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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: AUGUST 5, 1999
INSILCO HOLDING CO.
(Exact Name of Registrant as specified in its charter)
Delaware 0-24813 06-1158291
-------- ------- ----------
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation or organization) Identification Number)
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Address, including zip code, and telephone number
including area code of Registrant's
principal executive offices)
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ITEM 5. OTHER EVENTS.
The Company's press release issued August 5, 1999 is attached as an exhibit and
is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
99 (a) Press release of the Company issued August 5, 1999.
2
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SIGNATURES
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.
INSILCO HOLDING CO.
------------------------------------------
Registrant
Date: August 5, 1999 By: /s/ Michael R. Elia
------------------------------------------
Michael R. Elia
Sr. Vice President Chief Financial Officer
3
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EXHIBIT INDEX
Exhibit No. Description
99 (a) Press release of the Company issued August 5, 1999.
4
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Exhibit 99 (a)
Excellence in Electronics, Telecommunications, Automotive, Publishing
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NEWS RELEASE
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<TABLE>
<S> <C> <C>
FOR IMMEDIATE RELEASE INVESTORS: STEPHEN J. SMITH MEDIA: MELODYE DEMASTUS
VP, TREASURER & ASST. SEC. MELROSE CONSULTING
(614) 791-3101 (614) 771-0860
</TABLE>
INSILCO HOLDING CO. REPORTS SECOND QUARTER RESULTS
COLUMBUS, OHIO, AUGUST 5, 1999 - INSILCO HOLDING CO. (OTC BULLETIN
BOARD: INSL) today reported sales and operating results for its second quarter
and six months ended June 30, 1999.
Sales were up 5% to $178.4 million for the 1999 second quarter,
compared to $170.0 million recorded in the year ago second quarter. For the six
months ended June 30, 1999 and 1998, sales were $305.3 million and $287.3
million, respectively.
The Company reported EBITDA (earnings before interest, taxes,
depreciation, amortization, other income, one-time charges and restructuring
charges, plus cash dividends received from Thermalex, the Company's 50% owned
joint venture, "EBITDA") of $23.8 million for the 1999 second quarter, compared
to $23.0 million recorded in the 1998 second quarter. For the first six months
of 1999, EBITDA was $40.2 million, compared to $38.9 million recorded in the
first six months of 1998.
The Company also reported a net loss of ($5.2) million for the 1999
second quarter compared to net income of $4.4 million for the 1998 second
quarter. For the six months of 1999, the Company reported a net loss of ($6.1)
million, compared to net income of $7.2 million recorded in the first six months
of 1998. The decrease in net income for the first six months of 1999 resulted
principally from increased interest expense of $9.8 million as a result of the
third quarter 1998 recapitalization and merger and second quarter 1999 charges
of $8.8 million related to the corporate office restructuring and the previously
announced closure of the Company's McKenica division. Net cash charges resulting
from these restructuring items were approximately $2.0 million.
BUSINESS DISCUSSION
The Company's Automotive Components Group reported 3% sales growth in
the 1999 second quarter to $56.2 million, from $54.4 million reported in the
year earlier second quarter. EBITDA for the Group was $8.2 million and $8.7
million for the second quarters of 1999 and 1998, respectively. Quarterly
results reflected higher sales of specialty heat exchangers, aluminum tubing and
transmission components. However, continued weak demand for industrial radiators
and aftermarket heat exchanger tubing resulted in lower EBITDA for the Group.
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The Company's Technologies Group reported 14% sales growth in the 1999
second quarter to $55.8 million compared to $48.8 million recorded in the 1998
second quarter. Second quarter 1999 sales included $10.4 million from the
Company's EFI and European cable assembly acquisitions which were completed
after the second quarter of 1998. EBITDA for the Technologies Group was $7.2
million in the 1999 second quarter, compared to $7.9 million recorded in the
1998 second quarter. Excluding the impact of the acquisitions, second quarter
revenues were lower than the previous year, reflecting continuing weak demand
from the electronics market and certain telecommunications customers. Despite
the lower sales in the quarter, the Company indicated it was seeing encouraging
signs of improving demand in its markets for the second half of the year,
particularly for cable assemblies and power transformers.
Sales at Taylor Publishing were $59.6 million in the 1999 second
quarter, compared to $59.5 million recorded in the year ago second quarter. For
its seasonally important second quarter, Taylor's EBITDA increased over 30% to
$9.9 million, compared to EBITDA of $7.5 million in the year ago second quarter,
reflecting improved operating performance.
CEO COMMENTS
David A. Kauer, Insilco President and CEO, said, "We were very pleased
with the substantial operating earnings improvement at Taylor Publishing, during
its important peak yearbook season. The process improvements implemented over
the past year by Taylor's new management team resulted in significantly improved
on-time delivery performance, increased productivity and lower costs."
Kauer continued, "While specialty heat exchangers and worldwide tubing
sales were higher in the second quarter, sales of higher margin industrial
radiators and related components remained soft. In the Technologies Group,
market conditions, including customer inventory corrections and continued
pricing pressures, negatively impacted performance. We are, however, beginning
to see improvement in the level of quote and orders activity across our product
lines in this segment, and in the industrial radiator market as well."
