-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gh0B0Ln9u5ZB6Oidyq1VG3Z9Z21EuxZALFXl/0g8+qtWtF3UfqoUYCY3azPuKUbI LnF/Nd3+c6H3YRUIuuWLMg== 0001047469-03-004257.txt : 20030206 0001047469-03-004257.hdr.sgml : 20030206 20030206163901 ACCESSION NUMBER: 0001047469-03-004257 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030205 ITEM INFORMATION: FILED AS OF DATE: 20030206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WALTER INDUSTRIES INC /NEW/ CENTRAL INDEX KEY: 0000837173 STANDARD INDUSTRIAL CLASSIFICATION: GEN BUILDING CONTRACTORS - RESIDENTIAL BUILDINGS [1520] IRS NUMBER: 133429953 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13711 FILM NUMBER: 03542837 BUSINESS ADDRESS: STREET 1: 1500 N DALE MABRY HWY CITY: TAMPA STATE: FL ZIP: 33607 BUSINESS PHONE: 8138714811 MAIL ADDRESS: STREET 1: 1500 N DALE MABRY HWY STREET 2: 1500 NORTH MABRY HGWY CITY: TAMPA STATE: FL ZIP: 33607 FORMER COMPANY: FORMER CONFORMED NAME: HILLSBOROUGH HOLDINGS CORP DATE OF NAME CHANGE: 19910814 8-K 1 a2102608z8-k.txt 8-K 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) February 5, 2003 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.) 4211 W. BOY SCOUT BOULEVARD, 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) ITEM 9. REGULATION FD DISCLOSURE On February 5, 2003, Walter Industries issued a press release setting forth Walter Industries, Inc.'s fourth-quarter 2002 earnings. A copy of Walter Industries, Inc.'s press release is attached hereto as Exhibit (99) and hereby incorporated by reference. Walter Industries, Inc.'s forecast for fiscal year 2003 is based on, among other events, four longwall moves occurring at subsidiary Jim Walter Resources, Inc.'s coal mines during the year. During the February 6, 2003 conference call with investors, Walter Industries, Inc. estimated that there would be one longwall move during 2003. In one of Jim Walter Resources, Inc.'s mines, the longwall is moved approximately every six months; in each of the other two mines, it is moved approximately every 11-12 months. One of the longwall moves is tentatively scheduled for the first quarter of 2003, while three other moves are tentatively scheduled for the second half of the year, the timing of which could change depending on the pace of longwall mining, geological conditions, and other factors. 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. WALTER INDUSTRIES, INC. By: /s/ CHARLES E. CAUTHEN ----------------------------------- Title: Charles E. Cauthen Sr. Vice President and Controller Date: February 6, 2003 EXHIBIT INDEX (99) Press release, dated: February 5, 2003, issued by Walter Industries, Inc. EX-99.1 3 a2102608zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 [LOGO] FOR IMMEDIATE RELEASE - --------------------- WALTER INDUSTRIES ANNOUNCES FOURTH QUARTER 2002 RESULTS OF $0.33 PER SHARE --FULL YEAR EARNINGS PER SHARE IS $1.64-- --COMPANY EXPECTS 2003 EARNINGS PER SHARE OF $1.70 TO $1.80-- (Tampa, Florida) February 5, 2003--Walter Industries, Inc. (NYSE: WLT) today reported net income of $0.33 per diluted share for the fourth quarter ended December 31, 2002, compared to the Company's previously announced guidance of between $0.28 to $0.33 per share. The Company reported net income of $1.64 per diluted share for the full year 2002, excluding the impact of adopting FAS 142 earlier in the year. The fourth quarter reflected continued strong performances in the Homebuilding and Financing segments, along with improved results in the Industrial Products segment. As expected, profitability declined in the Natural Resources segment, principally due to temporary increases in production costs associated with scheduled longwall moves in all three of the Company's coal mines. "In spite of formidable market challenges in our U.S. Pipe and AIMCOR businesses, we continue to achieve our financial targets, due principally to our ongoing productivity efforts," said Chairman and Chief Executive Officer Don DeFosset. "As we enter 2003, our leadership team is focused on growing each business. At the same time, the uncertain economic environment mandates continued emphasis on cost reduction and cash flow improvement." FOURTH QUARTER 2002 FINANCIAL RESULTS Net income was $14.6 million, or $0.33 per diluted share, during the fourth quarter ended December 31, 2002. This compares with earnings in the year-ago period of $12.3 million, or $0.28 per share. Results for the quarter reflect higher operating income in the