<PAGE>   1


================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the Quarterly Period Ended March 31, 2001

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the Transition Period From __________ to __________

                          COMMISSION FILE NO. 000-29226

                       VALLEY NATIONAL GASES INCORPORATED
             (Exact name of registrant as specified in its charter)


            PENNSYLVANIA                              23-2888240
   (State or other jurisdiction of        (I.R.S. Employer Identification No.)
   incorporation or organization)

                                 67 43RD STREET
                          WHEELING, WEST VIRGINIA 26003
                    (Address of principal executive offices)

                                 (304) 234-4460
              (Registrant's telephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.


                      Yes   X       No
                         -------       -------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

          Class                              Outstanding at May 14, 2001
          -----                              ---------------------------
Common stock, $0.001 par value                          9,347,584

================================================================================



<PAGE>   2



                       Valley National Gases Incorporated


                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
PART I  FINANCIAL INFORMATION

     ITEM 1  Condensed Consolidated Balance Sheets as of June 30, 2000
             and March 31, 2001                                               3

             Condensed Consolidated Statements of Operations for the
             Three Months Ended March 31, 2000 and 2001                       5

             Condensed Consolidated Statements of Operations for the
             Nine Months Ended March 31, 2000 and 2001                        6

             Condensed Consolidated Statements of Cash Flows for the
             Nine Months Ended March 31, 2000 and 2001                        7

             Notes to Condensed Consolidated Financial Statements             8

     ITEM 2  Management's Discussion and Analysis of Financial
             Condition and Results of Operations                             11

     ITEM 3  Quantitative and Qualitative Disclosures About Market Risk      16


PART II  OTHER INFORMATION

     ITEM 6  Exhibits and Reports on Form 8-K                                16

     SIGNATURES                                                              17

     EXHIBIT INDEX                                                           18



                                     - 2 -
<PAGE>   3



                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

                       VALLEY NATIONAL GASES INCORPORATED

                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                              A S S E T S
                                                                            June 30,             March 31,
                                                                              2000                 2001
                                                                          ------------         ------------
                                                                                                 (Unaudited)
<S>                                                                      <C>                  <C>
CURRENT ASSETS:
    Cash and cash equivalents                                             $    769,564         $    261,531
    Accounts receivable, net of allowance for doubtful accounts of
       $586,698 and $589,198, respectively                                  16,131,425           17,687,583
    Inventory                                                               13,748,347           15,502,721
    Prepaids and other                                                         920,159            1,225,110
                                                                          ------------         ------------
                  Total current assets                                      31,569,495           34,676,945
                                                                          ------------         ------------
PROPERTY, PLANT AND EQUIPMENT:
    Land                                                                        88,000               88,000
    Buildings and improvements                                               5,026,630            5,239,576
    Equipment                                                               65,774,656           70,468,287
    Transportation equipment                                                11,654,109           12,672,224
    Furniture and fixtures                                                   4,579,751            5,006,778
                                                                          ------------         ------------
                  Total property, plant and equipment                       87,123,146           93,474,865

    Accumulated depreciation                                               (32,901,262)         (36,651,585)
                                                                          ------------         ------------
                  Net property, plant and equipment                         54,221,884           56,823,280
                                                                          ------------         ------------
OTHER ASSETS:
    Intangibles, net of amortization of
     $14,752,111 and $14,977,161, respectively                              44,348,795           41,956,416
    Deposits and other assets                                                1,803,118            2,350,555
                                                                          ------------         ------------
                  Total other assets                                        46,151,913           44,306,971
                                                                          ------------         ------------
TOTAL ASSETS                                                              $131,943,292         $135,807,196
                                                                          ============         ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                     - 3 -
<PAGE>   4



                       VALLEY NATIONAL GASES INCORPORATED

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
           LIABILITIES AND STOCKHOLDERS' EQUITY         June 30,              March 31,
                                                          2000                  2001
                                                      ------------          ------------
                                                                             (Unaudited)
<S>                                                  <C>                   <C>
CURRENT LIABILITIES:
    Current maturities of long-term debt              $  7,064,877          $  6,775,862
    Bank overdraft                                       1,460,492                    --
    Accounts payable, trade                              5,751,892             6,615,607
    Accrued compensation and employee benefits           3,346,283             3,548,655
    Other current liabilities                            2,678,345             4,096,892
                                                      ------------          ------------
                  Total current liabilities             20,301,889            21,037,016

