AIRGAS, INC. REPORTS FOURTH QUARTER AND FISCAL 1999 RESULTS.RADNOR Radnor may refer to:
Airgas Airgas, Inc. (NYSE: ARG), headquartered in Radnor Township, Pennsylvania, through its subsidiaries, is the largest U.S. distributor of industrial, medical and specialty gases (delivered in packaged or cylinder form), and hardgoods (welding, safety and related products). , Inc. (NYSE-ARG) today reported sales of $384 million for the quarter ended March 31, 1999, a decrease of 1% from $388 million in the fourth quarter last year. After-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. cash flow (net earnings, excluding special charges and non-recurring gains, plus depreciation, amortization and deferred income taxes) was $36.7 million, or $.51 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, in the 1999 fourth quarter compared to $33.7 million, or $.47 per diluted share, in the 1998 fourth quarter. Net earnings (excluding special charges and non-recurring gains) were $7.2 million, or $.10 per diluted share, in both periods. Including special charges and non-recurring gains, net earnings for the quarter ended March 31, 1999 were $8.1 million, or $.11 per diluted share, compared to a loss of $5.2 million, or $.07 per diluted share, a year ago. For the year ended March 31, 1999, sales increased 8% to $1.56 billion from $1.45 billion in fiscal year l998. After-tax cash flow (excluding special charges and non-recurring gains) was $138.3 million, or $1.93 per diluted share, compared to $132.8 million, or $1.88 per diluted share, a year earlier. Net earnings (excluding special charges and non-recurring gains) were $34.5 million, or $.48 per diluted share, in fiscal year 1999 compared to $42.6 million, or $.60 per diluted share, in fiscal year 1998. Including special charges and non-recurring gains, net earnings for the year ended March 31, 1999 were $51.9 million, or $.72 per diluted share, compared to $40.5 million, or $.57 per diluted share, a year ago. Results for the year ended March 31, 1999 include non-recurring after-tax gains of $17.4 million, or $.24 per diluted share, primarily due to the December December: see month. 1998 divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Company's calcium carbide calcium carbide n. A grayish-black crystalline compound, CaC2, obtained by heating pulverized limestone or quicklime with carbon and used to generate acetylene gas, as a dehydrating agent, and in the manufacture of graphite and hydrogen. and carbon products operations. Results for the year ended March 31, 1998 include after-tax special charges of $14.3 million, or $.20 per diluted share, offset by non-recurring after-tax gains of $12.3 million, or $.17 per diluted share. Peter McCausland, Airgas' chairman and chief executive officer, said, "In the fourth quarter, we continued to see weakness in many of our markets, though they appear to have bottomed. Higher same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. for gases and rent this quarter compared to last year were offset by lower hardgoods sales resulting in marginally mar·gin·al adj. 1. Of, relating to, located at, or constituting a margin, a border, or an edge: the marginal strip of beach; a marginal issue that had no bearing on the election results. 2. lower same-store sales in our Distribution segment. Repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. expenses continued to depress de·press v. 1. To lower in spirits; deject. 2. To cause to drop or sink; lower. 3. To press down. 4. To lessen the activity or force of something. operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . "We are entering the new fiscal year with cautious optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. . We expect improving operating margins resulting from cost improvement actions, benefits from the ongoing rollout of our integrated distribution infrastructure and modest same-store sales growth. We continue to aggressively manage capital expenditures and working capital. Although this has been one of Airgas' most challenging years, our management team and associates are confident that the Company is executing the right strategy by managing and investing to meet our customers' requirements. Airgas is well positioned to benefit as the industrial economy recovers and to create value for our shareholders." Airgas, Inc. is the largest distributor of industrial, medical and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. gases and related equipment, and the third largest distributor of safety supplies, in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Airgas' integrated distributor network consists of more than 700 locations, including branch locations, distribution centers, catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. and inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound and outbound out·bound adj. Outward bound; headed away: outbound trains. Adj. 1. outbound - that is going out or leaving; "the departing train"; "an outward journey"; "outward-bound ships" telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. operations. Airgas can be visited on the internet at www.airgas.