EX-99.1 2 l14767aexv99w1.htm EXHIBIT 99.1 PRESS RELEASE OF ROBBINS & MYERS DATED 6-29-05 Exhibit 99.1
 

Exhibit 99.1

Kevin J. Brown
Vice President & Chief Financial Officer
(937) 225-3335

ROBBINS & MYERS REPORTS
THIRD QUARTER FISCAL 2005 RESULTS

DAYTON, OHIO, June 29, 2005 . . . Robbins & Myers, Inc. (NYSE:RBN) announced today its financial results for the third quarter of fiscal 2005, ended May 31, 2005. For the third quarter of fiscal 2005, the Company reported net income per share of $0.14, including restructuring expenses of $0.06 per share, or income of $0.20 per share on a pre-restructuring basis.

Fiscal 2005 third quarter sales of $157.6 million were $5.1 million higher than in the third quarter of fiscal 2004. Foreign currency exchange rates, principally the euro, favorably impacted third quarter sales. On a constant dollar basis, sales declined $0.7 million in the current quarter when compared with the comparable prior year period. Earnings before interest and taxes (“EBIT”) were $7.7 million in the third quarter of fiscal 2005 and were $9.4 million in the same period of fiscal 2004. Cost savings of $3.2 million from the previously announced Pharmaceutical segment restructuring program helped to mitigate profit shortfall associated with price reductions and a sales volume decline in the Pharmaceutical segment. In addition, during the quarter $1.2 million was spent restructuring the Pharmaceutical business. Fiscal 2005 third quarter net income was $2.1 million versus $3.8 million in the comparable prior year period. Diluted income per share was $0.14 in the third quarter of fiscal 2005 and $0.26 in the comparable prior year period.

For the nine months ended May 31, 2005, sales increased to $435.7 million, an increase of $8.5 million over the same period in fiscal 2004. Foreign currency exchange rates favorably impacted nine month sales. On a constant dollar basis, sales declined by $6.7 million in the current nine months when compared with the same period of fiscal 2004. Through the first nine months of fiscal 2005, EBIT of $13.5 million was $7.8 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. Cost savings associated with restructuring actions taken in the Company’s Pharmaceutical business segment partially offset these factors. For the nine months of 2005, the Company reported income per share of $0.04, which included restructuring costs of $0.34 per share, or income per share of $0.38 on a pre-restructuring basis.

Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc., stated, “Orders received in the Pharmaceutical segment were clearly a disappointment in the third quarter. Currency adjusted orders in this segment were $17.4 million below the same period last year, driven in large part by continued weakness in the end-markets served by both Reactor Systems and Romaco. Sales in the current quarter were fairly flat with the prior year period as currency changes offset a real decline of 5%

 


 

in volume. The third quarter’s cost reductions of $3.2 million were not enough to offset profit declines due to the currency adjusted volume decline, competitive pricing pressure impacting margins, and restructuring expenses in the quarter of $1.2 million.”

Mr. Wallace further stated, “Given the consolidation that has taken place in the Pharmaceutical industry, our restructuring program was a timely and an appropriate adjustment to market conditions. The restructuring has gone extremely well. We have reduced our fixed cost without disrupting the business, and we have been able to monetize a number of underutilized facilities. During the quarter, we were able to sell another facility for $4.5 million, bringing the year to date proceeds from land and building sales to $8.1 million. In addition, we have another facility located in Mexico that we plan to sell as early as the next quarter.”

Third quarter fiscal 2005 revenue and EBIT in the Industrial segment declined by 1.9% and 30.2% respectively, compared with the prior year. EBIT was lower than in the prior year due to lower sales volumes and inflationary cost increases. Order rates have improved in the chemical processing markets; yet, the municipal wastewater treatment market has been soft.

The Energy segment’s third quarter sales and EBIT were strong and increased by 19.4% and 25.5%, respectively, compared with the third quarter of the prior year. This segment continues to operate at record levels, with higher oil and gas prices fueling new investments in exploration and recovery. 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.

