Airgas, Inc. (NYSE: ARG), headquartered in Radnor Township, Pennsylvania, through its subsidiaries, is the largest U.S. distributor of industrial, medical and specialty gases (delivered in packaged or cylinder form), and hardgoods (welding, safety and related products).
Airgas, Inc. (Airgas), through its subsidiaries, is a distributor of industrial, medical and specialty gases (delivered in packaged or cylinder form), and hardgoods, such as welding equipment and supplies. Airgas is also a United States distributor of safety products, producer of nitrous oxide and dry ice, liquid carbon dioxide producer in the Southeast, and a distributor of process chemicals, refrigerants and ammonia products. The Company markets these products to its customer base through branch-based sales representatives, retail stores, strategic customer account programs, telesales, catalogs, eBusiness and independent distributors. The Company’s operations are predominantly in the United States. However, the Company does conduct operations outside of the United States, principally in Canada and, to a lesser extent, Mexico, Russia, Dubai and Europe. The Company has two segments: Distribution and All Other Operations. In November 2009, the Company acquired the assets and operations of Tri-Tech, a distributor of industrial, medical, and specialty gases and related supplies. In December, 2009, Airgas completed the acquisition of Fitch Industrial & Welding Supply. In January 2011, the Company acquired Conley Gas, Ltd., a supplier of pure gases to the specialty gas industry. In January 2011, the Company purchased two other businesses, including a beverage CO2 distributor in Texas and a provider of medical gases, equipment, and certification services in the Pacific Northwest.
Distribution Business Segment
The Distribution business segment primarily engages in the distribution of industrial, medical and specialty gases and hardgoods, and in the production of gases to supply the regional distribution companies. The Company’s air separation facilities and national specialty gas labs primarily produce gases that are sold by the Distribution business segment’s business units. Gas sales include nitrogen, oxygen, argon, helium, hydrogen, welding and fuel gases, such as acetylene, propylene and propane, carbon dioxide, nitrous oxide, ultra high purity grades, special application blends and process chemicals. Business units in the Distribution business segment also recognize rental revenue, derived from gas cylinders, cryogenic liquid containers, bulk storage tanks, tube trailers and welding and welding related equipment. Hardgoods consist of welding consumables and equipment, safety products, construction supplies, and maintenance, repair and operating supplies.
All Other Operations
The All Other Operations business segment consists of six business units. The primary products manufactured and/or distributed are carbon dioxide, dry ice (solid form of carbon dioxide), nitrous oxide, ammonia and refrigerant gases. Airgas manufactures and distributes liquid carbon dioxide, and also manufactures and distributes dry ice in the United States. Customers for carbon dioxide and dry ice include food processors, food service businesses, pharmaceutical and biotech industries, and wholesale trade and grocery outlets, with food and beverage applications accounting for approximately 70% of the market. In additionally, Airgas operates five carbon dioxide production facilities.
Airgas is a manufacturer of nitrous oxide gas in North America, with four nitrous oxide production facilities operated by the Company. Airgas Specialty Products is a distributor of anhydrous and aqua ammonia. Airgas Specialty Products operates 28 distribution facilities across the United States and purchases ammonia from suppliers under agreements. Refrigerants are used in a variety of commercial and consumer freezing and cooling applications. Airgas purchases and distributes refrigerants and provides technical and refrigerant reclamation services. The primary focus of the refrigerants business is on the sale and distribution of refrigerants, with a customer base that includes small and large heating, ventilation and air conditioning (HVAC) contractors, facility owners, transportation companies, manufacturing facilities and government agencies.
Taking a friendly approach to acquisition, Airgas succeeded by retaining existing management, allowing for local control yet integrating companies into a cohesive, larger whole. A decentralized management structure provided the basis for the company's success in a business oriented to small-scale sales and service requirements. The pooling of intellectual efforts contributed to success at the corporate level, as well. For instance, as insurance and regulatory issues became more complex, consolidation of small companies into a larger organization provided greater protection from risks unique to the industry. Airgas found willing sellers as a high level of industry accidents led to bankruptcy for companies involved in an industry self-insurance fund. Airgas implemented its own captive insurance program, but sought to reduce accidents and risk. A task force of subsidiary managers created SAFECOR, for safety, compliance, and risk management, addressing regulations of hazardous materials by the U.S. Department of Transportation, the Occupational Safety and Health Administration, and other regulatory agencies.
