1. Basis of Presentation
The consolidated financial statements of AVX Corporation and subsidiaries ("AVX" or the "Company") include all accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated. The accompanying financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements are unaudited, and in the opinion of management, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for the fair presentation of the consolidated balance sheets, operating results and cash flows for the periods presented. Operating results for the three months ended June 30, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2006 due to cyclical and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2005. Certain prior period amounts have been reclassified to conform to the current period presentation.
The Company has identified the accounting policies and estimates that are critical to our business operations and understanding the Company's results of operations. Those policies and estimates can be found in Note 1, "Summary of Significant Accounting Policies", of the Company's Notes to the Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2005. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2005. During the three-month period ended June 30, 2005, there were no significant changes to any critical accounting policies, judgments involved in applying those policies or to the methodology used in determining estimates including those related to revenue recognition, inventories, property and equipment, goodwill, restructuring costs, income taxes and contingencies.
6. Commitments and Contingencies:
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in the Quarterly Report on Form 10-Q are forward-looking. The forward-looking information may include, among other information, statements concerning the Company's outlook for fiscal year 2006, overall volume and pricing trends, cost reduction strategies and their anticipated results, expectations for research and development, and capital expenditures. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect management's expectations and are inherently uncertain. The forward-looking information and statements in this report are subject to risks and uncertainties, including those discussed in the Company's Annual Report on Form 10-K for fiscal year ended March 31, 2005, that could cause actual results to differ materially from those expressed in or implied by the information or statements herein. Forward-looking statements should be read in context with, and with the understanding of, the various other disclosures concerning the Company and its business made elsewhere in this quarterly report as well as other public reports filed with the United States Securities and Exchange Commission ("SEC"). You should not place undue reliance on any forward-looking statements as a prediction of actual results or developments.
The Company is not obligated to update or revise any forward-looking statement contained in this quarterly report to reflect new events or circumstances unless and to the extent required by applicable law. All forward-looking statements contained in this quarterly report constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934 and, to the extent it may be applicable by way of incorporation of statements contained in this quarterly report by reference or otherwise, Section 27A of the United States Securities Act of 1933, each of which establishes a safe-harbor from private actions for forward-looking statements as defined in those statutes.
Critical Accounting Policies and Estimates
"Management's Discussion and Analysis of Financial Condition and Results of Operations" is based upon the Company's Consolidated Financial Statements and Notes thereto, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, inventories, property and equipment, goodwill, restructuring costs, income taxes and contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates.
The Company has identified the accounting policies and estimates that are critical to our business operations and understanding the Company's results of operations. Those policies and estimates can be found in Note 1, "Summary of Significant Accounting Policies", of the Company's Notes to the Consolidated Financial Statements and in "Critical Accounting Policies and Estimates", in Item 6 of Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2005 and in Note 1, "Critical Accounting Policies and Estimates", in our Notes to Consolidated Financial Statements in this Form 10-Q. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2005. During the three month period ended June 30, 2005, there were no significant changes to any critical accounting policies, judgments involved in applying those policies or the methodology used in determining estimates including those related to revenue recognition, inventories, property and equipment, goodwill, restructuring costs, income taxes and contingencies.
Business Overview
AVX 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. We also manufacture and supply high-quality electronic connectors and inter-connect systems for use in electronic products. In addition to AVX manufactured products, we also sell and distribute certain Kyocera manufactured electronic component and connector products to customers in certain territories outside Japan.
We have manufacturing, sales and distribution facilities located throughout the world which are divided into three main geographic regions: the Americas, Asia and Europe. Effective April 1, 2004, we reorganized into five main product groups with three reportable segments: Passive Components, KED Resale and AVX Connectors. On April 2, 2004, we completed our acquisition of certain sales and marketing subsidiaries from Kinseki Ltd. of Japan ("KSS"), a wholly owned subsidiary of Kyocera.
Our products are marketed worldwide and are primarily sold to original equipment manufacturers, independent electronic component distributors and contract equipment manufacturers through our own direct sales force and independent manufacturers' representatives.
Results of Operations
Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004
Net Sales
Net sales in the three months ended June 30, 2005 decreased $25.2 million, or 7.3%, to $319.8 million compared to $345.0 million in the three months ended June 30, 2004.
