-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RHpilOCuwdsPl5bW/wiAWeOWL39Ec5bA+h2PCBhgyrmM6H9BvHbNBZ4g1ruDo2Be fOODdc1Jbn29kivlTs9g8Q== 0000950152-02-002926.txt : 20020416 0000950152-02-002926.hdr.sgml : 20020416 ACCESSION NUMBER: 0000950152-02-002926 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020228 FILED AS OF DATE: 20020412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROBBINS & MYERS INC CENTRAL INDEX KEY: 0000084290 STANDARD INDUSTRIAL CLASSIFICATION: PUMPS & PUMPING EQUIPMENT [3561] IRS NUMBER: 310424220 STATE OF INCORPORATION: OH FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00288 FILM NUMBER: 02609076 BUSINESS ADDRESS: STREET 1: 1400 KETTERING TWR CITY: DAYTON STATE: OH ZIP: 45423 BUSINESS PHONE: 9372222610 MAIL ADDRESS: STREET 1: 1400 KETTERING TOWER CITY: DAYTON STATE: OH ZIP: 45423 10-Q 1 l93785ae10-q.htm ROBBINS AND MYERS, INC. FORM 10-Q e10-q
Table of Contents

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended February 28, 2002 File Number 0-288

Robbins & Myers, Inc
(Exact name of registrant as specified in its charter)
     
Ohio   31-0424220

(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
     
1400 Kettering Tower, Dayton, Ohio   45423

(Address of Principal executive offices)   (Zip Code)
       
Registrant’s telephone number including area code   (937) 222-2610
 

None

Former name, former address and former fiscal year if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes      X        No            

Common shares, without par value, outstanding as of February 28, 2002: 11,838,523

1


CONSOLIDATED CONDENSED BALANCE SHEET
CONSOLIDATED CONDENSED INCOME STATEMENT
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Part I—Management’s Discussion and Analysis of Financial Condition and Results of Operations
Part II—Other Information
SIGNATURES
INDEX TO EXHIBITS


Table of Contents

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)

                       
          February 28,   August 31,
          2002   2001
         
 
          (Unaudited)        
ASSETS
               
Current Assets
               
 
Cash and cash equivalents
  $ 10,307     $ 16,122  
 
Accounts receivable
    98,722       105,294  
 
Inventories:
               
   
Finished products
    27,764       35,638  
   
Work in process
    30,137       37,290  
   
Raw materials
    47,260       44,049  
 
   
     
 
 
    105,161       116,977  
 
Other current assets
    14,131       13,084  
 
Deferred taxes
    15,891       16,336  
 
   
     
 
     
Total Current Assets
    244,212       267,813  
Goodwill
    253,230       220,648  
Other Intangible Assets
    16,602       14,799  
Other Assets
    8,148       7,603  
Property, Plant and Equipment
    249,674       252,933  
 
Less accumulated depreciation
    (109,664 )     (103,536 )
 
   
     
 
 
    140,010       149,397  
 
   
     
 
 
  $ 662,202     $ 660,260  
 
   
     
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current Liabilities
               
 
Accounts payable
  $ 37,352     $ 43,018  
 
Accrued expenses
    74,693       88,560  
 
Current portion of long-term debt
    9,019       17,669  
 
   
     
 
     
Total Current Liabilities
    121,064       149,247  
Long-Term Debt-Less Current Portion
    268,072       241,225  
Deferred Taxes
    7,850       7,414  
Other Long-Term Liabilities
    53,428       56,420  
Minority Interest
    7,995       8,052  
Shareholders’ Equity
           
 
Common stock
    48,118       46,333  
 
Retained earnings
    173,178       164,864  
 
Accumulated other comprehensive loss
    (17,503 )     (13,295 )
 
   
     
 
 
    203,793       197,902  
 
   
     
 
 
  $ 662,202     $ 660,260  
 
   
     
 

See Notes to Consolidated Condensed Financial Statements

2


Table of Contents

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENT
(In thousands, except per share data)
(Unaudited)

                                   
      Three Months Ended   Six Months Ended
      February 28,   February 28,
     
 
      2002   2001   2002   2001
     
 
 
 
Net sales
  $ 130,002     $ 104,244     $ 269,389     $ 200,271  
Cost of sales
    86,480       69,306       178,923       132,143  
 
   
     
     
     
