<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to _________
Commission file number 0-12448
Flow International Corporation Voluntary Pension and Salary Deferral Plan
Flow International Corporation
23500 64th Ave. S.
Kent, WA 98032
(253) 850-3500
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY
DEFERRAL PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1998
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1998
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of independent accountants 1
Statement of net assets available for plan benefits 2
Statement of changes in net assets available for plan benefits 3
Notes to financial statements 4-14
SUPPLEMENTAL SCHEDULES (1)
Schedule I - Schedule of assets held for investment purposes 15
Schedule II - Schedule of reportable transactions 16
</TABLE>
(1) Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA have
been omitted because such schedules are not applicable.
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative Committee of the
Flow International Corporation Voluntary Pension and
Salary Deferral Plan
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Flow International Corporation Voluntary Pension and Salary
Deferral Plan at December 31, 1998 and 1997, and the changes in its net assets
available for plan benefits for the year ended December 31, 1998, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information listed in the
accompanying supplemental schedules is presented for purposes of additional
analysis and is not a required part of the basic financial statements but is
additional information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers
PricewaterhouseCoopers LLP
Seattle, Washington
June 11, 1999
1
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
<S> <C> <C>
ASSETS
Cash $ 376,418
Investments, at market
Large Company Fund $4,164,210
Small Company Fund 4,226,110
Alliance Premier Growth Fund Cl A 2,882,148
American Century 20th Ultra Advisor Fund 1,674,873
International Fund 3,201,141
GAM International Fund 1,102,914
Janus Worldwide Fund 2,075,447
Money Market Fund 1,105,798
Fidelity Advisor Prime Money Market Fund 2,046,330
Bond Fund 979,337
Portico Bond Fund 133,297
Firstar Bond Immdex. Fund 341,586
Gabelli Westwood Balanced Fund 954,867
Loomis Sayles Bond Fund Retail 423,066
MFS MA Investors Trust - Cl A Fund 816,478
Pimco Foreign Bond Fund Class A 203,230
Safeco Growth Fund 1,076,777
Stagecoach Lifepath 2010 Class A Fund 333,765
Stagecoach Lifepath 2020 Class A Fund 146,957
Stagecoach Lifepath 2030 Class A Fund 217,191
Stagecoach Lifepath 2040 Class A Fund 144,639
Vanguard 500 Fund 1,363,320
Vanguard Index 500 Fund 1,606,525
Vanguard Small Cap Fund 824,259
Vanguard Extended Market Porfolio Fund 369,091
FLOW Fund 365,015 588,938
Participant loans 272,882 88,518
Contributions receivable 241,861 134,748
Loan payments receivable 3,023 1,971
Interest and dividends receivable 255,007 114,926
---------------- ----------------
$ 17,930,090 $ 16,926,573
---------------- ----------------
---------------- ----------------
LIABILITIES
Accrued liabilities $ 4,054 $ 11,616
---------------- ----------------
Net assets available for plan benefits $ 17,926,036 $ 16,914,957
---------------- ----------------
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1998
<S> <C>
Additions to net assets attributed to:
Investment income
Net appreciation in fair value of investments $ 953,288
Interest 124,753
Dividends 452,801
-------------
1,530,842
Employer contributions 773,875
Employee contributions 1,719,569
Participant rollovers from other qualified retirement plans 48,883
-------------
Total additions 4,073,169
-------------
-------------
Deductions from net assets attributed to:
Benefits paid to participants 2,476,824
Distributions resulting from divestiture (Note 2) 435,738
Administrative expenses 149,528
-------------
Total deductions 3,062,090
-------------
Net increase 1,011,079
Net assets available for plan benefits:
Beginning of year 16,914,957
-------------
End of year $ 17,926,036
-------------
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The Flow International Corporation Voluntary Pension and Salary
Deferral Plan (the Plan) is a defined contribution plan for the benefit
of nonbargaining employees of Flow International Corporation (the
Company), effective October 1, 1986.
