Airgas Reports Record First Quarter Earnings per Share of $0.38.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 net earnings for its first quarter ended June June: see month. 30, 2005. Net earnings for the quarter grew 34% to $29.6 million, or $0.38 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 $22.1 million, or $0.29 per diluted share, in the same period a year ago. First quarter sales increased 27% to $691 million reflecting continued 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 and acquisitions. Total same-store sales were up 12% compared to the same quarter a year ago, with gas and rent up 10% and hardgoods up 14%, reflecting pricing actions and strength across customer segments. "We delivered another strong quarter, growing 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. by 31%, as we capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. on good market conditions. We had exceptional results in our strategic growth categories of medical, specialty and bulk gas and safety products," said Airgas Chairman and Chief Executive Officer Peter McCausland. "Our leading market position and solid execution are contributing to steady growth of sales and earnings." "Demand continued to be quite strong," added McCausland. "Same-store sales of hardgoods led the way again in the quarter, with gas and rent sales reaching double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth, driven by strong volumes and pricing. The pricing actions also helped improve our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: by 30 basis points to 9.2%." Adjusted debt increased $57 million in the quarter, as the Company completed four acquisitions with annual sales totaling nearly $100 million. Free cash flow for the quarter ended June 30, 2005 was $7 million compared to a negative $9 million in the quarter ended June 30, 2004. Low or negative free cash flow is typical in the first quarter due to fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. related payments. The definition of free cash flow, a 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, the definition of adjusted debt and a reconciliation to the Balance Sheet are included herein. McCausland continued, "We have the right strategic focus and are committed to disciplined growth. Our customer markets are strong, we are executing well, and our fiscal 2006 outlook remains robust. We expect to earn $0.37 to $0.39 per share in our second quarter, and we are increasing our full year EPS guidance to $1.50 to $1.56." The Company will conduct an earnings teleconference on Thursday Thursday: see week. July July: see month. 28, 2005, beginning at 11:00 a.m. Eastern Time. Access the teleconference by calling (800) 565-5442. 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 telephone replay will be accessible for one week starting July 28th at 1 p.m. Eastern Time by calling (888) 203-1112 and entering passcode 1512394. 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: the Company's leading market position and solid execution contributing to steady growth of sales and earnings; having the right strategic focus and commitment to disciplined growth; a robust fiscal 2006 outlook; and earnings expectations for the second fiscal quarter and full year. 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 grow sales and market share; customer acceptance of price increases; the successful integration of acquisitions; 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; 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 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 non-GAAP financial measures follow.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
2005 2004
--------- ---------
Net sales $690,675 $544,017
--------- ---------
Costs and expenses:
Cost of products sold (excl. deprec.) 342,864 266,221
Selling, distribution and
administrative expenses 253,945 204,062
Depreciation 29,259 23,929
Amortization 1,299 1,433
--------- ---------
Total costs and expenses 627,367 495,645
--------- ---------
Operating income 63,308 48,372
Interest expense, net (13,945) (11,855)
Discount on securitization of
trade receivables (a) (1,848) (830)
Other income, net 911 422
--------- ---------
Earnings before income tax expense and
minority interest 48,426 36,109
Income tax expense 18,257 13,541
--------- ---------
Earnings before minority interest 30,169 22,568
Minority interest in earnings of
consolidated affiliate (522) (452)
--------- ---------
Net earnings $29,647 $22,116
========= =========
Basic earnings per share $0.39 $0.30
Diluted earnings per share $0.38 $0.29
Weighted average shares outstanding:
Basic 76,300 74,200
Diluted 78,000 76,200
See attached notes.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
June 30, March 31,
2005 2005
----------- -----------
ASSETS
Cash $35,299 $32,640
Trade accounts receivable, net (a) 150,454 148,834
Inventories, net 231,256 221,609
Deferred income tax asset, net 35,455 26,263
Prepaid expenses and other current assets 28,645 36,911
----------- -----------
TOTAL CURRENT ASSETS 481,109 466,257
Plant and equipment, net 1,312,856 1,269,342
Goodwill 540,504 511,196
Other intangible assets, net 16,571 16,507
Other non-current assets 25,870 28,561
----------- -----------
TOTAL ASSETS $2,376,910 $2,291,863
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $129,793 $143,208
Accrued expenses and other current liabilities 194,521 183,132
Current portion of long-term debt 6,886 6,948
----------- -----------
TOTAL CURRENT LIABILITIES 331,200 333,288
Long-term debt 812,950 801,635
Deferred income tax liability, net 302,956 282,186
Other non-current liabilities 24,264 24,391
Minority interest in affiliate (b) 57,191 36,191
Stockholders' equity 848,349 814,172
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,376,910 $2,291,863
=========== ===========
See attached notes.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Three
Months Months
Ended Ended
June 30, June 30,
2005 2004
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $29,647 $22,116
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 29,259 23,929
Amortization 1,299 1,433
Deferred income taxes 11,100 6,600
Gain on divestiture -- (380)
Loss on sales of plant and equipment 122 211
Minority interest in earnings 522 452
Stock issued for employee stock purchase plan 2,514 2,327
Changes in assets and liabilities, excluding
effects of
business acquisitions and divestitures:
Securitization of trade receivables 24,700 8,900
Trade receivables, net (12,938) (2,892)
Inventories, net (3,555) (18,749)
Prepaid expenses and other current assets 8,954 4,354
Accounts payable, trade (13,883) (12,264)
Accrued expenses and other current liabilities (3,944) (6,730)
Other long-term assets 2,974 361
Other long-term liabilities (272) (1,140)
--------- ---------
Net cash provided by operating activities 76,499 28,528
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (47,265) (26,634)
Proceeds from sales of plant and equipment 735 678
Proceeds from divestitures -- 828
Business acquisitions, holdbacks and other
settlements
of acquisition related liabilities (72,850) (528)
Other, net 398 (16)
--------- ---------
Net cash used in investing activities (118,982) (25,672)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 187,008 62,369
Repayment of debt (176,525) (77,353)
Minority interest in earnings (522) (452)
Minority stockholder note prepayment (b) 21,000 --
Exercise of stock options 5,387 8,836
Dividends paid to stockholders (4,631) (3,369)
Cash overdraft 13,425 11,575
--------- ---------
Net cash provided by financing activities 45,142 1,606
--------- ---------
Change in cash $2,659 $4,462
Cash - Beginning of period 32,640 25,062
--------- ---------
Cash - End of period $35,299 $29,524
========= =========
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 under the agreement was
$214.6 million and $189.9 million at June 30, 2005 and March 31,
2005, respectively.
