Airgas Reports 37% Growth in EPS from Continuing Operations.RADNOR Radnor may refer to:
See: New York Stock Exchange :ARG See argument. arg - argument ), the largest U.S. 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, welding welding, process for joining separate pieces of metal in a continuous metallic bond. Cold-pressure welding is accomplished by the application of high pressure at room temperature; forge welding (forging) is done by means of hammering, with the addition of heat. , safety and related products, today reported strong growth in sales, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and earnings for its third quarter ended December December: see month. 31, 2005. Quarterly earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the grew 43% to $33 million, or $0.41 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, compared to $23 million, or $0.30 per diluted share, a year ago. Continuing operations excludes the results of Rutland Rutland, county, England Rutland, county (1991 pop. 32,400), 152 sq mi (394 sq km), central England. Rutland has a rolling terrain and is a rural upland area largely devoted to tillage and pasturage. Tool & Supply, which was divested on December 1, 2005, and is now reported as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Quarterly results from continuing operations a year ago included $0.01 per diluted share in integration expenses related to the acquisition of The BOC (Bell Operating Company) One of 22 companies that was formerly part of AT&T and later organized into seven regional companies. See RBOC. Group's U.S. packaged gas business. Third quarter discontinued operations reported a loss of $1.9 million, or $0.02 per diluted share, primarily due to a loss on the 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). . Income from discontinued operations in the prior year quarter was not significant. Net earnings for the quarter grew 34% to $31 million, or $0.39 per diluted share, compared to $23 million, or $0.30 per diluted share, in the prior year period. Third quarter sales increased 17% to $702 million, reflecting strong 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. growth as well as acquisition growth. Total same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of were up 12% compared to the same quarter a year ago. "We produced another quarter of solid earnings growth," said Airgas Chairman and Chief Executive Officer Peter McCausland. "Our sales momentum continues to be very strong with most regions reporting double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. same store sales growth. Volume has picked up after the hurricanes and supply pressures of last summer." McCausland added, "Our people continue to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution well on our core business, medical and strategic products strategies. By effectively integrating acquisitions and leveraging our sales growth, we improved the operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: by 130 basis points to 9.8% for the quarter." For the nine months ended December 31, 2005, sales were $2.1 billion, up 21% from the prior year period. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. same store sales growth was 11%, with gas and rent up 10% and hardgoods up 13%. Earnings from continuing operations for the nine months were $92 million, or $1.16 per diluted share, compared with $68 million, or $0.88 per diluted share, for the prior year period. The current period includes losses related to hurricanes Katrina KATRINA Keeping All the Resources in New Orleans Alive KATRINA Krewe Aiding Trash Removal In the New Orleans Area and Rita of $0.02 per diluted share. The prior year period includes integration expenses of $0.04 per diluted share related to the BOC acquisition. Year-to-date free cash flow was $52 million, compared to negative $7 million for the same period last year. The definition of free cash flow and reconciliation to the 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: Statement of Cash Flows are attached. McCausland continued, "Given the continued momentum in sales and earnings growth, we expect earnings in our fourth quarter of $0.41 to $0.43 per diluted share." The Company will conduct an earnings teleconference at 11:00 a.m. ET on Thursday Thursday: see week. , January January: see month. 26, 2006. The teleconference will be available by calling (800) 819-9193. This press release, slides to be presented during the Company's teleconference and information about how to access a live and on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front webcast of the teleconference are available in the 'Investor Info' section 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 web cast of the teleconference will be available live and on demand through February February: see month. 