Insilco Holding Co. Posts Solid Growth in Q4
Sales and Earnings
COLUMBUS, Ohio, Feb. 23 Insilco Holding Co.
(OTC Bulletin Board: INSL) today reported results for its fourth quarter and
full year ended December 31, 2000. The Company said that results for its
automotive segment, which the Company divested during the 2000 third quarter
and its Taylor Publishing unit, which was divested in the 2000 first quarter,
are being reported as discontinued operations and are therefore not included
in consolidated sales and EBITDA (earnings before interest, taxes,
depreciation, amortization and non-operating items). Also, included in the
Company's reported consolidated results for full year 1999 are the results of
the Company's Romac Metals and McKenica operations, which were divested in the
third quarter of 1999. These results are excluded on a pro forma basis.
FOURTH QUARTER RESULTS
Fourth quarter reported sales increased by more than 68% to $100.7 million
from $59.8 million recorded last year, reflecting the benefit of sales from
the Company's recently acquired custom assembly businesses, and to a lesser
degree, higher demand for the Company's data grade connector products. On a
pro forma basis to include acquisitions in the prior year's results, the
Company's fourth quarter sales increased 13% from the fourth quarter last
year. Quarterly pro forma sales performance benefited from 18% sales growth in
the Company's custom assembly segment and 21% sales growth for data grade
connectors, reflecting solid demand from networking and communications
customers for the Company's integrated connector modules or MagJack
components. Sales from the Company's precision stamping segment, which stamps
high tolerance, engineered electrical contacts, were down 9% from a year ago
reflecting softer sales of electronic and battery components.
For the current quarter, reported EBITDA more than tripled to
$14.9 million from $4.9 million recorded last year. Performance from its
recent acquisitions, and to a lesser degree, a favorable sales mix for higher-
margin data grade connector products, improved margins on precision stamped
parts and custom cable assemblies all contributed to the strong EBITDA growth.
The Company's pro forma fourth quarter EBITDA, which includes $5.7 million of
expenses for acquisition-related incentives, increased to $15.4 million from
$14.7 million recorded in the fourth quarter last year. Excluding the
acquisition-related incentives, pro forma EBITDA would have been $21.1 million
in the current quarter.
David A. Kauer, Insilco President and CEO, said, "Our fourth quarter
performance reflects strong, but slowing demand from our major
telecommunications customers for our data grade connectors and custom cable
assemblies. Our custom cable assembly acquisitions performed above our
expectations this past year, with each of our new units nearly doubling both
their sales and EBIDTA for the year. Although demand for our precision stamped
electronic components was slow, this unit has done an excellent job in
lowering costs, and in fact, experienced more than a 3-percentage point
improvement in their operating margin for the fourth quarter."
Kauer continued, "Overall, we are very pleased with this year's
achievements, both strategically and financially. We have focused our capital
and resources on the most rapidly growing segments of the telecom and
electronics markets, acquired low cost production facilities and reduced our
operating costs through our process improvement efforts. We are also excited
to have completed our merger with InNet, a leading developer and manufacturer
of a broad range of magnetic interface products serving the networking,
telecommunications and computer industries, on January 9, 2001 and look
forward to more fully integrating our distinct technological expertise and
production capabilities."
OUTLOOK
"We are currently experiencing slower order rates from our major
telecommunications customers as they face longer than expected delays in
spending by their U.S. customers and in working down their excessive inventory
levels. Although it is too early to estimate the impact that these market
conditions may have on our first quarter or the full year, our first quarter
will be a considerable challenge and on a pro forma basis sales and EBITDA
will be down from a year ago. Having said that, we remain confident that our
market positions and strategies are sound and will enable us to capitalize on
the market opportunities ahead of us now and over the next 2-3 years," Kauer
concluded.
REPORTED RESULTS
The net loss for the Company's current quarter was ($2.9) million compared
to net income of $0.2 million recorded a year ago in the fourth quarter. The
loss available to common shareholders for the fourth quarters of 2000 and 1999
was ($4.7) million, or ($3.03) per diluted share, and ($1.4) million, or
($0.88) per diluted share, respectively.
Insilco Holding Co., through its wholly-owned subsidiary Insilco
Technologies, Inc., is a leading global manufacturer and developer of a broad
range of magnetic interface products, cable assemblies, wire harnesses, fiber
optic assemblies and subassemblies, high-speed data transmission connectors,
power transformers and planar magnetic products, and highly engineered,
precision stamped metal components. Insilco maintains more than 1.4 million
square feet of manufacturing space and has 23 locations throughout the United
States, Canada, Mexico, China, Northern Ireland, Ireland and the Dominican
Republic serving the telecommunications, networking, computer, electronics,
automotive and medical markets. For more information visit our sites at
http://www.insilco.com or http://www.insilcotechnologies.com .
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.
