Exhibit 99.1
Financial Statements and Supplemental Schedules
Robbins & Myers, Inc. Employee Savings Plan
December 31, 2002 and 2001 and for the year ended December 31, 2002 with Report
of Independent Auditors
Robbins & Myers, Inc. Employee Savings Plan
Financial Statements and Supplemental Schedules
December 31, 2002 and 2001 and
for the year ended December 31, 2002
TABLE OF CONTENTS
Report of Independent Auditors...............................................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits .............................................................2
Statement of Changes in Net Assets Available for Benefits ...................................................3
Notes to Financial Statements................................................................................4
Supplemental Schedules
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)................................................11
Schedule H, Line 4j--Schedule of Reportable Transactions.....................................................12
Report of Independent Auditors
Corporate Benefits Committee
Robbins & Myers, Inc. Employee Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Robbins & Myers, Inc. Employee Savings Plan as of December 31, 2002 and
2001 and related statement of changes in net assets available for benefits for
the year ended December 31, 2002, as listed in the table of contents. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2002 and 2001, and the changes in its net assets available for
benefits for the year ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of December 31, 2002 and reportable transactions for
the year then ended, are presented for purposes of additional analysis and are
not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
May 2, 2003
1
Robbins & Myers, Inc.
Employee Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2002 2001
----------- -----------
ASSETS
Investments at fair value $36,797,100 $43,611,289
Participant loans at estimated fair value 1,182,417 1,137,760
----------- -----------
Total investments 37,979,517 44,749,049
Contributions receivable:
Employer 64,881 51,478
Employee 185,328 179,310
----------- -----------
Total receivables 250,209 230,788
----------- -----------
Net assets available for benefits $38,229,726 $44,979,837
=========== ===========
See accompanying notes.
2
Robbins & Myers, Inc.
Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
ADDITIONS
Employee contributions $ 2,493,281
Employer contributions 881,925
Dividend income - Robbins & Myers, Inc. common stock 54,531
Dividend and interest income 972,856
------------
Total additions 4,402,593
DEDUCTIONS
Benefits paid directly to participants 3,884,513
Net depreciation in fair value of investments 7,268,191
------------
Total deductions 11,152,704
------------
Net decrease (6,750,111)
Net assets available for benefits, at beginning of year 44,979,837
------------
Net assets available for benefits, at end of year $ 38,229,726
============
See accompanying notes.
3
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements
December 31, 2002
1. DESCRIPTION OF THE PLAN
The following description of the Robbins & Myers, Inc. Employee Savings Plan
(the Plan) provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan which covers salaried employees of
Robbins & Myers, Inc. (the Company) and its U.S. subsidiaries. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
CONTRIBUTIONS
Each year, participants can make contributions of between 1 percent and 12
percent of pretax annual compensation, as defined by the Plan. Effective January
1, 2002, the Company contributes 50 percent of an employee's annual
contribution. In prior years, the Company contributed 40 percent of an
employee's annual contribution. In addition, the Company may elect to make an
additional 20 percent contribution at year-end. Only the first 6 percent of an
employee's annual compensation is eligible for the employer's match.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a maximum of the lesser of 50%
of their vested account balance or $50,000 reduced by the outstanding balance of
loans from the Plan on the date the loan is made or by the highest outstanding
loan balance in their account during the prior twelve month period. All loans
must be repaid in level payments on at least a quarterly basis over a five-year
period except if the loan is for the purchase of a primary residence. The loans
are secured by the balance in the participant's account and bear interest at a
rate commensurate with local prevailing rates.
DISTRIBUTIONS
Distributions of vested balances are available upon termination subject to the
approval of the Plan Administrator, retirement after attaining age sixty-five,
death, or permanent and total disability. Distributions are made in either a
lump sum payment or an annuity to designated beneficiaries and joint survivors.
4
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
WITHDRAWALS
Approval of voluntary hardship withdrawals are subject to the determination that
an immediate and substantial financial need exists for medical, educational,
home purchase, or other emergencies which cannot be reasonably satisfied by
other means.
