Robbins & Myers Announces Second Quarter 2010 Results
Order Levels Continue to Improve; Cash Generation Remains Strong
DAYTON, Ohio, March 24 /PRNewswire-FirstCall/ -- Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $0.13 for its fiscal second quarter ended February 28, 2010 as compared with $0.46 in the comparable prior year period. The Company also reported that second quarter orders of $156 million were 21% higher than the second quarter of 2009 and 13% higher than the first quarter of 2010, with growth noted in each of the Company's segments.
Second quarter sales of $130 million were 21% lower than the second quarter of 2009. Lower sales volumes, combined with difficult pricing conditions in certain markets, contributed to lower earnings before interest and taxes (EBIT) of $7 million in the second quarter of 2010.
"We are encouraged by the growth in order levels, especially in energy markets," said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. "Offsetting some of the benefit from this growth are pricing pressures within our Process Solutions Group. We are actively addressing the cost structure in this business, having cut over $2 million of annualized costs in the first half of this year and implementing another restructuring initiative later this month to cut an additional $3 million of annualized costs. Our attention to operating improvements throughout Robbins & Myers also contributed to improved cash flow in the quarter."
$18 million of cash was generated from operating activities in the second quarter of 2010, substantially higher than the $5 million in the prior year quarter. The Company's cash balances grew to $132 million. Robbins & Myers has $31 million of debt, including $30 million of senior notes which mature on May 3, 2010. The Company's $150 million revolving credit agreement remains undrawn.
Mr. Wallace said, "Continued customer order growth supports our projections for strengthening financial performance in the second half of fiscal 2010." The Company initiated its third quarter DEPS forecast of $0.13-$0.23, excluding the cost of restructuring actions which are expected to be approximately $2 million. Robbins & Myers affirmed its full year 2010 DEPS forecast of $0.80-$1.00, excluding the cost of restructuring actions.
Second Quarter Results by Segment
In January, the Company 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 $80 million represent a 20% increase over the prior year second quarter and a 17% sequential increase from the first quarter of 2010, driven primarily from strengthening energy markets. Sales of $67 million are 23% lower than the comparable prior year period, and EBIT fell 39% to $14 million.
The Process Solutions segment reported orders of $45 million, 11% higher than the prior year second quarter or 5% excluding currency translation effects. Sales of $40 million were 18% lower than the comparable prior year period or 23% excluding currency translation effects. The segment incurred an EBIT loss of $3 million in the second quarter of 2010 as a result of lower sales and pricing pressures. In the second quarter of 2009, the segment had EBIT income of $2 million.
Romaco segment orders of $31 million were 46% higher than the comparable prior year quarter or 32% excluding currency translation effects. Segment backlog also included a $9 million reduction to reflect the cancellation of an order originally booked in fiscal 2006. Sales in the quarter were $23 million, 19% less than the second quarter of 2009. Romaco EBIT of $0.3 million was similar to the amount earned in the prior year second quarter.
Conference Call to Be Held Today, March 24 at 1:30 PM (Eastern)
A conference call to discuss these results has been scheduled for 1:30 PM Eastern on Wednesday, March 24, 2010, which can be accessed at www.robn.com or by dialing 1-866-700-7477 (US/Canada) or +1-617-213-8840, using conference ID #58160159. Replays of the call can be accessed by dialing 1-888-286-8010 (U.S./Canada) or +1-617-801-6888, using replay ID #33481357.
