-----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, H7XPw22lQXUV9a/yvaOzMUMZgLnjdydPhtvh6a6PU+Wj1S5HZovdMlTnaTPwPJxy sSl9jQX6IAjFU+sEcTvrvQ== 0000804212-03-000023.txt : 20030725 0000804212-03-000023.hdr.sgml : 20030725 20030724175053 ACCESSION NUMBER: 0000804212-03-000023 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030724 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRGAS INC CENTRAL INDEX KEY: 0000804212 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-INDUSTRIAL MACHINERY & EQUIPMENT [5084] IRS NUMBER: 560732648 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09344 FILM NUMBER: 03801728 BUSINESS ADDRESS: STREET 1: 259 N. RADNOR-CHESTER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 6106875253 MAIL ADDRESS: STREET 1: 259 N. RADNOR-CHESTER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 8-K 1 form8k.txt FORM 8-K - ITEMS 12 AND 7 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): July 24, 2003 _____________ 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 _____________ Item 9. Regulation FD Disclosure ________________________ In accordance with the Securities and Exchange Commission's interim guidance regarding Form 8-K Item 12 filing requirements as set forth in Release No. 33-8216, the following information is intended to be furnished by Airgas, Inc. (the "Company") under Item 12, "Disclosure of Results of Operations and Financial Condition," rather than under Item 9. The information in this Form 8-K report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference in any filing under the Securities Exchange Act of 1933, as amended, except as expressly set forth by specific reference in such a filing. On July 24, 2003, Airgas, Inc. reported its earnings for its first quarter ended June 30, 2003, as described in the press release attached as Exhibit 99.1 and incorporated herein by reference. Non-GAAP Measures: The press release attached as Exhibit 99.1 contains certain financial measures that are not defined under generally accepted accounting principles (GAAP). The Company uses Adjusted Debt to provide investors with a more accurate and meaningful measure of the change in the Company's obligation to repay debt by adjusting for non-cash items and funds received (or repaid) under the trade receivables securitization program. Free Cash Flow is a non-GAAP measure of the Company's ability to generate cash from continuing operations, which can be used at management's discretion for acquisitions, the repayment of debt or to support other investing and financing activities. The Company believes that Free Cash Flow provides investors with meaningful insight into the ability of the Company to generate cash flow in excess of the cash required to maintain the Company's existing operations. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits __________________________________________________________________ (a) None (b) None (c) Exhibits. 99.1 - Press Release dated July 24, 2003 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/ Robert M. McLaughlin --------------------------- Robert M. McLaughlin Vice President & Controller DATED: July 24, 2003 EX-99 3 exh_99.txt EXHIBIT 99.1 - 6-30-03 EARNINGS PRESS RELEASE AIRGAS News Release Airgas, Inc. 259 N. Radnor-Chester Road Suite 100 Radnor, PA 19087-5283 www.airgas.com - ---------------------------------------------------------------------------- EXHIBIT 99.1 - ------------ Investor Contact: Media Contact: - ---------------- ------------- Melissa Nigro (610) 902-6206 James Ely (610) 902-6010 melissa.nigro@airgas.com jim.ely@airgas.com For release: IMMEDIATELY AIRGAS REPORTS FIRST QUARTER EPS OF $0.25 RADNOR, PA - July 24, 2003 -- Airgas, Inc., (NYSE: ARG) today reported earnings for its first quarter ended June 30, 2003. Net earnings for the quarter were $18.5 million, or $0.25 per diluted share, compared to $14 million, or $0.20 per diluted share, in the same period a year ago. As disclosed in the notes to the financial statements, the quarter ended June 30, 2002 included a special charge of $2.7 million ($1.7 million after tax) or $0.03 per diluted share related to the integration of the Air Products acquisition. First quarter sales increased 1% to $461 million, while total same-store sales declined 1% compared to the same quarter a year ago, reflecting continued weakness in manufacturing and other industrial segments. Same- store sales in the Distribution segment were down 2%, driven by a 4% decline in hardgoods. Same-store sales for the Gas Operations segment increased 9%, attributed to strong sales at the new Hopewell, Virginia CO2 plant, which began operations in January 2003. "We delivered a solid first quarter performance. The prolonged weakness in the industrial sector continues to temper top-line results, but strength in our growth platforms, such as medical and bulk gas, and a focus on cost control contributed to the EPS growth," said Airgas Chairman and Chief Executive Officer Peter McCausland. Free Cash Flow for the quarter ended June 30, 2003 was a negative $3 million contributing to a $5 million increase in adjusted debt. Free Cash Flow for the comparative quarter ended June 30, 2002 was a negative $5 