Exhibit 99:
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AIRGAS NEWS RELEASE Airgas, Inc.
259 N. Radnor-Chester Road
Suite 100
Radnor, PA 19087-5283
www.airgas.com
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Investor Contact: Media Contact:
Melissa Nigro (610) 902-6206 James Ely (610) 902-6010
melissa.nigro@airgas.com jim.ely@airgas.com
For release: Immediately
AIRGAS REPORTS FOURTH QUARTER
AND FISCAL 2001 RESULTS
RADNOR, PA, May 10, 2001 - Airgas, Inc. (NYSE - ARG) today reported
results for the fourth quarter and fiscal year ended March 31, 2001.
Net earnings for the quarter were $0.12 per diluted share compared to
$0.08 per diluted share in the same period a year ago, excluding certain
gains and charges in both periods. Including all gains and charges, net
earnings for the quarter ended March 31, 2001 were $.02 per diluted
share compared to $.01 per diluted share a year ago. Free cash flow
(defined below) for the quarter was $0.41 per diluted share versus $0.27
per diluted share last year.
Fiscal fourth quarter sales increased to $415 million, from $406 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 1.8%, reflecting increases of 7% for gases and rent and a 2%
decline in hardgoods. Same-store sales for the Gas Operations segment
increased 11.3%. Capital spending in the fourth quarter was flat at $18
million.
"We were pleased with our performance in the fourth quarter as sales
grew despite an uncertain economic environment," commented Peter
McCausland, Chairman and Chief Executive Officer. "We continue to see
signs that we are growing market share, which is no doubt a result of
our success in strategic accounts, cross-selling and strategic product
sales. Price increases are contributing to sales growth as well.
However, we continue to be affected by higher energy costs, which impact
both the cost of gases and distribution. In addition, we incurred
consulting fees related to a project focused on operational and
administrative process improvements. Looking ahead, we believe our
operating strategy will allow us to more effectively manage these cost
pressures and improve our margins. We are striving to achieve the right
balance between growth and improving returns in an effort to maximize
shareholder value."
For the year ended March 31, 2001, net earnings were $0.52 per diluted
share, even with the prior year, excluding certain gains and charges in
both years. Including the gains and charges in both years, net earnings
in fiscal 2001 were $0.42 per diluted share compared to $0.54 per
diluted share last year. Free cash flow per diluted share increased 15%
to $0.94 compared to $0.82 in the prior year. The strong cash flow
characteristics of the business facilitated debt reduction of $113
million for the year. Sales increased to $1.63 billion from $1.54
billion in the prior year. Capital spending for the year was $66
million compared to $65 million last year.
Net earnings in the current quarter include net charges totaling $10.0
million ($6.5 million after-tax) or $0.10 per diluted share. The net
charges include a provision in selling, distribution and administrative
expenses for ongoing litigation of $5.8 million. The litigation charge
represents an estimate of the overall future legal expenses associated
with the defense of a previously disclosed lawsuit filed by a
competitor, net of the reversal of liabilities previously established in
connection with the defense of class-action lawsuits related to
hazardous materials charges. The competitor's lawsuit is expected to go
to trial in fiscal 2002 and the Company is confident it will prevail.
The Company finalized matters related to the class-action lawsuits in
the most recent quarter.
The balance of the net charges were comprised of special charges of $3.6
million, net, which primarily include $8.5 million related to severance
costs resulting from a reduction in workforce, exit costs for the
closure of branch locations and losses associated with the anticipated
divestiture of several non-core businesses, partially offset by a gain
related to an insurance settlement associated with losses incurred in
connection with a fiscal 1997 special charge.
"The positive sales momentum combined with our cost reduction efforts is
indicative of our operational focus," added McCausland. "The cost
reductions were aimed at improving results at under performing operating
units as part of our drive to increase operating margins. We remain
committed to improving returns and laying the foundation for future
growth."
The Company will conduct an earnings teleconference on Friday, May 11,
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, May 11, 2001.
Free cash flow is defined as net earnings, excluding certain gains and
charges, plus depreciation, amortization and deferred income taxes,
minus capital spending, plus/minus the change in working capital,
excluding the impact of the accounts receivable securitization.