24 at http://www.shareholder.com/arg/medialist.cfm. A replay of the teleconference will be available through February 3. To listen, call (888) 203-1112 and enter passcode 3347520. About Airgas, Inc. Airgas, Inc. (NYSE:ARG), through its subsidiaries, is the largest U.S. distributor of industrial, medical, and specialty gases, and related hardgoods, such as welding equipment and supplies. Airgas is also the third-largest U.S. distributor of safety products, the largest U.S. producer of nitrous oxide nitrous oxide or nitrogen (I) oxide, chemical compound, N2O, a colorless gas with a sweetish taste and odor. Its density is 1.977 grams per liter at STP. It is soluble in water, alcohol, ether, and other solvents. and dry ice, the largest liquid carbon dioxide carbon dioxide, chemical compound, CO2, a colorless, odorless, tasteless gas that is about one and one-half times as dense as air under ordinary conditions of temperature and pressure. producer in the Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Noun the selling of a commodity or service by telephone telesales npl → televentas fpl telesales npl → channels. Its national scale and strong local presence offer a competitive edge to its diversified diversified (di·verˑ·s customer base. For more information, please visit 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, 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. These statements include, but are not limited to, statements regarding strength of the Company's continuing sales and earnings growth momentum and its expected earnings of $0.41 to $0.43 per diluted share in the fourth quarter of fiscal 2006. The Company 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: the Company's inability to implement price increases; supply cost pressures; increased industry competition; an economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. ; adverse changes in customer buying patterns; significant fluctuations in interest rates; political and economic uncertainties associated with current world events; and other factors described in the Company's reports, including Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. dated March 31, 2005 and Forms 10-Q dated June June: see month. 30, 2005 and September September: see month. 30, 2005, filed by the Company with the Securities and Exchange Commission. Consolidated statements of earnings, 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, consolidated statements of cash flows, and a reconciliation of free cash flow 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,
2005 2004 2005 2004
--------- --------- ----------- -----------
Net sales $702,407 $601,088 $2,082,714 $1,723,416
--------- --------- ----------- -----------
Costs and expenses:
Cost of products sold
(excl. deprec.) 345,343 289,533 1,028,063 835,437
Selling, distribution
and administrative
expenses (c) 255,515 232,402 765,173 657,360
Depreciation 31,220 26,929 90,515 76,471
Amortization 1,340 1,192 3,947 4,145
--------- --------- ----------- -----------
Total costs and
expenses 633,418 550,056 1,887,698 1,573,413
--------- --------- ----------- -----------
Operating income 68,989 51,032 195,016 150,003
Interest expense, net (13,335) (13,437) (40,531) (37,959)
Discount on
securitization of trade
receivables (a) (2,571) (1,340) (6,665) (3,217)
Other income, net 122 268 1,614 702
--------- --------- ----------- -----------
Earnings before income tax
expense and minority
interest 53,205 36,523 149,434 109,529
Income tax expense (19,792) (13,142) (55,972) (40,511)
Minority interest in
earnings of consolidated
affiliate (711) (452) (1,945) (1,356)
--------- --------- ----------- -----------
Income from continuing
operations 32,702 22,929 91,517 67,662
--------- --------- ----------- -----------
Income (loss) from
discontinued operations,
net of tax (d) (1,877) 44 (1,424) 204
--------- --------- ----------- -----------
Net earnings $ 30,825 $ 22,973 $ 90,093 $ 67,866
========= ========= =========== ===========
NET EARNINGS PER COMMON SHARE
BASIC
Earnings from
continuing operations $ 0.42 $ 0.30 $ 1.19 $ 0.91
Earnings (loss) from
discontinued
operations $ (0.02) $ 0.01 $ (0.01) $ --
--------- --------- ----------- -----------
Net earnings per share $ 0.40 $ 0.31 $ 1.18 $ 0.91
========= ========= =========== ===========
DILUTED (e)
Earnings from
continuing operations $ 0.41 $ 0.30 $ 1.16 $ 0.88
Earnings (loss) from
discontinued
operations $ (0.02) $ -- $ (0.02) $ --
--------- --------- ----------- -----------
Net earnings per share $ 0.39 $ 0.30 $ 1.14 $ 0.88
========= ========= =========== ===========
Weighted average shares
outstanding:
Basic 77,000 75,200 76,600 74,700
Diluted (e) 81,500 77,400 81,000 76,700
See attached notes.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, March 31,
2005 2005
------------ ------------
ASSETS
Cash $ 42,002 $ 32,640
Trade accounts receivable, net (a) 140,336 148,834
Inventories, net 230,918 221,609
Deferred income tax asset, net 30,259 26,263
Prepaid expenses and other current assets 36,155 36,911
------------ ------------
TOTAL CURRENT ASSETS 479,670 466,257
Plant and equipment, net 1,349,389 1,269,342
Goodwill 542,497 511,196
Other intangible assets, net 18,782 16,507
Other non-current assets 23,110 28,561
------------ ------------
TOTAL ASSETS $ 2,413,448 $ 2,291,863
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 112,837 $ 143,208
Accrued expenses and other current
liabilities 202,735 183,132
Current portion of long-term debt 111,371 6,948
------------ ------------
