EXHIBIT 99 (a)
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Excellence in Electronics and Telecommunications Components
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NEWS RELEASE
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FOR IMMEDIATE RELEASE
INVESTORS: MICHAEL R. ELIA MEDIA: MELODYE DEMASTUS
SR. VICE PRESIDENT & CFO MELROSE CONSULTING
(614) 791-3117 (614) 771-0860
INSILCO HOLDING CO. CONTINUES UPWARD EARNINGS TREND WITH HIGHER
SECOND QUARTER 2000 RESULTS FROM ONGOING OPERATIONS
Company Sees Continued Growth in Second Half of Year
COLUMBUS, OHIO, JULY 28, 2000 -- INSILCO HOLDING CO. (OTC BULLETIN
BOARD: INSL) today reported markedly improved sales and operating results for
its second quarter ended June 30, 2000. The Company said that results for its
automotive segment, which the Company recently announced it signed an agreement
to sell, is being reported as a discontinued operation and is therefore not
included in consolidated sales and EBITDA (earnings before interest, taxes,
depreciation, amortization and non-operating items). Included in the Company's
consolidated results for 1999 are the results of its Romac Metals and McKenica
operations, which were divested in mid-1999.
The Company reported a 65% increase in second quarter sales from its
core technologies businesses to $92.3 million from $55.8 million recorded last
year due to strong demand for custom assemblies and passive components, and
reflecting the benefit of sales from the Company's recently acquired custom
assembly business. Including sales from divested operations of $6.8 million in
the 1999 second quarter, consolidated sales for the current quarter increased
47% from $62.6 million recorded last year. On a pro forma basis, the Company's
second quarter sales increased 39% from the second quarter last year as
worldwide OEM demand increased for the Company's optical and networking
equipment assemblies and components.
For the current quarter, EBITDA from the technologies businesses more
than doubled to $13.3 million from $5.4 million recorded last year. The Company
reported that consolidated EBITDA for the current quarter increased 138% to
$13.3 million, compared to $5.6 million recorded last year, which included
EBITDA of $0.2 million from divested operations. A favorable sales mix for
higher-margin data grade connector products and improved margins on precision
stampings, as well as the contribution from its recent acquisition, all
contributed to the strong EBITDA performance. The Company's pro forma second
quarter EBITDA increased 41% from the second quarter last year due to the
favorable sales mix and from cost reduction initiatives.
DIVESTITURE/ACQUISITION
As reported on July 17, 2000, the Company announced that it has signed
a definitive agreement to sell to its majority shareholders the assets of its
automotive segment for proceeds of $147 million, subject to closing adjustments;
closing on a commitment for financing; and other customary terms and conditions.
-more-
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Proceeds from the transaction, which is expected to close before the
end of the third quarter, will be used to reduce bank debt and to gain financial
flexibility to execute the Company's acquisition strategy. The Company also
announced it signed a definitive agreement to acquire Precision Cable
Manufacturing, a Rockwall, Texas based provider of custom cable and wire
assemblies to telecommunications equipment OEMs.
CEO COMMENTS
David A. Kauer, Insilco President and CEO, said, "We continued to see
strong demand in the second quarter for our technology products, with pro forma
sales and adjusted EBITDA for the first half of 2000 up 38% and 54%,
respectively. We are experiencing strong sales and a strong book-to-bill ratio
in our connector business resulting from new product introductions and strong
market fundamentals in the electronic component industry. We are also very
pleased with the strong demand we are seeing for our optical equipment
assemblies. With the announcement last week of the planned divestiture of our
automotive segment and the acquisition of Precision Cable, we are well
positioned to capitalize on the growing telecommunications and computer
networking markets."
REPORTED RESULTS
After accounting for discontinued operations, the Company reported net
income of $0.7 million for its current second quarter compared to a net loss of
($5.2) million recorded a year ago in the second quarter. The loss available to
common shareholders for the second quarters of 2000 and 1999 was ($0.65) and
($4.23) per diluted share, respectively.
Insilco Holding Co., based in suburban Columbus, Ohio is a leading
global supplier of cable assemblies, wire harnesses, high-speed network
connectors, power transformers, precision metal stampings and value-added
services to the telecommunications, data processing, medical instrumentation and
automotive markets. Insilco has operations in the United States, Canada, Mexico,
Northern Ireland, Ireland, Puerto Rico and the Dominican Republic.
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 ABILITY TO DELIVER DOUBLE DIGIT SALES AND EARNINGS GROWTH; LONG-TERM
OUTLOOK; GROWTH PROSPECTS; THE ABILITY TO IMPROVE OPERATING EFFICIENCIES AND TO
FURTHER REDUCE EXPENSES. 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, 1999 AND SUBSEQUENT REPORTS ON FORM 10Q. COPIES OF THESE
FILINGS MAY BE OBTAINED BY CONTACTING THE COMPANY OR THE SEC.
