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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 NOVEMBER 30, 1996 Commission File Number 0-288
-----------------
ROBBINS & MYERS, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 31-0424220
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 KETTERING TOWER, DAYTON, OHIO 45423
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(Address of Principal executive offices) (Zip Code)
Registrant's telephone number including area code (937) 222-2610
-----------------------------
NONE
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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 NOVEMBER 30, 1996:
10,735,779
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1
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<TABLE>
<CAPTION>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
($ in thousands) November 30, August 31,
1996 1996
------------ ----------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 7,317 $ 7,121
Accounts receivable, net 59,403 51,158
Inventories:
Finished products 12,417 12,424
Work in process 19,452 18,249
Raw materials 14,810 17,744
--------- ---------
46,679 48,417
Deferred taxes 5,380 5,180
Other current assets 2,112 2,184
--------- ---------
Total Current Assets 120,891 114,060
Goodwill 94,475 95,101
Other Intangible Assets 15,401 13,068
Deferred Taxes 1,790 2,101
Other Assets 3,799 3,896
Property, Plant and Equipment 118,062 112,661
Less accumulated depreciation 43,319 40,547
--------- ---------
74,743 72,114
--------- ---------
$ 311,099 $ 300,340
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 22,827 $ 25,478
Accrued expenses 44,190 49,614
Current portion long-term debt 1,348 1,348
--------- ---------
Total Current Liabilities 68,365 76,440
Long-Term Debt 83,961 72,185
Other Long-Term Liabilities 59,564 60,278
Shareholders' Equity:
Common stock without par value:
Authorized shares--25,000,000
Issued shares--10,997,817 (10,868,002 at August 31,1996) 27,120 26,617
Treasury shares--262,038 (270,610 at August 31,1996) (2,421) (2,481)
Retained earnings 73,040 66,996
Equity adjustment for foreign currency translation 1,820 655
Equity adjustment to recognize minimum pension liability (350) (350)
--------- ---------
99,209 91,437
--------- ---------
$ 311,099 $ 300,340
========= =========
<FN>
See Notes to Consolidated Condensed Financial Statements
</TABLE>
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<TABLE>
<CAPTION>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENT
(in thousands except per share data)
(Unaudited) Three Months Ended
-------------------------------
November 30, November 30,
1996 1995
------------ ------------
<S> <C> <C>
Net sales $ 93,822 $ 81,212
Cost of sales 61,674 54,109
-------- --------
Gross profit 32,148 27,103
Operating expenses 21,243 19,136
Other (income) expense (352) (367)
-------- --------
Operating income 11,257 8,334
Interest expense 1,530 1,670
-------- --------
Income before income taxes 9,727 6,664
Income taxes 3,210 2,566
-------- --------
Net income $ 6,517 $ 4,098
======== ========
Income per share:
Primary $ 0.58 $ 0.37
======== ========
Assuming full dilution $ 0.53 $ 0.36
======== ========
Weighted average common shares outstanding:
Primary 11,236 10,948
======== ========
Assuming full dilution 13,151 10,972
======== ========
Dividends per share:
Declared $0.04375 $ 0.0375
======== ========
Paid $0.04375 $ 0.0375
======== ========
<FN>
See Notes to Consolidated Condensed Financial Statements
</TABLE>
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<TABLE>
<CAPTION>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(In thousands) Three Months Ended
(Unaudited) ------------------------------
November 30, November 30,
1996 1995
------------ ------------
<S> <C> <C>
Operating Activities:
Net income $ 6,517 $ 4,098
Equity adjustment for foreign currency translation 180 (676)
Adjustment required to reconcile net income
to net cash and cash equivalents provided (used) by operating activities:
Depreciation 2,787 2,464
Amortization 967 924
Deferred taxes 111 (557)
Equity income on unconsolidated investments (456) (473)
Other 325 140
Changes in operating assets and liabilities:
Accounts receivable, less allowances (7,957) (6,606)
Inventories 2,012 (2,633)
Prepaid expenses 122 672
Other assets 218 411
Accounts payable (2,498) 172
Accrued expenses (5,204) (1,072)
Other long-term liabilities (714) 2,124
-------- --------
Net Cash and Cash Equivalents Used by Operating Activities (3,590) (1,012)
Investing Activities:
Capital expenditures, net of nominal disposals (5,081) (4,147)
Financing Activities:
Proceeds of convertible debt issuance, net of underwriters' discount 62,950 0
Proceeds from revolving line of credit 32,176 30,420
Payments of long-term debt (85,400) (5,920)
Proceeds from sale of common stock 238 649
Debt issuance and organization costs incurred (624) 0
Retirement of appreciation rights and associated fees 0 (18,413)
Dividends paid (473) (395)
-------- --------
Net Cash and Cash Equivalents Provided by Financing Activities 8,867 6,341
-------- --------
Increase in Cash and Cash Equivalents 196 1,182
Cash and Cash Equivalents at Beginning of Period 7,121 10,210
-------- --------
Cash and Cash Equivalents at End of Period $ 7,317 $ 11,392
======== ========
<FN>
See Notes to Consolidated Condensed Financial Statements
</TABLE>
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ROBBINS & MYERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
November 30, 1996
(Unaudited)
NOTE A--PREPARATION OF FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements of Robbins & Myers, Inc. and subsidiaries ("Company")
contain all adjustments, consisting of normally recurring items, necessary to
present fairly the financial condition of the Company and its subsidiaries as of
November 30, 1996, and August 31, 1996 and the results of their operations for
the three month periods ended November 30, 1996, and November 30, 1995, and
their cash flows for the three month periods ended November 30, 1996, and
November 30, 1995. All intercompany transactions have been eliminated.
