0000713002 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2009-04-30 0000713002 us-gaap:RetainedEarningsMember 2010-05-01 2010-10-31 0000713002 us-gaap:CommonStockMember 2010-05-01 2010-10-31 0000713002 us-gaap:AdditionalPaidInCapitalMember 2010-05-01 2010-10-31 0000713002 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-05-01 2010-10-31 0000713002 us-gaap:RetainedEarningsMember 2009-05-01 2009-10-31 0000713002 us-gaap:CommonStockMember 2009-05-01 2009-10-31 0000713002 us-gaap:AdditionalPaidInCapitalMember 2009-05-01 2009-10-31 0000713002 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2009-05-01 2009-10-31 0000713002 us-gaap:RetainedEarningsMember 2010-10-31 0000713002 us-gaap:CommonStockMember 2010-10-31 0000713002 us-gaap:AdditionalPaidInCapitalMember 2010-10-31 0000713002 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-10-31 0000713002 us-gaap:RetainedEarningsMember 2010-04-30 0000713002 us-gaap:CommonStockMember 2010-04-30 0000713002 us-gaap:AdditionalPaidInCapitalMember 2010-04-30 0000713002 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-04-30 0000713002 us-gaap:RetainedEarningsMember 2009-10-31 0000713002 us-gaap:CommonStockMember 2009-10-31 0000713002 us-gaap:AdditionalPaidInCapitalMember 2009-10-31 0000713002 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2009-10-31 0000713002 us-gaap:RetainedEarningsMember 2009-04-30 0000713002 us-gaap:CommonStockMember 2009-04-30 0000713002 us-gaap:AdditionalPaidInCapitalMember 2009-04-30 0000713002 2009-10-31 0000713002 2009-04-30 0000713002 2009-05-01 2010-04-30 0000713002 2010-08-01 2010-10-31 0000713002 2009-08-01 2009-10-31 0000713002 2010-10-31 0000713002 2010-04-30 0000713002 2009-05-01 2009-10-31 0000713002 2010-11-24 0000713002 2010-05-01 2010-10-31 xbrli:pure iso4217:USD xbrli:shares iso4217:USD xbrli:shares false --04-30 Q2 2011 2010-10-31 10-Q 0000713002 47169032 Accelerated Filer FLOW INTERNATIONAL CORP 3219000 10146000 12120000 -0.02 0 0 0 773000 1718000 -0.17 0.02 -0.02 -0.01 -0.19 0.02 -0.02 -0.01 <div> <div> Note 10: Other Income (Expense), Net      The Company's subsidiaries have adopted the local currency of the country in which they operate as the functional currency. All assets and liabilities of these foreign subsidiaries are translated at period-end rates. Income and expense accounts of the foreign subsidiaries are translated at the average rates in effect during the period. Assets and liabilities (including inter-company accounts that are transactional in nature) of the Company which are denominated in currencies other than the functional currency of the entity are translated based on current exchange rates and gains or losses are included in the Condensed Consolidated Statements of Operations.      The following table shows the detail of Other Income (Expense), net, in the accompanying Condensed Consolidated Statements of Operations: <div align="left"> <table border="0" cellspacing="0"> <tr><td width="47%"> </td> <td width="3%"> </td> <td width="8%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="8%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="8%"> </td> <td width="5%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="4" align="center">Three Months</td> <td align="left"> </td> <td align="left"> </td> <td style="text-indent: 3px;" colspan="2" align="center">Six Months</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" colspan="4" align="center">Ended October 31,</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" colspan="2" align="center">Ended October 31,</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2010</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2009</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2010</td> <td style="border-bottom: #000000 1px solid;" colspan="2" align="right">2009</td></tr> <tr valign="bottom"><td align="left">Realized Foreign Exchange Gains, net</td> <td align="left">$</td> <td align="right">186</td> <td align="left"> </td> <td align="right">$</td> <td align="right">227</td> <td align="left"> </td> <td align="center">$</td> <td align="right">89</td> <td align="center">$</td> <td align="right">172</td></tr> <tr valign="bottom"><td align="left">Unrealized Foreign Exchange Gains (Losses), net</td> <td align="left"> </td> <td align="right">(76</td> <td align="left">)</td> <td align="right"> </td> <td align="right">(404</td> <td align="left">)</td> <td align="center"> </td> <td align="right">292</td> <td align="center"> </td> <td align="right">53</td></tr> <tr valign="bottom"><td align="left">Other</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right">(6</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">27</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="center"> </td> <td style="border-bottom: #000000 1px solid;" align="right">15</td> <td style="border-bottom: #000000 1px solid;" align="center"> </td> <td style="border-bottom: #000000 1px solid;" align="right">127</td></tr> <tr valign="bottom"><td style="text-indent: 2px;" align="left">Other Income (Expense), net</td> <td style="border-bottom: #000000 3px double;" align="left">$</td> <td style="border-bottom: #000000 3px double;" align="right">104</td> <td style="border-bottom: #000000 3px double;" align="left"> </td> <td style="border-bottom: #000000 3px double;" align="right">$</td> <td style="border-bottom: #000000 3px double;" align="right">(150</td> <td style="border-bottom: #000000 3px double;" align="left">)</td> <td style="border-bottom: #000000 3px double;" align="center">$</td> <td style="border-bottom: #000000 3px double;" align="right">396</td> <td style="border-bottom: #000000 3px double;" align="center">$</td> <td style="border-bottom: #000000 3px double;" align="right">352</td></tr></table></div></div> </div> -2000000 -15000000 0.08 0.08 -17000000