As an incentive to local success McCausland offered managers stock in the subsidiaries they operated; in 1992 the stock could be exchanged for Airgas stock based on the subsidiary's contribution to profits. Airgas supported internal growth at the store level in several ways. High-volume wholesale prices provided by Airgas created a wider margin for profitability and competitive pricing at the local level. As the company grew rapidly in certain markets, Airgas implemented training and education programs to ensure management and sales staff knowledgeable about packaged gas and related hard goods. Airgas increased its inventory of welding safety equipment and supplies which sold well in conjunction with welding gases. The company diversified into bulk and specialty gases, finding new customers in medical and biotechnology companies, and became a distributor of carbon dioxide used for beverages. The spring 1997 acquisition of American Dry Ice increased the company's market share of liquid carbon dioxide and added dry ice to its product list.
At the corporate level, Airgas implemented a number of measures to improve operating margins. The company formed regional distribution hubs, closed redundant operations, and divested certain manufacturing facilities and unrelated businesses. Airgas built and acquired production plants, updating technologies for separating nitrogen and oxygen from air into liquid gases through compression. New systems utilized a membrane separation process and pressure-swing absorption whereby solids, such as activated carbon, attracted gases for collection. Already the largest producer of acetylene gas nationwide, Airgas in late 1993 began construction on an acetylene gas production facility to fulfill a $15 million contract to supply Dow Corning with the gas via pipeline to that company's Midland, Michigan, plant.
During the early 1990s Airgas's acquisitions continued at the rate of two to three per month. Airgas funded acquisitions through debt and the sale of assets from unrelated businesses acquired with companies. Airgas began to purchase larger companies, with sales at $10 million to $30 million per year, and to obtain new product capabilities. From 1991 through 1996, sales at Airgas increased an average of 19 percent while earnings increased 43 percent. Also, rental fees from a supply of millions of sturdy metal cylinders used to package gas provided a reliable source of income. The fees covered the cost of the cylinders in less than four years, but the cylinders had long, useful lives, often lasting decades. In the fiscal year ending March 31, 1996, the company reported sales of $838.1 million.
In July 1996 Airgas purchased a 45 percent interest in National Welders Supply of Charlotte, North Carolina, with 45 locations in five southern states, three air separation plants, and annual sales of $120 million. The $48 million investment pushed Airgas over the $1 billion sales mark. With 600 outlets in 41 states, Canada, and Mexico, Airgas became the largest distributor of industrial, medical, and specialty gases in the United States, with sales of $1.16 billion for 1997. The company netted $23.3 million after special charges related to losses from the sale of assets from non-core businesses and from a fraudulent breach of contract by a third party supplier.
Restructuring for National Distribution in the Late 1990s
After nearly 300 acquisitions Airgas slowed its rate of expansion in distribution to concentrate on improving its operational efficiency, especially in the industrial hardware sector. Airgas built five distribution centers and streamlined a cumbersome channel of distribution which hindered quality service. To take advantage of its extensive customer base, Airgas diversified available industrial equipment and supplies to include metal fabrication tools. Airgas aimed to become the single source of welding supplies and gases for its customers as well as the low cost supplier.
Airgas expanded its range of safety and welding products through the 1996 acquisition of IPCO Safety, based in Bristol, Pennsylvania, and Rutland Tool & Supply, based in Los Angeles. IPCO sold equipment through outbound telemarketing while Rutland offered 65,000 metalworking products via direct mail. In addition to bringing in aggregate sales of $114 million, the two companies provided Airgas with a platform for national logistics in shipping from distribution centers direct to customers, handling orders placed through branch stores, catalogs, telemarketing, and the Internet. Features of the web site, launched in 1998, allowed prequalified buyers to browse the catalog, place orders, and check the status of shipments and accounts.
Airgas streamlined operations companywide, reducing the number of regional distribution hubs from 35 to 15 by September 1999. A computer database of 200,000 products brought several different product coding systems used by local distributors, as well as several computer systems, into standard alignment throughout the company. Airgas planned to build five distribution centers to serve this new structure. The structure still allowed management latitude at the store level where managers knew their markets.
