-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lr9X5AcPXgINunDcFSkZjqnVigRZRKlmGSqbzJiq1Mvsh4pvty0wG89RoJNdUrL1 POTWyV7kLzIYci4FQztehg== 0000804212-99-000009.txt : 19990518 0000804212-99-000009.hdr.sgml : 19990518 ACCESSION NUMBER: 0000804212-99-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990513 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRGAS INC CENTRAL INDEX KEY: 0000804212 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-CHEMICALS & ALLIED PRODUCTS [5160] IRS NUMBER: 560732648 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09344 FILM NUMBER: 99628092 BUSINESS ADDRESS: STREET 1: 259 RADNOR-CHESETER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 6106875253 MAIL ADDRESS: STREET 1: 259 RADNOR-CHESTER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 8-K 1 FORM 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): May 13, 1999 AIRGAS, INC. ______________________________________________________ (Exact name of registrant as specified in its charter) Delaware 1-9344 56-0732648 _______________ _______________________ _____________ (State or other (Commission File Number) (I.R.S. Employer jurisdiction of Identification No.) incorporation) 259 North Radnor-Chester Road, Suite 100 Radnor, PA 19087-5283 _________________________________________ (Address of principal executive offices) Registrant's telephone number, including area code: (610) 687-5253 2 Item 5. Other Events. ____________ On May 13, 1999, Airgas, Inc. reported its earnings for the fourth quarter and fiscal year ended March 31, 1999, as described in the press release attached as Exhibit 99 and incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits __________________________________________________________________ (a) None (b) None (c) Exhibits. 99 Press Release dated May 13, 1999 3 Signatures __________ Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AIRGAS, INC. (Registrant) BY: /s/ Scott M. Melman Scott M. Melman Senior Vice President & Chief Financial Officer DATED: May 17, 1999 EX-99 2 EX-99.1 - PRESS RELEASE 4 EXHIBIT 99.1 For More Information: Chris Close (610) 902-6257 AIRGAS, INC. REPORTS FOURTH QUARTER AND FISCAL 1999 RESULTS RADNOR, Pennsylvania, May 13, l999 -- Airgas, Inc. (NYSE- ARG) today reported sales of $384 million for the quarter ended March 31, 1999, a decrease of 1% from $388 million in the fourth quarter last year. After-tax cash flow (net earnings, excluding special charges and non-recurring gains, plus depreciation, amortization and deferred income taxes) was $36.7 million, or $.51 per diluted share, in the 1999 fourth quarter compared to $33.7 million, or $.47 per diluted share, in the 1998 fourth quarter. Net earnings (excluding special charges and non- recurring gains) were $7.2 million, or $.10 per diluted share, in both periods. Including special charges and non-recurring gains, net earnings for the quarter ended March 31, 1999 were $8.1 million, or $.11 per diluted share, compared to a loss of $5.2 million, or $.07 per diluted share, a year ago. For the year ended March 31, 1999, sales increased 8% to $1.56 billion from $1.45 billion in fiscal year l998. After-tax cash flow (excluding special charges and non-recurring gains) was $138.3 million, or $1.93 per diluted share, compared to $132.8 million, or $1.88 per diluted share, a year earlier. Net earnings (excluding special charges and non-recurring gains) were $34.5 million, or $.48 per diluted share, in fiscal year 1999 compared to $42.6 million, or $.60 per diluted share, in fiscal year 1998. Including special charges and non-recurring gains, net earnings for the year ended March 31, 1999 were $51.9 million, or $.72 per diluted share, compared to $40.5 million, or $.57 per diluted share, a year ago. Results for the year ended March 31, 1999 include non- recurring after-tax gains of $17.4 million, or $.24 per diluted share, primarily due to the December 1998 divestiture of the Company's calcium carbide and carbon products operations. Results for the year ended March 31, 1998 include after-tax special charges of $14.3 million, or $.20 per diluted share, offset by non-recurring after-tax gains of $12.3 million, or $.17 per diluted share. Peter McCausland, Airgas' chairman and chief executive officer, said, "In the fourth quarter, we continued to see weakness in many of our markets, though they appear to have bottomed. Higher same-store sales for gases and rent this quarter compared to last year were offset by lower hardgoods sales resulting in marginally lower same-store sales in our Distribution segment. Repositioning expenses continued to depress operating margins. 1 5 "We are entering the new fiscal year with cautious optimism. We expect improving operating margins resulting from cost improvement actions, benefits from the ongoing rollout of our integrated distribution infrastructure and modest same-store sales growth. We continue to aggressively manage capital expenditures and working capital. Although this has been one of Airgas' most challenging years, our management team and associates are confident that the Company is executing the right strategy by managing and investing to meet our customers' requirements. Airgas is well positioned to benefit as the industrial economy recovers and to create value for our shareholders." 