FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended November 30, 2008

File Number 001-13651

Robbins & Myers, Inc.

(Exact name of registrant as specified in its charter)


Ohio		31-0424220

(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

51 Plum Street, Suite 260, Dayton, Ohio		45440

(Address of Principal executive offices)		(Zip Code)

Registrant’s telephone number including area code: (937) 458-6600

None

Former name, former address and former fiscal year if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2) YES o NO þ

Common shares, without par value, outstanding as of November 30, 2008: 32,785,324

TABLE OF CONTENTS


	Item 2 —Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
Part II—Other Information
	Item 1A. Risk Factors
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	Item 6. Exhibits
SIGNATURES
INDEX TO EXHIBITS
EX-31.1
EX-31.2
EX-32.1
EX-32.2

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)


	November 30,			August 31,
	2008			2008
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	74,337		$	123,405
Accounts receivable		132,857			153,648
Inventories:
Finished products		31,830			29,926
Work in process		43,471			42,399
Raw materials		40,347			37,472

		115,648			109,797
Other current assets		5,559			8,017
Deferred taxes		9,961			13,476

Total Current Assets		338,362			408,343
Goodwill		255,526			278,906
Other Intangible Assets		4,858			6,853
Deferred Taxes		21,398			21,969
Other Assets		10,603			10,931
Property, Plant and Equipment		284,719			297,877
Less accumulated depreciation		(157,275	)		(160,162	)

		127,444			137,715

TOTAL ASSETS	$	758,191		$	864,717


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	66,403		$	86,012
Accrued expenses		87,951			102,876
Current portion of long-term debt		2,269			3,192

Total Current Liabilities		156,623			192,080
Long-Term Debt—Less Current Portion		30,376			30,435
Deferred Taxes		42,883			44,628
Other Long-Term Liabilities		76,967			82,118
Minority Interest		15,521			15,439
Shareholders’ Equity
Common stock		145,842			183,605
Retained earnings		310,315			294,409
Accumulated other comprehensive (loss) income		(20,336	)		22,003

Total Shareholders’ Equity		435,821			500,017

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	758,191		$	864,717

See Notes to Consolidated Condensed Financial Statements

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENT
(In thousands, except per share data)
(Unaudited)


	Three Months Ended
	November 30,
	2008		2007
Net sales	$	177,971	$	173,536
Cost of sales		109,995		110,674

Gross profit		67,976		62,862
SG&A expenses		41,582		39,641

Income before interest and income taxes		26,394		23,221
Interest expense, net		53		727

Income before income taxes and minority interest		26,341		22,494
Income tax expense		8,957		7,955
Minority interest		176		601

Net income	$	17,208	$	13,938


Net income per share:
Basic	$	0.50	$	0.41


Diluted	$	0.50	$	0.40


Weighted average common shares outstanding:
Basic		34,429		34,370


Diluted		34,465		34,642


Dividends per share:
Declared	$	0.0375	$	0.0325


Paid	$	0.0375	$	0.0325

See Notes to Consolidated Condensed Financial Statements

ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)


	Three Months Ended
	November 30,
	2008			2007
Operating Activities:
Net income	$	17,208		$	13,938
Adjustments to reconcile net income to net cash and cash equivalents used by operating activities:
Depreciation		3,718			3,601
Amortization		375			395
Stock compensation expense		782			654
Changes in operating assets and liabilities:
Accounts receivable		9,895			4,269
Inventories		(16,926	)		(9,937	)
Accounts payable		(12,395	)		(8,517	)
Accrued expenses		(6,707	)		(10,381	)
Other		3,752			(384	)

Net Cash and Cash Equivalents Used by Operating Activities		(298	)		(6,362	)

Investing Activities:
Capital expenditures, net of nominal disposals		(3,377	)		(4,925	)

Net Cash and Cash Equivalents Used by Investing Activities		(3,377	)		(4,925	)

Financing Activities:
Proceeds from debt borrowings		1,602			4,351
Repayments of long-term debt		(2,584	)		(5,112	)
Proceeds from sale of common stock		571			3,008
Share repurchases		(39,114	)		0
Dividends paid		(1,302	)		(1,114	)