15306000

15354000

383000

372000

-9000

-4568000

-3913000

159605000

160466000

-455000

12000

131209000

138264000

74095000

83678000

274000

794000

10117000

5040000

6367000

6892000

-5077000

525000

<div> Note 6:  Commitments and Contingencies   Warranty Obligations   The Company's estimated obligations for warranty, which are included as part of Costs of Sales in the Condensed Consolidated Statements of Operations, are accrued concurrently with the revenue recognized. The Company makes provisions for its warranty obligations based upon historical costs incurred for such obligations adjusted, as necessary, for current conditions and factors. Due to the significant uncertainties and judgments involved in estimating the Company's warranty obligations, including changing product designs and specifications, the ultimate amount incurred for warranty costs could change in the near term from the current estimate. The Company believes that its warranty accrual as of October 31, 2010, which is included in the Other Accrued Liabilities line item in the Condensed Consolidated Balance Sheets, is sufficient to cover expected warranty costs.   The following table presents the fiscal year 2011 year-to-date activity for the Company's warranty obligations:   <table style="border-collapse: collapse; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0"> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; width: 502.6pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="670"> Warranty liability as of May 1, 2010</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 42.1pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="56"> $  2,533</td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; width: 502.6pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="670"> Increase in warranty liability on fiscal year 2011 sales</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 42.1pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="56">     1,377</td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; width: 502.6pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="670"> Reduction in warranty liability for claims in fiscal year 2011</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 42.1pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="56">    (1,051)</td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; width: 502.6pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="670"> Warranty liability as of October 31, 2010</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 42.1pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="56"> $  2,859 </td></tr></table>   Legal Proceedings   At any time, the Company may be involved in legal proceedings arising in the normal course of conducting business.  The Company's policy is to routinely assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. A determination of the amount of the reserves required, if any, for these contingencies is made after thoughtful analysis of each known issue and an analysis of historical experience. The Company records reserves related to legal matters for which it is probable that a loss has been incurred and the range of such loss can be estimated. With respect to other matters, management has concluded that a loss is only reasonably possible or remote and, therefore, no liability is recorded. Management discloses the facts regarding material matters assessed as reasonably possible and potential exposure, if determinable. Costs incurred defending claims are expensed as incurred.  Other than those described below, the Company does not believe that the resolution of any such matters will have a material adverse effect on its consolidated financial position, results of operations or cash flows.   In litigation arising out of a June 2002 incident at a Crucible Metals' ("Crucible") facility, the Company's excess insurance carrier notified the Company that it would contest its obligation to provide coverage for property damage. The carrier settled the claims relating to this incident in the first quarter of fiscal year 2011 for a total of approximately $3.4 million. The Company intends to vigorously contest the carrier's claim; however, the ultimate outcome or likelihood of this specific claim cannot be determined at this time and an unfavorable outcome ranging from $0 to $3.4 million is reasonably possible.   Other Claims or Assessments   In fiscal year 2009, the Company was notified by the purchaser of its Avure business, which was reported as a discontinued operation for the year ended April 30, 2006, that the Swedish Tax Authority was conducting an audit which included periods during the time that the Company owned the subsidiary. Pursuant to an agreement with the purchaser, the Company made commitments to indemnify various liabilities and claims, including any tax matters relating to the periods when it owned the business. The Swedish tax authority concluded its audit and issued a final report in November 2009 asserting that Avure owes 19.5 million Swedish Krona in additional taxes, penalties and fines. In April 2010, the Company filed an appeal to contest the findings by the Swedish Tax Authority. While the Company intends to continue contesting the findings, an equivalent of $1.3 million was accrued as of October 31, 2010 related to the periods during which it owned Avure. This amount was accounted for as an adjustment to the loss on the disposal of the Avure business and is reported as a charge to discontinued operations in the Company's Condensed Consolidated Statements of Operations. The balance of the accrued liability will fluctuate period over period with changes in foreign currency rates until such time as the matter is ultimately resolved. </div>

