Robbins & Myers Reports Fourth Quarter Fiscal 2006 Results

DAYTON, Ohio, Oct. 16 /PRNewswire-FirstCall/ -- Robbins & Myers, Inc. announced today its financial results for the fourth quarter of fiscal 2006, ended August 31, 2006. The Company reported fourth quarter diluted net earnings per share of $0.56, versus $0.02 in the prior year fourth quarter. Excluding special items, diluted net earnings per share were $0.64 per share, as compared with $0.20 in the fourth quarter of 2005.

The Company also reported fourth quarter 2006 sales of $183 million, $14 million higher than in the fourth quarter of 2005. Excluding 2005 sales from divested product lines, sales increased $28 million or 18%. Reported fourth quarter 2006 orders of $195 million were $42 million or 27% higher than in the prior year. The Company also announced higher backlog across all business segments with total year-end backlog of $174 million, 50% higher than the year-ago figure.

"We are pleased to deliver these substantial improvements in the performance of our business, driven by stronger market conditions and our improving cost structure," said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. "Our Fluid Management segment continues to deliver solid increases in sales and earnings. Romaco was profitable on a pre-restructuring basis for the second consecutive quarter. We continue to improve EBIT margins in the Process Solutions segment, achieving 9% in the fourth quarter of 2006. Strong order performance across our businesses led to significant increases in backlog. And we made further strides in our capital structure, decreasing our debt to $106 million or 24% of total capitalization."

Earnings before interest, taxes and minority interest ("EBIT") were $19 million in the fourth quarter of fiscal 2006 and $8 million in the same period of fiscal 2005. Fourth quarter EBIT margins increased 570 basis points over the prior year to 10.4%. These results included net costs for special items of $2 million in both the fourth quarter of 2006 and 2005. Before these special items, fourth quarter 2006 EBIT was $21 million, $11 million higher than the same period of the prior year. The improvement in EBIT before special items was driven by higher sales volume and savings from completed restructuring programs.

For the full fiscal year, the Company incurred a net loss of $1.31 per diluted share in 2006 as a result of goodwill impairment and restructuring costs, compared with a net loss of $0.02 per diluted share in fiscal 2005, which also included restructuring charges. Fiscal 2006 diluted earnings per share before these special items were $1.26 compared with diluted earnings per share before special items of $0.50 in fiscal 2005.

Mr. Wallace commented, "Throughout 2006 we reduced complexity and increased our capabilities. We trimmed our portfolio, reduced our manufacturing footprint, embraced lean processes and began leveraging our strength in target markets as we transformed Robbins & Myers from a holding company into an operating company. As we enter 2007, we are increasing our focus on profitable growth, while continuing to improve our operating performance."

For fiscal 2007, the Company expects continued strength in Fluid Management and continued improvement in the Process Solutions and Romaco segments, supported by recent order activity and strong backlog. Based on this outlook, the Company expects fiscal 2007 net earnings of $1.70 to $1.90 per diluted share. First quarter 2007 net earnings are expected to be in the range of $0.40 to $0.50 per diluted share. These GAAP estimates include costs for the completion of previously-announced restructuring activities, as well as an expected gain from the sale of a facility in Mexico in the first quarter. The Company expects these special items to contribute approximately $0.15 of net benefit per diluted share in the first quarter.

Fourth Quarter Results by Segment

Fluid Management. The Fluid Management segment continued its record performance. Fourth quarter 2006 sales of $73.2 million and EBIT of $19.6 million increased by 34% and 78%, respectively, compared with the fourth quarter of the prior year. Orders increased 34% over last year's fourth quarter to $77.6 million.

Process Solutions. Fourth quarter fiscal 2006 sales of $66.8 million for the Process Solutions segment were $4.8 million or 8% higher than in the prior year period. Excluding the impact of the Edlon Lined Pipe product line, which was sold in August 2005, sales increased $7.8 million or 13% as a result of favorable end market conditions. EBIT in the fourth quarter of fiscal 2006 was $6.2 million, $4.8 million higher than in the same period of the prior year; $1.7 million of the increase in EBIT was related to lower special item costs with the remainder due to increased volume and the benefits of completed restructuring programs. Fourth quarter orders increased 28% over the prior year quarter to $70.7 million.

