ROBBINS & MYERS, INC. - FORM 8-K - EX-99.1

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8-K - 8-K - ROBBINS & MYERS, INC.	d278574d8k.htm

Exhibit 99.1

Investor Relations

+1 (937) 458-6600

ROBBINS & MYERS ANNOUNCES FIRST QUARTER 2012 RESULTS

AND DIVIDEND INCREASE

Segments Realigned to Support Focused Growth Initiatives

HOUSTON, TEXAS, January 6, 2012…Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $0.77 for its fiscal first quarter ended November 30, 2011, compared with $0.44 in the prior year first quarter from continuing operations. Robbins & Myers achieved significant year-over-year growth in orders, sales, operating income and backlog.

Consolidated sales were $237 million in the first quarter of fiscal 2012. Orders outpaced sales and were $254 million for the first quarter of fiscal 2012. Backlog continued to grow and ended the quarter at $260 million, a $9 million increase for the quarter. Excluding the impact of currency translation and T-3 Energy Services, Inc. (“T-3”), which was acquired in the second quarter of fiscal year 2011, sales grew $30 million, or 21%, over the comparable period of the prior year.

The Company reported first quarter fiscal 2012 earnings before interest and taxes (EBIT) of $53 million, significantly higher than the $24 million reported in the first quarter of fiscal 2011. The inclusion of T-3, higher organic sales and cost reduction actions drove this increase. Operating margins grew 510 basis points to 22.2%. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) were $60 million, 25% of sales, compared to $27 million, 19% of sales, in the same prior year quarter.

First quarter fiscal 2012 cash from operations was $29 million, an improvement of $31 million from the same prior year period. Under the Company’s share repurchase program the Company bought 351 thousand shares for $16 million during the quarter. The Company ended the first quarter of 2012 with $231 million of cash, slightly higher than the ending balance of the last quarter despite the share repurchase program.

“We continue to be well situated with our expanded Energy Services product offering following the acquisition of T-3. We have taken steps to bring on additional capacity and leverage existing assets to take greater advantage of growing end-market demand,” said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. “While sequential orders in the Process and Flow Control segment softened in the quarter, we continue to see general signs of improving markets and demand.”

Based on the strength of served energy and fine chemical end markets, the Company is increasing its fiscal 2012 DEPS forecast from $2.85-$3.05 to $3.00-$3.20. The Company expects to earn $0.68-$0.78 in its second quarter of fiscal 2012 after considering seasonal holiday plant shut-down inefficiencies and additional investments in personnel to support our growth programs.

Segment Realignment

Mr. Wallace also commented, “With our acquisition of T-3 in fiscal 2011, we have realigned our segments around the primary end markets we serve. The Energy Services segment will be focused on increasing sales in the growing oil and gas upstream energy markets, while the Process and Flow Control segment will be focused on the specialty chemical, pharmaceutical and general industrial markets.” All results included in this press release have been recast to reflect the new operating and reporting structure. A recasting of quarterly segment data for fiscal 2009 through 2011 is attached and also can be viewed in the “Investor Relations” section of the Company’s website, www.robn.com.

First Quarter Results by Segment

All comparisons are to the comparable period of the prior year unless otherwise stated.

The Company’s Energy Services segment reported orders of $169 million. Excluding T-3, orders were $95 million, up 31% due to strength in the oil and gas markets. Sales were $147 million in the first quarter of fiscal 2012. Excluding T-3, sales were $80 million, a 29% increase from the same period of the prior year. EBIT was $47 million or 32.2% of sales. Ending backlog was $143 million, an increase of $22 million for the quarter.

The Process and Flow Control segment reported orders of $85 million, an increase of approximately 1% over the prior year. Sales of $90 million were 14% over prior year. EBIT was $10 million, the highest level since the first quarter of fiscal 2009. EBIT as a percentage of sales increased 290 basis points to 11.1% in the first quarter of fiscal 2012. Ending backlog was $117 million.

Dividend Increase

Robbins & Myers also announced today that its Board of Directors approved an increase in the quarterly cash dividend payment from $0.045 to $0.050 per share. The dividend is payable on February 17, 2012 to shareholders of record as of January 20, 2012.

