Robbins & Myers Inc. Reports Operating Results (10-Q)
Robbins & Myers Inc. has a market cap of $1.17 billion; its shares were traded at around $35.53 with a P/E ratio of 33.2 and P/S ratio of 2. The dividend yield of Robbins & Myers Inc. stocks is 0.5%. Robbins & Myers Inc. had an annual average earning growth of 4% over the past 10 years.RBN is in the portfolios of John Keeley of Keeley Fund Management, John Buckingham of Al Frank Asset Management, Inc., Mario Gabelli of GAMCO Investors, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates.
Highlight of Business Operations:On October 6, 2010, we announced an agreement to acquire T-3, a provider of oilfield and pipeline products and services, in a transaction valued at approximately $422 million as of the date of the announcement, net of cash assumed. Under the terms of the merger agreement, for each share of T-3 common stock, T-3 stockholders will receive 0.894 of our common shares plus $7.95 in cash without interest. Accordingly, T-3 stockholders are estimated to receive an aggregate of approximately 12 million of our common shares and $106 million in cash, which we expect to pay from our available cash resources. Upon closing of the transaction, we expect T-3 stockholders to own approximately 27% of our outstanding common shares.
The Fluid Management segment had sales of $91.3 million in the first quarter of fiscal 2011 compared with $68.2 million in the first quarter of fiscal 2010. The increase was primarily due to higher customer demand in the first quarter of fiscal 2011 over the comparable period in the prior year, resulting from higher oil prices worldwide, an increased demand for horizontal drilling rigs used in North American shale formations and higher general industrial and specialty chemical activity. Orders for this segment were impacted by the same factors and were $102.2 million in the first quarter of fiscal 2011 compared with $68.1 million in the first quarter of fiscal 2010. Ending backlog at November 30, 2010 of $68.3 million was 18% higher than at the end of the prior year.
The Process Solutions segment had sales of $49.4 million in the first quarter of fiscal 2011, compared with $43.5 million in the first quarter of fiscal 2010, an increase of 14%. Segment orders improved from the first quarter of fiscal 2010 levels to $54.0 million in the first quarter of fiscal 2011, reflecting improved market conditions in certain end markets we serve, an increase of $12.1 million, or 29% from the prior year period. Demand in our European chemical capital goods end markets remained weak, while demand in our other markets was favorable. Ending backlog at November 30, 2010 of $85.2 million was 8% higher than at the end of the prior year.
The Romaco segment, which is primarily a European-based business, had sales of $23.2 million in the first quarter of fiscal 2011 compared with $17.7 million in the comparable period of the prior year. Excluding the impact of currency translation, sales increased by $6.2 million or 35%. Orders for the first quarter of fiscal 2011 were $33.5 million compared with $27.1 million in the comparable period in the prior year. Adjusting for changes in currency exchange rates, orders increased 27%, or $7.2 million, from the same period in the prior year. We believe this increase is an outcome of the global economic recovery combined with our increased focus on market opportunities and product innovation. Ending backlog at November 30, 2010 of $50.0 million was 31% higher than at the end of the prior year.
The Fluid Management segment had EBIT of $28.2 million in the first quarter of fiscal 2011 as compared with $16.7 million in the first quarter of fiscal 2010, an increase of $11.4 million, or 68%. This increase in fiscal 2011 is primarily due to the higher sales volume described above and a favorable product mix.
Our Bank Credit Agreement (Agreement) provides that we may borrow on a revolving credit basis up to a maximum of $150.0 million and includes a $100.0 million expansion feature. All outstanding amounts under the Agreement are due and payable on December 19, 2011. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the Agreement, at our option, and is payable quarterly. Indebtedness under the Agreement and the Senior Notes is unsecured, except for the pledge of the stock of our U.S. subsidiaries and approximately two-thirds of the stock of certain non-U.S. subsidiaries. While no amounts are outstanding under the Agreement at November 30, 2010, we have $33.8 million of standby letters of credit outstanding at November 30, 2010. These standby letters of credit are used as security for advance payments received from customers, and for future payments to our vendors and reduce the amount we may borrow under the Agreement. Accordingly, under the Agreement we have $116.2 million of unused borrowing capacity.
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