Net Cash and Cash Equivalents (Used) Provided by Financing Activities		(40,827	)		1,133
Exchange rate impact on cash		(4,566	)		2,055

Decrease in Cash and Cash Equivalents		(49,068	)		(8,099	)
Cash and Cash Equivalents at Beginning of Period		123,405			116,110

Cash and Cash Equivalents at End of Period	$	74,337		$	108,011

See Notes to Consolidated Condensed Financial Statements

ROBBINS & MYERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
November 30, 2008
(Unaudited)

NOTE 1—Preparation of Financial Statements

In the opinion of management, the accompanying unaudited consolidated condensed financial statements of Robbins & Myers, Inc. and subsidiaries (“Company”, “we”, “our” or “us”) contain all adjustments, consisting of normally recurring items, necessary to present fairly our financial condition as of November 30, 2008 and August 31, 2008, and the results of our operations and cash flows for the three month periods ended November 30, 2008 and 2007. All intercompany transactions have been eliminated. Certain amounts in the prior period financial statements have been reclassified to conform to the current year presentation.

While we believe that the disclosures are adequately presented, it is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes included in our most recent Annual Report on Form 10-K for the fiscal year ended August 31, 2008. A summary of our significant accounting policies is presented therein on page 23. There have been no material changes in the accounting policies followed by us during fiscal year 2009 other than the adoption of Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value Measurements” and SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of Financial Accounting Standards Board (“FASB”) Statement No. 115”, as discussed in Note 12.

NOTE 2—Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the three month period ended November 30, 2008, by operating segment, are as follows:


	Process			Fluid
	Solutions			Mgmt.			Romaco
	Segment			Segment			Segment			Total
	(In thousands)
Balance as of September 1, 2008	$	157,870		$	108,703		$	12,333		$	278,906
Translation adjustments		(16,467	)		(5,210	)		(1,703	)		(23,380	)

Balance as of November 30, 2008	$	141,403		$	103,493		$	10,630		$	255,526

Information regarding our other intangible assets is as follows:


	As of November 30, 2008						As of August 31, 2008
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Net		Amount		Amortization		Net
	(In thousands)
Patents and Trademarks	$	10,841	$	7,680	$	3,161	$	11,899	$	7,480	$	4,419
Non-compete Agreements		8,671		7,434		1,237		9,099		7,338		1,761
Financing Costs		9,513		9,065		448		9,679		9,006		673
Other		5,203		5,191		12		5,171		5,171		0

Total	$	34,228	$	29,370	$	4,858	$	35,848	$	28,995	$	6,853

NOTE 3—Net Income per Share


	Three Months Ended
	November 30,
	2008		2007
	(In thousands, except per share amounts)
Numerator:
Net income	$	17,208	$	13,938

Denominator:
Basic weighted average shares		34,429		34,370
Effect of dilutive options and restricted shares		36		272

Diluted shares		34,465		34,642


Basic net income per share	$	0.50	$	0.41

Diluted net income per share	$	0.50	$	0.40

As of November 30, 2008, 107,000 of stock options outstanding were antidilutive and excluded from the computation of dilutive earnings per share.

On January 9, 2008, we declared a 2-for-1 stock split of our common shares effected in the form of a share distribution. The record date for this stock split was February 4, 2008, and the additional shares were issued on February 28, 2008. All net income per share information for the three months ended November 30, 2007 has been adjusted to reflect this stock split.

NOTE 4—Product Warranties

Warranty obligations are contingent upon product failure rates, material required for the repairs and service delivery costs. We estimate the warranty accrual based on specific product failures that are known to us plus an additional amount based on the historical relationship of warranty claims to sales.

