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Announces Cost Reduction Initiatives Retains UBS and Commences Process to Evaluate Strategic Alternatives
KENT, Wash., June 7, 2013 (GLOBE NEWSWIRE) -- Flow International Corporation (Nasdaq:FLOW), the world's leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications, today provided a financial update and announced certain steps it is undertaking to reduce operating expenses and to enhance shareholder value.
For the 2013 fiscal fourth quarter ended April 30, 2013, the Company expects revenues to be approximately $58 million and operating profit to approximate breakeven. This compares to 2012 fiscal fourth quarter revenues of $63.4 million and operating income of $2.4 million.
"Prior to this quarter, we achieved record sales in three of the last four quarters and sequential growth in nine of the past ten quarters. In our recently completed fiscal fourth quarter, however, there was renewed uncertainty in the marketplace and orders were relatively uneven," said Charley Brown, President and CEO of Flow. "While we continue to experience robust demand in certain markets, we believe that macro-economic uncertainty is making some customers more cautious. That caution was evident in our fiscal fourth quarter and it continues today, leading us to expect similar revenues in our 2014 fiscal first quarter."
Mr. Brown added, "We have already taken action to reduce our operating costs by approximately 10 percent, or $9 million on an annualized basis. In addition, we are in the process of increasing gross profit margins by 10 points on a recently launched line of new products, which should result in an additional annualized cost reduction of approximately $4 million. We expect to fully realize the benefits of our $13 million of annualized cost reduction initiatives by the end of fiscal 2014."
As a result of the cost reduction and other initiatives, the Company expects to record restructuring charges and other non-recurring costs of approximately $1.0 million in the 2014 fiscal first quarter. Excluding these charges, with revenue levels similar to the fourth quarter of fiscal year 2013, Flow expects to deliver operating income of approximately $2.0 million in the 2014 fiscal first quarter.