Insilco Holding Co. Reports Improved Q4 and Full Year 1999 Results
22 February 2000
Insilco Holding Co. Reports Improved Fourth Quarter and Full Year 1999 Results
Completes Acquisition of TAT Technologies
COLUMBUS, Ohio, Feb. 21 -- Insilco Holding Co.
(OTC Bulletin Board: INSL) today reported sales and operating results for the
fourth quarter and full year ended December 31, 1999. The Company said that
results for its Taylor Publishing business unit, which was divested in
February 2000, are being reported as discontinued operations and are therefore
not included in consolidated sales and adjusted EBITDA (earnings before
interest, taxes, depreciation, amortization and non-operating items plus
regular cash dividends from Thermalex, the Company's 50% owned joint venture).
The Company is also providing comparative results including and excluding
Romac Metals and McKenica, which were divested in mid-1999.
Sales from the Company's core automotive and technologies businesses
increased 24% in the 1999 fourth quarter to $118.8 million from $96.0 million
a year ago. The increase was a result of stronger demand from
telecommunications, electronics and industrial OEMs, as well as the benefit of
$18.3 million in new sales from acquisitions completed in late 1998 and 1999.
Consolidated sales for the 1999 fourth quarter, including $7.8 million in 1998
fourth quarter sales from divestitures, increased 14% to $118.8 million,
compared to $103.8 million recorded in the 1998 fourth quarter.
For the full year 1999 sales from the Company's core automotive and
technologies businesses increased 14% to $458.3 million from $402.7 million
last year. Full year 1999 sales benefited from $54.4 million in sales from
acquisitions completed in late 1998 and 1999. Consolidated sales for 1999
increased 10% to $476.4 million from $434.3 million recorded in the comparable
period in 1998. Full year 1999 and 1998 consolidated sales included
$18.1 million and $31.6 million, respectively, from divestitures completed in
the last half of 1999.
Adjusted EBITDA from ongoing operations for the fourth quarter 1999
increased 23% to $14.2 million from $11.5 million for the fourth quarter 1998.
The Company reported that consolidated adjusted EBITDA for the 1999 fourth
quarter increased 17% to $14.2 million, compared to $12.1 million recorded in
the 1998 fourth quarter, which included $0.6 million in 1998 from the
Company's divested operations.
Full year 1999 adjusted EBITDA from ongoing operations increased 6% to
$57.6 million from $54.1 million for 1998. For the twelve months ended
December 31, 1999 and 1998, the Company reported consolidated adjusted EBITDA
of $58.7 million compared to $56.4 million, respectively. Consolidated
adjusted EBITDA for 1999 and 1998 included $1.1 million and $2.3 million,
respectively, from divested operations.
ACQUISITION
In a separate action, the Company said that it completed the previously
announced acquisition of T.A.T. Technology ("TAT"), a Montreal-based provider
of cable and wire assemblies. TAT serves original equipment manufacturers
(OEMs) in the rapidly growing Optical Networking and Dense-Wavelength Division
Multiplexing ("DWDM") segments of the telecommunications industry. TAT had
1999 revenues of approximately $58 million. Financial terms of the transaction
were not disclosed.
BUSINESS DISCUSSION
The Company's Automotive Components Group reported sales of $59.0 million
for the 1999 fourth quarter, compared to $51.0 million reported in the year
earlier fourth quarter. Fourth quarter sales included $6.4 million from the
Company's third quarter acquisition of Thermal Transfer Products, Ltd.
Adjusted EBITDA was $9.3 million and $7.4 million for the fourth quarters of
1999 and 1998, respectively. The improved performance for the Group reflects
higher margins on worldwide tubing sales and the positive contribution from
Thermal Transfer.
The Company also reported that its 50/50 joint venture with Mitsubishi
Aluminum, Thermalex, paid a special dividend of $5.2 million in the 1999
fourth quarter, bringing total regular and special cash dividends paid in 1999
to $10.4 million. The Company said that demand remained strong in 1999 for
Thermalex' micro-extruded tubing with the JV posting 20% sales growth in 1999.
The Company also recorded $0.4 million and $3.0 million of equity income for
the 1999 fourth quarter and full year, which is reported separately after
operating income in its consolidated financial statements.
