-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V4t8+vWhQLRULZD5NVrJMcDiAj+ud0fR0POkJNbxhuDJWPdiMAv7XKiIA10ms2HK R02vA7jKuzTaNwEsTpaIMA== 0000950152-97-003892.txt : 19970515 0000950152-97-003892.hdr.sgml : 19970515 ACCESSION NUMBER: 0000950152-97-003892 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSILCO CORP/DE/ CENTRAL INDEX KEY: 0000863204 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 060635844 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22098 FILM NUMBER: 97604590 BUSINESS ADDRESS: STREET 1: 425 METRO PL N STE 500 CITY: DUBLIN STATE: OH ZIP: 43017 BUSINESS PHONE: 6147920468 10-Q 1 INSILCO CORPORATION FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 0-22098 INSILCO CORPORATION (Exact name of registrant as specified in its charter) Delaware 06-0635844 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 425 Metro Place North Fifth Floor Dublin, Ohio 43017 (Address of principal executive offices) (Zip Code) 614-792-0468 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (X) Yes ( ) No Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. (X) Yes ( ) No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of May 9, 1997, 9,503,874 shares of common stock, $.001 par value, were outstanding. 2 INSILCO CORPORATION AND SUBSIDIARIES INDEX TO FORM 10-Q
Page ---- Part I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets 3 - March 31, 1997 (unaudited) - December 31, 1996 Condensed Consolidated Income Statements 4 - Three months ended March 31, 1997 (unaudited) - Three months ended March 31, 1996 (unaudited) Condensed Consolidated Statement of Stockholders' Equity 5 - Three months ended March 31, 1997 (unaudited) Condensed Consolidated Statements of Cash Flows 6 - Three months ended March 31, 1997 (unaudited) - Three months ended March 31, 1996 (unaudited) Notes to Unaudited Condensed Consolidated Financial Statements 7 Independent Auditors' Review Report 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 14 Signatures 15
2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INSILCO CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands)
(unaudited) March 31, December 31, 1997 1996 -------------- ------------ ASSETS Current assets: Cash and cash equivalents $115,523 3,481 Trade receivables, net 71,375 73,874 Other receivables 10,493 8,499 Inventories, net 70,500 66,385 Deferred tax asset 2,710 29,859 Prepaid expenses and other current assets 11,853 7,010 -------------- ------------ Total current assets 282,454 189,108 Property, plant and equipment, net 109,282 114,379 Deferred tax asset 7,263 7,542 Investment in Thermalex 9,266 8,550 Goodwill, net 13,133 13,659 Other assets and deferred charges 11,122 18,762 -------------- ------------ Total assets $432,520 352,000 ============== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $24,057 24,272 Current portion of other long-term obligations 6,602 6,661 Accounts payable 34,923 37,984 Income taxes payable 15,248 3,596 Accrued expenses and other 70,710 68,639 -------------- ------------ Total current liabilities 151,540 141,152 Long-term debt, excluding current portion 144,643 136,770 Other long-term obligations, excluding current portion 38,877 40,676 Stockholders' equity 97,460 33,402 -------------- ------------ Total liabilities and stockholders' equity $432,520 352,000 ============== ============
Note: The condensed consolidated balance sheet at December 31, 1996 has been derived from the audited balance sheet as of that date. See accompanying notes to unaudited condensed consolidated financial statements. 3 4 INSILCO CORPORATION AND SUBSIDIARIES Condensed Consolidated Income Statements (Unaudited) (In thousands, except share and per share data)
Three Months Three Months Ended Ended March 31, March 31, 1997 1996 ------------ ------------ Sales $ 117,341 122,449 Cost of products sold 82,789 84,840 Depreciation and amortization 4,065 3,116 Selling, general and administrative expenses 18,932 21,193 ------------ ------------ Operating income 11,555 13,300 ------------ ------------ Other income (expense): Interest expense (3,643) (4,512) Interest income 489 297 Gain on sale of Rolodex 95,001 - Other income, net 510 305 ------------ ------------ 92,357 (3,910) ------------ ------------ Income before income taxes 103,912 9,390 Income tax expense (40,593) (3,244) ------------ ------------ Net income $ 63,319 6,146 ============ ============ Net income per common share and common share equivalent $ 6.39 0.62 ============ ============ Weighted average number of common shares and common share equivalents 9,912,314 9,954,245 ============ ============
See accompanying notes to unaudited condensed consolidated financial statements. 4 5 INSILCO CORPORATION AND SUBSIDIARIES Condensed Consolidated Statement of Stockholders' Equity For the Three Months Ended March 31, 1997 (unaudited) (In thousands)
