UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~June 30, 201 ~~30, 2018~~9

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number1-7201

(Exact name of registrant as specified in its charter)

Delaware		33-0379007
(State or other jurisdiction of incorporation or organization)		(IRS Employer ID No.)

1 AVX Boulevard Fountain Inn, South Carolina		29644
(Address of principal executive offices)		(Zip Code)

(864) 967-2150
(Registrant's phone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	AVX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class		Outstanding at ~~November 1, 2018~~August 2, 2019
Common Stock, par value $0.01 per share		~~168,795,198~~169,092,718

Table of Contents

AVX Corporation and Subsidiaries

Table of Contents


		Page
PART I:	Financial Information:

ITEM 1.	Financial Statements (unaudited):	3
	Consolidated Balance Sheets as of March 31, ~~2018~~2019 and ~~September~~June 30, ~~2018~~2019	3
	Consolidated Statements of Operations for the three ~~and six~~ months ended ~~September~~June 30, ~~2017~~2018 and ~~2018~~2019	4
	Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~September~~June 30, ~~2017~~2018 and ~~2018~~2019	5
	Consolidated Statements of Stockholders’ Equity for the three months ended June 30, 2018 and 2019	6
	Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~September~~June 30, ~~2017~~2018 and ~~2018~~2019	67
	Notes to Consolidated Financial Statements	78
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2322
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3027
ITEM 4.	Controls and Procedures	3027

PART II:	Other Information:

ITEM 1.	Legal Proceedings	3128
ITEM 1A.	Risk Factors	31
~~ITEM 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	3128
ITEM 6.	Exhibits	3128
Signature		3229

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PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

AVX Corporation and Subsidiaries

Consolidated Balance Sheets ~~(unaudited)~~(unaudited)

(in thousands, except per share data)

	As of			As of			As of			As of
	March 31, 2018			September 30, 2018			March 31, 2019			June 30, 2019
Assets
Current assets:
Cash and cash equivalents	$	547,415		$	487,896		$	378,456		$	307,471
Short-term investments in securities		279,787			356,815			434,754			482,821
Accounts receivable - trade, net		275,259			262,433			256,991			243,417
Accounts receivable - affiliates		9,255			631			500			500
Inventories, net		516,777			555,761			631,688			666,248
Income taxes receivable		2,566			14,212			4,788			4,692
Prepaid and other		70,665			66,717			76,550			73,407
Total current assets		1,701,724			1,744,465			1,783,727			1,778,556
Property and equipment, net		418,286			437,554			455,757			478,044
Goodwill		316,298			327,926			316,675			317,080
Intangible assets, net		128,612			125,750			118,944			115,400
Deferred income taxes		75,720			68,306			75,938			80,905
Other assets		32,126			36,654			62,237			78,590
Total Assets	$	2,672,766		$	2,740,655		$	2,813,278		$	2,848,575
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable - trade	$	89,726		$	93,057		$	95,498		$	88,020
Accounts payable - affiliates		26,320			1,226			1,133			920
Income taxes payable		8,290			19,924			24,993			13,302
Accrued payroll and benefits		52,044			52,205			55,068			53,429
Accrued expenses		118,183			151,014			136,493			137,810
Total current liabilities		294,563			317,426			313,185			293,481
Income taxes payable		69,645			63,589			47,588			47,588
Pensions		10,605			7,954			9,543			10,059
Deferred income taxes		12,895			12,224			14,235			13,816
Other liabilities		41,615			39,709			44,547			56,472
Total Liabilities		429,323			440,902			429,098			421,416

Stockholders' Equity:
Preferred stock, par value $.01 per share:
Authorized, 20,000 shares; None issued and outstanding		-			-			-			-
Common stock, par value $.01 per share:
Authorized, 300,000 shares; issued, 176,369 shares; outstanding, 168,434 and 168,795 shares at March 31, 2018 and September 30, 2018, respectively		1,764			1,764
Authorized, 300,000 shares; issued, 176,369 shares; outstanding, 168,826 and 169,081 shares at March 31, 2019 and June 30, 2019, respectively								1,764			1,764
Additional paid-in capital		360,077			360,076			362,498			359,831
Retained earnings		1,962,467			2,051,628			2,156,584			2,191,817
Accumulated other comprehensive income (loss)		21,257			(16,139	)
Accumulated other comprehensive loss								(39,494	)		(32,371	)
Treasury stock, at cost:
7,935 and 7,574 shares at March 31, 2018 and September 30, 2018, respectively		(102,122	)		(97,576	)
7,543 and 7,287 shares at March 31, 2019 and June 30, 2019, respectively								(97,172	)		(93,882	)
Total Stockholders' Equity		2,243,443			2,299,753			2,384,180			2,427,159
Total Liabilities and Stockholders' Equity	$	2,672,766		$	2,740,655		$	2,813,278		$	2,848,575

See accompanying notes to consolidated financial statements.

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AVX Corporation and Subsidiaries

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended						Six Months Ended						Three Months Ended
	September 30,						September 30,						June 30,
	2017			2018			2017			2018			2018			2019
Net sales	$	352,693		$	456,328		$	684,047		$	910,444		$	454,116		$	401,769
Cost of sales		275,420			329,852			532,928			675,635			345,783			301,124
Gross profit		77,273			126,476			151,119			234,809			108,333			100,645
Selling, general and administrative expenses		32,487			40,839			63,902			81,154			40,316			41,932
Profit from operations		44,786			85,637			87,217			153,655			68,017			58,713
Other income (loss):
Interest income		5,067			4,055			7,398			7,538			3,483			4,867
Other, net		(813	)		(760	)		(1,231	)		(1,491	)		(730	)		(371	)
Income before income taxes		49,040			88,932			93,384			159,702			70,770			63,209
Provision for income taxes		14,222			16,863			27,082			31,670			14,807			8,532
Net income	$	34,818		$	72,069		$	66,302		$	128,032		$	55,963		$	54,677

Income per share:
Basic	$	0.21		$	0.43		$	0.39		$	0.76		$	0.33		$	0.32
Diluted	$	0.21		$	0.43		$	0.39		$	0.76		$	0.33		$	0.32

Dividends declared (per share)	$	0.115		$	0.115		$	0.225		$	0.230		$	0.115		$	0.115
Weighted average common shares outstanding:
Basic		168,262			168,749			168,167			168,621			168,492			169,021
Diluted		168,918			169,472			168,754			169,217			168,964			169,478

See accompanying notes to consolidated financial statements.

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AVX Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	Three Months Ended				Six Months Ended						Three Months Ended
	September 30,				September 30,						June 30,
	2017		2018		2017			2018			2018			2019
Net income	$	34,818	$	72,069	$	66,302		$	128,032		$	55,963		$	54,677
Other comprehensive income (loss), net of income taxes
Foreign currency translation adjustment		12,385		1,310		33,447			(40,431	)		(41,741	)		6,438
Foreign currency cash flow hedges adjustment		267		126		(421	)		189			63			(187	)
Pension liability adjustment		68		216		(113	)		2,846			2,630			872
Other comprehensive income (loss), net of income taxes		12,720		1,652		32,913			(37,396	)		(39,048	)		7,123
Comprehensive income	$	47,538	$	73,721	$	99,215		$	90,636		$	16,915		$	61,800

See accompanying notes to consolidated financial statements.

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AVX Corporation and Subsidiaries

Consolidated Statements of Stockholders’ Equity (Unaudited)

(in thousands, except per share data)

Accumulated

Common Stock

Additional

Other

Number

Treasury

Paid-In

Retained

Comprehensive

Of Shares

Amount

Stock

Capital

Earnings

Income (Loss)

Total

Balance at March 31, 2018
168,434 $ 1,764 $ (102,122 ) $ 360,077 $ 1,962,467 $ 21,257 $ 2,243,443
Net income
- - - - 55,963 - 55,963
Other comprehensive loss, net of income taxes
- - - - - (39,048 ) (39,048 )
Dividends of $0.115 per share
- - - - (19,466 ) - (19,466 )
Stock-based compensation expense
- - - 838 - - 838
Stock option activity
95 - 1,940 (1,396 ) - - 544
Tax expense on stock option exercises
- - - (24 ) - - (24 )
Payment of tax withholding for vested restricted stock units
- - (720 ) - - (720 )
Treasury stock purchased
- - (811 ) - - - (811 )
Balance at June 30, 2018
168,529 $ 1,764 $ (100,993 ) $ 358,775 $ 1,998,964 $ (17,791 ) $ 2,240,719

Balance at March 31, 2019
168,826 $ 1,764 $ (97,172 ) $ 362,498 $ 2,156,584 $ (39,494 ) $ 2,384,180
Net income
- - - - 54,677 - 54,677
Other comprehensive loss, net of income taxes
- - - - - 7,123 7,123
Dividends of $0.115 per share
- - - - (19,444 ) - (19,444 )
Stock-based compensation expense
- - - 996 - - 996
Stock option activity
255 - 3,290 (2,494 ) - - 796
Tax benefit of stock option exercises
- - - 135 - - 135
Payment of tax withholding for vested restricted stock units
- - - (1,304 ) - - (1,304 )
Balance at June 30, 2019
169,081 $ 1,764 $ (93,882 ) $ 359,831 $ 2,191,817 $ (32,371 ) $ 2,427,159

See accompanying notes to consolidated financial statements.

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AVX Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Six Months Ended						Three Months Ended
	September 30,						June 30,
	2017			2018			2018			2019
Operating Activities:
Net income	$	66,302		$	128,032		$	55,963		$	54,677
Adjustment to reconcile net income to net cash from operating activities:
Depreciation and amortization		21,241			41,937			20,289			22,185
Stock-based compensation expense		1,727			1,848			838			996
Deferred income taxes		746			(1,455	)		(1,250	)		(3,190	)
Gain on disposal of property and equipment		1			258
Equity income from equity-method investments		-			36
Loss on disposal of property and equipment								33			620
Loss from equity-method investments								44			195
Changes in operating assets and liabilities, excluding acquisitions:
Accounts receivable		(9,291	)		17,196			22,579			13,238
Inventories		15,559			(42,626	)		(1,373	)		(32,718	)
Accounts payable and accrued expenses		(3,035	)		8,796			(8,479	)		(17,671	)
Income taxes payable		(1,373	)		(8,004	)		14,107			(12,426	)
Other assets		28,900			(19,094	)		(10,488	)		(7,582	)
Other liabilities		7,657			11,537			5,364			13,781
Net cash provided by operating activities		128,434			138,461			97,627			32,105

Investing Activities:
Purchases of property and equipment		(38,916	)		(65,016	)		(38,020	)		(34,350	)
Purchase of business, net of cash and debt acquired		-			(12,317	)		(12,909	)		-
Purchases of investment securities		(986,710	)		(699,887	)		(380,803	)		(472,171	)
Redemptions of investment securities		970,348			621,640			270,947			424,269
Other investing activities		(960	)		(951	)		(958	)		-
Net cash used in investing activities		(56,238	)		(156,531	)		(161,743	)		(82,252	)

Financing Activities:
Dividends paid		(37,004	)		(38,785	)		(19,381	)		(19,444	)
Proceeds from exercise of stock options		4,121			3,509
Purchase of treasury stock		-			(811	)		(811	)		-
Net change of equity awards								(199	)		(373	)
Principle payments of debt		-			(1,893	)		(1,892	)		-
Payments of tax withholdings for vested restricted stock units		(498	)		(790	)		(720	)		(1,304	)
Net cash used in financing activities		(33,381	)		(38,770	)		(23,003	)		(21,121	)

Effect of exchange rate on cash		1,340			(2,679	)		(2,361	)		283

Increase (decrease) in cash and cash equivalents		40,155			(59,519	)
Decrease in cash and cash equivalents								(89,480	)		(70,985	)

Cash and cash equivalents at beginning of period		578,634			547,415
Cash and cash equivalents at end of period	$	618,789		$	487,896
Cash, cash equivalents, and restricted cash at beginning of period								547,415			400,625
Cash, cash equivalents, and restricted cash at end of period							$	457,935		$	329,640
Reconciliation of cash, cash equivalents, and restricted cash to the Balance Sheet
Cash and cash equivalents								457,935			307,471
Restricted cash								-			22,169
Total cash, cash equivalents, and restricted cash to the Balance Sheet							$	457,935		$	329,640

See accompanying notes to consolidated financial statements.

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AVX Corporation and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

(in thousands, except per share data)

1. Basis of Presentation:

The consolidated financial statements of AVX Corporation and its subsidiaries (“AVX” or the “Company”) include all accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated. We have prepared the accompanying financial statements 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 statement of the consolidated balance sheets, operating results, comprehensive income, statements of stockholders’ equity and cash flows for the periods presented. Operating results for the three ~~and six months~~ month period ended ~~September~~June 30, ~~2018~~ 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, ~~2019~~ 2020 due to changes in economic conditions 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 for interim financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form ~~10-K~~10-K for the fiscal year ended March 31, ~~2018.~~

2019.

