KENT, Wash., June 25 /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 2009
fourth quarter ended April 30, 2009. For the quarter, Flow reported
consolidated revenues of $43.7 million, which compares to $48.7
million in the third quarter of fiscal year 2009 and $63.3 million
in the year-ago quarter. The Company reported a net loss from
continuing operations of $4.3 million, or $0.12 per basic and
diluted share, compared to net income of $13.3 million or $0.35 per
basic and diluted share a year ago. Net loss for the quarter just
ended includes a $3.8 million pre-tax charge for previously
deferred transaction costs related to the Company's previously
contemplated acquisition of OMAX Corporation, which was terminated
on May 11, and aggregate pre-tax charges of $1.4 million related to
the write off of deferred financing costs associated with the
amendment to the Company's senior credit facility, centralizing its
manufacturing operations, and severance related to cost reductions.
Excluding those charges and the related tax effects, the pro forma
loss from continuing operations was $1.2 million or $0.03 per basic
and diluted share as compared to the prior year quarter pro forma
net income of $1.5 million or $0.04 per share after excluding the
tax benefit from the reversal of income tax valuation allowance of
$11.8 million. "We continue to see the impact of the global
economic slowdown in portions of our business," said Charley Brown,
President and CEO of Flow. "We feel that roughly two-thirds of our
fourth quarter revenue stream has stabilized while one-third
remains more volatile during these difficult economic times.
Meanwhile, we continue to build our new distribution channel having
added 20 distributors in 17 countries over the past six months.
This indirect sales model represents a new avenue for long-term
growth. In addition, we are continuously monitoring our cost
structure to ensure that we emerge a stronger company when the
recession ends." Operations Review For the fiscal 2009 fourth
quarter, compared to the prior-year 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 $32.6 million in the quarter, a
decrease of 21% from the third quarter of fiscal year 2009 and a
decrease of 43% from the prior year quarter. Operating loss from
the Standard Segment totaled $889,000 in the quarter, which
compares to operating income of $9.5 million in the prior-year
quarter. -- Advanced Segment sales, which include sales of complex
aerospace and automation systems requiring specific custom
configuration and advanced features, as well as parts and services
for those installed systems were $11.1 million in the quarter, an
increase of 50% from the third quarter of fiscal year 2009 and an
increase of 82% from the prior-year quarter. Operating income from
the Advanced Segment was $2.3 million in the quarter compared to
operating loss of $421,000 in the prior year quarter. The Advanced
Segment backlog at the end of the quarter was $32.5 million. --
Total overall operating expenses were $22.4 million in the quarter,
which includes $4.5 million in charges related to the deferred
transaction costs related to the OMAX transaction, the
centralization of our manufacturing operations and severance
related to cost reductions. Excluding those charges, operating
expenses were $17.9 million, compared with $20.5 million in the
prior-year quarter. In connection with the termination of the OMAX
transaction in May, the Company will record a net charge of
approximately $2.4 million in the first quarter of fiscal year
2010. -- On March 10, 2009 and subsequently on June 10, 2009, the
Company amended its Senior Credit Facility Agreement to reduce its
Line of Credit from $65 million to $40 million and amended its
financial covenants to provide the Company flexibility during the
current economic environment. Conference Call Flow plans to hold a
conference call to discuss these results today: Thursday, June 25th
at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The conference
call may be heard by dialing 1-877-941-8632 or 1-480-629-9821. A
48-hour replay will be available following the call by dialing
1-800-406-7325 or 1-303-590-3030; the replay passcode is 4098683. A
live audio Webcast of the conference call may be found in the
investor section at http://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
http://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 predictions 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 future
distributors and avenues for growth, the anticipated strength of
the Company when the recession ends and expected charges relating
to the Omax acquisition. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of
the date of this announcement. Flow International Corporation
Consolidated Statements of Operations (Unaudited) US Dollars in
thousands, except per share data Three months ended Twelve months
ended April 30, April 30, 2009 2008 % 2009 2008 % Change Change
Sales $43,749 $63,273 -31% $210,103 $244,259 -14% Cost of Sales
26,337 36,791 -28% 121,775 142,549 -15% ------ ------ -------
------- Gross Margin 17,412 26,482 -34% 88,328 101,710 -13% ------
------ ------ ------- Operating expenses: Sales and Marketing 9,174
10,481 -12% 41,170 42,272 -3% Research and Engineering 1,835 2,183
-16% 8,644 8,771 -1% General and Administrative 6,920 7,869 -12%
29,506 33,888 -13% Provision for Patent Litigation - - NM 29,000 -
NM Goodwill Impairment - - NM 2,764 - NM Restructuring and Other
Operating Charges 4,484 - NM 6,878 - NM ----- - ----- -----
Operating Expenses 22,413 20,533 9% 117,962 84,931 39% ------
------ ------- ------ Operating Income (loss) (5,001) 5,949 NM
(29,634) 16,779 NM Interest Income (Expense), net (732) 62 NM
(1,068) 361 NM Other Expense, net (555) (1,090) -49% (614) (1,846)
-67% ----- ------- ----- ------- Income (Loss) before taxes (6,288)
4,921 NM (31,316) 15,294 NM Income Tax Benefit 1,950 8,389 NM 8,230
6,617 24% ----- ----- ----- ----- Income (Loss) from Continuing
Operations (4,338) 13,310 NM (23,086) 21,911 NM Discontinued
Operations, net of tax (133) 25 NM (733) 443 NM ----- --- ----- ---
Net Income (loss) $(4,471) $13,335 NM $(23,819) $22,354 NM ========
======= ========= ======= Per share amounts: Basic Income (Loss)
from Continuing Operations $(0.12) $0.35 NM $(0.61) $0.59 NM Basic
Net Income (Loss) $(0.12) $0.35 NM $(0.63) $0.60 NM Diluted Income
(Loss) from Continuing Operations $(0.12) $0.35 NM $(0.61) $0.58 NM
Diluted Net Income (loss) $(0.12) $0.35 NM $(0.63) $0.59 NM
Weighted Average Shares Outstanding (000): Basic 37,685 37,588
37,627 37,421 Diluted 37,685 37,920 37,627 37,893 NM = not
meaningful Flow International Corporation Supplemental Data
(Unaudited) US Dollars in thousands Three months ended Twelve
months ended April 30, April 30, 2009 2008 % 2009 2008 % Change
Change Sales Breakdown: Systems $29,946 $45,620 -34% $145,944
$176,755 -17% Consumable Parts 13,803 17,653 -22% 64,159 67,504 -5%
------ ------ ------ ------ Total $43,749 $63,273 -31% $210,103
$244,259 -14% ======= ======= ======== ======== Segment Revenue
Breakdown: Standard $32,611 $57,149 -43% $181,132 $216,063 -16%
Advanced 11,138 6,124 82% 28,971 28,196 3% ------ ----- ------
------ $43,749 $63,273 -31% $210,103 $244,259 -14% ======= =======
======== ======== Segment Operating Income (Loss) Breakdown:
Standard $(889) $9,503 NM $21,067 $40,967 -49% Advanced 2,317 (421)
NM (272) (5,090) -95% All Other* (7,292) (4,042) 80% (50,556)
(17,996) NM Intersegment Eliminations 862 909 -5% 126 (1,103) NM
--- --- --- ------- $(5,001) $5,949 NM $(29,634) $16,779 NM
======== ====== ========= ======= * Includes corporate overhead
expenses as well as general and administrative expenses of inactive
subsidiaries that do not constitute segments. Fiscal year 2009
operating loss includes a $29 million charge related to the patent
litigation with OMAX during the current fiscal year pursuant to a
Settlement and Cross Licensing Agreement Depreciation and
Amortization Expense $1,133 $1,339 -15% $4,343 $3,974 9% Capital
Spending $2,070 $1,570 32% $8,932 $6,303 42% Flow International
Corporation Selected Balance Sheet Data US Dollars in thousands
April 30, April 30, 2009 2008 % Change Cash $10,117 $29,099 -65%
Receivables, net 32,103 33,632 -5% Inventories 21,480 29,339 -27%
Total Debt 18,530 4,428 NM Flow International Corporation
Reconciliation of GAAP to Pro Forma (Unaudited) US Dollars in
thousands, except per share data Three months Twelve months ended
April 30, ended April 30, 2009 2008 2009 2008 ---- ---- ---- ----
GAAP Income (Loss) from Continuing Operations $(4,338) $13,310
$(23,086) $21,911 Adjustments: Provision for Patent Litigation - -
29,000 - Write-off of Previously Deferred Direct Transaction Costs
3,767 - 3,767 Restructuring and Other Operating Charges 717 - 2,994
- Goodwill Impairment - - 2,764 - Write-off of Deferred Debt
Issuance Costs 654 - 654 - Inventory Write-Off 36 - 144 - Premium
from Warrant Repurchase - - - - Change in German Tax Law - - - 389
Amendment of Former CEO Contract - - - 2,891 Reversal of German
Valuation Allowance - - - (1,160) Tax Benefit from Reversal of
Valuation Allowance - (11,800) - (11,800) Tax Effect of Adjustments
(2,018) - (15,336) 614 ------- ------ ------ ------- Pro forma
Income (Loss) from Continuing Operations $(1,182) $1,510 $901
$12,844 ------- ------ ---- ------- GAAP Net Income (Loss) $(4,471)
$13,335 $(23,819) $22,354 Adjustments: Provision for Patent
Litigation - - 29,000 - Write-off of Previously Deferred Direct
Transaction Costs 3,767 - 3,767 - Restructuring and Other Operating
Charges 717 - 2,994 - Goodwill Impairment - - 2,764 - Write-off of
Deferred Debt Issuance Costs 654 - 654 - Inventory Write-Off 36 -
144 - Premium from Warrant Repurchase - - - - Change in German Tax
Law - - - 389 Amendment of Former CEO Contract - - - 2,891 Reversal
of German Valuation Allowance - - - (1,160) Tax Benefit from
Reversal of Valuation Allowance - (11,800) - (11,800) Tax Effect of
Adjustments (2,018) - (15,336) 614 ------- ------ ------ -------
Pro forma Net Income (Loss) $(1,315) $1,535 $168 $13,288 -------
------ ---- ------- Per Share Amounts GAAP Basic and Diluted Income
(Loss) Per Share Income (Loss) from Continuing Operations $(0.12)
$0.35 $(0.61) $0.59 Net Income (Loss) $(0.12) $0.35 $(0.63) $0.60
Pro forma Basic and Diluted Income (Loss) per Share Income (Loss)
from Continuing Operations $(0.03) $0.04 $0.02 $0.34 Net Income
(Loss) $(0.03) $0.04 $0.00 $0.35 Contact: Flow Investor Relations
Geoffrey Buscher 253-813-3286 DATASOURCE: Flow International
Corporation CONTACT: Geoffrey Buscher, Flow Investor Relations,
+1-253-813-3286, Web Site: http://www.flowcorp.com/
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