AVX CORP - 10-K - 20050614 - BUSINESS
The
following discussion and analysis should be read in conjunction with the
consolidated financial statements, including the Notes thereto, appearing
elsewhere herein. Statements in this Annual Report on Form 10-K that reflect
projections or expectations of future financial or economic performance of
AVX
Corporation (the "Company"), and statements of the Company's plans and
objectives for future operations, including those contained in "Business",
"Management's Discussion and Analysis of Financial Condition and Results
of
Operations", and "Quantitative and Qualitative Disclosures about Market Risk",
or relating to the Company's outlook for fiscal 2006, overall volume and
pricing
trends, end market demands, cost reduction strategies and their anticipated
results, and expectations for research, development and capital expenditures,
are "forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Words such as "expects", "anticipates", "approximates",
"believes", "estimates", "intends" and "hopes" and variations of such words
and
similar expressions are intended to identify such forward-looking statements.
No
assurance can be given that actual results or events will not differ materially
from those projected, estimated, assumed or anticipated in any such
forward-looking statements. Important factors that could result in such
differences, in addition to the other factors noted with such forward-looking
statements, include: general economic conditions in the Company's market,
including inflation, recession, interest rates and other economic factors;
casualty to or other disruption of the Company's facilities and equipment;
and
other factors that generally affect the business of manufacturing and supplying
electronic components and related products. AVX Corporation is not obligated
to
update or revise any forward-looking statement contained in this Annual Report
on Form 10-K to reflect new events or circumstances unless and to the extent
required by applicable law.
PART
I
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. Virtually all types of
electronic devices use our passive component products to store, filter or
regulate electric energy.
Our
passive electronic component products include ceramic and tantalum capacitors,
film capacitors, varistors and non-linear resistors manufactured in our
facilities throughout the world and passive components manufactured by
Kyocera
Corporation of Japan ("Kyocera"), a public company and our majority stockholder.
We also manufacture and sell electronic connectors and inter-connect systems
and
distribute and sell certain electronic connectors manufactured by Kyocera.
The
Company is organized by product line with five main product groups. The
Company's reportable segments are based on the types of products from which
the
Company generates revenues. The Company has three reportable segments:
Passive
Components, Kyocera Electronic Devices ("KED") Resale and Connectors. The
operating segments of Ceramic, Advanced and Tantalum have been aggregated
into
the Passive Component reportable segment. The Passive Components segment
consists primarily of surface mount and leaded ceramic and tantalum capacitors,
film and power capacitors and varistors. The KED Resale segment consists
primarily of ceramic capacitors, crystal oscillators, SAW devices, resistive
products, RF modules, actuators, acoustic devices and connectors produced
by
Kyocera, and resold by AVX. The Connectors segment consists primarily of
Elco
automotive, telecom and memory connectors manufactured by AVX. In addition,
the
Company has a corporate administration group consisting of finance and
administrative activities and a separate Research and Development group.
The
Company evaluates performance of its segments based upon sales and operating
profit. There are no intersegment revenues. The Company allocates the costs
of
shared resources between segments based on each segment's usage of the
shared
resources. Cash, accounts receivable, investments in securities and certain
other assets, which are centrally managed, are not readily allocable to
operating segments.
Our
customers are multi-national original equipment manufacturers, or OEMs,
independent electronic component distributors and contract equipment
manufacturers, or CEMs (also referred to as electronic manufacturing service
providers (EMSs)). We market our products through our own direct sales
force and
independent manufacturers' representatives, based upon market characteristics
and demands. We coordinate our sales and marketing and manufacturing
organization by strategic customer account and globally by region.
We
sell
our products to customers in a broad array of industries, such as
telecommunications, information technology hardware, automotive electronics,
medical devices and instrumentation, industrial instrumentation, defense
and
aerospace electronic systems and consumer electronics.
Our
principal strategic advantages include:
Creating
Technology Leadership.