(b) On June 6, 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 and expire in
June 2009.
(c) Business segment information for the Company's Distribution and
All Other Operations segments is shown below:
(Unaudited)
Three Months Ended
June 30, 2005
--------------------------------------
(In thousands) Dist. All Elim Combined
Other
Ops.
--------- -------- --------- ---------
Gas and rent $299,857 $92,680 $(13,617) $378,920
Hardgoods 294,211 18,811 (1,267) 311,755
--------- -------- --------- ---------
Total net sales 594,068 111,491 (14,884) 690,675
Cost of products
sold, excluding
deprec. expense 304,959 52,789 (14,884) 342,864
Selling,
distribution and
administrative
expenses 216,180 37,765 253,945
Depreciation
expense 22,962 6,297 29,259
Amortization
expense 1,161 138 1,299
--------- -------- ---------
Operating income 48,806 14,502 63,308
--------- -------- ---------
(Unaudited)
Three Months Ended
June 30, 2004
--------------------------------------
(In thousands) Dist. All Elim Combined
Other
Ops.
--------- -------- --------- ---------
Gas and rent $228,578 $77,169 $(10,438) $295,309
Hardgoods 233,809 15,794 (895) 248,708
--------- -------- --------- ---------
Total net sales 462,387 92,963 (11,333) 544,017
Cost of products
sold, excluding
deprec. expense 236,096 41,458 (11,333) 266,221
Selling,
distribution and
administrative
expenses 171,100 32,962 204,062
Depreciation
expense 17,997 5,932 23,929
Amortization
expense 1,265 168 1,433
--------- -------- ---------
Operating income 35,929 12,443 48,372
--------- -------- ---------
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Free Cash Flow:
Reconciliation of net cash provided by operating activities per
the Consolidated Statement of Cash Flows to Free Cash Flow:
(Amounts in thousands) Quarter Ended Quarter Ended
June 30, 2005 June 30, 2004
------------- -------------
Net cash provided by operating activities $76,499 $28,528
Less net cash provided by operating
activities of NWS (1) (3,445) (5,249)
Plus:
Management fees paid by NWS (1) 298 263
Operating lease buyouts 941 922
Proceeds from sale of PP&E 735 678
Less:
Cash provided by the securitization of
trade receivables (24,700) (8,900)
Capital expenditures (47,265) (26,634)
Add back capital expenditures of NWS (1) 4,409 1,555
------------- -------------
Free Cash Flow $7,472 $(8,837)
============= =============
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.
Adjusted Debt:
Reconciliation of the change in debt per the Balance Sheet to the
increase in debt adjusted for the non-recourse debt of NWS,
off-balance sheet financing and non-cash interest rate hedging
("adjusted debt"):
(Amounts in thousands) June 30, March 31, Change in
2005 2005 Adjusted
Debt
--------- --------- ---------
Debt $819,836 $808,583 $11,253
Adjustments to Debt:
Securitization of trade receivables 214,600 189,900 24,700
National Welders - non-recourse
debt (1) (45,764) (66,019) 20,255
Interest rate swap agreements (3,539) (3,948) 409
--------- --------- ---------
Adjusted Debt $985,133 $928,516 $56,617
========= ========= =========
(1) In calculating the Adjusted Debt measure, the debt of the NWS
joint venture has been excluded because the debt is non-recourse
to Airgas.
The Company uses Adjusted Debt to provide investors with a more
meaningful measure of the change in the Company's obligation to repay
debt by adjusting for the non-recourse debt of NWS, non-cash interest
rate hedging and funds received (or repaid) under the trade
receivables securitization program.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion