Walter Industries Reports Fiscal 1999 First Quarter Results - EPS of $0.17, in Line with Expectations
TAMPA, Fla.--(BUSINESS WIRE)--September 22, 1998--Walter
Industries, Inc. (NYSE: WLT) today reported results for its fiscal
1999 first quarter ended August 31, 1998.
Net sales and revenues rose 23% to $493.1 million compared with
$399.3 million in the 1998 first quarter. Current quarter results
included an $88.0 million revenue contribution from Applied Industrial
Materials Corporation ("AIMCOR"), which was acquired in October 1997.
Operating income totaled $41.4 million compared with $43.3
million in the prior year first quarter. Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) totaled $70.1 million
versus $67.6 million in the year ago period. Both operating income and
EBITDA in the prior year first quarter included a $4.0 million
non-recurring gain from an insurance settlement.
Net income amounted to $9.0 million, or $0.17 per diluted share
in the current first quarter. This compares with prior year net income
of $14.1 million, or $0.26 per diluted share, which included a $2.4
million, or $0.04 per share after-tax effect from the non-recurring
gain.
Operating and net income included goodwill expense totaling $10.6
million, equivalent to $0.18 per share, in the current first quarter,
compared with $8.4 million, or $0.16 per share last year. Interest and
amortization of debt expense in the current quarter amounted to $47.5
million compared with $44.9 million in the prior year, with the
increase attributable to bank debt issued in conjunction with the
AIMCOR acquisition in last year's second quarter.
As previously announced, operating results in the current quarter
were adversely impacted by production problems at the Company's coal
mining operations which resulted in an unexpected loss from its
Natural Resources segment.
Natural Resources was the only segment of the Company that did
not report improved operating results for the quarter. Operating
income from the Company's Homebuilding and Financing, Water
Transmission Products and Industrial Products segments was sharply
higher and was supported by a positive contribution from the Energy
Services segment. Energy Services was formed following the acquisition
of AIMCOR and therefore is not reflected in the prior year's first
quarter results.
"Ongoing programs to build both the quantity and quality of
earnings from each of our core businesses are clearly gaining
momentum, notwithstanding the recent unevenness in our coal
operations," said Kenneth E. Hyatt, Walter Industries' Chairman and
Chief Executive Officer. "We look forward to and expect continued
progress in the quarters ahead."
First Quarter Results From Operations
Homebuilding and Financing generated 42% higher operating income
on a 1% revenue increase, benefiting from higher average selling
prices and higher income from its mortgage financing operations. The
Company's homebuilding business completed 844 homes at an average
price of $50,000 compared with 979 homes at an average price of
$47,700 in the same quarter last year. The quarter ended with 2,143
homes in backlog, compared with 1,883 units entering the quarter and
2,128 units a year ago.
Water Transmission Products generated 32% higher operating income
on 11% higher revenues for the quarter. These gains reflect the
favorable impact of ongoing margin improvement programs at the
Company's U.S. Pipe and Foundry subsidiary, coupled with 10% higher
shipments of ductile iron pressure pipe and related products.
Operating results of the Natural Resources segment reflected the
impact of unexpected geological problems in two of the Company's four
coal mines, a five-week work stoppage in one mine early in the
quarter, and curtailed production resulting from scheduled mining
equipment moves during the quarter. Accordingly, revenues were 14%
lower, reflecting a reduction in coal shipments from 2.2 million tons
a year ago to 1.8 million tons in the current quarter, while the cost
per ton of coal produced was $44.39 compared with $35.46 in the prior
year first quarter. These combined factors resulted in a $3.4 million
operating loss for the segment compared with operating income of $13.5
million in the prior year first quarter. Average coal selling prices
were 2% higher, at $43.07 per ton compared with $42.25, with the
increase stemming from a higher percentage of shipments sold to a
major long-term contract customer at above-market rates.
Industrial Products reported 9% higher revenues and 31% higher
operating income for the quarter. Results of all five operating
companies comprising the segment compared favorably with the prior
year, led by solid earnings gains at the Company's JW Aluminum and
Sloss Industries subsidiaries.
The Energy Services segment posted operating income of $3.5
million and revenues of $88.0 million for the quarter. AIMCOR's
results were constrained early in the quarter as the company adjusted
its volume of shipments and inventories of petroleum coke to respond
to volatility in global solid fuels markets. Those conditions have
abated, and results of this segment are expected to normalize in the
current second fiscal quarter.
Cash flows from operations, less amounts used in investing
activities, amounted to $145.6 million in the current quarter compared
with $9.4 million in the prior year period. Current quarter results
included the release of $121.6 million of funds previously held by
Mid-State Trust II. These funds were used to pay down indebtedness of
Mid-State Trust IV.
Capital expenditures in the current quarter amounted to $19.9
million compared with $19.8 million in the prior year period.
Note to Editor: Walter Industries, Inc., based in Tampa, Florida,
is a diversified, multi-subsidiary company with major interests in
homebuilding/financing and industrial operations. Walter Industries
and its subsidiaries employ 8,000 worldwide and generate more than
$1.8 billion in revenues annually. |