We have five principal research and development
locations in the United States, Northern Ireland, England, France and
Israel. In addition to the development of numerous new products,
during
fiscal 2005 thirteen patents were granted and seventeen patent applications
were
submitted compared to twelve patents and twenty patent applications during
fiscal 2004. These new products add to the broad product line we offer
to our
customers. Due to our broad product offering, none of our products individually
represent a material portion of our revenues. Our scientists are working
to
develop product solutions to the challenges facing our customers. Our engineers
are continually improving our manufacturing processes to improve capability,
capacity and yield, while continuing to reduce manufacturing costs.
Providing
a Broad Product Line.
We
believe that the breadth and quality of our product line and our ability
to
respond to our customers' design and delivery requirements in a rapid
fashion
make us the provider of choice for our multi-national customer base.
We
differentiate ourselves by providing our customers with a substantially
complete
passive component solution. We market five families of products: ceramic
products, tantalum products, advanced products, Kyocera manufactured
passive
products and connector devices. This broad array allows our customers
to
streamline their purchasing and supply organization.
Maintaining
the Lowest Cost, Highest Quality Manufacturing Organization.
We
have
invested approximately $120 million over the past three fiscal years
to upgrade
and enhance our worldwide manufacturing capabilities, primarily with
respect to
the manufacture of ceramic, tantalum and advanced capacitors as well
as
connector devices. In order to continually reduce the cost of production,
our
strategy has included the transfer of more labor-intensive manufacturing
processes to such areas as China, El Salvador, Malaysia and the Czech
Republic.
Globally
Coordinating our Marketing and Manufacturing Facilities.
Our
20
manufacturing facilities are located in 13 different countries around
the world.
As our customers continue to expand their global production capabilities,
we are
ideally situated to meet their supply requirements. We assign a global
customer
account executive to cover each of our major multi-national
customers.
Products
We
offer
an extensive line of passive components designed to provide our customers
with
"one-stop shopping" for substantially all of their passive component needs.
Sales of Passive Components represented approximately 62% of our net sales
in
fiscal 2005. KED Resale, excluding KEC Resale connectors, represented
approximately 28%, and Connectors, including KEC Resale connectors, represented
approximately 10% of our net sales in fiscal 2005. The table below presents
revenues from external customers for fiscal 2003, 2004 and 2005 by product
group. Financial information concerning our Passive Components, KED Resale,
Connectors and Research and Development segments is set forth in Note 16
to our
consolidated financial statements elsewhere herein.
|
|
|
|
Years
Ended March 31,
|
|
Sales
Revenue (in thousands)
|
|
|
2003
|
|
2004
|
|
2005
|
|
Ceramic
Components
|
|
$
|
276,823
|
$
|
263,835
|
$
|
267,546
|
|
Tantalum
Components
|
|
|
281,918
|
|
288,021
|
|
262,948
|
|
Advanced
Components
|
|
|
252,732
|
|
249,249
|
|
268,454
|
|
Total
Passive Components
|
|
|
811,473
|
|
801,105
|
|
798,948
|
|
|
|
|
|
|
|
|
|
|
KDP
and KSS Resale
|
|
|
222,536
|
|
216,867
|
|
358,120
|
|
KEC
Resale
|
|
|
56,131
|
|
66,168
|
|
59,311
|
|
Total
KED Resale
|
|
|
278,667
|
|
283,035
|
|
417,431
|
|
|
|
|
|
|
|
|
|
|
Connectors
|
|
|
43,971
|
|
52,437
|
|
66,823
|
|
Total
Revenue
|
|
$
|
1,134,111
|
$
|
1,136,577
|
$
|
1,283,202
|
Passive
Components
We
manufacture a full line of multi-layered ceramic and solid tantalum capacitors
in many different sizes and configurations. Our strategic focus on the
growing
use of ceramic and tantalum capacitors is reflected in our investment
in
facilities and equipment used to manufacture ceramic and tantalum products
during the past three fiscal years of approximately $106 million. We
believe
that sales of ceramic, tantalum, and advanced products 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 are commonly used in conjunction with integrated
circuits
and are best suited for applications requiring low to medium capacitance
values.
