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Airgas, Inc. (NYSE: ARG), Radnor, PA, No. 4 on the top 40 industrial distributors,reported sales for the first quarter ended June 30 were $1.05 billion, a year-over-year increase of 7 percent. Profit increased 18 percent to $64.8 million.
Same-store sales increased 6 percent, with hardgoods up 8 percent and gas and rent up 5 percent.
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"We delivered the second best earnings quarter in company history, which is particularly encouraging given that, at this early stage of the economic recovery, revenues have not yet recovered to pre-recession levels," CEO Peter McCausland said. "Conditions continued to improve in most of our customer segments and geographies this quarter, led by manufacturing, and with the greatest strength in our Great Lakes region."
The strong first-quarter earnings and a reduction of Airgas debt by more than $160 million since Dec. 31, 2009, contributed to the determination that the latest offer by Air Products (NYSE: APD) to purchase all outstanding shares for $63.50 per share "continues to grossly undervalue Airgas," McCausland said. The Airgas Board of Directors voted unanimously to reject the bid and recommended stockholders not tender their shares into the offer.
"While the per-share amount that Air Products has offered is nominally higher, Air Products' total cost to acquire Airgas – as measured in terms of enterprise value – remains the same at approximately $7.15 billion, despite Airgas' strongly increasing earnings and enhanced prospects," McCausaland said.
The board also advised stockholders to vote against board nominees submitted by Air Products and associated bylaw amendments.
"We believe strongly that Airgas will generate more value for stockholders by executing its strategic plan than by pursuing Air Products' proposed transaction," McCausland sais. "Airgas stockholders – not Air Products – should reap the benefits of our increased earning power and bright future."