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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):
May 13, 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 May 13, 1999, Airgas, Inc. reported its earnings for the
fourth quarter and fiscal year ended March 31, 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 May 13, 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: May 17, 1999
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EXHIBIT 99.1
For More Information:
Chris Close
(610) 902-6257
AIRGAS, INC. REPORTS FOURTH QUARTER AND
FISCAL 1999 RESULTS
RADNOR, Pennsylvania, May 13, l999 -- Airgas, Inc. (NYSE-
ARG) today reported sales of $384 million for the quarter ended
March 31, 1999, a decrease of 1% from $388 million in the fourth
quarter last year. After-tax cash flow (net earnings, excluding
special charges and non-recurring gains, plus depreciation,
amortization and deferred income taxes) was $36.7 million, or
$.51 per diluted share, in the 1999 fourth quarter compared to
$33.7 million, or $.47 per diluted share, in the 1998 fourth
quarter. Net earnings (excluding special charges and non-
recurring gains) were $7.2 million, or $.10 per diluted share, in
both periods. Including special charges and non-recurring gains,
net earnings for the quarter ended March 31, 1999 were $8.1
million, or $.11 per diluted share, compared to a loss of $5.2
million, or $.07 per diluted share, a year ago.
For the year ended March 31, 1999, sales increased 8% to
$1.56 billion from $1.45 billion in fiscal year l998. After-tax
cash flow (excluding special charges and non-recurring gains) was
$138.3 million, or $1.93 per diluted share, compared to $132.8
million, or $1.88 per diluted share, a year earlier. Net earnings
(excluding special charges and non-recurring gains) were $34.5
million, or $.48 per diluted share, in fiscal year 1999 compared
to $42.6 million, or $.60 per diluted share, in fiscal year 1998.
Including special charges and non-recurring gains, net earnings
for the year ended March 31, 1999 were $51.9 million, or $.72 per
diluted share, compared to $40.5 million, or $.57 per diluted
share, a year ago.
Results for the year ended March 31, 1999 include non-
recurring after-tax gains of $17.4 million, or $.24 per diluted
share, primarily due to the December 1998 divestiture of the
Company's calcium carbide and carbon products operations.
Results for the year ended March 31, 1998 include after-tax
special charges of $14.3 million, or $.20 per diluted share,
offset by non-recurring after-tax gains of $12.3 million, or $.17
per diluted share.
Peter McCausland, Airgas' chairman and chief executive
officer, said, "In the fourth quarter, we continued to see
weakness in many of our markets, though they appear to have
bottomed. Higher same-store sales for gases and rent this
quarter compared to last year were offset by lower hardgoods
sales resulting in marginally lower same-store sales in our
Distribution segment. Repositioning expenses continued to
depress operating margins.
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"We are entering the new fiscal year with cautious optimism.
We expect improving operating margins resulting from cost
improvement actions, benefits from the ongoing rollout of our
integrated distribution infrastructure and modest same-store
sales growth. We continue to aggressively manage capital
expenditures and working capital. Although this has been one of
Airgas' most challenging years, our management team and associates
are confident that the Company is executing the right strategy by
managing and investing to meet our customers' requirements.
Airgas is well positioned to benefit as the industrial economy
recovers and to create value for our shareholders."
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 more than 700
locations, including branch locations, distribution centers,
catalog and inbound and outbound telemarketing operations. Airgas
can be visited on the internet at 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. 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 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, growth in same-store sales, improvement in
operating margins, the ability to manage working capital, costs
and potential disruptive effects of the "Repositioning for
Growth" initiative, the Company's ability to reduce costs,
implementation of information technology projects, any potential
problems relating to Year 2000 matters, the success and timing of
intended divestitures and other factors described in the
Company's reports, including Form 10-Q dated December 31, 1998,
filed by the Company with the Securities and Exchange Commission.
Consolidated statements of earnings and consolidated
condensed balance sheets follow on pages 3 through 7.
