SECURITIES AND EXCHANGE COMMISSION
. WASHINGTON, D.C. 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE YEAR ENDED MARCH 31, 1996 Commission File No. 1-10431
. AVX CORPORATION
. (Exact Name of Registrant as Specified in its Charter)
Delaware 33-0379007
. (State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
. 801 17th Avenue South
Myrtle Beach, South Carolina 29577
(803) 448-9411
(address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Name Of Each Exchange
On Which Registered
Common Stock, New York Stock Exchange
$.01 par value per share
Securities Registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 of 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 [X] 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. [X]
Based on the closing sales price of $22.00 on May 24, 1996, the aggregate
market value of the voting stock held by non-affiliates of the registrant
was $480,700,000.
As of May 24, 1996, the number of shares outstanding of the registrant's
Common Stock, par value $.01 per share, was 88,000,000 shares.
. DOCUMENTS INCORPORATED BY REFERENCE
There is incorporated by reference in Part III on this Annual Report on
Form 10-K the information contained in the registrant's proxy statement
for its annual meeting of stockholders to be held on July 18, 1996.
PART I
Item 1. Business
AVX Corporation (together with its consolidated subsidiaries,
"AVX" or the "Company") is a leading worldwide manufacturer and
supplier of a broad line of passive electronic components and
related products. A substantial portion of the Company's
passive electronic component sales are of ceramic and tantalum
capacitors, both in "leaded" and "surface-mount" versions.
Capacitors are used in virtually all electronic products to
store, filter or regulate electric energy. Ceramic capacitors
and tantalum capacitors are among the fastest growing types of
capacitors. The Company also manufactures and sells electronic
connectors and distributes and sells certain passive components
and connectors manufactured by Kyocera Corporation of Japan, a
public company, ("Kyocera").
The Company's strategy is to focus on:
. * customer service, through the breadth and quality of its
product line, as well as its ability to respond in a timely
manner to its customers' component design and delivery
requirements;
. * low-cost, high-quality manufacturing, through utilization of
state-of-the-art facilities and skilled labor around the world;
. * global coordination of marketing and manufacturing, through
manufacturing operations located worldwide and the assignment of
global customer account executives to cover the Company's major
multi-national customers; and
. * innovative and unique products and manufacturing processes,
developed through emphasis on advanced technologies at the
Company's research laboratories and participation in its
customers' long-range product development programs.
The Company's customers include leading OEMs in such industries
as telecommunications, computers, automotive electronics,
medical devices and instrumentation, industrial instrumentation,
military and aerospace electronic systems, and consumer
electronics. Sales of Company products are made by independent
manufacturers' representatives, Company-employed direct sales
personnel, and independent electronic component distributors.
In recent years there has been a substantial increase in the
sales of capacitors resulting from overall growth in the
electronics industry. Increasing sales of capacitors can be
particularly attributed to:
* the development of new products and applications in
established electronics markets, such as cellular telephones and
personal computers;
* the proliferating use of electronic systems in products in
which such use had been historically absent or limited, such as
automobiles, home appliances, and medical equipment; and
* the increase in the number of capacitors required in certain
electronic products with higher levels of complexity and
functionality, such as those that use state-of-the-art
microprocessors.
The Company's executive offices are located in Myrtle Beach,
South Carolina and its manufacturing facilities are located in
North America, Europe and Asia.
Public Offering
From January 1990 through August 15, 1995, the Company was
wholly-owned by Kyocera. On August 15, 1995, Kyocera sold 22.9%,
or 19,650,000 of the Company's common shares, and the Company
sold an additional 2,200,000 common shares, in a public
offering. As a result, Kyocera currently owns 75.2% of the
Company's common shares.
. -2-
Products
AVX offers an extensive line of passive components, designed to
provide its customers with "one-stop shopping" for substantially
all of their passive component needs. Ceramic and tantalum
capacitors accounted for approximately 60% of the Company's net
sales in fiscal 1996. Advanced products, which are designed and
manufactured by the Company in cooperation with customers to
meet the requirements of specific applications, represented
about 12% of the Company's net sales in fiscal 1996. Connectors
accounted for approximately 8% of net sales and the remaining
20% of AVX's net sales in fiscal 1996 came from its sales of
certain products manufactured by Kyocera, for which the Company
has a non-exclusive license to distribute and sell everywhere in
the world except Japan.
Capacitors
AVX manufactures a full line of multi-layered ceramic and solid
tantalum capacitors in many different sizes and configurations.
The Company manufactures approximately 100 million capacitors
each day. The Company's strategic focus on the growing use of
ceramic and tantalum capacitors is reflected in its investment
during the past three years of approximately $212 million
primarily to increase its capacitor manufacturing capacity. The
Company believes that sales of ceramic and tantalum capacitors
will continue to be among the most rapidly growing in the
worldwide capacitor market because technological advances have
been constantly expanding the number and type of applications
for these products.
Tantalum and ceramic capacitors commonly are used in
conjunction with integrated circuits and are best suited for
applications requiring lower to medium capacitance values.
Generally, ceramic capacitors are more cost-effective at lower
capacitance values, and tantalum capacitors are more
cost-effective at medium capacitance values. Capacitance is the
measure of the capacitor's ability to store energy.
Ceramic and tantalum capacitors are produced by the Company in
two basic versions: leaded and surface-mount. Leaded capacitors
are attached to a circuit board using lead wires while
surface-mount capacitors are attached directly to a circuit
board. In recent years there has been significant industry-wide
growth in the use of surface-mount capacitors, and industry
analysts have predicted that this would cause the market for
leaded capacitors to decline significantly. In certain
applications, however, leaded capacitors continue to be the
component of choice, and in certain other applications, the
worldwide shortage of surface-mount capacitors experienced early
in fiscal 1996 led customers to utilize leaded capacitors where
possible. The Company's sales of leaded capacitors have
remained relatively stable during the last two years.
Advanced Products
To fill the needs of its customers, the Company's advanced
products engineers work with certain customers' in-house
technical staffs to design, produce and manufacture special
products to meet the specifications of particular applications.
The manufacture of special products permits AVX, through its
research and development activities, to make technological
advances, provide the customer with a design solution to fit its
needs, gain a marketing inroad with the customer with respect to
AVX's complete product line and, in some cases, develop products
that can be sold to additional customers in the future. AVX's
advanced products division presently has significant ongoing
projects with a variety of key customers in the computer,
telecommunications, automotive and medical fields.
Connectors
The connector division of the Company manufactures high-quality
electronic connectors and inter-connect systems for use in the
computer, telecommunications, automotive electronics, medical
device, military and aerospace industries. The Company's
comprehensive product line includes a variety of
industry-standard connectors as well as products designed
specifically for its customers' unique applications. The
Company produces fine pitch, or small centerline, connectors,
many of which have been selected by leading OEMs for
applications in cellular phones, pagers, printers and notebook
computers. The Company also has developed a value-added
business in flat ribbon cable assembly and in backpanel, or card
edge, assemblies.
Kyocera Products
The Company's distribution and sale of certain Kyocera products
throughout the world, except in Japan, broaden the Company's
range of products and further facilitate its ability to offer
"one-stop shopping" for its customers' electronic components
needs. Kyocera's product lines sold by the Company include
ceramic capacitors, hybrids, saw devices, resistor networks,
trimmers, chip resistors, ceramic filters, resonators,
connectors and piezo acoustic devices.
. -3-
Marketing, Sales and Distribution
The Company places a high priority on solving customers'
electronic component problems and responding to their needs.
AVX frequently forms teams of its marketing, research and
development, and manufacturing personnel to work with customers
to design and manufacture products to suit their specific
requirements.
The Company's products are sold primarily to manufacturers and,
to a much lesser extent, to United States and foreign government
agencies. The Company has also qualified products under various
military specifications, approved and monitored by the United
States Defense Electronic Supply Center ("DESC"), and under
certain foreign military specifications.
Approximately 46.7%, 25.1% and 28.2% of the Company's net sales
for fiscal 1996, were to customers in North America, Europe, and
Asia, respectively. Financial information relating to geographic
operations is set forth in Part IV, item 14(a), of this report.
The Company's products are marketed worldwide through
independent manufacturers' representatives who are compensated
solely on a commission basis, as well as by the Company's own
sales personnel and independent electronic component
distributors. The Company has regional sales personnel in
strategic locations to provide technical and sales support for
independent manufacturers' representatives and independent
electronic component distributors. The Company believes that
this combination of distribution channels provides a high level
of market penetration and efficient coverage of its customers on
a cost-effective basis.
Among the Company's customers are Motorola Inc., American
Telephone and Telegraph Corporation, L.M. Ericsson
Telefonaktiebolaget, OY Nokia AB., Northern Telecom and Siemens
AG in the telecommunications industry; International Business
Machines Corporation, Compaq Computer Corp., Seagate Technology
International, Western Digital Corp., Acer Incorporated, Intel
Corp., and Samsung Co. Limited in the computer industry; and
Ford Motor Co., Robert Bosch GmbH, General Motors Corp. and
Magneti Marelli S.p.A. in the automotive industry. The
Company's largest customers vary on a year-to-year basis, and no
customer has a long-term commitment to purchase products of the
Company. No one customer has accounted for more than 10% of net
sales for the past three years.