million. Negative free cash flow is typical in the first quarter due to the timing of payments for interest and annual bonuses; however, the recently completed quarter also included $7 million of incremental capital spending versus the prior year as the Company invested in cylinders, tanks and other revenue generating assets to meet customer needs. The definition of free cash flow and a reconciliation to the attached Consolidated Statement of Cash Flows, as well as the definition of adjusted debt and a reconciliation to the balance sheet are attached. McCausland continued, "Recent economic data on the industrial sector seems to indicate a slight firming, but it appears we are still bouncing along the bottom. We remain confident of our full year earnings per share guidance of $1.05 to $1.12; however, we expect same-store sales for the first half to be flat. We continue to focus on enhancing our market-leading customer offerings and service. Airgas has the financial capacity and the culture to succeed and grow, both organically and through acquisition." The Company will conduct an earnings teleconference on Friday, July 25, 2003, beginning at 8:30 a.m. Eastern Time. Access the teleconference by calling (800) 500-0177. Slides to be presented during the Company's teleconference and information about how to access a live and on-demand webcast of the teleconference are available in the 'Investor Info' section on the Company's Internet site www.airgas.com. The telephone replay will be accessible for one week starting July 25th at approximately 11:00 a.m. Eastern Time by calling (888) 203-1112 and entering passcode 195416. ABOUT AIRGAS, INC. Airgas, Inc. is the largest U.S. distributor of industrial, medical and specialty gases, welding, safety and related products. Its integrated network of nearly 800 locations includes branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base. For more information, please visit 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. These statements include, but are not limited to, statements regarding: a firming in the industrial sector; the range of expected earnings per share for fiscal 2004; the expected same-store sales for the first half of fiscal 2004; and the Company's financial capacity and culture to succeed and grow, both organically and through acquisition. The Company 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 the Company's ability to execute on its strategic initiatives of improving operational efficiency and growing sales and market share; an economic downturn; increased industry competition; a lack of acquisition opportunities; adverse changes in customer buying patterns; significant fluctuations in interest rates; political and economic uncertainties associated with current world events; and other factors described in the Company's reports, including Form 10-K dated March 31, 2003, filed by the Company with the Securities and Exchange Commission. Consolidated statements of earnings, consolidated condensed balance sheets and consolidated statements of cash flows follow.
AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands, except per share data) (Unaudited) Three Months Ended June 30, 2003 2002 ---- ---- Net sales $461,056 $457,668 ------- ------- Costs and expenses: Cost of products sold (excl. deprec.) 221,133 222,266 Selling, distribution and administrative expenses 178,461 176,299 Depreciation 19,291 18,459 Amortization 1,511 1,740 Special charges (a) -- 2,694 ------- ------- Total costs and expenses 420,396 421,458 Operating income 40,660 36,210 Interest expense, net (10,435) (13,121) Discount on securitization of trade receivables (868) (851) Other income (expense), net (b) (173) (123) Equity in earnings of unconsolidated affiliates 700 932 ------- ------- Earnings before income tax expense 29,884 23,047 Income tax expense 11,356 9,003 ------- ------- Net earnings $18,528 $14,044 ======= ======= Basic earnings per share $ .26 $ .20 ======= ======= Diluted earnings per share $ .25 $ .20 ======= ======= Weighted average shares outstanding: Basic 71,900 69,900 Diluted 73,900 72,000 See attached notes.
AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) (Unaudited) June 30, March 31, 2003 2003 ---- ---- ASSETS Trade accounts receivable, net (c) $ 78,787 $ 71,346 Inventories, net 157,968 151,405 Deferred income tax asset, net 18,058 17,688 Prepaids and other current assets 29,406 30,143 --------- --------- TOTAL CURRENT ASSETS 284,219 270,582 Property, plant and equipment, net 871,935 869,492 Goodwill 439,977 437,709 Other intangible assets, net 21,142 19,832 Other non-current assets 107,247 102,628 --------- --------- TOTAL ASSETS $1,724,520 $1,700,243 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable, trade $ 77,321 $ 85,375 Accrued expenses and other current liabilities 107,909 121,292 Current portion of long-term debt 609 2,229 --------- --------- TOTAL CURRENT LIABILITIES 185,839 208,896 Long-term debt (c) 669,214 658,031 Deferred income taxes 215,213 209,140 Other non-current liabilities 30,210 27,243 Stockholders' equity 624,044 596,933 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,724,520 $1,700,243 ========= ========= See attached notes.
AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) Quarter Ended Quarter Ended June 30, 2003 June 30, 2002 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $18,528 $14,044 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 19,291 18,459 Amortization 1,511 1,740 Deferred income taxes 4,800 (11,396) Equity in earnings of unconsolidated affiliates (700) (932) Losses on divestitures -- 241 Losses on sales of plant and equipment 57 246 Stock issued for employee stock purchase plan 2,264 2,227 Changes in assets and liabilities, excluding effects of business acquisitions and divestitures: Securitization of trade receivables (2,300) 6,400 Trade receivables, net (4,073) (12,697) Inventories, net (5,682) (348) Prepaid expenses and other current assets 392 19,737 Accounts payable, trade (8,259) (6,957) Accrued expenses and other current liabilities (12,368) (17,787) Other assets (1,551) 882 Other liabilities 3,804 1,547 ------ ------ Net cash provided by operating activities 15,714 15,406 ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (21,319) (14,427) Proceeds from sales of plant and equipment 1,342 1,102 Proceeds from divestitures -- 3,167 Business acquisitions, holdbacks and other settlements of acquisition related liabilities (5,750) (4,342) Dividends and fees from unconsolidated affiliates 422 684 Other, net (1,520) 1,281 ------ ------ Net cash used in investing activities (26,825) (12,535) ------ ------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 81,603 93,400 Repayment of debt (74,505) (96,100) Dividends paid to stockholders (2,925) -- Exercise of stock options 5,803 4,331 Cash overdraft 1,135 (4,502) ------ ------ Net cash provided by (used in) financing activities 11,111 (2,871) ------ ------ Change in cash Cash - Beginning of period $ -- $ -- Cash - End of period -- -- ------ ------ $ -- $ -- See attached notes ====== ======
Notes (Unaudited): (a) Special charges of $2.7 million ($1.7 million after tax) for the three months ended June 30, 2002 consist of a restructuring charge related to the integration of the business acquired from Air Products in the fourth quarter of fiscal 2002 and costs related to the consolidation of certain of the Company's procurement functions. The special charges include facility exit costs associated with the closure of certain Airgas facilities and severance for approximately 130 employees. (b) Other income (expense), net, for the three months ended June 30, 2002 includes a net non-recurring loss of approximately $200 thousand ($500 thousand after tax) related to divestitures. (c) The Company participates in a securitization agreement with two commercial banks to sell up to $175 million of qualified trade receivables. Net proceeds from the securitization were used to reduce borrowings under the Company's revolving credit facilities. The amount of outstanding receivables under the agreement was $156.6 million and $158.9 million at June 30, 2003 and March 31, 2003, respectively. (d) Business segment information for the Company's Distribution and Gas Operations segments is shown below:
Quarter Ended Quarter Ended June 30, 2003 June 30, 2002 ------------- ------------- (In thousands) Dist. Gas Ops. Elim Combined Dist. Gas Ops. Elim Combined ----- -------- ---- -------- ----- -------- ---- -------- Gas and rent $220,407 $48,072 $(9,597) $258,882 $216,957 $43,666 $(8,840) $251,783 Hardgoods 201,448 1,349 (623) 202,174 205,098 1,300 (513) 205,885 ------- ------ ------ ------- ------- ------ ------ ------- Total net sales 421,855 49,421 (10,220) 461,056 422,055 44,966 (9,353) 457,668 Cost of products sold, excl. deprec. expense 209,149 22,204 (10,220) 221,133 211,449 20,170 (9,353) 222,266 Selling, distribution and administrative expenses 161,950 16,511 178,461 160,615 15,684 176,299 Depreciation expense 16,170 3,121 19,291 15,678 2,781 18,459 Amortization expense 1,357 154 1,511 1,613 127 1,740 Special charge -- -- -- 2,694 -- 2,694 ------- ------ ------- ------- ------ ------- Operating income 33,229 7,431 40,660 30,006 6,204 36,210 ------- ------ ------- ------- ------ -------
Reconciliation of Non-GAAP Financial Measures (Unaudited) - --------------------------------------------------------- Increase in Adjusted Debt: ------------------------- Reconciliation of the change in debt per the Balance Sheet to the increase in debt adjusted for off-balance sheet and non-cash items ("adjusted debt"): Quarter Ended (Amounts in thousands) June 30, 2003 ------------- Increase in debt per the Balance Sheet $9,563 Reduction in funding under the trade receivables securitization program (2,300) Change in fair value of debt related to interest rate swap agreements (non-cash) (2,465) Other (266) ------ Increase in adjusted debt $4,532 ====== The Company uses Adjusted Debt to provide investors with a more accurate and meaningful measure of the change in the Company's obligation to repay debt by adjusting for non-cash items and funds received (or repaid) under the trade receivables securitization program. Free Cash Flow: -------------- Reconciliation of net cash provided by operating activities per the Consolidated Statement of Cash Flows to Free Cash Flow: Quarter Ended Quarter Ended (Amounts in thousands) June 30, 2003 June 30, 2002 ------------- ------------- Net cash provided by operating activities $15,714 $15,406 PLUS: Dividends and fees from equity affiliates 422 684 LESS: Cash (provided) used by the securitization of trade receivables 2,300 (6,400) Capital expenditures (21,319) (14,427) ------ ------ Free Cash Flow ($2,883) ($4,737) ====== ====== The Company believes Free Cash Flow provides investors meaningful insight into the Company's ability to generate cash from continuing operations, which can be used at management's discretion for acquisitions, the repayment of debt or to support other investing and financing activities. -----END PRIVACY-ENHANCED MESSAGE-----