The Plan is administered by the Advisory Committee appointed by the
Board of Directors of the Company. Qualified employees may elect to
contribute any amount between 1% and 15% of their salary. For employees
meeting certain employment criteria, the Company shall contribute an
amount equal to 50% of the first 6% of employee compensation
contributed for employees with less than five years of service with the
Company or 75% of the first 6% of employee compensation contributed for
employees with five years or more of service. Contributions to the Plan
are paid to a trust administered by the plan trustees under the terms
of a trust agreement. The funds must be used for the exclusive benefit
of plan participants and their beneficiaries.
Employees are eligible for participation in the Plan upon the first
quarterly open enrollment period after commencement of employment and
are eligible for the employer match one year following that date.
Employer contributions and earnings thereon vest with individual
participants based upon years of service with the Company; participants
achieve 100% vesting after five years of service or at a normal
retirement age. Unvested employer contributions relating to terminated
participants are forfeited and used to reduce the Company's future
contributions to the Plan. Participants are immediately vested in their
voluntary contributions plus actual earnings thereon. Vested benefits
are payable upon the retirement, death, disability or request at
termination of a participant's employment with the Company.
2. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
The accompanying financial statements have been prepared using the
accrual basis of accounting.
Deposit administration contracts (Note 4) are stated at contract value
which approximates market value. Contract values represent
contributions made under the contracts, plus interest on the contracts,
less funds used to purchase annuities and pay related administrative
expenses. Other investments are stated at the quoted market value.
RECOGNITION OF INCOME AND EXPENSES
Administrative expenses, including trustee and investment manager fees,
are charged to the Plan and are reflected in these financial
statements. These expenses totaled $149,528 for the year ended December
31, 1998.
Investment transactions are recorded on the date of the purchase or
sale. Gains or losses are determined based on the fair market value of
investments on the date of a transaction.
4
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
The Plan presents in the statement of changes in net assets available
for plan benefits the net appreciation in the fair value of its
investments which consists of the realized gains and losses and the
unrealized appreciation and depreciation on those investments.
ROLLOVERS
The Plan allows transfers in from other qualified retirement plans.
Rollovers or plan-to-plan transfers are included as a separate line
item in the accompanying statement of changes in net assets available
for plan benefits.
PARTICIPANT LOANS
The Plan provides loans to participants, which are considered a
participant directed investment of their account. The loans represent a
trust investment, but only the borrowing participants' accounts shall
share in the interest paid on the loans or bear any expense or risk of
loss because of the loans. Participant loans are secured by the vested
portion of each borrower's account. The rate charged on the loan is the
prime rate as of the date of the loan's approval. Net borrowings
totaled $184,364 for the year ended December 31, 1998.
TRANSFER OF PLAN ASSETS
During 1997 the Company sold certain operating divisions. The Plan
assets and obligations related to employees of these divisions were
transferred out of the Plan to a successor plan.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of additions
to and deductions from net assets during the period. Actual results
could differ from those estimates.
3. INVESTMENTS
All plan investments are held in trust by Northwestern Trust and
Investors Advisory Company (the Trustee). Prior to November 19, 1998,
Plan participants directed their salary deferral and employer matching
contributions to one or a combination of nine investment selections,
known as the Large Company Fund, the Small Company Fund, the
International Fund, the Money Market Fund, the Bond Fund, the Vanguard
500 Fund, the Vanguard Small Cap Fund, the Portico Bond Fund and the
FLOW Fund.
The Large Company Fund consists of two investment groups, Kunath,
Karren, Rinne & Atkin and Morgan Stanley. Each of these investment
groups invest in large companies that exhibit the potential for a high
rate of earnings growth. The Small Company Fund consists of three
investment groups, Crestone Capital Management, ICM Asset Management,
and McKinley Capital Management. Each of these investment groups invest
in stock of small to medium size companies that exhibit the potential
for a high rate of earnings growth. The International Fund consists of
the Euro-Pacific Growth Mutual Fund and the American Small Cap World
Mutual Fund. Each of these funds invest in securities of companies
located outside the United States.
