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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: MAY 4, 1999
INSILCO CORPORATION
(Exact Name of Registrant as specified in its charter)
Delaware 0-22098 06-0635844
-------- ------- ----------
(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.
Insilco Holding Co.'s press release issued May 4, 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 Insilco Holding Co.
issued May 4, 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 CORPORATION
------------------------------------
Registrant
Date: May 11, 1999 By: /s/ David A. Kauer
------------------------------------
David A. Kauer
Vice President and Chief Financial
Officer
3
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EXHIBIT INDEX
Exhibit No. Description
99 (a) Press release of Insilco Holding Co. issued May 4, 1999.
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
CHIEF FINANCIAL OFFICER
(614) 792-0468
INSILCO HOLDING CO. REPORTS FIRST QUARTER 1999 RESULTS
COLUMBUS, OHIO, MAY 4, 1999 - INSILCO HOLDING CO. (OTC BULLETIN
BOARD:INSL) today reported sales and results for its first quarter ended March
31, 1999.
Sales were up 8% to $126.9 million for the 1999 first quarter, compared
to $117.3 million recorded in the year earlier first quarter. First quarter 1999
sales included $9.3 million from three acquisitions, Eyelets For Industry
("EFI"), a manufacturer of precision metal stampings, which was completed in
January 1999, and two Ireland-based cable assembly manufacturers which were
completed during the second half of 1998.
The Company reported EBITDA (earnings before interest, taxes,
depreciation, amortization, non-recurring income and expense, plus cash
dividends received from Thermalex, the Company's 50% owned joint venture) of
$16.4 million for the 1999 first quarter, compared to $16.0 million recorded in
the 1998 first quarter. First quarter 1999 results included $0.3 million of
EBITDA from the acquisitions.
BUSINESS DISCUSSION
The Company's Automotive Components Group reported 4% sales growth in
the 1999 first quarter to $56.9 million, from $54.5 million reported in the year
earlier first quarter. EBITDA for the Group was $8.2 million and $8.6 million
for the first quarters of 1999 and 1998, respectively. The Group operating
performance reflects improved operating margins on sales of transmission
components and specialty vehicle heat exchangers. However, continued weak demand
for industrial radiators and aftermarket heat exchanger tubing resulted in
slightly lower EBITDA for the Group.
Thermalex, the Company's 50/50 joint venture with Mitsubishi Aluminum,
reported a 14% sales increase in the 1999 first quarter and $1.0 million of
equity income compared to $0.7 million in the first quarter last year. The
Company also reported that it received a $2.9 million cash dividend from
Thermalex in the first quarter, compared to a dividend of $1.3 million received
in the first quarter last year.
The Technologies Group reported sales of $55.4 million in the 1999
first quarter compared to $50.2 million last year. The 1999 first quarter
included sales of $9.3 million from the EFI and Ireland acquisitions.
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Data-grade connector sales were up 9%, reflecting higher sales of new products.
However, combined sales of power transformers and precision stamped parts were
down 14% in the quarter reflecting continuing weak demand world-wide for passive
electronic components. EBITDA for the Technologies Group was $7.0 million in the
quarter, compared to $8.1 million last year. First quarter 1999 results include
EBITDA of $0.3 million from the acquisitions. Performance was negatively
impacted by lower sales of precision stamped parts and power transformers, as
well as a small loss at the recently acquired Ireland facilities, which was
expected as those operations are integrated into the Group and production is
ramped up.
First quarter 1999 sales at Taylor Publishing were $6.5 million in its
seasonally weak first quarter, compared to $5.0 million recorded in the year
earlier first quarter. Taylor's EBITDA was ($0.4) million for the 1999 first
quarter, compared to EBITDA of ($0.2) million in the year ago first quarter,
primarily due to timing of the recognition of certain expenses.
The Company also reported sales of $8.1 million and $7.6 million in the
first quarter of 1999 and 1998, respectively, from its Other Business segment,
which includes operating units that fall below the quantitative reporting
thresholds for FAS 131 segment reporting. EBITDA for the segment was $0.7
million in the 1999 first quarter, compared to $0.4 million recorded in the year
earlier first quarter. The improvement in EBITDA was largely the result of a
smaller loss compared to a year ago recorded by the Company's McKenica division,
which manufactures tube mill capital equipment.
The company also noted that its cash flow from operating activities for
the 1999 first quarter was ($0.6) million, versus ($11.2) million in the year
earlier first quarter, primarily the result of improved working capital
management.
CEO COMMENTS
Robert L. Smialek, Insilco Chairman and CEO, said, "We were encouraged
by the higher operating margin earned on sales of transmission components in the
quarter. However, lower demand for both industrial radiators and higher margin
automotive aftermarket products overshadowed this performance improvement. As we
look forward, we are beginning to see some improvement in the level of business
activity in our industrial radiator markets, which have been weak since the
first quarter of last year. Also, we believe the slowdown in aftermarket sales
is temporary.
"We continue to be pleased with the solid growth of connector products
sales despite the continuing weakness in the global electronics markets.
Unfortunately, this weakness has substantially impacted sales of power
transformers and precision metal stampings. In response, we are continuing to
move forward with our restructuring initiatives aimed at reducing the cost
structure for the entire Technologies Group."
"At Taylor Publishing, current indications are that we are on target
for a solid yearbook season, both from an operational and a profitability
viewpoint. We look forward to reporting improved results for Taylor's seasonally
important second quarter."
Smialek concluded, "We continue to make progress in achieving our goal
of significantly reducing operating expenses in 1999. As evidence, the Company
has eliminated approximately 6% of its salaried positions since the 1998 third
quarter and we expect to achieve further reductions in our cost structure
throughout 1999. We are also pursuing a number of activities aimed at lowering
our outstanding debt."
