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8-K - 8-K - ROBBINS & MYERS, INC.d372885d8k.htm

Exhibit 99.1

Investor Relations

+1 (937) 458-6600

ROBBINS & MYERS ANNOUNCES THIRD QUARTER 2012 RESULTS AND

DIVIDEND

Strong Cash Flow, Share Repurchase Announced, $147 million of Cash on Hand

HOUSTON, TEXAS, June 26, 2012…Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share from continuing operations (DEPS) of $1.02 for its fiscal third quarter ended May 31, 2012. These results included favorable benefits of $0.07 from tax accrual adjustments, along with benefits from a legal settlement that accounted for $0.03 of the earnings. This compares with $0.41 from continuing operations in the prior year third quarter, or $0.53 after adjusting for one-time charges relating to the acquisition of T-3 Energy Services, Inc. (T-3). The prior year results also include a tax charge of $0.15. Excluding the impact of these items DEPS was $0.92 compared with $0.68 in the prior year period, an increase of 35%.

Consolidated sales were $266 million in the third quarter of 2012 as compared with $237 million in the third quarter of 2011. Excluding the impact of currency translation sales grew $34 million, or 14%, over the prior year period. The Company reported third quarter 2012 orders of $286 million, an increase of 10% over the prior year period excluding the impact of currency translation. Third quarter ending backlog increased to $315 million, up from $301 million at the end of the second quarter and $248 million at the end of the third quarter of the prior year. Each of Robbins & Myers’ business platforms achieved solid growth.

Third quarter 2012 earnings before interest and taxes (EBIT) were $62 million, including a $2 million favorable legal settlement, and significantly higher than the adjusted EBIT of $47 million reported in the third quarter of 2011. EBIT margin of 23.2% in the third quarter of 2012 was substantially higher than the 19.8% adjusted EBIT margin in the prior year period, as a result of improved profitability in each business platform and 70 basis points from the legal settlement. The Company reported EBITDA of $69 million in the third quarter of 2012, compared with adjusted EBITDA of $54 million in the third quarter of fiscal 2011. Each business segment showed improved profitability as a result of additional volume, and the Process & Flow Control group benefitted from price and cost improvements.

“We are pleased with performance in both of our business segments,” said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. “The Energy Services segment had outstanding operating performance and built backlog despite rig count growth stalling along with declining crude oil prices. This pause in U.S. rig count growth has been offset somewhat by rig intensity as the footage drilled in the U.S. continues to increase. However, our short-term outlook is more cautious due to overall concerns around global economic growth and the impact this has had on crude oil prices. In the Process & Flow Control segment we continue to see stronger demand in the chemical and industrial markets, as evidenced by orders this quarter. We have steadily improved operating performance in this segment by leveraging incremental


sales volume and recovering margin with a sharper focus on regional pricing opportunities and cost controls.”

Robbins & Myers generated $61 million of cash from operating activities in the third quarter of fiscal 2012 compared with $39 million in the prior year same quarter. The increase was primarily attributable to higher net income from continuing operations in 2012.

Updated Guidance

Based on recent financial performance, Robbins & Myers narrowed its fiscal 2012 DEPS forecast from $3.40-$3.60 to $3.45-$3.55. For the fourth quarter the Company expects to earn $0.90-$1.00, which excludes approximately $0.08 of higher than normal tax cost related to structural tax changes that are expected to benefit future years. Overall, the effective tax rate for all of 2012 is expected to be at a normalized rate slightly below the U.S. statutory rate of 35%.

Third Quarter Results by Segment

All comparisons are made against the comparable year-ago quarterly period unless otherwise stated.

The Company’s Energy Services segment reported orders of $176 million, an increase of $9 million over the prior year period excluding the impact of currency. Sales were $175 million in the third quarter and $32 million over the prior year period, an increase of 22% excluding currency impacts, EBIT was $55 million or 31.7% of sales, which included the favorable legal settlement of $2 million, compared with adjusted EBIT of $44 million or 30.2% of sales in the prior year period. Ending backlog was $172 million, slightly higher than at the end of the second quarter.

