Revenues increase 21% in the Fourth Quarter
KENT, Wash., July 9 /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 2008 fourth quarter and year ended
April 30, 2008.
For the quarter, Flow reported that consolidated sales grew 21% to
$63.3 million, which compares to $52.3 million in the year-ago quarter. Net
income for the quarter was $13.3 million or $0.35 per basic and diluted
share, which compares to a net loss of $3.2 million or $0.09 basic and
diluted loss per share. Net income for the most recent quarter includes an
income tax benefit, which reflects the reversal of a valuation allowance on
U.S. net operating loss (NOL) carryforwards, and other net deferred tax
assets. Operating income for the fourth quarter was $6.2 million versus a
$3.5 million operating loss in the prior year quarter.
"We had an excellent quarter and year both in revenue growth and
improved profitability by capitalizing on the growing global demand for
innovative waterjet solutions," said Charley Brown, Flow's President and
Chief Executive Officer. "These results reflect the balanced nature of our
business where growing portions of our portfolio compensate for downturns
in other end markets or countries to deliver consistent double digit
growth."
Operations Review
For the fiscal 2008 fourth quarter, compared to the prior-year quarter:
-- System sales grew 20% to $45.6 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 17% to $33.9 million, from ongoing market penetration
and further 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 8% to $3.8 million. Last month Flow announced it had been awarded
Airbus' entire multi-million dollar contract to manufacture and install
multiple abrasive waterjet and routing machine tool systems, to be built
and installed over the next 18-24 months for use in manufacturing the new
Airbus A350 XWB (Xtra Wide-Body) aircraft.
-- Sales in Europe and South America, which comprise the Other
International Waterjet segment, increased 35% to $18.8 million on continued
strong demand for standard shapecutting systems and spare parts, as well as
a weak U.S. dollar relative to the Euro.
-- Sales in Asia increased 46% to $8.2 million, further indicating that
the business has rebuilt its revenue momentum.
-- As anticipated, the Canada-based Applications segment continued to
decline, from $3.6 million to $2.4 million. The decline is primarily the
result of the weak domestic auto industry and Flow's decision to cease the
money-losing sales of non-waterjet automation systems to focus solely on
sales of systems that integrate waterjet cutting technology. Flow announced
last month that it would be closing its Burlington, Canada facility, the
home of the Application segment, and moving the manufacturing and
engineering functions to its expanded Advanced Systems Center in
Jeffersonville, Indiana. Flow expects the cost of the closure and the move
of production to cost approximately $2.7 million in fiscal 2009.
-- Gross margins were 42%, which is an improvement from 41% in the
year- ago period. Operating expenses declined 18% as a result of additional
expense control, with the largest decrease in general and administrative
expenses based on a significant decrease in professional fees.
-- The $9.7 million improvement in operating profit was driven by
higher sales volumes, improved operating leverage and expense control and
elimination of one-time charges.
Conference Call
Flow plans to hold a conference call to discuss these results today:
Wednesday, July 9 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). The
conference call may be heard by dialing 1-303-205-0066. A 48-hour replay
will be available following the call by dialing 1-303-590-3000; the replay
passcode is 11116682. 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 April 30, 2007
Flow International Corporation Form 10-K Report filed with the Securities
and Exchange Commission. Forward-looking statements in this press release
include, without limitation, statements regarding the growth of portions of
the Company's portfolio of business, increases in the installed base of
machines, revenue momentum in Asia, and the costs of the Burlington
closure. 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 Statement of Income
(Unaudited)
Dollars in thousands,
except per share data
Three months ended Twelve months ended
April 30, April 30,
% %
2008 2007 Change 2008 2007 Change
Sales $63,274 $52,256 21% $244,259 $213,435 14%
Cost of sales 36,792 30,947 19% 142,549 122,662 16%
Gross margin 26,482 21,309 24% 101,710 90,773 12%
Operating
expenses:
Sales and
marketing 10,481 9,787 7% 42,272 39,478 7%
Research
and
engineering 2,183 2,332 -6% 8,771 9,383 -7%
General and
administrative 7,636 12,729 -40% 33,888 37,255 -9%
Operating
expenses 20,300 24,848 -18% 84,931 86,116 -1%
Operating income
(loss) 6,183 (3,540) NM 16,779 4,658 260%
Interest income,
net 60 75 -20% 361 429 -16%
Other income
(expense), net (1,090) 117 NM (1,846) 1,922 NM
Income (loss)
before taxes 5,153 (3,347) NM 15,294 7,008 118%
Income tax
(provision)
benefit 8,158 (23) NM 6,617 (2,986) NM
Income (loss)
from continuing
operations 13,310 (3,371) NM 21,911 4,023 445%
Loss on sale of
discontinued
operations 42 -100% - (685) -100%
Income from
operations of
discontinued
operations, net
of tax 25 127 -80% 443 418 6%
Net income
(loss) $13,335 $(3,202) -516% $22,354 $3,756 495%
Per share amounts:
Basic income
(loss) from
continuing
operations $0.35 $(0.09) NM $0.59 $0.11 NM
Diluted income
(loss) from
continuing
operations $0.35 $(0.09) NM $0.58 $0.11 NM
Basic net income
(loss) $0.35 $(0.09) NM $0.60 $0.10 NM
Diluted net
income (loss) $0.35 $(0.09) NM $0.59 $0.10 NM
Weighted average
shares outstanding
(000):
Basic 37,588 37,263 37,421 37,192
Diluted 37,920 37,263 37,893 37,868
NM = not meaningful
Flow International Corporation
Supplemental Data
(Unaudited)
Dollars in thousands
Three months ended Twelve months ended
April 30, April 30,
% %
2008 2007 Change 2008 2007 Change
Divisional revenue
breakdown:
Systems $45,621 $37,149 23% $176,755 $155,463 14%
Consumable
parts 17,653 15,107 17% 67,504 57,972 17%
Total $63,274 $52,256 21% $244,259 $213,435 14%
Segment revenue
breakdown:
North America
Waterjet $33,899 $29,115 17% $130,556 $119,147 10%
Asia Waterjet 8,171 5,600 46% 30,739 30,845 0%
Other
International
Waterjet 18,861 13,969 35% 67,804 49,674 36%
Applications 2,343 3,572 -34% 15,160 13,769 10%
$63,274 $52,256 21% $244,259 $213,435 14%
Depreciation and
amortization
expense $1,327 $774 71% $3,963 $2,970 33%
Capital spending $1,600 $2,548 -37% $6,333 $6,995 -9%
Flow International Corporation
Selected Balance Sheet Data
Dollars in thousands
April 30, April 30,
2008 2007 % Change
Cash $29,099 $38,288 -24%
Receivables, net 33,632 27,329 23%
Inventories 29,339 26,593 10%
Total debt 4,428 9,967 -56%
SOURCE Flow International
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Related links:
http://www.flowcorp.com
CONTACT:
Flow Investor Relations, Geoffrey Buscher,
+1-253-813-3286, investors@flowcorp.com
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