DAYTON, Ohio, March 26 /PRNewswire-FirstCall/ -- Robbins & Myers, Inc. today reported diluted net earnings per share (DEPS) of $0.47 for its fiscal second quarter ended February 29, 2008, more than double the $0.23 of DEPS reported in the prior year comparable period. The year-over-year increase in DEPS was attributed to higher sales, an improved cost structure, and a lower tax rate. Current year quarter results include approximately $0.02 per share of benefit from the sale of a facility, as well as approximately $0.01 per share of benefit from the favorable resolution of a tax matter. All reported results reflect the Company's recent 2-for-1 stock split of its common shares.
Robbins & Myers reported second quarter 2008 sales of $185 million, $22 million or 14% higher than in the prior year comparable period. Orders were $216 million in the second quarter of 2008, $33 million or 18% higher than in the prior year second quarter. Excluding the impact from acquired and disposed product lines and currency translation, sales increased 7% and orders increased 8%. The Company ended the quarter with backlog of $264 million.
"Market conditions remain favorable in our key end markets with notable sales growth in global energy and chemical sectors," said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. "We continue to improve our capabilities to meet rising customer demand, not only by making targeted investments in capital and people, but also through greater integration of our operations and process improvements associated with our lean enterprise initiatives. These improved capabilities are also helping to improve our profitability and cash flow."
The Company achieved $26 million of earnings before interest, taxes and minority interest (EBIT) in the second quarter of 2008, 66% higher than the comparable prior year quarter. The EBIT margin of 14.2% in the quarter represents an increase of 450 basis points. Excluding special items, which included a facility sale gain in the second quarter of 2008 and restructuring costs in the second quarter of 2007, adjusted EBIT margins increased 270 basis points to 13.6% due largely to increased sales and restructuring activities completed in the prior year. Trailing twelve-month EBITDA has grown to $123 million, 60% higher than the year-ago comparable figure.
"Robbins & Myers' strong profitability in the quarter was amplified by improvements in working capital, enabling us to achieve $26 million of cash flow from operating activities," said Mr. Wallace. "During the quarter we also sold a facility related to a previously-disposed product line, and we continue to look for other opportunities to reduce the complexity and capital- intensity of our business. We ended the quarter with $131 million of cash, substantially higher than our debt levels. The Company is well-positioned for the remainder of fiscal 2008."
The Company announced that it is increasing its full year 2008 DEPS guidance from $1.78-$1.88 to $1.82-$1.92. The Company also established third quarter 2008 DEPS guidance of $0.42-$0.47, as compared with actual results of $0.39 in the third quarter of 2007. On March 31, 2008, the escrow period related to the Company's fiscal 2006 sale of certain product lines will conclude, as will certain contingency obligations, which could result in a one-time benefit to third quarter 2008 earnings and cash flow. The Company's guidance excludes any potential impact from this matter.
Second 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 second quarter sales of $77 million, a 12% increase, and orders of $74 million, a 7% decrease. Excluding currency exchange rate effects, sales increased 8% and orders declined 11%. The prior year quarter included an $8 million international order for annual requirements of a single customer which did not repeat in the current year. EBIT grew 22% to $21 million, and EBIT margins expanded 220 basis points to 27.4%.
The Process Solutions segment reported sales of $75 million in the second quarter, a 19% increase, and orders of $94 million, a 35% increase. Excluding the effects of currency exchange rates and an acquisition, sales increased 7% and orders climbed 22%, primarily on continued strength in global chemical markets. The segment earned $7 million of EBIT in the second quarter, and EBIT margins improved 260 basis points to 10.0%. In January 2008, the Company's 51%-owned Indian subsidiary acquired Mavag AG, a small manufacturer of processing equipment for the pharmaceutical market.
The Romaco segment reported that sales grew 7% to $33 million in the second quarter, and orders were up 43% to $48 million. Excluding the impact from a disposed product line and currency exchange rates, sales increased 5% and orders increased 26% as a result of several recent large project wins for packaging and secondary processing applications. Excluding facility sale gains and restructuring costs, Romaco reported that adjusted EBIT margins jumped 440 basis points to 3.0% as a result of increased sales and restructuring activities completed in the prior year.
Conference Call to Be Held at 2:00 PM (EDT) Thursday, March 27, 2008
A conference call to discuss these results has been scheduled for 2:00 p.m. EDT on Thursday, March 27, 2008, which can be accessed at http://www.robn.com/ or by dialing (866) 383-8009 (US/Canada) or +1-617-597-5342, using conference ID #84383242. Replays of the call can be accessed by dialing +1-888-286-8010 (U.S./Canada) or +1-617-801-6888, both using replay ID #30887500.
