Robbins & Myers, Inc. News

Robbins & Myers Reports Record Third Quarter Results

DAYTON, Ohio, June 30 PRNewswire-FirstCall — Robbins & Myers, Inc. (NYSE: RBN) today reported diluted net earnings per share (DEPS) of $0.76 for its fiscal third quarter ended May 31, 2008, including $0.14 resulting from the previously-announced expiration of certain contingency obligations related to the sale of two product lines in March 2006. Excluding this benefit, DEPS increased 59% over the comparable prior year period to $0.62, primarily due to higher sales, operating improvements and a lower tax rate.

Third quarter fiscal 2008 sales increased 17% over the prior year third quarter to $201 million, and orders increased 10% to $205 million. Excluding the impact from acquired and disposed product lines and currency translation, sales increased 9%, with increases in all three business platforms, and orders increased 2%, led by strength in energy markets. The Company ended the quarter with record backlog of $268 million.

The Company reported third quarter 2008 earnings before interest, taxes and minority interest (EBIT) of $40 million. Excluding the $6 million benefit from the March 2006 product line sales, third quarter 2008 adjusted EBIT increased 47% over prior year third quarter results. The adjusted EBIT margin of 17.2% for the fiscal 2008 period represents an increase of 350 basis points over the prior year period, which resulted primarily from higher sales levels and operating improvements.

The Company realized $38 million of adjusted EBITDA in the current year third quarter. Adjusting for special items, including the benefit from the March 2006 product line sales, trailing twelve-month adjusted EBITDA grew to $132 million in the third quarter of 2008, 43% higher than the year-ago comparable figure. Robbins & Myers continued its strong cash flow performance during the quarter, generating $27 million of cash from operating activities.

"Throughout our fiscal year we have benefited from order growth, resulting in record backlog levels as the year progressed," said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. "In our third quarter we were able to convert some of the backlog into sales, helping to fuel the 17% year-on-year increase in sales. The higher sales level, in conjunction with an improved cost structure and marketing focus, has contributed to our record earnings."

Mr. Wallace further commented, "Across the entire organization we have created a more disciplined approach to managing the business, reinforcing our developing culture of continuous improvement. The end result is a company that is delivering record profits, as well as record cash flow as we more effectively manage capital investment and working capital."

The Company announced that it is increasing its full fiscal year 2008 DEPS guidance from $1.93-$2.03 to $2.26-$2.31, which includes $0.16 of benefits from asset sales during the first nine months of the year. The Company also established fourth quarter fiscal 2008 DEPS guidance of $0.62-$0.67, as compared with actual results of $0.55 in the fourth quarter of 2007, which included a $0.03 gain from a property sale.

Third Quarter Results by Segment

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

The Fluid Management segment reported third quarter sales of $84 million, a 12% increase, and orders of $87 million, a 16% increase. Excluding currency exchange rate effects, sales increased 9% and orders improved 12% on continued strength in energy markets and new product contributions. EBIT grew 23% to $25 million, and EBIT margins expanded 250 basis points to 30.2%.

The Process Solutions segment reported sales of $81 million in the third quarter, a 22% increase, and orders of $84 million, an 8% increase. Excluding the effects of currency exchange rates and an acquisition, sales increased 12% and orders decreased 1% following 22% year-over-year organic order growth in the second quarter. The segment earned $10 million of EBIT in the third quarter, and EBIT margins improved 470 basis points to 12.6%.

The Romaco segment reported sales growth of 20% with sales of $37 million in the third quarter, and orders were up 3% to $34 million. Excluding the impact from currency exchange rates, sales increased 3% and orders declined 15%, following 26% year-over-year organic order growth in the second quarter. Excluding the $6 million benefit from the March 2006 product line sales, Romaco adjusted EBIT margins improved 80 basis points to 6.0% as a result of increased sales.

Conference Call to Be Held Today at 11:00 AM (EDT)

A conference call to discuss these results has been scheduled for 11:00 a.m. EDT Monday, June 30, 2008, which can be accessed at www.robn.com or by dialing 888-286-8010 (US/Canada) or +1-617-801-6888, using conference ID # 63192398. Replays of the call can be accessed by dialing 888-286-8010 (U.S./Canada) or +1-617-801-6888, both using replay ID # 63192398.

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 various non-GAAP measures, including EBIT, Adjusted EBIT, EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA. The Company uses these measures to evaluate its performance and believes these measures are helpful to investors in assessing its performance. Reconciliations of these measures to comparable GAAP measures are provided further below in this release.

