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Airgas Reports Record Second Quarter EPS of $0.86 |
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Airgas Reports Record Second Quarter EPS of $0.86
RADNOR, PA – October 23, 2008 -- Airgas, Inc. (NYSE: ARG), the largest U.S. distributor of industrial, medical and specialty gases, and welding, safety and related products, today reported record earnings and strong growth in sales and operating income for its second quarter ended September 30, 2008.
Quarterly net earnings grew 44% to $72.8 million, or $0.86 per diluted share, compared to $50.6 million, or $0.60 per diluted share, in the prior year. The prior year quarter included $0.04 per diluted share of integration expense primarily associated with the June 30, 2007 acquisition of Linde’s U.S. packaged gas business, and a one-time non-cash charge of $0.03 per diluted share related to the conversion of National Welders Supply Company from a joint venture to a wholly owned subsidiary.
Second quarter sales increased 15% from the prior year to $1.2 billion. Acquisitions contributed 7% to the increase, and total same-store sales grew 8% in the quarter, with gas and rent up 12% and hardgoods up 4%.
“We are performing very well in a moderating economic environment,” said Airgas Chairman and Chief Executive Officer Peter McCausland. “Our expanded offering that targets infrastructure construction has been successful in gaining new business, particularly in the energy and power segments. About 40% of our sales come from our strategic products, which posted 11% organic growth in the quarter and are focused on the medical, life sciences, research, environmental, and food and beverage markets.
“Acquisition activity has been strong in the first half of our fiscal year, with a total of six acquisitions and $142 million of acquired annual revenue to date,” added McCausland. “We are expanding returns by effectively integrating acquisitions and leveraging our distribution infrastructure.” Return on capital* increased 40 basis points over the prior year to 13.6%.
Year-to-date free cash flow* was $112 million, compared to $92 million in the prior year. “We continue to generate strong free cash flow, even while funding significant plant projects that will be operational in the coming quarters,” McCausland said. “We were pleased to announce today that we increased our quarterly dividend 33% to $0.16 per share because of the confidence we have in our growth outlook and cash flow.”
The Company expects earnings per diluted share of $0.82 to $0.84 in the third quarter and reiterated its full-year expectations of $3.30 to $3.40 per diluted share in fiscal 2009.
The Company will conduct an earnings teleconference at 11:00 a.m. Eastern Time on Friday, October 24. The teleconference will be available by calling (888) 819-8045. 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 October 31. To listen, call (888) 203-1112 and enter passcode 4467282.
* See attached reconciliations and calculations of the non-GAAP return on capital and free cash flow 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, statements regarding: Our expectation of significant plant projects being operational in the coming quarters; confidence in our growth outlook and cash flow; and expectations for fiscal 2009 earnings per diluted share of $3.30 to $3.40 and third quarter earnings per diluted share of $0.82 to $0.84. 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. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement include: customer acceptance of price increases; supply cost pressures; increased industry competition; our ability to successfully identify, consummate and integrate acquisitions; adverse changes in customer buying patterns; our continued ability to access credit markets on satisfactory terms; significant fluctuations in interest rates; increases in energy costs and other operating expenses; the impact of tightened credit markets on our customers; the impact of changes in tax and fiscal policies and laws; 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, 2008 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 return on capital and free cash flow financial measures follow.
Please click here for the complete release including financials.
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