Mr. Wallace commented, “I am pleased to announce our sixth consecutive annual dividend increase, reflecting our strong financial position, successful business performance, and strategy to create long-term shareholder value.”

Conference Call to Be Held Today, January 6, at 9:00 AM Central (10:00 AM Eastern)

A conference call to discuss first quarter 2012 financial results has been scheduled for 9:00 AM Central (10:00 AM Eastern) on Friday, January 6, 2012. The call can be accessed at www.robn.com or by dialing 866-271-6130 (US/Canada) or +1-617-213-8894, using conference ID #42720825. Replays of the call can be accessed by dialing 888-286-8010 (U.S./Canada) or +1-617-801-6888, both using replay ID #15620837.

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 and EBITDA, which are non-GAAP measures. The Company uses these measures to evaluate its performance and believes these measures are helpful to investors in assessing its performance. A reconciliation of EBIT and EBITDA to net income from continuing operations is included herein. EBIT and EBITDA are not measures of cash available for use by the Company.

Forward-Looking Statements

Statements set forth in this press release that are not historical facts, including statements regarding future financial performance, future market demand, future benefits to shareholders, future economic and industry conditions, are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company’s control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. These risks and uncertainties include, but are not limited to: changes in the demand for or price of oil and/or natural gas; a significant decline in capital expenditures within the markets served by the Company; the failure of our Energy Services products used in oil and gas exploration, development and production; the possibility of product liability lawsuits that could harm our businesses; the sale of the Romaco businesses (including its benefits and effects); costs and difficulties related to the integration of T-3; dilution of earnings per share due to merger-related issuance of common shares; the inability to or delay in obtaining cost savings and synergies from the T-3 merger; inability to retain key personnel; the ability to realize the benefits of restructuring programs; increases in competition; changes in the availability and cost of raw materials; foreign exchange rate fluctuations as well as economic or political instability in international markets and performance in hyperinflationary environments, such as Venezuela; work stoppages related to union negotiations; customer order cancellations; 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 offshore drilling and hydraulic fracturing, and 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; and other important risk factors discussed more fully in Robbins & Myers’ Annual Report on Form 10-K for the year ended August 31, 2011; its recent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K; and other reports filed from time to time with the SEC. Robbins & Myers does not undertake any obligation to revise or update publicly any forward-looking statements for any reason.

ROBBINS & MYERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)


(in thousands)	November 30, 2011		August 31, 2011
ASSETS
Current Assets:
Cash and cash equivalents	$	231,453	$	230,606
Accounts receivable		172,260		166,511
Inventories		154,717		151,463
Other current assets		9,461		11,247
Deferred taxes		18,479		18,674

Total Current Assets		586,370		578,501

Goodwill & Other Intangible Assets		783,975		798,719
Deferred Taxes		25,728		26,344
Other Assets		14,686		13,776
Property, Plant & Equipment		164,079		165,626

	$	1,574,838	$	1,582,966


LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	80,435	$	84,761
Accrued expenses		92,702		91,253
Current portion of long-term debt		742		421

Total Current Liabilities		173,879		176,435
Long-Term Debt—Less Current Portion		23		24
Deferred Taxes		131,326		131,697
Other Long-Term Liabilities		104,720		108,391
Total Equity		1,164,890		1,166,419

	$	1,574,838	$	1,582,966

ROBBINS & MYERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENT

(Unaudited)


	Three Months Ended
(in thousands, except per share data)	November 30, 2011			November 30, 2010
Sales	$	237,323		$	140,770
Cost of sales		141,782			87,421

Gross profit		95,541			53,349
Selling, general and administrative expenses		42,960			29,245

Income before interest and income taxes (EBIT)		52,581			24,104
Interest (income), net		(61	)		(25	)

Income from continuing operations before income taxes		52,642			24,129
Income tax expense		17,187			9,104

Net income from continuing operations		35,455			15,025
Income from discontinued operations, net of tax		—			67

Net income including noncontrolling interest		35,455			15,092
Less: Net income attributable to noncontrolling interest		198			396

Net income attributable to Robbins & Myers, Inc.	$	35,257		$	14,696


Net income per share from continuing operations:
Basic	$	0.77		$	0.44
Diluted	$	0.77		$	0.44

