Airgas Inc., the largest U.S. distributor of industrial, medical and specialty gases, and welding, safety and related products, last week reported record earnings and strong growth in sales and operating income for its second quarter ended Sept. 30.
Quarterly net earnings grew 44 percent to $72.8 million, or $0.86 per diluted share, compared to $50.6 million, or $0.60 per diluted share, in the prior year. Second-quarter sales increased 15 percent from the prior year to $1.2 billion. Acquisitions contributed 7 percent to the increase, and total same-store sales grew 8 in the quarter, with gas and rent up 12 percent and hard goods up 4 percent.
"We are performing very well in a moderating economic environment," said Airgas chairman and CEO Peter McCausland. "Our expanded offering that targets infrastructure construction has been successful in gaining new business, particularly in the energy and power segments. About 40 percent of our sales come from our strategic products, which posted 11-percent organic growth in the quarter and are focused on the medical, life sciences, research, environmental, and food and beverage markets.
"Acquisition activity has been strong in the first half of our fiscal year, with a total of six acquisitions and $142 million of acquired annual revenue to date. We are expanding returns by effectively integrating acquisitions and leveraging our distribution infrastructure."
Return on capital increased 40 basis points over the prior year to 13.6 percent. Year-to-date free cash flow was $112 million, compared to $92 million in the prior year. "We continue to generate strong free cash flow, even while funding significant plant projects that will be operational in the coming quarters," McCausland said. "We were pleased to announce today that we increased our quarterly dividend 33 percent to $0.16 per share because of the confidence we have in our growth outlook and cash flow."
The company expects earnings per diluted share of $0.82 to $0.84 in the third quarter and reiterated its full-year expectations of $3.30 to $3.40 per diluted share in fiscal 2009.
Airgas is the parent company of North America’s largest welding rental specialist, Toronto and Austell, Ga.-based Red-d-Arc Welderrentals, No. 27 on the RER 100.