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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 25, 2000
INSILCO HOLDING CO.
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(Exact Name of Registrant as specified in its charter)
Delaware 0-24813 06-1158291
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(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
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(Address, including zip code, and telephone number
including area code of Registrant's
principal executive offices)
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 25, 2000, Insilco Holding Co., (the "Company") completed a
transaction agreement, dated as of July 20, 2000, with ThermaSys Holding
Company, pursuant to which ThermaSys purchased all of the businesses
comprising the Company's automotive components business segment. ThermaSys
is a newly organized entity wholly owned by the merchant banking units of
Donaldson Lufkin & Jenrette and CitiCorp, which units also together
beneficially own approximately 90% of the Company's outstanding common
stock.
The net proceeds of $143.8 million were determined by arm's-length
negotiations between the parties and, in the case of Insilco Holding Co,
were approved by a special committee of Insilco Holding Co.'s Board of
Directors comprised of the Insilco Holding Co.'s independent director. The
net proceeds of the transaction were used to repay the outstanding
principal of Insilco Technologies Inc.'s Credit Facility.
The Company's press release issued August 28, 2000, is attached as an
exhibit and is incorporated herein by reference.
ITEM 5. OTHER EVENTS
The Company also announced it changed the name of Insilco Corporation to
Insilco Technologies, Inc. (IT), amended and restated IT's previous Bank
Credit Agreement and Facilities and completed IT's acquisition of Precision
Cable Manufacturing Company (PCM), a Texas-based custom wire and cable
assembler. The name change was made to reflect the telecommunication and
electronics nature of the remaining businesses. The Company amended and
restated IT's previous Bank Credit Agreement and Bank Credit Facilities to
include a $35.0 million Term A Facility, a $125.0 million Term B Facility,
and a $50.0 million undrawn Revolving Credit Facility, which has available
an additional tack-on of $25.0 million. Proceeds from the new Bank Credit
Facilities were used to payoff the balances of the previous Bank Credit
Facilities, acquire PCM, pay fees and expenses, and increase cash balances.
The PCM acquisition will be accounted for using the purchase method of
accounting. The acquisition did not result in a significant business
combination within the definition provided by the Securities and Exchange
Commission and therefore, pro forma financial information has not been
presented.
Insilco Technologies, Inc.'s credit agreement, dated August 25, 2000, is
attached as an exhibit and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
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Not applicable.
(b) Forma financial Information
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The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
<PAGE>
Pro Forma Condensed Consolidated Balance
Sheet as of June 30, 2000 Page F-1
Pro Forma Condensed Consolidated Statement
Of Operations
Six months ended June 30, 2000 Page F-2
Year ended December 31, 1999 Page F-3
The following pro forma unaudited condensed balance sheet as of June 20,
2000 presents the estimated impact of the sale of the automotive components
businesses as discussed in Item 2 on the Company's consolidated financial
position assuming such sale had occurred at June 30, 2000. The following
pro forma unaudited condensed consolidated statements of operations for the
six months ended June 30, 2000 and the year ended December 31, 1999 present
the estimated impact of the sale of the automotive components businesses on
the Company's historical consolidated statements of operations as if such
sale had occurred at the beginning of the applicable period. The
nonrecurring transactions related directly to the sale are excluded from
the pro forma statements of operations. The significant assumptions
utilized for the pro forma financial statements include: (i) the net
proceeds will be utilized to reduce the outstanding debt described above;
(ii) the interest rates for the outstanding debt are based upon the
weighted average rates during the applicable period; (iii) deferred tax
assets representing net operating losses will be used to minimize the tax
effect of the gain on the sale; and (iv) income tax expense (benefit)
attributable to the pro forma transactions is provided at the statutory tax
rate.
The unaudited pro forma condensed consolidated financial statements have
been prepared by the Company based upon assumptions deemed proper. The
unaudited pro forma condensed consolidated financial statements presented
herein are shown for illustrative purposes only and are not necessarily
indicative of the future financial position or future results of operations
of the Company or of the financial position or results of operations that
would have actually occurred had the transaction been in effect as of the
date or for the periods presented.
