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.
“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 2009.
“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 in Tampa.