<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ---
- ---- EXCHANGE ACT OF 1934
For the Quarterly Period Ended May 31, 1996 Commission File Number 0-288
---------------- --------
Robbins & Myers, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0424220
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1400 Kettering Tower, Dayton, Ohio 45423
- --------------------------------------------------------------------------------
(Address of Principal executive offices) (Zip Code)
Registrant's telephone number including area code (513) 222-2610
----------------------------
None
- --------------------------------------------------------------------------------
former name, former address and former fiscal year if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
--- ---
Common shares, without par value, outstanding as of May 31, 1996: 5,233,642
-----------------------
1
<PAGE> 2
PART 1--FINANCIAL INFORMATION
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
($ in thousands) May 31, August 31,
1996 1995
--------------- -------------
ASSETS (Unaudited)
Current Assets
<S> <C> <C>
Cash and cash equivalents $8,836 $10,210
Accounts receivable, net 51,811 49,415
Inventories:
Finished products 12,566 13,743
Products in process 20,412 15,149
Materials and supplies 13,846 14,284
--------------- -------------
46,824 43,176
Deferred taxes 5,644 4,539
Prepaid expenses 1,884 2,492
--------------- -------------
Total Current Assets 114,999 109,832
Goodwill 92,098 73,497
Other Intangible Assets 12,691 13,573
Deferred Taxes 3,421 4,522
Other Assets 5,948 4,378
Property, Plant and Equipment 105,623 99,169
Less accumulated depreciation 39,363 34,564
--------------- -------------
66,260 64,605
--------------- -------------
$295,417 $270,407
=============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $21,174 $22,442
Accrued expenses 48,223 49,190
Current portion long-term debt 1,948 6,067
--------------- -------------
Total Current Liabilities 71,345 77,699
Long-Term Debt 79,285 61,834
Other Long-Term Liabilities 60,799 60,935
Shareholders' Equity:
Common stock without par value:
Authorized shares--25,000,000
Outstanding shares--5,233,642 at May 31, 1996 and 5,202,544 at August
31, 1995, after deducting shares in treasury--121,965
at May 31, 1996 and 135,805 at August 31, 1995 22,213 20,682
Retained Earnings 62,099 49,254
Equity adjustment for foreign currency translation 450 777
Equity adjustment to recognize minimum pension liability (774) (774)
--------------- -------------
83,988 69,939
--------------- -------------
$295,417 $270,407
=============== =============
</TABLE>
See Notes to Consolidated Condensed Financial Statements
2
<PAGE> 3
ROBBINS & MYERS, INC. AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CONDENSED OPERATIONS
(in thousands except per share data)
<TABLE>
<CAPTION>
(Unaudited) Three Months Ended Nine Months Ended
------------------------------- -----------------------------------
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
-------------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Net sales $89,881 $79,973 $255,272 $219,475
Cost of sales 59,813 53,793 170,336 146,107
-------------- ------------- ---------------- ---------------
30,068 26,180 84,936 73,368
Engineering and development, selling and
administrative expenses 19,499 19,037 58,180 53,375
Interest expense 1,735 1,921 5,304 5,552
Other (income) deductions - net (269) 904 (1,027) 747
-------------- ------------- ---------------- ---------------
Income before income taxes 9,103 4,318 22,479 13,694
Income taxes 3,368 2,062 8,317 5,435
-------------- ------------- ---------------- ---------------
Net income before extraordinary item 5,735 2,256 14,162 8,259
Extraordinary gain from refinancing debt 0 1,332 0 1,332
-------------- ------------- ---------------- ---------------
Net income $5,735 $3,588 $14,162 $9,591
============== ============= ================ ===============
Earnings per share before extraordinary item:
Primary $1.04 $0.42 $2.58 $1.56
============== ============= ================ ===============
Assuming full dilution $1.03 $0.42 $2.56 $1.54
============== ============= ================ ===============
Earnings per share:
Primary $1.04 $0.67 $2.58 $1.81
============== ============= ================ ===============
Assuming full dilution $1.03 $0.67 $2.56 $1.79
============== ============= ================ ===============
Weighted average common shares outstanding:
Primary 5,513 5,355 5,488 5,305
============== ============= ================ ===============
Assuming full dilution 5,546 5,366 5,542 5,358
============== ============= ================ ===============
Dividends per share:
Declared $0.0875 $0.075 $0.25 $0.225
============== ============= ================ ===============
Paid $0.0875 $0.075 $0.25 $0.225
============== ============= ================ ===============
</TABLE>
See Notes to Consolidated Condensed Financial Statements
3
<PAGE> 4
ROBBINS & MYERS, INC. AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CONDENSED CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
(Unaudited) Nine Months Ended
---------------------------------
May 31, May 31,
1996 1995
-------------- ---------------
<S> <C> <C>
Operating Activities:
Net income $14,162 $9,591
Equity adjustment for foreign currency translation (327) 1,370
Adjustment required to reconcile net income
to net cash and cash equivalents provided by operating activities:
Depreciation 7,622 6,543
Amortization 3,288 2,815
Deferred taxes (4) 644
Equity income from unconsolidated investments (1,500) (560)
Gain on Extinguishment of debt 0 (2,183)
Other 869 0
Changes in operating assets and liabilities:
Accounts receivable, less allowances (2,396) (9,243)
Inventories (3,648) (2,852)
Prepaid expenses 608 2,484
Other assets (70) 1,267
