Exhibit 99.1
BOARD OF DIRECTORS DECLARES 2-FOR-1 SPLIT OF WALTER INDUSTRIES STOCK AND
ANNOUNCES SPIN-OFF OF MUELLER WATER PRODUCTS
- Record Date of December 6, 2006 Set for Spin-Off and Stock Split -
TAMPA, Fla., Nov. 6 /PRNewswire-FirstCall/ -- Walter Industries, Inc. (NYSE:
WLT) announced today that its Board of Directors has approved a split of the
Company's common stock on a two-for-one basis. The stock split will be effected
through a tax-free stock dividend entitling each shareholder of record to
receive one additional share of common stock for every one share owned.
Additional shares issued as a result of the stock dividend will be distributed
after the close of trading on Dec. 14, 2006, to shareholders of record on Dec.
6, 2006.
The Company's Board of Directors also announced the spin-off distribution of
its 85.8 million Series B shares of Mueller Water Products, Inc. (NYSE: MWA) to
Walter Industries shareholders. The Series B shares are being introduced to the
market and will trade on the New York Stock Exchange under the symbol "MWA.B".
Mueller Water Products' Series A shares currently trade on the New York Stock
Exchange under the symbol "MWA"; the Series B shares represent approximately 75
percent of the outstanding shares of Mueller Water Products and approximately
96% of the voting power. Walter Industries intends to complete the distribution
of the Series B shares after the close of trading on Dec. 14, 2006 to
shareholders of record on Dec. 6, 2006.
"We are very pleased to announce these critical steps toward completing the
next phase of Walter Industries' value-creation strategy," said Chairman and CEO
Gregory E. Hyland. "Upon separation, both Walter Industries and Mueller Water
Products will be strong, stand-alone companies with exciting strategic
opportunities."
Hyland added, "The stock split is intended to protect our shareholders from
loss of value or inappropriate dilution of their holdings in Walter Industries
arising from the threatened actions from certain holders of the Company's
Convertible Senior Subordinated Notes."
The distribution of Mueller Water Products Series B shares will take place
in the form of a tax-free, pro-rata distribution to Walter Industries'
shareholders of record as of Dec. 6, 2006. There are approximately 44.3 million
shares currently outstanding of Walter Industries common stock. Based on this
outstanding share count, Walter Industries' shareholders would receive a
distribution ratio of approximately 1.94 shares of Mueller Water Products Series
B common stock for each share of Walter Industries common stock. However, the
distribution ratio will be reduced to the extent that additional shares of
Walter Industries common stock are issued as a result of any additional
conversions of the Company's Convertible Senior Subordinated Notes or the
exercise of outstanding stock options prior to the close of business on the
December 6, 2006 record date for the distribution. The final distribution ratio
will be set on the record date and will be calculated by dividing the Series B
shares of Mueller Water Products to be distributed by the number of Walter
Industries' shares outstanding as of Dec. 6, 2006. The distribution of the
Mueller Water Products Series B shares will not be made in respect of the shares
of common stock of Walter Industries that will be issued pursuant to the stock
split.
The distribution of Mueller Water Products Series B shares will be in the
form of whole shares only, and a cash payment will be made in lieu of any
aggregate fractional share to which a holder is entitled. The number of
outstanding shares of Walter Industries common stock could increase
significantly prior to the close of business on the record date, primarily as a
result of potential conversions of the Company's Convertible Senior Subordinated
Notes into common stock of the Company. The maximum incremental shares of common
stock of Walter Industries that could be issued if 100 percent of the current
note holders convert is approximately 7.7 million shares, which would reduce the
distribution ratio referenced above to approximately 1.65 shares of Mueller
Water Products Series B common stock for each share of Walter Industries common
stock held on the record date. Additionally, there are approximately 0.25
million shares of Walter Industries common stock that could be issued if 100
percent of outstanding vested options are exercised.
Transaction Details
Shareholders of Walter Industries common stock need not take any action to
participate in the spin-off or the stock split, nor is any vote of Walter
Industries shareholders required. Similarly, no action is required by existing
Mueller Water Products Series A shareholders.
Walter Industries' shareholders entitled to the distribution and stock split
will receive a book-entry account statement reflecting their increased number of
Walter Industries shares and their ownership of Mueller Water Products Series B
common stock, or their brokerage account will be credited for the shares.
Walter Industries expects to send information detailing this transaction to
its shareholders after Dec. 6, 2006. The information statement will include
details on the distribution and will also be posted to Walter Industries Web
site at www.walterind.com.
Trading market information for WLT and MWA
Shareholders who sell their shares of Walter Industries common stock in the
"regular-way" market (i.e., the normal trading market on the New York Stock
Exchange under the symbol "WLT") after the record date of Wednesday, Dec. 6,
2006 and on or before the distribution date of Dec. 14, 2006 will be selling
their right to participate in the stock split and receive shares of Mueller
Water Products Series B common stock in connection with the spin-off and must
ensure that they can deliver such entitlements to their purchasers.
Walter Industries expects that a "when-issued" market (i.e., trading in
Walter Industries shares without the right to receive Mueller Water Products
Series B common shares under the symbol "WLT wi") will develop on or about two
business days prior to the record date. It is also expected that a "when-issued"
market will develop on or about two business days prior to the record date for
the Mueller Water Products Series B shares on the New York Stock Exchange.
Investors are encouraged to consult with their financial and tax advisors
regarding the specific implications of any potential transactions in Walter
Industries or Mueller Water Products shares between Dec. 6, 2006 and Dec. 14,
2006.
About Walter Industries
Walter Industries, Inc. is a diversified company with consolidated annual
revenues of approximately $3.1 billion. The Company is a significant producer of
high-quality metallurgical coal and natural gas for worldwide markets and is a
leader in affordable homebuilding and financing. Walter Industries is also the
majority shareholder of Mueller Water Products (NYSE: MWA), a leading water
infrastructure, flow control and water transmission products company. Including
Mueller Water, 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, 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
spin-off of Mueller Water Products, Inc. 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 Water Products' 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- 11/06/2006
/CONTACT: Investors, Mark H. Tubb, Vice President - Investor Relations,
+1-813-871-4027, or mtubb@walterind.com, or Media, Michael A. Monahan, Director
- - Corporate Communications, +1-813-871-4132, or mmonahan@walterind.com, both of
Walter Industries, Inc./