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8-K - FORM 8-K - ROBBINS & MYERS, INC.l42966e8vk.htm
Exhibit 99.1
Investor Relations
+1 (937) 458-6600
ROBBINS & MYERS ANNOUNCES THIRD QUARTER 2011 RESULTS
Record orders and sales levels; energy markets remain strong;
T-3 performance exceeds expectations
DAYTON, OHIO, June 22, 2011...Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $1.54 in its fiscal third quarter ended May 31, 2011, including a $1.16 net gain from the sale of its Romaco business in April. DEPS from continuing operations were $0.41 compared with $0.20 in the prior year third quarter. Adjusting for charges relating to the January 10, 2011 acquisition of T-3 Energy Services, Inc., the Company earned $0.53 per share from continuing operations in the third quarter of 2011. Current quarter adjusted DEPS included a charge of $0.15 per share to reduce the value of certain tax assets in the Company’s Process Solutions business.
Consolidated sales were at an all-time high of $237 million in the third quarter of 2011. Excluding T-3, sales were $170 million, representing 42% growth over the prior year quarter. Both of Robbins & Myers’ business platforms achieved strong growth. Consolidated third quarter 2011 orders were a record $263 million, or $171 million excluding T-3, 29% higher than the comparable prior year period. Backlog at the end of the recent quarter stood at $248 million. These results exclude Romaco, which is included in income from discontinued operations.
“Performance across our energy product lines exceeded expectations this quarter due to very strong demand from our oil & gas customers,” said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. “T-3 booked a record level of orders in the quarter, benefitting from higher drill rig deployments and later-cycle new rig builds. The business has outperformed our expectations since we acquired it in January, and the integration remains on track.”
Third quarter 2011 earnings before interest and taxes (EBIT) were $39 million or a record $47 million excluding one-time charges relating to the acquisition of T-3, significantly higher than the $12 million reported in the third quarter of 2010. Adjusted EBIT margins were 19.8%, double the margins in the prior year third quarter. The Company reported adjusted EBITDA of $54 million in the third quarter of 2011, compared with $15 million in the third quarter of fiscal 2010.
Robbins & Myers generated $39 million of cash from operating activities in the third quarter of fiscal 2011 compared with $28 million in the prior year same quarter. Working capital efficiency improved across the enterprise, and the Company ended the recent quarter with $172 million of cash and $1 million of debt.
“Recent record-setting performance reflects in part a more profitable portfolio of businesses following the recent acquisition of T-3 and divestiture of Romaco,” said Mr. Wallace. “The Company supplies products and services that improve customer productivity in critical applications. We are improving product management, engineering

 


 

and customer-facing capabilities to support our organic growth strategy, and our acquisition program focuses on new platforms for growth and businesses that complement existing product lines. We have ample financial capacity to support our growth programs.”
Updated Guidance
Based on current strength in energy markets and the Company’s backlog levels, Robbins & Myers increased its fiscal 2011 adjusted DEPS forecast from $1.95-$2.15 to $2.23-$2.33 and expects to earn $0.65-$0.75 in its fourth quarter of 2011. The Company’s forecasts exclude restructuring costs, one-time costs associated with the T-3 acquisition, gains resulting from the sale of the Romaco businesses, and income from discontinued operations.
Discontinued Operations
Discontinued operations represent the net income of the Romaco business for all periods presented prior to its April 29, 2011 divestiture. Discontinued operations in the third quarter and nine months ended May 31, 2011 also include a $53 million gain from the sale of the Romaco business.
Third Quarter Results by Segment
All comparisons are made against the comparable year-ago quarterly period unless otherwise stated.
The Company’s Fluid Management segment reported orders of $204 million, or $111 million excluding T-3, up 32%, due to strength in energy and industrial markets. Sales were $181 million in the third quarter, or $112 million excluding T-3, an increase of 43%. Adjusted EBIT was $51 million or 28.3% of sales, an increase of 310 basis points. Ending backlog of $155 million, which includes $90 million from T-3, compared with $52 million at the end of the prior year third quarter.
The Process Solutions segment reported orders of $59 million, an increase of 24% due to improving demand for capital goods in certain regional chemical markets. Sales of $57 million were 42% higher, and the business reported $1.5 million of EBIT in the third quarter of 2011 compared with a $1.9 million loss. Backlog expanded for the seventh consecutive quarter, ending the quarter at $93 million. European restructuring activities are expected to be expanded in the fourth quarter of 2011 to improve the business’ long-term cost structure.
Conference Call to Be Held Today, June 22 at 10:00 AM (Eastern)
A conference call to discuss third quarter 2011 financial results is scheduled for 10:00 AM Eastern on Wednesday, June 22, 2011. The call can be accessed at www.robn.com or by dialing 866-356-3093 (US/Canada) or +1-617-597-5381, using conference ID #53772485. Replays of the call can be accessed by dialing 888-286-8010 (US/Canada) or +1-617-801-6888, both using replay ID #50085776.