Summary of Significant Accounting Policies

We have identified the accounting policies and estimates that are critical to our business operations and understanding our results of operations. Those policies and estimates can be found in Note 1, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements and in “Critical Accounting Policies and Estimates,” in “Management's Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form ~~10-K~~10-K for the fiscal year ended March 31, ~~2018.~~ 2019. Accordingly, this Quarterly Report on Form ~~10-Q~~10-Q should be read in conjunction with our Annual Report on Form ~~10-K~~10-K for the fiscal year ended March 31, ~~2018.~~ 2019. During the three ~~and six~~ month ~~periods~~period ended ~~September~~June 30, ~~2018,~~ 2019, there were no significant changes to any critical accounting policies or to the methodology used in determining estimates including those related to investment securities, inventories, goodwill, intangible assets, property and equipment, and contingencies other than those discussed ~~below and~~below.

During the three month period ended June 30, 2019, goodwill increased by $405 due to foreign currency translation.

Reclassifications

Certain amounts in ~~Note 3 related~~the prior year consolidated financial statements have been reclassified to ~~revenue recognition.~~

~~Revenue Recognition:~~

All products are built to specification and tested by AVX or our suppliers for adherence to such specification before shipment to customers. We ship products to customers based upon firm orders. Shipping and handling costs are treated as fulfillment costs and as such are included in cost of sales.the current year presentation. The ~~Company applies this accounting policy election consistently to its sales. We recognize revenue as performance obligations are satisfied, which is when the customer takes control~~impact of the ~~products as they are shipped~~reclassifications made to ~~or received by the customer in accordance with the terms of the agreement of sale.~~prior year amounts is not material and did not affect net loss.

There are general product warranties within our contracts, as the Company warrants that products will function as expected in accordance with the specifications per the contract. These warranties cannot be purchased by the customer separately and accordingly these warranties are not considered to be separate performance obligations.

Payment terms for the Company’s sales are generally less than 90 days. Substantially all of the Company’s receivables are collected within twelve months of the transfer of products to the customer and the Company expects this to continue going forward. The Company applies the practical expedient within ASC 606 to all of its contracts with payment terms less than or equal to twelve months and does not recognize a financing component in the determination of the transaction price.

We evaluate gross versus net presentation on revenues from products purchased and resold in accordance with the revenue recognition criteria outlined in ASC 606. Based on the evaluation of our resale arrangements with Kyocera, including consideration of the primary indicators set forth in ASC 606, we record revenue related to products purchased and resold on a gross basis.

~~The Company pays commissions to sales representatives on a per-sale basis and applies the practical expedient available within ASC 340. Accordingly, commissions are expensed as incurred.~~

~~Table of Contents~~

The Company recognizes the estimated variable consideration to be received as revenue and records a related reduction to accounts receivable or as an accrued expense for the consideration not expected to be received, based upon its estimate of credits issued or products returned under the sales allowance programs described below. Marketplace volatilities which impact the estimates of variable consideration include, but are not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be no assurance that actual results will not differ from those estimates. We utilize the “portfolio approach” practical expedient in ASC 606, which allows entities to apply the guidance to a portfolio of contracts with similar characteristics because the effects on the financial statements of this approach would not differ materially from applying the guidance to individual contracts. Using the “portfolio approach,” we believe we have an adequate basis to assess the reasonableness and reliability of our estimates for each program.

~~Returns~~

Sales revenue and cost of sales reported in the statement of operations are reduced to reflect estimated returns. We record an estimated right of return liability for returns at the time of sale based on historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. The liability accrued reflects the variable consideration not expected to be received. The estimated value of the return to customer’s inventory is recorded as an asset. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns. Our actual results have historically approximated our estimates. When the product is returned and verified, the customer is given credit against their accounts receivable.

~~Distribution Programs~~

A portion of our sales to independent electronic component distributor customers are subject to various distributor sales programs. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report distributor allowances on the balance sheet as either a reduction in accounts receivable or right-of-return liabilities. For the distribution programs described below, we do not track the individual units that are recorded against specific products sold from distributor inventories, which would allow us to directly compare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold during that period. Rather, we believe our use of the “portfolio approach” provides an adequate basis to assess the reasonableness and reliability of our estimates for each program.

~~Distributor Stock Rotation Program~~

Stock rotation is a program whereby distributor customers 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. We record an estimated right of return liability for stock rotation at the time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other market specific information, and input from sales, marketing, and other key management personnel. An asset is recorded for the estimated value of returned product. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns under the stock rotation program. Our actual results have historically approximated our estimates. When the product is returned and verified, the distributor is given credit against their accounts receivable.

~~Distributor Ship-from-Stock and Debit Program~~

Ship-from-Stock and Debit (“ship and debit”) is a program designed to assist distributor customers in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a specific part for a sale to the distributor’s end customer from the distributor’s stock. The pricing adjustment is deemed variable consideration. Ship and debit authorizations may cover current and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, we provide an allowance for the variable consideration of the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future credits under the ship and debit program. Our actual results have historically approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment.

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Relevant New Accounting Standards

In ~~2014,~~2016, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance modifies how an entity will determine the measurement of revenue and timing of when it is recognized. The Company adopted this guidance effective April 1, 2018, using the modified retrospective method, with no material impact on our results of operations. Please refer to Note 3 for additional information.

~~In February~~ 2016 ~~FASB issued ASU 2016-02, “Leases.”~~-02, “Leases”. This guidance changes the requirements for inclusion of certain right-of-use assets and the associated ~~lease~~ liabilities to be included in a statement of financial position. The Company adopted this guidance effective April 1, 2019, using the modified retrospective method and utilized the optional transition method under which the Company will continue to apply the legacy guidance in Accounting Standards Codification (“ASC”) 840, including its disclosure requirements, in the comparative period presented. In addition, the Company elected the package of practical expedients permitted under the transition guidance which permits the following: a) carrying forward the historical lease classification, ~~criteria maintains~~b) not separating lease components from non-lease components within the ~~distinction between finance leases~~Company’s facility lease contracts, c) not presenting comparative periods but rather recording a cumulative catch-up during fiscal 2020, and d) electing, by asset class, not to record on the balance sheet a lease whose term is twelve months or less including reasonably certain renewal options. As a result of the adoption of ASU 2016-02 for the fiscal year beginning April 1, 2019, the Company recorded initial operating lease right-of-use assets and operating ~~leases. Regarding finance leases, lessees~~lease liabilities related of $18,351 and $18,053, respectively. Right-of-use assets are ~~required~~included in “Other assets” on the Company’s Balance Sheet as of June 30, 2019. Lease liabilities are classified as current and non-current, and are included in “Accrued expenses” and “Other liabilities”, respectively, on the Company’s Balance Sheet as of June 30, 2019. Please refer to ~~1) recognize~~Note 2 for additional information.

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In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurements of Credit Losses on Financial Instruments.” This standard requires the measurement and recognition of expected credit losses held at amortized cost. This new standard replaces the use of forward-looking information to estimate credit losses and requires credit losses for available for sale debt securities to be recorded through an allowance for credit losses rather than a ~~right-of-use asset and a lease liability, initially measured at the present value of the lease payments,~~reduction in the statement of financial position, 2) recognize interest on the lease liability separate from the amortization of the right-of-use asset in the statement of comprehensive income, and 3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. Regarding operating leases, lessees are required to 1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, 2) recognize a single leaseamortized cost calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and 3) classify all cash payments within operating activities in the statement of cash flows.basis. This ~~guidance~~update is effective for public companies for ~~interim and~~ annual reporting periods beginning after December 15, ~~2018. Early adoption~~2019. Management is ~~permitted. Prior to our recent acquisitions, we disclosed that we anticipated no material impact from adopting ASU 2016-02. However, we are in the process of updating our assessment to include~~currently evaluating the impact of ASU 2016-13 on our ~~recently acquired companies.~~consolidated financial statements.
In August 2017,the FASB issued ASU ~~2017-12,~~2017-12, “Derivatives and Hedging.” The standard aims to align the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results for cash flow and fair value hedge accounting with risk management activities. The guidance is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Additionally, in October 2018, the FASB issued ASU 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes”, which permits use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815. This update is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. For entities that have not yet adopted ASU 2017-12, the concurrent adoption of ASU 2018-16 is required. The Company concurrently adopted ASU 2017-12 and ASU 2018-16 effective April 1, 2019. The adoption of these standards has not had a material impact on our consolidated financial statements.
In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income." This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted infor any interim and annual financial statements that have not yet been issued. The Company adopted ASU 2018-02 effective April 1, 2019 and elected to not reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The adoption of this standard has not had a material impact on our consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. This standard removes, adds and modifies certain disclosure requirements in the existing framework. ASU 2018-13 removes the following disclosure requirements: (i) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and (ii) the entity’s valuation processes for Level 3 fair value measurements. ASU 2018-13 adds the following disclosure requirements: (i) provide information about the measurement uncertainty of Level 3 fair value measurements as of the reporting date rather than a point in the future, (ii) disclose changes in unrealized gains and losses related to Level 3 measurements for the period included in other comprehensive income, and (iii) disclose for Level 3 measurements the range and weighted average of the significant unobservable inputs and the way it is calculated. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after ~~issuance. Management~~December 15, 2019. Early adoption is permitted. We are currently evaluating the potential impact ~~this~~on our consolidated financial statements and disclosures.
In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General.” This standard removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and added additional disclosures. The standard is effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The amendments in ASU 2018-14 would need to be applied on a retrospective basis. We are currently assessing the impact the new guidance will have on our disclosures.
In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting For Implementation Costs Incurred In A Cloud Computing Arrangement That Is A Service Contract”. This guidance reduces the complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This update is effective for public companies for annual reporting periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company early adopted this standard effective April 1, 2019, utilizing the prospective approach to all implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 has not had a material impact on our consolidated financial statements.
We have reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to our business or that no material effect is expected on our consolidated financial statements as a result of future adoption.
2. Leases:

~~2. Acquisitions:~~As discussed in Note 1, we adopted the new leasing standard using the modified retrospective approach with an effective date of April 1, 2019. Prior year financial statements were not recast under the new standard and, therefore, those amounts are not presented below. We elected the package of transition provisions available for expired or existing contracts, which allowed us to carry forward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs.

We used the acquisition method of accounting to record the below transactions in accordance with FASB Accounting Standards Codification Topic 805, “Business Combinations.” In accordance with the acquisition method, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values with the excess being allocated to goodwill. Factors that contributed to the recognition of goodwill include expected synergies and the trained workforce. The goodwill is not deductible for tax purposes.

On October 2, 2017, AVX acquired the AB Electronics sensing and control business from TT Electronics, PLC, for $162,038, net of cash acquired. Now named Sensing and Control (“S&C”) and consolidated with our Interconnect, Sensing and Control Devices segment (formerly AVX Interconnect) for financial reporting purposes, the acquisition enhances AVX’s position in the automotive business and provides further opportunities for expansion and growth.

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The ~~results~~Company’s operating leases consist of ~~operations~~automobiles, machinery and equipment, and real estate, including office, storage and parking spaces. The duration of these leases range from 1 to 6 years. The Company has no financing lease arrangements. For leases with terms greater than 12 months, the Company recorded the related right-of-use asset and lease liability at the present value of lease payments over the term. Leases with a term 12 months or less at inception are not recorded on our Consolidated Balance Sheet and are expensed on a straight-line basis over the lease term in our Consolidated Statement of Operations. Some of our leases contain variable rental escalation clauses which are recognized when incurred. Additionally, some of our leases contain renewal options and/or termination options that are factored into the determination of lease payments and lease terms when it is reasonably certain that the Company will exercise these options. The Company recognizes lease expense for ~~S&C since~~these leases on a straight-line basis over the ~~acquisition date are included~~lease term. For leases beginning in fiscal year 2020 and later, we account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease components (e.g., common area maintenance costs).

When available, we use the rate implicit in the ~~accompanying consolidated statements~~lease to discount lease payments to present value; however, most of ~~operations.~~

Assets Acquired and Liabilities Assumed

Allocation of
Purchase Price

Accounts receivable
$ 61,483
Inventory
42,443
Accounts payable and accrued liabilities
(67,930 )
Other current assets and liabilities, net
8,566
Working capital
44,562
Property and equipment
85,794
Intangible assets
18,168
Other non-current assets and liabilities, net
(13,806 )
Total identified assets and liabilities
134,718
Purchase price
162,038
Goodwill
$ 27,320

~~We recorded approximately $18,168~~our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Our incremental borrowing rate is based on a credit-adjusted risk-free rate at commencement date, which best approximates a secured rate over a similar term of identifiable intangible assets and $27,320 of goodwill pertaining to this acquisition. The acquired intangible assets relate to the AB Electronics trade name, existing technology and customer relationships which are being amortized over one, eleven, and six years respectively. In the quarter ended September 30, 2018, immaterial measurement period adjustments were made to the allocation of the purchase price. The measurement period is no longer open.lease.

