Flow International Announces Final Fiscal 2006 First Quarter Results

KENT, Wash., Dec. 2  /PRNewswire-FirstCall/ -- Flow International Corporation (NASDAQ:FLOWE), the world's leading supplier of ultrahigh-pressure waterjet products,  yesterday reported results and filed the Form 10-Q for its fiscal 2006 first quarter ended July 31, 2005.

FLOW had previously announced preliminary first quarter financial results on September 15, 2005.  Compared to the previously announced results, the Company has made adjustments to cost of sales, operating expenses and to items below the operating income line.  The effect of these adjustments, compared to the previously announced preliminary results, is shown below. The adjustments did not impact previously announced sales or cash flows for the quarter.

-- Operating income decreased by $508,000 to $1.9 million.

Net income decreased by  $686,000 to $22,000 and earnings per basic and diluted earnings per share decreased from $0.02 to $0.00.  This decrease was primarily the result of the recording of additional costs related to the disposition of Avure, contracts in progress, and compensation expense

Final results for the fiscal 2006 first quarter ended July 31, 2005 are reported in the financial tables that follow.

With the filing of its Form 10-Q, the Company will again be in compliance with NASDAQ listing requirements.

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 http://www.flowcorp.com/.

  Contact:  John Leness
  General Counsel
  253-850-3500


                        Flow International Corporation
                    Consolidated Statement of Operations
                                 (Unaudited)

  Dollars in thousands, except per share data
                                            Three months ended July 31,
                                           2005         2004      % Change

  Sales                                  $49,729      $48,982         2%

  Cost of sales                           29,106       31,087        -6%

  Gross margin                            20,623       17,895        15%

  Operating expenses:
       Marketing                           8,545        7,309        17%
       Research and engineering            2,691        2,604         3%
       General and administrative          7,366        5,728        29%
       Restructuring                          98           --          NM
       Financial Consulting                   --          623      -100%
  Operating expenses                      18,700       16,264        15%

  Operating income                         1,923        1,631        18%

  Interest expense, net                     (798)      (3,095)      -74%
  Other expense, net                        (226)        (170)      -33%

  Income (loss) before taxes                 899       (1,634)         NM
  Income tax provision                      (877)        (706)      -24%

  Net Income (loss)                          $22      $(2,340)         NM


  Earnings (loss) per share:
      Basic                                $0.00       $(0.15)         NM
      Diluted                              $0.00        (0.15)         NM


  Weighted average shares outstanding
   (000):
      Basic                               34,299       15,686
      Diluted                             36,012       15,686

  NM = not meaningful


                        Flow International Corporation
                           Statement of Operations
                             Operations Breakdown
                                 (Unaudited)


  Dollars in thousands, except per share data

                          Three Months ended July 31, 2005
                         Flow          Avure
                       Waterjet     Technologies   Consolidated
                        Systems

  Sales                 $41,986        $7,743        $49,729

  Cost of sales          24,252         4,854         29,106

  Gross margin           17,734         2,889         20,623

  Operating expenses     15,568         3,132         18,700

  Operating income
   (loss)                 2,166          (243)         1,923


                          Three Months ended July 31, 2004
                         Flow          Avure
                       Waterjet     Technologies   Consolidated
                        Systems

  Sales                 $38,299       $10,683        $48,982

  Cost of sales          24,326         6,761         31,087

  Gross margin           13,973         3,922         17,895

  Operating expenses     12,940         3,324         16,264

  Operating income
   (loss)                 1,033           598          1,631


                       Flow International Corporation
                              Supplemental Data
                                 (Unaudited)

  Dollars in thousands
                                             Three months ended July 31,
                                            2005        2004    % Change

  Divisional revenue breakdown:
     Flow Waterjet Systems:
          Systems                         $28,721     $25,900      11%
          Consumable parts and services    13,265      12,399       7%
     Total                                 41,986      38,299      10%
     Avure Technologies
         Fresher Under Pressure             2,337       3,868     -40%
         General Press                      5,406       6,815     -21%
     Total                                  7,743      10,683     -28%
                                          $49,729     $48,982       2%

  Geographic revenue breakdown:
     United States                        $28,954     $26,979       7%
     Rest of Americas                       4,181       4,895     -15%
     Europe                                10,826      10,757       1%
     Asia                                   5,768       6,351      -9%
                                          $49,729     $48,982       2%


  Depreciation and amortization expense    $1,165      $1,322     -12%

  Capital spending                           $519        $329      58%


                       Flow International Corporation
                        Condensed Balance Sheet Data
                                 (Unaudited)

  Dollars in thousands

                                         July 31,     April 30,
                                           2005         2005      % Change

  Cash, including restricted cash        $17,746      $13,445        32%
  Receivables, net                        28,047       38,325       -27%
  Inventories                             26,034       24,218         7%
  Total current assets                    80,366       84,666        -5%
  Total assets                           112,512      118,467        -5%

  Total debt                             $17,617      $19,147        -8%
  Total liabilities                       82,156       87,356        -6%
  Total shareholders' equity              28,178       28,710        -2%


DATASOURCE: Flow International Corporation



CONTACT:  John Leness, General Counsel of Flow International Corporation,

[phone]



Web site:  http://www.flowcorp.com/ 

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