8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934T

Date of Report (date of earliest event reported):
January 26, 2005

AIRGAS, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-9344	56-0732648
(State or other	(Commission File Number)	(I.R.S. Employer
jurisdiction of		Identification No.)
incorporation)

259 North Radnor-Chester Road, Suite 100
Radnor, PA 19087-5283

(Address of principal executive offices)

Registrant’s telephone number, including area code: (610) 687-5253

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

TABLE OF CONTENTS

PRESS RELEASE DATED JANUARY 26, 2005

Item 2.02 Results of Operations and Financial Condition

On January 26, 2005, Airgas, Inc. (the “Company”) reported its earnings for its third quarter and nine months ended December 31, 2004, as described in the press release attached as Exhibit 99.1 and incorporated herein by reference.

The information contained in this Form 8-K report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference in any filing under the Securities Exchange Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Non-GAAP Measures:

The press release attached as Exhibit 99.1 contains certain financial measures that are not defined under generally accepted accounting principles (GAAP). After-Tax Cash Flow is a non-GAAP measure that provides investors meaningful insight into the Company’s ability to generate cash from operations to support working capital requirements, capital expenditures and financial obligations. Free Cash Flow is a non-GAAP measure that provides investors meaningful insight into the Company’s ability to generate cash from operations, which can be used at management’s discretion for acquisitions, the prepayment of debt or to support other investing and financing activities. The Company uses the non-GAAP measure Adjusted Debt to provide investors with a more accurate and meaningful measure of the change in the Company’s obligation to repay debt by adjusting for the non-recourse debt of the National Welders joint venture, non-cash interest rate hedging and funds received or repaid under the trade receivables securitization program.

The Company’s intent is to provide non-GAAP financial information to enhance investors’ understanding of the Company’s consolidated financial statements and should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP.

Item 9.01 Financial Statements and Exhibits

(a)	None
(b)	None
(c)	Exhibits.

99.1 — Press Release dated January 26, 2005

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant and Co-Registrants have duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AIRGAS, INC.		AIRGAS EAST, INC.
(Registrant)		AIRGAS GREAT LAKES, INC.
		AIRGAS MID AMERICA, INC.
		AIRGAS NORTH CENTRAL, INC.
BY:	/s/ Robert M. McLaughlin	AIRGAS SOUTH, INC.
	Robert M. McLaughlin	AIRGAS GULF STATES, INC.
	Vice President & Controller	AIRGAS MID SOUTH, INC.
		AIRGAS INTERMOUNTAIN, INC.
		AIRGAS NORPAC, INC.
		AIRGAS NORTHERN CALIFORNIA & NEVADA, INC. AIRGAS SOUTHWEST, INC. AIRGAS WEST, INC. AIRGAS SAFETY, INC. RUTLAND TOOL & SUPPLY CO., INC. AIRGAS CARBONIC, INC. AIRGAS SPECIALTY GASES, INC.
		NITROUS OXIDE CORP.
		RED-D-ARC, INC.
		AIRGAS DATA, LLC
		(Co-Registrants)

	BY:	/s/ Robert M. McLaughlin
		Robert M. McLaughlin Vice President
	ATNL, INC.
	(Co-Registrant)
	BY:	/s/ Melanie Andrews
		Melanie Andrews President
DATED: January 27, 2005

EX-99.1

		Airgas, Inc.
		259 N. Radnor-Chester Road
	News Release	Suite 100 Radnor, PA 19087-5283 www.airgas.com

Exhibit 99.1
Investor Contact:	Media Contact:
Melissa Nigro (610) 902-6206	James Ely (610) 902-6010
melissa.nigro@airgas.com	jim.ely@airgas.com

For release:     Immediately

Airgas Reports Third Quarter Earnings of $0.30 per share

RADNOR, PA – January 26, 2005 — Airgas, Inc., (NYSE: ARG), the largest U.S. distributor of industrial, medical and specialty gases, welding, safety and related products, today reported strong growth in sales, operating income and net earnings for its third quarter ended December 31, 2004. Net earnings for the quarter grew 10% to $23 million, or $0.30 per diluted share, compared to $20.9 million, or $0.28 per diluted share, in the same period a year ago. The current quarter includes integration expenses of $0.01 per diluted share related to the acquisition of the U.S. packaged gas business from The BOC Group. Results for the quarter ended December 31, 2003 include an insurance-related gain of $0.02 per diluted share.

