Ends Profitable Year With Double-Digit Revenue Growth
KENT, Wash., July 25 /PRNewswire-FirstCall/ -- Flow International
Corporation (Nasdaq: FLOW), the world's leading supplier of
ultrahigh-pressure waterjet products, today reported results for its fiscal
2006 fourth quarter and year ended April 30, 2006. Flow reported
consolidated quarterly sales of $63.1 million and operating income of $6.6
million or 10% of sales. Net income for the quarter was $6.6 million or
$0.19 basic earnings per share and $0.18 per fully diluted share. Results
for the quarter include a $575,000 restructuring expense, which represents
the remaining lease and related costs on its vacated Wixom, Michigan
facility. These results supersede the figures previously provided in the
Company's preliminary earnings release issued on July 13, 2006.
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.
For the twelve months ended April 30, 2006, Flow reported consolidated
sales of $203.3 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 income from continuing operations of $5.9 million or $0.17 per
basic share and $0.16 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 $5.3 million or $0.15 per basic and 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:
-- 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 $12.7
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.
-- North America Waterjet sales increased 34% to $32.6 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.
-- 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.
-- 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.
-- 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.
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
Consolidated Statement of Operations
(Unaudited)
Dollars in thousands,
except per share data
Three months ended April 30, Year ended April 30,
% %
2006 2005 Change 2006 2005 Change
Sales $63,088 $48,830 29% $203,289 $172,966 18%
Cost of sales 32,629 28,246 16% 112,377 106,943 5%
Gross margin 30,459 20,584 48% 90,912 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 11,510 7,976 44% 33,166 22,849 45%
Financial
consulting -- -- 0% -- 623 -100%
Restructuring 575 -- NM 1,236 -- NM
Gain on Barton
Sale -- -- NM (2,500) -- NM
Operating expenses 23,846 17,299 38% 73,111 57,732 27%
Operating income 6,613 3,285 101% 17,801 8,291 115%
Interest income
(expense), net 82 (9,586)(1) NM (1,259) (19,962) 94%
Fair Value Adjustment
on Warrants Issued 37 (274) NM (6,915) (274) NM
Other income
(expense), net 1,678 (978) NM 310 1,712 -82%
Income (loss) before
taxes 8,410 (7,553) NM 9,937 (10,233) NM
Income tax
provision (1,801) (401) NM (4,014) (1,934) 108%
Income (loss) from
continuing
operations 6,609 (7,954) NM 5,923 (12,167) 149%
Discontinued
operations, net of
tax -- (7,064) NM (588) (9,030) 93%
Net income (loss) $6,609 $(15,018) NM $5,335 $(21,197) NM
Net income (loss)
per share:
Basic from
continuing
operations $0.19 $(0.34) NM $0.17 $(0.69) NM
Diluted from
continuing
operations $0.18 $(0.34) NM $0.16 $(0.69) NM
Basic $0.19 $(0.64) NM $0.15 $(1.19) NM
Diluted $0.18 $(0.64) NM $0.15 $(1.19) NM
Weighted average
shares outstanding
(000):
Basic 35,297 23,644 34,676 17,748
Diluted 37,359 23,644 36,651 17,748
NM = not meaningful
(1) 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
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 12,652 13,242 -4% 52,335 50,837 3%
Total $63,088 $48,830 29% $203,289 $172,966 18%
Segment revenue
breakdown:
North America
Waterjet $32,600 $24,414 34% $109,501 $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%
$63,088 $48,830 29% $203,289 $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
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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