The Process & Flow Control segment reported orders increased $19 million over the prior year period to $110 million in this quarter, or 20% excluding currency impacts. The increase was primarily due to improving demand for capital goods in the chemical markets. Sales of $91 million were $2 million, or 2%, higher than the prior year excluding currency impacts. The segment reported $10 million of EBIT in the third quarter of 2012, 10.9% of sales, as compared with $9 million or 9.9% of sales in the prior year period. Backlog rose to $143 million from $129 million at the end of the second quarter.

Share Repurchase Completed/New Program Authorized

During the third quarter of 2012 Robbins & Myers repurchased 1.4 million of the authorized 4.0 million shares at an average price of $47.45 per share. Subsequent to the end of the quarter the Company repurchased an additional 0.5 million shares at an average price of $45.23, substantially completed the program. In total, 4.0 million shares were repurchased at an average price of $47.07 per share.

The Company also announced that its Board of Directors authorized a new program for the Company to repurchase up to an additional two million shares. Repurchases 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. The program will expire when we have repurchased all the authorized shares, unless terminated earlier by a Board resolution

Conference Call to Be Held Today, June 26 at 1:00 PM (Central)

A conference call to discuss the third quarter 2012 financial results is scheduled for 1:00 PM Central (2:00 PM Eastern) on Tuesday, June 26, 2012. The call can be accessed at www.robn.com or by dialing 800-591-6945 (US/Canada) or +1-617-614-4911, using conference ID #40739719. Replays of the call can be accessed by dialing 888-286-8010 (US/Canada) or +1-617-801-6888, both using replay ID #84602291.

Dividend Declared

Robbins & Myers also announced today that its Board of Directors approved its regular quarterly cash dividend payment of $0.05 per share. The dividend is payable on August 10, 2012 to shareholders of record as of July 11, 2012.

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, EBITDA, adjusted EBIT, adjusted EBITDA and adjusted DEPS 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 these amounts 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 the 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 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)

   May 31, 2012      August 31, 2011  

ASSETS

     

Current Assets:

     

Cash and cash equivalents

   $ 146,677       $ 230,606   

Accounts receivable

     177,234         166,511   

Inventories

     164,329         151,463   

Other current assets

     11,198         11,247   

Deferred taxes

     18,678         18,674   
  

 

 

    

 

 

 

Total Current Assets

     518,116         578,501   

Goodwill & Other Intangible Assets

     774,370         798,719   

Deferred Taxes

     24,418         26,344   

Other Assets

     13,208         13,776   

Property, Plant & Equipment

     166,717         165,626   
  

 

 

    

 

 

 
   $ 1,496,829       $ 1,582,966   
  

 

 

    

 

 

 

LIABILITIES AND EQUITY

     

Current Liabilities:

     

Accounts payable

   $ 94,013       $ 84,761   

Accrued expenses

     94,121         91,253   

Current portion of long-term debt

     201         421   
  

 

 

    

 

 

 

Total Current Liabilities

     188,335         176,435   

Long-Term Debt - Less Current Portion

     —           24   

Deferred Taxes

     131,174         131,697   

Other Long-Term Liabilities

     81,975         108,391   

Total Equity

     1,095,345         1,166,419   
  

 

 

    

 

 

 
     $1,496,829       $ 1,582,966   
  

 

 

    

 

 

 


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)

   2012      2011      2012     2011  

Sales

   $ 266,337       $ 237,058       $ 759,586      $ 561,642   

Cost of sales

     162,865         150,984         458,634        356,887   
  

 

 

    

 

 

    

 

 

   

 

 

 

Gross profit

     103,472         86,074         300,952        204,755   

Selling, general and administrative expenses

     41,622         44,564         129,362        109,679   

Other expense

     —           2,828         —          16,140   
  

 

