EX-99.1 2 l25525aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
Investor Relations
+1 (937) 222-2610
ROBBINS & MYERS REPORTS
SECOND QUARTER FISCAL 2007 RESULTS
Strong Orders Create Record Backlog Exceeding $200 Million
DAYTON, OHIO, April 3, 2007...Robbins & Myers, Inc. (NYSE:RBN) today announced financial results for its second quarter of fiscal 2007 ended February 28, 2007. The Company reported second quarter diluted net earnings per share of $0.46 versus $0.08 in the prior year second quarter. The Company attributed the significant increase in earnings to strong sales growth and improvements in its cost structure.
The Company reported second quarter 2007 sales of $162 million, $13 million higher than in the second quarter of 2006. Reported second quarter 2007 orders of $183 million were $16 million higher than in the prior year. Excluding 2006 sales and orders from divested product lines, sales increased $23 million or 17%, and orders increased $28 million or 18%. The Company divested certain product lines from its Romaco business group in March 2006.
“We are steadily transforming our Company into a customer-driven organization, more effectively serving our markets with superior products and application engineering support,” said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. “At the same time, conditions are favorable across many of our end markets. The combined effect is our impressive year-over-year increase in second quarter orders and a record backlog of $203 million at the end of the quarter.”
The Company also reported that earnings before interest, taxes and minority interest (EBIT) more than doubled from the comparable prior year period to $16 million in the second quarter of 2007, and EBIT margins increased from 5.0% to 9.7%. Excluding special items in both the current and prior periods, EBIT margins increased 560 basis points over the prior year to 10.9%. The improvement in EBIT margins before special items was driven principally by higher sales volume and savings from completed restructuring programs.
Mr. Wallace added, “Our improving operating capabilities are demonstrated by our strong second quarter performance, which included year-over-year increases in profitability in each of our businesses, as well as an 86% year-over-year increase in EBITDA adjusted for special items. During the second quarter we also largely completed the restructuring of our Romaco business and expect further improvements in profitability. With net debt of only $68 million, trailing twelve month adjusted EBITDA of $81 million, and a $150 million undrawn revolving credit facility, Robbins & Myers has the financial capacity to execute its full growth strategy.”
On the strength of its backlog and continued favorable outlook for the remainder of the fiscal year, the Company increased its fiscal 2007 diluted net earnings per share guidance from $2.10–$2.30 to $2.20–$2.40. Third quarter diluted earnings per share are expected to be in the range of $0.52–$0.62.

 

 

Second Quarter Results by Segment
All comparisons are made against the comparable year-ago period unless otherwise stated.
The Fluid Management segment achieved $68.2 million of sales in the second quarter of 2007, 18% higher than in the prior year period. Orders increased 25% to $79.9 million due primarily to favorable energy and industrial market conditions. As a result of increased sales and better utilization of facilities, EBIT grew 32% to $17.2 million in the second quarter, and EBIT margins improved 320 basis points to 25.2%.
Process Solutions segment second quarter sales increased 17% to $63.0 million, and orders expanded 14% to $69.8 million as a result of strength in global chemical and pharmaceutical markets, as well as success with new products for bio-fuels applications. Second quarter 2007 EBIT more than tripled to $4.6 million. The prior year second quarter included restructuring costs of $2.2 million and a $1.8 million gain from the sale of property in China. Adjusting for these special items, EBIT margins of 7.3% in the second quarter of 2007 represent a year-over-year improvement of 660 basis points, which resulted from increased sales and the benefits of restructuring programs completed in the prior year.
Romaco segment second quarter fiscal 2007 sales of $31.3 million and orders of $33.4 million are lower than in the prior year quarter due to the sale of two profitable product lines on March 31, 2006. Excluding these divested product lines, sales increased 14% on a year-over-year basis and orders increased 11%. Despite the sale of profitable product lines in March 2006, EBIT losses before special items were reduced year-over-year by $0.6 million.
Conference Call to Be Held at 10:00 AM (Eastern) Tomorrow
A conference call to discuss these results has been scheduled for 10:00 AM ET on Wednesday, April 4, 2007. The call can be accessed via webcast or via telephone by dialing (888) 396-2298 (US/Canada) or +1 (617) 847-8708 (outside US/Canada) and using access code 23154847. Webcast information and conference call materials will be made available on the Company’s website (www.robn.com, “Investor Information” section) prior to the start of the call. Telephonic replays will be available for one week by calling (888) 286-8010 (US/Canada) or +1 (617) 801-6888 (outside US/Canada) and using the access code 77260193.
About Robbins & Myers
Robbins & Myers, Inc. is a leading global supplier of highly-engineered, application-critical equipment and systems to the global energy, chemical, pharmaceutical and industrial markets.
In this release the Company refers to various non-GAAP measures, including net debt (total debt less cash), EBIT and EBITDA (earnings before interest, taxes, depreciation and amortization). The Company believes these measures are helpful to investors in assessing its performance. The reconciliation of EBIT to net income is presented in the condensed consolidated income statement below. The reconciliation of EBITDA and Adjusted EBITDA to net income is as follows:

 

 

                         
    Second     Second     Trailing 12  
    Quarter     Quarter     Months  
    Ended     Ended     Ended  
    February     February     February  
(Millions)   28, 2007     28, 2006     28, 2007  
Net income
   $ 7.9     $ 1.2     $ 27.4  
Interest expense
     1.3       3.7       8.5  
Income taxes
     6.3       1.8       23.0  
Depreciation and amortization
     4.2       4.6       17.5  
 
                  
EBITDA
     19.7       11.3       76.4  
Special items:
                        
Property/Product line sale gains
     —       (1.8 )     (13.6 )
Goodwill impairment
     —       —       9.2  
Loss on the disposal of a product line as part of the Company’s restructuring program
    1.1       —       —  
Other restructuring costs
     0.8       2.2       9.2  
 
                  
Adjusted EBITDA
   $ 21.6     $ 11.7     $ 81.2  
 
                  
In addition to historical information, this release contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, all statements regarding the intent, belief or current expectations regarding the matters discussed or incorporated by reference in this document (including statements as to “beliefs,” “expectations,” “anticipations,” “intentions” or similar words) and all statements which are not statements of historical fact. Such forward-looking statements, together with other statements that are not historical, are based on management’s current expectations and involve known and unknown risks, uncertainties, contingencies and other factors that could cause results, performance or achievements to differ materially from those stated. The most significant of these risks and uncertainties are described in the Company’s Form 10-K, and Form 10-Q reports filed with the Securities and Exchange Commission and include, but are not limited to: a significant decline in capital expenditures in the specialty chemical and pharmaceutical industries; a major decline in oil and natural gas prices; changes in international economic and political conditions and currency fluctuations between the U.S. dollar and other currencies; 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; events or circumstances which result in an impairment of assets, including but not limited to, goodwill; the potential impact of U.S. and foreign legislation, government regulations, and other government action, including those relating to export and import of products and materials, and changes in the interpretation and application of such laws and regulations; the outcome of audit, compliance, administrative or investigatory reviews; and general economic conditions that can affect demand in the process industries. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, the Company’s actual results, performance or achievements could differ materially from those expressed in, or implied by, such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as otherwise required by law, the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
     (Unaudited)
                 
(in thousands)   February 28, 2007     August 31, 2006  
ASSETS
                
Current Assets:
                
Cash and cash equivalents
   $ 40,051     $ 48,365  
Accounts receivable
     144,310       124,569  
Inventories
     110,141       94,990  
Other current assets
     7,576       6,260  
Deferred taxes
     10,177       9,937  
 
            
Total Current Assets
     312,255       284,121  
 
                
Goodwill & Other Intangible Assets
     275,108       273,834  
Other Assets
     14,477       14,381  
Property, Plant & Equipment
     127,062       127,030  
 
            
 
   $ 728,902     $ 699,366  
 
            
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current Liabilities:
                
Accounts payable
   $ 64,184     $ 62,749  
Accrued expenses
     102,336       102,327  
Current portion of long-term debt
     4,290       744  
 
            
Total Current Liabilities
     170,810       165,820  
 
                
Long-Term Debt — Less Current Portion
     103,282       104,787  
Other Long-Term Liabilities
     87,447       89,337  
Shareholders’ Equity
     367,363       339,422  
 
            
 
   $ 728,902     $ 699,366  
 
            
Note:   All known adjustments have been reflected in this report,
but the information is subject to annual audit.

