	$	27,543	$	32,024
Interconnect, Sensing and Control Devices		5,300		5,093		17,088
KED Resale		83		16		22
Corporate activities		5,108		10,035		10,654
Total	$	38,951	$	42,687	$	59,788

	As of March 31,
	2017		2018
Assets:
Electronic Components	$	573,519	$	613,385
Interconnect, Sensing and Control Devices		56,295		241,959
KED Resale		35,164		18,629
Cash, A/R, and investments in securities		1,294,129		1,111,716
Goodwill - Electronic Components		202,774		278,247
Goodwill - Interconnect, Sensing and Control Devices		10,277		38,051
Corporate activities		305,255		370,779
Total	$	2,477,413	$	2,672,766

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	Fiscal Year Ended March 31,
	2016		2017		2018
Capital expenditures:
Electronic Components	$	36,400	$	50,982	$	61,581
Interconnect, Sensing and Control Devices		9,237		14,054		38,040
KED Resale		29		1		-
Corporate activities		2,437		1,251		916
Total	$	48,103	$	66,288	$	100,537

During the fiscal years ended March 31, 2018 and March 31, 2017, no customers accounted for more than 10% of our sales. As of March 31, 2018, no customer represented more than 10% of our accounts receivable balance. As of March 31, 2017, one customer represented 12% of our accounts receivable balance.

The following geographic data is based upon net sales generated by operations located within that geographic area and the physical location of long-lived assets. Substantially all of the sales in the Americas region were generated in the United States.

	Fiscal Year Ended March 31,
	2016		2017		2018
Net sales:
Americas	$	358,372	$	381,695	$	399,963
Europe		339,768		352,064		581,255
Asia		497,389		578,902		581,256
Total	$	1,195,529	$	1,312,661	$	1,562,474
Property, plant and equipment, net:
Americas	$	91,674	$	110,235	$	134,656
Europe		77,619		77,981		191,727
Asia		48,705		51,735		91,903
Total	$	217,998	$	239,951	$	418,286

17. Summary of Quarterly Financial Information (Unaudited):

Quarterly financial information for the fiscal years ended March 31, 2017 and 2018 is as follows:

	First Quarter				Second Quarter
	2017		2018		2017		2018
Net sales	$	314,823	$	331,354	$	327,461	$	352,693
Gross profit		69,863		73,846		61,799		77,273
Net income		29,889		31,484		26,520		34,818
Basic earnings per share		0.18		0.19		0.16		0.21
Diluted earnings per share		0.18		0.19		0.16		0.21

	Third Quarter					Fourth Quarter
	2017		2018			2017		2018
Net sales	$	340,799	$	431,795		$	329,578	$	446,632
Gross profit		79,391		82,103			73,702		85,640
Net income (loss)		35,519		(93,212	)		33,857		31,820
Basic earnings (loss) per share		0.21		(0.55	)		0.20		0.19
Diluted earnings (loss) per share		0.21		(0.55	)		0.20		0.19

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18. Subsequent Events

On April 30, 2018, AVX Corporation, through its subsidiary AVX Interconnect Europe GmbH, completed the purchase of KUMATEC Sondermaschinenbau & Kunststoffverarbeitung GmbH (“Kumatec”) for a consideration of approximately EUR $12,500, subject to customary post-closing adjustments. The purchase includes Kumatec’s 50% interest in KUMATEC Hydrogen GmbH Co. KG which was recently spun out of Kumatec. For additional information about this transaction, see the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 30, 2018, and Exhibit 10.19 found in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Form 10-K.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of AVX Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of AVX Corporation and its subsidiaries as of March 31, 2018 and 2017, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended March 31, 2018, including the related notes (collectively referred to as the “consolidated financial statements”).  We also have audited the Company's internal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2018 and 2017, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2018 in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A.  Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded AB Electronic Sensing and Control (“S&C”) and Ethertronics, Inc. from its assessment of internal control over financial reporting as of March 31, 2018, because they were acquired by the Company in purchase business combinations during fiscal year 2018.  We have also excluded S&C and Ethertronics, Inc. from our audit of internal control over financial reporting.  S&C and Ethertronics, Inc. are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 7.9% and 0.1% of total assets, respectively and approximately 12.4% and 0.8% of total revenues, respectively, of the related consolidated financial statement amounts as of and for the year ended March 31, 2018.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/S/ PRICEWATERHOUSECOOPERS LLP

Nashville, Tennessee

May 18, 2018

We have served as the Company's auditor since 1972.

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EX-10.21

Exhibit 10.21

SHARE PURCHASE AND TRANSFER AGREEMENT

by and between

Dr Joachim Löffler

and

Mr Dietmar Flessa

and

Mr Reiner Bauersachs

and

AVX INTERCONNECT Europe GmbH

For the acquisition of all shares in

KUMATEC Sondermaschinenbau & Kunststoffverarbeitung GmbH

Personal information has been redacted from this Share Purchase Agreement to protect named individuals' personal interests.  

Exhibit 10.19 Kumatek_SPA_beurkundete Fassung.docx

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Table of Contents

Table of Exhibits		3
Table of Definitions		5
Preamble		9
Section 1	Legal Status	11
Section 2	Sale and Assignment of the Shares	12
Section 3	Purchase Price	12
Section 4	No Leakage	15
Section 5	Closing Conditions	16
Section 6	Closing Actions	18
Section 7	Legal Consequences of a Rescission	19
Section 8	Merger Control Filing	20
Section 9	Sellers’ Guarantees	20
Section 10	Sellers’ Best Knowledge	38
Section 11	Remedies	39
Section 12	Sellers’ and Purchaser`s Indemnities	42
Section 13	Taxes and Social Insurance	43
Section 14	Carve-Out of the Hydrogen Business	49
Section 15	Pre-closing Obligations of the Sellers	50
Section 16	Further obligations of the Sellers	51
Section 17	Non-Competition/Non-Solicitation	52
Section 18	Confidentiality, Press Releases	53
Section 19	Costs, Real Estate Transfer Tax	54
Section 20	Notices	54
Section 21	Assignments	55
Section 22	Sellers’ Liability	55
Section 23	Governing Law, Jurisdiction	56
Section 24	Amendments, Supplements, Termination	56
Section 25	Miscellaneous	56

Exhibit 10.19 Kumatek_SPA_beurkundete Fassung.docx

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Table of Exhibits

Exhibit 1.1	Shareholders' List	11
Exhibit 2.3	Draft Confirmation of Receipt	12
Exhibit 2.4	Shareholders' Resolution	12
Exhibit 2.5	Consent to the Sale and Transfer of the Shares	12
Exhibit 4.4	Permitted Leakage	16
Exhibit 6.1 (vii)	Power of Attorney	18
Exhibit 6.1 (viii)	Closing Protocol	18
Exhibit 9.1.7	Related Party Obligations	22
Exhibit 9.1.9	Articles and Register Excerpts	22
Exhibit 9.2.1	Financial Statements	23
Exhibit 9.3.1	Encumbrances of Assets	24
Exhibit 9.4	Loans and Financing Agreements	24
Exhibit 9.5.3 (ii)	Challenged IP Rights	25
Exhibit 9.5.4	Owned IP Rights	25
Exhibit 9.5.8	IP Rights Licensed to a Group Company	26
Exhibit 9.5.9	IP Rights Licensed to Third Parties	26
Exhibit 9.5.10	IT	26
Exhibit 9.6.1	Real Property and Equivalent Rights	27
Exhibit 9.6.2	Leases	27
Exhibit 9.6.4	Health Incidents	27
Exhibit 9.7.1	Insurances	27
Exhibit 9.7.4	Insurance Cases	28
Exhibit 9.8.1	Customers and Suppliers	28
Exhibit 9.8.2	Competition Constraints	28
Exhibit 9.9.1	Material Agreements	29
Exhibit 9.9.2	Terminated Material Agreements	30
Exhibit 9.9.4	CoC Agreements	31
Exhibit 9.10.1(1)	Members of Corporate Bodies and Employees	31
Exhibit 9.10.1(2)	Freelancers	31
Exhibit 9.10.2	Employment Agreements	31
Exhibit 9.10.3(i)	List of Service Agreements	31

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Exhibit 9.10.3(ii)	Managing Director Service Agreements	31
Exhibit 9.10.8	Key Employees	32
Exhibit 9.14	Public Grants	35
Exhibit 9.15.1	Conduct of Business	35
Exhibit 9.18.1	Third Party Approvals	38
Exhibit12.3	Cumulative Assumption of Debts	42
Exhibit 13.3.7	Appeals and Legal Actions	44
Exhibit 15.2	CoC Waivers	50
Exhibit 16.1	JV Partnership Agreement	51
Exhibit 16.3	Managing Director Service Agreement	52

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Table of Definitions

TERM	AS DEFINED IN
Affiliate	Section 9.1.7
Agreement	Preamble
Assets	Section 9.3.1
Breach of a Sellers’ Guarantee	Section 11.1
Business	Preamble
Business Day	Section 25.1
Carve-Out	Preamble
Change	Section 5.13
Closing Actions	Section 6.1
Closing Condition	Section 5.1
Closing Date	Section 6.6
Closing Month	Section 5.5
Closing Payment	Section 3.3
Closing Protocol	Section 6.1
Company	Preamble
Company Partnership Interest	Section 1.2
Competition	Section 17.1
Confirmation of Receipt	Section 2.3
Cumulative Assumptions of Debts	Section 12.3
Data Room	Section 11.3
Deductible	Section 11.6
Deferred Amount	Section 3.3
Developers	Section 9.5.6

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TERM	AS DEFINED IN
DF	the Beginning of this Agreement
Disclosed Information	Section 11.4
Effective Date	Section 2.2
Employees	Section 9.10.1
Fairly Disclosed	Section 11.4
Financial Statements	Section 9.2.1
Founder OHG	Preamble
General Partner	Section 1.2
Geographical Area of Operations	Section 17.1
Group Companies	Section 1.2
Group Participations	Section 9.1.3
Hive-Down Agreement	Preamble
Holdback Amount	Section 3.3
Holdback Period	Section 3.4.1
Hydrogen Business	Preamble
IP Rights	Section 9.5.1
IT	Section 9.5.10
JL	the Beginning of this Agreement
JV Partnership	Preamble
Key Employees	Section 9.10.8
Leakage	Section 4.3
Legal Proceedings	Section 9.12.1
Liens	Section 9.1.3
Locked Box Period	Section 4.1

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TERM	AS DEFINED IN
Management Accounts	Section 9.2.1
Material Adverse Change	Section 5.1.3
Material Agreements	Section 9.9.1
Necessary IP Rights	Section 9.5.2
Non-Competition Obligation	Section 17.1
Non-Solicitation Obligation	Section 17.2
Notices	Section 20.1
Overall Liability Cap	Section 11.6
Owned IP Rights	Section 9.5.4
Parties	the Beginning of this Agreement
Partnership Agreement	Preamble
Party	the Beginning of this Agreement
Permits	Section 9.11.1
Permitted Leakage	Section 4.4
Public Grants	Section 9.14
Purchase Price	Section 3.1
Purchaser	the Beginning of this Agreement
Purchaser’s Account	Section 3.6.2
RB	the Beginning of this Agreement
Regulations	Section 9.13
Relevant Tax Returns	Section 13.8.1
Scheduled Closing Date	Section 5.5
Scope of Business Operations	Section 17.1
Seller	the Beginning of this Agreement

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TERM	AS DEFINED IN
Sellers	the Beginning of this Agreement
Sellers’ Accounts	Section 3.6.1
Sellers’ Best Knowledge	Section 10.1
Sellers’ Group	Section 9.1.7
Sellers’ Guarantees	Section 9
Sellers’ Representative	Section 20.2
Shares	Section 1.1
Signing Date	Section 9
Subsidiary	Section 1.2
Tax Authority	Section 13.1
Tax Contest	Section 13.8.4
Tax Guarantee	Section 13.3
Tax Guarantees	Section 13.3
Tax Returns	Section 13.2
Taxes	Section 13.1
Third Party Claim	Section 11.2
Transaction	Preamble

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SHARE PURCHASE AND TRANSFER AGREEMENT

by and between

1. Dr Joachim Löffler, xxxxxxxxxxxxxxxxxxxxdxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Germany,

- “JL” –

2. Mr Dietmar Flessa, xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxg, Germany,

- “DF” –

3. Mr Reiner Bauersachs,xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Germany,

- “RB” –

- JL, DF and RB collectively referred to as the “Sellers”, each as a “Seller” –

and

4. AVX INTERCONNECT Europe GmbH, a limited liability company under German law with its registered seat in Betzdorf, registered with the commercial register (Handelsregister) of the local court (Amtsgericht) of Montabaur under HRB 3132

- “Purchaser” –

– the Sellers and the Purchaser collectively referred to as the “Parties”, each as a “Party” –

Preamble

(A) WHEREAS, KUMATEC Sondermaschinenbau & Kunststoffverarbeitung GmbH with registered seat in Neuhaus-Schierschnitz, registered with the commercial register of the local court of Jena under HRB 301611, (the “Company”) is active in the field of processing of plastics of any kind as well as the construction and manufacturing as well as the sale and distribution of machines of any kind, especially used for the handling and refining of plastic parts, as well as the construction, development and manufacturing of plants for the automation of operational procedures including their purchase and sale (the “Business“).

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(B) WHEREAS, the Sellers are the only shareholders in the Company and the managing directors of the Company.

(C) WHEREAS, the Purchaser is active in the field of manufacturing, distribution and wholesale of precision-plug-connection-systems and related products of industrial electronics and electrical engineering, the distribution and wholesale of raw materials as well as the distribution, wholesale and manufacturing of semi-finished products and machinery equipment that serve directly or indirectly the manufacturing of the aforementioned equipment.

(D) WHEREAS, prior to the date hereof, a business segment previously operated by the Company consisting of the so called hydrogen fuel generation and delivery business (the “Hydrogen Business”) was spun-off into a joint venture between the Sellers and the Company under a hive-down agreement dated 28 February 2018 (deed roll no. 0279/2018 of notarial administrator Jochen Keßler, Ludwigsstadt) (the “Hive-Down Agreement”) which was registered with the commercial register of the Company on 05 March 2018 (the “Carve-Out”). The Hive-Down Agreement is hereby referred to. It was available for inspection during the notarisation of this Agreement as official copy (Ausfertigung). The Parties acknowledge that they are aware of the content of the Hive-Down Agreement and waive their right to have the Hive-Down Agreement read aloud and attached as a copy to this Agreement. Following the Carve-Out, the Hydrogen Business is operated by KUMATEC Hydrogen GmbH & Co. KG, a limited liability partnership under German law with its registered seat in Neuhaus-Schierschnitz, registered with the commercial register of the local court of Jena under HRA 504705 (the “JV Partnership”) in which the Company holds a partnership interest of 50% as a limited partner. The remaining 50% limited partnership interest in the JV Partnership is currently held by the Seller and has been contributed to BFL Hydrogen OHG, a partnership under the laws of Germany with registered seat in Neuhaus-Schierschnitz, registered with the commercial register of the local court of Jena under HRA 504723 (the “Founder OHG”), such contribution to become effective upon registration of the Founder OHG with the commercial register as limited partner of the JV Partnership. The Sellers are the sole partners of the Founder OHG.

(E) WHEREAS, the Sellers intend to sell all of their shares in the Company to the Purchaser upon the terms and conditions of this share purchase and transfer agreement. The Purchaser intends to acquire the complete shareholding in the Company. The Parties further intend to amend and completely restate the agreement governing the legal relationship of the partners in the JV Partnership (the “Partnership Agreement”) (such actions, together with the Carve-Out, the “Transaction”).

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Now, therefore, the Sellers and the Purchaser agree as follows (the “Agreement”):

Section 1
Legal Status

1.1 The Company is a limited liability company duly organised under German law. The share capital (Stammkapital) of the Company amounts to DEM 120,000. According to the latest list of shareholders registered with the commercial register (Handelsregister) and attached for identification purposes (zu Identifizierungszwecken) as Exhibit  1.1 , the share capital is divided in the following shares (Geschäftsanteile), all of which are held by the Sellers as follows:

(i) JL holds one share in the nominal amount (Nennbetrag) of DEM 60,000 (no. 1 in the list of shareholders),

(ii) DF holds one share in the nominal amount of DEM 30,000 (no. 2 in the list of shareholders), and

(iii) RB holds one share in the nominal amount of DEM 30,000 (no. 3 in the list of shareholders)

(collectively the “Shares”).

The term Shares includes all shares in the Company, irrespective of whether or not their numbers and nominal amounts or whether the aggregate amount of the registered share capital of the Company correspond to the aforementioned details. No objection (Widerspruch) against the list of shareholders has been entered into the commercial register.

1.2 The Company is the sole shareholder in KUMATEC Components GmbH with registered seat in Neuhaus-Schierschnitz, registered with the commercial register (Handelsregister) of the local court (Amtsgericht) of Jena under HRB 509751 (the “Subsidiary”).

1.3 The Company further holds a limited partnership interest (Kommanditbeteiligung) and a capital participation (Kapitalanteil) in the JV Partnership in an amount of EUR 500.00, representing a participation in the total partnership capital of the JV Partnership of 50% (the “Company Partnership Interest”). The remaining limited partnership interest in the JV Partnership is and/or will be held as described in Preamble (D). The JV Partnership is the sole shareholder of its general partner (Komplementär) Hydrogen Verwaltungs-GmbH, with registered seat in Neuhaus-Schierschnitz, registered with the commercial register (Handelsregister) of the local court (Amtsgericht) of Jena under HRB 514325 (the “General Partner”, and collectively with the Company, the Subsidiary and the JV Partnership the “Group Companies”).

1.4 Except as set out under Sections 1.2 and 1.3, the Group Companies do not hold (directly or indirectly) any shares, interests and/or voting rights in other companies, partnerships or similar undertakings.

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Section 2
Sale and Assignment of the Shares

2.1 The Sellers - each individually with regard to the relevant Shares held by them only - hereby sell the Shares to the Purchaser free and clear of any Liens (as defined under Section 9.1.3). The Purchaser hereby accepts such sale.

2.2 The sale of the Shares shall have economic effect (wirtschaftliche Wirkung) as of 31 December 2016, 24:00 CET (the “Effective Date”) and shall include any and all rights pertaining to the Shares, including the rights to all profits of the Company for the period after the Effective Date. However, the Parties are in agreement that no Leakage (other than the Permitted Leakage) has occurred after the Effective Date.

2.3 The Sellers - each individually with regard to the relevant Shares held by them only - hereby assign (abtreten) the Shares to the Purchaser and the Purchaser hereby accepts such assignment of the Shares. The assignment of the Shares shall include all ancillary rights and claims pertaining to the Shares. The aforementioned assignment shall be subject to the conditions precedent of (i) the fulfilment and/or waiver of the Closing Conditions and (ii) the payment of the Closing Payment according to Section 3.3, such condition being irrefutably presumed to have been satisfied once the Sellers have signed a confirmation of receipt (the “Confirmation of Receipt”) substantially in the form as attached hereto as Exhibit 2.3 .

2.4 The shareholder’s meeting of the Company has approved the sale and transfer of the Shares by resolution dated 27 March 2018. A copy of such shareholders’ resolution is attached for identification purposes (zu Identifizierungszwecken) as Exhibit  2.4 .

2.5 The Sellers’ spouses have granted their consent to the conclusion and consummation of this Agreement by declarations dated 22/26 March 2018. Copies of such declarations are attached hereto for identification purposes (zu Identifizierungszwecken) as Exhibit  2.5 .

Section 3
Purchase Price

3.1 The aggregate purchase price for the Shares (the “Purchase Price”) shall be EUR 12,500,000 (in words: twelve million five hundred thousand Euros).

3.2 The Purchase Price shall be allocated amongst the Sellers pro rata to their shareholding in the Company inter se immediately prior to Closing, i.e. a portion of 50% of the Purchase Price shall be allocated to JL and a portion of 25% of the Purchase Price shall be allocated to each of DF and RB.

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3.3 The Purchase Price less (i) an amount of EUR 1,000,000 (in words: one million Euros) (“Holdback Amount”) and (ii) an amount of EUR 1,500,000 (in words: one million five hundred thousand Euros) (“Deferred Amount”) shall become due and payable on the Scheduled Closing Date according to Section 6.1 (v) (the “Closing Payment”) and shall be allocated amongst the Sellers in accordance with Section 3.2.

3.4 The Holdback Amount shall serve as security for the Purchaser’s claims against the Sellers under or in connection with this Agreement and shall be distributed to the Sellers as follows:

3.4.1 The Holdback Amount shall be released to the Sellers if and to the extent no claims have been raised in writing by the Purchaser pursuant to or in connection with this Agreement within 12 (twelve) months following the Closing Date (the “Holdback Period”).

3.4.2 In case the Purchaser raises a claim under or in connection with this Agreement within the Holdback Period against any of the Sellers that entitles the Purchaser to indemnification or other payments, the Purchaser shall not be obliged to release the corresponding part of the Holdback Amount and shall be entitled to ultimately retain and use for its own purposes the relevant portion of the Holdback Amount (i) upon receipt of a court decision confirming such claim or (ii) as agreed with the Sellers.

3.4.3 If and to the extent a claim has been raised by the Purchaser in writing within the Holdback Period but is not raised in court within three (3) months after the expiry of the Holdback Period, the part of the Holdback Amount which has not been further pursued in court shall be released to the Sellers provided that (i) the Holdback Period has expired and (ii) such part may not be held back in relation to a different claim, in each case unless agreed otherwise with the Sellers.

3.4.4 If and to the extent a claim has been raised by the Purchaser and a court decision finally and irrevocably rejects such claim in whole or in part, a corresponding part of the Holdback Amount that reflects such rejection shall be released to the Sellers, provided that (i) the Holdback Period has expired and (ii) such part may not be held back in relation to a different claim.

3.4.5 Any distribution of the Holdback Amount and/or parts thereof shall be allocated amongst the Sellers pursuant to Section 3.2. For the avoidance of doubt, the Holdback Amount shall not bear interest, and no accrued interest (if any) shall be distributed to the Sellers.

3.5 Subject to the occurrence of the Closing Date, the Deferred Amount shall become due and payable in three instalments as follows, whereas the Parties agree that such payment mechanism is intended to ensure that the Sellers (through their fully owned Founder OHG) are in a position to procure the fulfilment of the contribution obligations of the Founder OHG under the Partnership Agreement:

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3.5.1 On the later of (i) 02 May 2018 and (ii) the Closing Date, a first instalment of EUR 500,000 (in words: five hundred thousand Euros) shall be paid by the Purchaser or an Affiliate of the Purchaser directly to the JV Partnership. The Parties agree that such payment shall be (i) a payment on behalf of and for the account of the Sellers to the Founder OHG and (ii) a payment on behalf of the Founder OHG to the JV Partnership and shall be booked into the capital accounts of the Founder OHG at the JV Partnership as set forth in section 5.4 of the Partnership Agreement (which shall be concluded with effect as of the Closing Date in the form to be finally negotiated prior to the Closing Date; in particular the reference to section 5.4 might change);

3.5.2 On 02 May 2019, a second instalment of EUR 500,000 (in words: five hundred thousand Euros) shall be paid by the Purchaser or an Affiliate of the Purchaser directly to the JV Partnership. The Parties agree that such payment shall be (i) a payment on behalf of and for the account of the Sellers to the Founder OHG and (ii) a payment on behalf of the Founder OHG to the JV Partnership and shall be booked into the capital accounts of the Founder OHG at the JV Partnership as set forth in section 5.4 of the Partnership Agreement (which shall be concluded with effect as of the Closing Date in the form to be finally negotiated prior to the Closing Date; in particular the reference to section 5.4 might change);

3.5.3 On 02 May 2020, a third instalment of EUR 500,000 (in words: five hundred thousand Euros) shall be paid by the Purchaser or an Affiliate of the Purchaser directly to the JV Partnership. The Parties agree that such payment shall be (i) a payment on behalf of and for the account of the Sellers to the Founder OHG and (ii) a payment on behalf of the Founder OHG to the JV Partnership and shall be booked into the capital accounts of the Founder OHG at the JV Partnership as set forth in section 5.4 of the Partnership Agreement (which shall be concluded with effect as of the Closing Date in the form to be finally negotiated prior to the Closing Date; in particular the reference to section 5.4 might change).

3.6 Unless otherwise provided in this Agreement, the following shall apply regarding payments by the Purchaser and the Sellers:

3.6.1 Subject to Section 3.5 above, all payments by the Purchaser to the Sellers shall be made to the following bank accounts of the Sellers (the “Sellers’ Accounts”):

(i) Payments to JL shall be made to the bank account at xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx);

(ii) Payments to DF shall be made to the bank account at xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx); and

(iii) Payments to RB shall be made to the bank account at xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx).

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3.6.2 All payments by the Sellers to the Purchaser shall be made to the account of the Purchaser at Commerzbank xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (the “Purchaser’s Account”).

3.6.3 Any payment shall be deemed made as soon as it has been credited to the account of the recipient. All payments shall be made free and clear of any costs and charges for the recipient (except for charges of the receiving bank, which shall be borne by the relevant account holder).

Section 4
No Leakage

4.1 The Sellers hereby (i) guarantee to the Purchaser in each case by way of an independent and separate guarantee (selbstständiges und eigenständiges Garantieversprechen) in accordance with section 311 para. 1 of the German Civil Code that no Leakage has occurred during the period from and including the Effective Date until and including the Signing Date and (ii) undertake and covenant to the Purchaser that no Leakage will occur during the Period from the Signing Date until and including the Closing Date (the period from the Effective Date until the Closing Date the “Locked Box Period”).

4.2 Should a Leakage nevertheless have occurred or occur during the Locked Box Period, the Sellers shall notify the Purchaser without undue delay of such Leakage and shall reimburse to the Purchaser or, at the election of the Purchaser, the relevant Group Company, the amount of such Leakage on a Euro-for-Euro basis. Claims under this Section 4.2 shall, in deviation from the statutory provisions, be time-barred 12 (twelve) months after the Closing Date. Section 11.9 shall apply accordingly.

4.3 “Leakage” shall mean any payment or benefit (in money or in kind) or asset transfer or disposal made, granted, promised or having become due during the Locked Box Period by or for the account of a Group Company to (i) a Seller, (ii) an Affiliate of a Seller (for the avoidance of doubt, other than the Group Companies), or (iii) a relative of a Seller within the meaning of section 15 of the German Tax Code (Abgabenordnung, AO), in particular distributions in cash or in kind (either as a dividend, a distribution of reserve or otherwise), repayments of equity of any form, costs or bonuses or other form of ex gratia awards or payments in connection with the transactions contemplated hereunder, the conclusion and/or completion of any non-arm’s length agreements, assumptions of liabilities, guarantees, letters of comfort or similar instruments securing any indebtedness or other obligation as well as and waivers of claims by a Group Company, in each case in relation to any of the aforesaid persons or entities, and in each case other than a Permitted Leakage.

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4.4 “Permitted Leakage” shall mean (i) any Leakage set forth in Exhibit  4.4 and (ii) with regard to the period after the Signing Date any Leakage which has been approved in writing by the Purchaser in advance.

Section 5
Closing Conditions

5.1 In this Agreement, each of the following events is defined as a “Closing Condition”:

5.1.1 The legal merger control prohibition (Vollzugsverbot) (in accordance with the German Act against Restraint of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB)) regarding the transaction contemplated under this Agreement has ceased to apply (weggefallen).

5.1.2 The transactions contemplated by and in connection with this Agreement can be lawfully consummated; in particular, there are no orders, judgments, injunctions or similar acts, which would prevent the lawful consummation.

5.1.3 Since the Effective Date no event, situation, circumstance, effect or change (each a “Change”) has occurred that individually or collectively with any other Change has or could reasonably be expected to have a negative impact on the assets and/or liabilities (Vermögenslage), financial condition (Finanzlage), the business, operations, operational results (Ertragslage) of any of the Group Companies amounting to more than EUR 2,000,000 (in words: two million Euros) and which, to the extent curable, had not been cured until the Closing Date (such a Change, a “Material Adverse Change”).

A Material Adverse Change shall not include any effect resulting from

(i) any Change in general economic, business or industry conditions (including general developments of capital and financial markets or currency exchange rates), or any Change in local, regional, national or international conditions generally affecting the industry in which any of the Group Companies operates, unless such Change has an impact on the Group Companies that is grossly disproportionate to the impact on other businesses operating in that industry;

(ii) any Change in applicable laws, GAAP or other applicable accounting standards or interpretations thereof generally affecting the industry in which any of the Group Companies operates;

(iii) actions of the customers and/or suppliers of the Group Companies as a result of the transactions contemplated by this Agreement;

(iv) any existing Change with respect to which the Purchaser has positive knowledge as of the date of this Agreement.

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5.1.4 The statements made in Section 1 above and Sections 9.1.3 and 9.1.8 below are still correct on the Closing Date.

5.1.5 The negotiations as regards the Partnership Agreement (including all Annexes thereto) pursuant to Section 16.1 have been completed and as a result thereof the final version of the Partnership Agreement (including all Annexes thereto) has been duly executed by the Sellers, the Company and the Founder OHG with the consent of the Purchaser and with effect as from the Closing Date.

5.2 Each Party shall inform the other Parties in each case of the satisfaction of a Closing Condition without undue delay (unverzüglich) after having obtained knowledge thereof.

5.3 The Purchaser may waive in whole or in part, by notice to the Sellers, the satisfaction of the Closing Conditions listed in Section 5.1 (except the Closing Condition under Section 5.1.1) and the receipt of written evidence of the satisfaction of any or all of the Closing Conditions in Section 5.1. If the Purchaser waives the satisfaction of a Closing Condition, such Closing Condition shall be deemed to have been satisfied only with regard to Sections 5.4 and 5.5 and such waiver shall be without prejudice to all other claims and rights of the Parties under this Agreement which shall remain unaffected by any waiver under this Section 5.3.

5.4 If the Closing Condition set forth under Section 5.1.5 has not been fully satisfied within three months after the Signing Date, the Purchaser shall be entitled to rescind (zurücktreten) this Agreement by notice to Sellers according to Section 7 with effect for and against all Parties to this Agreement. If the Closing Condition set forth under Section 5.1.1 (Merger Clearance) has not been fully satisfied within three months after the Signing Date, each Party (however, the Sellers only jointly) shall be entitled to rescind (zurücktreten) this Agreement by notice to the respective other Parties according to Section 7 with effect for and against all Parties to this Agreement. After a Closing Condition has been satisfied and the Purchaser (or the Sellers) has been informed thereof according to Section 5.2, a rescission due to its late satisfaction may no longer be declared. The right to rescind according to this Section 5.4 shall furthermore be excluded if the non-satisfaction of the Closing Condition is the result of actions or omissions of the respective rescinding Party.

5.5 A Party that is obliged to contribute to the satisfaction of a Closing Condition can assert the satisfaction of such Closing Condition against the other Party only after it has provided evidence of the satisfaction of such Closing Condition to such Party pursuant to Section 5.2. If the Closing Conditions set forth in Section 5.1.1 and Section 5.1.5 are satisfied at the latest on the 20th day of a calendar month (“Closing Month”) or between the 20th day and the last day of the month preceding the Closing Month, “Scheduled Closing Date” shall mean the last Business Day of the Closing Month. The Parties may agree on another day as Scheduled Closing Date.

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Section 6
Closing Actions

6.1 On the Scheduled Closing Date at 10 am (CET) at the business premises of Noerr LLP at Börsenstraße 1, 60313 Frankfurt am Main, unless the Parties have agreed on another time and/or location, the Parties shall take the following actions (the “Closing Actions”) in the following order:

(i) The Sellers shall confirm that the Closing Conditions set forth under Sections through 5.1.4 are fulfilled as of the Closing Date;

(ii) the Sellers shall deliver to the Purchaser an executed original of the Partnership Agreement (including all of its Annexes) between the Sellers, the Founder OHG and the Company as negotiated pursuant to Section 16.1 and effective as of the Closing Date;

(iii) the Sellers shall deliver to the Purchaser an executed original of the fully restated managing director service agreement between JL and the Company as negotiated pursuant to Section 16.3;

(iv) Each of DF and RB shall deliver to the Purchaser (i) an executed original of a resignation declaration by which they duly resign from their office as managing directors of the Company and the Subsidiary with effect as of the Closing Date and confirm that they have no outstanding claims against the Company and the Subsidiary which relate to the period prior to the Closing Date and (ii) executed originals of the duly executed employment agreements between the Company and DF and the Company or the Subsidiary and RB pursuant to Section 16.2;

(v)	the Purchaser shall transfer the Closing Payment to the Sellers’ Accounts pursuant to Section 3.3;
(vi)	the Sellers shall sign the Confirmation of Receipt and hand it over to the Purchaser;

(vii) the Sellers shall grant a power of attorney to the Purchaser – substantially in the form of Exhibit 6.1 (vii) – to exercise all shareholders’ rights connected to the Shares fully and without restriction;

(viii) the Purchaser and the Sellers shall sign the Closing Protocol (“Closing Protocol”) substantially in the form of Exhibit 6.1 (viii) . Both the Sellers and the Purchaser shall receive a copy of the signed Closing Protocol.

No Party shall be obliged to perform a Closing Action, unless the other Party has performed all preceding Closing Actions it is obligated to perform.

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6.2 The Purchaser shall send to the acting notary (by courier, e-mail or fax) a copy of the signed Confirmation of Receipt immediately after the signing of the document. The acting notary shall not be obliged to verify the authenticity of the Sellers’ signatures in the Confirmation of Receipt. The Parties hereby instruct the acting notary to attach the copy of the Confirmation of Receipt received by him to this deed as well as to file an updated list of shareholders of the Company immediately upon receipt of the copy of the Confirmation of Receipt and provide the Company with a copy of such updated list of shareholders.

6.3 The Purchaser shall be entitled, by declaration to the Sellers, to waive the performance of the Closing Actions listed in Section 6.1 (i) through (iv) and (vi) through (vii), without its claims and other rights under this Agreement being affected by this waiver. To the extent that the Purchaser waives the performance of a Closing Action, such Closing Action shall be deemed to have been performed only with regard to Section 6.4, 6.5 and Section 6.6.

6.4 If the Purchaser or any of the Sellers fail to perform a Closing Action which they were obliged to perform on the Scheduled Closing Date, the respective other Parties shall be entitled to reschedule the Scheduled Closing Date to a date between (in each case including) the fifth and the tenth Business Day after the original Scheduled Closing Date. The Parties may also agree on another date or another procedure; Section 24 shall apply mutatis mutandis.

6.5 If the Purchaser or the Sellers have determined a new date as the Scheduled Closing Date pursuant to Section 6.4 and the respective other Parties once again fail to perform a Closing Action which they were obligated to perform on such date, the Party which has determined such new date as the Scheduled Closing Date shall be entitled to withdraw from this Agreement according to Section 7 by notice to the respective other Parties.

6.6 The day on which the last Closing Action has been performed shall be the “Closing Date”.

Section 7
Legal Consequences of a Rescission

7.1 If the Purchaser rescinds this Agreement according to Section 5.4 in conjunction with Section 5.1.4, the Sellers shall be obliged to pay lump sum damages (pauschaler Schadensersatz) in the amount of EUR 150,000 to the Purchaser to compensate the Purchaser for all costs and expenses incurred in connection with the preparation, negotiation and the notarisation of this Agreement. The Purchaser’s right to claim compensation for damages exceeding the lump sum shall remain unaffected.

