4 EXHIBIT 99.1 For More Information: James N. Borum Thomas C. Deas, Jr. (610) 687-5253 AIRGAS, INC. REPORTS CASH FLOW AND EARNINGS IN SECOND QUARTER RADNOR, Pennsylvania, October 23, l997 -- Airgas, Inc. (NYSE-ARG) today reported financial results for its second quarter ended September 30, l997. For the second quarter ended September 30, 1997, after-tax cash flow (net earnings plus depreciation, depletion, amortization and deferred income taxes), before non-recurring gains on the sale of a non-core business and a partial recovery of refrigerant losses, increased by 13% to a record $32.4 million, or $.46 per share, compared to $28.7 million, or $.42 per share for the same quarter last year. Sales increased 29% to $360.4 million from $278.7 million. Net earnings (before non-recurring gains) were $11.3 million, or $.16 per share, compared to $11.3 million, or $.17 per share, a year ago, principally the result of flat August sales in the Distribution Group. The UPS strike had a direct adverse effect on Airgas' distribution businesses with reduced shipments to customers and increased distribution expenses, as well as indirect effects, including slowdowns in our customers' businesses. Including a $1.5 million ( $980 thousand after-tax) gain on the sale of a non-core business, and a $14.5 million ($9.4 million after-tax) gain from the partial recovery of refrigerant losses, net earnings for the second quarter were $21.7 million, or $.31 per share. For the six months ended September 30, l997, after-tax cash flow (before non-recurring gains), increased 15% to a record $64.7 million, or $.92 per share, compared to $56.5 million, or $.84 per share in the same period last year. Net earnings (before non-recurring gains) increased to $23.5 million or $.34 per share, and sales increased 25% to $691.8 million. Net earnings were $22.5 million or $.33 per share, on sales of $552.8 million last year. Including the non-recurring gains, net earnings for the six months ended September 30, 1997, were $33.9 million, or $.48 per share. Peter McCausland, Airgas' Chairman and Chief Executive Officer, said "We continue to achieve strong cash flow growth while we simultaneously pursue an aggressive acquisition program, the build out of a logistics and information infrastructure and the repositioning of Airgas for internal growth. These investments will support the growth of our distribution sales through multiple channels and will make Airgas the leader in service and the low cost supplier to our customer segments. Over the last 4 1/2 years, we've acquired $950 million in annual sales in 135 separate transactions without taking any special charges for merger or integration expenses. During this period Airgas has maintained an annual compounded after-tax cash flow growth rate in excess of 25% by successfully integrating acquisitions andachieving significant improvements in operations. We continue to invest and manage with the building of a world-class, multi-billion dollar distribution company as our primary operating objective and incremental increases in our cash flow stream as our primary financial objective." The Company previously announced that its Board of Directors approved the repurchase of up to an additional 2,000,000 shares of Airgas common stock from time-to-time to offset share issuances for stock options, the Company's 5 Employee Stock Purchase Plan, and acquisitions. Together with previously granted authority, this increases the total repurchase program to a potential 2,646,000 shares. Airgas, Inc. is the largest distributor of industrial, medical and specialty gases and related equipment in North America. Its distributor network includes approximately 640 locations in 41 states, Canada and Mexico. Airgas can be visited on the Internet at http://www.airgas.com. 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. The Company 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. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, 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 risk factors include, but are not limited to, the Company's ability to consolidate and integrate new acquisitions, expenses associated with the Company's new ADI Division, the Company's ability to recover assets in connection with the fraudulent breach of contract related to refrigerant R-12 purchases and other factors described in the Company's 1997 Form 10-K filed with the Securities and Exchange Commission. Consolidated statements of earnings follow on page 3. 6 AIRGAS, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended September 30, September 30, 1997 1996 (a) 1997 1996 (a) ____ ________ ____ ________ Net sales: Distribution $268,168 $244,701 $539,437 $487,755 Direct Industrial 61,216 20,437 98,061 36,889 Manufacturing 30,972 13,574 54,270 28,166 _______ _______ _______ _______ Total net sales 360,356 278,712 691,768 552,810 _______ _______ _______ _______ Costs and expenses: Cost of products sold (excluding depreciation, depletion and amortization) Distribution 135,011 121,490 272,474 245,305 Direct Industrial 44,966 15,537 70,971 28,969 Manufacturing 14,404 8,110 25,690 17,215 Selling, distribution and administrative expenses 114,199 89,544 219,542 175,731 Depreciation, depletion and amortization 18,776 15,023 36,591 29,261 Recovery of refrigerant losses (b) (14,500) - (14,500) - _______ _______ _______ _______ Total costs and expenses 312,856 249,704 610,768 496,481 _______ _______ _______ _______ Operating income: Distribution 27,182 26,133 55,876 50,888 Direct Industrial 1,343 638 2,448 1,014 Manufacturing 4,475 2,237 8,176 4,427 Recovery of refrigerant losses (b) 14,500 - 14,500 - _______ _______ _______ _______ Total operating income 47,500 29,008 81,000 56,329 Interest expense, net (13,670) (9,753) (25,778) (18,034) Other income, net 1,573 70 2,046 351 Equity in earnings of unconsolidated affiliates 434 114 319 114 Minority interest (309) (152) (618) (381) _______ _______ _______ _______ Earnings before income taxes 35,528 19,287 56,969 38,379 Income tax expense 13,853 7,977 23,068 15,919 _______ _______ _______ _______ Net earnings $ 21,675 $ 11,310 $ 33,901 $22,460 Net earnings (excluding non-recurring gain and recovery of refrigerant losses)(c) $ 11,268 $ 11,310 $ 23,494 $22,460 ======= ======= ======= ====== Earnings per share $ .31 $ .17 $ .48 $ .33 ======= ======= ======= ====== 7 Earnings per share (excluding non-recurring gain and recovery of refrigerant losses) (c) $ .16 $ .17 $ .34 $ .33 ======= ======= ======= ====== Weighted average shares 70,950 67,660 70,100 67,350 ======= ======= ======= ====== (a) Certain reclassifications have been made to previously issued financial statements to conform to the current presentation. (b) 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. (c) The results for the second quarter and year-to-date ended September 30, 1997 excluding the after-tax effect of the gain from partial recovery of refrigerant losses noted in footnote (b) and the after-tax gain of $980 thousand related to the sale of a non-core business.