UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): February 3, 2015
AIRGAS,
INC.
(Exact name of registrant as specified in its
charter)
Delaware
|
|
1-9344
|
|
56-0732648
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification No.)
|
259 North Radnor-Chester Road, Suite 100 Radnor,
PA 19087-5283
|
(Address of principal executive offices)
|
(610) 687-5253
(Registrant's telephone number, including
area code)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 3, 2015, Airgas, Inc. (the “Company”) reported its earnings
for its third quarter ended December 31, 2014, as described in the press
release attached as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a) None
(b) None
(c) None
(d) Exhibits.
99.1 - Press Release dated February 3, 2015
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated:
|
February 3, 2015
|
AIRGAS, INC.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
BY:
|
/s/ Thomas M. Smyth
|
|
|
Thomas M. Smyth
|
|
|
Vice President & Controller
|
|
|
(Principal Accounting Officer)
|
Exhibit Index
Exhibit 99.1
|
Press Release dated February 3, 2015
|
Exhibit 99.1
Airgas
Reports Fiscal 2015 Third Quarter Earnings
-
Diluted
EPS of $1.23, up 12% over prior year diluted EPS and up 4% over prior
year adjusted diluted EPS*
-
Total
sales up 7% over prior year to $1.33 billion
-
Organic
sales up 6% over prior year, with gas & rent up 5% and hardgoods up 6%
-
Updated
fiscal 2015 4Q diluted EPS guidance to $1.25 to $1.30, representing 7%
to 11% growth over prior year diluted EPS and 9% to 13% growth over
prior year adjusted diluted EPS*
RADNOR, Pa.--(BUSINESS WIRE)--February 3, 2015--Airgas, Inc. (NYSE:
ARG), one of the nation’s leading suppliers of industrial, medical, and
specialty gases, and related products, today reported earnings per
diluted share of $1.23 for its third quarter ended December 31, 2014, up
12% over prior year diluted EPS of $1.10 and up 4% over prior year
adjusted diluted EPS* of $1.18.
Third quarter sales increased 7% over the prior year to $1.33 billion.
Organic sales were up 6% over the prior year, with gas and rent up 5%
and hardgoods up 6%. Acquisitions contributed sales growth of 1% in the
quarter.
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
|
|
|
|
|
FY2015
|
|
|
FY2014
|
|
|
% Change
|
Earnings per diluted share (GAAP)
|
|
|
$
|
1.23
|
|
|
$
|
1.10
|
|
|
12
|
%
|
Loss on the extinguishment of debt
|
|
|
|
-
|
|
|
|
0.08
|
|
|
|
Adjusted earnings per diluted share (non-GAAP)
|
|
|
$
|
1.23
|
|
|
$
|
1.18
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
“Organic growth in both hardgoods and gases were in line with our
expectations, and earnings were in the middle of our guidance range,”
said Airgas President and Chief Executive Officer Michael L. Molinini.
“Although softness persists in some sectors, our welder and generator
rental business and sales to transportation equipment manufacturers
remained strong, and we saw an uptick in our downstream energy and
non-residential construction segments.”
Selling, distribution, and administrative expenses increased 5% over the
prior year, with operating costs associated with acquired businesses
representing approximately 1% of the increase. The balance of the
increase reflects normal expense inflation, as well as expenses
associated with the Company’s investments in long-term strategic growth
initiatives, including its e-Business platform and continued expansion
of its telesales business through Airgas Total Access.
Operating margin was 12.2%, down 30 basis points compared to the prior
year. Distribution segment operating margin was 12.7% for the quarter,
consistent with the prior year.
Year-to-date free cash flow* was $218 million, compared to $333 million
in the prior year, and adjusted cash from operations* was $538 million,
compared to $576 million in the prior year. The reduction in operating
cash flow reflected current year increases in working capital to support
sales growth, in addition to the comparison to a particularly strong
prior year that benefitted from the improvement in accounts receivable
management following SAP conversions a year earlier. Free cash flow* in
the current year was further impacted by a year-over-year increase in
capital expenditures, which reflected the Company’s investment in
revenue-generating assets, including two air separation plants, an
e-Business platform and a new hardgoods distribution center.
Return on capital* was 12.1% for the twelve months ended December 31,
2014, down 30 basis points compared to the prior year.
Since the beginning of its fiscal year, the Company has acquired 13
businesses with aggregate annual sales of more than $48 million.
Guidance
“While our performance met expectations in the third quarter, the rapid
and dramatic drop in oil prices, coupled with the recent strengthening
of the U.S. dollar, has created uncertainty in the market. In the
near-term, we expect some level of capital deferment in certain
sub-segments of our customer base and the positive impact of low oil
prices on manufacturing may be muted by the impact of the strong dollar
on manufacturers that export,” added Molinini. “Accordingly, we have
modestly reduced our sales growth rate assumptions, but still expect
strong year-over-year organic sales growth of 6% to 7% in the fourth
quarter.”
“Notwithstanding the near-term uncertainty in the energy sector, we
still believe the fundamentals for long-term economic growth in the
U.S., where 98% of our revenue is derived, will be favorable for years
to come,” said Airgas Executive Chairman Peter McCausland. “We believe
that any drag experienced from lower oil prices, either direct or
indirect, will ultimately be mitigated by the positive effect on other
industries and increases in consumer spending. Given our large and
diverse customer base, on balance, we expect lower oil prices will be
beneficial to Airgas over time.”
For the fourth quarter of fiscal year 2015, the Company expects earnings
per diluted share in the range of $1.25 to $1.30, representing an
increase of 7% to 11% over prior year earnings per diluted share of
$1.17 and an increase of 9% to 13% over prior year adjusted earnings per
diluted share* of $1.15. Fourth quarter guidance assumes a
year-over-year organic sales growth rate of 6% to 7%. For the full
fiscal year 2015, the Company expects earnings per diluted share in the
range of $4.95 to $5.00, representing an increase of 6% to 7% over prior
year earnings per diluted share of $4.68 and an increase of 5% to 6%
over prior year adjusted earnings per diluted share* of $4.72. Full year
guidance includes a negative $0.08 to $0.09 per diluted share
year-over-year impact from a variable compensation reset following a
below-budget year in fiscal 2014.
The company’s previous fiscal 2015 fourth quarter and full year earnings
per diluted share guidance was $1.32 to $1.37 and $5.00 to $5.10,
respectively.
The Company will conduct an earnings teleconference at 10:00 a.m.
Eastern Time on Tuesday, February 3. The teleconference will be
available by calling 888-401-4685 (U.S./Canada) or 719-325-2161
(International). 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 Relations” section of the Company’s
website at www.airgas.com. A webcast of the teleconference will
be available live and on demand through March 3 at http://investor.shareholder.com/arg/events.cfm.
A replay of the teleconference will be available through February 10. To
listen, call 888-203-1112 (U.S./Canada) or 719-457-0820 (International)
and enter passcode 6301088.
* See attached reconciliations and computations of non-GAAP adjusted
earnings per diluted share, adjusted effective tax rate, adjusted cash
from operations, free cash flow, and return on capital financial
measures.
About Airgas, Inc.
Airgas, Inc. (NYSE: ARG), through its subsidiaries, is one of the
nation's leading suppliers of industrial, medical and specialty gases,
and hardgoods, such as welding equipment and related products. Airgas is
a leading U.S. producer of atmospheric gases with 16 air separation
plants, a leading producer of carbon dioxide, dry ice, and nitrous
oxide, one of the largest U.S. suppliers of safety products, and a
leading U.S. supplier of refrigerants, ammonia products, and process
chemicals. More than 16,000 associates work in approximately 1,100
locations, including branches, retail stores, gas fill plants, specialty
gas labs, production facilities and distribution centers. Airgas also
markets its products and services through e-Business, 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 contains statements that are forward looking, as that
term is defined by the Private Securities Litigation Reform Act of 1995
or by the SEC in its rules, regulations and releases. These statements
include, but are not limited to: the Company’s expectations regarding
its fiscal 2015 fourth quarter and full fiscal year 2015 organic sales
growth and earnings per diluted share; the Company’s expectation that
lower oil prices will be beneficial to it over time; and the Company’s
intent to continue to invest in its strategic initiatives to promote
long-term growth. Forward-looking statements also include any statement
that is not based on historical fact, including statements containing
the words "believes," "may," "plans," "will," "could," "should,"
"estimates," "continues," "anticipates," "intends," "expects," and
similar expressions. 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. Airgas
assumes no obligation to revise or update any forward-looking statements
for any reason, except as required by law. Important factors that could
cause actual results to differ materially from those contained in any
forward-looking statement include: adverse changes in customer buying
patterns or weakening in the operating and financial performance of our
customers, any of which could negatively impact our sales and our
ability to collect our accounts receivable; postponement of projects due
to economic conditions and uncertainty in the energy sector; the impact
of the strong dollar on our manufacturer customers that export; customer
acceptance of price increases; increases in energy costs and other
operating expenses at a faster rate than our ability to increase prices;
changes in customer demand resulting in our inability to meet minimum
product purchase requirements under long-term supply agreements and the
inability to negotiate alternative supply arrangements; supply cost
pressures; shortages and/or disruptions in the supply chain of certain
gases; EPA rulings and the impact in the marketplace of U.S. compliance
with the Montreal Protocol as related to the production and import of
Refrigerant-22 (also known as HCFC-22 or R-22); our ability to
successfully build, complete in a timely manner and operate our new
plants; higher than expected expenses associated with the expansion of
our telesales business, e-Business platform, the adjustment of our
regional management structures, our strategic pricing initiatives and
other strategic growth initiatives; increased industry competition; our
ability to successfully identify, consummate, and integrate
acquisitions; our ability to achieve anticipated acquisition synergies;
operating costs associated with acquired businesses; our continued
ability to access credit markets on satisfactory terms; significant
fluctuations in interest rates; the impact of changes in credit market
conditions on our customers; our ability to effectively leverage our new
SAP system to improve the operating and financial performance of our
business; changes in tax and fiscal policies and laws; increased
expenditures relating to compliance with environmental and other
regulatory initiatives; the impact of new environmental, healthcare,
tax, accounting, and other regulations; the overall U.S. industrial
economy; catastrophic events and/or severe weather conditions; political
and economic uncertainties associated with current world events; and
other factors described in the Company's reports, including its March
31, 2014 Form 10-K, subsequent Forms 10-Q, and other forms filed by the
Company with the SEC.
Consolidated statements of earnings, condensed consolidated balance
sheets, consolidated statements of cash flows, and reconciliations and
computations of non-GAAP financial measures follow below.
|
AIRGAS, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
(Amounts in thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
1,331,820
|
|
|
|
$
|
1,242,846
|
|
|
|
$
|
4,003,162
|
|
|
|
$
|
3,804,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold (excluding depreciation)
|
|
|
|
588,933
|
|
|
|
|
537,670
|
|
|
|
|
1,772,873
|
|
|
|
|
1,676,225
|
|
Selling, distribution and administrative expenses
|
|
|
|
496,409
|
|
|
|
|
472,687
|
|
|
|
|
1,491,497
|
|
|
|
|
1,420,617
|
|
Depreciation
|
|
|
|
75,556
|
|
|
|
|
69,905
|
|
|
|
|
221,351
|
|
|
|
|
205,422
|
|
Amortization
|
|
|
|
8,036
|
|
|
|
|
7,665
|
|
|
|
|
23,693
|
|
|
|
|
22,141
|
|
Total costs and expenses
|
|
|
|
1,168,934
|
|
|
|
|
1,087,927
|
|
|
|
|
3,509,414
|
|
|
|
|
3,324,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
162,886
|
|
|
|
|
154,919
|
|
|
|
|
493,748
|
|
|
|
|
480,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
(13,673
|
)
|
|
|
|
(16,216
|
)
|
|
|
|
(48,374
|
)
|
|
|
|
(57,675
|
)
|
Loss on the extinguishment of debt (a)
|
|
|
|
-
|
|
|
|
|
(9,150
|
)
|
|
|
|
-
|
|
|
|
|
(9,150
|
)
|
Other income, net
|
|
|
|
(238
|
)
|
|
|
|
2,292
|
|
|
|
|
1,712
|
|
|
|
|
3,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
|
148,975
|
|
|
|
|
131,845
|
|
|
|
|
447,086
|
|
|
|
|
417,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes (b)
|
|
|
|
(55,776
|
)
|
|
|
|
(49,086
|
)
|
|
|
|
(166,723
|
)
|
|
|
|
(154,929
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
93,199
|
|
|
|
$
|
82,759
|
|
|
|
$
|
280,363
|
|
|
|
$
|
262,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
1.25
|
|
|
|
$
|
1.12
|
|
|
|
$
|
3.76
|
|
|
|
$
|
3.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
1.23
|
|
|
|
$
|
1.10
|
|
|
|
$
|
3.70
|
|
|
|
$
|
3.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
74,767
|
|
|
|
|
73,767
|
|
|
|
|
74,534
|
|
|
|
|
73,505
|
|
Diluted
|
|
|
|
75,954
|
|
|
|
|
75,094
|
|
|
|
|
75,721
|
|
|
|
|
74,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See attached Notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIRGAS, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Amounts in thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
|
$
|
73,588
|
|
|
$
|
69,561
|
Trade receivables, net
|
|
|
|
692,748
|
|
|
|
701,060
|
Inventories, net
|
|
|
|
499,570
|
|
|
|
478,149
|
Deferred income tax asset, net
|
|
|
|
57,882
|
|
|
|
57,961
|
Prepaid expenses and other current assets
|
|
|
|
150,686
|
|
|
|
92,356
|
TOTAL CURRENT ASSETS
|
|
|
|
1,474,474
|
|
|
|
1,399,087
|
|
|
|
|
|
|
|
|
|
Plant and equipment, net
|
|
|
|
2,906,363
|
|
|
|
2,802,415
|
Goodwill
|
|
|
|
1,311,771
|
|
|
|
1,289,896
|
Other intangible assets, net
|
|
|
|
249,705
|
|
|
|
258,836
|
Other non-current assets
|
|
|
|
47,668
|
|
|
|
43,080
|
TOTAL ASSETS
|
|
|
$
|
5,989,981
|
|
|
$
|
5,793,314
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Accounts payable, trade
|
|
|
$
|
203,305
|
|
|
$
|
196,911
|
Accrued expenses and other current liabilities
|
|
|
|
349,900
|
|
|
|
345,676
|
Short-term debt (c)
|
|
|
|
416,314
|
|
|
|
387,866
|
Current portion of long-term debt (d)
|
|
|
|
250,092
|
|
|
|
400,322
|
TOTAL CURRENT LIABILITIES
|
|
|
|
1,219,611
|
|
|
|
1,330,775
|
|
|
|
|
|
|
|
|
|
Long-term debt, excluding current portion (d) (e)
|
|
|
|
1,757,978
|
|
|
|
1,706,774
|
Deferred income tax liability, net
|
|
|
|
839,124
|
|
|
|
825,897
|
Other non-current liabilities
|
|
|
|
88,167
|
|
|
|
89,219
|
Stockholders’ equity
|
|
|
|
2,085,101
|
|
|
|
1,840,649
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
$
|
5,989,981
|
|
|
$
|
5,793,314
|
|
|
|
|
|
|
|
|
|
See attached Notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIRGAS, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Amounts in thousands)
|
(Unaudited)
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
280,363
|
|
|
|
$
|
262,427
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
221,351
|
|
|
|
|
205,422
|
|
Amortization
|
|
|
|
23,693
|
|
|
|
|
22,141
|
|
Deferred income taxes
|
|
|
|
14,332
|
|
|
|
|
9,061
|
|
Gain on sales of plant and equipment
|
|
|
|
(1,654
|
)
|
|
|
|
(1,268
|
)
|
Stock-based compensation expense
|
|
|
|
25,618
|
|
|
|
|
24,542
|
|
Loss on the extinguishment of debt (a)
|
|
|
|
-
|
|
|
|
|
9,150
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and liabilities, excluding effects of business
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net
|
|
|
|
14,337
|
|
|
|
|
52,930
|
|
Inventories, net
|
|
|
|
(20,974
|
)
|
|
|
|
(9,885
|
)
|
Prepaid expenses and other current assets
|
|
|
|
(58,230
|
)
|
|
|
|
8,023
|
|
Accounts payable, trade
|
|
|
|
5,195
|
|
|
|
|
(26,663
|
)
|
Accrued expenses and other current liabilities
|
|
|
|
17,972
|
|
|
|
|
(597
|
)
|
Other, net
|
|
|
|
(7,319
|
)
|
|
|
|
(1,421
|
)
|
Net cash provided by operating activities
|
|
|
|
514,684
|
|
|
|
|
553,862
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(338,905
|
)
|
|
|
|
(257,476
|
)
|
Proceeds from sales of fixed assets
|
|
|
|
16,992
|
|
|
|
|
11,427
|
|
Business acquisitions and holdback settlements
|
|
|
|
(45,165
|
)
|
|
|
|
(179,581
|
)
|
Other, net
|
|
|
|
316
|
|
|
|
|
(957
|
)
|
Net cash used in investing activities
|
|
|
|
(366,762
|
)
|
|
|
|
(426,587
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net increase in short-term debt (c)
|
|
|
|
27,966
|
|
|
|
|
442,948
|
|
Proceeds from borrowings of long-term debt (d)
|
|
|
|
312,941
|
|
|
|
|
132,525
|
|
Repayment of long-term debt (a) (c)
|
|
|
|
(406,345
|
)
|
|
|
|
(635,721
|
)
|
Financing costs
|
|
|
|
(5,236
|
)
|
|
|
|
(7,676
|
)
|
Purchase of treasury stock
|
|
|
|
-
|
|
|
|
|
(8,127
|
)
|
Proceeds from the exercise of stock options
|
|
|
|
41,565
|
|
|
|
|
29,771
|
|
Stock issued for the Employee Stock Purchase Plan
|
|
|
|
13,304
|
|
|
|
|
12,974
|
|
Excess tax benefit realized from the exercise of stock options
|
|
|
|
10,487
|
|
|
|
|
9,426
|
|
Dividends paid to stockholders
|
|
|
|
(123,080
|
)
|
|
|
|
(105,936
|
)
|
Change in cash overdraft and other
|
|
|
|
(15,497
|
)
|
|
|
|
(21,620
|
)
|
Net cash used in financing activities
|
|
|
|
(143,895
|
)
|
|
|
|
(151,436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash
|
|
|
$
|
4,027
|
|
|
|
$
|
(24,161
|
)
|
Cash – Beginning of period
|
|
|
|
69,561
|
|
|
|
|
86,386
|
|
Cash – End of period
|
|
|
$
|
73,588
|
|
|
|
$
|
62,225
|
|
|
|
|
|
|
|
|
|
|
|
|
See attached Notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
a)
|
|
On August 27, 2013, the Company announced its election to redeem all
$215 million of its outstanding 7.125% senior subordinated notes
originally due to mature in October 2018 (the "2018 Notes"). The
2018 Notes were redeemed in full on October 2, 2013 at a price of
103.563%. A loss on the early extinguishment of debt of $9.1 million
($5.6 million after tax, or $0.08 per diluted share) related to the
redemption premium and the write-off of unamortized debt issuance
costs on the 2018 Notes was recognized in the three months ended
December 31, 2013.
|
|
|
|
b)
|
|
During the quarter ended September 30, 2013, the Company recognized
a $1.5 million ($0.02 per diluted share) tax benefit related to a
change in a state income tax law, allowing the Company to utilize
additional net operating loss carryforwards. The Company's adjusted
effective tax rate*, which excludes the impact of the benefit to the
Company's income taxes, as well as the income tax impact related to
the loss on the early extinguishment of debt, was 37.5% for the nine
months ended December 31, 2013.
|
|
|
|
c)
|
|
The Company participates in a $1 billion commercial paper program
supported by its Credit Facility which was amended and restated on
November 18, 2014. This program allows the Company to obtain
favorable short-term borrowing rates with maturities that vary, but
will generally not exceed 90 days from the date of issue. The
Company has used proceeds from commercial paper issuances for
general corporate purposes. During the nine months ended December
31, 2013, the Company used commercial paper as the principal source
for the repayment of its $215 million 2018 Notes and the maturity of
its $300 million 2.85% senior notes in October 2013. During the nine
months ended December 31, 2014, proceeds from the issuance of an
aggregate $300 million of senior notes in June 2014 (Note d) were
principally used to pay down commercial paper, and the Company
principally used commercial paper to redeem its $400 million 4.50%
senior notes (the "2014 Notes") which matured in September 2014
(Note d). At December 31, 2014, $416 million was outstanding under
the commercial paper program.
|
|
|
|
d)
|
|
On June 17, 2014, the Company issued $300 million of 3.65% senior
notes maturing on July 15, 2024. The net proceeds from the offering
were used for general corporate purposes, including to fund
acquisitions and repay indebtedness under the Company's commercial
paper program. In September 2014, the Company made its final payment
on the 2014 Notes and financed the requirement with the proceeds
from commercial paper issuances and excess cash. In October 2014,
the Company's $250 million 3.25% senior notes maturing October 2015
were reclassified to the "Current portion of long-term debt" line
item of the Company's Consolidated Balance Sheet.
|
|
|
|
e)
|
|
The Company's Credit Facility matures on November 18, 2019.
Including the borrowings under the commercial paper program,
approximately $476 million was available to the Company under the
Credit Facility at December 31, 2014.
|
|
|
|
f)
|
|
Business segment information for the Company's Distribution and All
Other Operations business segments is presented in the following
tables. Amounts in the "Eliminations and Other" column reported for
net sales and cost of products sold (excluding depreciation)
represent the elimination of intercompany sales and associated gross
profit on sales from the Company's All Other Operations business
segment to the Distribution business segment. Although corporate
operating expenses are generally allocated to each business segment
based on sales dollars, the Company reported expenses (excluding
depreciation) related to the implementation of its SAP system under
selling, distribution and administrative expenses in the
"Eliminations and Other" column.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
|
December 31, 2014
|
|
|
December 31, 2013
|
(In thousands)
|
|
|
Dist.
|
|
|
All
Other
Ops.
|
|
|
Elim.
& Other
|
|
|
Total
|
|
|
Dist.
|
|
|
All
Other
Ops.
|
|
|
Elim.
& Other
|
|
|
Total
|
Gas and rent
|
|
|
$
|
711,030
|
|
|
$
|
139,226
|
|
|
$
|
(7,698
|
)
|
|
|
$
|
842,558
|
|
|
$
|
674,465
|
|
|
$
|
123,768
|
|
|
$
|
(7,338
|
)
|
|
|
$
|
790,895
|
Hardgoods
|
|
|
|
488,315
|
|
|
|
950
|
|
|
|
(3
|
)
|
|
|
|
489,262
|
|
|
|
451,057
|
|
|
|
895
|
|
|
|
(1
|
)
|
|
|
|
451,951
|
Total net sales
|
|
|
|
1,199,345
|
|
|
|
140,176
|
|
|
|
(7,701
|
)
|
|
|
|
1,331,820
|
|
|
|
1,125,522
|
|
|
|
124,663
|
|
|
|
(7,339
|
)
|
|
|
|
1,242,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold (excluding depreciation)
|
|
|
|
521,782
|
|
|
|
74,852
|
|
|
|
(7,701
|
)
|
|
|
|
588,933
|
|
|
|
484,083
|
|
|
|
60,926
|
|
|
|
(7,339
|
)
|
|
|
|
537,670
|
Selling, distribution and administrative expenses
|
|
|
|
449,616
|
|
|
|
46,793
|
|
|
|
-
|
|
|
|
|
496,409
|
|
|
|
427,440
|
|
|
|
43,409
|
|
|
|
1,838
|
|
|
|
|
472,687
|
Depreciation
|
|
|
|
69,134
|
|
|
|
6,422
|
|
|
|
-
|
|
|
|
|
75,556
|
|
|
|
63,968
|
|
|
|
5,937
|
|
|
|
-
|
|
|
|
|
69,905
|
Amortization
|
|
|
|
6,914
|
|
|
|
1,122
|
|
|
|
-
|
|
|
|
|
8,036
|
|
|
|
6,620
|
|
|
|
1,045
|
|
|
|
-
|
|
|
|
|
7,665
|
Operating income
|
|
|
$
|
151,899
|
|
|
$
|
10,987
|
|
|
$
|
-
|
|
|
|
$
|
162,886
|
|
|
$
|
143,411
|
|
|
$
|
13,346
|
|
|
$
|
(1,838
|
)
|
|
|
$
|
154,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
Nine Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31, 2014
|
|
|
December 31, 2013
|
(In thousands)
|
|
|
Dist.
|
|
|
All
Other
Ops.
|
|
|
Elim.
& Other
|
|
|
Total
|
|
|
Dist.
|
|
|
All
Other
Ops.
|
|
|
Elim.
& Other
|
|
|
Total
|
Gas and rent
|
|
|
$
|
2,126,338
|
|
|
$
|
423,139
|
|
|
$
|
(22,813
|
)
|
|
|
$
|
2,526,664
|
|
|
$
|
2,028,340
|
|
|
$
|
418,948
|
|
|
$
|
(23,715
|
)
|
|
|
$
|
2,423,573
|
Hardgoods
|
|
|
|
1,473,629
|
|
|
|
2,875
|
|
|
|
(6
|
)
|
|
|
|
1,476,498
|
|
|
|
1,377,842
|
|
|
|
3,295
|
|
|
|
(3
|
)
|
|
|
|
1,381,134
|
Total net sales
|
|
|
|
3,599,967
|
|
|
|
426,014
|
|
|
|
(22,819
|
)
|
|
|
|
4,003,162
|
|
|
|
3,406,182
|
|
|
|
422,243
|
|
|
|
(23,718
|
)
|
|
|
|
3,804,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold (excluding depreciation)
|
|
|
|
1,574,582
|
|
|
|
221,110
|
|
|
|
(22,819
|
)
|
|
|
|
1,772,873
|
|
|
|
1,480,870
|
|
|
|
219,073
|
|
|
|
(23,718
|
)
|
|
|
|
1,676,225
|
Selling, distribution and administrative expenses
|
|
|
|
1,351,722
|
|
|
|
139,775
|
|
|
|
-
|
|
|
|
|
1,491,497
|
|
|
|
1,282,022
|
|
|
|
132,361
|
|
|
|
6,234
|
|
|
|
|
1,420,617
|
Depreciation
|
|
|
|
202,545
|
|
|
|
18,806
|
|
|
|
-
|
|
|
|
|
221,351
|
|
|
|
188,497
|
|
|
|
16,925
|
|
|
|
-
|
|
|
|
|
205,422
|
Amortization
|
|
|
|
20,519
|
|
|
|
3,174
|
|
|
|
-
|
|
|
|
|
23,693
|
|
|
|
18,875
|
|
|
|
3,266
|
|
|
|
-
|
|
|
|
|
22,141
|
Operating income
|
|
|
$
|
450,599
|
|
|
$
|
43,149
|
|
|
$
|
-
|
|
|
|
$
|
493,748
|
|
|
$
|
435,918
|
|
|
$
|
50,618
|
|
|
$
|
(6,234
|
)
|
|
|
$
|
480,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP Financial Measures (Unaudited)
|
|
Adjusted Earnings per Diluted Share and Earnings Guidance
|
|
Reconciliations of adjusted earnings per diluted share and
earnings guidance:
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2013
|
Earnings per diluted share
|
|
|
$
|
1.23
|
|
|
$
|
1.10
|
Loss on the extinguishment of debt
|
|
|
|
-
|
|
|
|
0.08
|
Adjusted earnings per diluted share
|
|
|
$
|
1.23
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
(Guidance Range)
|
|
|
|
|
|
(Guidance Range)
|
|
|
|
Months
|
|
|
Three Months Ending
|
|
|
Year
|
|
|
Year Ending
|
|
|
|
Ended
|
|
|
March 31, 2015
|
|
|
Ended
|
|
|
March 31, 2015
|
|
|
|
Mar 31,
|
|
|
|
|
|
|
|
|
Mar 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
Low
|
|
|
High
|
|
|
2014
|
|
|
Low
|
|
|
High
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted share
|
|
|
$
|
1.17
|
|
|
|
$
|
1.25
|
|
|
|
$
|
1.30
|
|
|
|
$
|
4.68
|
|
|
|
$
|
4.95
|
|
|
|
$
|
5.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to earnings per diluted share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State income tax benefit
|
|
|
|
(0.02
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(0.04
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
Loss on the extinguishment of debt
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
0.08
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per diluted share
|
|
|
$
|
1.15
|
|
|
|
$
|
1.25
|
|
|
|
$
|
1.30
|
|
|
|
$
|
4.72
|
|
|
|
$
|
4.95
|
|
|
|
$
|
5.00
|
|
Year-over-year change
|
|
|
|
|
|
|
|
|
9
|
%
|
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
5
|
%
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company believes its adjusted earnings per diluted share financial
measure provides investors meaningful insight into its earnings
performance without the impact of benefits from the changes in state
income tax rates and law, and the loss on the extinguishment of debt.
Non-GAAP financial measures should be read in conjunction with GAAP
financial measures, as non-GAAP financial measures are merely a
supplement to, and not a replacement for, GAAP financial measures. It
should also be noted that the Company’s adjusted earnings per diluted
share financial measure may be different from the adjusted earnings per
diluted share financial measures provided by other companies.
|
Adjusted Effective Tax Rate
|
|
Reconciliations of adjusted effective tax rate:
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
December 31,
|
(In thousands)
|
|
|
|
2013
|
|
|
|
|
|
|
|
Income taxes
|
|
|
|
$
|
154,929
|
|
Adjustments to income taxes:
|
|
|
|
|
|
|
Change in state income tax law
|
|
|
|
|
1,493
|
|
Loss on the extinguishment of debt
|
|
|
|
|
3,504
|
|
Adjusted income taxes
|
|
|
|
$
|
159,926
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
|
$
|
417,356
|
|
Adjustments to earnings before income taxes:
|
|
|
|
|
|
|
Loss on the extinguishment of debt
|
|
|
|
|
9,150
|
|
Adjusted earnings before income taxes
|
|
|
|
$
|
426,506
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
|
37.1
|
%
|
|
|
|
|
|
|
|
Adjusted effective tax rate
|
|
|
|
|
37.5
|
%
|
|
|
|
|
|
|
|
The Company believes its adjusted effective tax rate financial measure
helps investors assess its effective tax rate without the impact of a
benefit related to a change in a state income tax law and the income tax
impact related to the loss on the extinguishment of debt. Non-GAAP
financial measures should be read in conjunction with GAAP financial
measures, as non-GAAP financial measures are merely a supplement to, and
not a replacement for, GAAP financial measures. It should also be noted
that the Company’s adjusted effective tax rate financial measure may be
different from the adjusted effective tax rate financial measures
provided by other companies.
