EX-99.1 2 l40836exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
Investor Relations
+1 (937) 458-6600
ROBBINS & MYERS ANNOUNCES FOURTH QUARTER
AND FULL YEAR 2010 RESULTS
Finished Fiscal 2010 with Strong Earnings and Cash Flow;
Orders and Backlog Support Expectations for Business Growth in 2011
DAYTON, OHIO, October 6, 2010...Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $0.45 for its fiscal fourth quarter ended August 31, 2010 and $1.01 for the full fiscal year, or $0.53 and $1.09, respectively, before fourth quarter restructuring charges. The Company reported DEPS of $0.39 in the prior year fourth quarter and $1.66 in the prior full year.
“Our strong earnings in the fourth quarter reflect in part the continued improvements in business conditions that began earlier this year, especially in energy markets,” said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. “Order rates continue to trend up in each of our business platforms, and we are converting these orders to more profitable sales. We expect our higher backlog levels, along with recent restructuring activities and other business initiatives, to contribute to even stronger results next year.”
Robbins & Myers had fourth quarter 2010 orders of $190 million, 55% higher than the comparable prior year period, and sales of $178 million, 15% higher. Backlog expanded sequentially for the fourth consecutive quarter, and fiscal 2010 ending backlog of $175 million is the highest level in 18 months. The Company reported fourth quarter 2010 earnings before interest and taxes (EBIT) of $22 million, 46% higher than the prior year quarter, despite of incurring nearly $3 million of restructuring charges in its Process Solutions Group. Before these special charges, operating margins grew 410 basis points to 13.6%. Cash flow from operating activities was $31 million in the quarter, higher than the $27 million generated in the prior year fourth quarter.
Full year 2010 orders of $641 million were 16% higher than the prior year due to recovery in the Company’s end markets. Sales of $585 million were 9% lower due to the prior year benefiting from a large beginning backlog of orders. The Company had full year EBIT of $51 million in 2010, including nearly $3 million of restructuring charges, and reported operating margins of 9.2% versus 11.6% in the prior year. Robbins & Myers generated $88 million of cash from operating activities in 2010, 71% higher than the prior year and nearly matching 2008 record levels.
“We started 2010 with difficult business conditions and a strong commitment to control costs, investments and working capital,” said Mr. Wallace. “As a result, we created significant cash flow throughout the year and repaid all of our debt. Profits accelerated when business levels improved in the second half of the year. We also preserved and funded those programs vital to the long-term success of Robbins & Myers.
“We expect recent favorable market trends to continue into fiscal 2011. Demand for our energy products remains robust, industrial demand is improving, and we expect to see a

 


 

continued slow recovery in demand for capital goods serving Western chemical markets. Enterprise initiatives will be focused primarily on growth, including improving sales, product management and aftermarket capabilities; commercializing new products; and, increasing strategic activities. We will continue to create a more competitive cost structure through lean activities and other targeted programs. Robbins & Myers is well-positioned to execute its long-term strategy of profitable growth to create shareholder value.”
The Company expects fiscal 2011 DEPS of $1.45-$1.65 and first quarter DEPS of $0.25-$0.35, without the cost of restructuring actions. These forecasts also exclude the financial impact from the separately-announced proposed acquisition of T-3 Energy Services, Inc.
Fourth Quarter Results by Segment
All comparisons are made against the comparable year-ago quarterly period unless otherwise stated.
In January 2010, the Company announced a realignment of its businesses that included moving its Chemineer US and Asian operations from the Process Solutions Group to the Fluid Management Group. All results included in this press release have been adjusted to reflect the new operating and reporting structure. A recasting of quarterly segment results for fiscal 2007 through 2009 can be viewed in the “Investor Presentations” page of the “Investor Relations” section of the Company’s website, www.robn.com.
The Company’s Fluid Management segment reported orders of $100 million, up 72%, due primarily to strength in energy markets. Sales of $93 million were 37% higher, and EBIT doubled to $25 million. EBIT margins of 26.6% were 850 basis points higher than the prior year. Ending backlog of $58 million is the highest since the first half of fiscal 2009.
The Process Solutions segment reported orders of $55 million, 52% higher than the trough levels of a year ago. Demand for capital goods in Western chemical markets remains weak, while demand in Asian markets is favorable. Sales of $46 million were 8% lower, and the business had breakeven EBIT without $2.8 million of restructuring costs in the fourth quarter of 2010. In the prior year, the business reported $1 million of EBIT. Ending backlog of $79 million is the highest since the first quarter of fiscal 2009.
The Romaco segment had orders of $35 million, an increase of 24%. Backlog increased 23% to $38 million, excluding from the prior year backlog the $9 million order that was originally recorded in fiscal 2006 and cancelled in the second quarter of fiscal 2010. Sales increased 5% to $38 million, and EBIT declined 20% to $3 million.
Conference Call to Be Held Today, October 6 at 3:00 PM (Eastern)
A conference call to discuss these results, as well as Robbins & Myers’ proposed acquisition of T-3 Energy Services, Inc., has been scheduled for 3:00 PM Eastern on Wednesday, October 6, 2010. The call can be accessed at www.robn.com or by dialing 866-713-8565 (US/Canada) or +1-617-597-5324, using conference ID #53995824. Replays of the call can be accessed by dialing 888-286-8010 (U.S./Canada) or +1-617-801-6888, both using replay ID #66648343.

