- Clears Way for Last Step in Transformation into Pure Play Natural Resources
and Energy Company -
TAMPA, Fla., Jan. 6 /PRNewswire-FirstCall/ -- Walter Industries, Inc.
(NYSE: WLT) announced today the closure of its Jim Walter Homes subsidiary.
Jim Walter Homes built more than 350,000 homes during its history, but has not
been profitable in several years. The Company said it expects to record a
pre-tax charge of approximately $8 - $10 million in the fourth quarter 2008
related to the closure of the business.
(Photo: http://www.newscom.com/cgi-bin/prnh/20090106/CLTU029-a )
(Photo: http://www.newscom.com/cgi-bin/prnh/20090106/CLTU029-b )
"The story of Jim Walter Homes began as World War II ended and soldiers
came home to pursue the American Dream. Regrettably, it ends at a time when
the fundamentals of the homebuilding industry have deteriorated in ways never
seen before," said Walter Industries Chairman Michael T. Tokarz.
Tampa entrepreneur Jim Walter founded Jim Walter Homes in November 1946,
when he used $395 in savings to buy and sell his first "shell" home, for a
profit of $300. As a result of the success of Jim Walter Homes, Jim Walter
was able to build a Fortune 500 conglomerate with businesses as diverse as
mortgage financing, coal mining and ductile iron pipe manufacturing. The
Company completed its spin off of Mueller Water Products, which encompassed
its interest in the ductile iron pipe and water products businesses, in
December 2006. Mueller Water Products continues to be listed on the New York
Stock Exchange today.
For the last several years the Company has pursued a strategy to create
shareholder value by concentrating on its core natural resources and
energy-related businesses. The Company expects to complete this strategy when
the planned spin off of the Company's Financing business is completed in early
"Once we complete the separation of our Financing business, Walter
Industries will be re-positioned as a "pure play" natural resources and energy
company," Tokarz said. "The businesses that comprised Walter Industries when
we undertook this important strategy will soon exist independently as three
publicly traded companies and, in the process, we will have created
significant value for our shareholders."
Despite the efforts of Jim Walter Homes' management and employees,
including a major restructuring in 2008 that closed nearly half of the Jim
Walter Homes' sales centers, the business has remained challenged. Efforts to
sell the business were unsuccessful in the face of the unprecedented
conditions in the housing industry and tightness in the credit markets.
Approximately 230 people will be affected by the closure, including
approximately 45 employees of the Jim Walter Homebuilding Group's headquarters
Closed branches include: Albany, Ga.; Birmingham, Ala.; Alexandria, La.;
Albuquerque, NM; Asheville, NC; Columbus, Miss.; Baton Rouge, La.; Beaumont,
Texas; Cayce, SC; La Grange, Ga.; Bryan, Texas; Charleston, SC; Montgomery,
Ala.; Hammond, La.; Cleveland, Texas; Fayetteville, NC; Muscle Shoals, Ala.;
Hattiesburg, Miss.; Corpus Christi, Texas; Florence, SC; Columbia, Tenn.;
Houma, La.; Ft. Worth, Texas; Jacksonville, Fla; Byhalia, Miss.; Laurel,
Miss.; Houston; Panama City, Fla.; Oxford, Ala.; McComb, Miss.; N. San
Antonio, Texas; Pensacola, Fla.; Phenix City, Ala.; Meridian, Miss.; Oklahoma
City, Okla.; Savannah, Ga.; Tupelo, Miss.; Pearl, Miss.; Rosenberg, Texas;
Tallahassee, Fla.; Tuscaloosa, Ala.; Shreveport, La.; Terrell, Texas and
Those employees affected by this announcement will be eligible for
unemployment compensation and are expected to receive severance benefits in
line with Company policy.
The Company stressed that while sales efforts will cease immediately, Jim
Walter Homes will meet all of its obligations to customers with homes in
progress as the business is wound down. At Dec. 31, 2008, Jim Walter Homes had
approximately 150 homes under construction.
Customers of Jim Walter Homes who have questions or concerns about a home
under construction should call 1-800-925-8374, ext. 4444.