Kauer concluded, "We continued to make progress during the second
quarter in achieving our goal of significantly reducing operating expenses
during 1999, as evidenced by our announcement late in the quarter regarding the
restructuring of our corporate staff, which is expected to generate
approximately $3.5 million in annualized savings. We continue to rationalize our
manufacturing facilities to better utilize low cost facilities and to
consolidate facilities where practical. In addition, as part of our EFI
integration, we have removed $1.5 million in annualized cost and have
consolidated our two precision stamping operations in El Paso, Texas. We also
continue to explore potential divestitures of business units that do not meet
our long-term strategic goals."
Insilco Holding Co., based in suburban Columbus, Ohio, is a diversified
manufacturer of industrial components and a supplier of specialty publications.
The Company's industrial business units serve the automotive, electronics,
telecommunications and other industrial markets, and its publishing business
serves the school yearbook market. The Company had 1998 revenues in excess of
$535 million.
The statements made in this press release which are not historical
facts may be deemed forward looking statements, and, as such, are subject to
certain risks and uncertainties, including statements with respect to the
Company's long-term outlook; growth prospects; slowdown in the electronics
markets; the ability to improve operating efficiencies and to further reduce
expenses, possible acquisitions and divestitures. It is important to note that
results could differ materially from those projected in such forward-looking
statements. Factors
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which could cause results to differ materially include, but are not limited to
the following: delays in new product introductions, lack of market acceptance
for new products, changes in demand for the Company's products, changes in
market trends, general competitive pressures from existing and new competitors,
adverse changes in operating performance, changes in interest rates, and adverse
economic conditions which could affect the amount of cash available for debt
servicing and capital investments. Further information concerning factors that
could cause actual results to differ materially from those in the
forward-looking statements are contained from time to time in the Company's SEC
filings, including, but not limited to, the Company's report on Form 10-K/A for
the year ended December 31, 1998 and the Company's report on Form 10-Q for March
31, 1999. Copies of these filings may be obtained by contacting the Company or
the SEC.
Investor Relations Contact: Stephen J. Smith, (614) 791-3101 or write to Insilco
Holding Co., Investor Relations, 425 Metro Place North, Box 7196, Dublin, OH
43017 or call Melodye Demastus, Melrose Consulting (614) 771-0860. You may also
visit our web site at http://www.insilco.com.
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INSILCO HOLDING CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions except per share data)
FOR THE QUARTER ENDED
<TABLE>
<CAPTION>
Actual Pro forma(1)
June 30, June 30,
-------------- --------
1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
Sales $178.4 $170.0 $170.0
Cost of sales, excluding depreciation (1999 includes
$3.2 of restructuring expenses) 123.9 115.1 115.1
Selling, general and administrative expenses,
excluding depreciation (1999 includes $.2 of
restructuring expenses) 34.3 32.3 32.3
Depreciation and amortization expense 6.9 6.4 6.4
Significant legal, professional and merger fees 2.5 2.0 0.7
Restructuring charge 5.5 -- --
------ ----- -----
Operating income 5.3 14.2 15.5
Interest expense, net (12.1) (6.9) (11.5)
Equity in net income of Thermalex 1.0 0.7 0.7
Other income, net 0.1 1.4 1.4
------ ----- -----
Income (loss) before income taxes (5.7) 9.4 6.1
Income tax benefit (expense) 0.5 (5.0) (2.2)
------ ----- -----
Net income (loss) (5.2) 4.4 3.9
Preferred stock dividend (1.5) -- (1.4)
====== ===== =====
Net income (loss) available to common $ (6.7) $ 4.4 $ 2.5
====== ===== =====
Cash dividend from Thermalex $ -- $ -- $ --
====== ===== =====
Earnings before other income, interest, taxes,
depreciation, amortization, and one-time items, plus
cash dividend from Thermalex $ 23.8 $ 23.0 $ 23.0
====== ===== =====
Capital expenditures $ (4.5) $ (5.1) $ (5.1)
====== ===== =====
Income (loss) per share available to common $(3.98) $ 1.06 $ 1.62
====== ===== =====
</TABLE>
(1) Pro forma to show results as if the August 17, 1998 merger with DLJ
Merchant Banking Partners occurred as of the beginning of the year.