 
Gross profit
    43,522       34,938       90,466       68,128  
SG&A expenses
    31,672       22,443       65,433       43,492  
Amortization expense
    623       2,016       1,181       3,928  
Other
    0       (25 )     0       (25 )
 
   
     
     
     
 
 
    11,227       10,504       23,852       20,733  
Interest expense
    4,566       3,059       8,619       5,963  
 
   
     
     
     
 
Income before income taxes and minority interest
    6,661       7,445       15,233       14,770  
Income tax expense
    2,228       2,531       5,100       5,020  
Minority interest
    263       275       522       527  
 
   
     
     
     
 
Net income
  $ 4,170     $ 4,639     $ 9,611     $ 9,223  
 
   
     
     
     
 
Net income per share:
                               
 
Basic
  $ 0.35     $ 0.42     $ 0.81     $ 0.84  
 
   
     
     
     
 
 
Diluted
  $ 0.34     $ 0.39     $ 0.76     $ 0.78  
 
   
     
     
     
 
Dividends per share:
                               
 
Declared
  $ 0.055     $ 0.055     $ 0.110     $ 0.110  
 
   
     
     
     
 
 
Paid
  $ 0.055     $ 0.055     $ 0.110     $ 0.110  
 
   
     
     
     
 

See Notes to Consolidated Condensed Financial Statements

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ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)

                       
          Six Months Ended
          February 28,
         
          2002   2001
         
 
Operating Activities:
               
 
Net income
  $ 9,611     $ 9,223  
 
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
               
   
Depreciation
    10,441       8,235  
   
Amortization
    1,181       3,928  
   
Deferred taxes
    (571 )     0  
   
Performance stock awards
    125       0  
   
Changes in operating assets and liabilities:
               
     
Accounts receivable
    4,144       1,859  
     
Inventories
    8,851       (6,416 )
     
Accounts payable
    (4,692 )     (3,011 )
     
Accrued expenses
    (12,287 )     (5,971 )
     
Other
    (1,491 )     (684 )
 
   
     
 
Net Cash and Cash Equivalents Provided by Operating Activities
    15,312       7,163  
Investing Activities:
               
 
Capital expenditures, net of nominal disposals
    (9,625 )     (7,550 )
 
Proceeds from sale of equipment
    4,200     0
 
Amended credit agreement fees
    (1,871 )     0  
 
Romaco earnout payment and acquisition costs
    (18,919 )     0  
 
Purchase of Rodec
    0       (2,763 )
 
   
     
 
Net Cash and Cash Equivalents Used by Investing Activities
    (26,215 )     (10,313 )
Financing Activities:
               
 
Proceeds from debt borrowings
    42,362       21,636  
 
Payments of long-term debt
    (37,637 )     (16,855 )
 
Proceeds from sale of common stock
    1,660       1,517  
 
Dividends paid
    (1,297 )     (1,208 )
 
   
     
 
Net Cash and Cash Equivalents Provided by Financing Activities
    5,088       5,090  
 
   
     
 
(Decrease) Increase in Cash and Cash Equivalents
    (5,815 )     1,940  
Cash and Cash Equivalents at Beginning of Period
    16,122       11,244  
 
   
     
 
Cash and Cash Equivalents at End of Period
  $ 10,307     $ 13,184  
 
   
     
 

See Notes to Consolidated Condensed Financial Statements

4


Table of Contents

ROBBINS & MYERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
February 28, 2002
(Unaudited)

NOTE 1—Preparation of Financial Statements

In the opinion of management, the accompanying unaudited consolidated condensed financial statements of Robbins & Myers, Inc. and subsidiaries (“Company”) contain all adjustments, consisting of normally recurring items, necessary to present fairly the financial condition of the Company and its subsidiaries as of February 28, 2002, and August 31, 2001, the results of their operations for the three and six month periods ended February 28, 2002 and 2001, and their cash flows for the six month periods ended February 28, 2002 and 2001. All intercompany transactions have been eliminated. Certain amounts in the prior period financial statements have been reclassified to conform to the current year presentation.

NOTE 2—Business Acquisitions

On August 31, 2001, the Company purchased the stock of Romaco N.V., a Netherland Antilles corporation (“Romaco”). The results of Romaco are not included in the Company’s Consolidated Condensed Income Statement for the three and six month periods ended February 28, 2001. Following are the unaudited pro-forma consolidated results of operations of the Company assuming the acquisition of Romaco had occurred at the beginning of fiscal year 2001. In preparing the pro-forma data, adjustments have been made to the historical financial information. These are primarily interest costs related to financing the transaction, adjustments to corporate costs and income taxes. There is no amortization of the Romaco goodwill included in the pro-forma amounts.