ABOUT AIRGAS, INC.
Airgas, Inc. is the largest U.S. distributor of industrial, medical and
specialty gases, welding, safety and related products. Its integrated
network of 700 locations includes branches, retail stores, gas fill
plants, specialty gas labs, production facilities and distribution
centers. Airgas also distributes its products and services through
eCommerce, catalog and telemarketing channels. Its national scale and
strong local presence offers 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, statements regarding: sales trends; the ability to successfully
execute the Company's long-term strategy; the success of sales
initiatives such as strategic accounts, cross-selling and strategic
products in growing sales and market share; the impact of price
increases on sales growth; the Company's expectations regarding
continued positive sales momentum; the success of the Company's
operating strategy in effectively managing cost pressures and improving
margins; the ability to achieve the right balance between growth and
returns to maximize shareholder value; the success of cost reduction
efforts; and the estimate of future legal expenses and the outcome of
previously disclosed lawsuits. 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, cross-selling and strategic
product sales in growing sales and market share; the market acceptance
of the Company's price increases; increased cost pressures and the
inability to control costs; the impact of consulting expenses on future
results; an economic downturn (including adverse changes in the specific
markets for our products); the inability of the Company to successfully
execute its operating strategy; increased competition; the inability of
the Company to successfully execute its operating strategy; customer
acceptance of the Company's products; adverse changes in customer buying
patterns; higher than estimated legal fees and/or an unfavorable outcome
of previously disclosed lawsuits; 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, September 30, 2000 and December 31, 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 Twelve Months Ended
March 31, March 31,
2001 2000 2001 2000
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Net sales:
Distribution $381,903 $377,248 $1,487,422 $1,409,949
Gas Operations 32,933 28,870 141,479 132,385
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Total net sales 414,836 406,118 1,628,901 1,542,334
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 205,705 204,917 797,423 760,122
Gas Operations (a) 10,435 11,969 49,777 56,475
Selling, distribution and
administrative expenses (b) 156,575 150,705 583,355 532,527
Depreciation 14,938 15,838 62,938 63,635
Amortization 5,922 6,365 23,816 25,673
Special charges (recoveries) (c) 3,643 - 3,643 (2,829)
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Total costs and expenses 397,218 389,794 1,520,952 1,435,603
Operating income:
Distribution 17,425 15,381 92,186 94,671
Gas Operations 3,836 943 19,406 9,231
Special (charges) recoveries (c) (3,643) - (3,643) 2,829
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Total operating income 17,618 16,324 107,949 106,731
Interest expense, net (12,539) (15,393) (60,207) (57,560)
Discount on securitization of
trade receivables (d) (1,166) - (1,303) -
Other income (expense), net (e) (567) 1,223 242 17,862
Equity in earnings (losses) of
unconsolidated affiliates (f) (46) 1,003 2,260 3,391
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Earnings before income taxes and
the cumulative effect of an
accounting change 3,300 3,157 48,941 70,424
Income tax expense 1,972 2,631 20,718 31,551
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Earnings before the cumulative
effect of an accounting change 1,328 526 28,223 38,873
Cumulative effect of an accounting
change, net of taxes (g) - - - (590)
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Net earnings $ 1,328 $ 526 $ 28,223 $ 38,283
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Net earnings (excl. certain gains &
charges)(h) $ 7,844 $ 5,578 $ 34,739 $ 36,897
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Per share data:
Basic earnings per share $ .02 $ .01 $ .43 $ .55
Diluted earnings per share $ .02 $ .01 $ .42 $ .54
Per share data (excl. certain gains &
charges)(h):
Basic earnings per share $ .12 $ .08 $ .53 $ .53
Diluted earnings per share $ .12 $ .08 $ .52 $ .52
Weighted average shares outstanding:
Basic 66,900 68,000 66,000 69,200
Diluted 67,700 69,500 67,200 70,600
See notes to consolidated financial statements.
AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
March 31, March 31,
2001 2000
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ASSETS
Trade accounts receivable, net (d) $ 143,129 $ 211,989
Inventories, net 155,024 159,438
Deferred income tax asset, net 10,143 13,752
Prepaids and other current assets 25,549 23,611
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TOTAL CURRENT ASSETS 333,845 408,790
Property, plant and equipment, net 704,646 753,768
Goodwill, net 432,825 445,498
Other non-current assets, net 111,409 131,275
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TOTAL ASSETS $1,582,725 $1,739,331
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 76,337 $ 78,276
Accrued expenses and
other current liabilities 132,308 121,249
Current portion of long-term debt 72,945 20,071
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TOTAL CURRENT LIABILITIES 281,590 219,596
Long-term debt (d) 620,664 857,422
Deferred income taxes 161,176 160,808
Other non-current liabilities 22,446 28,998
Stockholders' equity 496,849 472,507
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,582,725 $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 year ended March 31, 2000
includes an inventory write-down of $3.8 million ($2.2 million after-tax)
related to certain specialty gas inventories.
(b) Selling, distribution and administrative expenses for the three and twelve
months ended March 31, 2001 includes a litigation charge of $5.8 million
($3.7 million after-tax). The litigation charge includes an estimate of
overall future costs associated with the defense of a previously disclosed
lawsuit filed by a competitor, net of the reversal of liabilities
previously established in connection with the defense and settlement of
class-action lawsuits related to hazardous materials charges.
Selling, distribution and administrative expenses for the three months and
year ended March 31, 2000 includes a litigation charge of $7.5 million
($4.8 million after-tax) representing an estimate of overall costs
associated with the defense and settlement of class-action lawsuits
related to hazardous materials charges.
(c) Special charges of $3.6 million ($2.3 million after-tax) for the three
months and year ended March 31, 2001 primarily includes a charge of
$8.5 million related to severance costs resulting from a workforce
reduction of 275 employees nationwide, exit costs for the closure of
approximately 30 facilities and losses associated with the anticipated
divestiture of certain non-core businesses, partially offset by a
$4.0 million gain from an insurance settlement associated with a loss
incurred in connection with a fiscal 1997 special charge.
Special charge recoveries of $2.8 million ($1.7 million after-tax) for
the year ended March 31, 2000 primarily include an insurance settlement
related to the fiscal 1997 special charge.
(d) Discount on securitization of trade receivables relates to a receivables
securitization program entered into during fiscal 2001. Cash proceeds of
approximately $73 million from the securitization program were used to
reduce borrowings under the Company's revolving credit agreement.
(e) Other income, net, for the three months and year ended March 31, 2001
includes a $200 thousand after-tax gain from the divestiture of the
Company's Jackson Dome carbon dioxide business.
Other income, net, for the three months and year ended March 31, 2000
includes a net loss of $300 thousand from the disposal of certain assets,
partially offset by a gain from the divestiture of a non-core business.
For the year ended March 31, 2000, other income, net, also includes a
$14.9 million ($7.8 million after-tax) gain resulting from the divestiture
of the Company's operations in Poland and Thailand.
(f) Equity in earnings of unconsolidated affiliates for the three months and
year ended March 31, 2001 includes after-tax charges of $700 thousand
associated with losses from two equity affiliates.
(g) Effective April 1, 1999, the Company adopted Statement of Position 98-5,
"Reporting on the Costs of Start-up Activities." The year ended March 31,
2000 includes an after-tax charge of $590 thousand for the cumulative
effect of an accounting change related to previously capitalized costs
from start-up activities.
Notes to consolidated financial statements (continued):
(h) Net earnings, adjusted to exclude the items described in the above notes:
Three Months Ended Twelve Months Ended
March 31, March 31,
(Amounts in millions) 2001 2000 2001 2000
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Net earnings as reported $ 1.3 $ .5 $ 28.2 $ 38.3
Certain gains and charges (after-tax):
Inventory write-down (a) -- -- -- 2.2
Net litigation charges (b) 3.7 4.8 3.7 4.8
Special charges (c) 2.3 -- 2.3 (1.6)
Divestitures (gain) loss (e) (0.2) 0.3 (0.2) (7.4)
Equity affiliates charges (f) 0.7 -- 0.7 --
Accounting change (g) -- -- -- 0.6
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Net earnings (excluding certain
gains and charges) $ 7.8 $ 5.6 $ 34.7 $ 36.9
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