Accounts payable (1,268) 1,898
Accrued expenses (967) 3,692
Other long-term liabilities (136) 3,437
-------------- ---------------
Net Cash and Cash Equivalents Provided by Operating Activities 16,233 18,903
Investing Activities:
Capital expenditures, net of nominal disposals (9,277) (6,350)
Purchase of Pharaoh Corp and Cannon Process Equipment, Ltd. 0 (11,088)
-------------- ---------------
Net Cash and Cash Equivalents Used by Investment Activities (9,277) (17,438)
Financing Activities:
Proceeds from debt borrowings 50,870 55,449
Payments of long-term debt (39,812) (60,455)
Proceeds from sale of common stock 662 368
Retirement of stock appreciation rights and acquisition costs incurred (18,733) 0
Dividends paid (1,317) (1,168)
-------------- ---------------
Net Cash and Cash Equivalents Used by Financing Activities (8,330) (5,806)
-------------- ---------------
Decrease in Cash and Cash Equivalents (1,374) (4,341)
Cash and Cash Equivalents at Beginning of Period 10,210 16,079
-------------- ---------------
Cash and Cash Equivalents at End of Period $8,836 $11,738
============== ===============
</TABLE>
See Notes to Consolidated Condensed Financial Statements
4
<PAGE> 5
ROBBINS & MYERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
May 31, 1996
(Unaudited)
NOTE A--PREPARATION OF FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments, consisting of normally recurring
items, necessary to present fairly the financial condition of the Company and
its subsidiaries as of May 31, 1996 and August 31, 1995 and the results of
their operations for the three month and nine month periods ended May 31, 1996,
and May 31, 1995, and their cash flows for the nine month periods ended May 31,
1996, and May 31, 1995. All intercompany transactions have been eliminated.
NOTE B--NET INCOME PER SHARE
Net income per share was calculated as disclosed in Exhibit 11.
NOTE C--STOCK APPRECIATION RIGHTS
On October 10, 1995, 1,850,000 of stock appreciation rights were retired for
$9.75 per right. This resulted in a total payment of $18,037,500. The payment
was made on October 24, 1995 and was financed through the Company's long-term
revolving credit agreement.
The following summarizes the Company's debt:
<TABLE>
<CAPTION>
May 31, August 31,
1996 1995
----------------- ----------------
(In thousands)
<S> <C> <C>
Senior debt:
Term loan $34,250 $36,500
Revolving credit loan 18,600 3,800
Subordinated debt:
Face amount 30,439 30,495
Discount (2,056) (2,894)
----------------- ----------------
Total debt 81,233 67,901
Less current portion 1,948 6,067
----------------- ----------------
$79,285 $61,834
================= ================
</TABLE>
On March 1, 1996 the Company incurred subordinated debt and recorded additional
goodwill of $1.6 million to record contingent purchase price provisions related
to the Pharaoh acquisition.
5
<PAGE> 6
ROBBINS & MYERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--Continued
NOTE D--INCOME TAXES
The estimated annual effective tax rates are 37.0% and 39.7% for 1996 and 1995,
respectively. In 1995, the estimated annual tax rate was increased from the
36.0% rate used in the second quarter, primarily due to increased estimates of
pretax income for the year and the tax effect of the write-off of the
investment in Hazleton Environmental.
NOTE E--ACCOUNTING FOR STOCK BASED COMPENSATION
In October 1995, the Financial Accounting Standards Board issued Statement No.
123, "Accounting for Stock- Based Compensation." The Statement establishes
financial accounting and reporting standards for stock-based employee
compensation plans. Companies may elect to account for such plans under the
fair value method or continue the previous accounting and disclose pro forma
net income and earnings per share as if the fair value method was applied. The
statement is to be applied on a prospective basis beginning in the Company's
fiscal year 1997.
The Company has not yet determined the potential financial statement impact of
the Standard, nor has it decided how or when it will initially adopt the
Standard.
NOTE F--SUBSEQUENT EVENT
At the June 26, 1996, Board of Directors' meeting, the Board approved a 2 for 1
stock split for shareholders of record on July 12, 1996, effected in the form
of a share distribution on July 31,1996. Pro forma earnings and dividend per
share information as if the stock split had been effected in these financial
statements is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------- -------------------------------
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Earnings per share before extraordinary item:
Primary $0.52 $0.21 $1.29 $0.78
============ ============ ============ ============
Assuming full dilution $0.52 $0.21 $1.28 $0.77
============ ============ ============ ============
Earnings per share:
Primary $0.52 $0.34 $1.29 $0.90
============ ============ ============ ============
Assuming full dilution $0.52 $0.33 $1.28 $0.90
============ ============ ============ ============
Dividends per share:
Declared $0.0438 $0.0375 $0.125 $0.1125
============ ============ ============ ============
Paid $0.0438 $0.0375 $0.125 $0.1125
============ ============ ============ ============
</TABLE>
6
<PAGE> 7
PART I--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
($ in thousands)
RESULTS OF OPERATIONS
Fiscal 1996 and 1995
Net income of $5.7 million for the third quarter ended May 31, 1996
was 59.8% higher than in the third quarter of 1995. Earnings per share of
$1.03, fully diluted, increased 53.7% from the third quarter of 1995. On a year
to date basis, net income of $14.2 million was 47.7% higher than the prior year
and earnings per share of $2.56, fully diluted, was 43.0% higher than the prior
year. These increases are primarily the result of higher volume and price
increases, as further discussed below.
