Walter Industries Reports Strong Fiscal 1999 Year And Fourth-Quarter Earnings From Continuing Operations
-- Fourth-Quarter EPS Reaches $0.35 Versus $0.28 in Prior Year --
-- Full-Year Diluted EPS Reaches $0.94 Versus $0.53 --
TAMPA, Fla., July 27 /PRNewswire/ -- Walter Industries, Inc. (NYSE: WLT)
today reported results for its fiscal 1999 fourth quarter and year ended May
31, 1999.
Fourth-Quarter Results
Income from continuing operations for the 1999 fourth quarter amounted to
$17.7 million compared with $15.3 million in the prior year fourth quarter, a
16% increase. Basic and diluted earnings per share rose 25% to $0.35 from
$0.28
Kenneth E. Hyatt, Walter Industries Chairman and Chief Executive Officer,
said, "These positive comparisons reflect substantial contributions from each
of the Company's four core businesses: homebuilding and financing, pipe
manufacturing, energy services and specialty aluminum products."
Operating income from continuing operations rose 7% to $57.5 million
compared with $53.5 million a year earlier. Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) totaled $72.9 million compared with
$68.8 million, a 6% increase. Three of the Company's four segments posted
higher income. Income of the Homebuilding and Financing segment declined 7%
as a result of fewer mortgage payoffs during the quarter.
Net sales and revenues from continuing operations totaled $430.4 million
compared with $445.4 million in the prior-year fourth quarter. Prior-year
results included a $10.1 million revenue contribution from a former
subsidiary, JW Window Components, which was divested prior to the fiscal 1999
fourth quarter. The decrease in revenues was principally due to lower prices
for petroleum coke in worldwide markets served by the Company's Energy
Services Segment, which posted a 37% gain in operating income.
"Our focus continues to be on increasing the quality as well as the
quantity of our earnings as we build a solid platform for sustainable growth,"
Hyatt said. He noted that operating margins companywide rose to 13% from 12%
in the prior-year period, led by gains from the Company's Energy Services,
Water Transmission Products and Other Segments.
Hyatt also noted that the current-quarter results were net of
$10.8 million ($0.20 per share net of tax) in goodwill expense which is
deducted from segment income. The bulk of this goodwill is a carryover from
the Company's 1988 leveraged buyout. Goodwill in last year's fourth quarter
was $10.8 million ($0.19 per share net of tax).
Net income for the fourth quarter, which included results of Jim Walter
Resources, Inc. (classified as a discontinued operation for financial
reporting purposes effective with the fiscal 1999 third quarter) amounted to
$17.8 million ($0.35 per share) versus $24.5 million ($0.45 per share) in last
year's fourth quarter. Jim Walter Resources generated net income of
$9.2 million in the prior-year period versus $1.8 million in the current
period.
The Company repurchased 621,100 shares of its common stock during the
fiscal 1999 fourth quarter, as well as an additional 278,800 shares since the
close of the 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, over a two-year period.
Full-Year Results
Income from continuing operations for the fiscal year ended May 31, 1999,
rose 67% to $48.6 million versus $29.1 million in fiscal 1998. Diluted
earnings per share rose 77% to $0.94 from $0.53 in fiscal 1998.
Fiscal 1999 sales and revenues from continuing operations totaled
$1.618 billion versus $1.483 billion in fiscal 1998, a 9% increase.
Operating income from continuing operations for fiscal 1999 was 25%
higher, totaling $202.5 million compared with $161.6 million in the prior
year. EBITDA rose 20% to $267.6 million versus $222.7 million.
Net income for the full year, including non-recurring charges and
operating losses associated with the discontinued operation which were
partially offset by a gain from the second-quarter sale of the window
components business, amounted to $35.6 million ($0.69 per diluted share)
compared with $56.2 million ($1.03 per diluted share) for fiscal 1998.
Capital expenditures for continuing operations amounted to $56.2 million
($83.1 million including Jim Walter Recources) in fiscal 1999 versus $66.9
million ($107.6 million including Jim Walter Resources) in fiscal 1998.
Fourth-Quarter Results from Operations
Beginning with this report, operating results are presented in four
segments -- Homebuilding and Financing, Water Transmission Products, Energy
Services, and a new "Other" group -- reflecting the Company's previously
announced adoption of Financial Accounting Standards Board Statement No. 131.
* Homebuilding and Financing sales and revenues rose 9% on the strength
of a 28% increase in home completions for the quarter and 7% higher average
selling prices. Operating income decreased 7%, however, due to an anticipated
slowdown in mortgage prepayment activity. Jim Walter Homes and its affiliated
homebuilding companies reported 1,141 home completions at an average net
selling price of $53,200 for the current quarter versus 889 completions at a
$49,800 average price in the comparable period last year. New sales orders
were very strong for the quarter, resulting in a 43% increase in unit backlog,
to 2,683 homes at May 31, 1999, compared with 1,883 homes a year earlier.
* Water Transmission Products, comprised of the operations of U.S. Pipe
and Foundry Company, generated a 42% increase in operating income on 4% higher
revenues. This strong earnings performance reflects the success of ongoing
profit improvement programs at U.S. Pipe.
* Energy Services, comprised of the operations of Applied Industrial
Materials Corporation (AIMCOR), generated operating income of $11.2 million, a
37% improvement over the prior year's $8.2 million contribution. Revenues for
the current fourth quarter were 24% lower than in the 1998 fourth quarter,
totaling $91.1 million compared with $120.1 million, reflecting the decline in
worldwide prices for petroleum coke during the past year in the wake of the
Asian economic crisis.
* The new "Other" segment is comprised of the operations of JW Aluminum
Company, Sloss Industries Corporation, Southern Precision Corporation and the
Company's smaller land management businesses. Fourth quarter operating income
amounted to $8.7 million in the current year compared with $7.6 million in the
fiscal 1998 period, a 15% increase largely resulting from higher shipments and
margin improvement at JW Aluminum, the Company's South Carolina-based producer
of specialty aluminum products. Revenues were 2% lower, at $89.4 million
versus the prior year's $90.9 million, although prior-year results included
the $10.1 million revenue contribution from JW Window Components, the former
subsidiary which was sold in November 1998. On a comparable basis excluding
this contribution, segment revenues were 11% higher. |
