Back to GetFilings.com



Table of Contents

 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 10-Q
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  
 
SECURITIES EXCHANGE ACT OF 1934
 
  For the quarterly period ended July 31, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  
 
SECURITIES EXCHANGE ACT OF 1934
 
  For the transition period from                          to                         
 
Commission file number 0-12448
 

 
FLOW INTERNATIONAL CORPORATION
 
WASHINGTON
 
91-1104842
(State or other jurisdiction
 
(I.R.S. Employer
of incorporation or organization)
 
Identification No.)
 
23500—64th Avenue South
Kent, Washington 98032
(253) 850-3500
 

 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  ¨
 
The number of shares outstanding of common stock, as of August 23, 2002: 15,358,759 shares.
 


Table of Contents
 
FLOW INTERNATIONAL CORPORATION
 
INDEX
 
    
Page

Part I—FINANCIAL INFORMATION
    
Item 1.
  
Consolidated Financial Statements (Unaudited)
    
       
3
       
4
       
5
       
6
       
7
Item 2.
     
11
Item 3.
     
16
Part II—OTHER INFORMATION
    
Item 1.
     
17
Item 2.
     
17
Item 3.
     
17
Item 4.
     
17
Item 5.
     
17
Item 6.
     
17
  
18

2


Table of Contents
 
FLOW INTERNATIONAL CORPORATION
 
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 
 
    
July 31,
2002

    
April 30,
2002

 
    
(unaudited)
        
ASSETS
                 
Current Assets:
                 
Cash and Cash Equivalents
  
$
8,821
 
  
$
7,120
 
Receivables, Net
  
 
57,968
 
  
 
62,774
 
Inventories
  
 
46,314
 
  
 
48,164
 
Deferred Income Taxes
  
 
1,749
 
  
 
1,980
 
Other Current Assets
  
 
11,090
 
  
 
11,608
 
    


  


Total Current Assets
  
 
125,942
 
  
 
131,646
 
Equipment Held for Lease, Net
  
 
5,271
 
  
 
5,968
 
Property and Equipment, Net
  
 
16,730
 
  
 
16,996
 
Intangible Assets, Net of Accumulated Amortization of $9,019 and $8,735, respectively
  
 
12,578
 
  
 
13,182
 
Goodwill
  
 
16,541
 
  
 
16,332
 
Deferred Income Taxes
  
 
6,678
 
  
 
5,115
 
Other Assets
  
 
17,560
 
  
 
17,237
 
    


  


    
$
201,300
 
  
$
206,476
 
    


  


LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
                 
Current Liabilities:
                 
Notes Payable
  
$
2,844
 
  
$
374
 
Current Portion of Long-Term Obligations
  
 
4,955
 
  
 
6,114
 
Accounts Payable
  
 
10,029
 
  
 
11,617
 
Accrued Payroll and Related Liabilities
  
 
4,575
 
  
 
4,844
 
Other Accrued Taxes
  
 
728
 
  
 
2,530
 
Deferred Revenue
  
 
3,854
 
  
 
3,613
 
Other Accrued Liabilities
  
 
9,964
 
  
 
14,920
 
    


  


Total Current Liabilities
  
 
36,949
 
  
 
44,012
 
Long-Term Obligations
  
 
85,139
 
  
 
81,625
 
Customer Deposits
  
 
8,388
 
  
 
7,909
 
    


  


Total Liabilities
  
 
130,476
 
  
 
133,546
 
Minority Interest
  
 
2,263
 
  
 
2,246
 
Stockholders’ Equity:
                 
Series A 8% Convertible Preferred Stock—$.01 par value, 1,000,000 shares authorized, none issued
                 
Common Stock—$.01 par value, 20,000,000 shares authorized, 15,358,759 shares outstanding at July 31, 2002 15,281,759 shares outstanding at April 30, 2002
  
 
154
 
  
 
153
 
Capital in Excess of Par
  
 
55,585
 
  
 
55,158
 
Retained Earnings
  
 
25,226
 
  
 
29,206
 
Accumulated Other Comprehensive Loss
  
 
(12,404
)
  
 
(13,833
)
    


  


Total Stockholders’ Equity
  
 
68,561
 
  
 
70,684
 
    


  


    
$
201,300
 
  
$
206,476
 
    


  


 
See Accompanying Notes to
Condensed Consolidated Financial Statements

3


Table of Contents
 
FLOW INTERNATIONAL CORPORATION
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
 
 
    
Three Months Ended
July 31,

    
2002
    
2001
Revenues
  
$
40,477
 
  
$
46,602
Cost of Sales
  
 
27,538
 
  
 
27,828
    


  

Gross Profit
  
 
12,939
 
  
 
18,774
Expenses:
               
Marketing
  
 
8,239
 
  
 
7,509
Research and Engineering
  
 
3,517
 
  
 
3,899
General and Administrative
  
 
4,628
 
  
 
4,280
    


  

    
 
16,384
 
  
 
15,688
    


  