Homebuilding, Financing and Industrial Products segments, as well as reduced interest and goodwill amortization expenses, as compared to the year earlier period. Partially offsetting these improvements, operating income was down in the Carbon and Metals segment, primarily due to lower pet coke 2 margins at AIMCOR. Quarterly results also reflect a significant decline in operating income in the Natural Resources segment resulting principally from higher production costs associated with the three longwall moves at Jim Walter Resources. Excluding the effect of after-tax goodwill amortization that is no longer being expensed under FAS 142, pro forma earnings for last year's fourth quarter would have been $0.42 per share. The decline in earnings from last year is attributable principally to the decrease in operating income in the Natural Resources segment. Net sales and revenues were up 10.9% for the quarter versus the year-ago period, with increases occurring in all business segments. These increases reflect higher volumes in the Company's pipe, aluminum and pet coke businesses, as well as higher average sales prices in the Homebuilding segment. Meanwhile, an increase in tons of coal shipped from Mine No. 5 helped boost revenue at Jim Walter Resources. Price reductions in the pipe business partially offset these increases. Earnings before senior debt interest, taxes, depreciation, amortization and non-cash post-retirement health benefits totaled $40.2 million during the fourth quarter, compared with $49.1 million in the prior-year period. 2002 FINANCIAL RESULTS Net income, excluding the impact of adopting FAS 142, was $73.4 million, or $1.64 per diluted share, for the year ended December 31, 2002. This compares with net income of $43.2 million, or $0.95 per diluted share in 2001. The Company reported a net loss of $1.17 per share for 2002, after the $125.9 million after-tax cumulative impact of adopting FAS 142 earlier in the year. Pro forma after-tax earnings for 2001, excluding the impact of FAS 142 goodwill amortization, was $68.9 million, or $1.52 per share. Net sales and revenues were $1.9 billion for 2002, a 1.2% increase from the previous year. Increased unit completions and higher selling prices for homes, higher volumes of aluminum and coke products and increases in coal prices more than offset declines in prices for pipe products and natural gas. Excluding the impact of goodwill amortization and the effect of adopting FAS 142, after-tax earnings increased by $4.5 million in 2002, or 7% from the previous year. Strong performances in the Homebuilding and Financing segments and at JW Aluminum, a substantial decline in interest expense, and $60 million in productivity improvements across all of the businesses more than accounted for this year-over-year improvement in results. Offsetting these improvements were price declines at U.S. Pipe, as well as lower pet coke margins at AIMCOR. At Jim Walter Resources, higher prices for coal, along with claims under business interruption insurance, more - more - 3 than offset the impact of lower production volumes and increased costs associated with the 2001 accident in Mine No. 5. Earnings before senior debt interest, taxes, depreciation, amortization and non-cash post-retirement health benefits totaled $193.8 million for 2002, compared with $221.1 million in 2001. The decrease was due to pricing reductions at U.S. Pipe, partially offset by productivity gains. FOURTH-QUARTER RESULTS BY OPERATING SEGMENT (PRO FORMA EXCLUDING FAS 142 IMPACT AND IMPACT OF 2001 RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES/CREDITS) The Homebuilding segment reported fourth-quarter revenues of $70.3 million compared with $63.1 million in the year-ago period. This increase was primarily the result of higher average net selling prices. Homebuilding completed 1,084 homes during the current quarter at an average net selling price of $64,500, compared with 1,081 homes at a $58,900 average price for the same period the previous year. The higher average net selling price reflects the Company's ongoing strategy to market and sell larger homes with more amenities. Operating income in the fourth quarter increased to $5.2 million from $3.4 million in the prior year period, primarily due to higher average selling prices and lower material costs. Operating income for the year was $17.1 million, up 45% from the previous year on strong growth in completions, higher average sales prices, and