Subject: Flow International Announces Fiscal 2007 Third Quarter Results Flow International Announces Fiscal 2007 Third Quarter Results Flow International Announces Fiscal 2007 Third Quarter Results Revenues Increase 18%, Shapecutting Systems sales increase 38%    KENT, Wash., March 29 /PRNewswire-FirstCall/ -- Flow International Corporation (Nasdaq: FLOW), the world's leading developer and manufacturer of industrial waterjet machines used for cutting and cleaning applications around the world, today reported results for the fiscal 2007 third quarter ended January 31, 2007.  For the quarter, Flow reported an 18% increase in consolidated sales to $56.0 million compared to the corresponding year-ago quarter Net income was $2.0 million, or $0.05 basic and diluted earnings per share.    By comparison, for the corresponding year-ago quarter ended January 31, 2006, Flow reported consolidated sales of $47.5 million and a net loss of $2.3 million, or ($0.07) basic and diluted loss per share.  The year-ago quarter was significantly impacted by the effect of stock price appreciation on the Key Executive Retention Program (KERP) of $427,000 and the fair value adjustment of the warrants issued in the Private Investment in Public Equity transaction completed on March 21, 2005 ("PIPE Transaction") of $2.1 million.  In addition, the year-ago results include a $407,000 working capital adjustment to the loss on sale of its discontinued Avure business, which the company sold in October 2005.    "Despite ongoing delays in the next round of aerospace orders and the corresponding impact on revenues and margins, we continue to grow our business profitably at an impressive pace while keeping operating expenses in line," said Stephen R. Light, Flow's President and Chief Executive Officer.  "Ongoing investments in market development and new product introductions are producing results across a broad range of our existing and emerging markets, and geographies.  Our organization is highly flexible and continues to adapt as we introduce new products to a growing range of customers across a wide spectrum."    Operations Review    For the fiscal 2007 third quarter, compared to the prior-year quarter:    -- System sales grew 20% to $41.9 million, despite a 43% decline from the       year-ago quarter in aerospace revenues as a result of the highly       publicized cancellation of work on two large aerospace systems.       Excluding aerospace, system sales during the quarter increased 38%. As       previously announced, the Company expects further aircraft manufacturer       delays to curb aerospace sales in the coming quarters.    -- Revenues from aftermarket consumables increased 11% to $14.1 million,       as the Company puts more systems in service and increases its share of       ongoing spare parts and maintenance work with existing customers. Flow       supports more than 75% of its installed base of machines, each of which       requires roughly 5% of its original purchase price in spare and       consumable parts annually.    -- North America Waterjet sales grew 12% to $28.4 million, as the Company       benefits from broadening awareness of its core technology and from       increased efforts on marketing and new products.  Flow's 87,000 psi.       HyperPressure system, introduced at September 2006's IMTS show has       contributed significantly to this growth. Flow was recently highlighted       on the widely distributed Discovery Network cable television series       American Chopper, which showcased the stars of Orange County Choppers       as they designed and built a customized Flow motorcycle using one of       Flow's AF-Series 5-Axis Waterjet series for 3-dimensional cutting at       speeds of up to 400 inches per minute.    -- Sales in Asia increased 36% to $9.8 million on strong semiconductor new       system sales, as well as, robust aftermarket sales of consumables and       spare parts.  As previously noted, the Company expects Asia's results       in the fourth quarter of the year to continue to be adversely affected       by the recently completed Asia investigation and the slowdown in the       flash memory semiconductor industry.    -- Other International Waterjet sales, consisting of sales in Europe and       South America, increased 34% to $13.1 million on strong shapecutting       system demand and a weak U.S. dollar relative to the Euro.  The Company       expects to continue to benefit from its significant investment in its       European sales and marketing efforts.    -- Revenues declined 10% to $4.7 million in the Applications segment,       which represents sales of automation and robotic waterjet cutting cells       and non-waterjet systems primarily to the North American automotive       market.  The decrease was less than in prior quarters, as the company       continues to transition away from the automotive industry, which       remains weak, and starts to identify non-automotive demand for its       robotic waterjet technologies.  Last month, Flow noted that it had       received three orders from a U.S. Army supplier for the Company's first       ground transportation composite cutting cell, to be used on Army Humvee       parts.    Conference Call    Flow plans to hold a conference call to discuss these results tomorrow: Friday, March 30 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time).  The conference call may be heard by dialing +1-303-262-2130.  A 48-hour replay will be available following the call by dialing 1-303-590-3000; the replay passcode is 11087441.  A live audio Webcast of the conference call may be found in the investor section at http://www.flowcorp.com/.  A Webcast replay of the call will also be available for two weeks.    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/.    This press release contains forward-looking statements relating to future events or future financial performance that involve risks and uncertainties.  The words "believe," "expect," "intend," "may," "anticipate," variations of such words and similar expressions identify forward-looking statements but their absence does not mean that the statement is not forward-looking.  