Company Press Release
SOURCE: Walter Industries, Inc.
Walter Industries Reports Improved Fiscal 2000 First Quarter Results
-- EPS from Continuing Operations Rises 20% to $0.24 --
TAMPA, Fla., Sept. 27 /PRNewswire/ -- Walter Industries, Inc. (NYSE: WLT - news) today reported results for its fiscal 2000 first quarter ended August 31, 1999.
Income from continuing operations amounted to $12.1 million compared with $10.8 million in the prior year first quarter, a 12% increase. Earnings per share from continuing operations rose 20% to $0.24 compared with $0.20 in the prior year.
Kenneth E. Hyatt, Chairman and Chief Executive Officer, said, ''Walter Industries is off to a strong start in fiscal 2000, consistent with our stated goal of 15-20% annual growth in earnings per share. We also remain intensely focused on enhancing the quality of our earnings -- as evidenced by the improvement in the Company's operating margin for the quarter -- toward our long-term, dual objectives of sustainable earnings consistency and increasing shareholder value.''
Net income for the fiscal 2000 first quarter was also $12.1 million, a 34% increase over net income of $9.0 million in the prior year first quarter. Net earnings per share of $0.24 in the current quarter were 41% higher than net earnings per share of $0.17 in the prior year. Net earnings in the prior year included a loss of $1.8 million, or $0.03 per share, from the Company's coal mining subsidiary, Jim Walter Resources, which was reclassified as a discontinued operation in February 1999. Jim Walter Resources also incurred a loss of $1.6 million in the current fiscal quarter; however, in keeping with generally accepted accounting principles, losses incurred following reclassification to discontinued status are deferred pending disposition and thus were not deducted from net earnings for the current period.
Hyatt noted that the current quarter earnings were net of $10.4 million ($0.19 per share net of tax) in goodwill expense, which is deducted from operating and net income. On a pre-goodwill basis, first quarter earnings per share would have been $0.43. The bulk of this goodwill is a carryover from the Company's 1988 leveraged buyout.
Operating income rose 7% to $51.5 million from $48.0 million in the prior year period. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) were $67.6 million versus $66.5 million. Net sales and revenues totaled $397.2 million compared with $408.6 million in the first quarter last year. The prior year period included net sales and revenues of $11.6 million and a $451,000 operating income contribution from a former subsidiary, JW Window Components, which was divested in last year's second quarter.
Results from Operations
Homebuilding and Financing revenues rose 13% on the strength of a 39% increase in home completions and 8% higher average selling prices. Operating income was 14% lower, however, due to an anticipated decrease in mortgage prepayment activity from the prior year's abnormally high levels. Jim Walter Homes and its affiliated homebuilding companies completed 1,169 homes at an average net selling price of $54,100 in the current quarter versus 844 completions at a $50,000 average price in the prior year. New sales orders remained strong for the quarter, resulting in a 31% increase in unit backlog, to 2,817 homes at August 31, 1999, compared with 2,143 homes a year earlier.
Water Transmission Products, comprised of the operations of U.S. Pipe and Foundry Company, generated an 86% increase in operating income on 2% higher revenues. This strong earnings performance reflects lower raw material costs, principally scrap iron, coupled with the favorable impact of ongoing margin improvement and cost reduction programs underway at U.S. Pipe.
Energy Services, comprised of the operations of Applied Industrial Materials Corporation (AIMCOR), generated 31% higher operating income on the strength of successful efforts to restore margins and shipments of petroleum coke to more normalized levels following the extraordinary global market conditions precipitated by last year's Asian economic crisis. Revenues for the current quarter were 27% lower than in last year's first quarter, reflecting the year-to-year decline in worldwide market prices for petroleum coke, as well as ferroalloys produced by AIMCOR's metal products group.
The ''Other'' segment -- comprised of the operations of JW Aluminum Company, Sloss Industries Corporation, Southern Precision Corporation and the Company's smaller land management businesses -- generated first quarter operating income of $8.0 million compared with $8.1 million in the prior year. Revenues were 5% lower, at $83.2 million versus $88 million in the fiscal 1999 first quarter. Prior year results included revenues of $11.6 million and a $451,000 operating income contribution from JW Window Components, the former subsidiary, which was sold in November 1998. On a comparable basis, excluding these contributions, segment revenues rose 9% and operating income was 5% higher on the strength of positive comparisons from JW Aluminum and Sloss Industries.
Free cash flow (cash flow from operating activities, less changes in marketable securities and restricted cash, and net of capital expenditures) was $19.3 million for the first quarter. Capital expenditures, net of retirements, totaled $12.0 million.
The Company repurchased 278,800 shares of its common stock during the first quarter, bringing to 3,873,000 the total number of shares repurchased under a stock buyback program authorized by the Company's Board of Directors in July 1998. Combined with 1,398,092 shares purchased in 1997, the Company has now repurchased a total of 5,271,092 shares, representing an investment of more than $75 million. |