Net sales for the third quarter of 1996 were $89.9 million, an
increase of 12.4% over the same period of the prior year. Year to date sales of
$255.3 million were 16.3% higher than the prior year. These increases were
primarily driven by the strong market demand for the Company's mixing
equipment, glass-lined storage and reactor vessels, and oilfield products .
These products are primarily sold to the pharmaceutical, chemical, and
petrochemical markets, which are expected to remain strong at least into the
near future. In addition, the Company expanded its aftermarket business from
the prior year, resulting in increased sales. Company backlog increased to a
record level of $114 million at May 31, 1996 , $2 million higher than February
29, 1996, $9 million higher than August 31, 1995 and $15 million higher than
May 31,1995.
The gross margin percentage of 33.5% for the third quarter of
1996 (33.3% year to date) was comparable to the 32.7% for the third quarter of
1995 (33.4% year to date). The gross margin percentage has remained relatively
constant despite the higher sales levels in 1996 due to a shift in product mix,
as gross margins for the products with the greatest sales increases, small
industrial mixers and reactor vessels, have lower margins than the Company's
other products. Gross margins for mixers and vessels have improved from the
prior year as a result of the higher volume and profitability improvement
measures implemented.
Engineering and development, selling and administrative expenses
decreased as a percentage of sales from 23.8% in the third quarter of
1995 (24.3% year to date) to 21.7% in the third quarter 1996 (22.8% year to
date). These decreases resulted from the higher sales volume and the fixed
nature of certain of these expenses as well cost reductions in these areas.
Interest expense of $1.7 million in the 3 third quarter and $5.3
million year to date, was comparable to the same periods of the prior year. The
effective interest rate was slightly lower and the average debt level for each
period was consistent with the prior year.
Other (income) deductions for the third quarter of 1995 includes a
one-time write-off of $1.6 million of the Company's investment in Hazleton
Environmental. The Company has no ongoing exposure to further losses related to
this investment.
The estimated effective annual income tax rate was 37.0% for 1996
compared to 39.7% for 1995. The tax rate for 1995 reflects the effect of the
nondeductibility of a portion of the write-off of the investment in Hazleton
Environmental. The 1996 tax rate is more reflective of ongoing operations.
In 1995, the Company realized a gain related to the early
extinguishment of certain debt. This gain is reflected as an extraordinary gain
of $1.3 million, net of tax, in the third quarter.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 1996, 1.85 million of outstanding stock
appreciation rights were retired for $18 million. Also for the nine months, $9
million was used for capital expenditures and $8 million for working capital.
These cash requirements of $35 million were financed through funds generated
from income plus noncash expenses of $24 million and net debt borrowings of $11
million.
7
<PAGE> 8
PART I--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES--CONTINUED
In 1995 the significant uses of cash were capital expenditures and
acquisitions of $17 million and net debt payments of $5 million. Thses
requirements were funded by cash generated from operations of $19 million. The
net result was a decrease of $4.3 million in cash balances for the first nine
months of 1995.
The Company expects operating cash flow to be adequate for the
remainder of fiscal year 1996's and 1997's operating needs, including scheduled
debt service and shareholder dividend requirements.
The Company's significant foreign operations have the local currency
as their functional currency. The foreign operations primarily buy and sell
within the same country, mitigating the impact of currency fluctuations on
operations. To the extent that significant transactions are completed in a
different currency, the Company hedges its risk to future currency fluctuations
through foreign currency forward contracts with major financial institutions.
At May 31, 1996, the Company had approximately $30 million available
under its current bank credit agreement which management considered adequate to
meet the Company's operating needs.
8
<PAGE> 9
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) See index to Exhibits.
b) Reports on Form 8-K. During the quarter ended May 31,
1996, the Company did not file any reports on Form 8-K.
9
<PAGE> 10
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C> <C>
ROBBINS & MYERS, INC
-------------------------------
DATE: JULY 10, 1996 BY: /S/ GEORGE M. WALKER
--------------------------- --------------------------------------
GEORGE M. WALKER
VICE PRESIDENT & CFO
(PRINCIPAL FINANCIAL OFFICER)
DATE: JULY 10,1996 BY: /S/ KEVIN J. BROWN
--------------------------- --------------------------------------
KEVIN J. BROWN
CORPORATE CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
</TABLE>
10
<PAGE> 11
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
(4) Instruments Defining the Rights of Security Holders, Including Indenture
<S> <C> <C> <C>
4.1 Amendment No. 6, dated February 9, 1996, and Amendment
No. 7, dated April 16, 1996, to the Credit Agreement with
Bank One, Dayton NA, as agent.........................................*
(11) Statement Re: Computation of Earnings Per Share:
11.1 Computation of Earnings Per Share................................ *
(27) Financial Data Schedule.......................................... *
<FN>
- -----------------
"*" Indicates the Exhibit is filed with this Report.