Changes in our product warranty liability during the period are as follows:


	Three Months Ended
	November 30, 2008
	(In thousands)
Balance at beginning of the period	$	7,853
Warranty expense		125
Deductions / payments		(535	)
Translation adjustment impact		(288	)

Balance at end of the period	$	7,155

NOTE 5—Long-Term Debt


	November 30, 2008
	(In thousands)
Senior debt:
Revolving credit loan	$	0
Senior notes		30,000
Other		2,645

Total debt		32,645
Less current portion		2,269

Long-term debt	$	30,376

Our Bank Credit Agreement (“Agreement”) provides that we may borrow on a revolving credit basis up to a maximum of $150,000,000 and includes a $100,000,000 expansion feature. All outstanding amounts under the Agreement are due and payable on December 19, 2011. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the Agreement, at our option, and is payable quarterly. Indebtedness under the Agreement and the Senior Notes, discussed below, is unsecured except for the pledge of the stock of our U.S. subsidiaries and two-thirds of the stock of certain non-U.S. subsidiaries. We have $32,043,000 of standby letters of credit outstanding at November 30, 2008, which are used as security for advance payments received from customers and for future payments to our vendors and reduce the amount we may borrow under our Agreement. Under the Agreement we have $117,957,000 of unused borrowing capacity.

We have $30,000,000 of Senior Notes (“Senior Notes”) outstanding with an interest rate of 6.84%, due May 1, 2010.

The Agreement and Senior Notes contain certain restrictive covenants including limitations on indebtedness, asset sales, sales and lease backs, and cash dividends as well as financial covenants relating to interest coverage, leverage and net worth. As of November 30, 2008, we are in compliance with these covenants.

NOTE 6 — Retirement Benefits

Retirement and other postretirement plan costs are as follows:

Pension Benefits


	Three Months Ended
	November 30,
	2008			2007
	(In thousands)
Service cost	$	490		$	362
Interest cost		2,405			1,284
Expected return on plan assets		(1,879	)		(938	)
Amortization of prior service cost		188			86
Amortization of unrecognized losses		152			123
FAS 88 settlement expense		113			0

Net periodic benefit cost	$	1,469		$	917

Other Postretirement Benefits


	Three Months Ended
	November 30,
	2008		2007
	(In thousands)
Service cost	$	121	$	77
Interest cost		449		319
Amortization of prior service cost		53		40
Amortization of unrecognized losses		175		141

Net periodic benefit cost	$	798	$	577

NOTE 7—Income Taxes

The effective tax rate was 34.0% for the first quarter of fiscal 2009 and 35.4% for the first quarter of fiscal 2008.

In June 2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for Uncertainty in Income Taxes”, which was effective for fiscal years beginning after December 15, 2006. The Company adopted the provisions of FIN No. 48 on September 1, 2007.

The balance of unrecognized tax benefits as of November 30, 2008 and August 31, 2008 was $5.3 million and $5.4 million, respectively.

We have estimated the reasonably possible expected net change in unrecognized tax benefits through November 30, 2009 based on the anticipated positions taken in the next twelve months, expected settlements or payments of uncertain tax positions and the lapses of the applicable statutes of limitations of unrecognized tax benefits. We do not anticipate a significant change in the balance of unrecognized tax benefits within the next 12 months.

NOTE 8—Comprehensive Income


	Three Months Ended
	November 30,
	2008			2007
	(In thousands)
Net income	$	17,208		$	13,938
Other comprehensive (loss) income:
Foreign currency translation		(42,339	)		11,670

Comprehensive (loss) income	$	(25,131	)	$	25,608

NOTE 9—Stock Compensation

We sponsor a long-term incentive stock plan to provide for the granting of stock-based compensation to certain officers and other key employees. Under the plans, the stock option price per share may not be less than the fair market value per share as of the date of grant. For officers and other key employees, outstanding grants become exercisable over a three-year period. As of November 30, 2008 we had $5,900,000 of compensation expense not yet recognized related to nonvested stock awards. The weighted average period over which this compensation cost will be recognized is twenty-three months. Stock options of 13,000 shares and 168,000 shares were exercised in the first quarter of fiscal 2009 and 2008, respectively.

Total stock compensation expense for all stock based awards for the first quarter of fiscal 2009 and 2008 was $782,000 ($508,000 after tax) and $654,000 ($425,000 after tax), respectively.

NOTE 10—Business Segments

The following tables present information about our reportable business segments.


