Insilco Holding Co. Reports Second Quarter Results
6 August 1999
Insilco Holding Co. Reports Second Quarter Results
COLUMBUS, Ohio, Aug. 5 -- Insilco Holding Co.
(OTC Bulletin Board: INSL) today reported sales and operating results for its
second quarter and six months ended June 30, 1999.
Sales were up 5% to $178.4 million for the 1999 second quarter, compared
to $170.0 million recorded in the year ago second quarter. For the six months
ended June 30, 1999 and 1998, sales were $305.3 million and $287.3 million,
respectively.
The Company reported EBITDA (earnings before interest, taxes,
depreciation, amortization, other income, one-time charges and restructuring
charges, plus cash dividends received from Thermalex, the Company's 50% owned
joint venture, "EBITDA") of $23.8 million for the 1999 second quarter,
compared to $23.0 million recorded in the 1998 second quarter. For the first
six months of 1999, EBITDA was $40.2 million, compared to $38.9 million
recorded in the first six months of 1998.
The Company also reported a net loss of ($5.2) million for the 1999 second
quarter compared to net income of $4.4 million for the 1998 second quarter.
For the six months of 1999, the Company reported a net loss of ($6.1) million,
compared to net income of $7.2 million recorded in the first six months of
1998. The decrease in net income for the first six months of 1999 resulted
principally from increased interest expense of $9.8 million as a result of the
third quarter 1998 recapitalization and merger and second quarter 1999 charges
of $8.8 million related to the corporate office restructuring and the
previously announced closure of the Company's McKenica division. Net cash
charges resulting from these restructuring items were approximately
$2.0 million.
BUSINESS DISCUSSION
The Company's Automotive Components Group reported 3% sales growth in the
1999 second quarter to $56.2 million, from $54.4 million reported in the year
earlier second quarter. EBITDA for the Group was $8.2 million and
$8.7 million for the second quarters of 1999 and 1998, respectively.
Quarterly results reflected higher sales of specialty heat exchangers,
aluminum tubing and transmission components. However, continued weak demand
for industrial radiators and aftermarket heat exchanger tubing resulted in
lower EBITDA for the Group.
The Company's Technologies Group reported 14% sales growth in the 1999
second quarter to $55.8 million compared to $48.8 million recorded in the 1998
second quarter. Second quarter 1999 sales included $10.8 million from the
Company's EFI and European cable assembly acquisitions which were completed
after the second quarter of 1998. EBITDA for the Technologies Group was
$7.2 million in the 1999 second quarter, compared to $7.9 million recorded in
the 1998 second quarter. Excluding the impact of the acquisitions, second
quarter revenues were lower than the previous year, reflecting continuing weak
demand from the electronics market and certain telecommunications customers.
Despite the lower sales in the quarter, the Company indicated it was seeing
encouraging signs of improving demand in its markets for the second half of
the year, particularly for cable assemblies and power transformers.
Sales at Taylor Publishing were $59.6 million in the 1999 second quarter,
compared to $59.5 million recorded in the year ago second quarter. For its
seasonally important second quarter, Taylor's EBITDA increased over 30% to
$9.9 million, compared to EBITDA of $7.5 million in the year ago second
quarter, reflecting improved operating performance.
CEO COMMENTS
David A. Kauer, Insilco President and CEO, said, "We were very pleased
with the substantial operating earnings improvement at Taylor Publishing,
during its important peak yearbook season. The process improvements
implemented over the past year by Taylor's new management team resulted in
significantly improved on-time delivery performance, increased productivity
and lower costs."
Kauer continued, "While specialty heat exchangers and worldwide tubing
sales were higher in the second quarter, sales of higher margin industrial
radiators and related components remained soft. In the Technologies Group,
market conditions, including customer inventory corrections and continued
pricing pressures, negatively impacted performance. We are, however,
beginning to see improvement in the level of quote and orders activity across
our product lines in this segment, and in the industrial radiator market as
well."
Kauer concluded, "We continued to make progress during the second quarter
in achieving our goal of significantly reducing operating expenses during
1999, as evidenced by our announcement late in the quarter regarding the
restructuring of our corporate staff, which is expected to generate
approximately $3.5 million in annualized savings. We continue to rationalize
our manufacturing facilities to better utilize low cost facilities and to
consolidate facilities where practical. In addition, as part of our EFI
integration, we have removed $1.5 million in annualized cost and have
consolidated our two precision stamping operations in El Paso, Texas. We also
continue to explore potential divestitures of business units that do not meet
our long-term strategic goals."
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. The Company had 1998
revenues in excess of $535 million.
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 the electronics markets; the
ability to improve operating efficiencies and to further reduce expenses,
possible acquisitions and divestitures. 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/A for the year ended December 31, 1998 and
the Company's report on Form 10-Q for March 31, 1999. Copies of these filings
may be obtained by contacting the Company or the SEC.
Investor Relations Contact: Stephen J. Smith, 614-791-3101 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 per share data)
For the Quarter Ended
Actual Pro forma(a)
June 30, June 30,
1999 1998 1998
Sales $178.4 $170.0 $170.0
Cost of sales, excluding
depreciation (1999 includes
$3.2 of restructuring
expenses) 123.9 115.1 115.1
Selling, general and
administrative expenses,
excluding depreciation (1999
includes $.2 of restructuring
expenses) 34.3 32.3 32.3
Depreciation and
amortization expense 6.9 6.4 6.4
Significant legal, professional
and merger fees 2.5 2.0 0.7
Restructuring charge 5.5 -- --
Operating income 5.3 14.2 15.5
Interest expense, net (12.1) (6.9) (11.5)
Equity in net income of Thermalex 1.0 0.7 0.7
Other income, net 0.1 1.4 1.4
Income (loss) before
income taxes (5.7) 9.4 6.1
Income tax benefit
(expense) 0.5 (5.0) (2.2)
Net income (loss) (5.2) 4.4 3.9
Preferred stock dividend (1.5) -- (1.4)
Net income (loss) available
to common $(6.7) $4.4 $2.5
Cash dividend from Thermalex $-- $-- $--
Earnings before other income,
interest, taxes, depreciation,
amortization, and one-time
items, plus cash dividend
from Thermalex $23.8 $23.0 $23.0
Capital expenditures $(4.5) $(5.1) $(5.1)
Income (loss) per share
available to common $(3.98) $1.06 $1.62
(a) 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.