Common Stock Additional Retained Cumulative Total Par Value Paid-in Earnings Treasury Translation Stockholders' $0.001 Capital (Deficit) Stock Adjustment Equity ------------ ---------- --------- -------- ----------- ------------- Balance at December 31, 1996 $10 81,496 (37,115) (10,745) (244) 33,402 Net income - - 63,319 - - 63,319 Purchase of treasury stock - - - (1,204) - (1,204) Shares issued upon exercise of stock options - 2,406 - - - 2,406 Tax benefit from exercise of stock options - 1,312 - - - 1,312 Foreign currency translation - - - - (1,775) (1,775) ------------ ---------- --------- -------- ----------- ------------- Balance at March 31, 1997 $10 85,214 26,204 (11,949) (2,019) 97,460 ============ ========== ========= ======== =========== =============
See accompanying notes to unaudited condensed consolidated financial statements. 5 6 INSILCO CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Three Months Three Months Ended Ended March 31, March 31, 1997 1996 ------------- ----------- Cash flows from operating activities: Net income $ 63,319 6,146 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 4,065 3,116 Deferred tax expense 27,956 2,303 Gain on sale of Rolodex (95,001) - Other noncash charges and credits (388) 136 Change in operating assets and liabilities: Receivables (10,552) 8,982 Inventories (12,162) (17,578) Payables and other 18,928 (5,463) Other long-term liabilities (377) (880) ----------- ---------- Net cash used in operating activities (4,212) (3,238) ------------ ---------- Cash flows from investing activities: Proceeds from sale of Rolodex 112,610 - Acquisitions of businesses, net of cash acquired - (5,129) Capital expenditures (4,505) (4,099) Other investing activities 579 109 ------------ ---------- Net cash provided by (used in) investing activities 108,684 (9,119) ------------ ---------- Cash flows from financing activities: Proceeds from debt borrowings 8,440 15,200 Proceeds from sale of stock 1,777 276 Payment of prepetition liabilities (1,708) (1,651) Purchase of treasury stock (576) (2,359) Retirement of long-term debt (161) (4,107) ------------ ---------- Net cash provided by financing activities 7,772 7,359 ------------ ---------- Effect of exchange rate changes on cash (202) - ------------ ---------- Net increase (decrease) in cash and cash equivalents 112,042 (4,998) Cash and cash equivalents at beginning of period 3,481 9,894 ------------ ---------- Cash and cash equivalents at end of period $115,523 4,896 ============ ========== Interest paid $ 3,821 4,807 ============ ========== Income taxes paid $ 183 119 ============ ==========
See accompanying notes to unaudited condensed consolidated financial statements. 6 7 INSILCO CORPORATION AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements March 31, 1997 (1) BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all determinable adjustments have been made which are considered necessary to present fairly the financial position and the results of operations and cash flows at the dates and for the periods presented. (2) DIVESTITURE On March 5, 1997, the Company sold its Rolodex office products business for $112,610,000 which is net of transaction costs including $1,755,000 of fees payable to Goldman Sachs & Co., an affiliate of the Company's principal stockholders. The Company expects to substantially offset the cash taxes resulting from the sale by utilizing its usable tax loss carryforwards. The Company is considering various alternatives for the use of the proceeds including a possible one time distribution of the proceeds to shareholders or a repurchase of shares. (3) CASH & CASH EQUIVALENTS The Company has placed into a restricted account $110,000,000 of the proceeds from the sale of the Rolodex office products business which has been pledged as security against the Company's bank loans. Approximately $10,454,000 was invested in a money market fund with Goldman Sachs & Co. at the end of the first quarter of 1997. Cash equivalents of $99,546,000 were invested in various commercial paper at the end of the first quarter. Under an amendment to the Company's bank credit agreement, application has been deferred until a date not later than December 30, 1997. (4) INVENTORIES Inventories consisted of the following at March 31, 1997 (in thousands): Raw materials and supplies $25,660 Work-in-process 35,390 Finished goods 9,450 ------- Total inventories $70,500 =======
