Airgas Reports Fourth Quarter and Fiscal 2000 Results.Business Editors/Hi-Tech Writers 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 fiscal year ended March 31, 2000. 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 certain gains and charges, plus depreciation, amortization and deferred income taxes) for the quarter was $33.1 million, or $.48 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 $36.7 million, or $.51 per diluted share last year. Net earnings, excluding certain gains and charges, were $5.6 million, or $.08 per diluted share, versus net earnings of $7.2 million, or $.10 per diluted share. Sales increased to $406 million compared to $384 million last year. Including all gains and charges, net earnings for the quarter ended March 31, 2000 were $0.5 million, or $.01 per diluted share, compared to $8.1 million, or $.11 per diluted share a year ago. The current year's quarter included an after-tax litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. charge of $4.8 million, or $.07 per diluted share. Peter McCausland, chairman and chief executive officer, commented, "It was encouraging to see the quarterly sales comparison turn positive for the first time in six quarters. Customer demand appears to be showing signs of improvement and our investments in growth initiatives like national accounts and strategic products are beginning to bear fruit. Of course, we were disappointed that the sales growth this quarter did not translate into higher earnings and cash flow. Rising expenses related to wages and benefits, insurance and fuel, along with certain unexpected charges at two of our regional companies, put pressure on profits this quarter. "Going forward, we believe that the customer demand situation should continue to improve and we are implementing price increases to address the rising cost environment," added Mr. McCausland. "The ultimate yield resulting from price increases is difficult to predict given the challenging economic conditions. Therefore, we are evaluating all expense budgets and are implementing strict cost controls where appropriate. We do not want to inhibit inhibit /in·hib·it/ (in-hib´it) to retard, arrest, or restrain. in·hib·it v. 1. To hold back; restrain. 2. our ability to take advantage of strength in the U.S. industrial economy or to execute on our strategic initiatives, including national accounts and eCommerce See e-commerce. ." For the year ended March 31, 2000, after-tax cash flow increased to $141.7 million, or $2.01 per diluted share, compared to $138.3 million, or $1.93 per diluted share, last year. Net earnings, excluding certain gains and charges in both the current and prior years, were $36.9 million, or $.52 per diluted share, compared to $34.5 million, or $.48 per diluted share. Sales were $1.54 billion compared to $1.56 billion in the prior year. Including all gains and charges, net earnings were $38.3 million, or $.54 per diluted share for the current year versus $51.9 million, or $.72 per diluted share last year. 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. increased by 1.8% in the fiscal fourth quarter versus the same period a year ago. Same-store sales in the Distribution segment were up 1.2%, reflecting an increase of 3.5% for gases and rent and a 0.5% decline for hardgoods. Same-store sales for the Gas Operations segment were 10.4% higher. Capital expenditures in the fourth quarter were $18 million versus $20 million in last year's quarter. 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. for the year was $65 million versus $102 million last year. The Company has substantially completed the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of its shares under its existing 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. . Regarding the litigation charge, Airgas is a defendant in related class-action lawsuits in four states in which the Company has been falsely accused of misleading customers into believing that its hazardous materials charges were required by government laws or regulations. The Company has denied the allegations and believes that the hazardous materials charges are lawful Licit; legally warranted or authorized. The terms lawful and legal differ in that the former contemplates the substance of law, whereas the latter alludes to the form of law. A lawful act is authorized, sanctioned, or not forbidden by law. and have been properly disclosed. In one suit, an Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). State court certified See certification. a nationwide class. In another, in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , the Company is in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of a trial. In view of the uncertainties of litigation, the costs to defend lawsuits in multiple jurisdictions and the Company's desire to focus on its business, the Company has preliminarily settled all of the lawsuits. The charge recorded represents an estimate of the overall costs associated with the defense and settlement of these claims. The slides to be presented during the Company's earnings teleconference, along with the teleconference replay instructions, 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 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 , May 12, 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. These statements include, but are not limited to, statements regarding: the Company's expectations regarding improved customer demand, increased sales and the expanding U.S. industrial economy; controlling costs and increasing prices; and the Company's strategic initiatives. 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 an insufficient yield from price increases, lack of improvement in customer demand, the inability to implement strict cost controls, the ability to implement its strategic initiatives, 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 competition, the outcome and costs associated with the defense and settlement of lawsuits related to hazardous materials charges, and other factors described in the Company's reports, including Form 10-Q Form 10-Q See 10-Q. dated December December: see month. 31, 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 Twelve Months Ended
