Robbins & Myers Announces First Quarter 2010 Results

Higher Backlog from Sequential Order Growth; Strong Cash Flow Execution; Full Year Earnings Guidance Maintained

Jan 06, 2010, 08:23 ET from Robbins & Myers, Inc.

DAYTON, Ohio, Jan. 6 /PRNewswire-FirstCall/ -- Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $0.18 for its fiscal first quarter ended November 30, 2009, including approximately $0.02 from one-time benefits. In the prior year first quarter, the Company reported DEPS of $0.50.

The Company reported $137 million of customer orders in the fiscal first quarter, $15 million sequentially higher than the fourth quarter of 2009 and $48 million lower than the first quarter of 2009. Backlog grew $12 million in the first quarter to $147 million. First quarter sales of $129 million trailed the comparable prior year period by $49 million.

"Order levels improved sequentially in two of our platform businesses, contributing to higher backlog for the enterprise," said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. "We are encouraged by these and other signals of an improving global economy but continue to operate in an environment of reduced customer demand and, in some cases, pricing pressures. As a result, our businesses remain focused on initiatives to improve profitability, including restructuring programs and cost controls."

Robbins & Myers generated $11 million of cash from operating activities in the first quarter of 2010, including working capital contributions, as compared with a small use of cash in the prior year same quarter. The Company expanded its cash balances to $119 million at the end of the first quarter and reported $32 million of debt.

First quarter 2010 earnings before interest and taxes (EBIT) were $10 million, which was lower than first quarter 2009 EBIT of $26 million due to reduced sales resulting from the global economic downturn. Current year EBIT includes $2.5 million of benefits from foreign exchange gains and an insurance recovery, reduced by $1.5 million of corporate costs incurred in conjunction with strategic and legal matters concluded in the first quarter.

Mr. Wallace commented, "As expected, fiscal 2010 is starting slowly as a result of recent customer order and backlog levels. We expect current customer demand conditions to persist into our fiscal second quarter, which will also include our typical, seasonal facility shutdowns. For the full year, our financial performance depends in large part on the pace and scope of the economic recovery, especially in the second half." The Company expects full year 2010 DEPS of $0.80-$1.00 and second quarter DEPS of $0.05-$0.15, excluding the cost of restructuring actions.

First Quarter Results by Segment

The Company previously announced a realignment of its businesses that included moving its Chemineer US and Asian operations from the Process Solutions Group to the Fluid Management Group. All results included in this press release have been adjusted to reflect the new operating and reporting structure. A recasting of quarterly segment results for fiscal 2007 through 2009 can be viewed in the "Investor Relations" section of the Company's website, www.robn.com.

The Company's Fluid Management segment orders of $68 million represent a 32% decline from the prior year first quarter but are $10 million sequentially higher than the fourth quarter of fiscal 2009. Sales of $68 million are 32% lower than the comparable prior year period, and EBIT fell 41% to $17 million. First quarter EBIT includes $2 million of benefit from foreign exchange gains and an insurance recovery.

The Process Solutions segment reported orders of $42 million, 27% lower than the prior year first quarter but $6 million sequentially higher than the fourth quarter of fiscal 2009. Sales of $44 million were 19% lower than the comparable prior year period. The segment incurred an EBIT loss of $2 million in the first quarter of 2010 as a result of lower sales and competitive project pricing; in the first quarter of 2009, the segment had EBIT income of $3 million.

The Romaco segment reported orders of $27 million, 2% higher than the comparable prior year quarter but $1 million sequentially lower than the fourth quarter of fiscal 2009. Sales in the quarter were $18 million, 24% less than the first quarter of 2009. Romaco incurred an EBIT loss of $1 million in the first quarter of 2010, similar to performance in the prior year first quarter.

Conference Call to Be Held Today, January 6 at 2:30 PM (Eastern)

A conference call to discuss these results has been scheduled for 2:30 PM Eastern on Wednesday, January 6, 2010, which can be accessed at www.robn.com or by dialing 1-866-700-0161 (US/Canada) or +1-617-213-8832, using conference ID #86054479. Replays of the call can be accessed by dialing 1-888-286-8010 (U.S./Canada) or +1-617-801-6888, both using replay ID #85472549.

About Robbins & Myers

Robbins & Myers, Inc. is a leading supplier of engineered equipment and systems for critical applications in global energy, industrial, chemical and pharmaceutical markets.

In this release the Company refers to EBIT, a non-GAAP measure. The Company uses this measure to evaluate its performance and believes this measure is helpful to investors in assessing its performance. A reconciliation of this measure to net income is included in our Condensed Consolidated Income Statement. EBIT is not a measure of cash available for use by the Company.

In addition to historical information, this press release 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 and Form 10-Q reports 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; our ability to realize the benefits of our restructuring programs; 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; the possibility of product liability lawsuits 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; proposed changes in U.S. tax law which could impact our future tax expense and cash flow; 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.


