8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 12, 2008 (November 10, 2008)
Date of Report (Date of earliest event reported)

FLOW INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-12448	91-1104842
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

23500 — 64th Avenue South, Kent, Washington 98032
(Address of principal executive offices) (Zip Code)

(253) 850-3500
(Registrant’s telephone number, including area code)

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

þ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

     On November 10, 2008, Flow International Corporation, a Washington corporation (“Flow”), entered into a First Amendment to Agreement and Plan of Merger (the “Amendment”) with Orange Acquisition Corporation, a Washington corporation and direct wholly-owned subsidiary of Flow (“Merger Sub”), OMAX Corporation, a Washington corporation (“OMAX”), certain shareholders of OMAX and John B. Cheung, Inc., as Shareholders’ Representative. The Amendment amends certain provisions of the Agreement and Plan of Merger (the “Merger Agreement”) with Flow, Merger Sub, OMAX, certain shareholders of OMAX and John B. Cheung, Inc., as Shareholders’ Representative. The Merger Agreement, as amended, contemplates that, subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into OMAX, with OMAX continuing after the merger as the surviving corporation (the “Merger”).

     Pursuant to the Amendment, the total amount of cash to be paid by Flow at the closing of the Merger is approximately $71,000,000 (compared to $75,000,000 under the original Merger Agreement), subject to adjustment and an escrow, and including a promissory note as described below. Flow will issue shares at closing worth $4,000,000, based on the average closing share price of Flow common stock for the 10 trading days ending two business days prior to the closing of the Merger (the “Closing Share Price”). Previously, the Merger Agreement provided for the issuance of approximately 3,750,000 shares, subject to adjustment if the Closing Share Price were less than $8.00.

     The amount of contingent consideration to be paid (“Contingent Consideration”) is determined in relation to thresholds based on the daily closing share price for Flow common stock for the six months ending 36 months after the closing of the transaction (the “Average Share Price”). If the Average Share Price is less than $7.00, no contingent consideration will be paid. If the Average Share Price is equal to $7.00, $5,000,000 will be paid. If the Average Share Price is between $7.01 and $14.00, payment shall be derived on a straight line interpolation basis between $5,000,000 and $52,000,000 and distributed accordingly. Flow may, at its option, pay any Contingent Consideration in Flow common stock, on the basis of the Average Share Price or, if an Interim Election is made as described below, on the basis of the Interim Average Share Price. Previously, the Merger Agreement provided for the issuance of up to 1,733,333 shares of Flow common stock or up to a maximum of $26,000,000 to be paid two years following the Merger, with no minimum threshold payment, and the Contingent Consideration was based upon an Average Share Price range of $12.00 to $14.00. This range was subject to adjustment based on the Closing Share Price, and at a Closing Share Price of $3.00 would have been $7.00 to $9.00.

     If, between the last day of the sixth (6th) full month after the closing of the Merger and ending on the last day of the thirty-fifth (35th) full month after the closing of the Merger, the average daily closing share price of Flow common stock for the trailing six-month period quoted on the NASDAQ Global Market is equal to or greater than $7.00 (the “Interim Average Share Price”), the former OMAX shareholders may elect to receive contingent consideration on the basis of the Interim Average Share Price instead of the Average Share Price (such election, an “Interim Election”). An Interim Election can only be made once by any particular former OMAX shareholder, any Interim Election is permanent and may not be revoked, and any Interim Election will also be subject to the terms and conditions of the Escrow Agreement (as defined in the Merger Agreement, as amended). Any Interim Election may only be made during the first fifteen days of the month following the sixth full calendar month after the closing of the Merger, and each full calendar month period thereafter, with reference to the Interim Average Share Price occurring during the prior six months then elapsed. Previously, no such Interim Election was available to OMAX shareholders under the Merger Agreement.

     At the closing of the Merger, an amount equal in value to $8,450,000 composed of non-negotiable promissory note, with interest payable at 2% per annum, shall be withheld from the cash merger consideration payable, and placed into escrow for a period of 18 months following closing to secure claims by Flow for indemnification and for adjustments based on net working capital. Previously, the escrow was equal in value to $9,450,000 and was composed of cash, Flow common stock and a promissory note.

     The Amendment has also amended the Merger Agreement to provide for a mutual termination right if the Merger has not been occurred by March 31, 2008.

     No other material amendments have been made to the Merger Agreement. The Merger Agreement, as amended, must be approved by the shareholders of OMAX, but not the shareholders of Flow. A registration statement relating to the issuance of Flow shares, containing a prospectus/proxy statement, will be filed with the Securities and Exchange Commission (the “Commission”). When the registration statement is declared effective, a meeting of OMAX shareholders will be called to approve the Merger Agreement as amended and related transactions. A majority of OMAX shares must vote to approve the merger. Holders of approximately 60% of the outstanding shares of OMAX common stock have entered into agreements with Flow to vote in favor of the merger.

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     This description of the Amendment is qualified in its entirety by the terms and conditions of the Amendment, which is filed as Exhibit 99.1 hereto, and is incorporated herein by reference, and by the terms and conditions of the Merger Agreement, which was previously filed with the Commission on a Form 8-K filed on September 11, 2008, and which is also incorporated herein by reference.

     The Merger Agreement, as amended, provides investors with information regarding its terms. It is not intended to provide any other factual information about Flow or OMAX. In addition, the Merger Agreement, as amended, contains representations and warranties of each of the parties to the Merger Agreement, as amended and the assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties delivered in connection with the execution of the Merger Agreement, as amended. The parties reserve the right to, but are not obligated to, amend or revise the Merger Agreement, as amended or the disclosure schedules. In addition, certain representations and warranties may not be accurate or complete as of any specified date because they are subject to a contractual standard of materiality different from those generally applicable to shareholders or were used for the purpose of allocating risk between the parties rather than establishing matters as facts. Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of facts, or for any other purpose, at the time they were made or otherwise.

     Flow and OMAX intend to file with the SEC a prospectus/proxy statement and other relevant materials in connection with the proposed acquisition of OMAX by Flow pursuant to the terms the Merger Agreement, as amended. The prospectus/proxy statement will be mailed to the stockholders of OMAX. Investors and security holders of OMAX are urged to read the prospectus/proxy statement and the other relevant materials when they become available because they will contain important information about Flow, OMAX and the proposed merger.

The prospectus/proxy statement and other relevant materials (when they become available), and any other documents filed by Flow with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Flow by contacting John Leness, Secretary of Flow, at (253) 850-3500. Investors and security holders of OMAX are urged to read the prospectus/proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed merger.

ITEM 9.01. Exhibits

     (d) Exhibits

99.1	First Amendment to Agreement and Plan of Merger dated November 10, 2008 among OMAX Corporation, Flow International Corporation, Orange Acquisition Corporation, certain shareholders of OMAX Corporation and John B. Cheung, Inc. as Shareholders’ Representative.
99.2	News Release dated November 10, 2008.
99.3	OMAX Update Conference Call Transcript dated November 11, 2008.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 11, 2008	FLOW INTERNATIONAL CORPORATION
	By:	/s/  John S. Leness
	Name:	John S. Leness
	Title:	General Counsel and Secretary

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EX-99.1

Exhibit 99.1

FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER

     THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the “Amendment”), dated November 10, 2008, among Flow International Corporation, a Washington corporation (“Parent”), Orange Acquisition Corporation, a Washington corporation and a wholly-owned subsidiary of Parent (“Sub”), OMAX Corporation, a Washington corporation (“Company”), John B. Cheung, John H. Olsen, James M. O’Connor and Puget Partners, L.P., the holders of forty-five percent (45%) of the issued and outstanding ownership interests (other than holders of Company Options) in the Company (collectively referred to as the “Major Shareholders”), and John B. Cheung, Inc., a personal holding corporation owned by John B. Cheung (the “Shareholders’ Representative”) as agent and attorney-in-fact for the holders of Company Shares (as defined in Section 2.1), amending that Agreement and Plan of Merger (the “Agreement”), dated September 8, 2008, among Parent, Sub, Company, the Major Shareholders and the Shareholders’ Representative.

     INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and the mutual representations, warranties, covenants, and agreements in this Amendment and in the Agreement, the parties hereby agree to amend the Agreement as follows:

1. Article II of the Agreement is deleted in its entirety and replaced with the following:

ARTICLE II
EFFECT OF THE MERGER; DELIVERY OF CONSIDERATION

     2.1 Effect on Capital Stock. As of the Effective Time, by virtue of the Merger and without any action (except as provided in Section 4.5 and in this Section 2.1) on the part of Sub, Parent, Company, or the holder of any shares of Company capital stock (“Company Shares”):

          2.1.1 Capital Stock of Sub. Each share of Sub common stock, no par value per share, issued and outstanding immediately before the Effective Time, will be converted into one validly issued, fully paid, and nonassessable share of Surviving Corporation common stock (“Surviving Corporation Common Stock”), with the stock certificate of Sub evidencing ownership of such share of Surviving Corporation Common Stock.

          2.1.2 Cancellation of Company Shares. Each Company Share owned directly or indirectly by Company or by any subsidiary (as defined in Section 10.2) of Company will automatically be cancelled and retired and will cease to exist and no consideration will be delivered or deliverable in exchange for such Company Shares. Company will obtain a written consent to such cancellation from any subsidiary, whether or not wholly owned, that owns Company Shares.

