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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
October 29, 1998
AIRGAS, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 1-9344 56-0732648
_______________ _______________________ ________________
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
259 North Radnor-Chester Road, Suite 100
Radnor, PA 19087-5283
_________________________________________
(Address of principal executive offices)
Registrant's telephone number, including area code: (610) 687-5253
_____________
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Item 5. Other Events.
____________
On October 29, 1998, Airgas, Inc. reported its earnings for the second
quarter and six months ended September 30, 1998, as described in the press
release attached as Exhibit 99 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
__________________________________________________________________
(a) None
(b) None
(c) Exhibits.
99 Press Release dated October 29, 1998
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Signatures
__________
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AIRGAS, INC.
BY: /s/ Scott M. Melman
_______________________
Vice President &
Chief Financial Officer
DATED: October 30, 1998
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EXHIBIT 99.1
For More Information:
Scott Melman
(610) 902-6207
AIRGAS, INC. REPORTS SECOND QUARTER RESULTS
- SALES UP 10% IN QUARTER
- AFTER-TAX CASH FLOW UP 8% IN QUARTER
- REPOSITIONING EXPENSES CONTINUE TO IMPACT PROFITS
RADNOR, Pennsylvania, October 29, l998 -- Airgas, Inc. (NYSE-ARG)
today reported sales of $397 million for the quarter ended September 30,
1998, an increase of 10% from $360 million in the second quarter of last
year. After-tax cash flow (net earnings plus depreciation, amortization
and deferred income taxes) increased 8% to $35 million, or $.49 per diluted
share, compared to $32.4 million, or $.46 per diluted share, for the same
quarter last year. Net earnings for the second quarter of fiscal 1999 were
$10.5 million, or $.15 per diluted share, compared to $11.3 million
(excluding non-recurring gains), or $.16 per diluted share, a year ago.
Including non-recurring gains, net earnings for the second quarter ended
September 30, 1997, were $21.7 million, or $.31 per diluted share.
For the six months ended September 30, 1998, sales increased 15% to
$797 million compared to sales of $692 million in the same period last
year. After-tax cash flow increased 8% to $69.9 million, or $.97 per
diluted share, for the six months ended September 30, 1998, compared to
$64.7 million, or $.92 per diluted share, in the same period last year.
Net earnings were $21.2 million, or $.29 per diluted share (excluding non-
recurring gains), for the six months ended September 30, 1998, compared to
net earnings of $23.5 million, or $.34 per diluted share (excluding non-
recurring gains), in the same period a year ago.
Direct repositioning expenditures, primarily for computer conversions
and upgrades, facility-related costs and personnel expenses, impacted
earnings by approximately $4.6 million, or $.04 per diluted share, and $8.4
million, or $.07 per diluted share, in the three and six month periods
ended September 30, 1998, respectively.
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Peter McCausland, Airgas' Chairman and Chief Executive Officer, said
"This was another quarter of important progress toward our goal of becoming
a multi-billion dollar, world-class, distribution company. Sales increased
10%, and cash flow 8%, over last year's quarter. Considering the
challenging economic environment, severe weather impacting our Gulf coast
operations and the expense and distraction of our repositioning efforts, we
were especially pleased to see continuing cash flow growth and a 6%
increase in gas/rent same-store sales. Overall, Distribution same-store
sales increased 2% in the quarter. While profits continue to be impacted
by direct and indirect repositioning expenses, our Repositioning Airgas For
Growth initiative is on schedule."
Airgas, Inc. is the largest distributor of industrial, medical and
specialty gases and related equipment in the United States. Its
distributor network includes over 700 locations in 44 states.
Forward-Looking Statements
This press release may contain statements that are forward-looking, as
that term is defined by the Private Securities Litigation Reform Act of
1995 or by the Securities and Exchange Commission in its rules, regulations
and releases. Airgas intends that such forward-looking statements be
subject to the safe harbors created thereby. All forward-looking
statements are based on current expectations regarding important risk
factors, and the making of such statements should not be regarded as a
representation by the Company or any other person that the results
expressed therein will be achieved. Important factors that could cause
actual results to differ materially from those contained in any forward-
looking statement include underlying market conditions, continued growth in
same-store sales, costs and potential disruptive effects of the
"Repositioning for Growth" initiative, implementation of information
technology projects, any potential problems relating to Year 2000 matters,
the success and timing of intended divestitures and other factors described
in the Company's reports, including Form 10-Q dated June 30, 1998, filed by
the Company with the Securities and Exchange Commission.