AVX had a backlog of orders of approximately $250.6 million at
March 31, 1996, $316.7 million at March 31, 1995 and $195.0
million on March 31, 1994. Orders may be canceled by a customer
at any time, subject to cancellation charges under certain
circumstances. The backlog reduction at March 31, 1996, when
compared to March 31, 1995, reflects the electronic components
industry's tight supply situation in 1995, which eased in the
latter half of fiscal 1996 as demand softened and production
capacity increased. The reduction in delivery lead times has
decreased customers' long-term ordering patterns, experienced in
the first half of fiscal 1996, such that orders are currently
placed on an as needed basis. The backlog outstanding at any
time is not necessarily indicative of the level of business to
be expected in any ensuing period since certain orders are
placed and delivered within the same period.
Research and Development
AVX's emphasis on research and development is reflected by the
fact that most of the Company's manufactured products and
manufacturing processes have been designed and developed by its
own engineers and scientists. The Company's new 60,000
square-foot research and development facility in Myrtle Beach,
South Carolina, constructed in fiscal 1995 provides centralized
coordination of AVX's global research and development efforts.
The Company also maintains research and development staffs at
its facilities in Coleraine, Northern Ireland, Jerusalem,
Israel, and Paignton, England.
The Company's research and development effort places a priority
on the design and development of innovative products and
manufacturing processes and engineering advances in existing
product lines and manufacturing operations. Other areas of
emphasis include material synthesis and the integration of
passive components for applications requiring reduced size, and
lower manufacturing costs associated with board assembly.
Research and development expenditures were approximately $18.1
million, $14.9 million and $12.7 million during fiscal 1996,
1995 and 1994, respectively. These amounts do not include
substantial additional amounts that the Company has historically
expended on design and development of machinery and equipment,
and engineering for existing products and processes.
. -4-
While AVX owns United States patents as well as corresponding
patents in various other countries, and also has patent
applications pending, its patents are not in the aggregate
material to the successful operation of its business.
Transactions with Kyocera
Since the acquisition of AVX by Kyocera in January 1990,
Kyocera and AVX have engaged in a significant number and variety
of related company transactions, including, without limitation,
the transactions referred to in footnote 9 to the financial
statements set forth in Part IV, item 14(a), of this report. The
Company has not performed any studies or analyses to determine
whether the terms of past transactions with Kyocera have been
equivalent to arm's-length transactions and can not state with
any certainty the extent to which such transactions are
comparable to those which might have been obtained from a
non-affiliated third party.
The Company also has established several ongoing arrangements
with Kyocera and has executed several agreements, the more
significant of which are described below. Except for the Buzzer
Assembly Agreement, each of the agreements described below
contains provisions requiring that the terms of any transaction
under such agreement be equivalent to that which an independent
unrelated party would agree at arm's-length and all agreements are
subject to the approval of the Special Advisory Committee of the AVX Board
of Directors. The Special Advisory Committee is comprised of
the independent directors of the Company and is required to
review and approve the terms of all transactions between the
Company and Kyocera.
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 in territories outside of
Japan, and (ii) Kyocera will act as the non-exclusive
distributor of certain AVX-manufactured products within Japan.
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.
Disclosure and Option to License Agreement. Pursuant to the
Disclosure and Option to License Agreement (the "License
Agreement"), the Company and Kyocera agree to exchange
confidential information relating to the development and
manufacture of multi-layered ceramic capacitors and various
other ceramic products. The expiration date of the License
Agreement is March 31, 2005.
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 ceramic
capacitors and other ceramic products. The expiration date of
the Supply Agreement is March 31, 2000.
Buzzer Assembly Agreement. Pursuant to the Buzzer Assembly
Agreement, AVX assembles certain electronic components for
Kyocera in the Company's Juarez, Mexico facility. Kyocera pays
AVX a fixed cost mutually agreed upon by the parties for each
component assembled plus a profit margin. The Agreement will
terminate on March 31, 2000, subject to the right of either
party to terminate upon six months 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 electrical components. The
agreement will terminate on March 31, 2000.
Raw Materials
Although most materials incorporated in the Company's products
are available from a number of sources, certain materials
(particularly palladium and tantalum) are available only from a
relatively limited number of suppliers.
Palladium, a principal raw material used in the manufacture of
ceramic capacitors, is primarily purchased from various
companies in the form of palladium sponge and ingot. The main
areas of mining of palladium are in Russia and South Africa.
Palladium is considered a commodity and is subject to price
volatility and has fluctuated in a range of approximately $124
to $180 per troy ounce during the last three years. An
inability of the Company to pass on a significant increase in palladium
cost through to its customers could have a material adverse
effect on the Company's results of operations. The Company is
presently researching substitutes for palladium.
. -5-
Tantalum powder is a principal material used in the manufacture
of tantalum capacitor products. This product is purchased under
annual contracts with suppliers from various parts of the world
at prices that are subject to periodic adjustment. The Company
is a major consumer of the world's annual tantalum production.
Although the Company believes that there is currently no problem
with the procurement of tantalum powder and that the tantalum
required by the Company has generally been available in
sufficient quantity to meet requirements, the limited number of
tantalum powder suppliers could lead to higher prices. An
inability of the Company to pass on a significant increase in tantalum cost
to its customers could have a material adverse effect on the
Company's results of operations.
AVX internally develops and produces a majority of the ceramic
raw materials used in its production processes and is expanding
its ceramic production operations in order to meet increased
demand. The Company believes that it is the only United States
capacitor manufacturer that processes its own ceramic materials.
Competition
The Company encounters strong competition in its various
product lines from both domestic and foreign manufacturers.
Competitive factors in the markets of the Company's products
include product quality and reliability, breadth of product
line, customer service, technological innovation, timely
delivery, and price. The Company believes that it competes
favorably on the basis of each of these factors. The breadth of
the Company's product offering enables AVX to strengthen its
market position by providing its customers with "one-stop
shopping" with one of the broadest selections of passive
electronic components available from one source. The Company's
major competitors are KEMET Corporation, Murata Manufacturing
Company, Ltd., NEC Corporation, TDK Corporation and Vishay
Intertechnology, Inc.
Employees
As of March 31, 1996, AVX employed approximately 12,000 full
time employees. Approximately 4,000 of these employees are
employed in the United States and 8,000 are employed outside the
United States. Of the 4,000 employees located in the United
States, approximately 2,200 are covered by collective-bargaining
arrangements. In addition, some foreign employees are members
of various trade and government-affiliated unions. The Company
believes that its relationship with its employees is good, and
the Company has not had a work stoppage as a result of
collective bargaining difficulties during the past 20 years.
Environmental Matters
The Company is subject in the United States to federal, state
and local laws and regulations concerning the environment and to
the environmental laws and regulations of the other countries in
which it has manufacturing facilities. Based on the Company's
periodic review of the operating policies and practices at all
its facilities, the Company believes that its operations
currently comply in all material respects with all such laws and
regulations.
The Company has been identified by the federal 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 ten sites at which
remediation is required. Because CERCLA has been construed to
authorize joint and several liability, EPA could seek to recover
all clean-up costs from any one of the PRPs at a site despite
the involvement of other PRPs. At all but one site, financially
responsible PRPs other than the Company also are, or have been,
involved in site investigation and clean-up activities.
Therefore, the Company believes that any liability resulting
from these sites will be apportioned between the Company and
other PRPs.
To resolve its liability at each of the sites at which it has
been named a PRP, the Company has entered into various
administrative orders and consent decrees (collectively,
"Decrees") with federal and state regulatory agencies, governing
the timing and nature of investigation and remediation. The
Company has paid, or reserved for, all amounts required under
the terms of these Decrees corresponding to its apportioned
share of the liabilities. Such reserves for remediation totaled
$8.5 million at March 31, 1996. As is customary, the Decrees at sites
where the PRPs are not themselves implementing the chosen remedy
contain provisions allowing 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 during clean-up or substantial
cost overruns for the chosen remedy. The existence of such
reopener provisions, combined with the difficulties of reliably
estimating clean-up costs and the joint and several nature of
CERCLA liability, makes it difficult to predict the ultimate
liability at any site with certainty. While no assurance can be
given, the Company does not believe that any additional costs to
be incurred by the Company at any of the sites will have a
material adverse effect on the Company's financial condition or
results of operations.
. -6-
In addition, the Company does not believe that any
investigation or clean-up that may be required at any other
locations will have a material adverse effect on the Company's
financial condition or results of operations.
Executive Officers of the Registrant
The following table provides certain information regarding the
executive officers of the Company as of May 24, 1996.
. Name Age Position
Benedict P. Rosen 60 President, Chief Executive Officer, and
Director
John S. Gilbertson 52 Executive Vice President, Chief Operating
Officer, Corporate Secretary and Director
Donald B. Christiansen 57 Chief Financial Officer, Vice President,
Treasurer, and Director
C. Marshall Jackson 47 Senior Vice President of Marketing
Ernie Chilton 52 Senior Vice President--Tantalum
S. M. Chan 40 Vice President of Marketing and Sales--Asia
Allan Cole 53 Vice President of Sales
Alan Gordon 47 Vice President of European Sales/Marketing
John L. Mann 53 Vice President of Quality
James Patterson 61 Vice President of Leaded Division
Benedict P. Rosen has served as President and Chief Executive
Officer of the Company since April 1993 and as a member of the
Board of Directors since January 1990. From February 1985 to
March 1993, Mr. Rosen has served as Executive Vice President of
AVX and has been employed by the Company since 1972. Mr. Rosen
has been a Senior Managing and Representative Director of
Kyocera since June 1995, and previously served as a Managing
Director of Kyocera from 1992 to June 1995. Mr. Rosen is a
Director of Nitzanim-AVX/Kyocera-Venture Capital Fund Ltd. and
Aerovox Corporation.
