Airgas Reports First Quarter EPS of $0.25.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 earnings for its first quarter ended June June: see month. 30, 2003. Net earnings for the quarter were $18.5 million, or $0.25 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 $14 million, or $0.20 per diluted share, in the same period a year ago. As disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the notes to the financial statements Notes to the financial statements A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements. , the quarter ended June 30, 2002 included a special charge of $2.7 million ($1.7 million after tax) or $0.03 per diluted share related to the integration of the Air Products acquisition. First quarter sales increased 1% to $461 million, while total 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. declined 1% compared to the same quarter a year ago, reflecting continued weakness in manufacturing and other industrial segments. Same-store sales in the Distribution segment were down 2%, driven by a 4% decline in hardgoods. Same-store sales for the Gas Operations segment increased 9%, attributed to strong sales at the new Hopewell, Virginia Hopewell is an independent city in the Commonwealth of Virginia. The population was 22,354 at the 2000 census. It is in Tri-Cities area of the Richmond-Petersburg region and is a portion of the Richmond Metropolitan Statistical Area (MSA). CO2 plant, which began operations in January January: see month. 2003. "We delivered a solid first quarter performance. The prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. weakness in the industrial sector continues to temper tem·per n. 1. A state of mind or emotions; mood. 2. A tendency to become easily angry or irritable. 3. An outburst of rage. top-line results, but strength in our growth platforms This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , such as medical and bulk gas, and a focus on cost control contributed to the EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. growth," said Airgas Chairman and Chief Executive Officer Peter McCausland. Free Cash Flow for the quarter ended June 30, 2003 was a negative $3 million contributing to a $5 million increase in adjusted debt. Free Cash Flow for the comparative quarter ended June 30, 2002 was a negative $5 million. Negative free cash flow is typical in the first quarter due to the timing of payments for interest and annual bonuses; however, the recently completed quarter also included $7 million of incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. 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. versus the prior year as the Company invested in cylinders, tanks and other revenue generating assets to meet customer needs. The definition of free cash flow and a reconciliation to the attached 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, as well as the definition of adjusted debt and a reconciliation to the balance sheet are attached. McCausland continued, "Recent economic data on the industrial sector seems to indicate a slight firming, but it appears we are still bouncing along the bottom. We remain confident of our full year earnings per share guidance of $1.05 to $1.12; however, we expect same-store sales for the first half to be flat. We continue to focus on enhancing our market-leading customer offerings and service. Airgas has the financial capacity and the culture to succeed and grow, both organically and through acquisition." The Company will conduct an earnings teleconference on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , July July: see month. 25, 2003, beginning at 8:30 a.m. Eastern Time. Access the teleconference by calling (800) 500-0177. 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 telephone replay will be accessible for one week starting July 25th at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 11:00 a.m. Eastern Time by calling (888) 203-1112 and entering passcode 195416. About Airgas, Inc. Airgas, Inc. is 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. Its integrated network A network that supports both data and voice and/or different networking protocols. See converged network and new public network. of nearly 800 locations includes branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness See e-business. , 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 telesales telesales 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: a firming in the industrial sector; the range of expected earnings per share for fiscal 2004; the expected same-store sales for the first half of fiscal 2004; and the Company's financial capacity and culture to succeed and grow, both organically and through acquisition. 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 success of the Company's ability to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on its strategic initiatives of improving operational efficiency and growing sales and market share; 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. ; increased industry competition; a lack of acquisition opportunities; 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, 2003, 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 and consolidated statements of cash flows follow.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
2003 2002
---------- ----------
Net sales $461,056 $457,668
---------- ----------
Costs and expenses:
Cost of products sold (excl. deprec.) 221,133 222,266
Selling, distribution and
administrative expenses 178,461 176,299
Depreciation 19,291 18,459
Amortization 1,511 1,740
Special charges (a) -- 2,694
---------- ----------
Total costs and expenses 420,396 421,458
---------- ----------
Operating income 40,660 36,210
Interest expense, net (10,435) (13,121)
Discount on securitization of
trade receivables (868) (851)
Other income (expense), net (b) (173) (123)
Equity in earnings of unconsolidated
affiliates 700 932
---------- ----------
Earnings before income tax expense 29,884 23,047
Income tax expense 11,356 9,003
---------- ----------
Net earnings $18,528 $14,044
========== ==========
Basic earnings per share $.26 $.20
========== ==========
Diluted earnings per share $.25 $.20
========== ==========
Weighted average shares outstanding:
Basic 71,900 69,900
Diluted 73,900 72,000
See attached notes.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
June 30, March 31,
2003 2003
---------- ----------
ASSETS
Trade accounts receivable, net (c) $78,787 $71,346
Inventories, net 157,968 151,405
Deferred income tax asset, net 18,058 17,688
Prepaids and other current assets 29,406 30,143
---------- ----------
TOTAL CURRENT ASSETS 284,219 270,582
Property, plant and equipment, net 871,935 869,492
Goodwill 439,977 437,709
