Airgas Increases First Quarter Dividend by 15%

  Airgas Increases First Quarter Dividend by 15%

Business Wire

RADNOR, Pa. -- May 1, 2014

Airgas, Inc. (NYSE: ARG), one of the nation’s leading suppliers of industrial,
medical, and specialty gases, and related products, today announced that its
Board of Directors has increased the quarterly cash dividend on the Company’s
common stock by 15%, from $0.48 per share to $0.55 per share. The dividend
will be payable on June 30, 2014 to shareholders of record as of June 13,
2014.

“Despite the sluggishness in the U.S. industrial economy during our fiscal
year 2014, we delivered adjusted earnings per diluted share* of $4.72, up 9%
over the prior year. In addition, we generated record free cash flow* of $441
million on adjusted cash from operations* of $776 million,” said Airgas
Executive Chairman Peter McCausland. “We are expecting another solid year of
6% to 10% growth in EPS in fiscal year 2015, and we remain confident in
Airgas’ long-term growth prospects. Our strong cash flow and financial
stability enable us to increase the quarterly dividend while continuing to
fund our growth strategies.”

* See attached reconciliations and computations of the non-GAAP financial
measures adjusted earnings per diluted share, adjusted cash from operations,
and free cash flow.

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 16,000
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
e-Business, 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 the Company’s expectations regarding its fiscal year 2015
earnings and its long-term growth prospects. 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: adverse changes
in customer buying patterns or weakening in the operating and financial
performance of our customers, any of which could negatively impact our sales
and our ability to collect our accounts receivable; postponement of projects
due to economic conditions; customer acceptance of price increases; increases
in energy costs and other operating expenses at a faster rate than our ability
to increase prices; changes in customer demand resulting in our inability to
meet minimum product purchase requirements under long-term supply agreements
and the inability to negotiate alternative supply arrangements; supply cost
pressures; shortages and/or disruptions in the supply chain of certain gases,
including but not limited to the continued or increased disruption in our
helium supply chain; EPA rulings and the pace and manner of U.S. compliance
with the Montreal Protocol as they relate to the production and import of
Refrigerant-22 (also known as HCFC-22 or R-22); higher than expected expenses
associated with the expansion of our telesales business, our strategic pricing
initiatives and other strategic growth initiatives; increased industry
competition; our ability to successfully identify, consummate, and integrate
acquisitions; our ability to achieve anticipated acquisition synergies;
operating costs associated with acquired businesses; our continued ability to
access credit markets on satisfactory terms; significant fluctuations in
interest rates; the impact of changes in credit market conditions on our
customers; our ability to effectively leverage our new SAP system to improve
the operating and financial performance of our business; higher than expected
costs related to our Business Support Center transition; changes in tax and
fiscal policies and laws; increased expenditures relating to compliance with
environmental and other regulatory initiatives; the impact of new
environmental, healthcare, tax, accounting, and other regulations; the extent
and duration of sluggish conditions in the U.S. economy, including in
particular, the U.S. industrial economy; the economic recovery in the U.S.;
catastrophic events and/or severe weather conditions; political and economic
uncertainties associated with current world events; and other factors
described in the Company's reports, including its March 31, 2013 Form 10-K,
subsequent Forms 10-Q, and other forms filed by the Company with the SEC.

Reconciliations of Non-GAAP Financial Measures (Unaudited)

Adjusted Earnings per Diluted Share and Earnings Guidance

Reconciliations of adjusted earnings per diluted share and earnings guidance:

                                             
                                               Year Ended
                                               March 31,
                                               2014       2013
Earnings per diluted share                     $ 4.68      $ 4.35
State income tax benefits                        (0.04 )     -
Loss on the extinguishment of debt               0.08        -
Gain on sale of businesses                       -           (0.07 )
Restructuring and other special charges, net    -         0.07  
Adjusted earnings per diluted share            $ 4.72     $ 4.35  
                                                           

                                                                
                                                         (Guidance Range)
                                             Year        Year Ending
                                             Ended       March 31, 2015
                                             March 31,
                                             2014        Low        High
                                                                    
Earnings per diluted share                   $ 4.68      $ 5.00     $ 5.20
                                                                    
Adjustments to earnings per diluted share:
State income tax benefits                      (0.04 )     -          -
Loss on the extinguishment of debt            0.08      -        -    
                                                                    
Adjusted earnings per diluted share          $ 4.72     $ 5.00    $ 5.20 
Year-over-year change                                     6    %    10   %
                                                                    

The Company believes its adjusted earnings per diluted share financial measure
provides investors meaningful insight into its earnings performance without
the impact of net Business Support Center restructuring and other special
charges, the gain on the sale of businesses, benefits from the changes in
state income tax rates and law, and the loss on the extinguishment of debt.
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 the adjusted earnings per diluted share financial measures
provided by other companies.

Adjusted Cash from Operations, Adjusted Capital Expenditures, and Free Cash
Flow

Reconciliations and computations of adjusted cash from operations, adjusted
capital expenditures, and free cash flow:

                                                 
                                                   Year Ended
                                                   March 31,
(In thousands)                                     2014          2013
                                                                  
Net cash provided by operating activities          $ 744,860      $ 550,268
                                                                  
Adjustments to net cash provided by operating
activities:
Stock issued for the Employee Stock Purchase         17,313         17,088
Plan
Excess tax benefit realized from the exercise of    13,668       36,160   
stock options
Adjusted cash from operations                       775,841      603,516  
                                                                  
Capital expenditures                                 (354,587 )     (325,465 )
                                                                  
Adjustments to capital expenditures:
Proceeds from sales of plant and equipment           15,483         15,693
Operating lease buyouts                             4,420        3,946    
Adjusted capital expenditures                       (334,684 )    (305,826 )
                                                                  
Free cash flow                                     $ 441,157     $ 297,690  
                                                                  
Net cash used in investing activities              $ (543,584 )   $ (392,859 )
Net cash used in financing activities              $ (218,101 )   $ (115,686 )
                                                                  

The Company believes its adjusted cash from operations, adjusted capital
expenditures, and free cash flow financial measures provide investors
meaningful insight into its ability to generate cash from operations, which is
available for servicing debt obligations and for the execution of its business
strategies, including acquisitions, the prepayment of debt, the payment of
dividends, or to support other investing and financing activities. The
Company’s free cash flow financial measure has limitations and does not
represent the residual cash flow available for discretionary expenditures.
Certain non-discretionary expenditures such as payments on maturing debt
obligations are excluded from the Company’s computation of its free cash flow
financial measure. 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 cash from operations, adjusted
capital expenditures, and free cash flow financial measures may be different
from the adjusted cash from operations, adjusted capital expenditures, and
free cash flow financial measures provided by other companies.

Contact:

Airgas, Inc.
Investor & Media Contact:
Barry Strzelec, 610-902-6256
barry.strzelec@airgas.com
or
Investor Contact:
Joseph Marczely, 610-263-8277
joseph.marczely@airgas.com
or
Media Contact:
Sarah Stockton-Brown, 610-263-8260
sarah.stockton-brown@airgas.com
 
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