5
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
These funds are managed by American Funds. The Money Market Fund
consists of investments in high-quality corporate and U.S. Government
securities that have maturities of less than one year which are held in
the Fidelity Institutional Cash Domestic Money Market Class 1 Fund. The
Bond Fund invests in U.S. Government and Agency securities, corporate
bonds issued by high-quality companies and deposit administration
contracts with insurance companies. The Vanguard 500 Fund invests in
securities included in the S&P 500 Index. The Vanguard Small Cap Fund
consists of stock of small to medium size companies included in the
Russell 2000 Index. The Portico Bond Fund consists primarily of fixed
income securities with an average portfolio maturity of greater than
five years. The FLOW Fund consists of FLOW International Corporation
common stock which is publicly traded in the NASDAQ National Market.
The investment in FLOW stock is managed directly by the Trustee.
Effective November 19, 1998 the investment selections changed and plan
participants began directing their salary deferral and employer
matching contributions to one or a combination of eighteen investment
selections, known as the Alliance Premier Growth Fund Class A, the
American Century 20th Ultra Advisor Fund, the GAM International Fund,
the Janus Worldwide Fund, the Fidelity Advisor Prime Money Market Fund,
the Firstar Bond Immdex. Fund, the Gabelli Westwood Balanced Fund, the
Loomis Sayles Bond Fund Retail, the MFS MA Investors Trust Class A
Fund, the PIMCO Foreign Bond Fund Class A, the Safeco Growth Fund, the
Stagecoach Lifepath 2010 Class A Fund, the Stagecoach Lifepath 2020
Class A Fund, the Stagecoach Lifepath 2030 Class A Fund, the Stagecoach
Lifepath 2040 Class A Fund, the Vanguard Index 500 Fund, the Vanguard
Extended Market Portfolio Fund and the FLOW fund described above.
The Alliance Premier Growth Fund Class A and the American Century Ultra
Advisor funds consist of investments in large companies that exhibit
the potential for a high rate of earnings growth. The GAM International
fund consists of investments in securities of companies located outside
the United States. The Janus Worldwide Fund invests primarily in
foreign and domestic common stocks. The Fidelity Advisor Prime Money
Market Fund consists of investments in U.S. dollar denominated money
market securities of domestic and foreign issuers, government
securities and repurchase agreements. The Firstar Bond Immdex. Fund
consists of investments in fixed-income securities with a
dollar-weighted average portfolio maturity of more than five years. The
Gabelli Westwood Balanced Fund consists of investments in common stocks
or convertibles issued by seasoned companies with above-average
historical earnings growth, or by smaller companies with outstanding
potential for capital appreciation and in investment-grade U.S. dollar
or foreign currency-denominated debt. The Loomis Sayles Bond Fund
Retail consists of investments in debt securities and preferred stocks
which provide investment return through a combination of current income
and capital appreciation. The MFS MA Investors Trust Class A Fund
consists of investments in common stocks and convertibles, emphasizing
securities that management considers to be of high or improving
quality. The PIMCO Foreign Bond Fund Class A consists of investments in
fixed-income securities issued in at least three foreign countries. The
SAFECO Growth Fund consists of investments in common stocks selected
primarily for their capital appreciation potential. The Stagecoach
Lifepath 2010, 2020, 2030 and 2040 Class A funds consist of investments
in a mix of equities, debt securities and cash. The investment mix or
allocation for each fund is dependent upon the projected year of
retirement; 2010, 2020, 2030 or
6
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
2040 and becomes more conservative as the fund nears its maturation.
The Vanguard Index 500 Fund consists of investments in securities
included in the S&P 500 Index. The Vanguard Extended Market Portfolio
Fund consists of investments in a statistically selected sample of more
than 5,000 medium and small capitalization stocks included in the
Wilshire 4500 Index.