The unaudited pro forma combined financial information is provided for the three and six month periods ended September 30, 2017 as though S&C had been acquired as of April 1, 2017. These pro forma combined results of revenues have been prepared by adjustingfollowing table presents our historical results to include the historical results of S&C based on information available. Unaudited pro forma net sales for the three and six month periods ending September 30, 2017 would have been $442,057 and $871,161, respectively, with the inclusion of S&C's net sales for such period. We recognized revenue of $89,364 from S&C in the three month period ended September 30, 2018 and $187,114 for the six month period ended September 30, 2018.lease balances:

On January 31, 2018, AVX acquired Ethertronics, Inc. for $127,677 net of cash and debt acquired. The Ethertronics business is now named “AVX Antenna” and is consolidated with our Electronic Components segment. The purchase of Ethertronics expands AVX’s extensive electronic product offering into the antenna technology market and will provide new and exciting growth opportunities for AVX going forward.

Assets Acquired and Liabilities Assumed

Allocation of
Purchase Price

Accounts receivable
$ 14,419
Accounts payable
(10,140 )
Other current assets and liabilities, net
3,613
Working capital
7,892
Debt
(21,105 )
Property and equipment
13,769
Intangible assets
64,800
Other non-current assets and liabilities, net
(15,498 )
Total identified assets and liabilities
49,858
Purchase price
127,677
Goodwill
$ 77,819

Classification on the Balance Sheet

As of June 30, 2019

Assets

Operating lease assets
Other assets
$ 17,054

Liabilities

Current

Operating lease liabilities
Accrued expenses
$ 5,057
Noncurrent

Operating lease liabilities
Other liabilities
11,727
Total lease liabilities
$ 16,784

The ~~results of operations~~following table presents our lease costs for ~~AVX Antenna since~~operating leases:

Three months ended

June 30, 2019

Operating lease cost
$ 1,148
Short-term lease cost
533
Variable lease cost
444
Total lease cost
$ 2,125
The Company paid $2,251 for its operating leases in the ~~acquisition date~~fiscal quarter ended June 30, 2019, which are included in operating cash flows on the ~~accompanying~~ consolidated ~~statements~~statement of ~~operations. We recorded approximately $64,800~~cash flows. The weighted-average remaining lease term for the Company’s operating leases is 3.8 years and the weighted-average discount rate is 3.25% as of identifiable intangible assets and $77,819 of goodwill. The acquired intangible assets relate to the Ethertronics trade name, existing technology and customer relationships which are being amortized over ten, ten, and thirteen years, respectively. We recognized revenue of $31,806 and $63,747 from AVX Antenna in the three and six month periods ended SeptemberJune 30, ~~2018, respectively. Immaterial working capital and other measurement period adjustments were made to the allocation to the purchase price. The measurement period remains open until February~~ 2019.

On April 30, 2018, AVX, through its subsidiary AVX Interconnect Europe GmbH, acquired KUMATEC Sondermaschinenbau & Kunststoffverarbeitung GmbH (“Kumatec”) for consideration of approximately $12,882, net of cash acquired and debt assumed. Now named Kumatec and consolidated with our Interconnect, Sensing and Control segment, the purchase of Kumatec provides AVX with additional manufacturing capabilities and new business opportunities. We recorded approximately $3,189 of identifiable intangible assets and $9,754 of goodwill. The acquired intangible assets relate to the Kumatec trade name, existing technology and customer relationships which are being amortized over six years. We recognized revenue of $658 and $2,755 from Kumatec in the three and six month periods ended September 30, 2018.
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~~3. Revenue Recognition:~~

We adopted ASC 606 effective April 1, 2018 using the modified retrospective approach. We elected the practical expedient to only apply the standard to contracts that were not completed at the effective date. Implementing this standard had no impact on our revenue recognition for the uncompleted contracts and accordingly no cumulative adjustment was made to the opening balance of retained earnings as of April 1, 2018.

We identified a change in how we record right-of-return liabilities which impacts Current Assets and Current Liabilities. The change is primarily due to how ASC 606 defines a right-of-return contract liability. The following table ~~compares~~reconciles the ~~amounts reported in~~undiscounted cash flows for each of the ~~Consolidated Balance Sheet~~firstfive years and total of the remaining years to the operating lease liabilities on the balance sheet as of June 30, 2019:

Fiscal Year Ending

2020
$ 4,529
2021
4,955
2022
3,495
2023
2,040
2024
1,392
Thereafter
1,502
Total operating lease payments
$ 17,913
Less imputed interest
1,129
Total operating lease liabilities
$ 16,784
As of April 1, 2019, the Company had the ~~previous revenue recognition guidance been in effect:~~following future minimum lease payments under non-cancelable leases prior to the adoption of the new lease standard:

Six Months Ended September 30, 2018

Balances without

Increase Due to

As reported

ASC 606 Adoption

Adoption

Accounts Receivable - trade, net
$ 262,433 $ 247,611 $ 14,822
Accrued Expenses
$ 151,014 $ 136,192 $ 14,822
Fiscal Year Ending

2020
$ 6,642
2021
4,742
2022
3,218
2023
2,372
2024
445
Thereafter
1,856
Total operating lease payments
$ 19,275

~~Reference Note 5, "Trade Accounts Receivable and Contract Liabilities," for information on variable consideration and right-of-return liability details.~~
~~Reference Note 11, "Segment and Geographic Information," for disaggregated revenue information.~~

4.3. Earnings per Share:

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the dilutive effect of potential common stock equivalents during the period. Stock options and unvested service-based ~~restricted stock unit (“RSU”)~~RSU awards make up the common stock equivalents and are computed using the treasury stock method.

The table below represents the basic and diluted earnings per share and sets forth the weighted average number of shares of common stock outstanding and potential common stock equivalents for the three ~~and six~~ month periods ending ~~September~~June 30, ~~2017~~ 2018 and ~~2018.~~2019.

	Three Months Ended				Six Months Ended				Three Months Ended
	September 30,				September 30,				June 30,
	2017		2018		2017		2018		2018		2019
Net income	$	34,818	$	72,069	$	66,302	$	128,032	$	55,963	$	54,677
Computation of Basic EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		168,262		168,749		168,167		168,621		168,492		169,021
Basic earnings per share	$	0.21	$	0.43	$	0.39	$	0.76	$	0.33	$	0.32
Computation of Diluted EPS:
Weighted Average Shares Outstanding used in Computing Basic EPS		168,262		168,749		168,167		168,621		168,492		169,021
Effect of stock awards		656		723		587		596		472		457
Weighted Average Shares used in Computing Diluted EPS (1)		168,918		169,472		168,754		169,217		168,964		169,478
Diluted earnings per share	$	0.21	$	0.43	$	0.39	$	0.76	$	0.33	$	0.32

~~(1)~~

(1)

Common stock equivalents not included in the computation of diluted earnings per share because the impact would have been anti-dilutive were 055 shares and 1456 shares for the three month periods ended ~~September~~June 30, ~~2017~~ 2018 and ~~2018, respectively and 94 shares and 14 shares for the six months ended September 30, 2017 and 2018,~~2019, respectively.

4. Trade Accounts Receivable and Contract Liabilities:

March 31, 2019

June 30, 2019

Gross Accounts Receivable - trade
$ 273,053 $ 259,417
Less:

Allowances for doubtful accounts
1,276 1,167
Stock rotation and ship from stock and debt
14,140 14,350
Sales returns and discounts
646 483
Total allowances
16,062 16,000
Accounts Receivable - trade, net
256,991 243,417
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~~5. Trade Accounts Receivable and Contract Liabilities:~~

March 31, 2018

September 30, 2018

Gross Accounts Receivable - trade
$ 300,016 $ 274,299
Less:

Allowances for doubtful accounts
1,893 1,327
Stock rotation
7,109 -
Ship from stock and debit
9,663 10,201
Sales returns
5,374 -
Discounts
718 338
Total allowances
24,757 11,866
Accounts Receivable - trade, net
$ 275,259 $ 262,433

Charges related to allowances for doubtful accounts are charged to selling, general and administrative expenses. Charges related to stock rotation, ship from stock and debit, sales returns, and sales discounts are reported as deductions from revenue. Please refer to Note ~~3, “Revenue Recognition,”~~10, "Segment and Geographic Information," for ~~additional~~disaggregated revenue information.

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Three Months Ended

June 30,

2018

2019

Allowances for doubtful accounts:

Beginning balance
$ 1,893 $ 1,276
Charges
91 26
Applications
(690 ) (137 )
Translation, acquisition and other - 2
Ending balance
$ 1,294 $ 1,167

Three Months Ended

June 30,

2018

2019

Stock rotation and ship stock and debit:

Beginning balance
$ 15,989 $ 14,140
Charges
6,392 5,298
Applications
(6,186 ) (5,088 )
Stock rotation reclassified to liability
(6,326 ) -
Ending balance
$ 9,869 $ 14,350

Three Months Ended

June 30,

2018

2019

Sales returns and discounts:

Beginning balance
$ 6,875 $ 646
Charges
86 1,588
Applications
(215 ) (1,719 )
Sales returns reclassified to liability
(6,157 ) -
Translation, acquisition and other
- (32 )
Ending balance
$ 589 $ 483

Three Months Ended

June 30,

2018

2019

Contract liabilities:

Beginning balance
$ - $ 15,753
Increase due to adoption of ASC 606
12,483 -
Charges
6,221 2,870
Applications
(4,819 ) (2,035 )
Translation, acquisition and other
(16 ) 9
Ending balance
$ 13,869 $ 16,597

Three Months Ended

Six Months Ended

September 30,

September 30,

2017

2018

2017

2018

Allowances for doubtful accounts:

Beginning balance
$ 1,447 $ 1,294 $ 1,285 $ 1,893
Charges
- 49 164 81
Applications
(846 ) (16 ) (848 ) (647 )
Ending balance
$ 601 $ 1,327 $ 601 $ 1,327

Three Months Ended

Six Months Ended

September 30,

September 30,

2017

2018

2017

2018

Stock rotation and ship from stock and debit:

Beginning balance
$ 14,893 $ 9,869 $ 14,853 $ 15,989
Charges
7,527 7,072 14,266 13,464
Applications
(7,301 ) (6,740 ) (14,000 ) (12,926 )
Stock rotation reclassified to liability
- - - (6,326 )
Ending balance
$ 15,119 $ 10,201 $ 15,119 $ 10,201

Three Months Ended

Six Months Ended

September 30,

September 30,

2017

2018

2017

2018

Sales returns and discounts:

Beginning balance
$ 5,163 $ 589 $ 5,623 $ 6,875
Charges
2,715 1,974 6,780 2,060
Applications
(2,819 ) (2,219 ) (7,372 ) (2,434 )
Sales returns reclassified to liability
- - - (6,157 )
Translation, acquisition and other
17 (6 ) 45 (6 )
Ending balance
$ 5,076 $ 338 $ 5,076 $ 338

6.5. Fair Value:

Fair Value Hierarchy:

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

	^■	Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

	^■	Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

	^■	Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs ~~reflecting management’s own assumptions about~~used in pricing the ~~inputs used in pricing the~~ asset or liability.

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During the three ~~and six~~ month periods ended ~~September~~March 31, 2019 and June 30, ~~2018,~~ 2019, there have been no transfers of assets or liabilities between levels within the fair value hierarchy.