LONG-TERM DEBT, less current maturities                 68,818,457            67,797,584
DEFERRED TAX LIABILITY                                  10,624,109            10,830,974
OTHER LONG-TERM LIABILITIES                              1,544,525             3,476,644
                                                      ------------          ------------
                  Total liabilities                    101,288,980           103,142,218
                                                      ------------          ------------
STOCKHOLDERS' EQUITY:
    Common stock, par value, $.001 per share-
    Authorized, 30,000,000 shares
    Issued, 9,620,084 shares                                 9,620                 9,620
    Paid-in-capital                                     19,269,338            19,269,338
    Retained earnings                                   13,638,782            16,913,980
  Accumulated other comprehensive loss                          --            (1,264,532)
  Treasury stock at cost, 272,500 shares                (2,263,428)           (2,263,428)
                                                      ------------          ------------
                  Total stockholders' equity            30,654,312            32,664,978
                                                      ------------          ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $131,943,292          $135,807,196
                                                      ============          ============
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                     - 4 -
<PAGE>   5



                       VALLEY NATIONAL GASES INCORPORATED

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                                March 31,
                                                                      ------------------------------
                                                                         2000               2001
                                                                      -----------        -----------
<S>                                                                  <C>                <C>
NET SALES                                                             $36,822,963        $41,060,313
COST OF PRODUCTS SOLD, excluding depreciation and amortization         18,654,262         20,441,576
                                                                      -----------        -----------
                  Gross profit                                         18,168,701         20,618,737
                                                                      -----------        -----------
EXPENSES:
    Operating and administrative                                       11,959,542         13,790,806
    Depreciation and amortization                                       2,542,403          2,509,861
                                                                      -----------        -----------
                  Total expenses                                       14,501,945         16,300,667
                                                                      -----------        -----------
                  Income from operations                                3,666,756          4,318,070

Interest expense                                                        1,476,451          2,167,641
OTHER INCOME, NET                                                          80,032            130,679
                                                                      -----------        -----------
EARNINGS BEFORE INCOME TAXES                                            2,270,337          2,281,108

PROVISION FOR INCOME TAXES                                                998,948          1,003,687
                                                                      -----------        -----------
NET EARNINGS                                                          $ 1,271,389        $ 1,277,421
                                                                      ===========        ===========

BASIC EARNINGS PER SHARE                                              $      0.14        $      0.14
DILUTED EARNINGS PER SHARE                                                   0.14               0.14
WEIGHTED AVERAGE SHARES:
   Basic                                                                9,347,584          9,347,584
   Diluted                                                              9,354,439          9,371,400
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                     - 5 -
<PAGE>   6


                       VALLEY NATIONAL GASES INCORPORATED

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                            Nine Months Ended
                                                                                 March 31,
                                                                      -------------------------------
                                                                         2000                2001
                                                                      -----------        ------------
<S>                                                                  <C>                <C>
NET SALES                                                             $93,651,031        $108,537,349
COST OF PRODUCTS SOLD, excluding depreciation and amortization         46,150,301          52,884,377
                                                                      -----------        ------------
                  Gross profit                                         47,500,730          55,652,972
                                                                      -----------        ------------
EXPENSES:
    Operating and administrative                                       31,924,054          37,615,174
    Depreciation and amortization                                       6,955,264           7,599,821
                                                                      -----------        ------------
                  Total expenses                                       38,879,318          45,214,995
                                                                      -----------        ------------
                  Income from operations                                8,621,412          10,437,977

Interest expense                                                        3,772,360           4,974,415
OTHER INCOME, NET                                                         259,990             385,003
                                                                      -----------        ------------
EARNINGS BEFORE INCOME TAXES                                            5,109,042           5,848,565

PROVISION FOR INCOME TAXES                                              2,247,978           2,573,368
                                                                      -----------        ------------
NET EARNINGS                                                          $ 2,861,064        $  3,275,197
                                                                      ===========        ============

BASIC EARNINGS PER SHARE                                              $      0.31        $       0.35
DILUTED EARNINGS PER SHARE                                                   0.31                0.35
WEIGHTED AVERAGE SHARES                                                 9,347,584           9,347,584
DILUTED AVERAGE SHARES                                                  9,350,348           9,366,079
</TABLE>





   The accompanying notes are an integral part of these financial statements.



