EX-99.1 2 l13079aexv99w1.htm EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1
 

Exhibit 99.1

Michael McAdams
Assistant Treasurer
(937) 225-3324

ROBBINS & MYERS REPORTS
SECOND QUARTER FISCAL 2005 RESULTS

DAYTON, OHIO, March 30, 2005 . . . Robbins & Myers, Inc. (NYSE:RBN) announced today its financial results for the second quarter of fiscal 2005, ended February 28, 2005. For the second quarter of fiscal 2005, the Company reported net income per share of $0.07, including restructuring expenses of $0.07 per share, or income of $0.14 per share on a pre-restructuring basis.

Fiscal 2005 second quarter sales of $145.6 million were $3.4 million higher than in the second quarter of fiscal 2004. Foreign currency exchange rates, principally the euro, favorably impacted second quarter sales. On a constant dollar basis, sales declined $0.6 million in the current quarter when compared with the comparable prior year period. Earnings before interest and taxes (“EBIT”) were $5.9 million in the second quarter of fiscal 2005 and were $4.7 million in the same period of fiscal 2004. Cost savings of $2.3 million from the previously announced Pharmaceutical segment restructuring helped to improve margins but were somewhat offset by price reductions and reduced sales volume in the Pharmaceutical segment. The fiscal 2005 second quarter net income was $1.1 million versus $0.3 million in the comparable prior year period. The diluted income per share was $0.07 in the second quarter of fiscal 2005 and was $0.02 in the comparable prior year period.

For the six months ended February 28, 2005, sales increased to $278.1 million, an increase of $3.4 million over the same period in fiscal 2004. Foreign currency exchange rates favorably impacted six month sales. On a constant dollar basis, sales declined by $6.0 million in the current six months when compared with the same period of fiscal


 

2004. Through the first half of fiscal 2005, EBIT of $5.8 million was $6.0 million lower than in the comparable prior year period. The decline in EBIT is due to the Pharmaceutical business segment restructuring costs, margin deterioration in the Pharmaceutical sector, and the currency adjusted sales decline. Partially offsetting these factors were improved product mix and cost savings associated with restructuring actions taken in the Company’s Pharmaceutical business segment during the six month period. For the first half of 2005, the Company reported a loss per share of $0.10, which included restructuring costs of $0.28 per share, or income per share of $0.18 on a pre-restructuring basis.

Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc., stated, “While our performance in the quarter was in line with earlier guidance, we continue to face a difficult trading environment in the Pharmaceutical segment. Cost savings from the restructuring program announced earlier are ahead of plan; however a portion of the savings were lost due to continuing price pressure. Cost savings for the quarter accelerated to $2.3 million bringing year to date savings to $3.2 million. We expect a slightly higher level of savings in the third and fourth quarters. We have exited two facilities in the Pharmaceutical segment and will be exiting a third facility within the next quarter. We have sold one building and have a high level of interest on the remaining two buildings. While the restructuring program is ahead of plan we continue to face weak markets in the Pharmaceutical segment. Currency adjusted sales volume through six months is down $16.0 million in this segment, with both Romaco and Reactor Systems showing weakness. We have been successful raising prices to offset inflationary increases in most of our business units, but have struggled with lower margins on larger projects in the packaging part of the business.”

The Pharmaceutical segment has been in a two year slowdown due to ongoing consolidation in the pharmaceutical markets. After adjusting for the $14 million order cancellations at the end of fiscal 2004, the backlog in this segment is 10% higher than this period last year. We are seeing orders strengthening in the developing regions, with both India and China showing strong year over year performance.


 

The Energy segment’s second quarter sales and EBIT were strong and increased by 11.5% and 16.2%, respectively, compared with the second quarter of the prior year. The outlook for the Energy segment remains positive due to the price of oil, drilling rig count and anticipated increases in maintenance capital spending during 2005.

Second quarter fiscal 2005 revenue and EBIT in the Industrial segment improved by 6.1% and 9.5% respectively, compared with the prior year. EBIT was higher than in the prior year due to higher sales volumes, but these were partially offset by a small loss on the sale of a building. Price increases have been able to offset inflationary cost increases. Order rates have improved in the chemical processing markets, yet the municipal wastewater treatment market has not shown any real signs of recovery.