	Three Months Ended
	November 30,
	2008			2007
	(In thousands)
Unaffiliated Customer Sales:
Fluid Management	$	82,270		$	72,355
Process Solutions		72,284			70,849
Romaco		23,417			30,332

Total	$	177,971		$	173,536


Income before Interest and Taxes (“EBIT”):
Fluid Management	$	24,640		$	18,448
Process Solutions		6,869			7,956
Romaco		(1,443	)		1,545
Corporate and eliminations		(3,672	)		(4,728	)

Total	$	26,394		$	23,221

NOTE 11– Share Repurchase Program

On October 27, 2008 we announced that our Board of Directors authorized the repurchase of up to 3.0 million of our currently outstanding common shares (the “Program”). Repurchases under the Program will generally be made in the open market or in privately negotiated transactions that will not exceed prevailing market prices, subject to regulatory considerations and market conditions and will be funded from the Company’s available cash and credit facilities. In the first quarter of fiscal 2009, we acquired approximately 2.0 million of our outstanding common shares for $39.0 million under the Program and were accounted for as treasury shares.

NOTE 12 – New Accounting Pronouncements

In September 2006, the FASB issued FASB Statement No. 157, “Fair Value Measurements” (SFAS No. 157). We adopted SFAS No. 157 on September 1, 2008. See Note 13.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115 (SFAS No. 159)”. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. The fair value option permits a company to choose to measure eligible items at fair value at specified election dates. A company will report unrealized gains and losses on items for which the fair value option has been elected in earnings after adoption. SFAS No. 159 was effective for us on September 1, 2008. We did not elect to measure any eligible items at fair value. Therefore, the adoption of SFAS No. 159 had no impact on the consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS No. 141(R)”). SFAS No. 141(R) revised the requirements of SFAS No. 141 related to fair value principles, the cost allocation process, and accounting for non-controlling (minority) interests. SFAS No. 141(R) will be effective for us beginning in fiscal 2010.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS No. 160”). SFAS No. 160 amends ARB 51, “Consolidated Financial Statements”, and requires all entities to report noncontrolling (minority) interests in subsidiaries within equity in the consolidated financial statements, but separate from the parent shareholders’ equity. SFAS No. 160 also requires any acquisitions or dispositions of noncontrolling interests that do not result in a change of control to be accounted for as equity transactions. Further, SFAS No. 160 requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS No. 160 will be effective for us beginning in fiscal 2010. We are currently evaluating the effect, if any, the adoption of SFAS No. 160 will have on our consolidated financial statements.

In April 2008, the FASB issued FASB Staff Position FAS 142-3, “Determination of the Useful Life of Intangible Assets” (FSP FAS 142-3). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets”. FSP FAS 142-3 also requires expanded disclosure related to the determination of intangible asset useful lives. FSP FAS 142-3 will be effective for us beginning in our fiscal year 2010. We are currently evaluating the impact that the adoption of FSP FAS 142-3 will have on our consolidated financial statements.

In May 2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS No. 162). SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with generally accepted accounting principles. SFAS No. 162 will become effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” We do not anticipate the adoption of SFAS No. 162 will have a material impact on our consolidated financial statements.

NOTE 13 – Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. We adopted SFAS No.157 on September 1, 2008 for all financial assets and liabilities recognized or disclosed at fair value in our consolidated financial statements on a recurring basis (at least annually). The adoption of SFAS No. 157 did not have an impact on our consolidated financial statements.

On February 12, 2008, the FASB issued FASB Staff Position (FSP) No. 157-2, which delays the effective date of SFAS No. 157 for nonfinancial assets and liabilities to fiscal years beginning after November 15, 2008. For these non-financial assets and liabilities, SFAS No. 157 is effective for us on September 1, 2009. With this deferral, we have not applied the provisions of SFAS No. 157 to goodwill and intangible assets. We are still assessing the impact the adoption of SFAS No. 157 for nonfinancial assets and liabilities will have on our consolidated financial statements.

The following table summarizes the bases used to measure certain financial assets at fair value on a recurring basis as of November 30, 2008 (in thousands):


			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	November 30,		Identical Assets		Inputs		Inputs
	2008		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents ⁽¹⁾	$	74,337	$	74,337	$	—	$	—


Total assets at fair value	$	74,337	$	74,337	$	—	$	—


(1)		Our cash and cash equivalents primarily consist of cash in banks, commercial paper and overnight investments in highly rated financial institutions.

