EX-99.1 2 l28425aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
Robbins & Myers Reports Record Fourth Quarter and Full Year Results
Strong Finish to Fiscal 2007; Well-Positioned for Another Record Year in 2008
DAYTON, Ohio, Oct. 15 /PRNewswire-FirstCall/ — Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $1.10 for its fiscal fourth quarter ended August 31, 2007 as compared with $0.56 in the prior year fourth quarter. The increase was attributed primarily to higher sales and an improved cost structure. Excluding special items, the Company earned $1.05 per diluted share as compared with $0.64 in the prior year.
For the fiscal year ended August 31, 2007, the Company achieved DEPS of $2.96. Before special items, which consist primarily of restructuring costs and gains from asset sales, the Company earned $2.84 per share. In the prior year, Robbins & Myers reported a loss of $1.31 per share and earnings of $1.26 before special items, most notably goodwill impairment charges, restructuring costs, and gains from asset sales.
The Company reported fourth quarter 2007 sales of $207 million, $24 million higher than in the prior year with all segments reporting increases. Orders were $189 million, $6 million lower than in the prior year fourth quarter. Lower orders were attributed to the sale of two product lines in 2007 as well as several large projects that were booked at the end of fiscal 2006. For the full year, Robbins & Myers achieved sales of $695 million and orders of $720 million. Excluding certain product lines divested from its Romaco segment in 2006 and 2007, full year sales increased 17%, and orders increased 10%, including 4% of currency exchange rate benefit. The Company ended the year with backlog of $194 million, 11% higher than at the end of the prior year.
“We are pleased with our record sales and profitability in the fourth quarter and full year just completed,” said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. “Healthy end-markets and internal actions are driving sales growth, and an improved cost structure following a successful restructuring program has had a significant impact on operating margins. Our associates have embraced lean principles that will support continuous improvement in our performance. Customer-facing initiatives should drive sales growth in a number of regions and markets. We expect to make additional strides in these important initiatives in future years.”
Fourth quarter 2007 results also included record earnings before interest, taxes and minority interest (EBIT) of $36 million, which included $1 million of benefit from the sale of a facility in the Company’s Romaco segment. Excluding special items in both the current and prior periods, adjusted EBIT margins increased 540 basis points over the prior year to 16.9% as a result of higher sales volume and savings from completed restructuring programs. All of the Company’s segments reported strong double-digit operating margins in the fourth quarter of 2007. For the full year, adjusted EBIT margins expanded 570 basis points to 13.1%. The Company also achieved a record $106 million of adjusted EBITDA in 2007, and over $60 million of cash flow from operating activities.
“We announced two years ago that we were transforming Robbins & Myers from a holding company to an operating company, and our recent results demonstrate that our efforts are bearing fruit,” said Mr. Wallace. “While we are pleased with our operating performance, additional

 

 

opportunity lies ahead. Our management team, improved operating capabilities, and healthy balance sheet provide a solid foundation for additional progress. We are continuing to gain traction with lean enterprise initiatives, and we are investing in sales and marketing programs to drive profitable growth. We are well-positioned to capitalize on strong end-markets.”
The Company announced fiscal 2008 DEPS guidance of $3.30-$3.50 as compared with $2.96 ($2.84 before special items) in fiscal 2007. The Company also established first quarter 2008 DEPS guidance of $0.54-$0.64 versus $0.62 ($0.43 before special items) in the first quarter of 2007.
Fourth Quarter Results by Segment
All comparisons are made against the comparable year-ago quarterly period unless otherwise stated.
The Company’s Fluid Management segment fourth quarter sales of $84 million represent a 15% increase over the comparable prior year period, and orders increased $3 million to $80 million. The Company commented that energy market conditions remain favorable, especially in markets outside of North America. Higher sales and better capacity utilization contributed to the 22% increase in EBIT, which expanded to $24 million in the fourth quarter or 28.5% of sales.
The Process Solutions segment successfully worked down its backlog and achieved sales of $80 in the fourth quarter, a 19% increase. Orders were largely unchanged from the prior year at $71 million as currency exchange rate benefits were offset by large orders in the prior year fourth quarter that did not repeat in the current year. Strong fourth quarter shipments and benefits from restructuring activities completed in the prior year created a 70% increase in EBIT to $11 million. EBIT margins improved 400 basis points to 13.2%.
Romaco segment fourth quarter sales of $43 million were similar to the prior year comparable period, which included sales from two product lines subsequently sold in fiscal 2007. Excluding these divested product lines, fourth quarter sales increased $6 million or 16%. Orders declined $9 million to $37 million as a result of product lines being divested and large projects in the prior year not repeating. An improved cost structure following the completion of a restructuring program, and a $1 million gain from the previously-announced sale of a facility, enabled the segment to achieve $7 million of EBIT in the fourth quarter. Excluding special items, adjusted EBIT margins improved 920 basis points to 12.5%.
Conference Call to Be Held at 10:00 AM (Eastern) Tomorrow
A conference call to discuss these results has been scheduled for 10:00 a.m. ET on Tuesday, October 16, 2007. The call can be accessed via webcast or via telephone by dialing (866) 356-4279 (US/Canada) or +1 (617) 597-5394 (outside US/Canada) and using access code 78260798. 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 79229448.

