EX-99.1 2 l09860aexv99w1.htm EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1
 

Exhibit 99.1

Kevin J. Brown
(937) 225-3335

ROBBINS & MYERS REPORTS
FISCAL FOURTH QUARTER AND YEAR END 2004 RESULTS

DAYTON, OHIO, October 6, 2004 . . . Robbins & Myers, Inc. (NYSE: RBN) today reported sales and earnings for the fourth quarter and twelve months of fiscal 2004, ended August 31, 2004. Sales for the fourth quarter were $158.6 million compared with $156.9 million for the same period of fiscal 2003. Foreign currency translation increased sales by $5.5 million. On a constant dollar basis, revenues declined $3.8 million. Net income for the fourth quarter was $3.5 million or $0.24 per share compared with $4.9 million or $0.33 per share for the same period a year ago. The current quarter includes severance costs of $0.8 million pre-tax, $0.5 million after tax and $0.03 per share, related to the consolidation of the Company’s Reactor Systems business in Italy.

Sales for fiscal 2004 were $585.8 million compared with $560.8 million for the same period of fiscal 2003. Foreign currency translation accounted for an increase in sales of $36.9 million resulting in a sales decline of $11.9 million on a constant dollar basis. EBIT for fiscal 2004 was $30.3 million and $38.7 million for last year. Fiscal 2004 net income was $9.8 million or $0.67 per share compared with $14.4 million or $1.00 per share in 2003. The fiscal 2004 EBIT, net income and earnings per share were reduced by $2.1 million pre-tax, $1.4 million after tax and $0.10 per share, respectively, for charges related to the retirement of the Company’s former CEO in the second quarter of fiscal 2004 and the aforementioned severance costs in the fourth quarter.

“Fiscal year 2004 was a transition year for Robbins & Myers. The Company faced challenges of softness in the Pharmaceutical and Industrial Segments, several top management changes and initiated a restructuring program to improve the Company’s future profitability,” said Peter C. Wallace, President and Chief Executive Officer. “Record sales and profits from the Energy Segment have been the encouraging news

 

 

for the year. The growth was driven by higher oil and gas prices which led to increased activity in exploration and recovery.”

Business Segment Results

Fiscal 2004 fourth quarter sales for the Pharmaceutical Segment reflected sequential improvement of 3.7%. The effect of exchange rates was minimal from the preceding quarter. For the year to year period, quarterly sales were down $6.7 million. Exchange rates caused a sales increase of $5.4 million; therefore the decline in constant dollars was $12.1 million. EBIT declined $4.3 million due to the constant dollar sales decline and the $0.8 million for severance related to consolidation of the Reactor Systems business in Italy. The fourth quarter orders and backlog reflect order cancellations of $14.2 million. Of the order cancellations, $6.8 million related to orders booked in fiscal 2004 and $7.4 million related to prior years. Fiscal year 2004 sales of $343.0 million are consistent with last year; however, foreign exchange rates accounted for a $33.4 million increase in sales and sales actually declined by $32.7 million on a constant dollar basis. EBIT decreased $11.1 million due to the sales decline and the $0.8 million of severance cost previously mentioned. Orders in the Pharmaceutical Segment in the second half of fiscal 2004, excluding the effect of exchange rates and order cancellations, were approximately 6% higher than the second half of fiscal 2003. The market continues to be sluggish, especially in continental Europe.

The Energy Segment results were substantially better in the fourth quarter of fiscal 2004 than in the year prior and continued to improve sequentially from a very strong third quarter. Fourth quarter sales increased 19% over the prior year period and 3% over the third quarter of fiscal 2004. EBIT was up 17% in the current quarter over the same period last year and up 8% over the preceding quarter. For fiscal 2004 Energy Segment sales increased $17.3 million and EBIT increased $5.9 million from the prior year, excluding the impact of exchange rates. Higher energy prices and accelerated global demand for oil and gas are being reflected in increased rig count and capital equipment spending. It is anticipated that these trends should continue through our fiscal 2005.

For the fourth quarter of fiscal 2004 the Industrial Segment experienced improvements in sales and EBIT over the prior year and the previous quarter. On an annual basis

 

 

sales were up 3% and EBIT was slightly lower. This segment’s profitability was impacted by lower aftermarket activity and increased pension and health care costs. On a positive note, fiscal 2004 orders and backlog were higher than the prior year and the highest in this segment in three years. The U. S. CPI (Chemical Processing Industry) operating rate is continuing its positive trend for the first time in several years.

Repositioning Robbins & Myers for the Future

“Our pharmaceutical business, comprised of our Reactor Systems Group and Romaco, are clearly not performing up to their potential,” commented Mr. Wallace. “These are businesses with strong brands and significant market positions that are well-positioned globally to serve the needs of the pharmaceutical market. We have opportunities in these businesses to fix the basics and invest for growth. Our first actions will be to take out significant costs by consolidating facilities, increasing production at our existing low cost facilities in India and China, and reducing personnel to eliminate redundancies.” As part of this cost reduction program, the Company expects to expense approximately $7.0 million to restructure its Pharmaceutical business. These costs are primarily related to severance costs. Restructuring activities will include:

  •   Plant closures (one of two Reactor Systems facilities in Italy, Pfaudler Mexico and Unipac).