Item 2 —Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Overview

We are a leading designer, manufacturer and marketer of engineered, application-critical equipment and systems for global energy, industrial, chemical and pharmaceutical markets. We attribute our success to our close and continuing interaction with customers, our manufacturing, sourcing and application engineering expertise and our ability to serve customers globally. We continually develop initiatives to improve our performance in these key areas. For the first three months of fiscal 2009, demand for our products serving the energy markets, and certain of our products serving chemical markets, continued to show modest growth. Demand for our products that serve pharmaceutical and industrial markets slowed during this same time; we believe demand for these products was affected by the worldwide economic downturn. In response to the recent uncertain global economic environment, we developed plans to address the weaker market environment in order to reduce the impact on our profitability while continuing to address the long-term strategic direction of our business platforms, as further discussed below. With approximately 61% of our sales outside the United States, we were unfavorably impacted by foreign currency translation in the first quarter of fiscal 2009 due to the U.S. Dollar strengthening relative to our other principal operating currencies, namely the British Pound, the Euro and the Canadian Dollar. Additionally, the assets and liabilities of our foreign operations are translated at the exchange rates in effect at the balance sheet date, with related gains or losses reported as a separate component of the shareholders’ equity. The devaluation of most foreign currencies against the U.S. Dollar, in the first quarter of fiscal 2009 has impacted our financial condition at the end of the first quarter of fiscal 2009. Our business consists of three market focused segments: Fluid Management, Process Solutions and Romaco.

Fluid Management. Energy markets served by our Fluid Management segment have been favorable. Our primary objective for this segment is to ensure that we continue to capture and increase the opportunities in this growing market. We increased our manufacturing capacity through improved asset utilization and measured levels of capital expenditures, and we are delivering valued new product offerings in our niche market sectors. Our Fluid Management business segment designs, manufactures and markets equipment and systems, including hydraulic drilling power sections, down-hole and industrial progressing cavity pumps, wellhead systems, grinders, rod guides, tubing rotators and pipeline closures, used in oil and gas exploration and recovery, specialty chemical, wastewater treatment and a variety of other industrial applications.

Process Solutions. Key end markets served by our Process Solutions segment, chemical and pharmaceutical, recently slowed. Our primary objectives in this segment are to improve productivity through integration of operations and process improvements and to increase our presence in Asia. Our Process Solutions business segment designs, manufactures and services glass-lined reactors and storage vessels, standard and customized fluid-agitation equipment and systems and customized fluoropolymer-lined fittings, vessels and accessories, primarily for the pharmaceutical and specialty chemical markets.

Romaco. Our customer base within the key markets served by the Romaco segment, pharmaceutical, cosmetics and healthcare, has been expanding in developing areas of the world, although recently these markets slowed. We remain focused on simplifying this business, managing its cost structure in order to further improve profit levels and cost-effectively serving customers in developing global areas. Our Romaco business segment designs, manufactures and markets packaging and secondary processing equipment for the pharmaceutical, healthcare, nutriceutical and cosmetic industries. Packaging applications include dosing, filling and sealing of vials, capsules, tubes, bottles and blisters, as well as customized packaging.

The following tables present the components of our consolidated income statement and segment information for the three month periods of fiscal 2009 and 2008.


	Three Months Ended
	November 30,
	2008			2007
Net Sales		100.0	%		100.0	%
Cost of sales		61.8			63.8

Gross profit		38.2			36.2
SG&A expenses		23.4			22.8

EBIT		14.8	%		13.4	%


	Three Months Ended
	November 30,
	2008			2007
	(In thousands, except %’s)
Segment
Fluid Management:
Sales	$	82,270		$	72,355
EBIT		24,640			18,448
EBIT %		30.0	%		25.5	%

Process Solutions:
Sales	$	72,284		$	70,849
EBIT		6,869			7,956
EBIT %		9.5	%		11.2	%

Romaco:
Sales	$	23,417		$	30,332
EBIT		(1,443	)		1,545
EBIT %		(6.2)	%		5.1	%

The Company’s operating performance is evaluated using several measures. One of those measures, EBIT, is income before interest and income taxes and is reconciled to net income on our Consolidated Condensed Income Statement. We evaluate performance of our business segments and allocate resources based on EBIT. EBIT is not, however, a measure of performance calculated in accordance with accounting principles generally accepted in the United States and should not be considered as an alternative to net income as a measure of our operating results. EBIT is not a measure of cash available for use by management.