Net income per share:
Basic	$	0.77		$	0.45
Diluted	$	0.77		$	0.44
Weighted average common shares outstanding:
Basic		45,842			32,971
Diluted		46,060			33,087

ROBBINS & MYERS, INC. AND SUBSIDIARIES

CONDENSED BUSINESS SEGMENT INFORMATION FOR CONTINUING OPERATIONS

(Unaudited)


	Three Months Ended
(in thousands)	November 30, 2011			November 30, 2010
Customer Sales
Energy Services	$	146,988		$	61,827
Process and Flow Control		90,335			78,943

Total	$	237,323		$	140,770


Income Before Interest and Income Taxes (EBIT)
Energy Services	$	47,298		$	22,746
Process and Flow Control		10,070			6,538
Corporate and Eliminations		(4,787	)		(5,180	)

Total	$	52,581		$	24,104


Depreciation and Amortization
Energy Services	$	5,789		$	1,126
Process and Flow Control		2,019			2,034
Corporate and Eliminations		84			72

Total	$	7,892		$	3,232


Orders
Energy Services	$	169,465		$	72,316
Process and Flow Control		84,573			83,955

Total	$	254,038		$	156,271


Backlog
Energy Services	$	142,971		$	36,720
Process and Flow Control		116,948			116,849

Total	$	259,919		$	153,569

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
(in thousands)	November 30, 2011			November 30, 2010
Operating activities:
Net income including noncontrolling interest	$	35,455		$	15,092
Depreciation and amortization		7,892			3,891
Working capital		(16,036	)		(24,485	)
Other changes, net		1,610			2,992

Cash provided (used) by operating activities		28,921			(2,510	)

Investing activities:
Capital expenditures, net of nominal disposals		(6,813	)		(3,100	)

Cash used by investing activities		(6,813	)		(3,100	)

Financing activities:
Proceeds (payments) of long-term debt, net		450			(47	)
Share repurchase program		(15,607	)		—
Dividends paid		(2,067	)		(1,405	)
Proceeds from issuance of common stock and other, net		970			323

Cash used by financing activities		(16,254	)		(1,129	)
Exchange rate impact on cash		(5,007	)		1,735

Increase (decrease) in cash		847			(5,004	)
Cash and cash equivalents at beginning of period		230,606			149,213

Cash and cash equivalents at end of period	$	231,453		$	144,209

ROBBINS & MYERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EBIT AND EBITDA

(Unaudited)


	Three Months Ended
( $ in thousands)	November 30, 2011			November 30, 2010

Consolidated

Net income from continuing operations	$	35,455		$	15,025
Income tax expense		17,187			9,104
Interest (income), net		(61	)		(25	)

EBIT (operating profit)		52,581			24,104

EBIT margin		22.2	%		17.1	%

Depreciation and amortization		7,892			3,232

EBITDA	$	60,473		$	27,336

EBITDA margin		25.5	%		19.4	%

EBIT (operating profit), EBIT margin %, EBITDA and EBITDA margin % are non-GAAP financial measures. The Company uses these measures to evaluate its businesses, and allocates resources to its businesses 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. Neither EBIT nor EBITDA are measures of cash available for use by management.

Robbins & Myers, Inc.

Historical Segment Results Reflecting Realigned Operating Structure


(In thousands)
	Fiscal 2009															Fiscal 2010															Fiscal 2011
	Q1			Q2			Q3			Q4			Total			Q1			Q2			Q3			Q4			Total			Q1			Q2			Q3			Q4			Total
Sales:
Energy Services	$	62,901		$	56,795		$	43,822		$	39,729		$	203,247		$	41,522		$	44,428		$	53,903		$	61,739		$	201,592		$	61,827		$	104,433		$	144,236		$	166,702		$	477,198
Process and Flow Control		91,653			78,579			75,093			78,773			324,098			70,199			62,409			65,808			78,185			276,601			78,943			79,381			92,822			92,296			343,442

	$	154,554		$	135,374		$	118,915		$	118,502		$	527,345		$	111,721		$	106,837		$	119,711		$	139,924		$	478,193		$	140,770		$	183,814		$	237,058		$	258,998		$	820,640

Depreciation and Amortization:
Energy Services	$	1,114		$	1,164		$	1,192		$	1,119		$	4,589		$	1,138		$	1,152		$	1,148		$	1,108		$	4,546		$	1,126		$	8,033		$	8,108		$	6,293		$	23,560
Process and Flow Control		2,367			2,259			2,205			2,336			9,167			2,392			2,236			2,109			1,754			8,491			2,034			2,129			2,044			2,185			8,392
Corporate and Eliminations		130			132			98			97			457			86			71			74			73			304			72			74			97			93			336

	$	3,611		$	3,555		$	3,495		$	3,552		$	14,213		$	3,616		$	3,459		$	3,331		$	2,935		$	13,341		$	3,232		$	10,236		$	10,249		$	8,571		$	32,288

EBIT:
Energy Services	$	20,967		$	19,309		$	12,933		$	7,407		$	60,616		$	12,822		$	11,489		$	17,429		$	19,962		$	61,702		$	22,746		$	21,728		$	35,276		$	51,218		$	130,968
Process and Flow Control		10,542			4,911			6,466			6,022			27,941			2,261			(394	)		780			2,243			4,890			6,538			5,574			9,158			5,542			26,812
Corporate and Eliminations		(3,672	)		(3,827	)		(6,540	)		(2,442	)		(16,481	)		(4,589	)		(4,889	)		(6,488	)		(3,708	)		(19,674	)		(5,180	)		(11,152	)		(5,752	)		(4,353	)		(26,437	)

	$	27,837		$	20,393		$	12,859		$	10,987		$	72,076		$	10,494		$	6,206		$	11,721		$	18,497		$	46,918		$	24,104		$	16,150		$	38,682		$	52,407		$	131,343

Special Items (Income) Expense:
Energy Services-cost of sales													$	—														$	—		$	—		$	4,103		$	5,396		$	—		$	9,499
Energy Services—other expense																																			7,428			2,828						10,256
Process and Flow Control—other expense														—												2,764			2,764			—			—			—			1,012			1,012
Corporate and Eliminations—other expense														—															—			—			5,884			—			—			5,884

	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	2,764		$	2,764		$	—		$	17,415		$	8,224		$	1,012		$	26,651

Adjusted EBIT:
Energy Services	$	20,967		$	19,309		$	12,933		$	7,407		$	60,616		$	12,822		$	11,489		$	17,429		$	19,962		$	61,702		$	22,746		$	33,259		$	43,500		$	51,218		$	150,723
Process and Flow Control		10,542			4,911			6,466			6,022			27,941			2,261			(394	)		780			5,007			7,654			6,538			5,574			9,158			6,554			27,824
Corporate and Eliminations		(3,672	)		(3,827	)		(6,540	)		(2,442	)		(16,481	)		(4,589	)		(4,889	)		(6,488	)		(3,708	)		(19,674	)		(5,180	)		(5,268	)		(5,752	)		(4,353	)		(20,553	)

	$	27,837		$	20,393		$	12,859		$	10,987		$	72,076		$	10,494		$	6,206		$	11,721		$	21,261		$	49,682		$	24,104		$	33,565		$	46,906		$	53,419		$	157,994

Orders:
Energy Services	$	71,546		$	41,697		$	29,656		$	33,850		$	176,749		$	42,219		$	53,695		$	58,791		$	63,702		$	218,407		$	72,316		$	111,549		$	168,150		$	165,740		$	517,755
Process and Flow Control		86,562			65,480			62,095			60,424			274,561			67,802			70,965			73,516			91,258			303,541			83,955			83,766			94,516			96,258			358,495

	$	158,108		$	107,177		$	91,751		$	94,274		$	451,310		$	110,021		$	124,660		$	132,307		$	154,960		$	521,948		$	156,271		$	195,315		$	262,666		$	261,998		$	876,250

Backlog:
Energy Services	$	44,399		$	30,155		$	16,821		$	11,384					$	12,213		$	20,393		$	25,197		$	27,063					$	36,720		$	98,093		$	122,196		$	121,254
Process and Flow Control		131,524			114,714			103,642			83,454						83,244			89,557			95,126			109,735						116,849			122,878			125,722			129,810

	$	175,923		$	144,869		$	120,463		$	94,838					$	95,457		$	109,950		$	120,323		$	136,798					$	153,569		$	220,971		$	247,918		$	251,064

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