  •   Headcount reduction to bring it in line with current and projected business levels, to support the Reactor Systems Group restructuring and promote a unified business.

  •   Headcount reduction at Romaco with the Unipac integration into the Macofar facility, reduced duplicate administrative costs at other locations, and improved market channel efficiency.

  •   Additional sourcing from Robbins & Myers low cost facilities in Brazil, India, and China.

“This effort to reduce complexity, fix the basics and leverage the assets of our business units will help in creating a strong and more efficient organization that will be more focused on growth and profitability. We estimate that future annual benefits from this will be approximately $12 to $13 million of which $6 to $7 million is expected in fiscal 2005. To drive these initiatives I am taking a direct role in Romaco for the near term.”

 

 

Earnings Outlook

“We believe that our current lower backlog in the Pharmaceutical business and other trends throughout the other businesses will support earnings per share from operations for the first quarter of $0.02 to $0.07, before estimated restructuring costs of $0.17 to $0.19 per share. With benefits of these actions beginning to be realized in the second half of fiscal 2005, we expect earnings per share for fiscal 2005 of $1.00 to $1.15, excluding the estimated restructuring cost of approximately $0.30 per share,” stated Mr. Wallace.

In this release the Company refers to various non-GAAP measures. Earnings and earnings per share excluding special items are non-GAAP financial measures. The Company believes these measures are helpful to investors in assessing the Company’s ongoing performance of its underlying businesses before the impact of special items on its financial performance. In addition, these non-GAAP measures provide a comparison to our previously announced earnings guidance which excluded these special items. Earnings and earnings per share before special items reconcile to earnings presented according to GAAP as follows (in thousands, except per share data):

                                 
    Three Months Ended   Twelve Months Ended
    August 31,   August 31,
(in thousands, except per share data)   2004   2003   2004   2003
Net income
   $ 3,497     $ 4,924     $ 9,770     $ 14,368  
Plus special items, net of tax:
                                
CEO retirement & other severance charges
     495       0       1,390       0  
 
    
 		      
 		      
 		      
 		  
Net income before special items
   $ 3,992     $ 4,924     $ 11,160     $ 14,368  
 
    
 		      
 		      
 		      
 		  
Diluted earnings per share
   $ 0.24     $ 0.33     $ 0.67     $ 1.00  
 
                                
Plus special items:
                                
 
                                
CEO retirement & other severance charges
     0.03       0.00       0.10       0.00  
 
    
 		      
 		      
 		      
 		  
Diluted earnings per share before special items
   $ 0.27     $ 0.33     $ 0.77     $ 1.00  
 
    
 		      
 		      
 		      
 		  

Conference Call

Robbins & Myers, Inc. has scheduled a conference call and webcast for 11:00 a.m., EDT on Thursday, October 7, 2004 to review the fourth quarter and twelve months

 

 

results of fiscal 2004. A copy of the Company’s presentation will be available on the Company’s website at www.robbinsmyers.com at the commencement of the call. Please contact the Company’s Investor Relations Department to register for the call. The call webcast will also be available at www.robbinsmyers.com

Other

Robbins & Myers, Inc. is a leading global supplier of highly-engineered, critical equipment and systems for the pharmaceutical, energy, and industrial markets. Headquartered in Dayton, Ohio, the Company maintains manufacturing facilities in 15 countries.

In addition to historical information, this release 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 release 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 a significant decline in capital expenditures in specialty chemical and pharmaceutical industries, a major decline in oil and natural gas prices, foreign exchange rate fluctuations, the impacts of Sarbanes-Oxley section 404 procedures, work stoppages related to union negotiations, customer order cancellations, the ability of the Company to comply with the financial covenants and other provisions of its financing arrangements, the ability of the Company to realize the benefits of its restructuring program in its Pharmaceutical Segment 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.

 

 

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

                 
(in thousands)   August 31, 2004 August 31, 2003
ASSETS
                
 
                
Current Assets:
                
Cash and cash equivalents
   $ 8,640     $ 12,347  
Accounts receivable
     128,571       117,896  
Inventories
     107,478       96,196  
Other current assets
     10,094       10,480  
Deferred taxes
     7,901       7,469  
 
    
 		      
 		  
Total Current Assets
     262,684       244,388  
 
                
Goodwill & Other Intangible Assets
     322,935       310,748  
Other Assets
     7,916       7,357  
Property, Plant & Equipment
     139,707       141,963  
 
    
 		      
 		  
 
   $ 733,242     $ 704,456  
 
    
 		      
 		  
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current Liabilities:
                
Accounts payable
   $ 61,540     $ 49,588  
Accrued expenses
     93,035       85,158  
Current portion of long-term debt
     8,333       7,319  
 
    
 		      
 		  
Total Current Liabilities
     162,908       142,065  
 
                
Long-Term Debt — Less Current Portion
     173,369       186,284  
Deferred Taxes
     4,329       7,860  
Other Long-Term Liabilities
     89,524       81,241  
Shareholders’ Equity
     303,112       287,006  
 
    
 		      
 		  
 
   $ 733,242     $ 704,456  
 
    
 		      
 		  

Note:  All known adjustments have been reflected in this report, but the information is subject to annual audit and year-end adjustments which are estimated to be insignificant.