The Company's Technologies Group reported sales of $59.8 million in the
1999 fourth quarter compared to $45.0 million recorded in the 1998 fourth
quarter. Sales increased across most product categories and the 1999 fourth
quarter benefited from $11.8 million in sales from acquisitions completed
during or after the 1998 fourth quarter. Adjusted EBITDA for the Group was
$5.9 million in the 1999 fourth quarter, compared to $5.7 million recorded in
the year ago fourth quarter. Adjusted EBITDA was negatively impacted by a
$0.6 million litigation settlement relating to a 1994 claim at the Company's
stamping operations. Excluding this settlement, adjusted EBITDA for the 1999
fourth quarter increased 14% to $6.5 million from $5.7 million recorded in the
year earlier fourth quarter. The Group's operating performance was positively
impacted by substantially improved power transformer margins, offset largely
by a sales mix shift towards lower margin data grade connectors and temporary
production inefficiencies at certain wire and cable assembly facilities.
CEO COMMENTS
David A. Kauer, Insilco President and CEO, said, "1999 marked a year of
significant change for Insilco. Several key acquisitions and divestitures were
completed to redeploy our resources to faster growing technology and heat
exchanger markets. With the majority of our acquisition integration activities
behind us, we expect even greater contributions from these acquisitions in
2000."
"Equally important, we have positioned our core businesses to capitalize
on key market trends, such as the expanded use of outsourcing and preference
for large global suppliers by major OEMs and an increasing demand for aluminum
tubing. In addition, we intensified our efforts to reduce our cost structure,
including a mid-year corporate restructuring, which is expected to reduce
annualized corporate overhead by $3.2 million."
"We will continue our aggressive focus on enhancing our core businesses'
competitive positions and maximizing operating efficiencies in 2000. This is
evidenced by the recent sale of our non-core specialty publishing unit, Taylor
Publishing. The proceeds from this sale have been used to acquire TAT, which
improves our competitive position in the rapidly growing telecommunications
industry. We see numerous growth opportunities for the markets in which we
have chosen to participate and believe we are well positioned for higher
growth in sales and earnings in 2000 and beyond," Kauer concluded.
REPORTED RESULTS
The Company reported net income of $0.2 million for its fourth quarter
ended December 31, 1999, compared to a net loss of ($8.0) million recorded a
year ago in the fourth quarter. The loss available to common shareholders for
the fourth quarter of 1999 and 1998 was ($0.94) and ($5.93) per diluted share,
respectively.
For the full year 1999, the Company recorded net income of $2.0 million
compared to a net loss of ($18.1) million recorded in the year ago twelve
months. The loss available to common shareholders for the full year 1999 and
1998 was ($2.81) and ($6.35) per diluted share, respectively.
Insilco Holding Co., based in suburban Columbus, Ohio, is a diversified
manufacturer of industrial components. The Company's business units serve the
telecommunications, electronics, automotive and other industrial markets. The
Company had 1999 consolidated revenues in excess of $476 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; 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-KA for the year ended December 31, 1998 and
the Company's reports on Form 10-Q for March 31, June 30, and September 30,
1999. Copies of these filings may be obtained by contacting the Company or
the SEC.
Investor Relations Contact: Michael R. Elia, Executive VP & CFO
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 .
TABLES TO FOLLOW
INSILCO HOLDING CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions except per share data)
For the Quarter Ended
Actual
December 31,
1999 1998
Sales $ 118.8 $ 103.8
Cost of sales, excluding depreciation 90.4 78.0
Selling, general and
administrative expenses,
excluding depreciation 14.2 13.7
Depreciation and amortization expense 5.0 4.3
Significant legal, professional
and merger fees 0.2 0.3
Severance, writedown & other 1.0 0.6
Restructuring charge (0.1) --
Operating income 8.1 6.9
Interest expense, net (12.1) (10.9)
Equity in net income of Thermalex 0.4 0.7
Other income, net (0.3) 1.5