0.01

84000000

46927000

47168000

37705000

46879000

46927000

47168000

465000

467000

49181000

25405000

60329000

33082000

-1207000

947000

2486000

2521000

26330000

25689000

1086000

1141000

3856000

3955000

2593000

3184000

<div> <div> Note 8: Stock-based Compensation      The Company recognizes share-based compensation expense for its share-based payment awards based on fair value. The Company maintains a stock-based compensation plan (the "2005 Plan") which was adopted in September 2005 to attract and retain talented employees and promote the growth and success of the business by aligning long-term interests of employees with those of shareholders. At the Annual Meeting of Shareholders held on September 10, 2009, shareholders of the Company approved an amendment to the 2005 Plan which provided for an increase in the aggregate number of shares of common stock that may be issued pursuant to this Plan from 2,500,000 shares to 5,000,000 shares issuable in the form of stock, stock units, stock options, stock appreciation rights, or cash awards. Stock Options      The Company grants stock options to employees of the Company with service and/or performance conditions. The compensation cost of stock options with service conditions is based on their fair value at the grant date and recognized ratably over the service period. Compensation cost of stock options with performance conditions is based upon current performance projections and the percentage of the requisite service that has been rendered. All options become exercisable upon a change in control of the Company unless the surviving company assumes the outstanding options or substitutes similar awards for the outstanding awards of the 2005 Plan. Options are granted with an exercise price equal to the fair market value of the Company's common stock on the date of grant. The maximum term of options is 10 years from the date of grant. The following table summarizes stock option activities for the six months ended October 31, 2010: <div align="left"> <table border="0" cellspacing="0"> <tr><td width="50%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="9%"> </td> <td width="2%"> </td> <td width="10%"> </td> <td width="9%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="7" align="center">Number of Options</td> <td align="left"> </td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="7" align="center">Weighted- Average Exercise Price</td> <td align="left"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="7" align="center">Aggregate Intrinsic Value</td> <td style="border-bottom: #000000 1px solid;" rowspan="7" align="center">Weighted- Average Remaining Contractual Term (Years)</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Outstanding at May 1, 2010</td> <td align="right">628,082</td> <td align="left"> </td> <td align="right">$</td> <td align="right">10.48</td> <td style="text-indent: 2px;" align="right">$</td> <td align="right">—</td> <td align="center">4.97</td></tr> <tr><td colspan="8"> </td></tr> <tr valign="bottom"><td align="left">Granted</td> <td align="right">—</td> <td align="left"> </td> <td align="right"> </td> <td align="right">—</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr><td colspan="8"> </td></tr> <tr valign="bottom"><td align="left">Exercised</td> <td align="right">—</td> <td align="left"> </td> <td align="right"> </td> <td align="right">—</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr><td colspan="8"> </td></tr> <tr valign="bottom"><td align="left">Expired or forfeited</td> <td style="border-bottom: #000000 1px solid;" align="right">(120,390</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">10.86</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Outstanding at October 31, 2010</td> <td style="border-bottom: #000000 3px double;" align="right">507,692</td> <td style="border-bottom: #000000 3px double;" align="left"> </td> <td style="border-bottom: #000000 3px double;" align="right">$</td> <td style="border-bottom: #000000 3px double;" align="right">10.40</td> <td style="border-bottom: #000000 3px double; text-indent: 2px;" align="right">$</td> <td style="border-bottom: #000000 3px double;" align="right">—</td> <td style="border-bottom: #000000 3px double;" align="center">5.61</td></tr> <tr valign="bottom"><td align="left">Vested and Exercisable at October 31, 2010</td> <td align="right">366,054</td> <td align="left"> </td> <td align="right">$</td> <td align="right">10.41</td> <td style="text-indent: 2px;" align="right">$</td> <td align="right">—</td> <td align="center">4.98</td></tr></table></div>   There were no options granted or exercised for the respective six months ended October 31, 2010 and 2009.      For the respective six months ended October 31, 2010 and 2009, the Company recognized compensation expense related to stock options of $292,000 and $289,000. As of October 31, 2010, total unrecognized compensation cost related to nonvested stock options was $587,000, which is expected to be recognized over a weighted average period of 1.2 years. Service-Based Stock Awards      The Company grants common stock or stock units to employees and non-employee directors of the Company with service conditions. Each non-employee director is eligible to receive and is granted fully vested common stock worth $40,000 annually. The compensation cost of the common stock or stock units are based on their fair value at the grant date and recognized ratably over the service period.      The following table summarizes the service-based stock award activities for employees for the six months ended October 31, 2010:</div> <div><a name="page_2"> </a> <div> <div align="left"> <table border="0" cellspacing="0"> <tr><td width="83%"> </td> <td width="6%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="6%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="5" align="center">Weighted- Average Grant-date Fair Value</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="2" align="center">Number of Shares</td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr><td colspan="5"> </td></tr> <tr valign="bottom"><td align="left">Nonvested at May 1, 2010</td> <td align="right">1,237,959</td> <td align="left"> </td> <td style="text-indent: 2px;" align="right">$</td> <td align="right">3.57</td></tr> <tr valign="bottom"><td align="left">Granted</td> <td align="right">838,666</td> <td align="left"> </td> <td align="left"> </td> <td align="right">2.28</td></tr> <tr><td colspan="5"> </td></tr> <tr valign="bottom"><td align="left">Vested</td> <td style="border-bottom: #000000 1px solid;" align="right">(300,463</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td> <td align="left"> </td> <td align="right">3.20</td></tr> <tr><td colspan="5"> </td></tr> <tr valign="bottom"><td align="left">Forfeited</td> <td style="border-bottom: #000000 1px solid;" align="right">(4,030</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right">8.06</td></tr> <tr valign="bottom"><td align="left">Nonvested at October 31, 2010</td> <td style="border-bottom: #000000 3px double;" align="right">1,772,132</td> <td style="border-bottom: #000000 3px double;" align="left"> </td> <td style="border-bottom: #000000 3px double; text-indent: 2px;" align="right">$</td> <td style="border-bottom: #000000 3px double;" align="right">3.02</td></tr></table></div>        For the respective six months ended October 31, 2010 and 2009, the Company recognized compensation expense related to service-based stock awards of $991,000 and $694,000. As of October 31, 2010, total unrecognized compensation cost related to service-based stock awards of $4.0 million is expected to be recognized over a weighted average period of 2.4 years.</div></div> </div>

<div> <div> Note 9: Basic and Diluted Income (Loss) per Share      Basic income (loss) per share is calculated by dividing income (loss) from continuing operations by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is calculated by dividing income (loss) from continuing operations by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares include the dilutive effects of outstanding stock options and non-vested stock units except where their inclusion would be antidilutive.      The following table sets forth the computation of basic and diluted income (loss) from continuing operations per share for the respective three and six months ended October 31, 2010 and 2009: <div align="left"> <table border="0" cellspacing="0"> <tr><td width="43%"> </td> <td width="2%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="8%"> </td> <td width="2%"> </td> <td width="8%"> </td> <td width="2%"> </td> <td width="2%"> </td> <td width="8%"> </td> <td width="2%"> </td> <td width="2%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="2" colspan="3" align="center">Three Months Ended October 31,</td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="2" colspan="4" align="center">Six Months Ended October 31,</td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2010</td> <td align="left"> </td> <td style="border-bottom: #000000 1px solid; text-indent: 10px;" align="center">2009</td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2010</td> <td align="left"> </td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2009</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td align="left"> </td></tr> <tr><td align="left"> </td> <td align="right"> </td> <td align="right"> </td> <td align="left"> </td> <td align="right"> </td> <td align="right"> </td> <td align="right"> </td> <td align="left"> </td> <td align="right"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Income (Loss) from Continuing Operations</td> <td style="border-bottom: #000000 1px solid;" align="right">$ </td> <td style="border-bottom: #000000 1px solid;" align="right">(220</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td> <td style="border-bottom: #000000 1px solid; text-indent: 4px;" align="right">689</td> <td style="border-bottom: #000000 1px solid;" align="right">$ </td> <td style="border-bottom: #000000 1px solid;" align="right">(751</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td> <td style="border-bottom: #000000 1px solid;" align="right">$ </td> <td style="border-bottom: #000000 1px solid;" align="right">(6,709</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 2px;" rowspan="2" align="left">Basic income (loss) per share; weighted average shares outstanding</td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="right"> </td> <td align="right">47,160</td> <td align="left"> </td> <td style="text-indent: 13px;" align="right">42,841</td> <td align="right"> </td> <td align="right">47,102</td> <td align="left"> </td> <td align="right"> </td> <td align="right">40,295</td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 2px;" align="left">Dilutive potential common shares from service</td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td style="text-indent: 1px;" align="right">-</td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left">-</td></tr> <tr valign="bottom"><td style="text-indent: 4px;" align="left">and performance based stock awards</td> <td style="border-bottom: #000000 1px solid;" align="right">-</td> <td style="border-bottom: #000000 1px solid;" align="right">-</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid; text-indent: 4px;" align="right">317</td> <td style="border-bottom: #000000 1px solid;" align="right">-</td> <td style="border-bottom: #000000 1px solid;" align="right">--</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right">-</td> <td style="border-bottom: #000000 1px solid; text-indent: 6px;" align="left">-</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 2px;" align="left">Dilutive income (loss) per share; weighted</td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 4px;" align="left">average shares outstanding</td> <td style="border-bottom: #000000 3px double;" align="right"> </td> <td style="border-bottom: #000000 3px double;" align="right">47,160</td> <td style="border-bottom: #000000 3px double;" align="left"> </td> <td style="border-bottom: #000000 3px double; text-indent: 13px;" align="right">43,158</td> <td style="border-bottom: #000000 3px double;" align="right"> </td> <td style="border-bottom: #000000 3px double;" align="right">47,102</td> <td style="border-bottom: #000000 3px double;" align="left"> </td> <td style="border-bottom: #000000 3px double;" align="right"> </td> <td style="border-bottom: #000000 3px double;" align="right">40,295</td> <td style="border-bottom: #000000 3px double;" align="left"> </td> <td style="border-bottom: #000000 3px double;" align="left"> </td></tr> <tr><td colspan="12"> </td></tr> <tr valign="bottom"><td align="left">Basic and diluted income (loss) from continuing</td> <td align="right"> </td> <td align="center"> </td> <td align="left"> </td> <td align="right"> </td> <td align="right"> </td> <td align="center"> </td> <td align="left"> </td> <td align="right"> </td> <td align="center"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 2px;" align="left">operations per share</td> <td style="border-bottom: #000000 3px double;" align="right">$ </td> <td style="border-bottom: #000000 3px double;" align="right">(0.01</td> <td style="border-bottom: #000000 3px double;" align="left">)</td> <td style="border-bottom: #000000 3px double;" align="center">0.02</td> <td style="border-bottom: #000000 3px double;" align="right">$ </td> <td style="border-bottom: #000000 3px double;" align="right">(0.02</td> <td style="border-bottom: #000000 3px double;" align="left">)</td> <td style="border-bottom: #000000 3px double;" align="right">$ </td> <td style="border-bottom: #000000 3px double;" align="right">(0.17</td> <td style="border-bottom: #000000 3px double;" align="left">)</td> <td style="border-bottom: #000000 3px double;" align="left"> </td></tr></table></div>        There were 2.3 million potentially dilutive common shares from employee stock options and stock units which have been excluded from the diluted weighted average per share calculation for the three and six months ended October 31, 2010 as their effect would be antidilutive. There were 1.0 million potentially dilutive common shares from employee stock options and stock units which were excluded from the diluted weighted average per share calculation for the respective three and six months ended October 31, 2009, as their effect would be antidilutive.</div> </div>

