<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ x ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file numbers: 33-25419 and 33-64058
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Airgas, Inc. 401(k) Plan
B. Name of the issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Airgas, Inc.
259 North Radnor-Chester Road, Suite 100
Radnor, PA 19087-5283
<PAGE> 2
REQUIRED INFORMATION
(1) Financial Statements:
The following financial statements, including Independent
Auditors' Report thereon of Airgas, Inc. 401(k) Plan, are submitted
herewith:
- Statements of Net Assets Available for Benefits as of
December 31, 1999 and 1998
- Statements of Changes in Net Assets Available for Benefits for
the years ended December 31, 1999 and 1998
- Notes to Financial Statements
- Item 27(a) - Schedule of Assets Held for Investment Purposes
The schedule for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission is
included in the aforementioned financial statements of the Airgas,
Inc. 401(k) Plan.
(2) Exhibits:
23.1 Consent of KPMG LLP
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Administrator has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
AIRGAS, INC. 401(k) PLAN
(Name of Plan)
BY:/s/ 401(k) Plan Committee
BY:/s/ Roger F. Millay
Roger F. Millay
Senior Vice President and
Chief Financial Officer
BY:/s/ Todd R. Craun
Todd R. Craun
General Counsel and Secretary
DATED: June 26, 2000
<PAGE> 4
AIRGAS, INC. 401(k) PLAN
Financial Statements and
Supplementary Schedule
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE> 5
AIRGAS, INC. 401(k) PLAN
Table of Contents
Page
Independent Auditors' Report 6
Statements of Net Assets Available for Benefits,
December 31, 1999 and 1998 7
Statements of Changes in Net Assets Available for Benefits,
Years ended December 31, 1999 and 1998 8
Notes to Financial Statements 9
Schedule:
1 Item 27(a) - Schedule of Assets Held for Investment
Purposes, December 31, 1999 16
<PAGE> 6
Independent Auditors' Report
The Plan Administrator
Airgas, Inc. 401(k) Plan:
We have audited the accompanying statements of net assets available
for benefits of the Airgas, Inc. 401(k) Plan as of December 31,
1999 and 1998, and the related statements of changes in net assets
available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for
benefits of the Airgas, Inc. 401(k) Plan at December 31, 1999 and
1998, and the changes in net assets available for benefits for the
years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
schedule of assets held for investment purposes as of and for the
year ended December 31, 1999, is presented for the purpose of
additional analysis and is not a required part of the basic
financial statements but is supplementary information required by
the Department of Labor's Rules and Regulations for Reporting and
Disclosure Under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the
Plan's Management. The supplemental schedule has been subjected to
the auditing procedures applied in the audits of the basic
financial statements, and in our opinion, is fairly stated in all
material respects in relation to the basic financial statements
taken as a whole.
/s/ KPMG LLP
June 8, 2000
<PAGE> 7
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
<CAPTION>
1999 1998
<S> <C> <C>
Investments $ 126,022,429 $ 108,559,058
Receivables:
Employee contributions 911,630 899,864
Employer contributions 265,241 263,386
Total receivables 1,176,871 1,163,250
Participant loans receivable 5,350,628 5,052,738
Net assets available for benefits $ 132,549,928 $ 114,775,046
See accompanying notes to financial statements.
</TABLE>
<PAGE> 8
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1999 and 1998
<CAPTION>
1999 1998
<S> <C> <C>
Additions to net assets attributable to:
Investment income:
Net appreciation (depreciation) in fair
value of investments $ 9,060,042 $ (3,262,089)
Interest and dividends 5,907,679 5,760,104
Total investment income 14,967,721 2,498,015
Contributions:
Employee 12,827,724 13,907,080
Employer 4,879,037 6,487,675
Total contributions 17,706,761 20,394,755
Disbursements:
Benefits paid to participants (13,348,327) (8,470,897)
Transfer to other benefit plans (4,696,079) --
Administrative fees (104,644) (96,348)
Total disbursements (18,149,050) (8,567,245)
Transfers from other benefit plans 3,249,450 5,040,096
Net change in plan assets 17,774,882 19,365,621
Net assets available for benefits:
Beginning of year 114,775,046 95,409,425
End of year $ 132,549,928 $ 114,775,046
See accompanying notes to financial statements.
</TABLE>
<PAGE> 9
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1)Description of the Plan
The following description of the Airgas, Inc. 401(k) Plan (the Plan)
provides general information only. Participants should refer to the Plan
agreement for more complete information.
