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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):
April 14, 1997
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
incorporation) No.)
259 Radnor-Chester Road, Suite 100
Radnor, PA 19087
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(Address of principal executive offices)
Registrant's telephone number, including area code: (610) 687-5253
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Item 5. Other Events.
____________
On April 14, 1997, Airgas, Inc. reported special charges and its earnings
outlook for the fourth quarter of its fiscal year ended March 31,
1997, as described in the press release attached as Exhibit 99 and
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
__________________________________________________________________
(a) None
(b) None
(c) Exhibits.
99 Press Release dated April 14, 1997
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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.
BY: /s/ Thomas C. Deas, Jr.
_______________________
Vice President &
Chief Financial Officer
DATED: April 17, 1997
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For More Information:
James N. Borum
Jeffrey P. Cornwell
Thomas C. Deas, Jr.
(610) 687-5253
AIRGAS, INC. REPORTS SPECIAL CHARGES, EARNINGS OUTLOOK
RADNOR, PA, April 14, 1997 - Airgas, Inc. (NYSE-ARG) said today that its
results for the fourth quarter of its current fiscal year ended March 31, 1997
will include a non-recurring charge associated with the damages resulting from
the previously announced fraudulent breach of a contract by a third-party
supplier, a write-down related to two non-core, product-line businesses, and a
loss related to the sale of a Canadian medical home-care business. The
Company said that although it expects strong cash flow growth for the quarter,
reported earnings for the quarter exclusive of these special charges will
likely be below analysts' estimates due to expenses associated with the
Company's investments in new branches, Airgas Direct Industrial, and its joint
venture with National Welders Supply, as well as higher-than-expected costs of
consolidating distribution businesses acquired in the Southeast over the past
24 months.
Airgas expects to report its results for the fourth quarter and full 1997
fiscal year on May 8, 1997.
In connection with the fraudulent breach of contract by a third-party supplier
of refrigerant gas which Airgas reported on December 23, 1996, the Company
said it will take a non-recurring pre-tax charge of approximately $26 million
(approximately $17 million after-tax). This includes approximately $23
million for payments made to a third-party supplier and approximately $3
million in costs associated with the Company's investigation into the matter
and legal action taken by the Company against the supplier and other parties.
"We expect the loss from the fraudulent breach of contract to be partially
offset by insurance claims along with cash and inventories recovered in
litigation," said Airgas' Chairman and Chief Executive Officer, Peter
McCausland. "We continue to press forward with all efforts to recover
damages. Nevertheless, we are taking a conservative accounting approach,
recognizing the full loss now, and will record recoveries as they are
obtained."
Airgas will also take a pre-tax, non-cash charge of approximately $5 million
(approximately $3 million after-tax) related to the write-down of certain
machinery and equipment, goodwill and other intangible assets of two non-core,
product-line businesses. In addition, the Company has recognized a $700,000
after-tax loss on the sale of a medical home-care business in Ontario. "Our
purchase of a national rental welder business has allowed us to rationalize
and upgrade our fleet of welding machines at our distribution companies.
Another product-line company has been downsized and will be restructured. The
sale of our Ontario medical home-care business will allow us to focus on our
growing industrial gas business in eastern Canada," Mr. McCausland said.
"On an operating basis, most of Airgas' industrial, medical and specialty gas
businesses are performing up to expectations. In our Southern Division,
however, we have experienced greater-than-anticipated costs in the
consolidation of certain gas distribution businesses. This Division, which
has current annual sales of $370 million, has absorbed 36 acquisitions with
annual sales of $163 million over the past 24 months. These consolidations
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sometimes cost more and take longer than we expect; however, we believe these
businesses are now positioned to move ahead," commented Mr. McCausland.
"Although our after-tax cash flow for the quarter is expected to show solid
growth, our earnings per share, excluding the refrigerant and other charges
and the loss associated with the sale of our Ontario medical home-care
business, are expected to be slightly below the $.17 per share reported in the
fourth quarter of our 1996 fiscal year," Mr. McCausland said.
"Looking ahead to fiscal 1998, we are confident of improved performance in our
core gas business and expect good cash flow and earnings growth despite the
dilutive effect of investments in information systems, logistics and
facilities enhancements. We believe these strategic investments will be a
significant driver of future cash flow and earnings expansion."
Airgas also said that the Company has purchased 800,000 shares pursuant to a
1.6 million-share stock purchase program previously authorized by the Board of
Directors in December 1996.
Airgas is the largest distributor of industrial, medical and specialty gases
and related equipment in North America with annual sales in excess of $1.2
billion. Its distributor network includes over 600 locations in 41 states,
Canada and Mexico. Airgas can be visited via the Internet at
http://www.airgas.com.
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.
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. Accordingly, actual
results may differ materially from those expressed in the forward-looking
statements, and the making of such statements should not be regarded as a
representation by the Company or any other person that the results expressed
therein will be achieved. Important risk factors include, but are not limited
to, the Company's ability to consolidate and integrate acquisitions, the
Company's ability to recover assets in connection with the fraudulent breach
of contract related to refrigerant R-12 purchases and other factors described
in the Company's 1996 Form 10-K filed with the Securities and Exchange
Commission.
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