INSILCO HOLDING CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions except per share data)
For Year to Date
Actual Pro forma (a)
June 30, June 30,
1999 1998 1998
Sales $305.3 $287.3 $287.3
Cost of sales, excluding
depreciation (1999 includes
$3.2 of restructuring
expenses) 219.9 200.7 200.7
Selling, general and
administrative expenses,
excluding depreciation
(1999 includes $.2 of
restructuring expenses) 51.9 49.7 49.7
Depreciation and
amortization expense 11.8 10.6 10.6
Significant legal, professional
and merger fees 2.5 2.3 1.0
Restructuring charge 5.5 -- --
Operating income 13.7 24.0 25.3
Interest expense, net (23.3) (13.8) (22.9)
Equity in net income of Thermalex 1.9 1.5 1.5
Other income, net 0.3 2.0 2.0
Income (loss) before
income taxes (7.4) 13.7 5.9
Income tax benefit (expense) 1.3 (6.5) (2.2)
Net income (loss) (6.1) 7.2 3.7
Preferred stock dividend (2.9) -- (2.7)
Net income (loss) available
to common $(9.0) $7.2 $1.0
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 $40.2 $38.9 $38.9
Capital expenditures $(7.7) $(10.9) $(10.9)
Income (loss) per share
available to common $(5.51) $1.74 $0.61
(a) 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.
INSILCO HOLDING CO.
(Unaudited)
(Amounts in millions)
Supplemental Segment Data
Quarter Ended Year to Date
June 30, June 30,
1999 1998 1999 1998
Sales
Industrial Businesses:
Technologies Group $55.8 $48.8 $111.2 $99.0
Automotive Components 56.2 54.4 113.1 108.9
Total Industrial
Businesses 112.0 103.2 224.3 207.9
Specialty Publishing 59.6 59.5 66.1 64.5
Other 6.8 7.3 14.9 14.9
Total Sales $178.4 $170.0 $305.3 $287.3
EBITDA
Industrial Businesses:
Technologies Group $7.2 $7.9 $14.2 $16.0
Automotive Components 8.2 8.7 16.4 17.2
Total Industrial
Businesses 15.4 16.6 30.6 33.2
Specialty Publishing 9.9 7.5 9.5 7.3
Other 0.2 0.6 0.9 1.0
Unallocated Corporate (1.7) (1.7) (3.7) (3.9)
Thermalex Cash Dividend -- -- 2.9 1.3
Total EBITDA $23.8 $23.0 $40.2 $38.9
Sales Growth vs. Prior Year
Industrial Businesses:
Technologies Group 14.3% -- 12.3% --
Automotive Components 3.3% -- 3.9% --
Total Industrial
Businesses 8.5% -- 7.9% --
Specialty Publishing 0.2% -- 2.5% --
Other -6.8% -- 0.0% --
Total Sales 4.9% -- 6.3% --
EBITDA % of Sales
Industrial Businesses:
Technologies Group 12.9% 16.2% 12.8% 16.2%
Automotive Components 14.6% 16.0% 14.5% 15.8%
Total Industrial
Businesses 13.8% 16.1% 13.6% 16.0%
Specialty Publishing 16.6% 12.6% 14.4% 11.3%
Other 2.9% 8.2% 6.0% 6.7%
Unallocated Corporate -- -- -- --
Thermalex Cash Dividend -- -- -- --
Total EBITDA 13.3% 13.5% 13.2% 13.5%
INSILCO HOLDING CO.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in millions)
June 30, June 30, December 31,
1999 1998 1998
Assets
Current assets:
Cash and cash equivalents $10.2 $7.0 $7.4
Receivables, net 99.2 88.6 84.2
Inventories, net 65.4 61.9 64.6
Current portion of
deferred taxes 2.1 -- 6.2
Prepaid expenses 4.5 3.2 4.4
Total current assets 181.4 160.7 166.8
Property, plant and
equipment, net 123.7 113.3 114.7
Goodwill, net 16.8 13.1 13.6
Deferred taxes 8.2 -- 1.9
Investment in unconsolidated
subsidiaries 10.9 10.1 9.0
Other assets and
deferred charges 20.1 16.9 21.3
Total assets $361.1 $314.1 $327.3
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $37.3 $36.8 $34.5
Accrued expenses and other 64.6 48.2 58.2
Accrued interest payable 6.1 7.1 4.2
Current portion of deferred
taxes -- 0.9 --
Current portion of
long-term debt 1.3 -- 1.3
Current portion of
long-term obligations 1.0 3.5 1.9
Total current liabilities 110.3 96.5 100.1
Long-term debt 411.9 264.8 383.1
Other long-term obligations 47.3 42.3 46.3
Deferred taxes -- 1.3 --
Minority interest 0.1 -- --
Preferred stock 37.0 -- 34.1
Stockholders' deficit (245.5) (90.8) (236.3)
Total liabilities and
stockholders' deficit $361.1 $314.1 $327.3