Participants may transfer balances between funds as well as change the
investment allocation daily.
7
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Changes in net assets available for plan benefits by investment account for the
year ended December 31, 1998:
<TABLE>
<CAPTION>
LARGE SMALL MONEY VANGUARD
COMPANY COMPANY INTERNATIONAL MARKET BOND 500
FUND FUND FUND FUND FUND FUND SUBTOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ (107,630) $ (260,470) $ 146,070 $ (36) $ 212,300 $ (9,766)
Interest 10,367 25,960 1,319 $ 47,120 28,410 113,176
Dividends 41,833 16,880 57,355 13,314 38,537 167,919
----------- ----------- ----------- ------------ ---------- ----------- -----------
(55,430) (217,630) 204,744 47,120 41,688 250,837 271,329
Employer contributions 131,022 136,908 110,567 24,981 31,443 75,987 510,908
Employee contributions 281,044 307,869 232,046 49,652 59,818 190,998 1,121,427
Participant rollovers from other
qualified retirement plans 6,873 7,617 4,896 7,736 3,371 30,493
----------- ----------- ----------- ------------ ---------- ----------- -----------
Total additions 363,509 234,764 552,253 121,753 140,685 521,193 1,934,157
----------- ----------- ----------- ------------ ---------- ----------- -----------
Participant transfers, net (3,821,967) (3,906,682) (3,187,298) (1,030,227) (852,172) (1,618,483) (14,416,829)
----------- ----------- ----------- ------------ ---------- ----------- -----------
Loan transactions, net (22,186) (21,274) (18,413) (655) (1,105) - (63,633)
----------- ----------- ----------- ------------ ---------- ----------- -----------
Deductions from net assets attributed to
Benefits paid to participants 616,846 423,543 504,712 203,810 72,248 323,631 2,144,790
Distributions resulting from divesture 80,116 69,225 62,452 1,939 216,334 430,066
Administrative expenses 34,137 69,577 8,740 3,511 3,213 4,989 124,167
----------- ----------- ----------- ------------ ---------- ----------- -----------
Total deductions 731,099 562,345 575,904 209,260 291,795 328,620 2,699,023
----------- ----------- ----------- ------------ ---------- ----------- -----------
Net increase (decrease) (4,211,743) (4,255,537) (3,229,362) (1,118,389) (1,004,387) (1,425,910) (15,245,328)
Net assets available for plan benefits
Beginning of year 4,211,743 4,255,537 3,229,362 1,118,389 1,004,387 1,425,910 15,245,328
----------- ----------- ----------- ------------ ---------- ----------- -----------
End of year $ - $ - $ - $ - $ - $ - $ -
----------- ----------- ----------- ------------ ---------- ----------- -----------
</TABLE>
8
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Changes in net assets available for plan benefits by investment account for the
year ended December 31, 1998 (continued):
<TABLE>
<CAPTION>
VANGUARD PORTICO
CARRY-FORWARD SMALL CAP BOND FLOW PARTICIPANT
SUBTOTAL FUND FUND FUND LOANS SUBTOTAL
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ (9,766) $ (115,938) $ 2,376 $ 8,360 $ (301) $ (115,269)
Interest 113,176 476 111 158 18 113,939
Dividends 167,919 5,782 10,107 183,808
--------------- ------------ ----------- ------------ ----------- ------------
271,329 (109,680) 12,594 8,518 (283) 182,478
Employer contributions 510,908 40,420 5,428 31,016 587,772
Employee contributions 1,121,427 101,873 11,950 76,408 1,311,658
Participant rollovers from other
qualified retirement plans 30,493 818 449 31,760
--------------- ------------ ----------- ------------ ----------- ------------
Total additions 1,934,157 33,431 29,972 116,391 (283) 2,113,668
--------------- ------------ ----------- ------------ ----------- ------------
Participant transfers, net (14,416,829) (749,835) (46,361) (235,881) (15,448,906)
--------------- ------------ ----------- ------------ ----------- ------------
