AIRGAS REPORTS STRONG FISCAL THIRD QUARTER RESULTS.Business Editors 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 NYSE See: New York Stock Exchange - ARG See argument. arg - argument ) today reported results for the quarter and nine-month period ended December December: see month. 31, 1999. Net earnings, excluding certain gains and charges, increased 68% to $.15 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 current quarter versus a year ago, driven by improved gross margins and lower expenses. 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. were essentially flat. 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 improved 13% to $.50 per diluted share. Peter McCausland, chairman and chief executive officer, commented, &uot;Our significant growth in earnings and cash flow are impressive given the ongoing weakness in several important customer segments. The improved gross margin reflects benefits from our new hardgoods distribution infrastructure, higher gas margins and a shift in product mix. Our people in the field are working hard to control expenses and capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. while continuing to build our infrastructure. As a result, our business is generating solid cash flow, which has allowed us to make acquisitions, buy back stock and pay down debt. &uot;We are beginning to sense some growing 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. from our operating management regarding prospects of improved demand in our core business. While we've we've Contraction of we have. we've have been experiencing growth in national accounts and certain strategic product areas, the eventual strengthening of our core customer segments must, to a large degree, drive earnings and cash flow growth in the future. I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in pleased that we've been able to meet our earnings targets for three consecutive quarters. Achieving our plan for the fourth quarter, however, may require an improvement in our daily sales rate.&uot; Comparing the quarter ended December 31, 1999 with the same period last year, after-tax cash flow (net earnings, excluding certain gains and charges, plus depreciation, amortization and deferred income taxes) was $35.7 million, or $.50 per diluted share, compared to $31.7 million, or $.44 per diluted share. Excluding certain gains and charges netting to less than $.01 per diluted share, net earnings were $10.3 million, or $.15 per diluted share, versus net earnings in last year's quarter, also excluding non-recurring gains, of $6.1 million, or $.09 per diluted share. Sales were $369 million this quarter compared to $380 million last year. Net divestitures and acquisitions accounted for more than $10 million of the sales decline. For the nine-month period, after-tax cash flow increased to $108.5 million, or $1.53 per diluted share, compared to $101.6 million, or $1.42 per diluted share, during the same period last year. Net earnings, excluding certain gains and charges in both the current and prior years, were $31.3 million, or $.44 per diluted share, compared to $27.3 million, or $.38 per diluted share. Sales were $1.14 billion compared to $1.18 billion in the prior year. During the quarter ended December 31, 1999, cost of products sold for the Gas Operations segment included a $3.8 million ($2.2 million after-tax) charge related to certain specialty gases inventories. Also in the current quarter, the Company recorded a $2.8 million ($1.7 million after-tax) gain primarily related to an insurance settlement pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to a fiscal 1997 loss. Total same-store sales were flat in the fiscal third quarter versus the same period a year ago. Sales in the Distribution segment were down 1.3% reflecting an increase of 1.6% for gas and rent offset by a 3.3% decline in hardgoods sales. Same-store sales for the Gas Operations segment were 15% higher. Total capital expenditures for the quarter were $17 million versus $26 million in last year's quarter. Capital spending year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. was $48 million versus $82 million last year. During the quarter, the Company purchased 1.1 million shares of its common stock at a total cost of $10.5 million. For the first nine months of the fiscal year, the Company purchased 2.3 million shares at a total cost of $24.8 million. There are approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4.8 million shares remaining under the current share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. authorization The right or permission to use a system resource; the process of granting access. See access control. . The slides to be presented during the Company's earnings teleconference, along with the teleconference replay instructions are available on the Company's Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the site www.airgas.com. The replay will be accessible for one week starting at approximately 11:00 a.m. Eastern Time on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , January January: see month. 28, 2000. Airgas, Inc. is the largest distributor of industrial, medical and specialty 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 approximately 700 locations, including branches, packaged gas fill plants, distribution centers, 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. 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 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, improved demand, growth in national accounts and certain strategic product areas, net earnings and cash flow growth, the Company's ability to improve its daily sales rate and gross margins, meet earnings targets, and control expenses and capital spending, and other factors described in the Company's reports, including Form 10-Q Form 10-Q See 10-Q. dated September September: see month. 30, 1999, 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.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
