EXHIBIT 99.1
Financial Statements and Supplemental Schedules
Robbins & Myers, Inc. Employee Savings Plan
December 31, 2003 and 2002 and for the year ended December 31, 2003 with Report
of Independent Auditors
Robbins & Myers, Inc. Employee Savings Plan
Financial Statements and Supplemental Schedules
December 31, 2003 and 2002 and
for the year ended December 31, 2003
TABLE OF CONTENTS
Report of Independent Auditors.......................................... 1
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)........... 12
Schedule H, Line 4j--Schedule of Reportable Transactions................ 13
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, 2003 and
2002 and the related statement of changes in net assets available for benefits
for the year ended December 31, 2003. 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 the standards of the Public Company
Accounting Oversight Board (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, 2003 and 2002, and the changes in its net assets available for
benefits for the year ended December 31, 2003, 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, 2003, 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 the 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.
April 23, 2004 \s\ Ernst & Young LLP
1
Robbins & Myers, Inc.
Employee Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2003 2002
----------- -----------
ASSETS
Investments at fair value $45,182,900 $36,797,100
Participant loans at estimated fair value 1,144,458 1,182,417
----------- -----------
Total investments 46,327,358 37,979,517
Contributions receivable:
Employer 64,964 64,881
Employee 221,543 185,328
----------- -----------
Total receivables 286,507 250,209
----------- -----------
Net assets available for benefits $46,613,865 $38,229,726
=========== ===========
See accompanying notes.
2
Robbins & Myers, Inc.
Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2003
ADDITIONS
Employee contributions $ 2,694,277
Employer contributions 948,272
Rollovers 169,347
Transfers from other plans 335,565
Dividend income - Robbins & Myers, Inc. common stock 61,812
Dividend and interest income 920,133
Net appreciation in fair value of investments 6,409,338
-----------
Total additions 11,538,744
DEDUCTIONS
Benefits paid directly to participants 3,154,605
-----------
Total deductions 3,154,605
-----------
Net increase 8,384,139
Net assets available for benefits, at beginning of year 38,229,726
-----------
Net assets available for benefits, at end of year $46,613,865
===========
See accompanying notes.
3
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements
December 31, 2003
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. The Company
contributes 50 percent of an employee's annual contribution. Only the first 6
percent of an employee's annual compensation is eligible for the employer's
match.
On February 2, 2003, the participant account balances ($335,565) of Tarby, Inc.
employees of the Dover, Inc. 401(k) Plan were transferred to the Plan and are
included in rollovers from other plans in the Statement of Changes in Net Assets
Available for Benefits.
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.
4
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
DISTRIBUTIONS
Distributions of vested balances are available upon termination, 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.
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. 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%
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. Forfeited balances of terminated
participants' non-vested accounts are used to reduce future company
contributions. 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.
FORFEITED ACCOUNTS
At December 31, 2003, forfeited non-vested accounts totaled $76,351. These
accounts will be used to reduce future employer contributions.
PLAN AMENDMENTS
The Company amended the plan, effective for the 2003 plan year, to make
revisions to the timing and form of distributions made, and adoption of required
minimum distribution terms and certain definitions. The Plan was amended using
the model amendment from IRS Revenue Procedure 2002-29 for purposes of complying
with the applicable changes made by final Treasury Regulations issued under
Section 401(a)(9) of the Internal Revenue Code.
Effective November 15, 2002, the Company amended the Plan to define 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.
The Company amended the Plan to adopt certain provisions of the "Economic Growth
and Tax Reconciliation Act of 2001" ("EGTRRA"). This amendment is intended as
good faith compliance with the requirements of EGTRRA effective for Plan Years
beginning after December 31, 2001.
6
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Plan's financial statements are prepared on the accrual basis of accounting.
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 the common stock
and the registered investment companies are valued at quoted market prices,
which 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 August 5, 2003, 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 the issuance of this determination by the
Internal Revenue Service, the Plan was amended (see Note 1). Once qualified, the
Plan is required to operate in conformity with the Code to maintain its
qualification. The Plan Administrator believes the Plan is being operated in
compliance with the applicable requirements of the Code and, therefore, believes
that the Plan, as amended and restated, is qualified and the related trust is
tax exempt.