John S. Gilbertson has served as Executive Vice President and
Chief Operating Officer of the Company since April 1994, as
Corporate Secretary since April 1996, and as a member of the
Board of Directors since January 1990. From April 1992 until
March 1994, Mr. Gilbertson served as the Executive Vice
President of AVX. From September 1990 to March 1992, Mr.
Gilbertson served as Senior Vice President of AVX. Mr.
Gilbertson has been employed by AVX since 1981. Mr. Gilbertson
has been a Director of Kyocera since June 1995. Mr. Gilbertson
is a Director of MDT Corporation.
Donald B. Christiansen has served as Vice President of Finance,
Chief Financial Officer and Treasurer since April 1994, and as a
member of the Board of Directors since April 1992. From March
1992 until April 1994, Mr. Christiansen served as the Chief
Financial Officer of AVX. Prior to joining AVX in 1992, Mr.
Christiansen was employed for 33 years in various financial
positions, including Vice President of Finance and Chief
Financial Officer, with Sprague Technologies, Inc., an
electronic components manufacturer.
C. Marshall Jackson has served as Senior Vice President of
Marketing since April 1994. From January 1990 until March 1994,
Mr. Jackson was Vice President of AVX and has been employed by
the Company since 1969.
Ernie Chilton has served as Senior Vice President--Tantalum of
AVX since April 1994 and as a member of the Board of Directors
from February 1993 to July 1995. From January 1990 until
February 1993, Mr. Chilton served as Vice President of AVX. Mr.
Chilton has been employed by the Company since 1980.
. -7-
S. M. Chan has served as Vice President of Marketing and
Sales--Asia since April 1994. From April 1992 until March 1994,
Mr. Chan served as the Director of Marketing of AVX. Mr. Chan
has been employed by AVX since 1991.
Allan Cole has served as Vice President of Sales of the Company
since May 1987. Mr. Cole has been employed by AVX since 1977.
Alan Gordon has served as Vice President--European
Sales/Marketing of AVX since February 1993. From April 1991
until February 1993, Mr. Gordon served as the Director of
Marketing of AVX. Mr. Gordon has been employed by AVX since
1989. Prior to joining AVX, Mr. Gordon worked at Lex
Electronics.
John L. Mann has served as Vice President of Quality of the
Company since May 1986. From March 1984 until May 1986, Mr.
Mann served as the Corporate Director of Quality.
James Patterson has served as Vice President of the Leaded
Division of AVX since February 1993. From June 1992 until
February 1993, Mr. Patterson served as the Division Vice
President of AVX. Mr. Patterson has been employed by the
Company since 1965.
Item 2. Properties
The Company conducts manufacturing operations throughout the
world. All the Company's operations around the world are
certified to the ISO 9000 international quality control
standards. ISO 9000 is a comprehensive set of quality program
standards developed by the International Organization for
Standardization. Recently, certain facilities were qualified
under a new set of stringent QS 9000 quality standards developed
by the US automotive industry. A list of the Company's
facilities, their square footage, whether they are leased or
owned and a description of their use, follows:
. Type
. Square of Description
. Location Footage Interest of Use
UNITED STATES
Myrtle Beach,SC 382,005 Owned Research/Manufacturing/Headquarters
Myrtle Beach, SC 46,631 Leased Warehouse
Conway, SC 70,408 Owned Manufacturing
Biddeford, ME 72,000 Owned Manufacturing
Colorado Springs, CO 15,000 Owned Manufacturing
El Paso, TX 17,760 Leased Warehouse
New Orleans, LA 16,440 Leased Warehouse
Olean, NY 107,400 Owned Manufacturing
Raleigh, NC 206,000 Owned Warehouse/Manufacturing
Sun Valley, CA 25,000 Leased Manufacturing
Vancouver, WA 87,048 Leased Manufacturing
Vancouver, WA 10,024 Leased Warehouse
OUTSIDE THE UNITED STATES
Betzdorf, Germany 101,671 Owned Manufacturing
Biggleswade, England 10,000 Leased Manufacturing
Chihuahua, Mexico 104,848 Owned Manufacturing
Coleraine, N. Ireland 105,000 Owned Research/Manufacturing
Hong Kong 30,257 Owned Warehouse
Jerusalem, Israel 42,470 Leased Research/Manufacturing
Juarez, Mexico 84,000 Owned Manufacturing
Lanskroun, Czech
Republic 94,000 Leased Manufacturing
Larne, N. Ireland 120,000 Owned Warehouse/Manufacturing
Newmarket, England 52,000 Leased Manufacturing
Paignton, England 150,000 Owned Research/Manufacturing
San Salvador,
El Salvador 232,981 Owned Manufacturing
Singapore 29,417 Leased Warehouse
Singapore 20,083 Leased Manufacturing
. -8-
In addition to the foregoing, the Company owns and leases a
number of sales offices throughout the world.
Management believes that all its property, plant and equipment
is in good operating condition. The Company is constantly
upgrading its equipment and adding capacity through greater use
of automation. The Company's capital expenditures for plant and
equipment were $110.5 million for fiscal 1996 and $77.3 million
in fiscal 1995.
Item 3. Legal Proceedings
The Company is a party to various legal proceedings and
administrative actions, all of which are of an ordinary or
routine nature incidental to the operations of the Company.
Although it is difficult to predict the outcome of any legal
proceeding, in the opinion of the Company's management, such
procedures and actions should not, individually or in the
aggregate, have a material adverse effect on the Company's
financial condition or results of operations.
Item 4. Submission of Matters to a Vote of Securities Holders
During the fourth quater of the fiscal year covered by this
report, no matter was submitted to a vote of security holders of
the Company.
. PART II
Item 5. Market for the Registrant's Securities and Related
Stockholder Matters
Market for Common Stock
The Company's Common Stock is listed on the New York Stock
Exchange and trades under the symbol AVX. The following presents
the high and low sale prices for the Company's Common Stock for
each quarter since the IPO in August 1995 as reported on the New
York Stock Exchange Composite Tape.
. High Low
Second Quarter $38 $29 3/4
Third Quarter 34 1/4 21 1/8
Fourth Quarter 27 1/2 20 7/8
Holders of Record
At May 24, 1996, there were approximately 18,500 holders of
record of the Company's common stock.
Dividends
The Company has declared and paid cash dividends of $.055 per
share of common stock for the quarter ended March 31, 1996. The
Company declared and paid cash dividends for the quarters ended
September 30, 1995 and December 31, 1995 of $.05 per share of
common stock. The Company declared and paid cash dividends in
each of the two fiscal years ended March 31, 1995 and the
quarter ended June 30, 1995 equal to approximately 35% of its
net income. Future dividends, if any, will depend on the
Company's profitability and anticipated capital requirements.
. -9-
Item 6. Selected Financial Data
The following table sets forth selected financial data for the
Company for the five years ended March 31, 1996. The financial
data set forth below should be read in conjunction with the
Company's Financial Statements and the Notes thereto included
elsewhere in this Form 10-K.
. Year Ended March 31,
1996 1995 1994 1993 1992
(dollars in thousands, except per share data)
Income Statement Data:
Net sales $1,207,761 $988,893 $795,515 $718,235 $635,379
Cost of sales 886,494 777,687 639,058 569,583 503,386
Gross profit 321,267 211,206 156,457 148,652 131,993
Selling, general and
administrative expenses 116,586 101,013 100,875 99,862 89,269
Profit from operations 204,681 110,193 55,582 48,790 42,724
Interest income 5,096 2,018 749 510 1,033
Interest expense (2,352) (2,229) (2,792) (3,474) (4,645)
Other, net 1,655 1,218 1,439 3,282 971
Income before income taxes,
extraordinary item and
cumulative effect of accounting
change for income taxes 209,080 111,200 54,978 49,108 40,083
Provision for income taxes 71,344 36,329 19,817 20,221 19,487
Income before extraordinary
item and cumulative effect of
accounting change for
income taxes 137,736 74,871 35,161 28,887 20,596
Extraordinary item-utilization of
foreign tax loss carryforwards 2,536
Cumulative effect of accounting
change for income taxes 5,000
Net income $ 137,736 $ 74,871 $ 40,161 $ 31,423 $ 20,596
Income per share:
Before extraordinary item and
cumulative effect of accounting
change for income taxes $ 1.58 $ .87 $ .41 $ .34 $ .24
Extraordinary item .03
Cumulative effect
of accounting change
for income taxes .06
Net income $ 1.58 $ .87 $ .47 $ .37 $ .24
Average common shares
outstanding 87,175,000 85,800,000 85,800,000
85,800,000 85,800,000
Cash dividends per
common share $ .22 $ .31 $ .17 $ .13 $ .05
. As of March 31,
. 1996 1995 1994 1993 1992
. (in thousands)
Balance Sheet Data:
Working capital $357,930 $224,999 $189,528 $177,555 $155,122
Total assets 867,516 670,697 573,966 550,487 534,697
Long-term debt 8,507 9,544 10,427 15,529 21,780
Redeemable preferred stock 14,000
Stockholders' equity 624,000 456,266 400,834 378,502 373,675
. -10-
Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Condition
General
The Company's net sales have increased 22.1%, 24.3% and 10.8%
in the past three years, respectively, primarily as a result of
the Company increasing its production capacity and the expansion
of the electronic components industry. This expansion has been
due primarily to the growth of computer, telecommunications and
automotive manufacturers' usage of passive electronic
components. This sales increase occurred in spite of generally
lower selling prices for many of the Company's products. During
the last two quarters of fiscal 1996, the electronic component
industry has experienced a softening in demand as customers
reduce their level of inventory and suppliers reduce their lead
times.