In addition to historical information, this 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: a significant decline in capital expenditures in the specialty chemical and pharmaceutical industries; a major decline in oil and natural gas prices; foreign exchange rate fluctuations; work stoppages related to union negotiations; customer order cancellations; business disruptions caused by the implementation of business computer systems; our ability to comply with the financial covenants and other provisions of our financing arrangements; events or circumstances which result in an impairment of 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; and general economic conditions that can affect demand in the process industries. 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, 2008 August 31, 2007 ASSETS Current Assets: Cash and cash equivalents $91,744 $116,110 Accounts receivable 147,221 152,779 Inventories 128,662 99,196 Other current assets 8,101 7,410 Deferred taxes 9,905 11,178 Total Current Assets 385,633 386,673 Goodwill & Other Intangible Assets 292,981 278,422 Deferred Taxes 7,953 9,583 Other Assets 11,255 12,196 Property, Plant & Equipment 136,816 129,269 $834,638 $816,143 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $78,452 $78,890 Accrued expenses 115,566 105,394 Current portion of long-term debt 2,478 72,522 Total Current Liabilities 196,496 256,806 Long-Term Debt - Less Current Portion 30,542 30,553 Deferred Taxes 24,818 24,818 Other Long-Term Liabilities 100,092 91,448 Shareholders' Equity 482,690 412,518 $834,638 $816,143 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 2008 2007 2008 2007 data) Sales $200,946 $171,428 $559,414 $488,359 Cost of sales 124,122 110,013 353,493 318,232 Gross profit 76,824 61,415 205,921 170,127 SG&A expenses 42,361 37,994 123,115 114,328 Other (income) expense (5,697) 421 (6,796) (2,158) Income before interest and income taxes 40,160 23,000 89,602 57,957 Interest expense 257 1,465 1,763 4,350 Income before income taxes and minority interest 39,903 21,535 87,839 53,607 Income tax expense 12,749 7,952 29,287 20,903 Minority interest 659 335 1,782 911 Net income $26,495 $13,248 $56,770 $31,793 Net Income Per Share: Basic $0.77 $0.39 $1.65 $0.94 Diluted $0.76 $0.39 $1.64 $0.93 Weighted Average Common Shares Outstanding: Basic 34,548 34,170 34,469 33,986 Diluted 34,650 34,410 34,582 34,206 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) 2008 2007 2008 2007 Sales Fluid Management $83,505 $74,418 $232,369 $208,236 Process Solutions 80,782 66,442 226,583 194,311 Romaco 36,659 30,568 100,462 85,812 Total $200,946 $171,428 $559,414 $488,359 Income Before Interest and Income Taxes (EBIT) Fluid Management $25,230 $20,585 $64,648 $53,010 Process Solutions 10,184 5,261 25,614 21,413 Romaco 7,906 1,163 11,557 (4,109) Corporate and Eliminations (3,160) (4,009) (12,217) (12,357) Total $40,160 $23,000 $89,602 $57,957 Depreciation and Amortization Fluid Management $1,839 $1,698 $5,023 $5,116 Process Solutions 1,803 1,647 5,158 4,855 Romaco 496 472 1,378 1,507 Corporate and Eliminations 148 166 503 682 Total $4,286 $3,983 $12,062 $12,160 Orders Fluid Management $86,901 $75,067 $243,905 $221,535 Process Solutions 84,271 78,018 255,670 212,969 Romaco 34,115 32,968 115,623 96,640 Total $205,287 $186,053 $615,198 $531,144 Backlog Fluid Management $54,493 $46,597 $54,493 $46,597 Process Solutions 141,678 107,091 $141,678 107,091 Romaco 71,763 58,463 $71,763 58,463 Total $267,934 $212,151 $267,934 $212,151 Robbins & Myers, Inc. and Subsidiaries Reconciliation of Net Income to the non-GAAP measures of EBIT, EBITDA, Adjusted EBIT and Adjusted EBITDA (Unaudited) Three Months Ended Nine Months Ended May 31, May 31, May 31, May 31, 2008 2007 2008 2007 Net income $26,495 $13,248 $56,770 $31,793 Interest expense 257 1,465 1,763 4,350 Income taxes 12,749 7,952 29,287 20,903 Minority interest 659 335 1,782 911 EBIT 40,160 23,000 89,602 57,957 Minority interest (659) (335) (1,782) (911) Depreciation & amortization $4,286 $3,983 $12,062 $12,160 EBITDA 43,787 26,648 99,882 69,206 Special items: (1) Process Solutions segment Restructuring costs - - - - Net product line/facility sale gains - - - (5,036) - - - (5,036) (2) Romaco segment Restructuring costs - 421 - 1,818 Net product line/facility sale (gains)/losses (5,697) (6,796) 1,060 (5,697) 421 (6,796) 2,878 Total Special Items (5,697) 421 (6,796) (2,158) Adjusted EBIT $34,463 $23,421 $82,806 $55,799 Adjusted EBIT margin 17.2% 13.7% Adjusted EBITDA $38,090 $27,069 $93,086 $67,048 Romaco segment: EBIT $7,906 $1,163 Special items per above Total, see detail above (5,697) 421 Romaco segment, adjusted EBIT $2,209 $1,584 Romaco segment, adjusted EBIT margin 6.0% 5.2% Trailing Twelve Months Ended May 31, May 31, 2008 2007 Net income $76,646 $40,813 Interest expense 2,656 6,972 Income taxes 44,286 28,127 Minority interest 2,339 1,128 EBIT 125,927 77,040 Minority interest (2,339) (1,128) Depreciation & amortization $16,526 $16,902 EBITDA $140,114 $92,814 Special items: (1) Process Solutions segment Restructuring costs - (132) Net product line/facility sale gains - (5,036) - (5,168) (2) Romaco segment Restructuring costs - 4,860 Net product line/facility sale (gains)/losses (8,099) 19 (8,099) 4,879 Total Special Items (8,099) (289) Adjusted EBIT $117,828 $76,751 Adjusted EBIT margin Adjusted EBITDA $132,015 $92,525

Note: EBIT, adjusted EBIT, adjusted EBIT margin, 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 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 operating results. Neither EBIT nor EBITDA are measures of cash available for use by management.

SOURCE Robbins & Myers, Inc.

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