 

 

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 special items, adjusted EBIT and EBITDA (earnings before interest, taxes, depreciation and amortization). The Company believes these measures are helpful to investors in assessing its performance. Reconciliations of these measures to comparable GAAP results are provided further below in this release.
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; work stoppages related to union negotiations; customer order cancellations; business disruptions caused by the implementation of business computer systems; the ability of the Company to comply with the financial covenants and other provisions of its financing arrangements; 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)   August 31, 2007     August 31, 2006  
 
                
ASSETS
                
Current Assets:
                
Cash and cash equivalents
   $ 116,110     $ 48,365  
Accounts receivable
     152,779       124,569  
Inventories
     99,196       94,990  
Other current assets
     7,410       6,260  
Deferred taxes
     11,178       11,318  
Total Current Assets
     386,673       285,502  
 
                
Goodwill & Other Intangible Assets
     278,422       273,834  
Deferred taxes
     9,583       11,300  
Other Assets
     12,196       13,338  
Property, Plant & Equipment
     129,269       127,030  
 
   $ 816,143     $ 711,004  
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current Liabilities:
                
Accounts payable
   $ 78,890     $ 62,749  
Accrued expenses
     105,394       104,590  
Current portion of long-term debt
     72,522       744  
Total Current Liabilities
     256,806       168,083  
 
                
Long-Term Debt — Less Current Portion
     30,553       104,787  
Deferred Taxes
     24,818       12,738  
Other Long-Term Liabilities
     91,448       87,017  
Shareholders’ Equity
     412,518       338,379  
 
   $ 816,143     $ 711,004  

 

 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENT
      (Unaudited)
                                 
    Three Months     Twelve Months  
    Ended     Ended  
    August 31,     August 31,     August 31,     August 31,  
(in thousands, except per share data)   2007     2006     2007     2006  
 
                                
Sales
   $ 207,034     $ 183,190     $ 695,393     $ 625,389  
Cost of sales
     134,820       117,280       453,052       410,473  
Gross profit
     72,214       65,910       242,341       214,916  
SG&A expenses
     37,192       45,536       151,520       170,020  
Goodwill impairment charge
     0       0       0       39,174  
Other
     (1,303 )     1,291       (3,461 )     (1,786 )
Income before interest and income taxes
     36,325       19,083       94,282       7,508  
Interest expense
     893       2,622       5,243       12,946  
Income before income taxes and minority interest
     35,432       16,461       89,039       (5,438 )
Income tax expense
     15,963       7,224       36,866       12,589  
Minority interest
     557       217       1,468       1,560  
Net income (loss)
   $ 18,912     $ 9,020     $ 50,705       ($19,587 )
 
                                
Net income (loss) per share:
                                
Basic
   $ 1.10     $ 0.59     $ 2.98       ($1.31 )
Diluted
   $ 1.10     $ 0.56     $ 2.96       ($1.31 )
 
                                
Weighted Average Common Shares Outstanding:
                                
Basic
     17,121       15,363       17,025       14,898  
Diluted
     17,192       16,713       17,106       16,575  

 

 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED BUSINESS SEGMENT INFORMATION
      (Unaudited)
                                 
    Three Months     Twelve Months  
    Ended     Ended  
    August 31,     August 31,     August 31,     August 31,  
(in thousands)   2007     2006     2007     2006  
 