The growth in sales, in units and dollars, coupled with
operating efficiencies and lower selling, general and
administrative expenses as a percentage of sales have
contributed to the significant increase in net income over the
past three years. In order to lower the costs of production,
the Company has expanded automation of the manufacturing
processes and transferred certain labor intensive manufacturing
processes from countries with high labor costs to lower labor
cost areas (such as the Czech Republic, El Salvador, and Mexico).
The following table sets forth the percentage relationships to
net sales of certain income statement items for the periods
presented.
. Year Ended March 31,
. 1996 1995 1994
Net sales 100.0% 100.0% 100.0%
Cost of sales 73.4 78.6 80.3
Gross profit 26.6 21.4 19.7
Selling, general and administrative expenses 9.6 10.3 12.7
Profit from operations 17.0 11.1 7.0
Income before income taxes
and cumulative effect of accounting
change for income taxes 17.3 11.2 6.9
Provision for income taxes 5.9 3.6 2.5
Net income 11.4 7.6 5.0
Results of Operations
Year Ended March 31, 1996 Compared to Year Ended March 31, 1995
Net sales for the year ended March 31, 1996 increased 22.1% to
$1,207.7 million from $988.9 million for the year ended March
31, 1995. The increase was primarily attributable to the growth
in the ceramic and tantalum products, particularly surface-mount
capacitors, and special products.
Gross profit for the year ended March 31, 1996 increased 52.1%
to $321.3 million (26.6% of net sales) from $211.2 million
(21.4% of net sales) in the year ended March 31, 1995. As a
result of increased worldwide demand for ceramic and tantalum
capacitors, overall sales prices in the 1996 year were more
stable compared to the 1995 year. Continued automation of the
manufacturing processes and higher volumes of through-put in the
factories have resulted in lower manufacturing costs for
products sold. Lower production costs were achieved despite an
increase in palladium prices. The cost of palladium, which is
used in the manufacture of ceramic capacitors, increased
approximately 6.0% in the 1996 year compared to the 1995 year.
This increased cost of sales by approximately $2.7 million. Cost
of sales in fiscal 1996 include approximately $3.5 million of
costs associated with the closure of a plant in the United
States which manufactured connector products and the relocation
of the production to the Company's existing facilities in
Europe. Cost of sales in fiscal 1995 included approximately $2.5
million of costs associated with the closure of the Company's
ceramic production facility in Rouen, France, and relocation of
the related production to Northern Ireland.
. -11-
Selling, general and administrative expenses in the year ended
March 31, 1996 were $116.6 million (9.6% of net sales), compared
with $101.0 million (10.3% of net sales) in the year ended March
31, 1995. The increase in expenses resulted primarily from
higher research and development spending, adjustments to
environmental remediation accruals based on revised estimates,
charges related to the Company's previous headquarters and
additional sales commissions due to increased sales volume.
Research and development expenditures, which encompass the
personnel and related expenses devoted to developing new
products and technical innovations, were $18.1 million and $14.9
million in fiscal 1996 and 1995, respectively.
As a result of the above factors, profit from operations in the
year ended March 31, 1996 increased 85.7% to $204.7 million from
$110.2 million in the year ended March 31, 1995.
The effective tax rate in the year ended March 31, 1996 was
34.1%, compared to 32.7% in the year ended March 31, 1995. The
increase in the 1996 year primarily results from higher foreign
income taxes.
For the reasons set forth above, net income in the year ended
March 31, 1996 increased 84.0% to $137.7 million (11.4% of net
sales) from $74.9 million (7.6% of net sales) in the year ended
March 31, 1995.
Year Ended March 31, 1995 Compared to Year Ended March 31, 1994
Net sales in fiscal 1995 increased 24.3% to $988.9 million from
$795.5 million in fiscal 1994. Most of the increase was
attributable to the growth in the ceramic and tantalum
surface-mount products, Kyocera products, and special products.
Sales of leaded capacitors did not increase materially in fiscal
1995 as compared with fiscal 1994.
Gross profit in fiscal 1995 increased 35.0% to $211.2 million
(21.4% of net sales) from $156.5 million (19.7% of net sales) in
fiscal 1994. To offset unit sales price declines, the Company
implemented cost reductions relating to raw materials used,
decreased labor costs by shifting production to lower labor cost
areas and achieved efficiencies in its factories through
increased automation. This resulted in higher volume of
through-put and increased gross profit. The number of
surface-mount ceramic capacitors produced in fiscal 1995
increased 24.0%, and the number of surface-mount tantalum
capacitors produced increased 67.0%, over the prior year. Cost
of sales in fiscal 1995 included approximately $2.5 million of
costs associated with the closure of the Company's ceramic
production facility in Rouen, France, and relocation of the
related production to Northern Ireland. Similarly, cost of
sales in fiscal 1994 included approximately $1.5 million of
costs related to the relocation of the Company's tantalum
manufacturing operations from Germany to England and the Czech
Republic.
The average market price for palladium, which is used in the
manufacture of ceramic capacitors, was approximately $150 per
troy ounce in fiscal 1995, compared to $128 per troy ounce in
fiscal 1994. The Company's actual cost of purchases was less
than the average market price each year as a result of favorable
forward delivery contracts and strategic purchases.
Nevertheless, cost of sales increased approximately $5.0 million
in fiscal 1995 due to the rise in palladium prices. The Company
is not aware of any impact that political and social conditions
in Russia and South Africa, the countries that are the primary
source of palladium metal, have had, or may have, on the price
and availability of palladium. The cost of tantalum, which is
the main ingredient used in the production of tantalum
capacitors, was stable in fiscal 1995 and fiscal 1994.
Selling, general and administrative expenses in fiscal 1995
were $101.0 million (10.3% of net sales), compared with $100.9
million (12.7% of net sales) in fiscal 1994. The modest size of
this increase in expenses resulted from management's ongoing
efforts to control costs.
Research and development expenditures were $14.9 million and
$12.7 million in fiscal 1995 and 1994, respectively.
As a result of the above factors, profit from operations in
fiscal 1995 increased 98.3% to $110.2 million from $55.6 million
in fiscal 1994.
The effective tax rate in fiscal 1995 was 32.7%, compared to
36.0% in the prior year, primarily as a result of lower state
income taxes.
. -12-
For the reasons set forth above, net income in fiscal 1995
increased 86.4% to $74.9 million (7.6% of net sales) from $40.2
million (5.0% of net sales) in fiscal 1994.
Financial Condition
Liquidity and Capital Resources
The Company's liquidity needs arise primarily from working
capital requirements, dividends and capital expenditures.
Historically, the Company has satisfied its liquidity
requirements through internally generated funds. As of March
31, 1996, the Company had a current ratio of 2.8 to 1, $131.6
million of cash and cash equivalents, $624.0 million of
stockholders' equity and an insignificant amount of long-term
debt.
Net cash from operating activities was $155.7 million in the
year ended March 31, 1996 compared to $126.2 million in the year
ended March 31, 1995 and $60.2 million in the year ended March
31, 1994. Increased net income and control over the growth of
working capital contributed to the increase.
Purchases of property and equipment were $110.5 million in
fiscal 1996, $77.3 million in fiscal 1995, and $61.1 million in
fiscal 1994. Expenditures for fiscal 1995 included approximately
$8.1 million for the purchase of property and construction of
the new research laboratory adjacent to the Myrtle Beach
production facility and corporate headquarters. The remaining
expenditures for fiscal 1995 and virtually all expenditures for
fiscal 1996 and 1994 were for expanding the production
capabilities of the ceramic and tantalum surface-mount and
special product lines. The Company's carrying value of its
equipment reflects the fact that depreciation expense for
machinery and equipment is generally computed using the
accelerated double declining- balance method.
The Company expects to construct facilities and purchase
equipment totaling approximately $130 to $150 million to
increase production capacity in fiscal 1997.
During the year ended March 31, 1996, a European subsidiary of
the Company borrowed 7.5 million deutschmarks under a one year
bank line of credit to repay an intercompany loan with AVX in
the United States. During fiscal 1996, $3.3 million of bank
loans were repaid. In fiscal 1996, 1995 and 1994, dividends of
$19.4 million, $26.2 million and $14.4 million, respectively,
were paid to stockholders.
In August 1995, the Company completed an initial public
offering of 2,200,000 shares of common stock at a price of
$25.50 per share resulting in proceeds (net of underwriting
commissions and offering costs) of $52.9 million. The proceeds
were used for general corporate purposes, including capital
expenditures and working capital.
The Company has established reserves in the three years ended
March 31, 1996 for its projected share of costs associated with
the correction and remediation of environmental conditions at
various sites. Such provisions and related expenditures have
not been material in any of these periods.
Based on the financial condition of the Company as of March 31,
1996, the Company believes that cash expected to be generated
from operating activities will be sufficient to satisfy the
Company's anticipated financing needs for working capital,
capital expenditures, environmental clean-up costs, research and
development expenses and any dividends to be paid for the
foreseeable future.