TOTAL CURRENT LIABILITIES 426,943 333,288
Long-term debt 670,829 801,635
Deferred income tax liability, net 322,509 282,186
Other non-current liabilities 22,275 24,391
Minority interest in affiliate (b) 57,191 36,191
Stockholders' equity 913,701 814,172
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 2,413,448 $ 2,291,863
============ ============
See attached notes.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Nine Months Nine Months
Ended Ended
December 31, December 31,
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 90,093 $ 67,866
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 90,515 76,471
Amortization 3,947 4,145
Deferred income taxes 33,300 23,456
(Gain) loss on divestiture 1,900 (360)
Gain on sales of plant and equipment (806) (191)
Minority interest in earnings 1,945 1,356
Stock issued for employee stock purchase
plan 7,775 7,251
Changes in assets and liabilities, excluding
effects of business acquisitions and
divestitures:
Securitization of trade receivables 33,600 29,900
Trade receivables, net (10,280) (16,513)
Inventories, net (19,338) (38,907)
Prepaid expenses and other current assets 7,929 (8,006)
Accounts payable, trade (30,925) (15,936)
Accrued expenses and other current
liabilities 13,971 (15,264)
Other long-term assets 6,494 1,592
Other long-term liabilities (3,211) (798)
------------ ------------
Net cash provided by operating activities 226,909 116,062
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (153,750) (110,885)
Proceeds from sales of plant and equipment 4,362 3,803
Proceeds from divestitures 14,562 828
Business acquisitions and holdback
settlements (99,272) (200,699)
Other, net 315 27
------------ ------------
Net cash used in investing activities (233,783) (306,926)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 382,730 531,867
Repayment of debt (407,652) (369,849)
Purchase of treasury stock (5,567) --
Minority interest in earnings (1,945) (1,356)
Minority stockholder note prepayment (b) 21,000 --
Exercise of stock options 13,622 14,924
Dividends paid to stockholders (13,820) (10,195)
Cash overdraft 27,868 22,506
------------ ------------
Net cash provided by financing activities 16,236 187,897
------------ ------------
Change in cash $ 9,362 $ (2,967)
Cash - Beginning of period 32,640 25,062
------------ ------------
Cash - End of period $ 42,002 $ 22,095
============ ============
See attached notes.
Notes:
(a) The Company participates in a securitization agreement with
two commercial banks to sell up to $225 million of
qualified trade receivables. Net proceeds from the
securitization were used to reduce borrowings under the
Company's revolving credit facilities. The amount of
outstanding receivables sold under the agreement was $223.5
million and $189.9 million at December 31, 2005 and March 31,
2005, respectively.
(b) In June 2005, the Company's consolidated affiliate, National
Welders, entered into an agreement with its preferred
stockholders under which the preferred stockholders prepaid
their $21 million note payable to National Welders. National
Welders used the proceeds from the prepayment of the preferred
stockholders' note to pay-off its $21 million term loan, which
had been collateralized by the preferred stockholders' note.
The preferred stockholders' note payable to National Welders
had been reflected as a reduction of "Minority interest in
affiliate" in the consolidated financial statements of the
Company. Consequently, the prepayment of the preferred
stockholders' note resulted in a $21 million increase to the
Company's "Minority interest in affiliate." Additionally, the
preferred stockholders and National Welders agreed to modify
the dates between which the preferred stockholders have the
option to redeem their preferred stock for cash or Airgas
common stock to commence in June 2005 (previously June 2006)
and expire in June 2009.
(c) Selling, distribution and administrative expenses in the nine
months ended December 31, 2005 include an estimated loss
related to hurricanes Katrina and Rita of $2.5 million ($1.6
million after tax), or $0.02 per diluted share. The loss
estimate is comprised of property damage and an additional
provision for uncollectible trade receivables associated with
customers in the affected areas.
(d) On December 1, 2005, the Company completed the previously
announced sale of its subsidiary, Rutland Tool & Supply Co
(Rutland Tool). Rutland Tool distributes metalworking tools,
machine tools and MRO supplies from seven locations and has
about 180 employees. Proceeds of the sale were approximately
$15 million with subsequent consideration to be paid for trade
receivables as they are collected. As a result of the
divestiture, the Company reflected the operating results of
Rutland Tool as "discontinued operations" and recognized a
loss of approximately $3.1 million, $1.9 million after-tax, or
$0.02 per diluted share, on the sale. The loss principally
relates to the write-off of leasehold improvements and lease
termination costs for long-term lease commitments that are not
being assumed by the purchaser. The operating results of
Rutland Tool were previously reflected in the Distribution
business segment.