Capacitance is the measure of the capacitor's ability to store electric
energy.
Generally, ceramic capacitors are more cost-effective at lower capacitance
values, and tantalum capacitors are more cost-effective at medium capacitance
values. Our family of passive components also includes film capacitors,
high-energy/voltage power capacitors, varistors and non-linear resistors.
These
products further enhance our product offerings. The net sales of these
products
accounted for approximately 66.4% of our passive component net sales
in fiscal
2005.
We
also
offer a line of advanced passive component products to fill the special
needs of
our customers. Our advanced products engineers work with some 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 us, through our research and development activities,
to make
technological advances, provide customers with design solutions to fit
their
needs, gain a marketing inroad with the customer with respect to our
complete
product line and, in some cases, develop products that can be sold to
additional
customers in the future. Our advanced products division presently has
significant ongoing projects with a variety of key customers. Sales of
advanced
products accounted for approximately 33.6% of passive component net sales
in
fiscal 2005.
KED
Resale
We
have a
non-exclusive license to distribute and sell certain Kyocera manufactured
electronic component and connector products to certain customers and in certain
territories outside of Japan. Our distribution and sale of certain Kyocera
products, which now includes KSS crystal, SAW and optical related technologies,
further broadens our range of products and further facilitates our ability
to
offer "one-stop shopping" for our customers' electronic components needs. The
Kyocera KDP and KSS electronic components we sell include ceramic capacitors,
RF
modules, crystal oscillators, SAW devices, resistive products, actuators,
connectors and acoustic devices.
On
April
2, 2004, the Company completed its acquisition of certain sales and marketing
subsidiaries from Kinseki Ltd. of Japan (“KSS”), a wholly owned subsidiary of
Kyocera. We now distribute crystal components previously sold by KSS in the
Americas, Europe and parts of Asia. Sales of these products in these regions
were approximately $116.1 million for the fiscal year ended March 31,
2005.
Connectors
We
also
manufacture and sell high-quality electronic connectors and inter-connect
systems for use in the telecommunications, information technology hardware,
automotive electronics, medical device, defense and aerospace industries.
Our
product lines include a variety of industry-standard connectors as well as
products designed specifically for our customers' unique applications. We
produce fine pitch, or small centerline, connectors, many of which have been
selected by leading manufacturers for applications in cellular phones, pagers,
printers and notebook computers. We have also developed a value-added business
in flat ribbon cable assembly and in back panel and card edge assemblies.
Approximately 47% of connector net sales in fiscal 2005 consisted of connectors
manufactured by Kyocera.
Marketing,
Sales and Distribution
We
place
a high priority on solving customers' electronic component design challenges
and
responding to their needs. We frequently form teams consisting of marketing,
research and development and manufacturing personnel to work with customers
to
design and manufacture products to suit their specific requirements. Costs
related to these activities are included in cost of sales and expensed as
incurred.
Approximately
31%, 27% and 42% of our net sales for fiscal 2005 were to customers in the
Americas, Europe and Asia, respectively. Financial information for these
geographic regions is set forth in Note 16 to our consolidated financial
statements elsewhere herein. Our products are marketed worldwide by our own
sales personnel, as well as through independent manufacturers' representatives
who are compensated solely on a commission basis. We have regional sales and
design application personnel in strategic locations to provide technical and
sales support for independent manufacturers' representatives and independent
electronic component distributors. We believe that this combination of sales
channels provides a high level of market penetration and efficient coverage
of
our customers on a cost-effective basis.
