KEMET Reports Financial Results for Quarter Ending September 30, 2005

GREENVILLE, S.C., Oct. 26, 2005 -- KEMET Corporation today reported financial results for the quarter ended September 30, 2005. Net sales for the quarter were $116.6 million and net loss was $1.9 million or $0.02 per share. Before special charges, the net income was $1.3 million, or $0.02 per share. KEMET reports results before special charges because the results offer an alternative depiction of normal operations. Comparisons to prior periods are as follows:

                                                   Quarter Ended
                                          Sep 2005    Jun 2005    Sep 2004
                                        (In Millions, Except Per Share Data)

  Net sales                                 $116.6      $114.1      $106.0

  Before special charges (non-GAAP)
  Net income/(loss)                           $1.3       $(0.3)     $(16.7)
  Net income/(loss) per diluted share        $0.02      $(0.00)     $(0.19)

  After special charges (GAAP)
  Net income/(loss)                          $(1.9)       $3.0       $(7.5)
  Net income/(loss) per diluted share       $(0.02)      $0.03      $(0.09)

"I am pleased with the results for the quarter as net income before special charges was $1.3 million or $0.02 per share," stated Mr. Per Loof, Chief Executive Officer. "The improvement in our results was a combination of higher sales volumes and our recent cost reduction actions. This quarter, while profitable, still does not get us to the level of profitability that we desire. We will continue to drive down our costs and continue to find opportunities to improve our profitability.

"We did experience some improvements in pricing in some product lines during the quarter, however, mix adjusted average selling prices decreased 3% to 4% in the aggregate from the previous quarter. Capacity utilization, however, remains at approximately 85%, with the ceramics utilization rate running slightly higher than tantalum. I am also pleased to report that we have begun shipping commercial volumes of our tantalum polymer capacitors from our second facility in Suzhou, China in September. The new facility was necessary due to increasing demand for this product particularly in Asia.

"As you can see from our recent news releases, exciting things are happening at KEMET. Our recently announced strategic alliance with Taiyo Yuden has been well received by our customers, and I am pleased with our continued progress. We are in advanced discussions with EPCOS to purchase their Tantalum Capacitor Business, as we announced last week. If completed, this would significantly enhance our global tantalum position in the market.

"I have now been with KEMET for six months. I have been impressed with the team and their commitment to succeed. The positive results are a testimony to this fact. However, this turnaround journey has just begun. We will continue to strive for excellence and to provide to our customers the best products in the industry. I am confident that the KEMET team will be able to capitalize on opportunities presented in the quarters to come."

As of September 30, 2005, KEMET had $213.0 million in cash and short and long-term investments in marketable securities, $100.0 million in debt, and $518.9 million in stockholders' equity.

The Company will hold a conference call at 9:00 am ET Wednesday, October 26, 2005, to discuss the earnings release. The call will last approximately one hour, and after an initial presentation, questions will be taken as time permits. To access the call, participants in the United States should dial 1- 800-416-8033, and participants outside the United States should dial 1-706- 643-0979. Participants should reference "KEMET Corporation" and the Conference ID #: 1416997. In conjunction with the conference call, there will be a simultaneous live broadcast over the Internet, which can be accessed at http://www.kemet.com/IR. A replay of the conference call will be available, until midnight November 9, 2005, at the same link.

KEMET's common stock is listed on The New York Stock Exchange under the symbol KEM. At the Investor Relations portion of the Company's web site at http://www.kemet.com/IR, users can subscribe to KEMET news releases and can find additional Company information.

OUR BUSINESS

The following statements are based on current expectations. These statements may contain forward-looking information, and consequentially actual results may differ materially. Current global economic conditions make it particularly difficult at present to predict product demand and other related matters.

   - Sales of surface-mount capacitors were 83.6% of net sales, and sales of
   leaded parts were 16.4% of net sales for the September 2005 quarter.

   - By region, 42.7% of net sales for the September 2005 quarter were to
   customers in North America, 40.8% were to Asia, and 16.5% were to Europe.

