1 Exhibit 99.1 Financial Statements and Supplemental Schedules Robbins & Myers, Inc. Employee Savings Plan December 31, 1998 and 1997 and for the year ended December 31, 1998 with Report of Independent Auditors 2 Robbins & Myers, Inc. Employee Savings Plan Financial Statements and Supplemental Schedules December 31, 1998 and 1997 and for the year ended December 31, 1998 TABLE OF CONTENTS Report of Independent Auditors.................................................1 Audited Financial Statements Statements of Assets Available for Benefits ...................................2 Statement of Changes in Assets Available for Benefits .........................3 Notes to Financial Statements..................................................5 Supplemental Schedules Line 27a - Schedule of Assets Held for Investment Purposes.....................9 Line 27d - Schedule of Reportable Transactions................................10 3 Report of Independent Auditors Corporate Benefits Committee Robbins & Myers, Inc. Employee Savings Plan We have audited the accompanying statements of assets available for benefits of the Robbins & Myers, Inc. Employee Savings Plan as of December 31, 1998 and 1997 and related statement of changes in assets available for benefits for the year ended December 31, 1998, 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 generally accepted auditing standards. 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 assets available for benefits of the Plan at December 31, 1998 and 1997, and the changes in its assets available for benefits for the year ended December 31, 1998, in conformity with generally accepted accounting principles. 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 for investment purpose as of December 31, 1998 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 Fund Information in the statement of changes in assets available for benefits is presented for purposes of additional analysis rather than to present the changes in assets available for benefits of each fund. The supplemental schedules and Fund Information 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. June 3, 1999 /s/ ERNST & YOUNG LLP 1 4 Robbins & Myers, Inc. Employee Savings Plan Statements of Assets Available for Benefits DECEMBER 31 1998 1997 -------------------------- ASSETS Investments at fair value: Money market fund $ - $ 1,832,003 Common stock: Robbins & Myers, Inc. Common Stock 6,555,446 12,729,103 Shares of registered investment companies: Vanguard Wellington Fund 5,306,655 4,632,182 Vanguard Windsor Fund 7,717,321 9,444,758 VMMR Prime Portfolio 558,433 578,929 Vanguard Index Small Capitalization Portfolio 1,273,352 1,469,757 Vanguard Windsor II Fund 2,132,036 2,290,683 Vanguard Index 500 Portfolio 4,643,739 1,692,100 Vanguard U.S. Growth Fund 3,952,102 2,279,650 Vanguard International Growth Portfolio 724,975 435,105 Vanguard VBIF Total Bond Market Fund 1,031,123 383,537 Common/collective Trust Fund: Vanguard Retirement Savings Trust 6,792,328 5,260,914 Investments at estimated fair value: Participant loans 1,183,487 1,187,272 -------------------------- Total investments 41,870,997 44,215,993 Contributions receivable: Employer 50,213 407,919 Employee 176,637 216,153 -------------------------- Total receivables 226,850 624,072 -------------------------- Assets available for benefits $42,097,847 $44,840,065 ========================== See accompanying notes. 2 5 Robbins & Myers, Inc. Employee Savings Plan Statements of Changes in Assets Available for Benefits Year ended December 31, 1998 FUND INFORMATION ---------------------------------------------------------------- ROBBINS & CASH AND MYERS, INC. VANGUARD VANGUARD VMMR CASH COMMON WELLINGTON WINDSOR PRIME EQUIVALENTS STOCK FUND FUND PORTFOLIO ---------------------------------------------------------------- ADDITIONS Employee contributions ........................ $ -- $1,344,787 $ 421,805 $ 589,383 $ (23,847) Employer contributions ........................ -- 728,471 -- -- -- Dividend income-- Robbins & Myers, Inc. Common Stock ........ -- 73,700 -- -- -- Dividend and interest income .................. -- -- 595,187 690,461 29,610 ---------------------------------------------------------------- Total additions ............................... -- 2,146,958 1,016,992 1,279,844 5,763 DEDUCTIONS Benefit payments and withdrawals .............. -- 1,868,422 555,271 993,958 39,578 ---------------------------------------------------------------- Total deductions .............................. -- 1,868,422 555,271 993,958 39,578 Net appreciation (depreciation) in fair value of investments prior to interfund transfers -- (5,167,187) (11,941) (584,602) -- Interfund transfers ........................... (1,832,003) (1,656,388) 220,598 (1,454,251) (10,543) ---------------------------------------------------------------- Net (deductions) additions .................... (1,832,003) (6,545,039) 670,378 (1,752,967) (44,358) Assets available for benefits at beginning of year ...................... 1,832,003 13,168,537 4,666,243 9,508,710 602,791 ---------------------------------------------------------------- Assets available for benefits at end of year ............................ $ -- $6,623,498 $5,336,621 $7,755,743 $558,433 ================================================================ FUND INFORMATION --------------------------------------- VANGUARD INDEX SMALL VANGUARD VANGUARD CAPITALIZATION WINDSOR II INDEX 500 PORTFOLIO FUND PORTFOLIO --------------------------------------- ADDITIONS Employee contributions ........................ $ 167,328 $ -- $ 537,140 Employer contributions ........................ -- -- -- Dividend income-- Robbins & Myers, Inc. Common Stock ........ -- -- -- Dividend and interest income .................. 113,929 215,271 66,264 --------------------------------------- Total additions ............................... 281,257 215,271 603,404 DEDUCTIONS Benefit payments and withdrawals .............. 284,607 135,607 439,817 --------------------------------------- Total deductions .............................. 284,607 135,607 439,817 Net appreciation (depreciation) in fair value of investments prior to interfund transfers (131,061) 126,423 736,894 Interfund transfers ........................... (53,044) (364,734) 2,069,164 --------------------------------------- Net (deductions) additions .................... (187,455) (158,647) 2,969,645 Assets available for benefits at beginning of year ...................... 1,470,827 2,290,683 1,704,282 --------------------------------------- Assets available for benefits at end of year ............................ $1,283,372 $2,132,036 $4,673,927 ======================================= See accompanying notes. 3 6 Robbins & Myers, Inc. Employee Savings Plan Statements of Changes in Assets Available for Benefits (continued) Year ended December 31, 1998 FUND INFORMATION ------------------------------------------------------------------- VANGUARD VANGUARD VANGUARD RETIREMENT VANGUARD INTERNATIONAL VBIF SAVINGS U.S. GROWTH GROWTH TOTAL BOND PARTICIPANT TRUST FUND PORTFOLIO MARKET LOANS TOTAL -------------------------------------------------------------------------------- ADDITIONS Employee contributions $ 211,262 $ 312,814 $ 140,289 $ 75,551 $ 73,886 $ 3,850,398 Employer contributions - - - - - 728,471 Dividend income-- Robbins & Myers, Inc. Common Stock - - - - - 73,700 Dividend and interest income 361,884 239,883 14,854 44,648 99,721 2,471,712 -------------------------------------------------------------------------------- Total additions 573,146 552,697 155,143 120,199 173,607 7,124,281 DEDUCTIONS Benefit payments and withdrawals 636,651 372,882 139,380 305,579 (84,902) 5,686,850 -------------------------------------------------------------------------------- Total deductions 636,651 372,882 139,380 305,579 (84,902) 5,686,850 Net appreciation (depreciation) in fair value of investments prior to interfund transfers 774,218 68,623 8,984 - (4,179,649) Interfund transfers 1,595,419 721,160 203,026 823,889 (262,293) - -------------------------------------------------------------------------------- Net (deductions) additions 1,531,914 1,675,193 287,412 647,493 (3,784) (2,742,218) Assets available for benefits at beginning of year 5,276,332 2,299,554 443,780 389,052 1,187,271 44,840,065 -------------------------------------------------------------------------------- Assets available for benefits at end of year $ 6,808,246 $ 3,974,747 $ 731,192 $ 1,036,545 $ 1,183,487 $ 42,097,847 ================================================================================ See accompanying notes. 4 7 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements December 31, 1998 1. DESCRIPTION OF PLAN The Robbins & Myers, Inc. Employee Savings Plan (the Plan) is a defined contribution plan which covers salaried employees of Robbins & Myers, Inc. (the Plan Sponsor and Company) and its U.S. subsidiaries. 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 a minimum of 40 percent of an employee's annual contribution and may elect to make up to 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. Participants are immediately vested in their contributions and any earnings on these contributions. Matching contributions made by the Company become vested as follows: VESTING PERCENTAGE YEARS OF VESTING SERVICE - ---------------------------------------------------------- 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% 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. 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. The foregoing description of the Plan provides only general information. Additional information about the plan agreement is contained in the Summary Plan Description. Copies are available from the Corporate Benefits Committee. 5 8 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The Plan maintains its accounting records on the accrual basis of accounting. VALUATION OF INVESTMENTS The Plan's investments are stated at fair value. The shares of registered investment companies and money market fund 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 Vanguard Retirement Savings 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 approximates 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. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements. Actual results could differ from those estimates. 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. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Corporate Benefits Committee believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. 6 9 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 is as follows: DECEMBER 31 1998 1997 ---------------------------------- Robbins & Myers, Inc. Common Stock $ 6,555,446 $ 12,729,103 Vanguard Wellington Fund 5,306,655 4,632,182 Vanguard Windsor Fund 7,717,321 9,444,758 Vanguard Windsor II Fund 2,132,036 2,290,683 Vanguard U.S. Growth Fund 3,952,102 2,279,650 Vanguard Retirement Savings Trust 6,792,328 5,260,914 Vanguard 500 Index Fund 4,643,739 - Net (depreciation) appreciation in the fair value of investments in common stock and registered investment companies was ($5,167,187) and $987,538, respectively for the year ended December 31, 1998. 5. TRANSACTIONS WITH PARTIES-IN-INTEREST As of December 31, 1998, the Plan held 296,291 shares of Robbins & Myers, Inc. common stock in a company stock fund. During 1998, shares were purchased at a total cost of $6,302,890 and shares were sold at a selling price of $7,311,743. 6. YEAR 2000 ISSUE (UNAUDITED) The Plan Sponsor has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle year 2000 dates. The Plan Sponsor is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Both internal and external resources are being utilized to replace or modify existing software applications, and test the software and equipment for the year 2000 modifications. The Plan Sponsor anticipates substantially completing this phase of the project by July 1999. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Plan Sponsor. 7 10 Robbins & Myers, Inc. Employee Savings Plan Notes to Financial Statements (continued) 6. YEAR 2000 ISSUE (UNAUDITED) (CONTINUED) For the second phase of the project, Plan management established formal communication with its third-party service providers to determine that they have developed plans to address their year 2000 problems as they relate to the Plan's operations. All third-party service providers have indicated that they will be year 2000 compliant by early 1999. If modification of data processing systems of either the Plan, the Plan Sponsor, or its service providers are not completed timely, the year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan, because they are confident that all systems will be year 2000 ready. 8 11 Robbins & Myers, Inc. Employee Savings Plan Line 27a - Schedule of Assets Held for Investment Purposes EIN 31-0424220 Plan No. 011 December 31, 1998 IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF CURRENT LESSOR, OR SIMILAR PARTY INVESTMENT COST VALUE - ---------------------------------------------------------------------------------------------------------------------------- Common Stock: Robbins & Myers, Inc. Common Stock Fund * 296,291 Shares $ 7,027,771 $ 6,555,446 Shares off registered investment companies: Vanguard Wellington Fund * 180,806 Units 4,603,503 5,306,655 Vanguard Windsor Fund * 495,653 Units 7,822,537 7,717,321 VMMR Prime Portfolio * 558,433 Units 558,433 558,433 Vanguard Index 500 Fund * 40,752 Units 3,779,365 4,643,739 Vanguard Index Small Capitalization Portfolio * 60,064 Units 1,169,001 1,273,352 Vanguard Windsor II Fund * 71,425 Units 1,442,509 2,132,036 Vanguard U.S. Growth Fund * 105,417 Units 2,873,948 3,952,102 Vanguard VBIF Total Bond Market Fund * 100,401 Units 1,019,916 1,031,123 Vanguard International Growth Portfolio * 38,624 Units 677,386 724,975 Common/collective trust fund: Vanguard Retirement Savings Trust * 6,792,328 Units 6,792,328 6,792,328 Participant Loans Rates from 7-10% - 1,183,487 --------------------------------- $ 37,766,697 $ 41,870,997 ================================= * Indicates party-in-interest to the Plan. 9 12 Robbins & Myers, Inc. Employee Savings Plan Line 27d - Schedule of Reportable Transactions EIN 31-0424220 Plan No. 011 Year ended December 31, 1998 DESCRIPTION IDENTITY OF OF PURCHASE SELLING PARTY INVOLVED ASSET PRICE PRICE - ----------------------------------------------------------------------------------------------------------- Category (iii)--A Series of Transactions in Excess of 5 Percent of Plan Assets Robbins & Myers, Inc. Common Stock Common Stock $ 6,302,890 $ - Robbins & Myers, Inc. Common Stock Common Stock - 7,311,743 Vanguard VBIF Total Bond Market Fund Shares of registered investment company 2,338,418 - Vanguard VBIF Total Bond Market Fund Shares of registered investment company - 1,699,817 Vanguard U.S. Growth Fund Shares of registered investment company 2,701,510 - Vanguard U.S. Growth Fund Shares of registered investment company - 1,802,495 Vanguard Wellington Fund Shares of registered investment company 1,990,903 - Vanguard Wellington Fund Shares of registered investment company - 1,304,489 Vanguard Windsor Fund Shares of registered investment company 2,186,435 - Vanguard Windsor Fund Shares of registered investment company - 3,326,861 Vanguard Index 500 Portfolio Shares of registered investment company 4,113,846 - Vanguard Index 500 Portfolio Shares of registered investment company - 1,896,139 Vanguard Retirement Savings Trust Common/collective trust fund 3,411,265 - Vanguard Retirement Savings Trust Common/collective trust fund - 1,879,851 DESCRIPTION CURRENT VALUE NET IDENTITY OF OF COST OF OF ASSET ON GAIN PARTY INVOLVED ASSET ASSET TRANSACTION DATE (LOSS) - ------------------------------------------------------------------------------------------------------------------------ Category (iii)--A Series of Transactions in Excess of 5 Percent of Plan Assets Robbins & Myers, Inc. Common Stock Common Stock $ 6,302,890 $ 6,302,890 $ - Robbins & Myers, Inc. Common Stock Common Stock 5,853,121 7,311,743 1,458,622 Vanguard VBIF Total Bond Market Fund Shares of registered investment company 2,338,418 2,338,418 - Vanguard VBIF Total Bond Market Fund Shares of registered investment company 1,695,942 1,699,817 3,875 Vanguard U.S. Growth Fund Shares of registered investment company 2,701,510 2,701,510 - Vanguard U.S. Growth Fund Shares of registered investment company 1,612,534 1,802,495 189,960 Vanguard Wellington Fund Shares of registered investment company 1,990,903 1,990,903 - Vanguard Wellington Fund Shares of registered investment company 1,101,978 1,304,489 202,511 Vanguard Windsor Fund Shares of registered investment company 2,186,435 2,186,435 - Vanguard Windsor Fund Shares of registered investment company 3,118,845 3,326,861 208,016 Vanguard Index 500 Portfolio Shares of registered investment company 4,113,846 4,113,846 - Vanguard Index 500 Portfolio Shares of registered investment company 1,754,176 1,896,139 141,963 Vanguard Retirement Savings Trust Common/collective trust fund 3,411,265 3,411,265 - Vanguard Retirement Savings Trust Common/collective trust fund 1,879,851 1,879,851 - Notes: There were no category (i), (ii), or (iv) reportable transactions during the year ended December 31, 1998. Rental expense and expense incurred with transactions are not applicable. 10