Exhibit 99.1
Airgas Reports Fiscal 2010 Second Quarter Earnings
- Adjusted diluted EPS* down 21% to $0.68, which excludes previously announced debt extinguishment and pension charges of $0.03 per diluted share; diluted EPS down 24% to $0.65
- Previously issued second quarter guidance of $0.64 to $0.69 did not include the above $0.03 charges
- Sales down 17%; same-store sales down 19%
- Effective expense reductions mitigate impact of sales decline; operating margin of 11.4%
- Issued $400 million 4.5% senior notes; retired $58 million 7.125% notes (extinguishment charge $0.02)
- Strong year-to-date free cash flow* of $223 million, up 99%
RADNOR, Pa.--(BUSINESS WIRE)--October 29, 2009--Airgas, Inc. (NYSE:ARG), the largest U.S. distributor of industrial, medical, and specialty gases, and related supplies, today reported net earnings of $54.5 million, or $0.65 per diluted share, for its second quarter ended September 30, 2009. Excluding a $0.02 per diluted share debt extinguishment charge and a $0.01 per diluted share multi-employer pension plan withdrawal charge, adjusted earnings per diluted share* were $0.68, compared to $0.86 per diluted share in the prior-year quarter. Cost reductions and operating efficiencies continued to support the Company’s operating margin, which posted only a modest decline year-over-year to 11.4% from 12.5% and improved sequentially from 11.0% in the face of a challenging sales environment.
Second quarter sales were $962 million, a decline of 17% from the prior year. Total same-store sales declined 19%, with hardgoods down 27% and gas and rent down 14%. Acquisitions contributed 2% sales growth in the quarter.
“While sales finished stronger than they started, we are still in a very challenging economy,” said Airgas Chairman and Chief Executive Officer Peter McCausland. “Difficult conditions were broad-based across our geographies and customer segments. Consistent with recent quarters, our manufacturing customers suffered the deepest declines while our medical business showed the most resilience.”
As previously announced, the Company fully implemented $45 million of annual expense reductions between December 2008 and March 2009, the benefit of which is fully reflected in first and second quarter results. An additional $12 million of annual expense reductions were completed during the second quarter and are expected to yield full run-rate benefits starting in the third quarter. These $57 million of expense reductions were in addition to $10 million of expected annual savings in fiscal 2010 from ongoing efficiency initiatives.
“We have managed our cost structure effectively during this downturn,” McCausland continued, “reducing expenses to mitigate the impact of declining sales on our earnings. Our efforts have yielded better operating margin and earnings than the declining sales might otherwise imply, and we are still in a good position to benefit when the economy starts to recover.”
Year-to-date free cash flow* through the second quarter was $223 million compared to $112 million last year, driven by adjusted cash from operations* of $349 million, up from $287 million last year, and by a 29% reduction in capital expenditures to $131 million this year. Return on capital* was 10.8% compared to 13.6% in the prior year.
“In spite of the challenging business climate, some notable highlights in the quarter included credit rating upgrades by both rating agencies, our $400 million 4.5% senior notes offering that was significantly oversubscribed and which was used to reduce revolver borrowings, and our addition to the S&P 500 index,” added McCausland. “We continue to generate strong free cash flow, which we used to reduce debt this quarter. Although we believe the worst same-store sales declines are now behind us, we remain cautious in our near-term outlook and focused on forward progress for the long run.”
The Company expects adjusted earnings per diluted share of $0.67 to $0.70 for the third quarter, which excludes the previously announced $0.05 per diluted share loss on the early extinguishment of debt related to the October redemption of its $150 million 6.25% notes. Including this charge, the Company expects earnings per diluted share of $0.62 to $0.65. For fiscal 2010, the Company expects adjusted earnings of $2.70 to $2.80 per diluted share, which excludes $0.03 per diluted share of charges in the second quarter and the $0.05 per diluted share charge in the third quarter. Including these charges, the Company expects earnings per diluted share of $2.62 to $2.72. The previously announced range of $2.65 to $2.85 per diluted share also excluded the aforementioned second and third quarter charges. The third quarter and fiscal 2010 guidance above does not incorporate the impact of future multi-employer pension plan withdrawal charges. The Company will continue its efforts to withdraw from such plans. Charges for withdrawal from plans under contracts that expire during the remainder of fiscal 2010 could be up to $0.04 per diluted share.
