Valley National Gases Reports Third Quarter Earnings

Apr 24, 2001, 01:00 ET from Valley National Gases Incorporated

    WHEELING, W.Va., April 24 /PRNewswire Interactive News Release/ --
 Valley National Gases Incorporated (Amex:   VLG) reported today that net
 earnings for the third quarter ended March 31, 2001 were $.17 per diluted
 share, before the effect of charges related to the adoption of Statement of
 Financial Accounting Standards No.133 (SFAS No.133), compared to $.14 per
 diluted share for the quarter ended March 31, 2000.  Sales for the third
 quarter were $41.1 million, a 12% increase over the same quarter last year.
 Earnings before interest, taxes, depreciation and amortization (Ebitda)
 increased 11% over the prior year quarter to $7.0 million.  Sales for the nine
 months ended March 31, 2001 were $108.5 million, a 16% increase over the same
 period last year.  Ebitda for the nine months increased 16% to $18.4 million
 compared to the same period last year.
     Valley National Gases' President and Chief Executive Officer, Lawrence
 Bandi, commented, "We are extremely pleased with our growth in sales, as same
 store sales increased 10% over the prior year quarter.  This reflects
 continued strong momentum for the past seven quarters, exceeding industry
 performance.  Strong internal growth is an important element in our strategic
 thrust.  While Hardgoods have been affected by a softening economy, the colder
 winter, combined with our growth initiatives, has provided a positive impact
 on propane sales.  Our current product and market diversity continues to
 provide us with an excellent platform for performance and stability."
     Bandi further commented on Valley's efforts to improve performance
 stating, "Given the continued softness in our core business of industrial
 gases and welding supplies, we have instituted steps to reduce operating
 expenses.  These initiatives focus on actions to further leverage our existing
 operations, distribution routes and corporate overhead.  Our management team
 is committed to improving earnings, even in tough economic conditions, while
 providing exceptional service to our customers"
     Net sales increased $4.2 million for the quarter, compared to the prior
 year quarter, with acquisitions made in the last twelve months contributing
 $0.6 million of the increase.  Sales mix consisted of 65% from gases and
 cylinder income and 35% from hard goods, compared to 57% from gases and
 cylinder income and 43% from hard goods for the same period last year.
     Net earnings for the quarter increased 25% to $1.6 million before the
 effect of SFAS No.133, compared to $1.3 million for the same quarter last
 year.  Year to date net earnings before the effect of SFAS No.133, increased
 21% to $3.5 million compared to $2.9 million for the same period last year.
 Net earnings for the quarter ended March 31, 2001 were $.14 per diluted share,
 which includes charges of $.03 per diluted share related to the adoption of
 SFAS No.133, compared to $.14 per diluted share for the same quarter last
 year.  Net earnings for the nine months ended March 31, 2001 were $.35 per
 diluted share, which includes charges of $.02 per diluted share related to the
 adoption of SFAS No.133, compared to $.31 per diluted share for the nine
 months ended March 31, 2000.
     On July 1, 2000, the Company changed its method of accounting for
 financial instruments to comply with SFAS No.133.  The Company primarily uses
 interest rate swap agreements to reduce the potential impact of increases in
 interest rates on floating-rate long-term debt.  The current quarter and nine
 month results include an increase of interest expense of $559,000 and
 $336,000, respectively, to record changes in the fair market value of the
 Company's interest rate swap agreements.
     On January 17, 2001 the Company completed the acquisition of Burton
 French, Inc., an industrial gas and welding supply distributor located in
 Mansfield, Ohio, having annual sales of approximately $1.5 million.
     On April 2, 2001 the Company completed the purchase of two propane
 operations of Dixie Gas & Oil, Inc.  The operations are located in Franklin
 and Moorefield, West Virginia with combined annual sales of approximately
 $2.5 million.
     The Company has signed two letters of intent for the purchase of
 distributors of industrial, medical and specialty gases, welding equipment and
 supplies having combined annual sales of approximately $15 million.  One of
 these businesses is located in an area that represents a new growth market for
 the Company while the other would be a direct overlay of existing operations.
 The Company is in the process of finalizing definitive agreements with the
 sellers and anticipates finalizing the transactions in the next ninety days.
 
     Valley National Gases, with headquarters in Wheeling, West Virginia, is a
 leading packager and distributor of industrial, medical and specialty gases,
 welding equipment and supplies, propane and fire protection equipment.  Valley
 National Gases operates sixty locations in ten states, with seven production
 and distribution centers in the mid-Atlantic and mid-western regions of the
 United States.
 
     Forward-Looking Statements
     This release includes statements that are forward-looking as that term is
 defined by the Private Securities Litigation and Reform Act of 1995 or by the
 Securities and Exchange Commission in its rules, regulations and releases,
 including statements regarding the Company's ability to identify attractive
 acquisition targets and to successfully acquire new businesses and assimilate
 the operations of those businesses into its operations, its ability to finance
 such acquisitions and other factors described in the Company's reports,
 including Form 10-K dated June 30, 2000, filed by the Company with the
 Securities an Exchange Commission.  The Company intends that such forward-
 looking statements be afforded the protections provided by the safe harbor
 created by the Private Securities Litigation and Reform Act of 1995.
 
