KENT, WA - June 27, 2012 - 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 2012 fourth quarter and year ended April 30, 2012.

For the fiscal year ended April 30, 2012, Flow reported consolidated revenue growth of 17%, reaching a new record level of $253.8 million, compared to $216.5 million in the prior fiscal year.  Sales from the Standard segment reached an all-time high of $230.3 million for the fiscal year 2012, a 23% improvement from the prior fiscal year, as consumable spare parts sales grew 14% to $80.0 million, also a new record.  Net income for fiscal year 2012 was $9.4 million or $0.20 per share, compared to a net income of $0.8 million or $0.02 per share in the prior fiscal year.

For the fourth quarter of fiscal year 2012, Flow reported consolidated revenues of $63.4 million, a 6% increase from $59.5 million in the prior fiscal year.  Net income in the fourth quarter was $2.6 million or $0.06 per share.  In comparison, the Company reported net income in the prior-year period of $0.4 million or $0.01 per share.

Adjusted EBITDA for fiscal year 2012 was $24.4 million or 10% of sales, compared to $13.7 million or 6% of sales for the prior fiscal year.  For the quarter, Adjusted EBITDA was $5.5 million or 9% of sales, compared to $2.8 million or 5% of sales in the year-ago quarter.  A reconciliation of Adjusted EBITDA to Net Income is provided in the accompanying financial tables.

"Our fourth quarter results mark a solid conclusion to a fiscal year in which we broke a number of important records and reached significant profitability milestones," said Charley Brown, President and CEO of Flow.  "We also moved forward on our new Mach 2 and Mach 4 products, which have now made the very important transition into full global launch mode.  These products will set new performance standards across a full continuum of waterjet machine tools, positioning us very well for continued profitable growth."


Operations Review for the Fourth Quarter of Fiscal 2012

  • Standard segment sales, which include sales of systems that do not require significant custom configuration as well as parts and services for those installed systems, were $59.0 million for the quarter, an increase of $6.7 million or 13% from the year-ago quarter.  For the year, Standard segment sales increased 23% to $230.3 million from $187.9 million in the prior year.

  • Advanced segment sales, which include sales of complex aerospace and application systems requiring specific custom configuration and advanced features, were $4.4 million for the quarter, a decline of $2.9 million or 40% from the year-ago quarter.  For the year, Advanced segment sales declined 18% to $23.5 million from $28.6 million in the prior year.  Advanced segment sales are recorded using the percentage of completion method, with lead times generally ranging from 12 to 24 months.

  • Aggregate gross margins were 39% for the quarter, compared to 37% in the prior-year quarter.  Standard segment gross margins were 40% for the quarter, in line with the year-ago quarter.  Advanced segment gross margins were 23% in the current quarter, an improvement compared to 13% in the year-ago quarter.  For the year, aggregate gross margins were in line with year-ago gross margins at 39%.  Standard and Advanced gross margins for the year were 41% and 24%, respectively, compared to 42% and 21% in the prior year.

  • Total operating expenses for the quarter were $22.5 million, compared to $21.6 million in the prior-year quarter.  Total operating expenses in the fourth quarter of fiscal 2012 included a $1.1 million non-cash, non-recurring incremental stock compensation charge related to adjusting employee attrition rates.  Excluding this item, operating expenses were in-line with the year-ago quarter.  For the year, total operating expenses were $84.7 million, compared to $79.6 million a year ago.

  • The Company recorded a tax benefit of $1.7 million during the quarter, primarily related to the favorable settlement of a tax audit.  The impact on fourth quarter 2012 results was a net tax benefit of $1.0 million.  This favorable settlement also impacted the full year 2012, lowering the Company's overall effective tax rate to 26%.


Consolidated Statement of Operations >>

Conference Call
Flow plans to hold a conference call to discuss these results today:  Wednesday, June 27, 2012 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).  The conference call may be heard by dialing 877-941-1427 or 480-629-9664.  A 7-day replay will be available following the call by dialing 800-406-7325 or 303-590-3030.  The conference call passcode is 4544811.  A live audio Webcast of the conference call may be found in the investor section. A Webcast replay of the call will also be available for 90 days.

About Flow International
Flow International Corporation is the world's leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications used in multiple industries including automotive, aerospace, job shop, surface preparation, and more. For more information, visit www.FlowWaterjet.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 Company's filings with the U.S. Securities and Exchange Commission. Forward-looking statements in this press release include, without limitation, statements regarding the increased reach and penetration of distribution channels.  Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.

Flow Investor Relations
Geoffrey Buscher
253-813-3286
investors@flowcorp.com

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