7.2 In the event of a rescission, the provisions set out in Section 18 to Section 20, Section 22 and Section 23 shall continue to be effective; the rescission shall furthermore not affect any claims for costs and damages arising from the infringement of obligations under this Agreement. No Party can derive any other rights or claims from this Agreement.

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7.3 To the extent legally permitted, no Party is entitled to rescind this Agreement after the Closing Date.

Section 8
Merger Control Filing

8.1 The Parties agree that the Purchaser shall submit to the competent cartel authorities the necessary merger control filings of the proposed concentration set out in this Agreement. The Sellers already transferred information from their side for the merger control filing to the Purchaser and shall provide the Purchaser with any other information requested by the Purchaser for the preparation of such filing in good time and in complete and accurate form.

8.2 The Purchaser shall be obliged to submit the necessary merger control applications to the competent cartel authorities without undue delay and latest 10 (ten) Business Days following the Signing Date. The Purchaser will use reasonable efforts to comply with all deadlines stated by the cartel authorities and to take all measures necessary within the proceedings without undue delay. If this requires the Sellers’ support, the Sellers will ensure that the necessary measures are taken.

8.3 If one or more of the cartel authorities prohibit the merger, or grant clearance only under conditions (Bedingungen oder Auflagen), the Purchaser may within two weeks from receipt of the decision of the cartel authorities rescind this Agreement by notice to the Sellers with effect for and against all Parties to this Agreement. Prior to a rescission, the Purchaser, consulting with the Sellers, shall analyse whether the transaction contemplated under this Agreement can be conducted in compliance with the conditions stipulated or implemented in a modified manner, or whether the Parties shall take legal action against the prohibition or – if applicable – against any conditions stipulated, without being obliged to do so.

Section 9
Sellers’ Guarantees

The Sellers hereby guarantee to the Purchaser in each case by way of an independent and separate guarantee (selbstständiges und eigenständiges Garantieversprechen) in accordance with section 311 para. 1 of the German Civil Code that the statements contained in Section 9.1 to Section 9.18 (the “Sellers’ Guarantees”) are true and correct (zutreffend) as of the date of the signing and notarisation of this Agreement (the “Signing Date”) and with regard to the statements in Sections 9.1, 9.5.2 and 9.11, as well as of the Closing Date, or such other date provided for explicitly in a Sellers’ Guarantee. The Sellers’ Guarantees are neither quality guarantees concerning the subject matter of the purchase (Beschaffenheitsgarantie) within the meaning of sections 443, 444 German Civil Code nor agreements as to quality (Beschaffenheitsvereinbarung) within the meaning of section 434 para. 1 sentence 1 German Civil Code.

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9.1 Corporate issues

9.1.1 The statements made in Section 1 regarding the Group Companies are correct in every respect. The Group Companies are duly established under German law. They validly exist as trading entities and each has its center of administration (Verwaltungssitz) in Germany. Each of the Group Companies was and is entitled to continue to carry on its business without restriction.

9.1.2 The Shares in the Company, the shares in the Subsidiary, the Company Partnership Interest and the shares in the General Partner are lawfully established, fully (Company, JV Partnership and General Partner) and half (Subsidiary) paid-up, not liable for additional contributions (keine Nachschusspflicht) and no repayments or refunds in whole or in part, neither openly nor concealed have been made, nor have the Shares in the Company, the Company Partnership Interest, the shares in the General Partner and the shares in the Subsidiary been reduced or impaired by losses or drawings (Entnahmen). No transfers or other actions occurred with regard to the Shares which have not been entered in the list of shareholders attached as Exhibit 1.1. All applicable provisions under applicable law and articles of association regarding the increase and decrease of the registered share capital or partnership capital of the Group Companies have been duly observed; no concealed contributions in kind (verdeckte Sacheinlagen) have been made into the Group Companies.

9.1.3 The Sellers hold undivided and unrestricted title to the Shares as set forth in Section 1. The Company holds undivided and unrestricted title to all shares in the Subsidiary and the Company Partnership Interest and the JV Partnership holds undivided and unrestricted title to all shares in the General Partner (all shares in the Subsidiary, the Company Partnership Interest and the shares in the General Partner jointly with the Shares the “Group Participations”). The Group Participations are free of any claims, rights and privileges of third parties and the Sellers may freely dispose of the Group Participations (directly or indirectly) without any limitations and restrictions. In particular, neither liens, security interests, usage rights, fiduciary relationships or similar rights, nor conversion rights, call options, pre-emption rights or option rights or similar purchase options of third parties exist, including rights regarding the issuance of new shares or regarding the granting of voting rights (jointly “Liens”). There are no agreements or obligations as to the granting of such rights to third parties, and no third party has asserted any such claims.

9.1.4 The Group Participations have the full voting rights according to the percentage of participation in the share capital or partnership capital of each Group Company, as the case may be; no preclusion of voting rights (Stimmrechtsausschlüsse), voting trust agreements (Stimmrechtsbindungen) or any other limitations of voting rights exist.

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9.1.5 None of the Group Companies is obligated to purchase or dispose of a company in whole or in part or of participations of any kind; no preliminary contract (Vorvertrag) or other declaration of intent exists in such regard.

9.1.6 None of the Group Companies is a party to a cash-pool agreement. No silent partnership agreement (stille Beteiligung), loan with profit participation (partiarisches Darlehen), usufructuary right (Nießbrauchrecht), sub-participation, participation right (Genussrechte) or similar legal relationship exists, which provides for or grants a participation in profit, turnover or the remaining assets after liquidation of one of the Group Companies.

9.1.7 Except as disclosed in Exhibit  9.1.7, none of the Group Companies is party to an agreement, in particular a loan agreement or other obligations with the Sellers, a company affiliated with the Sellers according to section 15 of the German Stock Corporation Act (Aktiengesetz, AktG), a person with close connections to the Sellers according to section 138 of the German Insolvency Act (Insolvenzordnung, InsO) or a company affiliated with a person with close connections to the Sellers (each an “Affiliate”, and the aforementioned individuals jointly the “Sellers’ Group”).

9.1.8 No insolvency proceeding has been filed for or commenced with regard to the assets of the Sellers, any of the Group Companies and no legal proceedings or other enforcement measures (Zwangsvollstreckungsmaßnahmen) have been filed for or initiated with regard to any property or other assets of the Sellers or any of the Group Companies. Neither the Sellers nor any of the Group Companies is over-indebted (überschuldet), illiquid (zahlungsunfähig), has ceased or suspended payments (Zahlungen eingestellt) or entered into debt settlement arrangements (Schuldenbereinigungsabkommen) or similar agreements with creditors. No circumstances exist under which the commencement of insolvency or similar proceedings or an insolvency or similar challenge to this Agreement (Insolvenz- oder sonstige Anfechtung) would be justified or probable.

9.1.9 Exhibit  9.1.9 contains copies of the articles of association and excerpts from the commercial registers of the Group Companies. Such articles of association are valid and in full force and effect. Except as disclosed in Preamble (D), Exhibit 9.1.9 reflects all facts and information that require registration to the competent commercial registers as well as any other relevant corporate information with respect to the aforementioned companies; no additional articles of association or other shareholders’ agreements exist.

9.1.10 None of the Group Companies has a supervisory board, advisory board, administrative board or any similar corporate body, except as provided for in the Partnership Agreement. None of the Group Companies is bound by any workers´ co-determination (Arbeitnehmermitbestimmung).

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9.1.11 Any mandatory notification requirements with regard to the Group Participations have been duly complied with within the proper time, in particular under section 16 of the German Limited Liability Company Law (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG) (including its version before the implementation of the German Act to Modernise the Law Governing Private Limited Companies and to Combat Abuses (Gesetz zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen (MoMiG)).

9.2 Financial Statements

9.2.1 Exhibit  9.2.1 contains complete and accurate copies of (i) the financial statements of the Company and the Subsidiary, each including notes (Anhang) for the business years ending 31 December 2014, 31 December 2015 and 31 December 2016 (jointly the “Financial Statements”) and (ii) management accounts of the Company and the Subsidiary as per 28 February 2018 (the “Management Accounts”).

9.2.2 The Financial Statements and the Management Accounts are consistent with the accounting records (Buchhaltungsunterlagen) and the business documents (Geschäftspapiere) of the Company and the Subsidiary and have been prepared in accordance with any applicable laws and regulations and generally accepted accounting principles.

9.2.3 With regard to the preparation of the Financial Statements the valuation of balance sheet items (Bilanzansätze) has been determined using generally accepted accounting and valuation principles, and has been carried forward applying legally permitted accounting and valuation principles consistent with the last balance sheet dates, unless otherwise reported in the notes of the respective Financial Statement. The options with regard to the inclusion of items in the financial statements (Bilanzierungswahlrecht) as well as to the election of a valuation (Bewertungswahlrecht) have been exercised consistently with past practice, unless otherwise reported in the notes of the respective Financial Statement.

9.2.4 To the Sellers´ Best Knowledge the Financial Statements give in all materiel respects a true and fair view (ein den tatsächlichen Verhältnissen entsprechendes Bild vermitteln) of the assets and liabilities (Vermögenslage), the financial condition (Finanzlage) and the operational results (Ertragslage) of the Company and the Subsidiary for the respective periods and at the respective balance sheet date. To the Sellers´ Best Knowledge the Management Accounts have been prepared on the basis of the accounting records and business documents of the Company and the Subsidiary with the standard care of a prudent merchant (mit der Sorgfalt des ordentlichen Kaufmanns).

9.2.5 All accounting documents (Buchführungsunterlagen) of the Group Companies are up to date, available and have been prepared and maintained in accordance with the applicable laws and generally accepted accounting principles.

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9.3 Fixed Assets and Current Assets

9.3.1 The Group Companies are the legal and/or economic owners (rechtliche und/oder wirtschaftliche Eigentümer) of all fixed and current assets (Anlagevermögen und Umlaufvermögen) capitalised in the financial statements ending 31 December 2016 or acquired after the balance sheet date (the “Assets”), unless any such Asset has been disposed of after the Effective Date in the ordinary course of business of such Group Company, provided that the Parties acknowledge that the Assets of the Hydrogen Business are held by the JV Partnership as of the completion of the Carve-Out. Except as set forth in Exhibit 9.3.1, the Assets are not encumbered with any liens, pledges or other encumbrances or rights of repossession (Herausgabeansprüche) in favour of third parties except for rights of retention of title (Eigentumsvorbehalte), liens, statutory liens (gesetzliche Pfandrechte) or other security rights in favour of customers, suppliers, landlords, carriers and the like created in the ordinary course of business by the relevant Group Company in the balance sheet of which such Assets are to be shown.

9.3.2 Considering their age, use and book value all assets owned by the Group Companies (including all Assets pertaining to the Hydrogen Business) are in a serviceable and/or usable condition, have been treated carefully and properly and all required maintenance has been conducted. No investments or material capital expenditures have been deferred within the Group Companies. All movable assets (bewegliche Vermögensgegenstände) – including inventories (Vorräte) – which are necessary to conduct the respective business to the extent and in the manner as presently conducted are available to the respective Group Companies.

9.4 Liabilities

Exhibit  9.4 contains a complete and accurate list of all existing loans and financing agreements of the Group Companies as of the last Business Day before the Signing Date, detailing the outstanding principal, interest rate and repayment date.

9.5 IP Rights, Software, IT and Data Protection

9.5.1 For the purpose of this Agreement, “IP Rights” shall mean any and/or all registered or unregistered intellectual property rights, including but not limited to patents (Patente), utility models (Gebrauchsmuster), designs (Designs), trademarks (Marken) and commercial designations (geschäftliche Bezeichnungen), all including respective applications for intellectual property rights, licenses to intellectual property rights including any rights deriving from license agreements, database rights, rights to use, copy and exploit copyrights (urheberrechtliche Nutzungs-, Vervielfältigungs- und Verwertungsrechte) and related rights (verwandte Schutzrechte) as well as know-how, internet domain names, web pages, websites and related content, social media accounts with social media companies and the content found thereon and related thereto.

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9.5.2 To the Sellers’ Best Knowledge the Group Companies are the legal and lawful owners of all IP Rights necessary for the continued conduct of their businesses in compliance with the law to the extent and in the manner presently conducted (the “Necessary IP Rights”).

9.5.3 The Necessary IP Rights

(i) are to the Sellers’ Best Knowledge all available to the relevant Group Companies without limitations, in particular no third party rights or similar claims exist with regard to a Necessary IP Right which might potentially adversely affect the business operations of the relevant Group Company to the extent and in the manner presently conducted;

(ii) are to the Sellers’ Best Knowledge all legally valid and effective, in particular no Necessary IP Right has been challenged by a third party, and there is neither an indication that such challenge might arise, nor is there any other risk of the extinction or the invalidation of a Necessary IP Right except as listed in Exhibit 9.5.3 (ii) ;

(iii) to the Sellers’ Best Knowledge are not being infringed by third parties, and to the Sellers’ Best Knowledge, there is no indication that there is a risk of such an infringement.

9.5.4 Exhibit  9.5.4 contains a complete and accurate list as of the date mentioned in the Exhibit of all IP Rights which are currently owned by any of the Group Companies or for which applications are pending (the “Owned IP Rights”) and which can be registered, specifying completely and accurately the date of the registration or application, the identification of the right as well as the jurisdictions under which the Owned IP Right is registered. With regard to the Owned IP Rights, all due fees have been paid and all actions necessary for their maintenance have been undertaken completely and in good time.

9.5.5 To the Sellers’ Best Knowledge the Owned IP Rights, their use or the business conducted by the Group Companies do not violate or infringe any IP Rights of third parties. No infringement, to the Sellers’ Best Knowledge, has been asserted by a third party.

9.5.6 The Group Companies have entered into valid agreements with all Employees, advisors and other third parties, who are or have been employed with one of the Group Companies in the area of research, software development or product development, marketing, layout or product design, or in similar areas (the “Developers”), under which all rights, which are essential for the operation of the Group Companies, pass to the relevant Group Company which the Developer may be entitled to with regard to an IP Right developed in connection with his/her activity for or in the course of the business of the relevant Group Company. No Developer is entitled to a right or claim of any kind against any of the Group Companies on the basis of the German Law on Employee Inventions (Gesetz über Arbeitnehmererfindungen, ArbnErfG) or on any other basis.

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9.5.7 The Group Companies lawfully use any software and own, except in the case of sole in-house developments, licenses which comply with the actual usage of such software in quality and quantity. In particular with regard to the development of orders (development of individual software by third parties), the proprietary usage and exploitation rights have been contractually transferred to the relevant Group Companies with full legal effect and to a sufficient extent.

9.5.8 With the exception of standard software, Exhibit  9.5.8 contains a complete and accurate list of all IP Rights licensed to any of the Group Companies by a third party. With regard to the IP Rights listed in Exhibit 9.5.8 (as well as regarding standard software) no termination rights of the licensor exist as a consequence of the conclusion or implementation of this Agreement.

9.5.9 Exhibit  9.5.9 contains a complete and accurate list of all Owned IP Rights any of the Group Companies licensed to a third party.

9.5.10 Except as disclosed in Exhibit  9.5.10, the Group Companies own, or have lawfully and in due form leased or rented, or have been licensed for at least twelve months from the Closing Date the complete hardware, communication systems, networks and other information technology, which is needed by the Group Companies to carry on their business operations to the extent and in the manner presently conducted (“IT”), or the Group Companies are entitled to use such IT to an unlimited extent based on other arrangements for at least twelve months from the Closing Date. The IT is in considering their age, use and book value in sound and serviceable condition allowing the Group Companies to conduct their business operations to the extent and in the manner presently conducted for a term of at least twelve months. To the Sellers’ Best Knowledge, the Group Companies have taken reasonable measures for external data backup (externe Datensicherung), which in the event of a breakdown or a disruption of the IT allows the uninterrupted and unrestricted continuation of the business operations of the Group Companies.

9.5.11 To the Sellers’ Best Knowledge the Group Companies have taken all appropriate actions necessary to protect all their operational and business secrets from unauthorised access by a third party.

9.5.12 To the Sellers’ Best Knowledge every Group Company collects, processes, saves and protects personal data of every kind, in particular that of employees and customers in accordance with data protection regulations. None of the Group Companies has processed or passed on any such data without the required consent granted in due form by the person concerned or without the existence of a statutory authorisation in connection with the operational Business of the Group Companies.

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9.5.13 To the extent required by law, each of Company and the Subsidiary have appointed an internal data protection supervisor (Datenschutzbeauftragte) or has reported its data processing to the competent supervising authority for data protection (datenschutzrechtliche Aufsichtsbehörde).

9.6 Business Premises and Operational Areas, Real Property

9.6.1 Exhibit  9.6.1 contains a complete and accurate list of the real property (including joint ownership (Miteigentum), partial ownership (Teileigentum) and separate property (Sondereigentum)) owned by one or more of the Group Companies, or in which one or several of the Group Companies have equivalent rights (grundstücksgleiche Rechte). Except for the encumbrances and third party rights listed in Exhibit 9.6.1, there are no encumbrances or third party rights on the real property owned and the rights equivalent to a real property right listed in Exhibit 9.6.1.

9.6.2 Exhibit 9.6.2 contains a list of all leases (Miet- und Pachtverträge) regarding business premises and operational areas of any of the Group Companies, including amendments, with complete and accurate information regarding the parties to the lease, the subject matter of the lease, the rent, the term of the agreement as well as the notice period; the leases are valid and in the correct form.

9.6.3 The Group Companies can conduct their business operations to the extent and in the manner presently conducted on the real estate listed in Exhibit 9.6.1 and the business premises and operational areas identified in Exhibit 9.6.2; no additional business premises and/or operational areas are necessary or required to conduct their business operations to the extent and in the manner presently conducted.

9.6.4 Except as listed in Exhibit  9.6.4 , the business operations of the Group Companies have not resulted – in the five years prior to Signing to present – in an impairment of health for which one of the Group Companies is liable or might be held liable. The fresh water supply as well as the disposal of sewage, gas and other emissions are carried out by service companies and is secured with regard to the real estate, buildings and other facilities and installations used by the Group Companies, and to the Sellers` Best Knowledge are conducted in accordance with the applicable laws, regulations and orders.

9.7 Insurance

9.7.1 Exhibit 9.7.1 contains a complete and accurate list of the insurances taken out by and/or for the account of one of the Group Companies, each with complete and accurate specifications with regard to the expiration date and the insurance premium.

9.7.2 The insurances listed in Exhibit 9.7.1 validly exist, are in full force and effect and have not been terminated. No Group Company has failed to pay its premiums, nor is any Group Company underinsured. To the Sellers’ Best Knowledge there are no circumstances that could cast a doubt on the existence of insurance coverage in accordance with the terms and conditions of the insurances.

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9.7.3 Subject to the terms and conditions of the insurance contracts, the insurance policies listed in Exhibit 9.7.1 will provide the Group Companies with coverage for all claims (Schadensfälle) occurring until the Signing Date. The Sellers hereby covenant and guarantee that they will not take any measures or actions that would result in a reduction of such insurance coverage for the period until and including the Closing Date and that they will not allow such insurance policies to expire before the Closing Date.

9.7.4 Irrespective of existing insurance coverage and except to the cases listed in Exhibit  9.7.4 or Exhibit 9.6.4 neither bodily injury (Personenschaden), nor financial or property damage exceeding the amount of EUR 20,000, for which a Group Company could be held liable other than in the ordinary course of business, has occurred since 1 January 2017.

9.8 Customer and Supplier Relationships

9.8.1 Exhibit  9.8.1 contains a complete and accurate list of the ten (10) main customers and suppliers, calculated by the invoiced amount, of each of the Company and the Subsidiary in the period of 2015, 2016 and 2017 (per 3 November). The Sellers are unaware of any factors that the conclusion or the implementation of this Agreement and/or the implementation of the Transaction will lead to a reduction of the volume of the business relationships with these customers and suppliers. The Purchaser is aware of Change of Control clauses contained in the service agreement with Franken Maxit GmbH & Co KG and the purchase agreement with FTE Automotive Systems GmbH, which allows the aforementioned customers to terminate the agreements based on the conclusion or implementation of this Agreement. Furthermore, the Purchaser is aware that the supply contract for the rotational speed sensor between the Subsidiary and FTE Automotive Systems GmbH will end in the first quarter of 2018.

9.8.2 Except for such contracts listed in Exhibit 9.8.2 none of the Group Companies is subject to restraint on competition which limits or excludes the right of any of the Group Companies to operate in a specific business sector or an industry or geographical region. None of the Group Companies has entered into any other anticompetitive arrangements with third parties or practices them.

9.9 Material Agreements

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9.9.1 Exhibit  9.9.1 contains at the date of Signing a complete and – with respect to the details regarding the parties, title of the agreement, date of conclusion and reference to the relevant section in the Data Room – correct list of agreements, which have not been performed yet (including unfulfilled accessory obligations (Nebenpflichten), conditional or future obligations), which fall into at least one of the following categories (jointly the “Material Agreements”), and which have been entered into by any of the Group Companies in written, oral or in any other form (the Parties agree that relevant agreements are mentioned only once):

(i) Agreements regarding real property transactions of any kind, including the acquisition, encumbrance, or the sale of real property or rights equivalent to a real property right;

(ii) Agreements regarding the sale or transfer by way of security, assignment, pledge or other encumbrance of assets – independent of whether or not such assets can be included on the balance sheet – to the extent such assets individually or jointly have a value in a balance sheet of at least EUR 10,000; agreements of the same kind or agreements aiming towards the same goal are considered to be one single agreement;

(iii) Agreements regarding investments in fixed assets subject to such investments individually of more than EUR 20,000 and jointly having total investment volume of EUR 50,000 or more; agreements of the same kind or agreements aiming towards the same goal are considered to be one single agreement;

(iv) Agreements regarding the acquisition, the formation, the sale or the encumbrance of participations – including silent participations – (including the acquisition by a company of its own shares as well as the redemption (Einziehung) of shares of any of the Group Companies), enterprises, businesses or parts thereof, in full or in essential parts;

(v) Agreements regarding the opening of new divisions (Geschäftszweige) or branch offices (Zweigniederlassungen), the abandoning of divisions and the closing of permanent establishments (Betriebsstätten);

(vi) Usufructuary agreements, leases (Pacht-, Miet- und operating Leasingverträge), which - with the exception of leasing contracts for company cars - impose annual (per calendar or contract year) payments of a minimum of EUR 20,000 on one party;

(vii) Agreements regarding loans (Darlehensverträge), credits (Krediteröffnungsverträge), factoring, finance leasing (Finanzierungsleasingverträge) or other financing agreements, except for customary deferrals (Stundungen), loans to employees and short term loans with an aggregate volume of up to EUR 15,000 which have been granted in the ordinary course of business;

(viii) Agreements regarding guarantees (Garantien), sureties (Bürgschaften), assumptions of debts (Schuldübernahme, Schuldbeitritt), indemnifications (Freistellungserklärungen), letters of comfort (Patronatserklärung) and other provisions of security of any kind issued by any of the Group Companies or by a third party in order to secure an obligation of any of the Group Companies with the exception of bank guarantees relating to customer prepayments;

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(ix) Agreements regarding derivatives according to section 2 para. 2 of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG) as well as warrants (Optionsscheine);

(x) Distributor (Vertragshändler) and commercial agent (Handelsvertreter) agreements or similar agreements;

(xi) Agreements providing for compensation based on profit or turnover;

(xii) Joint Venture, consortium, cooperation and similar agreements;

(xiii) Agreements or obligations which have been entered into or incurred outside the ordinary course of business;

(xiv) Agreements between Group Companies as well as agreements between any of the Group Companies of the one part and the Sellers and/or a member of the Sellers’ Group of the other part;

(xv) Consultancy agreements, which impose or may impose – based on current knowledge – a payment of EUR 10,000 or more per placed order or per calendar year 2018 on any of the Group Companies;

(xvi) Other agreements or obligations other than with customers or suppliers, which (a) provide for the payment of EUR 50,000 or more annually by any of the Group Companies, (b) provide for the payment of EUR 20,000 or more and cannot be terminated by either party with notice before the 31 December 2018, or will expire on 31 December 2018 at the earliest or exceed a term of 12 months or (c) may not be terminated with notice at all.

Exhibit 9.9.1 also contains a complete and – with respect to all details included therein – correct list of offers aiming toward the conclusion of a Material Agreement.

9.9.2 All Material Agreements have been entered into at arm’s length terms and establish valid, legally binding and enforceable rights of the Group Company involved. Except as disclosed in Exhibit  9.9.2, no Material Agreement has been terminated with or without notice or amended since 31 December 2016. Neither the Sellers nor any of the Group Companies have received any information indicating that within the next two (2) years a Material Agreement will be terminated, ended or substantially amended, unless the Material Agreement expires earlier anyway.

9.9.3 To the Sellers’ Best Knowledge none of the Group Companies and none of their counterparties are currently in breach of any obligation under any of the Material Agreements or have been in breach of any obligation within the last three (3) years; in particular, without limitation, no Group Company and none of their counterparties are in delay (Verzug) with any material obligation of a Material Agreement.

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9.9.4 Except as listed in Exhibit  9.9.4 , no Material Agreement contains a provision which entitles the counterparty to prematurely terminate or amend such Material Agreement due to the conclusion or the implementation of this Agreement or due to another change of control in any of the Group Companies. To the Sellers’ Best Knowledge, no termination or cessation of a Material Agreement by the counterparty threatens based on the conclusion or implementation of this Agreement.

9.10 Employment Relationships

9.10.1 Exhibit  9.10.1(1) contains at the date of Signing a complete and – with respect to all details included therein – correct list of all members of corporate bodies (Organmitglieder) as well as employees (including trainees and part time employees) of the Group Companies, each specified by complete and – with respect to all details included therein – correct descriptions of position/occupation, date of birth, date of entry, gross annual remuneration for the fiscal year 2017 (including all bonuses and similar incentives), weekly hours of work. Except as listed in Exhibit  9.10.1(2) , none of the Group Companies employs freelancers. Members of corporate bodies as well as employees and freelancers of any of the Group Companies will hereinafter be jointly referred to as the “Employees”.

9.10.2 Exhibit  9.10.2 contains at the date of Signing the standard employment agreements for employees of the Group Companies.

9.10.3 Exhibit  9.10.3(i) contains a list of the service agreements of all managing directors of the Company and the Subsidiary currently in force, in each case indicating contract date and current gross monthly salary. For identification purposes (zu Identifizierungszwecken), copies of the relevant agreements including all supplements, addenda and/or shareholders’ resolutions covering the current managing directors` salaries are attached hereto as Exhibit 9.10.3(ii). The Parties acknowledge for the purpose of this Section 9.10.3 that the salary of RB is paid by the Subsidiary. No managing directors of the Group Companies fulfil the negative appointment conditions listed in section 6 para. 2 sentence 2 of the German Limited Liability Company Law (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG). No dormant service or employment agreement exists within the Group Companies.

9.10.4 Other than the loans to (i) Mxxxxxxxxxxxxxr dated 2 February 2009 as amended on 5 July 2016 for originally EUR 24,000 and (ii) Mxxxxxxxxxxxxxx dated 31 July 2012 as amended on 21 July 2014 and on 23 February 2017 for originally EUR 9,200 , there are no loans granted or promised to Employees.

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9.10.5 Beyond the current monthly accounting period (monatliche Abrechnungsperiode), no former or current Employee is entitled to remuneration or other entitlements (excluding entitlement to compensation for accrued and unused vacation (Urlaubsabgeltung) or overtime compensation (Freizeitausgleich)) against any of the Group Companies, such entitlements exceeding the aggregate amount of EUR 50,000. No former or current Employee has a compensation claim under a (current or future) post contractual non-competition clause.

9.10.6 No current or former Employee receives remuneration based on profit or success, such as commission (Provision), bonuses, royalties or other participations in the earnings of any of the Group Companies, independent from the manner of its calculation.

9.10.7 No current or former Employee is entitled to an amount of the company pensions (Betriebsrente, Versorgungsleistungen) as well as other benefits (both forfeitable and non-forfeitable). In addition, none of the Group Companies grants other social benefits under a collective agreement. No rearrangement of the company pension schemes has been conducted in the last five (5) years.

9.10.8 No managing director or member of the senior management (leitender Angestellter) identified in Exhibit  9.10.8 of any of the Group Companies (the aforementioned jointly the “Key Employees”) has terminated his/her employment, and to the Sellers’ Best Knowledge there is no indication that a Key Employee intends to terminate or otherwise cease his/her employment.

9.10.9 Within the last five years, none of the Group Companies has taken over a business or a part of a business from third parties, which might result in a transfer of (a part of a) business according to section 613 a of the German Civil Code (for the avoidance of doubt, other than in the course of the Carve-Out). Neither has any of the Group Companies otherwise undertaken to offer third parties employment or a service agreement, or is otherwise obliged to take over such employment or service agreement other than by transfer of (a part of a) business.

9.10.10	There are no shop agreements, collective bargaining agreements, company collective bargaining agreements and work council agreements (Regelungsabsprachen) effective at any of the Group Companies (directly or due to after-effect (Nachwirkung)).
9.10.11	No works council exists with regard to the business of any of the Group Companies. To the Sellers’ Best Knowledge within none of the Group Companies there is an intention of employees or a trade union to arrange for elections of workers’ representation (Arbeitnehmervertretung).

9.10.12 No in-house labour practices (betriebliche Übung) or general promises (Gesamtzusagen) exist within any of the Group Companies, which might entitle Employees to claims of any kind, or which might incur an obligation on any of the Group Companies to render services of any kind exceeding the annual aggregate amount of EUR 20,000.

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9.10.13 To the extent any of the Group Companies has employed temporary employees (Leiharbeitnehmer) within the last three years until and including the date hereof, the service providers providing such temporary employees were selected by the Sellers with the care of a prudent business man (Sorgfalt eines ordentlichen Geschäftsmanns) and neither the Sellers nor any of the Group Companies have received any written information indicating that such temporary employees received a salary below the standards of equal pay (if applicable) and minimum wage, that social security contributions in relation to such temporary employees were not fully paid or that the employment of such temporary employees was not in line with applicable collective bargaining agreements. To the Sellers’ Best Knowledge, the Group Companies have only employed temporary employees within the last three years until and including the date hereof from providers who held or hold (as the case may be) for the relevant period a valid permit for the supply of temporary workers according to the German Act on Temporary Employment (Arbeitnehmerüberlassungsgesetz).

9.11 Permits

9.11.1

The Group Companies have obtained and are operating in compliance with all necessary public law licenses, consents, concessions and permits of any kind required for the conduct of their business operations and the construction and operation of their buildings, facilities, and installations (jointly the “Permits”), including Permits which any governmental authority considers necessary according to any notification received by any of the Group Companies up to the Signing Date. The buildings, installations, facilities and business operations of the Group Companies have been established and are conducted in compliance with the Permits necessary to conduct the business operations of the Group Companies to the extent and in the manner presently conducted.

9.11.2

All Permits necessary to conduct the business operations of the Group Companies to the extent and in the manner presently conducted are in full force and effect, and none of the Permits has been entirely or partly terminated, withdrawn, restricted or revoked. To the Sellers’ Best Knowledge no information or circumstances exist which might justify the withdrawal, restriction or revocation of a Permit or the imposition of a condition (belastende Auflage) by a governmental authority, including as a consequence of the conclusion or implementation of this Agreement. No Permit will expire within a term of 12 (twelve) months after the Closing Date.

9.12 Legal Proceedings/Product Liability

9.12.1 Except for the legal dispute between the Subsidiary and Nestinox B.V. (Az. (63) 1 O 278/16) there are no judicial, arbitrational or legal proceedings (including any administrative proceedings or enquiries or out of court disputes) (the “Legal Proceedings”) which have not been finally been brought to an end or which to the Sellers’ Best Knowledge are threatened or intended, and in which any of the Group Companies is involved, or which might result in any kind of obligation or liability of any of the Group Companies (including pecuniary penalties and administrative fines).

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9.12.2

To the Sellers’ Best Knowledge no criminal proceedings (Strafverfahren) or proceedings for the imposition of administrative fines (Bußgeldverfahren) (including preliminary proceedings (Ermittlungsverfahren)) is pending against a Key Employee or have been brought to an end since 1 January 2014. Excepted from this Section 9.12.2 are traffic offences (Verkehrsordnungswidrigkeiten) which have resulted or are likely to result in an administrative fine not exceeding EUR 500 and/or in a driving ban (Fahrverbot) for a period of less than three (3) months.

9.12.3

Except as disclosed in Section 9.12.1 no judicial, arbitrational, administrative or other enforceable decisions or arrangements that brings a current proceeding to an end (verfahrenserledigende Vereinbarungen) exist, which oblige any of the Group Companies to perform any action, or restrict any of the Group Companies from performing any action.

9.12.4 Prior to the Effective Date, none of the Group Companies designed, manufactured, distributed or otherwise delivered any products for the use of third parties or provided any services, which have given or could give rise to liability or other obligations on the basis of product liability, warranty, or any other legal ground, and no such liabilities or obligations have been alleged with regard to periods before the Effective Date. To the Sellers’ Best Knowledge, with regard to the period after the Effective Date and until the Signing Date, no such claims have been alleged in writing against any of the Group Companies. The Parties agree that the Sellers shall not be liable under this Section 9.12.4 if and to the extent a respective provision was made with regard to a product warranty (Gewährleistungsrückstellung) in the respective Financial Statements.

9.12.5 Up to the Signing Date none of the Group Companies has recalled a product (Produktrückruf) since 01 January 2014 or is considering the conduct of such a measure.

9.13

Compliance with Regulations

To the Sellers’ Best Knowledge each of the Group Companies has complied with applicable laws, decrees and administrative acts (jointly the “Regulations”) and has not infringed any third party rights. To the Sellers’ Best Knowledge no Group Company has been involved in any incident that could be regarded as offering or granting a bribe (Bestechung), taking a bribe (Bestechlichkeit), offering or granting an undue advantage (Vorteilsgewährung), taking an undue advantage (Vorteilsannahme) or committing a similar offense under foreign laws.

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9.14

Public Grants

Exhibit  9.14 contains a complete and – with respect to all details included therein – correct list of all governmental subsidies (state aids as well as EU subsidies) exceeding the amount of EUR 20,000 per individual case, in particular according to Art. 107 of the Treaty on the Functioning of the European Union (Vertrag über die Arbeitsweise der Europäischen Union, AEUV) (jointly the “Public Grants”), which have been granted to any of the Group Companies since 1 January 2012. To the extent marked as such, Exhibit 9.4 contains a complete and correct list of all subsidised loans to any of the Group Companies. A Public Grant shall be deemed to have been granted in accordance with the first sentence of this Section 9.14 at the time when the (first) official notification of approval (Erst-Bewilligungsbescheid) has been issued or, if no such official notification of approval has been issued, at the time when the relevant Public Grant has actually been paid or otherwise rendered.  The Parties are aware that the conditions for Public Grants may deteriorate as a result of the conclusion or the implementation of this Agreement or the Carve-Out of the Hydrogen Business mentioned in Section 14.