Mr. Wallace commented, “The outlook in the Pharmaceutical Segment is mixed. We have a significant number of active inquiries in packaging and secondary processing that we anticipate will turn into orders. In primary reactor systems, however, major investments by customers seem to be slow in developing. We have a very strong presence in the markets we serve, and believe that we are seeing the major inquiries that develop in the market. As a result, the problems we face are soft end-markets, and we will benefit from the recent restructuring programs as markets improve.”

Concerning the other business units, Wallace stated, “The Energy Systems business should continue to run at record levels. While this has been a cyclical business, there is nothing on our horizon that causes us concern at this time. Our Industrial business will benefit from a more active chemical processing end-market, along with cost improvements that have been made in the business. Robbins & Myers is committed to reducing complexity and implementing operational improvements across the business while maintaining focus on serving its customers.”

Mr. Wallace also commented, “Due to the third quarter’s weakness in Pharmaceutical orders, we have adjusted our guidance for the year to $0.63 to $0.68 per share. While we are optimistic that we have hit the bottom in this industry downturn and that many of the active inquiries will convert to orders in the next quarter, the lead-time associated with many of the projects will make it difficult to book and ship in the fourth quarter at the rate we had anticipated.”

 


 

Mr. Wallace also noted, “On May 19, 2005, we announced that we were involved in preliminary discussions with other parties that may or may not lead to a significant disposition of our Romaco business unit in the Pharmaceutical sector and had hired an investment banker to assist us in those discussions. The discussions are continuing with a number of parties. No agreement has been reached with any party relating to the purchase of our Romaco business units and there can be no assurance that any such agreement can be concluded.”

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     Nine Months Ended  
    May 31,     May 31,     May 31,     May 31  
(in thousands, except per share data)   2005     2004     2005     2004  
Net income
  $ 2,114     $ 3,814     $ 624     $ 6,273  
 
                               
Plus special items, net of tax:
                               
Inventory write-offs included in cost of sales
    185       0       650       0  
Pharmaceutical segment restructuring charges
    595       0       4,248       0  
CEO retirement charges
    0       0       0       896  
 
                       
 
                               
Net Income before special items
  $ 2,894     $ 3,814     $ 5,522     $ 7,169  
 
                       
 
                               
Diluted earnings per share
  $ 0.14     $ 0.26     $ 0.04     $ 0.43  
 
                               
Plus special items:
                               
Inventory write-offs included in cost of sales
    0.01       0.00       0.04       0.00  
Pharmaceutical segment restructuring charges
    0.05       0.00       0.30       0.00  
CEO retirement charges
    0.00       0.00       0.00       0.07  
 
                       
 
                               
Diluted earnings per share before special items
  $ 0.20     $ 0.26     $ 0.38     $ 0.50  
 
                       

DIVIDEND / ANNUAL MEETING OF SHAREHOLDERS
Robbins & Myers’ Board of Directors approved the regular quarterly dividend payment of $.055 per share for the third quarter of FY-2005. Shareholders of record as of July 11, 2005 will receive payment on July 29, 2005. The Board of Directors also approved changing the date of the Annual Meeting of Shareholders to January 11, 2006.

CONFERENCE CALL & WEB CAST
Robbins & Myers, Inc. has scheduled a conference call and webcast for 11:00 a.m., EDT on Thursday, June 30, 2005, to review the third 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. EDT June 30, by dialing 888-286-8010 in the U.S. and entering ID # 93233146.

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)   May 31, 2005     August 31, 2004  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 6,723     $ 8,640  
Accounts receivable
    124,560       128,571  
Inventories
    119,058       107,478  
Other current assets
    7,196       7,794  
Deferred taxes
    8,154       7,901  
 
           
Total Current Assets
    265,691       260,384  
 
               
Goodwill & Other Intangible Assets
    327,756       322,935  
Other Assets
    11,184       10,216  
Property, Plant & Equipment
    135,358       139,707  
 
           
 
  $ 739,989     $ 733,242  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 57,803     $ 61,540  
Accrued expenses
    91,979       93,035  
Current portion of long-term debt
    15,506       8,333  
 