Romaco. The Romaco segment sales of $43.1 million for the fourth quarter 2006 were $9.4 million lower than in the comparable period of the prior year due to the sale of the Hapa and Laetus product lines on March 31, 2006. Excluding these product lines, sales increased 4%. EBIT was negative $0.7 million in the fourth quarter 2006 compared with positive $0.5 million in the fourth quarter 2005. Excluding fourth quarter net costs of special items of $2.2 million and $0.7 million in 2006 and 2005, respectively, EBIT was $1.4 million in the recent quarter compared with $1.1 million for the same period of last year. Orders increased 17% over the prior year to $46.3 million in the fourth quarter of 2006 and included large orders with scheduled delivery dates extending beyond 12 months.

Conference Call to Be Held at 10:00 AM (Eastern) Tomorrow

A conference call to discuss these results has been scheduled for 10:00 AM ET on Tuesday, October 17, 2006. The call can be accessed via webcast or via telephone by dialing [phone] (US/Canada) or [phone] (outside US/Canada) and using access code 83466065. Webcast information and conference call materials will be made available on the Company's website (http://www.robn.com/, "Investor Information" section) prior to the start of the call. Telephonic replays will be available for one week by calling [phone] (US/Canada) or [phone] (outside US/Canada) and using the access code 65727954.

About Robbins & Myers

Robbins & Myers, Inc. is a leading global supplier of highly-engineered, application-critical equipment and systems to the global pharmaceutical, energy, chemical and industrial markets.

In this release the Company refers to various non-GAAP measures. Earnings and earnings per share excluding special items are non-GAAP financial measures. The Company believes these measures are helpful to investors in assessing the Company's ongoing performance of its underlying businesses before the impact of special items on its financial performance. In addition, these non-GAAP measures provide a comparison to our previously announced earnings guidance which excluded these special items. Earnings and earnings per share before special items reconcile to earnings presented according to GAAP as follows:

Three Months Twelve Months Ended Ended Aug. 31, Aug. 31, Aug. 31, Aug. 31, (in thousands, except per share data) 2006 2005 2006 2005 Net income (loss) $9,020 $335 ($19,587) ($262) Plus special items, net of tax: Inventory write-offs included in cost of sales 477 0 710 192 Process Solutions segment restructuring charges and facility dispositions (131) 1,839 3,328 4,067 Romaco segment restructuring charges and business dispositions 1,001 804 (4,471) 3,259 Goodwill impairment charge 0 0 39,174 0 Net income before special items $10,367 $2,978 $19,154 $7,256 Diluted net income (loss) per share $0.56 $0.02 ($1.31) ($0.02) Plus special items: Inventory write-offs included in cost of sales 0.03 0.00 0.04 0.01 Process Solutions segment restructuring charges and facility dispositions (0.01) 0.13 0.22 0.28 Romaco segment restructuring charges and business dispositions 0.06 0.05 (0.31) 0.23 Goodwill impairment charge 0.00 0.00 2.62 0.00 Diluted net income per share before special items $0.64 $0.20 $1.26 $0.50

In addition to historical information, this release contains forward- looking statements identified by use of words such as "expects," "anticipates," "estimates," and similar expressions. These statements reflect the Company's expectations at the time this release was issued. Actual events and results may differ materially from those described in the forward-looking statements. Among the factors that could cause material differences are 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, the impact of Sarbanes-Oxley section 404 procedures, work stoppages related to union negotiations, customer order cancellations, the ability of the Company to realize the benefits of its restructuring program in its Romaco and Process Solutions segments, including the receipt of cash proceeds from the sale of excess facilities, and general economic conditions that can affect demand in the process industries. The Company undertakes no obligation to update or revise any forward-looking statement.

ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands) August 31, 2006 August 31, 2005 ASSETS Current Assets: Cash and cash equivalents $48,365 $23,043 Accounts receivable 124,569 128,676 Inventories 94,990 102,652 Other current assets 6,260 7,121 Deferred taxes 9,937 10,216 Total Current Assets 284,121 271,708 Goodwill & Other Intangible Assets 273,834 324,208 Other Assets 13,338 13,807 Property, Plant & Equipment 127,030 130,612 $698,323 $740,335 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $62,749 $67,183 Accrued expenses 102,327 97,090 Current portion of long-term debt 744 8,616 Total Current Liabilities 165,820 172,889 Long-Term Debt - Less Current Portion 104,787 166,792 Deferred Taxes 2,320 3,721 Other Long-Term Liabilities 87,017 96,088 Shareholders' Equity 338,379 300,845 $698,323 $740,335 Note: All known adjustments have been reflected in this report, but the information is subject to annual audit and year-end adjustments which are estimated to be insignificant. ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended Aug. 31, Aug. 31, Aug. 31, Aug. 31, (in thousands, except per share 2006 2005 2006 2005 data) Sales $183,190 $169,104 $625,389 $604,773 Cost of sales 117,280 114,447 410,473 408,808 Gross profit 65,910 54,657 214,916 195,965 SG&A expenses 44,959 43,888 167,677 163,109 Amortization expense 577 646 2,343 2,519 Goodwill impairment charge 0 0 39,174 0 Other 1,291 2,143 (1,786) 8,886 Income before interest and income taxes 19,083 7,980 7,508 21,451 Interest expense 2,622 3,606 12,946 14,433 Income before income taxes and minority interest 16,461 4,374 (5,438) 7,018 Income tax expense 7,224 3,640 12,589 5,840 Minority interest 217 399 1,560 1,440 Net income (loss) $9,020 $335 ($19,587) ($262) Net income (loss) per share: Basic $0.59 $0.02 ($1.31) ($0.02) Diluted $0.56 $0.02 ($1.31) ($0.02) Weighted Average Common Shares Outstanding: Basic 15,363 14,662 14,898 14,608 Diluted 16,713 16,469 16,575 16,423 Orders $194,663 $152,597 $688,822 $607,210 Backlog $174,447 $116,491 $174,447 $116,491 Note: All known adjustments have been reflected in this report, but the information is subject to annual audit and year-end adjustments which are estimated to be insignificant. ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED BUSINESS SEGMENT INFORMATION (Unaudited) Three Months Ended Twelve Months Ended August 31, August 31, August 31, August 31, (in thousands) 2006 2005 2006 2005 Sales Fluid Management $73,246 $54,660 $245,180 $198,700 Process Solutions 66,837 61,987 231,009 238,698 Romaco 43,107 52,457 149,200 167,375 Total $183,190 $169,104 $625,389 $604,773 Income Before Interest and Income Taxes (EBIT) Fluid Management $19,636 $11,013 $56,522 $39,731 Process Solutions 6,177 (1) 1,358 (1) 8,867 (1) 4,739 (1) Romaco (732)(2) 454 (2) (38,189)(2) (7,905)(2) Corporate and Eliminations (5,998) (4,845) (19,692) (15,114) Total $19,083 $7,980 $7,508 $21,451 Depreciation and Amortization Fluid Management $2,135 $2,058 $7,491 $7,772 Process Solutions 1,449 1,799 6,496 7,497 Romaco 763 872 2,991 3,550 Corporate and Eliminations 395 382 1,600 1,574 Total $4,742 $5,111 $18,578 $20,393 Orders Fluid Management $77,604 $57,662 $256,937 $205,653 Process Solutions 70,741 55,389 262,256 235,007 Romaco 46,318 39,546 169,629 166,550 Total $194,663 $152,597 $688,822 $607,210 Backlog Fluid Management $33,298 $21,678 $33,298 $21,678 Process Solutions 88,433 57,861 88,433 57,861 Romaco 52,716 36,952 52,716 36,952 Total $174,447 $116,491 $174,447 $116,491 (1) Includes income of $132,000 and costs of $1,560,000 in the quarters ending August 31, 2006 and 2005, respectively, related to restructuring of our Process Solutions businesses and disposition of an Edlon facility. The costs of these items included in the twelve month periods ended August 31, 2006 and 2005 were $4,530,000 and $5,737,000, respectively. The twelve month period ended August 31, 2006 also includes a gain of $1,800,000 related to the sale of land and buildings in China. (2) Includes costs of $3,212,000 and $682,000 in the quarters ending August 31, 2006 and 2005, respectively, related to restructuring of our Romaco businesses. The three month period ended August 31, 2006 includes an additional gain on the disposal of businesses of $1,041,000. The twelve month period ended August 31, 2006 includes costs related to the restructuring of our Romaco business of $5,069,000 and a gain on the disposal of businesses of $8,458,000. The business restructuring costs included in the twelve month period ended August 31, 2005 were $4,279,000. The twelve month period ended August 31, 2006 also includes a $39,174,000 goodwill impairment charge. Note: All known adjustments have been reflected in this report, but the information is subject to annual audit and year-end adjustments which are estimated to be insignificant.