RADNOR, Pennsylvania, May 14, 1998 -- Airgas, Inc. (NYSE-ARG) today reported record sales of $388 million for the quarter ended March 31, 1998, an increase of 26% from $309 million in the fourth quarter last year. After-tax cash flow (net earnings plus depreciation, amortization and deferred income taxes and before certain previously announced fourth quarter special charges and additional direct repositioning costs related to the "Repositioning Airgas for Growth" initiative) was helped by tax planning and increased 19% to a record $37 million, or $.52 per share, compared to $31 million, or $.44 per share for the same quarter last year. Net earnings for the fourth quarter of fiscal l998, before the special charges and direct repositioning costs, were $10.7 million, or $.15 per share, compared to $10.9 million, or $.16 per share, a year ago. The prior year results exclude special charges and a loss related to the divestiture of a non-core business.
The previously announced special charges recorded in the fourth quarter ended March 31, 1998, totaled $19.5 million ($12.4 million after-tax) and consist of severance and exit costs for the closure of duplicate facilities, a non-cash charge for the write-down of property, plant and equipment and goodwill impaired as a result of the restructuring, and the divestiture of several non-core businesses, offset by a one-time net gain related to an acquisition break-up fee.
Repositioning costs of $5.7 million ($3.4 million after-tax), for relocating employees and other personnel expenses, exiting certain product lines, and computer conversions have also been incurred in the quarter and were charged against earnings. In conformance with generally accepted accounting principles, these costs and expenses were not included in the special charge.
The fourth quarter special charges and the additional direct repositioning costs resulted in a reported net loss in the fourth quarter of $5.2 million, or $.07 per share and after-tax cash flow of $37.3 million, or $.52 per share.
For the year ended March 31, 1998, sales increased 25% to $1.45 billion from $1.16 billion in fiscal l997. After-tax cash flow for the year (before special charges, additional direct repositioning costs, and non-recurring gains), rose by 16% to a record $136.3 million, or $1.92 per share, compared to $117.3 million, or $1.71 per share, a year earlier. Net earnings for the year, before special charges, direct repositioning costs, and non-recurring gains were $46.0 million, or $.65 per share, compared to $44.3 million, or $.65 per share, in fiscal l997. The prior year results exclude special charges and a loss related to the divestiture of a non-core business.
Included in Airgas' results for the year ended March 31, 1998 were non-recurring gains of $1.5 million ($980 thousand after-tax) from the sale of a non-core business, and $14.5 million ($9.4 million after-tax) from the partial recovery of refrigerant losses.
The special charges and direct repositioning costs, combined with non-recurring gains, resulted in reported net earnings for the year of $40.5 million, or $.57 per share.
Peter McCausland, Airgas' Chairman and Chief Executive Officer, said "We made significant progress in fiscal 1998 toward our goal of becoming a multi-billion dollar, world-class distribution company, supplying packaged gases and related products and services nationally. This was another year of growth by acquisition, with 28 transactions adding combined annual sales of $265 million."
"We also launched the Repositioning Airgas for Growth initiative which will provide the foundation for a new growth period including higher internal growth plus continuing acquisitions. Our repositioning is expensive, but necessary. It is progressing rapidly."
"We are pleased with the growth in sales and gross profits in the fourth quarter. Same-store sales grew 12% in ADI and 4.5% in our Distribution Group. As we build the necessary infrastructure, that growth should add to the bottom line and shareholder value," McCausland said.
Airgas, Inc. is the largest distributor of industrial, medical and specialty gases and related equipment in North America. Airgas can be visited on the Internet at http://www.airgas.com.
Forward-Looking Statements Warning
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 Airgas 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 underlying market conditions, continued growth in same-store sales, costs and potential disruptive effects of the repositioning, implementation of information technology projects, the success and timing of intended divestitures, and factors described in the Company's reports, including Form 10-Q, dated December 31, 1997, filed by the Company with the Securities and Exchange Commission.