The table below represents product group revenues for the three-month periods ended June 30, 2004 and June 30, 2005.
| | | Three Months |
Sales Revenue | | 2004 | | 2005 |
| Ceramic Components | $ | 74,577 | $ | 62,939 |
| Tantalum Components | | 78,581 | | 68,731 |
| Advanced Components | | 70,563 | | 70,459 |
| Total Passive Components | | 223,721 | | 202,129 |
| | | | | |
| KDP and KSS Resale | | 85,960 | | 85,261 |
| KEC Resale | | 19,100 | | 14,181 |
| Total KED Resale | | 105,060 | | 99,442 |
| | | | | |
| Connectors | | 16,237 | | 18,243 |
| Total Revenue | $ | 345,018 | $ | 319,814 |
Passive component sales decreased $21.6 million, or 9.7%, to $202.1 million in the three months ended June 30, 2005 from $223.7 million during the same quarter last year. The sales decrease in passive components was due to declining prices, a product mix toward smaller case sizes and a decrease in customer demand. Compared to the same period last year, passive component unit volumes decreased approximately 6%, reflecting the decreased demand discussed above. The Company saw continued pricing pressure in the three months ended June 30, 2005 on commodity related products resulting from the industry's production capacity exceeding demand during this period.
KED resale sales, excluding KEC resale connectors discussed below, decreased $0.7 million, or 0.8%, to $85.3 million in the three months ended June 30, 2005 compared to $86.0 million during the same period last year. The decrease is attributable primarily to a decrease in sales volume during the quarter ended June 30, 2005.
Total Connector sales, including AVX manufactured and KEC resale connectors, decreased $2.9 million, or 8.2%, to $32.4 million in the three months ended June 30, 2005 compared to $35.3 million during the same period last year. This decrease was primarily attributable to decreased volume partially offset by a favorable product mix.
The Company's sales to independent electronic distributors represented 38.8% of total sales for the period ended June 30, 2005, compared to 42.6% for the period ended June 30, 2004. This shift was primarily due to distributors reducing their inventory levels in line with end market demand. The Company's sales to distributors involve specific ship and debit, price concession and stock rotation programs for which sales allowances are recorded as reductions in sales. Such allowance charges were $10.4 million, or 7.8% of gross sales to distributors, for the three months ended June 30, 2005 and $9.5 million, or 6.0% of gross sales to distributors, for the three months ended June 30, 2004. This increase is reflective of pricing pressure in the electronics business end markets. Applications under such programs for the quarter ended June 30, 2005 and 2004 were approximately $10.5 million and $9.1 million, respectively.
Geographically, compared to the same period last year, sales declined 9.2% in the Americas, 5.5% in Asia and 7.9% in Europe reflecting lower sales volume, declining prices and changes in product mix discussed above. Sales for the quarter improved approximately $2.5 million as a result of the weaker U.S. dollar when compared to the same period last year.
Gross Profit
Gross profit in the three months ended June 30, 2005 decreased $18.3 million to $37.9 million compared to $56.2 million in the three months ended June 30, 2004. Cost of sales for the three months ended June 30, 2005 reflects a $9.1 million decrease in overall material expense due to lower production volumes, in addition to lower depreciation expense of $0.8 million due to lower capital spending during the past two fiscal years. Gross profit was negatively impacted by lower overall selling prices. In addition, the weaker U.S. dollar resulted in an increase of approximately $5.6 million to cost of sales during the quarter when compared to the same period last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses in the three months ended June 30, 2005 increased $2.3 million to $27.8 million, or 8.7% of net sales, compared with $25.5 million, or 7.4% of net sales, in the three months ended June 30, 2004. The increase was primarily attributable to a $1.7 million increase in professional fees and outside services expenses due to the increased costs related to public company compliance initiatives of the Sarbanes - Oxley Act of 2002.
