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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|/x/ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended October 31, 2000

or

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 0-12448

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FLOW INTERNATIONAL CORPORATION

WASHINGTON(State or other jurisdiction
of incorporation or organization)

91-1104842(I.R.S. Employer
Identification No.)23500 - 64th Avenue South
Kent, Washington 98032
(253) 850-3500


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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes /x/  No / /

The
number of shares outstanding of common stock, as of December 7, 2000: 14,789,027 shares.

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## 

FLOW INTERNATIONAL CORPORATION       INDEX

|                             |                                                                                                | Page                                                                                                 
|---------------------------- | ---------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------
|Part IFINANCIAL INFORMATION |                                                                                                |                                                                                                      
|                             | Item 1. Consolidated Financial Statements                                                      |                                                                                                      
|                             |                                                                                                | Consolidated Balance Sheets
October 31, 2000 and April 30, 2000                                     
|                             |                                                                                                | Consolidated Statements of Income
Three Months Ended October 31, 2000 and 1999                      
|                             |                                                                                                | Consolidated Statements of Income
Six Months Ended October 31, 2000 and 1999                        
|                             |                                                                                                | Consolidated Statements of Cash Flows
Six Months Ended October 31, 2000 and 1999                    
|                             |                                                                                                | Consolidated Statements of Comprehensive Income
Three and Six Months Ended October 31, 2000 and 1999
|                             |                                                                                                | Notes to Consolidated Financial Statements                                                           
|                             | Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations |                                                                                                      
|Part IIOTHER INFORMATION    |                                                                                                |                                                                                                      
|                             | Item 1.  Legal Proceedings                                                                     |                                                                                                      
|                             | Item 2.  Changes in Securities                                                                 |                                                                                                      
|                             | Item 3.  Defaults Upon Senior Securities                                                       |                                                                                                      
|                             | Item 4.  Submission of Matters to a Vote of Security Holders                                   |                                                                                                      
|                             | Item 5.  Other Information                                                                     |                                                                                                      
|                             | Item 6.  Exhibits and Reports on Form 8-K                                                      |                                                                                                      
|Signatures                   |                                                                                                | 16                                                                                                   
|                             |                                                                                                |                                                                                                      

2

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FLOW INTERNATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

