Back to top

Analyst Blog

Flow International Corporation reported its fiscal first quarter of 2014 (ended Jul 31, 2013) financial results on Sep 9, 2013. The company reported loss per share of 2 cents as compared to earnings per share of 5 cents recorded in the year-ago quarter. Results also lagged the Zacks Consensus Estimate of 1 cent earnings per share.

The above quarterly results include $1.6 million of non-recurring expenses and $1.3 million of unrealized foreign currency exchange loss.

Revenues

Flow International reported 10.9% year-over-year decline in sales to $59.0 million.

Standard segment revenues declined 18% year over year to $50.7 million, while Advanced segment reported sales of $8.3 million, up 97% year over year.  

In the sales category, Flow International’s Standard System sales in the first quarter declined 27% to $29.4 million; Advanced System sales were $8.3 million, up 100%; and Consumable Parts sales were down 4% year over year at $21.3 million.

Margins

Cost of sales in the first quarter went down 9.8% year over year and represented 63.4% of total revenue, up from 62.6% in the year-ago quarter. Gross margin in the quarter came in at 36.6%. Sales and marketing, research and engineering, and general and administrative expenses, as a percentage of total revenue, stood at 32.3%.

Flow International reported 78% fall in its operating income that came in at $0.9 million versus $4.2 million in the year-ago quarter.

Balance Sheet/Cash Flow

Exiting the fiscal first quarter 2014, Flow International’s cash and cash equivalents stood at $13.4 million, a decrease of 13% sequentially.

The company used roughly $0.5 million of cash for operating activities as compared with $2.1 million used in the year-ago quarter. Capital spending increased 5.2% to $1.5 million.

Outlook

For the fiscal second quarter 2014, management of Flow International anticipates roughly 5% sequential increase in revenues to a range of $60-$62 million. Gross margin is expected to be toward the lower end of 38%-42% range. Operating income is expected to be roughly within $3.15-$3.85 million range. Tax rate is expected to be roughly 40%.

Also, as announced previously, Flow International’s initiatives to reduce its operating costs will save $9 million annually. An additional $4 million saving is expected from a new product line launched recently. All these savings are expected to be realized by the end of fiscal year 2014.

Flow International is one of the leading manufacturers of industrial waterjet machines and currently has a $178 million market capitalization. The stock carries a Zacks Rank #4 (Sell). Other stocks to watch out for are Lennox International, Inc. (LII - Snapshot Report), with a Zacks Rank #1 (Strong Buy) while Sandvik AB (SDVKY) and Adept Technology Inc. (ADEP - Snapshot Report) each carry a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%
RF MICRO DE… RFMD 11.76 +2.31%