VESTING
Participants are immediately vested in their contributions and any earnings on
these contributions. Effective January 1, 2002, matching contributions made by
the Company become vested as follows:
VESTING
YEARS OF VESTING SERVICE PERCENTAGE
---------------------------------------------------
Less than 1 year 0%
1 year but less than 2 years 34%
2 years but less than 3 years 67%
3 years or more 100%
In 2001, the matching contributions made by the Company became vested as
follows:
VESTING
YEARS OF VESTING SERVICE PERCENTAGE
---------------------------------------------------
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
allocation of (a) the Company's contribution and (b) Plan earnings.
Participant's direct the investment of their contributions and earnings thereon
between the investment options provided by the Plan. Company contributions are
invested in the Company's common stock. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
5
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
ADMINISTRATIVE EXPENSES
Brokerage fees and other direct costs of investment are paid by the fund to
which the costs are attributable. All other expenses are paid by the Company.
PLAN TERMINATION
Although it has not expressed an intent to do so, the Company has the right to
discontinue its contributions at any time and terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, participants will become
100 percent vested in their balances.
PLAN AMENDMENTS
The Company amended the Plan to adopt certain provisions of the "Economic Growth
and Tax Relief Reconciliation Act of 2001" ("EGTRRA"). This amendment is
intended as good faith compliance with the requirements of EGTRRA effective
January 1, 2002.
Effective January 1, 2002, the Company amended the prior year testing method for
ADP and ACP tests to current year basis. The effect is a change of the
limitations on contributions for nondiscrimination testing for participants who
are highly compensated employees for the plan year.
The Company amended certain aspects of the employer matching contributions and
vesting schedule for the employer matching contributions effective January 1,
2002.
Effective November 15, 2002, the Company amended the Plan to define the
definitions of loan rollovers as they apply to the employees of an acquired
business if the acquisition has been determined to be a distributable event and
if the employees of the acquired business have been designated as Employees
under the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Plan's financial statements are prepared on the accrual basis of accounting.
6
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements. Actual results
could differ from those estimates.
VALUATION OF INVESTMENTS
The Plan's investments are stated at fair value. The shares of registered
investment companies are valued at quoted market prices that represent the net
asset values of shares held by the Plan at year-end. The units of the common
collective trust are based on quoted redemption values on the last business day
of the Plan year. Participant loans are valued at their outstanding balances,
which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
3. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated November 4, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Company has
indicated that it will take the necessary steps, if any to maintain the Plan's
qualified status.
7
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
4. INVESTMENTS
The fair value of individual investments that represent 5 percent or more of the
Plan's fair value of assets available for benefits as of December 31 is as
follows:
2002 2001
--------------------------------
Robbins & Myers, Inc. common stock $4,765,246 $5,938,640
The Vanguard Group, Inc.:
Wellington Fund 5,351,369 5,946,701
Windsor Fund 5,457,063 7,500,642
U.S. Growth Fund 2,417,103 4,026,251
Retirement Savings Trust 7,991,598 6,705,504
500 Index Fund 5,361,024 7,246,606
During the year ended December 31, 2002, the Plan's investments (including
investments purchased, sold as well as held during the year) appreciated
(depreciated) in fair value as determined by quoted market price as follows:
NET REALIZED AND
UNREALIZED APPRECIATION
(DEPRECIATION) IN FAIR
VALUE OF INVESTMENTS
--------------------------------
Robbins & Myers, Inc. common stock $(1,137,629)
===========
The Vanguard Group, Inc. (shares of registered
investment companies):
Wellington Fund $ (576,112)
Windsor Fund (1,722,648)
Windsor II Fund (310,936)
U.S. Growth Fund (1,358,823)
500 Index Fund (1,734,508)
International Growth Fund (130,781)
Small-Cap Index Fund (336,635)
Total Bond Market Index Fund 39,881
-----------
Total shares of registered investment companies
$(6,130,562)
===========
8
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
5. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets relating to the nonparticipant-directed
investments as of December 31 is as follows:
2002 2001
------------------------------------
ASSETS
Robbins & Myers, Inc. common stock $ 4,765,246 $ 5,938,640
Contributions receivable 76,953 51,478
------------------------------------
NET ASSETS $ 4,842,199 $ 5,990,118
====================================
Information about the changes in net assets relating to the
nonparticipant-directed investments for the year ended December 31, 2002 is as
follows:
ADDITIONS
Contributions $ 881,925
Interest and dividends 54,531
------------------
936,456
DEDUCTIONS
Net depreciation in the fair value of investments 1,137,629
Benefits paid 497,724
Interfund transfers out 461,094
------------------
2,096,447
Net decrease (1,159,991)
Net assets available for benefits, at beginning of year 5,990,118
------------------
Net assets available for benefits, at end of year $ 4,830,127
==================
6. TRANSACTIONS WITH RELATED PARTIES
As of December 31, 2002 and 2001, the Plan held 258,981 and 253,680 shares,
respectively, of Robbins & Myers, Inc. common stock in a company stock fund.