Loan transactions, net (63,633) (6,168) (1,047) 184,647 113,799
--------------- ------------ ----------- ------------ ----------- ------------
Deductions from net assets attributed to
Benefits paid to participants 2,144,790 140,891 93,714 97,429 2,476,824
Distributions resulting from divesture 430,066 5,672 435,738
Administrative expenses 124,167 4,989 1,211 1,921 132,288
--------------- ------------ ----------- ------------ ----------- ------------
Total deductions 2,699,023 151,552 94,925 99,350 - 3,044,850
--------------- ------------ ----------- ------------ ----------- ------------
Net increase (decrease) (15,245,328) (874,124) (111,314) (219,887) 184,364 (16,266,289)
Net assets available for plan benefits
Beginning of year 15,245,328 874,124 111,314 595,673 88,518 16,914,957
--------------- ------------ ----------- ------------ ----------- ------------
End of year $ - $ - $ - $ 375,786 $ 272,882 $ 648,668
--------------- ------------ ----------- ------------ ----------- ------------
</TABLE>
9
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Changes in net assets available for plan benefits by investment account for the
year ended December 31, 1998 (continued):
<TABLE>
<CAPTION>
FIDELITY FIRSTAR GAM JANUS
CARRY-FORWARD ADVISOR PRIME BOND INTERNATIONAL WORLDWIDE
SUBTOTAL MM FUND IMMDEX. INST. FUND FUND SUBTOTAL
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ (115,269) $ 1,892 $ 76,858 $ 232,222 $ 195,703
Interest 113,939 $ 10,814 124,753
Dividends 183,808 3,689 7,923 195,420
------------ ----------- ----------- ------------- ------------- -------------
182,478 10,814 5,581 76,858 240,145 515,876
Employer contributions 587,772 10,499 3,205 15,885 27,191 644,552
Employee contributions 1,311,658 18,732 5,992 34,076 61,003 1,431,461
Participant rollovers from other
qualified retirement plans 31,760 15,013 46,773
------------ ----------- ----------- ------------- ------------- -------------
Total additions 2,113,668 55,058 14,778 126,819 328,339 2,638,662
------------ ----------- ----------- ------------- ------------- -------------
Participant transfers, net (15,448,906) 2,012,281 334,800 1,010,078 1,805,519 (10,286,228)
------------ ----------- ----------- ------------- ------------- -------------
Loan transactions, net 113,799 (271) (142) (13,351) (13,683) 86,352
------------ ----------- ----------- ------------- ------------- -------------
Deductions from net assets attributed to
Benefits paid to participants 2,476,824 2,476,824
Distributions resulting from divesture 435,738 435,738
Administrative expenses 132,288 2,101 351 1,132 2,131 138,003
------------ ----------- ----------- ------------- ------------- -------------
Total deductions 3,044,850 2,101 351 1,132 2,131 3,050,565
------------ ----------- ----------- ------------- ------------- -------------
Net increase (decrease) (16,266,289) 2,064,967 349,085 1,122,414 2,118,044 (10,611,779)
Net assets available for plan benefits
Beginning of year 16,914,957 16,914,957
------------ ----------- ----------- ------------- ------------- -------------
End of year $ 648,668 $2,064,967 $ 349,085 $1,122,414 $ 2,118,044 $ 6,303,178
------------ ----------- ----------- ------------- ------------- -------------
</TABLE>
10
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Changes in net assets available for plan benefits by investment account for the
year ended December 31, 1998 (continued):
<TABLE>
<CAPTION>
GABELLI LOOMIS PIMCO MFS
CARRY-FORWARD WESTWOOD SAYLES BOND FOREIGN MA INVESTORS
SUBTOTAL BAL. FUND FUND BOND FUND TRUST FUND SUBTOTAL
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ 195,703 $ 32,873 $ (8,976) $ (2,295) $ 22,595 $ 239,900
Interest 124,753 124,753
