Radnor, Pennsylvania-based Airgas – No. 9 on Industrial Distribution's 2015 Big 50 List – reported its second quarter financial earnings on Tuesday for the period ended Sept. 30.
The industrial gases, welding, and safety supplies distributor reported total Q2 sales of $1.37 billion, a 1.2 percent increase over last year. Q1 had sales of $1.3 billion. Profit for Q2 was $98.0 million, virtually identical to last year's $98.3 million. Q1 profit was $88.24 million.
Airgas said organic sales were flat, with gas and rent sales up 3 percent and hardgoods down 5 percent. In the company's distribution segment, organic sales were down 1 percent, with gas and rent up 2 percent and hardgoods down 5 percent. In Airgas' All Other Operations segment, organic sales were up 8 percent, mostly driven by sales of refrigerants, CO2, and dry ice. The company said acquisitions boosted sales by 1 percent on a consolidated basis and in its Distribution segment, and by 8 percent in All Other Operations.
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Airgas' Strategic Account sales were up 2 percent from last year, with strength in non-residential construction and Food/Beverage/Retail, and weakness in Manufacturing, Metal Fabrication, Energy, and Primary Materials.
Airgas said Strategic Product sales were up 2 percent, with the following breakdown:
- Safety products down 4 percent
- Bulk gas up 5 percent
- Medical sales flat
- Specialty gas up 9 percent
- CO2 & Dry Ice up 5 percent
- Radnor private-label sales down 5 percent
"Our results continue to reflect the challenging industrial economy with sales to customers in our energy and chemical, and manufacturing and metal fabrication end markets down year-over-year in the mid single digits," Airgas CEO Michael Molinini said in a release. "However, our diversified end customer markets and continued strength in non-residential construction, together with tight expense management, helped to mitigate the impact of the sales declines in those end markets. The quarterly results demonstrated the resilience of our business during difficult economic times."
The company stated that through October, it has acquired 12 businesses with $80 million in aggregate annual revenues.
In its updated 2016 outlook, Airgas expects organic sales growth of 1 to 3 percent.
“While we are encouraged by the continued strong levels of non-residential construction activity, our strong cash flow, the progress our new District Managers are making and acquisition activity, the overall weak industrial demand tempers our near-term optimism," Airgas Executive Chairman Peter McCausland said. "We continue to focus on expense management and are generally limiting our new hires and backfills to only critical customer-facing and safety sensitive roles.
"We have identified geographic and end market areas with significant slowdowns and are currently reducing headcount in those areas. Long-term, we believe the fundamental growth prospects for the U.S. economy are strong. The significant investments we have made and continue to make in our gas business position Airgas for industry leading growth."