Third quarter sales increased 35% to $612 million reflecting continued same-store sales growth, the consolidation of National Welders Supply Company (a joint venture affiliate), as well as acquisitions. National Welders contributed sales of $43 million; excluding this amount, sales grew 26%. Total same-store sales were up 9% compared to the same quarter a year ago, with gas and rent up 5% and hardgoods up 14%. These results reflect continued improvement in manufacturing and other industrial market segments.

“Our EPS grew by 19%, excluding the current quarter’s integration expenses and the prior period’s insurance gain, reflecting continued sales momentum,” said Airgas Chairman and Chief Executive Officer Peter McCausland. “However, earnings were a little softer than we hoped. Operating expenses, including fuel cost and cylinder maintenance, increased at a faster pace as volumes continued to grow, and we have experienced some product cost increases. We are planning comprehensive pricing actions to be implemented in the next 30 to 60 days. Given that most of the cost pressures we are experiencing directly relate to our cost to purchase and deliver product to our customers and the significant investment we have made over the last few years to enhance our customers’ value experience, I am confident we will achieve appropriate revenue enhancement.”

Page 2 of 10

Year to date, adjusted debt increased by $181 million as a result of the July 30 closing of the BOC acquisition. After-tax cash flow for the nine months ended December 31, 2004 was $160 million compared to $137 million in the comparable prior year period. Free cash flow for the comparable periods was negative $7 million versus positive $65 million. The decline in free cash is attributed to increased inventories and accounts receivable in connection with overall sales growth and the BOC acquisition, as well as capital expenditures to support the growth in strategic products like medical gas and bulk. The definition of after-tax cash flow and free cash flow, a reconciliation of each to the attached Consolidated Statement of Cash Flows, the definition of adjusted debt and a reconciliation to the balance sheet are attached.

McCausland continued, “Our growth platforms of bulk, medical and specialty gases as well as safety products and strategic accounts all performed well in the third quarter and our January same-store sales remain strong.”

The Company will conduct an earnings teleconference on Thursday, January 27, 2005, beginning at 11:00 a.m. Eastern Time. Access the teleconference by calling (888) 202-2422. This press release, slides to be presented during the Company’s teleconference and information about how to access a live and on-demand webcast of the teleconference are available in the ‘Investor Info’ section on the Company’s Internet site www.airgas.com. The telephone replay will be accessible for one week starting January 27 at 1 p.m. Eastern Time by calling (888) 203-1112 and entering passcode 155503.

About Airgas, Inc.

Airgas, Inc. is the largest U.S. distributor of industrial, medical and specialty gases, welding, safety and related products. Its integrated network of nearly 900 locations includes branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes 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.

Page 3 of 10

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. These statements include, but are not limited to, statements regarding: comprehensive pricing actions to be implemented in the next 30 to 60 days; and confidence that the Company will achieve appropriate revenue enhancement from the pricing actions. 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 and 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: the Company’s inability to implement price increases; supply cost pressures; increased industry competition; an economic downturn; adverse changes in customer buying patterns; significant fluctuations in interest rates; political and economic uncertainties associated with current world events; and other factors described in the Company’s reports, including Form 10-K dated March 31, 2004 and Forms 10-Q dated June 30, 2004 and September 30, 2004, filed by the Company with the Securities and Exchange Commission.

Consolidated statements of earnings, consolidated condensed balance sheets, consolidated statements of cash flows, and a reconciliation of non-GAAP financial measures follow.