Mr. Wallace commented, “We will continue to remain focused on achieving the benefits of the restructuring program announced earlier. The Company is committed to streamlining the organization to reduce complexity and improve efficiency in all areas of the business. As we make the operational improvements, we are beginning to spend more time with key customers to drive future sales growth.”

“As we look to the balance of the year, we expect to see improving margins in the Pharma sector due to better pricing of projects in our backlog and continued savings from the restructuring program. Our earnings guidance for the year has been adjusted to $0.85 to $0.95 per share on a pre-restructuring basis due to the pricing issues in the Pharmaceutical segment, the currency adjusted volume decline in the first half, and additional expenses associated with Sarbanes Oxley compliance. Earnings for the third quarter should be in the range of $0.22-$0.27 per share pre-restructuring.”

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:

                                 
    Three Months Ended     Six Months Ended  
    Feb. 28,     Feb. 29,     Feb. 28,     Feb. 29,  
(in thousands, except per share data)   2005     2004     2005     2004  
                       
Net income (loss)
  $ 1,055     $ 320     $ (1,490 )   $ 2,459  
 
                               
Plus special items, net of tax:
                               
Inventory write-offs included in cost of sales
    0       0       465       0  
Pharmaceutical segment restructuring charges
    992       0       3,654       0  
CEO retirement charges
    0       896       0       896  
                       
 
                               
Net Income before special items
  $ 2,047     $ 1,216     $ 2,629     $ 3,355  
                       
 
                               
Diluted earnings per share
  $ 0.07     $ 0.02     $ (0.10 )   $ 0.17  
 
                               
Plus special items:
                               
Inventory write-offs included in cost of sales
    0.00       0.00       0.03       0.00  
Pharmaceutical segment restructuring charges
    0.07       0.00       0.25       0.00  
CEO retirement charges
    0.00       0.06       0.00       0.06  
                       
 
                               
Diluted earnings per share before special items
  $ 0.14     $ 0.08     $ 0.18     $ 0.23  
                       

Conference Call & Web Cast

Robbins & Myers, Inc. has scheduled a conference call and webcast for 11:00 a.m., EST on Thursday, March 31, 2005, to review the second quarter 2005 results. Interested persons should go to the Company’s website at www.robbinsmyers.com approximately ten minutes prior to the start of the call and follow the instructions to view the web cast presentation. Replays will be available at the website and a telephonic replay will be available for one week beginning at 1:00 p.m. EST March 31, by dialing 888-286-8010 in the U.S. and entering ID # 40910312.

Robbins & Myers, Inc. is a leading global supplier of highly-engineered, application-critical equipment and systems to the global 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 impact 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, including the receipt of cash proceeds from the sale of excess facilities 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)   February 28, 2005     August 31, 2004  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 9,157     $ 8,640  
Accounts receivable
    124,029       128,571  
Inventories
    123,580       107,478  
Other current assets
    6,948       7,794  
Deferred taxes
    7,903       7,901  
Assets held for sale
    4,633       0  
 
           
Total Current Assets
    276,250       260,384  
 
               
Goodwill & Other Intangible Assets
    333,397       322,935  
Other Assets
    11,385       10,216  
Property, Plant & Equipment
    137,951       139,707  
 
           
 
  $ 758,983     $ 733,242  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 57,759     $ 61,540  
Accrued expenses
    93,433       93,035  
Current portion of long-term debt
    23,668       8,333  
 
           
Total Current Liabilities
    174,860       162,908  
 
               
Long-Term Debt - Less Current Portion
    173,415       173,369  
Deferred Taxes
    4,414       4,329  
Other Long-Term Liabilities
    90,486       89,524  
Shareholders’ Equity
    315,808       303,112  
 
           
 
  $ 758,983     $ 733,242  
 
           
     
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     Six Months Ended  
    February 28,     February 29,     February 28,     February 29,  
(in thousands, except per share data)   2005     2004     2005     2004  
Sales
  $ 145,630     $ 142,217     $ 278,085     $ 274,699  
Cost of sales
    99,565       97,136       190,313       186,152  
 