          2.1.3 Conversion of Company Securities. Subject to the limitations on payments and the timing of payments as set forth in Section 2.2, Section 2.3 and Article VIII, each Company Share and Company Option (as defined below) validly issued and outstanding immediately before the Effective Time (other than Appraisal Shares, as defined in Section 2.1.6, and those Company Shares referred to in Section 2.1.2), will, without any action on the part of the holder thereof (except as set forth in this Section 2.1.3) be converted into, or with respect to Company Options, cancelled in exchange for, their respective conversion payment (“Conversion Payment”), which will be calculated as follows:

               (a) Each share of Company common stock, no par value (the “Company Common Shares”), issued and outstanding immediately before the Effective Time will convert into the right to receive (i) an amount in cash equal to the Per Share Cash Consideration (as defined below), (ii) the Per Share Stock Consideration (as defined below), and (iii) the Per Share Contingent Consideration (as defined below).

               (b) Each Company Option (as defined below) that is validly issued and unexpired, unexercised, and outstanding immediately before the Closing will be exercised immediately before Closing, with the consent of the holder thereof, (such person, the “Option Holder”), for Company Shares; provided that the right of

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the Option Holder to receive the Per Share Cash Consideration (as defined below) shall be subject first to deduction for (i) the respective aggregate exercise price of the Company Option(s) being exercised, (ii) any previous loans or advances to such Option Holder related to the previous acquisition of Company Shares by the exercise of options which occurred in April 2008, and (iii) the amount of any applicable payroll, income tax or other withholding taxes being paid on behalf of the Option Holder arising from the exercise of a Company Option (collectively, the “Option Advances”), which shall be treated as a partial payment of the Per Share Cash Consideration due the former Option Holder.

     At the Effective Time, all Company Shares will be cancelled and will cease to exist and each certificate (a “Certificate”) previously representing any Company Shares will represent only the right to receive the applicable Conversion Payment as provided by this Section 2.1.3. The amount that the holders of Company Shares are entitled to receive at Closing under this Section 2.1.3 will be reduced by their pro rata share of (i) the Escrow Amount (as defined in Section 2.2.1), (ii) the Employee Retention Pool Amount (as defined in Section 2.2.2), and (iii) in the case of the Option Holders, the amount of Option Advances.

     The numbers used below and in the pro forma calculations in the attached Schedule 2.1, each rounded to the nearest dollar are for purposes of illustration of the Per Share Cash Consideration only and will be adjusted and set forth in the final Schedule 2.1, which will be determined in accordance with the following procedures, adjustments, and definitions and when approved in writing by Parent and Company before Closing will be the final and determinative interpretation of the following, each term used as defined below:

(i)	Base Cash Amount	$[•]
(ii)	Plus: Option Consideration	$[•]
(iii)	Less: Working Capital Deficit, or plus Working Capital Credit (defined in Section 2.3(a))	$[•]
(iv)	Less: Expenses	$[•]
(v)	Subtotal: Gross Distributable Cash Amount (defined below)	$[•]
(vi)	Divided by: Participating Common Share Equivalents (PCSEs)
(vii)	Per Share Cash Consideration	$[•]

The following definitions will be used in making the above calculation and for purposes of this Article II:

     “Base Cash Amount” means $71,000,000, less the Employee Retention Pool Amount and less the amounts provided for in Section 6.9.

     “Company Options” means each unexpired, unexercised vested (following vesting immediately prior to Closing in accordance with Section 3.1.23) Company Option that is outstanding immediately before the Closing with an exercise price less than the Per Share Amount as finally determined.

     “Expenses” means the fees (including financial advisory and professional fees), costs, expenses, bonuses, and charges incurred by Company in connection with the Transactions, including fees for services provided by the parties as listed on Schedule 2.1.3, which schedule shall be provided by Company to Parent prior to Closing, and fees to be paid by Parent pursuant to Section 6.9, except to the extent such fees, costs, expenses, bonuses and charges were paid or accrued prior to the computation of Net Working Capital or are included in the computation of Net Working Capital.

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     “Gross Distributable Cash Amount” means the Base Cash Amount, plus the Option Consideration and the Working Capital Credit, and less (a) the Working Capital Deficit, and (b) Expenses.

     “Gross Distributable Contingent Consideration” means the contingent consideration payable pursuant to Section 2.1.5 below.

     “Gross Distributable Stock Consideration” means the consideration payable pursuant to Section 2.1.4 below.

     “Option Consideration” means the aggregate exercise price of all Company Options outstanding immediately before Closing (and before the exercise of such Company Options pursuant to this Section), and including the aggregate of any previous loans or advances to Option Holders related to the previous acquisition of Company Shares by the exercise of options which occurred in April 2008.

     “PCSEs” or “Participating Common Stock Equivalents” means all of the Company Common Shares including Company Common Shares issued upon exercise of Company Options outstanding immediately before Closing.

     “Per Share Cash Consideration” means the Gross Distributable Cash Amount divided by the PCSEs.

     “Per Share Contingent Consideration” means the Gross Distributable Contingent Consideration divided by the PCSEs.

     “Per Share Stock Consideration” means the Gross Distributable Stock Consideration divided by the PCSEs.

          2.1.4 Stock Consideration. Subject to the terms and conditions of Section 2.1.3 above, the Conversion Payment shall include the right to receive shares of Parent Common Stock, $.01 par value (“Parent Common Stock”) to be issued pro rata to the holders of PCSEs, in a number reflecting a value of $4,000,000, based upon the average daily closing price per share of Parent Common Stock quoted on the The NASDAQ Global Market during the ten (10) trading day period ending two (2) business days prior to Closing (“Closing Share Price”). Notwithstanding any other provision of this Agreement, neither certificates nor scrip for fractional shares of Parent Common Stock shall be issued in the Merger. Each holder of Company Common Shares who otherwise would have been entitled to a fraction of a share of Parent Common Stock (after taking into account all PCSEs delivered by such holder) shall receive in lieu thereof cash (without interest) in an amount determined by multiplying the fractional share interest to which such holder would otherwise be entitled by the Closing Share Price, rounded to the nearest whole cent.

          2.1.5 Contingent Consideration. Subject to the terms of Section 2.1.3 above, and subject to the right of a holder of PCSEs to make an Interim Election as set forth below, the Conversion Payment shall include the right to receive an aggregate amount up to $52,000,000, which shall be paid on the third anniversary of Closing based on the average daily closing share price for Parent Common Stock quoted on The NASDAQ Global Market or similar quotation service for the six (6) months ending thirty six (36) months after Closing, or if no such quotation is available, the average daily closing share price for Parent Common Stock for the last six (6) months that such quotations were available (“Average Share Price”). The calculation of Average Share Price shall be adjusted as appropriate in the event of any stock split or stock dividend by Parent. If any amounts become payable pursuant to this Section 2.1.5, Parent shall have the option of distributing Parent Common Stock to the holders of PCSEs in lieu of such cash, which shall be based on the Average Share Price, or if an Interim Election is made as described below, the Interim Average Share Price. If the Average Share Price is:

     a. less than or equal to $6.99, no payment or distribution shall be made under this Section 2.1.5;

     b. equal to $7.00, a payment of an additional $5,000,000 shall be paid to the holders of the PCSEs; or

     c. between $7.01 and $14.00, additional amounts shall be derived on a straight line interpolation basis between $5,000,000 and $52,000,000 and distributed to the holders of PCSEs accordingly.

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     If, during the period beginning on the last day of the sixth (6th) full month after Closing and ending on the last day of the thirty-fifth (35th) full month after Closing (“Interim Election Period”), the average daily closing share price of Parent Common Stock for the trailing six (6) month period quoted on The NASDAQ Global Market or similar quotation service is equal to or greater than $7.00 (“Interim Average Share Price”), a holder of PCSEs may elect to receive contingent consideration under this Section 2.1.5 on the basis of the Interim Average Share Price in lieu of the Average Share Price (“Interim Election”). No later than the fifth (5th) day of every calendar month during the Interim Election Period, Parent shall publish on its website, a monthly statement of the Interim Average Share Price for the applicable trailing six month period and all prior trailing six month periods in a format reasonably acceptable to the Shareholders’ Representative. A holder of PCSEs may only make an Interim Election once for all the PCSEs held, any Interim Election is permanent and may not be revoked, and any Interim Election will also be subject to the terms and conditions of the Escrow Agreement. Any Interim Election will be reported to Parent on an Interim Election form substantially in the form attached hereto as Exhibit 2.1.5, and may be made in the first fifteen (15) calendar days of any month, following the sixth (6th) full calendar month after Closing, with reference to the Interim Average Share Price occurring during the prior six (6) calendar months then elapsed. For example, if the Closing occurs on January 15, 2009, and the Interim Average Share Price for the 6 months beginning February 1, 2009 and ending July 31, 2009 is $7.50, then a holder of PCSEs may elect between August 1 to August 15, 2009 to make an Interim Election on a $7.50 basis. Such election will be deemed valid if postmarked or otherwise sent with a documented confirmation, on or before the end of business (5:00 PM Pacific Time) of the 15^th day of the open election period (the first fifteen calendar days of each month). If a holder of PCSEs does not make a valid Interim Election during the Interim Election Period, then that holder shall receive contingent consideration using the Average Share Price as described above. The right to any payment under this Section 2.1.5 shall be personal, non-negotiable, and non-transferable except by operation of law or by will.