Net Sales

Consolidated net sales for the first quarter of fiscal 2009 were $178.0 million, $4.4 million higher than net sales for the first quarter of fiscal 2008. Excluding the impact of currency translation and an acquisition in the second quarter of fiscal 2008, net sales increased by $10.5 million or 6.1%.

The Fluid Management segment had sales of $82.3 million in the first quarter of fiscal 2009 compared with $72.4 million in the first quarter of fiscal 2008. Excluding currency translation, sales increased $13.0 million, or 18%, driven by continued strong demand for oilfield equipment products due to high levels of oil and gas exploration and recovery activity. Orders for this segment were $84.4 million in the first quarter of fiscal 2009 compared to $82.8 million in the first quarter of fiscal 2008. Excluding the impact of foreign currency translation, orders increased by 7.7% in the first quarter of fiscal 2009 over the same period in the prior year. Ending backlog of $61.7 million is 15.5% higher than in the prior year first quarter level.

The Process Solutions segment had sales of $72.3 million in the first quarter of fiscal 2009 compared with

$70.8 million in the first quarter of fiscal 2008. Excluding the impact of currency translation and an acquisition in the second quarter of fiscal 2008, sales increased by $2.8 million, or 3.9% over the prior year period. Excluding currency translation and acquisition impact, orders increased by 6.0% to $73.7 million, largely on higher demand for specialty chemical applications. Ending backlog of $114.3 million is 8.3% above prior year first quarter level.

The Romaco segment, which is primarily a Euro-based business, had sales of $23.4 million in the first quarter of fiscal 2009 compared with $30.3 million in the comparable period of the prior year. Excluding the impact of currency translation, sales decreased by $5.3 million or 17.4%. Adjusting for changes in currency exchange rates, orders decreased 8.2% from last year’s first quarter level. The reduction in backlog from $55.3 million at the end of the first quarter of fiscal 2008 to $47.7 million at the end of the first quarter of fiscal 2009 is primarily due to the revaluation of the backlog at current exchange rates.

Earnings Before Interest and Income Taxes (EBIT)

Consolidated EBIT for the first quarter of fiscal 2009 was $26.4 million, an increase of $3.2 million from the first quarter of fiscal 2008. Excluding the impact of currency translation and an acquisition in the second quarter of fiscal 2008, EBIT in the first quarter of fiscal 2009 increased $4.4 million, or 19% as compared to the same period in fiscal 2008. This increase is primarily attributable to strong sales performance in our Fluid Management Group, better pricing and a favorable product mix.

The Fluid Management segment had EBIT of $24.6 million in the first quarter of fiscal 2009 as compared with $18.4 million in the first quarter of fiscal 2008. Approximately $7.1 million of the increase in EBIT was from the sales increase described above and favorable product mix, offset by a reduction of $0.9 million related to currency translation.

The Process Solutions segment had EBIT of $6.9 million in the first quarter of fiscal 2009 compared with $8.0 million in the first quarter of fiscal 2008, a decrease of $1.1 million. Excluding the impact of currency translation and an acquisition in the second quarter of fiscal 2008, EBIT decreased marginally by $0.6 million over the same period in the prior year, mainly due to higher selling and other operating expenses.

The Romaco segment had negative EBIT of $1.4 million in the first quarter of fiscal 2009, a decrease of $2.9 million over first quarter of fiscal 2008. The decrease in EBIT was a result of lower sales, as well as an unfavorable foreign exchange currency impact.

Interest Expense

Net interest expense was $0.1 million in the first quarter of fiscal 2009 compared to $0.7 million in the same period of fiscal 2008. The decrease resulted primarily from lower debt levels in fiscal 2009 due to repayment of $70 million of our Senior Notes on May 1, 2008.

Income Taxes

The effective tax rate was 34.0% for the first quarter of fiscal 2009 which is comparable to 35.4% in the prior year period.

