8-K

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

March 15, 2006

(Date of earliest event reported)

FLOW INTERNATIONAL CORPORATION

(Exact name of Registrant as specified in its charter)

Washington	0-12448	91-1104842
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

23500 - 64th Avenue South, Kent, Washington 98032

(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code:

(253) 850-3500

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

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

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

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

ITEM 2.02. Results of Operations and Financial Condition

Flow International Corporation issued a press release announcing earnings for the quarter ended January 31, 2006.

ITEM 9.01. Exhibits

(c) Exhibits

99.1 Press release dated March 15, 2006.

SIGNATURES

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

Date: March 17, 2006	FLOW INTERNATIONAL CORPORATION
	By:	/s/ John S. Leness
		John S. Leness
		General Counsel and Secretary

EX-99.1

Exhibit 99.1

Contact:	John Leness
	General Counsel
	253-850-3500

FLOW INTERNATIONAL ANNOUNCES PRELIMINARY FISCAL 2006 THIRD QUARTER RESULTS

Gross Profit improves 27% on 14% Revenue Growth versus Prior Year

KENT, Wash., March 15, 2006 – Flow International Corporation (Nasdaq: FLOW), the world’s leading supplier of ultrahigh-pressure waterjet products, today reported preliminary results for its fiscal 2006 third quarter ended January 31, 2006. Flow reported on a GAAP basis consolidated quarterly sales of $47.5 million and operating income of $1.4 million, or 3% of sales. Net loss for the quarter on a GAAP basis was $2.3 million or ($0.07) basic and diluted loss per share. The increase in Flow’s stock price had a significant impact on the Company’s reported results for the three and nine months ended January 31, 2006. Excluding the effect of the stock price appreciation during the quarter on the Key Executive Retention Program (KERP) of $427,000 and the fair value adjustment of the warrants issued in the Private Investment in Public Equity transaction completed on March 21, 2005 (“PIPE Transaction”) of $2.1 million, pro forma net income would have been $230,000 or $ 0.01 per diluted share.

For the nine months ended January 31, 2006, Flow reported on a GAAP basis consolidated sales of $140.2 million, compared to $124.1 million during the prior nine-month period in fiscal 2005. Including the impact of the discontinued Avure business, GAAP net loss for the nine months ended January 31, 2006 was $1.3 million, or ($0.04) basic and diluted loss per share. Excluding the effect of the stock price appreciation during the nine months ended January 31, 2006 on the KERP of $1.4 million and the fair value adjustment of the PIPE warrants of $7 million, pro forma net income would have been $7.1 million or $ 0.20 per diluted share.

“The basic business is doing well, however, we continued to incur significant professional fees to support public filings, Sarbanes-Oxley compliance, and ongoing litigation,” said Stephen R. Light, Flow’s President and Chief Executive Officer. “We had a strong revenue and gross profit margin quarter, with growth in many areas of our waterjet business. With the exception of a few isolated industries such as automotive, our markets are continuing to show strength. We are working hard to continue increasing our penetration in each of those areas. The marketplace is recognizing that waterjets represent a superior cutting technology for everything from a composite jumbo jet wing to kitchen counter tops.”

As previously reported, given the expense impact of recent increases in the stock price and possible further expenses if such increases in the stock price were to continue, Flow terminated its KERP in February 2006 by accelerating the payout of the retention awards.

This program had been established in July 2003, at the beginning of Flow’s turnaround in order to retain key executives. Total cost of this program during the quarter which included the impact of the stock price appreciation was $1.5 million. Remaining costs associated with the KERP of $284,000 will be expensed during the fourth quarter of fiscal 2006, after which there will be no further costs associated with the program.

By comparison, in the fiscal 2005 third quarter, Flow reported on a GAAP basis consolidated quarterly sales from continuing operations of $41.8 million and operating income of $1.7 million or 4% of sales. The Company reported a GAAP loss from continuing operations of $2.2 million or ($0.14) per basic and diluted share in the year-ago period. The Company reported a GAAP net loss of $3.5 million or ($0.14) basic and ($0.22) diluted loss per share, including a $1.3 million net loss from discontinued operations related to the Company’s Avure business, which was divested during the fiscal 2006 second quarter and was classified as a discontinued operation.

