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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 27, 1998
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 North 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.
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On April 27, 1998, Airgas, Inc. reported its earnings outlook for the
fourth quarter ended March 31, 1998 and that its earnings for the fourth
quarter will be impacted by the near-term effects of its "Repositioning Airgas
for Growth" initiative and impending divestiture of several non-core
businesses, and expects to take a one-time special charge related to the
repositioning program. This announcement is described in the press release
attached as Exhibit 99 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) None
(b) None
(c) Exhibits.
99 Press Release dated April 27, 1998
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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 27, 1998
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EXHIBIT 99.1
For More Information
Thomas C. Deas, Jr.
James R. Rapp
(610) 902-6205
AIRGAS, INC. REPORTS FOURTH QUARTER 1998 SPECIAL CHARGE,
EXITING OF NON-CORE BUSINESSES, AND EARNINGS OUTLOOK
RADNOR, PA, April 27, 1998 -- Airgas, Inc. (NYSE-ARG) announced today that
earnings for the fourth quarter ended March 31, 1998 will be impacted by the
near-term effects of its "Repositioning Airgas for Growth" initiative and the
impending divestiture of several non-core businesses. In addition, Airgas
expects to take a one-time special charge related to the repositioning
program.
The pre-tax special charge of approximately $25 million will cover the closing
of facilities, the write-down of property, plant, and equipment impaired as a
result of the restructuring, and the divestitures. Additional repositioning
costs of approximately $6 million, for relocating employees and other
personnel expenses, exiting certain businesses, and computer conversions have
been incurred in the quarter and are being charged against earnings. In
conformance with accounting rules these costs and expenses are not included in
the special charge.
Additionally, Airgas estimates earnings per share for its fourth quarter,
exclusive of the one-time special charge and the direct repositioning costs,
will be negatively impacted by the indirect effects of its repositioning and
will likely be 10 to 15 percent below last year's fourth quarter and also
below analysts' current estimates.
Airgas expects to report its results for the fourth quarter and fiscal 1998 on
May 14, 1998.
Looking ahead to fiscal 1999, Peter McCausland, Chairman and CEO, indicated,
"The repositioning program will be substantially completed by late Spring 1999
and the current fiscal year will be a period of continuing transition to the
new Airgas growth model. However, we believe the year ahead will reflect
continued strong cash generation and same-store sales growth in our core
businesses. Although we expect fiscal 1999 earnings to be impacted by
repositioning expenses of approximately $.12 per share, we also expect to
begin to see the benefits of these efforts in the second half. With
everything we have going on we will no doubt hit bumps in the road, but we
believe that earnings for fiscal 1999 will be reasonably close to analysts
current expectations."
The repositioning program reaffirms Airgas' commitment to its core U.S.
distribution business and the market opportunities which have increased as the
Company has expanded its gas and hardgoods product lines and strategic
accounts program. To focus on its core business, Airgas intends to divest
several non-strategic U.S. businesses with total sales of approximately $25
million. The Company will also divest or seek joint venture partners for
several foreign operations, including its industrial gas interests in India,
Thailand, and Indonesia.
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The repositioning program includes reorganizing the corporate structure,
consolidating the Distribution segment by combining 34 hubs into 16 larger
regional companies, restructuring the carbon dioxide businesses in the
Manufacturing segment, consolidating Airgas Direct Industrial's eleven
warehouse facilities into five large regional centers, building a national
information, procurement, and logistics infrastructure to support expanded
product lines and distribution channels, and strengthening national sales and
marketing.
According to Mr. McCausland, "The Repositioning Airgas for Growth initiative
will transition Airgas from a company which has grown largely by acquisition
to a dynamic operating company with an aggressive acquisition plan. In the
past ten years, Airgas has grown from $88 million to $1.6 billion in sales
with over 260 acquisitions. We are now building the foundation for a second
growth period which will include higher internal growth plus continuing
acquisitions."
"We are confident that we have the right strategy to grow our franchise as the
largest distributor of industrial, medical, and specialty gases and related
equipment in North America. Our repositioning is moving forward rapidly. It
is expensive, but necessary. As our strong fourth-quarter sales and gross
profits will demonstrate, we are focusing on top-line growth and margins as we
move through this repositioning. We believe that by investing now to become
the low-cost supplier to our customers, we will be rewarded with new business,
that we will realize our vision of a world-class, multi-billion dollar, multi-
channel distribution company, and that these steps will bring important future
benefits to our shareholders, customers, and employees."
Airgas, Inc. is the largest distributor of industrial, medical, and specialty
gases and related equipment in North America. It can be visited on the
Internet at http://www.airgas.com.
Forward-Looking Statements Warning
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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.
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 the making of such
statements should not be regarded as a representation by Airgas 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 underlying market conditions, continued
growth in same-store sales, costs and potential disruptive effects of the
repositioning, implementation of information technology projects, the success
and timing of intended divestitures, and factors described in the Company's
reports, including Form 10-Q, dated December 31, 1997, filed by the Company
with the Securities and Exchange Commission.
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