-706000

45000

5938000

6887000

53000

292000

13193000

6071000

11617000

5659000

30608000

16632000

39186000

19853000

-8238000

-234000

1117000

584000

-6709000

689000

-751000

-220000

-1140000

8000

-112000

-103000

<div> Note 11:  Income Taxes   The Company recognizes a net deferred tax asset for items that will generate a reduction in future taxable income to the extent that it is "more likely than not" that these deferred assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which the tax benefit will be realized. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which the tax benefit will be realized. In determining the realizability of these assets, the Company considers numerous factors, including historical profitability, estimated future taxable income and the industry in which it operates. In fiscal year 2008, the Company reversed approximately $17.2 million and $1 million of valuation allowance against deferred tax assets related to U.S. and German net operating loss (NOL) carryforwards and other net deferred tax assets, respectively, after concluding that it was more likely than not that these benefits would be realized based on cumulative positive results of operations and anticipated future profit levels. For the fiscal year ended April 30, 2010 and for the three and six months ended October 31, 2010, the Company concluded that, after evaluation of all available evidence, it anticipates generating sufficient future taxable income to realize the benefits of its U.S. and German deferred tax assets. The Company continues to provide a full valuation allowance against its net operating losses and other net deferred tax assets, arising in certain tax jurisdictions, because the realization of such assets is not more likely than not. The Company's valuation allowance was at $10.6 million at October 31, 2010, a $500,000 increase from the year ended April 30, 2010. The Company's overall increase in the valuation allowance from April 30, 2010, is mainly attributable to the creation of additional foreign net operating losses. Most of the foreign net losses can be carried forward indefinitely, with certain amounts expiring between fiscal years 2014 and 2017.   For the three and six months ended October 31, 2010, the Company recorded an income tax expense of $804,000 and $1.9 million compared to an income tax benefit of $923,000 and $1.5 million, respectively in the comparative prior year. For the three and six months ended October 31, 2010, the relationship between income tax expense and pre-tax income is not customary mainly due to the quarterly tax impact of a $1.9 million repatriation treated as a dividend for income tax purposes, and recently established tax reserves of approximately $200,000 for the six months ended October 31, 2010, in addition to the tax impact of losses from subsidiaries for which a full valuation allowance is maintained.   The Company has analyzed its filing positions in all of the federal, state, and international jurisdictions where it, or its wholly-owned subsidiaries, are required to file income tax returns for all open tax years in these jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non- U.S. income tax examinations by tax authorities for years prior to fiscal 2002. There are no significant uncertain tax positions in tax years prior to fiscal year 2002. As of October 31, 2010, the Company's balance of unrecognized tax benefits is $9.3 million, which, if recognized, would reduce the Company's effective tax rate. The Company has recognized immaterial interest charges related to unrecognized tax benefits as a component of interest expense. The Company does not expect that unrecognized tax benefits will significantly change within the next twelve months other than for currency fluctuations.   With the exception of certain of its subsidiaries, it is the general practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of October 31, 2010 the Company has not made a provision for U.S. or additional foreign withholding taxes for the excess of the carrying value for financial reporting over the tax basis of investments in foreign subsidiaries with the exception of its subsidiaries in Taiwan, Japan, and Switzerland for which it provides deferred taxes. It is not practical to estimate the amount of deferred tax liability relating to the Company's investment in its other foreign subsidiaries. With the exception of the dividend distribution discussed above, the Company did not have any other distributions for income tax purposes during the respective six months ended October 31, 2010 and 2009. However, the Company intends to repatriate funds from certain of its subsidiaries in the future. </div>