NOTE B--NET INCOME PER SHARE
Net income per share was calculated as disclosed in Exhibit 11. Weighted average
shares were: primary--11,235,678 and fully diluted--13,150,828.
NOTE C--NOTE C LONG-TERM DEBT
On November 26, 1996, the Company entered into a new $150,000,000 senior
revolving credit agreement ("Agreement"), replacing the previous senior term
loan and revolving credit agreement. Facility A of the Agreement is for
$100,000,000 and any amounts outstanding will be due in November 2001.
Facility B of the Agreement is for $50,000,000 and any borrowings are due
within one year of borrowing, but the due date may be extended with the
approval of the lending institutions. Interest is variable based upon prime or
formulas tied to LIBOR, at the Company's option and is payable at least
quarterly. Except for the pledge of the stock of the Company's U.S.
subsidiaries and the stock of certain of its non U.S. subsidiaries,
indebtedness under the Agreement is unsecured. Indebtedness under the
Agreement is senior to the Company's other long-term agreements. Certain
restrictive covenants exist including, limitations on cash dividends and
capital expenditures and requirements for interest coverage and leverage
ratios.
On September 23, 1996, the Company completed the sale of $65,000,000 of 6 1/2%
Convertible Subordinated Notes Due 2003 ("Notes"). The net proceeds of
approximately $63,000,000 (after underwriters' discount and expenses) were used
to repay term and revolving credit loans under the Company's senior debt
agreements with an average effective interest rate of approximately 8.0%. The
Notes are not common stock equivalents and do not impact primary net income per
share. If the Notes had been issued at the beginning of 1996, the first quarter
of 1996's fully diluted net income per share would have been the same as
reported.
The following summarizes the Company's debt at November 30, 1996:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Senior debt:
Facility A $15,000
Senior subordinated debt 5,309
6 1/2% Convertible Subordinated Notes 65,000
-------
Total debt 85,309
Less current portion 1,348
-------
$83,961
=======
</TABLE>
NOTE C--INCOME TAXES
The estimated annual effective tax rates were 33.0% and 38.5% for the first
quarter of 1996 and 1995,
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respectively.
Part I--Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
The following table presents the components of the Company's income statement as
a percent of net sales for the first quarter of fiscal 1997 and 1996.
<TABLE>
<CAPTION>
Quarter Ended November 30,
1996 1995
----- -----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 65.7 66.6
----- -----
Gross profit 34.3 33.4
Operating expenses 22.7 23.6
Other (income) expense (0.4) (0.5)
----- -----
Operating income 12.0 10.3
Interest expense 1.6 2.1
----- -----
Income before income taxes 10.4 8.2
Income taxes 3.5 3.2
----- -----
Net income 6.9% 5.0%
===== =====
</TABLE>
First quarter of fiscal 1997 and 1996
Net sales for the first quarter of fiscal 1997 were $93.8 million
compared to $81.2 million, an increase of 15.5% over the same period of the
prior year. This increase in sales was primarily driven by the strong market
conditions for the Company's glass-lined storage and reactor vessel products and
oilfield products. These products are primarily sold to the pharmaceuticals,
specialty chemicals, and oil and gas recovery markets, which are expected to
remain strong at least through fiscal 1997. Backlogs remain at strong
levels--$104.8 million at November 30, 1996.
The gross margin percentage increased from 33.4% to 34.3% due to higher
sales volume and the continuation of cost reduction programs implemented by the
Company.
Operating expenses decreased as a percentage of sales from 23.6% to
22.7%. This decrease is the result of the higher sales volume and the fixed
nature of certain of these expenses.
Interest expense decreased from $1.7 million in the first quarter of
fiscal 1996 to $1.5 million in the first quarter of fiscal 1997. This was due to
the lower interest rate, by approximately 1%, associated with the convertible
subordinated notes which were issued in the first quarter of fiscal 1997.
