Flow International: Other Events
The following excerpt is from the company's SEC filing
In connection with Parent’s
marketing of the debt as part of its financing of the Merger, the Company and Parent disclosed that they expect to close the
Merger on or about January 31, 2014. The closing of the Merger remains subject to customary closing conditions.
The Company also disclosed the information
below with regard to monthly bookings. Bookings generally consist of product orders for which a signed purchase order has been
received, and therefore management uses bookings as a useful indicator of future short-term performance. Since July 31, 2013, the
bookings for future waterjet cutting systems and p
umps at the Company have increased, as indicated in the table below. The conversion
time of bookings to net sales is typically one to three months. The following table shows historical bookings data for the Company
calculated as described therein.
(1)The Company’s bookings are tracked on a weekly basis. To compute the average amount of bookings
per month we used trailing 90-day data divided by three, as of the end of the respective month.
Management uses bookings as an
indicator of future short-term performance. Bookings for the Company’s waterjet cutting machines and pumps in any
period consist of new product orders for which a signed customer quote or a signed purchase order has been received. The
Company generally requires a deposit (usually 30% of the purchase price) prior to beginning to execute the purchase order.
Even though the Company generally begins production only once it has received the customer’s deposit for the
corresponding product, the Company does not generally receive the remainder of the purchase price until after the
corresponding product is shipped to the customer and/or installed, subject to any holdbacks for warranty claims. The time from a
given booking to recording of the corresponding revenue varies depending on customer financing needs, customer lead time
and geography, among other factors. However, such conversion time into revenue has typically been between one to three
months, and, as such, the time from bookings to reported net sales may span more than one fiscal quarter. Investors are
cautioned not to place undue reliance on the Company’s booking amounts because those amounts may not result in a
corresponding amount of future net sales. The historical relationship of bookings to net sales has varied and will continue
to vary over time. Bookings may be canceled without penalty prior to the time the Company receives a deposit from its
customer. After a deposit is received, customers may still cancel their product orders but generally would also then forfeit
their deposit. The Company historically has had a low cancellation rate and its products are not generally customized, which
facilitates resale upon cancellation. However, the Company expends money in advance of recording revenue, and, if bookings
don’t meet expectations, we may not be able to reduce our expenses in a timely manner to offset the decline in
anticipated net sales. Delays in delivery of the Company’s products or a reduction of the Company’s bookings as a
result of cancellations or as a result of the level of bookings during any particular period could have a material adverse
effect on the Company’s business and results of operations or increase volatility in our results.
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.
The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.
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