 
                       VALLEY NATIONAL GASES INCORPORATED
                             STATEMENT OF EARNINGS
                                  (unaudited)
 
                             Three Months Ended         Nine Months Ended
                                   March 31,                   March 31,
                               2001          2000         2001          2000
 
     Net Sales          $41,060,313   $36,822,963 $108,537,349   $93,651,030
     Cost of products sold
     (excluding depreciation
      and amortization)  20,441,576    18,654,262   52,884,377    46,150,300
     Gross Profit        20,618,737    18,168,701   55,652,972    47,500,730
     Operating and administrative
      expenses           13,790,806
    11,959,542   37,615,174    31,922,454
     Depreciation and
      amortization        2,509,861     2,542,404    7,599,821     6,955,265
     Total expenses      16,300,667    14,501,946   45,214,995    38,877,719
     Income from
      operations          4,318,070    3,666,755    10,437,977     8,623,011
     Interest expense (a) 2,167,641     1,476,451    4,974,415     3,772,359
     Other income           130,679        80,032      385,003       258,389
     Earnings before
      income taxes        2,281,108     2,270,336    5,848,565     5,109,041
     Provision for
      income taxes        1,003,687       998,948    2,573,368     2,247,978
     Net earnings        $1,277,421    $1,271,388   $3,275,197    $2,861,063
 
     Basic earnings per share $0.14        $ 0.14        $0.35        $ 0.31
     Diluted earnings
      per share               $0.14        $ 0.14        $0.35        $ 0.31
     Weighted average shares
     Basic                9,347,584     9,347,584    9,347,584     9,347,584
     Diluted              9,371,400     9,354,439    9,366,079     9,350,348
 
     (a)  On July 1, 2000, the Company adopted Statement of Financial
          Accounting Standards No. 133, "Accounting for Derivative Instruments
          and Hedging Activities" (SFAS No. 133).  The September 2000 quarter's
          results include a reduction of interest expense of $166,200, the
          December 2000 quarter's results include a reduction of interest
          expense of $56,650 and the March 2001 quarter's results include an
          increase of interest expense of $559,159 to record changes in the
          fair market value of the Company's interest rate swap agreements.
 
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SOURCE Valley National Gases Incorporated
    WHEELING, W.Va., April 24 /PRNewswire Interactive News Release/ --
 Valley National Gases Incorporated (Amex:   VLG) reported today that net
 earnings for the third quarter ended March 31, 2001 were $.17 per diluted
 share, before the effect of charges related to the adoption of Statement of
 Financial Accounting Standards No.133 (SFAS No.133), compared to $.14 per
 diluted share for the quarter ended March 31, 2000.  Sales for the third
 quarter were $41.1 million, a 12% increase over the same quarter last year.
 Earnings before interest, taxes, depreciation and amortization (Ebitda)
 increased 11% over the prior year quarter to $7.0 million.  Sales for the nine
 months ended March 31, 2001 were $108.5 million, a 16% increase over the same
 period last year.  Ebitda for the nine months increased 16% to $18.4 million
 compared to the same period last year.
     Valley National Gases' President and Chief Executive Officer, Lawrence
 Bandi, commented, "We are extremely pleased with our growth in sales, as same
 store sales increased 10% over the prior year quarter.  This reflects
 continued strong momentum for the past seven quarters, exceeding industry
 performance.  Strong internal growth is an important element in our strategic
 thrust.  While Hardgoods have been affected by a softening economy, the colder
 winter, combined with our growth initiatives, has provided a positive impact
 on propane sales.  Our current product and market diversity continues to
 provide us with an excellent platform for performance and stability."
     Bandi further commented on Valley's efforts to improve performance
 stating, "Given the continued softness in our core business of industrial
 gases and welding supplies, we have instituted steps to reduce operating
 expenses.  These initiatives focus on actions to further leverage our existing
 operations, distribution routes and corporate overhead.  Our management team
 is committed to improving earnings, even in tough economic conditions, while
 providing exceptional service to our customers"
     Net sales increased $4.2 million for the quarter, compared to the prior
 year quarter, with acquisitions made in the last twelve months contributing
 $0.6 million of the increase.  Sales mix consisted of 65% from gases and
 cylinder income and 35% from hard goods, compared to 57% from gases and
 cylinder income and 43% from hard goods for the same period last year.
     Net earnings for the quarter increased 25% to $1.6 million before the
 effect of SFAS No.133, compared to $1.3 million for the same quarter last
 year.  Year to date net earnings before the effect of SFAS No.133, increased
 21% to $3.5 million compared to $2.9 million for the same period last year.
 Net earnings for the quarter ended March 31, 2001 were $.14 per diluted share,
 which includes charges of $.03 per diluted share related to the adoption of
 SFAS No.133, compared to $.14 per diluted share for the same quarter last
 year.  Net earnings for the nine months ended March 31, 2001 were $.35 per
 diluted share, which includes charges of $.02 per diluted share related to the
 adoption of SFAS No.133, compared to $.31 per diluted share for the nine
 months ended March 31, 2000.
     On July 1, 2000, the Company changed its method of accounting for
 financial instruments to comply with SFAS No.133.  The Company primarily uses
 interest rate swap agreements to reduce the potential impact of increases in
 interest rates on floating-rate long-term debt.  The current quarter and nine
 month results include an increase of interest expense of $559,000 and
 $336,000, respectively, to record changes in the fair market value of the
 Company's interest rate swap agreements.
     On January 17, 2001 the Company completed the acquisition of Burton
 French, Inc., an industrial gas and welding supply distributor located in
 Mansfield, Ohio, having annual sales of approximately $1.5 million.
     On April 2, 2001 the Company completed the purchase of two propane
 operations of Dixie Gas & Oil, Inc.  The operations are located in Franklin
 and Moorefield, West Virginia with combined annual sales of approximately
 $2.5 million.
     The Company has signed two letters of intent for the purchase of
 distributors of industrial, medical and specialty gases, welding equipment and
 supplies having combined annual sales of approximately $15 million.  One of
 these businesses is located in an area that represents a new growth market for
 the Company while the other would be a direct overlay of existing operations.
 The Company is in the process of finalizing definitive agreements with the
 sellers and anticipates finalizing the transactions in the next ninety days.
 
