Exhibit 99
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Investor Contact: Media Contact:
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Chris Close (610) 902-6257 James Ely (610) 902-6010
chris.close@airgas.com jim.ely@airgas.com
AIRGAS REPORTS FISCAL THIRD QUARTER RESULTS
RADNOR, Pennsylvania, January 25, 2001 - Airgas, Inc. (NYSE -
ARG) today reported results for the quarter and nine-month periods
ended December 31, 2000. Net earnings for the quarter were $0.10 per
diluted share compared to $0.15 per diluted share in the prior year,
which excluded certain gains and charges. After-tax cash flow (net
earnings, excluding certain gains and charges, plus depreciation,
amortization and deferred income taxes) was $0.48 per diluted share
versus $0.50 per diluted share last year.
Lower earnings were driven by a significant slowdown in December
sales, partially as a result of severe weather. The Company continues
to be affected by higher expenses associated with distribution, wages
and insurance. In addition, the dramatic increase in energy prices
impacted the business.
Fiscal third quarter sales increased 7% to $395 million, from
$369 million last year. Total same-store sales increased by 2.5%
compared to the same quarter a year ago. Same-store sales in the
Distribution segment were up 2.3%, reflecting increases of 4% for
gases and rent and 1% for hardgoods. Same-store sales for the Gas
Operations segment were 4.6% higher.
"While earnings this quarter were disappointing, we were
encouraged that the overall sales momentum was positive despite the
weak December," stated Peter McCausland, chairman and chief
executive officer. "The sales drop-off appears to have been an
aberration as daily sales in January have improved steadily. We
believe that sales growth will be supported by our aggressive
pricing actions and continued success in national accounts.
However, we recognize the possibility of a further slowing in the
industrial economy and we are developing a cost reduction plan that
could be implemented in the fourth quarter if necessary. We are
committed to taking the required actions in the short-term to
improve profitability while still executing our long-term strategy."
For the nine-month period, sales increased to $1.2 billion from
$1.1 billion last year. Net earnings were $0.40 per diluted share
compared to $0.44 per diluted share in the prior year period, which
excludes certain gains and charges. After-tax cash flow per diluted
share increased to $1.56 from $1.53 in the prior year period.
Capital expenditures for the quarter and year-to-date periods
were flat compared with prior periods at $17 million and $48 million,
respectively.
The Company will conduct an earnings teleconference on Friday,
January 26, 2001 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, January 26, 2001.
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: sales trends; the possibility of
further slowing in the industrial economy; the ability to develop and
implement a cost reduction plan; lower costs and improved
profitability; the ability to successfully execute the company's long-
term strategy; the success of national accounts in fueling sales
growth; the impact of aggressive price actions on positive sales
growth; the Company's expectations regarding continued positive sales
momentum. 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 and national accounts in
fueling sales growth; the market acceptance of the Company's price
increases; increased cost pressures; the success of the cost reduction
effort; 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; reduced product supply and demand due to the
California power crisis; 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 Forms 10-Q dated
June 30, 2000 and September 30, 2000 filed by the Company with the
Securities and Exchange Commission.
Consolidated statements of earnings and consolidated condensed
balance sheets follow.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2000 1999 2000 1999
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Net sales:
Distribution $359,721 $339,761 $1,105,519 $1,032,701
Gas Operations 35,249 29,673 108,546 103,515
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Total net sales 394,970 369,434 1,214,065 1,136,216
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 190,319 180,126 591,718 555,205
Gas Operations (a) 12,458 15,471 39,342 44,506
Selling, distribution and
administrative expenses 145,112 125,676 426,780 381,822
Depreciation 15,686 15,492 48,000 47,797
Amortization 5,153 6,494 17,894 19,308
Special charges (recoveries) (b) - (2,829) - (2,829)
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Total costs and expenses 368,728 340,430 1,123,734 1,045,809
Operating income:
Distribution 22,038 26,622 74,761 79,290
Gas Operations 4,204 (447) 15,570 8,288
Special (charges) recoveries (b) - 2,829 - 2,829
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Total operating income 26,242 29,004 90,331 90,407
Interest expense, net (15,597) (13,949) (47,668) (42,167)
Discount on sale of trade receivables (c) (137) - (137) -
Other income, net (d) 352 1,234 809 16,639
Equity in earnings of unconsolidated
affiliates 455 663 2,306 2,388
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Earnings before income taxes and the
cumulative effect of an accounting
change 11,315 16,952 45,641 67,267
Income tax expense 4,639 7,192 18,746 28,920
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Earnings before the cumulative effect
of an accounting change 6,676 9,760 26,895 38,347
Cumulative effect of an accounting
change, net of taxes (e) - - - (590)
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Net earnings $ 6,676 $ 9,760 $ 26,895 $ 37,757
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Net earnings (excluding special items)(f) $ 6,676 $ 10,291 $ 26,895 $ 31,319
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Per share data:
Basic earnings per share $ .10 $ .14 $ .41 $ .54
Diluted earnings per share $ .10 $ .14 $ .40 $ .53
Per share data
(excluding special items)(f):
Basic earnings per share $ .10 $ .15 $ .41 $ .45
Diluted earnings per share $ .10 $ .15 $ .40 $ .44
Weighted average shares outstanding:
Basic 66,500 69,200 65,700 69,600
Diluted 67,200 70,800 67,000 71,000
See notes to consolidated financial statements.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, March 31,
2000 2000
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ASSETS
Trade accounts receivable, net (c) $ 138,933 $ 211,989
Inventories, net 163,021 159,438
Deferred income tax asset, net 12,378 13,752
Prepaids and other current assets 21,142 23,611
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TOTAL CURRENT ASSETS 335,474 408,790
Property, plant and equipment, net 747,098 753,768
Goodwill, net 437,850 445,498
Other non-current assets, net 115,656 131,275
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TOTAL ASSETS $1,636,078 $1,739,331
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 58,506 $ 78,276
Accrued expenses and
other current liabilities 117,234 121,249
Current portion of long-term debt 75,039 20,071
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TOTAL CURRENT LIABILITIES 250,779 219,596
Long-term debt (c) 694,247 857,422
Deferred income taxes 172,420 160,808
Other non-current liabilities 24,798 28,998
Stockholders' equity 493,834 472,507
TOTAL LIABILITIES AND ---------- ----------
STOCKHOLDERS' EQUITY $1,636,078 $1,739,331
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See notes to consolidated financial statements.
Notes to consolidated financial statements:
(a) Gas Operations' cost of products sold for the three and nine months
ended December 31, 1999 includes an inventory write-down of $3.8 million
($2.2 million after-tax) related to certain specialty gas inventories.
(b) Special charge recoveries of $2.8 million ($1.7 million after-tax) for
the three and nine months ended December 31, 1999 primarily include an
insurance settlement related to a fiscal 1997 loss.
(c) Discount on sale of trade receivables relates to the previously
announced trade receivables securitization program entered into during the
quarter ended December 31, 2000. Cash proceeds of approximately $72 million
from the securitization program were used to pay down debt under the
Company's revolving credit agreement.
(d) Other income, net, for the nine months ended December 31, 1999 includes
a $14.9 million ($7.8 million after-tax) non-recurring gain resulting from
the divestiture of the Company's operations in Poland and Thailand.
(e) Effective April 1, 1999, the Company adopted Statement of Position 98-5,
"Reporting on the Costs of Start-up Activities." The nine months ended
December 31, 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.
(f) Net earnings and per share amounts, adjusted to exclude the items
described in notes (a), (b), (d) and (e).