Ends Profitable Year With Double-Digit Revenue Growth
KENT, Wash., July 13 /PRNewswire-FirstCall/ -- Flow International
Corporation (Nasdaq: FLOW), the world's leading supplier of
ultrahigh-pressure waterjet products, today reported preliminary results
for its fiscal 2006 fourth quarter and year ended April 30, 2006. Flow
reported consolidated quarterly sales of $63.3 million and operating income
of $7.0 million or 11% of sales. Net income for the quarter was $6.8
million or $0.19 basic earnings per share and $0.18 per fully diluted
share. Preliminary results for the quarter include a $575,000 restructuring
expense, which represents the remaining lease and related costs on its
vacated Wixom, Michigan facility.
By comparison, in the fiscal 2005 fourth quarter, Flow reported
consolidated sales of $48.8 million and operating income of $3.3 million.
Loss from continuing operations for the fiscal 2005 fourth quarter was $8.0
million or $0.34 basic and diluted loss per share. Net loss in the year-ago
quarter was $15.0 million or $0.64 basic and diluted loss per share and
included a $7.1 million loss related to the Avure business unit, which the
Company divested in October 2005.
Stephen R. Light, Flow's President and Chief Executive Officer,
commented: "These record results for the quarter are a fine finish to a
very good fiscal year, as we worked hard to meet the strengthened demand
across geographies and markets, from aerospace to stone and tile. We are
doubling our efforts to contain the items that impacted results during the
past fiscal year, and we continue to be optimistic as we enter fiscal 2007.
We recently introduced a new industry-leading 87,000 psi pump that
dramatically increases cutting speeds, and we look forward to further new
product introductions and a strong presence at our industry's most visible
trade show -- IMTS -- in early September."
For the twelve months ended April 30, 2006, Flow reported consolidated
sales of $203.5 million, compared to $173.0 million for the same 12-month
period in fiscal 2005. For the 12 months ended April 30, 2006, Flow
reported net income from continuing operations of $6.1 million or $0.18 per
basic share and $0.17 per diluted share. That compares to net loss from
continuing operations of $12.2 million or $0.69 loss per basic and diluted
share in the year-ago 12-month period. Including a $588,000 net loss from
the discontinued Avure business, net income for the 12-month period ended
April 30, 2006, was $5.6 million or $0.16 per basic share and $0.15 per
diluted share. By comparison, for the 12 months of fiscal 2005, the Company
reported a net loss of $21.2 million, or $1.19 basic and diluted loss per
share, which included a $9.0 million net loss related to the divested Avure
business.
Operations Review
For the fiscal 2006 fourth quarter, compared to the prior-year quarter:
o System sales grew 42% to $50.4 million, representing 80% of revenues
during the quarter, on strong aerospace, semiconductor and domestic
shapecutting sales. Revenues from aftermarket consumables were
$12.8 million, which is slightly down comparatively from the year-ago
period resulting from the Company's sale of its garnet distribution
operation in the fiscal second quarter. However, growth in consumables
revenue has increased along with the growth in the installed base of
waterjets as well as from Flow's increased penetration of that installed
base. Flow believes it is the leader in the waterjet cutting systems
market, with approximately 40% of the global market and more than 60% of
the North America market. For the year, aftermarket sales, adjusted for
sale of the garnet business, increased 6% consistent with the increase
in the installed base.
o North America Waterjet sales increased 34% to $32.8 million during the
quarter on the strength of U.S. shapecutting system sales. The Company
continued to enjoy strong revenues from new large aerospace system
sales, as that industry increasingly recognizes the accuracy, speed, and
versatility advantages of the waterjet over conventional cutting
technologies. Currently, Flow offers the only product used to waterjet
cut the composite wings of the new large commercial airplanes.
o Sales in Asia increased 104% to $13.9 million on the strength of sales
to the semiconductor industry. In November 2005, Flow introduced its
Nanojet system, which is tailored specifically for the semiconductor
industry and has thus far been well received in the marketplace.
o Other International Waterjets sales, which consist primarily of sales to
Europe and South America, increased 7% to $11.7 million, on strengthened
demand in Europe for waterjets and improving market penetration. The
Company continues to make additional investments in sales and marketing
in Europe to boost sales in European countries.
o Revenues in the Applications segment declined 27% to $4.9 million as a
result of ongoing softness in the automotive industry. Flow's
Applications group sells automation and robotic waterjet cutting cells
and non-waterjet systems primarily to the North American automotive
market. Applications revenues were also down comparatively because of
the closing and relocation of the Company's Wixom, Michigan facility to
its Burlington, Ontario facility in September 2005. Flow's Applications
group has de-emphasized sales of non-waterjet systems to focus on sales
of systems that integrate waterjet cutting cells. While the impact of
this strategic shift has been to reduce Applications revenues in the
short-term, the Company believes that it better positions the group
strategically.