          2.1.6 Appraisal Rights. Company Shares validly issued and outstanding immediately before the Effective Time and held by a holder who has not consented to the Merger in writing and who is entitled to demand and properly demands appraisal rights for such Company Shares in accordance with the WBCA (the “Appraisal Shares”) will not be converted into a right to receive the Conversion Payment unless such holder fails to perfect or withdraws or otherwise loses such holder’s appraisal rights. If, after the Effective Time, such holder fails to perfect or withdraws or otherwise loses such holder’s appraisal rights, such Company Shares will be treated as if they had been converted as of the Effective Time in accordance with Section 2.1.3, without any interest. Company will give Parent prompt notice of any demands received by Company for appraisal rights, and Parent will have the right to participate in all negotiations and proceedings with respect to such demands. Company will not, except with the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands. Any amounts paid to a holder by Company in accordance with appraisal rights in excess of the Per Share Amount such holder would have otherwise received will be deducted from the Escrow Amount (as defined in Section 2.2 below) and will not be reimbursed by Parent or any affiliate of Parent.

     2.2 Escrow.

          2.2.1 Escrow Amount. At Closing, an amount equal to $8,450,000 (pro rata based upon the total consideration to be received by such holder at Closing, the “Escrow Amount”) will not be distributed to holders of Company Shares in accordance with Section 2.1.3 but rather will be deposited by Parent with, and held by BNY Mellon Shareowner Services or other bank or trust company as Parent may choose in its discretion, as escrow agent, in an escrow fund in accordance with the Escrow Agreement substantially in the form attached hereto as Exhibit 2.2.1(a) (the “Escrow Agreement”) to fund payments related to Net Working Capital to the extent required by Section 2.3 and to be the sole and exclusive remedy to secure claims by Parent or Surviving Corporation for indemnification under this Agreement, in accordance with and subject to the terms of Article VIII. The Escrow Amount will take the form of an unsecured promissory note substantially as attached hereto as Exhibit 2.2.1(b) (the “Escrow Note”). The release of the Escrow Amount will occur promptly following eighteen (18) months from the Closing, and shall be subject to the terms hereof and of the Escrow Agreement; provided, however, that in the event of any conflict between this Agreement and the Escrow Agreement, the terms of the Escrow Agreement will control. The Escrow Agreement shall provide that interest accruing to the Escrow Amount shall become part of the escrowed funds and that for purposes of distribution, such interest shall follow the principal amount.

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          2.2.2 Employee Retention Pool. At Closing, cash in the aggregate amount as provided on Schedule 2.2.2, which schedule shall be provided by Company to Parent at least five business days prior to Closing (the “Employee Retention Pool Amount”, and together with the Escrow Amount, the “Escrow Amounts”) that would otherwise be received by holders of Company Shares in accordance with Section 2.1.3 (pro rata based upon the total consideration to be received by such holder at Closing) will not be distributed to or made available for holders of Company Shares in accordance with Section 2.1.3 but rather will be deposited by Parent with, and held by Foster Pepper PLLC or such bank or trust company as Parent may choose in its discretion, as escrow agent, in an escrow fund (the “Employee Retention Escrow”) in accordance with the Employee Retention Escrow Agreement substantially in the form attached hereto as Exhibit 2.2.2 (the “Employee Retention Escrow Agreement”, and together with the Escrow Agreement, the “Escrow Agreements”) to fund payments related to the employee retention pool to be created in accordance with Section 6.8(d). The release to Parent or Company of the portion of the Employee Retention Pool Amount earned by eligible employees, as listed on Schedule 2.2.2, who are employed with Parent or Company on the six (6) month anniversary of the Closing and have satisfied any other conditions necessary to earn their respective retention bonuses, as specified on Schedule 2.2.2, plus the employer’s share of FICA (OASDI and Medicare) taxes on such portion will occur shortly after the six (6) month anniversary of Closing, with the remaining portion (if any) of the Employee Retention Pool Amount to be used to pay fees and expenses of the Employee Retention Escrow or retained under the Employee Retention Escrow Agreement until immediately prior to the distribution of the Escrow Amount. As soon as practicable after the six (6) month anniversary of the Closing and Company’s or Parent’s receipt of the applicable funds from the Employee Retention Escrow, Company or Parent shall pay retention bonuses (less applicable tax withholdings and any other required withholdings or deductions) to the eligible employees who earned the right to receive such bonuses and remit the employees’ withheld taxes plus the employer’s share of FICA taxes to the applicable taxing authority. Immediately prior to the distribution of the Escrow Amount, the remaining Employee Retention Escrow Amount (including any interest accruing thereto but less any fees and expenses of the Employee Retention Escrow) will be thereupon deposited with the Escrow Agent under the Escrow Agreement for distribution according to its terms, which terms shall specify that such remaining Employee Retention Escrow Amount shall not be available for the securing of indemnification claims, the reimbursement of fees and expenses, or the funding of payments relating to Net Working Capital. All releases of the Employee Retention Pool Amount will be subject to the terms hereof and of the Employee Retention Escrow Agreement; provided further, that in the event of any conflict between this Agreement and the Employee Retention Escrow Agreement, the terms of the Employee Retention Escrow Agreement will control.

     2.3 Net Working Capital.

               (a) On the Closing Date, Company will have Net Working Capital that is not less than $7,000,000 (“Minimum Working Capital”), nor more than $9,000,000 (“Maximum Working Capital”). To the extent that Company has Net Working Capital on the Closing Date that is less than the Minimum Working Capital, such deficiency will be deducted from the Base Amount in accordance with Section 2.1.3 as the “Working Capital Deficit.” To the extent that Company has Net Working Capital on the Closing Date that is greater than the Maximum Working Capital, such excess will be added to the Base Amount in accordance with Section 2.1.3 as the “Working Capital Credit.”

               (b) For purposes of this Agreement, the term “Net Working Capital” means: (i) Total Current Assets (as defined below) less (ii) all accrued Total Current Liabilities (as defined below). “Fixed assets, net,” “intangible assets,” deferred tax assets and deferred tax liabilities will be excluded from the determination of Net Working Capital. For avoidance of doubt, “Total Current Assets” as reflected on the Closing Balance Sheet will include: (i) cash and cash equivalents; (ii) short-term investments; (iii) accounts receivable outstanding not more than sixty (60) days from their due date and other receivables net of doubtful accounts; (iv) inventories (net of allowance for obsolete inventory) and (v) prepaid expenses and other current assets. “Total Current Liabilities” as reflected on the Closing Balance Sheet will include: (w) accounts payable; (x) accrued taxes, payroll and benefits; (y) other “Current Liabilities”; and (z) the current portion (due within twelve (12) months) of any Debt. Each of the foregoing terms will be determined in accordance with GAAP, as consistently applied, to the extent described above except as otherwise provided in this Section 2.3(b). “Debt” means all funded indebtedness, determined without duplication, and includes notes; capitalized leases; bank term and revolving credit loans; obligations related to drawn letters of credit; bonds evidencing funded indebtedness; debentures; borrowings

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from lending institutions other than banks; subordinated loans and subordinated debt securities with or without stated maturity; bank bills; bank overdrafts; obligations with respect to the factoring or discounting of accounts receivable and other instruments; any dividends payable to the holders of Company Shares; and accrued interest and expense and penalties on any of the foregoing (including prepayment penalties). For the avoidance of doubt, a sample calculation of Net Working Capital is attached hereto as Schedule 2.3(c).

               (c) At least three (3) business days before the anticipated Closing Date, Company will prepare, subject to the reasonable approval of Parent, an unaudited estimated balance sheet of Company as of the anticipated Closing Date as mutually expected by the parties (the “Preliminary Closing Balance Sheet”) and a computation of the Net Working Capital as of the expected Closing Date based upon the financial information reflected in the Preliminary Closing Balance Sheet (the “Preliminary Closing Date NWC”). The Preliminary Closing Balance Sheet and the Preliminary Closing Date NWC calculation will be provided as Schedule 2.3(c) and become a part of this Agreement. The Preliminary Closing Balance Sheet will be prepared in accordance with GAAP, except as otherwise provided in Section 2.3(b) above, and will fairly and accurately present the financial position of Company as of the anticipated Closing Date. The parties will use the Preliminary Closing Balance Sheet and Preliminary Closing Date NWC to calculate the Per Share Amount for purposes of payment at the Closing in accordance with Section 2.1.3.

               (d) Within thirty (30) days after the Closing Date, Parent will prepare and deliver to the Shareholders’ Representative an unaudited balance sheet of Company as of the Closing Date, determined in accordance with GAAP, except as otherwise provided in Section 2.3(b) above, and which, to the knowledge of Parent, fairly and accurately presents the financial position of Company as of the date of such balance sheet (the “Proposed Closing Balance Sheet”), along with its calculation of Net Working Capital as of the Closing Date (“Closing Date NWC”). The Shareholders’ Representative will be provided access to the books and records of the Company as may be reasonably necessary for the execution of its duties hereunder.

               (e) Within ten (10) days after the delivery by Parent of the Proposed Closing Balance Sheet and calculation of its Proposed Closing Date NWC under Section 2.3(d), the Shareholders’ Representative will deliver to Parent a written notice either approving or objecting to the Proposed Closing Balance Sheet and the accompanying Closing Date NWC calculation (the “Review Notice”). The Review Notice will reasonably state a description of the Shareholders’ Representative’s differences, if any, with Parent’s determination of the Proposed Closing Balance Sheet and the Closing Date NWC calculations, together with proposed revisions (such revised Proposed Closing Balance Sheet being referred to as the “Counter Proposed Closing Balance Sheet”), along with revisions to the Closing Date NWC calculations. A failure by the Shareholders’ Representative to so deliver the Review Notice to Parent within such period will be deemed an approval of and agreement with the Proposed Closing Balance Sheet and the Closing Date NWC calculations of Parent, and such Proposed Closing Balance Sheet and the accompanying Closing Date NWC calculations of Parent will be deemed the Closing Balance Sheet and the final and conclusive calculation of the Closing Date NWC (the “Final Closing Date NWC”).