While McCausland received praise from Wall Street analysts for the successful consolidation of independent distributors into Airgas, by the late 1990s he was drawing criticism. Airgas carried a high debt to capital ratio and sales reached a plateau as vendors serving Asia were affected by the financial crisis there. Wall Street responded with a low stock market valuation. Airgas, in turn, took steps to increase its cash flow. Market conditions enabled Airgas to increase the price of carbon dioxide by 6 percent and therefore compensate for higher operating expenses. The company sold certain non-core assets, including its calcium carbide and carbon products manufacturing facilities for $13 million, and divested foreign holdings in Poland, Thailand, and India, purchased during the early and middle 1990s. The 2000 acquisition of Puritan Medical Products, with $70 million in annual revenues, strengthened Airgas's presence in the high margin medical gases market. McCausland hired experienced executive talent as well. CFO Roger Millay joined Airgas from General Electric Capital Corporation in the fall of 1999. A year later Glenn Fischer arrived at Airgas as president and COO, coming from The BOC Group, the second largest producer of industrial gases worldwide.
By 2000 Airgas realized that the tools business did not generate the sales it expected. Customer overlap from gases to equipment was lower than anticipated, though personal protective gear and safety supplies produced satisfactory results. Airgas implemented the Strategic Accounts Program in 1999 to identify large customers that would benefit from Airgas's new national distribution capabilities. In an agreement with Weyerhaeuser, Airgas supplied cylinder gases, welding equipment, and related goods. In early 2000 Airgas signed a five-year agreement to provide safety supplies to Boeing manufacturing facilities nationwide. A contract with Georgia Pacific involved industrial and specialty gases and welding supplies for 14 sites nationwide.
Alliances with business-to-business web sites provided new additional outlets for sales. Airgas agreed to provide a full line of gases and hard goods through Exostar, a company that brought suppliers together with users in the aerospace and defense industries. Through SciQuest, which served top research institutions, the company provided medical and specialty gases, safety supplies, and equipment with laboratory applications. Airgas sold industrial gases and welding and safety products through supplyFORCE.com. Also, to better serve customers at its own web site, Airgas implemented several new features, including detailed product information, real-time information on order status, and the capability to customize a private catalog of frequently used products.
Airgas restructured further as the gases industry experienced a general decline in business. In 2000 sales remained flat at $1.5 billion, though net earnings increased slightly to $36.9 million. The company continued to seek ways to reduce its debt load, cutting 275 jobs, closing 30 branches, and selling non-core businesses with sales of $10 million or less. The company also sold its Jackson Dome carbon dioxide reserves and pipeline for $42 million. The system of regional hubs was further reduced to 12 companies. Airgas launched Project One, a series of improvements that included standardized administrative processes and a uniform shelf pricing strategy nationwide to reduce discounting. New prices in January 2001 involved a 10 to 12 percent increase for gases and an 8 to 10 percent increase for cylinder rentals and bulk tank services. Due to higher natural gas prices, the company increased prices for dry ice 10 to 20 percent and for carbon dioxide, 20 percent.
Long-term supply agreements with large corporations established new sources of revenue as Airgas offered supply chain management to customers with multiple manufacturing sites. In a three-year contract the company became the exclusive supplier of safety equipment to International Paper at 240 plants nationwide. In March 2001, one year after Airgas introduced 30-pound and 112-pound cylinders of chlorofluorocarbon and hydrofluorocarbon refrigerant, Greyhound Lines signed a two-year agreement to purchase air conditioning refrigerant for its fleet of 2,400 buses. For Heil Trailer International, Airgas agreed to supply cylinder gases and welding and safety supplies to six plants. A supply agreement with Textron, Inc. served more than 100 locations nationwide. For Chevron, Airgas supplied packaged gas and related products to five oil and gas exploration sites.
OVERALL
Beta: 1.14
Market Cap (Mil.): $5,808.96
Shares Outstanding (Mil.): 84.19
Annual Dividend: 1.16
Yield (%): 1.68
FINANCIALS
ARG Industry Sector
P/E (TTM): 25.93 16.66 25.53
EPS (TTM): 4.24 -- --
ROI: 5.41 26.84 17.76
ROE: 12.23 25.99 17.73
Key Dates:
1982: Peter McCausland forms Airgas as a holding company for independent packaged gas distributors.