</TABLE>
11
<PAGE> 1
EXHIBIT 4.1
AMENDMENT NO. 6 TO CREDIT AGREEMENT
THIS AMENDMENT NO 6 ("Amendment") is made as of February 9, 1996 by
and among ROBBINS & MYERS, INC. and its subsidiaries listed on the signature
pages hereto ("Borrowers"), BANK ONE, DAYTON, NA and NATIONAL CITY BANK,
COLUMBUS, as Banks ("Banks"), and BANK ONE, DAYTON, NA, as agent for Banks
("Agent"), under the following circumstances:
A. Borrowers, Banks and Agent entered into a Credit Agreement
dated as of June 24, 1994, as subsequently amended by
Amendments No. 1 through 5 (as so amended, the "Credit
Agreement").
B. Borrowers, Bank and Agent now desire to further amend the
Credit Agreement in certain respects.
NOW THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
A. CAPITALIZED TERMS. Capitalized terms used and not otherwise defined
herein are used with the meaning set forth in the Credit Agreement.
B. AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT. Section 2.1(b) of
the Credit Agreement hereby is amended in its entirety to read as follows:
<TABLE>
<CAPTION>
Bank Commitment Pro Rata
---- ---------- --------
Share
- -----
<S> <C> <C>
Bank One, Dayton, NA $30,667,500 58%
National City Bank, Columbus $22,207,500 42%
Total Revolving Credit $52,875,000 100%
Commitment
</TABLE>
The total Revolving Credit Commitment shall be increased to the amounts
hereinafter set forth on the dates indicated, as installments due under the
Term Loan on such dates are paid in full:
<PAGE> 2
<TABLE>
<CAPTION>
Total Revolving Credit
Date of Increase Commitment after Increase
---------------- -------------------------
<S> <C>
February 29, 1996 $54,000,000
May 31, 1996 $55,125,000
August 31, 1996 $56,250,000
</TABLE>
The total Revolving Credit Commitment shall be reduced to the amounts
hereinafter set forth on the dates indicated:
<TABLE>
<CAPTION>
Total Revolving Credit
Date of Reduction Commitment after Reduction
----------------- --------------------------
<S> <C>
December 1, 1996 $48,000,000
March 1, 1997 $45,000,000
March 1, 1998 $41,000,000
March 1, 1999 $36,000,000
March 1, 2000 $35,000,000
</TABLE>
C. AMENDMENT TO SECTION 7.16 HEREBY IS - MINIMUM TANGIBLE CAPITAL BASE.
Section 7.16 of the Credit Agreement is amended in its entirety to read as
follows:
At the end of the following fiscal quarters of Parent, Borrowers and
Subsidiaries shall maintain a minimum Tangible Capital Base on a Consolidated
basis of at least the minimum amounts hereinafter set forth:
<TABLE>
<CAPTION>
Fiscal Quarters Ending Minimum Amount
- ---------------------- --------------
<S> <C>
Prior to August 31, 1996 $12,000,000
As of August 31, 1996
through November 30, 1996 $12,000,000
As of February 28, 1997
through May 31, 1998 $21,000,000
As of August 31, 1998
through May 31, 1999 $30,000,000
As of August 31, 1999
through May 31, 2000 $39,000,000
As of August 31, 2000
through May 31, 2001 $48,000,000
As of August 31, 2001
</TABLE>
13
<PAGE> 3
and thereafter $57,000,000
D. AMENDMENT TO SECTION 7.17 - LEVERAGE RATIO. Section 7.17 of the
Credit Agreement hereby is amended in its entirety to read as follow:
At the end of each fiscal quarter of Parent during the following fiscal years,
the ratio of the outstanding indebtedness of Borrowers and Subsidiaries (but
excluding liabilities for undrawn Letters of Credit) to the Tangible Capital
Base of Borrowers and Subsidiaries, all on a Consolidated basis, shall not
exceed the following:
<TABLE>
<CAPTION>
Fiscal Quarters Ending Maximum Ratio
---------------------- -------------
<S> <C>
Prior to August 31, 1996 15.50:1
As of August 31, 1996
through November 30, 1996 15.50:1
As of February 28, 1997
through May 31, 1998 9.00:1
As of August 31, 1998
through May 31, 1999 5.85:1
As of August 31, 1999
through May 31, 2000 4.50:1
As of August 31, 2000
through May 31, 2001 3.75:1
As of August 31, 2001
and thereafter 3.00:1
</TABLE>
E. AMENDMENT TO DEFINITION OF "TANGIBLE CAPITAL BASE". The definition of
"Tangible Capital Base" set forth in Exhibit 1.1 to the Credit Agreement hereby
is amended in its entirety to read as follows:
"TANGIBLE CAPITAL BASE" means the sum of (i) the
14
<PAGE> 4
Tangible Net Worth of Borrowers, plus (ii) the amount of all
Subordinated Indebtedness, excluding any discount of the principal
amount of the Subordinated Notes, plus (iii) during the following
periods, the amounts indicated below:
<TABLE>
<CAPTION>
Period Additional Amount
------ -----------------
<S> <C>
Prior to August 31, 1996 $32,550,000
As of August 31, 1996
through November 30, 1996 $32,550,000
As of February 28, 1997
through May 31, 1998 $30,550,000
As of August 31, 1998
through May 31, 1999 $10,000,000
As of August 31, 1999
through May 31, 2000 $ 6,000,000
As of August 31, 2000
through May 31, 2001 $ 1,000,000
Thereafter 0
</TABLE>
F. OTHER FEES AND EXPENSES RELATING TO AMENDMENT TO CREDIT AGREEMENT.
Borrowers shall pay all fees and expenses of Agent and Banks, including the
fees and expenses of counsel to the Agent and each Bank relating to the
preparation of and closing upon this Amendment to Credit Agreement.
G. REPRESENTATIONS AND WARRANTIES. In order to induce the Banks to enter
into this Amendment No. 6, the Borrowers hereby represent and warrant that they
are in full compliance with all of their duties and obligations under the
Credit Agreement as amended hereby.
H. FURTHER AGREEMENTS.
1. The execution and delivery of this Amendment is not intended
to discharge any obligation of the
15
<PAGE> 5
Borrowers due to the banks under the Credit Agreement.
2. There is no novation by the execution and delivery of this
Amendment.
3. All the terms and conditions contained in the Credit
Agreement and all documents executed in accordance therewith,
except as expressly modified herein, shall continue unchanged
and remain in full force and effect.
4. This Amendment shall become effective when it has been
executed by the Agent, Banks and Borrowers.
5. This Amendment shall be considered an integral part of the
Credit Agreement, and all references to the Credit Agreement
in the Credit Agreement itself or any document referring
thereto shall, on and after the date of execution of this
Amendment, be deemed by this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the date first above written.
ROBBINS & MYERS, INC.
By:
-------------------------
Its
-------------------------
CHEMINEER, INC.
By:
-------------------------
Its
-------------------------
PFAUDLER, INC.,
(formerly Pfaudler United
States, Inc.)
By:
-------------------------
16
<PAGE> 6
Its
-------------------------
EDLON, INC. (formerly Edlon
Products, Inc.)
By:
-------------------------
Its
-------------------------
BANK ONE, DAYTON, NA, as
Agent
By:
-------------------------
Its
-------------------------
NATIONAL CITY BANK,
COLUMBUS
By:
-------------------------
Its
-------------------------
BANK ONE, DAYTON, NA as a
Bank
By:
-------------------------
Its
-------------------------
17
<PAGE> 7
AMENDMENT NO. 7 TO CREDIT AGREEMENT
THIS AMENDMENT NO 7 ("Amendment") is made as of April 16, 1996 by and
among ROBBINS & MYERS, INC. and its subsidiaries listed on the signature pages
hereto ("Borrowers"), BANK ONE, DAYTON, NA and NATIONAL CITY BANK, COLUMBUS, as
Banks ("Banks"), and BANK ONE, DAYTON, NA, as agent for Banks ("Agent"), under
the following circumstances:
A. Borrowers, Banks and Agent entered into a Credit Agreement
dated as of June 24, 1994, as subsequently amended by
Amendments No. 1 through 6 (as so amended, the "Credit
Agreement").
B. Borrowers, Bank and Agent now desire to further amend the
Credit Agreement in certain respects.
NOW THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
A. CAPITALIZED TERMS. Capitalized terms used and not otherwise defined
herein are used with the meaning set forth in the Credit Agreement.
B. AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT. Section 2.1(b) of
the Credit Agreement hereby is amended in its entirety to read as follows:
<TABLE>
<CAPTION>
Bank Commitment Pro Rata Share
---- ---------- --------------
<S> <C> <C>
Bank One, Dayton, NA $38,135,000 58%
National City Bank, Columbus $27,615,000 42%
Total Revolving Credit $65,750,000 100%
Commitment
</TABLE>
The total Revolving Credit Commitment shall be reduced to the amounts
hereinafter set forth on the dates indicated:
<TABLE>
<CAPTION>
Total Revolving Credit
Date of Reduction Commitment after Reduction
----------------- --------------------------
<S> <C>
September 1, 1997 $59,250,000
March 1, 1998 $41,000,000
March 1, 1999 $36,000,000
March 1, 2000 $35,000,000
</TABLE>
C. DEFERRAL OF PRINCIPAL PAYMENTS ON THE TERM NOTES. Notwithstanding the
provisions of Section 3.1 of the Credit Agreement, no installment of principal
shall be due and payable with respect to the Term Notes during the period from
May 31, 1996 through August 31, 1997. On September 1, 1997, Borrowers shall
make a principal payment with respect to the Term Notes in the aggregate amount
of $5,250,000, and thereafter principal payments again
-18-
<PAGE> 8
shall be due and payable with respect to the Term Notes in accordance with the
schedule set forth in Section 3.1 of the Credit Agreement.
