VLG Valley Natl Gases

Valley National Gases Reports Improved Earnings for First Quarter WASHINGTON, Pa., Oct. 28 /PRNewswire-FirstCall/ -- Valley National Gases Incorporated reported today that net earnings for the first quarter ended September 30, 2003 were $.07 per diluted share, compared to $.01 per diluted share for the quarter ended September 30, 2002. Sales for the first quarter were $32.4 million, a 3% decrease from the same quarter last year. Net cash provided by operating activities was $2.0 million, resulting in a reduction of debt of $1.0 million for the quarter. Valley National Gases' Chief Executive Officer, William Indelicato, commented, "Although hard good sales continue to be sluggish, we were able to offset the decrease in sales and gross profit with reduced operating expenses. Our primary focus continues to be the improvement in operating efficiency." Net sales decreased $1.0 million for the quarter, compared to the prior year quarter. Same store sales decreased $1.1 million or 3.4%. Same store propane sales increased $1.1 million reflecting $0.6 million in price increase and $0.5 million in volume increase. Hard good sales were off $1.8 million from the prior year quarter on a same store basis, reflecting softness in the economy and the conscious loss of certain higher volume, very low margin business. Operating expenses decreased $0.4 for the quarter in comparison to the same quarter last year. Interest expense decreased $0.6 million for the quarter due to reduced outstanding debt resulting from continuing emphasis on repayment and increased market value of interest rate swap agreements. Valley National Gases, with headquarters in Washington, Pennsylvania, 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-five locations in eleven states. A conference call will be held on Wednesday, October 29, 2003 at 11:00 AM Eastern Standard Time, hosted by the Chief Executive Officer, the President and the Chief Financial Officer, to discuss the first quarter earnings and the outlook on performance. The teleconference will be available by calling 800-215-6519. A replay of the teleconference will be available for one week. To listen, call 800-633-8284 and enter pass code 21163317. The first quarter earnings release will be available on the Investor Information page on the Company's website at http://www.vngas.com/ . VALLEY NATIONAL GASES INCORPORATED STATEMENT OF EARNINGS (Amounts in thousands except per share data) (unaudited) Three Months Ended September 30, 2003 2002 Net Sales $32,434 $33,453 Cost of products sold (excluding depreciation and amortization) 14,678 15,395 Gross Profit 17,756 18,058 Operating and administrative expenses 13,502 13,903 Depreciation and amortization 1,849 1,962 Total expenses 15,351 15,865 Income from operations 2,405 2,193 Interest expense (a) 1,481 2,097 Other income 82 82 Earnings before income taxes 1,006 178 Provision for income taxes 392 74 Net earnings $614 $104 Basic earnings per share $ 0.07 $ 0.01 Diluted earnings per share $ 0.07 $ 0.01 Weighted average shares Basic 9,357 9,348 Diluted 9,388 9,404 (a) The September 2003 quarter results include a decrease in interest expense of $31 and the 2002 quarter results include an increase in interest expense of $350 to record changes in the fair market value of the Company's interest rate swap agreements. DATASOURCE: Valley National Gases Incorporated CONTACT: Robert D. Scherich of Valley National Gases, +1-724-228-3000, or Web site: http://www.vngas.com/

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