Operating (Loss) Income
  
 
(3,445
)
  
 
3,086
Interest Expense, Net
  
 
2,174
 
  
 
2,094
Other Expense, Net
  
 
321
 
  
 
365
    


  

(Loss) Income Before Provision for Income Taxes
  
 
(5,940
)
  
 
627
(Benefit) Provision for Income Taxes
  
 
(1,960
)
  
 
207
    


  

Net (Loss) Income
  
$
(3,980
)
  
$
420
    


  

Basic (Loss) Earnings Per Share
  
$
(.26
)
  
$
.03
    


  

Diluted (Loss) Earnings Per Share
  
$
(.26
)
  
$
.03
    


  

 
See Accompanying Notes to
Condensed Consolidated Financial Statements

4


Table of Contents
 
FLOW INTERNATIONAL CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
 
    
Three Months Ended
July 31,

 
    
2002

    
2001

 
Cash Flows from Operating Activities:
                 
Net (Loss) Income
  
$
(3,980
)
  
$
420
 
Adjustments to Reconcile Net (Loss) Income to Cash Used in Operating Activities:
                 
Depreciation and Amortization
  
 
2,197
 
  
 
1,711
 
Other Non-Cash Items
  
 
222
 
  
 
(47
)
Decrease (Increase) in Assets
  
 
5,043
 
  
 
(4,035
)
Decrease in Liabilities
  
 
(7,312
)
  
 
(2,301
)
    


  


Cash Used in Operating Activities
  
 
(3,830
)
  
 
(4,252
)
    


  


Cash Flows from Investing Activities:
                 
Expenditures for Property and Equipment
  
 
(905
)
  
 
(2,094
)
Other
  
 
353
 
  
 
95
 
    


  


Cash Used in Investing Activities
  
 
(552
)
  
 
(1,999
)
    


  


Cash Flows from Financing Activities:
                 
(Repayments) Borrowings under Line of Credit Agreements, Net
  
 
9,398
 
  
 
(28,897
)
Payments of Long-Term Obligations
  
 
(4,793
)
  
 
(768
)
Proceeds from Long-Term Obligations
  
 
—  
 
  
 
25,723
 
Proceeds from Issuance of Warrants
  
 
—  
 
  
 
9,277
 
Proceeds from Issuance of Common Stock
  
 
428
 
  
 
1,033
 
    


  


Cash Provided by Financing Activities
  
 
5,033
 
  
 
6,368
 
    


  


Effect of Changes in Exchange Rates
  
 
1,050
 
  
 
(1,210
)
    


  


Increase (Decrease) in Cash and Cash Equivalents
  
 
1,701
 
  
 
(1,093
)
Cash and Cash Equivalents at Beginning of Period
  
 
7,120
 
  
 
6,808
 
    


  


Cash and Cash Equivalents at End of Period
  
$
8,821
 
  
$
5,715
 
    


  


 
See Accompanying Notes to
Condensed Consolidated Financial Statements

5


Table of Contents
 
FLOW INTERNATIONAL CORPORATION
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands)
 
    
Three Months Ended
July 31,

 
    
2002

    
2001

 
Net (Loss) Income
  
$
(3,980
)
  
$
420
 
Other Comprehensive Income (Loss):
                 
Unrealized Gain on Equity Securities Available for Sale, Net of Tax
  
 
81
 
  
 
47
 
Unrealized Gain on Cash Flow Hedges, Net of Tax
  
 
298
 
  
 
—  
 
Cumulative Translation Adjustment
  
 
1,050
 
  
 
(1,210
)
    


  


Comprehensive Loss
  
$
(2,551
)
  
$
(743
)
    


  


 
 
 
 
See Accompanying Notes to
Condensed Consolidated Financial Statements
 

6


Table of Contents
FLOW INTERNATIONAL CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended July 31, 2002
(unaudited)
 
1.    Basis of Presentation
 
In the opinion of the management of Flow International Corporation (“the Company”), the accompanying unaudited consolidated financial statements contain all adjustments necessary to fairly present the financial position, results of operations and cash flows of the Company. These interim financial statements do not include all information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, and should be read in conjunction with the April 30, 2002 consolidated financial statements included in the Company’s Annual Report filed with the Securities and Exchange Commission on Form 10-K. Operating results for the three months ended July 31, 2002 may not be indicative of future results.
 
2.    Earnings Per Share
 
Basic earnings per share represents net income available to common stockholders divided by the weighted average number of shares outstanding during the period. Diluted earnings per share represents net income available to common stockholders divided by the weighted average number of shares outstanding including the potentially dilutive impact of stock options and warrants, where appropriate.
 
The table below summarizes the weighted average shares outstanding for the Company for the three months ended July 31, 2002 and 2001:
 
    
Three Months Ended
July 31,

    
2002

  
2001

    
(in thousands)
Weighted Average Basic Shares Outstanding
  
15,316
  
15,172
Potentially Dilutive Common Shares from Employee Stock Options
  
—