Research, Development and Engineering Expenses
Research, development and engineering expenditures, which encompass the personnel and related expenses devoted to developing new and maintaining existing products, processes and technical innovations, were approximately $9.1 million and $7.9 million in the three months ended June 30, 2004 and 2005, respectively. Research and development costs for the development of new products and processes are classified in selling, general and administrative expenses, while engineering costs in connection with existing products and processes are primarily included in cost of sales.
| | | Three Months Ended June 30, |
| | | 2004 | | 2005 |
| | | | | |
| Research and development expense | $ | 2,876 | $ | 2,545 |
| Engineering expense: | | | | |
| Cost of sales | | 5,800 | | 4,994 |
| Selling general and administrative expense | | 380 | | 386 |
| Total engineering expense | | 6,180 | | 5,380 |
| Total research, development and engineering expense | $ | 9,056 | $ | 7,925 |
The decline in research and development expenses was partially due to the transfer from development to production of certain new products. The costs were incurred as we continue to enhance existing product lines, develop new products, convert to the use of base metals in the manufacture of components and develop high capacitance capacitors. Decreased engineering costs were due to continued technological enhancements that enable products to be transferred out of engineering and into full production more efficiently.
Income from Operations
As a result of the above factors, the Company reported income from operations of $10.1 million in the three months ended June 30, 2005 compared to $30.7 million in the three months ended June 30, 2004.
Other Income
Other income increased $1.2 million to $6.2 million in the three months ended June 30, 2005 compared to $5.0 million in the same period last year. This increase is primarily due to higher interest income. Additionally, other income for the periods ended June 30, 2004 and 2005 includes gains on the sale of previously closed facilities in Taiwan and Mexico of $2.8 million and $0.9 million, respectively.
Income Taxes
The Company's effective tax rate for the period ended June 30, 2005 was 37.0% compared to 36.0% for the same period last year. In both periods, the effective tax rate is negatively impacted by the Company’s inability to recognize tax benefits resulting from operating losses for certain European and Asian operations.
Net Income
Net income for the three-month period ended June 30, 2005 was $10.2 million compared to a net income of $22.9 million for the three-month period ended June 30, 2004. The decrease in net income was a result of the factors set forth above.
Outlook
Near-Term:
The electronic component industry in which we operate is cyclical. The continued uncertainty in the global economy and end market demand makes it difficult to predict near-term events. Near-term results for us will depend on growth in the economy and resulting expansion in the telecommunications, information technology hardware, automotive and other electronic markets. We expect a continued, modest decline in average selling prices for certain commodity related products. Additionally, the Company continues to move production to lower costs regions and implement other measures to reduce operating costs and rationalize our product offerings. The Company continues to evaluate its cost structure and manufacturing capabilities in conjunction with current demand and future expectations. Accordingly, the Company could record restructuring charges in the future resulting from global workforce reductions and facility reorganizations as the Company continues to take strategic actions in response to changes in current or future business conditions.
Long-Term:
We continue to be optimistic that opportunities of long-term growth and profitability will continue due to: (a) the continued increase as a long-term trend in worldwide demand for electronic devices which require our electronic components, (b) cost reductions and improvements in our production processes and (c) opportunities for growth in our advanced product line due to advances in component design.
Liquidity and Capital Resources
The Company's liquidity needs arise primarily from working capital requirements, dividend payments and capital expenditures. Historically, the Company has satisfied its liquidity requirements through funds from operations and investment income from cash and investments in securities. As of June 30, 2005, the Company had a current ratio of 5.9 to 1, $725.9 million of cash, cash equivalents and short and long term investments in securities, $1.4 billion of stockholders' equity and no debt.
Net cash provided by operating activities was $27.3 million in the three months ended June 30, 2005 compared to $6.3 million of cash provided by operating activities in the three months ended June 30, 2004. The increase in cash flow from operating activities compared to the same period last year was primarily a result of lower inventories, offset in part by higher accounts payable and accrued expenses and other changes in net working capital during the three months ended June 30, 2005.
Purchases of property and equipment were $6.4 million in the three month period ended June 30, 2005 compared to $12.6 million in the three month period ended June 30, 2004. Expenditures for both periods were primarily in connection with the transfer of passive component manufacturing operations to lower cost regions, process improvements in passive component product lines and expansion of production of some advanced and connector product lines. The carrying value for our equipment reflects the use of the accelerated double-declining balance method to compute depreciation expense for machinery and equipment. We continue to add additional capacity for advanced passive component and connector products and expect to incur capital expenditures of $40 million to $50 million in fiscal 2006. The actual amount of capital expenditures will depend upon the outlook for end market demand.