                                     - 6 -
<PAGE>   7


                       VALLEY NATIONAL GASES INCORPORATED

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    Nine Months Ended
                                                                        March 31,
                                                             ---------------------------------
                                                                 2000                 2001
                                                             ------------         ------------
<S>                                                          <C>                  <C>
Net cash provided by operating activities                    $  5,889,437         $  8,683,689
                                                             ------------         ------------
Cash flows from investing activities:
    Proceeds from disposal of assets                              231,545              183,316
    Purchases of property and equipment                        (4,619,393)          (5,896,877)
    Business acquisitions, net of cash acquired                (9,752,174)          (1,615,901)
                                                             ------------         ------------
           Net cash used by investing
             activities                                       (14,752,174)          (7,329,462)

Cash flows from financing activities:
    Proceeds from borrowings                                   21,453,074           31,341,374
    Principal payments on loans                               (11,916,538)         (33,203,634)
                                                             ------------         ------------

                       Net cash provided by (used by)
                         financing activities                   9,536,536           (1,862,260)
                                                             ------------         ------------
Net change in cash and cash equivalents                         1,285,951             (508,033)
Cash and cash equivalents, beginning of period                    224,708              769,564
                                                             ------------         ------------
Cash and cash equivalents, end of period                     $  1,510,659         $    261,531
                                                             ============         ============
Supplemental cash flow information:
    Cash payments for interest                               $  3,327,904         $  4,551,762
                                                             ============         ============
    Cash payments for income taxes                           $    901,280         $  1,324,746
                                                             ============         ============
</TABLE>


The accompanying notes are an integral part of these financial statements.



                                     - 7 -
<PAGE>   8




                       Valley National Gases Incorporated


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION:
   ----------------------

   The financial statements of Valley National Gases Incorporated (the Company)
presented herein are unaudited. Certain information and footnote disclosures
normally prepared in accordance with generally accepted accounting principles
have been either condensed or omitted pursuant to the rules and regulations of
the Securities and Exchange Commission. Although the Company believes that all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation have been made, interim periods are not necessarily indicative
of the financial results of operations for a full year. As such, these financial
statements should be read in conjunction with the financial statements and notes
thereto included or incorporated by reference in the Company's audited financial
statements for the period ending June 30, 2000.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   ------------------------------------------

INVENTORY

   Inventory is carried at the lower of cost or market using the first-in,
first-out (FIFO) method.

The components of inventory are as follows:

                               June 30, 2000        March 31, 2001
                               -------------        --------------
                                                     (Unaudited)

             Hardgoods          $11,943,855          $13,669,745
             Gases                1,804,492            1,832,976
                                -----------          -----------
                                $13,748,347          $15,502,721
                                ===========          ===========

PLANT AND EQUIPMENT

   Plant and equipment are stated at cost. Depreciation is provided on the
straight-line basis over the estimated useful lives of the related assets.

3.  ACQUISITIONS:
    -------------

   The Company acquires businesses engaged in the distribution of industrial,
medical and specialty gases and related welding supplies and accessories.
Acquisitions have been recorded using the purchase method of accounting and,
accordingly, results of their operations have been included in the Company's
financial statements since the effective dates of the respective acquisitions.

   During the nine months ended March 31, 2001, the Company purchased three
businesses. The largest of these acquisitions and the effective date was Titan
Welding Supply, Ltd. (September 2000).





                                     - 8 -
<PAGE>   9

   In connection with these acquisitions, the total purchase price, fair value
of assets acquired, cash paid and liabilities assumed were as follows:



                                                        Nine Months Ended
                                                         March 31, 2001
                                                        -----------------
                                                           (Unaudited)

Cash paid                                                  $1,628,539
Notes issued to sellers                                       161,000
Notes payable and capital leases assumed                      31,722
Other liabilities assumed and acquisition costs               359,650
                                                           ----------
Total purchase price allocated to assets acquired          $2,180,911
                                                           ==========


4. LONG-TERM DEBT:
   ---------------

   Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                        June 30, 2000        March 31, 2001
                                                                                        -------------        --------------
                                                                                                               (Unaudited)
<S>                                                                                    <C>                  <C>
Revolving note, interest at LIBOR plus 1.875% payable monthly through
    April 2003. Secured by the assets of the Company                                     $51,880,202           $55,635,897