The Company adopted the provisions of FIN No. 48 on September 1, 2007. The total amount of unrecognized tax benefits as of the date of adoption was $6.3 million all of which would affect the effective tax rate if recognized in future periods. As a result of the implementation of FIN No. 48, the Company recognized a $5.5 million increase in the liability for unrecognized tax benefits accounted for as a decrease to retained earnings (cumulative effect) as of September 1, 2007. The balance of unrecognized tax benefits as of November 30, 2008 and August 31, 2008 was $5.3 million and $5.4 million, respectively.

Liquidity and Capital Resources

Operating Activities

In the first quarter of fiscal 2009, our cash flow used by operations was $6.1 million better than in the same period of the prior year. The improvement was from accounts receivable collections and improved operating profit. Seasonally we use cash in our first quarter because of increased inventory to support our backlog, variable compensation payments, and interest payments.

We expect our cash and fiscal 2009 operating cash flow to be adequate to fund fiscal year 2009 operating needs, shareholder dividends, planned capital expenditures and share repurchases.

Investing Activities

Our capital expenditures were $3.4 million in the first quarter of fiscal 2009 compared with $4.9 million in the first quarter of fiscal 2008. Our capital expenditures were primarily for capacity expansion in the Fluid Management segment, support for cost reduction initiatives, and replacement items.

Financing Activities

On October 27, 2008 we announced that our Board of Directors authorized the repurchase of up to 3.0 million of our currently outstanding common shares. In the first quarter of fiscal 2009, we acquired approximately 2.0 million of our outstanding common shares for $39.0 million under the repurchase program.

Credit Agreement

Our Bank Credit Agreement (“Agreement”) provides that we may borrow on a revolving credit basis up to a maximum of $150 million and includes a $100 million expansion feature. All outstanding amounts under the Agreement are due and payable on December 19, 2011. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the Agreement, at our option, and is payable quarterly. Indebtedness under the Agreement and the Senior Notes, is unsecured except for the pledge of the stock of our U.S. subsidiaries and two-thirds of the stock of certain non-U.S. subsidiaries. While no amounts are outstanding under the Agreement at November 30, 2008, we have $32.0 million of standby letters of credit outstanding at November 30, 2008. These standby letters of credit are used as security for advance payments received from customers, and for future payments to our vendors and reduce the amount we may borrow under the Agreement. Accordingly, under the Agreement we have $118.0 million of unused borrowing capacity.

Six banks participate in our revolving credit agreement. We are not dependent on any single bank for our financing needs.

Following is information regarding our long-term contractual obligations and other commitments outstanding as of November 30, 2008:


	Payments Due by Period
					Two to		Four to
			One year		three		five		After five
Long-term contractual obligations	Total		or less		years		years		years
	(In thousands)
Long-term debt	$	32,645	$	2,269	$	30,376	$	0	$	0
Operating leases ⁽¹⁾		17,000		6,000		7,000		3,000		1,000

Total contractual cash obligations	$	49,645	$	8,269	$	37,376	$	3,000	$	1,000


(1)		Operating leases are estimated as of November 30, 2008 and consist primarily of building and equipment leases.

The only other commercial commitments outstanding were standby letters of credit of $32.0 million, which are substantially due within one year.

Critical Accounting Policies

In preparing our consolidated financial statements, we follow accounting principles generally accepted in the United States of America, which in many cases require us to make assumptions, estimates and judgments that affect the amounts reported. Many of these policies are straightforward. There are, however, some policies that are critical because they are important in determining the financial condition and results of operations and some may involve management judgments due to the sensitivity of the methods, assumptions and estimates necessary in determining the related income statement, asset and/or liability amounts. These policies are described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Report on Form 10-K for the year ended August 31, 2008. There have been no material changes in the accounting policies followed by us during fiscal year 2009 other than the adoption of Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value Measurements” and SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115”, as discussed in Note 12.