Prevailing economic conditions offer limited visibility into future sales and earnings, which should be taken into consideration when evaluating the Company’s guidance.
The Company will conduct an earnings teleconference today at 2:00 p.m. Eastern Time. The teleconference will be available by calling (877) 718-5092. The presentation materials (this press release, slides to be presented during the Company’s teleconference and information about how to access a live and on-demand webcast of the teleconference) are available in the “Investor Information” section on the Company’s Internet site at www.airgas.com. A webcast of the teleconference will be available live and on-demand through November 25 at http://investor.shareholder.com/arg/events.cfm. A replay of the teleconference will be available through November 6. To listen, call (888) 203-1112 and enter passcode 8939514.
* See attached reconciliations and calculations of the non-GAAP adjusted earnings per diluted share and earnings guidance, adjusted cash from operations, free cash flow, and return on capital financial measures.
About Airgas, Inc.
Airgas, Inc. (NYSE:ARG), through its subsidiaries, is the largest U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. Airgas is also one of the largest U.S. distributors of safety products, the largest U.S. producer of nitrous oxide and dry ice, the largest liquid carbon dioxide producer in the Southeast, and a leading distributor of process chemicals, refrigerants, and ammonia products. More than 14,000 employees work in over 1,100 locations, including branches, retail stores, gas fill plants, specialty gas labs, production facilities, and distribution centers. Airgas also distributes its products and services through eBusiness, catalog, and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base. For more information, please visit 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. These statements include, but are not limited to: expectations for third quarter diluted earnings per share to be in the range of $0.62 to $0.65, which includes the previously announced $0.05 per diluted share loss on the early extinguishment of its 6.25% notes; expectations for full year diluted earnings per share for fiscal 2010 to be in the range of $2.62 to $2.72, which includes $0.03 per diluted share of charges in the second quarter and the $0.05 per diluted share charge in the third quarter; our expectations to yield full run-rate benefits from announced expense reductions and efficiency initiatives; our expectation regarding our ability to benefit when the economy starts to recover; our continuing efforts to withdraw from multi-employer pension plans, and our expectation that withdrawal from plans under contracts that expire during the remainder of fiscal 2010 could be up to $0.04 per diluted share; our belief that our worst same-store sales declines are now behind us; and our cautious outlook for the near-term. We intend 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 us or any other person that the results expressed therein will be achieved. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement include: adverse changes in customer buying patterns resulting from further deterioration in current economic conditions; continued weakening operating and financial performance of our customers, which can negatively impact our sales and our ability to collect our accounts receivable; postponement of projects due to the recession; customer acceptance of price increases; the success of implementing and continuing our cost reduction programs; our ability to achieve anticipated acquisition synergies; supply cost pressures; increased industry competition; our ability to successfully identify, consummate, and integrate acquisitions; our continued ability to access credit markets on satisfactory terms; significant fluctuations in interest rates; increases in energy costs and other operating expenses eroding the planned cost savings; higher than expected implementation costs of the SAP system; conversion problems related to the SAP system that disrupt the Company’s business and negatively impact customer relationships; the impact of tightened credit markets on our customers; the impact of changes in tax and fiscal policies and laws; the potential for increased expenditures relating to compliance with environmental regulatory initiatives; the impact of new environmental, healthcare, tax, accounting, and other regulation; potential liability under the Multiemployer Pension Plan Amendments Act of 1980 with respect to our participation in or withdrawal from multi-employer pension plans for our union employees; the extent and duration of current recessionary trends in the U.S. economy; the effect of catastrophic events; political and economic uncertainties associated with current world events; and other factors described in the Company’s reports, including its March 31, 2009 Form 10-K, subsequent Forms 10-Q, and other forms filed by the Company with the Securities and Exchange Commission.
Consolidated statements of earnings, condensed consolidated balance sheets, consolidated statements of cash flows, and reconciliations of non-GAAP financial measures follow.
