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For More Information:
Chris Close (610) 902-6257
[email protected]
AIRGAS PROVIDES EARNINGS UPDATE FOR FISCAL THIRD QUARTER
RADNOR, Pennsylvania, January 8, 2001 - Airgas, Inc. (NYSE - ARG)
announced that it expects to report fiscal third quarter after-tax
cash flow (net earnings, plus depreciation, amortization and deferred
taxes) in the range of $.50 to $.52 per diluted share, which is $.03
to $.05 per share below previous estimates. The Company expects to
report earnings per share in the range of $.10 to $.12, also below
previous estimates by $.03 to $.05 per share.
The Company reported that same-store sales were strong in October
and November, which combined were up approximately 5%, whereas
December same-store sales declined nearly 3%. Airgas believes that a
large portion of the sales slowdown resulted from severe weather in
December across many parts of the country. Excluding the weather
effect, sales would have been flat for the month. In addition, higher
costs continued to negatively impact results.
"I am disappointed with our results especially after the momentum
we generated in the first two quarters," commented Peter McCausland,
chairman and chief executive officer. "While we have been raising
prices, the increases obtained have not been sufficient to date to
offset rising costs, particularly those related to the unexpected
surge in energy prices. As announced in late December, we are taking
a more aggressive, disciplined stance on raising prices and we expect
the yield to improve. In addition, we are watching our daily sales
rates very closely and may announce a cost reduction plan, which could
result in a fourth-quarter charge to cover related costs.
"We remain confident in our strategy," continued Mr. McCausland.
"Several parts of our business continue to perform quite well, including
national accounts, the Gas Operations segment, and our safety and welder
rental businesses. Free cash flow is strong and we reduced debt by $24
million during the quarter. We will take the necessary actions to
restore operating margins and increase overall profitability."
Commenting on the fiscal fourth quarter, Mr. McCausland added, "We
hope to see benefits from price increase and cost reduction actions in
the fourth quarter. Assuming that sales rebound from December's low
levels, we expect to see some sequential improvement in fourth-quarter
results, excluding any charge."
The Company will officially announce third quarter results on
January 25th and hold a teleconference on January 26th.
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. Airgas can be visited on the Internet at
www.airgas.com.
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Forward-Looking Statements
This press release contains 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 Company's expectations regarding price
increases and the impact on earnings in the future; the Company's cost
reduction plan; the future performance of the national accounts, Gas
Operations, safety and welder rental businesses; the Company's reduction
of debt; improvements in fourth-quarter operating results; the
anticipated fourth quarter charge; the Company's actions to restore
operating margins and profitability; and, a sequential improvement in
fourth-quarter results. 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 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 September 30, 2000,
filed by the Company with the Securities and Exchange Commission.