Page 4 of 10

AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2004			2003			2004			2003
Net sales	$	611,540		$	451,869		$	1,755,340		$	1,373,377
Costs and expenses:
Cost of products sold (excl. deprec.)		296,103			213,600			855,405			655,094
Selling, distribution and administrative expenses		236,159			176,455			668,607			533,091
Depreciation		27,064			20,134			76,837			59,249
Amortization		1,192			1,393			4,145			4,235
Total costs and expenses		560,518			411,582			1,604,994			1,251,669
Operating income		51,022			40,287			150,346			121,708
Interest expense, net		(13,437	)		(10,260	)		(37,960	)		(30,990	)
Discount on securitization of trade receivables (a)		(1,340	)		(798	)		(3,216	)		(2,467	)
Other income (expense), net		353			465			702			417
Earnings before income tax expense, minority interest & equity earnings		36,598			29,694			109,872			88,668
Income tax expense		(13,173	)		(11,226	)		(40,650	)		(34,160	)
Minority interest in earnings of consolidated affiliate		(452	)		—			(1,356	)		—
Equity earnings of unconsolidated affiliate		—			2,423			—			4,024
Net earnings	$	22,973		$	20,891		$	67,866		$	58,532
Basic earnings per share	$	0.31		$	0.29		$	0.91		$	0.81
Diluted earnings per share	$	0.30		$	0.28		$	0.88		$	0.79
Weighted average shares outstanding:
Basic		75,200			73,000			74,700			72,500
Diluted		77,400			74,900			76,700			74,400

See attached notes.

Page 5 of 10

AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)

	(Unaudited)
	December 31,		March 31,
	2004		2004
ASSETS
Trade accounts receivable, net (a)	$	123,813	$	107,013
Inventories, net		228,052		170,300
Deferred income tax asset, net		27,837		25,519
Prepaids and other current assets		38,176		28,463
TOTAL CURRENT ASSETS		417,878		331,295
Property, plant and equipment, net		1,243,182		1,033,926
Goodwill		517,592		504,207
Other intangible assets, net		17,544		19,733
Other non-current assets		35,473		46,383
TOTAL ASSETS	$	2,231,669	$	1,935,544
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, trade	$	99,184	$	114,303
Accrued expenses and other current liabilities		140,127		122,026
Current portion of long-term debt		6,373		6,140
TOTAL CURRENT LIABILITIES		245,684		242,469
Long-term debt		841,461		682,698
Deferred income taxes		274,429		251,575
Other non-current liabilities		53,135		30,710
Minority interest in subsidiary		36,191		36,191
Stockholders’ equity		780,769		691,901
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,231,669	$	1,935,544

See attached notes.

Page 6 of 10

AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

	Nine Months Ended			Nine Months Ended
	December 31, 2004(b)			December 31, 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	67,866		$	58,532
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		76,837			59,249
Amortization		4,145			4,235
Deferred income taxes		23,456			15,400
Equity in earnings of unconsolidated affiliate		—			(4,024	)
Gain on divestiture		(360	)		—
(Gain)/loss on sales of plant and equipment		(191	)		43
Minority interest in earnings of consolidated affiliate		1,356			—
Stock issued for employee stock purchase plan		7,251			4,612
Changes in assets and liabilities, excluding effects of business acquisitions and divestitures:
Securitization of trade receivables		29,900			(2,700	)
Trade receivables, net		(16,513	)		4,676
Inventories, net		(38,907	)		(9,198	)
Prepaid expenses and other current assets		(8,006	)		796
Accounts payable, trade		(15,936	)		(19,592	)
Accrued expenses and other current liabilities		(15,264	)		1,394
Other assets		1,226			1,390
Other liabilities		(798	)		103
Net cash provided by operating activities		116,062			114,916
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(110,885	)		(61,116	)
Proceeds from sales of plant and equipment		3,803			3,913
Proceeds from divestitures		828			—
Business acquisitions, holdbacks and other settlements of acquisition related liabilities		(200,699	)		(6,962	)
Management fees from unconsolidated affiliate		—			724
Other, net		27			(2,397	)
Net cash used in investing activities		(306,926	)		(65,838	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings		531,867			214,781
Repayment of debt		(369,849	)		(262,053	)
Minority interest		(1,356	)		—
Exercise of stock options		14,924			10,084
Dividends paid to stockholders		(10,195	)		(8,821	)
Cash overdraft		25,473			(3,069	)
Net cash provided by (used in) financing activities		190,864			(49,078	)
Change in cash
Cash – Beginning of period	$	—		$	—
Cash – End of period		—			—
	$	—		$	—

See attached notes.

