KENT, Wash., March 19 /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, will delay releasing the results for its third fiscal
2007 quarter ended January 31, 2007. As previously disclosed, Flow's
internal audit department discovered irregularities in bank accounts and
customer receivables during a scheduled internal audit of its Korean
operation, and the Company cannot file its Form 10-Q for the January
quarter until that work is complete. Flow intends to complete the
investigation, file its Form 10-Q and schedule a conference call to discuss
results of the quarter as soon as possible. Until the Form 10-Q is filed,
Flow will not be in compliance with NASDAQ's listing criteria.
Flow does not anticipate any material financial impact as a result of
the internal audit work at its Korean subsidiary, which is located in
Inchon with six employees, who sell and service waterjet cutting machines
and industrial cleaning devices directly and through distribution. Revenue
from the unit, which is financially consolidated into the Flow Asia
Waterjet segment, was less than one percent (1%) of total company revenue
in fiscal 2006. The amounts thus far identified in the investigation are
not considered material to the Company's financial performance. The company
maintains insurance against such losses.
During the course of a regularly scheduled internal audit by Flow's
Internal Audit Department of its Korean sales and service operation, the
Company discovered irregularities in its accounts receivable and banking
records. As a result, the Company immediately began an investigation into
those irregularities to determine the financial impact to the Company, as
well as any potential impacts on related parties, such as customers or
suppliers. Facts uncovered during the investigation lead the Company to
believe that a single local Korean employee may have stolen monies from the
Company by converting customer payments through a banking scheme. The
employee has confessed to the fraud and has been placed on administrative
leave. She is cooperating with the continuing investigation.
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 include the Company's belief that there
will not be any material impact from the investigation. 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 April 30, 2006 Flow International
Corporation Form 10-K/A Report filed with the Securities and Exchange
Commission. 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
253-813-3286
SOURCE Flow International
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Related links:
http://www.flowcorp.com/
CONTACT:
Flow Investor Relations, +1-253-813-3286
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