Termnote, interest at LIBOR plus 1.875% payable monthly through October 2003
    Secured by the assets of the Company                                                   8,314,565             6,395,810

Notepayable, interest at 6.6% payable annually through October 2003. Secured by
    certain assets of the Company                                                          2,732,298             2,049,223

Individuals and corporations, mortgages and notes, interest at 3.7% to 10.00%,
    payable at various dates through 2010                                                 13,090,893            10,611,129
                                                                                         -----------           -----------
                                                                                          76,017,958            74,692,059
                  Original issue discount                                                   (134,624)             (118,613)
                  Current maturities                                                      (7,064,877)           (6,775,862)
                                                                                         -----------           -----------
Total long-term debt                                                                     $68,818,457           $67,797,584
                                                                                         ===========           ===========
</TABLE>

Prime rate was 8.00% and LIBOR was 5.10% at March 31, 2001.

    On May 1, 2000 the Company entered into an amended and restated credit
facility with Bank One, as agent. The credit facility increased the maximum
revolving note borrowings to $100.0 million, including a letter of credit
sublimit of $25.0 million. The term note continued at the existing balance of
$7.7 million. The scheduled maturity date of the term note is October 4, 2003.
The scheduled maturity date of the revolving note is April 30, 2003. The Company
pays a fee for the unused portion of the revolving loan. The revolving loan is
used primarily to fund acquisitions. The Company is not required to make
principal payments on outstanding balances of the revolving loan as long as
certain covenants are satisfied. Interest is charged on both the term loan and
the revolving loan at either the lender's prime rate or various LIBOR rates, at
the Company's discretion, plus an applicable spread. The weighted average
interest rate for substantially all of the borrowings under the credit facility
was 6.9% as of March 31, 2001. As of March 31, 2001, availability under the
revolving loan was approximately $38.3 million, with outstanding borrowings




                                     - 9 -
<PAGE>   10

of approximately $55.6 million and outstanding letters of credit of
approximately $5.9 million. The credit facility is secured by all of the
Company's assets.

    The loan agreement for the credit facility contains various financial
covenants applicable to the Company, including covenants requiring minimum fixed
charge coverage, maximum funded debt to EBITDA, and minimum net worth.

5.  EARNINGS PER SHARE
    ------------------

   Basic earnings per share were computed based on the weighted average number
of common shares issued and outstanding during the relevant periods. Diluted
earnings per common share were computed based on the weighted average number of
common shares issued and outstanding plus additional shares assumed to be
outstanding to reflect the dilutive effect of common stock equivalents using the
treasury stock method.

   Options to purchase 228,850 shares of common stock were outstanding during
the nine months and quarter ended March 31, 2001 respectively, but were not
included in the computation of diluted earnings per common share as the options'
exercise price was greater than the average market price of the common stock for
the period.

<TABLE>
<CAPTION>
                                                                 Three Months Ended                   Nine Months Ended
                                                                      March 31,                           March 31,
                                                             ---------------------------          ---------------------------
                                                                2000            2001                 2000             2001
                                                             ----------       ----------          ----------       ----------
<S>                                                         <C>              <C>                 <C>              <C>
Net earnings available for common stock                      $1,271,389       $1,277,421          $2,861,064       $3,275,197
                                                             ==========       ==========          ==========       ==========

Basic earnings per common share:
Weighted average common shares                                9,347,584        9,347,584           9,347,584        9,347,584
                                                             ==========       ==========          ==========       ==========
Basic earnings per common share                              $     0.14       $     0.14          $     0.31       $     0.35
                                                             ==========       ==========          ==========       ==========

Diluted earnings per common share:
Weighted average common shares                                9,347,584        9,347,584           9,347,584        9,347,584
Shares issuable from assumed conversion of common
stock equivalents                                                 6,855           23,816               2,764           18,495
Weighted average common and common equivalent shares          9,354,439        9,371,400           9,350,348        9,366,079
                                                             ==========       ==========          ==========       ==========
Diluted earnings per common share                            $     0.14       $     0.14          $     0.31       $     0.35
                                                             ==========       ==========          ==========       ==========
</TABLE>

6.  SUBSEQUENT EVENTS
    -----------------

    On April 2, 2001, the Company acquired the assets of the Moorefield, WV and
Franklin, WV operations of Dixie Gas and Oil, Inc., propane distributors having
approximately $2.5 million in annualized sales. This transaction was financed
through the Company's credit facility.