 


 

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, adjusted EBIT, adjusted EBITDA and adjusted DEPS, all 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 to net income is included in our Condensed Consolidated Income Statement, and other reconciliations are included in this press release. EBIT, adjusted EBIT, adjusted EBITDA and adjusted DEPS are not a measure 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: costs and difficulties related to the integration of T-3; the inability to or delay in obtaining cost savings and synergies from the T-3 merger; inability to retain key personnel; 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 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; the possibility of product liability lawsuits that could harm our businesses; 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; decline in the market value of our pension plan investment portfolios; and other important risk factors discussed more fully in the Company’s reports on Form 10-K/A for the year ended August 31, 2010; 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, 2011     August 31, 2010  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 172,066     $ 149,213  
Accounts receivable
    157,093       93,466  
Inventories
    157,860       84,716  
Other current assets
    13,110       5,983  
Deferred taxes
    16,993       13,683  
Assets of discontinued operations
          79,247  
 
           
Total Current Assets
    517,122       426,308  
 
               
Goodwill & Other Intangible Assets
    801,946       253,515  
Deferred Taxes
    24,224       31,002  
Other Assets
    12,799       9,715  
Property, Plant & Equipment
    156,715       96,481  
 
           
 
  $ 1,512,806     $ 817,021  
 
           
LIABILITIES AND EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 77,296     $ 45,888  
Accrued expenses
    85,957       71,905  
Current portion of long-term debt
    1,173       133  
Liabilities of discontinued operations
          46,815  
 
           
Total Current Liabilities
    164,426       164,741  
 
               
Long-Term Debt — Less Current Portion
    24       93  
Deferred Taxes
    105,253       40,615  
Other Long-Term Liabilities
    119,623       120,548  
Total Equity
    1,123,480       491,024  
 
           
 
  $ 1,512,806     $ 817,021  
 
           

 


 

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)   2011     2010     2011     2010  
Sales
  $ 237,058     $ 119,711     $ 561,642     $ 338,269  
Cost of sales
    150,984       78,717       356,887       227,666  
 
                       
Gross profit
    86,074       40,994       204,755       110,603  
Selling, general and administrative expenses
    44,564       29,273       109,679       82,182  
Other expense
    2,828             16,140        
 
                       
Income before interest and income taxes (EBIT)
    38,682       11,721       78,936       28,421  
Interest expense, net
    56       102       39       406  
 
                       
Income from continuing operations before income taxes
    38,626       11,619       78,897       28,015  
Income tax expense
    19,431       4,729       33,150       10,729  
 
                       
Net income from continuing operations
    19,195       6,890       45,747       17,286  
Income from discontinued operations, net of tax
    52,035       1,436       53,637       1,719  
 
                       
Net income including noncontrolling interest
    71,230       8,326       99,384       19,005  
Less: Net income attributable to noncontrolling interest
    275       164       796       620  
 
                       
Net income attributable to Robbins & Myers, Inc.
  $ 70,955     $ 8,162     $ 98,588     $ 18,385  
 
                       
 
                               
Net income per share from continuing operations:
                               
Basic
  $ 0.41     $ 0.20     $ 1.14     $ 0.51  
Diluted
  $ 0.41     $ 0.20     $ 1.13     $ 0.51  
 
                               
Net income per share:
                               
Basic
  $ 1.56     $ 0.25     $ 2.50     $ 0.56  
Diluted
  $ 1.54     $ 0.25     $ 2.48     $ 0.56  
 
                               
Weighted average common shares outstanding:
                               
Basic
    45,616       32,941       39,449       32,913  
Diluted
    45,965       33,016       39,812       32,973  

 


 

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)   2011     2010     2011     2010  
Customer Sales
                               
Fluid Management
  $ 180,506     $ 79,813     $ 406,628     $ 214,971  
Process Solutions
    56,552       39,898       155,014       123,298  
 
                       
Total
  $ 237,058     $ 119,711     $ 561,642     $ 338,269  
 
                       
Income Before Interest and Income Taxes (EBIT) (4)
                               
Fluid Management
  $ 42,909 (1)   $ 20,104     $ 97,870 (2)   $ 50,471  
Process Solutions
    1,525       (1,895 )     3,150       (6,084 )
Corporate and Eliminations
    (5,752 )     (6,488 )     (22,084) (3)     (15,966 )
 
