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&lt;p style="text-align: justify; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; font-size: 10pt;" class="MsoNormal"&gt;&lt;b&gt;Note 1&lt;/b&gt;&amp;#8212;&lt;b&gt;Basis of Presentation&lt;/b&gt; &lt;/p&gt;
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&lt;p style="text-align: justify; text-indent: 0.2in; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; font-size: 10pt;" class="MsoNormal"&gt;In the opinion of the management of Flow International Corporation (the "Company"), the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring items and accruals necessary to fairly present the financial position, results of operations and cash flows of the Company. The financial information as of April 30, 2010 is derived from the Company's audited consolidated financial statements and notes thereto for the fiscal year ended April 30, 2010 included in Item 8 in the fiscal year 2010 Annual Report on Form 10-K ("10-K"). These interim condensed consolidated financial statements do not include all information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") in the United States, and should be read in conjunction with the Company's fiscal year 2010 Form 10-K. The preparation of these interim condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the Company's financial statements. Operating results for the three months ended July 31, 2010 may not be indicative of future results.&lt;/p&gt;
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&lt;p style="text-align: justify; text-indent: 0.2in; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; font-size: 10pt;" class="MsoNormal"&gt;&lt;a name="jump_exp_1"&gt; &lt;/a&gt;&lt;b&gt;&lt;i&gt;Fair &lt;a name="jump_exp_2"&gt; &lt;/a&gt;Value &lt;a name="jump_exp_3"&gt; &lt;/a&gt;of &lt;a name="jump_exp_4"&gt; &lt;/a&gt;Financial &lt;a name="jump_exp_5"&gt; &lt;/a&gt;Instruments&lt;/i&gt;&lt;/b&gt;&lt;/p&gt;
&lt;p style="text-align: justify; text-indent: 0.2in; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; font-size: 10pt;" class="MsoNormal"&gt;&amp;nbsp;&lt;/p&gt;
&lt;p style="text-align: justify; text-indent: 0.2in; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; font-size: 10pt;" class="MsoNormal"&gt;The carrying value of the Company's current assets and liabilities due within one-year approximate fair values due to the short-term maturity of these instruments. Nonfinancial assets and liabilities measured on a nonrecurring basis included on the Company's Condensed Consolidated Balance Sheets consist of long-lived assets, including cost-method investments and long-term subordinated notes issued to OMAX that are measured at fair value when impairment indicators exist. Due to significant unobservable inputs, the fair value measures used to evaluate impairment and to calculate a prevailing market interest rate, respectfully, are a Level 3 input. &lt;font style="color: black;" class="_mt"&gt;The carrying amount of these nonfinancial assets and liabilities measured on a nonrecurring basis approximates fair value unless otherwise disclosed in these financial statements.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="text-align: justify; text-indent: 0.2in; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; font-size: 10pt;" class="MsoNormal"&gt;&lt;b&gt;&lt;i&gt;Reclassification&lt;/i&gt;&lt;/b&gt;&lt;/p&gt;
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&lt;p style="text-align: justify; text-indent: 0.2in; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; font-size: 10pt;" class="MsoNormal"&gt;Certain amounts within the fiscal year 2010 Condensed Consolidated Balance Sheet have been reclassified to conform to fiscal year 2011 presentation.&lt;font class="_mt"&gt;&amp;nbsp; &lt;/font&gt;These reclassifications did not impact total assets or total liabilities of the Company.&lt;/p&gt; &lt;/div&gt;</NonNumbericText>
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&amp;nbsp;
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