Walter Industries, Inc. Announces Share Repurchase Program and Acquisition of Tuscaloosa Resources, Inc.
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o Board Approves $25.0 Million Open Market Share Repurchase Program
o Company Agrees to Acquire Birmingham, Ala.-based Surface Coal Miner
TAMPA, Fla., Aug. 14 /-- Walter Industries, Inc. (NYSE:WLT) announced today that its Board of Directors has approved a $25.0 million open market share repurchase program. The Company also announced the acquisition of Tuscaloosa Resources, Inc., a Birmingham, Ala.-based surface coal producer for the industrial and steam coal markets.
"This share repurchase program reflects the Board's confidence in the long-term outlook for Walter Industries," said Michael T. Tokarz, chairman of Walter Industries. "Our strong cash flows allow the Company to not only make investments and acquisitions in our businesses, but also deploy capital to buy back shares."
The Company also announced that its wholly owned subsidiary, United Land Corporation, has agreed to acquire Tuscaloosa Resources, Inc. (TRI) for $21.7 million in cash and assumed debt.
TRI's mines, which have historically produced approximately 800,000 tons of high BTU, primarily low sulfur coal per year for the industrial and electric utility markets, are located in Brookwood, Ala., near United Land's barge load-out facility and Jim Walter Resources' existing operations. The close proximity of TRI to the Company's existing infrastructure is expected to provide opportunities for revenue and cost-related synergies, including opportunities to blend TRI's coal production with the Company's existing coal products, such as pond fine material and production from Kodiak Mining, to maximize profitability. Tuscaloosa Resources controls approximately 8.0 million tons of coal reserves, and generated a historical three-year average EBITDA of approximately $7.5 million.
"We are excited about this acquisition," said Tokarz. "The addition of TRI diversifies our production base, accelerates our ability to access United Land's approximately 10 million tons of controlled surface coal deposits and provides an immediate and profitable platform to grow our domestic Natural Resources business."
The transaction, which includes $13.3 million in cash and the assumption of approximately $8.4 million in net debt, is subject to certain closing conditions and adjustments. The acquisition is expected to be completed in the third quarter and is projected to be accretive to earnings and cash flow in 2008.
In conjunction with the TRI acquisition, Charles C. "Chuck" Stewart has been named president of United Land. Stewart's management responsibilities now include all of United Land's coal operations, including TRI and Kodiak Mining. In addition to this role, he remains president of Sloss Industries. Prior to his role at Sloss, Stewart spent 25 years in progressively responsible roles at Jim Walter Resources, most recently as vice president of engineering. Stewart holds a Master's Degree in Business Administration from Samford University and a Bachelor's Degree in Mining Engineering from the University of Alabama.
Jan Kizziah, vice president of operations for Tuscaloosa Resources, Inc., will continue in his role and will report to Stewart. No significant changes to TRI's headcount are currently planned.
About Tuscaloosa Resources, Inc.
Founded in 1995, Tuscaloosa Resources, Inc. is a low-cost producer of surface coal for the industrial and steam coal markets. Based in Birmingham, Ala., it employs approximately 100 people.
About Walter Industries
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. The Company also operates a mortgage financing and affordable homebuilding business. The Company has annual revenues of approximately $1.3 billion and employs approximately 2,800 people. For more information about Walter Industries, please visit the Company Web site at www.walterind.com.
Source: Walter Industries, Inc.
CONTACT: Investors, Mark H. Tubb, Vice President - Investor Relations,
+1-813-871-4027, mtubb@walterind.com; Media, Michael A. Monahan,
+Director -
Corporate Communications, +1-813-871-4132, mmonahan@walterind.com
Web site: www.walterind.com/