 


 

About Robbins & Myers
Robbins & Myers, Inc. is a leading supplier of engineered equipment and systems for critical applications in global energy, industrial, chemical and pharmaceutical markets.
In this release the Company refers various non-GAAP measures. The Company uses these measures to evaluate its performance and believes these measures are helpful to investors in assessing its performance. A reconciliation of EBIT to net income is included in our Condensed Consolidated Income Statement. A reconciliation of diluted earnings per share is provided later in this release. EBIT is not a measure of cash available for use by the Company.
In addition to historical information, this press release contains forward-looking statements identified by use of words such as “expects,” “anticipates,” “believes,” and similar expressions. These statements reflect management’s current expectations and involve known and unknown risks, uncertainties, contingencies and other factors that could cause actual results, performance or achievements to differ materially from those stated. The most significant of these risks and uncertainties are described in our Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission and include, but are not limited to: the cyclical nature of some of our markets; a significant decline in capital expenditures in our primary markets; a major decline in oil and natural gas prices; reduced demand due to the general worldwide economic downturn and general credit market crises; our ability to realize the benefits of our restructuring programs; increases in competition; changes in the availability and cost of our raw materials; foreign exchange rate fluctuations as well as economic or political instability in international markets and the performance of our business in hyperinflationary environments, such as Venezuela; work stoppages related to union negotiations; customer order cancellations; the possibility of product liability lawsuits that could harm our business; events or circumstances which result in an impairment of, or valuation against, assets; the potential impact of U.S. and foreign legislation, government regulations, and other governmental action, including those relating to export and import of products and materials, and changes in the interpretation and application of such laws and regulations; the outcome of audit, compliance, administrative or investigatory reviews; proposed changes in U.S. tax law which could impact our future tax expense and cash flow; and decline in the market value of our pension plans’ investment portfolios affecting our financial condition and results of operations. Except as otherwise required by law, we do not undertake any obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date hereof.

 


 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
     (Unaudited)
                 
(in thousands)   August 31, 2010     August 31, 2009  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 149,213     $ 108,169  
Accounts receivable
    115,387       114,191  
Inventories
    97,939       105,772  
Other current assets
    7,589       11,573  
Deferred taxes
    14,164       12,519  
 
           
Total Current Assets
    384,292       352,224  
 
               
Goodwill & Other Intangible Assets
    264,106       273,476  
Deferred Taxes
    33,932       26,477  
Other Assets
    10,091       9,490  
Property, Plant & Equipment
    124,600       135,187  
 
           
 
  $ 817,021     $ 796,854  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 66,562     $ 55,918  
Accrued expenses
    90,345       68,059  
Current portion of long-term debt
    192       30,194  
 
           
Total Current Liabilities
    157,099       154,171  
 
               
Long-Term Debt — Less Current Portion
    93       265  
Deferred Taxes
    42,568       44,194  
Other Long-Term Liabilities
    126,237       115,113  
Shareholders’ Equity
    491,024       483,111  
 
           
 
  $ 817,021     $ 796,854  
 
           

 


 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENT
     (Unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    August 31,     August 31,     August 31,     August 31,  
(in thousands, except per share data)   2010     2009     2010     2009  
 
                               
Sales
  $ 178,397     $ 155,187     $ 584,694     $ 640,358  
Cost of sales
    117,791       105,235       387,746       415,861  
 
                       
Gross profit
    60,606       49,952       196,948       224,497  
SG&A expenses
    36,324       35,208       143,306       150,129  
Other expense
    2,764             2,764        
 
                       
Income before interest and income taxes
    21,518       14,744       50,878       74,368  
Interest (income) expense, net
    (211 )     140       195       382  
 
                       
Income before income taxes
    21,729       14,604       50,683       73,986  
Income tax expense
    6,587       1,537       16,536       17,412  
 
                       
Net income including noncontrolling interest
    15,142       13,067       34,147       56,574  
Less: Net income attributable to noncontrolling interest
    330       260       950       1,210  
 
                       
Net income attributable to Robbins & Myers, Inc.
  $ 14,812     $ 12,807     $ 33,197     $ 55,364  
 
                       
 
                               
Net income per share:
                               
Basic
  $ 0.45     $ 0.39     $ 1.01     $ 1.67  
Diluted
  $ 0.45     $ 0.39     $ 1.01     $ 1.66  
 
                               
Weighted average common shares outstanding:
                               
Basic
    32,953       32,853       32,924       33,227  
Diluted
    33,045       32,941       33,004       33,261  

 


 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED BUSINESS SEGMENT INFORMATION
     (Unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    August 31,     August 31,     August 31,     August 31,  
(in thousands)   2010     2009     2010     2009  
 
