Flow Announces Fiscal 2009 Fourth Quarter Results

Kent, WA – June 25, 2009 – 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 2009 fourth quarter ended April 30, 2009.

For the quarter, Flow reported consolidated revenues of $43.7 million, which compares to $48.7 million in the third quarter of fiscal year 2009 and $63.3 million in the year-ago quarter.  The Company reported a net loss from continuing operations of $4.3 million, or $0.12 per basic and diluted share, compared to net income of $13.3 million or $0.35 per basic and diluted share a year ago.

Net loss for the quarter just ended includes a $3.8 million pre-tax charge for previously deferred transaction costs related to the Company's previously contemplated acquisition of OMAX Corporation, which was terminated on May 11, and aggregate pre-tax charges of $1.4 million related to the write off of deferred financing costs associated with the amendment to the Company's senior credit facility, centralizing its manufacturing operations, and severance related to cost reductions.  Excluding those charges and the related tax effects, the pro forma loss from continuing operations was $1.2 million or $0.03 per basic and diluted share as compared to the prior year quarter pro forma net income of $1.5 million or $0.04 per share after excluding the tax benefit from the reversal of income tax valuation allowance of $11.8 million.

"We continue to see the impact of the global economic slowdown in portions of our business," said Charley Brown, President and CEO of Flow.  "We feel that roughly two-thirds of our fourth quarter revenue stream has stabilized while one-third remains more volatile during these difficult economic times.  Meanwhile, we continue to build our new distribution channel having added 20 distributors in 17 countries over the past six months.  This indirect sales model represents a new avenue for long-term growth.  In addition, we are continuously monitoring our cost structure to ensure that we emerge a stronger company when the recession ends."

Operations Review
For the fiscal 2009 fourth quarter, compared to the prior-year quarter:

1. 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 $32.6 million in the quarter, a decrease of 21% from the third quarter of fiscal year 2009 and a decrease of 43% from the prior year quarter.  Operating loss from the Standard Segment totaled $889,000 in the quarter, which compares to operating income of $9.5 million in the prior-year quarter.
   
   
2. 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 $11.1 million in the quarter, an increase of 50% from the third quarter of fiscal year 2009 and an increase of 82% from the prior-year quarter.  Operating income from the Advanced Segment was $2.3 million in the quarter compared to operating loss of $421,000 in the prior year quarter.  The Advanced Segment backlog at the end of the quarter was $32.5 million.
   
   
3. Total overall operating expenses were $22.4 million in the quarter, which includes $4.5 million in charges related to the deferred transaction costs related to the OMAX transaction, the centralization of our manufacturing operations and severance related to cost reductions.  Excluding those charges, operating expenses were $17.9 million, compared with $20.5 million in the prior-year quarter.  In connection with the termination of the OMAX transaction in May, the Company will record a net charge of approximately $2.4 million in the first quarter of fiscal year 2010.
   
   
4. On March 10, 2009 and subsequently on June 10, 2009, the Company amended its Senior Credit Facility Agreement to reduce its Line of Credit from $65 million to $40 million and amended its financial covenants to provide the Company flexibility during the current economic environment. 
   
   

Consolidated Statement of Income and Supplemental Data >>

Conference Call
Flow plans to hold a conference call to discuss these results today: Thursday, June 25th at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).  The conference call may be heard by dialing 1-877-941-8632 or 1-480-629-9821.  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 4098683.  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 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 future distributors and avenues for growth, the anticipated strength of the Company when the recession ends and expected charges relating to the Omax acquisition.  Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.