Hedging Operations
The Company's European sales generally are denominated in local
currencies whereas those in North America and Asia generally are
denominated in U.S. dollars. Approximately 25.0% of the
Company's revenues are generated in Europe. Also, certain
manufacturing and operating costs denominated in local
currencies are incurred in Europe, Asia, Mexico and Latin
America. As a result, fluctuations in currency exchange rates
affect the Company's results and cash flow. In order to
minimize the effects of currency exchange rates, the Company
periodically enters into forward exchange contracts to hedge
existing and anticipated external and intercompany foreign
currency transactions. Currency exchange gains and losses have
been immaterial during the three years ended March 31, 1996.
The Company also enters into forward delivery contracts for
certain precious metals used in its production processes. The
Company does not hold or issue derivative financial instruments
for speculative purposes.
. -13-
New Accounting Standards
The Financial Accounting Standards Board (the "Board") has
issued Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of", which is effective for
fiscal years beginning after December 15, 1995. Management
believes that the effect of adoption will not materially affect
the Company's financial condition or results of operations. In
addition, the Board has issued Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation", which allows
companies to account for employee stock compensation plans under
two different accounting methods. The Statement is effective for
transactions entered into in fiscal years that begin after
December 15, 1995. Management has not determined which
accounting method the Company will adopt.
Item 8. Financial Statements and Supplementary Data
The following Consolidated Financial Statements of the Company
and its subsidiaries, together with the report of independent
accountants thereon, are presented under Item 14 of this report:
. Page
Consolidated Balance Sheets, March 31, 1996 and 1995 16
Consolidated Statements of Income, Years Ended March 31, 1996,
1995 and 1994 17
Consolidated Statements of Stockholders' Equity, Years Ended
March 31, 1996,1995 and 1994 18
Consolidated Statements of Cash Flows, Years Ended March 31,
1996, 1995 and 1994 19
Notes to Consolidated Financial Statements 20
Report of Independent Accountants 30
All financial schedules are omitted because of the abscence of the conditions
under which they are required or because the information required is shown
in the financial statements or notes thereto.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
. PART III
Information with respect to Items 10, 11, 12 and 13 on Form
10-K is set forth in the Company's definitive proxy statement
filed with the Commission in June 1996.
. PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) Financial Statements and Financial Statement Schedules -
See Index to Consolidated Financial Statements at Item 8 of this
report.
(b) Reports on Form 8-K
None.
(c) Exhibits:
Documents Incorporated by Reference from Form S-1 Registration
Statement No. 33-94310:
. -14-
3.1 Restated Certificate of Incorporation of the Company
3.2 By-laws of the Company
10.1 1995 Stock Option Plan
10.2 Non-Employee Directors Stock Option Plan
10.3 Form of Employment Agreement between AVX Corporation and
Benedict P. Rosen
10.4 Products Supply and Distribution Agreement by and between
Kyocera Corporation and AVX Corporation
10.5 Disclosure and Option to License Agreement by and between
Kyocera Corporation and AVX Corporation
10.6 Management Incentive Plan
10.7 Deferred Compensation Plan
Documents Submitted Herewith:
21.1 Subsidiaries of the Registrant
23.1 Consent of Coopers & Lybrand L.L.P.
24.1 Power of Attorney
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/ Donald B. Christiansen
DONALD B. CHRISTIANSEN
Dated: June 4, 1996
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
Kazuo Inamori Chairman of the Board and Director
Benedict P. Rosen President and Chief Executive Officer
and Director
John S. Gilbertson Executive Vice President and Chief
Operating Officer and Director
Donald B. Christiansen Vice President of Finance, Chief
Financial Officer and Treasurer and Director
Marshall D. Butler Director
Carroll A. Campbell Director
Richard Tressler Director
Kensuke Itoh Director
Rodney N. Lanthorne Director
Masato Takeda Director
Masahiro Umemura Director
Masahiro Yamamoto Director
Yuzo Yamamura Director
By: /s/ Donald B. Christiansen
DONALD B. CHRISTIANSEN, Attorney-in-Fact
June 4, 1996
. -15-
<TABLE>
<CAPTION>
. March 31,
1996 1995
(dollars in thousands, except share data)
Current assets:
<S> <C> <C>
Cash and cash equivalents $131,601 $ 43,813
Accounts receivable, net 139,545 118,709
Inventories 243,155 200,469
Deferred income taxes 30,853 20,475
Other receivables-affiliate 2,429 2,354
Prepaid and other 13,562 11,174
Total current assets 561,145 396,994
Property and equipment:
Land 9,370 9,141
Buildings and improvements 109,574 107,436
Machinery and equipment 506,004 441,193
Construction in progress 46,030 26,737
670,978 584,507
Accumulated depreciation (404,432) (352,524)
266,546 231,983
Goodwill, net 36,067 38,595
Other assets 3,758 3,125
TOTAL ASSETS $867,516 $670,697
Current liabilities:
Short-term debt banks $ 19,398 $ 12,967
Current maturities of long-term debt 1,398 3,082
Accounts payable:
Trade 31,755 32,174
Affiliates 33,040 33,262
Income taxes payable 35,546 16,050
Accrued payroll and benefits 40,481 38,495
Other payables-affiliates 403
Accrued expenses 41,597 35,562
Total current liabilities 203,215 171,995
Long-term debt 8,507 9,544
Deferred income taxes 22,818 28,242
Other liabilities 8,976 4,650
TOTAL LIABILITIES 243,516 214,431
Commitments and Contingencies (Notes 8 and 11)
Stockholders' Equity:
Preferred stock, par value $.01 per share:
Authorized, 20,000,000 shares;
None issued or outstanding
Common stock, par value $.01 per share: 880 858
Authorized, 300,000,000 shares;
issued and outstanding,
88,000,000 shares (85,800,000 in 1995)
Additional paid-in capital 319,909 267,043
Retained earnings 306,923 188,631
Foreign currency translation adjustment (3,712) (266)
TOTAL STOCKHOLDERS' EQUITY 624,000 456,266
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $867,516 $670,697
</TABLE>
See accompanying notes to consolidated financial statements.
. -16-
. AVX CORPORATION AND SUBSIDIARIES
. CONSOLIDATED STATEMENTS OF INCOME
Years Ended March 31,
1996 1995 1994
(dollars in thousands,except share data)
Net sales $1,207,761 $988,893 $795,515
Cost of sales 886,494 777,687 639,058
Gross Profit 321,267 211,206 156,457
Selling, general and
administrative expenses 116,586 101,013 100,875
Profit from operations 204,681 110,193 55,582
Other income (expense):
Interest income 5,096 2,018 749
Interest expense (2,352) (2,229) (2,792)
Other, net 1,655 1,218 1,439
Income before income taxes and cumulative
effect of accounting change for income
taxes 209,080 111,200 54,978
Provision for income taxes 71,344 36,329 19,817
Income before cumulative effect
of accounting change for income taxes 137,736 74,871 35,161
Cumulative effect of accounting change
for income taxes 5,000
Net income $ 137,736 $ 74,871 $ 40,161
Income per share:
Before cumulative effect of
accounting change for income taxes $ 1.58 $ .87 $ .41
Cumulative effect of accounting change
for income taxes .06
Net income $ 1.58 $ .87 $ .47
Weighted average shares
outstanding 87,175,000 85,800,000 85,800,000
See accompanying notes to consolidated financial statements.
. -17-
. AVX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
. Common Stock Foreign
Additional Currency
Number Paid-In Retained Translation
ofShares Amount Capital Earnings Adjustment Total
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1993 85,800,000 $858 $267,043 $114,273 $(3,672) $378,502
Net income 40,161 40,161
Dividends (14,424) (14,424)
Current year's
adjustment (3,405) (3,405)
Balance, March 31, 1994 85,800,000 858 267,043 140,010 (7,077) 400,834
Net income 74,871 74,871
Dividends (26,250) (26,250)
Current year's
adjustment 6,811 6,811
Balance, March 31, 1995 85,800,000 858 267,043 188,631 (266) 456,266
Issuance of common
stock 2,200,000 22 52,866 52,888
Net income 137,736 137,736
Dividends (19,444) (19,444)
Current year's
adjustment (3,446) (3,446)
Balance, March 31, 1996 88,000,000 $880 $319,909 $306,923 $(3,712) $624,000
</TABLE>
See accompanying notes to consolidated financial statements.
. -18-
. AVX CORPORATION AND SUBSIDIARIES
. CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
. Years Ended March 31,
1996 1995 1994
(dollars in thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $137,736 $ 74,871 $ 40,161
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 69,910 60,608 55,195
Deferred income taxes (15,680) (6,023) (4,018)
Changes in operating assets
and liabilities:
Accounts receivable (26,564) (13,579) (27,673)
Inventories (44,862) (36,957) (15,605)
Accounts payable and
accrued expenses 12,416 28,471 6,812
Income taxes payable 20,351 13,425 2,331
Other assets and liabilities 2,380 5,342 2,976
Net cash from operating activities 155,687 126,158 60,179
Investing Activities:
Purchases of property and equipment (110,487) (77,308) (61,098)
Proceeds from sale of operations
to affiliate 3,973
Other (79) 680 39
Net cash used in investing activities (106,593) (76,628) (61,059)
Financing Activities:
Repayment of debt (3,308) (10,736) (2,110)
Dividends paid (19,444) (26,250) (14,424)
Proceeds from issuance of debt 8,696 4,167 2,921
Proceeds from issuance of common stock 52,888
Net cash from (used in) financing activities 38,832 (32,819) (13,613)
Effect of exchange rate changes on cash (138) 244 (33)
Increase (decrease) in cash and cash
equivalents 87,788 16,955 (14,526)
Cash and cash equivalents at beginning of year 43,813 26,858 41,384
Cash and cash equivalents at end of year $131,601 $ 43,813 $ 26,858
</TABLE>
See accompanying notes to consolidated financial statements.