The majority of the Company's funding is internally generated through operations and investment income from cash and investments in securities. Since March 31, 2005, there have been no significant changes in the Company's contractual obligations or commitments for the acquisition or construction of plant and equipment or future minimum lease commitments under noncancellable operating leases. Based on the financial condition of the Company as of June 30, 2005, the Company believes that cash on hand and cash expected to be generated from operating activities and investment income from cash and investments in securities will be sufficient to satisfy the Company's anticipated financing needs for working capital, capital expenditures, environmental clean-up costs, research, development and engineering expenses, and any dividend payments or stock repurchases to be made during the year. While changes in customer demand have an impact on the Company's future cash requirements, changes in those requirements are mitigated by the Company's ability to adjust manufacturing capabilities to meet increases or decreases in customer demand. Additionally, the Company does not anticipate any significant changes in its ability to generate or meet its liquidity needs in the long-term.
Although the majority of our funding is internally generated, certain of our European subsidiaries have from time to time borrowed various European currencies under various bank agreements. At June 30, 2005, there were no balances under such agreements. These borrowings have been used primarily to fund regional working capital requirements.
From time to time we enter into delivery contracts with selected suppliers for certain precious metals used in our production processes. The delivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As of June 30, 2005, we did not have any of these delivery contracts outstanding.
We are involved in disputes and legal proceedings arising in the normal course of business. While we cannot predict the outcome of these disputes and proceedings, we believe, based upon a review with legal counsel, that none of these disputes or proceedings will have a material impact on our financial position, results of operations, or cash flows. However, we cannot be certain of the eventual outcome of any particular proceeding and any adverse result in these or other matters that may arise from time to time may harm our financial position, results of operations, or cash flows.
We have 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 waste disposal and operating sites. We also operate on sites that may have environmental issues in the future. 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 or adjust our reserve for our projected share of these costs. Management believes that, as of June 30, 2005, its reserves of approximately $2.4 million are adequate with respect to these matters. Actual costs may vary from these estimated reserves, but such costs are not expected to have a material adverse effect on our financial condition or results of operations.
Restructuring
The Company recorded $26.9 million of restructuring charges in fiscal year 2004. Included in these charges were $16.8 million for employee separation costs covering approximately 855 production, technical, administrative and support employees in all geographic regions, $5.8 million for long-lived asset impairment write-downs of building and equipment at closed facilities in France and Taiwan to fair market value based on quoted market price, and $4.3 million related primarily to asset write-offs and other facility closure costs in France, Taiwan and Mexico. All asset impairment charges were related to the Passive Component segment. As of June 30, 2005, all of the related positions have been eliminated and $16.0 million of the severance costs has been paid. As of June 30, 2005, the remaining workforce reduction accrual of $0.8 million and facility closure costs of approximately $1.0 million are expected to be paid within the next twelve months.
Activity related to these costs is as follows:
| | | | | Facility | | |
| | | Workforce | | Closure | | |
| | | Reductions | | Costs | | Total |
| Balance at March 31, 2005 | $ | 1,094 | $ | 1,192 | $ | 2,286 |
| Utilized | | (305) | | (190) | | (495) |
| Balance at June 30, 2005 | $ | 789 | $ | 1,002 | $ | 1,791 |
New Accounting Standards
In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154 ("SFAS 154"), Accounting Changes and Error Corrections, which will require entities that voluntarily make a change in accounting principle to apply that change retrospectively to prior periods' financial statements, unless this would be impracticable. SFAS 154 supersedes APB Opinion No. 20, Accounting Changes, which previously required that most voluntary changes in accounting principle be recognized by including in the current period's net income the cumulative effect of changing to the new accounting principle. SFAS 154 also makes a distinction between "retrospective application" of an accounting principle and the "restatement" of financial statements to reflect the correction of an error. Another significant change in practice under SFAS 154 will be that if an entity changes its method of depreciation, amortization, or depletion for long-lived, non-financial assets, the change must be accounted for as a change in accounting estimate. Under APB Opinion No. 20, such a change would have been reported as a change in accounting principle. SFAS 154 applies to accounting changes and error corrections that are made in fiscal years beginning after December 15, 2005. The adoption of SFAS 154 is not expected to have a material impact on the Company’s financial position and results of operations.