(5) EARNINGS PER SHARE When dilutive, stock options are included as share equivalents using the treasury stock method. The weighted average number of common shares and common share equivalents used for calculation of the primary earnings per share as of March 31, 1997 and 1996, were 9,912,314 and 9,954,245, respectively. 7 8 INSILCO CORPORATION AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements March 31, 1997 In March 1997, the Financial Accounting Standards Board released Statement of Financial Accounting Standards ("SFAS") SFAS No. 128, Earnings Per Share, which simplifies the method for calculating earnings per share. As defined in SFAS No. 128 "basic earnings per share" is determined using only the weighted average of the shares issued and reserved for issuance, while "diluted earnings per share" includes stock options (when dilutive) as share equivalents using the treasury stock method. If SFAS No. 128 had been adopted as of March 31, 1997, basic earnings per share for the first quarter of 1997 would have been $6.65 per share and diluted earnings per share would have been $6.39 per share. (6) CONTINGENCIES The Company is implicated in various claims and legal actions arising in the ordinary course of business. In addition, certain claims filed in the Bankruptcy Court are in dispute. The Company has recorded these disputed claims at the estimated settlement amounts ultimately expected to be allowed following the Bankruptcy Court litigation. It is reasonably possible that the estimated settlement amounts could change in the near term but it is not expected that such a change would have a material effect on the financial statements in the near term. Those claims or liabilities not subject to Bankruptcy Court litigation will be addressed in the ordinary course of business and be paid in cash as expenses are incurred. The United States Federal Trade Commission ("FTC") is investigating the Company's acquisition of the automotive tubing business assets of Helima-Helvetion International, Inc. ("HHI") to determine if the acquisition violated federal antitrust laws. The Company has responded to various FTC requests for information concerning the relevant market and competitive conditions in that market. At this time it is not known whether the investigation will result in the issuance of a complaint, or if such complaint is issued, the relief that will be sought or obtained. Revenues for the first quarter of 1997 associated with the automotive tubing business acquired from HHI were $1,207,000 and the tangible net assets at March 31, 1997 were $7,693,000. In the opinion of management, the ultimate disposition of the matters discussed above will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity. At March 31, 1997, all unresolved bankruptcy settlements are included in the shares reserved to satisfy claims. (7) ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results are likely to differ from those estimates and assumptions, but management does not believe such differences will materially affect the Company's financial position, results of operations or cash flows. 8 9 INSILCO CORPORATION AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements March 31, 1997 (8) PRO FORMA RESULT OF OPERATIONS The following pro forma financial information presents consolidated net sales and results of operations as if the sale of the Rolodex office products business (see Note 2) had occurred at the beginning of the periods presented exclusive of nonrecurring items directly attributable to the transaction. The pro forma results of operations are as follows (in thousands, except per share data):
Three Months Ended March 31, --------------------------- 1997 1996 -------- ------- Net sales $106,544 106,266 Net income 4,786 4,273 Net income per common share and share equivalent 0.48 0.43
9 10 INDEPENDENT AUDITORS' REVIEW REPORT THE BOARD OF DIRECTORS INSILCO CORPORATION We have reviewed the condensed consolidated balance sheet of Insilco Corporation and subsidiaries as of March 31, 1997, the related condensed consolidated statements of earnings and cash flows for the three-month periods ended March 31, 1997 and 1996 and the condensed consolidated statement of stockholders' equity for the three-month period ended March 31, 1997. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Insilco Corporation and subsidiaries as of December 31, 1996, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated January 31, 1997, except as to the second paragraph in Note 3, which is as of March 5, 1997, we expressed an unqualified opinion on those consolidated financial statements. We did not audit the 1996 financial statements of Thermalex, Inc., a 50 percent owned investee company which is accounted for under the equity method. The 1996 financial statements of Thermalex, Inc. were audited by other auditors whose report has been furnished to us, and in our opinion, insofar as it relates to the amounts included for Thermalex, Inc., was based solely on the report of the other auditors. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1996, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Columbus, Ohio April 18, 1997 KPMG Peat Marwick, LLP 10 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company is a diversified manufacturer of automotive component products, telecommunications and electronics and is a supplier of specialty publications. The Company's Automotive Components Group serves primarily the automotive markets through Thermal Components and Steel Parts operating units and manufactures stainless steel tubing used in non-automotive applications through its Romac Metals operating unit. The Technologies Group serves primarily the telecommunications and components markets through its Stewart Connector Systems, Stewart Stamping, Signal Transformer and Escod Industries operating units. The Specialty Publishing Group consists of Taylor Publishing (a publisher of yearbooks and other specialty publications). The Company completed the divestiture of its Office Products business with the sale of the Rolodex office products business on March 5, 1997 for a net sales price of $112,610,000. The Company recognized a pretax gain on the sale totaling $95,001,000 in the first quarter of 1997. In the fourth quarter of 1996, the Company had previously divested its computer accessories business and the Rolodex electronics product line. Summarized sales and operating income (loss) by business segment for the three months ended March 31, 1997 compared to the corresponding period in 1996 are set forth in the following table (in thousands) and discussed below:
Three Months Ended March 31, ------------------ 1997 1996 -------- ------- SALES Automotive Components Group $56,183 49,301 Technologies Group 47,094 44,183 Office Products/Specialty Publishing Group: Specialty Publishing 3,267 4,669 Office Products 10,797 24,296 -------- ------- 14,064 28,965 -------- ------- $117,341 122,449 ======== ======= OPERATING INCOME (LOSS) Automotive Components Group $5,676 5,620 Technologies Group 4,974 6,158 Office Products/Specialty Publishing Group Specialty Publishing (999) (1,071) Office Products 1,926 2,614 -------- ------- 927 1,543 -------- ------- Unallocated Corporate (22) (21) -------- ------- $11,555 13,300 ======== =======
11 12 SALES AND OPERATING INCOME. Total net sales decreased by approximately 4% ($5,108,000) in the first quarter of 1997 compared to the corresponding period in 1996 due to the divestiture of the Office Products business in three separate transactions completed in late 1996 and the first quarter of 1997. Sales of the Office Products business totaled $10,797,000 in the first quarter of 1997 compared to $24,296,000 in the first quarter of 1996. Excluding the Office Products business, the Company's sales increased 9% ($8,391,000) in the first quarter of 1997 compared to the first quarter of 1996 due to 14% ($6,882,000) and 7% ($2,911,000) increases in the Automotive Components Group and Technologies Group, respectively. Partially offsetting these increases was a 30% ($1,402,000) decline in the Specialty Publishing Group's sales in its traditionally seasonally slow first quarter. The 14% increase in the Automotive Component's Group's sales was due to an increase in the sales of automotive heat exchangers and related components and equipment, including sales of $7,807,000 from the Company's two aluminum tubing subsidiaries which were acquired in July 1996. Partially offsetting this growth was continued weakness in the domestic automotive radiator aftermarket. Steel Parts reported an 8% gain in sales of transmissions and other stamped steel parts due to higher content per car of Steel Parts' transmission components and diversification of its product line. The Technologies Group's sales increase of 7% is due to growth in sales of precision stampings by Stewart Stamping, resulting from increased customer demand, and wire and cable assemblies by Escod Industries, reflecting continued expansion of its customer base. In addition, Stewart Connector's modular data interconnect product sales increased 5%. Partially offsetting these improvements was a decline in the sales of power transformers by Signal Transformer. In a seasonally slow quarter, Taylor Publishing sales decreased 30% ($1,402,000) in the first quarter of 1997 from the corresponding period of the prior year primarily due to timing differences in the delivery of yearbooks. (See Seasonality.) Operating income decreased to $11,555,000 in the first quarter of 1997 from $13,300,000 in the first quarter of 1996 due to the divestiture of the Office Products business and lower operating margins in the Technologies Group. Operating income in the first quarter of 1997 included $1,926,000 from the divested Office Products business compared to $2,614,000 in the first quarter of 1996. The Automotive Components Group=s operating income in the first quarter of 1997 compared to the corresponding period of 1996 increased from $5,620,000 to $5,676,000. Increased operating income at the Company's stamped steel parts business and stainless steel tubing business units was largely offset by lower operating margins at the Company's 1996 acquisitions and the weak domestic automotive radiator aftermarket. The Technologies Group's operating income in the first quarter of 1997 compared to the corresponding period of 1996 decreased from $6,158,000 to $4,974,000. Operating income was impacted by lower margins on power transformers, a higher sales mix of lower margin wire and cable assemblies, and competitive pricing pressures in the connector market. In addition, Stewart Connector incurred a one-time $592,000 research and development expense related to a new type of fiber-optic connector. In