   On April 26, 2001, the Company entered into an agreement to acquire eight
branches from Air Liquide America Corporation. These branches, which include the
three branches of Tampa Oxygen & Welding Supply, have approximately $11.0
million in annual sales. This transaction is expected to be completed on or
about May 16, 2001 and will be financed through the Company's credit facility.



                                     - 10 -
<PAGE>   11

7.       COMPREHENSIVE INCOME

     The components of comprehensive income, net of tax, were as follows:


<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                                 March 31,
                                                                        ----------------------------
                                                                           2000              2001
                                                                        ----------       -----------
<S>                                                                    <C>              <C>
Net earnings                                                            $2,861,064       $ 3,275,197
Cumulative effect of change in
accounting principle, net of tax                                                --           213,289

Change in net unrealized losses on derivatives designated as cash
flow hedges, net of tax                                                         --        (1,477,821)
                                                                        ----------       -----------
Comprehensive income                                                    $2,861,064       $ 2,010,665
                                                                        ==========       ===========
</TABLE>

   Accumulated other comprehensive loss presented in the accompanying condensed
consolidated balance sheets consists of the accumulated other net unrealized
loss on derivatives designated as cash flow hedges.

8.       DERIVATIVES AND HEDGING ACTIVITIES

   On July 1, 2000, Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities" was adopted
resulting in the recording of current assets of $476,500, noncurrent assets of
$1,175,800, current liabilities of $365,400, noncurrent liabilities of $931,500
and other comprehensive income of $213,300, net of tax. The current quarter and
nine month results include an increase of interest expense of $559,159 and
$336,309, respectively, to reflect a decrease in the fair market value of
options related to the Company's interest rate swap agreements.

   Floating to fixed rate interest swap agreements, designated as cash flow
hedges, hedge the Company's floating rate debt and expire at various dates
through July 2005. The fair value of these contracts is recorded in the
Company's balance sheet, with the offset to accumulated other comprehensive
loss, net of tax. The Company expects to recognize net current liabilities of
$248,000 into earnings in the next 12 months.


ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   The following discussion should be read in conjunction with, and is qualified
in its entirety by, the Financial Statements and the Notes thereto.


OVERVIEW

   The Company is a leading packager and distributor of industrial, medical and
specialty gases, welding equipment and supplies, and propane in ten states in
the mid-Atlantic and midwestern regions of the United States. The Company's net
sales have grown, primarily as a result of acquisitions, at a compound annual
rate of approximately 17.0% per year since the Company started business in 1958,
increasing from $190,000 in that year to $141.0 million for the last twelve
months. In fiscal 2000, gases accounted for approximately 39% of net sales,
welding equipment and



                                     - 11 -
<PAGE>   12

supplies accounted for approximately 45% of net sales, and cylinder and tank
rental accounted for approximately 16% of net sales.

   The Company believes it has been successful in executing its strategy of
growth through acquisitions, having completed 49 acquisitions since 1990. Some
acquisitions have had, and the Company expects some future acquisitions may
have, a dilutive effect upon the Company's income from operations and net income
before tax for a short period following consummation. This temporary dilution
occurs because some of the benefits of acquisitions, such as leveraging of
operating and administrative expenses, improved product gross margins and real
sales growth, occur over a period ranging from two to eight quarters, depending
upon the complexity of integrating each acquisition into the Company's existing
operations. The consideration for most acquisitions includes a combination of a
cash payment at closing, seller financing and payments under covenants not to
compete and consulting agreements. In most cases, operating cash flow of an
acquired business is positive in a relatively short period of time. For many
acquisitions, the Company believes that projections of future cash flows justify
payment of amounts in excess of the book or market value of the assets acquired,
resulting in goodwill being recorded.

   The Company's results are subject to moderate seasonality, primarily due to
fluctuations in the demand for propane, which is highest during winter months
falling in the Company's second and third fiscal quarters. Seasonality of total
sales has increased as propane sales as a percentage of total sales have
increased.

