<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 FEBRUARY, 28 1997 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
- --------------------------------------------------------------------------------
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 February 28, 1997:
10,884,457
- ----------
1
<PAGE> 2
<TABLE>
<CAPTION>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
($ in thousands) February 28, August 31,
1997 1996
--------------- --------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $9,901 $7,121
Accounts receivable, net 59,146 51,158
Inventories:
Finished products 10,418 12,424
Work in process 17,921 18,249
Raw materials 17,623 17,744
--------------- --------------
45,962 48,417
Deferred taxes 5,374 5,180
Other current assets 3,777 2,184
--------------- --------------
Total Current Assets 124,160 114,060
Goodwill 103,432 95,101
Other Intangible Assets 19,374 13,068
Deferred Taxes 1,800 2,101
Other Assets 4,125 3,896
Property, Plant and Equipment 122,291 112,661
Less accumulated depreciation 46,219 40,547
--------------- --------------
76,072 72,114
--------------- --------------
$328,963 $300,340
=============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $21,178 $25,478
Accrued expenses 46,195 49,614
Current portion long-term debt 1,348 1,348
--------------- --------------
Total Current Liabilities 68,721 76,440
Long-Term Debt 91,409 72,185
Other Long-Term Liabilities 57,915 60,278
Shareholders' Equity:
Common stock without par value:
Authorized shares--25,000,000
Issued shares--11,028,717 (10,868,002 at August 31,1996) 28,921 26,617
Treasury shares--144,260 (270,610 at August 31,1996) (153) (2,481)
Retained earnings 78,806 66,996
Equity adjustment for foreign currency translation 3,694 655
Equity adjustment to recognize minimum pension liability (350) (350)
--------------- --------------
110,918 91,437
--------------- --------------
$328,963 $300,340
=============== ==============
</TABLE>
See Notes to Consolidated Condensed Financial Statements
2
<PAGE> 3
<TABLE>
<CAPTION>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENT
(in thousands except per share data)
(Unaudited) Three Months Ended Six Months Ended
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $93,208 $84,179 $187,030 $165,391
Cost of sales 61,000 56,413 122,674 110,523
-------------- --------------- -------------- --------------
Gross profit 32,208 27,766 64,356 54,868
Operating expenses 21,912 19,545 43,155 38,681
Other (income) expense (588) (390) (940) (758)
-------------- --------------- -------------- --------------
Operating income 10,884 8,611 22,141 16,945
Interest expense 1,458 1,899 2,988 3,569
-------------- --------------- -------------- --------------
Income before income taxes 9,426 6,712 19,153 13,376
Income taxes 3,111 2,383 6,321 4,949
-------------- --------------- -------------- --------------
Net income $6,315 $4,329 $12,832 $8,427
============== =============== ============== ==============
Income per share:
Primary $0.56 $0.40 $1.14 $0.77
============== =============== ============== ==============
Assuming full dilution $0.51 $0.39 $1.04 $0.76
============== =============== ============== ==============
Weighted average common shares outstanding:
Primary 11,206 10,930 11,211 10,938
============== =============== ============== ==============
Assuming full dilution 13,655 10,956 13,484 10,964
============== =============== ============== ==============
Dividends per share:
Declared $0.05000 $0.04375 $0.09375 $0.08125
============== =============== ============== ==============
Paid $0.05000 $0.04375 $0.09375 $0.08125
============== =============== ============== ==============
</TABLE>
See Notes to Consolidated Condensed Financial Statements
3
<PAGE> 4
<TABLE>
<CAPTION>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(In thousands) Six Months Ended
(Unaudited)
February 28, February 29,
1997 1996
-------------- --------------
<S> <C> <C>
Operating Activities
Net income $12,832 $8,427
Equity adjustment for foreign currency translation 59 (833)
Adjustment required to reconcile net income
to net cash and cash equivalents provided by operating activities:
Depreciation 5,456 4,919
Amortization 2,077 2,123
Deferred taxes 107 (564)
Equity income on unconsolidated investments (839) (977)
Other 650 436
Changes in operating assets and liabilities:
Accounts receivable, less allowances (7,275) (7,913)
Inventories 2,821 (2,970)
Prepaid expenses and other assets (1,586) 1,392
Accounts payable (4,544) (1,231)
Accrued expenses (2,853) (208)
Other long-term liabilities 937 830
-------------- --------------
Net Cash and Cash Equivalents Provided by Operating Activities 7,842 3,431
Investing Activities:
Acquisition of Process Supply, Inc., Spectrum Products, Inc., and Greerco (7,800) 0
Capital expenditures, net of nominal disposals (9,016) (6,921)
-------------- --------------