|                                                                                        |                                                                                   | October 31,
2000                                         |         | April 30,
2000 |    
|--------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------- | ------- | -------------- | ---
|
|ASSETS                                                                                  |                                                                                   |                                                          |         |                |    
|Current Assets:                                                                         |                                                                                   |                                                          |         |                |    
|                                                                                        | Cash                                                                              |                                                          | $       | 5,683          |    
|                                                                                        | Receivables, less allowances for doubtful accounts of $772 and $899, respectively |                                                          |         | 49,178         |    
|                                                                                        | Inventories, net                                                                  |                                                          |         | 66,844         |    
|                                                                                        | Deferred Income Taxes                                                             |                                                          |         | 1,900          |    
|                                                                                        | Other Current Assets                                                              |                                                          |         | 5,175          |    
|                                                                                        |                                                                                   |                                                          |         |                |    
|Total Current Assets                                                                    |                                                                                   |                                                          | 128,780 |                |    
|Property and Equipment, net                                                             |                                                                                   |                                                          | 22,475  |                |    
|Intangible Assets, net of accumulated amortization of $11,887 and $10,306, respectively |                                                                                   |                                                          | 37,543  |                |    
|Deferred Income Taxes                                                                   |                                                                                   |                                                          | 426     |                |    
|Other Assets                                                                            |                                                                                   |                                                          | 3,394   |                |    
|                                                                                        |                                                                                   |                                                          |         |                |    
|                                                                                        |                                                                                   | $                                                        | 192,618 |                | $  
|                                                                                        |                                                                                   |                                                          |         |                |    
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                    |                                                                                   |                                                          |         |                |    
|Current Liabilities:                                                                    |                                                                                   |                                                          |         |                |    
|                                                                                        | Notes Payable                                                                     |                                                          | $       | 3,675          |    
|                                                                                        | Current Portion of Long-Term Obligations                                          |                                                          |         | 3,796          |    
|                                                                                        | Accounts Payable                                                                  |                                                          |         | 15,481         |    
|                                                                                        | Accrued Payroll and Related Liabilities                                           |                                                          |         | 6,201          |    
|                                                                                        | Other Accrued Taxes                                                               |                                                          |         | 352            |    
|                                                                                        | Deferred Revenue                                                                  |                                                          |         | 4,056          |    
|                                                                                        | Other Accrued Liabilities                                                         |                                                          |         | 7,533          |    
|                                                                                        |                                                                                   |                                                          |         |                |    
|Total Current Liabilities                                                               |                                                                                   |                                                          | 41,094  |                |    
|Long-Term Obligations                                                                   |                                                                                   |                                                          | 77,016  |                |    
|Customer Deposits                                                                       |                                                                                   |                                                          | 7,549   |                |    
|Minority Interest                                                                       |                                                                                   |                                                          | 1,709   |                |    
|Stockholders' Equity:                                                                   |                                                                                   |                                                          |         |                |    
|                                                                                        | Series A 8% Convertible Preferred Stock                                          |                                                          |         |                |    
|                                                                                        |                                                                                   | $.01 par value, 1,000,000 shares authorized, none issued |         |                |    
|Common Stock$.01 par value, 20,000,000 shares authorized,                              |                                                                                   |                                                          |         |                |    
|                                                                                        |                                                                                   | 14,773,984 shares outstanding at October 31, 2000        |         |                |    
|                                                                                        |                                                                                   | 14,736,081 shares outstanding at April 30, 2000          |         |                | 148
|                                                                                        | Capital in Excess of Par                                                          |                                                          |         | 41,334         |    
|                                                                                        | Retained Earnings                                                                 |                                                          |         | 37,762         |    
|                                                                                        | Accumulated Other Comprehensive Loss                                              |                                                          |         | (13,994        | )  
|                                                                                        |                                                                                   |                                                          |         |                |    
|Total Stockholders' Equity                                                              |                                                                                   |                                                          | 65,250  |                |    
|                                                                                        |                                                                                   |                                                          |         |                |    
|                                                                                        |                                                                                   | $                                                        | 192,618 |                | $  
|                                                                                        |                                                                                   |                                                          |         |                |    

See
Accompanying Notes to Consolidated Financial Statements

3

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FLOW INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(unaudited; in thousands, except per share data)

|                                         |                            | Three Months Ended
October 31, |       
|---------------------------------------- | -------------------------- | ------------------------------ | ------
|
|Revenues                                 |                            | $                              | 48,682
|Cost of Sales                            |                            |                                | 26,476
|                                         |                            |                                |       
|Gross Profit                             |                            |                                | 22,206
|Expenses:                                |                            |                                |       
|                                         | Marketing                  |                                |       
|                                         | Research and Engineering   |                                |       
|                                         | General and Administrative |                                |       
|                                         |                            |                                |       
|                                         |                            |                                | 17,841
|                                         |                            |                                |       
|Operating Income                         |                            |                                | 4,365 
|Interest Expense                         |                            |                                | (1,803
|Other Expense, net                       |                            |                                | (36   
|                                         |                            |                                |       
|Income Before Provision for Income Taxes |                            |                                | 2,526 
|Provision for Income Taxes               |                            |                                | 757   
|                                         |                            |                                |       
|Net Income                               |                            | $                              | 1,769 
|                                         |                            |                                |       
|Basic Earnings Per Share                 |                            | $                              | .12   
|                                         |                            |                                |       
|Diluted Earnings Per Share               |                            | $                              | .12   
|                                         |                            |                                |       