               (f) If the Proposed Closing Balance Sheet and the accompanying Closing Date NWC calculation of Parent are disputed by the Shareholders’ Representative in accordance with this Section 2.3, the Shareholders’ Representative and Parent will negotiate in good faith in an effort to resolve any differences regarding such determination. If Parent and the Shareholders’ Representative agree on the Proposed Closing Balance Sheet and Closing Date NWC, the amount they agree upon will be final, conclusive and binding as the Final Closing Date NWC, but if the objection cannot be resolved by such negotiation within thirty (30) days after Parent’s receipt of the Review Notice (the “Reconciliation Deadline”), the Proposed Closing Balance Sheet, the Counter Proposed Closing Balance Sheet, the Review Notice, and all work papers related thereto (collectively, the “Determination Materials”), will be submitted to the Seattle, Washington offices of KPMG LLP or of a nationally recognized accounting firm as Parent and the Shareholders’ Representative may mutually agree to (which agreement will not be unreasonably withheld or delayed) (the “Accounting Arbitrator”), which will review the Determination Materials and will determine the Final Closing Date NWC. The Accounting Arbitrator will not undertake any review of any matters not specifically identified by the Shareholders’ Representative as being in dispute in the Review Notice and may not assign a value to any item greater than the greatest value for such items claimed by either party or less than the smallest value for such items claimed by either party, and its determination may not be outside the range comprised of Parent’s calculation of Closing Date NWC and Shareholders’ Representative’s calculation of Closing Date NWC. The Accounting Arbitrator will make its determination in accordance with GAAP and in accordance

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with the provisions herein defining Net Working Capital to the extent they are inconsistent with GAAP. The Accounting Arbitrator’s decision as to Closing Date NWC as of the Closing Date will be final, conclusive, and binding as the Final Closing Date NWC. The parties will cause the Accounting Arbitrator to notify the parties in writing of its determination within thirty (30) days following the receipt of the Determination Materials. The fees and expenses of the Accounting Arbitrator will be borne equally by Parent and the Shareholders’ Representative (who shall in turn have recourse to the Escrow Amount for reimbursement of such expenses pursuant to Section 10.13(c) below). All determinations in accordance with this Section 2.3(f) will be in writing and will be delivered to the parties hereto.

               (g) If the Final Closing Date NWC (as determined in accordance with Sections 2.3(e) or 2.3(f) above) is less than the Preliminary Closing Date NWC, then an amount equal to the difference between (y) the Preliminary Closing Date NWC, and (z) the Final Closing Date NWC will be paid to Parent out of the Escrow Amount to the extent the Final Closing Date NWC is less than the Minimum Working Capital, in accordance with the terms of the Escrow Agreement. Such adjustment will not be subject to the Threshold Amount (as defined in Section 8.6). If the Final Closing Date NWC is greater than the Preliminary Closing Date NWC, then Parent will cause the amount equal to the difference between (y) the Final Closing Date NWC, and (z) the Preliminary Closing Date NWC, to be delivered, within ten (10) days after such final determination, to the Disbursement Agent for disbursement as provided in Section 2.4 below to the extent the Final Closing Date NWC is greater than the Maximum Working Capital. In addition, if the Preliminary Closing Date NWC is (i) more than the Maximum Working Capital and the Final Closing Date NWC is less than the Maximum Working Capital, the amount equal to the difference between the Preliminary Closing Date NWC and the Maximum Working Capital will be paid to Parent out of the Escrow Amount, or (ii) less than the Minimum Working Capital and the Final Closing Date NWC is more than the Minimum Working Capital then Parent will cause the amount equal to the difference between the Preliminary Closing Date NWC and the Minimum Working Capital to be delivered, within ten (10) days after such final determination, to the Disbursement Agent for disbursement as provided in Section 2.4 below.

               (h) Nothing in this Section 2.3 will be deemed to limit the indemnification rights of the Indemnified Parties in accordance with Article VIII hereof with respect to any breach of any representation and warranty of this Agreement, including without limitation, a breach of any of the representations contained in Section 3.1.5.

               (i) For purposes of this Agreement, “Closing Balance Sheet” means the balance sheet of Company as of the Closing Date determined in accordance with this Section 2.3.

     2.4 Delivery of Consideration.

          2.4.1 Disbursing Agent. Promptly after the Effective Time, Parent will (i) make available to BNY Mellon Shareowner Services or other bank or trust company as Parent may choose in its discretion (the “Disbursing Agent”), the shares of Parent Common Stock issuable pursuant to Section 2.1.4, in exchange for shares of Company Common Stock outstanding immediately prior to the Effective Time and (ii) deposit with the Disbursing Agent an amount of cash sufficient to pay the aggregate Gross Distributable Cash Amount and any cash amounts payable under Section 2.1.4, less the Escrow Amounts to be contributed therefrom pro rata.

          2.4.2 Exchange Procedures. Promptly after the Effective Time, Parent will instruct the Disbursing Agent to pay by check or wire transfer of same day funds the cash portion of any applicable Conversion Payments, under Section 2.1 and subject to Section 2.2 hereof, and to send a certificate or certificates (or book entry) representing the stock portion of any applicable Conversion Payments under Section 2.1.3 and subject to Section 2.2 hereof to each record holder of Company Shares as of the Effective Time, other than to those holders of Appraisal Shares not entitled to payment, as promptly as practicable following (i) the submission of a Certificate to the Disbursing Agent and a duly executed letter of transmittal (the “Letter of Transmittal”) by such holder of record, which will specify that risk of loss and title to the Certificates will pass, only upon proper delivery of such documents to the Disbursing Agent, and which will be in the form and have such provisions as Parent and Company may reasonably specify, and (ii) the surrender of the Certificates in exchange for the applicable Conversion Payment by such holder of record (which Certificates will then be canceled). If any Certificate has been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the Person claiming such document to be lost, stolen, or destroyed and, if required by the Surviving Corporation, the payment of any reasonable fees, and the posting by such

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Person of a bond, in such reasonable amount as Parent may direct as indemnity against any claim that may be made against it with respect to such document, the Disbursing Agent will issue in exchange for such lost, stolen, or destroyed document, the applicable Conversion Payments to which the holder is entitled under this Article II.

          2.4.3 No Further Ownership Rights in Company Shares. The applicable Conversion Payment delivered upon surrender in exchange for Company Shares in accordance with the terms hereof will be deemed to have been delivered in full satisfaction of all rights pertaining to such Company Shares. After the Effective Time, no further transfers will be made on the stock transfer books of Company of Company Shares issued before the Effective Time. When the Merger becomes effective, all Company Shares issued before then (other than Appraisal Shares) will cease to exist, and each Certificate previously representing any such shares will represent only the right to receive the applicable Conversion Payment as described in Section 2.1.3 subject to the terms of this Agreement. If, after the Effective Time, Certificates are presented to Surviving Corporation or the Disbursing Agent for transfer, they will be cancelled and exchanged as provided in this Article II, except as otherwise provided by law.

          2.4.4 Return to Parent. The Disbursing Agent will redeliver or repay to Parent any cash made available to the Disbursing Agent and not exchanged for Certificates within twelve (12) months after the Effective Time. After such time any holder of Certificates who has not yet delivered or surrendered such Certificates to the Disbursing Agent, subject to applicable law, will look as a general creditor only to Parent for payment of the applicable Conversion Payment. Despite any provision of this Agreement, to the fullest extent permitted by applicable law, neither Parent, the Disbursing Agent, Surviving Corporation, the Shareholders’ Representative, nor any other party will be liable to any holder of Company Shares for any cash delivered to a public official according to applicable abandoned property, escheat, or similar law.

          2.4.5 Withholding Rights. Parent or the Disbursing Agent will be entitled to deduct and withhold from the applicable Conversion Payment otherwise payable under this Agreement to any Person (as defined in Section 10.2) who was a holder of Company Shares immediately before the Effective Time, such amounts as Parent or the Disbursing Agent is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “Code”), or any provision of state, local, or foreign tax law. Any such withheld amounts will be timely paid over to the appropriate Governmental Entity (as defined in Section 3.1.4). To the extent that amounts are so withheld by Parent or the Disbursing Agent, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the holder of the Certificates in respect of which such deduction and withholding was made by Parent or the Disbursing Agent.

2. Section 9.1(c) of the Agreement is deleted in its entirety and replaced with the following:

          (c) by either Parent or Company if the Merger has not been consummated on or before March 31, 2009 (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 9.1 will not be available to any party whose action or failure to act has been the principal cause of or resulted in the failure of the Merger to have been consummated on or before such date and such action or failure to act constitutes a breach of this Agreement; or

[remainder of page intentionally blank]

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SIGNATURE PAGE—AMENDMENT TO AGREEMENT AND PLAN OF MERGER

     IN WITNESS WHEREOF, Parent, Sub, Company, the Major Shareholders, and the Shareholders’ Representative have signed or caused their respective duly authorized officers to sign this Amendment, all as of the date first written above.

