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EXHIBIT 99.1
For More Information:
Chris Close
(610) 902-6257
AIRGAS, INC. REPORTS FIRST QUARTER RESULTS
RADNOR, Pennsylvania, July 29, 1999 - Airgas Inc. (NYSE -ARG)
today reported net earnings for the quarter ended June 30, 1999 of
$9.7 million, or $.14 per diluted share, excluding a charge of
$.01 per diluted share related to a required accounting change. Net
earnings, excluding a non-recurring benefit of $.01 per diluted share,
were $10.7 million, or $.15 per diluted share, a year ago. After-tax
cash flow (net earnings, excluding special items, plus depreciation,
amortization and deferred income taxes) increased to $35.2 million,
or $.50 per diluted share, compared to $34.9 million, or $.48 per
diluted share, in the same quarter last year. Sales for the quarter
ended June 30, 1999 were $379 million compared to $401 million in the
prior year.
"I am pleased with our performance in the face of continued
weakness in many of our markets," stated Peter McCausland,
Airgas' chairman and chief executive officer. "In spite of a
decline in same-store sales in our Distribution segment, cost
improvement actions and benefits from the integrated distribution
infrastructure we are building allowed us to post an improved
operating margin on a sequential basis. With the computer
conversions essentially complete and the rollout of our integrated
distribution infrastructure well underway and on schedule, most of
the `heavy lifting' is behind us.
"We remain cautiously optimistic for the balance of the
fiscal year regarding prospects for improvement in several of the
industrial segments that Airgas serves. Nevertheless, we are
exercising heightened discipline in containment of costs and
capital expenditures. With our operating companies consolidated
and now on common computer systems, we have the ability to further
reduce our costs. Capital expenditures during the quarter were
$14 million, down substantially from $22 million a year ago. We
believe that Airgas is better positioned than ever to operate in a
challenging market environment."
Airgas, Inc. is the largest distributor of industrial,
medical and specialty gases and related equipment and the third
largest distributor 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.
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. 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 the making of such statements 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
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those contained in any forward-looking statement include
underlying market conditions, growth in same-store sales,
improvement in operating margins, the ability to grow earnings
and cash flow, the ability to manage capital spending, benefits
from and progress of the "Repositioning" initiative, the Company's
ability to reduce costs, any potential problems relating to Year
2000 matters, and other factors described in the Company's reports,
including Form 10-K dated March 31, 1999, filed by the Company with
the Securities and Exchange Commission.
Consolidated statements of earnings and consolidated condensed
balance sheets follow.
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AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
1999 1998 (a)
Net sales:
Distribution $345,967 $360,553
Gas Operations 33,526 40,220
Total net sales 379,493 400,773
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 188,432 197,351
Gas Operations 12,835 19,752
Selling, distribution and
administrative expenses 126,961 129,644
Depreciation and amortization 22,166 21,597
Special charge (b) - (1,000)
Total costs and expenses 350,394 367,344
Operating income:
Distribution 26,260 28,540
Gas Operations 2,839 3,889
Special charge (b) - 1,000
Total operating income 29,099 33,429
Interest expense, net (13,783) (14,806)
Other income, net 157 188
Equity in earnings of unconsolidated
affiliates 1,000 754
Minority interest 65 (66)
Earnings before income taxes and
the cumulative effect of an
accounting change 16,538 19,499
Income tax expense 6,863 8,224
Earnings before the cumulative
effect of an accounting change 9,675 11,275
Cumulative effect of an accounting
change, net of taxes (c) (590) -
Net earnings $ 9,085 $ 11,275
Net earnings (excluding special items)(d) $ 9,675 $ 10,705
Per share data:
Basic earnings per share $ .13 $ .16
Diluted earnings per share $ .13 $ .16
Per share data (excluding special items)(d):
Basic earnings per share $ .14 $ .15
Diluted earnings per share $ .14 $ .15
Weighted average shares outstanding:
Basic 69,800 70,300
Diluted 71,100 72,100
See notes to consolidated financial statements.
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Notes to consolidated financial statements:
(a) Certain reclassifications have been made to previously issued
financial statements to conform to the current presentation.
(b) Special charges of $1 million ($570 thousand after-tax) for the
quarter ended June 30, 1998 represent reserve adjustments related
to the divestiture of two non-core businesses.
(c) Effective April 1, 1999, the Company adopted Statement of
Position ("SOP") 98-5, "Reporting on the Costs of Start-up
Activities." In accordance with the SOP, in the quarter ended
June 30, 1999, the Company recorded an after-tax charge of $590
thousand as the cumulative effect of an accounting change related
to previously capitalized costs from start-up activities.
(d) Net earnings excluding the after-tax charge of $590 thousand
($.01 per diluted share) for the quarter ended June 30, 1999
(see note (c)), and the after-tax effect of reserve adjustments of
$570 thousand ($.01 per diluted share) for the quarter ended
June 30, 1998 (see note (b)).
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AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
June 30, March 31,
1999 1999
ASSETS
Trade accounts receivable, net $ 195,825 $ 195,708
Inventories, net 155,122 154,424
Deferred income tax asset, net 7,767 7,549
Prepaids and other current assets 19,947 21,161
TOTAL CURRENT ASSETS 378,661 378,842
Property, plant and equipment, net 716,276 717,859
Goodwill, net 423,959 428,349
Other non-current assets, net 170,130 173,422
TOTAL ASSETS $1,689,026 $1,698,472
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $ 71,909 $ 85,486
Accrued expenses and other
current liabilities 104,407 108,295
Current portion of long-term debt 20,602 19,645
TOTAL CURRENT LIABILITIES 196,918 213,426
Long-term debt 850,269 847,841
Deferred income taxes 144,571 142,675
Other non-current liabilities 21,921 23,585
Stockholders' equity 475,347 470,945
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,689,026 $1,698,472