productivity improvements. For the year, the segment completed 4,267 homes, up from 4,021 in the previous year. The Financing segment reported quarterly revenues of $57.9 million compared with $57.4 million in the year-ago period. Operating income increased by $2.2 million, to $13.7 million, primarily due to lower interest expense. Prepayment speeds were 6.8% in the fourth quarter, compared to 6.6% in the prior-year period. Portfolio performance remained strong, as delinquencies (the percentage of amounts outstanding over 30 days past due) were unchanged from the previous year at 7.6%. The Industrial Products segment posted $160.2 million in revenues during the fourth quarter, compared to $148.7 million in the year-earlier period. Operating income for the segment increased to $8.8 million compared to $4.8 million in the prior-year period. These results primarily reflect a 28% increase in shipped volumes of aluminum products, principally in building products. JW Aluminum revenues increased $9.7 million in the current quarter while operating income improved $2.8 million from the year-ago period, due to increased shipments and productivity improvements. Results at U.S. Pipe were up $1.2 million from the year-ago period, as increased volumes and productivity improvements offset the impact of a decrease in pipe prices from aggressive competition within the industry. U.S. Pipe's average price in the fourth quarter of 2002 was essentially flat with the third quarter. - more - 4 Operating income for the Carbon and Metals segment was $4.6 million in the fourth quarter, compared to $7.8 million in the same quarter of last year. Lower operating income versus the prior-year period was primarily the result of reduced pet coke margins due to increased material costs from renegotiated supplier contracts. In the Natural Resources segment, all three mines completed scheduled longwall moves during the fourth quarter of 2002, resulting in significant temporary increases in production costs. As a result, the segment reported an operating loss of $4.3 million in the quarter, a $13.0 million decline in operating income from the prior year. With the longwall moves now complete, Jim Walter Resources is expected to return to its high productivity rates and lower production costs. Jim Walter Resources has returned to full production following the 2001 Mine No. 5 accident. The Company's business interruption and property insurance covered the impact on operating results of reduced production and shipments and higher costs during the recovery period. The Company's claims under these policies have been substantially completed and approximately $45 million of insurance recoveries have been received to date. As a result of its progress in collecting its insurance receivables, the Company reduced reserves associated with its insurance claims by $3.5 million during the fourth quarter. Jim Walter Resources sold 1.4 million tons of coal at an average price of $36.58 per ton in the fourth quarter, compared to 1.1 million tons at $34.90 per ton in the prior year's quarter. The natural gas operation sold 2.28 billion cubic feet of gas in the fourth quarter at an average price of $3.66 per thousand cubic feet, compared to 2.36 billion cubic feet at $3.82 per thousand cubic feet in the prior-year quarter. OUTLOOK Based on current internal business forecasts and anticipated market conditions, Walter Industries expects to generate 2003 first-quarter earnings in the range of $0.25 to $0.30 per share, and estimates full-year earnings per share in the range of $1.70 to $1.80. CONFERENCE CALL WEBCAST Walter Industries Chairman and CEO Don DeFosset and members of the Company's leadership team will discuss quarterly results and other general business matters on a conference call and live Webcast to be held on Thursday, February 6, 2003, at 9:00 a.m. Eastern time. To listen to the event live or in archive, visit the Company Web site at WWW.WALTERIND.COM. Walter Industries, Inc. is a diversified company with five principal operating businesses and annual revenues of $1.9 billion. The Company is a leader in homebuilding, home financing, water transmission products, energy services and specialty aluminum products. Based in Tampa, - more - 5 Florida, the Company employs approximately 6,300. For additional news on the Company or investor information, please contact Walter Industries at (813) 871-4404 or visit the corporate Web site. 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 AND EQUIPMENT COSTS AND AVAILABILITY, CHANGES IN EXTRACTION COSTS IN THE COMPANY'S MINING OPERATIONS, CHANGES IN CUSTOMER ORDERS, PRICING ACTIONS BY THE COMPANY'S COMPETITORS, THE ULTIMATE OUTCOME WITH RESPECT TO RECOVERY OF INSURANCE PROCEEDS FROM THE 2001 MINING ACCIDENT, AND GENERAL CHANGES IN ECONOMIC CONDITIONS. RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS ARE MORE FULLY DESCRIBED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY ASSUMES NO DUTY TO UPDATE ITS OUTLOOK STATEMENTS AS OF ANY FUTURE DATE. - more - 6 WALTER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED EARNINGS PER SHARE Unaudited
