Attached files
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| 8-K - FORM 8-K - FLOW INTERNATIONAL CORP | q3fy12pressrelease.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Flow Investor Relations
Geoffrey Buscher
253-813-3286
investors@flowcorp.com
FLOW INTERNATIONAL ANNOUNCES THIRD QUARTER RESULTS
Record Quarterly Revenue and Highest Quarterly Operating Profit Since 2008
Kent, WA - March 1, 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 third quarter ended January 31, 2012.
For the third quarter of fiscal year 2012, Flow reported consolidated revenues of $65.8 million, a 15% increase from $57.5 million in the prior fiscal year. Net income in the current quarter was $3.3 million or $0.07 per share. In comparison, the Company reported net income in the prior-year period of $1.2 million or $0.03 per share.
Adjusted EBITDA for the quarter was $8.1 million or 12.3% of sales, compared to $4.9 million in the year-ago quarter. A reconciliation of Adjusted EBITDA to Net Income is provided in the accompanying financial tables.
“This marks our sixth sequential quarter of increased sales and a new quarterly record for Flow,” said Charley Brown, President and CEO of Flow. “We also generated operating income in excess of 9% of sales, which represents our highest level of profitability in almost four years.”
Operations Review for the Third 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 $59.1 million, an increase of $9.2 million or 18% 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 $6.7 million, a decline of $0.8 million or 11% 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 margins were 40% for the quarter, which was consistent with the year-ago quarter. Standard segment gross margins were 41%, which is down from 42% in the year-ago quarter as a result of product mix. Advanced segment gross margins were 27% in the current quarter, in line with the year-ago quarter. |
• | Total operating expenses for the quarter were $20.1 million, consistent with $20.3 million in the year-ago quarter. |
Conference Call
Flow plans to hold a conference call to discuss these results today: Thursday, March 1, 2012 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The conference call may be heard by dialing 888-846-5003 or 480-629-9856. A 7-day replay will be available following the call by dialing 800-406-7325 or 303-590-3030. The conference call passcode is 4516393. 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 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 Company's level of sales and profitability. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.
Flow International Corporation | |||||||||||||||||||
Condensed Consolidated Income Statements | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
U.S. Dollars in thousands, except per share data | |||||||||||||||||||
Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||
Sales | $ | 65,808 | $ | 57,473 | 15 | % | $ | 190,371 | $ | 156,988 | 21 | % | |||||||
Cost of Sales | 39,737 | 34,381 | 16 | % | 115,864 | 94,710 | 22 | % | |||||||||||
Gross Margin | 26,071 | 23,092 | 13 | % | 74,507 | 62,278 | 20 | % | |||||||||||
Operating Expenses: | |||||||||||||||||||
Sales and Marketing | 12,028 | 11,568 | 4 | % | 36,806 | 33,049 | 11 | % | |||||||||||
Research and Engineering | 2,712 | 2,513 | 8 | % | 8,079 | 7,095 | 14 | % | |||||||||||
General and Administrative | 5,342 | 6,194 | (14 | )% | 17,312 | 17,811 | (3 | )% | |||||||||||
Operating Expenses | 20,082 | 20,275 | (1 | )% | 62,197 | 57,955 | 7 | % | |||||||||||
Operating Income | 5,989 | 2,817 | NM | 12,310 | 4,323 | NM | |||||||||||||
Interest Expense, net | (305 | ) | (397 | ) | (23 | )% | (876 | ) | (1,182 | ) | (26 | )% | |||||||
Other Income (Expense), net | (384 | ) | (81 | ) | NM | (511 | ) | 315 | NM | ||||||||||
Income Before Taxes | 5,300 | 2,339 | NM | 10,923 | 3,456 | NM | |||||||||||||
Provision for Income Taxes | (2,041 | ) | (1,058 | ) | 93 | % | (4,279 | ) | (2,926 | ) | 46 | % | |||||||