9.15 Conduct of Business since the Effective Date

9.15.1 From the Effective Date until Signing Date, the business operations of the Group Companies have been conducted in the ordinary course of business, with the standard of care of a prudent business man (Sorgfalt eines ordentlichen Geschäftsmanns) and consistent with past practice, in particular with regard to the scope of stock keeping and supply inventory (Vorrats-Lagerhaltung), money transfers, the ratio of debt to net equity (except as disclosed in Exhibit  9.15.1 ), the receivables, the obligations, the investments and the valuation methods; in particular, except as disclosed in Exhibit 9.15.1, none of the following measures have been taken at any of the Group Companies:

(i) making any changes to the articles of association of any of the Group Companies or passing any other shareholder resolutions;

(ii) increasing or decreasing the registered share capital including the generation and/or exploitation of authorised capital or granting or disposing of subscription rights, option rights and other rights relating to the acquisition of shares;

(iii) paying dividends, transferring profits (other than under a profit and loss transfer agreement), advance payments on account of profits or passing a resolution about the aforementioned measures;

(iv) performing measures under the Reorganisation of Companies Act (Umwandlungsgesetz, UmwG) or entering into inter-company agreements within the meaning of sections 291 et seq. of the German Stock Corporation Act) (Unternehmensverträge);

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(v) acquiring, forming, selling or encumbering of participations – including silent partnerships – (including the acquisition by the Company of its own company shares as well as the withdrawal (Einziehung) of shares of any of the Group Companies), enterprises, businesses or parts of businesses, in full or in essential parts and entering into obligations directed towards the same;

(vi) opening of new divisions (Geschäftszweige), branches of business or regional offices (Zweigniederlassung), abandoning of divisions and/or closing of permanent establishments;

(vii) concluding, terminating or amending a Material Agreement except in the ordinary course of business and consistent with past practice;

(viii) incurring a liability or other engagement exceeding the amount of EU 25,000 in each individual case or in a series of related incidents, except for liabilities from trade payables in the ordinary course of business and consistent with past practice;

(ix) entering into real property transactions of any kind, including the acquisition, encumbering, or the sale of real property or rights equivalent to a real property right except in the ordinary course of business and consistent with past practice;

(x) disposing of any fixed assets with a book value exceeding EUR 100 in the aggregate other than in the ordinary course of business;

(xi) assigning and transferring for security purposes, pledging, encumbering or otherwise burdening tangible and intangible assets – whether to be shown in the balance sheet (bilanzierungsfähig) or not – in each case except in the ordinary course of business and consistent with prior practice;

(xii) making investments in the fixed assets of more than EUR 5,000 in each individual case or in a series of related incidents, except in the ordinary course of business and consistent with prior practice;

(xiii) entering into usufructuary agreements or leases (Pacht-, Miet- und Leasingverträge) other than in the ordinary course of business and consistent with past practice;

(xiv) taking up loans, entering into credit agreements, factoring, finance leasing or into other financing agreements;

(xv) issuing of or entering into guarantees, sureties, assumptions of debt (Schuldübernahmen), accession to debt (Schuldbeitritt), indemnifications or letters of comfort (Patronatserklärungen) or any other liability for debts of third parties or providing other security of any kind by any of the Group Companies, except in the ordinary course of business and consistent with past practice;

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(xvi) repaying loans to the shareholders or companies affiliated with them, except in the ordinary course of business and consistent with past practice;

(xvii) materially changing the research and development, production, purchasing, distribution, marketing or personnel policy, except in line with the applicable business plan disclosed to the Purchaser and except as disclosed in Exhibit 9.15.1;

(xviii) making any changes in the fixed and/or variable remuneration, other extra compensation except in the ordinary course of business, or making changes in pensions or severance pay as well as making a commitment relating to the aforementioned issues;

(xix)	employing or dismissing Employees with a gross annual income of EUR 50,000 or more in the individual case;
(xx)	negotiating, entering into or acknowledging collective bargaining agreements;

(xxi) except as disclosed in Section 9.12.1 actively initiating a legal proceeding or concluding legal proceedings with an amount in dispute of EUR 25,000 or more in each individual case;

(xxii) Acquiring, disposing, licensing (inbound or outbound) any IP Rights from/to third parties other than in the ordinary course of business and consistent with past practise;

(xxiii) making any change in any method of accounting or auditing practice, ex-cept as required by applicable laws.

9.15.2 No Material Adverse Change has occurred since the Effective Date.

9.16	Information, Disclosure and Documentation
	All agreements, documents and information provided to the Purchaser or its advisors which were available in the Data Room in connection with the transaction contemplated by this Agreement correctly reflect as of the date the respective documents, agreements and information were provided the legal and factual circumstances of the Group Companies stated therein.

9.17

Commissions, Introduction Fees, etc.

None of the Group Companies is obliged to pay any commissions, introductory fees, consultation fees, bonuses, extra pay, severance or any other payment in connection with the conclusion or the implementation of this Agreement or has already made such payments. In addition, such payments of the Group Companies have neither been granted nor promised to a Key Employee by a member of the Sellers’ Group or a third party.

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9.18 Conclusion of the Agreement

9.18.1 Except as shown in Exhibit  9.18.1 , none of the Sellers nor any of the Group Companies is obliged to report the conclusion or implementation of this Agreement to a third party or to obtain approval from a third party.

9.18.2 None of the Sellers violate any applicable Regulations, rights of third parties or obligations of any kind by concluding or by the implementation of this Agreement. The conclusion and implementation of this Agreement (including the Carve-Out) do not result in the withdrawal, termination, amendment of, or otherwise interfere with or endanger, any rights or legal relationships of any of the Group Companies, nor constitute any rights of cancellation or reclaim or other rights of any counter party of any of the Group Companies or third parties. The Parties are aware that the conditions for Public Grants may deteriorate as a result of the conclusion or the implementation of this Agreement or the Carve-Out of the Hydrogen Business mentioned in Section 14.

9.18.3 There is no action, law suit, investigation or proceeding pending or, to the Sellers’ Best Knowledge, threatened against the Sellers or any of the Group Companies before any court, arbitration panel or governmental authority which in any manner challenges or seeks to prevent, alter or delay the transaction contemplated herein. To the Sellers' Best Knowledge, there are no circumstances which would justify the institution of such action, law suit, investigation or proceeding or make it seem likely.

Section 10
Sellers’ Best Knowledge

10.1 For the purpose of this Agreement, the “Sellers’ Best Knowledge” shall encompass only the actual knowledge (tatsächliche Kenntnis) or grossly negligent ignorance (grob fahrlässige Unkenntnis) of any of the Sellers and/or Mr Bas Groenen.

10.2 The Parties are in agreement that the knowledge of any of the persons mentioned in Section 10.1 or Employee shall not be attributed to the Purchaser.

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Section 11
Remedies

11.1 If and to the extent any of the Sellers’ Guarantees is breached (“Breach of a Sellers’ Guarantee”), the Sellers shall

(i) within the period of three months restore the position that would have existed if the Breach of a Sellers’ Guarantee had not occurred (restitution in kind - Naturalrestitution), or

(ii) insofar as natural restitution is not possible or is not adequate, the Sellers shall pay, either to the Purchaser or, at the request of the Purchaser, to the relevant Group Company, the amount which is necessary to create the position that would have existed if the relevant Sellers’ Guarantee had been correct, or

(iii) if the Sellers do not provide the requested natural restitution within three months of being informed of the violation of the Sellers` Guarantee, the Sellers shall pay monetary damages (Schadensersatz in Geld), the monetary damages being at least equal to the amount which the relevant Group Company could have claimed against the Sellers if the Sellers’ Guarantee had been given for the benefit of such Group Company. The compensation for damages shall also cover consequential damages (Folgeschäden), however only to the extent such consequential damages are in line with the purpose of the relevant warranty statement, and will not cover the Purchaser`s internal administrative or overhead costs and loss of profits (entgangener Gewinn) and the Purchaser may not claim that the Purchase Price was calculated based on incorrect assumptions.

If the Purchaser requests payment under Section 11.1 (ii) or (iii) to itself or the Company in case of a Breach of a Sellers’ Guarantee in relation to the JV Partnership, such claim shall be limited to 50% (reflecting the pro rata capital participation of the Company in the JV Partnership).

11.2 If, after the Closing Date, a third party asserts a right or claim against the Purchaser and/or any of the Group Companies, or if a governmental authority (öffentlich-rechtliche Körperschaft) threatens or takes measures which could result in liability of the Sellers due to a Breach of a Sellers’ Guarantee (each a “Third Party Claim”), the following shall apply:

11.2.1 The Purchaser shall, without undue delay after becoming aware of the matter, provide the Sellers with written notice of such alleged Third Party Claim, describing the potential claim in reasonable detail and shall make available to the Sellers a copy of the documents received from the third party in relation to such Third Party Claim. The foregoing sentence shall apply mutatis mutandis in favour of the Purchaser in case any of the Sellers becomes aware of a Third Party Claim. The Purchaser shall give the Sellers the opportunity to cure the breach within the period of time indicated in Section 11.1 (i).

11.2.2 The Purchaser or the relevant Group Company may defend themselves against the Third Party Claim at their own discretion. The Purchaser shall conduct such proceedings with the care of a prudent businessman with reasonable regard to the concerns of the Sellers and cooperate with the Sellers in good faith (nach Treu und Glauben). The Purchaser will inform the Sellers continuously about the progress of the proceedings. Upon the Purchaser’s demand, the Sellers shall assist the Purchaser in its defence of such Third Party Claims. If the Sellers directly act against the third party according to the previous sentence, they shall coordinate their actions with the Purchaser. In no event shall the Purchaser or any of the Group Companies be entitled to acknowledge or settle a claim or permit any such acknowledgement or settlement without the Sellers´ prior written consent which is not to be unreasonably withheld, to the extent that such claims may result in the Sellers` liability under this Agreement.

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11.2.3 The failure of the Purchaser to fully comply with its obligations under this Section 11.2 shall not release the Sellers from their respective obligations under Section 9 and Section 11 unless and to the extent the damage would not have occurred if the Purchaser had fully complied with his obligations under this Section 11.2.

11.3 Prior to the Signing Date, the Purchaser had the opportunity of researching the Group Companies and their business activities from a commercial, financial, legal and environmental perspective on the basis of the documentation provided by the Sellers in a virtual data room available up until 9 March 2018, 5:45am CET, (the “Data Room”). The Parties agree that the content of the Data Room shall be saved on a DVD. Such DVD has been handed over to the acting notary public and shall be stored with the acting notary public for a period of two (2) years. During the storage period, each Party shall be entitled to inspect the contents of the DVD in the offices of the acting notary and to ask the acting notary for copies of the DVD or of individual documents saved on the DVD (in each case to the extent technically possible). After the storage period, the Purchaser shall be entitled to request the return of the DVD from the acting notary. If the acting notary has not received any such request within three (3) months after the end of the aforementioned period, he shall be entitled to destroy the DVD.

11.4 The Sellers shall not be liable under this Agreement in respect of a claim for a Breach of a Sellers’ Guarantee if and to the extent the relevant facts and circumstances underlying such claim (i) were disclosed in the Data Room in such a manner that on a review of the document, an industry experienced buyer would be aware of the specific fact, matter or information and be in a position to make a reasonable informed assessment without the benefit of supporting documentation (“Fairly Disclosed”), or that (ii) are referred to in this Agreement or its Exhibits (including, for the avoidance of doubt, the Hive-Down Agreement) (together, the “Disclosed Information”). The provisions of, and the legal principles set forth in, section 442 of the German Civil Code and section 377 of the German Commercial Code shall not apply.

11.5 The Purchaser explicitly acknowledges to purchase and acquire the Shares and the business associated therewith based upon its own inspection and assessment of all the facts and circumstances Fairly Disclosed in the Disclosed Information, and to undertake the purchase based upon its own decision, inspection and assessment without reliance upon any express or implied representations, warranties or guarantees of any nature made by the Sellers, except for the guarantees expressly provided by the Sellers under this Agreement. Without limiting the generality of the foregoing, the Purchaser acknowledges that the Sellers give no representation, warranty or guarantee with respect to any projections, estimates or budgets delivered or made available to the Purchaser regarding future revenues, earnings, cash flow, the future financial condition or the future business operations of the Group Companies.

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11.6

The liability of the Sellers due to a Breach of a Sellers’ Guarantee shall not exceed EUR 1,000,000 (in words: one million Euros) (the “Overall Liability Cap”). The Sellers are furthermore not liable for claims for a Breach of a Sellers’ Guarantee if the total amount of all claims for Breaches of a Sellers’ Guarantee does not exceed EUR 250,000 (in words: two hundred and fifty thousand Euros) (the “Deductible”) (Freibetrag). If the total amount of all claims for Breaches of a Sellers’ Guarantee exceeds the Deductible, the Sellers are only liable as far as the Deductible is exceeded. For the avoidance of doubt, the Deductible shall not apply to claims arising from Sellers’ Guarantees that the Sellers have deliberately submitted inaccurately. In this event, the warranty claims shall always be compensated to the full amount. The Overall Liability Cap as well as the Deductible shall also apply to and take into account claims under Sellers’ Indemnities according to Section 12 and claims for a breach of any of the Tax and Social Insurance Guarantees according to Section 13 (for the avoidance of doubt, the Overall Liability Cap and the Deductible shall not apply to claims in relation to Leakage and claims under Section 14).

11.7

To the extent permitted by law, rights and remedies based on statutory warranty rights (gesetzliche Gewährleistungsrechte) to withdrawal from the agreement (Rücktritt), reduction of purchase price (Minderung), repair (Nachbesserung) or damages, based on culpa in contrahendo (Verschulden bei Vertragsschluss), to reversal of the Agreement due to frustration of the contract (Störung der Ges-chäftsgrundlage) as well as the contesting of the Agreement due to the absence of an essential characteristic (Anfechtung wegen des Fehlens einer verkehrswes-entlichen Eigenschaft) are expressly excluded and waived, except for rights and remedies according to sections 123, 444 and 826 of the German Civil Code as well as any rights and remedies based on wilful misconduct.

11.8 Claims for a Breach of a Sellers’ Guarantee shall, in deviation from the statutory provisions, be time-barred twelve (12) months after the Closing Date, provided that claims in relation to a Third Party Claim shall not become time-barred before the expiration of the statute of limitations period applicable to the underlying Third Party Claim. Section 203 German Civil Code shall apply.

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11.9 The limitations of liability according to Section 11 shall not apply to rights and remedies based on a Breach of a Sellers’ Guarantee due to wilful misconduct (vorsätzliche Handlung) or based on fraudulent misrepresentation (arglistische Täuschung) of the Sellers.

11.10 Payments made by the Sellers according to this Section 11 shall be treated in relation between the Sellers and the Purchaser as a reduction of the Purchase Price. Payments made by the Sellers to one of the Group Companies at the election of the Purchaser shall be treated as capital contribution (Einlage) of the Purchaser to the recipient.

11.11 To the extent the Purchaser has a claim under this Agreement against the Sellers, the Purchaser shall be entitled to retain the relevant amount from the Holdback Amount first.

Section 12
Sellers’ and Purchaser`s Indemnities

12.1 The Sellers shall indemnify and hold harmless the Purchaser or, at the Purchaser’s written election, the relevant Group Company (or any successor), from and against any and all losses, costs, liabilities, disadvantages, penalties, use restrictions, third party claims, expenses and damages of the Purchaser and/or the Group Companies incurred or arising from or in connection with:

12.1.1 a qualification of the activities of Mr Rainer Koehn under the agreement with the Company dated 28 June 2007 (as amended by the addendum dated 28/30 November 2012) as an employment relationship (abhängige Beschäftigung) between Mr Rainer Koehn and the Company;

12.1.2 claims alleged by IBC Solar AG in connection with the corrosion parts for the attachments of solar modules; and/or

12.1.3 claims alleged by Nestinox B.V. against the Subsidiary in a court proceeding before the Regional Court of Meiningen.

12.2 Section 11.8 and 11.9 shall apply accordingly to claims under Section 12.1.

12.3 The Sellers have signed public-law cumulative assumptions of debts (öffentlich-rechtliche Schuldbeitritte) in favour of the land Thuringia (Freistaat Thüringen) on 18 October 2017 which are attached hereto, for identification purposes (zu Identifizierungszwecken), as Exhibit 12.3 with regard to potential recovery claims in relation to a funding grant dated 12 October 2017 for a total amount of EUR 440,286.00 (the “Cumulative Assumptions of Debts”). The Parties shall use reasonable efforts to have the Sellers unconditionally released from all obligations under the Cumulative Assumptions of Debts within five (5) months after the Closing Date. Until such release has been obtained, the Purchaser shall indemnify and hold harmless the Sellers from and against any personal costs, liabilities, disadvantages and/or penalties arising to the Sellers from or in connection with the Cumulative Assumptions of Debts. For the avoidance of doubt, the foregoing sentence shall also apply in case the release cannot be obtained within five (5) months after the Closing Date.

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Section 13
Taxes and Social Insurance

13.1 For the purpose of this Agreement, “Taxes” shall mean (i) any tax within the meaning of section 3 para. 1 of the German Tax Code (Abgabenordnung, AO) or any corresponding foreign legal regulations including pecuniary penalties and administrative fines, (ii) the tax deducted at source (Quellensteuern) and the withholding taxes (Abzugssteuern) which any of the Group Companies has to withhold and pay from payments to third parties, without itself being a person liable to pay tax, (iii) taxes for which any of the Group Companies may be liable to according to section 191 of the German Tax Code, without being required to withhold or pay itself, (iv) fees, monetary contributions including social security and social insurance contributions, customs duties (Zölle), and all other public taxes and duties, which have been imposed by a domestic federal authority, state authority or local authority or another domestic or foreign public authority (the “Tax Authority”), and/or which are owed according to Regulations, as well as (v) interest, costs and surcharges or any other additional costs, either fiscal (within the meaning of section 3 para. 4 of the German Tax Code), or based on social security law.

13.2 For the purpose of this Agreement, “Tax Returns” (Steuererklärungen) shall mean all declarations, notifications, applications, advance notifications (Voranmeldungen) and further documents and data, which have to be filed with or handed to a Tax Authority in connection with Taxes.

13.3 The Sellers hereby guarantee to the Purchaser in each case by way of an independent guarantee and a separate guarantee in each case in relation to the statements contained in Section 13.3.1 to Section 13.3.10 in accordance with section 311 para. 1 of the German Civil Code that the statements contained in Section 13.3.1 to Section 13.3.10 (the “Tax Guarantees” and each a “Tax Guarantee”) are true and correct. The Tax Guarantees shall not be qualified and construed as quality guarantees concerning the object of the purchase (Beschaffenheitsgarantien) within the meaning of sections 443, 444 of the German Civil Code nor an agreement as to quality (Beschaffenheitsvereinbarung) within the meaning of section 434 para. 1 German Civil Code.

13.3.1 The Group Companies have duly (ordnungsgemäß) and timely (rechtzeitig) filed (taking into account any filing extensions granted by a Tax Authority) with the competent Tax Authority all Tax Returns that are required to be filed in the period up to and including the Signing Date and will duly (ordnungsgemäß) and timely (rechtzeitig) file (taking into account any filing extensions granted by a Tax Authority) with the competent Tax Authority all Tax Returns that are required to be filed in the period up to and including the Closing Date.

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13.3.2 The Group Companies have timely paid all Taxes that are due for payment in the period up to and including the Signing Date and will timely pay all Taxes up to and including the Closing Date.

13.3.3 In the period up to and including the Closing Date, none of the Group Companies has made any hidden profit distribution.

13.3.4 As of the Effective Date no Group Participations are subject to a blocking period, e.g., tainted shares (einbringungsgeborene Anteile) pursuant to section 21 of the German Reorganisation Tax Act old version (Umwandlungssteuergesetz alte Fassung, UmwStG).

13.3.5 The profit and loss transfer agreement entered into by and between the Company and the Subsidiary on 21 November 2013 is legally effective (zivilrechtlich wirksam) and has been actually performed at any point in time during the period up to and including the Signing Date and will be performed up to and including the Closing Date as required for tax purposes pursuant to section 14 para. 1 sentence 1 no. 3 sentence 1 of the German Corporate Income Tax Act (Körperschaftsteuergesetz).

13.3.6 No Tax Authority has issued an advance ruling (verbindliche Auskunft) that might concern any of the Group Companies. No advance ruling relating to any of the Group Companies has been applied for.

13.3.7 Except as listed in Exhibit  13.3.7, no appeals or legal actions (Einspruchs- oder Klageverfahren) are pending (anhängig) with respect to Taxes of any of the Group Companies.

13.3.8 The technical standards implemented for the electronic data access of the Tax Authority comply with section 147 of the German Tax Code. The fiscally relevant data for the Relevant Periods has been filed separately from the data that is not fiscally relevant.

13.3.9 Up to the assessment period 2012, all Taxes of the Group Companies have been finally and conclusively assessed.

13.3.10 None of the Group Companies maintains or has maintained at any point in time in the period up to and including the Closing Date any permanent establishment or permanent representative pursuant to the laws of the relevant jurisdiction in any other jurisdiction than the Federal Republic of Germany.

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If any of the Tax Guarantee is breached, the Sellers shall, per the election of the Purchaser pay, either to the Purchaser or, at the written election of the Purchaser, to the relevant Group Company (or any successor), the amount which is necessary to bring the Purchaser and the relevant Group Company into the position they would have been in if the relevant Tax Guarantee had been correct. The legal principles set forth in section 442 of the German Civil Code and section 377 of the German Commercial Code shall not apply. Section 13.5 shall apply accordingly to the claims of the Purchaser for the breach of a Tax Guarantee pursuant to this Section 13.3.

13.4

The Sellers shall be obliged to indemnify the Purchaser or, at the Purchaser’s written election, the relevant Group Company (or any successor) from and against

(i) any and all Taxes of the Group Companies relating to the period up to and including the Effective Date and

(ii) any and all Taxes of the Group Companies relating to the period from (and not including) the Effective Date up to and including the Closing Date other than (x) Taxes resulting from the ordinary business of the Group Companies conducted in the period from (and not including) the Effective Date up to and including the Closing Date in accordance with Section 5 (it being understood that Taxes in relation to the Hydrogen Business and the Carve-Out of the Hydrogen Business pursuant to Section 14.1, any prohibited measure pursuant to Section 9.15 and/or any Leakage in the Locked Box Period are not to be treated as Taxes resulting from the ordinary business of the Group Companies for purposes of this indemnification obligation) and (y) Taxes in relation to the Hydrogen Business and the Carve-Out of the Hydrogen Business pursuant to Section 14.1 (including a potential retroactive taxation pursuant to section 6 para. 5 sentences 4 to 6 of the German Income Tax Act (Einkommensteuergesetz)) that fall into the scope of application of Section 13.6.

	Any payments of the Sellers according to this Section 13.4 shall be due for payment ten Business Days after the Sellers’ receipt of a written payment request from the Purchaser including a copy of the relevant tax assessment notice or other document, but not earlier than three Business Days prior to the due date of the respective indemnifiable Tax.
13.5	The Sellers shall not be obliged to indemnify the Purchaser for a Tax of any of the Group Companies pursuant to Section 13.4, if and to the extent that

13.5.1 a liability or provision has been accounted for in the Financial Statements of the relevant Group Company for the business years ending 31 December 2016 specifically with respect to relevant Tax; or

13.5.2 the relevant Tax could be avoided by way of loss setoff, loss carry-back or loss carry-forward of losses resulting from the period up to and including the Effective Date; or

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13.5.3 the relevant Group Company or the Purchaser receives a compensation payment with respect to the relevant Tax from an unrelated third party; or

13.5.4 the relevant Group Company or the Purchaser is entitled to any benefits in respect of Taxes (including, without limitation, benefits resulting from the lengthening of any amortization or depreciation periods, higher depreciation allowances, the non-recognition of liabilities or provisions) in any period after the Effective Date as the result of the circumstances giving rise to the respective Tax, it being understood that in such case the indemnification claim of the Purchaser pursuant to Section 13.4 shall be reduced by the amount of the net present value of the future benefit calculated on the basis of a discount rate of 6% p.a.; or

13.5.5 the relevant Tax has been caused by a measure that has been implemented on the level of the Company or the Subsidiary after the Closing Date with retroactive effect for Tax purposes on Taxes relating to the period up to and including the Closing Date; or

13.5.6 the relevant Tax has been caused by the fact that the profit and loss transfer agreement entered into by and between the Company and the Subsidiary on 21 November 2013 has been terminated in any way after the Closing Date and within the initial five years term pursuant to section 14 para. 1 sentence 1 no. 3 sentence 1 of the German Corporate Income Tax Act (Körperschaftsteuergesetz); or

13.5.7 the Purchaser has not complied with any of its obligations set out in Section 13.8 relating to the respective Tax, such breach of obligation of the Purchaser has materially prejudiced the Sellers in the defence of the respective Tax and the Purchaser cannot show that the respective Tax would have arisen in the same amount if the breach of obligation that has materially prejudiced the Sellers in the defence of the respective Tax had not occurred.

13.6 The Sellers shall be obliged to indemnify the Purchaser or, at the Purchaser’s written election, the Company and the Subsidiary (or any successor) from and against 50% (in words: fifty percent) of any and all Taxes of the Company and the Subsidiary in relation to the Hydrogen Business and the Carve-Out of the Hydrogen Business pursuant to Section 14.1 (including a potential retroactive taxation pursuant to section 6 para. 5 sentences 4 to 6 of the German Income Tax Act (Einkommensteuergesetz)) exempt for withholding tax on dividends (Kapitalertragsteuer), it being understood that any withholding tax on dividends in relation to the Hydrogen Business and the Carve-Out of the Hydrogen Business pursuant to Section 14.1 shall be fully indemnified pursuant to Section 13.4. Section 13.5.7 shall apply accordingly to claims of the Purchaser under this Section 13.6.

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13.7 The Purchaser shall pay to the Sellers an amount equal to (i) any refunds of Taxes (including refunds credited) relating to the period up to and including the Effective Date and (ii) any unused tax liability (Steuerverbindlichkeit) or tax provision (Steuerrückstellung) in the Financial Statements as of 31 December 2016 that has to be dissolved after the Effective Date. The Purchaser shall notify the Sellers in writing and without undue delay (unverzüglich) of any relevant decision by any tax authority that may result in a claim of the Sellers under this Section 13.7. Any amount payable to the Sellers pursuant to this Section 13.7 shall be due (fällig) and payable (zahlbar) within ten (10) Business Days after the refund of the relevant Tax has been collected (irrespective whether in cash, by set-off (Aufrechnung) or any other kind) respectively the tax liability or tax provision has appeared to be dissolved. The Deductible (as defined in Section 11.6) and the Overall Liability Cap (as defined in Section 11.6) shall apply mutatis mutandis to claims of the Sellers pursuant to this Section 13.7. The Purchaser shall not be obliged to make a payment pursuant to this Section 13.7 to the Sellers if and to the extent the claims of the Sellers under this Section 13.7 do not exceed the amount of the claims pursuant to Section 13.3, Section 13.4 and Section 13.6 to which the Purchaser is not entitled due to the applicability of the Deductible or the Overall Liability Cap.

13.8 The Parties agree with respect to the period beginning on the Closing Date to the following:

13.8.1 The Purchaser shall procure (steht dafür ein) that the Company and the Subsidiary will timely prepare and file when due all tax returns required to be filed with respect to Taxes that may give rise to a liability of the Sellers under this Section 13 ("Relevant Tax Returns"). The Purchaser shall procure (steht dafür ein) that the final drafts of any such Relevant Tax Returns exempt for monthly self-assessments and all information pertaining thereto reasonably required in order to review and comment on the drafts are provided to the Sellers, in any case no later than (i) thirty (30) Business Days prior to the relevant filing date, if such Relevant Tax Returns have to be filed on an annual basis or (ii) five (5) Business Days in all other cases. All such Relevant Tax Returns shall require the prior written consent of the Sellers and shall, if the Parties fail to reach an agreement thereon, be prepared and filed in accordance with the Sellers' instructions, except if and to the extent such instructions are not in compliance with mandatory laws. For the avoidance of doubt, monthly self-assessments will be prepared and filed by the Company and the Subsidiary without the prior consultation of the Sellers.

13.8.2 The Purchaser shall procure (steht dafür ein) that the Company and the Subsidiary and the legal successors of the Company and the Subsidiary forward to the Sellers without undue delay (unverzüglich) copies of any material correspondence of and with any tax authority relating to Taxes (including, for the avoidance of doubt, tax assessment notices and other documents and information) that may give rise to a liability of the Sellers under this Section 13. Each notification shall be made in writing (including by email) and copies of any documents reasonably related thereto shall be attached to such notification. The Purchaser shall procure (steht dafür ein), insofar as relating to Taxes that may give rise to a liability or a claim of the Sellers under this Section 13, that the Company and the Subsidiary (i) grant the Sellers and the Sellers' advisors the right to participate in material meetings, discussions and correspondence with any tax authority, including in case of Tax audits the right to attend any formal meetings with the Tax auditor (including the final meeting pursuant to Section 201 of the German General Tax Code (Abgabenordnung)), (ii) request that the relevant Tax auditor provides material questions in writing and that such questions will be forwarded without undue delay (unverzüglich) to the Sellers for the Sellers' evaluation and comments, and (iii) duly incorporate in their statements to any tax authority any comments the Sellers may have, except if and to the extent those comments are not in compliance with mandatory laws.

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13.8.3 The Purchaser shall not, and shall procure (steht dafür ein) that the Company and the Subsidiary shall not, (i) settle, concede or give their consent to the findings of any and all Tax audits relating to Taxes that may give rise to a liability of the Sellers under this Section 13 or (ii) make an admission of liability, compromise or settlement of any claim by any tax authority with respect to Taxes that may give rise to a liability of the Sellers under this Section 13, in each case unless with the prior written consent of the Sellers.

13.8.4 The Purchaser shall procure (steht dafür ein) that the Company and the Subsidiary, upon the request of the Sellers, file objections and institute and conduct legal proceedings against any orders, audits, decrees, Tax assessment notices or judgments in accordance with the Sellers' directions (except if and to the extent those directions are not in compliance with mandatory laws) if such objections or legal proceedings relate to Taxes that may give rise to a liability of the Sellers under this Section 13 ("Tax Contest"). Alternatively, the Sellers may decide, at any time, to direct through counsel of their own choice and at their own expense any Tax Contest. If Sellers choose to direct a Tax Contest, then (i) the Purchaser shall cooperate and follow the Sellers' instructions and shall procure (steht dafür ein) that the Company and the Subsidiary cooperate and follow the Sellers' instructions in each phase of such Tax Contest, except if and to the extent those instructions are not in compliance with mandatory laws. All costs arising from any Tax Contest to any of the Company and the Subsidiary are to be borne by the Sellers.

13.8.5 The Purchaser shall procure (steht dafür ein) that the Company and the Subsidiary retain, until the expiration of any applicable statute of limitation, all books, records and documentation relating to Taxes that may give rise to a liability of the Sellers under this Section 13.

13.8.6 The Purchaser shall not be obliged to provide or procure (steht nicht dafür ein) that the Company and the Subsidiary provide any Relevant Tax Return, tax assessment notice, correspondence with the tax authorities, other document or information to any of the Sellers pursuant to Section 13.8.1 to Section 13.8.5 if and to the extent that the respective Seller has become aware of the respective Relevant Tax Return, tax assessment notice, correspondence with the tax authorities, other document or information in its capacity as managing director.

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13.9 All payments of the Sellers and the Purchaser under this Section 13 shall be treated in relation between the Sellers and the Purchaser as a reduction or increase of the Purchase Price and, if the Purchaser elects payments of the Sellers to be made to the relevant Group Company (or its successor), as a contribution of the Purchaser into the relevant Group Company (or its successor).

13.10 Any conditions, exclusions, caps or other limitations provided for in any other section of this Agreement with respect to the claims of the Purchaser under this Agreement shall not apply to the claims of the Purchaser under this Section 13, unless this Section 13 explicitly and specifically stipulates that the respective condition, exclusion, cap or other limitation shall apply to the claims of the Purchaser under this Section 13. The Deductible and the Overall Liability Cap shall apply to the claims of the Purchaser pursuant to Section 13.3, Section 13.4 and Section 13.6.

13.11 Rights and remedies of the Purchaser under this Section 13 shall become time-barred six months after the last underlying Tax assessment or other assessment that cannot be changed anymore has become final and binding (formell und materiell bestandskräftig). Section 203 German Civil Code shall apply.

Section 14
Carve-Out of the Hydrogen Business

14.1 Prior to the Closing Date, the Sellers shall procure that the Company and the JV Partnership perform the remaining actions to fully implement the Carve-Out as provided in the Hive-Down Agreement. The Parties agree that the cooperation of the Sellers and the Purchaser (via the Company) in the JV Partnership as set forth in the Partnership Agreement shall economically commence as of the Closing Date.

14.2 The Sellers shall (i) keep the Purchaser regularly informed about the status of the implementation of the Carve-Out, (ii) inform and discuss any issues related to the implementation of the Carve-Out and (iii) provide any documents or information received in connection with the implementation of the Carve-Out to the Purchaser. The Purchaser shall have the opportunity to review and comment on any documents in relation to the Carve-Out and the execution of any of such documents is subject to Purchaser’s approval. The Sellers shall inform the Purchaser without undue delay (unverzüglich) of any other material information relevant for the implementation of the Carve-Out outside the ordinary sequence of discussions.

14.3 The Sellers shall indemnify and hold harmless the Purchaser or, at the Purchaser’s written election, the relevant Group Company (or any successor), from and against 50% (in words: fifty percent ) of any and all losses, costs, liabilities and damages of the Purchaser and/or the Group Companies incurred or arising from or in connection with the implementation of the Carve-Out (including but not limited to any remaining (joint) liability of the Company, e.g. under letters of comfort (Patronatserklärungen) issued by the Company in favour of the JV Partnership prior to the Closing Date). Claims under this Section 14.3 shall, in deviation from the statutory provisions, be time-barred one (1) year after the Closing Date, provided that claims in relation to a third party claim shall not become time-barred before the expiration of the statute of limitations period applicable to the underlying third party claim. Section 203 German Civil Code shall apply. Section 11.9 shall apply accordingly.

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Section 15
Pre-closing Obligations of the Sellers

15.1 From the Signing Date to the Closing Date, each of the Sellers shall inform the Purchaser immediately upon becoming aware of any incidents and decisions that might substantially affect the assets and liabilities, financial condition and/or operational results of at least one of the Group Companies.

15.2 Immediately after the Signing Date, the Sellers shall inform the parties listed in Exhibit 15.2 of the Transaction and shall use reasonable efforts to obtain waivers from such parties of any rights regarding an early termination of the agreements specified in Exhibit 15.2 in connection with the Transaction.

15.3 The Sellers hereby guarantee to the Purchaser in the form of an independent guarantee pursuant to section 311 para. 1 of the German Civil Code and, in addition, will, to the extent permitted under applicable law, procure, that from the Signing Date until the Closing Date, the Group Companies will conduct their business only in the ordinary course of business with the standard of care of a prudent business man and consistent with past practice, in particular that none of the measures set forth in Section 9.15.1 will be taken at any of the Group Companies.

15.4 Following the satisfaction of the conditions precedent set forth in Section 2.3 Sentence 3 and beyond the Closing Date, the Sellers shall not exercise any shareholder’s rights with regard to the Group Companies; in particular, they shall not pass any shareholders’ or partners’ resolutions.

15.5 The Sellers shall take any and all measures that are necessary and/or advisable for the consummation of this Agreement; the Sellers shall refrain from any and all actions that may impair, jeopardise or impede the consummation of this Agreement.

15.6 The Sellers shall inform the Purchaser latest on the last day before the Closing Date of circumstances due to which the guarantees given by the Sellers under this Agreement would be incorrect or incomplete as of the Closing Date, provided that the information with regard to Section 9.9.1(iii) and Exhibit 9.10.1(1) does not need to be updated as per such date.