See
Accompanying Notes to Consolidated Financial Statements

4

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FLOW INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(unaudited; in thousands, except per share data)

|                                         |                            | Six Months Ended
October 31, |       
|---------------------------------------- | -------------------------- | ---------------------------- | ------
|
|Revenues                                 |                            | $                            | 99,109
|Cost of Sales                            |                            |                              | 55,484
|                                         |                            |                              |       
|Gross Profit                             |                            |                              | 43,625
|Expenses:                                |                            |                              |       
|                                         | Marketing                  |                              |       
|                                         | Research and Engineering   |                              |       
|                                         | General and Administrative |                              |       
|                                         |                            |                              |       
|                                         |                            |                              | 35,149
|                                         |                            |                              |       
|Operating Income                         |                            |                              | 8,476 
|Interest Expense                         |                            |                              | (3,605
|Other Expense, net                       |                            |                              | (232  
|                                         |                            |                              |       
|Income Before Provision for Income Taxes |                            |                              | 4,639 
|Provision for Income Taxes               |                            |                              | 1,391 
|                                         |                            |                              |       
|Net Income                               |                            | $                            | 3,248 
|                                         |                            |                              |       
|Basic Earnings Per Share                 |                            | $                            | .22   
|                                         |                            |                              |       
|Diluted Earnings Per Share               |                            | $                            | .21   
|                                         |                            |                              |       

See
Accompanying Notes to Consolidated Financial Statements

5

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FLOW INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in thousands)

|                                                 |                                                                               | Six Months Ended
October 31,  |                                      
|------------------------------------------------ | ----------------------------------------------------------------------------- | ----------------------------- | -------------------------------------
|
|Cash flows from operating activities:            |                                                                               |                               |                                      
|                                                 | Net income                                                                    |                               | $                                    
|                                                 | Adjustments to reconcile net income to cash provided by operating activities: |                               |                                      
|                                                 |                                                                               | Depreciation and amortization |                                      
|                                                 |                                                                               | Unrealized loss on securities |                                      
|                                                 | Decrease/(increase) in assets                                                 |                               |                                      
|                                                 | (Decrease)/increase in liabilities                                            |                               |                                      
|                                                 |                                                                               |                               |                                      
|                                                 |                                                                               |                               | Cash provided by operating activities
|                                                 |                                                                               |                               |                                      
|Cash flows from investing activities:            |                                                                               |                               |                                      
|                                                 | Expenditures for property and equipment                                       |                               |                                      
|                                                 | Payment for business combinations, net of cash acquired                       |                               |                                      
|                                                 | Other                                                                         |                               |                                      
|                                                 |                                                                               |                               |                                      
|                                                 |                                                                               |                               | Cash used by investing activities    
|                                                 |                                                                               |                               |                                      
|Cash flows from financing activities:            |                                                                               |                               |                                      
|                                                 | Borrowings under line of credit agreements, net                               |                               |                                      
|                                                 | Payments of long-term obligations                                             |                               |                                      
|                                                 | Proceeds from issuance of common stock                                        |                               |                                      
|                                                 |                                                                               |                               |                                      
|                                                 |                                                                               |                               | Cash provided by financing activities
|                                                 |                                                                               |                               |                                      
|Effect of exchange rate changes                  |                                                                               |                               | (4,876                               
|                                                 |                                                                               |                               |                                      
|Decrease in cash and cash equivalents            |                                                                               |                               | (700                                 
|Cash and cash equivalents at beginning of period |                                                                               |                               | 6,383                                
|                                                 |                                                                               |                               |                                      
|Cash and cash equivalents at end of period       |                                                                               | $                             | 5,683                                
|                                                 |                                                                               |                               |                                      

