-----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, R+8/Umo13kB62ok85SiTcg4fatO6szWfvr7O5SAiuGYteveTzM7vqOmNPJns5dFC EP1KDc8uzwDoaYVZVKIhcQ== 0000804212-00-000001.txt : 20000203 0000804212-00-000001.hdr.sgml : 20000203 ACCESSION NUMBER: 0000804212-00-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000121 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000128 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: 516454 BUSINESS ADDRESS: STREET 1: 259 RADNOR-CHESTER 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): January 21, 2000 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 January 27, 2000, Airgas, Inc. reported its earnings for the third quarter and nine months ended December 31, 1999, as described in the press release attached as Exhibit 99.1 and incorporated herein by reference. On January 21, 2000, Airgas, Inc. announced that it completed the acquisition of Mallinckrodt Inc.'s Puritan-Bennett medical gas business, as described in the press release attached as Exhibit 99.2 and incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits __________________________________________________________________ (a) None (b) None (c) Exhibits. 99.1 Press Release dated January 27, 2000 99.2 Press Release dated January 21, 2000 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/ Roger F. Millay Roger F. Millay Senior Vice President & Chief Financial Officer DATED: January 28, 2000 EX-99 2 EX-99.1 - PRESS RELEASE 4 Exhibit 99.1 For More Information: Chris Close (610) 902-6257 chris.close@airgas.com AIRGAS REPORTS STRONG FISCAL THIRD QUARTER RESULTS RADNOR, Pennsylvania, January 27, 2000 - Airgas, Inc. (NYSE - ARG) today reported results for the quarter and nine-month period ended December 31, 1999. Net earnings, excluding certain gains and charges, increased 68% to $.15 per diluted share in the current quarter versus a year ago, driven by improved gross margins and lower expenses. Same-store sales were essentially flat. After-tax cash flow improved 13% to $.50 per diluted share. Peter McCausland, chairman and chief executive officer, commented, "Our significant growth in earnings and cash flow are impressive given the ongoing weakness in several important customer segments. The improved gross margin reflects benefits from our new hardgoods distribution infrastructure, higher gas margins and a shift in product mix. Our people in the field are working hard to control expenses and capital spending while continuing to build our infrastructure. As a result, our business is generating solid cash flow, which has allowed us to make acquisitions, buy back stock and pay down debt. "We are beginning to sense some growing optimism from our operating management regarding prospects of improved demand in our core business. While we've been experiencing growth in national accounts and certain strategic product areas, the eventual strengthening of our core customer segments must, to a large degree, drive earnings and cash flow growth in the future. I'm pleased that we've been able to meet our earnings targets for three consecutive quarters. Achieving our plan for the fourth quarter, however, may require an improvement in our daily sales rate." Comparing the quarter ended December 31, 1999 with the same period last year, after-tax cash flow (net earnings, excluding certain gains and charges, plus depreciation, amortization and deferred income taxes) was $35.7 million, or $.50 per diluted share, compared to $31.7 million, or $.44 per diluted share. Excluding certain gains and charges netting to less than $.01 per diluted share, net earnings were $10.3 million, or $.15 per diluted share, versus net earnings in last year's quarter, also excluding non-recurring gains, of $6.1 million, or $.09 per diluted share. Sales were $369 million this quarter compared to $380 million last year. Net divestitures and acquisitions accounted for more than $10 million of the sales decline. For the nine-month period, after-tax cash flow increased to $108.5 million, or $1.53 per diluted share, compared to $101.6 million, or $1.42 per diluted share, during the same period last year. Net earnings, excluding certain gains and charges in both the current and prior years, were $31.3 million, or $.44 per diluted share, compared to $27.3 million, or $.38 per diluted share. Sales