Based on

Quoted

prices

Other

in active

observable

Unobservable

Fair Value at

markets

inputs

inputs

March 31, 2019

(Level 1)

(Level 2)

(Level 3)

Assets measured at fair value on a recurring basis:

Assets held in the non-qualified deferred compensation program⁽¹⁾
$ 4,693 $ 3,265 $ 1,428 $ -
Foreign currency derivatives⁽²⁾
853 - 853 -
Total
$ 5,546 $ 3,265 $ 2,281 $ -

Based on

Quoted

prices

Other

in active

observable

Unobservable

Fair Value at

markets

inputs

inputs

March 31, 2019

(Level 1)

(Level 2)

(Level 3)

Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified deferred compensation program⁽¹⁾
$ 4,693 $ 3,265 $ 1,428 $ -
Foreign currency derivatives(2)
588 - 588 -
Total
$ 5,281 $ 3,265 $ 2,016 $ -

Based on

Quoted

prices

Other

in active

observable

Unobservable

Fair Value at

markets

inputs

inputs

June 30, 2019

(Level 1)

(Level 2)

(Level 3)

Assets measured at fair value on a recurring basis:

Assets held in the non-qualified deferred compensation program⁽¹⁾ $ 4,963 $ 3,468 $ 1,495 $ -
Foreign currency derivatives⁽²⁾ 601 - 601 -
Total
$ 5,564 $ 3,468 $ 2,096 $ -
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Based on

Based on

Quoted

Quoted

prices

Other

prices

Other

in active

observable

Unobservable

in active

observable

Unobservable

Fair Value at

markets

inputs

inputs

Fair Value at

markets

inputs

inputs

March 31, 2018

(Level 1)

(Level 2)

(Level 3)

June 30, 2019

(Level 1)

(Level 2)

(Level 3)

Assets measured at fair value on a recurring basis:

Assets held in the non-qualified deferred compensation program⁽¹⁾
$ 6,649 $ 5,959 $ 690 $ -
Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified deferred compensation program⁽¹⁾ $ 4,963 $ 3,468 $ 1,495 $ -
Foreign currency derivatives⁽²⁾
257 - 257 - 619 - 619 -
Total
$ 6,906 $ 5,959 $ 947 $ - $ 5,582 $ 3,468 $ 2,114 $ -

Based on

Quoted

prices

Other

in active

observable

Unobservable

Fair Value at

markets

inputs

inputs

March 31, 2018

(Level 1)

(Level 2)

(Level 3)

Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified deferred compensation program⁽¹⁾
$ 6,649 $ 5,959 $ 690 $ -
Foreign currency derivatives⁽²⁾
514 - 514 -
Total
$ 7,163 $ 5,959 $ 1,204 $ -

Based on

Quoted

prices

Other

in active

observable

Unobservable

Fair Value at

markets

inputs

inputs

September 30, 2018

(Level 1)

(Level 2)

(Level 3)

Assets measured at fair value on a recurring basis:

Assets held in the non-qualified deferred compensation program⁽¹⁾
$ 7,342 $ 5,576 $ 1,766 $ -
Foreign currency derivatives⁽²⁾
355 - 355 -
Total
$ 7,697 $ 5,576 $ 2,121 $ -

Based on

Quoted

prices

Other

in active

observable

Unobservable

Fair Value at

markets

inputs

inputs

September 30, 2018

(Level 1)

(Level 2)

(Level 3)

Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified deferred compensation program⁽¹⁾
$ 7,342 $ 5,576 $ 1,766 $ -
Foreign currency derivatives⁽²⁾
207 - 207 -
Total
$ 7,549 $ 5,576 $ 1,973 $ -
~~(1)~~(1) The market value of the assets held in the trust for the non-qualified deferred compensation program is included as an asset and as a liability as the trust’s assets are both assets of the Company and also a liability as they are available to general creditors in certain circumstances.

~~(2)~~(2) Foreign currency derivatives in the form of forward contracts are included in prepaid and other assets or accrued expenses in the consolidated balance sheets. Unrealized gains and losses on derivatives designated as cash flow hedges are recorded in other comprehensive income (loss). Realized gains and losses on derivatives designated as cash flow hedges and gains and losses on derivatives not designated as hedges are recorded in other income.

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Valuation Techniques:

The following describes valuation techniques used to appropriately value our assets held in the non-qualified deferred compensation plan and derivatives.

Assets held in the non-qualified deferred compensation plan

Assets valued using Level 1 and Level 2 inputs in the table above represent assets from our non-qualified deferred compensation program. The funds in the non-qualified deferred compensation program are valued based on the number of shares in the funds using a price per share traded in an active market.

Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an investment exceeds its fair value, among other factors, we evaluate general market conditions, the duration and extent to which the fair value is less than cost, and whether or not we expect to recover the security's entire amortized cost. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.

Derivatives

We primarily use forward contracts, with maturities generally less than four months, designated as cash flow hedges, to protect against the foreign currency exchange rate risks inherent in our forecasted transactions related to purchase commitments and sales, denominated in various currencies. We also use derivatives not designated as hedging instruments to hedge foreign currency balance sheet exposures. These derivatives are used to offset currency changes in the fair value of the hedged assets and liabilities. Fair values for all of our derivative financial instruments are valued by adjusting the market spot rate by forward points, based on the date of the contract. The spot rates and forward points used are an average rate from an actively traded market. At March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, all of our forward contracts are valued using Level 2 measurements.

7.6. Financial Instruments and Investments in Securities:

At March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, we classified investments in debt securities and time deposits as held-to-maturity securities.

Our long-term and short-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments are recorded as interest income.

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Investments in held-to-maturity securities, recorded at amortized cost, were as follows:

	March 31, 2018									March 31, 2019
			Gross		Gross							Gross		Gross
			Unrealized		Unrealized			Estimated				Unrealized		Unrealized		Estimated
	Cost		Gains		Losses			Fair Value		Cost		Gains		Losses		Fair Value
Short-term investments:
Commercial Paper	$	10,597	$	-	$	(1	)	$	10,596
Time deposits		269,190		203		-			269,393		434,754		184		-		434,938
	$	279,787	$	203	$	(1	)	$	279,989

September 30, 2018

Gross

Gross

Unrealized

Unrealized

Estimated

Cost

Gains

Losses

Fair Value

Short-term investments:

Commercial paper
$ 14,899 $ 4 $ - $ 14,903
Time deposits
341,916 352 - 342,268
$ 356,815 $ 356 $ - $ 357,171

June 30, 2019

Gross

Gross

Unrealized

Unrealized

Estimated

Cost

Gains

Losses

Fair Value

Short-term investments:

Time deposits
482,821 347 - 483,168

The amortized cost and estimated fair value of held-to-maturity investments at ~~September~~June 30, ~~2018,~~ 2019, by contractual maturity, are shown below. The estimated fair value of these investments are based on valuation inputs that include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, ~~two-sided~~two-sided markets, benchmark securities, bids, offers, and reference data, which are Level 2 inputs in the fair value hierarchy. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

Held-to-Maturity

Amortized

Estimated

Cost

Fair Value

Due in one year or less
482,821 483,168

Held-to-Maturity

Amortized

Estimated

Cost

Fair Value

Due in one year or less
$ 356,815 $ 357,171
Due after one year through five years
- -
Total
$ 356,815 $ 357,171
7. Inventories:

March 31, 2019

June 30, 2019

Finished goods
$ 102,373 $ 108,743
Work in process
142,475 142,349
Raw materials
386,840 415,156
Total Inventories, net
$ 631,688 $ 666,248

8. ~~Inventories:~~

March 31, 2018

September 30, 2018

Finished goods
$ 93,467 $ 85,169
Work in process
133,556 142,837
Raw materials
289,754 327,755
Total Inventories, net
$ 516,777 $ 555,761

9. Commitments and Contingencies:

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 non-U.S., state or local laws, for clean-up and response costs associated with certain sites at which remediation is required with respect to prior contamination. Because CERCLA or such state statutes authorize joint and several liability, the EPA or non-U.S., state or local regulatory authorities could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and other PRPs.

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To resolve our liability at 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. 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.

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On June 3, 2010, AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford, Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New Bedford with respect to the satisfaction of AVX’s federal law requirements. The Massachusetts Department of Environmental Protection has jurisdiction over the balance of the environmental remediation at the Site. AVX has submitted its proposed remedy, but until the state has approved such proposal, AVX cannot determine if additional groundwater and soil remediation will be required, if substantial material will have to be disposed of offsite, or if additional remediation techniques will be required, any of which could result in a more extensive and costly plan of remediation. Further, the Site and the remediation may be subject to additional scrutiny under other statutory procedures which could also add to the cost of remediation. During the year ended March 31, 2019 we increased our estimated accrual for work to be done at the Site by $8,312 pursuant to discussions with the Massachusetts Department of Environmental Protection and our environmental engineers. We have a remaining accrual of ~~$14,020~~$22,043 at ~~September~~June 30, ~~2018,~~ 2019, representing our current estimate of the potential liability related to the remaining performance of environmental remediation actions at the Site and neighboring properties using certain assumptions regarding the plan of remediation. Until all parties agree and remediation is complete, we cannot be certain there will be no additional cost relating to the Site.

We had total reserves of approximately ~~$18,618~~$26,371 and ~~$18,729~~$26,419 at March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, respectively, related to various environmental matters and sites, including those discussed above. These reserves are classified in the Consolidated Balance Sheets as ~~$3,329~~$5,749 and ~~$6,040~~$5,597 in accrued expenses at March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, respectively, and ~~$15,289~~$20,622 and ~~$12,689~~$20,822 in other non-current liabilities at March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, respectively. The amounts recorded for identified environmental liabilities are based on estimates. Periodically, we review amounts recorded and adjust them to reflect additional legal and technical information that becomes available. Uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could differ significantly from our current estimates.

On April 19, 2016, the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order naming AVX Corporation, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at one time the site of operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. ~~This Director’s Order follows a draft order issued on November 4, 2015.~~ AVX has taken the position that any liability of Aerovox Canada for such site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek to enforce such Canadian order against AVX, and whether, in the event it does so, AVX will have any liability under applicable law. AVX intends to contest any such course of action that may be taken by the MoE.

In connection with the same location, Union Gas Limited and Coca-Cola Refreshments Canada Company filed suits in the Superior Court of Justice for Ontario, Canada, against AVX Corporation, Aerovox Corp. and Cooper Industries, LLC seeking to recover the costs of remediation of the site and for damages associated with alleged contamination of the site. Those suits were filed on April 18, 2018, but not served on AVX until October 11, 2018, and are in their initial stages. AVX is considering its legal options but intends to vigorously defend these matters.

We also operate, or did at one time, on other sites that may have potential future environmental issues as a result of activities at sites during AVX’s long history of manufacturing operations or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites, 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 or adjust our reserves for our projected share of these costs. A separate account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and do not reflect any possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing at multiple party sites or indemnification of our liability by a third party.

We are not involved in any pending or threatened environmental proceedings that would require curtailment of our operations. We continually expend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in compliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily have knowledge of all past occurrences on sites that we currently occupy. New environmental regulations may be enacted and we cannot determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future.

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On April 25, 2013, AVX was named as a defendant in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v. AVX Corporation. This case alleged that certain AVX products infringe on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first phase of a segmented trial and a mixed verdict in the second phase of a segmented trial, and found damages to Greatbatch in the amount of ~~$ 37,500,~~$37,500, which was recorded in fiscal 2016. That verdict was later vacated by the court on March 30, 2018. ~~The~~In fiscal 2018, we recorded a favorable accrual adjustment of $1,500 related to this patent infringement case. In a new trial, the amount of damages ~~will~~(excluding interest) was determined by a jury to be $22,100 on January 15, 2019 resulting in a favorable accrual adjustment of $13,900 for the year ended in March 31, 2019. During the year ended March 31, 2019 the company made a payment of $22,100 to an escrow account which is classified within “Other assets”. However, the matter is still subject to ~~further legal~~various post-trial proceedings ~~including~~and possible appeal which could result in a ~~potential trial on damages, which we expect~~material impact to ~~occur~~the accrual for this case in ~~fiscal 2019. AVX is continuing to litigate~~ the ~~case.~~future.
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On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent infringement case filed in the United States District Court of the Southern District of California captionedPresidio Components, Inc. v. American Technical Ceramics ~~Corp.~~ Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016, the jury returned a verdict in favor of the plaintiff and found damages to Presidio. On August 17, 2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction whereby ATC was allowed to continue to sell the disputed product until March 17, 2017 to anyone who was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent injunction were subject to court mandated intellectual property damages for each product sold. In December 2017, a panel of the Federal Circuit vacated the damage award to Presidio, vacated the injunction, and remanded the case for further proceedings to determine damages limited to “reasonable royalties” and to reconsider the requested injunction in light of its opinion and any additional facts. In June 2018, the District Court set the amount of royalties and re-issued the injunction. An appeal has been filed from both decisions.

As of ~~September~~June 30, ~~2018,~~ 2019, we had total reserves of ~~$73,392~~$59,752 plus accrued interest in accrued expenses with respect to the two intellectual property cases discussed above. The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to reflect additional information that becomes available. Accordingly, these costs could differ significantly from our current estimates.

During calendar year 2014, AVX was named as a co-defendant in a series of cases filed in the United States and in the Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States, state and Canadian antitrust laws ~~and~~ asserting that AVX and numerous other companies were participants in alleged price-fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on October 2, 2014. ~~However, some~~Some plaintiffs have broken off from the United States class action and filed actions on their own, although AVX is not named in all of these independent actions. The cases in Canada have not been consolidated. These cases are still in progress. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot predict the outcome of these other disputes and proceedings, we believe, based upon a review with legal counsel, that none of these other disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss), or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that may arise and their potential impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

~~10.~~9. Comprehensive Income (Loss):

Comprehensive income (loss) represents changes in equity during a period except those resulting from investments by and distributions to shareholders. The specific components include net income, pension liability and other post-retirement benefit adjustments, deferred gains and losses resulting from foreign currency translation adjustments and unrealized gains and losses on qualified foreign currency cash flow hedges.

Other comprehensive income (loss) includes the following components:

Three Months Ended

September 30,

2017

2018

Pre-tax

Net of Tax

Pre-tax

Net of Tax

Foreign currency translation adjustment
$ 12,385 $ 12,385 $ 1,310 $ 1,310
Foreign currency cash flow hedges adjustment
195 267 171 126
Pension liability adjustment
91 68 272 216
Other comprehensive income (loss)
$ 12,671 $ 12,720 $ 1,753 $ 1,652

Six Months Ended

September 30,

2017

2018

Pre-tax

Net of Tax

Pre-tax

Net of Tax

Foreign currency translation adjustment
$ 33,447 $ 33,447 $ (40,431 ) $ (40,431 )
Foreign currency cash flow hedges adjustment
(524 ) (421 ) 248 189
Pension liability adjustment
(150 ) (113 ) 3,579 2,846
Other comprehensive income (loss)
$ 32,773 $ 32,913 $ (36,604 ) $ (37,396 )

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Three Months Ended

June 30,

2018

2019

Pre-tax

Net of Tax

Pre-tax

Net of Tax

Foreign currency translation adjustment
$ (41,741 ) $ (41,741 ) $ 6,438 $ 6,438
Foreign currency cash flow hedges adjustment 77 63 (213 ) (187 )
Pension liability adjustment 3,307 2,630 1,058 872
Other comprehensive income (loss)
$ (38,357 ) $ (39,048 ) $ 7,283 $ 7,123

Amounts reclassified out of accumulated other comprehensive income (loss) into net income ~~(loss)~~ include those that pertain to the Company’s pension and postretirement benefit plans and realized gains and losses on derivative instruments designated as cash flow hedges. Please see Note 1211 for additional information related to the amortization of prior service cost and the recognized actuarial losses, which amounts are reclassified from accumulated other comprehensive income (loss) into net income ~~(loss)~~ and are included in selling, general and administrative expenses in the statement of operations during the three ~~and six~~ month periods ended ~~September~~June 30, ~~2017~~ 2018 and ~~2018.~~2019. Please see Note 1312 for additional information related to realized gains and losses on derivative instruments reclassified from accumulated other comprehensive income (loss) into net income ~~(loss)~~ during the three ~~and six~~ month periods ended ~~September~~June 30, ~~2018.~~2018 and 2019.

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~~11.~~10. Segment and Geographic Information:

Our operating segments are based on the types of products from which we generate revenues. We are organized into a product line organization with four product groups and two reportable segments. Our four product groups are: Ceramic Components; Tantalum Components; Advanced Components; and Interconnect, Sensing and Control Devices (formerly AVX Interconnect). Historically, KED Resale reported as its own product group, but it has now been combined with Advanced Components. The reportable segments are: Electronic Components and Interconnect, Sensing and Control Devices. The product groups of Ceramic, Advanced, and Tantalum Components have been aggregated into the Electronic Components reportable segment in accordance with the SEC’s aggregation criteria and quantitative thresholds. The aggregation criteria consist of similar economic characteristics, products and services, production processes, customer classes, and distribution channels. The Electronic Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick and thin film components, surface mount and leaded tantalum capacitors, polymer tantalum capacitors, surface mount and leaded film capacitors, ceramic and film power capacitors, super capacitors, EMI filters (bolt in and surface mount), thick and thin film packages of multiple passive integrated components, varistors, thermistors, inductors, resistive products, and passive and active electronic antennas and antenna systems manufactured by us or purchased from other manufacturers for resale. The Interconnect, Sensing and Control Devices segment consists primarily of automotive sensing and control devices and automotive, telecom, and memory connectors manufactured by or for AVX. Sales and operating results from these reportable segments are shown in the tables below. In addition, we have a corporate administration group consisting of finance, legal, environmental, health & safety, and administrative activities.

We evaluate performance of our segments based upon sales and operating profit. There are no intersegment revenues. We allocate 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.

The tables below present information about ~~reported~~reportable segments:

	Three Months Ended				Six Months Ended				Three Months Ended
	September 30,				September 30,				June 30,
Sales Revenue:	2017		2018		2017		2018		2018		2019
Ceramic Components	$	57,319	$	102,678	$	108,375	$	181,514	$	78,836	$	106,623
Tantalum Components		93,987		105,702		182,940		206,734		101,032		62,724
Advanced Components		168,810		123,849		330,471		263,193		139,344		108,133
Total Electronic Components		320,116		332,229		621,786		651,441		319,212		277,480
Interconnect, Sensing and Control Devices		32,577		124,100		62,261		259,004		134,904		124,289
Total Revenue	$	352,693	$	456,328	$	684,047	$	910,444	$	454,116	$	401,769

Three Months Ended

June 30,

2018

2019

Operating profit (loss):

Electronic Components
$ 86,410 $ 78,525
Interconnect, Sensing and Control Devices
(2,750 ) 676
Corporate activities
(15,643 ) (20,488 )
Total
$ 68,017 $ 58,713

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Three Months Ended

Six Months Ended

September 30,

September 30,

2017

2018

2017

2018

Operating profit:

Electronic Components
$ 56,076 $ 104,135 $ 110,795 $ 190,545
Interconnect, Sensing and Control Devices
3,366 2,283 6,644 (467 )
Corporate activities
(14,656 ) (20,781 ) (30,222 ) (36,423 )
Total
$ 44,786 $ 85,637 $ 87,217 $ 153,655

As of

As of
As of As of

March 31, 2018

September 30, 2018

March 31, 2019

June 30, 2019

Assets:

Electronic Components
$ 632,014 $ 678,940 $ 659,933 $ 745,702
Interconnect, Sensing and Control Devices
241,959 251,738 265,682 282,173
Cash, A/R, and investments in securities
1,111,716 1,107,775 1,070,701 1,034,209
Goodwill - Electronic Components
278,247 290,870 271,374 271,374
Goodwill - Interconnect, Sensing and Control Devices
38,051 37,056 45,301 45,706
Corporate activities
370,779 374,276 500,287 469,411
Total
$ 2,672,766 $ 2,740,655 $ 2,813,278 $ 2,848,575

The following geographic data is based upon net sales generated by operations located within particular geographic areas. Substantially all of the sales in the Americas region were generated in the United States.

Three Months Ended

Six Months Ended

Three Months Ended

September 30,

September 30,

June 30,

2017

2018

2017

2018

2018

2019

Net sales:

Americas
$ 102,838 $ 126,004 $ 202,779 $ 240,571 $ 114,567 $ 115,224
Europe
103,045 184,004 195,565 382,408 198,404 169,198
Asia
146,810 146,320 285,703 287,465 141,145 117,347
Total
$ 352,693 $ 456,328 $ 684,047 $ 910,444 $ 454,116 $ 401,769

~~12.~~11. Pension Plans:

Net periodic pension cost for our defined benefit plans consisted of the following for the three ~~and six~~ month periods ended ~~September~~June 30, ~~2017~~ 2018 and ~~2018:~~2019:

U.S. Plans

International Plans

Three Months Ended

Three Months Ended

September 30,

September 30,

2017

2018

2017

2018

Service cost
$ 33 $ - $ 231 $ 212
Interest cost
352 327 1,136 1,024
Expected return on plan assets
(450 ) (393 ) (1,450 ) (1,441 )
Recognized actuarial loss
286 221 329 252
Net periodic pension cost
$ 221 $ 155 $ 246 $ 47

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	U.S. Plans						International Plans						U.S. Plans						International Plans
	Six Months Ended						Six Months Ended						Three Months Ended						Three Months Ended
	September 30,						September 30,						June 30,						June 30,
	2017			2018			2017			2018			2018			2019			2018			2019
Service cost	$	66		$	-		$	459		$	427		$	-		$	-		$	215		$	206
Interest cost		704			655			2,244			2,070			327			303			1,045			880
Expected return on plan assets		(900	)		(786	)		(2,867	)		(2,912	)		(393	)		(415	)		(1,471	)		(1,316	)
Recognized actuarial loss		571			442			650			508			221			279			257			194
Net periodic pension cost	$	441		$	311		$	486		$	93		$	155		$	167		$	46		$	(36	)

Based on current actuarial computations, during the ~~six~~three months ended ~~September~~June 30, ~~2018,~~ 2019, we made contributions of ~~$3,436~~$646 to the international plans. We expect to make additional contributions of approximately ~~$3,270~~$451 to the international plans over the remainder of fiscal ~~2019.~~2020. We made ~~a contribution of $2,289~~no contributions to the U.S. plans during the ~~six~~three months ended ~~September~~June 30, ~~2018.~~ 2019. We ~~do not~~ expect to make no additional contributions to the U.S. plans the remainder of fiscal ~~2019.~~2020.

~~13.~~12. Derivative Financial Instruments:

We are exposed to foreign currency exchange rate fluctuations in the normal course of business. We use derivative instruments (forward contracts) to hedge certain foreign currency exposures as part of our risk management strategy. The objective is to offset gains and losses resulting from these exposures with gains and losses on the forward contracts used to hedge them, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. We do not enter into any trading or speculative positions with regard to derivative instruments.

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We primarily use forward contracts, with maturities less than ~~four~~4 months, to protect against the foreign currency exchange rate risks inherent in our forecasted transactions related to purchase commitments and sales denominated in various currencies. These derivative instruments are designated and qualify as cash flow hedges.

The effectiveness of the cash flow hedges is determined by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the hedged transaction, both of which are based on forward rates. The effective portion of the gain or loss on these cash flow hedges is initially recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Once the hedged transaction is recognized, the gain or loss is recognized in our statement of operations. At March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, respectively, the following forward contracts were entered into to hedge against the volatility of foreign currency exchange rates for certain forecasted sales and purchases:

March 31, 2018

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 212
Accrued expenses
$ 377

March 31, 2019

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 570
Accrued expenses
$ 318

September 30, 2018

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 222
Accrued expenses
$ 139
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June 30, 2019

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 440
Accrued expenses
$ 401

For these derivatives designated as cash flow hedging instruments, during the three ~~and six~~ month ~~periods~~period ended ~~September~~June 30, ~~2018, a~~ 2019, net pre-tax ~~gain~~gains of ~~$715 and a net pre-tax loss of $118~~$512 were recognized in other comprehensive income (loss). In addition, during the three ~~and six~~ month ~~periods~~period ended ~~September~~June 30, ~~2018,~~ 2019, net pre-tax ~~gains~~losses of ~~$545 and $2,590, respectively,~~$392 were reclassified from accumulated other comprehensive income (loss) into cost of sales (for hedging purchases), and net ~~pretax~~pre-tax gains of ~~$32 and $1,403~~$694 were reclassified from accumulated other comprehensive income (loss) into sales (for hedging sales) in the accompanying statement of operations.

Derivatives not designated as cash flow hedging instruments consist primarily of forwards used to hedge foreign currency balance sheet exposures. These hedging instruments are used to offset foreign currency changes in the fair values of the underlying assets and liabilities. The gains and losses on these foreign currency forward contracts are recognized in other income (loss) in the same period as the ~~re-measurement~~remeasurement gains and losses of the related foreign currency denominated assets and liabilities and thus naturally offset these gains and losses. At March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, we had the following forward contracts that were entered into to hedge against these exposures.

March 31, 2019

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 283
Accrued expenses
$ 270

March 31, 2018

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 45
Accrued expenses
$ 137
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September 30, 2018

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 133
Accrued expenses
$ 68

June 30, 2019

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance

Balance

Sheet

Fair

Sheet

Fair

Caption

Value

Caption

Value

Foreign exchange contracts
Prepaid and other
$ 161
Accrued expenses
$ 218

For these derivatives not designated as cash flow hedging instruments during the three month ~~and six month periods~~period ended ~~September~~June 30, ~~2018, gains~~2019, losses of ~~$66~~$57 on hedging contracts were recognized in other income (loss), along with the approximately ~~$1,245~~$227 in exchange ~~gains~~losses that were recognized in other income (loss) in the accompanying statement of operations.

