Flow Announces Third Quarter 2011 Results
Company Reports $0.03 EPS on 27% Increase in Revenue; Announces Credit Facility Renewal
Kent, WA - March 3, 2011 - 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 third quarter ended January 31, 2011.
For the third quarter of fiscal 2011, Flow reported consolidated revenues of $57.5 million, a 27% increase from $45.4 million in the prior-year period. Net income in the current quarter was $1.2 million or $0.03 per share. In comparison, the Company reported net loss of $0.7 million or a loss of $0.02 per share in the prior-year period, which included a non-cash charge of $1.3 million for foreign currency adjustments primarily related to the liquidation of two dormant subsidiaries.
Consolidated Adjusted EBITDA for the quarter was $4.9 million compared to $1.8 million in the year-ago quarter. A reconciliation of Adjusted EBITDA to Net Income is provided in the attached financial tables.
"Overall revenues increased 9% sequentially from our second quarter as we benefited from a very successful IMTS show," said Charley Brown, President and CEO of Flow. "With EPS at $0.03 per share, these results represent the first quarter of significant net income generated from operations in over two years. We also successfully renewed our credit facility for a three-year period, further strengthening our financial position and enhancing our ability to fund working capital needs. The renewed credit facility provides more favorable financial covenants as well as lower interest rates."
Operations Review for the Third Quarter of Fiscal 2011
- 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 $49.9 million, an increase of $12.9 million or 35% 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 $7.6 million for the quarter, reflecting an anticipated $0.8 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 40% for the quarter, in line with the aggregate gross margins of the prior-year quarter. Standard segment gross margins increased from 41% a year ago to 42% on favorable product mix. Advanced segment gross margins were 27% in the current quarter, compared to 36% in the prior-year quarter. The lower gross margin in the Advanced segment is primarily attributable to project mix and refinement of cost estimates.
- Total operating expenses for the quarter were $20.3 million, compared to $18.5 million in the prior-year quarter. The $1.8 million increase is primarily the result of the full reinstatement of wages and benefits, higher commissions on increased sales, and other sales initiatives.
- On March 2, 2011, the Company renewed its existing credit facility for three years. The new agreement, which expires on March 2, 2014, provides enhanced financial flexibility with more favorable interest rates and financial covenants.
Consolidated Statement of Operations >>
Conference Call
Flow plans to hold a conference call to discuss these results today: Thursday, March 3rd at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The conference call may be heard by dialing 877-941-4775 or 480-629-9761. A 7-day replay will be available following the call by dialing 800-406-7325 or 303-590-3030. The conference call passcode is 4415125. 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 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 U.S. Securities and Exchange Commission. Forward- looking statements in this press release include, without limitation, statements regarding the new credit facility enhancing funding of working capital and improving flexibility. 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