 

    

 

 

    

 

 

   

 

 

 

Income before interest and income taxes (EBIT)

     61,850         38,682         171,590        78,936   

Interest expense (income), net

     36         56         (14     39   
  

 

 

    

 

 

    

 

 

   

 

 

 

Income from continuing operations before income taxes

     61,814         38,626         171,604        78,897   

Income tax expense

     17,407         19,431         53,253        33,150   
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income from continuing operations

     44,407         19,195         118,351        45,747   

Income from discontinued operations, net of tax

     —           52,035         —          53,637   
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income including noncontrolling interest

     44,407         71,230         118,351        99,384   

Less: Net income attributable to noncontrolling interest

     180         275         751        796   
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income attributable to Robbins & Myers, Inc.

   $ 44,227       $ 70,955       $ 117,600      $ 98,588   
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income per share from continuing operations:

          

Basic

   $ 1.03       $ 0.41       $ 2.64      $ 1.14   

Diluted

   $ 1.02       $ 0.41       $ 2.62      $ 1.13   

Net income per share:

          

Basic

   $ 1.03       $ 1.56       $ 2.64      $ 2.50   

Diluted

   $ 1.02       $ 1.54       $ 2.62      $ 2.48   

Weighted average common shares outstanding:

          

Basic

     43,097         45,616         44,628        39,449   

Diluted

     43,291         45,965         44,837        39,812   


ROBBINS & MYERS, INC. AND SUBSIDIARIES

CONDENSED BUSINESS SEGMENT INFORMATION FOR CONTINUING OPERATIONS

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     May 31,     May 31,     May 31,     May 31,  

(in thousands)

   2012     2011     2012     2011  

Customer Sales

        

Energy Services

   $ 175,006      $ 144,236      $ 489,771      $ 310,496   

Process & Flow Control

     91,331        92,822        269,815        251,146   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 266,337      $ 237,058      $ 759,586      $ 561,642   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Interest and Income Taxes (EBIT) (4)

        

Energy Services

   $ 55,495      $ 35,276  (1)    $ 153,218      $ 79,750  (2) 

Process & Flow Control

     9,995        9,158        29,586        21,270   

Corporate and Eliminations

     (3,640     (5,752     (11,214     (22,084 )(3) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 61,850      $ 38,682      $ 171,590      $ 78,936   
  

 

 

   

 

 

   

 

 

   

 

 

 

Depreciation and Amortization

        

Energy Services

   $ 4,985      $ 8,108      $ 16,621      $ 17,267   

Process & Flow Control

     2,094        2,044        6,184        6,207   

Corporate and Eliminations

     87        97        259        243   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 7,166      $ 10,249      $ 23,064      $ 23,717   
  

 

 

   

 

 

   

 

 

   

 

 

 

Customer Orders

        

Energy Services

   $ 175,934      $ 168,150      $ 541,602      $ 352,015   

Process & Flow Control

     109,885        94,516        292,441        262,237   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 285,819      $ 262,666      $ 834,043      $ 614,252   
  

 

 

   

 

 

   

 

 

   

 

 

 

Backlog

        

Energy Services

   $ 172,283      $ 122,196      $ 172,283      $ 122,196   

Process & Flow Control

     142,730        125,722        142,730        125,722   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 315,013      $ 247,918      $ 315,013      $ 247,918   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

Includes merger related costs of $2.8 million associated with backlog amortization and $5.4 million of expense due to inventory write-up values recorded in cost of sales.

(2) 

Includes merger related costs of $3.0 million associated with employee termination benefits, $7.2 million related to backlog amortization; and $9.5 million of expense due to inventory write-up values recorded in cost of sales.

(3) 

Includes costs of $5.9 million due to merger related professional fees and accelerated equity compensation expense.

