KENT, Wash., Sept. 8 /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 2010 first quarter ended July 31, 2009.
For the quarter, Flow reported consolidated revenues of $37.8 million, which compares to $43.7 million in the fourth quarter of fiscal year 2009 and $57.1 million in the year-ago quarter. The Company reported a net loss of $8.5 million or a $0.23 loss per share as compared to net income of $1.6 million or $0.04 per share in the prior year quarter. The net loss for the quarter just ended includes a total of $6.0 million in pre-tax charges, consisting of a net charge of $3.2 million related to the termination of the OMAX transaction, $1.6 million for severance and other related charges associated with its cost reduction efforts, and approximately $1.2 million for a reserve related to a business sold in October 2005 that was classified as a discontinued operation. Excluding those charges and the related tax effects, the net loss would have been $2.7 million or $0.07 loss per share in the current quarter.
"Two-thirds of our revenue stream continues to be either stable or growing. The remaining one-third continues to be unpredictable but we are encouraged by the interest level in our products that customers are expressing," said Charley Brown, President and CEO of Flow. "The pace of recovery remains slow in certain markets, but we have made many cost reductions this year that we expect to positively impact our results throughout fiscal 2010. These reductions, combined with our recent capital raise and the amendments to our bank covenants, position us well to exit this recession as a stronger company. We appreciate the active engagement of our secured lenders and the support of our shareholders as we position the Company for a return to economic growth."
Operations Review
For the fiscal 2010 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 $28.4 million in the quarter, a decrease of 13% from the fourth quarter of fiscal year 2009 and a decrease of 46% from the prior-year quarter. Operating loss from the Standard Segment totaled $2.6 million in the quarter, which includes severance and related costs of $1.3 million. Excluding those charges, operating loss from the Standard Segment totaled $1.3 million as compared to operating income of $10.4 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 $9.4 million in the quarter, a decrease of 16% from the fourth quarter of fiscal year 2009 and an increase of 118% from the prior-year quarter. Operating income from the Advanced Segment was $1.8 million in the quarter as compared to an operating loss of $1.1 million in the prior-year quarter, after excluding $1.4 million of severance and related charges in that prior period. The Advanced Segment backlog at the end of the quarter was $32.6 million.
- Total overall operating expenses in the quarter were $21.6 million, which includes the $4.8 million in pre-tax charges related to the termination of the OMAX transaction and cost reduction efforts. Excluding those charges, operating expenses were $16.7 million, compared to $20.9 million in the prior-year quarter, after excluding restructuring and other costs of $1.4 million in that prior period.
Conference Call
Flow plans to hold a conference call to discuss these results today: Tuesday, September 8th at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call may be heard by dialing 1-877-941-1427 or 1-480-629-9664. 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 4154387. 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 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 the future effect of cost reductions and the anticipated strength of the Company when the recession ends. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.
Contact:
Flow Investor Relations
Geoffrey Buscher
253-813-3286
investors@flowcorp.com
Flow International Corporation
Consolidated Statements of Operations
(Unaudited)
US Dollars in thousands, except per share data
Three months ended July 31,
2009 2008 % Change
---- ---- --------
Sales $37,752 $57,065 -34%
Cost of Sales 23,776 30,934 -23%
------ ------
Gross Margin 13,976 26,131 -47%
------ ------
Operating Expenses:
Sales and Marketing 7,916 10,098 -22%
Research and Engineering 1,697 2,250 -25%
General and Administrative 7,122 8,590 -17%
Restructuring and Other Operating Charges 4,823 1,436 NM
----- -----
Operating Expenses 21,558 22,374 -4%
------ ------
Operating Income (Loss) (7,582) 3,757 NM
Interest Income (Expense), net (924) 49 NM
Other Income, net 502 391 28%
--- ---
Income (Loss) before taxes (8,004) 4,197 NM
Income Tax Benefit (Provision) 606 (2,664) NM
--- ------
Income (Loss) from Continuing Operations (7,398) 1,533 NM
Discontinued Operations, net of tax (1,148) 70 NM
------ --
Net Income (Loss) $(8,546) $1,603 NM
======= ======
Per share amounts:
Basic Income (Loss) from Continuing
Operations $(0.20) $0.04 NM
Basic Net Income (Loss) $(0.23) $0.04 NM
Diluted Income (Loss) from Continuing
Operations $(0.20) $0.04 NM
Diluted Net Income (Loss) $(0.23) $0.04 NM
Weighted Average Shares Outstanding (000):
Basic 37,748 37,591
Diluted 37,748 38,101
NM = not meaningful
Flow International Corporation
Consolidated Balance Sheets
(Unaudited)
US Dollars in thousands
July 31, April 30,
2009 2009 % Change
---- ---- --------
ASSETS:
Current Assets:
Cash $6,761 $10,117 -33%
Receivables, net 31,116 32,103 -3%
Inventories 20,271 21,480 -6%
Other Current Assets 13,643 31,543 -57%
------ ------
Total Current Assets 71,791 95,243
Property and Equipment, net 22,266 22,983 -3%
Other Long-Term Assets 34,250 26,734 28%
------ ------
$128,307 $144,960
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Notes Payable $16,589 $15,226 9%
Current Portion of Long-Term Obligations 648 1,367 -53%
Accounts Payable and Other Accrued
Liabilities 20,194 17,897 13%
Other Current Liabilities 20,762 17,830 16%
Reserve for Patent Litigation - 15,000 NM
--- ------
Total Current Liabilities 58,193 67,320
Other Long-Term Liabilities 7,710 8,929 -14%
Subordinated Notes 7,433 6,000 24%
----- -----
Total Other Long-Term Liabilities 73,336 82,249
------ ------
Shareholders' Equity 54,971 62,711 -12%
------ ------
$128,307 $144,960
======== ========
Flow International Corporation
Supplemental Data
(Unaudited)
US Dollars in thousands
Three months ended July 31,
2009 2008 % Change
---- ---- --------
Sales Breakdown:
Systems $24,403 $39,088 -38%
Consumable Parts 13,349 17,977 -26%
------ ------
Total $37,752 $57,065 -34%
======= =======
Segment Revenue Breakdown:
Standard $28,367 $52,754 -46%
Advanced 9,385 4,311 118%
----- -----
$37,752 $57,065 -34%
======= =======
Segment Operating Income (Loss) Breakdown:
Standard $(2,552) $10,433 NM
Advanced 1,791 (2,468) NM
All Other* (6,547) (4,225) -55%
Intersegment Eliminations (274) 17 NM
---- --
$(7,582) $3,757 NM
======= ======
* Includes corporate overhead expenses as well as general and
administrative expenses of inactive subsidiaries that do not constitute
segments.
Depreciation and Amortization Expense $1,232 $1,050 17%
Capital Spending $4,472 $1,300 244%
Flow International Corporation
Reconciliation of GAAP to Proforma
(Unaudited)
US Dollars in thousands, except per share data
Three months ended July 31,
2009 2008
---- ----
GAAP Income (Loss) from Continuing Operations $(7,398) $1,533
Adjustments:
OMAX Termination Charge 3,219 -
Restructuring and Other Operating Charges 1,604 1,436
Write-off of Deferred Debt Issuance Costs 253 -
Inventory Write-Off - 108
Tax Effect of Adjustments (384) -
------- ------
Proforma Income (Loss) from Continuing Operations $(2,707) $3,077
------- ------
GAAP Net Income (Loss) $(8,546) $1,603
Adjustments:
OMAX Termination Charge 3,219 -
Restructuring and Other Operating Charges 1,604 1,436
Write-off of Deferred Debt Issuance Costs 253 -
Inventory Write-Off - 108
Discontinued Operations 1,148 70
Tax Effect of Adjustments (384) -
------- ------
Proforma Net Income (Loss) $(2,707) $3,217
------- ------
Per Share Amounts
GAAP Basic and Diluted Income (Loss) Per Share
Income (Loss) from Continuing Operations $(0.20) $0.04
Net Income (Loss) $(0.23) $0.04
Proforma Basic and Diluted Income (Loss) per Share
Income (Loss) from Continuing Operations $(0.07) $0.08
Net Income (Loss) $(0.07) $0.08
