July 9, 2007 -- Flow International, the Kent-based maker of high-pressure water- jet cutting tools, on Thursday named Charles Brown as its new chief executive, ending a five-month search. Brown will take over from Stephen Light, who has led Flow since January 2003 and is widely credited with putting the once deeply troubled company back on track. But to move forward, Flow will need to concentrate on finding new applications and customers for its machinery, which uses jets of extremely high-pressure water to cut metal, composites and other materials.
"Stephen Light came in as a restructuring guy," said Sid Parakh, an analyst who tracks Flow for McAdams Wright Ragen in Seattle. "Now that the restructuring's done, they need someone to come in and leverage what they have from a marketing standpoint." Brown will take over from Light once Flow files its 10-K annual report with the Securities and Exchange Commission. Watching closely will be Third Point, a New York-based hedge fund manager whose funds collectively are Flow's largest shareholder, with 13.6 percent of the outstanding stock.
After Light, in February, announced his planned retirement, Third Point called for Flow's board to put the company up for sale rather than search for a new CEO. It also threatened to try to replace Flow directors at the next annual meeting. But in May, the board declared its intention to continue with its restructuring plan, and Third Point has been quiet since. Brown, 48, most recently ran the pump, pool and spa divisions of Pentair, a Minnesota-based diversified manufacturer.
He left Pentair in September "to pursue other opportunities," as the market for pool equipment slowed due to the housing slump in places such as Florida and Southern California. His position was eliminated as part of a management shakeup. The housing slowdown also has cut into demand for Flow's cutting tools, analyst Parakh said, though he's more optimistic about the long-term outlook for the aerospace and electronics industries.
Flow is a supplier to both Boeing (the 787) and Airbus (the A380 and A350XWB). In the first nine months of its 2007 fiscal year, Flow reported a $6.8 million profit on sales of $163.9 million.
Source: The Seattle Times
Source: Factiva