The net sales and earnings (loss) before income taxes of
Rutland Tool (including the loss on sale) for the three and
nine month periods ended December 31, 2005 and 2004, which
were segregated and reported as discontinued operations, are
outlined below:
Three Months Ended Nine Months Ended
(Amounts in thousands) December 31, December 31,
2005 2004 2005 2004
--------- ---------- ---------- ----------
Net sales
$ 7,990 $ 10,451 $ 32,783 $ 31,924
Earnings (loss)
before income taxes (3,150) 75 (2,391) 341
(e) The table below presents the computation of diluted earnings
per share for the three and nine months ended December 31,
2005 and 2004:
Three Months Nine Months
(In thousands, except per Ended Ended
share amounts) December 31, December 31,
------------------- -------------------
Diluted Earnings per Share
Computation 2005 2004 (4) 2005 2004 (4)
--------- --------- --------- ---------
Numerator
---------
Income from continuing
operations $ 32,702 $ 22,929 $ 91,517 $ 67,662
Plus: Preferred stock
dividends (1)(2) 711 -- 2,134 --
Plus: Income taxes on earnings
of National Welders (3) 184 -- 509 --
--------- --------- --------- ---------
Income from continuing
operations assuming preferred
stock conversion 33,597 22,929 94,160 67,662
Income (loss) from
discontinued operations (1,877) 44 (1,424) 204
--------- --------- --------- ---------
Net earnings assuming
preferred stock conversion $ 31,720 $ 22,973 $ 92,736 $ 67,866
========= ========= ========= =========
Denominator
-----------
Basic shares outstanding
77,000 75,200 76,600 74,700
Incremental shares from
assumed conversions:
--------------------
Stock options and warrants 2,200 2,200 2,100 2,000
Preferred stock of National
Welders (1) 2,300 -- 2,300 --
--------- --------- --------- ---------
Diluted shares outstanding 81,500 77,400 81,000 76,700
========= ========= ========= =========
Diluted earnings per share
from continuing operations $ 0.41 $ 0.30 $ 1.16 $ 0.88
Diluted earnings (loss) per
share from discontinued
operations $ (0.02) $ -- $ (0.02) $ --
--------- --------- --------- ---------
Diluted net earnings per share $ 0.39 $ 0.30 $ 1.14 $ 0.88
========= ========= ========= =========
(1) Pursuant to a joint venture agreement between the Company and
the holders of the preferred stock of National Welders,
between June 2005 and June 2009, the preferred shareholders
have the option to exchange their 3.2 million preferred shares
of National Welders either for cash at a price of $17.78 per
share or to tender them to the joint venture in exchange for
approximately 2.3 million shares of Airgas common stock. If
Airgas common stock has a market value of $24.45 per share,
the stock and cash redemption options are equivalent.
(2) If the preferred stockholders of National Welders convert
their preferred stock to Airgas common stock, the 5% preferred
stock dividend, recognized as "Minority interest in earnings
of consolidated affiliate," would no longer be paid to the
preferred stockholders, resulting in additional net earnings
for Airgas.
(3) The earnings of National Welders for tax purposes are treated
as a deemed dividend to Airgas, net of an 80% dividend
exclusion. Upon the assumed conversion of National Welders
preferred stock to Airgas common stock, National Welders would
become a wholly owned subsidiary of Airgas. As a wholly owned
subsidiary, the net earnings of National Welders would not be
subject to additional tax at the Airgas level.
(4) The assumed conversion of National Welders preferred stock to
Airgas common stock is not presented because it is
anti-dilutive.