   Operating and administrative expenses are comprised primarily of salaries,
benefits, transportation equipment operating costs, facility lease expenses and
general office expenses. These expenses are generally fixed on a quarter-
to-quarter basis. The Company believes that changes in these expenses as a
percentage of sales should be evaluated over the long term rather than on a
quarter-to-quarter basis due to the seasonality of sales mentioned above and the
generally fixed nature of these expenses.

   Historically, the Company's gross profit margins as a percentage of sales
have been higher on the sale of gases than on the sale of welding equipment and
supplies ("hard goods"). As a result of recent acquisitions of some distributors
with a higher proportion of hard goods to gas sales, the Company's average gross
profit as a percentage of sales, in some cases, has decreased in comparison to
prior years. Future acquisitions may affect this pattern depending upon the
product mix of the acquired businesses.

RESULTS OF OPERATIONS

Comparison of Three Months Ended March 31, 2001 and 2000

   Net sales increased 11.5%, or $4.2 million, to $41.1 million from $36.9
million for the three months ended March 31, 2001 and 2000, respectively.
Acquisitions made during the preceeding twelve months contributed $0.6 million
of the increase in net sales, while same store sales increased $3.6 million.
Same store sales increased 9.9% versus the same quarter last year. Gases and
cylinder revenue represented 65.1% of net sales for the three months ended March
31, 2001, with hard goods representing 34.9%. In comparison, net sales for the
three months ended March 31, 2000 reflected gases and cylinder revenue as 57.5%
and hard goods as 42.5%. The increase in gases and cylinder revenue as a
percentage of total net sales reflects, primarily, the improvement in same store
sales and the impact of the product mix of acquisitions made over the last
twelve months.

   Gross profit, which excludes depreciation and amortization, increased 13.5%,
or $2.5 million, to $20.6 million from $18.1 million for the three months ended
March 31, 2001 and 2000, respectively. Acquisitions made during the last twelve
months contributed $0.3 million of the change with same stores gross profit
increasing $2.2 million.




                                     - 12 -
<PAGE>   13

Gross profit as a percentage of net sales was 50.2% for the three months ended
March 31, 2001, compared to 49.3% for the three months ended March 31, 2000.

   Operating and administrative expenses increased 15.3%, or $1.8 million, to
$13.8 million from $12.0 million for the three months ended March 31, 2001 and
2000, respectively. Of this increase, $0.3 million was related to acquired
businesses while base business increased $1.5 million. Operating and
administrative expenses as a percentage of sales were 33.6% for the three months
ended March 31, 2001, as compared to 32.5% for the same quarter in 2000.

   Depreciation and amortization expense remained the same for the three months
ended March 31, 2001 compared to the same period in 2000.

   Interest expense increased $0.6 million for the quarter, reflecting primarily
the Company's adoption of SFAS No.133.

   Net earnings remained the same for the three months ended March 31, 2001
compared to the same period in 2000.

Comparison of Nine Months Ended March 31, 2001 and 2000

   Net sales increased 15.9%, or $14.9 million, to $108.5 million from $93.6
million for the nine months ended March 31, 2001 and 2000, respectively.
Acquisitions made during the preceding twelve months contributed $6.4 million of
the increase in net sales, while same store sales increased $8.5 million. Same
store sales increased 9.1% versus the same period last year. Gases and cylinder
revenue represented 60.7% of net sales for the nine months ended March 31, 2001,
with hard goods representing 39.3%. In comparison, net sales for the nine months
ended March 31, 2000 reflected gases and cylinder revenue as 55.8% and hard
goods as 44.2%. This change in sales mix reflects the effect of acquisitions
made during the preceding twelve months and the before mentioned factors that
affected same store sales.

   Gross profit, which excludes depreciation and amortization, increased 17.2%,
or $8.1 million, to $55.6 million from $47.5 million for the nine months ended
March 31, 2001 and 2000, respectively. Acquisitions made during the preceeding
twelve months contributed $3.5 million of the increase in gross profit, while
the gross profit in the base business increased $4.6 million. Gross profit as a
percentage of net sales was 51.3% for the nine months ended March 31, 2001,
compared to 50.7% for the nine months ended March 31, 2000. This change
reflected an increase in the proportion of gas and cylinder rent sales, which
have a higher gross profit margin as a percentage of net sales than hardgoods.