                               
Customer Sales
                               
Fluid Management
  $ 93,481     $ 67,992     $ 308,452     $ 327,935  
Process Solutions
    46,443       50,510       169,741       199,410  
Romaco
    38,473       36,685       106,501       113,013  
 
                       
Total
  $ 178,397     $ 155,187     $ 584,694     $ 640,358  
 
                       
 
                               
Income Before Interest and Income Taxes (EBIT) (2)
                               
Fluid Management
  $ 24,858     $ 12,328     $ 75,329     $ 79,988  
Process Solutions
    (2,653 )(1)     1,101       (8,737 )(1)     8,569  
Romaco
    3,021       3,757       3,960       2,292  
Corporate and Eliminations
    (3,708 )     (2,442 )     (19,674 )     (16,481 )
 
                       
Total
  $ 21,518     $ 14,744     $ 50,878     $ 74,368  
 
                       
 
                               
Depreciation and Amortization
                               
Fluid Management
  $ 1,977     $ 2,239     $ 7,988     $ 8,275  
Process Solutions
    885       1,216       5,049       5,481  
Romaco
    564       530       2,289       2,013  
Corporate and Eliminations
    73       97       304       457  
 
                       
Total
  $ 3,499     $ 4,082     $ 15,630     $ 16,226  
 
                       
 
                               
Orders
                               
Fluid Management
  $ 99,665     $ 57,926     $ 332,619     $ 274,662  
Process Solutions
    55,295       36,348       189,329       176,648  
Romaco
    34,542       27,862       119,372       103,039  
 
                       
Total
  $ 189,502     $ 122,136     $ 641,320     $ 554,349  
 
                       
 
                               
Backlog
                               
Fluid Management
  $ 58,127     $ 35,089     $ 58,127     $ 35,089  
Process Solutions
    78,671       59,749       78,671       59,749  
Romaco
    38,276       40,139       38,276       40,139  
 
                       
Total
  $ 175,074     $ 134,977     $ 175,074     $ 134,977  
 
                       
 
(1)   Includes restructuring costs of $2.8 million related to employee termination benefits at our German facility.
 
(2)   EBIT is a non-GAAP measure. The Company uses this measure to evaluate its performance and believes this measure is helpful to investors in assessing its performance. A reconciliation of this measure to net income is included in our Condensed Consolidated Income Statement. EBIT is not a measure of cash available for use by the Company.

 


 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
     (Unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    August 31,     August 31,     August 31,     August 31,  
(in thousands)   2010     2009     2010     2009  
 
                               
Operating activities:
                               
Net income including noncontrolling interest
  $ 15,142     $ 13,067     $ 34,147     $ 56,574  
Depreciation and amortization
    3,499       4,082       15,630       16,226  
Other, net
    12,728       9,626       38,706       (20,940 )
 
                       
Cash provided by operating activities
    31,369       26,775       88,483       51,860  
 
                               
Investing activities:
                               
Capital expenditures
    (3,905 )     (4,780 )     (10,611 )     (17,694 )
Proceeds from asset sales
    1,370             2,464        
Acquisition of business, net of cash acquired
          (2,325 )           (2,325 )
 
                       
Cash used by investing activities
    (2,535 )     (7,105 )     (8,147 )     (20,019 )
 
                               
Financing activities:
                               
Payments of long-term debt, net
    (517 )     (133 )     (30,174 )     (3,168 )
Share buyback program
                      (39,114 )
Dividends paid
    (1,414 )     (1,314 )     (5,529 )     (5,243 )
Other, net
    (833 )     1,146       (194 )     2,392  
 
                       
Cash used by financing activities
    (2,764 )     (301 )     (35,897 )     (45,133 )
Exchange rate impact on cash
    446       254       (3,395 )     (1,944 )
 
                       
Increase (decrease) in cash
    26,516       19,623       41,044       (15,236 )
Cash at beginning of period
    122,697       88,546       108,169       123,405  
 
                       
Cash at end of period
  $ 149,213     $ 108,169     $ 149,213     $ 108,169  
 
                       

 


 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
RECONCILIATION OF DILUTED EARNINGS PER SHARE (DEPS) TO DILUTED EARNINGS PER SHARE EX- RESTRUCTURING COSTS
     (Unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    August 31,     August 31,     August 31,     August 31,  
(in thousands, except per share data)   2010     2009     2010     2009  
 
                               
Net income attributable to Robbins & Myers, Inc.
  $ 14,812     $ 12,807     $ 33,197     $ 55,364  
 
                               
Special items:
                               
Process Solutions segment
                               
Restructuring costs
    2,764             2,764        
 
                       
Net income ex-restructuring costs attributable to Robbins & Myers, Inc.
  $ 17,576     $ 12,807     $ 35,961     $ 55,364  
 
                       
 
                               
Diluted EPS
  $ 0.45             $ 1.01          
Per share effect of restructuring costs above
    0.08               0.08          
 
                           
Diluted EPS ex-restructuring costs
  $ 0.53             $ 1.09