(f) Business segment information for the Company's Distribution
and All Other Operations segments is shown below:
(Unaudited)
Three Months Ended
December 31, 2005
---------------------------------------
(In thousands) All Other
Dist. Ops. Elim Combined
--------- --------- --------- ---------
Gas and rent $311,620 $105,132 $(13,367) $403,385
Hardgoods 280,809 19,731 (1,518) 299,022
--------- --------- --------- ---------
Total net sales 592,429 124,863 (14,885) 702,407
Cost of products sold,
excluding deprec. expense 300,545 59,683 (14,885) 345,343
Selling, distribution and
administrative expenses 213,855 41,660 255,515
Depreciation expense 24,010 7,210 31,220
Amortization expense 950 390 1,340
--------- --------- ---------
Operating income 53,069 15,920 68,989
--------- --------- ---------
(Unaudited)
Three Months Ended
December 31, 2004
---------------------------------------
(In thousands) All Other
Dist. Ops. Elim Combined
--------- --------- --------- ---------
Gas and rent $276,485 $ 78,402 $(13,436) $341,451
Hardgoods 243,370 17,225 (958) 259,637
--------- --------- --------- ---------
Total net sales 519,855 95,627 (14,394) 601,088
Cost of products sold,
excluding deprec. expense 260,849 43,078 (14,394) 289,533
Selling, distribution and
administrative expenses 196,435 35,967 232,402
Depreciation expense 21,172 5,757 26,929
Amortization expense 1,068 124 1,192
--------- --------- ---------
Operating income 40,331 10,701 51,032
--------- --------- ---------
(Unaudited)
Nine Months Ended
December 31, 2005
-------------------------------------------
(In thousands) All Other
Dist. Ops. Elim Combined
---------- --------- --------- ------------
Gas and rent $ 911,914 $311,333 $(39,964) $ 1,183,283
Hardgoods 846,731 57,106 (4,406) 899,431
---------- --------- --------- ------------
Total net sales 1,758,645 368,439 (44,370) 2,082,714
Cost of products sold,
excluding deprec. expense 894,674 177,759 (44,370) 1,028,063
Selling, distribution and
administrative expenses 642,473 122,700 765,173
Depreciation expense 70,338 20,177 90,515
Amortization expense 3,261 686 3,947
---------- --------- ------------
Operating income 147,899 47,117 195,016
---------- --------- ------------
(Unaudited)
Nine Months Ended
December 31, 2004
-------------------------------------------
(In thousands) All Other
Dist. Ops. Elim Combined
---------- --------- --------- ------------
Gas and rent $ 764,123 $239,573 $(35,910) $ 967,786
Hardgoods 708,988 49,390 (2,748) 755,630
---------- --------- --------- ------------
Total net sales 1,473,111 288,963 (38,658) 1,723,416
Cost of products sold,
excluding deprec. expense 744,549 129,546 (38,658) 835,437
Selling, distribution and
administrative expenses 552,312 105,048 657,360
Depreciation expense 58,738 17,733 76,471
Amortization expense 3,748 397 4,145
---------- --------- ------------
Operating income 113,764 36,239 150,003
---------- --------- ------------
Reconciliation of Non-GAAP Financial Measure (Unaudited)
--------------------------------------------------------
Free Cash Flow:
---------------
Reconciliation of net cash provided by operating activities per
the Consolidated Statement of Cash Flows to Free Cash Flow:
Nine Months Nine Months
Ended Ended
December 31, December 31,
(Amounts in thousands) 2005 2004
------------ ------------
Net cash provided by operating activities $226,909 $116,062
Less net cash provided by operating
activities of NWS (1) (15,734) (13,370)
Plus:
Management fees paid by NWS (1) 912 802
Operating lease buyouts 7,386 16,700
Proceeds from sale of PP&E 4,362 3,803
Less:
Cash provided by the securitization of
trade receivables (33,600) (29,900)
Capital expenditures (153,750) (110,885)
Add back capital expenditures of NWS (1) 15,635 9,348
------------ ------------
Free Cash Flow $ 52,120 $ (7,440)
============ ============
Free Cash Flow provides investors meaningful insight into the
Company's ability to generate cash from operations, which can be used
at management's discretion for acquisitions, the prepayment of debt or
to support other investing and financing activities.
(1) National Welders Supply Co. ("NWS") is a consolidated
corporate joint venture meeting the definition of a variable
interest entity and for which the Company is the primary
beneficiary as described under FIN 46R. The liabilities of NWS
are non-recourse to the Company. Likewise, the cash flows in
excess of a management fee paid by NWS are not available to
the Company. Accordingly, the cash flows of NWS have been
excluded from the Company's non-GAAP liquidity measures.
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