FLOW INTERNATIONAL CORPORATION

By

Its

ORANGE ACQUISITION CORPORATION

By

Its

OMAX CORPORATION

By

Its

SHAREHOLDERS’ REPRESENTATIVE

(signature page continues)

SIGNATURE PAGE—AMENDMENT TO AGREEMENT AND PLAN OF MERGER

Major Shareholder

Dr. John B. Cheung

Major Shareholder

Dr. John H. Olsen

Major Shareholder

James M. O’Connor

EX-99.2

Exhibit 99.2

FOR IMMEDIATE RELEASE

Contact:
Flow Investor Relations	Flow Media Relations
Geoffrey Buscher	Lisa Brandli
253-813-3286	425-653-1237
investors@flowcorp.com	lbrandli@flowcorp.com

FLOW INTERNATIONAL CORPORATION ANNOUNCES REVISED OMAX MERGER TERMS

Will hold investor call on Tuesday, November 11 at 8 a.m. Pacific Time.

Kent, WA — November 10, 2008 — Flow International Corporation (NASDAQ: FLOW), the world’s leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications, announced today that Flow and OMAX Corporation have entered into an agreement amending the terms of their merger. The revised terms reduce the initial cash and stock payment, including option payments already made, from $105 million to $75 million. The previous terms included $71.5 million in cash and a $3.5 million note, with the remainder in stock trued up to $30 million based on a Flow stock price of not less than $8 per share. These amounts have now been reduced to $62.5 million in cash, an $8.5 million note and $4 million in stock with the number of shares determined based upon the stock price at closing. As in the prior transaction, OMAX debt of approximately $6 million will be assumed by Flow.

The revised terms increase the contingent payment opportunity for OMAX’s shareholders, based on Flow’s stock price, from $26 million to $52 million, and extend the measurement period from two years to three. The additional $26 million contingent payment opportunity does not begin until Flow’s stock price exceeds $10.00 per share and the maximum payout to $52 million occurs if Flow’s stock reaches $14.00 per share.

On a trailing twelve month basis, the initial cost of the transaction represents an estimated 6.5 multiple of EBITDA adjusted for unusual items, including 50% of expected cost savings, and allocating a portion of the consideration to settle outstanding litigation between the two companies. This initial cash and stock net consideration also represents less than one times trailing twelve months OMAX annual revenue levels.

Flow will be discussing these revised terms and the current market outlook during an investor conference call on Tuesday, November 11 at 8 a.m. Pacific Time.

“We are pleased to have revised our agreement in a way that acknowledges the current financial market situation, while providing continued opportunity for OMAX shareholders to participate in future share price appreciation of the combined companies” said Charley Brown, President and CEO of Flow. He continued “We look forward to capitalizing on each company’s strengths, including the two different channels of distribution we will tap into together.”

John Cheung, President and CEO of OMAX added, “As we have participated in a number of meetings with Flow personnel in preparation for merging the two companies, it has become even more apparent how well we will fit together and how exciting our combined

opportunities are. The revised terms preserve the financial opportunity for our OMAX shareholders while recognizing the impact of our current economic conditions. Moving payments to the earn-out shows how confident the OMAX team is in the future of our combined companies.”

Revised Transaction Details

The revised transaction includes the following:

• A total of $62.5 million to be paid at closing. This includes:

• $9 million already paid in connection with the option to purchase OMAX and the signing of the definitive agreement

• An additional $53.5 million due at closing

• A $8.45 million promissory note, to be held in escrow, to fund payments relating to claims for indemnification under the merger agreement. The escrow note is for a period of 18 months and will bear interest at a rate of 2% per annum.

• A number of Flow shares equal in value to $4 million to be delivered at closing, based upon the closing share price for Flow common stock for the ten trading days ending two business days before the closing.

• Assumption of approximately $6 million of OMAX debt

• Contingent consideration, consisting of the right to receive up to $52 million. Beginning the 6^th full month after closing individual OMAX shareholders may elect to receive 100% of their pro-rata portion of the consideration any month post-closing and before the thirty-six month anniversary of the closing of the merger. The consideration is contingent upon the average daily closing share price for Flow common stock during any six month period prior to thirty-six months after the closing of the merger. If the average share price is equal to $7.00, a total consideration of $5 million shall be paid. If the average share price is between $7.01 and $14.00, additional cash shall be paid on a straight line interpolation basis between $5 million and $52 million. Flow may at its option distribute Flow common stock in lieu of cash as contingent consideration.

Flow expects to close the transaction in early calendar 2009. Houlihan Lokey acted as Flow’s financial advisor in the transaction.

Conference Call

Flow plans to hold a conference call to discuss this announcement tomorrow morning: Tuesday, November 11 at 11 a.m. Eastern Time (8 a.m. Pacific Time). The conference call may be heard by dialing 1-303-262-2161. A 48-hour replay will be available following the call by dialing 1-303-590-3000; the replay passcode is 11122477. A live audio Webcast of the conference call may be found in the investor section at 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 technology for cutting and cleaning. Flow provides state-of-the-art ultrahigh-pressure (UHP) technology to numerous industries including automotive, aerospace, job shop, surface preparation, food and dozens more. For more information, visit 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,” “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 April 30, 2008 Flow International Corporation Form 10-K Report, filed with the Securities and Exchange Commission. Forward- looking statements in this press release include, without limitation, statements regarding future opportunities for Flow and OMAX, and the closing of the OMAX transaction. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.

EX-99.3

Exhibit 99.3

Flow International
OMAX Update Conference Call Transcript
November 11, 2008, 11:00 a.m., EST

The transcript of prepared remarks and question and answer session set forth below contain forward-looking statements relating to increasing aerospace orders. This statement is only a prediction and actual results could differ materially based on a number of risk factors, including those set forth in the July 14, 2008 Flow International Corporation Form 10-K Report filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this transcript. The Company is under no obligation, and does not intend, to update any of the forward looking statements in this transcript.

Operator:	Good morning ladies and gentlemen and thank you standing by. Welcome to the Flow International OMAX Update conference call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press the star followed by the 1 on your touchtone phone. If you’d like to withdraw your question, please press the star followed by the 2. If you are using speaker equipment, please lift the handset before making a selection. This conference is being recorded today, Tuesday, November 11, 2008.
	I would now like to turn the conference over to John Leness, please go ahead, sir.
John Leness:	Thank you, Joshua. I’m John Leness, Flow International’s Secretary and General Counsel. With me this morning are Charley Brown, Flow’s President and CEO, and Doug Fletcher, Chief Financial Officer.
	This call will include forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. During the call we will provide information regarding our merger with OMAX corporation. Any statements about future events, trends, risks and plans should be considered as forward-looking. These are based on current expectations only. Actual results may differ from these forward-looking statements and are subject to risks and uncertainties, as are detailed in our filings with the Securities and Exchange Commission. Flow takes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
	With that introduction, I’ll turn the call over to Charley Brown.
Charley Brown:	Thanks, John. Good morning everyone. And thanks to each of you for joining us today. As announced in our press release late yesterday, we are holding this conference call to discuss the amended terms to our merger agreement with OMAX Corporation and to comment on our view of the current market. I will first offer some comments on each topic then leave most of our time open for Doug Fletcher and me to address your questions.
	Last December we announced our intention to merge with OMAX Corporation to create a powerful combination in the worldwide waterjet marketplace. In July we cleared the FTC hurdle, and in September we signed the definitive merger agreement. As we have continued to prepare for closing, the global financial markets have been experiencing unprecedented declines. Valuations of companies have changed dramatically in short time frames. With this in mind, OMAX’s CEO, John Cheung, and I got back together in the spirit of partnership that we have

developed, to see if we could re-frame the terms of the deal in a way that would be good for shareholders of both companies. We are both pleased to have arrived at revised terms that represent a win-win situation in a challenging environment.

As detailed in our press release, the revised terms reduce the initial cash and stock payment, including option payments already made, from $105 million to $75 million. The previous terms included $71.5 million in cash and a $3.5 million note, with the remainder in stock trued up to $30 million based on a Flow stock price of not less than $8 per share. These amounts have now been reduced to $62.5 million in cash, an $8.5 million note, and $4 million in stock with the number of shares determined based upon the stock price at closing. As in the prior transaction, OMAX debt of approximately $6 million will be assumed by Flow.

The revised terms increase the contingent payment opportunity for OMAX’s shareholders, based on Flow’s stock price, from $26 million to $52 million, and extend the measurement period from two years to three. The additional $26 million contingent payment opportunity does not begin until Flow’s stock price exceeds $10.00 per share, more than triple yesterday’s closing price, and the maximum payout of $52 million occurs if Flow’s stock reaches $14.00 per share, a five-fold increase compared to yesterday’s closing price.

These changes clearly show the confidence the OMAX team has in what we can accomplish together, a confidence that has grown even stronger in recent weeks as we have been conducting a number of integration planning sessions. We are equally excited about our future together and look forward to completing the necessary SEC filings yet this month with closing likely early in the new calendar year.

Now I will provide a little more information on the OMAX numbers, and explain the math to help frame the cost of the transaction to Flow. OMAX annual revenues are in the $63 to $65 million range with recurring Operating Income in the 6% to 7% range. EBITDA adjusted for unusual items on a trailing twelve month basis is $4.2 million. We believe that by the second year post closing, approximately $7.5 million in run rate savings will be achieved by the combined companies. We attribute 50% of those savings, or $3.8 million, to the value of the deal because they would be unavailable to us without the combination. Examples of these savings come from supply chain initiatives and lower health care coverage costs for similar benefits just because we have a larger participant pool. Adding these savings to the EBITDA number yields about $8 million as the denominator when calculating an EBITDA multiple to price the transaction.