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, | |||||||||||||||
2009 | 2008(d) | 2009 | 2008(d) | |||||||||||||
Net sales | $ | 962,266 | $ | 1,161,908 | $ | 1,941,523 | $ | 2,278,622 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of products sold (excluding depreciation) | 426,433 | 558,020 | 866,269 | 1,096,485 | ||||||||||||
Selling, distribution and administrative expenses | 367,892 | 403,890 | 743,005 | 793,783 | ||||||||||||
Depreciation | 52,647 | 48,930 | 104,230 | 97,028 | ||||||||||||
Amortization | 5,477 | 6,080 | 10,293 | 11,486 | ||||||||||||
Total costs and expenses | 852,449 | 1,016,920 | 1,723,797 | 1,998,782 | ||||||||||||
Operating income | 109,817 | 144,988 | 217,726 | 279,840 | ||||||||||||
Interest expense, net | (16,343 | ) | (22,047 | ) | (34,710 | ) | (41,127 | ) | ||||||||
Discount on securitization of trade receivables (a) | (1,485 | ) | (2,866 | ) | (3,100 | ) | (5,850 | ) | ||||||||
Loss on debt extinguishment (c) | (2,011 | ) | - | (2,011 | ) | - | ||||||||||
Other income (expense), net | (257 | ) | (185 | ) | 948 | 135 | ||||||||||
Earnings before income tax expense | 89,721 | 119,890 | 178,853 | 232,998 | ||||||||||||
Income tax expense | (35,181 | ) | (47,069 | ) | (69,497 | ) | (91,294 | ) | ||||||||
Net earnings | $ | 54,540 | $ | 72,821 | $ | 109,356 | $ | 141,704 | ||||||||
Net earnings per common share: | ||||||||||||||||
Basic earnings per share | $ | 0.67 | $ | 0.88 | $ | 1.34 | $ | 1.72 | ||||||||
Diluted earnings per share | $ | 0.65 | $ | 0.86 | $ | 1.31 | $ | 1.67 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 81,764 | 82,471 | 81,646 | 82,581 | ||||||||||||
Diluted | 83,476 | 84,706 | 83,258 | 84,848 | ||||||||||||
See attached Notes. | ||||||||||||||||
AIRGAS, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Amounts in thousands) | ||||||
(Unaudited) | ||||||
September 30, | March 31, | |||||
2009 | 2009 | |||||
ASSETS | ||||||
Cash | $ | 41,523 | $ | 47,188 | ||
Trade receivables, net (a) | 195,643 | 184,739 | ||||
Inventories, net | 347,703 | 390,445 | ||||
Deferred income tax asset, net | 37,126 | 34,760 | ||||
Prepaid expenses and other current assets | 59,168 | 60,838 | ||||
TOTAL CURRENT ASSETS | 681,163 | 717,970 | ||||
Plant and equipment, net | 2,393,701 | 2,366,526 | ||||
Goodwill | 1,072,999 | 1,063,370 | ||||
Other intangible assets, net | 201,647 | 216,070 | ||||
Other non-current assets | 36,734 | 35,601 | ||||
TOTAL ASSETS | $ | 4,386,244 | $ | 4,399,537 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Accounts payable, trade | $ | 138,236 | $ | 156,838 | ||
Accrued expenses and other current liabilities | 266,577 | 264,564 | ||||
Current portion of long-term debt | 10,821 | 11,058 | ||||
TOTAL CURRENT LIABILITIES | 415,634 | 432,460 | ||||
Long-term debt, excluding current portion (b) | 1,598,217 | 1,750,308 | ||||
Deferred income tax liability, net | 603,602 | 565,783 | ||||
Other non-current liabilities | 75,279 | 79,231 | ||||
Stockholders’ equity | 1,693,512 | 1,571,755 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 4,386,244 | $ | 4,399,537 | ||
See attached Notes. | ||||||
AIRGAS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Amounts in thousands) | ||||||||
(Unaudited) | ||||||||
Six Months Ended | ||||||||
September 30, | ||||||||
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net earnings | $ | 109,356 | $ | 141,704 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation | 104,230 | 97,028 | ||||||
Amortization | 10,293 | 11,486 | ||||||
Deferred income taxes | 30,641 | 45,304 | ||||||
(Gain) loss on sales of plant and equipment | 1,890 | (86 | ) | |||||
Stock-based compensation expense | 14,819 | 12,751 | ||||||
Loss on debt extinguishment (c) | 2,011 | - | ||||||
Changes in assets and liabilities, excluding effects of business acquisitions: | ||||||||
Securitization of trade receivables (a) | (38,700 | ) | - | |||||
Trade receivables, net | 27,618 | (24,625 | ) | |||||
Inventories, net | 42,830 | (17,677 | ) | |||||
Prepaid expenses and other current assets | 1,767 | (4,286 | ) | |||||
Accounts payable, trade | (16,120 | ) | 7,924 | |||||
