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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) DECEMBER 7, 1999
WALTER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-20537 13-3429953
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
1500 NORTH DALE MABRY HIGHWAY, TAMPA, FLORIDA 33607
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 871-4811
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The information required by this item is contained in the Press Release Dated
December 7, 1999, which is filed as an exhibit on this form.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
Exhibit Number Description
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99 Press Release Dated December 7, 1999
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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 hereunto duly authorized.
Date: DECEMBER 8, 1999
WALTER INDUSTRIES, INC.
By: /s/ Arthur W. Huge
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Title: Arthur W. Huge
Executive Vice President and
Principal Financial Officer
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Exhibit 99
NEWS WALTER INDUSTRIES, INC.
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FOR FURTHER INFORMATION CONTACT:
CONTACT: David L. Townsend Public Relations Department
Vice President - Administration Walter Industries, Inc.
Walter Industries, Inc. P. O. Box 31601
(813) 871-4448 Tampa, FL 33631-3601
Telephone: (813) 871-4448/871-4439
Or visit the Walter Industries
Web site at WWW.WALTERIND.COM
FOR IMMEDIATE RELEASE
WALTER INDUSTRIES REPORTS THAT FEWER MORTGAGE PREPAYMENTS WILL
RESULT IN SECOND QUARTER EARNINGS PER SHARE OF $0.20 TO $0.23
-- COMPANY REPURCHASED 1.3 MILLION SHARES OF COMMON STOCK DURING THE QUARTER --
-- EVALUATION OF STRATEGIC ALTERNATIVES FOR JIM WALTER RESOURCES CONTINUES --
Tampa, FL, December 7, 1999--Walter Industries, Inc. (NYSE: WLT) today
announced that the rate of early payoffs from its $4.2 billion Mid-State Homes
mortgage portfolio, which had reached record levels in prior periods, declined
sharply during the Company's fiscal 2000 second quarter ended November 30. The
Company stated that this will reduce income of its Homebuilding and Financing
segment for the quarter by a greater degree than previously anticipated. As a
result, the Company estimates that second quarter earnings per share from
continuing operations will be in the range of $0.20 to $0.23, compared with
$0.25 per share (before an extraordinary gain) earned in the prior year second
quarter.
These results follow a strong fiscal first quarter performance in which
the Company's earnings per share exceeded the prior year by 20%. Given the
Company's estimated earnings per share for the second quarter, earnings for the
fiscal six month period ended November 30 would be $0.44 to $0.47, compared with
$0.45 in the comparable period last year.
The Company further indicated that, if prevailing interest rate levels
and constraints on mortgage financing activity continue, its prepayment income
could remain at the second quarter's level in the third and fourth fiscal
quarters. This anticipated reduction in Homebuilding and Financing segment
income, partially offset by gains from the Company's other business segments,
would lead to $0.04 to $0.06 in lower earnings per share from continuing
operations for the Company's fiscal second half versus the comparable prior year
period.
The Company has previously stated that prepayment income would decline
in its current fiscal year as an outgrowth of higher mortgage interest rates and
more restrictive credit availability for homeowner loans nationally -- industry
factors which would slow the rate of mortgage refinancings by Mid-State clients
from record levels experienced in the prior year. Unlike mortgage lenders that
recognize interest income at the time of the home sale and are forced to record
losses when prepayments reach unexpected levels, the Mid-State mortgage
portfolio recognizes income only on receipt of actual payment and experiences an
acceleration of income recognition from prepayments.
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"While the lower level of prepayments this year will have a short-term
negative impact on earnings comparisons, the longer-term effect will be positive
because mortgages that are not prepaid remain in the Mid-State portfolio and
continue to generate a stable stream of income," said Kenneth E. Hyatt, Walter
Industries Chairman and Chief Executive Officer. "Furthermore, our other core
businesses are performing well and should post positive year-over-year
comparisons. Although their second quarter contributions were not sufficient to
offset the greater-than-anticipated drop in mortgage prepayment income, we look
for these businesses to expand their contributions to the Company's overall
results for the balance of the fiscal year and, over the longer term, provide
increasingly higher income."
SHARE REPURCHASE ACTIVITY
Underscoring management's confidence in Walter Industries' future
earnings potential, Hyatt reported that since the announcement of its new share
buyback program on October 14 the Company has repurchased 1,305,000 shares of
its common stock. The Company initiated its previous share buyback program in
July 1998, and since that time has repurchased a total of 5,178,000 shares in
open market purchases. Combined with 1,398,092 shares purchased in 1997, the
Company has utilized its substantial surplus free cash flow to repurchase a
total of 6,576,092 shares, representing an investment of more than $90 million.
STATUS OF ASSET DISPOSITION PROGRAM
Hyatt also noted that the Company remains focused on a program
initiated earlier this year -- in conjunction with the investment banking firm
Salomon Smith Barney -- to explore strategic alternatives for its Alabama-based
Jim Walter Resources coal and methane gas subsidiary. "This effort is ongoing,
with the interests of our shareholders as our top priority," Hyatt said. "While
we had hoped to announce a definitive course of action by calendar year end,
various factors -- principally depressed conditions in worldwide coal markets
and their deteriorating effect on the U.S. coal industry in recent months --
have delayed our progress. We will continue our efforts to conclude this process
in a prudent, value-driven manner, and will report our progress as events
warrant."
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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 7,700 worldwide and generate approximately $1.9 billion in
revenues annually.
THE PRECEDING INCLUDES FORWARD-LOOKING STATEMENTS WHICH INVOLVE KNOWN AND
UNKNOWN RISKS AND UNCERTAINTIES WHICH MAY CAUSE THE COMPANY'S ACTUAL RESULTS IN
FUTURE PERIODS TO DIFFER MATERIALLY FROM FORECASTED RESULTS. AMONG THOSE FACTORS
WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY ARE INTEREST RATE
FLUCTUATIONS, CREDIT AVAILABILITY, MARKET DEMAND, COMPETITION, WEATHER AND OTHER
RISK FACTORS LISTED FROM TIME TO TIME IN THE COMPANY'S SEC REPORTS.