Net Cash and Cash Equivalents Used by Investing Activities (16,816) (6,921)
-------------- --------------
Financing Activities:
Proceeds of convertible debt issuance, net of underwriters' discount 62,950 0
Proceeds from revolving line of credit 40,124 42,669
Payments of long-term debt (85,900) (23,294)
Proceeds from sale of common stock 1,185 575
Purchase of treasury shares, used for a portion of acquisition cost (3,660) 0
Debt issuance and organization costs incurred (1,923) 0
Retirement of stock appreciation rights and associated fees 0 (18,574)
Dividends paid (1,022) (856)
-------------- --------------
Net Cash and Cash Equivalents Provided by Financing Activities 11,754 520
-------------- --------------
Increase(Decrease) in Cash and Cash Equivalents 2,780 (2,970)
Cash and Cash Equivalents at Beginning of Period 7,121 10,210
-------------- --------------
Cash and Cash Equivalents at End of Period $9,901 $7,240
============== ==============
</TABLE>
See Notes to Consolidated Condensed Financial Statements
4
<PAGE> 5
ROBBINS & MYERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
February 28, 1997
(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
February 28, 1997, and August 31, 1996 and the results of their operations for
the three month and six month periods ended February 28, 1997, and February 29,
1996, and their cash flows for the six month periods ended February 28, 1997,
and February 29, 1996. 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--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%. 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 February 28, 1997:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Senior debt:
Facility A $24,000
Senior subordinated debt 3,757
6 1/2% Convertible Subordinated Notes 65,000
-----------------
Total debt 92,757
Less current portion 1,348
-----------------
Long-term debt $91,409
=================
</TABLE>
NOTE C--INCOME TAXES
The estimated annual effective tax rates are 33.0% and 37.0% for 1997 and 1996,
respectively. In 1996, the estimated effective tax rate was decreased from the
38.5% rate used in the first quarter, primarily due to the decrease in statutory
rates in Brazil.
5
<PAGE> 6
ROBBINS & MYERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--continued
February 28, 1997
(Unaudited)
NOTE D--BUSINESS ACQUISITIONS
The Company acquired on February 3, 1997, Process Supply , Inc., a manufacturer
of flouropolymer products and accessories for glass-lined equipment, and
Spectrum Products, Inc., an affiliated sales company, and on January 31, 1997,
the high shear industrial mixer business of Greerco Corp. These businesses were
purchased for a total of $18,557,000. The purchase price consisted of common
stock, valued at $6,457,000, obligations directly payable to the seller of
$3,500,000, long-term debt assumed of $800,000 and cash, borrowed from the
Company's existing debt agreement, of $7,800,000. The common stock was issued
from treasury shares.
NOTE E--INCOME PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings Per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute income per share and to restate all prior periods. Under the new
requirements primary income per share will be replaced with basic income per
share. Basic income per share excludes the dilutive effect of stock options.
Under the provisions of the new standard, basic income per share would be $0.59
and $0.41 for the three months ended February 28, 1997 and February 29, 1996,
respectively. On a year to date basis, basic income per share would be $1.20 and
$0.81 for 1997 and 1996, respectively.
6
<PAGE> 7
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 quarter and year to date periods of 1997 and
1996, respectively.
<TABLE>
<CAPTION>
Three months Ended Six months Ended
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
--------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 65.4 67.0 65.6 66.8
--------------- --------------- ---------------- ---------------
Gross profit 34.6 33.0 34.4 33.2
Operating expenses 23.5 23.2 23.1 23.4
Other (income) expense (0.6) (0.5) (0.5) (0.4)
--------------- --------------- ---------------- ---------------
Operating income 11.7 10.3 11.8 10.2
Interest expense 1.6 2.3 1.6 2.1
--------------- --------------- ---------------- ---------------
Income before income taxes 10.1 8.0 10.2 8.1
Income taxes 3.3 2.9 3.4 3.0
--------------- --------------- ---------------- ---------------
Net income 6.8 % 5.1 % 6.8 % 5.1 %
=============== =============== ================ ===============
</TABLE>
Net sales for the second quarter of fiscal 1997 were $93.2 million
compared to $84.2 million, an increase of 10.7% over the same period of the
prior year. Year to date sales of $187.0 million were 13.1% higher than the
prior year. These increases were realized by all of the Company's products.