See
Accompanying Notes to Consolidated Financial Statements

6

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FLOW INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

|                            |                                                                     | Three Months Ended
October 31, |       
|--------------------------- | ------------------------------------------------------------------- | ------------------------------ | ------
|
|Net Income                  |                                                                     | $                              | 1,769 
|Other Comprehensive Income: |                                                                     |                                |       
|                            | Unrealized Loss on Equity Securities Available for Sale, net of tax |                                |       
|                            | Cumulative Translation Adjustment                                   |                                |       
|                            |                                                                     |                                |       
|Comprehensive (Loss) Income |                                                                     | $                              | (1,626
|                            |                                                                     |                                |       

|                            |                                                                     | Six Months Ended
October 31, |       
|--------------------------- | ------------------------------------------------------------------- | ---------------------------- | ------
|
|Net Income                  |                                                                     | $                            | 3,248 
|Other Comprehensive Income: |                                                                     |                              |       
|                            | Unrealized Loss on Equity Securities Available for Sale, net of tax |                              |       
|                            | Cumulative Translation Adjustment                                   |                              |       
|                            |                                                                     |                              |       
|Comprehensive (Loss) Income |                                                                     | $                            | (1,713
|                            |                                                                     |                              |       

See
Accompanying Notes to Consolidated Financial Statements

7

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FLOW INTERNATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended October 31, 2000

(unaudited)

1.  In the opinion of the management of Flow International Corporation ("the Company"), the accompanying unaudited consolidated financial statements contain all
adjustments necessary to fairly present the financial position, results of operations and cash flows of the Company. These interim financial statements do not include all information and footnote
disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, and should be read in conjunction with the
April 30, 2000 consolidated financial statements
included in the Company's Annual Report filed with the Securities and Exchange Commission on Form 10-K. Operating results for the three and six months ended October 31, 2000
may not be indicative of future results.

2.  Basic
earnings per share represents net income available to common stockholders divided by the weighted average number of shares outstanding during the period.
Diluted earnings per share represents net income available to common stockholders divided by the weighted average number of shares outstanding including the potentially dilutive impact of stock
options, where appropriate.

Basic
shares outstanding for the three months ended October 31, 2000 and 1999 were 14,793,000 and 14,701,000, respectively. For the six months ended October 31, 2000 and
1999, basic shares outstanding were 14,767,000 and 14,693,000, respectively. Diluted shares outstanding for the three months ended October 31, 2000 and 1999 were 15,197,000 and 15,084,000,
respectively. The diluted shares outstanding include potential dilutive common shares from employee stock options of 404,000 and 383,000 for the three months ended October 31, 2000 and 1999,
respectively. For the six months ended October 31, 2000 and 1999, diluted shares outstanding were 15,150,000 and 15,071,000, respectively. The diluted shares outstanding include potential
dilutive common shares from employee stock options of 383,000 and 378,000 for the six months ended October 31, 2000 and 1999, respectively.

3.  Inventories
consist of the following:



October 31, 2000

April 30, 2000Raw Materials and Parts

$
23,179

$
26,925Work in Process


28,520


11,760Finished Goods


15,145


10,483$
66,844

$
49,168


4.  Business
Acquisitions:

In
September 1999 the Company purchased substantially all of the assets and selected liabilities of Spearhead Automated Systems, Inc. ("Spearhead") for
$4.5 million. Spearhead manufactures advanced cutting, trimming and tooling equipment for the automotive and related industries.

5.  Recently
Issued Accounting Pronouncements

Statement
of Financial Accounting Standards No. 133 ("FAS 133"), "Accounting for Derivative Instruments and Hedging Activities", is effective beginning in fiscal 2001,
with early adoption permitted. FAS 133 standardizes the accounting for derivative instruments by requiring that an entity recognize those items as assets or liabilities in the financial
statements and measure them at fair value.

8

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The Company is currently reviewing the requirements of FAS 133 and assessing its impact on the Company's financial statements.

In
December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which provides guidance on
the recognition, presentation, and disclosure of revenue in financial statements filed with the SEC. SAB 101 outlines the basic criteria that must be met to recognize revenue and provides guidance for
disclosures related to revenue recognition policies. Management has not yet determined the impact SAB 101 would have on the financial position or results of operations of the Company. This statement
will be adopted by the Company no later than February 1, 2001.