The
sales
terms under non-exclusive agreements with independent electronic component
distributors may vary by distributor, and by geographic region. In the United
States, Europe and Asia, such agreements include stock rotation programs. Stock
rotation is a program whereby distributors are allowed to return for credit
qualified inventory, semi-annually, equal to a certain percentage, primarily
limited to 5%, of the previous six months net sales. In the United States and
Europe such agreements include price concession. Distributors may be granted
price concessions based on the difference in the price paid for the inventory
on
hand at the distributor and a reduction by AVX in sales prices quoted for our
products (book prices). Since many of our independent electronic component
distributors have already entered into special pricing arrangements (volume
pricing arrangements) for their substantial purchases of products, it is not
probable that we will provide such price concessions.
Our
agreements with independent electronic component distributors generally also
require that the Company repurchase qualified inventory from the distributor
in
the event that the Company terminates the distributor agreement or discontinues
a product offering. In the United States, the Company may also utilize a
ship-from-stock and debit program under which pricing adjustments may be
granted
by the Company to assist distributors in meeting competitive prices in the
marketplace on sales to their end customers.
Our
OEM
customers include: OY Nokia AB., Motorola Inc., Alcatel,
Ericsson Related Companies, LG Electronics Inc., Research In
Motion
Limited, Vitelcom Mobile, Quanta, Sagem SA, Samsung Electronics Co., Ltd.,
Kyocera Wireless Corporation, and Siemens AG in the
telecommunications industry; International Business Machines Corporation,
Hewlett Packard/Compaq Computer Corp., Seagate Technology International, ,
Apple
Computer, Inc., Western Digital Corporation, Fujitsu Ltd., Cisco
Corporation, Toshiba Corporation, Hua Wei and Sony Corporation in the
information technology hardware industry; Robert Bosch GmbH, Siemens AG,
Conti-Temic, Autoliv, Visteon Corporation, Delphi Corporation, TRW,
Lear
Corporation, Johnson Controls and Magneti Marelli S.p.A. in the automotive
industry; Medtronic, Inc., St. Jude Medical, ELA Medical, Starkey Laboratories
and Guidant Corporation in the medical industry; and Honeywell, Lockheed
Martin, Northrop Grumman, Rockwell Collins, BAE Systems, Raytheon and
Boeing in the defense, avionics and space industries.
Sales
are
also made to large CEM customers, such as Solectron Corporation, Jabil Circuit
Inc., Celestica, Inc., Flextronics International, Hon Hai Precision, Venture,
Asustek Inc., Benchmark Electronics Inc. and Sanmina-SCI
Corporation.
Additionally,
the Company sells to independent electronic component distributors, such as
Avnet, Arrow, Future Electronics and TTI.
Our
largest customers vary from year to year, and no customer has a long-term
commitment to purchase our products. No one customer has accounted for
more than
10% of net sales in the fiscal years ended March 31, 2003, 2004 and 2005.
Because we are a supplier to several significant manufacturers in the
telecommunication and information technology hardware industries and because
of
the cyclical nature of these industries, the significance of any one customer
can vary from one period to the next.
We
also
have qualified products under various specifications approved and monitored
by
the United States Defense Electronic Supply Center (DSCC), European Space
Agency
(ESA) and under certain foreign military specifications.
We
had a
backlog of orders of approximately $139 million at March 31, 2003, $190 million
at March 31, 2004 and $155 million at March 31, 2005. Firm orders, primarily
with delivery dates within six months of order placement, are included in
backlog, although orders may be cancelled by a customer at any time, generally
without penalty. Customer provided forecasts of product usage are not included
in backlog. Backlog fluctuates from year to year due, in part, to changes
in
customer inventory levels, order patterns and product delivery lead times
in the
industry. The backlog outstanding at any time is not necessarily indicative
of
the level of business to be expected in any ensuing period since many orders
are
placed and delivered within the same period.
Research,
Development and Engineering
Our
emphasis on research and development is evidenced by the fact that most of
our
manufactured products and manufacturing processes have been designed and
developed by our own engineers and scientists. A 60,000 square-foot facility
in
Myrtle Beach, South Carolina is dedicated entirely to pure research and
development and provides centralized coordination of our global research and
development efforts. We also maintain research and development staffs at our
facilities in Northern Ireland, England, Israel and France.
