Airgas Provides Update on Fiscal 2013 Fourth Quarter Organic Sales Growth, Share Repurchases, and Potential Impact on Earnings

  Airgas Provides Update on Fiscal 2013 Fourth Quarter Organic Sales Growth,
  Share Repurchases, and Potential Impact on Earnings Guidance

Business Wire

RADNOR, Pa. -- March 21, 2013

Airgas, Inc. (NYSE: ARG), one of the nation’s leading suppliers of industrial,
medical, and specialty gases, and related products, today provided an update
on organic sales growth, its previously announced $600 million share
repurchase program, and the potential impact on its adjusted earnings guidance
for its fourth quarter ending March 31, 2013.

“Organic sales growth in our Distribution segment has been disappointing this
quarter,” said Executive Chairman Peter McCausland. “Although organic sales
growth in January was in-line with the low-single-digit growth assumption in
our fourth quarter guidance, organic sales growth for the month of February
was negative 2%. As a result, quarter-to-date organic sales growth through
February was flat compared to the prior year and roughly 2% to 3% behind our
guidance assumptions, with the shortfalls being volume-related and in both
gases and hardgoods.

“Sales to-date in the month of March have not improved appreciably over
February, and absent a strong finish in the next ten days, these
weaker-than-expected sales suggest that we may miss the low end of our
adjusted EPS* guidance of $1.18 by approximately 4%,” McCausland continued.
“We hope to make up some ground before the end of the month. However, given
the daily sales nature of our business and the limited visibility in the
economy, we cannot accurately predict at this time where we will land for the
quarter. If there are any material changes in our viewpoint, we will make an
announcement at that time.

“On a positive note, we have continued to realize SAP benefits as expected
during the quarter, and we have substantially completed our share repurchases.
The impact of the share repurchases in the current quarter will be immaterial
due the timing of the purchases and the pre-funding of the financing to take
advantage of the attractive debt markets,” added McCausland. “And, despite the
challenges we are facing and have been facing over the past few quarters in
this economic environment, we continue to be very optimistic about the
long-term prospects for the U.S. manufacturing and energy industries, as well
as non-residential construction, and our ability to leverage our unique value
proposition and unrivaled platform to drive growth.”

* See attached reconciliation of non-GAAP adjusted earnings per diluted share
guidance.

About Airgas, Inc.

Airgas, Inc. (NYSE: ARG), through its subsidiaries, is one of the nation’s
leading suppliers of industrial, medical and specialty gases, and hardgoods,
such as welding equipment and related products. Airgas is a leading U.S.
producer of atmospheric gases with 16 air separation plants, a leading
producer of carbon dioxide, dry ice, and nitrous oxide, one of the largest
U.S. suppliers of safety products, and a leading U.S. supplier of
refrigerants, ammonia products, and process chemicals. More than 15,000
employees work in approximately 1,100 locations, including branches, retail
stores, gas fill plants, specialty gas labs, production facilities and
distribution centers. Airgas also markets its products and services through
eBusiness, catalog and telesales channels. Its national scale and strong local
presence offer a competitive edge to its diversified customer base. For more
information, please visit www.airgas.com.

