Exhibit 99.2
JIM WALTER RESOURCES SETTLES SIGNIFICANT PORTION OF METALLURGICAL COAL
CONTRACTS AT APPROXIMATELY $115 PER METRIC TON
- Walter Industries Narrows Full-Year Earnings Expectations Range -
TAMPA, Fla., April 27 /PRNewswire-FirstCall/ -- Walter Industries, Inc.
(NYSE: WLT) announced today that Jim Walter Resources has negotiated and
settled a substantial portion of its annual metallurgical coal contracts
for the July 2006 through June 2007 period. Average pricing is
approximately $115 per metric ton (FOB) at the Port of Mobile, which is
consistent with pricing achieved by the Australian producers for their
highest quality coking coals.
"We are very pleased with the culmination of negotiations with our major
European and South American customers who continue to recognize our Blue
Creek Coal as one of the highest quality, low-vol coking coals in the
world," said Walter Industries Chairman and CEO Gregory E. Hyland.
In addition, the Company announced that it has narrowed its full-year
GAAP earnings expectations from a range of $4.90 to $5.90 per diluted
share to a range of $5.10 to $5.70. This narrowed range primarily
reflects three key factors:
-- Better operating performance and outlook across all business segments.
-- Negotiated coal contracts were above the low end, but slightly below
the high end of the Company's previously expected pricing range.
-- Jim Walter Resources recently renegotiated its transportation contract
with CSX at an incremental cost of approximately $2.00 per ton. While
the new 4-year contract calls for higher rates, it ensures better
transportation reliability and cost protection over the long term.
In addition, given that acquisition-related, non-cash intangibles
amortization of $16.8 million (after tax) per year, or approximately
$0.32 per diluted share, is fixed and will continue, the Company no
longer will adjust its non-GAAP earnings for this item. After both the
narrowing of our earnings expectations range and the elimination of
ongoing acquisition-related intangibles amortization expense, the
Company's revised non-GAAP earnings expectation range is now $5.30 to
$5.90 per diluted share.
"While we narrowed our earnings expectations range, we have maintained
the midpoint of the previously issued range as we are confident in our
ability to deliver strong earnings growth in 2006," Hyland added.
These earnings expectation ranges exclude any impact from the Company's
intended initial public offering (IPO) of its Water Products business,
such as interest expense savings from the use of IPO proceeds, one-time
debt reduction costs, stock compensation expense, minority interest in
the earnings of the Water Products business after the IPO and other
related items. After the IPO, the Company expects to update its earnings
expectations once these factors can be reasonably estimated.
Non-GAAP Financial Measures
Within this announcement, the Company makes reference to certain
non-GAAP financial measures, which have directly comparable GAAP
financial measures as identified in this release. These non-GAAP
measures are provided so that investors have the same financial data
that management uses with the belief that it will assist the investment
community in properly assessing the underlying performance of the
Company for the periods being reported. The reconciliation between GAAP
and non-GAAP performance measures is presented in compliance with the
provisions of the rules under Regulation G and Item 2.02.
Range of Expectations
-----------------------
Low High
---------- ----------
$ in Millions
GAAP Expectations
Net Income Including EITF Dilution $ 267.0 $ 298.0
EPS Including EITF Dilution $ 5.10 $ 5.70
Non-GAAP Expectations
Net Income $ 267.0 $ 298.0
Add: Acquisition-Related Purchase
Accounting for Inventory Step-Up
and Restructuring Charges, Net
of Tax $ 9.0 $ 9.0
Net Income Before Acquisition-Related
Purchase Accounting and Restructuring
Charges $ 276.0 $ 307.0
EPS Excluding Acquisition Related
Purchase Accounting and Restructuring
Charges, Including EITF Dilution $ 5.30 $ 5.90
Earnings Announcement and Conference Call Web Cast
Walter Industries Chairman and CEO Greg Hyland and members of the
Company's leadership team will discuss first quarter 2006 results,
future outlook and other general business matters on a conference call
and live Web cast to be held on Friday, April 28, 2006, at 9 a.m.
Eastern Daylight Time. To listen to the event live or in archive, visit
the Company Web site at http://www.walterind.com.
About Walter Industries
Walter Industries, Inc. is a diversified company with annual revenues of
approximately $3.0 billion. The Company is a leader in water
infrastructure, flow control and water transmission products, with
respected brand names such as Mueller, U.S. Pipe, James Jones, Henry
Pratt and Anvil. The Company is also a significant producer of
high-quality metallurgical coal and natural gas for worldwide markets
and is a leader in affordable homebuilding and financing. Based in
Tampa, Fla., the Company employs approximately 10,000 people. For more
information about Walter Industries, please visit the Company Web site
at http://www.walterind.com.
Safe Harbor Statement
Except for historical information contained herein, the statements in
this release are forward-looking and made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause the Company's actual results in future
periods to differ materially from forecasted results. Those risks
include, among others, changes in customers' demand for the Company's
products, changes in raw material, labor, equipment and transportation
costs and availability, geologic and weather conditions, changes in
extraction costs and pricing in the Company's mining operations, changes
in customer orders, pricing actions by the Company's competitors,
changes in law, the collection of approximately $14 million of
receivables associated with a working capital adjustment arising from
the sale of a subsidiary in 2003, potential changes in the
mortgage-backed capital markets, and general changes in economic
conditions. Those risks also include the timing of and ability to
execute on the initial public offering and spin-off of the Company's
Water Products business and any other strategic action that may be
pursued. Risks associated with forward-looking statements are more fully
described in the Company's and Mueller's filings with the Securities and
Exchange Commission. The Company assumes no duty to update its
forward-looking statements as of any future date.
SOURCE Walter Industries, Inc.
-0- 04/27/2006
/CONTACT: Investors: Joseph J. Troy, Sr. Vice President, +1-813-871-4404,
jtroy@walterind.com, or Media: Michael A. Monahan, Director - Corporate
Communications, +1-813-871-4132, mmonahan@walterind.com /
/Photo: http://www.newscom.com/cgi-bin/prnh/20020429/FLM010LOGO-c
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.walterind.com /