-----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, VNA4To3QGH2kIthFy3mgMRRc3tvElRtI9EgO7c3J/duRmbX4uk751Ue0C1VIQECB JY2RCYQp399mSodhQqUZaw== 0000804212-00-000005.txt : 20000515 0000804212-00-000005.hdr.sgml : 20000515 ACCESSION NUMBER: 0000804212-00-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000511 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000512 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: 629964 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): May 11, 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 May 11, 2000, Airgas, Inc. reported its earnings for the fourth quarter and fiscal year ended March 31, 2000, as described in the press release attached as Exhibit 99.1 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 May 11, 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: May 12, 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 FOURTH QUARTER AND FISCAL 2000 RESULTS RADNOR, Pennsylvania, May 11, 2000 - Airgas, Inc. (NYSE - ARG) today reported results for the quarter and fiscal year ended March 31, 2000. After-tax 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 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 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 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." 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 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. 5 Capital expenditures in the fourth quarter were $18 million versus $20 million in last year's quarter. Capital spending for the year was $65 million versus $102 million last year. The Company has substantially completed the repurchase of its shares under its existing share repurchase authorization. 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 and have been properly disclosed. In one suit, an Oklahoma State court certified a nationwide class. In another, in California, the Company is in the midst 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 site www.airgas.com. The replay will be accessible for one week starting at approximately 11:00 a.m. Eastern Time on Friday, May 12, 2000. Airgas, Inc. is the largest distributor of industrial, medical and s pecialty 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. 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 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, 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 dated December 31, 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 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.
7 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). 8
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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