Our
research, development and engineering 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, development and engineering expenditures were
approximately $44 million, $39 million and $37 million during fiscal 2003,
2004
and 2005, respectively.
We
own
United States patents as well as corresponding patents in various other
countries, and also have patent applications pending, although patents are
not
in the aggregate material to the successful operation of our business. For
discussion regarding our license arrangement with Kyocera, see Item 7
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Relationship with Kyocera and Related Transactions."
Raw
Materials
Although
most materials incorporated in our products are available from a number of
sources, certain materials (particularly tantalum from Australia and China
and
palladium from Russia and South Africa) are available only from a relatively
limited number of suppliers. We have informed our suppliers of tantalum
materials not to use material sourced from the Democratic Republic of Congo
due
to environmental, wildlife and humanitarian concerns, and to our knowledge
we
have not used any material from that location.
Tantalum
powder and wire are principle materials used in the manufacture of tantalum
capacitor products. These materials are purchased from suppliers in various
parts of the world at prices that are subject to periodic adjustment. Tantalum
powder and wire prices have fluctuated in a range of $180 to $500 per pound
during the last three fiscal years. The market price was approximately $215
per
pound at March 31, 2005. The tantalum required to manufacture our products
has
generally been available in sufficient quantity. The limited number of tantalum
material suppliers has led to higher prices during periods of increased demand.
In 2000, during a period of increased demand, we entered into a long-term
supply
agreement, which expires in December 2005, for a portion of our anticipated
tantalum requirements.
As
a
result of the cost of tantalum materials under the long-term supply contract
and
the decline in selling prices for tantalum products
,
during
the second quarter of fiscal 2004, we determined, after identifying and
monitoring key indicators of forecasted demand and average tantalum capacitor
selling prices, that the weight of evidence regarding the sustained decline
in
average selling prices was sufficient to support a write-down to net realizable
value of the carrying value of our then current raw materials and work in
process inventory and future purchase commitments under the long-term supply
agreement for tantalum materials. Based on our finished goods standard for
tantalum products, finished goods were already recorded at net realizable value
since the purchase price variances were not capitalized. Accordingly, we
recorded a pre-tax charge of $87.7 million to cost of sales for the write-down
of our then current tantalum materials and future material purchase commitments.
We record inventory at the lower of cost or market (realizable value). Estimated
losses, included in the charge above, associated with our then current inventory
of tantalum materials were $43.0 million and $5.2 million for raw materials
and
work in process, respectively. Also, as a component of the charge above, we
recorded estimated future losses from the commitment to purchase additional
tantalum materials of $39.4 million that consisted of $21.6 million related
to
purchase commitments within twelve months and $17.8 million related to purchase
commitments exceeding twelve months. The remaining accrued net losses on firm
purchase commitments, as adjusted for utilization of subsequent purchases for
tantalum material under the agreement, are reflected in the balance sheet as
current liabilities of $12.9 million at March 31, 2005. The remaining accrued
net losses will be utilized as we satisfy our remaining purchase commitments
under the supply agreement. We had future purchase commitments of $55.2 million
at March 31, 2005. At March 31, 2005, we had $83.6 million of tantalum raw
materials inventory that we expect will be utilized in the normal course of
production.