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REPORTED RESULTS
The Company reported a net loss of ($2.3) million applicable to common
shares, for its first quarter ended March 31, 1999, compared to net income of
$2.8 million and pro forma net income of ($1.6) million, recorded a year ago in
the first quarter. Loss applicable to common shares for the first quarter of
1999 was ($1.47) per share compared to income applicable to common shares of
$0.66 per diluted share and ($1.00) pro forma per share in the prior year.
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 either the automotive
parts or the electronics markets; the ability to improve operating efficiencies
and to further reduce expenses, possible acquisitions and divestitures, and
prospects for a strong second quarter at Taylor Publishing. 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, 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 for the year ended December 31, 1998. Copies of the
Company's SEC filings may be obtained by contacting the Company or the SEC.
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. It had revenues in 1998 of $535.6 million.
Investor Relations Contact: David A. Kauer or Stephen Smith, (614) 792-0468 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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<TABLE>
INSILCO HOLDINGS CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions)
<CAPTION>
FOR THE QUARTER ENDED
Actual Pro forma(1)
March 31, March 31,
---------------- ---------
1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
Sales $126.9 $117.3 $117.3
Cost of sales, excluding depreciation 96.0 85.6 85.6
Selling, general and administrative expenses,
excluding depreciation 17.4 17.0 17.0
Depreciation and amortization expense 4.9 4.2 4.2
Significant legal expenses -- 0.3 0.3
Restructuring expenses 0.3 0.4 0.4
------ ------ ------
Operating income 8.3 9.8 9.8
Interest expense, net (11.2) (6.8) (11.3)
Equity in net income of Thermalex 1.0 0.7 0.7
Other income (expense), net 0.1 0.6 0.6
------ ------ ------
Income (loss) before income taxes (1.8) 4.3 (0.2)
Income tax benefit (expense) 0.9 (1.5) --
------ ------ ------
Net income (loss) (0.9) 2.8 (0.2)
Preferred stock dividend (1.4) -- (1.4)
====== ====== ======
Net income (loss) available to common $ (2.3) $ 2.8 $ (1.6)
====== ====== ======
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 $ 16.4 $ 16.0 $ 16.0
====== ====== ======
Capital expenditures $ 3.3 $ 5.8 $ 5.8
====== ====== ======
Income (loss) per share available to common $(1.47) $ 0.66 $(1.00)
====== ====== ======
</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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<TABLE>
INSILCO HOLDINGS CO.
(Unaudited)
(Amounts in millions)
SUPPLEMENTAL SEGMENT DATA
<CAPTION>
Quarter Ended
March 31,
-----------------
1999 1998
---- ----
<S> <C> <C>
SALES
- -----
Industrial Businesses:
Technologies Group $ 55.4 $ 50.2
Automotive Components 56.9 54.5
------ ------
Total Industrial Businesses 112.3 104.7
Specialty Publishing 6.5 5.0
Other 8.1 7.6
------ ------
Total Sales $126.9 $117.3
====== ======
EBITDA
- ------
Industrial Businesses:
Technologies Group $ 7.0 $ 8.1
Automotive Components 8.2 8.6
------ ------
Total Industrial Businesses 15.2 16.7
Specialty Publishing (0.4) (0.2)
Other 0.7 0.4
Unallocated Corporate (2.0) (2.2)
Thermalex Cash Dividend 2.9 1.3
------ ------
Total EBITDA $ 16.4 $ 16.0
====== ======
SALES GROWTH VS. PRIOR YEAR
- ---------------------------
Industrial Businesses:
Technologies Group 10.4%
Automotive Components 4.4%
------
Total Industrial Businesses 7.3%
Specialty Publishing 30.0%
Other 6.6%
------
Total Sales 8.2%
======
EBITDA % OF SALES
- -----------------
Industrial Businesses:
Technologies Group 12.6% 16.1%
Automotive Components 14.4% 15.8%
------ ------
Total Industrial Businesses 13.5% 16.0%
Specialty Publishing -6.2% -4.0%
Other 8.6% 5.3%
Unallocated Corporate -- --
Thermalex Cash Dividend -- --
------ ------
Total EBITDA 12.9% 13.6%
====== ======
</TABLE>
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<TABLE>
INSILCO HOLDINGS CO.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in millions)
<CAPTION>
3/31/99 3/31/98 12/31/98
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<S> <C> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents $ 8.5 7.8 7.4
Receivables, net 86.6 77.5 84.2
Inventories, net 81.4 72.6 64.6
Current portion of deferred taxes 2.1 0.4 6.2
Prepaid expenses 11.5 9.0 4.4
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Total current assets 190.1 167.3 166.8
Property, plant and equipment, net 117.8 114.8 114.7
Goodwill, net 23.9 13.2 13.6
Deferred taxes 6.7 0.6 1.9
Investment in unconsolidated subsidiaries 9.9 9.4 9.0
Other assets and deferred charges 21.3 18.1 21.3
------- ----- ------
Total assets 369.7 323.4 327.3
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LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 39.3 39.1 34.5
Accrued expenses and other 73.5 61.6 58.2
Accrued interest payable 2.6 3.1 4.2
Current portion of long-term debt 1.3 1.1 1.3
Current portion of long-term obligations 1.0 5.1 1.9
------- ----- ------
Total current liabilities 117.7 110.0 100.1
Long-term debt 408.9 267.7 383.1
Other long-term obligations 46.0 41.9 46.3
Preferred stock 35.5 -- 34.1
Stockholders' deficit (238.4) (96.2) (236.3)
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Total liabilities and stockholders' deficit $ 369.7 323.4 327.3
======= ===== ======
</TABLE>