1986: Merger with Werco creates a company large enough to take public.
1987: McCausland becomes CEO of Airgas.
1992: After 120 acquisitions over ten years, Airgas approaches revenues of $400 million.
1996: Airgas expands product list with Rutland Tool and Supply and IPCO Safety acquisitions.
1998: Repositioning begins to streamline operations and to reduce the number of regional companies from 35 to 12.
2000: Acquisition of Puritan Medical Products strengthens medical gases business; acquisitions top 300.
2002: Airgas acquires U.S. packaged gas business from Air Products and Chemicals.
Statistics:
Public Company
Incorporated: 1986
Employees: 8,500
Sales: $1.63 billion (2002)
Stock Exchanges: New York
Ticker Symbol: ARG
NAIC: 325120 Industrial Gas Manufacturing; 422690 Other Chemical and Allied Products Wholesalers; 532412 Construction, Mining, and Forestry Machinery and Equipment Rental and Leasing
Name Age Since Current Position
van Roden, John 61 2010 Chairman of the Board
McCausland, Peter 60 2010 President, Chief Executive Officer, Director
McLaughlin, Robert 53 2006 Chief Financial Officer, Senior Vice President
Cichocki, Andrew 47 2009 Division President - Process Gases & Chemicals
Powers, B. Shaun 58 2001 Division President, East
Hooper, Max 50 2005 Division President, West
Simonetta, Tony 2011 President - Airgas East
Molinini, Michael 59 2005 Chief Operating Officer, Executive Vice President
Dougherty, Robert 52 2001 Senior Vice President, Chief Information Officer
Young, Robert 59 2007 Senior Vice President, General Counsel
Wilson, Dwight 54 2004 Senior Vice President - Human Resources
Graff, Leslie 49 2006 Senior Vice President - Corporate Development
Thomas, Lee 65 1998 Director
Hovey, James 63 1999 Director
Sneed, Paula 63 1999 Director
Stout, David 56 1999 Director
Wolf, Ellen 57 2008 Director
Clancey, John 63 2010 Director
Lumpkins, Robert 2010 Director
Miller, Ted 2010 Director
Address:
259 N. Radnor-Chester Rd., Suite 100
Radnor, Pennsylvania 19087-5283
U.S.A.
Airgas, Inc. (Airgas), through its subsidiaries, is a distributor of industrial, medical and specialty gases (delivered in packaged or cylinder form), and hardgoods, such as welding equipment and supplies. Airgas is also a United States distributor of safety products, producer of nitrous oxide and dry ice, liquid carbon dioxide producer in the Southeast, and a distributor of process chemicals, refrigerants and ammonia products. The Company markets these products to its customer base through branch-based sales representatives, retail stores, strategic customer account programs, telesales, catalogs, eBusiness and independent distributors. The Company’s operations are predominantly in the United States. However, the Company does conduct operations outside of the United States, principally in Canada and, to a lesser extent, Mexico, Russia, Dubai and Europe. The Company has two segments: Distribution and All Other Operations. In November 2009, the Company acquired the assets and operations of Tri-Tech, a distributor of industrial, medical, and specialty gases and related supplies. In December, 2009, Airgas completed the acquisition of Fitch Industrial & Welding Supply. In January 2011, the Company acquired Conley Gas, Ltd., a supplier of pure gases to the specialty gas industry. In January 2011, the Company purchased two other businesses, including a beverage CO2 distributor in Texas and a provider of medical gases, equipment, and certification services in the Pacific Northwest.
Distribution Business Segment
The Distribution business segment primarily engages in the distribution of industrial, medical and specialty gases and hardgoods, and in the production of gases to supply the regional distribution companies. The Company’s air separation facilities and national specialty gas labs primarily produce gases that are sold by the Distribution business segment’s business units. Gas sales include nitrogen, oxygen, argon, helium, hydrogen, welding and fuel gases, such as acetylene, propylene and propane, carbon dioxide, nitrous oxide, ultra high purity grades, special application blends and process chemicals. Business units in the Distribution business segment also recognize rental revenue, derived from gas cylinders, cryogenic liquid containers, bulk storage tanks, tube trailers and welding and welding related equipment. Hardgoods consist of welding consumables and equipment, safety products, construction supplies, and maintenance, repair and operating supplies.