E. AMENDMENT TO SECTION 8.5 OF THE CREDIT AGREEMENT. Section 8.5 of the
Credit Agreement hereby is amended in its entirety to read as follows:
"8.5 CONTINGENT LIABILITIES. No Borrower shall assume, guarantee,
indorse contingently agree to purchase or otherwise become liable upon
the obligation of any other Person except another Borrower (the
foregoing being "Contingent Liabilities"), or permit any Subsidiary so
to do, except by the indorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business and except for such Contingent Liabilities as would
constitute an Investment permitted under Section 8.9."
F. AMENDMENT TO SECTION 8.9 OF THE CREDIT AGREEMENT. Section 8.9 of the
Credit Agreement hereby is amended to add the following new subparagraph (f)
and to reletter existing subparagraphs (f) and (g) as (g) and (h),
respectively:
"(f) Investments which are Contingent Liabilities incurred for the
benefit of one or more Subsidiaries in a maximum amount not to exceed
$5,000,000 in the aggregate."
G. RELEASE OF SECURITY INTEREST. Bank's security interest in the assets
of Borrowers shall cease and terminate at such time as (a) no Default or Event
of Default exists, and (b) Borrowers furnish to Banks financial statements and
the accompanying certificate pursuant to Section 7.7 of the Credit Agreement
showing that, as of the end of the period covered by such financial statements,
all of the following were satisfied:
(i) the Interest Coverage Ratio was greater than 4.75:1;
(ii) the Funded Indebtedness Ratio was less than .45:1; and
(iii) the Tangible Capital Base was greater than $60,000,000.
H. FEE FOR INCREASE IN TOTAL REVOLVING CREDIT COMMITMENT. At the closing
of this Amendment, Borrowers shall pay to Agent for the pro rata accounts of
the Banks (based upon each Bank's Pro Rata Share) a non-refundable fee of
$14,688 (.125% of the amount of the increase in the Total Revolving Credit
Commitment effected by this Amendment).
I. OTHER FEES AND EXPENSES RELATING TO AMENDMENT TO CREDIT AGREEMENT.
Borrowers shall pay all fees and expenses of Agent and Banks, including the
fees and expenses of counsel to the Agent and each Bank relating to the
preparation of and closing upon this Amendment to Credit Agreement.
J. CONDITIONS FOR CLOSING. The Bank's obligation to execute and close
upon this Amendment shall be contingent upon delivery of the following in form
and substance
-19-
<PAGE> 9
satisfactory to the Agent:
(i) Amended Substitute Revolving Credit Notes payable to
the respective Banks in the form attached to this
Amendment; and
(ii) Certified copy of corporate resolution(s) of Robbins
& Myers, Inc. authorizing the Borrowers to enter
into this Amendment.
K. REPRESENTATION AND WARRANTY. In order to induce the Banks to enter
into this Amendment No. 7, the Borrowers hereby represent and warrant that: (i)
they are in full compliance with all of their duties and obligations under the
Credit Agreement as amended hereby; (ii) all of the representations and
warranties contained in Sections 6.6, 6.9 and 6.21 of the Credit Agreement are
true and correct as of the date of this Amendment; and (iii) all information
furnished to the Banks in writing in connection with this Amendment is true and
correct as of the date of this Amendment.
L. FURTHER AGREEMENTS.
1. The execution and delivery of this Amendment is not intended
to discharge any obligation of the Borrowers due to the banks
under the Credit Agreement.
2. There is no novation by the execution and delivery of this
Amendment.
3. All the terms and conditions contained in the Credit
Agreement and all documents executed in accordance therewith,
except as expressly modified herein, shall continue unchanged
and remain in full force and effect.
4. This Amendment shall become effective when it has been
executed by the Agent, Banks and Borrowers.
5. This Amendment shall be considered an integral part of the
Credit Agreement, and all references to the Credit Agreement
in the Credit Agreement itself or any document referring
thereto shall, on and after the date of execution of this
Amendment, be deemed by this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the date first above written.
ROBBINS & MYERS, INC.
By:
-------------------------
Its
-------------------------
-20-
<PAGE> 10
CHEMINEER, INC.
By:
-------------------------
Its
-------------------------
PFAUDLER, INC.,
(formerly Pfaudler United
States, Inc.)
By:
-------------------------
Its
-------------------------
EDLON, INC. (formerly Edlon
Products, Inc.)
By:
-------------------------
Its
-------------------------
BANK ONE, DAYTON, NA, as Agent
By:
-------------------------
Its
-------------------------
NATIONAL CITY BANK, COLUMBUS
By:
-------------------------
Its
-------------------------
BANK ONE, DAYTON, NA as a Bank
By:
-------------------------
Its
-------------------------
-21-
<PAGE> 11
AMENDED SUBSTITUTE
REVOLVING CREDIT NOTE
$38,135,000 Dayton, Ohio
April 3, 1996
FOR VALUE RECEIVED, ROBBINS & MYERS, INC., CHEMINEER, INC., PFAUDLER
(UNITED STATES), INC. AND EDLON PRODUCTS, INC. ( the "Borrowers"), jointly and
severally promise to pay to the order of BANK ONE, DAYTON, NA ("Bank") in
lawful money of the United States of America, the principal sum of THIRTY-EIGHT
MILLION ONE HUNDRED THIRTY-FIVE THOUSAND AND NO/100 Dollars ($38,135,000) or
such lesser unpaid principal amount as may be advanced by the Bank pursuant to
the terms of the Credit Agreement and dated as of June 24, 1994, by and among
Borrowers, Bank One, Dayton, NA as Agent, and Bank One Dayton, NA and National
City Bank, Columbus as Banks, as the same may be amended from time to time
(the "Agreement"). The principal balance hereof outstanding from time to time
shall bear interest as set forth in the Agreement.
The principal amount of each loan made by Bank and the amount of each
prepayment made by the Borrowers shall be recorded by Bank on the schedule
attached hereto or in the regularly maintained data processing records of Bank.
The aggregate unpaid principal amount of all loans set forth in such schedule
or in such records shall be presumptive evidence of the principal amount owing
and unpaid on this Note. However, failure by Bank to make any such entry shall
not limit or otherwise affect Borrowers' obligations under this Note or the
Agreement.
This Note is the Revolving Credit Note referred to in the Agreement,
and is entitled to the benefits, and is subject to the terms, of the Agreement.
The principal of this Note is prepayable in the amounts and under the
circumstances, and its maturity is subject to acceleration upon the terms, set
forth in the Agreement. Except as otherwise expressly provided in the
Agreement, if any payment on this Note becomes due and payable on a day other
than one on which Bank is open for business (a "Business Day"), the maturity
thereof shall be extended to the next Business Day, and interest shall be
payable at the rate specified herein during such extension period.
In no event shall the interest rate on this Note exceed the highest
rate permissible under any law which a court of competent jurisdiction shall,
in a final determination, deem applicable hereto. In the event that a court
determines that Bank has received interest and other charges under this Note in
excess of the highest permissible rate applicable hereto, such excess shall be
deemed received on account of, and shall automatically be applied to reduce the
amounts due to Bank from the Borrowers under this Note, other than interest,
and the provisions hereof shall be deemed amended to provide for the highest
permissible rate. If there are not such amounts outstanding, Bank shall refund
to Borrowers such excess.
Presentment for payment, demand, notice of dishonor, protest, notice
of protest and all other demands and notices in connection with the delivery,
performance and enforcement of this Note, are hereby waived by Borrowers.
<PAGE> 12
Payments are to be made by noon on the due date at the office of Bank
One, Dayton, NA, Kettering Tower, P.O. Box 1103, Dayton, OH 45403-1103. All
payments are to be made in immediately available funds by electronic debit
against Borrowers' designated account at said bank.
This Note is being delivered in, is intended to be performed in, shall
be construed and enforceable in accordance with, and be governed by the
internal laws of, the State of Ohio without regard to principles of conflict of
laws. Each Borrower agrees that the State and federal courts in Montgomery
County, Ohio or any other court in which Agent initiates proceedings have
exclusive jurisdiction over all matters arising out of this Note, and that
service of process in any such proceeding shall be effective if mailed to
Borrowers at the address described in the Notices section of the Agreement.
EACH BORROWER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING
OUT OF THIS NOTE.
This Note may not be changed orally, but only by an instrument in
writing.
ROBBINS & MYERS, INC.
By:
-------------------------
Its:
-------------------------
CHEMINEER, INC.
By:
-------------------------
Its:
-------------------------
PFAUDLER, INC.
(formerly Pfaudler (United States),
Inc.)
By:
-------------------------
Its:
-------------------------
EDLON PRODUCTS, INC.
By:
-------------------------
Its:
-------------------------
-2-
<PAGE> 13
AMENDED SUBSTITUTE
REVOLVING CREDIT NOTE
---------------------
$27,615,000 Dayton, Ohio
April 3, 1996
FOR VALUE RECEIVED, ROBBINS & MYERS, INC., CHEMINEER, INC., PFAUDLER
(UNITED STATES), INC. AND EDLON PRODUCTS, INC. ( the "Borrowers"), jointly and
severally promise to pay to the order of NATIONAL CITY BANK, COLUMBUS ("Bank")
in lawful money of the United States of America, the principal sum of
TWENTY-SEVEN MILLION SIX HUNDRED FIFTEEN THOUSAND AND NO/100 Dollars
($27,615,000) or such lesser unpaid principal amount as may be advanced by the
Bank pursuant to the terms of the Credit Agreement and dated as of June 24,
1994, by and among Borrowers, Bank One, Dayton, NA as Agent, and Bank One
Dayton, NA and National City Bank, Columbus as Banks, as the same may be
amended from time to time (the "Agreement"). The principal balance hereof
outstanding from time to time shall bear interest as set forth in the Agreement.
The principal amount of each loan made by Bank and the amount of each
prepayment made by the Borrowers shall be recorded by Bank on the schedule
attached hereto or in the regularly maintained data processing records of Bank.