The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the historical financial statements and related
notes of the Company.
(c) Exhibits.
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Exhibit No. Description
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2 (a) Transaction Agreement, dated July 20, 2000, by and
among Insilco Holding Co. (and certain of its
subsidiaries) and ThermaSys Holding Company (and
certain of its subsidiaries). (Reference made to
Exhibit 2(a) in the Form 8-K dated July 20, 2000, and
filed with the SEC on July 26, 2000.)
99 (a) Press release of Insilco Holding Co. issued August 28,
2000.
<PAGE>
99 (b) Credit Agreement dated August 25, 2000, among Insilco
Technologies, Inc., TAT Technology, Inc., Various
Financial Institutions, Bank One, NA, DLJ Capital
Funding, Inc., and Huntington Bank.
<PAGE>
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 TECHNOLOGIES, INC.
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Registrant
Date: September 7, 2000 By: /s/ Michael R. Elia
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Michael R. Elia
Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
<PAGE>
EXHIBIT INDEX
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Exhibit No. Description
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2 (a) Transaction Agreement, dated July 20, 2000, by and
among Insilco Holding Co. (and certain of its
subsidiaries) and ThermaSys Holding Company (and
certain of its subsidiaries). (Reference made to
Exhibit 2(a) in the Form 8-K dated July 20, 2000, and
filed with the SEC on July 26, 2000.)
99 (a) Press release of Insilco Holding Co. issued August 28,
2000.
99 (b) Credit Agreement dated August 25, 2000, among Insilco
Technologies, Inc., TAT Technology, Inc., Various
Financial Institutions, Bank One, NA, DLJ Capital
Funding, Inc., and Huntington Bank.
<PAGE>
Insilco Holding Co. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2000
(In thousands)
<TABLE><CAPTION>
Automotive
Businesses
Sale
Assets Historical Adjustments Pro Forma
------ ---------- ----------- ---------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 3,705 3,705
Trade receivables, net 60,308 60,308
Other receivables 899 899
Inventories, net 48,255 48,255
Deferred taxes 9,572 (1,293)(3) 8,279
Net assets of discontinued operations 106,685 (106,685)(1) --
Prepaid expenses and other current assets 2,078 2,078
--------- --------- ---------
Total current assets 231,502 (107,978) 123,524
Property, plant and equipment, net 49,655 49,655
Goodwill, net 87,407 87,407
Other assets and deferred charges 17,162 17,162
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Total assets $ 385,726 (107,978) 277,748
========= ========= =========
Liabilities and Stockholder's Deficit
Current liabilities:
Current portion of long-term debt $ 1,266 1,266
Accounts payable 26,164 26,164
Accrued expenses 27,265 300 (2) 27,565
Income taxes payable 15,013 7,056 (3) 22,069
Other current liabilities 7,581 7,581
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Total current liabilities 77,289 7,356 84,645
Long-term debt, excluding current portion 432,327 (143,782)(4) 288,545
Other long-term obligations, excluding current portion 35,007 5,352 (3) 40,359
Minority interest 100 100
15% Preferred stock; 3,000,000 shares authorized; 1,497,890 shares and
1,400,000 shares issued and outstanding at June 30, 2000 and
December 31, 1999, respectively 43,472 43,472
Stockholders' deficit:
Common stock, $.001 par value; 15,000,000 shares authorized;
1,478,987 shares issued and 1,471,769 outstanding at June 30, 2000, and
1,472,487 shares issued and 1,455,335 outstanding at December 31, 1999 1 1
Treasury stock, at cost (480) (480)
Additional paid-in capital 62,851 62,851
Accumulated deficit (261,213) 23,096 (5) (238,117)
Accumulated other comprehensive loss (3,628) (3,628)
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Total liabilities and stockholder's deficit $ 385,726 (107,978) 277,748
========= ========= =========
1) To record the removal of the net assets of the automotive components businesses.
2) To record the accrual of expenses related to the sale.
3) To record the reduction of the deferred tax asset, the accrual of capital gains
tax and the increase in long term taxes payable.
4) To record the reduction in debt from the net proceeds of the sale.
5) To record the net gain on the sale.
</TABLE>
F-1
<PAGE>
INSILCO HOLDING CO. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended June 30, 2000
(In thousands, except per share data)
<TABLE><CAPTION>
TAT Automotive
(1) Net Purchase Taylor Businesses
TAT and Interest Interest Interest
Historical Operations Adjustments Adjustments Adjustment Pro Forma
---------- ---------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 170,669 5,819 -- -- -- 176,488
Cost of goods sold 123,864 3,709 -- -- -- 127,573
Depreciation and amortization 6,679 13 517(2) -- -- 7,209
Selling, general and administrative 23,955 1,224 -- -- -- 25,179
Restructuring Charge -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Operating income (loss) 16,171 873 (517) -- -- 16,527
Other Income (expense):
Interest expense (25,758) -- (1,141)(3) 938(5) 6,488(7) (19,473)
Interest income 153 21 -- -- -- 174
Other income, net (404) -- -- -- -- (404)
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Income (loss) from continuing
operations before income taxes (9,838) 894 (1,658) 938 6,488 (3,176)
Income tax (expense) benefit 1,629 (309) 422(4) (347)(6) (2,401)(8) (1,006)
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Net income (loss) (8,209) 585 (1,236) 591 4,087 (4,182)
Preferred stock dividend (3,359) -- -- -- -- (3,359)
--------- --------- --------- --------- --------- ---------
Net income (loss) available
to common $ (11,568) 585 (1,236) 591 4,087 (7,541)
========= ========= ========= ========= ========= =========
Basic loss available per common share:
Loss per share available to common $ (7.56) (4.93)
Basic shares 1,531 1,531
Diluted loss available per common share:
Loss per share available to common $ (7.56) (4.93)
Diluted shares 1,531 1,531
1) To include TAT Technologies 1 1/2 month translated statement of operations in our financial statement.
2) To reflect 1 1/2 months amortization of goodwill based on a straight-line basis over 20 years.
3) To reflect 1 1/2 months interest expense on borrowings under Insilco Technologies, Inc.'s credit facility to finance the
acquisition. Interest is calculated on the new debt of $102.1 million less the cash acquired of $3.6 million using an
assumed interest rate of 9 percent. A change of 1/8 percent in the interest rate would result in a change in interest
expense and net income of $16 and $10, before and after taxes, respectively.
4) To reflect the tax effect of the deductible pro forma adjustments at a statutory rate, 35 percent for federal and 2
percent for state. The amortization of the goodwill is not tax deductible.
5) To reflect 1 1/2 months decrease in interest expense resulting from the reduction of Insilco Technologies, Inc.'s credit
facility from the proceeds of the Taylor transaction. Interest is calculated on the decrease in debt of $92.8 million
at an assumed interest rate of 9 percent. A change of 1/8 percent in the interest rate would result in a change in
interest expense and net income of $13 and $8, before and after taxes, respectively.
6) To reflect the tax effect of the deductible pro forma adjustments at a statutory rate, 35 percent for federal and 2
percent for state.
7) To reflect a decrease in interest expense resulting from the reduction of Insilco Technologies, Inc.'s credit facility
from the proceeds of the ThermaSys transaction. Interest is calculated on the decrease in debt of $143.8 million at an
assumed interest rate of 9 percent. A change of 1/8 percent in the interest rate would result in a change in interest
expense and net income of $90 and $58, before and after taxes, respectively.
8) To reflect the tax effect of the deductible pro forma adjustments at a statutory rate, 35 percent for federal and 2
percent for state.
