Airgas, Inc. (NYSE: ARG), one of the nation’s leading suppliers of industrial, medical, and specialty gases, and related products, today reported sales and earnings growth for its third quarter ended December 31, 2012, which reflected the impact of continued economic uncertainty and moderation in business conditions on its diversified customer base. Results for the quarter also reflected the realization of SAP-related benefits as planned, tempered by slightly higher than anticipated implementation costs.
Third quarter earnings per diluted share were $1.05, an increase of 13% over prior year earnings per diluted share of $0.93. Excluding a net $0.01 benefit from certain lower-than-expected restructuring costs, adjusted earnings per diluted share* were $1.04, an increase of 7% over prior year adjusted earnings per diluted share* of $0.97. Results included SAP implementation costs and depreciation expense, net of benefits realized, of $0.03 per diluted share in the current year quarter compared to $0.10 of expense in the prior year quarter.
|Earnings per diluted share (GAAP)||$||1.05||$||0.93||13||%|
|Restructuring and other special charges (benefits), net||(0.01||)||0.02|
|Costs (benefits) related to unsolicited takeover attempt||-||(0.01||)|
|Multi-employer pension plan withdrawal charges||-||0.03|
|Adjusted earnings per diluted share (non-GAAP)||$||1.04||$||0.97||7||%|
“Moderating activity levels in our industrial customer base throughout the quarter were further exacerbated in late December by uncertainty around the fiscal cliff and by the timing of the holidays during the work week,” said Airgas Executive Chairman Peter McCausland. “We’re pleased to be on target for our SAP benefits, which contributed to the Distribution segment’s 200 basis point year-over-year expansion in gross margin and 30 basis point year-over-year expansion in operating margin on very modest sales growth. Although implementation costs were slightly higher than anticipated during the quarter, we demonstrated the ability to achieve the SAP benefits, and that reinforces that this program will create substantial shareholder value. Acquisition activity was another bright spot in the quarter, as we added seven businesses with aggregate annual revenues of $75 million. Though we remain appropriately cautious about near-term business conditions, we’re very optimistic about the long-term prospects for the U.S. manufacturing and energy industries, as well as non-residential construction, and our ability to leverage our unique value proposition and unrivaled platform to drive growth. Some of the most challenging aspects of the SAP implementation are behind us, we’re building momentum, and we’re ready to capitalize on any improvement in the U.S. economy.”