   - By channel, 55.8% of net sales for the September 2005 quarter were to
   distribution customers, 23.4% were to Electronic Manufacturing Services
   customers, and 20.8% were to Original Equipment Manufacturing customers.
   Average selling prices for the September 2005 quarter, adjusted for
   changes in product mix, decreased approximately 3% to 4% from average
   selling prices for the June 2005 quarter.

   - In July 2003, KEMET announced the reorganization of its operations
   around the world, resulting in the location of virtually all of its
   production in low cost regions and to be completed in 2005. KEMET
   estimates it will incur special charges of approximately $42 million ($39
   million disclosed previously) over the period of the reorganization
   related to movement of manufacturing operations.   The increase is due to
   additional reorganization activities that were not part of the original
   plan as the Company initiated more aggressive reductions to improve
   profitability.

Completed portions of KEMET's announced move of production have occurred in accordance with the anticipated time line. Charges related to movement of manufacturing operations in the September 2005 quarter were $3.2 million bringing the total manufacturing relocation charges to approximately $39.6 million to date. The Company has substantially completed its relocation of production to low cost regions of the world.

  Summary of special charges in the September 2005 quarter, net of tax:

                                                            (In Millions)
  Manufacturing relocation (Restructuring charges)               $3.2

  Special after tax charges                                      $3.2

   - For fiscal 2006, KEMET anticipates maintaining our investments in key
   customer relationships through our direct sales and customer service
   professionals, as well as our investments in research and development, to
   maintain our competitive position in the capacitor industry. We are
   continuing to enhance research and development, focused on organic
   polymer tantalum and high-capacitance ceramic capacitor technologies.

                                 Fiscal Year         Fiscal Quarter Ended
                                                   Dec    Mar    Jun    Sep
                              2003   2004   2005   2004   2005   2005   2005
                                           (In Millions)
  SG&A                       $54.4  $51.2  $51.7  $12.0  $13.8  $12.2  $12.1
  R&D                        $25.3  $24.4  $26.6   $7.5   $6.2   $6.2   $6.0

   - Capital expenditures for the September 2005 quarter were $7.3 million.

                              Fiscal Year Ended      Fiscal Quarter Ended
                                                   Dec    Mar    Jun    Sep
                              2003   2004   2005   2004   2005   2005   2005
                                           (In Millions)
  Additions to property,
   plant and equipment       $22.2  $25.8  $39.6  $10.8  $12.0   $6.4   $7.3

   - Depreciation and amortization expense in the quarter were $8.1 million.

   - During the September 2005 quarter, inventories decreased $1.7 million
     to $124.0 million from $125.7 million at June 30, 2005. Raw materials
     and supplies increased $1.0 million in the September 2005 quarter, and
     work in process and finished goods decreased $2.7 million.

                              Fiscal Year Ended      Fiscal Quarter Ended
                              Mar    Mar    Mar    Dec    Mar    Jun    Sep
                              2003   2004   2005   2004   2005   2005   2005
                                           (In Millions)
  Raw materials
   and supplies              $91.3  $59.8  $47.5  $56.7  $47.5  $46.4  $47.4
  Work in process
   and finished goods         92.7   69.2   86.4   91.6   86.4   79.3   76.6
                            $184.0 $129.0 $133.9 $148.3 $133.9 $125.7 $124.0

   - Cash and short and long-term investments in marketable securities
     during the September 2005 quarter decreased $5.6 million to
     $213.0 million from $218.6 million at June 30, 2005.  This decrease is
     due to capital expenditures, reduction in force payouts, and
     manufacturing relocation expenditures, partially offset by cash from
     operations.

  QUIET PERIOD

Beginning January 1, 2006, KEMET will observe a Quiet Period during which the information provided in this news release and the Company's quarterly report on Form 10-Q will no longer constitute the Company's current expectations. During the Quiet Period, this information should be considered to be historical, applying prior to the Quiet Period only and not subject to update by the Company. The Quiet Period will extend until the day when KEMET's next quarterly earnings release is published.