The
fiscal 2004 tantalum materials charge involved significant judgments on our
part, including assumptions and estimates as to the future prices of finished
products using these materials, additional cost to manufacture, and the timing,
use, grade and quantity of our supply of tantalum material and future purchases
under the supply agreement. The raw material on hand as well as that in work
in
process and finished goods was considered in the assessment of realizable value
for each period. The raw materials component of work in process was written
down
to the net realizable value of the finished product that included aggregate
cost
components, the cost of production and direct selling expenses. This write
down
did not reinstate a normal profit margin. Potential downward price adjustments
under the supply agreement were not assumed in the estimates. Downward price
adjustments are contingent upon the grade, quantity and price of tantalum
materials sold by the supplier to third parties. Accordingly, there is no
guarantee as to the future realizability of any downward price adjustments
and
amounts currently received may not be indicative of amounts that may be received
in the future. Downward price adjustments are recorded as reductions in the
costs of the related inventory when received. Therefore, the costs of materials
will continue to reflect these write-downs and downward price adjustments
regardless of future price increases for tantalum products. This could have
the
effect of increasing future earnings from what they would have been had we
not
taken the charge during the second quarter of the fiscal year ended March 31,
2004. If prices for tantalum products we sell were to recover in the future,
we
would not reverse the write-downs that we have taken on our tantalum materials
inventory or the charges that we have taken against future purchase commitments.
We could also be required to take additional write-downs in the future if
tantalum product selling prices experience further declines. Additionally,
gross
profit is impacted in the period in which the inventory write-down occurred
and
in future periods as we use materials purchased under the long-term supply
agreement. Due to the large number of products containing tantalum, the number
of production locations, the variety of specific raw materials purchased under
the contract (i.e., unprocessed material, processed material, tantalum wire,
and
different grades and prices of material within each category), the mix of these
and other purchased materials used in any one period, the status of these
materials (i.e., raw materials, work in process or finished goods) at any point
in time, and the production yields, we cannot reasonably estimate the impact
of
the materials charge on gross profit in any individual reporting
period.
Although
the majority of our commodity-related ceramic parts are currently manufactured
using nickel, palladium is still used in the manufacture of certain ceramic
capacitors. Palladium 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 that has fluctuated in a range of approximately $150 to $394
per troy ounce during the last three fiscal years. The market price was
approximately $199 per troy ounce at March 31, 2005. We have addressed the
volatility in the price of palladium by (i) adjusting the manufacturing process
for the parts made with palladium to reduce the amount of the precious metal
used in each part, and (ii) substituting base metals, such as nickel, in the
production of multi-layer ceramic capacitors.
Competition
We
encounter strong competition in our various product lines from both domestic
and
foreign manufacturers. Competitive factors in the markets include
product
quality and reliability, breadth of product line, customer service,
technological innovation, global production presence, timely delivery and
price. We believe we are competitive on the basis of each of these
factors. The breadth of our product offering enables us to strengthen
our
market position by providing customers with one of the broadest selections
of
passive electronic components and connector products available from any
one
source. Our major competitors for passive electronic components
are Murata
Manufacturing Company Ltd, American Technical Ceramics
(ATC),
TDK Corporation, KEMET Corporation, NEC Corporation, EPCOS AG, Yageo
Corporation, Taiyo Yuden Co. Ltd. and Vishay Intertechnology, Inc. Our
major
competitors for certain electronic connector products are Tyco Incorporated,
Molex Incorporated and Erni Components Group.
Employees
As
of
March 31, 2005, we employed approximately 12,000 full-time employees.
Approximately 2,100 of these employees are employed in the United States.
Of the
employees located in the United States, approximately 1,260 are covered
by
collective-bargaining arrangements. In addition, some foreign employees
are
members of trade and government-affiliated unions.
Environmental
Matters
We
are
subject to federal, state and local laws and regulations concerning the
environment in the United States and to the environmental laws and regulations
of the other countries in which we have manufacturing facilities. These
regulations include limitations on discharges into air and water; remediation
requirements; chemical use and handling restrictions; pollution control
requirements; waste minimization considerations; and hazardous materials
transportation, treatment and disposal restrictions. If we fail to comply
with
any of the applicable environmental regulations we may be subject to fines,
suspension of production, alteration of our manufacturing processes, sales
limitations, and criminal and civil liabilities. Existing or future regulations
could require us to procure expensive pollution abatement or remediation
equipment, to modify product designs or to incur expenses to comply with
environmental regulations. Any failure to control the use, disposal or
storage,
or adequately restrict the discharge of hazardous substances could subject
us to
future liabilities and could have a material adverse effect on our business.
