KENT, Wash., July 12 /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 2007 fourth quarter
and year ended April 30, 2007. For the quarter, Flow reported consolidated
sales of $53.4 million and a net loss of $3.1 million or $0.08 basic and
diluted loss per share. Net loss from continuing operations for the quarter
was $3.2 million or $0.09 basic and diluted loss per share. The current
results include a $2.9 million expense related to the amortization of the
retiring CEO's employment contract and $450,000 for expenses related to the
now-completed Korea investigation.
By comparison, in the year-ago fourth quarter Flow reported
consolidated sales of $65.2 million and net income of $8.7 million or $0.25
basic and $0.23 diluted earnings per share. The year-ago fourth quarter
results include a $575,000 restructuring expense, which represented the
remaining lease and related costs on a vacated Wixom, Michigan facility.
Stephen R. Light, Flow's President and Chief Executive Officer,
commented: "The slowdown during our fourth fiscal quarter in a few markets,
including aerospace and domestic housing, was not unexpected. While demand
continues to increase for our aerospace customers, they have yet to make
the decision to increase production. We also believe that many of our North
American customers are awaiting the rollout of the 87,000 psi hyperpressure
pump across our entire product line during fiscal 2008.
"In addition, our Asia business was significantly impacted as a result
of two now-completed investigations and subsequent reorganizations of
certain senior management in those geographies. Our ability to sell into
those markets was severely limited while the investigations were ongoing.
Those issues are behind us. While demand in some markets is not growing as
rapidly as it had -- most notably semiconductors, which has been beset by
overcapacity and heavy pricing pressure -- others continue to pick up, and
we have been ramping to meet the growing demand for waterjets."
In February 2007, Stephen Light announced his plans to retire from Flow
upon appointment of a new CEO. Charles "Charley" Brown was recently named
incoming CEO and will assume responsibilities from Mr. Light upon Mr.
Light's retirement.
Operations Review
For the fiscal 2007 fourth quarter, compared to the prior-year quarter:
* Total system revenues declined 27% to $38.3 million, largely as a
result of the highly publicized cancellation of work on two large
aerospace systems, delays in receiving additional aerospace system
orders, and the absence of a new Nanojet system sales.
* Revenues from aftermarket consumable increased 19% to $15.1 million, as
the Company continues to increase its installed base of machines and
increase its share of ongoing spare parts and maintenance work for
those systems. Flow supports more than 75% of its installed base of
machines, each of which requires roughly 5% of its original purchase
price in spare and consumable parts annually.
* North America Waterjet sales declined 11% to $29.3 million, as a result
of the cancellation of the two large Airbus A-350 aerospace systems, as
well as timing of certain contract awards. Aerospace and Defense
industry sales fluctuate, due to the timing of the project design,
manufacturing schedule, and final shipment to the customer.
* Despite the year-over-year decline in the quarter, the Company expects
to benefit over the next few years from an ongoing expansion of the use
of carbon fiber composites in commercial and defense aerospace and
ground transportation applications.
* As expected, sales in Asia during the fourth quarter continued to be
adversely affected by the Company's recently completed Asia
investigations, as well as the slowdown in the flash memory
semiconductor industry. Sales in Asia declined 65% to $5.6 million.
In addition, the Company's fiscal 2006 fourth quarter results included
the benefit of a large Nanojet launch order.
* Other International Waterjet sales, consisting of sales in Europe and
South America, increased 20% to $14.0 million as a result of ongoing
strong shapecutting system demand and helped by a persistently weak
U.S. dollar relative to the Euro. The Company expects to continue to
benefit from its significant investment in its European sales and
marketing efforts, as well as the forthcoming introduction of the
87,000 psi hyperpressure pump to its European systems.
* Revenues declined 8% to $4.5 million 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, which has been soft. The Company has slowed the rate of
decline in recent quarters as it continues to shift its sales and
marketing focus away from automotive applications.
Conference Call
Flow plans to hold a conference call to discuss these results today:
Thursday, July 12 at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). The
conference call may be heard by dialing 1-303-262-2138. A 48-hour replay
will be available following the call by dialing 1-303-590-3000; the replay
passcode is 11093156. 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 demand in waterjet markets
including aerospace, the timing of the CEO transition, increasing spares
sales, expansion of the use of carbon fiber composites, expected increases
in European sales, and the slowing rate of decline in the Applications
segment. Those and 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.