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 as well as economic or political instability in international markets and the performance of our business in hyperinflationary environments, such as Venezuela; 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, or valuation against, 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) February 28, 2010 August 31, 2009
-------------- ----------------- ---------------
ASSETS
Current Assets:
Cash and cash equivalents $132,420 $108,169
Accounts receivable 104,655 114,191
Inventories 103,929 105,772
Other current assets 14,619 11,573
Deferred taxes 11,304 12,519
----------------- ---------------
Total Current Assets 366,927 352,224
Goodwill & Other Intangible Assets 269,737 273,476
Deferred Taxes 25,698 26,477
Other Assets 8,985 9,490
Property, Plant & Equipment 127,966 135,187
----------------- ---------------
$799,313 $796,854
================= ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $46,658 $55,918
Accrued expenses 77,054 68,059
Current portion of long-term debt 30,853 30,194
----------------- ---------------
Total Current Liabilities 154,565 154,171
Long-Term Debt - Less Current Portion 176 265
Deferred Taxes 44,106 44,194
Other Long-Term Liabilities 114,411 115,113
Shareholders' Equity 486,055 483,111
----------------- ---------------
$799,313 $796,854
================= ===============
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited)
Three Months Ended Six Months Ended
(in thousands, ------------------ ------------------
except per share February 28, February 28, February 28, February 28,
data) 2010 2009 2010 2009
----------------- ------------ ------------ ------------ ------------
Sales $129,919 $163,825 $259,332 $341,796
Cost of sales 87,989 107,049 174,368 217,044
------------ ------------ ------------ ------------
Gross profit 41,930 56,776 84,964 124,752
SG&A expenses 35,384 35,941 68,682 77,523
------------ ------------ ------------ ------------
Income before
interest and income
taxes 6,546 20,835 16,282 47,229
Interest expense,
net 161 90 304 143
------------ ------------ ------------ ------------
Income before
income taxes 6,385 20,745 15,978 47,086
Income tax expense 1,932 5,290 5,299 14,247
------------ ------------ ------------ ------------
Net income
including
noncontrolling
interest 4,453 15,455 10,679 32,839
Less: Net income
attributable to
noncontrolling
interest 260 392 456 568
------------ ------------ ------------ ------------
Net income
attributable to
Robbins & Myers,
Inc. $4,193 $15,063 $10,223 $32,271
============ ============ ============ ============
Net income per share:
Basic $0.13 $0.46 $0.31 $0.96
Diluted $0.13 $0.46 $0.31 $0.96
Weighted average common shares outstanding:
Basic 32,927 32,802 32,899 33,620
Diluted 32,966 32,804 32,949 33,679
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONDENSED BUSINESS SEGMENT INFORMATION
(Unaudited)
(in thousands) Three Months Ended Six Months Ended
------------------ ------------------
February 28, February 28, February 28, February 28,
2010 2009 2010 2009
------------ ------------ ------------ ------------
Customer Sales
Fluid Management $66,970 $86,871 $135,158 $187,401
Process
Solutions 39,867 48,503 83,400 102,527
Romaco 23,082 28,451 40,774 51,868
------------ ------------ ------------ ------------
Total $129,919 $163,825 $259,332 $341,796
============ ============ ============ ============
Income Before Interest and Income
Taxes (EBIT)
Fluid
Management $13,633 $22,283 $30,367 $50,507
Process
Solutions (2,538) 1,937 (4,189) 5,222
Romaco 340 442 (418) (1,001)
Corporate and
Eliminations (4,889) (3,827) (9,478) (7,499)
------------ ------------ ------------ ------------
Total $6,546 $20,835 $16,282 $47,229
============ ============ ============ ============
Depreciation and
Amortization
Fluid
Management $1,969 $2,023 $4,016 $4,086
Process
Solutions 1,419 1,400 2,902 2,818
Romaco 572 500 1,150 982
Corporate and
Eliminations 71 132 157 262
------------ ------------ ------------ ------------
Total $4,031 $4,055 $8,225 $8,148
============ ============ ============ ============
Orders
Fluid
Management $79,860 $66,688 $147,967 $167,018
Process
Solutions 44,800 40,489 86,714 98,267
Romaco 30,843 21,119 57,977 47,844
------------ ------------ ------------ ------------
Total $155,503 $128,296 $292,658 $313,129
============ ============ ============ ============
Backlog
Fluid
Management $46,937 $66,441 $46,937 $66,441
Process
Solutions 63,013 78,428 63,013 78,428
Romaco 43,879 40,558 43,879 40,558
------------ ------------ ------------ ------------
Total $153,829 $185,427 $153,829 $185,427
============ ============ ============ ============
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 Six Months Ended
------------------ ------------------
February 28, February 28, February 28, February 28,
(in thousands) 2010 2009 2010 2009
------------------ ------------ ------------ ------------ ------------
Operating activities:
Net income
including
noncontrolling
interest $4,453 $15,455 $10,679 $32,839
Depreciation and
amortization 4,031 4,055 8,225 8,148
Other, net 9,729 (14,287) 10,599 (36,062)
------------ ------------ ------------ ------------
Cash provided by
operating
activities 18,213 5,223 29,503 4,925
Investing activities:
Capital
expenditures (1,265) (3,667) (3,447) (7,044)
Proceeds from
asset sales 1,094 - 1,094 -
------------ ------------ ------------ ------------
Cash used by
investing
activities (171) (3,667) (2,353) (7,044)
Financing activities:
(Payments)
proceeds of long-
term debt, net (716) (1,213) 570 (2,195)
Share buyback
program - - - (39,114)
Dividends paid (1,399) (1,314) (2,713) (2,616)
Other, net 255 288 366 859
------------ ------------ ------------ ------------
Cash used by
financing
activities (1,860) (2,239) (1,777) (43,066)
Exchange rate
impact on cash (2,872) (1,529) (1,122) (6,095)
------------ ------------ ------------ ------------
Increase
(decrease) in cash 13,310 (2,212) 24,251 (51,280)
Cash at beginning
of period 119,110 74,337 108,169 123,405
------------ ------------ ------------ ------------
Cash at end of
period $132,420 $72,125 $132,420 $72,125
============ ============ ============ ============
SOURCE Robbins & Myers, Inc.
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