In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151 (“SFAS 151”), “Inventory Costs an amendment of ARB No. 43, Chapter 4.” SFAS 151 requires that all abnormal idle facility expense, freight, handling costs, and spoilage be recognized as current-period charges regardless of whether they meet the criterion of “so abnormal.” In addition, SFAS 151 requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS 151 will not have a material impact on the Company’s financial position and results of operations.
In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payments” (“SFAS 123R”). This statement is a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation”. This statement supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related interpretations. SFAS 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. SFAS 123R establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans. This statement is effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2006. The Company is currently evaluating the impact of SFAS 123R on its financial statements and results of operations.
In December 2004, the FASB issued Statement of Financial Accounting Standards No.153 (“SFAS 153”), “Exchanges of Non-monetary Assets - An Amendment of APB Opinion No. 29”. SFAS 153 eliminates the exception to fair value accounting for exchanges of similar productive assets contained in APB Opinion No. 29 and replaces it with a general exception for exchange transactions that do not have commercial substance. The exception in APB Opinion No. 29 required certain non-monetary asset exchanges to be recorded on a carryover basis with no gain/loss recognition. Under SFAS 153, exchange transactions with commercial substance are required to be accounted for at fair value with gain/loss recognition on assets surrendered in exchange transactions. The Company will be required to adopt SFAS 153 on July 1, 2005, and believes the adoption of this standard will not have a material impact on the Company’s financial statements.
In December 2004, the FASB issued FASB Staff Position FAS 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004." The American Jobs Creation Act, which was signed into law on October 22, 2004, provides for a one-time dividends received deduction on the repatriation of certain foreign earnings to U.S. taxpayers. Historically, the Company has reinvested cumulative undistributed earnings of its non-U.S. subsidiaries and accordingly, deferred U.S. federal income taxes on such undistributed earnings were not recorded. The Company is currently evaluating the income tax effects of the foreign earnings repatriation provision within the Act and cannot reasonably estimate the income tax effects, if any, at this time.
| QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Our European sales, which accounted for approximately 26% of total sales during the three months ended June 30, 2005, are denominated in local, U.S. and Japanese currencies, while those in North America and Asia generally are denominated in U.S. dollars. Also, certain manufacturing and operating costs denominated in local currencies are incurred in Europe, Asia, Mexico and Central and South America. As a result, fluctuations in currency exchange rates affect our operating results and cash flow. In order to minimize the effect of movements in currency exchange rates, we periodically enter into forward exchange contracts to hedge external and intercompany foreign currency transactions. We do not hold or issue derivative financial instruments for speculative purposes. We have no material hedging commitments other than in Europe. Currency exchange gains and losses on foreign currency hedge contracts have been immaterial during the periods presented.
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, as the Company’s are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) under the Exchange Act, AVX's management, under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of the Company's disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. In performing this evaluation, management reviewed the Company’s internal controls over financial reporting, noting that there were three significant deficiencies that constituted material weaknesses in the Company’s internal control over financial reporting as discussed in “Management’s Report on Internal Control Over Financial Reporting” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer each concluded that the Company's disclosure controls and procedures were not effective in providing reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.
The Company is currently in the process of remediating the material weaknesses as disclosed in its Annual Report on Form 10-K for the fiscal year ended March 31, 2005 regarding bonus accruals, access to financial application programs and data and supervisory reviews over manual journal entries and expects to have these weaknesses remediated during the fiscal year. There were no changes to any reported financial results that have been released by the Company in this or any other filings as a result of these identified deficiencies.
There have been no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
| Unregistered Sales of Equity Securities and Use of Proceeds |
The following table provides information regarding purchases by AVX during the three months ended June 30, 2005 of equity securities that are registered pursuant to Section 12 of the Exchange Act:
Period | | Total Number of Shares Purchased (1) | | Average Price Paid Per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | | Maximum Number of Shares that may yet be Purchased Under the Plans or Programs (1) |
| 4/1/05 - 4/30/05 | | 120,000 | | $10.88 | | 120,000 | | 2,278,800 |
| 5/1/05 - 5/31/05 | | 380,000 | | 11.33 | | 380,000 | | 1,898,800 |
| 6/1/05 - 6/30/05 | | 135,000 | | 11.94 | | 135,000 | | 1,763,800 |
| Total | | 635,000 | | $11.38 | | 635,000 | | |
Pursuant to the requirements 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.
