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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period ended __________________ to ___________________
Commission file number 0-12448
Flow International Corporation Voluntary Pension and Salary Deferral Plan
FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY
DEFERRAL PLAN
FENANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1999
1
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FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY
DEFERRAL PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 1999
2
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FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 1999
INDEX
PAGE
Report of independent accountants 1
Statement of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4-6
SUPPLEMENTAL SCHEDULE (1)
Schedule I - Form 5500, Schedule H, Line 4i, Schedule of assets
held for investment purposes at year end 7
(1) Other schedules required by 29 CFR 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.
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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 (the "Plan") at December 31, 1999 and 1998, and the changes in its
net assets available for plan benefits for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
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
auditing standards generally accepted in the United States, 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 schedule 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 9, 2000
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FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
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<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
<S> <C> <C>
ASSETS
Cash ................................................... $ 5,041 $ 376,418
Investments, at market
Alliance Premier Growth Fund Class A ............... 4,654,603 2,882,148
American Century 20th Ultra Advisor Class Fund ..... 3,104,813 1,674,873
GAM International Fund ............................. 1,027,689 1,102,914
Janus Worldwide Fund ............................... 3,982,404 2,075,447
Fidelity Advisor Prime Money Market Fund ........... 2,046,330
Fidelity Daily Money Fund .......................... 1,550,037
Fidelity Inst. Cash Domestic Money Market Class 1... 63,710
Firstar Bond Immdex. Fund .......................... 288,000 341,586
Gabelli Westwood Balanced Fund ..................... 746,884 954,867
Loomis Sayles Bond Fund Retail ..................... 309,869 423,066
MFS MA Investors Trust - Class A Fund .............. 848,601 816,478
Pimco Foreign Bond Fund Class A .................... 178,431 203,230
Safeco Growth Fund ................................. 998,451 1,076,777
Stagecoach Lifepath 2010 Class A Fund .............. 174,428 333,765
Stagecoach Lifepath 2020 Class A Fund .............. 211,830 146,957
Stagecoach Lifepath 2030 Class A Fund .............. 265,465 217,191
Stagecoach Lifepath 2040 Class A Fund .............. 201,931 144,639
Vanguard Index 500 Fund ............................ 2,916,186 1,606,525
Vanguard Extended Market Portfolio Fund ............ 675,492 369,091
FLOW Fund .......................................... 937,710 365,015
Participant loans .................................. 495,646 272,882
Contributions receivable ............................... 281,037 241,861
Loan payments receivable ............................... 11,670 3,023
Interest and dividends receivable ...................... 233,823 255,007
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24,163,751 17,930,090
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LIABILITIES
Accrued liabilities .................................... -- 4,054
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Net assets available for benefits ...................... $24,163,751 $17,926,036
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
<S> <C>
Additions to net assets attributed to:
Investment income
Net appreciation in fair value of investments ........... $ 4,117,961
Interest ................................................ 92,513
Dividends ............................................... 943,675
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5,154,149
Employer contributions .................................... 776,731
Employee contributions .................................... 1,939,355
Participant rollovers from other qualified retirement
plans ................................................... 339,128
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Total additions ....................................... 8,209,363
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Deductions from net assets attributed to:
Benefits paid to participants ............................. 1,971,473
Administrative expenses ................................... 175
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Total deductions ...................................... 1,971,648
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Net increase .......................................... 6,237,715
Net assets available for benefits:
Beginning of year ......................................... 17,926,036
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End of year ............................................... $24,163,751
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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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. Investments are stated at the quoted market value.
RECOGNITION OF INCOME AND EXPENSES
Administrative expenses, including trustee and investment manager fees, are
paid by the investment manager out of commissions and, therefore, are not
reflected in these financial statements.
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.
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.
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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 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, and are limited to the lesser of 50% of the
participants' vested balance or $50,000. The rate charged on the loan is
the prime rate as of the date of the loan's approval. The prime rate at
December 31, 1999 was 8.5%. Net borrowings totaled $222,764 for the year
ended December 31, 1999.
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.
Effective November 19, 1998, Plan participants began directing their salary
deferral and employer matching contributions to one or a combination of
nineteen 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 Fidelity Daily Money Fund, the Fidelity Inst. Cash
Domestic Money Market Class 1, 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 below.
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 Daily Money Fund, the Fidelity Inst.
Cash Domestic Money Market Class 1 Fund and the Fidelity Advisor Prime
Money Market Fund consist 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
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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 that
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 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.
4. 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.
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SUPPLEMENTAL SCHEDULE
10
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FLOW INTERNATIONAL CORPORATION
VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
SUPPLEMENTAL SCHEDULE - SCHEDULE I - FORM 5500, SCHEDULE H, LINE 4I
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
DECEMBER 31, 1999
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<TABLE>
<CAPTION>
IDENTITY OF ISSUE DESCRIPTION FAIR VALUE
<S> <C> <C>
Alliance Premier Growth Fund Class A Mutual Fund $4,654,603
American Century 20th Ultra Advisor Class Fund Mutual Fund 3,104,813
Fidelity Daily Money Fund Mutual Fund 1,550,037
Fidelity Inst. Cash Domestic Money Market Class 1 Mutual Fund 63,710
Firstar Bond Immdex. Fund Mutual Fund 288,000
FLOW Fund
FLOW International Common Stock Common Stock 937,710
Gabelli Westwood Balanced Fund Mutual Fund 746,884
GAM International Fund Mutual Fund 1,027,689
Janus Worldwide Fund Mutual Fund 3,982,404
Loomis Sayles Bond Fund Retail Mutual Fund 309,869
MFS MA Investors Trust - Class A Fund Mutual Fund 848,601
Pimco Foreign Bond Fund Class A Mutual Fund 178,431
Safeco Growth Fund Mutual Fund 998,451
Stagecoach Lifepath 2010 Class A Fund Mutual Fund 174,428
Stagecoach Lifepath 2020 Class A Fund Mutual Fund 211,830
Stagecoach Lifepath 2030 Class A Fund Mutual Fund 265,465
Stagecoach Lifepath 2040 Class A Fund Mutual Fund 201,931
Vanguard Extended Market Portfolio Fund Mutual Fund 675,492
Vanguard Index 500 Fund Mutual Fund 2,916,186
Participant loans Due through September, 2016 495,646
Interest rates 8.5%-9%
</TABLE>
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (No. 33-57100) and on Forms S-8 (No. 33-40397 and No.
33-44776) of Flow International Corporation of our report dated June 9, 2000,
relating to the financial statements of Flow International Corporation Voluntary
Pension and Salary Deferral Plan, which appears in this form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Seattle, Washington
June 28, 2000