(a) General
The Plan is a defined contribution Plan covering substantially all
employees of Airgas, Inc. and subsidiaries (the Company). Included in
the assets of the Plan are contribution rollovers from benefit plans of
acquired companies, where applicable. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
In September 1999, the American Institute of Certified Public
Accountants issued Statement of Position (SOP) 99-3, "Accounting For and
Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters." SOP 99-3 simplifies the disclosure for certain
investments and is effective for Plan years ending after December 15,
1999, with earlier application encouraged. The Plan adopted SOP 99-3
during the Plan year ended December 31, 1999. Accordingly, information
previously required to be disclosed about participant-directed fund
investment programs is not presented in the Plan's 1999 financial
statements. The Plan's 1998 financial statements have been
reclassified to conform with the current year's presentation.
(b) Contributions
Employee:
The Plan permits a participant to defer up to 15% of eligible
compensation. The amount of deferred compensation is treated as a
salary reduction and is not subject to federal income tax until
withdrawn from the Plan. In no event will the contribution exceed
maximum allowable contributions as prescribed by the Internal Revenue
Service.
Employer:
Contributions to the Plan by the Company are made on a matched basis
and at a rate of 50% of participant deferred compensation. The
employer match is applied on employee contributions of up to 4% of
eligible compensation (i.e., maximum employer match is 2% of eligible
compensation). Plan participants are eligible for Company matching
contributions upon completing a consecutive 12-month period of
employment in which an employee is credited with at least 1,000 hours
of service.
<PAGE> 10
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
In addition to the required Company match, the Company may elect to
make discretionary contributions as determined by the Board of
Directors. The Company made profit sharing discretionary contributions
of $1,904,532 and $3,409,641 for the years ended December 31, 1999 and
1998, respectively. The Company determines its discretionary
contribution based on the overall profitability of the Company. Of
that amount, the Company allocates a portion to each subsidiary based
on that subsidiary's profitability. Each subsidiary then allocates its
profit sharing to individual participants based on their proportionate
earnings.
(c) Participant Accounts
Contributions are invested as directed by each participant in 12
separate investment funds. Each participant may designate, by written
notice to the Plan administrator, how the contributions to his or her
account are to be allocated among the 12 funds. Participants are
required to allocate contributions to the funds in increments of 1% of
total contributions. In the event a participant fails to submit a
written notice of allocation, contributions will be invested in the
Investment Contract Fund. In addition to the above initial election,
participants may elect, by calling The Vanguard Group (Vanguard), to
transfer, in 1% increments of the total funds credited to their
account, monies among the investment funds. Interest, dividends and
other income earned by the investment funds, net of administrative
fees, are reinvested in the same fund. Such amounts are allocated to
participants based upon the proportion of a participant's balance to
the total fund balance.
(d) Participant Loans
The Plan administrator may, upon the application of a participant,
direct the Trustee to make a loan to such a participant. The maximum
the participant may borrow is limited to the lesser of 50% of the
participant's Plan balance or $50,000. The minimum loan amount is
$1,000. The loan will bear interest at a rate equal to prime plus 2%
and shall provide for periodic repayment over a reasonable period of
time not to exceed five years for general purpose loans and 30 years
for principal residence loans. The prime rate at December 31, 1999 was
8.5%.
(e) Vesting
Participants are immediately vested in all contributions. In addition,
all earnings on such investments are fully vested.
<PAGE> 11
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(f) Payment of Benefits
Upon retirement, death or termination of service, participants or
beneficiaries are entitled to a distribution equal to the total value
of their accounts. Such distributions are generally payable in cash.
Participants experiencing serious financial hardships may be entitled
to a distribution upon approval by the Plan administrator.
(g) Transfer to Other Benefit Plans
The transfer to other benefit plans during 1999 primarily resulted from
Plan disbursements in connection with the fiscal 1999 divestiture of
the Company's Calcium Carbide and Carbon products operations.
(h) Administrative Expenses
All administrative expenses have been paid by the Plan participants.
(2) Merger of 401(k) Plans
During 1999 and 1998, in connection with acquisitions completed by the
Company, there were transfers in from certain 401(k) plans.
(3) Summary of Significant Accounting Policies
(a) Basis of Accounting
The accompanying financial statements of the Plan have been prepared on
the accrual basis of accounting and present net assets available for
benefits and changes in those assets.
(b) Investments
Investments in the Airgas Common Stock Fund are valued at market value
based upon closing prices at the Plan year-end. The fair values of the
Vanguard funds are based on the net asset values per share at year-end.
<PAGE> 12
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
Purchases and sales of investments are recorded on a trade-date basis.