Safe Harbor Statement

In addition to historical information, this report contains forward-looking statements identified by use of words such as “expects,” “anticipates,” “believes,” and similar expressions. These statements reflect management’s current expectations and involve known and unknown risks, uncertainties, contingencies and other factors that could cause actual results, performance or achievements to differ materially from those stated. The most significant of these risks and uncertainties are described in our Form 10-K report filed with the Securities and Exchange Commission and include, but are not limited to: the cyclical nature of some of our markets; a significant decline in capital expenditures in our primary markets; a major decline in oil and natural gas prices; reduced demand due to the general worldwide economic downturn and general credit market crises; increases in competition; changes in the availability and cost of our raw materials; foreign exchange rate fluctuations; work stoppages related to union negotiations; customer order cancellations; business disruptions caused by the implementation of business computer systems; the possibility of product liability suits that could harm our business; events or circumstances which result in an impairment of assets; the potential impact of U.S. and foreign legislation, government regulations, and other governmental 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 decline in the market value of our pension plans’ investment portfolios affecting our financial condition and results of operations. Except as otherwise required by law, we do not undertake any obligation to publicly update or revise these forward- looking statements to reflect events or circumstances after the date hereof.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In our normal operations we have market risk exposure to foreign currency exchange rates and interest rates. There has been no significant change in our market risk exposure with respect to these items during the quarter ended November 30, 2008. For additional information see “Qualitative and Quantitative Disclosures About Market Risk” at Item 7A of our Annual Report on Form 10-K for the year ended August 31, 2008.

Item 4. Controls and Procedures

(A) Evaluation of Disclosure Controls and Procedures

Management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), conducted an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (Disclosure Controls) as of November 30, 2008. Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s (SEC) rules and forms. Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our quarterly evaluation of Disclosure Controls includes an evaluation of some components of our internal control over financial reporting, and internal control over financial reporting is also separately evaluated on an annual basis.

Based on this evaluation, management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that our disclosure controls and procedures were effective as of November 30, 2008.

(B) Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II—Other Information

Item 1A. Risk Factors

For information regarding factors that could affect the Company’s operations, financial condition and liquidity, see the risk factors discussed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended August 31, 2008.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

A summary of the Company’s repurchases of its common shares during the quarter ended November 30, 2008 is as follows:

ISSUER PURCHASES OF EQUITY SECURITIES


					Total Number of		Maximum Number of
					Shares Purchased as		Shares that May
	Total Number		Average Price		Part of Publicly		Yet Be Purchased
	of Shares		Paid per		Announced Plans or		Under
Period	Purchased ^(a)		Share		Programs^(b)		the Plans or Programs
September 2008		—	$	—		—		—
October 2008		163,920		17.36		160,257		2,839,743
November 2008		1,847,280		19.63		1,847,280		992,463

Total		2,011,200	$	19.45		2,007,537


(a)		During the first quarter of fiscal 2009, the Company purchased 3,663 of its common shares in connection with its employee benefit plans, including purchases associated with the vesting of restricted stock awards. These purchases were not made pursuant to a publicly announced repurchase plan or program.

(b)		On October 27, 2008, our Board of Directors approved the repurchase of up to 3.0 million of our outstanding common shares (the “Program”). In the first quarter of fiscal 2009, we repurchased an aggregate of 2,007,537 of our outstanding common shares pursuant to the Program. In connection with the Program, the Company entered into a Rule 10b5-1 securities repurchase plan which was effective November 17, 2008 through January 7, 2009. The Program will expire when we have repurchased all the authorized shares under the Program, unless terminated earlier by a Board resolution.

Item 6. Exhibits

Exhibits – see INDEX TO EXHIBITS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ROBBINS & MYERS, INC.
DATE: January 8, 2009	BY	/s/ Christopher M. Hix
	Christopher M. Hix
	Vice President and Chief Financial Officer (Principal Financial Officer)


DATE: January 8, 2009	BY	/s/ Kevin J. Brown
	Kevin J. Brown
	Corporate Controller (Principal Accounting Officer)

INDEX TO EXHIBITS


(31)	RULE 13A-14(A) CERTIFICATIONS

	31.1 Rule 13a-14(a) CEO Certification	(F)

	31.2 Rule 13a-14(a) CFO Certification	(F)

(32)	SECTION 1350 CERTIFICATIONS

	32.1 Section 1350 CEO Certification	(F)

	32.2 Section 1350 CFO Certification	(F)


“F”		Filed herewith

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