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15.7 If the Sellers violate any of the obligations or guarantees provided for in this Section 15, the Sellers shall at the Purchaser’s absolute discretion

(i) restore, without undue delay at the request of the Purchaser, the position that would have existed if the violation of any of the obligations or guarantees had not occurred (restitution in kind - Naturalrestitution), and/or

(ii) pay, either to the Purchaser or, at the request of the Purchaser, to the relevant Group Company, the amount which is necessary to restore the position that would have existed if the violation of any of the obligations or guarantees had not occurred, and/or

(iii)	pay monetary damages (Schadensersatz in Geld), the monetary damages being at least the amount which the affected Group Company could have claimed against the Sellers in case the obligations or guarantees had been made to it.
If the violation of any of the obligations or guarantees provided for in this Section 15 consists in the existence of a liability, the right of the Purchaser to demand restitution in kind includes the right to demand full indemnification against such liability. Section 11.1, last sentence, shall apply accordingly.

Section 16
Further obligations of the Sellers

16.1 The Parties are currently in the process of negotiating the terms and conditions of the Partnership Agreement which shall apply as from the Closing Date as regards the JV Partnership. The current status of the main body of the Partnership Agreement, which was prepared by the Purchaser’s legal counsel (still being subject to review and sign-off by the Purchaser) and has not yet been commented on by the Sellers is attached hereto as Exhibit 16.1. On such basis the Sellers undertake to negotiate and to procure that the Founder OHG and the Company negotiate in good faith with the Purchaser the final version of the Partnership Agreement (including all Annexes thereto). The Parties shall use best efforts to finalize the Partnership Agreement as soon as reasonably possible after the Signing Date.

16.2 The Parties are in agreement that DF and RB shall resign as managing directors of the Company and of the Subsidiary with effect as of the Closing Date and that their respective employment relationship shall continue with the Company or the Subsidiary after the Closing Date. The Parties aim that RB will remain with the Company or the Subsidiary for a period of at least two years after the Closing Date and that DF will remain with the Company for a period of at least five years after the Closing Date. The current managing director service agreements of RB and DF shall be replaced as of the Closing Date by employment agreements which shall have substantially the same terms as the current managing director service agreements of RB and DF provided that they will in particular contain contractual and post-contractual non-competition undertakings as well as contractual non-solicitation undertakings of RB and DF. The specific terms of these employment agreements will be negotiated in good faith between the Parties prior to the Closing Date.

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16.3 JL undertakes to negotiate in good faith with the Purchaser the final version of JL’s restated managing director service agreement on the basis of the draft attached hereto as Exhibit 16.3. Once finalized JL shall enter into the final restated managing director service agreement with the Company with effect as of the Closing Date.

16.4 The Sellers covenant that any liabilities of the Sellers’ Group vis-à-vis any of the Group Companies will be paid at the latest as of the Closing Date.

16.5 Following the Closing Date, each of the Sellers shall cooperate in good faith with the Purchaser and the Group Companies and take all measures, make all declarations and execute all documents that are necessary in the reasonable opinion of the Purchaser to implement the transactions contemplated by this Agreement; the Sellers shall refrain from any and all actions that may impair, jeopardise or impede the implementation of the transactions contemplated by this Agreement.

Section 17
Non-Competition/Non-Solicitation

17.1 For a period of two (2) years following the Closing Date, each of the Sellers undertakes not to engage directly or indirectly in any activities in the geographical area of operations of the Group Companies as of the Signing Date and/or the Closing Date (the “Geographical Area of Operations”) in the area of the business operations of the Group Companies as of the Signing Date and/or the Closing Date (the “Scope of Business Operations”) that would result in Competition with any of the Group Companies (the “Non-Competition Obligation”). In particular, “Competition” in terms of the Non-Competition Obligation shall mean (i) the formation or the acquisition of and the participation in business entities, which are active in the Geographical Area of Operations and the Scope of Business Operations, as well as (ii) advising and/or representing such business entities, not however, the acquisition for investment purposes only up to 1 % of the share capital of corporations listed on a stock exchange, which are active in the Geographical Area of Operations and in the Scope of Business Operations, provided, however, that the Sellers are excluded from any influence over the management of such stock corporations.

17.2 For a period of two (2) years following the Closing Date, each of the Sellers undertakes not to, whether directly or indirectly, solicit or entice an Employee away who is currently or was employed with any of the Group Companies during the past year before the Signing Date, or offer or conclude with such aforementioned Employee an employment or consultancy agreement (“Non-Solicitation Obligation”).

17.3 Each of the Sellers covenants that all members of the Sellers’ Group comply with the Non-Solicitation Obligation and the Non-Competition Obligation.

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17.4 For the avoidance of doubt, the continued activities of the Sellers as managing directors, employees or consultants of any of the Group Companies do not constitute a violation of the Non-Competition Obligation and the Non-Solicitation Obligation.

17.5 If the Non-Competition Obligation and/or the Non-Solicitation Obligation is violated by a member of the Sellers’ Group, the Sellers shall be liable to pay to the Purchaser a contractual penalty (Vertragsstrafe) in the amount of EUR 50,000 for each breach. In the event of a continuing violation, each calendar month (or part thereof) that the violation continues shall be deemed to be an independent and separate breach. The defence of continuous violation (Einrede des Fortsetzungszusammenhangs) is excluded. The right of the Purchaser to claim damages or to require cessation of the violation shall not be affected by the payment of the contractual penalty. Any contractual penalty incurred shall be credited against any future claims for damages.

Section 18
Confidentiality, Press Releases

18.1 The Parties shall keep strictly confidential the content of this Agreement as well as any information received or obtained about the other Party in connection with the negotiation and implementation of this Agreement, unless the disclosure by the Purchaser is necessary to protect the rightful interest of the Purchaser.

18.2 The Sellers shall keep strictly confidential any information relating to the Group Companies and their business operations.

18.3 The Parties will agree upon a press release regarding the transactions contemplated in this Agreement. The Parties shall publish additional press releases or similar public statements relating to the transactions contemplated in this Agreement only after prior agreement regarding content, wording and time of the publication of such press release or similar public statement.

18.4 The obligations according to Section 18.1, Section 18.2 and Section 18.3 shall not apply to information which:

(i) is generally known to the public except in consequence of a wilful or negligent act or omission in contravention of the aforementioned obligations, or

(ii) is required to be disclosed by court order, administrative decision, statute or any applicable law, including any regulations of a cartel authority and a stock exchange on which the shares of any of the Parties or an enterprise affiliated to a Party are listed, or

(iii) is disclosed to any person bound to professional confidentiality.

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Section 19
Costs, Real Estate Transfer Tax

19.1 Each Party shall bear its own costs and expenses incurred in connection with the preparation, negotiation, and consummation of this Agreement, including any and all costs for its advisors. The costs of notarization of the Agreement shall be borne by the Purchaser.

19.2 All transfer taxes, charges, fees or duties resulting from the implementation and consummation of this Agreement, including the fees for the merger control filings at the competent cartel authorities shall be borne by the Purchaser.

Section 20
Notices

20.1 Any statement or other declaration based on or in connection with this Agreement (jointly the “Notices”) shall be made in writing unless a stricter form is required by mandatory law. The notice shall be delivered by hand, by mail or by email (but no other transmission by way of telecommunication (telekommunikative Übermittlung)). A Notice shall be considered to be received on the day of delivery, irrespective of the business hours of the recipient.

20.2 Any notices to be given shall be addressed as follows:

(i) If to the Purchaser:

AVX Corporation     
Attn. Deputy General Counsel/Mauri Aven     
One AVX Boulevard     
Fountain Inn, SC 29644     , USA
email: mauri.aven@avx.com

With a copy to:

Noerr LLP      
Dr. Alexander Ritvay, D.E.S.     
Charlottenstraße 57      
10117 Berlin, Germany     
email: alexander.ritvay@noerr.com

(ii) If to the Sellers or any of the Sellers, to the following representative of the Sellers (the “Sellers’ Representative”):

Dr Joachim Löffler     
xxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxx     
Germany

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With a copy to:

Kanzlei Schaffer und Partner mbB      
Rechtsanwältin Sophia Schmid     
Äußere Sulzbacher Str. 118     
90491 Nürnberg     
Email: sophia.schmid@schaffer-partner.de

20.3 Each Party shall notify the other Parties of any changes in its address without undue delay, provided that the Sellers shall only be entitled to provide a new address if such new address is within the territory of Germany. Until such notification, the previously notified address shall continue to be valid for the purposes of this Agreement. Any Notice shall be deemed to have been received at the time at which it would have been received under ordinary circumstances without the change of the address.

20.4

Any copies provided for in Section 20.2 shall be for information only. The receipt of any such copy is irrelevant for the question of whether and when a Notice has been received by a Party.

20.5

All declarations and notices of the Sellers shall only be made by all Sellers acting jointly. For the purposes of this Agreement, only the Sellers’ Representative shall be entitled to act on behalf of each individual Seller and/or some or all of the Sellers vis-à-vis the Purchaser and shall in particular be irrevocably entitled and be granted power of attorney to make or receive any declaration or notice, to sign all documents and take all actions (including, without limitation the making and receiving of unilateral declarations and the conclusion of agreements) that are required or useful under or in connection with this Agreement or the transactions contemplated by it on behalf of each individual Seller and some or all of the Sellers jointly. For these purposes each of the Sellers releases the Sellers’ Representative from the restrictions set out in Section 181 of the German Civil Code.

Section 21
Assignments

The Purchaser is entitled to assign, in whole or in part, its rights and obligations hereunder, without prior consent of the other Parties (i) to a company affiliated with it within the meaning of sections 15 et seq. of the German Stock Corporation Act, or (ii) to a bank which is involved in the financing of the transactions agreed herein. Beyond the aforementioned, the Parties are not entitled to assign the rights and obligations in whole or in part hereunder to third persons without the consent of the other Parties.

Section 22
Sellers’ Liability

Up to a maximum aggregate amount of EUR 1,000,000 (in words: one million Euros), the Sellers shall be jointly and severally liable (Gesamtschuldnerhaftung) to the Purchaser for the due fulfilment of any and all obligations of the Sellers, in particular, all payment obligations under and arising from this Agreement. For any claims in excess of such amount, the Sellers shall be liable to the Purchaser pro rata to their equity shareholding in the Company as set forth in Section 1.1.

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Section 23
Governing Law, Jurisdiction

23.1 The Parties have the common understanding that this Agreement is governed by and constructed in accordance with the laws of the Federal Republic of Germany.

23.2 The Parties agree that the state courts of Frankfurt, Germany shall have exclusive jurisdiction for all disputes arising out of or in connection with this Agreement or its validity.

Section 24
Amendments, Supplements, Termination

Amendments, supplements and the termination of this Agreement – including the modification of this provision – shall be valid only if made in writing by mutually signed instrument unless a stricter form is required by mandatory law.

Section 25
Miscellaneous

25.1 For the purpose of this Agreement, “Business Day” shall mean a day, other than a Saturday, a Sunday or any other day on which commercial banks in Betzdorf, Germany, are required by law to remain closed.

25.2 If a Party is obliged, according to this Agreement, to pay interest on any amounts becoming due and payable the interest rate shall be 5 % p.a. The assertion of further damage by the Party receiving the interest payments shall not be precluded by the aforementioned.

25.3 All Exhibits attached hereto form integral parts of this Agreement. References to individual sections of this Agreement also refer to their Exhibits and their content. Terms defined in the singular include the plural, and vice versa. The male form of terms used in this Agreement includes the female form. Any enumerations or examples which illustrate a term (e.g., if a sentence is opened by “in particular”), do not limit the scope of such term. Headings are inserted for convenience only and shall not affect the interpretation of this Agreement.

25.4 Wherever this Agreement includes English terms after which either in the same provision or elsewhere in this Agreement German terms have been inserted in brackets and/or italics, the respective German terms shall be decisive for the interpretation of the English terms. The use of a legal term of German law comprises the use of the analogously - by content and function - closest foreign legal term, if facts have to be judged under such foreign law. Wherever this Agreements provides that a Party “has to”, “shall” or “will” do and/or procure any action or situation, such Party shall be strictly liable for the performance of the relevant action or the occurrence of the relevant situation.

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25.5 This Agreement constitutes the entire agreement among and between the Parties with respect to the subject matter hereof. Side agreements to this Agreement do not exist. Agreements, negotiations and understandings, whether oral or written, heretofore made between the Parties shall be replaced by this Agreement.

25.6 Should any provisions of this Agreement be or become totally or partially invalid or unenforceable, or if this Agreement contains gaps, the validity or enforceability of the other provisions of this Agreement shall not be affected thereby. In place of the invalid, unenforceable or missing provision a valid and enforceable provision which the Parties would have agreed upon taking account of the economic purpose of this Agreement if they had, at the conclusion of this Agreement, been aware of the invalidity, unenforceability or the absence of the relevant provision, shall be deemed to be agreed between the Parties. The Parties shall be obligated to confirm such a provision in the form required by law.

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EX-10.22

Exhibit 10.22

SALARY CONTINUATION AGREEMENT

THIS SALARY CONTINUATION AGREEMENT (this “Agreement”), dated as of June 30, 2018, (the “Effective Date”) is made and entered by and between AVX Corporation, a Delaware corporation (the “Company”), and Kurt Cummings (the “Executive” or “Employee”).

WITNESSETH:

WHEREAS, the Employee currently serves as an Executive Officer of the Company and plans to retire from that position;

WHEREAS, the Company and Employee desire to enter into this Agreement in order to facilitate a smooth transition of responsibilities for the periods and on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration the receipt and sufficiency of which are mutually acknowledged, the Company and the Employee agree as follows:

1. Certain Defined Terms. In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

(a) “Annual Base Salary” means the Employee’s annual base salary rate, exclusive of bonuses and other incentive pay, as in effect on the Effective Date.

(b) “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended.

(c) “Non-Executive Employment Period” means the 12 month period from July 1, 2018 to July 1, 2019.

(d) “Salary Continuation Period” means the 12 month period from July 2, 2019 to July 1, 2020.

(e) “Termination Date” means July 1, 2019.

1

2. Non-Executive Employment Period.

(a) On the Effective Date, the Executive will relinquish his Executive Officer title and position, which will be treated as a “separation from service” for non-qualified retirement plan purposes, but remain as an employee.

(b) During the Non-Executive Employment Period, the Employee will be available, including any requested travel, from time to time to the Chief Executive Officer, President, Chief Financial Officer and other management of the Company to assist with any transition issues or projects that may arise.

(c) During this period, the employee shall receive an annual salary of $60,000 and continue to receive all employee benefits generally available to AVX Corporation exempt salaried employees.

(d) During this period, the Employee will no longer be eligible to earn current benefits in, or contribute to, the Management Incentive Plan, Nonqualified Supplemental Retirement Plan, car allowance program, or officer life insurance program, but will continue normal vesting under the applicable stock option, restricted stock unit, qualified retirement savings plan and cash award program.

(e) During this period, the Employee will be reimbursed for any business expenses properly incurred by the Employee, which shall be subject to and paid in accordance with the Company's expense reimbursement policy.

3. Salary Continuation Period. The Employee will cease to be an employee of the Company on the Termination Date which will be treated as a retirement and separation from service.

(a) During the Salary Continuation Period, the terminated Employee shall receive an amount equivalent to one half year’s Annual Base Salary, at the effective date of this agreement, less applicable deductions for taxes and medical premiums, spread evenly over the 12 month period.

(b) During this period, the terminated Employee, and where applicable, the terminated Employee’s spouse and eligible dependents, will be eligible to continue to receive medical coverage under the Company’s medical plans in accordance with the terms of the applicable plan documents by paying the applicable employee paid premiums.

(c) During this period, the terminated Employee will no longer be eligible for other employee benefits generally available to AVX Corporation exempt salaried employees, such as group life insurance, supplemental life insurance, group long-term disability coverage, or current contributions in connection with the savings plan, cash award program, or bonus program.

4. Post Salary Continuation Period. During the Post Salary Continuation Period, the terminated Employee will be eligible to continue to receive medical coverage under the Company’s medical plans in accordance with the terms of the applicable plan documents for a period of time, as allowed by the then current law, by paying applicable monthly COBRA premiums established by the Company.

2

5. Tax Matters. The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant to any applicable law, regulation or ruling.

6. Arbitration and Governing Law. Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by single-arbitrator arbitration administered by the American Arbitration Association in accordance with its Procedures for Large, Complex Commercial Disputes including the Optional Rules for Emergency Measures of Protection, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Unless otherwise agreed to by the parties, the arbitration shall be held in Greenville County, South Carolina and the substantive and procedural laws of Delaware shall apply, except for any choice of law provisions. The arbitration shall be conducted in English. Although the arbitrator(s) need not apply formal rules of evidence, the arbitration will be guided by the Federal Rules of Evidence. The arbitrator shall render an award together with a reasoned decision. The arbitrator may award costs and attorney’s fees if the arbitrator determines that the position of one party was not substantially justified. The arbitrator may not award punitive damages, nor may the arbitrator award multiple damages even if permitted by applicable law. Any demand for arbitration must be made within one year of discovery, or the claim will be deemed waived.

7. Validity. If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid or legal.

8. Acknowledgment of Reading and Comprehension. Each party represents, warrants and acknowledges that (i) it has read this Agreement, (ii) it has given mature and careful thought to this Agreement, (iii) it has been given the opportunity to review this Agreement independently with legal counsel, (iv) it fully understands and agrees to its terms, (v) it has entered into and executed this Agreement of its own choice and free will and in accordance with its own judgment, and (vi) it has been represented by counsel in connection with the negotiation and execution of this Agreement or has had the ability to retain counsel and has chosen not to do so.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

3

AVX CORPORATION
By:	/s/ John Sarvis
Date:	March 26, 2018
Name: John Sarvis
Title: CEO and President

EXECUTIVE
By:	/s/ Kurt Cummings
Date:	March 26, 2018
Name: Kurt Cummings
Title: EVP, Chief financial Officer and Treasurer

4

EX-21.1

EXHIBIT 21.1 

AVX CORPORATION

SUBSIDIARIES OF THE REGISTRANT

As of March 31, 2018, active significant subsidiaries, all 100% owned directly or indirectly, consist of the following:

1.	AVX Corporation (Delaware)
2.	AVX Tantalum Corporation (Delaware)
3.	AVX Filters Corporation (Delaware)
4.	Avio Excelente, S.A. DE C.V. (Mexico)
5.	AVX Industries. Pte. Ltd. (Singapore)
6.	AVX Components DA Amazonia Ltda. (Brazil)
7.	AVX Israel Limited (Israel)
8.	AVX Limited (United Kingdom)
9.	AVX Czech Republic s.r.o. (Czech Republic)
10.	TPC - SAS (France)
11.	AVX Interconnect Europe GmbH (Germany)
12.	AVX (Singapore) Pte. Ltd.
13.	TPC (Malaysia) Sdn. Bhd. (Malaysia)
14.	AVX Electronics (Tianjin) Co. Ltd. (China)
15.	AVX Asia Ltd. (Hong Kong)
16.	AVX Electronic Devices, LLC (Delaware)
17.	American Technical Ceramics Corp (New York)
18.	American Technical Ceramics (Florida), Inc.
19.	AVX Japan Corporation (Japan)
20.	AVX Antenna, Inc.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-00890, 333-103611, 333-127362, 333-177816, 333-193804, 333-197888 and 333-215978) of AVX Corporation of our report dated May 18, 2018, relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
Nashville, Tennessee
May 18, 2018

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS, that the undersigned directors of AVX Corporation, a Delaware corporation (the “Company”) hereby constitutes and appoints each of Michael Hufnagel, Douglas Baskin, and Evan Slavitt signing singly, the undersigned’s true and lawful attorney in fact to:

1. Sign and file with the Securities and Exchange Commission under the Securities Exchange Act of 1934, the Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 (the “Annual Report”);

2. Sign and file with the Securities and Exchange Commission under the Securities Act of 1933, Registration Statements on Form S-8 or other appropriate forms which incorporate by reference the Annual Report (each a “Registration Statement”), and any and all amendments to any such Registration Statement for shares of the Company’s common stock, $0.01 par value, and other interests therein issuable under each of the following employee benefit plans as the same may be amended from time to time:

a. The AVX Corporation Retirement Plan;

b. The AVX Corporation 2004 Stock Option Plan;

c. The AVX Corporation 2004 Non-Employee Director’s Stock Option Plan;

d. The AVX Corporation Non-qualified Supplemental Retirement Plan;

e. The AVX Corporation 401(k);

f. The AVX Corporation 2014 Stock Option Plan;

g. The AVX Corporation 2014 Restricted Stock Unit Plan;

h. The AVX Greenville LLC 401(k); and

i. The AVX Pension Plan for Bargaining Unit and Hourly Employees;

and in each case to execute and deliver any agreements, instruments, certificates or other documents which such person shall deem necessary or proper in connection with the filing of any such Registration Statement or the Annual Report, including any amendments or supplements thereto, and generally to act for and in the name of the undersigned with respect to any such filing as fully as could the undersigned if then personally present or acting.

3. Execute for and on behalf of the undersigned in the undersigned’s capacity as an officer and/or director of AVX Corporation (the “Company”), Forms 3, 4, and 5 in accordance with Section 16(a) of the Securities Exchange Act of 1934 and the rules thereunder;

4. Do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to complete and execute any such Form 3, 4, or 5 and timely file such form with the United States Securities and Exchange Commission and any stock exchange or similar authority, and

Page 1 of 2

5. Take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be of benefit to the undersigned, it being understood that the documents executed by such attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be conditioned as such attorney-in-fact may approve in such attorney-in-fact’s discretion,

The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such attorney-in-fact or such attorney-in-fact’s substitutes, shall lawfully do or cause to be done by virtue of this power of attorney and the rights and powers herein granted. The undersigned acknowledges the foregoing attorneys-in-fact, in serving in such capacity at the request of the undersigned, are not assuming, nor is the Company assuming, any of the undersigned’s responsibilities to comply with Section 16(a) of the Securities Exchange Act of 1934 and the rules thereunder.

This Power of Attorney shall remain in full force and effect unless earlier revoked by the undersigned in a signed writing delivered to the foregoing attorneys-in-fact.

IN WITNESS WHEREOF, each of the undersigned directors has caused this Power of Attorney to be executed as of the date set forth opposite his respective name. This Power of Attorney may be executed in several counterparts with the same effect as if signed in one document.

SIGNATURE	DATE
/s/ John Sarvis		March 26, 2018
John Sarvis
/s/ Goro Yamaguchi		March 30, 2018
Goro Yamaguchi
/s/ Hideo Tanimoto		March 29, 2018
Hideo Tanimoto
/s/ Shoichi Aoki		March 30, 2018
Shoichi Aoki
/s/ Koichi Kano		March 29, 2018
Koichi Kano
/s/ Hiroshi Fure		March 29, 2018
Hiroshi Fure
/s/ Donald B. Christiansen		March 26, 2018
Donald B. Christiansen
/s/ David DeCenzo		March 26, 2018
David DeCenzo
/s/ Joseph Stach		March 25, 2018
Joseph Stach

Page 2 of 2

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, John Sarvis, certify that:

1. I have reviewed this annual report on Form 10-K of AVX Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	/s/ John Sarvis
Date: May 18, 2018	John Sarvis
	Chairman, Chief Executive Officer and President

A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act of 2002 has been provided to AVX Corporation and will be retained by AVX Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Kurt P. Cummings, certify that:

1. I have reviewed this annual report on Form 10-K of AVX Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	/s/ Kurt P. Cummings
Date: May 18, 2018	Kurt P. Cummings
	Executive Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act of 2002 has been provided to AVX Corporation and will be retained by AVX Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of AVX Corporation (the "Registrant") on Form 10-K for the period ending March 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, John Sarvis and Kurt P. Cummings, Chief Executive Officer and Chief Financial Officer, respectively, of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the results of operations and financial condition of the Registrant.

Date: May 18, 2018

/s/ John Sarvis

John Sarvis

Chairman, Chief Executive Officer and President

/s/ Kurt P. Cummings

Kurt P. Cummings

Executive Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to AVX Corporation and will be retained by AVX Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - USD ($)	12 Months Ended
	Mar. 31, 2018	May 15, 2018	Sep. 30, 2017
Document Information [Line Items]
Entity Registrant Name	AVX Corp
Entity Central Index Key	0000859163
Trading Symbol	avx
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		168,512,387
Entity Public Float			$ 847,283,677
Document Type	10-K
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Assets
Cash and cash equivalents	$ 547,415	$ 578,634
Short-term investments in securities	279,787	528,748
Accounts receivable - trade, net	275,259	176,730
Accounts receivable - affiliates	9,255	10,074
Inventories, net	516,777	474,128
Income taxes receivable	2,566	34,287
Prepaid and other	70,665	33,803
Total current assets	1,701,724	1,836,404
Property and equipment, net	418,286	239,951
Goodwill	316,298	213,051
Intangible assets, net	128,612	53,650
Deferred income taxes	75,720	124,589
Other assets	32,126	9,768
Total Assets	2,672,766	2,477,413
Liabilities and Stockholders' Equity
Accounts payable - trade	89,726	43,778
Accounts payable - affiliates	26,320	36,663
Income taxes payable	8,290	3,944
Accrued payroll and benefits	52,044	32,980
Accrued expenses	118,183	98,702
Total current liabilities	294,563	216,067
Income taxes payable	69,645
Pensions	10,605	12,663
Deferred income taxes	12,895	957
Other liabilities	41,615	31,247
Total non-current liabilities	134,760	44,867
Total Liabilities	429,323	260,934
Commitments and contingencies (Note 13)
Stockholders' Equity:
Preferred stock, par value $.01 per share: Authorized, 20,000 shares; None issued and outstanding
Common stock, par value $.01 per share: Authorized, 300,000 shares; issued, 176,369 shares; outstanding, 167,930 and 168,434 shares for 2017 and 2018, respectively	1,764	1,764
Additional paid-in capital	360,077	357,203
Retained earnings	1,962,467	2,033,285
Accumulated other comprehensive (loss)	21,257	(67,163)
Treasury stock, at cost, 8,439 and 7,935 shares for 2017 and 2018, respectively	(102,122)	(108,610)
Total Stockholders' Equity	2,243,443	2,216,479
Total Liabilities and Stockholders' Equity	$ 2,672,766	$ 2,477,413

XML

Consolidated Balance Sheets (Parentheticals) - $ / shares shares in Thousands	Mar. 31, 2018	Mar. 31, 2017
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	20,000	20,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	300,000	300,000
Common stock, shares issued (in shares)	176,369	176,369
Common stock, shares outstanding (in shares)	168,434	167,930
Treasury stock, shares (in shares)	7,935	8,439

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
		Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net sales		$ 1,562,474	$ 1,312,661	$ 1,195,529
Cost of sales		1,243,612	1,027,906	906,460
Gross profit		318,862	284,755	289,069
Selling, general and administrative expenses		140,528	117,598	119,767
Legal and environmental (benefit) charges		(1,500)	3,600	45,318
Profit from operations		179,834	163,557	123,984
Other income (loss):
Interest income		12,778	7,381	5,003
Other, net		(299)	4,011	3,165
Income before income taxes		192,313	174,949	132,152
Provision for income taxes		187,403	49,164	30,617
Net income		$ 4,910	$ 125,785	$ 101,535
Income per share:
Basic (in dollars per share)		$ 0.03	$ 0.75	$ 0.61
Diluted (in dollars per share)		0.03	0.75	0.60
Dividends declared (per share) (in dollars per share)		$ 0.45	$ 0.43	$ 0.42
Weighted average common shares outstanding:
Basic (in shares)		168,262	167,506	167,797
Diluted (in shares)	[1]	168,925	167,837	167,961

[1] Common stock equivalents not included in the computation of diluted earnings per share because the impact would have been anti-dilutive were 2,974 shares, 1,381 shares, and 1,733 shares for the fiscal years ended March 31, 2016, 2017, and 2018, respectively.

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net income	$ 4,910	$ 125,785	$ 101,535
Other comprehensive income, net of income taxes:
Foreign currency translation adjustment	76,711	(14,674)	14,330
Foreign currency cash flow hedges adjustment	(490)	183	2
Pension liabilities adjustment	12,199	(7,527)	8,209
Other post-employment obligations		(777)	(244)
Other comprehensive income (loss), net of income taxes	88,420	(22,795)	22,297
Comprehensive income	$ 93,330	$ 102,990	$ 123,832

XML

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Mar. 31, 2015	168,191
Balance at Mar. 31, 2015	$ 1,764	$ (104,608)	$ 352,996	$ 1,948,476	$ (66,665)	$ 2,131,963
Net income				101,535		101,535
Other comprehensive income, net of income taxes					22,297	22,297
Dividends				(70,499)		(70,499)
Stock-based compensation expense			1,229			1,229
Stock option activity (in shares)	62
Stock option activity		805	(97)			708
Tax benefit of stock option exercises			58			$ 58
Treasury stock purchased (in shares)	(761)					(761)
Treasury stock purchased		(10,185)				$ (10,185)
Balance (in shares) at Mar. 31, 2016	167,492
Balance at Mar. 31, 2016	$ 1,764	(113,988)	354,186	1,979,512	(44,368)	2,177,106
Net income				125,785		125,785
Other comprehensive income, net of income taxes					(22,795)	(22,795)
Dividends				(72,012)		(72,012)
Stock-based compensation expense			2,327			2,327
Stock option activity (in shares)	794
Stock option activity		10,211	(93)			10,118
Tax benefit of stock option exercises			782			$ 782
Treasury stock purchased (in shares)	(356)					(356)
Treasury stock purchased		(4,833)				$ (4,833)
Balance (in shares) at Mar. 31, 2017	167,930					167,930
Balance at Mar. 31, 2017	$ 1,764	(108,610)	357,203	2,033,285	(67,163)	$ 2,216,479
Net income				4,910		4,910
Other comprehensive income, net of income taxes					88,420	88,420
Dividends				(75,728)		(75,728)
Stock-based compensation expense			3,407			$ 3,407
Stock option activity (in shares)	504					433
Stock option activity		6,488	(10)			$ 6,478
Treasury stock purchased (in shares)						0
Payments of tax withholding for vested restricted stock units			(523)			$ (523)
Balance (in shares) at Mar. 31, 2018	168,434					168,434
Balance at Mar. 31, 2018	$ 1,764	$ (102,122)	$ 360,077	$ 1,962,467	$ 21,257	$ 2,243,443

XML

Consolidated Statements of Stockholders' Equity (Parentheticals) - $ / shares	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Dividends paid per share (in dollars per share)	$ 0.45	$ 0.43	$ 0.42

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
OPERATING ACTIVITIES:
Net income	$ 4,910	$ 125,785	$ 101,535
Adjustment to reconcile net income to net cash from operating activities:
Depreciation and amortization	59,788	42,687	38,951
Stock-based compensation expense	3,407	2,327	1,229
Deferred income taxes	43,993	(2,175)	26,722
Gain (loss) on disposal of property and equipment	267	(1,894)	87
Changes in operating assets and liabilities, excluding acquisitions :
Accounts receivable	(26,075)	(18,116)	20,578
Inventories	20,850	6,798	55,482
Accounts payable and accrued expenses	(32,981)	33,447	(77,494)
Income taxes payable	72,112	(39,272)	(591)
Other assets	50,037	13,219	8,429
Other liabilities	(811)	32,205	(8,487)
Net cash provided by operating activities	195,497	195,011	166,441
INVESTING ACTIVITIES:
Purchases of property and equipment	(100,537)	(66,288)	(48,103)
Purchase of business, net of cash and debt acquired	(290,280)
Purchases of investment securities	(1,724,921)	(1,449,298)	(771,178)
Redemptions of investment securities	1,978,157	1,500,586	803,470
Proceeds from property, plant & equipment dispositions	36	11,266	1,084
Other investing activities	(969)
Net cash used in investing activities	(138,514)	(3,734)	(14,727)
FINANCING ACTIVITIES:
Dividends paid	(75,728)	(72,012)	(70,499)
Purchase of treasury stock		(4,833)	(10,185)
Proceeds from exercise of stock options	5,955	10,118	708
Principle payments of debt	(21,106)
Payments of tax withholding for vested restricted stock units	(523)
Excess tax benefit from stock-based payment arrangements		782	58
Net cash used in financing activities	(91,402)	(65,945)	(79,918)
Effect of exchange rate on cash	3,200	(906)	807
Increase (decrease) in cash and cash equivalents	(31,219)	124,426	72,603
Cash and cash equivalents at beginning of period	578,634	454,208	381,605
Cash and cash equivalents at end of period	$ 547,415	$ 578,634	$ 454,208

XML

Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.

Summary of Significant Accounting Policies:

General:

AVX Corporation is a leading worldwide manufacturer, supplier and reseller of a broad line of electronic components and interconnect, sensing and control devices, and related products. The consolidated financial statements of AVX Corporation (“AVX” or “the Company”) include all accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated.

From

January 1990

through

August 15, 1995,

we were wholly owned by Kyocera Corporation (“Kyocera”). As of

March 31, 2018,

Kyocera owned approximately

72%

of our outstanding shares of common stock.

Use of Estimates:

The consolidated financial statements are prepared in accordance with generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. We base our estimates and judgments on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are

not

readily apparent from other sources. There can be

no

assurance that actual results will

not

differ from those estimates. On an ongoing basis, we evaluate our accounting policies and disclosure practices.

Cash Equivalents and Investments in Securities:

We consider all highly liquid investments purchased with an original maturity of

three

months (

90

days) or less to be cash equivalents.

Our short-term and long-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments are recorded as interest income.

Inventories:

       We determine the cost of raw materials, work in process, and finished goods inventories by the

first

-in,

first

-out (“FIFO”) method. Manufactured inventory costs include material, labor, and manufacturing overhead. Inventories are valued at the lower of cost or market (realizable value) and are valued at market value where there is evidence that the utility of goods will be less than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value. We review and adjust the carrying value of our inventories based on historical usage, customer forecasts received from marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts, and obsolescence and aging.

Property and Equipment:

Property and equipment are recorded at cost. Machinery and equipment are depreciated on the double-declining balance and straight-line methods. Buildings are depreciated on the straight-line method. The estimated useful lives used for computing depreciation are as follows: buildings and improvements –

10

to

31.5

years, machinery and equipment –

3

to

10

years. Depreciation expense was

$33,918,

$37,493

and

$50,813

for the fiscal years ended

March 31, 2016,

2017

and

2018,

respectively.

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of any such assets

may

not

be recoverable. If the sum of the undiscounted cash flows is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets.

The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in our results of operations.

Goodwill and Acquired Intangible Assets:

We do

not

amortize goodwill. We test goodwill for impairment annually or whenever conditions indicate that such impairment could exist. The carrying value of goodwill is evaluated in relation to the operating performance and estimated future discounted cash flows of the related reporting unit. If the sum of the discounted cash flows is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets. The estimate of cash flow is based upon, among other things, certain assumptions about expected future operating performance. Our annual goodwill impairment analysis indicated that there was

no

related impairment for the fiscal years ended

March 31, 2016,

2017,

or

2018.