Accrued expenses and other current liabilities | 9,753 | (1,618 | ) | |||||
Other non-current assets | 1,536 | 639 | ||||||
Other non-current liabilities | (2,154 | ) | 1,698 | |||||
Net cash provided by operating activities | 299,770 | 270,242 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures | (131,365 | ) | (185,199 | ) | ||||
Proceeds from sales of plant and equipment | 5,695 | 4,812 | ||||||
Business acquisitions and holdback settlements | (3,993 | ) | (194,704 | ) | ||||
Other, net | (2,307 | ) | (1,212 | ) | ||||
Net cash used in investing activities | (131,970 | ) | (376,303 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from borrowings | 613,003 | 1,010,741 | ||||||
Repayment of debt | (765,688 | ) | (800,830 | ) | ||||
Financing costs | (2,588 | ) | (5,746 | ) | ||||
Premium paid on call of senior subordinated notes (c) | (1,284 | ) | - | |||||
Purchase of treasury stock | - | (95,549 | ) | |||||
Proceeds from the exercise of stock options | 4,698 | 11,619 | ||||||
Stock issued for the employee stock purchase plan | 7,759 | 8,102 | ||||||
Tax benefit realized from the exercise of stock options | 2,721 | 8,454 | ||||||
Dividends paid to stockholders | (29,440 | ) | (19,766 | ) | ||||
Change in cash overdraft and other | (2,646 | ) | (2,688 | ) | ||||
Net cash (used in) provided by financing activities | (173,465 | ) | 114,337 | |||||
Change in cash | $ | (5,665 | ) | $ | 8,276 | |||
Cash – Beginning of period | 47,188 | 43,048 | ||||||
Cash – End of period | $ | 41,523 | $ | 51,324 | ||||
See attached Notes. | ||||||||
Notes: | ||
(a) | The Company participates in a securitization agreement with three commercial banks to sell up to $345 million of qualified trade receivables. The amount of outstanding receivables sold under the agreement was $273 million and $311 million at September 30, 2009 and March 31, 2009, respectively. The “Discount on securitization of trade receivables” in the accompanying Consolidated Statements of Earnings represents the difference between the proceeds from the sale of trade receivables and the carrying value of those receivables. | |
(b) | The Company maintains a senior credit facility with a syndicate of lenders. Approximately $716 million was available to the Company under this facility at September 30, 2009. In October, the Company used borrowings from its senior credit facility to redeem its $150 million 6.25% notes. | |
(c) | During the fiscal second quarter, the Company repurchased $58 million of its 7.125% senior subordinated notes that are due on October 1, 2018. A loss on the extinguishment of debt of approximately $2 million ($1.3 million after tax) was recognized related to the redemption premium and the write-off of deferred financing costs associated with the issuance of the notes. | |
(d) | Certain reclassifications have been made to the prior period consolidated statements of earnings to conform to the current presentation. These reclassifications principally resulted in increasing cost of products sold (excluding depreciation) and reducing selling, distribution and administrative expenses. Additionally, some revenue was reclassified between Gas and Rent and Hardgoods. These reclassifications were the result of conforming the accounting policies of National Welders to the Company’s accounting policies and were not material. Consolidated net sales and net earnings for the prior period were not impacted by the reclassifications. | |
(e) | During the fourth quarter of fiscal 2009, the Company changed the operating practices and organization of its air separation production facilities and national specialty gas labs. The new operating practices and organization reflect the evolution of these businesses and their role to support the regional distribution companies. The regional distribution companies market to and manage the end customer relationships, coordinating and cross-selling the Company’s multiple product and service offerings in a closely coordinated and integrated manner. As a result of these changes, these businesses are now reflected in the Distribution business segment. Also as a result of an organizational realignment, Airgas National Welders is now part of the Distribution business segment. Segment information from fiscal 2009 has been restated to reflect these changes. Business segment information for the Company’s Distribution and All Other Operations business segments is shown below: | |