All Other Operations
The All Other Operations business segment consists of six business units. The primary products manufactured and/or distributed are carbon dioxide, dry ice (solid form of carbon dioxide), nitrous oxide, ammonia and refrigerant gases. Airgas manufactures and distributes liquid carbon dioxide, and also manufactures and distributes dry ice in the United States. Customers for carbon dioxide and dry ice include food processors, food service businesses, pharmaceutical and biotech industries, and wholesale trade and grocery outlets, with food and beverage applications accounting for approximately 70% of the market. In additionally, Airgas operates five carbon dioxide production facilities.
Airgas is a manufacturer of nitrous oxide gas in North America, with four nitrous oxide production facilities operated by the Company. Airgas Specialty Products is a distributor of anhydrous and aqua ammonia. Airgas Specialty Products operates 28 distribution facilities across the United States and purchases ammonia from suppliers under agreements. Refrigerants are used in a variety of commercial and consumer freezing and cooling applications. Airgas purchases and distributes refrigerants and provides technical and refrigerant reclamation services. The primary focus of the refrigerants business is on the sale and distribution of refrigerants, with a customer base that includes small and large heating, ventilation and air conditioning (HVAC) contractors, facility owners, transportation companies, manufacturing facilities and government agencies.
Taking a friendly approach to acquisition, Airgas succeeded by retaining existing management, allowing for local control yet integrating companies into a cohesive, larger whole. A decentralized management structure provided the basis for the company's success in a business oriented to small-scale sales and service requirements. The pooling of intellectual efforts contributed to success at the corporate level, as well. For instance, as insurance and regulatory issues became more complex, consolidation of small companies into a larger organization provided greater protection from risks unique to the industry. Airgas found willing sellers as a high level of industry accidents led to bankruptcy for companies involved in an industry self-insurance fund. Airgas implemented its own captive insurance program, but sought to reduce accidents and risk. A task force of subsidiary managers created SAFECOR, for safety, compliance, and risk management, addressing regulations of hazardous materials by the U.S. Department of Transportation, the Occupational Safety and Health Administration, and other regulatory agencies.
As an incentive to local success McCausland offered managers stock in the subsidiaries they operated; in 1992 the stock could be exchanged for Airgas stock based on the subsidiary's contribution to profits. Airgas supported internal growth at the store level in several ways. High-volume wholesale prices provided by Airgas created a wider margin for profitability and competitive pricing at the local level. As the company grew rapidly in certain markets, Airgas implemented training and education programs to ensure management and sales staff knowledgeable about packaged gas and related hard goods. Airgas increased its inventory of welding safety equipment and supplies which sold well in conjunction with welding gases. The company diversified into bulk and specialty gases, finding new customers in medical and biotechnology companies, and became a distributor of carbon dioxide used for beverages. The spring 1997 acquisition of American Dry Ice increased the company's market share of liquid carbon dioxide and added dry ice to its product list.
At the corporate level, Airgas implemented a number of measures to improve operating margins. The company formed regional distribution hubs, closed redundant operations, and divested certain manufacturing facilities and unrelated businesses. Airgas built and acquired production plants, updating technologies for separating nitrogen and oxygen from air into liquid gases through compression. New systems utilized a membrane separation process and pressure-swing absorption whereby solids, such as activated carbon, attracted gases for collection. Already the largest producer of acetylene gas nationwide, Airgas in late 1993 began construction on an acetylene gas production facility to fulfill a $15 million contract to supply Dow Corning with the gas via pipeline to that company's Midland, Michigan, plant.
During the early 1990s Airgas's acquisitions continued at the rate of two to three per month. Airgas funded acquisitions through debt and the sale of assets from unrelated businesses acquired with companies. Airgas began to purchase larger companies, with sales at $10 million to $30 million per year, and to obtain new product capabilities. From 1991 through 1996, sales at Airgas increased an average of 19 percent while earnings increased 43 percent. Also, rental fees from a supply of millions of sturdy metal cylinders used to package gas provided a reliable source of income. The fees covered the cost of the cylinders in less than four years, but the cylinders had long, useful lives, often lasting decades. In the fiscal year ending March 31, 1996, the company reported sales of $838.1 million.