We have determined that our intangible assets have finite useful lives. Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was

$5,033,

$5,194,

and

$9,006

for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

	March 31, 2017					March 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	$	51,000	$	(26,917	)	$	96,388	$	(30,819	)
Developed technology and other		14,521		(12,153	)		43,689		(13,816	)
Trade name and trademarks		34,000		(6,800	)		43,380		(10,210	)
Total		99,521		(45,870	)		183,457		(54,845	)

The estimated future annual amortization expense for intangible assets is as follows:

Fiscal Year ended March 31,	Estimated Amortization Expense
2019	$	13,421
2020		13,375
2021		13,077
2022		12,201
2023		12,040
Thereafter		64,498

Pension Assumptions:

Pension benefit obligations and the related effects on our results of operations are calculated using actuarial models. Two critical assumptions, discount rate and expected rate of return on plan assets, are important elements of plan expense and/or liability measurement. We evaluate these assumptions annually. The discount rate enables us to state expected future cash flows at a present value on the measurement date. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s measurement date and determine a level equivalent yield unique to each plan. A lower discount rate increases the present value of benefit obligations and increases pension expense. To determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. Other assumptions involve demographic factors such as retirement, mortality, and turnover. These assumptions are evaluated annually and are updated to reflect our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. In such cases, the differences between actual results and actuarial assumptions are amortized over future periods.

Income Taxes:

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure together with assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that our deferred tax assets will be recoverable based on all available evidence, both positive and negative. To the extent we believe that recovery is

not

more likely than

not,

we establish a valuation allowance.

We have recorded valuation allowances due to uncertainties related to our ability to realize some of our deferred tax assets, primarily consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our estimates of future taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate countries where we have a valuation allowance on our deferred tax assets due to historical operating losses and when such positive evidence outweighs negative evidence we will release such valuation allowance as appropriate.

We also record a provision for certain international, federal, and state tax contingencies based on the likelihood of obligation, when needed. In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of taxes due. These challenges

may

result in adjustments of the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances

may

affect our ability to utilize tax benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposures have been sufficiently provided for in the consolidated financial statements. In the event that actual results differ from these estimates, we

may

need to adjust tax accounts and related payments, which could materially impact our financial condition and results of operations.

We account for uncertainty in income taxes recognized in our financial statements. We recognize in our financial statements the impact of a tax position, if that position would “more likely than

not”

be sustained on audit, based on the technical merits of the position. Accruals for estimated interest and penalties are recorded as a component of interest expense.

The Tax Cuts and Jobs Act (the "Act") was enacted into law in the U.S. on

December 22, 2017.

Among numerous other provisions, the Act reduced the statutory U.S. corporation income tax rate from

35%

to

21%,

effective

January 1, 2018.

This was the primary reason for a change in AVX's global tax rate estimate for the fiscal year ending

March 31, 2018,

resulting in a blended, estimated global tax rate of

27%

for fiscal

2018.

The Act also resulted in an estimated net decrease in the valuation of U.S. net current and deferred tax assets and liabilities of

$24.7

million. The Act reduced or eliminated certain corporate tax deductions and provided for a transition from a worldwide to a modified territorial tax system for resident corporations and related corporate group members accompanied by a

one

-time tax, effective

December 31, 2017,

on all U.S.-based corporate groups' accumulated foreign earnings as yet untaxed by the U.S. This

one

-time tax is assessed at a

15.5%

rate on all such earnings held in cash or liquid asset positions, and at an

8%

rate on all other non-liquid asset positions. This

one

-time tax was recorded in the results for the quarter ended

December 31, 2017,

and was approximately

$75.7

 million, which is payable in installments over an

eight

-year period beginning in

2018.

 Based on our interpretation of the Act, we made reasonable estimates to record provisional adjustments during fiscal

2018.

The Act also puts in place several new tax laws that are generally effective prospectively from

January 1, 2018,

including but

not

limited to: a base erosion and anti-abuse tax; elimination of U.S. federal taxes on substantially all dividends from foreign subsidiaries; a lower U.S. tax rate on certain revenues from sources outside the U.S.; and, implementation of a new provision to tax certain global intangible low-taxed income of foreign subsidiaries. We will continue to assess all of the other relevant aspects of the Act, including additional guidance under the Act, among other things which might impact our income tax provision.

In consideration of the Act, the Company has determined that it is

no

longer necessary to assert that cash and profits generated by our foreign subsidiaries will continue to be reinvested locally indefinitely. Accordingly, we provided for estimated foreign withholding taxes and associated foreign tax credits related to the potential distribution of such earnings. Therefore, in addition to the

one

-time tax noted above, we also provided for estimated foreign withholding taxes of approximately

$13.6

million related to the potentional distribution of such foreign earnings.

Foreign Currency Activity:

Assets and liabilities of foreign subsidiaries, where functional currencies are their local currencies, are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments result from the process of translating foreign currency financial statements into U.S. dollars and are reported separately as a component of accumulated other comprehensive income (loss). Transaction gains and losses reflected in the functional currencies are reported in our results of operations at the time of the transaction.

Derivative Financial Instruments:

Derivative instruments are reported on the consolidated balance sheets at their fair values. The accounting for changes in fair value depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. For instruments designated as accounting hedges, the effective portion of gains or losses is reported in other comprehensive income (loss) and is reclassified into the statement of operations in the same period during which the hedged transaction affects our results of operations. Any contracts that do

not

qualify as hedges, for accounting purposes, are marked to market with the resulting gains and losses recognized in other income or expense.

We use financial instruments such as forward exchange contracts to hedge a portion, but

not

all, of our firm commitments denominated in foreign currencies. The purpose of our foreign currency management is to minimize the effect of exchange rate changes on actual cash flows from foreign currency denominated transactions. See Note

14

for further discussion of derivative financial instruments.

Revenue Recognition and Accounts Receivable:

All products are built to specification and tested by AVX or our suppliers for adherence to such specification before shipment to customers. We ship products to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenue when the sales process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is reasonably assured. We evaluate gross versus net presentation on revenues from products purchased and resold in accordance with the revenue recognition criteria outlined in FASB ASC

605

-

45,

Principal Agent Considerations. Based on the evaluation with our resale arrangements with Kyocera, including consideration of the primary indicators set forth in ASC

605

-

45

-

45,

we record revenue related to products purchased and resold on a gross basis. Estimates used in determining sales allowance programs described below are subject to the volatilities of the marketplace. This includes, but is

not

limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be

no

assurance that actual results will

not

differ from those estimates.

Accounts Receivable

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends and an evaluation of the impact of current and projected economic conditions. We evaluate the past-due status of trade receivables based on contractual terms of sale. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances

may

be required.

Returns

Sales revenue and cost of sales reported in the statement of operations are reduced to reflect estimated returns. We record an estimated sales allowance for returns at the time of sale based on historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. The amount accrued reflects the return of value of the customer’s inventory. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns. Our actual results have historically approximated our estimates. When the product is returned and verified, the customer is given credit against their accounts receivable.

Distribution Programs

A portion of our sales to independent electronic component distributor customers are subject to various distributor sales programs. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report distributor allowances in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we do

not

track the individual units that are recorded against specific products sold from distributor inventories, which would allow us to directly compare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold during that period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates for each program.

Distributor Stock Rotation Program

Stock rotation is a program whereby distributor customers are allowed to return for credit qualified inventory, semi-annually, equal to a certain percentage, primarily limited to

5%

of the previous

six

months net sales. We record an estimated sales allowance for stock rotation at the time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns under the stock rotation program. Our actual results have historically approximated our estimates. When the product is returned and verified, the distributor is given credit against their accounts receivable.

Distributor Ship-from-Stock and Debit Program

Ship-from-Stock and Debit (“ship and debit”) is a program designed to assist distributor customers in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations

may

cover current and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future credits under the ship and debit program. Our actual results have historically approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment.

Special Incentive Programs

We

may

offer special incentive discounts based on amount of product ordered or shipped. At the time we record sales under these agreements, we provide an allowance for the discounts on the sales for which the customer is eligible. The customer then debits us for the authorized discount amount.

Research, Development, and Engineering:

Research, development, and engineering expenditures are expensed when incurred. Research and development expenses are included in selling, general, and administrative expenses and were

$13,683,

$16,493,

and

$17,886

for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively. Engineering expenses are included in cost of sales and were

$14,616,

$14,453,

and

$23,892

 for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

Stock-Based Compensation:

We recognize compensation cost resulting from all share-based payment transactions in the financial statements. The amount of compensation cost is measured based on the grant-date fair value for the share-based payment issued. Our policy is to grant stock options with an exercise price equal to our stock price on the date of grant. Compensation cost is recognized over the vesting period of the award.

We use the Black-Scholes-Merton option-pricing model to determine the fair value of stock options at the grant date. We use the closing fair market value of the Company’s common stock on the grant date to determine the fair value of restricted stock units (“RSU”) at the grant date. See Note

12

for assumptions used.

Treasury Stock:

Our Board of Directors has approved stock repurchase authorizations in

2005

and

2007

whereby up to

10,000

shares of common stock can be purchased from time to time at the discretion of management. Accordingly,

761

shares were purchased during the fiscal year ended

March 31, 2016,

356

shares were purchased during the fiscal year ended

March 31, 2017,

and

0

shares were purchased during the fiscal year ended

March 31, 2018.

As of

March 31, 2018,

we had in treasury

7,935

common shares at a cost of

$102,122.

There are

3,067

shares that

may

yet be purchased under the

2007

authorization.

Commitments and Contingencies:

Liabilities for loss contingencies are recorded when analysis indicates that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely amount. In the event that

no

amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Legal advisory costs are expensed as incurred.

New Accounting Standards:

In

May 2014,

the FASB issued ASU

2014

-

09,

“Revenue from Contracts with Customers.” This guidance modifies how an entity will determine the measurement of revenue and timing of when it is recognized. The guidance provides for a

five

-step approach in applying the standard:

1

) identifying the contract with the customer,

2

) identifying separate performance obligations in the contract,

3

) determining the transaction price,

4

) allocating the transaction price to separate performance obligations, and

5

) recognizing the revenue when the performance obligation has been satisfied. The new guidance requires enhanced disclosures for the nature, amount, timing, and uncertainty of revenue that is being recognized. The guidance is effective for public companies for interim and annual reporting periods beginning after

December 15, 2017.

Companies

may

use either a full retrospective or a modified retrospective approach to adopt ASU

2014

-

09.

We have assessed the impact of the new standard and anticipate

no

material impact from adopting ASU

2014

-

09

in how we recognize revenue. We identified a change in how we recognize right-of-return liabilities which impact Current Assets and Current Liabilities. We will adopt ASU

2014

-

09

using the modified retrospective approach in the

first

quarter of fiscal year

2019.

 

In

February 2016,

FASB issued ASU

2016

-

02,

“Leases.” This guidance changes the requirements for inclusion of certain right-of-use assets and the associated lease liabilities to be included in a statement of financial position. The classification criteria maintains the distinction between finance leases and operating leases. Regarding finance leases, lessees are required to

1

) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position,

2

) recognize interest on the lease liability separate from the amortization of the right-of-use asset in the statement of comprehensive income, and

3

) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. Regarding operating leases, lessees are required to

1

) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position,

2

) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and

3

) classify all cash payments within operating activities in the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods beginning after

December 15, 2018.

Early adoption is permitted. We previously disclosed prior to our recent acquisitions that we anticipated

no

material impact from adopting ASU

2016

-

02.

 However, we are in the process of updating our assessment to include the impact of our recently acquired companies.

In

March 2016,

the FASB issued ASU

2016

-

09,

“Compensation — Stock Compensation.” The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The guidance is effective for public companies for annual reporting periods beginning after

December 15, 2016,

and interim periods within those annual periods. The standard became effective for the interim reporting period ending

June 30, 2017

and has

not

had a material impact on our consolidated financial statements.

In

January 2017,

the FASB issued ASU

2017

-

04,

“Intangibles – Goodwill and Other.” This guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step

2

from the goodwill impairment test. Step

2

measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of goodwill. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. This ASU also removes the requirements for any reporting unit with a

zero

or negative carrying amount to perform a qualitative assessment, and if it fails that qualitative test to perform Step

2

of the goodwill impairment test. Companies are to apply the standard on a prospective basis. The guidance is effective for public companies that are an SEC filer for fiscal years beginning after

December 15, 2019.

Early adoption is permitted and management elected to adopt this guidance beginning with the interim period ending

June 30, 2017.

The adoption of this standard has

not

had a material impact on our consolidated financial statements.

In

August 2017,

the FASB issued ASU

2017

-

12,

“Derivatives and Hedging.” The standard aims to align the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results for cash flow and fair value hedge accounting with risk management activities. The guidance is effective for public companies for annual reporting periods beginning after

December 15, 2018,

and interim periods within those annual periods. Early adoption is permitted in any interim period after issuance. We do

not

anticipate a material impact from adopting this standard in the

first

quarter of fiscal year

2019.

In

February 2018,

the FASB issued ASU

2018

-

02,

"Income Statement - Reporting Comprehensive Income." This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The standard is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have

not

yet been issued. We are currently evaluating the potential impact on our consolidated financial statements and disclosures.

      We have reviewed other newly issued accounting pronouncements and concluded that they are either

not

applicable to our business or that

no

material effect is expected on our consolidated financial statements as a result of future adoption.

XML

Note 2 - Earnings Per Share

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

2.

Earnings Per Share:

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the dilutive effect of potential common stock equivalents during the period. Stock options and unvested service-based RSU awards make up the common stock equivalents and are computed using the treasury stock method.

The table below represents the basic and diluted earnings per share, calculated using the weighted average number of shares of common stock and potential common stock equivalents outstanding for the years ended

March 31, 2016,

2017,

and

2018:

	Fiscal Year Ended March 31,
	2016		2017		2018
Net income	$	101,535	$	125,785	$	4,910
Computation of Basic EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		167,797		167,506		168,262
Basic earnings per share	$	0.61	$	0.75	$	0.03
Computation of Diluted EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		167,797		167,506		168,262
Effect of stock options		164		331		663
Weighted Average Shares used in Computing Diluted EPS (1)		167,961		167,837		168,925
Diluted earnings per share	$	0.60	$	0.75	$	0.03

(

1

) Common stock equivalents

not

included in the computation of diluted earnings per share because the impact would have been anti-dilutive were

2,974

shares,

1,381

shares, and

1,733

shares for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

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Note 3 - Comprehensive Income

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

3.

Comprehensive Income:

Comprehensive income (loss) includes the following components:

	Fiscal Year Ended March 31,
	2016						2017						2018
	Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax
Foreign currency translation adjustment	$	14,330		$	14,330		$	(14,674	)	$	(14,674	)	$	76,711		$	76,711
Foreign currency cash flow hedges adjustment		29			2			205			183			(626	)		(490	)
Pension liability adjustment		11,077			8,209			(10,155	)		(7,527	)		16,063			12,199
Other post-employment obligations		(244	)		(244	)		(777	)		(777	)		-			-
Other comprehensive income (loss)	$	25,192		$	22,297		$	(25,401	)	$	(22,795	)	$	92,148		$	88,420

The accumulated balance of comprehensive income (loss) is as follows:

	As of March 31,
	2017			2018
Foreign currency translation adjustment	$	(14,330	)	$	62,381
Foreign currency cash flow hedges adjustment		367			(123	)
Pension liability adjustment		(49,618	)		(37,419	)
Other post-employment obligations		(3,582	)		(3,582	)
Accumulated other comprehensive income (loss)	$	(67,163	)	$	21,257

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Note 4 - Fair Value

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

4.

Fair Value:

Fair Value Hierarchy:

The fair value framework requires the categorization of assets and liabilities into

three

levels based upon the assumptions (inputs) used to value the assets or liabilities. Level

1

provides the most reliable measure of fair value, whereas Level

3

generally requires significant management judgment. The

three

levels are defined as follows:

■ Level 1 : Unadjusted quoted prices in active markets for identical assets and liabilities.

■ Level 2 : Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

■ Level 3 : Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

During the fiscal years ended

March 31, 2016,

2017,

and

2018,

there have been

no

transfers of assets between the levels within the fair value hierarchy.

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
Assets held in the non-qualified deferred compensation program (1)	$	6,082	$	4,810	$	1,272	$	-
Foreign currency derivatives (2)		1,492		-		1,492		-
Total	$	7,574	$	4,810	$	2,764	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Liabilities measured at fair value on a recurring basis:
Obligation related to assets held in the non-qualified deferred compensation program (1)	$	6,082	$	4,810	$	1,272	$	-
Foreign currency derivatives (2)		886		-		886		-
Total	$	6,968	$	4,810	$	2,158	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
Assets held in the non-qualified deferred compensation program (1)	$	6,649	$	5,959	$	690	$	-
Foreign currency derivatives (2)		257		-		257		-
Total	$	6,906	$	5,959	$	947	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Liabilities measured at fair value on a recurring basis:
Obligation related to assets held in the non-qualified deferred compensation program (1)	$	6,649	$	5,959	$	690	$	-
Foreign currency derivatives (2)		514		-		514		-
Total	$	7,163	$	5,959	$	1,204	$	-

(

1

) The market value of the assets held in the trust for the non-qualified deferred compensation program is included as an asset and as a liability as the trust’s assets are both assets of the Company and also a liability as they are available to general creditors in certain circumstances.

(

2

) Foreign currency derivatives in the form of forward contracts are included in prepaid and other assets and liabilities in the

March 31, 2017

and

2018

consolidated balance sheets. Unrealized gains and losses on derivatives classified as cash flow hedges are recorded in other comprehensive income (loss). Realized gains and losses on derivatives classified as cash flow hedges and gains and losses on derivatives

not

designated as hedges are recorded in other income.

Valuation Techniques:

The following describes valuation techniques used to value our assets held in the non-qualified deferred compensation plan and derivatives.

Assets held in the non-qualified deferred compensation plan

Assets valued using Level

1

inputs in the table above represent assets from our non-qualified deferred compensation program. The funds in the non-qualified deferred compensation program are valued based on the number of shares in the funds using a price per share traded in an active market.

Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an investment exceeds its fair value, among other factors, we evaluate general market conditions, the duration and extent to which the fair value is less than cost, our intent and ability to hold the investment, and whether or

not

we expect to recover the security’s entire amortized cost. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.

Derivatives

      We primarily use forward contracts, with maturities generally less than

four

months, designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in forecasted transactions related to purchase commitments and sales, denominated in various currencies. We also use derivatives

not

designated as hedging instruments to hedge foreign currency balance sheet exposures. These derivatives are used to offset currency changes in the fair value of the hedged assets and liabilities. Fair values for all of our derivative financial instruments are valued by adjusting the market spot rate by forward points, based on the date of the contract. The spot rates and forward points used are an average rate from an actively traded market. At

March 31, 2017

and

2018,

all of our forward contracts have been designated as Level

2

measurements.

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Note 5 - Accounts Receivable

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

5.

Accounts Receivable:

	Fiscal Year Ended March 31,
	2017		2018
Gross Accounts Receivable - Trade	$	198,491	$	300,016
Less:
Allowances for doubtful accounts		1,285		1,893
Stock rotation and ship from stock and debit		14,853		15,989
Sales returns and discounts		5,623		6,875
Total allowances		21,761		24,757
	$	176,730	$	275,259

Charges related to allowances for doubtful accounts are charged to selling, general, and administrative expenses. Charges related to stock rotation, ship from stock and debit, sales returns, and sales discounts are reported as deductions from revenue. 

	Fiscal Year Ended March 31,
	2016			2017		2018
Allowances for doubtful accounts:
Beginning Balance	$	659		$	423	$	1,285
Charges		112			785		209
Applications		(348	)		77		(1,524	)
Translation, Acquisition and other		-			-		1,923
Ending Balance	$	423		$	1,285	$	1,893

	Fiscal Year Ended March 31,
	2016			2017			2018
Stock rotation and ship from stock debit:
Beginning Balance	$	16,378		$	14,314		$	14,853
Charges		29,432			25,470			30,523
Applications		(31,496	)		(24,931	)		(29,387	)
Ending Balance	$	14,314		$	14,853		$	15,989

	Fiscal Year Ended March 31,
	2016			2017			2018
Sales returns and discounts:
Beginning Balance	$	6,186		$	6,681		$	5,623
Charges		21,736			13,831			24,150
Applications		(21,271	)		(14,841	)		(23,399	)
Translation, Acquisition and other		30			(48	)		501
Ending Balance	$	6,681		$	5,623		$	6,875

XML

Note 6 - Inventories

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Inventory Disclosure [Text Block]

6.

Inventories:

	Fiscal Year Ended March 31,
	2017		2018
Finished goods	$	92,563	$	93,467
Work in process		107,392		133,556
Raw materials		274,173		289,754
	$	474,128	$	516,777

XML

Note 7 - Property and Equipment

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

7.

Property and Equipment:

	Fiscal Year Ended March 31,
	2017			2018
Land	$	32,839		$	43,209
Buildings and improvements		307,098			393,247
Machinery and equipment		1,150,999			1,470,460
Construction in progress		38,315			73,572
		1,529,251			1,980,488
Accumulated depreciation		(1,289,300	)		(1,562,202	)
	$	239,951		$	418,286

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Note 8 - Financial Instruments and Investments in Securities

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

8

.

Financial Instruments and Investments in Securities:

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, securities investments, and trade accounts receivable. We place our cash and cash equivalents with high credit quality institutions. At times, such investments

may

be in excess of the Federal Deposit Insurance Corporation insurance limit. Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities comprising our customer base and their dispersion across many different industries and countries. As of

March 31, 2018,

we believe that our credit risk exposure is

not

significant.

At

March 31, 2017

and

2018

we classified investments in debt securities and time deposits as held-to-maturity securities.

Our long-term and short-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments is recorded as interest income.

Investments in held-to-maturity securities, recorded at amortized cost, were as follows:

	As of March 31, 2017
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Short-term investments:
Corporate bonds	$	10,120	$	-	$	(1	)	$	10,119
Time deposits		518,628		148		-			518,776
	$	528,748	$	148	$	(1	)	$	528,895

	As of March 31, 2018
	Cost		Gross Unrealized Gains			Gross Unrealized Losses		Estimated Fair Value
Short-term investments:
Commercial Paper	$	10,597	$	(1	)	$	-	$	10,596
Time deposits		269,190		203			-		269,393
	$	279,787	$	202		$	-	$	279,989

The amortized cost and estimated fair value of held-to-maturity investments at

March 31, 2018,

by contractual maturity, are shown below. The estimated fair value of these investments are based on valuation inputs that include benchmark yields, reported trades, broker and dealer quotes, issuer spreads,

two

-sided markets, benchmark securities, bids, offers, and reference data, which are Level

2

inputs in the fair value hierarchy. Actual maturities

may

differ from contractual maturities because issuers

may

have the right to call or prepay obligations without call or prepayment penalties.

	Held-to-Maturity
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	279,787	$	279,989
Due after one year through five years		-		-
Total	$	279,787	$	279,989

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Note 9 - Income Taxes

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

9.

Income Taxes:

For financial reporting purposes, income before income taxes includes the following components:

	Fiscal Year Ended March 31,
	2016		2017		2018
Domestic	$	39,713	$	75,659	$	85,263
Foreign		92,439		99,290		107,050
Total	$	132,152	$	174,949	$	192,313

The provision for income taxes consisted of:

	Fiscal Year Ended March 31,
	2016			2017			2018
Current:
Federal/State	$	(11,117	)	$	33,220		$	123,527
Foreign		15,028			18,494			19,883
Total		3,911			51,714			143,410
Deferred:
Federal/State		23,903			1,725			25,822
Foreign		2,803			(4,275	)		18,171
Total		26,706			(2,550	)		43,993
	$	30,617		$	49,164		$	187,403

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

	As of March 31,
	2017					2018
Non-current:	Assets			Liabilities		Assets			Liabilities
Sales and receivable allowances	$	9,090		$	-	$	5,711		$	-
Inventory reserves		12,276			-		7,645			-
Depreciation and amortization		3,696			-		-			(22,336	)
Pension obligations		5,817			-		550			-
Accrued expenses		34,282			-		30,089			-
Other, net		2,044			-		-			(21,692	)
Net operating loss and tax credit carry forwards		70,360			-		77,108			-
Sub total		137,565			-		121,103			(44,028	)
Less: valuation allowances		(13,933	)		-		(14,250	)		-
Total Non-current	$	123,632		$	-	$	106,853		$	(44,028	)

	As of March 31,
	2017		2018
Assets, net of valuation allowances	$	123,632	$	106,853
Liabilities		-		(44,028	)
Net deferred income tax assets	$	123,632	$	62,825

	As of March 31,
Balance Sheet Presentation	2017			2018
Noncurrent assets	$	124,589		$	75,720
Noncurrent liabilities		(957	)		(12,895	)
Net deferred income tax assets	$	123,632		$	62,825

	As of March 31,
	2016			2017			2018
Valuation allowance beginning balance	$	27,207		$	26,034		$	13,933
Charged to income tax provision		413			(1,128	)		(2,879	)
Additions		-			-			2,975
Releases		(2,730	)		(7,413	)		-
Translation and other		1,144			(3,560	)		221
Valuation allowance ending balance	$	26,034		$	13,933		$	14,250

Reconciliation between the U.S. Federal statutory income tax rate and our effective rate for income tax is as follows:

	Fiscal Year Ended March 31,
	2016		2017		2018
U.S. Federal statutory rate		35.0%		35.0%		31.5%
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal benefit		0.4		0.5		0.8
Effect of foreign operations		(8.7)		(8.3)		(7.1)
Change in valuation allowance		0.5		(5.0)		-
Deemed dividends from subsidiaries		2.9		6.3		7.3
Deduction for domestic production activities		-		(1.7)		(1.2)
Utilization of foreign tax credits		(2.4)		(3.9)		(4.0)
US and Foreign Tax Reform		-		-		66.7
Change in uncertain tax positions		(2.6)		(0.8)		0.2
Adjustment made by taxing authorities		-		3.3		-
Adjustment of prior year balances		-		1.7		1.4
Other, net		(1.9)		1.0		1.8
Effective tax rate		23.2%		28.1%		97.4%

At

March 31, 2018,

certain of our foreign subsidiaries in Brazil, France, Germany, Israel, Japan, and Korea had tax net operating loss carry forwards totaling approximately

$206,212

of which most had

no

expiration date. There is a greater likelihood of

not

realizing the future tax benefits of these net operating losses and other deductible temporary differences in Brazil, Israel, China, and Korea since these losses and other deductible temporary differences must be used to offset future taxable income of those subsidiaries, which cannot be assured, and are

not

available to offset taxable income of other subsidiaries located in those countries. Accordingly, we have recorded valuation allowances related to the net deferred tax assets in these jurisdictions. Valuation allowances decreased $(

1,173

), $(

12,101

), and increased

$317

during the years ended

March 31, 2016,

2017,

and

2018,

respectively, as a result of changes in the net operating losses of the subsidiaries or as a result of changes in foreign currency exchange rates in the countries mentioned above.

The decrease in valuation allowance during the year ended

March 31, 2017

was also due to the reversal of valuation allowances of

$5,530

related to the future utilization of NOLs totaling

$15,878

at a Japanese subsidiary. The related tax benefits upon utilization of the Japanese NOLs expire

eight

years after they are generated, and they are

not

subject to annual utilization limitations. The realization of tax benefits due to the utilization of these NOLs could take an extended period of time to realize and are dependent upon the Japanese subsidiary’s continuing profitability, and some could expire prior to utilization.

Income taxes paid totaled

$22,919,

$55,642

and

$66,354

during the years ended

March 31, 2016,

2017

and

2018,

respectively.

We do

not

expect that the balances with respect to our uncertain tax positions will significantly increase or decrease within the next

12

months. For our more significant locations, we are subject to income tax examinations for the tax years

2014

and forward in the United States,

2014

and forward in Germany,

2012

and forward in Hong Kong, and

2012

and forward in the United Kingdom.

A reconciliation of the beginning and ending balance for liabilities associated with uncertain tax positions is as follows:

Balance at March 31, 2015	$	6,776
Additions for tax positions of prior years		10
Additions for tax positions in current period		228
Reductions for tax positions of prior years		(30	)
Reductions due to expiration of statutory periods		(3,585	)
Balance at March 31, 2016	$	3,399
Reductions for tax positions of prior years		(89	)
Reductions due to expiration of statutory periods		(895	)
Reductions due to settlements with taxing authorities		(478	)
Balance at March 31, 2017	$	1,937
Additions for tax positions of prior years		948
Additions for tax positions in current period		642
Reductions due to expiration of statutory periods		(317	)
Balance at March 31, 2018	$	3,210

We recognize interest and penalties related to uncertain tax positions in interest expense. As of

March 31, 2017

and

2018,

we had accrued interest related to uncertain tax positions of

$340

and

$470,

respectively. During the year ended

March 31, 2017

and

2018,

we recognized a $(

195

) reduction in interest expense mainly due to the expirations of statutory periods and a

$71

increase in interest expense mainly due to the Ethertronics acquisition.

The amount of unrecognized tax benefits recorded on our balance sheet that, if recognized, would affect the effective tax rate is approximately

$1,937

and

$3,210

at

March 31, 2017

and

2018,

respectively. This amount excludes the accrual for estimated interest discussed above.

XML

Note 10 - Acquisitions

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Business Combination Disclosure [Text Block]

10.

Acquisitions:

On

October 2, 2017,

AVX acquired the AB Electronics sensing and control business from TT Electronics, PLC, for

$162,038,

net of cash acquired. Now named Sensing and Control (“S&C”) and consolidated within our Interconnect, Sensing and Control Devices segment (formerly AVX Interconnect) for financial reporting purposes, the acquisition enhances AVX’s position in the automotive business and provides further opportunities for expansion and growth. Goodwill associated with the acquisition has been allocated to the Interconnect, Sensing and Control Devices reporting unit.

We have used the acquisition method of accounting to record the transaction in accordance with FASB Accounting Standards Codification Topic

805,

“Business Combinations.” In accordance with the acquisition method, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values with the excess being allocated to goodwill. Factors that contributed to the recognition of goodwill include expected synergies and the trained workforce. The goodwill is

not

deductible for tax purposes.

As of

March 31, 2018,

the allocation of the purchase price was prepared based on estimates of fair values, as shown in the table below. The results of operations for S&C since the acquisition date are included in the accompanying consolidated statement of operations.

Assets Acquired and Liabilities Assumed	Allocation of Purchase Price
Accounts receivable	$	61,483
Inventory		42,443
Accounts payable and accrued liabilities		(67,343	)
Other current assets and liabilities, net		9,250
Working capital		45,833
Property and equipment		85,794
Intangible assets		18,168
Other non-current assets and liabilities, net		(13,806	)
Total identified assets and liabilities		135,989
Purchase price		162,038
Goodwill	$	26,049

We recorded approximately

$18,168

of identifiable intangible assets and

$26,049

of Goodwill as indicated above. The acquired intangible assets relate to the S&C trade name, existing technology and customer relationships which are being amortized over one, eleven, and

six

years respectively.  In the quarter ended

March 31, 2018 

goodwill increased by

$9,691.

The unaudited pro forma combined financial information is provided for the

twelve

month periods ended

2018

as though S&C had been acquired as of

April 1, 2016.

These unaudited pro forma combined results of revenues have been prepared by adjusting our historical results to include the historical results of S&C based on information available. Unaudited pro forma net sales for the

twelve

month periods ended

March 31, 2017

and

2018

would be

$1,633,626

and

$1,736,425,

respectively. We recognized revenue of

$193,326

from S&C in fiscal

2018.

On

January 31, 2018,

AVX acquired Ethertronics, Inc. for

$128,242

net of cash and debt acquired. Now named AVX Antenna and consolidated with our Electronic Components segment. The purchase of Ethertronics expands AVX’s extensive electronic product offering into the antenna technology market and will provide new and exciting growth opportunities for AVX going forward.

The Company has used the acquisition method of accounting to record the transaction in accordance with FASB Accounting Standards Codification Topic

805,

“Business Combinations.” In accordance with the acquisition method, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values with the excess being allocated to goodwill. Factors that contributed to the recognition of goodwill include expected synergies and the trained workforce. The goodwill is

not

deductible for tax purposes.

As of

March 31, 2018,

the allocation of the purchase price was prepared based on estimates of fair values, as shown in the table below. The results of operations for AVX Antenna since the acquisition date are included in the accompanying consolidated statement of operations.

Assets Acquired and Liabilities Assumed	Allocation of Purchase Price
Accounts receivable	$	16,350
Accounts payable		(10,141	)
Other current assets and liabilities, net		2,868
Working capital		9,077
Debt		(21,105	)
Property and equipment		13,760
Intangible assets		64,800
Other non-current assets and liabilities, net		(13,763	)
Total identified assets and liabilities		52,769
Purchase price		128,242
Goodwill	$	75,473

We recorded approximately

$64,800

of identifiable intangible assets and

$75,473

of Goodwill as indicated above. The acquired intangible assets relate to the AVX Antenna trade name, existing technology and customer relationships which are being amortized over ten, ten, and

thirteen

years, respectively. We recognized revenue of

$12,740

from AVX Antenna in fiscal

2018.

Our estimates of fair value and resulting purchase price allocations related to our fiscal

2018

acquisitions are preliminary. We are in the process of finalizing the valuations. The final allocation of the purchase price

may

differ from the information presented in these Consolidated Financial Statements.

XML

Note 11 - Employee Retirement Plans

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

1

1

. Employee Retirement Plans:

 

Pension Plans:

We sponsor various defined benefit pension plans covering certain employees. Pension benefits provided to certain U.S. employees covered under collective bargaining agreements are based on a flat benefit formula. Effective

December 31, 1995,

we froze benefit accruals under our domestic non-contributory defined benefit pension plan for a significant portion of the employees covered under collective bargaining agreements. Our pension plans for certain international employees provide for benefits based on a percentage of final pay. Our funding policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws.

We recognize the overfunded or underfunded status of our defined benefit post-retirement plans as an asset or liability in our statement of financial position and recognize changes in that funded status in the year in which the changes occur through comprehensive income. The adjustment to our pension liability due to the change in the funded status of our plans resulted in an increase in recorded net pension liabilities by

$1,069

during the fiscal year ended

March 31, 2017,

and an increase in recorded net pension assets by

$21,016

 during the fiscal year ended

March 31, 2018.

The change in the benefit obligation and plan assets of the U.S. and international defined benefit plans for

2017

and

2018

were as follows:

	Fiscal Year Ended March 31,
	U.S. Plans						International Plans
	2017			2018			2017			2018
Change in benefit obligation:
Benefit obligation at beginning of year	$	42,980		$	38,625		$	156,617		$	169,921
Service cost		168			131			902			959
Interest cost		1,457			1,408			4,310			4,383
Plan participants' contributions		-			-			7			-
Actuarial loss (gain)		(2,443	)		(633	)		32,882			(11,077	)
Benefits paid		(3,537	)		(3,297	)		(6,029	)		(8,420	)
Foreign currency exchange rate changes		-			-			(18,768	)		22,732
Benefit obligation at end of year	$	38,625		$	36,234		$	169,921		$	178,498
Change in plan assets:
Fair value of plan assets at beginning of year	$	34,125		$	36,689		$	156,410		$	161,726
Actual return (loss) on assets		3,100			2,355			24,432			8,121
Employer contributions		3,001			261			6,934			7,761
Plan participants' contributions		-			-			7			-
Benefits paid		(3,537	)		(3,298	)		(6,029	)		(7,702	)
Foreign currency exchange rate changes		-			-			(20,028	)		21,756
Fair value of plan assets at end of year		36,689			36,007			161,726			191,662
Funded status	$	(1,936	)	$	(227	)	$	(8,195	)	$	13,164

The combined accumulated benefit obligation at

March 31, 2017

and

2018

was

$208,546

and

$214,732

respectively.

