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 KENT, Wash., Aug. 31 /PRNewswire/ -- Flow International Corp. (NASDAQ: FLOW) today reported increased sales and earnings for the first quarter ended July 31, 1993.
 For the quarter, revenues grew to $19.4 million from $19.3 million while net income was up 26 percent to $1.5 million from $1.2 million in the prior year. Earnings per share grew to 11 cents this year from 8 cents last year.
 "This has been the toughest quarter I've experienced since joining FLOW two years ago," said Ronald W. Tarrant, president and chief executive officer. "Our European business was off 30 percent and our Japanese business was off more than 50 percent in the quarter, reflecting the weak economic environments in both areas. Domestic sales of waterjet systems were also soft during the quarter; however, we believe that this softness merely reflected the timing of customer orders.
 "While sales were disappointing for the quarter, significant progress was made toward several key strategic goals," Tarrant said. "We secured several contracts for our services business and expect this business to be very strong for the remainder of the year. Scaffolding rental revenues were up in the first quarter as we continued to add equipment to our rental fleet. Sales into Southeast Asia continue to respond favorably to our new marketing emphasis being placed in this region. In addition, we further consolidated our domestic manufacturing and administrative organizations and expect an impact from these changes beginning in the second quarter," continued Tarrant.
 "We are confident that we will return to historical levels of sales growth in the second quarter. We are entering it with a very strong backlog, are encouraged that our European business is improving, and expect our Asian business to continue to experience significant growth. Additionally, our HydroMilling(R) fleet is currently operating at full capacity," said Tarrant.
 Results for the first quarter included a one-time $400,000 or three cents per share extraordinary income tax accounting change gain related to the mandatory adoption of FAS 109 and a one-time pre tax gain on the sale of the Spider manufacturing facility of $400,000. The Spider manufacturing facility was vacated in March 1993 in conjunction with FLOW's consolidation of all domestic manufacturing operations.
 Operating expenses were up, reflecting the payment of severance and other consolidation costs of $250,000 and the inclusion of Power Climber operating expenses of $500,000 this year. Power Climber, a manufacturer of power traction hoists, was acquired by FLOW in April 1993.
 "We are continuing to implement productivity programs throughout the organization aimed at reducing operating expenses, and are convinced that our steps are both consistent with our long-term growth objectives and improved profitability," said Thomas A. Cross, vice president, chief operating officer, and chief financial officer.
 Flow International Corp. is the world's leading provider of ultrahigh-pressure waterjets and related products and services for the industrial cutting, cleaning and construction services markets.
 (In thousands except per share data; Unaudited)
 Quarter Ended July 31, 1993 1992
 Revenues $19,355 $19,340
 Cost of goods sold 10,546 10,393
 Gross margin 8,809 8,947
 Expenses 7,515 7,065
 Operating income 1,294 1,882
 Interest & other, net 93 (424)
 Income before taxes and
 extraordinary items 1,387 1,458
 Provision for income taxes 278 370
 Income before extraordinary items 1,109 1,088
 Change in accounting principle 401
 Realization of operating loss carry
 forward of Flow Services 106
 Net income 1,510 1,194
 Earnings per Common Share
 Income before extraordinary .08 .07
 Extraordinary items .03 .01
 Net income .11 .08
 Average shares outstanding 13,708 13,341
 -0- 8/31/93
 /CONTACT: Ronald W. Tarrant of Flow International, 800-645-6992 or 206-813-3286/

CO: Flow International Corp. ST: Washington IN: SU: ERN

IC-JH -- SE003 -- 7546 08/31/93 13:45 EDT
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Publication:PR Newswire
Date:Aug 31, 1993

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