                       
Total
  $ 38,682     $ 11,721     $ 78,936     $ 28,421  
 
                       
Depreciation and Amortization
                               
Fluid Management
  $ 8,883     $ 1,995     $ 19,733     $ 6,011  
Process Solutions
    1,269       1,262       3,741       4,164  
Corporate and Eliminations
    97       74       243       231  
 
                       
Total
  $ 10,249     $ 3,331     $ 23,717     $ 10,406  
 
                       
Orders
                               
Fluid Management
  $ 204,000     $ 84,987     $ 449,651     $ 232,954  
Process Solutions
    58,666       47,320       164,601       134,034  
 
                       
Total
  $ 262,666     $ 132,307     $ 614,252     $ 366,988  
 
                       
Backlog
                               
Fluid Management
  $ 155,084     $ 52,000     $ 155,084     $ 52,000  
Process Solutions
    92,834       68,323       92,834       68,323  
 
                       
Total
  $ 247,918     $ 120,323     $ 247,918     $ 120,323  
 
                       
 
(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 $10.2 million associated with employee termination benefits, 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)   2011     2010     2011     2010  
Operating activities:
                               
Net income including noncontrolling interest
  $ 71,230     $ 8,326     $ 99,384     $ 19,005  
Depreciation and amortization
    10,655       3,906       25,390       12,131  
Gain on sale of businesses
    (53,357 )           (53,357 )      
Gain on asset sales
                      (547 )
Working capital
    2,421       12,803       (53,442 )     21,539  
Other changes, net
    7,591       2,576       7,733       4,986  
 
                       
Cash provided by operating activities
    38,540       27,611       25,708       57,114  
 
                               
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
    (7,026 )     (3,259 )     (14,223 )     (6,706 )
Proceeds from asset sales
                      1,094  
 
                       
Cash provided (used) by investing activities
    82,221       (3,259 )     (15,386 )     (5,612 )
 
                               
Financing activities:
                               
Payments of long-term debt, net
    (728 )     (30,227 )     (3,097 )     (29,657 )
Dividends paid
    (2,053 )     (1,402 )     (5,493 )     (4,115 )
Proceeds from issuance of common stock and other, net
    7,319       273       22,905       639  
 
                       
Cash provided (used) by financing activities
    4,538       (31,356 )     14,315       (33,133 )
Exchange rate impact on cash
    (4,014 )     (2,719 )     (1,784 )     (3,841 )
 
                       
Increase (decrease) in cash
    121,285       (9,723 )     22,853       14,528  
Cash and cash equivalents at beginning of period
    50,781       132,420       149,213       108,169  
 
                       
Cash and cash equivalents at end of period
  $ 172,066     $ 122,697     $ 172,066     $ 122,697  
 
                       

 


 

ROBBINS & MYERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO EBIT, ADJUSTED EBIT, ADJUSTED EBIT MARGIN % AND ADJUSTED EBITDA
RECONCILIATION OF DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO ADJUSTED DILUTED
     EARNINGS PER SHARE FROM CONTINUING OPERATIONS
     (Unaudited)
                 
    Three Months Ended  
    May 31,     May 31,  
(in thousands, except per share data)   2011     2010  
CONSOLIDATED:
               
Net income attributable to Robbins & Myers, Inc.
  $ 70,955     $ 8,162  
Net income of discontinued operations
    (52,035 )     (1,436 )
Net income attributable to noncontrolling interest
    275       164  
Income tax expense
    19,431       4,729  
Interest expense, net
    56       102  
 
           
EBIT (operating profit)
    38,682       11,721  
 
               
Special items:
               
Fluid Management Segment:
               
Backlog amortization
    2,828        
Inventory write-up expensed in cost of sales
    5,396        
 
           
 
    8,224        
 
               
Adjusted EBIT
    46,906       11,721  
Adjusted EBIT margin
    19.8 %     9.8 %
 
               
Depreciation and amortization, excluding backlog amortization
    7,421       3,331  
 
           
 
               
Adjusted EBITDA
  $ 54,327     $ 15,052  
 
           
 
               
Diluted EPS from continuing operations
  $ 0.41          
Per share effect of special items above
    0.12          
 
           
Adjusted Diluted EPS from continuing operations
  $ 0.53          
 
             
 
               
FLUID MANAGEMENT SEGMENT:
               
EBIT
  $ 42,909          
Backlog amortization
    2,828          
Inventory write-up expensed in cost of sales
    5,396          
 
             
Adjusted EBIT
  $ 51,133          
 
             
Adjusted EBIT margin
    28.3 %        
EBIT (operating profit), 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. Neither EBIT nor EBITDA are measures of cash available for use by management. Adjusted diluted EPS from continuing operations should not be considered as an alternative to reported net income as an indicator of performance.