 

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)   2004   2003   2004   2003
Sales
   $ 158,595     $ 156,871     $ 585,758     $ 560,775  
Cost of sales
     105,073       103,989       392,754       371,959  
 
    
 		      
 		      
 		      
 		  
Gross profit
     53,522       52,882       193,004       188,816  
SG&A expenses
     42,872       40,980       157,810       147,918  
Amortization expense
     820       525       2,738       2,189  
Other
     761       0       2,139       0  
 
    
 		      
 		      
 		      
 		  
Income before interest and income taxes
     9,069       11,377       30,317       38,709  
Interest expense
     3,566       3,918       14,427       15,628  
 
    
 		      
 		      
 		      
 		  
Income before income taxes and minority interest
     5,503       7,459       15,890       23,081  
Income tax expense
     1,927       2,499       5,563       7,729  
Minority interest
     79       36       557       984  
 
    
 		      
 		      
 		      
 		  
Net income
   $ 3,497     $ 4,924     $ 9,770     $ 14,368  
 
    
 		      
 		      
 		      
 		  
 
                                
Net Income Per Share:
                                
Basic
   $ 0.24     $ 0.34     $ 0.67     $ 1.00  
Diluted
   $ 0.24     $ 0.33     $ 0.67     $ 1.00  
 
                                
Weighted Average Common Shares Outstanding:
                                
Basic
     14,519       14,397       14,478       14,368  
Diluted
     16,308       16,224       16,285       16,492  
 
                                
Orders
   $ 129,514     $ 127,388     $ 586,948     $ 546,357  
 
                                
Backlog
   $ 114,267     $ 111,375     $ 114,267     $ 111,375  

Note:  All known adjustments have been reflected in this report, but the information is subject to annual audit and year-end adjustments which are estimated to be insignificant.

 

 

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)   2004   2003   2004   2003
Sales
                               
Pharmaceutical
   $ 92,336     $ 99,079     $ 343,047     $ 342,415  
Industrial
     34,541       31,147       126,827       122,873  
Energy
     31,718       26,645       115,884       95,487  
 
    
 		      
 		      
 		      
 		  
Total
   $ 158,595     $ 156,871     $ 585,758     $ 560,775  
 
    
 		      
 		      
 		      
 		  
 
                                
Income Before Interest and Income Taxes (EBIT)
                                
Pharmaceutical
   $ 2,808 (2)   $ 7,139     $ 10,317 (2)   $ 21,401  
Industrial
     2,681       1,521       8,349       8,791  
Energy
     7,582       6,505       27,424       20,941  
Corporate and Eliminations
     (4,002 )     (3,788 )     (15,773 )(1)     (12,424 )
 
    
 		      
 		      
 		      
 		  
Total
   $ 9,069     $ 11,377     $ 30,317     $ 38,709  
 
    
 		      
 		      
 		      
 		  
 
                                
Depreciation and Amortization
                                
Pharmaceutical
   $ 1,804     $ 2,381     $ 9,573     $ 10,562  
Industrial
     1,200       1,250       4,536       5,065  
Energy
     1,398       1,091       5,493       5,307  
Corporate and Eliminations
     548       308       1,775       1,348  
 
    
 		      
 		      
 		      
 		  
Total
   $ 4,950     $ 5,030     $ 21,377     $ 22,282  
 
    
 		      
 		      
 		      
 		  
 
                                
Orders
                                
Pharmaceutical
   $ 67,002     $ 72,537     $ 340,177     $ 327,997  
Industrial
     30,183       28,712       127,898       123,569  
Energy
     32,329       26,139       118,873       94,791  
 
    
 		      
 		      
 		      
 		  
Total
   $ 129,514     $ 127,388     $ 586,948     $ 546,357  
 
    
 		      
 		      
 		      
 		  
 
                                
Backlog
                                
Pharmaceutical
   $ 85,711     $ 86,777     $ 85,711     $ 86,777  
Industrial
     23,245       21,968       23,245       21,968  
Energy
     5,311       2,630       5,311       2,630  
 
    
 		      
 		      
 		      
 		  
Total
   $ 114,267     $ 111,375     $ 114,267     $ 111,375  
 
    
 		      
 		      
 		      
 		  

(1)  Includes costs of $1,378,000 related to the retirement of our former President and CEO.

(2)  Includes severance costs of $761,000 related to the consolidation of our Reactor Systems business in Italy.

Note:  All known adjustments have been reflected in this report, but the information is subject to annual audit and year-end adjustments which are estimated to be insignificant.