                 
    Three Months Ended   Six Months Ended
    February 28, 2001   February 28, 2001
   
 
    (In thousands, except per share data)
Sales
  $ 141,103     $ 274,774  
Net income
    5,687       11,447  
Basic net income per share
    0.49       0.99  
Diluted net income per share
    0.45       0.90  

5


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NOTE 3—New Accounting Pronouncement

As of September 1, 2001, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which addresses the financial accounting and reporting standards for the acquisition of intangible assets outside of a business combination and for goodwill and other intangible assets subsequent to their acquisition. This accounting standard requires that goodwill be separately disclosed from other intangible assets in the statement of financial position, and no longer be amortized, but tested for impairment on a periodic basis. The provisions of this accounting standard also require the completion of a transitional impairment test within six months of adoption. There were no indicators of impairment identified by the Company as a result of the transitional impairment test.

In accordance with SFAS No. 142, the Company discontinued the amortization of goodwill effective September 1, 2001. A reconciliation of previously reported net income and earnings per share to the amounts adjusted for the exclusion of goodwill amortization, net of the related income tax effect follows:

                   
      Three Months Ended   Six Month Ended
      February 28, 2001   February 28, 2001
     
 
      (In thousands, except per share data)
Reported net income
  $ 4,639     $ 9,223  
Goodwill amortization, net of tax
    842       1,684  
 
   
     
 
Adjusted net income
  $ 5,481     $ 10,907  
 
   
     
 
Basic earnings per common share
               
 
Reported net income
  $ 0.42     $ 0.84  
 
Goodwill amortization, net of tax
    0.07       0.14  
 
   
     
 
 
Adjusted net income
  $ 0.49     $ 0.98  
 
   
     
 
Diluted earnings per common share
               
 
Reported net income
  $ 0.39     $ 0.78  
 
Goodwill amortization, net of tax
    0.06       0.12  
 
   
     
 
 
Adjusted net income
  $ 0.45     $ 0.90  
 
   
     
 

NOTE 4—Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the six month period ended February 28, 2002, by operating segment, are as follows:

                                 
    Pharmaceutical   Energy   Industrial        
    Segment   Segment   Segment   Total
   
 
 
 
    (In thousands)
Balance as of September 1, 2001
  $ 110,159     $ 68,026     $ 42,463     $ 220,648  
Goodwill acquired during the period
    34,969       0       0       34,969  
Translation adjustments and other
    (2,450 )     (173 )     236       (2,387 )
 
   
     
     
     
 
Balance as of February 28, 2002
  $ 142,678     $ 67,853     $ 42,699     $ 253,230  
 
   
     
     
     
 

During the quarter ended February 28, 2002, the Company recorded the earnout consideration payment to the former owner of Romaco. The earnout consideration was $32,100,000 and was paid half in cash and half in a 10.00% 5 year subordinated note. The amount of the earnout consideration was recorded as an increase to goodwill. The portion of the earnout consideration that was paid with the 10.00% subordinated note is a non-cash transaction and is therefore not reflected on the Company’s Consolidated Condensed Statement of Cash Flows.

As required by SFAS No. 142, intangible assets that do not meet the criteria for recognition apart from goodwill must be reclassified. As a result of the Company’s analysis, $3,100,000 of acquisition costs were transferred to goodwill as of September 1, 2001.

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Table of Contents

Information regarding the Company’s other intangible assets is as follows:

                                                 
    As of February 28, 2002   As of August 31, 2001
   
 
    Carrying   Accumulated           Carrying   Accumulated        
    Amount   Amortization   Net   Amount   Amortization   Net
   
 
 
 
 
 
    (In thousands)    
Patents and Trademarks
  $ 6,938     $ 1,081     $ 5,857     $ 6,662     $ 708     $ 5,954  
Non- compete Agreements
    10,734       7,481       3,253       10,655       7,016       3,639  
Financing Costs
    6,611       3,007       3,604       4,740       2,697       2,043  
Pension Intangible
    2,592       0       2,592       2,592       0       2,592  
Other
    2,470       1,174       1,296       1,705       1,134       571  
 
   
     
     
     
     
     
 
Total
  $ 29,345     $ 12,743     $ 16,602     $ 26,354     $ 11,555     $ 14,799  
 
   
     
     
     
     
     
 