Company backlog at the end of the second quarter of 1997 is $112.4 million, up
from $104.8 million at the end of the first quarter and $111.6 million for the
same period of the prior year. The increase in backlog from the prior quarter is
a result of strong order activity as well as the acquisition of Process Supply
Inc., Spectrum Products, Inc., and Greerco businesses.
The gross profit percentage increased by 1.6 and 1.2 percentage points
for the quarter and year to date, respectively. These increases are due to
higher sales volume and the continuation of cost reduction programs implemented
by the Company.
Operating expenses have remained relatively consistent, ranging from
23.1% to 23.5% for the periods presented. This relationship is the result of
the benefits of additional volume being offset by the start-up costs of the
Moyno Oilfield Products unit's new manufacturing plant in Houston, Texas and the
establishment of direct marketing efforts to the Canadian oilfield services
industry.
Interest expense decreased to $1.5 million in the second quarter of
fiscal 1997 from $1.9 million in the second quarter of fiscal 1996. Year to date
interest expense has also decreased to $3.0 million from $3.6 million in the
same period of the prior year. These decreases are due to the lower interest
rates, by approximately 1%, associated with the $65 million of convertible
subordinated notes issued in September and the new senior debt agreement entered
into in November of the first quarter of fiscal 1997.
The effective tax rate has decreased to 33.0% in fiscal 1997 from
37.0% in fiscal 1996. 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. In the second quarter of 1996 the estimated
effective tax rate was decreased from 38.5% to 37.0% due to the decrease in the
statutory rates in Brazil.
Net income increased to $6.3 million, $.51 per share, fully diluted, in
the second quarter of fiscal 1997 from $4.3 million, $.39 per share, fully
diluted, in the second quarter of fiscal 1996. Year to date net income increased
to
7
<PAGE> 8
Part I--Management's Discussion and Analysis of Financial Condition and Results
of Operations--continued
RESULTS OF OPERATIONS--CONTINUED
$12.8 million, $1.04 per share, fully diluted, from $8.4 million, $.76, fully
diluted. The prior year's fully diluted income per share for the quarter and
year to date periods are $.38 and $.74, respectively, on a pro-forma basis for
the convertible notes. These increases are a result of the higher sales volume,
lower interest rates and a lower effective tax rate in fiscal 1997.
LIQUIDITY AND CAPITAL RESOURCES
Significant cash uses in the first six months of 1997 were $8.8 million
for acquisitions, $3.7 million for the purchase of treasury stock, which was
used for a portion of the cost of the acquisitions, and $9.0 million for
capital expenditures. Cash uses were primarily funded by net debt borrowings of
$17.2 million and cash provided by operations.
Significant cash uses in the first six months of 1996 were $6.9 million
for capital expenditures and $18.6 million for the retirement of stock
appreciation rights. Cash uses were primarily funded by net debt borrowings of
$19.4 million, cash provided by operations and a reduction of cash balances.
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 $15.0
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 second quarter
and year to date periods of fiscal 1997 and 1996.
At February 28, 1997, the Company had approximately $110.0 million
available under its current bank credit agreements which management believes is
adequate to meet its needs, including any potential 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.
8
<PAGE> 9
PART II--OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES OR RIGHTS OF HOLDERS THEREOF
On February 3, 1997, 238,000 shares of the Company's common
stock were issued in conjunction with the merger of Process Supply, Inc., into a
subsidiary of the Company pursuant to the Agreement and Plan of Merger among
Robbins & Myers, Inc., Edlon, Inc., Process Supply, Inc., and the stockholder of
Process Supply, Inc. Such shares were not registered under the Securities Act of
1933, but were issued in reliance on the exemption from registration at Section
4(2) of such Act.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) The annual meeting of Shareholders of Robbins & Myers, Inc.
(The "Company") was held on December 11, 1996.
