Robbins & Myers Announces First Quarter 2009 Results
The Company reported first quarter 2009 earnings before interest, taxesand minority interest (EBIT) of $26 million, 14% higher than the prior yearfirst quarter results, and EBIT margins expanded 140 basis points to 14.8%.Robbins & Myers also reported $30 million of EBITDA in the first quarter of2009 and $141 million of adjusted EBITDA for the trailing twelve months. Cashflow from operations reflected a $6 million increase over the prior year firstquarter, including improvements in net working capital. Capital expenditureswere reduced 31% on a comparative basis.
In October 2008, the Company's Board of Directors authorized therepurchase of up to three million of its currently outstanding common shares.The Company announced it repurchased, as treasury shares, approximately twomillion of its common shares during the quarter for total cash considerationof $39 million. The current authorization allows for the repurchase ofapproximately one million additional common shares. Share repurchasescontributed less than $0.01 to first quarter 2009 DEPS.
"I am pleased to report favorable first quarter results, led by sales ofproducts targeting energy and chemical markets," said Peter C. Wallace,President and Chief Executive Officer of Robbins & Myers, Inc. "Our resultsalso demonstrate the benefits resulting from changes made over the past fewyears to improve our customer value proposition, operating effectiveness andfinancial position. Many opportunities remain for continuous improvementacross our global business."
"Despite strong first quarter results, most of our product linesexperienced order declines late in the quarter, thus providing a cautionarytone as we enter our second quarter. We responded to this initial change inbusiness conditions by reducing discretionary spending, deferring certaincapital expenditures and developing plans to further adjust our coststructure. At the same time, we continue to pursue our key 2009 objectives toimplement lean, develop our people, invest in our selling efforts, develop newproducts and applications, and pursue modest acquisitions."
"Robbins & Myers remains financially secure with $74 million of cash, anundrawn senior credit facility, and $33 million of debt. We have revised ourexpectations for the full year to reflect recent changes in order levels,unfavorable global economic conditions and currency translation headwinds,mitigated somewhat by announced share repurchases and efforts to reducecosts."
The Company announced fiscal 2009 DEPS expectations of $1.80-$2.00, whichincludes approximately $0.11 of benefit from recent share repurchases. TheCompany also expects fiscal second quarter 2009 DEPS of $0.40-$0.50, ascompared with actual results of $0.47 in the second quarter of fiscal 2008,which included $0.04 of benefits from a facility sale and tax benefits.
First Quarter Results by Segment
All comparisons are made against the comparable year-ago quarterly periodunless otherwise stated.
The Fluid Management segment reported first quarter 2009 sales of $82million, an increase of 14%, and orders of $84 million, a 2% increase.Excluding currency exchange rate effects, organic sales increased 18% andorganic orders improved 8% due to favorable demand for products serving energymarkets, offset somewhat by weakness in municipal and industrial end markets.EBIT grew 34% to $25 million, and EBIT margins expanded 450 basis points to30.0%.
The Process Solutions segment reported sales of $72 million in the firstquarter, an increase of 2%, and orders of $74 million, a 5% decrease.Excluding the effects of currency exchange rates and an acquisition, organicsales increased 4% and organic orders increased 6%. Several orders for largechemical market projects were secured during the quarter. The segment earned$7 million of EBIT in the first quarter of 2009, and EBIT margins decreased170 basis points to 9.5% due to an unfavorable product mix, higher projectcosts and increased operating expenses.
The Romaco segment reported first quarter sales of $23 million, a 23%decrease, and orders of $27 million, down 21%. Excluding the impact fromcurrency exchange rates, organic sales decreased 17% and orders declined 8% onweakness in pharmaceutical markets and order delays. Romaco reported an EBITloss of $1.4 million during the first quarter of 2009, including $0.5 millionof restructuring costs, as compared with EBIT of $1.5 million in the prioryear.
Conference Call to Be Held Tomorrow, January 8 at 10:00 AM (EST)
A conference call to discuss these results has been scheduled for 10:00 AMET Thursday, January 8, 2009, which can be accessed at http://www.robn.com orby dialing 800-599-9795 (US/Canada) or +1-617-786-2905, using conference ID#14345248. Replays of the call can be accessed by dialing 888-286-8010(U.S./Canada) or +1-617-801-6888, both using replay ID # 25121411.
About Robbins & Myers
Robbins & Myers, Inc. is a leading supplier of engineered equipment andsystems for critical applications in global energy, industrial, chemical andpharmaceutical markets.
In this release the Company refers to various non-GAAP measures,including EBIT, EBITDA (earnings before interest, taxes, depreciation andamortization) and adjusted EBITDA. The Company uses these measures toevaluate its performance and believes these measures are helpful to investorsin assessing its performance. Reconciliations of these measures to comparableGAAP measures are provided further below in this release.