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INSILCO HOLDING CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions except per share data)
FOR YEAR TO DATE
<TABLE>
Actual Pro forma(1)
June 30, June 30,
---------------- ----------
1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
Sales $305.3 $287.3 $287.3
Cost of sales, excluding depreciation (1999 includes
$3.2 of restructuring expenses) 219.9 200.7 200.7
Selling, general and administrative expenses,
excluding depreciation (1999 includes $.2 of
restructuring expenses) 51.9 49.7 49.7
Depreciation and amortization expense 11.8 10.6 10.6
Significant legal, professional and merger fees 2.5 2.3 1.0
Restructuring charge 5.5 -- --
------ ----- -----
Operating income 13.7 24.0 25.3
Interest expense, net (23.3) (13.8) (22.9)
Equity in net income of Thermalex 1.9 1.5 1.5
Other income, net 0.3 2.0 2.0
------ ----- -----
Income (loss) before income taxes (7.4) 13.7 5.9
Income tax benefit (expense) 1.3 (6.5) (2.2)
------ ----- -----
Net income (loss) (6.1) 7.2 3.7
Preferred stock dividend (2.9) -- (2.7)
====== ===== =====
Net income (loss) available to common $ (9.0) $ 7.2 $ 1.0
====== ===== =====
Cash dividend from Thermalex $ 2.9 $ 1.3 $ 1.3
====== ===== =====
Earnings before other income, interest, taxes,
depreciation, amortization, and one-time items,
plus cash dividend from Thermalex $ 40.2 $ 38.9 $ 38.9
====== ===== =====
Capital expenditures $ (7.7) $(10.9) $(10.9)
====== ===== =====
Income (loss) per share available to common $(5.51) $ 1.74 $ 0.61
====== ===== =====
</TABLE>
(1) Pro forma to show results as if the August 17, 1998 merger with DLJ
Merchant Banking Partners occurred as of the beginning of the year.
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INSILCO HOLDING CO.
(Unaudited)
(Amounts in millions)
SUPPLEMENTAL SEGMENT DATA
<TABLE>
Quarter Ended Year to Date
June 30, June 30,
------------------- -----------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
SALES
Industrial Businesses:
Technologies Group $ 55.8 $ 48.8 $111.2 $ 99.0
Automotive Components 56.2 54.4 113.1 108.9
----- ------ ------ ------
Total Industrial Businesses 112.0 103.2 224.3 207.9
Specialty Publishing 59.6 59.5 66.1 64.5
Other 6.8 7.3 14.9 14.9
===== ====== ====== ======
Total Sales $178.4 $170.0 $305.3 $287.3
===== ====== ====== ======
EBITDA
Industrial Businesses:
Technologies Group $ 7.2 $ 7.9 $ 14.2 $ 16.0
Automotive Components 8.2 8.7 16.4 17.2
----- ------ ------ ------
Total Industrial Businesses 15.4 16.6 30.6 33.2
Specialty Publishing 9.9 7.5 9.5 7.3
Other 0.2 0.6 0.9 1.0
Unallocated Corporate (1.7) (1.7) (3.7) (3.9)
Thermalex Cash Dividend -- -- 2.9 1.3
===== ====== ====== ======
Total EBITDA $ 23.8 $ 23.0 $ 40.2 $ 38.9
===== ====== ====== ======
SALES GROWTH VS. PRIOR YEAR
Industrial Businesses:
Technologies Group 14.3% 12.3%
Automotive Components 3.3% 3.9%
----- ------
Total Industrial Businesses 8.5% 7.9%
Specialty Publishing 0.2% 2.5%
Other (6.8)% 0.0%
===== ======
Total Sales 4.9% 6.3%
===== ======
EBITDA % OF SALES
Industrial Businesses:
Technologies Group 12.9% 16.2% 12.8% 16.2%
Automotive Components 14.6% 16.0% 14.5% 15.8%
----- ------ ------ ------
Total Industrial Businesses 13.8% 16.1% 13.6% 16.0%
Specialty Publishing 16.6% 12.6% 14.4% 11.3%
Other 2.9% 8.2% 6.0% 6.7%
Unallocated Corporate -- -- -- --
Thermalex Cash Dividend -- -- -- --
===== ====== ====== ======
Total EBITDA 13.3% 13.5% 13.2% 13.5%
===== ====== ====== ======
</TABLE>
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INSILCO HOLDING CO.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in millions)
<TABLE>
June 30, June 30, December 31,
1999 1998 1998
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<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10.2 $ 7.0 $ 7.4
Receivables, net 99.2 88.6 84.2
Inventories, net 65.4 61.9 64.6
Current portion of deferred taxes 2.1 -- 6.2
Prepaid expenses 4.5 3.2 4.4
------ ------ -------
Total current assets 181.4 160.7 166.8
Property, plant and equipment, net 123.7 113.3 114.7
Goodwill, net 16.8 13.1 13.6
Deferred taxes 8.2 -- 1.9
Investment in unconsolidated subsidiaries 10.9 10.1 9.0
Other assets and deferred charges 20.1 16.9 21.3
====== ====== =======
Total assets $ 361.1 $314.1 $ 327.3
====== ====== =======
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 37.3 $ 36.8 $ 34.5
Accrued expenses and other 64.6 48.2 58.2
Accrued interest payable 6.1 7.1 4.2
Current portion of deferred taxes -- 0.9 --
Current portion of long-term debt 1.3 -- 1.3
Current portion of long-term obligations 1.0 3.5 1.9
------ ------ -------
Total current liabilities 110.3 96.5 100.1
Long-term debt 411.9 264.8 383.1
Other long-term obligations 47.3 42.3 46.3
Deferred taxes -- 1.3 --
Minority interest 0.1 -- --
Preferred stock 37.0 -- 34.1
Stockholders' deficit (245.5) (90.8) (236.3)
------ ------ -------
Total liabilities and stockholders' deficit $ 361.1 $314.1 $ 327.3
====== ====== =======
</TABLE>