NOTE 5—Net Income per Share

                                       
          Three Months Ended   Six Months Ended
          February 28,   February 28,
         
 
          2002   2001   2002   2001
         
 
 
 
          (In thousands, except per share amounts)
Numerator:
                               
 
Basic:
                               
   
Net income
  $ 4,170     $ 4,639     $ 9,611     $ 9,223  
   
Effect of dilutive securities:
                               
     
Convertible debt interest
    582       582       1,164       1,164  
 
   
     
     
     
 
 
Income attributable to diluted shares
  $ 4,752     $ 5,221     $ 10,775     $ 10,387  
 
   
     
     
     
 
Denominator:
                               
 
Basic:
                               
   
Weighted average shares
    11,832       11,014       11,802       10,991  
   
Effect of dilutive securities:
                               
     
Convertible debt
    2,191       2,191       2,191       2,191  
     
Dilutive options and restricted shares
    92       206       121       206  
 
   
     
     
     
 
 
Diluted shares
    14,115       13,411       14,114       13,388  
 
   
     
     
     
 
Basic net income per share
  $ 0.35     $ 0.42     $ 0.81     $ 0.84  
 
   
     
     
     
 
Diluted net income per share
  $ 0.34     $ 0.39     $ 0.76     $ 0.78  
 
   
     
     
     
 

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Table of Contents

NOTE 6—Long-Term Debt

           
      February 28, 2002
     
      (In thousands)
Senior debt:
       
 
Revolving credit loan
  $ 79,197  
 
Senior notes
    100,000  
 
Other
    19,918  
10.00% subordinated notes
    18,285  
6.50% Convertible subordinated notes
    59,691  
 
   
 
Total debt
    277,091  
Less current portion
    9,019  
 
   
 
 
  $ 268,072  
 
   
 

The Company entered into a Second Amended and Restated Credit Agreement (“Agreement”) on January 9, 2002. The Agreement provides that the Company may borrow on a revolving credit basis up to a maximum of $180,000,000. All outstanding amounts under the Agreement are due and payable on January 9, 2005. Interest is variable based upon formulas tied to LIBOR or prime, at the Company’s option, and is payable at least quarterly. At February 28, 2002, the weighted average interest rate for amounts outstanding under the Agreement was 4.86%. Indebtedness under the Agreement is unsecured, except for guarantees by the Company’s U.S. subsidiaries, the pledge of the stock of the Company’s U.S. subsidiaries and the pledge of the stock of certain non-U.S. subsidiaries. The Company has available borrowings of approximately $25,000,000 under the Agreement.

The Company has $100,000,000 of Senior Notes (“Senior Notes”) issued in two series. Series A in the principal amount of $70,000,000 has an interest rate of 6.76% and is due May 1, 2008, and Series B in the principal amount of $30,000,000 has an interest rate of 6.84% and is due May 1, 2010. Interest is payable semi-annually on May 1 and November 1.

The above agreements have certain restrictive covenants including limitations on cash dividends, treasury stock purchases and capital expenditures, and minimum requirements for interest coverage and leverage ratios. The amount of cash dividends and treasury stock purchases, other than in relation to stock option exercises, the Company may incur in each fiscal year is restricted to the greater of $3,500,000 or 50% of the Company’s consolidated net income for the immediately preceding fiscal year, plus a portion of any unused amounts from the preceding fiscal year.

The company has $18,285,000 of 10.00% Subordinated Notes (“Subordinated Notes”) with the former owner of Romaco. The Subordinated Notes are due in 2006 and 2007 and interest is payable quarterly.

The Company has $59,691,000 of 6.50% Convertible Subordinated Notes Due 2003 (“Convertible Subordinated Notes”). The Convertible Subordinated Notes are due on September 1, 2003, and bear interest at 6.50%, payable semi-annually on March 1 and September 1 and are convertible into common stock at a rate of $27.25 per share. Holders may convert at any time until maturity and the Company may call for redemption at a price ranging from the current price of 101.09% to 100% in fiscal 2003. The Convertible Subordinated Notes and the Subordinated Notes are subordinated to all other indebtedness of the Company.

The Company’s other debt primarily consists of unsecured non-U.S. bank lines of credit with interest rates ranging from 4.00% to 8.00%.

NOTE 7—Income Taxes

The estimated annual effective tax rate was 33.5% for the three and six month periods of fiscal 2002 and 34.0% for the three and six month periods of fiscal 2001.