For the numerator in that calculation, we begin with the up-front consideration of $75 million plus assumption of $6 million of debt to total $81 million. Of that amount, approximately $29 million will be allocated to settlement of the patent litigation between OMAX and Flow. The primary motivation for this transaction is strategic, given the long term growth opportunities it uniquely creates. However, settling the lawsuit is an important benefit of the transaction, eliminating significant uncertainty for Flow and its shareholders, while also eliminating roughly $2.5 million in annual legal fees Flow alone was spending prior to announcing the deal. Both parties were firmly convinced they would win their respective law suits against the other, so the amount attributed to the litigation is based on estimating each party’s claims with a 50/50 likelihood that either would prevail. This analysis was conducted by an independent valuation firm.

	Subtracting this $29 million from the $81 million leaves $52 million attributable to the transaction.
	The EBITDA multiple “price of the deal” is calculated, therefore by taking this $52 million and dividing by the $8 million leaving a 6.5 multiple. As a multiple of revenue, the $52 million in consideration represents 0.8 times the $64 million revenue number.
	Now let’s turn for a moment to the current marketplace conditions. As you know, we have just completed the second quarter of our 2009 fiscal year, and we will be reporting those results in early December. Preliminarily, we see the revenue for that time period increasing at approximately a 4% rate versus prior year, consistent with our commentary at the last quarterly investor call, and excellent results in this challenging environment. We are not prepared to dive deeply into the numbers today, but felt it important to communicate this solid performance.
	Our current order patterns continue to make us bullish about our advanced systems business due to the strong aerospace backlog we are building. Additionally, our replacement parts business orders continue to show gains versus last year. Our standard systems business, however, remains the most volatile. In the second quarter, August through October, we saw good growth, but standard systems orders in recent weeks have slowed down. Our customers seem able to access credit; their hesitancy appears to be more associated with their own view of the world’s economic challenges. This makes forecasting this portion of our business extremely difficult. If global economic conditions continue on a downward path, and the purchasing psychology remains negative, the expected growth of our advanced systems and parts businesses matched up against our standard systems business could balance to create a reduction in revenue for the back half of our fiscal year compared to 2008.
	I will now open it up for your questions. Operator?
Operator:	Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you have a question, please press the star followed by the one on your touchtone phone. If you would like to withdraw your question, please press the star followed by the 2. If you are using speaker equipment, you will need to lift the handset before making your selection. Our first question comes from the line of Sid Parakh with McAdams Wright Ragen. Please go ahead.
Sid Parakh:	Hey, good morning, guys.
Management:	Good morning, Sid.
Sid Parakh:	Question on the deal accretion. You talked about a 10% EPS accretion in the past and I’m wondering if anything’s changed with respect to the revenue run rates that were assumed in the past and maybe even on the cost synergy side. Can you help us understand where accretion should be?
Doug Fletcher:	The accretion with the new deal will exceed 10%.
Sid Parakh:	So really from a revenue standpoint or from maybe an operating standpoint nothing seems to have changed dramatically from where you had initially announced the deal?

Doug Fletcher:	Let me make sure I understand what you’re saying, Sid. From a standpoint of long term or are you talking...
Sid Parakh:	Well, no. Initially I mean the deal was struck several months ago and I was assuming that there were several revenue assumptions being made for the year and whether those revenue assumptions haven’t changed dramatically. That’s kind of where I’m going.
Doug Fletcher:	As Charley mentioned, in terms of both ourselves and we can count on OMAX’s outlook, which I think would be similar, is that we’re looking at the back half of the year. It really depends upon how this market evolves in terms of growth. As we mentioned, 10% is a challenge given this marketplace. From a standpoint of long term projections on this transaction they haven’t changed. and our belief is that with the new deal structure it exceeds 10% accretion.
Sid Parakh:	Okay, fair. And you talked about OMAX’s operating margins being in the 6 to 7% range. That seems to be a little below where Flow has been as a stand alone company. Can you maybe help us understand what other cost synergies there might be in that structure.
Doug Fletcher:	As Charley mentioned in his remarks, we’re attributing about $3.8 million to the OMAX side and we said that’s about half the synergies so you can see about what we’re targeting to obtain in the transaction. Again, keep in mind that OMAX at its size has a certain amount of overhead as well and we believe combined obviously we’ll be much more efficient.
Charley Brown:	I think if you look at Flow’s history, there’s a lot of years when Flow was in the 6-7% operating profit margin range so it’s really not that different than sort of the average of a number of previous years for Flow.
Sid Parakh:	Okay, fair. And then can you give us a sense for the time line for this?
Doug Fletcher:	For the transaction?
Sid Parakh:	Yeah.
Doug Fletcher:	We would hope to now that we have completed these negotiations and signed the amendment, that within the next 2 weeks we will be filling the S-4. As you can see and one of the reasons holding up our ability to get this S-4 done was our negotiations on these revised terms. With that, the SEC has a 30 day comment period. Once that comes back and we clear comments which will take a few weeks, there’s about a 20 day notice provision for the OMAX shareholders so our estimate right now is that the transaction would close approximately February 1st, so the first day of our fourth quarter.
Sid Parakh:	Okay, and then just a last question here. Just going back to the last comment that Charlie made about a reduction in revenue for Flow in the back half of that year. Can you maybe elaborate on that comment. Was it a year-over-year decline in quarterly revenues or are you
Charley Brown:	Sid, I was referencing the Flow outlook, not the OMAX outlook if that wasn’t clear and my comment was for the back half of our fiscal year, which we just started the

	third quarter, the outlook is very difficult to predict because the standard system business, which is a good portion of our business, is being driven more by market psychology right now than anything else and your guess is as good as mine in terms of what any individual’s view of their future economic status will be. If that psychology remains negative and even gets more negative, then that will have an effect certainly on our business and could cause us to be down in the back half.
Sid Parakh:	Just on the standard system side or the overall revenue line because it seems like you’re going to have a significant chunk of revenues coming from the advance side.
Charley Brown:	It’s hard to say and certainly my comment is pinpointed to the standard systems business could be down, but as you know with that being a significant portion of our business and very difficult to predict, it means that if it’s down significantly then that could be not enough to overcome the increases in other portions of our business and the total revenue number could also be down.
Sid Parakh:	Okay, fair. Thank you.
Operator:	Our next question comes from the line of Chad Bennett of Northland Securities. Please go ahead.
Chad Bennett:	A couple of questions. Just trying to understand the valuation metrics that you gave. You’re essentially backing out $29 million after the initial purchase price related to patent settlements or potential ... I don’t know. I guess I’m trying to understand what shareholders are really paying for the patent piece that you’re breaking out and kind of what the logic was there.
Charley Brown:	Sure, Chad. Just a little clarification. It’s patents litigation. If we dial back over a year when we got seriously into negotiations and then announced our option agreement on December 4th, prior to that time both Flow and OMAX were actively pursuing lawsuits against each other over patent violations and as I mentioned in the year prior to that, Flow alone spent $2.5 million in legal fees in pursuit of defending ourselves and in pursuit of filing our countersuit against OMAX. And that was over perceived patent infringement, perceived by both sides against the other.
	Part of the transaction, the $29 million, is the valuation by an outside firm when we have to do the valuation of the consideration is to figure out how much of the $75 should be allocated to the settlement of those suits both ways.
Chad Bennett:	I thought part of the reason we were doing the transaction is to mitigate if not do away with any further patent settlements or payments. I thought that was some of the logic behind doing it.
Charley Brown:	You’re exactly correct and that’s why, because those lawsuits will be settled as a result of the transaction, then part of the consideration needs to be allocated to the settlement thereof.
Chad Bennett:	Alright. Then, Doug, can you give us a sense of with the revised terms of... I don’t know if you want to do this or not, of where you’re going to be if we can look out to close date, where you’re going to be into the credit facility and then kind of remind us again or give us an update with LIBOR and whatnot kind of what the cost will be.