6.  Certain
fiscal 2000 amounts have been reclassified to conform with the fiscal 2001 presentation. These reclassifications had no effect on previously reported net
income.

9

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FLOW INTERNATIONAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Revenue for Flow International Corporation ("Flow" or the "Company") for the six month period ended October 31, 2000 was $99.1 million, an increase of $11.4 million (13%) as
compared to the prior year period. This growth included revenues from the September 1999 acquisition of Spearhead Automated Systems, Inc. ("Spearhead"), as well as $7.4 million in
Fresher Under Pressure® revenues, a year-over-year increase of $6.9 million. Excluding Spearhead and Fresher Under Pressure sales, revenue increased 1% for
the six months ended October 31, 2000 as compared to the prior year period. Revenue for the three month period ended October 31, 2000 was $48.7 million, an increase of
$2.2 million (5%) over the prior year period. Excluding Fresher Under Pressure revenues of $4.6 million, an increase of $4.3 million over the prior year but including the Q2
fiscal 2000 Spearhead acquisition, revenues for the current quarter decreased 5% as compared to the prior year.

Geographically,
domestic revenue was $33.7 million and $63.9 million for the three and six months ended October 31, 2000, respectively. This represents an
increase in revenues of $10.1 million (43%) and $20.2 million (46%) for the three and six month periods ended October 31, 2000, respectively, as compared to the same periods in
the prior year. Excluding domestic Fresher Under Pressure revenue for the quarter, and both Spearhead and domestic Fresher Under Pressure revenues year-to-date, domestic sales
increased 25% and 23% for the three and six months ended October 31, 2000, respectively. This performance was substantially better than the United States machine cutting tool market as a whole,
which increased 17% and 3% for the three and six month periods ended September 30, 2000, respectively, according to the Association for Manufacturing Technology.

European
sales decreased compared to the prior year. European revenue was $7.3 million and $19.1 million, a decrease of $7.6 million (51%) and $9.1 million
(32%) for the three and six months ended October 31, 2000, respectively. This decrease was primarily due to the reduction in international isostatic press systems business. The aerospace and
automotive isostatic press business, which is sporadic, has been slow in fiscal 2001 compared to fiscal 2000. International isostatic press revenues were $1.5 million and $4.1 million, a
decrease of $4.6 million (75%) and $6.5 million (61%) for the three and six months ended October 31, 2000, respectively, as compared to like periods a year ago. During the quarter
however, the Company received several new orders for isostatic presses totaling $12.8 million. The Company anticipates design and production of these orders to begin late in the third quarter
of fiscal 2001. The Company was able to minimize the impact of the reduction in isostatic press manufacturing by increasing production of Fresher Under Pressure batch systems, which use the same
technology as isostatic presses. In addition, quarterly waterjet cutting sales decreased $3.2 million (36%) due in part to the strengthening dollar versus the euro which has made the Company's
waterjet systems less competitive compared to systems manufactured in Europe.

Asian
revenue was $3.9 million and $8.7 million, an increase of $324,000 (9%) and $1.8 million (26%) for the three and six months ended October 31, 2000,
respectively, as compared to the prior year period.

In
addition to a geographic breakdown, the Company's revenues can be segregated into systems sales and consumables sales. A system is generally comprised of a pump along with the
robotics or articulation to move the cutting head, and may also include automation capabilities. Also included in systems are Fresher Under Pressure revenues and isostatic and flex form press systems.
Consumables are parts used by the pump and cutting head during operation. Systems revenues for the three and six months ended October 31, 2000 were $33.9 million and
$70.5 million, an increase of $1.1 million (3%) and $10.2 million (17%), respectively, compared to the prior year periods. Consumables revenues were $14.8 million and
$13.7 million for the three and six months ended October 31, 2000, respectively, a
$1.1 million (8%) and $1.2 million (4%) increase versus the prior year periods, respectively. There have not been any significant price changes for the Company's products.

10

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The fastest growing market for ultrahigh-pressure ("UHP") technology is food processing, and is called Fresher Under Pressure. By exposing foods to pressures up to 100,000 pounds per
square inch (psi) for a short time, typically 30 seconds to slightly more than two minutes, UHP achieves the effects of pasteurization without heat. Not only are spoilage microorganisms destroyed, the
process also destroys harmful pathogens such as E. coli, listeria and salmonella, thus increasing shelf life while ensuring a safe, healthy product. Unlike thermal treatment (pasteurization) or other
methods such as irradiation, UHP processing does not destroy or alter the nutritional qualities, taste, texture or color of the food.

There
are two processing techniques used in Fresher Under Pressure. First is a "continuous flow' concept whereby pumpable foods such as juices, salsas, guacamole, liquid eggs and
salad dressings are pumped into pressure chambers, pressurized and then pumped into the next stage of the process, such as bottling. This continuous flow process is fully automated and requires just a
single operator. The Company anticipates leasing the continuous flow systems, rather than selling them. The leases have a fixed monthly charge, plus a per gallon or per pound usage fee. Lease revenue
is recognized monthly based on throughput.

Second,
for non-pumpable foods such as meats and seafood, the Company manufactures a system utilizing a patented large pressure vessel batch system technology. Revenue for
the batch systems is recognized on the percentage of completion method. Flow is the only supplier of complete UHP systems to the food industry. Included in revenues for the three and six month ended
October 31, 2000
is $4.6 million and $7.4 million associated with the Fresher Under Pressure food safety systems, respectively. This compares with the prior year of approximately $300,000 and $550,000 in
the three and six months ended October 31, 1999. The Company anticipates fiscal 2001 revenues related to both batch and continuous flow food purification systems will exceed $14 million,
a doubling of fiscal 2000 revenues and also anticipates this market will double each year for the next three years.

Based
upon research conducted by independent consultants from Business Communications Corp, food safety spending on non-thermal production equipment will exceed
$440 million annually by 2003. The research report also forecasts that UHP processing could be 50% or more of this market. Management anticipates that the Company will be in a position to
capture a significant portion of this UHP market.

Gross
profit for the three and six months ended October 31, 2000 was $22.2 million and $43.6 million, an increase of $3.6 million (20%) and
$7.9 million (22%) over the prior year periods, respectively. Gross profit expressed as a percentage of revenues (gross margin rate) was 46% for the quarter, up from 40% in the comparable prior
year period. Part of this quarterly improvement is attributed to several significant projects which were installed and accepted by the customer during the quarter. The Company had provided for
potential additional expenses to be incurred at the customer site due to the magnitude and complexity of the projects. These costs were not incurred during the installation and acceptance process.
Excluding this reduction in costs, the gross margin would have been 42%, a two percentage point improvement over the prior year period. For the six months ended October 31, 2000 gross margin
improved to 44% compared to 41% in the like period last year. Excluding the costs discussed above, the current year-to-date gross margin would have been 42%. Comparison of
gross margin rates is dependent on the mix of sales revenue types, which includes special system, standard system and consumables sales. Systems typically carry lower gross margin rates than the
Company's consumable parts. Additionally, special systems are generally custom designed and carry lower margins than the Company's standard systems such as the Bengal, Integrated Flying Bridge,

11

---

Husky, and Waterjet Machining Center. The increase over the prior year to an adjusted 42% margin in both the quarter and year to date, reflects the relative increase in sales of
consumable parts and standard systems compared to special systems versus the prior year periods.