Page 7 of 10

Notes:

(a)   The Company participates in a securitization agreement with two commercial banks to sell up to $200 million of qualified trade receivables. Net proceeds from the securitization were used to reduce borrowings under the Company’s revolving credit facilities. The amount of outstanding receivables under the agreement was $192.5 million and $162.6 million at December 31, 2004 and March 31, 2004, respectively.

(b)   Effective December 31, 2003, the Company elected to adopt Financial Accounting Standards Board Interpretation No. 46R, “Consolidation of Variable Interest Entities,” (“FIN 46R”), as it applies to its joint venture with National Welders Supply Company, Inc. (“NWS”), a producer and distributor of industrial gases based in Charlotte, North Carolina. For the nine months ended December 31, 2003, NWS’ operating results were reflected as “Equity in Earnings of Unconsolidated Affiliate.” For the nine months ended December 31, 2004, the operating results of NWS were reported broadly across the income statement in the “All Other Operations” business segment. NWS contributed $122.8 million to sales and $11.1 million to operating income for the nine months ended December 31, 2004. The consolidation of NWS had no impact on the Company’s consolidated net earnings.

The cash flows of NWS, in excess of a management fee, are not available for the general use of the Company. Rather, these cash flows are used by NWS for operations, capital expenditures, acquisitions and to satisfy financial obligations, which are non-recourse to the Company. The cash flows for the nine months ended December 31, 2004 reflect the following sources and uses of cash associated with NWS:

	Nine Months Ended
	December 31, 2004
Net cash provided by operating activities	$	13,370
Net cash used by investing activities		(25,279	)
Net cash provided by financing activities		11,909
Management fee paid to the Company, which is eliminated in consolidation		802

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(c)   Business segment information (unaudited) for the Company’s Distribution and All Other Operations segments is shown below:

	Three Months Ended									Three Months Ended
	December 31, 2004									December 31, 2003
(In thousands)	Dist.		All Other Ops.		Elim			Combined		Dist.		All Other Ops.		Elim			Combined
Gas and rent	$	276,485	$	78,402	$	(13,436	)	$	341,451	$	218,182	$	45,846	$	(9,794	)	$	254,234
Hardgoods		253,822		17,225		(958	)		270,089		196,957		1,390		(712	)		197,635
Total net sales		530,307		95,627		(14,394	)		611,540		415,139		47,236		(10,506	)		451,869
Cost of products sold, excl. deprec. expense		267,419		43,078		(14,394	)		296,103		203,136		20,970		(10,506	)		213,600
Selling, distribution and administrative expenses		200,192		35,967					236,159		160,078		16,377					176,455
Depreciation expense		21,307		5,757					27,064		16,971		3,163					20,134
Amortization expense		1,068		124					1,192		1,251		142					1,393
Operating income		40,321		10,701					51,022		33,703		6,584					40,287

	Nine Months Ended									Nine Months Ended
	December 31, 2004									December 31, 2003
(In thousands)	Dist.		All Other Ops.		Elim			Combined		Dist.		All Other Ops.		Elim			Combined
Gas and rent	$	764,123	$	239,573	$	(35,910	)	$	967,786	$	656,070	$	146,072	$	(29,418	)	$	772,724
Hardgoods		740,912		49,390		(2,748	)		787,554		598,620		4,057		(2,024	)		600,653
Total net sales		1,505,035		288,963		(38,658	)		1,755,340		1,254,690		150,129		(31,442	)		1,373,377
Cost of products sold, excl. deprec. expense		764,517		129,546		(38,658	)		855,405		619,480		67,056		(31,442	)		655,094
Selling, distribution and administrative expenses		563,559		105,048					668,607		483,317		49,774					533,091
Depreciation expense		59,104		17,733					76,837		49,786		9,463					59,249
Amortization expense		3,748		397					4,145		3,797		438					4,235
Operating income		114,107		36,239					150,346		98,310		23,398					121,708

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Reconciliation of Non-GAAP Financial Measures (Unaudited)

After-Tax Cash Flow:

Reconciliation of net cash provided by operating activities per the Consolidated Statement of Cash Flows to After-Tax Cash Flow:

	Nine Months Ended			Nine Months Ended
(Amounts in thousands)	December 31, 2004			December 31, 2003
Net cash provided by operating activities	$	116,062		$	114,916
Less After-Tax Cash Flow of NWS (1)		(12,047	)		—
Add back:
Cash used for working capital components and other assets and liabilities		94,198			20,431
Gain on divestiture		360			—
Equity in earnings of unconsolidated affiliates		—			4,024
Less:
Cash (provided) used by the securitization of trade receivables		(29,900	)		2,700
Gain (loss) on sales of plant and equipment		191			(43	)
Stock issued for employee stock purchase plan		(7,251	)		(4,612	)
Minority interest in earnings		(1,356	)		—
After-Tax Cash Flow	$	160,257		$	137,416

After-Tax Cash Flow is defined as net earnings plus depreciation, amortization and deferred tax expense. After-Tax Cash Flow provides investors meaningful insight into the Company’s ability to generate cash from operations to support working capital requirements, capital expenditures and financial obligations.

⁽¹⁾ National Welders Supply Co. (“NWS”) is a corporate joint venture meeting the definition of a variable interest entity and for which the Company is the primary beneficiary as described under FIN 46R. NWS was consolidated effective December 31, 2003. Prior to January 1, 2004, the Company reported the results of NWS in “Equity in Earnings of Unconsolidated Affiliate.” The liabilities of NWS are non-recourse to the Company. Likewise, the cash flows in excess of the management fee paid by NWS are not available to the Company. Accordingly, the cash flows of NWS have been excluded from the Company’s non-GAAP liquidity measures.

Free Cash Flow:

Reconciliation of net cash provided by operating activities per the Consolidated Statement of Cash Flows to Free Cash Flow:

	Nine Months Ended			Nine Months Ended
(Amounts in thousands)	December 31, 2004			December 31, 2003
Net cash provided by operating activities	$	116,062		$	114,916
Less net cash provided by operating activities of NWS (1)		(13,370	)		—
Plus:
Management fees paid by NWS (1)		802			724
Operating lease buyouts		16,700			3,861
Proceeds from sale of PP&E		3,803			3,913
Less:
Cash (provided) used by the securitization of trade receivables		(29,900	)		2,700
Capital expenditures		(110,885	)		(61,116	)
Add back capital expenditures of NWS (1)		9,348			—
Free Cash Flow	($	7,440	)	$	64,998

Free Cash Flow provides investors meaningful insight into the Company’s ability to generate cash from operations, which can be used at management’s discretion for acquisitions, the prepayment of debt or to support other investing and financing activities.

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Adjusted Debt:

Reconciliation of the change in debt per the Balance Sheet to the increase in debt adjusted for the non-recourse debt of NWS, off-balance sheet financing and non-cash interest rate hedging (“adjusted debt”):

(Amounts in thousands)	December 31, 2004			March 31, 2004			Change in Adjusted Debt
Debt	$	847,834		$	688,838		$	158,996
Adjustments to Debt:
Securitization of trade receivables		192,500			162,600			29,900
National Welders – non-recourse debt (2)		(67,012	)		(53,823	)		(13,189	)
Interest rate swap agreements		(8,578	)		(13,832	)		5,254
Adjusted Debt	$	964,744		$	783,783		$	180,961

⁽²⁾ In calculating the Adjusted Debt measure, the debt of the NWS joint venture has been excluded because the debt is non-recourse to Airgas.

The Company uses Adjusted Debt to provide investors with a more accurate and meaningful measure of the change in the Company’s obligation to repay debt by adjusting for the non-recourse debt of NWS, non-cash interest rate hedging and funds received (or repaid) under the trade receivables securitization program.