At March 31, ~~2018~~ 2019 and ~~September~~June 30, ~~2018,~~ 2019, we had outstanding foreign exchange contracts with notional amounts totaling ~~$156,238~~$216,555 and ~~$175,751,~~$242,587, respectively, denominated primarily in Euros, Czech Korunas, British Pounds, and Japanese Yen.

~~14.~~13. Subsequent Events:

On ~~October 17, 2018,~~ July 24, 2019, the Board of Directors of the Company declared a $0.115 dividend per share of common stock with respect to the quarter ended ~~September~~June 30, ~~2018.~~ 2019. The dividend will be paid to stockholders of record on ~~November 2, 2018~~ August 1, 2019 and will be disbursed on ~~November 16, 2018.~~August 15, 2019.

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, trends and future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. The forward-looking information may include, among other information, statements concerning our outlook for fiscal year ~~2019,~~2020, overall volume and pricing trends, cost reduction and acquisition strategies and their anticipated results, and 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. Our expectations and assumptions are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements. Because these forward-looking statements involve risks and uncertainties, actual results could differ materially from those expressed or implied by the forward-looking statements for a variety of reasons, including without limitation, changes in the global economy or the economy of any locality in which we conduct business; changes in general industry and market conditions or regional growth or declines; loss of business from increased competition; higher raw material costs or raw material shortages; changes in consumer and customer preferences for end products; customer or supplier losses; changes in regulatory conditions; changes import/export regulations and tariffs; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; market acceptance of our new products; possible adverse results of pending or future litigation or infringement claims; our ability to successfully integrate and realize expected synergies from acquired businesses; our ability to protect our intellectual property rights; negative impacts of environmental investigations or other governmental investigations and any associated litigation; tax assessments by governmental authorities and changes in our effective tax rate; dependence on and relationships with customers and suppliers; and other risks and uncertainties discussed in our Annual Report on Form 10-K for fiscal year ended March 31, ~~2018.~~2019. 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 by the Company with the SEC. You should not place undue reliance on any forward-looking statements as a prediction of actual results or developments.

Any forward-looking statements by the Company are intended to speak only as of the date thereof. We do not intend 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, as amended (the "Exchange Act"), 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, as amended, 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 our unaudited Consolidated Financial Statements and Notes thereto contained in this Form 10-Q, 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 investment securities, revenue recognition, inventories, property and equipment, goodwill, intangible assets, 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.

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We have 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 Notes to Consolidated Financial Statements and in “Critical Accounting Policies and Estimates,” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018,~~2019, and in Note 1, “Summary of Significant Accounting ~~Policies,” and in Note 3, "Revenue Recognition"~~Policies” in the Notes to Consolidated Financial Statements in this Form 10-Q. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018.~~2019. There were no significant changes to ~~other~~ critical accounting policies, judgments involved in applying those policies, or the methodology used in determining estimates with respect to those related to investment securities, inventories, goodwill, intangible assets, property and equipment, and contingencies, during the three ~~and six~~ month ~~periods~~period ended ~~September~~June 30, 2018 other than those discussed in Note 1, "Basis of Presentation," and Note 3, "Revenue Recognition," in the Notes to Consolidated Financial Statements in this Form 10-Q related to revenue recognition.2019.

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Business Overview

AVX is a leading worldwide manufacturer, supplier, and reseller of a broad line of electronic components, interconnect, sensing and control devices, and related products. Electronic components and connector, sensing and control products manufactured or resold by AVX are used in many types of end-use products, including those in telecommunications, automotive, transportation, energy harvesting, consumer electronics, military/aerospace, medical, computer, and industrial markets.

We have manufacturing, sales, and distribution facilities located throughout the world, which are divided into three geographic regions: the Americas, Asia, and Europe. AVX is organized into four product groups with two reportable segments: Electronic ~~Components~~Components; and Interconnect, Sensing and Control Devices. The Electronic Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick and thin film components, surface mount and leaded tantalum capacitors, polymer tantalum capacitors, surface mount and leaded film capacitors, ceramic and film power capacitors, super capacitors, EMI filters (bolt in and surface mount), thick and thin film packages of multiple integrated components, varistors, thermistors, inductors, resistive products, and passive and active electronic antennas and antenna systems manufactured by us or purchased from other manufacturers for resale. The Interconnect, Sensing and Control Devices segment consists primarily of automotive sensing and control devices and automotive, telecom, and memory connectors manufactured by, or for, AVX.

Our customers consist of multi-national original equipment manufacturers, or OEMs, independent electronic component distributors, and electronic manufacturing service providers, or 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, marketing, and manufacturing organizations by strategic customer account and globally by region.

Results of Operations - Three Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2018~~2019

Our net income for the three months ended ~~September~~June 30, ~~2018~~2019 was ~~$72.1~~$54.7 million, or ~~$0.43~~$0.32 per share, compared to net income of ~~$34.8~~$56.0 million, or ~~$0.21~~$0.33 per share, for the three months ended ~~September~~June 30, ~~2017.~~2018.

	Three Months Ended				Three Months Ended
	September 30,				June 30,
(in thousands, except per share data)	2017		2018		2018		2019
Net sales	$	352,693	$	456,328	$	454,116	$	401,769
Gross profit		77,273		126,476		108,333		100,645
Operating income		44,786		85,637		68,017		58,713
Net income		34,818		72,069		55,963		54,677
Diluted earnings per share	$	0.21	$	0.43	$	0.33	$	0.32

Net sales in the three month period ended ~~September~~June 30, ~~2018 increased $103.6~~2019 decreased $52.3 million or ~~29.4%~~11.5%, to ~~$456.3~~$401.8 million compared to ~~$352.7~~$454.1 million in the three month period ended ~~September~~June 30, ~~2017. Global~~2018. The decrease in revenue was attributable to lower volumes resulting from weaker global market conditions reflecting a slowdown in the Asian markets resulting from a weaker Chinese economy due to tariffs and other economic issues in addition to reduced automotive manufacturing across all regions. Customers remained ~~healthy,~~cautious with higher than normal inventory levels in the sales channel, particularly at our distribution customers, contributing to ~~strong~~lower overall demand, primarily in the automotive, ~~medical,~~cellular, and consumer markets. The market demand remains strong in the aerospace, defense, and ~~aerospace~~medical markets. ~~Market~~Overall demand for our products is being driven ~~in part~~ by the power of electronics to enhance the user experience in automotive, wearables, smartphones, drones, solid state drives, personal and industrial robots, virtual reality devices, smart home control and security devices enabled through the internet within a broad category called IoT, or Internet of Things. The increase in revenue for the three month period ended September 30, 2018 includes sales of $89.4 million in our Interconnect, Sensing and Control Devices segment that are attributable to our acquisition of the AB Electronic sensing and control (“S&C”) business and $31.8 million in our Electronic Components segment attributable to our acquisition of Ethertronics, Inc., ("AVX Antenna"). The increased sales were partially offset by the loss of Kyocera Resale sales in our Electronic Components segment, due to Kyocera's decision to market and sell certain of its products globally using its own sales force rather than have AVX resell such products in various geographies, which were $1.4 million for the three month period ended September 30, 2018 compared to $85.2 million for the three month period ended September 30, 2017. Sales were unfavorably impacted by approximately ~~$8.8~~$8.7 million as a result of currency movement due to the ~~stronger~~strengthening of the U.S. Dollar as compared to the Japanese Yen and Euro when compared to the same period last year.

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The table below represents product group revenues for the ~~quarters~~three months ended ~~September~~June 30, ~~2017~~2018 and ~~2018.~~2019.

	Three Months Ended				Three Months Ended
(in thousands)	September 30,				June 30,
Sales Revenue	2017		2018		2018		2019
Ceramic Components	$	57,319	$	102,678	$	78,836	$	106,623
Tantalum Components		93,987		105,702		101,032		62,724
Advanced Components		168,810		123,849		139,344		108,133
Total Electronic Components		320,116		332,229		319,212		277,480
Interconnect, Sensing and Control Devices		32,577		124,100		134,904		124,289
Total Revenue	$	352,693	$	456,328	$	454,116	$	401,769

Electronic Components sales ~~increased $12.1~~decreased $41.7 million, or ~~3.8%~~13.1% to ~~$332.2~~$277.5 million in the three month period ended ~~September~~June 30, ~~2018~~2019 compared to sales of ~~$320.1~~$319.2 million during the same period last year driven by ~~favorable~~unfavorable global macro-economic conditions partially offset by increased electronic content in automobiles, ~~increased~~ global defense spending, and technological advances across a broad range of IoT ~~products~~products. The increase in Ceramic Components is primarily due to higher demand and ~~smart home devices driving increased~~a more favorable pricing environment during the quarter ended June 30, 2019 compared to the same quarter last year. Tantalum Components have declined during the quarter ended June 30, 2019 compared to the same period last year as a result of lower demand, primarily in Asia, resulting from the decline in the Chinese economy in addition to higher inventory levels in the sales channel in all ofregions, particularly with our ~~Electronic~~distribution customers. The decline in Advanced Components ~~groups. The sales increases in our Advanced Component group were offset by lower Kyocera Resale product sales due~~during the quarter ended June 30, 2019 compared to the ~~previously announced decision~~same quarter last year has been impacted by ~~Kyocera to market and sell certain~~approximately $17 million of ~~its products globally using Kyocera’s salesforce as discussed above. Ceramic Components~~ sales for ~~the three months ended September 30, 2018 were favorably impacted~~Kyocera product which is no longer sold by ~~sales of $31.8 million related~~AVX in addition to ~~our acquisition of AVX Antenna in February 2018.~~a slower mobile phone market.

Interconnect, Sensing and Control Devices product sales ~~increased $91.5~~decreased $10.6 million to ~~$124.1~~$124.3 million in the three month period ended ~~September~~June 30, ~~2018~~2019 compared to ~~$32.6~~$134.9 million during the same period last year. This ~~increase~~decrease is primarily attributable to ~~increased sales~~a decrease of ~~$89.4 million resulting from the addition of the S&C business, in addition to increased demand in the European~~ automotive ~~markets for our interconnect, sensing and control products.~~manufacturing globally.

Geographically, compared to the same period last year, sales increased in Americas and Europe, primarily reflecting higher demand resulting from steadily improving global market conditions in the electronics market. Sales decreased in Asia primarily from the reduction of Kyocera Resale product sales partially offset by higher demand in the electronics market. With the addition of S&C, whose sales are concentrated in Europe, overallOverall sales percentages decreased in the Asian and ~~American~~European regions as a result of the weaker Chinese economy and weaker automotive markets while sales increased in our ~~European~~American region compared to the same three-month period last year. Sales in the Asian, American, and European markets represented ~~32%~~29%, ~~28%~~29% and ~~40%~~42% of total sales, respectively, for the three month period ended ~~September~~June 30, ~~2018.~~2019. This compares to ~~42%~~31%, ~~29%~~25% and ~~29%~~44% of total sales for the Asian, American, and European regions in the same period last year, respectively.

Our sales to independent electronic distributor customers represented ~~43%~~38% of total sales for the three month period ended ~~September~~June 30, ~~2018,~~2019, compared to ~~49%~~40% for the three month period ended ~~September~~June 30, ~~2017. Our S&C sales are primarily direct to OEM customers, which led to the decrease in our distributor sales percentage when compared to the same period last year.~~2018. Overall, distributor sales activity ~~increased~~decreased when compared to the same period last year as inventory remains higher than normal within the distribution channel resulting from the slower global economy and shortened lead times for certain products making distributors ~~increased order activity during the past several quarters in response~~reluctant to ~~improved end-market demand and extended product delivery lead times.~~take on additional inventory. Our sales to distributor customers involve specific ship-and-debit and stock rotation programs for which sales allowances are recorded as reductions in sales. Such allowance charges were ~~$7.1~~$5.3 million, or ~~3.7%~~3.5% of gross sales to distributor customers for the three month period ended ~~September~~June 30, ~~2018,~~2019, and ~~$7.5~~$6.4 million, or ~~4.4%~~3.5% of gross sales to distributor customers, for the three month period ended ~~September~~June 30, ~~2017.~~2018. Applications under such programs for the three month periods ended ~~September~~June 30, ~~2017~~2019 and 2018 were approximately ~~$7.3~~$5.1 million and ~~$6.7~~$6.2 million, respectively. ~~The decrease in both percentage and dollars compared to the prior year is reflective~~

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Gross profit in the three month period ended ~~September~~June 30, ~~2018~~2019 was ~~$126.5~~$100.6 million, compared to a gross profit of ~~$77.3~~$108.3 million in the three month period ended ~~September~~June 30, ~~2017.~~2018. This overall decrease in dollars is primarily attributable to lower sales partially offset by strong margins. Gross profit as a percentage of sales for the three month period ended ~~September~~June 30, ~~2018~~2019 was ~~27.7%~~25.1% compared to ~~21.9%~~23.9% for the three month period ended ~~September~~June 30, ~~2017.~~2018. This increase in gross profit ~~in dollars and~~ as a percentage of sales is reflective of our continued focus on the sale of value-added components with better margin opportunities, increased operational efficiencies, and an improved pricing environment in the global ~~marketplace.~~marketplace when compared to the same quarter last year. Costs due to currency movement were favorably impacted by ~~$5.8~~$8.0 million when compared to the same period last year.

