XML 33 R16.htm IDEA: XBRL DOCUMENT v3.7.0.1
Impairment Charges
12 Months Ended
Mar. 31, 2016
Property, Plant and Equipment [Abstract]  
Impairment Charges
Impairment Charges
During fiscal year 2017 the Company incurred impairment charges of $10.3 million. During fiscal years 2016 and 2015, the Company incurred no impairment charges. The impairment charges are recorded on the Consolidated Statements of Operations line item “Write down of long-lived assets” in fiscal year 2017.
In fiscal year 2017, Film and Electrolytic incurred impairment charges totaling $8.2 million ($0.18 per basic share and $0.15 per diluted share). The impairment charges consisted of the following two actions.
On August 31, 2016, KEMET Electronics Corporation, a wholly-owned subsidiary of KEMET made the decision to shut-down operations of its wholly-owned subsidiary, KFM. Operations at KFM’s Knoxville, Tennessee plant ceased as of October 31, 2016. KFM supplied formed foil to the Company’s Film and Electrolytic Business Group, as well as to certain third party customers. The Company anticipates that Film and Electrolytic will achieve raw material cost savings by purchasing its formed foil from suppliers that have the advantage of lower utility costs. The Company recorded impairment charges related to KFM totaling $4.1 million comprised of $3.0 million for the write down of property plant and equipment and $1.1 million for the write down of intangible assets. In addition, the Company has accrued severance charges and restructuring costs described in Note 3, “Restructuring Charges.”
The Company has also recorded impairment charges of $4.1 million related to a decline in real estate market conditions surrounding its vacated Sasso Marconi, Italy manufacturing facility. KEMET used a capitalization of income method to estimate fair value taking into account the surface area of the property, the lease price per unit of surface area, and a weighted average cost of capital. The measurements utilized to determine the fair value of the property represent inputs that are observable or can be corroborated by observable market data (Level 2) in accordance with the fair value hierarchy. Due to the operating loss incurred by Film and Electrolytic in the twelve-month period ending March 31, 2017, we tested its long-lived assets for impairment as of March 31, 2017 and concluded that the long-lived assets for Film and Electrolytic were not impaired.
In fiscal year 2017, Solid Capacitors incurred impairment charges totaling $2.1 million ($0.04 per basic share and $0.04 per diluted share) related to the relocation of our leased K-salt facility to our existing Matamoros, Mexico facility. In addition, the Company has accrued severance charges described in Note 3 “Restructuring Charges” and has incurred equipment relocation costs of approximately $0.6 million during fiscal year 2017 and expects to incur an additional $0.7 million through June of 2017.