In July 1996 Airgas purchased a 45 percent interest in National Welders Supply of Charlotte, North Carolina, with 45 locations in five southern states, three air separation plants, and annual sales of $120 million. The $48 million investment pushed Airgas over the $1 billion sales mark. With 600 outlets in 41 states, Canada, and Mexico, Airgas became the largest distributor of industrial, medical, and specialty gases in the United States, with sales of $1.16 billion for 1997. The company netted $23.3 million after special charges related to losses from the sale of assets from non-core businesses and from a fraudulent breach of contract by a third party supplier.
Restructuring for National Distribution in the Late 1990s
After nearly 300 acquisitions Airgas slowed its rate of expansion in distribution to concentrate on improving its operational efficiency, especially in the industrial hardware sector. Airgas built five distribution centers and streamlined a cumbersome channel of distribution which hindered quality service. To take advantage of its extensive customer base, Airgas diversified available industrial equipment and supplies to include metal fabrication tools. Airgas aimed to become the single source of welding supplies and gases for its customers as well as the low cost supplier.
Airgas expanded its range of safety and welding products through the 1996 acquisition of IPCO Safety, based in Bristol, Pennsylvania, and Rutland Tool & Supply, based in Los Angeles. IPCO sold equipment through outbound telemarketing while Rutland offered 65,000 metalworking products via direct mail. In addition to bringing in aggregate sales of $114 million, the two companies provided Airgas with a platform for national logistics in shipping from distribution centers direct to customers, handling orders placed through branch stores, catalogs, telemarketing, and the Internet. Features of the web site, launched in 1998, allowed prequalified buyers to browse the catalog, place orders, and check the status of shipments and accounts.
Airgas streamlined operations companywide, reducing the number of regional distribution hubs from 35 to 15 by September 1999. A computer database of 200,000 products brought several different product coding systems used by local distributors, as well as several computer systems, into standard alignment throughout the company. Airgas planned to build five distribution centers to serve this new structure. The structure still allowed management latitude at the store level where managers knew their markets.
While McCausland received praise from Wall Street analysts for the successful consolidation of independent distributors into Airgas, by the late 1990s he was drawing criticism. Airgas carried a high debt to capital ratio and sales reached a plateau as vendors serving Asia were affected by the financial crisis there. Wall Street responded with a low stock market valuation. Airgas, in turn, took steps to increase its cash flow. Market conditions enabled Airgas to increase the price of carbon dioxide by 6 percent and therefore compensate for higher operating expenses. The company sold certain non-core assets, including its calcium carbide and carbon products manufacturing facilities for $13 million, and divested foreign holdings in Poland, Thailand, and India, purchased during the early and middle 1990s. The 2000 acquisition of Puritan Medical Products, with $70 million in annual revenues, strengthened Airgas's presence in the high margin medical gases market. McCausland hired experienced executive talent as well. CFO Roger Millay joined Airgas from General Electric Capital Corporation in the fall of 1999. A year later Glenn Fischer arrived at Airgas as president and COO, coming from The BOC Group, the second largest producer of industrial gases worldwide.
By 2000 Airgas realized that the tools business did not generate the sales it expected. Customer overlap from gases to equipment was lower than anticipated, though personal protective gear and safety supplies produced satisfactory results. Airgas implemented the Strategic Accounts Program in 1999 to identify large customers that would benefit from Airgas's new national distribution capabilities. In an agreement with Weyerhaeuser, Airgas supplied cylinder gases, welding equipment, and related goods. In early 2000 Airgas signed a five-year agreement to provide safety supplies to Boeing manufacturing facilities nationwide. A contract with Georgia Pacific involved industrial and specialty gases and welding supplies for 14 sites nationwide.
Alliances with business-to-business web sites provided new additional outlets for sales. Airgas agreed to provide a full line of gases and hard goods through Exostar, a company that brought suppliers together with users in the aerospace and defense industries. Through SciQuest, which served top research institutions, the company provided medical and specialty gases, safety supplies, and equipment with laboratory applications. Airgas sold industrial gases and welding and safety products through supplyFORCE.com. Also, to better serve customers at its own web site, Airgas implemented several new features, including detailed product information, real-time information on order status, and the capability to customize a private catalog of frequently used products.
