Flow Announces Second Quarter 2011 Results
Sales of Consumable Parts Set All-Time Record
Kent, WA – December 2, 2010 – 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 2011 second quarter ended October 31, 2010.
For the second quarter of fiscal 2011, Flow reported consolidated revenues of $52.9 million, a 26% increase from $42.0 million in the prior-year period. Net loss in the current quarter was $0.3 million or $0.01 per share. In comparison, the Company reported net income of $0.7 million or $0.02 per share in the prior-year period, which included a non-recurring $0.6 million gain on the sale of a facility.
Consolidated Adjusted EBITDA was $3.1 million in the second quarter of fiscal 2011 compared to $2.3 million in the year-ago quarter. The Company’s definition of Adjusted EBITDA is included in the attached tables and also in its filings with the U.S. Securities and Exchange Commission.
"We are now seeing consistent orders for our standard systems in all regions of the world for the first time since the recession hit, and quarterly sales of our consumables have eclipsed our pre-recession highs," said Charley Brown, President and CEO of Flow. "We believe that our strategic growth initiatives, including our new indirect channel of distribution, have helped us turn this corner sooner than positive macroeconomic trends alone would have allowed."
Operations Review for Fiscal 2011 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 $44.9 million, an increase of $13.4 million or 43% from the prior-year quarter.
- Advanced segment sales, which include sales of complex aerospace and application systems requiring specific custom configuration and advanced features, as well as parts and services for those installed systems, were $8.1 million for the quarter, reflecting an anticipated $2.5 million decline from the prior-year quarter. Advanced segment sales are recorded using the percentage of completion method, with lead times ranging as long as 18 to 24 months.
- Aggregate gross margins were 38% for the quarter, compared to aggregate gross margins of 40% in the prior-year quarter. Standard segment gross margins were consistent quarter over quarter at 42%. Advanced segment gross margins were 15% in the current quarter compared to 31% in the prior-year quarter. The decline in Advanced segment gross margin was attributable to unanticipated costs for certain contracts, primarily related to the installation phase of the projects. The Company expects gross margins in the Advanced segment to return to normalized levels in subsequent periods.
- Total operating expenses for the quarter were $19.0 million, compared to $16.9 million in the prior-year quarter, excluding the $0.6 million gain recognized on the sale of a facility. The $2.1 million increase is primarily the result of the reinstatement of wages and benefits, commissions related to increased sales and depreciation related to our ERP system..
Consolidated Statement of Operations >>
Conference Call
Flow plans to hold a conference call to discuss these results today: Thursday, December 2nd 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 4387631. A live audio Webcast of the conference call may be found in the investor section at www.flowwaterjet.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 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 Securities and Exchange Commission. Forward- looking statements in this press release include, without limitation, statements regarding stabilizing or improving revenue and optimism for the indirect channel of distribution. 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