503000

411000

-1529000

-923000

1868000

804000

-5887000

383000

-523000

696000

2767000

-4478000

163000

702000

3674000

876000

-5973000

-4245000

94000

24000

4504000

4708000

1438000

474000

850000

437000

860000

186000

22503000

27213000

292000

339000

93000

53000

65000

44000

55585000

61985000

131209000

138264000

42182000

47880000

<div> <div align="left"> <table border="0" cellspacing="0"> <tr><td width="67%"> </td> <td width="1%"> </td> <td width="15%"> </td> <td width="1%">  </td> <td width="15%">  </td></tr> <tr valign="bottom"><td align="left">Note 5: Notes Payable</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr><td colspan="5"> </td></tr> <tr valign="bottom"><td style="text-indent: 4px;" align="left">Notes payable as of October 31, 2010 and April 30, 2010 consisted of the following:</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr><td colspan="5"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td rowspan="4" align="center"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="4" align="center">October 31, 2010</td> <td rowspan="4" align="center"> </td> <td style="border-bottom: #000000 1px solid;" rowspan="4" align="center">April 30, 2010</td></tr> <tr valign="bottom"><td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td style="text-indent: 1px;" align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Senior Credit Facility</td> <td align="center">$</td> <td align="center">2,050</td> <td align="left">$</td> <td align="left"> 350</td></tr></table></div>        Under its current Senior Credit Facility Agreement the Company is required to maintain the following ratios in the current and remaining quarters of fiscal year 2011: <div align="left"> <table border="0" cellspacing="0"> <tr><td width="43%"> </td> <td width="6%"> </td> <td width="43%"> </td> <td width="6%"> </td></tr> <tr valign="bottom"><td align="center">Maximum Consolidated</td> <td align="left"> </td> <td align="center">Minimum Fixed Charge</td> <td align="left"> </td></tr> <tr valign="bottom"><td style="border-bottom: #000000 1px solid;" align="center">Leverage Ratio (i)</td> <td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="center">Coverage Ratio (ii)</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="center">2.50x</td> <td align="center"> </td> <td align="center">2.0x</td> <td align="left"> </td></tr></table></div>   <table border="0" cellspacing="0"> <tr><td valign="top" width="2%" nowrap="nowrap">(i)      </td> <td width="98%"> Defined as the ratio of consolidated indebtedness, excluding the subordinated notes issued to OMAX, to consolidated adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") for the most recent four fiscal quarters.</td></tr> <tr><td valign="top" width="2%" nowrap="nowrap">(ii)      </td> <td width="98%"> Defined as the ratio of consolidated adjusted EBITDA, less income taxes and maintenance capital expenditures, during the most recent four quarters to the sum of interest charges during the most recent four quarters and scheduled debt repayments in the next four quarters.</td></tr></table>      These covenants also require the Company to meet a liquidity test such that its consolidated indebtedness shall not exceed the total of 65% of the book value of the Company's accounts receivable and 40% of the book value of its inventory.      A violation of any of the covenants above would result in an event of default and accelerate the repayment of all unpaid principal and interest and the termination of any letters of credit. The Company was in compliance with all its financial covenants as of October 31, 2010.      All the Company's domestic assets and certain interests in some foreign subsidiaries are pledged as collateral under its Senior Credit Facility Agreement. Interest on the Line of Credit is based on the bank's prime rate or LIBOR rate plus a percentage spread between 3.25% and 4.5% depending on whether it uses the bank's prime rate or LIBOR rate and based on the Company's current leverage ratio. The Company also pays an annual letter of credit fee equal to 3.5% of the amount available to be drawn under each outstanding stand-by letter of credit. The annual letter of credit fee is payable quarterly in arrears and varies depending on the Company's leverage ratio.      As of October 31, 2010, the Company had $35.8 million available under its Senior Credit Facility, net of $2.1 million in outstanding letters of credit, and $2.1 million in outstanding borrowings. Based on the Company's maximum allowable leverage ratio at the end of the period, the incremental amount it could have borrowed under its Lines of Credit, including the Taiwan credit facilities discussed below, would have been approximately $22.6 million. Revolving Credit Facilities in Taiwan      There were no outstanding balances under the Company's unsecured Taiwan credit facilities as of October 31, 2010. The unsecured commitment for the Taiwan credit facilities totaled $3.0 million at October 31, 2010, bearing interest at 2.5% per annum. </div>

61000

28000

-1575000

1665000

-3361000

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565000

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350000

2050000

37853000

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37680000

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337000

1506000

873000

<div> Note 1:  Basis of Presentation   In the opinion of the management of Flow International Corporation (the "Company"), the accompanying unaudited condensed consolidated financial statements ("financial statements") are prepared in accordance with Generally Accepted Accounting Principles ("GAAP") for interim financial information and rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with GAAP have been condensed or omitted. The unaudited financial statements reflect all adjustments, which in the opinion of management are necessary to fairly state the financial position, results of operations and cash flows for the interim periods presented. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2010.   The preparation of these interim condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the Company's financial statements. Operating results for the three and six months ended October 31, 2010 may not be indicative of future results.   Fair Value of Financial Instruments   The carrying value of the Company's current assets and liabilities approximate fair values due to the short-term maturity of these assets and liabilities. Nonfinancial assets and liabilities measured on a nonrecurring basis that are included on the Company's Condensed Consolidated Balance Sheets consist of long-lived assets, including cost-method investments and long-term subordinated notes issued to OMAX that are measured at fair value when impairment indicators exist. Due to significant unobservable inputs, the fair value measures used to evaluate impairment and to calculate a prevailing market interest rate, respectfully, are Level 3 inputs. The carrying amount of these nonfinancial assets and liabilities measured on a nonrecurring basis approximates fair value unless otherwise disclosed in these financial statements.   Reclassification   Certain amounts within the fiscal year 2010 Condensed Consolidated Balance Sheet have been reclassified to conform to the fiscal year 2011 presentation. These reclassifications did not impact total assets or total liabilities of the Company. </div>