</TABLE>
F-2
<PAGE>
INSILCO HOLDING CO. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Twelve Months Ended December 31, 1999
(In thousands, except per share data)
<TABLE><CAPTION>
TAT (7) Automotive
(1) Net Purchase Taylor Automotive Businesses
TAT and Interest Interest Businesses Interest
Historical Operations Adjustments Adjustment Operations Adjustment Pro Forma
---------- ---------- ----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 476,355 46,549 -- -- (228,313) -- 294,591
Cost of goods sold 367,905 29,668 -- -- (176,501) -- 221,072
Depreciation and amortization 19,541 100 4,136(2) -- (9,365) -- 14,412
Selling, general and administrative 60,450 9,795 -- -- (20,303) -- 49,942
Restructuring Charge 6,382 -- -- -- (595) -- 5,787
--------- --------- --------- --------- --------- --------- ---------
Operating income (loss) 22,077 6,986 (4,136) -- (21,549) -- 3,378
Other Income (expense):
Interest expense (47,279) -- (8,861)(3) 8,352(5) 23 12,940(8) (34,825)
Interest income 389 164 -- -- 2 -- 555
Equity in net income of Thermalex 3,043 -- -- -- (3,043) -- --
Other income, net 10,064 -- -- -- (7,590) -- 2,474
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from continuing
operations before income taxes (11,706) 7,150 (12,997) 8,352 (32,157) 12,940 (28,418)
Income tax (expense) benefit 8,112 (2,470) 3,279(4) (3,090)(6) 11,355 (4,788)(9) 12,398
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) (3,594) 4,680 (9,718) 5,262 (20,802) 8,152 (16,020)
Preferred stock dividend (6,019) -- -- -- -- -- (6,019)
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) available
to common $ (9,613) 4,680 (9,718) 5,262 (20,802) 8,152 (22,039)
========= ========= ========= ========= ========= ========= =========
Basic loss available per common share:
Loss per share available to common $ (6.17) (14.15)
Basic shares 1,558 1,558
Diluted loss available per common share:
Loss per share available to common $ (6.17) (14.15)
Diluted shares 1,558 1,558
</TABLE>
F-3
<PAGE>
Notes to the Unaudited Pro Forma Condensed Consolidated Statements of Income:
1) To include TAT Technologies twelve-month translated statement of
operations in our financial statement.
2) To reflect the increase in amortization due to the amortization of
goodwill on a straight-line basis over 20 years.
3) To reflect interest expense on borrowings under Insilco Technologies,
Inc.'s credit facility to finance the acquisition. Interest is
calculated on the new debt of $102.1 million less the cash acquired of
$3.6 million using an assumed interest rate of 9 percent. A change of
1/8 percent in the interest rate would result in a change in interest
expense and net income of $123 and $79, before and after taxes,
respectively.
4) To reflect the tax effect of the deductible pro forma adjustments at a
statutory rate, 35 percent for federal and 2 percent for state. The
amortization of the goodwill is not tax deductible.
5) To reflect a decrease in interest expense resulting from the reduction
of Insilco Technologies, Inc.'s credit facility from the proceeds of
the Taylor transaction. Interest is calculated on the decrease in debt
of $92.8 million at an assumed interest rate of 9 percent. A change of
1/8 percent in the interest rate would result in a change in interest
expense and net income of $116 and $74, before and after taxes,
respectively.
6) To reflect the tax effect of the deductible pro forma adjustments at a
statutory rate, 35 percent for federal and 2 percent for state.
7) To remove the operations of the automotive components businesses as a
result of the sale.
8) To reflect a decrease in interest expense resulting from the reduction
of Insilco Technologies, Inc.'s credit facility from the proceeds of
the ThermaSys transaction. Interest is calculated on the decrease in
debt of $143.8 million at an assumed interest rate of 9 percent. A
change of 1/8 percent in the interest rate would result in a change in
interest expense and net income of $180 and $115, before and after
taxes, respectively.
9) To reflect the tax effect of the deductible pro forma adjustments at a
statutory rate, 35 percent for federal and 2 percent for state.
F-4