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. Airgas' integrated distributor network consists of more than 700 locations, including branch locations, distribution centers, catalog and inbound and outbound telemarketing operations. Airgas can be visited on the internet at www.airgas.com. Forward-Looking Statements This press release may contain statements that are forward- looking, as that term is defined by the Private Securities Litigation Reform Act 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 created thereby. All forward-looking statements are based on current expectations regarding important risk factors, and the making of such statements 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, growth in same-store sales, improvement in operating margins, the ability to manage working capital, costs and potential disruptive effects of the "Repositioning for Growth" initiative, the Company's ability to reduce costs, implementation of information technology projects, any potential problems relating to Year 2000 matters, the success and timing of intended divestitures and other factors described in the Company's reports, including Form 10-Q dated December 31, 1998, filed by the Company with the Securities and Exchange Commission. Consolidated statements of earnings and consolidated condensed balance sheets follow on pages 3 through 7. 2 6 AIRGAS, INC. CONSOLIDATED STATEMENTS OF EARNINGS(a) (Amounts in thousands, except per share data) (Unaudited)
Three Months Ended Twelve Months Ended March 31, March 31, 1999 1998 1999 1998 Net sales: Distribution $351,800 $350,130 $1,406,184 $1,321,958 Gas Operations 31,730 38,282 155,034 126,032 Total net sales 383,530 388,412 1,561,218 1,447,990 Costs and expenses: Cost of products sold (excluding depreciation and amortization) Distribution 194,506 193,169 768,568 716,718 Gas Operations 14,188 20,992 69,487 62,820 Selling, distribution and administrative expenses 130,156 129,694 523,241 467,884 Depreciation and amortization 22,077 19,861 87,926 76,670 Special charges, net(b) -- 19,450 (1,000) 4,950 Total costs and expenses 360,927 383,166 1,448,222 1,329,042 Operating income (loss): Distribution 23,201 23,783 98,447 111,472 Gas Operations (598) 913 13,549 12,426 Special charges, net(b) -- (19,450) 1,000 (4,950) Total operating income 22,603 5,246 112,996 118,948 Interest expense, net (14,071) (14,056) (60,298) (53,290) Other income, net (c) 1,474 325 26,714 2,813 Equity in earnings of unconsolidated affiliates (d) 2,204 1,669 7,042 2,931 Minority interest (42) (36) (93) (873) Earnings (loss) before income taxes 12,168 (6,852) 86,361 70,529 Income tax expense (benefit) 4,087 (1,665) 34,437 29,989 Net earnings (loss) $ 8,081 $ (5,187) $ 51,924 $ 40,540 Net earnings (excluding special charges and non-recurring gains)(e) $ 7,159 $ 7,245 $ 34,482 $ 42,565 Per share data: Basic earnings per share $ .12 $ (.07) $ .74 $ .59 Diluted earnings per share $ .11 $ (.07) $ .72 $ .57 Per share data: (excluding special charges and non-recurring gains)(e) Basic earnings per share $ .10 $ .10 $ .49 $ .62 Diluted earnings per share $ .10 $ .10 $ .48 $ .60 Weighted average shares outstanding: Basic 70,100 69,700 70,000 68,700 Diluted 71,700 71,600 71,700 70,800 See notes to financial statements on pages 5 and 6.
3 7 AIRGAS, INC. SUPPLEMENTAL - PRIOR SEGMENT PRESENTATION (1) CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands) (Unaudited)
Three Months Ended Twelve Months Ended March 31, March 31, 1999 1998 1999 1998 Net sales: Distribution $287,792 $286,193 $1,148,420 $1,098,588 Direct Industrial 64,008 63,937 257,764 223,370 Manufacturing 31,730 38,282 155,034 126,032 Total net sales 383,530 388,412 1,561,218 1,447,990 Costs and expenses: Cost of products sold (excluding depreciation and amortization) Distribution 148,195 146,609 579,682 555,392 Direct Industrial 46,311 46,560 188,886 161,326 Manufacturing 14,188 20,992 69,487 62,820 Selling, distribution and administrative expenses 130,156 129,694 523,241 467,884 Depreciation and amortization 22,077 19,861 87,926 76,670 Special charges, net(b) -- 19,450 (1,000) 4,950 Total costs and expenses 360,927 383,166 1,448,222 1,329,042 Operating income (loss): Distribution 22,569 22,592 95,650 105,371 Direct Industrial 632 1,191 2,797 6,101 Manufacturing (598) 913 13,549 12,426 Special charges, net(b) -- (19,450) 1,000 (4,950) Total operating income 22,603 5,246 112,996 118,948 (1) The supplemental financial results are presented in the operating segment format utilized prior to the implementation of SFAS 131. Also see note (a) on page 5. See notes to financial statements on pages 5 and 6.
