Airgas Provides Update on Fiscal 2015 Fourth Quarter Organic Sales Growth and Issues Revised Fourth Quarter Guidance
March 20 2015 - 8:30AM
Business Wire
Airgas, Inc. (NYSE: ARG), one of the nation’s leading suppliers
of industrial, medical, and specialty gases, and related products,
today provided an update on organic sales growth and issued revised
earnings guidance for its fourth quarter ending March 31, 2015.
“Organic sales growth has been disappointing this quarter,” said
President and Chief Executive Officer Michael Molinini. “Organic
sales year-over-year growth rates, which were 6% in the December
quarter, have moved lower this quarter. Based on sales to date and
current trends, we now expect year-over-year organic growth for our
fourth quarter to be in the range of 1% to 2%, compared to growth
of 6% to 7% which was assumed in our guidance. While we anticipated
near-term sales challenges due to the uncertainty caused by the
significant and rapid decline in oil prices and the impact of the
strong dollar on manufacturers that export, we are experiencing
greater than anticipated declines in growth rates in our Energy
& Chemicals and Manufacturing customer segments. We have also
been impacted by challenging weather conditions throughout much of
the country. As a result of this anticipated sales shortfall, we
now estimate that earnings per diluted share will be in the range
of $1.13 to $1.16 as compared to our prior year’s fourth quarter
adjusted earnings per diluted share* of $1.15.”
The company’s previous fiscal 2015 fourth quarter earnings per
diluted share guidance was $1.25 to $1.30.
“We are seeing an economy that is clearly weaker than it was in
the December quarter, and the level of uncertainty in the
marketplace makes it difficult for us to predict our near-term
sales outlook. We continue to look hard at all our operating costs
and execute our productivity initiatives, and we will manage more
tightly all capital expenditures until sustained growth levels
return. We remain optimistic that the U.S. economy and Airgas will
ultimately benefit as lower energy costs filter through the large
and diverse customer base we serve, but we cannot count on strong
organic growth in the near-term,” said Executive Chairman Peter
McCausland. “We are confident that Airgas is maintaining or
improving its competitive position in the industry.”
* See attached reconciliation of non-GAAP adjusted earnings per
diluted share guidance.
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: our expectations
regarding our fiscal 2015 fourth quarter organic sales growth and
earnings per diluted share, including earnings per diluted share
and sales in the month of March; our management of capital
expenditures; and our expectation that lower energy costs will be
beneficial to us over time. 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: the impact from the decline
in oil prices on our customers; 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
facilities; 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.
Reconciliations of Non-GAAP Financial
Measures (Unaudited)
Revised Earnings per
Diluted Share Guidance
Reconciliations of adjusted earnings per
diluted share guidance:
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 $ 1.13 $ 1.16 $ 4.68 $ 4.83 $
4.86 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
$ 1.13 $
1.16 $ 4.72
$ 4.83 $ 4.86
Year-over-year change
(2%
)
1%
2%
3%
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.
Airgas, Inc.Investor Contact:Joseph
Marczely, 610-263-8277joseph.marczely@airgas.comorMedia Contact:Sarah Boxler,
610-263-8260sarah.boxler@airgas.com
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