                                
Sales
                                
Fluid Management
   $ 84,047     $ 73,246     $ 292,283     $ 245,180  
Process Solutions
     79,579       66,837       273,890       231,009  
Romaco
     43,408       43,107       129,220       149,200  
Total
   $ 207,034     $ 183,190     $ 695,393     $ 625,389  
 
                                
Income Before Interest and Income Taxes (EBIT)
                                
Fluid Management
   $ 23,963     $ 19,636     $ 76,973     $ 56,522  
Process Solutions
     10,528       6,177 (1)     31,941 (1)     8,867 (1)
Romaco
     6,721 (2)     (732 )(2)     2,612 (2)     (38,189 )(2)
Corporate and Eliminations
     (4,887 )     (5,998 )     (17,244 )     (19,692 )
Total
   $ 36,325     $ 19,083     $ 94,282     $ 7,508  
 
                                
Depreciation and Amortization
                                
Fluid Management
   $ 2,260     $ 2,135     $ 7,376     $ 7,491  
Process Solutions
     1,369       1,449       6,224       6,496  
Romaco
     583       763       2,090       2,991  
Corporate and Eliminations
     252       395       934       1,600  
Total
   $ 4,464     $ 4,742     $ 16,624     $ 18,578  
 
                                
Orders
                                
Fluid Management
   $ 80,406     $ 77,604     $ 301,941     $ 256,937  
Process Solutions
     71,402       70,741       284,371       262,256  
Romaco
     36,896       46,318       133,536       169,629  
Total
   $ 188,704     $ 194,663     $ 719,848     $ 688,822  
 
                                
Backlog
                                
Fluid Management
   $ 42,956     $ 33,298     $ 42,956     $ 33,298  
Process Solutions
     98,914       88,433       98,914       88,433  
Romaco
     51,951       52,716       51,951       52,716  
Total
   $ 193,821     $ 174,447     $ 193,821     $ 174,447  

 

 

Robbins & Myers, Inc. and Subsidiaries
Reconciliation of Net Income to EBIT, EBITDA, Adjusted EBIT and Adjusted EBITDA
Reconciliation of Diluted Earnings (DEPS) per Share to Diluted EPS
    Ex-Special Items
      (Unaudited)
                                 
    Three Months     Twelve Months  
    Ended     Ended  
    August 31,     August 31,     August 31,     August 31,  
    2007     2006     2007     2006  
 
                                
Net income
   $ 18,912     $ 9,020     $ 50,705     $ (19,587 )
Interest expense
     893       2,622       5,243       12,946  
Income taxes
     15,963       7,224       36,866       12,589  
Minority interest
     557       217       1,468       1,560  
EBIT
     36,325       19,083       94,282       7,508  
 
                                
Minority interest
     (557 )     (217 )     (1,468 )     (1,560 )
Depreciation & amortization
     4,464       4,742       16,624       18,578  
EBITDA
     40,232       23,608       109,438       24,526  
 
                                
Special items:
                                
(1) Process Solutions segment
                                
Cost of sales-restructuring inventory write downs
     —       —       —       370  
Other-restructuring costs
     —       (132 )     —       4,160  
Net product line/facility sale gains
     —       —       (5,036 )     (1,800 )
 
     —       (132 )     (5,036 )     2,730  
 
                                
(2) Romaco segment
                                
Cost of sales-restructuring inventory write downs
     —       757       —       757  
Other-restructuring costs
     —       2,464       1,818       4,312  
Net product line/facility sale gains
     (1,303 )     (1,041 )     (243 )     (8,458 )
Goodwill impairment
     —               —       39,174  
 
     (1,303 )     2,180       1,575       35,785  
Total Special Items
     (1,303 )     2,048       (3,461 )     38,515  
 
                                
Adjusted EBIT
   $ 35,022     $ 21,131     $ 90,821     $ 46,023  
 
                                
Adjusted EBITDA
   $ 38,929     $ 25,656     $ 105,977     $ 63,041  
 
                                
Diluted EPS
   $ 1.10     $ 0.56     $ 2.96     $ (1.31 )
 
                                
Per Share Effect of Special Items Above
     (0.05 )     0.08       (0.12 )     2.57  
 
                                
Diluted EPS Ex-Special Items
   $ 1.05     $ 0.64     $ 2.84     $ 1.26