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

      (in thousands)                     November 30, 2009  August 31, 2009
      --------------                     -----------------  ---------------
      ASSETS
        Current Assets:
          Cash and cash equivalents               $119,110         $108,169
          Accounts receivable                      111,642          114,191
          Inventories                              109,259          105,772
          Other current assets                      10,139           11,573
          Deferred taxes                            11,411           12,519
                                                    ------           ------
            Total Current Assets                   361,561          352,224

        Goodwill & Other Intangible Assets         279,683          273,476
        Deferred Taxes                              26,827           26,477
        Other Assets                                 8,652            9,490
        Property, Plant & Equipment                136,314          135,187
                                                   -------          -------
                                                  $813,037         $796,854
                                                  ========         ========
      LIABILITIES AND SHAREHOLDERS' EQUITY
        Current Liabilities:
          Accounts payable                         $46,644          $55,918
          Accrued expenses                          73,199           68,059
          Current portion of long-term debt         31,666           30,194
                                                    ------           ------
            Total Current Liabilities              151,509          154,171

        Long-Term Debt - Less Current Portion          277              265
        Deferred Taxes                              44,410           44,194
        Other Long-Term Liabilities                118,472          115,113
        Shareholders' Equity                       498,369          483,111
                                                   -------          -------
                                                  $813,037         $796,854
                                                  ========         ========


    ROBBINS & MYERS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED INCOME STATEMENT
           (Unaudited)
                                                     Three Months Ended
                                                -----------------------------
                                                November 30,     November 30,
    (in thousands,  except per share data)          2009             2008
    --------------------------------------          ----             ----

    Sales                                         $129,413         $177,971
    Cost of sales                                   86,379          109,995
                                                    ------          -------
    Gross profit                                    43,034           67,976
    SG&A expenses                                   33,298           41,582
                                                    ------           ------
    Income before interest and income taxes          9,736           26,394
    Interest expense, net                              143               53
                                                       ---              ---
    Income before income taxes                       9,593           26,341
    Income tax expense                               3,367            8,957
                                                     -----            -----
    Net income including noncontrolling interest     6,226           17,384
    Less: Net income attributable to
     noncontrolling interest                           196              176
                                                       ---              ---
    Net income attributable to
     Robbins & Myers, Inc. shareholders             $6,030          $17,208
                                                    ======          =======

    Net income per Robbins & Myers, Inc. share:
       Basic                                         $0.18            $0.50
       Diluted                                       $0.18            $0.50

    Weighted average Robbins & Myers, Inc.
     common shares outstanding:
       Basic                                        32,872           34,429
       Diluted                                      32,911           34,465


    ROBBINS & MYERS, INC. AND SUBSIDIARIES
    CONDENSED BUSINESS SEGMENT INFORMATION
           (Unaudited)
                                                     Three Months Ended
                                               -----------------------------
                                                November 30,    November 30,
    (in thousands)                                  2009            2008
    --------------                                  ----            ----

      Customer Sales
        Fluid Management                           $68,188         $100,530
        Process Solutions                           43,533           54,024
        Romaco                                      17,692           23,417
                                                    ------           ------
        Total                                     $129,413         $177,971
                                                  ========         ========

      Income Before Interest and Income
       Taxes (EBIT)
        Fluid Management                           $16,734          $28,224
        Process Solutions                           (1,651)           3,285
        Romaco                                        (758)          (1,443)
        Corporate and Eliminations                  (4,589)          (3,672)
                                                    ------           ------
        Total                                       $9,736          $26,394
                                                    ======          =======

      Depreciation and Amortization
        Fluid Management                            $2,047           $2,063
        Process Solutions                            1,483            1,418
        Romaco                                         578              482
        Corporate and Eliminations                      86              130
                                                       ---              ---
        Total                                       $4,194           $4,093
                                                    ======           ======

      Orders
        Fluid Management                           $68,107         $100,330
        Process Solutions                           41,914           57,778
        Romaco                                      27,134           26,725
                                                    ------           ------
        Total                                     $137,155         $184,833
                                                  ========         ========

      Backlog
        Fluid Management                           $35,162          $87,722
        Process Solutions                           60,295           88,201
        Romaco                                      51,410           47,676
                                                    ------           ------
        Total                                     $146,867         $223,599
                                                  ========         ========

    Note: EBIT is a non-GAAP measure.  The Company uses this measure to
    evaluate its performance and believes this measure is helpful to
    investors in assessing its performance. A reconciliation of this measure
    to net income is included in our Condensed Consolidated Income
    Statement. EBIT is not a measure of cash available for use by the
    Company.


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


                                                      Three Months Ended
                                                -----------------------------
                                                November 30,     November 30,
    (in thousands)                                  2009             2008
    --------------                                  ----             ----
    Operating activities:
       Net income including noncontrolling
        interest                                    $6,226          $17,384
       Depreciation and amortization                 4,194            4,093
       Other, net                                      870          (21,775)
                                                       ---          -------
    Cash provided (used) by operating activities    11,290             (298)

    Investing activities:
       Capital expenditures, net of nominal
        disposals                                   (2,182)          (3,377)
                                                    ------           ------
    Cash used by investing activities               (2,182)          (3,377)

    Financing activities:
       Proceeds (payments) of long-term debt, net    1,286             (982)
       Share repurchases                                 -          (39,114)
       Other, net                                   (1,203)            (731)
                                                    ------             ----
    Cash provided (used) by financing activities        83          (40,827)
    Exchange rate impact on cash                     1,750           (4,566)
                                                     -----           ------
    Increase (decrease) in cash                     10,941          (49,068)
    Cash at beginning of period                    108,169          123,405
                                                   -------          -------
    Cash at end of period                         $119,110          $74,337
                                                  ========          =======

SOURCE Robbins & Myers, Inc.



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http://www.robn.com