|
|
|
|
|
|
|
|
|
|
|
Return on Capital
|
|
Reconciliations and computations of return on capital:
|
|
|
|
|
December 31,
|
(In thousands)
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Operating income - trailing four quarters
|
|
|
$
|
643,980
|
|
|
|
$
|
632,564
|
|
Adjustments to operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other special charges, net
|
|
|
|
-
|
|
|
|
|
1,663
|
|
Adjusted operating income - trailing four quarters
|
|
|
$
|
643,980
|
|
|
|
$
|
634,227
|
|
|
|
|
|
|
|
|
|
|
|
|
Average of total assets
|
|
|
$
|
5,863,082
|
|
|
|
$
|
5,625,376
|
|
Average of current liabilities (exclusive of debt)
|
|
|
|
(544,940
|
)
|
|
|
|
(519,443
|
)
|
Average capital employed
|
|
|
$
|
5,318,142
|
|
|
|
$
|
5,105,933
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on capital
|
|
|
|
12.1
|
%
|
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
The Company believes its return on capital financial measure helps
investors assess how effectively it uses the capital invested in its
operations. Non-GAAP financial measures should be read in conjunction
with GAAP financial measures, as non-GAAP financial measures are merely
a supplement to, and not a replacement for, GAAP financial measures. It
should be noted as well that the Company’s return on capital financial
measure may be different from the return on capital financial measures
provided by other companies.
|
Adjusted Cash from Operations, Adjusted Capital Expenditures,
and Free Cash Flow
|
|
Reconciliations and computations of adjusted cash from operations,
adjusted capital expenditures, and free cash flow:
|
|
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
(In thousands)
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
514,684
|
|
|
|
$
|
553,862
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Stock issued for the Employee Stock Purchase Plan
|
|
|
|
13,304
|
|
|
|
|
12,974
|
|
Excess tax benefit realized from the exercise of stock options
|
|
|
|
10,487
|
|
|
|
|
9,426
|
|
Adjusted cash from operations
|
|
|
|
538,475
|
|
|
|
|
576,262
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(338,905
|
)
|
|
|
|
(257,476
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales of fixed assets
|
|
|
|
16,992
|
|
|
|
|
11,427
|
|
Operating lease buyouts
|
|
|
|
1,349
|
|
|
|
|
2,997
|
|
Adjusted capital expenditures
|
|
|
|
(320,564
|
)
|
|
|
|
(243,052
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
$
|
217,911
|
|
|
|
$
|
333,210
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
$
|
(366,762
|
)
|
|
|
$
|
(426,587
|
)
|
Net cash used in financing activities
|
|
|
$
|
(143,895
|
)
|
|
|
$
|
(151,436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
The Company believes its adjusted cash from operations, adjusted capital
expenditures, and free cash flow financial measures provide investors
meaningful insight into its ability to generate cash from operations,
which is available for servicing debt obligations and for the execution
of its business strategies, including acquisitions, the prepayment of
debt, the payment of dividends, or to support other investing and
financing activities. The Company’s free cash flow financial measure has
limitations and does not represent the residual cash flow available for
discretionary expenditures. Certain non-discretionary expenditures such
as payments on maturing debt obligations are excluded from the Company’s
computation of its free cash flow financial measure. Non-GAAP financial
measures should be read in conjunction with GAAP financial measures, as
non-GAAP financial measures are merely a supplement to, and not a
replacement for, GAAP financial measures. It should also be noted that
the Company’s adjusted cash from operations, adjusted capital
expenditures, and free cash flow financial measures may be different
from the adjusted cash from operations, adjusted capital expenditures,
and free cash flow financial measures provided by other companies.
CONTACT:
Airgas, Inc.
Investor Contact:
Joseph Marczely,
610-263-8277
joseph.marczely@airgas.com
or
Media
Contact:
Sarah Boxler, 610-263-8260
sarah.boxler@airgas.com
Airgas (NYSE:ARG)
Historical Stock Chart
From Feb 2024 to Mar 2024
Airgas (NYSE:ARG)
Historical Stock Chart
From Mar 2023 to Mar 2024