Robbins & Myers Announces Third Quarter 2010 Results

Strengthening Orders, Sales, Profitability; Superb Cash Flow; Company Virtually Debt-Free

Jun 24, 2010, 08:27 ET from Robbins & Myers, Inc.

DAYTON, Ohio, June 24 /PRNewswire-FirstCall/ -- Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $0.25 for its fiscal third quarter ended May 31, 2010.  Fiscal 2009 third quarter DEPS of $0.31 included the benefit of a lower tax rate.

Third quarter orders of $159 million were 34% higher than the third quarter of 2009, most notably on strength in energy markets, and backlog grew to $160 million.  Third quarter 2010 sales of $147 million were 3% higher than the comparable prior year period.  Third quarter 2010 earnings before interest and taxes (EBIT) was $13 million, slightly higher than last year's third quarter and double the amount earned in the second quarter of this year.

"We are seeing improved customer demand across our portfolio of leading products and solutions," said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc.  "We are benefiting from recovering energy markets, and have seen notable sales increases in our product lines that support horizontal drilling activity for shale projects.  We have seen a higher level of quotation activity in our industrial product lines serving wastewater and chemical markets, but a full recovery for larger chemical projects is not expected this calendar year.  The demand for Romaco equipment is solid and improving as demonstrated by the business' profit levels in the third quarter."

Robbins & Myers reported $28 million of cash from operating activities in the third quarter of 2010 compared with $20 million in the prior year quarter, and the last of the Company's senior notes were repaid in May 2010.  The Company finished the recent quarter with $123 million of cash and virtually no debt, and it had $123 million of available capacity under its $150 million revolving credit agreement.

Mr. Wallace noted, "We have improved our working capital efficiency throughout the year, creating significant cash flow to bolster an already-strong balance sheet.  Our ample capital capacity supports our growth agenda, including acquisitions, new product development and geographic expansion."

Robbins & Myers established its fourth quarter DEPS forecast of $0.31-$0.41, supported by current order trends and backlog.  Robbins & Myers expects full year DEPS of $0.87-$0.97.  All forecast figures exclude the cost of restructuring actions.  Minimal restructuring costs were incurred during the first three quarters of 2010.

Third 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 Presentations" page of the "Investor Relations" section of the Company's website, www.robn.com.

The Company's Fluid Management segment orders of $85 million represent a 71% increase over the prior year third quarter, driven by strengthening energy and industrial markets.  Sales of $80 million are 10% higher than the comparable prior year period, and EBIT improved 17% to $20 million.

The Process Solutions segment reported orders of $47 million, 13% higher than the prior year third quarter.  Sales of $40 million were 14% lower than the comparable prior year period.  Lower volumes and competitive pricing pressures resulted in an EBIT loss of $2 million in the third quarter of 2010 versus EBIT income of $2 million in the third quarter of 2009.  The Company has been negotiating with the union representing workers at its German facility regarding the employment changes required to restore the business to long-term profitability.  No agreement has yet been reached, but the Company hopes to achieve a successful resolution in the near-term.

Romaco segment orders of $27 million were nearly in-line with prior year results.  Sales in the quarter were $27 million, 11% higher than the third quarter of 2009.  Romaco achieved EBIT of $1.4 million as compared with a $0.5 million EBIT loss in the prior year third quarter.

Conference Call to Be Held Today, June 24 at 3:00 PM (Eastern)

A conference call to discuss these results has been scheduled for 3:00 PM Eastern on Thursday, June 24, 2010, which can be accessed at www.robn.com or by dialing 1-866-510-0712 (US/Canada) or +1-617-597-5380, using conference ID #35640996.  Replays of the call can be accessed by dialing 1-888-286-8010 (U.S./Canada) or +1-617-801-6888, using replay ID #37056553.

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)

May 31, 2010

August 31, 2009

ASSETS

Current Assets:

Cash and cash equivalents

$122,697

$108,169

Accounts receivable

104,050

114,191

Inventories

101,842

105,772

Other current assets

10,869

11,573

Deferred taxes

11,218

12,519

 Total Current Assets

350,676

352,224

Goodwill & Other Intangible Assets

262,411

273,476

Deferred Taxes

24,692

26,477

Other Assets

9,474

9,490

Property, Plant & Equipment

122,918

135,187

$770,171

$796,854

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$53,041

$55,918

Accrued expenses

80,227

68,059

Current portion of long-term debt

641

30,194

 Total Current Liabilities

133,909

154,171

Long-Term Debt - Less Current Portion

161

265

Deferred Taxes

43,867

44,194

Other Long-Term Liabilities

112,056

115,113

Shareholders' Equity

480,178

483,111

$770,171

$796,854

ROBBINS & MYERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENT

(Unaudited)