Dividends 195,420 15,344 25,388 32,488 268,640
------------ ----------- ------------ --------- ------------ --------------
515,876 48,217 16,412 (2,295) 55,083 633,293
Employer contributions 644,552 6,061 2,505 2,306 10,585 666,009
Employee contributions 1,431,461 11,879 5,989 5,093 22,757 1,477,179
Participant rollovers from other
qualified retirement plans 46,773 2,110 48,883
------------ ----------- ------------ --------- ------------ --------------
Total additions 2,638,662 66,157 24,906 7,214 88,425 2,825,364
------------ ----------- ------------ --------- ------------ --------------
Participant transfers, net (10,286,228) 911,602 402,000 199,051 796,359 (7,977,216)
------------ ----------- ------------ --------- ------------ --------------
Loan transactions, net 86,352 (69) (17,733) 68,550
------------ ----------- ------------ --------- ------------ --------------
Deductions from net assets attributed to
Benefits paid to participants 2,476,824 2,476,824
Distributions resulting from divesture 435,738 435,738
Administrative expenses 138,003 980 434 208 838 140,463
------------ ----------- ------------ --------- ------------ --------------
Total deductions 3,050,565 980 434 208 838 3,053,025
------------ ----------- ------------ --------- ------------ --------------
Net increase (decrease) (10,611,779) 976,779 426,403 206,057 866,213 (8,136,327)
Net assets available for plan benefits
Beginning of year 16,914,957 16,914,957
------------ ----------- ------------ --------- ------------ --------------
End of year $ 6,303,178 $ 976,779 $ 426,403 $206,057 $ 866,213 $ 8,778,630
------------ ----------- ------------ --------- ------------ --------------
</TABLE>
11
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Changes in net assets available for plan benefits by investment account for the
year ended December 31, 1998 (continued):
<PAGE>
<TABLE>
<CAPTION>
STAGECOACH STAGECOACH STAGECOACH STAGECOACH
CARRY-FORWARD LIFEPATH LIFEPATH LIFEPATH LIFEPATH
SUBTOTAL 2010A FUND 2020A FUND 2030A FUND 2040A FUND SUBTOTAL
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ 239,900 $ (6,705) $ (3,460) $ (779) $ (303) $ 228,653
Interest 124,753 124,753
Dividends 268,640 22,335 12,781 16,581 12,879 333,216
------------ ------------ --------- --------- --------- -----------
633,293 15,630 9,321 15,802 12,576 686,622
Employer contributions 666,009 1,878 3,152 2,108 2,098 675,245
Employee contributions 1,477,179 3,165 5,548 4,198 4,511 1,494,601
Participant rollovers from other
qualified retirement plans 48,883 48,883
------------ ------------ --------- --------- --------- -----------
Total additions 2,825,364 20,673 18,021 22,108 19,185 2,905,351
------------ ------------ --------- --------- --------- -----------
Participant transfers, net (7,977,216) 337,700 145,639 214,474 141,227 (7,138,176)
------------ ------------ --------- --------- --------- -----------
Loan transactions, net 68,550 68,550
------------ ------------ --------- --------- --------- -----------
Deductions from net assets attributed to
Benefits paid to participants 2,476,824 2,476,824
Distributions resulting from divesture 435,738 435,738
Administrative expenses 140,463 343 151 222 149 141,328
------------ ------------ --------- --------- --------- -----------
Total deductions 3,053,025 343 151 222 149 3,053,890
------------ ------------ --------- --------- --------- -----------
Net increase (decrease) (8,136,327) 358,030 163,509 236,360 160,263 (7,218,165)
Net assets available for plan benefits
Beginning of year 16,914,957 16,914,957
------------ ------------ --------- --------- --------- -----------
End of year $ 8,778,630 $ 358,030 $ 163,509 $ 236,360 $ 160,263 $ 9,696,792
------------ ------------ --------- --------- --------- -----------