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 and EBITDA (earnings before interest, taxes, depreciation and amortization). 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) February 29, 2008 August 31, 2007 ASSETS Current Assets: Cash and cash equivalents $130,774 $116,110 Accounts receivable 144,861 152,779 Inventories 120,548 99,196 Other current assets 9,336 7,410 Deferred taxes 9,969 11,178 Total Current Assets 415,488 386,673 Goodwill & Other Intangible Assets 290,966 278,422 Deferred taxes 8,226 9,583 Other Assets 12,349 12,196 Property, Plant & Equipment 134,906 129,269 $861,935 $816,143 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $75,091 $78,890 Accrued expenses 103,394 105,394 Current portion of long-term debt 73,741 72,522 Total Current Liabilities 252,226 256,806 Long-Term Debt - Less Current Portion 30,530 30,553 Deferred Taxes 24,818 24,818 Other Long-Term Liabilities 101,216 91,448 Shareholders' Equity 453,145 412,518 $861,935 $816,143 ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended February February February February (in thousands, except 29, 28, 29, 28, per share data) 2008 2007 2008 2007 Sales $184,932 $162,498 $358,468 $316,931 Cost of sales 118,697 107,649 229,371 208,219 Gross profit 66,235 54,849 129,097 108,712 SG&A expenses 41,113 37,195 80,754 76,334 Other (income) expense (1,099) 1,860 (1,099) (2,579) Income before interest and income taxes 26,221 15,794 49,442 34,957 Interest expense 779 1,345 1,506 2,885 Income before income taxes and minority interest 25,442 14,449 47,936 32,072 Income tax expense 8,583 6,288 16,538 12,951 Minority interest 522 229 1,123 576 Net income $16,337 $7,932 $30,275 $18,545 Net Income Per Share: Basic $0.47 $0.23 $0.88 $0.55 Diluted $0.47 $0.23 $0.88 $0.54 Weighted Average Common Shares Outstanding: Basic 34,488 34,116 34,429 33,909 Diluted 34,620 34,331 34,548 34,087 ROBBINS & MYERS, INC. AND SUBSIDIARIES CONDENSED BUSINESS SEGMENT INFORMATION (Unaudited) Three Months Six Months Ended Ended February February February February 29, 28, 29, 28, (in thousands) 2008 2007 2008 2007 Sales Fluid Management $76,509 $68,225 $148,864 $133,818 Process Solutions 74,952 63,010 145,801 127,869 Romaco 33,471 31,263 63,803 55,244 Total $184,932 $162,498 $358,468 $316,931 Income Before Interest and Income Taxes (EBIT) Fluid Management $20,970 $17,216 $39,418 $32,425 Process Solutions 7,474 4,639 15,430 16,152 Romaco 2,106 (2,300) 3,651 (5,272) Corporate and Eliminations (4,329) (3,761) (9,057) (8,348) Total $26,221 $15,794 $49,442 $34,957 Depreciation and Amortization Fluid Management $1,531 $1,712 $3,184 $3,418 Process Solutions 1,686 1,614 3,355 3,208 Romaco 430 582 882 1,035 Corporate and Eliminations 133 260 355 516 Total $3,780 $4,168 $7,776 $8,177 Orders Fluid Management $74,212 $79,927 $157,004 $146,468 Process Solutions 93,983 69,847 171,399 134,951 Romaco 47,795 33,389 81,508 63,672 Total $215,990 $183,163 $409,911 $345,091 Backlog Fluid Management $51,097 $45,950 $51,097 $45,950 Process Solutions 138,189 95,514 138,189 95,514 Romaco 74,307 61,143 74,307 61,143 Total $263,593 $202,607 $263,593 $202,607 Robbins & Myers, Inc. and Subsidiaries Reconciliation of Net Income to the non-GAAP measures of EBIT, EBITDA, Adjusted EBIT and Adjusted EBITDA (Unaudited) Trailing Three Months Six Months Twelve Months Ended Ended Ended February February February February February February 29, 28, 29, 28, 29, 28, 2008 2007 2008 2007 2008 2007 Net income $16,337 $7,932 $30,275 $18,545 $63,399 $27,490 Interest expense 779 1,345 1,506 2,885 3,864 8,632 Income taxes 8,583 6,288 16,538 12,951 39,489 23,021 Minority interest 522 229 1,123 576 2,015 1,071 EBIT 26,221 15,794 49,442 34,957 108,767 60,214 EBIT margin 14.2% 9.7% Minority interest (522) (229) (1,123) (576) (2,015) (1,071) Depreciation & amortization 3,780 4,168 7,776 8,177 16,223 17,565 EBITDA 29,479 19,733 56,095 42,558 $122,975 $76,708 Special items: (1) Process Solutions segment Net product line/facility sale gains - - - (5,036) - - - (5,036) (2) Romaco segment Restructuring costs - 800 1,397 Net product line/facility sale gains (1,099) 1,060 (1,099) 1,060 (1,099) 1,860 (1,099) 2,457 Total Special Items (1,099) 1,860 (1,099) (2,579) Adjusted EBIT $25,122 $17,654 $48,343 $32,378 Adjusted EBIT margin 13.6% 10.9% Adjusted EBITDA $28,380 $21,593 $54,996 $39,979 Romaco segment: EBIT $2,106 $(2,300) Special items per above Total, see detail above (1,099) 1,860 Romaco segment, adjusted EBIT $1,007 $(440) Romaco segment, adjusted EBIT margin 3.0% -1.4%
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.