. -19-
. AVX CORPORATION AND SUBSIDIARIES
. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
. (dollars in thousands, except share data)
1. Summary of Significant Accounting Policies:
General:
AVX Corporation is a leading worldwide manufacturer and
supplier of a broad line of passive electronic components and
related products. Components sold by the Company are used in
virtually all types of electronic products for industries such
as telecommunication, components, automotive, medical and
consumer electronics. The consolidated financial statements of
AVX Corporation and subsidiaries (the "Company" or "AVX")
include the accounts of the Company and its subsidiaries. All
significant intercompany transactions and accounts have been
eliminated.
Public Offering:
From January 1990 through August 15, 1995, the Company was
wholly-owned by Kyocera Corporation ("Kyocera"). On August 15,
1995, Kyocera sold 22.9%, or 19,650,000 of the Company's common
shares, and the Company sold an additional 2,200,000 common
shares, in a public offering. As a result, Kyocera currently
owns 75.2% of the Company's common shares.
Cash Equivalents:
The Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash
equivalents.
Inventories:
Inventories are valued at the lower of cost (first-in,
first-out method) or market. Inventory costs include material,
labor and manufacturing overhead.
Property and Equipment:
Property and equipment are recorded at cost. Machinery and
equipment is depreciated on the double declining-balance method
for assets placed in service after April 1, 1991, and the
straight-line method for assets placed in service before that
date. 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, and
machinery and equipment--3 to 10 years. Depreciation expense
was $67,508, $58,476 and $53,153 for the years ended March 31,
1996, 1995, and 1994, respectively.
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 income.
Grants received from governments by certain foreign
subsidiaries principally relate to incentives for the
acquisition of property and equipment. Such grants are recorded
as reductions to the related assets and reduce future
depreciation expenses.
Goodwill:
Assets and liabilities related to business combinations
accounted for as purchase transactions were recorded at their
respective fair values on the dates of acquisition. Any excess
of purchase price over such fair value ("Goodwill") is amortized
on a straight-line basis over periods ranging from 20 to 40
years. The accumulated amortization as of March 31, 1996 and
1995 was $14,409 and $12,328, respectively. The carrying value
of Goodwill is evaluated quarterly in relation to the operating
performance and estimated future undiscounted cash flows of the
related operating unit. Adjustments are made if the sum of
expected future net cash flows is less than carrying value.
. -20-
Income Taxes:
The Company does not provide for U.S. taxes on the
undistributed earnings of foreign subsidiaries which are
considered to be reinvested indefinitely. As of March 31, 1996,
the amount of U.S. taxes on such undistributed earnings would
have been approximately $18,600.
Effective April 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes," which requires the use of the liability method for
accounting for deferred income taxes. The effect of adoption
was to decrease deferred tax liabilities as of that date by
$5,000 and is reflected in net income for the year ended March
31, 1994, as the cumulative effect of accounting change for
income taxes.
Foreign Currency Activity:
Assets and liabilities of foreign subsidiaries 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 stockholders' equity.
The Company enters into foreign currency exchange contracts and
options to manage exposure to currency rate fluctuations on
anticipated sales, purchases and intercompany transactions.
These exchange agreements generally qualify for accounting as
designated hedges. The realized and unrealized gains and losses
on these contracts are deferred and included as a component of
the related transaction. 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.
Revenue Recognition:
Sales are recorded upon shipment of related goods to customers.
Certain sales to distributors are under terms which allow for
the affected distributors to receive price protection from the
Company for actual sales at prices below anticipated sales
prices. A portion of sales is made to distributors under
agreements allowing limited rights of return. The Company
provides an allowance for distributor adjustments based on
historical experience.
Use of Estimates:
Use of estimates and assumptions as determined by
management is required in the preparation of consolidated
financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates and assumptions.
Research and Development:
Research and development expenditures are expensed when
incurred. Such expenses totaled approximately $18,100, $14,900,
and $12,700 for the years ended March 31, 1996, 1995, and 1994,
respectively.
New Accounting Standards:
The Financial Accounting Standards Board has issued Statement
of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation", which is effective for transactions
entered into in fiscal years that begin after December 15, 1995.
The Statement allows all companies to either record in the
statement of income, the fair value of stock options, as defined
in the Statement, as compensation expense or provide only pro
forma disclosures of the fair value based method of accounting.
The Company has not determined which accounting method it will
adopt.
The Financial Accounting Standards Board has issued Statement
of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of", which is effective for fiscal years beginning
after December 15, 1995. Management believes that the effect of
adoption will not materially affect the Company's financial
condition or results of operations.
. -21-
2. Accounts Receivable:
Accounts receivable at March 31 consisted of:
. 1996 1995
Trade $159,798 $135,839
Less, allowance for doubtful accounts,
sales returns, distributor adjustments
and discounts (20,253) (17,130)
. $139,545 $118,709
Charges to expense related to such allowances were
approximately $53,117, $42,055 and $28,361, and applications to
such allowances were approximately $50,078, $37,915 and $27,415
for the years ended March 31, 1996, 1995 and 1994, respectively.
3. Inventories:
Inventories at March 31 consisted of: 1996 1995
Finished goods $75,235 $68,487
Work in process 77,256 76,555
Raw materials and supplies 90,664 55,427
. $243,155 $200,46
4. Debt:
Long-term debt at March 31 consisted of:
. 1996 1995
Deutschmark loans at 5.70% to 6.25%
due through 1999 $ 6,182 $ 8,237
Pounds Sterling loan at 9.87%
due through 2002 2,676 3,069
Other 1,047 1,320
. 9,905 12,626
Less--current maturities (1,398) (3,082)
. $ 8,507 $ 9,544
The aggregate annual maturities of long-term debt are as
follows:
1997 $ 1,398
1998 2,096
1999 4,158
2000 805
2001 674
Thereafter 774
. $9,905
Short-term bank debt consists primarily of borrowings incurred
by the Company's European subsidiaries under two DM 10.0 million
working capital bank facilities and a DM 2.5 million short-term
bank facility bearing interest at market rates (between 4.37%
and 5.05% at March 31, 1996) which extend through July 1996, and
a DM 7.5 million short-term bank facility bearing interest tied
to Libor (4.05% at March 31, 1996) which extends through May
1996.
. -22-
Interest paid totaled $2,452, $1,881 and $2,691 during the
years ended March 31, 1996, 1995, and 1994, respectively.
5. Income Taxes:
For financial reporting purposes, income before income taxes
and cumulative effect of accounting change for income taxes
includes the following components:
.
. Years Ended March 31,
. 1996 1995 1994
Domestic $114,011 $ 57,197 $34,688
Foreign 95,069 54,003 20,290
. $209,080 $111,200 $54,978
The provision (benefit) for income taxes consisted of:
. Years Ended March 31,
. 1996 1995 1994
Current:
Federal/State $55,480 $ 29,754 $15,615
Foreign 31,544 12,598 3,138
. 87,024 42,352 18,753
Deferred:
Federal/State (15,680) (10,006) 1,319
Foreign 3,983 (255)
. (15,680) (6,023) 1,064
. $71,344 $ 36,329 $19,817
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. Significant components of the
Company's deferred tax assets and liabilities are as follows:
. March 31,
. 1996 1995
Current: Assets Liabilities Assets Liabilities
Sales and receivable reserves $6,625 $ -- $ 4,651 $ --
Inventory reserves 8,073 -- 3,972 --
Accrued expenses 16,155 -- 11,852 --
. $30,853 $ -- $20,475 $ --
. March 31,
. 1996 1995
Non-Current: Assets Liabilities Assets Liabilities
Property and equipment
depreciation $ 797 $12,879 $ 797 $22,863
Accrued expenses 709 1,252 1,076
Other 14,591 8,451
Foreign income tax loss
carryforwards 8,792 10,890
. 10,298 28,722 12,763 31,314
Valuation allowance (4,394) (9,691)
. $ 5,904 $28,722 $ 3,072 $31,314
. -23-
A reconciliation between the U.S. Federal statutory income tax
rate and the Company's effective rate for income tax is as
follows:
. Years Ended March 31,
. 1996 1995 1994
U.S. Federal statutory rate 35.0% 35.0% 35.0%
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal tax benefit .9 1.8 4.9
Taxes at different tax rates on foreign earnings (1.5) (2.8) (2.6)
Change in valuation allowance (2.5) 1.9 (.7)
Other, net 2.2 (3.2) (.6)
Effective tax rate 34.1% 32.7% 36.0%
At March 31, 1996, certain of the Company's foreign
subsidiaries in Europe had tax net operating loss carryforwards
totaling approximately $19,951, most with no expiration date. A
portion of the loss carryforwards are in jurisdictions where the
Company has ceased or sharply curtailed its operations, thereby
limiting its ability to generate future taxable income and
utilize such loss carryforwards. Accordingly, the Company's
valuation allowances relate to deferred tax assets which are the
result of the loss carryforwards in these jurisdictions. The
valuation allowance decreased $5,297 and increased $2,241 during
the years ended March 31, 1996 and 1995, respectively.
