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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):
October 28, 1999
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
_____________
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Item 5. Other Events.
____________
On October 28, 1999, Airgas, Inc. reported its earnings for the
second quarter and six months ended September 30, 1999, 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 October 28, 1999
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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.
(Registrant)
BY: /s/ Scott M. Melman
Scott M. Melman
Senior Vice President &
Chief Financial Officer
DATED: November 1, 1999
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For More Information:
Chris Close
(610) 902-6257
[email protected]
AIRGAS REPORTS RECORD AFTER-TAX CASH FLOW
IN FISCAL SECOND QUARTER
- After-tax Cash Flow Per Share Up 8% to $.53
- EPS Up 7% to $.16
- Same-store Sales Down 2.5%
RADNOR, Pennsylvania, October 28, 1999 - Airgas Inc. (NYSE -
ARG) today reported results for the quarter and six-month period
ended September 30, 1999.
Peter McCausland, chairman and chief executive officer,
commented, "Our record cash flow and solid earnings performance are
especially noteworthy given the continued weakness in many of our
customer segments. Although overall the U.S. economy has been
healthy, manufacturing activity, excluding certain `high-tech'
sectors, has been weak over the past year. Many of our competitors
and vendors are reporting soft sales as well.
"We were encouraged to see that sales in September improved
relative to July and August levels, although it's certainly too
early to say that this is the beginning of an upward trend. We
continue to aggressively pursue our long-term strategies and remain
focused on completing our infrastructure build-out and controlling
expenses and capital spending. Our results are a tribute to the
hard work and dedication of our people in the field."
After-tax cash flow (net earnings, excluding special items,
plus depreciation, amortization and deferred income taxes) for the
quarter was a record $37.7 million, or $.53 per diluted share,
compared to $35 million, or $.49 per diluted share, last year. Net
earnings were $11.4 million, or $.16 per diluted share, which
excludes an after-tax gain of $7.6 million, or $.11 per diluted
share, related to the divestiture of operations in Poland and
Thailand, versus $10.5 million, or $.15 per diluted share, a year
ago. Sales were $387 million compared to $397 million last year.
After-tax cash flow for the six-month period increased to $72.9
million, or $1.02 per diluted share, compared to $69.9 million, or
$.97 per diluted share, last year. Net earnings were $21 million,
or $.30 per diluted share, which excludes a net benefit of $.10 per
diluted share primarily consisting of the divestiture gain. Net
earnings in the prior year, excluding a non-recurring benefit of
$.01 per diluted share, were $21.2 million, or $.29 per diluted
share. Sales were $767 million compared to $797 million in the
prior year.
Total same-store sales were down 2.5% in the second quarter
versus the same period a year ago. Sales in the Distribution
segment were down 3.2% reflecting an increase of .4% for gas and
rent offset by a 5.7% decline in hardgoods sales. Same-store sales
for the Gas Operations segment were up 4.5% for the quarter.
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Total capital expenditures for the quarter were $16 million
versus $35 million in the prior year. Capital spending year-to-date
was $31 million versus $57 million last year.
During the quarter, the Company purchased 536 thousand shares
of its common stock at a total cost of $6.8 million. For the first
six months of the fiscal year, the company purchased 1.2 million
shares at a total cost of $14.3 million. There are approximately
six million shares remaining under the current share repurchase
authorization.
The slides to be presented during the Company's earnings
teleconference, along with the teleconference replay instructions
are available on the Company's Internet site www.airgas.com. The
replay will be accessible for one week starting at approximately
11:00AM Eastern Time on Friday, October 29, 1999.
Airgas, Inc. is the largest distributor of industrial, medical
and specialty gases and related equipment and the third largest
distributor 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. 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 underlying
market conditions, sales trends, the Company's ability to control
expenses and capital spending, any potential problems relating to
Year 2000 matters, and other factors described in the Company's
reports, including Form 10-Q dated June 30, 1999, filed by the
Company with the Securities and Exchange Commission.
Consolidated statements of earnings and consolidated condensed
balance sheets follow.