1999 1998(a) 1999 1998(a)
---- ---- ---- ----
Net sales:
Distribution $339,761 $339,623 $1,032,701 $1,054,384
Gas Operations 29,673 40,700 103,515 123,304
-------- -------- --------- ---------
Total net sales 369,434 380,323 1,136,216 1,177,688
-------- -------- --------- ---------
Costs and expenses:
Cost of products
sold (excluding
depreciation and
amortization)
Distribution 180,126 183,922 555,205 574,062
Gas Operations (b) 15,471 17,792 44,506 55,299
Selling, distribution
and administrative
expenses 125,676 130,932 381,822 393,085
Depreciation and
amortization 21,986 22,504 67,105 65,849
Special charges (c) (2,829) - (2,829) (1,000)
-------- -------- --------- ---------
Total costs and expenses 340,430 355,150 1,045,809 1,087,295
-------- -------- --------- ---------
Operating income:
Distribution 26,622 20,634 79,290 75,246
Gas Operations (447) 4,539 8,288 14,147
Special charges (c) 2,829 - 2,829 1,000
-------- -------- --------- --------
Total operating
income 29,004 25,173 90,407 90,393
Interest expense, net (13,949) (15,701) (42,167) (46,227)
Other income, net (d) 1,234 24,358 16,639 25,189
Equity in earnings
of unconsolidated
affiliates (e) 663 2,862 2,388 4,838
------ ------- -------- ------
Earnings before income
taxes and the
cumulative effect of
an accounting change 16,952 36,692 67,267 74,193
Income tax expense 7,192 14,604 28,920 30,350
-------- -------- -------- -------
Earnings before the
cumulative effect of
an accounting change 9,760 22,088 38,347 43,843
Cumulative effect of an accounting
change, net of taxes (f) - - (590) -
-------- -------- --------- --------
Net earnings $ 9,760 $ 22,088 $ 37,757 $ 43,843
======== ======== ======== ========
Net earnings
(excluding gains/
charges)(g) $ 10,291 $ 6,143 $ 31,319 $ 27,323
======== ======== ======== ========
Per share data:
Basic earnings
per share $ .14 $ .32 $ .54 $ .63
Diluted earnings
per share $ .14 $ .31 $ .53 $ .61
Per share data (excluding
gains/charges)(g):
Basic earnings
per share $ .15 $ .09 $ .45 $ .39
Diluted earnings
per share $ .15 $ .09 $ .44 $ .38
Weighted average
shares outstanding:
Basic 69,200 69,700 69,600 70,000
Diluted 70,800 71,600 71,000 71,700
See notes to consolidated financial statements.
Notes to consolidated statements of earnings:
(a) Certain reclassifications have been made to previously issued
financial statements to conform to the current presentation.
(b) Gas Operations' cost of products sold for the three and nine
months ended December 31, 1999 includes an inventory
write-down of $3.8 million ($2.2 million after-tax) related to
certain specialty gas inventories.
(c) Special charges of $2.8 million ($1.7 million after-tax) for
the three and nine months ended December 31, 1999 primarily
include an insurance settlement related to a fiscal 1997 loss.
Special charges of $1 million ($575 thousand after-tax) for
the nine months ended December 31, 1998 represents reserve
adjustments related to the divestiture of two non-core
businesses.
(d) Other income, net, for the nine months ended December 31, 1999
includes a $14.9 million ($7.8 million after-tax) gain
resulting from the divestiture of the Company's operations in
Poland and Thailand. The operations of the divested companies
were previously reported in the Gas Operations segment.
Other income, net, for the three and nine months ended
December 31, 1998 includes a $24 million ($14.1 million
after-tax) gain from the divestiture of the Company's calcium
carbide and carbon products manufacturing operations. The
operations of this business were previously reported in the
Gas Operations segment.
(e) Equity in earnings of unconsolidated affiliates for the three
and nine months ended December 31, 1998 includes a
$1.8 million non-recurring gain from insurance proceeds
received by an equity affiliate.
(f) Effective April 1, 1999, the Company adopted Statement of
Position 98-5, &uot;Reporting on the Costs of Start-up
Activities.&uot; The nine months ended December 31, 1999 include a
first quarter after-tax charge of $590 thousand for the
cumulative effect of an accounting change related to
previously capitalized costs from start-up activities.
(g) Net earnings and per share amounts, adjusted to exclude the
items described in notes (b) through (f).
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, March 31,
1999 1999
----- ------
ASSETS
Trade accounts receivable, net $ 193,287 $ 195,708
Inventories, net 158,095 154,424
Deferred income tax asset, net 7,937 7,549
Prepaids and other current assets 23,393 21,161
---------- ----------
TOTAL CURRENT ASSETS 382,712 378,842
Property, plant and equipment, net 709,444 717,859
Goodwill, net 424,700 428,349
Other non-current assets, net 133,200 173,422
---------- ----------
TOTAL ASSETS $1,650,056 $1,698,472
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 69,103 $ 85,486
Accrued expenses and other
current liabilities 101,492 108,295
Current portion of long-term debt 2,434 19,645
--------- ----------
TOTAL CURRENT LIABILITIES 173,029 213,426
Long-term debt 801,022 847,841
Deferred income taxes 152,653 142,675
Other non-current liabilities 31,830 23,585
Stockholders' equity 491,522 470,945
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,650,056 $1,698,472
========== ==========
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