Doug Fletcher:	Right, couple updates there. First, what we would be looking to draw under the revolver would be approximately... I’m sorry, the total facility. As you know there’s two components to the facility, a term loan and the revolver. The term loan’s $35 million and we have access to a $65 million revolving credit facility. With the revised terms we’d be looking to draw the $35 million term loan at closing and use approximately $15 million of the revolver. At the point of closing, using a pro forma trailing 12 months we would be approximately 2 times EBITDA, probably even a little bit less than 2 times EBITDA, so better coverage than we had before in the original deal.
	Just to put it into context, our covenants in that transaction, 3 times EBITDA for first 12 months after closing, so the company’s well within any covenants there.
	The other thing I would mention is that we’ve had discussion with the banks. As people may know, when we signed the credit facility in June we had 6 months to draw under the term loan. If you go back to June, I don’t think anybody envisioned what would happen with the capital markets, etc., whether this transaction would take more than 6 months to close, but on the current schedule as I mentioned it would be around February 1st so we’re in discussion with our banks to extend the commitment period to allow us to close February 1st.
	Given the current credit markets we had a very well priced deal at leverage north of 1.75 times trailing EBITDA. It was LIBOR plus 200. Our agent bank is very favorable to this transaction but my guess is that we will see some increase on the LIBOR spread in the transaction and currently we’re modeling the transaction at about 6-6.5% interest rate. LIBOR today has finally fallen back under 3, so that’s kind of what we’re looking at from an interest standpoint.
Chad Bennett:	Okay, 6-6.5 then. Okay. And then I know you talked and I don’t know how much you want to get into this. I know you talked about recent trends in your business on the systems side. You gave a look back into OMAX. Is there any way to characterize what they’ve seen in the market? Is it similar to what you’ve seen or if you don’t want to do a real near term related to OMAX, maybe what the last six months, how the results have done. Any more color there I guess.
Charley Brown:	Let me handle that one, Chad. I’ll go back even further. OMAX has been a strong growth story over the past few years with solid double-digit growth compounded annually for several years. In the current economic environment they’re seeing about what we are seeing with hesitation due to the market psychology in their systems business. It’s not too different than what we’re seeing. We’ve been a strong growth story. They’ve been a very strong growth story and right now in recent weeks and months we’re seeing about the same thing. But the long term opportunity and outlook is built on solid double-digit growth from each company.
Chad Bennett:	Okay and then maybe one last question. If you’re thinking about or seeing some weakness in the systems side, how should we think about ... maybe I’m getting too detailed, gross margins, you know considering you’re going to see better advanced system revenue in the second half, probably a higher mix of consumables and probably a little lower systems side, do we even want to approach that in this call or any color there?
Charley Brown:	You’re hitting on the variables and the underlying question is we have different

	margins on our different pieces of the mix, the three that you mentioned that I’ve been talking about. With the difficulty of projecting the standard systems business in the current uncertain environment, it’s really hard to peg that mix and so we can’t really comment even in terms of what we think that mix will do. You’re correct that the advanced systems margins are a little lower than standard systems and the parts margins are higher. Where it lands is going to be hard to predict on a mix basis.
Chad Bennett:	Okay thanks, guys.
Operator:	Our next question comes from the line of Chuck Murphy, Sidoti. Please go ahead.
Chuck Murphy:	Morning, guys.
Charley Brown:	Good morning, Chuck.
Chuck Murphy:	Most of my questions have been answered but if you could, could you just go back through what OMAX’s GAAP numbers — sales, operating profit and EBITDA has been for the trailing 12 months?
Doug Fletcher:	As Charley mentioned, Chuck, the OMAX sales numbers are in the range of $63 to $65 million. Their pro forma EBITDA about $4.2 million.
Chuck Murphy:	And what does that pro forma include or exclude?
Doug Fletcher:	It excludes their professional fees related to the deal. As you know, the target can’t capitalize, well at least under current GAAP, can’t capitalize transaction fees whereas the acquirer can. It changes next year for those who’re following GAAP. So that’s added back. That’s really the only pro forma.
Chuck Murphy:	I gotcha. And then you’d have the $7.5 million of cost savings?
Doug Fletcher:	Yeah, of which we’re attributing half to the OMAX side, about $3.8 million.
Chuck Murphy:	And you said that was supply chain and healthcare savings?
Doug Fletcher:	Those were examples. Obviously there are a number of things that we’re going to be able to do. This facility is two miles away from us so there are things we can work on together. And we believe those are very achievable.
Chuck Murphy:	Alright, that’s all I had. Thanks.
Operator:	Our next question comes from Alan Robinson, Royal Bank of Canada. Please go ahead.
Alan Robinson:	Good morning, gents. Just a slight detail question here. The trailing 12 month figure you gave us for OMAX, what is the 12 month period that that covers? Is it the period ending September or November or what is that?
Doug Fletcher:	They’re on a calendar year basis, Alan. That is the period ending September.
Alan Robinson:	September ’08. Okay, good.
Doug Fletcher:	And the reason why we give a range and let me be very direct with this. When we

	file the S-4 in the next week or two, it will have OMAX’s audited financial statements for three years plus their six months ended June 30th because that matches with what we have publicly put out, which would be our audited financial statements as of July 31st. Obviously when we finalize the S-4, OMAX’s September 30th numbers would be in there, so their trailing 12 month numbers as of September 30th are probably on the high end or slightly above that range and a little bit lower than that when you look at the June 30th trailing. They have been growing through this period.
Alan Robinson:	Alright, that’s very useful. Thanks for that. In terms of the OMAX structure, do they have a similar range or similar group of businesses as you in terms of consumables, advanced systems, standard systems?
Doug Fletcher:	OMAX is, as we’ve discussed I think before, strategically is in what we call the standard segment of the marketplace with a price point near between about $160,000 to $200,000 per system. We believe they’re the leader in that segment. We obviously are in that segment very strongly as well but they are slightly larger than us, for instance in North America.
	That is the only segment they really address. They’re not in the high end what we call production segment with systems from $200,000 to $400,000 or for instance in the advanced segment where our aerospace systems are. They also don’t operate in the economy segment which is below $100,000 where we have a small entree in that with the Waterjet Pro. So they’re principally in that range, and clearly we would view the best in that segment. Their make-up in that segment is similar to ours although their spares revenue is a little bit smaller percentage of revenue in that range than we would have. Does that address your question?
Alan Robinson:	That’s very useful, thanks. Then you’ve also mentioned in the past that domestic customers account for about 45% of your revenues. What’s the equivalent mix for OMAX?
Doug Fletcher:	Probably in the area of 65-70% is domestic, what I would say North America.
Alan Robinson:	North America. Okay, good. Then currencies. Can you give us an idea of the approximate currency component of the 4% growth number you mentioned for the second quarter?
Doug Fletcher:	We’re not prepared to talk about that right now, Alan. I would expect it would be less of an impact than we’ve seen in the past. In fact one of the things as Charley mentioned, the back half of the year obviously with the strong swing in currencies, the benefit that we have seen in the last two years from growth, for instance, in the European community under the Euro is actually going to be reversing in the back half of the year and we’ll see negative dollar growth in the Europe market versus local currency.
Alan Robinson:	Right, that makes sense. But then for the second quarter that you’ve just completed, there would still presumably be a slightly positive currency effect given the year ago numbers you had.
Doug Fletcher:	Again, Alan, I’m not prepared to comment on that right now.
Alan Robinson:	Alright, thank you. That’s all I’ve got.

Operator:	Our next question comes from Greg Eisen, ICM Asset Management. Please go ahead.
Greg Eisen:	Thanks. Good morning.
Charley Brown:	Good morning, Greg.
Greg Eisen:	Could you give some specificity to the other half of the $7.5 million cost saves, kind of where they’re coming from and how you see them coming in, the timing of them coming into the bottom line?
Charley Brown:	As we’ve said timing-wise, when you think about it as sort of a run rate number, and probably taking two years to get there on all items. We’re not going to give a lot of details around all of that but we’ve got similar production capabilities that we can rationalize and take advantage of each other’s capabilities. We’re adding a factory to the mix here and it’s a factory of the OMAX facility that is quite full and quite busy, and so the ability to take some of the things that they’re making there and rather than them having to add additional space, we can probably utilize existing overhead elsewhere in our system to manufacture some of their items and things like that.
	We see opportunity there. We also see opportunity, if you recall, one of great advantages of this transaction is bringing together two channels of distribution. OMAX had primarily built their business around distributors, and Flow, we’ve built our business around direct sales. With an under-penetrated technology that waterjets represent, more feet on the street is certainly better.
	We see great opportunity in bringing more distribution into the mix as we attack all of the segments of the market. Having said that, each segment has its own requirements so we believe that by having more alternatives, distributors and direct people, we will be more efficient in meeting the needs of each segment. An economy buyer or a standard buyer tends to be just right for a distributor whereas a production or more advanced system requires more direct sales knowledge.
	And so we feel we can more specifically pinpoint our sales resources against the needs of the customer and gain some good leverage in that way.
Greg Eisen:	Okay. My other question is going back to the earnings per share accretion, you said it will exceed 10%. Versus your prior expectations, is there anything that feeds into your accretion expectations other than I guess the change in share count and the change in the purchase price because you’re issuing less shares upfront.
Doug Fletcher:	Greg, that’s the main driver.
Greg Eisen:	Okay. So there is nothing else specific that you’d want to call out?
Doug Fletcher:	As I mentioned earlier in the call, our long term view and outlook for the combination remains the same. It really is changing the mix and the amount of the upfront purchase.
Greg Eisen:	Okay, that’s it for me. Thank you.