For the nine months ended January 31, 2005, Flow reported a GAAP net loss of $6.2 million, or ($0.39) basic and diluted loss per share, including a $2 million net loss from discontinued operations related to the Company’s Avure business.

Operations Review

For the fiscal 2006 third quarter, compared to the prior-year quarter:

• Waterjet system sales accounted for 73% of revenues in the quarter and increased 19% or $5.5 million from the prior-year quarter, primarily from strong domestic shapecutting sales, as well as from increased aerospace revenue. Revenues from aftermarket sales, increased $300,000 or 2% to $12.7 million, accounting for 27% of total revenues. The Company believes that its spare parts sales will increase as more systems are put into service.

• North America Waterjet sales increased 17% to $25.3 million during the quarter, on the strength of aerospace system deliveries. The aerospace industry increasingly recognizes the accuracy, speed, and versatility advantages of the waterjet over conventional cutting technologies.

• Sales in Asia Waterjet increased 22% to $7.2 million on continued growth in demand from the electronics industry in Taiwan.

• Other International Waterjet sales, which consist primarily of sales to Europe and South America, increased 20% to $9.8 million, on improved system deliveries. In addition, sales to South America increased 29% or $249,000 during the quarter as the Company increased its efforts to boost shapecutting system sales to that region.

• The “Other” segment revenues declined 17% to $5.3 million from continued softness in the domestic automotive industry, as well as from the closing and relocation of the Company’s Wixom, Michigan facility to its Burlington, Ontario facility.

Conference Call

Flow International will host a conference call today: Wednesday, March 15 at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) to discuss these results. The conference call may be heard by dialing 1-303-262-2137. A 48-hour replay will be available following the call by dialing 1-303-590-3000; the replay passcode is 11056150. In addition, 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 cutting technology to industries including automotive, aerospace, job shop, surface preparation, and more. For more information, visit www.flowcorp.com.

This press release contains forward-looking statements relating to increasing spare parts sales, and increasing recognition of waterjet’s advantages for the aerospace and other industries. 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 April 30, 2005 Flow International Corporation Form 10-K/A 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 announcement.

The Company is under no obligation, and does not intend, to update any of the forward looking statements in this press release.

Flow International Corporation

Consolidated Statement of Operations

(Unaudited)

Dollars in thousands, except

per share data

	Three months ended January 31,								Nine months ended January 31,
	2006			2005			% Change		2006			2005			% Change
				(restated)
Sales	$	47,530		$	41,750		14	%	$	140,201		$	124,136		13	%
Cost of sales		27,344			25,874		6	%		79,748			78,697		1	%
Gross margin		20,186			15,876		27	%		60,453			45,439		33	%
Operating expenses:
Sales and marketing		8,359			7,372		13	%		23,808			20,664		15	%
Research and engineering		2,070			1,396		48	%		5,640			4,273		32	%
General and administrative		8,306			5,377		54	%		21,656			14,873		46	%
Financial consulting		—			—		NM			—			623		-100	%
Restructuring		76			—		NM			661			—		NM
Operating expenses		18,811			14,145		33	%		51,765			40,433		28	%
Operating income		1,375			1,731		-21	%		8,688			5,006		74	%
Interest income (expense), net		22			(3,664	)	-101	%		(1,341	)		(10,376	)	-87	%
Other (expense) income, net		(2,906	)		129		NM			(5,820	)		2,690		NM
(Loss) income before provision for income taxes		(1,509	)		(1,804	)	-16	%		1,527			(2,680	)	NM
Provision for income taxes		(398	)		(404	)	-1	%		(2,213	)		(1,533	)	44	%
Loss from continuing operations		(1,907	)		(2,208	)	-14	%		(686	)		(4,213	)	-84	%
(Loss) income from discontinued operations, net of tax		—			(1,293	)	-100	%		966			(1,966	)	NM
Loss on sale of discontinued operations, net of tax		(407	)		—		NM			(1,554	)		—		NM
Net loss	$	(2,314	)	$	(3,501	)	-34	%	$	(1,274	)	$	(6,179	)	-79	%
Loss per share:
Basic and diluted loss from continuing operations	$	(0.06	)	$	(0.14	)	-60	%	$	(0.02	)	$	(0.27	)	-93	%
Basic and diluted net loss	$	(0.07	)	$	(0.22	)	-70	%	$	(0.04	)	$	(0.39	)	-91	%
Weighted average shares outstanding (000):
Basic and diluted		34,653			15,950					34,516			15,847
Diluted		34,653			15,950					35,972			15,847

