EX-99.1 2 l17559aexv99w1.htm EX-99.1 PRESS RELEASE Exhibit 99.1
 

Exhibit 99.1
Michael McAdams
Treasurer & Manager of Investor Relations
(937) 225-3324
ROBBINS & MYERS REPORTS
FIRST QUARTER FISCAL 2006 RESULTS, REALIGNS SEGMENTS
AND TAKES A NON-CASH GOODWILL IMPAIRMENT CHARGE
DAYTON, OHIO, December 20, 2005 . . . Robbins & Myers, Inc. (NYSE:RBN) announced today its financial results for first quarter of fiscal 2006, ended November 30, 2005. For the first quarter of fiscal 2006, the Company reported income of $0.06 per share before special charges, slightly ahead of previous guidance of $0.00 to $0.05 per diluted share. Beginning with the first quarter 2006, the Company is reporting under its previously announced realigned segments, Fluid Management, Process Solutions and Romaco. As part of the process of realigning the business segments, the Company recorded an estimated non-cash goodwill impairment charge of $2.04 per share related to the Romaco business and restructuring expenses of $0.04 per share, resulting in a net loss for the first quarter of $2.02 per share.
Fiscal 2006 first quarter sales of $139.0 million were up by $6.5 million compared with the first quarter of fiscal 2005. Loss before interest and taxes was $25.3 million in the first quarter of fiscal 2006 versus a loss of $0.1 million last year. The non-cash goodwill impairment charge of $30.0 million and restructuring costs of $0.8 million in the recent quarter are $25.9 million higher than restructuring charges were in the first quarter of fiscal 2005. The fiscal 2006 first quarter net loss was $29.7 million ($2.02 loss per diluted share) versus a net loss of $0.9 million ($0.06 loss per diluted share) in the comparable prior year period.
Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc., stated, “This is the first time we are reporting our results under the new business segment alignment of Fluid Management, Process Solutions and Romaco. We have organized our business around these segments as we transition to become a market driven operating company.”
The Fluid Management segment (R & M Energy Systems and Moyno product lines) experienced a 16.7% sales increase driven primarily by strong demand for oilfield equipment products due to high levels of oil and gas exploration and recovery activity. EBIT for Fluid Management was $11.5 million, up 27.4% over the first quarter of the prior year. The outlook for the Fluid Management segment remains positive for 2006 due to strong demand in the energy market, the high price of oil and gas and anticipated increases in 2006 maintenance capital spending.

 


 

First quarter fiscal 2006 revenue of the Process Solutions segment (Pfaudler, Cheminear & Edon product lines) decreased by 6.5% to $53.1 million from $56.8 million in the prior year. Approximately $2.5 million of the year over year sales decline relates to the sale of the Edlon Lined Pipe and Fittings business sold in the fourth quarter of fiscal 2005. EBIT was higher in the current year quarter than in the prior year due to lower restructuring charges for the first quarter of 2006 and cost savings being realized from prior year restructuring programs. The outlook for Process Solutions reflects gradual improvement in the chemical processing industry.
The Romaco segment’s first quarter sales of $33.4 million are 8.7% higher than in the comparable prior year quarter. EBIT declined during the first quarter 2006 on a year-over-year basis due to the non-cash goodwill impairment of $30.0 million and restructuring charges of $0.5 million. Excluding special charges profitability was constant on a year over year basis. The outlook for 2006 remains soft due to continued weakness in the pharmaceutical market place.
Mr. Wallace further commented on the first quarter 2006 results, “Our first quarter performance was substantially in line with expectations. The Fluid Management business should continue to run at record levels for the remainder of our 2006 year. Our Process Solutions business will benefit from a more active chemical processing end-market, along with cost improvements that have been and will be made in the business. The Romaco business continues to be impacted by the restructuring and consolidation efforts of the large Pharmaceutical companies.”
Concerning the possible sale of Romaco, Mr. Wallace stated, “We are currently in discussions with interested firms for various parts of Romaco. We anticipate these discussions will be finalized by the end of our second fiscal quarter 2006 and we will make the appropriate announcements at that time. As part of the portfolio review we have realigned the business segments in 2006 to become a more market driven organization that will deliver better performance as we share resources and leverage our strength. As a result of this business realignment, and the ongoing Romaco discussions we have concluded that there is goodwill impairment. We have recorded a $30.0 million non-cash write down of goodwill based on our preliminary estimates at this time. The Company will commission an appraisal of the Romaco business to determine the final impairment charge.”
Mr. Wallace commented further, “We are beginning to see some benefits from the realignment of product lines. Manufacturing units are working together to manage production levels, reduce overtime, and improve asset utilization. We are also sharing information across the businesses to leverage our strengths with specific industries and customers. Our earnings guidance for the

 


 

year is $0.75-$0.90 per share before special items. Earnings for the second quarter should be in the range of $0.12 — $0.17 per share before special items.”
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  
    November 30,     November 30,  
(in thousands, except per share data)   2005     2004  
Net loss
    ($29,734 )     ($871 )
Plus special items, net of tax:
               
Inventory write-offs included in cost of sales
    0       124  
Process Solutions segment restructuring charges
    217       326  
Romaco segment restructuring charges
    446       384  
Goodwill impairment charge
    30,000       0  
 
           
Net income (loss) before special items
  $ 929       ($37 )
 