 

 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED BUSINESS SEGMENT INFORMATION
      (Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    February 28,     February 28,     February 28,     February 28,  
(in thousands)   2007     2006     2007     2006  
Sales
                                
Fluid Management
   $ 68,225     $ 57,803     $ 133,818     $ 110,259  
Process Solutions
     63,010       53,904       127,869       107,034  
Romaco
     31,263  (2)     38,290  (2)     55,244  (2)     71,663  (2)
 
                        
Total
   $ 162,498     $ 149,997     $ 316,931     $ 288,956  
 
                        
 
                                
Income Before Interest and Income Taxes (EBIT)
                                
Fluid Management
   $ 17,216     $ 12,660     $ 32,425     $ 24,185  
Process Solutions
     4,639       1,398  (1)     16,152  (1)     3,307  (1)
Romaco
     (2,300 ) (2)     (2,419 ) (2)     (5,272 ) (2)     (36,069 ) (2)
Corporate and Eliminations
     (3,761 )     (4,129 )     (8,348 )     (9,172 )
 
                        
Total
   $ 15,794     $ 7,510     $ 34,957     $ (17,749 )
 
                        
 
                                
Depreciation and Amortization
                                
Fluid Management
   $ 1,712     $ 1,628     $ 3,418     $ 3,554  
Process Solutions
     1,614       1,635       3,208       3,356  
Romaco
     582       775       1,035       1,497  
Corporate and Eliminations
     260       534       516       783  
 
                        
Total
   $ 4,168     $ 4,572     $ 8,177     $ 9,190  
 
                        
 
                                
Orders
                                
Fluid Management
   $ 79,927     $ 63,836     $ 146,468     $ 113,748  
Process Solutions
     69,847       60,994       134,951       120,010  
Romaco
     33,389       42,040       63,672       79,478  
 
                        
Total
   $ 183,163     $ 166,870     $ 345,091     $ 313,236  
 
                        
 
                                
Backlog
                                
Fluid Management
   $ 45,950     $ 25,102     $ 45,950     $ 25,102  
Process Solutions
     95,514       70,082       95,514       70,082  
Romaco
     61,143       44,766       61,143       44,766  
 
                        
Total
   $ 202,607     $ 139,950     $ 202,607     $ 139,950  
 
                        
 
(1)   The six month period ended February 28, 2007 includes a $5,036,000 gain on the sale of land and buildings. The three and six month periods ended February 28, 2006 include costs of $777,000 and $1,122,000, respectively, related to restructuring of our Process Solutions businesses and closure of an Edlon facility. The three and six month periods ended February 28, 2006 also include a gain of $1,800,000 related to the sale of land and buildings in China, and $385,000 of costs expected to be incurred at the conclusion of a facility lease.
 
(2)   The three month periods ended February 28, 2007 and 2006 include costs of $1,860,000 (including a $1,060,000 loss on the sale of an unprofitable product line) and $1,430,000, respectively, related to restructuring of our Romaco business. The costs of the Romaco restructuring included in the six month periods ended February 28, 2007 and 2006 were $2,457,000 and $1,903,000, respectively. The six month period ended February 28, 2006 also includes a $30,000,000 goodwill impairment charge. Ficsal 2006 also includes sales and EBIT of disposed businesses.
Note:   All known adjustments have been reflected in this report,
but the information is subject to annual audit.

 

 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENT
     (Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    February 28,     February 28,     February 28,     February 28,  
(in thousands, except per share data)   2007     2006     2007     2006  
Sales
   $ 162,498     $ 149,997     $ 316,931     $ 288,956  
Cost of sales
     107,649       100,168       208,219       192,385  
 
                        
Gross profit
     54,849       49,829       108,712       96,571  
SG&A expenses
     36,866       41,195       75,582       81,939  
Amortization expense
     329       702       752       1,141  
Goodwill impairment charge
     0       0       0       30,000  
Other
     1,860       422       (2,579 )     1,240  
 
                        
Income (loss) before interest and income taxes
     15,794       7,510       34,957       (17,749 )
Interest expense
     1,345       3,676       2,885       7,199  
 
                        
Income (loss) before income taxes and minority interest
     14,449       3,834       32,072       (24,948 )
Income tax expense
     6,288       1,832       12,951       2,519  
Minority interest
     229       800       576       1,065  
 
                        
Net income (loss)
   $ 7,932     $ 1,202     $ 18,545     $ (28,532 )
 
                        
 
                                
Net income (loss) per share:
                                
Basic
   $ 0.47     $ 0.08     $ 1.09     $ (1.94 )
Diluted
   $ 0.46     $ 0.08     $ 1.09     $ (1.94 )
 
                                
Weighted Average Common Shares Outstanding:
                                
Basic
     17,058       14,744       16,954       14,722  
Diluted
     17,166       16,537       17,043       16,517  
 
                                
Orders
   $ 183,163     $ 166,870     $ 345,091     $ 313,236  
 
                                
Backlog
   $ 202,607     $ 139,950     $ 202,607     $ 139,950  
Note:   All known adjustments have been reflected in this report,
but the information is subject to annual audit.