</TABLE>
12
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
Changes in net assets available for plan benefits by investment account for the
year ended December 31, 1998 (continued):
<TABLE>
<CAPTION>
ALLIANCE AMERICAN VANGUARD
CARRY-FORWARD PREMIER CENTURY INDEX 500
SUBTOTAL GROWTH FUND 20TH UAC FUND FUND
<S> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ 228,653 $ 375,834 $ 80,484 $ 205,943
Interest 124,753
Dividends 333,216 54,429 11,478
-------------- --------------- --------------- --------------
633,293 430,263 80,484 217,421
Employer contributions 675,245 33,416 23,767 22,926
Employee contributions 1,494,601 72,366 58,965 49,422
Participant rollovers from other
qualified retirement plans 48,883
-------------- --------------- --------------- --------------
Total additions 2,825,364 536,045 163,216 289,769
-------------- --------------- --------------- --------------
Participant transfers, net (7,138,176) 2,467,794 1,559,891 1,352,318
-------------- --------------- --------------- --------------
Loan transactions, net 68,550 (20,980) (14,737) (5,310)
-------------- --------------- --------------- --------------
Deductions from net assets attributed to
Benefits paid to participants 2,476,824
Distributions resulting from divesture 435,738
Administrative expenses 141,328 3,044 1,720 1,952
-------------- --------------- --------------- --------------
Total deductions 3,053,025 3,044 1,720 1,952
-------------- --------------- --------------- --------------
Net increase (decrease) (8,136,327) 2,979,815 1,706,650 1,634,825
Net assets available for plan benefits
Beginning of year 16,914,957
-------------- --------------- --------------- --------------
End of year $ 8,778,630 $ 2,979,815 $ 1,706,650 $ 1,634,825
-------------- --------------- --------------- --------------
<CAPTION>
VANGUARD SAFECO CASH
EXT. MKT. GROWTH AND CASH
FUND FUND EQUIVALENTS TOTAL
<S> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ 9,831 $ 52,543 $ 953,288
Interest 124,753
Dividends 22,742 30,936 452,801
------------- --------------- ---------------
32,573 83,479 1,530,842
Employer contributions 4,685 13,836 773,875
Employee contributions 11,628 32,587 1,719,569
Participant rollovers from other
qualified retirement plans 48,883
------------- --------------- ---------------
Total additions 48,886 129,902 4,073,169
------------- --------------- ---------------
Participant transfers, net 358,440 1,023,315 $ 376,418 -
------------- --------------- -------------- ---------------
Loan transactions, net (4,875) (22,648) -
------------- --------------- -------------- ---------------
Deductions from net assets attributed to
Benefits paid to participants 2,476,824
Distributions resulting from divesture 435,738
Administrative expenses 379 1,105 149,528
------------- --------------- -------------- ---------------
Total deductions 379 1,105 - 3,062,090
------------- --------------- -------------- ---------------
Net increase (decrease) 402,072 1,129,464 376,418 1,011,079
Net assets available for plan benefits
Beginning of year 16,914,957
------------- --------------- -------------- ---------------
End of year $ 402,072 $ 1,129,464 $ 376,418 $17,926,036
------------- --------------- -------------- ---------------
</TABLE>
13
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
4. DEPOSIT ADMINISTRATION CONTRACTS WITH INSURANCE COMPANIES
As of December 31, 1997, the Plan had deposit administration contracts
with Ameritas Financial Services and Aetna Life Insurance and Annuity
Company, which were included in the Bond Fund and totaled $122,672 and
$424,941, respectively. During the year ended December 31, 1998, the
Plan's investment selections were changed and all deposit
administration contracts were sold.