(Unaudited) | (Unaudited) | |||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||
September 30, 2009 | September 30, 2008 | |||||||||||||||||||||||||
(In thousands) | Distribution | All | Elim. | Total | Distribution | All | Elim. | Total | ||||||||||||||||||
Gas and rent | $ | 522,033 | $ | 110,134 | $ | (6,771 | ) | $ | 625,396 | $ | 579,751 | $ | 132,765 | $ | (8,164 | ) | $ | 704,352 | ||||||||
Hardgoods | 335,410 | 1,465 | (5 | ) | 336,870 | 455,437 | 2,124 | (5 | ) | 457,556 | ||||||||||||||||
Total net sales | 857,443 | 111,599 | (6,776 | ) | 962,266 | 1,035,188 | 134,889 | (8,169 | ) | 1,161,908 | ||||||||||||||||
Cost of products sold (excluding depreciation) | 376,551 | 56,658 | (6,776 | ) | 426,433 | 488,361 | 77,828 | (8,169 | ) | 558,020 | ||||||||||||||||
Selling, distribution and administrative expenses | 335,235 | 32,657 | - | 367,892 | 370,180 | 33,710 | - | 403,890 | ||||||||||||||||||
Depreciation | 48,933 | 3,714 | - | 52,647 | 45,831 | 3,099 | - | 48,930 | ||||||||||||||||||
Amortization | 4,336 | 1,141 | - | 5,477 | 5,017 | 1,063 | - | 6,080 | ||||||||||||||||||
Operating income | $ | 92,388 | $ | 17,429 | $ | - | $ | 109,817 | $ | 125,799 | $ | 19,189 | $ | - | $ | 144,988 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||||||||
September 30, 2009 | September 30, 2008 | |||||||||||||||||||||||||
(In thousands) | Distribution | All | Elim. | Total | Distribution | All | Elim. | Total | ||||||||||||||||||
Gas and rent | $ | 1,053,240 | $ | 221,462 | $ | (12,391 | ) | $ | 1,262,311 | $ | 1,140,992 | $ | 234,215 | $ | (13,981 | ) | $ | 1,361,226 | ||||||||
Hardgoods | 676,060 | 3,161 | (9 | ) | 679,212 | 914,493 | 2,910 | (7 | ) | 917,396 | ||||||||||||||||
Total net sales | 1,729,300 | 224,623 | (12,400 | ) | 1,941,523 | 2,055,485 | 237,125 | (13,988 | ) | 2,278,622 | ||||||||||||||||
Cost of products sold (excluding depreciation) | 761,738 | 116,931 | (12,400 | ) | 866,269 | 975,954 | 134,519 | (13,988 | ) | 1,096,485 | ||||||||||||||||
Selling, distribution and administrative expenses | 679,987 | 63,018 | - | 743,005 | 731,450 | 62,333 | - | 793,783 | ||||||||||||||||||
Depreciation | 96,860 | 7,370 | - | 104,230 | 90,748 | 6,280 | - | 97,028 | ||||||||||||||||||
Amortization | 8,579 | 1,714 | - | 10,293 | 9,735 | 1,751 | - | 11,486 | ||||||||||||||||||
Operating income | $ | 182,136 | $ | 35,590 | $ | - | $ | 217,726 | $ | 247,598 | $ | 32,242 | $ | - | $ | 279,840 | ||||||||||
Reconciliations of Non-GAAP Financial Measures (Unaudited)
Adjusted Earnings Per Diluted Share and Earnings Guidance | ||||||||||||||||||||||||||||||||||
Reconciliations and computations of adjusted earnings per diluted share and earnings guidance: | ||||||||||||||||||||||||||||||||||
(Guidance Range) | (Guidance Range) | |||||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ending | Year Ending | ||||||||||||||||||||||||||||||||
September 30, | December 31, 2009 | March 31, 2010 | ||||||||||||||||||||||||||||||||
2009 | 2008 | YoY | Low | YoY | High | YoY | Low | YoY | High | YoY | ||||||||||||||||||||||||
Earnings per diluted share | $ | 0.65 | $ | 0.86 | (24 | %) | $ | 0.62 | (18 | %) | $ | 0.65 | (14 | %) | $ | 2.62 | (16 | %) | $ | 2.72 | (13 | %) | ||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||
Debt extinguishment charge | 0.02 | - | 0.05 | 0.05 | 0.07 | 0.07 | ||||||||||||||||||||||||||||
Multi-employer pension plan withdrawal charge | 0.01 | - | - | - | 0.01 | 0.01 | ||||||||||||||||||||||||||||
Adjusted earnings per diluted share | $ | 0.68 | $ | 0.86 | (21 | %) | $ | 0.67 | (12 | %) | $ | 0.70 | (8 | %) | $ | 2.70 | (13 | %) | $ | 2.80 | (10 | %) | ||||||||||||
The third quarter and fiscal 2010 guidance above does not incorporate the impact of future multi-employer pension plan withdrawal charges.