This release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We intend that these forward-looking statements be subject to the safe harbor created by that provision. These forward-looking statements involve risks and uncertainties and include, but are not limited to, statements regarding future events and our plans, goals, and objectives. Our actual results may differ materially from these statements. These risks, trends, and uncertainties, which in some instances are beyond our control, include: risks associated with the cyclical nature of the electronics industry, the requirement to continue to reduce the cost of our products, the competitiveness of our industry, an increase in the cost of our raw materials, the location of several of our plants in Mexico and China, and the possible loss of key employees. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in these forward-looking statements will be realized. The inclusion of this forward-looking information should not be regarded as a representation by our Company or any person that the future events, plans, or expectations contemplated by our Company will be achieved. Furthermore, past performance in operations and share price is not necessarily predictive of future performance.

                    KEMET CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
               (Dollars in Thousands Except Per Share Data)
                                Unaudited

                                Three months ended       Six months ending
                                   September 30,           September 30,
                                 2005        2004        2005        2004

  Income Statement Data:
  Net sales                    $116,608    $106,022    $230,712    $228,405
  Cost of goods sold             97,463     102,773     192,453     202,896
  Gain on long-term supply
   contract                         -       (11,139)        -       (11,139)
  Selling, general and
   administrative expenses       12,067      13,062      24,293      25,500
  Research and development        6,008       6,637      12,225      13,375
  Pension settlement charges        -           218         -           218
  Restructuring charges           3,154       1,649      11,327       4,199

  Operating loss                 (2,084)     (7,178)     (9,586)     (6,644)

  Interest expense                1,639       1,579       3,307       3,202
  Interest income                (1,402)     (1,455)     (2,727)     (3,365)
  Other (income)/expense            (57)         11       1,007       2,296
  Income tax (benefit)/expense     (354)        152     (12,298)        539

  Net (loss)/income             $(1,910)    $(7,465)     $1,125     $(9,316)

  (Loss)/Income Per Share Data:
  Net (loss)/income per share:
       Basic                     $(0.02)     $(0.09)       0.01      $(0.11)
       Diluted                   $(0.02)     $(0.09)       0.01      $(0.11)

  Weighted-average shares
   outstanding:
       Basic                 86,653,831  86,506,738  86,633,143  86,500,694
       Diluted               86,653,831  86,506,738  86,696,023  86,500,694

                    KEMET CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                          (Dollars in Thousands)
                                Unaudited

                                      September 30, 2005    March 31, 2005
        ASSETS

  Cash and cash equivalents                      $36,135           $26,898
  Short-term investments in marketable
   securities                                     55,077            34,992
  Accounts receivable, net                        67,351            59,228
  Inventories                                    123,988           133,935
  Prepaid expenses and other current assets       12,286             9,571
  Deferred income taxes                            5,107             5,945
     Total current assets                        299,944           270,569
  Property, plant and equipment, net             275,245           279,626
  Property held for sale                           4,683             2,326
  Long-term investments in marketable
   securities                                    121,750           157,576
  Investments in affiliates                          590               682
  Goodwill                                        30,471            30,471
  Intangible assets, net                          13,010            13,512
  Other assets                                     3,383             3,335

        Total assets                            $749,076          $758,097

        LIABILITIES AND STOCKHOLDERS' EQUITY

  Current portion of long-term debt              $20,000              $-
  Accounts payable, trade                         36,128            38,943
  Accrued expenses                                29,151            34,617
  Income taxes payable                            10,424            12,430
     Total current liabilities                    95,703            85,990
  Long-term debt                                  80,000           100,000
  Other non-current obligations                   47,252            48,951
  Deferred income taxes                            7,174             7,953
     Total liabilities                           230,129           242,894

  Common stock                                       881               880
  Additional paid-in capital                     317,246           317,728
  Retained earnings                              221,971           220,846
  Accumulated other comprehensive income           4,428             2,669
  Treasury stock, at cost                        (25,579)          (26,920)
     Total stockholders' equity                  518,947           515,203

        Total liabilities and
         stockholders' equity                   $749,076          $758,097