For the three months ended December 31, --------------------------------- 2002 2001 --------------- ------------- Basic Net Income Per Share $ 0.33 $ 0.28 ============ ============ Weighted average number of basic shares outstanding 44,359,573 44,389,239 ============ ============ Diluted Net Income Per Share $ 0.33 $ 0.28 ============ ============ Weighted average number of diluted shares outstanding 44,636,313 44,691,474 ============ ============
For the twelve months ended December 31, ------------------------- 2002 2001 ----------- --------- Basic Net Income (Loss) per share: Income per share before cumulative effect of change in accounting principle $ 1.66 $ 0.96 Cumulative effect of change in accounting principle, net of tax (2.85) -- ------------ ------------ Basic net income (loss) per share $ (1.19) $ 0.96 ============ ============ Add: Restructuring, impairment and other charges, net of taxes $ 0.02 $ -- Add: Cumulative effect of change in accounting principle, net of tax 2.85 -- ------------ ------------ Net income before restructuring, impairment and other charges $ 1.68 $ 0.96 ============ ============ Weighted average number of basic shares outstanding 44,318,452 44,998,199 ============ ============ Diluted Net Income (Loss) per share: Income per share before cumulative effect of change in accounting principle $ 1.64 $ 0.95 Cumulative effect of change in accounting principle, net of tax (2.81) -- ------------ ------------ Diluted net income (loss) per share $ (1.17)$ 0.95 ============ ============ Add: Restructuring, impairment and other charges, net of taxes $ 0.02 $ -- Add: Cumulative effect of change in accounting principle, net of tax 2.81 -- ------------ ------------ Net income before restructuring, impairment and other charges $ 1.66 $ 0.95 ============ ============ Weighted average number of diluted shares outstanding 44,726,474 45,293,365 ============ ============
- more - 7 WALTER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ($ in Thousands ) Unaudited
For the three months ended December 31, -------------------------------- 2002 2001 ------------- ----------- Net sales and revenues: Net sales $ 431,073 $ 383,409 Time charge income 55,009 51,617 Miscellaneous 6,429 8,171 Excise tax refund claim -- 970 ------------ ------------- 492,511 444,167 ------------ ------------- Cost and expenses: Cost of sales 368,718 302,313 Depreciation 15,581 13,977 Selling, general and administrative 44,674 44,897 Provision for losses on instalment notes 3,325 2,276 Postretirement benefits 2,838 5,471 Interest and amortization of debt expense 36,347 40,408 Amortization of goodwill and other intangibles 1,722 9,142 Restructuring and impairment charges - 6,912 ------------ ------------- 473,205 425,396 ------------ ------------- Income before income tax expense 19,306 18,771 Income tax expense (4,706) (6,472) ------------ ------------- Net Income $ 14,600 $ 12,299 ============ ============= Add: Restructuring, impairment and other net charges, net of taxes -- 237 ------------ ------------- Net income before restructuring, impairment and other net charges, net of tax $ 14,600 $ 12,536 ============ =============
- more - 8 WALTER INDUSTRIES, INC. AND SUBSIDIARIES RESULTS BY OPERATING SEGMENT ($ in Thousands) Unaudited
