TAMPA, Fla., May 1 /PRNewswire-FirstCall/ -- Walter Industries, Inc.(NYSE:WLT)today reported income from continuing operations of $0.5 million, or $0.01 per diluted share for the first quarter ended March 31, 2008 compared to $32.1 million, or $0.61 per diluted share, in the first quarter 2007.

First quarter 2008 results include pre-tax charges of $28.0 million, or $0.35 per diluted share, in the Financing and Homebuilding businesses. These charges were related to an interest rate hedge loss, the previously announced restructuring of Jim Walter Homes and an additional discount arising from Homebuilding's transfer of instalment notes receivable to Financing.

"Our results for the quarter reflect $36.5 million in operating income from Natural Resources and Sloss. Our metallurgical coal production and operating performance were in line with our previously announced expectations," said Walter Industries Chairman Michael T. Tokarz. "However, the unprecedented disruption in the residential mortgage market negatively impacted results in the non-core portion of our business for the quarter. In response, we took decisive actions to further our strategy of separating these businesses from Walter Industries."

Metallurgical Coal Contract Settlements

Walter Industries also announced today that it has settled approximately two million metric tons of its 2008-2009 metallurgical coal tonnage in excess of $315 per metric ton FOB Port. The Company expects to settle another 1.1 million metric tons over the next few weeks in a similar price range and has an additional 0.6 million metric tons available for the second quarter 2009 that will be priced later this year.