RADNOR, PA – July 25, 2007 -- Airgas, Inc., (NYSE: ARG), the largest U.S. distributor of industrial, medical, and specialty gases, welding, safety, and related products, today reported strong growth in sales, operating income, and earnings for its first quarter ended June 30, 2007.
Quarterly net earnings increased 34% to $51.7 million, or $0.63 per diluted share, compared to $38.7 million, or $0.48 per diluted share in the prior year. The prior year quarter included a one-time $0.02 per share tax benefit. First quarter sales grew 18% over the prior year to $915 million. Acquisitions accounted for 11% of the growth, and total same-store sales increased 7% over strong growth levels in the prior year, with hardgoods up 6% and gas and rent up 8%.
"We had an outstanding quarter. We continue to see good growth in non-residential construction and energy markets, and our strategic products are also performing well," said Airgas Chairman and Chief Executive Officer Peter McCausland. "Profitability also continues to improve as operating margins in the quarter expanded to 12.2%, an improvement of 200 basis points over last year's operating margin. Return on Capital* was 13.4%, an increase of 120 basis points over the prior year."
On July 2, the Company announced that it successfully completed its acquisition of most of Linde's U.S. packaged gas business, effective June 30, 2007. The acquired business generated revenues of $346 million in 2006. The Company also announced that it had reached a definitive agreement with its National Welders joint venture partners to exchange all preferred shares of National Welders Supply Company for Airgas common stock, converting the joint venture into a wholly owned subsidiary. That exchange was completed on July 3, 2007. "We are very pleased to have completed these two important transactions, which will help us grow our earnings and cash flow in the years ahead," said McCausland.
For the second quarter, Airgas expects to earn $0.57 to $0.60 per diluted share, including an estimated $0.03 per share of integration expense from the Linde packaged gas transaction and a one-time non-cash charge of $0.03 per share related to the National Welders exchange. The Company is increasing full-year guidance to $2.49 to $2.57 per diluted share, including the $0.03 charge in the second quarter from the National Welders exchange and the operating results and integration expenses associated with the Linde packaged gas acquisition. The previously communicated range was $2.33 to $2.41 per diluted share for the full year. The new guidance is summarized in the table below:
Qtr Ending Year Ending Sep 30, 2007 Mar 31, 2008 EPS guidance $0.57 - $0.60 $2.49 - $2.57 Charge for National Welders exchange $0.03 $0.03 EPS guidance excluding National Welders charge $0.60 - $0.63 $2.52 - $2.60
The Company will conduct an earnings teleconference at 11:00 a.m. Eastern Time on Thursday, July 26. The teleconference will be available by calling (800) 665-0430. 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 under the "Company Information" heading on the Company's Internet site at www.airgas.com. A webcast of the teleconference will be available live and on demand through August 31 at http://www.shareholder.com/arg/medialist.cfm. A replay of the teleconference will be available through August 3. To listen, call (888) 203-1112 and enter passcode 4803679.
* See attached reconciliation of the Return on Capital non-GAAP financial measure.
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 13,000 employees work in over 1,000 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.
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: the Linde and National Welders transactions helping us to grow our earnings and cash flow in the years ahead; expectations for second quarter earnings per diluted share of $0.57 to $0.60, including $0.03 per share of integration expense related to the Linde packaged gas transaction and a $0.03 per share one-time non-cash charge associated with the National Welders transaction; and expectations for fiscal 2008 earnings per diluted share of $2.49 to $2.57, including the $0.03 charge in the second quarter from the National Welders exchange and the operating results and integration expenses associated with the Linde packaged gas acquisition. 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: our ability to successfully integrate the former Linde U.S. packaged gas business, including retention of both customers and employees; supply availability and cost pressures; increased industry competition; customer acceptance of price increases; our ability to successfully consummate and integrate acquisitions; a disruption to our business from integration issues associated with acquisitions; an economic downturn; adverse changes in customer buying patterns; significant fluctuations in interest rates; increases in energy costs and other operating expenses; the effect of hurricanes and other catastrophic events; political and economic uncertainties associated with current world events; and other factors described in the Company's reports, including its Form 10-K dated March 31, 2007, and other reports filed by the Company with the Securities and Exchange Commission.
Consolidated statements of earnings, condensed consolidated balance sheets, consolidated statements of cash flows, and a reconciliation of the non-GAAP financial measure follow.
Jay Worley (610) 902-6206
James Ely (610) 902-6010