Income taxes paid totaled $66,500, $29,329 and $17,106 during
the years ended March 31, 1996, 1995 and 1994, respectively.
6. Employee Retirement Plans:
Pension Plans
The Company sponsors non-contributory, defined benefit pension
plans covering certain employees. Pension benefits provided to
U.S. employees covered under collective bargaining agreements
are based on a flat benefit formula. Effective December 31,
1995, the Company froze benefit accruals under its domestic
non-contributory defined benefit pension plan for a significant
portion of the employees covered under collective bargaining
agreements. This change resulted in the Company recognizing a
curtailment gain of $500 for the year ended March 31, 1996. The
Company's pension plans for European salaried employees and
certain hourly employees provide for benefits based on a
percentage of final pay. The Company's funding policy is to
contribute the statutory required amount to appropriate trust or
government funds.
. -24-
The following table sets forth the plans' funded status and
amounts recognized in the Company's balance sheet at March 31:
. Assets Exceed Accumulated
. Accumulated Benefits
Benefits Exceed Assets
. 1996 1995 1996 1995
Actuarial present value of
benefit obligations:
Vested benefits $(30,295) $(27,573) $(23,840) $(19,300)
Non-vested benefits (104) (1,340) (507) (363)
Accumulated benefit
obligation (30,399) (28,913) (24,347) (19,663)
Effect of projected future
salary increases (8,069) (5,685) (917) (2,164)
Projected benefit obligation (38,468) (34,598) (25,264) (21,827)
Plan assets at fair value,
primarily stocks and bonds 45,830 38,488 15,003 12,420
Projected benefit obligation
(in excess of) less than plan
assets 7,362 3,890 (10,261) (9,407)
Unrecognized net (gain) loss (3,765) (221) 967 919
Prior service cost not yet
recognized (209) (238) 92 562
Unrecognized net transition
obligation (14) (8) 131 40
(Accrued) prepaid pension cost
recognized in the balance sheets $ 3,374 $ 3,423 $ (9,071) $ (7,886)
The Company's assumptions used in determining the pension
assets (liabilities) shown above were as follows:
. Years Ended March 31,
. 1996 1995
Assumptions:
Discount rates 7.0% 7.0 - 8.0%
Increase in compensation 3.0- 4.0% 3.0 - 5.5%
Expected long-term rate of return
on plan assets 7.0 - 9.0% 7.0 - 9.0%
Net pension costs related to these pension plans, exclusive of
the curtailment gain referred to above, include the following
components:
. Years Ended March 31,
. 1996 1995 1994
Service cost $ 2,030 $ 2,253 $ 1,913
Interest cost 4,412 3,988 3,428
Actual loss (return) on plan assets (10,423) 1,683 (7,585)
Net amortization (deferral) 6,400 (5,707) 4,144
Net periodic pension cost $ 2,419 $ 2,217 $ 1,900
Savings Plans:
The Company maintains retirement savings plans which allow
substantially all U.S. employees to defer part of their annual
compensation. Certain contributions by the Company are
discretionary and are determined by the Company's Board of
Directors each year. The Company's contributions to the savings
plans for the years ended March 31, 1996, 1995, and 1994, were
approximately $5,300, $5,000, and $4,700, respectively.
. -25-
The Company established, in August 1994, a nonqualified
deferred compensation program which permits key 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 the Company. The employees select among various
investment alternatives, with the investments held in a separate
trust. The value of the participant's balance fluctuates based
on the performance of the investments. At March 31, 1996, the
market value of the trust ($772) is included as an asset and a
liability of the Company in the accompanying balance sheets
because the trust assets are available to AVX's general
creditors in the event of the Company's insolvency.
7. Stock Option Plans:
The Company has two fixed option plans. Under the 1995 Stock
Option Plan, the Company may grant options to employees for the
purchase of up to an aggregate of 1,550,000 shares of common
stock. Under the Non-Employee Directors Stock Option Plan, the
Company may grant options for the purchase of up to an aggregate
of 100,000 shares of common stock. Under both plans, the
exercise price of each option equals the market price of the
Company's stock on the date of grant and an option's maximum
term is 10 years. All options granted under the 1995 Stock
Option Plan and the Non-Employee Directors Stock Option Plan
vest as to 25% annually commencing on the first anniversary of
the date of grant.
A Summary of the status of the stock option plans is as follows:
. Year Ended March 31, 1996
. Weighted-Average
. Shares Exercise Price
Outstanding, beginning of year 0
Granted 1,143,000 $25.50
Exercised 0
Forfeited (17,000) 25.50
Outstanding, end of year 1,126,000 $25.50
Options, exercisable at year-end 0
8. Commitments and Financial Instruments:
Commitments:
At March 31, 1996 and 1995, the Company had contractual
obligations for the acquisition or construction of plant and
equipment aggregating approximately $42,600 and $12,550,
respectively.
The Company is 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, 1996, were as follows:
Years Ending March 31,
1997 $ 3,916
1998 3,158
1999 2,344
2000 2,372
2001 2,260
Thereafter 4,839
$18,889
Rental expense for operating leases was $4,682, $3,996, and
$3,370 for the years ended March 31, 1996, 1995, and 1994,
respectively.
. -26-
Financial Instruments:
At March 31, 1996, $30,700 of the Company's intercompany
borrowings were denominated in foreign currencies. To reduce
the exposure to foreign currency fluctuations, the Company
entered into foreign currency contracts which fix the principal
balance of one intercompany loan at $26,000. Another contract
for 7.5 million deutschmarks fixes the principal balance of
another intercompany loan at $4,300.
In addition to the U.S. dollar, the Company conducts business
in most European currencies and the Japanese yen. The Company's
foreign currency contracts related to anticipated sales and
purchases generally have maturities that do not exceed six
months.
The Company enters into forward delivery contracts with certain
suppliers for certain precious metals used in its production
processes.
The Company's financial instruments that are exposed to
concentrations of credit risk consist primarily of cash and cash
equivalents and trade accounts receivable. The Company places
its 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 the Company's customer base and their dispersion
across many different industries and countries. As of March 31,
1996, the Company believes that its credit risk exposure is not
significant.
The following disclosure of the estimated fair value of
financial instruments has been determined by the Company, using
available market information and appropriate valuation
methodologies.
The fair value of financial instruments classified as current
assets or liabilities including cash and cash equivalents,
receivables and accounts payable approximate carrying value due
to the short-term maturity of the instruments. The fair value
of short-term and long-term debt approximate carrying value
based on their effective interest rates compared to current
market rates.
<TABLE>
<CAPTION>
March 31, 1996 March 31, 1995
Contract Carrying Unrealized Contract Carrying Unrealized
Amount Amount Gain (Loss) Amount Amount Gain (Loss)
<S> <C> <C> <C> <C> <C>
Off-Balance Sheet
Financial Instruments:
Foreign currency contracts $108,055 $ -- $1,243 $90,916 $ -- $(465)
Metal delivery contracts 23,440 -- 616 11,020 -- 685
</TABLE>
9. Transactions With Affiliate:
The Company's primary businesses include the design,
manufacture and sale of ceramic and tantalum capacitors and
electronic connectors and the sale and distribution of
electronic products manufactured by Kyocera.
. -27-
The Company entered into transactions with Kyocera as follows:
Years Ended March 31,
1996 1995 1994
Sales:
Product and equipment
sales to affiliates $ 9,240 $ 4,460 $ 3,250
Subcontracting activities 2,365 2,100 1,800
Commissions received 252 95 275
Service fee income 120 400 400
Purchases:
Purchases of resale
inventories, raw materials
supplies, equipment and services 234,612 214,950 169,100
Commissions paid 171 360 400
Rent paid 909 865 800
Cost Reimbursements:
Subcontracting expenses 10,400 5,700
Advertising and promotional
expenditures 230 230
Research and development 442 480 440
Rent received 1,200
Other:
Dividends 17,491 26,250 14,424
Sale of assembly operation
in Indonesia 3,973
Effective April 1, 1995, the Company sold to Kyocera an
assembly operation in Indonesia for $3,973, the equivalent of
the Company's net carrying value of such operation. Consistent
with Kyocera's arrangements with its other worldwide direct
reporting subsidiaries, the Company paid cash dividends equal to
approximately 35% of estimated net income during the two years
ended March 31, 1995 and the quarter ended June 30, 1995.
Thereafter, quarterly cash dividends have been paid as approved
by the Board of Directors on a per common share basis.