the Specialty Publishing Group, Taylor Publishing's operating loss of $999,000 in the first quarter of 1997 was relatively flat with the prior year as improved operating margins offset the decline in sales. OTHER INCOME (EXPENSE). Other income for the first quarter of 1997 included a pretax gain on the sale of the Rolodex office products business totaling $95,001,000. Other income for the first quarters of 1997 and 1996 included $717,000 and $613,000, respectively, of equity income from the Company's unconsolidated joint venture, Thermalex, which manufactures extruded aluminum tubing primarily for automotive air conditioning condensers. Interest expense decreased 19% ($869,000) in the first quarter of 1997 compared to the first quarter of 1996 due to a lower effective interest rate and lower debt balances. 12 13 INCOME TAX EXPENSE. The Company's effective income tax rate increased from 34.5% at March 31, 1996 to 39.1% at March 31, 1997 primarily because of the greater proportion of domestic source income resulting from the sale of the Rolodex business. The Company expects to substantially offset the cash taxes resulting from the sale of Rolodex by utilizing its usable tax loss carryforwards. CASH FLOWS USED IN OPERATING ACTIVITIES. Operations used $4,212,000 cash in the first quarter of 1997 as compared to a cash usage of $3,238,000 in the first quarter of 1996. Cash flows from operations decreased from the prior year due to lower cash flow from operating earnings partially offset by improved working capital management. CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES. In 1997, the Company sold its Rolodex office products business for a net sales price of $112,610,000. In 1996, the Company acquired businesses serving the automotive, heavy truck and industrial manufacturing radiator replacement market for a net purchase price of $5,129,000. The Company's other current investments consist principally of capital expenditures which totaled $4,505,000 and $4,099,000 during the quarters ended March 31, 1997 and March 31, 1996, respectively. CASH FLOWS FROM FINANCING ACTIVITIES. In the first quarter of 1997, the Company borrowed a net amount of $8,440,000 on its revolving credit facility. In addition, the Company paid $1,708,000 of prepetition liabilities in the first quarter of 1997. In the first quarter of 1996, the Company made payments totaling $4,000,000 on its term loan and borrowed a net amount of $15,200,000 on its revolving credit facility. The Company also repurchased an additional 74,500 shares of its common stock for $2,359,000. In addition, the Company paid $1,651,000 of prepetition liabilities in the first quarter of 1996. SEASONALITY. The Company's yearbook publishing business, Taylor Publishing, is highly seasonal, with a majority of sales occurring in the second and third quarters of the year. Taylor receives significant customer advance deposits in the second half of the year. The Company's other businesses are not highly seasonal. IMPACT OF INFLATION AND CHANGING PRICES. Inflation and changing prices have not significantly affected the Company's operating results or markets. LIQUIDITY. At March 31, 1997, the Company's cash and cash equivalents and net working capital amounted to $115,523,000 and $130,914,000, respectively, compared to $3,481,000 and $47,956,000, respectively, at March 31, 1996. The significant increases over December 31, 1996 levels are due to the receipt of the net proceeds from the sale of the Rolodex office products business totaling $112,610,000. The Company has placed into a restricted account $110,000,000 of these proceeds which have been pledged as security against the Company's bank loans. Under an amendment to the Company's bank credit agreement, the application of these funds has been deferred until a date not later than December 30, 1997. The Company is considering various alternatives for the use of the proceeds including a possible one-time distribution of the proceeds to shareholders or a repurchase of shares. The borrowing ability under the Company's revolving credit facility as of the end of the first quarter of 1997 was $70,663,000, including $40,403,000 available for letters of credit. 13 14 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 10(i) First Amendment to the Insilco Corporation 1993 Long-term Incentive Plan Exhibit 27 Financial Data Schedule (b) Reports on Form 8-K A report, dated March 5, 1997, on Form 8-K was filed during the quarter ending March 31, 1997, pursuant to Item 2 of that form. The following financial statements were filed as part of that report: (1) Pro Forma Financial Information. Pro Forma Condensed Balance Sheet as of December 31, 1997 Pro Forma condensed Consolidated Statements of Operations for the Year Ended December 31, 1996 14 15 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 14, 1997 By: /s/ Philip K. Woodlief ----------------------- Philip K. Woodlief * Corporate Controller; Principal Accounting Officer * In his capacity as Corporate Controller, Mr. Woodlief is duly authorized to sign this report on behalf of the registrant. 15 16 INSILCO CORPORATION FORM 10-Q EXHIBIT INDEX