     Valley National Gases, with headquarters in Wheeling, West Virginia, is a
 leading packager and distributor of industrial, medical and specialty gases,
 welding equipment and supplies, propane and fire protection equipment.  Valley
 National Gases operates sixty locations in ten states, with seven production
 and distribution centers in the mid-Atlantic and mid-western regions of the
 United States.
 
     Forward-Looking Statements
     This release includes statements that are forward-looking as that term is
 defined by the Private Securities Litigation and Reform Act of 1995 or by the
 Securities and Exchange Commission in its rules, regulations and releases,
 including statements regarding the Company's ability to identify attractive
 acquisition targets and to successfully acquire new businesses and assimilate
 the operations of those businesses into its operations, its ability to finance
 such acquisitions and other factors described in the Company's reports,
 including Form 10-K dated June 30, 2000, filed by the Company with the
 Securities an Exchange Commission.  The Company intends that such forward-
 looking statements be afforded the protections provided by the safe harbor
 created by the Private Securities Litigation and Reform Act of 1995.
 
 
                       VALLEY NATIONAL GASES INCORPORATED
                             STATEMENT OF EARNINGS
                                  (unaudited)
 
                             Three Months Ended         Nine Months Ended
                                   March 31,                   March 31,
                               2001          2000         2001          2000
 
     Net Sales          $41,060,313   $36,822,963 $108,537,349   $93,651,030
     Cost of products sold
     (excluding depreciation
      and amortization)  20,441,576    18,654,262   52,884,377    46,150,300
     Gross Profit        20,618,737    18,168,701   55,652,972    47,500,730
     Operating and administrative
      expenses           13,790,806
    11,959,542   37,615,174    31,922,454
     Depreciation and
      amortization        2,509,861     2,542,404    7,599,821     6,955,265
     Total expenses      16,300,667    14,501,946   45,214,995    38,877,719
     Income from
      operations          4,318,070    3,666,755    10,437,977     8,623,011
     Interest expense (a) 2,167,641     1,476,451    4,974,415     3,772,359
     Other income           130,679        80,032      385,003       258,389
     Earnings before
      income taxes        2,281,108     2,270,336    5,848,565     5,109,041
     Provision for
      income taxes        1,003,687       998,948    2,573,368     2,247,978
     Net earnings        $1,277,421    $1,271,388   $3,275,197    $2,861,063
 
     Basic earnings per share $0.14        $ 0.14        $0.35        $ 0.31
     Diluted earnings
      per share               $0.14        $ 0.14        $0.35        $ 0.31
     Weighted average shares
     Basic                9,347,584     9,347,584    9,347,584     9,347,584
     Diluted              9,371,400     9,354,439    9,366,079     9,350,348
 
     (a)  On July 1, 2000, the Company adopted Statement of Financial
          Accounting Standards No. 133, "Accounting for Derivative Instruments
          and Hedging Activities" (SFAS No. 133).  The September 2000 quarter's
          results include a reduction of interest expense of $166,200, the
          December 2000 quarter's results include a reduction of interest
          expense of $56,650 and the March 2001 quarter's results include an
          increase of interest expense of $559,159 to record changes in the
          fair market value of the Company's interest rate swap agreements.
 
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                http://tbutton.prnewswire.com/prn/11690X11078825
 
 SOURCE  Valley National Gases Incorporated