7966000

8027000

6351000

5920000

4511000

4327000

1213000

655000

207000

3000

-6641000

-208000

5000

1593000

1823000

1219000

112000

352000

-150000

396000

104000

607000

1700000

412000

349000

7545000

800000

0.01

1000000

17439000

5250000

18050000

4690000

17000

1316000

1377000

-7849000

697000

-863000

-323000

21769000

19862000

447000

134000

35749000

40437000

18050000

16350000

1362000

35000

4245000

3547000

1850000

4582000

2436000

639000

695000

4222000

-601000

-79887000

-80750000

2.10

79789000

42037000

99515000

52935000

<div> Note 3:  Receivables, Net   Receivables, net as of October 31, 2010 and April 30, 2010 consisted of the following:   <table style="border-collapse: collapse; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0"> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style2" valign="top">  </td> <td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style1" valign="top"> October 31, 2010</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 60.85pt; padding-right: 2.35pt; padding-top: 0in;" valign="top" width="81">   April 30,2010 </td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style2" valign="bottom"> Trade Accounts Receivable</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style1" valign="bottom">     $  26,638</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 60.85pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="81">      $  23,717</td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style2" valign="bottom"> Unbilled Revenues</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style1" valign="bottom">         14,995</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 60.85pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="81">          13,184</td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style2" valign="top">  </td> <td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style1" valign="top">         41,633</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 60.85pt; padding-right: 2.35pt; padding-top: 0in;" valign="top" width="81">          36,901</td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style2" valign="bottom"> Less: Allowance for Doubtful Accounts</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style1" valign="bottom">         (1,196)</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 60.85pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="81">          (1,152)</td></tr> <tr><td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style2" valign="bottom"> Receivables, net</td> <td style="padding-bottom: 0in; padding-left: 2.35pt; padding-right: 2.35pt; padding-top: 0in;" class="style1" valign="bottom">     $  40,437 </td> <td style="padding-bottom: 0in; padding-left: 2.35pt; width: 60.85pt; padding-right: 2.35pt; padding-top: 0in;" valign="bottom" width="81">      $  35,749 </td></tr></table>   Unbilled revenues do not contain any amounts which are expected to be collected after one year.   The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses on existing receivables. The Company determines the allowance based on historical write-off experience and current economic data. The allowance for doubtful accounts is reviewed quarterly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged against the allowance when the Company determines that it is probable the receivable will not be recovered. </div>

<div> Note 2:  Recently Issued Accounting Pronouncements   In September 2009, the Financial Accounting Standards Board ("FASB") ratified the consensuses reached by the EITF regarding multiple-deliverable revenue arrangements. The new guidance:   •     provides principles and application guidance on whether a revenue arrangement contains multiple deliverables, how the arrangement should be separated, and how the arrangement consideration should be allocated;   •     requires an entity to allocate revenue in a multiple-deliverable arrangement using estimated selling prices of the deliverables if a vendor does not have vendor-specific objective evidence or third-party evidence of selling price;   •     eliminates the use of the residual method and, instead, requires an entity to allocate revenue using the relative selling price method; and   •     expands disclosure requirements with respect to multiple-deliverable revenue arrangements.   This new guidance applies to multiple-deliverable revenue arrangements that contain both software and hardware elements, focusing on determining which revenue arrangements are within the scope of software revenue guidance. This new guidance removes tangible products from the scope of the software revenue guidance and provides guidance on determining whether software deliverables in an arrangement that includes a tangible product are within the scope of the software revenue guidance. The accounting guidance should be applied on a prospective basis for revenue arrangements entered into or materially modified in the Company's fiscal year 2012. Alternatively, an entity can elect to adopt the provisions of these issues on a retrospective basis. The Company is currently assessing the potential impact that the application of the new revenue guidance may have on its consolidated financial statements and disclosures. </div>