Operating
expenses of $17.8 million and $35.1 million increased $2.9 million (19%) and $6.4 million (22%) for the three and six months ended
October 31, 2000, respectively, compared to the prior year period. Marketing expenses increased $1.3 million (20%) and $2.2 million (16%) for the three and six months ended
October 31, 2000, respectively, as compared to the corresponding prior year periods. Expressed as a percentage of revenue, marketing expenses were 16% for both the three and six months ended
October 31, 2000. The increase in marketing expenses includes the effect of the Spearhead acquisition, increased sales costs for Fresher Under Pressure and higher trade show costs, including
the bi-annual International Manufacturing Technology Show (IMTS) trade show.

Expressed
as a percent of revenues, research and engineering expenses were 10% and 9% for the three and six months ended October 31, 2000, respectively, as compared to 8% for
both quarter and year-to-date periods last year. The $1 million (27%) and $2.7 million (41%) increase in research and engineering expense for the three and six
months ended October 31, 2000, respectively, as compared to the prior year, includes the impact of the Spearhead acquisition, additional expenses associated with two large aerospace jobs and
increased costs associated with engineering the Fresher Under Pressure systems.

Expressed
as a percentage of revenue, general and administrative expense was 11% and 10% for the three and six months ended October 31, 2000, respectively. This compares to 10%
for both the prior year quarter and year-to-date.

Operating
income of $4.4 million and $8.5 million increased $723,000 (20%) and $1.5 million (22%) for the three and six months ended October 31, 2000,
respectively, compared to the prior year periods.

Current
quarter and year-to-date interest expense increased $628,000 (53%) and $1.1 million (43%), respectively, versus the prior year period due to
higher average debt levels, as well as increased interest rates. Average debt levels have risen due to the Spearhead acquisition and Fresher Under Pressure development costs. Other expense, net
decreased as a result of lower year-over-year profit at the Company's joint venture, Flow AutoClave. Lower profit at AutoClave resulted in reduced expense associated with the
minority interest in the Flow AutoClave joint venture.

Based
upon the expected tax position of the Company for fiscal 2001, taxes for the three and six months ended October 31, 2000 have been provided for at 30% of
pre-tax income. Fiscal 2000 taxes were also provided at 30% of pre-tax income; however, the net tax rate for the twelve months in fiscal 2000 was 28%. The increased rate of 30%
in fiscal 2001 as compared to the net twelve month fiscal 2000 rate of 28% is reflective of the projected change in mix of pre-tax income to higher taxing jurisdictions. The income tax
rate was lower than the statutory rate in both the current and prior year due primarily to lower foreign tax rates and benefits from the foreign sales corporation.

Basic
shares outstanding for the three months ended October 31, 2000 and 1999 were 14,793,000 and 14,701,000, respectively. For the six months ended October 31, 2000 and
1999, basic shares outstanding were 14,767,000 and 14,693,000, respectively. Diluted shares outstanding for the three months ended October 31, 2000 and 1999 were 15,197,000 and 15,084,000,
respectively. The diluted shares outstanding include potential dilutive common shares from employee stock options of 404,000 and 383,000 for the three months ended October 31, 2000 and 1999,
respectively. For the six months

12

---

ended October 31, 2000 and 1999, diluted shares outstanding were 15,150,000 and 15,071,000, respectively. The diluted shares outstanding include potential dilutive common shares from employee
stock options of 383,000 and 378,000 for the six months ended October 31, 2000 and 1999, respectively.

The
Company recorded net income of $1.8 million or $.12 per basic and diluted share for the three months ended October 31, 2000, compared to $1.5 million, or $.10
per basic and diluted share for the same prior year period. Year-to-date, the Company recorded $3.2 million or $.22 per Basic and $.21 per Diluted share as compared to
$2.8 million or $.19 per Basic and $.18 per Diluted share in fiscal 2000.

Liquidity and Capital Resources

The Company generated $3.3 million from operations during the six months ended October 31, 2000 compared to $4.6 million in the like
period a year ago. At October 31, 2000, the Company had $21.5 million in completed continuous feed Fresher Under Pressure units, as well as work in progress and stores inventory. Of this
amount, $7.2 million is classified as property and equipment, net of accumulated depreciation and the remaining $14.3 million is included in inventory on the Consolidated Balance Sheet.
The Company's significant investment in its Fresher Under Pressure safety technology has resulted in significant borrowings.