   Operating and administrative expenses increased 17.8%, or $5.7 million, to
$37.6 million from $31.9 million for the nine months ended March 31, 2001 and
2000, respectively. Of this increase, $2.7 million was related to acquired
businesses and the remaining $3.0 million reflected increases on a same store
basis. Operating and administrative expenses as a percentage of sales were 34.7%
for the nine months ended March 31, 2001, as compared to 34.1% for the same
period in 2000.

   Depreciation and amortization expense increased $0.6 million for the nine
months ended March 31, 2001 compared to the same period in 2000, reflecting the
increase from acquisitions made during the last twelve months.

   Interest expense increased $1.2 million for the nine months ended March 31,
2001, reflecting the financing of acquisitions made during the last twelve
months and the Company's adoption of SFAS No. 133 which increased interest
expense by $0.3 million.

   Net earnings increased 14.5% to $3.3 million for the nine months ended
March 31, 2001 compared to $2.9 million for the same period last year.



                                     - 13 -
<PAGE>   14

LIQUIDITY AND CAPITAL RESOURCES

   Historically, the Company has financed its operations, capital expenditures
and debt service with funds provided from operating activities. Acquisitions
have been financed by a combination of seller financing, bank borrowings and
funds generated from operations.

   At March 31, 2001, the Company had working capital of approximately $13.6
million. Funds provided by operations for the nine months ended March 31, 2001
were approximately $8.7 million. Funds used for investing activities were
approximately $7.3 million for the nine months ended March 31, 2001, consisting
primarily of capital spending and an acquisition. Uses of funds from financing
activities for the nine months ended March 31, 2001 were approximately $1.9
million from net principal payments. The Company's cash balance decreased $0.5
million during the nine months to $0.3 million.

   On May 1, 2000, the Company entered into a second amended and restated credit
agreement with Bank One, as agent. This agreement increased the maximum
revolving note borrowings to $100 million, from the previous maximum borrowings
level of $75.3 million, and extended the maturity of the revolving note to April
30, 2003. The agreement permits the Company, on an annual basis, to request that
the maturity be extended one year. No significant changes were made to pricing
and the covenant requirements when compared to the original agreement. The
weighted average interest rate for substantially all of the borrowings under the
credit facility was 6.9% as of March 31, 2001. As of March 31, 2001,
availability under the revolving loan was approximately $38.3 million, with
outstanding borrowings of approximately $55.6 million and outstanding letters of
credit of approximately $5.9 million. The credit facility is secured by all of
the Company's assets. The revolving loan is used primarily to fund acquisitions.
The Company is not required to make principal payments on outstanding balances
of the revolving loan as long as certain covenants are satisfied. Interest is
charged on both the term loan and the revolving loan at either the lender's
prime rate or various LIBOR rates, at the Company's discretion, plus an
applicable spread.

   The loan agreement for the credit facility contains various financial
covenants applicable to the Company, including covenants requiring minimum fixed
charge coverage, maximum funded debt to EBITDA, and minimum net worth. The
Company is in compliance with these covenants and believes that it will continue
to be in compliance through at least the next twelve months.

   The Company is obligated under various promissory notes related to the
financing of acquisitions that have various rates of interest, ranging from 3.7%
to 10.0% per annum, and maturities through 2010. The outstanding balance of
these notes as of March 31, 2001 was $12.7 million. Some of these notes are
secured by assets related to the applicable acquisition, some are unsecured, and
some are backed by bank letters of credit issued under the Company's credit
facility.

   The Company enters into contractual agreements in the ordinary course of
business to hedge its exposure to interest rate risks. Counter parties to these
agreements are major financial institutions. Management believes the risk of
incurring losses related to credit risk is remote and any losses would be
immaterial.

   Interest rate swap agreements are used to reduce interest rate risks and
costs inherent in the Company's debt portfolio. The Company enters into these
agreements to change the fixed/variable interest rate mix of the debt portfolio
in order to maintain the percentage of fixed and variable debt within certain
parameters set by management. Accordingly, the Company enters into agreements to
effectively convert variable-rate debt to fixed-rate debt.

   As of March 31, 2001, the Company had $60.0 million in notional amounts
outstanding under interest rate swap agreements. These swaps have an average pay
rate of 5.9% versus a receive rate of 5.1%.