4 8 (a) The Company has redefined its operating segments and is reporting its results of operations based on the new management structure established under the "Repositioning Airgas for Growth" initiative. Effective with its year ended March 31, 1999, Airgas implemented Statement of Financial Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and Related Information" ("SFAS 131"). Comparative 1998 information has been reclassified to conform to the current presentation. The Company's new operating segments consist of Distribution and Gas Operations. Descriptions of the new operating segments are as follows: The Distribution segment accounts for 90% of consolidated sales and reflects the integration of the traditional industrial gas distribution companies (formerly reported under the "Distribution segment") and the safety products and industrial tool and supplies distribution companies (formerly reported under the "Airgas Direct Industrial segment"). These companies have been combined into one segment to reflect management's approach to evaluating performance and deciding on how to allocate resources in the future as the Company continues to develop the centralized purchasing, shared distribution facilities and multi- channel marketing initiatives begun under the Repositioning. The segment entitled Gas Operations consists of certain domestic operating companies, principally dry ice and carbon dioxide, and the Company's foreign operations. These companies, which individually do not meet the criteria of SFAS 131, were formerly reported under the "Manufacturing segment." (b) Special charges for the year ended March 31, 1999 include reserve adjustments of $1 million ($570 thousand after-tax) resulting from the divestiture of two non-core businesses. Special charges for the year ended March 31, 1998 include fourth quarter charges of $22.4 million ($14.3 million after-tax) consisting of the impairment write-down of property, equipment and goodwill, reserves related to the divestiture of several non-core businesses, facility exit costs and severance. Special charges for the year ended March 31, 1998 were offset by a non-recurring gain of $14.5 million ($9.4 million after-tax) from a partial recovery of refrigerant losses related to the fiscal 1997 fraudulent breach of contract by a third- party supplier of refrigerant gas and a fourth quarter net gain of $3 million ($1.9 million after-tax) related to an acquisition break-up fee. (c) Other income, net, for the quarter ended March 31, 1999 includes a $1.5 million ($922 thousand after-tax) non-recurring gain resulting from a settlement of certain matters related to the December 1998 divestiture of the Company's calcium carbide and carbon products operations. Other income, net, for the year ended March 31, 1999 includes a $25.4 million ($15 million after-tax) non-recurring gain resulting from the divestiture of the Company's calcium carbide and carbon products operations. Other income, net, for the year ended March 31, 1998 includes a $1.5 million ($980 thousand after-tax) non-recurring gain resulting from the divestiture of a non-core business. (d) 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 recognized by an equity affiliate. 5 9 (e) The results for the year ended March 31, 1999 exclude: - the $15 million after-tax effect of the non-recurring gain from the divestiture of the Company's calcium carbide and carbon products operations, of which $922 thousand represented a fourth quarter gain as described in footnote(c). - the $1.8 million after-tax non-recurring gain from insurance proceeds recognized by an equity affiliate. - the $570 thousand after-tax non-recurring gain resulting from the first quarter divestiture of two non-core businesses. The results for the year ended March 31, 1998 exclude: - the fourth quarter $14.3 million after-tax effect of special charges noted in footnote(b). - the $11.3 million after-tax effect of the non-recurring gains from a partial recovery of refrigerant losses and an acquisition break-up fee noted in footnote(b). - the $980 after-tax gain related to the divestiture of a non-core business. 6 10 AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) (Unaudited)
March 31, March 31, 1999 1998 ASSETS Trade receivables, net $ 195,708 $ 186,342 Inventories 154,424 154,937 Prepaid expenses and other current assets 28,710 25,555 TOTAL CURRENT ASSETS 378,842 366,834 Property and equipment, net 717,859 687,304 Goodwill, net 428,349 410,753 Other non-current assets 173,422 176,583 TOTAL ASSETS $1,698,472 $1,641,474 LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 14,997 $ 12,150 Accounts payable, trade 85,486 84,602 Accrued expenses and other current liabilities 108,295 128,806 TOTAL CURRENT LIABILITIES 208,778 225,558 Long-term debt 852,489 830,845 Deferred income taxes 142,675 121,356 Other non-current liabilities 23,585 36,842 Stockholders' equity 470,945 426,873 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,698,472 $1,641,474
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