(4)

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)

   2012     2011     2012     2011  

Operating activities:

        

Net income including noncontrolling interest

   $ 44,407      $ 71,230      $ 118,351      $ 99,384   

Depreciation and amortization

     7,166        10,655        23,064        25,390   

Gain on sale of businesses

     —          (53,357     —          (53,357

Working capital

     8,725        2,421        (17,763     (53,442

Other changes, net

     802        7,591        (16,172     7,733   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash provided by operating activities

     61,100        38,540        107,480        25,708   

Investing activities:

        

Business acquisition, net of cash acquired

     —          —          —          (90,410

Proceeds from sale of businesses

     —          89,247        —          89,247   

Capital expenditures, net of nominal disposals

     (5,426     (7,026     (20,806     (14,223
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash (used) provided by investing activities

     (5,426     82,221        (20,806     (15,386

Financing activities:

        

Payments of debt, net

     (50     (728     (244     (3,097

Share repurchase program

     (68,298     —          (163,278     —     

Dividends paid

     (2,144     (2,053     (6,471     (5,493

Proceeds from issuance of common stock and other, net

     5,321        7,319        6,445        22,905   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash (used) provided by financing activities

     (65,171     4,538        (163,548     14,315   

Exchange rate impact on cash

     (3,209     (4,014     (7,055     (1,784
  

 

 

   

 

 

   

 

 

   

 

 

 

(Decrease) increase in cash

     (12,706     121,285        (83,929     22,853   

Cash and cash equivalents at beginning of period

     159,383        50,781        230,606        149,213   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 146,677      $ 172,066      $ 146,677      $ 172,066   
  

 

 

   

 

 

   

 

 

   

 

 

 


ROBBINS & MYERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EBIT,
ADJUSTED EBIT AND ADJUSTED EBITDA

RECONCILIATION OF DILUTED EARNINGS PER SHARE (DEPS) FROM CONTINUING OPERATIONS TO ADJUSTED DEPS FROM CONTINUING OPERATIONS

(Unaudited)

 

     Three Months Ended  
     May 31,
2012
    May 31,
2011
 

( $ in thousands, except per share data)

         Per Share           Per Share  

CONSOLIDATED:

        

Net income from cont. operations attributable to R&M / Diluted EPS from cont. operations

   $ 44,227      $ 1.02      $ 18,920      $ 0.41   

Net income attributable to noncontrolling interest

     180          275     

Income tax expense

     17,407          19,431     

Interest expense, net

     36          56     
  

 

 

     

 

 

   

EBIT

     61,850          38,682     

Merger related costs:

        

Backlog amortization

     —            2,828     

Inventory write-up expensed in cost of sales

     —            5,396     
  

 

 

     

 

 

   
     —          —          8,224        0.12   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

     61,850          46,906     

Adjusted EBIT margin

     23.2       19.8  

Depreciation and amortization from cont. operations, excluding backlog amortization

     7,166          7,421     
  

 

 

     

 

 

   

Adjusted EBITDA

   $ 69,016        $ 54,327     
  

 

 

     

 

 

   

Adjusted Diluted EPS from cont. operations for T-3 acquisition

     $ 1.02        $ 0.53   

Legal settlement

       (0.03       —     

Tax accrual adjustments

       (0.07       0.15   
    

 

 

     

 

 

 
       $0.92        $ 0.68   
    

 

 

     

 

 

 

ENERGY SERVICES SEGMENT:

        

EBIT

       $ 35,276     

Backlog amortization

         2,828     

Inventory write-up expensed in cost of sales

         5,396     
      

 

 

   

Adjusted EBIT

       $ 43,500     
      

 

 

   

Adjusted EBIT margin

         30.2  

EBIT, adjusted EBIT, adjusted EBIT margin %, adjusted EBITDA and adjusted diluted EPS from continuing operations 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. EBIT, adjusted EBIT, EBITDA and adjusted EBITDA are not a measure of cash available for use by the Company. Adjusted diluted EPS from continuing operations should not be considered as an alternative to reported net income as an indicator of performance.