For the three months ended December 31, ------------------------- 2002 2001 -------- -------- NET SALES AND REVENUES: Homebuilding $ 70,293 $ 63,067 Financing 57,882 57,447 Industrial Products 160,184 148,717 Carbon and Metals 143,325 125,079 Natural Resources 60,686 50,662 Other 6,369 4,967 Consolidating Eliminations (6,228) (5,772) --------- --------- $ 492,511 $ 444,167 ========= ========= OPERATING INCOME (LOSS): Homebuilding $ 5,188 $ 1,155 Financing 13,749 11,516 Industrial Products 8,773 2,170 Carbon and Metals 4,597 (501) Natural Resources (4,255) 17,830 Consolidating eliminations (827) (1,040) --------- --------- Segment operating income 27,225 31,130 General corporate expense 3,323 6,482 Senior debt interest expense 4,596 5,877 --------- --------- Pre-tax income $ 19,306 $ 18,771 ========= ========= Segment operating income $ 27,225 $ 31,130 Add (deduct): Restructuring, impairment and other charges/(credits) -- (2,876) --------- --------- Segment operating income before restructuring, impairment and other charges/(credits) $ 27,225 $ 28,254 ========= ========= EBITDA: (1) Homebuilding $ 6,442 $ 4,592 Financing 15,528 13,420 Industrial Products 17,263 13,344 Carbon and Metals 6,849 3,069 Natural Resources (2,130) 21,404 Other (3,745) (6,690) --------- --------- $ 40,207 $ 49,139 ========= =========
(1) Earnings before senior debt interest, taxes, depreciation, amortization and non-cash OPEB. - more - 9 WALTER INDUSTRIES, INC. AND SUBSIDIARIES RESULTS BY OPERATING SEGMENT EXCLUDING RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES / CREDITS ($ in Thousands) Unaudited
For the three months ended December 31, ------------------------ 2002 2001 --------- ---------- PRO FORMA NET SALES AND REVENUES: Homebuilding $ 70,293 $ 63,067 Financing 57,882 57,447 Industrial Products 160,184 148,717 Carbon and Metals 143,325 125,079 Natural Resources 60,686 49,692 Other 6,369 4,967 Consolidating Eliminations (6,228) (5,772) ---------- ---------- $ 492,511 $ 443,197 ========== ========== Add : Federal excise tax refund claims -- 970 ---------- ---------- Consolidated net sales and revenues $ 492,511 $ 444,167 ========== ========== PRO FORMA OPERATING INCOME (LOSS): (1) Homebuilding $ 5,188 $ 3,427 Financing 13,749 11,541 Industrial Products 8,773 4,797 Carbon and Metals 4,597 7,803 Natural Resources (4,255) 8,782 Consolidating eliminations (827) (1,040) ---------- --------- Segment operating income 27,225 35,310 General corporate expense 3,323 3,169 Senior debt interest expense 4,596 5,877 ---------- --------- Pro forma pre-tax income 19,306 26,264 Add (deduct): Restructuring and impairment (3) -- (6,912) Other (charges)/credits (4) -- 6,548 Goodwill amortization eliminated by FAS 142 (7,129) ---------- --------- Pre-tax income $ 19,306 $ 18,771 ========== ========= EBITDA: (2) Homebuilding $ 6,442 $ 4,592 Financing 15,528 13,445 Industrial Products 17,263 13,344 Carbon and Metals 6,849 9,216 Natural Resources (2,130) 12,356 Other (3,745) (3,450) ---------- --------- EBITDA before cash restructuring, impairment and other charges/credits 40,207 49,503 Cash restructuring, impairment and other (charges)/credits -- (364) ---------- ---------- EBITDA $ 40,207 $ 49,139 ========== =========
(1) Pro Forma excludes goodwill amortization eliminated under FAS 142. (2) Earnings before senior debt interest, taxes, depreciation, amortization and non-cash OPEB. (3) Restructuring and impairment charges in 2001 consisted of : - $5.5 million charge for the shutdown of certain Sloss chemical facilities in Carbon & Metals - $0.7 million charge for severance in Corporate and $0.7 million charge for severance at Aimcor in Carbon & Metals (4) Other (Charges) / Credits in 2001 consisted of: - $1.0 million credit for federal excise tax refund claims in Natural Resources - $5.1 million credit for reduction in liability for Black Lung benefits in Natural Resources - $3.0 million credit for reduction in bad debts reserve in Natural Resources - $2.5 million charge for an adverse verdict in a contract dispute at Corporate - more - 10 WALTER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ($ in Thousands ) Unaudited
For the twelve months ended December 31, --------------------------------- 2002 2001 ----------- --------- Net sales and revenues: Net sales $ 1,700,707 $ 1,664,019 Time charge income 220,499 214,152 Miscellaneous 22,027 29,538 Excise tax refund claim -- 12,197 ----------- ----------- 1,943,233 1,919,906 ----------- ----------- Cost and expenses: Cost of sales 1,394,960 1,333,528 Depreciation 65,660 61,372 Selling, general and administrative 189,592 188,854 Provision for losses on instalment notes 12,399 11,026 Postretirement benefits 15,965 19,348 Interest and amortization of debt expense 154,017 171,624 Amortization of goodwill and other intangibles 7,225 36,981 Loss on mining accident -- 10,834 Restructuring and impairment charges 1,692 6,912 ----------- ----------- 1,841,510 1,840,479 ----------- ----------- Income before income