Interest income is accrued when earned. Dividend income is recorded on
the ex-dividend date. Capital gain distributions are included in
dividend income.
Investment options as of December 31, 1999, were as follows:
The Airgas Common Stock Fund invests in Airgas, Inc. common stock to
provide the possibility of long-term growth through increases in the
value of the stock. At December 31, 1999, 3,376 Plan participants were
invested in the Airgas Common Stock Fund. The stock value per share
was $9.50 at December 31, 1999.
The Vanguard Explorer Fund seeks to provide long-term growth of capital
by investing in a diversified group of small-company stocks with
prospect for above-average growth. At December 31, 1999, the Vanguard
Explorer Fund had 672 Plan participants invested in the fund. The value
per share was $68.62 at December 31, 1999.
The Vanguard International Growth Fund seeks to provide long-term
growth of capital by investing in stock of high-quality, seasoned
companies based outside the United States. Stocks are selected from
more than 15 countries. At December 31, 1999, the Vanguard
International Growth Fund had 739 Plan participants invested in the
fund. The value per share was $22.49 at December 31, 1999.
Vanguard U.S. Growth Fund seeks to provide long-term growth of capital
by investing in large, high-quality, seasoned U.S. companies with
records of exceptional growth and above-average prospects for future
growth. At December 31, 1999, the Vanguard U.S. Growth Fund had 3,217
Plan participants invested in the fund. The value per share was $43.53
at December 31, 1999.
The Vanguard 500 Index Fund seeks to provide long-term growth of
capital and income from dividends by holding each of the 500 stocks
that make up the unmanaged Standard & Poor's 500 Composite Stock Price
Index, a widely recognized benchmark of U.S. market performance. At
December 31, 1999, the Vanguard 500 Index Fund had 1,811 Plan
participants invested in the fund. The value per share was $135.33 at
December 31, 1999.
The Vanguard Wellington Fund seeks to provide income and long-term
growth of capital, without undue risk to capital, by investing
approximately 65% of its assets in stocks and the remaining 35% in
bonds. At December 31, 1999, the Vanguard Wellington Fund had 2,408
Plan participants invested in the fund. The value per share was $27.96
at December 31, 1999.
<PAGE> 13
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
The Vanguard LifeStrategy Growth Fund seeks to provide long-term growth
of capital and income by investing in four Vanguard funds: a domestic
stock fund; an international stock fund; a bond fund; and an asset
allocation fund. The Portfolio's asset allocation ranges are expected
to be 65% to 90% stocks, 10% to 35% bonds, and 0% to 25% cash
investments. At December 31, 1999, the Vanguard LifeStrategy Growth
Fund had 960 Plan participants invested in the fund. The value per
share was $21.41 at December 31, 1999.
The Vanguard LifeStrategy Moderate Growth Fund seeks to provide income
and long-term growth of capital and income by investing in four
Vanguard funds: a domestic stock fund; an international stock fund; a
bond fund; and an asset allocation fund. The Portfolio's asset
allocation ranges are expected to be 45% to 70% stocks, 30% to 55%
bonds, and 0% to 25% cash investments. At December 31, 1999, the
Vanguard LifeStrategy Moderate Growth Fund had 642 Plan participants
invested in the fund. The value per share was $18.18 at December 31,
1999.
The Vanguard LifeStrategy Conservative Growth Fund seeks to provide
income and moderate long-term growth of capital and income by investing
in five Vanguard funds: a domestic stock fund; international stock
fund; two bond funds; and an asset allocation fund. The Portfolio's
asset allocation ranges are expected to be 25% to 50% stocks, 50% to
75% bonds, and 0% to 25% cash investments. At December 31, 1999, the
Vanguard LifeStrategy Conservative Growth Fund had 349 Plan
participants invested in the fund. The value per share was $15.10 at
December 31, 1999.
The Vanguard LifeStrategy Income Fund seeks to provide a high level of
income by investing in four Vanguard funds: a stock fund; two bond
funds; and an asset allocation fund. The Portfolio's asset allocation
ranges are expected to be 5% to 30% stocks, 70% to 95% bonds, and 0% to
25% cash investments. At December 31, 1999, the Vanguard LifeStrategy
Income Fund had 220 Plan participants invested in the fund. The value
per share was $12.82 at December 31, 1999.
The Vanguard Total Bond Market Index Fund seeks to provide a high level
of interest income by attempting to match the performance of the
unmanaged Lehman Brothers Aggregate Bond Index, a widely recognized
measure of the entire taxable U.S. bond market. At December 31, 1999,
the Vanguard Total Bond Market Index Fund had 428 Plan participants
invested in the fund. The value per share was $9.56 at December 31,
1999.
