<PAGE>
For More Information:
Chris Close (610) 902-6257
[email protected]
AIRGAS REPORTS CONTINUED SALES MOMENTUM
IN FISCAL SECOND QUARTER
RADNOR, Pennsylvania, October 26, 2000 - Airgas, Inc. (NYSE - ARG)
today reported results for the quarter and six-month period ended
September 30, 2000. Fiscal second quarter sales increased 6% to $410
million from $387 million last year driven by continued acceleration in
same-store sales growth. Total same-store sales increased by 4.4% in the
fiscal second quarter versus the same period a year ago. Same-store
sales in the Distribution segment were up 4.0%, reflecting increases of
5.5% for gases and rent and 2.8% for hardgoods. Same-store sales for the
Gas Operations segment were 8.7% higher.
Comparing the quarter ended September 30, 2000 to the same period
last year, after-tax cash flow (net earnings, plus depreciation,
amortization and deferred income taxes) per diluted share increased 2% to
$0.54 from $0.53 last year. Net earnings were flat at $0.16 per diluted
share, which excludes a divestiture gain of $0.11 per share in the prior
year.
"We are pleased that the positive same-store sales growth trend
continued to accelerate for a third consecutive quarter," stated Peter
McCausland, chairman and chief executive officer. "Strategic sales
initiatives continue to fuel growth and we are seeing positive trends
in several other segments of our business. Additionally, higher gross
profits somewhat tempered the cost pressures we have experienced the
last few quarters and contributed to the modest growth in after-tax
cash flow per share despite one less billing day this quarter.
"Looking ahead, we expect a positive impact on operating margins
from recent price increases," added Mr. McCausland. "The combination
of improved operating margins and continued sales momentum should
drive earnings and cash flow growth and improve return on capital in
the future. We paid down $22 million of our debt this quarter and we
will continue to focus our free cash flow on debt reduction."
For the six-month period, sales increased 7% to $819 million from
$767 million last year. After-tax cash flow per diluted share increased
6% to $1.08 from $1.02 in the prior year period. Net earnings were flat
at $0.30 per diluted share compared to the prior year period, which
excludes a net benefit primarily consisting of a divestiture gain in the
prior period.
Capital expenditures for the quarter and year-to-date period were
flat with the prior periods at $16 million and $31 million, respectively.
The Company will conduct an earnings teleconference on Friday,
October 27, 2000 beginning at 8:30 a.m. Eastern Time. Slides to be
presented during the Company's teleconference, information about how to
access a live webcast of the teleconference, and replay instructions are
available in the `Investor Info' section on the Company's Internet site
www.airgas.com. The replay will be accessible for one week starting at
approximately 11:00 a.m. Eastern Time on Friday, October 27, 2000.
<PAGE>
Airgas, Inc. is the largest distributor of industrial, medical and
specialty gases and welding equipment and one of the largest distributors
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. These statements include, but are not limited
to, statements regarding: the success of strategic sales initiatives in
fueling sales growth; the positive impact of recent price increases on
operating margins; the Company's expectations regarding the impact of
improved operating margins and continued sales momentum on earnings, cash
flow growth, and return on capital in the future; the reduction of
indebtedness in the future. 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
the success of marketing initiatives on strategic product sales; the
market acceptance of the Company's price increases; increased cost
pressures; an economic downturn (including adverse changes in the
specific markets for our products); increased competition; customer
acceptance of the Company's products; adverse changes in customer buying
patterns; the inability of the Company to grow sales, earnings and cash
flow; and other factors described in the Company's reports, including
Form 10-K dated March 31, 2000 and Form 10-Q dated June 30, 2000, filed
by the Company with the Securities and Exchange Commission.
Consolidated statements of earnings and consolidated condensed
balance sheets follow.
<PAGE>
<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,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales:
Distribution $371,059 $346,973 $745,798 $692,940
Gas Operations 39,038 40,316 73,297 73,842
------- ------- ------- -------
Total net sales 410,097 387,289 819,095 766,782
------- ------- ------- -------
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 198,650 186,647 401,399 375,079
Gas Operations 14,437 16,200 26,884 29,035
Selling, distribution and
administrative expenses 141,653 129,185 281,668 256,146
Depreciation 15,990 16,525 32,314 32,304
Amortization 6,321 6,428 12,741 12,815
------- ------- ------- -------
Total costs and expenses 377,051 354,985 755,006 705,379
------- ------- ------- -------
Operating income:
Distribution 26,598 26,408 52,723 52,668
Gas Operations 6,448 5,896 11,366 8,735
------ ------ ------ ------
Total operating income 33,046 32,304 64,089 61,403
Interest expense, net (16,306) (14,435) (32,071) (28,218)
Other income, net (a) 405 15,183 457 15,405
Equity in earnings of unconsolidated
affiliates 487 725 1,851 1,725
------ ------ ------ ------
Earnings before income taxes and the
cumulative effect of an accounting
change 17,632 33,777 34,326 50,315
Income tax expense 7,229 14,865 14,107 21,728
------ ------ ------ ------
Earnings before the cumulative effect
of an accounting change 10,403 18,912 20,219 28,587
Cumulative effect of an accounting
change, net of taxes (b) - - - (590)
------- ------- ------- -------
Net earnings $ 10,403 $ 18,912 $ 20,219 $ 27,997
------- ------- ------- -------
Net earnings (excluding special items)(c) $ 10,403 $ 11,353 $ 20,219 $ 21,028
------- ------- ------- -------
Per share data:
Basic earnings per share $ .16 $ .27 $ .31 $ .40
Diluted earnings per share $ .16 $ .27 $ .30 $ .39
Per share data (excluding special items)(c):
Basic earnings per share $ .16 $ .16 $ .31 $ .30
Diluted earnings per share $ .16 $ .16 $ .30 $ .30
Weighted average shares outstanding:
Basic 65,400 69,700 65,200 69,800
Diluted 66,600 71,200 66,900 71,200
See notes to consolidated statements of earnings.
</TABLE>
<PAGE>
Notes to consolidated statements of earnings:
(a) 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.
(b) 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 an after-tax charge of $590 thousand for the
cumulative effect of an accounting change related to previously
capitalized costs from start-up activities.
(c) Net earnings and per share amounts, adjusted to exclude the non-recurring
divestiture gain and the cumulative effect of an accounting change
described in notes (a) and (b), respectively.
<PAGE>
<TABLE>
<CAPTION>
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
September 30, March 31,
2000 2000
---- ----
<S> <C> <C>
ASSETS
Trade accounts receivable, net $ 220,603 $ 211,989
Inventories, net 161,507 159,438
Deferred income tax asset, net 13,463 13,752
Prepaids and other current assets 22,622 23,611
------- -------
TOTAL CURRENT ASSETS 418,195 408,790
Property, plant and equipment, net 748,384 753,768
Goodwill, net 439,025 445,498
Other non-current assets, net 118,783 131,275
--------- ---------
TOTAL ASSETS $1,724,387 $1,739,331
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 67,691 $ 78,276
Accrued expenses and
other current liabilities 113,504 121,249
Current portion of long-term debt 18,662 20,071
------- -------
TOTAL CURRENT LIABILITIES 199,857 219,596
Long-term debt 845,599 857,422
Deferred income taxes 167,494 160,808
Other non-current liabilities 26,055 28,998
Stockholders' equity 485,382 472,507
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,724,387 $1,739,331
--------- ---------
</TABLE>