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release may contain statements that are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , as that term is defined by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 or by the Securities and Exchange Commission in its rules, regulations and releases. Airgas intends that such forward-looking statements be subject to the safe harbors Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created thereby. All forward-looking statements are based on current expectations regarding important risk factors, and the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement include underlying market conditions, growth in same-store sales, improvement in operating margins, the ability to manage working capital, costs and potential disruptive disruptive /dis·rup·tive/ (-tiv) 1. bursting apart; rending. 2. causing confusion or disorder. effects of the "Repositioning for Growth" initiative, the Company's ability to reduce costs, implementation of information technology projects, any potential problems relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Year 2000 matters, the success and timing of intended divestitures and other factors described in the Company's reports, including Form 10-Q Form 10-Q See 10-Q. dated December 31, 1998, filed by the Company with the Securities and Exchange Commission. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statements of earnings and consolidated condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. balance sheets follow on pages 3 through 7. -0-
AIRGAS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS(a)
(Amounts in thousands, except per share data) (Unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
1999 1998 1999 1998
---- ---- ---- -----
Net sales:
Distribution $351,800 $350,130 $1,406,184 $1,321,958
Gas Operations 31,730 38,282 155,034 126,032
------- ------- --------- ---------
Total net sales 383,530 388,412 1,561,218 1,447,990
------- ------- --------- ---------
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 194,506 193,169 768,568 716,718
Gas Operations 14,188 20,992 69,487 62,820
Selling, distribution
and administrative
expenses 130,156 129,694 523,241 467,884
Depreciation and
amortization 22,077 19,861 87,926 76,670
Special charges,
net(b) -- 19,450 (1,000) 4,950
------- ------- --------- ---------
Total costs
and expenses 360,927 383,166 1,448,222 1,329,042
------- ------- --------- ---------
Operating income (loss):
Distribution 23,201 23,783 98,447 111,472
Gas Operations (598) 913 13,549 12,426
Special charges, net(b) -- (19,450) 1,000 (4,950)
------- ------- ------- --------
Total operating
income 22,603 5,246 112,996 118,948
Interest expense, net (14,071) (14,056) (60,298) (53,290)
Other income, net (c) 1,474 325 26,714 2,813
Equity in earnings of
unconsolidated
affiliates (d) 2,204 1,669 7,042 2,931
Minority interest (42) (36) (93) (873)
------- ------- ------- -------
Earnings (loss) before
income taxes 12,168 (6,852) 86,361 70,529
Income tax expense
(benefit) 4,087 (1,665) 34,437 29,989
------- ------- ------- -------
Net earnings (loss) $ 8,081 $ (5,187) $ 51,924 $ 40,540
======= ======= ======= =======
Net earnings
(excluding special charges
and non-recurring
gains)(e) $ 7,159 $ 7,245 $ 34,482 $ 42,565
======= ======= ======= ========
Per share data:
Basic earnings
per share $ .12 $ (.07) $ .74 $ .59
Diluted earnings
per share $ .11 $ (.07) $ .72 $ .57
Per share data:
(excluding special charges and
non-recurring gains)(e)
Basic earnings
per share $ .10 $ .10 $ .49 $ .62
Diluted earnings
per share $ .10 $ .10 $ .48 $ .60
Weighted average shares outstanding:
Basic 70,100 69,700 70,000 68,700
Diluted 71,700 71,600 71,700 70,800
See notes to financial statements on pages 5 and 6.
AIRGAS, INC.
SUPPLEMENTAL - PRIOR SEGMENT PRESENTATION (1)
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
1999 1998 1999 1998
---- ---- ---- -----
Net sales:
Distribution $287,792 $286,193 $1,148,420 $1,098,588
Direct Industrial 64,008 63,937 257,764 223,370
Manufacturing 31,730 38,282 155,034 126,032
------- ------- --------- ---------
Total net sales 383,530 388,412 1,561,218 1,447,990
------- ------- --------- ---------
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 148,195 146,609 579,682 555,392
Direct Industrial 46,311 46,560 188,886 161,326
Manufacturing 14,188 20,992 69,487 62,820
Selling, distribution
and administrative
expenses 130,156 129,694 523,241 467,884
Depreciation and
amortization 22,077 19,861 87,926 76,670
Special charges, net(b) -- 19,450 (1,000) 4,950
------- ------- -------- --------
Total costs
and expenses 360,927 383,166 1,448,222 1,329,042
------- ------- ---------- ---------
Operating income (loss):
Distribution 22,569 22,592 95,650 105,371
Direct Industrial 632 1,191 2,797 6,101
Manufacturing (598) 913 13,549 12,426
Special charges, net(b) -- (19,450) 1,000 (4,950)
------- ------- --------- ---------
Total operating
income 22,603 5,246 112,996 118,948
------- ------- --------- ---------
(1) The supplemental financial results are presented in the
operating segment format utilized prior to the implementation of SFAS
131. Also see note (a) on page 5.
See notes to financial statements on pages 5 and 6.
