4 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. 1 5 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. 2 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, 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 3 7 (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. 4 8 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 5