Selling, general and administrative expenses in the three month period ended ~~September~~June 30, ~~2018~~2019 were ~~$40.8~~$41.9 million, or ~~8.9%~~10.4% of net sales, compared to ~~$32.5~~$40.3 million, or ~~9.2%~~8.9% of net sales, in the three month period ended ~~September~~June 30, ~~2017.~~2018. When compared to the same quarter last year, the overall increase in these expenses is primarily due to higher legal fees partially offset by lower selling expenses ~~resulting from~~as a result of the ~~increase in sales as well as the effects of amortization for intangible assets related to the S&C and AVX Antenna acquisitions.~~lower sales.

Income from operations was ~~$85.6~~$58.7 million in the three month period ended ~~September~~June 30, ~~2018~~2019 compared to ~~$44.8~~$68.0 million in the three month period ended ~~September~~June 30, ~~2017.~~2018. This ~~increase~~decrease was a result of the factors described above.

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Other income, net, was ~~$3.3~~$4.5 million for the three month period ended ~~September~~June 30, ~~2018~~2019 compared to ~~$4.3~~$2.8 million for the same three month period last ~~year.~~year reflecting higher interest income.

The provision for income tax for the three month period ended ~~September~~June 30, ~~2018~~2019 was ~~$16.9~~$8.5 million compared to ~~$14.2~~$14.8 million for the three month period ended ~~September~~June 30, 2017. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted in the U.S. Among numerous other provisions, the Act reduced the statutory U.S. corporation income tax rate from 35% to 21%, effective January 1, 2018. Our effective tax rate for the quarter ended ~~September~~June 30, ~~2018~~2019 was approximately ~~20.9%, reflective of~~13%. The decrease in the ~~lower income~~effective tax ~~rates arising from~~rate is due to a discrete tax benefits occurring during the ~~Act. The Company will continue~~quarter. This benefit is principally due to ~~assess all relevant aspects of~~an increase in foreign tax credits on foreign withholding obligations. Excluding these adjustments, the ~~Act, including additional guidance under~~effective tax rate would be approximately 21% for the ~~Act, among other things which may impact our income tax provision.~~quarter ended June 30, 2019.

As a result of the factors discussed above, net income for the three month period ended ~~September~~June 30, ~~2018~~2019 was ~~$72.1~~$54.7 million compared to net income of ~~$34.8~~$56.0 million for the same three month period last year.

~~Results of Operations – Six Months Ended September 30, 2017 and 2018~~

~~Our net income for the six months ended September 30, 2018 was $128.0 million, or $0.76 per share, compared to $66.3 million, or $0.39 per share, for the six months ended September 30, 2017.~~

Six Months Ended

September 30,

(in thousands, except per share data)

2017

2018

Net sales
$ 684,047 $ 910,444
Gross profit
151,119 234,809
Operating income
87,217 153,655
Net income
66,302 128,032
Diluted earnings per share
$ 0.39 $ 0.76
Net sales in the six month period ended September 30, 2018 increased $226.4 million, or 33.1%, to $910.4 million compared to $684.0 million in the six month period ended September 30, 2017. The increase in revenue was attributable to higher volumes across most of our markets resulting from steadily improving global market conditions reflecting higher overall demand, primarily in the automotive, medical, and consumer markets driven by the power of electronics to enhance the user experience such as in automotive, wearables, smartphones, drones, solid state drives, personal and industrial robots, virtual reality devices, smart home control, and security devices enabled through the IoT. The increase in revenue for the six month period ended September 30, 2018 includes sales of $187.1 million in our Interconnect, Sensing and Control Devices segment that are attributable to our acquisition of S&C and $63.7 million in our Electronic Components segment attributable to our acquisition of AVX Antenna. The increased sales were partially offset by the loss of Kyocera Resale sales in our Electronic Components segment, due to Kyocera's decision to market and sell certain of its products globally using its own sales force rather than have AVX resell such products in various geographies, which were $18.6 million for the six month period ended September 30, 2018 compared to $161.9 million for the six month period ended September 30, 2017.
~~The table below represents product group revenues for the six months ended September 30, 2017 and 2018.~~

Six Months Ended

(in thousands)

September 30,

Sales Revenue

2017

2018

Ceramic Components
$ 108,375 $ 181,514
Tantalum Components
182,940 206,734
Advanced Components
330,471 263,193
Total Electronic Components
621,786 651,441
Interconnect, Sensing and Control Devices
62,261 259,004
Total Revenue
$ 684,047 $ 910,444
Electronic Component sales increased $29.7 million, or 4.8% to $651.4 million in the six month period ended September 30, 2018 compared to sales of $621.8 million during the same six month period last year as a result of steadily improving global market conditions driven by increased electronic content in automobiles, increased global defense spending, and technological advances across a broad range of IoT products and smart home devices driving the increased sales in all of our Electronic Components groups. The sales increases in our Advanced Component group were offset by lower Kyocera Resale product sales due to the previously announced decision by Kyocera to market and sell certain of its products globally using Kyocera’s salesforce as discussed above.
Total Interconnect, Sensing and Control Devices increased $196.7 million, or 316.0%, to $259.0 million in the six month period ended September 30, 2018 compared to $62.3 million during the same period last year. This increase is primarily attributable to increased sales of $187.1 million resulting from the addition of the S&C business, in addition to increased demand in the European automotive markets for our interconnect, sensing and control products.
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Geographically, compared to the same period last year, sales increased in all regions, primarily reflecting higher demand resulting from steadily improving global market conditions in the electronics market. With the addition of S&C, whose sales are concentrated in Europe, overall sales percentages decreased in the Asian and American regions while sales increased in our European region compared to the same six-month period last year. Sales in the Asian, American, and European markets represented 32%, 26% and 42% of total sales, respectively, for the six month period ended September 30, 2018. This compares to 41%, 30% and 29% of total sales for the Asian, American, and European regions in the same period last year, respectively.
Our sales to independent electronic distributor customers represented 41.2% of total sales for the six month period ended September 30, 2018, compared to 48.8% for the six month period ended September 30, 2017. Overall, distributor sales activity increased when compared to the same period last year as distributors increased order activity in response to good end market demand during the period. Our sales to distributor customers involve specific ship-and-debit and stock rotation programs for which sales allowances are recorded as reductions in sales. Such allowance charges were $13.5 million, or 3.6% of gross sales to distributor customers, for the six month period ended September 30, 2018, and $14.3 million, or 4.3% of gross sales to distributor customers, for the six month period ended September 30, 2017. Applications under such programs for the six month period ended September 30, 2017 and 2018 were approximately $14.0 million and $12.9 million, respectively.
Gross profit in the six month period ended September 30, 2018 was 25.8% of sales, or $234.8 million, compared to a gross profit of 22.1% of sales, or $151.1 million, in the six month period ended September 30, 2017. This increase in gross profit in dollars and as a percentage of sales is reflective of our continued focus on the sale of value added components with better margin opportunities, increased operational efficiencies, and an improved pricing environment in the global marketplace. Costs due to currency movement were favorably impacted by $1.4 million when compared to the same period last year.
Selling, general and administrative expenses in the six month period ended September 30, 2018 were $81.2 million, or 8.9% of net sales, compared to $63.9 million, or 9.3% of net sales, in the six month period ended September 30, 2017. The overall increase in these expenses is primarily due to higher selling expenses resulting from the increase in sales when compared to the same period last year.
Income from operations was $153.7 million in the six month period ended September 30, 2018 compared to $87.2 million in the six month period ended September 30, 2017. This increase was a result of the factors described above.
Other income, net was $6.0 million for the six month period ended September 30, 2018 compared to $6.2 million for the same six month period last year. This slight decrease was primarily due to higher foreign exchange losses resulting from currency fluctuations.
The provision for income tax for the six month period ended September 30, 2018 was $31.7 million compared to $27.1 million for the six month period ended September 30, 2017. Our effective tax rate for the six month period ended September 30, 2018 was 20.9% compared to 29.0% for the six months ended September 30, 2017. The reduction in effective tax rate is primarily due to the enactment of the Act on December 22, 2017, as discussed above. The Company will continue to assess all relevant aspects of the Act, including additional guidance under the Act, among other things which may impact our income tax provision.
~~As a result of the factors discussed above, net income for the six month period ended September 30, 2018 was $128.0 million compared to $66.3 million for the same six month period last year.~~
Outlook

Near-Term:

With ever changing and unpredictable global geopolitical and economic conditions, it is difficult to quantify expectations for the remainder of fiscal ~~2019.~~2020. Near-term results for us will depend on the impact of the overall global geopolitical and economic conditions and their impact on telecommunications, information technology hardware, automotive, consumer electronics, and other electronic markets. Looking ahead, visibility is low and forecasting is a challenge in this uncertain and volatile market. We expect to see ~~lower than~~ normal sales price pressure in the markets we serve due to the weaker economic picture, partially offset by increasing demand ~~combined~~for certain electronic components with lower product availability. In response to anticipated market conditions, we expect to continue to focus on cost management and ~~product line~~manufacturing facilities rationalization to maximize earnings potential. We also continue to focus on process improvements and enhanced production capabilities in conjunction with our focus on the ~~sale~~sales of value-added electronic components to support today’s advanced electronic use products. If current global geopolitical and economic conditions worsen, the overall impact on our customers as well as end-user demand for electronic products could have a significant adverse impact on our near-term results.

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Long-Term:

Although there is uncertainty and unpredictability in the near-term market as a result of the current global geopolitical and economic conditions, we continue to ~~see~~be optimistic about opportunities for long-term growth and profitability improvement due to: (a) a projected increase in the long-term worldwide demand for more sophisticated electronic end use products, ~~based on new IoT applications, the increase of electronic content in cars, smart home devices that are connected to the internet and new consumer wireless devices,~~ which require electronic components and interconnect, sensing and control devices such as the ones we sell, (b) cost reductions and improvements in our production processes, (c) opportunities for growth in our Electronic Component and Interconnect, Sensing and Control Devices product lines due to advances in component design and our production capabilities. We have fostered our financial health and the strength of our balance sheet putting us in a good position to react to changes in the marketplace as they occur. We remain confident that our strategies will enable our continued long-term success.

Liquidity and Capital Resources

Our liquidity needs arise primarily from working capital requirements, dividends, capital expenditures, and acquisitions. Historically, we have satisfied our liquidity requirements through funds from operations, investment income from cash and investments in securities, and cash on hand. As of ~~September~~June 30, ~~2018,~~2019, we had a current ratio of ~~5.5~~6 to 1, ~~$844.7~~$790.3 million of cash, cash equivalents, and investments in securities, ~~$2.3~~$2.4 billion of stockholders’ equity, and no borrowings. On December 22, 2017, the Act was enacted in the U.S. Among numerous other provisions, the Act reduced or eliminated certain corporate tax deductions and provided for a transition from a worldwide to a territorial tax system for resident corporations and related corporate group members. As a result
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Table of ~~the Act we will have greater flexibility to redirect our global cash resources where they are needed.~~
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Net cash provided by operating activities was ~~$138.5~~$32.1 million in the ~~six~~three month period ended ~~September~~June 30, ~~2018~~2019 compared to ~~$128.4~~$97.6 million of cash provided by operating activities in the ~~six~~three month period ended ~~September~~June 30, ~~2017.~~2018.

Purchases of property and equipment were ~~$65.0~~$34.4 million in the ~~six~~three month period ended ~~September~~June 30, ~~2018~~2019 and ~~$38.9~~$38.0 million in the ~~six~~three month period ended ~~September~~June 30, ~~2017.~~2018. Expenditures in the current quarter were primarily made in connection with strategic building expansion and equipment purchase activities in our Fountain Inn, South Carolina facilities and our plants in El Salvador ~~the Czech Republic, Germany~~ and Malaysia. We expect to continue making strategic capital investments in our Electronic Component and Interconnect, Sensing and Control Devices product lines and estimate that we will incur capital expenditures of approximately $100 million in fiscal ~~2019.~~2020. The actual amount of capital expenditures will depend upon the outlook for end-market demand and timing of capital projects.
On April 30, 2018, AVX completed its purchase of Kumatec for $12.9 million in cash, net of cash acquired and debt assumed. Kumatec develops, constructs and manufactures automation equipment and manufactures plastic components.

