Flow International Corporation (NASDAQ:FLOW) , the world's leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications, today announced that it has received a contract worth in excess of $5 million to manufacture and install a Composite Machining Center abrasive waterjet and routing machine tool system. This machine will be used for a major single aisle airframe program.

This contract continues to demonstrate Flow's long history and clear leadership position developing and supporting abrasive waterjet cutting systems for major composites programs. Flow's waterjets lead the industry in cutting state-of-the-art carbon-fiber materials

"Over the past decade, waterjets have become the standard for meeting the aerospace industry's production requirements as lighter weight composites have become the preferred material. Flow is uniquely positioned to serve this segment through our deep experience and innovative technology as evidenced by the equipment we have been and are supplying to major wide body airframe programs," said Charley Brown, President and CEO, Flow International. "This order represents a significant step into the future as the industry begins moving to composites for single aisle and regional aircraft."

Regarding Flow's first fiscal quarter which ended July 31, Mr. Brown commented, "While we have not finished closing the books on our first quarter, we do see business trends continuing as anticipated. We previously stated that our first quarter revenue would be down sequentially versus the fourth quarter in the 10% range. First quarter revenue is expected to be just under $38 million as compared to the fourth quarter level of $43.7 million. However, we are encouraged by our standard systems order book, which is beginning to build in several key markets. We anticipate our first quarter gross margins will be approximately 38%, which is in line with the low end of our previous projections. In June, we also discussed cost reduction efforts totaling $4 million on an annualized basis. We have significantly exceeded this with more than $2 million in additional annualized reductions that are now in place and will begin to be realized in our second quarter. In the first quarter we expect to book charges for these cost reductions, for a reserve related to a business disposed of several years ago, and for previously discussed charges related to terminating the OMAX transaction. Combined, these charges will likely total just over $6 million. We are pleased to see positive trends in both the advanced and standard segments of our business as we continue to drive down costs."