Airgas Inc ARG
Q2 2012 Earnings Call Transcript

Operator: Ryan Merkel, William Blair.

Ryan Merkel - William Blair & Co.: So my first question is on pricing. It looks like we were able to get traction on price increases this quarter, but I'm wondering if the December price increase had a meaningful impact this quarter or are most of the benefits yet to come?

Peter McCausland - Chairman and CEO: Well, we only had one month of price increases for gases in this quarter and so we expect that the next quarter we'll have a significantly better impact.

Ryan Merkel - William Blair & Co.: Then secondly on strategic accounts, growth again was strong this quarter. Can this continue at a low double-digit rate and then how does that outlook look for new customer signings?

Peter McCausland - Chairman and CEO: I just attended the strategic accounts meeting that was held for two days here in Radnor, where all our segment leaders presented and we're very optimistic. I think that there is a lot of traction. The pipelines in each of these customer segments are full. We think that a lot of large customers are recognizing our value proposition, our platform and the broadest product and service offering in the industry, and not only our products and services, but all the supply chain savings that we offer to these customers. So, we're very optimistic about the outlook for strategic accounts in general and the outlook for our organization in terms of being much more efficient reduce cycle time because of the reorganization along customer segments.

Operator: Bob Koort, Goldman Sachs.

Robert Koort - Goldman Sachs: Peter, just curious if you have any sense or view on why your one rival that we can see their numbers perhaps early seem to over the last four, five years you guys have grown at pretty much the same rate in same-store sales. The last couple of quarters they have seem to stretch out in front of you, is this you think due to regional disparities? Are they taking share, do you have any concerns there?

Peter McCausland - Chairman and CEO: Just the latter first. I have no concerns regarding share. I don't think that's the case at all, and I think for years we have outgrew them in same-store sales and recently it's flipped here. I will say that and – I can't speak for them and I don't think they breakdown between Canada and the U.S., but they have got about I think it's about 35% of PDIs in Canada and there was some mention on the call about some BP hydrogen thing or something like that, that could have impacted it, but the industry is doing well and I don't begrudge them their good numbers, but I think a lot of those numbers come from Canada, and I am not familiar with the timing of their pricing actions and how much of those sales resulted from pricing actions, I don't really know. I was a little surprised by the size of their same-store sales numbers. One other thing I might comment on, they said that sales of welding equipment were very, very strong which I'm glad to hear. That is a good sign for the industry. In general, we are experiencing the same sort of thing, but I was surprised at the size of the number, and I can only speculate that pricing in Canada and perhaps other factors make up for the difference between their numbers and ours.

Robert Koort - Goldman Sachs: Then on the SAP – I know you explained. I guess, I didn't quite fully get why you are extending the roll out or why it's being delayed when it seems like to-date you guys have spoken very optimistically and enthusiastically about how that transition has been going. So, is there something that came up recently that made you change the strategy there?