Exhibit No. Exhibit Page No. - ----------- ------- -------- 10(i) First Amendment to the Insilco Corporation 1993 Long-term Incentive Plan 27 Financial Data Schedule
EX-10.I 2 EXHIBIT 10I 1 FIRST AMENDMENT TO THE INSILCO CORPORATION 1993 LONG-TERM INCENTIVE PLAN BACKGROUND A. Insilco Corporation, a Delaware corporation, (the "Corporation") previously adopted the Insilco Corporation 1993 Long-Term Incentive Plan (the "Plan") for the benefit of certain employees. B. The Corporation desires to amend the Plan to (a) provide for full vesting upon a change in control, and (b) protect participants from certain corporate events that may cause awards to become diluted or less valuable. AMENDMENTS 1. Section 12 of the Plan shall be amended by adding the following language to the end of such Section: Notwithstanding any other provision of this Plan to the contrary, if a Change in Control (as defined below) occurs, each Award outstanding under this Plan will become immediately 100% vested and exercisable with respect to the total number of shares of Common Stock subject to such Award. As used herein, a "Change in Control" means any of the following: (i) the acquisition, directly or indirectly, by any person (as defined under Section 13(d) of the Securities Exchange Act of 1934) within any twelve-month period of securities of the Company representing an aggregate of 25 percent or more of the combined voting power of the Company's then outstanding securities; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof before the end of such period unless the election of each Director who was not a Director at the beginning of such period was approved in advance by Directors representing at least two-thirds of the Directors then in office who were Directors at the beginning of such period; or (iii) consummation of (A) a merger, consolidation, or other business combination which would result in the common stock of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof representing at least 60 percent of the common stock of the Company or such surviving entity or parent or affiliate thereof outstanding immediately after such merger, consolidation, or business combination, or (B) a plan of complete liquidation of the Company, or (C) an agreement for the sale or disposition by the Company of a majority (in value) of the Company's assets; or (iv) the occurrence of any other event or circumstance which is not covered by (i) through (iii) above which the Board determines affects control of the 2 Company and, in order to implement the purposes of this Plan as set forth above, adopts a resolution that such event or circumstance constitutes a Change in Control for the purposes of this Plan. For purposes of determining a Change in Control on any given date, a partner in Water Street Corporate Recovery Fund I, L.P. ("Water Street") will be deemed to own that number of voting shares of the Company determined by multiplying such partner's pro rata partnership interest in Water Street by the number of voting shares of the Company owned by Water Street as of such date. 2. Section 14(b) of the Plan shall be amended by deleting the first sentence of such Section and replacing it with the following: In the event of any subdivision or consolidation of outstanding shares of Common Stock, or declaration of a dividend or distribution payable in shares of Common Stock, cash, or other property, or capital reorganization, reclassification, merger or other transaction involving an increase or reduction in the number of outstanding shares of Common Stock, the Committee shall make proportional substitutions or adjustments to appropriately reflect such event and to prevent the dilution of rights granted in all Awards under the Plan. The Committee shall use its discretion to determine the specific manner in which the outstanding Awards are to be adjusted, including but not limited to proportionally substituting or adjusting (i) the number of shares of Common Stock reserved under this Plan and covered by outstanding Awards denominated in Common Stock or units of Common Stock; (ii) the exercise or other price in respect of such Awards; and (iii) the appropriate Fair Market Value and other price determinations for such Awards. After the Committee makes such a substitution or adjustment, the Committee shall notify the affected Participants of the new terms and conditions of their Awards. 3. The provisions contained in this Amendment shall apply to all currently outstanding and future awards under the Plan. All other provisions of the Plan shall remain unchanged. EX-27 3 EXHIBIT 27
5 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 115,523 0 74,476 (3,101) 70,500 282,454 159,539 (50,257) 432,520 151,540 0 10 0 0 97,450 432,520 117,341 117,341 82,789 82,789 0 137 3,643 103,912 40,593 63,319 0 0 0 63,319 6.39 0
-----END PRIVACY-ENHANCED MESSAGE-----