Contact:
Flow Investor Relations
253.813.3286
Flow International Corporation
Consolidated Statement of Operations
(Unaudited)
Dollars in thousands,
except per share data
Three months ended Twelve months ended
April 30, April 30,
2007 2006 %Change 2007 2006 %Change
Sales $53,428 $65,231 -18% $217,279 $205,432 6%
Cost of sales 31,679 31,528 0% 125,143 111,276 12%
Gross margin 21,749 33,703 -35% 92,136 94,156 -2%
Operating expenses:
Sales and
marketing 10,036 10,111 -1% 39,810 33,919 17%
Research and
engineering 2,332 1,650 41% 9,383 7,290 29%
General and
administrative 12,523 11,510 9% 37,792 33,166 14%
Restructuring -- 575 -100% -- 1,236 -100%
Gain on Barton
sale -- -- NM -- (2,500) NM
Operating expenses 24,891 23,846 4% 86,985 73,111 19%
Operating income
(loss) (3,142) 9,857 -132% 5,151 21,045 -76%
Interest income
(expense), net 67 82 -19% 420 (1,259) -133%
Fair Value Adjustment
on Warrants Issued -- 37 -100% -- (6,915) -100%
Other income
(expense), net (50) 1,678 NM 1,821 310 487%
Income (loss) before
provision for income
taxes (3,125) 11,654 NM 7,392 13,181 -44%
Provision for income
taxes (58) (2,970) -98% (3,037) (5,183) -41%
Income (loss) from
continuing operations (3,183) 8,684 NM 4,355 7,998 NM
Income from
discontinued
operations, net of
tax -- -- NM -- 966 NM
Gain (loss) on sale of
discontinued
operations, net of
tax 41 -- NM (685) (1,554) -56%
Net Income (loss) $(3,142) $8,684 NM $3,670 $7,410 NM
Income (Loss) per
share:
Basic from
continuing
operations $(0.09) $0.25 NM $0.12 $0.23 NM
Diluted from
continuing
operations $(0.09) $0.23 NM $0.12 $0.22 NM
Basic net income
(loss) $(0.08) $0.25 NM $0.10 $0.21 NM
Diluted net income
(loss) $(0.08) $0.23 NM $0.10 $0.20 NM
Weighted average
shares outstanding
(000):
Basic 37,263 35,297 37,192 34,676
Diluted 37,263 37,359 37,868 36,651
NM = not meaningful
Flow International Corporation
Supplemental Data
(Unaudited)
Dollars in thousands
Three months ended Twelve months ended
April 30, April 30,
2007 2006 %Change 2007 2006 %Change
Divisional revenue
breakdown:
Flow Waterjet
Systems:
Systems $38,321 $52,579 -27% $159,307 $153,097 4%
Consumable parts
and services 15,107 12,652 19% 57,972 52,335 11%
Total $53,428 $65,231 -18% $217,279 $205,432 6%
Segment revenue
breakdown:
North America
Waterjet $29,312 $32,785 -11% $119,339 $109,686 9%
Asia Waterjet 5,600 15,860 -65% 30,845 36,264 -15%
Other
International
Waterjet 13,969 11,651 20% 49,663 38,664 28%
Other 4,547 4,935 -8% 17,432 20,818 -16%
$53,428 $65,231 -18% $217,279 $205,432 6%
Depreciation and
amortization expense $724 $345 110% $2,920 $3,327 -12%
Capital spending $2,548 $990 157% $6,995 $2,357 197%
Flow International Corporation
Selected Balance Sheet Data
Dollars in thousands
April 30, April 30,
2007 2006 %Change
Cash $38,146 $36,186 5%
Receivables, net 26,618 34,193 -22%
Inventories 26,635 22,775 17%
Total debt 9,967 7,021 42%
SOURCE Flow International Corporation
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Related links:
http://www.flowcorp.com
CONTACT:
Flow Investor Relations, +1-253-813-3286
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