Global Revenues up 16% and Net Income up 360% in the First Half of Fiscal
2007
KENT, Wash., Feb. 2 /PRNewswire-FirstCall/ -- Flow International
Corporation (Nasdaq: FLOW), the world's leading developer and manufacturer
of industrial waterjet machines used for cutting and cleaning applications
around the world, today reported results for the six months ended October
31, 2006. For comparison purposes, fiscal 2007 first and second quarter
financial schedules are also included at the end of this press release. On
February 1, the Company filed with the Securities and Exchange Commission
its Form 10-Qs for the quarters ended July 31 and October 31, 2006,
bringing Flow back into compliance with the SEC's filing requirements.
For the six months ended October 31, 2006, Flow reported an increase in
consolidated sales of 16% to $107.8 million. Net income was $4.8 million,
or $0.13 basic and diluted earnings per share. Results for the six months
included a loss on the sale of discontinued operations of $726,000 related
to the settlement of a working capital dispute with the purchaser of the
Company's Avure business. Income from continuing operations for the six
months ended October 31, 2006, was $5.5 million, $0.15 basic and diluted
earnings per share. Earnings included approximately $1.5 million in costs
related to the investigation in Asia.
By comparison, for the first six months ended October 31, 2005, Flow
reported consolidated sales of $92.7 million and net income of $1.0 million
or $0.03 basic and diluted earnings per share. Net Income was impacted by
the gain on sale of the garnet distribution business, the loss on the sale
of Avure and the fair value adjustment on warrants issued, totaling a net
reduction of approximately $2.5 million. Income from continuing operations
for the six months ended October 31, 2005 was $1.2 million or $0.04 basic
and $0.03 diluted earnings per share.
"We've had six months of strong growth, with sales up 16% despite the
significant internal resources diverted to complete the four-month
investigation in Asia," said Stephen R. Light, Flow's President and Chief
Executive Officer. "With strength in standard waterjet markets and flash
memory markets, as with job shops and metal fabricators, the widespread
global demand for our waterjets and the underlying pump technology
continues unabated across an increasingly diverse range of industries. We
continue to add bench- strength at the executive level and throughout our
organization to ensure that we have the resources to manage our growth."
Operations Review
For the fiscal 2007 six months, compared to the prior-year six months:
-- System sales grew 20% to $79.0 million, representing 73% of revenues,
on strength in waterjet sales in all regions and sales of large
aerospace systems. Growth in the quarter ended October 31, 2006, was
impacted by the previously announced cancellation of work on two large
aerospace systems. The Company expects this cancellation will limit
growth in aerospace sales in the third quarter as well.
-- Revenues from aftermarket consumables grew 7% to $28.8 million, as the
Company continues to increase system sales and thereby expand its
installed base of customers in need of parts. In addition, the Company
continues to benefit from its Flowparts.com customer-care website,
which has seen steady growth amongst new and repeat customers in the
two years since its inception, prompting the launch of
Flowparts.com/Europe in fiscal 2006.
-- North America Waterjet sales increased 19% to $61.6 million during the
six months, with shapecutting sales benefiting from orders following
the bi-annual IMTS trade show in September, and the introduction of new
products capable of serving even more diverse segments of the
marketplace. For instance, in late fiscal 2006, Flow introduced the
Stonecrafter(TM), a system specifically designed for the stone and tile
industry, as well as a new 87,000 HyperPressure(TM) psi pump which
significantly increases cutting speeds over the 60,000 psi currently in
use in the industry.
-- Six-month sales in Asia increased 17% to $15.5 million on strong sales
in the semiconductor industry, ongoing expansion of the standard
shapecutting business, and strong aftermarket sales. Results were
affected by the investigation in Asia and the related departure of
three employees. The Company expects results in the second half of the
year to continue to be adversely affected.
-- Other International Waterjets sales, which consist primarily of sales
to Europe and South America, increased 31% to $22.6 million, on strong
demand for Flow's shapecutting systems amidst a weak U.S. Dollar
relative to the Euro. The Company has made meaningful investment in
its European sales and marketing efforts to continue to boost sales
across Europe and the Middle East.
-- Revenues in the Applications segment, which represents sales of
automation and robotic waterjet cutting cells and non-waterjet systems
primarily to the North American automotive market, decreased 23% to
$8.2 million, due to the ongoing softness in the automotive industry
and the impact of strategically repositioning the business which
included closing and relocating he Wixom facility to the Burlington,
Ontario facility in September 2005. Flow recently received three
orders from the U.S. Army supplier for the Company's first ground
transportation composite cutting cell, to be used on Army Humvee parts.
Conference Call
Flow plans to hold a conference call on Friday, February 2 at 8:30 a.m.
Eastern Time (5:30 a.m. Pacific Time) to discuss these results. The
conference call may be heard by dialing 1-303-262-2139. A 48-hour replay
will be available following the call by dialing 1-303-590-3000; the replay
passcode is 11082935. 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," "may,"
"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 January 30, 2007 Flow International Corporation Form 10-K/A filed with
the Securities and Exchange Commission. Forward-looking statements in this
press release include, without limitation, statements that the global
product demand will continue unabated, that the Company will continue to
add bench strength, that the Company expects cancellation of work on two
aerospace systems to affect sales in the third quarter, that the Company
expects results in the second half of the year to be affected by the Asia
investigation and that investments in European sales and marketing will
continue to boost sales. 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 Statement of Income
(Unaudited)
Dollars in thousands, except per share data
Three months ended Six months ended
October 31, October 31,
% %
2006 2005 Change 2006 2005 Change
Sales $54,404 $50,685 7% $107,814 $92,671 16%
Cost of sales 30,792 28,351 9% 61,171 52,404 17%
Gross margin 23,612 22,334 6% 46,643 40,267 16%
Operating expenses:
Marketing 10,563 7,873 34% 20,160 15,449 30%
Research and
engineering 2,339 1,692 38% 4,633 3,570 30%
General and
administrative 8,982 7,135 26% 16,002 13,350 20%
Restructuring - 487 NM - 585 NM
Gain on Barton Sale - (2,500) NM - (2,500) NM
Operating expenses 21,884 14,687 49% 40,795 30,454 34%
Operating income 1,728 7,647 -77% 5,848 9,813 -40%
Interest expense, net 107 (437) NM 201 (1,363) NM
Fair Value Adjustment on
Warrants Issued - (4,157) NM - (4,835) NM
Other (expense) income,
net 399 528 -24% 1,025 (579) NM
Income before provision
for income taxes 2,234 3,581 NM 7,074 3,036 NM
Provision for income
taxes (492) (1,232) -60% (1,564) (1,815) -14%
Income from continuing
operations 1,742 2,349 -26% 5,510 1,221 351%
(Loss) income from
discontinued operations,
net of tax - (184) NM - 966 NM
Loss on sale of
discontinued operations,
net of tax - (1,147) NM (726) (1,147) -37%
Net income $1,742 $1,018 NM $4,784 $1,040 NM
Income per share:
Basic from continuing
operations $0.05 $0.07 NM $0.15 $0.04 NM
Diluted from continuing
operations $0.05 $0.07 NM $0.15 $0.03 NM
Basic net income $0.05 $0.03 NM $0.13 $0.03 NM
Diluted net income $0.05 $0.03 NM $0.13 $0.03 NM
Weighted average shares
outstanding (000):
Basic 37,194 34,597 37,134 34,448
Diluted 37,879 36,137 37,887 36,065
NM = not meaningful
Flow International Corporation
Supplemental Data
(Unaudited)
Dollars in thousands
Three months ended Six months ended
October 31, October 31,
% %
2006 2005 Change 2006 2005 Change
Divisional revenue
breakdown:
Flow Waterjet Systems:
Systems $39,703 $36,950 7% $79,048 $65,671 20%
Consumable parts
and services 14,701 13,735 7% 28,766 27,000 7%
Total $54,404 $50,685 7% $107,814 $92,671 16%
Segment revenue
breakdown:
North America
Waterjet $30,079 $28,644 5% $61,588 $51,571 19%
Asia Waterjet 8,133 7,468 9% 15,489 13,236 17%
Other International
Waterjet 11,943 8,789 36% 22,584 17,242 31%
Applications 4,249 5,784 -27% 8,153 10,622 -23%
$54,404 $50,685 7% $107,814 $92,671 16%
Depreciation and
amortization expense $707 $1,172 -40% $1,413 $2,337 -40%
Capital spending $1,768 $361 NM $2,853 $880 NM
Flow International Corporation
Selected Balance Sheet Data
Dollars in thousands
October 31, April 30,
2006
2006 (restated) % Change
Cash $32,648 $36,186 -10%
Receivables, net 27,462 34,193 -20%
Inventories 28,155 22,775 24%
Total debt 6,261 7,021 -11%
Flow International Corporation
Consolidated Statement of Income
(Unaudited)
Dollars in thousands, except per share data
Three months ended July 31,
2006 2005 % Change
Sales $53,410 $41,986 27%
Cost of sales 30,378 24,053 26%
Gross margin 23,032 17,933 28%
Operating expenses:
Sales and marketing 9,597 7,576 27%
Research and engineering 2,294 1,878 22%
General and
administrative 7,020 6,215 13%
Restructuring - 98 NM
Operating expenses 18,911 15,767 20%
Operating income 4,121 2,166 90%
Interest income (expense), net 94 (926) NM
Fair Value Adjustment on
Warrants Issued - (678) -100%
Other income (expense), net 625 (1,107) NM
Income (loss) before taxes 4,840 (545) NM
Income tax provision (1,072) (583) 84%
Income (loss) from
continuing operations 3,768 (1,128) NM
Discontinued operations,
net of tax (726) 1,150 NM
Net income $3,042 $22 NM
Net income (loss) per
share:
Basic from continuing
operations $0.10 $(0.03) NM
Diluted from continuing
operations $0.10 $(0.03) NM
Basic $0.08 $0.00 NM
Diluted $0.08 $0.00 NM
Weighted average shares
outstanding (000):
Basic 37,075 34,299
Diluted 37,877 34,299
NM = not meaningful
Flow International Corporation
Supplemental Data
(Unaudited)
Dollars in thousands
Three months ended July 31,
2006 2005 % Change
Divisional revenue breakdown:
Systems $39,346 $28,721 37%
Consumable parts 14,064 13,265 6%
Total $53,410 $41,986 27%
Segment revenue breakdown:
North America
Waterjet $31,509 $22,927 37%
Asia Waterjet 7,356 5,768 28%
Other International
Waterjet 10,641 8,453 26%
Applications 3,904 4,838 -19%
$53,410 $41,986 27%
Depreciation and
amortization expense $706 $1,165 -39%
Capital spending $1,085 $519 109%
Flow International Corporation
Selected Balance Sheet Data
Dollars in thousands
July 31, April 30,
2006
2006 (restated) % Change
Cash $38,955 $36,186 8%
Receivables, net 28,127 34,193 -18%
Inventories 25,252 22,775 11%
Total debt 6,377 7,021 -9%
Contact:
Flow Investor Relations
253-813-3286
SOURCE Flow International Corporation
 back to top
Related links:
http://www.flowcorp.com/
CONTACT:
Flow Investor Relations, +1-253-813-3286
|
