Walter Industries Retains Salomon Smith Barney to Pursue Strategic Alternatives for Its Coal Operations; Related Restructuring Actions In Fiscal Third Quarter
TAMPA, Fla.--(BUSINESS WIRE)--March 1, 1999--Walter Industries,
Inc. (NYSE: WLT) announced today that it has retained the investment
banking firm of Salomon Smith Barney Inc. to pursue strategic
alternatives for Jim Walter Resources, its coal mining and methane gas
subsidiary.
The Company also announced the following related actions, which
are effective with its fiscal third quarter ended February 28, 1999:
-- Jim Walter Resources will be classified as a discontinued
operation for financial reporting purposes. Its businesses
comprise substantially all of the Company's Natural Resources
segment, which generated revenues of $362.2 million and operating
income of $38.4 million in its last full fiscal year.
-- Jim Walter Resources will cease production at one of its four
Alabama-based coal mines, Blue Creek Mine No. 3, as part of a
strategic reorganization of the mine operations to increase their
future profitability. The mine shutdown process commences today
and will result in a pre-tax charge of approximately $53 million
against third quarter earnings.
-- The Company will realize a $25 million pre-tax gain from a
reduction in Jim Walter Resources' postretirement benefit
liabilities. This positive adjustment is the result of a recent
actuarial analysis of Jim Walter Resources' medical claims
experience, reductions to its workforce and the decision to close
Mine No. 3.
"These actions should significantly enhance the ongoing
profitability of Jim Walter Resources. Nevertheless, we have
previously identified the coal operations as non-strategic to the
long-term growth and direction of our Company, and we are taking
definitive steps toward its disposition," said Kenneth E. Hyatt,
Walter Industries' Chairman and Chief Executive Officer.
"Today's announcement, combined with the recent divestiture of
our window components business and current program to divest our
Vestal Manufacturing subsidiary, underscores our commitment to a more
concentrated focus on our four core businesses - homebuilding and
financing, pipe manufacturing, specialty industrial products and
energy services," Hyatt said.
The Company expects to announce results for its fiscal third
quarter and nine months after the close of market trading on March 22.
Preliminary estimates indicate that operating and net income from the
Company's continuing operations, excluding Jim Walter Resources, will
be materially higher than the comparable prior year periods. However,
Jim Walter Resources incurred an operating loss for the third quarter
-- principally due to problems at its No. 3 Mine -- that will
negatively impact the Company's overall earnings comparisons with the
prior year. |