Consolidated statements of earnings and consolidated condensed balance
sheets follow on pages 3, 4 and 5.
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AIRGAS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
Net sales:
Distribution $288,997 $268,168 $580,959 $539,437
Direct Industrial 65,211 61,216 133,802 98,061
Manufacturing 42,384 30,972 82,604 54,270
Total net sales 396,592 360,356 797,365 691,768
Costs and expenses:
Cost of products sold (excluding
depreciation, depletion and
amortization)
Distribution 144,725 135,011 291,402 272,474
Direct Industrial 48,064 44,966 98,738 70,971
Manufacturing 16,063 14,404 34,208 25,690
Selling, distribution and
administrative expenses 134,201 114,199 265,452 219,542
Depreciation, depletion and
amortization 21,748 18,776 43,345 36,591
Special items (a),(b) - (14,500) (1,000) (14,500)
Total costs and expenses 364,801 312,856 732,145 610,768
Operating income:
Distribution 25,143 27,182 52,799 55,876
Direct Industrial 929 1,343 1,813 2,448
Manufacturing 5,719 4,475 9,608 8,176
Special items (a),(b) - 14,500 1,000 14,500
Total operating income 31,791 47,500 65,220 81,000
Interest expense, net (15,720) (13,670) (30,526) (25,778)
Other income, net 682 1,573 870 2,046
Equity in earnings of unconsolidated
affiliates 1,222 434 1,976 319
Minority interest 27 (309) (39) (618)
Earnings before income taxes 18,002 35,528 37,501 56,969
Income tax expense 7,522 13,853 15,746 23,068
Net earnings $ 10,480 $ 21,675 $ 21,755 $ 33,901
Net earnings
(excluding non-recurring gains)(c) $ 10,480 $ 11,268 $ 21,180 $ 23,494
Per share data:
Basic earnings per share $ .15 $ .32 $ .31 $ .50
Diluted earnings per share $ .15 $ .31 $ .30 $ .48
Per share data:
(excluding non-recurring gains)(c)
Basic earnings per share $ .15 $ .16 $ .30 $ .35
Diluted earnings per share $ .15 $ .16 $ .29 $ .34
Weighted average shares outstanding:
Basic 70,000 68,530 70,100 67,700
Diluted 71,700 70,950 71,800 70,100
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(a)The results for the second quarter and year-to-date ended September 30,
1997 include a $14.5 million ($9.4 million after-tax) gain from a partial
recovery of refrigerant losses.
(b)Represents the reversal of $1 million excess reserves that were established
at March 31, 1998 in connection with the divestiture of two non-core
businesses.
(c)The results for the six months ended September 30, 1998 excluded the effect
of the $1 million ($570 thousand after-tax) reversal of excess reserves
related to the first quarter divestiture of two non-core businesses.
The results for the second quarter and year-to-date ended September 30,
1997, excluded the after-tax effect of the gain from partial recovery of
refrigerant losses of $9.4 million (see footnote (a)) and the after-tax
gain of $980 thousand related to the sale of a non-core business.
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AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
September 30, March 31,
1998 1998
ASSETS
Trade accounts receivable, net $ 204,833 $ 186,342
Inventories 165,863 154,937
Prepaids and other current assets 25,042 25,555
TOTAL CURRENT ASSETS 395,738 366,834
Property, plant and equipment, net 715,142 687,304
Goodwill, net 431,460 410,753
Other non-current assets, net 177,691 176,583
TOTAL ASSETS $ 1,720,031 $ 1,641,474
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 14,064 $ 12,150
Accounts payable, trade 83,721 84,602
Accrued expenses and other current liabilities 113,304 128,806
TOTAL CURRENT LIABILITIES 211,089 225,558
Long-term debt 906,356 830,845
Deferred income taxes 129,266 121,356
Other non-current liabilities 35,139 36,842
Stockholders' equity 438,181 426,873
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,720,031 $ 1,641,474
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