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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):
May 14, 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
_________________________________________
(Address of principal executive offices)
Registrant's telephone number, including area code: (610) 687-5253
_______________
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Item 5. Other Events.
____________
On May 14, 1998, Airgas, Inc. reported its earnings for the fourth quarter
and year ended March 31, 1998, 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 May 14, 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: May 15, 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 AND
FISCAL 1998 RESULTS
- RECORD AFTER-TAX CASH FLOW
- SALES UP 26% IN QUARTER
- PROFITS IMPACTED BY REPOSITIONING EXPENSES
RADNOR, Pennsylvania, May 14, l998 -- Airgas, Inc. (NYSE-ARG) today
reported record sales of $388 million for the quarter ended March 31, 1998, an
increase of 26% from $309 million in the fourth quarter last year. After-tax
cash flow (net earnings plus depreciation, amortization and deferred income
taxes and before certain previously announced fourth quarter special charges
and additional direct repositioning costs related to the "Repositioning
Airgas for Growth" initiative) was helped by tax planning and increased 19%
to a record $37 million, or $.52 per share, compared to $31 million, or $.44
per share for the same quarter last year. Net earnings for the fourth quarter
of fiscal l998, before the special charges and direct repositioning costs,
were $10.7 million, or $.15 per share, compared to $10.9 million, or $.16 per
share, a year ago. The prior year results exclude special charges and a loss
related to the divestiture of a non-core business.
The previously-announced special charges recorded in the fourth quarter
ended March 31, 1998, totaled $19.5 million ($12.4 million after-tax) and
consist of severance and exit costs for the closure of duplicate facilities,
a non-cash charge for the write-down of property, plant and equipment and
goodwill impaired as a result of the restructuring, and the divestiture
of several non-core businesses, offset by a one-time net gain related to an
acquisition break-up fee.
Repositioning costs of $5.7 million ($3.4 million after-tax), for
relocating employees and other personnel expenses, exiting certain product
lines, and computer conversions have also been incurred in the quarter and
were charged against earnings. In conformance with generally accepted
accounting principles, these costs and expenses were not included in the
special charge.
The fourth quarter special charges and the additional direct
repositioning costs resulted in a reported net loss in the fourth quarter of
$5.2 million, or $.07 per share and after-tax cash flow of $37.3 million, or
$.52 per share.
For the year ended March 31, 1998, sales increased 25% to $1.45 billion
from $1.16 billion in fiscal l997. After-tax cash flow tax for the year
(before special charges, additional direct repositioning costs, and
non-recurring gains), rose by 16% to a record $136.3 million, or $1.92 per
share, compared to $117.3 million, or $1.71 per share, a year earlier. Net
earnings for the year, before special charges, direct repositioning costs, and
non-recurring gains were $46.0 million, or $.65 per share, compared to $44.3
million, or $.65 per share, in fiscal l997. The prior year results exclude
special charges and a loss related to the divestiture of a non-core business.
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Included in Airgas' results for the year ended March 31, 1998 were
non-recurring gains of $1.5 million ($980 thousand after-tax) from the sale of
a non-core business, and $14.5 million ($9.4 million after-tax) from the
partial recovery of refrigerant losses.
The special charges and direct repositioning costs, combined with
non-recurring gains, resulted in reported net earnings for the year of $40.5
million, or $.57 per share.
Peter McCausland, Airgas' Chairman and Chief Executive Officer, said "We
made significant progress in fiscal 1998 toward our goal of becoming a
multi-billion dollar, world-class distribution company, supplying packaged
gases and related products and services nationally. This was another year of
growth by acquisition, with 28 transactions adding combined annual sales of
$265 million.
"We also launched the Repositioning Airgas for Growth initiative which
will provide the foundation for a new growth period including higher internal
growth plus continuing acquisitions. Our repositioning is expensive, but
necessary. It is progressing rapidly.
"We are pleased with the growth in sales and gross profits in the fourth
quarter. Same-store sales grew 12% in ADI and 4.5% in our Distribution Group.
As we build the necessary infrastructure, that growth should add to the bottom
line and shareholder value," McCausland said.
Airgas, Inc. is the largest distributor of industrial, medical and
specialty gases and related equipment in North America. Airgas can be visited
on the Internet at http://www.airgas.com.
Forward-Looking Statements Warning
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.
Consolidated statements of earnings follow on page 3.
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AIRGAS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
1998 1997 (a) 1998 1997(a)
____ _______ ____ _______
Net sales:
Distribution $286,193 $258,246 $1,098,588 $999,555
Direct Industrial 63,937 32,771 223,370 99,216
Manufacturing 38,282 17,864 126,032 60,123
_______ _______ _________ _________
Total net sales 388,412 308,881 1,447,990 1,158,894
_______ _______ _________ _________
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 146,609 130,658 555,392 503,470
Direct Industrial 46,560 23,093 161,326 72,543
Manufacturing 20,602 9,850 62,139 35,370
Selling, distribution and
administrative expenses 130,084 100,588 468,565 371,310
Depreciation, depletion and
amortization 19,861 16,690 76,670 62,491
Special charges, net(b)(c) 19,450 31,425 4,950 31,425
_______ _______ _________ _________
Total costs and expenses 383,166 312,304 1,329,042 1,076,609
_______ _______ _________ _________
Operating income:
Distribution 22,593 23,904 105,371 100,300
Direct Industrial 1,190 904 6,101 3,076
Manufacturing 913 3,194 12,426 10,334
Special charges, net(b)(c) (19,450) (31,425) (4,950) (31,425)
_______ _______ _______ ________
Total operating income (loss) 5,246 ( 3,423) 118,948 82,285
Interest expense, net (14,056) (11,333) (53,290) (39,752)
Other income, net 325 1,108 2,813 1,672
Equity in earnings of unconsolidated
affiliates 1,669 950 2,931 958
Minority interest (36) (259) (873) (817)
_______ _______ _______ _______
Earnings (loss) before income
taxes ( 6,852) (12,957) 70,529 44,346
Income tax expense (benefit) (1,665) ( 2,803) 29,989 21,080
_______ _______ _______ _______
Net earnings (loss) $( 5,187) $(10,154) $ 40,540 $ 23,266
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Diluted earnings(loss)per share (e) $ (.07) $ (.15) $ .57 $ .34
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Pro forma net earnings(excluding
special charges, direct repositioning
costs and recovery of refrigerant
losses)(d) $ 10,672 $ 10,864 $ 45,992 $ 44,286
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Pro forma diluted earnings per share
excluding special charges, direct
repositioning costs and recovery of
refrigerant losses (d),(e) $ .15 $ .16 $ .65 $ .65
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Weighted average shares 71,600 69,900 70,800 68,640
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(a) Certain reclassifications have been made to previously issued financial
statements to conform to the current presentation.
(b) The results for the fourth quarter and year ended March 31, 1998 include
special charges which totaled $19.5 million ($12.4 after-tax) and
consist of severance, exit costs for the closure of duplicate
facilities, a non-cash charge for the write-down of property, plant and
equipment and goodwill impaired as a result of the restructuring , and
the divestiture of several non-core businesses, offset by a one-time net
gain related to an acquisition break-up fee.
The results for the fourth quarter and year ended March 31, 1997 include
special charges which consisted of $26.4 million ($17 million after-tax)
related to the fraudulent breach of contract by a third-party supplier
of refrigerant gas and $5.0 million ( $3.2 million after-tax) related to
the write-down of certain machinery and equipment, goodwill and other
intangible assets of two non-core businesses.
(c) The results for the year ended March 31, 1998 include a $14.5 million (
$9.4 million after-tax) gain from a partial recovery of refrigerant
losses.
(d) The pro forma results for the fourth quarter and year ended March 31,
1998 exclude:
- the effect of the fourth quarter special charges noted in
footnote(b)
- fourth quarter additional direct repositioning costs related to the
"Repositioning Airgas for Growth" initiative
- the effect of the second quarter non-recurring gain from partial
recovery of refrigerant losses noted in footnote(c)
- the gain related to the second quarter sale of a non-core business
The pro forma results for the fourth quarter and year ended March 31,
1997 exclude:
- the effects of the special charges noted in footnote(b)
- the loss related to the sale of a non-core business.
(e) Effective with its year ended March 31, 1998, Airgas implemented SFAS
No. 128 which establishes new standards for computing and presenting
earnings per share (EPS) and requires the disclosure of Basic and
Diluted EPS. All prior periods have been restated to conform to the new
rules. Basic EPS (loss) amounts were ($.07) and $.59 for the fourth
quarter and year-to-date March 31, 1998, respectively (($.15) and $.35
for the same periods in the prior year).
Excluding the special charges, direct additional repositioning costs, a
non-recurring gain and the recovery of refrigerant losses, Basic EPS was
$.15 and $.67 for the fourth quarter and year-to-date ended March 31,
1998, respectively. ($.16 and $.67 for the same periods in the prior
year, excluding the special charges and a loss related to sale of a
non-core business).
