UPDATE 2-Airgas CEO says company not yet 'out of the woods'
* CEO says demand still weak, but sees positive signs
* Says splitting company's CEO, chairman roles unwise
* Says S&P 500 membership bittersweet due to recession (Recasts with recent pickup; adds acquisition, index and growth information; updates stock price)
By Ernest Scheyder
NEW YORK, Sept 25 (Reuters) - Airgas Inc (ARG.N) has not yet fully emerged from the damage wrought by the recession, though a recent pickup in orders is encouraging, the chief executive of the specialty gases supplier said on Friday.
The company, whose gases are used in refrigeration, construction and other markets, expects fiscal 2010 profit to slide about 12 percent even though it has been aggressively cutting costs and acquiring small competitors to lift market share.
"We've seen some recent activity that is cause for optimism, but we're not out of the woods yet," Peter McCausland told Reuters, adding that the company has seen a "pickup in the last couple of weeks" with "some leading indicator-type orders" that might be expected in the first stages of an economic recovery.
McCausland brushed off any concerns about him filling both the chairman and CEO roles, saying splitting them is "the dumbest idea" he's ever heard.
"Separating the two would slow the company down," he said. "I don't see where the shareholders would get any more protection or attention or respect."
He added, "I run a company that's never abused its shareholders."
GROWING THE BUSINESS
McCausland, 59, founded Radnor, Pennsylvania-based Airgas in 1982.
Since then, he has led the company through more than 350 acquisitions that have substantially boosted market share.
Airgas is currently the largest supplier of packaged gas -- such as oxygen and nitrogen -- in the United States.
The company generates much of its cash by renting out the cylinders that hold the gas it sells. Each cylinder -- it has more than 10 million -- costs Airgas about $150 and is rented out for $60 per year, with a 50-year service life.
To help fuel future acquisitions, the company recently launched a $400 million debt offering that was substantially oversubscribed.
Growing through acquisitions -- rather than building new plants -- is a key part of Airgas' growth plan, McCausland said.
Airgas was added to the Standard & Poor's 500 index earlier this month, a move McCausland described as "bittersweet."
"It's nice to have the validation of your strategies and your hard work," he said. "On the other hand, this is the toughest business environment I've ever seen.
Shares of Airgas fell 68 cents, or 1.4 percent, to $47.34 in late afternoon trading on the New York Stock Exchange on Friday. The stock has traded between $26.29 and $51.88 in the past 52 weeks. (Reporting by Ernest Scheyder; Editing by Richard Chang, Gary Hill)