During 2002, shares were purchased at a total cost of $1,491,786 and shares were
sold at a total selling price of $1,527,193.
9
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
7. SUBSEQUENT EVENT
On February 2, 2003, the assets and loans attributed to the accounts of Tarby
Inc. employees of the Dover, Inc. 401(k) Plan were merged into the Plan.
10
SUPPLEMENTAL SCHEDULES
Robbins & Myers, Inc.
Employee Savings Plan
Employer Identification Number 31-0424220/ Plan Number 011
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
DESCRIPTION OF INVESTMENTS
INCLUDING MATURITY DATE
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CURRENT
LESSOR OR SIMILAR PARTY PAR OR MATURING VALUE COST VALUE
- ----------------------------------------------------------------------------------------------------------------------
Robbins & Myers, Inc. * 258,981 shares of common
stock $ 6,227,289 $ 4,765,246
The Vanguard Group, Inc.:*
Wellington Fund 217,890 units of Registered
Investment Company ** 5,351,369
Windsor Fund 454,755 units of Registered
Investment Company ** 5,457,063
Windsor II Fund 65,848 units of Registered
Investment Company ** 1,369,635
U.S. Growth Fund 200,423 units of Registered
Investment Company ** 2,417,103
Retirement Savings Trust 7,991,598 units of Common
Collective Trust ** 7,991,598
500 Index Fund 66,063 units of Registered
Investment Company ** 5,361,024
International Growth Fund 43,541 units of Registered
Investment Company ** 529,465
Prime Money Market Fund 500,984 units of Registered
Investment Company ** 500,984
Small Cap Index Fund 76,935 units of Registered
Investment Company ** 1,204,803
Total Bond Market Index Fund 178,113 units of Registered
Investment Company ** 1,848,810
Participant Loans Interest rates from 5.25-9.50% 1,182,417
-------------------------------------
$ 6,227,289 $37,979,517
=====================================
* Party-in-interest to the Plan.
** Cost of asset is not required to be disclosed as investment is
participant-directed.
11
Robbins & Myers, Inc.
Employee Savings Plan
Employer Identification Number 31-0424220/ Plan Number 011
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2002
DESCRIPTION CURRENT VALUE NET
IDENTITY OF OF PURCHASE SELLING COST OF OF ASSET ON GAIN
PARTY INVOLVED ASSET PRICE PRICE ASSET TRANSACTION DATE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
Category (iii)--A Series of Transactions in
- -------------------------------------------
Excess of 5 Percent of Plan Assets
- ----------------------------------
Robbins & Myers, Inc. Shares of Common Stock $1,491,786 $ - $ 1,491,786 $ 1,491,786 $ -
- 1,527,193 1,515,517 1,527,193 11,676
Note: Sections (e) and (f) are not applicable. There were no category (i), (ii),
or (iv) transactions during the year.
12