RADNOR, Penn. -- Airgas, Inc., a U.S. distributor of industrial, medical, and specialty gases, and related supplies, reported net earnings of $64.8 million, or $0.76 per diluted share, for its first quarter ended June 30, 2010.
Excluding legal and professional fees of $0.03 per diluted share related to an unsolicited takeover attempt, debt extinguishment charges of $0.02 per diluted share, and multi-employer pension plan withdrawal charges of $0.02 per diluted share, adjusted earnings per diluted share were $0.83, up 26% from $0.66 in the prior year and up 20% sequentially.First quarter sales were $1.05 billion, a sequential increase of 5% in sales per day and 7% in total sales compared to the fourth quarter. Compared to the prior year, total same-store sales increased 6% in the quarter, with hard goods up 8% and gas and rent up 5%. Acquisitions contributed 1% sales growth over prior year.
"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," said Airgas Chairman and Chief Executive Officer Peter McCausland. "Our strategy through the downturn was to position Airgas to emerge from the recession as an even stronger company, and our results demonstrate our success, as we are running very close to record earnings and margins.
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," McCausland added. "The strengthening in our business and our robust results give us the confidence to raise our fiscal 2011 guidance. Further, the increasing momentum we are seeing reinforces our confidence in our calendar 2012 earnings goal of at least $4.20 per share, and with continued modest improvement in the economy, we could very well outperform that objective."
Adjusted operating margin for the quarter improved year-over-year to 12.3% from 11.0% and sequentially from 10.7%, driven by operating leverage on sales growth and continued cost discipline. Adjusted operating margin in the Distribution business segment improved sequentially for a fourth consecutive quarter to 11.5%.
Free cash flow for the quarter was strong at $113 million, driven by adjusted cash from operations of $171 million and disciplined capital expenditures. Net debt at the end of the quarter was $1.7 billion, reflecting more than $83 million in debt reduction during the quarter.