           
Total Current Liabilities
    165,288       162,908  
 
               
Long-Term Debt — Less Current Portion
    170,276       173,369  
Deferred Taxes
    4,725       4,329  
Other Long-Term Liabilities
    89,265       89,524  
Shareholders’ Equity
    310,435       303,112  
 
           
 
  $ 739,989     $ 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     Nine Months Ended  
    May 31,     May 31,     May 31,     May 31,  
(in thousands, except per share data)   2005     2004     2005     2004  
Sales
  $ 157,584     $ 152,464     $ 435,669     $ 427,163  
Cost of sales
    106,548       101,529       296,861       287,681  
 
                       
Gross profit
    51,036       50,935       138,808       139,482  
SG&A expenses
    41,732       40,929       116,721       114,938  
Amortization expense
    669       601       1,873       1,918  
Other
    944       0       6,743       1,378  
 
                       
Income before interest and income taxes
    7,691       9,405       13,471       21,248  
Interest expense
    3,599       3,521       10,827       10,861  
 
                       
Income before income taxes and minority interest
    4,092       5,884       2,644       10,387  
Income tax expense
    1,514       2,060       979       3,636  
Minority interest
    464       10       1,041       478  
 
                       
Net income
  $ 2,114     $ 3,814     $ 624     $ 6,273  
 
                       
 
                               
Net Income Per Share:
                               
Basic
  $ 0.14     $ 0.26     $ 0.04     $ 0.43  
Diluted
  $ 0.14     $ 0.26     $ 0.04     $ 0.43  
 
                               
Weighted Average Common Shares Outstanding:
                               
Basic
    14,650       14,496       14,590       14,465  
Diluted
    16,472       16,309       16,413       16,279  
 
                               
Orders
  $ 147,704     $ 154,539     $ 454,613     $ 457,434  
 
                               
Backlog
  $ 132,999     $ 143,808     $ 132,999     $ 143,808  
     
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     Nine Months Ended  
    May 31,     May 31,     May 31,     May 31,  
(in thousands)   2005     2004     2005     2004  
Sales
                               
Pharmaceutical
  $ 88,886     $ 89,075     $ 242,242     $ 250,711  
Industrial
    32,088       32,725       94,831       92,286  
Energy
    36,610       30,664       98,596       84,166  
 
                       
Total
  $ 157,584     $ 152,464     $ 435,669     $ 427,163  
 
                       
 
                               
Income Before Interest and Income Taxes (EBIT)
                               
Pharmaceutical
  $ 596 (1)   $ 3,875       ($5,355 )(1)   $ 7,509  
Industrial
    1,599       2,290       4,885 (2)     5,668  
Energy
    8,803       7,017       24,210       19,842  
Corporate and Eliminations
    (3,307 )     (3,777 )     (10,269 )     (11,771 )(3)
 
                       
Total
  $ 7,691     $ 9,405     $ 13,471     $ 21,248  
 
                       
 
                               
Depreciation and Amortization
                               
Pharmaceutical
  $ 2,262     $ 2,512     $ 6,831     $ 7,769  
Industrial
    1,104       1,135       3,166       3,336  
Energy
    1,500       1,431       4,093       4,095  
Corporate and Eliminations
    400       430       1,192       1,243  
 
                       
Total
  $ 5,266     $ 5,508     $ 15,282     $ 16,443  
 
                       
 
                               
Orders
                               
Pharmaceutical
  $ 76,969     $ 90,469     $ 254,198     $ 273,175  
Industrial
    35,075       34,844       99,005       97,715  
Energy
    35,660       29,226       101,410       86,544  
 
                       
Total
  $ 147,704     $ 154,539     $ 454,613     $ 457,434  
 
                       
 
                               
Backlog
                               
Pharmaceutical
  $ 97,793     $ 111,506     $ 97,793     $ 111,506  
Industrial
    27,081       27,602       27,081       27,602  
Energy
    8,125       4,700       8,125       4,700  
 
                       
Total
  $ 132,999     $ 143,808     $ 132,999     $ 143,808  
 
                       
 
(1)   Includes costs of $1,237,000 in the quarter ended May 31, 2005, and costs of $7,537,000 in the nine months ended May 31, 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.