8


Table of Contents

NOTE 8—Comprehensive Income

                                   
      Three Months Ended   Six Months Ended
      February 28,   February 28,
     
 
      2002   2001   2002   2001
     
 
 
 
              (In thousands)        
Net income
  $ 4,170     $ 4,639     $ 9,611     $ 9,223  
Other comprehensive income:
                               
 
Foreign currency translation
    (1,962 )     1,338       (4,208 )     (814 )
 
   
     
     
     
 
Comprehensive income
  $ 2,208     $ 5,977     $ 5,403     $ 8,409  
 
   
     
     
     
 

NOTE 9—Business Segments

Sales and Income before Interest and Taxes (“EBIT”) by operating segment is presented in the following table. As a result of the acquisition of Romaco on August 31, 2001, the Company reorganized resulting in the Company’s operations being aggregated into three reportable operating segments: Pharmaceutical, Industrial and Energy. The amounts presented for fiscal 2001 have been restated to reflect this reorganization.

                                   
      Three Months Ended   Six Months Ended
      February 28,   February 28,
     
 
      2002   2001   2002   2001
     
 
 
 
      (In thousands)
Unaffiliated customer sales:
                               
 
Pharmaceutical
  $ 79,578     $ 42,542     $ 162,783     $ 82,118  
 
Industrial
    27,727       33,236       60,170       64,206  
 
Energy
    22,697       28,466       46,436       53,947  
 
   
     
     
     
 
 
Total
  $ 130,002     $ 104,244     $ 269,389     $ 200,271  
 
   
     
     
     
 
EBIT:
                               
 
Pharmaceutical
  $ 9,156     $ 3,991     $ 17,353     $ 8,345  
 
Industrial
    463       2,168       2,733       4,420  
 
Energy
    4,278       6,788       9,090       12,645  
 
Corporate and eliminations
    (2,670 )     (2,443 )     (5,324 )     (4,677 )
 
   
     
     
     
 
 
Total
  $ 11,227     $ 10,504     $ 23,852     $ 20,733  
 
   
     
     
     
 

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Table of Contents

Part I—Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

     The following tables present the components of the Company’s consolidated income statement and segment information for the three and six month periods of fiscal 2002 and 2001.

                                 
    Three Months Ended   Six Months Ended
    February 28,   February 28,
   
 
    2002   2001   2002   2001
   
 
 
 
Net Sales
    100.0 %     100.0 %     100.0 %     100.0 %
Cost of sales
    66.5       66.5       66.4       66.0  
 
   
     
     
     
 
Gross profit
    33.5       33.5       33.6       34.0  
SG&A expenses
    24.4       21.5       24.3       21.7  
Amortization
    0.5       1.9       0.4       1.9  
Other
    0.0       0.0       0.0       0.0  
 
   
     
     
     
 
EBIT
    8.6 %     10.1 %     8.9 %     10.4 %
 
   
     
     
     
 
                                     
        Three Months Ended   Six Months Ended
        February 28,   February 28,
       
 
        2002   2001   2002   2001
       
 
 
 
        (in thousands)
Segment
                               
 
Pharmaceutical:
                               
   
Sales
  $ 79,578     $ 42,542     $ 162,783     $ 82,118  
   
EBIT Before Amortization
                       
   
  and Other
    9,300       4,470       17,581       9,274  
   
EBIT
    9,156       3,991       17,353       8,345  
   
EBIT%
    11.5 %     9.4 %     10.7 %     10.2 %
 
 
Industrial
                               
   
Sales
  $ 27,727     $ 33,236     $ 60,170     $ 64,206  
   
EBIT Before Amortization
                       
   
  and Other
    666       2,997       3,139       6,070  
   
EBIT
    463       2,168       2,733       4,420  
   
EBIT%
    1.7 %     6.5 %     4.5 %     6.9 %
 
 
Energy:
                               
   
Sales
  $ 22,697     $ 28,466     $ 46,436     $ 53,947  
   
EBIT Before Amortization
                       
   
  and Other
    4,365       7,301       9,266       13,618  
   
EBIT
    4,278       6,788       9,090       12,645  
   
EBIT%
    18.8 %     23.8 %     19.6 %     23.4 %

     On August 31, 2001, the Company purchased the stock of Romaco N.V., a Netherland Antilles corporation (“Romaco”). Romaco is consolidated in the first quarter of fiscal 2002 and is included in the Pharmaceutical Segment. Pro-forma results referenced throughout this discussion give effect as if the acquisition of Romaco had occurred on September 1, 2000.