INSILCO HOLDING CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions, except share and per share data)
Actual
Three Months Twelve Months
Ended Ended
December 31, December 31,
2000 1999 2000 1999
Sales $100.7 59.8 $370.8 248.0
Cost of sales, excluding depreciation 72.6 46.2 266.9 188.0
Selling, general and administrative
expenses, excluding
depreciation 13.2 8.7 49.7 36.7
Depreciation and amortization expense 4.5 2.5 14.8 10.2
Significant legal, professional and
merger fees 0.1 0.2 0.5 2.6
Severance, writedowns & other 0.6 0.2 1.4 4.2
Restructuring charge - (0.1) - 5.8
Operating income 9.7 2.1 37.5 0.5
Interest expense, net (12.0) (12.1) (50.5) (47.3)
Other income, net (0.7) (0.2) (1.0) 10.4
Loss before income taxes,
extraordinary
item and discontinued
operations (3.0) (10.2) (14.0) (36.4)
Income tax benefit 3.9 5.9 5.2 16.8
Income (loss) before
extraordinary item and
discontinued operations 0.9 (4.3) (8.8) (19.6)
Extraordinary Item, net of tax (0.2) - (3.1) -
Net income (loss) before
discontinued operations 0.7 (4.3) (11.9) (19.6)
Discontinued operations, net of tax:
Income (loss) from operations (0.3) 4.5 5.9 21.5
Gain (loss) on disposal (3.3) - 63.6 -
Income (loss) from discontinued
operations (3.6) 4.5 69.5 21.5
Net income (loss) (2.9) 0.2 57.6 1.9
Preferred stock dividend (1.8) (1.6) (7.0) (6.0)
Net income (loss) available to
common $(4.7) (1.4) $50.6 (4.1)
Earnings before other income,
interest, taxes, depreciation,
amortization, and one-time items $14.9 4.9 $54.2 23.3
Capital expenditures $(3.8) (2.1) $(9.9) (7.2)
Basic Shares 1,499 1,534 1,517 1,558
Basic income (loss) per share
available to common:
Loss from continuing operations $(0.65) (3.81) $(10.41) (16.40)
Basic income (loss) per share $(3.14) (0.88) $33.41 (2.61)
Diluted Shares 1,552 1,534 1,517 1,558
Diluted income (loss) per share
available to common:
Loss from continuing operations $(0.63) (3.81) $(10.41) (16.40)
Diluted income (loss) per share $(3.03) (0.88) $33.41 (2.61)
INSILCO HOLDING CO.
Pro Forma(a) Condensed Consolidated Statements of Earnings (Loss) before
Income Taxes
(Unaudited)
(Amounts in millions except per share data)
Pro Forma(a)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2000 1999 2000 1999
Custom Assemblies $55.8 47.1 $240.9 156.2
Precision Stampings 17.9 19.6 78.2 77.3
Passive Components 27.0 22.4 105.1 88.5
Total sales 100.7 89.1 424.2 322.0
Cost of sales, excluding depreciation 72.1 64.8 305.1 235.2
Selling, general and administrative
expenses, excluding depreciation 13.2 9.6 52.1 35.7
Depreciation and amortization expense 4.5 4.2 17.3 16.6
Operating income 10.9 10.5 49.7 34.5
Interest expense, net (12.0) (12.2) (50.8) (48.0)
Other income, net (0.6) (0.1) (0.9) 10.1
Earnings (loss) before income
taxes (b) $(1.7) (1.8) $(2.0) (3.4)
EBITDA (b) $15.4 14.7 $67.0 51.1
(a) Pro forma results reflect (i) the acquisitions of EFI (January, 1999),
TAT (February, 2000) and Precision Cable (August, 2000), and (ii) the
divestitures of Taylor Publishing, the Automotive Segment, Romac and
McKenica, in each case, as if they occurred at the beginning of the
relevant period, and (iii) the exclusion of non-operating expense
items.
(b) 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.
INSILCO HOLDING CO.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in millions)
December 31, December 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $28.1 $6.4
Receivables, net 63.4 40.2
Inventories, net 58.8 34.9
Current portion of deferred taxes 2.4 9.6
Net assets of Discontinued
Operations - 107.6
Prepaid expenses 5.4 2.1
Total current assets 158.1 200.8
Property, plant and equipment, net 58.3 49.6
Goodwill, net 121.3 5.7
Deferred taxes 4.2 7.3
Other assets and deferred charges 17.7 16.8
Total assets $359.6 $280.2
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $28.6 $20.2
Accrued expenses and other 34.4 17.2
Accrued interest payable 6.5 7.5
Estimated income taxes 23.9 1.3
Current portion of long-term debt 4.9 1.3
Current portion of long-term
obligations 0.9 0.9
Total current liabilities 99.2 48.4
Long-term debt 375.0 400.6
Other long-term obligations 24.5 31.0
Minority interest - 0.1
Preferred stock 47.1 40.1
Stockholders' deficit (186.2) (240.0)
Total liabilities and
stockholders' deficit $359.6 $280.2