Income from Continuing Operations | 3,259 | 1,281 | NM | 6,644 | 530 | NM | |||||||||||||
Income (Loss) from Discontinued Operations, net of tax | 57 | (40 | ) | NM | 162 | (152 | ) | NM | |||||||||||
Net Income | $ | 3,316 | $ | 1,241 | NM | $ | 6,806 | $ | 378 | NM | |||||||||
Basic and Diluted Income Per Share: | |||||||||||||||||||
Income from Continuing Operations | $ | 0.07 | $ | 0.03 | NM | $ | 0.14 | $ | 0.01 | NM | |||||||||
Net Income | $ | 0.07 | $ | 0.03 | NM | $ | 0.14 | $ | 0.01 | NM | |||||||||
Weighted Average Shares Outstanding Used in Computing Basic and Diluted Income Per Share (000): | |||||||||||||||||||
Basic | 47,857 | 47,301 | 47,730 | 47,168 | |||||||||||||||
Diluted | 47,857 | 47,312 | 47,730 | 47,174 | |||||||||||||||
NM = not meaningful | |||||||||||||||||||
Flow International Corporation | ||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||
(Unaudited) | ||||||||||||||
U.S. Dollars in thousands | ||||||||||||||
January 31, | April 30, | |||||||||||||
2012 | 2011 | % Change | ||||||||||||
ASSETS | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and Cash Equivalents | $ | 10,185 | $ | 9,096 | 12 | % | ||||||||
Receivables, net | 47,247 | 47,082 | — | % | ||||||||||
Inventories, net | 34,280 | 28,609 | 20 | % | ||||||||||
Other Current Assets | 12,471 | 13,305 | (6 | )% | ||||||||||
Total Current Assets | 104,183 | 98,092 | ||||||||||||
Property and Equipment, net | 17,380 | 19,104 | (9 | )% | ||||||||||
Other Long-Term Assets | 34,218 | 35,867 | (5 | )% | ||||||||||
Total Assets | $ | 155,781 | $ | 153,063 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Current Liabilities: | ||||||||||||||
Notes Payable | $ | — | $ | 5,500 | (100 | )% | ||||||||
Current Portion of Long-Term Obligations | 26 | 25 | 4 | % | ||||||||||
Accounts Payable and Other Accrued Liabilities | 26,885 | 28,661 | (6 | )% | ||||||||||
Other Current Liabilities | 24,782 | 22,775 | 9 | % | ||||||||||
Total Current Liabilities | 51,693 | 56,961 | ||||||||||||
Other Long-Term Liabilities | 8,132 | 7,925 | 3 | % | ||||||||||
Subordinated Notes | 9,362 | 8,723 | 7 | % | ||||||||||
Total Liabilities | 69,187 | 73,609 | ||||||||||||
Shareholders’ Equity | 86,594 | 79,454 | 9 | % | ||||||||||
Total Liabilities and Shareholders' Equity | $ | 155,781 | $ | 153,063 | ||||||||||
Flow International Corporation | |||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||
(Unaudited) | |||||||||
U.S. Dollars in thousands | |||||||||
Nine Months Ended January 31, | |||||||||
2012 | 2011 | % Change | |||||||
Cash Flows from Operating Activities: | |||||||||
Net Income | $ | 6,806 | $ | 378 | NM | ||||
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: | |||||||||
Depreciation and amortization | 4,723 | 4,706 | — | % | |||||
Deferred Income Taxes | 2,437 | 1,585 | 54 | % | |||||
Provision for Slow Moving and Obsolete Inventory | 391 | 649 | (40 | )% | |||||
Bad Debt Expense | 389 | 346 | 12 | % | |||||
Incentive Compensation Expense | 1,783 | 1,855 | (4 | )% | |||||
Warranty Expense | 3,043 | 1,304 | NM | ||||||
Other | 881 | 787 | 12 | % | |||||
Changes in Operating Assets and Liabilities: | |||||||||
Receivables | (1,883 | ) | (3,902 | ) | (52 | )% | |||
Inventories | (7,129 | ) | (5,990 | ) | 19 | % | |||
Other Operating Assets | (944 | ) | (402 | ) | NM | ||||
Accounts Payable | (738 | ) | 348 | NM | |||||
Other Operating Liabilities | (467 | ) | 2,522 | NM | |||||
Net Cash Provided by Operations | 9,292 | 4,186 | NM | ||||||
Cash Flows from Investing Activities: | |||||||||
Expenditures for Property, Equipment and Intangible Assets | (3,346 | ) | (2,700 | ) | 24 | % | |||
Other Investing Activities | 538 | (1,632 | ) | NM | |||||
Net Cash Used in Investing Activities | (2,808 | ) | (4,332 | ) | (35 | )% | |||
Cash Flows from Financing Activities: | |||||||||
Borrowings Under Credit Facility | 45,750 | 35,100 | 30 | % | |||||
Repayments Under Credit Facility | (51,250 | ) | (33,550 | ) | 53 | % | |||
Other Net Borrowings (Repayments) | 27 | (8 | ) | NM | |||||