Airgas restructured further as the gases industry experienced a general decline in business. In 2000 sales remained flat at $1.5 billion, though net earnings increased slightly to $36.9 million. The company continued to seek ways to reduce its debt load, cutting 275 jobs, closing 30 branches, and selling non-core businesses with sales of $10 million or less. The company also sold its Jackson Dome carbon dioxide reserves and pipeline for $42 million. The system of regional hubs was further reduced to 12 companies. Airgas launched Project One, a series of improvements that included standardized administrative processes and a uniform shelf pricing strategy nationwide to reduce discounting. New prices in January 2001 involved a 10 to 12 percent increase for gases and an 8 to 10 percent increase for cylinder rentals and bulk tank services. Due to higher natural gas prices, the company increased prices for dry ice 10 to 20 percent and for carbon dioxide, 20 percent.
Long-term supply agreements with large corporations established new sources of revenue as Airgas offered supply chain management to customers with multiple manufacturing sites. In a three-year contract the company became the exclusive supplier of safety equipment to International Paper at 240 plants nationwide. In March 2001, one year after Airgas introduced 30-pound and 112-pound cylinders of chlorofluorocarbon and hydrofluorocarbon refrigerant, Greyhound Lines signed a two-year agreement to purchase air conditioning refrigerant for its fleet of 2,400 buses. For Heil Trailer International, Airgas agreed to supply cylinder gases and welding and safety supplies to six plants. A supply agreement with Textron, Inc. served more than 100 locations nationwide. For Chevron, Airgas supplied packaged gas and related products to five oil and gas exploration sites.
OVERALL
Beta: 1.14
Market Cap (Mil.): $5,808.96
Shares Outstanding (Mil.): 84.19
Annual Dividend: 1.16
Yield (%): 1.68
FINANCIALS
ARG Industry Sector
P/E (TTM): 25.93 16.66 25.53
EPS (TTM): 4.24 -- --
ROI: 5.41 26.84 17.76
ROE: 12.23 25.99 17.73
Key Dates:
1982: Peter McCausland forms Airgas as a holding company for independent packaged gas distributors.
1986: Merger with Werco creates a company large enough to take public.
1987: McCausland becomes CEO of Airgas.
1992: After 120 acquisitions over ten years, Airgas approaches revenues of $400 million.
1996: Airgas expands product list with Rutland Tool and Supply and IPCO Safety acquisitions.
1998: Repositioning begins to streamline operations and to reduce the number of regional companies from 35 to 12.
2000: Acquisition of Puritan Medical Products strengthens medical gases business; acquisitions top 300.
2002: Airgas acquires U.S. packaged gas business from Air Products and Chemicals.
Statistics:
Public Company
Incorporated: 1986
Employees: 8,500
Sales: $1.63 billion (2002)
Stock Exchanges: New York
Ticker Symbol: ARG
NAIC: 325120 Industrial Gas Manufacturing; 422690 Other Chemical and Allied Products Wholesalers; 532412 Construction, Mining, and Forestry Machinery and Equipment Rental and Leasing
Name Age Since Current Position
van Roden, John 61 2010 Chairman of the Board
McCausland, Peter 60 2010 President, Chief Executive Officer, Director
McLaughlin, Robert 53 2006 Chief Financial Officer, Senior Vice President
Cichocki, Andrew 47 2009 Division President - Process Gases & Chemicals
Powers, B. Shaun 58 2001 Division President, East
Hooper, Max 50 2005 Division President, West
Simonetta, Tony 2011 President - Airgas East
Molinini, Michael 59 2005 Chief Operating Officer, Executive Vice President
Dougherty, Robert 52 2001 Senior Vice President, Chief Information Officer
Young, Robert 59 2007 Senior Vice President, General Counsel
Wilson, Dwight 54 2004 Senior Vice President - Human Resources
Graff, Leslie 49 2006 Senior Vice President - Corporate Development
Thomas, Lee 65 1998 Director
Hovey, James 63 1999 Director
Sneed, Paula 63 1999 Director
Stout, David 56 1999 Director
Wolf, Ellen 57 2008 Director
Clancey, John 63 2010 Director
Lumpkins, Robert 2010 Director
Miller, Ted 2010 Director
Address:
259 N. Radnor-Chester Rd., Suite 100
Radnor, Pennsylvania 19087-5283
U.S.A.
Last edited: