In safety, we are one of the largest U.S. distributors of safety products, with more than $438 million in annual sales. We offer more than 30,000 safety products through field-based and telesales channels. Growth in this product line looks very promising as we continue to cross-sell safety products to our 1 million customers.

Many of these strategic product lines serve non-cyclical and counter-cyclical industries, making us less dependent on the health of the industrial economy. We have continued to look for ways to expand our platform into other profitable adjacencies.

Airgas Specialty Products, created just two years ago with the 2005 acquisition of an industrial ammonia business, is a leading supplier of ammonia products and services in the U.S. for nitrogen oxide abatement (DeNOx), metal finishing, water treatment, chemical processing, and refrigeration. This business unit also sells and distributes bulk process chemicals and refrigerants and provides critical services to customers that use these products. Airgas Specialty Products gives us another platform, which we intend to grow through cross-selling and additional acquisitions.

Operating from a Position of Strength

We continue to dedicate Airgas talent and resources to operational improvements. We now measure the fulfillment of cylinders from our fill plants to branches and by the second half of fiscal 2007, we had reached our initial goal of 95 percent fulfillment. We continue to invest in state-of-the-art, fast-fill cylinder plants, with several finished in the last year and more planned for the coming year. And, we are rolling out new ultrasonic cylinder testing systems to speed the time it takes to requalify cylinders and return them to service.

We are working on improving our operations in many other areas, including delivery routing and logistics to reduce miles and driving time, improved cylinder maintenance, cylinder tracking capabilities, and automated production planning at more of our fill plants. There are many other ways to get more production, profits, and growth out of the Airgas business model, and we are attacking them in a disciplined way. The potential for operational improvements is further proof that right now is always the most exciting time at Airgas.

Letter Continued…