Conference Call
Flow International will host a conference call today: Thursday, July 13
at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) to discuss these
results. The conference call may be heard by dialing 1-303-262-2137. A
48-hour replay will be available following the call by dialing
1-303-590-3000; the replay passcode is 11061943. 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.
Contact: Flow Investor Relations
253-813-3286
Flow International Corporation
Preliminary Consolidated Statement of Operations
(Unaudited)
Dollars in thousands, except per share data
Three months ended Year ended
April 30, April 30,
% %
2006 2005 Change 2006 2005 Change
Sales $ 63,265 $48,830 30% $203,466 $172,966 18%
Cost of sales 32,629 28,246 16% 112,377 106,943 5%
Gross margin 30,636 20,584 49% 91,089 66,023 38%
Operating expenses:
Marketing 10,111 7,707 31% 33,919 28,371 20%
Research
and engineering 1,650 1,616 2% 7,290 5,889 24%
General and
administrative 11,284 7,976 41% 32,940 22,849 44%
Financial consulting -- -- 0% -- 623 -100%
Restructuring 575 -- NM 1,236 -- NM
Gain on Barton Sale -- -- NM (2,500) -- NM
Operating expenses 23,620 17,299 37% 72,885 57,732 26%
Operating income 7,016 3,285 114% 18,204 8,291 120%
Interest income
(expense), net 82 (9,586)(A) NM (1,259) (19,962) 94%
Fair Value Adjustment
on Warrants Issued 37 (274) 114% (6,915) (274) NM
Other income
(expense), net 1,501 (978) NM 133 1,712 -92%
Income (loss)
before taxes 8,636 (7,553) NM 10,163 (10,233) NM
Income tax provision (1,801) (401) NM (4,014) (1,934) 108%
Income (loss) from
continuing operations 6,835 (7,954) NM 6,149 (12,167) 151%
Discontinued
operations, net of tax -- (7,064) NM (588) (9,030) 93%
Net income (loss) $6,835 $(15,018) NM $5,561 $(21,197) NM
Net income (loss) per share:
Basic from
continuing
operations $0.19 $(0.34) NM $0.18 $(0.69) NM
Diluted from
continuing
operations $0.18 $(0.34) NM $0.17 $(0.69) NM
Basic $0.19 $(0.64) NM $0.16 $(1.19) NM
Diluted $0.18 $(0.64) NM $0.15 $(1.19) NM
Weighted average shares outstanding (000):
Basic 35,342 23,644 34,718 17,748
Diluted 37,384 23,644 36,688 17,748
NM = not meaningful
(A) includes $6.3 million of debt discount and other fees written off
in conjunction with the pay-off of the Company's subordinated debt
Flow International Corporation
Preliminary Supplemental Data
(Unaudited)
Dollars in thousands
Three months ended Year ended
April 30, April 30,
% %
2006 2005 Change 2006 2005 Change
Divisional revenue breakdown:
Systems $50,436 $35,588 42% $150,954 $122,129 24%
Consumable parts
and services 12,829 13,242 -3% 52,512 50,837 3%
Total $63,265 $48,830 30% $203,466 $172,966 18%
Segment revenue breakdown:
North America
Waterjet $32,777 $24,414 34% $109,678 $82,381 33%
Asia Waterjet 13,902 6,824 104% 34,306 25,505 35%
Other International
Waterjet 11,651 10,844 7% 38,664 34,530 12%
Applications 4,935 6,748 -27% 20,818 30,550 -32%
$63,265 $48,830 30% $203,466 $172,966 18%
Depreciation and
amortization expense $344 $1,155 -70% $3,327 $5,109 -35%
Capital spending $1,369 $1,174 17% $2,735 $1,762 55%
Flow International Corporation
Preliminary Selected Balance Sheet Data
Dollars in thousands
April 30, April 30, %
2006 2005 Change
Cash, including
short-term
restricted cash $36,186 $13,445 169%
Receivables, net 32,480 38,325 -15%
Inventories 23,097 24,218 -5%
Total debt 7,021 19,147 -63%
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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