Flow International Announces Second Quarter Results

Flow International Corporation

Consolidated Statements of Operations

(Unaudited)

U.S. Dollars in thousands, except per share data

Three Months Ended October 31,

Six Months Ended October 31,

2011

2010

% Change

2011

2010

% Change

Sales

$      64,533

$   52,935

22%

$ 124,563

$ 99,515

25%

Cost of Sales

39,217

33,082

19%

76,127

60,329

26%

Gross Margin

25,316

19,853

28%

48,436

39,186

24%

Operating Expenses:

Sales and Marketing

12,082

10,885

11%

24,778

21,481

15%

Research and Engineering

2,711

2,436

11%

5,367

4,582

17%

General and Administrative

5,361

5,659

(5%)

11,970

11,617

3%

Operating Expenses

20,154

18,980

6%

42,115

37,680

12%

Operating Income

5,162

873

NM

6,321

1,506

NM

Interest Expense, net

(300)

(393)

(24%)

(571)

(785)

(27)%

Other Income (Expense), net

7

104

(93%)

(127)

396

NM

Income Before Taxes

4,869

584

NM

5,623

1,117

NM

Provision for Income Taxes

(2,138)

(804)

NM

(2,238)

(1,868)

20%

Income (Loss) from Continuing Operations

2,731

(220)

NM

3,385

(751)

NM

Income (Loss) from Discontinued Operations, net of tax

48

(103)

NM

105

(112)

NM

Net Income (Loss)

$        2,779

$       (323)

NM

$      3,490

$     (863)

NM

Basic and Diluted Income (Loss) Per Share:

Income (Loss) from Continuing Operations

$          0.06

$      (0.01)

NM

$        0.07

$    (0.02)

NM

Net Income (Loss) 

$          0.06

$      (0.01)

NM

$        0.07

$    (0.02)

NM

Weighted Average Shares Outstanding Used in Computing Basic and Diluted Income (Loss) Per Share (000):   

  Basic

47,800

47,160

47,666

47,102

  Diluted  

47,800

47,160

47,666

47,102

NM = not meaningful

Flow International Corporation

Consolidated Balance Sheets

(Unaudited)

U.S. Dollars in thousands

October 31,

April 30,

2011

2011

% Change

ASSETS:

Current Assets:

Cash

$         9,618

$      9,096

6%

Receivables, net

47,610

47,082

1%

Inventories

33,376

28,609

17%

Other Current Assets

11,663

13,305

(12)%

Total Current Assets

102,267

98,092

Property and Equipment, net

18,337

19,104

(4)%

Other Long-Term Assets

35,633

35,867

(1)%

Total Assets

$    156,237

$ 153,063

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current Liabilities:

Notes Payable

$         2,350

$      5,500

(57)%

Current Portion of Long-Term Obligations

27

25

8%

Accounts Payable and Other Accrued Liabilities

30,411

28,661

6%

Other Current Liabilities

23,227

22,775

2%

Total Current Liabilities

56,015

56,961

Other Long-Term Liabilities

7,980

7,925

1%

Subordinated Notes

9,143

8,723

5%

Total Liabilities

73,138

73,609

Shareholders' Equity

83,099

79,454

5%

Total Liabilities and Shareholders' Equity

$    156,237

$ 153,063

Flow International Corporation

Supplemental Data

(Unaudited)

U.S. Dollars in thousands

Three Months Ended October 31,

Six Months Ended October 31,

2011

2010

% Change

2011

2010

% Change

Sales Breakdown:

Systems 

$      44,169

34,907

27%

$   84,133

$ 65,442

29%

Consumable Parts 

20,364

18,028

13%

40,430

34,073

19%

Total

$      64,533

$   52,935

22%

$ 124,563

$ 99,515

25%

Segment Revenue Breakdown:

Standard

$      59,188

$   44,860

32%

$ 112,192

$ 85,703

31%

Advanced

5,345

8,075

(34)%

12,371

13,812

(10)%

$      64,533

$   52,935

22%

$ 124,563

$ 99,515

25%

Depreciation and Amortization Expense

$         1,579

$      1,562

1%

$      3,151

$   3,184

(1)%

Capital Spending

$         1,720

$         452

NM

$      2,351

$   1,149

NM

NM = not meaningful

Flow International Corporation

Reconciliation of Adjusted EBITDA to Net Income (Loss)

(Unaudited)

US Dollars in thousands

Three Months Ended October 31,

Six Months Ended October 31,

2011

2010

% Change

2011

2010

% Change

Net Income (Loss)

$      2,779

$     (323)

NM

$    3,490

$   (863)

NM

Add Back:

Depreciation and Amortization

1,579

1,562

1%

3,151

3,184

(1)%

Income Tax Provision

2,138

804

NM

2,238

1,868

20%

Interest Charges

309

437

(29)%

620

850

(27)%

Non-Cash Charges (i)

558

634

(12)%

1,224

1,013

21%

Adjusted EBITDA

$      7,363

$    3,114

NM

$  10,723

$  6,052

77%

(i) Allowable Add Backs Pursuant to Credit Facility Agreement

NM = not meaningful

     The Company defines Adjusted EBITDA as net income (loss), determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"), excluding the effects of income taxes, depreciation, amortization of intangible assets, interest expense, and other non-cash charges, which includes such items as stock-based compensation expense, foreign currency gains or losses, and other non-cash allowable add backs pursuant to the Company's Credit Facility Agreement.

     Adjusted EBITDA is a non-GAAP financial measure and the presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. The items excluded from this non-GAAP financial measure are significant components of the Company's financial statements and must be considered in performing a comprehensive analysis of the overall financial results. The Company uses this measure, together with GAAP financial metrics, to assess its financial performance, allocate resources, evaluate the overall progress towards meeting its long-term financial objectives, and assess compliance with its debt covenants. The Company believes that this non-GAAP financial measure is useful to investors and analysts in allowing for greater transparency with respect to the supplemental information used in the Company's financial and operational decision making. The Company's calculation of Adjusted EBITDA may not be consistent with calculations of similar measures used by other companies.