Three months ended February 28, 2002

     Net sales for the second quarter of fiscal 2002 were $130.0 million compared to $104.2 million in the prior year. Pro-forma sales, decreased $11.1 million or 7.9%.

     The Pharmaceutical segment had sales of $79.6 million in the second quarter of fiscal 2002 compared to $42.5 million in fiscal 2001. On a pro-forma basis, the Pharmaceutical segment sales increased

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$.2 million. Pro-forma sales are flat as Romaco’s fiscal 2002 second quarter sales increased $6.1 million, or 16.6%, while the Reactor Systems product platform’s fiscal 2002 second quarter sales declined $5.9 million. Romaco’s increase in sales is due to continued strength in the pharmaceutical and healthcare markets. The decline in Reactor Systems sales is attributed to the weak specialty chemical market and slow industrial economy in the U.S. Pro-forma orders for this segment decreased from $77.4 million in the second quarter of fiscal 2001 to $67.8 million in fiscal 2002. The decrease in pro-forma orders is in the Company’s Reactor Systems business and is again due to the impact of the weak specialty chemical market and slow industrial economy in the U.S. Backlog in this segment decreased to $87.4 million at the end of the second quarter of fiscal 2002 from $108.1 million at August 31, 2001.

     The Industrial segment had sales of $27.7 million in the second quarter of fiscal 2002 compared to $33.2 million in fiscal 2001. This segment is also negatively impacted by the weak specialty chemical market as well as the slow industrial economy in the U.S. Incoming orders in this segment were $27.1 million in the second quarter of fiscal 2002 compared to $39.3 million in the second quarter of fiscal 2001. Backlog in this segment decreased to $22.3 million at the end of the second quarter of fiscal 2002 from $28.0 million at August 31, 2001.

     The Energy segment had sales of $22.7 million in the second quarter of fiscal 2002 compared to $28.5 million in fiscal 2001, a decrease of $5.8 million or 20.4%. Lower crude oil and natural gas prices have caused a reduction in exploration and production activities versus the second quarter of fiscal 2001. Incoming orders in this segment declined to $22.2 million in the second quarter of fiscal 2002, compared to $29.6 million in the second quarter of fiscal 2001. Backlog decreased to $5.2 million at the end of the second quarter of fiscal 2002 from $7.5 million at August 31, 2001.

     EBIT for the second quarter of fiscal 2002 is $11.2 million compared to $10.5 million in the second quarter of fiscal 2001. In the first quarter of fiscal 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which requires that goodwill no longer be amortized. The adoption of SFAS No. 142 resulted in a $1.4 million reduction in amortization in the second quarter of fiscal 2002. EBIT before amortization was $11.9 million in the second quarter of fiscal 2002 compared to $12.5 million in the second quarter of fiscal 2001, a decrease of $.6 million, or 4.8%.

     The Pharmaceutical segment had EBIT before amortization of $9.3 million in the second quarter of fiscal 2002 compared to $4.5 million in the second quarter of fiscal 2001. On a pro-forma basis, the Pharmaceutical segment EBIT before amortization increased $2.3 million. The increase in pro-forma EBIT before amortization is driven by Romaco’s sales growth and lower operating costs in fiscal 2002 due to personnel reductions and lower energy costs.

     The Industrial segment had EBIT before amortization of $.7 million in the second quarter of fiscal 2002 compared to $3.0 million in fiscal 2001, a reduction of $2.3 million. The reduction is primarily due to lower sales volumes. In addition selling price pressures have reduced gross margins, and the mix of products sold has shifted as sales of higher margin industrial pumps aftermarket products have declined.

     The Energy segment had EBIT before amortization of $4.4 million in the second quarter of fiscal 2002 compared to $7.3 million in fiscal 2001, a decrease of $2.9 million or 39.7%. The aforementioned decline in Energy segment sales reduced EBIT before amortization by approximately $2.3 million. The remaining decrease is due to increased research and development costs, and a change in sales mix from higher margin exploration products to lower margin wellhead products.

     Interest expense increased from $3.1 million in the second quarter of fiscal 2001 to $4.6 million in the second quarter of fiscal 2002. This was due to higher average debt levels resulting from the acquisition of Romaco, offset slightly by lower interest rates on the Company’s variable rate debt.

     The effective tax rate is 33.5% in fiscal 2002 compared to 34.0% in fiscal 2001.