March 31, March 31,
2000 1999 2000 1999
---- ---- ---- ----
Net sales:
Distribution $ 377,248 $ 351,800 $ 1,409,949 $ 1,406,184
Gas
Operations 28,870 31,730 132,385 155,034
--------- ----------- ----------- -----------
Total net
sales 406,118 383,530 1,542,334 1,561,218
--------- ----------- ----------- -----------
Costs and
expenses:
Cost of
products sold
(excluding
depreciation
and amortization)
Distribution 204,917 194,506 760,122 768,568
Gas Operations (a) 11,969 14,188 56,475 69,487
Selling,
distribution
and administrative
expenses (b) 150,705 130,156 532,527 523,241
Depreciation and
amortization 22,203 22,077 89,308 87,926
Special charges (c) -- -- (2,829) (1,000)
--------- ----------- ----------- -----------
Total costs and
expenses 389,794 360,927 1,435,603 1,448,222
--------- ----------- ----------- -----------
Operating income (loss):
Distribution 15,381 23,201 94,671 98,447
Gas Operations 943 (598) 9,231 13,549
Special charges (c) -- -- 2,829 1,000
--------- ----------- ----------- -----------
Total operating
income 16,324 22,603 106,731 112,996
Interest expense, net (15,393) (14,071) (57,560) (60,298)
Other income, net (d) 1,223 1,432 17,862 26,621
Equity in earnings
of unconsolidated
affiliates (e) 1,003 2,204 3,391 7,042
--------- ----------- ----------- -----------
Earnings before
income taxes
and the cumulative
effect of an
accounting change 3,157 12,168 70,424 86,361
Income tax expense 2,631 4,087 31,551 34,437
--------- ----------- ----------- -----------
Earnings before the
cumulative effect
of an accounting
change 526 8,081 38,873 51,924
Cumulative effect
of an accounting
change, net of
taxes (f) -- -- (590) --
--------- ----------- ----------- -----------
Net earnings $ 526 $ 8,081 $ 38,283 $ 51,924
========= =========== =========== ===========
Net earnings
(excluding
gains/charges)(g) $ 5,578 $ 7,159 $ 36,897 $ 34,482
========= =========== =========== ===========
Per share data:
Basic earnings
per share $ .01 $ .12 $ .55 $ .74
Diluted earnings
per share $ .01 $ .11 $ .54 $ .72
Per share data
(excluding
gains/charges)(g):
Basic earnings
per share $ .08 $ .10 $ .53 $ .49
Diluted earnings
per share $ .08 $ .10 $ .52 $ .48
Weighted average
shares outstanding:
Basic 68,000 70,100 69,200 70,000
Diluted 69,500 71,700 70,600 71,700
See notes to consolidated financial statements.
Notes to consolidated statements of earnings:
(a) Gas Operations' cost of products sold for the year ended March 31,
2000 includes a third quarter inventory write-down of $3.8 million
($2.2 million after-tax) related to certain specialty gas
inventories.
(b) Selling, distribution and administrative expenses for the fourth
quarter and year ended March 31, 2000 include a litigation charge
of $7.5 million ($4.8 million after-tax) that represents an
estimate of the Company's overall costs associated with the
defense and settlement of certain lawsuits.
(c) Special charges of $2.8 million ($1.7 million after-tax) for the
year ended March 31, 2000 primarily include income in connection
with an insurance settlement related to a fiscal 1997 loss.
Special charges for the year ended March 31, 1999 includes $1
million of income ($575 thousand after-tax) for reserve
adjustments that relate to the divestiture of two non-core
businesses.
(d) Other income, net, for the quarter ended March 31, 2000 includes a
gain of $1.2 million consisting of a gain on the divestiture of a
non-core business, partially offset by losses on disposals of
assets. For the year ended March 31, 2000, other income, net, also
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 year ended March 31, 1999 includes a
$25.5 million ($15 million after-tax) gain from the divestiture of
the Company's calcium carbide and carbon products operations. The
operations of this business were previously reported in the Gas
Operations segment. Included in the divestiture gain is $1.5
million ($922 thousand after-tax) recognized in the fourth quarter
resulting from the settlement of certain matters pertaining to the
divestiture.
(e) 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 received by an equity affiliate.
(f) Effective April 1, 1999, the Company adopted Statement of Position
98-5, "Reporting on the Costs of Start-up Activities." The year
ended March 31, 2000 includes 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 (a) through (f).
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
March 31, March 31,
2000 1999
---- ----
ASSETS
Trade accounts receivable, net $ 211,989 $ 195,708
Inventories, net 159,438 154,424
Deferred income tax asset, net 11,357 7,549
Prepaids and other current assets 23,611 21,161
---------- ----------
TOTAL CURRENT ASSETS 406,395 378,842
Property, plant and equipment, net 753,768 717,859
Goodwill, net 445,498 428,349
Other non-current assets, net 131,275 173,422
---------- ----------
TOTAL ASSETS $1,736,936 $1,698,472
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 78,276 $ 85,486
Accrued expenses and other current
liabilities 121,249 108,295
Current portion of long-term debt 20,071 19,645
---------- ----------
TOTAL CURRENT LIABILITIES 219,596 213,426
Long-term debt 857,422 847,841
Deferred income taxes 158,413 142,675
Other non-current liabilities 28,998 23,585
Stockholders' equity 472,507 470,945
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,736,936 $1,698,472
========== ==========
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