Flow International Announces First Quarter Results

KENT, Wash., Sept. 7 /PRNewswire-FirstCall/ -- Flow International Corporation (Nasdaq: FLOW), the world's leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications, today reported results for its fiscal 2011 first quarter ended July 31, 2010.

For the fiscal 2011 first quarter, Flow reported consolidated revenues of $46.6 million, a 23% increase from $37.8 million in the prior-year period.  Net loss in the current quarter was $0.5 million or $0.01 per share.  In comparison, the Company reported a net loss of $8.5 million in the prior-year period.

The first quarter of fiscal 2011 and 2010 included non-recurring charges.  Excluding the impact of a non-recurring tax charge, net income for the current quarter would have been $0.1 million or $0.00 per share.  Similarly, excluding non-recurring charges totaling $6.2 million and the related tax effects, the net loss in the prior-year period would have been $2.7 million or $0.07 per share.  

"We are pleased with the improvement in revenues from our Standard segment as sales continued to increase sequentially over the last few quarters in most of our major regions," said Charley Brown, President and CEO of Flow.  "This growth demonstrates that our new indirect channel of distribution is beginning to bear fruit.  More importantly, at these revenue levels, we have now generated our second consecutive quarter of operating profit."

Operations Review for Fiscal 2011 First Quarter

• Standard segment sales, which include sales of systems that do not require significant custom configuration as well as parts and services for those installed systems, were $40.8 million, an increase of $12.5 million or 44% from the fiscal year 2010 first quarter.
• Advanced segment sales, which include sales of complex aerospace and application systems requiring specific custom configuration and advanced features as well as parts and services for those installed systems, were $5.7 million for the quarter.  This was consistent with the Company's expectations of a decrease of $3.6 million or 39% from the prior-year quarter.  Advanced segment sales are recorded using the percentage of completion method, with lead times ranging as long as 18 to 24 months.
• Aggregate gross margins were 42% for the quarter, compared to gross margin of 37% in the fiscal 2010 first quarter.
• Total overall operating expenses for the quarter were $18.7 million which compares to $16.7 million in the fiscal 2010 first quarter, excluding $4.8 million in non-recurring charges.
• In the current quarter, the Company recorded tax expense of $1.1 million, which includes a discrete non-cash tax charge of $0.7 million related to the repatriation of cash from one of its foreign subsidiaries.  In the first quarter of the prior year, the Company recorded a charge of $4.8 million related to the restructuring of operations and a terminated acquisition and a $1.2 million charge for a business that was sold in October 2005 and classified as part of discontinued operations.

Conference Call

Flow plans to hold a conference call to discuss these results today:  Tuesday, September 7th at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).  The conference call may be heard by dialing 877-303-6620 or 224-357-2202.  A 7-day replay will be available following the call by dialing 800-642-1687 or 706-645-9291.  The conference call passcode is 98005521.  A live audio Webcast of the conference call may be found in the investor section at www.flowcorp.com.  A Webcast replay of the call will also be available for two weeks.

About Flow International

Flow International Corporation is the world's leading developer and manufacturer of ultrahigh-pressure waterjet cutting technology to industries including automotive, aerospace, job shop, surface preparation, and more. For more information, visit www.flowcorp.com.

This press release contains forward-looking statements relating to future events or future financial performance that involve risks and uncertainties. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements but their absence does not mean that the statement is not forward-looking. These statements are only predictio and actual results could differ materially from those anticipated in these statements based on a number of risk factors, including those set forth in the Company's filings with the Securities and Exchange Commission. Forward- looking statements in this press release include, without limitation, statements regarding stabilizing or improving revenue and optimism for the indirect channel of distribution.  Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.

SOURCE Flow International Corporation