b) The Company's Board of Directors is divided into two classes,
with one class of directors elected at each annual meeting of
shareholders. At the Annual Meeting on December 11, 1996, the
following persons were elected directors of the Company for a
term of office expiring at the annual meeting of shareholders
to be held in 1998: Daniel W. Duval, Thomas P. Loftis and
Jerome F. Tatar. The other directors whose terms of office
continued after the Annual Meeting are Robert J. Kegerreis,
Ph.D., Maynard H. Murch IV, John N. Taylor, Jr., and William
D. Manning, Jr.
c) At the Annual Meeting on December 11, 1996, four items were
voted on by shareholders, namely:
1) The election of directors in which, as noted
above, Messrs. Duval, Loftis and Tatar
were elected directors of the Company, as
follows:
<TABLE>
<CAPTION>
Votes For Votes Withheld
<S> <C> <C>
Daniel W. Duval 9,534,791 39,758
Thomas P. Loftis 9,536,864 32,685
Jerome F. Tatar 9,536,975 32,574
</TABLE>
2) Adoption of the Senior Executive Annual Cash
Bonus Plan was approved with 9,144,813 cast
for approval, 194,129 against approval and
59,531 abstentions;
3) Amendment to the Robbins & Myers, Inc., 1994
Long-Term Incentive Stock Plan was approved
with 9,286,517 cast for approval, 197,936
against approval and 54,760 abstentions;
and
4) Appointment of Ernst & Young LLP as
independent auditors of the Company for the
fiscal year ending August 31, 1997 was
approved with 9,508,176 cast for approval,
32,643 against approval and 28,730
abstentions.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) See Index to Exhibits
b) Reports on Form 8-K. During the quarter ended
February 28, 1997, the Company filed one report on
Form 8-K dated February 3, 1997, to announce the
acquisitions of Process Supply, Inc., Spectrum
Products, Inc., and the high shear industrial mixer
business of Greerco Corp.
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.
ROBBINS & MYERS, INC.
-------------------------------
DATE: APRIL 11, 1997 BY /S/ GEORGE M. WALKER
--------------------------- -------------------------------
GEORGE M. WALKER
VICE PRESIDENT & CFO
(PRINCIPAL FINANCIAL OFFICER)
DATE: APRIL 11, 1997 BY /S/ KEVIN J. BROWN
--------------------------- -------------------------------
KEVIN J. BROWN
CORPORATE CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
10
<PAGE> 11
INDEX TO EXHIBITS
-----------------
(11) Statement Re: Computation of Earnings Per Share:
11.1 Computation of Earnings Per Share......*
(27) Financial Data Schedule..................................*
- -----------
"*" Filed herewith
11
<PAGE> 1
<TABLE>
ROBBINS & MYERS, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11.1
(In thousands except per share data)
<CAPTION>
Three Months Ended Six Months Ended
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Primary Income per Share:
Net income $6,315 $4,329 $12,832 $8,427
================ ================ ================ ===============
Average shares outstanding 10,691 10,450 10,688 10,444
Effect of dilutive options and
restricted stock based on treasury
stock method 515 480 523 494
---------------- ---------------- ---------------- ---------------
Total 11,206 10,930 11,211 10,938
================ ================ ================ ===============
Net income per share $0.56 $0.40 $1.14 $0.77
================ ================ ================ ===============
Fully Diluted Income per Share:
Net income $6,315 $4,329 $12,832 $8,427
After tax interest add-back for
convertible debt from issuance 634 0 1,128 0
---------------- ---------------- ---------------- ---------------
Net income attributable to fully
diluted shares $6,949 $4,329 $13,960 $8,427
================ ================ ================ ===============
Average shares outstanding 10,691 10,450 10,688 10,444
Shares issuable upon conversion of
convertible debt, adjusted for
portion of period outstanding 2,385 0 2,084 0
Effect of dilutive options and
restricted stock based on treasury
stock method 579 506 712 520
---------------- ---------------- ---------------- ---------------
Total 13,655 10,956 13,484 10,964
================ ================ ================ ===============
Net income per share $0.51 $0.39 $1.04 $0.76
================ ================ ================ ===============
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 9,901
<SECURITIES> 0
<RECEIVABLES> 60,369
<ALLOWANCES> 1,223
<INVENTORY> 45,962
<CURRENT-ASSETS> 124,160
<PP&E> 122,291
<DEPRECIATION> 46,219
<TOTAL-ASSETS> 328,963
<CURRENT-LIABILITIES> 68,721
<BONDS> 91,409
<COMMON> 28,768
0
0
<OTHER-SE> 82,150
<TOTAL-LIABILITY-AND-EQUITY> 328,963
<SALES> 187,030
<TOTAL-REVENUES> 187,030
<CGS> 122,674
<TOTAL-COSTS> 122,674
<OTHER-EXPENSES> 42,215
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,988
<INCOME-PRETAX> 19,153
<INCOME-TAX> 6,321
<INCOME-CONTINUING> 12,832
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,832
<EPS-PRIMARY> $1.14
<EPS-DILUTED> $1.04
</TABLE>