Historically, our operating funding is internally generated through operations, investment income from cash, cash equivalents, and investments in securities and cash on hand. We have assessed the condition of our financial resources and our current business and believe that, based on our financial condition as of ~~September~~June 30, ~~2018,~~2019, cash on hand and cash expected to be generated from operating activities and investment income from cash, cash equivalents, and investments in securities will be sufficient to satisfy our anticipated financing needs for working capital, capital expenditures, environmental clean-up costs, expenses related to ongoing litigation, pension plan funding, research, development, and engineering expenses, and dividend payments or stock repurchases to be made during the next twelve months. While changes in customer demand have an impact on our future cash requirements, changes in those requirements are mitigated by our ability to adjust manufacturing capabilities to meet increases or decreases in customer demand. We do not anticipate any significant changes in our ability to generate capital or meet our liquidity needs in the foreseeable future.

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 ~~September~~June 30, ~~2018,~~2019, we did not have any significant delivery contracts outstanding.

Commitments and Contingencies

Information related to commitments and contingencies can be found in Note ~~13,~~14, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in ~~our~~the Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018,~~2019, as well as in Note 9,8, “Commitments and Contingencies,” in the Notes to the Consolidated Financial Statements in this Form 10-Q. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018.~~2019.

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~~Table of Contents~~
New Accounting Standards

Information related to new Statements of Financial Accounting Standards and Financial Accounting Standards Board Staff Positions that we have recently adopted or are currently reviewing can be found in Note 1, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements and in “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in ~~our~~the Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018,~~2019, as well as in Note 1, “Summary of Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in this Form 10-Q. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018.~~2019.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our sales are denominated in various foreign currencies in addition to the U.S. Dollar. Certain manufacturing and operating costs denominated in local currencies are incurred in Europe, Asia, Mexico, and Central and South America. ~~Additionally, purchases of resale products from Kyocera may be denominated in Yen.~~ 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. Accordingly, we have hedging commitments to cover a portion of our exchange risk on purchases, operating expenses, and sales. There have been no material net changes in our exposure to foreign currency exchange rates as reflected in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018.~~2019. See Note 1312 of our Notes to Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q for further discussion of derivative financial instruments.

There have been no material net changes in our exposure to foreign currency exchange rates as reflected in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2019.
ITEM 4.
CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our 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 our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance that the controls and procedures will meet their objectives. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As of the end of the period covered in this report, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

In addition, there were no changes in our internal control over financial reporting during the ~~second~~first quarter of fiscal ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II:
OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS

Please refer to Note 9,8, “Commitments and Contingencies,” in our Notes to Consolidated Financial Statements in Part I, Item 1 to this Form 10-Q for a discussion of our involvement in certain environmental and other pending legal proceedings.

ITEM 1A.
RISK FACTORS

Please refer to Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018~~2019 for information regarding factors that could affect our results of operations, financial condition, and liquidity. There have been no material changes to the risk factors affecting the company as reported in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018.~~
2019.

~~ITEM 2.~~
~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~
~~Issuer Purchases of Equity Securities~~
~~The following table shows our purchases of common stock during the quarter.~~
~~Total number of~~
~~Maximum number~~
~~shares purchased~~
~~of shares that may~~
~~Total number~~
~~as part of publicly~~
~~yet be purchased~~
~~of shares~~
~~Average price~~
~~announced plans~~
~~under the plans or~~
~~Period~~
~~purchased~~
~~paid per share~~
~~or programs~~ ⁽¹⁾
~~programs~~ ⁽¹⁾
~~7/1/18 - 7/31/18~~
- $ - - ~~3,012,074~~
~~8/1/18 - 8/31/18~~
- - - ~~3,012,074~~
~~9/1/18 - 9/30/18~~
- - - ~~3,012,074~~
~~Total~~
- $ - - ~~3,012,074~~
~~(1)~~
On October 17, 2007, the Board of Directors of the Company authorized the repurchase of 5,000,000 shares of our common stock from time to time in the open market. The repurchased shares are held as treasury stock and are available for general corporate purposes. As of September 30, 2018, there were 3,012,074 shares that may yet be repurchased under this program. There is no expiration date for this repurchase program.
ITEM 6.
EXHIBITS
~~Exhibit 3.1~~ ~~Amended and Restated Bylaws of the Company, effective October 17, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on October 24, 2018).~~

Exhibit 31.1
Certification of John Sarvis, Chairman, Chief Executive Officer and President, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 6, ~~2018.~~2019.

Exhibit 31.2
Certification of Michael Hufnagel, Senior Vice President, Chief Financial Officer and Treasurer, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 6, ~~2018.~~2019.

Exhibit 32.1
Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - John Sarvis and Michael Hufnagel.

101
~~The following financial information from our Quarterly Report on Form 10-Q for~~Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the ~~quarter ended September 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i)~~ Consolidated Balance Sheets at March 31, 2019 and June 30, 2019, (ii) the Consolidated Statements of Operation for the three month periods ended June 30, 2019 and 2018, (iii) the Consolidated Statement of Comprehensive Income (Loss) for the three month periods ended June 30, 2019 and 2018, (iv) the Consolidated Statements of ~~Comprehensive Income (Loss), (iv)~~Changes in Stockholders’ Equity for the three month periods ended June 30, 2019 and 2018, (v) the Consolidated Statements of Cash Flows for the three month periods ended June 30, 2019 and ~~(v)~~2018 and (vi) the ~~Notes~~notes to the Condensed Consolidated Financial Statements.

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Signature

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, and the undersigned also has signed this report in his capacity as the registrant’s Chief Financial Officer.


Date: ~~November~~August 6, ~~2018~~2019


AVX Corporation

By:
/s/ Michael Hufnagel
Michael Hufnagel

~~Michael Hufnagel~~Senior Vice President, Chief Financial Officer, and Treasurer

~~Senior Vice President, Chief Financial Officer, and Treasurer~~

3229

														Accumulated
	Common Stock							Additional						Other
	Number				Treasury			Paid-In			Retained			Comprehensive
	Of Shares		Amount		Stock			Capital			Earnings			Income (Loss)			Total
Balance at March 31, 2018		168,434	$	1,764	$	(102,122	)	$	360,077		$	1,962,467		$	21,257		$	2,243,443
Net income		-		-		-			-			55,963			-			55,963
Other comprehensive loss, net of income taxes		-		-		-			-			-			(39,048	)		(39,048	)
Dividends of $0.115 per share		-		-		-			-			(19,466	)		-			(19,466	)
Stock-based compensation expense		-		-		-			838			-			-			838
Stock option activity		95		-		1,940			(1,396	)		-			-			544
Tax expense on stock option exercises		-		-		-			(24	)		-			-			(24	)
Payment of tax withholding for vested restricted stock units				-		-			(720	)		-			-			(720	)
Treasury stock purchased		-		-		(811	)		-			-			-			(811	)
Balance at June 30, 2018		168,529	$	1,764	$	(100,993	)	$	358,775		$	1,998,964		$	(17,791	)	$	2,240,719

Balance at March 31, 2019		168,826	$	1,764	$	(97,172	)	$	362,498		$	2,156,584		$	(39,494	)	$	2,384,180
Net income		-		-		-			-			54,677			-			54,677
Other comprehensive loss, net of income taxes		-		-		-			-			-			7,123			7,123
Dividends of $0.115 per share		-		-		-			-			(19,444	)		-			(19,444	)
Stock-based compensation expense		-		-		-			996			-			-			996
Stock option activity		255		-		3,290			(2,494	)		-			-			796
Tax benefit of stock option exercises		-		-		-			135			-			-			135
Payment of tax withholding for vested restricted stock units		-		-		-			(1,304	)		-			-			(1,304	)
Balance at June 30, 2019		169,081	$	1,764	$	(93,882	)	$	359,831		$	2,191,817		$	(32,371	)	$	2,427,159

Assets Acquired and Liabilities Assumed	Allocation of Purchase Price
Accounts receivable	$	61,483
Inventory		42,443
Accounts payable and accrued liabilities		(67,930	)
Other current assets and liabilities, net		8,566
Working capital		44,562
Property and equipment		85,794
Intangible assets		18,168
Other non-current assets and liabilities, net		(13,806	)
Total identified assets and liabilities		134,718
Purchase price		162,038
Goodwill	$	27,320

	Classification on the Balance Sheet	As of June 30, 2019
Assets
Operating lease assets	Other assets	$	17,054

Liabilities
Current
Operating lease liabilities	Accrued expenses	$	5,057
Noncurrent
Operating lease liabilities	Other liabilities		11,727
Total lease liabilities		$	16,784

	Three months ended
	June 30, 2019
Operating lease cost	$	1,148
Short-term lease cost		533
Variable lease cost		444
Total lease cost	$	2,125

Fiscal Year Ending
2020	$	4,529
2021		4,955
2022		3,495
2023		2,040
2024		1,392
Thereafter		1,502
Total operating lease payments	$	17,913
Less imputed interest		1,129
Total operating lease liabilities	$	16,784

	Six Months Ended September 30, 2018
			Balances without		Increase Due to
	As reported		ASC 606 Adoption		Adoption
Accounts Receivable - trade, net	$	262,433	$	247,611	$	14,822
Accrued Expenses	$	151,014	$	136,192	$	14,822

Fiscal Year Ending
2020	$	6,642
2021		4,742
2022		3,218
2023		2,372
2024		445
Thereafter		1,856
Total operating lease payments	$	19,275

	March 31, 2019		June 30, 2019
Gross Accounts Receivable - trade	$	273,053	$	259,417
Less:
Allowances for doubtful accounts		1,276		1,167
Stock rotation and ship from stock and debt		14,140		14,350
Sales returns and discounts		646		483
Total allowances		16,062		16,000
Accounts Receivable - trade, net		256,991		243,417

			Based on
			Quoted
			prices		Other
			in active		observable		Unobservable
	Fair Value at		markets		inputs		inputs
	March 31, 2019		(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
Assets held in the non-qualified deferred compensation program⁽¹⁾	$	4,693	$	3,265	$	1,428	$	-
Foreign currency derivatives⁽²⁾		853		-		853		-
Total	$	5,546	$	3,265	$	2,281	$	-

	Held-to-Maturity
	Amortized		Estimated
	Cost		Fair Value
Due in one year or less		482,821		483,168

	March 31, 2019		June 30, 2019
Finished goods	$	102,373	$	108,743
Work in process		142,475		142,349
Raw materials		386,840		415,156
Total Inventories, net	$	631,688	$	666,248

	March 31, 2018
	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
	Caption	Value		Caption	Value

Foreign exchange contracts	Prepaid and other	$	212	Accrued expenses	$	377

	March 31, 2019
	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
	Caption	Value		Caption	Value

Foreign exchange contracts	Prepaid and other	$	570	Accrued expenses	$	318

	September 30, 2018
	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
	Caption	Value		Caption	Value

Foreign exchange contracts	Prepaid and other	$	222	Accrued expenses	$	139

	June 30, 2019
	Fair Value of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
	Caption	Value		Caption	Value

Foreign exchange contracts	Prepaid and other	$	440	Accrued expenses	$	401

	ITEM 6.	EXHIBITS

	~~Exhibit 3.1~~	~~Amended and Restated Bylaws of the Company, effective October 17, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on October 24, 2018).~~

	Exhibit 31.1	Certification of John Sarvis, Chairman, Chief Executive Officer and President, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 6, ~~2018.~~2019.

	Exhibit 31.2	Certification of Michael Hufnagel, Senior Vice President, Chief Financial Officer and Treasurer, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 6, ~~2018.~~2019.

	Exhibit 32.1	Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - John Sarvis and Michael Hufnagel.

	101	~~The following financial information from our Quarterly Report on Form 10-Q for~~Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the ~~quarter ended September 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i)~~ Consolidated Balance Sheets at March 31, 2019 and June 30, 2019, (ii) the Consolidated Statements of Operation for the three month periods ended June 30, 2019 and 2018, (iii) the Consolidated Statement of Comprehensive Income (Loss) for the three month periods ended June 30, 2019 and 2018, (iv) the Consolidated Statements of ~~Comprehensive Income (Loss), (iv)~~Changes in Stockholders’ Equity for the three month periods ended June 30, 2019 and 2018, (v) the Consolidated Statements of Cash Flows for the three month periods ended June 30, 2019 and ~~(v)~~2018 and (vi) the ~~Notes~~notes to the Condensed Consolidated Financial Statements.

AVX Corporation

By:	/s/ Michael Hufnagel
	Michael Hufnagel
	~~Michael Hufnagel~~Senior Vice President, Chief Financial Officer, and Treasurer
	~~Senior Vice President, Chief Financial Officer, and Treasurer~~