Based on our periodic reviews of the operating policies and practices at
all of
our facilities, we believe that our operations currently comply, in all
material
respects, with all of these laws and regulations.
We
have
been identified by the United States Environmental Protection Agency
("EPA"),
state governmental agencies or other private parties as a potentially
responsible party ("PRP") under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") or equivalent state or local
laws for
clean-up and response costs associated with seven sites at which remediation
is
required. Because CERCLA has been construed to authorize joint and several
liability, the 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 four of the
seven
sites, financially responsible PRPs other than AVX also are, or have
been,
involved in site investigation and clean-up activities. We believe that
any
liability resulting from these sites will be apportioned between AVX
and other
PRPs.
To
resolve our liability at each of the sites at which we have been named
a PRP, we
have entered into various administrative orders and consent decrees with
federal
and state regulatory agencies governing the timing and nature of investigation
and remediation. We have paid, or reserved for, all amounts required under
the
terms of these orders and decrees corresponding to our apportioned share
of the
liabilities. As is customary, the orders and decrees regarding sites where
the
PRPs are not themselves implementing the chosen remedy contain provisions
allowing the EPA to reopen the agreement and seek additional amounts from
settling PRPs in the event that certain contingencies occur, such as the
discovery of significant new information about site conditions during clean-up
or substantial cost overruns for the chosen remedy. The existence of these
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, we do not believe that any additional costs to
be
incurred by AVX at any of the sites will have a material adverse effect
on our
financial condition, results of operations or cash flows.
We
also
operate on sites that may have potential future environmental issues
as a result
of activities prior to the start of operations by AVX. Even though we
have been
indemnified for such environmental matters, regulatory agencies in those
jurisdictions may require us to address such issues. Once it becomes
probable
that we will incur costs in connection with remediation of a site and
such costs
can be reasonably estimated, we establish reserves for these costs. A
separate
account receivable is recorded for any indemnified costs.
Management
believes that its reserves for environmental matters of approximately
$2.5
million at March 31, 2005 are adequate. Actual costs may vary from these
estimated reserves.
Company
Information and Website
We
file
annual, quarterly, and current reports, proxy statements, and other documents
with the Securities and Exchange Commission ("SEC") under the Securities
Exchange Act of 1934 (the “Exchange Act”). The public may read and copy any
materials that we file with the SEC at the SEC's Public Reference Room
at 100F
Street, NE, Room 1580, Washington, DC 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Also, the SEC maintains an Internet website that contains
reports, proxy and information statements, and other information regarding
issuers, including us, that file electronically with the SEC. The public
can
obtain any documents that we file with the SEC at
http://www.sec.gov.
In
addition, our Company website can be found on the Internet at www.avx.com.
Copies of each of our filings with the SEC on Form 10-K, Form 10-Q and
Form 8-K,
and all amendments to those reports, can be viewed and downloaded free
of charge
as soon as reasonably practicable after the reports and amendments are
electronically filed with or furnished to the SEC. To view the reports
from our
website, go to Corporate Information, then Investor Relations, then Financial
Reports, then click the SEC Filings link at the bottom of the page.
The
following corporate governance related documents are also available on
our
website:
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·
|
Code
of Business Conduct and Ethics
|
|
·
|
Code
of Business Conduct and Ethics Supplement Applicable to
the Chief
Executive Officer, Chief Financial Officer, Controllers
and Financial
Managers
|
|
·
|
Corporate
Governance Guidelines
|
|
·
|
Audit
Committee Charter
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To
review
these documents, go to our website, click on Corporate Information, then
Corporate Governance.
Copies
of
our Form 10-K for the fiscal year ended March 31, 2005 (including the
exhibits
thereto) and of any of the other above filings or documents are available,
without charge, at the following address:
|
AVX
Corporation
|
|
Investor
Relations
|
|
P.O.