Investor Relations Contact: Michael R. Elia, (614) 791-3117 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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TABLES TO FOLLOW
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INSILCO HOLDING CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions except per share data)
ACTUAL
<TABLE><CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales $ 92.3 $ 62.6 $ 170.7 $ 126.2
Cost of sales, excluding depreciation 66.6 47.4 123.8 95.1
Selling, general and administrative expenses,
excluding depreciation 12.4 9.6 22.9 19.8
Depreciation and amortization expense 3.6 2.7 6.7 5.2
Significant legal, professional and merger fees 0.3 2.4 0.3 2.5
Severance, writedown & other 0.3 3.5 0.8 3.7
Restructuring charge -- 5.4 -- 5.4
-------- -------- -------- --------
Operating income (loss) 9.1 (8.4) 16.2 (5.5)
Interest expense, net (13.3) (11.7) (25.6) (22.9)
Other income, net (0.1) -- (0.4) 0.3
-------- -------- -------- --------
Loss before income taxes, discontinued
operations and extraordinary item (4.3) (20.1) (9.8) (28.1)
Income tax benefit 0.2 5.7 1.6 8.7
-------- -------- -------- --------
Net loss before discontinued operations (4.1) (14.4) (8.2) (19.4)
Discontinued operations, net of tax:
Income from operations 4.8 9.2 6.1 13.3
Gain on disposal -- -- 43.4 --
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Income from discontinued operations 4.8 9.2 49.5 13.3
Net income (loss) 0.7 (5.2) 41.3 (6.1)
Preferred stock dividend (1.7) (1.5) (3.4) (2.9)
-------- -------- -------- --------
Net income (loss) available to common $ (1.0) $ (6.7) $ 37.9 $ (9.0)
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Earnings before other income, interest, taxes,
depreciation, amortization, and one-time items $ 13.3 $ 5.6 $ 24.0 $ 11.3
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Capital expenditures $ (1.6) $ (2.0) $ (3.5) $ (3.6)
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Income (loss) per share available to common $ (0.65) $ (4.23) $ 24.80 $ (5.74)
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</TABLE>
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INSILCO HOLDING CO.
Pro Forma(1) Condensed Consolidated Statements
of Earnings (Loss) before Income Taxes
(Unaudited)
(Amounts in millions except per share data)
PRO FORMA(1)
<TABLE><CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Custom Assemblies $ 46.6 $ 26.0 $ 92.8 $ 50.8
Precision Stampings 20.5 18.7 41.6 38.3
Passive Components 25.2 21.8 50.0 44.6
-------- -------- -------- --------
Total sales 92.3 66.5 184.4 133.7
Cost of sales, excluding depreciation 66.6 48.6 132.3 97.4
Selling, general and administrative expenses,
excluding depreciation 12.4 8.5 24.1 18.1
Depreciation and amortization expense 3.6 3.6 7.3 7.0
-------- -------- -------- --------
Operating income 9.7 5.8 20.7 11.2
Interest expense, net (9.8) (8.7) (19.1) (16.5)
Other income, net -- 0.1 (0.4) 0.3
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Earnings (loss) before income taxes (2) $ (0.1) $ (2.8) $ 1.2 $ (5.0)
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EBITDA (2) $ 13.3 $ 9.4 $ 28.0 $ 18.2
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(1) Pro forma results reflect (i) the acquisitions of EFI (January, 1999) and
TAT (February, 2000) and (ii) the divestitures of Taylor Publishing, the
Automotive Segment (under current definitive agreement), Romac and McKenica, in
each case, as if they occurred at the beginning of the relevant period, and
(iii) the exclusion of non-operating items.
(2) Earnings (loss) before income taxes and "EBITDA", which is defined as
earnings before interest expense (net), income taxes, depreciation and
amortization and non-operating items, are not intended to represent and should
not be considered more meaningful than, or an alternative to, operating income,
cash flows from operating activities or other measures of performance in
accordance with generally accepted accounting principles. EBITDA data are
included because we understand that such information is used by certain
investors as one measure of an issuer's historical ability to service debt.
While EBITDA is frequently used as a measure of operations and the ability to
meet debt service requirements, it is not necessarily comparable to other
similarly titled captions of other companies, or used in the Company's
debentures, credit or other similar agreements, due to potential inconsistencies
in the method of calculation.
<PAGE>
INSILCO HOLDING CO.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in millions)
<TABLE><CAPTION>
June 30, June 30, December 31,
2000 1999 1999
-------- -------- --------
<S> <C> <C> <C>
ASSETS
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Current assets:
Cash and cash equivalents $ 3.7 $ 10.2 $ 6.5
Receivables, net 61.2 38.9 40.2
Inventories, net 48.3 35.3 34.9
Current portion of deferred taxes 9.6 2.1 9.6
Net assets of Discontinued Operations 98.6 96.1 94.0
Prepaid expenses 2.1 2.3 2.0
-------- -------- --------
Total current assets 223.5 184.9 187.2
Property, plant and equipment, net 49.6 55.9 49.6
Goodwill, net 87.4 5.4 5.7
Deferred taxes -- 8.2 7.3
Other assets and deferred charges 25.5 32.7 30.3
-------- -------- --------
Total assets $ 386.0 $ 287.1 $ 280.1
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
Accounts payable $ 26.2 $ 18.0 $ 20.2
Accrued expenses and other 42.3 28.4 19.4
Accrued interest payable 6.7 6.1 7.5
Current portion of long-term debt 1.3 1.3 1.3
Current portion of long-term obligations 0.9 1.0 0.9
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Total current liabilities 77.4 54.8 49.3
Long-term debt 432.3 411.9 400.6
Other long-term obligations 35.0 28.8 29.3
Minority interest 0.1 0.1 0.1
Preferred stock 43.5 37.0 40.1
Stockholders' deficit (202.3) (245.5) (239.3)
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Total liabilities and stockholders' deficit $ 386.0 $ 287.1 $ 280.1
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