Tokarz added that Tampa will remain the headquarters for Walter
Industries. The approximately 50 corporate employees are not affected by this
"Walter Industries has a long history in the Tampa community -- a history
we are excited to continue following our transformation," he said.
Following the spin off, the Financing business, which will operate as
Walter Investment Management, will also be based in Tampa.
About Walter Industries, Inc.
Walter Industries, Inc., based in Tampa, Fla., is a leading producer and
exporter of metallurgical coal for the global steel industry and also produces
steam coal, coal bed methane gas, furnace and foundry coke and other related
products. Walter Industries has annual revenues of approximately $1.4 billion
and employs approximately 2,500 people. For more information about Walter
Industries, please visit Walter Industries' Web site at 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, including expressions such as "believe," "anticipate," "expect,"
"estimate," "intend," "may," "will," and similar expressions involve known and
unknown risks, uncertainties, and other factors that may cause Walter
Industries' or Hanover's actual results in future periods to differ materially
from the expectations expressed or implied by such forward-looking statements.
These factors include, among others, the following: the market demand for
Walter Industries' and Hanover's products as well as changes in costs and the
availability of raw material, labor, equipment and transportation; changes in
weather and geologic conditions; changes in extraction costs, pricing and
assumptions and projections concerning reserves in Walter Industries' mining
operations; changes in customer orders; pricing actions by Walter Industries'
and Hanover's competitors, customers, suppliers and contractors; changes in
governmental policies and laws; further changes in the mortgage-backed capital
markets; changes in general economic conditions; and the successful
implementation and anticipated timing of any strategic actions and objectives
that may be pursued, including the announced separation of the Financing
business from Walter Industries and strategic alternatives that may be pursued
related to Walter Industries' Homebuilding business. In particular, the
separation of Walter Industries' Financing business is subject to a number of
closing conditions which may be outside of Walter Industries' control.
Forward-looking statements made by Walter Industries' in this release, or
elsewhere, speak only as of the date on which the statements were made. Any
forward-looking statements should be considered in context with the various
disclosures made by Walter Industries and Hanover about our respective
businesses, including the Risk Factors described in Walter Industries' 2007
Annual Report on Form 10-K, the Risk Factors described in Hanover's 2007
Annual Report on Form 10-K, and each of Walter Industries' and Hanover's other
filings with the Securities and Exchange Commission. Neither Walter Industries
nor Hanover undertakes any obligation to update its forward-looking statements
as of any future date.
Additional Information and Where to Find It
In connection the proposed spin-off of the Financing business, JWH Holding Company, LLC, a wholly-owned subsidiary of Walter Industries, Inc. and the proposed merger with Hanover Capital Mortgage Holdings, Inc. and certain related transactions, Hanover Capital Mortgage Holdings, Inc. filed a registration statement on Form S-4 containing a preliminary proxy statement/prospectus with the SEC (Registration No. 333-155091), and Hanover Capital Mortgage Holdings, Inc. will be filing other documents regarding the proposed transaction with the SEC as well. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE FINAL PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy statement/prospectus will be mailed to stockholders of Hanover Capital Mortgage Holdings, Inc. and Walter Industries, Inc. Stockholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about Hanover Capital Mortgage Holdings, Inc. and Walter Industries, Inc., without charge, at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, at Hanover Capital Mortgage Holdings, Inc.’s Web site (http://www.hanovercapitalholdings.com).
Walter Industries and Hanover and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed merger and related transactions. Information regarding Walter Industries' directors and executive officers is available in Walter Industries' proxy statement for its 2008 annual meeting of stockholders and Walter Industries' 2007 Annual Report on Form 10-K, which were filed with the SEC on March 19, 2008, and March 7, 2008, respectively, and information regarding Hanover's directors and executive officers is available in Hanover's proxy statement for its 2008 annual meeting of stockholders and Hanover's 2007 Annual Report on Form 10-K, which were filed with the SEC on April 24, 2008, and April 2, 2008, respectively. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in Hanover's proxy statement/prospectus and other materials referred to in Hanover's proxy statement/prospectus.
SOURCE Walter Industries, Inc.
Vice President - Investor Relations
Michael A. Monahan
Director - Corporate Communications