                       
 
                               
Gross profit
    46,065       45,081       87,772       88,547  
 
                               
SG&A expenses
    38,019       38,349       74,989       74,009  
Amortization expense
    609       696       1,204       1,317  
Other
    1,574       1,378       5,799       1,378  
 
                       
 
                               
Income before interest and income taxes
    5,863       4,658       5,780       11,843  
 
                               
Interest expense
    3,689       3,642       7,228       7,340  
 
                       
 
                               
Income before Income taxes and minority interest
    2,174       1,016       (1,448 )     4,503  
 
                               
Income tax expense
    805       356       (535 )     1,576  
 
                               
Minority interest
    314       340       577       468  
 
                       
 
                               
Net income
  $ 1,055     $ 320     ($ 1,490 )   $ 2,459  
 
                       
 
                               
Net Income Per Share:
                               
Basic
  $ 0.07     $ 0.02     ($ 0.10 )   $ 0.17  
Diluted
  $ 0.07     $ 0.02     ($  0.10 )   $ 0.17  
 
                               
Weighted Average Common Shares Outstanding:
                               
Basic
    14,589       14,457       14,560       14,449  
Diluted
    16,432       16,260       16,383       16,264  
 
                               
Orders
  $ 150,805     $ 160,194     $ 306,909     $ 302,895  
 
                               
Backlog
  $ 142,878     $ 141,610     $ 142,878     $ 141,610  
     
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     Six Months Ended  
    February 28,     February 29,     February 28,     February 29,  
(in thousands)   2005     2004     2005     2004  
Sales
                               
Pharmaceutical
  $ 82,019     $ 83,726     $ 153,356     $ 161,636  
Industrial
    31,450       29,639       62,743       59,561  
Energy
    32,161       28,852       61,986       53,502  
 
                       
Total
  $ 145,630     $ 142,217     $ 278,085     $ 274,699  
 
                       
 
                               
Income Before Interest and Income Taxes (EBIT)
                               
Pharmaceutical
( $ 133 ) (1)   $ 1,425   ( $ 5,951 ) (1)   $ 3,634  
Industrial
    1,285   (2)     1,173       3,286   (2)     3,378  
Energy
    8,127       6,993       15,407       12,825  
Corporate and Eliminations
    (3,416 )     (4,933 ) (3)     (6,962 )     (7,994 ) (3)
 
                       
Total
  $ 5,863     $ 4,658     $ 5,780     $ 11,843  
 
                       
 
                               
Depreciation and Amortization
                               
Pharmaceutical
  $ 2,219     $ 2,650     $ 4,569     $ 5,257  
Industrial
    966       939       2,062       2,201  
Energy
    1,332       1,327       2,593       2,664  
Corporate and Eliminations
    394       428       792       813  
 
                       
Total
  $ 4,911     $ 5,344     $ 10,016     $ 10,935  
 
                       
 
                               
Orders
                               
Pharmaceutical
  $ 84,787     $ 96,873     $ 177,229     $ 182,706  
Industrial
    34,005       32,291       63,930       62,871  
Energy
    32,013       31,030       65,750       57,318  
 
                       
Total
  $ 150,805     $ 160,194     $ 306,909     $ 302,895  
 
                       
 
                               
Backlog
                               
Pharmaceutical
  $ 109,665     $ 109,931     $ 109,665     $ 109,931  
Industrial
    24,138       25,278       24,138       25,278  
Energy
    9,075       6,401       9,075       6,401  
 
                       
Total
  $ 142,878     $ 141,610     $ 142,878     $ 141,610  
 
                       


(1)   Includes costs of $1,337,000 in the quarter ended February 28, 2005, and costs of $6,300,000 in the six months ended February 28, 2005 related to the restructuring of our Romaco and Reactor Systems businesses.
 
(2)   Includes costs of $237,000 related to the sale of facilities in our Industrial Segment.
 
(3)   Includes costs of $1,378,000 related to the retirement of our former President and CEO.
     
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.