Concentrations of Risks

9 Months Ended

Dec. 31, 2012

Concentrations of Risks

Concentrations of Risks

Note 14. Concentrations of Risks

Sales and Credit Risks

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

Electronics distributors are an important distribution channel in the electronics industry and accounted for 44% of the Company’s net sales in the nine months ended December 31, 2012 and 2011.  As a result of the Company’s concentration of sales to electronics distributors, the Company may experience fluctuations in the Company’s operating results as electronics distributors experience fluctuations in end-market demand or adjust their inventory stocking levels.

Employee Risks

As of December 31, 2012, KEMET had approximately 9,800 employees in the following locations:

Mexico	4,800
Asia	2,400
Europe	1,900
United States	700

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

Mexico	3,300
Italy	700
Bulgaria	200
Indonesia	200
China	200
Finland	200
Portugal	100
Sweden	100

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