Loss before income taxes, discontinued
operations and extraordinary item (3.9) (1.8)
Income tax benefit 3.8 1.1
Net loss before discontinued operations
and extraordinary item (0.1) (0.7)
Extraordinary item, net of tax -- (5.9)
Net loss before discontinued operations (0.1) (6.6)
Income (loss) from discontinued operations,
net of tax 0.3 (1.4)
Net income (loss) 0.2 (8.0)
Preferred stock dividend (1.6) (1.4)
Net loss available to common $ (1.4) $ (9.4)
Regular cash dividend from Thermalex $ -- $ --
Earnings before other income, interest,
taxes, depreciation, amortization,
and one-time items, plus regular
cash dividend from Thermalex $ 14.2 $ 12.1
Capital expenditures $ (5.1) $ (3.9)
Loss per share available to common $ (0.94) $ (5.93)
INSILCO HOLDING CO.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in millions except per share data)
For Year to Date
Actual
December 31,
1999 1998
Sales $ 476.4 $ 434.3
Cost of sales, excluding depreciation
(1999 includes $3.2 of restructuring
expenses) 363.7 321.6
Selling, general and administrative
expenses, excluding depreciation
(1999 includes $0.2 of restructuring
expenses) 56.8 57.6
Depreciation and amortization expense 19.5 16.8
Significant legal, professional and
merger fees 2.7 26.8
Severance, writedown & other 5.2 2.4
Restructuring charge 6.4 --
Operating income 22.1 9.1
Interest expense, net (47.3) (32.3)
Equity in net income of Thermalex 3.0 2.9
Other income, net 10.5 4.7
Loss before income taxes (11.7) (15.6)
Income tax benefit 6.5 1.9
Net loss before discontinued operations
and extraordinary item (5.2) (13.7)
Extraordinary item, net of tax -- (5.9)
Net loss before discontinued operations (5.2) (19.6)
Income from discontinued operations,
net of tax 7.1 1.5
Net income (loss) 1.9 (18.1)
Preferred stock dividend (6.0) (2.0)
Net loss available to common $ (4.1) $ (20.1)
Regular cash dividend from Thermalex $ 2.8 $ 1.3
Earnings before other income, interest,
taxes, depreciation, amortization, and
one-time items, plus regular cash
dividend from Thermalex $ 58.7 $ 56.4
Capital expenditures $ (15.1) $ (18.0)
Loss per share available to common $ (2.81) $ (6.35)
INSILCO HOLDING CO.
(Unaudited)
(Amounts in millions)
Supplemental Segment Data
Quarter Ended Year to Date
December 31, December 31,
1999 1998 1999 1998
Sales
Industrial Businesses:
Technologies Group $ 59.8 $ 45.0 $230.0 $189.8
Automotive Components 59.0 51.0 228.3 212.9
Total Industrial
Businesses 118.8 96.0 458.3 402.7
Other -- 7.8 18.1 31.6
Total Sales $118.8 $103.8 $476.4 $434.3
EBITDA
Industrial Businesses:
Technologies Group $ 5.9 $ 5.7 $ 28.2 $ 28.4
Automotive Components 9.3 7.4 32.5 32.1
Total Industrial
Businesses 15.2 13.1 60.7 60.5
Other -- 0.6 1.1 2.3
Unallocated Corporate (1.0) (1.6) (5.9) (7.7)
Regular Thermalex Cash
Dividend -- -- 2.8 1.3
Total EBITDA $ 14.2 $ 12.1 $ 58.7 $ 56.4
Sales Growth vs. Prior Year
Industrial Businesses:
Technologies Group 32.9% -- 21.2% --
Automotive Components 15.7% -- 7.2% --
Total Industrial
Businesses 23.8% -- 13.8% --
Other -100.0% -- -42.7% --
Total Sales 14.5% -- 9.7% --
EBITDA % of Sales
Industrial Businesses:
Technologies Group 9.9% 12.7% 12.3% 15.0%
Automotive Components 15.8% 14.5% 14.2% 15.1%
Total Industrial
Businesses 12.8% 13.6% 13.2% 15.0%
Other -- 7.7% 6.1% 7.3%
Total EBITDA 12.0% 11.7% 12.3% 13.0%
INSILCO HOLDING CO.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in millions)
December 31, December 31,
1999 1998
Assets
Current assets:
Cash and cash equivalents $ 6.6 $ 7.5
Receivables, net 79.5 71.4
Inventories, net 58.3 53.0
Current portion of deferred taxes 9.6 6.1
Net assets of Discontinued Operations 0.2 6.0
Prepaid expenses 2.7 2.5
Total current assets 156.9 146.5
Property, plant and equipment, net 109.6 101.3
Goodwill, net 25.7 14.5
Deferred taxes 7.3 1.9
Investment in unconsolidated subsidiaries 4.5 9.0
Other assets and deferred charges 18.0 18.0
Total assets $ 322.0 $ 291.2
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 39.2 $ 30.5
Accrued expenses and other 24.7 25.4
Accrued interest payable 7.5 4.2
Current portion of deferred taxes 1.3 1.6
Current portion of long-term debt 1.3 1.3
Current portion of long-term
obligations 0.9 1.9
Total current liabilities 74.9 64.9
Long-term debt 400.6 383.1
Other long-term obligations 45.8 45.4
Deferred taxes 1.6 --
Minority interest 0.1 --
Preferred stock 40.1 34.1
Stockholders' deficit (241.1) (236.3)
Total liabilities and
stockholders' deficit $ 322.0 $ 291.2