Box 867
|
|
Myrtle
Beach, SC 29578-0867
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Our
Chief
Executive Officer certified to the New York Stock Exchange in 2004 that
we were
in compliance with the NYSE listing standards. In 2004, each of our Chief
Executive Officer and Chief Financial Officer executed the certification
required by section 302 of the Sarbanes-Oxley Act of 2002, which certifications
were filed as exhibits to our Form 10-K for the fiscal year ended March
31,
2004.
Executive
Officers of the Registrant
Our
executive officers are elected annually by our Board of Directors or, in
some
cases, appointed in accordance with our bylaws and each officer holds office
until the next annual election of officers or until a successor has been
duly
elected and qualified, or until the officer's death or resignation, or
until the
officer has otherwise been removed in accordance with our bylaws. The following
table provides certain information regarding the executive officers of
the
Company as of March 31, 2005:
|
|
Age
|
Position
|
|
John
S. Gilbertson
|
61
|
Chief
Executive Officer and President
|
|
C.
Marshall Jackson
|
56
|
Executive
Vice President of Sales and Marketing
|
|
Carl
L. Eggerding
|
55
|
Vice
President, Chief Technology Officer
|
|
Kurt
P. Cummings
|
49
|
Vice
President, Chief Financial Officer, Treasurer and
Secretary
|
|
S.
M. Chan
|
49
|
Vice
President of Sales and Marketing -Asia
|
|
Keith
Thomas
|
51
|
President
of Kyocera Electronic Devices
|
|
Peter
Collis
|
53
|
Vice
President of Tantalum
|
|
Peter
Venuto
|
52
|
Vice
President of North American and Europe
Sales
|
John
S. Gilbertson.
Chief Executive Officer since 2001. President since
1997. Chief Operating Officer from 1994 until 2001 and a member of the
Board
since 1990. Executive Vice President from 1992 to 1997, Senior Vice President
from 1990 to 1992 and employed by the Company since 1981. Managing Director
of
Kyocera since 1999. Director of Kyocera since 1995. Member of the Board
of
Directors of Kyocera International, Inc., a United States subsidiary of
Kyocera,
since 2001.
C.
Marshall Jackson.
Executive Vice President of
Sales and Marketing since 2000. Senior Vice President of Sales and Marketing
from 1994 to 2000. Vice President of Sales and Marketing from 1990 to
1994.
Various sales, marketing and operational positions with the Company since
1969.
Carl
L. Eggerding.
Vice President, Chief Technology Officer since 2000. Vice
President of Technology from 1997 to 2000. Employed by the Company since
1996.
Prior to 1996, employed by IBM as Director of Development for Organic
Packaging
Technology.
Kurt
P. Cummings.
Vice President, Chief Financial Officer, and Treasurer
since 2000. Secretary since 1997. Corporate Controller from 1992 to 2000.
Prior
to 1992, Partner with Deloitte & Touche LLP.
S
.
M.
Chan.
Vice President of Sales and Marketing - Asia since 1994.
Director
of Marketing from 1992 until 1994. Employed by the Company since
1990.
Keith
Thomas.
President of Kyocera Electronic Devices since 2004.
Vice President of Kyocera Developed Products from 2001 to 2004. Divisional
Vice
President of Kyocera Developed Products from 1992 until 2001. Employed
by the
Company since 1980.
Peter
Collis.
Vice President of Tantalum since 2001. Plant Manager
of Paignton facility from 1998 to 2001. Engineering Manager from 1997 to
1998.
Plant Manager of Lanskroun facility from 1996 to 1997. Employed by the
Company
since 1968.
Peter
Venuto.
Vice President of North American and Europe Sales
since 2004. Vice President of North American Sales from 2001 to
2004. Divisional Vice President of Strategic Accounts from 1998
until 2000.
Director of Strategic Accounts from 1990 until 1997. Director of Business
Development from 1987 until 1989. Employed by the Company since
1987.
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