Net Cash (Used in) Provided by Financing Activities | (5,473 | ) | 1,542 | NM | |||||
Effect of Changes in Exchange Rates | 78 | 238 | (67 | )% | |||||
Net Change in Cash and Cash Equivalents | 1,089 | 1,634 | |||||||
Cash and Cash Equivalents, Beginning of the Period | 9,096 | 6,367 | 43 | % | |||||
Cash and Cash Equivalents, End of the Period | $ | 10,185 | $ | 8,001 | 27 | % | |||
Supplemental Disclosures of Cash Flow Information | |||||||||
Cash Paid during the Period for: | |||||||||
Interest | 261 | 288 | (9 | )% | |||||
Taxes | 588 | 476 | 24 | % | |||||
NM = not meaningful | |||||||||
Flow International Corporation | |||||||||||||||||||
Supplemental Data | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
U.S. Dollars in thousands | |||||||||||||||||||
Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||
Sales Breakdown: | |||||||||||||||||||
Systems | $ | 46,780 | $ | 39,987 | 17 | % | $ | 130,913 | $ | 105,429 | 24 | % | |||||||
Consumable Parts | 19,028 | 17,486 | 9 | % | 59,458 | 51,559 | 15 | % | |||||||||||
Total | $ | 65,808 | $ | 57,473 | 15 | % | $ | 190,371 | $ | 156,988 | 21 | % | |||||||
Segment Revenue Breakdown: | |||||||||||||||||||
Standard | $ | 59,076 | $ | 49,916 | 18 | % | $ | 171,267 | $ | 135,619 | 26 | % | |||||||
Advanced | 6,732 | 7,557 | (11 | )% | 19,104 | 21,369 | (11 | )% | |||||||||||
$ | 65,808 | $ | 57,473 | 15 | % | $ | 190,371 | $ | 156,988 | 21 | % | ||||||||
Depreciation and Amortization Expense | $ | 1,572 | $ | 1,522 | 3 | % | $ | 4,723 | $ | 4,706 | — | % | |||||||
Capital Spending | $ | 995 | $ | 1,551 | (36 | )% | $ | 3,346 | $ | 2,700 | 24 | % | |||||||
Flow International Corporation | |||||||||||||||||||
Reconciliation of Adjusted EBITDA to Net Income | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
U.S. Dollars in thousands | |||||||||||||||||||
Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||
Net Income | $ | 3,316 | $ | 1,241 | NM | $ | 6,806 | $ | 378 | NM | |||||||||
Add Back: | |||||||||||||||||||
Depreciation and Amortization | 1,572 | 1,522 | 3 | % | 4,723 | 4,706 | — | % | |||||||||||
Income Tax Provision | 2,041 | 1,058 | 93 | % | 4,279 | 2,926 | 46 | % | |||||||||||
Interest Charges | 317 | 418 | (24 | )% | 937 | 1,268 | (26 | )% | |||||||||||
Non-Cash Charges (i) | 868 | 687 | 26 | % | 2,092 | 1,700 | 23 | % | |||||||||||
Adjusted EBITDA | $ | 8,114 | $ | 4,926 | 65 | % | $ | 18,837 | $ | 10,978 | 72 | % | |||||||
(i) Allowable Add Backs Pursuant to Credit Facility Agreement | |||||||||||||||||||
NM = not meaningful | |||||||||||||||||||
The Company defines Adjusted EBITDA as net income, determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), excluding the effects of income taxes, depreciation, amortization of intangible assets, interest expense, and other non-cash charges, which includes such items as stock-based compensation expense, foreign currency gains or losses, and other non-cash allowable add backs pursuant to the Company's Credit Facility Agreement. | |||||||||||||||||||
Adjusted EBITDA is a non-GAAP financial measure and the presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. The items excluded from this non-GAAP financial measure are significant components of the Company's financial statements and must be considered in performing a comprehensive analysis of the overall financial results. The Company uses this measure, together with GAAP financial metrics, to assess its financial performance, allocate resources, evaluate the overall progress towards meeting its long-term financial objectives, and assess compliance with its debt covenants. The Company believes that this non-GAAP financial measure is useful to investors and analysts in allowing for greater transparency with respect to the supplemental information used in the Company's financial and operational decision making. The Company's calculation of Adjusted EBITDA may not be consistent with calculations of similar measures used by other companies. | |||||||||||||||||||