EX-99 2 ex99_pr.txt EXHIBIT 99 - PRESS RELEASE For More Information: Chris Close (610) 902-6257 chris.close@airgas.com AIRGAS REPORTS CONTINUED SALES MOMENTUM IN FISCAL SECOND QUARTER RADNOR, Pennsylvania, October 26, 2000 - Airgas, Inc. (NYSE - ARG) today reported results for the quarter and six-month period ended September 30, 2000. Fiscal second quarter sales increased 6% to $410 million from $387 million last year driven by continued acceleration in same-store sales growth. Total same-store sales increased by 4.4% in the fiscal second quarter versus the same period a year ago. Same-store sales in the Distribution segment were up 4.0%, reflecting increases of 5.5% for gases and rent and 2.8% for hardgoods. Same-store sales for the Gas Operations segment were 8.7% higher. Comparing the quarter ended September 30, 2000 to the same period last year, after-tax cash flow (net earnings, plus depreciation, amortization and deferred income taxes) per diluted share increased 2% to $0.54 from $0.53 last year. Net earnings were flat at $0.16 per diluted share, which excludes a divestiture gain of $0.11 per share in the prior year. "We are pleased that the positive same-store sales growth trend continued to accelerate for a third consecutive quarter," stated Peter McCausland, chairman and chief executive officer. "Strategic sales initiatives continue to fuel growth and we are seeing positive trends in several other segments of our business. Additionally, higher gross profits somewhat tempered the cost pressures we have experienced the last few quarters and contributed to the modest growth in after-tax cash flow per share despite one less billing day this quarter. "Looking ahead, we expect a positive impact on operating margins from recent price increases," added Mr. McCausland. "The combination of improved operating margins and continued sales momentum should drive earnings and cash flow growth and improve return on capital in the future. We paid down $22 million of our debt this quarter and we will continue to focus our free cash flow on debt reduction." For the six-month period, sales increased 7% to $819 million from $767 million last year. After-tax cash flow per diluted share increased 6% to $1.08 from $1.02 in the prior year period. Net earnings were flat at $0.30 per diluted share compared to the prior year period, which excludes a net benefit primarily consisting of a divestiture gain in the prior period. Capital expenditures for the quarter and year-to-date period were flat with the prior periods at $16 million and $31 million, respectively. The Company will conduct an earnings teleconference on Friday, October 27, 2000 beginning at 8:30 a.m. Eastern Time. Slides to be presented during the Company's teleconference, information about how to access a live webcast of the teleconference, and 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, October 27, 2000. Airgas, Inc. is the largest distributor of industrial, medical and specialty gases and welding 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 success of strategic sales initiatives in fueling sales growth; the positive impact of recent price increases on operating margins; the Company's expectations regarding the impact of improved operating margins and continued sales momentum on earnings, cash flow growth, and return on capital in the future; the reduction of indebtedness in the future. 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 the success of marketing initiatives on strategic product sales; the market acceptance of the Company's price increases; increased cost pressures; an economic downturn (including adverse changes in the specific markets for our products); increased competition; customer acceptance of the Company's products; adverse changes in customer buying patterns; the inability of the Company to grow sales, earnings and cash flow; and other factors described in the Company's reports, including Form 10-K dated March 31, 2000 and Form 10-Q dated June 30, 2000, filed by the Company with the Securities and Exchange Commission. Consolidated statements of earnings and consolidated condensed balance sheets follow.
AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended September 30, September 30, 2000 1999 2000 1999 ---- ---- ---- ---- Net sales: Distribution $371,059 $346,973 $745,798 $692,940 Gas Operations 39,038 40,316 73,297 73,842 ------- ------- ------- ------- Total net sales 410,097 387,289 819,095 766,782 ------- ------- ------- ------- Costs and expenses: Cost of products sold (excluding depreciation and amortization) Distribution 198,650 186,647 401,399 375,079 Gas Operations 14,437 16,200 26,884 29,035 Selling, distribution and administrative expenses 141,653 129,185 281,668 256,146 Depreciation 15,990 16,525 32,314 32,304 Amortization 6,321 6,428 12,741 12,815 ------- ------- ------- ------- Total costs and expenses 377,051 354,985 755,006 705,379 ------- ------- ------- ------- Operating income: Distribution 26,598 26,408 52,723 52,668 Gas Operations 6,448 5,896 11,366 8,735 ------ ------ ------ ------ Total operating income 33,046 32,304 64,089 61,403 Interest expense, net (16,306) (14,435) (32,071) (28,218) Other income, net (a) 405 15,183 457 15,405 Equity in earnings of unconsolidated affiliates 487 725 1,851 1,725 ------ ------ ------ ------ Earnings before income taxes and the cumulative effect of an accounting change 17,632 33,777 34,326 50,315 Income tax expense 7,229 14,865 14,107 21,728 ------ ------ ------ ------ Earnings before the cumulative effect of an accounting change 10,403 18,912 20,219 28,587 Cumulative effect of an accounting change, net of taxes (b) - - - (590) ------- ------- ------- ------- Net earnings $ 10,403 $ 18,912 $ 20,219 $ 27,997 ------- ------- ------- ------- Net earnings (excluding special items)(c) $ 10,403 $ 11,353 $ 20,219 $ 21,028 ------- ------- ------- ------- Per share data: Basic earnings per share $ .16 $ .27 $ .31 $ .40 Diluted earnings per share $ .16 $ .27 $ .30 $ .39 Per share data (excluding special items)(c): Basic earnings per share $ .16 $ .16 $ .31 $ .30 Diluted earnings per share $ .16 $ .16 $ .30 $ .30 Weighted average shares outstanding: Basic 65,400 69,700 65,200 69,800 Diluted 66,600 71,200 66,900 71,200 See notes to consolidated statements of earnings.
Notes to consolidated statements of earnings: (a) Other income, net, for the three and six months ended September 30, 1999 includes a $14.4 million ($7.6 million after-tax) non-recurring gain resulting from the divestiture of the Company's operations in Poland and Thailand. (b) Effective April 1, 1999, the Company adopted Statement of Position 98-5, "Reporting on the Costs of Start-up Activities." The six months ended September 30, 1999 include an after-tax charge of $590 thousand for the cumulative effect of an accounting change related to previously capitalized costs from start-up activities. (c) Net earnings and per share amounts, adjusted to exclude the non-recurring divestiture gain and the cumulative effect of an accounting change described in notes (a) and (b), respectively.
AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) (Unaudited) September 30, March 31, 2000 2000 ---- ---- ASSETS Trade accounts receivable, net $ 220,603 $ 211,989 Inventories, net 161,507 159,438 Deferred income tax asset, net 13,463 13,752 Prepaids and other current assets 22,622 23,611 ------- ------- TOTAL CURRENT ASSETS 418,195 408,790 Property, plant and equipment, net 748,384 753,768 Goodwill, net 439,025 445,498 Other non-current assets, net 118,783 131,275 --------- --------- TOTAL ASSETS $1,724,387 $1,739,331 --------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable, trade $ 67,691 $ 78,276 Accrued expenses and other current liabilities 113,504 121,249 Current portion of long-term debt 18,662 20,071 ------- ------- TOTAL CURRENT LIABILITIES 199,857 219,596 Long-term debt 845,599 857,422 Deferred income taxes 167,494 160,808 Other non-current liabilities 26,055 28,998 Stockholders' equity 485,382 472,507 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,724,387 $1,739,331 --------- ---------