713002--6/26/2009--FLOW_INTERNATIONAL

related topics

{operation, international, foreign}

{tax, income, asset}

{product, market, service}

{customer, product, revenue}

{debt, indebtedness, cash}

{control, financial, internal}

{financial, litigation, operation}

{property, intellectual, protect}

{system, service, information}

{stock, price, operating}

{condition, economic, financial}

{acquisition, growth, future}

Risks Related to our Business The recent deterioration in economic conditions and the credit markets could adversely affect our access to capital and adversely impact our results of operation. We may not be able to comply with the financial tests or ratios required to comply with our covenant requirements under our Line of Credit which may impact our ability to draw funds and may result in the acceleration of the maturity of, and/or the termination of the Line of Credit. We may need to raise additional funds to finance our future capital and/or operating needs. Our results of operations and financial condition could be materially affected by changes in product mix or pricing. If we fail to obtain sufficient quantities of materials, components and equipment required for our manufacturing activities at competitive prices and quality and on a timely basis or fail to effectively adapt out cost structure to changing market conditions our business and financial results will suffer. If we fail to technologically advance our products through continued research and development, our financial results may be adversely affected. We might fail to adequately protect our intellectual property rights or third parties might assert that our technologies infringe on their intellectual property. Foreign currency exchange rates and commodity prices may adversely affect our results of operations and financial condition. Changes in our income tax rates or exposure to additional income tax liabilities could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods. Unexpected losses in future reporting periods may require the Company to adjust the valuation allowance against its deferred tax assets. We have unresolved claims with the Purchaser of Avure. International economic, political, legal and business factors could negatively affect our results of operations, cash flows and financial condition. If we are unable to complete the upgrades to our information technology systems that are currently in process, or our upgrades are unsuccessfully implemented, our future success may be negatively impacted. We may incur net losses in the future, and we may not be able to regain or sustain profitability on a quarterly or annual basis. Our stock price has been and is likely to continue to be highly volatile.

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713002--6/26/2009--FLOW_INTERNATIONAL_CORP