Kemet (KEM), a supplier of passive electronic components, said late Tuesday it’s relocating its K-Salt facility equipment to its Matamoros plant in Mexico to cut costs as part of an ongoing effort to improve its gross margin.
The company expects to achieve annual operating cost savings of approximately $3.5 to $4.0 million and improve annual working capital by approximately $8.0 million with improvements beginning in Q4 of fiscal year 2017. It expects non-cash impairment charges of approximately $2.1 million and cash severance charges of approximately $0.2 million in fiscal Q2 ending Sept. 30.
It will take cash charges for equipment relocation costs of approximately $1.2 million in Q3.
The company said it was “closer to achieving [its] stated overall goal of 25% gross margin,” without being more specific. It also did not say whether jobs will be lost as a result of the relocation.
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