EX-99.1 4 l01747aexv99w1.txt EX-99.1 FINANCIAL STATEMENTS Exhibit 99.1 Financial Statements and Supplemental Schedules Robbins & Myers, Inc. Employee Savings Plan December 31, 2002 and 2001 and for the year ended December 31, 2002 with Report of Independent Auditors Robbins & Myers, Inc. Employee Savings Plan Financial Statements and Supplemental Schedules December 31, 2002 and 2001 and for the year ended December 31, 2002 TABLE OF CONTENTS Report of Independent Auditors...............................................................................1 Audited Financial Statements Statements of Net Assets Available for Benefits .............................................................2 Statement of Changes in Net Assets Available for Benefits ...................................................3 Notes to Financial Statements................................................................................4 Supplemental Schedules Schedule H, Line 4i--Schedule of Assets (Held at End of Year)................................................11 Schedule H, Line 4j--Schedule of Reportable Transactions.....................................................12
Report of Independent Auditors Corporate Benefits Committee Robbins & Myers, Inc. Employee Savings Plan We have audited the accompanying statements of net assets available for benefits of the Robbins & Myers, Inc. Employee Savings Plan as of December 31, 2002 and 2001 and related statement of changes in net assets available for benefits for the year ended December 31, 2002, as listed in the table of contents. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2002 and 2001, and the changes in its net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2002 and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP May 2, 2003 1 Robbins & Myers, Inc. Employee Savings Plan Statements of Net Assets Available for Benefits
DECEMBER 31 2002 2001 ----------- ----------- ASSETS Investments at fair value $36,797,100 $43,611,289 Participant loans at estimated fair value 1,182,417 1,137,760 ----------- ----------- Total investments 37,979,517 44,749,049 Contributions receivable: Employer 64,881 51,478 Employee 185,328 179,310 ----------- ----------- Total receivables 250,209 230,788 ----------- ----------- Net assets available for benefits $38,229,726 $44,979,837 =========== ===========
See accompanying notes. 2 Robbins & Myers, Inc. Employee Savings Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2002
ADDITIONS Employee contributions $ 2,493,281 Employer contributions 881,925 Dividend income - Robbins & Myers, Inc. common stock 54,531 Dividend and interest income 972,856 ------------ Total additions 4,402,593 DEDUCTIONS Benefits paid directly to participants 3,884,513 Net depreciation in fair value of investments 7,268,191 ------------ Total deductions 11,152,704 ------------ Net decrease (6,750,111) Net assets available for benefits, at beginning of year 44,979,837 ------------ Net assets available for benefits, at end of year $ 38,229,726 ============
See accompanying notes. 3 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements December 31, 2002 1. DESCRIPTION OF THE PLAN The following description of the Robbins & Myers, Inc. Employee Savings Plan (the Plan) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan which covers salaried employees of Robbins & Myers, Inc. (the Company) and its U.S. subsidiaries. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Each year, participants can make contributions of between 1 percent and 12 percent of pretax annual compensation, as defined by the Plan. Effective January 1, 2002, the Company contributes 50 percent of an employee's annual contribution. In prior years, the Company contributed 40 percent of an employee's annual contribution. In addition, the Company may elect to make an additional 20 percent contribution at year-end. Only the first 6 percent of an employee's annual compensation is eligible for the employer's match. PARTICIPANT LOANS Participants may borrow from their fund accounts a maximum of the lesser of 50% of their vested account balance or $50,000 reduced by the outstanding balance of loans from the Plan on the date the loan is made or by the highest outstanding loan balance in their account during the prior twelve month period. All loans must be repaid in level payments on at least a quarterly basis over a five-year period except if the loan is for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates. DISTRIBUTIONS Distributions of vested balances are available upon termination subject to the approval of the Plan Administrator, retirement after attaining age sixty-five, death, or permanent and total disability. Distributions are made in either a lump sum payment or an annuity to designated beneficiaries and joint survivors. 4 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) WITHDRAWALS Approval of voluntary hardship withdrawals are subject to the determination that an immediate and substantial financial need exists for medical, educational, home purchase, or other emergencies which cannot be reasonably satisfied by other means. VESTING Participants are immediately vested in their contributions and any earnings on these contributions. Effective January 1, 2002, matching contributions made by the Company become vested as follows:
VESTING YEARS OF VESTING SERVICE PERCENTAGE --------------------------------------------------- Less than 1 year 0% 1 year but less than 2 years 34% 2 years but less than 3 years 67% 3 years or more 100%
In 2001, the matching contributions made by the Company became vested as follows:
VESTING YEARS OF VESTING SERVICE PERCENTAGE --------------------------------------------------- Less than 1 year 0% 1 year but less than 2 years 20% 2 years but less than 3 years 40% 3 years but less than 4 years 60% 4 years but less than 5 years 80% 5 years or more 100%
PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution and allocation of (a) the Company's contribution and (b) Plan earnings. Participant's direct the investment of their contributions and earnings thereon between the investment options provided by the Plan. Company contributions are invested in the Company's common stock. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. 5 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) ADMINISTRATIVE EXPENSES Brokerage fees and other direct costs of investment are paid by the fund to which the costs are attributable. All other expenses are paid by the Company. PLAN TERMINATION Although it has not expressed an intent to do so, the Company has the right to discontinue its contributions at any time and terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their balances. PLAN AMENDMENTS The Company amended the Plan to adopt certain provisions of the "Economic Growth and Tax Relief Reconciliation Act of 2001" ("EGTRRA"). This amendment is intended as good faith compliance with the requirements of EGTRRA effective January 1, 2002. Effective January 1, 2002, the Company amended the prior year testing method for ADP and ACP tests to current year basis. The effect is a change of the limitations on contributions for nondiscrimination testing for participants who are highly compensated employees for the plan year. The Company amended certain aspects of the employer matching contributions and vesting schedule for the employer matching contributions effective January 1, 2002. Effective November 15, 2002, the Company amended the Plan to define the definitions of loan rollovers as they apply to the employees of an acquired business if the acquisition has been determined to be a distributable event and if the employees of the acquired business have been designated as Employees under the Plan. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The Plan's financial statements are prepared on the accrual basis of accounting. 6 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements. Actual results could differ from those estimates. VALUATION OF INVESTMENTS The Plan's investments are stated at fair value. The shares of registered investment companies are valued at quoted market prices that represent the net asset values of shares held by the Plan at year-end. The units of the common collective trust are based on quoted redemption values on the last business day of the Plan year. Participant loans are valued at their outstanding balances, which approximate fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. 3. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated November 4, 1996, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Company has indicated that it will take the necessary steps, if any to maintain the Plan's qualified status. 7 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 4. INVESTMENTS The fair value of individual investments that represent 5 percent or more of the Plan's fair value of assets available for benefits as of December 31 is as follows:
2002 2001 -------------------------------- Robbins & Myers, Inc. common stock $4,765,246 $5,938,640 The Vanguard Group, Inc.: Wellington Fund 5,351,369 5,946,701 Windsor Fund 5,457,063 7,500,642 U.S. Growth Fund 2,417,103 4,026,251 Retirement Savings Trust 7,991,598 6,705,504 500 Index Fund 5,361,024 7,246,606
During the year ended December 31, 2002, the Plan's investments (including investments purchased, sold as well as held during the year) appreciated (depreciated) in fair value as determined by quoted market price as follows:
NET REALIZED AND UNREALIZED APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS -------------------------------- Robbins & Myers, Inc. common stock $(1,137,629) =========== The Vanguard Group, Inc. (shares of registered investment companies): Wellington Fund $ (576,112) Windsor Fund (1,722,648) Windsor II Fund (310,936) U.S. Growth Fund (1,358,823) 500 Index Fund (1,734,508) International Growth Fund (130,781) Small-Cap Index Fund (336,635) Total Bond Market Index Fund 39,881 ----------- Total shares of registered investment companies $(6,130,562) ===========
8 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 5. NONPARTICIPANT-DIRECTED INVESTMENTS Information about the net assets relating to the nonparticipant-directed investments as of December 31 is as follows:
2002 2001 ------------------------------------ ASSETS Robbins & Myers, Inc. common stock $ 4,765,246 $ 5,938,640 Contributions receivable 76,953 51,478 ------------------------------------ NET ASSETS $ 4,842,199 $ 5,990,118 ====================================
Information about the changes in net assets relating to the nonparticipant-directed investments for the year ended December 31, 2002 is as follows: ADDITIONS Contributions $ 881,925 Interest and dividends 54,531 ------------------ 936,456 DEDUCTIONS Net depreciation in the fair value of investments 1,137,629 Benefits paid 497,724 Interfund transfers out 461,094 ------------------ 2,096,447 Net decrease (1,159,991) Net assets available for benefits, at beginning of year 5,990,118 ------------------ Net assets available for benefits, at end of year $ 4,830,127 ==================
6. TRANSACTIONS WITH RELATED PARTIES As of December 31, 2002 and 2001, the Plan held 258,981 and 253,680 shares, respectively, of Robbins & Myers, Inc. common stock in a company stock fund. During 2002, shares were purchased at a total cost of $1,491,786 and shares were sold at a total selling price of $1,527,193. 9 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 7. SUBSEQUENT EVENT On February 2, 2003, the assets and loans attributed to the accounts of Tarby Inc. employees of the Dover, Inc. 401(k) Plan were merged into the Plan. 10 SUPPLEMENTAL SCHEDULES Robbins & Myers, Inc. Employee Savings Plan Employer Identification Number 31-0424220/ Plan Number 011 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2002
DESCRIPTION OF INVESTMENTS INCLUDING MATURITY DATE IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CURRENT LESSOR OR SIMILAR PARTY PAR OR MATURING VALUE COST VALUE ---------------------------------------------------------------------------------------------------------------------- Robbins & Myers, Inc. * 258,981 shares of common stock $ 6,227,289 $ 4,765,246 The Vanguard Group, Inc.:* Wellington Fund 217,890 units of Registered Investment Company ** 5,351,369 Windsor Fund 454,755 units of Registered Investment Company ** 5,457,063 Windsor II Fund 65,848 units of Registered Investment Company ** 1,369,635 U.S. Growth Fund 200,423 units of Registered Investment Company ** 2,417,103 Retirement Savings Trust 7,991,598 units of Common Collective Trust ** 7,991,598 500 Index Fund 66,063 units of Registered Investment Company ** 5,361,024 International Growth Fund 43,541 units of Registered Investment Company ** 529,465 Prime Money Market Fund 500,984 units of Registered Investment Company ** 500,984 Small Cap Index Fund 76,935 units of Registered Investment Company ** 1,204,803 Total Bond Market Index Fund 178,113 units of Registered Investment Company ** 1,848,810 Participant Loans Interest rates from 5.25-9.50% 1,182,417 ------------------------------------- $ 6,227,289 $37,979,517 =====================================
* Party-in-interest to the Plan. ** Cost of asset is not required to be disclosed as investment is participant-directed. 11 Robbins & Myers, Inc. Employee Savings Plan Employer Identification Number 31-0424220/ Plan Number 011 Schedule H, Line 4j - Schedule of Reportable Transactions Year ended December 31, 2002
DESCRIPTION CURRENT VALUE NET IDENTITY OF OF PURCHASE SELLING COST OF OF ASSET ON GAIN PARTY INVOLVED ASSET PRICE PRICE ASSET TRANSACTION DATE (LOSS) ----------------------------------------------------------------------------------------------------------------------------------- Category (iii)--A Series of Transactions in ------------------------------------------- Excess of 5 Percent of Plan Assets ---------------------------------- Robbins & Myers, Inc. Shares of Common Stock $1,491,786 $ - $ 1,491,786 $ 1,491,786 $ - - 1,527,193 1,515,517 1,527,193 11,676
Note: Sections (e) and (f) are not applicable. There were no category (i), (ii), or (iv) transactions during the year. 12