NM = not meaningful

Flow International Corporation

Supplemental Data

(Unaudited)

Dollars in thousands

	Three months ended January 31,						Nine months ended January 31,
	2006		2005		% Change		2006		2005		% Change
Divisional revenue breakdown:
Flow Waterjet Systems:
Systems	$	34,847	$	29,367	19	%	$	100,518	$	86,541	16	%
Consumable parts and services		12,683		12,383	2	%		39,683		37,595	6	%
Total	$	47,530	$	41,750	14	%	$	140,201	$	124,136	13	%
Segment revenue breakdown:
North America Waterjet	$	25,330	$	21,404	18	%	$	76,901	$	57,967	33	%
Asia Waterjet		7,168		5,877	22	%		20,404		18,681	9	%
Other International Waterjet		9,771		8,154	20	%		27,013		23,686	14	%
Other		5,261		6,315	-17	%		15,883		23,802	-33	%
	$	47,530	$	41,750	14	%	$	140,201	$	124,136	13	%
Depreciation and amortization expense	$	645	$	1,408	-54	%	$	2,982	$	3,954	-25	%
Capital spending	$	487	$	315	55	%	$	1,367	$	761	80	%

Flow International Corporation

Condensed Balance Sheet Data

Dollars in thousands

	January 31, 2006		April 30, 2005		% Change
			(restated)
Cash, including short-term restricted cash	$	27,261	$	13,445	103	%
Receivables, net		25,343		38,325	-34	%
Inventories		20,173		24,218	-17	%
Total current assets		85,789		84,666	1	%
Total assets		104,110		118,467	-12	%
Total debt	$	16,315	$	19,147	-15	%
Total liabilities		75,297		87,435	-14	%
Total shareholders’ equity		28,813		29,464	-2	%

Flow International Corporation

Reconciliation of GAAP to Proforma

(Unaudited)

Dollars in thousands

	Three months ended January 31, 2006		Nine months ended January 31, 2006
GAAP Operating Income	1,375		8,688
Impact of stock price appreciation on Key Executive Retention Program Costs	427		1,436
Proforma Operating Income	1,802		10,124
GAAP Loss from continuing operations	(1,907	)	(686	)
Impact of stock price appreciation on Key Executive Retention Program Costs	427		1,436
Impact of stock price appreciation on fair value adjustment recorded in other income and expense	2,117		6,952
Proforma income from continuing operations	637		7,702
GAAP net loss	(2,314	)	(1,274	)
Impact of stock price appreciation on Key Executive Retention Program Costs	427		1,436
Impact of stock price appreciation on fair value adjustment recorded in other income and expense	2,117		6,952
Proforma net income	230		7,114
GAAP loss per share:
Basic and diluted loss from continuing operations	(0.06	)	(0.02	)
Impact of stock price appreciation on Key Executive Retention Program Costs	0.01		0.04
Impact of stock price appreciation on fair value adjustment recorded in other income and expense	0.07		0.20
Proforma income per share:
Basic income from continuing operations	0.02		0.22
Diluted income from continuing operations	0.02		0.21
GAAP net loss per share:
Basic and diluted	(0.07	)	(0.04	)
Impact of stock price appreciation on Key Executive Retention Program Costs	0.01		0.04
Impact of stock price appreciation on fair value adjustment recorded in other income and expense	0.07		0.21
Proforma net income per share:
Basic	0.01		0.21
Diluted	0.01		0.20
Weighted average shares outstanding (000):
Basic	34,653		34,516
Diluted	36,029		35,972