Airgas Realigns Operations

Airgas Inc. (ARG - Snapshot Report) recently realigned its twelve regional companies into four new divisions, North, South, Central and West. Each Division will be led by its Division President, who will directly report to the Division Chief Financial Officer, Division Vice President of Human Resources, and Regional Company Presidents.

This realignment will help Airgas reap benefits from its new customized SAP information platform. The company also announced that it intends to make two new recruitments for Distribution Operations and Gases Production. All appointments are effective July 1, 2011.

The new divisions of Airgas and their leaders are as follows:

North Division: The division will be located in Cleveland, Ohio, and will be led by Shaun Powers, who has been appointed as the Division President. This division includes, Airgas Great Lakes, Airgas East and Airgas North Central Regional Companies. Prior to Airgas, Powers served as Senior Vice President at AGA and also spent 17 years with Air Products, last serving as General Manager.

South Division: The division’s headquarters will be located in Atlanta, Georgia, and will be led by Mike Rohde. This division includes, Airgas South, Airgas National Welders, and Airgas Mid America Regions. Rhode Joined Airgas in 1999 as President of Airgas Southwest and in 2000 became President of Airgas South.

Central Division: This division includes Airgas Mid South, Airgas Southwest, and Airgas Intermountain Regions and will be headed by Terry Lodge as Division President. Lodge joined Airgas in 1994 when Airgas acquired The Jimmie Jones Company, where he served as Chief Financial Officer. The headquarters of the division will be located in Tulsa, Oklahoma.

West Division: The division will be led by Max Hooper, which includes the regions of Airgas West, Airgas Northern California and Nevada, and Airgas Nor Pac Regions. He joined Airgas in 1996, as President of Airgas West. Prior to this, Hooper worked with an independent distributor Arizona Welding Equipment Company as General Manager and nine years with BOC Gases serving various roles in sales and management.

The realignment also includes the formation of Business Support Centers (BSCs) within each Airgas division. Each division will have 130 to 200 associates responsible for the Division’s financial statements and administration.

In addition, the company also made two new recruitments including Andy Cichocki, who has been appointed as Senior Vice President for Distribution Operations and Business Process Improvement. Airgas also recruited Tom Thoman as Division President for Gases Production.

Last year, Airgas reported operating income in the range of $75 to $125 million after the full implementation of SAP system at its Regional Companies. Now, the company wants to witness gains in the areas including accelerated sales growth, pricing management, and administrative and operating efficiencies. The new structure of the company will make it more responsive to the needs of the customers.

The company recently reported its fourth quarter and full year results, with fiscal revenue up 9% year over year to $4.25 billion, striding ahead of the Zacks Consensus Estimate of $4.22 billion.

Earnings per share increased by 24.6% year over year to $3.34 in fiscal 2011, ahead of the Zacks Consensus Estimate of $3.32.

Based in Randor, Pennsylvania, Airgas, through its subsidiaries, distributes industrial, medical, and specialty gases, as well as hard goods in the United States. Airgas competes with Air Products (APD - Analyst Report) and L'Air Liquide SA (AIQUY).

Currently, the company has a Zacks #3 Rank (Hold) for the short term.

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