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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: APRIL 29, 1998
INSILCO CORPORATION
(Exact Name of Registrant as specified in its charter)
Delaware 0-22098 06-0635844
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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
(Address, including zip code, and telephone number
including area code of Registrant's
principal executive offices)
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ITEM 5. OTHER EVENTS.
On April 29, 1998 Insilco Corporation (the "Company") issued its first quarter
earnings release. The Company reported net income of $2.8 million, or $0.66 per
share, for its first quarter ended March 31, 1998, on sales of $117.3 million.
The Company said that reported results were not comparable to the prior year
results due to the first quarter 1997 divestiture of the Rolodex business unit
and its third quarter 1997 refinancing and share repurchase. As a result, the
Company is reporting unaudited pro forma results, adjusting for the Rolodex
divestiture and the 1997 third quarter share repurchase and debt issuance, as if
all had occurred at the beginning of the respective periods.
On a pro forma basis, for the first quarter ended March 31, 1998, net income was
$2.8 million, or $0.66 per diluted share, compared to $1.7 million, or $0.40 per
diluted share, for the 1997 first quarter. Sales increased 10% for the 1998
first quarter to $117.3 million from $106.5 million in the 1997 first quarter.
Operating income increased 4% in the 1998 first quarter to $9.8 million,
compared to $9.4 million a year ago.
The Company's press release issued April 29, 1998 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 April 29, 1998.
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 CORPORATION
----------------------------
Registrant
Date: April 29, 1998 By: /s/ David A. Kauer
----------------------------
David A. Kauer
Vice President and Treasurer
3
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EXHIBIT INDEX
Exhibit No. Description
99 (a) Press release of the Company issued April 29, 1998.
4
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Exhibit 99(a)
Excellence in Electronics, Telecommunications, Automotive, Publishing
- --------------------------------------------------------------------------------
NEWS RELEASE
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE CONTACT: DAVID A. KAUER
VICE PRESIDENT AND
TREASURER
(614) 792-0468
INSILCO CORPORATION REPORTS HIGHER SALES
AND PRO FORMA EARNINGS
COLUMBUS, OHIO, APRIL 29, 1998 - INSILCO CORPORATION (NASDAQ:INSL)
today reported higher pro forma sales and earnings for its first quarter ended
March 31, 1998.
PRO FORMA RESULTS
The Company said that reported results were not comparable to the prior
year results due to the first quarter 1997 divestiture of the Rolodex business
unit and its 1997 third quarter refinancing and share repurchase. As a result,
the Company is reporting unaudited pro forma results, adjusting for the Rolodex
divestiture and the 1997 third quarter share repurchase and debt issuance, as if
all had occurred at the beginning of the respective periods.
On a pro forma basis, for the first quarter ended March 31, 1998, net
income was $2.8 million, or $.66 per diluted share, compared to $1.7 million, or
$.40 per diluted share, for the 1997 first quarter. Sales increased 10% for the
1998 first quarter to $117.3 million from $106.5 million in the 1997 first
quarter. Operating income increased 4% in the 1998 first quarter to $9.8
million, compared to $9.4 million a year ago. EBITDA (earnings before interest,
taxes, depreciation and amortization) rose 6% in the first quarter to $14.0
million compared to $13.3 million recorded a year ago.
REPORTED RESULTS
First quarter 1998 net income was $2.8 million, or $.66 per diluted
share, compared to $63.3 million, or $6.39 per diluted share, recorded in the
year ago first quarter. The 1997 first quarter includes a $57.8 million
after-tax gain, or $5.83 per diluted share, on the sale of the Rolodex business
unit. Sales for the 1998 first quarter were flat with 1997 at $117.3 million.
MERGER AGREEMENT
As previously reported in March, the Company and Donaldson, Lufkin &
Jenrette, Inc. (NYSE:DLJ)
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jointly announced that Insilco and an affiliate of DLJ Merchant Banking Partners
II had signed a definitive merger agreement. Under the terms of the agreement,
which is subject to shareholder and regulatory approval and other conditions,
Insilco shareholders will receive total consideration of $44.50 per share,
consisting of $42.98 in cash and 0.03419 shares of retained stock of the
surviving company. The Company said that it expects to mail proxy materials to
shareholders within the next thirty to sixty days.
CEO COMMENTS
"We're very pleased with the solid operating earnings improvement
posted by several of our business units. The Technologies Group posted a 10%
operating income gain on 7% sales growth and the Automotive Components Group
recorded a 2% operating income gain on 10% sales growth. Strong demand for both
wire and cable assemblies and automotive tubing contributed to the sales
improvement and increased operating earnings for the quarter," said Insilco
Chairman and CEO, Robert L. Smialek.
"We're also very encouraged by how the yearbook season is progressing
at Taylor Publishing. We are currently at the height of the yearbook production
season and Taylor is reporting significant improvement in its pre-press
operations, resulting in an overall cycle-time reduction."
Smialek said, "The recent merger announcement with DLJ Merchant Banking
reflects our continuing commitment to maximizing shareholder value and offers us
a strong financial and business partner to support our aggressive expansion and
acquisition plans. We look forward to completion of this transaction which will
enable us to focus our efforts on growing Insilco's businesses."
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. It is important to note that results could
differ materially from those projected in such forward looking statements.
Factors 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, changes in interest rates, failure to consummate the merger with
DLJ Merchant Banking Partners II, 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 for the year ended December 31, 1997. Copies of these
filings may be obtained by contacting the Company or the SEC.
Insilco Corporation, 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. It had revenues in 1997 of $539 million.
Investor Relations Contact: David A. Kauer, (614) 792-0468 or write to Insilco
Corporation, Investor Relations, 425 Metro Place North, Box 7196, Dublin, OH
43017 or call Melodye Demastus, Melrose Consulting (614) 771-0860.
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<TABLE>
INSILCO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Millions)
<CAPTION>
3/31/98 12/31/97 3/31/97
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<S> <C> <C> <C>
Assets
------
Current assets:
Cash and cash equivalents $ 7.8 10.7 115.5
Receivables, net 77.5 70.7 81.9
Inventories, net 72.6 60.7 70.5
Current portion of deferred taxes 0.4 0.3 2.7
Prepaid expenses 9.0 2.7 8.2
------ ----- -----
Total current assets 167.3 145.1 278.8
Property, plant and equipment, net 114.8 114.0 109.3
Goodwill, net 13.2 13.4 13.1
Deferred taxes 0.6 1.0 7.3
Other assets and deferred charges 27.5 29.2 20.4
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Total assets $323.4 302.7 428.9
====== ===== =====
Liabilities and Stockholders' Equity (Deficit)
----------------------------------------------
Current liabilities:
Current portion of long-term debt $ 1.1 1.7 24.1
Current portion of long-term obligations 5.1 5.4 6.6
Accrued interest payable 3.1 8.0 0.4
Accounts payable 39.1 39.8 34.9
Accrued expenses and other 61.6 50.6 74.4
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Total current liabilities 110.0 105.5 140.4
Long-term debt 267.7 256.1 144.6
Other long-term obligations 41.9 43.4 46.4
Stockholders' equity (deficit) (96.2) (102.3) 97.5
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Total liabilities and stockholders' equity (deficit) $323.4 302.7 428.9
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</TABLE>
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<TABLE>
INSILCO CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
(Amounts in millions, except per share data)
FIRST QUARTER
<CAPTION>
Actual Pro Forma
----------------------------- ----------------------------
Three Months Three Months Three Months Three Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sales $117.3 117.3 117.3 106.5
Gross profit 28.3 31.3 28.3 26.0
% of sales 24.1% 26.7% 24.1% 24.4%
SG&A 18.5 19.7 18.5 16.6
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Operating income 9.8 11.6 9.8 9.4
Interest expense, net (6.8) (3.2) (6.8) (7.2)
Gain on sale of Rolodex -- 95.0 -- --
Equity in net income of Thermalex 0.7 0.7 0.7 0.7
Other income (expense), net 0.6 (0.2) 0.6 (0.2)
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Income before income taxes 4.3 103.9 4.3 2.7
Income tax expense (1.5) (40.6) (1.5) (1.0)
------ ----- ----- -----
Income tax rate 34.9% 39.1% 34.9% 37.0%
Net income $ 2.8 63.3 2.8 1.7
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Basic earnings per share:
Net income per share $ 0.68 6.65 0.68 0.45
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Weighted average shares outstanding 4.1 9.5 4.1 3.8
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Diluted earnings per share:
Net Income per share $ 0.66 6.39 0.66 0.40
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Weighted average shares and share
equivalents outstanding 4.2 9.9 4.2 4.2
====== ===== ===== =====
Memo: Depreciation and amortization
expense included in earnings $ 4.2 4.1 4.2 3.9
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Capital Spending $ (5.8) (4.5) (5.8) (4.5)
====== ===== ===== =====
Trailing Four Quarter EBITDA $ 70.2 75.1 70.2 63.9
====== ===== ===== =====
</TABLE>
