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Address: 4211 W Boy Scout Blvd., Tampa, FL 33607; (813) 871-4811; www.walterind.com
Business: Coal and natural gas production, home building and finance
Ticker symbol, market: WLT, NYSE
Market capitalization: $3.6-billion
Annual dividend: 20 cents
Top officers: Victor Patrick, vice chairman, CFO and general counsel; George Richmond, CEO of subsidiary Jim Walter Resources
Employees: 2,500
Revenue: $1.2-billion, down 2.5 percent
Net income: $112-million, down 43.5 percent
Per share: $2.13, down 45 percent
Return on equity: 199.8 percent
Two-year stock return: +66.6 percent
Biggest challenge: Thanks to the record prices being paid for its coal and to ongoing efforts to sell its home-building and mortgage units, Walter Industries' cash flow may soon look more like a geyser. A key question will be what to do with all that money. Increasing the company's coal reserves will be tempting, but acquisitions will be costly in this market environment and making existing mines more productive must not compromise worker safety. Walter could return some money to shareholders via stock buybacks or extra dividends, but that may not be the best use. The company also could pay off some of its debt.
Coal price spurs investment in mining
Gary Shortt's commute to work is tougher than most. Car ride: 32 miles. Elevator: 1,735 feet, straight down. Underground rail car: 7 miles.
But these days, the 54-year-old coal-mine supervisor is feeling downright spunky about going to work. You might too, if your employer and its stock price were doing as well as Tampa's Walter Industries. With metallurgical coal fetching record prices in the global marketplace — it's used to turn lead into steel — subsidiary Jim Walter Resources of Brookwood, Ala., is expanding production as fast as it safely can.
Shortt is seeing the growth firsthand. His crew of 45 operates the only longwall machine in Mine No. 7. But Jim Walter is gearing up to add a second 850-foot-wide mechanism and crew, preparations for which cost the company $72-million last year.
In a small way, Shortt is sharing in Walter's stock-price surge; the company provided matching shares for open-market purchases he made. But job security may be the biggest benefit.
"When the (coal) pricing's low, then you're kind of worried if the mine's going to stay, if it's going to exist," he said. "It's always a better feeling to know you're making a lot of money than just squeaking by."
—Scott Barancik, Times Staff Writer
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