EPS Triples on 18% Increase in Revenues
KENT, Wash., March 6 /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 its fiscal 2008 third quarter
ended January 31, 2008.
For the quarter, Flow reported that consolidated sales grew 18% over
the prior-year quarter to $66.3 million. Earnings increased more than
threefold to $0.16 per basic and diluted share compared to $.05 in the
prior-year quarter. Net income totaled $5.9 million, up from $2.0 million
last year.
"Our results this quarter further demonstrate the potential strength in
global demand for our unique cutting solutions," said Charley Brown, Flow's
President and Chief Executive Officer. "The vast majority of global
shapecutting continues to be performed by saws, blades, and other
traditional methods. We're working to change that through ongoing
innovation and continuing to build market awareness of the superior
benefits of waterjets. Our industry-leading 87,000 psi waterjet systems are
generating strong interest in our domestic markets and abroad."
Operations Review
For the fiscal 2008 third quarter, compared to the prior-year quarter:
* System sales grew 17% to $49.1 million globally, on increased
marketplace awareness of the advantages of waterjets in general, as
well as from recent product development and technology enhancements
by Flow. Revenues from consumables increased 22% to $17.2 million
globally, as the Company continues to increase its installed base of
machines.
* In North America Waterjet the standard systems and spare parts
business increased 18% to a record $30.3 million as a result of
ongoing market penetration and adoption of the Hyperpressure 87,000
psi product line. Aerospace industry revenues, which can fluctuate
considerably depending on the timing of individual project's
manufacturing schedules and shipments, increased 1% to $2.8 million.
Flow continues to be optimistic regarding the aerospace business and
expects that the shift in the timing of several large commercial
aerospace systems orders will lead to increased revenues during the
coming quarters.
* Europe and South America sales, which comprise the Other
International Waterjet segment, increased 34% to $17.5 million on
continued strong demand for standard shapecutting systems and spare
parts, as well as a weak U.S. dollar relative to the Euro. Asia
sales increased 1% to $9.8 million, reflecting the first quarterly
increase in a year, indicating that the business has begun to
recover from the impacts of the ongoing slowdown in the flash memory
semiconductor industry and last year's internal investigations.
* The Canada-based Applications segment increased 22% to $5.8 million,
mostly on the strengthening Canadian Dollar. In September, Flow
announced that it would no longer pursue sales of non-waterjet
automation systems in order to focus solely on sales of systems that
integrate waterjet cutting technology. The last non-waterjet system
has now left the factory and is in the installation process.
* Gross margins, which continued to show improvement from earlier in
the year, were 42%, consistent with the prior-year period. Operating
expenses were down 10% due to tight expense control combined with
lower professional fees including the year-over-year impact of the
Asia Investigations that were concluded in March 2007.
Omax Acquisition Update
As previously announced, on December 4, 2007, Flow entered into an
exclusive option agreement to negotiate the acquisition of OMAX
Corporation, a Kent, WA-based privately held provider of
precision-engineered, computer-controlled, abrasive waterjet systems. On
February 6, 2008, Flow received a request for additional information and
documentary material from the Federal Trade Commission (FTC) in connection
with the proposed acquisition. Flow is cooperating fully with the FTC to
provide the necessary information and expects to complete the acquisition.
Conference Call
Flow plans to hold a conference call to discuss these results today:
Thursday, March 6 at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). The
conference call may be heard by dialing 1-303-262-2054. A 48-hour replay
will be available following the call by dialing 1-303-590-3000; the replay
passcode is 11109620. 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.
Except for historical information contained herein, statements in the
release are forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and
uncertainties, which may cause the Company's actual results in future
periods to differ materially from forecasted results. Those risks include,
but are not limited to, risks associated with continuing to increase its
installed base of machines, being optimistic regarding the aerospace
business and the expectation of increased aerospace revenues during the
coming quarters, the recovery of the Asia business has begun, strong demand
for standard shapecutting systems and spare parts, and the expectation that
the OMAX acquisition will be completed, Other risks are described in the
Company's filings with the Securities and Exchange Commission (the "SEC")
over the last 12 months, copies of which are available from the SEC or may
be obtained from the Company.
Flow International Corporation
Consolidated Statement of Income
(Unaudited)
Dollars in thousands, except per share data
Three months ended Nine months ended
January 31, January 31,
2008 2007 % Change 2008 2007 % Change
Sales $66,271 $56,038 18% $184,111 $163,851 12%
Cost of sales 38,293 32,294 19% 108,098 93,464 16%
Gross margin 27,978 23,744 18% 76,013 70,387 8%
Operating expenses:
Sales and
marketing 10,569 9,613 10% 32,009 29,774 8%
Research and
engineering 2,163 2,419 -11% 6,588 7,051 -7%
General and
administrative 6,421 9,267 -31% 26,112 25,269 3%
Operating expenses 19,153 21,299 -10% 64,709 62,094 4%
Operating income 8,825 2,445 261% 11,304 8,293 36%
Interest income,
net 37 153 -76% 301 354 -15%
Other income
(expense), net (423) 846 -150% (690) 1,871 -137%
Income before taxes 8,439 3,444 145% 10,915 10,518 4%
Income tax
(provision)
benefit (2,542) (1,415) 80% (2,346) (2,979) -21%
Income from
continuing
operations 5,897 2,029 191% 8,569 7,539 14%
Discontinued
operations, net
of tax - - - (726) NM
Net income $5,897 $2,029 191% $8,569 $6,813 26%
Per share amounts:
Basic income
from continuing
operations $0.16 $0.05 220% $0.23 $0.20 15%
Diluted income
from continuing
operations $0.16 $0.05 220% $0.23 $0.20 15%
Basic net
income $0.16 $0.05 220% $0.23 $0.18 28%
Diluted net
income $0.16 $0.05 220% $0.23 $0.18 28%
Weighted average
shares outstanding
(000):
Basic 37,471 37,238 37,366 37,169
Diluted 37,652 37,797 37,572 37,882
NM = not meaningful
Flow International Corporation
Supplemental Data
(Unaudited)
Dollars in thousands
Three months ended Nine months ended
January 31, January 31,
2008 2007 % Change 2008 2007 % Change
Divisional revenue
breakdown:
Systems $49,111 $41,938 17% $134,180 $120,986 11%
Consumable
parts 17,160 14,100 22% 49,931 42,865 17%
Total $66,271 $56,038 18% $184,111 $163,851 12%
Segment revenue
breakdown:
North America
Waterjet $33,125 $28,439 17% $96,459 $90,027 7%
Asia Waterjet 9,821 9,756 1% 22,569 25,245 -11%
Other
International
Waterjet 17,548 13,110 34% 48,941 35,694 37%
Applications 5,777 4,733 22% 16,142 12,885 25%
$66,271 $56,038 18% $184,111 $163,851 12%
Depreciation and
amortization
expense $856 $783 9% $2,636 $2,196 20%
Capital spending $2,192 $1,886 16% $4,733 $4,447 6%
Flow International Corporation
Selected Balance Sheet Data
Dollars in thousands
January 31, April 30,
2008 2007 % Change
Cash $20,397 $38,146 -47%
Receivables, net 34,412 26,618 29%
Inventories 29,876 26,635 12%
Total debt 4,128 9,967 -59%
Flow Investor Relations
Geoffrey Buscher
253-813-3286
investors@flowcorp.com
SOURCE Flow International Corporation
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Related links:
http://www.flowcorp.com
CONTACT:
Geoffrey Buscher of Flow International
Corporation, +1-253-813-3286, investors@flowcorp.com
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