At

March 31, 2018,

the accumulated benefit obligation exceeded the fair value of the assets for all of the U.S. defined benefit plans and all but

one

of the international defined benefit plans.

Our assumptions used in determining the pension assets and liabilities were as follows:

	As of March 31,
	2017			2018
Assumptions:
Discount rates	0.1	-	3.8%	0.3	-	3.8%
Increase in compensation		-			-

The following table shows changes in accumulated comprehensive income, excluding the effect of income taxes, related to amounts recognized in other comprehensive income during fiscal

2017

and

2018

and amounts reclassified to the statement of operations as a component of net periodic pension cost during fiscal

2017

and

2018.

	Fiscal Year Ended March 31,
	U.S. Plans						International Plans
	2017			2018			2017			2018
Beginning balance	$	17,909		$	12,323		$	38,189		$	46,201
Net loss (gain) incurred during the year		(3,762	)		(1,187	)		14,248			(13,766	)
Amortization of net actuarial loss		(1,824	)		(1,143	)		(1,241	)		(1,974	)
Foreign currency exchange rate changes		-			-			(4,995	)		6,420
Ending Balance	$	12,323		$	9,993		$	46,201		$	36,881

Amounts that have

not

yet been recognized as components of net periodic pension cost as a component of accumulated comprehensive income (loss) at

March 31, 2017

and

2018

are as follows:

	Fiscal Year Ended March 31,
	U.S. Plans				International Plans
	2017 (1)		2018 (2)		2017 (1)		2018 (2)
Unrecognized net actuarial loss	$	7,895	$	7,792	$	36,549	$	29,487
Unamortized prior service cost		-		-		-		-
Total	$	7,895	$	7,792	$	36,549	$	29,487

(

1

) Amounts in the above table as of

March 31, 2017

are net of

$4,428

and

$9,652

tax benefit for the U.S. and International Plans, respectively.

(

2

) Amounts in the above table as of

March 31, 2018

are net of

$2,201

and

$7,394

tax benefit for the U.S. and International Plans, respectively.

The

March 31, 2018

balance of unrecognized net actuarial losses expected to be amortized in fiscal

2018

is

$917

for the U.S. Plans and

$1,317

for the International Plans, respectively.

Net pension cost related to these pension plans includes the following components:

	Fiscal Year Ended March 31,
	2016			2017			2018
Service cost	$	1,177		$	1,102		$	1,038
Interest cost		6,939			5,997			5,516
Expected return on plan assets		(8,677	)		(7,579	)		(7,231	)
Recognized actuarial loss		3,740			3,142			3,130
Net periodic pension cost	$	3,179		$	2,662		$	2,453

Our assumptions used in determining the net periodic pension expense were as follows:

	As of March 31,
	2016			2017			2018
Assumptions:
Discount rates	0.5%	-	3.6%	0.1%	-	3.6%	0.3	-	3.8%
Increase in compensation		3.4%			3.4%			0.0%
Expected long-term rate of return on plan assets	1.4%	-	7.3%	1.4%	-	4.2%	1.4	-	3.3%

The pension expense is calculated based upon a number of actuarial assumptions established annually for each plan year, detailed in the table above, including discount rate, rate of increase in future compensation levels, and expected long-term rate of return on plan assets. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s measurement date and determine a level equivalent yield that

may

be unique to each plan. On that basis, the range of discount rates remained constant from

March 31, 2017

to

March 31, 2018.

The fair value of pension assets at

March 31, 2017

and

2018

was determined using:

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:
Cash	$	166	$	166	$	-	$	-
Pooled Separate Accounts		29,046		-		29,046		-
Guaranteed Interest Account		7,477		-		7,477		-
International Defined Benefit Plan Assets:
Cash		608		608		-		-
Depository Account		7,897		7,897		-		-
Pooled Separate Accounts		153,222		-		153,222		-
Total	$	198,416	$	8,671	$	189,745	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:
Cash	$	170	$	170	$	-	$	-
Pooled Separate Accounts		28,071		-		28,071		-
Guaranteed Interest Account		7,766		-		7,766		-
International Defined Benefit Plan Assets:
Cash		480		480		-		-
Depository Account		8,664		8,664		-		-
Pooled Separate Accounts		182,518		-		182,518		-
Total	$	227,669	$	9,314	$	218,355	$	-

Assets valued using Level

1

inputs in the table above are cash and an interest-bearing depository account.

Assets valued using Level

2

inputs in the table above are investments held in pooled separate accounts and a guaranteed deposit account. See discussion in the “Valuation of Investments” section below.

Valuation of Investments

Our investments are held in a Depository Account, Pooled Separate Accounts, and a Guaranteed Deposit Account. Assets held in the Depository Account are cash and cash equivalents. Investments held in the Pooled Separate Accounts are based on the fair value of the underlying securities within the fund, which represent the net asset value, a practical expedient to fair value, of the units held by the pension plan at year-end. Those assets held in the Guaranteed Deposit Account are valued at the contract value of the account, which approximates fair value. The contract value represents contributions plus accumulated interest at the contract rate, less benefits paid to participants, contract administration fees, and other direct expenses.

The expected long-term rate of return on plan assets assumption is based upon actual historical returns and future expectations for returns for each asset class. These expected results were adjusted for payment of reasonable expenses from plan assets. Our long-term strategy is for target allocation of

50%

equity and

50%

fixed income for our U.S. defined benefit plans and

45%

equity and

55%

fixed income for our international defined benefit plans.

Our pension plans’ weighted average asset allocations at

March 31, 2017

and

2018,

by asset category are as follows:

	As of March 31, 2017				As of March 31, 2018
Asset Category	U.S. Plans		International Plans		U.S. Plans		International Plans
Equity securities		59%		38%		57%		33%
Debt securities		20%		57%		22%		62%
Other		21%		5%		21%		5%
Total		100%		100%		100%		100%

We make contributions to our defined benefit plans as required under various pension funding regulations. We expect to make contributions of approximately

$6,571

to the international plans in fiscal

2019

based on current actuarial computations.

Estimated future benefit payments are as follows:

Fiscal Year ended March 31,	U.S. Plans		International Plans
2019	$	2,235	$	7,545
2020		2,287		7,684
2021		2,361		7,832
2022		2,413		7,975
2023		2,468		8,122
2024-2028		12,706		42,895

Savings Plans:

We sponsor retirement savings plans, which allow eligible employees to defer part of their annual compensation. Certain contributions by us are discretionary and are determined by our Board of Directors each year. Our contributions to the savings plans in the United States for the fiscal years ended

March 31, 2016,

2017

and

2018

were approximately

$4,222,

$4,367,

and

$4,421,

respectively.

We also sponsor a nonqualified deferred compensation program, which permits certain employees to annually elect to defer a portion of their compensation until retirement. A portion of the deferral is subject to a matching contribution by us. The employees select among various investment alternatives, which are the same as are available under the retirement savings plans, with the investments held in a separate trust. The value of the participants’ balances fluctuate based on the performance of the investments. The market value of the trust at

March 31, 2017

and

2018

of

$6,082

and

$6,649,

respectively, is included as an asset and a liability in our accompanying balance sheet because the trust’s assets are both assets of the Company and a liability as they are available to general creditors in certain circumstances.

XML

Note 12 - Stock-based Compensation

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

1

2

. Stock-Based Compensation:

Under the

2014

RSU Plan, we

may

grant restricted stock units of up to an aggregate of

3,000

units. Each unit converts to

one

share of the Company’s stock at the time of vesting. The fair value of RSU awards is determined at the closing market price of the Company’s common stock at the date of grant. For the years ended

March 31, 2017

and

2018,

there were

266

and

292

awards, respectively, granted from this plan. Restricted stock activity during the year ended

2018

is as follows:

	March 31, 2018
	Number of Shares			Weighted-Average Grant Date Fair Value per Share
Non-vested at March 31, 2017		259			13.36
Granted		292			16.93
Vested		(101	)		13.36
Cancelled and forfeited		(92	)		13.36
Non-vested at March 31, 2018		358			16.27

Performance-based awards vest

one

year after the grant date. Service-based awards vest as to

one

-

third

annually with the requisite service periods beginning on the grant date. Awards are amortized over their respective grade-vesting periods. The total unrecognized compensation costs related to unvested stock awards expected to be recognized over the vesting period, approximately

three

years, was

$1,132

at

March 31, 2018.

We have

four

fixed stock option plans. Under the

2004

Stock Option Plan, as amended, we

may

grant options to employees for the purchase of up to an aggregate of

10,000

shares of common stock. Under the

2004

Non-Employee Directors’ Stock Option Plan, as amended, we

may

grant options for the purchase of up to an aggregate of

1,000

shares of common stock.

No

awards were made under these

two

plans after

August 1, 2013.

Under the

2014

Stock Option Plan, we can grant options to employees for the purchase of up to an aggregate of

10,000

shares of common stock. Under the

2014

Non-Employee Directors’ Stock Option Plan, as amended, we can grant options to our directors for the purchase of up to an aggregate of

1,000

shares of common stock. Under all plans, the exercise price of each option shall

not

be less than the market price of our stock on the date of grant and an option’s maximum term is

10

years. Options granted under the

2004

Stock Option Plan and the

2014

Stock Option Plan vest as to

25%

annually and options granted under the

2004

Non-Employee Directors’ Stock Option Plan and the

2014

Non-Employee Director’s Stock Option Plan vest as to

one

-

third

annually. Requisite service periods related to all plans begin on the grant date. As of

March 31, 2018,

there were

12,574

shares of common stock available for future issuance under all of the plans, consisting of options available to be granted and options currently outstanding.

Activity under our stock option plans is summarized as follows:

	Number of Shares			Average Price (a)		Average Life (years) (b)		Aggregate Intrinsic Value
Outstanding at March 31, 2017		2,719		$	13.65		-		-
Options granted		-			-		-		-
Options exercised		(433	)		13.38		-	$	1,724
Options cancelled/forfeited		(392	)		17.67		-		55
Outstanding at March 31, 2018		1,894		$	12.90		4.12	$	6,912
Exercisable at March 31, 2018		1,601		$	12.66		3.64	$	6,224

(a) Weighted-average exercise price

(b) Weighted-average contractual life remaining

The total aggregate intrinsic value of options exercised is

$170,

$2,149,

and

$1,724

for fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

Unvested share activity under our stock option plans for the year ended

March 31, 2018

is summarized as follows:

	Number of Shares			Weighted Average Grant- Date Fair Value
Unvested balance at March 31, 2017		608		$	2.52
Options granted		-			-
Options cancelled/forfeited		(14	)		2.58
Options vested		(301	)		2.47
Unvested balance at March 31, 2018		293		$	2.57

The total unrecognized compensation costs related to unvested option awards expected to be recognized over the vesting period, approximately

four

years, was

$984

and

$59

as of

March 31, 2017

and

2018,

respectively. The total aggregate fair value of options vested is

$951,

$994,

and

$747

for fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

The weighted average estimated fair value of our stock options granted at grant date market prices was

$2.49,

$2.52,

and

$2.57

per option during fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively. The consolidated statement of operations includes

$2,224,

net of

$1,183

 of tax benefit, in stock-based compensation expense for fiscal

2018.

Our weighted average fair value is estimated at the date of grant using a Black-Scholes-Merton option-pricing model. We estimated volatility by considering our historical stock volatility. We calculated the dividend yield based on historical dividends paid. We have estimated forfeitures in determining the weighted average fair value calculation. The forfeiture rate used for the fiscal year ended

March 31, 2018

was

0%.

No

stock options were granted during fiscal

2018.

 

XML

Note 13 - Commitments and Contingencies

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

1

3

. Commitments and Contingencies:

We are a lessee under long-term operating leases primarily for office space, warehouse, plant and equipment. Future minimum lease commitments under non-cancelable operating leases as of

March 31, 2018,

were as follows:

Fiscal Year ended March 31, 2018
2019	$	6,803
2020		4,844
2021		3,398
2022		2,340
2023		1,943
Thereafter		2,277

Rental expense for operating leases was

$6,352,

$5,919,

and

$7,374

for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

Occasionally we enter into delivery contracts with selected suppliers for certain metals used in our production processes. The delivery contracts represent routine purchase orders for delivery within

three

months and payment is due upon receipt. As of

March 31, 2018,

we had

no

significant outstanding purchase commitments.

We have been identified by the United States Environmental Protection Agency (“EPA”), state governmental agencies or other private parties as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), or equivalent state or local laws, for clean-up and response costs associated with certain sites at which remediation is required with respect to prior contamination. Because CERCLA or such state statutes authorize joint and several liability, the EPA or state regulatory authorities could seek to recover all clean-up costs from any

one

of the PRPs at a site despite the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and other PRPs.

To resolve our liability at the sites at which we have been named a PRP, we have entered into various administrative orders and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. As is customary, the orders and decrees regarding sites where the PRPs are

not

themselves implementing the chosen remedy contain provisions allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur, such as the discovery of significant new information about site conditions.

On

June 3, 2010,

AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford, Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New Bedford with respect to the satisfaction of AVX’s federal law requirements. The Massachusetts Department of Environmental Protection has jurisdiction over the balance of the environmental remediation at the Site. AVX has submitted its proposed remedy, but until the state has approved such proposal, AVX cannot determine if additional groundwater and soil remediation will be required, if substantial material will have to be disposed of offsite, or if additional remediation techniques will be required, any of which could result in a more extensive and costly plan of remediation. Further, the Site and the remediation

may

be subject to additional scrutiny under other statutory procedures which could also add to the cost of remediation. We have a remaining accrual of

$14,150

at

March 31, 2018,

representing our current estimate of the potential liability related to the remaining performance of environmental remediation actions at the Site and neighboring properties using certain assumptions regarding the plan of remediation. Until all parties agree and remediation is complete, we cannot be certain there will be

no

additional cost relating to the Site.

We had total reserves of approximately

$19,181

and

$18,618

at

March 31, 2017

and

March 31, 2018,

respectively, related to various environmental matters and sites, including those discussed above. These reserves are classified in the Consolidated Balance Sheets as

$3,892

and

$3,329

in accrued expenses at

March 31, 2017

and

March 31, 2018,

respectively, and

$15,289

in other non-current liabilities at both

March 31, 2017

and

March 31, 2018.

The amounts recorded for identified environmental liabilities are based on estimates. Periodically, we review amounts recorded and adjust them to reflect additional legal and technical information that becomes available. Uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could differ from our current estimates.

On

April 19, 2016,

the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order naming AVX Corporation, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at

one

time the site of operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. This Director’s Order follows a draft order issued on

November 4, 2015.

AVX has taken the position that any liability of Aerovox Canada for such site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek to enforce such Canadian order against AVX, and whether, in the event it does so, AVX will have any liability under applicable law. AVX intends to contest any such course of action that

may

be taken by the MoE.

We also operate, or did at

one

time, on other sites that

may

have potential future environmental issues as a result of activities at sites during AVX’s long history of manufacturing operations or prior to the start of operations by AVX. Even though we

may

have rights of indemnity for such environmental matters at certain sites, regulatory agencies in those jurisdictions

may

require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. A separate account receivable is recorded for any indemnified costs. Our environmental reserves are

not

discounted and do

not

reflect any possible future insurance recoveries, which are

not

expected to be significant, but do reflect a reasonable estimate of cost sharing at multiple party sites or indemnification of our liability by a

third

party.

We are

not

involved in any pending or threatened environmental proceedings that would require curtailment of our operations. We continually expend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in compliance with applicable environmental laws, we cannot accurately predict future developments and do

not

necessarily have knowledge of all past occurrences on sites that we currently occupy. New environmental regulations

may

be enacted and we cannot determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be

no

assurance that material environmental costs, including remediation costs, will

not

arise in the future.

On

April 25, 2013,

AVX was named as a defendant in a patent infringement case filed in the United States District Court for the District of Delaware captioned

Greatbatch, Inc. v. AVX Corporation

. This case alleged that certain AVX products infringe on

one

or more of

six

Greatbatch patents. On

January 26, 2016,

the jury returned a verdict in favor of the plaintiff in the

first

phase of a segmented trial and a mixed verdict in the

second

phase of a segmented trial, and found damages to Greatbatch in the amount of

$37,500,

which was recorded in fiscal

2016.

  That verdict was later vacated by the court on

March 30, 2018. 

Profit from operations for the year ended

March 31, 2018

reflects a favorable accrual adjustment of

$1,500

 related to this patent infringement case.  The amount of damages will be subject to further legal proceedings including a potential trial on damages, which we expect to occur in fiscal

2019.

On

September 2, 2014,

a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent infringement case filed in the United States District Court of the Southern District of California captioned

Presidio Components, Inc. v. American Technical Ceramics Corp.

This case alleged that certain ATC products infringe on a Presidio patent. On

April 18, 2016,

the jury returned a verdict in favor of the plaintiff and found damages to Presidio. On

August 17, 2016,

the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after

November 16, 2016.

Subsequently, on

October 21, 2016,

the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction whereby ATC was allowed to continue to sell the disputed product until

March 17, 2017

to anyone who was a customer prior to

June 17, 2016.

Any sales subsequent to

November 16, 2016

pursuant to the stay of the permanent injunction were subject to court mandated intellectual property damages for each product sold. In

December, 2017,

a panel of the Federal Circuit vacated the damage award to Presidio, vacated the injunction, and remanded the case for further proceedings to determine damages limited to “reasonable royalties” and to reconsider the requested injunction in light of its opinion and any additional facts.

As of

March 31, 2018,

we had total reserves of

$76,502

 plus accrued interest in accrued expenses with respect to the

two

intellectual property cases discussed above. The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to reflect additional information that becomes available. Accordingly, these costs could differ from our current estimates.

During calendar year

2014,

AVX was named as a co-defendant in a series of cases filed in the United States and in the Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States, state and Canadian antitrust laws asserting that AVX and numerous other companies were participants in alleged price-fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on

October 2, 2014.

Some plaintiffs have broken off from the United States class action and filed actions on their own, although AVX is

not

named in all of these independent actions. The cases in Canada have

not

been consolidated. These cases are still in progress. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot predict the outcome of these other disputes and proceedings, we believe, based upon a review with legal counsel, that

none

of these other disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss), or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that

may

arise and their potential impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

XML

Note 14 - Derivative Financial Instruments

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

1

4

. Derivative Financial Instruments:

We are exposed to foreign currency exchange rate fluctuations in the normal course of business. We use derivative instruments (forward contracts) to hedge certain foreign currency exposures as part of our risk management strategy. The objective is to offset gains and losses resulting from these exposures with gains and losses on the forward contracts used to hedge them, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. We do

not

enter into any trading or speculative positions with regard to derivative instruments.

We primarily use forward contracts, with maturities less than

four

months, to protect against the foreign currency exchange rate risks inherent in our forecasted transactions related to purchase commitments and sales, denominated in various currencies. These derivative instruments are designated and qualify as cash flow hedges.

The effectiveness of the cash flow hedges is determined by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the hedged transaction, both of which are based on forward rates. The effective portion of the gain or loss on these cash flow hedges is initially recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Once the hedged transaction is recognized, the gain or loss is recognized in our statement of operations. At

March 31, 2017

and

2018,

respectively, we had the following forward contracts that were entered into to hedge against the volatility of foreign currency exchange rates for certain forecasted sales and purchases.

March 31, 2017	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	1,151	Accrued expenses	$	690

March 31, 2018	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	212	Accrued expenses	$	377

For these derivatives designated as cash flow hedging instruments, during fiscal

2016,

2017,

and

2018,

net pre-tax gains (losses) of

$40,

$1,095,

and $(

5

), respectively, were recognized in other comprehensive income (loss). In addition, during fiscal

2016,

2017,

and

2018,

net pretax gains (losses) of $(

773

),

$3,355,

and

$1,807,

respectively, were reclassified from accumulated other comprehensive income (loss) into cost of sales (for hedging purchases), and net pre-tax gains of

$807,

$1,710

and $ (

2,264

), respectively, were reclassified from accumulated other comprehensive income (loss) into sales (for hedging sales) in the accompanying statement of operations.

Derivatives

not

designated as cash flow hedging instruments consist primarily of forwards used to hedge foreign currency balance sheet exposures. These hedging instruments are used to offset foreign currency changes in the fair values of the underlying assets and liabilities. The gains and losses on these foreign currency forward contracts are recognized in other income and expense in the same period as the remeasurement gains and losses of the related foreign currency denominated assets and liabilities and thus naturally offset these gains and losses. At

March 31, 2017

and

2018,

we had the following forward contracts that were entered into to hedge against these exposures.

March 31, 2017	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	341	Accrued expenses	$	196

March 31, 2018	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	45	Accrued expenses	$	137

For these derivatives

not

designated as cash flow hedging instruments during fiscal

2016,

2017,

and

2018,

gains/(losses) of $(

818

),

$460,

and $(

791

), respectively, were recognized in other expense, which partially offset the

$1,231,

$(

2,059

) and $(

2,289

) in exchange gains/(losses), respectively, that were recognized in other income in the accompanying statement of operations.

At

March 31, 2017

and

2018,

we had outstanding foreign exchange contracts with notional amounts totaling

$193,156

and

$156,238,

respectively, denominated primarily in Euros, Czech Korunas, British Pounds, and Japanese Yen.

XML

Note 15 - Transactions With Affiliate

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

1

5

. Transactions With Affiliate:

Our business includes certain transactions with our majority shareholder, Kyocera, that are governed by agreements between the parties that define the sales terms, including pricing for the products. The nature and amounts of transactions with Kyocera are included in the table below.

	Fiscal Year Ended March 31,
	2016		2017		2018
Sales:
Product and equipment sales to affiliates	$	22,230	$	30,303	$	26,069
Purchases:
Purchases of resale inventories, raw materials, supplies, equipment, and services		233,637		303,793		256,660
Other:
Dividends paid		51,156		52,983		54,810

     Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement in

December 2016

of its intent, effective

January 1, 2018,

to market its manufactured electronic and interconnect products globally using Kyocera’s sales force rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Sales of Kyocera resale products by AVX were

$296,316

and related operating profit was

$18,177

for the fiscal year ended

March 31, 2018.

     AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement in

February 2017

of its intent, effective

April 1, 2018,

to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera resell such products in this territory. Sales of AVX resale products by Kyocera were

$21,892

 for the fiscal year ended

March 31, 2018.

XML

Note 16 - Segment and Geographic Information

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

1

6

. Segment and Geographic Information:

Our operating segments are based on the types of products from which we generate revenues. We are organized by product lines with

five

main product groups and

three

reportable segments: Electronic Components, Interconnect, Sensing and Control Devices, and KED Resale. The product groups of Ceramic, Advanced, and Tantalum have been aggregated into the Electronic Components reportable segment in accordance with the aggregation criteria and quantitative thresholds. The aggregation criteria consist of similar economic characteristics, products and services, production processes, customer classes, and distribution channels. The Electronic Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick and thin film components, surface mount and leaded tantalum capacitors, surface mount and leaded film capacitors, ceramic and film power capacitors, super capacitors, EMI filters (bolt in and surface mount), thick and thin film packages of multiple electronic integrated components, varistors, thermistors, inductors, and resistive products manufactured by us or purchased from other manufacturers for resale. The Interconnect, Sensing and Control Devices segment consists primarily of automotive sensing and control devices and automotive, telecom, and memory connectors manufactured by or for AVX. The KED Resale segment consists primarily of ceramic capacitors, frequency control devices, SAW devices, sensor products, RF modules, actuators, acoustic devices, and connectors produced by Kyocera and resold by AVX. Sales and operating results from these reportable segments are shown in the tables below. In addition, we have a corporate administration group consisting of finance, legal, environmental, health & safety (“EH&S”), and administrative activities.

We evaluate performance of our segments based upon sales and operating profit. There are

no

intersegment revenues. We allocate the costs of shared resources between segments based on each segment’s usage of the shared resources. Cash, accounts receivable, investments in securities, and certain other assets, which are centrally managed, are

not

readily allocable to operating segments.

The tables below present information about reported segments:

	Fiscal Year Ended March 31,
Sales revenue (in thousands)	2016		2017		2018
Ceramic Components	$	176,502	$	188,568	$	226,204
Tantalum Components		311,888		314,723		366,194
Advanced Components		333,693		372,279		346,459
Total Electronic Components		822,083		875,570		938,857
Interconnect, Sensing and Control Devices		111,609		118,163		327,301
KCP Resale Connectors		23,751		30,027		36,090
KDP and KCD Resale		238,086		288,901		260,226
Total KED Resale		261,837		318,928		296,316
Total Revenue	$	1,195,529	$	1,312,661	$	1,562,474

	Fiscal Year Ended March 31,
	2016			2017			2018
Operating profit (loss):
Electronic Components	$	198,268		$	190,007		$	204,624
Interconnect, Sensing and Control Devices		19,954			16,437			17,802
KED Resale		16,764			17,076			18,177
Corporate activities		(111,002	)		(59,963	)		(60,769	)
Total	$	123,984		$	163,557		$	179,834

	Fiscal Year Ended March 31,
	2016		2017		2018
Depreciation and amortization:
Electronic Components	$	28,460	$	27,543	$	32,024
Interconnect, Sensing and Control Devices		5,300		5,093		17,088
KED Resale		83		16		22
Corporate activities		5,108		10,035		10,654
Total	$	38,951	$	42,687	$	59,788

	As of March 31,
	2017		2018
Assets:
Electronic Components	$	573,519	$	613,385
Interconnect, Sensing and Control Devices		56,295		241,959
KED Resale		35,164		18,629
Cash, A/R, and investments in securities		1,294,129		1,111,716
Goodwill - Electronic Components		202,774		278,247
Goodwill - Interconnect, Sensing and Control Devices		10,277		38,051
Corporate activities		305,255		370,779
Total	$	2,477,413	$	2,672,766

	Fiscal Year Ended March 31,
	2016		2017		2018
Capital expenditures:
Electronic Components	$	36,400	$	50,982	$	61,581
Interconnect, Sensing and Control Devices		9,237		14,054		38,040
KED Resale		29		1		-
Corporate activities		2,437		1,251		916
Total	$	48,103	$	66,288	$	100,537

During the fiscal years ended

March 31, 2018

and

March 31, 2017,

no

customers accounted for more than

10%

of our sales. As of

March 31, 2018,

no

customer represented more than

10%

of our accounts receivable balance. As of

March 31, 2017,

one

customer represented

12%

of our accounts receivable balance.

The following geographic data is based upon net sales generated by operations located within that geographic area and the physical location of long-lived assets. Substantially all of the sales in the Americas region were generated in the United States.

	Fiscal Year Ended March 31,
	2016		2017		2018
Net sales:
Americas	$	358,372	$	381,695	$	399,963
Europe		339,768		352,064		581,255
Asia		497,389		578,902		581,256
Total	$	1,195,529	$	1,312,661	$	1,562,474
Property, plant and equipment, net:
Americas	$	91,674	$	110,235	$	134,656
Europe		77,619		77,981		191,727
Asia		48,705		51,735		91,903
Total	$	217,998	$	239,951	$	418,286

XML

Note 17 - Summary of Quarterly Financial Information (Unaudited)

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Quarterly Financial Information [Text Block]

1

7

. Summary of Quarterly Financial Information (Unaudited):

Quarterly financial information for the fiscal years ended

March 31, 2017

and

2018

is as follows:

	First Quarter				Second Quarter
	2017		2018		2017		2018
Net sales	$	314,823	$	331,354	$	327,461	$	352,693
Gross profit		69,863		73,846		61,799		77,273
Net income		29,889		31,484		26,520		34,818
Basic earnings per share		0.18		0.19		0.16		0.21
Diluted earnings per share		0.18		0.19		0.16		0.21

	Third Quarter					Fourth Quarter
	2017		2018			2017		2018
Net sales	$	340,799	$	431,795		$	329,578	$	446,632
Gross profit		79,391		82,103			73,702		85,640
Net income (loss)		35,519		(93,212	)		33,857		31,820
Basic earnings (loss) per share		0.21		(0.55	)		0.20		0.19
Diluted earnings (loss) per share		0.21		(0.55	)		0.20		0.19

XML

Note 18 - Subsequent Events

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Subsequent Events [Text Block]

1

8

. Subsequent Events

On

April 30, 2018,

AVX Corporation, through its subsidiary AVX Interconnect Europe GmbH, completed the purchase of KUMATEC Sondermaschinenbau & Kunststoffverarbeitung GmbH (“Kumatec”) for a consideration of approximately EUR

$12,500,

subject to customary post-closing adjustments. The purchase includes Kumatec’s

50%

interest in KUMATEC Hydrogen GmbH Co. KG which was recently spun out of Kumatec. For additional information about this transaction, see the Company’s Current Report on Form

8

-K, filed with the Securities and Exchange Commission on

April 30, 2018,

and Exhibit

10.19

found in Part IV, Item

15,

“Exhibits and Financial Statement Schedules” of this Form

10

-K.

XML

Significant Accounting Policies (Policies)

12 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

General:

AVX Corporation is a leading worldwide manufacturer, supplier and reseller of a broad line of electronic components and interconnect, sensing and control devices, and related products. The consolidated financial statements of AVX Corporation (“AVX” or “the Company”) include all accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated.

From

January 1990

through

August 15, 1995,

we were wholly owned by Kyocera Corporation (“Kyocera”). As of

March 31, 2018,

Kyocera owned approximately

72%

of our outstanding shares of common stock.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates:

The consolidated financial statements are prepared in accordance with generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. We base our estimates and judgments on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are

not

readily apparent from other sources. There can be

no

assurance that actual results will

not

differ from those estimates. On an ongoing basis, we evaluate our accounting policies and disclosure practices.

Cash Equivalents and Investment in Securities, Policy [Policy Text Block]

Cash Equivalents and Investments in Securities:

We consider all highly liquid investments purchased with an original maturity of

three

months (

90

days) or less to be cash equivalents.

Our short-term and long-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments are recorded as interest income.

Inventory, Policy [Policy Text Block]

Inventories:

       We determine the cost of raw materials, work in process, and finished goods inventories by the

first

-in,

first

-out (“FIFO”) method. Manufactured inventory costs include material, labor, and manufacturing overhead. Inventories are valued at the lower of cost or market (realizable value) and are valued at market value where there is evidence that the utility of goods will be less than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value. We review and adjust the carrying value of our inventories based on historical usage, customer forecasts received from marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts, and obsolescence and aging.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment:

Property and equipment are recorded at cost. Machinery and equipment are depreciated on the double-declining balance and straight-line methods. Buildings are depreciated on the straight-line method. The estimated useful lives used for computing depreciation are as follows: buildings and improvements –

10

to

31.5

years, machinery and equipment –

3

to

10

years. Depreciation expense was

$33,918,

$37,493

and

$50,813

for the fiscal years ended

March 31, 2016,

2017

and

2018,

respectively.

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of any such assets

may

not

be recoverable. If the sum of the undiscounted cash flows is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets.

The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in our results of operations.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Acquired Intangible Assets:

We do

not

amortize goodwill. We test goodwill for impairment annually or whenever conditions indicate that such impairment could exist. The carrying value of goodwill is evaluated in relation to the operating performance and estimated future discounted cash flows of the related reporting unit. If the sum of the discounted cash flows is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets. The estimate of cash flow is based upon, among other things, certain assumptions about expected future operating performance. Our annual goodwill impairment analysis indicated that there was

no

related impairment for the fiscal years ended

March 31, 2016,

2017,

or

2018.

We have determined that our intangible assets have finite useful lives. Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was

$5,033,

$5,194,

and

$9,006

for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

	March 31, 2017					March 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	$	51,000	$	(26,917	)	$	96,388	$	(30,819	)
Developed technology and other		14,521		(12,153	)		43,689		(13,816	)
Trade name and trademarks		34,000		(6,800	)		43,380		(10,210	)
Total		99,521		(45,870	)		183,457		(54,845	)

The estimated future annual amortization expense for intangible assets is as follows:

Fiscal Year ended March 31,	Estimated Amortization Expense
2019	$	13,421
2020		13,375
2021		13,077
2022		12,201
2023		12,040
Thereafter		64,498

Pension and Other Postretirement Plans, Policy [Policy Text Block]

Pension Assumptions:

Pension benefit obligations and the related effects on our results of operations are calculated using actuarial models. Two critical assumptions, discount rate and expected rate of return on plan assets, are important elements of plan expense and/or liability measurement. We evaluate these assumptions annually. The discount rate enables us to state expected future cash flows at a present value on the measurement date. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s measurement date and determine a level equivalent yield unique to each plan. A lower discount rate increases the present value of benefit obligations and increases pension expense. To determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. Other assumptions involve demographic factors such as retirement, mortality, and turnover. These assumptions are evaluated annually and are updated to reflect our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. In such cases, the differences between actual results and actuarial assumptions are amortized over future periods.

Income Tax, Policy [Policy Text Block]

Income Taxes:

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure together with assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that our deferred tax assets will be recoverable based on all available evidence, both positive and negative. To the extent we believe that recovery is

not

more likely than

not,

we establish a valuation allowance.

We have recorded valuation allowances due to uncertainties related to our ability to realize some of our deferred tax assets, primarily consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our estimates of future taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate countries where we have a valuation allowance on our deferred tax assets due to historical operating losses and when such positive evidence outweighs negative evidence we will release such valuation allowance as appropriate.

We also record a provision for certain international, federal, and state tax contingencies based on the likelihood of obligation, when needed. In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of taxes due. These challenges

may

result in adjustments of the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances

may

affect our ability to utilize tax benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposures have been sufficiently provided for in the consolidated financial statements. In the event that actual results differ from these estimates, we

may

need to adjust tax accounts and related payments, which could materially impact our financial condition and results of operations.

We account for uncertainty in income taxes recognized in our financial statements. We recognize in our financial statements the impact of a tax position, if that position would “more likely than

not”

be sustained on audit, based on the technical merits of the position. Accruals for estimated interest and penalties are recorded as a component of interest expense.

The Tax Cuts and Jobs Act (the "Act") was enacted into law in the U.S. on

December 22, 2017.

Among numerous other provisions, the Act reduced the statutory U.S. corporation income tax rate from

35%

to

21%,

effective

January 1, 2018.

This was the primary reason for a change in AVX's global tax rate estimate for the fiscal year ending

March 31, 2018,

resulting in a blended, estimated global tax rate of

27%

for fiscal

2018.

The Act also resulted in an estimated net decrease in the valuation of U.S. net current and deferred tax assets and liabilities of

$24.7

million. The Act reduced or eliminated certain corporate tax deductions and provided for a transition from a worldwide to a modified territorial tax system for resident corporations and related corporate group members accompanied by a

one

-time tax, effective

December 31, 2017,

on all U.S.-based corporate groups' accumulated foreign earnings as yet untaxed by the U.S. This

one

-time tax is assessed at a

15.5%

rate on all such earnings held in cash or liquid asset positions, and at an

8%

rate on all other non-liquid asset positions. This

one

-time tax was recorded in the results for the quarter ended

December 31, 2017,

and was approximately

$75.7

 million, which is payable in installments over an

eight

-year period beginning in

2018.

 Based on our interpretation of the Act, we made reasonable estimates to record provisional adjustments during fiscal

2018.