The effective tax rate has decreased from 38.5% in the first quarter of
fiscal 1996 to 33.0 % in the first quarter of fiscal 1997. This decrease is due
to a greater proportion of income before income taxes being generated outside
the U.S. where the effective tax rate is below the U.S. rate.
Net income increased to $6.5 million, $.53 per share, fully diluted, in
the first quarter of fiscal 1997 from $4.1 million, $.36 per share, fully
diluted, in the first quarter of fiscal 1996. The increase is a result of the
higher sales volume, lower interest rates and a lower effective tax rate in
fiscal 1997.
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LIQUIDITY AND CAPITAL RESOURCES
Cash uses in the first quarter of 1997 were $9.7 million and were
funded by net debt borrowings. Primary requirements were working capital and
capital expenditures.
Cash uses in the first quarter of 1996 were $24.5 million and were also
funded by net debt borrowings. Primary requirements in this quarter were working
capital, capital expenditures and $18.4 million in cash required to retire 3.7
million stock appreciation rights.
The Company expects operating cash flow to be adequate for the
remainder of fiscal year 1997's operating needs, including scheduled debt
service and shareholder dividend requirements. Major cash requirements for the
remainder of 1997 are planned capital expenditures of approximately $20.0
million. Capital expenditures are related to additional production capacity,
cost reductions and replacement items.
The Company's significant foreign operations have the local currency as
their functional currency. The non U.S. operations primarily buy and sell within
the same country which mitigates 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.
Currency translation rate changes had an immaterial effect on the first quarter
of fiscal 1997 and 1996.
At November 30, 1996, the Company had approximately $120.0 million
available under its current bank credit agreements which management believes is
adequate to meet its needs, including any acquisitions. The Company's senior
revolving credit agreement includes certain restrictive covenants, including
limitations on cash dividends and capital expenditures and requirements for
interest coverage and leverage ratios.
7
<PAGE> 8
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
11.1 Computation of Earnings Per Share
27 Financial Data Schedule
b) Reports on Form 8-K. During the quarter ended November 30,
1996, the Company did not file any reports on Form 8-K.
8
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SIGNATURES
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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.
ROBBINS & MYERS, INC
--------------------
DATE: January 13, 1997 BY /s/ George M. Walker
---------------------------- ------------------------------------
GEORGE M. WALKER
VICE PRESIDENT & CFO
(PRINCIPAL FINANCIAL OFFICER)
DATE: January 13, 1997 BY /s/ Kevin J. Brown
---------------------------- ------------------------------------
KEVIN J. BROWN
CORPORATE CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
9
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<TABLE>
<CAPTION>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11.1
(In thousands except per share data)
Three Months Ended
-----------------------------
November 30, November 30,
1996 1995
------------ ------------
<S> <C> <C>
Primary Income per Share:
Net income $ 6,517 $ 4,098
======= =======
Average shares outstanding 10,685 10,436
Effect of dilutive options and restricted stock based on
treasury stock method 551 512
------- -------
Total 11,236 10,948
======= =======
Net income per share $ 0.58 $ 0.37
======= =======
Fully Diluted Income per Share:
Net income $ 6,517 $ 4,098
After tax interest add-back for convertible debt from issuance 475 0
------- -------
Net income attributable to fully diluted shares $ 6,992 $ 4,098
======= =======
Average shares outstanding 10,685 10,436
Shares issuable upon conversion of convertible debt, adjusted
for portion of period outstanding 1,782 0
Effect of dilutive options and restricted stock based on
treasury stock method 684 536
------- -------
Total 13,151 10,972
======= =======
Net income per share $ 0.53 $ 0.36
======= =======
</TABLE>
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-1-1996
<PERIOD-END> NOV-30-1996
<CASH> 7,317
<SECURITIES> 0
<RECEIVABLES> 60,644
<ALLOWANCES> 1,241
<INVENTORY> 46,679
<CURRENT-ASSETS> 120,891
<PP&E> 118,063
<DEPRECIATION> 43,319
<TOTAL-ASSETS> 311,099
<CURRENT-LIABILITIES> 68,365
<BONDS> 83,961
<COMMON> 24,699
0
0
<OTHER-SE> 74,510
<TOTAL-LIABILITY-AND-EQUITY> 311,099
<SALES> 93,822
<TOTAL-REVENUES> 93,822
<CGS> 61,674
<TOTAL-COSTS> 61,674
<OTHER-EXPENSES> 20,891
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,530
<INCOME-PRETAX> 9,727
<INCOME-TAX> 3,210
<INCOME-CONTINUING> 6,517
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,517
<EPS-PRIMARY> .58
<EPS-DILUTED> .53
</TABLE>
