887730--5/30/2007--KEMET

related topics

{cost, regulation, environmental}

{product, market, service}

{personnel, key, retain}

{regulation, government, change}

{acquisition, growth, future}

{operation, international, foreign}

{cost, operation, labor}

{condition, economic, financial}

{competitive, industry, competition}

Cyclical changes in the electronics industry could result in significant fluctuations in demand for our products, reducing our profitability. We must consistently reduce the total costs of our products to combat the impact of downward price trends. An increase in the cost of our principal raw materials could adversely affect profitability. We face intense competition in our business. We manufacture many of our capacitors in Portugal, Mexico and China and future political or regulatory changes in any of these countries could adversely affect our profitability. We may not be able to successfully integrate current or future acquisitions with our operations or identify attractive acquisition opportunities in the future. Losing the services of our executive officers or our other highly qualified and experienced employees or our inability to continue to attract and retain additional qualified personnel could harm our business. Environmental laws and regulations could limit our ability to operate as we are currently operating and could result in additional costs. We must continue to develop innovative products to maintain our relationships with our customers and to offset potential price erosion in older products. We may not achieve the expected benefits of our manufacturing relocation plan or other restructuring plans we have or may adopt in the future.

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887730--5/30/2007--KEMET_CORP