The Act also puts in place several new tax laws that are generally effective prospectively from

January 1, 2018,

including but

not

limited to: a base erosion and anti-abuse tax; elimination of U.S. federal taxes on substantially all dividends from foreign subsidiaries; a lower U.S. tax rate on certain revenues from sources outside the U.S.; and, implementation of a new provision to tax certain global intangible low-taxed income of foreign subsidiaries. We will continue to assess all of the other relevant aspects of the Act, including additional guidance under the Act, among other things which might impact our income tax provision.

In consideration of the Act, the Company has determined that it is

no

longer necessary to assert that cash and profits generated by our foreign subsidiaries will continue to be reinvested locally indefinitely. Accordingly, we provided for estimated foreign withholding taxes and associated foreign tax credits related to the potential distribution of such earnings. Therefore, in addition to the

one

-time tax noted above, we also provided for estimated foreign withholding taxes of approximately

$13.6

million related to the potentional distribution of such foreign earnings.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Activity:

Assets and liabilities of foreign subsidiaries, where functional currencies are their local currencies, are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments result from the process of translating foreign currency financial statements into U.S. dollars and are reported separately as a component of accumulated other comprehensive income (loss). Transaction gains and losses reflected in the functional currencies are reported in our results of operations at the time of the transaction.

Derivatives, Policy [Policy Text Block]

Derivative Financial Instruments:

Derivative instruments are reported on the consolidated balance sheets at their fair values. The accounting for changes in fair value depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. For instruments designated as accounting hedges, the effective portion of gains or losses is reported in other comprehensive income (loss) and is reclassified into the statement of operations in the same period during which the hedged transaction affects our results of operations. Any contracts that do

not

qualify as hedges, for accounting purposes, are marked to market with the resulting gains and losses recognized in other income or expense.

We use financial instruments such as forward exchange contracts to hedge a portion, but

not

all, of our firm commitments denominated in foreign currencies. The purpose of our foreign currency management is to minimize the effect of exchange rate changes on actual cash flows from foreign currency denominated transactions. See Note

14

for further discussion of derivative financial instruments.

Revenue Recognition and Accounts Receivable, Policy [Policy Text Block]

Revenue Recognition and Accounts Receivable:

All products are built to specification and tested by AVX or our suppliers for adherence to such specification before shipment to customers. We ship products to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenue when the sales process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is reasonably assured. We evaluate gross versus net presentation on revenues from products purchased and resold in accordance with the revenue recognition criteria outlined in FASB ASC

605

-

45,

Principal Agent Considerations. Based on the evaluation with our resale arrangements with Kyocera, including consideration of the primary indicators set forth in ASC

605

-

45

-

45,

we record revenue related to products purchased and resold on a gross basis. Estimates used in determining sales allowance programs described below are subject to the volatilities of the marketplace. This includes, but is

not

limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be

no

assurance that actual results will

not

differ from those estimates.

Accounts Receivable

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends and an evaluation of the impact of current and projected economic conditions. We evaluate the past-due status of trade receivables based on contractual terms of sale. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances

may

be required.

Returns

Sales revenue and cost of sales reported in the statement of operations are reduced to reflect estimated returns. We record an estimated sales allowance for returns at the time of sale based on historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. The amount accrued reflects the return of value of the customer’s inventory. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns. Our actual results have historically approximated our estimates. When the product is returned and verified, the customer is given credit against their accounts receivable.

Distribution Programs

A portion of our sales to independent electronic component distributor customers are subject to various distributor sales programs. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report distributor allowances in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we do

not

track the individual units that are recorded against specific products sold from distributor inventories, which would allow us to directly compare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold during that period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates for each program.

Distributor Stock Rotation Program

Stock rotation is a program whereby distributor customers are allowed to return for credit qualified inventory, semi-annually, equal to a certain percentage, primarily limited to

5%

of the previous

six

months net sales. We record an estimated sales allowance for stock rotation at the time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns under the stock rotation program. Our actual results have historically approximated our estimates. When the product is returned and verified, the distributor is given credit against their accounts receivable.

Distributor Ship-from-Stock and Debit Program

Ship-from-Stock and Debit (“ship and debit”) is a program designed to assist distributor customers in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations

may

cover current and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future credits under the ship and debit program. Our actual results have historically approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment.

Special Incentive Programs

We

may

offer special incentive discounts based on amount of product ordered or shipped. At the time we record sales under these agreements, we provide an allowance for the discounts on the sales for which the customer is eligible. The customer then debits us for the authorized discount amount.

Research and Development Expense, Policy [Policy Text Block]

Research, Development, and Engineering:

Research, development, and engineering expenditures are expensed when incurred. Research and development expenses are included in selling, general, and administrative expenses and were

$13,683,

$16,493,

and

$17,886

for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively. Engineering expenses are included in cost of sales and were

$14,616,

$14,453,

and

$23,892

 for the fiscal years ended

March 31, 2016,

2017,

and

2018,

respectively.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation:

We recognize compensation cost resulting from all share-based payment transactions in the financial statements. The amount of compensation cost is measured based on the grant-date fair value for the share-based payment issued. Our policy is to grant stock options with an exercise price equal to our stock price on the date of grant. Compensation cost is recognized over the vesting period of the award.

We use the Black-Scholes-Merton option-pricing model to determine the fair value of stock options at the grant date. We use the closing fair market value of the Company’s common stock on the grant date to determine the fair value of restricted stock units (“RSU”) at the grant date. See Note

12

for assumptions used.

Treasury Stock, Policy [Policy Text Block]

Treasury Stock:

Our Board of Directors has approved stock repurchase authorizations in

2005

and

2007

whereby up to

10,000

shares of common stock can be purchased from time to time at the discretion of management. Accordingly,

761

shares were purchased during the fiscal year ended

March 31, 2016,

356

shares were purchased during the fiscal year ended

March 31, 2017,

and

0

shares were purchased during the fiscal year ended

March 31, 2018.

As of

March 31, 2018,

we had in treasury

7,935

common shares at a cost of

$102,122.

There are

3,067

shares that

may

yet be purchased under the

2007

authorization.

Commitments and Contingencies, Policy [Policy Text Block]

Commitments and Contingencies:

Liabilities for loss contingencies are recorded when analysis indicates that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely amount. In the event that

no

amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Legal advisory costs are expensed as incurred.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Standards:

In

May 2014,

the FASB issued ASU

2014

-

09,

“Revenue from Contracts with Customers.” This guidance modifies how an entity will determine the measurement of revenue and timing of when it is recognized. The guidance provides for a

five

-step approach in applying the standard:

1

) identifying the contract with the customer,

2

) identifying separate performance obligations in the contract,

3

) determining the transaction price,

4

) allocating the transaction price to separate performance obligations, and

5

) recognizing the revenue when the performance obligation has been satisfied. The new guidance requires enhanced disclosures for the nature, amount, timing, and uncertainty of revenue that is being recognized. The guidance is effective for public companies for interim and annual reporting periods beginning after

December 15, 2017.

Companies

may

use either a full retrospective or a modified retrospective approach to adopt ASU

2014

-

09.

We have assessed the impact of the new standard and anticipate

no

material impact from adopting ASU

2014

-

09

in how we recognize revenue. We identified a change in how we recognize right-of-return liabilities which impact Current Assets and Current Liabilities. We will adopt ASU

2014

-

09

using the modified retrospective approach in the

first

quarter of fiscal year

2019.

 

In

February 2016,

FASB issued ASU

2016

-

02,

“Leases.” This guidance changes the requirements for inclusion of certain right-of-use assets and the associated lease liabilities to be included in a statement of financial position. The classification criteria maintains the distinction between finance leases and operating leases. Regarding finance leases, lessees are required to

1

) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position,

2

) recognize interest on the lease liability separate from the amortization of the right-of-use asset in the statement of comprehensive income, and

3

) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. Regarding operating leases, lessees are required to

1

) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position,

2

) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and

3

) classify all cash payments within operating activities in the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods beginning after

December 15, 2018.

Early adoption is permitted. We previously disclosed prior to our recent acquisitions that we anticipated

no

material impact from adopting ASU

2016

-

02.

 However, we are in the process of updating our assessment to include the impact of our recently acquired companies.

In

March 2016,

the FASB issued ASU

2016

-

09,

“Compensation — Stock Compensation.” The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The guidance is effective for public companies for annual reporting periods beginning after

December 15, 2016,

and interim periods within those annual periods. The standard became effective for the interim reporting period ending

June 30, 2017

and has

not

had a material impact on our consolidated financial statements.

In

January 2017,

the FASB issued ASU

2017

-

04,

“Intangibles – Goodwill and Other.” This guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step

2

from the goodwill impairment test. Step

2

measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of goodwill. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. This ASU also removes the requirements for any reporting unit with a

zero

or negative carrying amount to perform a qualitative assessment, and if it fails that qualitative test to perform Step

2

of the goodwill impairment test. Companies are to apply the standard on a prospective basis. The guidance is effective for public companies that are an SEC filer for fiscal years beginning after

December 15, 2019.

Early adoption is permitted and management elected to adopt this guidance beginning with the interim period ending

June 30, 2017.

The adoption of this standard has

not

had a material impact on our consolidated financial statements.

In

August 2017,

the FASB issued ASU

2017

-

12,

“Derivatives and Hedging.” The standard aims to align the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results for cash flow and fair value hedge accounting with risk management activities. The guidance is effective for public companies for annual reporting periods beginning after

December 15, 2018,

and interim periods within those annual periods. Early adoption is permitted in any interim period after issuance. We do

not

anticipate a material impact from adopting this standard in the

first

quarter of fiscal year

2019.

In

February 2018,

the FASB issued ASU

2018

-

02,

"Income Statement - Reporting Comprehensive Income." This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The standard is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have

not

yet been issued. We are currently evaluating the potential impact on our consolidated financial statements and disclosures.

      We have reviewed other newly issued accounting pronouncements and concluded that they are either

not

applicable to our business or that

no

material effect is expected on our consolidated financial statements as a result of future adoption.

XML

Note 1 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	March 31, 2017					March 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	$	51,000	$	(26,917	)	$	96,388	$	(30,819	)
Developed technology and other		14,521		(12,153	)		43,689		(13,816	)
Trade name and trademarks		34,000		(6,800	)		43,380		(10,210	)
Total		99,521		(45,870	)		183,457		(54,845	)

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Fiscal Year ended March 31,	Estimated Amortization Expense
2019	$	13,421
2020		13,375
2021		13,077
2022		12,201
2023		12,040
Thereafter		64,498

XML

Note 2 - Earnings Per Share (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Fiscal Year Ended March 31,
	2016		2017		2018
Net income	$	101,535	$	125,785	$	4,910
Computation of Basic EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		167,797		167,506		168,262
Basic earnings per share	$	0.61	$	0.75	$	0.03
Computation of Diluted EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		167,797		167,506		168,262
Effect of stock options		164		331		663
Weighted Average Shares used in Computing Diluted EPS (1)		167,961		167,837		168,925
Diluted earnings per share	$	0.60	$	0.75	$	0.03

XML

Note 3 - Comprehensive Income (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Fiscal Year Ended March 31,
	2016						2017						2018
	Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax
Foreign currency translation adjustment	$	14,330		$	14,330		$	(14,674	)	$	(14,674	)	$	76,711		$	76,711
Foreign currency cash flow hedges adjustment		29			2			205			183			(626	)		(490	)
Pension liability adjustment		11,077			8,209			(10,155	)		(7,527	)		16,063			12,199
Other post-employment obligations		(244	)		(244	)		(777	)		(777	)		-			-
Other comprehensive income (loss)	$	25,192		$	22,297		$	(25,401	)	$	(22,795	)	$	92,148		$	88,420

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	As of March 31,
	2017			2018
Foreign currency translation adjustment	$	(14,330	)	$	62,381
Foreign currency cash flow hedges adjustment		367			(123	)
Pension liability adjustment		(49,618	)		(37,419	)
Other post-employment obligations		(3,582	)		(3,582	)
Accumulated other comprehensive income (loss)	$	(67,163	)	$	21,257

XML

Note 4 - Fair Value (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
Assets held in the non-qualified deferred compensation program (1)	$	6,082	$	4,810	$	1,272	$	-
Foreign currency derivatives (2)		1,492		-		1,492		-
Total	$	7,574	$	4,810	$	2,764	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Liabilities measured at fair value on a recurring basis:
Obligation related to assets held in the non-qualified deferred compensation program (1)	$	6,082	$	4,810	$	1,272	$	-
Foreign currency derivatives (2)		886		-		886		-
Total	$	6,968	$	4,810	$	2,158	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
Assets held in the non-qualified deferred compensation program (1)	$	6,649	$	5,959	$	690	$	-
Foreign currency derivatives (2)		257		-		257		-
Total	$	6,906	$	5,959	$	947	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Liabilities measured at fair value on a recurring basis:
Obligation related to assets held in the non-qualified deferred compensation program (1)	$	6,649	$	5,959	$	690	$	-
Foreign currency derivatives (2)		514		-		514		-
Total	$	7,163	$	5,959	$	1,204	$	-

XML

Note 5 - Accounts Receivable (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	Fiscal Year Ended March 31,
	2017		2018
Gross Accounts Receivable - Trade	$	198,491	$	300,016
Less:
Allowances for doubtful accounts		1,285		1,893
Stock rotation and ship from stock and debit		14,853		15,989
Sales returns and discounts		5,623		6,875
Total allowances		21,761		24,757
	$	176,730	$	275,259

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	Fiscal Year Ended March 31,
	2016			2017		2018
Allowances for doubtful accounts:
Beginning Balance	$	659		$	423	$	1,285
Charges		112			785		209
Applications		(348	)		77		(1,524	)
Translation, Acquisition and other		-			-		1,923
Ending Balance	$	423		$	1,285	$	1,893

	Fiscal Year Ended March 31,
	2016			2017			2018
Stock rotation and ship from stock debit:
Beginning Balance	$	16,378		$	14,314		$	14,853
Charges		29,432			25,470			30,523
Applications		(31,496	)		(24,931	)		(29,387	)
Ending Balance	$	14,314		$	14,853		$	15,989

	Fiscal Year Ended March 31,
	2016			2017			2018
Sales returns and discounts:
Beginning Balance	$	6,186		$	6,681		$	5,623
Charges		21,736			13,831			24,150
Applications		(21,271	)		(14,841	)		(23,399	)
Translation, Acquisition and other		30			(48	)		501
Ending Balance	$	6,681		$	5,623		$	6,875

XML

Note 6 - Inventories (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	Fiscal Year Ended March 31,
	2017		2018
Finished goods	$	92,563	$	93,467
Work in process		107,392		133,556
Raw materials		274,173		289,754
	$	474,128	$	516,777

XML

Note 7 - Property and Equipment (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Property, Plant and Equipment [Table Text Block]

	Fiscal Year Ended March 31,
	2017			2018
Land	$	32,839		$	43,209
Buildings and improvements		307,098			393,247
Machinery and equipment		1,150,999			1,470,460
Construction in progress		38,315			73,572
		1,529,251			1,980,488
Accumulated depreciation		(1,289,300	)		(1,562,202	)
	$	239,951		$	418,286

XML

Note 8 - Financial Instruments and Investments in Securities (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Debt Securities, Held-to-maturity [Table Text Block]

	As of March 31, 2017
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Short-term investments:
Corporate bonds	$	10,120	$	-	$	(1	)	$	10,119
Time deposits		518,628		148		-			518,776
	$	528,748	$	148	$	(1	)	$	528,895

	As of March 31, 2018
	Cost		Gross Unrealized Gains			Gross Unrealized Losses		Estimated Fair Value
Short-term investments:
Commercial Paper	$	10,597	$	(1	)	$	-	$	10,596
Time deposits		269,190		203			-		269,393
	$	279,787	$	202		$	-	$	279,989

Investments Classified by Contractual Maturity Date [Table Text Block]

	Held-to-Maturity
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	279,787	$	279,989
Due after one year through five years		-		-
Total	$	279,787	$	279,989

XML

Note 9 - Income Taxes (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	Fiscal Year Ended March 31,
	2016		2017		2018
Domestic	$	39,713	$	75,659	$	85,263
Foreign		92,439		99,290		107,050
Total	$	132,152	$	174,949	$	192,313

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Fiscal Year Ended March 31,
	2016			2017			2018
Current:
Federal/State	$	(11,117	)	$	33,220		$	123,527
Foreign		15,028			18,494			19,883
Total		3,911			51,714			143,410
Deferred:
Federal/State		23,903			1,725			25,822
Foreign		2,803			(4,275	)		18,171
Total		26,706			(2,550	)		43,993
	$	30,617		$	49,164		$	187,403

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	As of March 31,
	2017					2018
Non-current:	Assets			Liabilities		Assets			Liabilities
Sales and receivable allowances	$	9,090		$	-	$	5,711		$	-
Inventory reserves		12,276			-		7,645			-
Depreciation and amortization		3,696			-		-			(22,336	)
Pension obligations		5,817			-		550			-
Accrued expenses		34,282			-		30,089			-
Other, net		2,044			-		-			(21,692	)
Net operating loss and tax credit carry forwards		70,360			-		77,108			-
Sub total		137,565			-		121,103			(44,028	)
Less: valuation allowances		(13,933	)		-		(14,250	)		-
Total Non-current	$	123,632		$	-	$	106,853		$	(44,028	)

	As of March 31,
	2017		2018
Assets, net of valuation allowances	$	123,632	$	106,853
Liabilities		-		(44,028	)
Net deferred income tax assets	$	123,632	$	62,825

	As of March 31,
Balance Sheet Presentation	2017			2018
Noncurrent assets	$	124,589		$	75,720
Noncurrent liabilities		(957	)		(12,895	)
Net deferred income tax assets	$	123,632		$	62,825

	As of March 31,
	2016			2017			2018
Valuation allowance beginning balance	$	27,207		$	26,034		$	13,933
Charged to income tax provision		413			(1,128	)		(2,879	)
Additions		-			-			2,975
Releases		(2,730	)		(7,413	)		-
Translation and other		1,144			(3,560	)		221
Valuation allowance ending balance	$	26,034		$	13,933		$	14,250

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Fiscal Year Ended March 31,
	2016		2017		2018
U.S. Federal statutory rate		35.0%		35.0%		31.5%
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal benefit		0.4		0.5		0.8
Effect of foreign operations		(8.7)		(8.3)		(7.1)
Change in valuation allowance		0.5		(5.0)		-
Deemed dividends from subsidiaries		2.9		6.3		7.3
Deduction for domestic production activities		-		(1.7)		(1.2)
Utilization of foreign tax credits		(2.4)		(3.9)		(4.0)
US and Foreign Tax Reform		-		-		66.7
Change in uncertain tax positions		(2.6)		(0.8)		0.2
Adjustment made by taxing authorities		-		3.3		-
Adjustment of prior year balances		-		1.7		1.4
Other, net		(1.9)		1.0		1.8
Effective tax rate		23.2%		28.1%		97.4%

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

Balance at March 31, 2015	$	6,776
Additions for tax positions of prior years		10
Additions for tax positions in current period		228
Reductions for tax positions of prior years		(30	)
Reductions due to expiration of statutory periods		(3,585	)
Balance at March 31, 2016	$	3,399
Reductions for tax positions of prior years		(89	)
Reductions due to expiration of statutory periods		(895	)
Reductions due to settlements with taxing authorities		(478	)
Balance at March 31, 2017	$	1,937
Additions for tax positions of prior years		948
Additions for tax positions in current period		642
Reductions due to expiration of statutory periods		(317	)
Balance at March 31, 2018	$	3,210

XML

Note 10 - Acquisitions (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Assets Acquired and Liabilities Assumed	Allocation of Purchase Price
Accounts receivable	$	61,483
Inventory		42,443
Accounts payable and accrued liabilities		(67,343	)
Other current assets and liabilities, net		9,250
Working capital		45,833
Property and equipment		85,794
Intangible assets		18,168
Other non-current assets and liabilities, net		(13,806	)
Total identified assets and liabilities		135,989
Purchase price		162,038
Goodwill	$	26,049

Assets Acquired and Liabilities Assumed	Allocation of Purchase Price
Accounts receivable	$	16,350
Accounts payable		(10,141	)
Other current assets and liabilities, net		2,868
Working capital		9,077
Debt		(21,105	)
Property and equipment		13,760
Intangible assets		64,800
Other non-current assets and liabilities, net		(13,763	)
Total identified assets and liabilities		52,769
Purchase price		128,242
Goodwill	$	75,473

XML

Note 11 - Employee Retirement Plans (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets [Table Text Block]

	Fiscal Year Ended March 31,
	U.S. Plans						International Plans
	2017			2018			2017			2018
Change in benefit obligation:
Benefit obligation at beginning of year	$	42,980		$	38,625		$	156,617		$	169,921
Service cost		168			131			902			959
Interest cost		1,457			1,408			4,310			4,383
Plan participants' contributions		-			-			7			-
Actuarial loss (gain)		(2,443	)		(633	)		32,882			(11,077	)
Benefits paid		(3,537	)		(3,297	)		(6,029	)		(8,420	)
Foreign currency exchange rate changes		-			-			(18,768	)		22,732
Benefit obligation at end of year	$	38,625		$	36,234		$	169,921		$	178,498
Change in plan assets:
Fair value of plan assets at beginning of year	$	34,125		$	36,689		$	156,410		$	161,726
Actual return (loss) on assets		3,100			2,355			24,432			8,121
Employer contributions		3,001			261			6,934			7,761
Plan participants' contributions		-			-			7			-
Benefits paid		(3,537	)		(3,298	)		(6,029	)		(7,702	)
Foreign currency exchange rate changes		-			-			(20,028	)		21,756
Fair value of plan assets at end of year		36,689			36,007			161,726			191,662
Funded status	$	(1,936	)	$	(227	)	$	(8,195	)	$	13,164

Schedule of Assumptions Used [Table Text Block]

	As of March 31,
	2017			2018
Assumptions:
Discount rates	0.1	-	3.8%	0.3	-	3.8%
Increase in compensation		-			-

Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

	Fiscal Year Ended March 31,
	U.S. Plans						International Plans
	2017			2018			2017			2018
Beginning balance	$	17,909		$	12,323		$	38,189		$	46,201
Net loss (gain) incurred during the year		(3,762	)		(1,187	)		14,248			(13,766	)
Amortization of net actuarial loss		(1,824	)		(1,143	)		(1,241	)		(1,974	)
Foreign currency exchange rate changes		-			-			(4,995	)		6,420
Ending Balance	$	12,323		$	9,993		$	46,201		$	36,881

Schedule of Net Periodic Benefit Cost Not yet Recognized [Table Text Block]

	Fiscal Year Ended March 31,
	U.S. Plans				International Plans
	2017 (1)		2018 (2)		2017 (1)		2018 (2)
Unrecognized net actuarial loss	$	7,895	$	7,792	$	36,549	$	29,487
Unamortized prior service cost		-		-		-		-
Total	$	7,895	$	7,792	$	36,549	$	29,487

Schedule of Net Benefit Costs [Table Text Block]

	Fiscal Year Ended March 31,
	2016			2017			2018
Service cost	$	1,177		$	1,102		$	1,038
Interest cost		6,939			5,997			5,516
Expected return on plan assets		(8,677	)		(7,579	)		(7,231	)
Recognized actuarial loss		3,740			3,142			3,130
Net periodic pension cost	$	3,179		$	2,662		$	2,453

Schedule of Assumptions Used For Benefit Costs [Table Text Block]

	As of March 31,
	2016			2017			2018
Assumptions:
Discount rates	0.5%	-	3.6%	0.1%	-	3.6%	0.3	-	3.8%
Increase in compensation		3.4%			3.4%			0.0%
Expected long-term rate of return on plan assets	1.4%	-	7.3%	1.4%	-	4.2%	1.4	-	3.3%

Schedule of Fair Value Hierarchy of Plan Assets [Table Text Block]

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2017		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:
Cash	$	166	$	166	$	-	$	-
Pooled Separate Accounts		29,046		-		29,046		-
Guaranteed Interest Account		7,477		-		7,477		-
International Defined Benefit Plan Assets:
Cash		608		608		-		-
Depository Account		7,897		7,897		-		-
Pooled Separate Accounts		153,222		-		153,222		-
Total	$	198,416	$	8,671	$	189,745	$	-

			Based on
			Quoted prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:
Cash	$	170	$	170	$	-	$	-
Pooled Separate Accounts		28,071		-		28,071		-
Guaranteed Interest Account		7,766		-		7,766		-
International Defined Benefit Plan Assets:
Cash		480		480		-		-
Depository Account		8,664		8,664		-		-
Pooled Separate Accounts		182,518		-		182,518		-
Total	$	227,669	$	9,314	$	218,355	$	-

Schedule of Allocation of Plan Assets [Table Text Block]

	As of March 31, 2017				As of March 31, 2018
Asset Category	U.S. Plans		International Plans		U.S. Plans		International Plans
Equity securities		59%		38%		57%		33%
Debt securities		20%		57%		22%		62%
Other		21%		5%		21%		5%
Total		100%		100%		100%		100%

Schedule of Expected Benefit Payments [Table Text Block]

Fiscal Year ended March 31,	U.S. Plans		International Plans
2019	$	2,235	$	7,545
2020		2,287		7,684
2021		2,361		7,832
2022		2,413		7,975
2023		2,468		8,122
2024-2028		12,706		42,895

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Note 12 - Stock-based Compensation (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

	March 31, 2018
	Number of Shares			Weighted-Average Grant Date Fair Value per Share
Non-vested at March 31, 2017		259			13.36
Granted		292			16.93
Vested		(101	)		13.36
Cancelled and forfeited		(92	)		13.36
Non-vested at March 31, 2018		358			16.27

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block]

	Number of Shares			Average Price (a)		Average Life (years) (b)		Aggregate Intrinsic Value
Outstanding at March 31, 2017		2,719		$	13.65		-		-
Options granted		-			-		-		-
Options exercised		(433	)		13.38		-	$	1,724
Options cancelled/forfeited		(392	)		17.67		-		55
Outstanding at March 31, 2018		1,894		$	12.90		4.12	$	6,912
Exercisable at March 31, 2018		1,601		$	12.66		3.64	$	6,224

Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block]

	Number of Shares			Weighted Average Grant- Date Fair Value
Unvested balance at March 31, 2017		608		$	2.52
Options granted		-			-
Options cancelled/forfeited		(14	)		2.58
Options vested		(301	)		2.47
Unvested balance at March 31, 2018		293		$	2.57

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Note 13 - Commitments and Contingencies (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Fiscal Year ended March 31, 2018
2019	$	6,803
2020		4,844
2021		3,398
2022		2,340
2023		1,943
Thereafter		2,277

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Note 14 - Derivative Financial Instruments (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

March 31, 2017	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	1,151	Accrued expenses	$	690

March 31, 2018	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	212	Accrued expenses	$	377

March 31, 2017	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	341	Accrued expenses	$	196

March 31, 2018	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet Caption	Fair Value		Balance Sheet Caption	Fair Value
Foreign exchange contracts	Prepaid and other	$	45	Accrued expenses	$	137

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Note 15 - Transactions With Affiliate (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Related Party Transactions [Table Text Block]

	Fiscal Year Ended March 31,
	2016		2017		2018
Sales:
Product and equipment sales to affiliates	$	22,230	$	30,303	$	26,069
Purchases:
Purchases of resale inventories, raw materials, supplies, equipment, and services		233,637		303,793		256,660
Other:
Dividends paid		51,156		52,983		54,810

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Note 16 - Segment and Geographic Information (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Fiscal Year Ended March 31,
Sales revenue (in thousands)	2016		2017		2018
Ceramic Components	$	176,502	$	188,568	$	226,204
Tantalum Components		311,888		314,723		366,194
Advanced Components		333,693		372,279		346,459
Total Electronic Components		822,083		875,570		938,857
Interconnect, Sensing and Control Devices		111,609		118,163		327,301
KCP Resale Connectors		23,751		30,027		36,090
KDP and KCD Resale		238,086		288,901		260,226
Total KED Resale		261,837		318,928		296,316
Total Revenue	$	1,195,529	$	1,312,661	$	1,562,474

	Fiscal Year Ended March 31,
	2016			2017			2018
Operating profit (loss):
Electronic Components	$	198,268		$	190,007		$	204,624
Interconnect, Sensing and Control Devices		19,954			16,437			17,802
KED Resale		16,764			17,076			18,177
Corporate activities		(111,002	)		(59,963	)		(60,769	)
Total	$	123,984		$	163,557		$	179,834

	Fiscal Year Ended March 31,
	2016		2017		2018
Depreciation and amortization:
Electronic Components	$	28,460	$	27,543	$	32,024
Interconnect, Sensing and Control Devices		5,300		5,093		17,088
KED Resale		83		16		22
Corporate activities		5,108		10,035		10,654
Total	$	38,951	$	42,687	$	59,788

	As of March 31,
	2017		2018
Assets:
Electronic Components	$	573,519	$	613,385
Interconnect, Sensing and Control Devices		56,295		241,959
KED Resale		35,164		18,629
Cash, A/R, and investments in securities		1,294,129		1,111,716
Goodwill - Electronic Components		202,774		278,247
Goodwill - Interconnect, Sensing and Control Devices		10,277		38,051
Corporate activities		305,255		370,779
Total	$	2,477,413	$	2,672,766

	Fiscal Year Ended March 31,
	2016		2017		2018
Capital expenditures:
Electronic Components	$	36,400	$	50,982	$	61,581
Interconnect, Sensing and Control Devices		9,237		14,054		38,040
KED Resale		29		1		-
Corporate activities		2,437		1,251		916
Total	$	48,103	$	66,288	$	100,537

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

	Fiscal Year Ended March 31,
	2016		2017		2018
Net sales:
Americas	$	358,372	$	381,695	$	399,963
Europe		339,768		352,064		581,255
Asia		497,389		578,902		581,256
Total	$	1,195,529	$	1,312,661	$	1,562,474
Property, plant and equipment, net:
Americas	$	91,674	$	110,235	$	134,656
Europe		77,619		77,981		191,727
Asia		48,705		51,735		91,903
Total	$	217,998	$	239,951	$	418,286

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Note 17 - Summary of Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Mar. 31, 2018

Notes Tables

Quarterly Financial Information [Table Text Block]

	First Quarter				Second Quarter
	2017		2018		2017		2018
Net sales	$	314,823	$	331,354	$	327,461	$	352,693
Gross profit		69,863		73,846		61,799		77,273
Net income		29,889		31,484		26,520		34,818
Basic earnings per share		0.18		0.19		0.16		0.21
Diluted earnings per share		0.18		0.19		0.16		0.21

	Third Quarter					Fourth Quarter
	2017		2018			2017		2018
Net sales	$	340,799	$	431,795		$	329,578	$	446,632
Gross profit		79,391		82,103			73,702		85,640
Net income (loss)		35,519		(93,212	)		33,857		31,820
Basic earnings (loss) per share		0.21		(0.55	)		0.20		0.19
Diluted earnings (loss) per share		0.21		(0.55	)		0.20		0.19

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Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Depreciation, Total	$ 50,813	$ 37,493	$ 33,918
Amortization of Intangible Assets, Total	$ 9,006	$ 5,194	$ 5,033
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	31.50%	35.00%	35.00%
Increase (Decrease) in Net Deferred Tax Assets and Liabilities	$ (24,700)
Tax Adjustments, Settlements, and Unusual Provisions	75,700
Estimated Foreign Withholding Taxes	$ 13,600
Stock Rotation Program, Percentage of Previous Six Months Net Sales	5.00%
Research and Development Expense, Total	$ 17,886	$ 16,493	$ 13,683
Engineering Expenses	$ 23,892	$ 14,453	$ 14,616
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	10,000
Treasury Stock, Shares, Acquired	0	356	761
Treasury Stock, Shares, Ending Balance	7,935	8,439
Treasury Stock, Value, Ending Balance	$ 102,122	$ 108,610
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	3,067
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	10 years
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	31 years 182 days
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	10 years
Kyocera Corporation [Member]
Ownership Percentage in Entity	72.00%

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Note 1 - Summary of Significant Accounting Policies - Schedule of Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Amortized intangible assets, gross carrying amount	$ 183,457	$ 99,521
Amortized intangible assets, accumulated amortization	(54,845)	(45,870)
Customer Relationships [Member]
Amortized intangible assets, gross carrying amount	96,388	51,000
Amortized intangible assets, accumulated amortization	(30,819)	(26,917)
Development Technology and Other [Member]
Amortized intangible assets, gross carrying amount	43,689	14,521
Amortized intangible assets, accumulated amortization	(13,816)	(12,153)
Trademarks and Trade Names [Member]
Amortized intangible assets, gross carrying amount	43,380	34,000
Amortized intangible assets, accumulated amortization	$ (10,210)	$ (6,800)

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Note 1 - Summary of Significant Accounting Policies - Schedule of Finite-lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands	Mar. 31, 2018 USD ($)
2019	$ 13,421
2020	13,375
2021	13,077
2022	12,201
2023	12,040
Thereafter	$ 64,498

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Note 2 - Earnings Per Share (Details Textual) - shares shares in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Common Stock Equivalents [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,733	1,381	2,974

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Note 2 - Earnings Per Share - Basic and Diluted Weighted Average Number of Shares of Common Stock and Potential Common Stock Equivalents (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended								12 Months Ended
		Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net income		$ 33,857	$ (93,212)	$ 34,818	$ 31,484	$ 31,820	$ 35,519	$ 26,520	$ 29,889	$ 4,910	$ 125,785	$ 101,535
Computation of Basic EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS (in shares)										168,262	167,506	167,797
Basic earnings per share (in dollars per share)		$ 0.20	$ (0.55)	$ 0.21	$ 0.19	$ 0.19	$ 0.21	$ 0.16	$ 0.18	$ 0.03	$ 0.75	$ 0.61
Computation of Diluted EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS (in shares)										168,262	167,506	167,797
Effect of stock options (in shares)										663	331	164
Weighted Average Shares used in Computing Diluted EPS (1) (in shares)	[1]									168,925	167,837	167,961
Diluted earnings per share (in dollars per share)		$ 0.20	$ (0.55)	$ 0.21	$ 0.19	$ 0.19	$ 0.21	$ 0.16	$ 0.18	$ 0.03	$ 0.75	$ 0.60

[1] Common stock equivalents not included in the computation of diluted earnings per share because the impact would have been anti-dilutive were 2,974 shares, 1,381 shares, and 1,733 shares for the fiscal years ended March 31, 2016, 2017, and 2018, respectively.

