Flow International Corporation
) reported second quarter fiscal 2014 (ended Oct 31, 2013)
financial results on Dec 4, 2013. The company reported earnings
per share from continuing operations of 5 cents, up 66.7% from 3
cents reported in the year-ago quarter. The bottom line also
surpassed the Zacks Consensus Estimate of 4 cents.
The company is in the process of being acquired by the
middle-market private equity firm, American Industrial Partners
(AIP), for a sum in excess of $200 million or $4.05 per share in
cash. The transaction is anticipated to close at the start of
2014. The company has already received its board of directors'
approval while it still awaits approval from shareholders and
Flow International's sales for the quarter fell 1% year over year
to $66.3 million. The top line has however surpassed management's
guidance range of $60-$62 million.
A brief mention of the two segments of Flow International is
Standard segment reported sales of $57.8 million, down 9% year
over year while sales from Advanced segment were $8.5 million, up
122% year over year.
Flow International also reports sales by category. Standard
System sales in the second quarter declined 14% to $34.6 million;
Advanced System sales were $8.5 million, up 127%; and Consumable
Parts sales were up 1% year over year to $23.2 million.
Flow International's efforts to reduce its costs were seen in the
fiscal second quarter as the company reported a 3% decline in
cost of sales. As a percentage of revenues, cost of sales was
61.2% versus 62.1% in the year-ago quarter. Gross margin in the
quarter came in at 38.8%.
Sales and marketing as well as research and engineering expenses
fell 10% and 5% respectively, while an increase of 3% was
recorded in general and administrative expenses. These combined
expenses came to 30.6% of revenues.
Flow International reported a 2% increase in its operating income
that came in at $4.1 million versus $4.0 million in the year-ago
Balance Sheet/Cash Flow
Exiting the fiscal second quarter 2014, Flow International's cash
and cash equivalents stood at $14.3 million, up 6.7% from $13.4
million in the previous quarter.
The company generated roughly $9.4 million of cash from operating
activities as compared with $7.5 million generated in the
year-ago quarter. Capital spending decreased 63.3% to $0.8
Flow International is one of the major manufacturers of
industrial waterjet machines. The stock currently carries a Zacks
Rank #3 (Hold). Some other stocks worth considering in the
Raven Industries Inc.
Generac Holdings Inc.
). All these hold a Zacks Rank #2 (Buy).
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