As
of October 31, 2000 the Company had approximately $2.5 million of available domestic unused lines of credit. In order to take full advantage of the Fresher Under
Pressure opportunities, additional cash will be needed. Management is currently exploring cash generating alternatives including private debt or equity placements, as well as consolidation of
operations. Should none of these events occur, the Company believes that working capital generated by operations, as well as a negotiation to increase the current credit facility, will provide
sufficient resources to meet its operating and capital requirements.
The level of cash flow will determine the pace of the development of the Fresher Under Pressure technology. The Company's Credit Agreement and Private Placement require the Company to comply with
certain financial covenants. As of October 31, 2000 the Company amended its debt agreement to delete its asset coverage covenant. The Company was in compliance with all other covenants as of
October 31, 2000.

Gross
receivables at October 31, 2000 decreased $18.7 million (27%) from April 30, 2000. This decrease includes collection of several large receivables, in
addition to a reduction in unbilled revenues which have been offset with customer deposits upon system shipments during the quarter. Days sales in gross accounts receivable can be negatively impacted
by the traditionally longer payment cycle outside the United States as well as timing of payments on large special system orders. The Company's management does not believe these timing issues will
present a material adverse impact on the Company's short-term liquidity requirements.

Inventories
at October 31, 2000 increased $17.7 million (36%) from April 30, 2000. Included in these totals is an increase in work in process of
$16.8 million. Certain products manufactured by Pressure Systems, Flow Robotics and Flow Automation can require an extended manufacturing period and thus impact inventory levels from period to
period. Work in process related to Fresher Under Pressure systems, aerospace contracts, and isostatic presses accounted for $14.2 million of this increase.

The
Company's Accumulated Other Comprehensive Loss increased $5 million (55%) from April 30, 2000, due primarily to the balance sheet translation impact associated with
the weakening of the euro against the dollar.

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Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the Company's market risk during the six months ended October 31, 2000. For additional information, refer to
Management's Discussion and Analysis of Financial Condition and Results of Operations as presented in the fiscal 2000 Annual Report to Stockholders.

SAFE HARBOR STATEMENT:

Statements in this report that are not strictly historical are "forward-looking" statements which should be considered as subject to
the many uncertainties that exist in the Company's operations and business environment. These uncertainties, which include economic and currency conditions, market demand and pricing, competitive and
cost factors, and the like, are set forth in the Flow International Corporation Form 10-K report for 2000 filed with the Securities and Exchange Commission.

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## 

FLOW INTERNATIONAL CORPORATION

PART IIOTHER INFORMATION

Item 1.Legal Proceedings

The Company is party to various legal actions incident to the normal operations of its business, none of which is believed to be material to the financial
condition of the Company.

Item 2.Changes in Securities

None

Item 3.Defaults Upon Senior Securities

None

Item 4.Submission of Matters to a Vote of Security Holders

The Company held its 2000 Annual Meeting of Stockholders on August 31, 2000. At the meeting three directors, Daniel J. Evans, Kenneth M.
Roberts and Ronald W. Tarrant were elected to three-year terms ending with the 2003 Annual Meeting of Stockholders receiving, respectively, 13,788,231, 13,795,377 and 11,269,899
votes in favor with 197,472, 190,326 and 2,715,804 votes withheld, respectively.

Item 5.Other Information

None

Item 6.Exhibits and Reports on Form 8-K

(a)  ExhibitsNone

(b)  Reports
on Form 8-KNone

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FLOW INTERNATIONAL CORPORATION
SIGNATURES

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
thereunto duly authorized.

|                        |  | FLOW INTERNATIONAL CORPORATION
|----------------------- |  | ------------------------------
|Date: December 12, 2000 |  | By:                           
|Date: December 12, 2000 |  | By:                           

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