Airgas – ARG – Solid financial results for its second quarter ended September 30, 2012

Airgas, Inc. (NYSE: ARG), the largest U.S. supplier of industrial, medical, and specialty gases, and related products, today reported solid financial results for its second quarter ended September 30, 2012, in moderating macroeconomic conditions across its diversified customer base during the quarter and in light of the year-over-year impacts of incrementally higher SAP implementation costs, one less selling day, and helium supply constraints.

• Second quarter diluted EPS of $1.03 and adjusted diluted EPS of $1.05, each up 2% over prior year
• Second quarter same-store sales up 3% over prior year
• Year-to-date free cash flow of $121 million, up 15% over prior year
• Return on capital of 12.5%, up 20 basis points over prior year
• Revised fiscal year 2013 diluted EPS guidance to $4.42 to $4.57 from $4.61 to $4.71; revised fiscal year 2013 adjusted diluted EPS guidance to $4.45 to $4.60 from $4.65 to $4.75

Second quarter earnings per diluted share were $1.03, an increase of 2% over prior year earnings per diluted share of $1.01. Excluding a $0.02 restructuring charge, adjusted earnings per diluted share were $1.05, an increase of 2% over prior year adjusted earnings per diluted share of $1.03. Results included SAP implementation costs and depreciation expense of $0.09 per diluted share in the current year quarter compared to $0.07 in the prior year quarter, a year-over-year negative impact of approximately $0.03 due to one less selling day in the current year quarter, and a year-over-year decline of $0.02 from the impact of lower sales due to helium supply constraints.

“Our second quarter earnings reflect the resilience of our business and our 15,000 dedicated associates in a sluggish economic environment,” said Airgas Executive Chairman Peter McCausland. “Though the relative strength of the U.S. metal fabrication and energy sectors overall has softened of late, we continue to win new business in these sectors on the strength of our strategic accounts program, technical support, breadth of our product and service offering, and outstanding customer service. The year-over-year earnings headwinds we faced this quarter from one less selling day, helium supply constraints, and incremental SAP costs reduced our year-over-year earnings growth by $0.07, further highlighting the solid performance in our underlying business.”

Second quarter sales were $1.23 billion, an increase of 4% over the prior year. Same-store sales grew 3% in the quarter, with gas and rent up 4% and hardgoods up 1%.

“Current business conditions present some near-term challenges, but we will continue to invest in our growth strategies,” said Airgas Chief Executive Officer Michael L. Molinini. “Our SAP implementation is on-schedule, with ten of our twelve regional distribution businesses now running successfully on the new system. We remain confident that we will realize the economic benefits as planned and that this investment will further enhance the value of our full-service offering to customers and help our business operate more efficiently over the long-term.”

About Airgas, Inc. – ARG

Airgas, Inc. (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. ARG 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.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.