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Note 3 - Comprehensive Income - Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Foreign currency translation adjustment, pre-tax	$ 76,711	$ (14,674)	$ 14,330
Foreign currency translation adjustment, net of tax	76,711	(14,674)	14,330
Foreign currency cash flow hedges adjustment, pre-tax	(626)	205	29
Foreign currency cash flow hedges adjustment, net of tax	(490)	183	2
Pension liability adjustment, pre-tax	16,063	(10,155)	11,077
Pension liability adjustment, net of tax	12,199	(7,527)	8,209
Other post-employment obligations, pre-tax		(777)	(244)
Other post-employment obligations		(777)	(244)
Other comprehensive income (loss), pre-tax	92,148	(25,401)	25,192
Other comprehensive income (loss), net of tax	$ 88,420	$ (22,795)	$ 22,297

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Note 3 - Comprehensive Income - Components of Accumulated Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Foreign currency translation adjustment	$ 62,381	$ (14,330)
Foreign currency cash flow hedges adjustment	(123)	367
Pension liability adjustment	(37,419)	(49,618)
Other post-employment obligations	(3,582)	(3,582)
Accumulated other comprehensive income (loss)	$ 21,257	$ (67,163)

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Note 4 - Fair Value - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands		Mar. 31, 2018	Mar. 31, 2017
Assets held in the non-qualified deferred compensation program	[1]	$ 6,649	$ 6,082
Foreign currency derivatives	[2]	257	1,492
Assets measured at fair value, Total		6,906	7,574
Obligation related to assets held in the non-qualified deferred compensation program	[1]	6,649	6,082
Foreign currency derivatives liabilities	[2]	514	886
Liabilities measured at fair value, Total		7,163	6,968
Fair Value, Inputs, Level 1 [Member]
Assets held in the non-qualified deferred compensation program	[1]	5,959	4,810
Foreign currency derivatives	[2]
Assets measured at fair value, Total		5,959	4,810
Obligation related to assets held in the non-qualified deferred compensation program	[1]	5,959	4,810
Foreign currency derivatives liabilities	[2]
Liabilities measured at fair value, Total		5,959	4,810
Fair Value, Inputs, Level 2 [Member]
Assets held in the non-qualified deferred compensation program	[1]	690	1,272
Foreign currency derivatives	[2]	257	1,492
Assets measured at fair value, Total		947	2,764
Obligation related to assets held in the non-qualified deferred compensation program	[1]	690	1,272
Foreign currency derivatives liabilities	[2]	514	886
Liabilities measured at fair value, Total		1,204	2,158
Fair Value, Inputs, Level 3 [Member]
Assets held in the non-qualified deferred compensation program	[1]
Foreign currency derivatives	[2]
Assets measured at fair value, Total
Obligation related to assets held in the non-qualified deferred compensation program	[1]
Foreign currency derivatives liabilities	[2]
Liabilities measured at fair value, Total

[1] The market value of the assets held in the trust for the non-qualified deferred compensation program is included as an asset and as a liability as the trust's assets are both assets of the Company and also a liability as they are available to general creditors in certain circumstances.

[2] Foreign currency derivatives in the form of forward contracts are included in prepaid and other assets and liabilities in the March 31, 2017 and 2018 consolidated balance sheets. Unrealized gains and losses on derivatives classified as cash flow hedges are recorded in other comprehensive income (loss). Realized gains and losses on derivatives classified as cash flow hedges and gains and losses on derivatives not designated as hedges are recorded in other income.

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Note 5 - Accounts Receivable - Schedule of Trade Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Gross Accounts Receivable - Trade	$ 300,016	$ 198,491
Allowances	24,757	21,761
Net Accounts Receivable - Trade	275,259	176,730
Allowances for Doubtful Accounts [Member]
Allowances	1,893	1,285	$ 423	$ 659
Allowance for Stock Rotation and Ship from Stock and Debit [Member]
Allowances	15,989	14,853	14,314	16,378
Allowance and Reserve for Sales Returns and Discounts [Member]
Allowances	$ 6,875	$ 5,623	$ 6,681	$ 6,186

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Note 5 - Accounts Receivable - Charges Related to Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Beginning Balance	$ 21,761
Ending Balance	24,757	$ 21,761
Allowances for Doubtful Accounts [Member]
Beginning Balance	1,285	423	$ 659
Charges	209	785	112
Applications	(1,524)	77	(348)
Translation, Acquisition and other	1,923
Ending Balance	1,893	1,285	423
Allowance for Stock Rotation and Ship from Stock and Debit [Member]
Beginning Balance	14,853	14,314	16,378
Charges	30,523	25,470	29,432
Applications	(29,387)	(24,931)	(31,496)
Ending Balance	15,989	14,853	14,314
Allowance and Reserve for Sales Returns and Discounts [Member]
Beginning Balance	5,623	6,681	6,186
Charges	24,150	13,831	21,736
Applications	(23,399)	(14,841)	(21,271)
Translation, Acquisition and other	501	(48)	30
Ending Balance	$ 6,875	$ 5,623	$ 6,681

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Note 6 - Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Finished goods	$ 93,467	$ 92,563
Work in process	133,556	107,392
Raw materials	289,754	274,173
Total Inventory	$ 516,777	$ 474,128

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Note 7 - Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Property and equipment, gross	$ 1,980,488	$ 1,529,251
Accumulated depreciation	(1,562,202)	(1,289,300)
Property and equipment, net	418,286	239,951	$ 217,998
Land [Member]
Property and equipment, gross	43,209	32,839
Building and Building Improvements [Member]
Property and equipment, gross	393,247	307,098
Machinery and Equipment [Member]
Property and equipment, gross	1,470,460	1,150,999
Construction in Progress [Member]
Property and equipment, gross	$ 73,572	$ 38,315

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Note 8 - Financial Instruments and Investments in Securities - Investments in Held-to-Maturity Securities, Recorded at Amortized Cost (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Cost	$ 279,787
Estimated Fair Value	279,989
Short-term Investments [Member]
Cost	279,787	$ 528,748
Gross Unrealized Gains	202	148
Gross Unrealized Losses		(1)
Estimated Fair Value	279,989	528,895
Gross Unrealized Gains	(202)	(148)
Short-term Investments [Member] | Corporate Bonds [Member]
Cost		10,120
Gross Unrealized Gains
Gross Unrealized Losses		(1)
Estimated Fair Value		10,119
Gross Unrealized Gains
Short-term Investments [Member] | Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Cost	10,597
Gross Unrealized Gains	1
Gross Unrealized Losses
Estimated Fair Value	10,596
Gross Unrealized Gains	(1)
Short-term Investments [Member] | Time Deposits [Member]
Cost	269,190	518,628
Gross Unrealized Gains	203	148
Gross Unrealized Losses
Estimated Fair Value	269,393	518,776
Gross Unrealized Gains	$ (203)	$ (148)

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Note 8 - Financial Instruments and Investments in Securities - Contractual Maturity (Details) $ in Thousands	Mar. 31, 2018 USD ($)
Due in one year or less, amortized cost	$ 279,787
Due in one year or less, estimated fair value	279,989
Due after one year through five years, amortized cost
Due after one year through five years, estimated fair value
Total, amortized cost	279,787
Held-to-maturity securities, fair value, total	$ 279,989

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Note 9 - Income Taxes (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Operating Loss Carryforwards, Total	$ 206,212
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	317	$ (12,101)	$ (1,173)
Income Taxes Paid	66,354	55,642	$ 22,919
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	470	340
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total	71	(195)
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	$ 3,210	1,937
Japanese Subsidiary [Member]
Operating Loss Carryforwards, Total		15,878
Deferred Tax Assets, Valuation Allowance Reversal, Operating Loss Carryforwards		$ 5,530
Operating Loss Carryforwards, Expiration Period		8 years

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Note 9 - Income Taxes - Schedule of Income Before Taxes, Foreign and Domestic (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Domestic	$ 85,263	$ 75,659	$ 39,713
Foreign	107,050	99,290	92,439
Income before income taxes	$ 192,313	$ 174,949	$ 132,152

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Note 9 - Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Federal/State	$ 123,527	$ 33,220	$ (11,117)
Foreign	19,883	18,494	15,028
Total	143,410	51,714	3,911
Federal/State	25,822	1,725	23,903
Foreign	18,171	(4,275)	2,803
Total	43,993	(2,550)	26,706
	$ 187,403	$ 49,164	$ 30,617

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Note 9 - Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Sales and receivable allowances	$ 5,711	$ 9,090
Sales and receivable allowances
Inventory reserves	7,645	12,276
Inventory reserves
Depreciation and amortization		3,696
Depreciation and amortization	(22,336)
Pension obligations	550	5,817
Pension obligations
Accrued expenses	30,089	34,282
Accrued expenses
Other, net		2,044
Other, net	(21,692)
Net operating loss and tax credit carry forwards	77,108	70,360
Sub total	121,103	137,565
Sub total	(44,028)
Less: valuation allowances	(14,250)	(13,933)
Total Non-current	106,853	123,632
Assets, net of valuation allowances	106,853	123,632
Liabilities	(44,028)
Net deferred income tax assets	62,825	123,632
Noncurrent assets	75,720	124,589
Noncurrent liabilities	(12,895)	(957)
Valuation allowance beginning balance	13,933	26,034	$ 27,207
Charged to income tax provision	(2,879)	(1,128)	413
Additions	2,975
Releases		(7,413)	(2,730)
Translation and other	221	(3,560)	1,144
Valuation allowance ending balance	$ 14,250	$ 13,933	$ 26,034

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Note 9 - Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
U.S. Federal statutory rate	31.50%	35.00%	35.00%
State income taxes, net of federal benefit	0.80%	0.50%	0.40%
Effect of foreign operations	(7.10%)	(8.30%)	(8.70%)
Change in valuation allowance		(5.00%)	0.50%
Deemed dividends from subsidiaries	7.30%	6.30%	2.90%
Deduction for domestic production activities	(1.20%)	(1.70%)
Utilization of foreign tax credits	(4.00%)	(3.90%)	(2.40%)
US and Foreign Tax Reform	66.70%
Change in uncertain tax positions	0.20%	(0.80%)	(2.60%)
Adjustment made by taxing authorities		3.30%
Adjustment of prior year balances	1.40%	1.70%
Other, net	1.80%	1.00%	(1.90%)
Effective tax rate	97.40%	28.10%	23.20%

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Note 9 - Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Balance	$ 1,937	$ 3,399	$ 6,776
Additions for tax positions of prior years	948		10
Additions for tax positions in current period	642		228
Reductions for tax positions of prior years		(89)	(30)
Reductions due to expiration of statutory periods	(317)	(895)	(3,585)
Reductions due to settlements with taxing authorities		(478)
Balance	$ 3,210	$ 1,937	$ 3,399

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Note 10 - Acquisitions (Details Textual) - USD ($) $ in Thousands			3 Months Ended								12 Months Ended
	Jan. 31, 2018	Oct. 02, 2017	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Payments to Acquire Businesses, Net of Cash Acquired, Total											$ 290,280
Goodwill, Ending Balance			$ 316,298				$ 213,051				316,298	213,051
Business Acquisition, Pro Forma Revenue											1,736,425	1,633,626
Revenues, Total			329,578	$ 431,795	$ 352,693	$ 331,354	$ 446,632	$ 340,799	$ 327,461	$ 314,823	1,562,474	$ 1,312,661	$ 1,195,529
AB Electronics Sensing and Control Business [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total		$ 162,038
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total		18,168
Goodwill, Ending Balance		$ 26,049
Goodwill, Purchase Accounting Adjustments			$ 9,691
Revenues, Total											193,326
AB Electronics Sensing and Control Business [Member] | Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			6 years
AB Electronics Sensing and Control Business [Member] | Trade Names [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			1 year
AB Electronics Sensing and Control Business [Member] | Technology-Based Intangible Assets [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			11 years
AVX Antenna [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total	$ 128,242
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	64,800
Goodwill, Ending Balance	$ 75,473
Revenues, Total											$ 12,740
AVX Antenna [Member] | Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	13 years
AVX Antenna [Member] | Trade Names [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years
AVX Antenna [Member] | Technology-Based Intangible Assets [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years

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Note 10 - Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands			12 Months Ended
	Jan. 31, 2018	Oct. 02, 2017	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Payments to Acquire Businesses, Net of Cash Acquired, Total			$ 290,280
Goodwill			$ 316,298	$ 213,051
AB Electronics Sensing and Control Business [Member]
Accounts receivable		$ 61,483
Inventory		42,443
Accounts payable and accrued liabilities		(67,343)
Other current assets and liabilities, net		9,250
Working capital		45,833
Property and equipment		85,794
Intangible assets		18,168
Other non-current assets and liabilities, net		(13,806)
Total identified assets and liabilities		135,989
Payments to Acquire Businesses, Net of Cash Acquired, Total		162,038
Goodwill		$ 26,049
AVX Antenna [Member]
Accounts receivable	$ 16,350
Other current assets and liabilities, net	2,868
Working capital	9,077
Property and equipment	13,760
Intangible assets	64,800
Other non-current assets and liabilities, net	(13,763)
Total identified assets and liabilities	52,769
Payments to Acquire Businesses, Net of Cash Acquired, Total	128,242
Goodwill	75,473
Accounts payable	(10,141)
Debt	(21,105)
Purchase price	$ 128,242

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Note 11 - Employee Retirement Plans (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Defined Benefit Plans, Change in Liabilities	$ (21,016)	$ 1,069
Defined Benefit Plan, Accumulated Benefit Obligation	214,732	208,546
Defined Contribution Plan, Employer Contribution, Amount	4,421	4,367	$ 4,222
Assets Held in Non-qualified Deferred Compensation Program, Fair Value Disclosure	6,649	6,082
UNITED STATES
Defined Benefit Plan, Expected Amortization of Gain (Loss), Next Fiscal Year	$ (917)
UNITED STATES | Equity Funds [Member]
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage	50.00%
UNITED STATES | Fixed Income Funds [Member]
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage	50.00%
UNITED STATES | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
AOCI Tax, Attributable to Parent	$ (2,201)	(4,428)
Foreign Plan [Member]
Defined Benefit Plan, Expected Amortization of Gain (Loss), Next Fiscal Year	(1,317)
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year	$ 6,571
Foreign Plan [Member] | Equity Funds [Member]
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage	45.00%
Foreign Plan [Member] | Fixed Income Funds [Member]
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage	55.00%
Foreign Plan [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
AOCI Tax, Attributable to Parent	$ (7,394)	$ (9,652)

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Note 11 - Employee Retirement Plans - Change in Benefit Obligation and Plan Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Service cost	$ 1,038	$ 1,102	$ 1,177
Interest cost	5,516	5,997	6,939
Fair value of plan assets at beginning of year	198,416
Fair value of plan assets at end of year	227,669	198,416
UNITED STATES
Benefit obligation at beginning of year	38,625	42,980
Service cost	131	168
Interest cost	1,408	1,457
Plan participants' contributions
Actuarial loss (gain)	(633)	(2,443)
Benefits paid	(3,297)	(3,537)
Foreign currency exchange rate changes
Benefit obligation at end of year	36,234	38,625	42,980
Fair value of plan assets at beginning of year	36,689	34,125
Actual return (loss) on assets	2,355	3,100
Employer contributions	261	3,001
Plan participants' contributions
Benefits paid	(3,298)	(3,537)
Foreign currency exchange rate changes
Fair value of plan assets at end of year	36,007	36,689	34,125
Funded status	(227)	(1,936)
Foreign Plan [Member]
Benefit obligation at beginning of year	169,921	156,617
Service cost	959	902
Interest cost	4,383	4,310
Plan participants' contributions		7
Actuarial loss (gain)	(11,077)	32,882
Benefits paid	(8,420)	(6,029)
Foreign currency exchange rate changes	22,732	(18,768)
Benefit obligation at end of year	178,498	169,921	156,617
Fair value of plan assets at beginning of year	161,726	156,410
Actual return (loss) on assets	8,121	24,432
Employer contributions	7,761	6,934
Plan participants' contributions		7
Benefits paid	(7,702)	(6,029)
Foreign currency exchange rate changes	21,756	(20,028)
Fair value of plan assets at end of year	191,662	161,726	$ 156,410
Funded status	$ 13,164	$ (8,195)

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Note 11 - Employee Retirement Plans - Schedule of Assumptions Used for Benefit Obligation (Details)	Mar. 31, 2018	Mar. 31, 2017
Increase in compensation
Minimum [Member]
Discount rates	0.30%	0.10%
Maximum [Member]
Discount rates	3.80%	3.80%

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Note 11 - Employee Retirement Plans - Amounts Recognized in Other Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
UNITED STATES
Beginning balance	$ 12,323	$ 17,909
Net loss (gain) incurred during the year	(1,187)	(3,762)
Amortization of net actuarial loss	(1,143)	(1,824)
Foreign currency exchange rate changes
Ending Balance	9,993	12,323
Foreign Plan [Member]
Beginning balance	46,201	38,189
Net loss (gain) incurred during the year	(13,766)	14,248
Amortization of net actuarial loss	(1,974)	(1,241)
Foreign currency exchange rate changes	6,420	(4,995)
Ending Balance	$ 36,881	$ 46,201

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Note 11 - Employee Retirement Plans - Net Periodic Benefit Cost Not Yet Recognized (Details) - USD ($) $ in Thousands	Mar. 31, 2018		Mar. 31, 2017
Total	$ 37,419		$ 49,618
UNITED STATES
Unrecognized net actuarial loss	7,792	[1]	7,895	[2]
Unamortized prior service cost		[1]		[2]
Total	7,792	[1]	7,895	[2]
Foreign Plan [Member]
Unrecognized net actuarial loss	29,487	[1]	36,549	[2]
Unamortized prior service cost		[1]		[2]
Total	$ 29,487	[1]	$ 36,549	[2]

[1] Amounts in the above table as of March 31, 2018 are net of $2,201 and $7,394 tax benefit for the U.S. and International Plans, respectively.

[2] Amounts in the above table as of March 31, 2017 are net of $4,428 and $9,652 tax benefit for the U.S. and International Plans, respectively.

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Note 11 - Employee Retirement Plans - Net Benefit Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Service cost	$ 1,038	$ 1,102	$ 1,177
Interest cost	5,516	5,997	6,939
Expected return on plan assets	(7,231)	(7,579)	(8,677)
Recognized actuarial loss	3,130	3,142	3,740
Net periodic pension cost	$ 2,453	$ 2,662	$ 3,179

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Note 11 - Employee Retirement Plans - Assumptions Used For Benefit Costs (Details)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Discount rates
Increase in compensation	0.00%	3.40%	3.40%
Expected long-term rate of return on plan assets
Minimum [Member]
Discount rates	0.30%	0.10%	0.50%
Increase in compensation
Expected long-term rate of return on plan assets	1.40%	1.40%	1.40%
Maximum [Member]
Discount rates	3.80%	3.60%	3.60%
Increase in compensation
Expected long-term rate of return on plan assets	3.30%	4.20%	7.30%

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Note 11 - Employee Retirement Plans - Fair Value of Pension Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Fair value of plan assets	$ 227,669	$ 198,416
Fair Value, Inputs, Level 1 [Member]
Fair value of plan assets	9,314	8,671
Fair Value, Inputs, Level 2 [Member]
Fair value of plan assets	218,355	189,745
Fair Value, Inputs, Level 3 [Member]
Fair value of plan assets
UNITED STATES
Fair value of plan assets	36,007	36,689	$ 34,125
UNITED STATES | Defined Benefit Plan, Cash [Member]
Fair value of plan assets	170	166
UNITED STATES | Defined Benefit Plan, Cash [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of plan assets	170	166
UNITED STATES | Defined Benefit Plan, Cash [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of plan assets
UNITED STATES | Defined Benefit Plan, Cash [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of plan assets
UNITED STATES | Pooled Separate Accounts [Member]
Fair value of plan assets	28,071	29,046
UNITED STATES | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of plan assets
UNITED STATES | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of plan assets	28,071	29,046
UNITED STATES | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of plan assets
UNITED STATES | Guaranteed Deposit Account [Member]
Fair value of plan assets	7,766	7,477
UNITED STATES | Guaranteed Deposit Account [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of plan assets
UNITED STATES | Guaranteed Deposit Account [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of plan assets	7,766	7,477
UNITED STATES | Guaranteed Deposit Account [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of plan assets
Foreign Plan [Member]
Fair value of plan assets	191,662	161,726	$ 156,410
Foreign Plan [Member] | Defined Benefit Plan, Cash [Member]
Fair value of plan assets	480	608
Foreign Plan [Member] | Defined Benefit Plan, Cash [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of plan assets	480	608
Foreign Plan [Member] | Defined Benefit Plan, Cash [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of plan assets
Foreign Plan [Member] | Defined Benefit Plan, Cash [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of plan assets
Foreign Plan [Member] | Pooled Separate Accounts [Member]
Fair value of plan assets	182,518	153,222
Foreign Plan [Member] | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of plan assets
Foreign Plan [Member] | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of plan assets	182,518	153,222
Foreign Plan [Member] | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of plan assets
Foreign Plan [Member] | Depository Account [Member]
Fair value of plan assets	8,664	7,897
Foreign Plan [Member] | Depository Account [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of plan assets	8,664	7,897
Foreign Plan [Member] | Depository Account [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of plan assets
Foreign Plan [Member] | Depository Account [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of plan assets

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Note 11 - Employee Retirement Plans - Allocation of Plan Assets (Details)	Mar. 31, 2018	Mar. 31, 2017
UNITED STATES
Actual plan asset allocations	100.00%	100.00%
Foreign Plan [Member]
Actual plan asset allocations	100.00%	100.00%
Defined Benefit Plan, Equity Securities [Member] | UNITED STATES
Actual plan asset allocations	57.00%	59.00%
Defined Benefit Plan, Equity Securities [Member] | Foreign Plan [Member]
Actual plan asset allocations	33.00%	38.00%
Corporate Debt Securities [Member] | UNITED STATES
Actual plan asset allocations	22.00%	20.00%
Corporate Debt Securities [Member] | Foreign Plan [Member]
Actual plan asset allocations	62.00%	57.00%
Other Plan Assets [Member] | UNITED STATES
Actual plan asset allocations	21.00%	21.00%
Other Plan Assets [Member] | Foreign Plan [Member]
Actual plan asset allocations	5.00%	5.00%

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Note 11 - Employee Retirement Plans - Estimated Future Benefit Payments (Details) $ in Thousands	Mar. 31, 2018 USD ($)
UNITED STATES
2019	$ 2,235
2020	2,287
2021	2,361
2022	2,413
2023	2,468
2024-2028	12,706
Foreign Plan [Member]
2019	7,545
2020	7,684
2021	7,832
2022	7,975
2023	8,122
2024-2028	$ 42,895

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Note 12 - Stock-based Compensation (Details Textual) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Mar. 31, 2018 USD ($) $ / shares shares	Mar. 31, 2017 USD ($) $ / shares shares	Mar. 31, 2016 USD ($) $ / shares
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $	$ 1,132
Number of Stock Option Plans	4
Common Stock, Capital Shares Reserved for Future Issuance	12,574
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $	$ 1,724	$ 2,149	$ 170
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $	59	984
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $	$ 747	$ 994	$ 951
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Estimated Grant Date Fair Value | $ / shares	$ 2.57	$ 2.52	$ 2.49
Allocated Share-based Compensation Expense, Net of Tax | $	$ 2,224
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $	$ 1,183
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Forfeiture Rate	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	10 years
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	292
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
Service-based Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	0.333%
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	4 years
2014 RSU Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	3,000
2014 RSU Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	292	266
2004 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	10,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	25.00%
2004 Non-Employee Directors Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	33.00%
2014 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	10,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	25.00%
2014 Non-Employee Directors Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	33.00%

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Note 12 - Stock-based Compensation - Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] shares in Thousands	12 Months Ended
	Mar. 31, 2018 $ / shares shares
Non-vested, number of shares (in shares) | shares	259
Non-vested, weighted-average grant date fair value per share (in dollars per share) | $ / shares	$ 13.36
Granted, number of shares (in shares) | shares	292
Granted, weighted-average grant date fair value per share (in dollars per share) | $ / shares	$ 16.93
Vested, number of shares (in shares) | shares	(101)
Vested, weighted-average grant date fair value per share (in dollars per share) | $ / shares	$ 13.36
Cancelled and forfeited, number of shares (in shares) | shares	(92)
Cancelled and forfeited, weighted-average grant date fair value per share (in dollars per share) | $ / shares	$ 13.36
Non-vested, number of shares (in shares) | shares	358
Non-vested, weighted-average grant date fair value per share (in dollars per share) | $ / shares	$ 16.27

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Note 12 - Stock-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
		Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Outstanding, number of shares (in shares)		2,719
Outstanding, average price (in dollars per share)	[1]	$ 13.65
Options granted, number of shares (in shares)		0
Options granted, average price (in dollars per share)	[1]
Options exercised, number of shares (in shares)		(433)
Options exercised, average price (in dollars per share)	[1]	$ 13.38
Options exercised, aggregate intrinsic value		$ 1,724	$ 2,149	$ 170
Options cancelled/forfeited, number of shares (in shares)		(392)
Options cancelled/forfeited, average price (in dollars per share)	[1]	$ 17.67
Options cancelled/forfeited, aggregate intrinsic value		$ 55
Outstanding, number of shares (in shares)		1,894	2,719
Outstanding, average price (in dollars per share)	[1]	$ 12.90	$ 13.65
Outstanding, average life (Year)	[2]	4 years 43 days
Outstanding, aggregate intrinsic value		$ 6,912
Exercisable, number of shares (in shares)		1,601
Exercisable, average price (in dollars per share)	[1]	$ 12.66
Exercisable, average life (Year)	[2]	3 years 233 days
Exercisable, aggregate intrinsic value		$ 6,224

[1] Weighted-average exercise price

[2] Weighted-average contractual life remaining

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Note 12 - Stock-based Compensation - Unvested Stock Options (Details) shares in Thousands	12 Months Ended
	Mar. 31, 2018 $ / shares shares
Unvested balance, number of shares (in shares) | shares	608
Unvested balance, weighted-average grant date fair value (in dollars per share) | $ / shares	$ 2.52
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares	0
Options granted, weighted-average grant date fair value (in dollars per share) | $ / shares
Options cancelled/forfeited, number of shares (in shares) | shares	(14)
Options cancelled/forfeited, weighted-average grant date fair value (in dollars per share) | $ / shares	$ 2.58
Options vested, number of shares (in shares) | shares	(301)
Options vested, weighted-average grant date fair value (in dollars per share) | $ / shares	$ 2.47
Unvested balance, number of shares (in shares) | shares	293
Unvested balance, weighted-average grant date fair value (in dollars per share) | $ / shares	$ 2.57

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Note 13 - Commitments and Contingencies (Details Textual) $ in Thousands		12 Months Ended
	Apr. 25, 2013	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($)
Operating Leases, Rent Expense, Net, Total		$ 7,374	$ 5,919	$ 6,352
Accrual for Environmental Loss Contingencies, Ending Balance		14,150
Greatbatch, Inc. v AVX Corporation [Member]
Loss Contingency, Damages Awarded, Value				$ 37,500
Loss Contingency Accrual, Adjustment		$ 1,500
Greatbatch, Inc. v AVX Corporation And Presidio Components v. American Technical Ceramics Corp. [Member]
Loss Contingency, Pending Claims, Number, Ending Balance		2
Unfavorable Regulatory Action - Environmental Matters [Member]
Loss Contingency Accrual, Ending Balance		$ 18,618	19,181
Loss Contingency, Accrual, Current		3,329	3,892
Loss Contingency, Accrual, Noncurrent		15,289	$ 15,289
Unfavorable Regulatory Action - Patent Infringement Matters [Member] | Greatbatch, Inc. v AVX Corporation [Member] | Minimum [Member]
Loss Contingency, Patents Allegedly Infringed, Number	1
Unfavorable Regulatory Action - Patent Infringement Matters [Member] | Greatbatch, Inc. v AVX Corporation [Member] | Maximum [Member]
Loss Contingency, Patents Allegedly Infringed, Number	6
Unfavorable Regulatory Action - Patent Infringement Matters [Member] | Greatbatch, Inc. v AVX Corporation And Presidio Components v. American Technical Ceramics Corp. [Member]
Loss Contingency Accrual, Ending Balance		$ 76,502

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Note 13 - Commitments and Contingencies - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Mar. 31, 2018 USD ($)
2019	$ 6,803
2020	4,844
2021	3,398
2022	2,340
2023	1,943
Thereafter	$ 2,277

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Note 14 - Derivative Financial Instruments (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Other Expense [Member]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net, Total	$ (791)	$ 460	$ (818)
Other Income [Member]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net, Total	$ (2,289)	(2,059)	1,231
Foreign Exchange Forward [Member]
Derivative Contract Maximum Maturity Term	120 days
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax	$ 5	1,095	40
Foreign Exchange Forward [Member] | Cost of Sales [Member]
Gain (Loss) on Derivative Instruments, Net, Pretax, Total	1,807	3,355	(773)
Foreign Exchange Forward [Member] | Sales [Member]
Gain (Loss) on Derivative Instruments, Net, Pretax, Total	(2,264)	1,710	$ 807
Foreign Exchange Contract [Member]
Derivative, Notional Amount	$ 156,238	$ 193,156

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Note 14 - Derivative Financial Instruments - Fair value of Derivative Instruments (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Prepaid Expenses and Other Current Assets [Member] | Designated as Hedging Instrument [Member]
Asset derivatives, fair value	$ 212	$ 1,151
Prepaid Expenses and Other Current Assets [Member] | Not Designated as Hedging Instrument [Member]
Asset derivatives, fair value	45	341
Accrued Expenses [Member] | Designated as Hedging Instrument [Member]
Liability derivatives, fair value	377	690
Accrued Expenses [Member] | Not Designated as Hedging Instrument [Member]
Liability derivatives, fair value	$ 137	$ 196

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Note 15 - Transactions With Affiliate (Details Textual) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Revenues, Total	$ 329,578	$ 431,795	$ 352,693	$ 331,354	$ 446,632	$ 340,799	$ 327,461	$ 314,823	$ 1,562,474	$ 1,312,661	$ 1,195,529
Gross Profit, Total	$ 73,702	$ 82,103	$ 77,273	$ 73,846	$ 85,640	$ 79,391	$ 61,799	$ 69,863	318,862	$ 284,755	$ 289,069
Kyocera Resale Products [Member]
Revenues, Total									296,316
Gross Profit, Total									18,177
AVX Resale Products [Member] | Kyocera Corporation [Member]
Revenues, Total									$ 21,892

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Note 15 - Transactions With Affiliate - Schedule of Related Party Transactions (Details) - Kyocera Corporation [Member] - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Purchases of resale inventories, raw materials, supplies, equipment, and services	$ 256,660	$ 303,793	$ 233,637
Dividends paid	54,810	52,983	51,156
Product and Equipment Sales to Affiliates [Member]
Revenue from Related Parties	$ 26,069	$ 30,303	$ 22,230

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Note 16 - Segment and Geographic Information (Details Textual) $ in Thousands	3 Months Ended								12 Months Ended
	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($)
Number of Reportable Segments									3
Revenues, Total	$ 329,578	$ 431,795	$ 352,693	$ 331,354	$ 446,632	$ 340,799	$ 327,461	$ 314,823	$ 1,562,474	$ 1,312,661	$ 1,195,529
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Number of Major Customers	0				0				0	0
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Number of Major Customers	0				1				0	1
Concentration Risk, Percentage										12.00%
Intersegment Eliminations [Member]
Revenues, Total									$ 0

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Note 16 - Segment and Geographic Information - Reportable Segment Revenue, Profit and Assets (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net sales	$ 329,578	$ 431,795	$ 352,693	$ 331,354	$ 446,632	$ 340,799	$ 327,461	$ 314,823	$ 1,562,474	$ 1,312,661	$ 1,195,529
Operating profit (loss)									179,834	163,557	123,984
Depreciation and amortization									59,788	42,687	38,951
Total Assets	2,672,766				2,477,413				2,672,766	2,477,413
Goodwill	316,298				213,051				316,298	213,051
Capital expenditures									100,537	66,288	48,103
Corporate, Non-Segment [Member]
Operating profit (loss)									(60,769)	(59,963)	(111,002)
Depreciation and amortization									10,654	10,035	5,108
Total Assets	330,779				305,255				330,779	305,255
Capital expenditures									916	1,251	2,437
Segment Reconciling Items [Member]
Cash, A/R, and investments in securities	1,111,716				1,294,129				1,111,716	1,294,129
Electronic Components [Member] | Operating Segments [Member]
Net sales									938,857	875,570	822,083
Operating profit (loss)									204,624	190,007	198,268
Depreciation and amortization									32,024	27,543	28,460
Total Assets	613,385				573,519				613,385	573,519
Capital expenditures									61,581	50,982	36,400
Electronic Components [Member] | Segment Reconciling Items [Member]
Goodwill	278,247				202,774				278,247	202,774
Interconnect, Sensing and Control Devices [Member] | Operating Segments [Member]
Net sales									327,301	118,163	111,609
Operating profit (loss)									17,802	16,437	19,954
Depreciation and amortization									17,088	5,093	5,300
Total Assets	241,959				56,295				241,959	56,295
Capital expenditures									38,040	14,054	9,237
Interconnect, Sensing and Control Devices [Member] | Segment Reconciling Items [Member]
Goodwill	38,051				10,277				38,051	10,277
KED Resale [Member] | Operating Segments [Member]
Net sales									296,316	318,928	261,837
Operating profit (loss)									18,177	17,076	16,764
Depreciation and amortization									22	16	83
Total Assets	$ 18,629				$ 35,164				18,629	35,164
Capital expenditures										1	29
Ceramic Components [Member] | Electronic Components [Member] | Operating Segments [Member]
Net sales									226,204	188,568	176,502
Tantalum Components [Member] | Electronic Components [Member] | Operating Segments [Member]
Net sales									366,194	314,723	311,888
Advanced Components [Member] | Electronic Components [Member] | Operating Segments [Member]
Net sales									346,459	372,279	333,693
KCP Resale [Member] | KED Resale [Member] | Operating Segments [Member]
Net sales									36,090	30,027	23,751
KDP And KCD Resale [Member] | KED Resale [Member] | Operating Segments [Member]
Net sales									$ 260,226	$ 288,901	$ 238,086

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Note 16 - Segment and Geographic Information - Schedule of Geographical Information (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net sales	$ 329,578	$ 431,795	$ 352,693	$ 331,354	$ 446,632	$ 340,799	$ 327,461	$ 314,823	$ 1,562,474	$ 1,312,661	$ 1,195,529
Property, plant and equipment, net	418,286				239,951				418,286	239,951	217,998
Americas [Member]
Net sales									399,963	381,695	358,372
Property, plant and equipment, net	134,656				110,235				134,656	110,235	91,674
Europe [Member]
Net sales									581,255	352,064	339,768
Property, plant and equipment, net	191,727				77,981				191,727	77,981	77,619
Asia [Member]
Net sales									581,256	578,902	497,389
Property, plant and equipment, net	$ 91,903				$ 51,735				$ 91,903	$ 51,735	$ 48,705

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Note 17 - Summary of Quarterly Financial Information (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net sales	$ 329,578	$ 431,795	$ 352,693	$ 331,354	$ 446,632	$ 340,799	$ 327,461	$ 314,823	$ 1,562,474	$ 1,312,661	$ 1,195,529
Gross profit	73,702	82,103	77,273	73,846	85,640	79,391	61,799	69,863	318,862	284,755	289,069
Net income	$ 33,857	$ (93,212)	$ 34,818	$ 31,484	$ 31,820	$ 35,519	$ 26,520	$ 29,889	$ 4,910	$ 125,785	$ 101,535
Basic (in dollars per share)	$ 0.20	$ (0.55)	$ 0.21	$ 0.19	$ 0.19	$ 0.21	$ 0.16	$ 0.18	$ 0.03	$ 0.75	$ 0.61
Diluted (in dollars per share)	$ 0.20	$ (0.55)	$ 0.21	$ 0.19	$ 0.19	$ 0.21	$ 0.16	$ 0.18	$ 0.03	$ 0.75	$ 0.60

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Note 18 - Subsequent Events (Details Textual) - Kumatec [Member] - Subsequent Event [Member] € in Millions	Apr. 30, 2018 EUR (€)
Business Combination, Consideration Transferred, Total	€ 12.5
KUMATEC Hydrogen GmbH Co. KG [Member]
Business Combination, Equity Investment Acquired, Percentage of Interest	50.00%