(a) The Company has redefined its operating segments and is
reporting its results of operations based on the new
management structure established under the "Repositioning
Airgas for Growth" initiative. Effective with its year
ended March 31, 1999, Airgas implemented Statement of
Financial Accounting Standards No. 131, "Disclosure about
Segments of an Enterprise and Related Information" ("SFAS
131"). Comparative 1998 information has been reclassified
to conform to the current presentation. The Company's new
operating segments consist of Distribution and Gas
Operations. Descriptions of the new operating segments
are as follows:
The Distribution segment accounts for 90% of consolidated
sales and reflects the integration of the traditional
industrial gas distribution companies (formerly reported
under the "Distribution segment") and the safety products
and industrial tool and supplies distribution companies
(formerly reported under the "Airgas Direct Industrial
segment"). These companies have been combined into one
segment to reflect management's approach to evaluating
performance and deciding on how to allocate resources in
the future as the Company continues to develop the
centralized purchasing, shared distribution facilities
and multi-channel marketing initiatives begun under the
Repositioning.
The segment entitled Gas Operations consists of certain
domestic operating companies, principally dry ice and
carbon dioxide, and the Company's foreign operations.
These companies, which individually do not meet the
criteria of SFAS 131, were formerly reported under the
"Manufacturing segment."
(b) Special charges for the year ended March 31, 1999 include
reserve adjustments of $1 million ($570 thousand
after-tax) resulting from the divestiture of two
non-core businesses.
Special charges for the year ended March 31, 1998 include
fourth quarter charges of $22.4 million ($14.3 million
after-tax) consisting of the impairment write-down of
property, equipment and goodwill, reserves related to the
divestiture of several non-core businesses, facility exit
costs and severance. Special charges for the year ended
March 31, 1998 were offset by a non-recurring gain of
$14.5 million ($9.4 million after-tax) from a partial
recovery of refrigerant losses related to the fiscal 1997
fraudulent breach of contract by a third-party supplier
of refrigerant gas and a fourth quarter net gain of $3
million ($1.9 million after-tax) related to an
acquisition break-up fee.
(c) Other income, net, for the quarter ended March 31, 1999
includes a $1.5 million ($922 thousand after-tax)
non-recurring gain resulting from a settlement of certain
matters related to the December 1998 divestiture of the
Company's calcium carbide and carbon products operations.
Other income, net, for the year ended March 31, 1999
includes a $25.4 million ($15 million after-tax)
non-recurring gain resulting from the divestiture of the
Company's calcium carbide and carbon products operations.
Other income, net, for the year ended March 31, 1998
includes a $1.5 million ($980 thousand after-tax)
non-recurring gain resulting from the divestiture of a
non-core business.
(d) Equity in earnings of unconsolidated affiliates for the
year ended March 31, 1999 includes a $1.8 million
after-tax non-recurring gain from insurance proceeds
recognized by an equity affiliate.
(e) The results for the year ended March 31, 1999 exclude:
-- the $15 million after-tax effect of the
non-recurring gain from the divestiture of the
Company's calcium carbide and carbon products
operations, of which $922 thousand
represented a fourth quarter gain as
described in footnote(c).
-- the $1.8 million after-tax non-recurring gain from
insurance proceeds recognized by an equity
affiliate.
-- the $570 thousand after-tax non-recurring gain
resulting from the first quarter divestiture of
two non-core businesses.
The results for the year ended March 31, 1998 exclude:
-- the fourth quarter $14.3 million after-tax effect of
special charges noted in footnote(b).
-- the $11.3 million after-tax effect of the
non-recurring gains from a partial recovery of
refrigerant losses and an acquisition break-up
fee noted in footnote(b).
-- the $980 after-tax gain related to the
divestiture of a non-core business.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
March 31, March 31,
1999 1998
ASSETS
Trade receivables, net $ 195,708 $ 186,342
Inventories 154,424 154,937
Prepaid expenses and other
current assets 28,710 25,555
--------- ---------
TOTAL CURRENT ASSETS 378,842 366,834
Property and equipment, net 717,859 687,304
Goodwill, net 428,349 410,753
Other non-current assets 173,422 176,583
--------- ---------
TOTAL ASSETS $1,698,472 $1,641,474
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 14,997 $ 12,150
Accounts payable, trade 85,486 84,602
Accrued expenses and other
current liabilities 108,295 128,806
--------- ---------
TOTAL CURRENT LIABILITIES 208,778 225,558
Long-term debt 852,489 830,845
Deferred income taxes 142,675 121,356
Other non-current liabilities 23,585 36,842
Stockholders' equity 470,945 426,873
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,698,472 $1,641,474
========= =========
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