Six months ended February 28, 2002

     Net sales for the six months ended February 28, 2002 were $269.4 million compared to $200.3 million for the same period of the prior year. Pro-forma sales decreased $5.4 million or 2.0%.

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     The Pharmaceutical segment had sales of $162.8 million for the six month period ended February 28, 2002 compared to $82.1 million for the same period of fiscal 2001. On a pro-forma basis, the Pharmaceutical segment sales increased $6.2 million, or 3.9%. The increase in pro-forma sales is driven by Romaco’s growth due to the strength of the pharmaceutical and healthcare markets. However, pro-forma year to date orders for this segment decreased from $154.6 million in fiscal 2001 to $142.2 million in fiscal 2002. The decrease in pro-forma orders is in the Company’s Reactor Systems business and is due to the impact of the weak specialty chemical market and slow industrial economy in the U.S.

     The Industrial segment had sales of $60.2 million for the six month period ended February 28, 2002 compared to $64.2 million in the same period of fiscal 2001. This segment is also negatively impacted by the weak specialty chemical market as well as the slow industrial economy in the U.S. Year to date incoming orders in this segment were $54.6 compared to year to date orders of $72.7 million in fiscal 2001.

     The Energy segment had sales of $46.4 million for the six month period ended February 28, 2002 compared to $53.9 million in the same period of fiscal 2001, a decrease of $7.5 million or 13.9%. Lower crude oil and natural gas prices have caused a reduction in exploration and production activities versus fiscal 2001. Incoming orders in this segment declined to $44.2 million in the first six months of fiscal 2002, compared to $57.9 million in first six months of fiscal 2001.

     EBIT for the six months ended February 28, 2002 is $23.9 million compared to $20.7 million in the six months ended February 28, 2001. In the first quarter of fiscal 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which requires that goodwill no longer be amortized. The adoption of SFAS No. 142 resulted in a $2.8 million reduction in amortization in the first six months of fiscal 2002. EBIT before amortization was $25.0 million in the first six months of fiscal 2002 compared to $24.6 million in the first six months of fiscal 2001, an increase of $.4 million, or 1.6%.

     The Pharmaceutical segment had EBIT before amortization of $17.6 million in the first six months of fiscal 2002 compared to $9.3 million in the first six months of fiscal 2001. On a pro-forma basis, the year to date Pharmaceutical segment EBIT before amortization increased $3.0 million, or 20.9%. The increase in pro-forma EBIT before amortization is driven by Romaco’s sales growth and lower personnel costs in this segment.

     The Industrial segment had EBIT before amortization of $3.1 million in the first six months of fiscal 2002 compared to $6.1 million in the first six months of fiscal 2001, a reduction of $3.0 million while sales decreased by $4.0 million. The reduction is due to the overall lower sales volumes and reduced selling prices due to the weak markets that this segment sells into. EBIT before amortization has also been negatively impacted by the mix of products sold as the volume of high margin industrial pump aftermarket products has declined significantly.

     The Energy segment had year to date EBIT before amortization of $9.3 million compared to year to date EBIT before amortization of $13.6 million in fiscal 2001, a decrease of $4.3 million or 31.6%. The aforementioned decline in Energy segment sales reduced EBIT before amortization by approximately $3.0 million. The remaining decrease is due to increased research and development costs, and a change in sales mix from higher margin exploration products to lower margin wellhead products.

     Year to date interest expense increased from $6.0 million in fiscal 2001 to $8.6 million in fiscal 2002. This was due to higher average debt levels resulting from the acquisition of Romaco, offset slightly by lower interest rates on the Company’s variable rate debt.

     The effective tax rate is 33.5% in fiscal 2002 compared to 34.0% in fiscal 2001.

12


Table of Contents

Liquidity and Capital Resources

     The Company entered into a Second Amended and Restated Credit Agreement (“Agreement”) on January 9, 2002. The Agreement provides that the Company may borrow on a revolving credit basis up to a maximum of $180.0 million. All outstanding amounts under the Agreement are due and payable on January 9, 2005. Interest is variable based upon formulas tied to LIBOR or prime, at the Company’s option, and is payable at least quarterly.