The Company believes that adjusted earnings per diluted share provides investors meaningful insight into the Company's earnings performance without the impact of special charges. Non-GAAP numbers should be read in conjunction with GAAP financial measures, as non-GAAP metrics are merely a supplement to, and not a replacement for, GAAP financial measures. It should be noted as well that our adjusted earnings per diluted share metric may be different from adjusted earnings per diluted share metrics provided by other companies.
Return on Capital
Reconciliations and computations of return on capital:
September 30, | ||||||||
(In thousands) | 2009 | 2008 | ||||||
Operating Income - Trailing Four Quarters | $ | 462,756 | $ | 529,385 | ||||
Five Quarter Average of Total Assets | $ | 4,379,965 | $ | 4,007,369 | ||||
Five Quarter Average of Securitized Trade Receivables | 319,920 | 345,000 | ||||||
Five Quarter Average of Current Liabilities (exclusive of debt) | (433,785 | ) | (459,450 | ) | ||||
Five Quarter Average Capital Employed | $ | 4,266,100 | $ | 3,892,919 | ||||
Return on Capital | 10.8 | % | 13.6 | % | ||||
The Company believes this return on capital computation helps investors assess how effectively the Company uses the capital invested in its operations. Our management uses return on capital as one of the metrics for determining employee compensation. Non-GAAP numbers should be read in conjunction with GAAP financial measures, as non-GAAP metrics are merely a supplement to, and not a replacement for, GAAP financial measures. It should be noted as well that our return on capital computation information may be different from the return on capital computations provided by other companies.
Free Cash Flow and Adjusted Cash from Operations
Reconciliations and computations of free cash flow and adjusted cash from operations:
Six Months Ended | ||||||||
September 30, | ||||||||
(Amounts in thousands) | 2009 | 2008 | ||||||
Net cash provided by operating activities | $ | 299,770 | $ | 270,242 | ||||
Adjustments to cash provided by operating activities: | ||||||||
Cash used by the securitization of trade receivables | 38,700 | - | ||||||
Stock issued for the employee stock purchase plan | 7,759 | 8,102 | ||||||
Tax benefit realized from the exercise of stock options | 2,721 | 8,454 | ||||||
Adjusted cash from operations | $ | 348,950 | $ | 286,798 | ||||
Capital expenditures | $ | (131,365 | ) | $ | (185,199 | ) | ||
Adjustments to capital expenditures: | ||||||||
Proceeds from sales of plant and equipment | 5,695 | 4,812 | ||||||
Operating lease buyouts | - | 5,575 | ||||||
Adjusted capital expenditures | $ | (125,670 | ) | $ | (174,812 | ) | ||
Free Cash Flow | $ | 223,280 | $ | 111,986 | ||||
The Company believes that free cash flow and adjusted cash from operations provide investors meaningful insight into the Company's ability to generate cash from operations, which is available for servicing debt obligations and for the execution of its business strategy, including acquisitions, the prepayment of debt, or to support other investing and financing activities. Non-GAAP numbers should be read in conjunction with GAAP financial measures, as non-GAAP metrics are merely a supplement to, and not a replacement for, GAAP financial measures. It should be noted as well that our free cash flow and adjusted cash from operations metrics may be different from free cash flow and adjusted cash from operations metrics provided by other companies.
CONTACT:
Airgas, Inc.
Media Contact:
Jay Worley, 610-902-6206
jay.worley@airgas.com
or
Investor Contact:
Barry Strzelec, 610-902-6256
barry.strzelec@airgas.com