Operator:	Our next question comes from the line of JD Padgett, The Boston Company. Please go ahead.
JD Padgett	Yeah, I just had a quick one. You went into some of it talking about the different channels of distribution and so forth. Do you compete with them a lot now or against their resellers in the middle market?
Charley Brown:	Yes. We see each other all the time and we have different product offerings, trying to go after the same customers and as competitors we certainly sell the advantages of each of our product lines. For example, the preponderance of what Flow sells is one type of pump, an intensifier and the preponderance of what OMAX sells, all of what they sell is direct drive pump. There are advantages and disadvantages of each and we both have sales forces highly trained at pointing out the advantages of our own. Now we’ll be able to dial into what the customer’s real needs are and over time with good product management we’ll be able to rationalize the product lines more tightly against the market segmentation needs.
JD Padgett	So when you encounter them in the market is it mostly through their distributor partners that you’re competing against or do they sell direct also?
Charley Brown:	It is primarily through their distributors but they do have direct salespeople. Their go-to-market model prefers distributors, but if there’s not a distributor that they can join up with that’s satisfactory, then they will not be hesitant to put in direct salespeople as well.
JD Padgett	Okay. So now it’ll just be a matter for you of deciding the best way to get to the customer with each different product, using a little direct and a little distribution?
Charley Brown:	Yeah, and we’ve actually coined a manta internally for that which we kinda like. It’s called “Growth for Both,” and that’s really what drives. To us, those three words summarize this entire transaction and that’s what we’re really making sure that all of our distributor partners, all of our salespeople, all of our internal people have to really understand that Growth for Both is what has to be right in our bullseye.
JD Padgett	Okay, thank you.
Operator:	Our next question comes from Scott Mackey, aAd Capital. Please go ahead.
Scott Mackey:	Good morning, gentlemen. Thanks for taking my call.
Management	Good morning, Scott.
Scott Mackey:	Just a couple items of clarification. I want to make sure I understand what you’re saying just in terms of the cost savings from the merger. It sounds like there’s a $7.5 million in anticipated cost savings and that’s on top of OMAX’s $4.2 million of trailing 12 month EBITDA.
Doug Fletcher:	That’s correct. And the timing of the $7.5 is sort of by the end of the second year. It’ll take a while to rationalize a lot of the things like the product lines that I’m talking about in getting our manufacturing costs based on a shorter number of SKUs. Two strong brands but a more rationalized product line and things like that.

Scott Mackey:	Okay. And of that $7.5 million then I think you gave us a number, about $2.5 million of that is attributable to Flow’s savings from legal expenses or...
Doug Fletcher:	No, that’s actually — the $2.5 is not included in that and that’s above and beyond that.
Scott Mackey:	Okay, so I would add another $2.5 million to the go forward rate once I throw out those legal expenses?
Doug Fletcher:	Let’s go back to what Charley mentioned. As we evaluated the settlement piece, it was getting rid of the uncertainty, the overhang on the stock and our access to the capital markets, as well as our spend which was at least $2.5 a year for the last few years. That spend got stopped when we signed the option agreement with OMAX last December. In our last three reported quarters we have not had patent litigation legal fess in there.
Scott Mackey:	I see. Thanks for the clarification. On the integration, are there any significant capital costs or any capital costs associated with this integration going forward?
Doug Fletcher:	When you say capital costs, you mean ...?
Scott Mackey:	Or significant expenditures in order to realize that $7.5 million of savings?
Doug Fletcher:	No. I think the biggest spend that we have going on in the company and we’ve reported an estimate of about $8 million in CapEx for ourselves this year, the biggest spend against that $8 is our previously reported investment in our IT systems and implementation onto the new ERP platform. As part of the integration we will bring up OMAX onto that platform, probably toward the end of our fiscal year next year which is fiscal ’10. But other than that which I don’t consider to be a significant capital cost, we’re not attributing any major capital costs to obtaining the synergies we’ve mentioned.
Scott Mackey:	Thanks. Along with your comments on the revenue outlook maybe if we broke it down just by end markets. Are you able to distinguish by end market or vertical where demand perhaps is holding up a little better than others?
Charley Brown:	We do see some areas that are holding up better than others. An example would be aerospace and certainly we have the high end equipment portion of that in the waterjet world very strongly in our camp. But remember there are also a lot of other job shops that feed the aerospace industry and we see those job shops that we service and that we sell to still having a good order flow there.
	That’s an example. What we try to refer to though is coming back to looking at the market holistically in terms of the four segments: the economy; the standard production; and advanced. As I said, our advanced business outlook remains very strong; and our parts business across the standard and production segments, where the preponderance of our machines in the field exist, it does also remain strong around the world. Right now that gives us good hope because it says that our customers are pretty broad based geographically and vertical market-wise are still using our equipment because they have to buy spares to continue to use the equipment, the consumable pieces.
	That’s why we believe the softness that we’re seeing in the systems orders is really

	more psychology driven. We don’t feel that it’s driven by lack of access to credit that you might think about, because we’re seeing our customers who have good business models able to get the credit to finance their machines and a lot of them do finance their purchases of these pieces of capital equipment.
	We’re not really seeing that there’s one vertical market on fire because we view the market across the other dimension on the segments we’re talking about and feel that it’s really a market psychology question now in terms of putting a big ticket item onto the asset base for some of these companies.
Scott Mackey:	Thanks, that’s helpful. One more if I may. I believe that you mentioned in the comments that you anticipate a trailing 12 months, that’s EBITDA of 2 times upon closing. Is that correct?
Doug Fletcher:	Yes, around 2 times.
Scott Mackey:	So that trailing 12 month number would be as of the closing which you’re now anticipating I believe February 1st?
Doug Fletcher:	Right. We’re anticipating a number below that but that’s an approximate range.
Scott Mackey:	Great. Thanks for your time this morning. I appreciate it.
Management	Thanks, Scott.
Operator:	Our next question comes from Josh Rosen, RLR Capital. Please go ahead.
Josh Rosen:	Hey, guys, how are you?
Charley Brown:	Good, Josh.
Josh Rosen:	A quick clarification. I think some other people were trying to understand it. Granted, we’re looking at things on a trailing 12 month basis and the litigation expense ended for nine of those months. But can you quantify how much combined patent litigation expense there is in the trailing 12 month EBITDA numbers?
Doug Fletcher:	Again, there’s not a lot in there, Josh, because as we’ve said, we signed the adoption agreement last December. We were in discussions with them and neither party was spending a lot even in that quarter. OMAX in their fourth calendar quarter probably had some. I don’t have the number right before me. If you go back to trailing 12 at the time the deal was signed, as I said, our number was around $2.5, maybe slightly higher than that, and OMAX’s number is about $1.6 million. So there was not a lot in what we — I mentioned the $4.2 million number. Most of the add-back on a pro forma basis was really deal costs that they’ve been incurring to close the transaction.
Josh Rosen:	But you did add back some level of patent litigation to that $4.2?
Doug Fletcher:	Very little. As I said, their spend had slowed because we had been in negotiations really since late September, early October.
Josh Rosen:	The 2 times, I assume gross debt to EBITDA on closing, is that pro forma OMAX plus pro forma Flow number or is it the GAAP Flow EBITDA number?

Doug Fletcher:	That’s pro forma Flow and pro forma OMAX.
Josh Rosen:	Alright. Thanks, guys.
Operator:	Our last question is a follow-up question from the line of Sid Parakh, McAdams Wright Ragen. Please go ahead.
Sid Parakh:	Can you help maybe define a basis for the accretion? Is it the GAAP EPS number from fiscal ’08 or is it in addition to the expectation for fiscal ’09? How should we think about that accretion level?
Doug Fletcher:	It’s our expectation for Flow stand alone for fiscal ’09.
Sid Parakh:	For fiscal ’09.
Doug Fletcher:	And then the combination of OMAX on top of that. I just want to be careful to make sure. Sid, you and I’ve talked about pro forma before. That is on a pro forma basis because as I think people are aware, when you put two companies together there is a write-up of expenses in terms of intangibles and there’s amortization of those intangibles and there is a write-up of inventory, and obviously the dollar amount that Charley mentioned on the settlement is an expense item at closing. So when we talk about accretion, we’re talking about accretion exceeds 10% on a pro forma basis.
Sid Parakh:	Okay. Fair. Then you mentioned that the replacement parts business was holding up well. Now you’ve been growing like strong double-digits there. Is that still the kind of growth we should expect there or is that also kind of slowing off?
Charley Brown:	I believe at our last quarterly call it was about a 10% double-digit number. I would say there’s some currency effect in there that’s going to not be coming our way going forward. So I would say we’re probably in the mid to high single-digits, somewhere in that range.
Sid Parakh:	And that’s kind of what you see even in the current uncertain environment?
Doug Fletcher:	That’s what we’re seeing right now.
Sid Parakh:	Then finally from an international business standpoint just going back a few months, Europe was pretty strong. Have you seen similar trends that you’re seeing say here in the United States kind of reflect also in your European business?
Charley Brown:	We can’t answer that question as one answer for all of Europe. We have seen it in some parts of Europe but not in other parts of Europe. We just had a trade show in Germany that was quite robust. There are other parts of Europe that are not. So, it’s really a mixed bag.
Sid Parakh:	Maybe when you look at the consolidated international or other international revenue line, maybe if you could speak from that perspective.
Charley Brown:	I’m not sure I understand your question.
Sid Parakh:	Well I’m saying ... I mean you report other international revenues which are usually Europe and South America.

Charley Brown:	Latin America.
Sid Parakh:	Yeah, Latin America. Maybe from that standpoint because we don’t know what the segmentation is down to the country level. So is it fair to say that in the geographies in which you are strong, that those geographies are weakening off just as much as the U.S. or not? That’s what I’m trying to get to.
Charley Brown:	I understand the question now. I think the way to think about it is that we are seeing the similar trends around the world in terms of systems and some hesitancy globally in terms of system purchases. There are pockets that are better and pockets that are worse but I would take my comments and really apply them globally.
Sid Parakh:	Okay, that’s all I had. Thanks.
Operator:	Ladies and gentlemen, that does conclude our question and answer session for today. I will turn the conference back to management for closing remarks. Please go ahead.
Charley Brown:	Thank you. We appreciate everybody participating and we’re signing off. Thank you.
Operator:	Ladies and gentlemen, this concludes the Flow International OMAX Update conference call. If you’d like to listen to a replay of today’s call, please dial 303-590-3000. The passcode for the replay is 11122477. ACT would like to thank you for your participation. Have a pleasant day. You may now disconnect.