AVX Corporation Announces Third Quarter Results.

Business Editors/High Tech Writers

MYRTLE BEACH, S.C.--(BUSINESS WIRE)--Jan. 10, 2002

AVX Corporation (NYSE: AVX) reported that net sales were $304.3 million in the third quarter ended December 31, 2001 and that net income (before restructuring and special charges) was $3.2 million, or $0.02 per diluted share.

Chief Executive Officer and President John Gilbertson stated, "The sales for the quarter and adjusted operating earnings were comparable to the September quarter and in line with our previous guidance. Sales volumes increased in the quarter due to customers' seasonal production requirements, but selling prices continued to be under heavy pressure as the capacity in the industry remains in excess of near term demand."

The restructuring and special charges for this quarter totaled $10.5 million ($9.7 million after taxes). Such charges were for the consolidation of manufacturing and warehousing operations in Europe, as well as the cost of headcount reductions related to the previously announced facility closure in the United States.

The net result for the quarter, including the restructuring and special charges, was ($6.5 million), or ($0.04) per diluted share.

For the first nine months of the fiscal year, net sales were $974.9 million and adjusted net income (before restructuring and special charges) was $39.8 million, or $0.23 per diluted share. Net results for the first nine months of the fiscal year, including the restructuring and special charges, were ($5.1 million), or ($0.03) per diluted share.

The restructuring and special charges for the nine months ended December 31, 2001 total $62.8 million ($44.9 million after taxes). The charges included $24.6 million in restructuring charges, $35.2 million in special charges to cost of goods sold for inventory write-downs and facility consolidations, and $3.0 million in special charges to selling, general and administrative expenses for write-downs of customer receivables. The charges are primarily non-cash related. The cost reduction programs are expected to reduce annual operating costs by approximately $136 million.

Mr. Gilbertson stated, "The outlook for the next quarter indicates that the business climate will continue to be sluggish and expectations for growth have been pushed into the second half of calendar 2002. Preliminary indications for the quarter ending March 31, 2002 are that sales will decline between 5% and 10% sequentially, primarily due to lower selling prices, and earnings will be at a breakeven level, or a few cents negative. Cost reduction initiatives will continue to be implemented to help offset the selling price erosion."

AVX, headquartered in Myrtle Beach, South Carolina, is a leading manufacturer and supplier of a broad line of passive electronic components and related products.

Please visit our website at www.avxcorp.com .

                            AVX Corporation
              Consolidated Condensed Statements of Income
                              (unaudited)
                 (in thousands, except per share data)

                         Three Months Ended       Nine Months Ended
                            December 31              December 31
                         2000        2001         2000        2001
                       --------    --------   ----------    --------
Net sales              $709,509    $304,281   $2,007,243    $974,895
Cost of sales           431,049     282,788    1,248,806     887,174
                       --------     --------    --------     --------
Gross profit            278,460      21,493      758,437      87,721
Selling, general &
 admin. exp.             38,880      24,450      111,472      82,265
Restructuring
 expense                      0       7,800            0      24,646
                       --------     --------    --------     --------
Profit (loss) from
 operations             239,580     (10,757)     646,965     (19,190)
Other income
 (expense)                4,886       4,272       10,671      15,267
                       --------     --------    --------     --------
Income (loss)
 before income
 taxes                  244,466      (6,485)     657,636      (3,923)
Provision (benefit)
 for taxes               78,382          (4)     214,945       1,226
                       --------     --------    --------     --------
Net income (loss)      $166,084     ($6,481)    $442,691     ($5,149)
                       ========     ========    ========     ========

Basic income (loss)
 per share                $0.95      ($0.04)       $2.53      ($0.03)
Diluted income
 (loss) per share         $0.94      ($0.04)       $2.51      ($0.03)

Weighted average
 common
shares outstanding:
            Basic     174,656.1   174,470.2    174,775.3   174,728.3
            Diluted   175,965.6   174,470.2    176,473.8   174,728.3

Adjusted diluted
 income per share
 before restructuring
 and special charges:     $0.94       $0.02        $2.51       $0.23

The adjusted diluted income per share has been calculated by adding back to net income (loss) the after-tax impact of the restructuring and special charges recorded in each period. The restructuring and special charges recorded in the quarter ended December 31, 2001 included $7.8 million of restructuring expense and $2.7 million of special charges to cost of sales for costs incurred in connection with the consolidation of facilities and reductions in headcount. Total charges of $62.8 million recorded in the nine months ended December 31, 2001 included $24.6 million of restructuring expense related to headcount reductions, facility consolidations and equipment write-downs, $35.2 million included in cost of sales for inventory write-downs and facility consolidations, and $3.0 million in selling, general and administrative expenses for customer receivable write-downs.

Certain statements contained above may be "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Risk factors relating to such statements are described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2001. Actual events, results, and/or timing may differ from the events, results, and/or timing as projected, estimated, or described above.