The aggregate unpaid principal amount of all loans set forth in such schedule
or in such records shall be presumptive evidence of the principal amount owing
and unpaid on this Note. However, failure by Bank to make any such entry shall
not limit or otherwise affect Borrowers' obligations under this Note or the
Agreement.
This Note is the Revolving Credit Note referred to in the Agreement,
and is entitled to the benefits, and is subject to the terms, of the Agreement.
The principal of this Note is prepayable in the amounts and under the
circumstances, and its maturity is subject to acceleration upon the terms, set
forth in the Agreement. Except as otherwise expressly provided in the
Agreement, if any payment on this Note becomes due and payable on a day other
than one on which Bank is open for business (a "Business Day"), the maturity
thereof shall be extended to the next Business Day, and interest shall be
payable at the rate specified herein during such extension period.
In no event shall the interest rate on this Note exceed the highest
rate permissible under any law which a court of competent jurisdiction shall,
in a final determination, deem applicable hereto. In the event that a court
determines that Bank has received interest and other charges under this Note in
excess of the highest permissible rate applicable hereto, such excess shall be
deemed received on account of, and shall automatically be applied to reduce the
amounts due to Bank from the Borrowers under this Note, other than interest,
and the provisions hereof shall be deemed amended to provide for the highest
permissible rate. If there are not such amounts outstanding, Bank shall refund
to Borrowers such excess.
Presentment for payment, demand, notice of dishonor, protest, notice
of protest and all other demands and notices in connection with the delivery,
performance and enforcement of this Note, are hereby waived by Borrowers.
<PAGE> 14
Payments are to be made by noon on the due date at the office of Bank
One, Dayton, NA, Kettering Tower, P.O. Box 1103, Dayton, OH 45403-1103. All
payments are to be made in immediately available funds by electronic debit
against Borrowers' designated account at said bank.
This Note is being delivered in, is intended to be performed in, shall
be construed and enforceable in accordance with, and be governed by the
internal laws of, the State of Ohio without regard to principles of conflict of
laws. Each Borrower agrees that the State and federal courts in Montgomery
County, Ohio or any other court in which Agent initiates proceedings have
exclusive jurisdiction over all matters arising out of this Note, and that
service of process in any such proceeding shall be effective if mailed to
Borrowers at the address described in the Notices section of the Agreement.
EACH BORROWER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING
OUT OF THIS NOTE.
This Note may not be changed orally, but only by an instrument in
writing.
ROBBINS & MYERS, INC.
By:
----------------------
Its:
----------------------
CHEMINEER, INC.
By:
----------------------
Its:
----------------------
PFAUDLER, INC.
(formerly Pfaudler (United States),
Inc.
By:
----------------------
Its:
----------------------
EDLON PRODUCTS, INC.
By:
----------------------
Its:
----------------------
dan2730.skc
-2-
<PAGE> 1
ROBBINS & MYERS, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11.1
(In thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- -------------------------------
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
---------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Net income before extraordinary
item $5,735 $2,256 $14,162 $8,259
Net income $5,735 $3,588 $14,162 $9,591
Primary earnings per share:
Average shares outstanding 5,230 5,170 5,224 5,161
Effect of dilutive options and
restricted stock based on
treasury stock method using
average market price 284 185 264 144
---------------- -------------- -------------- -------------
Total 5,513 5,355 5,488 5,305
================ ============== ============== =============
Earnings per share before
extraordinary item $1.04 $0.42 $2.58 $1.56
================ ============== ============== =============
Earnings per share $1.04 $0.67 $2.58 $1.81
================ ============== ============== =============
Fully diluted earnings per share:
Average shares outstanding 5,230 5,170 5,224 5,161
Effect of dilutive options and
restricted stock based on
treasury stock method using
average market price 316 196 318 197
---------------- -------------- -------------- -------------
Total 5,546 5,366 5,542 5,358
================ ============== ============== =============
Earnings per share before
extraordinary item $1.03 $0.42 $2.56 $1.54
================ ============== ============== =============
Net income per share $1.03 $0.67 $2.56 $1.79
================ ============== ============== =============
</TABLE>
-3-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> MAR-01-1996
<PERIOD-END> MAY-31-1996
<CASH> 8,836
<SECURITIES> 0
<RECEIVABLES> 51,811
<ALLOWANCES> 0
<INVENTORY> 46,824
<CURRENT-ASSETS> 114,999
<PP&E> 105,623
<DEPRECIATION> 39,363
<TOTAL-ASSETS> 295,417
<CURRENT-LIABILITIES> 71,345
<BONDS> 79,285
<COMMON> 22,213
0
0
<OTHER-SE> 61,775
<TOTAL-LIABILITY-AND-EQUITY> 295,417
<SALES> 255,272
<TOTAL-REVENUES> 255,272
<CGS> 170,336
<TOTAL-COSTS> 228,516
<OTHER-EXPENSES> (1,027)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,304
<INCOME-PRETAX> 22,479
<INCOME-TAX> 8,317
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,162
<EPS-PRIMARY> 2.58
<EPS-DILUTED> 2.56
</TABLE>
