Send us Feedback

VALLEY NATIONAL GASES (VLG)
Analysis
SUMMARY
BULLS
BEARS
TOPICS
Data
DATA CENTRAL
STOCK CHART
Financials
SEC FILINGS
BALANCE
INCOME
CASH FLOW

VLG » Topics » Growth Strategy

This excerpt taken from the VLG 10-K filed Sep 28, 2006.
Growth Strategy
 
We intend to capitalize on the trend toward consolidation in both the packaged gases and propane industries. Our improved financial position and operating efficiency, achieved through the earnings and operations improvement plan we implemented two years ago, position us to resume the acquisition strategy that has, throughout our history, been our primary growth vehicle. The key elements of our growth strategy include the following:
 
  •  Grow through acquisitions.  Prior to fiscal 2003, acquisitions were the principal means of our growth. From fiscal 1997, the year of our initial public offering, through fiscal 2006, we completed over 33 acquisitions and grew from approximately $74 million in annual revenue to approximately $211 million in annual revenue. We believe our size and geographic reach, along with the fragmented competition in both the packaged gas and propane markets, position us well for continued growth. To implement this strategy we:
 
  •  Focus on “tuck-in” acquisitions.  We focus our acquisition efforts on small packaged gas and propane distributors that operate in, or adjacent to, the geographic markets we serve. We believe that the numerous remaining small distributors of both packaged gas and propane in these markets present significant opportunities for additional acquisitions.
 
On December 1, 2005, Valley acquired United Propane Services, LLC., a propane distributor with a single operating location, plus two satellite storage locations in north-central Pennsylvania, for a purchase price of $2.3 million. In calendar year 2004, United had sales of approximately $2.2 million.
 
On September 1, 2006, Valley acquired Industrial Air Products Corporation, a distributor of packaged industrial gases and welding supplies from two locations in Florida. Valley acquired all of the common


3

Table of Contents

stock of Industrial Air Products for a purchase price of $3.0 million. For the twelve months ended May 31, 2006, Industrial Air Products reported sales of $2.8 million.
 
  •  Pursue selective acquisitions to expand geographic reach.  We selectively consider acquisitions of larger, independent, regional packaged gas and non-pipeline propane distributors where such an acquisition would enable us to expand our presence into a new region of the United States and where the acquisition meets our criteria.
 
On October 31, 2005, Valley acquired Reynolds Welding Supply Company, a distributor of packaged industrial gases and welding supplies from five locations in Minnesota and one in southeastern South Dakota. Valley acquired all of the common stock of Reynolds and its wholly owned subsidiaries, Welders Supply Company, Inc. and Twin City Oxygen Company, for a purchase price of approximately $21 million. For its fiscal year ended December 31, 2004, Reynolds reported aggregate sales of $19.5 million, approximately 53% of which was from packaged industrial gases and cylinder rental and 47% was from hard goods and welding supplies.
 
  •  Grow operating profits.  We believe that the continued implementation of our process improvement strategy affords us the opportunity to increase our profitability by taking the following actions:
 
  •  standardizing our marketing, pricing, staffing and operating practices throughout our network to offer consistent levels of service, gain economies of scale and achieve operating efficiencies; and
 
  •  improving our workforce through technical training and creating an environment emphasizing a high level of customer service.
 
  •  Enhance internal revenue growth.  We believe that we can supplement our growth through acquisitions by selling a broader range of products to existing customers, by expanding our sales of small bulk gases to new and existing customers and by taking advantage of our size and geographic reach to gain market share with some multi-location accounts through better coordination of our marketing and distribution system.
 

"Growth Strategy" elsewhere:

Hiland Partners, LP (HLND)
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki