Airgas Reports Fiscal 2014 4Q and Full Year Earnings

Full year sales were $5.07 billion, an increase of 2 percent over the prior year. Organic sales were flat compared to the prior year, with gas and rent up 1 percent and hardgoods down 2 percent, while acquisitions contributed sales growth of 2 percent for the year.

Full year free cash flow was a record $441 million, up 48 percent over the prior year, and adjusted cash from operations was a record $776 million, up 29 percent over the prior year. The increase in cash flows was primarily driven by lower required investment in working capital in the current year compared to the prior year.

Return on capital was 12.2 percent for the twelve months ended March 31, 2014, a decrease of 10 basis points from the prior year.

During fiscal year 2014, the Company acquired 11 businesses with aggregate annual sales of approximately $82 million, including The Encompass Gas Group, Inc., one of the largest privately-owned suppliers of industrial, medical, and specialty gases and related hardgoods in the U.S.

FISCAL 2015 GUIDANCE

• Fiscal year 2015 diluted EPS guidance of $5.00 to $5.20, representing 6 percent to 10 percent growth over fiscal 2014 adjusted diluted EPS

“We had expected the U.S. industrial economy to be much stronger by now. But areas of strength within certain industries are still being weighed down by weakness in other areas. There are many significant non-residential construction projects just now starting to move forward, which is a good sign; however, given the persistent uncertainty in the U.S. industrial economy over the past two years and with overall sluggishness still apparent, growth in fiscal 2015 is very difficult to predict,” said Airgas executive chairman Peter McCausland. “The low end of our fiscal 2015 guidance assumes a gradual uptick in growth rates as the year progresses, with average organic sales growth of 4 percent for the full year. The high end assumes a more robust acceleration in growth rates over the course of the year, with average organic sales growth of 6 percent for the full year.”

“We continue to believe the long-term growth prospects for the U.S. manufacturing and energy industries are strong, as structural drivers like the abundant supply of low-cost energy and higher shipping costs from overseas should favor the U.S. for years to come,” McCausland added. “Fiscal 2015 will be a year in which we continue to invest in the business to enhance our long-term growth prospects through strategic initiatives, including the development of our new e-Business platform, and enhancements to our regional management structures, like the reorganizations of our Southwest and North Central distribution regions this past year and other structural changes within all of our regions. We expect these and other initiatives to help drive decision-making as close to our customers as possible, bring additional focus to our sales efforts and increase operating efficiencies enabled by SAP, ultimately strengthening our competitive position and ability to capitalize when sustained improvement in the industrial economy returns.”

For the first quarter of fiscal year 2015, the Company expects earnings per diluted share in the range of $1.15 to $1.20, reflecting an increase of 1 percent to 5 percent over prior year earnings per diluted share of $1.14. First quarter guidance assumes a year-over-year organic sales growth rate in the low single digits.

For the full fiscal year 2015, the Company expects earnings per diluted share in the range of $5.00 to $5.20, reflecting an increase of 7 percent to 11 percent over prior year earnings per diluted share and an increase of 6 percent to 10 percent over prior year adjusted earnings per diluted share. Full year guidance includes a $0.11 to $0.16 per diluted share negative year-over-year impact from variable compensation reset following a below-budget year. The Company currently expects the contribution from its refrigerants business to year-over-year earnings per diluted share growth in fiscal 2015 to be slightly favorable.

Airgas, 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.

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 2015 first quarter and full fiscal year 2015 organic sales growth and earnings per diluted share, and the Company’s intent to continue to invest in its strategic initiatives to promote long-term 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: 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.