This press release contains statements that are forward looking, as that term
is defined by the Private Securities Litigation Reform Act of 1995 or by the
SEC in its rules, regulations and releases. These statements include, but are
not limited to: expectations related to adjusted earnings per diluted share
and organic sales growth in the fourth quarter of fiscal 2013, including
earnings per diluted share, sales in the month of March, and our optimism
about the long-term prospects for the U.S. manufacturing and energy
industries, as well as non-residential construction, and our ability to
leverage our unique value proposition and unrivaled platform to drive growth.
Forward-looking statements also include any statement that is not based on
historical fact, including statements containing the words "believes," "may,"
"plans," "will," "could," "should," "estimates," "continues," "anticipates,"
"intends," "expects," and similar expressions. We intend 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 should not be regarded as a representation by us or
any other person that the results expressed therein will be achieved. Airgas
assumes no obligation to revise or update any forward-looking statements for
any reason, except as required by law. Important factors that could cause
actual results to differ materially from those contained in any
forward-looking statement include: continued or increased disruption in our
helium supply chain; adverse changes in customer buying patterns resulting
from deterioration in current economic conditions; weakening in the operating
and financial performance of our customers, which could negatively impact our
sales and our ability to collect our accounts receivable; postponement of
projects due to economic developments; customer acceptance of price increases;
our ability to achieve anticipated acquisition synergies; supply cost
pressures; increased industry competition; our ability to successfully
identify, consummate, and integrate acquisitions; our continued ability to
access credit markets on satisfactory terms; significant fluctuations in
interest rates; increases in energy costs and other operating expenses eroding
planned cost savings; higher than expected implementation costs of the SAP
system; conversion or implementation problems related to the SAP system that
disrupt our business and negatively impact customer relationships; our ability
to achieve anticipated benefits enabled by our conversion to the SAP system;
higher than expected costs related to our Business Support Center transition;
the impact of tightened credit markets on our customers; the impact of changes
in tax and fiscal policies and laws; the potential for increased expenditures
relating to compliance with environmental regulatory initiatives; the impact
of new environmental, healthcare, tax, accounting, and other regulation; the
economic recovery in the U.S.; the effect of catastrophic events; political
and economic uncertainties associated with current world events; and other
factors described in the Company's reports, including its March 31, 2012 Form
10-K, subsequent Form 10-Q, and other Forms filed by the Company with the SEC.

Reconciliations of Non-GAAP Financial Measures (Unaudited)

Adjusted Earnings per Diluted Share Guidance

Reconciliations of adjusted earnings per diluted share guidance:

                Three      (Guidance Range)                (Guidance Range)
                 Months      Three Months Ending   Year        Year Ending
                 Ended       March 31, 2013        Ended       March 31, 2013
                 Mar. 31,                         Mar. 31,              
                 2012        Low        High       2012        Low         High
                                                                           
Earnings per     $ 1.12      $ 1.17     $ 1.23     $ 4.00      $ 4.40      $ 4.46
diluted share
                                                                           
Adjustments to
earnings per
diluted share:
Restructuring
and other
special            0.05        0.01       0.01       0.19        0.07        0.07
charges
(benefits),
net
Gain on sale       -           -          -          -           (0.07 )     (0.07 )
of businesses
Costs
(benefits)
related to         -           -          -          (0.06 )     -           -
unsolicited
takeover
attempt
Multi-employer
pension plan       -           -          -          0.04        -           -
withdrawal
charges
Income tax        (0.06 )    -        -        (0.06 )    -         -     
benefits
                                                                           
Adjusted
earnings per     $ 1.11     $ 1.18    $ 1.24    $ 4.11     $ 4.40     $ 4.46  
diluted share
Year-over-year                6    %    12   %                7     %    9     %
change

Guidance for adjusted earnings per diluted share excludes Business Support
Center restructuring and other special charges (benefits), net, and the gain
on the sale of businesses.

The Company believes its adjusted earnings per diluted share financial measure
provides investors meaningful insight into its earnings performance without
the impact of Business Support Center restructuring and other special charges
(benefits), net, the gain on the sale of businesses, costs (benefits) related
to Air Products’ unsolicited takeover attempt, multi-employer pension plan
withdrawal charges, and income tax benefits related to the LLC reorganization
and foreign tax liability true-up. Non-GAAP financial measures should be read
in conjunction with GAAP financial measures, as non-GAAP financial measures
are merely a supplement to, and not a replacement for, GAAP financial
measures. It should also be noted that the Company’s adjusted earnings per
diluted share financial measure may be different from adjusted earnings per
diluted share financial measures provided by other companies.

Contact:

Airgas, Inc.
Investor Contact:
Barry Strzelec, 610-902-6256
barry.strzelec@airgas.com
or
Media Contact:
Doug Sherman, 610-902-6270
doug.sherman@airgas.com
 
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