tax expense and cumulative effect of change in accounting principle 101,723 79,427 Income tax expense (28,298) (36,177) ----------- ----------- Income before cumulative effect of change in accounting principle 73,425 43,250 ----------- ----------- Cumulative effect of change in accounting principle (net of income tax of $75,053) (125,947) -- ----------- ----------- Net Income (Loss) $ (52,522) $ 43,250 =========== =========== Add (deduct): Restructuring, impairment and other charges/(credits), net of taxes 1,100 (19) Add: Cumulative effect of change in accounting principle, net of tax 125,947 -- ----------- ----------- Net income before restructuring, impairment and other charges/(credits) and Cumulative effect of change in accounting principle $ 74,525 $ 43,231 =========== ===========
- more - 11 WALTER INDUSTRIES, INC. AND SUBSIDIARIES RESULTS BY OPERATING SEGMENT ($ in Thousands) Unaudited
For the twelve months ended December 31, ------------------------------ 2002 2001 -------- -------- NET SALES AND REVENUES: Homebuilding $ 270,166 $ 237,576 Financing 240,955 238,031 Industrial Products 691,294 716,434 Carbon and Metals 499,216 486,250 Natural Resources 249,823 253,701 Other 12,900 13,132 Consolidating Eliminations (21,121) (25,218) ----------- ------------ $ 1,943,233 $ 1,919,906 =========== ============ OPERATING INCOME: Homebuilding $ 17,109 $ 2,793 Financing 54,957 48,234 Industrial Products 41,890 55,043 Carbon and Metals 12,771 14,977 Natural Resources 22,444 27,331 Consolidating eliminations (4,085) (4,566) ----------- ------------ Segment operating income (loss) 145,086 143,812 General corporate expense 24,420 30,345 Senior debt interest expense 18,943 34,040 ----------- ------------ Pre-tax income (loss) $ 101,723 $ 79,427 =========== ============ Segment operating income (loss) $ 145,086 $ 143,812 Add (deduct): Restructuring, impairment and other charges/(credits), 1,692 (3,269) ----------- ------------ Segment operating income before restructuring, impairment and other charges/(credits) $ 146,778 $ 140,543 =========== ============ EBITDA: (1) Homebuilding $ 21,976 $ 17,200 Financing 62,096 56,397 Industrial Products 76,639 99,032 Carbon and Metals 23,153 34,032 Natural Resources 34,792 44,773 Other (24,881) (30,337) ----------- ----------- $ 193,775 $ 221,097 =========== ============
(1) Earnings before senior debt interest, taxes, depreciation, amortization and non-cash OPEB - more - 12 WALTER INDUSTRIES, INC. AND SUBSIDIARIES RESULTS BY OPERATING SEGMENT EXCLUDING RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES / CREDITS ($ in Thousands) Unaudited
For the twelve months ended December 31, 2002 2001 ----------- ------------ PRO FORMA NET SALES AND REVENUES: Homebuilding $ 270,166 $ 237,576 Financing 240,955 238,031 Industrial Products 691,294 716,434 Carbon and Metals 499,216 486,250 Natural Resources 249,823 241,504 Other 12,900 13,132 Consolidating Eliminations (21,121) (25,218) ----------- ----------- $ 1,943,233 $ 1,907,709 =========== =========== Add : Federal excise tax refund claims -- 12,197 ----------- ----------- Consolidated net sales and revenues $ 1,943,233 $ 1,919,906 =========== =========== PRO FORMA OPERATING INCOME: (1) Homebuilding $ 17,109 $ 11,804 Financing 54,957 48,259 Industrial Products 41,890 65,471 Carbon and Metals 17,041 29,755 Natural Resources 22,444 17,890 Consolidating eliminations (4,085) (4,566) ----------- ----------- Segment operating income 149,356 168,613 General corporate expense 24,420 26,811 Senior debt interest expense 18,943 34,040 ----------- ----------- Pro forma pre-tax income 105,993 107,762 Add (deduct): Restructuring and impairment (3) (4) (1,692) (6,912) Other (charges)/credits (5) (6) (2,578) 6,941 Goodwill amortization eliminated by FAS 142 -- (28,364) ----------- ----------- Pre-tax income $ 101,723 $ 79,427 =========== =========== EBITDA: (2) Homebuilding $ 21,976 $ 17,200 Financing 62,096 56,422 Industrial Products 76,639 99,032 Carbon and Metals 24,845 40,179 Natural Resources 34,792 35,332 Other (24,881) (27,097) ----------- ----------- EBITDA before cash impairment and other charges/credits 195,467 221,068 Cash impairment and other (charges)/credits (376) 29 ----------- ----------- EBITDA $ 195,091 $ 221,097 =========== ===========