<div> Note 7: Restructuring Activities and Other      As a result of the global recession, the Company expanded its restructuring activities during fiscal year 2010 in order to improve its performance and better position the Company for current market conditions and longer-term growth. During the six months ended October 31, 2009, the Company recorded $1.6 million related to these restructuring activities. These activities included costs to complete the Company's plan to relocate its manufacturing activities from Taiwan to the United States and severance expenses related to a reduction in global staffing levels. In September 2009, the Company sold its building in Hsinchu, Taiwan, receiving $4.7 million from the proceeds of the sale, and simultaneously entered into a lease agreement for an insignificant portion of the building, which has been treated as an operating lease. The Company recorded a gain of $601,000 from the sale of the building, after paying closing costs and other adjustments. This sale concluded the Company's overall efforts to consolidate its manufacturing activities and there were no further planned restructuring activities as of October 31, 2010.      During the six months ended October 31, 2009, the Company also recorded a $6 million charge pursuant to the provisions of an amended Merger Agreement with OMAX, net of a $2.8 million discount on two subordinated notes issued to OMAX in fiscal year 2010.      The following table summarizes the Company's restructuring and other operating charges for the three and six months ended October 31, 2009: <div align="left"> <table border="0" cellspacing="0"> <tr><td width="44%"> </td> <td width="3%"> </td> <td width="18%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="20%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="center">Three Months</td> <td align="left"> </td> <td align="right"> </td> <td align="center">Six Months</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="center">Ended October 31,</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="center">Ended October 31,</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2009</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2009</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Severance and termination benefits</td> <td align="right">$</td> <td align="right">—</td> <td align="left"> </td> <td align="right">$</td> <td align="right">1,604</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Gain on sale of building</td> <td align="right"> </td> <td align="right">(601</td> <td align="left">)</td> <td align="right"> </td> <td align="right">(601</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Merger Termination Charge</td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">—</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">3,219</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 3px double;" align="right">$</td> <td style="border-bottom: #000000 3px double;" align="right">(601</td> <td style="border-bottom: #000000 3px double;" align="left">)</td> <td style="border-bottom: #000000 3px double;" align="right">$</td> <td style="border-bottom: #000000 3px double;" align="right"> 4,222</td> <td style="border-bottom: #000000 3px double;" align="left"> </td></tr></table></div>   The following table summarizes the Company's fiscal year 2011 year-to-date restructuring activity: <div align="left"> <table border="0" cellspacing="0"> <tr><td width="54%"> </td> <td width="10%"> </td> <td width="17%"> </td> <td width="11%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right">Consolidated</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Balance, May 1, 2010</td> <td style="text-indent: 3px;" align="left">$</td> <td align="right">155</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Restructuring Charges</td> <td align="left"> </td> <td align="right">—</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Cash Payments</td> <td style="border-bottom: #000000 1px solid;" align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right">(155</td> <td style="border-bottom: #000000 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Balance, October 31, 2010</td> <td style="border-bottom: #000000 3px double; text-indent: 3px;" align="left">$</td> <td style="border-bottom: #000000 3px double;" align="right">—</td> <td style="border-bottom: #000000 3px double;" align="left"> </td></tr></table></div>   </div>

<div> Note 12: Segment Information      The Company has two reportable segments: Standard and Advanced. The Standard segment includes sales and cost of sales related to the Company's cutting, surface preparation and cleaning systems using ultrahigh-pressure water pumps, as well as parts and services to sustain these installed systems. Systems included in this segment do not require significant custom configuration. The Advanced segment includes sales and cost of sales related to the Company's complex aerospace and automation systems which require specific custom configuration and advanced features to match unique customer applications as well as parts and services to sustain these installed systems.      Segment results are measured based on revenue growth and gross margin. A summary of operations by reportable segment is as follows: <div align="left"> <table border="0" cellspacing="0"> <tr><td width="29%"> </td> <td width="15%"> </td> <td width="18%"> </td> <td width="1%"> </td> <td width="19%"> </td> <td width="17%"> </td></tr> <tr valign="bottom"><td align="left">Segments</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr><td colspan="6"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" colspan="2" align="right">Three Months Ended October 31,</td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" colspan="2" align="right">Six Months Ended October 31,</td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: #000000 1px solid;" align="right"> 2010</td> <td style="border-bottom: #000000 1px solid;" align="right">2009</td> <td align="right"> </td> <td style="border-bottom: #000000 1px solid;" align="right">2010</td> <td style="border-bottom: #000000 1px solid;" align="right">2009</td></tr> <tr valign="bottom"><td align="left">Standard Segment:</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 1px;" align="left">Sales</td> <td align="right">44,860</td> <td align="right">31,413</td> <td align="right"> </td> <td align="right">85,703</td> <td align="right">59,780</td></tr> <tr valign="bottom"><td style="text-indent: 1px;" align="left">Gross Margin</td> <td align="right">18,619</td> <td align="right">13,327</td> <td align="right"> </td> <td align="right">36,076</td> <td align="right">23,920</td></tr> <tr valign="bottom"><td align="left">Advanced Segment:</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 1px;" align="left">Sales</td> <td align="right">8,075</td> <td align="right">10,624</td> <td align="right"> </td> <td align="right">13,812</td> <td align="right">20,009</td></tr> <tr valign="bottom"><td style="text-indent: 1px;" align="left">Gross Margin</td> <td align="right">1,234</td> <td align="right">3,305</td> <td align="right"> </td> <td align="right">3,110</td> <td align="right">6,688</td></tr> <tr valign="bottom"><td align="left">Total:</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 1px;" align="left">Sales</td> <td align="right">52,935</td> <td align="right">42,037</td> <td align="right"> </td> <td align="right">99,515</td> <td align="right">79,789</td></tr> <tr valign="bottom"><td style="text-indent: 1px;" align="left">Gross Margin</td> <td align="right">19,853</td> <td align="right">16,632</td> <td align="right"> </td> <td align="right">39,186</td> <td align="right">30,608</td></tr></table></div>   </div>

16891000

8975000

21481000

10885000

987000

1284000

175000

241000

62711000

-6892000

140634000

372000

-71403000

74355000

-5684000

158826000

465000

-79252000

75624000

-4559000

159605000

465000

-79887000

76279000

-3904000

160466000

467000

-80750000

8999000

17207000

17117000

90000

1078000

1075000

3000

863000

861000

2000

7954000

8327000

1329000

2273000

40295000

43158000

47102000

47160000

40295000

42841000

47102000

47160000

253000

231000