. -28-
10. Segment and Geographic Information:
AVX's manufacture and sale of electronic components is
considered one business segment. Information about the
Company's operations in different geographic areas is as follows:
<TABLE>
<CAPTION>
United
Year Ended March 31, States Europe Asia Other Elimination Total
1996:
<S> <C> <C> <C> <C> <C> <C>
Net sales to customers $562,994 $301,509 $341,760 $ 1,498 $ - $1,207,761
Net sales between
geographic areas 89,560 104,425 610 66,380 (260,975)
Total net sales 652,554 405,934 342,370 67,878 (260,975) $1,207,761
Profit from operations 98,526 52,575 43,724 9,856 $204,681
Interest income, net 2,744
Other, net 1,655
Income before income taxes
and cumulative effect of
accounting change for
income taxes $209,080
Identifiable assets 483,186 261,154 77,231 45,945 $867,516
1995:
Net sales to customers $466,696 $230,153 $290,333 $ 1,711 $ - $988,893
Net sales between
geographic areas 73,751 84,458 487 59,155 (217,851)
Total net sales 540,447 314,611 290,820 60,866 (217,851) $988,893
Profit from operations 53,278 21,789 26,195 8,931 $ 110,193
Interest expense, net (211)
Other, net 1,218
Income before income taxes
and cumulative effect of
accounting change for
income taxes $111,200
Identifiable assets 338,321 213,983 79,048 39,345 $670,697
1994:
Net sales to customers $392,925 $166,078 $235,642 $ 870 $ - $795,515
Net sales between
geographic areas 56,541 57,089 208 56,556 (170,394)
Total net sales 449,466 223,167 235,850 57,426 (170,394) $795,515
Profit from operations 47,616 (8,540) 12,630 3,876 $ 55,582
Interest expense, net (2,043)
Other, net 1,439
Income before income taxes
and cumulative effect of
accounting change for
income taxes $ 54,978
Identifiable assets 279,349 188,257 70,189 36,171 $573,966
</TABLE>
The other category consists of Mexico, El Salvador and Israel
operations. Sales between geographic areas are priced based on a
percentage over cost which allows the selling organization to
earn a reasonable profit. Operating profit is total revenue
less operating expenses and allocated general corporate
expenses. In computing income and operating profit, interest
expenses, interest income, miscellaneous other non-operating
income and expenses and income taxes were not deducted.
11. Environmental Matters and Contingencies:
The Company has been named as a potentially responsible party
in state and federal administrative proceedings seeking
contribution for costs associated with the correction and
remediation of environmental conditions at various hazardous
waste disposal sites. The Company continues to monitor these
actions and proceedings and to vigorously defend its interests.
The Company's ultimate liability in connection with
environmental claims will depend on many factors, including its
volumetric share of waste, the total cost of remediation and the
financial viability of other companies that also sent waste to a
given site. Once it becomes probable that the Company will
incur costs in connection with remediation of a site and such
costs can be reasonably estimated, the Company establishes or
adjusts its reserves for its projected share of these costs.
These reserves 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. Based upon information known to the Company concerning
the size of these sites, their years of operations and the
number of past users, management believes that it has adequate
reserves with respect to these matters. Such reserves for
remediation totaled $8,500 and $6,500 at March 31, 1996 and
1995, respectively. Actual costs may vary from these
estimated reserves, but such costs are not expected to have a
material adverse effect on the Company's financial condition or
results of operations.
AVX is presently under investigation by the United States
Customs Service for possible violations of the customs laws.
During this investigation, AVX has identified certain
inadvertent duty underpayments or over refunds of Customs duties
and has tendered those monies to Customs. The Company does not
believe that the ultimate resolution of these customs matters
will materially affect AVX's financial condition or results of
operations.
. -29-
12. Summary of Quarterly Financial Information (Unaudited):
Quarterly financial information for the years ended March 31,
1996 and 1995 is as follows:
First Quarter Second Quarter
1996 1995 1996 1995
Net sales $304,556 $233,995 $307,637 $249,299
Gross profit 78,115 49,650 82,289 51,787
Net income 30,408 18,185 36,435 18,071
Per share .35 .21 .42 .21
Third Quarter Fourth Quarter
1996 1995 1996 1995
Net sales $302,716 $241,998 $292,852 $263,601
Gross profit 79,828 52,721 81,035 57,048
Net income 34,198 18,522 36,695 20,093
Per share .39 .22 .42 .23
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Stockholders of AVX Corporation
We have audited the accompanying consolidated balance sheets of
AVX Corporation and Subsidiaries as of March 31, 1996 and 1995,
and the related consolidated statements of income, cash flows
and stockholders' equity for each of the three years in the
period ended March 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of AVX Corporation and Subsidiaries as of
March 31, 1996 and 1995, and the consolidated results of their
operations and their cash flows for each of the three years in
the period ended March 31, 1996, in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the financial statements, the Company
changed its method of accounting for income taxes during the
year ended March 31, 1994.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
May 8, 1996
. -30-
EXHIBIT 21.1
AVX CORPORATION
SUBSIDIARIES
As of May 1, 1996, active subsidiaries, all 100% owned directly
or indirectly, consist of the following:
STATE OR COUNTRY
OF INCORPORATION
AVIO Excelente, S.A. De C.V. United Mexican States
AVIO Excelente De Chihuahua, S.A. De D.V. United Mexican States
AVIO Exito De Chihuahua, S.A. De C.V. United Mexican States
AVX Czech Republic. s.r.o. Czech Republic
AVX Development Incorporated Delaware
AVX Electronische Bauelmente GmbH Republic of Germany
AVX Filters Corporation California
AVX GmbH Gesellschaft fur Electronische
Baulemente Republic of Germany
AVX Industries Pte. Ltd. Singapore
AVX Israel Limited Israel
AVX/Kyocera Asia Ltd Hong Kong
AVX/Kyocera Hong Kong Ltd Hong Kong
AVX/Kyocera (Malaysia) SDN BHN Malaysia
AVX/Kyocera Singapore Pte. Ltd Singapore
AVX Limited United Kingdom
AVX S.A. France
AVX S.R.L. Italy
AVX Tantalum Corporation Maine
AVX Vancouver Corporation Washington
Elco Europe APS Denmark
Elco Europe GmbH Republic of Germany
Elco Europe Ltd. United Kingdom
Elco Europe SARL France
Elco U.S.A. Inc. Delaware
P.T. AVX/Kyocera Indonesia
. -31-
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of AVX Corporation on Form S-8 (File Nos. 33-97628,
33-98114, 33-98094, 33-99574, 333-00890, and 333-02808) of our
report dated May 8, 1996, on our audits of the consolidated
financial statements of AVX Corporation as of March 31, 1996 and
1995, and for the years ended March 31, 1996, 1995, and 1994,
which report is included in this Annual Report on Form 10-K.
/s/ COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
June 13, 1996
. -32-
EXHIBIT 24.1
POWER OF ATTORNEY
Know all persons by these presents, that each of the
undersigned directors and officers of AVX Corporation, a
Delaware corporation, which will file with the Securities and
Exchange Commission, Washington, D.C., under provisions of the
Securities Law, an Annual Report for fiscal year ended March 31,
1996 on Form 10-K, hereby constitutes and appoints Benedict P.
Rosen, John S. Gilbertson and Donald B. Christiansen his true
and lawful attorneys-in-fact and agents, and each of them with
full power to act without the others, for him and in his name,
place and stead, in any and all capacities, to sign said 10-K
Annual Report and any amendments thereto, and any and all other
documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
conforming all that said attorneys-in-fact and agents or any of
them may lawfully do or cause to be done by virtue hereof.
In witness whereof, the undersigned has executed this
Power-of-Attorney on the date set opposite his respective name.
Signature Title Date
/s/ Kazuo Inamori Chairman of the Board of Directors April 22, 1996
KAZUO INAMORI
/s/ Benedict P. Rosen President, Chief Executive Officer April 22, 1996
BENEDICT P. ROSEN and Director
/s/ John S. Gilbertson Executive Vice President, Chief April 22, 1996
JOHN S. GILBERTSON Operating Officer and Director
/s/ Donald B. Christiansen Chief Financial Officer, Vice April 22, 1996
DONALD B. CHRISTIANSEN President, Treasurer and Director
/s/ Marshall D. Butler Director April 22, 1996
MARSHALL D. BUTLER
/s/ Carroll A. Campbell, Jr. Director April 22, 1996
CARROLL A. CAMPBELL, JR.
/s/ Richard Tressler Director April 22, 1996
RICHARD TRESSLER
/s/ Kensuke Itoh Director April 22, 1996
KUNSUKE ITOH
/s/ Rodney N. Lanthorne Director April 22, 1996
RODNEY N. LANTHORNE
/s/ Masato Takeda Director April 22, 1996
MASATO TAKEDA
/s/ Masahiro Umemura Director April 22, 1996
MASAHIRO UMEMURA
/s/ Masahiro Yamamoto Director April 27, 1996
MASAHIRO YAMAMOTO
/s/ Yuzo Yamamura Director April 27, 1996
YUZO YAMAMURA
. -33-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000859163
<NAME> AVX CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 131,601
<SECURITIES> 0
<RECEIVABLES> 159,798
<ALLOWANCES> 20,253
<INVENTORY> 243,155
<CURRENT-ASSETS> 561,145
<PP&E> 670,978
<DEPRECIATION> 404,432
<TOTAL-ASSETS> 867,576
<CURRENT-LIABILITIES> 203,215
<BONDS> 0
0
0
<COMMON> 880
<OTHER-SE> 623,120
<TOTAL-LIABILITY-AND-EQUITY> 867,516
<SALES> 1,207,761
<TOTAL-REVENUES> 1,207,761
<CGS> 886,494
<TOTAL-COSTS> 1,003,080
<OTHER-EXPENSES> 116,586
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,744)
<INCOME-PRETAX> 209,080
<INCOME-TAX> 71,344
<INCOME-CONTINUING> 137,736
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 137,736
<EPS-PRIMARY> 1.58
<EPS-DILUTED> 1.58
</TABLE>