           
Diluted net loss per share
    ($2.02 )     ($0.06 )
Plus special items:
               
Inventory write-offs included in cost of sales
    0.00       0.01  
Process Solutions segment restructuring charges
    0.01       0.02  
Romaco segment restructuring charges
    0.03       0.03  
Goodwill impairment charges
    2.04       0.00  
 
           
Diluted net income per share before special items
  $ 0.06     $ 0.00  
 
           
Conference Call & Webcast
Robbins & Myers, Inc. has scheduled a conference call and webcast for 11:00 a.m., Eastern Time on Wednesday, December 21, 2005, to review the quarter results. Interested investors 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 webcast presentation. Replays will be available at the website and a telephonic replay will be available for seven days beginning at 1:00 p.m. Eastern time by dialing 888-286-8010 and entering ID # 14324960.
Robbins & Myers, Inc. is a leading global supplier of highly-engineered, application-critical equipment and systems to the global pharmaceutical, chemical, energy, municipal wastewater 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 Romaco and Process Solutions Segments, including the receipt of cash proceeds from the sale of excess facilities and Romaco units, results of business unit appraisals, and general economic conditions that can affect demand in the markets served by the Company. The Company undertakes no obligation to update or revise any forward-looking statement.
###END###

 


 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
   (Unaudited)
                 
(in thousands)   November 30, 2005     August 31, 2005  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 17,423     $ 23,043  
Accounts receivable
    124,809       128,676  
Inventories
    103,269       102,652  
Other current assets
    7,979       7,121  
Deferred taxes
    9,654       10,216  
 
           
Total Current Assets
    263,134       271,708  
 
               
Goodwill & Other Intangible Assets
    288,497       324,208  
Other Assets
    14,229       13,807  
Property, Plant & Equipment
    127,870       130,612  
 
           
 
  $ 693,730     $ 740,335  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 59,271     $ 67,183  
Accrued expenses
    96,659       97,090  
Current portion of long-term debt
    11,764       8,616  
 
           
Total Current Liabilities
    167,694       172,889  
Long-Term Debt — Less Current Portion
    168,461       166,792  
Deferred Taxes
    3,673       3,721  
Other Long-Term Liabilities
    89,919       96,088  
Shareholders’ Equity
    263,983       300,845  
 
           
 
  $ 693,730     $ 740,335  
 
           
   
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  
    November 30,     November 30,  
(in thousands, except per share data)   2005     2004  
Sales
  $ 138,959     $ 132,455  
Cost of sales
    92,217       90,048  
 
           
Gross profit
    46,742       42,407  
 
               
SG&A expenses
    40,744       37,670  
Amortization expense
    439       595  
Goodwill impairment charge
    30,000       0  
Other
    818       4,225  
 
           
Income before interest and income taxes
    (25,259 )     (83 )
Interest expense
    3,523       3,539  
 
           
Loss before income taxes and minority interest
    (28,782 )     (3,622 )
 
               
Income tax expense (benefit)
    687       (3,014 )
 
               
Minority interest
    265       263  
 
           
Net loss
    ($29,734 )     ($871 )
 
           
 
               
Net Loss Per Share:
               
Basic
    ($2.02 )     ($0.06 )
Diluted
    ($2.02 )     ($0.06 )
 
               
Weighted Average Common Shares Outstanding:
               
Basic
    14,700       14,532  
Diluted
    16,499       16,338  
 
               
Orders
  $ 146,366     $ 156,104  
 
               
Backlog
  $ 123,067     $ 137,703  
   
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  
    November 30,     November 30,  
(in thousands)   2005     2004  
Sales
               
Process Solutions
  $ 53,130     $ 56,823  
Fluid Management
    52,456       44,931  
Romaco
    33,373       30,701  
 
           
Total
  $ 138,959     $ 132,455  
 
           
 
               
Income Before Interest and Income Taxes (EBIT)
               
Process Solutions
  $ 1,909 (1)     ($108 )(1)
Fluid Management
    11,525       9,043  
Romaco
    (33,650 )(2)     (5,472 )(2)
Corporate and Eliminations
    (5,043 )     (3,546 )
 
           
Total
    ($25,259 )     ($83 )
 
           
 
               
Depreciation and Amortization
               
Process Solutions
  $ 1,721     $ 1,939  
Fluid Management
    1,926       1,837  
Romaco
    722       931  
Corporate and Eliminations
    249       398  
 
           
Total
  $ 4,618     $ 5,105  
 
           
 
               
Orders
               
Process Solutions
  $ 59,016     $ 66,181  
Fluid Management
    49,912       48,219  
Romaco
    37,438       41,704  
 
           
Total
  $ 146,366     $ 156,104  
 
           
 
               
Backlog
               
Process Solutions
  $ 62,980     $ 70,655  
Fluid Management
    19,070       18,013  
Romaco
    41,017       49,035  
 
           
Total
  $ 123,067     $ 137,703  
 
           

(1)   Fiscal 2006 includes $345,000 of costs related to an Edlon facility closure and fiscal 2005 includes $2,678,000 of costs related to the restructuring of our Reactor Systems business.
 
(2)   Fiscal 2006 and fiscal 2005 include $473,000 and $2,285,000, respectively, of costs related to the restructuring of our Romaco business. Fiscal 2006 also includes a $30,000,000 goodwill impairment charge.

   
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.