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:
2003 2002
---------- ----------
Robbins & Myers, Inc. common stock $5,714,444 $4,765,246
The Vanguard Group, Inc.:
Shares of registered investment companies:
Wellington Fund 6,724,589 5,351,369
Windsor Fund 7,503,357 5,457,063
U.S. Growth Fund 3,312,441 2,417,103
500 Index Fund 6,943,391 5,361,024
Shares of common/collective trust fund:
Retirement Savings Trust 8,082,775 7,991,598
8
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
4. INVESTMENTs (CONTINUED)
During the year ended December 31, 2003, the Plan's investments (including
investments purchased, sold and 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 $ 288,468
===========
The Vanguard Group, Inc. (shares of registered
investment companies):
Wellington Fund $ 979,357
Windsor Fund 1,926,053
Windsor II Fund 348,969
U.S. Growth Fund 663,658
500 Index Fund 1,450,542
International Growth Fund 187,362
Small-Cap Index Fund 573,605
Total Bond Market Index Fund (8,676)
-----------
Total shares of registered investment companies $ 6,120,870
===========
9
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:
2003 2002
---------- ----------
ASSETS
Robbins & Myers, Inc. common stock $5,714,444 $4,765,246
Contributions receivable 64,964 64,881
---------- ----------
$5,779,408 $4,830,127
========== ==========
Information about the changes in net assets relating to the
nonparticipant-directed investments for the year ended December 31, 2003 is as
follows:
ADDITIONS
Contributions $1,144,156
Loan repayments 147,287
Dividend and interest income 61,812
Net appreciation in the fair value of investments 288,468
----------
1,641,723
DEDUCTIONS
Benefits paid directly to participants 196,017
Loan withdrawals 123,042
Interfund transfers out 373,383
----------
692,442
----------
Net increase 949,281
Net assets available for benefits, at beginning of year 4,830,127
----------
Net assets available for benefits, at end of year $5,779,408
==========
10
Robbins & Myers, Inc.
Employee Savings Plan
Notes to Financial Statements (continued)
6. TRANSACTIONS WITH RELATED PARTIES
As of December 31, 2003 and 2002, the Plan held 300,919 and 258,981 shares,
respectively, of Robbins & Myers, Inc. common stock in a company stock fund.
During 2003, shares were purchased at a total cost of $1,962,376 and shares were
sold at a total selling price of $1,301,646.
11
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, 2003
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. * 300,919 shares of common
stock $ 6,918,774 $ 5,714,444
The Vanguard Group, Inc.:*
Wellington Fund 233,412 units of Registered
Investment Company ** 6,724,589
Windsor Fund 461,461 units of Registered
Investment Company ** 7,503,357
Windsor II Fund 62,916 units of Registered
Investment Company ** 1,666,654
U.S. Growth Fund 218,499 units of Registered
Investment Company ** 3,312,441
Retirement Savings Trust 8,082,775 units of Common
Collective Trust ** 8,082,775
500 Index Fund 67,628 units of Registered
Investment Company ** 6,943,391
International Growth Fund 52,983 units of Registered
Investment Company ** 854,609
Prime Money Market Fund 499,434 units of Registered
Investment Company ** 499,434
Small Cap Index Fund 93,444 units of Registered
Investment Company ** 2,111,826
Total Bond Market Index Fund 171,618 units of Registered
Investment Company ** 1,769,380
Participant Loans Interest rates from 4.75%-9.50% 1,144,458
----------- -----------
$ 6,918,774 $46,327,358
=========== ===========
* Party-in-interest to the Plan.
** Cost of asset is not required to be disclosed as investment is
participant-directed.
12
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, 2003
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 $1,962,376 $ - $ 1,962,376 $ 1,962,376 $ -
- 1,301,646 1,270,891 1,301,646 30,755
Note: Sections (e) and (f) are not applicable. There were no category (i), (ii),
or (iv) transactions during the year.
13