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<TABLE>
<CAPTION>
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,
1999 1998(a) 1999 1998(a)
<S> <C> <C> <C> <C>
Net sales:
Distribution $346,973 $354,208 $692,940 $714,761
Gas Operations 40,316 42,384 73,842 82,604
Total net sales 387,289 396,592 766,782 797,365
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 186,647 192,789 375,079 390,140
Gas Operations 16,200 17,755 29,035 37,507
Selling, distribution and
administrative expenses 129,185 132,509 256,146 262,153
Depreciation and amortization 22,953 21,748 45,119 43,345
Special charge (b) - - - (1,000)
Total costs and expenses 354,985 364,801 705,379 732,145
Operating income:
Distribution 26,408 26,072 52,668 54,612
Gas Operations 5,896 5,719 8,735 9,608
Special charge (b) - - - 1,000
Total operating income 32,304 31,791 61,403 65,220
Interest expense, net (14,435) (15,720) (28,218) (30,526)
Other income, net (c) 15,183 709 15,405 831
Equity in earnings of unconsolidated
affiliates 725 1,222 1,725 1,976
Earnings before income taxes and
the cumulative effect of an
accounting change 33,777 18,002 50,315 37,501
Income tax expense 14,865 7,522 21,728 15,746
Earnings before the cumulative
effect of an accounting change 18,912 10,480 28,587 21,755
Cumulative effect of an accounting
change, net of taxes (d) - - (590) -
Net earnings $ 18,912 $ 10,480 $ 27,997 $ 21,755
Net earnings (excluding special items)(e) $ 11,353 $ 10,480 $ 21,028 $ 21,180
Per share data:
Basic earnings per share $ .27 $ .15 $ .40 $ .31
Diluted earnings per share $ .27 $ .15 $ .39 $ .30
Per share data (excluding special items)(e):
Basic earnings per share $ .16 $ .15 $ .30 $ .30
Diluted earnings per share $ .16 $ .15 $ .30 $ .29
Weighted average shares outstanding:
Basic 69,700 70,000 69,800 70,100
Diluted 71,200 71,700 71,200 71,800
See notes to consolidated financial statements.
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Notes to consolidated financial statements:
(a) Certain reclassifications have been made to previously
issued financial statements to conform to the current
presentation.
(b) Special charges of $1 million ($575 thousand after-tax)
for the six months ended September 30, 1998 represent
reserve adjustments related to the divestiture of two
non-core businesses.
(c) 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.
(d) 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 a first quarter after-tax
charge of $590 thousand for the cumulative effect of an accounting
change related to previously capitalized costs from start-up
activities.
(e) Net earnings for the three and six months ended September 30,
1999 excluding the first quarter after-tax charge of $590 thousand
($.01 per diluted share) and the second quarter after-tax gain of
$7.6 million ($.11 per diluted share). See notes (c) and (d).
Net earnings for the six months ended September 30, 1998
excluding the effect of reserve adjustments of $575
thousand after-tax ($.01 per diluted share). See note (b).
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<TABLE>
<CAPTION>
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
September 30, March 31,
1999 1999
<S> <C> <C>
ASSETS
Trade accounts receivable, net $ 199,796 $ 195,708
Inventories, net 157,418 154,424
Deferred income tax asset, net 7,783 7,549
Prepaids and other current assets 21,326 21,161
TOTAL CURRENT ASSETS 386,323 378,842
Property, plant and equipment, net 729,811 717,859
Goodwill, net 427,846 428,349
Other non-current assets, net 136,309 173,422
TOTAL ASSETS $1,680,289 $1,698,472
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 71,698 $ 85,486
Accrued expenses and
other current liabilities 106,454 108,295
Current portion of long-term debt 8,875 19,645
TOTAL CURRENT LIABILITIES 187,027 213,426
Long-term debt 835,015 847,841
Deferred income taxes 148,586 142,675
Other non-current liabilities 20,366 23,585
Stockholders' equity 489,295 470,945
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,680,289 $1,698,472
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