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<TABLE>
AIRGAS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS(a)
(Amounts in thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net sales:
Distribution $351,800 $350,130 $1,406,184 $1,321,958
Gas Operations 31,730 38,282 155,034 126,032
Total net sales 383,530 388,412 1,561,218 1,447,990
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 194,506 193,169 768,568 716,718
Gas Operations 14,188 20,992 69,487 62,820
Selling, distribution and
administrative expenses 130,156 129,694 523,241 467,884
Depreciation and amortization 22,077 19,861 87,926 76,670
Special charges, net(b) -- 19,450 (1,000) 4,950
Total costs and expenses 360,927 383,166 1,448,222 1,329,042
Operating income (loss):
Distribution 23,201 23,783 98,447 111,472
Gas Operations (598) 913 13,549 12,426
Special charges, net(b) -- (19,450) 1,000 (4,950)
Total operating income 22,603 5,246 112,996 118,948
Interest expense, net (14,071) (14,056) (60,298) (53,290)
Other income, net (c) 1,474 325 26,714 2,813
Equity in earnings of unconsolidated
affiliates (d) 2,204 1,669 7,042 2,931
Minority interest (42) (36) (93) (873)
Earnings (loss) before income
taxes 12,168 (6,852) 86,361 70,529
Income tax expense (benefit) 4,087 (1,665) 34,437 29,989
Net earnings (loss) $ 8,081 $ (5,187) $ 51,924 $ 40,540
Net earnings
(excluding special charges and
non-recurring gains)(e) $ 7,159 $ 7,245 $ 34,482 $ 42,565
Per share data:
Basic earnings per share $ .12 $ (.07) $ .74 $ .59
Diluted earnings per share $ .11 $ (.07) $ .72 $ .57
Per share data:
(excluding special charges and
non-recurring gains)(e)
Basic earnings per share $ .10 $ .10 $ .49 $ .62
Diluted earnings per share $ .10 $ .10 $ .48 $ .60
Weighted average shares outstanding:
Basic 70,100 69,700 70,000 68,700
Diluted 71,700 71,600 71,700 70,800
See notes to financial statements on pages 5 and 6.
</TABLE>
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<TABLE>
AIRGAS, INC.
SUPPLEMENTAL - PRIOR SEGMENT PRESENTATION (1)
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands)
(Unaudited)
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net sales:
Distribution $287,792 $286,193 $1,148,420 $1,098,588
Direct Industrial 64,008 63,937 257,764 223,370
Manufacturing 31,730 38,282 155,034 126,032
Total net sales 383,530 388,412 1,561,218 1,447,990
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 148,195 146,609 579,682 555,392
Direct Industrial 46,311 46,560 188,886 161,326
Manufacturing 14,188 20,992 69,487 62,820
Selling, distribution and
administrative expenses 130,156 129,694 523,241 467,884
Depreciation and amortization 22,077 19,861 87,926 76,670
Special charges, net(b) -- 19,450 (1,000) 4,950
Total costs and expenses 360,927 383,166 1,448,222 1,329,042
Operating income (loss):
Distribution 22,569 22,592 95,650 105,371
Direct Industrial 632 1,191 2,797 6,101
Manufacturing (598) 913 13,549 12,426
Special charges, net(b) -- (19,450) 1,000 (4,950)
Total operating income 22,603 5,246 112,996 118,948
(1) The supplemental financial results are presented in the operating segment format
utilized prior to the implementation of SFAS 131. Also see note (a) on page 5.
See notes to financial statements on pages 5 and 6.
</TABLE>
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(a) The Company has redefined its operating segments and is reporting its
results of operations based on the new management structure established
under the "Repositioning Airgas for Growth" initiative. Effective with
its year ended March 31, 1999, Airgas implemented Statement of Financial
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise
and Related Information" ("SFAS 131"). Comparative 1998 information has
been reclassified to conform to the current presentation. The Company's
new operating segments consist of Distribution and Gas Operations.
Descriptions of the new operating segments are as follows:
The Distribution segment accounts for 90% of consolidated sales and
reflects the integration of the traditional industrial gas distribution
companies (formerly reported under the "Distribution segment") and the
safety products and industrial tool and supplies distribution companies
(formerly reported under the "Airgas Direct Industrial segment").
These companies have been combined into one segment to reflect
management's approach to evaluating performance and deciding on how to
allocate resources in the future as the Company continues to develop
the centralized purchasing, shared distribution facilities and multi-
channel marketing initiatives begun under the Repositioning.
The segment entitled Gas Operations consists of certain domestic
operating companies, principally dry ice and carbon dioxide, and the
Company's foreign operations. These companies, which individually do
not meet the criteria of SFAS 131, were formerly reported under the
"Manufacturing segment."
(b) Special charges for the year ended March 31, 1999 include reserve
adjustments of $1 million ($570 thousand after-tax) resulting from the
divestiture of two non-core businesses.
Special charges for the year ended March 31, 1998 include fourth
quarter charges of $22.4 million ($14.3 million after-tax) consisting
of the impairment write-down of property, equipment and goodwill,
reserves related to the divestiture of several non-core businesses,
facility exit costs and severance. Special charges for the year ended
March 31, 1998 were offset by a non-recurring gain of $14.5 million
($9.4 million after-tax) from a partial recovery of refrigerant losses
related to the fiscal 1997 fraudulent breach of contract by a third-
party supplier of refrigerant gas and a fourth quarter net gain of $3
million ($1.9 million after-tax) related to an acquisition break-up
fee.
(c) Other income, net, for the quarter ended March 31, 1999 includes a $1.5
million ($922 thousand after-tax) non-recurring gain resulting from a
settlement of certain matters related to the December 1998 divestiture
of the Company's calcium carbide and carbon products operations.
Other income, net, for the year ended March 31, 1999 includes a $25.4
million ($15 million after-tax) non-recurring gain resulting from the
divestiture of the Company's calcium carbide and carbon products
operations.
Other income, net, for the year ended March 31, 1998 includes a $1.5
million ($980 thousand after-tax) non-recurring gain resulting from the
divestiture of a non-core business.
(d) Equity in earnings of unconsolidated affiliates for the year ended
March 31, 1999 includes a $1.8 million after-tax non-recurring gain
from insurance proceeds recognized by an equity affiliate.
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(e) The results for the year ended March 31, 1999 exclude:
- the $15 million after-tax effect of the non-recurring gain from
the divestiture of the Company's calcium carbide and carbon products
operations, of which $922 thousand represented a fourth quarter gain
as described in footnote(c).
- the $1.8 million after-tax non-recurring gain from insurance proceeds
recognized by an equity affiliate.
- the $570 thousand after-tax non-recurring gain resulting from the
first quarter divestiture of two non-core businesses.
The results for the year ended March 31, 1998 exclude:
- the fourth quarter $14.3 million after-tax effect of special charges
noted in footnote(b).
- the $11.3 million after-tax effect of the non-recurring gains from a
partial recovery of refrigerant losses and an acquisition break-up
fee noted in footnote(b).
- the $980 after-tax gain related to the divestiture of a non-core
business.
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<TABLE>
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
<CAPTION>
March 31, March 31,
1999 1998
<S> <C> <C>
ASSETS
Trade receivables, net $ 195,708 $ 186,342
Inventories 154,424 154,937
Prepaid expenses and other current assets 28,710 25,555
TOTAL CURRENT ASSETS 378,842 366,834
Property and equipment, net 717,859 687,304
Goodwill, net 428,349 410,753
Other non-current assets 173,422 176,583
TOTAL ASSETS $1,698,472 $1,641,474
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 14,997 $ 12,150
Accounts payable, trade 85,486 84,602
Accrued expenses and other current liabilities 108,295 128,806
TOTAL CURRENT LIABILITIES 208,778 225,558
Long-term debt 852,489 830,845
Deferred income taxes 142,675 121,356
Other non-current liabilities 23,585 36,842
Stockholders' equity 470,945 426,873
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,698,472 $1,641,474
</TABLE>
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