     Cash uses in the first six months of fiscal 2002 were $18.9 million in earnout payment and acquisition costs related to the Romaco acquisition, $5.3 million in semi-annual interest payments due on the Company’s Senior Notes and Convertible Subordinated Notes, $2.8 million for variable pay plans (both included in accrued expenses), $9.6 million for capital expenditures and $1.9 million for refinancing fees paid in connection with the aforementioned amended credit agreement. Cash generated from operations and borrowings under the Company’s revolving credit facility funded these cash uses. In addition, the Company received $4.2 million when certain equipment was sold under sale-leaseback arrangements.

     Cash uses in the first six months of fiscal 2001 were $5.3 million in semi-annual interest payments due on the Company’s Senior Notes and Convertible Subordinated Notes, $4.0 for variable pay plans, $2.0 million in income tax payments (all included in accrued expenses) and $7.6 million for capital expenditures. Cash generated from operations and net borrowings under the Company’s revolving credit facility funded these cash uses.

     The Company expects operating cash flow to be adequate for the remainder of fiscal year 2002 operating needs, scheduled debt service and shareholder dividend requirements. The major cash requirement for the remainder of fiscal 2002 is planned capital expenditures of approximately $7.5 million. Capital expenditures are related to additional production capacity, cost reductions and replacement items.

Market Risk

     In its normal operations the Company has market risk exposure to foreign currency exchange rates and interest rates. There has been no significant change in the Company’s exposure to these risks, which has been previously disclosed.

Forward-looking Statements

     In addition to historical information, this report contains forward-looking statements identified by use of words such as “expects,” “anticipates,” “estimates,” and similar expressions. These statements reflect the Company’s expectations at the time this report was issued. Actual events and results may differ materially from those described in the forward-looking statements. Among the factors that could cause material differences are significant declines in capital expenditures in specialty chemical and pharmaceutical industries, a major decline in oil and natural gas prices, foreign exchange rate fluctuations, continued availability of acceptable acquisition candidates, access to capital and financing and general economic conditions that can affect demand in the process industries. The Company undertakes no obligation to update or revise any forward-looking statement.

13


Table of Contents

Part II—Other Information

Item 4. Submission of Matters to a Vote of Security Holders

     
a)   The Annual Meeting of Shareholders of Robbins & Myers, Inc., (“Company”) was held on December 12, 2001.
 
b)   The Company’s Board of Directors is divided into two classes, with one class of directors elected at each annual meeting of shareholders. At the Annual Meeting on December 12, 2001 the following persons were elected directors of the Company for a term of office expiring at the annual meeting of shareholders to be held in 2003: Robert J. Kegerreis, Ph.D, William D. Manning, Maynard H. Murch IV and John N. Taylor, Jr. The other directors whose terms of office continued after the Annual Meeting are Gerald L. Connelly, Thomas P. Loftis and Jerome F. Tatar.
 
c)   At the Annual Meeting on December 12, 2001, four items were voted on by shareholders, namely:
     
1)   The election of directors in which, as noted above, Messrs. Kegerreis, Manning, Murch, and Taylor were elected:
                 
    Votes For   Votes Withheld
   
 
Robert J. Kegerreis
    9,600,244       723,606  
William D. Manning
    10,221,094       102,756  
Maynard H. Murch IV
    10,224,894       98,956  
John N. Taylor, Jr.
    10,221,094       102,756  
     
2)   An amendment to the Company’s 1999 Long-Term Incentive Plan making an additional 550,000 shares available for award was approved with 7,716,956 cast for approval, 2,593,190 against approval and 13,704 abstentions.
 
3)   The Company’s Senior Executive Annual Cash Bonus Plan was re-approved with 10,042,488 cast for approval, 269,147 against approval and 12,215 abstentions.
 
4)   Appointment of Ernst & Young LLP as independent auditors of the Company for the fiscal year ending August 31, 2002 was approved with 10,245,601 cast for approval, 74,619 against approval and 3,630 abstentions.

Item 6. Exhibits and Reports on Form 8-K

     
a)   Exhibits - none.
 
b)   Reports on Form 8-K. During the quarter ended February 28, 2002, the Company filed a Report on Form 8-K on February 8, 2002 reporting information under Item 5.

14


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

         
       
       
ROBBINS & MYERS, INC


         
         
DATE:   April 12, 2002 BY     /s/    Kevin J. Brown
   
 
        Kevin J. Brown
Vice President and Chief Financial Officer
(Principal Financial Officer)
         
         
DATE:   April 12, 2002 BY     /s/    Thomas J. Schockman
   
 
        Thomas J. Schockman
Corporate Controller
(Principal Accounting Officer)

15


Table of Contents

INDEX TO EXHIBITS

None

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