were $1.14 billion compared to $1.18 billion in the prior year. 5 During the quarter ended December 31, 1999, cost of products sold for the Gas Operations segment included a $3.8 million ($2.2 million after-tax) charge related to certain specialty gases inventories. Also in the current quarter, the Company recorded a $2.8 million ($1.7 million after-tax) gain primarily related to an insurance settlement pertaining to a fiscal 1997 loss. Total same-store sales were flat in the fiscal third quarter versus the same period a year ago. Sales in the Distribution segment were down 1.3% reflecting an increase of 1.6% for gas and rent offset by a 3.3% decline in hardgoods sales. Same-store sales for the Gas Operations segment were 15% higher. Total capital expenditures for the quarter were $17 million versus $26 million in last year's quarter. Capital spending year-to- date was $48 million versus $82 million last year. During the quarter, the Company purchased 1.1 million shares of its common stock at a total cost of $10.5 million. For the first nine months of the fiscal year, the Company purchased 2.3 million shares at a total cost of $24.8 million. There are approximately 4.8 million shares remaining under the current share repurchase authorization. The slides to be presented during the Company's earnings teleconference, along with the teleconference replay instructions are available on the Company's Internet site www.airgas.com. The replay will be accessible for one week starting at approximately 11:00 a.m. Eastern Time on Friday, January 28, 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. Airgas' integrated distributor network consists of approximately 700 locations, including branches, packaged gas fill plants, distribution centers, and inbound and outbound telemarketing operations. 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 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, improved demand, growth in national accounts and certain strategic product areas, net earnings and cash flow growth, the Company's ability to improve its daily sales rate and gross margins, meet earnings targets, and control expenses and capital spending, and other factors described in the Company's reports, including Form 10-Q dated September 30, 1999, filed by the Company with the Securities and Exchange Commission. Consolidated statements of earnings and consolidated condensed balance sheets follow. 6
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, 1999 1998 (a) 1999 1998(a) Net sales: Distribution $339,761 $339,623 $1,032,701 $1,054,384 Gas Operations 29,673 40,700 103,515 123,304 Total net sales 369,434 380,323 1,136,216 1,177,688 Costs and expenses: Cost of products sold (excluding depreciation and amortization) Distribution 180,126 183,922 555,205 574,062 Gas Operations (b) 15,471 17,792 44,506 55,299 Selling, distribution and administrative expenses 125,676 130,932 381,822 393,085 Depreciation and amortization 21,986 22,504 67,105 65,849 Special charges (c) (2,829) - (2,829) (1,000) Total costs and expenses 340,430 355,150 1,045,809 1,087,295 Operating income: Distribution 26,622 20,634 79,290 75,246 Gas Operations (447) 4,539 8,288 14,147 Special charges (c) 2,829 - 2,829 1,000 Total operating income 29,004 25,173 90,407 90,393 Interest expense, net (13,949) (15,701) (42,167) (46,227) Other income, net (d) 1,234 24,358 16,639 25,189 Equity in earnings of unconsolidated affiliates (e) 663 2,862 2,388 4,838 Earnings before income taxes and the cumulative effect of an accounting change 16,952 36,692 67,267 74,193 Income tax expense 7,192 14,604 28,920 30,350 Earnings before the cumulative effect of an accounting change 9,760 22,088 38,347 43,843 Cumulative effect of an accounting change, net of taxes (f) - - (590) - Net earnings $ 9,760 $ 22,088 $ 37,757 $ 43,843 Net earnings (excluding gains/charges)(g) $ 10,291 $ 6,143 $ 31,319 $ 27,323 Per share data: Basic earnings per share $ .14 $ .32 $ .54 $ .63 Diluted earnings per share $ .14 $ .31 $ .53 $ .61 Per share data (excluding gains/charges)(g): Basic earnings per share $ .15 $ .09 $ .45 $ .39 Diluted earnings per share $ .15 $ .09 $ .44 $ .38 Weighted average shares outstanding: Basic 69,200 69,700 69,600 70,000 Diluted 70,800 71,600 71,000 71,700 See notes to consolidated financial statements.
7 Notes to consolidated statements of earnings: (a) Certain reclassifications have been made to previously issued financial statements to conform to the current presentation. (b) Gas Operations' cost of products sold for the three and nine months ended December 31, 1999 includes an inventory write-down of $3.8 million ($2.2 million after-tax) related to certain specialty gas inventories. (c) Special charges of $2.8 million ($1.7 million after-tax) for the three and nine months ended December 31, 1999 primarily include an insurance settlement related to a fiscal 1997 loss. Special charges of $1 million ($575 thousand after-tax) for the nine months ended December 31, 1998 represents reserve adjustments related to the divestiture of two non-core businesses. (d) Other income, net, for the nine months ended December 31, 1999 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 three and nine months ended December 31, 1998 includes a $24 million ($14.1 million after-tax) gain from the divestiture of the Company's calcium carbide and carbon products manufacturing operations. The operations of this business were previously reported in the Gas Operations segment. (e) Equity in earnings of unconsolidated affiliates for the three and nine months ended December 31, 1998 includes a $1.8 million 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 nine months ended December 31, 1999 include 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 (b) through (f). 8
AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) (Unaudited) December 31, March 31, 1999 1999 ASSETS Trade accounts receivable, net $ 193,287 $ 195,708 Inventories, net 158,095 154,424 Deferred income tax asset, net 7,937 7,549 Prepaids and other current assets 23,393 21,161 TOTAL CURRENT ASSETS 382,712 378,842 Property, plant and equipment, net 709,444 717,859 Goodwill, net 424,700 428,349 Other non-current assets, net 133,200 173,422 TOTAL ASSETS $1,650,056 $1,698,472 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable, trade $ 69,103 $ 85,486 Accrued expenses and other current liabilities 101,492 108,295 Current portion of long-term debt 2,434 19,645 TOTAL CURRENT LIABILITIES 173,029 213,426 Long-term debt 801,022 847,841 Deferred income taxes 152,653 142,675 Other non-current liabilities 31,830 23,585 Stockholders' equity 491,522 470,945 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,650,056 $1,698,472
EX-99 3 EX-99.2 - PRESS RELEASE 9 Exhibit 99.2 AIRGAS COMPLETES ACQUISITION OF GAS DISTRIBUTION BUSINESS FROM MALLINCKRODT RADNOR, Pennsylvania, January 21, 2000 - Airgas, Inc. (NYSE - ARG) announced today that it closed the acquisition of Mallinckrodt Inc.'s (NYSE - MKG) Puritan-Bennett medical gas business. The agreement to acquire the business was previously announced by Airgas on January 10, 2000. So far during its current fiscal year, Airgas has completed five distributor acquisitions with total annual sales of approximately $97 million. "The associates from Puritan-Bennett have a premier reputation in the healthcare industry," commented Peter McCausland, Airgas' chairman and chief executive officer. "This business, along with the people who have built it, will be a tremendous addition to our core medical gases business and a complement to the dynamic culture we've built here at Airgas." The Puritan-Bennett medical gas business is a leading distributor of medical gases in North America with annual sales of approximately $70 million. Gas and cylinder rent represent approximately 90% of sales. Puritan-Bennett has positioned itself as a niche player in the gas industry by specializing in the growing healthcare segment. Its network of 36 locations and approximately 390 employees in the United States and Canada provides gas service primarily to hospitals, companies providing home healthcare services, elderly care facilities and other suppliers to the healthcare industry. The acquired business will more than double the size of Airgas' existing medical gases business, which currently generates annual sales of approximately $50 million. Based in St. Louis, Missouri, Mallinckrodt Inc. is a global manufacturer and marketer of specialty medical products designed to sustain breathing, diagnose disease and relieve pain. The company does business in more than 100 countries; operates Respiratory, Imaging and Pharmaceuticals product groups, and had fiscal 1999 net sales of $2.6 billion. The Mallinckrodt website address is www. mallinckrodt.com. Airgas 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 approximately 700 locations including branches, packaged gas fill plants, distribution centers and inbound and outbound telemarketing operations. Airgas can be visited on the Internet at www.airgas.com. Contacts: Mallinckrodt - Barbara Abbett (314) 654-5230 or barbara.abbett@mkg.com Airgas - Chris Close (610) 902-6257 or chris.close@airgas.com -----END PRIVACY-ENHANCED MESSAGE-----