The Retirement Savings Trust seeks stability of principal and a high
level of current income consistent with a two-to three-year average
maturity. The trust is a tax-exempt collective trust invested
primarily in investment contracts issued by insurance companies and
commercial banks, and similar types of fixed-principal investments.
The trust intends to maintain a constant net asset value of $1.00 per
share. At December 31, 1999, 3,239 Plan participants invested in the
trust.
<PAGE> 14
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(c) Use of Estimates
The preparation of the financial statements in accordance with
generally accepted accounting principles requires the Plan
administrator to make estimates that affect the reported amounts of
assets and liabilities at the date of the financial statements and the
reported amounts included in the statement of changes in net assets
available for Plan benefits. Actual results could differ from those
estimates.
(4) Investments
The average cost method is followed in determining the cost of investments
sold. Purchases and sales of securities are recorded on a trade date
basis.
The following investments represent 5% or more of the net assets available
for benefits at December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Airgas Common Stock Fund $21,752,826 $20,933,129
Vanguard U.S. Growth Fund 39,044,068 31,307,598
Vanguard 500 Index Fund 13,529,546 8,693,400
Vanguard Wellington Fund 15,676,581 16,088,469
Retirement Savings Trust 22,313,888 --
Investment Contract Fund -- 16,514,363
</TABLE>
During 1999, the Investment Contract Fund was liquidated and funds were
transferred to the Retirement Savings Trust.
During the year, the net appreciation (depreciation) in the fair value of
investments is as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Airgas Common Stock Fund $1,509,563 $(11,569,119)
Mutual Funds 7,550,479 8,307,030
Net appreciation (deprecation) in
fair value of investments $9,060,042 $ (3,262,089)
</TABLE>
<PAGE> 15
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(5) Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated January 23, 1996, that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC) and is therefore
exempt from federal income taxes. The Plan has been amended since
receiving the determination letter. However, the Plan administrator
believes that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC and continues to be
exempt from federal income taxes.
Subsequent to year-end, the Internal Revenue Service has re-affirmed their
determination with a letter dated January 31, 2000.
(6) Related Party Transactions
The Plan invests in shares of mutual funds managed by an affiliate of
Vanguard Fiduciary Trust Company (VFTC). VFTC acts as trustee for only
those investments as defined by the Plan. Transactions in such investments
qualify as party-in-interest transactions, but are not prohibited
transactions.
(7) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. Upon termination of
the Plan, participants would remain fully vested in all amounts credited to
their accounts under the Plan.
(8) Defaulted Loans
During the year ended December 31, 1999, there were 88 participants who
were in default of their loans, including 87 participants who are active
employees. Loans in the amount of $402,079 were in default and included in
the participant loans as of December 31, 1999.
During the year ended December 31, 1998, there were 121 terminated
employees who were in default of their loans and who were deemed to receive
distributions totaling $397,017 in 1998. As of December 31, 1998, there
were 47 participants who were active employees who were in default of their
loans. Loans in the amount of $172,103 were in default and included in
participant loans as of December 31, 1998.
<PAGE> 16 Schedule 1
<TABLE>
AIRGAS, INC. 401(k) PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1999
<CAPTION>
Number of
shares Investments Cost Fair value
<S> <C> <C>
Common stock:
2,289,771 Airgas Common Stock Fund $ 28,235,651 $ 21,752,826
Mutual funds:
31,209 Vanguard Explorer Fund 1,822,286 2,141,554
104,883 Vanguard International Growth Fund 1,966,341 2,358,818
896,946 Vanguard U.S. Growth Fund 27,650,938 39,044,068
99,974 Vanguard 500 Index Fund 10,662,633 13,529,546
560,679 Vanguard Wellington Fund 16,227,294 15,676,581
170,059 Vanguard LifeStrategy Growth Fund 3,093,657 3,640,971
151,863 Vanguard LifeStrategy Moderate Growth Fund 2,481,689 2,760,865
63,812 Vanguard LifeStrategy Conservative Growth Fund 913,323 963,561
50,628 Vanguard LifeStrategy Income Fund 645,948 649,051
124,550 Vanguard Total Bond Market Index Fund 1,253,551 1,190,700
Retirement Savings Trust, 5.89% 22,313,888 22,313,888
Employee loans, 7% to 12% 5,350,628 5,350,628
Total assets held for investment purpose $ 122,617,827 $ 131,373,057
</TABLE>