                                     - 14 -
<PAGE>   15

   The Company has previously entered into a put/call option agreement with an
independent distributor for the purchase of the distributor's business. This
option becomes exercisable beginning in the year 2002 and ending in the year
2008. The Company believes that it will have adequate capital resources
available to fund this acquisition at such time that the option is exercised.

   The Company believes that cash generated from operations, borrowing
availability under its credit facility and the ability to obtain financing with
sellers of businesses will be sufficient to satisfy the Company's requirements
for operating funds, capital expenditures and future acquisitions for at least
the next twelve months.

FLUCTUATIONS IN QUARTERLY RESULTS

   The Company generally has experienced higher sales activity during its second
and third quarters as a result of seasonal sales of propane, with corresponding
lower sales for the first and fourth quarters. As a result, income from
operations and net income typically are higher for the second and third quarters
than for the first and fourth quarters of the fiscal year.

INFLATION

   The impact of inflation on the Company's operating results has been moderate
in recent years, reflecting generally low rates of inflation in the economy and
the Company's historical ability to pass purchase price increases to its
customers in the form of sales price increases. While inflation has not had, and
the Company does not expect that it will have, a material impact upon operating
results, there is no assurance that the Company's business will not be affected
by inflation in the future.

SUBSEQUENT EVENTS

    On April 2, 2001, the Company acquired the assets of the Moorefield, WV and
Franklin, WV operations of Dixie Gas and Oil, Inc., propane distributors having
approximately $2.5 million in annualized sales. This transaction was financed
through the Company's credit facility.

   On April 26, 2001, the Company entered into an agreement to acquire eight
branches from Air Liquide America Corporation. These branches, which include the
three branches of Tampa Oxygen & Welding Supply, have approximately $11.0
million in annual sales. This transaction is expected to be completed on or
about May 16, 2001 and will be financed through the Company's credit facility.

CAUTIONARY STATEMENTS

   This form 10-Q contains forward-looking statements within the meaning of
federal securities laws that may include statements regarding intent, belief or
current expectations of the Company and its management. These forward-looking
statements are not guarantees of future performance and involve a number of
risks and uncertainties that may cause the Company's actual results to differ
materially from the results discussed in these statements. Important factors
that may affect the Company's ability to achieve the results expressed in the
forward-looking statements include, but are not limited to, the Company's
ability to (i)accurately identify attractive acquisition targets and make
accurate predictions regarding the performance of those businesses if integrated
into the Company's operations, (ii) successfully negotiate agreements for the
acquisition of those businesses, (iii) integrate the operations of the acquired
businesses as anticipated, (iv) secure financing necessary to make acquisitions,
including maintaining and/or expanding its line of credit, negotiating seller
financing, or securing other financing methods, (v) manage rapid growth, (vi)
effectively compete, (vii) attract and retain key personnel, (viii) maintain
good




                                     - 15 -
<PAGE>   16

relationships with suppliers and locate alternative suppliers if needed, and
other risks and uncertainties detailed from time to time in the Company's
filings with the Securities and Exchange Commission. We do not intend to update
any of the forward-looking statements after the date of this Form 10-Q to
conform them to actual results.


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   No change has occurred since the filing by the Registrant on Form 10-K for
the year ended June 30, 1999. Reference is made to Part II, Item 7A,
Quantitative and Qualitative Disclosures About Market Risk, in the Registrant's
Annual Report on Form 10-K for the year ended June 30, 2000.

   There was no change to the composition of the Company's fixed and variable
rate long-term debt or interest rate swaps during the nine months ended March
31, 2001. As of March 31, 2001 the Company's average pay rate for these swaps
was 5.9% compared to its average receive rate of 5.1%.



                           PART II. OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a)    Exhibits:

               See the Exhibit Index on page 18.

        (b)    Reports on Form 8-K:

               No reports on Form 8-K were made during the quarter.





                                     - 16 -
<PAGE>   17



                                   SIGNATURES



   Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                       VALLEY NATIONAL GASES INCORPORATED



May 15, 2001                           /s/ Robert D. Scherich
                                       -----------------------------------
                                       Robert D. Scherich
                                       Chief Financial Officer




                                     - 17 -
<PAGE>   18





                                  EXHIBIT INDEX


Exhibit Number   Description
--------------   -------------------------------------------------------------

None



                                     - 18 -