5. FEDERAL INCOME TAXES
The Plan received an updated favorable determination letter from the
Internal Revenue Service dated February 10, 1995 as to the qualified
status of the Plan. The Company is of the opinion that the Plan
continues to fulfill the requirements of a qualified plan under Section
401(a) of the Internal Revenue Code and that the trust which forms a
part of the Plan is not subject to tax. Accordingly, no provision for
federal or state income taxes has been provided.
6. BENEFIT OBLIGATIONS
The Plan has properly excluded obligations totaling $0 and $195,186 for
benefits payable to participants who have withdrawn from the Plan but
were not paid at December 31, 1998 and 1997, respectively. This
exclusion results in a difference between the Plan's financial
statements and the Plan's December 31, 1997 Form 5500.
14
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
ADDITIONAL INFORMATION - SCHEDULE I
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION COST FAIR VALUE
<S> <C> <C>
Alliance Premier Growth Fund Class A $2,504,499 $2,882,148
American Century 20th Ultra Advisor Class Fund 1,594,873 1,674,873
Fidelity Advisor Prime Money Market Fund 2,046,330 2,046,330
Firstar Bond Immdex Fund 340,027 341,586
FLOW Fund
FLOW International Common Stock 365,350 365,015
Gabelli Westwood Balanced Fund 924,446 954,867
GAM International Fund 1,026,817 1,102,914
Janus Worldwide Fund 1,844,003 2,075,447
Loomis Sayles Bond Fund Retail 430,670 423,066
MFS MA Investors Trust - Class A Fund 793,608 816,478
Pimco Foreign Bond Fund Class A 205,191 203,230
Safeco Growth Fund 1,025,616 1,076,777
Stagecoach Lifepath 2010 Class A Fund 340,470 333,765
Stagecoach Lifepath 2020 Class A Fund 150,398 146,957
Stagecoach Lifepath 2030 Class A Fund 217,970 217,191
Stagecoach Lifepath 2040 Class A Fund 144,942 144,639
Vanguard Extended Market Portfolio 359,448 369,091
Vanguard Index 500 Fund 1,396,171 1,606,525
Participant loans
Due through 9/18/2016
Interest rates 8.5%-9% 272,882 272,882
</TABLE>
15
<PAGE>
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
ADDITIONAL INFORMATION - SCHEDULE II
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COST OF
SALES/ ASSETS SOLD/ GAIN/
PURCHASES MATURITIES MATURED (LOSS)
<S> <C> <C> <C> <C>
Series of transactions with respect to
securities when aggregated, involving
in excess of 5% of the current value
of plan assets at the beginning of
the plan year
Fidelity Inst. Cash Domestic MMkt Class 1 $ 18,074,837 $ 19,589,138 $ 19,589,138
Alliance Premier Growth Fund Class A 2,921,951 42,618 39,803 $ 2,815
American Century 20th Ultra Advisor Class Fund 1,684,015 9,626 9,142 484
Europacific Growth Fund 312,039 2,844,393 2,693,269 151,124
Fidelity Advisor Prime Money Market Fund 2,055,986 9,656 9,656
Gabelli Westwood Balanced Fund 1,046,192 93,777 91,325 2,452
GAM International Fund 1,130,383 28,228 27,469 759
Janus Worldwide Fund 2,089,492 14,824 14,045 779
Safeco Growth Fund 1,137,441 62,139 60,664 1,475
Smallcap World Fund 127,072 902,091 936,234 (34,143)
Van Kampen Morgan Stanley
Value Fund Class A 2,268,482 2,326,885 (58,403)
Vanguard Small Cap Fund 449,217 1,157,723 1,273,476 (115,753)
Vanguard Index 500 Fund 1,662,721 1,726,519 1,419,516 307,003
</TABLE>
16
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-57100) and
in the Registration Statements on Form S-8 (No. 33-40397 and No. 33-44776) of
Flow International Corporation of our report dated June 11, 1999 appearing on
page 4 of this Form 11-K.
PricewaterhouseCoopers LLP
Seattle, Washington
June 11, 1999
