Flow International Announces Fiscal 2010 First Quarter Results

KENT, Wash., Sept. 8 -- Flow International Corporation , the world's leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications, today reported results for its fiscal 2010 first quarter ended July 31, 2009.

For the quarter, Flow reported consolidated revenues of $37.8 million, which compares to $43.7 million in the fourth quarter of fiscal year 2009 and $57.1 million in the year-ago quarter. The Company reported a net loss of $8.5 million or a $0.23 loss per share as compared to net income of $1.6 million or $0.04 per share in the prior year quarter. The net loss for the quarter just ended includes a total of $6.0 million in pre-tax charges, consisting of a net charge of $3.2 million related to the termination of the OMAX transaction, $1.6 million for severance and other related charges associated with its cost reduction efforts, and approximately $1.2 million for a reserve related to a business sold in October 2005 that was classified as a discontinued operation. Excluding those charges and the related tax effects, the net loss would have been $2.7 million or $0.07 loss per share in the current quarter.

"Two-thirds of our revenue stream continues to be either stable or growing. The remaining one-third continues to be unpredictable but we are encouraged by the interest level in our products that customers are expressing," said Charley Brown, President and CEO of Flow. "The pace of recovery remains slow in certain markets, but we have made many cost reductions this year that we expect to positively impact our results throughout fiscal 2010. These reductions, combined with our recent capital raise and the amendments to our bank covenants, position us well to exit this recession as a stronger company. We appreciate the active engagement of our secured lenders and the support of our shareholders as we position the Company for a return to economic growth."

  Operations Review
  For the fiscal 2010 first 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 $28.4 million in the
      quarter, a decrease of 13% from the fourth quarter of fiscal year 2009
      and a decrease of 46% from the prior-year quarter.  Operating loss
      from the Standard Segment totaled $2.6 million in the quarter, which
      includes severance and related costs of $1.3 million.  Excluding those
      charges, operating loss from the Standard Segment totaled $1.3 million
      as compared to operating income of $10.4 million in the prior-year
      quarter.
  --  Advanced Segment sales, which include sales of complex aerospace and
      automation systems requiring specific custom configuration and
      advanced features, as well as parts and services for those installed
      systems, were $9.4 million in the quarter, a decrease of 16% from the
      fourth quarter of fiscal year 2009 and an increase of 118% from the
      prior-year quarter.  Operating income from the Advanced Segment was
      $1.8 million in the quarter as compared to an operating loss of $1.1
      million in the prior-year quarter, after excluding $1.4 million of
      severance and related charges in that prior period.  The Advanced
      Segment backlog at the end of the quarter was $32.6 million.

  --  Total overall operating expenses in the quarter were $21.6 million,
      which includes the $4.8 million in pre-tax charges related to the
      termination of the OMAX transaction and cost reduction efforts. 
      Excluding those charges, operating expenses were $16.7 million,
      compared to $20.9 million in the prior-year quarter, after excluding
      restructuring and other costs of $1.4 million in that prior period.

  Conference Call

Flow plans to hold a conference call to discuss these results today: Tuesday, September 8th at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call may be heard by dialing 1-877-941-1427 or 1-480-629-9664. A 48-hour replay will be available following the call by dialing 1-800-406-7325 or 1-303-590-3030; the replay passcode is 4154387. A live audio Webcast of the conference call may be found in the investor section at www.flowcorp.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.flowcorp.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 the future effect of cost reductions and the anticipated strength of the Company when the recession ends. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.