Other intangible assets, net 21,142 19,832
Other non-current assets 107,247 102,628
---------- ----------
TOTAL ASSETS $1,724,520 $1,700,243
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $77,321 $85,375
Accrued expenses and other current
liabilities 107,909 121,292
Current portion of long-term debt 609 2,229
---------- ----------
TOTAL CURRENT LIABILITIES 185,839 208,896
Long-term debt (c) 669,214 658,031
Deferred income taxes 215,213 209,140
Other non-current liabilities 30,210 27,243
Stockholders' equity 624,044 596,933
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,724,520 $1,700,243
========== ==========
See attached notes.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Quarter Quarter
Ended Ended
June 30, June 30,
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $18,528 $14,044
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 19,291 18,459
Amortization 1,511 1,740
Deferred income taxes 4,800 (11,396)
Equity in earnings of unconsolidated
affiliates (700) (932)
Losses on divestitures -- 241
Losses on sales of plant and equipment 57 246
Stock issued for employee stock purchase
plan 2,264 2,227
Changes in assets and liabilities,
excluding effects of business acquisitions
and divestitures:
Securitization of trade receivables (2,300) 6,400
Trade receivables, net (4,073) (12,697)
Inventories, net (5,682) (348)
Prepaid expenses and other current assets 392 19,737
Accounts payable, trade (8,259) (6,957)
Accrued expenses and other current
liabilities (12,368) (17,787)
Other assets (1,551) 882
Other liabilities 3,804 1,547
-------- --------
Net cash provided by operating
activities 15,714 15,406
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (21,319) (14,427)
Proceeds from sales of plant and equipment 1,342 1,102
Proceeds from divestitures -- 3,167
Business acquisitions, holdbacks and other
settlements of acquisition related
liabilities (5,750) (4,342)
Dividends and fees from unconsolidated
affiliates 422 684
Other, net (1,520) 1,281
-------- --------
Net cash used in investing activities (26,825) (12,535)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 81,603 93,400
Repayment of debt (74,505) (96,100)
Dividends paid to stockholders (2,925) --
Exercise of stock options 5,803 4,331
Cash overdraft 1,135 (4,502)
-------- --------
Net cash provided by (used in) financing
activities 11,111 (2,871)
-------- --------
Change in cash
Cash - Beginning of period $-- $--
Cash - End of period -- --
-------- --------
$-- $--
======== ========
See attached notes
Notes (Unaudited):
(a) Special charges of $2.7 million ($1.7 million after tax) for the
three months ended June 30, 2002 consist of a restructuring charge
related to the integration of the business acquired from Air
Products in the fourth quarter of fiscal 2002 and costs related to
the consolidation of certain of the Company's procurement
functions. The special charges include facility exit costs
associated with the closure of certain Airgas facilities and
severance for approximately 130 employees.
(b) Other income (expense), net, for the three months ended June 30,
2002 includes a net non-recurring loss of approximately $200
thousand ($500 thousand after tax) related to divestitures.
(c) The Company participates in a securitization agreement with two
commercial banks to sell up to $175 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 under the agreement was
$156.6 million and $158.9 million at June 30, 2003 and March 31,
2003, respectively.
(d) Business segment information for the Company's Distribution and
Gas Operations segments is shown below:
Quarter Ended
June 30, 2003
-----------------------------------------
(In thousands) Dist. Gas Ops. Elim Combined
-------- -------- -------- --------
Gas and rent $220,407 $48,072 $(9,597) $258,882
Hardgoods 201,448 1,349 (623) 202,174
-------- -------- -------- --------
Total net sales 421,855 49,421 (10,220) 461,056
Cost of products
sold, excl.
deprec. expense 209,149 22,204 (10,220) 221,133
Selling,
distribution and
administrative
expenses 161,950 16,511 178,461
Depreciation
expense 16,170 3,121 19,291
Amortization
expense 1,357 154 1,511
Special charge -- -- --
-------- -------- -------- --------
Operating income 33,229 7,431 40,660
Quarter Ended
June 30, 2002
----------------------------------------
(In thousands) Dist. Gas Ops. Elim Combined
-------- -------- -------- --------
Gas and rent $216,957 $43,666 $(8,840) $251,783
Hardgoods 205,098 1,300 (513) 205,885
-------- -------- -------- --------
Total net sales 422,055 44,966 (9,353) 457,668
Cost of products
sold, excl.
deprec. expense 211,449 20,170 (9,353) 222,266
Selling,
distribution and
administrative
expenses 160,615 15,684 176,299
Depreciation
expense 15,678 2,781 18,459
Amortization
expense 1,613 127 1,740
Special charge 2,694 -- 2,694
-------- -------- -------- --------
Operating income 30,006 6,204 36,210
Reconciliation of Non-GAAP Financial Measures (Unaudited)
---------------------------------------------------------
Increase in Adjusted Debt:
--------------------------
Reconciliation of the change in debt per the Balance Sheet to the
increase in debt adjusted for off-balance sheet and non-cash items
("adjusted debt"):
Quarter Ended
(Amounts in thousands) June 30, 2003
-------------
Increase in debt per the Balance Sheet $9,563
Reduction in funding under the trade
receivables securitization program (2,300)
Change in fair value of debt related to
interest rate swap agreements (non-cash) (2,465)
Other (266)
-------------
Increase in adjusted debt $4,532
=============
The Company uses Adjusted Debt to provide investors with a more
accurate and meaningful measure of the change in the Company's
obligation to repay debt by adjusting for non-cash items and funds
received (or repaid) under the trade receivables securitization
program.
Free Cash Flow:
---------------
Reconciliation of net cash provided by operating activities per
the Consolidated Statement of Cash Flows to Free Cash Flow:
Quarter Ended Quarter Ended
(Amounts in thousands) June 30, 2003 June 30, 2002
------------- -------------
Net cash provided by operating activities $15,714 $15,406
Plus:
Dividends and fees from equity
affiliates 422 684
Less:
Cash (provided) used by the
securitization of
trade receivables 2,300 (6,400)
Capital expenditures (21,319) (14,427)
------------- -------------
Free Cash Flow ($2,883) ($4,737)
============= =============
The Company believes Free Cash Flow provides investors meaningful
insight into the Company's ability to generate cash from continuing
operations, which can be used at management's discretion for
acquisitions, the repayment of debt or to support other investing and
financing activities.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion