EX-99 2 0002.txt EX-99 - PRESS RELEASE 4 Exhibit 99 For More Information: Chris Close (610) 902-6257 chris.close@airgas.com AIRGAS REPORTS RECORD AFTER-TAX CASH FLOW PER SHARE IN FISCAL 2001 FIRST QUARTER o After-tax cash flow of $.54 per share; up 8% o Net earnings of $.15 per share; up 7% o Same-store sales up 3% RADNOR, Pennsylvania, July 27, 2000 - Airgas, Inc. (NYSE - ARG) today reported after-tax cash flow (net earnings, plus depreciation, amortization and deferred income taxes) for the quarter ended June 30, 2000 of $36.0 million, or a record $.54 per diluted share, compared to $35.2 million, or $.50 per diluted share, for the quarter ended June 30, 1999. Net earnings for the quarter were $9.8 million, or $.15 per diluted share, versus $9.7 million, or $.14 per diluted share, for the same quarter last year. Sales increased 8% to $409 million from $379 million last year. "We are pleased that the positive same-store sales trend continued to build momentum this quarter," stated Peter McCausland, chairman and chief executive officer. "This is a clear sign that our strategic sales initiatives are generating results and that many of our customer segments, which have been impacted by low commodity prices and the soft U.S. industrial economy, are improving. While various cost pressures are still affecting our business, higher gross profits are fueling earnings and after-tax cash flow growth. "Taking a longer-term perspective, we remain confident in and committed to our current strategic direction," added Mr. McCausland. "While there have been bumps in the road, we have traveled a tremendous distance over the past several years. Our journey has left us with a distribution infrastructure, national account capabilities and a broad product and service offering that we believe are second to none in our industry. In addition, we continue to expand our eCommerce capabilities and we think that we are uniquely positioned to be the fulfillment arm for various integrators on the Internet. Our associates have done a terrific job during a difficult period of transition and soft end markets, and I want to personally thank all of them for their hard work and dedication. We are poised to grow earnings and cash flow in the future and are confident that the equity market will one day again value this company based on its strong cash-flow fundamentals." Total same-store sales increased by 2.9% in the fiscal first quarter versus the same period a year ago. Same-store sales in the Distribution segment were up 2.8%, reflecting increases of 3.3% for gases and rent and 2.5% for hardgoods. Same-store sales for the Gas Operations segment were 4.3% higher. Capital expenditures were $15 million for the quarter versus $14 million in last year's quarter. 5 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, July 28, 2000. Airgas, Inc. is the largest distributor of industrial, medical and specialty gases and related equipment and one of the largest distributors 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 customer demand; sales, earnings and cash flow growth; expansion of eCommerce capabilities; and equity market valuation. 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 soft customer demand; an economic downturn; increased competition; an inability to continue strengthening the business and growing earnings and cash flow; and other factors described in the Company's reports, including Form 10-K dated March 31, 2000, 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 June 30, 2000 1999 Net sales: Distribution $374,739 $345,967 Gas Operations 34,259 33,526 Total net sales 408,998 379,493 Costs and expenses: Cost of products sold (excluding depreciation and amortization) Distribution 202,749 188,432 Gas Operations 12,447 12,835 Selling, distribution and administrative expenses 140,015 126,961 Depreciation and amortization 22,744 22,166 Total costs and expenses 377,955 350,394 Operating income: Distribution 26,125 26,260 Gas Operations 4,918 2,839 Total operating income 31,043 29,099 Interest expense, net (15,765) (13,783) Other income, net 52 222 Equity in earnings of unconsolidated affiliates 1,364 1,000 Earnings before income taxes and the cumulative effect of an accounting change 16,694 16,538 Income tax expense 6,878 6,863 Earnings before the cumulative effect of an accounting change 9,816 9,675 Cumulative effect of an accounting change, net of taxes (a) - (590) Net earnings $ 9,816 $ 9,085 Net earnings (excluding accounting change)(b) $ 9,816 $ 9,675 Per share data: Basic earnings per share $ .15 $ .13 Diluted earnings per share $ .15 $ .13 Per share data (excluding accounting change)(b): Basic earnings per share $ .15 $ .14 Diluted earnings per share $ .15 $ .14 Weighted average shares outstanding: Basic 65,100 69,800 Diluted 67,300 71,100 See notes to consolidated financial statements.
7 Notes to consolidated statements of earnings: (a) Effective April 1, 1999, the Company adopted Statement of Position 98- 5, "Reporting on the Costs of Start-up Activities." The quarter ended June 30, 1999 includes an after-tax charge of $590 thousand for the cumulative effect of an accounting change related to previously capitalized costs from start-up activities. (b) Net earnings and per share amounts, adjusted to exclude the cumulative effect of an accounting change described in note (a). 8 AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands)
(Unaudited) June 30, March 31, 2000 2000 ASSETS Trade accounts receivable, net $ 217,486 $ 211,989 Inventories, net 167,728 159,438 Deferred income tax asset, net 13,752 13,752 Prepaids and other current assets 24,639 23,611 TOTAL CURRENT ASSETS 423,605 408,790 Property, plant and equipment, net 750,678 753,768 Goodwill, net 442,141 445,498 Other non-current assets, net 127,792 131,275 TOTAL ASSETS $1,744,216 $1,739,331 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable, trade $ 73,013 $ 78,276 Accrued expenses and other current liabilities 119,803 121,249 Current portion of long-term debt 18,702 20,071 TOTAL CURRENT LIABILITIES 211,518 219,596 Long-term debt 867,304 857,422 Deferred income taxes 164,245 160,808 Other non-current liabilities 27,935 28,998 Stockholders' equity 473,214 472,507 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,744,216 $1,739,331