Three Months Ended

Nine Months Ended

May 31,

May 31,

May 31,

May 31,

(in thousands,  except per share data)

2010

2009

2010

2009

Sales

$146,965

$143,375

$406,297

$485,171

Cost of sales

95,587

93,582

269,955

310,626

Gross profit

51,378

49,793

136,342

174,545

SG&A expenses

38,300

37,398

106,982

114,921

Income before interest and income taxes

13,078

12,395

29,360

59,624

Interest expense, net

102

99

406

242

Income before income taxes

12,976

12,296

28,954

59,382

Income tax expense

4,650

1,628

9,949

15,875

Net income including noncontrolling interest

8,326

10,668

19,005

43,507

Less: Net income attributable to noncontrolling interest

164

382

620

950

Net income attributable to Robbins & Myers, Inc.

$8,162

$10,286

$18,385

$42,557

Net income per share:

Basic

$0.25

$0.31

$0.56

$1.28

Diluted

$0.25

$0.31

$0.56

$1.28

Weighted average common shares outstanding:

Basic

32,941

32,829

32,913

33,353

Diluted

33,016

32,845

32,973

33,365

ROBBINS & MYERS, INC. AND SUBSIDIARIES

CONDENSED BUSINESS SEGMENT INFORMATION

(Unaudited)

Three Months Ended

Nine Months Ended

May 31,

May 31,

May 31,

May 31,

(in thousands)

2010

2009

2010

2009

Customer Sales

Fluid Management

$79,813

$72,542

$214,971

$259,943

Process Solutions

39,898

46,373

123,298

148,900

Romaco

27,254

24,460

68,028

76,328

Total

$146,965

$143,375

$406,297

$485,171

Income Before Interest and Income Taxes (EBIT)

Fluid Management

$20,104

$17,153

$50,471

$67,660

Process Solutions

(1,895)

2,246

(6,084)

7,468

Romaco

1,357

(464)

939

(1,465)

Corporate and Eliminations

(6,488)

(6,540)

(15,966)

(14,039)

Total

$13,078

$12,395

$29,360

$59,624

Depreciation and Amortization

Fluid Management

$1,995

$1,950

$6,011

$6,036

Process Solutions

1,262

1,447

4,164

4,265

Romaco

575

501

1,725

1,483

Corporate and Eliminations

74

98

231

360

Total

$3,906

$3,996

$12,131

$12,144

Orders

Fluid Management

$84,987

$49,718

$232,954

$216,736

Process Solutions

47,320

42,033

134,034

140,300

Romaco

26,853

27,333

84,830

75,177

Total

$159,160

$119,084

$451,818

$432,213

Backlog

Fluid Management

$52,000

$46,311

$52,000

$46,311

Process Solutions

68,323

74,152

68,323

74,152

Romaco

39,724

48,302

39,724

48,302

Total

$160,047

$168,765

$160,047

$168,765

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

Nine Months Ended

May 31,

May 31,

May 31,

May 31,

(in thousands)

2010

2009

2010

2009

Operating activities:

  Net income including noncontrolling interest

$8,326

$10,668

$19,005

$43,507

  Depreciation and amortization

3,906

3,996

12,131

12,144

  Other, net

15,379

5,496

25,978

(30,566)

Cash provided by operating activities

27,611

20,160

57,114

25,085

Investing activities:

  Capital expenditures

(3,259)

(5,870)

(6,706)

(12,914)

  Proceeds from asset sales

-

-

1,094

-

Cash used by investing activities

(3,259)

(5,870)

(5,612)

(12,914)

Financing activities:

  Payments of long-term debt, net

(30,227)

(840)

(29,657)

(3,035)

  Share buyback program

-

-

-

(39,114)

  Dividends paid

(1,402)

(1,313)

(4,115)

(3,929)

  Other, net

273

387

639

1,246

Cash used by financing activities

(31,356)

(1,766)

(33,133)

(44,832)

Exchange rate impact on cash

(2,719)

3,897

(3,841)

(2,198)

(Decrease) increase in cash

(9,723)

16,421

14,528

(34,859)

Cash at beginning of period

132,420

72,125

108,169

123,405

Cash at end of period

$122,697

$88,546

$122,697

$88,546

SOURCE Robbins & Myers, Inc.



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http://www.robn.com