We weren’t immune to the economic impact

While we racked up another record year, the economic downturn certainly dampened the celebration.

In the fourth quarter, we saw year-over-year declines in same-store sales and earnings.

These decreases speak to the hard times now facing the industrial markets, our core customer group, but even here there are encouraging signs of life.

To survive in this tough economic climate, many of our welding customers are moving forward with automation projects that require our expertise, gases and hardgoods. Larger, national customers are also implementing vendor consolidation initiatives that play to our strength as a strategic accounts provider, able to offer the broadest product and service offering and the largest geographic scope of any competitor in the market. During times like these, our value proposition becomes more evident to customers.

We’re experiencing a similar good news-bad news scenario in the construction market, a growing customer segment for Airgas. On one hand, there have been cancellations and delays in highway projects and the building of coal-fired plants. On the other hand, we’re selling more products to contractors building bio-fuel plants and expanding airports and refineries. And since we still have a relatively small portion of the total spend of the top U.S. construction contractors, there’s definite opportunity for growth even in a slowing economy.

And while we did see growth in all our strategic product categories last year, customer caution throttled down the growth rates. The positive news is that all of our strategic products have good long-term growth profiles due to cross-selling opportunities, favorable customer exposure, applications development and regulatory acceleration.