Record Revenues of $67 Million and New Advanced Segment Orders Exceeding $30 Million

Kent, WA - December 6, 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 year 2013 second quarter ended October 31, 2012.

For the quarter, Flow reported revenues of $67.0 million, which represents a new all-time quarterly high and a 4% increase from $64.5 million in the year-ago quarter.  Standard Segment revenues of $63.2 million represent a 7% improvement versus the year-ago quarter, as consumable spare parts sales grew 13% to $23.0 million, also a new record.

During the quarter, the Company recorded one-time items totaling $1.1 million in its Advanced Segment, $0.7 million related to securing a commitment for future business and $0.4 million related to an order that was not placed as planned. Net income in the second quarter was $2.1 million or $0.04 per share, compared to net income of $2.8 million or $0.06 per share in the prior-year period.

Adjusted EBITDA for the quarter was $6.0 million or 8.9% of sales, compared to $7.4 million or 11.4% of sales for the year-ago quarter. A reconciliation of Adjusted EBITDA to Net Income is provided in the accompanying financial tables.

Since the end of July, the Company has received orders in excess of $30 million for its Advanced Segment. Revenues from these orders will start to be recognized in the fourth quarter of fiscal year 2013 and should span five to six quarters until these projects are completed.

"On the strength of our Standard Segment business, we set another quarterly sales record," said Charley Brown, President and CEO of Flow. "Our new products, and the new technology they deliver, continue to be very well received as we roll them out worldwide. Financially, our business continues to make significant progress as well. Year to date, our revenue is up 7% and our operating income is up 30%, even while we invest in the global new product introductions."

Operations Review for the 2013 Fiscal Second Quarter 

  • 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 $63.2 million for the quarter, an increase of $4.0 million or 7% from the year-ago quarter.

  • Advanced Segment sales, which include sales of complex aerospace and application systems requiring specific custom configuration and advanced features, were $3.8 million for the quarter, and as expected, a decline of $1.5 million or 28% from the year-ago quarter. Advanced Segment sales are recorded using the percentage of completion method, with lead times generally ranging from 12 to 24 months.

  • Aggregate gross profits were $25.4 million or 38% of sales for the quarter, compared to $25.3 million or 39% of sales in the prior-year quarter.

  • Standard Segment gross profits were $25.3 million or 40% of sales for the quarter, compared to the year-ago quarter gross profit of $24.2 million or 41% of sales. The gross profit variation is driven by product and geographic mix.

  • Advanced Segment gross profits were $0.1 million or 2% of sales in the current quarter, a decrease from $1.1 million or 21% of sales in the year-ago quarter. Gross profit in the quarter was negatively impacted by one-time items aggregating to $1.1 million.

  • Total operating expenses for the quarter were $21.5 million, compared to $20.2 million in the prior-year quarter. The year over year increase was anticipated, primarily due to lead generation activity, including multiple trade shows, as well as timing of personnel related costs.

Consolidated Statement of Operations >>

Conference Call
Flow plans to hold a conference call to discuss these results today:  Thursday, December 6, 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 4577825.  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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