In addition to historical information, this press release containsforward-looking statements identified by use of words such as "expects,""anticipates," "believes," and similar expressions. These statements reflectmanagement's current expectations and involve known and unknown risks,uncertainties, contingencies and other factors that could cause actualresults, performance or achievements to differ materially from those stated.The most significant of these risks and uncertainties are described in ourForm 10-K and Form 10-Q reports filed with the Securities and ExchangeCommission and include, but are not limited to: the cyclical nature of some ofour markets; a significant decline in capital expenditures in our primarymarkets; a major decline in oil and natural gas prices; reduced demand due tothe general worldwide economic downturn and general credit market crises;increases in competition; changes in the availability and cost of our rawmaterials; foreign exchange rate fluctuations; work stoppages related to unionnegotiations; customer order cancellations; business disruptions caused by theimplementation of business computer systems; the possibility of productliability lawsuits that could harm our business; events or circumstances whichresult in an impairment of assets; the potential impact of U.S. and foreignlegislation, government regulations, and other governmental action, includingthose relating to export and import of products and materials, and changes inthe interpretation and application of such laws and regulations; the outcomeof audit, compliance, administrative or investigatory reviews; and decline inthe market value of our pension plans' investment portfolios affecting ourfinancial condition and results of operations. Except as otherwise required bylaw, we do not undertake any obligation to publicly update or revise theseforward-looking statements to reflect events or circumstances after the datehereof.ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands) November 30, 2008 August 31, 2008 ASSETS Current Assets: Cash and cash equivalents $74,337 $123,405 Accounts receivable 132,857 153,648 Inventories 115,648 109,797 Other current assets 5,559 8,017 Deferred taxes 9,961 13,476 Total Current Assets 338,362 408,343 Goodwill & Other Intangible Assets 260,384 285,759 Deferred Taxes 21,398 21,969 Other Assets 10,603 10,931 Property, Plant & Equipment 127,444 137,715 $758,191 $864,717 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $66,403 $86,012 Accrued expenses 87,951 102,876 Current portion of long-term debt 2,269 3,192 Total Current Liabilities 156,623 192,080 Long-Term Debt - Less Current Portion 30,376 30,435 Deferred Taxes 42,883 44,628 Other Long-Term Liabilities 92,488 97,557 Shareholders' Equity 435,821 500,017 $758,191 $864,717 ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) Three Months Ended November 30, November 30, (in thousands, except per share data) 2008 2007 Sales $177,971 $173,536 Cost of sales 109,995 110,674 Gross profit 67,976 62,862 SG&A expenses 41,582 39,641 Income before interest and income taxes 26,394 23,221 Interest expense, net 53 727 Income before income taxes and minority interest 26,341 22,494 Income tax expense 8,957 7,955 Minority interest 176 601 Net income $17,208 $13,938 Net Income Per Share: Basic $0.50 $0.41 Diluted $0.50 $0.40 Weighted Average Common Shares Outstanding: Basic 34,429 34,370 Diluted 34,465 34,642 ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED BUSINESS SEGMENT INFORMATION (Unaudited) Three Months Ended November 30, November 30, (in thousands) 2008 2007 Sales Fluid Management $82,270 $72,355 Process Solutions 72,284 70,849 Romaco 23,417 30,332 Total $177,971 $173,536 Income Before Interest and Income Taxes (EBIT) Fluid Management $24,640 $18,448 Process Solutions 6,869 7,956 Romaco (1,443) 1,545 Corporate and Eliminations (3,672) (4,728) Total $26,394 $23,221 Depreciation and Amortization Fluid Management $1,796 $1,653 Process Solutions 1,685 1,669 Romaco 482 452 Corporate and Eliminations 130 222 Total $4,093 $3,996 Orders Fluid Management $84,427 $82,792 Process Solutions 73,681 77,416 Romaco 26,725 33,713 Total $184,833 $193,921 Backlog Fluid Management $61,665 $53,394 Process Solutions 114,258 105,481 Romaco 47,676 55,332 Total $223,599 $214,207 ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Three Months Ended November 30, November 30, (in thousands) 2008 2007 Operating activities: Net income $17,208 $13,938 Depreciation and amortization 4,093 3,996 Other, net (21,599) (24,296) Cash used by operating activities (298) (6,362) Investing activities: Capital expenditures, net of nominal disposals (3,377) (4,925) Cash used by investing activities (3,377) (4,925) Financing activities: Payments of long-term debt, net (982) (761) Share repurchases (39,114) - Other, net (731) 1,894 Cash (used) provided by financing activities (40,827) 1,133 Exchange rate impact on cash (4,566) 2,055 Decrease in cash (49,068) (8,099) Cash at beginning of period 123,405 116,110 Cash at end of period $74,337 $108,011 ROBBINS & MYERS, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO THE NON-GAAP MEASURES OF EBIT, EBITDA, ADJUSTED EBIT AND ADJUSTED EBITDA (Unaudited) Trailing Twelve Three Months Ended Months Ended November 30, November 30, (dollar amounts in thousands) 2008 2008 Net income $17,208 $90,672 Interest expense, net 53 1,357 Income taxes 8,957 40,101 Minority interest 176 1,707 EBIT 26,394 133,837 Minority interest (176) (1,707) Depreciation & amortization 4,093 16,346 EBITDA 30,311 148,476 Special items: Property sale gain - (1,934) Business disposition gain - (5,697) Total Special Items - (7,631) Adjusted EBIT $26,394 $126,206 Adjusted EBITDA $30,311 $140,845 Note: EBIT, EBITDA, adjusted EBIT, and adjusted EBITDA are non-GAAP measures. We use these measures to evaluate our businesses, and we allocate resources to our businesses based on EBIT. EBIT, EBITDA, adjusted EBIT, and adjusted EBITDA are not measures 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 operating results. None of these are measures of cash available for use by management.
SOURCE Robbins & Myers, Inc.
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