These statements are only predictions and actual results could differ materially from those anticipated in these statements based on a number of risk factors, including those set forth in the Flow International Corporation Form 10-K/A filed with the Securities and Exchange Commission.  Forward-looking statements in this press release include, without limitation, statements that the Company expects further aircraft manufacturer delays to curb aerospace sales, that the Company expects results in the fourth quarter of the year to be affected by the Asia investigation and that investments in European sales and marketing will continue to boost sales.  Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.                          Flow International Corporation                      Consolidated Statement of Operations                                   (Unaudited)    Dollars in thousands, except per share data                             Three months ended          Nine months ended                                 January 31,                January 31,                                               %                          %                            2007     2006   Change    2007      2006 Change    Sales                  $56,038  $47,530    18%  $163,851  $140,201 17%    Cost of sales           32,294   27,344    18%    93,464    79,748 17%    Gross margin            23,744   20,186    18%    70,387    60,453 16%    Operating expenses:         Sales and          marketing          9,613    8,359    15%    29,774    23,808 25%         Research and          engineering        2,419    2,070    17%     7,051     5,640 25%         General and          administrative     9,267    8,306    12%    25,269    21,656 17%         Restructuring         -         76  -100%       -       661  -100%         Gain on Barton          sale                 -        -       NM       -      (2,500) NM    Operating expenses      21,299   18,811    13%    62,094    49,265 26%    Operating income         2,445    1,375    78%     8,293 11,188   -26%    Interest income     (expense), net            153       22   596%       354   (1,341) -126%    Fair Value Adjustment     on Warrants Issued        -     (2,117) -100%       -     (6,952) -100%    Other income     (expense), net            846     (789)    NM     1,871    (1,368) NM    Income (loss) before     provision for income     taxes                   3,444   (1,509)    NM    10,518     1,527 NM    Provision for income     taxes                  (1,415)    (398)  256%    (2,979)   (2,213) 35%    Income (loss) from     continuing operations   2,029   (1,907)    NM     7,539      (686) NM    Income from     discontinued     operations, net of     tax                       -        -       NM       -         966 NM    Loss on sale of     discontinued     operations, net of     tax                       -       (407) -100%      (726) (1,554)  -53%    Net Income (loss)       $2,029  $(2,314)    NM    $6,813   $(1,274) NM    Income (Loss) per     share:    Basic from continuing     operations              $0.05   $(0.06)    NM     $0.20    $(0.02) NM    Diluted from     continuing operations   $0.05   $(0.06)    NM     $0.20    $(0.02) NM    Basic net income     (loss)                  $0.05   $(0.07)    NM     $0.18    $(0.04) NM    Diluted net income     (loss)                  $0.05   $(0.07)    NM     $0.18    $(0.04) NM    Weighted average     shares outstanding     (000):           Basic            37,238   34,653           37,169    34,516           Diluted          37,797   34,653           37,882    34,516    NM = not meaningful                          Flow International Corporation                                Supplemental Data                                   (Unaudited)    Dollars in thousands                               Three months ended         Nine months ended                                   January 31,               January 31,                                                %                         %                              2007     2006   Change   2007      2006 Change    Divisional revenue     breakdown:       Flow Waterjet        Systems:            Systems          $41,938  $34,847   20%  $120,986  $100,518 20%            Consumable parts             and services     14,100   12,683   11%    42,865    39,683 8%       Total                 $56,038  $47,530   18%  $163,851  $140,201 17%    Segment revenue     breakdown:          North America           Waterjet          $28,439  $25,330   12%   $90,027   $76,901 17%          Asia Waterjet        9,756    7,168   36%    25,245    20,404 24%          Other           International           Waterjet           13,110    9,771   34%    35,694    27,013 32%          Other                4,733    5,261  -10%    12,885  15,883  -19%                             $56,038  $47,530   18%  $163,851  $140,201 17%    Depreciation and     amortization expense       $783     $645   21%    $2,196  $2,982  -26%    Capital spending          $1,886     $487  287%    $4,447    $1,367 225%                         Flow International Corporation                           Selected Balance Sheet Data    Dollars in thousands                                         January 31,    April 30,                                           2007            2006       % Change                                                        (restated)    Cash                                      $37,406      $36,186        3%    Receivables, net                           25,904       34,193      -24%    Inventories                                26,314       22,775       16%    Total debt                                  4,680        7,021      -33%    Contact:  Flow Investor Relations              253-813-3286 SOURCE  Flow International Corporation    -0-                             03/29/2007    /CONTACT:  Flow Investor Relations, +1-253-813-3286/    /Web site:  http://www.flowcorp.com/    (FLOW) You are receiving this transmission from PR Newswire on behalf of the issuer of the information contained in this email. 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