(1) Pro Forma excludes goodwill amortization eliminated under FAS 142. (2) Earnings before senior debt interest, taxes, depreciation, amortization and non-cash OPEB. (3) Excludes $1.7 million relating to impairment of assets at AIMCOR Carbon Division in 2002 (4) Restructuring and impairment charges in 2001 consisted of : - $5.5 million charge for the shutdown of certain Sloss chemical facilities in Carbon & Metals - $0.7 million charge for severance in Corporate and $0.7 million charge for severance at Aimcor in Carbon & Metals (5) Excludes $2.6 million bad debt charge off at Sloss in Carbon & Metals in 2002 (6) Other (Charges) / Credits in 2001 consisted of: - $12.2 million credit for federal excise tax refund claims in Natural Resources - $5.1 million credit for reduction in liability for Black Lung benefits in Natural Resources - $3.0 million credit for reduction in bad debts reserve in Natural Resources - $2.5 million charge for an adverse verdict in a contract dispute at Corporate - $10.8 million charge relating to costs associated with the mining accident in Natural Resources - more - 13 WALTER INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($ in Thousands) Unaudited
December 31, December 31, 2002 2001 ---------- ------------ ASSETS Cash and cash equivalents $ 13,361 $ 11,536 Short-term investments, restricted 97,886 126,751 Marketable securities 1,610 1,499 Instalment notes receivable, net 1,717,723 1,689,773 Receivables, net 273,615 223,630 Inventories 250,507 252,781 Prepaid expenses 12,208 8,778 Property, plant and equipment, net 490,216 485,711 Assets held for sale 12,171 12,333 Investments 13,672 13,116 Deferred income taxes 32,904 -- Unamortized debt expense 35,253 39,918 Other long-term assets, net 38,604 44,550 Goodwill and other intangibles, net 215,494 423,720 ---------- ---------- $3,205,224 $3,334,096 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 158,882 $ 115,293 Accrued expenses 119,161 142,565 Income taxes payable 52,223 68,536 Debt: Mortgage-backed/asset-backed notes 1,776,020 1,833,442 Other senior debt 308,900 308,500 Accrued interest 33,162 30,512 Deferred income taxes -- 49,873 Accumulated postretirement benefits obligation 296,402 296,178 Other long-term liabilities 121,480 48,546 Stockholders' equity 338,994 440,651 ---------- ---------- $3,205,224 $3,334,096 ========== ==========
- more - WALTER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS ($ in Thousands) Unaudited
For the twelve months ended December 31, 2002 2001 ------------ ----------- OPERATING ACTIVITIES Net income (loss) $ (52,522) $ 43,250 Charges to income not affecting cash: Depreciation 65,660 61,372 Cumulative effect of change in accounting principle, net of tax 125,947 -- Provision for deferred income taxes 20,807 21,680 Accumulated postretirement benefits obligation 224 9,275 Provision for other long-term liabilities 687 (15,566) Amortization of goodwill and other intangibles 7,225 36,981 Amortization of debt expense 4,758 5,328 Restructuring, Impairment and other charges/(credits) 1,316 6,912 ----------- ----------- 174,102 169,232 Decrease (increase) in assets: Short-term investments, restricted 28,865 (25,850) Marketable securities (111) 481 Instalment notes receivable, net (27,950) (3,496) Receivables, net (49,985) 15,990 Inventories 2,274 8,660 Prepaid expenses (3,430) 4,301 Increase (decrease) in liabilities: Accounts payable 43,589 (38,974) Accrued expenses (24,720) 9,215 Income taxes payable (16,314) 7,509 Accrued interest 2,650 2,281 ----------- ----------- Cash flows from operating activities 128,970 149,349 ----------- ----------- INVESTING ACTIVITIES Additions to property, plant and equipment, net of retirements (70,003) (74,619) Decrease (increase) in investments and other assets, net 5,390 (8,297) ----------- ----------- Cash flows used in investing activities (64,613) (82,916) ----------- ----------- FINANCING ACTIVITIES Issuance of debt 693,714 1,126,328 Retirement of debt (750,736) (1,165,719) Additions to unamortized debt expense (93) (2,814) Purchases of treasury stock (1,887) (18,452) Dividends paid (5,314) (5,854) Net unrealized gain (loss) on hedge (958) (87) Exercise of employee stock options 2,722 289 ----------- ----------- Cash flows used in financing activities (62,552) (66,309) ----------- ----------- EFFECT OF EXCHANGE RATE ON CASH 20 (101) ----------- ----------- Net increase in cash and cash equivalents 1,825 23 Cash and cash equivalents at beginning of period 11,536 11,513 ----------- ----------- Cash and cash equivalents at end of period $ 13,361 $ 11,536 =========== ===========
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